Who Will Report the News? Looks like BH Media… For a While

Image source: Wason Center for Public Policy

Image source: Wason Center for Public Policy

by James A. Bacon

BH Media, a  71-paper newspaper chain, has expanded its reach in Virginia by purchasing the Fredericksburg Free Lance-Star. The acquisition expands the number of print-internet media properties in Virginia from 32 to 33.

The company, owned by Warren Buffet’s Berkshire Hathaway, established a presence in Virginia when it acquired Media General’s newspaper portfolio, including the flagship Richmond Times-Dispatch as well as newspapers in Charlottesville, Lynchburg, Danville, Bristol and a slew of smaller communities. Since then, among more notable acquisitions, the company has picked up the Roanoke Times, the Martinsville Bulletin and now the Free Lance-Star.

The acquisitions are a sign of weakness, not strength, in the newspaper business. By the economic logic of the pre-Internet world, The Free Lance-Star should be prospering — it owns the market in the fastest-growing metropolitan region of Virginia. But digital media have eviscerated newspaper revenues everywhere. The family-owned company filed for bankruptcy in 2014 and was purchased by the New York investment firm that re-sold it last week to BH Media.

Newspapers serve a shrinking audience — mostly an older demographic that never made the switch from print to digital. And its advertising base has been hollowed out the Internet. Classified ads, once the most profitable revenue source of every newspaper, has moved overwhelmingly to an online format.

Consolidation slows the seemingly inevitable demise of newspapers by spreading overhead costs such as finance, administration, human resources and IT over more enterprises. Consolidation also allows newspapers to make more efficient use of expensive, high-capacity printing presses, which represent the industry’s largest capital expense. Newspapers also can pool editorial resources.

What should most concern the public is what the slow strangulation of Virginia’s newspaper industry means to the quality and scope of news coverage in the Old Dominion. Society is more complex than it has ever been. The intertwining of government and business is more pronounced. We have greater need than ever of a vibrant Fourth Estate capable of explaining news to the public, monitoring the political class and keeping the big boys honest. In the print industry’s heyday, newspapers fielded teams of reporters to conduct in-depth investigation and producing lengthy exposes. Only a handful of people read the lengthy treatises that resulted (I wrote a few myself), but the visibility was searing. Newspapers changed society.

Journalism in a Facebook-Twitter world. Who will do journalism’s heavy lifting as newspapers’ economic base continues to erode? According to a recent Wason Center for Public Policy survey, Virginia’s Millennials rely upon Facebook as their number one news source. Facebook doesn’t create any content — readers do, and for the most part, they simply point to content elsewhere on the Internet created by others. While Facebook arguably provides a useful service of allowing readers to aggregate content for their network of friends, from a content-creation perspective, it is a parasite. A very efficient, blood-sucking parasite. Facebook may well capture more economic value from a reader clicking through to newspaper content than the newspaper itself does — and without the considerable cost of collecting, vetting and editing the news.

Millennials do watch national and local TV, but broadcast TV stations are hardly known for their in-depth reporting. Local newspapers rank near the bottom of media they consume. I can foresee a time, 20 or 30 years hence, when Virginia will become destitute of local-regional news beyond the coverage of events and the re-writing of press releases because the economics of the news industry will support nothing else.

We then can contemplate the irony of living in an era of incredibly advanced technology in greater ignorance of what is happening around us than any time since the 19th, or maybe the 18th, century.

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24 responses to “Who Will Report the News? Looks like BH Media… For a While

  1. To educate the public on complex topics and processes like Public-Private Partnerships, we rely on information provided to the newspaper industry as well as social media outlets like Facebook. With the majority of the “experts” in P3’s today not fitting the Millennial group, we will need to keep a close eye on the changes in the overall news industry. Providing non-digital stakeholders and Millennials with the in-depth information will continue to be our responsibility.

    Alas, poor Gutenberg!

  2. Is there a profitable business model for cost-effective high-end journalism without the expense of physical printing presses, newsprint and distribution systems? What I am asking is – is it possible to support quality writing with internet distribution which seems to be where more people are getting their news (of sometimes questionable quality). Is anyone making a profit off their electronic media or is that overwhelmed by the overheads of attempting to publish a traditional paper?

    Years ago Joseph Chilton Pearce cited research that showed our creative center in the brain was diminished by the transmitted light from computer screens and television compared to the reflected light from books and newspapers.

  3. Former Marines are always Marines and former newspapermen continue to be newspapermen at heart. I still love the smell of printer’s ink and live for the front page banner “oh sh*t!” story, something that I haven’t seen online the afternoon before. But neither of my kids subscribes to a newspaper and the only a Wall Street Journal or some other national organ provides me any real substance now….The Virginia papers have gotten so thin. Writing for papers was my retirement plan and I guess I can still find a weekly somewhere….cover the Board of Supervisors and write up the giant vegetables brought in by local farmers. Crozet Gazette here I come.

    It really was a very short run from Ben Franklin to Mark Twain to WR Hearst to Warren Buffett to oblivion. What, 250 years? I too shudder at the world to come. –30–

  4. A media outlet that provided both broad and in-depth coverage of state and local matters, without allowing the staff to use it as their personal platform, would make money.

    I used to read the daily papers from the time I could read with understanding. I followed the Minnesota legislature before I was a teen. My parents and grandparents read the paper daily. As an adult, I subscribed to a daily paper wherever I lived until my wife said eight-plus years ago: Why are we wasting our time & money with the Post? There’s very little in-depth local news. I haven’t missed it.

    I don’t think my kids, now young adults, ever picked up the paper unless they had a school assignment involving the news.

  5. the problem with the print media is that they refuse to understand that most of us cannot pay for full-year traditional subscriptions for ALL the papers yet whether it’s the WSJ or NYT or others – the ONLY option they offer, no, they demand – is full year subscriptions…

    I’m willing to pay – but I cannot pay for all of them and in this day and time, I refuse to pay one of them for all my news.

    so these guys are just in denial about this.

    oh – and the other thing – they offer you a reduced subscription – get your credit card – then set it to auto-renew with no easy way to cancel other than calling a phone number – (as opposed to going online and cancelling).

    so – I’m sorry – I’d like to pay – but I’m not going to do it the way the print media seems to insist… is the only option – so basically they encourage me to go looking for other news sources and not pay at all.

    Newspapers are just one industry. Whether it’s education or medical care or just about any field these days – they refuse to transition to the reality – and fight to maintain the status quo.

    we’re like that also !!! we don’t want to change. we fight to hold on to the status quo!

    of course the other issue is that the more information that is available on the internet – the more some folks choose to grab on to info that confirms their biases rather than deal with the realities…. fully 60% of trump supporters believe the POTUS is a muslim…. this is the kind of “news” that gets “consumed” these days.

    • I think you’ve hit something. In today’s world, more people are interested in reading multiple sources than they were in a paper world. What people might want is more of a cable TV model that gives access to multiple publications for a fixed monthly fee.

      I’ve seen TV commercials for Texture, a service that gives unlimited monthly access to monthly magazines on multiple devices for $10 a month and unlimited access to weekly magazines for $15 a month. Why wouldn’t a similar model work for “newspapers”? That and better state and local news coverage might well work in today’s world.

  6. Then there is LexisNexis, right here in River City – but I wonder what they charge? Last time I had access to that it was a law firm membership and the price was not minor….but the news content they had was just a small part of what the office was paying for. I too have long thought that a model where revenue was shared similar to the way music revenue is shared might work. I would be willing to pay something but would love to have a number of outlets. I spend a lot of time now on Realclearpolitics.com and of course I’m willing to pay for VPAP – which I sponsored today!

    But VPAP, RealClearPolitics, LexisNexis still depend on someone else to produce the content.

  7. TomH is right to ask, “Is there a profitable business model for cost-effective high-end journalism without the expense of physical printing presses, newsprint and distribution systems?” The Washington Post sure hopes that Jeff Bezos can find one. But SteveH’s statement is the one that scares me. He says, “neither of my kids subscribes to a newspaper.” Well, none of mine do, either. They subscribe to on-line “news services” that feed them just what they want to follow, and the result is I can talk to them about a few narrow, niche topics — and they look blankly at me or change the subject if I wander too far beyond their self-selection news filters.

    Now I have to admit, when the broader news feed is dominated by the latest school massacre and Black Lives Matter protests, by clips of Donald Trump and Ted Cruz, by the Paris Bombing and Baltimore riots, by Ebola and Isil beheadings, supplemented by your friend’s report that your favorite Greek island beach has been overrun by Syrian refugees, what exactly would make anyone want to read more about current affairs? But the bottom line is, when it comes to electing responsible people to office, I don’t trust my kid’s generation to exercise “informed” judgment — because they are not well-informed.

    LG and TMT, I don’t like your cable-TV model precisely because it avoids what I have come to value in the Washington Post — if I have scanned the whole newspaper I have a rough overview of all that is going on in the world and city around me, and I make myself do that, for that reason. The ease with which you can select today what news you expose yourself to is a dangerous convenience!

  8. Can’t believe I’m agreeing with Larry on something 😉
    He’s right about the reduced rate subscription scam, perpetrated famously by WSJ. And so they kinda get what they deserve, though I’d probably be willing to pay double the reduced rate in any event for WSJ. It’s that much better than anything else out there. The Washington Compost? Not hardly.

    Also about change: My interim pastor (you know, the guy who comes in after the full time pastor retires and is supposed to clean house so the new pastor can have a clean slate when he arrives) remarked extensively on Sunday about change that must come. Do we want it? Probably not. Will it be painless? Probably not. Did we expect it? Probably not. Is it absolutely necessary? Most definitely yes.

    As for the rest of his post….Nah-h-h. Sorry, Larry.

  9. Knowing what is not working so well anymore – what would everyone want instead? What would be everyone’s preferred source of news for local and national/international news. What would you be willing to pay for it?

    What do you think your children would want?

    Could it be objective or does it need to be partisan to attract a large enough audience that wants to hear what they already believe?

    If bright, capable people such as those that join this conversation want something different, is there any reason that it can’t be provided? There are many talented journalists that are being underutilized. What if we began to create what we do want instead of complain about what we don’t want. That would be a valuable example for the next generation.

  10. re: ” ALL the news in one paper”.

    well – then you’re letting that one paper define the world you know, right?

    Oh.. and Crazy is right about the WSJ – but they’ve gone a bit too far right and sometimes let opinion into their reporting….

    which their alter-ego – the NYT has a habit of also but in the opposite direction…

    when both the NYT and WSJ agree on something – it’s golden!

    but my practice is to try get more than one source on news that is reported differently or in conflict, etc…

    run away from reading only the one that you find yourself in agreement with!!! Seek out what the folks you typically disagree with are saying!!

    • You know, I agree with you that if you ONLY read one paper, it can “define your world.” My point is not that we should read ONLY one newspaper. But, it is important to read/scan ALL of at least one newspaper such as the WP, especially the international/world section, plus enough other material (news magazines? PBS Newshour? yes, even the WSJ?) to counter its inevitable biases. How else can one get the breadth of coverage necessary to be an educated resident of a metropolitan area such as DC/Maryland/northern Virginia?

      • yup. we agree. actually seek out sources you know you don’t agree with to get a perspective that challenges your own biases and beliefs!

        but don’t let any source – and especially so the ones you are most comfortable with – FRAME the world you perceive and this includes sources that “echo” the exact same phrases!!

  11. just a not about the Free Lance Star. They were in the black , profitable – until they built a modern printing plant that was going to print papers from other news publishers – like the Washington Times as their initial primary customer – then they went belly up.

    even then FLS was still profitable but because anticipated revenues from the plant did not reach expectations with respect to debt-ratio – they fell out of “compliance” with their lender – who called in the loan which sent them into bankruptcy and thence into the hands of Sandton Capital which some characterize as Vulture Capitalism much like Bain Capital was vilified with respect to Mitt Romney.

    Sandton – then sold off parts like the radio station and the building itself and downsized staff and generally shed all but the core stuff then sold what was left – and BH Media was the buyer – much to the relief of those who envisioned a worse fate.

    Some wonder what the business model is of BH Media in terms of it’s purchased investments – and I guess one could take two views.

    One that BH Media is just being nice guys trying to save an industry

    or two – they think the industry will survive but in a different form and perhaps as amalgamated parts …

    word is they are running the various papers as part of a corporate operation .. with subsidiaries – benefitting from less duplication of staff and operations.

    the word I get is that papers like this see their future in local and regional news – not national or international news.

    Only a local paper is going to send a reporter to a local school board or board of supervisors meeting….

  12. A couple of thoughts on the future of media:

    A.) I think the future of media isn’t even in the future, it’s already with us. “Real” news is no longer in newspapers. It’s in trade journals. The journals are very expensive and have no online presence. But, since they present very detailed and helpful information, their subscribers are willing to pay.

    B.) Media’s following democracy in this country…basically, I think we may have “show” elections in 30 to 40 years, but the country’s young people are basically giving up on democracy. Honestly, if it weren’t for senior citizens in these last off-off year state and local elections, you wouldn’t have had even 20% turnout. There’s simply little to no interest in democratic politics from those under 45. I’m not sure how it happened. If we went back to 1980 Roanoke or Richmond or Fairfax, the 20 and 30 somethings with college degrees read the paper and actually participated in local gov’t. I bet I could go into the City of Richmond (0r Roanoke or Virginia Beach or Alexandria) today and find married couples with children in which both parents hold graduate degrees….and they couldn’t name a single School Board or City Council member. The degree of “not caring” by young people is astounding.

    • Cville, how much do you believe Millennial checkout with state and local government issues stems from the fact so many aren’t married, don’t have children and don’t own a house? My understanding is that the rates for Millennials for these factors are significantly lower than for previous generational groups. When my “setting” switched on all three of these factors, my engagement (and that of my spouse) with state and local government increased dramatically.

      Also, as a longtime member of the McLean Citizens Association, I’ve seen more younger people become involved in issues that affect their homes and their kids.

      But, it may be more than this.

      • TMT,

        I’ve wondered about the “marriage/house/children” dynamic as well. But, there is still a large minority of millenials that are married and have kids….and again….how many can name a School Board member? If your kids are in public school, I’d think you’d care enough to vote in the School Board elections and to at least know a little of what the School Board is discussing.

        Interesting about the Citizens Association….maybe there’s hope for the future!

    • Ironic, isn’t it? The bigger and more intrusive government is in all aspects of our lives, the less people are engaged. Could that have something to do with the nature of government and the citizens’ feeling of impotence to change anything?

      One interesting finding from the Wason Center survey of Millennials is that they are much more engaged in their communities — presumably where they believe they can make a difference.

  13. huh? has anyone been around when the schools change some policy or redistrict or when some big rezoning is proposed …etc?

    Maybe Cville “mileage” is different but down our way – we have a ton of younger folks involved.

    I work the polls – and it’s common to see folks with kids in tow lining up to vote…. and I can tell you – at our precinct – if we had any bigger turnout – we’d have to add voting machines.. or have 2 hour lines.

    and the other night – a new subdivision was proposed – behind an existing one – and the BOS meeting room was standing room only – and most were working folks… with kids…

    Now – those folks KNEW about the rezoning proposal… and showed up in force… maybe it was Facebook… but it was covered in the papers and the comment sections of the papers showed no shortage of folks making comments…

    so the “big bad intrusive” govmint schtick is bullfeathers…as usual

    • I worked the polls for the recent School Board/City Council election in Charlottesville…..I saw very few young people…I’d say 2/3 of the voters looked to be 55 or older.

      • Perhaps a large percentage of the young people in C’Ville are students and not registered in the district. The younger people who live and work in the city might live in the County where the housing is more affordable.

  14. My four Millennials focus more on creating the community and way of life they want by creating businesses, doing volunteer work and assisting not-for-profits in their projects. They have a great interest in redesigning how things are done, but don’t have much faith in traditional businesses or governments being able or willing to do it. They and their friends are deeply interested in their future and are seeking good ways to shape it. In many elections, the response is “none of the candidates represent my interest”. They would rather spend their energy creating a new system that works works rather than fix an old one that is broken.

  15. Larry,
    You’re wrong about WSJ being too far right, unless you’re talking about the editorial page. The difference between WSJ and NYT is WSJ keeps their opinions on the editorial page. In fact, there was a university study some time ago showing that the news pages in WSJ were among the most, if not the most liberal, which I found odd since they don’t do anything with opinion in their news pages, unless you say that stories on the economy are right wing.

    Indeed, you can make an argument that story selection IS opinion. So, if I’m NPR and all my stories are about the environment, global warming, abortion, race, unions and strike actions, health care, etc., and not much (until relatively recently when it could no longer be ignored) about the various incarnations of islamic radicalism, that’s an opinion in itself about what’s important because it says “These things are a problem” When you don’t say much about islamic state, it’s because you buy into the notion that they’re “JV”, or otherwise not a real problem. In fairness to NPR (which we affectionately call National Commie Radio), they’ve gotten slightly better recently. Quaere: is it because they’ve been forced to do advertising and now have sponsors, some of whom are quite wealthy? See e.g. Heather and Paul Haaga

    • A University Study? ha ..bhahahahahah – you TRUST those leftist liberal idiots? really? since when?

      😉

      the problem with the right, in general these days is that they have morphed primarily into a herd-like (echo chamber) sound-bite culture… that take a term like JV and group swing it like a dead cat until parts come off of it – and revel in spectacle…. !!!!

      they’ve become a party of individual “ideas” but cannot even agree among themselves on which ones to adopt to get behind and move forward so major issues like immigration, health care, middle east etc have become a cacophony chattering minions….

      No modern GOP POTUS would meet their expectations any more and it’s not just they have shifted far right – it’s that their proposed “solutions” are just plain looney tune… they’d totally get out of transit, for instance, because it’s govt-run and subsidized… no more highway money for them!

      be honest – if the GOP were in charge – wouldn’t a hefty majority of them want to kill the Federal role in transit – right?

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