Just when devotees of newspapers thought it was safe to go outside…
It’s been an incredibly tough four-plus years for newspapers and magazines. And not just because of the dour economic landscape. The Kansas City Star has laid off hundreds – going from a staffing of more than 2,000 employees 10 years ago to around 700 today. The city’s second largest print player, the Johnson County Sun, is no longer even in business having been shuttered by its area owner that had invested millions in buying and running the suburban weekly. The Pitch was fire saled off to an out-of-town buyers a year ago after years of churning out red ink, its long term future yet in doubt.
And now comes news that the vaunted New Orleans Times-Picayune is poised to enact massive staff cuts and reduce its newspaper circulation from daily to just three days a week this fall. To which I now suggest that you read it here first.
How few times a week can a daily paper publish and remain viable, I asked former Star publisher Art Brisbane in February of 2009.
"Obviously there’s something known as a weekly out there, but I don’t know the answer to that," Brisbane – now the New York Times public editor said then. "They could have a daily printed product, but maybe look at doing it differently. Maybe print a free six-days-a-week paper but with only 40,000 copies a day and on Sunday you have a mega paper with 300,000 or greater circulation. That way you preserve the single most profitable part of the paper which is the Sunday paper – that is overwhelmingly the most profitable part of the paper. The problem though is, you reduce your visibility and the newspaper reading habit."
The understanding being that like New Orleans and a handful of other newspapers owned by its parent company, daily online publishing would continue.
"There’s another dimension that makes it very difficult for newspapers and that’s that it’s not going to be easy to shift from print side revenues and profits to the online side," Brisbane added. "A lot of companies are trying to do that, to (convert) the loss of print revenues to Internet revenues and it makes a lot of sense to try to do that. But the reality is the profits from Internet revenue are a lot less. The problem is that newspapers had a virtual monopoly over print advertising, but on the Internet there is virtually no barrier to entry, so they cannot leverage their rates up because there’s so much competition. And because of that it’s hard to generate profits and what’s happening is the decline of the print side is so much greater than the rise on the Internet side."
For example, the Ann Arbor News stopped printing its daily in 2009, but continued to deliver the goods online while publishing a print edition twice weekly. Several other Michigan papers followed suit earlier this year.
Poynter Institute business analyst Rick Edmonds‘ take:
“On the one hand, they liked it enough that they did it with the rest of the Michigan papers," Edmunds says. "On the other hand, I’ve never had the impression that it’s been a real financial success, and it has the typical difficulty of trying to generate meaningful online ad revenues.”
The publisher of the online-only Ann Arbor Chronical, Mary Morgan told Poynter the following:
"You can find isolated community voices who offer a positive take on some aspects of the publication. However, with respect to its overall journalistic success, it’s fair to say that the general sentiment in the community ranges from disgruntled resignation to outright loathing. …
"Having watched the debacle here as it continues to unfold, I find it incredible that (it owner) would impose this on another publication, particularly one as storied as The Times-Picayune. It’s truly baffling. Or maybe not: Owners who don’t live in a community — or in the same state or region —see these publications as commodities to be optimized."
Poynter notes that the Detroit Free Press and Detroit News still print papers but only deliver them three times a week, offering readers "slimmed-down" editions at newsstands.
And allow me to remind you, this is about the business model of print, not just the economy.
CNN reporter Gloria Borger tackled the topic Friday.
"And newpapers, well, they take another step in the way of the dinosaurs," Borger said. "How much longer can the business hang on?"
"New Orleans will now become the largest metro area in the nation now that doesn’t have a daily print newspaper," Borger continued. "We have seen this starting to happen at newspapers for years now. We know that the economy is going in the wrong direction as far as newspapers are concerned."
Borger then asked CNN media host/reporter Howard Kurtz, "Does this mean that all daily newspapers are going to of the way of the steam engine?"
"I certainly hope not," Kurtz began. "(But) newspapers need the revenues provided by the print advertisements because online ads produce a fraction of the money coming in."
Print ads accounting for about 86 percent of newspaper revenues, Borger added.
"Look, the trend is moving in this direction and it really pains me to say that," Kurtz added. "I don’t think print is going to disappear completely but it may in some communities."
"Here’s the problem," Kurtz continued. "When you shrink the revenue and you cut the staff, which is also happening in New Orleans, you are crippling the reporting that those communities rely on…You know, newspapers are already cutting back. For example, you go to any state capital in the United States and there are far fewer print reporters there than there used to be. That means fewer people keeping an eye on the governor, on state legistlators, on contracting. Now, that’s important stuff if you live in that community and I don’t see local TV or Web sites stepping up to fill that breach."
Kurtz unfortunate bottom line:
"Newspapers can’t be everything to anyone anymore. Their economic model is not there any more. But they do some things very well…But also if you’re in New Orleans or Tampa or St. Louis or San Francisco, you rely on that local paper to hold your public officials accountable. We’re oin to be seeing less of that."
Brisbane’s three year-old prediction for the future of newspapers still stands:
"I don’t want to make a prediction about The Star but in general a number of newspapers will probably close and some of the newspaper companies will go bankrupt. And when that happens – let’s say some newspaper that has become unprofitable – the question is will anybody step up and buy it and try to run it successfully. You would think they would but we haven’t had a situation that has tested that prospect yet."
Until that is, the Oracle of Omaha, Warren Buffett.