06/10/2014

Thoughts on an Ohio Breakfast

Thoughts on an Ohio Breakfast

“The better to see you with, my dear.” Breakfast-friendly size newspaper.

The following post is based on remarks delivered at the Ohio Telecom Association meeting last week in Columbus:

Evolutions are often marked by discrete events that might not garner attention at the moment they occur. Nor is their impact on the greater cycle in which they exist necessarily discernible, though in retrospect the aggregate impact cannot be ignored.

Similarly, seemingly watershed events, though impressive, are not necessarily determinative of long term outcomes. Like a momentary spike in stock indexes, they may cause a sudden ripple, but in the long run may be more curiosity than consequence.

People of a certain age might remember December 31, 1985. For those who do, something momentous happened that day – it was the last morning the Columbus Citizen-Journal would have hit your front porch. That dawn saw the final edition of the newspaper’s publication, and the next morning, the evening Columbus Dispatch became the city’s morning, and only major, newspaper.

Pundits clasped their heads and wailed over the impact the shuttering of the Citizen-Journal would have on the city; the closure of a major newspaper in that era was not uncommon, but for a major state capital and university city, the thought of being a “one paper town” was sobering, if not depressing.

Over the next nearly-30 years, Columbus has grown; its population has increased, it has enjoyed economic strength rooted in a diversified local economy, and the perceived limitations of a solitary local newspaper have generated no widespread discernible effect.

When I checked into the hotel this week, however, I did a double take when I saw that day’s edition of the Dispatch. I have not been back in about two years, so I missed the shrinking of the paper from a full-size page to what is called “sub-tabloid,” a mere 14.6 by 10.5 inches; it looks about the size of the free papers that are handed out on DC or New York City subway stairs.

Being in the telecom business, my instant reaction was, “This is a sign of the times, the increasing reliance on on-line news sources and a declining market for print journalism.”

If the cessation of the Citizen-Journal in 1985 had been a relatively low impact spike, is the shrinking of the Dispatch a seismic shift?

One might develop analogies in the telecom world. According to various Federally-gathered data, local loops peaked in 2001 at 188,500,000, but by 2008 dropped to 122,597,000 – a 34.9% decrease. During a similar period from 1999 to 2008, billed switched access minutes dropped from 555 billion to 315 billion – a 43.2% decrease. During nearly that same timeframe, the number of payphones in the nation dropped from 2.12 million to ½ million – #sadsuperman. And, from 1998 to 2008, toll revenues fell 42.86% from $105 billion to $60 billion.

But, Americans are not necessarily spending less on communications – rather, they are spending differently.

In 1987, 100%  of U.S. personal consumption expenditures on communications were spent on landline telephone. By 2009, landline occupied only 36% of spending, while mobile wireless demanded 44% and Internet access took 21% . Mobile wireless subscriptions increased from 42.5 million in 1995 to 270 million in 2008, while fixed broadband subscribers increased from 38 million in 2005 to 85.9 million in 2008, a 126% increase. No wonder – YouTube reports that 100 hours of video are uploaded every minute.

So, the decreases in some telecom revenues are matched (if not exceeded) by increases and opportunities in other areas. To be sure, those are often subject to competition, and rural markets as a whole face special challenges. But, the situation is not as dire as a simple look at loops, switched access minutes and toll revenues might lead one to believe.

But my hometown paper, my Columbus Dispatch — what explains the diminished form of itself it now takes?

The answer is, simply, breakfast. Or, at least part of the answer is breakfast. Market research revealed (among other things) that people like to read the paper while they eat, and a broadsheet size format (22 x 11.5 inches) sits awkwardly on the kitchen table. And, if you hold it up to read, you cannot see your spouse (I won’t comment on that aspect of the research). More importantly, however, the revised format enables the paper to take advantage of “three page printing,” which produces three pages in the space formerly occupied by two. That results in an estimated 50% increase in color production while using 33% less newsprint.

And, the Dispatch has emphasized that content has not been reduced, though stories will be edited more tightly.

When the change came, about 50 subscribers cancelled their subscription the first day. Several dozen followed over the next several days, but after some adjustment, subscriptions have increased by approximately 1,200.

Turning back to the telecom world, the opportunities yet exist. Trends indicate reformatting, but the overall demand for services, and consumers’ willingness to pay for them, remains.