By Joe Smyth
CEO
Independent Newspapers, Inc.
Sometimes, newspapers are their own worst enemies. Many of them give themselves the same negative media coverage that everybody complains about. These self-anointed pundits predicted newspapers would die when radio emerged, predicted it again when television emerged, and they’re doing it again with the internet. They will be wrong again.
Newspapers still have great value, are still in great demand and will continue to thrive. Compared to the general population, newspaper readers
• have higher incomes
• spend and invest more
• are much more likely to vote
• and are more involved in their communities
It’s a terrific demographic.
The industry’s biggest problem is that many highly leveraged speculators purchased newspapers at inflated prices and then cut quality to try to squeeze out obscene profit margins to support the debt. Those are the companies that are generating most of the gloom and doom news about newspapers.
You don’t hear as much about the independent companies like ours that avoided the over-leveraged speculators, can thrive on modest profit margins, and are still dedicated to providing real value to readers and advertisers.
In our case, we’re lucky that we don’t have to pay off speculators or send dividends to Wall Street because we are owned by a non-profit holding company that allows us to reinvest all after-tax profits in the company. This long recession is hurting us just as it is hurting other businesses, but we’re surviving it very nicely --- thanks to the sacrifices and hard work of our people. We are confident the fundamentals of our business are sound and our future is bright.
It may be true that not as many people have time for the big city daily newspapers these days, but our locally-focused newspapers still enjoy strong reader loyalty. Our print products are still the best way for advertisers to target specific local markets with more penetration and more intense readership than they can get elsewhere. We still believe newspapers will thrive if they provide real value and accept reasonable profit margins.
We love the internet and don’t feel threatened by it. Our websites allow us to provide more content to our communities than we could ever include in the print product alone. We love the unlimited space, the interactivity with readers and the fact that there are no newsprint, ink, printing and delivery expenses. The websites admittedly aren’t a big source of revenue yet, but they are a great way to help us fulfill our community service mission. Our websites complement our newspapers instead of competing with them.
As the internet exploded, many newspapers rushed to put all of their content online for free. By doing so, they essentially sabotaged themselves. What they have learned is that internet advertising isn’t significant enough yet to support good journalism. Now that they have trained readers to expect content on the internet to be free, they are hoping those same readers will be willing to pay. Good luck with that!
We took a different approach with newszap.com. First, we created “community websites” instead of “newspaper websites”. The slogan is “free speech & free ads”, and the communities have responded. Most of the content is provided by the users --- not by the newspaper. Local and state public forums at newszap.com are quite robust and popular --- and are monitored by the users instead of us.
Our community websites and newspapers cross-promote one another, but the newspaper still has exclusive content that can be found only in the newspaper. Each newspaper has an e-edition that includes all the news and advertising, so readers can read the newspaper online or in print. We predict “digital only” will be a losing strategy; we intend to continue to offer readers their choice. Regardless of which way they read it, our job is to provide worthwhile products that also get results for our advertisers.
