The Newspaper Association of America made no attempt to draw attention to its release of the first quarter financial results for America’s newspapers — and with good reason.  Sales skidded an unprecedented 29.4%, driven by disasterous results in classified advertising amid the weakest economy in 60 years.  Alan Mutter notes that if this trend continues, the US newspaper industry could close out 2009 with total sales of less than $30 billion — a 40% drop in just four years.

The wreckage is across the board — even online sales were off more than 13% — but the worst-hit sectors were cyclical ones: Employment classified advertising down 67.4%; Real estate classifieds off 45.6% and automotive classifieds down 43.4%.  All in all, classified ad sales were down 42.3% for the quarter. “In records published by the NAA that date to 1950, there is no precedent for the sort of decline suffered in the first three months of this year,” Mutter writes.

Slate’s Jack Shafer has a historical review of the factors that got the newspaper industry into this fix.  Publishers knew by the 1970s that they were toast, he says.  Demographic factors were to blame.  The flight of professionals out of the cities and into the suburbs challenge the economic model of the big dailies, and their halfhearted attempts to regain momentum mostly failed.  Some executives took consolation in the fact that their circulation was growing despite the reality that the gains badly lack lagged overall population growth.  The game was really over long before the story began to show up in the financial results.

More Fodder for Pay-Wall Debate

In the continuing debate over whether newspapers should charge for content, Martin Langeveld contributes perspective from Albert Sun, a University of Pennsylvania math and economics student with an interest in journalism.

Speaking at a recent conference put on by the Donald W. Reynolds Journalism Institute  at the Missouri School of Journalism, Sun suggested that newspapers shouldn’t be too monolithic in their approach to pricing.  Rather, they should take inspiration from the airline industry, which charges different prices for the same seats depending on traveler needs.

In the same manner, newspapers should look at their product as a collection of boutique services, each with different price tiers depending upon perceived value.  For example, a casual reader may pay nothing for a weather forecast, but a weather bug might part with $10 a month for detailed technical reports and historical records. Langeveld writes:

Establishing a single price point for online content…might work for a time but is not revenue-maximizing in the long run.  The right way entails the exploitation of a variety of niches all along the curve – and therein lies the problem, since the culture of newspapers is still mainly that of a monolithic, one-size-fits-all daily product, whether in print or online.

In another post, Langeveld flags a quote from Denver Post publisher and MediaNews Group CEO  Dean Singleton in an interview with the Colorado Statesman:

We will be moving away from giving away most of our content online. We will be redoing our online to appeal certainly to a younger audience than the print does, but we’ll have less and less newspaper-generated content and more and more information listings and user-generated content.

Devalued Journalists Fight Back

Two stories caught our eye this week about journalists attempting to skewer the current trend toward devaluing their profession.

Three Connecticut alternative publications – the Hartford Advocate, New Haven Advocate and Fairfield County Weekly – outsourced all of the editorial content for last week’s issue to freelance journalists in India. But instead of burying the move, the papers actively promoted debate with a provocative headline: “Sorry, we’ve Been Outsourced. This Issue Made In India.” And to drive home the absurdity of the whole affair, the editors assigned Indian journalists to principally cover local news, entertainment and culture.

The move had elements of a publicity stunt playing off of American capitalism’s current love affair with all things Indian. However, editors made a sincere effort to see the project through, producing nine stories about local affairs written by reporters half a world away. They wrote about their experience:

If our owners want to replace us with Indians, all we can say is good luck! If they find locating, hiring and keeping after these writers half the challenge we did, they might think twice about replacing us. Far from giving us a week off, it took practically the entire editorial staff to assign, edit, manage and assemble this project.

The myth that Indian reporters work for peanuts was belied by one Indian veteran who asked for $1 a word, which is less than what the publishers pay in the US. The experiment also had its lighthearted moments such as when one overseas journalist shared a vindaloo recipe with the publicist for a mind-reading act.

Michelle Rafter writes about the questionable editorial oversight practices at content aggregators. These Web-based organizations, which principally republish material from contributors in exchange for a share of the revenue, have been labeled in some quarters as the future of journalism.  If so, then the experience of Los Angeles freelancer L. J. Williamson indicates that they have a long way to go.

Williamson wrote a series of articles for Examiner.com, a string of localized aggregation sites targeting major cities.  She noticed that her stories were passing through to the site with little or no editing.  Editors seemed far more interested in traffic-driving strategies.  So Williamson began concocting increasingly outrageous topics full of  “exaggerations and half-truths. I also wrote a series of preposterous articles on topics like why peanuts should be banned, why panic was a totally appropriate response to the swine flu outbreak, and why schoolchildren were likely to die if they were allowed to play dangerous games such as tag,” she wrote in an e-mail to Mediabistro.com’s Daily FishbowlLA. “And no one at Examiner noticed or cared what I said or did for quite some time.”

Williamson was finally outed by lawyers for one party that was victimized by her reports.  She was “fired” from a job that had never paid her and had to settle for the satisfaction of telling her story to the world.

Miscellany

The Wall Street Journal says a private equity firm, HM Capital, is close to a deal to acquire Blethen Maine Newspapers, which owns the Portland Press Herald/Maine Sunday Telegram, and two smaller newspapers. The small chain has been on the block for more than a year, during which time it has become an albatross around the neck of the Seattle Times, which owns Blethen.

The Nieman Foundation has suspended its annual conference on narrative journalism, dealing another blow to the already dwindling support for long-form storytelling.

The long-form clearly isn’t dead at Denver-based 5280 magazine.  It has an Investigation Of The Circumstances Leading Up To The Closure Of The Rocky Mountain News that runs to nearly 10,000 words.  We haven’t had a chance to read it yet, but feel free to knock yourself out and send us a summary.

Writing on True/Slant, Ethan Porter says Matt Drudge’s popularity is waning. A Drudge Report story last week about a potentially incendiary quote from House Speaker Nancy Pelosi went nowhere, he says.  Could Drudge’s conservative politics be losing favor in a recession wracked world? Dare we be so hopeful?

McClatchy Watch catches the Miami Herald in the act of promoting circulation with an offer of a free subscription to a magazine that hasn’t been published in two years.

There’s plenty of buzz in the blogosphere about an under-the-radar meeting that took place last week between top newspaper executives to discuss issues of common concern, including the possibility of charging for online access to news.  Speculation centers upon whether the participants, which included McClatchy’s Gary Pruitt, Dallas Morning News Publisher Jim Moroney, Lee Enterprises’ Mary Junck and E.W. Scripps Mark Contreras, allowed the discussion to stray into the terms under which their organizations could erect pay walls in front of content.

The Newspaper Association of America (NAA) says price was never discussed during the meeting, and that’s good, since federal antitrust laws are pretty specific about such things.  There’s no law against competitors discussing common issues, but setting prices is a no-no.

Conventional wisdom says that newspaper price-fixing would be dead on arrival, but some people argue that the Supreme Court’s 2007 decision in Bell Atlantic Corp. v. Twombly set a precedent under which an aggregator representing multiple properties could get away with charging fees for access. Slate’s Jack Shafer weighs the possibilities and concludes that collusion would be an exceedingly risky move under an administration that has promised to be tough on businesses.

Pat Thornton sees the devil in the details. People aren’t going to pay for to read the police blotter and it’s going to be even tougher to sell them on having to buy services that used to be free, he says. “You can’t charge for something that has been free for years without drastically improving it,” argues Thornton. Given that news organizations have been cutting resources left and right, it’s pretty difficult to argue that the product is getting any better.

There actually is precedent for Web publishers charging for services that were once free.  In the heady days of the dot-com bubble, nearly everything was gratis on the web.  After market realities forced businesses to create sustainable models, photo- and video-sharing sites that were once free began to charge membership fees.  Some businesses and specialty publishers also began linking Web access to paid print subscriptions, a model that persists to this day at publications like Advertising Age.

Perception of Value

Thornton has got it right that perceived value is the crux of the issue.  Consumers understand that technology isn’t free and accept that publishers must charge for niceties like unlimited storage.  They also appreciate that unique, unduplicated services are worth a subscription fee if the information is vital to their job or avocation.

We personally like the model of Geocaching.com, the website that serves the addictions of millions of avid gamers who search for treasures stashed in outdoor locations around the world.  A basic subscription to the site is free, but services that significantly enhance the pleasure of playing the game demand a $30 annual subscription.

Geocaching.com enjoys the advantage of being a near-monopoly in its market.  There’s nothing wrong with that, though.  The publisher has succeeded in providing a comprehensive database of information that its constituents can’t get anywhere else.

We continue to believe it’s highly unlikely that publishers will succeed in establishing an industry-wide paid content model.  Anyone who fails to join the consortium could potentially disrupt the whole deal, and too many alternative sources of free information already exist.  CNN, for example, will never join such a group.  Instead, it will benefit from the vast traffic that will stream to its website when the pay walls go up.

Individual publishers may succeed in charging for content, but they’ll do it with content that serves a vital interest or need in their communities.  There are plenty of possibilities, but they will be exploited by innovative people at the local level, not mandated from the top by a few executives who are motivated more by self-preservation than serving the interests of their audience.

Google said it would have a big announcement at its developer conference this week, and it didn’t disappoint.  Google Wave will be the buzz of the Internet in the months between its demonstration last week and its rollout at an undisclosed time later this year.  Wave has some important implications for the news industry, so it’s a good idea to become familiar with it. Here’s our early reaction.

Wikis are important metaphor for newsgathering.  They enable multiple authors to flexibly contribute information and edit each other’s entries to build a kind of living news account.  Wikipedia is, in many ways, a metaphor for the newspaper of the future.

Google has always liked wikis.  Its search engine results page is being slowly rejiggered to add wiki functionality and recent initiatives like Knol are a Google spin on Wikipedia.

Wave takes the wiki model to a new level with the addition of Twitter-like immediacy along with classic e-mail and discussion techniques like the inbox and threading. Wave also has the ability to handle just about any kind of file you can throw at it.  Adding documents, webpages and media to a Wave workspace is a drag-and-drop procedure, and once the content is there, everyone can edit it.

Open and Extendable

Google Wave has some cool bells and whistles, such as its real-time updates (you can actually see your friends typing, letter by letter), flexible conversation threading and embedded search.  But what’s more important is some of the underlying plumbing.

For starters, the application is open source, meaning that third-party software developers will quickly improve and build upon it.  Google learned its lessons from its Maps service: enabling people to easily extend the engine results in a much richer resource for everyone.  Maps is now the undisputed leader in its space, having displaced some entrenched competitors in just four years.

Second is Wave’s flexibility.  Wikis have always suffered from usability problems in this respect.  It’s fairly easy to edit basic text information, but incorporating multimedia can be a chore.  The Google demo shows people dragging and dropping photos and video files into a Wave workspace with ease, making them immediately available to everyone participating in a Wave.

Finally, Wave is shareable out of the box.  Any Wave can easily be turned into an “embed” and placed on another website.  Visitors can join a conversation from within the embed.  This is kind of like blog comments on steroids.  A real-time interaction can be going on between multiple users of a Wave with the results appearing on many other websites.

Work in Progress

Wave is still demoware, and its first public iteration will no doubt lack many features.  But this looks to be an important new development in the way groups process and build information repositories.  For news organizations, it could be an opportunity to really involve readers in an ongoing conversation that aggregates multiple perspectives and a workspace that is still managed by professional editors.  The real-time chat functionality could be a potent competitor to Twitter.

News organizations have a new problem to solve: information overload.  This is a complete reversal of their traditional service as information gatherers.  Today, the bigger problem is to parse and organize the deluge of information that comes at us.  Google Wave will no doubt add to that deluge, but it also has the capacity to help us organize and make sense of it.

Jeff Jarvis speculates on some possibilities.  Mashable has a comprehensive overview of the product and a first hands-on trial. Google Blogoscoped has the entire one-hour-plus demo from the Google Developer Conference.