BOTTOM LINE COMMUNICATIONS
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Minneapolis Star Tribune Average age of newspaper readers: 55
Newspaper readership is down. Fewer young people are picking them up, and the average age of a newspaper reader is now 55, according to a Carnegie Corporation study. Many papers have been losing circulation at alarming rates across all age groups. Newspaper profits and the stock prices of the companies that own them were also down during the first half of 2005. The biggest newspapers are cutting staffs, closing foreign bureaus and taking other steps to meet their owners' profit goals. Most of these dire trends are nothing new. Deep thinkers have prophesied for years that newspapers are on a glide path to irrelevance or extinction. Since the advent of the Internet, a common version of the doom forecasts has the ink-on-paper news being supplanted by something not-quite-yet-describable on the Web. Aside from cutting budgets, U.S. newspapers -- including the Twin Cities' two big dailies -- are strategizing to improve the outlook. Wednesday, the Star Tribune rolls out its new design, with changes far beyond its appearance, including a twice-weekly section of international news. The goal, according to Editor Anders Gyllenhaal, is not so much to turn non-subscribers into subscribers but to entice every category of reader to read more. Readership On an average weekday, about 55 million newspapers are sold nationally, down from 63 million in 1985, according to Editor and Publisher magazine. The decline could be called gradual. But it looks worse if you take into account the failure of newspaper circulation to keep up with population growth. Total daily newspaper circulation as a percentage of all U.S. households ("penetration") has been falling sharply since its all-time high of 123 percent in 1950 to its current 51 percent. (Penetration was more than 100 percent of households in the 1950s because most major cities had several competing dailies, and many households subscribed to two or more.) Many factors contributed to this decline. Most U.S. cities now have only one newspaper. From 1950 forward, TV was the explosive new medium luring young readers from newspapers. Since 2000, the Star Tribune's Sunday circulation declined from 673,528 to 671,273 in 2004. That's a drop of 0.3 percent. Over the same period, the Sunday circulation of the St. Paul Pioneer Press dropped from 262,144 to 253,368, a decline of 3.3 percent. Some experts say that, starting with the baby boomers, generations raised on television haven't developed the attention span necessary to enjoy newspaper reading. For John Morton of Morton Research Inc., a Silver Spring, Md.-based consultant and media industry analyst, the problem boils down to this: "Newspaper readers have been dying off faster than they are being replaced with new ones." Positive news So is there positive news in these gloomy trends? In many markets, including the Twin Cities, the Star Tribune's readership is larger than the audience for any TV news program or an average episode of a highly rated sitcom. Except during recessions, the advertising revenues of newspapers have continued climbing long after newspaper penetration started declining and even since the absolute number of readers started heading south. In fact, the long, slow decline of newspaper readership has coincided with a long, steady climb in their profitability. In 2004, the average after-tax profit margin of the newspaper divisions of the major media companies that Morton follows was 20.5 percent. That is more than double the average profit margin of the Fortune 500. McClatchy Newspapers, which owns the Star Tribune, had a profit margin of 23.1 percent, according to Morton; Knight Ridder newspapers, including the Pioneer Press, had a profit margin of 19.4 percent. One reason for the shrinking newspaper audience is competition from such media as TV, radio and the Internet. Compared to the electronic media, newspapers have held up fairly well, said Mark Fitzgerald of Editor and Publisher magazine. The audience for network news on TV has dropped faster than for newspapers, he said, and radio news has almost disappeared. Prof. Geneva Overholser of the University of Missouri, a former reporter and editor and now a commentator on the journalism scene, predicts that newspapers will survive but that "most news is going to be online, and the newspaper will survive as an auxiliary to that." According to the Pew Center for the People and the Press, many get their news from the websites operated by newspapers. Many newspapers say that if you count their total readership -- print and online combined -- there is no decline. Web advertising The next task, says Morton, is developing a model for making as much advertising revenue on their websites as newspapers have made from print ads. Both Twin Cities dailies operate websites. According to the Media Audit, 31 percent of Internet users in the Twin Cities logged on to StarTribune.com at least monthly in early 2005. The comparable figure for the Pioneer Press website, twincities.com, was 13 percent. During the first eight months of 2004, the average price of the stock of the 14 big newspaper chains that Morton follows declined by 11.6 percent, he said, while the New York Stock Exchange Composite Index rose by 3.4 percent. But in fact, even as measured by their stock prices, newspaper conglomerates have been attractive investments. Taking a longer view, Morton said the newspaper index has risen by 17.3 percent since Jan. 1, 2001, more than double the 7.9 percent increase of the NYSE index. Newspapers are trying to cope with declining readership. The Chicago papers have started separate youth-oriented publications in hopes that young readers will eventually switch to the mother papers. Others are publishing separate Spanish editions. Even the staid Wall Street Journal has jazzed up its appearance and just launched a new weekend edition, with increased lifestyle coverage. In St. Paul, the approach adopted last year included a redesign and the creation of five zoned editions that enable the paper to zoom in on the "local local" angles, such as coverage of school boards, local elections and prep sports. The Star Tribune's effort to deal with these issues will include a top to bottom change in typography, story summaries, a deeper embrace of innovative storytelling devices and a "One-minute Strib" summarizing the day's paper. Gyllenhaal said newspapers can't "save their way to success" but have to invest in changes and improvements. But he said more than three-fourths of Twin Cities households already get the paper or visit the website at least once over several weeks. The goal of the redesign is to make it easier for readers to navigate the paper, get them to read it more often and for more minutes when they do.
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