'Not our finest': Newspaper decline has Buffett, Munger foxed

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Billionaire investor Warren Buffett has named just three newspapers with significant digital revenue to make up for what they are losing in print.

Speaking at the Berkshire Hathaway annual meeting on Saturday, he named the Rupert Murdoch-owned Wall Street Journal, the New York Times and "now probably" the Jeff Bezos-owned Washington Post as having come up with "a digital product that in any really significant way will replace the revenue that is being lost as print newspapers lose both print circulation and advertising".

Admitting that the portfolio of daily and weekly newspapers BH had bought since 2011 might not have been a good investment, he added that while the economic significance to BH was "almost negligible, the significance to society, I think actually is enormous."

Buffett said he had been surprised that the rate of decline had not moderated in the last five years. Circulation figures for the BH papers had been included with this year's report to shareholders, who were "entitled to look year-to-year at what is happening".

"It is very difficult to see, with the lack of success in terms of the important dollars arising from digital... how the print product survives over time and I'm afraid that's true of 1300 papers in this country," he said.

Having bought newspapers at "reasonable prices", the decline was "not a great economic consequence" to BH, but Buffett added, "I would like to see daily newspapers actually be economically viable because of the importance to society."

He said the WSJ, NYT, "and probably The Post" have a viable economic model in the digital world and will probably continue to shrink in the print world. "But the digital world will be big enough and they'll be successful enough so that they have, in my view, a sustainable business model."

He said it was difficult to see how print products would survive over time. "The business has changed in a very material way and we haven't able to figure any solutions, but we will keep trying."

BH vice chairman Charlie Munger said the decline was "faster than we thought it was going to be... so it was not our finest bit of economic prediction.

"I think it's even worse to the extent we miscalculated. We may have done it because we both love newspapers and have considered them so important in our country.

"We're going to miss these newspapers terribly if they go."

• See Buffett and Munger speak on YouTube

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