By Dan Kennedy • The press, politics, technology, culture and other passions

A terrifying story about the newspaper business

Outside Bagel World in Peabody

Outside Bagel World in Peabody

There’s an absolutely terrifying story about the newspaper business making the rounds today, and it’s not the one about print circulation falling another 10.6 percent. That’s hardly a surprise, given the continued rush to online — pushed along by papers like the Boston Globe and the Boston Herald raising the price of their print editions.

No, the truly ugly news is a story in the New York Times by Stephanie Clifford, who reports that companies increasingly see newspaper Web sites as a place for premium, special-event advertising, but not for everyday ads. For the latter, they use online networks, which cost a fraction of what newspapers charge.

According to the Audit Bureau of Circulations, the Globe’s daily circulation fell 18.4 percent, and now stands at 264,105. On Sunday, it’s fallen by 16.9 percent, to 418,529. In its heyday, the Globe’s Monday-through-Saturday circulation was more than 500,000, and on Sundays it was north of 800,000.

The Monday-through-Saturday Herald stands at 138,260, down 17.5 percent. The circulation of the Sunday Herald dropped 5 percent, to 95,635.

If you had told me five years ago what the print circulation of the Globe and the Herald would be today, I’d like to think I would have been entirely unsurprised. On the other hand, I know I would have been shocked that advertising revenues had not followed from print to online.

If the eventual end of the recession doesn’t provide some relief to the beleaguered newspaper business, you really have to wonder how this will all end.

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  1. Newshound

    This was so predictable with the price increase.

    Every time they go up on the price it is another nail in their own coffin. It is that simple. It appears they may price themselves out of business.

    A decline in circulation reduces again, the value of advertising unless they adjust the cost of advertising downwards.

    Circulation is the lifeblood of the newspaper. The Globe is looking anemic.

    Increasing the cost of circulation at the expense of reduced advertising revenue is the inverse of building and maintaining a healthy newspaper business.

    What the Globe has done to itself is like a self-injection of flesh eating disease.

  2. Newshound

    Based on what we’re seeing, I’m not wondering too much how this will end, but it is hard to believe that management seems to often do little but continue to shoot itself in the foot.

    The way things are going, I’ll be more surprised if this doesn’t end due to irretrievable damage to what once was a most valuable franchise.

    What a shame!

  3. Al

    I too, am not surprised that the circulation keeps falling with each attempt to boost revenue by price increases. Dan, didn’t you say recently that you dropped home delivery of your daily Globe after the latest round of increases? I have been able to extract continuing discounted prices for delivery based on being a fixed income household, and threatening to cancel if we have to pay the full fare for 7 day delivery out in Media Nation country.

    I’m not really surprised that ad revenues haven’t followed readers online. I feel print ads have a longer life than online ads, are less easily ignored, and may be seen at other times than the original read. Online, you may see an ad for seconds while reading an article, but that’s it, and you’re gone. It’s a different environment. In fact, I have no sense of what the advertising online is, and I’m there every day.

  4. Patricia

    Unlike its print counterpart, online advertising is freaking annoying. I just browsed through a photo essay on the 2004 World series, and each successive photo brought a new pop-under ad until I had a dozen browser “windows” open. No, I am NOT going to buy anything from Publishers’ Clearing House (irony there!) or click on anything that purports to “lower my bills,” especially if accompanied by photos of scantily dressed women. (With apologies to my LGBT friends, I prefer scantily dressed men.) I can choose to look at print ads or not, but too often in the online world, the choice is forced upon viewers, and it becomes unwelcome.

  5. rozzie02131

    I read many newspaper ads and I can sometimes remember them years later. As for web ads, sorry, but I could hardly identify any banner ad that ever appeared on, probably even while it was onscreen in front of my face.

    I never thought I would go without a daily newspaper at my doorstep, usually two. Back in 2006 when that was still true, I was paying $15 a month for the Globe and $65 a year for the Herald. Now they’ve both gone up 300% or more in 3 years. It’s amazing that anybody at all will pay that kind of price increase.

    Now I read the Globe every day via GlobeReader. There should be some kind of business model there, but I don’t see how their 2 advertisers are going to carry the Globe to online success.

    There’s no conclusion here, but I fear my lifelong newspaper habit is diverging into an unworkable future.

  6. LFNeilson

    Fire the MBA’s & lawyers and hire some ambitious kids to sell and deliver papers. Circulation is everything, and higher prices on the paper are counterproductive.

  7. scruff

    Hgher prices are needed to keep the papers afloat. Ad revenue used to outpace circ revenue by 3 -1. Now, they are even, with circulation revenue gaining quickly. Papers need circulation to be a major revenue stream, this is why the prices go up (and why it is worth it) even at the expense of circulation numbers. Don’t know if this model will sustain itself forever, but it has been working for the Globe so far. They care not so much about the loss of circulation numbers, but more about the increase in circ $$. This is one of the major reasons why they have had such a major financial turnaround this year.

  8. LFNeilson

    I still believe the bean-counters in circ. have too much sway. If you don’t have circulation numbers, you don’t have a newspaper.

  9. Newshound

    Larz – you are so correct.

    No one knew how to run a circulation department more prudently than the late Captain with his advertising: “It’s time to pay Larz” and his calendar-year subscriptions.

    Newspaper advertising is good only if saturating the target and priced economically. If it isn’t going to make merchants and retailers successful, the newspaper is going to die.

    It is amazing what Arthur and Janet will selfishly do for their own salary at the expense of ruining what was a great business franchise owned by stockholders with whom they should morally honor a fiduciary responsibility.

  10. Amusedbutinformedobserver

    Actually, LF, the bean-counters in circ. would be happier if the price was lowered, since the beans they count includes net paid circulation, not simply dollars.

    Papers are also cutting down on waste, to the point where you will find papers sold out a lot more often (and a lot earlier in the day) these days than you used to. I suspect another cut in the Globe web size is coming, since other papers have trimmed another half inch or so

  11. Newshound

    Just how does cutting down on the size of newsprint save newsprint? Sort of a rhetorical question.

    Smaller type, fewer ads, less news or no newspaper at all saves newsprint. But a larger page size with fewer pages thus the equivalent of the same square inches and weight in pounds would be neutral.

    Most double width newspaper presses are designed to handle a 70 inch web with a 22.75 cutoff which means it is most economical to print on the largest possible – and that is just what was done years ago when newspapers made a profit.

    This is the newspaper business, not the candy bar business.

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