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Black and White and Read by Fewer

October 10, 2005|James Rainey | Times Staff Writer

In a recent e-mail chat about the future of their business, several young New York Times reporters concluded with dismay that most of their friends don't subscribe to the newspaper.

At the San Jose Mercury News, hardened news hawks facing staff reductions have begun eyeing public relations jobs they once would have disdained.

In Philadelphia, a news photographer who has "loved every minute" of his 68 years in the business doesn't like the trends he sees. He counsels young arrivals: "If you're smart, you'll switch to TV."

Newspaper people across the country have descended into a collective funk over a run of bad news in recent weeks -- culminating with announcements of newsroom job cuts in San Francisco, San Jose, New York, Boston and Philadelphia.

The total retrenchment at half a dozen papers will amount to only about 300 editorial jobs, a paltry hit in an industry with $59 billion in revenue that employs some 54,000 editors, reporters, photographers and others.

But the buyouts and layoffs have dispirited many newspeople because they come at a time of steady declines in circulation and advertising.

The falling morale sometimes is cast in vivid terms, as when Philadelphia Inquirer metropolitan columnist Tom Ferrick Jr. protested the 75 job cuts ordered by Knight-Ridder Inc., his paper's corporate parent.

"They say Knight-Ridder doesn't have a plan. Actually they do, " Ferrick said in an interview. "They are going to jettison the old, shoot the young and ... torture the survivors, which, come to think of it, seems to be an industrywide plan."

Knight-Ridder -- the second-largest newspaper chain by circulation, with 31 dailies and a total circulation of 3.8 million -- recently said its third-quarter profit would decline by 20%. The onetime Wall Street darling saw its stock reach a two-year low. It closed Friday at $56.60, down 23 cents.

Polk Laffoon, vice president for corporate relations at Knight-Ridder, said journalists hear such numbers but sometimes still fail to understand the urgency of the pressures confronting publishing executives.

"Some people accept that the profit this year will always remain at that level. It will not," Laffoon said from the company's San Jose headquarters. "That can turn and suddenly you're barely breaking even

An industrywide circulation drop of 1.9% for the six months ended in March was one of the biggest in recent times and continued a fairly consistent two-decade decline. Daily newspaper circulation has fallen nearly 9 million from its 1984 peak of 63.3 million, while the U.S. population has grown by about 58 million. The country lost 306 daily papers, 17% of the total, between 1960 and last year.

A Media Management Center study reached an even more alarming conclusion regarding younger readers -- estimating that by 2010, only 9% of those in their 20s will read a newspaper every day.

A dramatic flight of advertising has followed the circulation losses -- with classified ad revenue dropping 15% from 2000 to 2004 -- dragged down largely by an almost 50% decline in employment advertising.

Yet most newspaper companies remain profitable -- with margins in 2004 ranging from 15% to 28%. And newspaper executives have fought to highlight more hopeful news about their business.

Last week the Newspaper Assn. of America announced a new twice-yearly statistical analysis that tracks "readers" -- the total number of people viewing papers, both printed and online -- rather than the smaller number of "subscribers." The trade group hired a phone-survey firm that concluded, for example, that 2.4 million people read the Los Angeles Times at least once a week, compared with weekday circulation of about 908,000 a day. It also found that in the difficult 18-to-34-year-old demographic, which includes many readers who have fled to the Internet, more than two-thirds continue to read a newspaper sometime during a given week.

The association also presented information from Nielsen/NetRatings that showed the enormous audiences available online, including, for example, 12.8 million unique individuals who visited the New York Times Web pages in a recent month and the 9.7 million who looked at the USA Today website.

As yet unanswered at most newspapers is how to make money with online readers -- either by increasing ad revenue or finding a way to get Web viewers to pay for content they were accustomed to getting free.

Looking toward the more distant horizon, industry observers range from doomsayers, who see print news disappearing in a few years, to optimists who believe the business will find ways to sell itself online.

Morgan Stanley publishing analyst Doug Arthur predicted that many recent ad revenue declines would prove transient and tied to one-time events -- a poor box office year at the movies, department store consolidations and fraudulently inflated newspaper circulations.

"I think the sun will shine again on advertising," said Arthur, whose brother John is an assistant managing editor at the Los Angeles Times.

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