Newspapers Seek to Offset Circulation Losses

Declining circulation and ad revenues have led to cuts in the newsrooms of many major American newspapers. New York Times business columnist Joe Nocera tells Scott Simon what the companies are doing to survive.

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SCOTT SIMON, host:

This is WEEKEND EDITION from NPR News. I'm Scott Simon.

Coming up, can organic foods have synthetic properties and still be called organic?

But first, bad news for news. Knight Ridder, one of the nation's biggest and most prestigious newspaper chains, is for sale. No prospective buyer has emerged. The Tribune Company, another prestigious newspaper chain, has announced deep cuts in its newsroom, as has The New York Times and The Boston Globe. But ironically, newspapers as an industry are still showing profits around the country. Our friend from the world of business, Joe Nocera, columnist for The New York Times, joins us from the studios of WFCR in Amherst.

Joe, thanks very much for being with us.

JOE NOCERA (The New York Times): Thanks for having me, Scott.

SIMON: Why cut when the industry is doing pretty well?

NOCERA: Because the industry's doing a lot less well than it used to and because it feels really quite threatened by both the rise of the Internet and the need to feed that beast called Wall Street, which wants quarterly profits and high margins.

SIMON: The cuts announced, for example, at the Los Angeles Times seem to be coming at a particularly bad time because the LA Times is coming off a whole raft of awards that they won for reporting. The Chicago Tribune's cutting, the LA Times, as we mentioned; the Philadelphia Inquirer, another prestigious paper, has announced newsroom cuts. The New York Times has announced cuts. At some point, does cutting staff cut the market value of the paper?

NOCERA: Well, that's a good question. I mean, there's a certain chicken-and-egg question to all of this, which is: If you degrade the quality of the news in the newspaper, is that feeding on the decline in circulation? Or is the decline in circulation what's driving the need to cut staff? So you look--just in the last six months, the LA Times' circulation down 3.79 percent; The Washington Post, down 4 percent; The Boston Globe, down 8.25 percent; the San Francisco Chronicle, down 16 percent; the Philadelphia Inquirer has seen circulation decline 30 or 40 percent in the last two decades.

So you have a systemic problem here that nobody knows how to turn around. You have young people not reading the newspapers nearly as much anymore; people turning to the Internet. And then you also have, Scott, advertising gravitating from the newspaper--the paper paper--to the Internet, and even if it winds up, say, from The New York Times' newspaper to The New York Times' Web site, The New York Times is still getting less money from that ad because ads are much less expensive on the Internet. And this transformation is completely turning the newspaper industry upside-down.

SIMON: Can you foresee a day when a major metropolitan newspaper decides to become a totally online enterprise?

NOCERA: Well, in the immediate aftermath of the hurricane, the New Orleans Times-Picayune was online only and they did it pretty darn well. But people use newspapers and they use online in very different ways. So for example, at The New York Times, the average person who looks at The Times online looks at it 45 minutes a month. The average person who buys the paper newspaper looks at it 35 minutes a day. So it's a very different experience, and it seems to me unlikely that you will have an all-online newspaper, certainly not one of the large newspapers.

SIMON: The other question this presents is: Can you foresee a time when a major metropolitan area won't have a local daily newspaper?

NOCERA: I hope not, but I think it is a possibility. Let me make one other point. If you look at the stocks of the newspaper companies that have performed the best, they are Scripps Howard and The Washington Post. Both of those companies get substantial amount of revenues from non-newspaper sources. In the case of The Washington Post, they get 25 percent of their profits from Kaplan, the SAT prep company, which they bought. Scripps Howard gets a huge chunk of their profits from HGTV and the Food Network, which they bought. The companies that have really struggled are the ones that have doubled down in newspapers. So for instance, The New York Times bought The Boston Globe. That has not helped.

SIMON: Yeah.

NOCERA: And so the newspaper companies that have expanded outside of newspapers have done the best, and the newspaper companies that have doubled down on newspapers have done the worst.

SIMON: Joe Nocera, a columnist for The New York Times--for the moment, speaking with us from Amherst, Massachusetts. Joe, thanks for being with us.

NOCERA: Thanks for having me, Scott.

(Soundbite of laughter)

NOCERA: You just can't help yourself, can you?

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