Newspapers will get tough with websites that offer newspaper articles on the Internet without paying, the head of Warren Buffett's newspaper group said in Omaha Thursday.
“We're going to start defending our turf,” said Terry Kroeger, CEO of BH Media Group, the newspaper division of Berkshire Hathaway Inc. “Our industry's going to get a lot more aggressive about theft.”
“Theft” accurately describes the conduct of Internet “aggregators” that don't pay for information that newspapers spend millions of dollars to gather and edit, Kroeger said. So far the industry has “done a lousy job” of being paid for its content on the Internet, he said, “but it's a fight worth fighting and it's a battle worth winning.”
Kroeger spoke to about 120 people at a breakfast meeting of the Association for Corporate Growth, a group that focuses on business mergers and related topics. It was held at Happy Hollow Country Club.
Berkshire, whose chairman and CEO is Warren Buffett, acquired the Omaha World-Herald Co. in December and 65 other newspapers since then. The newspapers are managed under BH Media Group. Kroeger also is publisher of The World-Herald.
His comment about newspaper content theft was in response to a question from an audience member who said he had used Google to look up information and found free access to stories by publications that charged subscription fees.
Kroeger said newspapers are finding ways to be paid for the online products they create and to protect that content from unauthorized use. “We need to not only take pride in our unique, comprehensive coverage, but also insist those who wish to consume our content need to pay for it.”
During the recent election, Kroeger said, he heard from Nebraskans who thought The World-Herald news coverage was part of a conspiracy to elect Democrat Bob Kerrey to the U.S. Senate because Kerrey is Warren Buffett's friend.
“No way,” Kroeger said. Republican Deb Fischer was endorsed by The World-Herald's editorial page and won the election.
“We hold sacred the notion that our newspapers need to operate autonomously and independently, particularly as it relates to matters of coverage, political endorsements or dealing with their customers,” he said.
In response to another question, Kroeger said that at some news organizations — he mentioned Fox and CNN — the line between news and opinion has been “blurred,” but he said The World-Herald “plays it as straight as it can.”
Newspapers have “a credibility asset that can't be duplicated, particularly in our local markets. We have a priceless asset upon which we can capitalize,” he said.
Kroeger said Berkshire is buying newspapers in part because “most American newspapers remain very profitable operations.” Newspapers “can provide pretty attractive returns at those purchase prices, if you understand how to operate them efficiently while providing the quality product that our readers and advertisers expect,” Kroeger said.
Berkshire is interested in newspapers in cities of Omaha's size or smaller, he said, where a “true sense of community exists.” He said that to avoid “corporate office syndrome,” each top executive will reside at and have responsibilities at an actual newspaper.
“It sure helps you to stay grounded when you take calls from readers who have a wet paper.”
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