By paulgillin | November 3, 2016 - 8:21 pm - Posted in Advertising, BusinessModel, Layoffs, Murdoch, Newspapers

After a spate of closures and layoffs in the latter part of the last decade, the newspaper industry appeared to find its footing over the past few years. But now that oasis of stability may be drying up.

Hard times are hitting some of the most resilient titles, and the trend indicates that things are only get worse. The decline in print advertising revenue at The New York Times has accelerated from 9 percent in the first quarter of 2016 to nearly 19 percent in the most recent quarter, writes Mathew Ingram in a Fortune story ominously headlined “The New York Times Scrambles to Avoid Print Advertising Cliff.” In announcing its financial results, the paper said it expects the falloff to continue “at a rate similar to that seen in the third quarter,” or at least 19% per quarter.

The only good news in that statement is that sequential 20% declines take a smaller total dollar bite out of revenues with each iteration because the base number is smaller. But that’s the only good news. If the last three quarters are any indication, the Times advertising business is in free-fall. The paper has done a better job than anyone of growing its base of circulation revenue and increasing its digital advertising business, but both pale in comparison to the size – and profitability – of the print advertising business.

Almost in tandem with the Times’ disappointing financial results, The Wall Street Journal announced that it will consolidate sections and lay off staff as it seeks to stabilize its print business while it scrambles to grow its digital operations. Last week, the Journal laid off the staff of its “Greater New York” section and offered buyouts to 450 employees. Only 48 took the package, indicating that things could get ugly soon.

A new “Business & Finance” section will combine the Journal’s current “Business & Tech” and “Money & Investing” sections, Reuters reports. New York coverage will be reduced and moved into the main section of the newspaper.

The Journal has proved more resilient to the downturn than most print newspapers because of its pricey subscriptions and well-heeled readership. When the most optimistic statement management can make is that the paper is seeking to create a “print edition that can stand on a sound financial footing for the foreseeable future,” that doesn’t sound good.

Speaking of Reuters, the company completed this week’s morbid hat trick by announcing that it will lay off about 2,000 workers at a cost of $250 million as part of a “transformation” of its business. The silver lining – journalistically speaking – is that Reuters said none of the cuts will be in the newsroom. Instead, they will be focused in financial and technology operations that primarily serve financial services companies. Things have been tough in that business amid low interest rates and pressure from new-economy competitors. Reuters has the advantage of being a diversified company with a strong position in financial markets, but revenues are flat and there’s no indication of where additional business will come from.

By paulgillin | September 28, 2016 - 8:59 pm - Posted in R.I.P., R.I.P.

pittsburgh-tribune-reviewWe’re going to call a time-of-death on the Pittsburgh Tribune-Review, despite the fact that the newspaper says it’ll live on with a website. Everyone says that these days. The more important news is that the 24-year-old daily will shutter its print edition and lay off 106 staff members. It will maintain an online-only edition, but most dying newspapers say that.

Our favorite quote comes from Jennifer Bertetto, president and chief executive of Trib Total Media, which owns the Tribune-Review: “Our commitment to covering news in Pittsburgh and Allegheny County will not change.” Right. We’ll just do it with 106 fewer people.

In keeping with the pattern that has characterized other newspaper failures, the company’s official announcement doesn’t mention the closure or layoffs until the seventh paragraph.

It’s actually a lot fewer than that, when you consider the multiple cuts that parent company Trib Total Media has inflicted on its workforce over the past couple of years. Isolating the goings-on at the Pittsburgh paper is difficult, since Trib Total Media built its media empire in nearby Greensburg and only expanded into Pittsburgh in 1992 when the competing Pittsburgh Post-Gazette was in the midst of a strike. Billionaire Publisher Richard Mellon Scaife (note that Mellon is a rather big name in the region) launched the expansion after he failed in an attempt to buy the Post-Gazette. The Pittsburgh Business Times has a good timeline here.

As the number-two paper in a two-paper town, the Tribune-Review‘s back was always against the wall. Its weekday circulation of 89,000 and Sunday circulation of 168,000 were more than 40% lower than the Post-Gazette‘s, and Pittsburgh isn’t a very big market to begin with. Once Scaife died in July, 2014, the company he left behind focused its attention more on selling off assets than supporting journalism. An ongoing suit by Scaife’s heirs alleges that he threw good money after bad in attempting to keep the Tribune-Review alive.

Trib Total Media sold eight newspapers last October and laid off 153 employees in November. It shuttered the McKeesport Daily News – the Monongahela Valley’s longest-running daily – in December. Nearly 80% of the staff got a buyout offer in July. This is clearly a media business that’s looking to get out of the media business.

The loss of the Tribune-Review reduces by one the dwindling number of two-newspaper towns in the U.S. The fact that Pittsburgh, with a population of just 300,000 souls, held out so long is notable. Pittsburgh is a proud and beautiful city, if you ever get the chance to visit. Just don’t expect to find a choice of newspapers when you get there.

 

Blendle TimelineThe idea of convincing readers to pay a few pennies to read a single article has been largely scoffed at over the years, but Blendle may have cracked the code, at least a little bit.

Launched two years ago in Europe, Blendle says it just surpassed the one-million-member mark. It’s getting hundreds of thousands of monthly visitors and 20% are converting into paying customers. Users will have read more than 20 million articles on Blendle by the end of the year, Managing Editor Michaël Jarjour told TechCrunch. It’s backed by The New York Times Co. and German publisher Axel Springer, and features content from an assortment of big-name publishers.

Users pay a few pennies to read an article and have the option of requesting a refund if they don’t like what they see. Refund requests must include a reason, a hitch Blendle adds to prevent abuse. Jarjour said the company employees 15 journalists who comb the Web looking for worthwhile stories that are hidden behind paywalls.

Blendle has elements of Flipboard, Nuzzel and other social news services in the form of human-curated feeds. If users provide access to their social network accounts, Blendle will add durations from friends into the news feed. A new service called Blendle Premium Feed is powered by a combination of algorithmic predictions and recommendations from friends.

So what will people pay to read? Not news, apparently. “We’ve seen that our users don’t like to spend money on the news,” wrote co-founder Alexander Klöpping in a Medium post announcing the company’s entry into the U.S. market. “What our users do like to read is investigative reporting, revelatory background articles, newsworthy analysis and hard-hitting interviews.”

 

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John Oliver’s sendup of the news industry for preposterous ideas like Tronc is both hilarious and sad. Oliver digs into the video history bag to remind us that Sam Zell really did own a newspaper company at one point and thought that stories about cats could possibly support stories about crime and corruption. He also calls out Sheldon Adelson for instructing journalists at the Las Vegas Review Journal not to post negative stories about him or any of his properties. And the mashup of “Spotlight” with the investigative crew assigned to dig up everything it can about racoon kittens is flat-out genius. The quotes from Washington Post Editor Marty Barron about the workload news reporters have to process these days is poignant.

They aren’t laughing at the Newspaper Association of America, though, which called Oliver’s piece “petty insults” and noted that the humorist offered no solutions. Fair enough, but is it the job of a comedian to offer solutions? Pointing out absurdities like the click-bait headline atop this post is the first step toward solving problems, and thank goodness we have people like Oliver and Jon Stewart to point out what a circus media has become. It’s sad that comedians have to play the role of fact-checkers in this industry, but at least someone is willing to call out the emperor for having no clothes.

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The Pittsburgh Post-Gazette is raising newsstand prices 50 cents to $2 per weekday issue, despite the fact that weekday print circulation has dropped 54% over the last decade.rThe move continues a drive by newspapers to raise reader revenues in the face of quickening declines in advertising sales. Ad revenues at U.S. newspapers fell 8% last year, the largest decline since 2009. The price increase is also an effort to wring more dollars out of the shrinking base of older readers who can’t get through the day without a print newspaper. Those readers have money, but advertisers don’t want to reach them.

The story in the rival Tribune-Review quotes Poynter Institute analyst Rick Edmonds saying that raising prices puts pressure on newspapers to improve quality, but there is little evidence that quality and price are correlated. The Post-Gazette is more likely looking to whittle down its print reader base to the hard-core few who will pay a price at which print is profitable.

 

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By paulgillin | May 4, 2016 - 4:59 pm - Posted in Layoffs, Local news, Newspapers, R.I.P.

Tampa TribuneThe Tampa Tribune is no more.

The rival Tampa Bay Times said on Tuesday that it has purchased the 121-year-old Tribune and shut it down, converting subscribers and advertisers to the Times. That makes the Times the fifth-largest Sunday newspaper in the country by circulation.

A purchase price was not specified, but TampaBay.com reported that Times ownership borrowed $13.3 million to finance the sale.

Locals saw this one coming. Few major metropolitan areas can support to daily newspapers anymore, and, with 2.8 million residents, Tampa-St. Petersburg is on the fringe of what you could call a major metropolitan area. The Times won a contract to print the Tribune in February, and experts said the writing was on the wall after that.

“The continued competition between the two newspapers was threatening to both,” said Times chairman and CEO Paul Tash, in a quote on Rick Edmonds’ blog at the Poynter Institute. “There are very few cities that are able to sustain more than one daily newspaper, and the Tampa Bay region is not among them.”

The two papers had long been able to make a go of it by targeting subscribers on either side of Tampa Bay, and at one time were considered two of the fiercest rivals in the newspaper industry. However, the collapse of business models brought about by the Internet has had both papers playing defense for the past decade.

The Tribune published continuously from 1895 until this week. Long owned by Media General, it was sold to an investment capital group in 2012 for $9.5 million. That company nearly doubled its money when it sold the Tribune’s headquarters building last July for $17.75 million, but the Tribune can hardly be considered a winning investment. The owners had reportedly borrowed more than $37 million over the last two years.

The Tribune employed 265 full-time staff. Deep cuts are expected, with Times chairman and CEO Paul Tash saying at least 100 jobs will be lost. Beginning today, the Times began appearing on Tribune subscribers’ doorsteps and in newsstand racks. The Times said it will honor all the existing subscription and advertising contracts. The Times will continue to operate the Tribune’s tbo.com website after a temporary redirect to the Times’ tampabay.com. It will also continue several local operations owned by the Tribune under their existing names.

The Times is owned by the Poynter Institute, a nonprofit school and journalism think tank. Until 2012 the paper was called the St. Petersburg Times under a legal agreement that had given the Tribune temporary ownership of the Times name.

The Times claims daily readership of nearly 448,000 and Sunday readership of nearly 739,000. Actual circulation is about half that. The company’s media kit claims that its print and online properties reach 1.5 million people.

A team of Times reporters who formerly worked for the Tribune put together a nice retrospective here.

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By paulgillin | November 12, 2015 - 7:36 am - Posted in Newspapers

Three years ago a former greeting card executive and his partner bought the Orange County Register and a handful of smaller newspapers. Operating as Freedom Communications, they stunned a gasping industry by declaring their intention to invest heavily in news.

A year later, the experiment showed signs of bearing fruit. As we wrote in July, 2013, “Newsroom staff is up to 360 from a low of 180 when Freedom took over. The Register routinely publishes daily issues that are nearly twice the size of its nearby rival, the Los Angeles Times. Page counts have been increased by half, color expanded and even the quality of paper improved.”

That was then. Two years later, the Freedom experiment can be judged a failure as Freedom filed for bankruptcy protection as part of a management-led plan to acquire the paper. The plan will end the active role of Aaron Kushner, the greeting card magnate who said two years ago that he was in the game for the long haul and who even eyed a buyout of the Los Angeles Times, whose parent Tribune Co. was itself bankrupt at the time.

A group led by Rich Mirman, who is the current CEO and publisher of Freedom, is bidding to acquire the company and reorganize its finances. Mirman said there will be no job cuts and that all bills will continue to be paid during the reorganization. He also said the company should turn a profit this year after losing more than $40 million over the past two years.

Nowhere to be seen in the deal is Kusher, the newcomer with a vision who spoke so forcefully about the value of newspapers two years ago. His plan always was a long shot, but he was at least a positive voice in an industry that’s so shrouded in hopelessness these days. He was one of a dwindling list of rich executives that includes Warren Buffett, Jeff Bezos and John Henry, who seem to believe that journalism is still worth the investment. Why is it that the only people who have faith in the newspaper industry are people who have no background in newspapers?

 

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By paulgillin | September 21, 2015 - 5:26 pm - Posted in Best/Worst, Business News, Layoffs

Newspaper publishers pride themselves on being champions of truth, defenders of the public’s right to know and knowledgeable skeptics who cut through obfuscation and evasion to get the real story.

Except when it comes to delivering bad news about themselves.

In another one of the too-many-to-keep-count examples of a newspaper candy-coating its own hairball, the New Orleans Times-Picayune announced that it is cutting 21 percent of its overall news staff in a bid “to reinforce its core journalistic mission.”

To be fair, the official announcement did quote NOLA Media Group President Ricky Mathews conceding that “It’s a difficult day for us and our colleagues who are losing their jobs,” but that brief tinge of regret is buried four paragraphs deep in the 560-word announcement that is chock full of good news about the success the media group has had online. You might remember that the Times-Picayune cut frequency to three days a week in 2012, following the lead of the Detroit Free Press which did so four years earlier.

 

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By paulgillin | August 7, 2015 - 7:29 am - Posted in Advertising, BusinessModel, Circulation, Paywalls

The New York Times marked a milestone of sorts yesterday with the announcement that it has passed the one million paid digital-only subscriber mark, less than four-and-a-half years after launching its paywall. The milestone is validation that paywalls can work, especially if you’re The New York Times.

The news comes less than two months after the World Association of Newspapers and News Publishers reported that global newspaper circulation revenues surpassed advertising revenues for the first time this century (good slide presentation here). The association didn’t say when was the last time circulation was the industry’s biggest revenue contributor – or even if that information is known – but we’d guess it was more than 50 years ago.

The newspaper industry became addicted to advertising in the 1960s – and thus began its downfall. With 80% of revenue coming from advertising by the late 1970s – and circulation functioning as a loss-leader to build audiences – the business had all its eggs in one basket. When the Internet tore a hole in that basket, there was nowhere else to turn.

A painful decade later, there is evidence that newspapers are rebuilding online around the paywall model. They have lost a lot of blood, though, and circulation revenue will never be as large or profitable as advertising was. Wired notes that only one-third of the Times‘ revenue comes from digital subscriptions. It will need a lot more subscribers – or alternative revenue sources – to keep the business stable.

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By paulgillin | March 31, 2015 - 7:29 am - Posted in Newspapers

This promo for “The Monsters of a Rapidly Changing Media Landscape” conference in Shreveport is perfect. The buzzwords, the phrasing, even the clothes are perfect. Our favorite line: “I like the feel of the CD. I like to hold a CD in my hand. I put it into the stereo with two hands, OK?”

Stick around for the last 30 seconds.

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