Three Big Publishers Tell Same Sad Story

Continuing to bang the drum slowly, Editor & Publisher reported financial results from three big newspaper publishers on Wednesday, each of them dismal:

• Journal Communications’ February revenue fell 7.5%, dragged down by catastrophic results at the flagship Milwaukee Journal-Sentinel. Check out these numbers from the Brew City: national ads down 31%, direct marketing down 54%, help-wanted ads down 31% and real estate ads down 26%. The only bright spot was online revenue, which was up 16%, but only to $1.1 million.
• McClatchy had a similar tale of woe, reporting that total revenue in February slid 11.7%. National advertising was off nearly 13%, while classified advertising declined 25%. The recession hit classifieds particularly hard as real estate and employment advertising both dropped more than 30%
• Finally, The New York Times Co. said that ad sales that fell 6.6% in February, largely due to plunging classified revenue (off 19%) and double-digit advertising declines at its New England group, including the Boston Globe. While the Times stopped short of blaming God for its troubles, it did note that March results will be “adversely affected” by the early Easter this year. Easter is traditionally a slow advertising period.

There was one bright spot, though. USA Today advertising jumped 14.5% in February. “Strong growth in the travel, technology, financial, packaged goods, retail, advocacy and pharmaceutical categories offset lagging the telecommunications and automotive advertising at the paper, Gannett said.” Here at the Death Watch, we’ve been saying all along that a few national newspapers will survive and actually thrive as the industry collapses. Count on The New York Times, The Wall Street Journal, The Washington Post and USA Today to come out the other end, as all made the jump to national distribution when they had the chance. Business travelers need a morning paper, and that’s an attractive audience for national advertisers.

And Yet Editors Still Don’t Get It

Here’s another indication that newspaper editors are still blissfully clueless about the long tail. The fifth annual “State of the American News Media” study by the Project for Excellence in Journalism finds that as newspapers cut staff, they’re actually concentrating their remaining resources in fewer places, which means they’re overlapping each other more. “You have in a sense more reporters across more outlets, but they are all covering a fairly narrow band of stories,” the project’s director told Reuters. “There are more people congregating at the White House, fewer at any one government agency.” So we’re still going to have 150 reporters covering a presidential press conference at which everyone sees the same thing instead of cutting back on White House coverage and redeploying staff locally, where it might actually do us some good.

Recognizing Unsung Victims of Newspaper Meltdown

MarketWatch Video deploys an international team of journalists to rip the lid off the story of the unappreciated victims of the newspaper industry implosion: journalist bars. The seven-minute story takes us to San Francisco, Chicago, Boston and New York, where bartenders reminisce about five-hour lunches and payday parties and mourn the decline of conversation. There’s even a 45-second clip from London, where the reporter’s only apparent contribution to the story is to show us that he’s in London. Hey, that’s more than the Boston Globe can say!

Staff Reductions Taking Their Toll

The steady stream of newspaper staff and budget cuts is beginning to be felt on the street.

Politico reports on the shrinking ranks of regional reporters covering Capitol Hill – the local Regional Reporters Association’s membership has dropped from 200 to 84 in a decade – and suggests that a lot of politician shenanigans may be going uncovered thanks to the dearth of watchdogs looking out for local interests. However, the story notes that specialty newsletters and publications like Congressional Quarterly have grown their staffs and that the total size of the congressional press pool has stayed about the same as a result.

Ken Doctor notes the broad trend toward cuts in newspaper business coverage and speculates about how newspapers can maintain a foothold in this area, which is often critical for ad sales. He sees national and international organizations like Dow Jones and Reuters increasingly syndicating their coverage to smaller papers in almost pre-packaged form.

E&P Totes Up the Numbers, and They Aren’t Good

Top U.S. newspapers have lost about 1.4 million copies in daily circulation, says Editor & Publisher. Declines of 20% or more have occurred at the LA Times, SF Chronicle and Boston Globe. Only two papers covered in the report – USA Today and the New York Post – managed to increase circulation. Factors include competition from other print and online media, publisher iatives to cut discounted or free copies and the creation of a national do-not-call list.

Despair and hope

Veteran journalist-turned-academic Tim McGuire writes a remarkably somber confession on his Arizona State University blog titled “I suddenly feel a lot worse about the future of newspapers.” The catalyst was comments by Reid Hoffman, the co-founder of LinkedIn. Hoffman apparently said that newspapers’ model of mixing profits with civic responsibility is fatally flawed. The two objectives just don’t mesh. This and other comments left McGuire, 58, feeling like he and others of his generation just don’t get the Internet enough to envision a newsroom’s future. Strong words for a man who’s supposed to be doing just that for his students. “Hoffman convinced me I’m way out of my element,” he comments.

Reid Hoffman weighs in with a lengthy comment on McGuire’s post, proposing to offer “some rays of hope.” However, there’s little hope evident in what he says.

Meanwhile, the publisher of the San Antonio Express-News exhorted his colleagues to fight the good fight at the Texas Daily Newspaper Association’s annual convention. Thomas Stephenson said that investing in digital platforms is only part of the solution. Newspapers have to earn reader loyalty and then make it easy for advertisers to reach them through whatever channels they can.

Vignettes from the field

Our RSS reader picks up occasional commentary by newspaper readers and former journalists that provide a glimpse into how the newspaper industry collapse is affecting ordinary people:

• A Bay Area book enthusiast laments the Chron’s decision to fold its stand-alone book review section into the weekly news analysis pages.
• A Twin Cities consultant lists the reasons he’s canceling his newspaper subscription. There are several. Like many readers, he simply doesn’t see much value any more. As newspapers slash costs and staff, the devaluation spiral continues. The product gets worse, which gives readers less inclination to read it.
• Mark Hamilton remarks wryly on the dubious value of incessant political polling
• Finally, the head of global public relations for Disney Parks & Resorts issues the most pessimistic forecast for the newspaper industry that we’ve heard anywhere. At about 10:20 in this podcast interview Eric Schwartzman, Disney’s Duncan Wardle states, “The printed newspaper industry has three to five years to live.” We hope his staff heard that!

Business sections feel the blow

Newspaper business sections have been hard hit by the ad downturn,

Glimmers of digital hope

The U.S. political campaign has apparently given a lift to newspaper websites, according to Media Post. Quoting: “The week ending February 23 saw visits to Web sites in Hitwise’s news and media category increase 22% compared to the same week in 2007. The upswing especially benefited Web sites for print publications, including online portals for magazines and newspapers. The New York Times Web site was the winner in the print category, taking 5% of total visits–a 50% increase in visits over last year. It was followed by People.com, with 3%, and The Washington Post, with 2%.”

There are so many cutbacks to report that we have to spread the news across two posts.

Bay Area Blues

The big news comes out of the Bay area, where some 1,300 employees at San Francisco-area newspapers were offered buyouts. The San Jose Mercury News offered packages aimed at shedding nearly 200 non-union employees and also said it would cut an unspecified number of union jobs. Bay Area News Group-East Bay, which includes the Tribune, the Times and 14 other newspapers, offered all 1,100 of its employees the chance to apply for buyouts, raising the question of what it would do if everyone took the offer. On the other hand, that might be a preferable option to staying in business. Employees have to decide by the end of this week.

MetroActive describes the somber mood in the Merc newsroom, which has lost half its staff since 2001. The story quotes the president of the San Jose Newspaper Guild says, “A whole lot [of people] have been looking for something else because they are done. This is not a company that people want to work for.” But where else are you going to go?

The AP quotes a veteran Merc business reporter saying, “We’ve been through this a number of times. You just wonder when it’s all going to end. The problem is nobody knows where the bottom of this is.” Hint: it’s still a long way down. The Merc covers its own gloomy news here.

In nearby Tracy, Calif., the Tracy Press has scaled its frequency back from five times weekly to twice weekly over the last six months and just laid off an unspecified number of staffers. The paper has a free circulation of 9,700. One of the laid-off employees commented, “I’m a victim of three things: the Internet, the real estate mess and the recession.” Management at Tracy‘s two other daily newspapers — the San Joaquin Herald and Stockton Record — have also recently announced cost-cutting measures, though this story didn’t specify what they were.

Venture Trims and Tells the Tale

In the spirit of true openness The Ventura County Star devotes 750 words to a layoff amounting to 2% of its staff, including perspective on its parent company’s finances and the overall health of the newspaper industry. No editors were affected in this round, however, the newspaper’s publisher ominously noted, “I don’t think we’ve seen the bottom yet…Things could get worse before they get better.”

Meanwhile, on the East Coast…

A blogger published a memo sent by Boston Globe publisher Steve Ainsley confirming layoff plans. “We are expecting a total reduction of 80 positions, with approximately 60 from the Globe and roughly 20 from the [Telegram & Gazette],” the memo said. “This reduction in staff is a difficult but necessary step toward our ongoing goals of reducing costs and finding efficiencies that allow for the long-term health of our business.” As the Silicon Valley of the east, Boston will see the ugly scenario now being played out in the Bay Area spread next to its shores. However, the whole thing will play out much more slowly there.

Can it get any worse in Philadelphia? In January, the publisher of the Inquirer spoke of “dire consequences” if costs aren’t cut at least 10%. Now Philadelphia Newspapers has laid off 68 Guild employees in the advertising, circulation, customer service, finance, marketing, and systems departments. That’s about 10% of Guild membership. It sounds like management-union relations aren’t so rosy there. Management basically tells the Guild it’s cutting expenses and that’s that. Meanwhile, Guild reps complain that they can’t get management to listen to their revenue-generating ideas. The concept of a union coming up with ideas to grow revenue sounds just a little too bizarre for this editor. What are they going to do: charge advertisers dues?

Not far away, in Allentown, the Morning Call announced an unspecified number of buyouts. No newsroom jobs will be affected, said editor Ardith Hilliard. A newsroom reorganization last month already resulted in eight lost positions, mostly through attrition.

Tribune Co. Will Cut Up to 500 Jobs – Editor & Publisher, Feb. 13, 2008
[New Tribune Co. owner Sam Zell initially told employees that he planned to grow the company out of its recent troubles, but those plans are evidently on hold for now. The layoffs only amount to about 2% of the total workforce. In a novel twist, they’ll be funded with overages from Tribune’s employee pension plan. The struggling LA Times will lose 40 to 50 editors. – Ed.]

Tribune Plans More Cuts; Courant May Lose 45 Jobs — Hartford Courant, Feb. 14, 2008
[The Hartford Courant will get caught up in the Tribune Co. layoffs, losing 45 positions, with 10 of them in the 240-person newsroom. -Ed.]

Tribune to cut 400 to 500 companywide, 45 at Sun — Baltimore Sun, Feb. 14, 2008
[It appears that 45 is the magic number for layoffs at Tribune Co. papers. The Baltimore Sun also expects to shed that many jobs. – Ed.]

New York Times Plans to Cut 100 Newsroom Jobs – New York Times, Feb. 14, 2008
[With 1,332 employees, the Times’ newsroom is still by far the largest in the industry. No competitor has more than 900 newsroom staffers. Nevertheless, pressure from shareholders can’t be ignored. An interesting note in this piece is that Rupert Murdoch says he’s committed to making the Wall Street Journal a formidable competitor to the Times and is ready to add to its 750-person newsroom staff in order to do so. – Ed.]

Star Tribune Sinks Deeper Into Oblivion – True North, Feb. 12, 2008
[The Minneapolis Star Tribune will cut 58 more jobs on top of the 145 positions it cut last spring. That will leave the paper with about 1,900 employees, or about 10% smaller than it was at this time last year. No editorial employees are affected by this round of layoffs. Most of the cuts are due to efficiences from an outsourcing contract.

In a recent memo, publisher Chris Harte echoed a now-familiar refrain: “Total revenue (print and internet advertising and circulation) is down almost $75 million in the last two years. Classified revenue has been the hardest hit part of our business, and our 2007 classified revenue was down over 50 percent from what it was at the start of the decade.” – Ed.]

Publisher GateHouse to cut 60 Mass. jobs – The Boston Globe, Feb. 14, 2008
GateHouse Media Inc. is cutting 60 positions at its Massachusetts publications, including The Patriot Ledger in Quincy, The Enterprise of Brockton, and dozens of suburban papers, according to an employee briefed on the plans.

Lost printing contract likely leading to job cuts – Champaign-Urbana News-Gazette, Feb. 9, 2008
The News-Gazette will have to cut costs – and probably jobs – as a result of the Chicago Tribune’s decision to print all of its editions in Chicago, News-Gazette Publisher John Foreman said. The News-Gazette will continue printing the Tribune until April 26, when seven of the 24 jobs in the pressroom will be eliminated.

‘Charlotte Observer’ Announces Job Cuts – Editor & Publisher, Jan. 31, 2008

McClatchy 4Q: Another Bad Quarter – MediaPost Publications, Feb. 7, 2008
Quoting: The McClatchy Company reported weak fourth-quarter results and a discouraging outlook for 2008, joining NYTCO and Gannett, which announced their results last week.

Gannett: 4Q Rev Drops Across Media – MediaPost, Feb. 4,2008
Quoting: “Overall, the company’s earnings were $245.3 million, down 31% compared to the same period in 2006, as revenue dipped 12% to $1.9 billion. For the full year 2007, Gannett’s newspaper ad revenues sank 6.4% to $4.9 billion, as broadcasting slipped 7.7% to $789 million.

“Like other newspaper publishers, Gannett reports that the collapse of print classified advertising revenue has been joined by declines in local and national advertising, including retail. Classifieds were down 11.4%, local 3.3%, and national 11.6%”

A.H. Belo shares fall on first day – Houston Chronicle, Feb. 11, 2008
[The stock market’s newest pure-play newspaper company disappoints in its first day as a publicly traded company. “There is a certain group of investors who don’t want to own newspapers, and they don’t care about the dividend,” says one analyst. – Ed.]

Help-Wanted Index Fell 33% in Dec. – Editor & Publisher, Feb. 1, 2008
[The Conference Board’s index of help-wanted advertising in 51 major newspapers plummeted an astonishing 33% in December. However, the organization chooses to interpret the fall as a sign of an economic slowdown rather than the real reason, which is that newspaper help-wanted advertising is no longer efficient. – Ed.]

‘Denver Post’ To Cut Biz Section – Editor & Publisher, Feb. 4, 2008
[The paper says that the standalone business section had “no heft.” The merged metro/business section will run about six pages. No job cuts are planned and business coverage won’t suffer, the Post Editor said. Last months, the Orange County Register did the same thing. Businesspeople are more likely to get their information online, so it’s no surprise these are the first sections to get cut. – Ed.]

An Industry Imperiled by Falling Profits and Shrinking Ads – New York Times, Feb. 7, 2008

[Nothing in this Times account will come as a surprise to readers of the Death Watch, although there’s a good point about consolidation of local businesses into national chains affecting advertising. This piece is mainly a mashup of the doom-and-gloom that has pervaded the industry for the last year or so. – Ed.]

A Canadian is shaking up the Northwest newspaper business – Crosscut Seattle, Feb. 4, 2008

[David Black has made a fortune investing in newspapers (he owns 175 of them) and he’s actually stepping up his investments as the industry turns down. Black sees opportunity in being on every doorstep in the communities his papers serve. Although he’s been criticized as a bottom-feeder, his strategy has worked. – Ed.]

‘Miami Herald’ Won’t Outsource Editorial After All – Editor & Publisher, Jan. 15, 2008
[The controversial experiment is abandoned over quality concerns. Outsourcing of some production and website monitoring will continue. -Ed.]

The times are changing, and so is your newspaper – sacbee.com, Jan. 13, 2008
[The new editor of the Sacramento Bee makes it clear in her inaugural column that online is where it’s at. -Ed.]

Goldman Sachs Predicts Grim Year For Newspapers – MediaPost, Jan. 10, 2008
Quoting: Newspapers will take it on the chin in 2008, according to analysts with Goldman Sachs, who warned Wednesday of a potential double-whammy, as the industry’s secular downturn converges with a broader economic slowdown. Overall, they forecast a 7.9% decline in revenue, a much more substantial drop than their earlier prediction of just 2.6%. The predicted 7.9% drop is especially gloomy as it comes after several years of losses, compounding a 1.8% decline in 2006 and a roughly 8% drop in the first three quarters of 2007 compared to the same period in 2006."

Bostonian To Blaze New Trail at Edmonton Journal? – Canada Rocks, eh!, Jan. 19, 2008
[An embittered former reporter details the cost-slashing that’s gone on at the newspaper where he used to work and wonders how an optimistic new publisher can make a difference in a company that he believes is bent on cutting costs to a minimum. -Ed.]

‘Chicago Tribune’ Eliminates Print Help-Wanted Ads On Weekdays – Editor & Publisher, Jan. 14, 2008 
Quoting: "Instead, there will be a listing of basic information in the business section every Tuesday. The listing, called ‘Careerbuilder QuickFind,’ will refer readers to the full recruitment ad on chicagotribune.com/careerbuilder through a Web ID…Print help-wanted classified will continue to run in the Sunday paper under Careerbuilder section title, but the Tribune said the section will have ‘a bold new look with fewer columns, larger ads, and clear headings that enable easier page scanning and navigation.’

Editorial Cartoon Group Prez Hits Huge Payout to Former Tribune Co. Boss — And Delivers ‘Top 10’ List – Editor & Publisher, Jan. 5, 2008

[News that former Tribune Co. executive Dennis FitzSimons had received a $41 million golden parachute prompted one Pulitzer Prize-winning cartoonist to express outrage that the payout was so low. Nick Anderson then proposed the “Top 10 ways that Dennis FitzSimons can get a bigger payoff.” They include “Remaining staffers at Tribune papers sell a kidney to go the extra mile for Fitz.” – Ed.]

Back to the chopping block – Reflections of a Newsosaur, Jan. 13, 2008

[Alan Mutter isn’t optimistic about the economy in 2008, and he sees terrible implications for newspapers. If newspaper revenues decline 7.9%, as one analyst has forecast, instead of the generally accepted 5%, then the cost
cuts needed to sustain profitability would amount to 15% of total newspaper payroll. And that’s not all. Debt service costs could increase and papers could be required to make deeper staff cuts to balance increases in insurance and other expenses. Unless the economy rallies, it’s looking like an ugly year. – Ed.]

The Cincinnati Enquirer Expands Coverage and Grows Online Video Presence with Avid Media Publishing Solutions – Business Wire, Jan. 8, 2008

[This press release notes that the Enquirer “has a team of 40 video producers and online editors trained to generate news stories with video elements – up from eight this time last year.” The newspaper, perhaps emboldened by the recent death of the Cincinnati Post, appears to be making some significant investments in multimedia coverage. -Ed.]

Media Biz: Dead trees, dead stocks, dead cat bounce? – CNN Money, Jan. 7, 2008

[A columnist sees another tough year for newspapers, with pressure growing for some companies to go private. But there are bright spots at companies like the Washington Post, which is diversifying and growing revenue. More papers should follow the Post’s lead, he says. -Ed.]

Newspapers:
Hitting The Coffin Nail on the Head – Seeking Alpha

[Noting that the internet is “not built on big. It’s built on a mass of smalls. And newspapers think big. That’s their real challenge,” Jeff Jarvis suggests that newspapers brought their current crisis on themselves by focusing their sales efforts on $100,000 advertisers and ignoring the mass of $100 advertisers. He suggests that the only way out of this predicament – if there is one – is to spin off sales units to go after small customers. It’s wise advice, but can newspapers make the attitude shift to embrace the Long Tail? Doubtful. – Ed.]

There are signs that the industry is trying to reinvent itself, or at least complain more vociferously about the forces that are marginalizing it.

What’s Black & White And Spread All Over? – MediaPost, Dec. 10, 2007
[A study commissioned by the newspaper industry finds that newspaper readers are more likely to be influencers than non-readers. The results really aren’t surprising. In percentage terms, twice as many people over the age of 60 read daily newspapers as under the age of 30. Given that newspaper readership increases with age, it’s not too much of a stretch to believe that older people would be more influential in purchasing decisions than kids. You can also assume that people who can afford a subscription to a newspaper are somewhat more affluent than those who rely solely on the Web. It’s hard to tell; the rather skimpy 10-slide presentation on the NNN’s site gives no demographic breakdown. – Ed.]

Unfettered ‘citizen journalism’ too risky, ajc.com, Dec. 13, 2007
[The author calls for “citizen journalism” to be regulated and/or certified. The scenarios he outlines to support his case are valid. Unfortunately, professional journalists aren’t licensed or certified, so the idea that ordinary citizens should be subjected to some kind of review process rings pretty hollow. -Ed.]

Local Papers’ Web Scramble – WSJ.com, Dec. 18, 2007
[Newspapers are rapidly losing market share in the one market in which they should have a significant edge: local advertising. In 2007, for the first time, pure-play Web companies had a larger share of local advertising than newspapers. In just three years, newspapers’ overall share of that market is down from 44% to 33.4%. This is largely newspapers’ own fault. Instead of investing in local sales staff over the last decade, they have mainly focused on trying to sell more high-margin national display advertising. Meanwhile, pure-play Web companies swooped in and took their market share. -Ed.]