OK, friends, it’s time for a lesson in newspaper economics 101.

Stay with me, please. This isn’t particularly fun for either of us, but I hope I’m able to explain some of how the newspaper works and some of the challenges we’re facing.

You may recently have seen that The Seattle Times is laying off 200 people. Before that they announced the consolidation or elimination of several sections of the newspaper. They’re joining a lot of other newspapers that have done the same things in recent months.

There are two reasons for the changes: one is cyclical (we’re in a recession – at least in advertising-supported businesses – and business is slowing) and one is secular (the Internet is taking away some more of our advertising business, perhaps for good).

That means changes at your daily paper.

So you ask: Why should my newspaper cut people or news space when I’m still charged the same for a newsstand copy or for home delivery?

Here’s why. What you pay for the newspaper – whether you buy it at a coffee shop or have it delivered at home – pretty much covers the delivery costs, and that’s all. Relatively speaking, that’s a pretty small part of our total expenses.

Everything else – the newsprint, the cost of all the people who gather and print the news, the expensive technology (the presses, computers, photo and video gear), the national and international news we buy from various services – is covered by advertising revenue.

So, as you might imagine, there is tremendous pressure right now on all expenses at every newspaper in America.

The same is happening at TV stations, which are also advertiser-supported, though I’m not as familiar with their issues. And it’s also happening at advertiser-supported Internet businesses. (Google was off nearly 40 percent from its 52-week high on Thursday, though it bounced back Friday to being merely 30 percent down at mid-day based on good first quarter earnings.)

What this means for The News Tribune is that we’re looking at ways to trim costs, shooting for things that will impact customers the least.

We’ve made two decisions that will show up soon.

Next Saturday there will be two fewer pages of week-ending stock reports. Newspapers all over America, including us, have trimmed back stocks in our daily business pages – to almost no reader reaction. That’s because almost all active investors watch their stocks on the Internet these days.

The pages we keep will focus on the most actively traded stocks and the most widely held mutual funds.

Another change will come in early May, when we take the movie descriptions out of the Sunday TV book. The daily grids, including the movies, will still be there. But the specific descriptions of movies will be gone. We’ll also remove the premium channel listings from the grids. People who get HBO and other premium channels typically also get on-screen listings. Those are not changes that we wish to make, but they’re preferable to removing anything else we can think of.

I don’t want to pretend that subtracting content is some great idea. And I don’t want you to think that readers alone are bearing the cost of reduced revenue.

We’re making up most of the reductions by cutting expenses internally, mostly in ways that readers will never see. There’s a hiring freeze on all but the most essential jobs. We’ve cut training and all but essential news travel. We’re also simply absorbing a good part of the loss in lower profitability. (See our stock price – down more than 70 percent from our 52-week high – for evidence of that.)

Other changes may come. We’re looking at reducing the number of pages in the Sunday comics, while keeping all or most of the comics.

We’re also examining whether to combine some sections of the paper. Doing that sometimes saves a page here or there, without sacrificing content. What goes primarily is what we call “house” advertising (TNT marketing and promotion ads).

I’m telling you this to let you know what’s going on, and to tell you how it affects what you read, and how it affects us as a business.

Thanks for your attention. You may now resume your regular Sunday programming.

Dave Zeeck: 253-597-8434

david.zeeck@thenewstribune.com

blogs.thenewstribune.com/editors