Business

Black and Read All Over

In the battle of the papers, publishers are paying a high price to beat their foes to the punch

Anthony Wilson-Smith May 31 1999
Business

Black and Read All Over

In the battle of the papers, publishers are paying a high price to beat their foes to the punch

Anthony Wilson-Smith May 31 1999

Black and Read All Over

Business

In the battle of the papers, publishers are paying a high price to beat their foes to the punch

Anthony Wilson-Smith

The bookshelf in Ken Whyte’s office betrays a hint of his not-so-secret passion. Tucked amid works about politics, economics and biographies of former prime ministers Margaret Thatcher and Brian Mulroney is a copy of the National Basketball Association’s media directory. The strapping, 38-year-old Whyte is a keen fan who—until he became editor-in-chief of the new National Post last year—liked to “haunt empty schoolyards where no one notices I’ve got no lift in my jump shot.” These days, with long hours in the office, he complains: “I’m getting way out of shape.” But when talk turns to the Posts rivalry with its competition, The Globe and Mail, Whyte reverts to a basketball analogy. Asked whether he thinks of the Globe in selecting his paper’s stories, Whyte shakes his head and cites longtime Boston Celtic great Bill Russell. “Russell never scouted the opposition; he let them worry about his team,” says Whyte. “That’s the way it is with us.”

Seven months into the newspaper war that began with the launch of the Post last Oct. 27, the competition is increasingly rough-and-tumble—and the eventual winner is far from clear. The outcome is muddied by disagreements over how to measure everything from the number of readers of each paper to the value of advertisements

sold. And several studies indicate that despite intense efforts by both newspapers to attract readers, the overall number of consumers has not increased.

But one thing that is clear is the intensity involved. “To stay on top,” says Globe president Phillip Crawley, a hard-nosed Briton who arrived at the paper late last year, “we will do everything it takes.” The newspaper has replaced its managing editor twice in the past year, created the new position of president for Crawley, instituted sweeping personnel changes on the advertising and editorial middle-management levels, and repeatedly overhauled the tone and presentation of editorial content.

On one level, those efforts are aimed at emphasizing existing advantages. The Globe, for example, can include late sports scores in its national edition, while the Post, for production reasons, cannot. The Globes new executive news editor, Edward Greenspon (the former Ottawa bureau chief), has sharpened the focus of coverage to counter complaints that features were starting to eclipse hard news. And, says Crawley, “While we need to inform, we also need to entertain.” The changes follow a study conducted for the Globe in October, 1997, which concluded that, among other things, the paper was seen

by focus groups as being “written for white, middle-aged men,” was “too serious, dry, often ponderous, and old’ in its orientation,” and had “an underdeveloped ‘human’ side.”

The Post, despite a paucity of advertising and questions surrounding its circulation claims, has established a strong look that often makes the Globe seem stodgy. The paper’s initial goal, says Whyte, was to “declare a distinct personality.” Even competitors agree he has achieved that—the Post is politically conservative, brash and sometimes impudent. “There are a lot of things I disagree with at the Post, but it’s a helluva an interesting newspaper,” says John Honderich, publisher of The Toronto Star.

Across Canada, the early winners are readers, who benefit from cut-rate and sometimes free newspapers, increased spending on editorial content and a variety of promotional campaigns. At ground zero of the fighting—the Greater Toronto Area—the batde also involves The Toronto Sun and The Toronto Star. On most days, says Honderich, “there are about 100,000 free papers floating around. That hurts everyone.”

Buried beneath the aggressive rhetoric of publishers and editors are unmistakable wounds. At the annual meeting last

week of Hollinger Inc.—owners of the Post—CEO Conrad Black confirmed previous estimates that the newspaper lost $17.5 million in its first quarter of operation. The Star reported a $4.9-million decrease in first-quarter profits compared with the same quarter last year, because of a decline in advertising linage and a $ 1.6-million drop in circulation revenues that was partly due to price promotions. Neither the Sun—now owned by Montreal-based Quebecor Inc.—nor the Globe—owned by Thomson Corp.—released figures. But Crawley will say that despite increases in advertising revenue and circulation, greater editorial and promotional costs “have a negative effect on our bottom line.”

And there is one pressing, unanswered question: who is actually reading the papers? Several studies conducted recently by the Angus Reid Group and then sold to newspapers suggest the number of readers—at least in the Toronto area—is remaining stable, but the Post is making inroads against the Globe. A copy of one study obtained by Macleans suggests the Post is “holding a sizable lead in average weekday readership over The Globe and Mail in English Montreal, a modest edge in Vancouver, and pulling even with the Globe in Ottawa.” The study says in the crucial Toronto market, the Globe has 16 per cent of average weekday readership while the Post now

has 13 per cent. But the same survey finds 30 per cent of those Post readers received their most recent copy for free.

That illustrates one difficulty of measuring success, because circulation claims often include newspapers sold at full and discounted prices, as well as some distributed for free. Neither the Globe nor the Post were part of recent measurements conducted by the industry’s Audit Bureau of Circulations.

Although the Post belongs to the organization, it will only become part of the audits after it is more firmly established—likely at the end of June. The Globe, on the other hand, quit ABC in the mid-1980s and uses its own audit conducted by KPMG chartered accountants; it claims weekday circulation of 318,000 and Saturday circulation of 395,000. Of that, 65,000 of weekday papers and 60,000 of the weekend edition are sold at discount rates.

For his part, Post publisher Don Babick says his newspaper has Monday to Friday circulation averaging 278,000 and Saturday sales of 332,000. Those unaudited figures, Babick acknowledges, until recendy included up to 60,000 free daily copies. Even for ABC members, circulation claims require scrutiny because they can include papers sold in bulk for as little as one cent a copy. That, says Crawley, “makes a mockery of things, and is why we don’t participate.”

It is equally hard to measure success in selling advertising. At

The industry is awash m incentives. But advertising buyers simply want to know: who is reading the paper?

the Hollinger annual meeting, CEO Conrad Black said the percentage of advertising versus editorial copy in the Post is increasing. But one reason is that the Post, like many newspapers, sells bulk quantities of the newspaper to clients such as hotels and airlines at a discount rate—and, as a further incentive, gives them free advertising. By doing so, the newspaper pads circulation and offers potential clients a low-cost chance to sample the paper. Crawley says only that the Globe “sometimes offers advertising bonuses to particularly valued clients.”

The targets of newspapers’ wooing say they find the lack of specific information frustrating. Judy Goddard, vice-president and media director of BBDO Canada advertising agency, says “the Post is a good-quality product, but until its readership is properly measured, advertisers approach with caution.” And, she says, the Globes refusal to rejoin ABC causes concern. “Their claims would be more credible if they were measured like everyone else.”

Goddard and other industry figures say the real first test will come in September, when the Newspaper Audience Data bank (known as NADbank) releases results of an annual sur-

vey that measures how much time people spend reading various publications. The survey includes 24,000 adults in 40 urban markets, and, says Goddard, “is hugely important. We don’t care how much people pay for papers: we care about whether they read them.”

At the same time, despite hopeful predictions from competitors to the contrary, the strength of the country’s largest newspaper, the Star, as well its principal local rival, The Toronto Sun, remain relatively unchanged. Although the Star’s circulation has fallen over the past five years—the result, Honderich says, “of less intense efforts to keep subscribers in some areas outside the central Toronto area”—its total paid circulation of452,000 on weekdays and 690,000 on Saturdays is far ahead of competitors. The Angus Reid study shows the Star has 40 per cent of total readership around Toronto, followed by the Sun at 25 per cent. The Star “is so huge,” says Goddard, “you start with the presumption you consider it for any campaign.” And the Sun, she says, is essential for market segments such as electronics stores. Another attraction, according to publisher Doug Knight, is that weekday and Saturday papers are sold only from newspaper boxes, so “circulation numbers are legitimate because we sell our papers at full price.” The Sun, with average weekday readership of248,000 and 418,000 on Sunday, is the only ABC-audited Toronto paper to increase circulation in the past year.

Even as they battle, senior executives of the biggest papers share one sentiment. “A newspaper war,” says the famously feisty Honderich, “makes life that much more worth living. Could anything be more exciting?” And, says the restrained, but no less combative Crawley, “there is something exhilarating about rolling up the sleeves and fighting head-on.”

That’s just as well, because no one doubts that Post owner Black intends his product to be around a long time—and has the deep pockets to back it. And in his office just off the paper’s newsroom in suburban Don Mills, the ever-courteous Whyte occasionally lets a sharper edge show. Pressed for his opinions on the Globe, he talks about a recent item that lampooned the modelling career of Black’s son, Jon, and says: “I see no reason why they descend to scurrilous trash talk. Our job is to prove you can be interesting without being cheap.” Still, this comes from the editor of a newspaper that recendy ran a photograph on the front page to prove actress Julia Roberts does not shave her underarms. The first casualty of newspaper wars, it seems, is unlikely to be gossip. Em