Monday, May 17, 2010

Amid more competition, local-local offers an edge; but will editorial, ad staff cuts now get reversed?

As the economy strengthens in the current quarter, Gannett could soon see its first year-over-year revenue increase in more than three years -- since the last quarter of 2006. Indeed, there was momentum in this year's first quarter, when revenue fell by just 4.1% from a year before, to $1.3 billion.

Revenue stability would give Corporate a chance to reassess the enormous workforce cuts since 2006, and look for ways to reinvest in the company's two content engines: editorial and advertising. The recent drive to bolster investigative reporting is a step in the right direction.

But the ongoing consolidation of ad production at two new centers, in Des Moines and Indianapolis, risks more damage to customer service. (For an early peek at the downside, see the Centers of Excellence.)

Jobs: 50K then, 35K now
There's plenty of reason to review those workforce cuts. As the economy tipped into the Great Recession, Corporate used a machete to reduce payroll. Worldwide Gannett employment plunged to 35,000 at the end of last year from nearly 50,000 in December 2006. Yet, the number of U.S. newspapers fell to only 82 from 90, while the number of TV stations, 23, didn't change at all.

In such blunt cuts, much was lost that gave the community papers and broadcast stations an edge over the competition. It doesn't take a brain scientist to figure out that content suffered in the very area that sets Gannett apart: local news and advertising.

"The future of newspapers will be community papers serving small areas where there are fewer alternatives,'' Anonymous@10:02 a.m. wrote on Friday.

Missing: parts of 'the puzzle'
Another poster agreed. "What everyone also needs to realize is that -- as the audience shrink -- people will pay only for unique content,'' said Anonymous@10:45 a.m. "That means the papers in small markets may become the most valuable properties in the chain."



10:45's comment continues: "Gannett cut many of the most important parts of the newspaper puzzle early on -- columnists, specialized reporters, investigative reporters. Those are the thing that can set a newspaper apart. Every media outlet in a city covers breaking news, meaning it's easy and cheap to come by. I don't need to buy a paper to get it because TV and radio stations do a fine job delivering that. What they don't do is give me solid analysis, break hard-to-get stories, fire me up with a good opinion piece or funny column, and let me know if the new U2 album is worth my money. That's where papers can shine."

The same is true in advertising: Ship ad production hundreds of miles away, and you increase turnaround time and the likelihood of errors. How's that going to help lure back lost customers, and keep current ones happy?

Machete vs. scalpel
If the economy had shrunk more slowly over the past three years, Corporate might have used a scalpel to reduce payroll, and perhaps wouldn't have whacked every one of those 15,000 jobs, putting Gannett in a better position to compete. Recent research shows companies fare better during economic revivals when they use a more targeted approach to layoffs.

Now, amid the current recovery, Gannett has a second chance.

[Image: yesterday's Cincinnati Enquirer, Newseum. The Ohio paper eliminated about 100 jobs during a Gannett-wide layoff last July]

10 comments:

  1. How fitting that you chose the Sunday Cincinnati Enquirer to make your point about Gannett gutting itself of editorial talent. Note how the package "Hats off to Heroes" consumes two thirds of the front page. That's two thirds of its biggest circulation day devoted to an appearance by three out-of-town celebs -- Billie Jean King, Willie Mays and Harry Belafonte -- who made their mark decades ago. This was a local news front play at best. That it ran on Page 1 tells me the editors took the easy road and declared these washed-up heroes as their lead Sunday story, rather than order up a story that might actually induce people to buy (and read) the paper. Two problems. Story decisions are made by publisher Margaret Buchanan, a former ad saleslady who thinks her Gannett rings confer editorial judgment. Second, editor Tom Callinan is counting the days to his retirement, hoping and praying that he can last before someone up top realizes how atrocious he is as an editor and manager.

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  2. I hear a lot of talk about investigative reporting and watchdog journalism, but I don't believe anything will change. Producing a newspaper with actual news costs more money than one filled with fluff and boring trend stories. The toadies at Gannett headquarters don't have the guts, or brains, to look beyond the next quarter.

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  3. What if there is a double dip in the economy, which some economists are predicting thanks to the Euro, the mounting U.S. debt, and housing woes. Wall Street seems to be signaling something. The trouble for Gannett is that the newspapers are now being run on a shoestring, and I don't think this company is positioned for more layoffs a slip back into recession would bring. I am not as positive about all of this as you seem to be.

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  4. At NNCO, they are producing a Print First package on Sundays. Below is what was in print first yesterday. I think I could wait a day to read these stories for free.


    Pick up today's Newark Advocate print edition for these stories:

    • A commonly asked question by those living in Licking County is whether the rate of crimes against the young is higher here than elsewhere in Central Ohio. The Advocate examines the issue and how county authorities address crimes against the innocent.

    • The Advocate also takes a closer look at those who work the night shift or keep unconventional work schedules while the rest of the workforce is at rest.



    It seems that the community newspapers really don't have an idea of how to generate revenue or increase circulation.

    One problem with the Advocate, is that it is printed early in the morning, but you are lucky to see the printed product until early afternoon. By then, the news is old. This was brought to the publisher's attention but feel upon deaf ears.

    I don't know about other newspaper properties, but NNCO spends a lot of time ambulance chasing. It seems that the majority of the content is about wrecks and some of these have no news value.

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  5. Boy, those are really lame ideas. An exciting story about working the nightshift?

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  6. Oh yeah, watchdog journalism. That's supposedly a big deal in Westchester where Henry Freeman spouted on the day of the layoff announcement last year that he remained dedicated to the "watchdog" role.

    Bullshit.

    There's no way that the Gannett lackeys are going to bolster staff to deliver anything of substance.

    Gannett does not like to spend money except on its executives who make the spending decisions. And when money is spent, it's for quick-hit things like Metromix and similar garbage.

    Keep in mind that many of the community newspapers were not exactly heavy with reporters and front-line editors before the cuts.

    Yet some, like Westchester, remain top heavy with editors now presiding over smaller staffs. What's interesting is that the paper functioned just fine in years gone by with considerably fewer chiefs and more indians.

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  7. It just blows the mind how the company, as many companies do, claims to value open-mindedness, change and flexibility when it ignores employees who suggest new ways of doing business and punishes those who have the sense to stand up against ridiculous corporate initiatives and the general dumbing down of content. Management is worst of all in embracing change. Managers pay lip service to new technology and become blogging and tweeting fools overnight. But change? Hah! Aside from one or two editors (I'm a Paul Anger fan), incompetence and mediocrity will ALWAYS be the hallmark of Gannett leadership.

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  8. Mr. Yesterday5/17/2010 10:35 AM

    "Gannett has a second chance," sez Jim.

    Unfortunately, Gannett might have blown apart any chance to lay the groundwork for redemption by:
    1- Cutting loose too many of its talented, seasoned and creative people the first time around;
    2- Building ill will those talented and creative people who stayed (furloughs, no raises, etc.);
    3- Overly weakening the product and driving off both advertisers and readers - many of whom are likely to never return.

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  9. A1 ENTERPRISE! is supposedly the focus in Wilmington. We're watchdogs! Investigators! Writing data-driven stories! ... until the powers that be take a look at the planning budget and realize that because almost everyone is focused on A1, we don't have crap for the local section - for the weekends, we're constantly pulling stuff out of our armpits. It's all bullshit!

    And the top editors don't even really care. David Ledford and Greg Burton barely even even read the local section. If it's not on A1 above the fold, they could give two shits.

    They take every opportunity to promote themselves personally. I felt really sorry for the ContentOne correspondent who had to accompany them to an interview with Joe Biden a few months ago. There was no reason for the EE and AME to go along and ask questions, except to puff themselves up. Coincidence that a team from Corporate was visiting the week the story was published? Naaaahhhhh...

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  10. I suspect that if that software that Saradakis referred to at Narrative Science, that automatically writes a story, comes to fruition, Gannett will be laying off masses more in its newsrooms in another dimwitted effort to boost the stock price.
    http://gannettblog.blogspot.com/2010/04/in-farewell-note-digital-chief.html

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