State of the TN
Published 8:33 am Saturday, March 28, 2009
As many pundits and financial analysts write the obituary for the newspaper industry, a pertinent question becomes, “How’s our local newspaper doing?”
Several of you have asked.
My short answer: “Very well, thanks,” which I say with much humility and gratitude.
We are blessed with readers who value community news and advertisers who believe in our ability to deliver their message to those readers (who, not coincidentally, are the primary consumers of goods and services in the market). We’re also fortunate that our advertising clients are unusually savvy in their understanding of a fundamental but challenging business truism: You don’t stop marketing in a tough economy.
All of that adds up to a mutually beneficial relationship that has served The Tidewater News well leading up to and during the current recession and during a reported “crisis” for our industry. For 15 of the past 16 months, our newspaper’s operating income has exceeded the same month in the previous year. In most of those months, revenue was up significantly. In the others, we remained profitable by tightening our belt on expenses, which is to acknowledge that we are not immune to the recessionary forces that are pinching all businesses.
The price of newsprint — our second-largest expense item behind payroll — soared during 2008. Fortunately, it has leveled off and even dipped a bit during the first quarter of 2009. Four-dollar-a-gallon gasoline was brutal while it lasted. Franklin Power & Light’s retroactive correction of a 2½-year-old billing mistake was like a sucker punch to the gut in an already-challenging business climate.
For those reasons and others, we’ve been forced to examine every aspect of our business and to seek to operate with total efficiency while minimizing the impact on our customers. Other than a 1-inch reduction in the width of our news pages (which many of you have said you prefer because it makes the newspaper easier to handle), our cost-cutting to date has been largely invisible to our customers. Significantly, we have not raised the cost of a subscription in more than two years, and our advertising rates have been adjusted only for inflation.
For our staff, the process has not been painless. We’ve had a net loss of two full-time jobs in recent months. Our employees this month began paying a larger share of their health insurance premiums. We will deposit less in our company-funded retirement plan this year than in previous years.
I share that proprietary information because I view you, our readers and advertisers, more like stockholders than detached observers. It’s obvious from your comments and correspondence that you feel invested in your newspaper and share my belief that a relevant, viable source of local news is an essential part of a successful community.
“The thought of losing small-town newspapers is abhorrent,” one of you wrote to me last week after reading a national columnist’s bleak assessment of the future of newspapers. “How could the vital purpose of our ‘freedom of the press’ survive? Losing our local papers across our nation would be much, much worse than sad.”
The columnist, not surprisingly, is employed by a metropolitan newspaper. Large newspapers indeed are in trouble. It’s been noted that you can buy a share of New York Times stock for the same as a copy of the Sunday Times. In our region, The Virginian-Pilot has been remarkably candid in reporting on its own fiscal woes.
The reasons that big newspapers are struggling (a crowded information marketplace, young consumers’ preference for electronic delivery of the news, and inefficient delivery systems, to name a few) are less applicable for community newspapers.
If we embrace and protect our local news franchise, deliver the news the way the customer wants it (in print, electronically or some combination of the two) and stay focused on our core geographic area of Western Tidewater, we will remain profitable for many years to come.
Why is that important? Aside from the obvious obligation to our stockholders and creditors, a newspaper, to serve its community effectively and with credibility, must be able to stand independent from outside influences, whether economic or political, that would compromise our ability to report the news objectively and to opine on issues of importance to the citizenry.
We thank you, our readers and advertisers, for affording us those privileges.