Category Archives: Newspapers

Canadian newspapers still generate big profits

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Those death-defying newspapers

By David Olive | Sun Feb 13 2011

Source: moneyville.ca

Newspapers are proving so resilient that the term “dying newspaper industry” will be retired in the next year or two.

Newspapers are still profitable, even in the midst of the most punishing ad drought in memory. Readership is at record levels, despite price hikes imposed by publishers. And web interlopers haven’t laid a glove on the industry’s status as society’s dominant news-gatherer.

In the latest sign of the industry’s strength, Statscan reported this week that the pretax profit margin for Canadian newspapers averaged 9.9 per cent last year. That’s down markedly from the halcyon pre-Internet, pre-ad-slump of 12.3 per cent in 2008. But it’s a long way from the extinction forecast for the industry by the most exuberant heralds of a purely digital world, a brave new world devoid of household names like the New York Times, Le Monde and metro dailies like The Toronto Star.

As recently as last year, the industry was shuddering from 2009’s stomach-churning plunge in advertising revenues, which cratered after the onset of the global financial crisis. Sam Zell, the real estate mogul who had just bought newspaper conglomerate Tribune Co., moaned that the industry was “looking at some of the worst advertising numbers in the history of the world.”

In the darkest hours, the venerable Seattle Post-Intelligencer and Denver’s Rocky Mountain News closed. Tribune and CanWest Global Communications Corp., the largest newspaper owners in the U.S. and Canada, respectively, filed for bankruptcy protection.

Yet newspapers appear poised for a bright future. To be sure, ad-revenue growth remains anaemic. And the industry has likely lost forever its lucrative franchise in classified ads, to Craigslist and other online upstarts.

But the widely anticipated “hollowing out” of newspaper readership hasn’t happened. Quite the opposite. The newspaper habit is stronger than ever, with more than three-quarters of Canadian adults, or 77 per cent, reading the print or online edition of a paper at least once a week.

Over the past five years, readership of Canada’s 95 dailies has actually increased, albeit by a modest 3.7 per cent. More than 14.7 million Canadians read a paper each week. That’s a “reach,” or portion of potential audience, that no non-traditional medium comes close to matching.

As important, Canadians are spending more time with newspapers. According to the latest, 2009-10, readership survey by NADbank, the industry group, in Canada’s top 10 markets readers are spending more than 3.8 hours a week with newspaper print editions. That’s up 2.1 per cent over the past three years.

And that at a time when publishers were raising the price of their product, enabling the industry to post a 12.9 per cent increase in circulation revenue between 2007 and 2009 to cushion a 4.9 per cent drop in ad revenues.

Meanwhile, readers are not spending close to two hours a week with the online editions of newspapers. Traditional papers are winning out in cyberspace. Retaining their status as the most trusted of news sources, with brand names dating back to 1778 in the case of the Montreal Gazette, newspapers have been able to build huge online audiences from scratch. The New York Times now claims a staggering 55 million online readers, against a weekday print circulation of less than 900,000. Online now accounts for 26 per cent of the New York Times’ total ad revenue.

Newspapers have benefited enormously from the rapid fragmentation of cyberspace.

The online world now is populated by social-networking sites, including Facebook with its 555 million members. There are some 200 million “blogs,” or personal web logs of writers on every topic from orchids to T-bill investing. There are tens of thousands of specialized newsletters, some published by the usual financial-services industry suspects, others independent, but none differing in content from their non-pixel predecessors. Not to overlook the so-called “aggregators” that merely repackage the online content of traditional media sources.

In that hyper-crowded arena, the advantage has gone to the most familiar tribunes. That would include the 164-year-old Chicago Tribune, which like almost every daily in North America has continued to earn profits through the industry’s worst hours. Indeed, industry warhorses the New York Times, Rupert Murdoch’s Wall Street Journal and even Tribune have reported profit gains in the past year.

Having not endured a crisis of this order since Gutenberg, the industry took on the appearance of a man with his hair on fire and trying to put it out with a hammer. Yet the demise of the Seattle P-I and the “Rocky” were simply a long-delayed capitulation to the one-newspaper monopoly that has characterized U.S. cities since the 1970s. And Tribune and CanWest succumbed to unsustainable, acquisition-related debt.

The “barriers to entry,” in econospeak, for launching an online publication are exceedingly minimal. Anyone with a Facebook, Blogger or Flickr account can become a publisher. Volatility is the norm, as underfunded websites are routinely abandoned.

By contrast, Star owner Torstar Corp., with close to $1.5 billion in 2009 revenues, has the resources to launch a portfolio of websites, host dozens of bloggers, and maintain a costly IT crew to run a complex digital enterprise.

Which explains why top-flight U.S. bloggers Andrew Sullivan, Felix Salmon and Eric Alterman have given up their garrets to bunk in with the venerable Atlantic, Reuters and The Nation, respectively. And why aggregators Huffington Post and The Daily Beast have sought shelter in larger and more familiar enterprises, AOL Inc. and the 77-year-old Newsweek, respectively.

In the past 12 months, shares in North America’s top10 publicly traded newspaper firms have gained an average of 20.8 per cent. And that’s before any meaningful recovery in ad revenues, or significant migration of print advertisers to online. And ahead of the New York Times’ second experiment, later this year, with trying to charge for selected online content. That’s a feat the Wall Street Journal and Financial Times have pulled off, and that Murdoch’s general-interest papers are now attempting.

Not long into the Internet’s brief history, users were complaining that “trying to get a drink from the Web is like sipping from a fire hydrant.” That growing flood of information is a boon to traditional newspapers. They alone have the expertise to quickly collect and verify staggering amounts of data and present it in reader-friendly formats.

We’ll hear soon enough about the phoenix-like rebirth of newspapers. It will be a crock, since there were no ashes to rise from. But editors will enjoy handling those reports far more than the industry obits they’ve edited these past few years.

Don’t Redesign, Rethink

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Source: Editor&Publisher
By: Bill Ostendorf

A continued, gradual drop in print readership could be explained as a natural result of technological changes. But the dramatic drops experienced by newspapers in recent years have been greatly accelerated by our own, self-inflicted wounds.

We’ve mangled our print publications with ill-timed and executed news hole reductions, publishing cycle changes, staff cuts, and price increases combined with aimless redesigns, crazy Web strategies, and a lack of real innovation. As a result, our situation is much worse than it should have been.

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The Newsonomics of tablets replacing newspapers

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by Ken Doctor

Source:  niemanlab.org

Newspaper ad optimism in the States

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Source: guardian.co.uk

There is a renewed sense of optimism among newspaper publishers in the United States and Canada who believe they are about to enjoy a better 2011.

They expect digital advertising, plus certain sectors of classified ads, will improve, according to a study by Kubas Consultants.

Its survey of more than 400 daily newspaper executives and managers across north America found expectations of digital ad sales increasing by almost 20%, with retail display growing 4.3%, and motors and employment up by 3.4%.

But national display ad revenues are projected to drop by a further 1.3% and property classified ads likely to fall by 1.7%.

Some 20% of publishers also feel confident enough to make major investments in printing systems.

But a word of warning. The Kubas report notes that in the past executives have tended to be over-optimistic in their digital ad projections.

Why Newsquest journalists are rebelling after Gannett executive’s profits boast

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By Roy Greenslade  Source: guardian.co.uk

Brighton Argus journalists were on the picket line today after voting to stage a two-day strike in protest at a two-year freeze on wages and the removal of subbing jobs.

Their major slogan was “Keep jobs local”, a reference to the fact that the paper is to be subbed largely from Southampton in future.

I somehow doubt that the National Union of Journalists would have voted for this action in normal circumstances. Their employer, Newsquest/Gannett, has got away with plenty of cutbacks in the past by claiming that plunging profits have necessitated editorial budget reductions.

But Gannett’s chief financial officer, Gracia Martore, put a lie to those claims last month when she told US analysts that Newsquest was making profits. Healthy profits.

Lest anyone forgets, here’s a verbatim account of what she said on 15 October:

“Let me once and for all dispel the myth that Newsquest doesn’t make money. Newsquest makes a lot of money.

In fact, their margin, as I have said a couple of times, is consistent with the margin that our local US community publishing operations generate.

So their margins are in the high teens to low 20s. And they have consistently made money throughout the years, even in a year like last year when revenues were under as much pressure as they were.”

No wonder Newsquest’s journalists in Brighton, Blackburn, Darlington and Southampton have taken, or are planning to take, industrial action.

As I’ve said before, I think subbing “hubs” are understandable. But the move to create them must be carried out sympathetically. Subs shouldn’t be cast out but encouraged to become content-providers.

As for the pay freeze, that’s altogether unacceptable in the light of Martore’s admission. It is even worse than that because Newsquest/Gannett bosses have been receiving rises while their hard-pressed employees have not.

I understand there is some embarrassment at Newsquest about Martore’s statement and hints that she overstated the true situation.

But Newsquest/Gannett cannot have it both ways. Either she told the truth to analysts, meaning that Newsquest’s executives have been telling porkies to their newspaper staffs.

Or she was “economical with the truth” when addressing sceptical US analysts.

Either Newsquest is making bumper profits and should not have imposed a pay freeze. Or it is scraping by, in which case the company’s chief financial officer should come clean.

New owners of Canwest papers targeting business offices after slashing editorial, advertising jobs

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Source: cwa-scacanada.ca

Postmedia Network, having just slashed scores of jobs in editorial and advertising departments across the former Canwest chain, is now turning its sights on the newspapers’ business offices.

The new company’s owners plan to begin centralizing the finance departments’ functions in Toronto and Winnipeg by the end of January. Staff reductions will be accomplished through buyouts and layoffs.

While Postmedia says it does not envision departmental closures, it is unknown how many business office jobs will be lost across the chain, which includes the flagship National Post, Calgary Herald, Edmonton Journal, Ottawa Citizen, Montreal Gazette, Vancouver Sun and Province, and the Victoria Times-Colonist.

Cuts in a newspaper’s business office will undoubtedly reduce local service and mean fewer connections between the paper and the people it serves in the community.

 “While any staff cuts are lamentable, we are particularly concerned about the editorial jobs that have been eliminated,” says Arnold Amber, Director of CWA Canada, which has members at five of the former Canwest papers. “Cutting reporters, photographers and editors certainly does not improve the quality of a newspaper.”

Although Postmedia is justifying the cuts by saying it wants to focus on a move to digital media, getting rid of experienced journalists is a recipe for mediocrity, says Amber.

“Loyal readers of these newspapers, advertisers and business customers expect high-quality local service and news coverage. If all of that is diminished, it does not bode well for the future of that community’s newspaper,” he notes.

The cuts have been swift and deep since Postmedia’s new fiscal year began on Sept. 1. CEO Paul Godfrey, while acknowledging that nearly all of the 11 Canwest dailies are profitable, is looking to recover $40 million to help pay down debt incurred when Postmedia bought the chain from Canwest.

CWA Canada has determined that Postmedia has shed at least 228 employees, including managers, across the chain. While it is difficult to obtain precise figures, the union estimates there have been about 100 cuts in advertising and at least 70 in editorial. Overall, CWA Canada has lost about 50 members as a result of the cuts.

Last year, Canwest chopped almost 800 jobs or 13 per cent of its workforce, while struggling under creditor protection, leaving Postmedia to inherit about 5,000 employees.

The most recent cuts were achieved by either buyouts or layoffs, with the former dominating at unionized newspapers and the latter at non-union papers.

One source told CWA Canada that all the cuts at the non-unionized Calgary Herald were layoffs. “Nobody was offered a buyout in the Herald newsroom; they were just laid off. Management announced that 35 jobs would be chopped, including eight in the newsroom.” The source adds: “The deskers (copy editors) feel like the sword of Damocles is hanging over them because management classifies them as ‘non-content providers’ and considers them expendable.”

This suggests that Postmedia is prepared to have its reporters and correspondents publish directly to the Web, without an experienced copy editor in between, ensuring an article’s accuracy, balance and, in many cases, legally acceptable reportage.

The Cuts
Calgary Herald

Jobs cut: 35 layoffs / 8 editorial positionsEdmonton Journal

Jobs cut: 20 (2 layoffs) / 8 editorial positions

Montreal Gazette

Jobs cut: 27 (23 union) / 10 editorial positions (includes 2 retirements)

Ottawa Citizen

Jobs cut: 42 (17 union) / 10 editorial positions

Regina Leader-Post

Jobs cut: 18 (3 layoffs) / 3 editorial positions

 Saskatoon StarPhoenix

Jobs cut: 9 (unconfirmed)Vancouver Sun The Province

Jobs cut: 50 (48 union) / 20 editorial positions

Victoria Times-Colonist

Jobs cut: 12 (9 Guild members and 3 CEP)

2 editorial positions

Windsor Star

Jobs cut: 8 / 7 editorial positions

Newspapers must find ways to sell content

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John Shmuel, Financial Post · Thursday, Nov. 11, 2010

Source: financialpost.com

Newspapers will certainly survive well into the future, but that survival is going to rely on finding increasingly new and innovative ways to monetize their content — and not just putting up pay walls.

Finding a happy middle was the message that came through most strongly during the Media in Transformation conference held in Toronto Thursday which was hosted by the Audit Bureau of Circulation.

Paul Godfrey, chief executive of Postmedia Network Inc., which owns the National Post, and one of the event’s speakers, said right now all eyes are on newspapers such as The New York Times, which will put up its pay wall in January.

“You know, I think everyone is exploring pay walls. Everybody seems to be waiting to see what happens,” he said in an interview after his speech. “The fact is that that’s going to be one of the big questions.”

Keeping readers, and drawing in new ones after a pay wall goes up meanwhile elicited different opinions from a panel that sat down to debate whether readers should be paying for content at all.

One of the panelists, Andrew Madden, who is Google’s head of strategic partnerships, said newspapers risk bleeding off readership if they erect pay walls that make them invisible to search engines.

“You need to think strategically on how to use search engines and pay walls,” he said.

Mr. Godfrey stressed that innovation was an important facet in monetizing the content of newspapers.

He cited an example where a newspaper might have a restaurant review section, and allow other users to comment or submit their own reviews. In order to monetize the content, the newspaper could charge restaurant owners to post their own submissions about their business, or even post their menus.

“Restaurateurs don’t traditionally advertise in newspapers, it’s just too expensive for them,” he said. “But something like that gives them an opportunity to be able to use our platform.”

Mr. Godfrey also said it was crucial that the newspaper industry direct capital spending toward improving digital con-tent, rather than spending it on traditional technologies.

“We can’t be spending it on printing presses because, A, they’re very costly, and you can get a printing press that’s 20 years old and it’s still in great working condition,” he said. “But now printing presses have colour on every page for example, so you’re behind the times five years after you spend millions and millions of dollars.”

And whereas improving the traditional newspaper medium will likely only serve to impress current readers, Mr. Godfrey said increasing capital spending on digital content and delivery will help build an audience, since digital content can engage audiences in ways newspapers can’t.

Of course, funding digital content won’t matter unless people are willing to pay for it. The good news, however, is that most of the event’s speakers believed that readers are willing to pay for quality content.

“If you have exclusive content, niche content — people are drawn to that,” said Lynne Brennan, senior vice-president of circulation for Dow Jones & Company. “If you provide readers with something they want, they’re going to pay for it.”

jshmuel@nationalpost.com

Media Decoder: Traffic Bait Doesn’t Bring Ad Clicks

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 A research company says the most profitable articles engage readers, with topics like unemployment and mortgage rates high on the list.

By JEREMY W. PETERS
Published: October 17, 2010
Sure, articles about Lindsay Lohan’s repeat trips to rehabilitation and Brett Favre’s purported sexual peccadilloes generate loads of reader traffic, but do they actually make decent money for the Web sites that publish them?   read entire story here