During growth, and certainly maturity, companies must make the effort to innovate to avoid the decline phase of their business life span. Most newspapers have failed to do this and are now attempting to innovate while in steep decline.
The timing of new product launches must come well before the old product decline phase so that declining revenues and new product revenue growth offset each other.
Newsday is reportedly worth about 400 million dollars. Murdoch was willing to pay 580 million dollars.The Daily News is also offering 580 million dollars. Cablevision is offering 650 million dollars. It is only because these companies have a local interest in the market that they are willing to pay above the 400 million dollar mark for a floundering newspaper.
I recently received my Presstime Magazine from NAA. In it, the Newspaper Association of America announced their new incoming Chairman would be Gary Pruitt. Gary is the CEO of The McClatchy Co. As reported on Yahoo finance,
“Its newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The (Raleigh) News & Observer. As of December 31, 2007, the company owned 30 daily newspapers and approximately 50 non dailies located in 29 markets.”
A $100 stake in MNI purchased on April 23, 2005 would today be worth $12.40. This represents an 87.6% decline in shareholder value. Here is how other newspaper publishers have fared during that same time span:
In his bio, Mr. Pruitt has been CEO of MNI since 1996. From then until 2005 he increased shareholder value almost 600% But the times have changed. The paradigm has shifted. McClatchy needs a new LEADER, someone with a new skill set to lead and inspire in this new media landscape. For him to be the choice for NAA Chairman speaks volumes about how out of touch and lost that organization has become. I wanted so much for someone from forward thinking organizations such as Scripps or Washington Post to be the next chairperson. Oh boy. Where is the innovation? How is your organization adapting to the market expectations?
Editor & Publisher referred to the event as “The Big Empty”. This type of morbid humor is usually one of the indicators of flagging hope in one’s profession.
Newspapers & Technology conducted a survey asking members whether they would be attending Nexpo. They reported in March 2008 that for the first time in their history, more people said they were NOT going than going.
Philip M. Stone reporting on FollowTheMedia.com says, “Vendors seemingly were standing around talking to one another more than they were to prospects”. The number of attendees is estimated here at 450.
Columbia Journalism Review puts the registered attendees at 609 however they mention that they “would be surprised if even that many had shown up on the floor”.
Previous NEXPO Attendance figures are ridiculously hard to get, but here’s what I found. Submit corrections with a cited source please.
Year__Attendance__Location
Not much to say here, but it is important so I had to post it. NAA released data indicating that total print ad revenue dropped 9.4% in 2007. The biggest single year decline since the association began measuring this data in 1950. Read all about it here:Editor & Publisher
Ohio. The Cincinnati Post was printed and distributed there and in neighboring Kentucky for over one hundred and twenty six years. The peak circulation saw some 275,000 papers being printed daily. But that circulation figure is from 1961 , so I ask you. What the hell was the paper doing from then till now to lose circulation? My answer is this, “Everything it could”. Cruising around the net and speaking to people, this story is played off like the Post is just another Internet casualty. The fact is that this paper was operating under multiple pressures giving it a high mortality rate compared to other newspapers.
I believe the Cincinnati Post went out of print circulation because the publication’s business strategy no longer made it useful to readers. The flaws break down as such: First, the paper was an afternoon edition putting it in direct competition with all other forms of news dissemination at a time in the day when people are not accustomed to reading papers. Indeed there exist only 614 afternoon papers in America.(NYT) Second, the paper was a joint effort between Gannett and E.W. Scripps, meaning no one entity cared enough about the product as a whole. When responsibility is spread too thin, there is no accountability. Also, the joint operating agreement between these two publishers ended on December 31 of 2007 and that is when the print version was terminated. They knew three years ago the paper would fold. Finally, there were two papers operating in Cincinnati and that is just an untenable situation these days. One paper is enough in a city that small.
Other afternoon papers beware this fate. Innovate and stay relevant!
Presstime Magazine
November 2007
According to the Newspaper Association of America, consumption of newsprint declined from 2006 to 2007 approximately 10% in the United States (as measured in metric tons).
During this same period of time cumulative circulation dropped approximately 3%. It is assumed that the 7% difference between the two figures is a result of web width cut downs and fewer page counts due to advertising losses.
Global newspaper, Metro International issued a warning that it will lose 18million dollars in 3rd quarter 2007 versus 9million from the same time last year.
I can’t comment on their worldwide operations, but I see what they are doing in NYC and it is not difficult to see why they are losing money there. First off it is one of the most competitive newspaper markets in the nation paid or otherwise. Second, their content is homogeneous. It is almost all AP newswire stories. AMNY at least gets to siphon content off Tribune and Newsday. Lastly, Metro’s website is not as widely read as the AMNY website. According to Alexa, metro’s 3month reach is .000355% compared to amny’s at .0026%
I think metro should pull out of the New York Market. They have no competitive advantage over the other papers serving this area. What value are they providing that market? Perhaps they should expand in the Asian or African markets?
Comments on the Bridge collapse and how papers handled it. I find nothing original and where is the hyper-local emphasis when papers around the country ran with this story as their centerpiece? I contend that news is news and no one want to look stupid for not reporting an obvious news story, but come on. If you want to survive then differentiate yourself. All these papers are doing the same thing and all are in decline.
Josh Jackson, News designer/planner, Savannah Morning News starts the debate off on BestFrontDesign.com Below is my comment in full. Go back and check them all out yourselves though, it is a worthy discussion. Where is the innovation?
Metaprinter
“I’d like to build on what Josh Jackson mentioned. When I was at the NAA Mid-Year Media Review, all the papers were talking about the “hyper-local” movement and what they were doing to capture this market. But here I am all the way in New Jersey and this event is all over the cover of our largest newspaper. So is “hyper-local” just an industry invented catch phrase to give the impression of a newly created market and revenue stream? or is it a reality? It seems the more things change, the more nothing changes at all. This news would have been handled the same way 20 years ago.”
Here is an interesting statistic which I believe highlights people’s acceptance of online media. According to a recent NewsWeek article, the number of checks Americans have written has fallen from 50 billion checks in 1995 to 36.6 billion checks in 2003. At the same time, the number of electronic payments rose from 15 billion transactions to 44 billion transactions.
To me, this signals a rapidly growing acceptance of internet usage for more than entertainment purposes. People are more and more comfortable using their computers to conduct business transactions. People, older people, are getting more comfortable with this thing called the internet, they are figuring out this new medium and their fears are fading. People are getting comfortable releasing their financial and personal information into the nebulous ether of the internet. Do you remember all the places where you’ve left your data? I sure don’t. I find this pretty amazing considering the fact that identity theft is one of the most common crimes, or maybe that is why?
Either way, time spent online is rising rapidly and that is not good news, no pun intended, for traditional print media.
I often read or hear about the impending death of newspapers and the fact that no one is interested in anything they have to offer and they have become totally irrelevant in our current electronic culture. Don’t get me wrong, I know our information is now disseminated in a multimedia landscape, this is true, but then I hear… “and they just don’t get itâ€. They don’t? Really?
Sometimes Blogger, Walter Abbott, refers to newspapers as, “The Dinosaur Media: A One-Way Medium in a Two-Way World†in his apocalyptic blog posts Dinosaur Media Deathwatch. I agree that large media outlets are slow to change, however the use of the word dinosaur implies these companies have no idea what is coming. As if they are all standing around saying to each other, “is it cold in here? What happened to the sun?†They know very well what is going on and are actively working to integrate these new mediums into their business model.
I will always argue that there is still power in the printed word because I see it. Newspapers are in every city in the world. The content they provide to their readers is tailored to the local politics, sports, and culture they report on. To advertise in one of these papers is an open invitation to enter someone’s home. With this trust comes an exchange of money and services which drives the business in that area. Almost all newspapers to date have online websites, but these sites are not self sufficient. They rely on revenue from their print editions to maintain and grow new business. Remember what I just said about trust? Reputable companies rely on advertising placement in newspapers and do so because they know a great deal about the readership of that particular publication. The advertiser can also direct where an ad is to appear. Macy’s can tell the Star-Ledger that they want the back page of section one for instance. Conversely, a Google ad is cheap and easy, but where is it going to appear? What appears next to it? How is the audience receiving the company’s message?
People still read the newspaper, smart people, people with money and as long as they do, advertisers will not abandon this medium. Here is something to think about:
“Education does correlate to readership. The most recent survey data from the Pew Research Center, for instance, found that 52 percent of college graduates reported reading a newspaper “yesterday,” compared with 41 percent of high school graduates and 24 percent of people without a high school degree.â€
Quote taken from -Pew Research Center for the People and the Press, “Public’s News Habits Little Changed By Sept. 11,” June 9, 2002, p.34
Newspapers get it. They are working to secure their futures by providing the service to their customers which they have always provided. Newspaper circulation is in constant flux and always seeking to find a level of readership commensurate with the economics and culture of the times. The changing media landscape is a little more cutthroat and faster paced and newspapers no longer enjoy the virtual monopoly they once had, but there is no meteor racing towards the world’s newspapers. So relax, go outside, that’s right, into the bright warm sunlight grab an iced tea and read a newspaper.
Investment website The Street.com is suggesting 2007 will continue to be tough on newspaper stocks not because of declining readership, but because ad revenue is tied into a market which is experiencing a cyclical downturn at the moment. Newspapers rely heavily on advertising from domestic auto companies, home builders, and the jobs and services surrounding them.
I think their advice is to short every publicly traded media company stock whose majority revenue come from newspapers. I disagree with their assumption that what is going on is “cyclical” and would state that we are seeing is a paradigm shift in information streams.