Motown madness: Home delivery cut
While this bold initiative may restore the short-term profitability of the Detroit Free Press, the Detroit News and the joint operating agency that serves them, the experiment in non-daily home delivery could well be self-defeating in the long run.
Because these indeed are the most desperate times for newspapers in the 300-year history of the industry in the United States, it is understandable that some publishers may contemplate desperate measures.
But there is no logic to the widely reported plan that the Detroit dailies will restrict home delivery to Thursday, Sunday and perhaps one other day of the week. While papers on the other days of the week presumably would be available for single-copy purchase, the speculation is that the Detroit dailies would restrict the availability of free content on their websites and charge for access to a day’s full news report.
Gannett owns the Free Press, which is reported by the Gannett Blog to be preparing to eliminate 300 jobs. MediaNews Group, which in part is financed by Gannett, owns the News.
In moving to intermittent home delivery, the Motown papers run two potentially fatal risks:
:: Significantly reducing daily newspaper consumption among the most loyal print readers.
:: Triggering a further erosion of already weak print advertising revenues.
“Once you get readers out of the every-day habit of reading a paper, you will lose them forever,” said one former Gannett circulation executive who was appalled by the news from Detroit.
“Newspaper readership already is declining,” he continued. “When you break someone’s daily habit, he will go to other media for news and information. If the newspaper only shows up on Thursday or Sunday, your customers will lose the newspaper habit and change to another medium.”
Nationwide, newspaper circulation has fallen back to the level last seen in 1946. Only 18% of the Americans buy a newspaper today, as compared with 36% in 1946, when the nation’s population was half as large as it is today.
It is axiomatic that declining circulation will lead to further reductions in print advertising sales. Even at today’s depressed level, print advertising delivers some 90% of the industry’s revenues. Interactive advertising produces the balance of sales and there is no proven model for funding newspaper-style reporting with web-only revenues.
Not only do newspapers need significant penetration in their designated market areas to continue to appeal to advertisers but they also increasingly must prove to advertisers that the people taking the paper are committed and consistent subscribers.
“The home-delivery customer always has been the value proposition for advertisers,” said the circulation executive, who asked not to be identified because of conflicting business relationships. “Historically, single-copy sales were seen as being less valuable than home delivery. How are you going to change that message now?”
Last but not necessarily least, intermittent home delivery would appear to be a practical nightmare for any publisher.
“It’s hard enough to get reliable carriers if they work every day of the week,” said the circulation executive. “If they are only working two or three days a week, you will be hiring part-time part- timers. How reliable will they be? What kind of service can they provide?”
Poor service, he added, would lead to a rising tide of subscription cancellations. And falling circulation would further crimp ad sales sagging under secular declines in emloyment, auto and real estate advertising.
In the reports of not-every-day delivery are true, the papers in Detroit may be about to kick off a self-fulfilling cycle of decline that eventually may consume them.