< Weathering the Storm

Transcript

Friday, July 18, 2008

BROOKE GLADSTONE:
This is On the Media. I'm Brooke Gladstone.
BOB GARFIELD:
And I'm Bob Garfield. In this weekend’s newspaper apocalypse round up, Gannett’s quarterly profits were down 36 percent, The Atlanta Constitution cut 8 percent of its workforce, the editor of The Chicago Tribune quit, the publisher of The L.A. Times resigned under pressure and The New York Post and New York Daily News, the Itchy and Scratchy of tabloid rivalry, discussed cooperating on production to cut costs. The Washington Post somehow stayed out of the dreary headlines, for once, but amid declines in circulation and revenues and dramatic staffing cuts, it hasn't much lately.

Presiding over the future of The Post in these turbulent times is publisher Katharine Weymouth, the granddaughter of the legendary Katharine Graham. Weymouth has been at The Post front office in various capacities for 12 years but landed this plum job six months ago, smack dab in the middle of the industry’s tailspin. Katharine, welcome to OTM.
KATHARINE WEYMOUTH:
Thank you.
BOB GARFIELD:
Print circulation is down. Craigslist pretty much killed the classified ad business. The online product brings in vast new audience but new vast new revenue, I guess, because the ad rates commanded for online content are pennies on the dollar next to your print rates.

Can you please give me a sketch of how all of this has affected The Post’s financial situation?

KATHARINE WEYMOUTH:
I mean, there’s no question these are daunting times and we are not immune. And particularly this year, with the economy, as well as all the competition, revenues are down significantly. We had hoped to see this year tick up a little bit, but obviously it hasn't, and I expect next year to be tough as well.
BOB GARFIELD:
It’s often said that maybe the days of the 30 percent profit margins are over in the industry, but it’s still a very profitable business. It has been rumored, though, that your newspaper business, not the whole company but the newspaper operation, is borderline unprofitable. Is that true?
KATHARINE WEYMOUTH:
Well, we're releasing our earnings in a couple of weeks and I'm not going to talk about them before they're released.
BOB GARFIELD:
I can presume that there’s nothing we should be deliriously excited over in the offing, however?
KATHARINE WEYMOUTH:
No, I mean, I think there’s no question that it’s been a tough year and the numbers will reflect that.
BOB GARFIELD:
Understanding that the Web is still in its infancy, nobody has figured out yet how to make any money there, at least any substantial money. The slogan I hear so often is we have the audience, all we need is a business model. Do you have any hope [LAUGHS] that any such business model will emerge?
KATHARINE WEYMOUTH:
I do have hope. I mean, I think it’s a very different business from the newspaper, and we're all experimenting. But we do see double digit growth every year in our advertising revenues and we see audience growth every year. And, in general, where there’s an audience, there are advertisers that want to reach that audience.
BOB GARFIELD:
You at The Post have the luxury of two classes of stock, most of it within the family and close associates. Has that insulated you from the pressures that have so afflicted Knight Ridder and Gannett, the previous incarnation of the Tribune Company, and other media corporations that are so utterly answerable to Wall Street?
KATHARINE WEYMOUTH:
Well, I think it’s less the stock structure, although that plays a role, and more that the company overall, thanks in large part to our education division and cable, and a little bit our TV stations, is doing well, so that that does cushion the pressure for us a little bit. But it doesn't mean we don't have to stand on our own two feet, because we do.
BOB GARFIELD:
The education business you referred to is Kaplan, which is an SAT prep and online higher education company. Has that become a more significant financial force than The Post’s newspaper operation itself?
KATHARINE WEYMOUTH:
Yeah, it’s more than half of The Post Company’s revenues at this point, and it’s growing, and it’s a tremendous company. But I leave the hard questions about the overall performance of the company to my Uncle Don, because he’s running it.
BOB GARFIELD:
Okay. [LAUGHS] That’s Donald Graham, the CEO of The Washington Post Company. The Washington Post is and has been one of the great newspapers of the world. Its newsroom, however, has just lost a whole lot of institutional memories, some unbelievable talent and more than 100 souls.

I wonder about The Post’s path as a great newspaper. For how long can we assume that the paper that I get on my doorstep every morning is going to be The Washington Post as I've come to expect it?
KATHARINE WEYMOUTH:
We still have 700 people in this newsroom, give or take 100 people. I think if you said to me, take 800 incredibly talented journalists and put out a terrific newspaper and a great website and a great mobile product, that we can do that and that we do, do that.

We certainly lost a lot of colleagues, and we were sorry to see them go, but we still have incredible talent.
BOB GARFIELD:
Sam Zell, who took over The Tribune Company, has flown around the company [LAUGHS] creating animosity at almost every stop, largely by telling his own employees that many of them are irrelevant and that they're missing the point of what they do for a living. [LAUGHS] And they hate him.

They don't hate you at The Post, even though the circumstances that you’re in are approximately the same as Zell’s. How have you managed to remain the apple of your employees’ eye?
KATHARINE WEYMOUTH:
Well, I don't know if I'm the apple of their eye, but maybe because I've only been in this job for a little over five months, I guess. I'm sure over time, there will be people who won't like things that I do or oversee. And I can't really comment on The Tribune’s situation. They're actually, I think, in a quite different situation, particularly given the debt they have.

But I think also our employees understand that times are tough and that we have to shrink and we have to cut costs, and we're going to still make every effort to provide our readers the best products we can. So I think people get it.
BOB GARFIELD:
Katharine, I'm given to low level depression. Tell me something, anything [LAUGHS] about your first six months on the job that will make me feel better about the journalism world I live in.
KATHARINE WEYMOUTH:
I guess I think there’s a lot of hope, right? I mean, you know, 600 odd thousand people every single day buy our paper, and that’s the actual physical copy.

We have 9 million unique visitors every month on the Web. You know, my daughter, who’s eight, is reading books on the Kindle. And I went on vacation a week ago and I took the Kindle with me, because I couldn't get The Washington Post, and I read The Washington Post every day on the Kindle.

I mean, I think the world is changing. But we've seen movies go through this, we're seeing music go through this. Other industries have evolved and survived to see another day, and I think we will be one of them.
BOB GARFIELD:
Well, Katharine, thank you very much for joining us.
KATHARINE WEYMOUTH:
My pleasure, thank you for having me.
BOB GARFIELD:
Katharine Weymouth is the publisher of The Washington Post.