As newspapers cut print editions, lines blur between dailies and weeklies.
Phillip Reid and his wife Jeanne Ann publish 10 printed newspapers across Oklahoma and operate two printing plants in the state. When a transportation crunch left them with just a few remaining rolls of newsprint, it spelled big trouble.
As Phillip Reid observed, “How do you have a newspaper with no paper?”
Actually, some of the Reids’ fellow publishers have a ready answer to that question, and it doesn’t involve driving trucks to paper mills and laying plans for a trucking operation, as the Reids ultimately did to ensure their supplies.
Across the country, rising costs and shrinking demand for printed publications have changed the very definition of “daily” newspapers. Publishers from coast to coast – at weeklies as well as dailies – are reducing the days of the week they print, filling the gaps with e-editions and around-the-clock online access.
The once-routine, seven-day-a-week print run is disappearing, with 42 of the largest 100 newspapers now delivering a print edition six or fewer times a week. Eleven of those largest dailies publish in printed form only one or two times a week.
Some weeklies, too, are cutting back on their publishing frequency from three to two times to only once a week, even as many others supplement their print editions with daily subscriber e-newsletters – similarly defying the traditional idea of what makes a “weekly” a weekly. [The industry traditionally defines a daily as a paper that publishes either an e-edition or a print edition four or more times a week. A weekly publishes either electronically or in print three or fewer times a week.]
“Absolutely, the lines are blurring,” noted Sara April, of newspaper broker Dirks, Van Essen & April. “If you’re publishing new information daily, how much longer are we even going to use the terms daily and weekly?” Beyond terminology, dailies were generally much more valuable than weeklies, which is not necessarily the case today, April said.
As dailies become more like weeklies, and vice versa, their business models and strategies are in some ways diverging. While thousands of weeklies have folded since 2005, many in affluent, growing markets maintain strong cash flow and command relatively high valuations when sold. In contrast to large dailies, which rely on subscribers for more than half of their revenue, weeklies continue to receive most of their revenue from local businesses that buy advertising and services from them and sponsor their various print and digital publications.
In other ways, the business models of dailies and weeklies are becoming more similar, noted Conan Gallaty, chairman and chief executive officer of the Tampa Bay Times, a daily that publishes in print on Wednesdays and Sundays only. “Traditional weeklies will need to turn to more frequent online publishing in some format to attract new audiences and promote readership. Traditional dailies will reduce printing days and, hopefully, utilize some of the distribution savings to preserve their newsrooms for robust online publishing throughout the week,” Gallaty said. “Some print readers and advertisers will be concerned, but there aren’t enough of them to reverse the trend.”
Reid, the Oklahoma print publisher, is skeptical about the changes afoot, believing one of the most important “success factors” for small- and mid-sized publishers is synergy between print and digital.
“Wall Street has told newspaper chains that they have to be digital and give up on print. That is a big mistake,” Reid said. “With print, you can drive people to digital. I believe the future for newspapers is in creating a dynamic synergy between print and captivating digital platforms to acquire a larger market of readers and advertisers.”
Reid says he understands that his allegiance to print defies conventional wisdom embodied by Gannett, the nation’s largest newspaper chain.
Gannett Cuts Back Daily Frequency
The publisher of USA Today and 493 other newspapers has announced plans to transition many of its dailies to six-day print delivery. Most have chosen to cut Saturdays in print, while substituting e-editions to provide timely coverage of important local-news events such as Friday night sports. No one would be surprised if that schedule wound down over time to five days or fewer, with some markets shifting more rapidly than others.
As it stands, this year more than 130 dailies owned by Gannett are scheduled to drop from publishing a print edition seven days a week to six days. Gannett is reviewing the print frequency of “almost all” of its more than 200 dailies in the months to come, according to Amalie Nash, senior vice president for local news and audience development, in remarks to Northwestern University’s Penelope Abernathy. Only a “handful,” she said, will remain seven days, such as some papers in Arizona and Florida where older readers are less receptive to digital access.
Gannett has no current plans to follow the lead of Gallaty’s Tampa Bay Times and other prominent newspapers that have cut back to two- or one-day print delivery, Nash said. But much will depend on how the marketplace accepts the rollback to six days. Nash views the e-edition “as a bridge product for people who grew up reading the print edition,” she said. Younger customers “want content that is more visual,” so the chain is experimenting with video newsletters.
Gannett held the subscription price for six-day print delivery at the same level as seven-day delivery, and the company will closely monitor pricing levels for new customers and renewals, she said. The chain also will monitor cancellations and satisfaction levels for e-editions, which have seen usage rates spike as customers turn to those digital products on the missing print days.
In May, Gannett Chairman and Chief Executive Officer Mike Reed told investors the “Digital Saturday” initiative led to a 55% increase in digital e-edition use on those days.
“The impact on our home delivery subscriber volumes has been minimal and on track with our expectations,” Reed told investors at the time, according to the Seeking Alpha financial transcript service. “And while the move has benefited our customers, it has also helped Gannett with mitigation of overall secular trends as well as rising headwinds from inflation tied to newsprint, delivery and fuel costs.”
The shift to fewer print days has been building, as circulation of dailies declined sharply over the past two decades. The decline has put a spotlight on a long-standing business problem for dailies: Even at their peak in the 1990s, most dailies were profitable only two or three days a week. Sunday was so profitable it allowed for distribution seven days a week.
Publishers faced with increasingly unprofitable print days at first cut back circulation in less wealthy, outlying areas and increased the price of the print paper. Annual subscription rates for many metro dailies soared to hundreds of dollars, while at the same time local content and news hole decreased sharply, further eroding the value proposition of printed newspapers.
The Gannett experiment is being closely watched. Lee Enterprises and Alden Global Capital, which operate the No. 2 and No. 3 newspaper chains, still print and distribute most of their larger newspapers seven days a week, as do some bellwether independent newspapers in big markets such as Minneapolis, Boston and Philadelphia.
The trick for these and other large newspaper operators is accelerating digital subscription growth to offset the revenue lost from reducing print runs. Print still accounts for most of Gannett’s revenue, and the company finds itself in the conflicted position of working to improve the performance of its print products while also working to reduce its exposure to them and maximize the volume growth of digital subscribers.
Even before announcing its broad shift to six-day daily print delivery, Gannett had cut back the amount of printing it did. Newsprint consumption fell 8% to 180,370 metric tons in 2021, according to Gannett’s public filings, and its consumption is certain to continue declining as the chain cuts back print days. Over the past year, newsprint prices soared, as reflected in the U.S. Producer Price Index.
Experimentation Rules
Indeed, the rising cost of newsprint, labor and transportation is the No. 1 reason publishers cite for reducing print production. Experimentation is the order of the day, exemplified by the “Arkansas Gamble” – in which the Arkansas Democrat-Gazette discontinued print editions cold turkey and gave readers iPads to access a daily online replica.
The newspaper invested heavily in teaching readers how to use the tablet computers to get more value from the electronic edition than a static paper, then provided prompt service when problems arose, according to Abernathy, visiting professor at Northwestern’s Medill School of Journalism, Media, Integrated Marketing Communications. Importantly, she said, it held the same subscription price for the electronic edition as for the print edition.
Large dailies, especially, need to move toward pricing parity between print and digital subscriptions, she said. As it stands, recent research suggests, large dailies are getting less than 20% of the dollars on annual digital subscriptions that print subscriptions command.
Consequently, even as the number of digital subscriptions increase, the revenue from subscriptions overall is decreasing. That suggests the digital product is being steeply discounted, and subscribers aren’t re-upping at higher price points when their initial purchase expires, Abernathy said.
Gannett is not alone in trimming print production. Experimentation also is under way in Odessa, Texas, where AIM Media Management converted the Odessa American from a traditional seven-day-a-week print product to a seven-day e-newspaper plus two print editions each week.
One wrinkle in Odessa: The two print editions are being delivered by U.S. mail. “We are out of the carrier business, which was too expensive and way too much of a distraction,” explained Jeremy Halbreich, chairman and chief executive officer of AIM. “From a financial point of view, I am eliminating five days of print and distribution, which for any size of newspaper represents a very significant expense.”
AIM has found readers more receptive to consuming news online because of habits developed during the pandemic and, given labor shortages, the relief is substantial from having to find and retain delivery carriers. During the conversion, AIM lost fewer than 100 subscribers and the Odessa American has begun highly targeted digital marketing and advertising to attract new subscribers. AIM also is seeking to enhance revenue through its digital editions to support local car dealers, restaurants and other loyal advertisers.
“From every point of view – readers, advertisers, technology, financial – it all suggested it was the right time to do this. We’re not doing it defensively,” said Halbreich. “Now that we’re digital, it doesn’t cost as much to deliver additional pages. Since the conversion, our readers are getting more information and content. We are not planning on reducing our news and editorial resources. To date, I don’t think we’ve lost any advertising revenue.”
So, is the Odessa paper a daily? “Yes, you’re creating and generating and distributing new information on a daily basis. Also, since it is now digital, Odessa is providing more information and more pages than was the case previously with its print-only product,” Halbreich said. And what distinguishes it from a weekly that updates its site daily? “At the end of the day, who cares? The lines are blurring for all the right reasons.”
And it continues: Also in Texas, beginning August 15, the state’s second-oldest daily newspaper will be cutting back to three print days a week, while offering e-editions five days a week and over the weekend. The family-owned Victoria Advocate pledged to maintain seven-day-a-week reporting and promised local content will be undiminished.
“The demand for our local and state content continues to grow via our digital delivery formats, including e-editions, websites, social media and apps,” Stephen McHaney, president of M. Roberts Media, which publishes the Advocate and several other Texas newspapers and magazines, said in a story announcing the move. “We want to ensure our delivery formats are representative of our readers’ and advertisers’ preferences now and in the future.”
A Long-Term Future for Print?
Despite the trends working against print, many news organizations continue to plan for its long-term continuation. “You have to be prepared to operate the business without it in three to five years, but I think we can keep it a lot longer than that,” noted Andrew Olsen, publisher of the Times Review Media Group in New York, which includes three weeklies printed and delivered on Thursdays, according to Abernathy’s database. “You have to have a lot of automation, best-in-class software and have a team that knows how to [work] efficiently. There are aspects of print you can’t control. If it’s 10 at night and we’re getting a blizzard, I have trucks delivering papers while at the same time we’re sending out breaking news alerts to your phone.”
Still, Olsen said, even publishers in affluent markets need to invest toward the day when print will no longer pay the bills. “You need to build out the digital,” he said. “I wouldn’t rely 100% on print.”
In Massachusetts, Fredric Rutberg recently took the plunge to purchase an upgraded printing press, despite moving in late 2020 from printing seven days to five. The Berkshire Eagle, which he purchased with investment partners after becoming dismayed about cutbacks in its quality by a previous owner, now publishes Tuesday through Friday, plus a weekend edition.
Rutberg and his partners didn’t intend to cut back the Eagle, but economics won out: “The reduction in print frequency was a necessary response to the impact that Covid had on our advertising revenue,” Rutberg said.
“Readers were disappointed and so was I,” the former judge explained. “It wasn’t something we wanted to do. It was something we had to do” – to maintain editorial staff, among other reasons.
At the rate print editions are disappearing, how long will publishers continue producing printed newspapers? As recently as 2016, more than 90 percent of publishers and general managers said they expected printed newspapers to exist more than 20 years into the future, according to an Institute of Newspaper Technology survey. By 2020, the same survey of news managers showed only 48 percent of those at weeklies and 39 percent at dailies expected to be printing papers more than a dozen years into the future.
That won’t be the case for the Reids, publishing in Oklahoma. Their strategy of holding on to print while building digital platforms has created for advertisers “some of the best marketing opportunities in Oklahoma,” said Phillip Reid, whose company recently purchased three newspapers from Gannett.
Those papers were weakened by big-chain ownership, Reid said. Gannett “just couldn’t handle the details. The service to the communities was harshly diminished,” he said , as when the papers failed to print required legal notices on time.
The Reids improved reliability, brought the papers back to profitability, focused on community journalism and doubled down on print, including by running house ads extolling the virtues of the printed page. “We have evolved ‘happenstantially’ to become one of the largest printers of newspapers in Oklahoma,” Reid said, noting that he’s in the market to purchase more print newspapers. “Shutting down print editions causes people to lose faith in the product and is [the] biggest challenge to overcome for our industry.”
Lire : Local News Initiative du 27 juillet
Jean-Philippe Behr
