The Times Free Press has sent a letter to subscribers saying the daily newspaper has been losing money since the pandemic and it will have to raise rates to subscribers.
The letter, from Publisher Eliza Hussman Gaines, Editor Alison Gerber and President Alton A. Brown, said the increase will be from $34 per month to $39 per month.
The letter cites woes facing newspapers in the digital age and says "As long as a business is profitable, someone will continue to own and operate it. But if the business continues to be unprofitable, ultimately no one will own and operate it."
A number of daily newspapers across the country have had to close their doors. Chattanooga was once served by the morning Chattanooga Times and the afternoon Chattanooga News-Free Press, but they merged in 1999 and the afternoon edition stopped.
The letter says:
Chattanooga has been served by a privately-owned daily newspaper for 155 years. It's an honor to carry on that tradition and produce well-researched, fact-based journalism for our community.
The work of local journalists helps residents better understand how their community works and the consequences of decisions made by its leaders. Our work covering this community helps our readers make informed decisions.
As a subscriber of the Times Free Press, you are a valuable partner in our efforts to engage and empower our community.
Your support allows us to produce a newspaper each day that has more local stories and more pages than newspapers in much larger cities. The news industry has faced significant challenges in the past decade - the result of a digital disruption and declining advertising revenue. For many years, subscription costs were subsidized by advertisers. But today, with advertising revenue dropping at all American newspapers, we rely more heavily on revenue from subscribers.
Your support allows a team of reporters to cover the Chattanooga region. It allows David Floyd to cover local government and the ongoing debate over the new Chattanooga Lookouts stadium; Ben Sessoms to explore how ongoing growth will shape the city; Elizabeth Fite to report on health trends and issues; and Dave Flessner to keep readers informed of what's going on in the business community.
It also allows Andre James to report on the dining scene and new restaurants. And it helps us to have a reporter, David Paschall, follow the Tennessee Vols from their opening game in Neyland Stadium through the season all the way to the Citrus Bowl.
We also carry on a unique tradition: producing two editorial pages so readers every day see both conservative and liberal opinion and editorials on local and national issues.
We take our responsibility to cover all these topics and serve our readers seriously. We're guided by our core values, which are published on page 2 every day. We are committed to solid journalistic standards and transparency, sharing them so subscribers and readers can hold us accountable.
Today, over half of the newspapers delivered in America are published by private equity companies. This does not include the publicly-owned companies. The Times Free Press is owned and operated in a company by its fourth generation of family ownership. Three generations have graduated from two of the top journalism schools in America, the University of Missouri and the University of North Carolina.
The Times Free Press is unique in another way: It offered iPads to all of our home delivery subscribers at no additional cost so they could continue to receive a digital replica of the newspaper. We began this in September 2021, at a total investment of $6 million. We fully expected that the elimination of so much production, distribution and newsprint expense would give us a modest return on investment and continue to give subscribers the same amount of news in the same format.
What we did not count on was the continuation of the pandemic. In 2020, many stores throughout the United States closed and slashed their advertising nationwide by 40 to 50% for all newspapers. Most of the advertising has not returned, and, without that advertising, our profit projections evaporated. As a result, the Times Free Press has been operating at a loss each year since the conversion was completed. Despite these losses, we have continued to invest in the newspaper.
We believe the most sustainable model ever created was for a business to provide some profitable returns to its owners. As long as a business is profitable, someone will continue to own and operate it. But if the business continues to be unprofitable, ultimately no one will own and operate it.
A newspaper has two sources of revenue, advertising and subscriptions. Now that advertising has declined to a much lower level, we have to obtain more revenue from subscriptions. We can do that in two ways: get more subscribers, or get more money per subscription. Our preference would be to get more subscribers, and we are trying to do that with intensified sales and retaining more subscribers.
Readers spend the same amount or more time reading our digital replica on an iPad as they did reading a printed newspaper. But subscribers die, move out of state, and stop subscribing for other valid reasons. The subscribers we lose have to be replaced with new subscribers.
Since we began the digital conversion a few years ago, the consumer's price index is up 21.8%. Adjusted for inflation, our $34 monthly price would need to go to over $41.41 dollars. As a result, we are establishing a new price of $39 per month.
We would be better off having more subscribers than higher prices. To encourage this, we are offering existing subscribers an opportunity to avoid the necessity of a higher rate through our "Spread the News" program. Any subscriber who refers a new customer can retain their $34 subscription rate, as long as the new customer's subscription remains active. It also allows our subscribers who see great value in the Times Free Press to ensure our continued sustainability and future.