Our man on the ground Kevin Anderson has taken an in-depth look at some US newspapers, to determine what – if any – criteria will determine whether a particular publisher’s news outlet will survive.
Newspapers seem to have hit another rough patch, with the Los Angeles Times and other Tribune newspapers, as well as the Boston Globe, all announcing job cuts. Even my group, Gannett, has seen additional cuts, and after surviving five rounds of cuts, my position as a regional executive editor was eliminated in early October.
As an industry, we are already seeing a last wave of consolidation in local and regional media as locally-focused media companies seek the scale to compete for digital advertising. As Gannett continues to cut costs, it is also in a buying mood, purchasing 15 dailies for $280 m in October.
However, the question remains whether they can buy their way to the scale needed to compete with Google and Facebook. At the moment, the scale gap is widening between the digital giants and traditional media.
So, will newspapers survive? I think that answer is a qualified yes, but only newspapers meeting certain criteria will survive what I believe will be a pretty bloody shakeout in the coming years.
In the US, the big city metros focused solely on their cities such as the LA Times, the Chicago Tribune and the Baltimore Sun have all come under tremendous pressure, and Tribune Publishing, which owns the LA Times and the Chicago Tribune, seems to be in utter disarray.
Much of the analysis of this latest wave of change is focused on big papers, leaving smaller local newspaper ecosystems in the US out of the discussion. Despite my position disappearing, I actually think that smaller, locally-focused newspapers in economically stable or growing communities in the US have a good chance of surviving over the near future. Distances in the US mean that small local newspapers, often owned by local publishers or in small regional groups, still have some advantages.
Two of my newspapers – The Sheboygan Press and the Herald-Times-Reporter – saw both top-line revenue growth and increase in audience reach during my first year. The HTR, as it is known, actually saw reach grow from 84 percent to 87 percent. The HTR had triple digit digital revenue growth in the second quarter of 2014, and 23 percent of its revenue already came from digital before that stellar quarter.
In the next nine months, they continued to eke out revenue growth, despite the challenge of editorial and commercial team reorganisations that saw a 20 percent cut in newsroom headcount and successive waves of budget cuts that included additional payroll and position cuts, a hiring freeze and an early retirement programme.
In communities like Sheboygan and Manitowoc, Wisconsin, I think there is a future for newspapers, albeit one that will have to have a strong digital presence. Our audience growth was built on strong digital performance, and I found out a few weeks before my position was eliminated that Sheboygan has one of the highest per capita tablet audiences of any Gannett publication.
The “moat around local news”
While I’d love to take all of the credit for the success of those two newspapers, I think there were some unique characteristics that explain their success beyond solid editorial and commercial management.
For one, neither paper had local TV competition that provided meaningful local coverage, which is a huge issue. Local TV competition is one reason why big city metros are under a lot of market pressure.
Many debates about the future of journalism focus on the dramatic increase in choice that people have in terms of new and information sources. But in towns and small communities like these – Sheboygan has a population of just under 50,000 and Manitowoc a population of about 35,000 – digital services and apps haven’t dramatically expanded the news offerings.
We were trialling local calendar apps like Eventful, but in Sheboygan, the app defaults to Milwaukee, the largest city in Wisconsin more than an hour to the south. Truly local events were sparse and would have required us to add them to the service on our own.
There were local pages on Facebook that provided some events information, but they were fragmented. Community institutions frequently told me that they wanted a one-stop shop for events but lacked the resources. The newspaper and our digital platforms could have been that place, driving traffic and engagement and providing a valued community service, but it wasn’t seen as a strategic priority because the larger markets in the group were super-served by mobile apps.
In many ways, I would have to agree with Mike Jenner, the Houston Harte chair in journalism at the University of Missouri, who told Al Jazeera last year, “There’s almost a moat around local news.” The internet hasn’t completely rendered geography irrelevant in these smaller communities.
Two of the four newspapers that I was managing, the HTR and the Fond du Lac Reporter had audience reach across daily and non-daily publications and digital platforms in the high 80 percent range. This is even higher than National Newspaper Association research in 2013 that found that almost two-thirds of residents in small towns read their local newspapers at least once a week.
Successful communities support successful papers
Of course, there is another criteria. Successful communities support successful newspapers. Sheboygan County, where the Sheboygan Press is located, had the third lowest unemployment of any county in the state of Wisconsin in September, and unemployment hasn’t been this low since December 2000 before the Dot.com crash recession.
With that kind of stellar economic growth, it was much easier to grow the business.
Many of these small, community newspapers are owned by families with local connections to the community. They are willing to accept a flatter business model than many of the larger corporate groups and can cope with slower growth.
As Doug Crews, executive director of the Missouri Press Association told the Gateway Journalism Review, “The smaller newspapers simply have learned to operate in a smaller universe, so their highs are not as high, their lows are not as low, as larger newspapers.”
It is not the kind of sexy business that attracts media moguls, but it is a sustainable model that will support local, community journalism as long as there are thriving small communities to support them.
Smaller markets are different. They still have a sense of place and still value local information. They are often underserved by national news outlets and new digital services.
Chains in the US are starting to sell smaller local newspapers back to local owners, and we’ll see more of that as they decide they can scale faster and more easily provide a national footprint by buying larger regional papers and selling smaller properties.