now read this: a crackerjack analysis of circulation declines

Recovering Journalist offers a depressing, but excellent analysis of circulation trends. Well worth a read (preferably with a lot of scotch at hand):

The declines over the past two years are disproportionately large compared to the seven- and 12-year spans–again, despite growing population and, until recently, a healthy economy. In other words, the circulation slide is worsening. It's hard to see, especially with the economy in the tank, any sort of moderation of the downward trend. And that, in turn, chases off advertisers and leads to even more budget-cutting pain.

How low can it go? Newspaper circulation drops again

Another day, another doomsday for print news. The latest circulation numbers are out and they're nasty.

But, there's still hope. Newspapers stay strong in Japan, thanks to a 27 year long decline in birth rates! The number of young people in Japan hasn't been lower since 1908. So there's the new model: Kill the youth. I'm sure it's been floated in some board meeting by now.

The hits keep coming: Newspaper's online revenue down

Just in case 11,000+ news jobs disappearing in the last year didn't perk you up, how about the news that online ad sales are down on news sites, after 17 quarters of growth.

That drop isn't symptomatic of Internet advertising overall, which grew last quarter by 7.6 percent. The problem is, of course, that newspapers aren't competing against only other newspapers (which is already a massively different equation than they're used to, when they could have a near-monopoly over ads in their local market) but against the entire Internet. And while people are certainly looking at news sites, they're looking other places as well. And advertising follows eyeballs (or so the theory goes, anyway).

But in the Times story today, another issue is raised: Newspapers' thirst to sell every possible space on their page, forcing them to rely on small money ad networks to fill a lot of the open space on their sites. These networks, which pay out about $1 per thousand views, may be stealing advertisers from news sites themselves, says Steve Stup from the Washington Post Interactive:

“It’s still a situation where if advertisers even perceive they can reach your audience, they might be inclined to go with a network, and that’s a concern I have with networks."

It's high school economics class: supply and demand. If you're filling your pages with endless numbers of cut-rate ads, how do you expect to sell the good stuff at a premium? Here's another ad-dude:

“That high level of unsold inventory often creates a real challenge in terms of sustaining pricing or growing pricing,” said John Frelinghuysen. “In most media, especially in television, the traditional model has been that you drive sellout, and that gives you the ability to drive pricing over time.”

Here's another case of newspaper moneymen putting the cart before the horse: They see the space, not the value. To them, the Internet is an infinite page with which to fill with advertising. But value doesn't scale like that: the more that's available, the less it's worth.

Why does that sound familiar? Because, perhaps, it's the exact same equation that got newspapers into the predicament they find themselves in in the first place. If you never learn from your mistakes, how can you not repeat them?

Facebook: a business model only a mother could love

Facebook Chief Operating Officer Sheryl Sandberg spoke to the American Magazine Conference yesterday about the business model (or lack thereof) of Facebook. As one would expect, she led with her A game, detailing a joint promotion with MTV that had results that "were really positive," though the article doesn't say if she cited any numbers or talked any level of specifics (nor, if you read the description, does it sound like something that would scale up easily without creating massive amounts of spammy goodness in your Facebook feed).

That out of the way, there wasn't much left for Sandberg to spin:

"We need to find a new model and new metrics," she added.

Which is really about as sad a way of saying "nothing's quite working" as I can imagine.

It's a problem that's plagued social networks from the start: You get a ton of users, but there's no real way of flipping them into dollars. Traditional advertising gets no traction, and attempts at sticking advertising too completely into people's social space--attempts like Facebook's own aborted Beacon--have pushed far too hard on the creep-meter.

It's the age old Silicon Valley conundrum: All dolled up with nowhere to go, and no business plan to guide you. One imagines that the current economy isn't going to help them out much either. Facebook is already on tap to lose $150 million this year (and that's old numbers now). What does next year hold?

I suppose, ultimately, it doesn't matter when your valuation is $15 billion, and Microsoft has your back (they awkwardly integrated Microsoft web search into the site just this week), but still--do you think Facebook execs occasionally wake up at night with cold sweats, worrying that perhaps they've built their house upon rapidly disappearing sand?

Nah, me neither.

Happy Monday: the end of daily newspapers

If your week isn't starting off just peachy enough, try and get through this essay about the very-real situation facing daily newspapers in these last months of 2008 and the start of 2009. From the growing trend of changing the size and shape of the paper to cut costs, to the brutal effect that the credit crisis is going to have on the industry, it's the kind of gloves-off, unvarnished truth that too few people are writing:

The fundamental structural shifts in the industry's business model are too profound. Newspapers that emerge from this crucible will be leaner, less frequent and Web-centric–and they may not even be available in print. Some will survive, but some won't.

Now back to work, you!

An (ugh) Creative Loafing insider's perspective

This is a pretty honest assessment of Creative Loafing's chances of survival and strategies moving forward after their announcement of going into bankruptcy protection on Monday. The short? It ain't good.

Chicago Reader deathwatch part 1000

Fitting perhaps that on the day that the Chicago Tribune redesign went live, the year-old owners of the Reader, Chicago's long-running alternative weekly paper, announced they were filing for bankruptcy protection.

Now the sale of the Reader is a topic I've covered extensively here, so there's a lot of backstory to catch up on. The short of it (for those not willing to follow those half-dozen links) is that the once-profitable paper was at the center of a converging media landscape that had the Tribune's Red Eye commuter paper on one track, Time Out Chicago on another, and Craigslist on a third. There was no real expectation of survival--the paper's prime had long passed it by--and the owners sold the paper to the Tampa, Florida based publishers Creative Loafing who still, just over a year since I first learned their name, causes a cringe in me every time I hear it.

Now bankruptcy protection is different than bankruptcy itself (yes, by all of one word) as Creative Loafing (ugh) owner Ben Eason is quick to point out to the Chicago Reader's own Michael Miner. "This isn't a failing company," he says, spinning in the manner most media CEOs have become quite accustomed to. If you don't believe him, he's got a few more for you: "This is a profitable business." No? How about "The company has a good cash flow. It has a good market position. Online revenues more than doubled in the last year." In other words, filing for bankruptcy protection is, like, the bestest, most awesomest thing ever!

So why, in the face of all this good news, is it happening? That one's easy! Let's take the Internet for 1000, Alex: Creative Loafing (ugh) finds themselves "caught squarely by this challenging economy between old media and new media." If that sounds familiar, that's because a little over a year ago Eason was touting (ugh) Creative Loafing's actions in "pioneering the opportunities offered by convergent print, web, and new media applications." Seems like that didn't work out quite the way he planned, huh?

But the future is bright! Just ask Eason! On an internal memo leaked on Miner's blog, he explains "Bottom line is that once this Company becomes a digital company. The money will follow our transformation." As proof, he touts that last year alone "our online business grew from roughly $200,000 in revenue to a run rate of $1,200,000 currently." That the declining print side of the Chicago Reader alone makes many times that seems to be omitted from the memo, though he does admit that the Reader and the Washington City Pages (originally a Reader property) make up half the profits of the company. Which is all well and good except that it's going to be a hell of a lot easier to become the defacto "going out" website in Sarasota than it is going to be in an oversaturated local web market like Chicago which hosts any number of homegrown alternatives to the Reader's tired website. The Reader stopped being the only game in town decades ago; online it's barely even an also-ran.

But dispite the tough times, Eason is promising no liquidation and no layoffs, and really why not believe the guy? It's not like credit isn't easy to come by right now--the banks are just giving money away, aren't they? Oh wait... What's that? Biggest stock market crash ever? Oops.

Update: As pointed out in the comments, I apparently had Craigslist on the brain when I called (ugh) Creative Loafing's Ben Eason "Craig" accidentally. I've made the change.

brace yourself

The second half of the year looks like it's going to be even worse for newspapers.

magazine ad sales down yet again

Good news: It's not the freefall that newspapers find themselves in.
Bad news: Yet.

Why you can't spell "associated press" without "ass"

Want to excerpt just five words from an AP story? That'll be $12.50, please.

fallen soldier

Spending 12 years doing anything is hard, but spending 12 years reading magazines and writing about them intelligently is a feat worthly of Sisyphus. Well that's exactly the feat that the Washington Post's Peter Carlson has pulled off in his always-engaging column "The Magazine Reader." Unfortunately, Carlson has penned his last column, choosing to take the Washington Post's buyout offer in order to explore other arenas, "such as sloth and gin" (nobel pursuits both). Carlson's departure is a sad statement on both the state of newspapers and magazines (because, one would imagine, if they still felt vital, he'd have kept the beat going), and one worth noting here.

a case of the mondays

Here are some numbers that aren't nice to wake up to:

Print circulation continues on its steep downward slide, the Audit Bureau of Circulations revealed this morning in releasing the latest numbers for some of the country's largest dailies in the six-month period ending March 31, 2008. When a full analysis appears it is expected to find, according to sources, the biggest dip yet, about 3.5% daily and 4.5 for Sunday.

Break the numbers down and they don't look much better. A selection:

The New York Times lost more than 150,000 copies on Sunday. Circulation on that day fell a whopping 9.2% to 1,476,400. The paper's daily circulation declined 3.8% to 1,077,256.

In Los Angeles, the Times lost more than 40,000 daily copies. Daily circulation there was down 5.1% to 773,884. Sunday declined 6.0% to 1,101,981.

Daily and Sunday circulation at the Chicago Tribune both dropped 4.4% to 541,663 and 898,703, respectively.

The Miami Herald reported daily circulation lost more than 11% with 240,223 copies while Sunday dropped 9% to 311,245.

Magazine ad pages down, down, down

I've had a few conversations with people over the last few months that focus around the concept that magazines are weathering the digital storm better than newspapers, due to the niche-based business that magazines cultivate with their audience vs. the masses-based model of a daily newspaper. I've always found it odd that people would argue that point with me, seeing as how my very experience contradicts the point, but they do articulate it nonetheless.

Well, a report that some of the most profitable magazines out there took a punch to the gut on ad sales in the first quarter should do a good job of adding some sobering facts to the discussion.

As one news chain spirals into bankruptcy, the big question is "Who's Next?"

According to a report published today, the Journal-Register Company--one of those third-tier media empires you've never heard of but turns out owns over 300 papers--has brought on an investment bank as it considers filing for Chapter 11.

If the company were to seek bankruptcy protection, as analysts said was possible, it would be a first in recent memory for a publicly traded newspaper company, John Morton, a longtime newspaper analyst, said.

The holdings of the Journal-Register comprise "Greater Philadelphia, Michigan, Connecticut, Greater Cleveland and the mid-Hudson region of New York," and many of their titles seem to be the kind of ad circulars and free shoppers (personal favorite: The Penny Stretcher) that you would expect to be taking a beating in the 21st Century. But they also hold a cubic ton of tiny local papers, the exact kind that the "hyperlocal" argument says should be able to be leveraged to great advantage in the "competitive news environment" we find ourselves in now.

Now I have no doubt, just looking at the Journal-Register Company's website itself, that they weren't leveraging those assets very well online (a quick check at a random title confirms it, though I do appreciate the lead story: "Local canoe challenge will be tribute to legendary canoeist"), but the real question is can it be possible for any company like the Journal-Register to turn their ship around at this point? How can you innovate 300+ papers at the same time, without going under in the process?

I guess the real argument is simply this one: You're going under anyway, why not give it a try?

It's probably too late for the Journal-Register, but the next mid-tier chain should start trying to answer that question before it's too late for them too.

Your depressing newspaper news of the day

Editor and Publisher charts the plummeting circulation over the last four years at major daily newspapers. The numbers are a serious kick in the sack:

USA Today -- 2,293,137 -- 46,141 -- 2.1%
The Wall Street Journal -- 2,011,882 -- (-79,180) -- (-3.8%)
The New York Times -- 1,037,828 -- (-80,737) -- (-7.2%)
Los Angeles Times* -- 794,705 -- (-201,133) -- (-20.2%)
New York Daily News -- 681,415 -- (-47,709) -- (-6.5%)

New York Post -- 667,119 -- 14,693 -- 2.3%
The Washington Post -- 635,087 -- (-97,785) -- (-13.3%)
Chicago Tribune -- 559,404 -- (-54,105) -- (-8.8%)
Houston Chronicle* -- 502,631 -- (-50,387) -- (-9.1%)
Newsday -- 387,503 -- NA

The Arizona Republic*, Phoenix -- 385,214 -- (-47,070) -- (-10.9%)
The Dallas Morning News -- 373,586 -- NA
San Francisco Chronicle -- 365,234 -- (-147,406) -- (-28.8%)
The Boston Globe -- 360,695 -- (-89,843) -- (-19.9%)
The Star-Ledger, Newark, N.J. -- 353,003 -- (-55,669) -- (-13.6%)

The Philadelphia Inquirer -- 338,049 -- (-38,444) -- (-10.2%)
Star Tribune*, Minneapolis -- 341,645 -- (-38,709) -- (-10.2%)
The Plain Dealer*, Cleveland -- 332,894 -- (-32,394) -- (-8.9%)
Detroit Free Press -- 320,125 -- (-32,589) -- (-9.2%)
The Atlanta Journal-Constitution -- 318,350 -- (-64,071) -- (-16.8%)

Yes, you're seeing that San Francisco Chronicle number correctly: almost 30%. The chaos at the LA Times didn't help the paper either: down just over 20%. Ditto the Boston Globe. Even the venerable New York Times--the very definition of the new "brand" centered newspaper concept--dropped over 7%.

According to the story, the overall decline among all dailies was 1.4 million copies a day. Oof.

On the upside, everyone needs to dissect exactly what it was that USA Today did and the New York Post did to actually grow their circulation over the same period. Unfortunately, my guess is that what they did wasn't probably the kind of journalism that a person feels good about the next morning.

via Romanesko

Good thing it's early...

... because a chart like this will make a person lose some serious sleep.

that's one way to put it

In a statement surrounding the bankruptcy filings of once-powerful electronics magazine publishers Ziff Davis Media, in which they announced they had over $200 million in debts, Ziff Davis CEO Jason Young said, "We feel like we're in a position poised for wonderful growth," adding, "we just needed to solve this issue."

Yes, just that little issue of being $200 million in debt, with no end in sight:

The bursting of the Internet bubble hurt publishers like Ziff Davis, which said its print advertising revenue dropped to $40 million last year from $215 million in 2001. Its total revenue fell to $76 million last year from about $300 million in 2001.

via the ever-vigilant Magazine Death Pool

because who wouldn't walk away from $15 billion?

Mysteries abound in Palo Alto! It was quietly announced today that Facebook's Chief Revenue Officer, Owen Van Natta, is leaving the company to--say it with me now--"pursue other opportunities." Van Natta was the chief architect of the Microsoft investment, which gave the company it's $15 billion valuation. On the surface, it seems like an odd time to walk away, with every street lined with gold and every rose smelling like money. Even stranger that the position isn't going to be filled.

Though on the other hand, who needs a chief revenue officer when you don't have any revenue? And, well, with the news that the sites users in the UK dropped for the first time ever last month, maybe it's a sign that the rats are starting to escape a ship moving in the wrong direction.

(news via Fake Steve)

For Sale: One Newspaper, slightly used

It's not surprising that the Albuquerque Tribune, the second paper in a two-paper town, announced that Saturday's edition will be its last. The paper has shrunk from 42,000 readers twenty years ago to under 10,000 today, a precipitous drop that would be hard to right in the current environment. What is surprising is the current offer on the table to buy the paper: just $10,000.

Yes, for less than the cost of a Toyota Yaris, you can own your own daily newspaper.

Unfortunately, you'd have to invest quite a bit in the paper, as it doesn't do its own ad sales, circulation, printing, subscriptions or any business operations. Those were run by a jointly owned corporation between the Tribune and the other paper in town, the Albuquerque Journal.

If that sounds like a bad idea to you, that's because it probably is. But it's allowed under something ironically titled the Newspaper Preservation Act, which was passed in 1970 to save newspapers, whose circulation numbers were in decline. Looking at the list of papers that operated under a joint publishing agreement that have folded, it seems like maybe thwarting anti-trust laws by essentially divvying up a local monopoly among two parties wasn't the best idea--though I'm sure the media giants at the time couldn't wait to join up.

Those that talk of legislative action to save the declining newspaper industry today would do well to consider the ramifications of their actions. In the case of the Albuquerque Tribune, it's a "public trust" now worth less than a compact car.

The Times on the future of news

(via Romenesko)

So what's wrong with the newspaper industry? The New York Times offers their analysis today, including the sobering statistic that:

Newspaper executives and analysts say that it could take five to 10 years for the industry’s finances to stabilize and that many of the papers that survive will be smaller and will practice less ambitious journalism.

It's a good overview but misses some major factors--like bad acquisitions by newspaper's parent corporations or mismanagement (or straight-up corruption) by the same--and manages to gloss over the fact that the high-point in ad revenues they keep referencing (the year 2000) was also the height of the dot-com boom, when every IPO'd dot com was taking out lavish national ads touting their bubble-fueled companies. In fact, the dot-com boom was a statistical anomaly in advertising statistics.

PS. Not sure why there's been so much Times coverage this week. They must  be doing something right.