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The Sacramento Bee's crisis of relevance

by Ryan Sharpe, published on March 9, 2009 at 6:49 PM

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The Sunday, March 1, edition of the Sacramento Bee, included an article written by publisher Cheryl Dell entitled "It's not a lack of readers, it's a lack of advertising."  The gist of the article was that despite the Bee's growing readership, advertising revenue has fallen, forcing the paper to reevaluate its business model.  While it's never a bad idea to revisit policies when times get tough, I don't think Dell's column went far enough to acknowledge one of the biggest albatrosses hanging around the Bee's neck : the McClatchy Company.

I'm not trying to demonize McClatchy. The problem is that as a profit-seeking business, McClatchy has institutionally different goals and definitions of success than do its subordinate parts, including the Bee. McClatchy is a profit-seeking corporate entity, but the Bee is a member of our cherished free press, an institution enshrined in the Constitution and fundamental to our civil society. And though the Bee should be a civil servant in the best sense of the term, its expensive investigative reporting is going to create natural conflicts with McClatchy's profit motivation, beyond corporate editorial pressures.

For starters, consider that many papers nationwide, McClatchy-owned or not, are profitable in and of themselves but were required to make drastic cuts because their corporate owners incurred too much debt too quickly to maintain their business expansions.  While the Bee may not itself be profitable, it is hard to believe that the paper has been so hammered by the recession that it had no choice but to eliminate half its staff and cut valuable inches from the printed edition.  Not when its parent company, McClatchy, has watched its stock price drop from $74.50 in 2005 to $0.41 today.  Sacramento's primary news source is suffering because McClatchy can no longer make the payments on its purhase of Knight-Ridder.

Consider also that though it is a sound business decision to save money by adopting corporation-wide platforms and standards, it undermines the ability of a newspaper to acknowledge and embrace its city’s character. Instead of a newspaper tailored to the unique interests and values of Sacramento, we readers are treated to mostly the same diluted content as other McClatchy readers. This is especially evident with McClatchy's web properties. Given an amazing and infinitely malleable digital distribution medium, Sacbee.com is a bland pixel-for-pixel rehash of McClatchy’s Charlotte Observer. Blank out locations and names, and you could not tell California from North Carolina.

Another sound business decision is to drop expensive original reporting in favor of cheaper, already-ubiquitous feeds. These days, there are more ways to receive an AP news feed than there are AP stories, and the same is true of nationally syndicated columns. Unfortunately, the Bee does neither itself nor its readership any favors by reprinting what is already widely available and eliminating what it alone can provide: local news, local opinions, a broad and diverse forum for community discourse, and public scrutiny of local powers.

A strong Bee would measure itself in its relevance to Sacramento, not its contribution to McClatchy’s share price. This means cutting back on wire and syndication reprints in favor of a renewed focus on local stories and local issues. This means celebrating life in Sacramento. This means redesigning the paper to reflect Sacramento’s unique character. This means prioritizing investigative pieces. Where advertising is concerned, this means pushing advertising quality over quantity and providing more column inches than ads. 

As we've seen, good journalism can be severely undermined by the pressures of profits.  If a for-profit business model is failing the Bee (and by extension, Sacramento), perhaps the paper should be excised from its corporate parent and given new life under a business model that would let it get back to journalism.  That's something Cheryl Dell ought to consider.

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Dan
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March 9, 2009 | 7:13 PM
Let's see, there was a time when McClatchy and every other news company was making huge profits and they had quite a large number of investigative pieces and original reporting. Now they are making much less profit and the paper has shrunk. And yet you think there's an inverse relationship between McClatchy's profit motive and its ability to sustain a free press?
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March 9, 2009 | 7:23 PM
A while back I argued that I'd like to support the Bee in its mission to provide locally relevant information, but I didn't appreciate that the only channels available to me involved purchasing a paper I had no intention of reading. To this day, I subscribe to the Bee and recycle every copy, without opening half of them. A recent article on Slate argued that the press needs to go non-profit. I wholeheartedly agree.
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edited on  March 9, 2009 | 8:59 PM
It is looking like the Bee is going non-profit whether it wants to or not.

Matt Yglesias argues that the quality of journalism will probably rise as the profitability of newspapers falls, as happened during journalism's heyday of the postwar period. (LINK: http://yglesias.thinkprogress.org/archives/2009/01/newspapers_without_profits.php)

Who exactly, though, is going to step in and create a foundation to fund the Bee? I don't think most Americans would support a government funded media. I don't think I'd support that.

I also question how great the demand for local news is, esp. serious-minded or issue-oriented local news. Those splashy national headlines draw a lot of attention. There is probably a good reason that most of the purely local news gets relegated to a subsidiary section. It is obvious that we Sacramento Press readers like local news. But how representative are we of the population at large?
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March 9, 2009 | 9:08 PM
"It is obvious that we Sacramento Press readers like local news. But how representative are we of the population at large?"

JM actually I think that's a great question and its only my opinion, but I think the number is larger than one might imagine.
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March 10, 2009 | 12:29 AM
It does not have to be large.
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March 9, 2009 | 10:52 PM
I expect news organizations to come out on the other side of this with a funding model similar to that of public radio: corporate underwriting, foundation assistance and local support. For good measure, it would be nice if we issued some bonds to create an endowment as well, but I fear that's highly unlikely.
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March 9, 2009 | 11:38 PM
For what it's worth, I really enjoyed reading your article. I think your points are valid and this was very well-written. Thanks for your evaluation of Cheryl Dell's article and your suggestions for the approach The Bee might take, Ryan!
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March 9, 2009 | 11:40 PM
We do not allow raw HTML in our articles, that is why your HTML did not render and showed up in your text. I went ahead and fixed all of the places where you put HTML and now it renders properly.

In the future, please use the tools in the article creation toolbar to add links and styling to your article. If you have any questions about this please feel free to contact me personally, geoff@sacramentopress.com. If you have any feedback about the article creation process please send that to feedback@sacramentopress.com.
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March 9, 2009 | 11:45 PM
the future of the press? I am starting to think you are reading it right now. Readers no longer have to rely on traditional media outlets. Bloggers, Twitter, AP feeds, there's so many ways for people to get it. Citizen journalism may very well be the future of news, like it or not. It's sink or swim time...
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March 10, 2009 | 10:45 AM
Agreed that AP feeds are tiresome. I can do a Google news search and find hundreds of articles from hundreds of newspapers, all with the exact same wording. It gets old, so old in fact that I end up looking for the handful with different wording, just to try and get a different take on it, rather than the same ole same ole.
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March 10, 2009 | 11:31 AM
I'm with sactomaya. The Bee needs to focus on making its core competency local information. Everything else is extraneous and better managed by other providers. Without strong, relevant, and useful local content, why would I read the Bee, and more importantly, pay for it?

Personally, I think the only way for the news industry to survive is to charge for its content, whether it is online or in print. The overhead in delivering printed information is enormous, and that means the end product requires a high price point. An online-only platform is cheaper, which not only means the readers need to pay less, but also it allows more money to be put towards generating good content. Newsprint is an unsustainable business model for the Bee and I think it needs to move to an online-only model. Advertising will provide some revenue for this, but subscriptions will need to continue. But if the Bee wants to charge for its online services, it had better provide a lot more robust, relevant, and useful local content. Otherwise it is dead.
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March 10, 2009 | 2:21 PM
Why should I pay for content online?
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edited on  March 10, 2009 | 3:11 PM
That attitude (which I share) is the exact problem; consumers are notoriously unwilling to pay subscription fees for most online content, and it's impossible for any organization to keep a subscription lid on what they publish. Besides, citizen-journalism only goes so far; we still need full-time professional investigative journalists, and that's not exactly cheap. I highly doubt that an ad-supported online presence would be enough to keep the lights on at the Bee.

It's a vicious cycle: to fund its operation, a newspaper needs a strong subscriber base, which isn't going to develop online. As sactomaya suggested, the Bee might want to look at the revenue models that sustain public radio and TV, or perhaps look into endowments, as for-profit incorporation has done it a grave disservice and it can't survive with online-only revenue.
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edited on  March 10, 2009 | 8:41 PM
We shall see what happens over time, but this I can tell you for sure: your subscriptions do not and never ever paid for investigative reporting. Subscriptions do not even cover printing and distribution of papers.

I think we all need to take a hard look at exactly what costs what in a newsprint operation.
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March 11, 2009 | 2:53 PM
Production costs aside, you can't discount the advantages of a growing base of 300,000 paid daily subscribers, in terms of direct revenue, advertising leverage, and classified leverage.

Unfortunately, without hard numbers in front of us, we're not going to be able to find that service-to-costs balancing point where the Bee can break even or profit. And as I suggested in my article, one of the pertinent numbers is how much revenue McClatchy has been sucking out of its flagship paper.
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March 11, 2009 | 5:29 PM
I know someone who is now being paid $50 to keep his subscription to The Bee. The Bee is not growing its base of subscribers and now has to pay to keep the subscribers they have.

And you can't dismiss production costs as they are enormous!

In terms of advertising leverage and classified leverage there is no question that online operations offer more value to advertisers. See Craigslist.

Sorry to say, but subscription fees just do not pay for content and they never have. At best they pay for distribution.
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March 10, 2009 | 6:17 PM
Like it or not, profit is the way it is, and frankly I have no problem with that. The Bee has a responsibility to it's owners to be a viable entity, and to provide a return on investment. On the flip side, owners have a responsibility to provide the tools and funding to the Bee to be able to produce a "quality" product. Unfortunately the current business model is not working, and more cuts are being made. Cuts will continue until a balance is found or the Bee shuts down. I feel the key to success will be to remain a daily paper, with home delivery. They will have to provide a rationale to advertisers to utilize the Bee to get their message out. Unfortunately appealing to (not trying to be snobby here, but short on time) a caring / "sophisticated" audience seems to be the hard way to attact an audience (Jonas Bros., Zoolander....) The Bee will have to adapt their model to reach a broader audience. I think reducing subscription fees dramatically (perhaps $5.00/mo) and increasing advertising could be a way to go. - Something like SN&R but on a daily basis, focusing more on "news". Sections will need to be added and deleted......I also think reducing "bias" will be another point to their success.... I really like flipping the pages of a daily paper in the morning - I want that tradition to continue, and all those who lost their job be re-hired and more. The Sac Press is great, and I hope they find a way to create the income necessary to grow & to begin to pay the staff what they deserve. There is room for both formats & hopefully they can compliment and support each other. - gotta run..
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