Two Newspaper Models: Microlocal success, large market challenges

WASHINGTON, D.C. – The latest evidence of financial viability of microlocal news comes from an article in the Wall Street Journal describing the Register-Star, a successful newspaper in Hudson, a town in Columbia County, New York.

The formula is a familiar one: “a rich diet of local politics, education news, crime, school sports and people stories.”

And according to the Journal article, the Register-Star never relied on classified advertising as heavily as the major metro dailies, all of which have seen their classified ad revenue eviscerated by craigslist.com. But that’s another blog; let’s go back to the editorial side, to examine local news and sports.

Sports in microlocal news means school sports, always a backbone of local news across the U.S., even for large market television stations in much of the country. For small-town newspapers and microlocal web sites, extensive coverage of high school and middle school sports is essential to success: This is news and sports coverage that is in effect under the radar, without competition from the wire services or other publishers. ESPN and the AP cover the major leagues, and those scores and stories are all over the Internet, with coverage of the pros and high-profile college sports part of what is now an Internet news commodity.

But microlocal newsrooms can neglect major league games to focus on Little League games – and have the coverage all to themselves. By emerging as the sole source of home town news, microlocal newsrooms can survive as viable businesses. Just as major metro dailies in most cities grew into major metro monopolies or duopolies, with monopoly-level profits, now it is the small-market microlocal dailies and web sites that are the new news monopolies, avoiding the commodity business model that is eroding their larger counterparts.

So how does this play out in newsrooms of larger-circulation newspapers?

The Wall Street Journal is notably successful in charging on line, but so far it is the notable exception. The New York Times tried to charge for its columnists and then backed away when neither its readers nor its columnists liked the idea. The Times has been rescued, for now, by a $250 million cash bailout from controversial Mexican billionaire Carlos Slim (see background). But the Times is paying a huge price for that lifeline, agreeing to pay Slim an exorbitant interest rate and elevating him to the third largest stockholder in the company. And if he exercises his options, Slim could soon own the largest piece of the New York Times Company.

Then there is The Washington Post, which is going in a very different direction. For example, The New York Times owners doubled down on print, buying the Boston Globe at the worst moment, and the Times now is facing a loss on the order of a billion dollars. By contrast, The Washington Post passed on the Globe and instead bought Kaplan, a very profitable company that has financially cushioned the Post and given it some breathing room while it tries to invent a new business model. (This is all explained quite clearly in the current Vanity Fair)

The Post has also gone its own way editorially, pulling back from national distribution to focus on its home territory here in Washington, D.C., and the surrounding suburbs. With its economy dominated by a recession-proof local industry – the federal government – the Post’s financial base is more secure than one based on, say, New York City’s investment banks. But the Post is not immune from the nationwide newspaper trends of falling circulation and declining revenue.

Which brings us back to sports. For the Post to dominate its coverage area, it needs to dominate coverage of sports — and not just the pro teams, because ESPN, NFL.com and everyone else in sports is covering them, too. So the Post should be the go-to source for all of the hundreds of thousands (maybe over a million) fans of high school sports, right?

Wrong.

It turns out high school sports scores have now been squeezed out of the Post by earlier deadlines, caused by the new realities of fewer printing plants and new delivery truck schedules. Not surprisingly, this has not gone unnoticed by Post readers, who wonder what happened, just as high school football season started. In Sunday’s Post, the paper’s Ombudsman responded with a full explanation.

Okay, the new realities of fewer printing plants and new delivery truck schedules are, well, the new realities of the newspaper business. But by eliminating high school sports, and the avid fans who follow them, the Post seems to be opening itself to new microlocal competitors, competitors who can close later, print closer to home — and include those high school sports scores.