Industry watchers are applying some mathematical discipline to various proposals to bail out the newspaper industry.

dollar_signMark Potts buries a hatchet in the idea that paid subscriptions are the salvation of the newspaper industry. Hauling out the spreadsheet, he suggests that the $10 million a good-sized daily could realize from selling 500,000 subscriptions at $20 each would be substantially offset by advertising revenue declines triggered by reductions in website traffic. Some people estimate that pay walls could cut page views by up to 90%, effectively obliterating that revenue stream. And charging a higher price will only drive traffic lower. Potts says newspaper owners aren’t doing nearly enough to optimize their online ad revenue streams. They should focus on selling ads to local businesses and shift from a reliance on traditional big display ad campaigns.

Taking a more expansive view, Ken Doctor handicaps the odds of various rescue strategies, ranging from pay walls to cable bundling to government handouts. The best bets are Cablevision’s idea of bundling Newsday into cable subscription fees and Hearst’s plan to distribute free wireless e-readers, both of which he rates at 2-1 odds. But even those have major downsides. The longshot: charging for premium content. Newspapers just don’t have the goods, Doctor says. Odds: 4-1.

Down and Out in Denver and San Francisco

David MilsteadIf you want detailed background on what exactly happened in Denver prior to the Rocky Mountain News‘s closure last week, read this interview with David Milstead, the Rocky columnist and business reporter who broke scoop after scoop about the behind-the-scenes machinations. At nearly 5,200 words, the transcript is of epic proportions, but interested readers can learn about why Scripps chose to be the bad boy to abandon Denver, Media News CEO Dean Singleton’s’ decision not to buy the paper, the emergence of a possible buyer late in the process, the mood in the Rocky newsroom after the closure was announced and the possibility that Milstead’s critical reporting denied him a job at the rival Denver Post.

Singleton is also at the center of a San Francisco Bay Guardian analysis of what could be done to save the Chronicle. The report documents the extreme cost-cutting campaign at Hearst Corp. which is seeking to derive half its revenue from circulation by 2011. Among the news that was buried in the announcement of the Chronicle’s for-sale offering was layoffs of more than 55% of the newsroom at the San Antonio Express-News.

The only conceivable buyer for the Chron is Singleton’s MediaNews, which has gradually bought up nearly every other newspaper in the Bay Area. However, MediaNews is unlikely to want to take on a money-losing property when it is already so highly leveraged. The story also says the Society of Professional Journalists is calling for a public discussion of the Chron‘s predicament, saying the potential loss of such a large news source is an “urgent civic challenge.”

Layoff Log

  • The Fort Worth Star-Telegram will cut its workforce by 12% and enact wage reductions ranging from 2.5% to 10% on employees making more than $25,000 annually. The paper cut 18% of its workforce last year and initiated other cost-reduction efforts, including a joint distribution agreement with rival Dallas Morning News and real estate sales. In addition to the layoffs, the paper is offering buyout agreements to many of its workers.
  • Canada’s largest newspaper will lay off 60 unionized workers. The cuts mainly hit the advertising department, where 38 employees, or about one quarter of the unionized staff,  got their walking papers. The leader of the Southern Ontario Newspaper Guild calls the cuts outrageous in light of the $8 to $11 million package CEO Rob Prichard is getting to step down in May.
  • Having announced 60 layoffs last week, the Arkansas Democrat-Gazette is now requiring newsroom employees to take off one work day out of every 20. The plan applies to salaried and hourly employees who work the equivalent of a full-time schedule.
  • The Myrtle Beach Sun News will cut 20 positions and reduce pay and hours for all staff.

Miscellany

The Connecticut attorney general thinks it’s pretty audacious of Journal Register Co. to pay up to $1.7 million in bonuses to 31 people when the company owes the state $21.5 million in back taxes. However, we should point out that the bonuses are tied to the achievement of cost reduction objectives.


Add The Wall Street Journal to the ranks of outlets now tracking US layoffs. Its interactive layoff tracker sorts job reductions by industry, company, date, size of layoff, percent of workforce and stock decline. The Citigroup numbers are especially ugly.

 

And Finally…

Two out of three Britons have lied about the books they have read, with George Orwell’s 1984 topping the list. A survey of 1,342 citizens commissioned by the organizers of World Book Day found that  other unread favorites include War and Peace, Ulysses, The Bible and Madame Bovary. Asked why they fib, most Britons said it was to impress somebody else.

Comments

comments

This entry was posted on Thursday, March 5th, 2009 at 1:56 pm and is filed under Advertising, Business News, BusinessModel, Journalism, 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.

3 Comments

  1. March 5, 2009 @ 3:37 pm



    I work at a newspaper and am trying like crazy to get out. But let me say this for the record. It’s over for newspapers. I mean over, done. Right now, the plan is to hang on for as long as possible before folding up. Obviously some papers will remain, and some well-run ones will turn a profit, but this has reached the endgame for 90 percent. It’s over. There will be no rebound. Who would be these products?

    Would like to hear others’ opinions.

    Posted by Newspaper Fan
  2. March 5, 2009 @ 3:38 pm



    That last line should have read “who would buy these products.”

    Posted by Newspaper Fan
  3. March 5, 2009 @ 8:53 pm



    I would not buy dead trees.

    I left newsprint for the internet in 1988 and never looked back. Call me an early adopter.

    I have a PDA phone in my pocket. I have a tiny 7″ tablet PC in the cargo pocket of my trousers much of the time. I can find whatever information I want, whenever I want.
    Including things never covered (1999 civil war in the Solomons for example) by the mainstream American press.

    I also can debate any item of information on forums, and call upon the writer for corrections. I am not interested in any site that wants to offer unidirectional communication. The competition is such that I don’t have to on any subject. For the past decade newspapers have tried to counter this desire within the public for dialog with information sources – by writing condescending diatribes railing against both their competition and the public.

    Basically, I will miss newspapers the way I miss slide rules.

    Posted by Solitude