Warren Buffett is bearish on the newspaper business model.

“They’re going to disappear,” Buffett said in an exclusive interview with Yahoo Finance editor-in-chief Andy Serwer.

As a teenager, Buffett delivered newspapers. His company Berkshire Hathaway (BRK-A, BRK-B) owns a handful of newspapers including his hometown’s “Omaha World-Herald.” Buffett even hosts a newspaper tossing competition during Berkshire’s annual shareholder meeting.

However, Buffett sees the once bullish trend for newspapers as turned.

To understand why he thinks this, it helps to understand why he believed newspapers worked in the first place. In short, selling newspapers wasn’t about selling news.

“The things that are essentially news is what you don't know that you want to know,” Buffett said. “You know what happened in national sports the moment it happened, and you can go watch a video of it and so on. You can go to ESPN and see what's going on. You know what's happening in politics. You know what's happening in the stock market.”

What you didn’t know was what was going to appear in the ads.

[Click here for coverage of the 2019 Berkshire Hathaway Shareholders Meeting.]

“Ads are news to people”

“It was ‘survival of the fattest,’” he explained. “Whichever paper was the fattest won, because it had the most ads in it. And ads are news to people.”

“They want to know what supermarket's having the bargain on Coke or Pepsi this weekend and so on. I mean, it upsets the people in the newsroom to talk that way, but the ads were the most important editorial content from the standpoint of the reader,” he said.

And ads went beyond what big consumer brands were selling in stores.

“If you were looking for a job, you had one place to basically look, and that was the classified section,” he continued. “If you were looking for an apartment to rent, those pages were just dozens and dozens of pages. That's disappeared.”

As much as the news business has been disrupted by technology like the internet, so has the ad business. And as that business evolved, it eventually declined.

“The world was changed hugely, and it did it gradually,” Buffett said. “It went from monopoly to franchise to competitive to ... toast.”

Buffett, however, identified The New York Times (NYT), The Washington Post and The Wall Street Journal (NWSA) as newspapers that are likely to live on.

But for others, he was less optimistic.

“They're going to disappear,” he said.

NOTE: This story first appeared on April 23, 2019.

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Sam Ro is managing editor at Yahoo Finance. Follow him on Twitter: @SamRo

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