Reader Alan Mutter wrote in email: “Your 3/23 prediction of layoffs came true and the situation is perhaps more serious than you realized. See: Staff Cuts Won’t Cure SF Chronicle Woes.” From the article:
Although the staff reductions will save an estimated $8 million a year in payroll, the amount will cover barely a third of the approximately $25 million that industry experts believe the Chronicle lost in just the first four months of 2007….
The escalating deficit at the Chronicle comes on top of the more than $330 million the paper has lost since Hearst Corp. bought it for $600 million in 2000….Thus, Hearst has invested more than $1 billion in an asset that would be on track to lose $75 million this year, if its current burn rate weren’t arrested.
The Chronicle’s losses result from the usual combination of weakening circulation, declining revenues, rising expenses and increased competition for the available advertising in the market from rival traditional and digital media.
While some people commented after my last post that the Chronicle is a lousy paper and deserves to go, it seems to me that while the weakest go first, their fate tell us something about industry dynamics, and that we are witnessing the demise of institutions that many of us have taken for granted our entire lives. It’s a good reminder that progress is not merely additive.
It’s also a good reminder to those of us in publishing businesses (which are most affected by the rise of new media on the internet) of the urgent need to reinvent ourselves, or as Esther Dyson says, “Always make new mistakes.” (Emphasis mine.)