By: Gigaom
May 28, 2012 at 17:45 PM EDT
Print dies a little more as Postmedia announces cuts
Just days after U.S.-based media chain Advance Publications announced printing cutbacks and layoffs at its New Orleans and Alabama papers, a national newspaper chain in Canada said it is cutting back, laying off more staff and looking to erect paywalls at several of its papers.

The decline of print seems to be picking up speed. Just days after U.S. media conglomerate Advance Publications introduced production cuts and layoffs at the New Orleans Times-Picayune and several of its Alabama newspapers, Canada’s Postmedia chain announced on Monday that it is cutting production at several of its largest urban newspapers. The company, which emerged from bankruptcy protection in 2010 under new management, is looking to lay off dozens of staff and is also erecting paywalls at several of its papers. But the question for Postmedia and its fellow newspaper operators is: Will these cuts stem the bleeding or simply cause the decline of print to accelerate?

Postmedia, which owns daily newspapers in most of Canada’s major cities — including Vancouver, British Columbia; Calgary and Edmonton in Alberta; Saskatoon and Regina in Saskatchewan; Toronto and Ottawa in Ontario and Montreal, Quebec — said that the newspapers it publishes in Ottawa, Calgary and Edmonton will no longer print a Sunday edition. The National Post, the chain’s national newspaper, will also stop publishing on Monday during the summer (something Postmedia has done for the past several years in order to save on printing costs). The company added that it is accelerating its plans to install paywalls at many of its papers, after experimenting with one in Montreal.

Postmedia plays the Murdoch card and blames Google

The chain, which is publicly-traded in Canada, is controlled by a number of investment groups including U.S.-based Golden Tree Asset Management, which acquired the assets of the former Canwest Media for $1 billion in 2010 and refinanced the company. Although the new owners instituted a number of cost-cutting measures — including rounds of layoffs at many of their newspapers — the company lost $13 million last year on revenues of just over $1 billion, and continues to carry a debt load of about $500 million.

In a memo to employees, the company said that it needed to make the cuts to production and other moves (including the centralizing of copy-editing functions in Hamilton, Ontario) in order to “leverage its history and move aggressively into the future.” But the company also blamed some of the decline in advertising revenue on what it called “foreign-owned and controlled digital companies who, without any regulation, are accessing Canadian audiences and eroding Canadian media revenues.” In an interview with the Globe and Mail, CEO Paul Godfrey named Google and AOL as two companies that have are to blame for the decline, and said they should be regulated by the government:

Godfrey says "foreign" companies like Google and AOL are largely to blame for decreased ad revenue, and they should be regulated.


Steve Ladurantaye (@syladurantaye) May 28, 2012

Late last week, Advance Publications said it was cutting print publication of the New Orleans Times-Picayune to just three days a week in order to save money, and was also laying off a substantial number of employees at the paper — something that drew criticism from a number of quarters, including New York Times media writer David Carr. Advance has also cut printing to three days a week at several of the newspapers it owns in Alabama, and another paper it owns in Ann Arbor, Michigan made the move to non-daily publication in 2009 and now is only printed on Thursdays and Sundays.

Print is dying the death of a thousand cuts

Cuts to daily newspapers, particularly smaller ones in regional markets, have also come recently to British newspapers: Johnston Press, which owns 170 titles in Britain, shifted several of its daily newspapers to weekly publication only. And other newspapers such as the Detroit Free Press and the Detroit News have continued to print daily but have stopped delivering to home subscribers every day, encouraging them to go online for their news.

From the sounds of it, the changes at Postmedia are not likely to be the last: Godfrey said in his interview with the Globe and Mail (which publishes a competing national newspaper in Canada) that he is “seriously considering” whether to stop publishing the National Post at all on Monday. The Postmedia CEO also said that the money saved by cutting printing — and by cutting more than 20 staffers from the newsrooms at several of the chain’s newspapers, including those in Ottawa, Calgary and Edmonton — would be reinvested in digital. Advance Publications made a similar promise about the Times-Picayune.

As media-industry economist Ken Doctor noted in a post about the Advance news, the shutting down of print is part of an industry-wide “forced march” towards digital, driven by the dramatic dropoff in print advertising — a gap that is not being filled either by online advertising or paywalls. Even the New York Times subscription model, which is one of the most successful in the industry, is not producing enough revenue to make up for that ongoing revenue decline. Which raises the question: If the cuts and layoffs and paywalls at newspapers like the Times-Picayune and Postmedia aren’t enough to stem the losses, what happens then?

Post and thumbnail images courtesy of Flickr users George Kelly

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