From the deck to the Globe and Mail story: "Weak economy, changing consumer habits and online competition brews perfect storm for media companies."
Mr. (John) Temple (editor and publisher of the now-defunct Rocky Mountain News) has been a reporter or editor for more than 20 years, in Denver, Toronto and New Mexico, and he has never seen the newspaper industry in such bad shape.
“We're in a period of sort of wrenching destruction,” he said. “We're going to see the collapse of many newspapers.”
A weak economy, changing consumer habits and competition from the Internet have brought several media companies to their knees. This week alone the owners of three large U.S. newspapers, including the Philadelphia Inquirer, filed for bankruptcy protection; CTV announced plans to close two television stations in Ontario; Canwest Global Communications Corp., owners of the Global TV network, faced a deadline by its lenders and won a two-week reprieve; and Torstar Corp. announced a $211-million quarterly loss and shook up its management ranks.
All that as the owners of several other large U.S. newspapers, including the Chicago Tribune and Los Angeles Times, are already in bankruptcy protection, Canwest has said it may close stations in five cities, and media outlets everywhere – including The Globe and Mail, which is owned by CTVglobemedia – have laid off staff. ...
Mr. Temple paints a similar picture of decline in Denver, where the Rocky and its crosstown rival, the Denver Post, once sold more than 1.1 million copies combined on a Sunday. By 2001, the papers had to join forces to cope with flagging financials and formed a joint company to run their business operations while keeping the newsrooms separate. But that didn't stop the bleeding.
Weekday circulation for both papers sunk to 210,000 from 300,000 and the Sunday circulation fell to 600,000. As the economy sank last year, advertisers cut back or shifted their spending, resulting in a $100-million drop in help wanted and real estate ads. Last year the Rocky lost $16-million and in December, Scripps put it up for sale.
“We knew that closure was the most likely option and that it was a very real possibility,” Mr. Temple said. “It's a very complicated business situation and it's just not an attractive situation for a buyer to get involved with.”
The Rocky may not be the only paper to shut down. Hearst Corp. has said it will close the San Francisco Chronicle unless major budget cuts are imposed or a buyer is found. The company is also prepared to close the Seattle Post-Intelligencer if it can't be sold.
Mr. Temple said newspapers must radically transform how they do business if they hope to survive. They may have to sell stories online much like iTunes, where readers pay a small monthly fee and receive only stories on topics that interest them. And they have to break down old barriers between editorial and advertising departments and get both to work together. “We're still stuck in ‘well that's not how we do things.' Sorry, that ain't going to cut it any more if you want to survive,” he said.