We’ve been thinking hard about how to defend of the Philadelphia Inquirer‘s decision to suppress most of its non-breaking news until after it has appeared in print. It is so easy just to dismiss the policy as bone-headed and retrograde, as Jeff Jarvis, Steve Outing and Steve Boriss quickly did. Perhaps there is some counter-intuitive brilliance here, we reasoned. After all, the Inquirer hasn’t much to lose. Its owners are nearly in default on their debt and newsroom staffing has been slashed as badly as any paper in the country. Perhaps there’s merit in challenging the conventional wisdom that all news has to be free. Perhaps, by bucking the conventional wisdom, the Inquirer can motivate Philadelphians to get excited about their hometown paper again. Perhaps people will actually want to subscribe to the Inquirer because they can’t afford to miss the great journalism that’s there. Perhaps the print-first philosophy is so retro that it’s actually on the leading edge.

Naaah. It’s just a dumb policy. Here’s the basic misconception in Inquirer ME Mike Leary’s thinking: people are hungry for information and they’ll go to where the good information is. The Inquirer staff produces great features and investigative reports that Philadelphians just have to read. If those reports are denied to them online, they’ll have to get the newspaper, because they just can’t afford to be without that information.

Here’s the reality: people are swimming in information. They have so much information at their fingertips that they can no longer tell where it comes from. RSS readers, iGoogle and MyYahoo pay little attention to brand or news source. Americans’ biggest problem is keeping their heads above the water as the deluge of information increases. There is little in the Inquirer or any other major newspaper that is so relevant to people’s daily lives that they must have the information the minute it’s available. If they don’t get it from the print edition, they’ll hear it on the radio or read it in an e-mail newsletter or catch it on their FriendFeed if other people think it’s important.

The Inquirer policy is rooted in the outmoded conceptions that information is scarce and media brands are important. The reality is that information is plentiful and media brands are becoming irrelevant. Maybe the Times or the Journal could pull off a policy like this, but they aren’t dumb enough to try. The Inquirer apparently is.

Media Arrogance on Parade

A couple of media watchers are taking the press to task for ignoring seemingly important stories. Mark Potts excoriates mainstream media for ignoring the John Edwards affair. Much of their indifference was apparently due to the fact that the National Enquirer broke the story. Media snootiness about the supermarket tabloids is legend, but in this case, the Enquirer‘s reporting was about 95% accurate. Plus they had photos, for goodness sake. This is classic media arrogance. If the story wasn’t reported by a ‘real journalist’ (there’s that term again), then it isn’t to be trusted. But there are fewer and fewer real journalists out there, so where are you going to get your news? Perhaps it’s time to redefine your definition of credible source.

Mark Hamilton comments on the indifference of the Canadian press to the outbreak of fighting between Georgia and Russia. Even though the conflict has taken more than 1,000 lives, the local media – and newspapers in particular – have been more focused on the opening ceremonies of the Summer Olympics. Here’s the herd at work: send your limited reportorial resources on a two-week junket to Beijing for an event that’s being covered by thousands of other reporters. What’s the point of that? What insight are your reporters going to mine from a press conference with some gold medal winner than the other 75 reporters in attendance have missed?

These two cases are emblematic of newspapers’ inability to reinvent themselves. Facing a near total collapse of their business model and unprecedented pressure to do more with less, major news organizations are responding by doing more of what they’ve always done. Maybe it’s human nature, but it’s not the kind of behavior that will pull them out of the death spiral.

Business News

Gatehouse Media, whose stock price has dwindled from $22 a share to 69 cents, reported a $430 million quarterly loss, reflecting a huge writedown in goodwill. The company owns a portfolio of small-town papers that are outperforming industry averages, but it is burdened by $1.2 billion in debt and could default soon.

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Hearst Corp. bought the Connecticut Post and seven other non-daily newspapers from MediaNews Group. While this might appear to be the early rustlings of a consolidation trend brought about by plummeting values, Mark Potts thinks it’s actually a harbinger of a Hearst plan to sell the San Francisco Chronicle to MediaNews. The question is why anyone would want it.

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Lee Enteprises is shutting down the South Idaho Press of Burley, its second-largest Idaho daily, along with two weekly papers in the area. The Press has a circulation of 4,000. It will become a section in the Times News, which is Lee’s Idaho flagship. Lee said 14 people will lose their jobs.

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Sun-Times Media Group Inc. lost $37.8 million in the second quarter, and CEO Cyrus Freidheim said he’s planning new cost cuts to help cope with steeper-than-expected declines in revenue. Some of the cost-saving methods under consideration at the Sun-Times include outsourcing classified ad sales and some financial and administrative activities; cutting corporate costs through possible privatization or de-registering of stock, and changing the size and format of its papers. The company also said it plans to explore real estate sales to generate cash.

And Finally…

Editors Weblog reports on The Guardian‘s plans to deliver its product on e-ink. That’s a thin, flexible computer display that can be rolled up and stashed in a shirt pocket. When combined with an Internet connection, e-ink could make it possible for a constantly updated newspaper to be delivered electronically in a format that readers could conveniently carry around. E*Ink Corp. has been working on this stuff for a decade. The Guardian estimates it’ll be eight years before the technology is commercially practical.

Nine summers ago, I left a job running a 75-person newsroom to become the sixth employee at an Internet startup. That was the thing to do in the late 90s, when stock options were plentiful and the Internet promised boundless reward. By 2002, that had all changed, and many dot-com entrepreneurs were slinking back to their old employers, asking if they could have their jobs back.

That didn’t happen to me, though. The media startup I joined, TechTarget, actually grew through the technology nuclear winter. It went public last year (although the stock has recently been sucked down by the media stock malaise) and now employs about 600 people.

One thing we did early on that challenged conventional wisdom was to tear down walls between advertising and editorial. At previous employers, it was accepted that sales people and editors not only never talked, they were often openly hostile toward each other. My new organization didn’t have cultural barriers like that, so we experimented with a more collegial process.

Ad sales and editorial people sat together in biweekly meetings to discuss story budgets and the sales climate. Things got pretty testy sometimes, but the debate was open and honest. Instead of calling people names behind their backs, each side shared stories about its successes and challenges. Over time, the relationships grew to be, if not chummy, at least respectful.

Once people respected each other, they began to work collaboratively. Management urged along the process by putting in place a bonus plan that rewarded everyone for a business unit’s financial success. Sales reps and editors openly batted around ideas for products that would have both advertiser and reader appeal. They came up with a lot of innovations. It turned out that collaborating didn’t mean infringing. Boundaries were still respected, but conversation wasn’t prohibited. Imagine that.

It was my job as chief editor to insure that the quality and integrity of the editorial product weren’t compromised. In five years in that role, I never once felt that my principles were violated. If ever there was a challenge, I appealed to the CEO, who always came down on the side of editorial quality.

Incidentally, a handful of people switched groups over these five years, including a few editors who realized their true calling was in sales.

This experience came to mind today reading Chris O’Brien’s Five Steps to Foster Innovation in the Newsroom. Among them: “Find new ways to get people from different areas to work together. This includes editorial and business side (Sorry, but it’s long past time to kill this sacred cow).”

Amen to that. Stick a fork in that well-done bovine. Building moats between the revenue side and the product side was excusable when profits were healthy, but now is the time to discard assumptions. Ad sales people aren’t contagious and talking with them won’t make you compromise your principles. If it does, then you have bigger problems.

Traditionalists are still resistant. Over at the San Francisco Chronicle, whose future is probably less secure than any major metro daily’s, “real journalists” are appalled about the decision to give former mayor Willie Brown a column because of Brown’s history of alleged self-dealing. People who aren’t disgusted by Brown’s column “are people who don’t put journalism first,” says one insider.

Puh-leeze. Giving a popular ex-mayor a column sounds like a pretty interesting way to spur circulation. And if the purists have a problem with that, have it out in public. Let the Chron columnists and bloggers debate the issue in front of everyone instead of grousing in the men’s room. Too many editors continue to use the shield of journalistic integrity to duck new ideas and then complain to each other instead of airing their opinions in public.

Newspapers need strong chief editors who support collaboration. They also need publishers who will rally to the side of quality journalism when a dispute occurs. Reporters and editors need to get over the old biases that never made much sense to begin with. I can’t think of another industry in which the people who sell the product are at such odds with the people who make the product. If you can make a persuasive case for maintaining this rigid separation, please contribute to the comments section. I just don’t see it.

The Futility of Corporate Secrecy

There’s an interesting discussion going on over at the Gannett Blog. On Wednesday, Editor Jim Hopkins picked up on an item in one of the Gannett titles that said corporate finance and accounting operations were being consolidated and moved to Indianapolis. He suggested that recent cutbacks at other Gannett holdings point to layoffs of as many as 2,300 people, or about 5% of Gannett’s workforce.

Blogs are a petrie dish for speculation, so when Hopkins asked reader for input, they responded. Gannett folk from Asheville, Detroit, Louisville and elsewhere are jumping in with their local version of layoff rumors. It sounds like something’s coming, and it isn’t good. Absent from the discussion is Gannett, which certainly should be aware of this popular site. If the rumors are false, why isn’t someone from corporate stepping in and correcting them? Perhaps it’s because the rumors are true. Absent Gannett’s voice, people will tend to believe that silence is confirmation.

Go East, Young Journo

Media markets in India are booming, thanks to the surging economy and the growing middle class, and some discouraged US journalists are picking up and moving east. New dailies and magazines are popping up every week and they’re hiring. Some TV stations are paying ex-print reporters up to $180,000 to go on-air, and that kind of money goes a long way in India. Five recent graduates of the Columbia University Graduate School of Journalism recently joined the Hindustan Times and say the experience has been great and the opportunity is greater. One expat says he turns down two or three assignments a month. “I’d like to see more freelancers move to India. There are too many stories to cover and just not enough time to get to them all.’

Miscellany

San Diegans may have reason for cautious optimism. The owner of a local TV station says he may make a bid for the distressed Union-Tribune. Michael D. McKinnon was a print publisher back in the 50s and 60s and he doesn’t want to see a local institution in the hands of an outsider.

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Just because it’s user-generated, doesn’t mean it’s profitable. In May, we told you about Everywhere and JPG, two new magazines from 8020 Media that break the mold by deriving most of their content from readers. Well, it turns out that Everywhere wasn’t everywhere with advertisers, so 8020 has shuttered it after only four issues in order to focus on JPG. Management prefers to use the term “on hold” and said it’s still committed to the model. Interesting side note: only two editors lost their jobs.

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While owner Blethen Maine Newspapers continues to seek a buyer, the Portland Press Herald/Maine Sunday Telegram bleeds. An unspecified number of people have been laid off in the fourth round of cuts in a year. The publisher is also adjusting trim size and consolidating some sections to save money on paper. Employee solidarity helped mitigate the pain; workers volunteered to take time off so that jobs wouldn’t be eliminated.

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Management at the Los Angeles Daily News apparently thought that one way to boost sagging morale would be to implement a dress code. Employees didn’t agree. The idea has been scotched.

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The McPherson (Kan.) Sentinel becomes the latest daily to eliminate its Monday edition. It will publish five days a week. Mondays are notoriously poor for ad sales.

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James Cogan says it’s a great time to get into the newspaper business because chaos is a good time for innovation. We wish there were more people with his positive attitude.

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Charles Apple has a practical, whimsical and uplifting essay on advice for the recently laid-off. Our favorite: “Your editor didn’t want to lay you off. Seriously. Make him/her a reference. Even if you have to apologize for throwing that potted plant during your HR interview.”

Demonstrating the power of diversification, News Corp. bucked industry trends and posted a profit of $5.8 billion for the fiscal year just ended, buoyed by a string of box office hits, robust online growth and a strong Australian economy. However, CEO Rupert Murdoch warned of tough times ahead in the US market and said News Corp. will step up investments overseas to compensate.

Robust retail and real estate advertising at the company’s Australian, Daily Telegraph and Herald Sun newspapers in Australia helped burnish profits, which were up by 21%. While US and UK performance was weak, The Wall Street Journal grew online subscriptions by 88%, results that stand in stark contrast to the prevailing wisdom in the US that newspaper publishers should give away all their content for free. MySpace.com also had a pretty good year, Murdoch said, without elaborating.

News Corp. is looking to India and China to fuel growth as western economies stumble. India’s GNP is expected to grow 7% in the next year, Murdoch said, and the company is responding by investing $109 million) in six new television channels there.

News Corp. has invested wisely in its online and broadcast diversification strategy over the last decade and the investments appear to be paying off. With the US newspaper industry flat on its back, News Corp. has managed to find growth in areas that US publishers largely shunned in better days. As a result, the company expects operating profits to grow another 4% to 6% in the coming year.

Despite the rosy results, Wall Street continues to debate the wisdom of the Murdoch strategy. A detailed piece in Variety questions whether the mogul overpaid for the Journal last year and whether weakness in US newspaper stocks could tempt Murdoch to go on an ill-advised buying spree. The piece lists a number of investments Murdoch has made in the Journal and in the Dow Jones wire services that he acquired and notes that News Corp. is the only publisher that has appeared to be impervious to the layoffs and downsizing that are afflicting the competition.

Good news, right? Not exactly. News Corp. shares are off 40% this year and some analysts cluck that Murdoch has failed to outline a compelling vision for integrating the Dow Jones properties with his other holdings. Murdoch remains optimistic, but cautious. “This is destined to be an extra-inning game, and to use an overly used metaphor, we’re only in the first inning,” he said recently.

Tuesday brought a welcome respite from the pummeling newspaper stocks have taken recently. Buoyed by a 332-point rally in the Dow, most domestic newspaper companies enjoyed share price increases of between 3% and 10%, with Media General leading the way.

Ombudsmen Becoming History

When I was a ninth-grade student in 1972, my English teacher presented us with “ombudsman” on a Word Power quiz. I scanned every dictionary I could get my hands on, but couldn’t come up with a definition of the term.

Ombudsmen, however, were destined to become fixtures at newspapers over the next few years. These reader representatives were all the rage in the 1970s and 80s. The idea was to take an aging reporter and make him or her a sort of armchair quarterback for the editors, fielding complaints from readers and rendering judgments that carried no particular weight but hopefully made the quality of journalism better.

Now it appears that ombudsmen role may be destined for the scrap heap. Karen Hunter, the Hartford Courant‘s reader representative, pens her farewell column as her job is eliminated in the current round of layoffs.

“Of the nearly 1,500 newspapers in the United States, only a few dozen have ombudsmen and the number is decreasing,” Hunter writes. “Over the past year, reader representatives/public editors/reader advocates/ombudsmen have been reassigned, retired or bought out at the Baltimore Sun, the Minneapolis Star Tribune, the Orlando Sentinel, the Fort Worth Star-Telegram and the Palm Beach Post. She points readers to the Organization of News Ombudsmen, which carries on the fight.

Pam Platt, reader representative at the Louisville Courier-Journal, also writes an obit for the position this week. The Courier-Journal was the first US paper to employ an ombudsman 40 years ago, she says, but the job doesn’t make sense any more in the current economic climate. Platt will write editorials and columns instead.

Layoff Log

• The San Francisco Chronicle, which has been losing money for years, continues to be the poster child of industry problems. Now it’s offering a buyout package to 125 employees. The paper has shed half its editorial staff since 2000 and is reportedly losing about $1 million a week. BusinessWeek‘s Jon Fine last year predicted that it could be the first major metro daily to fold its print edition.
• The Sarasota Herald-Tribune laid off 33 staff on Tuesday, with cuts coming about equally from the editorial and business sides. Parent company New York Times Co. didn’t elaborate.
• The soap opera at Blethen Maine Newspapers continues, with an exasperated publisher of the Portland Press Herald/Maine Sunday Telegram denying reports that the paper could be shut down without a sale. Charles C. Cochrane said that option was a worst-case scenario outlined in recent court documents and is highly unlikely. Blethen is trying to sell its Maine portfolio to a group of local investors.
• The Jackson (Miss.) Clarion-Ledger will reduce its headcount by 20 people, or about 5% of total staff. Romenesko has a memo from the publisher outlining all the usual reasons.
• The Cincinnati Enquirer is asking 50 non-union staffers to take a buyout and says layoffs may be necessary if there aren’t enough takers. Parent Gannett Co. just reported a 36% drop in profits on a 10% revenue decline.
• The good news is that the LA Times ended up shedding fewer jobs than expected: 135 instead of the planned 150. Editor Russ Stanton writes an inspirational memo to his colleagues, exhorting them to continue to innovate despite their depleted numbers.

Miscellany

Los Angeles Times veteran William Lobdell left the paper after 18 years last week. He posts a bitter 42-point analysis of the mistakes the paper made, particularly on the business side. Lobdell says Sam Zell isn’t the villain, but the Tribune CEO did accelerate the company’s s fall. He doesn’t mince words in his criticism of Tribune Chief Innovation Officer Lee Abrams, whom Lobdell clearly considers to be a dunce. He also refers to “good sources” who say another 150-200 layoffs are coming. Lobdell doesn’t see much hope for the Times barring a Herculean effort by the editorial and business operations to reinvent the paper. He’s happy he’s not sticking around for that. Lots of comments on this entry.

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The Newspaper Association of America Newspaper says newspaper websites attracted more than 40% of all unique visits on the Internet in the second quarter of 2008, a 12.2 percent increase over the same period a year ago. The custom analysis prepared by Nielsen Online also says total page views averaged three billion per month in the period. Considering that Google alone reportedly processes more than 25 billion queries a month, the 40% figure seems questionable.

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The Audit Bureau of Control (ABC) made a bunch of changes to its procedures in an effort to “simplify ABC rules, reduce audit costs and provide greater pricing and marketing flexibility to publishers,” the organization said in a press release. Publishers have been clamoring for ways to boost their numbers in a period of declining circulation and the ABC adjustments appear to give them a bit more latitude to do so.

And Finally…

There’s no question that the 81 squares that make up a Sudoku grid have been one of newspapers’ greatest friends over the last decade. Many people buy their daily newspaper just to get their fix. True achievers will have a chance to compete for fame and fortune at the 2008 Philadelphia Inquirer Sudoku National Championship on October 25 in the City of Brotherly Love. The Inquirer has even launched a line of apparel honoring the pencil game, but is doing what it can to prevent sales. The Sudoku apparel web page invites visitors to click on the image of a shirt to make a purchase, but none of the images are clickable, meaning that there is effectively no way to make a purchase. Click the image at left to see how it’s done.

Washington Post Co. dipped into the red for the first time in its 37-year history, reporting an operating loss of $2.7 million in the second quarter.  A big factor was the cost of an $87 million buyout program intended to reduce headcount, but the newspaper division lost money on operations for only the second time in the company’s history. The $5.3 million operating loss came on a 22% dive in print  advertising revenue. Online advertising was up an anemic 4%. Fortunately for the Post, it owns the Kaplan education company and some cable and Internet franchises. Unfortunately, it also owns Newsweek, which had an operating loss of $3.7 million for the quarter.

Troubles in Hyper-Local Land

Some people say the savior of the newspaper industry is to go hyper-local, but remember to tell that to the ad sales people, who could make a lot less money. The Wall Street Journal reports on the sliding market share of newspapers in their own local ad markets, where one researcher says they now control only 27.4% of the business, down from nearly 36% two years ago. The reasons? Ad commissions for online sales are much lower than those of print sales, meaning that ad reps have less incentive to sell digital ads. Also, newspapers are mostly limited to selling poorly performing banner ads to local business, while pay-per-click programs like Google’s are cheaper and more cost-effective. Newspapers need to come up with more innovative sales programs and retrain their sales forces to live on lower margins than they’ve been accustomed to, and that’s not easy.

“Internet companies like Google and Local.com, which collectively control 53.3% of the local online ad market, up from 25% in 2006. And they’ve done that with only 1,400 ad-sales reps,” says the Journal. That’s one reason that E.W. Scripps, A.H. Belo and Lee Enterprises all reported declines in online ad revenue in the most recent quarter. (WSJ chart)

Maine Chain Finds a Buyer

Looks like Seattle’s Blethen family is finally going to rid itself of  a troublesome chain of newspapers all the way across the country in Maine. A group of four investors with local ties has secured exclusive rights to negotiate terms to buy the papers, which includes  the Portland Press Herald/Maine Sunday Telegram,  the Kennebec Journal in Augusta and the Waterville Morning Sentinel,  as well as some weekly publications. A spokesman for the group said the investors are all savvy businesspeople who are committed to the newspaper business and who see the purchase as an opportunity to grow the properties. Richard L. Connor is the most likely candidate to head the operational turnaround. He’s had success in his most recent role as  editor and publisher of the Wilkes-Barre (Pa.) Times Leader, where circulation has actually grown since he took over in 2006. A spokesman for the investors said the group is going to ask for concessions from the Newspaper Guild. A Guild spokesman said the union is happy to work with someone who has a plan.

Miscellany

The Hartford Courant has been pretty quiet about covering its own layoff of  57 newsroom employees,  and TV newsman and blogger Rick Hancock says he’s heard that reporters have been told to spike such stories. He quotes the paper’s reader representative confirming that at least one story about the matter was killed, although she didn’t know why. The Courant has cut its newsroom staff by 55% since 1994.

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Ted Rall has radical prescriptions for the industry. Go offline, copyright everything and stop feeding the wire services.  Newspapers’ troubles began when they started to give away their products for free to online distributors, says the noted cartoonist and liberal columnist. So it’s time to shut down and declare ownership of intellectual property. Newsosaur Alan Mutter may agree. His analysis of Associated Press content shows that only a small percentage is contributed by AP reporters, about a third, by his estimation. “If newspaper staffs continue to erode, where will the AP and its clients get the news in the future?” he asks.  Rall might also find an ally in Goodloe Sutton, publisher of the Linden Democrat-Reporter in western Alabama. He’s just raised the price of a daily issue from 75 cents to one dollar and it hasn’t made a whit of difference. Maybe people are willing to pay for news they can’t get anywhere else.

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Slate’s always provocative media critic Jack Shafer probes at an underlying reason for newspaper troubles: they’ve lost their role as social currency. Shafer remembers the days when conversations typically started, “Did you read the story in the paper today about…?” and observes that those discussion-starters have been replaced by comments on Facebook and Twitter. The loss of that central role as the source of current information deprived newspapers of their “must read” status, he says, and that made them less crucial to the everyday needs of local communities.

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Yahoo! has driven more than 100 million page views to its 779 member newspaper  sites with a traffic-generating power that one publisher described as a “fire hose”. The Deputy ME of the Dallas Morning News says, “We’ve had placements that have accounted for up to 27% of the day’s page views, and 65% of the day’s unique visitors.”E&P quotes liberally from the Yahoo press release in its  coverage, which omits important details like how the traffic patterns break  down between member newspapers and how traffic has grown since the project’s inception. But it  was a Friday afternoon…

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Playboy publisher Christie Hefner blogs about the newspaper industry’s troubles and suggests that papers should market their products better and unify print and online sales, as her publication has done. Perhaps they should also adopt the Page 3 Girl idea that’s worked so well for the U.K.’s Sun.

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Shares of Journal Register Co. fell to a penny in over-the-counter trading on Friday. That values JRC, which traded at $20 a share less than three years ago, at just $590,000.

Layoff Log

• The Newark Star-Ledger is looking to cut 200 jobs, or about 15% of its 1,400-person payroll, through buyouts, according to publisher Advance Publications. If it doesn’t hit that goal, the paper will go up for sale. Editor & Publisher’s Joe Strupp says the paper’s troubles symbolize how bad things have gotten in the industry. The Star-Ledger dominated New Jersey life, he says, and the paper was so fat and happy that it didn’t even see the need to invest in its online properties until recently. Strupp quotes one reporter as saying that news of the extent of the Star-Ledger‘s problems come as “a punch in the gut.” Advance is also seeking to wrest concessions from the union that represents about 750 employees.
• Times are tough in Idaho. The Press-Tribune of Nampa will  lay off 16 employees, or about 10% of its staff, and leave an unspecified number of vacant positions unfilled. The move comes a month after the Boise Stateman laid off 16 people and cut another 22 pressroom positions by combining printing operations.  Lee Enterprises will combine five Idaho daily and weekly papers into one daily – the Times-News – and lay off 14 people, or about 12% of the total staff. The move sounds sensible, given that two of the weeklies had circulations of less than 600.
• Another Lee property, the Munster (Ind.) Times, has laid off 12 employees  and cut an unspecified number of additional positions through attrition. The story in the Gary Post-Tribune didn’t say how many people the Times employs.
• The Bozeman (Mt.) Daily Chronicle will lay off six full-time and three part-time employees and hold nine vacant positions open.  Five of the affected positions are in the newsroom.
• The Des Moines Register may also announce some job cuts soon, internal sources told  the Iowa Independent.  Specifics were hard to come by, however. Management raised the possibility as part of a standard staff meeting and didn’t elaborate. The paper, which dominates the Iowa market, has about 200 editorial staffers.