[Previously]  -- The Journal and The Chronicle. Two good national newspapers. Different management styles, different backgrounds, different ways for handling the digital era. For both, 2008 proved to be a tough challenge (Part I is here). Unfortunately, all we’ll soon see, 2008 was comparatively easy.
.

2009-2015 -- Near-death experiences (and experiments)


.
January 2009 -- At the Journal, a quick situation assessment:
No surprise, here. It's bleak: for the entire year, advertising revenue is down 19% for print and copy sales revenue dropped by 4%. Overall, print revenue is down by 15%. Online revenue grew by 13%, but since it represents slightly less than a quarter of the total operations, the entire company revenue is down by 10%. Profit is gone. The group is in the red, its core business bleeding and no immediate improvement in sight.
.
At The Chronicle, the situation is somewhat better. Copy sales are stable (thanks to an aggressive subscription campaign), print advertising is holding better (-15%, instead of -19% for its competitor), and online advertising is growing fast. The overall revenue is down by 9%, one percentage point better that The Journal .
.
One key difference, though. The Journal owns a much bigger online portfolio than the Chronicle does, thanks the previous year acquisitions. They own a dozen of interconnected brands, many of them not news-related (again, see Part 1 for details). By comparison, The Chronicle's online business is three times smaller in revenue, with cash coming only from display and search-related advertising.
Key figures look like this:
-    The Journal gets 24% of its revenue online; each time it gains 1 dollar on its digital activities, its print operation loses 5 dollars
-    The Chronicle only makes 9% online, then -- even though it is doing slightly better with its paper -- each time it gains a dollar online, it loses 10 dollars in print.
We are looking at a full year here; the situation is actually much worse with monthly data showing an accelerated deterioration.
.

As a first measure, the board of the Journal demands a global salary cut of 10%. The effect will be much faster than the classic staff reduction that takes a year to benefit the P&L. The board is rather blunt: "... a) do it now, no procrastination allowed here, say the directors; b) in the process, manage to flatten the salary curve a bit. Yep, biggest paychecks will take the biggest hit, this will make cuts more socially acceptable and help with the esprit de corps at the company; c) don't tell your people we are doing this to avoid staff reductions, we might be forced to do that later this year".  Management is left with no alternative and is also asked to come back within a month with a comprehensive set of cost-cutting programs.
.
No such reaction at The Chronicle. The "one-dollar-gained-ten-lost", moving from print to online, left the management in disarray.  Rushing to online? OK, but there are hurdles: without a proper copyright agreement, The Chronicle doesn't have much control on its content. If the company wants to value its news material on others platforms, or with partners, the entire production staff is entitled to a piece of the action.  And even if the staff relinquishes this right, case-by-case negotiations will be tortuous and lengthy. Plus, many journalists have valuable blogs and other editorial presence outside the company. Massaging the whole thing into a valuable asset will take forever.
.
At The Chronicle, taking action on the paper side seems much preferable. In less than 9 months, management reduces the number of pages, proposes a "subscribe-à-la-carte" system, in which people can select the day they want for the paper to be delivered (sports, business, features, culture). They also increase free distribution targeting audiences that are more valuable to advertisers. In the end, more than 50% of The Chronicle will be free. This "hybrid model", as it’s called, is clearly a bold move.
.
2011, the untold online shift
.
Even bolder is The Journal’s decision to proceed with what they call "a progressive switch to digital". This is decided in the middle of 2011, after almost two full years of recession in which all media groups have shrunk dramatically. As viewed by The Journal, the paper business model is no longer sustainable in its traditional form. As a first step, local and regional online coverage are beefed up. Legions of bloggers and local independent micro sites are enlisted to form what becomes a cluster of dozens of regional websites, heavily promoted in the paper itself and through local media outlets. At the time, everyone wonders why the The Journal is so assertively cannibalizing itself.
.
The answer comes in the Spring of 2012: The journal announces that, from now on, its paper version will only be available in major cities. Other readers will rely on a cascading system of websites proposing news coverage of an unprecedented granularity. In the process, the circulation of the paper is cut by 40% overnight -- this was the most expensive part of production and distribution. In the meantime, thanks to its clusters of news sites, The Journal’s footprint and audience are larger than ever. The ad market, in the early phase of a slow recovery, praises the move.
.
As for The Chronicle, the transition towards the hybrid model yields three unintended consequences. First, the transition improves demographics, which is potentially good, but because of the recession, has no effect on advertising, whether it is volume or prices. Second, at the same time, copy sales revenue drops sharply: people grab ten copies of the paper when they find a free stack and do a secondary distribution at the workplace. Last but not least, The Chronicle faces an outcry from its faithful readers: they criticize a "cynical business move" where the paper is free for the affluent (i.e. valuable advertising-wise) and paid for the rest of the populace.
.
Facing a revenue squeeze and a bad image, The Chronicle is considering its options. Its subscription strategy, and the marketing that went with it, have accentuated its audience segmentation. Fact is: the paper makes money two days a week, is barely breaks even for another day, and bleeds money the three remaining days. A decision is therefore made to slash the number of issues to only three days a week: Monday with big sports features; Thursday with an emphasis on politics and society, and Saturday with rich features, cultural and urban guides. In the process, another 25% of the staff has to go. After four years of alarming losses, The Chronicle is slowly coming back to break-even, even though restructuring costs led to a loss for FY 2013.
.
By the following year, the two newspapers will have completed their shift. The Chronicle
will soon give up the Monday and Thursday publication and will become a free quality weekly supported by an excellent, breaking news, website. As for The Journal, it will shift to a full online publication, offering a vast range of contents, from international to hyper-local news. No more paper.
.
The end of the News as we knew it
.
By the end of 2014, the global economy has recovered somewhat, but the media landscape has been forever altered. In the United Sates, a third of the newspapers are gone. Google Media owns 52% of the New York Times (the rest being in a trust, no more publicly traded shares). Gmedia, headquartered in the Times Renzo Piano's building makes tons of money selling ads on the 87 websites properties of the NYT Digital (the paper is still published in five cities in a 32 pages tabloid format). In several countries, pure players have emerged in the political and business fields. Pro Publica, the non-profit news site has become a major provider of quality journalism. In Scandinavia, the vast majority of people are getting their news on mobile devices and on the Net.
.
In France, many newspapers are still on life support, but everyone is used to it. Libération, once he front runner in the Gallic politicized left wing journalism just changed its name to "Libe89" after being acquired by the Rue89 Group. This media outlet has developed a chain of highly segmented (and profitable) pure players. Le Monde is virtually nationalized with the same ‘friends of the State’ shareholders as the Agence France Presse. Its management has remained reasonably independent given the circumstances, at least from its journalists' standpoint, the readers being slightly more doubtful.
.
The worldwide news stream is now split in three tiers:
-    Commodity News, available everywhere more or less at the same time. It is read and viewed mostly on Intelligent Mobile Devices. IMB adjust the flow of news to reading patterns in real time thanks to a Google-patented system called DINC for Dynamically Individualized News Cycle. With DINC, you adjust the level of serendipity you desire. This flow is provided by Internet pure players (some of them former newspapers such as The Journal) that sometimes also publish a free papers in selected cities
-    Value-added news, a niche and paid-for segment. Good journalism, but definitely a "Class Market", mostly for the elite and seniors (in French: old people). These are either urban multiweeklies or pure-player websites.
-    Participatory mash-up. Rumors and facts are mixed and flow into social networks, RSS feeds and widgets. Hugely popular among youngsters. The "News" part is mostly provided by advertising agencies and commercial brands. This is where the money -- and the true influence -- is.
.
Not related (really?): In the 40 largest democracies in the world, the extremes of the political spectrum, right and left, accounts for a dreaded 35% of the votes.  Each general election is now seen as a chilling gamble. --FF
.
.

Print Friendly