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.
Hey! They only want to change the world, not do actual reporting. Besides being work, reality interferes with how fast the world changes, and in what direction.
If the papers disappear what will I line my birdcage with? How will I keep oil drips off the garage floor?
Ping to you, sir.
“This isn’t how a newspaper dies, it is how we don’t care for liberal propaganda and liberalism ideas. Heck, not even liberals want to read that tripe.”
That was my take, too. As usual, the 800# Gorilla in the room (Non-Stop Socialism) is ignored...
I DID get a kick out of how this guy is wringing every last dime out of this paper and others, though. Justice served via Capitalism!
I have a conservative friend who takes this paper. He hates it and complains about everything in it, but he can’t stop his habit of reading it in the morning.
It’s nuts, but he is an addictive personality in other ways also.
Just the fact we’re talking about this on the Free Republic web site explains why newspapers are dying: they can’t keep up with the news cycle. And has gotten worse with the rise of social media on cellphones.
They don't have real reporters working for them any longer any longer. Just news aggregators from some national news service.
I haven't touched a newspaper in over a dozen years. Filthy newsprint ink anyway.
I stopped reading my local paper in Arizona before I retired to Florida when I realized I was reading stories that I had read on the internet days before. What's "news" about that?
Since moving to Florida, I don't keep up with local news, just national news and politics.
I get most of that from FR and the Drudge Report links.
“...I don’t keep up with local news, just national news and politics.”
I’m the opposite! I WANT local news more than National News - unless there’s a Natural Disaster that’s going to impact me in the long run, or course!
I’m as tired of the daily Trump-Bashing as I was of the daily Butt-Kissing for 0bama.
The National news outlets are worthless, agenda-driven shysters, IMHO.
Ping.
The News, founded in 1859, was Colorado's oldest, and somewhat conservative paper.
The Post celebrated their victory by veering to the left, abandoning any hope of capturing the readers of the defunct News. That sealed their fate. I'm surprised they lasted this long and will be glad to see them go out of business.
Perhaps the News will rise again.
“”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.”
Sounds like what Comcast,AT&T other cable providers and satellite providers of Television have been doing for years.
Lowering the quality, pushing liberal stuff and raising their monthly bills.
People with a half of a functioning brain have been cutting their tv cable or satellite service at an increasing rate for over a year.
Newspapers, cable and/or satellite tv service are worthless in today’s world and an expensive bad habit feeding the Deep State which controls our media.
The anti-conservative bias of the dailies hasn’t helped them retain subscribers, but the main reason for their demise is the loss of advertising revenue because of competition from the Internet. Plus, many of them had bloated staffs, and the fact that they can still put out a (slimmed-down) product with a much smaller work force shows just how bloated they were.
Sweet Justice served via Capitalism!
“The paper is a joke, and the “reporters” deserve what they have and will get.”
I’m not aware of any papers that aren’t liberal fishwraps and deserve death. I used to read 4 papers a day but gave that up a long time ago. They suck. I’ll buy one rarely just to have fire starter available for my grill.
That’s my problem. I cancelled it once and then got it back because of my 30 year habit, but this is the last straw for me. It’s nothing but reprints of articles from the NYT and W Post and anti Trump letters. I like the local news section and the busniss section, but I’m giving up my habit for good.
not to mention that the dying Denver Post is little more than yet another outlet for the leftist fake stream media anti-Trump propaganda, filled with lying garbage from AP, McClatchy, WaPoo, and NYslimes, containing close to zero local news, and chock-a-block with big colorful ads for pot stores ...
My 90 year old father will get out in traffic and drive to get a USA Today, every day. He gets the Milwaukee Journal in a subscription deal that gives him full digital access, and has iPad and laptops galore, yet never reads a paper that is not in the physical form of...paper. My in-laws, of the same age, read their paper over and over again until the folds are creases about to wear through.
That is what’s left of the newspaper business - the dying audience that spent so long in their audience that they cannot leave. What is that, those presently 78+?
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