a.h. belo

A.H. Belo execs silent on Projo’s lagging ad sales, new website

February 21st, 2012 at 3:22 pm by under Nesi's Notes, On the Main Site

A.H. Belo executives gave no explanation Tuesday for why The Providence Journal’s sales trailed those of its two sister papers in 2011 and didn’t say if they’re satisfied with the response to its new website.

In a short conference call with investors, A.H. Belo CEO Robert Decherd and his management team outlined no plans for the Providence paper and didn’t indicate when the company expects to start charging Web and iPad readers for its new electronic edition created by Olive Software. The company’s Dallas Morning News flagship started charging last March.

Only one investor asked A.H. Belo executives questions during Tuesday’s call. Chief Financial Officer Alison Engel promised “a robust update” about its “subscriber content strategy” on its next investor call, which will likely happen in April or May. An executive said in November The Journal will launch its paywall this year.

The Journal suffered the largest year-over-year drop in advertising revenue during the fourth quarter among A.H. Belo’s three papers, the company said. Ad sales surpassed expectations at the Morning News and Press-Enterprise of Riverside, Calif., during the three months ended Dec. 31, Decherd said.

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Projo’s online traffic slumps in wake of new website’s launch

January 13th, 2012 at 12:22 pm by under Nesi's Notes, On the Main Site

The Providence Journal’s new website is drawing a smaller online audience than the one it replaced in October, according to two companies that track Internet traffic.

The total number of visitors and page views to ProvidenceJournal.com/Projo.com were both down 32% in the 10 weeks ended Dec. 24 compared with the 10 weeks before the new website launched, figures from Experian Hitwise show. The paper switched to the new, scaled-down ProvidenceJournal.com site on Oct. 17.

ProvidenceJournal.com/Projo.com averaged 300,241 U.S. visitors a week between Oct. 22 and Dec. 24, down from Projo.com’s 439,013 weekly average between Aug. 13 and Oct. 15, Hitwise said. Average weekly page views declined from 1.3 million to 884,706 over the same period.

Separate figures from Nielsen also showed a decline in The Journal’s Web audience.

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Shake up in executive suite at Projo parent; sales rebounding

January 5th, 2012 at 5:51 pm by under Nesi's Notes, On the Main Site

The Providence Journal will now be directly overseen by its Dallas-based parent company’s chief executive.

John McKeon, president and general manager of The Dallas Morning News, will leave the company before June 30 and won’t be replaced, A.H. Belo said Thursday. McKeon earned $1.3 million in 2010, his first year on the job, and A.H. Belo paid $3.1 million to buy his old house as part of a relocation agreement.

Jim Moroney, the Dallas paper’s publisher, will take over McKeon’s duties. Providence Journal publisher Howard Sutton, who had reported to McKeon, will now report directly to A.H. Belo CEO Robert Decherd, the company said.

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Projo paywall will prove pivotal to the paper’s long-term health

December 29th, 2011 at 6:00 am by under Nesi's Notes, On the Main Site

It’s looking like 2012 may be a make-or-break year in the long history of The Providence Journal.

With revenue and circulation still falling precipitously, the Projo is poised to bet big on pushing readers back to print by forcing those who want all its content to either subscribe to the print edition or read it in an electronic format that’s an exact digital replica of the dead tree version.

The strategy is risky, to say the least. The new ProvidenceJournal.com’s debut was met with withering criticism, including from the paper’s own commenters. The e-edition software developed by Olive Interactive remains buggy (the share tools stopped working on Firefox 8 for Mac earlier this month) and its article pages don’t even say that you’re reading a Providence Journal story. There are still no Projo iPhone or Android apps. It’s all a marked contrast with the award-winning new BostonGlobe.com, also launched this fall and also charging readers.

Journal management is notoriously tight-lipped, so it’s hard to judge if the new website is meeting their expectations. Compete.com says the paper’s unique visitors on the Web plunged from 425,486 in September (on Projo.com) to 233,091 in November (on ProvidenceJournal.com). But take that with a grain of salt, since Compete’s numbers are notoriously unreliable.

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Projo’s own ‘pension puzzle’: paper froze its underfunded plan

December 12th, 2011 at 6:00 am by under Nesi's Notes, On the Main Site

After spending much of this year covering Rhode Island’s debate on the topic, staffers at The Providence Journal now face a “pension puzzle” of their own – whether to accept a corporate buyout, and the retirement benefit that comes with it.

The Journal wants eight employees to agree to buyouts by Friday, and their union says those who do will be eligible for a pension next year. But the pension plan itself is significantly underfunded, and the benefit on offer has changed significantly over the past decade, particularly for younger employees.

Projo parent company A.H. Belo’s two pension plans were 64% funded as of Dec. 31, 2010, with an unfunded liability of $132.4 million, SEC filings show. Experts say government pension plans should be at least 80% funded, and the federal government requires private ones like A.H. Belo’s to inform beneficiaries if their funding dips below the 80% benchmark.

To put the 64% figure in perspective, the Rhode Island pension system’s funded level rose from 48% to 60% after the new law was signed last month. All but seven of the state’s 24 cities and towns with locally run pension plans are worse-funded than A.H. Belo’s, but its $132 million unfunded liability is bigger than all but three of theirs; it’s roughly the same shortfall as Pawtucket faces.

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Projo to cut newsroom staff amid ongoing ad, circulation slump

December 2nd, 2011 at 12:09 pm by under Nesi's Notes, On the Main Site

The Providence Journal has offered eight buyouts to its employees and may cut more positions depending on the level of interest in the offer, a union official said Friday.

The staff reductions will be the first cuts to The Journal’s newsroom since multiple rounds of layoffs in 2008 and 2009. They come as the paper prepares to begin charging next year for its new website, which debuted Oct. 17. The news was first reported by Scott MacKay of Rhode Island Public Radio.

The Journal is looking to cut one reporter, one copy editor, one photographer and one editorial assistant, plus four advertising representatives, said John Hill, president of the Providence Newspaper Guild. Employees in other jobs have been encouraged to apply for a buyout if they’re interested in leaving, he said.

“The impression we’re getting is there’s a dollar amount in terms of the total amount of savings they want,” Hill told WPRI.com. Layoffs will take place if the company doesn’t reach its goal and are decided by seniority, he said. The Dallas Morning News, its sister paper, reportedly laid off 38 newsroom staffers in September.

Journal employees have until Dec. 16 to decide whether to agree to a buyout, which Journal insiders described as less generous than previous offers. They would remain on the payroll until Dec. 30 and be eligible for a pension from the newspaper in 2012.

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Newspapers still need print edition, exec at Projo parent says

November 9th, 2011 at 9:21 am by under Nesi's Notes

A top executive at The Providence Journal’s parent company says he’s hopeful a shift toward getting more money from subscribers and less from advertisers will help its papers weather the storm.

“We don’t have an audience problem,” Jim Moroney, publisher of the Dallas Morning News, told students and faculty at the University of Texas at Austin last week. The problem is the failure of digital advertising revenue to match the rates the company gets for print. “Advertising is not a dependent source of revenue going forward,” he said.

The share of the Projo’s revenue that comes from advertising sales has fallen from 82% in 2005 to 56% in the first nine months of this year, according to SEC filings. Circulation’s share rose from 17% to 36%, and the paper has also been signing more printing and distribution contracts. Moroney cited similar trends at his paper in Dallas.

But the print edition remains vital. Moroney said ads on DallasNews.com would generate a maximum of $14 million in annual revenue at current rates, compared with roughly $90 million from print circulation.

The newspaper business is in “a transition and that’s hard,” he said. A video of Moroney’s presentation is posted after the jump.

• Related: Full Projo paywall set for 2012 as advertising sales slump 11% (Nov. 3)

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Full Projo paywall set for 2012 as advertising sales slump 11%

November 3rd, 2011 at 3:00 pm by under Nesi's Notes

The Providence Journal’s new website is an interim step for the newspaper as it prepares to roll out its full digital paywall next year, executives at parent company A.H. Belo said Wednesday after reporting a third-quarter loss.

“Providence actually did what I would call a subscriber-content initiative ‘light’ … and there are plans for them to do what we’re doing [now in Dallas] next year,” Jim Moroney, publisher of the Dallas Morning News, told investors on a conference call. He made similar comments in July.

“Providence we will definitely do next year, and they’ll benefit from all the learning the Dallas Morning News will have,” Moroney said. The Journal replaced its old website on Oct. 17 with a new one that publishes brief news items and an electronic replica of the print edition.

The Journal’s advertising revenue fell 11.2% to $38.2 million during the first nine months of 2011, with double-digit declines in display, preprint and digital ads compared with 2010, A.H. Belo disclosed in an SEC filing. Total revenue was down only 6% to $68.8 million thanks partly to a 50% jump in printing and distribution contracts.

“Providence isn’t an easy market these days,” A.H. Belo CEO Robert Decherd said. “Frankly, I think we did well – all things considered – in Providence.”

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A rough year for Projo parent A.H. Belo in the stock market

August 23rd, 2011 at 12:21 pm by under Nesi's Notes

Providence Journal parent company A.H. Belo’s stock has plunged by almost half since the start of this year.

A.H. Belo closed at $4.84 a share in New York Stock Exchange trading on Monday. That’s down 44% since Dec. 31, when A.H. Belo closed at $8.70. The S&P 500 has fallen just under 10% over the same stretch of time.

But A.H. Belo’s stock performance is far from the worst among publicly traded newspaper companies in 2011.

Lee Enterprises is down 74%, WJAR-TV parent Media General is down 67% and McClatchy is down 62%. Gannett and The New York Times Co. are each down about one-third.

Executives at some papers are starting to order new rounds of layoffs and furloughs as print revenue fails to stabilize and the economy slows, The Wall Street Journal reported Monday:

Newspaper companies are resetting their advertising expectations after a discouraging first half of the year, a shift that could spur a return to more of the job cuts and other belt-tightening moves that spread through the industry in 2008 and 2009. …

[A]nalysts and executives say it will take more time for newspaper companies to cash in on their digital progress, and if current print trends don’t abate in the short term, there will be more pain ahead. “If the top line doesn’t show signs of decreasing at a diminishing rate, they’re facing some rather dire circumstances,” said Edward Atorino, an analyst at Benchmark Co. …

The key drag on ad results for a number of these companies was a significant pullback by local retailers, which account for more than half of ad revenue at many local papers. The uneasy economy and the longer-term shift of ad dollars online continue to play a big role, analysts and executives say.

Related: Financial picture is starting to get brighter at the Projo (Aug. 10)


Financial picture is starting to get brighter at the Projo

August 10th, 2011 at 6:00 am by under Nesi's Notes

If you’re a newspaper proprietor these days, good news is relative. So The Providence Journal’s executives must be at least somewhat pleased with their latest advertising numbers.

The Journal’s ad sales fell 8% in the second quarter compared with a year earlier, according to an SEC filing by parent company A.H. Belo. That follows 13 consecutive quarters of double-digit advertising losses, making April 1-June 30 the paper’s best three-month stretch since late 2007.

The Journal’s ad sales shrank by a smaller percentage in the second quarter than those of its sister papers, the Dallas Morning News and The Press-Enterprise of Riverside, Calif., A.H. Belo said last month.

The Projo’s classified ad revenue fell 5%, display and digital ad revenue fell 7% each, and preprint ad revenue fell 11%. The SEC filing attributed the drop in display sales to “a decline in retail advertising, partially offset by an increase in general advertising.” Classified ads for housing and jobs declined but car listings rose.

The Journal’s total revenue – which also includes circulation and printing/distribution sales – was down 6% in the first half of this year compared with 2010, falling from $49 million to $46 million. But second-quarter revenue was down just 4% year-over-year, to $24 million.

Advertising has contributed 57% of the Projo’s revenue so far this year, with circulation adding 36%, a big change from the old 80/20 rule that said newspapers get 80% of revenue from ads and 20% from circulation.

Projo.com will roll out a “premium-content-light” system this month as a first step toward implementing a paywall, A.H. Belo executives said on a conference call with investors in July. But so far The Journal has not offered any official word about the pending changes to its website.

More Providence Journal and A.H. Belo coverage:


Projo.com to change in August; Dallas-style paywall delayed

July 28th, 2011 at 3:44 pm by under Nesi's Notes

The Providence Journal will take a first step toward charging readers online next month, but the new system won’t look like the one at the Dallas Morning News – yet.

The Journal will roll out a “premium-content-light” system in August, A.H. Belo executive Jim Moroney told investors during a conference call Thursday, without providing further details.

But a full-scale paywall like the Morning News’ will not be put in place until the Projo finishes installing a new content-management system.

“It’s what [The Journal] can do easily without going the full boat that Dallas did, because of this technology issue,” Moroney said.

“Until that gets in place, it really doesn’t make sense for [The Journal or sister paper The Press-Enterprise] to take this step, because they’d have to go through a tremendous amount of work to put it in place, only to turn around do it all over again,” he said.

The paper is also expected to debut a redesigned website and a corporate rebranding soon. The Journal’s executive editor, Thomas Heslin, directed questions about the changes to the paper’s publisher, Howard Sutton. Sutton did not immediately respond to an e-mail requesting comment.

Moroney said the company is pleased with the results so far at the Morning News, which began charging digital readers March 8. Over 73,000 consumers have linked their print and online subscriptions, he said. Unique visitors to the paper’s website have declined about 15% and page views have fallen about 15%.

The Journal’s executives began talking about a paywall publicly more than a year and a half ago. The most recent details came in a report last October that described a sort of “Diet Projo” system, with short summaries of longer print stories posted online. But it’s unclear whether that is still the plan.

A. H. Belo posted a net loss of $6.8 million, or 32 cents a share, for the three months ended June 30, compared with a net loss of $171,000, or a penny a share, a year earlier. Revenue dropped 6% to $114.5 million, with advertising sales down 9%. That was partly offset by a $5.4 million property sale.

There was some good news for The Journal in the earnings report. A.H. Belo said the Projo’s advertising sales didn’t fall by as large a percentage as at its other two papers, the Morning News and The Press-Enterprise, though circulation revenue fell at The Journal and The Press-Enterprise. The company also credited a 7% increase in printing and distribution revenue “primarily to increases … in Providence.”

During the call, A.H. Belo CEO Robert Decherd declined to forecast how the publisher’s sales will be going forward.

“Like all of our peer companies, we hope that revenues are going to stabilize during the second half of the year, but … things have been very uneven insofar as revenue patterns are concerned,” he said. The company benefits from having a healthy balance sheet and dominance in its major markets, he added.

More Providence Journal and A.H. Belo coverage:


Projo parent A.H. Belo’s surprising success amid the storm

May 18th, 2011 at 7:00 am by under Nesi's Notes

Don’t look now, but Providence Journal parent A.H. Belo is gaining a reputation as one of the best-run newspaper companies in the United States.

True, the Projo’s circulation and revenue have fallen steeply over the past five years. But with the digital era threatening the very existence of newspapers, the real question is how a company is managing to make its way through this historic upheaval. And on that score, A.H. Belo is doing as good a job as anybody.

“Last year, the newspaper industry received less than half the advertising revenue they had in 2005,” John Morton, the dean of newspaper industry analysts, told me. “Most other industries that suffered that kind of loss in a principal revenue stream … probably would be out of business by now.”

Start with A.H. Belo’s corporate balance sheet. The Dallas-based company has no debt and grew its stockpile of cash and cash equivalents from less than $7 million in early 2009 to $52 million as of March 31.

That lack of leverage is “a big plus,” said Rick Edmonds, media business analyst at the nonprofit Poynter Institute in Florida. Newspaper firms with minimal or no debt – like A.H. Belo, E.W. Scripps, The Washington Post Co. and Gannett – are in much better shape than highly leveraged peers like Lee Enterprises, McClatchy and WJAR-TV parent Media General, he said.

And while A.H. Belo has lost money in nearly every quarter since its 2008 spin-off from Belo Corp., Edmonds sees a silver lining there, too.

“The very thin profit margins on net earnings … do not delight Wall Street, but I see a positive beneath the surface,” he wrote in April. “As all the [newspaper] companies do their own version of digital transformation, they are investing in new media rather than harvesting operating profits and dropping them to the bottom line.”

That leads to A.H. Belo’s approach to preparing for an uncertain future. Again, the state of the sadly neglected (but soon-to-be upgraded) Projo.com is misleading – look instead at what the company has done with its flagship paper, the Dallas Morning News.

“I think the Dallas Morning News is a success story in a rather difficult industry,” said Ed Atorino, a veteran media analyst at Benchmark Co. in New York.

In Dallas, A.H. Belo has beefed up the Morning News franchise by expanding its news hole, protecting investigative reporting and adding offshoot publications like Briefing and Al Dia. “Dallas is doing the multiple product approach as well as anyone I can think of,” Edmonds said.

Another smart move was A.H. Belo’s decision last year to license The New York Times Co.’s new Press Engine software to build its iPhone and iPad apps. The Times team has set the gold standard for digital design at a newspaper, and the Morning News iPad app is a pleasure to use. (The Projo’s apps are coming later this year.) Other publishers have tried to build their own apps from scratch, with predictably lousy results, but A.H. Belo’s executives paid for quality – and knew their own limitations.

Finally, there are the tough decisions the company made in the face of the Great Recession.

I can’t cheer for laying off journalists, but there’s no denying A.H. Belo moved swiftly in 2008-2009 to downsize its staff as the economy capsized. Its work force has shrank by a third over the last three years, from 3,680 in 2007 to 2,480 in 2010, with The Journal’s unionized staff falling from 530 to 330.

With advertising dollars disappearing, the company has moved aggressively to tap other sources of revenue like new printing contracts and, especially, higher circulation prices; an annual subscription to the Morning News or The Journal costs more than $400 these days, making them two of the costliest dailies in the United States.

“They’ve done a really good job in basically getting their loyal audience to pay for the paper,” Atorino said.

Earlier this year, the Morning News put up an online paywall that will require readers to pay $17 a month for digital access to all its content. The Projo plans to do the same later this year, and The Press-Enterprise of Riverside, Calif., will follow suit in 2012. There’s no guarantee it will work, but management gets credit for making a move as other newspaper owners remain paralyzed with indecision.

All in all, The Journal seems to be in better hands with A.H. Belo than it would be with, say, Gannett or McClatchy. Unfortunately, though, that’s no guarantee of the statewide daily’s future health.

Advertising is still falling at a faster pace at the Projo than it is at A.H. Belo’s other two papers; Atorino told me he has “been surprised at the weakness” in The Journal’s recovery from the recession, which he attributed primarily to the moribund local economy.

In the end, John Morton said, The Journal will succeed or fail based on the quality of its content. ”I don’t see [A.H. Belo's] papers regularly, so I can’t really judge whether they’ve skimped on or invested in news,” he said. “Almost all other dailies have skimped, which I think will be to their everlasting regret.”

“If Belo maintains its news quality, their papers will be in a better position once the gradual transition from print to digital in all its forms takes place,” Morton said. “If they don’t, there will be hell to pay eventually.”

(photo: A.H. Belo)


It’s Projo’s Froma Harrop vs. Krugman, Drum and Grove

May 12th, 2011 at 7:27 pm by under Nesi's Notes

Congratulations to The Providence Journal’s Froma Harrop, who is a finalist for a 2011 Gerald Loeb Award for Distinguished Business and Financial Journalism in the commentary category.

And what august company she’s in: Harrop’s fellow finalists are Paul Krugman of The New York Times, Mother Jones’ Kevin Drum and former Intel CEO Andy Grove. The winner will be announced June 28 in New York City.

Harrop, who lives in Providence and whose column is syndicated in nearly 200 papers, was also a Loeb finalist in 2004. She was a business writer for the Projo before becoming a columnist and joining its editorial board.

The Journal doesn’t appear to have a page for Harrop’s column, but her syndicate collects them here.

I’ll add that Froma and I met recently while appearing together on a Rhode Island PBS program about the future of news (it airs May 25) and she’s a lovely lady – we both love Instapaper, too. Good luck!

(photo: Creators Syndicate)


Belo execs surprised as Projo ad sales drop 15% in 1Q

May 6th, 2011 at 7:00 am by under Nesi's Notes

The Providence Journal’s advertising revenue slid 15% during the first three months of 2011, marking the 13th consecutive quarter of double-digit ad declines at the paper as its recovery lagged behind those of its two sister publications.

The Journal sold $12.4 million worth of advertising from Jan. 1 to March 31, down from $14.6 million during the same period in 2010, parent company A.H. Belo disclosed in an SEC filing this week.

The Journal experienced “declines in substantially all categories” of advertising during the first quarter, with classified ads down 20%, display and digital ads off 15% each, and preprints down 9% compared with 2010, A.H. Belo said.

Advertising revenue at both the Projo and its sister paper The Press Enterprise was “a bit softer” from January through April “than we had anticipated going into the year,” David Gross, A.H. Belo’s vice president of investor relations, told investors Tuesday.

“We responded to the softness with real-time adjustments to expenses,” Chief Financial Officer Alison Engel said. “We eliminated positions, delayed or froze open positions, reduced some marketing expense and reduced other discretionary expenses.”

If the present advertising trends continue, Gross added, “we will make additional expense adjustments in order to keep our operating cost properly aligned with our revenue.”

The Journal’s net operating revenue totaled $22 million in the first quarter of 2011, down about $2 million from a year earlier. Circulation revenue fell 5% to $8.1 million, while printing and distribution revenue rose 7% to $1.5 million.

Bright spots for The Journal included increases in automotive classified ads, preprinted mail revenue and outside printing and distribution contracts for other papers. Its revenue mix has shifted significantly in recent years, with advertising now making up only 56% of the total and circulation’s share up to 37%.

CEO Robert Decherd said The Journal’s is struggling more than A.H. Belo’s other two papers, which both appear to have hit bottom. “We’re still feeling a downdraft, a significant downdraft, in Providence,” he said. “But we’ve managed through that previously in Dallas and Riverside.”

Engel said the Morning News is currently contributing about 90% of A.H. Belo’s operating profit.

Decherd and other executives expressed optimism about the future, highlighting investments in technology and the company’s strong financial position. ”During this transition, we must reinvest in our print franchises, which generate most of our revenue today, and be ever mindful of opportunities in the digital space,” he said.

Decherd pointed out that A.H. Belo had less than $7 million of cash and cash equivalents on hand and had borrowed $13 million from its creditors during the first quarter of 2009; as of this year’s first quarter, it had a $52 million cash stockpile and no debt.

Gross cited Rhode Island’s meager population growth as one reason for the paper’s declining circulation. He also expressed optimism about Projo Express, a condensed publication The Journal launched last year.

Gross hinted that the online paywall The Journal is scheduled to unveil in the second half of this year will look much like the new one at the Dallas Morning News, saying that its rollout “would not have been possible without the investment that we have made and that we continue to make in common technology platforms.”

Dallas Morning News publisher Jim Moroney described a favorite feature on his paper’s new iPad app. Audience metrics show tablet use peaks between 7 and 11 p.m., so the paper has added a tab to its drop-down menu that says “The Big Story,” which is updated with a collection of content relating to a topic in the headlines – the death of Osama bin Laden, for example – by the time iPad users switch their machines on in the evening.

Moroney said the click-through rate for iPad advertisements is “much greater” than on regular websites, which has pleased the Morning News’ advertisers.

Moroney also expressed particular optimism about The Journal’s future because of its “deep” relationship with local readers in Rhode Island. ”It goes back a long way and we have therefore a brand – not a word that a lot of people in the journalism world like to use – but our brand is a powerful asset and it helps us online,” he said.


A.H. Belo: Projo paywall coming in second half of 2011

May 3rd, 2011 at 5:06 pm by under Nesi's Notes

The Providence Journal will put much of its content behind an online paywall sometime between July 1 and the end of this year, executives at parent company A.H. Belo confirmed on Tuesday.

The Projo “will roll out its subscriber content strategy in the second half of 2011″ for the print edition and Projo.com, according to a presentation A.H. Belo’s leaders made to investors in New York and posted on its website. The Press Enterprise of Riverside, Calif., will follow suit next year.

A separate section of the presentation defined the term “subscriber content” in the context of A.H. Belo’s flagship paper, the Dallas Morning News, which began charging readers $17 a month for digital access in March.

“Subscriber content is original and proprietary content, exclusive to, and generated by, The Dallas Morning News,” the slide said. “Subscriber content is only available in our newspaper, dallasnews.com, the mobile web and on our table and smart phone applications.”

The Journal’s print circulation fell by about 8 percent during the six months ended March 31, the Audit Bureau of Circulations reported earlier on Tuesday. A.H. Belo reported first-quarter earnings on Monday, and disclosed that among its three papers the Projo’s advertising revenue is falling at the fastest pace.

The Journal’s publisher issued a memo last October that said the paper’s plan was to post short summaries of its lengthier local stories online, but only offer the full versions to print and electronic-edition subscribers. He also said Providence-based firm ExNihilo is designing a new version of Projo.com.


Slide in Projo’s print circulation is slowest since 2008

May 3rd, 2011 at 10:49 am by under Nesi's Notes

The Providence Journal’s print circulation fell by about 8 percent during the six months ended March 31 as the paper lost the smallest share of readers it has in two and a half years.

The Journal sold an average of 91,807 copies on weekdays between Oct. 1 and March 31, a decrease of 7,766 from the same period a year earlier, the Audit Bureau of Circulations reported Tuesday.

The Projo’s circulation on Sundays – the most lucrative edition of the week for most papers – totaled 130,659 copies, a drop of 11,029 since the March 2010 report. Saturday circulation fell by 10,214 copies, from 127,025 to 116,811.

Projo.com had 1.4 million unique visitors during the latest reporting period, the Audit Bureau said. The Journal is reportedly planning to start charging readers to access its content online later this year.

Like most newspapers, The Journal has been losing print readers for years, but the pace of decline has sped up recently. The paper now sells about one-third fewer copies a day than it did three years ago in early 2008, when Sunday circulation was 192,849 and weekday circulation was 139,053.

But thanks to higher prices, the loss of readership hasn’t meant a loss of circulation dollars for The Journal. The paper’s circulation revenue totaled $35 million in 2010, up from $28.5 million in 2005, SEC filings show.

The latest circulation numbers follow Projo parent company A.H. Belo’s disclosure on Monday that the Providence paper’s advertising sales dropped more than those of its other two papers during the first three months of this year.

The Wall Street Journal continued to be the most-read daily U.S. newspaper through March 31, with an average circulation of 2.1 million, the Audit Bureau said. It was followed by USA Today (1.8 million), The New York Times (916,911), the Los Angeles Times (605,243) and the San Jose Mercury News (577,665).

The NYT is tops on Sundays, with 1.3 million readers, followed by the LA Times (948,889), The Washington Post (852,861), The Chicago Tribune (780,601) and the Mercury News (636,999). The Boston Globe’s circulation was 219,214 on weekdays and 356,652 on Sundays in the latest report.


Projo union’s president blasts bonuses at A.H. Belo

April 6th, 2011 at 12:06 pm by under Nesi's Notes

John Hill

The leader of The Providence Journal’s largest union is not pleased that its parent company increased top executives’ compensation last year.

John Hill, president of the Providence Newspaper Guild, offered his reaction after Dallas-based A.H. Belo disclosed in an SEC filing Monday that its five top executives received larger pay packages in 2010, including nearly $1.6 million in cash bonuses.

“Those of us in the Providence Newspaper Guild, when we agreed to assume a larger share of our health insurance costs this year, thought we were doing it to help protect the financial future of our paper, not pad the wallets of Belo’s Dallas executives,” Hill said in an e-mail.

A.H. Belo did not respond to a request for comment.

Hill’s members voted 147-50 on Feb. 16 in favor of a new three-year contract with The Journal and A.H. Belo that will freeze wages and increase medical costs but that supporters also hope will protect some jobs.

Prior to the vote, Hill said the contract made “the best of a bad situation.” This week, though, he chastised management for pushing reporters and other employees at The Journal to accept reduced benefits while increasing their own compensation.

“These kinds of actions will make it that much harder to believe them the next time they ask us to give up even more,” Hill said.

The new contract between The Journal and the Guild’s roughly 250 members took effect on April 1 and will continue through Dec. 31, 2013. The Projo is the only one of A.H. Belo’s three papers whose workers are unionized.

Hill was elected the Providence Guild’s president in 2003 following a bitter battle between management and labor at The Journal. He has run unopposed for the union’s top post since 2004.

(photo: Providence Newspaper Guild)


Projo parent A.H. Belo’s execs get $1.6M in bonuses

April 4th, 2011 at 4:20 pm by under Nesi's Notes

Providence Journal parent A.H. Belo awarded its top five executives nearly $1.6 million in cash bonuses last year, the company disclosed Monday in an SEC filing.

A.H. Belo CEO Robert Decherd’s total compensation more than tripled to $1.87 million in 2010, up from $499,180 in 2009, according to WPRI.com calculations based on the SEC filing.

Decherd’s 2010 pay package included a $480,000 salary; a $408,000 cash bonus; $949,998 worth of stock awards; and $29,872 in “other compensation.” The latter category included $8,760 for life insurance, $3,150 in tax gross-ups to make up for the cost of taxes on other benefits, and a $420 cell phone allowance.

Among the other four top executives, Dallas Morning News Publisher James Moroney earned $1.3 million in 2010, up from $478,090 in 2009; Morning News President and General Manager John McKeon earned $1.3 million in his first year on the job; Chief Financial Officer Alison Engel earned $800,001, up from $276,765; and Senior Vice President Daniel Blizzard earned $575,000, up from $211,228.

The largest cash bonus went to McKeon, who received $584,960, most of it as a retention bonus. Moroney got $327,250 in cash, Engel got $150,000 and Blizzard got $100,000. Dallas-based A.H. Belo owns the Projo, The Morning News and The Press-Enterprise of Riverside, Calif.

(WPRI.com’s compensation estimates are lower than two of the amounts A.H. Belo reported in its SEC form because ours subtract out yearly changes in the actuarial value of executives’ pensions; adding that back in would increase total compensation to $2.04 million for Decherd and $1.43 million for Moroney.)

A.H. Belo’s stock price rose 51% in 2010, from $5.76 a share at the start of the year and to $8.70 at the end. The company posted a net loss in 2010 of $124.2 million, or $5.92 a share, compared with a loss of $107.9 million, or $5.25 a share, in 2009. Revenue fell 6% to $487.3 million.

In a letter to employees last month, Decherd said A.H. Belo was reinstating the company’s 401(k) match of 1.5% for the first half of this year. But he warned that it may be a long time before the company can hand out performance-based raises to rank-and-file workers.

Executives “continue to monitor competitive pay practices in our industry and we are very much aware that there have been no merit increases at A.H. Belo since 2008,” Decherd said.

“However, the early-stage recovery in Dallas and the economic challenges in Rhode Island and Inland Southern California continue to create uncertainty that makes it difficult to predict when merit increases can be implemented at any level in the company,” he said.

(logos: A.H. Belo)


Study: Projo still reaches half of local adults weekly

March 31st, 2011 at 2:17 pm by under General Talk, Nesi's Notes

The Providence Journal’s revenue and circulation are far from what they once were. But don’t underestimate how many people still look to the local daily for news and information.

On an average week last year, 49% of adults in the Providence area – 608,727 in all – either read The Journal’s print edition, visited Projo.com, or did both, according to a Scarborough Research report obtained by WPRI.com. That was down from 54% of adults – 676,746 in all – in 2009, but it’s still a formidable audience.

The nation’s 20 most-read newspapers reached between 72% and 53% of adults in their metro areas on an average week last year, with the Rochester Democrat and Chronicle topping the list, according to Scarborough.

One worrying sign for The Journal: its five-point decline in total reach between 2009 and 2010 was larger than those experienced by many of the 20 top papers. That’s partly explained by its plunging print circulation, which last fall was down 10% compared with 2009 and 41% compared with 2000.

As Poynter’s Rick Edmonds points out, the loss of readers despite a boom in digital media also goes against “a standard line from individual papers and the Newspaper Association of America that total audience, when digital is included, is growing or stable – not declining, as paid circulation numbers alone would suggest.”

Gary Meo, Scarborough’s senior vice president of print and digital services, acknowledged that problem. “They’re growing their audiences online, so there are increases in audience online,” he told me. “But they’re not increasing fast enough to ameliorate the declines in print.”

Still, Melo said he finds it “pretty remarkable” that The Journal and other papers manage to reach half of their region’s adults in any given week given the amount of competition they face across the media landscape. He also noted that the Projo’s market area (like WPRI’s) stretches out to New Bedford, past its daily coverage zone.

I also asked “Newsonomics” author Ken Doctor what he made of The Journal’s 49% reach and five-point decline. In an e-mail, he described its print circulation drop as “breathtaking” and suggested Projo.com’s stale Web design doesn’t help, but he also questioned the metric’s modern relevancy:

Reach is increasingly an old-fashioned metric. Why do papers care about reach? For advertisers. And advertisers increasingly can target audience by geography, by gender, by time of day, by interest (clickstream, content type) and more. So, if I’m an advertiser and know only that someone has read a paper sometime within a given week, or visited at least one page on a website at least once in a given week, I don’t think that tells me much. I’m throwing darts, still, but the dartboard has gotten a bit smaller.

It’s a big question for publishers: What do they count, and what do they count that advertisers care about? The answers are changing everyday.

Another question: if the Projo does put much of its content behind a paywall this summer as expected, how many of those adults will stick with the paper – and pay money for the privilege?


Projo falls below $100M mark as half of ads evaporate

March 14th, 2011 at 7:00 am by under General Talk

The Providence Journal is a much smaller business today than it was half a decade ago.

The Journal’s total revenue dropped for a fifth straight year in 2010 to $99.9 million, parent company A.H. Belo disclosed in an SEC filing late Friday – the lowest amount in at least 15 years and perhaps far longer than that after adjusting for inflation.

The $99.9 million total was off 40% from 2005, when the paper booked $166 million in revenue. Its annual revenue was $125 million back in 1995, archived SEC documents show.

The Journal’s advertising sales plunged by more than half between 2005 and 2010, from $137 million down to $60 million, the filing said. Ominously, even digital advertising on Projo.com and its affiliate sites declined significantly, falling from $9.7 million in 2008 to $7.6 million in 2010.

Circulation and printing/distribution revenue has increased over the same period thanks to price increases and new contracts. Here’s a chart breaking down The Journal’s revenue picture:

The good news for The Journal is that the pace of its financial deterioration is slowing down. While advertising sales fell 10.1% in the fourth quarter of 2010 compared with a year earlier, that was the smallest decrease in three years. And last year’s 5% drop in total revenue was far below the declines of 20% in 2009 and 14% in 2008.

A.H. Belo executives, like their peers at other publishers, are trying to become less reliant on advertising revenue as more of that spending moves online, and they’re turning to readers to make up some of the difference.

Advertising sales made up 82% of the Projo’s total revenue in 2005 but only 60% in 2010, while circulation’s share of the shrinking pie doubled from 17% to 35%. “The company expects newspaper advertising revenues will continue to decrease in 2011, although at a lower rate of decline,” the SEC filing said.

The trend of increased reliance on circulation dollars will continue if The Journal follows through with its long-discussed plans to start forcing online readers to pay later this year. Its sister paper, The Dallas Morning News, started charging $17 a month last week to read its content on Dallasnews.com and through iPhones and iPads.

“I think you’ll see some improved performance during 2011, assuming the economy and all such things hold up,” Jim Moroney, executive vice president of A.H. Belo and the Dallas paper’s publisher, told investors in a conference call last month.

The Journal sold an average of 101,123 copies on weekdays last year, down from 163,909 in 2005, A.H. Belo said. Sunday circulation fell to 137,339, down from 231,593 in 2005, a decrease of 41%. Figures released last fall showed weekday circulation is now below 100,000.

One thing to keep in perspective – even after losing 40% of its revenue, the $99.9 million Projo is still the dominant media player locally. Annual ad revenue for all the TV stations in the Providence/New Bedford market combined totals roughly $60 million, according to BIA Financial Network.

Nor is The Journal’s situation an outlier compared with its two sister papers, The Morning News and California’s Press-Enterprise. While A.H. Belo’s total revenue has decreased from $637 million in 2008 to $487 million in 2010, the Projo’s contribution has remained basically unchanged at about 20%.

A.H. Belo declined to reveal a date for the launch of the Projo’s iPhone and iPad apps in its SEC filing, saying only that they would be introduced “at a later date.” Journal management has said the NYT-designed apps will arrive this summer.

A.H. Belo doesn’t break out how many employees each of its papers has, but the company’s work force totaled 2,200 full-time workers as of Dec. 31, down from 3,400 in 2007, plus 280 part-timers. The Journal had 562 full- and part-time employees as of March 2009 following four rounds of layoffs over the prior six months.

In a footnote, A.H. Belo also disclosed it paid $3.1 million to buy Dallas Morning News president John McKeon’s old home in California as part of his relocation agreement. The company will be hoping to have better luck selling the house than they’ve had unloading the Journal building on Fountain Street.

More Providence Journal coverage on Nesi’s Notes:


It’s paywall day for Projo’s sister paper in Dallas

March 8th, 2011 at 3:45 pm by under General Talk

Today’s the day Projo parent A.H. Belo’s flagship paper, The Dallas Morning News, finally put up its paywall after a short delay. From now on, readers will need to pay at least $17 a month to access all its content on Dallasnews.com and mobile devices, or $34/month with a print subscription thrown in.

Here’s how Morning News publisher Jim Moroney described the changes in a letter distributed to readers:

The journalism you’ve come to value in your print edition is now available in a new, easier-to-use format at dallasnews.com, as well as through new applications for your iPad and iPhone. While these digital versions will be updated at least three times during the day, we’ll also be bringing you breaking stories – complete with stunning photos, video and our first-rate reporting – as they happen.

Each of the paywalled stories on Dallasnews.com is marked with a small lower-case “d” in a circle. The paper says subscribers will only need to register once to get access across all its digital platforms.

It’s hard to say what any of this means for the Projo, but I assume the lessons learned in Dallas will be shared with management here in Providence as they prepare to move forward with their own online pay strategy.

In a memo leaked to Dave Scharfenberg last October, Journal publisher Howard Sutton said the paper would unveil a new Projo.com, plus NYT-designed iPhone and iPad apps, this coming summer. As I’ve said before, enlisting the NYT’s design savvy is a good move by A.H. Belo – I test drove the Morning News’ classy apps, also NYT-designed, and they’re quite nice.

But the Projo’s paywall remains a big ol’ question-mark for now. The paper’s executives have been talking about the idea publicly for almost a year and a half now, but it still hasn’t seen the light of day. The last we heard was October’s report of a “Diet Projo” plan, with short summaries of longer print stories posted online.

That doesn’t bear any resemblance to what the Morning News is doing, though, which raises the question of whether the Providence paper has changed its plan again – or is going its own way within A.H. Belo.

Time will tell. In the meantime, check out Pegasus News founder Mike Orren’s post from yesterday featuring Jim Moroney’s memo and Orren’s own thoughts on the Morning News’ strategy.

(photo: A.H. Belo)


Projo parent’s stock plunges 11% after earnings call

February 22nd, 2011 at 6:01 pm by under General Talk

Providence Journal parent company A.H. Belo’s stock dropped nearly 11% today – but why?

The company released a so-so fourth-quarter earnings report this morning, but that doesn’t explain the precipitous drop in the shares that began just before 2 p.m., six hours after that news came out. And the S&P 500 only lost 2% today.

Here’s today’s A.H. Belo stock performance via Yahoo! Finance; the red line is yesterday’s closing price:

Divining the meaning of stock market gyrations is a mug’s game, of course. But seeing a chart like that made my wonder what happened on A.H. Belo’s quarterly conference call with investors, which started at 2:30 p.m. our time. (Granted, the stock was already falling by then.)

But I turned up mostly empty after listening to the call. A.H. Belo executives reiterated that they will have to use $55 million of its cash stockpile – currently at $86 million – to shore up its pension plan this year. They also said it will take five to seven years to get the plan “pretty close to fully funded.”

It’s possible, then, the stock’s nosedive wasn’t related to the call at all – it doesn’t take a lot for a company with a small market cap like A.H. Belo to see a big gyration. Strange.

Other highlights from the call:

• The Dallas Morning News’ new iPhone and iPad apps were downloaded 22,000 and 14,000 times, respectively, in the month since they became available. The company will begin charging non-print subscribers $16.95/month for full digital access to Morning News content and $9.99/month for access through one digital platform, like the website or an app, on March 1.

• It doesn’t sound like the Projo’s brick headquarters on Fountain Street will be sold anytime soon. A.H. Belo first put the property, along with other Projo-owned facilities nearby, on the market in late 2008 and last year the company tried to get the City of Providence to buy it for $9.75 million – no dice. “Frankly, there aren’t any particularly strong signs that the commercial real estate market relative to those properties is picking up steam,” CEO Robert Decherd said today. A parking garage did get sold last year.

• A.H. Belo will spend $13 million to $15 million on capital expenditures this year, much of it new investments in technology to upgrade and harmonize its systems at The Journal and its other two papers. A new Projo.com with a paywall is slated to debut this summer.

• The company cut about 100 jobs combined in Providence and Riverside last year in what an executive termed “selective and very specific reductions” in certain departments. Decherd says current staffing levels should stay the same as long as revenue doesn’t decline further.

• A.H. Belo’s content chief Jim Moroney, who’s also publisher of the Dallas Morning News, acknowledged the company did not make its digital strategy a top priority until recently. “We’ve had two primary focuses over the last 12 to 18 months,” he said – increasing circulation revenue and getting more commercial printing work. “I would then acknowledge that we have not put as much of our attention and focus on the digital part of our business, in terms of ad sales, as we might have had we not had so much focus on these other two initiatives,” he said.


Projo lags sister papers as pension costs hit Belo

February 22nd, 2011 at 11:05 am by under General Talk

Providence Journal parent A.H. Belo was drowning in red ink during the last three months of 2010 after being forced to shovel $132.3 million into its pension plan.

Dallas-based A.H. Belo reported a fourth-quarter loss of $119.5 million, or $5.65 a share, compared with a fourth-quarter profit of $5.6 million, or 27 cents a share, a year earlier. Total revenue fell 3% year-over-year to $130.8 million, while advertising revenue fell 6%.

Investors weren’t thrilled. A.H. Belo stock fell 3% to $8.21 a share at 11 a.m. on the New York Stock Exchange. But that doesn’t look all that bad when you consider the stock slid to just 68 cents amid broader economic panic back in March 2009.

Nor is the loss a huge surprise; A.H. Belo executives have been warning for months that they were facing some big pension costs as part of the split with Belo Corp., which spun off its three newspapers to create A.H. Belo back in 2008. The company said it will have to put more money into the pension plan during the first half of this year.

And despite the pension charge, A.H. Belo still managed a slight increase in the size of its cash and equivalents on hand, which rose from $81 million to $86 million between Sept. 30 and Dec. 31.

The earnings report contained some bad news for The Journal specifically. Once again, the Projo’s advertising revenue – print and digital – decreased by the most among A.H. Belo’s three papers percentage-wise, both in the fourth quarter and for 2010 as a whole. (No numbers were attached.)

On the side of the ledger, the company said circulation revenue and other products like commercial printing gave the Projo a boost.

CEO Robert Decherd said in a statement A.H. Belo’s “top three priorities” for this year will be “executing on revenue initiatives, remaining vigilant on expenses, and maximizing operating cash flow.”

Stepping back, it’s striking what a smaller company A.H. Belo is now compared with just a few years ago.

In 2005, the company’s revenue totaled $822 million; in 2010, it was only $487 million. That’s 40% of revenue gone in just five years. Few statistics explain the newspaper industry’s plight better than that.

For more on The Journal’s finances, check out my “Why the Projo’s finances are healthier than you think” piece from November.


Putting the AOL-HuffPo deal in (Projo) perspective

February 8th, 2011 at 9:21 am by under General Talk

The media world is buzzing about AOL’s decision to buy The Huffington Post for $315 million – and wondering whether it’s really possible for the acquisition to pay off financially.

The Wall Street Journal’s Deal Journal blog concluded that the deal “is truly transformational” – and “may be crazy.” The WSJ points out that HuffPo is expected to have $50 million in sales this year, putting its valuation at a rather pricey 6.3 times projected revenue. And to put that in perspective, the blog used an example that should hit close to home for local readers:

Just for a sense of scale about that $50 million. Newspaper company A.H. Belo – owner of just four [sic] major daily papers - generated $119 million of revenue just in the third quarter of 2010. Yes, A.H. Belo’s revenue is shrinking and HuffPo’s is growing rapidly. But if nothing else, the fact that HuffPo is considered a wild digital media success story is a sign of how hard it is to mint money out of online ads.

Amen to that – a good reminder of how the beleaguered newspaper business can still be a pretty solid cash generator even in this late stage of the game. The gap is even more yawning when you look at A.H. Belo’s full-year 2009 revenue of $518 million – 10 times as much as HuffPo. (Full-year figures for 2010 aren’t out yet.) But you’d rather have HuffPo’s trend than A.H. Belo’s.

Locally, one of the big questions is what the HuffPo acquisition will mean for Patch, AOL’s network of hyperlocal news sites, which has already set up shop in almost half of Rhode Island’s 39 communities and quite a few in Southeastern Massachusetts, too.

Patch will be folded into AOL’s newly created Huffington Post Media Group division, and one of the company’s goals is to look for ways to have the Patch sites and HuffPo work together. A Patcher I spoke with acknowledged finding that idea a little disconcerting, since HuffPo’s unabashedly liberal reputation is quite different from Patch’s middle-of-the-road, hometown-newspaper ethos.

In the meantime, I’m eagerly awaiting AOL’s $315 million offer for Nesi’s Notes. I’m willing to negotiate!


Projo union reaches tentative deal on 3-year contract

February 2nd, 2011 at 10:23 am by under General Talk

The Providence Journal and its largest union, the Providence Newspaper Guild, have reached a tentative deal on a new three-year contract that will freeze wages and raise medical costs for the union’s roughly 250 members.

“We will lose some ground economically under the proposed agreement, and if this were five years ago, we wouldn’t even consider it,” the Guild said in a statement.

“But when you look at the devastating job losses in the newspaper business nationally and the downward trend in salaries and benefits in New England [newspaper employee] contracts over the past three years, we feel this is a deal we can live with,” it continued.

Guild President John Hill could not immediately be reached for comment. The new contract is scheduled to take effect on April 1, and its provisions include:

  • on health insurance, 10% co-pays for most medical services, a new deductible, and higher premium contributions
  • a wage freeze that calls for no raises at the Projo until other A.H. Belo employees receive cumulative increases of more than 2.5%, because Guild members did not take a companywide 2.5% pay cut in 2009
  • three paid days off in the contract’s first year if other A.H. Belo workers get a raise

Judging by the Guild’s statement, the health changes will be the toughest for its members to swallow. Here’s the union’s explanation of why it agreed to what it did:

The major changes in the agreement are in how we pay for our health insurance. Our current health plan was negotiated in 2007, well before the credit collapse triggered a near-depression in the news business that has seen papers across the country either go out of business or shed a quarter to a third of their staffs.

Our current health coverage plan was negotiated with a Providence Journal Co. that had 120 more employees than it does now, before three straight years of double-digit revenue drops.

In the surveys we distributed last fall, a huge majority said your top priority was protecting our health coverage – and you said you were willing to pay more to do that. That’s what this agreement does.

The changes don’t affect coverage. The doctor networks remain the same. The conditions and procedures that were covered before, except for in-vitro fertilization, remain covered in the proposed agreement. What changes is how much we pay. …

These are significant changes, especially when you look at our 2007 plan, which, but for a few office visit copays, essentially provided completely covered medical care. But when you look at the rest of Belo, we are still far, far better off.

I’ll update with more information if I can get John Hill on the phone. The Projo has about 320 workers who are unionized in total, so about 70 of them won’t be covered by this contract – although their contracts usually track the Guild’s.

For more on the Projo, check out my catch-all post from November.


How will the Projo’s paywall change the 7 to 7 Blog?

January 10th, 2011 at 11:04 am by under General Talk

A.H. Belo executives gave a presentation to Wall Street investors at a Citigroup media conference last week. I didn’t hear anything surprising in their comments, which mainly focused on the Dallas Morning News’ new paywall. The Providence Journal wasn’t discussed much, which may not be a huge surprise since it only contributes 20% of A.H. Belo’s annual revenue.

CEO Robert Decherd offered some cautious optimism about the company’s outlook. ”While it is not our practice to provide [earnings] guidance, our current thinking about 2011 is that 2010′s positive momentum could continue, and – together with improvements in sales force effectiveness – could result in [A. H. Belo's] revenue being flat year-over-year,” he said. (For newspapers, flat is the new growth.)

One question the event did raise for me is whether the Projo will make major changes to its popular 7 to 7 News Blog once its own “Diet Projo” paywall is put in place. Journal executives have said in the past that 7 to 7 is a big driver of traffic to Projo.com.

During his presentation, Decherd said “breaking news, wire [service] stories, classified content and other commercial content will remain free” on the Dallas paper’s site even after its paywall starts Feb. 15. “There will still be free content on the website,” Morning News publisher Jim Moroney added. “A lot of national, international news, breaking news – things that are commodity news.”

If similar rules are put in place at the Projo, I’m curious how “breaking news” will be defined. Sometimes The Journal will publish lengthy stories on 7 to 7 that are either exclusive to the paper or mirror the following day’s print story. Will those be held back, or not posted until after the morning paper is out? The fear among papers is that if they put too much news behind the paywall, they will drive readers to competing outlets. On the other hand, the more news The Journal posts for free on 7 to 7, the less need there is to buy a subscription.

Moroney also acknowledged how difficult it will be to get consumers to pay for newspaper content online, considering how long they haven’t had to do so. I think it’s worth quoting him at length to get a sense of the new strategy at A.H. Belo, which is very iPad-focused:

Do you really expect people to pay you for access to what they’ve been getting on the desktop for free for 15 years? And the answer is no – not really.

But if you take a tablet, an iPad, a [Samsung] Galaxy – and let’s take the iPad. You open it up and you’ve got a Safari icon on there and you’ve got a DallasNews app on there. If they hit the Safari icon and type in DallasNews.com and there up comes our website and it’s all for free, and then they hit the app and it says $9.99, and they say, you know, what kind of fool do they take me for? Do they think I’m going to pay them for this when I can basically get a little different presentation but all the same content for free?

So our strategy is, you’re going to have to make all of the digital channels that people can access your content through [work so that you get it] only by paying for it, or you’re never going to find out if they’re going to pay for it on one of them – particularly when you can access those two channels, a Web browser or an application, off the same device.

And so our real strategy … is pointed toward the tablets. We think there is an opportunity to start at the beginning and have people pay for access on a tablet, and let the website just sort of take care of itself.


Projo sister paper ‘not confident’ about paywall plan

January 6th, 2011 at 6:04 pm by under General Talk

Two points for honesty: Just a day after Projo sister paper the Dallas Morning News said it will start charging $203 a year to access all its content online, A.H. Belo executive Jim Moroney acknowledged the company has no idea if its plan is going to work. Here’s some of what he said in an interview with Harvard’s Nieman Journalism Lab:

When the publisher of the News told his staff about the decision, he said they must be prepared to be ridiculed and vilified for putting their content behind a paywall.

“This is a big risk — I’m not confident we’re going to succeed,” Moroney told me. “But we’ve got to try something. We’ve got to try different things.” …

Moroney is pragmatic about the paper going to a paid model. “It’s not an over-the-cliff strategy,” he said. “If this works, great, it’ll be fantastic. If it doesn’t, we can go back to providing access at a lower price or free.”

The post is well worth a read to get a sense of how A.H. Belo is thinking about paid digital content, particularly since Moroney is close to CEO Robert Decherd and likely will be involved in putting together the Journal’s “Diet Projo” paywall strategy later this year.

Moroney said he expects the Morning News’ monthly page views will drop by half after the paywall is put in place Feb. 15. If the same thing happened at Projo.com, its page views would shrink from 10.9 million to about 5.5 million each month. (Page views refers to every time a page gets loaded, as opposed to “unique visitors,” which counts individuals no matter how many or how few pages they view.) Moroney said newspapers face no other option if they want to maintain the newsrooms they have today.


Projo owner Belo is Wall St.’s favorite newspaper firm

January 5th, 2011 at 7:00 am by under General Talk

A.H. Belo executives, take a bow.

The Providence Journal’s Dallas-based owner was last year’s top performer among the country’s 11 publicly traded newspaper companies, according to an analysis by Alan Mutter, the savvy industry veteran who writes the blog Reflections of a Newsosaur.

A.H. Belo’s stock jumped 51% – from $5.76 a share to $8.7o – over the course of 2010. That was more than the other three double-digit gainers: Scripps (+46%), McClatchy (+32%) and Journal Communications (+30%).

The worst performer among the 11 was GateHouse Media, publisher of the Fall River Herald News, the Taunton Gazette and myriad weeklies like the Norton Mirror and the Mansfield News. GateHouse shares mirrored A.H. Belo’s while traveling in the opposite direction, sliding 51% from 20 cents to 0.099 cents.

Since all these companies are facing the same secular challenge – the transition from print news to digital content – what accounts for the wide disparity in their stock performances? The answer, Mutter says, is debt; A.H. Belo has none while GateHouse is staggering under it.

Here’s Mutter:

The divergent performance of newspaper stocks in 2010 suggests that at least some investors are willing to put their money on companies with low debt burdens in the belief that the publishers will have the ingenuity, revenue and cash flow to morph their companies into successful players in the digital age.

Heavily indebted publishers, on the other hand, are forced to limit investment in their companies, because they have to earmark a disproportionate amount of their profits to interest payments. To maximize profits to pay their hefty interest bills, many publishers have cut staff, squeezed newshole, curtailed circulation and taken other, similarly counterintuitve actions to come up with the money necessary to stay one step ahead of their creditors.

The selloff in highly leveraged newspaper companies means that Wall Street is rejecting publishers who are not able to invest in the long-term growth of their businesses.

This is further evidence for the argument I made last fall about why the Projo is in better financial shape than a lot of people may think. As Mutter makes clear, the absence of debt is a huge advantage for A.H. Belo compared with a number of its peers (though the company will have to shell out significant money over the next few years to deal with its pension obligations).

A.H. Belo’s relative strength could also bolster the bargaining position of the Providence Newspaper Guild, which has hit a stalemate in its negotiations over a new contract for reporters and other Journal staffers to replace the one that expired Dec. 31.

Projo executives are pointing to wage and benefit cuts at papers like those owned by The New York Times Co. in an effort to wring concessions from the Guild. But union representatives can make a credible case that A.H. Belo’s situation is at least somewhat different from the NYT’s.

Update: A knowledgeable source tells me “stalemate” is too strong a word to describe the current situation in negotiations between the Providence Newspaper Guild and Projo management, though the source acknowledges it’s a “struggle.”

WRNI’s Scott MacKay, whose reporting I cited above for that characterization, also now says the talks are “bogged down.” (MacKay worked at The Journal from 1984 until 2008, when he accepted a buyout and took his current job as a political analyst at the state’s NPR station.)

The Guild and Projo management are scheduled to hold two more negotiating sessions this week, which should give an indication of whether the sides are making progress toward reaching an agreement.

(chart: Alan Mutter)


Dallas sister paper hints at Projo’s Web paywall plan

January 4th, 2011 at 10:46 am by under General Talk

The Providence Journal’s sister paper, the Dallas Morning News, will begin charging readers to access some of its content online next month, the paper reported today – and the Morning News’ plan may signal what The Journal’s “Diet Projo” paywall plan will look like when it starts later in the year.

The Morning News will offer two subscription packages:

Print+digital: The price of a print subscription, which buys delivery of the newspaper plus full access to its digital offerings, rose 13% to $33.95 per month ($407 annually) on New Year’s Day. That’s slightly less than a Journal subscription, which currently costs $416 a year.

Digital-only: The price of a digital subscription – which buys a daily e-edition, stories behind the paywall on DallasNews.com, and iPad and iPhone app access – will be $16.95 per month, or $203 annually.

So what’s going to go behind the paywall and what will remain available to anybody? “Subscriber content will include proprietary news and information produced by The News,” the paper explained. “Headlines, breaking news, most blogs, obituaries, classifieds and nonproprietary content such as syndicated wire stories will remain free.”

The Morning News’ iPhone and iPad apps, which will use The New York Times’ new Press Engine platform, will launch on Jan. 18, the same day a redesigned version of its website goes live. (The Projo’s apps and a new Projo.com are also supposed to debut later this year.) The Morning News says it’s working on Android and BlackBerry apps, too.

A free trial period for all the Morning News’ digital content will take place from Jan. 18 to Feb. 14. After that, online readers will be asked to subscribe if they want full online and mobile access.

“Newsonomics” author Ken Doctor, whom I interviewed for my story last week about the Projo’s valuation, told the Morning News he expects about six major metropolitan daily papers to be charging by midyear. The New York Times and the NYT-owned Boston Globe both plan to start doing so within a few months.

“If the product is substantial enough and meaningful enough in people’s lives, then I think they’re willing to pay for it,” Doctor said. “The biggest question I think is metros that have cut back so substantially that they have brought into question their value proposition to their readers.”

Update: The paywall announcement wasn’t the only news out of A.H. Belo. The company also said it has finished splitting its pension plan off from regular Belo (which spun off its newspapers into A.H. Belo in 2008).

I’m not an expert on corporate pension accounting, but the Morning News’ story on the transaction implies that A.H. Belo will need to fork over $53 million to its pension fund this year. That would be about 65% of the $81 million in cash and equivalents the company had stockpiled as of Sept. 30, which may help explain why A.H. Belo’s execs have been so hesitant about spending that money.


Why buyers paid so much for the Globe and the Projo

December 30th, 2010 at 1:43 pm by under General Talk

In a comment about my Projo valuation story, Jef Nickerson asked a good question:

I think an interesting thing to look at is not so much the loss of valuation, but what exactly was wrong with the world when the Journal was bought for $500 million (and the Times bought the Globe for what, somewhere in the neighborhood of a $billion?). Why did anyone ever think these properties were worth so much? When did the valuations get so out of control?

I won’t claim to be a total expert on this, but I can offer some of the history.

One factor is poor timing. The New York Times Co. paid $1.1 billion for The Boston Globe in 1993, and Belo paid $1.5 billion for The Providence Journal Co. (including its nine TV stations) in 1997. Newspapers still looked to be in good shape then – the World Wide Web was only opened to the public in 1993, and while circulation had been shrinking for years, ad revenue wouldn’t peak until 2005.

Sentiment can play a role, too; the romance of owning a newspaper helped convince Rupert Murdoch to overpay for The Wall Street Journal a few years back. Times Co. executives were enamored with the idea of owning two of the nation’s great papers, which seems to have led them to pay a premium for The Globe. Plus, the newspaper industry had been consolidating for years by the time the two transactions happened.

That said, both purchases did raise eyebrows at the time among skeptics who questioned whether either company should be paying as much as they were.

Belo paid “a very full price” for the Journal Co., one analyst told The New York Times in October 1996, and that same month the paper called the $1.5 billion price tag “a big premium.” And in the case of the NYT-Globe tie-up, this June 1993 Times story shows some experts doubted its wisdom, too:

In all of the places where the $1.1 billion deal was being studied, questions were raised that went to the heart of the modern newspaper business: Will the industry’s once-high profit margins return? Does conglomerate ownership of news-gathering businesses hurt the news? Is the newspaper business still the future?

Again and again, in meetings with securities analysts and in news conferences in Boston and New York, Mr. Taylor, Mr. Sulzberger and their executives worked to convince the skeptics. Why, Times executives were asked again and again, would the company make such a huge investment in a newspaper market so much like New York or, for that matter, in a newspaper at all?

“It is a true diversification,” the president of the Times Company, Lance R. Primis, answered. The economies of Boston and New York, he said, are different. As a strong regional newspaper, The Globe, which is much more dominant in Boston than The Times is in New York, is a different type of paper than any the company has owned before, he said.

And Mr. Primis said there were possibilities for joint distribution, advertising sales and new newspaper ventures like efforts to use the huge amounts of data they collect in new commercial ways.