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Daily Newspaper Death Spiral Accelerating
The pace of news about the decimation of the daily newspaper industry is accelerating, and the picture is getting uglier and uglier every week. Among the recent stories, McClatchy is freezing wages, Gannett is reducing headcount by 1,000, and JCPenney and Kohl’s both announced plans to drastically cut back their newspaper circular advertising. Cox Enterprises announced that it plans to sell the Austin American-Statesman and all of its stand-alone community newspapers in North Carolina, Colorado and Texas as well as its direct mail business ad business Valpak. This news comes on top of announcements that dailies in San Diego and Newark are up for sale. (No news yet either, by the way, on Landmark Communication’s efforts to unload all of its dailies and weeklies). For newspapers, the capital market mantra appears to be: buy high, sell low – but sell now because it’s going lower in a hurry.
Many have been pointing to rapid growth in newspaper web site ad revenue and readership as the only bright spot in the newspaper business, but that, too, has shown recent signs of weakness. Not only is the rate of ad revenue growth slowing to a crawl, but newspaper web traffic stats are being mocked around the industry. Newspapers who looked desperately to a lopsidedly unfavorable deal with Yahoo for traffic growth are just now beginning to realize that their hopes and aspirations were, at best, misplaced.
The poster child for daily newspaper industry carnage, Tribune Company, marched a step closer to bankruptcy and Sam Zell openly called his acquaition of the media behemoth “the deal from hell.” There is no conceivable way he can possibly turn that abomination around, even if the Cubs do win the series, but I’d still keep my money on Minneapolis to lose its daily first.
Steven Smith, Editor of Spokane’s Spokesman Review, has written perhaps, at least to this point in time, the definitive eulogy (or is it an elegy?) on the death of the newspaperman. Without a doubt, we’ll be seeing more of these in the months ahead.