The Chronicle’s 25% Solution
Everyone knows newspapers are struggling to deal with lower circulation and advertising revenue but the San Francisco Chronicle’s decision to slash 25% of its staff within a few months is eye-opening news. While this move will likely incite more concerns that newspapers are dying a death of a thousand cuts, the most interesting - and troubling - aspect is Chronicle publisher Frank Vega’s admission the success of the newspapers’s Web site, SFGate.com, is coming nowhere close to offsetting the money being lost on the print side of the house. Reflections of a Newsosaur suggests the job cuts will save the newspaper $8-million a year compared with first-quarter losses of $25-million.
 A big part of the problem is that online ad revenue isn’t as lucrative as newspaper advertising, which has been falling as online rivals such as Craigslist and, most recently, Facebook carve out more business in the lucrative classified and display ad markets. The question is whether the Chronicle’s troubles reflect the industry’s woes or whether it has more to do with the fact tech-savvy San Franciscans are getting their news online these days.
So what do newspapers do to survive other than cutting employees while making the remaining employees work harder by having them write for the newspaper and the Web, as well do podcasts and blogs. The Toronto Star, for example, has decided to drive even deeper into local coveage - a pragmatic move given the Web still doesn’t do local well, including local search. On May 28, the Star will launch an improved - and physically slimmer - local section featuring new type and a focus on Toronto news. It will also put more local news on the front pages of the paper. To its credit, the Star also has an aggressive online unit, including a new social networking/recommendation service called Our Faves.
It’s left to be seen whether local - or a strong Web presence - will save the day for newspapers. My own faith in newspapers is being tested when I look at how my own reading behaviour is changing. I used to love getting the three Saturday papers - the Toronto Star, Globe & Mail and National Post - because there were hours of good, coffee-fueled reading to be done. But recently, I’ve quickly cruised through the papers after reading just a handful of stories. How come? I think it may have to do with the fact I read so much news online that when it comes to newspapers, I don’t want news. Instead, I want context and perspective in tight, well-written packages. (Of course, this doesn’t apply to the Sunday New York Times, which still ranks among the best newspaper reads anywhere).
My sense is most newspapers are doing the best they can to adapt to the new readership and advertising landscape but still finding the going tough. At the end of the day, newspapers won’t disappear but they will be smaller operations employing fewer people and covering fewer stories. This isn’t a sad development. It just reflects how the world is changing. And it doesn’t mean consumers won’t be able to find the news, even local news. For Toronto news, I’m getting more of my news from places such as Spacing Wire.
For more, check out Recovering Journalist, who rightly wonders why a big newspaper chain hasn’t stepped up to buy an online advertising company such as DoubleClick or aQuantive.
“Good question,” he said. “It would have been a very smart acquisition, a real bet on the future. The technology companies seem to have that vision. The newspaper companies apparently don’t.”
Meanwhile, Signal to Noise advocates the future of newspapers is “hyperlocalism”. “This is the demand for community-oriented news that can’t be gotten anywhere besides a local source that lives and breathes within the community it serves.”
May 20th, 2007 at 8:59 pm
Newspapers are living in an alternate reality. That’s the only way I can think to explain it.
May 21st, 2007 at 2:14 am
I’ve thought about this a lot. . . and I believe the newspaper industry is currently just too big to be able to adapt as dramatically as it needs to the changing market. My experience as a journalist was in the UK where I worked for Gannett, Associated and News International. The scale of these organisations, to my mind anyway, makes it harder for the younger guys screaming about the web to get heard. The dinosaurs at the top just don’t get it yet. I think Gannett are trying some interesting things with their local papers in the States, equipping reporters with laptops and sending them out into the communities they serve. I also think hyperlocalism is the answer, but that’s no help to the big boys.
May 21st, 2007 at 2:33 pm
Newspapers are stuck because they’re trying to stay big. If they accepted the new reality, where they’re going to be small, they could just cut down to the appropriate size and be done with it.
May 21st, 2007 at 11:11 pm
Aaron, Bony:
Part of the challenge facing newspapers is changing a deep-rooted management culture. I mean, you’re talking about executives in their 40s and 50s who are far from Web savvy so expecting them to have a grasp on how the Web is turning their worlds upside down. Of course, this is a problem/challenge facing many senior managers in all kinds of businesses.
May 22nd, 2007 at 4:37 am
[…] So what do newspapers do to survive other than cutting employees while making the remaining employees work harder by having them write for the newspaper and the Web, as well do podcasts and blogs. The Toronto Star, for example, has decided to drive even deeper into local coveage - a pragmatic move given the Web still doesn’t do local well, including local search. On May 28, the Star will launch an improved - and physically slimmer - local section featuring new type and a focus on Toronto news. It will also put more local news on the front pages of the paper. To its credit, the Star also has an aggressive online unit, including a new social networking/recommendation service called Our Faves. Source: Mark Evans […]
May 22nd, 2007 at 1:17 pm
As a web saavy business executive in my 40s, I will try not to take it personnally that many people believe that age defines understanding or lack thereof. Part of being a superior business executive means distinguishing between a fad and a trend. Good business leaders make those distinctions correctly at the right time. Remember, all the pundits who said car dealerships would be eliminated with the web? Or all those arrogant Silicon Valley leaders within the B2B space that said B2B exchanges would take over? Not so much in either case.
It would appear that too many newspaper executives are incorrectly assessing fads versus trends to their detriment. The reasons for such decisions are many and complex. To say they do not “get it” is being over simplistic and naive.
May 31st, 2007 at 10:06 pm
EGuy, DoubleClick would have been an excellent investment for newspapers. But not those run by the old namby pamby copy editors and proof readers. Take a look at the business experience on the resumes of people like Phil Bronstein and the newly departed “Rosey.” Did they even complete BA degrees? Did they bother to even study Managerial Economis 101? The lazy boards of directors at many of the media chains let the editors run the enterprise, and let them get rid of the advertising and marketing entrepreneurs that used to run the media.