The Changing Newspaper Business

1. The Changing Newspaper Business George Sylvie 2011 Reynolds High School Journalism Institute University of Texas at Austin

2. The Big Questions • Is there a future for newspapers in the age of digital content and citizen journalism? • History tell us that the obvious answer is …….

3. Yes, externally… • Newspaper industry has always evolved with peoples’ needs and wants • Pamphlet  Polemic  Tool of the Rich • Small town item  City item/Penny Press • City ID medium  AM/PM vehicles • Lifestyle publications (Wall St. Journal, New York Times, USA TODAY, e.g.)

4. And internally… • Suburbanization & segmentation (1950s) • Politically, demographically (1960s) • Socially aware

5. And journalistically … • Continuing Professionalization & Responsibility • Advent of TV, radio • Fourth Branch of Government

6. And by life advancing… • the TV remote control • cheap gasoline • satellite & cable • proliferation of advertising

7. And by people becoming.. • More diverse • More corporate • More rich • More leisurely • More mobile • More hurried • More multi-tasking

8. Daily Newspaper Readership Trend - Total Adults (1998-2007) • Adults (000)Average Weekday Readership • YearTotal AdultsMen WomenTotal Adults% of AdultsMen % of MenWomen% of Women • 1998 134,992 64,972 70,021 79,046 58.6 40,442 62.2 38,624 55.2 • 1999 136,575 65,785 70,790 77,680 56.9 39,860 60.6 37,821 53.4 • 2000 138,937 66,922 72,014 76,596 55.1 39,330 58.8 37,267 51.7 • 2001 140,609 67,763 72,846 76,367 54.3 38,998 57.5 37,369 51.3 • 2002 143,668 69,245 74,423 79,638 55.4 40,318 58.2 39,321 52.8 • 2003 146,323 70,486 75,837 79,094 54.1 40,030 56.8 39,064 51.5 • 2004 148,340 71,534 76,807 78,285 52.8 39,727 55.5 38,558 50.2 • 2005 150,674 72,874 77,799 77,673 51.6 39,428 54.1 38,245 49.2 • 2006 152,515 73,941 78,574 76,088 49.9 38,693 52.3 37,395 47.6 • 2007 154,353 74,931 79,422 74,714 48.4 38,246 51.0 36,467 45.9 Source: Scarborough Research Top 50 Market Report 1998-2007 Prepared by NAA Business Analysis & Research Dept. (Rev. 8/2007)

9. The Bottom Line Source: Newspaper Association of America, Business Analysis and Research Department

10. Out of Circulation • Arkansas Democrat-Gazette chart • “The business model of quality journalism is broken.”

11. Newsrooms Affected

12. Who’s Reading What? – I • Main news/front page is the most widely read section among adult daily newspaper readers at 87%. • After main news/front page, men and women read the local News section most (83% & 87% respectively). • Daily newspaper readers 35-44 are more than twice as likely as those 18-24 to read circulars/inserts/fliers (40% vs.15%). • Daily newspaper readers with high school diplomas are more likely to read the classified section than those with bachelor’s degrees (45% vs. 28%) • Daily newspaper readers with household incomes under $30,000 are more likely to read sections with any advertising (66%), than daily readers with household incomes $75,000+ (57%).

13. Who’s Reading What? – II • Daily newspaper readers in professional occupations are more likely to read the entertainment/lifestyle section (52%) than daily readers in production occupations (34%). Daily newspaper readers in production occupations read the sports section more (74%), than those in professional occupations (51%). • Employed daily newspaper readers are more likely to read the sports section than unemployed readers (57% vs. 51%). Unemployed readers are more likely to read the editorial page than employed readers (50% vs. 37%). • Daily newspaper readers who are married are more likely than those who are single to read the business section (47% vs. 32%). Single daily newspaper readers are more likely than married readers to read classified advertising (42% vs. 36%). Source: NAA 2008 Daily Newspaper Section Readership Report

14. Newspapers fought back • Market sensitivity • MBA-ization • Class medium

15. …They really have! • MORE PRODUCTS/DISTRIBUTION CHANNELS

16. Readership Migrates

17. Reach Becomes More Important

18. But change has accelerated • Portals • Search • Video • Classifieds • Social media • Market mobility • Blogging • Bottom line: Ad$ declining

19. And Audience Habits Change From how we socialize. . .

20. Changing audience habits … to how we buy things . . . • Malls still dominate shopping venues, but they have lost share to neighborhood stores and to the Internet. • One-fourth of adults bought something at a local store in the past month after checking the Internet, and one in seven bought online after checking local stores. • The 25-34 age group is the most Internet-intensive for shopping-related activities; 78 percent of 25-34s with Internet access have shopped online in the past month vs. two-thirds of the 18-24 and 35-54 age groups. Source: How America Shops and Spends 2006 (NAA & MORI Research)

21. And the economy has lagged • Banks tightening credit • Companies cutting ad budget$ • Debt-financing payments loom • Newspapers’ value hits bottom

22. So, are newspapers dying? The Negatives • Internet, cells & video supreme • Gen Y vs. Boomers • Mass now class • Free > Paying • Online cheaper • Content expensive

23. Really! Are you sure? The Positives • Evolution • Charge for content • Journalism needed • Gen Y will age! • Print lasts • Online just 1 option

24. The Big Picture • Markets (and their demands) determine internal structure • Internal structure determines product & services • Product & services determine demand market Readers Circ. Ads Writers Editors Bus. Side Other Media Larger Orgs. Econ. UT-ASNE Institute

25. My thoughts • Media don’t “just happen” or “simply die”

26. What do we know? • Strategically, media firms behave much like other firms * IO (structure  conduct  performance) * RBV (assets & skills  performance • Structurally, media firms show contingency behavior * ownership structure  content

27. What else do we know? • Internally, media firms feature professional, occupational and national subcultures * culture  decision-making  routines  outcomes • Technologically, media firms rely on various approaches * economic, strategic, product development, change agent/diffusion, marketing/uses & gratifications

28. My thoughts • Media don’t “just happen” or “simply die” • Media reflect their environment, their staffing, and their structure

29. The definitional model (mess) Structure Technology Employees The Economy Routines Management Ownership Assets/Skills Culture The Audience The Product

30. My thoughts • Media don’t “just happen” or “simply die” • Media reflect their environment, their staffing, and their structure • Newspapers are an incredibly complex phenomenon

31. So what’s the real answer? • “Yes, but…” • Not your father’s newspaper!

32. Yes, but in different form • People still read • News still happens • Life goes on

33. Maybe This?

34. Or this?

35. Who knows, but: • Form doesn’t matter • Newspapers are knowledge • Newspapers are a means to an end • Newspapers are a facet of culture • Culture comes with people • People will always need news

36. Still, it’s fun to guess “At the end of the day we can’t define ourselves by our method of distribution; what we care about at the end of the day is our journalism, our quality journalism.” -- N.Y.Times Publisher Arthur Sulzberger

37. What that means: Near term • Journalism still king, but with limited value • Model du jour: Multi-platform delivery • Pay-per-view coming, slowly, in parts • Some papers or editions will die • Non-profits, niches (& CJs) fill part of gap • News goes local and “hyper-local” • It’s the economy

38. Who It Will Impact • Student journalists more than twice as likely to be headed toward a journalism or mass communications major in college than non-journalism students, but non-journalism students twice as likely to be heading toward engineering-type majors. • Nearly half of the high school journalism students enrolled in advanced placement (AP), accelerated or honors courses in English, and slightly more took AP, accelerated or honors courses in social studies and foreign languages. • Significantly fewer journalism students than non-journalism students were concerned about their ability to express their ideas in writing, their reading speed and their comprehension levels as they prepared to enter college. • Significantly more high school newspaper or yearbook staffers than non-staffers expressed concern about their mathematical skills as they prepared to enter college. Source: NAA Foundation & Jack Dvorak, Indiana University, 2008

39. You need to know • Most major professional papers have an online presence and are tweeting all the time • Professional papers have accepted these new forums to help their consumers get information (why can’t you?) • “We need to train students how to function in this new landscape.” – Starr Sackstein, World Journalism Prep School, Flushing, NY

40. But don’t panic yet!

41. What it means: Long term • Trainers caught in-between • Professionalism slave to bottom-line pressure • Less editing, more 24/7 churning • National news going elsewhere • Newspaper getting slimmer, pricier • Credibility will suffer

42. Thank you!