The gloom began earlier this month, when Gerard Baker, the editor in chief of The Wall Street Journal, sent a memo to employees that said, in part, “every story should be as short as it needs to be.” The next week, William Lewis, the chief executive of Dow Jones, which owns The Journal, announced a newsroom review that he said would be “underpinned by a series of cost-management initiatives.”
Two days later, on Oct. 21, the anvil fell: Mr. Baker informed employees in another memo that The Journal was looking for a “substantial” number of them to take buyouts, and that layoffs were in the offing.
With print advertising continuing to drop precipitously, you would be hard-pressed to find a newsroom devoid of uncertainty anywhere in the country. Companies like Gannett have recently announced layoffs, and its stock price has plunged during a monthslong pursuit of the company that owns The Los Angeles Times and The Chicago Tribune. The New York Times recently went through buyouts and has acknowledged that its newsroom will get even smaller next year. And for journalists at The Wall Street Journal, anxiety in the last several weeks has been especially pronounced.
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Across the country, those working in the newspaper industry are fretting as the end of the year approaches. Driving much of the anxiety is a steep drop in print ad revenue, once the lifeblood for newspapers. Spending on newspaper advertising in the United States is projected to fall 11 percent this year, to about $12.5 billion, according to the Interpublic Group’s Magna.
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At the same time, digital advertising and other forms of revenue have been slow to pick up the slack, leading news companies, including The New York Times, The Guardian and Gannett, the owner of USA Today, to cut costs by downsizing.
“More and more publishers are coming to the recognition that there’s a new normal,” said Alan D. Mutter, who teaches media economics at the University of California, Berkeley, and writes about the media on the blog Reflections of a Newsosaur. “And the new normal is not nearly as nice as the old normal was.”
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Across the industry, similar declines in print advertising coupled with the shift to digital and, increasingly, mobile, are driving newspaper companies to reconfigure their newsrooms.
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The Times has also announced its intent to make subscriptions the driving source of its revenue, an acknowledgment that newspaper advertising, both print and digital, can no longer be counted on to finance the company’s journalism on its own.
The New York Times Company, which will report its third-quarter earnings on Wednesday, said in August that its print ad revenue had fallen 14 percent in the second quarter. Digital advertising revenue dropped 7 percent.
PG never likes to see people losing their jobs.
He included this item to demonstrate the great power of disruptive technology to affect some of the most established publishing institutions in the United States.
Book publishers are not immune to the same types of disruption. PG suggests that being contractually bound to such institutions under long-term contracts is a risky idea.