Maybe it’s the summer slowdown kicking in, but the news has been mostly bad this month.

New York Times Building

Why must all media coverage of newspapers have a photo like this?

David Carr writes about a little-discussed liability that’s nearly as damaging to the newspaper industry as its mountain of debt: Pension obligations. Gannett pension fund is under-capitalized by $942 million, McClatchy’s by $383 million and The New York Times Co.’s by $522 million. Carr says the hedge funds that bought up newspapers at bargain prices over the last few years are running for the exits, but they can’t find anyone to take the properties off their hands. Pensions are one reason why. The only investor who’s shown confidence in the industry lately is Warren Buffett, but Carr notes that even he stuck Media General with the retirees when he bought a bunch of its titles.

Pension funds became an albatross around the necks of the steel and auto industries back in the 1980s. Faced with retiree obligations that were, in some cases, significantly larger than annual revenues, companies like U.S. Steel had not choice but to shaft the recipients. A lot of newspapers set up generous pension funds when times were good in the 70s and 80s, and now those workers are retiring. It’s a frightening replay of history, particularly if you’re nearing retirement age.

Carr’s piece is kind of a mid-year health check on the state of the industry, and there’s very little cheer about. He opens with accounts of some recent printed blunders that would have been unthinkable a few years ago. The situation in the print world is so bad that when the New Orleans Times-Picayune offered jobs to some of its editorial staff on the new three-day-a-week print edition, many said no, thanks. They included a Pulitzer Prize winner and one of the editors who anchored the paper’s Hurricane Katrina coverage.

The Thin Line Between Journalism and Typing

Carr reserves some of his most acerbic comments for Journatic, an editorial outsourcing firm part-owned by Tribune Co. that is suddenly getting a lot of scrutiny for practices that would make a professional journalist’s stomach turn.

Read Ryan Smith’s insider account on The Guardian for a look at how far the newspaper industry has fallen. Journatic lives under the radar (its sparse website is actually designed not to attract search engines), providing copy to client publishers that is mostly produced by a loose network of freelancers who work for pocket change. Many of its writers are in the Philippines, which means they speak decent English and work for less and a dollar an hour.

Most of them can’t write very well, though, and Smith recounts stories of barely rewritten press releases that crossed his editor’s desk ready to go into some of America’s finest newspapers. Press releases are Journatic’s bread and butter, along with obituaries from Legacy.com and real estate transaction listings. These are rewritten by its far-flung editorial staff and turned in to U.S. copy editors who make $10/hour. The practice that’s drawn the most criticism is Journatic’s practice of putting fake bylines on articles. The company says it adopted the tactic to protect employees, but that doesn’t sit well with its clients, who are now abandoning ship in the wake of negative media coverage. Hundreds of bogus bylines have already shown up in the Houston Chronicle, Chicago Tribune, Chicago Sun-Times and San Francisco Chronicle, writes Poynter’s Jeff Sonderman.

Oops.

Journatic produces original content, too. It farms out local stories to U.S. freelancers who report by phone from 1,000 miles away while pretending to be at a desk in the newsroom across town. Reporters need to work quickly. Smith says he was offered $24 for an 800-1,000-word story, $12 for 500 words and $10 for a Q&A. Most of the work went unedited into major newspapers as if reported by a staff journalist.

I’ve copyedited or written news stories for a handful of major US newspapers over the past 18 months – the Houston Chronicle in Texas, San Francisco Chronicle in California and Newsday in Long Island, New York and others – yet it’s doubtful that any of the editors or senior executives for those news organizations could pick me out of a police line-up. In fact, it’s unlikely they could tell you a single personal detail about me or the other journalists behind the bylines of countless stories that appear in their print editions or on their websites, as provided by my employer.

A number of big dailies have quit using Journatic in the wake of recent unflattering coverage, but you can bet this model is far from dead. “Journatic’s approach — and the change it represents — is not going away,” writes Craig Silverman on Poynter.org. That’s because the economics of the news industry are in such dire straits. Whatever work can go offshore will go offshore as newspapers struggle to keep their print properties viable. With revenues spiraling down at 8% to 10% per year, quality will only get worse.

But it’s not just print. As the Times’ Carr points out, no one has yet cracked the code of making online local news profitable. In fact, Journatic’s stronghold is local media, which simply can’t afford to hire full-time reporters any more. So they lay off staff and farm out coverage of the local football team to a stringer. In Manila. (Hat tip to David Strom)

Tablet Salvation

The good news is that tablets will save the day, right? Possibly, but don’t count your winnings just yet. A new study by the Reynolds Journalism Institute and the University of Missouri finds that lots of people use their tablets to keep up with the news. In fact, news-reading is the fourth most popular activity by tablet users, behind communication, entertainment and Web search.  Users’ preferred source of information is news organization websites by a nearly 8:1 margin over social media. Interestingly, 53% of the 1,015 survey respondents said news-on-tablet was a better reading experience than ink-on-dead-trees, compared to just 18% who favor printed media.

The Public Relations Society of America suggests that tablets could revitalize the evening paper, since so much iPadding takes place after 5. But they’ll have to convince Rupert Murdoch of that. The media mogul has reportedly put The Daily on watch. The iPad-only zine is losing $30 million a year, The Politico reports, and its viability will be reassessed after the Nov. 6 election. This despite the fact that The Daily broke the story of Pink Slime, the ground beef additive that triggered a hysterical reaction in the U.S. earlier this year before the USDA stepped in and said that not only is the ingredient safe, but we’ve been eating it for a decade without knowing.

BTW, the most interesting item in the Politico story may be the comment by Martha Jo Peters, whose Facebook profile simply says, “Intend to live alone the rest of my life.” Evidently Murdoch is at least partly responsible. Sad.

Twitter’s News Ambitions

Mathew Ingram thinks Twitter wants to be a media company, and that means its role in the media ecosystem will get more complex. Twitter faces the same challenges that Google has been struggling with for several years: Its basic value is as a filter and organizer that quickly sends people elsewhere on the Web, but it’s hard to make money when your visitors are always leaving so quickly. In essence, the  publishing model that is failing so badly in the traditional media is the model that the biggest new-media startups are seeking.

Twitter appears to see its future as being some kind of newswire. In an interview with the Los Angeles Times, CEO Dick Costelo said, “Twitter is heading in a direction where its 140-character messages are not so much the main attraction but rather the caption to other forms of content.” Remember that quote, because it’s really important. It means that in the future Twitter wants to host more content instead of sending people away. But where’s the content going to come from? A lot of it will be from media companies, which have come to value Twitter as a traffic-driver but who may now have to re-evaluate that relationship. Like Google, Twitter is both their best friend and their worst enemy.

If you’ve noticed there are a lot more dead third-party Twitter sites lately, there’s a reason: Twitter is locking down its famously open set of application interfaces and trying to control more of the user experience. Ingram notes that Twitter has had great success with its mobile ads and promoted tweets, and it would like users to stay a little longer on its site. The acquisition of Tweetdeck, as well as several recent improvements to the Twitter.com user experience, are part of that campaign to capture more of the visitor’s time.

Miscellany

Another daily newspaper has joined the ranks of newspapers that are not-so-daily. The Anniston (Ala.) Star will cut its Monday edition beginning in the fourth quarter. Poynter’s Julie Moos has more than you probably want to know here.

Has your local newspaper trimmed frequency from seven days to something else? We’ve had a few inquiries recently from people looking for a list of such journals, but we’ve  never seen one. If you have, please provide a link in the comments, or simply tell us if your local paper has been affected. This will start a list of some kind.


A little good news: The New York Times is more than making up for declining advertising with growth in paid subscriptions. Ad revenue was down 8.1% in the most recent quarter, but circulation revenue was up 9.7%, thanks largely to the success of a new paywall program. Forbes reports that the International Herald Tribune and Boston Globe are also seeing promising results from their early paid digital subscription initiatives.

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This entry was posted on Wednesday, July 18th, 2012 at 12:46 pm and is filed under Advertising, Best/Worst, Business News, BusinessModel, Circulation, Future of Journalism, Journalism, Layoffs, Murdoch, Newspapers. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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