Yet, for all its improvement’s and impact on American journalism, the colorful McPaper is still in the red, largely because many advertisers haven’t warmed to it. Analysts estimate USA Today has lost a staggering $800 million since 1982; the 1991 figure is reportedly about $20 million. Although USA Today publisher Thomas Curley says “We have to do better - and will” in 1992, some industry experts say the paper’s huge production costs and inability to compete for local advertising could doom the paper to, at best, marginal profitability for years. “If you can’t do it in a decade, you’re clearly not going to make money from ads,” contends Robert M. Johnson, the publisher of Newsday. And while the other major journalistic innovation of the 1980s, Ted Turner’s CNN, has won respect, USA Today is still dogged by the perception among many would-be advertisers and the media elite that it remains News Lite, a triumph of marketing over substance.
Back in 1982, USA Today didn’t aspire to much more. Neuharth says his ambition was to create an alternative read for the country’s growing “mobile audience"travelers looking for a news fix, job hoppers who move frequently and lack hometown ties. The paper catered brilliantly to Americans’ short attention spans and benefited from poor local papers. Gannett’s topnotch production and distribution system facilitated USA Today’s penetration into every corner of America. Today, pages are transmitted by satellite to 32 printing plants across the country, and more than 1,000 workers based in 28 field offices truck USA Today to newsstands and 120,000 vending machines.
Though USA Today bled money, its stylistic innovations spread almost immediately. From Boca Raton, Fla., to Akron, Ohio, local papers mimicked its sophisticated graphics, splashy colors, “sky boxes” and punchy news nuggets. Many papers shortened their stories or eliminated “jumps” altogether; about 400 dailies have begun using four-color printing in the last decade. Even The New York Times plans to open a $450 million four-color printing plant. USA Today’s bright graphics have also influenced dozens of papers to retool their layouts: for instance, Times’s Metro section’s front page now incorporates an expanded left-hand column index, a chart of the day and sky-box photographs. Neuharth says he got the last laugh on critics: “We were frowned on by the establishment, called McPaper. Now they’re stealing all our McNuggets.”
So why hasn’t this helped the bottom line? USA Today’s main problem is that it’s a hybrid: it can’t attract classified and local retailers’ ads, the lifeblood of local dailies. Instead, it competes for advertisers’ dollars with news magazines and other national publications. But advertisers pay a magazine like Time roughly one half of what it costs them in USA Today on a cost-per-thousand-readers basis. Moreover, many sponsors don’t think USA Today carries the same impact: “It’s here today, it’s wrapping fish tomorrow,” says Ira Weinblatt of Saatchi & Saatchi Advertising. Also, about 15 percent of the paper’s circulation are “bulk” sales: copies are bought at a discount by hotels and airlines, and given away. USA Today, says Weinblatt, “isn’t seen as a primary read. It’s something you pick up as a supplement, or read on an airplane.” Thus, the paper has subsisted largely on advertising from travel-related businesses like rental-car agencies.
USA Today also doesn’t have a big audience in large urban centers with thriving dailies - the markets most favored by advertisers. When Neuharth rolled out USA Today in New York in 1983, he said a key measure of success would be achieving a circulation of 300,000 in the New York area by 1986. Today, circulation remains flat at around 100,000 - including 25,000 giveaways. The penetration rate in Chicago, Denver, Los Angeles, Boston and Washington, D.C., is also about one half of USA Today’s average of 3 percent of households. Publisher Curley says the paper does best in the Southeast and Midwest - cities such as Orlando - and insists that readership should be prized by advertisers. “We’ve got the young reader, the upscale baby boomer,” he says.
Meanwhile, USA Today’s editorial side keeps getting better. USA Today’s gulf war coverage was a lively mix of graphics, photos and on-scene reports - its correspondent was the last print reporter out of Baghdad. Political correspondent Adam Nagourney has won respect for his breaking stories: last July he raised the ClintonCuomo feud another notch when he quoted Clinton suggesting New York might not be the appropriate place for the Democratic National Convention. “USA Today has begun to realize that packaging isn’t enough-it requires substance to develop a loyal readership, " says Bill Kovach, former editor of The Atlanta Constitution and curator of the Nieman Foundation at Harvard University. But USA Today still has virtually no foreign coverage (Prichard says that’s due to budgetary constraints). And USA Today operates no U.S. bureau outside of New York, San Francisco, Los Angeles and Atlanta - though it does have a network of nonstaff contributors and use of the Gannett News Service.
Is USA Today destined to remain a money loser? Smith Barney analyst John Reidy points to an obvious solution: raising the price from 50 to 75 cents, which would gross an additional $65 million a year. Curley rejects that idea for now, saying circulation could drop sharply. He says The Wall Street Journal’s newsstand sales dipped after it hiked its price to 75 cents-and USA Today is much more dependent on single-copy sales. Curley insists the paper can be profitable by “selling one-half page more advertising a day. " He says that will happen when the recession eases, and he’s planning aggressive strategies - like targeting Japanese companies, which so far have viewed USA Today as unprestigious, and increasing regional-ad sales, which have grown from zero to $15 million in two years. Even if the paper doesn’t break through, virtually nobody expects Gannett to pull the plug on USA Today any time soon. “The paper has made Gannett a company to be reckoned with,” says Lou Heldman, chairman of the American Society of Newspaper Editors’ Future of Newspapers Committee. But at $800 million and counting, the price for respectability remains expensive indeed. ..L1.- ..CN.-A LOYAL-READER GAP?
Some advertisers worry USA Today is strong at newsstands but weak on subsciptions. ..CN.-Paid Circulation:
USA Today* Newsstand 73% Home and mail delivery 27% Average American Daily Paper Newsstand 27% Home and mail delivery 73% ..CN.-THEY’RE STEALING OUR McNUGGETS'
Do the regional news digests and the stand-alone chart look familiar?
The editor, from USA Today, has brought shorter stories and a colorful news index to the front page.
Perhaps USA Today’s greatest legacy: the jumbo weather page, featuring the color weather map.
