Reasons for Declining Circulations in the Newspaper Publishing Industry

This article discusses the reasons behind the declining circulations in the newspaper publishing industry, including the impact of technology and changing consumer behavior. It also analyzes the current state of newspaper leaders and provides strategies for addressing the challenges.

Running head: BUSINESS CONSULTANCY
BUSINESS CONSULTANCY
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Today’s Newspaper Publishing Industry:..............................................................................2
Data of declining revenue and circulation-........................................................................3
Status of newspaper leaders-..............................................................................................3
Reasons for Declining Circulations:......................................................................................4
External Assessment-.........................................................................................................4
Internal Assessment-..........................................................................................................9
Strategies for responding to increasing challenges:.............................................................11
Strategies for Chronicle Gazette:.........................................................................................12
Short Term:......................................................................................................................12
Long Term:.......................................................................................................................12
Conclusion................................................................................................................................12

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Introduction
Business consultancy is the offering of professional services depending on specific
concerns of organizations or small firms. The professional or group who provide the service
is known as business consultant(s). The problems can be in regards with management,
security, law and policies, accountancy, public relations, human resource concerns and
financial issues. The purpose of the paper is to assess the reasons of the issues faced by
publishing industry in the changing business environment. The paper will be discussing the
case of the publisher house, The Chronicle Gazette. The paper will present the current state of
leaders in newspaper segment. In this paper, the condition of the publishing company will be
analyzed by using the framework, PESTEL and Porter’s analysis. Internal assessment will
also be depicted by the report. The paper will recommend short term and long term steps in
order to address the changing business environment. The summary of the issues and concerns
followed with the mentioning of the deduced analysis of the external and internal analysis.
Discussion
Today’s Newspaper Publishing Industry:
The newspaper Industry is facing declining ad sales, the industry is facing challenges
with the drop of classified advertising. United States have faced cutbacks, closure or
bankruptcy in the recent years, resulting in the employment shed of the journalists. The older
print publishers are facing issues with the Internet media, which is causing the sinking of
revenue. The biggest concern is the sustainability of newspaper industry in the new era of
technology. The industry have faced issues with the introduction of Television media in
1950s. Moreover, the major impact on the declining subscription was caused by the
advancement in technology, resulting in internet media. Consumers are getting numerous
options for acquiring knowledge about any specific topic/news (Nytimes.com). The industry

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is facing issues because of the transformation of ‘readers’ into ‘viewers’. The leaders like The
New York Times, Wall Street Journal and The Washington Post are also facing challenges
for coping up with the changing consumer behavior and increasing technological
advancements.
Data of declining revenue and circulation-
In the year 2017, the total estimated value of United States daily newspaper
circulation (both print and digital) was around 31 million in the weekdays, which marked an
11 percent down and around 34 million on Sundays, which depicted a fall of 10 percent from
the year 2016. The print circulation faced the highest declines, as around 11 percent decrease
was experienced in the weekday print and 10 percent in Sunday circulation (Kim, Daewon,
and Seongcheol). The information realized by the Newspaper Extinction Timeline in the year
2010 projected that the news-on-paper will become loose its significance in the near future in
U.S. The News Media Alliance of America stopped offering data from the industry in 2013
(Kanellos).
Status of newspaper leaders-
The data of the leading giants reflects that the print and digital circulation have fallen
by 9 percent in weekdays and Sundays. The leaders like The New York times, The
Washington Post and Wall Street Journal are facing challenges and decline (Blackman).
From the assessment of the financial statements of these leader companies in newspaper
industry, the estimated advertising revenue in the year 2017 was around 16.5 billion dollars,
which indicates a decrease of 10 percent from the year 2016 (Auwal). The estimated total
circulation revenue of the leading companies was 11 billion dollars, which indicates a slight
change of 3 percent from the year 2016 (Graham et al.)

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Reasons for Declining Circulations:
External Assessment-
PESTEL Analysis of U.S market:
Political Factors:
U.S. is considered as the 2nd largest democracy in world. The election criteria and process of
U.S. are transparent and fair. The political climate of U.S. is stable and reflects influencing
power for political dynamics of other countries by promoting democracy in the world. U.S.
reflects a great position for the destination of FDI (Foreign Direct Investment). The countries
has an advanced infrastructure, technological implementations and political environment
attract the multinational companies for Foreign Direct Investment.
It is positive for the newspaper industry as stability in political environment will
support the changing strategies of the companies. However, the increasing technological
implementations and political state attract many multinational companies which can offer
competition in terms of internet media.
Economic Factors:
The largest economy of the world is U.S. in regards with nominal GDP. It has an
enormous numbers of headquarters of the leading brands and entrepreneurial ventures, which
contributes towards the socio-economic structure of the country. In spite of the recession of
2009, the country recovered rapidly. However, the country may become the third largest
economy in the year 2050 in regards with the GDP by the purchasing power parity.
It is positive for the newspaper industries as the positive economic status reflects the
high income rate and employment opportunities, which can be targeted for increasing the
number of subscriptions. On the other hand this can also be the reason for challenge as the

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high purchasing capacity will allow the consumers to switch for different option in the
market.
Social Factors:
U.S. is considered as the one of the most diverse country in the world as one in every
three Americans will portray ancestry of Asia, Africa or Latino America. The education and
health sector of U.S. is very efficient. The mind-set of the population is very liberal and
acceptance rate is very high
Greater rate of diversity implies the high rate of acceptance which is utilized as an
opportunity by the internet media providers in U.S.
Technological Factors:
The global leader of technology and science is U.S. The demand and acceptance of
technological advancement in U.S. is very high. In the technological background, the country
is facing challenges by South Korea, India and China.
It is proving to be a challenge for the traditional operations of newspaper industry as
they are unable to convince readers for opting the news-in-paper rather than the mammoth
rates of available data in the internet.
Environmental Factors:
The country has a diverse climate and geography, which attracts a high rates of
tourism in U.S. In the year 2014, approximately 75 million travelers visited the country. But
the country is facing massive climatic changes and environmental degradation because of the
pollution rates.

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It can be a negative factor as the paper industry can add to the pollution rate by
utilizing the trees for producing newspapers. However, it has been observed that the paper
industry is getting greener by minimizing the coverage of deforestation.
Legal Factors:
The states of U.S. reflects its own structure of government as well as has its own legal
scheme. The business operating in U.S. comes under regulatory environment of each state.
U.S. also works towards protecting and supporting Intellectual Property Rights. It can be
positive for the newspaper companies.
Porter’s Five Forces Model- Newspaper Publishing Industry:
Threat of new entrants:
The investment cost of entering into the Newspaper Publishing industry is not very
high and companies are adopting innovative ways in changing the operational functions of
their business for enhancing the reader or viewer experience. The new entrants can present
competition in regards with providing added values and by setting different pricing strategies.
Threat of new entrants is high.
Bargaining Power of Buyers:
The bargaining power of buyers is high as the consumers are experiencing a wide
range of options for acquiring knowledge about daily news and happenings. Moreover, the
increasing technological advancement in this field constructs the changing customer
requirements and preferences.
Bargaining Power of Suppliers:
The number of publishing companies in U.S. is more than the number of suppliers of
raw material, which can make the position of the supplier dominant in this industry, resulting

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in a high bargaining power of suppliers. It present as challenge for the leading and developing
newspaper companies in regards with the advantages in negotiating prices. Moreover, with
the increasing rate of technological implementation, the revenue of the newspaper publishing
companies is decreasing, presenting a negative position in the supplier negotiation. High
bargaining power of suppliers minimizes the profitability of the newspaper publishing
companies.
Threats of Substitute Products or Services:
The threat of substitutes in the newspaper publishing company is high, specifically
because of the changing technological advancements in the market/country. The major
substitute for this industry is the internet news sources which offers convenience and low
price (Gibbs).
Competitive rivalry:
The newspaper industry is very competitive in regards with acquiring knowledge and
information. The competitors of The Chronicle Gazette are The New York Times, The
Washington Post and Wall Street Journal. There are numerous other competitors in digital,
paper and internet fields.
External Factor Evaluation (EFE) matrix- The Chronicle Gazette:
Weight Ratings Weighted Score
Opportunities:
 Customer Loyalty
formed by the
company
 One of the leading
15 % 3 0.45

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newspaper brand
 Increasing demand
for online setup
 Penetrating the
initial viewers by
incorporating
discounts.
10%
30%
10%
3
5
3
0.30
1.50
0.30
Threats:
 Currently not
offering online
features like video
clips and web links.
 Increasing
competition in
online news
sourcing websites
and in digital media.
20%
15%
5
4
1.00
0.60
Ratings:
1- Poor
2- Below average
3- Neutral
4- Good
5- Superior

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Internal Assessment-
Organizational processes and structure:
Chronicle Gazette organizational process is very simple with the reporters
functioning on an end, searching content and information for attractive news. Content writers
are responsible for writing articles which has quality information. The sales team of
Chronicle Gazette is responsible for selling ad space effectively. The city editors are
responsible for managing news and information in a specific metropolitan area.
HR Capabilities:
 Publisher- The responsibility includes the operational duties for both business and
editorial team. Publisher monitors the functions and business capabilities.
 Editor- The responsibility includes the content managing and assessment of the
budgets for editorials.
 City editor- The responsibility involves covering news of metro-area, where the
offices are located. City editor manages a large portion of employees and is
responsible for gathering and assessing news for a particular area.
 Copy editor- The responsibility includes the assessment of the written stories in
regards of the spellings, grammar and meaning.
 Photo editor- He/she is responsible for editing and aligning the pictures according to
the photographed content and information.
 Graphic editors- The responsibilities includes designing graphics from researched
information, which supports news stories form newspaper.

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 Reporters- They are responsible for acquiring information from different segments of
environment (Grubenmann, Stephanie and Miriam).
Financial Position:
The newspaper publishing company is facing decreasing revenue rates as it is facing a
strong competition from the internet sources, as information is widely available in the web. In
a traditional perspective, news and information screened in the Television used to be directly
published in the newspapers as it was considered to be prime source of receiving information
but with the implementation of advanced technology, the news is circulated in all around the
web (Laudongasse).
Marketing/sales capabilities:
The Chronicle Gazette possess a sales team who is responsible for the purpose of
handling customer advertisement. But with the increasing technological implementations, the
company have to restructure the sales team by incorporating required investments for
equipment and resources in enabling the digitalization of news publishing (Bowie). The
company also have a strong customer base which can enable the diversification of the
platform much easier.
Operational capabilities:
The operational abilities can be assessed by value-chain analysis for the purpose of
determining competitive advantages of the Chronicle Gazette. Chronicle Gazette is one of the
leading companies in newspaper publishing. It has a paid circulation of about 225,000
consumers and was rated first among the available publishing companies in specific regions,
which indicates the strong customer base. The restructuring can be designed in regards with
the outbound logistics for planning a timely delivery to retailers and internet websites
simultaneously (Larson). The aim should include the functioning of timely delivery of

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materials like ink and paper. The operational activities can be made more efficient by
utilizing the features of internet and using email delivery for content and photographs. The
company currently do not possess online version (Küng, Newman, and Picard). The company
is investing in internet access, servers and web-site designing.
Strength and weaknesses of Chronicle Gazette:
Strength-
 Strong customer base
 Positive reputation
 Strong base of Suppliers
 Wide coverage
Weaknesses-
 No online presence
 Decreasing revenue/financial capacity
Strategies for responding to increasing challenges:
 The Detroit Free Press Detroit news united operations, which increased their cost
because of the less advertisements as well as they reduced the subscriptions from
every day to three days a week for reducing the cost effects (Stout).
 Some of the newspapers are offering online readership and print content like Politico
is known for raising half of its revenue from its ads in newspaper and are efficiently
maintaining a customer base of three million online subscribers.
 Pro Publica accepted the opportunities of introducing alternative sources information
and news which are available in numerous wireless devices by publishing
investigative reports (Mierzejewska et al.)

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Strategies for Chronicle Gazette:
Short Term:
By partnering with local stores and restaurants for gift coupons, which can be used as
a complimentary items for the subscribers. The distribution of coupons for the loyal
consumer will add value to the sense of subscription and will increase the revenue by a
certain extent (Wiener, Hoßbach, and Saunders).
Long Term:
The company have to introduce online website by incorporating the resources of
internet. They can use their existing reach for promoting the establishment of internet sources
and can appoint graphic designers who can combine animation and video clips with the
published content. The number of clicks can determine the viewer engagement and ratio. It
will surely increase the state of the revenue of Chronicle Gazette (Chyi and Ori).
Conclusion
Therefore, it can be concluded from the paper that Chronicle Gazette and other
traditionally operating newspaper publishing companies should restructure their operational
and resource capabilities for responding to the changing business environment. The
publishing companies needs to adopt a hybrid structure for improving the reach and revenue
in metropolitan areas. The hybrid structure will be a combination of internet and newspaper
sources of revenue.
References:

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media’completely erase traditional media from the communication industry." International
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Blackman, Colin. "Content creation and distribution in the digital single market." info 18.6
(2016): 1-3.
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in the United States, 2007–2015." Journalism Practice 11.7 (2017): 798-819.
Gibbs, William J., ed. Contemporary research methods and data analytics in the news
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Graham, Gary, et al. Content is king: News media management in the digital age.
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