Tough times at the Globe; newspapers still figuring out the internets

The Herald has a couple of stories today on the financial problems the Globe is suffering, and the possibility of further staff cuts at Morrissey Boulevard.

One of the articles, which I can’t find on the Herald’s website (but is on p. 2 of the print version), reads in part:

The Boston Globe dragged down the financial numbers of the New York Times Co. with a huge drop in ad revenue last month that one analyst described as “a disaster” and the worst he’s seen among major U.S. newspapers.  “It’s pretty nasty numbers,” said Ed Atorino, managing director of investment firm Benchmark Co., referring to a 12 percent revenue plunge in February by the Times’ New England Media Group, made up overwhelmingly by the Globe…. The Times Co. is apparently eyeing staff reductions and other cost-cutting measures at the Globe.

The article notes that part of the explanation for the dramatic drop last month could be the merger of Macy’s and Filene’s parent companies.  Goldman Sachs reacted negatively to the NYT’s earnings report, noting that it was “trimming” its estimates for the NYT, and recommending an “underweight position in the newspaper group.”

There’s also a column on the Herald’s business page with further speculation on what might be happening at the Globe:

Rightly or wrongly, the question being asked in the newsroom down on Morrissey Boulevard right now isn’t whether there are more job cuts coming.  It’s how many.  “Janet Robinson was in town this week, and Arthur Sulzberger is coming next week,” as one staffer put it to me yesterday, “so it can’t be good news.”  Robinson is the Times’ CEO, Sulzberger the chairman. 

You’d be hard pressed to find any good news at the Globe right now.  Certainly not the latest financials. Nor the New York Times share price, which fell yesterday to its lowest level in nearly eight years.  Nor a warning from Moody’s that it may soon downgrade the company’s debt.

And here are some interesting observations from the same column:

[Globe general manager Mary] Jacobus is not alone. Everyone running a newspaper knows what the future looks like: Someday, papers will all be delivered and read electronically.  But they don’t know how to manage the transition, while print-based revenues sink and online revenues only slowly creep up.  If she cuts truck drivers and printers, she’ll hurt the paper’s sales today and tomorrow. But if she cuts reporters and editors, she will damage the Web site, the future of the business….

The least valuable content? Opinion.  The blogosphere produces little news, but it is proving that anyone can produce mere vaporware.  Maybe that’s why 17 million people visit The New York Times’ Web site each month, but so far only 171,000 have actually paid up for the privilege of reading columnists like Thomas Friedman, Maureen Dowd and Paul Krugman.

Want more on how newspapers and the internet do or don’t work together?  Good, because it seems to be a hot topic today.  Check out this long and very interesting article at Editor & Publisher about the various ways newspaper operations are trying to integrate the internet into their operations.  Or this one about Molly Ivins’ recent column diagnosing and prescribing various cures for what ails the newspaper industry.  Or this interesting Pew survey showing that local TV remains most Americans’ primary news source, followed by national TV and radio, and that among internet users the internet comes in fourth for broadband users but fifth for dial-up users (fourth place for them goes to newspapers).

This is a huge and fascinating topic.  Newspapers as we have known them in the past can’t last forever – as the Herald columnist quoted above said, someday it’ll all be electronic.  But when will that happen?  And what will it mean for them, and for us?

Please share widely!

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