Top Newspaper Execs: We’ve Got To Change

By: Kevin McGill, Associated Press Writer

(AP) The economy may be recovering but it is also changing, and newspapers will have to adapt to thrive in the coming years, a panel of newspaper executives told their colleagues Wednesday on the final day of the Newspaper Association of America’s annual convention.

The consensus among four top executives from newspaper corporations: Newspapers will have to work harder to find more, smaller advertisers. They will have to develop and keep improving online editions and direct mail advertising products. They may have to reduce per-copy and subscription prices to increase readership, even if circulation becomes a lower percentage of revenue.

Employment classified advertising took a big hit after 2000 and it is doubtful that it will bounce back to its previous levels, said Anthony Ridder, chairman and CEO of Knight Ridder.

Just one challenge facing newspapers: major department stores have consolidated. “Traditional retail will grow some, but not the way it’s grown in the past,” Ridder said.

William Dean Singleton, vice chairman and CEO of MediaNews Group Inc., likened the situation to one newspapers faced when they lost cigarette advertisers — and said it will be overcome.

“Our industry has always risen to the challenge to find new sources of revenue to replace the ones we’ve lost,” said Singleton, who formally took over as NAA chairman on Wednesday.

Ridder said some of the revenue will have to be made up through development of advertising products that do not necessarily run in the newspaper itself. He mentioned direct mail, the Internet, and the purchase and development of separate publications focused on real estate or automobile sales.

Advertising departments will have to work harder, said Gary Watson, president of the newspaper division of Gannett Co. Inc. “We’re going to need more feet on the street, make more sales calls, and reach those smaller advertisers,” Watson said. “The day of just going in and dealing with your top 10 or top 15 and assuming that’s going to give you 40 or 50% of your revenue, those days are gone and they’re never coming back.”

Declines in circulation numbers do not mean that newspapers themselves are on the decline, panelists said. Watson said research shows that overall readership is up. And Gary Pruitt, chairman, president, and CEO of The McClatchy Co., said newspapers are essentially “the last remaining mass medium in each of our local markets” as other media target specific audiences and their mass markets fragment.

“We can supplement that with targeted direct mail and direct marketing products so that we have the nontraditional revenue, the leading local Internet site. If you do all of that in your market, you’ll be the leading company in your market. If you have a decent market, you should thrive,” Pruitt said.

Throughout the three-day NAA convention, newspaper executives have expressed hope that a federal regulation preventing newspapers in some markets from owning television stations in the same market will soon be repealed.

But panelists did not predict a huge rush by newspapers to snap up television stations when and if repeal comes. Costs may be prohibitive for some newspaper companies that are not already in the broadcast business. There may be more interest at Gannett, which already owns some stations, in acquiring stations in new markets or in switching its broadcast markets, Watson said.

However, he added, the end of the cross-ownership ban will not bring “a huge pot of gold.”

Nevertheless, use of other media to promote the newspaper, be it a result of cross-ownership or partnerships with television stations, is another important aspect of keeping newspapers healthy, panelists agreed.

Other observations of the panel:

* Online editions are vital to a newspaper’s growth. And, although some newspapers are charging for access to their sites, there was a consensus among the four panelists that such Internet subscriptions are not a good idea. Watson warned that young people are used to free media via broadcast and the Internet and a paper’s online readership among young adults could suffer if they are charged for access.

* While charging online readers is a bad idea, making sure they register with information about themselves is important, Ridder said.

* It may be time to bring back the 25-cent newspaper. Knight Ridder has already done so in some markets, said Ridder, who added that permanently discounted subscription rates also may raise readership.

“There is a price below full price and above free, that we can attract that young reader,” said Singleton. “And because advertisers want that reader, we’re going to have to do it.”

Wednesday’s panel was moderated by Jeffery F. Rayport, CEO of Marketspace LCC. At the end of the discussion Singleton formally took over as NAA chairman, replacing Orage Quarles III, president and publisher of The News & Observer of Raleigh, N.C.

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