Detroit Newspapers Start Reduced Home Delivery
Missing from the doorsteps and driveways of many Michigan homes Monday morning: newspapers.
In a bold but risky move aimed at ensuring their survival in the digital age, The Detroit News and the Detroit Free Press are reducing home delivery to the three days a week most popular with advertisers _ Thursdays, Fridays and Sundays. Slimmed-down newspapers, sold at regular prices, will be available in news racks and convenience stores the other four days.
The Detroit publishers hope to cut costs significantly, without sacrificing newsroom staff, to survive a recession that has exacerbated losses from ads shifting to the Internet. Millions of dollars in advertising have eroded over the past year in a city and state being hammered by foreclosures, high unemployment and the near-collapse of the auto industry.
More than 80 newspapers in the country, in smaller markets, have dropped at least one publication day since last year. The Christian Science Monitor printed its final daily edition last week. Other newspapers in Maryland, Michigan, Oregon, Tennessee and Wisconsin are on the verge of similar reductions in frequency. A few have gone online-only.
Detroit is trying a hybrid: keeping daily publication, but cutting back on its commitment to serve homes every day.
The newspapers hope that by nurturing their ink-stained legacy, and reaping only partial savings in production and delivery, they can keep enough revenue and staff to grow beyond print and become profitable on the Internet, cell phones and other mobile gadgets.
"They are accelerating greatly the print-to-digital transformation, and they are taking a great chance there," said Ken Doctor, media analyst with Outsell Inc.
The biggest risk is in breaking readers' newspaper habits, he said. If readers realize they can get by without a newspaper at the doorstep four days of the week, they might conclude they don't need it delivered on the other three days. Circulation could drop, and with it, ad revenue.
The Detroit newspapers will still print on the four days they don't deliver to homes. They will sell copies at the same coin-operated locations and retail stores that now carry the newspapers. The newspapers are also arranging to sell them at nursing homes and by mail.
But the News and the Free Press on those four days will be stripped down to about 32 pages. Although some full-size editions currently aren't that much larger, the newspapers will have room for fewer articles, comic strips, stock listings and sports box scores. The Free Press will keep stories short by shunning "jumps," or continuations onto an inside page.
To lure readers, both newspapers have designed new features, including a personal finance page in the News on Mondays.
Jonathan Wolman, editor and publisher of the News, acknowledged the risks in changing readers' relationship to the newspaper. But he said the moves are needed to preserve a vibrant newsroom that can produce compelling stories and attract audiences in print and online.
"No one's done this before, and in that sense, I do believe there's a lot to prove here," he said.
For $12 a month, or $1 to $2 less than the previous monthly rates, home subscribers will be able to get the Free Press delivered Thursdays, Fridays and Sundays. Or they can get the News on Thursdays and Fridays and the Free Press on Sundays, because the News does not publish on Sunday.
Those rates come with access to electronic editions, laid out like a regular printed newspaper, for all seven days. Everyone else will be able to see the Detroit newspapers' stories for free online, but not in this format.
Gannett Co. and MediaNews Group Inc. _ the two newspaper companies that work in partnership to publish the Detroit newspapers _ never considered pulling the plug entirely on print. Even in a recession, many printed editions make money, and the Web sites threatening to replace them generate far less revenue.
"You simply could not support a newspaper newsroom on Internet ad rates today," Wolman said.
Dave Hunke, publisher of the Free Press and head of the Detroit partnership, would not discuss the newspapers' finances in detail. But, he said the Free Press and the News could have cut costs by about 40 percent by dropping print entirely _ a percentage in line with what analysts say other newspapers could also save.
However, that would have cost the newspapers far more in revenue from print circulation and ads, which together represent more than 85 percent of total revenue. Deep staff cuts would follow if such a strategy was pursued.
Instead, not delivering to homes every day will cut costs by about 20 percent. Although the presses will still have to roll, the newspapers will save on paper and ink by printing fewer pages and copies _ Detroit officials say they expect circulation to be cut in half on non-delivery days. The newspapers also won't have to pay as much for fuel and delivery staff.
In other words, the newspapers will save only half as much in production and delivery costs as they would have had they stopped printing, but they will keep the bulk of their revenue, as less than 15 percent now comes from online ads.
The newspapers will cut about 215 jobs, or about 10 percent of their work force. But Hunke noted that the moves will avoid "hundreds upon hundreds" of additional layoffs that would have come if the newspapers had done nothing to address their financial woes _ or if the publications had stopped printing. Neither newspaper is cutting newsroom staff.
By contrast, the Seattle Post-Intelligencer, which became an online-only operation this month, is cutting its editorial staff by more than 85 percent and relying heavily on reader contributions.
Hunke said Thursdays, Fridays and Sundays accounted for 82 percent of advertising revenue in Detroit. And he estimates that the newspapers will keep more than 90 percent of their ad revenue as advertisers shift some ads from the four days that won't have home delivery to the three days that will. New ones might even come on board for the four limited-edition days, when ad rates will be lower because circulation will be halved.
"Online may allow you more dynamic, deeper levels of interaction and a way for customers to engage immediately ... but the high impact of a full-page print ad cannot be overstated," said Jim Weber, chief marketing officer for Comerica Inc., a bank that plans to keep advertising heavily in the Detroit newspapers.
Amy Shanler, a spokeswoman for Staples Inc., said the office-supplies retailer isn't worried about the cutbacks and plans to continue advertising in Detroit and other markets where newspapers have scaled back. Staples is especially interested in Sunday newspapers, in which it inserts circulars, "and we anticipate papers will still keep this edition due to its traditionally high circulation," Shanler said.
The Gannett-owned Free Press is the nation's 20th largest-selling newspaper on weekdays and sixth-largest on Sundays. Weekday circulation there dropped 7 percent year-over-year to 298,243 in the latest reporting period, while Sunday circulation fell nearly 4 percent to 605,369. Weekday circulation at the News, which is owned by MediaNews, fell 10 percent to 178,280.
Hunke said the newspapers are "prepared to lose some very longtime loyal readers who are just disappointed, angry or this doesn't work for them." But the newspapers add that cancellations over the delivery cuts have been minimal.
Mindful that subscribers, particularly older ones uncomfortable with the Internet, might need help maintaining their news habits on the days the newspapers won't be delivered to homes, the Free Press and the News have been holding Web training sessions for novices.
Bill Foster, 73, attended a session with his wife, Karen, in Van Buren Township. The longtime Free Press subscriber was a bit unsure at first as he navigated a digital edition laid out like a regular printed newspaper. Eventually he managed to search for and find stories about the Detroit Tigers.
Foster acknowledged he will "just have to get used to it."
AP Business Writer Jeff Karoub contributed to this story from Detroit.