THINK!: Does cutting costs cut circulation? Government Sachs thinks so.

Wednesday 29 October 2008

Does cutting costs cut circulation? Government Sachs thinks so.

Here's newspaper industry analyst Peter Appert of Goldman Sachs (who naturally follows the NYT Company very closely) speaking about declining circulation and where it might come from.

Appert, if you follow him, is, in MHO, one of the few decent newspaper analysts out there.

Below taken from a RICHARD PÉREZ-PEÑA piece in the NYT. (Not of course that a NYT journalist would any sort of axe to grind on this point. He could have quoted many newspaper analysts, from analyst conference calls for NYT Co. results, banging on about more cost cutting.)

Analysts have warned in recent years that by offering steadily less in print, newspapers were inviting readers to stop buying. Most papers have sharply reduced their physical size — fewer and smaller pages, with fewer articles — and the newsroom staffs that produce them.
“It just seems impossible to me that you’re cutting costs dramatically without having some impact on the editorial quality of your product,” said Peter Appert, a newspaper analyst at Goldman Sachs. “I can’t prove that this is driving circulation, but it’s certainly something that if I were a newspaper publisher would keep me up at night.”

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