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Print dies a little more as Postmedia announces cuts

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The decline of print seems to be picking up speed. Just days after U.S. media conglomerate Advance Publications introduced production cuts and layoffs at the New Orleans Times-Picayune and several of its Alabama newspapers, Canada’s Postmedia chain announced on Monday that it is cutting production at several of its largest urban newspapers. The company, which emerged from bankruptcy protection in 2010 under new management, is looking to lay off dozens of staff and is also erecting paywalls at several of its papers. But the question for Postmedia and its fellow newspaper operators is: Will these cuts stem the bleeding or simply cause the decline of print to accelerate?

Postmedia, which owns daily newspapers in most of Canada’s major cities — including Vancouver, British Columbia; Calgary and Edmonton in Alberta; Saskatoon and Regina in Saskatchewan; Toronto and Ottawa in Ontario and Montreal, Quebec — said that the newspapers it publishes in Ottawa, Calgary and Edmonton will no longer print a Sunday edition. The National Post, the chain’s national newspaper, will also stop publishing on Monday during the summer (something Postmedia has done for the past several years in order to save on printing costs). The company added that it is accelerating its plans to install paywalls at many of its papers, after experimenting with one in Montreal.

Postmedia plays the Murdoch card and blames Google

The chain, which is publicly traded in Canada, is controlled by a number of investment groups including U.S.-based Golden Tree Asset Management, which acquired the assets of the former Canwest Media for $1 billion in 2010 and refinanced the company. Although the new owners instituted a number of cost-cutting measures — including rounds of layoffs at many of their newspapers — the company lost $13 million last year on revenues of just over $1 billion, and continues to carry a debt load of about $500 million.

In a memo to employees, the company said that it needed to make the cuts to production and other moves (including the centralizing of copy-editing functions in Hamilton, Ontario) in order to “leverage its history and move aggressively into the future.” But the company also blamed some of the decline in advertising revenue on what it called “foreign-owned and controlled digital companies who, without any regulation, are accessing Canadian audiences and eroding Canadian media revenues.” In an interview with the Globe and Mail, CEO Paul Godfrey named Google and AOL as two companies that have are to blame for the decline, and said they should be regulated by the government:


Late last week, Advance Publications said it was cutting print publication of the New Orleans Times-Picayune to just three days a week in order to save money, and was also laying off a substantial number of employees at the paper — something that drew criticism from a number of quarters, including New York Times media writer David Carr. Advance has also cut printing to three days a week at several of the newspapers it owns in Alabama, and another paper it owns in Ann Arbor, Michigan made the move to non-daily publication in 2009 and now is only printed on Thursdays and Sundays.

Print is dying the death of a thousand cuts

Cuts to daily newspapers, particularly smaller ones in regional markets, have also come recently to British newspapers: Johnston Press, which owns 170 titles in Britain, shifted several of its daily newspapers to weekly publication only. And other newspapers such as the Detroit Free Press and the Detroit News have continued to print daily but have stopped delivering to home subscribers every day, encouraging them to go online for their news.

From the sounds of it, the changes at Postmedia are not likely to be the last: Godfrey said in his interview with the Globe and Mail (which publishes a competing national newspaper in Canada) that he is “seriously considering” whether to stop publishing the National Post at all on Monday. The Postmedia CEO also said that the money saved by cutting printing — and by cutting more than 20 staffers from the newsrooms at several of the chain’s newspapers, including those in Ottawa, Calgary and Edmonton — would be reinvested in digital. Advance Publications made a similar promise about the Times-Picayune.

As media-industry economist Ken Doctor noted in a post about the Advance news, the shutting down of print is part of an industry-wide “forced march” towards digital, driven by the dramatic dropoff in print advertising — a gap that is not being filled either by online advertising or paywalls. Even the New York Times subscription model, which is one of the most successful in the industry, is not producing enough revenue to make up for that ongoing revenue decline. Which raises the question: If the cuts and layoffs and paywalls at newspapers like the Times-Picayune and Postmedia aren’t enough to stem the losses, what happens then?

Post and thumbnail images courtesy of Flickr users George Kelly

14 Responses to “Print dies a little more as Postmedia announces cuts”

  1. Fake DarrinSearancke

    As many media/business analysts have been saying for years, Newspapers need to completely re-think their business model and transition into News Providers – across multiple channels; web, video and social media. No surprise this is where Postmedia is headed.

  2. Gordon Borrell

    Newspapers are going through the same transition that radio experienced in the 1950s and early 1960s. Like the commenters here, everybody thought radio and cinema were dead because people were watching TV at night. We are indeed seeing deep cuts in the industry, but that merely keeps newspapers’ bottom line attractive. I doubt Warren Buffett would have snapped up the Omaha World Herald, The Richmond Times-Dispatch, the Winston-Salem Journal and other newspapers recently had he thought they would die. Those who embrace the new medium of the day typically predict (with glee) the death of the old medium. It never happens.

    • Stephen

      I agree. Mr. Ingram also seems to be innumerate too. The NYT has grown revenue the last 3 quarters yoy…all due to the paywall. Mr. Ingram, if he knew how to read an income statement, would have noted this ages ago. That individual paper is now a growing enterprise. The irony for techies like Mr. Ingram is that it was losses at the all-digital that drove most of the company-wide revenue decline. The paywall has been a smash success. As subscriptions keep rolling in at the rate of 40k new subscribers a month, Mr. Ingram wont recant, he will just quietly slink away.

      • Dilip Andrade

        In his defense, as someone who has been reading his work for far longer than his online career, I would suggest that Mathew Ingram has very little problem in reading income statements (he’s an old finance journo).

        The NYT is an exception to many of the rules that apply to other parts of the print universe. We cannot take lessons from the New York Times, the FT, or even the WSJ and apply them to the rest of the print world.

        Buffet’s bet on smaller market players is that they can be profitable because they serve a niche, and getting reporters into those markets is the real cost of generating local content, and distribution of advertising is profitable but harder to penetrate in this particular market segment. He has time with those papers to continue making money on print as the experiments go forward on how the transition to digital is best pursued.

        Big markets are in trouble because of the incredible availability of reporting. True destination sites, like the NYT, WSJ and FT, will have enough traffic to make money through the paywall. They are the icing on the cake that will always be valued. The problems lie on that level just below.

        Good reporting is important, but consumers have never had to pay for it (even when we subscribed to papers, we were really just paying for the delivery of the news, the advertisement paid for the news). The Internet has made us more resistant to paying for content because we don’t feel that we have purchased anything (at some level having newsprint in hand and ink on fingers is more satisfying than electrons and photons on my display). There will continue to be a shakeout as experiments are undertaken. Paywalls won’t solve everyone’s problems.

  3. Delicify

    Yet another insightful article, thanks Mathew. Although we always seem to forget that print is much more than a primary communication medium for daily news. Rather than dying all together, I think print will become a niche product, a way to transform high quality, personalized digital content into a tangible form. If I may, I reccomend this article from The Economist’s LeanBack 2.0 blog: which gives a slightly different take on the future of print.

  4. Good post. It’s sad how times change, especially when people and jobs are involved. technology is here, things move and change fast. The best thing companies and newspapers can do is be ahead of the game and adapt and change, or, sadly, go under if not.

  5. Seo Media

    lol Google needs regulating coz print can’t survive the internet, lol. Print died 2009. Stop moaning. New jobs are being created movement to moment in online journalism, the same cannot be said for print. We don’t need Print anymore. Save the trees.

  6. Three years ago Marc Andreessen said that to be ready for the future newspapers must immediately shut down their print operations. But few if any listened.

  7. Joe A

    Such nonsense, pretending that someone who beat you to the digital punch, is to blame for your inability to understand the technology of your own market. You would think that the major players in the market would know every conceivable way in which the market could bend. This is a popular refrain that is being sung by multiple industries and markets.

  8. Reblogged this on thesoapboxxradio and commented:
    These days and times call for more technology, but kills the print. Great and terrible at the same time. Great because of the accessibility of information yet terrible because we are cutting out the art of print, and taking away from those companies that have contributed so much to the news realm.

    What are your thoughts?