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The government body that oversees the U.S. Postal Service has approved a plan to cut postage rates for one of the nation's top direct marketing companies, a move that threatens the newspaper industry's biggest money-maker: the Sunday advertising bundle. (AP Photo)

It is a small and obscure agency in Washington, but the five-member Postal Regulatory Commission has just made a decision that could have a profound influence on the economic future of newspapers, including The Boston Globe.

At stake is the roughly $1 billion profit that goes to U.S. newspapers from those inserts in your Sunday newspaper. Under a deal that one analyst told the Associated Press would be “lethal to newspapers,” the Postal Service would now get $15 million over three years from the huge marketing company Valassis Communications Inc., in exchange for a discount on the ads it sends through the mails. Not bad for the beleaguered Postal Service, but for newspapers? Well, “lethal” sounds about right.

Newspaper managements failed to recognize how drastically the Web would disrupt their comfortable niche.

Newspapers don’t need any more bad news. As more and more ad dollars move to the Web, newspapers’ advertising revenues are evaporating at an alarming rate, from $49.4 billion nationally in 2005 to just $23.9 billion last year, according to the Newspaper Association of America. Newspapers were so profitable for so long – margins often reached the high 30s – that when the Web came along, managements that had grown fat and complacent failed to recognize how drastically it could disrupt their comfortable niche.

The result has been a frantic effort to save themselves, with no one quite sure how to do it. Some have simply raised the price of a print subscription. Others, including The New York Times, the Wall Street Journal and the Globe, have built paywalls around their online news. But those have met with mixed success at best – so far the Globe has just 23,000 Web-only subscribers, about a tenth of its print readership – and only about 300 of the country’s roughly 1,700 dailies have put them up.

Still other publishers are pursuing a different strategy. Advance Communications, owner of the New Orleans Times-Picayune and other papers, is reducing the Times-Picayune staff and concentrating on its website – and publishing a print newspaper just three times a week. The new schedule, which begins Oct. 1, will leave one of the country’s major cities without a daily newspaper.

In August the Advance-owned Harrisburg (Pa.) Patriot-News and its sister Syracuse, N.Y., Post-Standard announced they too will soon become three-day-a-week papers. Advance is trying to convince the cities where it owns newspapers that their websites will take up the slack when the papers reduce their schedules, but no one ought to be fooled.

A month after the Times-Picayune made its announcement, the ax fell on 84 of 171 newsroom staffers. Editor Jim Amoss toed the company line: “We’re committed to being the journalistic watchdog of our communities. We’re committed to the high quality of journalism our readers have come to expect from us, produced by a formidable news staff.”

How a newsroom that loses nearly half of its experienced staff can produce watchdog journalism was not explained by Mr. Amoss.

Which brings us to Boston, where the question is whither local journalism?

It is simply unthinkable to contemplate public life in Massachusetts without a daily print Globe, diminished though it has been since its purchase by The New York Times in 1993. The Globe sets the agenda even as it fights to stem the loss of readers.

Its coverage of the two subjects that have a firm hold on Bostonians – sports and politics – set it well above its print, Web and broadcast competitors, despite bizarre news judgment and a top management that often seems out of touch with local concerns.

It’s not just nostalgia that makes me say so: Boston would be lost without Globe columnists like Adrian Walker, Brian McGrory and Kevin Cullen who puncture the balloons of blowhards and help preserve Boston’s colorful history and fast-dying blue-collar culture. The paper’s investigative journalism on subjects as diverse as fish marketing standards and the $360,000 annual salary of the Chelsea public housing director is unmatched. Its news reports, even from a staff no longer as muscular as it was, still holds government, especially state government, accountable. And it still provides much of the content for the city’s TV newscasts.

Last Sunday, the Globe hit my doorstep with 10 advertising inserts, including RedPlum, a 30-page booklet of coupons and sales come-ons. RedPlum is a product of Valassis Communications – yes, the same company that, unless a federal judge reverses the deal, could soon find it easier and cheaper just to send its ads through the mail.

The New York Times doesn’t break out the earnings of its New England Media Group, which includes the Globe and the Worcester Telegram & Gazette, so it’s hard to know how much revenue the RedPlum insert generates. But the Times is fighting to stay profitable and has shown it’s not reluctant to shed some of its losing properties, such as its 16 smaller regional newspapers and, last month, its web venture About.com.

In 2009, when the Times was locked in a dispute with the Globe’s unions, demanding pay givebacks and benefit cuts (a dispute they won), a local group stepped forward and offered to buy the paper. Then, the Times turned them down. Now, though, I can’t help wondering if the Postal Regulatory Commission’s Valassis deal will mean the local group might get a second chance to buy the Globe.

The views and opinions expressed in this piece are solely those of the writer and do not in any way reflect the views of WBUR management or its employees.

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  • J__o__h__n

    Great, more crap that I don’t want in my mailbox.

  • J__o__h__n

    Has Boston.com lost money due to fewer visitors as it is no longer carrying much substantive news?

  • RandyF

    Every story I see about this “sweetheart deal” neglects a few very important facts. First, anybody can apply to negotiate an agreement with the USPS. Second, Valassis is NOT getting a huge discount on all of their mailings. An NSA is usually reached between the mailer and the USPS and is based on the mailers previous volume of mail.

    For instance, if Valassis mailed 10 million pieces, on average, the past three years, the NSA may offer a discount on those pieces that EXCEED that average. It’s a way to encourage the mailer to enter more mail than they did previously.

    Conversely, if the mailer fails to achieve the negotiated levels of mail volume, there are penalties that must be paid.

    Third, on top of all of that, Valassis enters their mail by Drop Shipping. They drop the mailings off at the USPS facility that handles those particular ZIP Codes. Very few Newspapers do that.

    Maybe these newspapers should focus on being competitive rather than filing silly lawsuits to stymie it.

  • Eva Arnott

    Now that we can get local news without interpretation from ‘Patch’ and national and international news from dozens of sources, the niche formerly filled by the Globe no longer exists.

  • Nancy currie

    I would so miss my morning Globe. I like reading the paper in it’s full format, much like I like reading a hardcover book.

  • Roy

    I stopped subscribing to newspapers several years ago when I just could no longer stand their obvious and blatant left wing/pro-democrat bias in almost every story they printed. I decided to “just say no” to giving them any more of my money. I know that I am not alone…and they just don’t get it, using every excuse for their downfall except the fact that they have alienated half their readership. We don’t have to listen to their liberal drivel anymore now that there are alternate choices on the web. That is the elephant in the room that no one is talking about and the newspapers will not admit to.

  • Steve

    Newspapers are dying because sensationalism has replaced objective journalism. People focus more on social media, which tends to be opinion driven, focusing on emotions and drama as opposed to facts the truth. Admittedly, it is hard for me to identify an era when American Journalists, even news media, aspired to be true objective journalists. While it is disheartening to see people lose their jobs, perhaps if more focus and attention was placed on objective, unbiased, reporting, our newspapers would be a thriving pipeline for fact based news to people who are interested in truth based knowledge. I know that I would be willing to pay for unbiased news feed.

  • Harry51S

    What the publishers – and many of the commentators on this phenomenon – don’t seem to grasp is simply this: it’s the message that’s important, not the medium. Local, unbiased, accountable journalism shouldn’t be different just because it’s web-based instead of paper. Give me compelling responsible journalism and it won’t matter to me where I read it; I’m growing to prefer the convenience of anytime/anywhere access to the news on my tablet and/or smart phone, but I’ll stop reading the Globe (or the Times) if it stops delivering quality content, no matter how it’s delivered.

    Harry, Newburyport MA

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