Friday, Oct. 30, 2009

Keeping newspaper numbers in perspective

By Ken Robertson, Herald Executive Editor

Newspaper readers often chide newspaper editors for allowing stories to focus too much on gloom and doom.

And sometimes the readers are right.

As a case in point, I’ll cite the latest round of reports on falling newspaper circulation numbers.

Yes, it’s true that the average weekday circulation at 379 newspapers — out of the nation’s 1,408 — fell an average of 10.6 percent to 30.4 million copies in the six months before Sept. 30.

And that’s certainly not cause for celebration if you work at a newspaper or are a devoted newspaper reader.

But the stories I saw all ignored a couple important factors. Newspapers have been pruning far-flung circulation for several years because it costs too much to deliver and delivers too little revenue to justify the costs. And those readers can now received news online... through e-editions like the Herald offers.

And the national stories made no attempt to delve into how the sluggish national economy has affected newspaper circulation.

At the Herald, for example, we cut off about 1.5 percent of our circulation — about 600 papers — in the last year because it cost too much to deliver them to areas in the Columbia Basin.

We hated to do it, but it just didn’t make financial sense when gasoline costs have skyrocketed as advertising revenues slumped.

Many other newspapers have made the same kinds of hard decisions.

They also have raised subscription prices, which the Herald also has done, because declining advertising revenues could no longer underwrite as much of the costs of delivering the printed paper.

How much of the 10.6 percent can be blamed on the decision to cut unprofitable delivery, the subscription price increases and the recession? I doubt anyone knows.

But when people are making double-digit cuts in their spending on autos, houses, luxury clothing, jewelry, travel, restaurants, hotels and motels, the increase in subscription costs has to have had an impact.

And I have a bit of anecdotal evidence to back it up. A few subscribers I have talked with have admitted they halted every-day delivery of the paper because their households had fallen on hard times, even in the Tri-Cities, where the economy has remained solid and unemployment is only 6 percent, compared with 9.3 percent statewide and 9.8 percent nationwide.

Stacked against those numbers, 10.6 percent takes on a different light.

And as evidence that a stronger economy would have helped, I would cite the Herald’s numbers.

Our Sunday circulation slipped 5.7 percent, our daily 7.8 percent. Subtract the 1.5 percent that we cut on purpose, and the erosion is 4.2 percent Sunday and 6.3 percent daily.

Those are daunting numbers, to be sure, but let’s take a look back at what happened to newspaper circulation between 1940, when the U.S. was just emerging from the Great Depression and 1945 when World War II had ended and the economy had fully recovered.

The numbers reported by the National Association of Newspapers show circulation nationwide jumped from 41.1 million to 48.4 million, a gain of 7.3 million households. That’s a 17.7 percent gain, or just slightly better than 4 percent annually during the war years.

Right after the war, those gains accelerated, despite the emergence of television.

That’s not to suggest newspapers face a rosy future. But it does offer some historical evidence that it may not be altogether bleak.

And combined print/online newspaper operations are generally outperforming web-only outfits.

McClatchy Newspapers, the parent corporation of the Herald, reported for the third quarter that its overall revenues were down 23.1 percent, but online revenues grew 3.1 percent and print circulation revenues by 6.7 percent.

And it’s worth noting that without the huge declines in the jobs category of online advertising, the rest of the categories were up a combined 28.4 percent.

Overall McClatchy reported its net income for the quarter grew to $23.6 million, compared with $4.2 million in 2008.

Again, it’s not thrilling compared with 10 years ago, when, as newspaper executives used to joke, “Even your crazy uncle could make money owning a newspaper.”

But it’s not all doom and gloom. And those national reports did need some perspective.

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

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