MELISSA BLOCK, Host:
For newspaper readers in Detroit, the economic downturn has landed on their front step with a thud. Today Detroit's two daily papers announced they're cutting home delivery to three days a week. The industry as a whole is facing declines in circulation and ad revenue, but these are the first big city papers to make this sort of change. As Detroit Public Radio's Noah Ovshinsky reports, these papers may not be the last.
NOAH OVSHINSKY: There is a grand experiment about to take place in Detroit. Executives at the Detroit Free Press and the Detroit News announced today that they plan to drastically cut back their printing operation and beef up their Web presence. Under the new plan, papers will only be delivered on Thursday, Friday, and Sunday with a scaled-down print version available at newsstands the rest of the week. Free Press Publisher David Hunke says the papers have no other choice.
BLOCK: We think it's time to quit sticking our heads a bit in the sand, taking incremental steps, and, frankly, relentless across-the-board expense cuts in our business, in the name of hoping that it comes back to the way it used to be in years gone by.
OVSHINSKY: It used to be that newspapers competed largely with each other for classifieds and advertising revenue. But now the industry faces a crowded marketplace that includes a big gorilla - the Internet. Experts say the problem is that newspapers haven't figured out how to make a lot of money off online content. Mark Fitzgerald is an editor at large with Editor & Publisher magazine.
BLOCK: For every customer that they have for the print newspaper, they're making about a dollar. For every customer they have on the Internet, they make about 10 to 15 cents.
OVSHINSKY: The recent bankruptcy filing by the Tribune Company highlights another financial hurdle facing some newspapers. The parent companies have accumulated more and more debt in recent years. Mike Simonton follows the industry for Fitch Ratings. He says that's put added pressure on daily newspapers.
BLOCK: Those companies that have put a lot of debt on their balance sheets certainly have a lot less flexibility and a lot less room to endure this type of pressure. And so when the revenue goes away, they need to take out costs quicker than a company that has a little more cushion over its interest payments.
OVSHINSKY: Financial climate aside, the decision by Detroit's two daily newspapers to cut back home delivery in favor of online content comes with a great deal of risk.
BLOCK: What's your favorite section in the paper, Meredith(ph)?
BLOCK: Puzzles and games.
BLOCK: Puzzles and games.
OVSHINSKY: That's Kate Knight, a stay-at-home mom, and her four-year-old daughter. They're sitting at the kitchen table with a Detroit Free Press sprawled out in front of them. Knight is part of a key demographic for newspapers, the habitual reader. She also took part in a focus group sponsored by the paper. She says home delivery is a big part of her family's routine.
BLOCK: I grew up fighting for the Free Press with my three siblings, and my kids fight over it now, too. So, it's a great family tradition.
OVSHINSKY: Knight says having a paper on the table every day helps nurture a family of readers. and there's another dilemma.
BLOCK: You know, five- and eight-year-olds who get a limited amount of time online, if he's to choose between legos.com and the Freep, I'm not sure the Freep will win.
OVSHINSKY: Knight won't be the only person waiting to see what the long-term impact of the changes will be. M.L. Elrick, an investigative reporter with the Free Press, says lots of industry eyes are on Detroit.
BLOCK: We're going to be a living laboratory for the newspaper industry. Hopefully, we're going to be the people who come up with the cure for what ails the newspaper industry. But at the same time, there's a chance that we aren't.
OVSHINSKY: Elrick's boss, David Hunke, was asked if this new plan doesn't work, would they go back to the traditional model. His answer, "We're never going back." For NPR News, I'm Noah Ovshinsky in Detroit.
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