Almost nothing has worked this year for E. W. Scripps, the parent
company of The Commercial Appeal.
First, however, a little perspective is in order. The CA can
and does still make money, although Scripps won’t say how much or what
its profit margin is at individual properties. The Scripps newspaper
chain earned $58 million in profits on $431 million of operating
revenue in the first nine months of 2008. Not great, but hardly a
General Motors-style loss either. That said, the trend in circulation,
advertising, and finance is not good.
The Wall Street Solution: A reverse stock-split and
separation of the newspapers and network television stations into a new
company in July was supposed to keep Scripps stock trading above $5 a
share. Since that move was made, the stock has fallen from $11 to just
over $3, and the dividend has been cut. Ownership of a newspaper in
Memphis by a publicly traded company and its majority stockholders in
Cincinnati who demand dividends and a rising stock price is not going
to work.
The Web Solution: Shifting resources to the Internet is
supposed to attract advertisers. But Scripps’ papers get only 7 percent
of their revenue from the Internet, reports show.
Hot News: The presidential election and the 2008 Olympics
were an advertising boon to television stations but not newspapers. The
Flyer and the CA provided broader coverage of local
politics and both national conventions, but local television stations
reaped the rewards of campaign advertising, especially from the
Mississippi congressional races.
Turf Protection: Only about one in three households in Shelby
County receives the CA. Internal documents obtained by the
Flyer show that the CA‘s Sunday distribution, counting
home delivery and newsstand sales, is 123,687, and average
other-than-Sunday distribution is 99,958. Suburban papers are nimble,
pay less, and don’t have to be all things to all readers. Delivering
papers to the suburbs is expensive when your printing press is in
downtown Memphis. Combined circulation of suburban papers in Bartlett,
Germantown, Collierville, and Millington is closing in on the
CA.
Shrinking Your Way to Prosperity: Belt-tightening, like the
57 job cuts the CA made in October, reduces costs but also
lowers morale and puts good reporters out of work. The recession is
killing the businesses and classified ads that are the lifeblood of
newspapers.
So, do print newspapers have a future? As I’ve written before, I
think they do as long as there are coffee cups and bathrooms, but
diehards will have to pay more for home delivery and news staffs will
continue to shrink. I asked several current and former print
journalists, broadcasters, and bloggers what they think of the future
of print journalism. This is what they said:
Nevin Batiwalla is the editor of The Daily Helmsman at
the University of Memphis. The senior from Germantown is majoring in
— gasp! — journalism and works 12 hours a day, four days a
week, at the paper. He was recently laid off from his part-time weekend
job at the CA despite getting some positive references.
“I loved it. It was fun. It’s what I want to do,” says Batiwalla,
who is getting married in June. “But now that I’m about to graduate, I
see it’s really tough to get a job right now. I can’t sleep at
night.”
He thinks niche publications may be the future of print but
personally likes the breadth of coverage and the mix of features and
news in bigger papers.
“I read print newspapers, but I probably read more news online,” he
says. “There’s something about holding a newspaper that I like. But
other people my age … I don’t know anyone who reads a newspaper in
print form.”
The Helmsman gets a little subsidy from the university and
can sell ads, but the paper has shrunk from an average of 16 to 20
pages per issue to 8 to 16 pages. The paper is affiliated with a
college publisher that hosts its website for free but gets all the
advertising revenue.
Blogger Thaddeus Matthews, whose mix of news, rumor,
politics, and outrageous comments has won him a following, says there’s
decent money to be made on the Internet. Politicians are his biggest
revenue category: “In a political month, I do real well. I average
about $2,500 a month, but that is not really working at it. I spend
more time on [getting] advertising for my radio show.”
He does not subscribe to a print newspaper but is grateful for the
boost he gets when his blog is mentioned in one. He says media coverage
of the photographs he ran of the Lester Street murder victims “drove
100,000 people to my site in two days.”
Unlike print papers, website visits are unaudited. But Matthews is
confident in his business model.
“There’s no overhead, except for the time you put into it,” he
says.
Blogger Tom Jones, a former print reporter, is the main
author of the “Smart City Memphis” website, which provides serious
analysis of local government, education, and fresh ideas.
“It’s hard for me to see how newspapers survive,” he says. “They’re
so heavily invested in their own legacy systems that I don’t see them
figuring out how to make the transition to the web.”
Jones thinks the most likely survivors will be the really big and
really small papers. He thinks the rest will become niche operations,
customized to particular groups of readers. He’s working on a “Memphis
blog with 30 or 40 innovative thinkers” that would become the place to
look for Memphis happenings and ideas, but funding it is a puzzle.
“Is there any money in blogs?” he asks, rhetorically. “If there is,
I haven’t figured it out. It’s definitely a loss leader.”
Jon Alverson is publisher of the Millington Star, part
of the West 10 Newspapers group of paid and free suburban weeklies that
includes the Bartlett Express, Shelby Sun Times, and
Collierville Independent plus the Shopper’s News. The
group prints 119,000 papers a week, or 19,000 more than the CA‘s
midweek count.
Alverson, 33 years old, is a print guy. “Our saving grace is that we
are going to get enough of bloggers. So many have written so much that
so few read. We’ll go back to someone who provides a salient, vetted,
and fair news angle,” he says.
The Star‘s circulation is just under 5,000. A year’s
subscription and home delivery costs only $22. Less than 10 percent of
the paper’s revenue comes from Internet advertising.
“We’re not really in competition with The Commercial Appeal,”
Alverson says. “We serve a different kind of customer. We want to be
the Millington newspaper.”
Janice Broach is a veteran news reporter for WMC-TV Channel
5, one of four television news operations in Memphis. Newspapers may be
losing classified ads to the Internet, but surveys show that television
is where the majority of Memphians go for news. And like newspapers,
they’re investing in their websites.
“We are pretty lean, but television stations for the most part have
not been cutting back,” she says.
Broach thinks newspapers have a future because they can do longer
and more in-depth stories: “We have to rely on video, and we only have
so much time. They can talk more about the minutiae.” As for newspapers
adding their own video on their websites, “We are the masters of video,
but better something than nothing.”
Mike Fleming is a former Commercial Appeal reporter
who made a successful mid-career transition to radio, where he hosts
The Mike Fleming Show on WREC-AM 600. He is pessimistic about
the prospects for his former employer.
“I don’t think they have a future,” he says. “The way we envisioned
it is long gone. I can’t get through the day without reading a paper,
but I am in a vast minority. They have killed themselves by chalking
off conservatives and Republicans and a broad spectrum of people. But I
don’t think anything could have saved them anyway. The Internet has
eaten them alive. There may be a way to make money off it, but I’m not
smart enough to know what it is.”
Eric Barnes is publisher of the paid-circulation Memphis
Daily News (circulation 3,000) and its free weekly edition, The
Memphis News (circulation 11,000), launched last summer. The hybrid
business model relies on veteran local reporter Bill Dries for news, a
profit center of liens and licenses and other paid public notices, and
a close affiliation with the Chandler Reports, a real estate data base
that costs $25 a month and is heavily promoted in the company’s
papers.
“We think print has a future,” Barnes says. “We have emphasized the
web heavily for some time but see them coexisting. For us as niche
papers, that makes a lot of sense. I don’t envy the dailies trying to
remain general-interest, mass-distribution papers.”
The Daily News prints its own newspapers (unlike the
Flyer, which is printed in Jackson, Tennessee). That helped them
launch a new weekly in a bad economy. The papers get less than 10
percent of their revenue from online ads. Display advertising in the
print papers is up 30 percent this year, Barnes says.
“It is not good for cities to have their newspapers so under
pressure,” he adds. “Love ’em or hate ’em, they’re an important source
of information.”