As Recovery Dawns, Ten Tough Questions for Newspaper Publishers

by: Ken Doctor

With financial pundits increasingly calling for the recession's end and newspaper companies' having cut their way back to operation profitability, it's time to move forward.

Doing that, I suggested in my last post ("Can You Feel the Bottom"), includes damage assessment. While some companies have cut more prudently than others, we've seen major damage inflicted on once-robust news operations across the nation. The ASNE census told us we've lost something less than 8500 journalists in daily newspaper newsrooms in the last two years alone. Newsprint usage is down more than 40% in five years; we can figure at least half of that once ran news.

By my calculation, readers (print and/or online) of news from U.S. newspaper companies will see about three quarters of a million fewer stories in 2009 than they did in say, 2006, before this big round of cuts began. I got to the number starting with ASNE's census number of 8300 newsroom jobs lost in 2007-2008.

Now let's say two-thirds -- 5520 -- of those positions wrote stories, reporters, columnists, writers of various kinds. That's probably a low estimation -- there's not that many editors left, right? -- but let's be conservative. Let's say each of those 5520 writes 150 stories a year, probably conservative overall. So that gets you 828,000 stories a year. Each year. Neither written nor read.

Story count, certainly, isn't the definitive indicator of journalism change or quality, but it's a hell of a marker. Recall that as daily journalism companies scale down their presence in the local news-and-ad marketplace -- especially online -- others are scaling up, start-ups, broadcasters, public radio (new NPR launch here, new MPR Twin Cities site here), Yellow Pages companies and bloggers of various expertise.

So how do publishers assess damage? After raising the question last week, I thought I should offer some specifics. Here are nine questions publishers can ask themselves about the health of their enterprises -- and then act on the answers strategically.

  1. What's your paid daily and Sunday circulation this year? What was it in 2005? How much of that loss was really circulation you cut willingly?
  2. What's going on with your Time on Site numbers? Seventeen of 30 newspaper sites, according to Nielsen via E and P, saw declines in those numbers last month. It's well and good to talk publicly about total market reach (mass print + niche print + online), but what do you know about your real ability to engage readers for more time each day, week and month? It's not about touching readers weekly or monthly; it's about how often you touch them and how essential a part of their lives you still are.
  3. How are you measuring community connection? We used to measure it in paid copies and letters-to-the-editor. How much progress have you made in creating a new meaningful social index metric, measuring comments, user-generated submissions, sponsored community events, a new essentiality accounting.
  4. If your unique user counts are growing, how much of that is organic and how much is SEO-driven? How much of each are you converting to return customers in the second and third months? Many newspaper sites I've talked to don't have the tools to know, and that's a basic need on the web.
  5. How many advertisers, by number, do you have now? How many did you have five years ago? Revenue counts the most, of course, but greatly increasing the number of advertisers, those pesky smaller-spending SMBs, determine how much of new business you can build online.
  6. What is your percentage of business that is online-only, without a tie to print, business that truly stands on its own as a good online value? That's a hugely important number, as print value erodes, and McClatchy (NYSE:MNI) has been the most prominent company reporting it. More companies are telling us the percentage of revenues that come from digital overall, but that obscures the major point that the greatest reason for a growing digital percentage is print decline, not online growth.
  7. How much of your business is coming from selling your own products, mass print, niche print, online? Selling your own produces the highest-margin revenue, often, but with those declining time on site numbers, clearly, that's not a huge growth business.
  8. How much of your business is coming from selling other inventory or products? Ultimately, newspaper destination sites are only one, probably an increasingly smaller, play for local news companies. Yahoo (NASDAQ:YHOO) Newspaper Consortium members have tested the waters, selling local inventory, and many of them like the experience. New competitor AT&T (NYSE:T) sells a basket of local products. While some newspaper companies have embraced the reseller role, more of them will have to, and all will have to complete a revolution its local sales force make-up and pitch. Relateds: How much is each salesperson bringing in? How much are you earning from self-service products, and how much has that revenue grown? How much are you earning from self-service products? What's your margin on those compared to traditional sales?
  9. Sure, your reporters are experimenting with Twitter and Facebook, but are you salespeople using social tools to connect with, aid and sell local merchants? Do you know how to help start a Rave in your community?

Bonus 10th question, and probably the biggest for the year ahead:

  • What do your internal calculations show about what percentage of auto, real estate, recruitment and retail will come back to your company -- print and online, bundled or not -- if the recovery is for real?

Which questions would you add?