An online focus is coming back to bite newspaper companies, the Otago Daily Times’ editor says. David Williams reports.

Despite advertising falling off a cliff, and its community papers dormant, the group editor of the country’s third-biggest publisher says there haven’t been layoffs and it’s unlikely any of its newspapers will fold.

Family-owned Allied Press – which prints the Otago Daily Times, a bevy of communities, including Christchurch’s Star Media, as well as a regional TV station – was caught by a Government edict last Friday that community papers weren’t essential services and should close. But most of the Dunedin-based company’s non-daily print offerings were already taking a temporary “holiday”, group editor Barry Stewart says.

“We haven’t put anybody off,” he says on Friday. “People have taken annual leave or lieu days and we’re supporting our staff as best we can.”

The company hasn’t applied for the Government wage subsidy, he says. “But we will apply obviously. That’s just a given really.”

Asked if some of its papers won’t return from the forced hiatus, Stewart says: “That is the furthest thing from our mind.” Yes, the circumstances are extraordinary, he says, but the company sees its papers as vital to their communities. “We’re certainly there for the long haul.”

(He adds the caveat that he’s taking an editorial perspective. “There are other factors involved.”)

Advertising disappears

The drop-off in advertising is stark. On March 14, the main section of the ODT Saturday edition was 46 pages, dropping to 42 the following week. This past weekend – the first since the national lockdown – that dropped to 24 pages, propped up by several Government Covid-19 ads.

“Yes, fallen off a cliff, that’s pretty accurate,” Stewart says. “You’ve just got to look at the makeup of newspapers throughout the country over this period and we’re not alone in taking a hit. The real estate industry, the car sales, all those things are gone as far as the potential for advertising.”

Last week, listed company NZME, which publishes the New Zealand Herald and owns a stable of radio stations, issued a profit warning and was cutting costs company-wide.

On Saturday, New Zealand’s biggest newspaper publisher, Stuff, now owned by Australia’s Nine Entertainment, said with businesses closing because of Covid-19, many have stopped advertising which has had a major impact. “We have reluctantly reduced the size of our newspapers.”

It’s yet more of a squeeze on businesses that still get much of their revenue from newspapers but are losing paying subscribers who read stories online for free – before the newspaper hits their driveway. Even the ODT’s stories are put online the morning of publication.

Stewart says: “It’s come back to bite us, hasn’t it, as an industry.”

Isn’t it the perfect time, then, for the ODT to implement the online paywall it told subscribers four years ago was on its way?

“It’s continued to be looked at seriously,” Stewart says. “Certainly we’ve made steps to be able to put that in place when we feel the time is ready.”

Delivery declines

National average circulation figures give some perspective.

Between the end of 2017 and September last year, the ODT has dropped from 32,417 copies to 30,067 – a less-than-disastrous 7 percent. (That seems almost in spite of itself sometimes, considering the Garrick Tremain cartoon debacle and a 2017 column that drew a rebuke from then Race Relations Commissioner Dame Susan Devoy.)

Over the same period the Herald, which now has a paywall for premium online content, has dropped to 100,073, 13 percent down. Wellington’s Dominion Post and Christchurch’s The Press, meanwhile, have suffered declines of 22 percent, to sit at about 37,000 – a loss by both Stuff papers of more than 10,000 copies a day.

And now the gut punch of coronavirus.

Stewart says while Saturday’s ODT has dropped in size a huge amount, through the week it’s not too bad. “And we’re looking at adding elements to the paper to ensure that those that buy it get good value, and are not only informed but entertained as well.”

From today, the daily will add more puzzles, for adults and children, and revamp its features section, with a fair sprinkling of food elements throughout the week.

Has a 25 percent-off offer to new subscribers worked? Stewart says he doesn’t have exact numbers but they have gone up – and he hasn’t heard of wholesale cancellations.

“I think it’s encouraging and illustrates the value of what we offer. More and more this whole issue is about community, isn’t it? It’s about taking care of ourselves and respecting what goes on around us. And our focus has always been that – as a newspaper, we’ve always focused on our community and no more so than now.”

The challenges aren’t all financial. Stewart says gathering stories is fine for his journalists for now but he worries about finding non-coronavirus stories in two weeks’ time. “In some ways it’s an exciting sort of challenge because it’s new territory, isn’t it? And we’ve got to think a bit harder about our content and about how we find it.”

Once the lockdown’s over, it’ll be an opportunity for the company to reinforce the value of print, Stewart thinks. “And for those people that had left print for other platforms, that’s an opportunity for them to reassess and see the value of it.”

Given the distinctly different strategies of the country’s newspaper owners, time will tell if a post-Covid-19 ushers in what seems like an unlikely renaissance for print. That might change, however, if the Government changes tack and spends big on newspaper advertising. Whatever happens, Covid-19 has meant even more uncertainty for an industry that has struggled to find a sustainable business model.

DISCLAIMER: The writer used to work for Allied Press, under Barry Stewart

David Williams is Newsroom's environment editor, South Island correspondent and investigative writer.

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