In New Orleans, profit trumps readers

I appreciate the efforts of readers of the Times-Picayune to keep the New Orleans newspaper published seven days a week. Unfortunately, they will be unsuccessful.

Here is a simple, boiled down reason: Readers value the public service the newspaper produces. Owners value the profit the newspaper produces. Profit trumps readers every time. The owners may appreciate the public service journalism the paper may produce, but it isn’t what they value the most. And the voice of readers isn’t as nearly as loud as the demands of a profit culture. If a business isn’t making the amount of money that its shareholders wish, expect new revenue sources, expense cuts or firings or all three. It’s not evil. It’s not wrong. It’s the way capitalism works. I suspect that inside the corporate offices the powers that be have asked, “where were all these ‘readers’ a few months ago?” If the newspaper’s market penetration were 50% or higher, my guess is that newspapers would be delivered every day. (Note disagreement in the comments below.)

The market has gone elsewhere and newspapers don’t have the will or the desire or the ability to go with it. (And there is this.) (And this.)

Every city deserves a good newspaper. Every city needs an organized group of journalists demanding civic accountability and rooting out malfeasance. New Orleans isn’t alone in that. (John McQuaid describes it well here.)

The end result? The loss of the daily journalism the newspaper produces. (The paper says that it will continue to publish 24/7 online. We’ll see. The paper has laid off an awful lot of journalists.)

I wonder if a family owned newspaper — one in which the family member lives in the community and runs into readers at church and the grocery store and Rotary — would accept a lower profit margin to serve his or her community. When corporate offices are located elsewhere, well, the impact of the loss of a daily institution like a newspaper isn’t felt.

Looking on the bright side, this is an opportunity for the people of New Orleans to replace the newspaper’s journalism with a new journalistic structure. New Orleans is a bright, creative, fun and crazy city. If any community can do it, it’s New Orleans.

11 thoughts on “In New Orleans, profit trumps readers

  1. You ask whether a family ownership would be willing to accept a lower profit margin. What profits?

    • The huge profits that many newspaper companies are, in fact, making. Don’t be fooled — these companies may be drowning in debt due to their own bad decisions, but in many cases, the local newspapers they’re pillaging are extremely profitable, running at margins that people in most other businesses would kill for.

    • The Times-Picayune made an estimated $8 million-$10 million profit in 2011, or about an 8% margin. That’s a lot healthier than most businesses have seen during the Great Recession.

  2. The Times-Picayune’s penetration rate is well above 50% and the newspaper is profitable. So what’s Newhouse’s excuse? Never mind, I’ve heard it somewhere before: greed is good.

  3. As I understand the published reports (Advance, being a private company, does not break out these figures themselves), the T-P has significantly ABOVE a 50% print penetration rate in New Orleans, and remains profitable as a 7-day-a-week print publication.

  4. New Orleans Magazine, July, 2012, p. 19: “To be born rich as part of a publishing dynasty and to live on the east coast, a person, one suspects, could become detached. To them, Southerners might be people to be tolerated — as long as you can make money off them — who can sing, dance and fry chicken but who don’t grasp the intricacies of big business.”

    I describe what is happening at the Times-Picayune as premeditated murder, and we are being obliged to watch it take place. One gets the impression that these newspaper moguls regard people in New Orleans as computer illiterate, brain-damaged banjo-pickers.

  5. Norman Newhouse, one of the original Newhouse brothers, spent 21 years in New Orleans and raised a family there. I find the takeaway lessons of the New Orleans situation to be muddy and many-layered, contrary to the good vs. evil showdown that’s being depicted.

  6. Norman Newhouse may well have spent 21 years here, and he may well have raised his family here, but as I understand it, Norman Newhouse is no longer in charge. And while he spent those 21 years here, and raised that family here, he was respected and appreciated and even loved. It is not Norman with whom we have a beef. It is his Newhouse successors – Newhouses who have no ties to New Orleans; who have not spent 21 years here, or even one; who have not raised families here; and who have no emotional ties here at all – it is they with whom we have a beef, and rightly so. Sure, there are people here who do not subscribe to the paper. But the numbers I’ve read indicate that we have one of the highest penetrations in the entire country, and not only have these Newhouses enjoyed a profit from our paper – that profit has been considerable. (Personally, I’ll take an $8 million profit and run with it any day.) So yes, for those of us who do live here, and who raise our families here, it really does come down to a matter of simple corporate greed, or to put it another way, good vs. evil.

  7. Good post John. For all the hand-wringing about the loss of investigative journalism, I worry far more about the loss of local journalism. I started at a small newspaper in Hays Kansas serving thousands of square miles in the northwest corner of the state, and in the interest of disclosure as much as anything, I worked for one of the Newhouse regional websites, MLive, for a year back in the 1990s. I still love local journalism, although I haven’t practiced it for a long, long time.

    Here in Britain, where I live now, the local and regional press is getting hammered. Johnston Press is moving several dailies to weeklies. One publisher just shut down several of their local offices, and I believe that their staff will now work from home.

    I’m a digital guy through and through. I have been since 1996, but I know now that the urgent challenge is that we need to create a business model that will support something even approaching the newsgathering scale that newspapers once supported.

    Local TV won’t do it, although it could, but with the de-regulation in the 1980s, the companies that own most local TV stations in the US are saddled with debt. They have been cutting costs for three decades, and when I worked for a local TV station in the mid-90s, the news meeting consisted mostly of the news director literally handing out clips from the local newspaper to reporters. No, that isn’t a joke.

    The big question remains. What business and editorial model(s), if any, supports newsgathering at a scale necessary to serve a local community? That question is going to be different for different communities, but it’s an urgent question that needs answering. I guess you start from the bottom up. What are the information needs of a local community? How do you serve those needs? How do you create a sustainable business to support meeting those needs?

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