Newspapers is a dying industry. Newspapers will survive in the digital space but they are no longer the cash cows they used to be. Social media and blogs have taken readers from newspapers. Alternate news media and some politicians have eroded the trust many people have in newspapers. Facebook, Google, and classified advertisement sites like Kijiji have taken the advertisement revenue from the newspapers.
The good news is that newspaper stocks are selling at an all time low. Should you invest. The stock prices have dropped so much. How much lower can they go? Zero. Price can go to zero, meaning investors can lose everything. Do you expect newspapers to ever rebound and become very profitable growth companies. It is possible but not likely. It is easier to start new online news companies and make them successful than to reform outdated business processes and practices that are no longer profitable in today’s business environment.
Companies in a dying industry will most likely die out. The will replaced with new businesses that address the business needs of the current climate. Is there a market for urban horse stables, oil lamps, typewriters, beaver pelt hats, stagecoaches, or video cassette rental. These were all thriving industries with many profitable companies competing for market share. Stables were replaced by parking lots, oil lamps with electric lighting, typewriters with computers, stagecoaches with vehicles, and video rental with Netflix.
When you see a dying industry, see who is replacing the dying companies. Instead of investing in dying companies, try to figure out which new company will dominate the new market and invest in it instead.
