Posted on 05/20/2018 6:49:45 AM PDT by Diana in Wisconsin
It’s with a spasm of profits.
For a preview of the newspaper industry’s coming death, turn your gaze to Colorado, where the withering and emaciated Denver Post finds itself rolling in profits.
The Post’s controlling owner, “vulture capitalist” Randall Smith, has become journalism’s No. 1 villain for having cheapened and starved not just its Denver paper but many of the titles—including the St. Paul Pioneer Press, the San Jose Mercury News and the Orange County Register—that his firm, Alden Global Capital, operates through the Digital First Media chain. At the Post, Smith’s firm cut the newsroom from 184 journalists to 99 between 2012 and 2017, Bloomberg News’ Joe Nocera writes. Over the same time, Smith’s Pottstown Mercury fell from 73 journos to 10 while its Norristown Times-Herald went 45 to 12. And the cuts just keep on coming. For newspaper lovers, the cuts have been a disaster.
Journalists and citizens have protested and rebelled against the Alden cutbacks to no effect. The Post’s editorial page editor resigned recently after writing an editorial calling on its owners to sell. The editorial page editor at the chain’s Boulder Daily Camera just got sacked for self-publishing a critique of his owners and a fund has been established to fund the journalism of Posties that have been let go. This week, employees from several of the chain’s newspapers took their complaint to Manhattan, where they demonstrated outside Smith’s offices to demand that he either invest in his papers or sell them to somebody who will.
But why on Earth should Smith sell? Alden’s newspapers recorded nearly $160 million in profits during fiscal year 2017, analyst Ken Doctor reported in a comprehensive piece recently at NeimanLab. The chain’s 17 percent operating margin makes it one of the industry’s best performers. Over the course of seven years, Alden doubled profits in its Bay Area News Group newspapers, another home to cutbacks. At the Pioneer Press, where its staff is down to 60, the paper produced a $10 million profit at a 13 percent margin.
Smith may be a rapacious fellow, but his primary crime is recognizing that print is approaching its expiration date and is acting on the fact that more value can be extracted by sucking the marrow than by investing more deeply or selling.
Allow yourself to sympathize with Smith for a moment. He’s deeply invested in a stagnant industry whose primary audience is approaching its own expiration date. Think of the Denver Post and most other newspapers as your grandfather who is on dialysis, has a pacemaker and totes an oxygen tank behind him. He looks alive, but he’s overdue. Your grandfather is a pretty good stand-in for the average newspaper subscriber, too. Habituated to his morning newspaper, he’ll resist cancelling his subscription no matter how raggedy the paper gets or how high the owners jack up the price. (Alden is among the most aggressive in boosting subscription prices, Doctor tells the Daily Beast.)
The business-school label for tactics like Alden’s, in which you get fewer customers to pay more for less, as Philip Meyer wrote in his book The Vanishing Newspaper, is “harvesting market position.” By raising prices and lowering quality, a stagnant business can rely on its most loyal customers to continue to buy the product, allowing it to squeeze and squeeze and squeeze its customers as they croak. This slow liquidation of an asset’s value, destroying even its reputation in the process, kills the product. Wherever newspapers can be found reducing page size, cutting news pages, narrowing coverage area, reducing staff, shrinking circulation area, postponing the purchase of new equipment and raising subscription prices, they are harvesting market position. Faced with two business options, earn small sums from his newspapers over an indeterminate time or cash in big all at once, perhaps hastening the end, Smith has chosen the latter.
It’s a truth universally acknowledged by those who don’t let sentiment cloud their thinking that the newspaper’s time will soon pass—except for rare titles like the New York Times and a few others that can attract national audiences. “The old model of a general-purpose newspaper fit the industrial age when advertisers needed mass audiences to sell the products of mass production. But the marketplace no longer supports the model of a few messages to many people. Now it is many messages, each to a few people,” Meyer tells me via email.
Why pin exclusive blame on Smith for the demise of the Denver Post when there’s plenty of blame to go around? In 2008, then-Detroit News reporter Charlie LeDuff spotted another villain in the rot and decay of his newspaper as it downsized to three days a week of home delivery. “The owner didn’t decide to shrink the paper. The reader decided to shrink the paper,” LeDuff said. It was readers who stopped subscribing. It was readers who stopped using newspaper classifieds. It was readers who stopped reading. Readers are the true villains in this murder mystery.
It’s not like the newspaper industry didn’t have advance warning of its demise. In 1976, long before the internet arrived, Los Angeles Times media reporter David Shaw wrote in a lengthy Page One report about the newspaper’s worsening vital signs. “Are you now holding an endangered species in your hands?” he wrote.
Why can’t the Denver Post find a Jeff Bezos to save it? Unfortunately for newspapers— and I write this as a fanatic of the medium—there aren’t enough newspaper-loving billionaires to go around. Go ahead and hate Randall Smith all you want, but do so with the understanding that, like the mortician, he’s figured out a way to make money off of death.
"By raising prices and lowering quality, a stagnant business can rely on its most loyal customers to continue to buy the product, allowing it to squeeze and squeeze and squeeze its customers as they croak. This slow liquidation of an asset’s value, destroying even its reputation in the process, kills the product. Wherever newspapers can be found reducing page size, cutting news pages, narrowing coverage area, reducing staff, shrinking circulation area, postponing the purchase of new equipment and raising subscription prices, they are harvesting market position."
Hoping my local rag dies. On the day of inauguration, it ran a huge story, on the front page and on 2-3 other pages, about the obama legacy and how much we would miss him.
I hope they lose money and go bankrupt.
Somehow missing from the article is the fact that the Denver Post is full liberal - ignoring very obvious corruption in the city, looking the other way while the corrupt and inept city council promotes sanctuary and votes to allow folks to take bodacious Obamas in the streets. They play down the fact that the police union voted “no confidence” in the corrupt black police chief appointed by the more corrupt black mayor.
The paper is a joke, and the “reporters” deserve what they have and will get.
I hope for the day when The State, Charlotte Observer, and Rock Hill Herald go away.
I’m cancelling my subscription to the Dallas Morning News first thing on Monday morning. The letters to the editor are always filled with Trump haters, but today there was a letter printed that was against Pastor Jeffress that was so vile and repulsive that it made me sick. I emailed the person in charge of letter selections with my opinion (not that he cares), but I will never buy that paper again.
The Orange County Register was a good paper before Randall Smith took over. Now it’s gotten much more liberal as well as having fewer pages and costing more. It’s also harder to find in newsracks.
Peter Boyles talks those points almost every day on am 710. The Denver Post is completely in the tank for the corrupt democrat establishment.
I hope newspapers find a way to survive. I don’t want to have to read everything on screens. I can only read screens for so long before my eyes start to hurt.
Yo, Denver Post, want to increase your readership? Print your paper on Zig-Zags.
The Rocky Mountain News was acquired By the Denver Post and now both will bite the dust.
This isn’t how a newspaper dies, it is how we don’t care for liberal propaganda and liberalism ides.
Heck, not even liberals want to read that tripe.
News outlets (CNN is a nonprint example) die when they fail to produce content that a substantial number of their base consumers want. Coupons are online now. Classifieds are online now. Weather? Online and animated.
Good coverage of local sports, local govt, community events, obituaries is what’s left. The challenge is to untangle the web of conflicts that are embedded in the relationship between ad dollars from local businesses, lawyers and healthcare providers and their corresponding political contributions. Being a good journalist is a lonely job.
The web has a huge advantage over print with its ability to link items in an article to an external website. I can’t stand “continued on page A4...” . If I don’t understand something I’m reading on a webpage, I open a new tab and Google it. Can’t do that with a newspaper.
News outlets (CNN is a nonprint example) die when they fail to produce content that a substantial number of their base consumers want. Coupons are online now. Classifieds are online now. Weather? Online and animated.
Good coverage of local sports, local govt, community events, obituaries is what’s left. The challenge is to untangle the web of conflicts that are embedded in the relationship between ad dollars from local businesses, lawyers and healthcare providers and their corresponding political contributions. Being a good journalist is a lonely job.
The web has a huge advantage over print with its ability to link items in an article to an external website. I can’t stand “continued on page A4...” . If I don’t understand something I’m reading on a webpage, I open a new tab and Google it. Can’t do that with a newspaper.
The answer to those attacking Smith is simple. Start up your own newspapers, with all the reporters and “quality” you wish to invest into them, and make gigantic profits and save the industry. Show him how it’s done.
I learned recently that Boston’s conservative paper, the Boston Herald, filed for bankruptcy earlier this year, and was sold in a bankruptcy sale.
But it’s still being published by the new owner, and Howie Carr is still writing his column.
I just love these uplifting stories, this one makes my day. Watching journalists self destruct before our very eyes bring warmth and joy and is well deserved.
Totally agree. There are lots of local and regional stories out there that people would pay to read if somebody would report on them.
Never cared for the Denver Post when I lived in Denver - I liked the Rocky Mountain News.
Want a good and profitable newspaper? Print news! That's what “reporters” and their hard nosed editors did.
Want to kill your newspaper? Print opinion purporting to be news. That's what “journalists” do. They've been killing newspapers since the late 1960’s.
Format is not the problem. School of “journalism” graduates is the problem.
I like the feel of a newspaper in my hands.
The recent move toward “advertorial” news must be a disappointment to real reporters.
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