Billionaire investor Warren Buffett said newspapers need to stop giving away their product for free online, but they will have a decent future if they continue delivering information that can’t be found elsewhere.
Buffett talked about the news business on CNBC on Monday because his Berkshire Hathaway owns two newspapers and has a sizeable investment in the Washington Post Co.
He said newspapers face challenges because of competition from Internet news sources and the rising cost of newsprint. He said newspapers need to make sure they remain the primary source of information about subjects readers are interested in.
He also said Berkshire’s plan to replace him hasn’t really changed. Buffett said the new language he used to describe the succession plan in his annual letter to shareholders wasn’t a sign of change. He said in his letter released on Saturday that Berkshire’s board had chosen someone to succeed him as CEO someday, and it has two backup candidates. Previously, Buffett had said the company had three internal candidates. None of them have been identified.
He said stocks remain relatively cheap compared to other investments right now, and the US economy continues to improve slowly.
Meanwhile, a drop in the paper value of the financial instruments known as derivatives hurt profits at Berkshire.
Berkshire reported fourth-quarter net income of $3.05 billion. That was down from $4.4 billion net income, a year ago.