From the DP General Manager

2012: Challenges & opportunities

These are the times that try men's souls (No, too extreme.)

It was the best of times, it was the worst of times, it was (Nope, overly melodramatic.)

Alright, let's just say that the past few years at the DP have been full of challenges, with some bright spots and promising signs along with some troubling trends. And as we near the year's midpoint, 2012 is providing more of the same.

The DP will record an unprecedented fourth consecutive year running in the red when the 2011-12 school year comes to an end this June. The losses so far have been covered by surpluses from previous years, but if the paper continues operating at a deficit, within one or two years it will need to dip into its Development Fund, which is intended to be used for a new office sometime in the future.

As we've written in past DPAA newsletters, when the US economy went into a tailspin in 2008, the bottom dropped out of the advertising market and the DP's revenues dropped dramatically. Although the general economy has been making a slow and shaky comeback of late, the DP has yet to see its revenue rebound.

But the story is far more complicated than "it's the economy, stupid."

Coinciding with the recession, a major wave of change hitting the publishing, newspaper and advertising industries accelerated. Readership of traditional printed newspapers, gradually declining for years, dropped off a cliff as the smartphone revolution, and then the tablet computer revolution, rocked the publishing world. Consumer habits for media consumption changed rapidly, and advertisers tried to figure out how to reach consumers effectively via new media. The timing of the recession and the sea change in media came together as a perfect storm, resulting in four years of declining advertising revenues for the DP.

Although the paper's primary website,, and its offshoots (including,, continue to gain both readers and ad dollars, gains in online revenue are much smaller than declines in print revenue. underwent a major makeover last fall, combining a move to a new technology platform with a top-to-bottom re-design that was applauded by the DP staff, DP alumni and most importantly, readers of the site.

But the sky is not falling -- or at least not completely. The printed DP still has a great story to tell to advertisers. Readership of our newspaper, and of all media, may be more fragmented than in decades past, and there are many new venues for advertising, but the print edition of the DP each morning is still the single best way to reach a large number of people on the Penn campus with news and information. That basic fact hasn't changed.

And we've seen that there are some positive signs. For the first time since we began actively measuring pick-up rates of the newspaper around campus, we notched an increase in readership. A successful marketing campaign helped, as did a new circulation program with paid student staff members handing out papers daily on Locust Walk. On the sales front, local businesses do recognize they need to advertise to bring in customers. Although their choice of media is much more complex today, when we can sit down with them and show that students still read the DP, and that in a small community like Penn, our family of print and online publications in most cases provides the best way to reach the community, we can generally get them to do business with us. But with more competition for an advertiser's dollar, and more competition for readers' time, it's not as easy a sale as it used to be -- and the DP has found it increasingly difficult to attract and retain students interested in doing the work needed for sales and marketing success. 

The past several years of DP Boards have worked hard to reduce spending to bring expenses more in line with less revenue, while still trying to preserve the core of the DP experience. Editors stipends have been cut several times. The annual staff banquet still exists, but minus its hallmark open bar. There's no longer an expensive Associated Press wire or LexisNexis subscription. Travel to conferences, though beneficial and educational, has been mostly cut. The professional staff is down to four employees, the smallest it has been since the early 1970s. The daily press run has been trimmed by more than 25%, and the papers are thinner than they've been since the early 1980s. Computer and software upgrades and replacements have been repeatedly delayed. As a result of these and other cuts, the DP's budget has decreased from $1.3 million in fiscal 2007 to $940,000 in fiscal 2011. It's the first time since 1994 that the DP's budget has been less than $1 million. But with all the budget cuts, revenues have dropped more than the paper has been able to trim its expenses.

The DP is hardly the only college newspaper wrestling with deep drops in advertising revenues. A couple college dailies have dropped one day a week of publishing, and the University of Georgia paper made a drastic cutback from daily to weekly publication this school year. Another college daily is preparing to switch to twice-weekly publication in the fall. The University of Illinois paper announced to its readers in a front-page editorial in February that it was struggling with a $250,000 debt to its printer and being behind on its mortgage payments. An appeal from that paper's most-famous alumni journalist, movie critic Roger Ebert, said "It is possible the Daily Illini could cease publication… Many, including myself, would say that they owe their careers at least in part to their experience at Illini Media. It’s now time to give back.” The Illini's financial solution came from seeking and receiving a $3 per student fee which will provide $120,000 a year.

The DP, while struggling, is faring better by comparison. The financial losses over the past four years -- which may exceed $300,000 when the final results of the current school year are tabulated -- have come out of accumulated surplus funds. We are fortunate that year after year of DP Boards saved our surpluses over much of the past three decades, so we are able to weather this downturn now. As bad as the financial changes have been, we've never had to be concerned about keeping the lights on or making payroll or keeping the presses rolling.

But, I must caution, the reserves are not bottomless. If we continue to lose money, next year or the year after we may exhaust our unrestricted reserves and need to dip into our Development Fund. The DP has about $2.5 million in restricted and designated funds for such things as scholarships and the long-discussed-but-still-on-the-backburner new office. We obviously don't want to use any of the funds accumulated over nearly three decades for an eventual new home for the DP, but it may become necessary to take a shallow dip into those reserves if we can't generate more revenue in the next year or two.

Students on the DP Board split their attention between trying to maintain the DP's tradition of excellence in print and online while exploring possible new sources of income. With limited resources, in both staff time and dollars, the DP can't try every new idea that pops out of journalism think tanks. Our ongoing struggle to retain committed students in advertising sales and marketing have limited the paper's ability to pursue certain revenue-generating ideas. We are trying to focus on strategies that seem to offer the best chances for sustainable new sources of income, so we say no to a lot more ideas than we say yes to. But we're nowhere near out of ideas yet, either.

Got a comment? Got an idea for the DP? Write me at!

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Last Updated on Wednesday, September 05, 2012 09:16 AM
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