VC Reporter – January 22, 2009

Media outlets under new pressure to survive

By Paul Sisolak 01/22/2009 – VC Reporter

It’s uncertain which industry outside of finance and banking suffered the most in the wounded economy of 2008, but one thing is for sure — the media world has been hit hard nationwide, with layoffs abundant at news outlets, closures imminent, subscriptions down and advertisers fallen off.

Locally, Ventura County’s daily paper underwent some significant downsizing in terms of both staff cuts and lowered page counts, while the weeklies of the area, including at least one new publication, weathered the economic storm with relatively little damage to their infrastructures. It was radio that remained relatively unscathed.

Is it something about the airwaves? It could be, but what the economy couldn’t touch was listenership, according to one official from a county-based radio network.

“It’s unaffected by the economy. It has no effect on listenership,” says Chip Ehrhardt, executive vice president of Gold Coast Broadcasting in Ventura.

In fact, Ehrhardt said, tough economic times help radio.

“In one regard, one could argue a news talk station is positively affected because people want to know what’s going on,” he noted.

Ehrhardt refers specifically to one of the network’s three AM-frequency stations, which fared well in the final quarter of 2008. According to demographic data provided by Ehrhardt, in the last 12 weeks of the year, Gold Coast calculated that 219,000 listeners aged 12 and older tuned in to its KVTA-AM 1520 station, in the greater Ventura/Oxnard metro area.

Of course, with music the dominating factor behind FM programming, the numbers were even higher last quarter for Gold Coast’s three FM stations: 693,000 for KCAQ, and 378,000 for KFYV, for example. Reflecting the fact that the service is free, Ehrhardt says radio is something people will choose more often than not over its satellite counterpart, which charges subscription fees.

“Radio is a free utility, it’s always there,” he said. “People grew up with it; they didn’t have to pay for it when they grew up. The economy certainly wouldn’t be helping satellite radio. People don’t want to pay.”

The lack of subscription charges helps free newspapers in no small part; it’s advertising revenue, the lifeblood of a free paper, that has lacked.

“During the Christmas season, people didn’t seem to be advertising as much or be willing to invest in it,” says Loran Lewis, publisher of the 12,000-circulation Hueneme Pilot, a Port Hueneme-based publication that debuted in the fallen off.

“A lot of people told me I was crazy … for starting up in a recession,” he said. “Right now we’re holding our own. We’re doing as well as can be expected.”

Jim Rondeau, the programming director at Cal Lutheran University’s radio station, KCLU in Thousand Oaks, believes shifting preferences in technology impact print mediums the most.

“I don’t believe people are shunning newspapers,” he said, “but I believe they’re shunning print newspapers. My experience has been people are reading their favorite newspaper online. So it’s not an issue of them valuing the news service it provides; they just don’t want the old paper-and-ink format.”

So if the message to struggling news outlets is to get on the World Wide Web if one wants to survive, should print be abandoned altogether?

Not entirely, says Tyler Suchman, publisher of the Web-only Ojai Post, and president of Tribal Core, an online marketing firm.

“It becomes more about building and nurturing your community and providing the information they’re interested in, and less about the vehicle you use to distribute that information,” he said. “It’s more a matter of finding the right balance and not cannibalizing your existing revenue stream (print) while you migrate to a digital revenue stream.”

There are myriad ways to increase a publication’s Web visibility, be it through blogs, message boards or a stronger presence in the online social networking community, but Suchman warns against going totally digital because the money in paper advertising still boils down to the print format — the purchase of page space or the supplemental insert that can’t be duplicated on a Web site.

“Whatever you do in your online strategy needs to be in alignment with your business goals,” he said. “I think it’s a tricky balance for [print outlets] because it’s much more difficult to monetize viewers on the Web compared to the rates you get in monetizing them in the print editions.

“There’s the challenge,” he continued. “One hundred thousand readers of a print publication are more valuable than 100,000 readers online, just because of the mechanics of advertising.”

Print has a difficult time keeping up with the cultural demands of staying current, too.

“The issue they have is the model newspapers and all mass media in general was developed upon is out of sync with the times among younger people,” says Tim Gallagher, president of Gallagher 20/20 Consulting in Westlake Village and former publisher of the Ventura County Star. “In order for them to succeed in the long term, it involves adapting the business model to how consumers want the news these days.”

However, he says, jumping on the Web shouldn’t come at a sacrifice of accuracy in news reporting.

“I think it’s critical …that the people running these companies figure this out,” Gallagher adds. “Journalists are important to America because they go through a process of vetting info that social networking doesn’t do efficiently.”

Like most papers trying to become more hip to the Web, Lewis of the Hueneme Pilot believes the transition is harder — and will take longer — than people think

“Everybody expected when Web burst on the scene, print would be dead,” Lewis says. “The problem is nobody’s really developed a solid, workable plan for print newspapers to make money from their Web sites. The Web sites have really been parasites from the print edition.”

Lewis believes the Web will eventually take over, “but I think print is going to stick around longer than people think. It’s always going to have a niche following. People like to pick it up and go to it.”

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