The Perfect Storm Hits Newspapers
February 2008

It started as a disturbance in the infinite void of cyberspace.

It was fed by a vortex of technological change. As it entered our atmosphere, the winds of declining readership, plummeting advertising and disintegrating profit ratios whipped it into the Perfect Storm.

The cataclysmic event, which would wipe out the strongest institutions and forever change the lives of the people it touched, made landfall at an unlikely spot: Madison, Wisconsin.

On February 7, the staff of The Capital Times were stunned to be told that the newspaper would no longer publish a daily print edition of the 90-year-old paper.

The paper will now become an Internet publication.

According to the National Press Photographer Association's Web site: "Capital Times Publisher Clayton Frink told readers the newspaper's Web site will have "increased volume, depth and timeliness of news, opinion, and other information." Frink also said the twice-weekly tabloid-sized printed paper will be distributed to an area about five times the current circulation zone.

Beginning at the end of April the news and opinion section of The Capital Times will be published on Wednesdays and distributed along with home-delivered subscriptions to the Wisconsin State Journal. The paper will be free in newspaper racks in the Madison area.

A weekly arts, entertainment and culture section will be distributed on Thursdays with the Wisconsin State Journal and will also be free in Madison area racks.

The story in The Capital Times didn't say how many total employees would be lost from the newspaper in the transition.

In a Feb. 7 editorial that accompanied the news story of the paper's changing future, The Capital Times said:

        "Today we begin the process of taking the next logical step for a newspaper that intends to be around for another 90 years .… Over the next few months, The Capital Times will shift from distributing news via piles of papers distributed on trucks that must traverse the snow-clogged streets of our winter wonderland to the information superhighway. We'll continue to have one of the largest news-gathering and editing staffs of any newspaper our size in the country, but we'll get the stories to Wisconsinites faster, more reliably and in more detail.

        "But the urgency of the moment requires that we leave nostalgia to others."

Frink said the paper's current circulation is 17,072 but with the new plan The Capital Times will be distributed to more than 80,000. The final day for daily Capital Times publication is Saturday, April 26.

So now we see the beginning of the end for print newspapers. The tipping point has been passed. The economics of publishing has taken its toll.

The simple fact is that dropping circulation and ad revenue has led to the logical conclusion that publishing a print edition, where 50 percent of the cost is paper alone, is not sustainable.

To preserve the brand it is essential that newspapers move to the Web. The simple fact is that the Web is a different beast. Print is no longer the commodity it was. In the Web environment, video is king. The people who are best equipped to provide video are the photographers, who must now be retrained.

One of the mistakes The Capital Times is making in their transformation is to cut the photo staff in half. They don't understand that the people who will save them are the photographers. They are the only people who can carry the banner forward.

When a storm such as this hits, it blows away the strongest institutions.

The Capital Times may be the first U.S. daily newspaper to drop its print edition in favor of the Web. But there are many other publishers who are looking at the same glum financial realities. The New York Times has been running ads on television offering special packages to subscribers to take the Friday, Saturday and Sunday Times for home delivery. These are the most read editions of the paper. 

The newspaper business is the second-most profitable business. The first is drug trafficking.

The average newspaper earns a 20 percent profit. But as the circulation and advertising drop that profit is eroded. Yet the cost of newsprint and trucks to deliver the paper continues. Just as the "unsinkable" Titanic, which went to the bottom of the ocean once it was flooded after hitting an iceberg, was bound to sink, newspaper economics dictate that once the tipping point is hit, the print edition is no longer sustainable.

On the Web, the economics are totally different. Web advertising has a much smaller revenue base. Right now it is about five cents on the dollar for advertising compared with print. This means a dramatic contraction of costs. Newsrooms will have to be scaled down. But to succeed on the Web, the newspaper will have to preserve and expand its creative content.

This will offer visual journalists a dramatic new opportunity to recraft their visions in the form of video. They will become the new lifeblood that will sustain the newspaper as it recreates itself.