Thursday, September 17, 2009

Newspapers in transition: from monopoly to competition

North Carolina Associated Press meeting, January 1988

"Most editors now realize that what distinguishes a good newspaper from its competitors is how clearly it reflects the life of its local community."
I'm going to take the liberty of reminiscing about our trade - about what's happened to the newspaper business during my career and where we find ourselves today.

When I started in 1952, newspapers were astonishingly different from the newspapers we know today.

Television was in its infancy. Radio took only a tiny piece of the market. Except in large cities, the local newspaper company had already become the only newspaper company in most towns. Many had as tight a hold on their markets as the power or phone company did, but - unlike these utilities - the newspaper's rates were not regulated.

Most publishers didn't have to worry much about competition, or whether they were giving readers what they needed or wanted, or whether their ad rates were too high.

Publishers had other things to worry about - for example, how to get enough newsprint so as to not turn away any ads. Newsprint was almost continuously in short supply. How to control the escalating cost of newsprint - usually by cutting page widths. How to get some control over the enormous waste caused by the featherbedding work rules of the craft unions. Since most papers couldn't contain these costs, publishers kept raising their ad rates.

Preoccupation with newsprint and union control of the back shop and the lack of competition affected all the newspaper's departments.

Most ad departments were manned largely by order-takers. They could lay out ads but generally were untrained in salesmanship and modern marketing. Ad directors often played the role of regulators - enforcing the paper's rules that prescribed how an advertiser could use our space.

Circulation departments were concerned mainly with maintaining a carrier force. They didn't have to worry much about sales. When people moved to town, they called the paper. We would run carrier contests several times a year to sweep in the customers who didn't call in their orders.

Type was set by Linotype machines, which by then could set 12 or 15 lines a minute. But the ITU decreed that printers were required to set just over three lines a minute to keep a job.

Papers had to get a union's permission before they could use a new machine. Most mechanical superintendents resisted new technology as vigorously as the unions did.

Newsrooms were populated, as they always have been, by people who were called by the psychic rewards of journalism, not by money. But in those days most papers paid reporters less than printers.

Because they didn't have to worry about circulation, many editors lost touch with their readers. Some moved toward magazine-style reporting and away from what they regarded as "trivia." Others filled the paper with routine reporting on the growing bureaucratic institutions in our communities. Often they found the space for this by cutting out the detailed local information we had published in the past.

I'll never forget how close I came to making one of the worst mistakes of my career.

For years the Norfolk papers had published community editions for nearby cities and suburbs. They were filled with small items of community interest and local ads. Many of our editors thought we should eliminate these editions - to streamline the paper into one product for all. The production department agreed. Making extra pages and plates, and changing the setup for each edition, slowed production.

Had we not stopped and studied before acting, we would have made a terrible mistake.

We found that local readers wanted what editors referred to as trivia. As a result of the study, we not only reversed the trend to generalize papers but repackaged and enlarged our community editions and started new ones for growing suburbs. I think it was a stroke of luck in those days that we asked the right question, "What do our customers want?"

Many editors of the 1950s disdained research. Editing was an art that could only be compromised by learning what readers wanted or what they thought about the paper. And why not? The paper was the only significant source of news in town.

Every department in the paper was a separate empire. Each tolerated the others - usually - but they kept their distance. There was an iron curtain between the newsroom and the business office. The curtain was erected, for good reason, in the days when advertisers tried and sometimes succeeded in influencing news coverage.

Personnel practices throughout the paper were antiquated compared with many other businesses'. There was little recruiting. Most people started as copy boys or apprentices. There was little training, and efforts to develop managers were almost unheard of.

I think that's an accurate picture of the newspaper business I knew in the 1950s.

I remember being impressed by the rhetoric of one of the senior statesmen of the newspaper business in a speech that was widely published in the '50s. He argued that monopoly papers were better papers than they were when they had competitors. They could concentrate on serious journalism now that they no longer had to pander to public tastes.

Today I realize what that publisher really meant. Today I'd translate what he said like this: Now that we are a monopoly, we can give readers what we think they should read, not necessarily what they want to read.

That well-known publisher's paper later was eaten for lunch by suburban papers, shoppers and mailers.

In those days, I was a young, impatient critic of the way we ran the newspaper business. I was most impatient with what I believe were our largest weaknesses - complacency and a deep-seated resistance to change.

We paid a price for those failings. Competition came, slowly at first and then in a rush: competition in the form of television, suburban papers, specialty magazines, thousands of new radio stations, shoppers, mailers and finally cable TV, with multiple channels of entertainment and round-the-clock news, weather and sports.

Many newspapers were slow to recognize the competition. They continued to look inward instead of outward at their customers and their competitors.

What was the price of complacency? There has been a steady decline in the daily readership of newspapers. Throughout the '50s and '60s, more than 80 percent of the population read one or more newspapers on any given day. By 1986, daily newspaper reading had fallen to 61 percent.

When television arrived, we had already priced ourselves almost out of the national advertising market. Later, we nearly did the same thing with local advertising. When chains became the dominant retailers, they began to look for more efficient ways to advertise. They turned to preprints. They could control the printing quality and could distribute them to target audiences. And, for the first time, they could make newspapers compete on price.

Meanwhile, we were pricing advertising out of the reach of small retailers in the burgeoning shopping centers.

Newspaper ad revenues continued to grow, but our share of the advertising market slipped from 30 percent in 1976 to 26 percent in 1986. Without the exceptional growth of classified, our loss of market share would have been more precipitous.

Some well-known big-city papers failed. I believe most of them died from self-inflicted wounds. Some lost touch with their customers. Some did not follow their readers and advertisers to the suburbs. Others could not muster the will to face down the unions on featherbedding and new technology. They were condemned by obsolete plants, bloated costs, non-competitive prices, and not least, by poor management.

Fortunately, most newspapers awoke from their sleep and began to change with the times.

We are producing better newspapers today. Many papers offer fine examples of modern technology, teamwork and professional management. We got better when we ceased to be monopolies, when we had to compete again.

We gathered the courage and skill to take charge of our production process. We broke down wasteful work rules and now are introducing the fifth generation of new technology. Most papers are giving their customers high-fidelity printing quality on offset.

Our ad departments are using sophisticated marketing techniques. We are using research to help customers advertise efficiently. We are distributing preprints where customers want them, at competitive prices. We are zoning to make our newspapers affordable for small advertisers.

Circulation departments have made customer service more reliable. And they have trained computers to keep track of the customers.

The newsrooms have added color, graphics and better packaging to make the papers more attractive and easier to read. We have responded to changes in lifestyles and leisure activities with sections that are edited to appeal to special interests of readers as well as advertisers.

We are making progress in our reporting of business, a subject of fast-growing reader interest. Until lately, most papers either ignored business or reported it with appalling ignorance.

Many newspaper editors have come to accept what researcher Ruth Clark calls the "new social contract."

She said: "The terms of the old contract were clear. Editors decided what readers should know - readers read what editors thought they should know."

"Now readers are more sophisticated, better-educated, less accepting and literally saturated with information. Although they still want newspapers to tell them what is important, they also want a good deal more. They want help in understanding and dealing with an increasingly complex world, news about their neighborhood, not just city government and Washington."

We came to accept this new contract because we learned what readers would do when we bored them. They tune us out as fast as they switch TV channels. Now we have to be creative enough to engage readers every day if we expect them to read us the next day.

Most editors now realize that what distinguishes a good newspaper from its competitors is how clearly it reflects the life of its local community. Not only its politics, crime and bureaucratic events, but also its flavor, what people are talking about, concerned about, how they are spending their time and money.

World and national news has more immediate impact on our readers than ever. The best of our editors recognize that our unique advantage is in relating those distant events to the lives of our local readers.

Most editors now recognize the value of the small items that are vital information to readers. Many even value neighborhood news.

The walls between departments are tumbling down. There is still a clear understanding that business considerations cannot and must not influence news judgments. But we have learned that the news department can join the team without jeopardizing its independence. In fact, we've learned that the only way we can compete is for all departments to function as a team.

The most fundamental change has been change itself. We have learned not only to accept change, but also to seek it.

We have learned to look outward rather than inward - to focus on what our customers need before we consider our own problems. We have learned to say, "We can do it," instead of "We can't do it."

Today, the newspaper business is more exciting and more challenging than it was when I started. We have to be more resourceful and creative. There are plenty of mountains to climb in the years ahead. But it's fun to be in a business that's changing, experimenting and getting better - one that can never again afford to become self-satisfied.

Now let me conclude on a different tack.

Success, regrettably, tends to encourage smugness. Some in our business continue to duck and dodge that cluster of reader concerns called credibility. They say our papers are unfairly tainted by the ambush interviews and shallow theatrics of television. They say public officials are much looser with the truth than are newspapers. This is true, but altogether irrelevant.

We are part of a communications revolution that has made the media more pervasive and more powerful than ever. People fear that power; they would be foolish not to fear it. They resent arrogance, unfairness, and shallow and incompetent reporting. They wish to hold us to the high standards we claim for ourselves and demand in public figures.

The credibility issue does not revolve around bland as opposed to aggressive journalism; it goes instead to honesty, character and competence. Every column of news and opinion we print shows how much we value those traits in the newsrooms.

Readers sometimes see us more clearly than we see ourselves. We would be wise to acknowledge the power we exercise, and to take responsibility for it.

Technology, teamwork, training, better management - all these have brought us a long way; many of the toughest problems are behind us. But winning and holding public trust is something always to be reached for, something never to be held in a firm grasp. Let's keep reaching.

Copyright 1988 Frank Batten

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