The cure for the newspaper  industry’s ills was once thought to be a “hyper-local” focus, but that’s not proving to be the salve for New York City, which is suffering an unprecedented decline in local news coverage. The latest casualty is the New York  Daily News, which on Monday said it would cut its newsroom staff by half. The Washington Post points out that this means that a paper that employed 400 journalists in 1988 will have a reportorial staff of just 45 when the latest cuts new owner Tronc take effect.
U.S. newspaper employment has fallen by 55% since 2000, from 424,000 people to 183,300 in mid-2016, according to the Bureau of Labor Statistics. Ironically, the cuts are hitting hardest in New York, which is one of the media capitals of the world. Politico notes that The Wall Street Journal shut down its own experiment in hyper-local journalism called “Greater New York” in 2016 while The New York Times has cut back on metro coverage and the Village Voice shut down its print edition last year. Newsday pulled out of Manhattan long ago and no one knows about the condition of The New York Post, whose finances are closely held secret of owner Rupert Murdoch.
BuzzFeed Editor-in-Chief Ben Smith, who is a veteran New York reporter, summed it up best, telling the Post, “Politicians know nobody is watching in a state where everything from economic development to the electoral system is plagued by systematic corruption.” The Daily News has won 11 Pulitzer Prizes, including one last year for its work with ProPublica on the abuse of eviction rules in New York City.
Arthur Browne, who served as editor-in-chief of the Daily News last year, told the Daily Beast last year that the borough of Queens, which has 2.3 million residents, now has no full-time court reporter, despite the fact that it experiences 35,000 major crimes a year and that the local courthouse hears 200,000 criminal cases annually.
Robert York, the Daily News‘s new EIC, asked the staff for 30 days to define a new strategy, which was apparently not in place before the firings were announced. York has a 20-year-plus journalism career, including some recent successes with the Allentown, Pa. Morning Call, but his background has been mostly limited to features and photography, and he has no experience in the rough-and-tumble New York market.
Among the casualties was former Daily News EIC Jim Rich, who had reportedly resisted demands for further staff cuts. Rich didn’t respond to media inquiries, but issued this tweet, which sort of sums up the situation in NYC right now.

If you hate democracy and think local governments should operate unchecked and in the dark, then today is a good day for you.

— Jim Rich (@therealjimrich) July 23, 2018

Cuts are expected at other Tronc papers, which include The Baltimore Sun and The Chicago Tribune, but Tronc CEO Justin Dearborn said they wouldn’t be as draconian as they were at the Daily News. 

Image: Pixabay

With the media world buzzing about the fake news engine that is Cambridge Analytica, news about a new Google initiative to support quality journalism might easily be overlooked. The multi-faceted investment covers everything from website analytics tuned to the needs of publishers to machine learning tools that identify potential subscribers.
Of particular note is Subscribe with Google, a service that enables readers to easily subscribe to a news source using their Google accounts, with payments handled automatically through Google’s established payment mechanisms. The search giant handles all of the back-end accounting securely and lets publishers handle all subscriptions in one place. The company is also applying machine learning to identify revenue opportunities for publisher with its Insights Engine Project, which delivers better ad targeting and peer comparisons for ad performance.
A particular interesting new dimension of Insights Engine is a feature that identifies readers who are likely to become subscribers and helps publishers to optimize offers when they are most likely to pay. With big papers like The New York Times and The Washington Post collectively boasting more than 4 million paying subscribers, this is an opportunity for small publishers to cash in on the paywall trend.
The problem Google hasn’t conquered yet is how to identify and elevate trustworthy information ahead of fake news. If it can figure that out, it can perform a much greater service than just identifying revenue opportunities for publishers; it can restore civility to our national conversations.

“Research has shown that the downside of powerful, centralized networks is their susceptibility to being subverted and exploited,” writes The Wall Street Journal’s Christopher Mims in a fascinating analysis of why social networks, which were supposed to challenge hierarchy, have reinforced it instead.
Delving into network theory, Mims explains why networks that start out with flat, distributed power structures ultimately, become vertical hierarchies. That was true in the Bolshevik revolutions of 1917, when a circle of insiders around Joseph Stalin created a hierarchy within the supposedly distributed network of citizens who overthrew the Czar.
It is also true in the 16^th century, when the printing press and Martin Luther’s vernacular versions of the Bible, rather than democratizing access to information, led to nearly 200 years of civil war. The impact of the internet has often been compared to that of Gutenberg’s invention.
“Even when networks aren’t architected for this kind of control, they tend to organize themselves in ways that lead to disproportionate influence by a handful of their members,” Mims writes. “When any new person or entity joins a network, it is likely to attach to the most visible hubs, making them even more influential.”
Facebook magnified this effect by designing its algorithms to optimize for engagement rather than for truth. Russia understood this, and brilliantly exploited it to foster confusion and misinformation in the 2016 election.

---

Pro Publica is using fire to fight fire. Co. Design reports on the work that a team at the nonprofit news organization has been doing to employ the tools of big data to see if companies like Amazon and Facebook are living up to their own policies.
The team crowdsourced the process of identifying examples of people who felt their free-speech rights had been violated by Facebook, or that they had been denied information because of some arbitrary decision. Facebook publishes its censorship rules, but verifying compliance is nearly impossible. That’s what the big data team at Pro Publica figured out a way to do. It used a Facebook Messenger survey to gather input from the crowd and then combed through the most puzzling cases by hand. In the end, Facebook had to admit not following its own policies in 22 examples brought forth by members.
The Pro Public team’s next step will be to investigate how political ads work by using a browser plug-in that scrapes Facebook ads and analyzes them using machine learning. The team has already published some of its initial findings, including the fact that many political ads don’t carry the required disclaimers or candidate endorsements.

Image: Wikimedia Commons

Despite a Pew Research study‘s finding last year that two-thirds of Facebook users rely on the site for news, the COO of the world’s largest social network insists that Facebook isn’t a media company.
“At our heart we’re a tech company… we don’t hire journalists,” Sheryl Sandberg told Axios. Although Sandberg admitted that her company made mistakes in allowing Russian organizations to buy ads to try to influence the 2016 U.S. election, her refusal to admit the much larger and more damaging role Facebook played by enabling the dissemination of fake news displays the kind of arrogance you only find in Silicon Valley. Since when does the people you hire define what you are?
According to Wikipedia’s definition of media as “the collective communication outlets or tools that are used to store and deliver information or data,” Facebook is as much a media company as NBC or The New York Times. The key word is “deliver.” Facebook is not only the world’s most powerful news delivery medium, but its algorithms are fine-tuned to give its members the information that interests them most. Isn’t that also what newspaper editors do?
Come to think of it, no. Newspaper editors attempt to present their readers with the information they think those readers need to know, regardless of whether they want to know it. Facebook feeds its members only stuff in which they’ve demonstrated an interest. The more defined your place on the political spectrum, the more Facebook will shovel material at you that conforms to your view of the world. News organizations seek to create an educated populace. Facebook creates echo chambers.
One solution might be to change those algorithms to give Facebook members a more balanced view of the world. But that isn’t in Facebook’s best interests. As long as it continues to deny its role in shaping public opinion, it can justify changing nothing. Because, you know, it’s a tech company.
This isn’t about algorithms; it’s about common sense. The social network now says it’s working on elegant technical solutions to flagging fake news, but a simpler solution last year would have been a banner at the top of every page saying, “Do not believe something just because you read it on Facebook.” Be skeptical, check facts and don’t share lies. And if you do, there will be consequences.
Curation existed long before the internet, but it was the Web that made it a legitimate form of media. Is Drudge Report not media because it lacks original content? The stories it chooses to curate, and the places it assigns them on the page, are a form of editorial because they help shape public opinion. The fact that Facebook uses code instead of human editors to make those decisions doesn’t change the outcome.

After a spate of closures and layoffs in the latter part of the last decade, the newspaper industry appeared to find its footing over the past few years. But now that oasis of stability may be drying up.

Hard times are hitting some of the most resilient titles, and the trend indicates that things are only get worse. The decline in print advertising revenue at The New York Times has accelerated from 9 percent in the first quarter of 2016 to nearly 19 percent in the most recent quarter, writes Mathew Ingram in a Fortune story ominously headlined “The New York Times Scrambles to Avoid Print Advertising Cliff.” In announcing its financial results, the paper said it expects the falloff to continue “at a rate similar to that seen in the third quarter,” or at least 19% per quarter.

The only good news in that statement is that sequential 20% declines take a smaller total dollar bite out of revenues with each iteration because the base number is smaller. But that’s the only good news. If the last three quarters are any indication, the Times advertising business is in free-fall. The paper has done a better job than anyone of growing its base of circulation revenue and increasing its digital advertising business, but both pale in comparison to the size – and profitability – of the print advertising business.

Almost in tandem with the Times’ disappointing financial results, The Wall Street Journal announced that it will consolidate sections and lay off staff as it seeks to stabilize its print business while it scrambles to grow its digital operations. Last week, the Journal laid off the staff of its “Greater New York” section and offered buyouts to 450 employees. Only 48 took the package, indicating that things could get ugly soon.

A new “Business & Finance” section will combine the Journal’s current “Business & Tech” and “Money & Investing” sections, Reuters reports. New York coverage will be reduced and moved into the main section of the newspaper.

The Journal has proved more resilient to the downturn than most print newspapers because of its pricey subscriptions and well-heeled readership. When the most optimistic statement management can make is that the paper is seeking to create a “print edition that can stand on a sound financial footing for the foreseeable future,” that doesn’t sound good.

Speaking of Reuters, the company completed this week’s morbid hat trick by announcing that it will lay off about 2,000 workers at a cost of $250 million as part of a “transformation” of its business. The silver lining – journalistically speaking – is that Reuters said none of the cuts will be in the newsroom. Instead, they will be focused in financial and technology operations that primarily serve financial services companies. Things have been tough in that business amid low interest rates and pressure from new-economy competitors. Reuters has the advantage of being a diversified company with a strong position in financial markets, but revenues are flat and there’s no indication of where additional business will come from.

The idea of convincing readers to pay a few pennies to read a single article has been largely scoffed at over the years, but Blendle may have cracked the code, at least a little bit.
Launched two years ago in Europe, Blendle says it just surpassed the one-million-member mark. It’s getting hundreds of thousands of monthly visitors and 20% are converting into paying customers. Users will have read more than 20 million articles on Blendle by the end of the year, Managing Editor Michaël Jarjour told TechCrunch. It’s backed by The New York Times Co. and German publisher Axel Springer, and features content from an assortment of big-name publishers.
Users pay a few pennies to read an article and have the option of requesting a refund if they don’t like what they see. Refund requests must include a reason, a hitch Blendle adds to prevent abuse. Jarjour said the company employees 15 journalists who comb the Web looking for worthwhile stories that are hidden behind paywalls.
Blendle has elements of Flipboard, Nuzzel and other social news services in the form of human-curated feeds. If users provide access to their social network accounts, Blendle will add durations from friends into the news feed. A new service called Blendle Premium Feed is powered by a combination of algorithmic predictions and recommendations from friends.
So what will people pay to read? Not news, apparently. “We’ve seen that our users don’t like to spend money on the news,” wrote co-founder Alexander Klöpping in a Medium post announcing the company’s entry into the U.S. market. “What our users do like to read is investigative reporting, revelatory background articles, newsworthy analysis and hard-hitting interviews.”
 

John Oliver’s sendup of the news industry for preposterous ideas like Tronc is both hilarious and sad. Oliver digs into the video history bag to remind us that Sam Zell really did own a newspaper company at one point and thought that stories about cats could possibly support stories about crime and corruption. He also calls out Sheldon Adelson for instructing journalists at the Las Vegas Review Journal not to post negative stories about him or any of his properties. And the mashup of “Spotlight” with the investigative crew assigned to dig up everything it can about racoon kittens is flat-out genius. The quotes from Washington Post Editor Marty Barron about the workload news reporters have to process these days is poignant.
They aren’t laughing at the Newspaper Association of America, though, which called Oliver’s piece “petty insults” and noted that the humorist offered no solutions. Fair enough, but is it the job of a comedian to offer solutions? Pointing out absurdities like the click-bait headline atop this post is the first step toward solving problems, and thank goodness we have people like Oliver and Jon Stewart to point out what a circus media has become. It’s sad that comedians have to play the role of fact-checkers in this industry, but at least someone is willing to call out the emperor for having no clothes.

Three years ago a former greeting card executive and his partner bought the Orange County Register and a handful of smaller newspapers. Operating as Freedom Communications, they stunned a gasping industry by declaring their intention to invest heavily in news.

A year later, the experiment showed signs of bearing fruit. As we wrote in July, 2013, “Newsroom staff is up to 360 from a low of 180 when Freedom took over. The Register routinely publishes daily issues that are nearly twice the size of its nearby rival, the Los Angeles Times. Page counts have been increased by half, color expanded and even the quality of paper improved.”

That was then. Two years later, the Freedom experiment can be judged a failure as Freedom filed for bankruptcy protection as part of a management-led plan to acquire the paper. The plan will end the active role of Aaron Kushner, the greeting card magnate who said two years ago that he was in the game for the long haul and who even eyed a buyout of the Los Angeles Times, whose parent Tribune Co. was itself bankrupt at the time.

A group led by Rich Mirman, who is the current CEO and publisher of Freedom, is bidding to acquire the company and reorganize its finances. Mirman said there will be no job cuts and that all bills will continue to be paid during the reorganization. He also said the company should turn a profit this year after losing more than $40 million over the past two years.

Nowhere to be seen in the deal is Kusher, the newcomer with a vision who spoke so forcefully about the value of newspapers two years ago. His plan always was a long shot, but he was at least a positive voice in an industry that’s so shrouded in hopelessness these days. He was one of a dwindling list of rich executives that includes Warren Buffett, Jeff Bezos and John Henry, who seem to believe that journalism is still worth the investment. Why is it that the only people who have faith in the newspaper industry are people who have no background in newspapers?

 

The New York Times marked a milestone of sorts yesterday with the announcement that it has passed the one million paid digital-only subscriber mark, less than four-and-a-half years after launching its paywall. The milestone is validation that paywalls can work, especially if you’re The New York Times.

The news comes less than two months after the World Association of Newspapers and News Publishers reported that global newspaper circulation revenues surpassed advertising revenues for the first time this century (good slide presentation here). The association didn’t say when was the last time circulation was the industry’s biggest revenue contributor – or even if that information is known – but we’d guess it was more than 50 years ago.

The newspaper industry became addicted to advertising in the 1960s – and thus began its downfall. With 80% of revenue coming from advertising by the late 1970s – and circulation functioning as a loss-leader to build audiences – the business had all its eggs in one basket. When the Internet tore a hole in that basket, there was nowhere else to turn.

A painful decade later, there is evidence that newspapers are rebuilding online around the paywall model. They have lost a lot of blood, though, and circulation revenue will never be as large or profitable as advertising was. Wired notes that only one-third of the Times‘ revenue comes from digital subscriptions. It will need a lot more subscribers – or alternative revenue sources – to keep the business stable.

This promo for “The Monsters of a Rapidly Changing Media Landscape” conference in Shreveport is perfect. The buzzwords, the phrasing, even the clothes are perfect. Our favorite line: “I like the feel of the CD. I like to hold a CD in my hand. I put it into the stereo with two hands, OK?”
Stick around for the last 30 seconds.