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 | 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.

Comments Off on R.I.P. Tampa Tribune
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.

 

Comments Off on Times-Picayune Hacks Staff, Buries Lead
By paulgillin | August 5, 2014 - 12:04 pm - Posted in Business News, Future of Journalism, Journalism, Layoffs, Newspapers

Robot

On one level we can understand the teeth-gnashing that follow the Associated Press’ announcement that it plans to start using robots to write the majority of U.S. corporate earnings stories. Robots seem to bring out the Luddite in all of us. What we can’t understand is why anyone outside of a few shop stewards should want to preserve the jobs that will invariably be lost to this new kind of automation.

Actually, the AP says no jobs will be eliminated. “This is about using technology to free journalists to do more journalism and less data processing, not about eliminating jobs,” wrote Lou Ferrara, vice president and managing editor, on the AP blog. You can bet that robots are going to eliminate reporting jobs in the future, though, just like linotype machines replaced human typesetters and computer pagination replaced paste-up jobs. It’s called efficiency, and job loss is one of the distasteful consequences.

We’d suggest that much of the labor impact will actually be felt overseas, which is where the menial jobs have already migrated. Robo-journalists in India and the Philippines will need to improve their skills to continue to get work from U.S. and European publishers, and journalists in home offices will need to up their games as well. That’s a good thing.

What isn’t good is preserving jobs that eat up time and editors’ attention. In one of our recent assignments we worked with a technology news site that employs a small staff of seasoned journalists but that gets most of its content from an offshore body shop that rewrites press releases and news from other websites. The reporters who write this chum make about five cents a word, and in our view they’re overpaid.

Stories come in full of grammatical and usage errors, and many are missing basic facts or explanations. Professional editors spend hours each day fixing these mistakes and trying to educate the writers, which is a fool’s errand because most of them don’t last more than a few months on the job anyway. These tasks can now be automated, and many of them will be. The result will be at a better quality of work for everyone involved.

Will the stories that robots produce be as good as those that humans could write? Probably not, but it’s the market’s job to judge that. The only thing that’s certain is that the quality of robotic journalism will only improve over time. The human journalists who embrace this trend will learn to use their silicon sidekicks as research associates and fact-checkers. Robotics should ultimately make journalism a much more rewarding profession, but it will cost jobs.

Take heart in the fact that newsrooms won’t be hit nearly as hard as many other workplaces. “The factory of the future will have only two employees: a man and a dog,” said Carl Bass, the CEO of Autodesk. “The man will be there to feed the dog. The dog will be there to keep the man from touching the equipment.”

Comments Off on The Bots are Coming!
Freedom Communications' Aaron Kushner (photo by Jebb Harris, Orange County Register).

Freedom Communications’ Aaron Kushner (photo by Jebb Harris, Orange County Register).

California newspaper defies industry wisdom to stay alive – and prospers” declares The Guardian in an analysis of the Orange County Register‘s death-defying experiment under the leadership of a former greeting card executive with no background in newspapers.

Aaron Kushner (right) and his partner, Eric Spitz, formed Freedom Communications and bought the Register a year ago. They then stunned the shell-shocked newspaper industry by declaring their intention to go completely against the prevailing practice of layoffs and cost cuts. They would invest in print, double their reporting staff,  increase subscription prices and  put up one of the industry’s most rigid barriers to online access.

They’ve kept their promise. 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.

Daily circulation is holding steady and total circulation is up sharply if you include the 28 weekly papers the company has invested in over the last 12 months. The Register has hired investigative reporters and lured newspaper wunderkind Rob Curley out of exile to rejuvenate the editorial product with a focus on local news and practical advice.

Freedom is showing particular sensitivity to  local businesses. One promotion late last year gave each reader the opportunity to contribute $100 worth of advertising to his or her favorite charity. Some 1,300 nonprofits benefited from the program.

Kushner thinks the time is right to place a big bet on print. “Never before and never again will so many people be in the sweet spot of newspaper readership as the next 20 years,” he told the Guardian. “It’s called the baby boom.”

There’s no doubt the Register is growing, but is it prospering as the Guardian‘s headline proclaims? The jury is still out on that.

Ken Doctor ran the numbers back in January and concluded that the Register may be able to cover its estimated $9 million+ in additional annual costs through higher subscription fees, but that the advertising market is in long-term decline and there’s little that any newspaper can do about that. Doctor contrasted Kushner’s growth strategy with the slash-and-burn tactics being applied by Advance Communications and said we’ll know in about two years whether growth or contraction is the recipe for success. Clearly, we’re pulling for Kushner.

Writing on CJR.com in May, Ryan Chittum said the odds are against Kushner, but noted that if he fails, “he will have gone down investing in journalism.” Chittum also has some revealing stats about the profitability of newspapers, which remains quite strong. When newspapers shut down, it’s because they can’t afford the cost of their debt, he says. Most are still in the black on an operations basis, which makes Advance’s frequency cutback strategy all the more puzzling.  It also suggests that value investor Warren Buffett  isn’t a billionaire for nothing.

Kushner says he’s in it for the long haul and he now has his eyes on a bigger prize: the L.A. Times. Tribune Co. is going to be looking to unload some assets now that it has exited bankruptcy, and many observers believe the Times will be on the auction block. If Kushner buys it, he can all but own the southern California market. Regardless of the  current fortunes of daily newspapers, having a  near-monopoly on even a shrinking media business in the country’s largest media market has to be attractive.

Enhanced by Zemanta
By paulgillin | June 27, 2013 - 5:00 pm - Posted in Business News, Layoffs, Newspapers

The ax is falling again at Advance Publications.

The company that cut back frequencies in rapid succession at its once-daily newspapers in New Orleans, Syracuse, Cleveland and, most recently, Portland,  is now threatening to shut down the Newark Star-Ledger unless it wins substantial concessions from the paper’s unions.

Publisher Rich Vezza  said the Star-Ledger, which is New Jersey’s largest daily, lost $19.8 million last year and will lose about the same amount this year this year. It’s threatening to outsource printing and production unless unions representing pressman, mailers, engravers and machinists  make significant concessions by a September 27 deadline.

A union executive said  union members are willing to negotiate but that the Star-Ledger has shown little interest in meaningful proposals. Ed Shown, president of the Council of Star-Ledger Unions, said the latest management proposal demanded a 55% cut in  wages and benefits.  The unions issued a joint statement  challenging management’s $19.8 million loss  estimate.

Vezza said the frequency cutbacks implemented at other Advance titles aren’t an option here. If an agreement isn’t reached, the paper will close at the end of the year, presumably idling its 771 employees. “This is not a threat. This is reality,” he told Philly.com.

This is the second time management has threatened to shut down the Star-Ledger. It used a similar tactic to bring significant concessions from unions in 2008, when it also laid off 40% of its newsroom staff.  Five years ago the paper employed 330 editors, but that number has since fallen by nearly half.

Other publishers have used closure threats of closure to pressure their unions. In 2009 The New York Times Co. forced major concessions at the Boston Globe and Hearst Corp. came within a few weeks of  shuttering the San Francisco Chronicle before unions gave in.

Enhanced by Zemanta

Continuing a newspaper industry tradition of burying bad news about its business, The Oregonian announced that it will scale back home-delivery frequency from seven to four days a week.

The news is tucked into the fourth paragraph of an otherwise effusive press release on Oregon Live that crows about the launch of a new company that will “expand news and information products in Oregon and Southwest Washington” and “introduce new and improved digital products.”

In reality, the main purpose of the new company over the next few months will be to hire survivors from Oregonian Publishing Co. which produces the state’s largest and longest continuously published newspaper. That company will close on Oct. 1. Oregonian write Brent Hunsberger provides balanced coverage – and leads with the real news.

Like newspapers in Detroit, the The Oregonian will continue to publish in print seven days a week but will limit distribution of Monday, Tuesday and Thursday editions to city newsstands. Its 170,000 home subscribers will see deliveries cut to Wednesday, Friday, and Sunday. In a baffling bit of doublespeak, the company also said home-delivery subscribers would get a Saturday edition “as a bonus.” It also stressed that the “Wednesday, Friday and Sunday editions will be enhanced with more content than current editions while the Saturday newspaper will have news and a strong emphasis on sports content, along with classified advertising.” In other words, a cut of 50% is an improvement.

The bigger story is that there will be unspecific but “significant” layoffs at The Oregonian, which currently employs 650 people. The paper, which has won seven Pulitzer Prizes and five since 1999, employs more than 90 journalists according to Hunsberger’s account. However, Ryan Chittum thinks the editorial cuts have been more severe. Writing on CJR.com, Chittum estimates that the newsroom staff has declined from about 315 in 2007 to 175 today. His assessment is blunt:

[Advance Publications’] new template for its newspapers is now depressingly familiar: End daily delivery; fire a third to a half of the veteran journalists, particularly the editors, particularly in news; replace some of them with young, inexperienced (and most important: cheap) labor; put them on the hamster wheel; toss around insipid buzzwords; spend a bunch of money on new offices; piss off readers; embolden competition.

Seems about right. Chittum also notes that Advance Publications’ cutbacks at the Times-Picayune in New Orleans backfired when a competitor from Baton Rouge moved in to take advantage of subscriber unrest. Advance has had to respond with a tabloid edition on days the Times-Picayune doesn’t publish, thereby negating many of its cost savings. Advance has said that it will make similar frequency cutbacks across its portfolio.

Oregon journalists are already rushing in to show their support. Former Oregonian reporter Ryan Frank has taken to social media to raise funds for a bar tab for laid-off staffers. He’s already raised more than $3,000. Follow the fund’s progress at #OregonianBarTab on Twitter. And give generously.

Thanks to Brian Parks for tipping us off to this news.

 

Enhanced by Zemanta
Comments Off on Oregonian is Latest Major Metro Daily to Cut Frequency
By paulgillin | April 23, 2013 - 7:49 am - Posted in Best/Worst, Journalism, Layoffs

Citing newspaper closures, high stress and low pay, CareerCast has rated newspaper reporter as the worst job in the nation, behind lumberjack, oil rig worker and meter reader.

The ratings, which the jobs portal has published annually since 1988, factor in criteria like income, growth opportunity, environmental factors, stress and physical demands in ranking 200 jobs annually. Newspaper reporter was ranked #126 in the first published report 25 years ago. However, the last decade has seen ad revenues shrink 60% and reporting staffs dwindle by 30%. At the same time, deadlines have become shorter while demands for output have increased.

The job of newspaper reporter “has attracted many aspiring writers, been romanticized in movies and helped bring down corrupt presidents,” the company said in a press release. However, Publisher Tony Lee said people who like to write are better off seeking careers in advertising, public relations or online publishing these days.

The three top-ranked jobs in the nation are actuary, biomedical engineer and software engineer, the survey said. The rankings aren’t necessarily intuitive. For example, “senior corporate executive” is rated #155, attorney #117 and air traffic controller #170. Mining, a job that many people would say is the worst in the nation, isn’t ranked at all. You can find a list of all 200 rated jobs here.

The the 10 biggest losers, with approximate pay levels, are below.
200. Newspaper Reporter – $36,000
199. Lumberjack – $32,870
198. Enlisted Military Personnel – $41,998
197. Actor – $17.44/hour
196. Oil Rig Worker – $37,640
195. Dairy Farmer – $60,750
194. Meter Reader – $36,400
193. Mail Carrier – $53,090
192. Roofer – $34,220
191. Flight Attendant – $37,74

 

Enhanced by Zemanta
Comments Off on Newspaper Reporter Ranked Worst Job in U.S.
By paulgillin | October 20, 2012 - 3:33 pm - Posted in Business News, Layoffs, R.I.P.

A year that has already seen the demise of one print institution – Encyclopedia Britannica – has now marked the end of another. Newsweek magazine will publish its last print edition in December and relaunch in an all-digital format in 2013.

The 79-year-old newsweekly’s exit from print  leaves only Time magazine standing in a market that once supported three robust competitors. US News & World Report, which was launched the same year as Newsweek, published its last print issue two years ago.

No one is particularly surprised at this development. Newsweek has bounced around between different owners for two years. The Washington Post Co. sold it for $1 in 2010 to 92-year-old  stereo equipment magnate Sidney Harman, who promptly died. Before doing so, however, he placed the magazine into a joint venture with Barry Diller’s IAC/InterActiveCorp, where it became a sibling to The Daily Beast in an awkwardly titled business unit called The Newsweek Daily Beast Co. By that time, the magazine’s circulation had plummeted from a peak of over 3 million to 1.4 million.

Newsweek cover: Princess Diana at 50Editor Tina Brown tried to enliven the print magazine with provocative tactics like a July 2011 cover depicting what Princess Diana would have looked like at age 50, but some media observers thought the racier fare was out-of-step with the magazine’s buttoned-down tradition. The U.S. magazine industry has actually seen a resurgence over the last three years, with revenues growing modestly and print startups exceeding closures by a three-to-one margin in 2012, according to the Associated Press.

That rising tide should have lifted Newsweek‘s boat, but Brown’s tactics took it in the wrong direction, said Samir Husni, director of the Magazine Innovation Center at the University of Mississippi School of Journalism. “Newsweek did not die,” he told the AP. “Newsweek committed suicide.”

To be fair, Newsweek was already on life support when Brown inherited it. She  reportedly wept when she delivered the news to the Newsweek staff on Thursday. The closure will involve an unspecified number of layoffs.

Diller told The New York Times‘ Media Decoder blog that the Newsweek acquisition “was a mistake.” With only 500 pages of print advertising this year,  “It became completely self-evident that we couldn’t print the magazine anymore.”  Newsweek will actually continue to live in print through a handful of overseas licenses, but U.S. subscribers will next year find it replaced by the all-digital Newsweek Global, with a single, worldwide edition that requires a paid subscription.

Comments Off on Newsweek to Go Out of Print

Here’s a news item we didn’t expect to see. Borrell Associates now predicts that U.S. newspaper revenue will rise in 2013, although only by a scant .5%. If the prediction holds true, it would be the industry’s first revenue increase since 2006.

Magazine Print Editions, Websites & Tablets # of Unique Brands Advertising
Time Period Print + Web + Tablet
(unduplicated)
H1 2010 9,536
H1 2011 10,768
H1 2012 14,949
Source: Kantar Media
Base: 60 Publishing Brands with monitored print editions, websites and tablet editions

Borrell’s optimistic newspaper forecast defies conventional wisdom. The research and consulting firm has no particular incentive to bolster the print newspaper business, but it has been forecasting a turnaround for a couple of years. CEO Gordon Borrell said he expects most of the revenue growth to accrue to small newspapers, which have been the most resilient segment of the business during its historic decline. Large dailies will continue to see the annual 4% to 6% declines that have been the norm for the last few years.

The turnaround is shaky, though. Pre-print ads, which typically bring in about 20% of all advertising revenue, could decline as the result of a sweetheart deal between the U.S. Postal Service and a large direct-mail company. The Newspaper Association of America’s howls of protest about the contract have so far fallen on deaf ears.

Borrell is also putting a lot of faith in local online advertising, which it predicts will grow 30% next year. Given that online ad growth at newspapers has been in the single digits annually for the last four years, that seems a stretch. You can hear all of Gordon Borrell’s comments in this recorded webcast.

There’s also good news in magazine land. The Magazine Publishers Association surveyed its members and found a 57% jump  in the number of brands advertising on all magazine media platforms since 2010. That includes tablet, online and print advertising.  The MPA also said magazine apps are some of the highest-grossing titles in the areas of lifestyle, health & fitness and news in the iTunes store.

Publishers apparently are a pretty upbeat bunch. A new study by Michael Jenner of the University of Missouri’s School of Journalism finds that two-thirds of newspaper publishers are optimistic about the future, and only 4% are pessimistic. Jenner said the research is based on 450 in-depth interviews with senior publishing executives. They’re moving ahead aggressively on digital platforms, but 60% “do not envision a time in the future when their individual publications will no longer issue print versions of the news.” We admire their optimism, but that’s just nuts.

The Numbers from Nola

Ken Doctor has no illusions about the future. “We all realize that, at some point, daily print will go away,” he writes at the top of this financial analysis of the New Orleans Times-Picayune‘s frequency cuts. Doctor understands the economics of the news publishing business as few people do (his Newsonomics site is a must-read), and this analysis is a useful insight into the revenue and expense models of metro dailies.

Doctor estimates, for example, that circulation brings in about 30% of total revenue at the Times-Picayune and that the four daily editions that are being eliminated contribute between 25% and 30% of print ad revenues. The net result of the paper’s cutback from seven to three issues per week is about an 11% advantage in profitability, he estimates. That’s good, but there are big risks. One is that the T-P is bucking the trend of deriving more revenue from readers and actually doubling down on advertising as a strategy. In effect, it’s doing more of what got newspapers into trouble in the first place.

Meanwhile, the competitive news environment in the Big Easy has made the paper a tempting target for everything from a startup called The Lens to the Baton Rouge Advocate. “Simply, the T-P’s slimming has opened up a floodgate of competition,” Doctor writes. “That makes the distinctive value proposition of the T-P harder and harder to get paying readers to accept.”

That isn’t stopping owner Advance Publications from methodically duplicating the frequency-reduction strategy across its portfolio. The limited success of that strategy in Detroit, where the Free Press and Detroit News made similar frequency cuts nearly four years ago, isn’t necessarily a reliable guide. The Detroit media market is a lot less competitive than New Orleans’, and the strategy hasn’t stopped the steady drumbeat of circulation declines and layoffs.

Incidentally, Nola residents haven’t taken the T-P cutbacks lying down. Grassroots efforts to reverse Advance’s decision testify to the unsinkable spirit of that unique region.

Update, 10/17/12: A survey by Cribb, Greene reports that newspaper publishers are increasingly confident about the future. More than 40% said their local markets are improving, up from 14% in 2011. The percentage who expect profitability to improve this year rose to 52% from 39%, and those who expect advertising revenue to be higher in 2013 grew by a similar margin. Asked if they would buy a newspaper business in the current economic climate, about half said “no.” However, 69% responded “yes” or “maybe” when asked if they would recommend the newspaper business as a career for their children.

Comments Off on Surprise! Researchers See Industry Growth