The newspaper industry got too complacent with its success years ago, says Warren Buffett, and failed to change its business model to grow with the times.

"It is so easy when you've got a wonderful business," Buffett told E&P during a recent interview. "Complacency is pretty easy and it is why they weren't looking over their shoulder at what was happening."

Buffett, the billionaire owner of The Buffalo News and CEO of Berkshire Hathaway, spoke with E&P for an upcoming story in our January issue on the News, which he has owned since 1977.

Saying his interest in owning a newspaper "is not totally rational," Buffett says he is content with just one. But he also sees that the industry as a whole did not properly utilize the Internet when it came on the scene.

"When the Internet came along, you gave away your [online] product for free and charged for it in another place [print]," he says. "I'm not positive what you would have done differently, but not figuring out some kind of business model was a mistake."

Buffett, who sits on the board of The Washington Post Company, also points to circulation revenue as a missed opportunity: "They should have probably tried to get more revenue from circulation over the years. Newspapers were essential years ago," he states. "If they had trained [readers] to value it more, they might have had a model that worked in this environment."

The one-time newspaper delivery boy adds that Web revenue is still there, although he stops short of saying the News would begin charging for online: "One way or another, you need a different business model for the dailies. We need to get quite a bit of revenue from online. It is the place where people go."

Asked if the News would charge for online content, he says, "we are going to look at everything everyone else does. How do you charge when a thousand other people don't? We have a business model that is eroding. The whole industry. But we still have a huge base of readers."