Newspapers Feasting on Each Other to Survive

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Like a giant game of Pac-Man, bigger newspapers around the country are gobbling up smaller papers, all in the hopes of creating a more formidable, united whole. It’s about the ever-elusive advertising dollars. They just aren’t there, especially for smaller, local papers. But with a consolidation strategy, a little time is being gained before the next game play.

The presumed destiny of newspapers has played out quickly. Faster probably than many purists ever believed possible. One minute, newspapers were king. Then that determined little thing called the Internet came along and brought with it a momentum that would change the face of the daily paper for good. And for worse.

RELATED: Warren Buffett: What Newspapers Need to Do to Survive

Advertising might be a long-term losing proposition. Budgets have gone more and more toward digital, yet digital still hasn’t gotten it sorted out. But with larger papers feasting on the little presses in towns across the U.S., at least some of them can stay afloat for a while longer. And maybe a new strategy will emerge in the meantime.

The News Isn’t Great for Everyone

When a big fish, such as Gannet Co., takes over a smaller press in small-town U.S.A., both sides win. But they also lose. The first thing that typically happens is s the big cutback. Cost slashing, says Gerry Smith for the Chicago Tribune, saves money and buys a little time while everyone involved scrambles to figure out a way to find revenue online.

2015 saw a huge move toward acquisitions, according to Smith, with 70 smaller dailies being sold to Gannet Co., Warren Buffet’s chain and others. All totaled, those deals rang up to about $827 million. And more deals are on their way for 2016 and beyond.

A lot of newspaper workers find themselves looking for work, as the cuts go deep. Digital First Media, a privately-held newspaper owner, cut 20 percent of the staff after combining six newspapers that once covered the Bay Area independently. That leaves about 1 person per town in that region.

Newspapers
Some bigger papers are finding a niche market in small, startup publications.

Some Newspapers are Making Progress

Because revenue has overtaken the news in rankings of importance, newsrooms everywhere continue working to find new and inventive ways to draw in subscribers. What newspapers need is a new business model, says USA Today columnist, Rem Rieder. Digital subscriptions, marketing services and events, he says, are part of that model, even if it’s not perfected just yet.

In an interview with Rieder, David Chavern, Newspaper Association of America CEO, suggested that it’s time to stop thinking about the death of newspapers, since they’re still around despite so many predictions to the contrary. What newspapers need now is to embrace digital and get busy experimenting with digital. “We’ve got a good future. Let’s perk it up a little bit,” Chavern said.

That’s what some of the larger publishers are working on, and Smith says they’re making progress. Niche websites, digital subscribers, sponsored events and newsletters are improving revenue. And so are additional acquisitions of spunky digital startups, such as Spirited Media.

Some of the media giants can afford to play. The New York Times, for example, has more than a million digital subscribers. Jeff Bezos-owned Washington Post has a strong financial backer, obviously, and it’s building up its volume of employees instead of chomping them away. And Smith says that the Globe, which is backed by Boston Red Sox owner John Henry, is comfortable experimenting, even if those experiments fail. That’s what happened with the Catholic Church publication, Crux, which the Globe tried unsuccessfully to get off the ground.

For the rest of the newspaper population, it’s more about finding enough financial stability to stay afloat while they sort out the digital revenue. The smaller papers invariably suffer for it, but combined with their new owners, they can usually stay in the game for another day.

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