By Paul Gillin | July 11, 2011 - 9:38 am - Posted in Best/Worst, Business News, Murdoch, Newspapers, R.I.P.

At the risk of beating the News of the World scandal to death, we’ll just point out a couple of other news items that hit our inbox over the weekend.

A group of News Corp. shareholders has filed claims in Delaware Chancery Court accusing the media giant of colossal corporate governance failures surrounding the phone hacking scandal that led to the closure of the 168-year-old tabloid. Shareholders charge that News Corp.’s board of directors “failed to exercise proper oversight and take sufficient action since news of the hackings first surfaced more than five years ago.”

News Corp. shares, which had been steadily climbing since mid-June, are off about 9% since the scandal broke last week. Shares of BSkyB, the satellite TV network that Murdoch is hoping to buy, have lost £2.75 billion in value since the scandal broke. Analysts are speculating that the losses could scuttle Murdoch’s bid, a situation the media mogul had hoped to avoid by shuttering News of the World.


News Corp. CEO Rebekah Brooks is facing police questioning and at least nine journalists and three police officers could face jail as the scandal unfolds, reports the Daily Mail. New e-mail evidence indicates that “four-figure payments” may have been made to police officers to ignore the activities of private investigators hired by the tabloid. The Telegraph says the payments may have totaled more than £100,000


Former News of the World Editor Andy CoulsonFormer News of the World editor Andy Coulson (right) was arrested by detectives investigating the phone hacking and illegal payments to police during his tenure as editor of the News of the World. The action is causing some embarrassment for British Prime Minister David Cameron, who hired Coulson as his press spokesman despite knowing about his involvement in the alleged scandal. (Telegraph photo)


And it gets worse. Rupert Murdoch’s son, James, could face criminal prosecution in both the UK and the US over the phone-hacking charges, several outlets report. James Murdoch is chairman of News International, the News Corp. subsidiary that owns News of the World. He has admitted to making out-of-court settlements to victims of the phone hacks and to misleading Parliament, although he maintains he didn’t do so deliberately. Murdoch is liable for prosecution in the US because News Corp. is listed on the NASDAQ stock exchange. “Under American law, the Foreign Corrupt Practices Act (FCPA) makes it a crime for American companies to offer corrupt payments to foreign government officials,” says the Telegraph, which, like most British papers, is covering this scandal with gleeful abandon.


Weekly World News front page

If you want more coverage of this unfolding story, follow it on Google News.


We are pleased to inform our readers that News of the World is not the same tabloid as Weekly World News, the US tabloid that has long been a crusader in its coverage of the threat of space aliens to our way of life. WWN is alive and well, and will continue in its mission to cover the stories that others fear to expose.

 

By Paul Gillin | December 10, 2009 - 3:32 pm - Posted in Best/Worst, Business News, NewMedia, Newspapers, R.I.P.

As if to dramatize the crisis facing the newspaper industry, the owner of the 125-year-old Editor & Publisher magazine announced it is shutting down the title. The venerable trade magazine was the unwanted child in a deal between Nielsen Business Media and e5 Global Media Holdings, LLC involving the sale of eight brands in Nielsen’s Media and Entertainment Group. The closing was announced in a one-sentence mention in a memo from Nielsen Business Media President Greg Farrar. AFP has the facts and Huffington Post, considered by some to be the standard-bearer for the new breed of publishers that will succeed daily newspapers, adds detail.

That includes E&P’s string of 11 Neal Awards, a prestigious honor awarded to trade publications by American Business Media, as well as the magazine’s once-formidable position as the journal of record for the newspaper industry. E&P writes its own obituary and suggests that there’s still a possibility that the title could be carried on in some form. It also obligingly lists the e-mail address of all staff members for the benefit of recruiters.

We have often cited E&P‘s work in our posts on this website, and had just this morning written a commentary on an excellent dissection of the circulation experiment at the Dallas Morning News that appeared in E&P this week. While the publications articles could be annoyingly terse at times, its features are often very good and its coverage was always timely. We have particularly enjoyed the work of Mark Fitzgerald and Jennifer Sabba and hope that they quickly find a new place to showcase their talents.

It’s perhaps fitting that we learned of E&P’s demise the way an increasing number of readers consume their news these days: it was posted on Twitter.

By Paul Gillin | October 6, 2009 - 9:12 am - Posted in Advertising, Business News, Circulation, Classifieds, NewMedia, Newspapers, R.I.P.

gourmet-magazineThere was a bloodbath at Condé Nast yesterday. The publisher, which has been rocked by the declines in lifestyle advertising, closed four magazines – Gourmet, Modern Bride, Elegant Bride and Cookie – and laid off at least 180 people. More turmoil seems likely as Conde Nast sorts through the problem of deciding which staff members to keep and which to boot in order to make way for them. The news comes as September ad page figures for the publisher showed a stunning fall of nearly 1,700 pages. Allure, Gourmet, Self and W were all off 50% or more. Gourmet editor Ruth Reichl is tweeting her feelings about the whole affair.


Reuters reports that Time, Inc. is spearheading an effort to assemble a consortium of U.S. magazine publishers who will cooperate on digital delivery of their products. The wire service says the effort could be announced as early as next month with a “digital newsstand” on the market sometime next year.

You can already buy many magazines on the Amazon Kindle, but publishers hate Amazon’s fee structure, which skives off 70% of the subscription revenue. The digital newsstand would be device-independent, meaning that readers could download magazines to devices from Apple, Sony, E Ink and others. Why Amazon doesn’t move more forcefully to consolidate its hold on the burgeoning market continues to be a mystery to us.


The Economist, which continues to defy the freefall in print circulation, is raising the barriers to free online distribution but still not charging for new content. The magazine will start charging for all content more than 90 days old (previously, the threshold was one year) and will make its digital print replica edition available only to paying subscribers. However, new stuff will still be free to the world online. It’s not like the Economist’s back is to the wall: its 1.39 million circulation was up nearly 7% in the most recent six-month reporting period and operating profits climbed 26% on a 17% revenue increase.


BTW, magazines are only a sidelight for us. If you want to follow the industry with a Death Watch twist, checkout Magazine Death Pool.


Poynter’s Rick Edmonds is expecting to see newspaper circulation results for the first six months of 2009 and he believes a Halloween release date could be appropriate. A variety of factors are contributing to accelerating circulation declines, including the recession, publishers’ efforts to exercise more discipline over their subscriber lists and a continued flight to online alternatives. Edmonds is estimating that the drop in newspaper circulation soon to be reported will exceed the record 7% year-over-year figure for the period ending in March. This will accelerate revenue losses, which will lead to more cost cuts and smaller issue sizes that fewer people will want to pay for. There’s also the problem of coupon and circular distribution. Unlike display advertising, those revenues drop in direct proportion to circulation.


The deadline has passed for new suitors to emerge for Chicago’s Sun-Times Media Group (STMG) and nobody stepped forward. That leaves local investor Jim Tyree as the sole hope of keeping the bankrupt company afloat. Tyree has said he won’t do the deal unless the unions agree to a 15% pay cut. Five of the 16 unions at STMG have said they won’t agree to the terms. The parties have until late December to agree to terms, but the company’s current management says it doesn’t have enough money to stay afloat until then.


Members of the Newspaper Guild at the Boston Globe must be seeing red now that their union chief has been formally charged with misappropriating funds. Daniel Totten spearheaded the union’s disastrous negotiations with The New York Times Company a few months ago. He’s been charged with, among other things, faking a countersignature on his own paycheck. The union’s governing board takes up the matter tomorrow night.


The executive director of the Nevada Press Association says newspapers won’t die; they’ll just shift shape sort of like the keyboard did. “When computers came along, with ‘word processing,’ there was no longer any need for a typewriter,” writes Barry Smith. “I used to have two typewriters — one at home, one at work. Now I look around and I have at least six keyboards, not counting the touch pad on my phone. You have to look at what they do, not what they are.” That’s a great analogy, except that you have to remember that IBM was able to sell a Personal Computer for a whole lot more than a Selectric.


If all goes well, we could be removing the Claremont (N.H.) Eagle Times from the R.I.P. list next week. An anonymous e-mail says that the paper, which closed in July, will reopen on October 12 as a weekdaily. It also says that the Weekly Flea, an advertiser also owned by the Eagle Times, restarted publication last week. We are unable to find any published verification of this information.

Carolyn MaloneyLawmakers are holding hearings on Capitol Hill to try to figure out solutions to the newspaper industry’s troubles. U.S. Rep. Carolyn Maloney (D-N.Y., at right), who chairs Congress’s Joint Economic Committee, has proposed a bill that would allow community and metropolitan papers to become nonprofit organizations. Similar legislation has also been introduced in the Senate.

John SturmAt hearing last week, Newspaper Association of America President John Sturm said handouts aren’t the solution but that the government should allow publishers to charge current losses against past profits in order to claim retroactive tax refunds. “Newspapers need cash now to preserve jobs next year,” he said. “It’s really that simple.” Sturm also dismissed an outright government bailout as inappropriate, given newspapers’ governmental watchdog role.

In a statement to the committee (PDF), Princeton University professor Paul Starr noted that government support of the media is nothing new. Starr pointed to pre-First Amendment legislation adopted in 1792 that gave newspaper publishers “cheap, below-cost rates for sending copies to subscribers and a franking privilege that allowed newspaper editors to exchange copies with one another through the mails at no postal charge.” To this day, federal and state governments mostly exempt newspapers from sales taxes, he added.

While scrupulously avoiding the term “newspaper” in his recommendations (subsidies “should be platform-neutral—they should not favor print media over online media, for example”) Starr argued for government subsidies and regulatory relief that would make it easy for media organizations to become nonprofits if they so chose. He also made the case for extending tax benefits uniformly to media companies without regard to their business model or political bias. This model is apparently working well in Scandinavia, the population of which is about 8% that of the US.

Seed Money

Or we could just leave the job to private philanthropists. Alan Mutter tells of a new Bay Area nonprofit that was just funded to the tune of $5 million by a local investor. The startup capital from Warren Hellman is considered “seed money” for a venture that’s being launched in collaboration with public broadcaster KQED and the Graduate School of Journalism at the University of California at Berkeley. Mutter suggests that if the venture could raise money at the same rate as an earlier experiment in Texas, the Bay Area initiative could surpass the size of Pro Publica, which has an annual budget of $9 million and which employs 32 full-time journalists.

Hellman’s decision was motivated in part by McKinsey research that found that newspaper employment and coverage of local news have both fallen by half in the Bay Area over the last five years. The as-yet-unnamed new venture will be different from others in its focus on local news. A base staff of professional journalists will provide the meat and potatoes coverage. Berkeley students will contribute information from a series of hyperlocal blogs they have set up and broadcast partner KQED will contribute its own content as well as rebroadcast the work done by the nonprofit. Hellman said he originally considered buying the distressed San Francisco Chronicle but passed because “the business model may not be there to put a sustainable, for-profit economic foundation under quality, professional journalism.” Comments on Mutter’s blog indicate some skepticism about the venture’s chances of success

Sunset for Sun-Times?

Two weeks ago, Sun-Times Media Group CEO Jeremy Halbriech sent a memo to members of the paper’s unions warning them that if they failed to ratify a proposal for a 15% cut in compensation, the company’s prospective buyer would pull out of the deal and the Sun-Times and its affiliates would close immediately. “No other bidder has emerged who will purchase our assets.  If the current Buyer withdraws its bid, we will shortly run out of cash and we will be forced to shut down all of our publications and Web sites and liquidate the business.  This will result in the loss of all 1,800-plus jobs across the Company,” he wrote.

Well, the union said no. Unlike unions at the Boston Globe and San Francisco Chronicle, which caved in to threats from the parent company, the city of big shoulders likes a good fight. Tomorrow is the deadline imposed by suitor James Tyree for the union to agree to terms. However, Tyree has made it clear that this is a take-it-or-leave-it offer. “I do not want to get into a negotiation,” he said. The unions want to negotiate. The staring match has gone on for two weeks. Presumably, no one is watching more closely than staffers at the rival Chicago Tribune, which would enjoy a business boost from the failure of its competitor.

Miscellany

Judy Sims has a few hundred words of practical advice for creating a profitable hyper-local publishing model. It starts with putting four people – an online product person, an online advertising sales person, an editor and a web developer – in an office that’s completely separate from the print operation. Then get them focused on giving readers stuff that’s hard to find out – such as which emergency room has the shortest waiting time – and crafting packages for advertisers that include a lot more than just display advertising. If you’re thinking of starting a localized news operation, use Sims’ outline as a basis for your business plan.


The executive board of The Boston Globe‘s largest union has canceled president Daniel Totten’s union credit card, suspended his check-signing privileges and ordered a ”comprehensive external audit” of union finances after learning of apparent violations of its financial rules. Totten presided over disastrous negotiations between his union and management at Globe owner New York Times Co. in which the union first rejected a series of concessions in a proposed contract and then settled for an even worse deal after the Times Co. threatened to shutter the paper.


From a graphic on Mint.com. You can find the whole image here.

Newspaper_circ

Two Century-Old Weeklies to Close

The Calhoun City (Miss.) Monitor-Herald will shut down Dec. 31 after 110 years of publication. Its circulation of 811 was no longer enough to sustain it in a battle against the much larger Calhoun County Journal (circ. 4,700).


The Lemoore (Calif.) Advocate published its final issue last week afer 121 years. The staff tapped community contributions to tell the story of Lemoore and of its own rich history as the longest continuously operating business in town. The brief history of the Advocate online has these words about the role of local newspapers:

Small town newspapers seldom cover such mega events as tidal waves, auto industry bailouts or global warming. Small town newspaper staffers are too busy telling readers about lawn watering schedules, a sale at Mom’s Pie Shop and weather hot enough to melt the ice in your lemonade…Small town newspapers write stories that mean everything to their readers. And readers clip those stories to paste into scrapbooks filled with touchdowns and weddings, obituaries and births, yesterdays and tomorrows. There are no scrapbook stories about teamster strikes, golden parachutes or the polar bears’ plight.

Obits

Longtime New York Times columnist William Safire died at 79 of pancreatic cancer. The Pulitzer Prize-winning expert on speech and language was a bulwark of elite conservatism, a speechwriter for Richard Nixon and the author of Vice President Spiro Agnew’s famous phrase, ”nattering nabobs of negativism.” He won the Pulitzer Prize for commentary in 1978 for a series of columns about Carter White House budget director Bert Lance’s financial affairs.


The daughter of slain newspaper heiress Anne Scripps Douglas apparently leapt to her death from the Tappan Zee bridge. Anne Morell Petrillo jumped from the same bridge  her stepfather chose to commit suicide after killing her mother with a claw hammer 15 years ago. Police have yet to make a positive identification. The Douglases founded the Detroit News.

Judy Sims’ “Top 10 Lies Newspaper Execs are Telling Themselves” may be painful for newspaper execs to read, but they should read it anyway. In blunt language, she shoots down some of the most common rationalizations newspaper executives use for continuing to do business as usual. Not all of her points are thoroughly supported, but it’s hard to argue with the common-sense thinking behind most of them.

Among our favorite quotes:

The only way newspapers can ensure the survival of their brands and the journalistic principles they hold so dearly is to separate the Web organization completely from the newspaper.

This frames the list’s biggest “myth,” which is that news organizations can prosper online while doing what they’ve always done in print. The nature of online publishing is conversation and community, not top-down communication. Organizations that derive 90% of their revenue from print are never, ever going to give an online division the attention or resources it needs.

Figure out what is truly scarce information to your readers.  Then, maybe you can charge for it.

Yes, yes, yes. Putting pay walls in front of information that doesn’t meaningfully affect people’s lives is a DOA idea, yet it seems to be conventional wisdom right now that readers will pay for stuff like popular columnists and exclusive sports coverage. No they won’t. They will pay for information that saves them money, enhances their appearance or finds them love, and precious little else. Maslow’s Hierarchy wasn’t invalidated by Internet.

We used the paper to help us shop every week…and decide what movie to see at what time and where. How much of the value of the newspaper was derived from news and how much was derived from all these other things?  After all, news has always been free on TV and radio.

See the previous point. Publishers who think readers are going to pay for news are delusional. Not to mention pompous. Half the reason people subscribe to newspapers is for the coupons. News is a commodity. You have to deliver value that affects people’s lives in a meaningful way.

Figure out what is truly scarce information to your readers.  Then, maybe you can charge for it…Do what you do best and link to the rest.

The second part of the quote is from Jeff Jarvis, but the sentiment is appropriate to the “myth” theme. Newspapers have traditionally had to do everything for their readers because readers had no way to find information for themselves. Now that restriction has been lifted, which means publishers should stop spending money on stuff they suck at.

The more cuts are made, the more newspapers are guaranteeing their own demise.

That’s because the people they’re cutting are setting up shop as hyperlocal bloggers and competing against their former employers. Newspaper layoffs are thus giving rise to the next breed of competitors.

If there’s any unifying thesis to Sims’ 10 lies, it is that trying to manage a revolution is futile. Publishers will not iterate themselves to a secure future, nor will they ever bring back the profit margins of the past. The rules have changed forever and that means blowing up a lot of stuff. The process is incredibly painful but it’s necessary for any organization that hopes to make it to the other side of this vortex.

A couple of weeks ago, SeattlePI.com reported that its Web traffic has remained unexpectedly strong after pulling the plug on its print edition and firing 80% of its staff. The Post Intelligencer may have given the rest of the industry a model for completing the transition to the digital world.

Get Comfortable with “Good Enough”

After you’re done reading about 10 lies, head over to Journalism Iconoclast Pat Thornton, who speaks much truth about what he calls the “Down and Dirty Revolution.” Thornton’s main point: Stop thinking like an entity that was the be-all and end-all of information to its community and start thinking like a participant in the digital community. What does that mean? Paraphrasing:

  • Make the most of what you’ve got and stop whining about the resources you lack.
  • Be satisfied with good enough. You can improve it later. Perfection is the enemy of getting stuff done.
  • Stop duplicating effort. “If parents are taking pictures at a high school football game…it makes much more sense to work out a deal with them than to spend staff resources on taking pictures at said game.” So true. Likewise, use Creative Commons photos and stuff people post on Flickr instead of sending your own photographer to shoot the same stuff.

There’s more, but those are the basic themes.

Miscellany

If all goes well, we may soon remove the Claremont (N.H.)  Eagle Times from the R.I.P. list.  A federal judge has given a Sample, Pa. newspaper chain conditional approval to buy the newspaper with the intent to relaunch it. The 7,800-circulation Eagle Times closed abruptly in July when its owner ran out of money. It took with it three small weeklies, which also will be relaunched if new owner Sample News Group has its way. Owner George Sample said his goal is to relaunch the daily before the end of the month with a staff of 25, which would be significantly smaller than the 66 full-timers and 29 part-timers the paper previously employed. Sample also said he plans to relaunch the weeklies at some point. Sample offered just $261,000 for the franchise, which was nearly $4 million in debt when it declared Chapter 7 this summer.


Ryan Chittum runs the numbers and finds that newspaper ad revenues are on track to hit their lowest level since 1965. In real dollars, revenues peaked in 2000. The comeback from the 2001-2002 recession was never very strong and sales have plummeted for the last three years. Real dollar revenue for 2009 will be about half of what it was just nine years ago, a stunning development in an industry that’s been historically known for its stability. Chittum also notes that circulation is the only slice of the revenue pie that’s growing right now while online advertising is declining. In fact, it appears that the online advertising business will only support one spectacularly successful business and that’s Google. A busy comment stream on this month-old piece debates whether online advertising is actually stealing share from print. Right, and global warming is a myth. (If you have trouble reading the chart below, click on it to go to Chittum’s analysis at the Columbia Journalism Review, where you can see an enlarged version.)

newspaper_revenue_1950-2009


PaidContent.org has an interview with Josh Cohen, senior business product manager of Google News. Cohen has been schooled well to say little in a lot of words, so don’t expect any great insights. The main takeaway for us was that Google has no intention of sharing with publishers any revenue generated on Google’s site but that the company really wants to work with news organizations to make sure content behind pay walls is visible to Google’s search engine. In conversations like these, we hear Google executives sounding more and more like Microsoft officials did in the early 90s.


Speaking of Google, have you seen Google Fast Flip? It’s a new Google Labs project that “lets you browse sequentially through bundles of recent news, headlines and popular topics, as well as feeds from individual top publishers,” according to an entry on the Official Google Blog. “As the name suggests, flipping through content is very fast, so you can quickly look through a lot of pages until you find something interesting.” The service is the product of a partnership between Google and “three dozen top publishers, including the New York Times, the Atlantic, the Washington Post, Salon, Fast Company, ProPublica and Newsweek.” The idea is that if people can access news more quickly, they’ll read more news and that will result in more advertising revenue. Google continues to try to extend the olive branch to publishers who see nothing to like in other Google services that they claim steal their intellectual property.

Google_flip


Final bids for BusinessWeek are due today and Bloomberg LP is reported to be the leading contender. Other possible buyers include Bruce Wasserstein, Lazard, OpenGate Capital and ZelnickMedia, but Bloomberg is said to have the top bid. BusinessWeek revenues are on track to be down 43% from last year’s levels.

Hyperlocal LogoBob Garfield of NPR’s “On The Media” interviews media superblogger Jeff Jarvis and asks “Can journalism be sustained in the top 25 markets if all the dailies fold?

The question was prompted by a recent project by the City University of New York Graduate School Of Journalism that created economic models for next-generation news organizations. Jarvis says a decentralized, hyperlocal newsgathering infrastructure is not only plausible but quite profitable. Some hyperlocal bloggers are already pulling in up to $200,000 annually in revenue, he says, and that’s without the sophisticated funding and advertising mechanisms that are now being developed. We’d like to talk to one of these people.

The metropolitan news organization of the future will be smaller but no less profitable than that of today, Jarvis predicts. His study foresees a full-time staff of about 45 people with substantial contributions from locals. “It needs to work more collaboratively with bloggers and other locals,” he says. All together, a next-generation metro newsroom could have about 275 regular contributors.

“At the end of three years, our research shows that these businesses bring in margins that are reminiscent of the glory days of newspapers,” Jarvis states. “However, they’re much smaller businesses. A 20% margin on a $30 million business is not the same as on a $400 million business. But it is profitable, and that means it’s sustainable.”

Ever the optimist, Jarvis further states that journalism can become “better and richer” in the new model, Although there’s going to be some chaos in the process, “I believe we can actually improve journalism, not just save it,” he says.


They won’t be doing either in Loudoun, Va. The Washington Post Co. is closing its experimental hyperlocal site, the LoudounExtra, after two years, saying that the business “was not a sustainable model.” There were extenuating factors, however. The executives who launched the site left soon after startup and LoudounExtra never received the appropriate attention from the struggling parent company. One of those execs Rob Curley, moved on to bigger and better things in Las Vegas.

Miscellany

The Chicago Sun-Times Media Group (STMG) may be a few weeks from insolvency. The owner of the Sun-Times newspaper has just $19.3 million in cash left and is burning nearly $1 million per week, according to court documents. Chairman Jeremy Halbreich said he has been talking with several potential buyers who are more focused on cost structure than cash on hand.  STMG has been in Chapter 11 bankruptcy since March 31. If it runs out of money, it would probably have to abruptly shut down without offering severance or other transitional amenities.


The Red Wing (Minn.) Republican Eagle will cut back from five days to two days a week. “Goodhue County’s No. 1 news Web site” will continue to be updated daily. The paper said the cutbacks were being made in order to save money and to focus  reporting on its local market.


In the economically devastated region of South Florida, the 55-year-old Boca Raton News published its last print edition yesterday. The paper had previously cut back from five days per week to three. No employees will be laid off, but the paper’s offices will be closed and everyone will work from home. Perhaps this is precisely what Jeff Jarvis has in mind.


The New York Times is quietly seeking a buyer for its Santa Rosa (Calif.) Press Democrat,” said the anonymous message that landed in our inbox. Now you know as much as we do.

And finally…

As we enter the last two weeks of summer and news all but grinds to a halt, bloggers are turning to the offbeat and bizarre. Former Baltimore Sun copy chief John McIntyre reviews a third and expanded edition of “The F Word (Oxford University Press, 270 pages, $11.53 on Amazon), a book that is all about, well, the “F word.” Author Jesse Sheidlower apparently scoured 500 years of English literature to trace the evolution of everyone’s favorite expletive from its mid-15th century origins on the European continent to Jon Stewart on The Daily Show. In the course of his research, Mr. Sheidlower “read an astonishing amount of Victorian pornography,” McIntyre concludes. We can’t wait till Google gets around to putting it all on line.


We’ve been reading with some dismay recently that the US no longer ranks in the top 25 countries on high school achievement test scores. We don’t want to believe that, but then we see videos like this monologue by a resident of Santa Cruz, Calif. testifying before the city Council last year about, we think, vegetables. It speaks for itself.  (Via Free From Editors.)

Abandoned newspaper racksIt hurts to read Bill Wyman’s blunt, sometimes savage piece on Five Key Reasons Why Newspapers Are Failing, but the veteran journalist says some things that need to be said. Unlike recent analyses that have mainly focused on the industry’s business challenges, Wyman aims his guns squarely at the editors and reporters whom he believes fostered a culture of risk-aversion and self-absorption even as the need for change grew urgent. Although the piece is heavy on anecdotes and light on statistical evidence, we found ourselves nodding in agreement frequently as Wyman ticked off a list of editorial missteps.

Perhaps the most damning point in the 9,000-word opus is when the author lists headlines from a “recent” (actually, it was well over a year ago) features section of an unnamed local newspaper (actually, it was the Arizona Republic). They include: “Post office food drive,” “Fight Crohn’s and colitis,” “Mom and Estában,” “Healthful salsa non-guilty pleasure,” and

“Great gifts for teachers.” The point: “There was nothing there of remote interest [to] just about any sentient being. But that’s not what the paper’s editors were aiming for. The point is that there was nothing there that could possibly offend anyone.”

Wyman hammers home this point repeatedly. In his view, advertisers and editors joined in an unholy alliance decades ago in which watchdog journalism was sacrificed to reliable and profitable ad contracts, stable circulation and don’t-rock-the-boat blandness. As a consequence, the guiding principle in editorial departments changed from informing the public to offending as few people as possible. Causing a reader to cancel a subscription was the ultimate sin. Better to under-inform than to antagonize.

As a longtime arts critic, Wyman has some stories to back up the premise. He tells of one arts editor who instructed him to avoid negativity in reviews because readers didn’t want to “hear bad things about their favorite artists over breakfast.” Reviews sections in local papers are almost unfailing positive, or at worst blasé, he notes. Arts sections are filled out with snippets from those stanchions of informational blandness: Press releases.

“Let’s be honest. Most newspapers in the U.S. aren’t watchdogs…Most papers are instead lapdogs, and the metaphorical lap they sit in isn’t even that of powerful interests like their advertisers…The real tyrant the papers served was the tender sensibilities of their readers,” he writes.

Tangled Web

The piece is equally damning in its criticism of newspaper websites, which Wyman believes are too often ponderous, difficult to use and inwardly focused. Search results return rivers of irrelevant promotions that the user doesn’t care about and that exist only to serve the interests of internal constituents, he says. External links are far too rare and readability is managed by people whose expertise is mostly in print. As a result, newspaper websites are some of the least useful properties on the Web, which is a shame because their content should be some of the most useful.

Wyman’s piece makes valuable reading, if only to hammer home the problems of a change-averse culture that still exists in many metro dailies. In part, that attitude is a hangover of management greed that has steadily pared back resources in the interest of maintaining 20% profit tax margins. However, the evils of management are a horse has been beaten to death pretty thoroughly by now. What’s different about Wyman’s perspective is that he takes editors and reporters to step to task for not doing more with the resources they have. Pack journalism and the not-invented-here mentality frustrate efforts at meaningful change. Last week’s acquisition of EveryBlock by Microsoft and MSNBC – rather than by a newspaper company — is just another indication that these businesses don’t move quickly enough.

Bloggers’ Harsh Glare

One insight that we found particularly illuminating is Wyman’s observation that the freewheeling — some would say reckless — culture of the blogosphere has cast a harsh light on the mediocrity that many newspapers have dished out for years. “The Web mercilessly exposes the flaccidness of the content of most papers. It creates a straightjacket for them: As they desperately bland themselves out on land, the material they have on hand to impress in cyberspace is correspondingly pallid,” he writes.

This point deserves special attention. Journalists like to trash talk bloggers for lacking basic journalism skills, but for all its weaknesses, the blogosphere is nothing if not interesting. Put another way, the sudden availability of massive choice exposes boring information for what it is. Big media could get away with mediocrity for many years because readers had no choice. Now that they do, the weakness of the products is magnified.

Wyman’s piece is far from perfect, being at times more tirade than exposé. But it is thought-provoking and — dare we say it — interesting. To hear him tell it, that’s a characteristic that’s all too often missing from the publications he criticizes.

Miscellany

After six quarters of stomachturning losses, newspaper companies finally reported some stability in the most recent quarter, and even a couple of upside surprises. The Wall Street Journal asks if the recovery is sustainable and largely concludes that it isn’t. One unexpected factor in the industry’s recent good fortune has been the plummeting price of paper, which is down nearly 40% in the last nine months. But the Journal expects those prices to come back as the market winnows out some weaker players. It also points to recent research indicating that marketers are more likely to cut newspaper and direct-mail spending than any other line item in the name of increasing their interactive budgets.


Rupert Murdoch’s British newspaper company plans to close the free daily thelondonpaper after reporting a ₤13 million pretax loss. Thelondonpaper is one of two afternoon free dailies, which are targeted mainly at young commuters. It lost ₤12.9 million in the fiscal year ended June 2008 on revenue of just ₤14.1 million. About 60 jobs are affected, though it’s not clear how many people will lose their jobs.


Marty Petty, a Pulitzer Prize-winning journalist-turned-successful-publisher, will leave the St. Petersburg Times after nine years. Calling the apparently voluntary move a “business decision” that reflects the shrinking size of the newspaper, Petty said management must adjust along with employees. Petty was a member of two Pulitzer Prize-winning teams at the Kansas City Star and Times in 1982. She later joined the Hartford Courant, where she rose to the position of associate publisher. She was named the Tampa Bay Business Journal’s BusinessWoman of the Year for media in 2005.


pornWhat do journalists and porn stars have in common? Plenty, according to a short piece in New York magazine. Jessica Pressler writes that pornographers who were making good money online just a couple of years ago are suddenly confronting a new threat from amateur videographers who are giving away all the sex you can watch for free. Once highly paid porn stars are complaining that they can’t find work and there’s little new blood coming into the system. Pressler suggests that maybe The New York Times ought to steal a page from the porn industry by focusing more on stars than on programs. That means orchestrating the careers and various activities of its best reporters instead of simply publishing their stuff.

By Paul Gillin | July 28, 2009 - 6:11 am - Posted in Advertising, Business News, BusinessModel, NewMedia, Newspapers, R.I.P.

The New York Times Co. swung to an unexpected profit in the second quarter, although the turnaround had nothing to do with an improving business. Revenue at the company plunged 30%, which was even worse than the decline in the first quarter. The Times Co.’s success in reducing costs was the hero; expenses in the quarter were $450 million lower than a year ago. However, total revenues clocked in at $584 million, which was $19 million less than analysts expected.  The news did nothing to lift shares of the company’s stock, probably because analysts weren’t impressed by the sales performance. Even online revenues were down 22% because of weak recruitment advertising sales. The good news: The company has cut its debt from $1.3 billion to about $1 billion and is expected to slash that burden further with the expected sale of the New England News Group and the company’s share in the Boston Red Sox.

Sale of the New England News Group? Editor & Publisher‘s Jennifer Saba listened to the earnings call and heard evidence that the Times Co. may not be in such a hurry to sell the Globe after all. Cost cuts combined with circulation revenue increases have apparently put the enterprise on more stable ground.

McClatchy results were similar to the Times’, with ad revenue falling 30.2% and overall revenue tumbling 25.4% from a year earlier. Still, McClatchy managed to post a 43% increase in income on the back of stringent cost-cutting. Employment classifieds were off a gut-wrenching 62.5% as overall classified revenue fell 41% to $80 million from $135 million a year earlier. McClatchy CEO Gary Pruitt said digital advertising was up as a proportion of total ad revenues, but that’s only because total revenues were down so much.

Miscellany

CronkiteOf all the tributes paid to Walter Cronkite over the last week, nothing topped this recollection from the Christian Science Monitor’s John Yemma. The story epitomizes Cronkite’s quiet greatness.

Meanwhile, Slate’s Jack Shafer takes a contrarian view, arguing that Cronkite’s legacy of trust emanated from a single survey of dubious quality combined with FCC regulations that required news broadcasters to remain impartial. Trust isn’t all it’s cracked up to be, says Shafer, noting that PBS’ critically acclaimed News Hour is actually losing viewers to the partisan and popular news programming of the cable channels.


Ken Doctor says Yahoo’s new deal with AT&T is bad news for the beleaguered newspaper industry. The partnership means AT&T’s 5,000 yellowpages.com ad sales people will now be out in the field selling small and mid-sized businesses on the glory of the Yahoo ad network. Until now, that role was filled almost exclusively by reps in the Yahoo’s 800-member newspaper network. Doctor says newspapers are finally getting religion about the merits of small-business advertising, a market that is estimated to exceed $25 billion annually. With national account display advertising falling like a stone, newspapers have to make a more compelling play for the local dry cleaner. Many of them are doing that, but the addition of 5,000 new competitors selling the same product can’t be much help.

The Ann Arbor News published its last daily edition last week, ending 174 years of continuous operation. The new Ann Arbor News will be a twice-weekly print newspaper with a continuously updated website.

The Associated Press will cut fees to print nad broadcast subscribers  by $45 million next year on top of $30 million in fee reductions already enacted this year. Total revenues are believed to have declined more than 6% this year and another big drop is forecast for 2010. A reduction of about 10% of its workforce is ongoing through the end of this year.

JD Lasica riffs on a meeting that we also attended last week with representatives of 10 mid-sized newspapers. The assembled editors and publishers were challenged to come up with ideas for reinventing their organizations and, while Lasica believes they still could have gone farther, he’s heartened by their innovation and positive thinking. One problem many participants complained about, however, is that they will go back to their managers and be challenged to show 25% first-year returns for their ideas. Some executives still just don’t get it.

Printed_Blog

Back in January, we told you about The Printed Blog, a venture by serial entrepeneur Josh Karp that sought to flip the online publishing model by delivering blogs in print. The idea was to take the best entries by local bloggers and rush them into print for consumption by busy commuters, whom advertisers would want to reach. “If his idea reaches its full potential, he’ll have hyper-local twice-daily editions in thousands of communities around the US,” we wrote. “Chicago alone could support 50 localized Printed Blogs.”

Well, it turns out Chicago could barely support even one Printed Blog for more than a few issues. Josh Karp shut his doors last week, having poured more than $100,000 of his own money into a venture that barely got off the ground. The Printed Blog published 16 issues in seven regions and it was a pretty interesting read. Its slogan – “Like the Internet, only flammable” – betrayed its playful nature and the website is the essence of Web 2.0 shareability. The venture was a victim of a harsh economy, in part, but also the reality that people apparently don’t want to read 13-hour-old blog entries about the White Sox in print, as the Christian Science Monitor account points out. It was a long shot that drew skepticism from the start, but it generated huge publicity for Karp, who we hope will quickly find a more successful outlet for his ample creativity.

Karp posted several closing entries on his blog, including this one about the lessons he learned from the venture. Among the half-dozen he lists are this one: “Instead of focusing on one thing – revenue – on a small enough scale to prove our model, I decided to try and publish the paper in Chicago, San Francisco, New York, and Los Angeles… I got carried away, and we spread ourselves too thin too fast.” We’re going to be seeing a lot of entrepreneurs try to fill the void left by dying newspapers in the coming years and they would do well to read Karp’s advice. Or even bring him on as a publisher.

The Flap Over Free

freecoverWe don’t know if you’ve followed Wired editor Chris Anderson’s latest book, Free: The Future of a Radical Price, but the premise is worthy of attention from publishers. Anderson’s premise is that the Internet has created a new competitive dynamic that is relentlessly forcing the price of all things digital – and some things physical – toward zero.

Software that once commanded six-figure license fees is now free.  The entertainment industry has all but abandoned efforts to copy-protect music. Artists now give away music and make money on concerts.

Anderson further argues that other businesses may be pulled into the low-cost business model orbit. T-shirts are basically free, but the cost of a Major League Baseball logo is $30. Casinos give away flights and hotel rooms and make it back on gambling. Ryan Air has staged promotions in which its flights are given away for free while revenue is derived from value-added services like luxury meals or gambling.

This has big implications not just for publishers but for anyone whose value is predicated upon delivering content. Anderson’s premise is controversial and scary to many people. Others simply don’t buy it, including Malcolm Gladwell, who penned a well-argued review in The New Yorker last week. Gladwell points out that Anderson’s argument ignores the value – and cost- of the distribution network. He notes that YouTube makes most of its money from advertising sold against professional programming that it buys from entertainment companies. Thus, the company’s supposedly free content model is really underwritten by real cash money.

Anderson fires back with a respectful rejoinder, telling the story of GeekDad, a blog he started a few years ago that is now run by a largely volunteer workforce. These writers do a heckuva job delivering a product that would have formerly required an expensive publishing infrastructure, and they do it for personal fulfillment, Anderson says. He suggests that this is where the news model is going: “I can imagine far more subjects that are better handled by well-coordinated amateurs than those that can support professional journalists. My business card says ‘Editor in Chief’, but if one of my children follows in my footsteps, I suspect their business card will say ‘Community Manager.’ Both can be good careers.”

True to form, Anderson is giving away digital copies of Free (you can read the whole thing here) but charging for the book. Publicity will no doubt help sustain his five-digit speaking fee. That’s further support for the book’s premise. It isn’t helping his magazine, though, which is among the worst-performing print magazines of 2009. Free can apparently only get you so far.

Miscellany

The Cincinnati Enquirer appears to be shouldering more than its share in the latest round of Gannett Co. layoffs. The paper has laid off 101 people out of a total staff estimated at between 800 and 920. It has also laid off the entire staff of CinWeekly,  companion publication aimed at young readers. Meanwhile, the Detroit Free Press is escaping the axe entirely, but that’s because it and its JOA partner the Detroit News have already cut 17% of their combined workforces since December.


More than half of business communicators surveyed by Ragan Communications think Twitter is a fad that will crest and decline as people run out of interesting things to say. The 28% of respondents who have a microblogging policy in place credit it with improving employee engagement, helping customer service, building reputation and boosting website traffic. Another 40% have no microblogging plan in place. EMarketer remarks on Twitter mania, noting that when people start attributing world-changing characteristics to a new technology, it’s time to start worrying.

The New York Times Co. has extended until late this month the deadine for bids on the Boston Globe. The move is intended to give prospective bidders (three at the moment) time to see if advertising revenue has leveled off and whether the Newspaper Guild approves a tentative contract containing $20 million in concessions. Meanwhile, a lively discussion is going on within the Guild ranks over whether to approve the proposed deal.

A federal judge has cleared the way for Journal Register Co. to emerge from bankruptcy with 90% of the company in the hands of its debtors. The company’s reorganization plan had been held up pending resolution of a dispute over a $1.3 million “shutdown” bonus, which will pay some senior managers to lay off staff and shut down publications. Opponents argued that the bonuses are excessive and unwarranted, but Judge Allan L. Gropper ruled that the fact that the fact that the plan was approved by secured lenders and the company’s creditors committee justified its validity. Under the reorganization plan, JRC gives up 90% of the company in exchange for $225 million from lenders.

And Finally…

gazetaThe comedy team of Bob & Ray once had a skit about an idea called edible food packaging. It turns out the notion may not have been so far-fetched, as publishers are trying every possible idea to make their print products palatable. In Moscow, the the GazetaPacket is delivering news, crosswords, recipes and advertising on printed paper bags. It’s been running since last August. Editors Weblog tell of other ideas, like Bill Shein’s suggestions for edible paper, martini-flavored ink and naked women on the cover. That last one’s been tried and apparently doesn’t work, but you know what they say about if at first you don’t succeed…

By Paul Gillin | July 10, 2009 - 8:02 am - Posted in Business News, NewMedia, Newspapers, R.I.P.

EagleTimesThe 175-year-old Claremont, N.H. Eagle Times publishes its last issue today after filing for bankruptcy. Publisher Harvey Hill informed the 100-plus staffers only yesterday of the shutdown of the near-daily (the morning paper doesn’t publish on Saturday) as well as three companion weekly and advertiser papers serving surrounding areas. Employees get their last paycheck next week and health insurance through the end of the month.

The Eagle Times website (circ. about 8,000)  has no news of the impending closure. New England Cable News does, however. It has the video clip below, including interviews with staffers choking back tears but otherwise showing little outrage. One man mourns the fact that the immediacy of the move gave the staff no chance to say goodbye to readers. The publisher filed for Chapter 7  bankruptcy, which mandates immediate closure of the business. (via Martin Langeveld)