-People are not going to pay for a product they can get for free on the internet (believe me, I know what they are talking about).
-Reading habits have changed. People have fallen out of the habit of reading newspapers.
-Newsprint costs have risen dramatically over the years.
Those are all legitimate reasons. The business model for newspapers that once allowed the products to bring in profit margins of as much as 30 to 40 percent no longer exist, but blaming these outside influences is allowing these newspapers chains that have gobbled up nearly every newspaper in the United States (and shuttered many of them) to blame these outside influences and not look inward toward the cause of their problems, including the cause that looms larger than the rest.
Greed, pure and simple.
The business model for companies like GateHouse Media and Gannett has been a pyramid scheme that never had a chance of succeeding in the long run, but served to provide short term outsized salaries for upper management and dividends for stockholders who did not care one bit about the negative effect the business practices were having on the communities they were supposed to be serving.
The idea was to buy as many newspapers as they could, concentrating on buying the newspapers in a specific region, then consolidating services.
Newsroom jobs were cut dramatically, causing the daily product to suffer.
The Neosho Daily News and Carthage Press went from having newsrooms with five people to essentially having one person doing sports and one person doing news. No longer were they dailies. Their publishing frequency dropped from six days a week to five, to two and one.
Events that had always been covered in person were no longer even mentioned in the pages of these venerable newspapers that had served their communities for decades and in the case of the Press back into the 19th Century.
That was shortsighted and it is what you hear about most when you hear about what has been done to newspapers.
What you rarely see mentioned in these post mortems on the condition that the newspaper industry finds itself in is the cuts these companies made to the business ends of their operations.
They eliminated advertising sales and circulation petitions. They made their money by buying more and more newspapers, consolidating operations and cutting positions.
As new businesses opened, many of them never saw an advertising salesperson. Older businesses that had always budgeted money for newspaper advertising fell out of the habit when it became apparent that newspaper companies were no longer interested in working with them in a mutually beneficial relationship.
Instead of in-person visits, the remaining ad salespeople were encouraged to sell a never-ending series of useless special sessions and salutes to everything from proper automobile maintenance to Arbor Day.
Salespeople did not check on whether businesses had particular items they wanted emphasized or sales. One-shot ads were no longer sought. Instead, ad salespeople were told to get signatures on the dotted line for contracts requiring businesses to buy a certain amount of advertising over a six-month or one-year period.
As the cuts in newsroom coverage had the expected effect on circulation, rather than put money back into the product and improve it, the cuts continued. Ad departments were slashed, circulation departments were gutted and the newsrooms were trimmed to almost nothing.
Publishers who were once deeply involved in their communities now no longer even lived there, but served as publishers for as many as a dozen communities. Most people who had a complaint about the way the newspapers were being operated had no idea of who was in charge.
Eventually, even editors served several newspapers and made decisions on content from communities they did not even know.
Then, hypocritically, they threw up their hands and blamed the communities for no longer supporting their newspapers.
The miracle is that the communities have continued to support them as long as they have
All the while, companies like GateHouse Media and Gannett continued to buy newspapers and slice and dice them until there was almost nothing left.
Or in the case of GateHouse and the Carthage Press, they buried it, shut the doors and cheerfully left as if it were no big deal.
Monday, the announcement that GateHouse and Gannett merged with GateHouse paying $1.38 billion to acquire the owner of USA Today and the Springfield News-Leader.
Soon, the next round of cuts will begin and the death spiral of these short-sighted companies, now linked as one, will continue.
All they did was perhaps to delay their extinction.
Think about what $1.38 billion could have done if it had been used for rebuilding newsrooms and advertising and circulation departments, perhaps with a new concentration on digital products.
Now that the two largest newspaper chains in the United States have merged, there is almost nowhere left to go with the pyramid scheme they have used to climb to the top of the bottom feeders.
The entire industry is on life support and GateHouse will be content to play the Jack Kevorkian role.
No comments:
Post a Comment