In the last editorial, I glossed over some of the hurdles on the new website. It is new, and we will continue to work on it and make improvements as we go. However, I also wrote about the new subscription prices, and while it made sense to me to “skip the rock on the surface,” I realize now that I should plunge deeper into the topic. From the start, I have promised transparency; it is what I expect from others, so I should, in return, do the same.
What I realized since the last publication is that while most of you have been long-time subscribers to newspapers and probably have a good understanding of how newspapers operate, it may not be a deep enough understanding to see the big picture in its entirety. I’ve pretty much worked in this industry since I was in high school, so for me, it’s as common as breathing, and so I forget that others don’t necessarily have the “insider” knowledge that those within the industry do. This is my attempt to shine some light on how newspapers function from a financial perspective so that you can have an understanding as to why we make the choices we make, or rather why I have made the choices I have in regard to the new pricing.
Right off the bat, there has to be a general understanding of how newspapers generate revenue. The New Era and Lebanon Local do this in a way that many other newspapers have done for years. We sell subscriptions to the service of news collection and we present it via a printed edition that arrives at your door once a week. Now, obviously, we add to that with online versions and in-store versions of the same thing, but the general basis for the newspaper is simply a news service that gets delivered to your door.
Currently, as of this editorial, fulfilling that service costs us $4.96 per paper per week. That’s not a full run of newspapers; that’s not adding in profit or anything like that. Simply put, the paper you are likely holding in your hands right now costs us $4.96 to put it there. Prior to the price change, we sold annual subscriptions, which is the least expensive way to get the newspaper for $43 a year. That means if you are an annual subscriber, you pay $.83 per newspaper. Eighty-three cents a week means we, as a newspaper, pay $4.13 to deliver you a news service. Now, this isn’t a guilt trip or anything like that. This is how the industry has worked.
So, if we just look at the business side of things, not the ideology of the necessity of news, you can see that right off the bat, without other sources of revenue, this business model wouldn’t last a week. This is where advertising comes into play. We, as a company, can sell advertising in the publication to offset or absorb the additional costs. But the current problem for the industry lies here.
In the past, print advertising was the peak way to market your business. If you wanted to get your business in front of potential customers, it was the most economical and easiest way to do it. Now insert digital advertising, which is substantially cheaper and can be, if done correctly, more effective than print. That leaves us as an industry trying to absorb that much-needed revenue with a more expensive and sometimes less valuable advertising model. But this isn’t breaking news. This has been an industry issue for decades. So, how do we solve this problem?
First, we have to make sure our expenses aren’t excessive or unnecessary. Newspapers have to run lean pretty much 100% of the time. Now, when I took over, that was already the case. The New Era has been running lean for as long as I can remember. But even after I took over, some technology changes made it even more so. So we, as of right now, we are lean as lean gets. Two, you have to fight against the stigma that print advertising doesn’t work or is dead. This isn’t a Ricky Bobby type situation where if you aren’t first, you’re last. No, not in the slightest. Print advertising is still very much effective and even more so when paired with online advertising. This leads me to my third point, which is you have to create creative ways for businesses to do both. You have to live in the print and digital world and do both very well, which is why we have made big strides in that direction.
Now, I wrote all that so you know we are for sure doing everything we can to hit that $4.13 mark. In all actuality, we are trying to go above that. Going over into the land of profit would be super helpful for things like updating our cameras, painting the building, fixing the roof, etc. However, the issue with relying on a high ratio of advertising vs. subscribers is that as the economy shifts up and down, so does our ability to hit that mark. This last winter has been a brutal one for businesses locally. To be fair, it’s probably been brutal for everyone financially. So, the ups and downs are expected. But in order to maintain the newspaper in the future, it will require more stability within the structure. The days of having excess revenue from advertising to pad the bottom line for the down times are gone. Simply put, you can’t compete with lower-price alternatives while raising your prices due to inflation, cost of living, and production costs. It just isn’t viable. Now, we have done that as well to try to limit the cost to the subscriber, but we are at the peak of what our market will allow for. There is no more going higher for advertisers because they simply won’t pay for it.
So, in order to maintain stability within the newspaper and the longevity of the business, we have to bring back the ratio of subscriber vs advertiser revenue streams to a more evenly distributed figure. Hence, our current price adjustment. To put it in numbers, we went from subscribers paying 83 cents per paper to $1.61. Is that a huge jump? Uh, yeah, for sure. But in reality, it probably should have been done a while ago, slowly over time, so as to not be so drastic. Even so, it’s a difference of three quarters and three pennies a week or 78 cents. I pay around $7 for a cup of coffee with a tip, and while I understand that not everyone does that, the reality of the situation is that 78 cents isn’t really much these days, especially when you look at what you get for that money. We have a full staff of people who dedicate more than 320 man hours a week going to almost every meeting, game, event, accident, fire, and whatever else to bring you the news about what is going on in your town so you can stay connected in the 20 minutes a week it takes you to read the paper. This is done all while maintaining historical records, taking photos, and documenting the town you live in.
So, in conclusion, I agree that there is a significant jump in price. But I am also of the mindset that when something needs to be done, just rip the bandaid off and do it. That mentality may come back to bite me later, but so far, it has served me well in this life, so let’s just keep rolling with it. Will the prices go up in the future? Yes, likely, as that is the way our economy works. However, I don’t know the future, so maybe not. I can say that it’s likely to be far off in the distance and much less of a drastic change. Am I happy about the price change? I am not; I don’t like stretching the limits, but stability is required, and we have exhausted all other options at our disposal. The good news, however, is that the value you receive, I feel, has gone up and will continue to rise. More investigative-type stories, better print quality, easier to read, and add in all the digital aspects, and you are getting more for your money.
At the end of the day, the choice wasn’t made lightly, but I hope now you have a better understanding of the bigger picture. I will add in that “officially,” the price change isn’t happening until the end of March, so if you want to get another year in at the $43 mark, just call us before April, and we will gladly get you squared away.
Once again, thank you all for your continued support. It is in no way possible without you. I am grateful, the staff is grateful and we look forward to many more years of service.