By paulgillin | December 18, 2009 - 10:38 am - Posted in Advertising, Business News, Layoffs, Murdoch, NewMedia, Newspapers, Paywalls

It would be nice to believe, as many newspaper executives apparently do, that brighter days are ahead. Kubas Consultants polled 500 newspapers executives in November and found that, on the whole, they believe the worst is almost over and the 2011 could actually see a return to growth. Most expect next year to be flat, and few foresee the need to outsource printing or reduce frequency, as many newspapers did this year. In fact, one in four said they plan to start specialty, niche or lifestyle products.

Alan Mutter isn’t buying it, and apparently neither is the man who produced the survey. Mutter e-mailed Ed Strapagiel, the Kubas executive who led the research. His opinion is that publishers’ forecasts of a .2% decline in ad sales next year aren’t realistic and he offers a list of reasons for their optimism. Our favorite: “Optimism is better than slitting your wrists.”

In the category of blind optimism, you can also include the Bureau of Labor Statistics. It forecasts that the newspaper industry will lose 25% of its jobs over the next eight years, making it the seventh fastest shrinking job market in the US during that time. The bureau doesn’t explain its methodology, but we suspect that a dart board is involved. The newspaper industry has shed 45% of its jobs since the 2001 peak and nearly 31,000 and just the last two years, according to the amazing Erica Smith. There is nothing on the horizon from a demographic, economic or competitive standpoint that suggests a turnaround in the business so the BLS forecast of a roughly 3% annual decline over the next eight years strikes us as a bit optimistic. Perhaps the prospect of an end to the suffering of the last 18 months is sparking some irrational exuberance.

Incidentally, these last two stories were reported by the industry trade journal Editor & Publisher, whose closure was announced last week in a sale of magazines by its former owner, Nielsen Co. A short story on the E&P website says that staff members plan to go ahead with a January issue and that E&P‘s 125-year run may not yet be at an end. “A number of outside companies and individuals have expressed interest in possibly keeping E&P going, so stay tuned for updates,” the story notes, cryptically.


For a more realistic look at the industry’s short-and long-term prospects, read Martin Langeveld’s thoughtful list of predictions for 2010. Among them are continuing slides in revenue of about 10%, disappointing performance for paywalls, a couple of publisher bankruptcies and likely consolidation by some of the survivors. There’s other good stuff there, too.

Miscellany

The BBC’s worldwide chief executive, John Smith, has come out in support of Rupert Murdoch’s plans to charge for news. The endorsement is notable because the BBC has been something of a foil for news organization’s paywall ambitions, since it provides high quality information – including international coverage – under a government subsidy. While Smith praised Murdoch’s lone-wolf advocacy for the “importance of having quality content,” he notes that paywalls will be extremely difficult to maintain. Separately, the BBC’s director general last month said the broadcaster had no plans to erect paywalls around its public service broadcasting websites.


Whether you like Jeff Jarvis or you hate him — and few people in the publishing industry feel ambivalent about the outspoken blogger — you have to admit that he walks the walk. In the spirit of total transparency and living in public, Jarvis has posted an update on his battle with prostate cancer. The good news is that he appears to be winning. Treatment, however, has come with its fair share of pain, and Jarvis outlines in great detail his problems with incontinence and impotence.

“I plan to say that publicness has benefitted me and that I wish the doctors would, in turn, be more public,” he writes. “The response I got from my posts here was helpful not only in the support I received but especially in the information I got from fellow patients who proceeded me and told me in frank and brave detail what I would experience.” We wish him a speedy recovery, whether in public or private, as we would all be worse off for the loss of his often blunt but always intelligent criticisms.

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This entry was posted on Friday, December 18th, 2009 at 10:38 am and is filed under Advertising, Business News, Layoffs, Murdoch, NewMedia, Newspapers, Paywalls. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

5 Comments

  1. December 18, 2009 @ 11:55 am



    I my best Brooklynese accent: Fuggedaboudid Bub

    If you’re looking for sales of commercial ad space to bolster your revenue/business model you’d better find a way to come up with instant, uncrowded advertising space, personalized feedback, order taking and shipment tracking.

    That’s what you’re up against. 1:N is dying. N:M is subsuming.

    Business has outgrown the concept of just advertising. Aggregation of news and printing it on paper for money is a mug’s game.

    Find a foundation or charitable trust to support the news because business is no longer interested.

    Posted by msbpodcast
  2. December 18, 2009 @ 12:02 pm



    The readers are the obvious ‘other party’ in the exchange of the journalist’s news for money. However, the term ‘charge’ in “charge for news” belies a failure to understand the paradigm inversion we’re currently going through.

    Though they believe their eyes deceive them, the newspapers are looking at a future in which they will no longer be in a position to ‘charge’ anyone anything. The only possible charge on the horizon that people are murmuring about is an Internet tax. And that’s something that goes oink oink in a flock.

    Those few who, rather than looking forward to rescue by pink angels, are actually wondering about making a financial exchange, will do well to tone down ‘charge’ to something more realistic like ‘invite a commission’. If you want readers to pay you, you have to stop treating your service as the air they breathe and cannot do without, and more like aromatherapy they sometimes find stimulating but can do without.

    So, journalists have to jump their sinking ships and find those few strange readers who like what they write so much they’ll willingly commission them to carry on writing.

    The new market is in journalism. Same as the old market. However, instead of producing journalism for nothing and charging readers for copies, readers commission its production and copies are given away for nothing. The same things are exchanged: the journalist’s writing and their readers’ money. It’s just inverted as if through a looking glass.

    Posted by Crosbie Fitch
  3. December 18, 2009 @ 2:01 pm



    The coming shakeout in the news industry is coming about because the news part of the business has come undone from the business part of the news.

    They used to be joined together by the common use of paper used to carry the messages of both. Now the use of paper is being superseded by the use of the internet.

    If we examine what the characteristics of paper are and the role that paper played before, we can detect why the internet and its N:M communications capability, is so much better that the 1:N communications capability of the various media up until the internet.

    The internet has displaced the media. The process is happening faster and faster.

    Each of the media has its own limitations of modality,
    • paper [being divided up into newspapers, magazines and books,] being now replaced by PDFs,
    • radio [being divided up into music and talk or some mixture thereof,] being now replaced with streaming and podcasts of MP3s and m4Xs, and
    • video [being divided up into movies, videos, {captured as DVDs ] being now replaced with .MPGs, MOVs and m4X.)

    The point of commonality being that all of the media are being replaced with an active component, to view/present and interact with, and a passive, transmittable component, the file format, which is perfectly reproducible and transmissible.

    The modality covers the gamut from low bandwidth, but requiring more active participation to capture symbols and interpret these, through medium bandwidth but requiring less active participation to interpret the streams of audio symbols, through high bandwidth and demanding full attention. (The first and third are visual while the second is auditory.)

    Claude Shannon was the person who boiled all of this down and created information theory which came only just prior to the creation of the internet and to whom we owe the current debacle (along with Bob Tailor who devised the ARPA network.)

    Combining Claude Shannon’s work with Bob Tylor’s work would have come to little but for the work of Robert Noyce, who was at Fairchild Semiconductor and Jack Kilby, who was at Texas Instruments and who solved the problem of component interconnection, which enabled the creation of microprocessors.

    The stage was now set the creation of HTML and later the creation of search engines, leading Larry Page and Sergey Brin, to create Google.

    This has culminated in the ultimate destruction of the media by tackling the communication problems of business from an entirely unexpected direction, one leading from consumers back to the producer when the entire media industry had been entirely focused on the other direction.

    The problems of the media are largely ones of trying to extract all of the advantages from computerization while never paying any attention to any of the problems that computerization had brought to every industry it had previously touched.

    Smart tools require smarter people to deploy and use them.

    What does this portend for the future?

    The media become the medium.

    It can be taken out of consideration when discussing the fruits which fall from it.

    Modalities will now range from the symbolic, to the audio, to the visual but they will be discussed in a different language: the mathematics of Claude Shannon.

    Copyright will be discussed in terms of the reproducibity and transmissibility without regard to the sensory modality of its consumption.

    The RIAA, the MPAA and ASCAP/BMI can now be disposed of and replaced by a single body which will oversee infringement. (This will leave the pirates out there with mixed feelings, I know. All those lawyers suddenly out of work, but being replaced by somebody else…)

    Aggregation will no longer be enough to justify existence.

    Gone are the days when one could add value by cutting and pasting.

    Posted by msbpodcast
  4. December 19, 2009 @ 12:53 am



    The newspaper execs elation may be premature for another reason.
    Newspapers had and have a pretty aggressive pricing strategy concerning
    advertising. Actually, they are known to fleece their ad clients.
    A 2004 article for instance describes the pricing strategy for the two Denver newspapers.
    The mentioned Rocky Mountain News meantime folded, logically.
    From the article:
    “…the combined circulation at the two dailies was 483,740 copies Monday through Friday for the six-month period ending Sept. 30. That’s down 11.6 percent from the same period the previous year.
    ….
    Meanwhile, the price for a quarter-page ad to run in both papers has gone up from about $8,300 to $18,400, according to published rates in Editor & Publisher. Partner that increase with the dwindling circulation numbers and the cost-per-thousand subscribers — a figured used by advertisers to determine how much bang for their buck they’re receiving — has gone up 189 percent.
    …..
    But advertisers aren’t blindly paying to place their ads in the dailies, Thomas said. They are weighing a host of issues these days, such as readers’ habits, shrinking attention spans and what they want to accomplish with their ads, he said. ….
    http://denver.bizjournals.com/denver/stories/2004/11/08/story4.html

    What is remarkable now is that the media, newspapers, on the one hand are
    holding monologues, only they are talking, having a say, while on the hand
    advertisers are completely silent.
    Until about two years ago their were frequently critical comments from
    business people, those doing actual ad business with them, to be found here
    and there. Not anymore.
    All that is happening since then is that businesses are cutting back on their
    ad expenses, in the first place for newspapers (see the continuing data).
    They do so in total silence, no word, just cut down and down again.
    That silence, no word from that side, is an interesting phenomena.
    In other words, businesses obviously would not even talk to them anymore –
    while the media are trying to pull off some kind of stunt, misleading all and
    everyone occasionally concering such matters.

    Posted by Joe
  5. December 19, 2009 @ 1:06 pm



    Hey Joe,

    I’m so friggin’ glad that someone else gets it.

    Businesses aren’t talking to their old advertising outlets for the same reason that people don’t keep up with their old high-school friends in another town/state: they’ve already moved on..

    1:N advertising in newspapers (and radio and TV) is on a downward slope, N:M advertising/marketing/sales/shipment tracking on the internet is on an upward slope.

    The day it gets more expensive to keep on using 1:N media to accomplish the same thing for cheaper using N:M media is the day that the dollars stop coming.

    That day has come and gone for lots of companies.

    Posted by msbpodcast