I hate seeing bad news week after week about the newspaper business. For example, these headlines were in my email this morning:
by Erik Sass
Sam Zell is finding less room to maneuver when it comes to servicing the $8.4 billion debt incurred by Tribune Co. in the employee-owned deal he engineered. Although the company has met all of its debt obligations to date, the possibility of default sometime in 2009 looms ever larger with each new negative earnings release. ... Read the whole story
by Erik Sass In a further sign of the newspaper industry's woes, Gannett said it is planning to cut 1,000 jobs--representing about 3% of its workforce--in a memo to employees last week. The company will eliminate positions through a combination of attrition (leaving empty posts unfilled) and about 600 layoffs. All the layoffs will be complete by the end of this month, the company said. ... Read the whole story
I have friends that work for the local papers. Actually I have friends at nearly every media outlet and advertising venue in town due to relationships built over the years and also my role on the Board of Directors of the Advertising Federation of Fort Wayne.
In Fort Wayne we have two daily papers, with separate owners and they operate under a joint operating agreement which has been in place for years. They have separate news staffs, but joint advertising and operations staffs. (I don't know all the organizational details).
They have additional publications in the magazine world, where they compete with other area publishers. And they recently built a new press. Unfortunately, none of this will ensure their survival.
I can't accurately predict when it will happen, but eventually there will be one, not two papers. The subscriber base for the afternoon paper is continuing to die. The revenues overall simply are not going to be enough to support the overhead that they have with staff and operations.
This is not an isolated situation. What is isolated is that we still have two papers, when larger cities have only one, and even some of those have ceased printing.
Here's a bright spot for the Fort Wayne Newspapers. Their website. FortWayne.com
I did a comparison of local website traffic comparing the sources where people would go online for local news.
The top 3 websites are the Fort Wayne Newspapers site, followed by the television news websites. (There are two.) FortWayne.com beats the others by significant margins right now. But can they use their website to generate enough revenue to make up for the losses in revenue from the printed newspapers?
Again, I don't know their financials, and I really don't want to. I have antidotal evidence that they are hurting like the others in that business. Recently, I read of revenue losses in the industry of 30% or more on the paper side with increases from websites of 15%. Put those numbers together, and you are still losing money.
So what will happen, eventually?
In the short term, 4 to 10 years, we will only have one paper. And it's long term future depends on how well the company can restructure itself to balance its books. This will include staff cuts, increases in the website side of the business and perhaps other joint operations with other media.
The Heart and Soul of the Newspaper is local reporting, and as long as they can fit that into their budget, they have a chance. Otherwise, I'll be telling my grand kids about this thing we used to call the newspaper.
My plea to our local newspaper publishers and your parent companies, make the cuts now. Do it swift and with the future in mind. Plan for growth, not just survival, and wake up to the realities of what is happening to not just your industry, but all media and advertising venues.
By the way, we have a local media critic that has his critical take on this you might want to check out by clicking here. Sphere: Related Content
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