Last Friday, 60 former Knight Ridder reporters and editors released an open letter to Knight Ridder’s management arguing for a change in the direction of the beleaguered company, which — despite a 19.4 percent profit margin last year and recently announced editorial cutbacks in Philadelphia and San Jose — has now been forced into a corner by the demand of its largest shareholder that it be sold to recoup its value.
Knight Ridder’s routine “double-digit operating profits” have clearly proved founder John S. Knight’s creed that “excellent journalism is good business,” the alumni wrote, adding they remained confident that would continue to be the case in the future — if Knight Ridder remembered that it was not just another public company but “a public trust” which “must balance corporate profitability with civic purpose.”
Polk Laffoon, spokesman for the company, responded, “I wish there were an identifiable and strong correlation between quality journalism as we all define it and strong and growing newspaper sales. If that were the case, we would not only know how to meet some of the challenges we would face today, but we would thrive on doing it.”
In fact, Laffoon could have found one such identifiable and strong correlation if he had looked to one of Knight Ridder’s competitors, the McClatchy Company. By taking a long-term view of its newspaper business, McClatchy has managed to produce both quality journalism and a string of 20 consecutive years of circulation growth — as total daily national circulation has fallen from a peak of 63.3 million at 1,688 papers in 1984 to 45.2 million at 1,457 papers this year. Building circulation through quality, says Howard Weaver, McClatchy’s vice president for news, is “part of our DNA around here.”
Even so, McClatchy’s daily circulation will decline by about 1 percent this year, though that drop is still considerably less than the 2.6 percent industry-wide average. That dropoff, the sharpest in any six-month period since 1991, seemed to indicate the hastening decline of newspapers. “The votes are now in: Newspapers are officially dying,” Michael Malone wrote on ABC News’ Web site. “[M]ost of the nation’s major newspaper companies could be on the block within the next 24 months, few with any chance of finding a buyer. And if that isn’t the End, you ought to be able to see it from there.”
But are newspapers really dying? The long (and now accelerated) circulation decline might suggest yes — but various industry leaders and observers argue that simple measurement is outdated. Newspapers are reaching new audiences through free dailies (with RedEye in Chicago and Quick in Dallas two of the most visible examples) and online, where Nielsen/NetRatings reported last week that the number of unique visitors to papers’ Web sites grew by 11 percent between October 2004 and 2005 (compared to 3 percent growth across the Internet as a whole). When those online and print offshoot figures are brought into the equation, these leaders say, newspapers’ readership is actually growing. Says Weaver: “What that says is more people want us today than wanted us yesterday, and that is not the profile of a dying business.”
Certainly, classified ads are being displaced by online bulletin boards, print advertising revenues are slowing, and media stocks have taken a tumble this year. But rather than finding ourselves near newspapers’ deaths, we are at “a tipping point in the life of public newspaper companies,” as the Knight Ridder letter’s creator, James Naughton, said last week — and a tipping point in newspapers’ long-range planning.
Often lost in coverage is what Alan Mutter, author of the blog Reflections of a Newsosaur, says are newspapers’ three great strengths: They have widely known, good brands as monopoly or near-monopoly operators in their market; they have longstanding strong relationships with major local advertisers that no one else can duplicate; and they have an unparalleled local newsgathering staff and capability, with other media in their cities largely following the agenda they set.
And the perception that newspapers’ flagship print circulations are in inexorable decline is not an open-and-shut case. In fact, a few papers actually slightly increased their daily print circulations over the past year.
In Raleigh, N.C., the News & Observer boosted its daily figure by 0.8 percent, from 164,294 to 165,604. Managing editor John Drescher credited the increase to the News & Observer‘s location in “a really strong growth market,” a good circulation department, and the paper’s consistency and depth. “I think we have an unusual amount of good inside content,” he said. “You look at a lot of mid-sized dailies now and the papers are very thin. We have a very substantial local section every day. We have a very substantial business section every day.”
But most importantly, Drescher said, the paper is part of a company, McClatchy, “that believes quality sells and that takes a long-term view of the newspaper industry” — not cutting back in bad times but not adding too many jobs in good times either. Asked if the increase was a victory in this era, Drescher said it was, but he also said this: “We’re disappointed that it’s not more than it is, because we have had such strong growth here.”
Over at the Indianapolis Star, where daily circulation ticked up from 252,021 to 252,862, editor Dennis Ryerson said an all-around effort in marketing, circulation and customer service “combined with a stronger push in local news in every section of the newspaper” were the keys to its relative success. With the rest of the media universe so fragmented, newspapers have to keep building on their strength of good local content, Ryerson said: “We have to work even harder to make sure our newspaper retains its role as what could be the last mass medium.”
Like Drescher, Ryerson said he was not content to just keep his paper afloat. “I think we can do much better,” he said. “[W]e need to work hard to stay ahead of the game. That’s why I’m not willing to declare victory. You get fat and easy if you declare victory, because pretty soon you [can] find yourself in a bind, facing layoffs and buyouts, and we can’t afford that.”
An examination of both papers’ hometown populations, using figures provided by the U.S. Census Bureau, indicates that only the Star is increasing its market penetration. (According to the bureau’s most up-to-date figures, the population of Raleigh increased from 276,093 in 2000 to 317,651 in 2004 — the “strong growth” Drescher mentioned — while the population of Indianapolis fell slightly from 781,870 to 766,094 in the same time frame.) Nevertheless, the relative success of both the News & Observer and the Star shows hope that print circulations can at least be stabilized.
More importantly, the common thread linking Drescher and Ryerson’s comments reveal the single most important way those who run newspapers can best position themselves for the future in these uncertain times: focusing on their core product of local news and working to make it far and away the best available in their market.
Newspapers must make themselves indispensable to hold onto their readers and attract new ones. And that is what makes newspapers’ increasing propensity to chop away at their own staffs so perplexing — cuts made to keep costs down (and profits up) for a Wall Street that, according to financial columnist Floyd Norris, has already given up on the enterprise. Something has to give. Each time newspapers like the Los Angeles Times, Chicago Tribune, and Memphis Commercial Appeal make cuts like they did last week, they lose some more of what Malone calls their valuable “intellectual capital,” and what Philip Meyer, author of The Vanishing Newspaper, terms their “societal influence.” And though editors invariably vow they will be able to maintain the same level of coverage, each cutback only lessens the indispensability of the metro paper to its readers.
Instead of cutting back at such a crucial time, newspapers need to be investing in their future. As Tom Rosenstiel of the Project for Excellence in Journalism (which, like CJR Daily, is affiliated with the Columbia Graduate School of Journalism) argues, “There is tons of academic research, most of which publishers do not know … that reveals clearly that if you are willing to invest in improving your product by pouring more money in the newsroom and sacrificing profit for a year or two, that over the course of six or seven years, you can not only increase circulation, but you can also increase profit, and also how much you are able to charge for your advertising. The problem is you have to be willing to make that investment and sacrifice your profits initially.”
The shift to online readership makes this even more urgent. While their advertising revenue is still mostly in print, more and more of it will be going online — making the indispensability of what they offer at their news sites all the more important. And instead of simply trying to transfer their print product online, Rosenstiel says, newspapers need to create something new: “We’ve got to actually invest a lot more than we are now, at a time when it’s not going to pay for itself, so that consumers will say, ‘Wow, this is so valuable, I’m willing to pay for it. It’s different, better, richer than it is in print.'”
And only a recommitment to local news will get our papers there.
Edward B. Colby was a writer at CJR Daily.