The National Observer, an experiment in national weekly journalism stated by Dow Jones & Co. in 1962, will cease publication with an edition that goes to press tomorrow.
Employees of the 450,000-circulation newspaper got that word directly from Warren H. Phillips, president and chief executive of Dow Jones, at a meeting yesterday morning in the National Observer's offices in suburban White Oak, Md.
"We were all saddened and disappointed," said a veteran Observer staff member, who asked not to be identified. "Shocked would be the wrong figure of speech."
Employees were well aware of the shaky economic condition of the general newspaper, the staff member added. "So I can't really say we were surprised except for the timing."
Officially, Dow Jones - better known for its premier business daily, the 1.5 million circulation Wall Street Journal blamed the demise of the National Observer on direct-mail promotion costs and higher postage rates.
"We do not foresee the prospect of recruiting enough readers or advertisers despite current [advertising] linage gains to offset the rising cost trend and give the Observer hope for economic health in the future," Phillips said in a statement he read to the somber White Oak gathering.
Industry sources said the Observer never had reached a big enough circulation base to make it attractive to advertisers and thereby profitable. Circulation actually declined last year to 441,043 from 483,727 the previous year. Advertising volume Plummeted 22 per cent in 1975, a recession year, and declined another 5.2 per cent last year.
In contrast, ad linage at the Wall Street Journal dipped only 3.6 per cent in 1975 and rose by nearly 12 per cent in 1976.
In a recent interview with The Washington Post, Phillips characterized the Observer as "an artistic success, but it has not been a commercial success yet. . . It has not worked in the economic sense, in that it is not a specialty publication such as Tennis Magazine . . . or Skiing or Yachting or The Wall Street Journal and it has been a tough sell to persuade a sufficient number of advertisers that the Observer audience is one that they should be reaching."
The paper's deficit was reduced gradually over the years from nearly $2 million in 1965 to $300,000 in 1974, when it began rising again.
About 85 full and part-time workers will be affected by yesterday's decision and Dow Jones said it would seek to employ "as many as possible" of the employees in other operations. The company also owns the weekly business publication, Barron's, the 374,000-circulation Ottaway newspaper chain (13 papers): a textbook publisher, Richard D. Irwin; and Dow Jones News Service.
Observer editor Henry Gemmill said that within an hour of yesterday's announcement, "I got calls from major newspaper publishers seeking some of our best people."
Some editorial staff members already had left the weekly in recent months. Sources said the paper was relying more and more on 100 part-time writers as an austerity measuree and had used their work rather than replacing departing staff writers.
The paper's first edition rolled off the presses on Feb. 4, 1962 and many editorial staff member had been with the Observer ever since. "We were attracted by the experimental and exploratory nature of the publication event to the last - knowing there was a chance it would fail," one staff member said.
Week in and out, the Observer had a consumer news orientation and sought to provide readers with information directly affecting family life and survival in a complex civilization. Yesterday, the newspaper lost its own struggle to stay alive, Thirty. As for the paid subscribers, Dow Jones said they would be compensated for the unexpired portion of their subscriptions.