With circulations spiraling downward, advertising revenues plummeting, and pink slips skyrocketing, the newspaper business is in trouble. Can our local papers survive?
By Bryan McGonigle
Peter Freysinger walks along the newsstand inside a Haverhill convenience store on a damp, cloudy Sunday, taking a quick visual inventory of the day’s headlines on the covers of The Boston Globe, The Boston Herald, and The Eagle-Tribune of North Andover. There are still plenty of copies of all three on the shelf; a few years ago, this would have been a strange sight for a Sunday afternoon.
“Guess I’ll go with the Trib,” Freysinger says as he grabs a copy of The Eagle-Tribune, laughing slightly as if he were doing something peculiar that needed explaining. “It feels kind of weird buying a newspaper, but the Internet’s down at my place.”
A few towns away, Jason Vaughn, a young professional living in a roomy seaside townhouse near Hampton Beach, New Hampshire, relaxes in the little time he has away from his high-pressure job as an account executive for an automotive marketing firm. Having lived in various places around the Bay State, he confesses to not reading any newspapers-local or regional-on a regular basis. “Never do,” he writes in a text message, adding that he gets all his news from Yahoo while checking email.
Freysinger’s observation and Vaughn’s unapologetic abandonment of traditional news media reflect an increasingly glaring reality in the industry: newspapers are in trouble and the broadsheets based here on the North Shore are no exception.
Bad news in circulation is bad news for advertising. The Newspaper Association of America recently reported that in 2008, total US newspaper print advertising revenue decreased about 18 percent from the year before, down to under $35 billion. Ten years earlier in 1998, advertising revenue was up almost seven percent from the year before.
Lou Ureneck, chairman of Boston University’s journalism department, says that in addition to the current recession drying up advertising revenues, newspapers face a structural challenge as advertising moves to the Internet. “Newspapers earn a much lower profit margin on the Internet,” Ureneck says. “There’s more competition, more advertising stock. Where the supply outstrips the demand, price goes down.”
Last year, Eagle-Tribune Publishing Co.-comprised of The Eagle-Tribune, The Salem News, The Daily News of Newburyport, Gloucester Daily Times, and several local weekly newspapers-announced it was laying off 52 of its roughly 750 employees. The Boston Globe recently had a highly publicized series of union negotiations, demanding $20 million in spending cuts after its parent company, The New York Times Company, threatened to shut the paper down.
The situation has even grabbed the attention of Capitol Hill. In May, Massachusetts Senator John Kerry, chairman of the Senate Commerce Subcommittee on Communications, Technology, and the Internet, addressed a Senate hearing on the future of journalism and called newspapers an “endangered species.”
“These are the stark numbers that newspapers face,” Kerry said in his address. “We’re here today to talk not only about the conditions that have led to these jolting statistics, but about the path that lies ahead for news delivery, and how during a time of great creative destruction within the market for news delivery we might preserve the core societal function that is served by an independent and diverse news media.”
Colette Loux has lived in Salem all her life. She attended Salem High School and then Salem State College. She taught figure skating locally for years. She and her husband Joseph bought a home in Salem and are raising their young daughter Olivia there. Loux is the target audience for today’s local newspaper. “I read my local newspaper, The Salem News, daily,” Loux said. “It’s where I get all my local news from. I enjoy reading it. It’s a quick read, which is all I have time for these days.”
While there are many people like Jason Vaughn shunning newspapers for a quick Internet read, there are still many people like Loux reflecting an aspect of the newspaper crisis seldom acknowledged: local news still has appeal in this uncertain market. Ureneck says that although newspapers across the industry are seeing declines in circulation and revenues, the troubles are not universal. Metropolitan newspapers like The Boston Globe and The Chicago Tribune are facing the worst financial difficulties because they have the biggest struggle to find a niche. Larger newspapers like The Wall Street Journal and The New York Times have a strong national franchise, giving them long-term security, and smaller newspapers are better suited to weather the storm simply because they’re local.
“Local newspapers have a secure position compared to larger newspapers because they’re closer to their audiences and they have a stronger franchise,” Ureneck says.
The Eagle-Tribune, which won a Pulitzer Prize in 1988 and another in 2003, has changed its format in recent years to reflect that of The Salem News and Gloucester Daily Times: moving the local pages to the front, arranging local pages by town, and increasing local focus with community announcement items on each town’s page. Story lengths have decreased as story quantity has increased, and content focuses more on things like school events and neighborhood issues. Publishers and editors of Eagle-Tribune Publishing Co. did not respond to attempts to interview them for this story.
In March, The Salem News invited local residents to a free workshop, “How to Get Your News into the Newspaper,” offering residents guidance in writing press releases and pitching story ideas to reporters, as well as a tour of the newspaper’s newsroom. The newspaper recently launched a magazine for Marblehead, one of its coverage communities, called Marblehead Home and Style.
Marlene Switzer, editor of Gatehouse Media’s many weekly papers in the North Shore area, says local media is all about finding a niche and not trying to make a publication something it isn’t. For her, it means North Shore weeklies staying true to their weekly publication identity and not trying to compete with the bigger newspapers or local dailies. Content consists of mostly neighborhood features, and the staff is small. With the exception of a very few reporters who cover the region’s larger communities and a small photography staff, most of the content is produced by local freelancers.
“We don’t want to be a daily paper,” Switzer says. “We’re not trying to be a daily paper, and we definitely need the daily papers. We’re just trying to be local.” David Dahl is the editor of The Boston Globe’s zoned editions, which are printed as part of the main newspaper two days a week. Globe North, for example, is a zoned edition tailored to communities north of Boston, from the North Shore and Merrimack Valley to southern New Hampshire. Specific circulation for Globe North is not listed in the Audit Bureau of Circulations’ reports, but Dahl says it is in the tens of thousands. “It’s a very popular section, and we like covering Globe North,” Dahl says. “I know that our readers appreciate the stories we write. We try to do a regional take on stories and focus in on individual towns, and they like it.”
A few years ago, discussions in the newspaper industry were mostly about how to compete with the Internet. Even as newspapers created websites, most were still traditional news companies with accompanying websites, which were simply online text versions of the print edition.
Website audiences increased by more than 10 percent in the first quarter this year, according to the ABC. The Newspaper Association of America reports that although print advertising has consistently taken a dive over the last decade, online newspaper advertising has seen a surge of double-digit percent increases-nearly tripling from $1.2 billion in 2003 to $3.2 billion in 2007. It took a two percent dip in 2008, likely due to the economic crisis and not indicative of an industry trend.
Gatehouse Media specializes in community-based local news and has a series of websites for each of its communities (wickedlocal.com). Switzer says that although her newspapers’ community sites are behind many newspapers in high-tech quality and lack a dedicated Web staff, the company is slowly enhancing its online features.
“We do multimedia, audio slideshows online, that kind of stuff,” Switzer says. “It’s everywhere, and it’s a cascading kind of development.”
Eagle-Tribune Publishing Co. has enhanced its websites in recent years, adding things like audio and video, staff blogs, and updated daily gas price reports from local gas stations. The company even has Twitter feeds with story links. But others are taking local content into their own hands. Kim Gobbi runs Newburyport Today (newburyport-today.com), a blog dedicated to events and places in Newburyport, and is thrilled about this kind of hyperlocal collaboration concept. Launched earlier this year, her site is not news-focused, but rather a medium with which she can promote her community. “I felt like there was this need to promote Newburyport both to locals and those who come up for a couple days to enjoy it,” Gobbi says. “I really wanted to say, ‘Hey, there are all these artists who live here and look at their work.'” Gobbi has no staff and relies mostly on contributing residents to post things. She formed a partnership with the Newburyport Mayor’s Office and the local Chamber of Commerce, and both offices post regularly.
Freelance contracting has gone viral as well. Eagle Tribune Publishing Co. recently partnered with Helium.com, an Andover-based global freelance marketplace in which writers can sell articles to publishers. Members write articles for the site in return for a small share of the site’s advertising revenue. Members rate each other’s articles, and the more favorable ratings an article receives, the more the writer is paid. “Poorly rated content doesn’t get read very much, so Helium naturally promotes the better content,” says Helium President and CEO Mark Ranalli. “And that’s the content that’s going to earn the money.”
Media outlets partnering with Helium-which include Eagle-Tribune Publishing Company, Gatehouse Media, and the New York Times Regional Group-can buy favorably-rated articles through Helium’s marketplace, with Helium taking a 20 percent commission.
In May, Helium announced that its website had experienced a 70 percent increase in traffic in the previous six months and that the site’s writers had earned more than $1 million combined for submissions since the company’s launch in 2006. But that includes hundreds of thousands of writers and more than a million articles. The top earner last year made $5,000. The typical price for an article is $40 to $100, depending on content and demand.
“It’s not the kind of money you’re going to pay your mortgage with, but for people who like to write, it’s a wonderful community and a wonderful way to get published and heard,” Ranalli says. But does this discount journalism hurt professional writers? Ranalli says a freelance marketplace like Helium is healthy for the industry because it promotes competition. “As publishers compete for the attention of the writers, they will pay writers higher rates,” he says. “It’s pure free market.”
Doug Moser, former reporter for Gloucester Daily Times, doesn’t have a problem with Helium’s concept as long as it remains a marketplace for lifestyle features and doesn’t try to replace journalism in general. “If they start doing hard news, investigative, stuff like that, then that’s another thing, because journalism’s not a hobby,” says Moser who left the paper in 2007, unable to save money while living in the Boston area on a reporter’s salary. Moser now lives in Georgia and is one of many journalists in the country examining other career options, some by necessity in a troubled economy and others turned off by changes in the industry.
At Kerry’s Senate hearing, Senator Ben Cardin of Maryland discussed his Newspaper Revitalization Act, a bill that would allow newspapers to operate as non-profit organizations and claim advertising and circulation revenue as tax-exempt. Contributions to support news coverage or operations would be tax-deductible. In turn, however, participating newspapers would be barred from endorsing political candidates.
The bill is aimed at community newspapers, not large newspaper conglomerates. But many local, community-based newspapers today are owned by larger conglomerates. The Boston Globe and The Worcester Telegram & Gazette are owned by The New York Times Company, along with more than a dozen other newspapers nationwide. Eagle-Tribune Publishing Company newspapers are owned by Community Newspaper Holdings Inc. of Alabama, which owns about 300 daily and weekly newspapers across the country. Small weeklies like The Salem Gazette and The Amesbury News are part of the massive nationwide Gateway Media newspaper chain.
“I think [the bill] is more symbolic than really helpful,” Ureneck says. “Most of these companies are for-profit corporations that are owned by stockholders. It doesn’t seem to me that the solution is to turn them into non-profits. The solution is to turn them back into profitable businesses again.”
Boston-based media consultant Paul Bermel, a former executive for CNN and Comcast and former manager of the publishing group of The Christian Science Monitor, proposes that newspapers should receive monthly licensing fees from Internet service providers, the same way cable television channels receive such fees from cable companies on a per-subscriber basis. ISP services generate about $35 billion in annual subscription fees, and none of that revenue is shared with newspapers. Bermel suggests that if newspaper websites made access available only to ISPs that had a licensing arrangement with them, consumers would more likely subscribe to ISPs with that access.
“Newspapers don’t have a lot to lose,” Bermel says, noting the low revenues generated by online advertising. “So by turning off their website, if they have a 100 percent free-access website, they don’t stand to lose a lot, and because of the large reach of their website, they might be surprised. When [consumers] don’t get their favorite websites, they’re going to call up and complain to their ISP.”
A viable solution to the newspaper crisis could require several components, Bermel says, from ISP subscription and advertising restructuring to customizing delivery for convenience with mobile devices. “There’s a revolution going on, and it’s going to take bold thinking and innovating by everyone to generate revenue streams,” Bermel says. “Newspapers are writing their own story by not acting and initiating things, and their market share and revenues are disappearing right before their very eyes. They need to be more than creative; they need to take action.”
Dahl says he is excited about the direction in which The Boston Globe is headed, with increased local focus and enhanced online presence, and is confident about the future marketability of newspapers in the digital age. “People want local news; they want local information; they’ve asked for it, and we’re delivering it,” Dahl says.
Whatever the course for tomorrow’s local news media, it will need reporters and editors with skills beyond the notepad and Associated Press Stylebook. Ureneck advises them to start early by developing a firm grasp on the basics of journalism while becoming as broadly versed as possible in the various media platforms, from print and broadcast to Internet. But as troubled as the industry is, Ureneck shares Dahl’s optimism. “I think we’re going to come through this period, and a new business model will emerge,” Ureneck says. “We’re moving through the worst part possible, but we’ll come out of it.”