Newspapers' decline not so black and white

Don't blame it all on the internet - some managers are also doing their bit to get rid of readers

Extra, read all about it. Newspaper circulations in freefall. Readers desert to the internet. Abandon hope, all ye who enter print journalism.

Newspaper circulation has been dropping steadily in most of the developed world for many years, but the armageddonists are firmly in the ascendancy, particularly in the US, where they have taken to specifying a date on which the country's last newspaper will be printed (October 2044 on current trends, according to the American Journalism Review).

The latest round of grim circulation data, which was published by the Audit Bureau of Circulations last week, showed such a sharp acceleration in the downtrend that the date might have to be brought forward. The ABC survey of 534 of the largest daily newspapers found a 3.6 per cent decline in the six months to March 31, compared with the same period a year ago.

But here's the real scoop: this is not all bad news for the industry, and in many cases, the figures are exactly what managers wanted and worked towards. Eh? Rick Edmonds, media business analyst at the Poynter Institute, a Florida school for journalists, explains that - while many former newspaper readers are indeed now satisfied getting their news from the internet - this is only part of the story. "It is 50-50 between the rise of the internet and what Gary Pruitt, chief executive of [the regional newspaper company] McClatchy described last week as `managed circulation reduction'.

He said that they were no longer sending papers out into the boondocks, where distribution is expensive and it is an area that advertisers do not really care about."

In short, newspaper executives are making a hard-headed judgment that not all readers are created equal, at least not in the eyes of advertisers. "There is a lot of `ego circulation', but with newsprint prices going up, with transportation costs going up, anyone looking at the business model will say that there are copies that they don't have to print," says one analyst at a fund management firm. "Paid newsstand sales and home delivery, these are the prized readers. Now companies are thinking about trimming superfluous distribution. Many companies have previously been reluctant to touch circulation, because all it does is throw gasoline on the fire. They are all being accused of being dinosaurs, of having their heads in the sand. Cutting back on circulation simply generates another story about how bad the business is, but it can in fact be a much more rational business decision."

The New York Times, for example, said its Sunday sales drop was deliberate, since it was not renewing special offers such as giving the paper away to daily subscribers. Throughout the industry, over the past few months, executives have been explaining that saving money - and therefore saving newspapers - requires sacrificing some readers.

Not all industry-watchers are convinced that ditching less profitable readers works in the long run if it means more people fall out of the habit of reading a paper, just as other cost-cutting could also prove short-sighted. The New York Times is on the verge of making its first newsroom redundancies; its sister paper The Boston Globe is typical among smaller papers cutting back on overseas reporters.

Optimists point out that former newspaper readers are not straying very far. In many cases, they are simply browsing the paper on the web for free. That is painful as far as circulation revenues goes, but it also presents an opportunity. "Advertising rates on the internet are, for the most part, up, and newspaper websites are usually the number one or number two most trafficked sites in their region, which bodes well for the economic upturn," says Edmonds.

Of course, there is the downturn to navigate first, and it is already looking brutal for some in the newspaper industry. Sam Zell, the property magnate who took over Tribune Group, publisher of the Chicago Tribune and the Los Angeles Times last year, has found himself in danger of defaulting on his massive debts unless he sells some smaller papers, and he has told staff to brace for cuts.

It will take time to see who is right, the armageddonists or the newspaper executives who are claiming "managed reduction".


- NZ Herald

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