Advance Publications Mid-Year Performance a Mixed Bag

July marked a rash of self-assessment by the newspaper industry, including by the local newspaper division of Times-Picayune owner Advance Publications.

Randy Siegel, president of Advance Local, twice annually pens an assessment of the Advance_Localcompany’s progress toward becoming a “digital first” company. His update is ostensibly for employees, but is publicly available on the Advance Local website, and often scrutinized by analysts. His July 16 report is unsurprisingly upbeat, but Poynter Institute’s Rick Edmonds deciphered Siegel’s report and finds that despite Advance’s head start in the digital-first foray, the company is “in the same boat as its peers — needing to serve two different audiences with very different platform preferences for some years to come while inventing a future of their organizations.”

As Edmonds notes, Siegel acknowledges that Advance Local has fallen short of its goals:

“We still have a long way to go … Our business-to-business sales initiatives, while growing well in terms of year-over-year percentage growth, are a fraction of what they should be. While our mobile and video ad revenue gains have also been stellar in terms of year-over-year percentage growth, they should be increasing at a much faster rate given our level of investment.”

poynter_logoEdmonds also notes that “Siegel backed off his claim of six months ago that digital ad gains this year will surpass print losses,” conceding that newspaper declines have been “steeper than we budgeted for.”

Edmonds highlighted some areas where The Times-Picayune and other Advance newspapers are likely saving money when compared to other newspapers, and others where they are losing out on revenue opportunities. Of note:

  • Advance is likely saving money on production and delivery expenses because most Advance newspapers (including the Picayune) are producing and distributing fewer newspapers (three a week during non-football season in New Orleans).
  • Payroll expenses are also likely lower after wholesale reductions in most Advance newsrooms, including the Picayune‘s. The company counters that it subsequently hired a lot of digital-savvy staff, but those employees are, by-and-large, younger and likely less-expensive than the veterans who were terminated during the 2012 mass reductions, and are receiving more-modest fringe benefits. Rumors abound that more staff cuts will come in New Orleans later this year or in early 2016.
  • While three-quarters of newspapers now charge non-subscribers for digital access, Advance has stuck with an advertising-supported, free-access website model. That means Advance isn’t reaping online subscription revenue, or additional revenue from higher print subscription and single-copy prices that most newspapers have been able to charge.
  • On the flip side, Advance is likely avoiding the worst of industry-wide print advertising losses because most ad schedules and nearly all of the more lucrative pre-print insert advertising are still appearing on the days its newspapers publish print editions.

Siegel told Edmonds that Advance’s digital audience continues to grow — a 34% year-to-year increase in unique visitors for the first half of 2015. Quantcast currently ranks all 12 Advance sites combined as the 68th most-trafficked “network” on the web. NOLA.com is 449th, and sixth among Advance’s newspaper sites.

Edmonds adds that declining digital ad rates and continued domination by Google and Facebook probably mean digital ad revenues aren’t what Advance hoped for. “If Advance miscalculated, I’m guessing it was in the hope that loyal seven-day print readers could be brought along to the website as a substitute on non-print days,” he concludes, before citing what he calls “surprising research” by the Newspaper Association of America last year that a majority of print subscribers never access their newspaper’s digital sites.

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Just in Time for Katrina@10, Times-Picayune to Cut More Staff

Banner story in The Times-Picayune four years ago today by newly named publisher Ricky Mathews, promising the-then 175-year-old newspaper and its newer website would remain a fixture in New Orleans.

As New Orleans prepares to commemorate the 10th anniversary of Hurricane Katrina on Aug. 29, most media watchers assume The Times-Picayune will produce its own retrospective on the sacrifice many of its staff made in chronicling the storm and its aftermath, work that led to two Pulitzer Prizes, countless other national and international awards, and worldwide praise.

Instead of somber contemplation about the greatest natural and engineering disaster in U.S. history and the newspaper’s role in documenting it, it seems that remaining employees at the once-revered 178-year-old publication will be consumed with avoiding the ax as staff cuts once again strike the operation.

Alternative Gambit Weekly reported today that Director of State and Metro Content Mark Lorando this week met with small groups of employees about the coming layoffs, describing them to at least one colleague as “deep.”

“They’re being pretty upfront,” one newsroom staffer told Gambit Editor Kevin Allman, who along with The New York Times’ late media reporter David Carr, led coverage of the 2012 dismantling of the newspaper. Another T-P staffer joked grimly to Allman that it may be “2012 redux” — referring to when hundreds of Times-Picayune employees, freelancers and contractors lost their livelihoods in support of corporate owner Advance Publications’ new “digital first” strategy.

An estimated one-third of Times-Picayune employees lost their homes because of flooding caused by the region’s failing levees in the aftermath of Katrina. (Katrina is a major character in Hell and High Water, and Chapter 4 is devoted to the response to the storm by The Times-Picayune’s staff and its role in the newspaper’s contemporary legacy. The book also details the company’s regular invocation of Katrina when defending or explaining the need for digital first, references that more than irked many employees and the community.)

Many Times-Picayune reporters and photographers lauded for their coverage of Katrina and its aftermath were laid off during the 2012 purge, and many more either left the market or business, or jumped ship to join The Advocate newspaper of Baton Rouge after it was acquired by New Orleans billionaire John Georges and expanded into New Orleans later that year. (Those defections are detailed in Chapter 5 of the book.) About 50 now listed on NOLA.com’s online staff list remain from 2005.

The latest restructuring will occur “in the latter half of 2015” – perhaps around the time of the Katrina anniversary – and be completed by early 2016, “sources with knowledge of the plan” told Allman.

Because of the company’s preoccupation with website traffic to NOLA.com, the 2012 layoffs spared functions generally responsible for generating the largest share, namely sports, features and entertainment/arts. However, it appears there will be no sacred cows in the coming layoffs, Gambit reported, although it’s unclear whether duplicate positions in New Orleans and Alabama, like copy editors, will be consolidated, perhaps at corporate owner Advance Publications’ newspapers in Mobile or Birmingham. (Much of the Picayune’s copyediting operation – once the quality control hub of newspapers – was eliminated in 2012. Careful readers regularly detail mistakes and errors that plague the website and printed edition, sometimes serious blunders that historically often would have been caught and corrected by copyeditors before publication.)

“Also unclear when it comes to the [impending layoffs]: how much weight will be placed on each writer’s ‘clicks’” — a count of how many reader views a reporters’ stories garner — “which are closely tracked within NOLA Media Group,” Gambit reported.

The alt-weekly’s report followed one on NOLA.com Monday (June 15) in which the company announced its operations in Louisiana, Mississippi and Alabama would be consolidated into Advance’s newly established Southeast Regional Media Group. In addition to The Times-Picayune, Advance owns the Huntsville Times, Birmingham News and Mobile Press-Register in Alabama, and the Mississippi Press, along with scores of other newspapers around the country that largely also have been subjected to “digital first.”

Although NOLA.com’s story didn’t specify where the new regional operations would be headquartered, Gambit reported that most T-P staffers expect it to be in Mobile. Last fall, the company announced that the newspaper will shutter its presses in favor of printing the newspaper on the Press-Register’s presses some 145 miles away, beginning later this year or early in 2016. Those layoffs or jobs transfers are either still underway or recently concluded, according to social  media posts from friends of those employees. That move will cost The Times-Picayune another 100 jobs and prompt closure of the newspaper’s  building and iconic clock tower along the city’s Pontchartrain Expressway. Once all operations have been relocated, execs have said the building will probably be donated to a New Orleans nonprofit.

An operational move to Mobile also makes sense because Ricky Mathews, president

Fliers that popped up around town shortly after Mathews' was appointed publisher of The Times-Picayune in 2012.

Fliers that popped up around town shortly after Mathews’ was appointed publisher of The Times-Picayune in 2012.

and publisher of NOLA.com | The Times-Picayune recently promoted to head the new regional company, has a long history on the Gulf Coast, and operating expenses are probably lower there. Mathews has been widely vilified in New Orleans since arriving in 2012 to oversee the newspaper’s draconian transformation, and in the understatement of Gambit‘s latest report, has “failed to ingratiate himself among the rank and file.” (Chapters 6 and 9 in the book deal specifically with Mathews’ rocky tenure in New Orleans, and his earlier career in Mobile and Biloxi, Mississippi.)

However, “whatever detractors say about the print-to-digital swing in New Orleans, the company is happy with the job Ricky Mathews has done there,” said Rick Edmonds, media business analyst at journalism think tank and continuing education center Poynter Institute said Monday.

Poynter.org: Advance claims digital ad growth will outpace print declines in 2015

Advance_LocalIn his biannual letter to employees, Advance Local President Randy Siegel, the highest-ranking non-Newhouse family member in the Advance newspaper digital hierarchy, says the company is “poised to achieve a critical crossover point in 2015: digital advertising gains will exceed print newspaper ad losses,” Poynter Institute researcher and writer Rick Edmonds reports.

Randy Siegel

Advance Local President Randy Siegel

Underscoring that Advance’s New Orleans property isn’t the only one that loves to invoke marketing-speak when talking about its business, Siegel reports, “Our local sales and marketing teams have leveraged their entrepreneurial abilities and expansive digital knowledge to prove they can grow digital ad revenue faster than we’re losing print ad revenue. In 2015, our local leadership teams plan to generate higher total ad revenue in every one of our markets, reversing a longstanding trend of decline.”

Advance Local’s sites have averaged 55% traffic gains year-to-year, as measured by comScore, Siegel wrote, with Cleveland.com and SILive.com (Staten Island) more than doubling their audiences year-to-year in November.

Advance Local’s lofty prognostications aside, Edmonds reports that based on the aggregate results of publicly traded newspaper companies through the first three quarters of 2014 (many company’s fourth quarter’s results won’t be reported until next month), the yearlong results are expected “to show total revenue at most companies and the entire industry down again.”

“Other newspaper/digital companies may also be able to achieve revenue growth in 2015, though to my knowledge, Advance is first to make that promise.” Poynter Institute’s Rick Edmonds

Advance is a privately held company and consequently is not required to report the same level of detailed financial and operational data that publicly traded companies must disclose.

Edmonds notes that while Siegel’s letter highlights digital advertising, it doesn’t mention circulation revenue, which while a falling line item at almost all newspapers, is still a significant contributor for many. Add to that the fact that Advance’s newspaper websites are free, meaning they don’t reap digital subscription revenues the way a number of prominent newspapers now do.

And by publishing and/or home-delivering print newspapers fewer days in most of its markets, Advance has foregone print or bundled subscription price increases that “most of the rest of the industry” has enjoyed, Edmonds noted, adding that the industry overall saw successive 5% circulation revenue gains in 2012 and 2013, the most-recent available figures.

He does note that Advance has been right on two predictions: Newspaper “digital ad revenues could grow from a small base, and that print declines were irreversible. And in theory, it now has leaner operations well-positioned for growth into the future.”

Despite the thousands of jobs across the country that Advance has eliminated as part of “Digital First,” Siegel hinted that operations aren’t yet lean enough. “… this journey will take a little longer and be a little harder than we originally anticipated, which is why we continue to need to recalibrate our expenses,” he wrote.

Via Poynter, my take on post-daily newspaper mediascape in NOLA, Alabama

I freelanced a lengthy (for the Web, but nothing after writing a book) take on the fractured media landscapes at The Times-Picayune and the three Advance Publications’ newspapers in Alabama.

You may read the report by clicking here.

First Hell and High Water interview – on Nevada Public Radio’s “State of Nevada”

My current home of Las Vegas is having its own newspaper woes with the internal squabbling within one of the region’s wealthiest families, putting itsImage #2 newspaper in peril. I joined a panel of Las Vegans and media industry experts to talk about the role of the daily newspaper in the civic common and what it may mean for Sin City if it becomes a one newspaper town.

You may listen to an archive of the broadcast, which aired Aug. 23, at this link.