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Panic Cost Cutting

The epic stupidity of newspapers

Vol. 4, Issue No. 59 | October 28, 2008 By Denny Hatch
15

IN THE NEWS

The AP Is Breaking More Than News
Any young journalist covering a presidential campaign is likely to have read Timothy Crouse's classic book on the 1972 election, "The Boys on the Bus." In the first chapter, the author describes the pecking order of print journalists. At the top of the food chain are the wire-service reporters, particularly the reporters from the Associated Press, the oldest of news organizations — those hard-bitten, vigilant correspondents who set the agenda for everybody else. "Wire stories are usually bland, dry and overly cautious," Crouse wrote. "There is always an inverse proportion between the number of persons a reporter reaches and the amount he can say. The larger the audience the more inoffensive and inconclusive the article must be." These days, Crouse would be in for a shock. Some of the most eyebrow-raising stories this presidential-election cycle have come from a surprising source: the stodgy old AP. And this new boldness is threatening not only the AP's standing as a neutral arbiter of the news but also challenging its relationship with its owners, thousands of struggling U.S. newspapers that are coming to see the AP as a monster of their own creation: a competitor that could hasten their demise.
—Jay Newton-Small, The Washington Post, Oct. 26, 2008
For some time, I've followed the spate of newspapers planning to fire the Associated Press and getting their news elsewhere, thank you very much. Papers planning to opt out:

Aug. 20, 2008: The Spokesman-Review of Spokane, the Yakima Herald-Republic and The Wenatchee World—all in Washington state—and The Bakersfield Californian.

Aug. 28, 2008: Minneapolis Star Tribune.

Oct. 16, 2008: The Tribune Co. (Chicago Tribune, Los Angeles Times, Fort Lauderdale's Sun Sentinel, the Orlando Sentinel, Red Eye of Chicago, Hartford Courant, the Baltimore Sun, The Morning Call in Allentown, Pa. and the Daily Press of Newport News, Va.).

Yes, newspapers are taking a beating as a result of the lousy economy and, more importantly, advertisers migrating from print to digital. "The decline in [the top 25] newspapers' paid circulation is accelerating, according to new statistics today from the Audit Bureau of Circulations" wrote Nat Ives in AdAge.com this morning. "Papers' average weekday paid circulation fell to 38.2 million copies across the six months ending Sept. 30, down 4.64% from the equivalent period a year earlier. That's a faster fall than was seen this time last year, when the audit bureau reported just a 2.6% decline."

But is it smart for a newspaper (or any business for that matter) to commit hara-kiri—disemboweling itself in the scramble for savings?

A Personal Digression
In 1954, Henry Holt & Co. signed my father, Alden Hatch, to write a biography of Clare Boothe Luce, playwright, former congresswoman, wife of TIME-LIFE publisher, Henry R. Luce, and at the time President Eisenhower's ambassador to Italy. I was invited to skip a semester of college to go along and spend six weeks in Rome during that fall.

At a party given by Mrs. Luce at Villa Taverna, the ambassador's official residence, my father met the AP bureau chief in Rome, Stanley M. Swinton, a hard-driving, hard-drinking, chain-smoking bachelor whose newspaper skills were honed at the Stars & Stripes in Europe during World War II. I remember Swinton as being chunky with a neck like an NFL tackle, black hair, a strong jaw and a wicked glint in his eye. He made it a point to know everybody worth knowing in Italy and delighting them with his rapid-fire repartee; wide-ranging knowledge of history and politics; and endless anecdotes of encounters with the world's rich, famous, powerful and horny.

Takeaway Points to Consider

NOTE: These are takeaway repeats from the April 15, 2008 issue, "Marty Edelston's Idea Factory: Everyone must be part of the quest for revenue."  In my opinion, this management technique is doubly important in these dire financial times.

  • At least 70% of your corporate assets are inside the heads of the people who work there.
  • Everyone in the company should be part of the quest for revenue.
  • Set up a system that encourages employee suggestions and formally discusses and considers them on a regular basis.
  • Reward employees for ideas that are implemented.
  • Call a meeting of your department, and tell everyone to come with up to three ideas that will: (1) generate revenue; (2) save money; or (3) improve productivity.
  • Walk into this meeting with a stash of crisp new bills: ones, fives and tens. Silly ideas get nothing. For every reasonable idea, hand out $1. Reward every good idea with a $5 bill. Great ideas deserve $10.
  • Nobody's going to get rich, just as nobody gets rich playing liar's poker with dollar bills. But it adds a fun dynamic to the creative process.
  • At the end of the meeting, vote on the best idea of the day and award the winner $50. If you go through $200 and don't get back more than $200 in ideas, have patience. You will next time.
  • "When colleagues make suggestions, write down the ideas and have a system in place to implement them."
    —Marty Edelston
  • "I cannot stress this enough: In order to foster a flow of ideas, the atmosphere must be totally free of negativity. People must feel comfortable about saying things right off the top of their heads, since that's where some of the best ideas come from."
    —Marty Edelston
  • When an employee comes up with a seminal idea—and it is implemented department- or company-wide—that positively impacts the bottom line—shell out some big bucks as a thank-you.

Websites Related to Today's Edition

"The AP Is Breaking More Than News"
http://tinyurl.com/6mv387

"Some Papers in Financial Trouble Are Leaving the AP to Cut Costs"
http://tinyurl.com/5vphvw

"AP Suspends Pricing Plan, to Review its Structure"
http://tinyurl.com/6du79c

Associated Press
www.ap.org/

Reuters
www.Reuters.com

Agence France-Presse
http://www.afp.com

HuffingtonPost.com Worth $200 Million
http://tinyurl.com/3batax

Magazines Share Recessionary Tactics.
http://www.foliomag.com/2008/publishers-selling-beyond-page-combat-downturn

"Top 30 Most Popular News Outlets on the Web for September" [2008]
http://tinyurl.com/5hyclt

"Marty Edelston's Idea Factory: Everyone must be part of the quest for revenue"
http://www.targetmarketingmag.com/story/story.bsp?sid=95595&var=story

Newspaper circulation decline for Sept. 2008
http://tinyurl.com/5kwd25


 

Companies Mentioned:
15

COMMENTS

Click here to leave a comment...
Comment *
Most Recent Comments:
Scott - Posted on November 06, 2008
Bill - Posted on October 29, 2008
Maybe the newspapers making the cut considered the quality of the product? It's amusing to me that this concept was never treated in this article. I guess the lack of good old honest reporting casts a wide enough shadow to cover you too, Denny. I, personally, can not bring to recollection the time an AP story enlightened, informed, or engaged me.
John Walters - Posted on October 29, 2008
Just a couple of points, Denny. Firstly, did these newspapers run surveys amongst their readership to find out if the readers wanted a degraded news service? My guess is that they didn't. Secondly, in response to Chris Altwegg's comment. You can't get informed news comment by pointing a video camera or reading press handouts. It takes many years of experience to know what is what and who is who and perhaps most importantly, who is lying. I can only hope that enough real reporters will be still around when 'news'papers eventually realize that their market depends on quality news reportage. Constantly dumbing down is plain dumb.
Barrie Bedell - Posted on October 28, 2008
Advertisers are abandoning newspapers in droves; some concentrating on other media, others going out of business, still more cutting back because their ads don't pull. Check any newspaper searching for ads that SELL and you'll find precious few, if any. Newspapers are perhaps the only major businesses that are largely clueless about how to help their customers (advertisers and primary revenue source) effectively utilize their product.
Barrie Bedell
barriebedell@earthlink.net
Patricia - Posted on October 28, 2008
Hi Denny, Thanks for a great and informative article. This past Spring I finally canceled my 15 yr subscription to the Newark Star-Ledger. The paper had gotten thin, and local coverage, once robust, had dwindled to almost nothing. The quality of AP stories had clearly declined too. Something your article made me think of is that maybe the AP itself should innovate more, perhaps use new technology--take advantage of online tools--how about an AP Twitter? Or a newspaper "DailyLit" or Flickr personna? How about changing up the distribution model for newspapers? Sounds like the AP-Newspaper relationship was designed for and worked well in the 20th century, but needs some retooling for the 21st.

NOTE FROM DENNY HATCH. From Anick Jesdanun, AP Business Writer, October 24, 2008:
NEW YORK (AP) - The Star-Ledger of Newark, N.J., will reduce its newsroom staff by nearly half through voluntary buyouts as New Jersey's largest newspaper seeks to return to profitability.
Jim Willse, the Star-Ledger's editor, said Friday that the newspaper accepted 151 buyout offers from its news staff, or about 45 percent of its 334 editorial employees. He said 17 buyout applications were rejected.
Some staffers already have left, and others are leaving by year's end, many after the elections.
"We've got from now to the end of the year to figure out what adjustments we have to make," Willse said. "We will be able to produce an abundance of good stories. We will still have a good paper but we have to figure out exactly how to accomplish that."
Jack Outhier - Posted on October 28, 2008
Denny, you are working from the assumption that newspapers are about news, which I would argue is no longer the case. Newspapers are about advertising revenue, and subscribers are only a justification for the rates charged advertisers. To generate sales/subscriptions they focus not on information, but sensationalism because it sells better than truth. Politically, economically, culturally, and virtually every other way, they have ceased being news organisms and have become propaganda machines advancing their own agendas to the gullible masses. Lying journalists are not disgraced any longer, the ethics of the profession have been abandoned and I don't trust most editors as far as I could throw them. So, maybe they are cutting their own throats business-wise. I don't care any longer as they have made themselves irrelevant to me.
Paul B - Posted on October 28, 2008
Well said, Denny! There are so many theories and explanations for the decline of newspapers, but what you've said seems to underline all of them. BTW, I just read on Romenesko's site
http://tinyurl.com/5uj7ez
that the Christian Science Monitor will be online only starting In April.
Denny McGregor - Posted on October 28, 2008
Dear Denny, Great name! Love your column. Having said that, in addition to newspapers looking at costs--and I agree that AP probably saves most papers more than it costs--the 2008 Presidential election has been illuminating--at least where AP has been involved. I try to stay informed and so listen and read a lot and so have heard many stories reported as having been sourced by AP where they were trying to create news and not report it. Since, as you say, it is their job to get the stories (and not make them) I can hardly get upset when newspapers, which let's face it, print most of their stories from information a few days old, regardless of source. If AP were to get back to its roots, maybe I would feel different.
bilou - Posted on October 28, 2008
Some companies are already doing these things.

At the Apple store, I was 5th in line when a woman with a hand swiper came out and said, "I can take the next person paying with a credit card." I moved to the front of that line!

After I paid, she asked, "Would you like to help save a tree and receive your receipt by e-mail?"

You're right, Denny...it wouldn't take much for newspapers to give a little incentive and collect a LOT of data - like e-mail addresses - on their customers.

It would only take them shifting their mindset into the 21st century.

Too many people - especially in managment - already know the "right" way to do things, unfortunately...and are willing to go down with that ship, no matter how many people they take with them.
Max Bendel - Posted on October 28, 2008
Maybe the AP isn't what it used to be. I find myself wanting when reading many AP stories. The details are missing. It seems too many of the articles forget the who, what, when, where and why criteria necessary for a good news story. Perhaps the newspapers in question have been reading the same articles I have.
Chris Altwegg - Posted on October 28, 2008
Nice write-up. I wonder, though, if it doesn't make sense to drop the AP in favor of local reporters. With multiple 24/7 cable news networks, the Internet, and other "instant" news outlets, can a newspaper, with it's once-a-day publishing really compete for national/international news coverage? But it's highly unlikely that CNN or Huffington Post is going to cover the local stories that also matter to newspaper readers. I hope they don't put all their local reporters on police blotter reportage, but rather spend some time doing the kind of local in-depth reporting that takes days to assemble, edit and put out.
Brian - Posted on October 28, 2008
Stan - Posted on October 28, 2008
Denny, you've written wonderful copy for AP. Hope they use it. And, you've offered newspapers great marketing ideas. All for free! Exemplary stuff. Thanks again!
Bob Whitworth - Posted on October 28, 2008
Hi Denny! RE: "Any business that cheapens the product or diminishes its service to customers in order to preserve jobs is like a big bird flying in ever-decreasing circles until it disappears up its own cloaca." So, these newly minted media bites, cobbled from a sub-standard mixture of 3rd party news writing, shall be henceforth known as "Cloaca Puffs", the breakfast cereal of the newspaper media.
Judy Smath - Posted on October 28, 2008
Ummm.... due to the weak economy and having to make cut backs in my spending, I recently canceled my subscription to the New York Times.

NOTE FROM DENNY HATCH. You are not alone. From The New York Observer last Friday:

This morning David Westin, president of ABC News, sent out an e-mail to staffers warning that ABC News is not "immune from the downturn," and that the division (along with the rest of Disney's Media Networks Group) will be implementing new "guidelines" to "reduce administrative costs." As part of the cost-cutting measures, ABC News will be canceling all of its magazine and newspaper subscriptions, will not be throwing any holiday parties, and will be scaling back on travel accommodations for executives.
Click here to view archived comments...
Archived Comments:
Scott - Posted on November 06, 2008
Bill - Posted on October 29, 2008
Maybe the newspapers making the cut considered the quality of the product? It's amusing to me that this concept was never treated in this article. I guess the lack of good old honest reporting casts a wide enough shadow to cover you too, Denny. I, personally, can not bring to recollection the time an AP story enlightened, informed, or engaged me.
John Walters - Posted on October 29, 2008
Just a couple of points, Denny. Firstly, did these newspapers run surveys amongst their readership to find out if the readers wanted a degraded news service? My guess is that they didn't. Secondly, in response to Chris Altwegg's comment. You can't get informed news comment by pointing a video camera or reading press handouts. It takes many years of experience to know what is what and who is who and perhaps most importantly, who is lying. I can only hope that enough real reporters will be still around when 'news'papers eventually realize that their market depends on quality news reportage. Constantly dumbing down is plain dumb.
Barrie Bedell - Posted on October 28, 2008
Advertisers are abandoning newspapers in droves; some concentrating on other media, others going out of business, still more cutting back because their ads don't pull. Check any newspaper searching for ads that SELL and you'll find precious few, if any. Newspapers are perhaps the only major businesses that are largely clueless about how to help their customers (advertisers and primary revenue source) effectively utilize their product.
Barrie Bedell
barriebedell@earthlink.net
Patricia - Posted on October 28, 2008
Hi Denny, Thanks for a great and informative article. This past Spring I finally canceled my 15 yr subscription to the Newark Star-Ledger. The paper had gotten thin, and local coverage, once robust, had dwindled to almost nothing. The quality of AP stories had clearly declined too. Something your article made me think of is that maybe the AP itself should innovate more, perhaps use new technology--take advantage of online tools--how about an AP Twitter? Or a newspaper "DailyLit" or Flickr personna? How about changing up the distribution model for newspapers? Sounds like the AP-Newspaper relationship was designed for and worked well in the 20th century, but needs some retooling for the 21st.

NOTE FROM DENNY HATCH. From Anick Jesdanun, AP Business Writer, October 24, 2008:
NEW YORK (AP) - The Star-Ledger of Newark, N.J., will reduce its newsroom staff by nearly half through voluntary buyouts as New Jersey's largest newspaper seeks to return to profitability.
Jim Willse, the Star-Ledger's editor, said Friday that the newspaper accepted 151 buyout offers from its news staff, or about 45 percent of its 334 editorial employees. He said 17 buyout applications were rejected.
Some staffers already have left, and others are leaving by year's end, many after the elections.
"We've got from now to the end of the year to figure out what adjustments we have to make," Willse said. "We will be able to produce an abundance of good stories. We will still have a good paper but we have to figure out exactly how to accomplish that."
Jack Outhier - Posted on October 28, 2008
Denny, you are working from the assumption that newspapers are about news, which I would argue is no longer the case. Newspapers are about advertising revenue, and subscribers are only a justification for the rates charged advertisers. To generate sales/subscriptions they focus not on information, but sensationalism because it sells better than truth. Politically, economically, culturally, and virtually every other way, they have ceased being news organisms and have become propaganda machines advancing their own agendas to the gullible masses. Lying journalists are not disgraced any longer, the ethics of the profession have been abandoned and I don't trust most editors as far as I could throw them. So, maybe they are cutting their own throats business-wise. I don't care any longer as they have made themselves irrelevant to me.
Paul B - Posted on October 28, 2008
Well said, Denny! There are so many theories and explanations for the decline of newspapers, but what you've said seems to underline all of them. BTW, I just read on Romenesko's site
http://tinyurl.com/5uj7ez
that the Christian Science Monitor will be online only starting In April.
Denny McGregor - Posted on October 28, 2008
Dear Denny, Great name! Love your column. Having said that, in addition to newspapers looking at costs--and I agree that AP probably saves most papers more than it costs--the 2008 Presidential election has been illuminating--at least where AP has been involved. I try to stay informed and so listen and read a lot and so have heard many stories reported as having been sourced by AP where they were trying to create news and not report it. Since, as you say, it is their job to get the stories (and not make them) I can hardly get upset when newspapers, which let's face it, print most of their stories from information a few days old, regardless of source. If AP were to get back to its roots, maybe I would feel different.
bilou - Posted on October 28, 2008
Some companies are already doing these things.

At the Apple store, I was 5th in line when a woman with a hand swiper came out and said, "I can take the next person paying with a credit card." I moved to the front of that line!

After I paid, she asked, "Would you like to help save a tree and receive your receipt by e-mail?"

You're right, Denny...it wouldn't take much for newspapers to give a little incentive and collect a LOT of data - like e-mail addresses - on their customers.

It would only take them shifting their mindset into the 21st century.

Too many people - especially in managment - already know the "right" way to do things, unfortunately...and are willing to go down with that ship, no matter how many people they take with them.
Max Bendel - Posted on October 28, 2008
Maybe the AP isn't what it used to be. I find myself wanting when reading many AP stories. The details are missing. It seems too many of the articles forget the who, what, when, where and why criteria necessary for a good news story. Perhaps the newspapers in question have been reading the same articles I have.
Chris Altwegg - Posted on October 28, 2008
Nice write-up. I wonder, though, if it doesn't make sense to drop the AP in favor of local reporters. With multiple 24/7 cable news networks, the Internet, and other "instant" news outlets, can a newspaper, with it's once-a-day publishing really compete for national/international news coverage? But it's highly unlikely that CNN or Huffington Post is going to cover the local stories that also matter to newspaper readers. I hope they don't put all their local reporters on police blotter reportage, but rather spend some time doing the kind of local in-depth reporting that takes days to assemble, edit and put out.
Brian - Posted on October 28, 2008
Stan - Posted on October 28, 2008
Denny, you've written wonderful copy for AP. Hope they use it. And, you've offered newspapers great marketing ideas. All for free! Exemplary stuff. Thanks again!
Bob Whitworth - Posted on October 28, 2008
Hi Denny! RE: "Any business that cheapens the product or diminishes its service to customers in order to preserve jobs is like a big bird flying in ever-decreasing circles until it disappears up its own cloaca." So, these newly minted media bites, cobbled from a sub-standard mixture of 3rd party news writing, shall be henceforth known as "Cloaca Puffs", the breakfast cereal of the newspaper media.
Judy Smath - Posted on October 28, 2008
Ummm.... due to the weak economy and having to make cut backs in my spending, I recently canceled my subscription to the New York Times.

NOTE FROM DENNY HATCH. You are not alone. From The New York Observer last Friday:

This morning David Westin, president of ABC News, sent out an e-mail to staffers warning that ABC News is not "immune from the downturn," and that the division (along with the rest of Disney's Media Networks Group) will be implementing new "guidelines" to "reduce administrative costs." As part of the cost-cutting measures, ABC News will be canceling all of its magazine and newspaper subscriptions, will not be throwing any holiday parties, and will be scaling back on travel accommodations for executives.