I’m now hearing some gut-churning numbers from a reliable source about the Boston Globe’s advertising revenue. It will be fascinating to see the first-quarter financials for the New England News Group when the New York Times Co. files its next report with the SEC.
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I’ve often heard it mentioned that classified ads were the goose laying the golden eggs for newspapers, and that Craigslist took a nuclear warhead to that particular duck hunt.But now that I’ve lived out in Rochester for a while, I’ve noticed that the Craigslist sub-sites for all the central-NY cities (i.e. basically everything between Albany and Buffalo) are pale, pale imitations of the Boston Craigslist sub-site. The pickings are slim and they’re usually not very good quality either. Whereas on Boston, you can literally find just about anything, and if you can afford to wait perhaps a week you’ll find it at the price you want.I wonder if tech-savvy cities like Boston, San Francisco, New York, etc have had a greater “Craigslist Effect” than smaller cities?Of course, this alone doesn’t account for the woes of the Globe, not by a long shot.Speaking of massively declining ad revenue, here’s the $64 million dollar question: assuming the decline is real, is it because the market won’t support it or because the Globe is doing “something wrong”? By which I mean either it’s got bad salespeople, bad ad rates, a poor image in the eyes of advertisers, etc.I could see it being the Globe’s “fault” to not adapt to a changing marketplace, but then again, the two dominant industries in Boston right now are health care and higher education: two industries that typically don’t spend as much on marketing as most major for-profit industries do.That said, it does seem odd that a paper with revenues of $524 million can’t break even. Maybe the Red Sox have a backroom deal where all that money is going to pay for Dice-K? Oh my, wouldn’t that be a truly delicious scandal for the Herald to run with? I know it’s almost certainly not true, but I can’t wipe this feral grin off my face regardless. 🙂
There are many valid points and questions that have been raised on this blog regarding the business model that just can’t hold up to current economics and maybe, too, the long term threat of the Internet and other popular alternative forms of communication.Overlying the long-term prospects of newspapers is the question if newsprint will continue to be used to disseminate news and advertising.The Boston Globe model also could need serious attention to concerns raised by Aaron about advertising sales people and rates. Tony, too, makes valid points in questioning the productivity of Globe employees for the money spent in comparing it to GateHouse.Ryan I think is validly skeptical about the honesty, saying the NYT management are either liars or grossly inept. I think it is a case of both, if not outright lies, at least deceitful. It should have been better managed going back many years ago. As far as its honesty, it very well could have a buyer or buying group with which it is negotiating and bringing down union contracts is a stumbling block. If the union gives in to the NYT demands maybe and the Globe could then be salable as a going concern, and maybe even salvageable. But, the question will remain: Is the Globe a cigar butt?
The huge losses in classified ads are because real estate, employment and automotive ads are counted as classified, all at a premium rate, much higher than ROP. Sure, the Globe also had line classifieds, but it’s those classified display ads that have really hurt. Think how many pages of help wanted ads they used to have. And it’s not just Craigslist to blame. It’s stagnant markets. Even if it’s a cyclical dip, the paper still has overhead it has to carry — or dump. The problem there is that it’s losing editorial quality, which has been a hallmark. I still blame NY for taking on too much debt.zzzzzzz
The NYT debt is a fact of life for The Globe.The declining content, both news and editorial, is more subjective, but still just as real.It is WHAT The Globe does to assure its survival that is important, no who is to blame.If what they are doing isn’t working and the people who are doing it are not succeeding, it makes sense that changes need to be made.I think The Globe, as an asset, being sold at a fire-sale or bankruptcy price is a real possibility. That may be the ultimate change, and possibly the best.