From The Economist - full story here

Newspapers have escaped cataclysm by becoming leaner and more focused

Jun 10th 2010

“PRINT is going to live longer than people think,” asserts Mathias Döpfner, the boss of Axel Springer. Perhaps it will in central Europe. The publisher of Bild and Die Welt recently recorded the most profitable first quarter in its history. The profit margin on its German national newspapers is a startling 27%. The firm is expanding into Poland. If newspapers are in crisis, Mr Döpfner says, he likes crisis.

A year ago the mere survival of many newspapers seemed doubtful. It had become clear that the young, in particular, were getting much of their news online. Readers were flitting from story to story, rarely paying. Advertising too was moving online, but not to newspapers’ websites. Rather, it was being swallowed by search engines. The classified-ad market was ravaged by free listings websites such as Craigslist. A deep recession, received wisdom had it, would surely finish off newspapers, which have high fixed costs in the form of journalists and printing presses.

In some ways the pain proved even greater than analysts expected. The Newspaper Association of America reports that print and online advertising has fallen by 35% since the first quarter of 2008. Circulation has dropped alarmingly too. Yet almost all newspapers have survived, albeit with occasional help from the bankruptcy courts. American newspaper firms like McClatchy stayed mostly profitable even as revenues plunged (see chart). Some companies are now worth ten times as much as in the spring of 2009, although they remain far from pre-recession heights.

Steep cover-price rises have helped. But for the most part newspapers have cut their way out of crisis. In the past year McClatchy reduced payroll costs by 25%. Many publications closed bureaus and forced journalists to take unpaid leave. There have been clever adaptations, too. At Gannett, another American firm, 46 local titles now carry national and international news from USA Today, the firm’s national paper. A group of New Jersey newspapers jointly produces features and editorials. Bob Dickey, who runs Gannett’s community papers, says they have realised there is no need to work out what to say about the Gulf oil leak seven times.

Publishing Professionals, Leveraging Your Distribution/Circulation Sales Success

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3.  Selling your distribution/circulation story...what matters most?

Registration Information
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When:  Thursday, March 18th

Please note, the above PowerHour starts at 2:00 p.m. Eastern/New York/Toronto time, which is

1:00 p.m./Central/Dallas/Winnipeg time

12:00 p.m./Mountain/Denver/Calgary time

11:00 a.m./Pacific/San Francisco/Vancouver time

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Fee:  No charge

To register, please go to:  http://marketing.mediabids.com/seminar/TeleSeminarReg.html

For additional registration information, please contact Mediabids.com at 800-989-0406 or E-mail

jpeterson@mediabids.com

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http://marketing.mediabids.com/calls/index.html

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This article in AdAge on how Google is testing a set fee payment model on search advertising should shake up publishers. For the past three years, Mediabids has been offering per-response advertising in addition to our conventional ad sales. Right now thousands of publications use our per-response ads to augment their revenue streams. If anypublishers still think that pay-per-response is not a payment model that they will have to contend with in the future, think again. Google's test shows that even the most local advertisers will have this as an option in the near future in other mediums. If print is going to compete it has to adopt the payment model that advertisers feel comfortable with, learn more about our per-response program at www.mediabids.com.

Google Lures Local Advertisers by Subverting Its Own Search Policies

Two-City Test Takes on Yellow Pages With New Pricing System, Ad Model

by Michael Learmonth
Published: October 07, 2009