Tim Lee writes in the Atlantic about the creeping economy of free. Content providers will increasingly find themselves under pressure from competitors who offer similar information at little or no cost. The challenge is to develop new business models around ancillary services. Chris Anderson of The Long Tail fame is big on this topic right now. Anyone involved in the media business should read his recent article in Wired about how the perceived value of content is moving toward its marginal cost, which is zero. That’s a problem for publishers whose business models are based upon charging for content. In Anderson’s view, content will quickly become free and content providers must find scarce resources to monetize, in the same way that book authors make most of their money from speaking gigs.

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Steve Outing, whose April Editor & Publisher column about canceling his newspaper subscription elicited howls of outrage from readers, comes back with a more constructive prescription for newspaper reinvention.  The gist of it is that newspapers need to deliver higher value services and charge for then, including services delivered entirely online or by e-mail.  People will pay for these products if it saves them time and provides value.

As provocative as Outing’s April column was, this one left us feeling a bit empty.  If you subscribe to the theory that information value is constantly attacked from below, then investing a lot of money in delivering a really cool paid online product seems very risky.  The idea of increasing prices for the print version is more interesting.  Magazine publishers seem to have the flexibility to adjust their cover prices based upon the perceived value of the content and many do quite well at that.  Newspapers, on the other hand, raise prices only reluctantly and always cite factors like increased costs rather than value to the reader.  Why do newspaper publishers debase the value of their products in this way?  Is there a possibility of turning around that thinking and asking customers to instead pay more for a better product?

The Washington Post’s voluntary staff reduction has cost it a lot of fine journalists but perhaps no loss is greater than that of Rob Curley, the Kansas wunderkind whom the Post recruited less than two years ago to lead its Washingtonpost Newsweek Interactive division. Curley and at least five of his staff members are pulling up stakes and moving to Las Vegas to work on unspecified projects at the Las Vegas Sun.

Juan Antonio Giner aptly sums up the tragedy this is for the Post, which has long been one of the more progressive papers in its approach to new media. We can only speculate on Curley’s motives. In an entry on his blog last week, Curley paid homage to all the fine talent at the Post and the support he’s received, but notes, cryptically, “I probably wasn’t the best fit with the organization….In Las Vegas, our team has a chance to help shape an entire organization.” Perhaps they didn’t have the chance to do that in Washington.

The bio on the Washingtonpost Newsweek site sums up Curley’s accomplishments:

• Director of new media and convergence for the Naples Daily News and its sister publications along Florida’s Gulf Coast;
• Management positions in the interactive editorial operations for the Lawrence (Kansas) Journal-World, during which time he gained national prominence as one of the first online editors chosen to lead a news organization’s entire print and broadcast news operations;
• Editor & Publisher named the Lawrence Journal-World as one the 10 newspapers in the United States that does “it right” in 2004. The Naples paper later received similar praise.

Washington’s loss in Las Vegas’ gain.

Time, Inc. Joins User Content Parade

Another publisher – this time a unit of venerable Time, Inc. – tries its hand at a print publication composed entirely of user-generated content. This Old House – renamed Your Old House for this experiment – is the product of “thousands of e-mails, letters, photos and projects since editor Scott Omelianuk’s first call for submissions in his December editor’s letter.” The magazine set up a website to accept content and promoted the initiative in broadcast and online. 8020 Publishing and the Hartford Courant are doing the same thing, perhaps indicating that editors are finally warming to the idea that their readers have something interesting to say. It isn’t easy, though. Editors say the quality of ideas contributed by readers is remarkably good, but the copy needs a lot of work.

Layoff Log

• The nonprofit St. Petersburg Times will try to cut staff through an early retirement incentive but might have to resort to layoffs later this year, according to a publisher’s memo. Attrition has reduced headcount from 1,500 to 1,300, but it still isn’t enough. The newspaper is also freezing wages for a year. (via Romenesko)
• Massachusetts-based SouthCoast Media Group has laid off five full-time and nine part-time employees. Like many news organizations that report on their own staff reductions, SouthCoastToday.com didn’t give any clue as to big this layoff is, other than to note that the move reduces employment by less than 5 percent. Quotes from the publisher demonstrate unrealistic optimism about to the future.

The biggest reason the newspaper industry is going off a cliff these days is that the rules of its business have changed. For the last 200 years, the value of newspapers has been based upon information scarcity. Ordinary citizens couldn’t easily learn about what was going on in the world around them, so they needed newspapers to fill that gap. Information is now cheap and plentiful, a fact that severely undermines the value proposition of many media.

The quicker media executives accept this new reality, the quicker they can put their organizations on the path to a better future. This is what was going through our mind as we read a couple of blog posts this morning.

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Mark Hamilton writes about the futility of challenging Google. He cites a $70 million suit by Belgium’s media agency, Copiepresse, against Google for linking to its content (this is apparently illegal in Belgium and Google had to stop the practice there). Matthew Ingram’s commentary on the affair compares Copiepresse to “someone who is determined to saw through the tree branch that they happen to be sitting on.”

Hamilton also points to last week’s decidedly tongue-in-cheek anti-Google tirade in BusinessWeek and concludes, simply, “The debate is rather pointless, given that Google isn’t going away. Nor, given its heft, is it likely to radically change the way it does business.” Sound advice.

Just as King Canute famously failed to hold back the tide, the anti-Google agitators are engaging in a futile rant against the inevitable. The legality of deep linking was established more than a decade ago, at least in the US, and link culture has become far more embedded since then. The Internet is a public utility and anything that anyone publishes on it is public information. While copyright protection still applies (though less and less successfully), secrecy laws don’t. You post it, it’s public and others can link to it. End of story. If you don’t like that, then don’t post it or figure out a way to make a living in the context of this new reality.

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Jeff Jarvis is gleeful over the Justice Department’s antitrust settlement with the National Association of Realtors that forces realtors to open the Multiple Listing Service to discount competitors. This means that realty databases like Zillow will have the chance to compete on a level playing field.

“The only reason…that Realtors could hold onto their high commission for such little value and work is that they kept information away from the marketplace, making it inefficient,” he writes. He quotes Umair Haque: “Competitive advantage is fundamentally about making markets work less efficiently.”

A dozen commenters pile on Jarvis in defense of the realty industry, but they miss the point of his tirade. The villains are not realtors but an industry that withholds information as a source of competitive advantage. Once low-cost competitors have access to the same information as the people earning 6% commissions, the market becomes more efficient and more competitive. The high-margin brokers can still maintain their premium prices, but they have to come up with a new way to justify the expense.

The Internet levels the information playing field. Trying to legislate who can and can’t see public records is wasteful and ultimately futile. If you’re going to play the game, then be ready for the consequences and be innovative about changing the rules. Some media executives have already figured that out, and they will prosper.

Hoax Dramatizes Media’s Value

Alan Mutter scolds the perpetrators of a recent online hoax about a 13-year-old boy who stole his dad’s credit card and used it to hire hookers to play video games with him. The stunt was apparently an exercise in linkbaiting, with the goal being to drive the story’s Google ranking as high as possible.

While it’s regrettable that the story spread as widely as it did – even landing in some legitimate new sources – it’s also an example of the value that branded media can bring to the Internet. “The steady pollution of the web with phony and malicious info-junk could turn an awesome resource for humanity into little more than useless, time-wasting digital flotsam,” Mutter writes. But we think that irresponsible behavior is a necessary byproduct of openness. The media have an important role in setting the story straight, and examples like these only highlight the value of trusted sources.

Misinformed Views of Media Bias

Writing in American Journalism Review, Paul Farhi makes a persuasive case that the public’s distrust of the media isn’t justified. Among his assertions:

• “Media” is too broad a term. Asking people to evaluate the trustworthiness of media is like asking them to rate the honesty of politicians.
• A lot of visible people make it their business to trash media credibility, regardless of the facts. These people have a strong influence on popular opinion.
• People don’t understand news reporting and so interpret reports they don’t like as evidence of bias.
• Most people don’t consume enough news to make an informed judgment.
• If you look at the facts, the reality is that most media is pretty fair.
• What’s perceived as bias is often just intense focus on an issue that’s important to the public.

Nevertheless, Farhi concludes, people will believe what they want to believe. The trend in media is toward more opinion and less objectivity. That’s unlikely to change. (via Romenesko)

Let’s look at some recent stories about publishers who are reinventing traditional news operations and creating innovative new models. This is inspiring stuff.

The San Francisco Chronicle reports on how startup 8020 Publishing is producing two beautiful magazines consisting almost entirely of reader-contributed content. Everywhere is a travel magazine and JPG is for photo enthusiasts. People vote on the work that others submit and the best stuff goes into print. Photographers get a check for $100 and a year’s subscription. Big money apparently isn’t needed: the contents of the April/May issue of JPG was culled from photos uploaded by 16,278 submitters.

What’s especially remarkable about the model is its efficiency. The two magazines are produced by a staff of just 19 people. Both titles are expected to be profitable within a year and the company is looking to expand into other markets. “Any human interest can become a magazine,” says Halsey Minor, the CNet founder whose VC firm owns 8020.

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The Hartford Courant has set up an online gathering place for citizens and is reverse-publishing in print. iTOWNS invites readers to submit news briefs, events, photos and videos to a website, with guidance from a local staff member. Every Sunday, selected content is published in six regional print editions. All the content comes from the community. “We reached over 3/4 of our ad goal before the first print edition was published. Amazingly we did all of this without a single new hire,” the Courant‘s designer tells Charles Apple.

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The UK’s Press Gazette reports on ambitious plans at Guardian News & Media to overhaul its editorial operations. The company is merging the news staffs of The Guardian, The Observer and Guardian.co.uk in a platform-agnostic structure in which journalists working in specialty “pods” and feed stories to the appropriate department editors for publication in a variety of media. One radical concept: journalists will have the freedom to publish directly to their audiences on timely stories, without the intercession of an editor. Editor-in-chief Alan Rusbridger says, “In the newspaper world, if a bomb goes off in Burma or there’s a flood in the Philippines, suddenly your story is taken down to two paragraphs. In this world the reporter isn’t going to have to hop around on foot to speak to [national news editor] Nick Hopkins – he can just publish it.”

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Writing on Publishing 2.0, Scott Karp praises a New York Times blogger for practicing good link journalism. The online story he cites is one on oil prices in Mike Nizza’s The Lede. Nizza effectively consolidates information from more than a dozen sources into a summary piece and then links to the source material like crazy. “The value for the reader here is enormous…not only do they get Times blogger Mike Nizza’s framing and perspective, they get links to all of this original reporting and analysis on this issue,” Karp writes. The link journalism model is an emerging form of reporting that makes the journalist as much filter as a reporter. As newspapers can get over their not-invented-here syndromes, they’ll come to understand the reader value this provides.

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The Society of Professional Journalists has embraced citizen media. The venerable organization recently launched three regional seminars to teach anyone who’s interested how to report the news. “There are quite a few bloggers, particularly in larger cities, who do work on a par with any journalist,” SPJ President Clint Brewer told Steve Johnson of the Chicago Tribune. Attendance at the $25-a-day sessions was underwhelming, Johnson reports, but the motivations of the attendees were an interesting mix of civic pride, activism and curiosity.

And Then There’s Also Denial, Distrust and Sneakiness

• USA Today publisher Al Neuharth whistles past the graveyard, trumpeting miniscule circulation gains by his paper and The Wall Street Journal as evidence of the health of the industry. “That’s why newspaper-oriented media companies have a bright future,” he says. For another take on the same circ figures, see our post from that day. Gannett closed yesterday at $29.25, nearly 70% off its five-year high. (via Editors Weblog)
• The UK’s Guardian asks ordinary citizens “How much do you trust the following [new organizations] to tell the truth?” and finds that faith in media has fallen sharply. Broadcast journalists from the country’s ITV commercial network have fallen the farthest, from 82% to 51% in five years. Trust in broadsheet papers is down 22% to 43%, and local outlets are trusted by just 18% of the population. Even the BBC is down. (via Editors Weblog)
• Meanwhile, Editor & Publisher reports on the Audit Bureau of Circulation’s decision to reclassify copies given away in exchange for advertising consideration as part of its new “verified” circulation class. The concern is that some publishers are using free or almost-free copies to plug holes in their circulation reports. The big newsweekly magazines are especially fond of this tactic.

And Finally…

Alan Mutter reports on a free-paper war breaking out in the most unlikely place: filthy-rich Palo Alto, CA. The new entrant is the Palo Alto Daily Post, launched by two founders of the Palo Alto Daily News, a freebie that they sold to Media News Group in 2005. Mutter notes that free newspapers tend to target urban commuters, which makes this leafy San Francisco bedroom community a strange place for a showdown of this kind. Palo Alto residents are more likely to be seen reading pecking at their BlackBerries while driving 70 mph than reading a newspaper, he says.

Media General expanded its cost-cutting initiative, announcing plans to lay off 500 employees by July on top of the 250 laid off last year. The reduction amounts to 11% of the company’s 6,900-person workforce, an unusually deep cut even in these troubled times. Media General has been hammered by its exposure to weak Florida and California markets, where real estate advertising has shriveled and the recession is being felt more deeply than in other parts of the country. Most of the job cuts will come in the publishing division. Media General also owns 22 broadcast stations. The company will add 60 jobs in interactive media.

StopBigMedia.com smells a rat. The advocacy blog notes that Media General was one of the biggest beneficiaries of the FCC’s decision to lift its 30-year-old ban on media cross-ownership. The layoffs are thus hitting geographies where readers already have little choice in media, meaning that Media General will simply hack away at quality in the name of profitability, the blogger alleges. It appears, though, that the FCC’s decision will be reversed by Congress.

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The Beaver County Times of Pennsylvania is shutting down its printing operation and consolidating production with the New Castle News. The move was necessitated by th deteriorating condition of the Times’ 44-year-old press, the publisher said. The paper will cut 16 full-time and 80 part-time positions. The News plans to hire six full-timers to handle the additional work.

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Editor & Publisher reports that editorial cartoonists have been especially hard-hit by the newspaper downturn. Two decades ago, the industry employed about 200 cartoonists. Only about 85 are left. Latest casualties: Jake Fuller of the Gainesville Sun and Dave Granlund of the Metro West Daily News.

Miscellany

The Washington Post’s Howard Kurtz pens an unusually frank column on the state of the newspaper industry. Kurtz lists the names of talented colleagues who are leaving the paper and speculates about political maneuvering, but then closes with an honest account of the management mistakes and demographic trends that have led to this predicament. Quoting: “If newspapers wither and die, it will be in part because the next generation blew us off in favor of Xbox and Wii and full-length movies on their iPods. Network news faces the same erosion. Maybe, in the end, we get the media we deserve.”

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Mother Jones has published photos of the empty San Jose Mercury News offices taken by staff designer Michael Martin Gee in April. The whole set is available on Flickr.

The New York Times has added an automated news feed to its technology page called Technology Headlines From Around the Web. Saul Hansell writes with no small amount of pride about how this robo-feed actually includes content that the Times doesn’t control. Thus the Times moves confidently, even arrogantly, into the 21^st century.

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McClatchy’s April revenue fell 14.6%. That’s revenue, not profit. The newspaper chain’s exposure to the weak Florida and California markets has hit it harder than most publishers. Revenue from its California newspapers was off 22.8%. Real estate and recruitment advertising sales were both off more than 35%.

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The Sumter, S.C. Item will stop publishing on Monday. More newspapers are likely to follow this model as business continues to decline. Monday is the least profitable day of the week for most newspapers, while Sunday is the cash cow, of course.

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Strange bedfellows: The Record of Hackensack, N.J., and the Herald News of West Paterson, N.J. will combine their copy desks and photo departments. The consolidation of six separate operations into two is expected to save $800,000 annually and cut staff by 23%. The papers are longtime rivals, but with different audiences. They say this is the least disruptive cost-saving idea they could come up with.

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European thirtysomethings like news sites, says Jupiter Research. Its survey finds that 42% of online Europeans regularly visit online news sites, which is nearly three times the number who hang out in social networks. Keep in mind that Jupiter is the research firm that predicted that 35% of large companies would have blogs by the end of 2006. Two years later, that number is hovering around 12%.

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The Associated Press is refining a new model for reporting breaking news it calls “1-2-3 filing.” Editors Weblog describes the process in an interview with AP Executive Editor Kathleen Carroll. Step one is a 50-character headline. Step two is 130-word summary and step three is something more that she didn’t specify. It sounds a lot like the way the AP has worked for a century. “”It doesn’t sound radical when you say it out loud, but it is if you inject it into your daily news decisions,” Carroll says. We’ll have to take her word for that.

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YouTube has launched a citizen journalism channel called Citizen News. It’ll aggregate videos from self-described video journalists. The vid service has hired a person with the title of News Manager, and she asks the community for ideas and suggestions in this post on the YouTube blog. David Chartier at Ars Technica is skeptical. He notes that credibility has been hard to come by in fledgling citizen efforts like CNN’s iReport. YouTube’s choice of a young person in her 20s to head the effort does raise questions about its commitment. While Olivia no doubt reflects YouTube’s core demographic profile, she doesn’t exactly exude journalism experience. (via Romenesko)

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Here’s a good podcast on the future of news. The topic is “Navigating Media Upheaval” and the panelists are an assortment of long-time journalists who are now navigating change with new companies. Best line is from former Wall Street Journal Publisher Gordon Crovitz. Asked what mainstream news organizations need to do to remain relevant in the new world, he suggests, “The role of the media is to mediate.” He then goes into the possible mediation opportunities between different groups, including advertisers. Bottom line: newspapers’ opportunities are to tap into very specific geographically defined groups, but most aren’t doing a very good job. Other panelists are Neil Chase, VP of author services at Federated Media, Ken Doctor, affiliate analyst at Outsell; and Jeanette Gibson, editor-in-chief of News@Cisco. The session is ably moderated by Sam Whitmore of Sam Whitmore’s Media Survey.

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And finally, more morbid but priceless humor from The Onion.

Last night I had the pleasure of moderating a panel on “The Future of Journalism,” featuring a group of reporters and former reports from the broadcast, print and online media. This panel was perhaps not representative of the media world these days, since all of the members are involved in digital initiatives of some sort at their organizations. But all come from conventional media backgrounds, and I found their optimism to be refreshing.

Panelists included Ted McEnroe, Director of Digital Media at New England Cable Network; Robin Lubbock, Director of New Media at WBUR radio; Howard Sholkin, Director of Communications & Marketing Programs at IDG Communications; and David Wallace, Managing Partner of Gamechange LLC and a professor at Emerson College.

All the panelists noted that newsrooms in their organizations were having some difficulty bridgingt the divide between the specialty journalist, who does one thing well, and the new journalist, who’s expected to work in multiple media with almost equal facility. Some veteran reporters simply haven’t been able to make the change, they noted, and their organizations are tolerating that fact. When journalists can’t make the transition to a new style of reporting, management is ultimately to blame, they said. Retraining is critical right now.

It was clear that the old walls that separated different kinds of media from each other are fallng. Robin Lubbock cited some recent stories by his radio station that demanded a visual component. In the past, the reporters would have had to do the best they could within the limitation of audio, but today they can post images on the website and send interested listeners there. This has added a wonderful new dimension to the craft of audio journalism and has energized the reporters, he said.

IDG’s Sholkin commented that the company has successfully transitioned from a print to a mostly online model in the US and that the new breed of journalist that’s entering the company is more flexible and adaptable than the print-only generation that preceded them. Today’s twentysomething reporters are only too willing to grab a camera or a video recorder if it’ll enhance the story.

The panel was also upbeat on the prospect for citizen contributions to the news reporting process. While acknowledging that mistakes were more likely in the still-undefined community journalism world, they applauded the trend toward involving readers in the newsgathering process. They were unanimous in the opinion that readers’ voices can only improve the quality of the final product.

Backpack Journalism

Several panelist also remarked on the emergence of the “backpack” journalist, who takes an assortment of devices into the field with which to capture a story. Notepads and tape recorders are no longer enough. Reporters must today be facile with any media. They also must be comfortable with communicating in short bursts. An example is the Wichita Eagle‘s current coverage of a grisly murder trial via Twitter.

Editor & Publisher has a detailed special report on these mobile journalists or “mojos.” Using lots of examples, the magazine tells how some editors are dismantling the traditional newsroom and seding reporters out into the field to file from wherever they happen to be. A fully stocked backpack of gadgetry (which can run nearly $15,000) is essential, but when journalists have the tools, they become one-person news machines. “I have had days with five or six stories,” says Brian Howard of the Journal News in White Plains, N.Y.

These journos aren’t all kids, either. Most people quoted in the story are in their 30s and the man identified as the grandfather of mobile journalism is 63. Reading this story, you get the sense that change is happening.Good change.

Murdoch as Antidote

Rupert Murdoch is putting the finishing touches on his takeover of The Wall Street Journal with his the designation of Robert Thomson as managing editor. There wasn’t a word of opposition from the newspaper’s editorial independence committee, whose reason for existence becomes more questionable with every non-decision.

Simon Constable writes on TheStreet.com that Murdoch is injecting a healthy shot of competition into the fat and lazy US newspaper business. He contrasts the frantic competitiveness of the newspaper market in the UK, with its more than a dozen dailies, to the languid complacency of a US market defined by one-paper towns and government-sanctioned monopolies. No matter what you think of Murdoch, Constable says, the man is shaking things up and that can’t possibly be bad for an industry in crisis.

Not everyone agrees. Writing in Canada’s Financial Post, Editor Terence Corcoran rips into the Journal’s creeping left-wing bias, focusing in particular on new columnist Thomas Frank. Far from being a counterbalance to the Journal‘s traditionally conservative editorial views, Frank is just a liberal ideologue spouting the tired old mantra of publications like The Nation, from whence he came, according to Corcoran. And Cameron blames Murdoch, whose left-wing leanings Cameron says are routinely injected into the editorial voice of the newspapers he acquires.

And Finally…

Seattle Times Executive Editor David Boardman gives his readers a forthright account of why his newspaper is laying off when circulation is actually growing. The problem isn’t that the paper is losing relevance, he explains. It’s that the business model doesn’t work any more. “Thanks in part to a Bay Area entrepreneur named Newmark and his free, online ‘craigslist,’ the bottom dropped out. In the past eight years, revenue from classifieds has fallen by two-thirds, and they now account for only 20 percent of total ad income.”

Boardman’s piece is refreshing. It’s direct and free of the “our combined print/online readership is bigger than ever” denial. He says newspapers need to find a new way to make money. So that’s what they’re going to do.

Your obedient editor is on cloud nine this morning, having been on hand in Fenway Park last night to witness a no-hitter by Red Sox lefty Jon Lester. It took 39 years of attendance at hundreds of games in New York, Boston and several other cities in North America, but the thrill was worth the wait. The achievement is particularly notable because 18 months ago Lester was undergoing chemotherapy. His remarkable recovery is a fairy tale of spirit and endurance and this couldn’t happen to a nicer guy.

But on to the future of journalism.

Few journalists are better qualified to speak about that topic than Joshua Micah Marshall, founder of TalkingPointsMemo and recent winner of a prestigious George Polk Award for investigative journalism.

In a speech to a recent conference on the future of the Web, Marshall mourned the atmosphere of fear and denial that pervades mainstream media newsrooms and said journalists must prepare themselves to do their jobs very differently. He’s optimistic, though. Professional journalists have become too dependent on professional insiders who manufacture sound bites and offer convenient but predictable analysis. In contrast, the new journalism involves the community directly in the reporting, bringing journalists into close contact with their readers. TalkingPointsMemo actively invited readers into its award-winning work on the Alberto Gonzalez scandal and continues to solicit reader investigation and input for such tasks as building, “a better virtual list of politicians’ stances than anything tabulated by the traditional media or the White House.”

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Reading the perspective from overseas, it’s becoming clear that the UK is leading the US in understanding, adapting to and delivering upon the promise of a new kind of journalism. While many American newspaper editors wallow in self-pity, British editors are welcoming readers into the fold, rethinking the role of the investigative journalist and envisioning a brighter future. Editors Weblog interviews Emily Bell, editor-in-chief of guardian.co.uk. She sees bloggers as valuable overseers of journalist practice and believes that journalists must engage more actively with their readers. “The closer you are, the more authentic you are, and the more knowledgeable you can be, then the more purchase you have with the community that will come to you, tell you things and point to your work in certain areas. I think if you don’t have that, in the future as a journalist, you probably don’t have much of a future.”Bell believes newspapers will exist for the foreseeable future but may not be around in 15 years. She accepts this matter-of-factly. She’s optimistic about journalism’s future, even though she sees the profession entering an uneasy period where resources that were once available for investigative projects will be cut while a new model of reporting is still taking shape.Unfortunately, the guardian.co.uk still has to wrestle with the same business challenges as all other newspapers. Press Gazette cites recent comments by the Guardian’s head of editorial development that the site would need “’many millions’” more visitors to sustain the level of investment in journalism it currently makes.”

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Sean Dodson of The Guardian looks at community publishing and the risks of newspapers lending their brands to extremist bloggers. He cites the example of The Telegraph‘s MyTelegraph portal, which plays host to many thoughtful blogs, but “is also inhabited by some very unsavoury characters, including a minority of active members of the far right, anti-abortionists, europhobes and members of an anti-feminist ‘men’s movement’. ” Dodson goes on to compare the community-policing model employed by The Telegraph to the gatekeeper role of papers like the Daily Mail, which pre-approves blog entries before posting. In contrast, The Telegraph lets readers flag unsavory material for editors to review manually. It’s clear that all newspapers (at least in the UK) are moving to open up their brands to reader commentary, but there are still no clear standards for policing these new communities (via Editors Weblog).

CEOs Not Suffering as Badly as Shareholders

Alan Mutter looks at CEO pay, which is always a favorite whipping post for disgruntled shareholders. Not surprisingly, a few sinners stand out. Most notable is Robert E. Jelenic, the former CEO of Journal Register Co. (JRC), whose compensation grew 333.2% to $6.3 million despite the company’s near-bankrupt condition this year in the wake of his leadership. Mutter notes that Jelenic’s golden parachute last year amounted to more than half the market value of JRC itself.

Other CEOs who got raises while their companies stumbled include Robert Dercherd of Belo and Mary E. Junck of Lee Enterprises. On the whole, Mutter says, CEO compensation declined 11.7% while shareholders collectively lost more than 35% of their investments in newspaper stocks in 2007.

Business Shorts

• Looking to gain efficiencies from last month’s giant merger of Thomson Corp. and Reuters Group PLC, the newly combined Thomson Reuters will cut 1,500 jobs, or about three percent of its workforce, an unnamed source told the AP. The source estimated that 140 journalist jobs could go. Like any good news company, Thomson has no plans to announce or comment upon the cutbacks, leaving it to speculation and rumor to discern its actions.
• Gannett reported operating revenue down 7.7% in April on a 10.4% drop in advertising revenue . Classified advertising was off 20% compared to last year.
• April revenue at The New York Times Co. slid 2.2%, although circulation revenue was up 3.3%. Classified advertising was cited as the main culprit.
• Minneapolis Star Tribune Editor Nancy Barnes has been told she will have to cut $2.5 million, or about 10%, from the annual newsroom budget, a Newspaper Guild local official told Editor & Publisher. The paper has recently been reported to be on the brink of bankruptcy, an allegation that management disputes.

And finally…

Mark Hamilton alerts us to this gem of a cover image from The Onion.

The devastating earthquake in China this week was the latest in a string of incidents that cast the spotlight on the Twitter microblogging service and its value to news organizations. Jeff Jarvis has called Twitter “an important evolutionary step in the rise of blogging,” but it’s really more than that. Twitter redefines the time value of news and is a critical tool in the development of citizen journalism. Individuals with cell phones can now be the eyes and ears of the world if they happen to be on the spot for a news event. Editors Weblog outlines the value of Twitter’s simplicity and open interface, which encourages people to experiment with new applications.

Writing on Global Voices, Mong Palatino notes that Twitter became a primary source of information about the recent cyclone disaster in Myanmar. We noted earlier a UK paper’s use Twitter to beat the BBC in local election coverage.

News organizations should see Twitter as an opportunity. Which paper will be the first to create a hyperlocal portal around a network of Twitter feeds provided by readers? If the mission of newspapers is to report the news quickly, shouldn’t they be outfitting reporters with Twitter accounts and streaming those feeds on their websites? Why haven’t any U.S. newspapers embraced this valuable tool yet?

CBS’s Daring CNET Play

Is CBS’s purchase of CNET a stroke of genius or a desperate play for relevance in the digital age? It does appear that CBS is serious about the Internet. In addition to laying off 160 employees recently, the network reportedly initiated talks with CNN about outsourcing some of its reporting work. Collectively, this could indicate that CBS is giving up the ghost on TV news and turning it attention to being an important player online. Alan Mutter questions the high price CBS paid for an online network that no one else appeared to want, but sees strategic value to CBS. The company certainly deserves credit for making some bold recent moves to reshuffle its cost structure and focus on the future instead of chasing a dying TV news model into the ground.

Hyperlocal Innovation Emerges Offshore

If the future of newspapers is hyperlocal, as many people think, then organizations outside the U.S. may lead the charge. Editors Weblog reports on lessons from a Finnish newspaper that is evolving an activist model that taps into issues that matter to the community. The editor-in-chief says the secret is to focus on soft stories that strike an emotional chord in readers and to pay attention to community issues that matter, such as the cleanup of a local park.

The Liverpool Daily Post is opening up its newsroom to observation and comment from its readers. People can see how decisions are made and contribute their ideas and comments to the process. What a concept. Newspapers demand transparency from the organizations they cover, yet the decision-making process in most newsrooms is as opaque as smoked glass.

Editor & Publisher reports on experiments in Latin America in which citizens do most or all of the reporting. The concept of citizen involvement is central to the Latin American newsgathering process, says Mark Fitzgerald. Many of the standard rules of journalism are suspended. “Irreverence is valued.”

Bloomberg Expands Editorial Footprint

Can a maker of computer terminals become an online media giant? We may be about to find out. Bloomberg LP has hired the former top editor of Time Inc. and The Wall Street Journal, to the new position of chief content officer. Bloomberg makes most of its money selling data terminals used by stockbrokers and other financial professionals, but there have been rumblings that the company, which was founded by New York City Mayor Michael Bloomberg, wants to burnish its newsgathering capabilities.

Pearlstine has spent the last year and a half in the private equity world, but it sounds like news is in his blood. Bloomberg has been growing its footprint in that area. It now has 2,300 employees , nearly double its 2001 size, and it has been growing its financial news service, television and radio operations. With Michael Bloomberg’s term in office set to end next year, there’s been considerable speculation about what would happen when he returns to business. It looks like we’re about to find out.

And Finally…

• Newspapers may soon face another threat, according to Alan Mutter: the huge ecological burden of print publishing. “A prototypical publisher selling 250,000 newspapers on each of the 365 days of the year adds nearly 28,000 tons of carbon dioxide to the atmosphere,” the Newsosaur says. “That’s roughly equivalent to the CO2 spewed by almost 3,700 Ford Explorers being driven 10,000 miles apiece per year.”
• Journal Register Co., which is on life support pending payment of a $625 million debt this summer, has been offered a $25 million cash infusion from a current investor, who is demanding “a number of concessions” in return. Those concessions weren’t specified.
• Two Washington Post icons are accepting the newspaper’s buyout offer: David Broder and Tony Kornheiser. Broder will continue as a contract columnist. Kornheiser’s future with the Post is less certain.
• McClatchy Co. Chairman, President, and CEO Gary Pruitt said the company is open to selling the 49.5% share of the Seattle Times Co. it acquired as part of the purchase of Knight Ridder Inc. in 2006.

Last week, The New York Times wrote about International Data Group’s (IDG) successful transition from a print to an online model. I was intrgiued to read about IDG Chairman Patrick McGovern’s enthusiasm for the economics of new media. Having gotten to know McGovern a bit during my 15-year career at IDG, I asked him to appear on the weekly MediaBlather podcast that I co-host with David Strom. He immediately agreed.

Our interview was about the business issues of IDG’s transition from a print powerhouse to an online specialty publisher. McGovern’s perspective is be inspiring. While the print industry collectively moans about the pain of transitioning from print to online, IDG has quietly taken its medicine and reinvented itself. Today, the company derives less than half its revenue from print titles, and McGovern expects online business to make up 70% of sales by 2012.

At InfoWorld, which was spotlighted in the Times article, the closure of the print edition and shift to a wholly online model actually increased margins from a small net loss to a 37% net profit. “Not only is there survival after going online, but it’s a much better environment,” McGovern told us.

IDG’s strategy is now to launch all new titles online first, build an audience and then take the business to print if the market demands it. “That way, we already have the audience and we can show the advertisers who’s asking for [the print title] and who’s going to read it,” McGovern said. “It takes away the risk.”

What works in the U.S. doesn’t work the same way globally, of course. Scandinavia and Korea are among the regions of the world that are innovating most successfully in online publishing, McGovern told us. In contrast, India is still a healthy print market but with a budding cell phone culture that may make it the first major economy to jump from paper to mobile devices without an intermediate PC stage.

There are some other gems in this interview. One is about IDG’s flirtation with a public offering through its books division a decade ago. McGovern, who has always taken a dim view of the public markets, relates how the experience distracted the group from its traditional market into ancillary businesses where it had no expertise. “If they had stayed private, I think they’d be a larger and more successful company today,” he commented.

We also talked about IDG’s phenomenal success in China, where it publishes a host of consumer titles in addition to its big technology brands. IDG’s venture capital arm now makes more money for the company from investing in Chinese businesses than the rest of the company does from publishing.

If you want to hear an optimistic perspective on the  future of media from someone who is leading the charge, listen to this podcast (right click and choose “Save As…” to download to your computer). I think you’ll find it to be 25 minutes well spent.

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