Syndicate Companies Take a Hard Look at Their Revenue Models
Posted: 7/28/2011 | By: Rob Tornoe
The business of newspaper syndication began in the 19th century when many newspapers, especially in smaller cities and towns, found it difficult to maintain a large enough staff to report on anything other than local news. Ansel Kellogg is credited with starting the first American independent newspaper syndicate in 1865, which supplied small-town newspaper editors with newsprint that had syndicated national material printed on one side. Editors who bought the service then printed their local news and advertising on the blank sides of the sheets.
A stable and growing business for much of its 140+ year history, syndicates have been forced to navigate in murky waters for much of the last five years as the newspaper industry it is symbiotically attached to has gone through a dramatic upheaval. The growth and strength of Internet ad sales has not come close to making up the difference in lost classified and print advertising revenue, and slow economic growth leaves many newspaper companies wondering what the next move should be.
Budget cuts and layoffs at the nation’s newspapers should mean good business for the syndicates, who can inexpensively plug the holes left by local contributors with award-winning content that readers love and newspapers demand. Plus, the new distribution channels that challenge newspaper publishers actually offer a new market for syndicated content. But with declines in print readership and a move toward the Web and smartphones, what is the future for traditional syndicated materials such as feature columns and comic strips?
“I think there was a lot more panic across the newspaper industry back in 2009, which felt like a frantic year,” said Brendan Burford, comics editor at King Features. “Here in 2011, I’m not sensing it that much, but sales are definitely somewhat flat.”
All the syndicates I spoke to agreed that on the print side of their sales, they haven’t lost a ton of business, but it isn’t growing at the pace it was five to 10 years ago either. Cost efficiencies and technology have helped to stem losses at most of the major syndicates.
“Our revenues have been flat, which is an amazing statistic in this marketplace,” said Rick Newcombe, president and founder of Creators Syndicate. “Our profits have actually gone up because of new technology.
“Twenty years ago, if we had to send a correction, we’d have to set up and mail out 1,000 FedEx packages, and that just seems so preposterous today,” Newcombe said.
The Whole Package
Many syndicates are shifting their price strategy to make sales and retain clients in such a competitive marketplace. Universal Uclick offered newspapers a free month of “Cul de Sac” with a commitment to run it for another six, and other syndicates routinely give price breaks on packaged deals of content.
“We are seeing package pricing as an effective sales method,” said Amy Lago, comics editor for The Washington Post Writer’s Group. “We have four editorial cartoonists, and if newspapers subscribe to all four, we cut them a break.”
Cagle Cartoons has made the package strategy its core business model. Started by MSNBC.com cartoonist Daryl Cagle 11 years ago when he was on staff at the Honolulu Advertiser, Cagle’s political cartoon package is now syndicated to nearly 900 newspapers worldwide.
“As editors demand more value, better content, better service, and ease of use from syndicates, it doesn’t make sense to buy pricey, individual subscriptions to columnists and cartoonists,” Cagle said.
United Media’s popular Newspaper Enterprise Association (NEA) package, now distributed by Universal Uclick, is another successful sign of this trend. Popular with newspaper editors, the package is filled with a comprehensive and cost-effective collection of features and cartoons for all sections of the newspaper.
Even at Universal Uclick, where all features are sold separately, the NEA package won’t be going away anytime soon, according to John Glynn, editor and vice president of acquisitions and development at Universal Uclick.
“Could there be a day when ‘Dilbert’ and ‘Garfield’ are offered in a package like that?” Glynn asked rhetorically. “Everything’s on the table, so we’ll listen to what newspapers want.”
King Features also has a content package, the King Features Weekly Service (KFWS), which boasts 75+ comics, games, and columns. Aimed at cost-conscious publishers at smaller and weekly newspapers, the feature is now distributed to more than 1,400 newspapers nationwide. King has even added a new KFWS “Lite” package that offers less content for an even more inexpensive price.
“It’s a bit like a game of musical chairs, figuring out the content that newspapers want at a cost they can afford,” Burford said.
Consolidation at the top of the syndication food change has opened up the opportunity for niche syndicates to provide content and fill in the gaps at smaller and mid-sized newspapers that might not have the same appetite for content as larger publications. Syndicates such as Content That Works, which started in 2001 with the Pittsburgh Post Gazette and has grown to provide content to more than 1,000 newspapers, show there is money to be made in a market if you’re catering to the customers’ needs.
Nowhere is that more evident than in the success of the comic strip “Tundra,” which is drawn by Chad Carpenter and syndicated to nearly 450 newspapers by Bill Kellogg, who just launched Ink Bottle Syndicate in an attempt to bring several new comic strips to the market.
“I decided to keep the number of features small and the quality high for now,” Kellogg said. “I didn’t want the strips to be lost in a sea of other features.”
There are even free syndicates, such as Family Features, that let member newspapers and websites use their content at no charge. They offer free editorial content that spans a variety of lifestyle themes, including food, home and garden, and seasonal, and include names and products by nationally recognized advertisers and sponsors who pay for their brands to get publicity.
“Many of us at Family Features come from journalism jobs, so we are familiar with what is seasonal and timely,” said Stephanie Carey, an account manager at Family Features. “We offer a variety of content at one time, so that our editors can come to our site and find what they are looking for.”
The Future of Comic Strips
Newspaper comics as we know them are widely considered to have begun in 1895 with Richard Outcault’s “The Yellow Kid.” A few months after the comic began, newspaper magnate William Randolph Hearst lured Outcault from the New York World, a paper owned by Joseph Pulitzer, to his own flagship paper, the New York Journal American. Today, King Features is a unit of Hearst Corporation.
In many ways, Hearst defined what the comic strip industry would look like for the next 145 years, pioneering the inclusion of comics as a regular daily feature in his papers, and blazing the trail for the Sunday funnies pages that are so familiar today.
These days, the sales successes of new comic strips seem few and far between. “Dustin,” which won this year’s coveted Reuben Award for best comic strip by the National Cartoonists Society, has been one of the industry’s recent success stories. Launched in 2010, the strip appears in more than 325 newspapers, buoyed by its timely message of the “boomerang generation” of 20-somethings forcedto move back into their parents’ homes after graduating from college.
These numbers are impressive in the current climate, but there were a lot of other factors that contributed to the comic strip’s stratospheric growth, including the retirement of “Cathy” and the opening of 1,400 potential new slots.
“Going out on a limb here, I’d say we will never see a new comic strip hit the 500-newspaper mark again,” said Universal Uclick syndicated cartoonist/columnist Ted Rall.
One reason for Rall’s doubt is the reluctance of a number of newspaper editors to change their comics sections at all, afraid that readers will revolt and cancel their subscriptions. It’s a Catch-22: Since the newspaper’s print readership tends to be older, editors are afraid of alienating them or changing their preferred lineup of legacy comic strips. The flip side of this scenario is that young readers don’t feel a connection to some of these older strips, and the newer comics that could lure them in aren’t purchased for fear of upsetting regular readers.
Susan Ellerbach, managing editor of the Tulsa World, said she hasn’t changed the lineup of her comics section in at least five years, mostly due to the reaction she received from readers who have strong emotional connections to their comic strips, like when she removed “Hägar the Horrible” from the lineup.
“I was on jury duty one day and was told the bailiff wanted to see me,” Ellerbach said. “He said, ‘I just called to complain because ‘Hägar the Horrible’ wasn’t in the paper. I’ll get you out of jury duty if you put it back.’”
Today, syndicates and publishers are at a new crossroads in the business of comic strips. While many Web comics, such as “PvP” and “Penny Arcade,” have robust online audiences, the newspaper industry has had problems duplicating the popularity and success of comic strips in their new online world, even as some of the newspaper syndicates are leading the way themselves in terms of creating an audience and a demand online.
Coming out of the merger of Universal Uclick and United Media is a combined GoComics.com, which might be the most popular comics page on the Internet. With United’s Comics.com redirecting its traffic to GoComics.com, the site’s repository now boasts a collection of more than 300 comics and editorial cartoons, making it a one-stop shop for all comics fans with an Internet connection.
“We do a good job of keeping people on the site,” Glynn said. “GoComics.com receives between 10 and 12 page views per user, and Comics.com received more unique visitors, so if we can combine the two, that’s really where you make your money.”
So with such a devoted following and a built-in readership, why do newspapers have such a hard time capitalizing on the ability for comics to draw readers online?
“Most sites that have content, whether it’s general news or something larger and just a specific niche, don’t do a great job promoting them,” Glynn said.
Many syndicates are also looking to the Web comics model in order to promote, and better sell, their features.
“Oh, Brother!,” a comic strip by Bob Weber Jr. and Jay Stephens, might be the first comic strip a major syndicate has launched for which newspapers weren’t the primary sales target. When it launched “Oh, Brother!” in June 2010, King Features devoted just as much, if not more, time and effort to planning and marketing OhBrotherComics.com as they did to newspaper sales in an attempt to connect with the strip’s largest potential readership — kids.
So how has it performed?
“Sales aren’t as robust as ‘Dustin,’” Burford said. “But ‘Oh, Brother!’s’ Web presence has helped give it a footprint that gets it noticed by people outside the newspaper industry, which is a necessity because newspapers aren’t growing.”
King Features also had success marketing its new comic strip “Bleeker,” created by Jonathan Mahood. By giving the strip its own Web presence, it was able to attract a legion of robotics fans right out of the gate, leading to new business ventures and revenue streams that might not have been so readily available 10 years ago.
The Opinion Page
There is a shift in the way newspapers purchase editorial cartoons for their opinion pages. Traditionally, political cartoon features were sold the same way as their comic strip counterparts, individually by creator. But cutbacks in opinion page budgets and new business models have made package deals such as Cagle Cartoons and the NEA package vital to editorial page editors looking to fill space in a politically balanced way with terrific content.
“I was buying Pat Oliphant’s cartoons for a number of years individually,” said JohnSweeney, editorial page editor of The News Journal in Wilmington, Del. “But it was simple. I could get three other great cartoonists for the price of one of his. It comes down to quality, money, and space.”
With Barack Obama occupying the White House, conservative columnists and political cartoonists have been popular sellers for the major syndicates, but most admit that the market for opinion columnists is not growing, as newspapers continue to focus more on local content.
“The last column we launched was five years ago at least,” Glynn said. “It’s tough to launch something new that doesn’t have an established brand in this market.”
Brand-name recognition is the major strategy behind the columnists offered by Creators Syndicate. By offering household names such as Bill O’Reilly, John Stossel, and others, Creators hopes to help clients build an audience for its online offerings.
“On the Internet, when you have big names, you can draw people to your site,” Newcombe said.
Conservative content and celebrities might currently be popular, but most editors still want to offer balanced and well-reasoned opinions to their readers.
“I don’t care about the viewpoint of the cartoonist or columnist; I just don’t want predictability,” Sweeney said. “I don’t mind a conservative or liberal philosophy, but I want to be able to learn something new from them.”
Political cartoons, like their comic strip cousins, are finding it hard to adapt to the online world. Cagle said he feels this is due to poor development, not a lack of popularity.
“Many news sites, and scores of newspaper sites, have inexpensive, automated, syndicated artist name/date archives that perform poorly, cost little or nothing, and reinforce the notion that editorial cartoons have little value on the Web,” he said.
Cagle, whose popular political cartoon website Cagle.com draws millions of unique visitors a month, thinks that with just a bit of editing, editorial cartoons can be great, sticky content that any newspaper website can benefit from.
“On our site we do that by arranging the cartoons into topical collections. Some topics are very popular; cartoons about celebrity scandals draw many tens or hundreds of thousands of readers, while cartoon sections about foreign affairs may only draw dozens of readers.”
Rob Tornoe is a cartoonist and columnist for Editor & Publisher Magazine and edits the satirical humor magazine Delaware Punchline. He can be reached at firstname.lastname@example.org.