Jon Fine writes a column for Business Week on the media.
The June 16 and June 23 2008 issues of his column have focused on the print media, newspapers in particular.
Here are some interesting comments, statistics and predictions related to newspapers in the United States as gleaned from those columns and elsewhere:
1. The most ad starved days are the Monday and Tuesday editions.
2. Deutsche Bank predicts that total newspaper revenue in 2008 will drop 11.2% on top of a 9.4% decline reported in 2007. In two years newspaper revenue will have declined 20.6%. This is a serious trend that shows no sign of slowing or stopping.
3. Newspapers are losing their pricing power on classified ads as those people placing ads migrate to other venues including Craigs List.
4. Newsprint, a major cost component of newspapers, could reach $200 per ton higher than a year ago. This is in line with increasing pressure on almost all commodities.
5. Rising gasoline prices impact the price of delivery from printing location to distribution center and from distribution center to point of consumption (home/office/rack/retail outlet).
6. It has been estimated that 19 of the top 50 newspapers in the United States are losing money.
7. It has been predicted that at least one major American city will lose their daily newspaper within the next 18 or so months. The newspaper most often suggested for this to happen is the San Jose Mercury News.
8. The sustainable competitive advantage that the print issue of a newspaper has is “portability” which means the ability of the reader to take the newspaper with them during the course of the day. This is being lost because people can now read the news on their mobile devices.
In addition, those individuals with access to the internet during the course of a workday can check on stories and glance at headlines. If they desire to read more, either at that time or later, they have the option to do so without purchasing a newspaper.
9. Wire service business is up 5% to 10% over the course of the last few years as newspapers have cut back on staff and use wire reports to provide content.
10. Profit margins are being compressed; in the past 30% was a solid number and it won’t be long before they are reduced to 10%. Anticipate hearing about further reductions in content, physical size of the pages, lighter and cheaper ink being used, number of pages printed and staff cuts.
11. Expect rising advertising rates as newspapers attempt to make up the difference in the loss of margin. Car dealerships are one of the largest sources of retail or display ads in daily newspapers.
12. Expect the price of print subscriptions to be reduced as newspapers strive in increase the number of audited subscribers in order to sell more advertisers. Print and online subscriptions may be combined to provide a better value to the reader.
13. Most daily newspapers provide more content that most people can easily consume. Some years ago Andy Rooney of the CBS show “60 Minutes” did a piece on the vast size of his Sunday New York Times essentially saying that the paper was so large he did not finish reading it until well into the next week.
One newspaper that continues to do well in the face of a declining industy is USA Today. Here are some thoughts behind the success of this newspaper, now celebrating more than a quarter of century of being in business:
1. The have successfully positioned themselves as “The Nation’s Newspaper.” You can get the paper delivered to your home or office, or pick it up just about anywhere while out of town. Most people first read it while away from home on a trip. It is often at major hotels:
2. The paper uses color. The pictures they print are in color; ads are in color and they use the color blue throughout the paper. Despite the additional cost, the publisher has determined that the “packaging” is more appealing with the use of color.
3. The stories are short and to the point.
4. The newspaper is middle of the road. (In far too many papers the reader can discern the balance or flavor of the article by simply reading the headline. As an example, on the front page of the New York Times on Sunday, June 15, 2008, a headline read: “In ’74 Thesis, the Seeds Of McCain’s War Views.” Apparently, the New York Times has decided that Mr. McCain is in favor of war for the sake of war).
5. The newspaper pushes people to the web. On the May 30, 2008 issue, the following web links appeared on the front page alone:
1. Down the left column: on the cost of gas in the country on the stock market results from the previous day for those readers with an issue related to subscriptions and delivery. A toll free number (1-800-USA-0001) was also listed.
2. The main article was entitled “Search the Web for the Nest Big Thing” and it referenced this site on the front page:
3. The column down the right side of the paper made reference to a map readers could see regarding vulnerable areas for hurricanes and changes in population in those areas .
4. The bottom of the page was an ad for Choice Hotels (Comfort Inn, Comfort Suites, Qulaity Inn, Sleep Inn, Clarion Hotels and Cambria Suityes) with the web site
It is little wonder that this newspaper continues to grow in circulation while other papers are losing theirs. They “get it.”
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