Chicago Sun-Times

This week, Chicago Sun-Times, one of the main newspapers in Chicago, laid off its entire photography staff. According to the story in the New York Times, the company justified the move by the need to shift to more video and user-generated content online. It was left unsaid whether cost-cutting was part of the reason, but surely it must be so. To quote the NY Times:

Like most major newspapers, The Sun-Times, which was bought by the investment company Wrapports in 2011, has been hard hit by the technological shift that has cause more people to rely on their personal computers and mobile devices to stay informed. As more readers have embraced digital alternatives, so have advertisers in a move that has been steadily siphoning away newspaper publishers’ biggest source of revenue.

The Chicago Sun-Times ended September 2012 with a paid circulation of 263,292, according to the most recent statement filed with the Alliance for Audited Media. That contrasted with circulation of about 341,448 at the same time in 2006. (my emphasis)

Newspapers and magazines have two basic revenue sources: sales of the newspaper and advertising. In fact, in case of specialized magazines such as Popular Photography, advertising was so dominant that subscriptions were just an add-on revenue source. As explained above, advertising is now migrating to the internet, and at the same time, sales of the newspaper are falling–any business that suffers a 23% sales decline in 6 years clearly must do something. There are only two possibilities: increase revenue, cut costs, or close down (well, that was three, but that last one is the one we are trying to avoid).

It is hard to see what a newspaper like the Chicago Sun-Times can do to increase revenue. It is not a national newspaper and must therefore rely on mainly local subscriptions and advertising. The population of Chicago is stable, so no growth from that source. Like everywhere else, people in Chicago increasingly get their news online, so it is hard to see an increased penetration among the existing population. And the kind of local advertising (classified ads) that a newspaper like the Sun-Times would rely on 20 years ago is now gone, replaced by Craigslist and the like. So there is no easy solution here, and while the blogosphere has exploded with condemnation and ridicule, it is hard to blame the company’s management. The newspaper business is changing, and the reason is us. When I look at my own news and media consumption, I see a microcosm of what is happening on a broader scale. I have not subscribed to a printed daily newspaper in at least 20 years. I used to subscribe to several magazines, but now the only ones I still get are The Economist (paper and iPad) and Cycling Plus (iPad only). And yet, thanks to the internet, I look almost daily at the New York Times, the Guardian, El País and a couple of Danish newspapers. When fancy strikes I might even visit Le Monde or Der Spiegel. I also watch the daily Danish newscast and visit the BBC web page several times a day to keep up with the news. I get push notifications of breaking news on my iPhone, from the New York Times. So I certainly have a lot more access to news and journalism than ever before–but I also spend less money on it than ever before.

This, in a nutshell, is the problem for a paper like the Chicago Sun-Times. Analogously to retailing (where Wal-Mart and Neiman Marcus thrive while JC Penney or Sears go bust), the newspaper industry is bifurcating into a low end and a high end, with a squeezed middle. Local newspapers in smaller towns will probably survive because they essentially serve as community bulletin boards and cover local stories that nobody else would otherwise cover. At the high end, there are a few newspapers that have a national or even international audience, such as the New York Times, the Washington Post or the Wall Street Journal. They have content that people will pay for if pressed . But mid-range papers like the Sun-Times will probably wither and die.

The above is written from a US perspective, but applies equally to most other countries. Just to make it clear: I do not applaud lay-offs, any time someone loses his or her job is sad. But those who condemn the Sun-Times should then propose alternatives. Some of my photographer friends say that laying off the photographers will lead to decreased quality of the photography in the newspaper (probably true) which will lead to further decline in readership and so kill the paper. I find this naive. How many people buy their daily newspaper because of its photography (other than the papers that have a “page 9 girl” or equivalent, but I assume that in the US this is not done)? And those who hold this position must also explain why readership has already been declining for several years, despite the presence of all those great photographers at the Sun-Times.

There are no easy answers here.