RUST COMMENTARY: AN UPDATE ON THE NEWSPAPER INDUSTRY

I've arrived back in Cape today after being at the Newspaper Association of America annual convention for the past four days in Chicago.

If the advance schedule holds, I will have heard speeches by Erskine Bowles, White House chief of staff; Bill Gates, president of MicroSoft; Bill Cosby, speaking on minorities in the media; Kenneth Starr, independent counsel; and other national figures from the media business or political arenas.

I'll be reporting on their remarks in my column next week. The following is a little update on the newspaper industry, which is in a major growth mode."Newspaper advertising continues to be a bright spot for the industry. Total advertising revenue in 1996 grew to $38 billion, up 5.8 percent over 1995. Classified advertising was up 9.9 percent to $15.1 billion; retail grew 1.6 percent to $18.4 billion; national rose 10.1 percent to $4.7 billion. The strong economy helped boost newspaper classifieds, with strong growth in all categories, especially recruitment that grew 17.4 percent for the year."Newspapers continue to reach the majority of American adults every day, particulary on Sundays. On an average weekday 78.2 million adults read a newspaper. Over five weekdays that number grows to 101.8 million adults. An average Sunday pulls 91 million adults. Over four Sundays the number jumps to 106.9 million."Newspapers are read regularly by all age groups: Daily Sunday

18-24 years 45% 57%25-34 years 47% 62%35-44 years 59% 70%45-54 years 65% 73%55-64 years 70% 75%65+ years 71% 75%"Newspaper readers are the consumers advertisers want to reach because they are typically affluent, well-educated professionals. Of those Americans earning $50,000 or more, 69 percent read a daily and 78 percent read the Sunday edition. These percentages increase with higher earnings. 71 percent of college graducats read the daily paper and 80 percent read on Sunday. Of all adults categorized as having "professional/managerial" job responsibilities, 76 percent read a daily and 77 percent read a Sunday edition."Circulation does not tell the entire story. Over 36 million newspapers are sold daily, with an average of 2.16 readers per copy."Newspapers have not been left behind by the rush to get online. In fact, the industry leads other media with over 500 daily newspapers having established Web sites, up from 175 at the end of 1995. Preliminary results of an NAA survey of newspapers with online sites revealed that 36 percent turned a profit in 1996, or will be profitable by the end of 1997." (Note: you can reach us at semissourian.com) -- NAA

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Keeping Our Eyes OpenOne of the many dangers of the breakneck rush of Western businesses into an unreformed China was revealed with reports that a Chinese government-owned business has diverted a major American machine tool process to military use. U.S. satellite photos reveal that Catic, a Chinese state-owned enterprise, illegally took the McDonnell Douglas equipment, used in fabrication of our B-1 bomber, and relocated it for use at a missile factory 800 miles from Beijing at a facility apparently designed specifically to house it. Catic's agreement with the U.S. supplier called for the machinery to be used to produce civilian airliners for China's domestic market.

How quickly we've forgotten some of the most basic Reagan principles of the 1980's -- "peace through strength" and "trust, but verify" among them. We must have contact with China, and trade can be beneficial, but we fall into the error of moral equivalence every time we assume that China's objectives in commercial dealings are as transparent as ours. Now there is talk of penalizing Catic for breaking the law. But this is a fiction: this is not a business engaged in a contract violation, but a communist nation pursuing its strategic interests. The policy we are following toward Beijing today is essentially the same one we followed toward Iraq before the Gulf War. The irony is that we are calling this wink-and-nod policy realpolitik: there is nothing realistic about it.

Dole Weighs InIt's no secret that conservatives were deeply disappointed with the Dole-Kemp campaign of 1996. Persistent pleas to the candidates to vigorously raise conservative issues and themes went unheardor were answered with such lack of enthusiasm that the effect was almost as bad as silence. Last year the explanation was that many conservative ideas are politically problematic, if not outright losers. But another explanation may be surfacing as regards Bob Dole. Out from under the constraints of a presidential race, Dole first emerged as a partner in a Washington establishment law firm well sprinkled with leading Democrats. Now he has landed feet first in the midst of the contentious Senate debate over the chemical weapons convention, taking sides against the majority of Senate Republicans and former defense secretaries Weinberger and Schlesinger. Dole has every right to weigh in on major defense issues, but appearing at the White House alongside Bill Clinton to endorse the CWC was an unnecessary pinch of salt to the majority he so recently led.

Reno Headed for a GrillingAttorney General Janet Reno is going to have a tough time of it when she is back on Capitol Hill on April 30th (today) for hearings. Even the usually mild-mannered Orrin Hatch, chairman of the Senate Judiciary Committee, is on the warpath over Renos claim she doesnt have enough evidence to appoint a special prosecutor in the fund-raising scandal. In fact, there is growing concern in Washington that the Justice Department under Reno is unraveling. Top positions remain vacant, the FBI is reeling from disclosures of sloppy work at its crime lab, and the immigration service appears to have been used by the White House for political purposes. In short, Janet Reno is in trouble. (Overnight polls show that 57% of the public wants Reno to appoint a special counsel. -- Washington UpdateGary Rust is the president of Rust Communications, which owns the Southeast Missourian and other newspapers.