Can Dailies and Weeklies Survive the Digital Age? Here’s How They’re Trying to Adapt.

In Cover Stories, News by S. Heather Duncanleave a COMMENT

webpressYou’d have to be crazy to start a new print newspaper—much less an alternative weekly.

Nobody’s doing it.

On the contrary, alt-weeklies with long, rich histories are shutting down. Big companies are buying up papers and “rightsizing” them with layoffs, consolidations, and closures. The Internet has scattered readers’ dollars and attention. Particularly since the recession of 2008, many a media maven has intoned a witty eulogy over the moribund corpse of Print Journalism.

But, as noted journalist Mark Twain might’ve said, perhaps reports of its death have been exaggerated. To start this publication, for example, several Knoxville journalists passionate about investigative journalism, the arts scene, and quality writing have teamed with local supporters who believe in the same goals. Nationally, media experts say it’s unusual that this is happening at all. But the Knoxville Mercury’s ownership by a nonprofit and its focus on a print product are also rare.

“I’ve been sort of surprised I haven’t seen more of your kind of hybrid pop up,” says Tiffany Shackleford, executive director of the Association of Alternative Newsmedia. “To me it’s obvious growth—you use the hyperlocal model, you go lean, and you go nonprofit.”

This is by no means the first publication to try aspects of this formula. Across the country, news organizations are kicking around new approaches to revenue and ownership. They have to, because the threats to the old business model are real, and nobody in the industry has figured out the new model yet.

“This is a moment that is fraught with opportunity as well as risk,” says Penny Abernathy, Knight chair in journalism and digital-media economics at the University of North Carolina. “The opportunity is, if you can stay in touch with and stay in tune with the market you serve, this is a very dynamic time. If you position yourself as a multi-platform service and not just a print vehicle, you have a chance to survive and thrive in the future.”

Circling the Drain
Newspapers are still trying to figure out how to make money in the age of the Internet, which provides challenges on three fronts: It threatens newspapers’ cost structure, revenue, and customer base. In the past, the money and expertise involved in printing and distribution gave newspapers a monopoly advantage. But that very production process became a liability when competitors could sell ads and post news online without any production costs.

The ads are the key. Even papers with paid delivery make most of their money on ads. Classified-ad income was the first to disappear, mostly thanks to Craigslist. Then other advertisers started to bail, too, as the Internet gave people more ways to find products and services.

When the Great Recession approached, one of the first cost-saving measures for many companies was to cut advertising further.

It was a vicious circle. As advertising dollars disappeared, newspapers shrank distribution, which in turn meant they could charge less for the remaining ads. (Ad price is partly based on the number of papers sold.) Online ads on newspaper websites made less money. Most papers didn’t charge for online access to their stories, reducing readers’ incentive to buy the print product—which again meant the paper could charge less for print ads.

“There was more hope a few years ago that things would sort of steady off for newspapers and they would be on their way back up,” says Rick Edmonds, media business analyst for the Poynter Institute. “But erosion of advertising continues.”

Partly to cushion these blows, media companies consolidated. A few large chains such as Gannett, McClatchy, and E.W. Scripps now own the majority of the nation’s major dailies.

With corporations, “The advantage is there are more people, so the risk in one market can be balanced with another,” Abernathy says. “The disadvantage is, in the long run, the obligation to shareholders trumps what may be the journalistic needs in a specific community. Or resources may be funneled to the community that has the highest needs.”

Consolidation is occurring on a smaller scale in the alternative press. It takes two forms. One model is the chain of weekly or niche papers, such as SouthComm, owner of the Nashville Scene, Washington City Paper, CityBeat in Cincinnati, and the Creative Loafing papers in Atlanta and Tampa, among others.

A second phenomenon is major daily newspaper chains buying up weeklies, either to diversify their portfolios or to eliminate competition. That’s what happened in Knoxville when E.W. Scripps Co., which owns the News Sentinel, bought Metro Pulse in 2007 and then closed it in 2014.

This trend has played out even in much larger cities. The Chicago Reader, one of the country’s leading alternative weeklies, was sold to the parent company of the Chicago Sun-Times in 2012. The Baltimore Sun Media Group, which owns that city’s daily, bought the city’s weekly, the City Paper, in February 2014. Both survive, so far. But some argue such buyouts steal the edge and kill the spirit of the alt-weekly.

“When the local chain daily-newspaper owner buys up the alt-weekly, it’s no longer an alt-weekly. It’s a joke,” says Dan Kennedy, who spent 14 years covering media for the weekly Boston Phoenix. He is now a Northeastern University journalism professor and author of the Media Nation blog.

Read Local
Alt-weeklies have found some traction in the struggles of big dailies. When those papers cut staff and distribution, alternative weeklies gain readers, Abernathy says.

Shackleford says the strongest alternative weeklies in recent years have been in small- to medium-sized markets with less media competition. They are also doing well in conservative states, “often because they are the only beacons of progressive thought,” she says.

Layoffs at daily newspapers may squeeze local news coverage, Shackleford says, providing alt-weeklies an opportunity.

“And all things local are hot again,” Shackleford says, adding, “Thank you, hipsters,” referring to young urbanites who’ve driven the nationwide farm-to-table and buy-local trends. “We lived and died by local the whole time. I mean, we’re like Barbara Mandrell—country before country was cool.”

Yet alt-weeklies have struggled, too. Although these publications were free long before the Internet, the loss of classifieds had a big impact on papers that once cornered the market on apartment-rental listings, Kennedy says. And the once-ubiquitous personal ads were a source of reader entertainment as much as self-help.

Kennedy says a second major problem for alt-weeklies has been the demise of a certain type of independent local business. The closure of record stores, book shops, and other outlets that catered to hip, young readers left both fewer advertisers and fewer places to distribute papers.

The alt-weekly landscape has shrunk significantly as a result. Last October alone, not only did Metro Pulse close, but so did several major alt-weeklies. The 48-year-old San Francisco Bay Guardian was shut down by its new owner, San Francisco Media (which also owns the daily San Francisco Examiner). The 36-year-old Providence Phoenix became the second alternative weekly to fold within a chain of papers owned by Stephen Mindich, who had shuttered the flagship Boston Phoenix in 2013 after a 47-year run.

Kennedy lists the Phoenix, the Bay Guardian, and New York’s Village Voice as the “granddaddies” of the alt-weekly world. Only the Voice survives—but media reports indicate its owner, Voice Media Group, is considering the sale of its publications.

Knoxville’s reaction to losing its alt-weekly last fall—a rally at Krutch Park, donations of more than $60,000 to a Kickstarter campaign to replace it—seems to have been be a bit unusual. Kennedy says Bostonians were angry when the Phoenix shut down, but the city is so “media rich” that residents had lots of other options. And both Boston and San Francisco boasted two alt-weeklies.

After the Bay Guardian went dark, some of its former staffers raised $25,000 in a crowdfunding effort to publish a commemorative edition and explore reopening the paper under new ownership. That final paper published in January, but talk of its resurrection has faded.

Some argue the time has passed for the alt-weekly, or print publications in general.

“Putting a new product out there could be wise, but the notion it should be primarily print probably goes in the face of where it should be heading,” Abernathy says. “You’ve got to start thinking, ‘How are my readers going to be consuming this news in five or 10 years?’ If you don’t bring your readers, you don’t bring your advertisers.”

Kennedy said he thinks hyperlocal online publications, like the New Haven Independent, featured in his recent book The Wired City, will fulfill the traditional role of alt-weeklies.

“The alt-weeklies have had their day, and it’s over. And at least here, we’re moving on,” he says.

Surrender the Profits
The New Haven Independent is among a growing number of nonprofit online journalism startups. Of the 100 publications that are members of the Institute for Nonprofit News, three-quarters are eight years old or younger, says CEO Kevin Davis. Only four produce a print product, and just one, the San Francisco Public Press, is a community newspaper.

Historically, nonprofit newspaper ownership was rare. One of the first was The Day newspaper in New London, Conn., whose publisher willed it to a public trust in 1938. The best known nonprofit newspaper owner is the Poynter Institute, whose daily Tampa Bay Times (formerly the St. Petersburg Times) is known for its quality writing and Pulitzer Prizes. Revenue from the Times long fed the institute, but neither has been performing well financially in recent years.

Still, nonprofit ownership does insulate a paper from the demands of shareholders and from being bought by another company, says Poynter’s Edmonds. Davis says nonprofit newsrooms function just like their for-profit counterparts, but with a fundamentally different vision. “A for-profit’s mission is to make money and to return profits to shareholders. And the nonprofit’s mission is to serve a community and invest in their community.”

Others point out the downside.

“Nonprofit news is an interesting idea, but you’re sometimes more beholden to your funders,” says Shackleford, who used to work for leading nonprofit news site ProPublica. “They don’t have that same understanding of the relationship as the advertiser does—which is strange, but I’ve seen it happen over and over again.”

Many point to the nonprofit digital journalism site the Lens, which became important in New Orleans as the city’s daily cut publication to three days a week. Late last year the Lens found itself out on the street after it published a story critical of the president of Loyola University, which had been providing the Lens free office space. It relocated but had to divert most of its reporting budget toward rent.

There are ways to avoid inappropriate influence from donors. Davis says the Institute for Nonprofit News recently created a conflict-of-interest and editorial-independence policy it is recommending to all its members. He thinks major foundation funders should be asked to sign it.

“It says thank you very much for your money, and no, you get no special access,” he says.

Mary Walter-Brown, publisher of the Voice of San Diego website, says transparency also helps relieve fears about donor influence. On its website, the Voice lists all its donors who contributed $5,000 or more, and how much they gave.

In addition, the Voice pursues many types of income to prevent it from relying too much on particular donors. Walter-Brown says her goal is for a quarter of the organization’s income to come from each of four buckets: philanthropy, small donations, community partners (like corporate sponsors), and individual memberships.

Diversifying Revenue
This variety of income sources is the key to nonprofit success, say Shackleford and Davis. Both say a common problem among nonprofits is relying on three-year foundation grants, which are rarely renewed.

“You should constantly be exploring at least one new type of revenue, or you’re dead in the water,” Shackleford says.

The for-profit alt-weekly the Austin Chronicle, founder of the SXSW music and film festival, is the poster child for making money from events. Some newspapers are also offering business services, such as website design or marketing.

Davis says members of the Institute for Nonprofit News diversify their incomes through sponsoring events, offering mobile apps, subscription services, training, or outsourcing.

But Davis says he thinks the key to long-term success lies in readers paying for the product somehow. That could be through memberships (like the public broadcasting model), buying podcasts, or paying a monthly fee for access to certain content or for news emailed directly.

“Unfortunately, the fact is the reader hasn’t paid for 200 years,” Abernathy says. “One of the hardest things for editors and journalists to understand is that getting people to pay for what it actually costs to produce the news is really hard. The failure rate is above 90 percent for startups.”

But some papers find readers willing to pay. When the alt-weekly Arkansas Times was faced with a huge revenue loss in 2013, it put its popular daily blogs behind a paywall. Many of the Times’ blogs have been dropped, but the paper’s politics and news blog is so popular that traffic has grown despite the $10 monthly fee, says editor Lindsey Millar. The paper’s online revenue now makes up about 20 percent of its income, but the Times is “the only free print paper I know with a paywall,” he says.

The Voice of San Diego recently revamped its membership program, offering a variety of perks at different giving levels. These aren’t free mugs and T-shirts. Walter-Brown says the Voice found ways to put a dollar value on its core strength: experience and access.

For example, donors are invited to monthly coffee clubs or happy hours with reporters and receive emailed previews of big investigations before publication. Walter-Brown says membership has almost doubled since the Voice honed and publicized its membership program.

For a shot in the arm, news organizations are using online sites like Kickstarter to request donations. The Knoxville Mercury used this crowdfunding approach to launch the paper after Metro Pulse closed.

“That’s when these kinds of community outpourings are effective,” Davis says. “You’ve got a community that’s like, ‘Wait a minute. We had something good, and now it’s gone, and that’s a hole that needs to be filled.’ What we don’t yet know is how many times you can dip in that well.”

Davis sees crowdfunding working best for supporting projects, not ongoing coverage. For example, it might work to pay for measuring pollutants in a local river, but not for a long-term environment reporter.

San Francisco Public Press last year doubled its distribution network after raising more than $21,000 plus a $10,000 matching grant for its Pedal Powered News project. The money bought bike trailers and paid newsies to deliver its quarterly newspapers by bike.

The Arkansas Times teamed with Inside Climate News in 2013 to cover a major oil spill, using crowdfunding to cover the cost. The resulting stories led to free health screenings for neighbors affected by the spill.

While it remains to be seen whether nonprofit journalism is likely to be a widespread solution to the industry’s economic problems, the nonprofit approach may be the answer for some.

“The model appeals greatly to news organizations and journalists that believe in the Fourth Estate and holding the bastards accountable and keeping democracy free,” Davis says.

S. Heather Duncan

S. Heather Duncan has won numerous awards for her feature writing and coverage of the environment, government, education, business and local history during her 15-year reporting career. Originally from Western North Carolina, Heather has worked for Radio Free Europe, the Institute for War and Peace Reporting in London, and several daily newspapers. Heather spent almost a dozen years at The Telegraph in Macon, Ga., where she spent most of her time covering the environment or writing project-investigations that provoked changes such as new laws related to day care and the protection of environmentally-sensitive lands. You can reach Heather at heather@knoxmercury.com

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