A lot has been said and written about the current challenges facing the newspaper industry. I think it’s important that everyone understands how the industry has changed and what contributed to that.
We, like many other businesses today, are in the “mature phase” of our business life cycle. That means that unless we embrace change through innovation, we will inevitably face the “end” of our business life cycle. Technology has been the biggest “disruptor” that our industry has had to face and it’s safe to say that our industry has been slow to adapt to new technology.
Our business isn’t complicated. We deliver relevant news, information and advertising to our audiences. The key is, what is relevant news and how do we best reach our audiences?
The business model is pretty straight forward. Our main cost is payroll and benefits, followed by newsprint and production costs. There aren’t a lot of discretionary costs in this business. We have to generate enough revenue either through subscriptions or advertising to at least equal those costs.
For the past 10 years or so, paid print subscriptions have been declining for most newspapers. More recently, large national advertisers have been faced with intense competition from e-commerce alternatives and have made significant cuts in their marketing budgets. Several have gone out of business. Those cuts directly impact newspapers.
Payroll and benefits continue to increase, unless you reduce the number of staff. Production costs and newsprint costs continue to increase and most discretionary costs, like utilities and maintenance, also continue to increase. Couple those increases with declining revenue sources and you can see how newspapers have been challenged for the last 10 years.
Most, if not all newspapers have responded by cutting costs and particularly staff, since it’s the largest cost center we have. Despite those cost cutting initiatives, newspaper profit margins have shrunk dramatically and continue to be pressured.
Here at The Press, we’ve combated these pressures in a number of ways, including consolidating job functions where possible, eliminating discretionary expenses, finding more efficient ways to do things using technology and hiring talented people who are capable of multi-tasking effectively.
Our parent company, BH Media LLC, has taken similar steps across the company as well as taking advantage of regional and national synergies when appropriate. For example, we consolidated all accounts payable as well as billing. We also launched our own customer care center in Tulsa, Oklahoma, using our own employees. We’ve also leveraged our size to negotiate better terms with some of our vendors and we’ve consolidated production facilities where it made sense.
Unfortunately, all of that just isn’t enough. We have to do more to not only improve efficiencies throughout the company but also to develop and launch new revenue initiatives. It’s a daunting task in a very competitive space but we’re up for the challenge!
What can you do? We need your help. We need you to stay engaged with us. That means continuing to support us through both print and digital subscriptions, continuing to provide feedback so that we can make improvements to our products, sign up for our various email offerings and most importantly, encourage your friends and neighbors to do these same things.
Together, it is possible to ensure that everyone is kept informed from a credible news source, free from public or private sector interference or influence.
Mark Blum is publisher of The Press of Atlantic City.