Bacon's Rebellion

Democracy Thrives in Sunlight

The Latest Twist in Newspapers’ Downward Spiral

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by

James A. Bacon
in

More Virginia victims of media downsizing:

Richmond Times-Dispatch. “We are repositioning the Richmond Times-Dispatch in 2018,” says Publisher Tom Silvestri today. “The continued disappearance of print advertising, now coupled with rising newsprint costs, will mean in 2018 we will have to do more with fewer resources.”

The newspaper, part of the BH Media Group, is raising its subscription rates. Explains Silvestri: “We are shifting from a predominantly advertising-supported business to an operation that relies more on subscription revenue.”

It’s also eliminating 21 positions and laying off nine employees, leaving 435 jobs. Silvestri did not say how many of the deleted positions are in the newsroom.

Roanoke Times. Meanwhile the Roanoke Times, also part of the BH Media Group, is eliminating seven jobs. Citing the “harsh reality” of rapid change in the industry, CEO Terry Kroeger cited advertising cutbacks by regional and national clients.

Fredericksburg Free Lance-Star. The Free Lance-Star and its Print Innovators printing plant are laying off nine employees. Publisher Dale Lachniet cited problems with the decline of print advertising. On the bright side, he noted, the newspaper experienced strong growth in its digital products in the past year, an increase in web and mobile traffic to more than 41 million page views, and a more than 150% increase in digital-only subscriptions.

Digital advertising doesn’t yield as much revenue per reader as print did. Judging from the Free Lance Star’s digital media kit, those 41 million page views probably translate into less than $2 million a year in advertising revenue. As for that 150% increase in digital-only subscriptions, how does that compare to the loss of print subscriptions?

Slowly but surely, Virginia’s newspapers, like local newspapers across the country, are cannibalizing themselves. Eventually, all but a handful of national newspapers (New York Times, Wall Street Journal) and vanity projects subsidized by billionaires (Washington Post) will shrivel into oblivion. As local newspapers cut editorial staff, they will publish less content and lose eyeballs. As they  boost subscription fees, they’ll lose eyeballs even faster.

The downward spiral will be marked by restructurings, bankruptcies, corporate takeovers, and more restructurings. For example, the Charleston Gazette-Mail in Charleston, W.Va., declared bankruptcy last month. Another media company likely will acquire it, but not before the 206-employee company lays off 50. Here in Virginia, BH Media is the dominant newspaper owner. The corporation is totally unsentimental about preserving its bottom line. It will not hesitate to continue cutting to maintain profitability.

When the local newspapers are gone, or so diminished that they are barely recognizable, who, then, will report the news? Google? Facebook? Russian fake-news propagandists? What a farce!

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5 responses to “The Latest Twist in Newspapers’ Downward Spiral”

  1. LocalGovGuy Avatar
    LocalGovGuy

    The Washington Post is close to catching the WSJ in digital subscriptions:

    http://money.cnn.com/2017/09/26/media/washington-post-digital-subscriptions/index.html

    The WSJ is in much more danger of going away than the Washington Post. Its readership is much older than the NYT or WaPo. Its main hook, financial news, has been displaced by the internet more than the longform cultural/sociological pieces found in the NYT/WaPo. Basically, Bloomberg is killing the WSJ on a daily basis as it consumes more and more of the market for financial news.

    In the end, the NYT and WaPo will be the last 2 newspapers standing.

  2. TooManyTaxes Avatar
    TooManyTaxes

    Newspapers have the wrong model. As I posted once before, they should look at the Texture model, wherein a monthly subscriber gets unlimited access to 200 or so magazines for around $10 a month. I bet a significant number of people would subscribe to all Virginia newspapers for $10 a month.

    1. LocalGovGuy Avatar
      LocalGovGuy

      100% agree TMT. If I could access all of the Berkshire papers in Virginia for $10/month, I’d pay for it.

  3. LarrytheG Avatar
    LarrytheG

    how many reporters would $10 a month pay for? Besides .. TMT thinks the WaPo and NYT are liberals rags anyhow! I’m surprised he’d pay a penny for either one , much less 10 bucks a month!

    So .. maybe the right question is – what will we do when the major newspapers are gone? Won’t have WaPo to kick around any more, eh?

  4. Peter Galuszka Avatar
    Peter Galuszka

    As happens too often on this blog, the headline and nut in this piece exaggerate. Yes, print media is under pressure, but a death spiral? It depends on which one. Middle to large sized metro dailies are in trouble and will stay in trouble as their largest and easiest customers — namely large department stores, car dealers and so on — leave the market.

    But, smaller, community newspapers can and do make healthy margins.

    I take a jaundiced view about media managers whining about the Net. They’ve been doing it for two decades now and they STILL haven’t come up with a viable new model. They have not found new sources of revenue to make up for the traditional ones. As they cut their staffs, they demand that fewer journalists perform two and three jobs. Namely, they are supposed to be little wire services posting every 20 minutes on social media while doing their print jobs, too. This bullshit, sleight-of-hand approach is exactly what media managers at the RTD have fostered and it doesn’t work. “We have to do more with less,” they say. But they have been saying that for 20 years.

    It’s true as well for traditional magazines. I was on the staff of BusinessWeek for 15 years. When I was there in the 1980s and 1990s, it was a highly successful cash cow. =It rode the tech boom so well, it struggled to fill all the news hole spread by huge tech spending (some of it, unfortunately, by sham companies trying to buy brand and a name).

    I remember that every three years, the magazine would bring in all of its news employees from all over the world to a retreat at a posh golf lodge outside of Philadelphia. BW was swimming in dough at the time. The CEO of the mother company was to be the dinner speaker one night. His helicopter fluttered out by the 18th hole. The message was strong and bitter. BW was not doing enough to deal with the digital threat. It was like the fall of Saigon. You could have heard a spoon drop in the dining room. I soon left the magazine , but within a few years, BW was losing $1 million a year. It flopped around until Mike Bloomberg bought it and it still has its ups and downs.

    In the case of the RTD, it is the same story. Fat and happy newspaper can’t change. Its so-called change agents only know how to chop and divide up the smaller pieces. Then Buffett buys them and it’s the Second Coming of the Lord — for a few years.

    Anyway, my points are:

    (1) media news is changing not dying. There are many net based outlets doing quite well.
    (2) Metros are suffering but not locals that can get the traditional ads and can get the legals that keep them going.
    (3) The big boys will still be around. And why the snark about the Post and Bezos? For a “vanity” purchase, he’s really done good things at the paper. If there were no Bezos, you’d be complaining that the Post is ready for burial. You can’t have it both ways.

    The problem is that media managers are like Old Big Steel. They were used to the old ways when they could earn big margins. INstead of changing with new competition with foreign steel makers, Big Steel got tariff protection while not changing. They’re gone. Big media has had two decades to change. Why haven’t they?
    Once again, the headline, and art and nut on this blog post are narrow and misleading. The truth is a bit more complicated.

    As for the RTD, I am strongly thinking about getting digital only because I am so disappointed with the loss of useful content. Now we are going to get LESS while paying MORE. Does that sound like a solution to you?

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