Shrinking for sustainability?

The most recent report on large-daily-newspaper circulation (as usual, misleadingly assumed to be about newspaper circulation in general) is out–and the numbers are down again, although not as much as last year.

One paper that did have another double-digit percentage drop is the one we still take–the San Francisco Chronicle. And the Chronicle‘s version of the overall story notes an important local take–one that, according to some commentators, isn’t possible:

The Chronicle‘s circulation is down sharply–but its revenue situation is improving.

That’s because the paper’s ownership made a conscious decision to require that readers actually foot a significant part of the bill–around 40%, apparently–as opposed to the typical big-daily-newspaper model, where subscription revenue is perhaps 10% of total revenue. That model worked fine when ads were flowing in to such an extent that publishers were getting 30% profit margins (and yes, they were–not all that long ago). Given Craigslist’s effect on want ads and the economy’s effect on display ads, those days are gone and probably aren’t coming back.

The Chronicle had already shut down its printing plant, contracting with a new printer (who’s using much better presses, yielding better-quality print and a lot fewer creases). Unfortunately, it also had to scale back the newsroom; it still has some of the best writers in journalism, but a lot fewer of them.

So: Is it better to have 300,000 circulation (at $200/year or less per subscriber) and be losing a million bucks a week, or to have 240,000 circulation (at $400/year per subscriber) and be breakeven or mildly profitable?

If that 240,000 circulation holds reasonably steady or starts to increase (and the Chronicle says it’s starting to see net subscriber increases), it seems to me the question answers itself. Will it play out in the medium or long term? Hard to say.

If you clicked on the link or even moused over it, you know it was to SFGate; the Chronicle (and, years ago, the Examiner) started a robust web site many years ago (with its own name because it was serving two papers), with a fair amount of original content–heck, the SFGate-exclusive editorial cartoonist just won a Pulitzer. But there’s now clearly content in the print paper that doesn’t show up online for a couple of days; that’s deliberate, and the stories have a special logo to identify them. (If you’re intent on a digital paper, you can get the stories immediately–but not for free.)

If you’re one of those who already said “print newspapers are dead, and good riddance,” don’t even bother to comment. We’ve heard it before. Maybe you’re right; maybe you’re not. And I would note, as usual, that most newspapers in the U.S.–the smaller dailies and the thousands of weeklies–aren’t part of this story at all, and mostly are doing OK.

Now that I think about it, I really should urge those of you who are interested in this stuff to read the current Cites & Insights, volume 10 issue 6, particularly the second essay (starting at p. 11), much of which is about print newspapers.

2 Responses to “Shrinking for sustainability?”

  1. While I have gone from a regular daily newspaper reader to a Sunday only one, I do care about the industry. After all, my daughter is copy editor for a daily paper.

    The different models chosen by different papers are very interesting indeed. Thanks for the explanation of what is happening in San Francisco. The economic decision you cite is very powerful.

  2. walt says:

    Michael: If you haven’t already, you should read the current Cites & Insights, which includes a section on print newspapers.