Yes, times are tough but circulation's up and we're here to stay

It was a typical Seattle public-school auction: parents milling around tables of donated items, perusing for bargains and sharing gossip on our kids. But as I encountered friends and acquaintances I hadn't seen in a while, their greetings were anything but the usual.

"I'm so sorry." "How hard for you." "You must feel horrible."

At first, I was baffled. Had my car been hit in the parking lot? Had I been outbid for those cookbooks? Had the Mariners extended Richie Sexson's contract?

Quickly, though, it became clear: They had read an article describing the financial challenges of The Seattle Times.

I appreciated their concern. But my response to them — and my message to you — is captured best in a twist on Mark Twain: "The reports of our death are greatly exaggerated."

Yes, these are unprecedented tough times in the newspaper business, and for your favorite local daily. But there is wide and profound misunderstanding of the fundamental problem, especially as it has manifested in the Seattle area.

These days, when readers call me to complain about something — usually, either that we're too liberal or too conservative — they often end with a common affront: "No wonder you're losing circulation!"

Except that ... we're not. Since the year 2000, the circulation of the daily Times is actually up. And in the last two semiannual reports of the Audit Bureau of Circulations, the national association that monitors newspaper sales, we ranked No. 2 and No. 5 in circulation growth among the largest 50 newspapers in America.

Our news Web site, seattletimes.com, is thriving. It has the greatest reach of any local-news Web site in Western Washington. And it is regularly setting records for page views and unique visitors.

In a typical week, two of every three adults in King and Snohomish counties will read our newspaper, our Web site or, increasingly, both.

So why did we just reduce our work force by 125 employees, including 34 from the newsroom?

We don't have a readership problem, but we do have a revenue problem. More specifically, we have a vexing issue that has shaken our business model like the Nisqually quake, cracking its foundation and leaving us looking for new, more durable ways to reconstruct it.

The fundamental issue: the loss of classified advertising in the printed newspaper.

Classifieds — the "want ads" for everything from cars, houses and jobs to pianos, kayaks and golden retrievers — were for the last three decades of the 20th century the mother's milk of daily newspapers. By the year 2000, they accounted for 50 percent of this company's advertising revenue.

Then, thanks in part to a Bay Area entrepreneur named Newmark and his free, online "craigslist," the bottom dropped out. In the past eight years, revenue from classifieds has fallen by two-thirds, and they now account for only 20 percent of total ad income.

In those years, revenue from other types of advertising has risen and fallen, often mirroring economic cycles. This, of course, happens to be a particularly bad part of the cycle, and we and every other metropolitan newspaper in America — including our journalistic competitor and business partner, the Hearst-owned Seattle Post-Intelligencer — are experiencing acute financial pain. Both papers are losing money, as this one has every year since 2000.

So what to do about it? We need to transform the economics of our business, and our whole company is hard at work on that. In the short term, we need to bring our expenses into line with our reduced revenue. And for the longer term, we need to find new ways to make the money needed to pay for the kind of public-service journalism to which we are committed, and which you so clearly value.

Even in today's cacophony of voices — a rich, exhausting and often confounding bazaar of cable TV, satellite radio, blogs, social networks and cellphone text messages — quality newspapers and their Web sites stand out as the most thorough and reliable sources of information. We remain true to a journalism of verification, believing that you deserve and desire facts and evidence more than you do self-serving and often uninformed spin.

Even after our staff reduction, The Times has by far the largest newsgathering force in Washington — about 250 journalists and support people dedicated to this mission, written by the staff in 2005: "We are the most read, most influential and most trusted source of news and information in Washington state, in print and online. We are our region's watchdog, its storyteller and its town square. We make lives and communities better."

Continuing to meet that mission will be a challenge. But it's a challenge to which we will rise.

We don't take your use of The Times for granted, and we know we need to evolve to meet the changing needs of readers and advertisers. We welcome your ideas and your input. Are there things you wish we did in the paper or online that would make us even more valuable to you?

Thanks for your care, your support and your continued loyalty. But sympathy? You can save that — and perhaps some batting tips — for Big Richie.

David Boardman can be reached at 206-464-2205 or dboardman@seattletimes.com