Strategic Planning at the Chronicle Gazette

Topics: Newspaper, Advertising, Broadsheet Pages: 11 (2900 words) Published: April 23, 2011
Strategic Planning at The Chronicle Gazette

1. Introduction

The Chronicle Gazette, a leading newspaper in San Francisco with paid circulation of 225,000 customers. It is a first-rate newspaper and over the years, its writers have won awards for their work.

Despite of the well-established image and reputation, The Chronicle Gazette is facing a severe situation that there has been a steady decline in subscriptions. In the past eight years, subscriptions have fallen by a total of 35% and advertising revenue has also dropped by 28%.

Susan Feinman, the publisher of The Chronicle Gazette, noted the criticalness of the problem and worried this will become the 21st century equivalent of buggy whip manufacturers. The company is not looking for band-aid solutions but an insight of all the challenges and to work out an effective business strategy.

This report is to provide a macro and micro review of the newspaper industry and the company; analysis threats and opportunities that The Chronicle Gazette is facing; provide long term and short term strategies to let the company continuing her leading position in both readership and profitability.

2. State of the newspaper publishing industry today

The U.S. newspaper industry is in the midst of a historic restructuring, buffeted by a deep recession that is battering crucial advertising revenues, long-term structural challenges as readership to free news and entertainment on the Internet, and heavy debt burdens weighing down some major media companies. As the distress mounts – seven U.S. newspaper companies have filed for bankruptcy in the past years – lawmakers are debating possible legislation to assist the industry. Additionally, the Federal Trade Commission (FTC) will hold a series of workshops in 2009 to look at challenges facing newspapers, television, and radio in the Internet age.

There are now about 1,400 daily newspapers in the United States and thousands of community papers, which generally publish weekly or biweekly. A handful of papers, including the Wall Street Journal, USA TODAY, and the New York Times, have a national print readership topping a million or more. The top 50 papers account for about a third of circulation, among them the big city papers that had some of the largest circulation declines in 2008. Overall, the newspaper industry, including printers, reporters, advertising salespeople and other personnel, was a roughly $50 billion business in 2002, according to Census Bureau data, employing about 400,000 people.

Publishers are experimenting with new business approaches, but there is no widely agreed-upon model to restore the link between newspaper content and earnings, which has been partially severed on the Internet. Newspapers depend on advertising for about 80% of revenues. Even after investing major sums in technology, and attracting millions of online readers, less than 10% of overall newspaper ad dollars are Internet-driven. At the same time, print readership is falling, further cutting into subscription and advertising revenues. It is predicted that more than half the approximately 1,400 daily newspapers in the country could be out of business by the end of the next decade.

Some media experts have suggested that the best approach is arms-length federal involvement, where Congress provides federal funding to support the general practice of news gathering, rather than supporting specific newspapers. Such proposals include helping newspapers convert to employee-owned or nonprofit entities, increasing public trust to support reporting, bolstering journalism programs affiliated with educational institutions.

Congressional committees are considering holding additional hearings on the state of the newspaper industry, but as yet there is no major push for legislative action. Advertising revenues do not appear to have revived during the first half of 2009, opening the possibility of further deep staff layoffs and pay...
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