Why the Chronicle Prevailed in Houston
Moves made 20 years ago sealed the fate of the Houston Post.
By John Morton
John Morton (firstname.lastname@example.org), a former newspaper reporter, is president of a consulting firm that analyzes newspapers and other media properties.
In the newspaper business, a clear view of the future – it might even be described as similar to the sudden "visions" mystics talk about – can determine which newspapers prosper and which ones die.
Richard J.V. Johnson, publisher of the Houston Chronicle, had such a vision 20 years ago and, probably more than anything that has happened since, it is the reason the Chronicle is still in business and the Houston Post is not. It was the lack of such a vision that helped sink the Washington Star, the Philadelphia Bulletin and other once-dominant afternoon newspapers that populate the masthead graveyard.
By the mid-1970s, the afternoon Chronicle had only recently pulled ahead of the morning Post after a long circulation battle. At the time it was not common wisdom that morning papers would inevitably prevail over afternoon papers, nor was it widely understood that even cities as large as Houston might one day have only one paper.
What Johnson did know back then was that his first major decision after taking over as chief executive in 1973 – a decision he had unsuccessfully urged before his elevation – had been a spectacular success. The decision was to convert the Chronicle's Saturday edition to morning publication.
Within three weeks of the change, advertiser response was so favorable that the Saturday edition jumped from 38 to 72 pages. The Saturday success became the genesis of a long-term strategy to convert the Chronicle wholly to morning.
The paper changed slowly to avoid disturbing its subscribers as much as possible. It first converted subscribers living far from the Houston core market and then, almost neighborhood by neighborhood, it gave subscribers the option of morning or afternoon delivery for a time – until Houston itself was converted. It took almost 20 years. The last afternoon home delivery, of less than 10,000 copies, came in 1993.
During the conversion the Chronicle kept up its circulation growth momentum until, as usually happens when one newspaper gains a sizable lead over a competitor, the Chronicle's domination of the Post in circulation and advertising became complete.
Other factors, of course, contributed to the Chronicle's ascendancy. The Post's owners, the Hobby family, sold the paper in 1983 to the owners of the Toronto Sun, who immediately offended conservative Houston readers by tarting up the Post in the manner of flashy Canadian tabloids. Four years later both Houston papers were sold. The Hearst Corp. bought the Chronicle; William Dean Singleton took control of the Post. Singleton concentrated on making the Post a locally oriented newspaper. But by then it was too late.
By the time Singleton shut down the Post in April, its share of the metro area's daily newspaper readership had slipped to 41 percent on weekdays and 34 percent on Sundays – perilously low shares for a competitive newspaper. Even these shares had been achieved at the considerable expense of discounts and promotions.
The last annual audit by the Audit Bureau of Circulations indicates that 59 percent of the Post's weekday circulation of 287,215 and 74 percent of its Sunday circulation of 316,852 had been sold at a discount rate. By contrast, only 35 percent of the Chronicle's weekday circulation of 412,337 and 26 percent of its Sunday circulation of 606,707 were discounted. This disparity in discounting is a classic sign of a newspaper struggling to stay competitive.
Despite the differences in circulation, the Post carried a lot of advertising. Singleton said he was able to raise the Post's share of advertising linage from 37 percent to 44 percent in the seven years he owned the Post (as in circulation, some of this growth likely stemmed from discounting), but weakness in classified (39 percent overall but only 30 percent on Sunday, the most important revenue day for newspapers) was a continuing problem.
Even with weak circulation and relatively weak advertising, Singleton said, the Post generated enough cash flow from operating profit and noncash charges, such as depreciation, to enable him to pay off some of the $100 million in debt he incurred in buying the paper (Singleton owned the Post separately from the other newspapers he owns with partners in MediaNews Group.)
The reason the Post was able to show a profit in recent years, of course, is that until recently newsprint sold at abnormally low prices because of a six-year-long imbalance between supply and demand.
Costlier newsprint would add $18 million to the Post's cost this year, more than wiping out the paper's profit and his ability to service remaining debt, Singleton said. "Cheap newsprint kept the Post alive," he explained.
While the recent price increase was the ultimate cause of the Post's failure, the decision by the Chronicle some 20 years ago to convert to morning publication started the process. Had the Chronicle not converted, the new masthead in the graveyard might have a different name. l###