Media Upheaval

By November 28, 2013Business, Business News

With revenues tanking and readership dying off the old newspaper media is going through an enormous number of significant changes in the coming weeks and months in the Lower Mainland.

After announcing it would sell its Kennedy Heights printing facility in Surrey, British Columbia, Postmedia announced today it will pay Black Press to print The Province newspaper when Kennedy Heights closes.

According to a release by Postmedia:

The Company has entered into two separate print outsourcing agreements for the printing of its Vancouver-based newspapers: one with TC Transcontinental Printing for the production of The Vancouver Sun newspaper and the other agreement with Black Press Group Ltd. for the production of The Province newspaper.

In July 2012, the Company announced a three-year transformation program targeting operating cost savings of 15%-20%. Operating cost reductions realized through the shutdown of Kennedy Heights referenced above, represent a portion of these previously announced savings.

Times Layoffs Coming
The layoffs of ad production workers at the Abbotsford and Chilliwack Times newspapers are expected to become effective as of Dec. 13 and the sale of the papers to rival Black Press is expected by December 31.

The layoffs were announced last October when Glacier Media, owner of the newspapers, revealed it would be shipping ad production jobs overseas.

There has, as yet, been no public announcement of the fate of the Abbotsford or Chilliwack Times newspapers when Black Press takes over ownership of those two titles as announced in October.

Ownership Changes
In November, as part of the six newspaper swap between the two chains, the South Delta Leader changed hands moving from Black Press ownership to Glacier Media ownership and ran an editorial saying that, despite some changes at the paper, they would be continuing to publish.

Both chains own their own printing presses and pay themselves to print their own newspapers so, as long as individual papers break even or lose only a little money, from an accounting point of view, they may still be valuable assets in the sense that they essentially funnel advertising dollars, through the printing presses and into the parent company’s bank account.

The other sea change happening due to technology is the move by some of their biggest advertising customers – the grocery store chains – to get out of the flyer insert business.

This could endanger the fundamental business model in the Lower Mainland since community newspapers in the Lower Mainland converted themselves into free distribution, door-to-door flyer delivery companies in the early 90s in order to take the lucrative flyer insert market away from Canada Post.

Having abandoned circulation and subscriptions as a source of revenue, they now face a perfect storm of reduced national and display advertising due to the slow economy since the stock market crash of 2008, the disappearence of classified advertising due to the internet and the prospect of their flyer revenue evaporating.

The sales, swaps, contracting out and possible shutdown of titles may have just started as the industry faces the biggest problem of all – the death of its readers as they age and their inability to attract those in the 25 to 40 year age group who rely predominantly on the internet for news and information.

Join the discussion 2 Comments

Leave a Reply