Wednesday, September 11, 2013

USAT | Cover price said doubling to $2 on Sept. 30

In late July, during the quarterly earnings conference call, analyst Craig Huber asked a simple question: "What are you guys doing on the USA Today circulation pricing front?"

Today's edition detail, Newseum
CEO Gracia Martore, ever cagey when revealing strategy, gave a mushy reply:

"Right at the moment, we're obviously looking at a lot of things," she said, according to Seeking Alpha's transcript. "We can probably talk more . . . later in the fall."

But now it appears Corporate already had a price increase in the works. Readers tell me USAT's cover price will jump to $2 -- double the current one. The change will be effective Sept. 30, one reader says. It would be the first increase in five years.

[Updated at 6:30 p.m. ET: USAT has now confirmed the price hike.]

Any change at the company's marquee brand will come as Gannett relies more than ever on circulation dollars to bolster the top line: overall revenue. But it's a risky move because many readers will balk, further reducing USAT's circulation volume, once the nation's largest. That would cut even more into print advertising revenue, which management presumably hopes to offset through the higher cover price and more digital ad sales.

Bye-bye, ad sales
The plan would be part of a broader campaign to slowly wean GCI off print ads from its biggest and most troubled business, newspaper publishing, as it pivots toward digital and broadcasting with the $1.5 billion deal to buy TV company Belo by year's end.

The quarterly numbers tell the story. In the second quarter, circulation revenue rose about 12% across the 81 U.S. community dailies after the company imposed big subscription rate hikes last yar. At USAT, however, circulation revenue fell 11%, CFO Victoria Harker told analysts.

That resulted in a net circulation revenue increase of 6%, or $280 million, and substantially offset a $318 million decline in overall newspaper ad revenue during the quarter.

For the quarter, circulation revenue rose to 21.5% of $1.3 billion in companywide revenue. That was up from 20.2% of $1.3 billion the year before.

At USAT, circulation volume has been falling precipitously since the fall of 2009, after The Wall Street Journal overtook the paper as the nation's top-selling daily, when digital subscribers were included. In the most recent reporting period, the end of March, USAT fell to No. 3 after The New York Times marched ahead, also as a result of digital subscription growth. USAT doesn't have a paywall.

Circulation once 2.3M
For the six months ended March 31, USAT's circulation dove 7.9% to 1.67 million copies. Its national rivals surged: The WSJ jumped 12.3% to 2.38 million, and the NYT soared 17.6% to 1.87 million. The shifts also meant USAT lost its status as the No. 1 selling paper in print to the NYT -- one of its last bragging rights.

USAT last raised its cover price to $1 from 75 cents in fall 2008, just as the Great Recession was deepening. At the time, it was the top-selling newspaper, with an average 2.28 million copies sold.

The New York Times' cover price is $2.50, and The Wall Street Journal's is $2 in many markets.

Martore said Corporate would likely be able to talk about any USAT initiatives in the fall. That probably means mid-October, when GCI reports third-quarter results. Those initiatives almost certainly include a plan code-named Butterfly Project to inject even more USAT content into the community dailies.

48 comments:

  1. Let me guess, the marketing staff will advise folks to craft explanations such as: in order to ensure quality and deliver premium content and offset printing increases...bleah, bleah, bleah...

    I can't imagine this does anything but bring on the death closer. Who would pay $2 for Usat these days?? Those cherished business travelers at the airport and newsstands aren't paying $2 for this. Thank god Hilton is still handing them out.

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    1. "Thank god Hilton is still handing them out."

      Hilton is phasing them out for the online USA Today.

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  2. Yes, this is going to kill single copy sales. The only question is when the big bulk buyers decide it's no longer providing value as a free handout. They're probably paying the bulk buyers to continue at this point.

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    1. Just cannot believe they raised it 100%, why not to 1.25, now so long. No way at $2.00.

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  3. So let me understand this. USAT will raise it's price to $2 per copy, which means the beginning of the end for it's circulation, ad sales, and overall brand. But, at the same time, while the brand dies, Gannett will insert MORE USA TODAY CONTENT into it's local newspapers. Ya just can't make this shit up folks!

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    1. Already have done that in our local and it's hurt the local. People go around saying "if I wanted to buy the USA Today I would have".

      Also, just the word on the street that USAT is going to 2 dollars has people NOT buying it anymore already.

      This company is totally screwed.

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  4. The humane thing to do at this point would be to just pull the plug on USA Today's print edition. Unfortunately, Gannett won't do that. Not yet. The empty suits want print to go away, but as long as it still brings in the revenue it does, well, it wouldn't help the company's bottom line to ditch USAT the paper.

    Frankly, the institutional deceit at USAT sickens me, as does the constant threats of buyouts, layoffs and so forth. What's left of USAT staff has been lied to, manipulated and demoralized for over five years now. The product has become a joke -- a high schoo or college-like newspaper at best. From its idiotic design to its constant stream of dopey errors and poor news judgment, USAT probably isn't worth the old 50 cents price.

    So yes, raising the price to $2 without a major upgrade in the quality of the staff and the product is pretty much suicidal. But it's a slow suicide, and that's precisely what Gannett wants.

    Honestly, I don't know how anyone remains working for that newspaper, at least not anyone with an ounce of pride. Maybe some people there don't believe they have the skills to work elsewhere. Maybe some are trapped for personal reasons. But those who do have the freedom and talent to leave, well, you're doing yourself a great disservice by remaining on a sinking ship. USAT is toxic, and while you may not know how toxic, you should not dismiss the possibility that working at that newspaper is actually killing you.

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  5. What a tired rant. This is more of the pretentious, blowhard preaching that we get every day from some people here. "You should quit because I say so .. blah, blah, blah." "Gannett has an evil, conspiratorial plan to bring down its flagship newspaper ... blah, blah, blah." "I am much smarter than you and you are all idiotic robots who cannot think for yourselves ... blah, blah, blah." "I feel free to insult you and say that you have no pride (refer to my reference to you being idiotic robots) ... blah, blah, blah." At least come up with some new banal and insulting stuff for the folks who actually work at USA Today. They are dedicated to doing the best job that they can while putting up with the losers who sit on the sidelines and write vacuous hate posts.

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    1. Interesting to note that your counter rant came within minutes of the previous post. In other words, you don't like all the "pretentious blowhards" on here, but you seem poised to react immediately to anything that doesn't fit your corporate view. Why would anyone read a blog religiously that they so strongly dislike, let alone engage in any sort of dialogue?

      You talk about dedication, well, that's all fine and good, but dedication to what? To a company that has done nothing but dump on employees for five years? That's not dedication. That's blind stupidity.

      Be dedicated to yourself, to building your portfolio and finding an employer who will truly appreciate your skills and work ethics. Don't waste your time being dedicated to a company that shows no dedication to its employees.

      Of course, if you're nothing more than a troll, than you will defend Gannett to the end, or at least as long as the evil empire continues issuing you a paycheck. Your self interest lie in supporting USA Today no matter what it does to your co-workers past and present. Your moral compass is broken. Your the real loser, not the people out there trying to shed light on some very profound injustices.

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    3. This comment has been removed by a blog administrator.

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    4. 2:37. I remove comments that include the word troll.

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    5. I guess you missed the comment at 11:18, Jim. I assume 2:37 referred to that one and its use of "troll," so you zapped that one instead.

      More of the brilliance we've come to expect.

      Delete
  6. Please start drinking more decaf, 11:18 a.m. I actually am employed at USA Today and not in the executive suites. So, I actually have some creds to talk about what is happening here. Unlike others, such as, perhaps, you. And, of course, you can't resist more preaching about "building your portfolio" and how my "moral compass is broken" because I am employed by USA Today. Some people actually enjoy their jobs at USA Today. And they know exactly what is happening around them. They are keenly aware of the current situation. What they don't need, or much appreciate, is this kind of empty, condescending and insulting gibberish from the sidelines. Take a nice walk in the park and cool down. You will feel better. Of course, you won't do that. You'll huff and puff some more.

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  7. some of you on here keep me rotflmao... that's 'Social Media' lingo (rolling on the floor laughing my ass off) which per the new Social Media Policy that is in place, I can't actually express such a gesture any longer on social media pages. Thank god for this blog... I know I feel better

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    1. 12:40,
      That's exquisite writing. You are perfect for social media. Please look-up "syntax" and "sentence structure" in the dictionary.

      Delete
  8. 11:41, the only reason you and other's at USAT "know exactly what is happening around them and are keenly aware of the current situation" is because of this blog. Without it, you'd be even more of a mushroom that you already are.

    As a former Gannettoid, visiting this site is a bit like rubber-necking a car-wreck. I know I shouldn't slow down to watch and see the blood and gore and misery, but I just can't help it.

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    1. Honestly, what's the point of insulting colleagues still working at USAT? Referring to them as "mushrooms?" Really? It's pretty obvious that the majority of the critics here are outside looking in. So, they have zero insight. That said, Jim's blog has been invaluable. A lot of people read it and value it. I sure do. Finally, a word to fellow USAT employees who have been posting here, especially because of the hateful preaching by the outsiders: Please give it a break and ignore them. They relish seeing their posts here. The peanut galley posters are just too easy to get riled up. Let's let them go on recess. Let's get back to what's happening at Gannett.

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    2. 5:58 In my introduction to comments just below the comment form, I write: 'And I ignore hostile posters, and recommend you do, too."

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  9. When is the last time anyone actually paid list price for their copy of USA Today anyway - when they can walk down to their hotel lobby and pick one up for free?

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    1. $2 for USA Today? Is Gannett trying to kill the paper? Damn shame. When it was under a dollar I would buy it daily. I've enjoyed the paper since it's inception. Only time I read it is in my local library, at a hotel or at breakfast at my local Burger King. $2.00? Are they serious?

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    2. Why don't you ask executives at Marriott, Hilton, IHG, Choice Hotels, Wyndham, and others if USA TODAY has been "free" all these years. They've been writing checks for millions and millions of dollars over the last 30 years. They'd laugh at the notion of a "free" USA TODAY.

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    3. My, aren't you out of the mainstream. Everyone isn't staying at hotel - everyday. I used to purchase mine every morning at the local Exxon station. However, at $2 - nevermore.

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  10. So what do we actually make from single copy sales? Will we be charging a higher bulk rate? How much lost circulation is forecast? Anyone?

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  11. Increases are part of the world, been in circulation for 20 years and work as a consultant now to newspapers. The increase of 100%, though, will be a hard shot across the bow. I predict 10%+ circ losses.

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  12. I absolutely LOVE this!! I only wish I could find a list like this of information. Do you happen to know of any lists like that?

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  13. I'm a newspaper carrier for the Arizona Republic, USAT, WSJ, NYTimes, and the Tucson Daily Star-daily. This $2 price point will kill all of my USAT sales..we are not a large market in SouthEastern Arizona, USAT is simply too liberal for this conservative area, however I do sell enough to validate delivery. So my theory I'm sure will prove right on the death of the $2 USAT in this area.
    Furthermore the Arizona Republic-a Gannett paper continues to install an advertising flap on the front page that covers the headlines and the lead photo every day which decreases my sales-20%- on the days it is used-the ads are for furniture, grocery stores, etc..and the company's are not even in our area, being Phoenix based.
    It seems to me that if Gannett continues to allow this mis-managed ad placement on their Arizona papers they are continuing to shoot themselves in the foot distribution wise--all I know is it sure hurts our sales and our income.

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  14. Just lost a regular customer by DOUBLING the price to $2 a day.
    Enjoyed the USA Today many years while traveling (and staying as a Platinum for Life member @ Marriott hotels)...since retiring a year ago, have added a trip to the corner drugstore to pay the $1 when not traveling (thus cannot do a "home delivery" deal)...missed the price increase warning until dropping in to buy this morning's edition and informed the new price is $2....guess I'll pursue another avenue (likely online) to enjoy the USA Today type news. Good luck with the new strategy...predicting you will see a drop in sales and loss of a LOT of formerly loyal customers.....

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  15. Picked up my usual copy of USAT along with local papers.
    When cashier rang up a total with a dollar more than usual, I asked him to double check the amount.
    It was correct.
    I paid the amount and left.
    It's the last time I'll buy USAT.
    Luckily, my office building is next to a hotel, so I'll cop a copy from pile in the restaurant on the gorund floor from now on.
    I could've done that for the past several years, but I believed in supporting print where possible.
    If they had raised it 50 cents, I would've shrugged and said "business as usual".
    But doubling the price is ridiculous...

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  16. Part of my daily ritual during the week is buying a copy of "USA Today" each morning. Today I learned the price has doubled. I have bought my last issue of this newspaper which I really enjoyed.

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    1. You are Right. I have bought USA Today every week day morning, sometimes right off the truck if it got to the stands late. From day 1 I have loved your paper but i must admit when it went to $1.00 that was pushing it, at $2.00 forget it. When you look at how much the paper has shrunk since the first editions it's shocking, $2.00 I am really shocked. Sadly, good bye USA Today. Everything has it's limits. A former reader.

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  17. Same here in Tennessee. 100% increase is a little too much to stomach. Too bad because it's the best paper available here. Guess I am now entering a new less-read portion of the life cycle.

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  18. Been buying the USAT for years. Today I was caught off guard and had to round up another dollar for the cashier. After looking at the price of the USAT - never, EVER again - Bye, BYE!

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  19. Lost another customer here........a smaller increase would have been annoying but wouldn't have driven me away. Doubling the price is insanity and a slap in the face to loyal readers. We always enjoy USA Today while traveling and have also enjoyed home delivery. No longer though............it is something we can easily live without. For $2, there is far more content in WSJ.

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  20. The USA Today is not worth $2.00- it's as simple as that.

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  21. I have purchased paper since beginning. I noticed today that price doubled so I didn't purchase told my wife to no longer purchase paper that I had been buying daily.

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  22. good bye usa today. there are a lot of other, much better newspapers on line to read. you are now outta sight, outta mind

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  23. Tell the truth-- if they doubled the price of your favorite beer or coffee-- without even WARNING anybody, would you drink it or just gag on it? Bye bye, bitch! I'll NEVER buy another of your inflationary papers ever again...!!

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  24. I've been buying USA Today every day for years. As soon as I saw the doubled price, I put it back on the shelf. I will never buy another one again.

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  25. Same thing happenned to me as well..Cashier rings me up for $2.12..and I looked at her like she surely must have made a mistake..Then,saw the new the cover price..and..wow.. Been buying ever since USA Today first came out..Quality is not as good as it was back then and I've STILL been a buyer..For A buck fifty..you would still have me as a loyal reader.. , but , no longer...

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    1. I too got a dose of surprise sticker shock at the store counter when the cashier announced "$2.12." I agree, $1.50 would seem a more logical stairstep of a price increase. The 100% increase makes ME wonder if the corporate end goal isn't failure.

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  26. Too much to swallow. Going to have to change my reading habits.

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  27. The only reason I would occasionally pick up USA is for its puzzles -- and, sometimes, on Fridays, for its movie/theatre reviews. Getting it free in hotels when I travel is great. But $2, now, for the puzzles? NO way! Since the re-design of the paper, the editorial content has gotten far worse. And that's the way it is.

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  28. I do not normally post on any blogs but this time I must speak out. I have been reading USAT since the beginning and although I only buy the Friday/Weekend edition I refuse to pay an extra $1 for this. While I still believe that your paper is one of the best in the country, it is not worth the doubled price. I could see going up .50 cents as has everything but to hit the reader with a whole $1 at once, shame on you!

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  29. I have read my last USAT and that's a shame because I did enjoy it for years. $2.....no way, not worth it.

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    1. I too have read my last "paid for" USAT. It had been a morning ritual of mine for longer than I can remember. However, $2 (+tax) is a little too extreme for my wallet. I will simply have to limit myself to my local paper.

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  30. A 50 cent increase would be more reasonable. I would have paid that without giving it a second thought. At $2.00 I will pass. I have been a loyal reader for years.

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  31. Did anyone notice that the day after the price increase the actual size of the paper got smaller? It's width across is about one inch less. It's a shame...they should've made the price $1.50. It will not survive the two dollar price point. Big mistake. JMHO.

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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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