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

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A lackluster 2011 for the Globe’s finances

Looks like it’s been a pretty lackluster 2011 so far for the Boston Globe, according to the latest financial results from the New York Times Co. Revenues at the New England Media Group, which consists of the Globe, the Worcester Telegram & Gazette and, were down 3.6 percent for the second quarter compared to 2010, and down 4.3 percent for the first six months.

That includes a 2.7 percent decline in advertising revenue for the quarter (3.8 percent for the first six months) and a 5.4 percent drop in circulation revenue for the quarter (6 percent for the first six months). Total revenue for the second quarter was reported at $102.5 million. The circulation decline suggests that the higher prices instituted for the print edition a couple of years ago have now worked their way through the system, and that revenues are sliding as the number of papers sold continues to shrink, as is the case at most daily newspapers.

Business has stabilized at the Globe — certainly compared to 2009, when the Times Co. was threatening to close the company if it couldn’t extract painful union concessions in the face of huge operating losses. But neither the Globe nor the newspaper business in general is close to being out of the woods.

Next stop is the Globe’s experiment in charging for online distribution, scheduled to be unveiled later this year. The Times itself has apparently had some success with its own pay model. The delicate state of the Globe’s finances shows how important it is that its own experiment doesn’t blow up in the lab.

Also: News business analyst Alan Mutter recently analyzed the unexpectedly steep drop in newspaper advertising revenue.

Globe reportedly on verge of deal to print Herald

It looks like folks at the Boston Globe and the New York Times Co. have decided to get smart and take some of Boston Herald owner Pat Purcell’s money rather than try to put him out of business.

According to reports, the Globe is on the verge of a deal to print and distribute the Herald in the Boston area. It’s not the first time such an arrangement has been proposed, but it’s the first time the Globe has come this close to saying yes. A trusted Media Nation source credits Globe publisher Christopher Mayer for recognizing that the Herald isn’t going away and reversing the anti-Herald stance taken by previous publishers.

The unfortunate part of this is that the Herald would have to lay off its truck drivers. But on the trauma scale, that doesn’t approach Purcell’s decision a few years ago to shut down his presses and outsource much of the printing to a Wall Street Journal plant in Chicopee.

The Globe covers the story here, and the Herald here. The Associated Press quotes yours truly.

Globe, Herald circulation continues to slide

The Boston Globe is the 25th-largest Monday-through-Friday paper and the 20th-largest Sunday paper, according to the latest figures released by the Audit Bureau of Circulations. Both the Globe and the Boston Herald continue to slide. And the Wall Street Journal enjoys the largest Monday-through-Friday circulation nationally, while the New York Times is tops on Sunday.

Locally, the most interesting news is that the Globe’s circulation has stabilized following a huge plunge between 2009 and 2010, which followed significant price increases. Those increases have reportedly improved the paper’s bottom line, but have left the Globe with a much smaller subscriber base.

The Globe’s paid Sunday circulation for the six-month period ending on March 31, 2011, was 356,652, down 22,297, or 5.9 percent, over the six-month period ending on March 31, 2010. The Monday-through-Friday picture was similar: 219,214 in the most recent reporting period, down 13,218, or 5.7 percent.

By contrast, the Globe’s circulation figures for the six months ending on March 31, 2009, were 466,661 on Sunday and 302,638 Monday through Friday, meaning that Sunday circulation last year was down 18.8 percent over the previous year, and Monday-through-Friday circulation was down 23.2 percent.

Over at One Herald Square, circulation during the past year dropped at roughly the same rate as the Globe’s. On Sunday, circulation is 87,296, a decline of 4.1 percent. The Monday-through-Friday editions averaged 123,811, down 6.6 percent. Two years ago, paid circulation at the Herald stood at 95,392 on Sunday and 150,688 Monday through Friday.

Both the Globe’s and the Herald’s circulation figures include exceedingly modest numbers for their paid electronic editions, which were folded into their total paid circulation.

Finally, the Globe reported 6.8 million “total uniques” for its website,, whereas the Herald did not report. According to, which counts unique visitors per month differently, over time has attracted an audience about two to three times larger than that of

The next big story will be what happens when the Globe begins charging for online access to most Globe content later this year. Will it slow or even reverse the decline of the print edition? Will paid electronic editions such as GlobeReader and forthcoming apps for the iPad and iPhone get a boost? How badly will the paywall hurt Web traffic? Stay tuned.

Kushner bid to buy the Globe keeps inching along

A lightly publicized effort to buy the Boston Globe from the New York Times Co. continues to inch forward.

Casey Ross, writing in the Globe, reports that businessman Aaron Kushner is prepared to offer more than $200 million for the Globe, the Telegram & Gazette of Worcester and That’s considerably more than the $35 million figure that was bandied about two summers ago, which the Times Co. ultimately chose to walk away from.

No one even knows if the Sulzberger family would consider selling the Globe at this point, and Kushner is just a guy with money. What makes his bid interesting is that he’s pulled into his group such people as former Globe publisher Ben Taylor, his cousin Stephen Taylor, a former Globe executive, and Ben Bradlee Jr., a former top editor. (The Taylors were also involved in one of the efforts to buy the Globe two years ago.)

As Ross notes, the Globe is doing better today than it was during the crash-and-burn summer of 2009, though it’s hardly out of the woods. A lot of us would welcome a return to local ownership as long as that wouldn’t presage either a wholesale dismantling or a diminution of news standards and values. Kushner sounds serious about wanting to reinvent the Globe, though I suspect he’s kidding himself if he thinks he’s got some secret formula.

Earlier this year, Katherine Ozment profiled Kushner for Boston magazine. He did not, shall we say, come across as the second coming of Gen. Charles H. Taylor. Nevertheless, this is an intriguing moment in the life of the region’s dominant media organization.

Photo via Wikimedia Commons.

A rocky launch for the Times’ paywall

The New York Times has had months to test its online paid-content system. And, as of this morning, it’s a mess.

Last night I tried logging on to the Times’ iPhone app, which, as a subscriber to the Sunday print edition, I am supposed to get for no additional charge. I entered my username and password and got a message telling me to look for a confirmation email. I did. It wasn’t there — not in my inbox and not in my spam folder. I did it again. And again this morning. No dice.

I tweeted, and Greg Reibman, publisher of GateHouse Media’s Metro Boston papers, tweeted back: “Exact same thing happened to me. @nytimes promised email confirmation that never came.”

I also got this, from @NYTdigitalsubs: “Sorry to hear you’re experiencing login issues w/ iPhone. We’re investigating. Stay tuned. Thanks for patience.”

Perfection may be unattainable, but given the resistance to paying for Internet content, the Times needed as smooth a launch as possible. So far, not so good.

On the bright side, I did have a chance to play with the Times’ new iPhone app for a few days before the paywall went up, and it is spectacular. And since the “Top News” section is free to everyone, I was able to read that this morning.

Tuesday afternoon update: @NYTdigitalsubs came up with a workaround — log in as a digital subscriber rather than as a print subscriber. That did the trick. A more complete solution is supposed to be available later today.

New York Times: Pay us less and we’ll give you more

As best as I can figure out, it will soon be cheaper to get access to all of the New York Times’ digital products and the Sunday print edition too than it will to go paperless. Let’s run down the math.

Every three months, Media Nation Central pays $97.50 for home delivery of the Sunday Times. Under the new pay scheme announced last week, that entitles us to free access to most of the Times’ electronic delivery options:, Times Reader, and apps for smartphones and tablets. (Kindle and Nook editions aren’t included in any of the just-announced options.)

On the other hand, if we don’t get the print edition at all, it will cost us $35 every four weeks for the same electronic package. That’s $113.75 every three months, or $16.25 more than getting the identical range of products plus the Sunday paper. That’s a markup of nearly 17 percent.

Now, Times executives have every incentive in the world to push the Sunday paper: it’s where most of the advertising revenue comes from. I’ve been told that the Boston Globe makes as much as two-thirds of its money from the Sunday paper. It’s probably about the same at the Times.

Still, it seems odd that the Times has deliberately set up a system under which you get more if you pay less — although, granted, I’m not factoring in the cost of tips, which should bring the price of paper-plus-electronic to somewhat more than electronic-only.

Thoughts on the N.Y. Times’ modified limited paywall

Earlier today, Lois Beckett of the Nieman Journalism Lab asked me and a number of other media observers to write brief commentaries on the New York Times’ modified limited paywall, which was announced this morning. She got some interesting responses, ranging from Steve Buttry (“ridiculous”) to Amy Webb (“a wise move”). Here’s what I wrote:

The New York Times is taking a smart and nuanced approach. Times executives have struck an interesting balance between charging heavy users for access while remaining part of the free online conversation that’s become such an important part of the media ecosystem. I have no idea whether a limit of 20 free articles a month is too little, too much or just right, but I assume they’ll adjust in response to what the market tells them.

I was also pleased to see that print subscribers, including Sunday-only customers (like our family), will have free access to most of the Times’ online platforms. The Sunday paper remains a vital source of revenue for the Times, and it makes sense for Arthur Sulzberger, Janet Robinson and company to do whatever they can to preserve that money machine.

That said, the Times will no longer be able to make excuses for glitchy software and access problems. I’m reasonably happy with the Times iPhone app, but my wife reads the Times on her iPad, and it’s buggy. You can get away with that when it’s free. But once you put a price tag on your product, you’ve got to guarantee that it works — and be responsive to consumer complaints when it doesn’t. That’s especially true given that the Times is charging more for electronic access than many had predicted.

The news business may be watching this very closely to see what lessons can be drawn, but I’m not sure that there will be many, because the Times is such a unique product. For many people, the Times may be the one “newspaper” for which they’re willing to pay to read online. Rather than paving the way for other newspapers, the Times’ paywall may instead lead to a further stratification of the news business, as executives at other papers find themselves unable to emulate the Times’ success in persuading customers to pay for electronic access.

The announcement was pretty much along the lines of what the Times said was coming months ago, though the fees for non-print subscribers ($15 to $35 every four weeks depending on your platforms) are higher than some had expected. There are also all kinds of exceptions regarding Twitter and Facebook access, top news on smartphones and the like.

The plan is very different from one that will be unveiled later this year by a sister Times Co. property, the Boston Globe, which announced last fall that it would divide its Web offerings into a free (filled mostly with content that doesn’t appear in the Globe) and a paid

Last October, I interviewed Globe publisher Chris Mayer about his paywall plans.

Stopping the presses in Nashua

Forty people will lose their jobs when the Nashua Telegraph’s printing presses stop rolling on Jan. 2. The 20,000-circulation daily (27,000 on Sunday) will be printed at the Portsmouth Herald, according to publisher Terry Williams, who described the move as “a very difficult call.”

Amazon’s move is a boon for digital newspapers

The future of digital newspapers just got a lot more interesting.

The New York Times reports that Amazon has decided to let newspaper and magazine publishers have a 70 percent cut of Kindle revenues, a substantial increase over the current 30 percent. In order to qualify, though, those publishers will have to agree to let Amazon sell subscriptions to anyone who has a device with Kindle software installed on it. (Unlike books, you had to have Amazon’s Kindle hardware device in order to download newspapers and magazines.)

When that happens, you’ll be able to read the Kindle editions of your favorite newspapers and magazines on an iPad, a smartphone or the forthcoming Google tablets.

Given the halting nature of newspaper and magazine rollouts for the iPad (stemming in large measure from a dispute between Apple and publishers over who gets to see customer data), this is a boon on two levels. It gives non-Kindle tablet owners a viable workaround until Apple and the publishers can get their act together — and it provides Apple with a huge incentive to make that happen, along with some rare leverage for the publishers.

Meanwhile, John Ellis points to an analysis showing that paid online distribution may have a future: at Rupert Murdoch’s Times of London, online readership is down but revenues are way up since the Times erected a pay wall earlier this year.

Earlier: “The resurrection will be slightly delayed.”

Reflecting on the latest circulation figures

In Japan, advertising accounts for just 35 percent of newspaper revenue. In Britain, it’s 50 percent. And in the United States, ads have traditionally amounted to a whopping 87 percent of newspaper income. That’s why it can truly be said that, in the U.S., newspapers have always given away the news, charging only for paper and delivery.

These days we pay for computers and broadband access while getting the news for free — same as it ever was. That is among the most important explanations for why news organizations are going to have a difficult time persuading more than a handful of readers to pay for online access. I wish them well. But the challenge is enormous.

One thing some readers will continue to pay for is the convenience of print. (Spare me your nostalgia for the romance of print. Print persists for one reason: it’s still more ergonomically friendly than any electronic version. Someday that will change.)

After yesterday’s newspaper circulation figures were released, showing a continued but slowing decline in print sales industry-wide, Boston Globe publisher Chris Mayer issued a memo — a copy of which was obtained by Media Nation — attributing the Globe’s continued slide to last year’s decision to raise the price to as much as the market would bear. (Here is the Boston Herald’s take.)

The idea is that there’s a sweet spot. Up to a point, you can raise prices and make more money, even if the total number of print readers declines. Somewhere, though, there’s a top to the curve, and the challenge is to find the top and not raise prices so much that revenues start to fall. The result, unfortunately, is that you end up with a niche product for an elite readership. But it’s either that or die.

And here’s a good piece of news. There’s also a sizable subset of readers who will pay for electronic editions like Times Reader and GlobeReader, which are cheaper than print but more convenient than newspaper websites that keep you chained to your desk. Given that iPad editions have barely kicked into gear, that’s a promising sign.

The full text of Mayer’s memo follows.

Dear Colleagues,

Earlier today the Audit Bureau of Circulations issued their Fas-Fax report for the six months ending September 30th. The Globe has shown year-over-year declines in line with our expectations, as a result of our circulation and pricing strategy instituted last summer.

The good news is the rate of circulation decline has slowed as we cycle through the impact of the price increases. One indicator is the comparison between September’s report and March’s report. Viewed this way, the declines are 2.8% for Sunday and 4.2% for daily. These are encouraging trends for our business and in line with others in our industry.

The past few months has also seen continued excellence in our reporting and positive contributions to the community. Our Spotlight Team investigation of patronage in the state’s probation department; our sensitive series of stories on bullying; the amazing coverage of the Amy Bishop case; coverage of the earthquake and aftermath in Haiti and its impact in Boston; and our current coverage of the political races are just a few examples of the important journalism we’re delivering.

The Globe’s circulation, now at 368,000 on Sunday and 223,000 daily, still makes us the largest newspaper in New England by a wide margin. The year-over-year decreases of about 15.7% on Sunday and 12.0% daily were expected and budgeted.  To offer some context, we raised prices last summer in most areas by 30% to 50% to grow circulation revenue and stabilize the business.

Of course, circulation numbers are not the end of the story. Print and online media work in concert with one another to build audience. It should be noted then that in terms of readership, during an average week, the Sunday Globe, the daily Globe and together will reach 51% of all adults in the metro Boston area.  It will also be reported in Monday’s Fas-Fax that’s local audience grew by 2.9 %.

The recently announced two-brand digital strategy is now officially under way and we are developing launch plans for our new subscription-based Web site, and the next generation And, watch forperiodic launches of digital products in the upcoming months.

So, as we look ahead we will continue to execute on our strategy, building on the strong foundation of quality journalism, original content, broad audience reach, higher reader engagement, advertising effectiveness, and strong connection with the community that is reflected by, and results in, our more than 50% of the market.

We can all share a sense of optimism and purpose as we focus on our future success.

— Chris

Photo via Wikimedia Commons.

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