Almost since I began this blog I’ve talked off and on about newspapers.  Living in Chicago, I’ve taken more than a few pot shots at the local establishment – Tribune Company, owner of The Chicago Tribune.  Don’t get me wrong, I love "the Trib," as we call it in Chicago.  For decades a great newspaper.  And because I’m over 49, I still like reading papers.  Heck, I very frequently put links in these blogs to the Trib’s web site.  Good product at a good price.  In fact, in today’s economy, probably too good a product for what I have to pay as a discount subscriber and on-line reader.

Even though all of us are used to the daily newspaper – including the travelers that pick up USA Today and those who just get the Sunday paper for "the ads" – it will disappear.  Or at least change form so drastically it won’t appear like it used to be.  That may be hard to accept – but then again, do you remember listening to 33’s, 45’s (and if that means nothing to you don’t worry, you’re just young) and LP records; Or 8-tracks, or cassettes?  And soon, even CD’s will disappear to the growingly popular MP3 player.  Nowhere is it given that we deserve a daily printed newspaper, and in today’s world it’s existence is becoming less viable by the month (read CBS Marketwatch on "Death Knell for Newspapers" here.)

You may be surprised to know that newspaper readership peaked in the 1950s.  But you shouldn’t.  After all, radio, television and cable TV all ate into newspapers’ share as a source of entertainment and news.  The internet is just the latest competitive technology – but it is the one which has pushed the industry into the Whirlpool from which it won’t return.  Newspapers have used their resources in many valuable ways, but they have little to none left they can use to become the next Google or Marketwatch.  Most are overleveraged (read my past missives on the debt ladening of Tribune by Sam Zell), and all are short the cash (or debt capacity) to catch up with those who invested heavily into web growth a decade ago. 

Defend & Extend Management never stops believing there is some way to save a dying business.  But businesses do become obsolete.  Mail order catalogs were once great, but in an internet world?  Printed stock prices were valuable until on-line brokers came along.  Heck, I remember when we used to have television repairmen – and they even came to our house and picked up the TV then returned it after repairing!  Now we throw the thing away – and I don’t know where you’d find a repair person.  My parents helped make the Kerr and Ball companies a lot of money by home canning vegetables they grew in the family vegetable garden -but what is the current market for companies making quart jars and home canning lids?  Would you believe that we used to have operator manned printing presses in corporations to make copies of business documents?  And carbon paper for multiple copies out of typewriters?  Obsolescence happens, but D&E managers never see it.  They are paid to follow a "never say die" approach to markets.

Only by constantly Disrupting and maintaining White Space can we hope to keep our companies long lived.  No manager has a crystal ball for the future.  Predicting the demise is very hard to do.  It’s smarter to keep looking for growth, and be optimistic in finding it.  Constantly looking for the direction to go is far better than trying to defend a business bound to shrink.  Now that even the newspaper industry’s own study group is saying the industry won’t come back investors should start thinking about where they are putting their resources.  No, it may not be commonplace to take a laptop in for the "morning constitutional" – but we’re bound to lose that broadsheet sooner than most people think.