Community newspapers, wake up and plan for worst case 2025 now!

Community newspapers, a somewhat vague term but one that starts with small-circulation six-day dailies and goes downward in size from there, face somewhat different concerns in today's world of financial perils than do their larger siblings. This is even more true for the non-daily segment of the community newspaper world.

Non-daily newspapers don't have to worry about people going online to find AP news, because that's never been in their papers. They don't have to worry too much about slashed national advertising money. (They do have to worry about that to a degree, though; retailers and fast-food chains have cut their pass-through money for advertising and marketing to local franchises, and Valassis, the nation's No. 1 publisher of insert advertising, has increased its downward pressure on community newspapers after cutting a sweetheart deal with the United States Postal Service.)

That said, that parenthetical comment shows that community newspapers aren't worry-free. And, given that they can look at their bigger seven-day dailies, they have no excuse to be complacent.

For example, the L.A. and Tampa Bay daily newspaper worlds have hit new levels of crisis, as I blogged earlier this week.

That said, back to the community newspaper world, both the daily and non-daily sides.

First, "programmatic advertising," in which major national ad brokers use computer algorithms to find the cheapest slotting they can for their clients, is likely going to partially trickle down to those five- and six-day community daily newspapers.

And, digital ad revenue will fail to make up for print ad declines. Print ads will decline less at community newspapers, to be true, but digital advertising won't pick up much. With no wire stories, local websites just don't get that much traffic. See here for more on ad issues in general.

And, Valassis, and other major inserters, like Red Plum, will continue to apply downward pressure.

Second, circulation revenue will likely continue to slip. There's a couple of reasons for that. At the daily wing of community newspapers, days that are thinnest on community news will continue to fall in single-copy sales. More six-day dailies will thus look at moving to five-day editions. If they don't provide a slight break on subscriptions with that, they'll lose yet more folks. A fair amount of five-day dailies will look at going tri-weekly (with a mini-wire service feed) or even semi-weekly. That will save money, yes, but subscriptions will have to be adjusted at the same time. (Personal experience: CNHI tried going from five-day daily to semiweekly at the first newspaper where I worked, without crediting current subscribers or extending their subscriptions. By the time the mass of subscriptions cancellations told them what a mistake they had made, they wound up deciding to close the paper.)

Circulation revenue will slip for two other reasons. One, for community papers that have put up paywalls, there's not only no more low-hanging fruit, there's no more fruit, period. Unlike a New York Times, you can't price out mini-subscriptions for just op-eds, or just the books review, or whatever. See here for more on digital subscription issues in general; same link as above.

Also, while old white folks are the most regular newspaper readers, they're also the ones nearest death! Most of the obits in community newspapers are lost subscribers.

Meanwhile, the Postal Service is only going to get worse. Even at the NAA, I don't see anybody picking up the Washington lobbying cudgels for my ideal solution of going back to the pre-1971 United States Post Office, either. By 2025, half of the remaining regional service centers may well be closed. And, the kids of the old white subscribers, especially if the parents are dead, the kids that have moved away, will drop their subscriptions. They'll only do a digital one if it's digital-only, and discounted.

That leads to a related issue. Even if you have a paywall, saying the digital comes free with print, as a sneaky way of saying you don't offer digital-only subscriptions, won't fly forever, either.

And, Facebook in particular and social media in general will not be your salvation! If anything, it will be even less the salvation of community newspapers than it has been for major ones. Community gossip, rumor, and occasional fact are easy to get spread digitally with somebody's "community" Facebook page.

Hence, my header.

Community newspaper owners need to brainstorm what they think could be their worst scenario in 2025 — then start planning for that to happen in 2020. And then, of course, figure out how they can prevent, or at least mitigate that.

The worst case? Per that link above, newsprint prices have held pretty low. Picture them taking a major jump. Picture electricity prices for presses taking a hike as the shale gas "boom" turns out to be pretty much of a bubble by 2025. And, the Postal Service is 3x teh suck of today.

Dear community newspapers: Are you really preparing now to be really digital-first newspapers? I kind of doubt it. Even more, are you preparing for the outside possibility that your best realistic financial move 10-12 years from now might be digital-only? I totally doubt that.

Postal Service could default? Blame government

A "wow" story indeed. Facing a deficit of as much as $9.2 billion, and a $5.5 billion payment due the end of this month USPS is saying it could shut down by winter.

Here's the problem, in part, though the NYT bollixes things by noting this is an apples-and-oranges comparison in general, or, vis-a-vis FedEx, apples and broccoli:

At the same time, decades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post office’s costs. Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors. Postal workers also receive more generous health benefits than most other federal employees.

It's apples-and-oranges with both because neither one delivers mail, just packages. And, neither one would touch it as long as  the old Rural Free Delivery requirement is in place.

It's apples-and-broccoli with FedEx because, unlike UPS and USPS both, FedEx isn't unionized.

That said, speaking of RFD, more rural post offices will have to be shut. Period. End of story. As for the Norman Rockwell image of rural America being shattered? There was a time, back when, when most those burgs and unincorporated hamlets didn't have post offices. And before RFD. The post offices, at least, need to go.

So, too, does Saturday mail delivery. Even if it only cuts a small portion of the budget, as claimed in the story. (That said, making the layoffs that ending Saturday delivery would allow would save more than just the 2 percent of ending Saturday delivery.)

Anyway, the Saturday delivery issue speaks to another problem. This is one area where the undemocratic Senate, not undemocratic in the sense of GOP filibustering but in the sense of equal representation of all states, has the potential to exacerbate the problem.

Other solutions? I don't necessarily want us to go Europe and have USPS enter the commercial sales arena. That said, putting more post offices inside commercial buildings isn't a bad idea. But, we're not worried about needing new post offices in most the country.

As for postal workers being alarmed and angry? Hey, if you were dumb enough, selfish enough, or a mix of both, in the personage of your union leadership, to push for a no-layoff contract in May, at the same time Patrick Donahoe as postmaster general was dumb enough or threatened enough by strike talk to grant it, you should look in the mirror. That was the time to negotiate good layoff terms instead of insisting on a no-layoff clause.

You'd better act now, Mr. Cliff Guffey, president of the American Postal Workers Union, before Darrell Issa gets nutbar momentum behind his idea of going nuclear on your contracts.

Donahoe is talking about wanting to lay off one-third the force. Or one-fifth. I don't know which, because this story is a fuck-up there, by reporting both, and either 100,000 or 220,000 workers, in two different locations in the story.

That's only one of a number of problems with the story. The reporter doesn't mention how low postal rates are here compared to most of the world; how, in Europe, postal privatization is carefully regulated, details of postal pension plans and more information that would undercut part of the trend of the article.

Wingnuts like Issa want to privatize USPS while ignoring that private parcel service has been cherry-picking, that the government has  forced USPS into much of its problems, that UPS at least can be sucky on service and more.

Fix USPS — just not the Big Biz way

I agree with Business Week — the United States Postal Service is in serious financial trouble and needs help.

But, not what it proposes.

First, there's a big geographic and population spread difference between the U.S. and Europe, by and large.

Most privatization schemes ignore how much more rural "flyover" country is in the US is compared to anything in Europe this side of Russia. And, those older Red State rural voters who still mail lot of stuff will squawk if it's a buck a letter.

Scanning mail and converting it to digital formats? Would be great if broadband Internet, especially in rural areas, is as fast and reliable as in Europe. But it ain't, in part because union-busting Big Biz types that Business Week loves, and their GOP allies in Congress, vehemently oppose the government here getting involved with improving that.

But, given the way the GOP eats its young, like a threat to refuse disaster aid to VERY "reddish" Joplin, Mo., don't doubt it would do that, i.e., privatize the mail without requiring the retention of rural free delivery, that is, rural rates the same as urban ones. Ditto on Red State GOPer switching USPS to digitally-scanned mail without improving infrastructure. When you see how much the GOP refuses to pay for road and bridge upgrades, you know this ain't happening.

"Digital mail" in its other aspects? Utilities and other folks already have online bill-pay; that part of digital mail would go nowhere in the U.S.

NOT mentioned in this biz-friendly story — increasing the price of junk mail. On the revenue side, that would vastly help USPs, as well as unclogging mailboxes. Also not mentioned, and related — a comparison of U.S. and European junk mail rates.

Otherwise, this article seems to be an exercise in singing the praises of privatization, and of union-bashing. No shock, coming from an oftimes kinder, gentler, subtler version of Faux News that is Bloomberg.