Last week, I spent a day speaking to two college classes about the changing media industry. Both groups consisted of juniors and seniors, nearly all of them majoring in public relations. These people should be heavy consumers of information, and they are. When I asked the roughly 45 students how many of them read a newspaper online every day, nearly ever hand went up. But when I asked how many subscribe to a newspaper, only a single student raised a hand.

Oh, they read newspapers. They read Metro, the local entertainment weekly, the college daily and even the major metro dailies on occasion. The difference is that they don’t subscribe. They consume information when it’s convenient to them, and so much information is being pushed at them all the time that they have plenty of choices about what to read. The concept of paying to subscribe to something is foreign to these people in their early 20s. Why pay for what you can get for free?

Some publishers may be adapting to this new reality and paring back their paid subscriptions accordingly. Back in April, the Audit Bureau of Control changed its rules to enable publishers to declare as paid circulation copies that they sold for as little as a penny. At the time, some people predicted the beginning of a new circulation war. But the opposite has apparently happened. The Wall Street Journal reports that the current trend at big papers is to manage circulation intelligently, focusing on hitting the highest-quality readers at the best time of day. The story cites the Atlanta Journal-Constitution and the Arizona Republic as two papers that have cut circulation to the applause of advertisers, who didn’t see much value in distributing to readers who live so far away that they would never be candidates to come in to their stores. And publishers do see growth potential in circulation of Sunday issues, which arrive when people are most receptive to reading them.

Involuntary declines, continue, though. The two New York tabloids continue to post ongoing readership losses, in part because of price increases announced earlier this year to offset the rising cost of newsprint. Fortunately, newsprint prices are stabilizing now, in large part due to decreases in demand brought about by the slowing global economy.

Pressure to Go Private

Many years ago, for reasons that are unknown to us, major newspaper publishers began reporting monthly, rather than quarterly earnings results. Today, that practice has become a millstone around the industry’s neck, casting a public spotlight on the industry’s woes with painful frequency.

While reporting on the latest round of earnings declines, James Erik Abels of Forbes begins to ponder the once-imponderable: maybe it’s time to think about the end of the newspaper industry. The business model isn’t viable any more, Abels says, and the recession will hit hard at its base of local advertisers. The piece suggests that the pressure of earnings comparisons is only making matters worse by publicizing the industry’s problems. That’s one reason some equity managers are encouraging owners like the Sulzbergers to take their companies private: it enables them to restructure outside of the glare of publicity.

Newspaper brands have considerable value, which is one reason some private investors are lining up to buy them, Abels says. Relaunched with smaller staffs and more nimble businesses, newspapers would have a leg up on online startups because of their reader loyalty. It’s just that the process of getting to that smaller staffing model is to difficult to manage in public view.

Superblogger Robert Scoble has a proscription for the newspaper industry: experiment a lot and do it quickly. Scoble thinks every reporter should have a camera phone that’s capable of taking high-quality video images and should be able to broadcast events in real-time just like television does. He also says people who think quality journalism is dead should look at TalkingPointsMemo, Pro Publica and Topix, which are building profitable businesses based upon good reporting. He also says keep an eye on Spot.us, a startup that will fund journalism based upon the stuff people want to read.

Layoff Log

  • Having recently extracted major union concessions by threatening to go out of business, The Newark Star-Ledger rewarded its staff by eliminating 40% of their jobs. Most of the reductions will be achieved through buy-outs, though, and management had told the unions back in August that it needed substantial cuts to keep the paper viable. Huffington Post says the actual newsroom losses will be closer to 45% of the 334 editorial employees. The magnitude of the cutback is impressive eye-popping at a time when most newspapers are still trimming around the edges. However, the publisher said it believes the Star-Ledger can return to profitability when the changes are complete.
  • Speaking of trimming around the edges, A.H. Belo is doing everything it can short of layoffs to tighten the belt. The suffering publisher announced it will freeze salaries, reduce employee retirement contributions, suspend its dividend, trim capital spending and lower the fees it pays to its board of directors. The company also renegotiated its deal with creditors. “It’s probably not going to get better until 2010, if then,” says industry analyst John Morton., a newspaper industry analyst in Maryland.
  • As LA Observed predicted last week, the Los Angeles Times laid off 75 journalists, or about 10% of newsroom staff. That comes on top of 150 job cuts in the newsroom this past summer. The site has the dour memo from Editor Russ Stanton.
  • Randy Turner is the latest blogger to point out the contradiction of newspapers reporting everyone else’s layoffs but burying their own. He cites the Joplin Globe, a Missouri paper that he says laid off 15 staffers last week but has said nothing about it since. And he provides a laundry list of layoffs at other local businesses that the Globe has covered in recent months.

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This entry was posted on Tuesday, October 28th, 2008 at 7:08 am and is filed under Advertising, Business News, BusinessModel, Circulation, Layoffs, Local news, NewMedia, Newspapers, Solutions. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

4 Comments

  1. October 28, 2008 @ 10:29 am



    On your opening point that college students want information for free and won’t pay for it, I have to add a caveat (and I’m qualified to do so, having graduated just this May): Often, it’s a much simpler reason that colelge students don’t want to subscribe to one (or heaven forbid, more than one) newspaper. We don’t want the newspaper lying around. The amount of paper that piles up in a week is obscene, and that’s assuming a college student has access to weekly recycling or the space in what is likely a teeny tiny itsy bitsy apartment to store those papers.

    On the other hand, cost is an issue. College students are poor, and what money is left is most likely saved for beer, or, you know, groceries. Why not give free subscriptions to college kids, get them hooked on the habit, and then ask them to pay when they’re actually working?

    It is insulting to read that “oh these people in their 20s, they don’t want to pay for anything bla blaaa.” So untrue. Many of my peers subscribe to things they care about. I pay for the Economist and Harper’s because they are chock-full of value to me. What’s not valuable to me is a newspaper that has shrunk in size to the point where it runs maybe four or five articles in the main section that aren’t AP copy.

    Posted by Jess Davis
  2. October 30, 2008 @ 5:53 am



    You have choice and why pay for something that is of poor quality and is also an environmental burden? Thanks for raising the point about paper.

    Posted by paulgillin
  3. October 30, 2008 @ 5:26 pm



    I also graduated in May, and Jess is right on. I do know that the Austin American-Statesman puts out free copies of its papers in the University of Texas Union during the weekdays. They’re almost always gone by the afternoon.

    Posted by Newsguy
  4. May 22, 2010 @ 3:06 am



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