August 20, 2014
NO ONE PAYS FOR FREE STUFF:
Last Call : The end of the printed newspaper. (Clay Shirkey, Medium)
Journalists have been infantilized throughout the last decade, kept in a state of relative ignorance about the firms that employ them. A friend tells a story of reporters being asked the paid print circulation of their own publication. Their guesses ranged from 150,000 to 300,000; the actual figure was 35,000. If a reporter was that uninformed about a business he was covering, he'd be taken off the story.This cluelessness is not by accident; the people who understand the state of the business often hide that knowledge from the workers. My friend Jay Rosen writes about the media's "production of innocence" -- when covering a contentious issue, they must signal to the readers "We have no idea who's right." Among the small pool of journalists reporting on their own industry, there is a related task, the production of ignorance. When the press writes about the current dislocations, they must insist that no one knows what will happen. This pattern shows up whenever the media covers itself. When the Tribune Company recently got rid of their newspapers, the New York Times ran the story under a headline "The Tribune Company's publishing unit is being spun off, as the future of print remains unclear."The future of print remains what? Try to imagine a world where the future of print is unclear: Maybe 25 year olds will start demanding news from yesterday, delivered in an unshareable format once a day. Perhaps advertisers will decide "Click to buy" is for wimps. Mobile phones: could be a fad. After all, anything could happen with print. Hard to tell, really.Meanwhile, back in the treasurer's office, have a look at this chart. Do you see anything unclear about the trend line?Carpe Diem/Mark PerryContrary to the contrived ignorance of media reporters, the future of the daily newspaper is one of the few certainties in the current landscape: Most of them are going away, in this decade. (If you work at a paper and you don't know what's happened to your own circulation or revenue in the last few years, now might be a good time to ask.) We're late enough in the process that we can even predict the likely circumstance of its demise.Pick up a Sunday paper anywhere in this country. It will be the biggest paper that week, stuffed with sections, and with ads. Sunday is the money-maker, when circulation is highest and browsing time most abundant. Sunday is also the day for delivering those pamphlets of coupons and sales touts from from national advertisers like Home Depot and Office Max, Staples and Michael's.Those pamphlets -- "free-standing inserts" -- are now the largest single source of print advertising for many papers. Classifieds have imploded, local display ads are down, and black newsroom humor long ago re-labelled the Obituary column 'Subscriber Countdown.'Print ads are essential revenue for most papers. Retail ads are essential for print. Sunday is essential for retail. Inserts are essential for Sundays. The base of that entire inverted pyramid is being supported by the marketing departments of no more than a couple dozen national advertisers.Those advertisers already have one foot out the door, having abandoned the idea that ads have to be printed inside the paper to reach their audience. CVS and Best Buy have so little connection to the papers they ride along with that they don't even bother printing the addresses of their local outlets anymore. (You can always find that information online.) From the advertiser's point of view, the nation's newspapers have become little more than a blue-bag delivery service, with a horoscope and enough local sports inside to get people to open the bag.Inserts are one of the last sources of advertising to resist digitization. They are also the next to go. Businesses like Cellfire and Find & Save are working on digital coupons; stores like Kroger's and Safeway already offer online coupons direct to customers. This digitization is progressing as print circulation decays. Back in Roanoke, the Times was on the market for 5 years before it was bought; in that time the paper lost a quarter of its Sunday readers -- 106,000 to 85,000 -- and a third of its weekday readers -- 96,000 to 65,000. This story too is being repeated all over the country. The print audience continues to defect to mobile, abandon the local paper, or die.As digital alternatives become attractive while print circulation withers, business will start to shift their money away from inserts. When the inserts go, Sundays won't prop up the rest of the week. When Sundays turn bad, the presses will become unprofitable. And when the presses become unprofitable, it will trigger the extraordinary costs involved in shrinking or ending the print operation. (If you work at a newspaper chain, ask your treasurer about underfunded pensions. Bring smelling salts.) These costs will torpedo the balance sheet, leading to further mergers, layoffs, reduced delivery days, or outright collapse.
Posted by Orrin Judd at August 20, 2014 12:43 PM