The Atlanta Journal-Constitution is profitable again, and “This ensures that we can continue to produce the quality journalism that you’ve told us is important to you,” crows Publisher Michael Joseph in a 1,000-word tribute to all that the paper is doing for its community. “Our improved financial picture is allowing us to again expand content offerings that are targeted toward what you’ve told us really matters in your lives.”

It will be interesting to see if area readers agree with this publisher’s optimism (comments are disabled on the essay), for the AJC has suffered some of the worst cutbacks of any major metro daily. In early 2009, the paper laid off 30% of its editorial staff, reducing its total size to less than half of what it was in 2006. Distribution to seven outlying counties was discontinued, coming on top of an earlier decision to cut all its regional editions. The AJC daily circulation fell 52% between 2002 and 2010, although some of that loss was self-inflicted due to distribution cutbacks.

The question is whether a newspaper with a staff of 230 journalists can produce the same quality of material as one with 500. We don’t want to dismiss out of hand the possibility that it can, but it won’t look anything like the paper it was a few years ago. In a desperate bid to survive amid its circulation free-fall, the AJC has completely upended its editorial model over the last five years, turning most of its attention to the suburbs and vacating its downtown offices in August in favor of cheaper space near the northern suburb of Dunwoody It has taken steps to address a perceived left-wing bias and chosen not to endorse candidates in recent elections. The AJC has partnered with local Cox TV and radio stations on tag-team reporting projects, attempted to partner with local weeklies to share content and even run occasional pieces from Demand Media, the crowdsourced editorial engine that assigns stories by keyword relevancy.

Can you cost cut your way back to success? The AJC will be on the leading edge of answering that question. There’s nothing like a near-death experience to focus the mind, and in slashing its costs, the paper has had to make some grueling decisions. Its experience is probably familiar to many in the industry, where the shift of the audience to the suburbs has challenged publishers to remain relevant at the local level its audience cares most about. It helps that the AJC has a near monopoly in its market, and that its website is the default destination for news about all things Atlanta. There’s nothing particularly special about its Web presence, but it was one of the first major dailies to release an iPad app.

Its free classifieds service is an acknowledgment that there is no more money in that business anymore. The question is where the revenues are going to come from? A lot of eyes in Atlanta will no doubt be on The New York Times as it attempts to launch a paid online subscription model in the first quarter. For a paper with the regional clout of the AJC, that may be just what the doctor ordered.

The New York Times asks if comedian Jon Stewart is the modern-day Edward R. Murrow, citing Stewart’s advocacy for legislation awarding health-care benefits to 9/11 responders that passed in the last hours of the 111th Congress. Stewart devoted his Dec. 16 show to the bill, which had received little coverage in mainstream media and was about to die with Congress’ adjournment. That show is widely credited with having resuscitated efforts to get the measure approved. Stewart says he isn’t a journalist, but the Times points to similar advocacy reporting by Murrow and Walter Cronkite that shifted public opinion about events in their time, and suggests that Stewart’s appeal to young audiences may kindle an interest in advocacy journalism by a new generation.

People passing by newsstands in Sacramento may do a double take when they hear the “talking news rack” deliver a 15 second recorded message each time a newspaper’s purchase. The news racks also have a scrolling LED that can display news, messages from the editor and even ads.

In the weeks before her death from the rare disorder of peripartum cardiomyopathy, Shana Swers documented her ordeal on Facebook. Reporter Ian Shapira was intrigued, and when the Washington Post assigned him to tell the story, he chose to anchor it in Swers’ own Facebook posts. The clips from Swers’ wall were annotated by Shapira, who did the traditional blocking and tackling of interviewing family members and medical experts, but the writer chose to sacrifice the journalist’s traditional privilege of owning the narrative. The piece is already being held up as one of the most innovative alternative news stories of the year. Mallary Jean Tenore provides more background on Poynter.

Paywall Notice from the Financial Times

How much will The New York Times charge per month for unlimited access to its Web site when it debuts a firewalled service early  next year? Ten bucks. At least that’s the median consensus of the nearly 10,000 Slate readers who have taken a poll aimed at projecting the access fee, which remains a mystery more than 11 months after the Times announced plans to charge a fee in January. The average fee suggested by the crowd is actually somewhat lower – $8.30 – but we like $10 because it’s such a round number. We’d like it even better if hundreds of Death Watch readers stormed the Slate site and voted $1 to bring the average down. That might turn heads at 620 8th Ave.

Poynter’s Rick Edmonds pried a few more details out of Times executives about the much-anticipated online access charge. He thinks $19.99 is the nut. That’s what the Times charges for its Kindle version, so maintaining that price for standard Web access would minimize price conflict. Times Co. execs are also on record as saying that visits that come from links won’t be firewalled, but readers presumably won’t be able to navigate to other parts of the site without paying a fee.

Edmonds runs the numbers: of NYT.com’s 40 million monthly unique visitors, 15% are considered “heavy” users (viewing 40 or more pages per month), and so are the ideal candidates to convert to paid online subscribers. If there are six million of those people, and if 5% of them can be converted to paying customers, then that drops an additional $6 million to the bottom line each month. That’s a drop in the bucket compared to the Times Co.’s overall annual revenues of $2.4 billion, but it’s also pure profit. It might help offset the $13 million quarterly impact of recent price increases for newsprint, a line item that’s expected to continue growing more than 10% a year for the foreseeable future. Ouch.

Corky Boyd thinks the Washington Post will be the spoiler. While newspaper industry executives huddle in secret confabs that have overtones of price-fixing,  the Post has been militant in insisting it won’t charge for access to its website. Boyd thinks the Post is awaiting a windfall of readers when the walls go up in Manhattan. “If the Times goes the pay route and the Post doesn’t, the Times readers will gravitate to the Post, jeopardizing the Times’ reputation as the ‘newspaper of record.’” Perhaps, but we’re not so sure the Post‘s Beltway-centric view is going to appeal to the average Times reader. We think it’s more likely that the audience will simply continue to fragment as it has for years. Readership is increasingly driven by search engines, RSS feeds, tweets and e-mailed links, not brand loyalty. Price-sensitive readers will find their new sources wherever Google takes them.

Gaming the System

How many e-mails does it take to move a story on NYT.com onto the hallowed “most e-mailed list?” About 1,300. At least that’s what Thomas Weber estimated after he and a global team of lackeys recruited via Amazon’s Mechanical Turk service moved an obscure, three-week-old story from the Science section to the second slot on the list. Writing on the Daily Beast, Weber describes how he conducted dry runs in the weeks preceding the Dec. 14 experiment to first see what it took to move a story onto the list in the Science section alone (about 45) and then to break into the top-25 list for the NYT.com site as a whole (about 300).

Conclusion: “Out of the 30-plus million Times website visitors each month, it takes only one out of every 25,000 emailing a particular story to secure it a spot, at least for a day, in the hallowed most-emailed list.” Which indicates that the wisdom of crowds can be manipulated by the wisdom of a very few people within the crowd. We’ve always known this, of course; story placement on Digg.com is famously influenced by less than 1% of its visitors. Weber’s experiment demonstrates, though, that a carefully coordinated campaign by just a few hundred people could gain something like a positive movie review considerable visibility at little or no cost. Maybe others figured this out long ago and just haven’t told us about it.

Keep an Eye on Patch.com

AOL’s rapidly growing Patch.com local news network is beginning to draw some veteran journalists to its fold, or at least that’s the case in LA. Writing in the Los Angeles Times, James Rainey tells how veteran reporter Nancy Wride scooped the Long Beach Press-Telegram with her reporting on a police shooting that happened just two blocks from her home. Wride worked at the Times for nearly 30 years before being caught in one of that paper’s many layoffs. She now splits her time between mothering and tending the Patch site in Belmont Shore. Several of her former colleagues from big media have joined her on a freelance basis, including “former Times photographer Lori Shepler, former Times outdoors writer Pete Thomas and former KFWB radio reporter Sharon Katchen.”

It isn’t just Belmont Shore that’s enjoying the bounty. Rainey lists a handful of other local media fixtures who contribute to Patch. The pay isn’t so good, and the hours can be long, but at least it’s some reward for people to do what they do best. Patch just opened its 600^th local outlet and is continuing to hire aggressively. Its jobs page lists 236 open editorial positions.

Miscellany

Online ad spending nearly doubled in 2010 and is expected to surpass print newspaper revenues for the first time, according to eMarketer. Meanwhile, print revenues are expected to continue their tailspin in 2011, dropping another 6%. EMarketer now estimates that by the end of next year, annual print revenues will have dropped an astonishing 55% in just six years and total industry revenues will have fallen by half.

If you use the venerable Delicious.com bookmarking service, you should be aware that owner Yahoo is trying to get rid of it. Yahoo says it had no intention of shutting down Delicious, which used to go by the geeky URL of del.icio.us, but that the site is no longer a strategic fit. We wonder just what is a strategic fit any more for the aimless Web directory.

And Finally…

The movie-making site Xtranormal had somehow evaded our awareness until a friend sent us a funny/sad/provocative video about a would-be journalism student. The site lets you create movies by submitting a dialogue in text and choosing avatars to play the characters. The characters speak in a monotone and gesture robotically, which makes the result all the more amusing. Only some of the topics can be quite vicious. For example, check out “So You Want to Go to Law School,” which has more than one million views on YouTube. In the meantime, we hope the dialogue below helps make your season bright.

Judy Sims nails it with this post about the denial that continues to plague the news industry. While paying homage to Journal Register’s John Paton, she asks why there aren’t more like him? Newspaper revenues have contracted by more than half in the last five years, yet the leadership at these companies continues to look for ways to bring back the past with $30 iPad apps and subscription models.

The end of the newspaper industry as we have know it is approaching more rapidly than anyone predicted. What better time to make meaningful changes than when facing your own mortality? This means discarding all assumptions, re-evaluating your whole value proposition, your business model, staffing, everything. Sometimes you have to kill the business in order to save it. Sims writes:

The first thing a realistic news exec needs to do is understand their disruptor…The Internet is not just another content distribution method.  It is social.  It is collaborative.  That means accepting that they are no longer publishers or broadcasters having a one-way “Gutenberg era” conversation with the masses.

Next, a realistic news executive has to admit that they don’t know where the business model is going.  That takes guts.

We are reminded again of Paton’s comment about the “aging managerial cadre that is cynically calculating how much they DON’T have to change before they get across the early retirement goal line.” Why aren’t boards of directors firing these people and bringing in management without legacy baggage? Or, as Sims puts it, “why aren’t Rafat Ali, Mike Arrington, Om Malik et al invited onto mainstream media boards?”

Good question.

Miscellany

Nieman has a great post about why the WikiLeaks disclosures are good for both the public and mainstream media. Nikki Usher writes that the 251,000 leaked cables gave media organizations a perfect opportunity to demonstrate their value by doing what citizen journalists couldn’t, namely, sorting through the mountain of material and getting perspective and commentary from top administration officials. These are two things that professional journalists do exceptionally well. But the public was also allowed to see the same stuff the media was seeing, she writes, and that’s a victory for public access. Usher contrasts the WikiLeaks case to the Pentagon Papers disclosures of the 1970s. In that case, the public was only permitted to read less than 2% of the leaked documents and was unable to discuss them with each other in any meaningful way. Today, both mainstream and citizen media have access to the same source material. “This is a moment of glory for all those who talk about crowdsourcing, user-generated content, and the like. Perhaps this is the ultimate form of users helping to create and shape the news,” she writes.

The Sonoma Index-Tribune has dropped its three-month-old paywall. Is it a coincidence that it canned the $5 monthly charge shortly after AOL’s Patch.com opened a free outlet there? We think not.

The Brenda Starr comic strip will end its 70-year-run on Jan. 2. It joins Cathy on the list of recent comic casualties. Not a good year for female cartoon figures.

We won’t try to paraphrase the presentation that Journal Register Co. CEO John Paton gave to the INMA Transformation of News Summit last week because Paton stated everything so beautifully. So we’ll just give you a few quotes from the transcript that we highlighted. Paton gets it like no other news executive we’ve encountered.

“You don’t transform from broken. You don’t tinker or tweak. You start again – anew

“Doing more of the same with less results in the same done worse. It is prolonging the death of a broken business model rather than adapting to the realities of the present.

“Just about everything we are doing at JRC – and just about what every newspaper or legacy media company is doing – is focused on getting ON the Web. Very little is being done to position legacy media companies to be OF the Web.

“There is now an even bigger audience for our core product – news – than ever before.  And in the crowded marketplace that is the Web, it is the deep trust the audience has for print that is leading us and them online.

“To be in the news business now means you must run your business as digital first.  And that means print last. That is how this new world works.

“[The reason the industry isn’t changing faster is] fear, lack of knowledge and an aging managerial cadre that is cynically calculating how much they DON’T have to change before they get across the early retirement goal line. Stop listening to the newspaper people and start listening to the rest of the world.

“We are getting out of anything that does not fall into our core competencies of content creation and the selling of our audience to advertisers. Reduce it or stop it. Outsource it or sell it.

“We bought every reporter – and now some ad salespeople as well –a Flip video cam. They paid for themselves in about a month as we have gone from 100,000 video streams a month to about two million.

“One [JRC] group in Pennsylvania is trying to meet a challenge set by Jay Rosen [called] the ‘100% solution:’ Cover everything that happens on a particular subject in a particular area. Using the crowd, Twitter, smartphones plus Google Docs to manage it all, they are attempting to create real-time game coverage of high school sports. That’s every game in real time.

“Citizen Skip Harrison of Trenton New Jersey has an all-abiding interest in the New Jersey educational system. He is part of the Community Media Lab at our paper The Trentonian. We are training interested citizens to be journalists.

“We have successfully printed pages on a press using only free Web tools. The next time some rep comes to your shop brandishing a $20 million system, tell him the price just went down. Way down. Our capital expenditures have been reduced by half.

“In Torrington, CT at the Register Citizen, our young publisher Matt DeRienzo deputized his entire community to fact check all of his products online and in print…He issued an invitation to every reader, source and community member to hold them accountable and engage in correcting, improving or expanding the story. Matt’s innovative approach…has created an online audience 6.5 time greater than his print audience and he has taken what was a money-losing operation into a profitable one.

“As of Q3, year to date, the Journal Register Company[‘s financial performance] is handily outpacing the industry as compared to figures provided by the Newspaper Association of America. JRC’s ad performance has been three  times better than the industry. More importantly the company’s digital revenue has grown from negligible to 11% of ad revenue in November – in less than a year. With each passing day, that revenue is also less tied to the print buys. More than 60% of digital revenue this month is NOT tied to print sales. Our company which was bankrupt in 2009, is projected to have a profit margin of 15% this year.”