Thursday, September 19, 2013

Bulletin: Indy Star confirms launch of 'Butterfly'; project could add new daily USA Today section to dozens of other Gannett community newspapers

In a story published just minutes ago, The Indianapolis Star has confirmed Gannett is testing the roll out of a new USA Today section at a handful of community newspapers that for the first time could give the national daily a print weekend presence across the nation.

Today's USAT detail, Newseum
The Star story is the first public acknowledgement of a plan -- dubbed the Butterfly Project -- that's been in the works since at least summer 2012. The story follows my post about the project two days ago.

The project, if successful, would be one of the biggest new initiatives in Gannett's recent history. Still, it's a risky bet on print's future amid declining circulation and advertising, even as the century-old company battles to become a digital powerhouse. Moreover, it's a direct challenge to USAT's two biggest national competitors: The New York Times and The Wall Street Journal.

Corporate's chief spokesman, Jeremy Gaines, told the Star: "We're always innovating and looking for new ways to engage our consumers. With more than 100 local media organizations nationwide, we’re well positioned to pilot new concepts such as this one."

The new daily section will launch in the Star Oct. 6. The paper said it would be piloted in a "few" other markets; it didn't give a timetable for those tests. I've been told the number of test sites would be five or six, including one in Wisconsin.

[Updated at 6:42 p.m. ET.] The section will be tested at four sites, USAT Publisher Larry Kramer told employees in a memo today. The other three are The Post-Crescent in Appleton, Wisc.; New York's Rochester Democrat and Chronicle, and The News Press in Fort Myers, Fla.

New Star pages: 70 a week
The USAT content will include world, national, and business news and features. The Star didn't say how big the section will be. Readers have told me it could number up to six pages daily, with more on Sundays.

Equally important, the section will be accompanied by a big increase in the Star's local news, focused on the suburbs, the Star says. In total, 70 pages will be added to the paper each week with the USAT section. "Our mission is local," Publisher Karen Crotchfelt told the paper. "Local leads, and it always will."

If the Butterfly Project tests are successful, the USAT section would be added to about three dozen of Gannett's other biggest papers, according to my readers. Those papers have combined circulation of more than 2.3 million on weekdays and more than 3.5 million Sundays. In total, Gannett publishes 82 newspapers and owns 23 TV stations, making it one of the world's biggest news groups.

They are in some of the nation's most populous states: New York, California, Ohio and Florida. The papers include The Arizona Republic in Phoenix (300,000 weekdays); Asbury Park Press in New Jersey (100,000) and the Pensacola News Journal in Florida (37,000). The Indianapolis Star's weekday circulation is about 155,000.

Of considerable interest to USAT's national rivals is whether the paper will try counting the new daily section as paid circulation when it submits figures to the industry's Alliance for Audited Media, formerly known as the Audit Bureau of Circulations.

At the Star, correspondent Tony Cook writes, "the investment in the print edition represents a divergence from recent trends in the industry. Many publishers have made significant cuts to their printed product in order to invest in their digital products."

Boost for USAT
For USAT, Butterfly could help Gannett's struggling flagship recover hundreds of thousands in circulation volume that's likely to be lost when it doubles the single-copy price to $2 on Sept. 30. The paper has forecast a 35% plunge in newsstand sales and the near total disappearance of vending machine sales after the price hike, according to an internal company document I obtained this week.

Today's Star detail, Newseum
USAT's circulation sank 8% to 1.7 million during the most recent reporting period, ended March 31. At the same time, its two national competitors surged ahead. The Wall Street Journal jumped 12% to 2.4 million, and The New York Times soared 18% to 1.9 million. Those figures include digital subscriptions; USAT doesn't charge for online access.

A fully extended Butterfly also could give USAT an even bigger national footprint to compete with the WSJ and NYT. Since it was started in September 1982, USAT has only published on weekdays. The WSJ now publishes every day but Sunday. The NYT publishes everyday, and has transformed itself into a truly national broadsheet over the past two decades, elbowing its way onto USAT's turf.

The new single-copy pricing at USAT is part of a broader strategy at Gannett's other 81 dailies favoring revenue over volume. Last year, after raising single-copy prices weekdays and Sundays, then boosting subscription rates, Gannett said circulation revenue companywide rose $53 million, or 5% -- the first such annual increase since 2006.

Ad strategy unknown
USAT has been losing circulation since 2008, when the paper gave up its lead as the nation's top-circulating daily to The Wall Street Journal. That came after major bulk buyers, hotels, stopped providing free copies to their guests as the paper's most important business traveling readers switched to smartphones and tablets.

The Star story doesn't say what kind of advertising will be sold in the USAT section. But it's logical the section would carry national advertising sold by Corporate's team led by national sales chief Mary Murcko.

The addition of local news in the Star -- and the possibility the same could happen at other Gannett dailies with a full Butterfly roll out -- comes after a published report this summer saying the community papers were in line for another round of subscription price increases.

In July, Des Moines TV station KCCI said The Des Moines Register had started notifying 80,000 subscribers of a rate hike as high as 40%. The paper's marketing chief, Kurt Allen, told the station the increase is a "Corporate initiative, across all Gannett properties."

A rate hike carrot?
Restoring local news reduced during cost-cutting since 2008 could be used to sell readers on any subscription increases.

Whatever Butterfly's timetable, Gannett Digital is set to launch redesigned websites and mobile applications at 35 community news sites by the end of the year. The new look closely mirrors the radical redesign USAT adopted a year ago this month.

Butterfly comes at an already busy time for Corporate. Gannett is completing the purchase of TV company Belo by year's end. The deal, for $1.5 billion in cash and assumption of $715 million in debt, would nearly double the number of stations in the Broadcasting division.

Gannett's shares surged with the Belo deal's announcement in June. Early this afternoon, GCI was down 30 cents, or 1.2%, to $25.53. Markets overall were flat.

Related: spreadsheet shows circulation of 81 U.S. community papers 2005-2012.


  1. Interesting -- where are they going to get the reporters to fill 70 more pages of local news a week?

  2. It's obvious from the reader comments on the Star website the readers are not as stupid as Crotchfelt and co. believe and would like them to be.

  3. Not to be a noodge or anything, but:

    populace = noun
    populous = adjective

    1. Thank you; I need copy editors like you.

  4. @10:27 AM: As I read it, there will be 70 more pages per week -- most of them the USAT content, I would assume -- and the rest will be more local content. Assuming the Star is like most metro dailies, the nation/world report eats up anywhere from four to six FTEs, while non-local business coverage eats up another three-four FTEs. Tell any city editor they're getting eight new reporters and they'll tell you they can fill pages.

    1. The day a Gannett paper increases its local staff, pigs will be airborne.

  5. Sounds like an interesting plan. Local staff concentrates on local issues and copy and USAT supplies National, International and National Sports. Nothing wrong with that. Plus the reader gets MORE. Works for me. More is better

  6. Wonder how newspapers will ensure that the USA Today section stories don't run elsewhere in the paper, or another version of the same story. A budget is sent out now on the one USA Today page sites run, but my place continually runs the same story that's on that page elsewhere.

  7. More pages? When will the rate increase for the local papers be announced?

    I'm guessing the price won't stay put for long.

  8. I think most of what comes out of Tysons is boneheaded but I think this makes a lot o sense. If you replace the world and national coverage that the papers currently provide with local stories and use USAT for the world and national coverage you will have a better product. Great idea.

  9. I think most of what comes out of Tysons is boneheaded but I think this makes a lot o sense. If you replace the world and national coverage that the papers currently provide with local stories and use USAT for the world and national coverage you will have a better product. Great idea.

    1. If that produces a net increase in local news hole -- maybe yes.

      But if all it does is replace Associated Press and other wire service news with 100% USAT-reported content -- then, no.

      Outside the U.S., I believe USAT has just one dedicated foreign bureau, in London. Elsewhere, the paper relies on part-time freelancers of varying skills and backgrounds. Now, compare that to the AP's extensive foreign bureau network. Or even better: The New York Times'.

      When the economy is more and more global, when events in Syria, Egypt and China boomerang through America's Main Street, foreign news is more important than ever. Now's not the time to settle for second or third best.

      Domestically, USAT has retreated over the past five years. The paper has full-time bureaus in New York, Washington, Atlanta (maybe), Los Angeles, San Francisco and Seattle. But what about Boston, Philadelphia, Miami, Chicago, Dallas and Denver -- just to name a few.

      Plus, how will deadlines be handled for the USAT section? Will they be earlier than the deadlines now governing world and national news pages prepared by the five Design Studio hubs?

      My concern is the USAT news section is going to carry only the earliest news and especially sports stories, giving the section the feel of a preprint.

      No matter how this works out, the goal is to save money and/or produce a net increase in revenue. The bottom line is still the bottom line. When Gannett's print advertising revenue is falling, and circulation, digital and broadcasting revenue are threatening to flatline or even decline, Corporate isn't about to go to Wall Street and happily announce it's "investing for the future."

      There are few phrases Wall Street hates more than that one.

    2. The reality is that world and national coverage is readily available online from a vast multitude of of both global and indigenous news sources. As a result it is by far the LEAST valuable use of scarce newsprint.

      P.S. The supposed concern about deadlines is downright quaint.

  10. Rolling out in Rochester on Oct. 7. "More. Different. Better."

  11. Appleton and Fort Myers are also among the first to get the Butterfly section.


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