How tough are times in the newspaper business? Last month the Richmond TimesDispatch and The Richmond News Leader ran a series of five cryptic, full-page ads, each trumpeting six names in huge type. As Virginia readers buzzed about the strange listings, a final full-page ad unraveled the mystery: the 30 people cited were local “media buyers,” responsible for purchasing ad space. They had been ignoring the papers in favor of TV and radio. Most of them don’t even read the papers and only found out about the ads from friends. The result of the much-discussed desperation ploy? Fifteen of the buyers have invited the papers to plead their case for ad dollars. “We haven’t gotten [ads] that I know of,” says publisher Stewart Bryan. “But [at least] we’ve raised their consciousness.”
Once rising profits and annual ad-price hikes were givens in the news business; monopoly papers were considered an all but “bulletproof " investment. Now newspapers, battered by the recession and anxious about long-term prospects, are scrambling to pump up circulation and reverse a downward spiral in ad revenues. Total ad sales declined in 1990 for the first time in 20 years. Classifieds fell again in March, the third consecutive monthly decline. Earlier this month, a gloomy crowd gathered for the 1991 American Newspaper Publishers Association (ANPA) conference in Vancouver, B.C., to discuss the crisis-and ponder recovery strategies. At least three speakers voiced the refrain, “Nothing focuses your attention like pain.”
The pain may grow worse. While some experts say the financial downturn is cyclical-and its severity overblown-many predict that newspapers’ problems will linger long beyond this recession. The main reason: increasingly, people don’t read newspapers-especially baby boomers. A recent study by the Newspaper Advertising Bureau shows that daily readership among people between the ages of 30 and 44 fell from 75 percent in 1972 to 45 percent in 1989. “There was a time when somebody hit 35, got married, bought a house and got a subscription to the newspaper,” says Ron Martin, editor of The Atlanta Journal and The Atlanta Constitution. “Not anymore.” Teenagers and adults under 30 are an even harder sell. A 1990 study by the Times Mirror Center for the People & the Press said the current generation “knows less, cares less and reads newspapers less” than any generation in the past 50 years.
Papers face competition for precious ad dollars. Cable TV, radio and direct mail all offer advertisers better access to narrow groups of consumers; direct-mail revenues alone have exploded from $6.7 billion to $22.1 billion in the past decade. Newspapers remain the nation’s leading ad medium, with 26 percent of total expenditures, but that figure is shrinking. “Every year you’ve got a growing number of ad-driven businesses trying to get their share of the pot,” says John Morton, a newspaper analyst with Lynch, Jones & Ryan.
Still, nobody is predicting a wave of collapses. Despite such spectacular failures as the seven-month-old St. Louis Sun in 1990, many papers still enjoy healthy profit margins. Last year publicly traded newspaper companies made pretax profits of just under 15 percent of revenues, down from 17.7 percent in 1989, according to John Lavine, director of the Newspaper Management Center at Northwestern University. “That is a profit level that most American manufacturing industries would love to have,” Lavine says. Some even dispute that a news paper recession exists, charging that publishers are using claims of hard times to justify severe budget and staff reductions.
Yet the squeeze is certainly being felt-even by the biggest dailies. The New York Times and Boston Globe both recently announced staff buyouts. The Washington Post (whose parent company owns NEWSWEEK) reported a 22.5 percent decline in ad volume. At The Washington Post Company’s annual shareholders meeting last week, Chairman Katharine Graham warned that “even when the down cycle begins to turn, we’ll still face a very changed world.” Hit hardest are city papers that don’t have a monopoly-and that are discovering the city may no longer be big enough for two rivals. The Gannett-owned Arkansas Gazette in Little Rock has been steadily losing circulation to the rival Arkansas Democrat; readership has dropped nearly 12 percent in the last six months and annual losses have climbed to an estimated $20 million.
To halt the bleeding, publishers are experimenting with radical repackaging. In many cases that means copying the loud, “lite” style of USA Today. Former USA Today publisher Cathleen Black, newly elected president of the ANPA, says her paper has “redefined … what news is.” So The News in Boca Raton, Fla., a Knight-Ridder paper, unveiled a $3 million “user-friendly” redesign in October featuring shorter stories, a ban on “jumps” (stories that continue on a second page), and eye-catching graphics. The experiment is working. Circulation is up 20 percent from last year (to 26,500) and ad linage has improved. “Readers love it, journalists think we’ve lost our minds,” says editor Wayne Ezell. Last fall editors at The Tennessean, a Gannett-owned daily in Nashville, made a similar redesign after investing $40 million in color presses. Front-page “skyboxes” carry teasers for inside stories, and a half-page feature promises the “World in 5 Minutes.”
Newspapers are also aiming for tomorrow’s subscribers. The Chicago Tribune has introduced kids’ guides, a fashion section and movie reviews for teens, a high school sports section and a Sunday pullout for youngsters. The St. Louis Post-Dispatch recently launched a $1 million television, radio and billboard campaign targeted at readers in their 20s. The MTV-style, 30 second spots show hip young people buying the paper along with shots of local rock concerts, sit-ins and gulf war footage, and an upbeat jazz-rock score. “To appeal to younger readers you kind of have to take the ’news’ out of ,newspaper’,” admits ad campaign director Tim Rodgers.
Papers are trying to appeal to an increasingly fragmented audience. The Miami Herald, responding to a growing Hispanic population in south Florida, now publishes an editorially independent, Spanish-language newspaper, El Nuevo Herald, as a seven-day-a-week insert. Many big-city papers are waging expensive battles to capture affluent suburban readers who’ve been wooed by local dailies. The Los Angeles Times has beefed up its Orange Count reporting staff to 200 in a successful effort to counter huge circulation gains by The Orange County Register. Next year Knight-Ridder will begin printing The Philadelphia Inquirer in a $300 million plant in Upper Merion Township, partly to expedite delivery to its suburban readers. “We’ll be able to have later deadlines and the best quality color,” says Charles Fancher, an Inquirer spokesman. The competition works both ways: Gannett last week agreed to buy 15 papers outside Washington, D.C., to challenge The Washington Post’s suburban expansion. Some papers are turning to moneymaking gimmicks. The New York Times has set up “900” numbers offering crossword clues and sports information, and others offer advertisers profiles of subscribers.
In the face of gimmickry and flash, a few papers have found a refreshing way to grab an audience: delivering more news. In South Carolina a dogged four-year investigation by The Greenville News into alleged financial irregularities at a foundation affiliated with the state university has mesmerized readers. In February the paper hired a bulldozer to unearth incriminating documents that had been dumped in a landfill. Now a former university president has been indicted, and the saga helped boost circulation to a record high of 92,000. Spiffy graphics and splashy colors may increasingly define newspapers during the 1990s, but sometimes nothing works better than the basics.
Imitating USA Today, papers are trying to attract the under-4O crowd with punchy stories and slick graphics:
Knight-Ridder paper has adopted a “fast format,” including section for teens.
Use of color charts and an end to “jumps” has brought circulation and ad gains.
Once staid Hearst flagship paper now has more color, graphics and lively writing.
Splashy colors, teaser “skyboxes” have enlivened Gannett Co.’s Nashville daily.
