By Kelly Toughill, Business of Journalism editor
Canadian newspapers gave readers a sharp reminder this week that advertisers – not subscribers – still rule the show in print.
Four Postmedia newspapers and the Globe and Mail cancelled Labour Day publication because of low ad sales, the Canadian Press reported. Globe and Mail advertisers found out weeks ago about the change, but readers only learned Tuesday that they will not have a paper at the door Monday morning. Globe and Mail publisher and CEO Phillip Crawley said a few readers have complained about the cancellation – and the reason for it.
“Some (readers) have said, ‘Hey, what’s this about you saying it’s lack of advertising?’” Crawley said. “Well I think a dose of reality is not a bad thing. That’s the truth of the situation, so let’s not pretend it’s any other.”
The decision to pull the plug on the Labour Day edition surprised news industry experts, who called it an international precedent. John Hinds, president of Newspapers Canada, said he could not recall a daily newspaper cancelling a single edition at such short notice. Earl Wilkinson, chief executive officer of the International News Media Association, agreed. Robert Picard, who heads the Reuters Institute for the Study of Journalism at Oxford, also called it a first, but said the decision follows a trend toward fewer print editions and is likely to be copied by other publications.
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Many daily newspapers in North America have dropped a weekend edition or reduced publication to three or four times a week. The National Post hasn’t published on Mondays in the summer for the past five years.
The difference with this decision, said Picard, is predictability and the risk of disappointing loyal readers. He said holiday editions are particularly beloved by readers who have more time to savour the paper when they are not at work.
“Readers expect a paper to be there for them,” he said. “Any time you have a newspaper that isn’t there for you, that will have some negatives for the brand.”
The Globe’s cancellation comes in the midst of an industry-wide drive toward emphasizing revenue from readers instead of advertisers. Newspapers traditionally drew about 80 per cent of their cash from advertisers, and only 20 per cent from readers, but ad sales have fallen dramatically in recent years.
According to the Canadian Media Directors’ Council, newspapers have lost roughly half their share of the ad market in the past decade and now capture just 16 percent of all advertising dollars spent in Canada. Many publishers have taken encouragement from the New York Times, which dramatically boosted its circulation revenue by setting up an online paywall. The Times now brings in more money from readers than from advertisers.
Several Canadian dailies followed suit and set up online paywalls starting last year. That’s one reason the Globe decided not to publish on Labour Day, said Crawley.
“What’s new compared to last year or any previous year is that we now have Globe Unlimited that delivers content to subscribers,” he said.
Only about half of the newspaper’s 150,000 print subscribers have signed up for Globe Unlimited, said Crawley. The paper is planning a big marketing event this week that will include discounted subscriptions to the online edition.
“This is a reminder to people that the business model continues to evolve,” he said. “We have a digital subscription business that we didn’t have a year ago. Clearly that is a priority for us, to build that digital business. The fact we are doing a flash sale this weekend and that we are not publishing a paper sends a message, does it not?”
Crawley said that Globe Unlimited has about 90,000 subscribers so far, including both digital-only subscribers and print subscribers who have signed up for the digital edition. Crawley said he was not concerned that print readers might feel coerced into signing up for the digital edition, nor was he concerned about the optics of having the decision driven by advertising sales. He also said many subscribers have stopped delivery for the long weekend because they are away.
“We’re not the CBC. We are not funded by the taxpayer,” he said. “We are running a business selling content. It makes no economic sense to publish a newspaper where advertising revenue is at the lowest point of the year and when subscribers are generally not wanting their paper.”
Sunni Boot, the influential chief executive officer of ZenithOptimedia, confirmed advertisers are not upset by the decision to cancel publication.
“Advertisers are business people and this is a good business decision for the Globe and Mail,” she said.
“The Globe has a very robust website. If they choose not to publish one day, that will not diminish the product in (advertisers’) eyes.”
The National Post will not publish on Labour Day Monday, as a part of its regular summer schedule. However, Postmedia dailies in Calgary, Edmonton, Montreal and Ottawa will not publish on Monday whereas they did publish holiday editions in 2012. Postmedia executives were not available to comment on the decision.
Crawley said he has no firm plans to cancel the Globe print edition on other days, but would consider it if ad sales are low.