Pioneer Press publisher explains print drop, predicts new labor deal

Twice each year for the last several, Pioneer Press publisher Guy Gilmore gets to bask in Audit Bureau of Circulations reports that his paper has posted single-digit gains while many competitors are cratering.

If nothing else, it’s a rebuke to media cynics who’ve long prophesied the death of the area’s smaller daily.

Monday was different; the PiPress’ weekday print circulation fell 10 percent, even though Sunday stayed steady. “It is unlike us to show a print decline; I’m never happy about it,” Gilmore says. “We lost some number of copies to price; we pushed price, and lost circulation.”

The PiPress tacked on 25 cents to single-copy papers, and that turned out to be a big deal for a paper that typically underprices the Strib. Nevertheless, Gilmore says circulation revenue and operating profit was “up significantly, in this year and in past years,” and now accounts for “a little less than 40 percent” of the PiPress’s overall revenues. (The Strib is at 41 percent.)

Gilmore acknowledges what competitors also report: ad sales are off by more than circulation gains, but insists his bottom line has been “stable” for years, and is now “very stable to positive.”

That’s of keen interest to Pioneer Press workers, who are on yet another extension of a furlough-laden but lay-off protected contract first negotiated in 2009. In the past couple of years, the newsroom resumed selective hiring, but staffers tell me several recent departures have not been replaced, the sort of cost control that can keep profits up even as top-line revenues fall. Gilmore says he expects to close a new labor deal “by the end of May.”

The Pioneer Press remains viable by, in Gilmore’s words, “dominating” the east metro, centered on Dakota, Washington and Ramsey counties. Despite print declines, he touts a 2:1 and even 3:1 advantage over the Strib there. In the three weekdays the Pioneer Press emphasizes — Wednesday, Thursday, Friday — Gilmore says home delivery is up over six years ago, the opposite of most papers.

Gilmore has a stiletto wit, and can’t resist a few shots at the competition. I asked him if he’d try a “branded edition” — the Strib has something called “Express,” a free product which wraps the Sunday ads with lightweight features, giving advertisers more market penetration. Express accounts for about 30,000 of the Strib’s 544,000 copies. Gilmore replied, “We don’t do that. We haven’t had the Sunday losses” over the past half-dozen years as the Strib has until recently.

I told the publisher I’d gotten tips that the PiPress’s $1-a-year offer had expanded beyond a couple of core counties, to keep circulation growing by any means necessary. He replied that such deep discounting had decreased, adding, “We don’t do non-stop $1 [direct] mail for a $26 Sunday subscriptions with a $25 gift card,” a reference to a Strib promotion.

(Strib officials declined to comment about their latest numbers beyond a news release.)

Print remains important as a nearly perfect proxy for circulation revenue at the Pioneer Press, which unlike the Strib does not have a subscriber pay wall or restricted tablet/smartphone app access. Like his new management overlords at Pennsylvania-based DigitalFirst Media, Gilmore embraces the “free digital” strategy that hopes to recoup revenue from advertisers more than users.

One reason the PiPress was able to outpace the Strib in circulation growth in the latest report is that St. Paul set the digital bar lower, counting 11,372 iPad/iPhone app users who pay the “paper” exactly nothing. (Strib subscribers pay for digital access or get it through their print subscription; the PiPress can count anyone who registers and uses the app once every six months.)

Unlike Strib Express — which I don’t count when I report news circulation — the PiPress app has real journalism content. Still, if you were an advertiser only interested in paid users, removing free-app “subscribers” would wipe out the PiPress’s weekday growth of 6 percent and reduce Sunday growth from 6.4 percent to 1.9 percent.

Regardless of whether readers write a check, Gilmore says digital revenue is up 40 percent in the past year. Perhaps leveraging the Strib’s pay wall restrictions, the PiPress’s twincities.com claims 18.6 million March webpage views, up 56 percent from a year earlier, plus 2.6 million mobile page views, up 158 percent. Combined print-online penetration in the PiPress’ million-person home market rose from 61 percent of adults to 65 percent.

Still, the ABC digital stats were not all balmy: web users (as measured by unique computer “cookies”) were down 9 percent from March 2011 to 2012. Gilmore suggests it’s a one-month anomaly, perhaps due to some hotter news events last year, considering other web stats are showing consistent monthly growth. It’s possible fewer users are accessing more pages, or that mobile is biting into the website, or that, given penetration numbers, the PiPress is losing non-locals. The latter seems unlikely since managing editor Chris Clonts recently touted twincities.com’s improving Google search optimization, one of the many tweaks of the DigitalFirst era.