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March 27, 2008 By:
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Even as newspaper-lovers continue buying their favorite publications each morning and pouring over them during their commutes, the news emanating from the industry is dour indeed. An article in the Feb. 7 New York Times had nothing but bad news from the headline on down (and this was before real recession fears had set in).

"Paper Cuts" was the article's punning (though hardly ha-ha) title; it was followed by three lines, set in descending point sizes, that offered these ominous words: "An Industry Imperiled by Falling Profits and Shrinking Ads." The clever nature of the design couldn't hide the despair, especially when it was delivered in a paper itself hard hit by declines in readership and advertising revenue.

Reporter Richard Pérez-Peña began by ticking off all the other bad news around the country -- that, just in the past few months, The San Diego Union-Tribune did away with 100 jobs, which amounts to one-tenth of its work force; The Chicago Sun-Times began a round of layoffs, then put itself up for sale; and publishers in Minneapolis and here in Philadelphia issued warnings that tough times could lead to cuts in these locales, too.

This is the type of thing, noted Pérez-Peña, that would have been big news -- and would have elicited lots of industry hand-wringing -- not all that long ago. But it's become so commonplace these days that no one blinks an eye. The reporter listed the papers that have, since mid-2007, had their own bouts of downsizing, usually issued on the heels of grim accounting reports: The San Francisco Chronicle, The Seattle Times, The San Jose Mercury News, USA Today and several others.

As Pérez-Peña pointed out, talk of the demise of the newspaper is a good deal older than some of the people who report about it these day, "but what is happening now is something new, something more serious than anyone has experienced in generations. Last year started badly and ended worse, with shrinking profits and tumbling stock prices, and 2008 is shaping up as more of the same, prompting louder talk about a dark turning point.

" 'I'm an optimist, but it is very hard to be positive about what's going on,' said Brian P. Tierney, publisher of The Philadelphia Inquirer and The Philadelphia Daily News. 'The next few years are transitional, and I think some papers aren't going to make it.' "

What is at the heart of this crisis, wrote Pérez-Peña, is the fact that advertising, which accounts for 80 percent of newspaper revenue, used to rise and fall with the economy. But that link was broken over the last year or so, and few executives expect it to be repaired completely, at least anytime soon.

But what was truly striking about the piece was that, unlike ones in the past, there were no cheery forecasts saved for the last few paragraphs, where some courageous editor would go out on a limb and see a silver lining. The major point made was that everything's going on the Web. That's where the readers are, and that's where lots of ads have already landed. 

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