As Gannett’s brand morphs, print still top of mind
For a handful of years now, several newspaper companies have attempted to re-brand themselves into something — anything! — that doesn’t associate them with newspapers. Gannett is one of the latest examples trying to put some distance between itself and the industry despite the fact that it is still the largest newspaper chain by circulation in the U.S., it still derives the heft of its revenue from ink on paper, and it still is a bellwether for other companies that count big iron as an asset.
The USA Today publisher trips all over itself with its description. Here is part of the boiler plate the publisher and broadcaster uses:
“Gannett Co., Inc. is an international media and marketing solutions company that informs and engages more than 100 million people every month through its powerful network of broadcast, digital, mobile and publishing properties.”
The Street isn’t buying it at least today. Shares of Gannett fell about 9 percent so far after the company announced its Q1 results. It’s EPS beat Wall Street’s view by a long-shot. Its revenue was pretty much in line with expectations. So what gives? It’s the company’s slide in advertising revenue, specifically at its publishing division where it declined a little more than 8 percent, that accounts for the beating.
In fairness, Gannett’s CEO Gracia Martore said it is going to take some time for the company to start reaping results from the plan it rolled out to investors in February that included a pay model at its newspaper properties. On a call with analysts this morning about Gannett’s results, Martore said Gannett is “working to stabilize our Publishing business,” but that the effort is not a ” quick fix.”
“This isn’t a one- or two-quarter solution. Rather, it is a continuous effort which is going to begin to show results later this year,” she said.
Top Patch editor’s “bittersweet” exit
In case you haven’t had your fill of AOL news this week: Patch editor-in-chief Brian Farnham surprised employees today by declaring he will be out the door May 4.
The once-mighty Internet corporation stunned Silicon Valley just days ago by announcing it was unloading the majority of its patents to Microsoft for more than $1 billion. Now, Farnham’s imminent departure raised questions about the future of a once highly touted hyper-local news and community site that reportedly lost $160 million in 2011 alone.
AOL’s media business now also spans TechCrunch, Engadget, and the Huffington Post — all under the auspices of Arianna Huffington.
“Taking leave of Patch ain’t easy, but let me try to boil down why I’m doing so: it turns out I really love creating things from scratch, and while Patch is in a continual process of truly fascinating evolution and only a toddler of a company, it has definitely left “scratch” in the dust,” Farnham wrote in a Wednesday blogpost. “So I’m heading off to explore some other startup opportunities. But not before I take a good, long nap.”
Industry insiders had speculated that Patch — or any of a number of AOL properties — was on the auction block, even before the patent sale. Some trade publications in particular had wondered whether Huffington — who crossed to Tim Armstrong’s empire with the acquisition of her namesake content website amid much fanfare — might not see her influence diminish.
What’s next for the ever-more uncertain AOL sprawl? I guess we’ll have to wait and see.
“Brian is part of Patch’s DNA, which makes his decision to leave bittersweet for all of us. We’re going to miss him, but it goes without saying that we wish him well and that we’re excited to see what new opportunities await him post-Patch,” AOL’s Jon Brod said in a prepared statement.
from Paul Smalera:
The recession killed journalism – and saved it
Over the last few years, thanks to the global economic crisis – encapsulating everything from the 2008 housing crash to today’s ongoing euro zone sovereign-debt debacle – much ink has been spilled about the reshaping of the world’s economy, especially about the domestic job market.
Actually, scratch part of that last sentence, because less ink has been spilled, at least according to the results of a recent report by LinkedIn. The media business has been in overdrive, especially during this 2012 election season, but it’s now pushing pixels, not paper.
According to the data studied by LinkedIn, the professional social network, the newspaper industry experienced a 28.4 percent shrink rate between 2007 and 2011. The death of newspapers is not exactly a new phenomenon, so I’ll spare you yet another detailed recap of the print and economic climate that led to this broadsheet apocalypse.
But contrast newspapers’ huge drop with the gain experienced in the second-fastest-growing industry, according to the same LinkedIn data: online publishing. New-media companies posted a staggering 24.3 percent gain, coming in only behind the “Internet” overall. Look at the chart below and compare the green online publishing dot with the red newspaper dot.
In other words, reports of the media’s death are premature, at best. But more important, it’s unfair for any old-media advocate to say that the revenue model for media (or any industry moving toward digital) is broken. Yes, the companies and publications that power media look quite different than they used to, but these news organizations are still reporting the news.
And that truism is at the crux of why newspapers are in a bad spot. They have been trapped in a terrible mindset that they are in the business of selling newspapers. The leap from paper to digital may be vast, but to newspaper publishers, it seemed like vaulting to a different business entirely, one they were loathe to get into. No matter what kind of lip service newspapers paid to the digital transformation, the most prominent paywall model out there, that of the New York Times, still protects print subscriptions with a tiered digital pricing strategy – one so annoying that it motivated its former digital design director to complain publicly about the entire signup process.
Come on now, who are we kidding here? The people that sit on the media boards today are the same people sitting on the oil and pharmaceutical boards. They are the same people who organize political fund raisers.
Instead of investigative reporting we get pathetic drivel such as this entire article. ‘Journalism’ died because journalism died. The author of this article does nothing but hammer the point home.
Washington Post: the latest example of print ad plunge
Just when you think things can’t possibly get any worse for newspapers, it somehow manages to get even bleaker. Today’s example is provided by the Washington Post Co and its flagship paper (and the online site Slate). The company reported third quarter earnings including results from its newspaper division today.
Print advertising revenue fell 20 percent to $57.6 million — quite a stunning plunge even as newspapers across the U.S. manage to post quarter after quarter of print ad revenue declines. Even more disturbing is that online revenue, which includes washingtonpost.com and Slate, plunged 14 percent to $23.3 million. Display online ad revenue dropped 17 percent.
The Washington Post is one of those curious oddities in the industry that manages to be extremely local — it’s market penetration of the D.C. area has always been one of the highest in the U.S. — and also draws the interest of a large national audience. So while it may compete with the “nationals” i.e. New York Times, the Wall Street Journal and USA Today, on the news front, it is very dependent on local advertising. The NYT, USAT and WSJ get a hefty portion of their advertising revenue through national advertisers.
The local advertising category hasn’t been holding up as well as national advertising. It’s taking it on the chin as the housing market struggles, unemployment remains high and retail outlets are going out of business or simply taking their advertising elsewhere.
That’s not to say that national advertising revenue isn’t hurting as well. It’s more of a mixed bag. At the New York Times, for example, the division that mainly includes its flagship paper reported advertising revenue fell 6 percent to $156.1 million in Q3.
Gannett, which publishes USAT, used to give some information on how that paper was doing by reporting paid ad pages, but the company ceased — to use the parlance of research analysts — to provide more color on the USAT front. Instead, Gannett reports that national advertising, including USAT, fell 17 percent. USAT represents a big chunk of Gannett’s national advertising.
The Wall Street Journal manages somehow to defy these trends. Ad revenue rose 13 percent in the third quarter– that includes print and online – according to a memo from Dow Jones’ top executive Todd Larsen to employees.
Hmmmm. Guess WaPo/Slate subscribers and readers are getting tired of paying for and reading biased reporting and outright lies, and the advertisers don’t want to waste their money in venues where readers and subscribers are fleeing in droves.
Boston Globe sets pricing for new website
Another one of the New York Times Co’s newspaper properties is preparing to officially roll out a pay model for its website. The Boston Globe launched bostonglobe.com and starting Oct. 1 it will charge $3.99 per week for a digital-only subscription (print subscribers can read the site for free). Coldwell Banker Residential Brokerage New England is sponsoring a free trial subscription through Sept. 30. Unlike its sister site NYTimes.com, a subscription for bostonglobe.com is required to access all content.
The flagship New York Times rolled out in March a pay model for its digital products allowing readers to access up to 20 articles per month for free. After hitting that limit, a reader must shell out for a digital subscription to read more, anywhere from about $15 to $35 a month depending on the package. Print subscribers get free access to the site, mobile and smartphone apps.
The experiment is a being closely watched in the U.S. newspaper industry as a guidepost to see if general interest newspapers can successfully charge for digital content. The early data seems encouraging: As of the New York Times’ last earnings report in July, the company said that the NYTimes.com had 224,000 digital subscribers.
The Boston Globe is taking a slightly different path, though, with the launch of bostonglobe.com, which complements boston.com — one of the earliest and one of the most successful newspaper sites in this country. Boston.com will continue to be completely free, featuring breaking news, local deals, and listings for area restaurants, music venues, clubs, etc. Meanwhile, bostonglobe.com highlights content from the print edition and will include videos, photo galleries, breaking news and other features like online chats and access to the archives.
“We recognize that readers of boston.com are going there for different reasons: to find out what’s happening in the news and to find out what’s going on around town,” said Christopher M. Mayer, the publisher of the Boston Globe in an interview. “The Boston Globe never had its own digital front door.”
Can politicians finally escape Murdoch’s grasp?
By Bruce Page The views expressed are his own.
The News of the World was a survivor, increasingly moribund, from dark, forgotten passages in British social history.
Likewise, the Murdoch family is a political throwback — but thus far their wealth and their influence have escaped the lethal damage the News of the World did to itself. Though much diminished, the Murdochs might yet restore their peculiar system — in which media boss and political syndicate practice mutual exploitation, to the visible decay of effective democracy.
A similar symbiosis threatened when Thomas Jefferson worried that decent government could not exist without decent newspapers. But the threat generally retreated between Jefferson’s time and the last third of the 20th century. It was then, in 1969, that Rupert Murdoch, new proprietor of the News of the World, set about his life’s work: revitalizing that special relationship, along lines pioneered by his father, Keith, as a journalist in the Great War, government propaganda minister during World War II and newspaper owner in Australia.
When selling 8 million copies (not today’s 2.9 million) News of the World led the huge 1950s popular-newspaper boom, which rising literacy had produced.
A competitor, the Daily Mirror just managed to top 5 million then. But the NoW had long feasted with unique greed on society’s many weeping sores. Marital breakdown was about adultery: nothing restricting the destructive fantasies of divorcing partners. There was even less restraint in covering the lower criminal courts — thronged by the sad product of systematic police hunts designed to impose sexual conformity. No legal aid existed before 1947, so journalists were by custom twined-into the legal process: subsidizing murderers’ defences, in return for exclusive stories which typically concluded on the gallows.
Few of today’s boozy mourners would like to revisit that long-gone heyday. The NoW was already down to a 6 million circulation when Murdoch bought it: fading ever since with progress in social and legal hygiene. Irony suffuses News Corp’s attempt to reverse things, visibly desperate lately — for marketing moral shock needs a grimly puritan environment, which sits ill with soft pornography. “So long, and thanks for all the tits,” wrote an electronic newsheet last week, all sentiment absent.
Closing a tabloid won’t stop the cheating culture
By David Callahan The views expressed are his own.
The demise of the News of the World after a phone hacking scandal will not change a troubling truth about tabloid journalism – or business in general these days: Bad ethics can yield big financial rewards and such are the upsides of cheating that even honest professionals may feel they must bend the rules to compete.
Tabloid editors will surely think twice now before drawing on illegally obtained information. But other unethical practices – used by a range of print, broadcast, and online media businesses – will continue, like paying sources for dubious information (“cash for trash”) or fabricating juicy stories outright to boost circulation or ratings.
This sleaze machine is fueled not by the deviance of editors and producers but by rational incentives. The media business is brutal, with intense competition, impatient shareholders, and often razor-thin profit margins. Everyone in this world is under extreme pressure to perform and cutting ethical corners is one way to get an edge. The News of the World became Britain’s highest-circulation newspaper in large part by being less scrupulous than the competition. Cheating paid – at least until this week.
These dynamics are not unique to the media industry. All publicly-held companies are expected to show robust earnings every single quarter and while executive compensation has skyrocketed it has also become more tied to performance. With the sticks hitting harder and the carrots getting fatter, it should be no wonder that scandals have consumed so many industries – whether it’s corporations cooking their books or bankers lying about the toxicity of mortgage-backed securities or pharmaceutical executives authorizing the illegal “off-label” marketing of drugs.
When cheating pays, and few people are punished for breaking the rules, even those who want to be ethical may find that this isn’t so easy. If other tabloids are paying cash for trash in the hottest story of the moment, and you’re not, good luck with those circulation numbers – and getting that year-end bonus or even keeping your job. Many bank and mortgage executives during the real estate boom weren’t thrilled about embracing ethically dubious lending practices, but worried about losing market share to less scrupulous competitors if they didn’t.
A cheating culture feeds on itself as wrongdoing becomes normalized and sucks in more people. A truly appalling revelation – like a tabloid raising false hopes among the relatives of a murdered teen – can interrupt this cycle, but typically not for long. While Enron’s collapse in 2001 was a massive shock, the shenanigans around subprime mortgages started to spread before that company’s executives even got to trial. The closing of the News of the World is draconian, but even the summary execution of an entire paper is unlikely to lift tabloid journalism out of its gutter.
one thing that really amazes me,the metropolitan police are tut-tutting about the phone hacking…hang on havnt many of their members received large amounts of money in this sorry saga (allegedly )….perhaps they they might start by putting their own house in order.
Stop the Scanners: Google halts efforts to digitize old newspapers
Google’s has long touted a grand vision of organizing the world’s information. But on Friday, the world’s No.1 Internet search engine acknowledged that not all of that information will make the cut.
The company has put the brakes on a three-year-old project to scan and digitize newspaper archives dating back to the 18th century.
Google said that websurfers can continue to access its existing free online archive of newspapers – the company has digitized more than 3.5 million issues of more than 2,000 newspaper titles worldwide – but the company will no longer add to the collection by scanning old newspapers.
“We don’t plan to introduce any further features or functionality to the Google News Archives, and we are no longer accepting new microfilm or digital files for processing,” Google said in an emailed statement.
The news comes as Google undergoes its biggest management shift in a decade, with co-founder Larry Page replacing Eric Schmidt as CEO in April.
Interestingly, Page is considered to be a big proponent of ambitious “moonshot” projects, such as Google’s similar effort to scan the world’s out-of-print library books (an effort which is currently facing some legal difficulties).
But Google insiders have also said they expect Page to prune the vast number of projects underway at the company, so that Google can focus on the ones with the most promise. And there is increasing pressure from investors over Google’s free-spending ways.
First Melinda Gates, now Warren Buffett exit Wash Post board
Warren Buffett has always had a sweet spot in his heart for newspapers. Until he didn’t. In recent years, Buffet – once a paper boy, now a newspaper owner — has been quite vocal about the prospects of the industry. For instance in 2009 during a Berkshire Hathaway gathering in Omaha he told investors that the newspaper industry had the possibility of “unending losses” and that Berkshire would not buy most newspapers in the U.S. at any price.
Buffett, who owns the Buffalo News and has deep ties with the Washington Post, just cut another string of attachment to the industry: After nearly 40 years, Buffett said he is leaving the board of the Washington Post Co.
As my colleague Ben Berkowtiz reported, Buffett has been dialing back on his board commitments, choosing to devote more time to Berkshire Hathaway.
Buffet’s departure comes at the heels of another high-profile board member Melina Gates, who left the Washington Post board in November. With the newspaper industry in decline — it has yet to enjoy the bounce-back in advertising enjoyed by other media like television — the Washington Post is suffering like its peers. Even worse, the company’s cash cow the Kaplan education division is in danger of getting hit by government rules that could impact the business.
While Buffett and Washington Post chief executive Donald Graham, whose family owns the Washington Post, said in a statement that Buffett will still be available to advise the education and media company, the lastest move has got to sting.
(Photo: Reuters)
Online advertising catches up to newspapers in 2010
The newspaper industry had a lot of bad knocks this year. Advertising revenue continued to decline, when just about every other media sector — like local broadcast TV, for example – rebounded beautifully. For newspaper companies the term “moderating ad revenue declines” has become the new flat.
Now comes word from the research firm eMarketer that online advertising in the U.S. is expected to outgun newspaper advertising in 2010. For the year, online ad spending is expected to rise about 14 percent to $25.8 billion, while print advertising spending in newspapers is expected to decline about 8 percent to $22.8 billion. The research firm includes everything from Google and eBay to the New York Times in its online advertising category.
eMarketer also points out that total ad spending for newspapers including print and online will reach $25.7 billion in 2010, which it says is ”shy of the $25.8 billion advertisers will spend on Internet ads.”
Except it all depends on how you do the math. The $25.8 billion figure for online ad spend also includes Internet advertising spending on newspaper websites. According to the Newspaper Association of America, newspapers online ad revenue hit about $2.7 billion in 2009. So taking out that figure, combined print and online advertising revenue for newspapers will still eclipse online advertising spending at all other websites except newspapers for 2010.
Yet, any way you slice it, the numbers still point to a worrisome trend: Any gains that newspapers make with online ad revenue is not enough to offset print losses.
(Photo: Reuters)
