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14:00

Does investing in print help the bottom line? Discouraging evidence from the San Francisco Chronicle

The Globe and Mail is the latest newspaper to double down on print — investing big money in a new, glossy, full-color format aimed at making the value of news-on-paper more clear. As Canadians kvell over the print redesign and read the national daily without the inky stain of newsprint on their fingers, it’s worth remembering that the San Francisco Chronicle made a similar move almost a year ago.

Last November, the Chronicle began printing its weekday front page, section fronts and select inside pages on high-gloss paper as a way to lure advertisers and strive for “magazine-quality production,” publisher Frank Vega and editor Ward Bushee said at the time. (The paper revamped its layout in February 2009.) It was an interesting move, considering that less than eight months earlier the paper, facing the threat of closure by its parent company Hearst, was shedding nearly $1 million a week. The switch was a result of a 15-year, $1 billion deal between Hearst and Canadian printing giant Transcontinental, which opened a $200 million plant near San Jose.

Looking at the numbers, it’s hard to see any improvement from the move. Circulation numbers are still in decline, and the Chronicle has scaled back glossy printing to its Sunday paper only. Which raises the questions: Is glossy paper worth it, both in terms of circulation and advertising? And if readers enjoy a smoother feel to their paper, does that warrant the extra cost?

“I don’t think so,” Chronicle president Mark Adkins told me. “You would have to be part of a broader strategy that would include more commercial printing and higher consumer pricing. It’s not a good tactical move for other papers.”

Lack of advertiser response

When it switched to glossy, the Chronicle circulated around 251,782 weekday papers, a 26-percent drop from the previous year. By March 2010, weekday circulation was down to 241,330. The economy certainly takes part of the blame, but the marketing power of a classier kind of newsprint doesn’t seem to be having much of an impact. It costs about 30 percent more to print on the new heat-set presses, which are rare (and expensive) in the newspaper industry.

“On the ad side, advertisers have not responded to it at all,” Adkins says, although the Chronicle wouldn’t reveal specific ad revenue numbers. When the Chronicle switched to glossy, it had “no advertisers lined up,” Adkins adds. The move was primarily aimed at consumers, to present a more luxurious product. But to some extent, that’s what the Chronicle expected when it restructured its business model around readership and circulation revenue, rather than advertising, almost two years ago. Even before the arrival of glossy stock, the paper had increased single-copy and subscription prices. Readers have responded favorably to the new paper, Adkins says, but they’re shouldering more of the production cost.

But back when the shift was made, Adkins also emphasized the appeal to advertisers, leading the San Francisco Business Times to write: “Without naming names, Adkins said that some advertisers who are now playing ball with the Chronicle wouldn’t before. They shunned newspaper ads because ‘they don’t deliver the brand image they require,’ he said — an obstacle the Chron’s new paper removes.”

“People are definitely and truly intrigued when they see copies of the Chronicle,” says Chuck Moozakis, editor of the print innovation monthly Newspapers & Technology. “The paper is trying to send a signal that you can have a newspaper that looks like this and not like that. But it’s a challenge now.”

Looking internationally

The Chronicle won’t be phasing out high-gloss paper any time soon — not with that $1 billion Hearst deal — but Adkins isn’t ready to champion glossy as the savior of the print industry. That’s partly because in most cases printing on high-gloss paper requires outsourcing — a costly and alienating move — to independent commercial presses like Transcontinental. Heat-set presses simply aren’t ubiquitous enough in the United States to make higher-grade printing a viable option for most newspapers.

As for Canada’s Globe and Mail, editor John Stackhouse told readers that he wasn’t looking to the American newspaper market for inspiration when it comes to his “Proudly Print” approach: “Rather than study the U.S. market which is fairly depressed in terms of newpaper innovation, we looked to quality papers in southern Europe, Latin America and parts of Asia and found a great array of ideas that encouraged us to pursue a bold and confident look as well as a design that would continue to support great, in-depth journalism…One of the principal goals of the redesign is to raise the quality of The Globe at a time when we feel many other media are reducing their quality.”

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