Lauren Rich Fine, Merrill Lynch & Co.'s top-ranked newspaper industry analyst and a voracious newspaper reader, is optimistic about the future of newspapers - even if her teenage children won't pick up the print editions.
"Interest in news is greater today than it's ever been," she said. And while interest in newspapers themselves has declined, the companies likely to survive view the Internet as an opportunity to reinvent themselves rather than as a threat to the way things used to be.
"There's no way to go back to where the in dustry has come from," she said.
Fine said newspapers can't operate under the same business model, can't expect the same profit margins and might not be able to sustain the newsprint versions of their product. But there will always be an audience for the things they do best: pursuing investigative journalism, keeping governments accountable and providing local stories you won't get anywhere else.
Fine, the Shaker Heights-based first vice president and managing director of equity research for Merrill Lynch and the longest-tenured newspaper analyst on Wall Street, spoke Thursday at the City Club of Cleveland to an audience of about 85. Her remarks were part of a series on the future of the news media.
Even though she reads three newspapers a day - The Wall Street Journal, The Plain Dealer and The New York Times - she said her children's generation reads only the online versions of newspapers and other media. Whereas 70 percent of 18- to 34-year-olds read newspapers in the 1970s, only 35 percent of that age group do so today.
And although putting Anna Nicole Smith's death on the front page "makes everybody who works for the paper want to throw up violently," she praised newspapers for experimenting with new ways to attract readers - such as giving them a say in which high school games to cover.
Fine, a member of Institutional Investor's All Star Team for 13 years and a No. 1-ranked analyst for eight years, said national newspapers such as The New York Times, The Wall Street Journal, USA Today and The Washington Post will survive.
Smaller local papers, such as the Sun Newspapers and niche publications such as the Cleveland Jewish News, will also endure because they have exclusive content people will pay for.
"I think there's an enormous, unsated appetite for really local news," she said.
The Washington Post Co., for example, draws more than half its revenue from its for-profit Kaplan educational services, which allows the newspaper to continue its watchdog role without worrying about earnings.
The E.W. Scripps Co., based in Cincinnati, owns the very profitable Home and Garden cable-TV network and other stations that pay for its journalism ventures.
The St. Petersburg Times, which is owned by the nonprofit Poynter Institute, "is considered one of the best newspapers in the country," Fine said.
"For people who love newspapers and want to see them survive," she said, "there are models to make it work."
To reach this Plain Dealer reporter: jcho@plaind.com, 216-999-5069
