Washington Post 2005 Annual Report Download - page 38

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‚ Changing Preferences of Readers or Viewers
The Company's publishing and television broadcasting businesses need to attract significant numbers of readers and
viewers in order to sell advertising on favorable terms. Those businesses will be adversely affected to the extent individuals
decide to obtain news and entertainment from Internet-based or other media.
‚ Changing Perceptions About the Effectiveness of Publishing and Television Broadcasting in Delivering Advertising
Historically, newspaper and magazine publishing and television broadcasting have been viewed as cost-effective methods
of delivering various forms of advertising. If a consensus emerges that other media in which the Company has a less
significant position are superior in terms of cost-effectiveness or other features, the profitability of the Company's publishing
and television broadcasting businesses could suffer.
‚ Technological Innovations in News, Information or Video Programming Distribution Systems
The continuing growth and technological expansion of Internet-based services has impacted the Company's media
businesses in various ways, and the deployment of direct broadcast satellite systems has significantly increased the
competition faced by the Company's cable television systems. The development and deployment of new technologies has
the potential to affect the Company's businesses, both positively and negatively, in ways that cannot now be reliably
predicted.
‚ Changes in the Nature and Extent of Government Regulations, Particularly in the Case of Television Broadcasting and
Cable Television Operations
The Company's television broadcasting and cable television businesses operate in highly regulated environments and
complying with applicable regulations has increased the costs and reduced the revenues of both businesses. Changes in
regulations have the potential to further negatively impact those businesses, not only by increasing compliance costs and
(through restrictions on certain types of advertising, limitations on pricing flexibility or other means) reducing revenues, but
also by possibly creating more favorable regulatory environments for the providers of competing services. More generally,
all of the Company's businesses could have their profitability or their competitive positions adversely affected by significant
changes in applicable regulations.
‚ Changes in the Cost or Availability of Raw Materials, Particularly Newsprint
The Company's newspaper publishing businesses collectively spend over $100 million a year on newsprint. Thus material
increases in the cost of newsprint or significant disruptions in the supply of newsprint could negatively affect the operating
results of the Company's newspaper publishing businesses.
‚ Changes in the Extent to Which Standardized Tests Are Used in the Admissions Process by Colleges or Graduate
Schools
A substantial portion of Kaplan's revenues and operating income are generated by its Test Preparation and Admissions
Division. Thus any significant reduction in the use of standardized tests in the college or graduate school admissions
process could have an adverse effect on Kaplan's operating results.
‚ Changes in the Extent to Which Licensing and Proficiency Examinations Are Used to Qualify Individuals to Pursue Certain
Careers
A substantial portion of the revenues of Kaplan's Professional Division comes from preparing individuals for licensing or
technical-proficiency examinations in various fields. If licensing or technical-proficiency requirements are relaxed or
eliminated to any significant degree in those fields served by Kaplan's Professional Division, such actions could negatively
impact Kaplan's operating results.
‚ Reductions in the Amount of Funds Available Under the Federal Title IV Programs to Students in Kaplan's Higher Education
Division Schools
During the Company's 2005 fiscal year, funds provided under the student financial aid programs created under Title IV of
the Federal Higher Education Act accounted for slightly more than $500 million of the net revenues of the schools in
Kaplan's Higher Education Division. As noted above in the section titled ""EducationÓTitle IV Federal Student Financial Aid
Programs,'' any legislative, regulatory or other development that had the effect of materially reducing the amount of Title IV
financial assistance available to the students of those schools would have a significant adverse effect on Kaplan's
operating results.
22 THE WASHINGTON POST COMPANY