The Mayoros Agency Advertising Blog

Ad revenues remain below target for the Charlotte Observer, which announced yesterday a new round of staff layoffs.  20 total job cuts, including 5 from the newsroom.  Here is the article from the Observer.

A story in this morning’s Charlotte Observer covers the most recent circulation numbers reported by the Audit Bureau of Circulations.  The Observer story correctly reports on the annual circulation losses compared with last March, but it should be noted that most of the subscribers who fled the print version of the paper did so between March 2009 and October 2009.  While the Observer lost 21,000 daily readers in the past year, only 1,000 of them were in the past 6 months.  Only 10% of the 18,400 Sunday reduction in readers came in the past 6 months.  The Herald (Rock Hill, SC) lost a couple thousand daily subscribers since last March, but only 550 of them in the past 6 months. 

There are two trends we can take from the data:

1. There is a small population of subscribers continue to shift from daily readership in print to weekend print readership, most likely catching headlines during the week online.
2. While circulation continues to decline, it is stabilizing.

The other recent good news for area papers is that their parent company, McClatchy, turned a profit in the first quarter.

While newspaper readership has declined, they are still a good way to reach certain audiences, so we continue to include them in our media plans.

Trade magazine/newsletter publisher Media Post is reporting this morning that McClatchy CEO Gary Pruitt does not expect to put up “pay walls” requiring readers to subscribe or pay one-time fees to access news stories on its newspapers’ websites.  Pruitt reasoned that the pay walls would reduce traffic to the sites and in turn reduce already modest online advertising for many of the company’s 30 daily papers. 

McClatchy owns the most of the major newspapers in the Carolinas, including the Charlotte Observer, The State (Columbia, SC), The Herald (Rock Hill, SC) and News and Observer in Raleigh, NC. 

For background on newspaper paywalls, see our February 3 research post and “Newspapers Consider Risky Strategy”

Articles in today’s Charlotte Observer and Herald of Rock Hill detail job cuts and consolidation efforts which bring the two papers closer to merging.  The Observer article blames the 25 job cuts in Charlotte on “shaky advertising revnues and lingering economic uncertainty.”  Seven positions are being eliminated in Rock Hill.

With the announcement that copy editing and layout for the Herald’s news, sports and feature sections are moving to the Observer, the Herald is getting closer to functioning as a reporting and ad sales bureau for the Observer.  Customers service and ad design services have been outsourced and the paper has been physically printed in Charlotte since last last year.

McClatchy Company introduced digital editions for Amazon’s Kindle of six of its newspapers this week.  Among the six picked for this test market is the Charlotte Observer.  After a two-week free trial period, the Kindle Edition sells for $6.99/month, about half the price of a print subscription.  Interestingly, McClatchy has, at least for now, departed from the longstanding advertising supported model for this edition.

Leaving out advertising is an interesting twist, as circulation revenues were just 20% of McClatchy’s $347 million in revenue in the 3rd quarter.  The Observer already offers a digital edition on its website that includes advertising.  The advantage to Kindle subscribers is that the “paper” will automatically be delivered to their Kindle each morning and it is portable. 

While Kindle may be the best selling item on Amazon, it still lacks the widespread appeal of a cellphone or Ipod.  Interestingly, according to an article found on the Observer website, Forester Research says the profile of a regular e-reader user is a 47-year-old married man with a college degree and household income of $116,000.  That is a reasonably appealing demographic to be taking away from advertisers.

The two reviews on Amazon for the first day of the Observer Kindle Edition were not good.  However, on the Observer website, editor Rick Thames states the launch is experiencing some technical problems, which have robbed the edition of some of the expected content (local sports for one).  Thames expects the technical problems to be worked out quickly and the single day-two review on Amazon was better.