When Detroit newspaper executives did the math last year, they said they could have cut their costs about 40% by dropping print entirely, according to a new Associated Press story. "But they said that would have erased the more than 85% of their revenue that comes from subscriptions, newsstand sales and ads in the printed newspapers,'' the AP says. "Less than 15% of the newspapers' revenue had come from online ads."
Instead, executives at Gannett's Detroit Free Press and MediaNews Group's Detroit News said, cutting back home delivery to three days would reduce the newspapers' joint costs by about 20% while giving them the chance to keep most of their revenue, according to the AP's Michael Liedtke.
His account is the first I've read, giving details on the financial impact of dropping print altogether -- a scenario that common sense suggests they would have studied. Detroit's model is being closely watched across the newspaper industry, which could adopt the three-day delivery scenario at other newspapers.
The wire service's story continues: "The publications won't give detailed revenue figures, other than to say that Thursdays, Fridays and Sundays now account for 93% of the newspapers' print ad revenue. Even before the home-delivery cutback, those three days accounted for about 80% of the print ad revenue."
Related update: What Detroit's model could mean for USA Today, according to Central Michigan University journalism Professor John Hartman
Earlier: Freep adding iPhone app, more news. Plus: Retreating, Detroit papers resume 7-day delivery
Tuesday, July 06, 2010
3 comments:
Jim says: "Proceed with caution; this is a free-for-all comment zone. I try to correct or clarify incorrect information. But I can't catch everything. Please keep your posts focused on Gannett and media-related subjects. Note that I occasionally review comments in advance, to reject inappropriate ones. And I ignore hostile posters, and recommend you do, too."
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Have another scotch Hunke!
ReplyDeleteIt's only a matter of time until print is gone. How much time? I don't know. But I think we're going to see a a big drop over the next four to five years.
ReplyDelete7:32 -- The numbers would indicate that you're wrong ... at least with your four to five year figure.
ReplyDeleteIf the Free Press could have reduced its operating costs by 40% by dropping printed products and would have lost 85% of its revenue, the publication would have been seriously in the red every month.
And, the last time our publisher shared revenue figures, he reported similar numbers at our daily.
In other words, the newspaper Web sites aren't bringing in enough revenue to support themselves. So, unless they figure out how to do that, printed papers will stay very much alive.
Look carefully at the Web-based news sites that are successful and you'll see that they have a very broad reach and a very limited staff.
If printed newspapers go away during the next five years, we won't have any news other than what broadcasters deem fit to air.