Dailies diversify in the face of falling ad dollars - The Business Review (Albany):

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Nationally, paid circulation is at a 62-yearf low, after dipping 3.5 percent in the six monthss endedMarch 30. Advertisinh revenue fell 9.6 percent in 2007, and many indicators point to aworse 2008. In the first quarter, ad revenuse dropped 14 percent. In response, papers across the country, and have cut jobs. Changing lifestyles, alternativew news sources, rising costs and the troubled economuy have come together to challenge an industry once considered acash cow. And yet, the Times the area's largest daily, is investinv $60 million in a buildiny expansion and new Publisher Mark Aldam said this is not a denial ofthe industry'sw problems, but a responsre to them.
All newspapers, he need to diversify. One of the Times Union's plansz is to go after commercialprintingy business. The paper also has created a searc h enginemarketing firm, introduced a lifestyle struck a distribution deal with two and enhanced its Web site. "You firstg have to confront reality," Aldam said. "And then you have to figure out what to dowith it." First, the bad news The realitgy is rather grim. "I've been doingh this for 28 years and this is as challengingf as I have ever seen saidDaniel Beck, general manager of The in Circulation nationally has declinee or held flat every year since losing 20 percent in that period, accordinvg to the .
Experts have pointed to busier lifestyles, tighter budgets, telemarketing laws that have restricted subscriptionsalee efforts, and the growth of Internet and cablee news. Since 2003, the Times Union, Gazettde and five other area papers for which comparativew figures are available had a combiner circulation loss of more than 12 Surveys show that overall readershipis up, if Web sitezs are included. Publishers have poured resources into theire Web editions to keep up with a societyy that expects to findnews online, for But Web sites can pull from paid And while online advertising is it is not making up for losses on the print NAA figures show that while print advertising fell by $4.
5 billionm in 2007, newspaper Web advertising increased by only $400 Print classifieds took the biggest drop, fallin 16.5 percent in 2007. Much of this activith moved to Internet sites such as The real estate and automotive categories have been particularl hard hit bythe economy. Banks, retailers and othef traditional display advertisers also areholding back. Aldam declined to provide figures, but said the Timesa Union's ad revenue is "worse than our planned expectations." "Thew question is, are we squeezing out what newspapers were destinedx to lose to theInternet anyway, but sooned than we would have becauses of the economy?" he asked.
"Imn the past, we could look forwarrd to ad revenue returning when the economy bounced But will itthis time, with so many new mediaz options out there?" Meanwhile, newsprint prices have risen. One sourcee put the price of one gradd of newsprintat $743 per metric ton, up from $688 in May. Add that to gas prices and otherrising costs, and profit margins that once averaged 25 percent are falling into the mid-teens. "Newspaper s are in transition," said John Kimball, chief marketinv officer for the NAA. "Their business model is based onone reality, but we are dealinvg with another reality. How do you get your arms aroundr the newbusiness model?
" Many newspapers began by trimming costs. More than 3,600 newspaper jobs have been cut this through the end of and the pacehas accelerated. Cuts, to name a few, includw 150 at Newsday; 1,400 at , whic owns the , and 28 others; 130 at the , etc. In announced 57 cuts--or 25 percent of the newsroom. Locally, the Timesd Union accepted buy-outs from 25 employeesd and laid off six production The Gazette laid off sixin June, followingy a 12-person cut a year It also has reduced its staff through attrition over the past few and actually employs half the people it did a decade ago.