Bad News
Newspapers, though still profitable, are struggling. Big retailers like department stores are taking fewer ads. The web is drawing classifieds away from print.
Meanwhile, circulation is down. Nationally, the average newspaper's daily circulation fell 2.8% in 2006, according to the Audit Bureau of Circulations. Sunday circulation was off 3.4%.
Looking for new revenue streams, most papers are beefing up their own web offerings. Chicago-based Tribune Co., parent of both the Orlando Sentinel and the Sun-Sentinel in Fort Lauderdale, acquired ForSaleByOwner.com and increased its stake in careerbuilder.com and ShopLocal.com. The company also launched an e-based system for selling classifieds that is shared by its Baltimore Sun, Chicago Tribune and Orlando Sentinel. The McClatchy-owned Miami Herald is heavily promoting its apartments.com, careerbuilder.com and an online real estate section.
 Covering all the bases: "We're trying to make sure we have readers of not just the core product, the print edition, but online and in niche publications," says Tallahassee Democrat Publisher Pat Dorsey. |
The Tallahassee Democrat, a Gannett newspaper, took the unique step last year of purchasing the twice-weekly student newspaper of Florida State University, the FSView & Florida Flambeau. The Democrat, including the daily paper, its online version and an entertainment tabloid called Limelight, now reaches 71% of the 18- to 24-year-old demographic each day, compared with 40% for the typical daily.
"We're trying to make sure we have readers of not just the core product, the print edition, but online and in niche publications. The FSU paper was a big part of that. They do a great job of reaching the student market," says Tallahassee Democrat President and Publisher Pat Dorsey.
The St. Petersburg Times (a sister publication of Florida Trend -- both come under the ownership of the Poynter Institute, a non-profit school for journalists) switched a free tabloid called tbt* Tampa Bay Times from weekly to daily publication. It also has implemented cost-cutting measures, including trimming the width of the newspaper.
St. Petersburg Times Chairman and CEO Paul Tash says the Times' unique structure enables him to be more patient than most newspaper managers. "It will take three years to get tbt* into the black. If you're publicly held, that's a harder bargain to make."
Private equity groups have sensed opportunity in the woes of chain-owned papers. Los Angeles philanthropist and real estate mogul Eli Broad is one of several investors angling to buy the Los Angeles Times from the Tribune Co. Broad has said if the deal goes through, he would consider creating a non-profit holding company for the paper, emulating the setup in St. Petersburg.
Meanwhile, Wall Street analysts and industry insiders don't expect the erosion of traditional newspapers' advertising and circulation base to stop, at least in the short term. "It's a challenging period," says Tash, especially if shareholders remain "committed to profit margins that were unthinkable 20 to 30 years ago."
Expanding Reach
Despite declining circulations, newspapers are adding thousands of web-only readers who skip the printed editions but visit the dailies online. These "online exclusives" accounted for between 2% and 15% of readers in the top 25 U.S. markets, according to Scarborough Research.
The Newspaper Association of America has trumpeted the findings as evidence that print circulation numbers can't be considered in a "vacuum" and recently launched an interactive tool (newspaperaudience.com) built by Scarborough Research to allow advertisers to generate their own reports on national and local newspaper print and online audience data, comparing selected markets or newspapers across a range of demographic segments.
?
 Mojo reporter: Mark Krzos is part of a team of Fort Myers News-Press reporters who work out of their cars. |
Community Involvement
Challenges in the newspaper industry are resulting in new ways of newsgathering. At the Fort Myers News-Press, desk-bound reporters are being replaced by "mojos," mobile journalists who work mostly out of their cars and file stories from laptop computers. "We wanted more people on the street, more reporters out gathering really hyper-local news," says Executive Editor Kate Marymount.
The move hasn't necessarily meant more work for the reporters, says Marymount, just a different way of working. On a typical day, a mojo might attend the local university's opening day, file a web update with the president's remarks and later upload a photo gallery of shots from the faculty reception. The newspaper, in turn, might pluck a photo from the reception for the next day's newspaper and use the gathered information for a larger piece for the Sunday paper. "That one assignment might produce four or five products," says Marymount, who adds that the shift was built in part on the recognition that readers aren't all turning to the same sources for their information.
At the same time, the paper has been using a new concept it calls "crowdsourcing:" Getting readers involved in the newsgathering process. For instance, Marymount says her reporters might have spent months investigating a tip that Cape Coral consumers were being charged exorbitant rates to connect their homes to the sewer system. Instead, they asked their readers for help, and the torrent of calls and e-mails that ensued blew the story wide open. One reader slipped the paper an internal audit that revealed evidence that bids had been fixed.
News-Press parent Gannett has lauded "crowdsourcing" as a model for the future. Asking the community for help "delivers the newspaper into the heart of community conversations once again," Gannett Chief Executive Craig Dubow noted in a November staff memo.
People to Watch
Norbert "Bert" Ortiz
Orlando Sentinel
After almost 20 years at the Chicago Tribune, Norbert "Bert" Ortiz was brought in last fall as the Orlando Sentinel's director of circulation. The Sentinel is one of 11 newspapers owned by the Tribune Co., which has put itself up for sale to try to boost its share price.
?
Broadcasting
No Breaks
The Pew Research Center's Project for Excellence in Journalism suggests that the local TV news industry faces some of the same problems as newspapers.
High profit margins -- in the case of some TV stations, as much as 40% to 50% -- have whetted the appetites of shareholders who have a hard time stomaching declining audiences and smaller earnings.
At the same time, the non-partisan think tank suggests that local television newsrooms are bearing the brunt of a costly move toward multiplatform products and the conversion to digital.
"The best evidence suggests that TV journalists continue to be stretched thin, required to produce more programs and making the conversion to the web --?usually without a commensurate increase in their budget."
?
Still Strong
Despite a downturn in ad sales and slipping circulations, real estate and retail classified ad sales in Florida remained stronger than in other states. In fact, the Orlando Sentinel's parent company, Tribune Co., reports that Orlando and Los Angeles were the best-performing markets for classified ads in the third quarter of 2006.
Outlook
Merrill Lynch analysts predict a "weak 2007 outlook" and a continued 1.5% decline in ad revenue for the newspaper industry. Moreover, online ad revenue is not large enough to make up for declining print ads. "Even if we assume double-digit growth for online ad revenues through 2012 and then 5% thereafter, while print ad revenues drop by 1.5% annually, we do not see online representing over 50% of total newspaper ad revenues until more than 30 years from now," Merrill Lynch predicts.