In a rather interesting spin on the current situation in the news industry, some of the biggest newspapers in the country are crowing about double-digit circulation losses, including the Dallas Morning News.
It’s not as crazy as it sounds. For the last eight decades or so, the basic business model of a daily newspaper has been to basically give away the print edition and slam advertisers for the majority of both operating revenue and profit. The traditional split has been 80 percent advertising to 20 percent circulation.
As advertisers have fled in the last year, many newspaper executives are re-examining this model. Their conclusion: Since it costs more to print the paper than subscribers are paying, let’s raise prices and get down to our core, core readers – those who care enough about the paper to pay what it actually costs to produce it.
For the Dallas Morning News, one of the best and most venerable papers in the country, this has mean a 22 percent (that’s not a typo) decline in circulation. Heh… that has always seemed a wacky idea to me. I can think of no other industry that responds to declining sales with a price increase. My prediction: When advertising starts to come back (and it will, though not at the levels it once was), there will be new pushes for circulation.
By then, however, it will be too late, and these newspapers will have seriously damaged their relationships with their longterm customers.
What this means for reporters, however, is that the major metros will be pulling in from their traditional coverage territory. As they shed circulation in the outlying geography, the bean counters will be suggesting more newsroom cuts. I am hopeful, though not optimistic, that these slashes in traditional beats will mean more resources for digital operations.