Tuesday, Aug. 11, 2009

Is a better day ahead for newspapers?

By Ken Robertson, Herald Executive Editor

Signs that the economic fortunes of newspapers are starting to turn around are emerging as the recession’s grip on the nation’s economy recedes.

Both the Gannett Co. and McClatchy Newspapers, which owns the Herald, have reported improved earnings over a year ago, admittedly because of severe cost-cutting.

But it’s a start.

In addition, a late-July report in Columbia Journalism Review notes that 100 million people in the U.S. still pick up and read a newspaper. And it says these folks add up to a much more assiduous group of readers than their online counterparts.

The article’s author, Ryan Chittum, in comparing the amount of time spent by online newspaper readers vs. print newspaper readers, calculates that readers of the New York Times spend about four times as much time reading the print version as the online version.

Then he notes that since an estimated 2.2 readers spend time on each printed copy, that means readers still devote more than eight times as much time on print as on the web.

Chittum’s bottom line numbers, after he reduced that 2.2 to 1.6 readers because some may be skeptical of an estimate provided by the Newspaper Association of America and made some other adjustments, still came out as strongly favorable to newspapers.

The nation’s five top newspaper websites, he calculates, draw just over 12 percent of the total reading time spent on the newspapers and their websites. The print side grabs 88 percent.

And he also notes that advertisers much prefer readers who pay for their content.

There are tough questions to be asked about this analysis, and many will reject some of its assumptions. Still, for those who care about the news, it makes an important point.

Worth adding to this mix is a new forecast by Borrell Associates, “a research and consulting firm that tracks local advertising.”

Parenthetically, I would note that not all newspaper executives are thrilled by this firm’s previous forecasts. But Borrell is forecasting a rebound in newspaper advertising over the next five years.

Borrell expects it to start slowly — 2.4 percent growth in 2010 — and grow to a total of 8.7 percent by 2014. Not a thrilling ride, but it looks lots better than the 20 and 30 percent declines many papers have seen in each of the last two years.

And, Borrell says, it will be a large enough gain “to increase newspapers’ total share of total ad revenue 1.5 points.”

Meanwhile, the firm expects newspapers’ competitors for ad dollars to struggle even more, with revenues for yellow pages, TV, radio and direct mail all plummeting.

And, by the way, if you’re wedded to using those telephone directory white pages, you better learn a new skill. AT&T wants to cut 10 million pages of print costs by going to request-only books. That can’t help yellow pages advertisers.

w Ken Robertson: 582-1520; krobertson@tricityherald.com

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