State of the Newspaper Industry

I think it is the economy. It isn't that it is bad, it is that it's changing.

It's simpel to find out what has happened. Mismanagement by executives. These huge media companies are so profit pressured, that even if a newspaper does well, it may still see cuts to help another paper that is doing bad. In the end, it's just about hitting numbers.

Of course people in Chicago know what people in Flordida want to read. Just ask the suits, they got there market reserach is better than someone with 20 years experienced in the community publishing.

I lament the loss of local owenership. That is what the problem is.

 

what happened.

 

I don't think it's naive. Not at all. Allow me to explain.

It's called capitalism. Even the bastions of our profession, The Sulzbergers and Grahams, have cut their work force in the last two years. Is that greed or wanting to remain financially viable?

(Of course that's a many-headed beast, from anything from "greed" to wanting to complete a mission of public service.)

Like I said earlier. 2007 is not the problem. It is five years from now. When your profit margins are no longer in the high teens (remember when they were in the 20s). Circulation drops. Madison Avenue has options. Less expensive options that reaches a demographic not so set in their ways.

So, now. We have fewer "eyes." Many traditional revenue streams are drying up. What left?
The answer is: You and I. We are what's left.

Of course there is some "greed" involved, but the pragmatist in us tells us there are other powerful forces involved. Economy. Dying revenue streams. Projections. Internet. Grampa and Grandma dying. To pin it on one subjective force, greed, would be naive.

 

Bingo.

Classified advertising - which papers largely can't control - is drying up, and that's a huge chunk of revenue that likely won't be coming back. As more people turn to the web to place their cars/jobs/homes ads, we'll continue see decreased profits for that key area.

The only glimmer of hope is that the housing industry takes a drastic turn for the better, helping newspapers recapture some of that lost revenue. But IMO, that ship has sailed.

 

What Fish said.

A stronger economy (and I'd argue that it's pretty strong for big companies in many industries these days, less so for average working folks), may lead to more spending on ads, but not necessarily print newspaper advertising. Those dollars are disappearing into ad vehicles far more targeted than your average general circulation newspaper.
That's true whether we're talking Craigslist, or cars.com, or your local city Business Journal (flip through it sometime, then check out your metro's Biz section, see where all the professional service firms put their money). If it wasn't for cell phones and healthcare we'd be really fucked.
Our own executive incompetence doesn't help matters, for sure. But we're facing some seriously disruptive events in our revenue stream, and it seems we've got to either find a new one or adjust accordingly.

 

A little bit of all of this is what I would venture. However, the biggest problem is the lack of movement forward and lack of solutions. How can we get the EBay and Craigslist people back into our classifieds? How can we get a better product with less people (since we know cutbacks are coming) How do we get more streams of revenue. Let's focus on these and other ideas. We all have a lot of ideas of why it is happening. instead of arguing that one or the other is the main one, let's find ideas to combat all of them, because they are almost all valid points that will need to be addressed.

 

I think newspapers are making enough money, but the suits just want a better profit margin. But I do think that the Internet is playing a big role because people get get our content free. Most people wonder why they should pay for the print edition when they can get it for free. And newspapers just aren't making that much money off of their Web sites.

 

You're right... and so am I.

You'll notice I said greed is A reason, not THE reason. It does play a factor in the big picture, which you artfully painted.

I just didn't want it -- and the shoddy management that hasn't shown a willingness to adapt through any other measures than slashing and burning -- to get overlooked.

 

Platforms are becoming flatter, whether in making cars or dispensing information, and workforce adjustments are a part of how to move forward. It's OK if the printed newspaper becomes a little more of a niche; we still listen to the radio after all those death calls.

 

so is that where we're headed? as a niche media?

 

The economy is fine, but the suits want a higher profit margain. At CNHI, our division is making a profit, but not the profit they projected for this year, so cutbacks have been happening.

 

What happens then in a couple years when they make cutbacks and still can't make their projected budget? Suicide watch for the suits?