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The talk around business circles is that The Modesto Bee has made some pretty significant changes:  ad design work is being outsourced to a firm overseas and the printing of the paper has been taken to The Sacramento Bee facility. The Bee has also reduced its workforce by 7 percent, and last week, offered voluntary layoffs to over 200 full-time employees.

So, what’s going on?  Why is The Bee making these significant changes? Is The Bee going out of business?

No, they’re just losing business. And failing local businesses.

According to the Newspaper Association of America, total paid circulation of printed newspapers has been declining significantly year-by-year for the past 14 years . Why has it been decreasing so significantly?  Ask yourself a question: Where do you go to get the latest news?  You’ll probably say you go online or watch it on TV or maybe even check it out in magazines. Here in lies the problem for The Bee.

The Modesto Bee’s bread and butter is advertising, not the subscriptions people pay for delivery of the newspaper. As more people continue to stop reading The Bee, the less value there is in advertising with them.  The Bee has clung to their print model of reporting news like Gary Busey clinging to his career as an actor.  They are both in denial. In fact, so are most other newspapers.

Lately, The Modesto Bee has been trying to put a lot of focus on their website ModBee.com, which is good, but they are still not getting it, and their website is lacking sorely in user experience.  About 8 to 12 months ago they redesigned their website which is, at times, so overblown with advertising that it actually annoys and eventually distracts people completely from reading the news on their site.  People don’t want to come back. I’m not saying they shouldn’t advertise; they should! I’m saying The Modesto Bee’s website should be a community portal for each of the areas it serves with personal voices more integrated into the website, not banished off to a lackluster blog at a subdomain.

Most newspaper companies have seen deep declines in their stock because of their inability to adapt to this shift in media formats and consumer needs.  One of the largest newspaper companies, The McClatchy Company (NYSE:MNI), which also owns The Modesto Bee, has seen a dramatic decrease in stock value, falling more that 95 percent to $3 a share from $75 a share only three years ago.

Many pundits in their industry would have you believe that the economy is to blame for the decrease in readership and stock woes.  While this might be fractionally true, it’s clear that regardless of economic issues, readership has still been declining for the past 14 years.  We haven’t had a 14 year economic issue.

I urge advertisers to reevaluate strategies with newspapers.  Newspapers still charge an arm and a leg for a line of text in their product, and are continuing the gouging trend with their online rates.  There are many other mediums out there with an even better ROI. Did you know that Google can not only place ads for you online, but can also place radio, television AND newspaper ads for discounted rates?

I invite the newspapers to drop the newspaper all together within the next 5 years and focus on their customer needs once again.  Newspapers are becoming less and less effective for reporting news and providing advertisers with customers.  Their companies stocks show that.  I’ll say it again, become a community portal.  A place where everyone can go and find out what’s happening. Newspapers should remember what they’re here for and why they are useful.

(This article is in response to an article written by Margaret Randazzo president and publisher of The Modesto Bee.)