Cribb, Greene Publisher Confidence Survey Results

Although not as exuberant as last spring, mid and small market newspapers still quite optimistic.

Mid and small market newspaper executives continue to be optimistic about their future financial performance, local market economies and the newspaper industry in general.

Cribb, Greene & Associates has released the Publisher Confidence Survey Fall 2010 with results that indicate newspaper executives are bullish on revenue and profits in the coming year.

Fifty one percent (51%) of executives polled believe their advertising revenues will be up in 2011 and 35% more think they will be about the same as this year. However this is down from the Survey last spring, which showed 71% believing revenues would be up. Fourteen percent (14%) think next year's ad revenues will be down.

Most newspapers believe their local market economies are improving or stable (86%); half say their profits will be up in 2011 (50%); and with an improving economy feel their profit margin will be the same or better than in the past (67%). However a substantial number of respondents - 33% - think their profit margin will be lower than it was prior to the economic downturn.

In a change from responses in last spring's Survey, 43% would consider eliminating their web press and outsourcing printing - up from 32%. The question on considering buying a newspaper is at 54% "No", 46% "Yes", about the same as the prior Survey. Fifty-five percent (55%) say bank financing on reasonable terms is available to them.

Respondents were less optimistic in answering the question "Would you recommend the newspaper business as a career for your children?" This litmus test question last spring produced 39% "yes" responses, which has decreased to 31% in the current Survey. When added to those who "maybe" would suggest newspapers as a career the percentage totaled 62%, with 38% saying "no" to this question.

The Cribb, Greene Publisher Confidence Survey polls mid and small market newspaper executives to see how they feel about current performance. The Fall 2010 Survey had 239 participants of whom 34% have daily newspapers, 13% have both daily and non-daily newspapers, and 53% have non-daily (primarily weekly) newspapers.

SURVEY PARTICIPANT COMMENTS
A number of participants in the Publisher Confidence Survey took time to express their thoughts, and some of the comments are below:

"Our biggest competitor has become Facebook. Businesses are using free Facebook pages to advertise and they are reducing or eliminating ad schedules. Also, readers are using these pages to post their society or community news. This isn't being talked about enough in our industry."

"I firmly believe that good community newspapers will be around for many, many years to come."

"Small, community newspapers will survive and I believe thrive, albeit with smaller margins."

"I love the business but to succeed in the future even small and niche newspaper companies will have to transition to online, apps etc. and I'm uncertain how profitable those ventures will be."

"You must be kidding." [in response to suggesting your children seek a career in newspapers]

"If my children could work for people that understood the industry - maybe!" [in response to suggesting your children seek a career in newspapers]

"Newspapers will continue to be part of our communities as a source for our local news and advertisers for years to come but on a smaller, condensed format."

"If we can get away from this insane wasteful government spending and expansion I think that most companies, including newspapers, will have a moderately good chance of not only surviving but thriving in the next decade."

"I don't believe community papers are going away. The method of delivery may change but there will always be a market for news."

"Print will continue to be profitable but at much lower margins... very careful thought has to be made as to balance sheet debt... less is better.. none is best. In the long run newspapers will have to find a way to monetize the internet and have internet margins in the 60% range to make up for loss profit and profit margin with print publications... is 10 to 12% margins in print as possible and 50% plus margins on revenue that runs on multi internet sites including video and mobile...."

"Although the business is changing, small local newspapers seem to remain the best single way to disseminate information to a local community in print and/or electronic delivery."

"While the newspaper industry is still very much in a downward cycle, as the economy turns around, I think we will again see healthy bottom lines. We must move the industry over to charging for online content. Then we need to refocus publishers, newspaper owners and other newspaper leaders that the printed product is the most important element of our business. Selling ads & newspaper must return to the top of our business structure. Then we need sound newspaper minds in leadership positions with ABC."

"I believe that newspapers can still have a strong future but our business model has to be fundamentally different than it is now. We will never again see the kind of period that we experienced from 2000-2006. Our profits going forward will be smaller but with increased digital sales our margins could still be pretty good. However, we will be managing a declining print business while trying to ramp up digital revenues at a faster rate to offset the print losses."

"I think the business of newspapers have steadied at these lower, but improving, levels. If we can win the battle against the aggregators that will improve prospects even more, allowing newspapers not named NYT to enjoy a better revenue stream from online."

"There will always be a need for local news. Methods of delivery may change more and more but local news is a franchise business."

"This is a response for an entire newspaper group. Some of our papers will do better next year, but as a whole our larger operations are offsetting gains at some of our smaller and midsize ones."

Question 1: "Is your newspaper company primarily daily frequency (5 days or more each week), non-daily, or a combination?"

Question 2: "Do you think the local economy(s) in your publication market(s) is/are improving, declining or about the same as last year?"

Question 3: "Next year (2011) do you believe that your bottom line will be up, down or about the same as this year?"

Question 4: "As the economy improves, do you think your bottom line will be better than it was before the downturn, worse or about the same?"

Question 5: "Next year (2011) do you believe your total advertising revenues will be up, down or about the same as this year?"

Question 6: "If you currently print in-house, would you consider outsourcing your printing and eliminating your press?"

Question 7: "Would you consider purchasing a newspaper currently?"

Question 8: "If you would consider purchasing a newspaper, for funding would you primarily use Bank Financing, Seller Financing, Cash Reserves or Other Sources?"

Question 9: "In your opinion, is bank financing on "reasonable" terms available to you?"

Question 10: "Would you recommend the newspaper business as a career for your children?"