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Wednesday, February 26,2014

USA TODAY comes to town

Behind the expansion of pages in the Lansing State Journal is a strategy to boost advertising revenue for Gannett’s flagging national newspaper. But at a cost.

by Mickey Hirten
The Lansing State Lansing joined the USA TODAY rescue mission this week.

Gannett Co. Inc.’s troubled national newspaper is rapidly expanding its once shrinking circulation base by adding a slimmed-down version of its national edition to the company’s local newspapers. Fortified by the LSJ’s 34,333 daily and 50,167 Sunday print subscribers, it is a move that allows USA TODAY to reclaim bragging rights as the nation’s largest newspaper.

What it means to Lansing State Journal readers is a USA TODAY “Lite” section in the newspaper each day, with extra sports page articles and extra feature coverage on Sunday.

The addition has been well received by readers in other communities. It addresses what even the casual reader recognizes: Local newspapers like the LSJ have gotten pretty thin.

What it doesn’t address is how the endless cycle of staff cuts has handcuffed the news department’s ability to provide local news to their readers. Ultimately it’s high quality local news coverage that gives value to a community’s newspaper, and this requires journalists — reporters, copy editor, photographers, web producers and editors. More on this later.

The marriage of USA TODAY and Gannett’s local newspapers removes from sites like the LSJ any real control of the national or international news it offers readers. But considering the smaller staffs, limited space and the general news interest of most local newspaper readers, Gannett is making a good decision.

But will it succeed? Boasting that it has the largest circulation of any newspaper matters only if large national advertisers decide they will support USA TODAY and all of its Gannett cousins. Pick up a USA TODAY and you’ll find that there aren’t many ads. The sections appended to local newspapers are so far advertising free. The merger of USA TODAY and Gannett’s community newspapers really just bundles differently what the company could do all along — sell advertising in its print and broadcast businesses. Gannett isn’t really offering more subscribers to advertisers. Rather, it is packaging the subscriber audience differently, under the USA TODAY brand. And here’s the challenge. If it was easy to sell Target or United Airlines the full portfolio of Gannett products, it would have done it.

More immediately, the added USA TODAY pages will allow the company to increase the price of its newspapers. “As we enhance and add new products, our customers tell us they are willing to pay for the added value that we are providing,” Bob Dickey, president of Gannett’s U.S. Community Publishing division said in a Dec. 11, 2013, article in netnewscheck.com. With the steady decline in advertising, many newspaper companies are offsetting the losses with higher circulation revenue.

Price hike and staff cuts For Lansing State Journal readers, there is a different take on Dickey’s remarks: They paid for the added value before they got it. In the middle of 2013, Gannett abruptly — and without any enhanced or added new products — increased the published price of the newspaper from $23 to $37. In essence, LSJ subscribers have prepaid for their new USA TODAY sections.

And the higher price came with less news coverage. During 2013 the Lansing State Journal cut nine newsroom positions, a bit less than 20 percent of its staff.

It eliminated its watchdog columnist, the Sunday/Features editor, a state reporter, a breaking news reporter, an unfilled reporting position, a sports copy editor, a senior copy editor/staff grammarian, the digital news director and the executive editor — more than a $500,000 in payroll.

(Disclosure: I was executive editor at the LSJ from 2001 until 2013 and had worked for Gannett newspapers since 1988.)

Cutting positions is a way to help cover the expense that 70 extra pages of USA TODAY additions impose on the LSJ’s budget. Last year, a single page of newsprint at the LSJ cost about $200. With 70 pages a week, the added cost could top $700,000 a year. Multiply this cost by the larger and smaller newspapers across the Gannett empire and it’s a serious expense that will ultimately pass down to the local operations. If Gannett begins shaving pages from its USA TODAY sections or orders up more staff cuts, the strategy probably isn’t working.

It has been evident for years that USA TODAY needed to so something to arrest its slide. Much of what made the newspaper special has supplanted by smart phones and tablets. In 1995 or even 2005, if you were traveling, USA TODAY was a reliable companion, a consistent way to stay connected with news, sports, features and finance. It pretty much owned this market.

But the digital revolution has changed that. You like sports, the Detroit Tigers, maybe? Start with the big picture at espn. com, then to mlb.com, next to tigers.com and end up a justinverlander.com. Big picture or small picture, all of it on your phone. It’s the same with news, features and finance, other USA TODAY specialties. There endless choices for news. And USA TODAY as a newspaper competes with it owns digital site, one of the most popular on the web.

Steep circulation decline The latest report from the Alliance for Audited Media, which tracks newspaper circulation, reported USA TODAY print circulation of 1,316,865 for the period ended Sept. 30, 2013. It sounds like a lot of papers, but the slide has been dramatic. Print circulation reported in Sept. 2012 was 1,627,526. In March 2011. it was 1,829,099. That’s a loss of a half million papers in just three years.

By counting the circulation of the newspaper publishing its new daily sections, USA TODAY will add more than a million users to its base, which it combines with digital users — an accounting used by all news organizations now — produces a circulation claim of more than 3 million.

Its bragging rights are aimed at The New York Times and Wall Street Journal, both national newspapers and journalistically much better newspapers than USA TODAY. They invest in people. The Times in 2012 employed about 1,150 journalists. The Wall Street Journal together with Dow Jones News Service claimed more than 2,000 journalists in 85 news bureaus across 51 countries. USA TODAY on its web site lists just 251 on its editorial staff, but it may not matter.

People like USA TODAY “People like the product, unlike the local newspapers that misspell their names,” said John K. Hartman, the author of two books about USA TODAY and a journalism professor at Central Michigan University. He endorses the direction that publisher Larry Kramer is taking the newspaper, a change from a few years ago when Hartman was so down on USA TODAY that he predicted it would end its print editions.

The news business, especially newspapers, is desperate to find some equilibrium that can sustain profits and preserve its business franchise. Consolidating operations — the USA TODAY sections, for example — is one way of shaving costs. And it happens on a smaller scale.

The LSJ and Gannett’s other Michigan newspapers are being drawn ever closer to the Detroit Free Press and to one another. LSJ readers can expect to be well informed about happenings in Battle Creek, Port Huron, Livingston County and Detroit, stories shared by these organizations under the Gannett Michigan credit line. Stories from these newspapers will supplement local staff reporting, particularly in the LSJ’s front section, which is now larger in order to accommodate the printing press requirements for the USA TODAY section.

Fortunately for readers in Greater Lansing, the LSJ has excellent journalists committed to their craft and communities. But it doesn’t have enough of them, and they are stretched between the orders from Gannett to produce unique and sophisticated local reporting, investigative reports, breaking news to feed the web and local news to fill the front section that used to carry national and international stories.

There are challenges at every turn in the newspaper business today. Still, Hartman suggests that the new USA TODAY plan could boost the fortunes of Gannett and its newspapers. “If the USA TODAY drag on Gannett’s finances helps turn around its financial fortunes this could take some of the pressure off the locals that have been subsidizing it,” he said.

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