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In these desperate times, the Chronicle considers desperate measures.

Wednesday, Nov 26 2008

With the newspaper industry in a tailspin, readers ditching print for the Web in droves, and the country entering its worst recession in recent memory, San Francisco Chronicle execs have a brilliant solution to their financial problems: Charge people more to read their ailing product.

Just this summer, the Chron, which has lost hundreds of millions of dollars since the Hearst Corporation bought it almost a decade ago, raised its newsstand rate from 50 cents to 75 cents. Now the paper's management appears to be seriously looking at jacking up home delivery rates. Michael Cabanatuan, transportation reporter and local president of the Northern California Media Workers Guild, confirmed that Chron executives floated the idea at a staff meeting not too long ago. "They did discuss the fact that, yeah, they probably would be going up, but they didn't say when or how much or anything," he said.

Called for comment, Chronicle publisher Frank Vega — who, according to Cabanatuan, addressed staffers at the meeting — wasn't eager to talk about the possibility of a more expensive paper. "We're not commenting on that," he said. "That's our proprietary business information. Why would I share something like that?"

Increased subscription rates would likely offset, at least in part, the money the paper is pouring into construction of a fancy new press in Fremont, part of a billion-dollar deal between Hearst and Transcontinental Media, a Montreal-based printing outfit. The press is scheduled to start operating next year, and a redesign of the Chron is said to be in the works. "It wouldn't surprise me if there's a rate increase coming, particularly when we start printing on the new press," Cabanatuan said.

The Chron wouldn't be the first paper to raise delivery rates and newsstand prices to cope with tumbling ad revenues, and Edward Atorino, a newspaper analyst with the Benchmark Co., predicts more daily papers in major media markets will continue doing so — despite past concerns about driving away readers. "They need the revenues desperately to offset the unprecedented collapse in advertising," he said. "I don't want to say last resort, but I'll say it's a last resort."

Will Harper contributed to this story.

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Peter Jamison


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