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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.
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?
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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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.
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.
I think we all need to take a hard look at exactly what costs what in a newsprint operation.
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.
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.