NEW YORK (AdAge.com) -- Earlier this week The Onion, one of the country's finest purveyors of fake news, became the subject of fake news itself: Rumors flickered across blogs and Twitter that The Onion's weekly print edition was getting shut down.
It wasn't true, as Onion President-CEO Steve Hannah told staff in a memo. "The stuff is speculative, stupid, inaccurate, sourced by people who know next to nothing about our company and can't pick up a telephone to call, irresponsible and more than a little mischievous," he wrote. "Other than that, it's Pulitzer-quality reporting."
But it wasn't all lies, either, as it turned out. The Onion had just closed its San Francisco and Los Angeles print editions, which accounted for 21% of its 530,000 national print circulation and eight jobs out of 186. Ad Age asked Mr. Hannah for the latest. Here's our edited talk about print, web video and making The Onion the Andy Rooney of ESPN.
Ad Age: Even before you shut down the San Francisco and Los Angeles print editions this week, The Onion had reduced its print circulation. What's your strategy been?
Steve Hannah: Our strategy is the same as everybody's. As ad dollars in certain markets began to dwindle, we took the circulation down in some of our cities, cities that were having trouble making money, and not in cities that were not having trouble making money. We took circulation down in San Francisco, we reduced circulation in New York and in Chicago. We may have taken a bit of out of L.A. as well. At our highest, we were around 700,000; we're about 530,000 today. This has been going on through 2008.
We also did what lots of other papers did: If you take a little bit off the top and a little bit off the bottom literally you can actually save a lot of money. I shouldn't say this out loud, but no one ever notices except in editorial.
Ad Age: Why do San Francisco and Los Angeles hate print so much?
Mr. Hannah: I don't think they hate print so much. Our readership was very good there. That's the odd part. If you were to look up our media audit -- which you're probably not going to do -- our readership grew even though we took circulation down. The pass-around factor for The Onion is pretty huge.
The fact is that print, despite what we did this week in those two places, is a really good business for us. It's a very solid, nice chunk of cash. I personally think that there's room for us to grow the print business. Some of my younger colleagues don't agree with me.
Our problem with L.A. and San Francisco was, first of all, L.A. is so fragmented, so spread out. You've got to get people from L.A. to behave like people in other parts of the country -- to get out of their cars and pick it up and go sit down and read it. San Francisco loved The Onion, embraced The Onion. But it's also a crowded town, with its own problems with print, as you know.
I'm absolutely a believer that in places where we have been for a number of years, where The Onion is really a fixture -- in places like Madison or Milwaukee or Chicago or Denver or Boulder or Minneapolis -- that people would rather read the newspaper than read us online.
Ad Age: The Onion's been spending a lot on video since starting the Onion News Network two years ago. How are the results?
Mr. Hannah: It's far exceeded what we thought it would do. It's been around since April of 2007. If you ask anybody in the business who would tell you the truth, they would say that it is the highest-quality made-for-web video in existence today. We won a Peabody.
A great testimony, and actually a really funny moment for us, is how often when people watch ONN and they see a segment that says the first openly gay racehorse is going to run in the Breeders' Cup this weekend, they think it's true.
When we began, we told our advertisers that we could guarantee them 200,000 views per week. We thought that's a pretty good-size number for just starting off a video TV network. We routinely deliver more than 2 million views a week. We also deliver more than a million views per week on YouTube. So it's gotten big. It's bigger than a whole bunch of cable TV networks. On ESPN there's a show called "E:60," which is like "60 Minutes." They just did a licensing deal with us. So the Onion Sports Network? We're the closing segment, like Andy Rooney.
Ad Age: How much of your ad revenue comes from digital now?
Mr. Hannah: Digital is becoming a bigger chunk of our revenue than print. Print is still very strong for us. Digital, it's not much more than half, but it's more than half. We're always in the top-five in iTunes downloads, both in video and the Onion Radio News as well. We're suddenly doing syndication deals with European syndicators. We have people approaching us who want to represent us in Europe. The BBC has carried our video. We have a variety of syndication licensing deals in the works.
Our world is changing. We don't want to be subject to the whims of the advertising economy. So there are the syndication deals that we're working on today. We're looking at the possibility of taking ONN into TV. We've got people who asked, "Would you create web video for us?" We're always going to have newspapers and TheOnion.com. But we're looking for ways to, and I never thought I'd say this, leverage our creative assets.