New Detroit Daily: Nature (and Entrepreneurs) Fills Gaps
Ah, even the name is a rebuke: Detroit Daily Press.
Entrepreneurs Mark and Gary Stern announced today that, within 60 days, Detroiters will once again be able to get a newspaper delivered to their door seven days a week, though it will have neither the Detroit Free Press nor Detroit News name attached to it. The Sterns certainly have a mountain to climb to achieve the break-even, 150,000 circulation model they've set out as the goal.
The fact that the Stern brothers are even trying is what bears notice. It parallels a launch of another kind, a coast away. In March, Barbara Bry and Neil Senturia, wife and husband entrepreneurs, launched the San Diego News Network.
Yes, SDNN is an online site, while the Detroit Daily Press is a print product, with some secondary digital presence to come. Both, though, point to an emerging reality: The rapid shrinking of daily newspaper companies is beginning to leave vacuums in local markets and marketplaces. Entrepreneurs are assessing those gaps and moving to create products that will work — profitably. Expect these announcement to only accelerate as we see an economic recovery take hold.
There's an irony in that, of course. Daily newspaper publishers have been making the point that the new economics of the news business simply won't pay for business (and staff and product) as usual. They are right, of course — given their economics, but not necessarily the next guy's.
In making reductions, they've had to hit the panic button more often than the strategic switch, and that inevitably may have left them open to competitors of all kinds. They may not have protected their flanks well enough in cutting back. If the enterpreneurial pioneers turn into a parade, newspaper publishers will have a new headache: intensifying competition for the local ad dollar, and for readers' share of attention.
In Detroit, the exposed flank is home delivery. Publisher Dave Hunke may well have been right that the Detroit Newspaper Partnership was unsustainable in its traditional form, and that cutting whole days of home delivery made sense for Gannett and MediaNews. He exposed the flank though — a big flank of maybe more than a 100,000 baby boomers and up (in age) who want the newspaper delivered to their home. They don't want an e-edition to be read on a computer, and they don't want to wait 'til they get trundled off to an old-age home (DNP has decided to keep up daily delivery to senior citizen facilities). They want a newspaper. Delivered.
Call it a Starbucks buy. Yes, you can get coffee in infinite ways, but if you want it brewed and handed to you in a handsome container, you are willing to overpay for it. Many baby boomers — circulation price increases that continue unabated through the recession are testament to this — are willing to overpay to feed their habit. Yes, baby boomers use the web for news, but not voraciously, and, for most, not as a first form of preference.
In San Diego, the flank is different. The Union-Tribune never was a great paper, but it was fine being a mediocre paper in a great market. Now, it is slimming rapidly — over time its workforce had been cut from a high of 1422 to new-layoff-aided target of 850. Its news product is less than it was and its reach is less than it was. Its remaining staff isn't feeling all that positive about what's next.
In San Diego, in Detroit and in other cities as entrepreneurs join non-profit start-ups, like Voice of San Diego, expect new pressures on ad pricing. When dailies could deliver 50% of households on any given day, they could set pricing. As their reach has declined into the 30 percentiles in some areas and as online advertising poses its own competition, pricing is under pressure. Not only will the Detroit Daily Press move to sign on familiar (laid-off, bought-out) bylines and take readers from the two older dailies, it will aggressively price its advertising. If SDNN and Voice of San Diego, along with the broadcasters and the alternatives, continue to grow, they'll be taking business away from the Union-Tribune and leaving it with smaller margins on the business it is able to keep. (We can see the same process at work in Seattle as the remaining legacy daily, the Seattle Times, has to fight off a growing swarm of online and niche print competitors.)
While the barriers to publishing entry only get cheaper — Internet production and distribution, outsourced printing and physical distribution — apparently the barriers to traditional daily demise only get lower.