Sunday, January 11, 2009

Some Thoughts On The Demise of the P.I.

The fact the Seattle P.I. is facing almost certain closure after such a long and rich history, should come as no surprise. A newspaper has to reflect the values of the community it serves if it is to be successful — especially in this economy. In what's become a rapidly shifting landscape in the newspaper business, that fact is more critical now than it's ever been.

Seattle is a very liberal city, so the knee-jerk reaction is that the P.I. reflects the values of its community. In truth, it reflects the values of its core readers — the ultra-liberal Seattle establishment — but not those of the communities it serves.

The P.I.'s service area encompasses a lot more than the Seattle urban core. It includes the blue-collar working-class suburbs where families live — places like Kent, Renton, Auburn, Burien, Federal Way, North Bend, Everett, Arlington, etc. It also includes us here on the Kitsap Peninsula, as well as Pierce County. Both are dominated by the military, blue collar military support workers and their families, and except for a highly vocal minority — and Bainbridge Island — these folks are decidedly more conservative than downtown Seattle. The extremist liberal views espoused by the P.I. don't even begin to reflect the thinking of these folks. So while the P.I. may reflect the urban liberal viewpoint, it doesn't reflect the thinking of the majority of people in the area it must serve to survive as a business. Currently, the P.I. readers account for slightly more than 11 percent of its total service area population. That's extremely poor market penetration for a daily newspaper, which explains why the Joint Operating Agreement between it and the Seattle Times, became necessary almost 25 years ago.

This is the problem a lot of leftist-leaning newspapers (and liberal talk radio as well) are facing, and why some of the conservative-leaning dailies, as well as community weeklies, are still weathering the economic assualt on the newspaper business while they gear up their online offerings to accomodate the upcoming generation of readers raised on the computer. The survivors reflect not only the thinking of the majority of their readers, but of their advertisers as well. And while the product of newspapers is supposedly unbiased information, the true bottom line is ad revenue. And when your editorial bias runs off not only your readers, but your advertisers too, that's a business model that isn't sustainable in these economic times.

We've seen a lot of left-leaning newspapers like the P.I. blaming technology, competition from the Internet, unsustainable overhead, and everything but their own nakedly partisan editorial decisions regarding product, for the state of the newspaper business today. Coverage of the most recent presidential election underlined the blatant left-wing bias of many newspapers around the country. Now that they've gotten their candidate elected, it will be interesting to see how the liberal survivors position themselves when it comes to reporting anything negative about the Obama administration. Remember, 48 percent of the country voted against Obama, and they buy — and advertise in — newspapers too. Or maybe, because they've become so disillusioned with the left-wing partisanship that passes for journalism these days, they simply don't anymore.



  1. Oh come on, this is far reaching. It has to do with ad revenue being down for all publications and readers turning to the web for their news and reading material. Maybe this NY Times article will help you out.

    Prominent Magazines Lose Weight, Shedding Nearly Half Their Ads

    AT a glance, the covers of Allure magazine from January 2008 and January 2009 do not look very different from each other. The 2008 issue trumpeted headlines like “Mega Makeover Issue” and “Insanely Flawless Skin,” and 2009 has “Big Makeover Issue” and “Powerful Skin Care.”

    Compared with a year earlier, January looks especially bleak for Condé Nast.

    Inside the magazine it was a different story: the January 2008 issue had almost 70 pages of ads, while the January 2009 issue had 41, according to the Media Industry Newsletter, a decline of 41 percent.

    It was an ugly January not just for Allure, but also for Condé Nast magazines in general.

    January issues tend to be thin even in good years, and most magazines posted a decline in ad pages. But the average decline across all monthly magazines was only 17 percent, and most Condé Nast magazines fared much worse, according to analysis of Media Industry Newsletter data.

    Wired, which is usually thick with consumer electronics ads, was the worst hit, down 47 percent from a year ago to 43.6 ad pages. Architectural Digest fell 46 percent, to 63.2, from 116.8. Vogue and Lucky were both down about 44 percent.

    Of the 10 monthlies with the worst declines in January, four were Condé Nast magazines: Wired, Architectural Digest, Vogue and Lucky. It was the only publisher with more than one title in the top 10. The other hardest-hit magazines were Boating, published by Hachette Filipacchi Media; Power & Motoryacht, published by Source Interlink Media; Everyday Food, published by Martha Stewart Living Omnimedia; Salt Water Sportsman, published by Bonnier Corporation; Texas Monthly, published by Emmis Communications; and Boys’ Life, published by the Boy Scouts of America.

    Only two Condé Nast magazines did better than average: Glamour, which was down 15 percent, and Vanity Fair, down 5.9 percent. (W Magazine was down just 2.4 percent, but it is published by Fairchild Publications, a division of Condé Nast.) Condé Nast executives were unavailable to comment late last week because they were on vacation, their representatives said.

    Condé Nast magazines casting wider nets for ads seemed to fare better. Allure and Glamour are both aimed at young women, for instance, but Allure carries mostly beauty and fashion ads, and Glamour carries those categories in addition to health, pharmaceuticals and food. And while Vogue features women’s fashion ads and GQ carries men’s fashion ads, Vanity Fair has both alongside ads for TV shows, cars and hotels.

    Roberta Garfinkle, the senior vice president and director for print at TargetCast TCM, which buys and plans advertising placements for clients like Expedia and Sun-Maid Growers, said ads for Condé Nast’s January magazines must be submitted by October or November, which hurt the company this year, as there was so much financial uncertainty in play.

    “January books with very early closes have always had a problem,” she said, “made worse this year by the fact that clients are slower to approve their budgets and that perhaps there are clients that are cutting back.”

    While January issues are rarely bulging with ads, December issues are, as marketers try to reach holiday shoppers. But the Condé Nast magazines that published combined December-January issues, including Cookie and Condé Nast Portfolio, did not do well either. Cookie plummeted 45 percent to 93.2 pages, Portfolio fell 35 percent to 72 pages, Domino was down 26 percent to 60.9 pages, and Teen Vogue declined 29 percent to 105.4 pages.

    “Some of the advertising they carry in luxury goods, certainly in the automotive arena, without being able to look at the numbers broken out by category, I think that’s why they’re hard hit. The fashion pages are down,” Ms. Garfinkle said. “Some clients cutting back on their budgets makes it that much worse.”

    Unlike other publishers, Condé Nast is known for being inflexible on ad prices.

    “The problem now is that some advertising agencies have come to realize that with the unnegotiability of Condé Nast’s titles, and the broader demographic group that are associated with the more mid- and downscale brands, you don’t have to buy Condé Nast,” said Steve Greenberger, chief executive of the advertising firm S. R. Greenberger & Associates. “You can buy Women’s Day, you can buy Parents. You can buy around it.”

    But Jack Hanrahan, the former director of print at the agency OMD who is now publisher of the newsletter CircMatters, said that Condé Nast had a smart long-term strategy.

    “In a negotiation environment, you’d be better off taking the hit now with regard to paging, but preserving your well-established, in their case long-term, pricing position of being equitable across advertisers and not really engaging in heavy discounting and widespread negotiations just to get a small schedule,” he said, using the industry term for an advertiser’s annual commitment to a magazine. “And you can do that when, one, you’re not a public company, and two, you have these larger bases of ad pages.”

    Condé Nast is a private company, and does not report quarterly revenue, unlike Time Inc., Hachette Filipacchi Media and American Express Publishing, which are all part of public companies. Mr. Hanrahan said other publishers regularly offer heavy discounts to advertisers.

    Condé Nast’s is “a fair approach to pricing and not this ‘I’ll do anything to get a schedule,’ which others do — and, I think, have paid for it,” Mr. Hanrahan said.

    Published: January 4, 2009

  2. No disagreement here. It is ALL about ad revenue, and I pointed that out. The problem is - and we've seen this locally as well - when you run off the readers with disagreeable editorial positioning, you dilute the numbers that ad revenues are based on. Less readership translates into reduced amounts that can be charged for ads, reducing overall ad revenue. You reach a point of diminishing returns, to where publication costs more than ads generate.

    And while the aging baby boom generation is the main group of people still reading in print, there is still a significant cost to publish online. Someone has to do the writing, build the ads on the computer, format the content, post the assembled product online and keep it current. The individual cost items are different than print publishing, but they are still there and they are significant.

    What has been even more troubling for the publishing industry, is that in this transitional period where print readers are dropping and online readers increasing, it has become necessary for publishers to have to maintain two entirely different, and cost intensive, operations. And except for writing, the skills necessary to do this don't overlap, which means more employees. That's why so many publications, and especially newspapers, have laid off staff reporters and gone strictly to freelance writers as a way to cut costs.

    But the bottom line is, if your editorial positioning reflects the bias of the majority of your readers, you have a MUCH greater chance of success than you have pissing them off. At some point, they stop reading your publication — and in this day of online publishing it's become SO much easier to find content that you agree with, and that's where the readers gravitate to.

  3. You clearly have a problem with a liberal-leaning media, and not just because it isn't a sustainable business practice. So having a right-leaning editorial bias is the proper business model for publications to follow? If 52% of Americans didn't vote republican, then it seems your argument is flawed. I would also assume that number is much higher for the geographic region the PI covers.

    I find it astonishing that you blame the liberal media for the decline of print advertising amidst a readership exodus to the web and a recession.

    How doe these "conservative-leaning dailies ... still weathering the economic assualt on the newspaper business " "reflect the values of the community it serves?"

    I don't disagree that there is a liberal bias in the media. But how does placing blame on the "liberal media" or implementing a conservative bent to editorial content make any strides toward salvaging print publications? Innovation and finding a way to monetize online content will be key to making print and online publication survive. To use your words, passing off right-wing partisanship as journalism won't solve anything.

  4. As you openly admit in your first sentence, liberal-leaning media isn't a sustainable business model. That was my entire point. Case Closed.

    This wasn't about my personal bias either way. The bottom line here is the P.I. serves and is distributed in an area with population base of about 1.7 million. It's daily circulation is about 117,000. That's extremely poor market penetration for a daily paper. If it wasn't for the JOA, the P.I. would have either been out of business 20+ years ago, or changed its editorial stance to better reflect the bias of its readers - the people who actually BUY the product.

    This isn't rocket science. It's all about ad revenue. Ad rates are set based on the number of readers. The number of readers of a newspaper are usually determined by the number of people who prefer the editorial stance of that particular paper. The P.I.'s liberal bias doesn't resonate as well as that of the more conservative Seattle Times, which is why it's in better conditionally financially (albeit not in the best shape either) than the P.I. But not having to financially support all of the business functions of the P.I. except news gathering, will improve the Times' bottom dramatically.

    This wasn't about liberal vs. conservative - or even liberal vs. moderate. It's about a newspaper having an editorial bias that reflects the views of the TOTAL community it serves - not a small, but vocal minority of it. If the P.I. were distributed nowhere but inside the Seattle City limits, it might very well be a financially viable enterprise because there is both an advertising base there and a substantial readership base. Printing and distribution costs would be significantly less, as would news gathering and other general overhead.

    However, what passes for agreeable editorial thought and positioning in downtown Seattle, as opposed to places like Kent, Carnation, Covington, Puyallup, Bremerton, and all the other places the P.I. is currently distributed, is quite different.And therein lies the problem.

    Nothing more to it than that.

  5. No, you misunderstood. You stated that liberal-leaning media isn't a sustainable business model. I am not arguing that point. I was implying that your position on the liberal media goes beyond whether or not is a good business model.

    You are using only facts that support your opinion. Let's look at the Times' circulation: 198,741 and steadily declining. A stagering 81,000 more than the PI!

    Readership at ALL print publications is declining across the board, not just liberal-leaning newspapers. To imply that a shift in editorial stance, whatever it may be, would save the PI is ludicrous.

    To say that "The number of readers of a newspaper are usually determined by the number of people who prefer the editorial stance of that particular paper" fails to take into the account that more people are getting their news online, and advertisers are taking their ad dollars there, as well. Furthermore, the economy is driving even more people to free sources of news and forcing business to cut back on advertising.

    To blame the liberal media for the demise of newspapers shows your bias.

  6. I believe you're the one who has misunderstood my point. And as you admit, the media does lean left for the most part. I don't really have any more of issue with that than I would if it leaned as far to the right. It shouldn't be leaning in EITHER direction. The media's job is to report the facts, unbiasedly. It doesn't do that in this day and age, and I have more of a problem with that than in which direction it leans.

    You are correct - readership of ALL newspapers is declining - and will continue to do so. That is because the aging baby boomers are now the primary print readers, while Gen-X and Gen-Y read online.

    That said, why are liberal leaning papers declining at a much faster rate than moderate and conservative ones, and why did they begin that decline much sooner? Those are the questions you should be focusing on — not trying to paint me as biased for simply pointing out what is reality in the business I've spent my lifetime working in. You're trying to shoot the messenger rather than deal with the message.

    Personally, I believe that decline is because many people simply grow more conservative as they get older. Those are the main people still left reading in print. They'll support the paper that reflects their views more than one that doesn't. Like I said, it isn't rocket science.

  7. I understand your point, which you are entitled to. I just don't happen to agree with it.

    I do agree that the media is largely left-leaning, and it affects the integrity of their reporting. Like you said, not rocket science.

    As a recovering journalist myself, I know how hard it is to not let personal opinion and emotion make their way into choosing stories and writing. Hopefully the remaining print outlets of this shakeup, whatever the cause may be, will not let political motivations and personal beliefs drive their editorial content.

    Like you said, as a member of Gen X, I get my info online, including from blogs like yours and online publications, such as the KPBJ. I believe these, along with traditional media, play an important role in our society. having said that, I hope you are right that a centrist media can survive, despite the challenges that exist.