Thursday, December 11, 2008

Motown madness: Home delivery cut

The reported plan to cut home delivery to just a few days a week at the Detroit dailies does not merely tweak the classic newspaper model. It eviscerates it, perhaps mortally.

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.

14 Comments:

Anonymous Anonymous said...

Yes, there are heaps of problems with this, but it is a brave decision to save the Detroit newspapers. If it works, I can see it applied GCI-wide.

1:59 PM  
Anonymous Anonymous said...

I admit I'm fresh off the latest Gannett employee slashing, but it's over for newspapers, except the largest (and they have a few years at best). The economy has hastened the inevitable.

2:01 PM  
Anonymous Anonymous said...

Printing six days a week would be a better alternative to this. Do they think their subscribers will go to the store for their paper the days they don't get one at home? Not. Good.

2:42 PM  
Anonymous Anonymous said...

I have worked for this newspaper company for 16 years and they never tell us anything. I have been there thru the strike, many severe storms, and all the other bulls**t they put us thru. If they fold it will be because they do not treat thier carriers with any respect!!!!!!!!!!!!!!!!!!!

4:01 PM  
Anonymous Anonymous said...

It's hard to argue against what you say about this leading to a permanent loss of circulation. When the News and Free Press suffered through their awful strike, they dropped a huge number of readers, most of whom never came back. That ill-conceived strike helped start Detroit's woes, but once the shameless corporate moneygrubbers at Gannett dumped the News and got their small-market mitts on the Free Press, the die of total ruination for both papers was well-cast. This latest brainless move is likely to amount to a mercy killing, in the end.

5:55 PM  
Anonymous Anonymous said...

If this is what passes for creative, outside the box thinking then we are all screwed.

8:03 PM  
Blogger Crisatunity said...

So the fundamental basis of readership is wrote daily habit and not quality content...I love it when the experts identify the problem and they don't even know they did.

9:09 PM  
Anonymous Anonymous said...

It's all good.

Faster, please.

12:25 AM  
Anonymous Anonymous said...

I've been in the newspaper industry 30 years and there was much speculation of it's decline when I arrived on the scene. Intermittent delivery is a step to save costs not an approach to increasing readership, which is the real problem. As Steve Starr used to say, papers must have utility for the users. That message was lost on editorial departments that didn't get what that meant. Frankly, it was too simple. Add to that the rush to give away content on the internet that devalued the real cost of producing a daily newspaper and you've got a formula to accelerate a decline in the readership of the print product. And you can't leave out the ABC whose rules were arcane for targeted marketing for most of the 30 years I've been in the industry. But the print product won't die any time soon. It may be that an oligopoly will result with a relatively small group of large regional newspapers that provide expensive print products to those still wanting a credible news source. Many of the very small community newspapers may survive as well as the only games in town. They might even become the distribution vehicles for the larger regional products. But,for sure, there will be many less newspapers then there are today and that certainly includes some of the most famous metros.

6:11 AM  
Anonymous Dave D. said...

...This we know : Young folks don't buy newspapers, older folks do. It's in the nature of older folks to not be as flexable and to stick with the decisions they make. When they drop a newspaper subscription, they don't reconsider subscribing again.
...I'm 60, and I wouldn't resubscribe to newspaper that dropped me for any days a week. The comfort of habitual newespaper reading is broken, not to be repaired.
..This looks like suicide of a terminably ill antiquarian. Happens all the time and you can't really blame the old feller 'cause his other options were.....worse.

7:40 AM  
Anonymous Anonymous said...

Dr. Kervorkian is from Michigan, too, isn't he?

This strategy seems right up his alley.

8:32 AM  
Blogger Larry said...

I am not a conspiracy theory type of person, but I can only wonder if this sudden collapse in the newspaper industry isn't driven by something larger than anyone could imagine.
I think we all agree that without newspapers and professional journalists government misdeeds will largely go unreported. Even with the best of intentions, a blogger will not carry the weight of a daily newspaper reporter when he or she does an investigative report.
I also wonder about the agenda a blogger might have when "reporting" about events. Is he or she in someone's pocket, acting as a PR person rather than a journalist?
The powerful have sought to muzzle the fourth estate for more than 200 years. What's the best way to do it? By not providing the muckrackers a forum to present their investigative articles! And I think so much of it stems from allowing a small minority of people to own multiple media outlets, especially newspapers.
As I said, I'm not a conspiracy theorist, but I do wonder if there might be an effort to buy and then put out of business the news gathering agencies. Nobody can be as stupid collectively as these bean-counters who are running the papers into the ground.

8:10 PM  
Anonymous Anonymous said...

As a carrier it is a sad day . I put a lot of time and effort in my route to make it profitable. These people that run this paper are cuthroats and carriers have been cheated out of money by the company more than a few times since I have been there. I deliver to a retirement village these people love the daily paper . I dont see them going online to read the paper.

8:42 AM  
Anonymous kanga dave said...

The plan for the two Detroit papers to go to part-time home delivery is stupid, silly and short-sighted. It won't preserve newspapers; it will hasten their demise.

4:21 PM  

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