A Newspaper Business Model That's Working

Those of us in the newspaper industry have been closely following the struggles of the daily newspapers for some time now. Business models have changed, advertising has changed, prices keep going up, and readers are finding their news elsewhere.

However, I'd like to point out (again) that weekly and community papers should not be listed among these seriously struggling major news entities.

Dan McDonough Jr. and Alan Bauer - founders of a community newspaper/media company based in Haddonfield, N.J. - comment on this topic in a recent article:

The National Newspaper Association (NNA) last month reported on a study that showed community newspapers were far less affected by the challenging economy than the industry in general (or the economy in general, for that matter). The Suburban Newspapers of America and NNA's reporting group showed 2008 fourth-quarter advertising revenue of $428.7 million, only a 6.6 percent decline from the same quarter in 2007. The Glennco Consulting Group estimate was much worse, however, for the overall newspaper industry. There it showed decline in fourth-quarter advertising expenditures of 21 percent, according to the NNA.

So while advertisers cut their spending by 21 percent across the industry, the impact to community newspapers was less than 7 percent.

In addition, 26 percent of the SNA/NNA reporting group launched new products in 2008. Indeed, many community newspaper companies are growing.

Further:

We know that, for advertising to be effective, people have to actually see the ads. Our business model and philosophy of making sure "Everybody Gets It. Everybody Reads It." pushes us to bring local news not found elsewhere to everybody who has an address in town [...]

For instance, huge regional daily newspapers would do better to stop requiring people to subscribe and instead deliver the paper to everybody in their target demographic (the market that key advertisers want to reach). If big newspapers would charge the advertisers, not the readers, they could still turn things around.

I wholeheartedly agree that local news is a product that is never going to get stale.
However, I strongly disagree that charging advertisers more will help big newspapers turn things around. The majority of newspaper revenue already comes in from advertising, not reader subscriptions. As someone who works with newspapers daily, I'll tell you that big newspapers already charge their advertisers a ridiculous amount of money, and raising prices any higher would cause some major waves in an already tumultuous industry.

A better solution? Work with advertising agencies to create relationships that are mutually beneficial! Many of the community newspapers (and newspaper associations) have taken this route, and according to the recent revenue numbers, it seems to have been a wise choice.



(Courtesy of The Christian Science Monitor and Yahoo! News)