The Philadelphia Inquirer officially buckled this weekend when it filed for bankruptcy...
And a friend of mine in the online advertising field says big East Coast newspaper titans are paying through the nose for subscriptions they get through web ads. They're in a deep hole, desperate to get out.
A few media companies, though, played smart and stayed ahead of the new media curve.
South Africa's Naspers Ltd. is one of them, and it looks set not only to survive, but even to be one of the world's top stocks between now and 2011.
Naspers Isn't Married to Newsprint
Naspers started out as a newspaper nearly a century ago...
But within just a few years the founders branched out into books and magazines.
By the 1980s, it and a few other South African media companies started a pay-TV company.
In 2001, Naspers picked up nearly half of Tencent Holdings, a Chinese instant messaging company. That gave Naspers a foothold in China's recent economic boom as well as a best stock with technology used by hundreds of millions of web surfers around the world.
Hong-Kong shares of Tencent (HK:0700) turned out to be a blockbuster pickup for Naspers, gaining over 1200% since 2004.
Other ventures outside the home market put Naspers in Greece, Brazil, Russia, India, and even the U.S.
Now, with the 2010 World Cup coming to South Africa (tickets went on sale Feb. 20), soccer seems to be helping Naspers achieve its profit goals in more ways than one.
Sponsored Links:Kicking Off Profits for Years to Come
A subsidiary of Naspers just won the rights to broadcast English Premier League games to satellite TV customers across sub-Saharan Africa.
As the world's biggest sporting event approaches and Naspers gets ready for prime ad placement that will reach billions, the company's balance sheet will be boosted by hordes of new customers.
Tapping the Premier League's worldwide fan base and signing African soccer nuts up for satellite service packages is enough to give Naspers a 40% upside boost over the next 2 years, David Shapiro of Johannesburg's Sasfin Holdings said recently. "The Africa kicker makes a big difference," Shapiro added (pun probably intended).
And Naspers is just one part of a broader trend of South African companies extending their reach and business model across the continent.
The iShares MSCI South Africa Index ETF (NYSE:EZA) and SPDR S&P Emerging Middle East & Africa ETF (AMEX:GAF) both count Naspers as a top holding.
So even though Naspers shares trade over the counter here in the U.S. (OTC:NPSNY), it's better to pick them up as a package of South African hot stocks that will benefit from the World Cup's exposure and southern Africa's expected 5% growth through the developed world's downturn.
David Shapiro says the Johannesburg Stock Exchange All Share Index should pop by just over 10% in 2009, versus what will almost certainly be a losing year for the Dow.
No wonder African stocks market may be the best gainers, as satellite TV and mobile phones make up the base of a "leapfrog" economy where people are brought into the 21st century economy directly, without retrofitting old infrastructure.
As far as media stocks are concerned, companies that still gear their business model to how many words fit on a page, or how many newspapers one city buys, simply won't be around much longer.
There's a new model for international business, and the best strategies are increasingly coming from outside the U.S.
Look for a new crop of global growth top stocks like Naspers to emerge out of this recession.
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