Prediction #2: Print newspapers and magazines will continue to struggle in 2010

Print newspapers and magazines will continue to struggle in 2010, and more will consider shutting down or transitioning to online-only, despite a (slower than we'd like) recovering economy. Although the number of magazines that shut down peaked in 2008, at 525, last year said goodbye to 360 magazines, including some major magazines like Gourmet, Metropolitan Home, Fortune Small Business. Last year also saw the deaths of major daily newspapers like the Rocky Mountain News and Seattle Post-Intelligencer as well as dozens of smaller papers. Large newspaper companies also announced bankruptcies last year, and we expect more closings in 2010. There is some good news: advertising pages may be increasing, according to Q1 projections, but only by 3 percent. However, print subscriptions continue to decline, and we expect newsroom layoffs to continue. The lesson: magazines from big publishing companies and significant circulations were not immune. Already, BusinessWeek SmallBiz announced (via postcard) that its Dec. 09/Jan. 10 issue was its last.

Seattle Times Doing Well Since Seattle P-I Went Online

One of the important questions for the future of newspapers is whether the online-only model can generate enough revenue to sustain newspaper operations.

In the five months since the Seattle Post-Intelligencer shifted to online-only mode, with a much smaller staff (now at 20, down from 165) and more than 200 unpaid bloggers, kept much of the reader traffic it had as a newspaper site. According to its owner, Hearst Corp., audience and revenue are "ahead of projection."

So a scaled-down version of local news can work.

What's also interesting, according to the New York Times' Richard Perez-Pena, "Seattle Paper Is Resurgent as a Solo Act," the Seattle Times is now profitable.

Which proves that demand for print journalism continues. For now.

Media Predictions & the Speed of Change + One Prediction We Did Not Get Completely Right. Ok, More than Not Right

In my interview with Wayne Hurlbert of Blog Business Success Radio, which airs -- ok, which runs -- on BlogTalkRadio, we talked a lot about media predictions and trends, based on my original blog post, Top 14+ Media Trends for 2009, posted Jan. 9, 2009. The predictions are an annual list that my agency, Birnbach Communications, compiles based on research, conversations with reporters, bloggers and Twitter members to find out what they're following. For nearly a decade, we've compiled the annual list of media trends to help clients more effectively work with the medi, both at traditional and online outlets, including blogs and other social media sites.

Anyway, since Jan. 9, we've been right about a number of the predictions. But what was startling was the pace of change regarding some of our predictions.

For example, we expected some second-tier newspapers would fold or shift to online-only mode. And we were right about that. But we really did not expect the closing of the Rocky Mountain News. And though we should have realized because the announcements were there, that primary papers in other top markets were in trouble, like the Seattle Post-Intelligencer, which is now online-only mode, and the San Francisco Chronicle, which will likely go online-only.

In fact, it's been difficult to keep pace and track with the number of first-tier and second-tier newspapers changes and layoffs. Since Jan., the pace of that change has accelerated beyond our expectations. We updated a media list yesterday that had last had its major update in Dec. 2008 -- and there were so many more changes than I've ever seen in three months, much less a year. Included were reporters who had been active journalists for decades.

So that's one prediction we did not get entirely right. We were hopeful more could survive, especially newspapers that were dominent in their markets. So we're revising our prediction to say that here will a lot of smaller and some larger markets without a major traditional paper.

One prediction we did not get right was the strength of hyperlocal reporting. While we still feel that hyperlocal coverage can be a solution, we now realize hyperlocal media is not immune to the cash flow and lack of advertising problems plaquing newspaper holding companies. Recently, the Journal Register sold two Connecticut dailies and closed several weeklies.

Please note: they closed them not because there wasn't local interest in hyperlocal news. There is. Just as there was readers support for the Rocky or the Seattle PI.

But that's not enough.

As I've noted before, circulation fees alone do not spare publications because advertising generates much more revenue. If advertising drops, even a circulation in the hundreds of thousands won't save the publicaiton. That's true for newspapers, like the Rocky or the Seattle PI, or consumer magazines, where glossies with 800,000 subscribers still closed.

However, to our credit, we did predict that local competition in the online space will heat up, and that still seems like it will be proven true.

Anyway, check out my interview on Blog Business Success Radio. And thanks for continuing to read this blog.

Economics of Online-Only

In the aftermath of the closing of the Seattle Post-Intelligencer, the Wall St. Journal wrote an interesting article: "Hearst Shuts Down a Seattle Paper: Post-Intelligencer Will Become a Laboratory for Web-Only Edition."

Here's the interesting point about online-only: "It isn't clear that an online-only P-I will be financially viable. Hearst is giving up more than 90% of the revenue that a newspaper typically generates from sales of print advertising and circulation, and that won't easily be replaced by online dollars."

Also: "The P-I's new model hinges on slashing its work force, scaling back its news coverage and selling different kinds of online advertising. The P-I is retaining just 20 of its journalists to work on the online operation, leaving nearly 90% of its newsroom employees, or 145 people, out of a job. The P-I, which prints its last edition Tuesday, also is hiring more than 20 people to sell advertising for its Web operation."

In terms of big-market newspapers, the P-I.com is changing "the familiar model of a big-city daily as a catch-all of local and national news and features. Instead, it will cover local events and publish blogs and columns from staff, readers and prominent local citizens. It also plans to link liberally to other news sources in the Seattle area."

Also check out the New York Times article, "Seattle Paper Shifts Entirely to the Web."

Seattle Post-Intellencer Will Likely Go Online-Only

Looks like Seattle will soon go from being a two-newspaper town to a 1.5 newspaper town. The Seattle Post Intelligencer is probably going to shift to an online-only model, with fewer reporters.

Last week, the Rocky Mountain News went a different route, shutting down completely, leaving Denver a one-paper town.

I know I'm the only one keeping track of this tidbit: but I've written op-ed articles for the Rocky, the Seattle P-I...and the San Francisco Chronicle.

And the SF Chronicle isn't looking too healthy.

I'm trying not to take this personally.

After all, I've written op-eds for other newspapers that at this point I don't want to name in order to help them survive. Back in 1987, I wrote articles for a number of publications that failed before the articles could be published. I felt pretty badly about that, too.

I'm sure it's just a coincidence.

Let's hope the Seattle P-I's move to online-only is successful.

Mainstream Media (MSM) Will Experience at Least Five Changes in 2009

1. Dozens of secondary newspapers and magazines will shift to an online-only model in 2009. Already this year, FinancialWeek announced that it is shifting over this month. The benefits of the online-only model include substantial savings now that they no longer have to print, mail and deliver content (to newsstands and homes). The downside: they lose three revenue streams – display and classified advertising from the print edition as well as subscription fees – and now rely on online advertising to fund their operations. Online subscription fees have worked for only select media – even the New York Times couldn’t make a fee-based plan work. Expect some surprises as some larger market papers find themselves in real trouble (for example, the Times' cutting its dividend). Addendum: The day after we posted this, the Times reported that the Seattle Post-Intelligencer, a good, large-market paper in a two-paper town, may go online-only or shut down within 60 days.
2. Traditional media that continue to publish print editions will update their formats to include more maps, graphics, lists, ranking and stats, along with shorter articles. These print editions will also be shorter, with some papers – including the Denver Post and Boston Globe – having shed stand-alone business sections. The same holds from magazines. As Fortune tech reporter, David Kirkpatrick wrote on Twitter: "an indicator of the sorry state of the economy – and the magazine industry: the new issue of Time – a mere pamphlet." (Don’t forget: Time and Fortune are published by the same company! And Fortune’s current issue is pretty thin, too.)
3. These smaller floating business sections are not likely to achieve their publishers' goal because the sections are more difficult for readers to find and these sections provide less coverage of business at a time when the economy is in turmoil and undergoing seismic shocks -- a time when people need to more closely understand what's happening and how it impacts them. These smaller sections will also be less interesting to advertisers, too, because readers may easily skip over them.
4. The value of content is changing. Traditionally, the value of the entire newspaper or magazine was worth a lot. Now, individual articles (available often by RSS feeds, Tweets, Google or other search engines) are worth more than the newspaper as a whole because technology has enabled us to consume only that which really interests us. It’s more efficient this way, but paging through a newspaper ensures you get a broader sense of what’s going on. It’s a more niche world.
5. Stringers and citizen journalists will become more important. Because of staff cutbacks and bureau closings, MSM may not be able to find and send reporters or crews to cover breaking, important news outside their immediate region. The tragic shootings in Mumbai is an example where MSM, including some of the biggest names in journalism, relied on first-hand local reports. For example, CNN uses footage from iReport, and has been posting citizen video footage since Hurricane Katrina. Expect this trend to continue.

Seattle's Newspaper Environment May be Post Post-Intelligencer

According to the New York Times' Richard Perez-Pena, there's bad news for Seattle, one of the remaining two newspaper towns. In the article, Perez-Pena reports, "Hearst said that if it could not find a buyer (for the Seattle Post-Intelligencer), it would either shut the paper entirely or make it an Internet-only operation with a much-reduced staff."

The decision could be made within 60 days.

Interestingly, until now, the Seattle Times was considered to be the paper more at risk.

Check out the article: "Hearst Looks to Sell or Close Seattle Paper."