Strategies for Declining Newspaper Industry

This report discusses the decline in subscriptions and advertising revenue in the newspaper publishing industry. It analyzes the external and internal factors affecting The Chronicle Gazette and provides recommendations for coping with the challenges. The report also highlights strategies adopted by other companies in the industry.

Business policy and strategy

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Contents
Introduction................................................................................................................................2
State of the newspaper publishing industry today......................................................................3
Data on declining circulation and revenue.............................................................................3
Status of newspaper leaders, e.g., New York Times, Wall Street Journal..............................3
Reasons for declining circulations and revenues.......................................................................6
External assessment................................................................................................................6
Economic forces.................................................................................................................6
Social, cultural, demographic, and environmental forces...................................................6
Political, governmental and legal forces.............................................................................6
Technological forces...........................................................................................................7
Competitive forces..............................................................................................................8
External Factor Evaluation (EFE) matrix...........................................................................9
Internal assessment...................................................................................................................10
Organizational processes and structure................................................................................10
HR capabilities.....................................................................................................................10
Financial position.................................................................................................................10
Marketing/sales capabilities.................................................................................................11
Operational capabilities........................................................................................................11
Our strengths and weaknesses as a publisher.......................................................................12
How companies in the publishing industry are adjusting their strategies to cope with the
challenges.................................................................................................................................13
Steps The Chronicle Gazette might take in order to deal with the challenges.........................14
Short-term steps....................................................................................................................14
Long-term steps....................................................................................................................14
References................................................................................................................................15
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Introduction
Because of the dynamic nature of the media industry and the increasing competition among
the organisations operating in it, a number of companies are registering losses repeatedly and
it has also contributed to shutting down of some business. There are innovations constantly
happening in the industry and because of the new mediums for communication of the news,
the competition on the news caste has also become unbearable. No business organisation or
industry is devoid of competition and driving on its own. This document presents the details
that address the problem of the decline in subscriptions to The Chronicle Gazette the
newspaper and the reduction in the advertising revenue earned by them. The purpose of this
report is to provide a strategic vision to the organisation by outlining the current state of the
publishing industry the analysis of the external environment, internal assessment of The
Chronicle Gazette and the Recommendation of the steps that the organisation can take to
bring about changes in the current studies for coping up with these changes and challenges.
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State of the newspaper publishing industry today
There is a tremendous decline in the demand for the newspapers and there is also
spontaneous change in the needs and Expectations of the customers who are opting for the
electronic media over the print media. The subscriptions of The Chronicle Gazette have
reduced by 35% and the advertising revenue for the organisation has also reduced by 28%
within the last decade. Even the other popular newspapers and the industry leaders like the
New York Times and Wall Street Journal are facing the brunt of reduction in the subscription
base. This has contributed to a steady decline in the sales and the revenues resulting from
them for the entire newspaper publishing industry.
Data on declining circulation and revenue
The Chronicle Gazette was leading in the metropolitan area and claimed to have a paid
circulation of 225,000 customers. However, the circulation rate for the newspaper has
reduced by 28% and it looks like the situation is not getting better anytime soon. The overall
revenues of the organisation have reduced by 23% as a result of the decline in the sales of the
company and the reduction in the circulation and the customer base.
Status of newspaper leaders, e.g., New York Times, Wall Street Journal
The major players in the newspaper publishing industry like the New York Times and the
Wall Street Journal are also suffering from the changes in the market dynamics. They have
registered losses in their subscription base and the resultant loss in the overall revenue of the
company. The organisations are going the digital way to ensure their continuity of operations
and are also trying new ways and strategies to ensure that they continue to meet the needs and
expectations of their customers. The following news headlines indicate the extreme situation
of the print newspaper industry due to the increasing competition and the decline in sales and
revenues.
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(Moses, 2018)
(Willens, 2018)
(Thompson, 2016)
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(Barthel, 2017)
While there is a significant increase in the digital subscriptions for the newspapers that are
helping the overall circulation total of these organisations, different circulation for all the
major players in the industry is registering a decline year after year.
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Reasons for declining circulations and revenues
External assessment
The biggest reason identified for the decline in the circulation rate and the revenues for the
newspaper publishing organisations changes in the tastes and preferences of the customers.
This section presents the external environment analysis of the newspaper publishing industry
by accessing the various macro environmental factors that influence their operations.
Economic forces
The circulation of the newspapers throughout the United States of America is influenced by
the economic forces live the GDP, the average household income and the price paid by the
consumers for the alternative sources of information. Since the news is easily available to the
customers on the digital medium for free, they might not be willing to pay for the newspaper
subscription anymore.
Social, cultural, demographic, and environmental forces
The social, cultural, demographic and environmental forces impact the circulation and the
subscription of the newspapers. The social and cultural factors are influencing the way people
receive news. There is no major change in the cultural factors but it is found that a majority
of the subscriber base comprises of the daily and Sunday subscriptions of the newspapers
comprises of the adults over the age of 55 years. The social changes if the preferences of the
people and made them more reliant on the electronic sources for getting instant information
but the Wall Street Journal, the New York Times and Washington Post continue to be the
leading newspapers in the market (Berzins, 2017).
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Political, governmental and legal forces
The political, government and legal forces influence the regulations faced by the newspaper
organisations, the media and freedom of the press. The restrictions that the government has
put on the publishing organisations and all the media houses have restricted them to carry out
research and publish content without much scrutiny and approval. The general freedom of
organisations and of generalist has also become limited in the current political and
government setting.
Technological forces
The biggest contributor to the reduction in the subscriber base and the revenue of the
newspaper publishing organisations are the technological advancements in the industry. The
Chronicle Gazette, as well as all the other newspapers including the leading players like the
Wall Street Journal, the New York Times and Washington Post, are suffering from a
reduction in their sales, subscription and the resulting sales revenue. The advertisers also feel
that print media is no longer fetching the desired results and therefore they have moved to to
the more advanced and technologically developed ways of advertising ok with the help of
search engines and social media platforms. It is cheaper for the advertisers to promote their
contents and target the desired customer segment through these mediums as compared to the
newspapers. It is also easier to keep track of the success rate and efficiency of advertising
from the digital platforms and therefore they have become the more preferred medium of
advertising contributing to the reduction in the advertising revenue of the print newspapers.
However, the technology has also opened numerous avenues for the newspaper industry as
the organisations have now adopted the digital platforms and most of the newspapers have
restored to presenting online news that helps in fulfilling the needs of the customers to get
instant gratification and information at their fingertips (Maleka, 2014).
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Competitive forces
Michael Porter has developed the five forces model that is used for analysing the strength of
the competitive forces in the industry and the overall attractiveness of running the business in
it. The Porter's five forces analysis for the newspaper industry is conducted here:
 Threat of new entrants
The threat of new entrants in the newspaper industry is very low as the already established
players have achieved the economies of scale. It is difficult to compete against the established
newspapers that have developed a huge subscriber base and strong credibility among the
audience.
 Threat of substitutes
There is no threat of substitutes is the product that is the newspapers non-standard and
therefore it is difficult for the organisation to practice product differentiation that makes one
product different from the other.
 Competitive rivalry
The competitive rivalry among the organisations is medium to high as the prices of the
newspapers are very low. The organisations are already finding it difficult to compete against
each other and therefore the overall competitive rivalry in the industry at present is high
(United Nations, 2015).
 Bargaining power of the buyers
The bargaining power of the buyers of the Chronicle Gazette is not very high because of the
huge subscriber base but the switching cost from one brand to the other is not very high and
therefore the overall bargaining power of the current and the potential customers is moderate.
 Bargaining power of the suppliers
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The suppliers of the newspaper industry are not consolidated and do not hold much power
against the established and well-renowned newspaper brands (FTMS, 2014).
External Factor Evaluation (EFE) matrix
External Factor Evaluation Matrix is another strategic management tool used for carrying out
the assessment of the current condition of the business organisation. The EFE matrix for
Chronicle Gazette is presented below.
Weight Rating Weighted Score
Opportunities
Digital marketing platforms 15% 4 0.60
Increase in demand 15% 3 0.45
Industry consolidation 10% 2 0.20
Development of sales channels 8% 3 0.24
Threats
Entry of a new competitor 5% 1 0.05
Price wars 15% 4 0.60
Economic downturn 12% 2 0.24
Government oversight 20% 4 0.80
Total 100% 3.18
The total weighted score of the newspaper industry 3.18. This indicates that the organisations
operating in this industry have an average ability to take steps for responding to the external
factors that influence their operations (McKay, 2016).
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Internal assessment
Organizational processes and structure
The Chronicle Gazette laid off some of its staff in the year 2014 because of the inability of
the organisation to meet the expenses by compensating these employees. The organisation
suffers from a steep decline in the sales and the revenues and the number of copies printed by
the organisation in the last decade has also reduced by 31%. The advertising revenue for the
organisation has dropped and they make use of dated Technology for taking pictures and for
printing the newspaper resulting in making the newspaper comparatively less appealing than
their competitors. The distribution technique adopted by the chronicle gazette does not
employ any new technology and the economic instability of the organisation can be attributed
to the lack of technological advancements in their operations (The Enterprise Foundation,
2009).
HR capabilities
The corporate organisation of the chronicle gazette includes a publisher responsible for
analyzing the procedures related to the marketing and editorial work along with analyzing the
financial performance of the company. The editor holds the responsibility of going through
the content carried by the journal and also responsible for budgeting for the editorial activities
of the company. The photographer is involved in taking pictures of the events and situations
on which the articles are written. The chronicle gazette only has one photographer and
sometimes they source their pictures from other entities.
Financial position
The financial performance and position of the organisation are weak because of the
continuous decline in the revenues and the number of subscribers. In the year 2014, the
organisation registered a loss of 2 million dollars lost to the online publishers of the news.
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The investors are also selling the shares of the company at a lower price further contributing
to the decline in the equity. The liabilities of the chronicle gazette are constantly increasing
and the organisation is facing a challenge in receiving bank overdraft because of the
undecided future of the entity.
Marketing/sales capabilities
The sales of the chronicle gazette have reduced because of the reduced in the subscriber base.
People are increasingly opting for the digital medium of news because it is available free of
cost and with increased accessibility. Most of the news sources online present information in
a more attractive and engaging manner resulting in a negative impact on the sales of the
newspapers of the company and for all other organisations as well (Kawata, 2015).
Operational capabilities
The chronicle gazette is a leading newspaper that has been popular among the readers in the
metropolitan areas. The organisation had excellent operational capabilities and the valuation
of the company was managed well enough to provide them with a competitive advantage.
However, the organisation is unable to adapt itself with the changing times and Technology.
They are still making use of the dated channels of distribution that have become ineffective
and inefficient. There are diverse readers located at different locations and therefore there is a
need to update the delivery process. Newspapers are also considered to provide historical
information and people are looking at the digital mediums that provide instantaneous
information as it is happening. The current customer base of the organisation is limited to the
few states of Illinois, Massachusetts, Wisconsin and Ohio. On the other hand, the Other
leading newspaper organisations like the New York Times and Washington Post are well
established throughout the United States.
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Our strengths and weaknesses as a publisher
As a publisher, it is the responsibility of a newspaper to have a good reputation and include
trained individuals who have the knowledge of the latest technology to bring about the
necessary changes with the changing times. The chronicle gazette has a set of perennial
readers who continue to stay loyal to the brand but because of the lack of the ability to keep
up with the changing times and embrace the technological advancements, the organisation is
suffering as a publisher and is unable to cope up with the changes in technology and
advancements (Anderson, 2016).
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How companies in the publishing industry are adjusting their strategies to cope with the
challenges
The companies in the publishing industry have brought about changes in their strategies for
coping up with the challenges posed by the technological advancements. The organisations
have developed and released an online version. The big players in the market like the New
York Times and Washington Post have expanded their customer base by allowing
International subscribers to subscribe and avail the facility with the help of internet. These
organisations provide unique subscription bundles to the customers to choose from increasing
the choice for them and empowering them at the same time (Nickols, 2016).
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Steps The Chronicle Gazette might take in order to deal with the challenges
Short-term steps
The short-term steps to be taken by the Chronicle gazette for dealing with the challenges are
to immediately consult the IT specialists and go through the process followed at the
company. Your organisation needs to cut down further on the redundant staff for bringing
down the cost of operations and increasing their profitability. They should develop a digital
version of the newspaper that is available to the customers 24/7 and that is constantly updated
with the latest news and articles. Your organisation should also carry out an assessment of the
distribution channels to bring about the necessary changes in it for enhancing the productivity
and efficiency of the operations of the company (Raman, 2018).
Long-term steps
A long term strategy required by the chronicle gazette is to work towards increasing the
customer base of the company by targeting diverse customer segments. The organisation also
need to bring about a complete restructuring in the current organizational hierarchy by doing
away with the redundant departments and staff and hiring the people on the basis of the new
structure and strategy. The digital newspaper will reduce the cost of printing and distribution
and the organisation can make use of it for reducing the price of the newspaper attracting
more customers and motivating them to subscribe to it for a long time. The organisation
should work towards keeping the employees motivated and energized for immediately
adapting to the changes in the customer needs and technological development happening in
the industry (Kawata, 2015).
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References
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revenue fall for industry overall. Retrieved from https://www.pewresearch.org/fact-
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