What's Wrong With Tribune's Math

So, it's clear, that Randy Michaels knows how to draw attention. His 50/50 ad/news plan isn't exactly revolutionary, but it's become a lightning rod for the news industry, as it comes to grip with near-death experience.

Two weeks ago, Rupert Murdoch opined that print would outlive him, lasting (print!) another 20 years. Today, we had Steve Ballmer providing the half-life of 10 years for the newspaper, though the combo of the self-serving nature of the comment and Microsoft's Internet track record hardly make us mistake him for Nostradamus.

You can read MediaNews' Dean Singleton saying "It's time to get over it and move to a print model that matches the times." McClatchy's Howard Weaver, in a worth-reading Sunday post (the industry is really going 24/7!), was candid about the decline:

Revenues continue to be bleak, and it is increasingly apparent that fundamental shifts in competition and audience (combined with cyclical economic woes) demand permanent structural changes. Though many encouraging signs point us toward future success (total audience and online revenues are indeed growing at double-digit rates, for instance) the overall picture is undeniably changing.

Put it plainer: newspaper companies will make less money, get smaller and face greater competition. As a result, we’ll have to become more efficient, make smarter choices and allocate resources to our essential activities.

Overall translation: It's The End of the World As We Know It. Get Over It.

That's a big turning point, and it is now sinking in universally.

So now is the time to sort out real solutions from ersatz ones, an exercise that will consume many of us for a good while.

Which brings us back, most immediately, to Mr. Michaels' halfsies proposition.

I consulted one of my best sources, a highly experienced ad director -- we'll call him AdMan, to protect one of those still industry-employed.

He doesn't think much of the Michaels' plan.

"It's nothing new that he is proposing. I don't know how many long meetings I sat through, looking at sectioning, looking at how to run the paper more economically.....I'm skeptical he can take pages out [we believe Tribune wants to cut another 500 pages chain-wide each week] and do it in strategic ways. Fundamentally, he's right, but Macy's is going to say you're not going to put my ads in the B section."

So AdMan gives an ad view of page make-up that is highly instructive. First, let's start with this irony. For decades, newspapers have sold advertisers on the value of the A section. Most read -- let us show you the Scarboroughs. Advertisers lined up for the A section with page-dominating ads. They don't take kindly to being placed on "composite" pages, in which ad butt up against one another.

The irony: in the digital age, it's the traditional content of the A section -- national and international news -- that's least useful. That stuff is commoditized, universally available online, and offering practically no distinctiveness under the local newspaper brand. So newspapers have built a print business around their now least-valuable-print content. And yet when calls to re-section surface -- Carole Leigh Hutton's sudden disappearance from Singleton's Mercury News comes to mind -- they're dissed as "radical."

Anyhow Metro, Business and Sports sections have already slimmed down, and whichever advertisers that have screamed the least have been placed there. In many papers, there's just not much room left in the traditional sections of the paper.

So AdMan says that to achieve a 50/50 balance, compared to the more traditional 60 (news)/40 (ads), the choices are limited, says AdMan:

---"Flow" ads around Op-Ed page content, one of the few pages left untouched by ads;
---Whack stand-alone feature sections like Food, Health, Weekend, etc.
---Or make advertisers "do something different," meaning accept placement that seems less valuable to them

Door number 3 looks particularly perilous as ad buyers look for new rationales to move budget from print to online. Door number 2 drains away the kind of niche content that's useful to readers and most highly monetizable online. Door number 1 helps a little, but further diminishes the perception of a newspaper's strong community identification.

It's literally and figuratively true: the doors are closing. And "don't let them hit you on the way out" might be a message from the latest round of downsizings.

Something's going to have to give. We've heard the estimate that Tribune might save 18% or so on newsprint if it can implement the new ratio. But Goldman Sachs recently estimated that newsprint pricing will go up 20% in the second half of the year. That's a lot of hard work of cutting -- diminishing circulation and advertising necessarily at the same time -- to essentially stay in place, budgetarily.

Gawker, responding to my Monday post made its call: "Our BOLD prediction: "The four-day print edition (Wednesday, Thursday, Friday, Sunday) will arrive in mid-major cities in the next 5 years."

I think that's right. The new daily paper is the web and the print is rapidly becoming a mostly-daily, sometimes-on-Sunday niche.

Comments

[Michael Hill]

You buy the local-local-local mantra with no skepticism. Perhaps the advertisers what want A section placement know something -- that readers want national and international news, that's one of the main reasons they buy the paper, no matter what people say about commodification. What do you think more readers want, a story about Barack Obama or a story about a broken sewer in someone else's neighborhood?

[ed]

Confusing the problem is that many papers sell ads on a guarantee to companies that their ads will brush against news copy. It is difficult enough to do that with a 60/40 ratio, but with 50/50 impossible without major redesign of the paper _ and difficult even then. Also expensive. Scrap the brush against news promise and you lose your advertiser who believes the odds that his placement will be seen improves when it next to a news story. Michaels is a radio guy, not a newspaper guy, and I'm not sure he understands the groans and cries of agony that will rise from the editorial and arts departments, to the press room, when you try rearranging things.