The scope of the problem for newspapers

Printing press at the Boston Globe.
Photo by Matt Rocheleau.

The newspaper industry is in the process of a painful evolution. The past year has seen the closure of the Rocky Mountain News and the Albuquerque Tribune. The Tribune Company, owners of 12 newspapers, including The Chicago Tribune and The Los Angeles Times, filed for Chapter 11 bankruptcy protection in December. The Christian Science Monitor moved to an online only format in March. Even The New York Times was forced to borrow money against its Manhattan office building – well before it threatened to close one of its other assets, The Boston Globe.

From October, 2008 through March, 2009, 395 daily newspapers reported a drop in circulation on average of seven percent from the previous year, according to a report issued by the Audit Bureau of Circulations. The Globe was down by 13.68 percent, The Times by 3.55 percent. The New York Post suffered the greatest loss at 20.55 percent, while another News Corporation publication, The Wall Street Journal, was the only major publication to report an increase – 0.6 percent. But the decrease in circulation is only one of the factors plaguing the struggling industry.

The classified ad department at the Boston Globe is a shell of its former self. The large room is full of empty cubicles. Computer desks have turned into storage spaces with nothing to store on them. A staff previously numbering over 150 is now in the teens. Large signs above either door leading out of the ad department boast of its former glory, declaring the generation of $80 million in ad revenue in 2003.

“We are losing a million dollars a week,” said one staffer. “Craigslist is our largest competitor.”

Classified advertising has long been recognized as one of the main sources of revenue for the newspaper industry. With the rise in popularity of sites such as Craigslist, papers are now losing a large chunk of money. An employer in the Boston area can choose between placing a seven-day ad on Boston.com and one in the Sunday Globe for $367, or paying $25 for a listing that will run 30 days on Craigslist. For car sales the disparity is slightly less– ads start at $39 on Boston.com and are free on Craigslist.

Craig Newmark, founder of Craigslist, said in an e-mail interview that suggestions his site has affected newspapers’ revenue stream are “largely an urban legend.”

Doug Kohl, Public Relations Consultant for Craigslist, said, “It is our understanding that the downturn in revenues has been primarily due to display ad sales and print circulation, which are both things that Craigslist has no influence over,” also in an e-mail.

Editorial content is available online for free. Ad space is available online for free – or at a minimal cost. Both circulation and ad revenue have plummeted. The newspaper industry, without adaptation, could soon be engulfed in the World Wide Web of destruction.

Smaller, more locally-oriented newspapers and Web sites – such as the Springfield Republican and its online offshoot MassLive – are adapting, finding the Internet as a way to develop a more intimate relationship with readers and also create a revenue stream away from traditional print media.

“We have to prove (to the Republican editors) there is revenue in editorial decisions,” said Ed Kubosiak Jr., Editor-in-Chief at MassLive. “We have to show there is a sales opportunity for project ideas.”

The online format allows MassLive the space for more in depth features, especially those utilizing user-generated content, than are available to its parent publication. These features will often draw in local advertisers whose companies would benefit from the feature-oriented advertising.

To cover local proms, the Republican would traditionally send out one or two photographers who would snap a few pictures then move on, according to Kubosiak. A few of the pictures would appear in the print edition of the paper and the coverage would end there. Online, MassLive has the capability to host hundreds of prom photos, most submitted by the students themselves. Most of the content costs MassLive nothing and they were able to sell advertisements to local prom-oriented businesses. The combination of user-generated content and a positive revenue stream is one way for news sites and newspapers to remain economically viable in these troubling times, but are not the final solution.

“I would love to figure out the business model that is going to save our profession, and be a part of it,” said Kubosiak.

Boston.com is seeking to learn from the success of local sites like MassLive. According to Director of Community Publishing, Teresa Hanafin, Boston.com has never had a shortage of user-generated content. Anytime there was a call for community participation, the readership was quick to chime in – often sending photographs and actively participating on forum boards. To harness this participation, Boston.com started smaller community oriented sites under the banner “Your Town.” The site currently hosts four smaller sites dedicated to communities in the Boston area.

“We were one of the last in the game (of hosting town sites), but we learned from other sites that have done it in the past,” Hanafin said. “Their traffic has continued to grow month by month.”

The success of the town sites has led to the creation of a site dedicated to mothers and a site featuring amateur photography. Like Kubosiak, Hanafin has found as online content expands, a revenue stream must be involved.

In the early 2000s, Hanafin said, the staff could just build a site and the advertising arm of the company would then try to sell space on it. If it did not work, they could just take it down.

“Now you have to prove the business model before anything gets launched,” she said.