Dim print scene in US

IN Media Practice | 06/08/2006

Dasu Krishnamoorty

The print media scene in the US is not as sunny as it once used to be. The exodus of ad revenues and subscribers to net pastures is a worrying phenomenon that is making newspapers wonder if it is a passing phase like the radio and TV challenges of yesteryears or something that might spell the nemesis of the print medium. Luckily, experts believe that this slump is a metro phenomenon and that the small town press, serving communities that make up the fabric of American life, is insulated against this threat. The latest exercises at the New York Times are typical of the strategies that most newspapers are adopting to reverse the trend of falling ad revenues and circulations.

A university don predicted last year, "The Roman Empire that was mass media is breaking up, and we are entering an almost-feudal period where there will be many more centers of power and influence. It`s a kind of disaggregation of the molecular structure of the media." This, however, is an extreme scenario to describe the state of print media in the US, projected by an announcement the New York Times Co. made two weeks ago, to prune 250 jobs and reduce the size of its pages in 2008, to make them one-and-a-half inches narrower. The company owns the New York Times, the International Herald Tribune and a score of other newspapers, including the Boston Globe. The newsroom will be poorer by 45 members at NYT and 35 at the Boston Globe. The company will also close its printing plant in New Jersey and shift it to Queens in New York city. The industry on the whole is expected to lay off or buy out around 1500 full-time news professionals this year.  

These steps are expected to save the NYT company $42 million per year. The job cuts account for about one-third of the Times` total production workforce of 800. The smaller size of its pages will mean a loss of 11 per cent of the space allotted to news. The Times plans to make up for the lost space by adding new pages but that would cover only half of the space lost. "That`s a number that I think we can live with quite comfortably. The smaller news space would require tighter editing and putting some news in digest form," said executive editor Bill Keller. USA Today already prints a smaller size and the Wall Street Journal is expected to follow suit next year. The Journal has recently reduced the size of  its European and Asian  editions.

Other changes that are on the anvil at the Times Square include a deal with the Swedish Metro International, biggest publisher of free daily newspapers in the world, to enable the Metro to carry classified ads of the New York Times.  There are also plans to sell ad space on the front page of its Business section. NYT’s European wing, the International Herald Tribune, has already started to carry headlines from citizen journalism site OhMyNews. Boston Globe will follow the example of its parent by integrating its newsroom and web operations. The Times spilled last year out of its metropolitan base into Ohio to serve communities in 100 new zip codes. This year, it is expected to open 20 printing centres making it a national phenomenon like the USA Today.

The Los Angeles Times, owned by the Tribune co. in Chicago, is not very happy either because the owner had cut its budget and also workforce as a sequel to falling revenues. LA Times is the leader in the west with circulations marginally less than those of the New York Times. Three California billionaires have last week offered to buy the newspaper. They were told that the newspaper was not for sale "at this time. If our perspective changes, we will contact you," Tribune chairman and CEO Dennis J. Fitzsimmons told them in a letter. The newspaper`s former owners, the Chandler family of Los Angeles, its second-largest shareholder with more than 12 per cent of Tribune stock, told the company to take decisive steps to reverse a decline in its stock price or consider putting itself or its newspaper companies up for sale, according to the family.

A Reuters report says that the Tribune Co. posted lower quarterly earnings last week due to losing circulation and ad revenues to the web. The company’s second-quarter net income fell 63 per cent to $85.7 million, or 28 cents a share, with losses from its sale of two television stations adding to its woes. National ad revenue dropped 7 per cent, the company said. The McClatchy Co. that recently acquired 32 of Knight-Ridder newspapers also is sailing in the same boat. Though newspapers reported increases of about 30 per cent for online ad revenue, this gain remains a small portion of total revenue with only marginal impact on print losses.

Everyone is talking about the New York Times because it is different and pays a price for being different. Its budget for editorial operations is the highest for any newspaper in the US, estimated to be $300 million a year. In 2002, it has won seven Pulitzer prizes, the maximum that any newspaper has won in a year. But in the last four years it has made more news than it has reported. The eyes of the English-speaking world are critically focused on it, hardly overlooking such debacles as Judith Miller and Jayson Blair. For much of its history, says BusinessWeekOnline, the Times barely broke even. The Sulzberger family owns 91 per cent of the shares through a dual system of share holding, thus frustrating takeover bids.

Media observers also believe that the New York Times bears most of the impact of the ideological polarization of the American body politic. In the last presidential campaigning, both the Democrats and the Republicans complained that the press was unfair to them. People do not any more seem to want journalism but coverage that affirms their political beliefs, says BusinessWeekOnline. The Times also has its hands full with litigation involving First Amendment. It had spent millions to defend Judith Miller.

According to the American Society of Newspapers census, 2005 saw the disappearance of 600 jobs from newsrooms, the silver lining being that the number was less than what the society had feared. The losses were mercifully limited to the metros. But job cuts are nevertheless continuing. The worst sufferers are journalists. Both newspapers where the circulation loss was the maximum are from the western metros, the Los Angeles Times and San Francisco Chronicle.

There was a general decline of around 20 per cent in stock prices throughout the newspaper world, including shares of Dow Jones & Co. that owns the Wall Street Journal, and the New York Times Co. A Reuters report claims that Gannett Co. that owns USA Today, posted an 8 per cent fall in profit due to weakness in its British newspaper business and higher newsprint costs which are expected to register a 15 per cent rise soon. In recent months, both the New York Times and USA Today merged their online and print newsrooms. And Dow Jones & Co. last week put its Internet and newspaper operations together in a new unit under a corporate-wide revamp.

The New York Times will soon join other newspapers like the Los Angeles Times, the Chicago Tribune and the Atlanta Journal Constitution in cutting the number of pages devoted to stock tables from six to two to save on newsprint cost. NYT, however, will continue to publish six pages of tables on Sunday. The gray lady has also begun charging $50 for access to features and articles of prominent columnists in a service called Times Select. This facility is still free for subscribers. The stock pages are deadweight and bring no ad revenues. Besides they are available live on the net and the running tickers of TV channels. Experts think it is better for NYT to divert that traffic to its excellent website.

James Cramer in New York magazine makes fun of print devotees like me by showing how obsolete the New York Times or any other newspaper would be, co-existing with the $100 billion information-accessing behemoth Google. He says, "The Times (here’s the irony) should go all-digital. It should abandon newsprint and force everyone to the web. Maybe it should take the revolutionary step of blocking Google from accessing its content. The only impediment for the Times to move on the web is, frankly, psychological: a fear of destroying a legacy business, a fear that has no place in a world where the Times is worth only $3.7 billion and Google nearly 30 times that. The next generation wants it on PCs, they want it on Treos, they want it on iPods, for Heaven’s sake, but certainly not on newsprint."

Contact: dasukrishnamoorty@hotmail.com