Amid the online-only shift of the Seattle Post-Intelligencer, a threatened Boston Globe, and the state's own Blethen Maine Newspapers for sale, the news industry today is struggling. With advertising revenues falling for all, print subscriptions down 15 to 20 percent at some Maine dailies in the past eight years, and burdensome debt structures to support, newspapers in Maine are looking, with the rest of the country, for ways to weather the storm.

At first glance, Maine's smaller-scale, localized newspapers appear to be faring better than some of the more troubled, larger daily newspapers in other cities, which are facing huge production costs in a rough economy, large debts incurred by owners, and competition from many other city news outlets.

"As people's interests have become, in my mind...more about my community and my life, local papers are doing better. That doesn't mean we're doing as good as we were three or four years ago, but our rate of decline is much more gradual than the big city papers," said Eric Conrad, executive editor of the Kennebec Journal and the Morning Sentinel.

Nonetheless, Maine's papers are not immune to the blights facing the industry and country at large.

"All newspapers, big and small, face the challenges of adapting to industry changes... We're all struggling to some degree to create a 21st-century business model that will sustain the industry," said Robert Long, managing editor of the Times Record in Brunswick.

Traditionally, newspapers expected to receive 70 to 75 percent of their revenues from advertising sales, and 25 to 30 percent from circulation. Across the board, Maine editors have seen classified advertising decline drastically as jobs, real estate, and for-sale listings move to specialized Web sites. According to Rex Rhoades, executive editor of the Lewiston Sun Journal, this is leaving some newspapers without 15 to 30 percent of the revenue they once depended on.

"Where newspapers used to have a monopoly, we've lost a slice of that market, and I don't think we will ever get as much revenue or monopolize that market like we used to," said Rhoades.

Declines in readership

In addition to declining revenue from advertising, newspapers have been seeing a steady decline in print readership for years.

A recent Portland Phoenix article, citing reports from the Audit Bureau of Circulations, explained that in the past eight years, the Portland Press Herald has lost 16 percent of its subscribers, and the Bangor Daily News has lost 15 percent, compared to the Boston Globe's 24 percent decline. In the eight-year period from 1996 to 2004, the Lewiston Sun Journal lost 19 percent of subscribers.

Eric Conrad, executive editor of both the Kennebec Journal and the Morning Sentinel, estimated that print readership has declined between 1 and 3 percent a year for his papers. Rhoades suggested that print readership has been declining at these rates across Maine dailies for the past 10 to 15 years, with faster rates of decline in other states or more metropolitan areas.

According to the Audit Bureau of Circulations, the Portland Press Herald is Maine's biggest daily paper, averaging 64,575 weekday readers and 100,454 for the Maine Sunday Telegram. The Bangor Daily News attracts 55,951 readers on weekdays and 64,575 on weekends, while the Brunswick Times Record reports 9,070 weekday and 11,057 weekend readers. Conrad reported a combined circulation for his papers of about 32,000, noting that the Lewiston Sun Journal is not far behind.

While print readership is down, Conrad pointed out that between April 2007 and 2008, online readership of the Kennebec Journal increased by 90 percent. Rhoades said the Sun Journal's online page views are up 35 to 40 percent. Maureen Wedge, vice president of human resources for the Sun Media Group, said that with online and print readership combined, "there have never been so many readers perusing our news and information."

"The problem is, on the print side, revenue is declining much more quickly than it's increasing on the Web side. That's a problem for every Maine newspaper," said Rhoades.

The Internet's profit paradox

For newspapers across the country, the Internet is both the problem and the potential solution. While newspapers may currently be losing money with free readership online, and losing revenues as advertising moves elsewhere on the Web, it also presents an opportunity to reach broader audiences.

"We continue to experiment with ways to use online media to enhance our product, but in a way that doesn't undermine our ability to stay in business. It seems to me that newspapers jumped in the 1990s to post content online without fully contemplating the impact that would have on revenues and reader habits," said Long.

John Porter, editorial page editor at the Portland Press Herald, said that right now, with so few barriers to entry and low costs to go on the Internet, newspapers face a lot of competition, making it hard to charge for content. The economic theory, he said, is that these marginal competitors will drop out, sources will consolidate, and newspapers will be able to charge for content.

Maine editors said they are working to embrace and improve their paper's online media, offering more frequent updates, as well as audio and video broadcasts to compete with television news stations.

"The theory is, OK, we're going to hang in there until those prices firm up," Porter said. "Surviving in the meantime, I think, is showing to be a real challenge, especially given the challenges of the current economy."

Present dangers of debt

While declines in advertising and circulation are significant, many Maine newspapers are still generating enough revenue to cover their operating expenses. Porter said that the real financial strain is coming from the debt structure involved with these newspapers.

He explained that in past years, newspaper companies were sold for much more than the actual value of their assets or normal profit returns—sold for their "good will"—on the theory that, as strong monopolies on news generating more profits, they would be leveraged over time. Under today's economic stressors, however, newspapers have not met their financial expectations, and their goodwill value is gone.

Now, with huge debts and financial obligations to shareholders, many newspaper owners are at a loss to make their payments, and have turned to closing down or selling the papers.

Last year, the Seattle Times Co., owned by the Blethen family, decided to sell its Maine media properties, including the Portland Press Herald, Kennebec Journal, and Morning Sentinel. A Press Herald article from March 2008 estimates the Blethen family may have paid around $200 million for the papers in 1998.

Details about any negotiations or buyers have been limited, though there were talks of an investment group seeking to buy Blethen Maine Newspapers for a "bargain basement price," according to a March 2009 article in the Morning Sentinel.

Porter said that for the industry to survive, two things must happen. First, while it may not be easy, struggling newspapers need to figure out a way to get rid of their debt, even if it means being sold or declaring bankruptcy. Second, newspapers must figure out a way to make the Internet profitable. Along the way, marginal costs can be cut as necessary to make ends meet.

Keeping things local

With uncertainty about the future, Maine newspapers share the economic plight of the nation, and they are looking to cut costs in the short term. Woodward said that many papers nationally have undertaken wage cuts, and staff sizes are down throughout the state.

"Like virtually every other paper in Maine, we've had to eliminate a few positions and, as a result, rethink the way we can best allocate resources to meet readers' and advertisers' needs," said Long.

Newspapers are focusing on delivering local stories, and collaborating on statewide stories. Long explained, "Maine daily newspapers compete marginally for statewide stories, but for the most part, the relationship between the dailies is now more cordial than competitive."

He said that the Press Herald once maintained a bureau with two full-time reporters at the Times Record, and similar bureaus in Augusta, Bath, and Biddeford, but they were closed in July 2008. Now, five of the state's daily papers, including the Press Herald, Kennebec Journal, and the Bangor Daily News, collaborate and share stories, rather than compete.

When Conrad tried to imagine a scenario in which one of Maine's dailies went under, he said it would be difficult for another daily paper to step in and take its place. Due to the geographical separation and lack of overlap between papers, the costs of hiring reporters, maintaining coverage hundreds of miles away, and printing and transporting the papers each day would be too great.

Woodward expressed concern that without local, daily news, "people will lack a common base of information on which to base public policy decisions and conduct a public dialogue."

Similarly, Long said that he doesn't see television news or blogs as "viable competitors" for Maine newspapers yet, who often "repackage the work of print journalists" and "lack the ability to provide the depth of coverage" the newspapers do.

Conrad agreed, stating that news stations don't have the same "reporting firepower" that daily newspapers have.

"If we're not covering it, really nobody's covering it," he said.

Looking forward

Certainly, editors have expressed their concern about the industry's stability and what's to come next. Conrad admitted that it's "awfully scary reading and hearing about these papers closing," and Rhoades said that it's a "really scary time, but a really exhilarating" one as well, with the possibilities for change to come.

Woodward drew a comparison to the perfect storm hitting newspapers right now, with a decline in advertising, readership, younger readers, and a bad economy. Long compared what's happening now to the railroad industry 100 years ago, threatened by first cars and later airplanes, but still here today.

"The railroad industry went through a significant and often painful restructuring, but it did not die," he said. "I see newspapers now to be at the same crossroads that the railroads were at a century ago."

Porter said that the good news, and the optimistic line in the industry right now, is that there still are readers, people are still interested, but there's just trouble to be worked out with the economic model.

Until then, editors are hopeful they can hold out in the turbulent economy.

"Maine dailies are, by and large, community newspapers—and I firmly believe that they will retain their value, if not expand it, as part of a national re-examination of the value of community," said Long.