This is not a financial story. It is a story about communications. Yesterday I posted about the emergence of a Social Media Release (SMR) and outlined how it works – by targeting readers with pre-disposed interest and fanning the flames of viral spread by plugging in key messaging automatically to various social media to spread word and images. It is a significant development, frankly, that is a signpost about how the nature of communications is rapidly changing. Those who don't keep up, lose out.
Another signpost exists with the financial condition of our leading newspapers. Much has been written about the drop in advertising revenues, as demonstrated by recent figures from the Newspaper Association of America showing a nearly 18% drop in one year. Papers also face increasing obligations with respect to retirement obligations. This has meant a string of bankruptcies and hard times as newspapers struggle with diminishing ad revenues and diminishing readership – as people move to other ways to gather their news.
Each financial event alone would be news. Together, it is a bit of a financial tsunami hitting the print industry. There is no single reason for the financial hard times, and one wouldn't suggest that it is all due to the emergence of digital and social media, but one also cannot discount digital media as a factor.
Consider the following:
- Philadelphia Newspapers – On February 22, 2009 the Philadelphia Newspapers, owning the Inquirer and the Philadelphia Daily News, as well as Philly.com files for bankruptcy protection facing a debt load of $390 million.
- The Journal Register Company – The New York Times reported a day earlier on February 21, 2009, that the Journal Register Company which owns 20, count 'em 20, newspapers, including the New Haven Register and the Trentonian was also filing for bankruptcy protection, with its stock trading for less than one cent.
- New York Times – On January 23, 2009, Crain's reports that Moody's has lowered the senior unsecured rating to that of "junk" status. In addition to the Times, the company publishes the Boston Globe and the International Herald Tribune and Crain's reports a debt of $1.1 billion.
- The Tribune Company – The Washington Post reported that on December 8, 2008, the Tribune Company, which owns the Los Angeles Times and the Baltimore Sun, was filing for bankruptcy with $12.9 billion in debt. The largest creditors include some of the major banks that have seen so much trouble, and in some cases had to merge and are recipients of the major government funding action aimed at saving banks, demonstrating that not only are the banks in trouble, but some of their largest borrowers – ones who don't get federal funding support – are also in trouble.
Other well-known papers are letting staff go in droves or offering buyouts. Many of these reporters are very well-known in the reporting arena in healthcare and pharmaceutical news, such as Ed Silverman who wrote the popular blog Pharmalot and reported for the Newark Star Ledger.
What is the significance of this? In its article about the Tribune Company, the Washington Post noted this –
"Despite the hard times, the most recent newspaper bankruptcy of note may have been that of The Washington Post – in 1933."
Still, this is still not a financial story. Rather, the rash of hard times on the nation's newspapers signals that there is a potential for a huge shift. Part of that is that people are changing the way they get news – setting up aggregators and readers that essentially compile the news they want to read rather than the news that is packaged for them by newspapers. The other part is that given the financial pressures, the ways that papers deliver the news is also going to have to change.
Development such as the SMR are indicative of that trend. It pays now for all communicators, whether journalists, companies or federal agencies spreading news about recalls, to read the signposts, and to adapt quickly by analyzing the environment, anticipating change and ensuring exceptionally high levels of digital literacy among existing and future staffs.
