Nieman Journalism Lab scored a coup in landing the eloquent and insightful Ken Doctor as a weekly columnist focusing on the economics of news. His analysis of the cost of journalism at California Watch is well worth reading if you want to understand why nonprofit investigative ventures are so popular right now (ProPublica just nabbed its second Pulitzer).

California Watch’s “On Shaky Ground,” an account of the dangerous vulnerability of many California schools to collapse in the event of an earthquake, is “old-fashioned, shoe-leather, box-opening, follow-the-string journalism, and it is well done,” Doctor says. It also cost over a half million dollars to report, an amount that would have caused most newspaper publishers to gulp even before the industry entered its string of 21 consecutive quarterly revenue declines.

But a half million is a relative bargain when you consider the number of media organizations that benefited from it. Pieces of the series ran in six major dailies and were picked up statewide by ABC-affiliate broadcasters. Top public radio stations in the Bay Area and Los Angeles ran with it, and a number of ethnic and online outlets (including more than 125 Patch sites) also picked up the coverage. Many localized the content by snipping local maps or extracting information about their area from the voluminous database of school-by-school information that the project produced.

Doctor notes that California Watch is building a new kind of syndication business around investigative journalism, which is the branch of news that has been hardest hit by budget cuts over the last three years. This is not a reincarnation of the Associated Press model, which mainly delivered breaking news. Bloggers, citizen media and Twitter have diminished the value of that function considerably. What citizen journalism can’t do it spend 20 months developing a story, which is what California Watch did.

California Watch is still “feeling its way along,” in Doctor’s words. Syndication revenue won’t support its current $2.7 million annual budget, so donations are grants are still essential to its livelihood. But look at what donors get for their money: About 70% of that $2.7 million goes to support the project’s 14 journalists. By comparison, a typical daily newspaper’s editorial costs are about 20% of overall expenses. These nonprofit models are vastly more efficient than the newspaper investigative teams they’re replacing.

And when you spread those costs among a lot of subscribers who pay a few thousand bucks a year to get access to the reports, it’s really not that expensive. “An owner…can hardly reject the offer of paying one-hundredth of the cost for space-filling, audience-interesting content,” Doctor writes. Particularly when compared to the value of a single child’s life who might have been saved (hearings are already under way).

Doctor’s analysis raises an important point about the evolving economics of information. In a world in which raw data has become a nearly valueless commodity, value is derived from filtering and contextualizing information for specific audiences. The small California weekly that could never dream of spending a half million dollars on an investigative project can spend a few hundred dollars to buy the work of a dedicated investigative team and then extract the information that’s relevant to its readers.

This is a much more efficient way to deliver news, but taking advantage of it requires discarding treasured assumptions like the not-invented-here syndrome and the belief that scope and scale define importance. It’s good news for local publishers. In the traditional model, only a handful of California papers could have tackled a project the size of On Shaky Ground. Now nearly everyone can share the wealth.

The Long, Slow Bleed

Lest anyone think the lack of major metro daily closures over the last couple of years is a sign of strength in the newspaper industry, consider recent earnings reports. Ad revenues at Gannett, McClatchy, Media General and Journal Communications were all off between 6% and 11% in the first quarter, and there’s no sign of a turnaround. Alan Mutter’s analysis makes an important point about why newspaper advertising isn’t sharing in the sputtering recovery.

The more advertisers of all types experiment with Web, mobile and social advertising, the more they will come to appreciate the power of the digital media to tightly target qualified prospects while granularly measuring the costs and effectiveness of their campaigns.

In sales jargon, the buying process is a funnel, with a large number of uninformed prospects at the mouth and a few qualified buyers at the tip. As consumers increasingly research their purchase decisions online, the need for merchants to advertise their availability declines. They get more leverage from intercepting buyers during the decision-making process. The deeper into that process buyers get, the better the prospect of converting them to customers. And incidentally, vendors only have to pay for actions like clicks and leads, not vague measures  like circulation.

The reason newspaper closures have largely stopped is that the industry’s near-death experience in 2008 – 2009 focused publishers on slashing costs, raising subscription prices and squeezing as much blood as possible out of the stone of an aging and shrinking circulation base. That is not a prescription for growth. We continue to stand by our 2006 prediction that major metro daily print newspapers will all but disappear by 2025. In fact, we think it’ll happen sooner than that. It’s just that death will come from cancer, not heart attack.

Miscellany

The Las Vegas Review-Journal is expanding its business model beyond pure advertising. according to a press release,  a partnership with parent company Stephens Media LLC’s digital arm will enable the Review-Journal to launch a service to  provide local businesses:

…full website, branding and logo design; hosting and customer support for websites and related digital services; email marketing; mobile marketing; training to provide local businesses easy tools to maintain and update their own sites and analyze web traffic; search engine optimization and search engine marketing; customer reputation management with daily reporting; social media presence and tracking tools for digital and traditional marketing efforts to ensure monitoring of ROI.

Hmmm, why didn’t we think of that?

Desperation often drives innovation, and the miserable state of the Las Vegas economy no doubt played a role in this quest for new revenue sources. We think it’s a smart move; most small businesses have no idea how to market themselves online and a local newspaper is a trusted partner that’s in a great position to give them a hand.

AOL’s Patch network of hyperlocal news sites intends to recruit 8,000 bloggers over the next few days. It’s asking each of its 800 sites to sign up 10 community members to blog. No word on whether the contributors will be paid, but given that Arianna Huffington is now running the show, we think we know the answer to that one.

And Finally…

Reports emerged in the Twittersphere early this week that the world’s last manufacturer of mechanical typewriters was closing down its India production plant. A lot of people, including us, were taken in by this. But there’s good news for the old-timers who still appreciate the clatter of metal on paper. Atlantic Wire reports that several factories in China, Japan and Indonesia are still manufacturing typewriters. Even if production shuts down, there’s a pretty good used market. For old time’s sake, we bought an IBM Selectric, which used retail for $450 in the 1970s, for a buck at a yard sale a couple of years back. We’re still not sure what to do with it.

Should journalists avoid expressing opinion in their social media comments for fear of calling their objectivity into question? Or is the myth of real objectivity finally being torn by a global conversation in which everyone is expected to weigh in with his or her views?

There’s a vigorous debate going on over at Gigaom about this subject. It was kicked off by a post by Mathew Ingram, who took issue with a social media policy recently installed at the Toronto Star that prohibits reporters from discussing stories in progress, commenting negatively upon their employer or colleagues or expressing any opinion that could raise questions about their objectivity.

Ingram thinks the policy is nuts, and the story’s headline – “Newspapers and Social Media: Still Not Really Getting It” – leaves no question that Ingram’s objectivity isn’t in doubt. We’re not so sure we agree with him.

We’ve written three books about social media, and we buy in fully to the idea that we are all better off when there is an open and free exchange of views about just about anything. However, a journalist’s ability to behave in an impartial manner – even if he or she has an opinion – is a core skill of the profession.

The issue isn’t whether people are biased or not: Everyone has opinions. It’s whether a professional journalist can put those opinions aside in the name of telling a story objectively. The ability to do that is essential to good journalism. It’s what enabled Alex Haley to draw a revealing interview out of American Nazi Party head George Lincoln Rockwell for a Playboy interview in 1966, despite the fact that Rockwell wouldn’t even look Haley in the eye during the session.

We frankly worry less about how opinions expressed on Twitter may raise doubts about a reporter’s impartiality in the minds of readers and more about how they may influence sources. Another core asset that professional journalists and media institutions bring to the table is access: They can reach people in the know because they’ve earned their trust. Revealing bias about an issue may influence a reporter’s ability to speak candidly to people who hold contrary opinions. That isn’t right, but it’s human nature.

Does this mean reporters shouldn’t engage in social media conversations? Of course it doesn’t. For one thing, the issue is situational. Sports and entertainment reporters for example, have more latitude to share their views than journalists covering a presidential campaign. And even a reporter covering Chicago City Hall probably isn’t going to do himself or his employer any damage by expressing a preference for the Cubs over the White Sox.

Then there’s the issue of language. It’s one thing to called Donald Trump “unconventional” or “controversial,” and quite another to refer to him as a “fruitcake.” Social media has become synonymous with rampant editorializing, but it doesn’t have to be that way. Journalists can add value to a discussion without using inflammatory words. In fact, a voice of reason is often a welcome respite from the flame throwing that characterizes many online debates.

As to the Star‘s prohibition on trashing coworkers or tipping one’s hand on a scoop, that strikes us as common sense. In any case, we suspect the management at the paper would consider the circumstances before taking action against an employee in that situation.

We’re curious about your views, particularly if you work for a media organization. Does your employer put strict limits on what you can say in social media, and if so does it enforce those rules? Let us know, and let’s have our own rational discussion.

Paywalls and Social Media

Mashable looks at three news organizations with paid subscription models and asks how they’re faring in social media. Paywalls are a problem in social channels because they go against the culture of free information exchange. Mashable’s Meghan Peters says encountering a truncated story on a link from Twitter or Facebook is an “unpleasant reader experience.” She talks to community managers at the Dallas Morning News, The Economist and the Honolulu Civic Beat.

All treat their social followings differently, but all are hyper-conscious of not delivering poor experiences to fans and followers. The Economist has actually made its paywall a bit more porous recently. Visitors can now read a limited number of articles each month, whereas previously the entire site was gated. The strategy has produced a surge in social media referrals, says the site’s community manager.

The Civic Beat has what we think is the most interesting strategy. The site is free to casual visitors at any time, but readers who return frequently are asked to subscribe. The timing of the paywall is based upon an algorithm that takes frequency and time spent on the site into account. “If you read a couple of times a week, it will take a while before we ask you to register,” says Dan Zelikman, the marketing and community host.

Miscellany

The New Zealand Press Association (NZPA) is closing after 132 years, apparently a victim to a major subscriber’s decision to go it alone. The NZPA is an agency that employs a staff of about 40 journalists and provides up to 1,000 news items to New Zealand’s news outlets each day. Until five years ago, the agency used an Associated Press-style model in which all New Zealand newspapers shared their content. More recently, it has focused on providing original reporting. The union that represents journalists in New Zealand said the closure was “a huge loss for journalism.”

With their ranks depleted by layoffs, media organizations are becoming appealing targets for pranksters with an agenda. Last week, a group called US Uncut, which describes itself as “a burgeoning grassroots movement pressuring corporate tax cheats to pay their fair share,” succeeded in taking in both USA Today and the Associated Press with a fake press release announcing that General Electric would donate its entire $3.2 billion tax fund to charity. The AP story that ran in USA Today is here. The stunt was pulled off with the assistance of Yes Lab, an organization that describes itself as “a series of brainstorms and trainings to help activist groups carry out media-getting creative actions.”

We expect we’ll see more stunts like these as media organizations continue to pare back on frivolous expenses like copy editing and fact-checking. We’re just waiting for the story about the Nigerian princes with the huge inheritance to share to hit The Wall Street Journal.

A group of bloggers is suing Huffington Post, founder Arianna Huffington, and AOL for $105 million, saying they deserve to be paid more – or ever paid at all – for the content they’ve contributed to the site. The bloggers are miffed by the fact that Arianna Huffington sold the site for $315 million to AOL and didn’t offer to share any of the windfall with the 9,000 or so bloggers who have contributed free content for the last four years. On the other hand, Huffington never promised to pay those bloggers anything, so no contract has been violated.
The plaintiffs actually aren’t challenging HuffPo on contract terms. In a press conference, they said they’re suing under common law based on a claim of “unjust enrichment.” In other words, what Huffington did is just wrong, despite the fact that there was no legal prohibition against her doing it.
Spokesman Jonathan Tasini (above left), who is described as both a union organizer and journalist, had some eyebrow-singeing words for Ms. Huffington. “We are going to make Arianna Huffington a pariah in the progressive community,” he said. “No one will blog for her. She’ll never [be invited to] speak. We will picket her home. We’re going to make it clear that, until you do justice here, your life is going to be a living hell.” Restraining order, anyone?

Journalists Deserting Bay Area

The San Francisco Peninsula Press Club surveyed its membership and found that there wasn’t much membership left to survey. A non-scientific census found that 45% of the 700 journalists “accepted a buyout or voluntarily left their job during a period of downsizing during the past 10 years,” according to a news item posted in the San Francisco Business Times. The wording is vague about whether that means those laid-off journos are still out of work – and only 3% of respondents said they’re currently unemployed – but the research is being interpreted as a sign that nearly half the journalists in the San Francisco area have fled during the last decade.
The findings are unsurprising in light of the massive hits Bay Area newspapers have taken in the face of electronic competition. The San Jose Mercury News has cut well over half its staff in recent years, and the San Francisco Chronicle was only weeks away from being shuttered by Hearst before heavy cost cuts spared its life two years ago. Neither is at all well.

Miscellany

Fortunately, those laid-off journalists won’t have to pay as much for their Amazon Kindles as they used to. Amazon just introduced an ad-supported version of its e-reader that’s priced $25 lower than the version without the commercials. That means the Kindle, which was introduced in 2007 at a price of $399, is now only $114, and we can’t imagine why Amazon doesn’t just drop the price to $99 and make the device an impulse purchase. It continues to make strange decisions in the face of heavy new competition from tablets.
Speaking of which, a survey of 1,431 tablet owners by Google’s Admob mobile ad network found that tablet-toters spend more time with their devices than with magazines, newspapers, radio, laptops or TV (although not combined). We’re not sure if the total includes time spent cuddling the tablets while sleeping, but it was an excuse for Search Engine Watch to put together this nifty infographic (click to super-size).

A group of bloggers is suing Huffington Post, founder Arianna Huffington, and AOL for $105 million, saying they deserve to be paid more – or ever paid at all – for the content they’ve contributed to the site. The bloggers are miffed by the fact that Arianna Huffington sold the site for $315 million to AOL and didn’t offer to share any of the windfall with the 9,000 or so bloggers who have contributed free content for the last four years. On the other hand, Huffington never promised to pay those bloggers anything, so no contract has been violated.

The plaintiffs actually aren’t challenging HuffPo on contract terms. In a press conference, they said they’re suing under common law based on a claim of “unjust enrichment.” In other words, what Huffington did is just wrong, despite the fact that there was no legal prohibition against her doing it.

Spokesman Jonathan Tasini (above left), who is described as both a union organizer and journalist, had some eyebrow-singeing words for Ms. Huffington. “We are going to make Arianna Huffington a pariah in the progressive community,” he said. “No one will blog for her. She’ll never [be invited to] speak. We will picket her home. We’re going to make it clear that, until you do justice here, your life is going to be a living hell.” Restraining order, anyone?

Journalists Deserting Bay Area

The San Francisco Peninsula Press Club surveyed its membership and found that there wasn’t much membership left to survey. A non-scientific census found that 45% of the 700 journalists “accepted a buyout or voluntarily left their job during a period of downsizing during the past 10 years,” according to a news item posted in the San Francisco Business Times. The wording is vague about whether that means those laid-off journos are still out of work – and only 3% of respondents said they’re currently unemployed – but the research is being interpreted as a sign that nearly half the journalists in the San Francisco area have fled during the last decade.

The findings are unsurprising in light of the massive hits Bay Area newspapers have taken in the face of electronic competition. The San Jose Mercury News has cut well over half its staff in recent years, and the San Francisco Chronicle was only weeks away from being shuttered by Hearst before heavy cost cuts spared its life two years ago. Neither is at all well.

Miscellany

Fortunately, those laid-off journalists won’t have to pay as much for their Amazon Kindles as they used to. Amazon just introduced an ad-supported version of its e-reader that’s priced $25 lower than the version without the commercials. That means the Kindle, which was introduced in 2007 at a price of $399, is now only $114, and we can’t imagine why Amazon doesn’t just drop the price to $99 and make the device an impulse purchase. It continues to make strange decisions in the face of heavy new competition from tablets.

Speaking of which, a survey of 1,431 tablet owners by Google’s Admob mobile ad network found that tablet-toters spend more time with their devices than with magazines, newspapers, radio, laptops or TV (although not combined). We’re not sure if the total includes time spent cuddling the tablets while sleeping, but it was an excuse for Search Engine Watch to put together this nifty infographic (click to super-size).