Decline of Newspaper Industry and Strategies for Chronicle Gazette

This report discusses the current condition of the newspaper industry, reasons for declining revenue, external and internal assessment of the industry, strategies with examples, and short and long term solutions for Chronicle Gazette.

RUNNING HEAD: BUSINESS POLICY 0
The Chronicle Gazette
Business policy
Report
Student Name
[Pick the date]

BUSINESS POLICY 1
1. Introduction
The chronicle gazette one of the leading newspaper of the United States and Susan Feinman
is the publisher of this newspaper. The chronicle merely has 225,000 customers in the United
States. This report includes a current condition of the newspaper including data and status of
newspaper leaders. There is a brief discussion about the reason for declining in the revenue of
the industry and newspaper companies. This report includes the external and internal assessment
of the newspaper industry and company. Further, there is a discussion about the strategies with
the three examples. The last discussion is on the short and long term, which the company must
adopt.
2. Current newspaper publishing industry today
Newspapers are a precarious portion of the United States news landscape but emerging
changes in the newspaper industry affected the newspaper industry and Americans read daily
news on the internet. The major problem is created for the companies who do not have any
online publications as they forced to depend on the print products. As many advertisers shifted to
the digital platforms, which results in the decline in the revenue. The smartphone is the major
reason for the declining revenues in the newspaper industry. Digital content producers have a
different kind of readers and publicizing revenues from newspaper publications. The newspaper
industry of United Stated 2000 companies with total annual revenue of 30 billion (State of news
media, 2019). The main sources of revenue of newspaper companies are advertising and market
stand sales. The major source of revenue for the newspaper industry is advertising (Arnago,
2009).

BUSINESS POLICY 2
2.1 Statistics on falling circulation and revenue
The estimated flow of daily newspaper in the America 2018 was 28.6 million for the other
days and 8% to 9% on Sundays (Constance, 2011). Weekly circulation of newspaper in the
United States reduced by the one percent in 2018 compared to last few years. (Jahangir, 2016).
The declining data of circulation and revenue of chronicle gazette as advertising revenue is
decreased by 28% and subscription rate of this newspaper company is reduced by 35% (Pringle,
2011). The largest newspaper circulation companies also face a decline in revenue in the past
over years including advertising, printers and other personnel. There was only $50 billion in
revenue in 2012 and only employed 400,000 people, which also reduced in recent years (Arnago,
2009). The top circulation newspaper like The New York Times, The Wall Street Journal, Daily
Print Six Newspaper, and Chicago Tribune clearly explains the drop of circulation and revenue.
The New York Times 1,039,031-3.55% (Glenn, 2017), Chicago Tribune 504,202-7.47%
(Constance, 2011) the Wall Street Journal 2,082,189-0.61% (Barthel , 2017) and Daily Print Six
Newspapers 2,113,725-7.26%. (Barthel , 2017).

BUSINESS POLICY 3
Figure 1: Fall of Newspaper circulation until 2010
Source: (Barthel , 2017)
Figure 2: Fall of newspaper circulation until 2018
Source: (Tavares, 2019)
2.2 Position of newspaper front-runners
The reason for declining in the newspaper industry is the high accessibility of the internet
by the high-base consumers and easy availability of news on the internet. The popularity of
news sites is increasing day-by-day is the reason for the declining revenue of print media.
The positions of the top newspaper in the newspaper industry are as follows:

BUSINESS POLICY 4
1. The New York Times: New York Times is globally newspaper is global media
Newspaper Company devoted to providing high-quality news and information. According
to the current research, there is a fall down of circulation by 7 percent and there is a 10.5
% increase in the newspaper web audiences in the last few years (Anthony, 2011).
According to the Audit Bureau of Circulations, there is a 20.6 declined noticed in The
New York Times post as compared to the Chicago Sun-Times (Constance, 2011). The
newspaper media controller of the New York Times said in the conference” There is an
overall 5.5 fall in the circulation which is little worse than expected”. There is a slight
decline in the NYT than the newspaper industry average because weekly circulation falls
down to 3.6 percent (George., 2012).
2. The wall street Journal: Wall Street Journal is America’s major newspaper with the 2.2
million subscribers (Anthony, 2011) . Journal enlarged its core content, which includes
personal health, the fitness of people, real estate, arts and culture, and effective lifestyle.
The top 25 newspapers of the global world are facing a downfall in the circulation except
for the Wall Street Journal, in which a circulation increased by the 0.6 percent gain
(Glenn, 2017).
3. USA Today: USA today has adapted the change very easily, which increases the
readers by seven million. According to the Audit Bureau of circulations, USA Today is a
leader in the news mobile applications as it more than 21 million downloads (Arnago,
2009). USA Today is also gets affected as its circulation is dropped by the 7.5 percent and
reduction in the weekly circulation (Barthel , 2017). USA Today is still the best
newspaper in the print media industry (Holm, 2013).

BUSINESS POLICY 5
3. Reason for declining circulations and revenues
The major reason for declining in the circulation and revenue is news content is free
availability of news content online that can get easily from the internet. Another reason for
downfall in the circulation and revenue as there are millions of phone applications, website, and
blogs, articles is dedicated to providing information to the users of the internet. At present,
people are more comfortable on freely online information compared to the paid copy of the
information. The Chronicle Gazette is facing a problem of subscription losses as the newspaper
industry reduced by the 28 percent (Holm, 2013). Print media regulators facing a problem of
losing subscribers because of the advancement in technology and communication. Every 8 and
10 people in America are reading news online rather than physical newspapers and 39% of
Youth of United America is reading online content on the mobile devices because rates are
cheaper or free in nature (Jahangir, 2016).
3.1 External assessment
Susan Feinman recognizes that there is a reduction in the subscriptions and revenues in
the newspaper industry even the top companies is facing a problem of subscription losses such as
The Times of India, The USA Today and The wall street Journal.
3.1.1 Economic forces
An economic factor includes demand and supply on both long and short term. The
economic recession in the newspaper industry forced the print-media companies to shut down
the business and because of the enormous decline in the revenues. The economic downturn in the
newspaper industry results in the drop of the 15.3% advertising revenues (Holm, 2013). The

BUSINESS POLICY 6
financial crisis put print media industry into trouble and many businesses took substantial debt
save from the insolvency or economic downturn hit. Numerous print-media companies have
benefit pension plans, which left unfunded because of the heavy losses in the market
investments. Many companies approach investors but it is difficult for the investors to invest in
the declining business. Stakes of the newspaper industry in declined by 80% over the year and
with the declining revenues newspaper companies are afraid to breaching the financial
agreements (Jahangir, 2016).
3.1.2 Social, cultural, demographic, and environmental forces
According to the social factors, Readers are looking for the media content that enduring
value and interest. Newspapers companies must print which prefers the value and interest of all
communities. According to the cultural factors, companies must maintain a balance between the
unscrupulous news and moral news. As for the demographic factors, companies must identify the
line with the changing interest of the readers, for example, the aging populations like news that
based on evidence and items with aggressive. In relation to demographic factors, the customer
base is changing according to the trends print-media should accordingly. This is the main reason
why subscriptions are failing in the newspaper industry ( Marina, 2015).
3.1.3 Political, governmental and legal forces
The rules and regulations are different from country and country. There are different
restrictions and policies as accordance with the processes of print media companies. Political
factors control the delivery process of print media and companies must use rightful materials,
which should not harm the environment. Consumption of lawful materials is very important as it

BUSINESS POLICY 7
governed by the proper authority. The media and broadcasting in the print media companies
must be in an ethical and legal manner. Political factors in a newspaper industry have a large
influence on regulation and especially for those who published their content on the national or
for EU, ASEN, and NAFTA. Political factors affect business-trading agreements on the region
and national level. A legal factor includes permissions and licenses before issuing any content,
which involves some confidential information (Marina., 2015).
3.1.4 Technological forces
Technology is a major factor in the newspaper industry. The main reason for the downfall
in circulation is the internet and digital media. In digital media, most of the information is
available in a virtual world. The Internet provides information to the people by the only simply
click and free. Newspaper industry majorly earns profit from the advertisement segment which
currently affected by the internet and digital media. Many advertisers replace the traditional
method of advertisement with the TV, YouTube ads, Online Websites and roadshows on public
transportation. Search engines also affected the newspaper industry and become quite popular.
Online advertisements have many advantages it attracted many audiences with colorful graphics
mode and animated flash graphics. In the modern world, companies are adopting technology-
related laws. Technological forces include notice, choice, and access ( McLennan, 2018).
3.1.5 PORTER’S Model
The threats of new entrants in a newspaper industry can be measure by the low to
medium scale because production and sales of newspaper in the industry is mainly in the hands
of top newspaper distributor. Product differentiation is not part of the newspaper industry

BUSINESS POLICY 8
because products are not different or non-standard one. The equipment in the newspaper industry
such as video recorder, printing machines, and cameras are relatively high-priced so there is no
barrier of the government. At present, the major top newspapers hold contribution to the
newspaper industry, which leads to low benefits in the industry. The small entrepreneur has to
face many difficulties because the high cost is required for the print media business ( Michael. ,
2014).
Bargaining power of the buyers is very high in the newspaper industry because the
customer has different sources to acquire information such as the internet, free distribution of
newspaper on the different places. The basic reason of the high power the product in the
newspaper industry is similar and non-standard which customers can simply found another
product in the market such as The Wall Street Journal, The USA today and The New York
Times. Customers have an option of switching at any time on the very low price or free. The
Chronicle Gazette main reason of declining revenues as it is a paid newspaper so customer
substituted their product with the internet or with the free newspaper distributing on the street
(Wasko, 2014)
Bargaining power of the suppliers can be measured on the scale of median to high
because the top newspaper companies control the paper and ink material supplier only buy they
sell to many. The factory of the ink and printing are idiosyncratic in nature, which builds
powerful connections between switching costs existed. Suppliers in the newspaper industry can
able to integrate with the newspaper companies in a backward and forward manner to made
interaction with the customers. (Tavares, How can newspapers survive? By measuring their
social impact, 2019).

BUSINESS POLICY 9
The threat of substitute product is relatively high in since it may be observed that up-
trend of online publishing by the print media companies is low cost and current content is
favored by the people. The traditional print out newspaper is a high cost in nature and mainly
disliked the audience. The threat of substitute product diminishes the potential returns of print-
media companies. Changing cost print-media companies is low which may have a strong effect
on the newspaper industry. Rivalry among the industry is high and it may be observed that the
newspaper industry revenue generation is very low not only Chronicle Gazette facing a downfall
of revenue but others dominators also facing the downfall such as The New York Times, Wall
Street Journal and The USA today. According to the research of newspaper, industry due to
economic recession print media companies faces an 11.5% downfall, which destabilizes the
newspaper industry (Newspaper Publishing Industry in the US, 2019). The after-effects of an
economic recession are price cut competition in the market, for example, “Apple daily” launched
HK and then sold it out in $2 whereas other companies were selling out in the $5, which erode
the whole industry profitability (Sebastian, 2014).
3.1.6 EFE matrix
The EFE matrix refers to the External Factor Evaluation (EFE) matrix. The newspaper
industry dominated by the major newspaper companies, which creates the biggest threat for the
Chronicle Gazette. Few companies in the newspaper industry are trying to maximum utilizing of
direct mail, Internet and displaying marketing. Many companies diversifying the areas and
adopting innovative change like multi-media formats. Adopting innovative change require
highly automated skills and significant computerization that have an impact on the newspaper
industry (Holm, 2013)

BUSINESS POLICY 10
4. Internal assessment
4.1 Organizational processes and structure
The Chronicle Gazette organization main reason for lagging behind from the technology
world is an insufficiency of prevalent distribution channels. Susan Feinman filed to utilize the
technological advances of the emerging market. Major rivals exploit the advantages in an
efficient manner but Chronicle Gazette failed at this (Holm, 2013).
4.2 HR capabilities
The Chronicle Gazette is capable enough to recruit fresh new talent because as per the
proof its writers receive many awards that presume HR capabilities to grow highly effective
people. HR takes its decision on the performance of the writers.
1. Publisher: Publisher is in authority to manage the operations procedure of entity with
both editorial and business team. The major objective of the publisher is to observe the
newspaper progress in a healthy manner. Susan Feinman is responsible for all thus
responsibilities in the chronicle gazette.
2. Editor: The major responsibility of the editor is to monitor the content of the newspaper.
The other responsibilities are budgets and cash spent on the newspaper by the editorial
( Purdy, 2019).
4.3 Financial position
Revenue in the Chronicle Gazette is declining day-by-day because of the news websites
and the internet. Subscribers and advertising volume are declining on a regular basis. After

BUSINESS POLICY 11
observing this situation Susan Feinman decided to bring a change in the organization and ready
to make investment and embark on change, for example, the online alternative format in the
newspaper of chronicle gazette adopted by the Susan Feinman. Traditionally news and
advertisement was the only way to provide the information to the public but in recent times
information can be gathered form the internet and news websites, which highly affects the
financial position of the companies in the newspaper industry ( McLennan, 2018).
4.4 Marketing/sales capabilities
The publisher of Chronicle Gazette Susan Feinman only focused on the print media
segment, which is the only distribution channel of the company. The Chronicle Gazette is
engaged in the market analysis of the company to evaluate the position of the company in the
newspaper industry. The marketing capabilities of this company state that, it already had a sales
team to manage the customer advertisement so it only needs enough investment to digitalize the
content through the internet and television. Chronicle Gazette has a strong customer base and it
only needs to adapt the latest technology. The company also has an alternative option to move to
another segment of the customer for the big and widen vision. This is the only option for the
company to survive in the trends of the future (Anthony, 2011).
4.5 Operational capabilities
Operational capabilities in the newspaper industry refer to how efficiently resources are
utilizing and how the company is adopting the changing technology. The chronicle gazette has
drivers to strengthen with the level of major players but they are under operating internet-based.
The major problem is that advantages from technology is not utilizing properly and set aside.

BUSINESS POLICY 12
The newly subscriptions in the company are not properly explored and can improve the prices at
a fair level. The current position of the company is that the company does not have an online
version and company requires investment to implement the IT equipment’s such as cam-
recorder, web-site designer and servers. Security concerns must observe by the company that
confidential and privacy content through the internet. How many different access one subscriber
has must observe by the company (Holm, 2013).
4.6 Strength and weakness
The major strength of the company has the capability to explore the new markets and
distribution channels or expand into the new print products physical and online. There is a high
circulation of the newspaper and leading newspaper in the metro politician cities. It also provides
a discount to the subscribers that usually attract the consumer. One of the weaknesses of the
company Susan Feinman is afraid to explore the new media. The major challenge for the
company is to adapt the digitalization in the newspaper industry. The company do not have
online version of newspapers with the less experience of online publishing (Constance, 2011).
5. Strategy (with three examples)
The marketing strategy of the company is they providing the online subscription with the
discounted price and providing free interesting headlines to draw attention of the customer.
Company gives option to the company to remove unwanted news from the account. The current
strategy of company is they update the news in every 2-3 hours. The three examples are
Diversify, Synergies and Organic growth (Glenn, 2017)

BUSINESS POLICY 13
Diversify: It states that company must adopt the product differentiation to evaluate the
demographics of its consumer database. Susan Feinman must publish the new publications with
the IT equipment such as CD-ROM’s and other online media. The company must also give the
option to watch the news in different languages. Advertising method of the company must be
intensified (Jahangir, 2016).
Synergies: It states that the new promotional methods to maintain sustainability in
business are very important in this emerging market. The company must expand its marketing
channels on a global level and must include publicity campaigns. The resources of the company,
which related to E-commerce, must fully utilize.
Organic growth: It states that, news should always be of high quality and which is not
hurting someone’s sentiments. The writers of Chronicle Gazette must engage in the in-depth
analysis and must compete with the positive titles (Constance, 2011)
6. Steps
6.1 Short-term steps
In the process of setting, the cover prices, Susan Feinman must consider the effect of
changes in copy sales in revenue from the sides of customers and advertisers. The company must
improve the sales and marketing team in order to achieve new challenges in the market. The
company must give training to the staff about the IT equipment.

BUSINESS POLICY 14
6.2 Long-term steps
Company meorgeust review the skills and evaluate the job performance of the staff on a
regular basis. The company must cut-down the operating expense by 20-30% in the production
department. If the company does not have sufficient budget to implement the long-term steps
Susan Feinman should enter into the merger with a small company. The company appoints
freelancers to write professional writing (Glenn, 2017).

BUSINESS POLICY 15
Bibliography
Marina, D. (2015). The Scottish newspaper industry in the digital era. Media, Culture & Society, 107-
114.
McLennan, D. (2018). A once unimaginable scenario: No more newspapers. Retrieved from The
Washington Post:
https://www.washingtonpost.com/news/theworldpost/wp/2018/03/21/newspapers/?
utm_term=.add209c940b5
Michael. , D. (2014). Guidelines for applying Porter's five forces framework: a set of industry analysis
templates. Competitiveness Review , 32-45.
Purdy, S. (2019). Stop the Press. Retrieved from KPMG :
https://home.kpmg/content/dam/kpmg/co/pdf/co-17-01-08-tmt-stop-the-presses.pdf
Anthony, D. (2011). The emergence of nano news: Tracking thematic trends and changes in US
newspaper coverage of nanotechnology. Journalism & Mass Communication Quarterly , 55-75.
Arnago, T. (2009). Fall in Newspaper Sales Accelerates to Pass 7%. Retrieved from New York Times:
https://www.nytimes.com/2009/04/28/business/media/28paper.html
Barthel , M. (2017, June ). Despite subscription surges for largest U.S. newspapers, circulation and
revenue fall for industry overall. Retrieved from Pew Research Center :
https://www.pewresearch.org/fact-tank/2017/06/01/circulation-and-revenue-fall-for-newspaper-
industry/

BUSINESS POLICY 16
Constance, H. (2011). Untangling dynamic and operational capabilities: Strategy for the (N) ever‐
changing world. Strategic management journal, 1243-1250.
George., R. (2012). Mass Media in Changing World History, Industry. Londan: Controversy.
Glenn, C. (2017). Organizational task and institutional environments in ecological perspective: Findings
from the local newspaper industry. American Journal of Sociology, 838-873.
Holm, A. (2013). Openness in innovation and business models: Lessons from the newspaper industry.
International Journal of Technology Management , 324-348.
Jahangir, K. (2016). Corporate entrepreneurship, disruptive business model innovation adoption, and its
performance: The case of the newspaper industry. Long Range Planning , 342-360.
Marina., D. (2015). The Scottish newspaper industry in the digital era. Media, Culture & Society , 107-
114.
Newspaper Publishing Industry in the US. (2019). How is the Industry Trending in the US? Retrieved
from IBIS World: https://www.ibisworld.com/industry-trends/market-research-reports/
information/publishing-industries/newspaper-publishing.html
Pringle, J. (2011). Understanding Universities in Ontario, Canada: An Industry Analysis Using Porter's
Five Forces Framework. Canadian Journal of Higher Education , 36-58.
Sebastian, K. (2014). Linking strategic flexibility and operational efficiency: The mediating role of
ambidextrous operational capabilities. Journal of Operations Management, 475-490.
State of news media. (2019). Newspapers Fact Sheet. Retrieved from Pew Research center :
https://www.journalism.org/fact-sheet/newspapers/

BUSINESS POLICY 17
Tavares, R. (2019, Feburary). How can newspapers survive? By measuring their social impact.
Retrieved from World Economic Forum : https://www.weforum.org/agenda/2019/02/how-can-
newspapers-survive-by-measuring-their-social-impact/
Tavares, R. (2019). How can newspapers survive? By measuring their social impact. Retrieved from
World Economic Forum : https://www.weforum.org/agenda/2019/02/how-can-newspapers-
survive-by-measuring-their-social-impact/
Wasko, R. (2014). Technological Forecasting and Social Change. Creativity in strategic lock-ins: The
newspaper industry and the digital revolution, 66-83.

BUSINESS POLICY 18

BUSINESS POLICY 19

BUSINESS POLICY 20