Dean Singleton’s Speech In Sweden: 19 Of The Top 50 US Newspapers Are Losing Money

Posted by: Jon Fine on June 09, 2008

Last week Dean Singleton, CEO of MediaNews Group (which owns the Denver Post, San Jose Mercury News, and 55 other American dailies) gave a remarkably candid speech on the state of the American newspaper to the World Newspaper Congress in Sweden.

It’s drawn a bit of attention in the European press, but not so much in the US. Kind of strange, really, when you’ve got the CEO of one of the largest newspaper companies saying stuff like this (emphasis mine):

In the future, there will be two categories of newspapers. Those that survive, and those that die … By my estimate, as many as 19 of the top 50 metro newspapers in America are losing money today, and that number will continue to grow.

(snip)

Too many whining editors, reporters and newspaper unions continue to bark at the dark, thinking their barks will make the night go away. They fondly remember the past as if it will suddenly re-appear and the staffing in newsrooms will suddenly begin to grow again.

Well, as a former journalist, I also wish for the past, but it’s not coming back. The printed space allocated to news and newsroom staffing levels will continue to decline, so it’s time to get over it and move to a print model that matches the reality of a changing business.

He’s actually right on this point. But I wonder what many major newspapers will look like once they go through the digestive process that they’re going though.

In the past two weeks, two executives who know an awful lot about newspapers—Singleton and Rupert Murdoch—have said that some major metropolitan newspapers won’t make it.

That’s big.

The entire speech, which is worth reading, is after the jump. I’ve bolded some parts I find especially interesting.

61st WORLD NEWSPAPER CONGRESS
Göteborg, Sweden
By: William Dean Singleton
June 2, 2008

Thank you for once again inviting me to address the World Association of Newspapers. I spoke to you at the 2003 meeting in Dublin. My speech was followed by a presentation by Hollinger’s Conrad Black, who gave us all a lecture on arrogance, of all things.

Unfortunately, Conrad couldn’t be with us today, but I wish him all the best in his new home in Florida.

And I’m sure the challenges for all of us today insure that none of us needs a lecture on arrogance. If we ever were arrogant, we’re surely not today.

We in the newspaper business must begin any conversation today by talking about the future. The present isn’t as much fun as the past, and many today dispute that we even have a future. I hope they’re wrong.

Novelist James Baldwin once wrote about the future being like heaven: “everybody exalts it, but no one wants to go there now.”

Well, we in the newspaper business need to go there, and we need to go there now.

Let’s see if you can guess what industries I’m talking about when I talk change.

The first industry has lost half its market share in the U.S. in the last 30 years and now has less than 50% share.

In the second industry, the two major players have become one and share of sales in the sector have declined by 42% over the past 10 years.

And finally, most of the major players in the third industry have gone bankrupt, restructured, started to make money again, and now are losing billions again.

Any guesses? Yes, autos, department stores and U.S. airlines.

Competition in these industries has resulted in a greater range of product offerings of higher quality, at lower prices to the consumer, and has sharpened the performance of industry participants.

Companies in these and many other highly competitive industries cannot let their guard down, but must continually reinvent themselves to better serve consumers. Their diligence in developing new products and their effectiveness at bringing new concepts to market are a matter of survival. And even with all their changes, survival is still a question mark for all three industries.

For too long, we in the newspaper industry have been immune to the risk of survival and to the urgency required when facing stiff competition. Suddenly, risk of survival is a regular topic of discussion.

Are we up to the challenge that strong competition brings when it is pervasive and incessant? Can we act with urgency? Can we innovate and take on the risks associated with new product introduction? Can we manage our core legacy newspaper business more efficiently while we grow on new fronts, and can we attract the talent necessary to succeed? Can we show the leadership, vision, strategic direction and inspiration required to move our businesses in a winning direction?

The answer to these questions, I believe, is a questionable yes.

Before I review the state of our industry and what we at MediaNews Group are doing to navigate into the future, I want to talk about what I believe contributes to the culture of our company, from its birth a quarter century ago, to now being the fourth largest newspaper company in America.

It starts with passion and commitment at the top. I as the company’s founder believe in the business we are in, and in our ability to continue to improve on what we are doing and to grow….no matter how our environment may change.

MediaNews Group is not distracted by the demands of public ownership nor by the allure of diverse and unrelated business units, which might appear to provide an easier way to growth. You will not hear me say to our employees that they can expect reduced commitment to or investment in our core business because some other product line or business segment is suddenly the flavor of the day. With MediaNews, it all starts with commitment to, passion for, and a tireless belief in our core business: gathering news and selling advertising.

Our corporate mission statement for years has been as follows:

“To be the leading provider of local news, information and services in our strategically located markets by continually expanding and leveraging our news gathering resources. We will proactively identify and develop strategic partnerships and relationships to enhance our content and services while integrating our content for dissemination across all available distribution platforms in our markets, starting with the local newspaper. We will continually strive to improve our profitability, while being a strong community partner and strengthening our work environment for our employees.”

Throw into the mix a spirit of entrepreneurialism, fast decision making and a high degree of tolerance for disagreement, internal tension, self assessment and questioning as well as being very rational and analytical about everything we do.

Yes, these qualities of our culture are hard to duplicate, but I believe they are essential to our success. They allow us to maintain a focus on what is crucial to our success in an industry which has become increasingly competitive. If a company does not practice these attributes, I believe it will struggle to succeed in our fast changing environment. And survival is not guaranteed.

You all know how we as an industry have arrived at this point. Despite the growth of radio beginning in the 1930’s and TV in the 1950’s, we continued to enjoy growth in revenue even if our market share declined.

Life was good. But in the 1990’s something began to change for us.

Was it the proliferation of cable news channels, the inexorable trend toward two-wage earners per household working outside the home, time pressed lifestyles, the emergence of the Internet, or the explosion and fragmentation of all forms of media? Was it the consequence of consolidation in our industry, combined with public ownership and subsequent pressure from institutional and large shareholders? It was all of these factors.

Let’s take a look at the state of our industry, both good and bad. According to the Newspaper Association of America, U.S. print newspapers still reach 51% of all US adults on a daily basis, ranking us as the single largest medium in virtually every market on any given day. During the course of a week, 74% of all adults read a newspaper. The reach of our websites extends this reach by 5 to 10% and newspaper websites now reach 37% of all Internet users.

Advertising revenue for the industry is estimated at $43 billion, or 18% of all US ad spending, and our share of local advertising is twice that.

Average profit margins for the newspaper industry are approximately 19%, and while at times it has been painful, we have been extremely resourceful in finding ways to protect our financial health. Despite what you read in the press, we’re not a dead business ... at least not yet.

I would be willing to bet that the industries I talked about earlier would give their eye teeth to be operating from the position of strength which we currently occupy.

In fact, I will go a step further. It would be an embarrassment to us as stewards of this industry if we cannot leverage the strengths we currently enjoy into successful models for the future.

As you know, we provide a broad and complex range of advertising services to a very diverse set of advertisers who are constantly evolving, evaluating what is best for their businesses and updating their strategies.

Let me discuss the changes in our advertisers which have had the greatest impact on our industry. The merger of Macy’s and May Company resulted in substantial consolidation of department store print spending. The merger of Sears and K-Mart had the same effect. Newspaper advertising from all general merchandisers has declined by 20% across the industry over the past 5 years, and within that category, department store spending has declined even more steeply.

In the national advertising category, revenue is down almost 30% from last year. In better times, we enjoyed brand advertising from General Motors, Ford and Chrysler. We also benefited from the wave of growth in telecommunications products, such as cell phones, long distance services and Internet access. But as you know, the telecom industry has succumbed to a surge of consolidation, hitting hard our ad revenue form this important category.

And we can’t highlight our challenges without mentioning that circulation has declined by an industry average of 2 to 3% per year over the last 5 years. Also, while we have been effective at building Internet audiences, our online revenue growth has not matched that of our more successful Internet competitors.

But the largest driver of pain has been the movement of classified advertising from print to online. While newspapers are capturing a portion of that online business, we’re capturing it at a fraction of the rate once enjoyed by print.

And if we weren’t already hurting enough, the U.S. economy ... and perhaps the world economy as well ... is in the beginning of a recession which appears to be wider and deeper than any in our lifetime.

Now, even our best remaining print advertisers are slashing spending because their sales are hurting. And even online advertising ... as we’re now finding out ... slows when the economy gets weak.

It’s the perfect storm, worse than anything we’ve ever seen before.

So what are we at MediaNews doing to address the challenges, but also to capitalize on the many opportunities ahead of us? And what do I expect of the executives of our company now and in the coming years?

First, we are looking at our company as comprised of three key business units:
• Our core newspapers
• Our internet operations
• Our targeted niche products and publications

We continue to innovate in our core newspapers. There are still many ways to grow our audiences— compelling and innovative content, better design, a fierce dedication and focus on intense local news and information, more sophisticated marketing and promotion, and new platforms for distribution such as electronic editions.

We are also taking a hard look at how we operate. We want to preserve what is important to readers while operating with intense efficiency in producing and distributing our newspapers. We have been very successful at consolidating manufacturing facilities—also known as clustering. For example, following the 2006 acquisition of the California newspapers in the Bay Area, we shrunk from seven production plants to four.

At MediaNews, we believe in print. Our newspapers and partnerships have, in the past two years, invested almost half a billion dollars in new, modern and efficient printing and mailroom plants.

Why? Because these investments help make our core more efficient as revenue is challenged. Efficiency in our core product is a key building block in our new strategy, because our core newspapers fund our growth of new business.

We have invested in new technologies to become more efficient. We have consolidated key functions into shared services centers, and we have sent high-cost functions overseas to make us more cost-effective.
We are constantly evaluating more efficient ways in which to operate, and we expect to do more.

We have also been more creative about how content is produced, with an emphasis on maintaining quality and localness while sharing resources among newspapers and on making these changes transparent to the reader. Most noticeably, these changes in content gathering and editing have been taking place in our newsrooms in the California East Bay Area and in Southern California. [NOTE: These are also among the most difficult regions for American newspaper publishing these days.]

In San Francisco, we have consolidated reporting and editing functions to eliminate costly duplication, just as we’ve merged production, administration, accounting and circulation of our newspapers.

And in Los Angeles, we’re merging functions of our 9 dailies in areas of news, production, accounting, advertising, circulation and administration.

And in most of our newsrooms, we’re eliminating costly infrastructures as we protect our core news gathering functions and expand online staffing. All these savings are made as we add dramatically to our sales staffs in print, niche and online.

These expense reductions are painful and will continue to be more painful as recession joins structural changes to take valuable revenue away from our newspapers. MediaNews has eliminated hundreds of good people from our company in order to navigate into a changing world. That’s sad, and we are actually criticized in the media for re-allocating resources. But in the future, there will be two categories of newspapers. Those that survive, and those that die. Fond memories of dead newspapers will do nothing for our communities.

And may I deviate to briefly discuss the U.S. industry as a whole.

Some newspapers in the U.S. won’t make it through this transition. Others will print smaller newspapers on fewer days. By my estimate, as many as 19 of the top 50 metro newspapers in America are losing money today, and that number will continue to grow. The large metros are the hardest hit by change, and they’re the most difficult to change.

Too many whining editors, reporters and newspaper unions continue to bark at the dark, thinking their barks will make the night go away. They fondly remember the past as if it will suddenly re-appear and the staffing in newsrooms will suddenly begin to grow again.

Well, as a former journalist, I also wish for the past, but it’s not coming back. The printed space allocated to news and newsroom staffing levels will continue to decline, so it’s time to get over it and move to a print model that matches the reality of a changing business.

These dramatic changes in our business model, I believe, will lead to more consolidation of newspaper ownership as our industry combines costly corporate overheads and moves to repair balance sheets that were created for an earlier performance expectation. Think airlines and department stores.

As consolidation takes place, the industry will work together better to take advantage of new technologies that will lead us to a more modern business model.

In order to reassess everything we do and to identify more opportunities to operate efficiently, MediaNews has asked employees from around our company to participate in what we call the Operations Task Force. We ask our functional experts and leaders throughout the company to form teams, work with their peers around the company and identify further ways of operating more efficiently. We pursued a long list of initiatives over the past several months and have surfaced tens of millions of savings to help preserve the health of our core business. There is more to come, and we’ll do these annually.

Additionally, MediaNews, Hearst Newspapers and Freedom Communications this year retained Bain Consulting to help us re-create the cost structures of our companies.

We asked Bain to answer this question, “If we started this business today, knowing what we know today, what would our infrastructure look like?”

We expect a plan by the end of the summer, and we expect our business to look a lot different next year.

And we still expect to capitalize on revenue growth opportunities by adding salespeople company-wide, in order to increase the numbers of businesses we can reach and to help build their customer bases by advertising. We call this “feet on the street.”

There is much going on in our company in the core newspapers, and there is still much opportunity. The core must stay strong while we develop our new business for the future. Because the core will finance our future.

In our Internet segment, we are stressing growth in audience and growth in revenue. For 2006, the NAA reported Internet revenue growth of 31%, and about 20% in 2007. While the recession has slowed 2008, this is a growth business for us, and we intend to capitalize on it. It is our future.

One key element of growth will be our participation and leadership role in the Newspaper Consortium and its partnership with Yahoo. We have completed the rollout of the full Yahoo HotJobs platform in our newspapers, the first milestone of the partnership. Beyond that, our partnership with Yahoo will, over the coming months include Yahoo becoming the primary provider of search on newspaper websites, including full web search, sponsored search, content match and placement of the Yahoo toolbar on each site.

Newspapers will share with Yahoo the revenue from search. In addition, newspaper website content will be treated preferentially by Yahoo’s News Search product, resulting in increased traffic directed to all newspaper websites. And finally, our newspapers will move all ad serving to the Yahoo ad network platform later this year, enabling our websites to benefit from advertising placed across the Yahoo ad network and from Yahoo’s superior technology.

Currently, Yahoo enjoys the largest share of graphical advertising of any company on the web and we’ll share in it.

We will continue to expand our newspaper websites far beyond the traditional core. MediaNews newspapers have aggressively embraced an “online first” approach, which has resulted in major changes in newsroom cultures and how they operate -- and resulted in substantial increases in our Web site traffic for breaking news, local photos and other content.

We have been, are and will continue to be the primary provider of local news and information in our marketplaces. Our newspapers are listening to what readers want and we would expect there to be a continued extension of content, particularly online, as well as continued expansion of video, rich databases of local information and other content that is first and foremost useful to our audiences.

Our company can’t win the online battle alone. That’s why we’re investing with other newspaper companies to acquire creative online vendors that can help facilitate industry products to leverage our local strengths across national platforms.

Our most recent such acquisition was Kaango, an online company that will position the newspaper industry to aggressively compete in the self-service advertising space against Craig’s List and others.

And we’ve joined with Gannett, Tribune Company, Hearst and New York Times Company to create a national sales network for online advertising.

We have insisted that our newspapers embrace the Newspaper Next approach to seeking out jobs to be done—which really means being on the lookout for unmet customer needs—and to unleash new products to satisfy those needs, to build audiences and to create marketplaces.

So while we are innovating and expanding our core newspaper websites, we are building or expanding new sites such as LA.com, BayArea.com, twincities.com and InsideDenver.com as hubs not only for our newspaper site content, but also as a focal point for our concept of the creation of marketplaces.

Our marketplace strategy will emphasize leveraging the interactivity of the web, with user generated content, customer feedback, and user self-generated ads. We anticipate introducing several marketplaces on our regional hub sites this year. While we have historically been a mass medium both in print and online, the marketplace approach is about niches—aggregating audiences with common interests, but going local and deep as opposed to broad and shallow.

Now that I’ve mentioned niches, I should talk about our third business segment—targeted or niche products. This is another key growth segment for us.

We have identified 25 categories of niche and local publications which represent potential categories of titles we might publish in any of our markets. Many are categories in which we already publish, such as home and design, real estate, weddings, automotive, recruitment, etc.

But there is considerable potential to expand, and expand we will.

Over the next year we will publish new magazines in 50 markets tapping 10 of our designated categories. In total, we will publish nearly 200 new magazine issues—mostly at bi-monthly frequencies.

In order to help accomplish this, we, along with the Hearst Corporation, have purchased Publications Services of America, a publisher of healthcare, home shelter, weddings, and Hispanic magazine titles, and we are working with PSA to introduce these titles in our local markets. In every case, we will also include an Internet component to our publications, and this will be integrated into our marketplace strategy. We expect the niche segment to become a significant component of our company going forward. It will generate $75 million for MediaNews this year.

We as an industry have tremendous opportunity. The media business in the US is growing by virtue of the fact that consumer demand for information is growing. We have the greatest ability of any of our media competitors to create local content. We have the greatest local sales capability and resources of any medium in our markets. And, we enjoy the largest audiences of any medium locally in our core alone.

So, it’s up to us to capitalize on the opportunity before us to attract larger audiences and to develop new products creatively in print and online. We are optimistic about our future, and we are not afraid to compete.

Let me finish by discussing the MediaNews view of the newspaper business model for 2012.

Let’s start by looking at our company today. This year, we’ll generate 89% of total revenue from our core, 7% from online and 4% from new products.

On operating cash flow, we currently generate 73% from core, 22% from online and 5% from niche products.

In five years or 2012, we expect 68% of revenue to come from core, 20% from online and 12% from niche.

On operating cash flow, our goal in 2012 is 40% from core, 50% from online and 10% from niche.

That would be a great business, one that investors would applaud.

How realistic is this? Quite so, I believe. In Salt Lake City and St. Paul, our online operating cash flow is approaching 30% of total today. Salt Lake online revenue is more than 10% of total. And niche revenue is 15% of total, ahead of our 2012 goal. Quite different than 5 years ago, when Salt Lake online revenue was ½ of a % of total and online losses were considerable.
While I’ve spent most of my time talking about the business of newspapers, we must not lose sight of why we’re in business in the first place and why ensuring a dynamic future for newspapers is so important. Sure, economic performance is important. After-all, without solid earnings you can’t fund future growth. But there is also a greater calling to us all.

Newspapers are the cornerstone of democracies everywhere.

We owe it to our countries to succeed in navigating a new newspaper model.

So this 400-year-old industry has been a leader since the first newspapers were formed in this country … we were there before government … we are the model for emerging democracies even today … and we can be on the cutting edge of the new social revolution that’s before us now …

… if we stay true to the role we are meant to play.

If we print what our readers … not what we … want. If we discard our arrogance and old ideas. If we let our readers participate.

There is more at stake here than our economic fortunes. The old newspaper model, without major changes, is destined to fail. Paired with a revolutionary new model, we can succeed. If we fail, democracy fails. Failure is not an option.

The future is a bit scary, I’ll admit, but it’s also very exciting. Let’s get on with it.

Thank you so much for inviting me to visit with you today about the newspaper business, to which we all have devoted our lives.

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Reader Comments

robert

June 9, 2008 08:48 PM

Maybe it got so little U.S. coverage because all the papers that care have dropped their foreign coverage so they had a hard time getting someone to Goteborg.
(That said, it doesn't look like we covered it either.)
Robert MacMillan
Reuters

willis morton

June 10, 2008 10:47 AM

That Singleton said he's a former journalist is laughable, Indeed, during Singleton's last day on the job as an editor on the old Ft. Worth Press, angry reporters pelted him with brickbats and beer cans.

Jon Fine

June 10, 2008 11:00 AM

Willis:

It’s true that Singleton’s had many run-ins with newsrooms over the years, but he was a teenage sportswriter for his hometown daily in Graham, Texas and went on to other newsroom jobs.

http://cjrarchives.org/issues/2003/2/dean-sherman.asp

Elaine

June 10, 2008 11:00 AM

Dean Singleton mentioned in passing that all his papers' new initiatives are rooted in the principles of Newspaper Next, but he didn't give any information about it. This is a multi-year research initiative of my organization, the American Press Institute, to identify and test new financial models for the newspaper industry. A new report documenting many early Newspaper Next successes was released in February, and all research is available for download at no charge on the N2 Web site.
Elaine Clisham
American Press Institute

Dave Mastio

June 10, 2008 11:04 AM

Willis,

Singleton would point out your fleas.

I'll just say that a cheap shot doesn't undermine his point one bit.

Pat Sullivan

June 10, 2008 11:14 AM

Once again, instead of addressing the reason for newspapers' financial straits (falling print advertising revenue and the less-lucrative new-media revenue models), a so-called industry leader who failed to prepare for it *over the past decade* attacks those trying to cope with change. "Too many whining editors, reporters and newspaper unions continue to bark at the dark..."

Mr. Singleton's opinion is not based on provable facts. I do not see reluctance on the part of major newspaper journalists to adapt to the changing media landscape; I see a failure of the managers' ability to re-envision the financial and business future of the mass media.

Wenalway

June 10, 2008 11:24 AM

Too bad Lean Dean won't be a part of the future he dreams of. He's leveraged to the hilt and destined to fail.

He thinks his niche revenue will triple in five years. He's wrong.

He may be right in calling some journalists barking whiners who refuse to change, but he's still a terrible businessman. His model will be the subject of ridicule for decades.

He's a weak link in the chain of humanity. His inevitable demise will be a step forward for the rest of the world.

DTR

June 10, 2008 01:00 PM

I have to agree with Wenalway. Singleton's finances are a mess, and the things he's going to have to do to survive may wipe him out in the end.

I don't necessarily think he's wrong about how niche products will represent a growing segment of newspaper earnings in the coming 3-5 years, but I think the greater problem is sustainability. So many of the niche products newspapers produce now are such vacuous advertising vehicles that in the end they could have the effect of possibly turning advertisers away. There needs to be a greater push toward substance that keeps readers engaged, and advertisers happy. It's not all one thing or another. But most editors/managers are only interested in creating the ad vehicle, and believe any copy whatsoever supports that mission. Transparent efforts though frequently translate to lack of interest by the reader over time, and can close off a potential revenue stream.

He's partly right about push back in newsrooms, but I also think that without question the greatest challenge is not the rank and file but the mid-level and senior management that doesn't know what it's doing, reacts poorly to challenge, and is rarely held accountable for its own decisions. Staff is a resource that will execute well whatever it's tasked with. Editors and managers that flail away at change without a goal or a clue devastates staff morale and productivity. Many newspapers should looks hard at clearing away the obstacles of management before looking at the obstacles of unions or rank and file.

BANG LANG

June 10, 2008 01:45 PM

Being on the editorial side of one of Lean Dean's California papers his above statement in part is full of contradictions. He wants to keep the "core" product but continues to ax employees on the editorial side instead of hacking off the top. People get the paper due to editorial content (on the most part) but he continues to cut back on those staffers. He claims he is dedicated to local coverage, but you can not provide that when you have one reporter covering 3 cities. He talks about what readers want, and they hack the comic section to shreads. We received thousands of calls from unhappy readers following this change when they failed to ask the readers what they wanted.
Online, another contradiction, the websites for each individual paper in MediaNews are horrible. He has invested very little (from what I have experienced) in web based personnel and software.
Editorial staffs are at bare bone levels which are seriously effecting the quality of each paper (he has destroyed a great paper The Merc). Believe me I know, I'm the one in the field reporting and hearing it first hand from readers in the community who are not to happy.
I could also discuss how MediaNews is no longer releasing their financial situation, along with Dean and his partner taking millions in profits for themselves. With MediaNews so in debt after spending a billion $ in the bay area a few years ago, which he is having major problems trying to pay back, he continues to talk about buying more papers in the Northeast. WHAT ARE YOU *%#@^$* THINKING!!!!

Observer

June 10, 2008 01:55 PM

The big mistake MNG and all other newspaper companies are still making is this: they continue to be print-driven in a world of information-on-demand. Dean calls print his "core" business and says he still believes in print. What he needs to do is to to say to his employees:

"Let's be honest. Ten years from now, our core print audience will be mostly retired. That's not a sustainable business model. So, from today forward, we are in the online information business. Our business cards will say that we represent a web site, not a newspaper. First and foremost, we will produce news and information and sell advertising for our web site. Secondarily, we will continue to publish and print newspapers and niche products, but in the long run our papers may not be daily. Where possible, we will get out of manufacturing (printing) and farm out all production, printing and distribution, so that we can focus ourselves totally on our growing, core, online businesses."

Without this sea change, newspaper companies will be like the passenger railroads, the buggy whip makers, and the typewriter manufacturers that never reoriented themselves to a changing world.

Visitor

June 11, 2008 03:43 AM

This man GUTS AND DESTROYS newspapers for no apparent reason. Why does he buy them, only to run them into the ground? On a recent visit to San Jose, I picked up the Mercury News at my hotel and simply could not believe my eyes. The decline in quality was shocking compared to the newspaper I'd known during the Knight Ridder era. Singleton has turned it into a pitiful piece of junk with almost nothing in it. It looked like a throw-away and offered virtually no sense of San Jose/Silicon Valley. I find it sickening to think of a population that size without its own newspaper, but that's what has happened. Nice work, Mr. "Former Journalist."

mediadavid

June 11, 2008 07:21 AM

Let me save you the consultancy fee.
If you were starting up today, you would NEVER create a model that requires you to cut down trees, turn the tree into paper, ship it across the country, turn it into printed material on a daily basis, put your editorial content onto a printed page, drive it to where your customers live, toss it towards their homes and ask them to read it many hours after it was written (while getting their hands dirty) and often without the latest sports scores or political developments that they can find instantly and up to the second online.

now that may be a bit flip, but it's the truth. I certainly don't have the answer about how to pay for a newsroom full of local specialists from your online revenue.

you'll have to find another consultant for that.

Taylor Kellogg

June 11, 2008 08:32 AM

Yes, but 31 of the top 50 newspapers are making money. I'm tired of the negativity towards newspapers. Why take the bleaker angle and run with it? Why focus on the troubled newspapers? There is plenty of good news in journalism, but this article chooses to ignore it.

Observer

June 11, 2008 01:12 PM

Taylor,
19 out of 50 losing money is pretty close to half of them, ie., if 6 more papers out of 50 go in the red, it's 50-50. That's a crisis, my friend. It can't get any bleaker without bankruptcies, which is probably the next thing you'll hear out of Minneapolis and maybe Philadelphia.

Isaac Sacolick

June 11, 2008 11:55 PM

Newspapers still haven't figured out an answer to their declining classified ad revenue streams. Consider the Denver Post where job ads start at $349, real estate for sale at $49, and auto ads are now free. (See http://postnewsads.com/onlinead/).

Craigslist: all free in Denver.

Ranks of newspaper executives have tried to solve this problem. I worked with two companies that sold web based classified solutions to newspapers going back to 1996. In 1998 we had solutions for allowing newspapers to take classified ads online, yet only a handful adopted this approach.

Newspapers will need to think big and have a radically new approach.

Don

June 13, 2008 06:56 AM

Taylor, Why should ANY media outlets lose money? It's media. There were once limited costs and advertising spending was through the roof. Newspapers have very limited commodity costs: paper and ink. So for ANY media outlet to lose money it's kind of a shock, it means that their core mission is not meeting what the audience wants.

Roxanne

June 13, 2008 07:07 PM

Don,

To say that newspapers have "very limited commodity costs: paper and ink" is not only short-sighted, but exactly the viewpoint that got journalists, editors and publishers a one-way ticket to an offline desert island.

And while I enjoy the show LOST, I don't enjoy the idea of navigating that future with my career, nor the careers of the people I'll keep on the payroll. Your metaphor would be like me saying the online publishing world has very limited commodity costs: a PC and an internet connection.

Think big, folks. This industry's not made for tiny discussions.

Land_of_the_Free

June 14, 2008 12:30 AM

Typical newspaper executive speech. Tons of useless cliches and zero solutions. Also Jon Fine adds no value either. How many of Medianews' 55 newspapers lose money? Will Medianews survive? Which 19 metro papers lose money? How about doing some analysis or going beyond the obvious?

Dave

June 15, 2008 09:40 AM

Lots of good discussion about finances and the growing internet trend, but you're missing a key root to the problem, perception and credibility. Roughly half of the country's adults are liberal and half are conservative. The major newpapers have a strong reputaion as being too liberal. That cuts out a large conservative population that has to search elsewhere for objective reporting. I for one want unfiltered truth in my newspaper without the left or right's agenda intertwined. Where can I get that? NY Times? LA Times? Report objectively and I'll come back.

Friend of PSA

June 16, 2008 05:16 PM

I have a friend who works in management for Publication Services of America and she said that there was not a sale of PSA to her knowledge. There have been ongoing talks about partnerships, but not of sellout.

bynx

June 18, 2008 01:37 PM

Hearing Dean Singleton call other people arrogant is a laugh. He is one of the most arrogant newspaper executives I have ever met. He's surrounded himself with toadies. His newspapers are terrible and so are his websites. His distribution centers can't deliver papers. Customers can't reach anyone by phone. High-paid executives cover their butts and blame their underlings. Anyone who complains about anything gets laid off. Good journalists and ad reps figure out a way to leave a sinking ship.

And Singleton goes in hock to his eyeballs and then blames the sad sacks who make $35,000 a year. Put this company out of its misery.

to Bang Lang

June 28, 2008 03:40 PM

Thanks for your comments.

I think Dean said it tight in his opening, that consolidation was partly to blame for the decline of the industry.

Minneapolis dreamin'

July 1, 2008 01:55 AM

I'm not sure who will want to read an entire industry of training papers that can't hold onto quality writers for more than a few months at a time. You want a product people will actually pay money to pick up in print or drop everything and seek out online, first thing in the morning? You can't pay people $30,000 a year in a metro area and expect experience, depth, knowledge and loyalty. The coming deluge will eliminate some terrible papers, and there are plenty. But mismanagement and scorched earth tactics from above will also eliminate some gems and potential gems, and toss away many good writers who truly care about their communities and about their work. It's not just a shame. It's a terrible shame. I do not want to produce car-crash TV segments for the nightly news ... but maybe that's our future.

DDDenver

July 16, 2008 09:52 AM

I worked for Singleton in the 90's when MNG was kicking off their online efforts. He was down the hall from us and would occasionally stop by to chat. There is no doubt in my mind that the man is a driven business man who sees a future for information providers that few in the newspaper industry can see or understand. Does he slash costs, "gut" the staff, and change the practice and feel of the newspapers he buys? Absolutely. In his article he mentions department stores, auto manufacturers, and airlines. Newspapers have long been filled with those who consider themselves the high priests of the Fourth Estate. And I think there is a bit more nobility in working in the press than in plumbing. Yet the consumer pays your paychecks, fourth-estaters, and your business is dying. This is one reason Singleton has been able to build his empire by buying from people who want out of the ever difficult business of newspapers.

I agree with the earlier poster about newspapers changing their "core product" to be information providers. Yet all the whining and complaining about the man Dean Singleton seems to be an easier outlet for you industry people than going and doing such a thing as marketing your "information gathering and providing" skills in the full realm of media (most likely online). Easier to attack a person and their efforts to "save" newspapers (in their way and in their defintion of saved) than to do it yourself. That kind of wishful-thinking stranglehold on the past is why I left "new media." I didn't have the patience for all the speeches (several I saw from Dean to Publishers, Editors etc.), planning meetings (which were really low-level technology training classes), and resistance-to-change infighting I saw amongst my traditional newspaper co-workers at MNG.

I do think there is a place for professional journalism in the coming decades. I just think newspapers have so wrapped themselves in chains of the past (e.g. the guild, non pay-for-results advertising, dependent upon bright-eyed-change-the-world journalism school grads) that they will sink and drown under their own weight. Singleton may "save" something from them and he may too be pulled under. Regardless, I know from listening to the man (and drawing a paycheck in his New Media effort in the 90s) that he better understands the challenges facing newspaper COMPANIES than 90% of the journalists I dealt with in my time at MNG and since leaving to work in more open-minded industries.

Call me a quitter, but good luck, y'all.

Jim

August 25, 2008 05:15 PM

Dean is like the matador at a bull fight, slowly sticking in the swords so the bull will finally pass.
I worked for a LANG paper located in Ontario, California that when Dean took over made 16,17,18,20.million dollars in profits each year. Profit margins of upward of 38%. You want to know how much of that went back into the plant to help move forward, of the over 70 million profit 2 million was reinvested, and only because he had to to keep operational. So please lets not talk about how much Dean is worried about the industry, he is only worried about his loss in profits. Circulation at that paper is down from 80,000 in 2005 to 39,000 now, thats not the 2 to 3 percent per year drop he reports. So much for giving the community what they want! It is a very sad day when Dean and his swords take over a paper, very sad! I wish Dean could only be around to see what he has done to a industry but that mostlikely wont happen. He is not a innovator, he is the MATADOR of the newspaper industry.

Big G

September 8, 2008 09:01 PM

What's killing the industry is the political bias. The mainstream news media has lost touch with America and what it stands for. American newspapers read like the 'Pravda' anymore. Not even suitable to line the bird cage anymore. Like myself, more and more Americans are not buying newspapers anymore. And this sentiment is growing.

SKort

November 30, 2008 09:46 PM

Print will die because people like Dean don't understand the value of information and design. The printed version should be for analysis and visual display – aimed at weekends and loaded with things you can't get online. Newspapers bring more than just information to home, they bring inserts, ads, commentary and local pieces too big for the web. Devaluing a product is putting it online for free – and thinking sharing in ad revenue will be the solution. The software and hardware people have bamboozled media into giving it away for free – and media jumped to it. They don't give their software away for free. The only reason iTunes exists is to sell iPods -- Apple doesn't care about music or musicians -- not at 9 cents a song, they don't.

Here's the solution – it's simple, really. Give nuggets online for free – then expand into the print versions or put up a pay wall. Track your content like the software people do and go after people stealing it. Content providers should get paid for their work.

They all have this crazy idea that the web can sustain everyone. It can't. Not until there is a huge reduction in content and providers will the web folks see the error in their ways – devaluing something means people think less of it, and it becomes worth less. Didn't anyone learn anything from Wall Street?

Newspapers devalue their product and ask that we still buy it. No newspaper staffer would go to the store and buy something that costs the same and gives them less. No, instead they would write about it and become indignant.

That's what happens to readers when they get the paper.

Less in never more. Free devalues the product – and people won't pay for what they don't value.

And the web cannot support everyone. It just can't

Google strategy is sound – outlast everyone, get all their personal information, and be the place they gladly surrender their privacy to.


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The media, entertainment and marketing worlds continue to shapeshift on a near-daily basis, as new forms arise and old assumptions erode. Where is it all going? No one really knows. But on this blog BusinessWeek’s media writers Tom Lowry and Ron Grover promise to provide ample helpings of scoop, provocation, and sharp analysis as they track and annotate this constantly changing terrain.

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