The Future for Newspapers


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The Future for Newspapers

  1. 1. The future for Is there one?
  2. 2. A New Problem? “ The (traditional) mass media are actually shrinking in size relative to the total economy.” Richard Maisel, “ The Decline of Mass Media,” Public Opinion Quarterly, 1973!
  3. 3. Journalism Quarterly Autumn 1974 “ Marketing Myopia” appears to threaten newspapers with de- creasing share of economic support in “post-industrial society.”
  4. 4. Trend Lines – 1950-2007
  5. 6. <ul><li>A few disturbing facts . . . </li></ul><ul><ul><li>Adult readership continues to fall. </li></ul></ul><ul><ul><li>Only 19% of the 18-34 year olds rank newspapers as their primary source of information. </li></ul></ul><ul><ul><li>60% of newspapers under 500,000 lost circulation. </li></ul></ul><ul><ul><li>65% of newspapers under 25,000 lost circulation. </li></ul></ul><ul><ul><li>69% of all Sunday newspapers lost circulation. </li></ul></ul><ul><ul><li>But the population continues to grow. </li></ul></ul><ul><ul><li>So penetration is dropping even faster than circulation! </li></ul></ul>
  6. 7. <ul><li>How bad is it…really? </li></ul><ul><ul><li>Weekday circulation in 2009 is at about the same level as in 1955. </li></ul></ul><ul><ul><li>But the population has grown about more than 65%! </li></ul></ul><ul><ul><li>So here’s what has happened to penetration… </li></ul></ul><ul><ul><li>Newspaper household penetration peaked in the 1920s at about 130%. In other words, 130 newspapers were sold for every 100 households in the USA. Now penetration is less than 50% and still falling. </li></ul></ul>
  7. 8. The Result? Though circulation has fallen back to pre-Baby Boom levels, the population has more than doubled since 1946. If you divide circulation by population, you will find that fewer than 18 out of 100 Americans today buy a daily or Sunday newspaper. Back in 1946, 36% of the population bought a daily paper and 31% took a Sunday edition. Population growth and newspaper circulation are going in opposite directions. From Reflections of a Newsosaur , April 29, 2008
  8. 9. National Daily Newspaper Household Penetration . . .
  9. 10. Philip Meyer, October 3, 2005
  10. 11. Pew Research, Dec. 28, 2008 “ Where do you get most of your national and international news?”
  11. 12. “ I value the opportunity to get news using Internet/wireless technology&quot; May 05, 2006, Posted by Ben Compaine
  12. 13. Newspaper & Total Advertising Newspaper’s Share
  13. 14. Why is this happening? “ Readers simply have access to a great many news outlets that didn’t exist 20 years ago, including the online sites of newspapers themselves.” -
  14. 15. What Lies Ahead? “ I really don’t know whether we’ll be printing the Times in five years, and you know what? I don’t care either. The Internet is a wonderful place to be, and we’re leading there.” New York Times Publisher Arthur Sulzberger, Feb.2007 -
  15. 17. <ul><li>Marketing Myopia… </li></ul><ul><li>Still Alive & Well? </li></ul><ul><ul><li>We are NOT in the business of putting smudgy ink on newsprint in massive, expensive production facilities. </li></ul></ul><ul><ul><li>We ARE in the information business. </li></ul></ul>
  16. 18. <ul><li>Marketing Myopia… </li></ul><ul><li>Still Alive & Well? </li></ul><ul><ul><li>We are NOT in the newspaper industry. </li></ul></ul><ul><ul><li>We ARE in the information business. </li></ul></ul>
  17. 19. And our competition is NOT other newspapers!
  18. 20. Today our competition includes . . .
  19. 21. All competing for . . .
  20. 22. “ Two years ago search engines were not viewed as much of a threat, (but) over the past year newspapers have recognized their effect.” John Strum, Newspaper Association of America The trend continues . . .
  21. 23. As I was saying . . . “ If the newspaper is to survive in the decades ahead, it must do so on the basis of offering the consumer a product which fulfills the needs of the consumer.” Me, Journalism Quarterly, 1974
  22. 24. “ It must begin to react intelligently and quickly to the changing economic and social environment of which it is a part.” Me again, Journalism Quarterly, 1974
  23. 25. <ul><li>Newspapers – A Dying Medium? </li></ul><ul><li>“ History has proved most of these gloomy prognosticators wrong IF (and this is a big if) the media reacted intelligently and quickly to their changing environment.” </li></ul><ul><ul><li>William A. Mindak , </li></ul></ul><ul><li>Public Opinion Quarterly </li></ul><ul><li>1973 </li></ul>
  24. 26. So how are we doing?
  25. 27. <ul><li>“ The venerable newspaper is in trouble. Under sustained assault from cable television, the Internet, all-news radio and lifestyles so cram-packed they leave little time for the daily paper, the industry is struggling to remake itself. ” </li></ul><ul><ul><li>Washington Post </li></ul></ul><ul><li>February 20, 2005 </li></ul>
  26. 28. <ul><li>“ I don’t see any bright spots and I don’t see any reasonable expectation this is going to change anytime soon.” </li></ul><ul><ul><li>John Morton, newspaper industry analyst </li></ul></ul>
  27. 29. “ For the third consecutive year, daily and Sunday circulation of America’s newspapers fell sharply in 2006. “ The losses may moderate in 2007, but few in the industry are now saying the downward trend can be reversed in the foreseeable future. And 2006 in the end was worse that many had expected.” - The State of the News Media 2007,” The Project for Excellence in Journalism
  28. 30. Facing plummeting print circulation and an extremely challenging economy, the newspaper industry is clearly in crisis. According to the Audit Bureau of Circulations, American newspapers have seen a steady decline in print circulation over the last fourteen years. This trend directly correlates with the rise of the Internet as a news source. Indeed, in October of 2008 The Christian Science Monitor announced that it would be the first major newspaper to stop its daily print edition and exist only online. Today’s newspapers are in a situation where they must embrace new technologies in order to stay relevant and survive. The Bivins Group, Dec. 2008
  29. 31. Already in 2009. . . “ The bad news for the newspaper industry keeps piling up: • The Rocky Mountain News has closed. • The Tribune Company, owner of the Los Angeles Times and Chicago Tribune , bankrupt • The New York Times Company forced to enter into a $250 million &quot;private financing agreement&quot; with a Mexican telecom magnate. • The Detroit News home delivery cut to three days a week. • The Los Angeles Times and the Philadelphia Inquirer are mere shadows of themselves. • The Seattle Post-Intelligencer up for sale, may close. • The Denver Post negotiating wage concessions , furloughs with its newsroom employees. And before the end of 2009, there is a good chance there will be at least one major American city without a daily newspaper. “ Denver Post , Feb. 15, 2009
  30. 32. <ul><li>More? </li></ul><ul><ul><li>The downturn for newspapers began several years ago as Web sites like Craigslist offered free advertising alternatives and Internet search leader Google Inc. developed a more effective marketing vehicle. The worst recession since the early 1980s has prompted advertisers to curtail spending even further. </li></ul></ul><ul><ul><li>The U.S. newspaper industry, as a whole, is expected to collect about $28 billion in ad revenue this year, a 40 percent drop from $46.6 billion in 2006, according to a Barclays Capital analysis. </li></ul></ul><ul><ul><li>While both Media General and Tribune belt tightening is meant to preserve jobs, newspaper publisher McClatchy Co. gearing up for its third payroll purge since June. </li></ul></ul><ul><ul><li>McClatchy executives warned of more layoffs earlier this month when they disclosed a fourth-quarter loss of $21.7 million and acknowledged the slide in its advertising revenue was accelerating. </li></ul></ul><ul><li>- Associated Press, Feb. 18, 2009 </li></ul>
  31. 33. <ul><li>And Still More? </li></ul><ul><ul><li>Scripps’ long-suffering newspaper business put the company into the red overall for the quarter. Newspaper profits sank 65.5%. </li></ul></ul><ul><ul><li>Just advertising revenues alone at the newspapers were down 19.8% to $104.8 million, with local business down 15.1%, classified off 27.7%, and national advertising down 18%. </li></ul></ul><ul><ul><li>All this put Scripps at a net loss from continuing operations at $19.4 million. A year before, Scripps posted a $44.7 million net profit -- a $64.1 million plunge. </li></ul></ul>
  32. 34. <ul><li>And Even Still More? </li></ul><ul><ul><li>February 19, 2009 - SAN FRANCISCO -- Thousands of workers at U.S. newspapers and broadcasters are facing more layoffs, wage freezes and pay cuts as their cost-cutting owners scramble to survive an advertising drought that has become even more dire in recent weeks. </li></ul></ul><ul><ul><li>Media General Inc. informs its 5,600 workers that they will be forced to take 10 unpaid days by end of year to furloughs to save about $9 million. </li></ul></ul><ul><li>  </li></ul><ul><ul><li>Media General previously trimmed about $19 million from its expenses by suspending matching contributions to workers' retirement plans and suspended dividend payments to shareholders. </li></ul></ul><ul><ul><li>Associated Press </li></ul></ul><ul><li>  </li></ul>
  33. 35. <ul><li>And Even Still More? </li></ul><ul><ul><li>After defaulting on its debt and being de-listed from the New York Stock Exchange last year, the Journal Register Co. put scores of small-town weekly newspapers up for sale but said it would be forced to close them if no buyers came forward. </li></ul></ul><ul><ul><li>The threat became a reality. </li></ul></ul><ul><ul><li>With the decline of newspaper ad revenues coinciding with a recession and credit crunch, Journal Register's finances imploded, and its myriad acquisitions proved unsustainable. </li></ul></ul><ul><li>Media Daily News , Feb. 12, 2009 </li></ul>
  34. 36. Finally . . . Belden Associates shutting down Jan. 14, 2009 Belden Associates, a research company that’s served the newspaper industry for 68 years, has formally announced it’s closing. With the industry in such a rapid period of change, you’d think audience and readership research would be more important than ever. But fewer companies than in years gone by are willing to pay for it. “ See if this doesn’t resonate: Our cost structure and many of our products and services were no longer in alignment with evolving customer needs.”
  35. 37. The only thing increasing in the newspaper industry is the number of newsroom layoffs!
  36. 38. Newsroom
  37. 39. But Wait . . . That’s the big dailies. Community newspapers are doing just fine! Aren’t we?
  38. 40. “ After technically defaulting on its debt and being de-listed from the New York Stock Exchange last year, the Journal Register Co. said it was putting scores of small-town weekly newspapers up for sale--but would be forced to close them if no buyers came forward. “ The threat has become a reality over the last two months, with closures accelerating in recent weeks. Wednesday, February 11, 2009
  39. 41. Community papers struggling: Vail Daily cuts staff to 2002 levels On the day Denver lost one of its major metro newspapers, the Rocky Mountain News, there are signs that even small-town community newspapers in Colorado — once believed to be relatively bulletproof — are starting to struggle. Colorado Independent, March 1, 2009
  40. 42. March 2, 2009 Budget woes hit city's smaller papers, too A sign that newspapers' troubles extend beyond dailies was in the envelope Pacific Publishing publisher Mike Dillon dropped on Erik Hansen's desk two Fridays ago. &quot;He said, 'I'm sorry, Erik' and walked off,&quot; Hansen said. No other explanation was necessary. Dillon had told the staff the day before that layoffs were coming. Hansen, who edited and did much of the reporting for two neighborhood papers, the South Seattle Beacon and the Madison Park, and the more widely distributed City Living, was let go. Capitol Hill Times editor Doug Schwartz and four salespeople also lost their jobs. Seattle Post Intelligencer
  41. 43. <ul><li>“ Don’t believe what you hear or read in the national press about newspapers dying, ‘cuz it ain’t true for Texas’ weeklies. </li></ul><ul><li>“ This year for the first time in at least five years Texas’ weekly newspapers as a whole gained circulation and ended slightly up on the plus side of the numbers game. </li></ul><ul><li>“ Texas Press Association’s annual audit of newspaper circulation is in and the numbers give weekly publishers something to cheer about. </li></ul><ul><ul><li>186 weeklies declined in circulation </li></ul></ul><ul><ul><li>138 weeklies increased in circulation </li></ul></ul><ul><ul><li>1,350 net increase in 2008” </li></ul></ul><ul><li>Texas Press Messenger , Dec. 11, 2008 </li></ul>
  42. 44. <ul><li>But for Texas weeklies, there was . . . </li></ul><ul><ul><li>1,305 increase in 2008 </li></ul></ul><ul><ul><li>13,039 decrease in 2007 </li></ul></ul><ul><ul><li>11,689 net decrease in last two years </li></ul></ul><ul><ul><li>Semi-weeklies lost 3,303 circulation </li></ul></ul><ul><ul><li>Daily newspapers lost 141,149 </li></ul></ul><ul><ul><li>A total loss of 143,092 circulation </li></ul></ul><ul><ul><li>While Texas population increased 201,037 </li></ul></ul>
  43. 46. COMMUNITY NEWSPAPERS REPORT 4TH QUARTER RESULTS; CONTINUE TO OUTPERFORM INDUSTRY All newspaper industry news is not bad March 04, 2009 | 11:52 AM Community newspapers were impacted by the challenging economy but in a much smaller way than the industry in general , according to fourth quarter 2008 financial data collected by the trade associations Suburban Newspapers of America (SNA) and National Newspaper Association (NNA). The SNA/NNA fourth quarter financial reporting group reports total advertising revenue at $428.7 million, a 6.6% decline from the same quarter in 2007. As a point of comparison, Glennco Consulting Group estimates an overall industry decline in fourth quarter advertising expenditures of 21% and many large companies have reported declines in excess of 20%.
  44. 47. Community Newspapers Alive and (Fairly) Well Columns | March 4, 2009 By Art Hall I have just returned from national newspaper conferences which I attend annually; this year one was in Texas and the other in Florida. While there were a few metro dailies present, the majority were community papers. And while all newspapers are struggling currently because their advertisers have less money to spend, unlike the regional and metro dailies, the community newspapers aren’t threatened with bankruptcy.
  45. 48. In response to a request, TPA members sent us more than a dozen web sites that already have been launched to compete with local newspapers in Texas. Here’s what one person said: “ We haven't really had any loss of revenue (that we can tell), but they do have a few people who are loyal and will give them information and not us. “ It has been a pain, but we try to continue to run our business the way we always have. ” 
  46. 49. That “non-competitive” web site has 22 advertisers! <ul><ul><li>2 banks </li></ul></ul><ul><ul><li>2 restaurants </li></ul></ul><ul><ul><li>2 insurance companies </li></ul></ul><ul><ul><li>Office supply store </li></ul></ul><ul><ul><li>Auto dealer </li></ul></ul><ul><ul><li>Drug store </li></ul></ul><ul><ul><li>Well driller </li></ul></ul><ul><ul><li>Grain company </li></ul></ul><ul><ul><li>Resale shop </li></ul></ul><ul><ul><li>Auctioneer </li></ul></ul><ul><ul><li>Farm supply store </li></ul></ul><ul><ul><li>Home care provider </li></ul></ul><ul><ul><li>Grocery marketplace </li></ul></ul><ul><ul><li>Implement dealer </li></ul></ul><ul><ul><li>Photographer </li></ul></ul><ul><ul><li>Motel </li></ul></ul><ul><ul><li>Radio station </li></ul></ul><ul><ul><li>Drug store </li></ul></ul><ul><ul><li>Radio Shack </li></ul></ul>
  47. 50. <ul><li>The Newspaper Industry Motto: </li></ul><ul><ul><li>We do it this way because we’ve always done it this way. </li></ul></ul><ul><ul><li>We can’t do it that way because we’ve never done it that way. </li></ul></ul>
  48. 51. Or . . . “ It has been a pain, but we try to continue to run our business the way we always have.”  
  49. 52. <ul><ul><li>“ If you want to make enemies, try to change something.” (Woodrow Wilson) </li></ul></ul><ul><ul><li>“ The main dangers in this life are the people who want to change everything . . or nothing.” (Lady Astor) </li></ul></ul><ul><ul><li>“ If you don’t like change, you’re going to like irrelevance even less.” (Gen. Eric Shinseki) </li></ul></ul><ul><ul><li>“ Change is the law of life. And those who look only to the past or present are certain to miss the future.” ( John F. Kennedy ) </li></ul></ul><ul><ul><li>“ What’s black and white and completely over?” (John Stewart, The Daily Show) </li></ul></ul>
  50. 53. <ul><ul><li>Sooner or later online news will replace up to 95 percent of printed news. The mere fact that printed news cannot compete with either production speed or reproduction cost of digital media is in itself a killing economical argument. </li></ul></ul><ul><ul><li>The true reason though is that digital news are more useful and more democratic and thus more appealing to a democratic society. </li></ul></ul><ul><ul><li>The end of old media is, all in all, a positive and overdue socio-political development. Old-school editors that try to resist the inevitable change that is happening throughout all levels of society will be punished by life. </li></ul></ul><ul><li>Oliver Reichenstein, The Future of News </li></ul><ul><li>an iA Publication, 2007 </li></ul>
  51. 54. People will never spend hundreds of dollars for electronic, digital readers. Oh? Think about this: Estimated annual cost to print The New York Times $644,000,000 Loyal readers 830,000 Kindle II X $359 Total $297,870,000 Savings: $346,130,000 Printing The NYT Costs Twice As Much As Sending Every Subscriber A Free Kindle Nicholas Carlson | January 30, 2009 4:35 PM
  52. 55. Plastic Logic Reader 8.5 by 14 inches Sony Reader iREX 1000 Viva eBook Readius
  53. 56. Amazon Can't Meet Demand for Kindle (March 2008) Yesterday Amazon CEO Jeff Bezos posted a letter to customers apologizing for not being able to fulfill demand for the company's e-book reader Kindle. The Kindle enables readers to upload books, newspapers and favorite blogs for mobile perusal. When the Kindle launched in November the first batch sold out in just 5 and a half hours, according to Bezos. Since then orders have been queued, pending availability. The reader is now offered on a first-come, first-serve basis. Some customers must wait as long as six weeks after ordering. Amazon committed to boosting production in the coming weeks. Its ultimate goal is to ship a Kindle out the same day it is ordered.
  54. 57. Newspapers 1605-20?? RIP Newspapers 1605-20?? RIP
  55. 58. Newsroom
  56. 62. <ul><li>Newspapers are fighting hard to survive </li></ul><ul><li>Terry Eberle • • March 8, 2009 </li></ul><ul><ul><li>Who would have thought that the voice of Philadelphia could be in danger of being silenced? </li></ul></ul><ul><ul><li>That the people who have watched over public figures for more than 200 years could be fighting for survival? </li></ul></ul><ul><ul><li>But on Feb. 21, the owners of the Philadelphia Inquirer , the Philadelphia Daily News and filed for bankruptcy protection in a bid to restructure. </li></ul></ul><ul><ul><li>The owners said the operations were sound and profitable but they had to restructure their $390 million debt. </li></ul></ul><ul><ul><li>This follows bankruptcy filings by the Minneapolis Star Tribune and the Journal Register company. </li></ul></ul><ul><ul><li>The Tribune company, owners of such newspapers as the Orlando Sentinel, The Sun Sentinel in Fort Lauderdale and the Chicago Tribune , filed for protection in December. Its debt load hit $13 billion. </li></ul></ul><ul><ul><li>Yes, the newspaper industry is in financial trouble. </li></ul></ul><ul><ul><li>No, I don’t believe it is dead. </li></ul></ul><ul><ul><li>We must get our financial house in order. This is not something editors like to think about or talk about but it is part of our reality. </li></ul></ul>
  57. 63. <ul><li>Newspapers are fighting hard to survive </li></ul><ul><li>Terry Eberle • • March 8, 2009 </li></ul><ul><ul><li>If we are not viable and are not strong, we cannot be independent. Without it, we may not have a voice. </li></ul></ul><ul><ul><li>We also must remain strong because small businesses depend on us. We buy paper, cameras and batteries. We eat lunch, entertain clients and drive cars. We connect advertisers to their customers. We are part of the community. </li></ul></ul><ul><ul><li>How are we making it? </li></ul></ul><ul><ul><li>The News-Press and our parent company are making the hard choices today so we can reinvest in the future. </li></ul></ul><ul><ul><li>We haven’t incurred as much debt as other companies. </li></ul></ul><ul><ul><li>We will be smaller but with a greater reach. We are learning to do more things in new ways. </li></ul></ul><ul><ul><li>We are learning to reach greater audiences and are reaching new people. We are doing it through the printed newspaper, magazines, weekly newspapers and online. We are doing it with text messages, video and live broadcasts on </li></ul></ul><ul><ul><li>We are talking more with customers and we are listening. </li></ul></ul><ul><ul><li>We will do it with better content, better writing and better story selection. We will do it with compelling headlines and photos. And we will do it with live video and through social networking. </li></ul></ul>
  58. 64. Blogs Google Voice-Over Mining Data WiFi iPod BlackBerries FlashDrive Vodcasting Citizen Journalism RSS FTP Podcasting Digital Media Globalization Audience Fragmentation Circulation Declines YouTube XML FaceBook HTTP URL