Newspapers and magazines have taken a huge hit in this economic downturn as the industry continues to wane with new layoffs.
Last week, The Christian Science Monitor; The Los Angeles Times; Gannett Co., publisher of USA Today; Time Inc.; American Express Publishing and Condé Nast Publications announced layoffs due to budget cuts. In addition, other publications will cut frequency and focus more heavily on Web products.
Gannett pointed to the economy and its slumping revenues when it announced that it will cut staff on its local papers by 10% by the first week of December,. Publishing operating revenues for Gannett were down 14.4% in the third quarter, over last year, and Q3 income dropped 32.5%, to $158 million.
“As all of you are painfully aware, the fiscal crisis is deepening and the economy is getting worse,” read a message to employees from Gannett president Robert Dickey. “Gannett’s revenues continue to be severely impacted by this downturn, and our local operations are suffering.”
Earlier cuts in August eliminated 1,000 jobs. Flagship USA Today was not affected by either round of cuts.
Tara Connell, Gannett’s VP of corporate communications, said it is too early to assess the impact on the papers’ marketing departments or any strategic changes to focus on more digital products, as paper gets more expensive to produce.
FAS-FAX reported that while USA Today’s weekday circulation of 2.3 million has held steady, average daily circulation at most major dailies is down. The most recent ABC report puts the drop at 4.6% total for the past six months. (See story, pg. 7.)
“Media companies are retrenching and anticipating lower revenues in Q3 and in 2009,” said Reed Phillips, managing partner and Desilva & Phillips, LLC. “Compounding it all is something that has gone on for a number of years — the shift from print to online.”
For example, The Christian Science Monitor will stop printing daily papers and will focus on more Web products. By April, it will print only a weekly, weekend edition with longer, analytical stories. Daily e-newsletters also will be available by subscription.
“The cost of print, production and distribution is high, and more people are getting their news on a daily basis online,” said Susan Hackney, VP of marketing for the Monitor.
Restructuring at Time Inc., the world’s largest magazine company, which includes Time and Sports Illustrated, could lead to as many as 600 job cuts.
Many publishers are looking to new ways to monetize their ad spends online. Full-page takeovers, banner ads and preroll video ads are some ways to help monetize a publisher’s site. In addition, selling ad space within e-mail newsletters is starting to take off — a tactic used by Boston.com and New York magazine.
According to Nielsen, in 2007 there were 3.6 million new online newspaper readers, with readership rising at twice the rate of the general Internet audience.
“Many of these consumers are electing to receive this information on the Web, and many sign up to receive it in the inbox,” said Sean O’Neal, CMO at Datran Media
