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The Vanishing Newspaper in the 21st Century Innovation

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Executive Summary The media have been covering the bad news about newspapers for years. To see and read these accounts is to encounter an industry that seems on the verge of crisis, and possibly on the edge of the abyss. In many U.S. markets, the dominant paper is a fading enterprise. In the long run, no newspaper is safe from electronic technologies. A crisis of confidence is combined with a technological revolution and structural economic change to create what can only be described as the perfect storm and as younger readers turn toward free tabloids and electronic media to get news. To be certain, all is not as well as it once was at the Miami Herald. Circulation, which has been on the downward spiral for two decades, has lately shown signs of free fall. Young readers are scarce, newsroom budgets are tight, and the competition remains unrelenting. Newspapers have wounded themselves with a series of credibility shredding scandals and screw ups. The Internet, with its vastness, its vibrancy and its immediacy, does seem poised to blow away the snoozy old newspaper.
Introduction
The U.S. newspaper industry is suffering through what could be its worst financial crisis since the Great Depression. Advertising revenues have plummeted due in part to the severe economic
Down turn, while readership habits have changed as consumers turn to the Internet for free news and information. Newspaper publishers in 2012 have seen some improvement in financial conditions, with many reporting higher profits, but the industry has not yet turned the corner. Advertising dollars are still declining and newspapers have not found a stable revenue source to replace them. As the problems continue, there are growing concerns that the decline of the newspaper industry will impact civic and social life. As old style, print newspapers decline, new journalism startups are developing around the country, aided by low entry costs on the Internet. The emerging ventures hold promise but do not yet have the experience, resources, and reach of shrinking mainstream newspapers.

Congress has begun debating whether the financial problems in the newspaper industry pose a public policy issue that warrants federal action. Whether a congressional response to the current turmoil is justified may depend on the current causes of the crisis. If the causes are related to significant technological shifts the Internet, smart phones and electronic readers or societal changes that are disruptive to established business models and means of news dissemination, the policy options may be quite limited, especially if new ways of reporting and, equally important, advertising are beginning to emerge.
History
The word Herald is defined by the Webster’s dictionary as an official messenger of news; and as a result serves as a suitable name for The Miami Herald. Since its inception more than a century ago, The Miami Herald serves as South Florida’s largest newspaper. On average, “The Herald has an estimated daily print circulation of approximately 160,000 and 230,000 on Sunday in South Florida, Latin America and the Caribbean” (The McClatchy Company, 2006). Its early history traces back to September 15, 1903, when The Herald then called the Miami Evening Record, published its first edition. Subsequently, in 1910, Henry Flagler bought the newspaper and on December 1st renamed it The Miami Herald. It was during this time that The Herald was known as a “reporter’s paper” because it gave their writers the opportunity to use freedom of expression. (Choeff, 2006) In terms of advertisement, in 1920 during the Florida land boom, The Herald was the largest newspaper in the world. However, in 1930 due to financial strains caused by The Great Depression, the newspaper almost filed for bankruptcy. In later years, on October 25, 1937, brother’s John and James knight bought The Herald in their efforts to build one of the largest newspaper chains known as the Knight Ridder Inc. (Smiley, 1984) In order to gain an international market, The Herald expanded its newspaper to the regions of Latin America and the Caribbean in 1948. This newspaper was named The Miami Herald International Edition and was printed by partner newspapers in its various regions. Due to The Heralds constant crusade and efforts to report Miami’s crime and community problems, it won its first Pulitzers Prize in 1951.
The neighborhood of Biscayne Bay serves as home to The Heralds headquarters where construction began on August 19, 1960. Upon completion, the company moved into its new building in 1963. Due to its extensive coverage and influence in Miami’s increasing Spanish population, a Spanish supplement insert, El Herald was published in 1976. In later years this publication was renamed El Nuevo Herald in 1987 and in 1998, was circulated as an independent publication. In 2003, The Herald and El Universal of Mexico City collaborated to create an international English newspaper for Mexico readers called The Herald Mexico which was published in 2004. (Porter, 2003 ) However, this venture was short lived as it published its final paper in May 2007. Notwithstanding, in 2006, ownership of The Miami Herald was transferred to the McClatchy Company, the third leading newspaper company in the United States, after they bought Knight Ridder.
Over the years, The Herald has been awarded 20 Pulitzer prizes and averages about 88 pages daily in its newspaper and 212 pages on Sunday, launched an online edition and sponsors community involvement projects. In its effort to promote community involvement, The Herald sponsors The Silver Knight Awards given in several categories to deserving high school seniors whom are nominated by their teachers. The Herald has also established The Wish Book program which lets individuals from the community faced with economic and personal hardship ask readers for assistance be it be monetary or physical help. The Herald also cosponsors athletic awards and spelling bees hosted in the South Florida area. “To be the most credible and dynamic source of information for our community” is the company’s mission statement. (McClatchy, 2011) It is evident that throughout the years, The Herald has lived up to its mission statement as it is the forerunner in leading newspapers serving Miami-Dade, Broward and Munroe County.
The culture of the Miami Herald was known as the “family” company. Family members were hired and promotions were made within the company. The current Publisher, David Landsberg started as a Home Delivery Agent and was promoted within the company over the years and now the Publisher of the most prestige’s newspaper, The Miami Herald. (Lavigne, 2012) Before McClatchy took over The Miami Herald, the company was a profit sharing organization. Each employee was given 10 shares of stock and the company matched up to 6% of 401K plan savings. Employees received raises starting at 5% and bonuses annually with employee performances. The morale was high and full of energy. The company celebrated birthdays and employee anniversaries. During the big holidays, Thanksgiving and Christmas, the company would close down at noon and host family luncheons.

Innovation and Change Most news publications across the country are facing many financial difficulties that threaten their survival, forcing major payroll cuts and streamlining. Some of these challenges are magnified as social media and internet services make it increasingly more convenient for individuals to obtain reliable news, free of charge, online. In order to confront these issues, successful newspapers are changing and becoming very creative managing their futures, by means of innovation and change.

In order to approach these issues, The Miami Herald newspaper has taken several strategic measures over the years in order to increase profitability and improve efficiency, while simultaneously revolutionizing business practices. Some of these innovations have the desired purpose of reducing overhead and administrative costs. Other company changes are more focused on profitability, with purposes of attracting new customers and advertising sponsorships. Ultimately, all tactics are used to further the life of the publication.

A great example of The Miami Herald’s attempt to reduce overhead costs is the May 2011 selling of fourteen acres of land surrounding the newspaper’s headquarters. Understanding that the headquarters is positioned on prime real-estate and is situated on bay front property, Genting Malaysia Berhad (a Malaysian resort developer), acquired this land from the Miami Herald for two-hundred and forty-six million dollars.

Another step taken by The Miami Herald Newspaper, as well as other news publications, is the calculated-yet unavoidable reduction of staff and personnel. As the paper increased its online presence and revamped the company website, the need for physical brick and mortar presence declined. As a result, In June 2008, The Miami Herald announced widespread layoffs and notified workers of plans to cut two-hundred and fifty full-time jobs. This figure was seventeen percent of the newspaper's force at the time.

In an unforeseen turn of events, The Miami Herald benefitted from a change in conditions of the macro-environment. In the late 2000’s the price of paper plummeted globally by as much as forty percent after the global commodities market took a hit from the weakening economy. This reduction was huge news for The Miami Herald Newspaper because paper and printing expenses are the second largest depletion of funds for the company, after payroll expenses. The reduced spending afforded to the company by lower paper prices and changes in ink quality and thinner pages, has allowed the Miami Herald Newspaper to ensure great gains.

Another innovative measure that has proven to be widely successful is The Miami Herald Newspaper’s intense coverage of news uniquely catered to the demographics of Miami. With Miami’s large immigrant population, The Miami Herald's coverage of Latino and Haitian affairs has become widely considered among the best of U.S. newspapers. This can be seen when viewing The Miami Herald’s Pulitzer prizes for the 2001 coverage of Elian Gonzalez, and their
2009 coverage of Hurricane Ike as it relates to the damages and lives taken in Haiti as a result of the tragedy. Coverage of this nature taps into niche markets of individuals who may not have utilized the services of the Miami Herald otherwise, possibly preferring more ethnicity-specific

In order to increase visibility, The Miami Herald Newspaper has become even more apart of the community by increasing their outreach to local high school students and their families. Through implementation of the “Silver Knights Award”, which rewards high-achieving students with college scholarships, they aim to be viewed as family-oriented. Although the Silver Knights Award has been around since 1959, the newspaper has recently increased scholarship amounts and recipient categories to all disciplines, including Art, Athletics, Business, Drama, English & Literature, Foreign Language, General Scholarship, Journalism, Mathematics, Music, New Media, Science, Social Science, Speech, and Vocational-Technical. (Gonzalez, 2012)
Situation Analysis Situation Analysis: To position the Miami Herald as a competitive alternative for readers in Broward, South Palm and Monroe counties. The object is to attract existing readers and consumers of other media products in these areas and to solidify the base of current Miami Herald readers and compete effectively with other publications and media outlets. The Herald should attract advertisers, from areas other than Miami Dade. Customer awareness and interest must be built to levels that lead to product trial. Establish the Herald as being an alternate paper to loyal readers of other publications.

SWOT Matrix
Strengths:
• The Herald's Classifieds section reaches three of the five counties that are projected to have the biggest job growth through 2012.
• These three counties include Miami-Dade, Broward, and Palm Beach. The geographical distribution shows that The Miami Herald has its main market in Miami-Dade County, which holds 65% of the circulation sales.
• The Miami Herald has a good reputation with readers and non-readers alike and therefore. Weaknesses:
• A large percentage of newspaper readers in Palm Beach County feel that the Herald fails to cover news pertaining to their local community.
• More than half of the newspaper readers from Palm Beach County report that the Herald is not readily accessible in their area.
• The Miami Herald name alone has a negative impact on consumers in Palm Beach County.
• Monroe County is not effectively covered by any of the newspapers.
• The Sun Sentinel has higher total revenue than The Miami Herald. The $20 million difference comes from higher advertising revenue. The circulation shows that the Sun Sentinel has a lower total circulation than The Miami Herald.

Opportunities
• A local edition of the Miami Herald has a potential for growth, since The Miami Herald has a good reputation with readers and non-readers.
• To expand distribution in Palm Beach county by establishing strong relationships with local businesses and vendors.
• Alter the product name (e.g. The Herald: Palm Beach edition).
• The Miami Herald would have the greatest sales potential, in Miami-Dade and Monroe counties but would also profit from other markets. Therefore, we must keep and increase our current reader base in the Miami-Dade and Monroe areas, while attempting to attract Palm Beach and Broward county residents.
• The population figures show that Broward and Palm Beach are the counties with greatest potential, since they have a greater population than Monroe.
• The advertising campaign should be aimed to get the Sun-Sentinel and The Palm Beach Post readers to switch to The Miami Herald Threats
• Its main competitor, the Sun-Sentinel, focuses its sales in Broward County, while The Palm Beach Post has its major market in Palm Beach County.
• The analysis of the competitive sales points at the problem of getting advertisers for The Miami Herald new local editions in those counties where the Sun Sentinel controls the market.

External Environment
The newspaper industry of the United States has witnessing revenue decline since 2005. Decreasing circulations and consequently decreasing advertising revenue, due to the increasing popularity of digital media, is said to have affected the printing industry .Many newspaper companies initiated several cost cutting efforts to cope up with the industry downtrend but now, not even these efforts seem to solve some of these issues that are in the external environment of this particular industry .In order for one to comprehend the meaning of external environment or setting of the Newspaper industry, it is imperative that we understand what “external environment” represents for a company and how it can affect them. All outside factors that may affect an organization make up the external environment.The external environment comprises of all the entities that exist outside its boundary, but have significant influence on its growth and survival. An organization has little or no control over its external environment but needs to constantly monitor and adapt to these external changes. In essence, a proactive or reactive response leads to significantly different outcome when dealing with external environments. An organization that better assesses its external environment has a better chance at surviving within its industry during downtimes or times of volatility. The domain of external environment consists of all the entities in the environment that interacts with the organization. In focusing on the various domains that cover the external environment of the newspaper industry, it is important to focus on the ones that have the highest significance. The common external factors that influence an organization are the following:
Competition: These are related industries with similar products or services, geographic locations and markets. The Newspaper industry has a wide array of competitors. The Bureau for Better Business estimates about 400 that serve major and mid-size cities
Related Industries: It is important to know all the competitors, their organizational size and skills pool, their competitive advantages, their marketing strategies, offshore development etc.
Global context: Due to increasingly broad world economy, it is important to watch the competition across the oceans, competitive means to disseminate information changing socio-political situations, and home grown entrepreneurs.
Customers: They are the end-users of the product and services, the most critical aspect of the environment.
Preference changes: Customers likes and dislikes changes rapidly, people live in a tight social system that create and encourage trends. It is important to anticipate changes in user’s product requirements, emerging technologies that can change how the products are used etc.
Amongst all of these factors, the advancement of technology is the most consequential domain that affects the Newspaper industry. Alternative sources of news and information are becoming available to a potentially vast audience via an increasing number of wired and wireless devices including wireless netbooks, wireless phones, the iPhone and iPad and amazon kindle style wireless e-readers. “Emerging news organizations include a growing number of foundation funded projects focused on investigative reporting, in depth health policy news, and local reporting”. (Kirchhoff, 2010)
Global Post is a for-profit enterprise, focused on international reporting, that relies on advertising, syndication to newspapers, and paid membership. (Philip S. Balboni, 2009) As discussed by many, the advent of the Internet, along with other factors, has undermined the business model of many daily newspapers. In recent decades, most daily newspapers have relied primarily on print advertising to support the cost of doing business, with approximately 70 to 80 percent of total revenue coming from a combination of national advertising, local advertising, and classified advertising. Circulation typically has generated most of the balance of daily newspaper revenue, and other revenue sources collectively have provided relatively small additional revenues.
Print advertising revenue, however, is eroding. Some of the decline is attributable to the current economic downturn, but much of it is attributable to a migration of both readers and advertisers to Internet sources. There has been a major shift in classified advertising from newspapers to websites like Craigslist and Monster. Likewise, national and local advertisers increasingly are utilizing the Internet and other options for their advertising needs. Some readers are shifting from paid subscriptions to free online news sources, resulting in declining circulation.

Competitive Advantages So how does the newspaper fit into this dynamic cosmos? Nicely, I'd say. Consider just a few unique competitive advantages that newspapers still enjoy. Monopoly status a hundred plus years of competition have left most American cities with just one newspaper. This is, by far, a newspaper's biggest competitive advantage and the source of even the lowliest daily's fat profits. News gathering power local newspapers typically still have the largest reporting staffs in town of any single news outlet, print or electronic. This coupled with wire sources enables a newspaper to produce the broadest range of daily news and features of any single news outlet. In a world of specialty, there's still great value and convenience in such a general package. Think of the retail analogy some people prefer shopping at boutiques and specialty stores, but lots of people still patronize supermarkets and department stores. Local readers will always want to know about the schools, government, businesses, taxes, entertainment and teams closest to home. No news organization is better equipped or staffed to supply this information than a newspaper despite technology that’s available. The best customer’s newspapers typically beat their direct competition in both the quantity of customers, readers and their quality of demographics. Even with declining circulation, this advantage remains relatively stable. A traditional newspaper advertisers airlines, retailers, banks, auto dealers undergo their own transformation, newspaper advertising remains one of the most efficient ways to reach relatively large numbers of educated, affluent people. Young people may not read the newspaper much, but in strictly business terms, this is somewhat irrelevant. Advertisers already know this. They buy newspaper space to sell goods and services aimed at an older, more moneyed crowd. Lots of attention is still available newspapers no longer play the central role in people's daily lives they once did, but they are far from irrelevant. Some 42 percent of adults surveyed by the Pew researchers in 2010 reported that they had read a newspaper "yesterday" a figure that rose slightly over 2011. (Edmonds, 2011) With the exception of local TV news, no other news source reaches so many people on a given day. Brand name recognition newspapers big and small have spent millions of dollars over the years reminding people what they do. This has created a vast but hard to measure reservoir of goodwill for newspapers and represents a major strategic advantage. It partly explains why, even today, no one has been able to create a local news site that outdraws the newspaper's own on the Internet and Microsoft and America Online have tried. (Farhi, 2005) Historic profitability thanks to all of the above, newspaper companies enjoy profit margins unmatched not just by most other news media but by most other industries. Industry wide, newspapers reaped about 23 cents of profit for every dollar they took in last year, according to Merrill Lynch analyst Lauren Rich Fine. (Farhi, 2005) Newspaper revenues and profits are rising even as readers are deserting. This could be because newspapers are raising prices while skimping on long term investment in their plants and people harvesting the assets. Of course, the newspaper industries are highly profitability and cuts both ways, many newsroom managers will tell you. The need to maintain those margins to satisfy the short term demands of stockholders and Wall Street analysts compels some companies to cut back on hiring. But the thing about obscenely high profits is they're a whole lot better than no profit at all. For newspapers, they can be the seed that provides tomorrow's harvest. To be fair, many newspaper companies aren't sitting still. They've beefed up their Web offerings and expanded their Internet "footprint" by buying independent sites. (Dorroh, 2005) Dow Jones recently purchased MarketWatch.com, the New York Times nabbed About.com, and the Washington Post Co. bought Slate from Microsoft. Major industry players also are embracing ethnic media primarily Spanish language and niche publications like real estate shoppers. The hottest single publishing market of the moment may be the battle for young readers. (Vane, 2005) In Dallas, the Morning News started Quick, an easy to read freebie. In Chicago, both the Tribune and the Sun-Times have similar papers. The Washington Post launched express, beating to the punch a new tabloid called the Washington Examiner, which is delivered free to mostly affluent families and is not aimed squarely at the young. Critics can argue about the quality of these papers, but their existence does say something about the prospects for print. The Examiner, for one, is the brainchild of billionaire Philip Anschutz, who has revived the moribund San Francisco Examiner and registered the Examiner trademark in some 70 cities nationwide. While the extent of Anschutz’s publishing ambitions remains a mystery, his moves raise a larger question Ultimately, some in the industry believe newspapers will have to rethink much of what they do to survive. A recent white paper by the Newspaper Association of America suggested, among other things, publishing smaller editions some days of the week and charging higher subscription fees to offset ad losses. The best defense, he says, is a great offense. Put more money back into the newsroom and build up the journalistic fire power and the community credibility that many newspapers have been frittering away for years. It could be just as likely, therefore, that the worst case doesn't happen. Maybe newspapers will find stability and equilibrium with a core of loyal, demographically attractive readers. Old habits do die hard. In a world of ever expanding choice, many people pressed for time and seeking the trusted and familiar may just stick with what they already know and respect. Without doubt, it will take skill, vision and creativity for newspapers to survive. But I'd bet on success sooner than I'd bet on failure. It may be that newspapers are dinosaurs. But then again, dinosaurs walked the earth for millions of years.
Conclusion
Left or Right, Free speech is what keeps this country safe and the media carries that voice. If we only wrote what everyone wanted to hear then we are just another faceless Yes, man in the crowd. The only lion loose on the streets today is the media not radio talk show hosts. The days of sitting down with a cup of coffee and a cigarette and knocking out the Sunday paper are over. The active generation today is more connected and too busy for such nonsense. A paradigm shift for sure. Sadly, newsprint may go the same way as the full service gas stations and the milkman. They call it progress but I don’t see it.

Works Cited
Choeff, S. (2006). How Well Do You Know Your Newspaper? Miami : PPCMS Daily News.
Dorroh, J. (2005, July 5). Dotcom Bloom. American Journalism Review , p. 19.
Edmonds, R. (2011). The State of the News Media 2011. Washington: American Journalism.
Farhi, P. (2005, July 5). A Bright Future for Newspapers . American Journalism Review , p. 15.
Gonzalez, A. M. (2012, May 19). The Silver Knights: 54 years of excellence, selflessness. Miami Herald , p. 2.
Kirchhoff, S. M. (2010). U. S. Newspaper Industry in Transition. Darby: DIANE Publishing.
Lavigne, G. (2012, May 11). Media Relations Relations. PR Newswire , p. 2.
McClatchy, T. (2011). The Miami Herald. Miami: The McClatchy Company.
Philip S. Balboni, C. M. (2009). International News for the Digital Age. Global Post , 5.
Porter, T. (2003 ). Dismantling the Language Barrier. Reviews, American Journalism , 12.
Smiley, N. (1984). Knights of the Fourth Estate: The Story of the Miami Herald. BC V6R 1P1, Canada: Banyan Books.
The McClatchy Company. (2006, Spring). New Era Dawns. The Employee Magazine of the McClatchy Company . Sacramento, Ca, USA: McClatchy Corporate Communications.
Vane, S. (2005, May 1). Hip and Happening . American Journalism Review , p. 25.

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