A Sign of the Times for Printed Newspapers?

Implications: Gannett’s decline may represent the future of printed mews media.  The challenge for the printed news media is remaining a financially viable sector.

Analysis: You would imagine that the Internet would have completely replaced the newspaper by now.  The Internet provides near real time news stories and sometimes live news feeds (like television).  The newspaper is old by the time it gets printed.  So why bother even buying a newspaper.

I am not a newspaperman.  I am a telecom and media professional.  I am also a reader of printed newspapers as well as a reader of online news.  I am a consumer.

If you look at Gannett’s numbers you would think they are representative of an industry.  You would be largely correct.

Gannett reported in early February 2008 that ”… total pro forma operating revenues for the twelfth period ended December 30, 2007, declined 24.1 percent. The twelfth period in 2007 spanned the usual four weeks compared to five weeks for the twelfth period in 2006. Therefore, comparisons are not fully representative of current trends. A schedule summarizing revenue trends excluding the extra week in 2006 has been included with this release. Total pro forma operating revenues would have been 10.8 percent lower excluding the extra week in period twelve in 2006. Pro forma assumes that all properties presently owned were owned in both periods.”  This was reported by Gannett.

Gannett also reported that newspaper advertising revenues in December 2007 were 26.4 percent lower compared with the same period in 2006.  All Very Bad news.

If you look at numbers like that you would think the printed news industry was dead or is dying.  I would disagree.  I believe there is still life left in the printed newspaper business.  Oh at some point technology will find a way to completely replace the printed newspaper but not right now.

Gannett is a large news corporation and yet Gannett newspapers tend to be locally/regionally focused.  To Gannett’s credit they make their local papers look local.  Excluding USA Today, you can find stories about your small town in a Gannett newspaper.  I believe that Gannett understands that at the end of the day the most significant stories are the one about your town.

The challenge facing Gannett is trying to find a way of better slicing that local niche market.

It may become necessary for Gannett to change its target audience for a newspaper.  There are many successful ethnic newspapers that generate positive profit margins.  Gannett will need to find a way to balance its online news content with that of its printed news content.  The printed newspaper could be used for in-depth story analyses.  The online news content could be focused on real time stories occurring in various locales.  The printed newspaper business segment and online news business segment could charge for their services.  Each sector is intended for different audiences.

All this would mean that the printed newspaper’s format would have to change and the types of stories pursued might have to change.  It sounds like I am proposing a weekly magazine format; I am not.  I believe that the Internet has commoditized news.  This new environment is forcing printed newspapers to seek out a different audience or at the least better define the needs of their current audience.

Unless Gannett can better define their readership they will see continuing declines in reader subscriptions and advertising revenues.  Advertising revenues will be predicated on the newspaper’s ability to identify and sell newspapers to the target audience.  The key to Gannett's advertising revenue is: understanding the paper's demographics.