Print Media

The “creeping crisis” for newspapers seeps into yet another corner of the industry.

Phillip Nones Advertising, Business, Employment, Media, Media Consumption, Publishing, Social Commentary , , , ,
Newspaper revenue trend lines are problematic, to say the least.

The travails of the newspaper industry aren’t anything new or surprising. For the past decade, the business model of America’s newspapers has been under incredible pressures.  Among the major causes are these:

  • The availability of up-to-the-minute, real-time news from alternative (online) sources
  • the explosion of options people have available to find their news
  • The ability to consume news free of charge using most of these alternative sources
  • The decline of newspaper subscriptions and readership, leading to a steep decline in advertising revenues

Exacerbating these challenges is the fact that producing and disseminating a paper-based product is substantially more costly than electronic delivery of news. And with high fixed costs being spread over fewer readers, the problems become even more daunting.

But one relative bright spot in the newspaper segment — at least up until recently — has been local papers. In markets without local TV stations, such papers continued to be a way for the citizenry to read up on local news and events.  It’s been the place where they could see their friends and neighbors written about and pictured.  And let’s not forget high-school sports and local “human-interest” news items that generally couldn’t be found anywhere else.

Whatever online “community” presence there might be covering these smaller markets — towns ranging from 5,000 to 50,000 population — is all-too-often sub-standard — in some cases embarrassingly bad.

But now it seems that the same problems afflicting the newspaper segment in general have seeped into this last bastion of the business.

It’s particularly ominous in places where daily (or near-daily) newspapers are published, as compared to weekly pubs. A case in point is the local paper in Youngstown, Ohio — a town of 65,000 people.  Its daily paper, The Vindicator, has just announced that it will be shutting its doors after 150 years in business.

The same family has owned The Vindicator for four generations (since 1887).  It isn’t that the longstanding owners didn’t try mightily to keep the paper going.  In a statement to its readers, the family outlined the paper’s recent struggles to come up with a stable business model, including working with employees and unions and investing in new, more efficient presses.  Efforts to raise the price of the paper or drive revenue to the digital side of the operation failed to secure sufficient funds, either.

Quoting from management’s statement:

“In spite of our best efforts, advertising and circulation revenues have continued to decline and The Vindicator continues to operate at a loss.

Due to [these] great financial hardships, we spent the last year searching for a buyer to continue to operate The Vindicator and preserve as many jobs as possible, while maintaining the paper’s voice in the community. That search has been unsuccessful.”

Youngstown, Ohio

As a result, the paper will cease publication by the end of the summer. With it the jobs of nearly 150 employees and ~250 paper carriers will disappear.  But something else will be lost as well — the sense of community that these home-town newspapers are uncommonly able to foster and deliver.

For a city like Youngstown, which has seen its population decline with the loss of manufacturing jobs, it’s yet another whammy.

Because of the population loss dynamics, it might seem like local conditions are the cause of The Vindicator‘s situation, but some see a bigger story.  One such observer is Nieman Journalism Lab’s Joshua Benton, who writes:

“I don’t think this is just a Youngstown story. I fear we’ll look back on this someday as the beginning of an important — and negative — shift in local news in America.”

What do you think? Is this the start of a new, even more dire phase for the newspaper industry?  Is there the loss of a newspaper that has his your own community particularly hard? Please share your thoughts with other readers here.

Is the future of printed books written in disappearing ink?

Phillip Nones Content Creation and Content Management, Media, Media Consumption, Publishing, Social Commentary , , , ,

Considering the spread of digitization into seemingly every nook and cranny of our lives, how are book-reading practices changing?  The Pew Research Center looked into this question recently, and it found that those behaviors are definitely changing.

First, what hasn’t happened is a wholesale flight from printed books.  According to Pew’s January 2018 survey of ~2,000 American adults age 18 and older, fewer than one in ten respondents reported that they’ve pulled the plug completely on reading printed books.

But it turns out that ~30% are reading both digital and printed books.

As for the rest, nearly a quarter of the respondents reported that they don’t read books at all – in any format.

That leaves around 40% who report that they read books in printed form only.

It seems that we’re in the midst of a technologically driven change in behavior. A few short years ago the percentage of Americans reading any books in digital format would have likely been in the single digits.  But now just about half the population of book readers are doing so at least in part using digital technology.

I suspect that we’ll see continue to see a shift towards digital books – and likely at an accelerating pace.  Even though speaking personally, I tend to read “better” when I’m not in front of a screen because I find it easier to absorb the more extensive paragraphs that are more typical to long-form writing.

But that’s just me.  What about you? Are you still reading printed books exclusively, or have you gravitated to digital?  And do you see yourself going 100% digital eventually?  Please leave a comment for the benefit of other readers.

The New York Times: Out of print in ten years?

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It isn’t anything particularly special to hear people talking about the declining market for print newspapers, and how market dynamics and demographic trends have put the traditional newspaper publishing model at risk.

At the same time, most newspaper publications have found it quite challenging to “migrate” their print customers to paid-subscription digital platforms. The plethora of free news sites online makes it difficult to entice people to pay for digital access to the news – even if the quality of the “free” coverage is lower.

New York Times CEO Mark Thompson, appearing on CNBC’s Power Lunch program (February 12, 2018).

But it was quite something to hear a forecast made by Mark Thompson, The New York Times’ CEO.  Earlier this month, Thompson made remarks during CNBC’s Power Lunch broadcast that amounted to a prediction that the NYT’s print edition won’t be around in another ten years.

Thompson went on to explain that his company’s objective is to build the digital product even while print is going away:

“The key thing for us is that we’re pivoting. Our plan is to go on serving our loyal print subscribers as long as we can.  But meanwhile, to build up the digital business so that we can have a successful growing company and a successful news operation long after print is gone.”

It’s one thing for newspapers in various cities across the country to be facing the eventuality of throwing in the towel on their print product. It’s quite another for a newspaper as vaunted as The New York Times to be candidly predicting this result happening.

It would seem that the NYT, along with the Washington Post, The Wall Street Journal and possibly USA Today would be the four papers most able to preserve their print editions because of their business models (USA Today’s hotel distribution program) or simply because of their vaunted reputations as America’s only daily newspapers with anything approaching nationwide distribution.

I guess this is what makes the Thompson remarks so eyebrow-raising. If there isn’t a long-term future for The New York Times when it comes to print, what does that say about the rest of the newspaper industry?  “Hopeless” seems like the watchword.

It will be interesting indeed if, a decade from now, we find no print newspapers being published in this country save for hyper-local news publications – the ones which rely on print subscribers seeing their friends and family in the paper for weddings, funerals, community activities, school sports and other such parochial (or vanity) purposes.

Interesting … but a little depressing, too.

Downsizing hits America’s most prestigious business media properties.

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bwsjThis past week, the business media world was buzzing about the inadvertent release of information concerning pending layoffs at Barron’s magazine, thanks to editor-in-chief Ed Finn mistakenly hitting “reply all” on a message intended for just one person.

But the more interesting news is what’s happening right now with two of America’s most important national print publishing properties: Barron’s and The Wall Street Journal.

Up until now, it was thought that a select handful of America’s largest and most pervasive publications with national reach and reputation would be the ones least susceptible to problems befalling the industry regarding declining advertising revenues and changing news consumption habits.

At or near the top of the list of those rarefied properties were these two publications for sure.

But now we know a different reality — or at least a more complicated one. WSJ editor-in-chief Gerard Baker announced last week that the publication is seeking a “substantial number” of employee buyouts to limit the extent of involuntary layoffs that will need to happen otherwise.

The WSJ buyout offer been extended to all news employees worldwide – managerial and non-managerial – and includes a lucrative voluntary severance benefit that’s 1.5 times larger than the company’s standard buyout package.

WSJ employees will need to make up their minds quickly, as the buyout offer is good only until the end of October.

wsjbAs for Barron’s, its situation became public only after the Ed Finn memo was received in the New York City newsroom of The Wall Street Journal in error.  The Finn memo, which had been intended for Dow Jones Media Group publisher Almar Latour, speculates on how The Wall Street Journal’s announcement might affect an upcoming round of layoffs at Barron’s.

That bit was “new news” to pretty much everyone.

Aside from the “drama” of news scoops happening because of unintentional actions, the bigger question is this: What do these layoffs and buyouts portend?  Is it the end of the adjustments – or just the beginning?

Clues to that answer come in Gerard Baker’s memo, where he reveals that The Wall Street Journal has “begun an extensive review of operations as part of a broader transformation program.”

Let’s see what kind of “silver bullet” business strategy they end up devising – and whether it will have its intended effect.

Magazine Profitability Strategies: Prevention Magazine Goes for a Radical Solution

Phillip Nones Advertising, Business, Economics, Manufacturing, Media, Media Consumption, Publishing , , , , , ,

pmWhen a business model becomes problematic, sometimes the only solution is to step outside the circle with some seriously radical thinking.

That seems to be what magazine publisher Rodale has done with its flagship media property, Prevention magazine.

As reported by Jeffrey Trachtenberg this past week in The Wall Street Journal, beginning with the July issue, Prevention will no longer accept print advertising.

It’s a major step for a publication as venerable as Prevention, in print since 1950 and an important player in the magazine segment focusing on nutrition, fitness and weight loss.

According to the Trachtenberg piece, Prevention magazine has actually seen an increase in ad pages – up over 8% to 700+ ad pages in 2015 over the year before.  But here’s the rub:  ad revenues were actually down because of circulation losses.

The magazine hasn’t turned a profit in a number of years, either, although other related Rodale titles have (Runner’s World and Men’s Health).

The radical surgery planned for the publication means that the number of pages of a typical magazine issue will decline dramatically. So the cost of printing and shipping will go down.  In order to make up for the loss in ad revenue, the magazine’s subscription price is set to more than double to nearly $50 per year.

Price-conscious as consumers are, that action is expected to drive circulation figures down even further – from around 1.5 million to roughly 500,000 if the company’s projections are correct.

Is this an ingenious idea that will preserve and strengthen a highly regarded publication? Or a desperate action that will end up simply driving this magazine into oblivion in a novel way?

Maria Rodale

Maria Rodale, CEO of the family-owned publication company, thinks the former. As she stated to reporter Trachtenberg:

“We’re walking away from revenue but we’re also walking away from a lot of expense. Let’s serve our readers and charge them for it.”

Rodale anticipates that Prevention magazine’s operating expenses will be reduced by more than 50%.

What are the implications of that?  Maria Rodale again:

“If you have to run the numbers out with an advertising model, it’s hard to see it ever getting to profitability. With a non-advertising model, it quickly becomes profitable.”

… But I’m not so sure. This radical departure from the traditional ad-supported publication model may pay short-term dividends.  But will it turn out to be merely a momentary respite before the next downward slide – this time into irrelevance?

With so much information being so easily accessible online (and free of charge) – particularly in the areas of preventive health – I can easily envision fewer and fewer people wishing to shell out $50+ per year for the benefit of receiving a monthly publication that may or not contain highly relevant and valuable information each and every issue.

What do you think? Is this a silver-bullet solution?  Or a zinc zeppelin?

Memo to newspaper publishers: Don’t ‘diss’ your print subscribers.

Phillip Nones Business, Content Creation and Content Management, Marketing Communications, Marketing Research, Media, Media Consumption, Social Commentary , , , , , , ,

nindA few weeks ago, the Boston Globe stubbed its toe in major fashion when it changed the company it uses to deliver ~115,000 hard-copy versions of the daily paper in the Boston metro area.

And the problems continue to persist even now.

No doubt, the decision to switch home delivery services was made out of a desire to save money rather than to improve service.  And one can understand why management might have been looking for ways to cut production costs on the print version compared to the “go-go” online/digital realm.

But focusing on solely millennials and other younger customers can come back to “bite you on the bottom line” – which is exactly what happened in the case of the Globe.

Evidently, the new delivery service was untested – at least in terms of taking on a client with volumes as large as Boston’s leading newspaper.

As it turned out, tens of thousands of papers weren’t delivered, sparking a cataclysm of loud, negative feedback.

The pique of customers went well-beyond failing to receive something that had been paid for. In the case of the Globe’s extensive Baby Boomer subscriber base, missing home delivery struck at the heart of the time-honored rituals of how they receive and consume their news.

Consider this: The average subscriber to the Boston Globe pays around $700 per year for their home-delivery subscription.

That’s more than $80 million per year in income for the paper – before factoring in advertising revenue.

Of course, the costs of producing and delivering the print product exceeds that of digital. But this subscription base is more loyal than digital news consumers precisely because they value how the news is presented to them.

Let’s not forget that for people born before 1965, most are emotionally attached to print far more than those in other demographic groups. As Gordon Plutsky, a director of applied intelligence at IDG, writes about the Boston Globe snafu:

“[It’s] not just the physical paper, but the ritual of getting the paper off their driveway or front steps and starting their day spreading out the broadsheet and scanning the news. They missed curling up with coffee or tea and working the crossword puzzle or cutting coupons.  It is easy to forget that until the mid-‘90s, this was the only way to read the news and, for Boomers, it is how they learned to read and interact with the world.  Their brains are wired for print in the same way Gen Z is wired for mobile.”

Perhaps the Globe’s business and administrative staffers lost sight of that fact. Maybe they treated their “unsexy” print subscribers as an afterthought while forgetting that this segment of their customer base is critical to the very survival of their paper – and the industry – in a period of transition.

True, delivering the news to print customers is more expensive than doing so digitally. But these customers are more predictable and loyal, versus fickle and finicky.

… But only if the product is delivered. Fail in that fundamental function, and the gig is up.

nosThe Boston Globe’s print readers are hardly unique. Recently, Pew Research Center surveyed consumers in three urban markets.  Despite the differences in these markets (geographic, economic, social), a highly significant percentage of respondents in all three metro areas reported that they read only the print version of their local newspaper:

  • Denver, CO: ~46% read only the print version of their local newspaper
  • Macon, GA: ~48% read print only
  • Sioux City, IA-NE-SD: ~53% read print only

This isn’t to suggest that Boomer audiences are a bunch of rubes who aren’t connected to the digital world. Far from it:  They tend to be better educated and more wealthy (with more disposable income) than other demographic segments.  Their attachment to print isn’t in lieu of digital, but more in concert with their online habits.

Unlike other generations, they’re not single-channel as much as omni-channel consumers. The keys to newspaper publishers’ continued relevance are bound up in how they serve this older but critically important segment of their customer base.

Speaking personally, I can “take it or leave it” when it comes to print.  I don’t subscribe to a daily print paper, and the bulk of my news comes to me from digital sources.  But there’s something quite comfortable about sitting down with a quality daily paper and reading the news stories therein — including long-form journalism pieces that are difficult to find very many places these days.

There are millions more people across the country that are happy to continue paying for the privilege of consuming the news in just such a fashion.  Indeed, they’re the newspaper industry’s most loyal readers.

Craigslist: The $5 billion juggernaut that crippled an industry.

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Craigslist logoIt’s common knowledge that the business model for newspapers started going awry in a major way with the decline in newspaper classified advertising.

Craigslist played a huge role in that development, as the online classifieds site went about methodically entering one urban market after another across the United States.

And now we have quantification of just how impactful Craigslist’s role was.  It comes in the form of a May 2013 study authored by Robert Seamans of New York University’s Stern School of Business and Feng Zhu of the University of Southern California.

Titled Responses to Entry in Multi-Sided Markets:  The Impact of Craigslist on Local Newspapers, the study explored the dynamics at play over the period 2000-2007, focusing on newspapers’ degree of reliance on classifieds at the time of Craigslist’s entry into their markets.

What the researchers found was that those newspapers that relied heavily on classified ads for revenue experienced more than a 20% decline in classified advertising rates following Craigslist’s entry into their markets.

But that isn’t all:  The outmigration of classified advertising to Craigslist was accompanied by other negative trend lines — an increase of subscription prices (up 3%+) and lowering circulation figures (down nearly 5%).

Even newspaper display advertising rates fell by approximately 3%.

Were these developments “cause” or “effect”?  The study’s authors posit that fewer classified ads may have diminished the incentive for people to purchase the newspapers.  Also, display advertising rates tend to track circulation figures, so once the “decline cycle” started, it was bound to continue.

The study concludes that by offering buyers and sellers a free classified ad alternative to paid listings in newspapers, Craigslist saved users approximately $5 billion over the seven-year period.

Those dollars came right out of the hides of the newspapers, of course … and changed the print newspaper industry for good.

But here’s the thing:  The experience of the newspaper industry has relevance beyond just them.  “The boundaries between media industries are blurred and advertisers are able to reach consumers through a variety of platforms such as TV, the Internet and mobile devices,” the authors write.

The unmistakable message to others in the media is this:  It could happen to you, too.

A full summary of the Seamans/Zhu report can be found here.

To Find Newspaper Readers in the United States … Head East

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Newspaper stackThe news about newspaper readership rates has been uniformly bleak over the past decade or so.

In fact, readership rates for daily print newspaper have declined almost 20% since 2001, according to trend studies conducted by market research firm Scarborough.

Today, national daily print newspaper readership rates stand at around 37% of adults, down from ~50% just a dozen years ago.

Interestingly however, there are distinct differences in readership rates based on geography. 

Readership appears to be highest in the Northeast and Industrial Midwest regions, whereas it’s significantly lower than the national average across the Southeast, Texas and the Pacific Southwest.

Which metropolitan market takes top honors for readership? It’s Pittsburgh, where ~51% of the adult population reads daily print newspapers.

Other high readership rates are found in a cluster of markets within a 250-mile radius of Pittsburgh, it turns out:

  • Pittsburgh Metro Area: ~51% of adults read daily print newspapers
  • Albany/Schenectady/Troy Metro: ~49%
  • Hartford/New Haven Metro: ~49%
  • Cleveland Metro: ~48%
  • Buffalo/Niagara Fall Metro: ~47%
  • New York City Metro: ~47%
  • Toledo Metro: ~47%

Only one other metropolitan market charts daily newspaper readership as high: Honolulu, at ~47% adult readership.

Highest and Lowest Daily Newspaper Readership by Major Metropolitan Market
(Source: AdvertisingAge Magazine)

At the other end of the scale are various Sunbelt urban markets. Here are the five metropolitan areas that bring up the rear when it comes to the lowest daily newspaper readership rates:

  • Atlanta Metro Area: ~23% of adults read daily print newspapers
  • Houston/Galveston Metro: ~24%
  • San Antonio Metro: ~24%
  • Las Vegas Metro: ~26%
  • Bakersfield Metro: ~26%

What’s the cause of these geographic discrepancies?

It may be age demographics, which tend to skew younger in these Sunbelt markets.

Perhaps it’s the ethnic composition of the markets – although pretty much all of them on both lists have diverse populations.

So I turn the question over to the readers:  If you have any insights (or even simply suspicions) to share, I welcome your comments.

Print Publications: Hanging In There?

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Print magazines are hanging in there.There’s one thing you can say about print magazines: They’re not giving up without a fight!

The latest evidence of this comes in statistics released by Mediafinder®, a magazine tracking service run by Oxbridge Communications. It turns out that in 2011, there were 239 print publications launched in the United States and Canada. That’s a 24% increase over 2010, when 193 magazines were launched.

And at the other end of the scale, the number of magazines that ceased publishing in 2011 decreased over the previous year: 152 versus 176.

Actually, new magazine startups as well as closings are down significantly from just a few years ago. The worst year was in 2009, when a whopping 596 print magazines closed (but also 275 were launched).

Reviewing the stats, it’s not hard to understand the dynamics as to why print magazines have been on the ropes. For starters, magazine newsstand sales have dropped by nearly 50% over the past decade. And ad pages in consumer magazines fell more than 30% just between 2006 and 2010.

And in 2011 year-to-date, ad pages are continuing to track a smidgen lower (-1%), but at least the trend is now nearly flat rather than steeply downward.

To be sure, magazines have tried different tactics to stem the slide. One of the more interesting moves has been by the publishing firm Meredith Corporation, which announced a plan in the summer to begin guaranteeing that advertisers’ magazine buys will yield an increase in sales for their products or services.

Dubbed the “Meredith Engagement Dividend,” the program represents a new level of accountability for “analogue” media, which long relied on fuzzier metrics like audience reach and before/after market research.

The publisher’s new program is available to advertisers who commit to a minimum level of advertising impressions annually across multiple Meredith magazine titles. It works by correlating Meredith’s magazine readers with Nielsen’s Homescan (National Consumer Panel) service. That’s the same marketing research resource many top consumer products firms use to measure their product sales.

The Nielsen/NCP database of ~85 million consumer magazine readers is used to correlate the effect magazine ads have on resulting product purchase behaviors.

Meredith claims the research shows that advertisers in four key categories – household goods, beauty products, OTC drugs and food – have increased their product sales an average of 10% via ads placed in the Meredith publications. That claim is based on measuring the sales impact of “higher frequency” ad campaigns that ran during 2009 and 2010.

It’ll be interesting to see how the performance of print magazines evolves over the next few years. For now, the steep slide appears to have ended, but there’s no real evidence of a turnaround. The question is whether publishers can adjust their operating models to continue to work within the new, lower level of business activity.

Maybe they’ll succeed. You know … hope and change and all that.

Magazine advertising finally sees an uptick … sort of.

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Print Magazines
An uptick in print magazine advertising -- however modest -- appears to be occurring.
Could it be that print magazines are finally on the positive side of the “U” in their recovery? The most recent stats on print advertising activities suggest that this may be so – if only slightly.

In statistics released this past week by Publishers Information Bureau, this data aggregator found that across all of the magazines tracked by the bureau, print advertising rose ~2.5% during the first quarter of 2011 compared to the same period last year. While not large, it is a gain, which is better news than most publications have had in quite a while.

PIB charted advertising growth in seven of the twelve advertiser categories it tracks, with the following segments showing increases year-over-year:

 Apparel and accessories
 Automotive
 Cosmetics and toiletries
 Drugs and remedies
 Financial, insurance and real estate
 Media and advertising
 Technology

As for the other categories, advertising was roughly even in women’s fashion and beauty magazines, while advertising categories that continued to decline were retail, food, home furnishings, and travel.

More specifically, how did some of America’s largest and most famous magazine brands fare? The answer is: “It depends.”

BusinessWeek: +49%

Elle: +15%
Vogue: +11%
Glamour: +6%
The Economist: +4%
The New Yorker: +4%
Time: +3%

 InStyle: -4%
Cosmopolitan: -9%
Harper’s Bazaar: -11%

Newsweek: -31%

There are explanations behind the outliers’ advertising performance. BusinessWeek has undergone an extensive redesign since its purchase by Bloomberg, and major resources have been poured into the publication to raise its profile and editorial muscle.

At the other end of the scale, Newsweek has struggled in the wake of its purchase by nonagenarian Sidney Harman, the retired chairman of Harman International Industries (Harman/Kardon) and husband of Jane Harman, executive director of Wilson International Center for Scholars and an ex-congressperson from California. Bringing Tina Brown onboard as “celebrity editor” at Newsweek hasn’t paid big dividends yet – at least in terms of advertisers returning to the magazine.

Does the uptick in advertising mean that print magazines are out of the woods yet? Hardly. Let’s not forget that the improved advertising figures are coming off of 2010’s low base levels that are nothing short of ugly. Print advertising is slowly emerging from the worst business environment faced by magazines since the Great Depression, after all.

But at least the direction is now “up” …