How Many Subscribers do you Need to Publish Daily?

[LanceyHoward]

I was wondering, is there a rule of the thumb about the minimum number of subscribers that a paper needs to print daily? I don't think I have heard of many dailies having circulation below about 5,000 but I really do not have any idea. I am wondering how many small dailies are in danger of falling the minimum necessary and will be cutting back to publishing once or twice a week.

 

[I Should Coco]

It happened in our family-owned chain, Lancey. A six-day daily whose circulation fell below 3,000 was converted into a twice-a-week publication (Wednesday and Saturday). Among other problems, it was switched from carrier to mail delivery (meaning it is laid out Monday and Thursday evening) and — surprise! — instead of reducing the subscription price because readers were getting less newspapers, they kept the price the same and added unlimited access to a "new and improved" web site.

A little over one year later, that paper has less than 1,000 subscribers (as a twice-a-week).

 

[crimsonace]

It happened in our family-owned chain, Lancey. A six-day daily whose circulation fell below 3,000 was converted into a twice-a-week publication (Wednesday and Saturday). Among other problems, it was switched from carrier to mail delivery (meaning it is laid out Monday and Thursday evening) and — surprise! — instead of reducing the subscription price because readers were getting less newspapers, they kept the price the same and added unlimited access to a "new and improved" web site.

A little over one year later, that paper has less than 1,000 subscribers (as a twice-a-week).

Have never quite understood why newspaper execs seem to think giving people less product for the same (or an increased) price is going to retain subscribers and increase revenue.

 

[Fredrick]

Have never quite understood why newspaper execs seem to think giving people less product for the same (or an increased) price is going to retain subscribers and increase revenue.

I've always felt it was part of the plan to get rid of the print product. If the circulation falls enough, the higher-ups might go all online, which frankly seems to be the goal at all the medium sized to large (formerly large) newspapers. The people that make decisions are purposely trying to kill the print edition while making sure the top brass get their vacation homes and snowmobiles and boats. I mean it doesn't take a rocket scientist to realize cutting prize winning columnists and beloved reporters and shrinking the rag to 10 pages from 50 and charging more for it, won't work. They want circulation to decrease, at least that was the plan up until recently. Now, with the websites continuing to not make any money ...

 

[LanceyHoward]

It happened in our family-owned chain, Lancey. A six-day daily whose circulation fell below 3,000 was converted into a twice-a-week publication (Wednesday and Saturday). Among other problems, it was switched from carrier to mail delivery (meaning it is laid out Monday and Thursday evening) and — surprise! — instead of reducing the subscription price because readers were getting less newspapers, they kept the price the same and added unlimited access to a "new and improved" web site.

A little over one year later, that paper has less than 1,000 subscribers (as a twice-a-week).

But how did it work out from a profit and loss perspective?

The company lost two/thirds of subscription revenue. But they went from printing 3,000 copies a day six times a week to 1,000 copies twice a week, so that is an 87.5% reduction in paper costs. I am sure that their large retail customers got reductions in their ad pricing but what about the classifieds, obituaries and legals? How many staff were retained for the weekly?

My guess is that the reduced cost did not make up for the reduced revenues but I am not sure. And if the answer is the weekly in fact makes more money then a small daily that an ominous sign for small town papers and their staffs.

 

[lcjjdnh]

Highlights from Berkshire Hathaway Q&A: On sticking by Wells Fargo, investing in guns, the future of newspapers, China and lots more

Berkshire Hathaway Chairman and Chief Executive Warren Buffett and Vice Chairman Charlie Munger said they did not anticipate how quickly print newspaper circulation would decline when they made their most recent buy into the industry in 2012.

Berkshire owns The World-Herald; it bought the Omaha World-Herald Co. for $200 million, when including the debt it assumed. Since that buy in 2012, the company has formed BH Media Company, which bought the daily newspapers in Richmond, Virginia; Tulsa, Oklahoma; and in other cities.

Since those purchases, print circulation has fallen sharply, surprising Buffett, he said, as readers increasingly get news and information online. And revenue from digital operations isn't making up the difference, he said.

"I've been surprised that the rate of decline has not moderated," Buffett said of sharp dropoffs in daily circulation, Sunday circulation and so-called street sales.

According to Berkshire Hathaway's annual report, The World-Herald in 2012 had daily circulation of 130,001 and Sunday circulation of 162,905. In 2017, the annual report said figures had declined to 93,653 daily and 115,417 on Sunday.

BH Media newspapers including The World-Herald in February laid off nearly 150 people and eliminated more than 100 vacant positions.

The "figures are not good," Munger said of the economics of the industry.

The financial considerations are not of much consequence to Berkshire shareholders, Buffett said, calling them "almost negligible" in the company that had $250 billion in annual revenue in a recent count.

"But the significance to society is enormous," Buffett said.

Only perhaps the New York Times, the Wall Street Journal and the Washington Post have a digital product with robust enough revenue to be "viable" over the long-term, Buffett said.

Meanwhile, the majority of the approximately 1,300 print newspapers in the country are suffering and haven't found a way forward.

"It is very difficult to see — with a lack of success in terms of important dollars rising from digital — it's difficult to see how the print product survives over time."

Buffett said Berkshire would keep trying to find a way forward. But, for now, he said, "I wish I had a better answer for you, but I don't."

 

[Fredrick]

Highlights from Berkshire Hathaway Q&A: On sticking by Wells Fargo, investing in guns, the future of newspapers, China and lots more

Interesting stuff. Buffett seems to accept the fact papers are dead. But it's not a big deal. It's just a blip in his fortune. It'll be easy to shut them all down. That's what I took from the Q and A.

 

[I Should Coco]

But how did it work out from a profit and loss perspective?

The company lost two/thirds of subscription revenue. But they went from printing 3,000 copies a day six times a week to 1,000 copies twice a week, so that is an 87.5% reduction in paper costs. I am sure that their large retail customers got reductions in their ad pricing but what about the classifieds, obituaries and legals? How many staff were retained for the weekly?

My guess is that the reduced cost did not make up for the reduced revenues but I am not sure. And if the answer is the weekly in fact makes more money then a small daily that an ominous sign for small town papers and their staffs.

All good questions, and as a worker bee, I certainly don't know the profit/loss numbers.

Part of the deal is, the Saturday edition still gets all the inserts of my shop's Sunday edition ... so our ad people can still say we "reach" the county where the twice-weekly paper circulates. (It's a neighboring county with small towns; many of their residents come to our town to shop)

The staff reduction: instead of somebody laying out their 6-8 pages six days a week, a copy editor at our shop lays out their 10-12 pages every Monday and Thursday. The paper now has only two editorial people, doing everything from news to sports to obits/community news, plus all the online stuff.

My guess is the decision was made to stem the loss of money on printing, and carriers (remember it's delivered by mail now; my guess is a postal permit is cheaper than home delivery). I wouldn't be too optimistic about the long-term future; we recently shuttered a weekly paper that was even leaner on printing and personnel costs because it was losing money.

 

[lcjjdnh]

Anecdotal (but depressing): My apartment building-which probably has about 70 units-gets 12 copies of the paper (a good one) delivered everyday for anyone take for free, as an "amenity." Yet I routinely walk back in after work and see more than half of them still sitting there.

I am also so far as I can tell the only person in the building who subscribes to any other daily newspaper (in my case, the WSJ).