The auto industry is not the only one in Detroit that is hurting badly. The Wall Street Journal reported today that The Detroit Free Press and The Detroit News will cease home delivery four days a week. The two newspapers are independently owned (by Gannett and MediaNews Group, respectively) but operate under a joint operating agreement that handles business operations for both papers, including delivery.
It’s no surprise that newspapers have been hurting, but the Detroit papers seem to be failing faster than those in other cities. Circulation of the papers is down between 15% (Free Press) and 22% (News), a long term slide that has no doubt been exacerbated by the troubles particular to Detroit’s major business.
The official announcement, expected next week, specifically refers to home delivery, suggesting that the papers will continue to print hard copies daily, with distribution limited to newsstands the four non-delivery days. The digital versions will continue as well.
I would have to assume that, if this comes to pass, the green eye shade folks have figured out the savings for this half-a-loaf strategy. I need to be convinced. If they do indeed still turn the presses every day, then the only savings are the variable costs of ink, newsprint, and delivery costs for the home delivered copies. All other fixed first copy costs stay the same. Subtracted from the savings is the lower advertising rates that could be charged for those days, reflecting lower circulation. The cut back is expected to be accompanied by a dramatic redesign of the print editions, which may have some cost implications. I guess we should wait for the details to make a final judgment.
The pending announcement makes very real the current virtual office pool in media circles, the winner being closest to predicting when the first major city newspaper would announce it would become an online-only service. Indeed, we may have a winner. in his column last week on media predictions for 2009, Business Week columnist Jon Fine included this precocious prophecy: “More than one newspaper in a top-100 market ceases publication or reduces its print edition to something unrecognizable as a daily newspaper.” Had he heard the scuttlebutt about Detroit, or is he just that good? (Fine also wrote “At least one recent, heavily leveraged media deal—Tribune, Univision, Clear Channel, the Minneapolis Star Tribune, I could go on—goes bankrupt. A week later the Tribune company did file for Chapter 11, though that debacle was a bit more foreseeable).
Two months ago, the Christian Science Monitor announced that it would become a weekly in print, along with its continually refreshed Web version. The Monitor has long been suffering so it was even less a surprise that the Tribune filing.
Still, this is quite likely the start of a trend. Some publishers may be emboldened by the Detroit plan to move ahead their own online-only strategy. Others can wait and see how it works out for Gannett and MediaNews, then either follow suit or decide to find other ways to cut costs. My own prediction (drum roll please) if that over the next two or three years more dailies will move to a hybrid platform, akin to Detroit, with less than daily delivery or even printing. The early trickle could become a stampede by the end of the decade, regardless of how fast the economy recovers. Newspaper economics are changing.
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