One Daily Newspaper Goes Electronic — What About The Rest?

If you’re a Postal Service executive, union leader or letter carrier you might want to look closely at the latest announcement from the Christian Science Monitor:

“The Christian Science Monitor,” says the paper, “plans major changes in April 2009 that are expected to make it the first newspaper with a national audience to shift from a daily print format to an online publication that is updated continuously each day.

“The changes at the Monitor will include enhancing the content on CSMonitor.com, starting weekly print and daily e-mail editions, and discontinuing the current daily print format.”

In rough terms, the Christian Science Monitor has a circulation between 75,000 to 100,000 papers a day. This circulation is primarily distributed through the mailstream but times are changing.

The paper says that “producing a website that can be updated 24/7 and delivered instantaneously ‘better fulfills Mrs. Eddy’s original vision’ for the Monitor to be daily than does a five-day-a-week paper delivered by mail with frequent delays.”

Let’s go to the numbers.

Imagine that the CSM has a circulation of 87,500 papers a day and most of it’s delivered by mail. Imagine as well that in a year there are roughly 260 weekday deliveries. This means a potential distribution of as many as 22,750,000 papers annually.

The real number of papers moving through the mails is likely smaller but the point is this: By going from a daily print paper to a weekly, and by shifting to a news product which is largely web-based, there is less mail volume.

This is not good for the Postal Service, not good for jobs within the postal system and it may be implausible for most newspapers.

It’s difficult to see how newspapers can win in this situation. The Washington Post, as one example, just reported third quarter numbers. Revenue from the newspaper division, said the company, “totaled $196.2 million for the third quarter of 2008, a decrease of 7% from $210.2 million in the third quarter of 2007; division revenue decreased 9% to $599.6 million for the first nine months of 2008, from $657.2 million for the first nine months of 2007.” Such revenue, after various charges, produced an operating loss of $82.7 million in the third quarter.

Now look at the Post’s online operations:

“Revenue generated by the Company’s online publishing activities, primarily washingtonpost.com, increased 13% to $30.8 million for the third quarter of 2008, from $27.2 million for the third quarter of 2007; online revenues increased 8% to $87.2 million in the first nine months of 2008, from $80.5 million for the first nine months of 2007. Display online advertising revenue grew 32% and 20% for the third quarter and first nine months of 2008, respectively. Online classified advertising revenue on washingtonpost.com declined 8% in the third quarter of 2008, and was down 2% for the first nine months of 2008. A small portion of the Company’s online publishing revenues is included in the magazine publishing division.”

By any standard $87 million in nine months is a bunch of money — but it’s not enough to fund the Post’s news gathering operations at their current level of quality, volume and expertise.

You can see the dilemma here: Newspapers need print distribution for the foreseeable future because paper-based products produce vastly higher revenues than online sites. The Postal Service needs newspapers, magazines and newsletters to continue as print publications because otherwise it will lose billions of pieces per year in volume. Everyone needs a strong Postal Service because of the jobs it represents nationwide. At the same time, declining circulation and mounting losses make print-based products increasingly difficult to justify for financial reasons.

You can bet that newspaper executives will be watching the Christian Science Monitor — at least to see if its new distribution plan has a prayer. And folks with an interest in the mailstream will be watching too.

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