Thursday, January 5, 2012

New Year, Same Issues?


So little time, so much to do, this falls to the bottom. Thanksgiving, Christmas, who has time to blog? So the world has probably forgotten about “TTPB.”

But a number of interesting things have happened since last we met:

Does Warren Buffett’s buying of the Omaha World-Herald – which included a number of smaller dailies in places like Kearney and Council Bluffs, not that anyone noticed – mean he sees signs of life in the newspaper business? Or does it just mean that in his old age, Buffett, to whom the World-Herald is barely an accounting mention, wanted to help out some fellow Omaha citizens – the company was employee-owned – by giving them a payoff before the value of their shares went down to nearly nothing?

Does the Albany Times-Union’s announced purchase of a new press – an increasingly rare investment in iron – mean that there’s a future for printed newspapers in the mind of the Hearst Corp.? Or does it just mean that publisher George Hearst, whose name is on the company’s door, got to finally buy the press he announced he was buying back before everything went bad, one he can leave as his legacy?

Will the move by the Columbus Dispatch to print at modified Berliner size, and print the Cincinnati Enquirer as well, find acceptance with readers who say they like the size better? Or, by the time the new size debuts, will people have simply found the whole thing irrelevant regardless of size?

And is it not interesting that while a few years back, a big ethics dustup at the Santa Barbara News-Press brought condemnations down on its publisher, in this straitened era the changes at the far larger San Diego Union-Tribune (now to be called U-T San Diego) – the publisher’s saying, “Yeah, we’re going to support a new stadium,” as well as running a jingoistic slogan on the front page – have merited only a few harrumphs? Is this because the San Diego paper has been seen in the industry as an underachiever for most of its life? Is it because the editor who was fired at Santa Barbara had many friends and allies in the business from previous jobs? Will the new publisher’s stated creed that the U-T should be “a cheerleader and a watchdog” resonate with readers who feel that newspapers have become cranky scolds telling John Q. Public how unenlightened he is for being against – oh, people like a newspaper employee-blogger who would think that calling America “the world’s greatest country” is jingoistic and lacking in journalistic objectivity rather than simply a heartfelt statement of a beloved and universally understood fact? Or is it just that no one really cares anymore what a newspaper does?

Pretty pessimistic thoughts for this pro-print blog, but the losses, the defections, keep piling up, each one giving you a little less money to operate with, while – not just in the minds of the digerati, but in any real-world scenario – creating internal resentment in companies because one has to keep spending most of one’s money on this THING, this PRODUCT, instead of spending it on these other new things that seem to bear more promise, while your competitors don’t have to. And it reminds this department store fan how within the scope of a few years, department stores went from being essential to being easily ignored -- from symbols of their cities to places you went to when you had to.

For Christmas I got three department store books – Jan Whitaker’s great look at department stores around the world (though primarily in the United States, France, England and Japan), and two of the History Press’ offerings on local department stores: “Look to Lazarus” (in Columbus) and “Burdines” (in Miami). At various points in one or another of them are reflected three points:

1), that as the shopping mall developed from strip centers into enclosed regional behemoths, the mall in essence became the department store – serving the same destination function. The department store then became one of the less-exciting departments in the mall-cum-department store, because its fixed costs, traditions, and multiple bureaucracies made it harder to change than a Spencer Gifts or a Limited. Substitute “Internet,” of course, for “shopping mall.”

2), that we need to always think about the money. Burdines Inc., for example, which dominated South Florida, was sold to Federated Department Stores in the 1950s after Allied Stores, seeing an opportunity, started opening Jordan Marsh stores nearby. Burdine’s had largely defined the Florida resort-wear look among department stores, but didn’t have deep enough pockets to compete with Allied on the one hand and the rise of discounters on the other. It had a wonderful business and loyal customers and had done great work, but just take away a small percentage of that and your profit margin is gone. Substitute “other web sites” for “Jordan Marsh” and “discounters.”

3), that trying to cover every bet may get you to the same place as not trying to cover every bet -- it may be that you just can't win. Metropolitan department stores felt they had to open branches everywhere to be competitive and cope with the defection of shoppers from their downtown stores to suburban sites. But as an official of the F. and R. Lazarus Co. noted, you increase your costs nearly three times fold with three stores, but your business doesn’t increase by the same amount, because much of it is just transferred from one site to another. You spend X times 3 to make X times 2. As a result, service, training, and upgrading kept being cut back, making the department stores less distinguishable from what had previously been seen as inferior competitors. This was simply the law of unintended consequences at work. It remains to be seen whether “multiple platforms” is the substitute for “branches everywhere.”

If Hutzler’s in Baltimore, as noted in Michael Lisicky’s book, had just moved its operations from downtown to Towson, it could have had a very profitable store for years – but could not have stayed competitive in the market as Stewart’s, Hochschild Kohn, Hecht’s, Penney’s, and Sears flooded the market with branches. But by having to open more and more stores to remain in the community consciousness, the company was drained – as in the end were most of its competitors, all from trying to keep up with each other and everyone else. Substitute “multiple platforms” for “suburban sites.”  Hutzler’s was the best department store in Baltimore, but that did not save it. Its competitors were seen as perhaps not as good, but as good enough – which put them and Hutzler’s in the same category.  "Less efficient" doesn't mean "worse" -- it just means "more costly."

Well, let’s not think about that. Let’s end with a paper that believes in print, the Washington (Pa.) Observer-Reporter, as forwarded by my relative Larry Stratton: Online, this article has been read 283 times. Help it out. Spread the word.

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