Arthur and Janet’s $70 million question

Here’s the latest edition of On the Record, an e-mail circulated to employees of the New York Times Co. by chairman Arthur Sulzberger Jr. and president Janet Robinson. A copy was obtained by Media Nation. Enjoy.

On the Record … From Arthur & Janet

Vol. 3 Our Circulation Strategy

September 14, 2009

To Our Colleagues,

A reader recently wrote, “I feel that the importance of The Times is so great that I would pay $70 million for access to the most important paper in the free world.”

We appreciate the thought but while things are difficult for newspapers, they haven’t reached that point.

As our advertising revenues have declined, we have asked our readers to bear more of the cost of our journalism, as many other newspapers have done with their readers. They have demonstrated a willingness to do so. As a result, in the first half of this year we have seen gains in circulation revenues at The Times, the Globe, the Sarasota Herald-Tribune, the Santa Rosa Press Democrat and some of our other regional newspapers. In this issue of On the Record, we’ll talk about our circulation strategy and how it has improved our financial results.

Let’s start with our underlying premise. We believe that we provide very high-quality news, information and entertainment to our readers. We also believe that our premium quality journalism warrants a premium price. This is why we have experimented in the past with online subscription models. It’s also why we continue to explore ways to derive more revenue from our digital content than we get from the advertising and other secondary revenue streams we have today. We plan to discuss that in a future issue of On the Record.

Today circulation revenues make up a greater percentage of the Company’s revenues than they did in the past. Five years ago, advertising accounted for 67 percent of our total revenues and circulation made up 27 percent. In the second quarter of this year, advertising totaled 54 percent of our revenues and circulation was 39 percent. Circulation revenues have grown to the point that last year they were the highest they have been in our history.

We don’t mean to suggest that there have not been any cancellations or that circulation volume hasn’t declined. It has. But there have been far fewer cancellations from price increases than we expected at both The Times and the Globe. The reader retention rates for The Times and the Globe are enviable — for subscribers of two years or more, the rate is roughly 90 percent for both papers. In fact, The Times has more than 830,000 readers who have subscribed for two years or more, up from 650,000 in 2000.

Some of the volume declines at our newspapers are attributable to our deliberate strategy of focusing on individual readers who pay to get their paper rather than discounted copies, such as those distributed at hotels, conventions and other venues. Advertisers value these individual readers since they are deeply engaged with our newspapers.

Why do readers continue to embrace print? The reason newspapers have endured for more than 400 years is because they work. People understand how newspapers are organized — if a story is above the fold, it’s more important than below the fold. If it appears on the front page, it’s more newsworthy than one inside the paper. Readers enjoy the serendipity of finding something new that they didn’t realize they were interested in but discovered in the pages of their paper. Newspapers are portable. They offer a point in time assessment of the news.

In order to get The Times in the hands of even more readers, we are working with organizations across the country to print and distribute the paper. Most recently we announced a new agreement to print The Times in Nashville, enabling us to expand newsstand and home delivery to readers in the area and to better serve our current readers in Tennessee, northern Alabama, northern Mississippi, eastern Arkansas and western Kentucky. Today The Times is printed at 26 locations across North America.

We expect the print editions of The Times, the Globe and our regional newspapers will be around for years to come. But we are a news company, not a newspaper company. We are committed to offering our consumers our content wherever and whenever they want it and even in ways they may not have envisioned — in print or online — wired or mobile — in text, graphics, audio, video or even live events. Because of our high-quality journalism, we have very powerful and trusted brands that attract educated, affluent and influential audiences. These audiences are a true competitive advantage as we move into an increasingly digital world.

We hope this is helpful in understanding our circulation strategy. If you have any questions on this or other issues, please send us an e-mail at: arthur_and_janet@nytimes.com.

Arthur & Janet

A landmark in database reporting

Times_map_20090914
The Times' Google map of Massachusetts water facilities

Every editor in the United States today should be poring over the database that the New York Times assembled — and put online — to accompany its horrifying story on the disastrous state of our public water supplies.

Good as the Times story is, the paper’s decision to go open source with its data is what really makes this stand out. Searchable and state and by zip code, you can look up water facilities and their inspection records in recent years. If I were an editor, I’d want to make sure I got to the bottom of every one of those inspection reports before a citizen journalist could beat me to it.

In the Times story, by Charles Duhigg, we learn about the family of Jennifer Hall-Massey. She, her husband and their two boys live near Charleston, W. Va., where coal companies have so polluted the water supply that people’s teeth are wearing away and simple exposure causes painful skin rashes. Hall-Massey blames a number of deaths and illnesses on the water supply as well.

My former Phoenix colleague Kristen Lombardi has done some groundbreaking reporting on coal and the environment for the Center for Public Integrity. Highly recommended.

Water is one of the great untold stories in environmental journalism. I spent a good part of the 1980s covering the Woburn toxic-waste case, made famous in Jonathan Harr’s book “A Civil Action” and a subsequent movie.

Unfortunately, the families whose children suffered from leukemia and other health problems were not able to prove their case, and ended up reaching an unsatisfying settlement with one of the suspected polluters, W.R. Grace.

Because of Woburn and Love Canal, water was a big story in the late 1970s and ’80s. It’s time for it to take its rightful place again. The Times’ package should be just the beginning. Fortunately, it has provided the tools necessary for every news organization to find out what’s happening locally.

Covering the Annie Le tragedy

annie_le_20090914The discovery of a body believed to be that of missing Yale student Annie Le occasions a check-in on one of the more interesting non-profit online news ventures — the New Haven Independent.

Both the Independent and the city’s daily newspaper, the New Haven Register, lead with extensive coverage. The Register’s story, though, includes not a single link, either to its past coverage or to other resources. The Independent, on the other hand, features:

  • A link to a story Le wrote for a campus magazine earlier this year (above). The sadly ironic subject: how Yale students could protect themselves from crime.
  • A link to Le’s Facebook profile (protected, and thus of limited value).
  • Links to previous stories, including one by an affiliate site, CT News Junkie.
  • Videos of statements given yesterday by New Haven assistant police chief Pete Reichard and Yale president Richard Levin.

In addition, there are 13 comments appended to the Independent’s story and nine to the Register’s. I can’t say that either comment thread adds to anyone’s understanding of this tragedy, but comments are an important part of creating a community.

Both outlets did a good job with the basic journalism. The Independent, though, was much more effective at making its story more than that.

Earlier: “Non-profit journalism in New Haven” (video).

The so-called free market for food

Jeff Jacoby writes in today’s Boston Globe:

[N]ot even Ted Kennedy would have suggested that Washington nationalize US food production or overhaul the clothing industry. It is precisely because food and clothing are seen as commodities, because we do leave their availability to the market, that they can be had in such abundance and diversity.

From the New York Times, Nov. 9, 2005:

Even as the Bush administration tries to persuade member nations of the World Trade Organization that it is serious about trimming agricultural subsidies, federal spending on farm payments is closing in on the record of $22.9 billion set in 2000, when the Asian financial crisis caused American exports to fall and crop prices to sink, pushing the Midwest farm belt into recession.

If export sales stay weak, this year’s subsidies could hit a new record. Just last week the United States Agriculture Department raised its projection of payments to farmers by $1.3 billion, to $22.7 billion. In 2004, the subsidies were only $13.3 billion.

Michael Pollan, author of “The Omnivore’s Dilemma,” writing in the Times on Sept. 9, 2009:

[F]ood system reform has not figured in the national conversation about health care reform. And so the government is poised to go on encouraging America’s fast-food diet with its farm policies even as it takes on added responsibilities for covering the medical costs of that diet. To put it more bluntly, the government is putting itself in the uncomfortable position of subsidizing both the costs of treating Type 2 diabetes and the consumption of high-fructose corn syrup.

If Jacoby had wanted to argue against government health-care reform, he could have done it quite easily by using the food industry as his prime example. As Pollan and others have shown, we are awash in a sea of cheap, federally subsidized corn that has been transformed into oceans of sweet soda, unhealthy beef (corn is toxic to cattle) and a host of other dubious products that barely deserve to be called food.

Do we want the government to do to health care what it’s done to the food supply? It’s not an argument I would make. But Jacoby could have made it, and he’d have produced a much more valid column if he had.

Odd station out?

Let me see if I’ve got this straight. According to the Boston Globe’s Chad Finn, ESPN’s ratings- and signal-challenged Boston radio station, WAMG (AM 890), will shut down just as ESPN’s Boston Web site is making its debut.

But sports-radio ratings leader WEEI (AM 850), locked in a war with new sports station WBZ-FM (98.5 FM), will start carrying some of ESPN’s programming. Then, a few months from now, WEEI will match ‘BZ’s far better signal by moving to the FM dial. That, in turn, will open the way for ESPN to start a new Boston station at AM 850.

So ESPN goes from being number two in a two-station battle to number three in a three-station battle. It will have a better signal than it does now, but it will still be pretty lousy. And it will continue to deal with the challenge of not having any local professional games to carry.

Wow. Doesn’t sound smart to me.

On “Beat the Press” yesterday, ironically, we talked about how smart the folks are at ESPN, which is marking its 30th anniversary.

Earlier: “Optimism amid the newspaper gloom.”

Talking about journalism and new media

Next Wednesday, Sept. 16, I’ll be moderating an all-star panel on journalism, blogging and social media. Titled “Are Blogs and Twitter Improving the Dissemination of Information and News?,” the panel will feature:

With that many bright minds in the room, I may have to wear shades.

The program will take place from 6 to 8 p.m. at the Vilna Shul, located on Beacon Hill at 18 Phillips St. Please join us.

All-important food-related update: Doug Levin, who’s organizing the event, asks that you send an e-mail to doug {at} vilnashul {dot} com if you’re planning on coming so that he can order enough food. If you’re not looking to eat, you could show up at about 6:45, when the program will begin.

The latest on the Times Co. and the Globe

New York Times Co. chairman Arthur Sulzberger Jr. and president Janet Robinson met with employees of the Boston Globe yesterday. And it appears there is nothing new to report.

According to stories in the Times, the Globe and the Boston Herald, Sulzberger said the Globe is still for sale, though an improving financial picture means there’s no hurry.

It also sounds like folks at the Globe remain angry over the way they were treated earlier this year, when the Times Co. threatened to close the paper if the unions failed to approve $20 million in concessions.

I could go on. But you get the idea. Ralph Ranalli has more at BeatthePress.org.