Newsprinter circulation: a vehicle driven to tears

Freedom of the press is limited to those with the ability to run one
- A. J. Liebling

What's black and white and read in the red all over? The newsprinter business apparently. Well, not actually. In fact many newspapers are more profitable than the evil health insurance companies (here + here).


The Audit Bureau of Circulation released newspaper circulation numbers a couple of days ago...the Washington Post and other walking-dead media continue to bemoan the accelerating decline in paid circulation for America's newspapers (here and here for example). For a complete roundup, check Newspaper Death Watch (here)


And while the Newspaper Association of America tries to convince itself of the successful migration of newsprint to digital (here), it would seem that everyone also understands why the economics of the move online are not working in a quid pro quo manner:

"Ads on newspaper Internet sites sell for pennies on the dollar compared with ads in their ink-on-paper cousins."

That's generally what happens when you apply technology to something...it gets cheaper.


So What?


What the decline in the nation's largest newsprint organs means is anyone's guess, but here's mine:


1. Journalism isn't dead: If the NY Times (and other big media) disappears in a sea of red ink, the republic will survive. The issue of newsprint's decline is one of inefficient media...not content. Investigative reporting doesn't really have anything to do with distributing a crossword puzzle, Paul Krugman, or the Yankees. Those are legacies of big media's bygone mass attention monopoly. The economics of the NYT investigative reporting is still built on the presumption that the book reviews matter...and that the newsprint that carries them matters too.


2. Print isn't dead: At least, it isn't if you are relevant.  Like politics, the most relevant news is local. The same ABC statistics show that small dailies seem to be doing ok. Newsprint subscribers seem to find the cost of a printed newspaper reasonable when it covers news that is local. Thinking smaller, though, isn't generally in the nature of an organization that thinks it's already printing all the news that's fit to be printed. And even local news organizations get that print has to be integrated with low cost online outlets.


3. News is a commodity: Newsprinters trade in information and information is a commodity. Analysis and opinion, on the other hand, are the stuff of differentiation. They also tend to engender polarization. The newsprinters who reconcile their ability to draw an audience around their opinion may survive, albeit as smaller enterprises. But smaller is where their headed one way or the other.


4. Economics matter: Advertising is subjected to the same forces of cost efficiency, measurability and effectiveness as every other industry. As long as newsprinters rely on advertising, their cost structures will have to reflect the declining value of advertising. This may mean that those who want print have to assume more of the cost of print. And of course, the major newsprinters aren't losing money just because they aren't selling ads. They sucked from the same debt trough as so many of their readers...buying baseball teams, buildings and trucks with low cost Greenspan dollars for example. The bills have been coming due for quite some time. What the profitable papers are figuring out is that, like everyone else they have to reduce costs or raise prices...or both. How that works out in an era of deflation is anyone's guess.


And let's not even start on the environmental considerations of newsprint...in the meantime, I'll wipe away my crocodile tears and continue looking forward in the new age of news.

Google says goodbye to print

One of our five marketing themes for 2009 is Testing the Real World (here). The basic idea is that you can fall in love with planning, but don't fall in love with your plan...testing ideas out in the real world will tell you everything you need to know about the validity of your ideas + assumptions...and when the real world says stop, organizations must be able to say 'ok' to themselves.

And so by way of example, Google's plan to expand it's digital empire into print seems to be at an end. They have announced the end of the Google Print Ads application effective February 28. Which is likely fine, given the sorry state of print (as in newsprint) overall (here and here for prior examples + data).

So What?

Google has exemplified the idea of the perpetual prototype...even some of its most popular applications are still listed as 'beta'. But what Google has seen in its 'beta' approach to enabling print ad buying using the same platform as online, is that the market says stop. 

Hats off to Google for having the guts to look beyond the fallacy of sunk costs and put an end to this particular experiment.  

Rest assured there will be more experiments (from the Google blog announcement):

"We will continue to devote a team of people to look at how we can help newspaper companies. It is clear that the current Print Ads product is not the right solution, so we are freeing up those resources to try to come up with new and innovative online solutions that will have a meaningful impact for users, advertisers and publishers."

Pulp fiction?

Previously, I've posted on various dismal assessments of the newspaper business (here and here for example). Of the many options that didn't involve variations on the status quo, one idea was to enlist citizen reports (i.e., bloggers) to make newspapers the ultimate local news source...able to be printed on demand.

Here comes an entrepreneurial precursor to making it happen: The Printed Blog.

The Chicago-based company will take the usual news gathering and distribution model and ignore it. Here's a few key features:

• Anyone can submit content.
• A physical paper will be printed twice daily and distributed at high traffic areas around the city.
• Editors will select articles around an issue theme, but the article copyright is retained by the author.
• Local versions could enable as many as 100 different papers being printed on any given day.

More on the many basics here.

So What?

Traditional news outlets have made half-hearted attempts to include video, blog postings and even Twitter-scratch in their news reports, oftentimes as a side show. But a couple of things stand out in The Printed Blog model that might be taken more seriously by Big News:

1. The model of journalists (in this case, interchangeable with the term 'bloggers') as owners of their work is something the traditional papers have been slow to make eye contact with. Except for celebrity opinionaters like Thomas Friedman or old-school investigators-turned-book authors like Bob Woodward, most electron-stained wretches get a by-line and a paycheck--but not the copyright--to their words.

2. Readers will select the blogs/bloggers they want more of. In this meritocratic approach to selecting who gets to be a reporter, one sees a different type of accountability being applied to local news reporting. Some may pine for the mythical days of the fourth estate as a place beyond the subjective demands of the marketplace or, worse, populist vagaries. But that bridge has already been crossed thousands of times. The Printed Blog acknowledges and embraces reality.

Like anything in the hype machine, the proof of concept will be told in the execution. But if the cause of any decline can be traced to a failure of imagination, The Printed Blog may at least provide a bit of inspiration for mapping a future that includes newspapers.

Required Pulp Fiction headline reference link:

Under pressure: Tribune vs. AP

The Tribune company gave notice to the Associated Press that it would drop the APs service in 2010.

Interesting that the AP could get a contract that required two year's notice in the first place, but the Tribune company may be firing the shot in an attempt to hedge their bets against a possible sale...or just to have negotiating leverage. 

Full story available at Editor and Publisher, here

So what?

Newspaper readership continue to slide nearly as quickly as the stock market (see prior post on reaership here)...with so much of the AP's content available online via news aggregators--and essentially free--one might see an analogy to manufacturing:

"a manufacturer (AP) sells through distribution (the papers)" 

The trouble, if you will, comes from AP going direct to consumers (via aggregators)...while trying to maintain pricing power as if the distributors had exclusivity!

As the newspapers struggle to find their voice in the community they serve, I'd expect more of them to question the ROI of AP-provided stories.

Where were you in 1982?

1982...the early stages of the 80's...The Doobie Brothers disband and Public Enemy forms.

If you were a newspaper, the world seemed ok. You were making money. You were THE source of most people's daily news. Alas, some say you can never go back to the way things were. In the case of newspapers, they can...at least on the part that deals with revenue.

The Newspaper Association of America reported quaterly ad revenues and the news is not good. In fact, one commentator looked at ad revenue in constant, inflation adjusted dollars and concludes that newspaper revenues are at the level they were in 1982. (see chart below from here)

In addition to the unfortunate back-to-the-future vibe, Newsosaur  charts the accelerating rate of decline in a chart prepared from NAA data.

And in a leading indicator of the possible ad recession, even online newspaper revenues are down for the first time...ever.

What the future holds for newspapers--as distinct from news reporting--is always a guess. But the trends suggest that it will never be like it was. That's true for everything of course. 

For prior looks at what this might mean, see a post on news, readership and segmentation here

For a look at the impact of economic cycles on newspaper advertising, vis-a-vis auto ad spending see here

For a look at what newspaper might do to survive, see here

For a nostalgic look at 1982, see:

Better Dead than (un)Read

Newspapers, as we all know by now, are feeling a world of hurt (here for example or from the Newspaper Association of America for another). The product they sell, mostly local ads, has been diverted to online only ventures. Classified ads represent 63% of newspaper revenue. The news that used to draw an audience is largely available for free online. Combined with the static nature of the medium, newspapers have reduced their size, their employee base and their share of people's attention.

A prescription to save the patient from certain death is written by Doc (all pun intended) Searls (he of last decade's hot book, The Cluetrain Manifesto). On his blog, he suggests that newspapers have two advantages they should leverage:

• Their archives
• Their editorial page

The archive is a wonderful idea, though I suspect it would be a one-time advantage. Perhaps I'm interested in researching old news (like this), but the revenue approach Searl's suggests (targetted advertising) requires a leap of faith that it would outperform the current subscription models... Another challenge: once the archive of one paper is available, how is one newspaper's version of the news in, say, 1945 going to be worth more than another's? All of which sounds a bit like hope and prayer, not medicine...but what is there to lose in trying?

The other thought, making the editorial content the star makes some sense: Put it on the front page. Invite the community to steer the conversation. Have the crazy lady with the letter to the editor about her neighbor's loud parties (or the anonymous 'Sound off' call in) be the headline.

Might get some attention, but even the good Doc has to admit that it doesn't address the chronic problems for newspapers. Self-defined communities expect always-on, near realtime access and interaction. Newspapers move too slow and trade a product--in print--that is priced higher than the online competition...to a diverse community, a single vehicle will have a hard time addressing many conversations taking place online already...newspapers would be late to this game.

Smarter minds are certainly exploring the issue, but I think that a move online is step one (papers need to cut production and distribution costs further, faster, first). Reduce the costs of print by letting individuals print off the news they want on their home printers. Then, take the savings and invest it in their writing, reporting and in enabling interaction...papers will have to compete with everyone else online...For some reporters, the result may end up paying off more in sweat equity than in salary. Competing wiith free is hard work.