The chief of three of Alabama’s largest newspapers takes a reading on the future of news and new media.
Ricky Matthews, president of Advance Alabama/Mississippi.
Ricky Matthews is the president of Advance Alabama/Mississippi, the holding company for the Birmingham News, Huntsville Times, Mobile Press-Register and Mississippi Press, in Pascagoula. He is also publisher of the Press-Register. He was picked to oversee those publications in August 2009. Prior to that, he served as the president and publisher of the Sun Herald newspaper in south Mississippi.
Advance Alabama/Mississippi is a division of Newhouse Newspapers, which is wholly owned by privately owned media giant Advance Publications Inc. Samuel I. Newhouse Jr. is the CEO of Advance Publications.
Advance Internet is the digital affiliate of Advance Publications, creator of news web sites for 25 Advance newspapers, including al.com, the online home of the Birmingham News, Huntsville Times and Mobile Press-Register.
I’m not at liberty to discuss the decline in print revenue, but you’d be surprised how little it has declined relative to other businesses in this economy. As the economy begins to see a slow recovery, print will continue to level off, because we’re delivering a huge audience and advertising market. We may be the last mass medium left, with radio, TV and online being very segmented. We command growth in revenue in online and a small decline in print. We’re doing a good job holding our own in this tough economy.
Before the recession, most public newspaper companies were heavily leveraged, and, when the downturn occurred, they were unable to make their debt payments, and they have very significant challenges in front of them. The newspaper business is a high-cost business. To take the kind of hits you take due to the downturn requires pretty substantial action. We’ve all had to do it. An uptick in the economy will ultimately alleviate some of the pressure on newspapers, but it’s not going to change the fact that technology has fundamentally changed advertising.
Consider that the readership of the paper has only gone down 15 percent since 2001 and that we have grown online readers as dramatically as we have. Our companies are well positioned to engage some of the most talented news and media employees in the state, and we have a hell of a record for journalistic excellence for years. We’re talking about a dynamic, creative team that is digitally oriented going forward. In terms of ad share, including all other media, the size of our audience, by any measure, including our web sites, we’re number one in each of the markets we serve. At the end of the day, we will continue to be the market leader. According to our 2011 Scarborough Report, in the 18-24 year old audience, we deliver 38 percent of the market, by comparison to an average score of 32 percent for all four network TV stations in our markets.
We’ve got a great partner in al.com, and have been very aggressive in the online area, but, as we go forward, we will deliver news and information not just through print and Internet, but also with mobile technology and tablets and new apps and other forms of print. Consumers have the option to get information whenever they want to. You can even chase them down on the street with the phone that’s wedged into their back pocket.
It’s interesting that some industry watchers were too focused on declaring the point when digital will eclipse print. We don’t see that happening, when you look at print numbers and how many consumers still go to print. The Scarborough Report showed 50 percent of our audience get their information only from the printed newspaper, which is pretty significant. When you look at our Sunday circulation, all three of our Alabama newspapers—Huntsville, Birmingham, Mobile—the Sunday circulation is up compared to a year ago. The daily circulation will decline in the low to middle single digits. Factor in the growth and the number of visitors to the Internet and the launch of the apps, that people are still going to print, print will remain very strong.
From a revenue point of view, I don’t see print soon being overcome by digital. Our focus has been on making sure we work together in print and digital in smart ways. When we call on ad customers, we have a compelling story to tell about print and online being a powerful combination. Our content, whatever it is, is accessible across a wide range of formats. And it is packaged accordingly. Print will continue to be a big player, as will digital.
Some of the public newspaper companies chose a very tight bundling of their print and digital, and when you have that, as print declines digital revenue declines. It’s called bundled pricing. If you buy print, they give you an Internet ad. Then they’ll allocate some of that price to their Internet revenue. If the print revenue declines, then, naturally, online declines. Our advertisers understand the value of each. We do a really good job of keeping the books really pure and know exactly what our online revenue is. When the customer understands the value of each and you sell them appropriately, it’s a true upsell. Our digital has not leveled off. We’re way ahead of the industry.
If you look back at 2001, how long it took to download a web page, it could take several minutes. Today you can download to your browser in less than a second, owing to the increase in bandwidth, advances in search engines. It has changed the way people consume news and information. Just look at what has happened in mobile technology, how ubiquitous it is and fast growing. In 2001, we were mostly a newspaper company and dabbling in the Internet, which we saw as somewhat in the future. Today, we really believe we can demonstrate that we are a multi-media company. Today, our websites are market leaders and continuing to lead the way in the digital arena. These are exciting times for us.
We want to tell a story, as the economy slowly recovers, how we are not just a newspaper, about how advertises are beginning to spend across a wide variety of media. The number of advertisers is up, although they are spending less. It’ll be very interesting to see, as this thing progresses, where it all ends up. Our company may ultimately end up being digital first and having a print product that is of high value and quality. We are able to go in either direction, however it happens. We will not sit back and not continue to be the market leader.
Chris McFadyen is the editorial director of Business Alabama.