Sarah Erickson and Peter Beller certainly believe that they have figured out the specific criteria that Warren Buffett uses when he makes his newspaper purchasing decisions. The criteria they believe being used is that the paper needs to be a small circulation, it must have a favorable ratio of online to print readers, and it should have high market penetration. All of these factors increase the likelihood that the newspaper will continue to flourish for some time to come.
“We run a very profitable newspaper business. We can do that better with under 35,000 circulation,” a Berkshire Hathaway executive that chose to remain nameless told that both Erickson and Beller. “[We have] who you call our core subscribers, [so] the ad revenue on the community side is more stable than in the top 50 markets.”
One of the major lessons learned by Erickson and Beller while studying all of Warren Buffett’s purchases… “Don’t sweat falling circulation so much.”
The newspapers owned by Berkshire Hathaway are also losing circulation just like all the others. Some papers have a circulation shrinking faster, and then other papers seem to be holding steady and in some cases the circulation is growing. On the whole, Buffett’s newspapers lost 3.5% of their readers over the last year. This is roughly about the industry average on the whole, and much worse then the top 10 non-national dailies, which actually gained 1% readership as of the past September.
Warren Buffett has not purchased a newspaper in 21 days. At the time of this writing, he owns 269 publications and 27 daily newspapers in total.