Tuesday, January 10, 2012

Daily paper going the way of the milkman

Daily newspaper delivery will go the way of the milkman in a growing number of communities in 2012 and beyond.

Barring a miraculous turnaround in the economy, a sea change in the thinking of media buyers or a late-breaking proclivity for print in the sub-geezer population, publishers in ever more communities are likely to reduce the number of days they provide home delivery – or print a newspaper altogether.

Nowhere is the demise of daily delivery more dramatic than in Michigan, where more than two-thirds of the households will be unable get seven-day service after the end of January.

The rationing began with a bang in 2009, when the two Detroit dailies, the Free Press and the News, stunned the industry by cutting home delivery to just Thursday, Friday and Sunday. Although the Motown metros continue to print every day of the week, anyone wanting a paper on non-delivery days has to fetch one at a retail location.

Unsurprisingly, the Monday-Friday circulation of both Detroit papers plunged between March, 2008, and March, 2011, according to the Audit Bureau of Circulations. The daily circulation of the Free Press in the period fell 54.7% to 168,985 and the daily sale of the News tumbled 51.7% to 90,914. Even though Sunday home delivery continued without pause, the circulation of the Freep (the only title publishing on that day) is down 21.6% at 475,543. The Freep, which is owned by Gannett, and the News, which is owned by MediaNews Group, are partners in a joint operating agreement.

The daily drought is scheduled to widen to other Michigan communities in February, when the Grand Rapids Press, Kalamazoo Gazette, Muskegon Chronicle and Jackson Citizen Patriot reduce home delivery to Tuesday, Thursday and Sunday from their current seven-day schedules. Just as in Detroit, single copies of each newspaper – all of which are owned by Advance Newspapers – will be available to consumers who take the trouble to track them down. In cutting back home delivery, the Advance emphasized the intention to attract more traffic to its statewide digital portal, MLive.Com.

While determined readers for the time being still can buy a daily paper in Detroit and Grand Rapids, there has been no such option since mid-2009 in Ann Arbor. That’s where Advance replaced its seven-day Ann Arbor News with an “online digital media company” called AnnArbor.Com, which puts out print editions on just Thursday and Sunday. Since the change, daily circulation for the print product has slid by 30.8% to 30,422, according to ABC.

If Michigan is ground zero of the un-daily-ing of newspapers, it is far from alone. Johnson Newspaper Group knocked two days off the seven-day print cycle of some of its titles in Upstate New York. Media General cut the publication of its smaller seven-day papers in North Carolina to three days a week. GateHouse Media did the same in Kansas.

Anecdotally, we know there are many more cases across the country. We just don’t know how many. Although you would think that ABC, the industry-supported group that audits circulation, and the Newspaper Association of America, the industry’s principal trade group, would want to keep an accurate count of something as important as the dwindling number of daily newspapers, they profess not to know.

There is no doubt, however, why publishers are throttling their once-prized print products:

A relentless decline in newspaper advertising sales has halved industry revenues since a record $49.4 billion was collected in 2005. Although final ad figures remain to be calculated for 2011, projections based on year-to-date performance suggest that sales last year probably didn’t top $24 billion. This has been catastrophic for publishers historically accustomed to hefty, double-digital bottom lines.

In five-plus years of ever more vigorous retrenchment to salvage some degree of profitability, publishers have trimmed staff, crimped newsholes and outsourced everything from call centers and accounting to production and delivery. With scant behind-the-scenes economies left, publishers now are being forced to make the most conspicuous cuts of all: Reducing the number of days they publish or deliver papers.

The good news, given the increasing shift of consumers to digital media consumption, is that de-emphasizing print necessarily forces publishers to focus on their web, mobile and social efforts. The bad news is that most of them to date have not made impressive strides.

On average, the industry reaps less than 14% of its ad revenues from digital media, according to the NAA. That’s not nearly enough to keep publishing companies healthy if print revenues continue shrinking, as they seem likely to do in the immediate future.

Publishers cutting daily delivery realize the strategy works only if they can build their digital divisions faster than their print businesses shrink. While publishers know this is risky business, the smart ones know there is no Plan B.

© 2012, Editor & Publisher

13 Comments:

OpenID hamiltonmj1983 said...

I understand this firsthand - my father called me last week to let me know that the Tampa Tribune, Media General's flagship paper had finally laid him off. He knew it was coming; he had been there for 20-some years, was a journeyman platemaker, and made more money than the position called for now that the technical aspect is gone and everything is computerized (meaning 18-year-olds can do the same work for $12-14 an hour).

I really don't see how the papers will be able to continue. Internet advertising is available elsewhere for much less than the cost of print advertising, so, even if every ad in the paper switched over to digital, there would be a great deal less revenue coming in, and by cutting circulation they will lose advertising income, or at least make advertising with them worth less.

8:54 AM  
Blogger Paul Bedient said...

Growing up in the business, I have come to the belief that "we are our own worst enemy" when it comes to change. I remember hearing a speaker in the late 70's warning the industry to change or we will not survive.

While tech nerds were creating useable websites, newspapers were still scoffing the idea. The newspaper industry, in my opinion, seems to be consistently five years behind when it comes to changing how they do things.

My biggest concern is with all the staff cuts, can the industry still perform its charge of being the "watch dog" for readers?

I would venture a guess that if you walked into a shopping mall and asked 100 people what the top news story was last week, close to two thirds would respond with, "Kardashian, Beiber, Perry or Oprah."

Again, in my opinion, the industry should become less resistant to change, understand lower profit margins will never return to what they were in the 80's and invest in quality reporters be it full-time or stringers.

If you have a quality product to sell, people will buy no matter how it gets to them.

9:27 AM  
Blogger dan said...

Yup, good post and well said, Alan. That is why i coined the term "snailpaper" a few years ago to signify the old print paper that comes 23 hours later than real news does, and is now a dinosaur and soon set for extinction, although me, ''I just can't live (with out my daily snailpaper)'', which is title a youtube song i posted.

Sigh. RIP.

6:25 PM  
Blogger Bruce Wood said...

With circ declines like that maybe they should have just raised their subscription prices to cover the cost of home delivery. It's hard to imagine a greater decline than what they experienced anyway. Plus they'd have an ongoing revenue stream with renewals.

6:25 PM  
Blogger nrg said...

Alan,
Do you have thoughts on weeklies?

8:21 PM  
Blogger William said...

Alan, along with NRG, I would love to hear your comments on weeklies, which aspire to such noble heights yet consistently deliver dinged-out, over-written yellow journalism pieces on all things weird. What's your take, then, on so-called "alternative" journalism?

7:46 AM  
Blogger FredMark said...

So if the printed newspaper is going the way of the milkman (no quarrel here) then why do newspapers cling to the notion that legal notices need to remain in print? One could assume that the logical step would be to move notices on line at a huge savings to the taxpayer.

9:29 PM  
Blogger reinan said...

I get all this stuff and in fact left my 20-year career as a newspaper reporter a few years ago to take a job in marketing communications. I see which way the wind is blowing and I've acted accordingly.

But it does kind of bug me to see comments like the one about the "snailpaper" with its 23-hour-old news.

I don't think every piece of news needs to be disseminated immediately. It doesn't necessarily lose value by being a few hours old.

If the school board meets on Tuesday night, do I really need to know what happened at 10 p.m. Tuesday? If I get up Wednesday morning and read about what the school board discussed last night, is it really that much less valuable to me? Does it change my life for the worse to have gotten this news 8 or 10 hours later?

8:06 AM  
Blogger Ranjan Roy said...

Makes me remember my paper route. I'm at best only mildly nostalgic for the death of the dailies as if newspapers don't begin adapting on the technology behind distribution, they simply won't be able to survive. Recent post on the topic: goo.gl/9E1o7

8:21 AM  
Blogger Marc D said...

Paul, great comment. I used to get the LA Times, NY Sunday Times and WSJ. Now I get the WSJ and the local Daily Breeze (because the Sat sports section is all high school sports and it feels like a small town). The quality of news in the LAT and NYT has just been awful (and this isn't a left/right issue - just the overall level of signal to noise and lack of insight.

I'd pay to get quality journalism. Someone just has to start making it...

10:52 AM  
Blogger James Moehrke said...

MediaNews Group dropped Monday editions altogether in some Northern California communities recently. Somehow we didn't see a corresponding 14% decrease in our home delivery rates.
Strangely, among the first cuts they made some years ago at our local newspaper were to reduce the internet staff. I know, I was one of them.

4:13 PM  
Blogger newtbarrett said...

In our neighborhood, only about 5% of the homes get a daily newspaper, but 100% have internet access.
The local Naples Daily News used to carry $30million of real estate advertising--1/3 of total revenue. Now, it's down to $9M and dropping.
It's not just the news we look for online; it's the product information, including coupons, we want to find there, too.

7:10 AM  
Blogger me said...

somewhat off topic, but I've been wishing for the return of the milkman.

There is a movement in foodie circles towards local food that doesn't waste. In the case of the milkman, locally produced milk, delivered in glass bottles that can then be returned and reused.

I think there are those who would welcome this service and pay a premium for it. But I don't know what that means for newspapers.

5:58 AM  

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