August is always an anxious month for newspaper executives — and is likely to be particularly so this year.
Typically, domestic sales fall during the holiday month. Readers are chased across the European resorts, but these sales — real or created — do not offset the lost domestic sales.
Meanwhile, back in the office, August is rarely a good month for advertising, whatever the economic context. People who are on holiday, about to go on holiday or have just been on holiday are less likely to be interested in buying or seeing a house or a car, a consumer durable, or voluntarily changing jobs.
With luck, normal activity starts again in the first full trading fortnight after August bank holiday. August itself is difficult to read, but it augurs well for the vital autumn quarter if copy sales and advertising revenues come out of the month into September running ahead of August, but also of last September.
The omens for doing so this year, across the board, are not good.
The key element in this crude business model is job advertising. If that category does well, the other categories will soon improve. Poor job advertising, on the other hand, both depresses revenue yield in the mix, and adversely affects cars, property and some display advertising.
The really bad news is that all the indicative employment statistics are moving in the wrong direction — claimants up, unemployment up, and unfilled vacancies down. We are talking here about a reduction in the rate of growth, not a recession, but the prospects might be worsened now that the Bank of England has decided to increase interest rates.
The expected downturn in advertising should not depress circulation, provided cover prices are not pushed out of sight and promotional expenditure is maintained. September and October should be good months for DVD collectors.
But equally, a cyclical downturn in advertising will do nothing to arrest the steady decline in circulation on most titles.
That decline is a strategic problem, although publishers often confuse it with operational requirements. For example, Associated is protecting its Greater London market in responds to News International's thelondonpaper plans by extending Standard Lite and Metro.
But operationally, the editor and circulation director of the Evening Standard can hardly be blamed for the quite steep decline in full sales and, indeed, could be misled into taking the paper in the wrong direction under the pressure.
The Guardian and The Observer are still benefiting from their Berliner format and radical relaunches. Elsewhere, the momentum created by going tabloid with extra promotional expenditure seems to be receding, most obviously on The Scotsman, down 10 percent year on year. Going tabloid has not halted declining sales — format may not be as important as selection, layout and presentation.
These considerations have often exercised the minds of holidaying newspaper executives most Augusts.
This year, there is something much more important to worry about on top of the usual problems — how best to respond to the net.
In 2000, a guru told the Newspaper Association of America's annual meeting that newspapers would be toast in eight to 10 years. That bold prediction was blown off course by the dotcom disaster of 2001.
But there is no question that the digital revolution is back with a bang and a vengeance. The signs are manifest on both sides of the Atlantic:
■ Exponential growth in advertising carried by digital outlets.
■ Craigslist, with 22 staff, no business plan and no suited executives, gouging the big papers in San Francisco and elsewhere for classified ads.
■ Panicking shareholders in the New York Times and across the country at the Los Angeles Times.
■ All-purpose, digitised newsrooms planned for the Financial Times and the very different Johnston weeklies.
■ The Guardian's 12 million hits.
■ The Guardian panel confusing consumer influence with media influence by putting Steve Jobs of Apple above Rupert Murdoch in its list of media movers and shakers.
■ Murdoch's own digital conversion.
■ The renewed rush by Associated and others into minority digital media acquisitions, classified ad sites etc.
In the US most papers are now committed to moving from print to the status of "digital media" with a continuing print presence and an editorial core feeding digital outlets.
The challenge is not to make the technology work, or to throw clouds of money developing markets which may not exist. It is to maintain print profitability and to develop profitable revenue streams from hits and advertisers keen to access the hitters.
Simply uploading print material to a dedicated website will soon not be enough, and all the big numbers on revenue, expenditure and capex will soon change.
Uncertain future
Bo Jones Junior is a graduate of Harvard Law School, a Rhodes Scholar, CEO of the Washington Post and current chairman of the Newspaper Association of America — a combination of the NPA and the NS, and then some. He would be in the top 20 of any list of influential executives in the US media.
This is what he told Editor and Publisher, addressing the challenge facing the industry, as he played himself into office in April.
"It's mixed. In some ways it's worse, in some ways there are lots of opportunities, and in a lot of ways we don't yet know.''
This is not exactly a clarion call from a man from whom a clarion would command attention.
But it may be the best balance to strike between an unsustainable "can do'' determination to face down the digital media, and a Private Fraser view that we are all doomed. The fog will not lift by the end of August, but in two to three years the landscape will be visible and surely more digital, but also a mixture of print, digital and hybrid, and not too much toast.
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