Two-thirds of Michigan households will be unable to get daily newspaper delivery after the end of this month, notes Alan Mutter in his column in Editor & Publisher. Michigan is only the most dramatic example of a quiet yet dramatic change that is sweeping the U.S. newspaper industry as publishers make the most painful cut of all and trim distribution schedules.

The most visible manifestation of this trend is the experiment in Detroit in which the two major dailies, which operate as a partnership, cut home delivery to three days per week in early 2009. Mutter notes that the daily circulation of the Free Press and the Detroit News both fell by more than half between March, 2008 and March, 2011. Sunday circulation of the Free Press, which is the only game in town on that day, is down 21.6%.

Newspapers in Grand Rapids, Kalamazoo, Muskegon, and Jackson are set to scale back home delivery from seven days to three in February. The newspapers will still be published daily but will only be delivered to doorsteps on Tuesday, Thursday and Sunday. As in Detroit, publisher Advance Publications said the move is part of a shift to a “digital first” strategy. It’s also a cost-cutting measure, as evidenced by Erica Smith’s estimate of more than 360 layoffs.

Mutter notes that many other dailies have quietly cut back publication schedules. We heard the total was more than 100 two years ago, but no one tracks this trend to our knowledge. Reducing frequency is the last and most painful cutback to make, but few publishers have any choice as advertising revenues have dwindled by more than half over the last six years.

In the Michigan examples, publishers are still able to claim that there newspapers are “daily,” even though many fewer people read them. It’s notable that the economics of the industry now dictate that the biggest savings are gained from cutting back on delivery trucks and drivers rather than presses and paper. Trucker unions, whose bargaining power has been eviscerated by concessions over the last three years, have little leverage and can only hope to retain the dwindling number of jobs that are left.

We noted recently that forecasts that 1,400 daily newspapers could disappear over the next five years are perhaps not overstated. That doesn’t mean these titles will disappear from the earth but rather they won’t publish on a daily schedule. But does daily frequency even matter anymore? The daily newspaper as we know it was designed for an age when people consumed their news at the same time every day. Thanks to the profusion of computers in the workplace and smart phones in the pocket, people now access news whenever it’s convenient for them. The news organizations that survive will move to a “digital first” strategy with all deliberate speed. In that respect, the Michigan experiments may represent the leading edge of where the entire industry is going.

The most troubling aspect of the Detroit experiment is that circulation has fallen across the board, including the profitable Thursday and Sunday editions. This accelerates the death spiral in which circulation declines lead to cutbacks in editorial content, which spark further circulation declines. Newspapers that sacrifice their daily status are thus ever more pressed to move to profitable digital models.

Miscellany

Newspaper layoffs have created a lot of empty office space, so in Philadelphia they’ve come up with a novel experiment to put it to good use. Philadelphia Media Network, owner of the Philadelphia Inquirer and Daily News is hosting three media-related startups in space once occupied by staff journalists. The trade-off for the tech firms is that they must give Philadelphia Media an early look at what they’re building. The media company also hopes that staffers at the publishing company will learn a few things by rubbing shoulders with entrepreneurs who are focused on creating profitable businesses quickly. A similar experiment is underway at the Boston Globe.

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It was only a matter of time before publishers started giving away e-readers in exchange for subscriptions. Barnes & Noble, which is struggling to compete in the tablet market against a newly aggressive Amazon, is giving away a free black & white Nook reader to people who buy a one-year subscription to The New York Times. Alternatively, subscribers can opt to buy a color Nook reader for $99, which is $150 below the retail price.

The Annenberg School at the University of Southern California created a stir last week with its prediction that only four US daily newspapers will still be in print in five years. “We believe that the only print newspapers that will survive will be at the extremes of the medium – the largest and the smallest,” said Jeffery I. Cole, the school’s director of the Center for the Digital Future. “It’s likely that only four major daily newspapers will continue in print form: The New York Times, USA Today, the Washington Post, and the Wall Street Journal.  At the other extreme, local weekly newspapers may still survive.”

How could this be? There are still more than 1,400 metro daily newspapers publishing in print in the US. As one tweeter pointed out, dailies would have to perish at the rate of five per week in order to meet USC Annenberg’s forecast.

We think the five-year timeframe is pessimistic, but we certainly believe USC Annenberg’s prediction will come true within a decade. We made precisely the same prediction five years ago – including identifying the same four titles Annenberg did – only we gave the print industry until 2025 to implode. It now appears that we were optimistic.

Here’s why the Annenberg prediction isn’t so far-fetched. American newspapers had a near-death experience three years ago when two venerable dailies – the Seattle Post-Intelligencer and the Rocky Mountain News – closed their doors, each after more than a century of continuous publication. Two other major titles – the San Francisco Chronicle and the Boston Globe – had their own brush with the reaper at the same time. Both were pulled back from the brink only after their unions made massive concessions and hundreds of highly-paid journalists lost their jobs.

Busting the Union

Early 2009 was when publishers broke the back of the Newspaper Guild. At the Globe, the union bargaining position was so weak that the contract that members finally accepted was actually worse than management’s original offer three months earlier. The showdown at the Globe was a turning point for the US newspaper industry. The management victory in the labor negotiations was so complete that publishers across the country were effectively given carte blanche to fire people by the thousands. Which they did. The amazing Erica Smith counted nearly 15,000 newspaper layoffs in 2009 and another 6,700 in the two years since. And her count doesn’t include the many jobs that were eliminated or scaled back without public announcement.

Newspaper publishers basically bought themselves time, and they used it to bring costs in line with revenues. Most newspapers have drastically scaled back the size of their print editions and many have cut back regional distribution. Publishers have raised subscription prices to milk more dollars out of the dwindling cadre of loyalists who are willing to pay for print. Unfortunately, they don’t have much time. The average ago of a daily newspaper reader in the US today is between 56 and 60, depending on whose estimates you believe. That population will shrink more rapidly than any other demographic group over the next 10 or 15 years. Seniors are also the least attractive audience to the advertisers who support print advertising. It’s a bad combination.

For the time being, printed newspapers can survive simply by cutting costs and raising subscription fees, but that strategy invariably turns into a death spiral. At some point publishers will no longer be able to afford to deliver a product that people want to pay to read in print.

Tipping Point

Circulation declines, which have been running about 8% to 10% annually, will accelerate. A tipping point will be reached and the whole print model will fall apart. We don’t know when that threshold will be reached, but demographic trends that indicate it will certainly happen within the next 10 years and will probably hit a lot of titles simultaneously.

The death of the printed daily doesn’t mean the death of print. Many publishers have cut back out unprofitable Saturday and Monday editions as a way to save costs, and more will certainly follow suit. Sunday editions may be around 20 years from now because of the revenue from flyers and coupons. But many newspapers will no longer be able to support a daily publishing schedule within a few years.

That’s the bad news. The good news is that many publishers are beginning to figure out the economics of digital revenues. A milestone was reached just a couple of months ago when the New York Times Co. released its first earnings report since it instituted a paywall early this year. As we reported at the time, Ryan Chitturn of the Columbia Journalism Review estimated that the Times’ digital revenue in the quarter actually exceeded its editorial costs, meaning that the paper could conceivably publish profitably without a print edition. We don’t expect the Times will shut down its presses anytime soon, but publishers across the country should cheer its success at crossing that threshold.

The Times is making the move to digital faster and more effectively than any other daily newspaper. Assuming other publishers follow its lead, we can expect that many major metro dailies will figure out a sustainable digital formula over the next five years. At that point they can begin to wind down their print operations without fear of giving up the farm. This won’t be pretty. Lots of jobs will go away when the presses shut down. However, the brands may survive and even begin to grow again.

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Speaking of The New York Times, the parent Times Company is in “advanced talks” to sell off 16 regional newspapers, including titles in Florida, California, North Carolina, and Alabama. The Times Co. will continue to own the Globe and International Herald Tribune. Analysts are saying the move simply removes a headache for the Times, since the regional media were collectively losing money, and the company can now focus on its core business, which is a good thing these days.

Miscellany

We know the U.S. Postal Service is hemorrhaging money and facing criticism that it’s slow, antiquated and inflexible. So in a bold move to remedy its situation, the USPS is responding by becoming slower and less flexible. Read what the recently announced changes in service mean to publishers. We actually don’t want to be too hard on the Post Office, since many of its problems stem from a congressional requirement that it fund retiree health benefits 75 years into the future. That’s not a typo: 75 years.

And Finally…

The holidays bring family, friends, eggnog, and, best of all, the Crunks. Only they’re not called the Crunks any more since our friend Craig Silverman (left) gained the legitimacy of a Poynter affiliation and began publishing his collection of the year’s best media gaffes as “The year in media errors and corrections” on Poynter Online. Thankfully, the content is still the same.

This year’s roundup of the funniest and most outrageous mistakes and corrections is headlined by several major news organizations that confused the President of the United States with the world’s most notorious terrorist and announced the death of “Obama Bin Laden.” One anchorwoman on Canadian television made the mistake three times in just 17 seconds and apparently didn’t even notice.

We like the newspaper headline that reminded readers to “turn your cocks back one hour at 2 a.m. Sunday,” but our favorite is a lengthy correction from The Guardian about this year’s Royal wedding. It includes the passage:

“The piece referred to “damaging stories of royal profligacy past: Charles with his staff of 150, and an aide to squeeze his toothpaste for him”. [The couple’s press secretary] writes, “The Prince of Wales does not employ and has never employed an aide to squeeze his toothpaste for him. This is a myth without any basis in factual accuracy.”

This stuff is too good to be made up. Thank you, Craig.

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

Members 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.

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.

 

Jim Romenesko tells his side of the story behind his messy and public breakup with Poynter Institute, and he couldn’t be more gracious. Actually, there’d be no point in scolding the rank-amateur behavior that prompted him to resign suddenly earlier this month over allegations of improper sourcing by his Poynter editor, Julie Moos. Visitors to Moos’ Nov. 10 commentary have done the talking for him.

Romenesko is the prolific blogger who has attracted a large following with his almost obsessively updated newsfeed about the latest goings-on in media. His style for years has been to post short summaries or excerpts and one or two links to the source. Most media outlets consider it an honor to get a link from Romenesko, who has more than 40,000 Twitter followers and a huge mind share among media professionals.

However, Moos saw peril in the practice, and on Nov. 10 raised questions about Romenesko’s sourcing of third-party content, essentially accusing him of plagiarism. Using examples provided by a Columbia Journalism Review reporter, Moos demonstrated that Romenesko has republished rather lengthy passages without using quotation marks to cite  the source.

What Moos failed to do was consult others for their opinions or give Romenesko himself much more than a cursory heads-up that the post was going to appear. The reaction from readers – including several of the sources allegedly wronged by the sourcing practices – came down like a ton of bricks. As of this morning, Moos’ post had collected nearly 300 comments, most ranging from critical to hostile. Rather than taking umbrage at the Romenesko, most people said they were grateful for the service he provided and had no confusion whatsoever about where his information was coming from. And even if the sourcing wasn’t always rigorous, the outcome was: gushers of traffic to their websites. Which is a good thing.

Romenesko’s account on his new blog, JimRomenesko.com, fills in some of the background details. According to Romenesko, Moos’ blog post was preceded by months of negotiation over renewal of Romenesko’s contract, which expires on December 31. Two days before the post appeared, Moos expressed concern to Romenesko about his plans to sell ads on his new website, potentially cannibalizing Poynter’s business. Without explicitly accusing Moos of anything, Romenesko’s timeline portrays an increasingly panicked editor who is about to see her star columnist become a competitor. The sourcing accusations appear to be timed to cut off competition at the knees.

It’s unfortunate that this issue degraded into personal attacks, because the issues that Moos raised are legitimate. The old rules of attribution seem out of touch with the new age of copy-and-paste publishing. A decade ago, publishers sued each other over “deep links.” Today they beg for them. Erika Fry, the CJR  reporter who first raised the sourcing issue to Moos, published a calm and level-headed account of her concerns shortly after Romenesko quit. She was never out to get Romenesko, she says, but rather to understand how his own rules of sourcing work. Poynter could play a valuable role in facilitating a discussion over the new ethics of plagiarism. It’s unfortunate that one editor chose to use the issue for character assassination instead.

In places where paywalls are working – and yes, they are working in some places – publishers have abandoned the metaphor of a wall and focused instead on bundled subscriptions that looked a lot like cable television. So writes Poynter’s Rick Edmonds in a summary of a report by the International Newsmedia Marketing Association (INMA) that looks at 15 successful paid subscription models.

No two are exactly alike, and some even challenge credulity, such as the Oklahoman, which charges 20% less for a combined print/digital package than for an online-only plan. That’s right, they pay you to take the newspaper. All the models have one thing in common, though: they’re working. Instead of being positioned as obstacles, they’re marketed as ways to serve  readers’ need flexible consumption via computer, smart phone, tablet or some combination of all three.

The INMA report cautions that hybrid subscriptions aren’t any easy sale. Readers need to have options and explanations laid out clearly, and digital can’t be positioned as an afterthought. However, readers have adopted so-called “digital replica” editions with surprising enthusiasm, indicating a fondness for the look and feel of print even when reading on a screen. The report also indicates optimism that paid subscription models can work when tuned to the needs of the specific audience.

Start by discarding the concept of a wall. Digital subscriptions need to be seen a convenience rather than a barrier. The emergence of multiple digital platforms may be the best thing that has happened to publishers over the last decade. It has given them a way to make simplicity a feature worth paying for, and audiences are proving to like that story.

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Andrew Birmingham isn’t quite so optimistic. The CEO of Silicon Gully Investments and a former associate publisher of the Australian Financial Review pens a lengthy piece in the Australian edition of CIO magazine arguing that pay walls are a fundamentally defensive strategy undertaken by panicked publishers whose entire business models are collapsing around them. “The time to implement paywalls was 15 years ago when [editorial content] was worth paying for,” he writes. “The time to invest in editorial was also 15 years ago when [publishers] should have been erecting paywalls.”

Birmingham’s conclusions aren’t particularly novel, but his explanation of the spiraling downward cost of online advertising is worth reading. Advertising networks in general, and Google in particular, come in for particular criticism. Both promised publishers easy money in the late 1990s, when times were good. The consequence, though, has been cannibalization leading to a plunge in advertising prices “from hundreds of dollars per thousand to $1 to $2 dollars per thousand in Australia across general news websites,” Birmingham writes. “In the US, they are now measured in cents per thousand.

Publishers did this to themselves, of course. Few understood the implications of the Internet on their businesses in the early days and most saw online advertising as simply frosting on the cake. Most are making the same mistake with social networks today, choosing to believe that Facebook is simply another publishing medium rather than a reinvention of the way people consume information. It’s good to see some paywall experiments paying dividends, but it’s also hard to believe that publishers will get themselves out of this mess. New entrants will have to figure that one out. In the meantime, playing defense probably makes sense.

Miscellany

Over in the UK, a hyper local startup called the Port Talbot Magnet is trying the direct approach: It’s asking readers to contribute donations to fund its news coverage. Visitors can pledge amounts starting at just £2 to sponsor a court reporter for a day, and PayPal is accepted.

 

The news just keeps getting better at The New York Times and the Financial Times, as new numbers indicate that paywalls really work if you’re among the most respected news organizations in the world.

The FT reported that it has breached the 250,000 subscriber mark, having grown digital subscriptions 30% during the last year. The FT charges about $390 for an annual subscription to its website, which would indicate total digital subscription revenues of nearly $100 million if everyone was paying the full annual price. However, the actual total is almost certainly lower than that, since print subscribers pay discounted fee and not all subscriptions are annual. However, the performance is still impressive. The FT said 100,000 of those subscriptions are from corporations.

The Times is confident enough in its paywall experiment to declare victory and begin branding itself as a social media poster child. Times publisher Arthur Sulzberger took the stage at the London School of Economics last week to crow about a report by lead mining firm NetProspex that declares that the Times is the number one most social company in the U.S., based upon the total number of employees using social media and their fan/follower reach. Sulzberger said the designation recognizes the success of individual employees, such as Nicholas Kristof and C.J. Chivers, at building their own social followings.

“In 2000, we were #3 in terms of uniques behind the Washington Post and USA Today,” Sulzberger said.  “Today we’re proudly the #1 newspaper website, with a worldwide audience of over 45 million uniques…and that’s after we started asking readers to pay for unlimited access to our content.” The Times’ aggressive adoption of Twitter, in particular, has paid off in word-of-mouth awareness. Sulzberger said a Times story is now tweeted every four seconds.

Read a transcript of his comments for more examples. Note, in particular, the emphasis on “digital first,” and the speed with which the Times is creating hash tags and real-time Twitter feeds to lead the conversation on breaking news. Sulzberger also has some interesting points about the reading habits of mobile users and how they differ from those of traditional print subscribers. The ability to “literally get into bed” with readers is an opportunity to expand the Times’ franchise, not simply an adjunct to the print product.

The good news continues overseas, where News International reported a 10% increase in digital subscriptions to the Times and Sunday Times over the past three months to a total of more than 111,000. The company said it would start reporting monthly digital subscription updates, indicating confidence that the number will grow.

Does this mean paywalls are the answer to the industry’s woes? We’ll believe that when we start hearing similar success reports coming from major metro dailies that aren’t The New York Times or that don’t deliver high-value financial news. For now, publishers can take some comfort in the fact that the hemorrhaging appears to be under control. Print circulation is actually growing in emerging markets like Latin America and Southeast Asia, and North American advertising revenues actually were up slightly last year.

Nonprofits Gain Traction

Nonprofit news organizations are some of the most promising candidates to replace the investigative journalism that’s been lost to cost-cutting in mainstream media, but one of the keys to success is to go beyond simply filling that gap. That’s according to an impressive new report from Knight Foundation, co-authored by our good friend Michelle McLellan, that looks at critical success factors for nonprofit success.

Poynter’s Rick Edmonds has an excellent summary of the study, which looked at the business models of seven promising local ventures, ranging from the ambitious Texas Tribune to the much smaller, hyperlocal St. Louis Beacon. While none has reached self-sustainability just yet, these startups are learning tactics that can serve as a model to others.

The report cites three “next-stage” opportunities, but they can really be boiled down to one truth: Go beyond replacing the newspaper model. Successful ventures are leveraging the unique advantages of online media to deliver information that can’t be expressed in print, such as databases and first-person video. That means hiring technology and data analysis specialists, not just reporters. The featured nonprofits are also diversifying their income streams beyond a few big foundations to include paid memberships, syndication fees, events and sponsorships.

Knight’s study is an encouraging sign that investigative journalism will not perish from the earth, and may even be reborn in a smaller, focused and more-efficient form.

Go Google+

Has your news organization registered its Google+ page yet? Better hurry. Google opened up its rapidly growing social network to company pages on Monday, and news operations like The New York Times have already staked a claim (tagline: “All the News That’s Fit to +”). Even if you have no immediate plans to build a Google+ outpost yet, you want to be sure to grab your brand before somebody else does. As many businesses learned with Twitter, failing to register accounts on new social networks can create an embarrassing situation when others begin speaking on your behalf.

The New York Times released quarterly earnings that indicated that is paywall is working. The report is the first to give some indication of incremental subscriber growth beyond the initial surge of sign-ups that came when the paywall went up in March. It shows that more than a quarter million people are now paying at least the $15 minimum fee. Even better is that traffic to the NYT.com website is actually up 2% from a year ago.

“The Times has created the perfect paywall,” writes Ryan Chitturn on Columbia Journalism Review. “It’s getting tens of millions of dollars from hardcore readers while letting in enough Google traffic and casual readers to continue boosting its online readership and collecting ad revenue off of those eyeballs.”

Chitturn estimates that the Times will take in about $63 million in digital subscriber revenue this year and more than $210 million in total digital revenue. That’s more than it costs to operate the newsroom. Which means that The New York Times could theoretically get out of the print business entirely and still make money.

Does that mean it’s time for everyone to jump into the pool? Bill Mitchell thinks so. Writing on Poynter.org, he tells of moderating a panel at the World Editors Forum in which publishers who had taken the paywall plunge spoke of their initial trepidation and then relief when the steep declines in traffic that they had feared failed to materialize. Traffic to the Berliner Morgenpost has actually doubled since it put up a paywall in late 2009.

Mitchell quotes The New York Times’ Jim Roberts saying the wall has had a morale dividend. “There is more of an investment I feel in the newsroom among our journalists since the introduction of the paywall. They feel a greater stake in the product,” he said.

Perhaps the time is right. The Newspaper Association of America reports that traffic to newspaper websites jumped 20% in September compared to a year ago among the coveted adult demographic. “Average daily visits were up 21%; total pages viewed were up 10%; total minutes spent were up 11 %; and unique visitors were up 9 %,” the NAA reported.

Thus the great paradox continues. Newspapers are more popular than they’ve ever been, but the business model is broken beyond repair. The NAA numbers are encouraging, and perhaps indicates a flight to quality among readers who are fed up with social media noise. For the past five years people have been  publishing all kinds of nonsense online because they could. Now the novelty is wearing off and quality is becoming a differentiation point.

Google’s new Panda search algorithm is supposed to be a game changer in its ability to distinguish quality content from crap. We noted recently that Demand Media, which specializes in crap, has had to remove 300,000 articles from its website because Google won’t pay attention to them anymore. And the world hardly noticed.

The fact that newsrooms turn out a good product has never been debatable, but the idea that people who had been accustomed to getting it for free for 15 years would decide to pay for it is still an open question.

Give credit to the early adopters for fine-tuning the balance of free vs. paid content to achieve some success. The idea is to grant just enough access to entice readers to pay but not enough to give away the farm. The Wall Street Journal lets you read a couple of hundred words gratis but then wants a credit card. Perhaps it and the Times have figured out the formula.

We’ve been skeptical about paywalls for two years, but we’d be the first to cheer their success.  If they enable good journalism to flourish once again, we’re all for it.

Washington Post Co. Holds Out

Apparently the Washington Post Co. isn’t convinced. Publisher Katharine Weymouth was quoted in Politico last week saying that paid subscriptions don’t make sense for the Post at the moment. The newspaper’s philosophy is that its website should be “open to everybody and attract as many people as we can to spend as much time as they can with our journalism, and assume that that will bring them back for more.”

Politico points out that the Post has hardly been a beacon of publishing success lately. It has shed more than 45% of its newsroom staff and it just last month announced plans to close nine of its 11 suburban regional bureaus. The Post Co. does have a couple of things going for it, however, including its profitable Kaplan education division and its phenomenal 30% market penetration. You’d think a market share like that would be an incentive to charge more for the product, but Weymouth seems in no hurry. She isn’t ruling out a paywall but says she’s content to wait and see what works.

“They Won’t Invest in You”

Invantory is developing software tools to help people sell things. It wants to be kind of an alternative to Craigslist, with a mobile twist. The founders thought newspaper publishers would be potential customers, because they already know the classified advertising business and they have a desirable channel. But Invantory gave up on doing business with newspaper publishers. The principal reason: their computer are a mess.

“Newspapers’ online technology platforms [are] not standard,” wrote co-founder Ian Lamont on the Invantory blog. “This means that non-trivial integration work is required for practically any new feature or service, whether created in-house or purchased from a vendor. There are dozens of online content management systems (CMS) in use, most heavily customized.”

In other words, any chance newspaper publishers might have to federate their once-highly profitable classified advertising businesses into a network that could compete with Craigslist is undercut by technology decisions made years ago and incompatibilities perpetuated by customization.

The Invantory co-founders met with Newsosaur Alan Mutter at the New England Newspaper Publishers Association. Mutter, who himself tried to start a business to service newspaper publishers a couple of years ago, told them to forget about pursuing a model based up on serving the dying newspaper industry. “VCs with any experience won’t invest in you,” he said.

Miscellany

The i newspaper celebrated its first anniversary this week, challenging the conventional wisdom that print dailies are dead. The commuter-friendly daily, which delivers news in bite sized nuggets, has succeeded in building a paid circulation of 184,000 during its first year. And it’s reportedly profitable, too.

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“Data journalism,” in which reporters mine public information to discover nuggets of news, is an increasingly popular discipline. Editors Weblog has a list of free tools anybody can use to become a data journalist.

Gannett CEO Craig Dubow (right)  resigned last week for health reasons, saying that back and hip problems prevent him for fulfilling his duties. He leaves a job that could pay him as much as $9.4 million this year, but don’t feel too bad for Dubow: He’s eligible for severance pay of up to $37 million.

The irony of this kind of executive compensation for a company that has laid off nearly 40% of its workforce over the last six years isn’t lost on former New York Times columnist Peter Lewis, who posts a savage send-up of Gannett’s extravagance on his blog. Lewis is particularly brutal in contrasting Dubow’s performance to that of Steve Jobs, who died last week:

Annual base pay: Steve Jobs $1. Craig Dubow $1.2 million.

Stock price during CEO tenure: Apple, up 4,000+ percent. Gannett, down 85 percent.

Job creation during CEO tenure: Apple, plus 28,000. Gannett: minus 20,000.

Notable new products as CEO of Apple: Macintosh, iMac, MacBook, iPod, iTunes, Apple Stores, iPhone, iPad, etc., etc.

Notable new products as CEO of Gannett: ?

Executive pay has been out of control at US companies for decades now, but the practice is particularly offensive at companies in dying industries that are downsizing their way out of existence. Is it conceivable that a talented and motivated executive could be found to lead Gannett at a salary of less than $9 million? How does a company look its employees in the eye and ask them to accept yet another layoff or salary freeze when it nearly doubled the salary of the head of its US newspaper division?

We might just go occupy Wall Street over this.

Open Source Journalism

Nikki Usher and Seth C. Lewis dig into the application of open source software principles to journalism and find some parallels. “The news industry is one of the last great industrial hold-overs, akin to the car industry,” they write. “Newsrooms are top-heavy, and built on a factory-based model of production.” In contrast open source software and the so-called “maker” culture exemplified by Make magazine encourage collaboration, sharing and continuous experimentation.

Rethinking journalism requires time and open-mindedness that a lot of journalists might not have, but the power of the open source model can’t be denied. Usher and Lewis imagine a new role for journalists as creators of “the building blocks for the story. And while they write this code, it can be commented on, shared, fact-checked, or augmented with additional information such as photos, tweets, and the like.” Seems to work OK for Wikipedia. The Knight-Mozilla News Technology Partnership is working on ways to make this model viable. We hope they succeed.

Quality at 5¢ a Word

Demand Media, whose mission is to erase the distinction between journalism and typing, says it doesn’t need freelancers so much any more.  That’s because Google changed its search algorithm, and that means Demand’s editorial mission has shifted.

In case you’re not familiar, Demand Media employs freelance writers to churn out search-optimized content for posting on enormously popular websites like Cracked.com, LiveStrong.com and eHow.com. The company assigns stories based upon search popularity, meaning that it favors how-to and top-10 formats. A perfect Demand story would be “10 Ways to Remove Coffee Stains.”

Demand is noted for paying freelancers next to nothing while touting the benefits of brand-building and flexibility. “No matter where you end up, you have the potential to influence millions of people with your articles,” says its Writing Jobs page. Writers can make up to $25 an article, or even more! With so many journalists out of work, Demand has succeeded in a recruiting a large pool of contributors, despite its starvation wages.

But apparently not so much now. Google is on a campaign to remove the stuff that these content farms churn out, so the company is shifting to slide shows and videos. Demand says it has eliminated 300,000 low-quality articles from eHow and is focusing on going upscale. “It’s all about quality for us,” said Chief Revenue Officer Joanne Bradford. At a nickel a word.

It’s Not a Paywall, It’s…

Paywalls continue to sprout like crabgrass, but publishers are beginning to show some creative thinking. The Day of New London, Conn. will now charge between $9.99 and $22.99 per month for access to its online content, archives and mobile versions, but subscribers will also become part of a brand loyalty program called The Day Passport, “which features rewards, events and giveaways to local businesses, entertainment venues and cultural institutions.” We were pushing this idea two years ago. Publishers need to expand their revenue base beyond advertising and subscription fees. Affinity programs for local businesses are a natural extension.

We also like what the Richmond Times-Dispatch is doing: Instead of firewalling its content, it’s creating premium content packages such as this one on the Civil War sesquicentennial. The Civil War feature combines historic pages from the newspaper archive with original new material. Pricing begins at $1.99/month, though it’s not clear what other premium packages are planned. We like the concept the concept of charging for added value, and we’re particularly glad to have the chance to use the word “sesquicentennial” in a sentence.

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.

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.”

He 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.”

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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.

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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.

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.