To recapitulate, there are a bunch of factors driving the extraordinary losses:
- Readers continue to migrate from print to the Internet -- sometimes to newspapers' own sites, sometimes to aggregators.
- Papers, metros especially, are voluntarily trimming circulation to remote areas because they are more expensive to serve and less valuable to advertisers.
- So-called "start pressure," the selling of new subscriptions to replace lost ones, has taken a hit from cost-cutting.
- Decisions at many papers to aggressively increase subscription and single copy prices has resulted in fewer copies being sold, though circulation revenue has increased.
- This period is the first to include the full impact of the recession, in which some consumers are dropping subscriptions and others buying the paper less frequently.
- Smaller news staffs and news space make the product weaker and less appealing.
Among
the biggest losers in the top 25 papers are the
San Francisco Chronicle (down 25.8 percent daily),
The Boston Globe (down 18.5 percent daily) and
The (Newark, N.J.) Star-Ledger (down 22.2 percent daily).
All three of these papers were on course to lose unacceptable amounts of money this year and made especially drastic cuts as a result. And even in better times, the
Chronicle was notorious for weak household penetration over an enormous area, so pulling back to its geographic center and getting smaller was inevitable.
Winners for the six months include The Wall Street Journal, which is up 0.6 percent and replaces USA Today as the largest-circulation paper in the U.S. The Journal is the very rare paper that has expanded editorially over the last year and has a parent company, Rupert Murdoch's News Corp., willing to spend generously to market subscriptions (print and online, in this case).
The best that can be said is that by dint of stringent budget control, papers are mostly returning to operating profitability, and share prices have rallied. McClatchy CEO Gary Pruitt described the cuts in an earnings conference call to analysts last week as "extremely painful. We had hoped to avoid [them], but we couldn't. We are committed to doing what it takes but no more."
What is worrisome is that advertising declines and new rounds of cost-cutting continue in a cycle that further weakens papers' usefulness for advertisers and readers.
Dealing with the stated and otherwise obvious financial woes is...
