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Delivery System Disaster:
Circulation Problems of the St. Louis Sun
Submitted by
James E. Mueller
Graduate Student
Department of Journalism
College of Communication
University of Texas at Austin
7917 Wheel Rim Circle
Austin, TX 78749
512-301-3129
Submitted to:
Media Management and Economics Division
Association for Education in Journalism and Mass Communication
Fiona A.E. McQuarrie
550 University Avenue
University of Prince Edward Island
Charlottestown, PEI
Canada, C1A4P3
April 1, 1995
Delivery System Disaster:
Circulation Problems of the St. Louis Sun
Abstract
This paper uses the case study method to examine the role circulation
delivery problems played in the death of the St. Louis Sun, an
innovative metropolitan daily that lasted for seven months in 1989-1990.
The study uses intensive interviews, corporate documents, and media
coverage to analyze the question of the paper's demise. It concludes
that delivery problems were instrumental in the newspaper's failure.
Delivery System Disaster: Circulation Problems of the St. Louis Sun -_
"Nothing, it seems, is simple about circulation except the basic adage:
Circulation increases come one at a time, but circulation drops come
in
droves" (Thorn and Pfeil, 1987, p. xv).
I. Introduction: Why study the Sun ?
So few American cities--about two dozen--have competing daily
newspapers that it is generally assumed within the industry that only
the largest cities can support two or more dailies. The trend toward
one-newspaper cities is so clear that attempts to start new
metropolitan
dailies are as rare as hand-operated presses.
The last profitable launch of a metropolitan daily was that of New
York's Newsday in 1940. The Washington Times was established in 1982,
but industry experts count it as an exception to the trend because
of
its financial subsidization by the Rev. Sun Myung Moon's Unification
Church. (Rosenstiel, 1989).
A recent failure that drew national attention was the St. Louis Sun,
which was founded by Ralph M. Ingersoll II in 1989. It lasted seven
months, but its brief life is worth studying for the lessons it could
provide media managers on starting and operating a news business.
Some
media industry experts thought Ingersoll might succeed in 1989 for
several reasons, one of the most important being his proven track record
as a newspaper manager. His newspaper empire in 1989 consisted of
more
than 150 newspapers in the United States and Europe, including a
chain
of about 40 free-distribution weeklies in the St. Louis area
(Sharkey,
1989). Ingersoll was described as "an intellectual" and "no
self-deluding newcomer but a crafty revamper of smaller papers" (Henry,
1989, p. 60). Fortune selected him as one of the 25 most fascinating
business people of the year in 1989.
Ingersoll's chain of St. Louis suburban weeklies gave him an
established advertising base in his target market, which was served by a
daily that was vulnerable in several ways. The Post-Dispatch was a
liberal newspaper in a conservative city and had made its reputation on
national and international news rather than on local news. The Post
was
also not as successful financially as one might expect in a monopoly
market. The Post received only 35 percent of all local advertising in
its market compared to 53 percent for newspapers nationwide (Heins,
1989).
But if there was an opportunity for establishing a new daily in St.
Louis in 1989, what happened to the Sun? When the Sun went out of
business in the spring of 1990, several theories emerged to explain its
demise. The Sun's death was blamed on its content (Klotzer, 1990a),
its
rejection by the St. Louis market, and its lack of financing when
Ingersoll's junk bond empire collapsed (Eubanks, 1990). Ingersoll
himself said it was "absolutely clear" that there was no need for ano
ther daily in the St. Louis market, which he maintained was "inundated
by information" (Coleridge, 1993, pp. 124-125).
All of these factors doubtless played a role in the failure of the Sun.
The collapse of any enterprise involving hundreds of people and
millions
of dollars can rarely be tied to one simple cause. However, one
factor
that may have doomed the paper before it started publishing was its
poorly planned and executed circulation strategy. It is the intent of
this paper to use the case study method to explore how circulation
problems rooted in poor planning contributed to the Sun's failure. The
case study method was chosen for this project because it can
indicate
causality and because it allows the researcher to use a variety of
data
sources (Wimmer and Dominick, 1994). Data sources for this study
were
intensive interviews with some of the key people who worked for the
Sun,
company records on file at the St. Louis Public Library, academic
studies, and media coverage of the Sun. The number and variety of
sources used should increase the validity of the study by allowing for
triangulation of data. An interview subject may well have a limited
or
biased perspective, but comparing his or her story with company
documents should enable the researcher to come closer to the truth. The
use of multiple data sources also leads to more "thickly described
cases" so that the case study can be compared to similar situations
(Lindlof, 1995). Such a case study of the Sun should thus provide
useful
information to media managers, particularly to the extent of showing
what mistakes to avoid in planning a new enterprise. From a
theoretical
perspective, this case study should add to the existing work on
media
management theory as it applies to planning and operating a
circulation
system. It should also shed light on the question of whether the
trend
toward one-newspaper cities is irreversible. For if the Sun's demise
was
caused by poor planning and not by the failure of the product itself
or
by competing in a saturated market, then the Sun cannot be held as
an
example of the death of daily metropolitan newspaper competition in
any
but the largest American cities.
II. Literature review
One of the first theories on the effect of competition on the survival
of newspapers was developed in 1884 by S.N.D. North, whose "law of
newspaper growth" was based upon the economic theory of supply and
demand. North (as cited in McCombs, 1972) posited that the number of
newspapers that can survive in a metropolitan area is limited by the
size and characteristics of the population, and any extra newspapers
will fail despite the quality of their content. McCombs (1972) argued
in
his Principle of Relative Constancy that a strong editorial product
is
not enough to start a new newspaper. "The market must be large
enough to
provide sufficient money to support competing newspapers" (McCombs,
1972, p. 19). Owen (1975, pp. 52-53) asserted that economic factors
have
determined that "head-on competition among newspapers in the same
town
is a disequalibrium situation, one that will eventually be succeeded
by
merger, failure of one paper, or a joint operating agreement,
tantamount
to a merger." Owen noted that economies of scale and geographic
factors
ultimately determine the size and character of newspapers. The
demand by
readers for local news and by advertisers for local audiences means
a
newspaper cannot extend itself beyond a certain area, otherwise it
incurs increasing distribution costs but declining profits because it is
reaching readers who are not local--a group of readers that
advertisers
are not as interested in. Owen pointed out that basically the only
way
newspapers can compete within the same area is under the Umbrella
Model,
in which small dailies and weeklies can compete for different types
of
advertising under the umbrella of a large metropolitan daily, which
gets
advertisements from businesses in its own city and from regional and
national advertisers but cannot serve local advertisers and readers
outside the metropolitan area.
Lacy (1988) asserted that the trailing newspaper in a competitive
situation goes out of business because of a "circulation spiral"
involving advertising and circulation. "As a newspaper acquires a
majority of circulation in a market, it begins to attract a
disproportionate percentage of advertising. This in turn helps to
attract more readers, which also attracts more advertising" (Lacy, 1988,
p. 150).
The importance of planning in the management of a business is
documented in many texts. Brickner and Cope (1988) noted that planning
is necessary to identify potential problems, improve decision
making,
focus on the organization's future, help the organization adapt to
change, and aid in assuring the survival of the organization. Lacy, et
al., (1993, p. 220) listed eight steps in strategic planning:
examine
the business environment and past performance; evaluate available
resources; identify, select, prioritize and operationalize planning
goals; identify alternative approaches for obtaining goals; select from
among the alternative approaches; implement the plan; monitor
implementation; and evaluate the plan's progress and adjust the plan.
Lavine and Wackman (1988, p. 111) stressed that plans should be
developed in "small, manageable steps" and that "what-if" scenarios
should be created to deal with anticipated problems.
Lamb (1987) noted that 90 percent of new business ventures fail, and
that ventures started by large corporations usually only succeed when
they are allowed to develop their own strategies separate from
corporate
management. Lamb (p. 164) asserted that management of a new venture
is
usually a problem because the new venture is often managed " . . .
by
the same people who have risen in the ranks of the parent
corporation,
and who intend to manage in the way they always have been told to
manage. That just does not work; a new venture is a qualitatively
different beast than a big corporation." Lamb suggested that a new
venture be located far enough away from corporate headquarters to
provide its managers autonomy and that top managers realize it will take
three to 10 years for the project to succeed. Block (as cited in
Lamb,
1987) listed 27 potential reasons for the failure of a new venture
including the incorrect use of distribution channels and the failure to
read market reaction correctly.
Lacy (1993, p. 55) used the term "fuzzy market structure" to explain
that newspaper markets are becoming difficult to define and
understand
because of social and technological changes. He argued that
increasing
diversity in the type and number of media outlets and increasing
diversity in characteristics of readers has contributed to the fuzzy
market structure. Lacy concluded (p. 65) that traditional readership
studies will not work and that "research should aim more at
understanding the role of information in the community and for
individuals than just asking what they like and do not like."
The importance of prompt, efficient service in retaining readers is
well-documented in newspaper management texts. A guide on improving
circulation produced by the American Newspaper Publishers Association
[ANPA] and the Newspaper Advertising Bureau [NAB] (1990, p. 43),
lists
reader "satisfaction with home delivery/single copy service" as one
of
"ten vital signs" for measuring the health of a newspaper. The
report
stated that readers must be "serviced with a timely, well-oiled
distribution system" (p. 43). Rankin (1986, p. 11) pointed out in his
text on newspaper management that, "No matter how excellent the
editorial product of the newspaper may be, its advertising revenue will
be nonexistent if the newspaper is not sold and read." One
circulation
executive was quoted by Rankin (p. 18) as saying that:
Service and circulation increase are directly correlated over the long
run as excellent service makes selling much easier. Retention of the
newspaper in the home ultimately depends on the type of service a
subscriber receives. Circulation executives must also thoroughly
understand the relationship between good delivery service and the
image
that good service generates in the eyes of an advertiser.
Willis (1988, p. 94) called circulation, "a key link in the production
chain that leads to fulfillment of the newspaper's overall mission."
Thorn and Pfeil (1987, p. 213), who have written one of the few modern
texts specifically on circulation techniques, asserted that
dependability is "crucial" for a successful distribution system.
Readers whose morning papers frequently are delivered too late to be
read before leaving for work quickly lose the habit of newspaper
reading. Subscribers have a right to expect that they will receive
their
newspapers on time. Nonsubscribers wanting to purchase a
newspaper on a
particular day should find single copies easily accessible. . .
.
Erratic production and transportation schedules destroy carrier
morale
and result in dissatisfied customers (Thorn and Pfeil, 1987, p.
213).
But perhaps the importance of circulation delivery is best summed up by
Fink (1988, p. 199): "Be there when readers are--or else."
Research shows that most U.S. daily subscribers are generally satisfied
with their delivery service. A 1980 Newspaper Readership Project
survey
(as cited in Thorn and Pfeil, 1987) found that only 5 percent of
respondents expressed any dissatisfaction with their newspapers'
delivery. The study found only 22 percent of nonsubscribers blamed poor
service as a reason for not taking the paper. A national study done
10
years later found much the same results: only 5 percent expressed
dissatisfaction and 2 percent either did not respond or said "don't
know" (ANPA and NAB, 1990).
Many articles about the Sun have been published in general
circulation magazines or newspapers, but few academic studies have been
done on the newspaper. Hellinger (1990) conducted a limited content
analysis of the Sun and the Post during the first months of their
competition and found their content to be similar. This study could
indicate that the Sun may have suffered because it did not
differentiate itself from its competition. Hellinger's data was
supported by a more lengthy content analysis done by Mueller (1992). A
comparison of the content of the Post, Sun and Globe found
evidence
that competition increases the diversity of content (Johnson and
Wanta,
1993). But none of the content analyses dealt with circulation in
more
than a tangential manner.
There are also few academic studies on circulation, and most of the
studies focus on things like the effect of price on readership or
promotion techniques. For example, Lacy and Fico (1991) found a strong
relationship between newspaper content quality and circulation.
Lewis
(1995) found significant negative relations between newspaper price
and
circulation in her study on newspaper price increases. Picard (1991)
studied the effect of price increases on circulation and found in his
case study of a mid-sized daily that price increases can help
circulation. Niemeier (1988) developed a framework for market evaluation
that emphasized identifying opportunities for circulation growth. He
suggested evaluating circulation areas based on the business strength
and market attractiveness of the areas; different circulation
strategies
would then be applied to the areas based on the areas' perceived
value
to the newspaper. Gamst (1986) surveyed youth carriers and their
parents
to determine problems the carriers encountered on the job and
possible
reasons they might quit. He found evidence of communication problems
between carriers and circulation managers but noted that the study may
not be generalizable to other newspapers because he only surveyed
carriers for the San Jose Mercury News.
This study on circulation problems at the Sun should add to the current
body of academic research as well as provide some useful information
for
media professionals.
III. Circulation problems of the Sun
Ingersoll's market research on the new newspaper showed that potential
readers were there. In an August 1989 report entitled New Newspaper
in
St. Louis, Kennan Research and Consulting Inc. concluded from focus
groups and one-on-one intensive interviews that: "There is absolutely
no
doubt that the St. Louis Sun has an excellent potential to succeed
in
the St. Louis market." The report stated that the "main negative"
was
the tabloid format, but that the negative connotation could be
reduced
over time as people got used to it. It recommended that an intensive
pro
motion campaign be conducted to establish the paper's image. The
report
closed with what would later turn out to be a prophetic comment: "It
is
crucially important to realize that a short period of time (one to
three
months) after the introduction will determine the future success of
the
newspaper. The situation dictates a need for 'hitting hard' during
this
period of time" (Kennan Research and Consulting Inc., 1989).
The man in charge of "hitting hard" was Tom Birkenmeier, the Sun's
promotions director and a man who had worked in advertising and public
relations in St. Louis since 1967. Birkenmeier wrote in a memo to
Ingersoll that focus groups showed readers thought the Sun was "lively
and exciting," but were only lukewarm about the St. Louis
Post-Dispatch
(T.J. Birkenmeier, personal communication, August 5, 1989). "The
Post
has failed to make a positive emotional connection with many readers,
and they've had 111 years to do it. It is almost as if they are
damned
with faint praise" (T.J. Birkenmeier, personal communication,
August, 5,
1989).
Sun staffers, encouraged by the research and the knowledge they were
part of a great challenge, solicited subscribers and advertisers.
Birkenmeier recalled in an interview with the author that it was the
hardest he had every worked in his life, yet at the same time was very
exciting. Birkenmeier's job was to solicit as many subscribers as
possible. He used direct mail, television advertisements and "every
known arsenal/weapon/marketing tool" in what he described as a highly
successful marketing campaign (T.J. Birkenmeier, personal
communication,
March 14, 1995).
One of the marketing weapons was Ingersoll himself. The publisher, who
had announced earlier that year that he would move to St. Louis to
personally run the new newspaper, joined various civic groups. Ingersoll
had made himself and the Sun logo ubiquitous in St. Louis--Ingersoll
through appearances on the civic-lunch circuit, and the Sun logo
through
a $2.5 million promotion campaign including things like a ski-cap
giveaway at a St. Louis Cardinal baseball game (Reilly, 1989).
Birkenmeier said that the promotional campaign worked so well that
between 111,000 and 114,000 people had requested trial subscriptions
by
the launch date, which was Sept. 25, 1989 (T.J. Birkenmeier,
personal
communication, March 14, 1995). Ingersoll had said he could turn a
profit on fewer than 100,000 circulation (Stroud and Smith, 1989). But
poor service by the circulation department angered many of the new
subscribers.
One of the first mistakes was made in the way the new subscribers were
signed up. Sun executives decided to try pay-in-advance billing,
which
according to Birkenmeier, "does wonders for your cash flow" but was
something new to the St. Louis daily market, where most subscribers
were used to paying for their newspapers after they were delivered
(T.J.
Birkenmeier, personal communication, March 14, 1995). He said the
error
was made worse by the design of the bill itself, which was so
confusing
that many subscribers did not know how to fill it out.
It was simply the most confusing thing known to man. The marketing
guys were never consulted. Here you get the market all pumped up, you
get people to send in their orders, their trial subscriptions.
They're
pumped; they're ready to go. They get a bill--before the
newspaper
comes. That in and of itself is not a mortal sin. But when you
compound
that with the fact that the paper, which is a daily paper, a
morning
paper, which should be delivered before 7 a.m., doesn't get
delivered
until 10 and 11 o'clock in the morning, what happens? You have
meltdown
(T.J. Birkenmeier, personal communication, March 14, 1995).
The poor delivery service occurred mainly because of a problem with the
Sun printing presses. The company planned to print the newspapers
on
twin presses in a renovated printing plant in the southern part of
the
metropolitan area. But during a trial run about three weeks before
the
launch date, it was discovered that the two presses in the plant
were
not twins; half the papers would thus have to be printed at a
Suburban
Journals' plant in the northern part of the metropolitan area (T.J.
Birkenmeier, personal communication, March 14, 1995). "How did this
happen? Nobody knows," Birkenmeier said. The resulting confusion over
the carrier routes meant many papers would be delivered late simply
because the carriers did not know their routes well.
Bear in mind this is all happening with that launch date clicking off
every hour. Half your carriers now have to go north instead of south
and
these guys--right up through this period we are signing people
[subscribers] up furiously--we're writing as many orders as we can. So
on the day of the launch carriers are coming out with new
subscriptions
that they just got that day; they've haven't run those routes;
they
don't know where those people are. The only way I can describe it
is it
was like watching a thoroughbred racehorse fall down inside the
chute
when the gates open. The Sun never recovered from that problem
(T.J.
Birkenmeier, personal communication, March 14, 1995).
Many subscribers got their papers late or not at all. Others could not
find them in the vending machines or stores around town. The paper
had
to install three extra phone lines into its offices to handle about
11,000 phone calls from people who had not gotten their newspapers
(T.J.
Birkenmeier, personal communication, March 14, 1995). Customers who
were
excited by the publicity campaign became angry at not getting their
papers and became angrier when they couldn't get a prompt response to
their phone calls.
It's a huge, gigantic mess. And what's going on is the customers are
getting more and more angry. So then what sets in are cancellations.
'Cancel my subscription! No, don't even call me and talk to me
about it
because you couldn't get it right!' So you went from orders,
orders,
orders . . . It was like watching a car go off a cliff (T.J.
Birkenmeier, personal communication, March 14, 1995).
By industry standards, the delivery problems were horrendous. Comparing
national statistics to a Sun market study done a few months after
its
September launch date suggests the importance of the paper's
delivery
problems. Recall that the national study mentioned earlier showed
only 5
percent of respondents expressed dissatisfaction with their delivery
se
rvice (ANPA and NAB, 1990). Ingersoll's readership survey revealed
that
15 percent of single-copy buyers said they had trouble finding
copies of
the Sun (Clark, Martire and Bartolomeo Inc., 1990). And 67 percent
of
former Sun subscribers said a delivery problem was the main reason
they
canceled their subscriptions. One out of two of those who canceled
and
said they had called the paper to complain also said their
complaints
were not handled well by Sun employees.
Yet another way of looking at the Sun's problems is counting the
number of complaints per 1,000 papers that were home-delivered
subscriptions. A ratio of one complaint per 1,000 is considered low by
industry standards (ANPA and NAB, 1990). Certainly not all of the
11,000
calls a day the Sun was receiving were complaints. But even if one
is
charitable and assumes only half were complaints, at 5,500
complaints
per 55,000 home subscribers [the number of subscribers reported by
Goodman, 1989,] the day the paper was launched yields 10 complaints per
1,000. Put another way, a conservatively estimated complaint ratio
for
the Sun is 10 times what is considered a good figure by industry
standards.
The problems were also evident in the newsroom. Kevin Horrigan, the
Sun's star columnist told the author in an interview that he did not
think the paper's top executives ever "had a handle on the business
side" of the Sun. Horrigan called the circulation department "a
disaster" and said it could not deliver the paper to homes or to retail
outlets around the city (K. Horrigan, personal communication, March
16,
1995).
Sun marketing officials, especially Birkenmeier, wanted to conduct a
public relations campaign to explain what had happened to the
readers.
Birkenmeier wanted to tell St. Louisans that the paper had more
subscriptions than it could handle but that it would correct the
problem. But he said the idea was rejected by Sun executives (T.J.
Birkenmeier, personal communication, March 14, 1995).
(The rejection of the public relations campaign) was a major mistake.
We should have worried about it. It was a classic case of not
worrying
about the customer. If there was anything we should have done,
we should
have bent over backward to make those people happy (T.J.
Birkenmeier,
personal communication, March 14, 1995).
Sun Publisher Thomas Tallarico said in an interview with the author
that a public relations campaign would not have done any good. "We
didn't want to acknowledge that we had a problem at that point. We were
hopeful we would solve it in short order" (T. Tallarico, personal
communication, March 15, 1995). Tallarico, however, did say that the
plan for establishing the Sun was too complex and tried to cover too
many facets of the newspaper business. If he were to do it over
again,
he would not try to deliver papers to the entire metropolitan area
and
might let the carriers handle billing. "We were too ambitious in our
undertaking. We didn't have the resources for what we were trying to
do.
I would have started out with a less grandiose scheme" (T.
Tallarico,
personal communication, March 15, 1995).
One major problem with the plan was that it relied heavily on
single-copy sales in a city in which most subscribers wanted home
delivery. Ingersoll said that since the Post sold about 120,000 single
copies a day, it was reasonable that the Sun could sell 75,000
single
copies, especially with a colorful tabloid format and more
single-copy
outlets than the Post had (Klotzer, 1990b). But single-copy sales
were
less than half what had been expected and were extremely
inconsistent
from day to day (Klotzer, 1990b).
Ingersoll said the decision to close the paper was based on its failure
to increase single-copy sales despite good weather, the start of the
baseball season and promotions such as bingo games (Gauen and Mannies,
1990). However, both Birkenmeier and Horrigan contended the emphasis
on
single-copy sales was a flawed concept from the beginning, and that
Sun
executives had research that showed St. Louisans wanted their
newspaper
home-delivered.
They had all these numbers and all this research . . . that said St.
Louisans are home-based and interested in family, and I think they
were
right. But what they failed to recognize was that in this town
people
wanted a newspaper delivered to their homes because that's where
they
live their lives. (K. Horrigan, personal communication, March
16, 1995).
Birkenmeier told the author that it was "absolute, utter stupidity" to
emphasize single-copy sales.
All research in the market showed that St. Louis is a home-delivery
market. And there is a very simple reason: We are not a commuter
market.
We didn't have MetroLink [St. Louis' new light rail system].
Where
tabloids do very well is where you have commuter markets, I mean
you
have lots of densely packed people and single copy is a very big
issue.
St. Louis is a home-delivery market. Putting boxes on every
corner was a
huge expense and a huge delivery problem (T.J. Birkenmeier,
personal
communication, March 14, 1995).
He concluded that it took resources that might have been devoted to
solving the home-delivery problem.
Ingersoll maintained the single-copy emphasis was a reasonable decision
in 1989 because there were non-commuter markets like Trenton, New
Jersey, where single-copy sales were strong (Klotzer, 1990b).
Single-copy sales had settled at about 17,000 a day when Ingersoll
closed the Sun on April 25, 1990 (Coleridge, 1993).
IV. Discussion
It is clear from the evidence presented that circulation problems
caused by poor planning and inadequate resources played a key role in
the failure of the Sun. The only question that remains is how big a
factor circulation problems were compared to other issues such as
quality of content and lack of financing. Two of the three people
interviewed for this paper concluded that the circulation problems were
fatal. As was mentioned earlier, Birkenmeier contended the Sun
never
recovered from the mixed up orders when it first began publishing.
Horrigan said he agreed "100 percent" with Birkenmeier. "There's no
doubt about it. You get people excited about your product and then you
can't get your product to them--they're going to give up on you in a
hurry. That was certainly something that wasn't thought through" (K.
Horrigan, personal communication, March 16, 1995).
The Sun research on consumer satisfaction when compared to industry
standards also indicated a problem of major dimensions. Ingersoll
himself admitted there was "considerable chaos" in the home delivery
system (Klotzer, 1990b). A knowledgeable observer, former St. Louis
Globe-Democrat publisher G. Duncan Bauman, said the Sun had "the most
inept circulation department in America" (Kramer, 1990). Even a
casual
reader blamed delivery problems for the Sun's demise. Robert Ritter
wrote in a letter to the editor of the Post that he enjoyed both it and
the Sun but could rarely find the latter in machines or stores. He
added
that his mother was an early subscriber but had to call twice and
then
wait two weeks to get her subscription in order. "These may seem
like
two small incidents, but if you multiply them by the thousands of
city
and county residents, it could have made a difference" (Ritter,
1990).
However, Tallarico asserted that the circulation was not a fatal error
and that the main reason the Sun failed was that the St. Louis
market
rejected it.
We got so much excitement and demand that we couldn't cope with it.
But one thing you'll never know is how many of those who subscribed
did
so out of pure curiosity and how many became frustrated because
they
tried to subscribe and couldn't because of poor service (T.
Tallarico,
personal communication, March 15, 1995).
Tallarico is correct in that it is impossible to tell whether the Sun
would have succeeded had its circulation distribution system worked
better. But better planning by management would have allowed the paper
to succeed or fail based more on the quality of the product rather
than
on the quality of service.
This study demonstrates that Sun executives violated several basic
planning principles. First, they ignored market research that
indicated
that an emphasis on single-copy sales would not work in St. Louis.
Although this approach has worked in other cities, Sun executives should
have realized that each market has individual characteristics. Their
emphasis on single-copy sales used resources for serving retail
outlets
that could better have been applied to serving home delivery
subscribers. Thus Sun executives failed to adequately use their limited
resources because they did not understand their market.
Sun executives also failed to plan for emergencies such as the
printing press mix-up. They should have developed some worst-case
scenarios. The fact that the problem with the printing presses was only
discovered a few weeks before the opening indicates that someone was
not
doing his or her job. Birkenmeier said no one knew who was
responsible,
but someone should have been responsible for making sure the
printing
plant was renovated correctly. Such a crucial flaw should have been
discovered earlier.
Tallarico admitted the Sun's plan was too complicated. Management
theory suggests that business plans, especially for new ventures, should
be kept simple. The Sun executives chose to serve an area that was
too
large for their system to handle, and they tried to do too many
things,
such as doing the billing rather than letting the carriers do it.
Ingersoll also made a mistake by moving to St. Louis and supervising
the Sun too closely. Lamb (1987) pointed out that new business
ventures
have a better chance of success when their managers are given
autonomy
from the corporate headquarters. Horrigan noted that Ingersoll was
frequently distracted from the Sun by corporate problems (K. Horrigan,
personal communication, March 16, 1995). Lastly, Ingersoll closed
the
Sun too soon, although he probably had no choice because of the
collapse
of the junk bond market. Lamb (1987) noted new ventures take three
to 10
years to succeed, and the Sun only had seven months. Ingersoll was
incorrect in his assessment that the St. Louis market rejected the Sun
because he never gave the city enough time to judge the paper.
The Sun may have died even had circulation worked perfectly, but the
poor service doomed it to failure before other factors such as
content
and advertising sales could even be evaluated. Indeed, Horrigan said
the
Sun probably would have been killed by the recession of the early
1990s
had it survived its first-year circulation crisis. Yet because the
Sun's
circulation problems were so serious, the newspaper cannot be
dismissed
as simply more proof that American cities can support only one daily
newspaper. The question of whether St. Louis and other American cities
of comparable size can support two daily newspapers has not been
decisively answered by the failure of the Sun.
The Sun's demise does, however, show that a poorly planned business
venture will fail and fail quickly. Corporate entrepreneurs who want
to
create a new daily must study their target market thoroughly, plan
for
all contingencies, give local management the freedom to develop a
unique
product and then have the patience and resources to support it
during a
growth period spanning years rather than months.
More research on the Sun is needed to determine what role other
factors played in the paper's failure. Ingersoll had said he wanted to
use the Sun to reinvent the American newspaper with a "post-modern"
look, and create a "laptop" that would attract the video generation
(Teinowitz, 1989, p. 82). A qualitative analysis of the newspaper would
be helpful in determining the role content played in the collapse of
the
newspaper. An examination of the company's finances would shed light
on
the impact of the collapse of the junk bond market on the Sun.
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