Monday, November 20, 2006

Another bleak prediction

From a journalism professor and contributor to MotleyFool.com. He says:

It's become accepted that the younger you are, the less apt you are to be a regular reader of newspapers. That's been an escalating trend since back in the 1960s, but only recently has it begun to affect newspaper advertising seriously. This trend was demonstrated yet again last week when the New York Times Company (NYSE: NYT) released its revenues for October. The company reported that advertising revenues from continuing operations dropped 4.9%, and its total revenues -- essentially those from advertising, circulation, and other areas, such as commercial printing -- were down 2.9%. The company's advertising revenues from its New England operations, primarily the Boston Globe, plummeted by nearly 12%.

Where, then, is Times likely to wind up, say, two or three years into the future? The only apparent answer is that the company as we know it seems unlikely to continue to exist. Media companies have, of course, become subject to increasing attention from private equity types of late. Tribune (NYSE: TRB) continues to be pored over by those considering private equity purchases, and a similar fate appears possible for Dow Jones (NYSE: DJ). And last week, radio giant Clear Channel (NYSE: CCU) received its financial marching orders when a private equity buyout was announced.


Interesting that Clear Channel also was in trouble and is going private. Not unlike newspapers, radio is growing to be a thing of the past among young people. I know that among my friends, who are in the 20s and 30s, few of us listen to radio. The only radio I listen to is talk radio on the AM dial, and I could get that on satellite or on the Internet. For music, I listen to the stuff I have in iTunes and if I want new music, I listen to Internet radio on iTunes or AccuRadio or another site recommended by a friend. There is nothing at all that I miss about radio. In fact, I don't even own a stereo. The only radio in my house is a small clock radio that can be operated by battery in case of an emergency.

So it looks like the M.O. for these old media companies is to break up and sell off the small parts to try to save themselves. That seems to me to indicate companies in a sinking industry reaching for a life preserver. As does this story in today's New York Times.

Saturday, November 18, 2006

The environmental case for newspaper abolishment

There was also bad news on the cost side of the ledger in 2005. Newsprint prices, so soft in 2003 and early 2004 that they may have masked deteriorating fundamentals, were up another 5% to 10% in 2005. More of the same is expected in 2006.13 Watch for a continuing wave of reductions in paper weight, newshole and page width to cushion the cost impact. The Wall Street Journal, for instance, plans to shrink the size of its broadsheet from 60 inches to 48 in 2007.

source: State of the News Media 2006


A metro newspaper uses approximately 200,000 tons of newsprint each year. At current newsprint prices, a typical publisher spends about $150 per reader on the manufacture of a daily newspaper. It might therefore prove cost-effective for the newspaper to add value by offering a reading device as part of a print/electronic subscription package.

source: Peter G. Marsh, Newspapers and Technology

After reading numerous Star Tribune editorials about saving forests and stopping global warming - I thought it odd that a major newspaper that needs a lot of fresh forest every day to make their paper would write an editorial about saving forests.

Newsprint, which is what newspapers are made of, runs between 70 percent and 100 percent virgin forests. Though more than 60 percent of newsprint is recycled, not much of it again becomes newsprint. Virgin newsprint is much cheaper. A lot of recycled newsprint in the United States goes to China, recycled newsprint is one of the largest exported products in America. Even though we are recycling more, overall we are using more, much more. Americans average more than 300 pounds of paper used per person per year - compare that with Angola where a person averages 7 pounds per year.
source: The Minnesota Daily

If there is any reason to cheer shrinking news holes, disappearing stock pages, smaller and smaller broadsheets, and declining newspaper circulation, it's that less newsprint is being used.

The energy industry gets a lot of criticism for being socially irresponsible in not finding innovative ways to produce energy while looking to stabilize carbon emissions. They are criticized as lacking in vision or initiative. I submit that the news industry has not had the vision to think of ways to speed up the process of eliminating newsprint. Of course, the foresting industry would have problems with this. But forests are an important storage of carbon sources, which puts a damper on global warming. Also, forests will become ever more important as storms increase in intensity and communities risk damage from heavy flooding.

Newspaper companies could buy recycled newsprint, but that's more expensive, and clearly they are already concerned about their bottom-lines as they take more efforts to reduce the amount of newsprint they buy. It seems that if newsprint producers keep increasing prices, news pages will continue to shrink. Most broadsheet papers are now 12 inches across, when closed. The Wall Street Journal is 15 inches across, but it will go down to 12 in 2007. It won't feel like the Wall Street Journal anymore.

Newspaper companies could work with other stakeholders on Internet access initiatives, to address the digital divide problem. As access increases, circulation goes down, newsprint consumption decreases, forests are saved. Perhaps this is a simplistic view, but it seems that from a social and environmental responsibility perspective, elimination of the physical newspaper shouldn't be resisted, it should be considered a goal.

According to Conservatree.com, one ton of newsprint takes about 12 trees. A metro paper uses about 200,000 tons of newsprint each year. That's 2.4 million trees each year for one metropolitan region. So we could potentially save millions and millions of trees, at a time we need them most.

Thursday, November 09, 2006

Battalions of reporters for what?

I so agree with William Marimow, the new editor of the Philadelphia Inquirer:

Mr. Marimow said he would continue the focus on local news, and told the staff that the days of sending “battalions” of reporters to events like Hurricane Katrina or the war in Iraq were over.

Talk about a waste of money. What are a dozen reporters from the Philadelphia Inquirer going to tell people in the Philly area about Iraq that they won't find out from the New York Times, CNN, or Baghdad Burning? Nothing. Unless there is some kind of local relevance, and there rarely is, regional metro papers should stop this practice. It's a waste of money, time, and it clearly stems from a desire to win a Pulitzer or other prizes. Do that by focusing on your local communities -- that is the news that people look for from you, whether they get it in print or online.

Newspaper circulation way down, online readership way up

Good news for the newspaper industry, I think. This story in Editor and Publisher analyzes the recent numbers released by FAS-FAX on newspaper circulation. Overall, daily circulation was down 2.5 percent and Sunday circulations was down 3 percent. Not good news.

But this is good news, and I wonder if we will start seeing more reports on "total readership" as the norm. It seems like a much more relevant metric than circulation:


Some believe that total audience is a measurement the industry should have started pushing years ago. While the print product shows declines, online and niche products are actually growing the reach of newspapers. Among 25-to-34 year olds, at least 17 papers made a gain of 20% -- when factoring in Web sites.

The NAA reported that September marked a milestone for newspaper Web sites: More than 58 million people or more than one in three active Internet users visited a newspaper Web site -- a record.

There’s no question that newspapers are making great strides in driving online readership, especially as online revenue is growing like gangbusters. What remains to be seen is if they get the credit.


More than one in three active Internet users visited a newspaper Web site. Those are some darn good numbers. Could we see a further spike, and maybe get news readership back up to the levels we saw in 1970, when newspaper reading hit its peak? Some 62 million papers a day were sold in 1970. Granted there were fewer people in this country then, but that's an equally impressive number.

The fact is, newspapers do what only they can do. Taking the product online does not change it. In fact, it only enhances it.

I want to do a post on newspaper access...of course, we should be concerned about people who don't have Internet access. I am also curious about how Internet access is trending...how fast are people acquiring Internet access? If you have any good resources, let me know.