Freedom of the Press

After years of giving away their products online, Motown’s once mighty newspapers are still reeling from the aftershocks. With circulation and ad revenue continuing to drop — and most of the papers still available free on the Web — The Detroit News and Free Press have drastically cut back on home delivery — and on staff. So can their groundbreaking new Internet strategy keep Detroit’s newspapers aloft?

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When asked how Detroit’s newspaper experiment is going, Rich Harshbarger, the papers’ vice president for consumer marketing, likes to talk about Fred Roperti, a 77-year-old retiree in Salem Township.

Roperti was initially angry when the news came that the Detroit newspapers would no longer offer home delivery seven days a week. But when the papers moved largely online at the end of March, he found he liked the idea. In fact, he wrote the editors a laudatory letter, which they swiftly published.

“This is my second day with the new system and surprise, it’s much better than I imagined,” the elderly widower said. Now, he gets up in the morning, makes coffee, and then ambles “upstairs to my bedroom where my computer and desk are located. One benefit so far — I don’t have to jump into a cold car in my pajamas and drive to the end of my driveway to get the newspaper.

“And if I want to go out for breakfast on those non-delivered days, I can just stop at the gas station and get a paper. What more can a guy ask for?”

However, not every subscriber shares his enthusiasm. Elizabeth Zerwekh is at least as computer-literate as Roperti and, at 55, is young enough to be his daughter. A rare books librarian in training, she recently completed a mind-numbing grad-school computer course at Wayne State University. A Free Press reader for most of her life, she prefers reading a newspaper on paper and doing the crossword puzzle in ink in her West Bloomfield Township home. “I don’t want to read the paper online,” she says. So she doesn’t download the crossword puzzle and print it out. Instead, she’s switched to The New York Times.

For the Detroit Media Partnership (DMP), survival depends on converting readers to the brave new world of online publishing. “We absolutely believe in rich, robust printed newspapers seven days a week,” says Harshbarger, a Gannett executive now serving his second stint in Detroit. “We simply can no longer afford to [home]-deliver them every day.”

Nobody doubts that Detroit’s newspapers have been losing buckets full of cash. An internal Gannett memo leaked last year revealed that they were losing money in 2007, when the national economy was booming and virtually every other Gannett paper was turning double-digit profits. (The company does not publish profit-and-loss statements for individual papers.)

But those margins were ebbing more and more every year. By 2007, the situation had become especially acute in Detroit. Nobody then foresaw the stock-market collapse or the downfall of the housing and auto industries, among others.

It was clear, however, that the more people came to understand the local economy, the harder it was to envision a scenario where the Detroit papers would again be rolling in dough. So, led by Free Press publisher David Hunke, Detroit newspaper executives began formulating a secret plan called “Project Griffon.”

Finally, on Dec. 16, 2008, after other media outlets began reporting details of the online experiment, the DMP made the announcement. Beginning March 30, the newspapers would be delivered only on Thursdays, Fridays, and Sundays. However, subscribers would be able to read a “virtual newspaper” online seven days a week. Alternatively, they could go to the store and buy a paper or, for a substantial extra fee, have one delivered that day in the mail.

Clearly, the hope is to convert readers to the Internet as completely and quickly as possible. “There’s no going back,” Hunke said at the time. If the experiment works, it could mean that Detroit has invented the platform for the newspaper of the next century. If readers migrate en masse to the World Wide Web, it could prove the newspaper industry’s salvation. Freed of much of the cost of delivery and paper, newspapers would be able to operate with drastically reduced overhead.

That is, if it works.

The history of Detroit’s newspapers over the last quarter-century is largely a history of shortsightedness and disappointment. To understand what’s happening today, you have to follow a trail back to the infamous Joint Operating Agreement, a 1986 merger of the business functions of The Detroit News and Detroit Free Press.

On April 14 of that year, after ages of all-out, exciting, and expensive head-to-head competition for readers and advertisers, the News and Free Press announced they were applying for a JOA. The News, which had been acquired by Gannett just weeks before, and the Free Press, owned by the Knight Ridder chain since 1940, would ask the federal government for permission to merge their business operations while still publishing separate papers and maintaining competitive newsrooms.

That was something allowed by the Newspaper Preservation Act of 1970 — but supposedly only when one of the papers was in danger of going out of business. The Detroit JOA was a bitterly controversial move opposed by suburban publishers and media watchdogs for a plethora of reasons.

One of those was that when it was announced, it was seen by all parties as a license to print money. Newspaper execs talked of $100-million-a-year profits as far as the eye could see and as long as the agreement lasted, which was to be for 100 years. After many bitter courtroom wars, in November of 1989, a divided U.S. Supreme Court allowed the JOA to go forward. The corporations celebrated, but the JOA never worked as well as it was supposed to. There were horrendous coordination, delivery, and morale issues; readers and advertisers griped they were being asked to pay more for less; and many subscribers canceled one or both newspapers.

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