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Warren Buffett Buying Newspapers by the Bushel

Warren Buffett

Warren Buffett
(New York Times photo)

The world’s ultimate value investor – Warren Buffett – has apparently decided that there’s untapped value in newspapers. His Berkshire Hathaway has just purchased 63 of them along with a 3% stake in Lee Enterprises, and Buffett says he plans to buy more. Newspaper lovers should applaud Buffett’s interest. A self-described newspaper “addict,” he believes in an intensely local editorial focus and a sustainable business model. His interest in the newspaper industry could be a boost for paywalls. “The original instinct of newspapers was to offer free in digital form what they were charging for in print. This is an unsustainable model and certain of our papers are already making progress in moving to something that makes more sense,” he wrote in a letter to publishers.

The New York Times traveled to Buffalo to check out The Buffalo News, which Buffett has owned since 1977. It found a profitable operation that has scaled down intelligently over the years through buyouts rather than layoffs. Buffett has little personal involvement in daily operations, but his philosophy of investing in local coverage and skimping on overhead is evident everywhere. Media Audit says The Buffalo News has the second highest audience penetration of any newspaper in the country. Part of this could be because the Rust Belt population of the area is older than the typical demographic, but it’s still remarkable that more than 70% of Buffalo households have read the paper within the last month.

If anyone can figure out how to make a newspaper profitable, it’s Warren Buffett. He built an estimated net worth of $44 billion by buying distressed businesses at the bottom. His interest in this industry would indicate that there are better days ahead.

US Newspaper Ad Revenue Continues Sickening Plunge; Online Growth All But Halted

First-quarter 2012 total expenditures totaled $5.18 billion, down 6.86% from $5.56 billion a year earlier. Online revenues grew by just 1% to $816 million, which was the smallest for any quarter since 2009 and not nearly enough to offset the 8.2% drop in print revenues, to $4.36 billion. The Newspaper Association of America previously revealed that print revenues (in absolute dollars) fell by half between 2005 and 2011. And there is no end in sight.

Oregon Publisher Puts Happy Face on Frequency Cut

“There are a lot of new things to like about today’s Observer,” writes Kari Borgen, publisher of the Observer of Union and Wallowa counties in Oregon. Borgen goes on to celebrate the Observer‘s new design, added features and bonus puzzles, among other goodies. What she fails to dwell upon is the fact that the issue that “seems bigger and feels heavier to you today” is that way because frequency has been cut from five days to three. The Observer eliminated Tuesday and Thursday editions and now publishes only on Monday, Wednesday and Friday. No one has yet gotten around to updating the About page with this information.

Tribune Co. Edges Closer to Bankruptcy Exit

Details of the legal wrangling between stakeholders, negotiations with the FCC and the likelihood of judicial approval of a restructuring plan will leave your eyes crossed, but the bottom line is that the company’s three-year stay in Hotel Chapter 11 may finally be nearing a conclusion. There’s still regulatory and legal wrangling to be resolved, including a petition to transfer Tribune Co.’s broadcast licenses to a group of banks and hedge funds that will own the company. There’s also a challenge from a group of junior bondholders who are challenging the restructuring plan and who might sue 35,000 former Tribune Co. shareholders to recover more than $2 billion in claims.

Whatever happens, the likely outcome is that Tribune Co. will be carved up and sold off piecemeal by the banks and hedge funds that assume ownership. The real value of the company is in its portfolio of 23 TV stations and some other equity investments. The newspaper business is barely a rounding error on the balance sheet. The story in the Tribune notes, “Before the Zell deal, Tribune Co. entertained offers topping $2 billion for the Los Angeles Times alone, but today, according to a recent valuation analysis by Tribune adviser Lazard Freres & Co. the entire publishing group of eight newspapers, including the Times and Tribune, is worth about $623 million.”

By the way, the Chicago Tribune is considering a novel approach to paywalls. Instead of charging for access beyond a certain number of articles per month, the paper would charge for bonus content, as ESPN does. The tactic has worked well for sports addicts, but observers question whether it can succeed in local news. It hasn’t done so anywhere yet.

Blowing Up the Article

The always-provocative Mathew Ingram writes about why we need to reconsider the concept of the article in publishing. This traditional approach to packaging information is rooted in the limitations of printed media where hyperlinking was impossible. Now, however, we have the ability to deliver only what’s new and link to the rest.  Jeff Jarvis has been beating this drum for some time and in a post entitled “News articles as assets and paths,” he suggests that articles will devolve into component parts that can be mixed and matched according to need.  Why reinvent the wheel with hundreds of words of background every time we update a story? Simply provide the new information and link to the rest. Jarvis has even suggested that new kinds of media organizations could emerge that specialize in different kinds of assets, such as news, multimedia or background. An example of the latter is Wikipedia, which is a great source of background information for many timely events. Reddit is building this model with its Ask Me Anything forum, which has become a coveted destination for book authors. Basically, Reddit is becoming a specialist in Q&A assets.

Media Consolidation: The Infographic

Everyone is doing infographics these days, and we’ve never seen a bandwagon we couldn’t hop on. This one was actually created by Frugal Dad last November, but it popped up on Business Insider last week. Some of the information is out of date. For example, GE no longer owns NBC, so the sixth company is now Comcast. And Time Warner got rid of AOL. But the main point still holds: Media consolidation has reached a pinnacle, with only six corporations controlling 90% of media in America. And 250 million bloggers and Twitter users controlling the rest.

Media Consolidation

 

Source: Frugal dad

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Bloomberg News is one of the few news operations that’s flourishing, and Knowledge@Wharton provides a glimpse of the editorial strategy that fuels its remarkable engine. Founded by New York Mayor Michael Bloomberg in 1982, the financially oriented global information network today produces more than 5,000 stories per day from 146 news bureaus in 72 countries. Its TV network reaches 310 million people and it is in the middle of turning around BusinessWeek, which it bought from McGraw-Hill for $1 in 2009.Bloomberg's Matthew Winkler

Underlying the unique Bloomberg style is a 376-page style manual written by editor-in-chief Matthew Winkler (right). The most recent edition is the first that Bloomberg has made public (buy it on Amazon), and Wharton writes that it is a marvel of clarity and consistency. Some people might cringe at the manual’s many hard-and-fast guidelines, but consistency is a virtue when serving a time-pressed audience like equity traders. An excerpt:

Bloomberg stories should fulfill “The Five Fs” — that is, they must be First, Factual, Fastest, Final and take Future events into account. No story is complete if it doesn’t include “Five Easy Pieces” — information about the markets, the economy, government, politics and companies. The ideal lead is four paragraphs long and should always include a theme, a quotation, details and a nut paragraph that explains what is at stake. “Bloomberg News stories have a structure as immutable as the rules that govern sonnets and symphonies,” Winkler writes.

Whether you agree or not with Bloomberg’s style, there are tips in this article that could benefit any writer:

  • Prefer short words to long ones
  • Prefer specific terms to abstract one;
  • Write the headline first;
  • Avoid adverbs that are loaded with assertions, such as “lavishly” compensated or “stunningly” successful.

In many ways Bloomberg is the antithesis of The Wall Street Journal, which has long taken pride in the flourish it brings to its writing, and in particular its clever choice of adverbs. But we suppose both models can co-exist. The point is to have a distinctive style and stick to it.

The Knowledge@Wharton piece also explains Bloomberg’s controversial policy against the use of the word “but.” You’ll have to read to the end of the piece to understand that one, though.

Investors Pledge to Revive Philly Newspapers

There’s good news in Philadelphia, where a group of six investors has agreed to buy the Inquirer, the Philadelphia Daily News and Philly.com from a investment firm that has owned the news operations for the past two years. The investors, led by South Jersey businessmen Lewis Katz and George E. Norcross III, say they’re excited about growing the franchise, are committed to retaining current management and will not interfere in editorial affairs.

The bad news is that the group paid only $55 million for the media properties. That’s a little more than one-tenth the price that Brian P. Tierney paid when he acquired the properties from McClatchy for $515 million in 2006. Outsell analyst Ken Doctor is quoted in the story saying that the 90% valuation decline isn’t unusual. Most newspapers have lost that much value over the past decade.

The investors are talking a good game, at least. Katz, who was an investigative journalist at one point, said they’re investing in the community as well as in the business. “Cynicism or no, we put a lot of our money in this,” he said. “There was [sic] a lot safer places at my age to put money than in a news organization. You know what? This is my way of coming home.”

Rethinking the Paywall

Although fewer than a quarter of the U.S.’s 1,350 newspapers have built paywalls, the number of publishers who are experimenting with metered access is rising. Bulldog Reporter says more than 300 papers have adopted paywalls so far and the industry is hoping that their early success could be the harbinger of a turnaround. Nearly 20,000 people have signed up to pay $1.99 a week for the Minneapolis Star Tribune, the report says, and Gannett plans to expand paywalls from six test markets to all 80 of its small-market newspapers by the end of the year. That move, combined with circulation pricing increases, could add $100 million in annual profit, says the report, citing a company statement.

Writing on GigaOm, Mathew Ingram suggests another approach: Instead of putting up barriers to keep people from reading your content, how about building incentives to attract them instead? Ingram calls it the “velvet rope” strategy: Find creative ways to reward readers for getting involved with your product and they will respond by giving you money for special features and events. “Would you rather have a relationship with an outlet that is always asking you for money, or with one that sees you as a partner and gives you membership benefits that sometimes involve having you pay for things?” Ingram asks. It’s a good point, but Ingram’s post is a bit short on ideas about how to monetize this kumbaya. His argument seems to take it on faith that loyal readers will support a publisher they believe in. Unfortunately, there aren’t many examples of that approach working. Even NPR has to take government money to stay afloat.

Miscellany

News Media Heat MapForbes has posted a heat map showing the most influential news outlets in the country and where they’re influential. The map uses data provided by URL-shortening service bit.ly to overlay geographic data on information about content that is shared most often. Darker states signify places where content is shared more actively and presumably read more often. You can also drill down and see which stories generate the most activity. Not surprisingly, newspaper influence  tends to be localized while broadcast networks have national reach. The map at right shows where Fox News is most popular. Incidentally, if you’ve ever wondered how bit.ly makes money, it’s by selling data just like this.


Last week we reported on the sudden shutdown of the Laurel (Miss.) Leader-Call. Thanks to comments from some alert readers, we’ve learned that Laurel won’t be newspaperless for long. Emmerich Newspapers says it will start a thrice-weekly newspaper to replace the Leader-Call and that the first edition will publish this Sunday. What’s more, Emmerich says it has hired the defunct newspaper’s entire staff and will probably throw in free donuts on Fridays. Emmerich publishes 25 community newspapers, primarily in Mississippi, and is very well-liked in Laurel these days.


We got an e-mail from a startup called Zypages that has an interesting twist on classified advertising. The service creates websites from flyers and product sheets uploaded by advertisers, using a cell phone number as the URL. “Most small contractors and service providers do not have web sites – but they all have mobile phones,” explained CEO Raymond Kasbarian in an e-mail. “Over 50% of the printed classified ads in our weekly newspapers out here list a phone but not a web site. By using the number listed in the classified add, a customer can get valuable information before calling.” Go to the website and click the “Examples” button to see how it works.

10 Newspapers That Do It Right 2012Editor & Publisher asked readers to nominate news organizations that are doing innovative things to diversify their businesses and find new revenue streams, and the list of 10 Newspapers That Do It Right 2012 shows that creative thinking is alive and well at mainstream publishers, although mostly at smaller ones.

The mini-case studies are a grab bag of ideas, ranging from novel circulation promotions to radical new lines of business, but they all have one thing in common: They leverage the newspaper’s unique position as a trusted companion within a geographic area.

Some papers have found ways to innovate within their traditional business, like the Carrollton, GA Times-Georgian, which scrapped its advertising rate card in favor of a time-based package that gives advertisers a variety of positions and sizes. It’s a smart idea that recognizes that advertisers are the least-qualified people to dictate where and when an ad should run.

Others are diversifying outside of the advertising dependence that has been the crack cocaine of the newspaper industry. The Altoona Mirror in Pennsylvania launched an events business that hosts thematic gatherings around things like cooking and outdoor recreation. The new line of business is a natural extension of the newspaper’s traditional role as community gathering spot, but also requires a change of philosophy. “We’re not selling a product called ‘a newspaper’ but manufacturing a product called ‘audience,’” said General manager Ray Eckenrode. That wasn’t so hard, was it?

Several organizations have completely merged their print and online operations, which surprised us because we assumed most newsrooms had done that a long time ago. Still, the reorganizations have cut production times and improved staff morale as journalists have bought into the idea of platform independence. It’s hard to believe that at some newspapers copy is still thrown over the wall between Web and print instead of created from scratch for an online audience.

A couple of entries even highlighted efforts by newspapers to push into the broadcast market. Manitoba’s Winnipeg Free Press, which is one of the largest papers to be recognized, took advantage of cutbacks in election coverage by local TV stations to set up a live webcast at a coffee house and analyze election results throughout the evening. Considering the dismal quality of most local TV news operations after years of cutbacks, this seems like low-hanging fruit.

E&P also lists 11 honorable mentions for a total of 21 stories of innovation. The package is nicely edited and there’s an accompanying photo gallery. It would be nice if there were hyperlinks to some of the featured examples, but we supposed E&P has still got some learning to do.

Money from Content

We recently reported on a little-noticed milestone in the New York Times Co.’s fourth-quarter earnings: Revenue from digital sources surpassed editorial operating costs, making it theoretically possible for the Gray Lady to get out of print entirely without affecting its editorial quality.

Now the Financial Times may be about to turn another corner. Content sales are about to eclipse advertising revenue. CEO John Ridding sprang this news on an FT conference in London earlier this month. The secret is mobility. By reaching paying audiences on phones and tablets around the globe, the FT is able to greatly increase its reach at almost no marginal cost. More important is that it now knows something about those people.

“The real power is in data,” Ridding said. “We’re moving from the dark ages where people would walk into a newsagents and we wouldn’t know them but now we know pretty much everything about them.” Contrast that thinking to a recent Pew report that found that few newspapers are using targeted advertising to reach online readers based upon their interests. But the FT is a business paper, after all.

Of course, the crossover is also influenced by the ongoing precipitous declines in print advertising. US newspaper ad revenues fell 7.3% year-over-year in 2011 to $23.94 billion, according to the Newspaper Association of America. We doubt the FT’s UK and European markets fared much better. Like the success stories spotlighted in Editor & Publisher, the FT is finding ways to escape the burning house before it’s too late. Incidentally, 60% of publishing leaders polled in one informal survey said they expect print publishers to be digital-only by 2020.

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By Paul Gillin | January 5, 2012 - 12:25 pm - Posted in Advertising, Business News, BusinessModel, Classifieds, Local news, OnlineMedia

We’ve posted several positive items about the local Patch operation in our community, a one-person news bureau that has become our favorite – and most timely – source of information about local events. So we feel it’s also important to share the news that AOL’s Patch operation, a constellation of more than 800 hyperlocal news sites, looks like a train wreck.

Tim Armstrong, AOLBusiness Inside says Patch has generated only about $8 million in revenue in 2011 on an investment of more than $160 million. InvestorPlace says revenues were closer to $20 million, but that Patch still lost $150 million on the year. Some investors are calling for the head of Tim Armstrong (right) the former Google executive who took the helm at AOL nearly three years ago. Armstrong conceived of Patch in 2007 and funded the first two years of its operations before assuming the top job at AOL in 2009 and buying Patch outright. Since then he’s embarked upon an aggressive expansion program to place hyperlocal news bureaus in as many US locations as possible. He’s also spent lavishly on the acquisitions of Huffington Post and TechCrunch. At this point, critics are calling the strategy a bust.

The problem with Patch is that the hyperlocal revenue model doesn’t work nearly as well as the hyperlocal news model. According to Business Inside, Patch sells advertising through a network of mostly outsourced telesales representatives. It’s clear that these sales people don’t have their tentacles into the local communities that are the core of Patch’s model. The advertising on our own local outlet is mostly a mix of display ads from big national brands (presumably sold at remainder prices), Google AdSense and a smattering of classifieds. With that kind of revenue base, it’s not surprising Patch is losing a fortune.

As we’ve argued before, the hyperlocal model needs to work from both the content and revenue perspectives. Patch has clearly succeeded in hiring editors who are closely tied in to their communities, but it isn’t doing that on the sales side. This is a tough problem to solve. Small businesses aren’t big advertisers to begin with, and the cost of deploying dedicated sales reps to 800 local communities would be far higher than the centralized telesales model. On the other hand, the centralized model isn’t exactly killing it.

We hope Patch figures it out, because it’s inventing some creative new ways to report the news. We continue to like the business model of Sacramento Press, which positions itself as an integrated marketing partner rather than an advertising outlet. Addiction to advertising revenue is one of the reasons newspapers are in so much trouble in the first place. In its current iteration, Patch appears to be making the same mistakes.

Miscellany

As if reporters don’t like to gripe enough, there’s a new website where they can do it anonymously in public. It’s called Dash30Dash.org, and it was started by a former newspaper reporter who wants “to give reporters, editors and others a chance to post comments about their jobs and their ever-changing profession.” So far, it looks like the commentaries are mostly limited to contributions from the site’s creator, but it’s still early. The writing is lively and pointed, so check it out.


An Australian philanthropist and Internet entrepreneur has pledged more than $15 million to fund a new, nonprofit media venture called The Global Mail. Graeme Wood says he has only one goal in mind: “produce public-interest journalism.”

Wood, whose personal fortune is estimated at $337 million, was apparently taken with the example of ProPublica in the U.S. That nonprofit investigative venture was also started with a large grant from a single donor but has been successfully diversifying its support base and now employs 34 editorial staff members. Wood’s commitment to support The Global Mail for at least five years resulted from a dinner party conversation with former Australian Broadcast Corp. journalist Monica Attard, who is now the site’s editor-in-chief. That’s pretty good sales efficiency in our book.

 

By Paul Gillin | November 25, 2011 - 7:35 pm - Posted in Citizen Journalism, Future of Journalism, Local news, Newspapers, OnlineMedia

News coverage of a fatal single-car crash that occurred early on Thanksgiving Day in our home town of Framingham, MA spotlights the tradeoffs between traditional news reporting and the less constrained world of the real-time Internet. Look at the distinctions between them and tell us what you think.

The first report of the crash came from Framingham Patch, the one-person news bureau that covers the town for AOL’s Patch network. It reported  Thursday morning that a vehicle had struck a utility pole and tree at about 3:30 a.m. and that an occupant may have been killed. The news of the fatality wasn’t confirmed, but was speculation based upon police scanner requests for a medical examiner and accident reconstruction team.

It was nearly a full day before Patch published a more complete account of the accident, republished here unedited and in its entirety. The latest version is here.

Junior Koga Killed in Franklin St. Crash; Wife Pregnant

Framingham accident victim Ricardo JuniorMembers of the Framingham Brazilian community were discussing the death of Junior Koga on WSRO radio in Portuguese, on Twitter and even on Framingham Patch Thanksgiving day.

Friends say Junior Koga is man who crashed into a pole and then slammed into a tree killing himself on Franklin Street, early Thanksgiving morning around 3:10 a.m.

Framingham Police and other authorities have not returned calls or emails about the fatal crash. No official identification of the driver has been released.

At the scene, Thanksgiving morning Framingham Police requested, on the scanner, for the Massachusetts State Police reconstruction team, the Middlesex District Attorney’s office and the medical examiner.

Friends say Koga’s wife is pregnant. Koga, according to friends is a Brazilian national from Santa Catarina, a state in South Brazil. One friend said his wife is due to give birth in a couple of weeks. Koga is employed as a mechanic and lives in Framingham, according to friends. He is in his 30s.

Thiago Prado commented on Framingham Patch Thursday “very very sad news – Junior we gonna miss you.”

Nayara Martins, who tweeted the Framingham Patch video of the accident, also tweeted “Hate to see once again another life cut short so quickly because of driving drunk. When are people going to learn?! <|3 #RIPJunior”

Friends tell Framingham Patch Koga “came back from a night club, was brought to his home and got into his own car to go out again.”

Friends said they suspect alcohol may have been involved.

Police are still investigating, and have not released any information on the fatal crash, including an identification.

The crash happened just after the Mt. Wayte Shopping Center at 384 Franklin St.

At the scene, Framingham Police blocked off the road. The Framingham Fire department placed a sheet over the car lodged into the tree and then added a second sheet to block the scene, while awaiting the State Police reconstruction team, which was coming from another Thanksgiving fatality in Freetown.

A neighbor near the crash, who didn’t wish to be identified, said the driver was partially ejected from the car. “It is a nasty scene,” he said.

Nearly 10 hours after the Framingham Patch report appeared, the local Metrowest Daily News reported its version of the story, again reprinted here in its entirety.

Framingham man dies in car crash

A 31-year-old Framingham man died early Thanksgiving morning after crashing into a telephone pole and then a tree on Franklin Street, police said today.

Ricardo Junior, of 67 Georgetown Drive, was the only person involved in the one-vehicle crash, which happened at about 3:10 a.m. yesterday, police said.

“It looks like he was killed on impact,” Deputy Police Chief Craig Davis said.

Davis said alcohol may have been a factor, as police found several Heineken beer bottles in the vehicle Junior was driving. Some of the bottles were full, and others were broken, he said.

“The initial indication is the cause is excessive speed,” Davis said. “There was an excessive amount of damage to the car.”

Junior crashed in the 300-block of Franklin Street, near Newton Place, Davis said.

We were struck by several contrasts between the coverage by these two outlets and the questions they raise about the conventional rules of sourcing in this tweet-saturated times. The spelling, formatting and grammatical mistakes aside, it’s unlikely that the Patch story would have ever made it past the desk of an editor at a metro daily.  Among the factual holes are:

  • The identity of the victim is unconfirmed and an age and address aren’t supplied.
  • Most of the details about the crash and the victim are sourced to unidentified friends.
  • Details about the reported pregnancy of the victim’s wife are sketchy and unconfirmed.
  • The police would neither confirm nor comment upon any of the facts in the story.
  • Perhaps most importantly, allegations that the driver was drunk are raised by unidentified “friends” but never confirmed.

Junior on Facebook

In fact, the Patch story got an important fact wrong: the victim’s real name was Ricardo Junior, not Junior Koga. Other than that, though, Patch provided more information and better context than the official account published by the local newspaper. And it did so nearly 10 hours earlier.

Among the unique details in the Patch story are a photo, news that the victim’s wife is pregnant (unconfirmed, but likely, given the photo on Junior’s Facebook page), the location of his home town in Brazil and comments by friends who knew him.

On the role of alcohol in the crash, Patch provides context about the incident that the official account lacks. The report that Junior was driven home from a night club by friends would indicate that he was probably seriously intoxicated when he got in his car. It also raises questions about his judgment and responsibility, given that his wife is due to deliver a child shortly. However, that information is sourced to unidentified “friends.”

Community Service or Slipshod Reporting?

So the Patch account is better than that of the local newspaper, but its use of unconfirmed and anonymously sourced information would make it unfit to publish  under the traditional rules of news journalism. But should those rules apply any more?

The Metrowest Daily News’ sole source in its coverage is the local police department, which is standard practice in these cases. Patch had no access to those official channels and so had to piece together its story from unidentified friends, talk radio accounts and Twitter chatter. Anonymous sourcing permitted Patch to beat the local daily by many hours and to add details that would never appear in the police log. In the hours since its account appeared, other people have confirmed the victim’s identity and added a few details via comments.

Anonymous sourcing is dangerous, though. While the events would indicate that Junior was drunk (high-speed, single-vehicle crash in the early morning hours on the eve of a holiday), there was no official confirmation of that fact. Driver impairment is an important issue not only because of the victim’s reputation but also for legal reasons. What if Junior was sober and responding to a friend’s call for help when he hit a police cruiser parked with its lights off? The town could be liable for damages.

Standard journalistic practice is to confirm a story through official channels before publishing, but standard practice assumes archival permanency. Online, our mistakes are quickly corrected. For example, in the time since we began writing this entry, Patch has already corrected the victim’s name. The Patch editors sacrificed absolutely accuracy for speed and  the interests of residents who wanted details as quickly as possible. In the process, it made one major mistake and an inference that could have legal ramifications.

Patch’s sourcing style is increasingly typical of online-only news operations. Is it making the proper tradeoffs or sacrificing accuracy for expediency? Post your comments here.

 

By Paul Gillin | October 4, 2011 - 4:13 am - Posted in Citizen Journalism, Journalism, Local news, NewMedia

The post below was submitted to us by Scott Talkov, Editor-in-Chief of ThingsToDoInlandEmpire.com, a guide to entertainment, events and discounts in southern California. If you want to see an impressive example of what people can do with a free copy of WordPress and free Facebook and Twitter accounts, check out this site. 

The claims and statistics cited in this article are the author’s, and we don’t vouch for their validity. 

The local blog ThingsToDoInlandEmpire.com, focusing on arts, entertainment and events in southern California, recently surpassed well-established print media outlets in Riverside and San Bernardino on several well-known metrics.

The site now averages twice the traffic of the region’s most widely distributed weekly print publication and four times the traffic of the region’s most widely distributed monthly magazine, both of which cover the same arts and entertainment focus, According to third party traffic verification firm Quantcast. Those estimates are mirroredby well-known Internet ratings website Alexa.com.

The website also counts more Facebook likes than the region’s largest weekly or monthly print publications, as well as one of the region’s largest daily publications.

The site began with an idea from Adina Hemley, a non-profit director in the Inland Empire. “My fiance and I would search the Internet for fun events every weekend, and then it occurred to me, ‘I know I’m not the only looking for things to do in the Inland Empire,’” said Hemley.

Scott Talkov, a 30-year-old lawyer in Riverside and self-described techie, started the website with Hemley in early 2011 to aggregate their research on the hottest places to go in the Inland Empire. Since then, traffic has doubled every three months.

By working together with more than 20 authors, the site collects data and perspectives from dozens of cities throughout the inland Southern California region known as the Inland Empire. The region counts over four-million people and witnessed the fastest growth over the past decade among the nation’s top 25 metropolitan areas.

“While the economy and print media may be down, people are still having fun, they’re just turning to new sources to find out what to do,” said Kris Daams, a former newspaper reporter and author on the site.

Talkov says new technologies allow information to collected and distributed instantly at essentially no cost. The website is based on WordPress and communicates with followers through the social media tools Facebook and Twitter, all of which are free.

When asked what drives this site, author Nate Hutchinson insisted “We want to continue to prove people wrong who claim there is nothing to do in the Inland Empire.”

Contact Scott Talkov at scott@thingstodoinlandempire.com.
By Paul Gillin | September 26, 2011 - 2:26 am - Posted in BusinessModel, Local news, Newspapers
M.E. Sprengelmeyer with first issue of the Guadalupe County Communicator

M.E. Sprengelmeyer with the first issue of the Guadalupe County Communicator

It was a man-bites-dog story.

Young newspaper reporters have typically dreamed of working their way up from a small-town weekly to a big-city daily. The title of Washington bureau chief or foreign correspondent was the pinnacle of success.

Michael “M.E.” Sprengelmeyer had those dreams as early as age seven, when he decided he wanted to be a reporter. But something in the back of his mind drew him toward the small-town roots where he and thousands of other young journalists got their start.

Sprengelmeyer got to the summit, becoming a national reporter and foreign correspondent for the Rocky Mountain News. When the Rocky abruptly shut down nearly three years ago, he went searching for his childhood dream: To run a community weekly.

Strange Quest

It seemed a strange quest for a reporter who had been near the top of his profession, but Sprengelmeyer had caught the community itch at a young age. “At 17 I saw a movie called Milagro Beanfield War,” he said. “There was a character who ran a small newspaper and I always wanted to see what a newspaper could be if I ran it.”

Sprengelmeyer’s career had been anything but small town to that point. A graduate of the prestigious Northwestern Univerity journalism program, he had worked at a variety of small- and medium-sized papers before landing at the Rocky in 1999, a month before the Columbine shootings. His career advanced quickly. Within two years he was sent to the paper’s Washington bureau, where he arrived just before the Sept. 11 attacks on the Pentagon. That job morphed into a military beat, overseas assignments and a coveted job as a presidential campaign reporter.

Guadalupe County Communicator front page

But even as he was setting up the Des Moines, Iowa bureau for the Rocky to cover the 2008 presidential race, he kept searching for the opportunity to take over a small-town weekly. When the 149-year-old Rocky suddenly went up for sale in 2009, he was as surprised as anyone. But instead of wringing his hands, he stepped up his small-town search. “I was hunting for newspapers to buy within a week,” of the Rocky’s closure, he says.

When the paper shut down, he hit the road, eventually landing in the beautiful but impoverished community of Santa Rosa, N.M., on the staked plains where the Pecos River crosses historic Route 66.

The local Guadalupe County Communicator served up the usual local fare of local government meetings. The paper had a circulation of less than 2,000, but Sprengelmeyer saw potential. Despite its economic distress, Santa Rosa has a disproportionately large base of businesses on Rte. 66. Sprengelmeyer negotiated the purchase, leaving him with just $1,700 in the bank. He told the story of his quest on the blog of former Rocky publisher John Temple.

Changing the Model

Like many local weeklies, the Communicator served up coverage of local government meetings and photos of winning high-school football teams, but Sprengelmeyer wanted to take it to another level. “I kind of had a chip on my shoulder about the closure of the Rocky and I wanted to send a message about what a newspaper could be,” he says.

His first move was to shut down the paper’s website. “Community newspapers have a captive geography. As long as you can keep everyone within 10 miles reading your piece of paper, you can deliver value for your advertisers,” he says. “The Web gets people from all over the world, but you can’t tell an advertiser they’re going to walk in and buy avocados at his variety store.”

Drew Litton cartoonHe then started investing. He hired a veteran daily photographer on a freelance basis, contracted with local stringers and engaged professional cartoonist Drew Litton. The first issue of the Communicator under Sprengelmeyer’s hand featured a giant photo from the county fair and the first editorial cartoon the paper had ever run. It was a shock to locals, but also a signal that the paper had turned a corner.

You can’t easily find high-resolution images of the Communicator online, but you can get a sense of the layout, story selection and headlines from thumbnails in the paper’s Facebook album. The look-and-feel is big-city all the way, with a clear emphasis on local government, citizen advocacy and people-oriented features. The headlines and story selection are cut from the major metro mold.

Pleasant Surprise

“The reaction has been incredible,” says Sprengelmeyer. While some residents miss the point-and-shoot photos of Little Leaguers on page one, most have responded positively to the tougher coverage of town government, crime and local regulations. The Communicator won seven state journalism awards its first year. Sprengelmeyer’s unusual odyssey has landed profiles in The New York Times, CNN and other national media outlets.

M.E. Sprengelmeyer on:

Hyperlocal journalism

“I hate the word ‘hyperlocal’ when connected to journalism.  Journalism is journalism. The term ‘hyperlocal’ has taken on a connotation that it’s something less when the community is involved. We might try to be very, very local, but it’s professional content.

“There are some things going on in California right now where they’re making their papers less relevant at a local level. They’re taking away the one franchise the newspapers have, which is being a trusted institution. The clock tower says ‘This town is owned by the Oakland Tribune.’ I wouldn’t have combined the Tribune into something bigger. I would have split it into four neighborhood papers.

“I’m not in an ivory tower. I’m in a dirt bunker. They need to look at the little guys and think of what they can learn from us, and we need to learn from them.”

Going Online

“I do not understand why papers on a small scale are doing websites at all, and I don’t understand why a lot of metro papers believe it’s better to compete against the Internet when what they control is their geography. When newspapers were experimenting with their websites you could understand it. But now their click-through rates are going down because people can go directly to a pet store on the Web instead of the local pet store. Why would we want to go from monopoly status to competing with every pet blogger out there?”

The Role of the Local Publisher

“I came here with a mentality of showing the world what we can do with printed journalism. It’s evolved into realizing that this community has one of the highest poverty rates in the country, and the things I could do to shake the politicians into focusing on the right issues and helping the community are more important than that.”

Scrutiny of local officials has ruffled a few feathers, but the newcomer says his outsider status and commitment to fairness has kept the pushback to a minimum. “You smooth out the feathers when you write an accurate, fair story,“ he says. And the Little League photos still run in the Communicator, but no longer on page one.

More importantly, circulation has grown to more than 2,000, or nearly equal to the population of Santa Rosa. Its Facebook page, which was started by a local enthusiast and is now maintained as a joint effort, has been liked more than 1,100 times. Circulation growth has been largest among native Santa Rosans who now live elsewhere. “I’m real proud of that, because we’re a town in economic trouble, where kids grow up, go off to college and settle elsewhere” says Sprengelmeyer. “Now they’re re-connecting with their community.”

Advertising business has grown steadily, if not spectacularly. The publisher’s philosophy is to invest most of the profits back into the property. “When you start cutting expenses to match revenue, you’re on a backwards slide,” he says. A small staff handles advertising sales.

And each week, the new Communicator becomes more embedded in the community. Sprengelmeyer still works seven days a week, but the hourly load has gradually declined. “I’m not banking a lot, but each edition pays for itself and I have enough left to pay my rent and fix my car,” he says.

“I won’t become a millionaire, but that wasn’t the point. The first year was about surviving. The second year was about expanding. The coming year will be fun. This started as a fancy way to spend my life savings in six months, only we’ve gone on for two years. It’s the best thing I’ve done and it’s still left me excited about what we can do next.”


To subscribe to the Communicator, e-mail your info to comsilvercom@plateautel.net and cc: ersthap@hotmail.com. Order a full year’s subscription and send a check for $30 (U.S. delivery only) to The Communicator, P.O. Box 403, Santa Rosa, NM 88435.


Update 10/29/11: The Communicator won 26 awards and “Best of Show” among small weekly newspapers in the 2011 New Mexico Press Association/Associated Press Managing Editors’ awards.

By Paul Gillin | September 16, 2011 - 10:57 am - Posted in BusinessModel, Citizen Journalism, Journalism, Local news, Newspapers

USC journalism professor Judy Muller goes back to her roots in small-town weeklies and writes an op-ed for the Los Angeles Times that concludes that “there are thousands of newspapers that are not just surviving but thriving.” Muller points out some of the unique challenges of publishing in a small community, such as having to unmask wrongdoing by the town councilor who may be your brother-in-law. She also made us laugh with this example of a typical item on the local police blotter: “Man calls to report wife went missing 3 months ago.”

It’s a fun and inspiring read, and would be even better if it were true, but Muller makes an essential journalism error in not providing any factual evidence to support her “thriving” claim. In fact, weekly local newspapers have been taking it in the neck for years. We long ago stopped tracking news of local newsweekly closures because the volume was overwhelming. Back in 2009, Journal Register Co. closed scores of weekly holdings in one fell swoop, and Gannett and others have followed. Weeklies were some of the hardest-hit properties in Media News’ recent consolidation. Reports of other weekly shutdowns hit our Google Reader every couple of weeks. We’re frequently asked how many local weeklies have closed but we know of no one – not even the amazing Erica Smith – who keeps count.

Which isn’t to take anything away from the many dedicated journalists who put up with long hours and low wages to publish the thousands of small-town weeklies that still survive. Local publishing has never been a lucrative business to begin with, and the pressure is only getting worse as low-overhead online operations like Patch – not to mention bloggers and independent Web publishers – nibble away at their local advertising base. We admire the dedication of these publishers and are inspired by stories like that of M.E. Sprengelmeyer, a daily journalist who found fulfillment running a 2,000-circulation weekly in Santa Rosa, N.M. after losing his job in the Rocky Mountain News closure in 2009 (see video). Muller celebrates Sprengelmeyer in her op-ed, but also uses a word we hear a lot when discussing this topic: “exhausted.”

Small-town weekly publishing is a lot of things: rewarding, fulfilling, responsible, important and endangered. There’s one thing that it clearly isn’t, though: thriving.

Boston Globe Splits Web Presence

The Boston Globe has come up with a novel twist on the paywall concept: It’s launching a paid portal that “offers an innovative, inviting reading experience that is the only gateway to all of the Globe’s journalism.” BostonGlobe.com is the new online companion to the 139-year-old daily that provides the full contents of the print edition as well as bonus features. It will be free through the end of this month and $3.99/mo. thereafter. Home delivery subscribers get access for free. The website will be formatted for reading on a variety of desktop and mobile devices, although few details were provided.

Boston.com, the regional site that the Globe launched in partnership with several local media outlets in 1995, will remain free. It will focus on daily sports coverage, online features and lifestyle information, and also include five stories from the daily print edition and summaries of other content that can be read in full on BostonGlobe.com.

In positioning the bifurcated strategy, Globe Editor Martin Baron described Boston.com as a site for the common man with BostonGlobe.com as its more erudite sibling. “BostonGlobe.com is essentially purely journalistic, and Boston.com is more of a town square where you get news and information, but you can also buy tickets to events and exchange information and opinions with your neighbors,’’ he said. Boston.com will continue to be advertising-supported.

The Globe was actually an early innovator in hyperlocal journalism. When Boston.com was launched as a partnership between the Globe and several local print and broadcast outlets, it broke the then-emerging newspaper mold by focusing on regional coverage rather than delivering an electronic version of the print product. However, as partners dropped out of the venture over time, Boston.com increasingly became the online face of the Globe, eventually getting to the point that articles about Israel and Japan routinely led the home page. With the new strategy, the Globe appears to be returning Boston.com to its roots.

Miscellany

If you’re still on the fence about buying a tablet computer (we took the plunge last month and are enjoying the experience), you can get one at a really good price if you also buy a subscription to two Philadelphia newspapers and a website. The Philadelphia Media Network, which publishes the Inquirer, the Daily News and Philly.com, has teamed up with three local sponsors and the French electronics company Archos to sell Archos’ Arnova 10 G2 Android tablets preloaded with gobs of Philadelphia news for $285. The advertised price of the tablets themselves is as low as $99, or about half what they cost on eBay. The catch is that you have to buy a subscription to three news apps as part of the deal. We suppose there are enough Philadelphians, who can never get enough Eagles coverage, to sell out the 5,000 units being offered on Phillytablet.com.

 

By Paul Gillin | September 7, 2011 - 4:10 am - Posted in BusinessModel, Citizen Journalism, Future of Journalism, Local news, Newspapers

Susan Petroni, Framingham PatchWhen Tropical Storm Irene plowed into the New England coastline a week ago, Susan Petroni (right) was ready. Armed with a computer and a cell phone, she set out to mobilize the citizens of the largest town in the U.S. to help her cover the story.

Petroni live-blogged throughout the storm, encouraging her readers at Framingham.Patch.com to be her eyes and ears. Readers snapped cell-phone phones and e-mailed them to Petroni to post on the Patch site. Locals flocked to the Framingham Patch page on Facebook to update each other on power outages and roads blocked by fallen trees. Petroni stayed on the phone with town officials to update her audience on disaster preparedness warnings and clean-up plans. For residents who had lost power, the Framingham Patch Twitter feed kept updates coming to cell phones.

In the days that followed, Susan Petroni’s online outposts became rallying points for citizens trying to find out when power would be restored or whether the opening of the school year would be delayed. Much of this information came not from her but from each other. Facebook was a quicker way to find out where the lights were coming on than the overwhelmed officials at the local utility.

The same scene played out at dozens of Patch sites up and down the east coast, demonstrating the power and agility of a new type of media we might call “curated citizen journalism.” It’s a model that relies upon the news judgment of professionals like Susan Petroni, who is an accomplished and award-winning journalst, and the contributions of concerned citizens who want to be part of the action.

Like many online journalists, Petroni left the daily newspaper grind for Patch in order to gain scheduling flexibility and spend more time with her young daughter. She posts five to seven stories on a typical weekday and a couple on Saturdays and Sundays. Like any good Metro reporter, she covers the important local government meetings and any news that would be likely to make the regional newspaper. However, most of her posts are short and few are earth-shaking.

About the Editor

One other Patch innovation that strikes us as novel and worth emulating: the “about the editor” page. Mainstream media typically sanitizes these profiles to limit them to professional accomplishments, but Susan Petroni’s page is far more personal. It includes disclosure of her religious beliefs, political affiliations and even opinions on some local hot-button issues. “We promise always…to adhere to the principles of good journalism,” the profile states. “However, we also acknowledge that true impartiality is impossible because human beings have beliefs.”

This approach is both endearing and practical. It gives the newsgathering operation a personal face while also heading off the constant bickering that takes place in newspaper comment sections over the political leanings of the editors. You may not like Susan Petroni’s politics, but at least you know what they are. And what’s wrong with that?

A typical Patch story might update residents on how long traffic will be disrupted by a sewer renovation program or tell how school bus routes are being changed. A weekly police log update tells where crime was a problem in the last week. Not Pulitzer Prize-winning stuff, but these are the stories that matter to the daily lives of the people who live nearby.

Curated Citizen Journalism

Patch encourages citizens to contribute to the effort without mixing their contributions with those of the single professional editor and assortment of freelancers who make up the core of the typical Patch site. Bloggers from the community get their own digital sandboxes, and comments are clearly distinguished from reported stories. People are free to post news reports to Facebook or the forums, but news only makes the main news feed after it’s been vetted by a pro.

Patch disclaims reports from the community, but also encourages them like crazy. There has been little problem with error or abuse, says Danielle Horn, Associate Regional Editor for Patch Metrowest Boston. The key is to know when it’s appropriate to turn over the reporting job to the citizens and when a pro needs to step in.

“If someone says the power is out on their street, then the power is probably out,” Horn says. “We haven’t run into any situations where people have posted news that is clearly incorrect. [Community newsgathering] is working out great.”

Patch has a thin staffing model, with typically one full-time editor anchoring each region. “Each editor knows his or her community like the back of their hand,” says Horn. The meat and potatoes of a Patch site is the little details that matter in residents’ everyday lives: library programs, school sports and street closings. “We want to be a resource for information that can enhance people’s daily lives,” Horn says.

Addicted

We’ve developed a mild addiction to our local Patch site, and we even contributed some photos to the recent storm coverage. Why? Because we were asked. As our photos began to show up on the gallery, we found ourselves mildly intoxicated by participating in storm coverage. We were also gratified to get a thank-you note from Petroni herself. At the nearby Boston Globe, e-mails to editors generally disappear into a black hole, and phone calls are rarely returned.

Patch, which now boasts more than 850 hyperlocal sites nationwide, has been criticized for maintaining a sweatshop atmosphere and for paying its editors meager wages. In our brief conversation with Petroni (corporate policy dictated our interview request be directed to a regional editor), she said the flexible working conditions were one of the best parts of the job. Horn noted that while Patch editors are expected to produce content seven days a week, they have considerable latitude in how they do it.

Essential Truths

The jury is still out on whether Patch will succeed, but we believe the experiment is already proving some essential new truths:

The Internet rewrites the economics of news. Our town could never support a daily newspaper, but it can pay the salary of a single editor with no overhead other than a PC and a couple of cameras. Thanks to thousands of layoffs at newspapers nationwide, quality journalists can be found who will work for modest salaries in exchange for workplace flexibility.

Hyperlocal is instinctively appealing. We long ago stopped reading our regional newspaper because so little of its coverage related to our local community. In contrast, the daily Patch e-mail is packed with news that impacts our daily lives, mundane as some of those issues may be.

Empowerment is intoxicating. Patch is drawing lines that enable the community to participate in newsgathering while keeping a firm editorial hand on the tiller. As we waited for Internet service to return following the storm, we monitored the Patch Facebook page from the local library and found it to be a more timely source of information than the statements of utility officials.

In our town, and in hundreds of towns like it, Patch is filling a gap left by the collapse of traditional media. The question is whether its business model is sustainable, and a lot of people think it isn’t. We hope AOL will stick with this venture and innovate beyond the traditional advertising-funded model. Even if the Patch business fails, it has laid a foundation upon which others can build.

By Paul Gillin | August 25, 2011 - 4:08 pm - Posted in Business News, Local news, R.I.P.

Oakland Tribune front pageMediaNews Group, which has been on the ropes financially as it struggles with debt, will take drastic action in its Bay Area stronghold, consolidating 11 local newspapers in the East Bay into two regional newspapers and laying off 120 people, or 8% of its staff. About 40 editors and 80 production people are expected to be let go.

Beginning on November 2, the Oakland Tribune, Alameda Times-Star, Daily Review, The Argus and the West County Times will be consolidated under the name East Bay Tribune.

Six other titles – the Contra Costa Times, Valley Times, San Ramon Valley Times, Tri-Valley Herald, San Joaquin Herald and East County Times will be rebranded as simply the Times. The San Mateo County Times will be merged into the San Jose Mercury News. The Bay Area News Group, which is a subsidiary of MediaNews, will also start two weekly newspapers.

The most visible casualty of the cost-cutting move is the Oakland Tribune, a daily that has been published since 1874. The most recent circulation figures we could find listed its daily circulation at nearly 93,000 in 2009. It has been the only daily newspaper in Oakland since 1950. The Tribune won the Pulitzer Prize for photography in 1950 and 1989. The other major daily title to be closed is the Contra Costa Times, which was founded in 1947. It has a daily circulation of 168,000.

While the move might appear to be counter to the trend toward hyper local news coverage, MediaNews is maintaining some exclusive local content. All newspapers will have a standalone local news section daily.

The company’s press release puts a predictably cheery front on the news. The result of all the closures and layoffs will be “greater emphasis on providing high-impact, regional and local coverage.”

In contrast, the editor of the Oakland Tribune told Columbia Journalism Review, “We’ve already gotten pretty lean. It’s impossible to expect us to be doing all that we did before.”

Ken Doctor has a poignant and thoughtful obituary on Nieman Journalism Lab. He brings home the impact of a business decision on the community residents who had relied on their local newspapers for years to represent their interests.

More coverage on KQED.