“The real problem with newspapers today is what publishers are doing in order to try and maintain those margins of yester-year,” wrote Stone.

Managers have heard this many times, but perhaps hammering it in is the only way for them to enact this thought.

“They are investing in digital platforms which is good to make their products multi-platform, but they are taking the shearing scissors to their print operations with editorial feeling the brunt.”

“For the most part they have not bought into the philosophy that the better the editorial product the better they will do financially.”

This point relates to a recent study that revealed in hard figures that investing in a newsroom and editorial processes – as opposed to the widespread habit of cost cuts – makes a newspaper more profitable.

Therefore, newspapers and their editors should concentrate more on producing the content that makes them both valuable for an individual and as a social medium. Newspapers should stick to, and reinforce, analysis, in-depth insight, and commentary.

“Editorially, she said newspapers have gone astray by using the front page for stories that readers don’t really want there – they’ve seen or heard most of that breaking news elsewhere.  What readers expect from their newspapers is context, analysis and stories they just won’t find anywhere else,” wrote Stone.

Much of Stone’s article is based on a recent interview (and another from a year ago) of Merill Lynch’s newspaper analyst Lauren Rich Fine.

She gave recommendations for the industry, here quoted from Stone’s article:

“   _Accept that circulation is in decline. Raising circulation rates isn’t going to be the solution. It’s a minority revenue stream, anyway at 15%-20%.

    _Put up the “work in progress” sign and don’t pay attention to Wall Street or anyone else. Figure out what’s wrong, take the time and money to fix it, even if it takes five years
    _Keep the shareholders happy by returning some of that cash flow in the form of share repurchases or higher dividends, but don’t worry about the share price. Let it drop. It will buy you time to try things out.

    _Try many things but if you see they don’t work then cut to the next new thing. Don’t burn up precious cash.”


Source: Follow the Media