The Strike's Impact
MARKETING & SELLING
The strikes that have halted newspapers in New York and Cleveland for two months have done far more than deprive 6,300,000 readers of their news. They have demonstrated as never before the impact on a city's economic structure that can follow the stemming of a flow of information and advertising that businessmen and their customers usually take for granted. The absence of the newspapers has created an artificial recession that has spread through many areas of economic life, from the big stores to the struggling entrepreneur who usually benefits from his satellite relation to the big advertisers.
Predictably, the hardest-hit are the businesses that depend heavily on newspaper ads to lure their customers. At a time when most of the U.S. is setting new monthly retail records, New York department-store sales were off 8% from last year in the four-week period after Christmas, and Cleveland stores barely managed to hold their own by pouring their advertising into neighborhood papers. Stores desperately seek new means of getting word to potential customers; for $750 a day, Manhattan's S. Klein department stores bought ad posters on subway car windows--and gladly chipped in another $2,640 to have 600 transit workers paste them on.
No Obituaries. The strike has further shaken Broadway's already shaky economics, and has hastened the death of at least two shows that represented an investment of $190,000. Though Tiger, Tiger Burning Bright opened to generally favorable reviews, few New Yorkers could read them--and the show closed after 33 performances. To avoid the same fate. Bert Lahr's comedy. The Beauty Part, has been spending three times the normal advertising budget to conduct contests for free tickets and hire a skywriting plane. Without newspapers, mail orders for Broadway tickets are way down; Beauty Part orders trickle in at only about 70 a day when there should be 300. Cleveland's theaters, after suffering a 20% loss of patrons in December, revived somewhat after a makeshift daily called the Cleveland Record began publishing with a big theater news section.
The absence of newspapers is affecting businessmen who never advertise and never thought they depended on newspapers. Parking garages, restaurants, stationery and record shops all miss the patronage of the suburbanites usually drawn into the city for a day by the ads of the big department stores and theaters. New York florists complain that they are losing trade because a public without obituaries and sailing notices does not know when to send flowers. Hotel rentals of banquet halls to wedding parties have fallen sharply because there are no engagement announcements to alert them to prospects. The lack of job promotion news is making it hard for insurance agents to find prospects. And the scarcity of financial news has cut brokers' commissions by as much as 15% at Merrill Lynch. Pierce, Fenner & Smith, the world's biggest brokerage house. For those who depend almost entirely on advertising, such as apartment operators, the strikes have been even worse; sales of cooperative apartments in New York are off as much as 50%.
Closed & Darkened. The effects of the strike reach far beyond the boundaries of the cities, where closed and darkened newsstands represent the job losses of 22,800 newspaper workers and 1,500 newsstand dealers. The cruise ships that haul sun-seeking tourists to West Indies souvenir shops are having trouble filling their cabins without newspaper advertising. Even airlines feel the pinch, and Northeast Airlines had to cancel its package tours to Florida for lack of customers. In New York itself the strike has also imperiled the jobs of 11,000 workers in the wastepaper industry, who look on the daily newspaper not only as a source of news but as raw material essential to their business.
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