It’s the pit of winter and the economy is stuck in molasses, yet the tone in the newspaper business has turned brighter. The few publishers who aren’t weighed down by crushing debt are talking tough and a paid news model is getting renewed attention.

Charlie Rose convenes a panel of industry notables, including The Wall Street Journal‘s Robert Thomson, Time‘s Walter Isaacson and New York Daily News owner Mortimer Zuckerman, who provides comic relief (See “And Finally…” below). The issue is “The Future of Newspapers,” and Poynter has thoughtfully provided a transcript.

Thomson’s comments are the most insightful. He hits the nail on the head with his description of Google as the great leveler: “Google is great for Google, but it’s terrible for content providers, because it divides that content quantitatively rather than qualitatively.” He also has razor-sharp criticism for editorial arrogance. “There’s a great tendency for journalists to be high and mighty, and to underestimate the intelligence of readers. And I think one of the reasons they’re losing readers is for that very reason.” And he says the Journal now “loves” the paid-subscription model it considered abandoning only about a year ago.

Everyone marvels at the new Amazon Kindle (right) and declares that it may be the last chance to create a reader-funded news model. Isaacson says the challenge for newspapers is to “prevent us from giving it away for free on the Kindles…just like we gave it away for free on the Web. We’ve got one more shot at it… Let’s make some really cool…applications we can…actually charge for.”  Tom Foremski and Greg Sterling both have interesting comments on the roundtable.
Watch the video here:

Making the Case

The New York Times has an op-ed by Eduardo Porter that argues that no other entity can take newspapers’ place. Citing numerous historical precedents, he argues that populations with an active media enjoy higher voter turnout, better government services and a higher standard of living. “During the Great Depression, the Federal Emergency Relief Administration doled out more money in counties with more radios,” he writes, in just one example. “Today, Hispanic voter turnout is higher, relative to the non-Hispanic vote, where there is a local Spanish-language TV station.” He also says television has been cited as an important factor in declining voter turnout beginning in the 1950. Porter’s use of these distant mirrors is novel, but his assumption that it takes a newspaper for a population to achieve these benefits is a bit of a stretch.

The former CEO of Cox Newspapers makes a plea for embattled newspaper companies to fight back. Jay Smith retired eight months ago, just as the walls were beginning to cave in, and he recently joined with three top executives from the business to talk about the industry’s plight. “Their passion and enthusiasm contrasted with…the bleak forecasts for newspapers,” he writes. “Their voices have not been heard much, but they should be.” In particular, “Donna Barrett, who runs the 140 newspapers of Birmingham, Ala.-based CNHI Inc., says nothing in the financials of her company resemble the gloom and doom she reads about.” And the publisher of Parade magazine says he’s still delivering a convincing ROI to advertisers.

Smith is right that these publishers aren’t being heard, and why not? If CNHI is bucking the industry trend, we’d think the Newspaper Association of America would be parading her around like a football hero. It’s odd that those individuals are so quiet when their business is under such siege.

Speaking of sieges, check out the comments at the end of this piece. They’re typical of the reactions we see to published commentaries on the industry’s future: political bashing of the media by both left- and right-wing ideologues accusing newspapers of liberal or conservative bias. This response is so common that we wonder if it’s a coordinated campaign. The comments invariably have nothing to do with the original commentary. They seem designed to spread some kind of agenda. Does anyone have a theory as to why this criticism turns up with such mind-numbing frequency?

But Will They Pay?

Eric Alterman, who penned last spring’s riveting account of the newspaper industry’s problems in The New Yorker, updates the scene in a shorter account on The Nation. Unfortunately, he has no better ideas for saving the industry than anyone else. Alterman recaps the solutions that have been proposed, ranging from micropayments to charitable support, and finds them all wanting. And he points out that the core news section of the typical major metro daily is the part most at risk. “Ironically, it is the sections of the paper most crucial to informed democratic discourse that are in danger of disappearing,”Alterman writes. “Sports news, entertainment news, health news, fashion, celebrity and style reporting will always be with us in one form or another, because they are such delightful places to advertise.” In contrast, no one wants their ad to appear next to a story about an airplane crash.

Writing on Nieman Journalism Lab, Matthew Ingram basically agrees. Ingram recaps the recent debate and says there’s no way readers are going to pay the freight. “Newspapers have never been paid directly by readers for the news,” he writes, adding that subscription and or newsstand fees cover, at best, a few pages worth of production cost. “What newspapers need to do is find ways of creating content that is more valuable than the perishable daily news.” Ah, but that is the problem. No one short of a few specialized publishers has figured that one out.

Miscellany

Three weeks after it pulled the plug on a print advertising program, Google has cancelled a second offline initiative. Google Audio Ads was the second leg of the stool that Google was building to support its expansion into offline advertising. Like Print Ads, the program was meant to upsell airtime to search advertisers. However, the radio industry never much took to the idea, seeing it as a way to commoditize its business. Only one major station owner, Clear Channel Radio, signed on to the program and many smaller networks gave Google the cold shoulder. The search giant still has a similar program to sell television ads and analysts say that one probably isn’t going away soon. About 40 people will lose their jobs.

Have you tried the The New York Times’ new article skimmer? We just did and pronounce it cool. The as-yet-unnamed service (though we like “skimmer” just fine) attempts to recreate the experience of scanning a printed newspaper on a computer screen. Each “page” includes a tiled assortment of summaries and sections slide pleasingly into place. Coolest feature: “Instead of displaying dates, articles gradually fade as they get older,” says a post on the Times‘ First Look blog. ReadWriteWeb notes that it would be nice if you could read the articles in the same interface. But first things first. This is a nice new idea.

And Finally…

Is Mortimer Zuckerman losing it? Or perhaps the collapse in value of his Manhattan real estate holdings has addled his mind just a bit. In this exchange from the Charlie Rose interview referenced above, Zuckerman oulines his plans to turn around the Daily News through the addition of color:

I committed to the new presses out of sheer passion 18 months ago…They will dramatically increase our revenues, because we’ll have all color, and this will increase our advertising revenues, and it will also increase our circulation, because it will be a completely transformed visual product.

The Daily News is one of the last newspapers to go to color. Printing in color isn’t helping anyone right now. But just wait a few years and Zuckerman’s daughter will figure out the solution:

I own The Daily News and I’m determined to keep The Daily News going because my daughter, who is 11, is now committed to be the next publisher…She’s agreed. She liked the working conditions. She liked the demands.

Rose comments, delicately, “Most people would hear you say that, and they would say, you know, he doesn’t — with all due respect, you don’t get it.”

Over the last few weeks, the mood in the news industry has shifted from a kind of morbid resignation to one of fiery indignation over the forces that are tearing apart a once-mighty business. The promising development is that media supporters have stopped trying to resurrect a dying print industry and are now focused on saving the essence of quality journalism. They’re getting creative in their approaches. Below are a few recent opinions.

Lean, Mean Media Machine

Writing in the Dallas Morning News, John Chachas says the time has come for the US government to jettison old cross-ownership rules and grant media companies broad license to prosecute people who steal their content.

Chacas, who co-heads the media practice at Lazard, proposes granting news organization “a finite (36-month) anti-trust law exemption to permit deployment of an industry-wide system to track and charge for re-use of their content.” Today’s bloggers thumb their noses at the organizations whose content they steal, and newspapers’ unwillingness to defend their value is their undoing, he says.

Chacas also calls on the government to repeal laws that prohibit media cross-ownership in regional markets. Information no longer knows geographic boundaries, he says, and laws that make it easier for the Los Angeles Daily News to merge with The New York Times than with the Orange County Register are a set of handcuffs on media businesses. Conversely, it’s no longer relevant for the government to try to preserve multiple voices in a market when readers and advertisers no longer believe they’re needed. His four-point proscription is an intelligent call for legal and legislative change.

Reinvent the Model; Save What’s Best

The New York Times rounds up opinions from thought leaders around the industry. The consensus: stop trying to revive the traditional model and focus on finding places to add value.

MinnPost.com CEO Joel Kramer says news organizations will need to derive more revenue from readers in the future, even if that means shrinking circulation: “A newspaper that sold 400,000 copies at 50 cents daily and $1.25 on Sunday might sell only 100,000 at four times the price. But there would be a business incentive to keep quality high, because each extra copy sold should increase profit, not subtract from it.”

Steven Brill mostly agrees. He says the key is to find the crevices where local information needs aren’t being served: “Local newspapers are the best brands, and people will pay a small amount online to get information – whether it be a zoning board meeting or a Little League game – that they can’t get anywhere else.”

Geneva Overholser of the Annenberg School of Journalism is in the same camp. She sees value in a hybrid of community journalists and professional publishers. “These changes will be difficult for newspapers which have considered themselves the primary newsgathers, but they may lead to the next chapter of American journalism,” she writes.

Craig Newmark, whose Craigslist.org is often seen as the Great Satan by the newspaper industry, says media companies need to involve their readers in the process of determining what they do. Quoting David Weinberger, Newmark says, “a paper should be perceived as ‘ours’ (the public) not ‘theirs’ (the owners).” Perhaps the Great Satan is really the newspaper owners.

Author Andrew Keen picks up the thread, suggesting that the future is in a layered model in which community members contribute information that’s then organized by staffs of professional editors. “Rather than slithering into the democratic swamp of crowd-generated content, smart local publishers should focus on their core expertise – the organization and curation of information by professionals,” he writes.

Edward Fouhy of the Pew Center for Civic Journalism tells the story of three small operations that are proud of providing balanced, accurate coverage of local news. “Citizens are inventing a new form of locally based and financed journalism while preserving the values of accuracy, objectivity and independence,” he writes, hopefully.

There are more than 180 comments as of this morning. Thankfully, they are mostly free of the partisan politican ranting that seems to plague this discussion.

BTW, Jack D. Lai thinks micropayments are stupid and he’s got a long list of links to people who agree. It’s an impressive archive and we really hope to get around to reading it all.

Micropayments with a Twist

Steve Outing opens his Editor & Publisher column by dissing micropayments (“that model will only hasten newspapers’ death spiral”) and then goes on to make a passionate case for…micropayments! Okay, we’re oversimplifying. What Outing doesn’t like is the idea that each publisher would have its own system for charging people a few cents to consume its content, sort of like running a PayPal button in the sidebar. He’s right: That’s a dumb idea. The solution may be in a service like Kachingle, a system that distributes payments to website owners based upon their readership.

Kachingle users only have to set up and fund one account. Whenever they visit a site that’s part of the network, Kachingle allocates a portion of their account to that provider. If Newspaper Death Watch gets 20% of your monthly visits, then the owners get 20% of the payment you set aside. Thanks! Readers decide how much they want to pay and Kachingle takes care of the accounting. In theory, the value of the network grows as membership expands. The New York Times may be helping Newspaper Death Watch by joining the network, but the equation also works in reverse. Somehow, we think we’d get the better of that deal.

Steve Outing is nothing if not thought-provoking. Although this column is a tad more enthusiastic than his usual fare, he’s found an interesting model to promote. Hopefully, the column will still be available at SteveOuting.com after E&P inevitably pulls it off its website. You can also comment at SteveOuting.com, but not at E&P.

Miscellany

Last month we told you about The Printed Blog (“Extra! Extra! Blog All About It!”) a startup that’s proposing to reinvigorate print publishing by harvesting content from local bloggers. Simon Owens called up founder Joshua Karp and found an Internet entrepreneur who’s serious about print.

“The print newspaper doesn’t need to go away simply because it’s on paper,” Karp told him. The problem is that publishers haven’t revisited the way they produce their printed products to include the work of the community. The Printed Blog is on thin financial footing unless more funding can be found, Karp said. He’s funding the first issues himself and needs to find venture capital “over the next few weeks.”

They dribble out the news about cuts at the Honolulu Star-Bulletin in this story. The paper will lay off 17 people but wait, there will probably be more. The neighbor island bureaus will be shut down. Oh, and there’ll be a redesign from a broadsheet to a tabloid. Praent Oahu Publications is also discontinuing its Friday edition of the MidWeek tabloid. You have to stick with this story to the end in order to learn everything.

The Charleston Post and Courier has laid off 25 employees after a buyout failed to achieve cost reduction goals. When the company announced its buyout offer in July, the newspaper reported that it had 513 full-time and part-time employees. It will employ 460 people after the latest cuts.

A campaign for micropayments is beginning to gather steam in the news business, so now’s a good time to look at what journalists can learn from the recording industry.

Walter Isaacson’s lead piece in Time about How to Save Your Newspaper has got people talking. Isaacson argues eloquently that the iPod and the Kindle have paved the way for a business model based on “micropayments,” in which readers pay a few cents for content that’s easy to access, legal and convenient:

“We have a world in which phone companies have accustomed kids to paying up to 20 cents when they send a text message but it seems technologically and psychologically impossible to get people to pay 10 cents for a magazine, newspaper or newscast,” he writes. “The key to attracting online revenue, I think, is to come up with an iTunes-easy method of micropayment.”

Isaacson is dead right. The only salvation to newspapers’ current dilemma is to find a way to reverse that tide that has conditioned readers to believe that information should be free. Now is the time to start.

The End of Free

Can you really put the genie back in the bottle? Conventional wisdom is that once newspapers began giving away their stuff for free, the game was over. But history has shown that that isn’t the case.

A decade ago, Napster briefly tried to make music free. When the Recording Industry Association of America applied legal pressure to shut down Napster, the wisdom was that music-sharing would simply be driven underground in a maze of peer-to-peer networks like BitTorrent and BearShare. That happened, but only to a degree. Apple’s pay-by-the-drink model has flourished and even BearShare has shed its spyware-ridden past in favor of working with music publishers. Free file-sharing will always exist, but the music industry has successfully convinced fans that swapping copyrighted material is wrong.

The recording industry thought it killed Napster, but what really put the stake through its heart were bands like Metallica, who went directly to their fans with a passionate argument that pirating music was killing the golden goose.

Artists Drove Transformation

The evolving model in the recording industry harnesses the best of both worlds. New bands freely give away their music in hopes of generating a following that can be monetized in paid downloads and concert tickets. Successful indy bands like The Airborne Toxic Event enable their fans to stream songs on their websites but charge for the convenience of downloading. These bands are making money by earning the right to charge for their work.

The reason a legitimate paid model is evolving in the recording industry isn’t because recording companies are driving it. It’s because the bands are. The secret has been a grass-roots campaign by individual artists to convince their fans that music has value and that every 99-cent download is a vote for the band to continue its work.

So what’s the lesson for the news business? For starters, it’s that the solution doesn’t begin with newspaper companies but with individual journalists. Newspaper publishers won’t convince readers to pay for information because their motives are suspect. They’re too invested in the print model, just as the recording industry is too invested in CDs. This is the problem with campaigns like The Newspaper Project. It tries to convince people that newspapers have value, but people don’t care about newspapers; they care about information.

The only way a micropayment model can flourish is if individual journalists carry the flag. It’s up to reporters and the emerging breed of online news organizations like Talking Points Memo to convince their fans to fork over a few pennies to consume their stuff. Perhaps these organizations can steal a lesson from the music industry by giving away their content free on their website but charging for downloads to a Kindle. If readers perceive the value, they’ll pay.

Diversify Revenue

The second lesson is that journalists need to diversify their revenue models. Long Tail author Chris Anderson has proposed that in the future, people who make their living producing digital content will have to give away a version of their products for free and charge for something else: perhaps the convenience of a download, a speaking fee or even a printed version of the same information.

The key is to discard assumptions that news can only be delivered by large monopolistic organizations with legions of journalists whose salaries are funded by advertising. In the future, the brands of individual journalists will be just as important as those of the news organizations they work for. If some prominent columnists and editors can mount a campaign to convince readers that content deserves to be funded, a new model can emerge.

Prior to the dot-com collapse of 2001-2002, a lot of information was being given away for free. The bursting of the venture capital bubble forced the survivors to figure out sustainable business models. Most failed, but those who succeeded kicked off a new round of growth. The same can happen in the news industry. It will take a grass roots effort by those who deliver the news to change the minds of the reading public.

What do you think? Can micropayments save the news business? Post your comments here.

Newspaper companies went on the offensive this week, launching a public relations campaign to rebut forecasts of their impending death and boasting that more people read a newspaper the day after the Super Bowl than watched The Big Game.

The group was conceived by executives from Parade magazine, which wouldn’t exist if it weren’t for its weekly insertion in Sunday newspapers, and people from three other companies: Community Newspaper Holdings, Philadelphia Media Holdings and Cox Newspapers. Philadelphia Media Holdings, which owns the Philadelphia Inquirer, is teetering on the brink of insolvency and Cox has put 29 of its newspapers up for sale. In other words, the group hardly represents the pinnacle of management excellence in a troubled industry.

Nevertheless, the Newspaper Project launched with a website and ads that appeared in 300 newspapers on Monday. Here’s a PDF, if you’re interested. So far, the website appears to be mainly a linklog of material that’s appeared elsewhere, but the slate of authors is impressive. “Future ads will highlight the civic value of news content and how well print advertising continues to work for many businesses,” says Poynter’s Rick Edmonds.

It’s good to see the industry standing up for itself, but it’s depressing to see this initiative so focused on print. We agree with Ken Doctor, who was quoted applauding the project by the AP but who pointed out correctly that a name like “Newspaper Project” demonstrates a backward-looking perspective at a time when the industry really needs to talk about the future. Running kickoff adds in 300 newspapers strikes us as a recursive exercise to promote the industry to its existing audience, although the decision was no doubt heavily influenced by the availability of free ad space. Perhaps the group will focus future messages on the essential role newspapers play as sources of online news. That message is more likely to resonate with the disconnected under-40 audience.

P.S. Speaking of Philadelphia Media Holdings, owner Brian Tierney has reportedly asked the governor of Pennsylvania for state aid to keep the Inquirer and Daily News afloat. State aid may be the only option, since the company already missed a debt payment last September and survives at the benevolence of its creditors.

P.P.S. Monday was “National Buy a Newspaper Day.” The grass-roots effort was conceived by reporter Chris Freiberg of the Fairbanks Daily News-Miner, who set up a Facebook group and recruited 20,000 people to pledge to do their part for at least one day. We did by picking up a copy of the Orlando Sentinel. Another Facebook group has now formed targeting Feb. 13 for a similar action.

Gillmor Weighs in On Nonprofit Debate

Last week’s New York Times op-ed promoting the idea of funding newspapers as non-profit ventures continues to draw the ire of new-media advocates. Dan Gillmor, who practically fathered the citizen journalism movement, bluntly dismisses the proposal by two Yale financial analysts as “shallow thinking” and says that plenty of innovative for-profit business models are emerging. Expanding on comments we reported earlier (see “Voice of Reason in Nonprofit Debate”) Gillmor argues that the flaw in current save-the-industry thinking is that the industry as we know it deserves to be saved. Newspapers “have been systematically looted over the years, to send money to far-off corporate headquarters to pay fat executive salaries and boost stock prices. Preserve them? Why would we want to do that?” he asks.

The role of non-profits is to preserve worthwhile markets that can’t support profitable ventures, notes Gillmor, a veteran newspaperman. There are certainly some unprofitable newspaper functions that deserve to be supported, such as covering city council meetings, but “a great deal of the community information we’ll get in a few years will come from for-profit sources… We’re seeing an explosion of innovation now.”

Gillmor is right on the money. Endowments, public trusts and government funding shouldn’t be dismissed as a means to fund journalism in the public interest, but to use charitable contributions to fund a badly broken business model is, you know, paving the cowpaths.

Blaming Google

Recovering Journalist Mark Potts takes a machete to a recent column by former Washington Post editor Peter Osnos in which Osnos blames Google for profiting from links to newspaper content. Google has replaced Craigslist as the industry bogeyman in recent months, despite the fact that it has tried harder than any other successful Internet company to find ways to shore up the print business. Complaints that Google is harvesting the hard work of newspapers through links from Google News ring hollow, Potts says, when you consider that Google News doesn’t carry any advertising. Newspapers fail to appreciate the fact that Google sends them 20% to 30% of their online volume, he notes, and they ignore the fact that many do a lousy job of optimizing their pages for Google Adsense, the result being that the search giant ends up serving generic ads with poor click-through performance to stories that deserve better.

In a comments exchange, Potts piles on further, noting that the newspaper industry is uncomfortable with the notion of real competition. “Google and Yahoo control more than half of local online advertising spending,” he notes. “That’s disgraceful–and the shame lies entirely at the feet of newspapers, for failing to adequately pursue local online ad opportunities.”

Murdoch has NYT Envy

Rupert Murdoch “sits around all day and thinks about buying The New York Times,” said Murdoch biographer Michael Wolff in a Tuesday session at the Harvard Business School Club of New York. Murdoch also thinks the Times‘ financial saga will play out soon and there’s a fair chance Murdoch will end up with his trophy, Wolff said. That won’t necessarily be a bad thing for the Old Gray Lady, since Murdoch’s Wall Street Journal has managed to avoid layoffs until now.

Wolff had few kind words for Carlos Slim, the Mexican billionaire who recently invested $250 million in the New York Times Co. at generous financial terms. “He’s our national embarrassment. He’s a crook,” the author said, quoting a source in the Mexican media. In contrast, Murdoch is a pure newspaperman, he said. And despite Murdoch’s reputation for exploiting sex and violence to sell newspapers, he hasn’t messed with the Journal’s editorial quality.

That argument isn’t satisfying Pali Research analyst Rich Greenfield, a vocal critical of newspapers who has neverthelss been a staunch supporter of Rupert Murdoch. Not any more. Greenfield has cut his guidance on News Corp. a rare two levels from “buy” to “sell,” citing lack of strategy. “While we have long viewed Rupert Murdoch as the most visionary CEO in the media sector…we are increasingly surprised/frustrated with his lack of strategic direction related to News Corp’s television station, newspaper and book publishing assets.”

Meanwhile, Portfolio magazine says two sources say there will be 50 layoffs at the Journal next wek.

Miscellany

Two Canadian newspapers – including the giant Globe and Mail of Toronto – announced layoffs. The deepest cuts come at the 110,000-circulation Halifax Chronicle Herald, which is idling 24 of its 103 staff members, or almost a quarter of the workforce. “The numbers just kept getting worse and worse and worse and we just don’t know where they’re going to end,” said Dan Leger, the Chronicle Herald‘s director of news content, in a dour summary. The Globe and Mail laid off 30 people on top of the 60 who had taken an earlier buyout offer. That’s about 11% of the total workforce.

More newspapers are trimming publishing schedules to cope with the advertising downturn. In Ohio, the Troy Daily News, Piqua Daily Call and Sidney Daily News all announced plans to cut out Tuesday editions. The publisher said the reduced frequency will help avoid layoffs, adding that about 10% of the combined staffs at the three dailies had been cut in recent months. Group Publisher Frank Beeson has details on how the transition will be handled on one of the more hideous-looking newspaper websites we’ve ever seen (via Martin Langeveld).

A.H. Belo will lay off 500 employees, or about 14% of its workforce. Combined with 590 layoffs in two rounds last summer and fall, Belo has cut its total workforce by an astounding 25% in less than a year. Belo is also seeking to recover more cash by suspending a savings plan matching fund program, raising parking and transportation charges to employees and reducing cell phone reimbursements. The company owns several major daily newspapers, including the Dallas Morning News, Providence Journal, Riverside (Calif.) Press-Enterprise and the Denton (Texas) Record-Chronicle. Belo stock slipped about 4% on the news amid a general pounding of newspaper stocks on Friday. Gannett said fourth quarter net fell 36% and Media General said it would suspend its dividend. This quarterly malaise has become so common that it barely even merits mention any more, particularly with most of these stocks trading in the two-dollar range.

Jeff Pijanowski has started a running tally of newspaper layoffs. The 2009 total is already 1,399. Erica Smith has been doing the same thing since early 2008, and her total for the new year is 2,002. Let’s hope they’re staying in touch.

Voice of Reason in Nonprofit Debate

We’re tempted to shout “Hear, hear!” to Jonathan Weber’s superbly argued comeback to the doom-sayers who argue that going the nonprofit route is the only viable way to save American journalism.

In 1,400 words of unusual clarity, the publisher of the proudly for-profit NewWest.net makes these cogent points:

• The people making the strongest case for taking news organizations nonprofit mostly work for nonprofits themselves (a reference to David Swensen and Michael Schmidt’s op-ed in The New York Times last week);
• Nonprofit news organizations still have to meet their numbers, and that makes them subject to the same pressures to feed their audiences celebrity pabulum as profit-making organizations;
• Nonprofits will actually hurt profit-making news organizations by competing for advertising revenues while enjoying the benefit of tax-exempt status;
• The argument that readers are losing out because US newspapers have cut foreign bureaus is hokum. Americans have access to more foreign reporting than ever thanks to the Internet;
• There are successful profit-making ventures emerging online right now;
• The profit motive encourages innovation;
• To discard profitable business models as unworkable right now is to give up any hope that new models can emerge.

We particularly commend Weber for pointing out that much of the argument for giving up the profitability ghost is predicated on the belief that news organizations must continue to work they way they always have. As we’ve noted here many times, innovation flourishes when people discard assumptions. Paving the cowpaths of old newsgathering models will simply keep us marching in the same direction.

At the same time, we do want to acknowledge laid-off Providence Journal reporter David Scharfenberg’s well-argued case for a national journalism fund in a Boston Globe op-ed. The federal government already invests in public radio and public television, he notes; why shouldn’t online journalism be afforded the same benefit? Scharfenberg suggests a $100 million fund would “seed low-cost, Internet-based news operations in cities large and small – combining vigorous, professional reporting with blogging, video posts, citizen journalism, and aggregation of stories from other sources.” It’s not clear how he arrived at the $100 million figure or how these new Web projects would be different from the hybrids that are emerging as the media melts together into a single pool, but the amount seems modest enough in light of the billions being given to bail out the financial industry, whose misdeeds may never be publicly known because there are no journalist watchdogs around to report them.

Miscellany

The contentious dispute between the Hawaii Newspaper and Printing Trades Council and the Honolulu Advertiser has been resolved, with the Advertiser apparently getting the upper hand. Employees will have their wages cut 10 percent cut under a deal announced Friday. Union members will also give up two holidays a year. Just eight months ago, the union rejected management’s offer of a flat pay package with modest bonus increases. After looking at the company’s books and witnessing more layoffs, the union agreed to a much worse deal than the one it rejected earlier, with the sole added provision that it can see management’s books twice a year and the empty promise that the Advertiser will make “every practical effort to avoid involuntary layoffs.” There could be some grumbling in the ranks come dues-paying time in Honolulu.

E.W. Scripps is accusing partner MediaNews Group of behaving badly in borrowing $13 million from its Denver Newspaper Agency partnership to meet payroll at the Denver Post. Scripps is on its way out of Denver as it works to sell or close the Rocky Mountain News. Despite its lame duck status, Scripps will apparently miss the $13 million, which it can’t recover through loans due to the terms of its joint operating agreement with MediaNews.

Writing on Wired.com, Bruce Sterling analyzes French President Nicolas Sarkozy’s newspaper bailout and sees nefarious motives. Sarkozy announced last week that the French government will move to bail out its ailing print media (see There’ll Always Be a France)  by boosting support for newspaper deliveries, doubling government advertising and giving every 18-year-old French citizen a free one-year newspaper subscription. Is Sarkozy concerned about the disappearance of a free press? Hardly, Sterling theorizes. Rather, the collapse of the industry on the continent will raise the French President’s visibility as he becomes one of the few politicians who generates any media coverage at all. “While political rivals are scrabbling with bloody fingertips for a few grams of serious public attention, Sarkozy still has a regional empire of conventional media,” Sterling writes. Cynical indeed.

Sam Zell has had plenty of negative attention for under-estimating the enormity of the problems facing Tribune Co., but he’s still got admirers in the real estate industry. Another big-city publisher, Mortimer Zuckerman of the New York Daily News, says three Manhattan skyscrapers his company purchases lost $165 million in value in just seven months. It turns out Zuckerman’s Boston Properties acquired the buildings shortly after Zell exited the office property market in February 2007 for $39 billion. It was basically the peak of the market. In comparison, Zell’s personal losses on Tribune Co. amount to only about $300 million, according to most estimates. Our calculator tells us that’s about four months’ interest on the proceeds from his real estate sales.

Chicago Tribune associate editor Joycelyn Winnecke has earned plenty of derision for a Jan. 19 memo stating that attitude will now be a factor in employee performance reviews.  The idea that skeptical reporters should be expected to present a positive mental attitude strikes some journalists as just wrong. BusinessWeek‘s Catherine Arnst sums up some of the reactions in a blog entry. “The beatings will continue until the morale improves,” notes one predictable comment, and several other visitors weigh in with perspectives on both sides of the issue.

Layoff Log

• The Wenatchee (Wash.) World announced the first layoffs in the daily’s 104-year history.  The 12 furloughs will reduce the newspaper’s workforce from 145 to 133. “We hung on as long as we could,” said Publisher Rufus Woods.
• The Pioneer Press of Minnesota has laid off eight employees since a 14-month contractual provision against layoffs expired Dec. 31.

And Finally…

Yes, that really is Olympic gold medal swimmer Michael Phelps smoking a bong pipe in a photo taken last November during a house party at the University of South Carolina. Phelps has admitted that he “engaged in behavior which was regrettable and demonstrated bad judgment.” Observers said he knew exactly what to do with the pipe. To be fair, Phelps was taking a long hiatus from training at the time. Fox Sports has more, along with a link to a photo gallery of “Sports’ top tokers.”

Editor & Publisher reports that the Los Angeles Times will cut 300 positions, including 70 editorial staff, or about 11% of the newsroom. The site has a memo from Editor Russ Stanton outlining plans to restructure the daily into four sections. LA Observed (via Edward Padgett) says casualties include the California section and Stanton’s memo appears to confirm that information. The paper has cut about 300 jobs from the newsroom alone since last summer in three rounds of layoffs.

The Baltimore Examiner will close on Feb. 15, ending its three-year-run as the city’s second newspaper. Launched by a company controlled by Denver billionaire Philip Anschutz, the free daily had been troubled since the beginning. Parent company Clarity Media Group had cut newsroom staff by half since launch and reduced home delivery from six to two days per week last summer. A spokesman blamed the closure on a lack of national advertising. The AP report said the newsroom was shocked by the news, a surprising reaction considering that the Examiner had been on the market for months. About 90 people will lose their jobs.

The Examiner is part of a small chain that includes siblings in Washington and San Francisco. Those papers are unaffected by the closure. It seems odd that Clarity would have chosen to launch two of its three newspapers just 40 miles from each other. However, MediaPost says the company hoped to achieve advertising synergies between the two.

Campus Paradox: College Students Prefer Print

College newspapers continue to defy overall demographic trends by enjoying greater success with their printed products than their websites. In fact, writes Brian Murley, the challenge for campus publishers is to get more students to visit them online. Murley, who is assistant professor of new and emerging media at Eastern Illinois University, director for innovation at the Center for Innovation in College Media, and the college media correspondent for MediaShift, writes at length about the growing financial problems at college newspapers. National advertising has been tough to come by, and local advertisers still prefer to run in print. College publications have been hurt by the global recession, as has everybody else. Some of them are now also seeing their university funding dry up. In response, many are toying with supplements on topics like housing and entertainment, and they continue to push local sports as a key differentiator.

Murley points to an Alloy Media + Marketing study last spring that found that 76% of college students had read their college newspaper in the past month. This behavior contradicts the conventional wisdom that young people don’t read newspapers, but perhaps reinforces the notion that hyper-local coverage can appeal even to the digital generation.

There’s Life After Newspapers, But Less Money

Veteran reporter Robert Hodierne posted an online survey asking the question: “Is there life after newspapers?” He got 595 responses and while the results aren’t scientific, they offer an interesting glimpse into experiences of people who have left or been forced to leave the daily grind.

You can read Hodierne’s 4,100-word essay on American Journalism Review here, but here are some bullet points we took away. More than half the layoff victims report finding full-time work within three months. More than 90% found jobs within a year. Only 6% found jobs at newspapers. Most of those who switched industries – media relations is a popular alternative, but Hodierne’s vignettes cover a broad range of new careers – say they’re happy in their new jobs. Even so, 85% said they miss working at a paper.

The news isn’t all good, though. Many are making less money. “The midpoint salary range for their old jobs was $50,000 to $59,000. Those who listed salaries for their new jobs were a full salary band lower – $40,000 to $49,000,” Hodierne writes. Worse is that the salary cuts appear to hit older workers harder. “The median age of those who made less than $20,000 at their old newspaper job was 24. The median age of those now making less than $20,000 is 48.”

Hodierne interviewed many respondents and found a wide range of experiences. Theresa Conroy opened a yoga studio and loves it. But Joseph Demma, who participated in three Pulitzer Prize-winning projects, found himself unemployed at 65 and considering a job as a Wal-Mart greeter. The piece is heavier on anecdotes than statistics, but it offers an interesting glimpse into the lives of many career journalists who have had to adapt to the realities of the new market.

Miscellany

Add Media News Group to the growing ranks of publishers asking employees to take a week of unpaid leave in order to avoid job cuts. This follows Gannett’s announcement of a similar plan earlier this month. Media News’ 3,300 employees at more than 50 newspapers in Northern California have to take a breather by the end of March. The union is negotiating the terms, which is what unions do. Lake County News has more details about cutbacks at Media News, including a report that the company had to loan its flagship Denver Post $13 million to make its December payroll, has cut its staff at the East Bay Newspaper Partnership by 60 percent and laid off the person at the Lake County Record-Bee who is largely responsible for laying out and proofing the paper. If the last item is true, then Craig Silverman at RegretTheError might want to keep a careful eye on future issues of the Record-Bee.

The Congressional Quarterly, which isn’t quarterly, is for sale. No, this isn’t another distressed publishing property being shopped for pennies on the dollar. CQ is actually a nicely profitable business with a subscription website, a weekly magazine and a daily paid newsletter, among other properties. It’s just that owner Times Publishing Co., which is wholly owned by the Poynter Institute, has other things to worry about, like how the south Florida advertising collapse is affecting the St. Petersburg Times. CQ has come under pressure from a slew of recent startups covering Capitol Hill and it needs some careful oversight in order to stay competitive. Plus, Times Publishing could use the money.

NPR’s Marketplace reports that there are plenty of working journalists on Capitol Hill; they just aren’t working for newspapers. Specialized newsletters continue to thrive amid the general industry carnage because they serve up valuable information to small audiences that are willing to pay for it. “Our readers get excited about things like section 112R of the Clean Air Act,” says Rick Weber, who oversees the Inside EPA newsletters. “We cover the minutiae of how policy is shaped and implemented.”

Specialty publications may be attractive options for laid-off journalists who don’t mind focusing on a single topic or government agency. They offer plenty of entrepreneurial opportunity and a lean management structure. The downside is their vulnerability to political shifts and economic uncertainty due to their reliance on a small number of paying subscribers.

“The Death of Daily Newspapers Is a Step Forward” headlines an opinion piece by former newspaper reporter Jon Severson, who maps out a long list of publications that arrive continuously on his BlackBerry. Severson monitors about 30 news feeds on his handheld device and supplements that information with an assortment of weekly magazines, radio programs and personal contacts. “I don’t know a twenty – or thirtysomething young professional worth his or her salt who doesn’t own a Blackberry or similar smart phone,” he writes. “We’ve moved on to more efficient ways to get the information that suits our busy lifestyles.” And it’s eco-friendly.

And Finally…

This has nothing to do with newspapers, but it’s wicked fun. T-Mobile cashed in on the flash mob craze two weeks ago by staging a simultaneous dance by more than 200 people at Liverpool Street Station in London. The event had to be done in one take to maximize the element of surprise, and bystanders did exactly what the cell phone carrier hoped they would do: they recorded the dance on their cell phones.

The New York Times this week carried a well-argued op-ed making a case for turning newspapers into endowed institutions. The authors, which include a financial analyst and the chief investment officer at Yale University, suggest that newspapers endowed under Section 501(c)(3) of the I.R.S. code would enjoy the best of both worlds. They could continue to generate revenue from advertising but would enjoy the benefits of tax-free status as well as insulation from the vagaries of the market. The only thing they’d give up is the ability to support political causes.

The authors make a persuasive argument, but the devil is in the details. They suggest that the Times could cover its newsroom costs with an endowment of $5 billion, but getting enough people to sign checks to reach that total would take years. The National Association of College and University Business Officers lists just 18 academic institutions with endowments of more than $5 billion, and that tally has no doubt shrunk since the markets collapsed last fall. These institutions have large rosters of wealthy alumni whose affinity for their alma maters is stronger than is most people’s fondness for a newspaper. They’ve also been amassing their endowments for 100 years or more. While the Times might have a shot at generating that kind of loyalty, it’s a stretch to believe many smaller papers could successfully generate enough endowment to cover their expenses, and few have the time or resources to mount the necessary fund-raising campaigns.

Poynter’s Bill Mitchell points to a fascinating history at Online Journalism Review of earlier efforts to establish non-profit or reader-funded newspapers. This idea isn’t new; it’s been tested for nearly a century without notable success. In fact, Poynter Institute, the Church of Christ, Scientist and the Church of Jesus Christ of Latter-day Saints are the only three nonprofit institutions in the US that own daily newspapers, and all are struggling to keep their properties viable. Dorian Benkoil also takes up the question at Corante, but he argues that profitable journalism models are already emerging online and that we should focus on those. Judging by the lack of precedents, it seems likely that the endowment model will remain an interesting but unattainable goal.

“The future of newspapers is rooted firmly in 1878. Some guy was doing … 130 years ago, exactly in a place like this … what I’m doing right now. Except he had a better heating system.”

The speaker is Ed Shamy, a 50-year-old former newspaper editor from Vermont who’s part of a growing number of laid-off publishing professionals who are starting their own local publications. Ed Shamy publishes the 130-year-old County Courier in Vermont. All by himself.

Is this a trend? It could be. Yesterday, we told you about Melissa Marinan, a veteran ad sales rep who lost her job when her newspaper closed. So she’s starting her own local newspaper. Just last week, we pointed to a story about Joshua Karp, an entrepreneur who wants to start hundreds of hyper-local newspapers written by bloggers.

Amid all the hand-wringing about the perilous economics of major metro dailies, one fact has been buried: the cost of publishing a local newspaper is lower than it ever has been. Digital cameras have cut the time and cost of taking and publishing photos. Desktop software can be used to lay out pages quickly and cheaply. Editors can tap in to local blogs and websites for information that used to require phone calls and faxes. Many printers can now go direct from computer file to plate. Distribution can be done in an afternoon out of the back of one’s car.

It’s not a great way to make a living, but potentially it is a living. For the ranks of laid-off baby boomers who are no longer supporting kids and big mortgages, it may be a viable way to apply their skills. We believe local newspapers actually have a bright future.

Superior Economics

Why can local publishing flourish while major metros collapse? No unions, for one thing. No presses, no delivery trucks, no circulation departments, no call centers. In fact, local newspapers have almost no infrastructure costs at all. A skilled writer who works full-time and leverages contributions from the community can turn out enough copy and photos to fill a 16-page weekly issue. A second person can cover every prospective advertiser in the area.

The advertisers are there. In fact, local businesses are the great untapped revenue source. Major metros traditionally haven’t bothered with them because the dollars are too small. There are no online services that serve local communities effectively. Most small businesses advertise through a patchwork of channels that can include place mats and business card holders in the local hair salon. It’s a frustrating, time-consuming process that small business owners would rather not bother with. A newspaper that reaches a local audience has a chance to deliver a better return at a lower sales cost.

Print is not dead, only certain manifestations of print. A lot of skilled publishers are out of work right now, and at least some of them will follow the path of Ed Shamy and Melissa Marinan. We wish them well.

Layoff Log

• Baltimore’s Capital Gazette Communications will cut 111 jobs as it moves all printing operations from Annapolis to Comprint, a Laurel, Md. Printer that already produces several daily and weekly papers. The body count at Capital includes 31 full-time and 51 part-time press and mailroom positions, along with 29 other people in other departments. No reporter jobs were cut. The Capital Gazette also prints the Bowie Blade-News, Crofton News-Crier and the West County Gazette. No word on whether the contractor will hire any of the laid-off employees.
• The Missoulian (Mont.) has cut six jobs and will combine its call center with four other newspapers in big sky country. The Montana Standard is doing the same thing.
• The Hutchinson (Kan.) News will lay off four employees and require everyone to take one unpaid week of before April 30. The newspaper also plans to reduce its daily page count.

Downturn Hits Ethnic Press

New York’s ethnic press, which has been mostly insulated from the downturn affecting the newspaper industry, is beginning to suffer. A Spanish-language daily and a Chinese weekly have already closed this year and now the Ming Pao Daily News, which is considered the most intellectual of New York’s four Chinese newspapers, is reportedly slated for closure by its Hong Kong parent. The New York Times notes that ethnic newspapers enjoy an intimacy with their readers and advertisers that big-city dailies traditionally don’t and that this has bought them some security in the past. But the lousy economy is threatening the already thin margins of these small-circulation properties, and many don’t have websites to fall back on. Ming Pao will continue to publish a free daily, which has been the sole bright spot in the market. New York had 10 Chinese daily newspapers just 20 years ago.

Extra! Extra! Blog All About It!

Blogging has come full circle in San Francisco, where a software entrepreneur-turned-publisher has launched a weekly newspaper composed entirely of blog entries. Joshua Karp has big plans for the chain he calls The Printed Blog. If his idea reaches its full potential, he’ll have hyper-local twice-daily editions in thousands of communities around the US. Chicago alone could support 50 localized Printed Blogs. Karp’s editorial model is very Web 2.0-like: bloggers give him their stuff in exchange for a slice of the profits. More than 300 have already signed on. Profits aren’t an issue right now, but Karp believes that local businesses will appreciate the tight control they’ll have over their ad messages as well as the low cost of $15 to $25 to reach 1,000 readers. The New York Times account quotes one advertiser exulting in his new ability to tailor his ads to specific neighborhoods. Printing is outsourced to local distribution points. Naturally, there’s a website.

Layoff Log

• Voice of San Diego is reporting that another 50 employees will be laid off at the Union-Tribune. The paper has been a prominent victim of the area’s cratering economy, having already laid off 15% of its employees a year ago and staging another buyout since then. The U-T has also been for sale for the past six months. While several local investors have expressed interest, no one has written a check yet.
• The Mason City (Ia.) Globe Gazette has laid off nine full-time employees and will leave six open positions vacant. No word on how large the total staff is.
• Lee Enterprises-owned River Valley Newspaper Group, which includes two dailies and eight weeklies in Wisconsin, has cut 10 positions across the company.
• The Traverse City (Mich.) Record-Eagle has cut the equivalent of eight positions from a staff of unspecified size.
• The Peoria Journal Star is laying off an unspecified number of employees part of a plan to reposition the paper. Asked for a quote, publisher Ken Mauser delivers one of the most vapid comments of this new year: “Like many companies operating in today’s business environment, change will be inevitable and necessary to position our business for the future.” A blogger at Illinoize says 11 people lost their jobs.

Miscellany

The sour economy has spurred the San Jose Newspaper Guild and two newspapers to come to terms after 23 months of negotiations. The 25 Guild members get a year of job security and pay raises through 2012, but give up the right to block management from outsourcing some of their jobs.

The right-wing Tulsa Beacon takes the publisher of the Tulsa World to task for joining the most exclusive country club in the city while simultaneously laying off 28 people at the newspaper. Hypocrisy, the Beacon reports, is exclusively the domain of the liberal media.

Good obituary writers have their research done well before the subject is laid to rest. In that spirit, Newsosaur Alan Mutter begins the process of writing an obit for the Chicago Sun-Times, a newspaper that he clearly believes is destined for our R.I.P. column in the not-too-distant future. Mutter, who used to work at the Sun-Times, begins his tale in 1984 and tells the story of the first 10 years of ownership changes that “turned our thoughtful, respected and reasonably prosperous tabloid into a scandal sheet.” It’s a personal, poignant and sometimes funny account that will be told in installments.

Congratulations to Martin Langeveld, whose thoughtful News After Newspapers blog has been scooped up by the Nieman Foundation as part of its journalism lab.  He’s joined there by Tim Windsor and Matthew Ingram. In an introductory entry tellingly tagged “audience, doom, newspapers, and print,” Langeveld describes the reasons why the industry has entered into an inescapable vortex and how the thinking at daily papers must change if there is to be any hope of survival. He will continue to serve up the provocative ideas he started at NAN and the industry will be better for it.

The Register-Pajaronian of the Santa Cruz valley area will cut back its publication schedule to three days a week from six. The 141-year-old paper blamed its financial troubles on the collapse of major advertisers Mervyns and Circuit City. Unspecified layoffs accompanied the move.

If you’re still wondering “Who the hell is Carlos Slim?” Fortune has some background for you. A brilliant investor who specializes in buying distressed firms, Slim is now bailing out The New York Times Co. and may end up controlling the company as a result. For journalists, the nut graph is near the end: ‘Slim seems to neither covet the attention nor access that comes with being a media baron, nor to share the controlling Sulzbergers’ view that their ownership is a trust that puts the company’s journalistic mission ahead of commercial imperative.” If it’s a bio you want, get thee to Wikipedia.

And Finally…

The Boston Globe held out longer against front-page advertising than The New York Times – about two weeks longer. The Globe‘s first page-one ad ran on Wednesday, timed to coincide with the production of an additional 100,000 inauguration issues. The ad was for the movie “Defiance” (see below).