Exuberance over the new Amazon Kindle as a potential salve for the news industry’s pain is beginning to fade as analysts dissect the financial realities. Amazon created a stir last week by introducing a large-screen version of the electronic book that does a decent job of rendering the familiar look and feel of a printed newspaper. It also announced that The New York Times, the Washington Post and others have signed up to deliver their content for a real live subscription fee. Hallelujah! Readers paying for the news!

Buried in the excitement were the terms that Amazon is demanding its news partners accept in order to join the parade: Amazon gets to keep 70% of the subscription fees. This is a huge strategic mistake that Amazon should address toute de suite.

Critics are already taking apart the strategy. Writing on Columbia Journalism Review, Ryan Chittum runs the numbers. “So of the $14 a month a reader pays for a The New York Times, say, the Times itself actually gets about $4.20. The rest goes to Amazon and to the wireless carrier that transmits the data.” He figures that if every one of the Times‘ subscribers signed up for a Kindle stream at $14/month, the revenue would barely cover the cost of the paper’s newsroom operations. And that’s assuming the Times kept all the money; in reality, it keeps only 30%

Amazon has a historic opportunity. Lacking serious competition, Kindle could own the market for electronic newspaper delivery over the next couple of years. Amazon should be making it a no-brainer for every news organization in the world to deliver content over its device. Instead of taking 70% of the subscription fees, it should be giving 90% of those fees to the publishers in a land-grab bid for market share. Alas, it’s trying to make a few quick bucks up front on a group that can’t afford to pay, and it’s mortgaging its long-term franchise in the process. It’s very un-Amazon-like to think so tactically. There’s still time to undo the damage and let’s hope it does so.

Writer Stephen Silver says the Kindle suffers from a more basic problem: it’s newspaper interface sucks “It’s slow, hard to navigate and in no way preferable to the newspaper interfaces on any smart phone, much less the Web,” he writes on North Star Writers Group. “Hell, the Times application on the BlackBerry my dad had five years ago was better-looking and easier to use than the Kindle’s version is now.”

Manifesto for Reinvention

As he does so often, Mark Potts hits the nail on the head with an essay on the lack of a magic bullet for suffering publishers. Kicking off with a short swipe at the Kindle-as-messiah craze, Potts digs in to the real problems publishers have to address: they’re too broad, too inwardly focused, and too addicted to traditional advertising models.

Potts runs down a list of changes publishers need to make in order to survive in an atomized information world. There’s nothing on his list that hasn’t been suggested before, but the summary brings a common-sense rationality to the debate. This is like a checklist for survival.

We are swimming in information, he notes. So why not aggregate what’s already out there instead of spending money on reporters to generate more information? Sounds good to us. The market for local advertising is estimated to be $25 billion annually. No one has figured out how to unlock it. Metro daily newspapers are in the best position to do that. So why are they still chasing national display advertising accounts?  This piece is like a short manifesto for reinvention that publishers should frame and hang on their walls.

Miscellany

The publisher of the Utica Observer-Dispatch was probably just trying to be folksy in devoting her column to the most common complaints readers have about their newspapers, but she inadvertently ends up make an argument for why print is dying so quickly. Five days to get a letter to the editor published is actually pretty good, says Donna Donovan. “If there’s a lag in your letter getting in, it might be because we couldn’t reach you to verify it, or we have a backlog.” Five days??

Now that it has a monopoly in Denver, MediaNews Group is going to start charging readers for some content. Readers won’t pay by the article, but will get a vague set of bundled services that includes fees for content. Exactly what those services will be hasn’t been specified. The whole plan sounds pretty vague at this point.

Someone has bid $13,000 for a non-paying internship at Huffington Post, the website often cited as a next-generation news publication. And the bidding doesn’t end for another two weeks. Proceeds go to charity. Believe us, it’s a lot cheaper to start a blog.

Metro International S.A. of Sweden will sell its US papers to a company run by its former CEO. The deal includes papers in New York, Philadelphia and Boston. They represent a combined circulation of 590,000 and 1.2 million readers. The company has been on a campaign to reduce expenses, and the US operations have been consistent money-losers. Metro International operates more than 81 editions in 22 countries. CFO Anders Kronborg says he “doesn’t see any growth in the [US] market this year or in 2010.”

Newspaper Blogger Shares Stage with Publicists

Science and technology columnist Dave Brooks of the Nashua Telegraph has come up with a novel approach to generating material for his GraniteGeek blog on the paper’s website: He’s handing over partial control to the University of New Hampshire news service. The publicity organization will “post items about science and social science research at the university…directly on GraniteGeek whenever it wants (probably once a week), and I have no control over it,” Brooks writes. “That’s something that would have been unthinkable not long ago.”

It’s not unthinkable any more, though. “Slightly to my surprise, reaction in the newsroom has been uniformly favorable,” Brooks wrote in an e-mail to us. “I knew the publisher and online editor would like it, since it drives traffic, but even a reporter who I suspected would balk – he’s an uber-traditionalist when it comes to media ethics – thought it was fine, that it ‘added to the discussion.”’ Entries from the news service are clearly labeled with their source. Staffers are also apparently willing to accept the philosophy that “standards are different for news blogs that for newsprint.”

Miscellany

Christian Science Monitor editor John Yemma, who was one of the first print veterans to pull the plug on paper, comments dispassionately on new research that shows that consumers now prefer to receive information online rather than in print. Yemma also cites recent comments by investor Warren Buffett that he wouldn’t buy a newspaper at any price as evidence that the decline of print is unstoppable. “The man famous for determining fundamental value in a stock before investing sees none in this industry, despite beaten down share prices,” Yemma writes. “…In a hundred thousand individual decisions, readers touch off the process of creative destruction. And increasingly readers seem to be deciding that daily print and ink are unnecessary.”

In announcing pay cuts, reductions in health-care plan support and another buyout offer, the Newark Star-Ledger revealed that it now expects its advertising revenue for the year to be 48 percent less than it was in 2006.

A commenter on McClatchy Watch who appears to have some knowledge of what company management is thinking, says there are no more plans for staff cuts at the company. McClatchy realizes it cut too deeply in the last round of layoffs and has to focus on revenue growth instead of more cost reduction to dig out of its hole. Refreshing philosophy, if true.

The founders of Elauwit Media, a community media company based in Haddonfield, N.J. write of the decline of major metro dailies with not a small amount of pride. Their business is growing nicely, thank you, from $100,000 in revenue in 2004 to $2.4 million in 2008. The secret: “Everybody Gets It. Everybody Reads It.” In other words, stop charging subscribers. “Huge regional daily newspapers would do better to stop requiring people to subscribe and instead deliver the paper to everybody in their target demographic…If big newspapers would charge the advertisers, not the readers, they could still turn things around.” Why didn’t we think of that?

The San Francisco Chronicle laid off “more than a dozen top reporters” last week, according to a story on the local CBS website. There are few specifics, but given that the Chronicle is trying to cut its way from $50 million in annual losses to break-even, you can expect more to come.

Daniel Baum, who was fired from the New Yorker in 2007, is taking the very un-New Yorker approach of  tweeting the story, as well as details about the inner workings of the literary magazine. We doubt the New Yorker has ever said anything in 140 characters.

Gawker’s Ryan Tate takes issue with the conventional wisdom that bloggers can’t be depended upon to cover local government.  Keying off of David Simon’s testimony before Congress this week, Tate tells of his experience as a reporter in Oakland, Calif. pounding a local beat. “I often found that bloggers were the only other writers in the room at certain city council committee meetings and at certain community events. They tended to be the sort of persistently-involved residents newspapermen often refer to as ‘gadflies’ – deeply, obsessively concerned about issues large and infinitesimal in the communities where they lived,” he writes.

Tate makes an important point that’s been largely missing from the debate over the value of bloggers.  The conventional wisdom is that these newfangled Internet publishers like to lounge in their pajamas all day and spout off about the news reported by the hard-working journalists who get paid to sit in boring local government meetings and pore over boring documents.  No one in their right mind would do this kind of work without pay, the wisdom goes, so the decline of newspapers is the loss of an essential public service.

The flaw in this argument is that it assumes that no one cares about local government or will bother to waste time learning how it works.  But our experience is somewhat different.

Engaged Citizens

Drop by any meeting of your local town government and you’ll find concerned citizens sitting in the cheap seats, watching intently what’s going on.  What motivates these people?  Usually, it’s passion for the topics  being discussed.  Whether it’s an increase in property taxes, a school bond, a new sewer project or a prohibition against walking dogs on the town common, citizens do come out to learn about issues that matter to them.

All of these people are, broadly defined, potential bloggers.  Maybe their tools of choice don’t look like this one, but their desire to communicate is no less powerful than anybody else’s.  Some may choose to use a listserv or e-mail list.  They may tweet their opinions or share them on talk radio.  But they have opinions to share and facts to convey.

Check out a list of bloggers in the borough of Brooklyn as noted in the blog rolls on Brooklyn Heights Blog and A Brooklyn Life.  These people write about all sorts of things: local arts, events, politics, schools and community organizations. They’re not journalists, but they have a lot to contribute to a public discussion and they observe things at a level of granularity that few newspapers could ever match.

The twist is that every one of them has an opinion.  Their “coverage” is filtered through the lens of their biases, which is uncomfortable for people who are accustomed to just-the-facts reporting.  The flipside is that these people collectively gather far more information than news organizations ever could.  With dozens of bloggers covering the borough of Brooklyn, can you really make the argument that citizens have less news available about the their community today than they did five years ago?

The challenge for news organizations is to develop new ways to synthesize and make sense of this deluge of information.  Instead of assigning a reporter to cover city council meetings, it might be easier to set up a webcam and let citizens watch the proceedings themselves.  Local bloggers can be co-opted to contribute to a news aggregation site in exchange for traffic.  Journalists can be retrained to filter and interpret information and validate it against the video captured by the webcam. Coverage of events can be surrounded by opinion about what actually happened.

News organizations were created to serve a public that was starved for information.  Today, the equation has flipped.  We are drowning in information.  The new role of journalists will be to simplify and contextualize.  They’ll be serving a different need, but a need that’s no less pronounced than the one they served previously.

Kindle to the Rescue

The newest port in a storm for the embattled newspaper industry is Amazon’s Kindle, a $500 handheld device that can store thousands of books and periodicals while retaining some of the look and feel of traditional print.

The reason publishers are swarming the Kindle is because of evidence that consumers will do something with it that they don’t do with their desktop computers: pay subscription fees.  It’s not surprising that leading publishers like The New York Times and the Washington Post are syndicating their content through Amazon at fees of up to $14 per month. Both papers have announced programs to offer discounted Kindles to paying subscribers. The Detroit Free Press and the Detroit News are investigating ways to deliver devices from Plastic Logic of Mountain View, Calif. that offer a similar experience.

Is the Kindle the salvation for the industry?  Not at $500, it isn’t. As long as Amazon premium-prices the device, the market will be limited to no more than about 5 million US users, according to Forrester Research. Most people aren’t ready to pony up that kind of money for a device that can easily be left in the back pocket of an airline seat, as happened to Sara Nelson, editor-in-chief of Publishers Weekly last year.

But don’t expect these prices to hold.  At this point, Kindle has the market mostly to itself, but a slew of competitors are on the horizon. As Moore’s Law kicks in, expect prices to drop to the sub-$100 range within two to three years.  Big publishers are doing the right thing to prepare themselves for mass-market digital reading devices, which could replace laptop computers over time.  By not making the mistake of giving away their content for free on the Kindle, they can avoid the mess that has devalued their current online content.

Miscellany

If anyone thought the purchase of the San Diego Union-Tribune by an equity investment firm would save the company from major layoffs, their hopes have been dashed by news that Platinum Equity plans to lay off 192 employees — or about 19% of the U-T‘s workforce — over the next couple of months. The announcement came just three days after Platinum Equity completed its purchase of the paper from the Copley Press.  Once the new owners, who are self-described turnaround specialists, dig into the property they just acquired, more layoffs will probably follow.

Rupert Murdoch wants to start charging for access to the newspapers owned News Corp., apparently in the belief that subscribers to the New York Post are just like subscribers to The Wall Street Journal. Good luck with all that.  The Boston Globe is also looking into micropayments as a way to extract revenue from readers of its popular Boston.com website, reveals Globe publisher P. Steven Ainsley in an interview that is otherwise unremarkable.

Murdoch, who has been pessimistic about the economy for months, now says things are getting better. This week he declared that “it is increasingly clear that the worst is over,” and that “revenues are beginning to look healthier.” You wouldn’t know that from quarterly earnings just reported by Gannett, McClatchy and Lee Enterprises, but in all fairness, those are backward-looking indicators.

The Columbia Journalism Review explores the changes at The Wall Street Journal that have made it an enigma among US newspapers. In an atmosphere of decline and panic, the Journal is growing both print and online subscriptions. While its advertising revenue has suffered along with the rest of the industry’s, there is a sense that this paper is doing something right. It’s “moving the needle,” as journalist Liz Featherstone notes at the outset of her 3,300-word analysis.

Moving the needle is apparently a sore spot at the Journal. Some people see the phrase as a euphemism for dumbing down the content, and their opinion has some merit. A 3,300-word analysis like Featherstone’s would have a tough time getting in the paper these days. Featherstone counted a dozen stories of over 2,000 words in the front section during a one-week period in 2007. In a more recent comparison, that total had dwindled to three. Instead, the Journal has got reporters chasing news in general and The New York Times in particular. Stories are shorter, reporters are running from press conference to press conference and the Journal no longer seems to regard its mission as being to explain capitalism. Instead, it’s becoming a hard news-driven international wire service with a specialty in business topics.

Reader Focus

Under new editor Robert Thomson (left, WSJ photo), the paper has become more focused on giving his readers what they want, even if that isn’t what the journalists like.  Featherstone snagged an interview with Thomson, who refers disdainfully to some newspapers as being written more for journalists than for their readers.  The reference is clearly to the Journal itself.

Thomson sees today’s constantly distracted, media-agnostic reader as needing quick information delivered in plain language.  Some see this approach as a heretical rejection of the principles of legendary editor Barney Kilgore, who guided the paper for 27 years and who oversaw its meteoric growth.  But others believe Thomson is simply staying true to Kilgore’s principles of giving readers what they want, rather than what journalists think they need.

The Journal story isn’t a simple one.  While Rupert Murdoch has clearly put his stamp on the organization he acquired for more than $5 billion nearly two years ago, fears that he would meddle with the paper’s editorial voice haven’t materialized.  Murdoch has also proven to be strikingly eager to support editorial quality, such as when he personally stepped in to prevent the government of China from denying a visa to a Journal Beijing reporter.

Many journalists have found themselves at odds with the new direction of the paper and have left with thinly disguised disgust.  But others are fully on board with management’s efforts to make the Journal more relevant to its audience in an effort to insure its long-term vitality.  This story is a balanced account of a journalistic institution in the midst of a transition that has torn at the fabric of its organizational values but that is clearly succeeding in the marketplace. For better or for worse.

Miscellany

There are limitations to how far one should go in giving readers what they want, of course.  The Chicago Tribune apparently stepped over that line recently with an experimental project initiated by the marketing department to seek feedback on stories that hadn’t yet been published or even fully reported. A group of reporters didn’t like this idea one bit, and 55 of them signed an angry e-mail in protest. Editor Gerould Kern quickly backtracked, issuing a statement calling the experiment “a brief market research project that tested reader reaction to working story ideas.”

The Trib went too far, says Newsosaur Alan Mutter, but the fundamental idea has merit.  Mutter sees nothing with using a little market research to shape content, even if it’s only keeping an eye on the most e-mailed stories. He relates the practice of one South American newspaper that posts stories to a website as soon after they clear editing but before they appear in print.  Editors then monitor online activity through the evening and take reader interest into account in laying out pages.

The rule of thumb with buyouts is to take them early because the terms get worse as time passes. Now we’re seeing news organizations do away with severance packages entirely. It happened at the Reading Eagle last week, where 52 staffers were shown the door with just two weeks of health insurance coverage to tide them over. One of the laid-off employees had been with the paper for 45 years.

The Memphis Commercial Appeal just laid off 19 newsroom people without any severance, according to one of the victims, who contacted us.  What they did get was instructions on how to tap into their Guild Retirement Income Plan at a penalty of 10% plus tax withholding at 20%.  Or laid-off employees could elect a lump sum payment from the plan, which would lead them with retirement annuities of less than $10 a month, in some cases. “Will that even pay for a prescription for ‘sugar diabetes’ medicine?” the former employee asks. “I’m in my 40s but everybody over 65 in my family has the ‘sugar diabetes,’ as we call it here in the South.”

The Atlanta Journal-Constitution, which has been hemorrhaging readership, has got a clever new campaign to promote coziness within the newspaper. Called “Unplug. It’s Sunday,” the promotion positions “the old-school Sunday newspaper as a refuge from the constant buzzing and beeping of smart phones, instant messages and e-mail that marks the modern workweek,” according to a short article in AdWeek. We think it’s a great idea.

And Finally…

Does Lindsay Lohan really look like Gollum from The Lord of the Rings trilogy? You decide. TotallyLooksLike.com will help you make the decision. The site has scores of photo pairs contrasting well-known celebrities with other figures who bear a striking resemblance to them, although we’re sure the likeness wasn’t intentional. Does Mary Kate Olson Totally Look Like Ozzy Osbourne? We didn’t think so till we saw the two in their separated-at-birth photo. See for yourself. You’ll be sharing the images with your friends within minutes. We guarantee it. Use Facebook.

Al Zajeera English television is doing a feature on the future of investigative reporting and will be interviewing Newspaper Death Watch’s Paul Gillin on the 10 p.m. EDT news report this evening. Check local listings.

The New York Times Co. and the largest labor union at the Boston Globe came to terms early this morning, agreeing to substantial pay cuts and modifications to controversial lifetime employment guarantee provisions that had previously blocked progress.

Details weren’t released, but negotiators emerged from 10 hours of talks at around 3 a.m. to say that a tentative deal had been reached that would achieve the $10 million in cuts the Globe had asked the Newspaper Guild to make. The union represents about 700 Globe employees, including newsroom staff. The proposed agreement will be submitted to Guild membership for approval on Thursday. Until then, the terms are secret.

Although it’s hard to speculate about just what concessions the union agreed to, the timing indicates that the union buckled under intense pressure. The NYT Co. made its “last best offer” on Tuesday to the Newspaper Guild: a huge 23% pay cut. The union’s most recent proposal was for concessions amounting to about a 5% pay cut, along with changes to benefits plans. The fact that the two sides bridged the gap so quickly and that the union agreed to modify the lifetime employment guarantees indicates that the NYT Co. had the upper hand in negotiations. The Guild had repeatedly called negotiations over the guarantees “a nonstarter.”

Ouch

This deal is going to hurt at the rank and file level. A $10 million cut spread across 700 employees amounts to about $15,000 per person. Assuming that the average Guild member makes about $100,000 a year in fully loaded compensation (wages and benefits), that nets out to a cut of about 15% per person. The union proposal had sought to concentrate those cuts in benefits programs paid to current and retired employees. Management, however, wanted to see wages slashed. Its message was clear: current and future employees of the Boston Globe shouldn’t expect to make nearly as much money as they have in the past.

Even with the $20 million in concessions the Globe‘s seven unions have made, there’s still a big gap in the math. The NYT Co. has said that the Globe is on track to lose $85 million this year, which means that the paper must cut another $65 million in expenses – or find a comparable amount in revenue – to break even. The gap between the necessary expense reductions and the relatively modest cuts agreed upon so far indicates that the Globe‘s problems are far from over.

You could do a lot worse than spend the next 20 minutes reading Jason Pontin’s prescription for saving print media on MIT’s Technology Review.  Pontin, a veteran magazine editor and reporter, avoids the hysteria, hand-wringing and quick-fix thinking that has dominated arguments over newspapering’s future to argue that the process of “fixing” the print media model will be long and agonizing but ultimately worthwhile.

Keying off of Clay Shirky’s widely circulated essay that basically forecasts the death of print media as we know it, Pontin suggests that a backlash against media anarchy will occur. Internet purists who believe that millions of citizen publishers will upend mainstream media are overlooking the value of that journalism, he argues. The voice of the people can and should be heard, but there will also be a role for those who have the skills to pick through the details, weigh the evidence and offer an impartial perspective.

The problem isn’t that those people are needed; Pontin rightly points out that demand for news content has never been higher.  Rather, the business model must change to make professional news organizations viable. Nevertheless, print publishers will have to endure quite a bit of pain to get there.  Among other things, they must:

• Shrink circulations to profitable levels and don’t give away free the stuff that people pay for;
• Offer a wide range of subscription options, making it easy for people to receive information in whatever frequency, format and volume they choose;
• Don’t fixate on platforms. Deliver information through whatever media or channels readers choose;
• Get together and settle on some reliable and comparable audience metrics. Fifteen years into the Internet revolution, for example, we still can’t agree on what constitutes an online “reader.” This lack of standardized metrics frustrates advertisers and undermines the quality of the numbers that publishers do provide;
• Shrink editorial departments to levels that can be supported by revenue. Yes, it’s going to hurt and yes, you’ve got to do it.
• Give readers what they want, even if it isn’t what journalists think they should get. The days of force-feeding the audience what editors thought was good for them are over. Deal with it.

There’s lots more.  The piece starts off looking like it’s going to be a defense of the status quo but ultimately delivers a thoughtful and practical proscription for change.

Best line: “As I rose through the editorial ranks of various magazines, I was encouraged to cultivate a mild contempt for readers.”

The Boston Globe will live to fight another day.  To no one’s particular surprise, the newspaper’s management said this afternoon it won’t file the 60 days’ notice required to shut down operations after six of its seven unions came to terms.  Unions representing delivery truck drivers, mailers, press operators, electricians, machinists and technical services workers all agree to concessions demanded by the New York Times Co. to keep the newspaper publishing. The lone union still holding out is the biggest one: the Newspaper Guild. 

Guild leaders left a negotiating session this morning without a deal.  The two sides are reportedly polarized over the issue of lifetime job guarantees extended to about 190 of the Guild’s 600 members.  Other unions with similar guarantees have reportedly make concessions, but the Guild is holding firm.  Ironically, the guarantees were put in place by many newspaper companies in the 1960s and 1970s to help management streamline the process of automating their production facilities.  As the fortunes of these businesses have plummeted in recent years, the guarantees have become an albatross around management’s neck.

Boston.com’s coverage of the news bore an unusual headline: “Globe says it won’t file notice to close plant.”  The choice of wording would indicate that the New York Times Co. hasn’t yet withdrawn its threat to close the newspaper, although that possibility now seems remote.  Union members must still ratify the proposed agreements and if the Guild doesn’t come to terms, it’s possible that the whole saga could start up again.

Boston.com has details of the offer the Guild says was presented to – and rejected by – Globe management. 

As negotiations with the Boston Globe‘s unions continued past a midnight deadline, The New York Times Co. filed notice with the federal government today of its plans to shut down the paper in 60 days. Such notice is required under federal law, but the filing of a Worker Adjustment and Retraining Notification statement doesn’t require the Times Co. to go through with its threats. The Globe unions called the move a negotiating ploy. The Times Co. says it is ready to go ahead and file a binding plant-closing commitment with the state today.

Tense negotiations continued through the weekend, with the Guild saying its offer exceeds the goals set by the Times Co. and the Times Co. raising the stakes even further by admitting that it had made a $4 million accounting error that would require the union to dig even deeper for cuts. The Boston Herald quotes a union official alleging that most of that oversight is actually bad-faith bargaining. Whatever happens, union officials said, expect large layoffs at the Globe. No one seems to think the Times Co. intends to carry through on its threats to shutter the 137-year-old paper, but it’s virtually certain that whatever Globe survives this negotiation process will be far smaller and weaker than the one that has dominated New England for decades. We’ll keep an eye peeled today, but you’ll probably find out quicker from Romenesko.

In Iowa, a Blueprint for Change

They’re shaking up the traditional newspaper model in eastern Iowa. Mark Potts sums up a blueprint for reinvention by the designated change agent at the Cedar Rapids Gazette that outline a vision of the publisher as a center of information, commerce and community. It isn’t about publishing, Steve Buttry says. “We need to become the connection to everything people and businesses need to know and do to live and do business in Eastern Iowa.” He goes on to list the many ways in which the publisher can expand its franchise, from delivering up-to-the-minute Twitter feeds to enabling visitors to buy concert tickets directly from its event listings page.

The part that will rub traditionalists the wrong way is Buttry’s vision of a new approach to revenue in which journalists will be just as responsible for the financial well-being of the company as sales reps. The wall between advertising and editorial is considered no man’s land in most newspaper companies, but Potts praises Buttry for having the courage to envision an alternative. Publishers can position themselves as intermediaries between their audience and local merchants and extract a small fee for enabling transactions. There is nothing dirty about thinking about the financial health of one’s employer. In fact, this economy doesn’t permit the luxury of old silos. Read Potts’ synopsis of how one news organization is changing the way it perceives its business. Read the entire 38-page blueprint document here if you want details.

Conde’s Outlook: Nasty

How bad is it in the upscale lifestyle magazine market? “Wired magazine posted a 57% drop in ad pages in the first quarter, while ad pages at fashion magazines W and Lucky were down more than 40% and 35%, respectively, for the quarter. Architectural Digest‘s ad pages were down 47%,” reports The Wall Street Journal in an article about Conde Nast’s decision to pull the plug on Portfolio magazine after only two years. The numbers make it clear why the decision was necessary: despite its paid circulation of nearly 450,000, Portfolio‘s ad pages were down 61% in the first quarter. The highly visible publication was launched with fanfare and an all-star lineup of journalists two years ago, entering the market dominated by Forbes and Fortune. However, luxury advertising has fallen off the table during the recession and Portfolio was still working off its startup costs. Advertising revenues would have to increase significantly in 2010 to support the business plan, and that just wasn’t going to happen. Some observers think the flight of luxury advertising from upscale magazines could be permanent.

It’s going to get worse, says MarketWatch’s John Friedman. In a short video clip, he says the business publishing market is over-populated and under-advertised. Every business magazine, even the most venerable titles, is vulnerable in an ad downturn like this one.

The J-School Paradox

The Capital Times of Madison, Wisc. Writes about the astonishing surge in journalism school enrollments. “According to an annual enrollment survey done by the University of Georgia, there were 199,711 undergraduates enrolled nationwide in journalism and mass communication schools in
2007 — a jump of 41.6 percent from 1997,” reporter Todd Finkelmeyer writes. “Meanwhile, a recent article on Forbes.com noted that journalism schools at Columbia University, the University of Maryland and Stanford University saw significant spikes in applications this past fall — 30 percent, 25 percent and 20 percent, respectively.”

The story goes on to quote several bright-eyed J-school students who aren’t at all worried about the 15,000 or so journalism jobs that have disappeared over the last 18 months. They believe that a market for quality reporting will always exist and hope that by the time they graduate, the jobs will be there. Professors are quoted saying that journalism teaches critical thinking, an essential skill that can serve a young person well in any profession. It appears that the University of Wisconsin at Madison is ahead of the curve, having revamped its journalism program nearly a decade ago to accommodate multiple media. Ironically, the Capital Times itself exited the print business more than a year ago and has been publishing solely online since then.

Miscellany

The Baltimore Sun laid off 30% of its newsroom last week with the cuts hitting disproportionately hard on senior editorial staff. About one third of those laid off were editors and managers, Editor & Publisher reports. They included both top editorial page editors. Newspaper Guild officials said the moves appeared to be part of a realignment of the news operation toward “multi-platform content,” whatever that is. A reduction of that size could presage a reduction in print frequency along the lines of what the two Detroit dailies are doing. The Sun has the handicap of competing against the Washington Post and other smaller dailies just to the south.

Canada’s National Post will suspend Monday publication during the summer in a cost-cutting move. No layoffs are planned.

The Reading (Pa.) Eagle laid off 52 people, or about 12% of its workforce.

The company that publishes the Vancouver (Wash.) Columbian has filed for Chapter 11 bankruptcy protection, but the issues apparently revolve around real estate investments and not business losses at the newspaper. The Columbian will continue to publish during reorganization.

Billionaire investor Warren Buffett reads five newspapers every day, but he wouldn’t buy one at any price. “They have the possibility of going to unending losses…I don’t see anything on the horizon that causes that erosion to end,” says Bullett, who owns the Buffalo News and a piece of the Washington Post Company. He doesn’t intend to sell those ownership stakes, but he isn’t expanding them, either.

And Finally…

The New York Times has two stories that illustrate the severity of the industry’s crisis. It tells of  Todd Smith, a reporter for the Suburban Journals chain of newspapers owned by Lee Enterprises, who was shot while on the job last year. That’s a pretty big sacrifice to make for one’s employers, so “On April 15 of this year, when Mr. Smith was called to a meeting at the Suburban Journals…he wondered if the staff had won an award for coverage of the massacre. Instead, he learned that he and several others were being laid off,” Richard Perez-Pena writes. The story also tells of Paul Giblin, a reporter for the East Vallely Tribune whose work won a Pulitzer Prize two weeks ago. Giblin was laid off last year and now works at a startup online news organization.