Following up on last week’s excellent report on the subtle disruptions caused by newspaper frequency changes, Editor & Publisher looks at the link between reduced frequency and online traffic. Its findings, while preliminary, indicate that newspapers that have backed off from a daily schedule are seeing encouraging reader migration to their websites. At Seattlepi.com, the online successor to the shuttered Post-Intelligencer, unique visitors have grown steadily since the paper went online-only in March, according to executive producer Michelle Nicolosi. “We haven’t lost readers,” she tells Jennifer Saba.

In Detroit, the first major city to lose home-delivered daily newspapers, readers have flocked to websites for the Detroit Free Press and the Detroit News, with April traffic at the Freep shooting up 74%. Also notable is that downloads of the e-editions – or electronic newsprint equivalents — of the two papers increased sevenfold when daily home delivery ended. Executives at other, smaller papers that have trimmed frequency also report encouraging trends online. Although it’s still too early to tell, initial indications are that print readers retain loyalty to their local brands.

St. Pete Times Shows How It’s Done

The St. Petersburg Times has a 15,000 word exposé on the Church of Scientology that serves as an example of how news organizations can transcend the traditional walls between words and other media.  The package includes a mini video documentary on the home page that looks like it was done by a television crew.  In addition, video interviews with church defectors are aired out for those who want more detail. There’s also a short narrative about how the package was reported, an audio clip of a church spokesman denying the allegations and even an indignant letter from church leader David Miscavige, who is the bad boy in the whole affair.  There’s also a rather self-serving list of references from other media outlets to the work done by the Times.

Online Journalism Blog critiques the package, giving a generally favorable remarks.  It compliments the paper’s use of links to other sources as a way of providing background rather than rewriting everything in its own words.  The blog points out some shortcomings, including spotty use of social media tools to promote and brand the story as its own.  Online Journalism Blog should not throw stones, however.  Its links to the source material on Tampa Bay.com are mostly dead because of a improper use of a referral URL.

Regrettable Error

Would you fire a reporter over this story? the New Brunswick Telegraph-Journal did.  Journalism student and intern Matt McCann was canned for “errors of fact and judgment [that] don’t constitute acceptable journalism at the Telegraph-Journal,” according to a statement by the newspapers editor.  McCann’s transgressions included misspelling a name, getting a title wrong and incorrectly identifying the college major of New Brunswick Premier Shawn Graham. That’s sloppy reporting, but the penalty seems a bit out of proportion, especially considering that Maureen Dowd and Chris Anderson have both recently admitted to plagiarism.

Writing in Columbia Journalism Review, Craig Silverman is clearly sympathetic to McCann, going so far as to quote McCann’s own professor saying that he never would have lasted in journalism if such punishments had been meted out in his day.  He also quotes a former Telegraph-Journal editor saying that the decision was more likely a political one intended to curry favor with the University than a punishment for sloppy journalism.

Miscellany

The New York Times Co. will throw in the Worcester Telegram as a pot sweetener for anyone willing to take the Boston Globe off its hands, according to a memo obtained by The New York Times. The offer might increase the Globe’s appeal, since the Telegram is reportedly losing money at a far slower rate than its neighbor to the east and effectively has no competition in its local area.

The UK’s Guardian newspaper assembled a gallery of 25 front pages from around the world covering the death of Michael Jackson.  The Wall Street Journal also weighs in with the three
different stippling images of Jackson it has run over the past 29 years.

Management at the Boston Globe finally wore down union leadership last night and won tentative agreement on a revised contract that is substantially similar to the one the union rejected a little over two weeks ago.  The new contract slightly reduces the pay cut management had originally sought, although it includes additional benefit reductions.  More importantly, the Globe and its parent New York Times Co. emerged victorious on the biggest issue: the right to end lifetime job guarantees for 170 employees.

Union members still have to ratify the proposed contract in a vote set for July 20, but approval seems likely now that union leadership has endorsed the deal.  The end of the last bitter labor dispute between Globe management and employees also positions the paper for sale to one or more of several interested suitors, which include investor and Boston Celtics co-owner Stephen Pagliuca,; Partners HealthCare chairman Jack Connors and former Globe executive Stephen Taylor.

Schedule Cutbacks Have Unforeseen Effects

More than 100 daily newspapers in 32 states have cut at least one daily edition in an effort to reduce costs and avoid layoffs.  But if you think that changing frequency is a matter of just shuttling around the work schedule, read this excellent piece in Editor & Publisher on the ripple effects of becoming somewhat-less-than-daily. Joe Strupp talked to editors around the country and found that cutting as little as one day’s worth of print news can force significant changes in the way a newspaper approaches its mission. “We try to cover Saturday through Monday on Tuesday. But we don’t staff Sunday night so we can staff more the rest of the week. There is more breaking news that goes up on Monday,” says Dan Liggett of the Wilmington (Ohio) News Journal in a quote that typifies the kind of calendar soup that these editors must contend with.

Some papers have had to add pages on days following gaps in the production schedule because print diehards still want local news and won’t go online for it.  Big news stories tend to lose momentum when they occur just before a break in the production schedule.  This forces editors to alter subsequent coverage to keep reader interest from waning. The Detroit News and Detroit Free Press, which are the most prominent dailies to cut back on print, have moved more enterprise reporting stories into the Thursday, Friday and Sunday editions that land on subscribers’ doorsteps.

In communities with active high school sports schedules, the loss of a Saturday edition has prompted website editors to boost the priority of local sports in Saturday online coverage and to add Sunday pages to handle the demand. Other publishers have found that weekly columns and features that appeared on certain days have had to be moved to other days because readers didn’t want to give them up.

The good news is that “editors are becoming more convinced that print-devoted readers will stick around even when fewer editions are available and stories get published days after a news event,”  Strupp concludes.

R.I.P. Ann Arbor News

The Ann Arbor News, which announced plans in March to scale back from daily to twice weekly frequency, is apparently going a little further than that.  Writing on Poynter.org, Rick Edmonds reports that the 174-year-old daily is effectively shutting down.  The “unspecified number of layoffs” the paper announced in March is in fact the entire staff, Edmonds says. The headquarters building (right) will be sold and an entirely new online operation launched with a twice-weekly print edition that looks pretty lightweight. Staffers will have the opportunity to apply for jobs at a much lower pay scale than what most of them are currently earning.  Edmonds suggests that Ann Arbor’s young, hip college-age crowd is more attuned to online media and extrapolates the same scenario playing out in cities like San Francisco, Boston, Minneapolis, Seattle and San Jose, where a young, upwardly mobile populace creates a hostile environment for a daily newspaper.

Miscellany

Editor & Publisher continues to try to find insight in the increasingly meaningless “time-spent-on-sight” statistics for major newspapers.  We pointed out some of the weaknesses of this metric in our analysis of last month’s figures, including the paradoxical fact that big spikes in traffic can actually drive down time-spent figures.  Did the Washington Post really do anything to deserve a one-third drop in reader time commitment from May 2008 (16:04) to May 2009 (10:58)? If you look at the snapshot for those two months, things look pretty negative for the Post, but the April 2008 time-spent number was 12:55, which hints that the figure from May of last year was a fluke.  We wish Nielsen would stop flouting these monthly snapshots and concentrate instead on six month moving averages, which would filter out the short-term spikes that make year-to-year comparisons practically useless.

Fans of Jim Hopkins’ hugely popular Gannett Blog can breathe a sigh of relief.  The crusade to be the world’s most reliable source about what’s going on inside the company will continue at Gannettoid after the blog shuts down on July 19. Gannettoid is “a Web site that serves as a collection of stories, links and other Web sites about Gannett Company.” While it isn’t formally affiliated with Gannett Blog, Gannettoid is welcoming devotees to continue their conversations in the forum section.  No word on whether Hopkins will pop in for a visit now and then.

The new owners of the San Diego Union-Tribune are already selling off property acquired in the purchase of the newspaper last month. Two properties have gone on the market at a combined sale price of $9.1 million, which is nearly 40% higher than what Platinum Equity paid for them. The move would tend to confirm Ken Doctor’s theory that Platinum Equity acquired the U-T primarily for its real estate value and got the newspaper thrown in for free. (via Gary Scott)

Sun Newspapers will eliminate 115 full- and part-time positions in mid-August as part of a sweeping reorganization plan that will reduce the company’s portfolio of weekly newspapers by half and outsource accounting, payroll and home delivery to the Cleveland Plain Dealer. Both organizations are owned by New Jersey-based Advance Publications.

The Columbia Journalism Review profiles Alan Mutter, whose Reflections of a Newsosaur blog has stirred up the industry and created a launch pad for Mutter’s ideas about reinventing news organizations. It’s a good companion to our Feb. 18 audio interview with Mutter that includes details about his new ViewPass venture, which seeks to give publishers a viable subscription model.

Washington Post publisher Katharine Weymouth addressed graduates of the Medill School Of Journalism at Northwestern University over the weekend, urging them to continue to fight the good fight and declaring that “the need for great journalism is stronger than ever.” You can read the full text of her address here. Dan Gillmor tweeted that it was a “defensive commencement speech by WashPost publisher; she plainly has no strategy for future.”  However, Weymouth’s remarks indicate that she understands that the old model is collapsing and that publishers must adapt to a new world in which they are no longer “a toll booth over a bridge” to their readers.  Read the text and draw your own conclusions.

Last week we noted that MySpace is struggling against Facebook and other adult-oriented social networks, calling into question the effectiveness of Rupert Murdoch’s management strategy.  Now MySpace is laying off two-thirds of its international workforce, or 300 people, on top of the 400 laid off in the US last week.  Altogether, the company has cut its total workforce by nearly 40%.  Which only goes to show, we suppose, that media dislocation isn’t limited strictly to old media.

And Finally…

There is hope for veteran journalists.  Oyster Hotel Reviews is a fledgling online venture that employs 13 journalists to conduct extensive reviews of lodgings for business and leisure travelers.  The site, which is funded by Bain Capital Ventures, bucks the current trend toward wisdom-of-crowds reviews by employing professionals to visit hotels under cover and write about their experiences. “Oyster.com is a great opportunity for these journalists as they provide full benefits, competitive salary and a job that includes travel to various hotels around the world fully paid for—who wouldn’t want that as a job?” a publicist wrote us.  We’re wondering where to apply.

David Healey lost his job at a small Maryland daily recently thanks to downsizing. He didn’t like being cut off from his community, so he started The Cecil Observer. “The response has been positive and the hits are growing,” he writes, but he adds, “The experience quickly brought me to the realization that print journalism was over except as a niche or boutique business.”

Here is a post David wrote about starting a blog and the role that blogs may come to play in the media world where information is published almost instantaneously. You can find the original entry here.

ONE of the things I’ve learned very quickly about blogging is that it truly moves at the speed of wi-fi, or at least as fast as one’s fingers can type on the keyboard.

Case in point: On Sunday evening I was thinking about posting something about the candidates who had filed for the Chesapeake City election. Because I live here in our little waterfront town, I’m always interested in who’s running. The deadline was noon Friday, and I had second-hand information about the list of names. However, my journalistic instincts were to wait and go right to the source Monday morning and call town hall before posting something for all the world to read. A good reporter would never base a news item for a print newspaper on hearsay; why should the blogosphere be any different?

Within minutes of musing on a post about the Chesapeake City candidates, my news feed indicated that someone had beat me to it. Our friends over at the Chesapeake City Mirror had posted the names of Rebecca Mann, Lee Collins, Rich Taylor and Harry Sampson as candidates for three seats on town council. (A tip of the hat to the Mirror for getting the information out there quickly and accurately.)

With so many people blogging, it’s hard to see how the print media can ever compete in terms of timely delivery of the news. However, the main challenge for citizen journalists is to make sure their posts are correct if the intent is to provide real news content. Then again, I wish I could say we never got anything wrong in the newspaper!

In the newspaper business, a “scoop” was a matter of being ahead of the competition by hours or maybe even days. In the blogosphere, a “scoop” comes down to minutes or even seconds. That’s an intensely competitive environment. Ping! That’s the sound of someone beating you to reporting the news.

Something else I learned back when I was a reporter and then acting editor at the weekly South County Courier newspaper in Middletown, Del., was that a weekly can’t compete against a daily (such as the News Journal) in delivering the really big news. But there were always important local stories that the dailies missed because the big guys didn’t go deep enough into the community. These issues made for front-page news in the Courier.

It seems to me that over time, local blogs will fill that same void — there will always be something to report on that the big guys missed. And local readers will be interested because they care about their communities.

We had the good fortune this year to get connected to the Knight Digital Media Center at the University of Southern California for a series of seminars that help publishers connect with the new world of social networking.  Last week we delivered a brand new presentation on how to diversify revenue sources and get away from the traditional over-reliance on advertising.  It turns out there are a lot of ways to monetize a publishing business.  See the presentation below.

The Newspaper Guild stalled for time in an attempt to block massive pay cuts at the Boston Globe, but it strategy may have ultimately backfired, reports The New York Times.  In a behind-the-scenes look at the machinations that preceded Guild members’ June 8 rejection of a proposed package of salary and benefit cuts, the Times concludes that the Guild knew about the depth of the newspaper’s financial problems a year ago but adopted a strategy of stalling and secrecy for reasons that aren’t clear.  The Guild even refused to sign a confidentiality agreement that would have given it a look at the Globe‘s financial data a year ago.

As a result, Guild members, which include most of the Globe‘s reporting staff, were unaware of the depth of the paper’s financial problems when the New York Times Co. announced on April 3 that it would shut down the Globe unless the union made  significant wage concessions.  The Times Co. has unilaterally imposed a 23% salary cut while negotiations continue. A vote on a new contract postal is set for next month, and it appears that this one has a better chance of passing, but the Times article basically concludes that the Guild members will get a worse deal as a result of their union’s intransigence.

How much is the Boston Globe worth?  Ken Doctor suggests it’s one buck.  That’s the price of a gentleman’s agreement in which a buyer agrees to assume the seller’s liabilities in hopes of future profits.  The Times Co. has said that the Globe is for sale, but hasn’t named a price.  Doctor sees any buyer assuming huge liabilities, including expensive union contracts, ongoing losses and a declining ad market.  However, he sees some upside next year when the economy begins to turn and advertising recovers with the help of government-subsidized programs for home and car buyers.  This should give a buyer some breathing room to make structural changes hopefully revive the Globe as a profitable entity, whether in print or some other form, Doctor believes.

Meanwhile, the lesser entity in the Times Co.’s 1993 acquisition of its New England — the Worcester Telegram & Gazette — is also for sale.  The T&G was reportedly valued at about $300 million in 2000, but now carries an estimated price tag of $10 million to $50 million.  The paper does not appear to be in as dire financial straits as the Globe, but it is at best a break-even proposition.  the T&G speculates on potential buyers, including a former publisher and financial heavyweights in the area, but no one is saying much of any substance.  There is broad agreement that the T&G fills a critical role as the only major news source in New England’s second-largest city.

Journalism Vets Seek New Revenue Streams

A team of veteran journalists and news technologists have joined forces to create a technology that they hope will enhance the Web browsing experience while creating a new revenue stream for content producers.  Called Circulate, the tool has elements of social networking, intelligent filtering and subscription management.  It basically learns from the user’s online behavior and delivers recommendations for content the user might like.  People can easily share information with each other and Circulate will deliver notice of new information as it becomes available.

What may appeal to publishers is the tool’s flexibility to adapt to any payment model, ranging from subscription fees to per-item pricing.  Circulate will also become a more valuable tool for targeted advertising as it learns about a user’s behavior.  Executives behind the venture have extensive credentials in the news business and the board of directors includes three top officials from the Donald W. Reynolds Journalism Institute at the University of Missouri, where Circulate was incubated.

Miscellany

The Minneapolis Star Tribune plans to exit bankruptcy in the fall, but with a market value of nearly zero.  The company, which fell into bankruptcy under the weight of nearly a half billion dollars in debt, has received approval for a plan under which it would emerge from Chapter 11 with $100 million in debt and a market value of no more than $144 million, including real estate.  All the current owners would basically exit the business and a new board of directors would be formed to appoint new management.

A new poll by Zogby International finds that only one in 200 people believe newspapers will be a dominant source of information in 2014.  What’s more, 56% of adults say that if they were only allowed one source of news, they would choose the Internet, compared to 41% for television, newspapers and radio combined.  What amazed us is that 38% of the more than 3000 respondents said they believe news from the Internet is the most reliable, followed by television at 17% and newspapers at 16%.  So the idea that the Internet is a vast cesspool of misinformation does not appear to be deterring public trust.  (Via Mark Potts)

The Gannett Blog, which will be shut down permanently on July 19, is going out with a bang.  Editor Jim Hopkins is reporting that Gannett plans to lay off 4,500 people in its newspaper division and cut salaries in its broadcast division.  The bright spot: no new furloughs the rest of this year.  Hopkins says the ax is due to fall on July 8.  Gannett has already cut 4,000 positions, or about 10% of its workforce, over the last year.  This would be the biggest round of layoffs yet.

About 500 unionized workers at the Cleveland Plain Dealer will take an 8% pay cut and 11 unpaid days off as a way of avoiding further layoffs.  Meanwhile, the paper is launching yet another redesign that the editor says will make more efficient use of dwindling space (below).

The Albany Times Union is set to cut as many as 45 jobs in a bid to reduce operating costs by 20% after it failed to come to terms with the Newspaper Guild on a new contract.  The proposed contract would have allowed management to outsource any job and lay off workers without respect to seniority.  It was rejected 125-35.  The union says the new layoffs are a punitive step and vows to challenge them.

The government of France has stepped up its novel rescue plan for the French newspaper industry, offering to give 18- to 24-year-olds a free newspaper once a week for a year.  The original plan, announced in January, applied only to 18-year-olds.  The government is investing €600 million in its newspaper rescue plan.

Is Walter Cronkite near death? CBS News was reportedly told a week ago to update the legendary newsman’s obituary, but friends are now saying rumors of Cronkite’s impending demise are greatly exaggerated.  Commentator Andy Rooney stopped in to visit the 92-year-old Cronkite recently and says “Walter’s going to live for a while.” A family friend says America’s most trusted man is losing his memory and is confined to a wheelchair but the death is not imminent.

And Finally…

Garrison Keillor is going to miss The New York Times, so he’s adopted a strategy of reading every word of every issue, forsaking all other activities in the meantime.  He’s up to 1999 and should be busy for quite a while.  Keillor spins his story in typical Prairie Home style, and an audio version is also available.

Welcome to WordPress. This is your first post. Edit or delete it, then start blogging!

We’re back from filing an 80,000-word manuscript for a book about using billions of dollars worth of high-tech satellite equipment to find Tupperware in the woods. Really. And not much has changed in the last 10 days.

Murdoch Now Struggles Online

Rupert Murdoch was hailed as a visionary when he paid the then-bargain price of $580 million for MySpace in 2005, but now it appears that the newspaper mogul may not know that much about running an Internet community after all. MySpace just laid off 400 employees in the US and could cut another 100 internationally. That would amount to more than 15% of the company’s 3,000-employee workforce.

Crain’s New York quotes eMarketer forecasting a 15% drop in MySpace ad revenue this year, while Facebook is expected to gain 10%. MySpace is still bigger, but it’s headed in the wrong direction, with a 2% decline in visitors in April, compared to an 89% gain at Facebook. Murdoch has fired some executives and promised to rejuvenate MySpace, but the site has lost its utility to the older audience, which is flocking to Facebook. MySpace is still the preferred destination for rock bands and entertainment companies, but that doesn’t give it much cachet with the wealthier audience that Facebook is attracting.

Post Publisher Just an Ordinary Mom

Vogue has a feature on Katharine Weymouth, publisher of the Washington Post and granddaughter of the revered Katharine Graham. Nancy Hass portrays Weymouth as an unpretentious, down to earth mother of three who just happens to run one of the world’s most prominent media properties.  “She’s a mother first,” says her friend Molly Elkin, a labor lawyer.

The Post‘s new managing editor, Marcus Brauchli, calls Weymouth “an amazing listener” who isn’t afraid of criticism and who seems more at home with her people that the glitterati. She moved her office off the Post‘s executive floor and down into the advertising department, where she easily banters with her employees. Her home is a modest four-bedroom affair in Chevy Chase, where she greets visitors amid the barely controlled chaos of a living room full of toys.

Although she faces a huge task in reinvigorating a paper whose circulation has dropped 20% since its heyday, she says she has no grand plan. In fact, the piece makes out Weymouth to be a smart (Harvard magna cum laud and Stanford Law) achiever who makes it up as she goes along. Her attitude toward the Huffington Post and The Daily Beast, which both use Post content without paying: “Good for them. All’s fair, you know.”

Miscellany

The Associated Press is struggling to change its business model in light of the collapsing fortunes of the newspaper industry. The cooperative is trying to negotiate more lucrative licensing deals from major Internet news sites while cutting prices to newspapers in an effort to prop them up. The AP will reduce fees by $45 million for newspapers and broadcasters next year, or about $10 million more than the rate cut it announced in April, CEO Tom Curley said earlier this week. But that won’t stop the decline in revenue, which is expected to continue through at least next year. Curley said the AP aims to reduce its 4,100-person workforce by 10% through attrition, but that layoffs may be necessary.

After 18 months on the market, the Portland (Me.) Press Herald finally has a new owner who has promised to reinvigorate the troubled paper and restore it to profitability by the end of the year. Bangor native Richard Connor officially took the helm this week and said readers will immediately notice a thicker paper and better integration with the website. But there will be pain, with layoffs of up to 100 employees likely.  Remaining employees will get a percentage of the operation and two seats on the board. A conciliatory Guild executive said the layoffs will prevent much bigger job losses that would have occurred if the Press Herald had gone under.

The Knight Foundation is funding nine new-media projects to the tune of $5.1 million. The biggest winner is DocumentCloud, a project conceived by journalists from The New York Times and ProPublica to create a set of open standards for sharing documents. Other projects receiving support include one to help citizens use cell phones to report and distribute news, an effort to develop a media toolkit for developing mobile applications and an online space where the people can report and track errors in the media.

Yahoo’s Newspaper Consortium continues to be a bright spot for the industry. Yahoo reported that five new members just joined the ad-sharing cooperative: the Orange County Register, Colorado Springs Gazette, North Jersey’s Record and Herald News and the San Diego Union-Tribune. The group’s 814 newspaper members account for 51 percent of all Sunday circulation in the US.

Newspaper Guild members at the Albany Times Union have rejected a management proposal that would have eliminated seniority considerations in layoffs and permitted outsourcing of Guild jobs. The vote was 125 to 35. No word on whether the parties will return to the bargaining table, where they have been deadlocked for nine months.

Dan Gillmor has a short, pointed piece on MediaShift pleading for an end to caterwauling over the future of journalism and praising the “messy” process that is going on.  “I’ve grown more and more certain that we will not lack for a supply of quality news and information,” provided that risk-takers are permitted to experiment and that the supply of people who want to practice quality journalism doesn’t dry up, he writes. Like Clay Shirky, Gillmor believes experimentation will ultimately lead to many smaller news operations replacing a few big ones, and that that’s not a bad thing.

The Death Watch will be on hiatus the week of June 8 as we scramble to hit the deadline for our new book, The Joy of Geocaching. For coverage of the industry, including the Boston Newspaper Guild’s dramatic rejection of The New York Times’ proposed cost cuts, check out our Google Reader page of newspaper sites or consult any of the fine resources listed in the Media Sites section of our sidebar below.

Newspaper executives met in semi-secrecy this week to ponder collaborative solutions to the industry’s troubles.

They heard a big idea from Alan Mutter called ViewPass, a subscription service that would be jointly owned by publishers. ViewPass would aggregate editorial content and collect visitor data that could be used to sell higher-priced ads.

Mutter’s network, which he has been building quietly over the last few months with collaborator Ridgely Evers, would create profiles of paying subscribers based upon information they volunteer as well as their reading habits. It would provide a means to monetize content through subscriptions and micro-payments but, more importantly, would develop rich information about members over time. Mutter estimates that a system like this could more than double the CPMs that publishers charge advertisers. There would also be a penalty for content providers who abused copyright: they would be booted off the system. The Nieman Journalism lab has a two-page PDF description, if you’re interested.

Attendees at the meeting also discussed ideas for regulating the reuse of content along the lines of a model deployed for nearly a century by the music business. Music publishers license songs to bars, radio stations, shopping malls other outlets through organizations that represent the copyright holders. The best known of these is ASCAP (American Society of Composers, Authors and Publishers and Broadcast Music). Outlets can buy blanket licenses to play copyrighted works in public, with composers and performers getting a percentage of the fees.

The big concern with any consortium is legality, but The Wall Street Journal quotes several experts on antitrust law saying that the music industry experience is a valuable precedent for the news industry. If publishers argue that the survival of their industry depends upon regulating fair use of their content, the Justice Department would be hard-pressed to object to a consortium.

A Different View

On the other hand, a lot of people think the paid-content debate is pointless flailing. Xark’s Dan Conover writes a blistering critique of the industry’s search for salvation. Rather than changing the existing model, he writes, publishers are fumbling around for a solution that requires readers to fundamentally change their behavior. People aren’t going to start paying for something they’re accustomed to getting for free, so the debate is simply hastening the demise of the industry by delaying the search for useful solutions. Innovation requires examining all possible alternatives, and newspaper publishers aren’t the kind of people to do that. “They’ll do anything to survive… so long as it doesn’t involve change,” he writes.

Conover makes the point that pay walls involves a trade-off: the more you charge, the fewer people come to the website. Lower traffic means lower advertising revenue and the income from readers won’t make up the difference. Tim Windsor weighs in with a comment noting an earlier column he wrote at the Nieman Journalism Lab documenting that traffic declines after the imposition of pay walls at could be on the order of 95%.

“When the Los Angeles Times walled off its entertainment content in 2003, ‘total visitors to the site — people who read and interacted with content — plunged from a high of 729,000 in July 2003, the month before the wall went up, to about 19,000 total registered visitors. That’s a drop of 97% in actual audience.”

Our Two Cents

The newspaper industry’s paid content debate sounds more and more like the desperate protests of the music industry when file-sharing began to dismantle its business model. The two industries have some characteristics in common. Both are mature, traditionally stable and highly profitable businesses with predictable growth and high barriers to entry. The people who gravitate to such industries excel at managing costs and limiting risk.

These are the last people you want to run operations at a time of crisis. Crisis demands innovative thinking, fast reaction times and tolerance for risk. One reason we’ve seen so little of this in the newspaper industry is that the people at the top have no capacity for making dramatic changes. The innovation that we’ve seen comes almost entirely from startups or skunkworks operations that publishers have had the sensibility to leave alone.

Paid-content models may gain some limited traction in markets that place a high premium on a certain kind of content. Bloomberg continues to charge high fees for information because it innovates so well in the ways it analyzes and presents it. But that’s Wall Street. It’s hard to believe that much of what now appears in newspapers is going so compelling that the average consumer is going to pay for it. Hyper-local and database content may have more commercial appeal but a lot of newspapers will need to change the way they gather and publish content in order to cash in on that opportunity.

The industry is still too dependent on advertising. Ideas to squeeze more blood from that stone have value, but they aren’t going to alter the economics of a fundamentally broken industry.

Consider the analysis from Moody’s Investors Service Senior Analyst John Puchalla, who says high costs are squeezing the life out of the newspaper industry. Only 14% of the industry’s costs are related to content creation, Puchalla says. Unless the number can be brought down significantly, the high fixed costs, combined with crushing debt loads, will make it impossible for publishers to acquire new funding. Debt ratings will continue to sink, making capital even more expensive. Cross industry collaboration and outsourcing could lighten some of the burden, but it will be very difficult for publishers to compete with the vastly superior cost structure of online media.

The Philadelphia Bulletin, a conservative weekday paper with a small but loyal following, shut down abruptly yesterday, idling 25 workers.

This is actually the second time a Bulletin in Philadelphia has closed. The first time was in 1982, but Thomas Rice bought up the name and relaunched the Bulletin as “Philadelphia’s Family Paper” in 2004.

By most accounts, the new  Bulletin struggled from the start. Staffers said paychecks were often late. Ads were scarce. Critics complained of questionable fact-checking and a tendency for the Bulletin to select wire service stories that cast liberals in a  poor light. 

The Bulletin retained its predecessor’s famous slogan, “In Philadelphia Nearly Everybody Reads the Bulletin,” but that stretched the truth. The paper claimed a circulation of 100,000, but the numbers weren’t audited and staffers said they didn’t know how many copies were actually paid for. Columnist Herb Denenberg says he’s never actually seen a copy.

The Bulletin‘s website doesn’t mention news of the closure and Rice was unavailable for comment. 

The Bulletin struggled in a hostile environment and a market that’s barely able to support two daily papers, let alone three. In that respect, the story is reminiscent of the New York Sun, a weekday paper serving Wall Street that shut down last October.