Mainstream Media Meltdown

The print media meltdown is happening so rapidly that I'm having trouble posting fast enough to keep up.  Gannett stock hit another ten year low today.  The stock is 30% below where it was trading on this date in 1997.  The chart below tracks the Dow and compares it to Gannett stock over the last 5 years.  As you can see, Gannett is down 50% and the DOW is up 50%.

Meanwhile, the Tribune's subscription numbers have collapsed in the wake of management's decision to start giving the paper away. 

The East Valley Tribune's drop was even more severe. Sunday circulation dropped 11.4 percent to 70,025, down from 79,066; weekday circulation dropped 16.8 percent to 82,951, down from 99,711; while Saturday circulation decreased 13.8 percent to 78,725 from 91,381, compared to six months ago.

Frankly, it's hard to see how the Tribune survives for another year.  It has a mainstream media cost structure and New Times distribution structure.  Subscription totals will continue to plummet as individual subscriptions expire.

The transition to a free paper will serve as a double whammy.  Advertising rates are built on a multiple of paid subscriptions.  As the subscription number falls, the advertising rate collapses exponentially.  Additionally, advertisers don't value a free newspaper as much as they do a traditional subscription paper, so the overall multiple will fall even faster. 

The Tribune, with a free daily distribution of some 70,000 units, is now the functional equivalent of the State Press.   But the State Press, of course, is written by Journalism Students who are hoping to leverage their experience into a $9 an hour internship with the Republic.   My guess is that the Tribune doesn't enjoy a similar cost structure. 

This is no temporary setback; the Tribune no longer has a viable business model.   

Comments

[Todd E.]

Although I don't know the numbers, I would guess the same deterioration has to be happening, to some extent, to local TV news viewership also.

And I say good riddance!

[Le Templar]

I hope readers will take note of this story that appeared Wednesday in the Tribune that points out the serious errors made in last week's Business Journal story: http://www.eastvalleytribune.com/story/102465

I also need to note that Greg continues to print an significant error in his discussion of the Tribune business model. We are adding free single-copy placement and free home delivery of our new local news section to our portfolio of products in some areas. But the Tribune is NOT replacing all paid subscriptions with free newspapers. If you pay for the full newspaper today, you will have to pay to receive the full newspaper tomorrow. (The free versions do not include sports, the nation/world section or other sections we include throughout the week.)

Management did make the hard decision to stop subscription delivery in some outlying areas as a move to better match delivery costs with subscription revenue. But our total number of paid subscriptions has remained remarkably steady despite all of the recent changes.
Greg's statement that the Tribune has basically become the State Press with 70,000 papers is simply hogwash.