The Inevitable Decline of the Journal Sentinel
The newspaper has unique strengths, but will that be enough to stop it from going out of print?
Newspapers are rarely honest when reporting themselves. The Milwaukee Journal Sentinel described the deal between Journal Communication Inc. and E.W. Scripps as a merger, but it’s really a buyout, with Scripps stockholders getting the majority of the stock, as I’ve written.
And when the Tribune Company unloaded its newspapers, as NYU journalism professor Clay Shirky has written, the New York Times ran a story with the headline “The Tribune Company’s publishing unit is being spun off, as the future of print remains unclear.”
Unclear? Shirky, in a scathing blog post for Medium, ridicules the notion that there is anything the least bit unclear about the future of print: “Maybe 25 year olds will start demanding news from yesterday, delivered in an unshareable format once a day. Perhaps advertisers will decide “Click to buy” is for wimps. Mobile phones: could be a fad. After all, anything could happen with print. Hard to tell, really.”
In fact, Shirky notes, “the future of the daily newspaper is one of the few certainties in the current landscape: Most of them are going away, in this decade.”
Then he runs a graph based on statistics from the Newspaper Association of America (NAA), tracking the extraordinary rise and fall of ad revenue for newspapers, which grew from just under $20 billion in 1950 to $65 billion in 2000, only to plummet to about $22 billion in 2012, including both print ($19 billion) and online ads (a measly $3 billion).
To casual observers, the Sunday edition of the Milwaukee Journal Sentinel looks like a gold mine: all those advertising inserts that tumble out from the paper. But they are actually a bad sign, because these are all advertisers no longer willing to buy display ads within the paper and only paying the much cheaper “insert” fee to be tucked into the paper. “From the advertiser’s point of view,” Shirky writes, “the nation’s newspapers have become little more than a blue-bag delivery service, with a horoscope and enough local sports inside to get people to open the bag.”
Still, those inserts are generating enough money so Sunday newspapers can subsidize the rest of the week’s papers. (In the case of the Journal Sentinel, the Wednesday paper and its Food section also attracts a lot of inserts.) But these will inevitably disappear, Shirky writes: “Stores like Kroger’s and Safeway already offer online coupons direct to customers. This digitization is progressing as print circulation decays… As digital alternatives become attractive while print circulation withers, business will start to shift their money away from inserts. When the inserts go, Sundays won’t prop up the rest of the week. When Sundays turn bad, the presses will become unprofitable.”
And once that happens, go back to those figures on ad revenue. Newspapers nationally will be left with that online revenue, now about $3.5 billion (in 2013), compared to $65 billion in 2000. Yes, some newspapers are making additional money through online pay walls and other schemes, but that comes nowhere near making up the difference. As newspapers convert to online only, they may be able to afford a tiny fraction — perhaps less than 10 percent — of the staff they once had.
Under that scenario, the buyout of Journal Communications could actually help its newspaper, since it will be part of a chain, to be called Journal Media Group, which will be able to save some money by consolidating some functions for the 14 newspapers it will own.
The Journal Sentinel also has one other thing going for it: the paper’s extraordinary penetration of its market. It has for decades been near the top of all newspapers in the percent of all adults in its market that subscribe to the paper. In the most recent rankings by Scarborough Research, the JS ranked first among the top 50 markets for both daily and Sunday paper in the percent of its metro-area adults who subscribed.
Perhaps. But if you take a look at the “most popular” stories at jsonline for the month, week and day, the majority are typically sports stories. This is a a town that loves sports. Milwaukee ranks fifth among Major League Baseball towns in the percent of adults who “follow” (on radio or TV) their baseball team regularly. As for pro football, Green Bay ranked first in the NFL in the percent of adults (84 percent) who follow their team, and I suspect the percentage would be nearly as high in Milwaukee (which wasn’t studied in the Forbes story). The Packers may be the closet thing to a religion there is in Wisconsin, and its cerebral high priest is JS sportswriter Bob McGinn. The traffic jsonline gets for Packers coverage is phenomenal.
The newspaper’s remarkable market penetration makes its Sunday inserts more valuable, but probably only means the decline in this revenue will happen more slowly here. The paper’s Packers coverage also means it may do better than some newspapers in building online subscriptions. But in the grand scheme of things, that merely means the newspaper might be able to afford a slightly bigger staff than comparable papers. If the projection of Shirky and others is correct, the Journal Sentinel will be going out of print and shrinking to a vastly smaller publication within this decade.