January 11, 2016

How does USA Today survive? Why isn't it broke?

As I have done in the past with papers like the Austin American-Statesman and Dallas Morning News, I took a few extra minutes at the library on Saturday to peruse USA Today.

I'm not looking for those oh-so-fine McNewspaper stories. Rather, I'm looking at what is called, in the industry, the "ad hole."

Before the Internet, then online classifieds, then the housing bubble, blew up the newspaper ad world, they tried to have an ad hole that was 50 percent. In other words, half the space in a newspaper, on average, was supposed to be ads.

That percentage has faded in the past decade or so, and hence editorial side staff cuts. Forty percent is considered decent on better days of the week, like somewhat Thursday, and even more Friday-Sunday.

With paid obits, they count as the space equivalent of ads. "House" ads, promoting the newspaper, or newspaper partnership services, do not.

Well, the USA Today weekend edition last weekend had an ad hole of less than 10 percent.


So, how does Gannett print that rag without going broke?

I know, that because it sells few ads, it has a small ad sales staff. I know that it prints in partnership with other papers, or at Gannett chain sites. I know that its writers are like a mini-AP for Gannett papers in the chain.

Still, it's a print paper with some overhead and almost zero ads. Has Gannett really priced this out? Or maybe it overprices writer syndication costs to member newspapers. From what I know of stuff like this, corporate headquarters doing "cramming" on individual newspapers is not at all uncommon.

Update, Jan. 20: That said, per this piece on Medium, it should be broke. An audited circulation of less than the Washington Post and L.A. Times? Huge free fall in numbers? Can't believe Gannett's not going to pull the plug, or go web-only with a paywall. You can then make it into a news hub for other Gannett papers.

Of course, that audit may, or may not, count its being inserted inside of some of Gannett's regular dailies, which makes even less sense.


PDiddie said...

USAT's revenue stream is much stronger M-F, as they cater to the business traveler. Complimentary copies at hotels pad circulation, their ad reps profile a desired demographic, and print national advertising (from my aged experience; I was the NAM at the Midland Reporter Telegram in the late '80's-early '90's) has essentially no place else to go, not including the coupon wrappers or shared mail.

So hotel chains, rent-a-car companies, and luxe-brand retailers (Lexus, Rolex, etc.) who want cheaper print than the Robb Report have few options left.

I'm kinda surprised they still do a Friday (their weekend) edition, because that news is awfully stale by Sunday, and as you point out it's an expense-suck.

Gadfly said...

Wasn't thinking they printed in as relatively small a place as Midland.

Still, with free hotel wi-fi, etc., and online competitors, you'd think that even M-Thu is not that viable any more?

PDiddie said...

I don't know if they still do circulate there, but Midland-Odessa's airport has a few frequent flyers with large disposable incomes.

Just speaking for myself, I read a USAT article about once a month online and not at all in print... unless I'm traveling, and then I'll read it in the morning, on the plane, etc.

Gadfly said...

Same rate of reading here. And, by my metrics, the American-Statesman and Cox folks should have faced reality a couple of years ago, already, and killed the Monday paper in Austin.