Battle of the brands: A newspaper war in New Orleans

Battle of the brands: A newspaper war in New Orleans

The following article appeared in USATODAY:

NEW ORLEANS – The pirate flag hanging in the New Orleans Advocate‘s office in downtown is something of an inside joke – a hammy reminder of the startup paper’s unlikely insurgency against its entrenched competitor, The Times-Picayune.

Other symbols of the year-old paper’s inchoate status are of the more banal variety – the unkempt entrance, desks crammed into an office no bigger than a McMansion living room, one unisex restroom serving the entire staff.

Seven blocks away, the Picayune‘s new headquarters boasts the aesthetics of a well-funded dotcom. The loft-style newsroom occupies the penthouse floor of a commercial high-rise with a ground-level mall. With large windows encircling the office, the staff has a gorgeous view of the Mississippi River.

“We wanted to create a new culture and environment, and we wanted a physical space to facilitate the changes,” says Ricky Mathews, president of NOLA Media Group, which publishes the Picayune.

Despite the Picayune‘s avowed campaign of rebirth, competition and lingering market forces here continue to tug at its once inexorable march toward an unencumbered digital future. There is an old-fashioned newspaper war here, an improbable and unusual development in the digital era.

On May 24, 2012, New Orleanians woke up to startling news that the 177-year old Picayune would cut back on publishing to three days a week as part of a digital-first approach, making the city the first major U.S. market to go without a daily. Sensing an opportunity, the Advocate, based in the state capital Baton Rouge 80 miles north, started a New Orleans edition that would be home-delivered daily. A few months later, the Picayune counterpunched launchingTP Street, a tabloid sold at coin boxes and stores on days the Picayune doesn’t come out.

The papers’ head-to-head battle symbolizes two sharply different approaches to newspaper survival, an upstart’s bet on a traditional print-focused approach vs. a corporate incumbent’s fervent pursuit of an uncertain but potentially rewarding digital future. It has morphed into a test of newspaper brand loyalty as well as a referendum on the merits of slow-cooked stories developed for the next morning’s paper in an age of instant gratification in a 24/7 news environment.

For now, the 16-month old competition has spurred innovations and operational tweaks that have resulted in more diverse options for readers. The Advocate has beefed up staffing to boost metro coverage in a place racked by crime and corruption but undergoing an economic revival. The Picayune strengthened its depleted reporting staff and vows to continue to pursue investigative stories.

“Sharp elbows make for better reading,” says Kevin Allman, editor of local alternative weekly The Gambit. “There’s no question that The Times-Picayune has gotten better” since The Advocate mounted its challenge.

GOING DIGITAL FIRST

The decision by the Picayune’s parent company, New York-based Advance Publications, to adopt a digital-first approach and pull the plug on seven-day publishing hit the city like a wrecking ball. There were howls of protest and visceral criticism from subscribers, city leaders and media critics. It was a particularly bitter blow. The paper had exhaustively covered Hurricane Katrina and the recovery efforts, forging a deep relationship with New Orleanians.

“It was the Times-Picayune that held every grassroots organizations’ hand and supported their endeavors (after Katrina). And they reported fantastically,” says Anne Milling, a former member of the paper’s advisory board who led an effort to save the paper’s 7-day delivery. “I wish them well. But they lost a great deal of readership and support from the community.”

New Orleans is hardly Seattle – the region’s residents are less likely to be wired for the Internet than those in many other cities – and the locals responded as if they had been betrayed by a cherished friend. “The poor and the elderly don’t have the access to technology (to read online),” New Orleans Archbishop Gregory Michael Aymond says. “I felt it was important that someone speak on their behalf, saying the newspaper is important to their keeping up (with the news).”

It didn’t help that the city heard the news not from the paper’s leadership but from The New York Times. The Picayune also laid off about 200 staffers, more than 80 in the newsroom.

The Picayune‘s decision was based on the inevitable decline of print newspapers, Mathews says. “It’s not to replace all lost print revenue, but to incrementally replace it with digital,” Mathews says. “Death by 1,000 cuts wasn’t going to be our approach.”

The Advocate was also in flux. The Manship family, which had owned the Advocate for decades and launched the New Orleans incursion, decided to sell the paper. The family found a buyer in New Orleans businessman John Georges, whose family made a fortune in grocery distribution. Energetic and blunt, the 53-year old Georges had unsuccessfully run for governor of Louisiana and mayor of New Orleans and owns the iconic local restaurant Galatoire’s.

Georges says he was attracted to the Advocate because it is a self-sustaining business with a steady cash flow. “I buy mature businesses in declining markets,” he says. “You couldn’t buy it at reasonable (earnings) multiples before. It’s a consistent business for me. It’s right in my wheelhouse – distribution.”

Q&A: John Georges

THE ADVOCATE RAMPS UP

By its own admission, the Advocate‘s New Orleans edition was at first a fumbling effort. Limited staffing in New Orleans – only six reporters – was an issue. Distribution in the terra incognita suffered as readers complained about undelivered papers. Even with a few New Orleans stories scattered throughout, the edition remained distinctly a Baton Rouge publication, says Dan Shea, a former Picayune managing editor who was hired by Georges as the general manager of The Advocate. “They did a great job getting in a foothold, but they were never going to get off the beach.”

Thanks to Georges’ investment, Shea ramped up hiring and rebranded the new edition as The New Orleans Advocate, signifying a greater commitment to the city. The paper also added a local circulation director and sales staffers.

Shea brought in Peter Kovacs, who was forced out as a Picayune managing editor during the layoffs, to lead the newsroom. They started recruiting seasoned reporters for the new edition, nearly all of whom were working at or had been laid off by the Picayune. The newsroom in New Orleans now totals about 30. “It was like having eight of the 10 top draft choices,” Kovacs says.

The New Orleans Advocate is still printed in Baton Rouge and trucked out in the middle of the night. The Baton Rouge newsroom handles copy editing and coverage of subjects of statewide interest, including state government and Louisiana State University football.

That The New Orleans Advocate can draw heavily on existing resources is a major plus. The new edition is not a separate business unit and its financial results are consolidated with the broader Advocate. But, says Shea, “by almost any measure, we’re profitable in New Orleans.”

With ad rates cheaper than at its rival, the Advocate has attracted a few big advertising accounts, including department store Dillard’s. But the challenger is still something of a niche business. The Picayune‘s name recognition and its vastly superior resources are undeniable.

In December 2012, the then-publisher of the Advocate told Columbia Journalism Review that the paper’s circulation in New Orleans had quickly reached about 23,500. But the latest figure supplied by the Advocate – about 25,000 – shows that circulation growth hasn’t grown much since then. And it’s a fraction of the broadsheet Picayune’s weekday average of about 115,000.

Kevin Gibson, a long-time Picayune subscriber, echoes a sentiment commonly heard in the city. While he disagreed with the paper’s decision to cut back, he has “just never moved over” to The Advocate,” he says. “It’s just not the Times-Picayune,” says Gibson, business analyst at a food distribution company.

Last year, The Advocate launched a dedicated website – TheNewOrleansAdvocate.com – but the site’s traffic is minimal. And digital revenue for the edition is something of an afterthought. “Today, print dollars are shoveled out the window at (the Picayune) and we want to capture those,” Shea says.

Meanwhile, the dramatic cutbacks haven’t freed the Picayune from financial pressures. Savings from the reduced print schedule helped the paper reverse its mounting losses. But its chief revenue source – print ads – continues to decline, as it does at newspapers nationwide. Paid print circulation continues to fall, dropping 10% last September from a year before, according to data from Alliance for Audited Media. TP Street sells about half of the single-copy sales of the broadsheet edition, which total about 15,500 on weekdays.

As a private company, NOLA Media declined to reveal revenue and profit figures. NOLA Media has a “net operating profit,” Mathews says.

Despite the cutback in its publishing schedule, the Picayune likely has held on to about 85% of its print revenue, estimates Ken Doctor, an analyst who writes about the news business at Newsonomics.com. “They were profitable before. The whole intent (of the cutback) was to increase short-term profitability and set them up for digital,” he says.

Digital ads, which are meant to replace the decline in print, are ticking up, as is Web traffic. The desktop traffic to NOLA.com totaled 2.3 million unique visitors in December, up 49% from a year ago, according to Comscore.

Mathews says Comscore’s number is incomplete as more than half of the digital traffic comes from mobile devices. Digital revenue grew nearly 30% in the fourth quarter from a year ago, he says.

DUELING PHILOSOPHIES

The contrast between the papers’ editorial philosophies is as stark as the one between their business models. The New Orleans Advocate emphasizes that it has fewer but better journalists producing more meaningful stories. The Picayune points to the high volume of digital stories produced quickly – an approach born of its belief that news consumption habits have changed forever.

“They have a larger staff,” The Advocate‘s Kovacs says. “We have a better concept of what the mission of being a reporter in New Orleans is.”

Kovacs hired former Picayune society reporters to write about local parties and celebrities, a topic of great local interest. A restaurant critic from Gambit was hired to enhance coverage of the dining scene, a huge deal in food-obsessed New Orleans. And it hired Walt Handelsman, a Pulitzer Prize-winning editorial cartoonist who once worked at the Picayune, away from Long Island’s Newsday.

While breaking news gets posted online as it unfolds, Advocate reporters are encouraged to focus more on refining stories for the next day’s paper.

“There’s some reconstituting of the best of the print newsroom,” says Rick Edmonds, a news industry analyst at The Poynter Institute. “And it’s an interesting strategy.”

Prodded by The Advocate‘s escalation, the Picayune has also gone on a hiring spree to replenish a newsroom that had been decimated by layoffs. With about 162 employees in the newsroom – about 20 fewer than the pre-layoff total – reporters are tasked to post stories rapidly and be less concerned with how the content is presented in print. Picayune editors point out that NOLA.com posted 246 items on a recent day, including stories, blog posts, photos, and videos.

“Coverage planning originates in the digital newsroom,” says Jim Amoss, the Picayune‘s longtime editor. The digital-first shift “forced a cultural change. I don’t think you can achieve it with gradualism.”

But losing so many veteran reporters has inevitably hurt the quality of journalism and cost the Picayune much of its “institutional knowledge, muscle memory,” Gambit‘s Allman says.

Picayune editors dispute the claim and point to several investigative stories, including a series on the state’s campaign finance.

A local journalism professor, Vicki Mayer of Tulane University, sought to measure how the Picayune had changed since its digital-first conversion. She and her students compared the paper’s content in print and on its website in October 2011 and October 2013.

Her conclusion: Contrary to critics’ claims that the Picayune now favors entertainment and sports over other beats, a majority of its content can still be classified as “hard news,” including crime, courts, and politics. But the quality of stories – as measured by the number of human sources quoted in the stories – has waned, Mayer says. In 2011, a little more than three sources on average were quoted per story in print, she says; now that number is down to 2.2. “Reporters are forced to produce more and cut corners on their reporting duties,” Mayer says.

Amoss says Mayer’s study, based on the sampling of data, is flawed. “It doesn’t take into account the ebb and flow of the news cycle over each 24-hour period,” he wrote in an e-mail to Columbia Journalism Review.

Whether the Picayune‘s readers choose to ride the 24-hour news cycle with the brand they had come to expect at their doorsteps each morning will determine whether its stunning bet was a wise choice in the long run.

As for The New Orleans Advocate, it faces a daunting challenge. It’s very rare for newspapers to succeed when they plunge into adjacent markets. And it’s placing a big bet on print at a time when newspapers continue to decline.

But this is, after all, New Orleans, distinctive, self-referential New Orleans. Perhaps reading a newspaper, like chicory coffee, beignets, and jazz, will remain a permanent part of the city’s unique culture.

“I don’t necessarily want the whole market,” Shea says. “I just want a profitable part of it.”