NEWSPAPERS: RUNNING OUT OF TIME By HANNA LIEBMA

Things are looking up - a little. For the first time in three years, brokerage house A.G. Edwards is recommending all the publicly traded newspaper stocks as buys, s

That’s the good news. The calculable changes, however, will be far from revolutionary. Depending heavily on the status of the economy – as newspapers always do – the year may post better ad linage figures, but there won’t be anything spectacular. Some areas will continue to rebound from heavy recessionary hits – retail could hit stride again if the ’93 holiday season is favorable – but the basic recovery pace will be slow.
1994’s forecast may appear to be humdrum, but what’s bubbling underneath is far more interesting. Two efforts to sell papers as a national medium – to simplify the buy and to reduce or eliminate the huge differential national clients pay over local rates – could bring the newspaper business fully into the market-driven media world. The Newspaper Association of America, the industry trade group that’s been stuck in place with its one-order/one-buy plan for years, has been goosed by the more aggressive sales approach of Newspapers First, the industry’s largest rep firm.
The moves are happening none too soon. Advertisers and agency folk alike have spelled out their needs amply, and newspapers have come up with little more than smoke and mirrors. If neither programs pans out, especially after the buildup they’ve received, some observers say newspapers will perish slowly and with little sympathy from a community that’s always loved to hate them. ‘There’s not a very large window in which to try to get our act together and go out there with a unified program,’ says John Williams, executive vp of the Seattle Times.
‘If they don’t shape up in ’94, they’re going to fall out of the running as far as national advertising goes,’ agrees Jack Cohen, vp/director of print and outdoor media buying at DDB Needham. But Nicholas Cannistraro, NAA’s chief marketing exec, insists the ‘impending death’ scenarios are ‘exaggerations.’
Next year will also be the year papers dive wholesale into electronic delivery, despite having ben stung by similar ventures with audiotext and videotext in the past. Papers are flooding the electronic market, making alliances in an attempt to get a toehold in the interactive-info market. This year alone, the Tribune Co., Knight-Ridder, Gannett, Times Mirror and Cox Newspapers all announced electronic services. More deals are expected during ’94.
The move toward electronic delivery of information is part logic, part opportunity, part necessity. Newspaper organizations are information rich, and in some cases only 40% of what’s produced is worth printing for a mass audience. But the additional, more specialized information created fits perfectly with the on-line world’s narrow-casting and user-initiated sifting.
More intriguing are the promotional opportunities some of the new alliances hold. The Los Angeles Times, for instance, has developed a partnership with MovieFone that eventually would mean a user could look up a code for any showing of any movie at any theater and automatically buy the tickets. ‘That partnership and the branding of that partnership gets us more access to studios,’ says Lawrence Higby, exec vp/marketing, which could lead to further joint promotions (the paper already teamed up to market the blockbuster Jurassic Park) and package deals with those weighty clients.
Some say newspapers simply have no choice but to get involved. At the least, these emerging media are poised to absorb many of the readers who have defected in past decades, unless newspapers begin packaging their information in more ways than one. ‘Just because newspapers are obsolete,’ says PaineWebber analyst Alan Gottesman, ‘doesn’t mean newspaper companies are obsolete.’
No matter how 1994 unfolds, one thing’s for sure. Profits will never return from the same sources that traditionally fattened papers. At the Los Angeles Times, classifieds, once a bulwark of profits, are back at the levels of the ’60s. And the retail juggernaut has been hobbled by structural changes in that business coupled with consumer reticence.
Whether considering the electronic community, the ad community or the community of readers, newspapers have to challenge the past, reassess their mission and image and follow through with stated goals. ‘They say, ‘We’re here to provide a service to the community,’ ‘ says Stone. ‘Well, get on with it! If they don’t, other people will.’
Copyright Adweek L.P. (1993)