As Newspapers Fall, Some of Their Websites Soar
Major trends we’ve been plotting are accelerating during this economic downturn. Print newspapers and magazines continue to announce circulation declines, revenue losses, increasing newsprint costs, decreasing stock value and loss of market cap. It’s bad, bad, bad.
The Orange Country Register is laying off another 110 staffers this week. “This isn’t necessarily just to improve profitability, we have to become a different kind of company,” Publisher Terry Horne told Editor & Publisher. “We will be more focused on (i)nteractive…”
Time Inc. is laying off 600 and instituting a “major” reorg. Wenner Media (Rolling Stone and Us) is cutting staff. Layoffs at Business Week are rumored to be on the way soon.
The Christian Science Monitor, for a century a well-respected newspaper, is abandoning print next year to go all digital. It’s the best-known paper to go that route to date, but if you’re a betting person, you can lay money that soon there be more — many more. Internet pioneer Marc Andreessen was asked by Portfolio what he would do if he ran, say, The New York Times:
“Shut off the print edition right now. You’ve got to play offense. You’ve got to do what Intel did in ’85 when it was getting killed by the Japanese in memory chips, which was its dominant business. And it famously killed the business—shut it off and focused on its much smaller business, microprocessors, because that was going to be the market of the future. And the minute Intel got out of playing defense and into playing offense, its future was secure. The newspaper companies have to do exactly the same thing.
“The financial markets have discounted forward to the terminal conclusion for newspapers, which is basically bankruptcy. So at this point, if you’re one of these major newspapers and you shut off the printing press, your stock price would probably go up, despite the fact that you would lose 90 percent of your revenue. Then you play offense. And guess what? You’re an internet company.”
So, let’s look at the other trendline in this transitional industry, the one headed north instead of south. Deutsche Bank analyst David T. Clark released the top ten U.S. “newspaper” websites in terms of how fast they are extending their audience reach as of September 2008:
Annual Percent Growth — September 2008
- San Francisco Chronicle: 23.7
- Rockford (Ill.) Register-Star: 23.4
- Macon (Ga.) Telegraph: 23.4
- The Boston Globe: 20.1
- Austin American-Statesman: 19.4
- The Atlanta Journal-Constitution: 19.4
- The San Diego Union-Tribune: 17.7
- Athens (Ga.) Banner-Herald: 15.8
- The Arizona Republic: 15.8
- Wilmington (N.C.) Star-News: 15.5
These are the guys who are most rapidly applying resources to the digital business model that represents their only hope for a future. There will be winners and losers. Those who don’t hesitate but move away from print and aggressively online are the best candidates for survival, at least with some semblance of brand continuity and corporate governance.
As for the rest, they will be found in a digital morgue maintained by Google.
In addition to serving as a BNET Media analyst/blogger, David Weir is a veteran journalist and the author of several books. Weir is a co-founder and vice-president of the Center for Investigative Reporting, as well as an editorial board member of The Nation.
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