Hearne: Dramatic Cutbacks in New Orleans Bad Sign for Newspapers

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.

However…

"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.

Stay tuned…

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9 Responses to Hearne: Dramatic Cutbacks in New Orleans Bad Sign for Newspapers

  1. Super Dave says:

    Well people don’t read papers anymore. Wall Street Journal is only thing I care to read anymore. The Star to often gets behind the story instead of reporting all of the story to the readers and for that reason I could care less about reading it and have felt that way for years.

    Far as I am concerned they all have cut their own throats and have nobody to blame for it but themselves.

  2. Hearne says:

    To your point…
    While I was in Mexico the Star parroted a week-old KCTV story about the mayor’s son getting busted with a postscript that, “Details of the incident were not available Sunday.”

    Now, a week later, still no update on the incident – no real reporting by the newspaper – no details or followup.

  3. BMAN says:

    I like print, but…
    they forgot what real reporting is and for that a lot of people quit buying papers. One of the only good papers left is the Wall Street Journal, which I subscribe to.

    Good job reporting, Hearne!

  4. Super Dave says:

    I love to read and not a Kindle fan at all I want the book in my hand and read everyday. I wish we had a city wide paper to read hell I would take it.

    But to run an honest paper you have to report the facts as they happen not as you want your readers to think they happened. The Stars biggest issue is it can not or has not ever been a paper that can be an unbiased about things. It’s ok for the editor to have an opinion and to write that but that is where opinions end. The Star wants to push people into what they think is best for KC or cover up for people they happen to think walk on water and not report bad news as Hearne just pointed out.

    Hell you are rich Hearne buy The Star and run it right hell far as I am concerned it’s only worth a couple of grand and thats poclet change for you.

  5. Balbonis moleskine says:

    Took a superior product and turned it into an inferior one
    Newspapers used to have a lot more to them-

    there were miles and miles of box scores for leagues you barely heard of. Foreign correspondents were able to tell the untold stories via their affiliation with AP, Reuters or AFP foreign offices that were then sent out to the KC Stars of the world. Business section was where you looked at the stocks.

    Now they don’t print box scores, they dont print stocks (only ‘selected’ ones, what good is getting closing prices on 75% of your portfolio?), and their international reporting is pretty pedestrian as foreign correspondents are expensive.

    The KC Star always used to protect the monied interests that bought ads. Remember the Hereford House fire? Look at those stories all the way up and into the indictment and they were SOFT. real SOFT. That was a bias that was easily identified.

    The things people seem to get upset about now is inaccuracies to outright lies in the crime reporting. When a story has a suspect still at large, it does no good to not provide a picture or a description of their race. But in some sort of misguided social engineering, it has been the Star’s policy to not publish the races of suspects or criminals. I can at least understand the flimsy justification for not publishing on captured criminals but at large criminals need a description to aid in their capture.

    Instead of charging more for the paper and making it a status symbol (like the journal). It became the place where you got mediocre, dishonest reporting, recipes and coupons.

    And to paraphrase Tony Montana, ” look at you now”.

    The Times-Picayune problem was more demographic change plus the macro level newspaper problems. After Katrina, NOLA got poorer and less educated—losing about a third of their population. Blacks did not enjoy the Picayune, prefering the New Orleans Tribune. When their majority white readership sold their houses, took the insurance money and moved away they subscribed their new hometown paper.

  6. bschloz says:

    Print 2.0
    Buffet is dumb as a fox – he is currently making a big bet on Newspapers .
    “Earlier this month Warren Buffett bought 63 newspaper titles through his holding company Berkshire Hathaway.This surprised many people, both inside and outside the industry, because the newspaper business isn’t what it used to be.”

    After all that debt gets soaked up I say Buffet will be there. He probably will steal it.
    This would be our best case sceniario — even with the NFM ads.

    18-35 olds think everything online should be FREE– I believe Newspapers need to deliver value to paid subscribers only. Honestly why should my $ go to fund INK and Online

  7. randyraley says:

    i’m not dead yet
    Buffett bought every newspaper in that chain except one.
    In a large market, Tampa, he decided to pass.
    He issued a quote..paraphrasing now…about how the back bone of the small community still runs through it’s daily newspaper.
    He also purchased $200 million dollars in Lee newspaper’s debt. he obviously sees SOMETHING there.
    Believe it or not, there are still places where there is no high speed internet.
    While the large markets are hemorraging circulation, not so it the smaller towns.
    In those communities, the daily still rules. The largest gains for on line reading? Mobile.
    Smart phones are now the next revenue opportunity.
    Out of town owners who aren’t in touch with their communiuty…wow, what other media does that remind you of?

  8. smartman says:

    Old Country Buffett
    This is the same man that persuaded the Coca-Cola Board of Directors NOT to buy Gatorade, letting rival Pepsi buy it instead. Probably a worse mistake than New Coke. I’m sure he sees something in this recent acquisition, just not sure what it is…..unless it’s to ram the commie lib Obama party line down the throats of the godforsaken cornpone during the presidential election. Hell Warren why not just give away a half vanilla and half chocolate ice cream cone through your Dairy Queen holdings? That’ll make the same point in a less expensive way. Obama is chocolate AND vanilla. Romney is just vanilla? Two is better than one.

  9. the dude says:

    Newspapers are dead,
    finally buried by vulture capitalists worried more about squeezing the last ounce of profit than printing all the news that fits.
    Sad.

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