We could almost see the collective eyes rolling in the newsrooms of the Detroit News and Detroit Free Press today as the newspapers’ holding company announced a “bold transformation” that will cut home delivery to three days per week and move the bulk of editorial content online.

The press release from Detroit Media Partnership described the move as “a sweeping set of strategic and innovative changes designed to better meet advertiser and reader needs,” although the reader benefit of delivering fewer issues wasn’t clearly articulated.

It has always struck us as odd that newspapers, whom we count on to cut through the hyperbole of press releases, can sling it with the best of them when their own business is involved.  For a more balanced perspective, read the account in the Detroit News. The comments from Free Press editor Paul Anger also convey a sense of resignation about the shift.

Newsosaur Alan Mutter wastes no time poking holes in the announcement, quoting a former executive saying that the pullback was the only alternative to shutting down the two dailies.  The move is historically notable in light of the fact that the News was once the largest afternoon newspaper in the nation.

Martin Langeveld is generous in calling the pullback “not the best solution…it keeps in place two separate press runs on most days while failing to differentiate the two papers more clearly. And implementation will be a nightmare, I’m afraid,” he says, shrewdly.

Editorial Departments Intact

About 200 people will lose their jobs, or less than 8% of the combined workforce. Cutbacks in the editorial department will be minimal because of the need to maintain “vigorous newsgathering operations and editorial voices,” according to the News account.  Most of the cuts will presumably come in production and operational departments.

Next to scaling back frequency, the most controversial aspect of the restructuring plan will likely be the introduction of a light version of both newspapers to be sold exclusively at newsstands on days when the full edition isn’t published.  Industry sources estimate that less than 40% of the circulation of both newspapers comes from newsstand sales, a fact that raises questions about how advertisers will be charged for running there. On Monday holidays, print circulation may fall close to zero.

A daily electronic edition will also be introduced for people who want to do their printing at home. “These are exact copies of each day’s printed newspaper and can be easily navigated and printed from readers’ computers,” the press release says. This means that the $170 million printing plant that the newspapers built in 2005 will now be nearly idle four days a week while printing is outsourced to the readers.  There is no research we’re aware of that supports the assumption that readers are interested in printing their own newspapers.

Cultural Challenge

The gutsiest dimension of the plan is the commitment to move much of both papers’ newsgathering operations online.  This recognizes the unstoppable forces that are transforming newsgathering organizations around the world.  As we reported here this morning, new Gallup research shows that 31% of US adults now consult the Internet daily for news while 40% read a local newspaper.  The trend lines, however will clearly cross sometime in the next five years, making the Internet the most important news source among US adults.  Only 22% of adults under 30 read a local newspaper daily, Gallup reported

The biggest challenges of all will be cultural.  Newspapers often give lip service to the importance of their websites, but stories still abound about resistance from ink-stained veterans who can’t accept the possibility that a screen can be as important a medium of news delivery as a printed page.  Detroit’s newspapers will now have to compete on foreign turf, adapting their products to the standards and cultural practices of the bloggers that so many of them hate.  It will be interesting to see if the reporters and editors can learn to thrive in a medium that has done them so much damage.

No doubt there will be lots of analysis and reaction to follow. We see that Gannett Blog has logged 70 comments in the first four hours. We’ll keep an eye out. In the meantime, we couldn’t help taking a snapshot of the ad that appeared on the Detroit News‘s account of today’s announcement.  Perhaps a cleansing is exactly what’s needed.

Gallup has issued its bi-annual report on news consumption trends, and all mainstream media are down with the exception of cable news and the Internet. The most striking finding is the percentage of people who say they consult the Internet for news every day: up 9% in two years to 31% today. The percentage has more than doubled in the last five years. Meanwhile, the percentage of people who consult a local newspaper every day has dropped from 54% in 1999 to 40% today.

For newspapers, the demographics are a horror show:

% of respondents who get their news every day from each source, by age group:

The statistics point to a continuing trend that has been hammering the newspaper industry: Young people don’t read newspapers.  Meanwhile, Internet consumption is up across the board as people increasingly demand that news be delivered whenever they want it and wherever they happen to be.

Glimmer of Hope at the Rocky

E.W. Scripps says “a handful” of people have asked to look at the books of the Rocky Mountain News, a Denver institution that the company recently put up for sale. A spokesman said no one has yet offered to buy the troubled newspaper and that there’s no guarantee that the people who have asked to see the financials will be granted that access. However, the tire-kicking does indicate that not all hope is lost.  Employees at the Rocky are trying to rally readers to their cause.  A few of them have launched a site called I Want My Rocky to highlight the paper’s importance to the community and statements of support that have come in from readers. Thank God for WordPress.

Meanwhile, MediaNews CEO and Denver Post publisher Dean Singleton is wasting no time in taking advantage of his possible monopoly position. He’s told unions to reopen negotiations with an eye toward cutting $20 million in costs. The request came a day after Moody’s downgraded almost $1 billion of MediaNews debt out of fear of default. The Newspaper Guild represents 730 employees at The Post and the agency that administers the Post’s joint operating agreement with the Rocky.

Miscellany

The Atlanta Journal-Constitution is making its third round of job cuts in two years, eliminating 56 full-time and 100 part-time jobs in the circulation unit. The paper’s circulation has dropped 13.6 percent in the last year, according to the Audit Bureau of Control.

McClatchy’s November ad revenues were down 22% on an eye-popping 41% decline in classified advertising. E&P has the ugly breakdown: automotive advertising down 42.9%; real estate down 45.8%; and employment down 58.6%. We can’t remember any publisher reporting this kind of catastrophe over the last two years.  Other trauma: retail ad revenue off 17.6%, national advertising down 33.2% and direct marketing off 16.8%. CEO Pat Talamantes said the declines were “in line with recent ad trends,” which has us wondering what other publishers are going to report.

The Tampa Tribune is blaming a rival newspaper for spreading rumors that it plans to exit the print business.  In a co-bylined Sunday editorial, executive editor Janet Coats and publisher Denise Palmer said the rumors originated in the subscription sales department of competitor St. Petersburg Times. Coats and Palmer said the Times was taking advantage of its status as a privately owned company to position recent layoff reports at the Tribune as evidence that the paper would soon cease print operations.  The rumor was also reported in the Tallahassee Democrat. Going on the offensive, Coats and Palmer claimed that the Tribune actually published more editorial pages than its rival in the first 10 days of December and that its willingness to report news of its own layoffs was in the best journalistic tradition that its rival has so far skirted.  The publisher of the St. Petersburg Times countered, “Our circulation is growing nicely, and we’re very happy to have many readers in the Tampa Bay region.”

The New York Times‘s David Carr says newspapers have found an unlikely ally in besieged Illinois Governor Rod Blagojevich. According to a criminal complaint filed by the United States attorney, Blagojevich was obsessed with negative coverage by the Chicago Tribune, which has been campaigning for his impeachment.  The governor allegedly threatened to withhold financial support for the Tribune unless the newspaper fired certain editorial writers. There is no evidence that the newspaper complied.  Carr says the revelations about the Blagojevich’s criminal activities come at an odd time, given that the Tribune Company declared bankruptcy just one day before the scandal broke. “In a city and state where corruption is knit into the political fabric, a solvent daily paper would seem to be a civic necessity,” Carr writes. “But if another governor goes bad, what if the local paper were too diminished to do the job?”

The Financial Times profiles, New York Times Co. Chairman Arthur Sulzberger Jr., questioning whether he has the will and stamina to persevere through the industry downturn. “If the future of America’s newspaper business rests on one individual, it is on the 57-year-old former reporter,” the FT says. “Yet the fourth-generation family proprietor, who became publisher in 1992, is looking increasingly besieged.” You can say that again.  The Times Company has over $1 billion in debt. It has been forced to consider asset sales and taking on even more debt to meet its obligations. The company was forced to cut its dividend by 74% last month, which the FT notes is “equivalent to [Sulzberger] asking his relatives to take an $18 million-a-year pay cut.” Meanwhile, Rupert Murdoch has made no bones about his intentions to take on the Times directly. All this is a heavy burden to bear, the story says, noting that Sulzberger’s legendary father, Arthur Ochs “Punch” Sulzberger, displayed  backbone that has so far not been evident in his offspring.

More bad news for the Associated Press.  The UK’s Guardian newspaper is reporting that Reuters and the Capitol Hill journalism boutique The Politico are teaming up. “The initiative will mean that more than 120 Washington-based journalists will be reporting full-time for Reuters and Politico by the time president-elect Barack Obama takes office in January,” says the Guardian, which has telegraphed its own intentions to enter in the US market. The Politico has been one of the few bright spots in American journalism this year, having signed up more than 100 newspapers for its Washington news service.  Meanwhile, the AP has been under siege for its controversial fee structure and has recently lost some prominent subscribers.

Newspapers continue to retreat from print rather than surrender.

The Wall Street Journal is reporting that the big announcement expected tomorrow from Detroit’s two major metro dailies will be a major pullback from home delivery on all but the three most lucrative days of the week: Thursday, Friday and Sunday. This means that for the nearly 300,000 home subscribers to the News and the Free Press, the ritual of the morning newspaper will cease to exist.

The Journal says parent company Detroit Newspaper Partnership plans to instead produce a scaled-back print edition for newsstand sale on the four least profitable days of the week and direct readers online for expanded coverage. Significant job cuts are expected, but the editorial operations will probably be affected least because of the need to maintain a vigorous online news service.

However, the risky maneuver may ultimately be a disservice to the two troubled newspapers. Quoting the Journal:

Curtailing home delivery would bring the Detroit papers much needed savings, but would also carry considerable risk. At a time when newspapers are fighting to retain readers, steering those readers online instead of delivering their paper to the door could cause them to lose the habit of reading a paper daily.

Pundits largely agree. Chicago Tribune columnist Phil Rosenthal calls the plans “less a bold innovation than a Hail Mary pass.” He suggests that a reduction in subscriptions “won’t driver readers to the online product but rather to other ways to get their news.”

Newsosaur Alan Mutter is more blunt: “The reported plans to cut home delivery to just a few days a week…does not merely tweak the classic newspaper model. It eviscerates it, perhaps mortally.” Mutters basically agrees with one anonymous former Gannett circulation exec he quotes who argues that any strategy that breaks readers’ daily habit of picking up the morning newspaper ultimately sends them away forever. Mutter also raises questions about the logistics of transitioning a delivery force that used to operate on a full-time basis to working only part-time. It’s a good point.

The biggest question in our mind is the advisability of continuing to print a substantially smaller edition on the least profitable days of the week and then to deliver it to 65% fewer customers. Advertisers already shun Monday, Tuesday, Wednesday and Saturday issues, so why give them less reason to advertise? It’s possible that this decision is a means to appease the forces within the Partnership that simply can’t accept the idea of not publishing daily. They would find considerable support among the analysts quoted here. However, appeasement could also be a deadly mistakes.

We’re not sure that audiences will have that much trouble adapting to a new publishing schedule. Today’s readers are increasingly motivated by content rather than routine. Tivo customers can tell you that they prefer to consume programming when it’s convenient for them. If audiences are already rebelling against scheduled television programming, why would they have a problem with newspapers arriving when they’re most likely to read them?

The best idea we’ve seen in that vein comes from Steve Outing, who suggests that those unprofitable issues should simply be distributed free and filled with content that appeals to the younger audience that is already inclined to go online. Young readers have shown a clear preference for the free distribution model employed by Metro as well as hundreds of alternative weeklies. If there’s so little money to be made Monday-Wednesday, why not experiment with an approach that could conceivably generate brand loyalty where none now exists?

At this point, everything is just speculation. Even if the rumors are true, some gaps still need to be filled. Among them:

• What incentives will the Detroit Newspaper Partnership offer to advertisers to run in already unappetizing daily editions that will now reach less than 40% of the full subscriber base?
• Will bulk delivery to businesses be abandoned on selected days along with home subscribers? Business subscribers are the most desirable readers a newspaper has and it would seem foolish to throw them out along with suburban doorsteps.
• How does the group plan to adjust the business model to make the smaller editions profitable? Or is that even the intent?
• With a larger part of revenues dependent upon online sales, how is the culture of the company being adjusted to optimize this revenue stream? How will sales incentives change?

There are many more. One thing’s for sure: few events in the newspaper industry this year have raised more speculation that the announcements coming out of Detroit tomorrow. Let’s hear your comments and the questions you’d like to ask the company.

Esquire‘s 75th anniversary issue in October was a media sensation for its battery-powered cover and fat ad folio. But that’s about all the men’s magazine has to crow about this year. It’s lost 14.56 percent of its ad pages this year, according to Media Industry Newsletter, and that’s on par with performance at other monthlies. Quoting:

The Atlantic is down nearly 17 percent, and Vanity Fair is down almost 15 percent…In October, Condé Nast scaled back Men’s Vogue to two issues a year, leaving the three biggest men’s fashion magazines as GQ, Details (which lost 11.49 and 6.48 percent in ad pages, respectively) and Esquire.

Times are tough for broad consumer magazines. Newsweek may slash its circulation by as much as 60% in response to the high cost of production and postage, Folio magazine reports. The cuts may be as high as 1.6 million subscribers out of Newswek’s 2.6 million circulation base. Editors reportedly have Economist-envy and want to turn Newsweek into a magazine of thought leadership rather than a big old mass-market play. The Economist has a North American circulation of 714,000

Another factor in the cutbacks is that news magazines have been acquiring a much greater percentage of ‘non-renewable circ’ than they did before in order to satisfy advertiser demand. Non-renewable circ is mainly give-aways and promotions, making it expensive and less valuable that list-based paid subscriptions. Quoting:

“Such a drop in guaranteed circulation is not uncommon, particularly in the newsweekly category. Time cut its rate base by 750,000 copies in January 2007. Newsweek followed suit, dropping 500,000 copies from its circulation in November of that year.”

Fortunately, there’s Google. MediaPost says Google will create digital archives of the print editions of dozens of consumer magazines going back decades. The news comes not long after Google said it was making the entire photo archive of Life–about 10 million images–available online, including many that have never appeared in print. Google has been on a tear lately and its mission to digitize all the world’s printed content. In September, Google unveiled plans create historical archives of newspapers back to the very first print editions. Publishers are expected to make money by monetizing assets that had been all but out of reach to the public for many years.

2009 Seen Bringing New Wave of Consolidation, But Not the Happy Kind

BusinessWeek’s Jon Fine quotes newspaper executives saying that 2009 will see a fresh round of consolidation, but this one won’t be driven by visions of growth. Instead, mergers and acquisitions will be overseen by “big bankers seeking to ensure that the money they’ve lent, or at least a decent portion of it, is repaid.”

The bad news is spreading to other areas of traditional media. “Robert Coen, a senior vice-president at ad firm Magna who’s known for his ad forecasts, just predicted that local TV ad revenues will be down 9% this year and an additional 7% next year,” Fine writes. “In case you were wondering, Coen expects newspaper ad revenue to post another double-digit decline in ’09.” Ugh.

Cutbacks in Cincinnati

City Beat Cincinnati devotes an unbelievably long story to news that the Cincinnati EInquirer, the area’s only remaining daily newspaper, laid off several employees Dec. 2 and 3. At least 30 jobs were cut. That’s in addition to the voluntary severance packages that 60 staffers took in September.

In addition, the EInquirer‘s newshole will be reduced by six pages on Sundays and a total of 30 pages across the other weekdays beginning in three weeks. Editor Tom Callinan says the layoffs were concentrated among middle managers, not worker bees. “It was a personal statement that it was painful to lay off middle managers I know very well. But we did not touch one hour of reporting, even good reporters that we just hired. Good stories are our last best hope.”

Here Comes The Guardian!

Perhaps heartened by the success of the Financial Times in its cross-pond expansion, The Guardian plans to make its presence known on American shores this year. Quoting:

Tim Brooks, the managing director of Guardian News & Media said underscored the company’s commitment to continued growth in North America. “This year has seen the beginnings of serious investment in our North American presence, through the expansion of our editorial resource in Washington and the acquisition of ContentNext Media in New York and LA.”

Pulitzer Warily Embraces Online-Only Media

“Pulitzer Prizes Broadened to Include Online-Only Publications Primarily Devoted to Original News Reporting.” It’s the last part of that headline from Pulitzer press release that illustrates the conundrum the organization faces. The Pulitzer organization has been under increasing pressure to recognize the work of online-only media outlets, but doesn’t want to be swamped with entries from casual bloggers. So the organization this week, finally modified its criteria to include news organizations that don’t produce in print. The Board also decided to allow entries made up entirely of online content to be submitted in all 14 Pulitzer journalism categories.

Writing about the policy change, marketing guru Seth Godin comments:

“Tom Friedman can win a well-deserved prize for writing what is essentially a blog for the NY Times, but if he goes off on his own, he’s out. What a shame. As newspapers melt all around us, faster and faster, the people in the newspaper business persist in believing that the important element of a news-paper is the paper part.

“The opportunity…is to organize and network and identify and reward [responsible journalism] activity when it happens online. Not because the site is owned by a paper or because the founder has connections to the old media. No, because they’re doing work that matters. If I ran the Pulitzers, I’d hand out a dozen more every year to people working exclusively online.”

Miscellany

The Toledo Blade is laying off 23 people, most of them in the newsroom. The cuts are due to declining ad revenue and the newspaper’s ties to the auto industry. Assistant Managing Editor LuAnn Sharp said Wednesday that most of the layoffs will be in the newsroom. Five of the employees work part time. After the layoffs, The Blade will employ 425 companywide.

New York Times Co. CEO Janet Robinson says the company is ‘well-positioned to weather the challenges next year is expected to bring” and is not for sale. In preparing for a tough year, the Times Co. is mortgaging its headquarters and slashing its dividend. However, it appears that the company will at least remain viable, which can’t be said about some of its competitors.

Gannett’s chief financial officer said Wednesday that full-year 2008 revenue declined 8% and he expects headcount to continue to fall, ranging from mid- single-digit percent declines at USA Today to a mid-teen drop at Gannett’s U.K. operations. Fortunately, he also expects newsprint to decline by double-digit rates next year.

And Finally…

Sheldon Cohen sold the landmark Out of Town News kiosk in Harvard Square in 1994 after 39 years, but now he wants it back. He told Cambridge, Mass. city councilors Monday night that he has been overwhelmed by reaction to the news that the current owners decided not to renew their lease. “I’m thinking of coming back,” he said. “This is an opportunity to bring some life back to the square.” to be fair, no one has proposed tearing down the kiosk. The most likely outcome is that it ends up as a Starbucks. Despite Cohen’s misgivings, he may quickly find that there is a reason the current owners want out.  (Photo credit: Cambridge Chronicle)

As the newspaper industry winds down its worst year in history, some observers are finding hope amid the rubble.

Jonathan Zittrain points out that Twitter and Mahalo were powerful tools for documenting the crisis in Mumbai nearly two weeks ago. For many Americans, foreign news services and the BBC were all that was available to track the terrorist attacks. Few US newspapers even have stringers in Mumbai any more. Into that vacuum sprang citizen journalists with their cell phones and self-built news sites. Zittrain says he’s seen the future of news in these services. Check out the Mumbai hash on Twitter, the Mumbai Terrorist Attacks page on Mahalo and the Wikipedia entry on the Mumbai attacks.  Can you read these accounts and not believe that a new kind of journalism is being created before our eyes?

European editor Frédéric Filloux and former Apple honcho Jean-Louis Gassée meander a bit before getting to the point, but finally zero in on what’s going right in the news world. They point to The New York Times’ introduction of Times Extra as an example of how the link economy is transforming the news business. Times Extra integrates news from outside sources – including competitors – into the Times’ home page. This is a bitter pill for hyper-competitive editors to swallow, but a necessary one in the new model of news.

They also point to two other recent announcements – the success of The Politico’s new wire service and Huffington Post’s $25 million capital infusion – as evidence that there’s plenty of life in the news business, just not in the old news business. “The Internet economy is moving in the right direction,” Filous writes. These stories, “provide evidence of…progress. Similar news organizations are bound to find sustainable business models.”

If you run a newspaper, you might consider hiring Gordon Borrell for your next team-building event. Check out these quotes and paraphrases attributed to the founder of research firm Borrell Associates in Investor’s Business Daily (lightly edited):

• “We’re confident it’s near a bottom, and there will be a rebound.”
• Newspaper companies have plenty of growth ahead for their Internet businesses — albeit with hard work… Newspapers are planning for exponential growth from the Web — in some
• Local advertising, which newspapers are best positioned to capture, will grow 47% this year to $12.9 billion.

These optimistics comments come on top of recent news that advertising on newspaper websites declined 3% in the third quarter of 2008, indicating that the one business that should be growing is actually shrinking. They are also rather oddly juxtaposed with the chart at right. We hope Borrell is correct, but his comments shouldn’t be cause for complacency.

Miscellany

Disgraced Illinois Governor Rod Blagojevich allegedly pressured the Chicago Tribune to fire Deputy Editorial Page Editor John McCormick and other unnamed editorial board members in exchange for getting state funding that would grease the wheels for Tribune Co. to sell the Chicago Cubs. We suspect this story might have something to do with it. We also marvel that the great state of Illinois could elect a marvel of leadership like our President elect and a scumbag like Rod Blagojevich to office at the same time.

The Richmond (Va.) Times-Dispatch is laying off 18 employees while the Philadelphia Inquirer and Philadelphia Daily News will collectively cut 35 jobs, reports Editor & Publisher. No word on what percentage of their respective workforces the cuts represent. The Philadelphia layoffs will concentrate in the newsroom, however.

Self-described troglodyte Ted Venetoulis is still interested in buying the Baltimore Sun. Or maybe the 72-year-old investor is just looking to get his name in the paper. See for yourself. The Baltimore Business Journal reports that Venetoulis and a group of anonymous investors are still looking at possible acquisition of the Sun from its troubled Tribune Co. parent, but a lot has to be worked out first, including assessing the future of the newspaper industry itself. Venetoulis admits that he hasn’t looked at the Sun’s financials, that he wouldn’t want to pay too much and that he’s going to watch Tribune Co.’s bankruptcy closely. It’s too early to tell. Which makes us wonder why the BBJ committed 500 words to this meaningless story.

The Christian Science Monitor sums up the troubles plaguing the industry. This story doesn’t break a lot of new ground, but we couldn’t resist mentioning it because we’re quoted there.

And Finally…

The Daily Show analyzes the decline of newspapers in its own inimitable style.

And from Rob Tornoe, cartoonist at The Politicker:

Hot on the heels of the newspaper industry’s record-breaking 18.1% quarterly revenue decline, analysts are weighing in with dire forecasts and advice.

“A newspaper that cannot sell enough advertising or cut enough expenses to sustain profitable operations is not likely to make it to the other side of 2009,” writes Alan Mutter in a depressing outlook on the industry’s immediate future. While the rest of Mutter’s post isn’t as provocative as that closing statement, it provides a detailed analysis of which markets are mostly likely to see mergers or closures (Minneapolis, San Francisco, Southern California, Southern Florida) as well as markets like Chicago and Boston, where two competitors are locked in battles of mutual destruction. The most likely scenario for 2009 is that publishers will have to choose from a palette of equally distasteful cost-cutting options, and that the measures they have to take will be more drastic than the 10%-20% workforce cuts of the past year. Mutter lists voluntary pay cuts, massive outsourcing, frequency reduction and asset sales as being on the table.

Fitch Ratings might agree. Its report says several major daily papers could shut down by 2010. Speaking in that odd third-person-singular that investment companies like to use, the agency sa

ys “Fitch expects newspaper industry revenue growth will be negative for the foreseeable future,” and that credit ratings are likely to decline further. Unlike the 2001 advertising crash, this one is affecting both national and regional advertisers, the credit rating agency says. “And unlike the easy credit and lower interest rates during the 2001 ad recession, this time advertisers and consumers face a credit freeze.” The outlook for 2009? Don’t ask. Fitch expects real US GDP to drop 1.2% while inflation hovers at 2.7%.

Steve Outing has some advice for newspaper executives struggling with the reinvention question. While his E&P column isn’t as edgy as usual, his prescriptions are practical. The most counter-intuitive in our opinion: stop chasing young people. Millennials aren’t going to read newspapers, so your redesigns intended to make your print edition more appealing are going to fail. Reach out to them through their mobile devices and services that aggregate their social networks with news (he isn’t more specific about this; Facebook is a pretty big obstacle to this goal). Focus your print editions on the readers who want to read print. Yeah, they’re older, but they’re still viable. You’re going to be

managing print down for the next 15-20 years, so get used to it. And while you’re at it, start pushing those older print readers online. Make your newspaper a gateway to enhanced services on the Web. And for God’s sake, stop wasting your time on fluffy lifestyle pieces. Print loyalists want serious journalism.

Outing has some investment advice, too: hire someone to maximize online visibility through social media channels, bring in a mobility specialist and give your staff time to come up with novel ideas for reinvention. The problem, of course, is who’s got the time or money for all this? Outing doesn’t address the budget issue but then again, he’s a pundit, not an accountant.

Profiling the Provocateur

The New York Observer has a long profile of local media guru Jeff Jarvis, who perhaps vexes the mainstream media industry more than any other contrarian. That’s because Jarvis, who now teaches journalism at NYU and agitates with his popular Buzz Machine blog, is one of them. He worked at the San Francisco Examiner, New York Daily News, People and TV Guide, among other outlets, and was founding editor of Entertainment Weekly. Jarvis may understand traditional media’s pain, but he doesn’t cut the industry much slack.

He is passionate about citizen journalism and the need for media institutions to remake themselves as hubs of news, commentary and conversation among a community of people with similar interests. He has little tolerance for the go-slow mentality that pervades American newsrooms. As Jarvis sees it, the quicker we blow up the old, the quicker we can get on with the new. And he makes his points in blunt, sometimes profane language.

This has made Jarvis a hot potato for a tribe of senior editorialists who are trying to balance their respect for the man with their distaste for his revolutionary ideas. The piece quotes several of these top editors, including New York Times Executive Editor Bill Keller, who clearly finds some of Jarvis’ ideas persuasive but is uncomfortable with his extremism. Gawker’s Nick Denton sums it up: “Of all the Internet supremacists, he is the one who has betrayed his origins in print. Of all the people who grew up in newspapers and magazines, he is the one who has most clearly abandoned them.”

Jeff Jarvis is required reading at the Death Watch and we commend him to you.

Poignant Tales From the Front Lines

Pam Podger and her husband moved from Virginia to Montana because they loved the natural beauty and the lifestyle. They took at job at the Missoulian. Nine months later, they were both laid off on the same day. More than 50 years of journalism experience was thus thrust out on the street, with two kids to care for. Podger writes in American Journalism Review of her anxiety, her fears about the future of journalism and her determination to stick it out in her new home.

Cost-cutting is robbing the public of an American institution – the editorial cartoonist. “In the past three years, around three dozen artists have been laid off, forced to take buyouts or to retire, according to the Association of American Editorial Cartoonists,” says an Associated Press piece. The story spotlights Eric Devericks, whose work is pictured above. Devericks has known nothing but success since his work was recognized with a national award while he was still in college. But rewards don’t amount to a hill of beans in an industry that’s cutting bone, so the Seattle Times laid him off effective next Friday. Next month, Devericks, his wife and three kids are “heading to southern California, where two buddies have offered Devericks a job as a business development specialist for their new industrial design company,” says the AP account. The curtain is quickly coming down on a generation of journalists who proved that the brush, as well the pen, can be mightier than the sword.

Back in late October, Gannett Co. announced plans to cut 10% of its workforce.  This week, the hacking began in earnest. A sampling:

• The Louisville Courier-Journal cut 69 positions, or 6.5% of the staff.
• The Reno Gazette-Journal will cut 61 positions, close two weekly publications and idle a commercial printing facility. The weeklies are the Douglas Times and Fallon Star Press.
• A total of 206 jobs will be eliminated at Gannett’s New Jersey papers, including the Asbury Park Press, Cherry Hill Courier-Post, East Brunswick Home News Tribune, Bridgewater Courier News, Parsippany Daily Record and Vineland Daily Journal.
• The Arizona Republic was also caught up in the Gannett downsizing.  The Phoenix Business Journal reports that 68 employees were laid off on Wednesday, including 25 from the newsroom.  The nearby East Valley Tribune recently announced plans to reduce its number of publishing days.
• Also maimed in the Gannett buzz saw is the Nashville Tennessean, which will lose 90 jobs out of 1,140 total employees.  One-quarter of the cuts are in the newsroom.
• The Town Talk of Alexandria, Louisiana will cut 14 jobs.
• Ninety-two jobs were lost in Gannett’s Wisconsin properties.  Two weekly newspapers –  the Wrightstown Post Gazette and the Denmark Press – will also close.
• The Battle Creek Enquirer will lose nearly half its staff, a total of 50 employees out of 105 positions.  The paper also shut down its printing press and move all printing operations to Lansing.
• Florida Today will lay off 30 employees and buy out six others.
• The Des Moines Register will eliminate 41 jobs and leave another 15 open positions unfilled. Among the casualties is the newsroom’s editorial cartoonist, who has been with the paper for 25 years. The cutbacks amount to 6.9% of the workforce.
• The Green Bay Press-Gazette cut 22 jobs at its daily and weekly publications.  However, no reporting or advertising sales jobs were eliminated.
• The Hattiesburg American will move its production operations to a nearby newspaper and eliminate 38 jobs.  The publisher assured readers that they will see no difference in the newspaper as a result.
• The Honolulu Advertiser accepted 41 buyouts and laid off another 10 employees.
• The Mississippi Clarion-Ledger cut 33 jobs through layoffs, buyouts and elimination of open positions.  The publisher also promised that quality will be unaffected.
• The Indiana Journal & Courier is cutting 13 jobs, about 6.5% of its workforce.
• The Poughkeepsie Journal eliminated 14 staff positions, including three open jobs and seven buyouts.

All this and more is being documented in gruesome detail on the Gannett Blog, Jim Hopkins’ remarkable watchdog website.  Gannett may not be revealing the extent of its job cuts, but Hopkins has assembled field reports from employees at 71 newspapers, as of today.  In addition, more than 100 comments have been posted. Peter Kafka of All Things Digital pays homage to the blog here, as does Editor & Publisher, which quotes extensively from it.

Unrelated to the Gannett moves:

• The Minneapolis Star Tribune has asked its unions for $20 million in cost cuts, saying “the survival of the company is at stake.” The Strib is riddled with debt. It cut $10 million earlier this year, but its $400 million in debt demands more drastic action. The paper has already cut $50 million since 2007 through attrition, layoffs, buyouts and other means.
• The Bakersfield Californian will lay off 25 staffers.  The move was prompted by “the steepest and sharpest drop off” in advertising revenue in the newspaper’s history.
• The Chicago Tribune will idle an unspecified number of newsroom employees by the end of the week. Update: A total of 11 newsroom employees will lose their jobs, including both of the Tribune‘s New York correspondents.

And to all a good night…

Bad news has spread across traditional media at a breathtaking rate. Fortune’s Richard Siklos ticks off some of the sorry numbers. It’s not just the newspaper industry that’s suffering.

Quoting Michael Nathanson, media analyst at Sanford Bernstein, Siklos notes that this is the first time in memory that a coincident election and Olympic year has been accompanied by a decline in ad spending. “Excluding Internet spending, ad spending across all traditional media in this year’s third quarter was down 8.5 per cent, the sixth consecutive quarter of declining spending,” he writes.

Siklos quotes Craig Huber of Barclays Capital forecasting that “classified advertising as a percentage of newspapers’ revenue will decline to 26 per cent in 2009 from 36 per cent in 2006. Meanwhile, newspapers’ share of total U.S. ad expenditures…will have declined to 10 per cent next year from 20 per cent in 1999.”

But it’s not just newspapers. Yahoo just reported a 64% drop in quarterly earnings. Google stock is off more than 45% and analysts are cutting their forecasts of online spending growth. The only winners at this point appear to be subscription services that derive a significant portion of their revenue from non-advertising sources. While the story stops short of pointing to a generalized decline in advertising, the numbers leave you wondering. Could it be that businesses are beginning to question the value of advertising and that those doubts are creeping into the numbers? Could be. On the other hand, it could also just be a crummy economy.

“Get Me Bangalore!”

Maureen Dowd writes about a newspaper that’s offshoring editorial content and learning to make it work. James McPherson is the editor and publisher of Pasadena Now, a small weekly. A year ago, he fired his entire editorial staff and farmed out coverage to a staff of Indian writers he recruited on Craigslist. He pays them about $7.50 per 1,000 words, compared to the $30,000 to $40,000 he was paying each reporter annually. The Indian writers “report” via telephones, web harvesting and webcams, with support and guidance from McPherson and his wife.

Reaction to the idea was brutal at first, but the concept of editorial offshoring is gaining traction. Dowd counts MediaNews Group chairman Dean Singleton among the ranks of executives who have recently talked about massive offshoring to save costs. Singleton says most preproduction work for MediaNews’s California papers is already outsourced to India, which has cut costs by 65 percent.

If the idea sounds preposterous, think about it. How many people in a standard newsroom never leave the building? Any job that primarily involves computer and phone work is a candidate for offshoring. Between cell phones, webcams, virtual meetings and instant messaging, the need for face-to-face contact is diminishing to the point of irrelevance in many cases. On-site reporters will always have value, but in the future they could become a small corps of feet on the street feeding copy to a virtualized production force that is largely invisible. The compelling cost efficiencies give publishers a lot of incentive to be creative.

Ex-LA Times Editor Takes on Zell

Former Los Angeles Times editor James O’Shea comments at some length on recent statements by Tribune Co. CEO Sam Zell about the failure of newspapers to listen to their customers. O’Shea has a problem with that philosophy. “If all we had to do was ask readers what they wanted in a newspaper and then give it to them, wouldn’t someone have done that years ago?” he asks? In fact, they did. “I’ve seen dozens of papers march down that road to no success.”

O’Shea agrees that journalists have done a poor job of demonstrating their value as stewards of the public trust, but he thinks that failure is actually due to their efforts to listen too closely to their customers. The conventional marketing wisdom is that readers want soft, lifestyle stories and the more we give them that pabulum, the more we undermine our value as serious journalists. “To the extent we blur the differences between these once-distinct voices with pandering coverage that resembles advertorial and not editorial we play right into this trap,” he writes.

After nearly 2,500 words of analysis, O’Shea fails to deliver a prescription for change. “Newspapers have to figure out how to deliver journalism that makes the public believe we once again are a public trust, something of value and something they won’t hesitate to pay for,” he writes. Hear, hear! How are we going to do it? O’Shea doesn’t offer any ideas. That makes this piece ultimately rather disappointing.

Miscellany

If the newspaper industry is dying, apparently no one told Saharra White. The California State University, Northridge journalism major pooled her savings and donations from friends last year to launch Say It Loud!, a newspaper for African-Americans of the San Fernando Valley. “I wanted to start the newspaper because there are black people in the Valley doing some positive things,” she says. Say It Loud! is one of about 200 black community newspapers across the US, according to the Black Newspaper Publishers Association. White says she felt the stunning election of an African-American as President demanded new media to cover the impact of the Obama administration on America’s future. She distributed the paper in print for a year, but now has gone online-only as a matter of economic necessity.

The Cleveland Plain Dealer is laying off 27 staffers by phone this morning because not enough people took the paper up on its buyout offer. In a memo yesterday, Editor Susan Goldberg told Guild local 1 employees that those selected for layoff will be notified by 9:30 a.m. Anyone who doesn’t get a call should come in to work.

The publisher of the San Jose Mercrury News has told employees to brace for more layoffs early in the new year. The company has already cut newsroom employment by 50%.

The Charleston (W. Va.) Daily Mail will switch from afternoon to morning publication, giving the city two morning papers. The Daily Mail and the Charleston Gazette will continue to compete with each other, despite the fact that they share production staffs and distribution networks. They also share about 6,000 readers who subscribe to both publications. Afternoon newspapers have all but disappeared in the US.

And Finally…

While executives and journalists fret about the implications of life without newspapers, Donna Freedman writes on MSN Money Blog about more practical matters: what’s she going to use to clean her windows?  The alarming shrinkage of daily newspapers is going to leave people with a shortage of packing material, impromptu gift-wrap and puppy-training supplies, she worries. “Without newspapers, what will I put at the front door to soak up moisture from wet shoes? To say nothing of the fact that I would no longer be able to say, ‘These are the Times that dry men’s soles,'” she groans. Several visitors pick up on the fun, offering eulogies for Sudoku puzzles lost and fish ‘n chips that lost their appeal on polystyrene platters.

Sam Zell is getting credit from his critics for telling it like it is in this interview with  Condé Nast Portfolio at Quadrangle Group’s Foursquare media conference. The famously combative Tribune Co. CEO reinforces remarks he’s been making all year about treating newspapers like businesses. That means questioning everything from sales incentives to the importance of journalism prizes if they don’t contribute to the bottom line. Some nuggets:

I could tell you unequivocally that [the current newspaper] model is a failure, or that model has passed its time of relevance.

In the Tribune he took over, “every single newspaper had a cadre of salaried salesman. Now, you know, I’m just a businessman, but I’ve never seen any kind of a sales force that was effective if, in fact, they had no incentives.”

On home delivery economics: “If you go across the street and you buy a newspaper from a vendor, you will pay 50 cents. But if you get it home-delivered, which costs the company 10 times as much, you pay 30 cents…You try and make those numbers work, and it don’t make any sense.

Journalists are more than willing to tell you what they think you need to know. And to some extent, that’s a valid position, but I certainly don’t think it is the answer. And to the extent that you have journalists who are unwilling to listen and only want to talk, they really should give up journalism and become college professors.

If the goal is a Pulitzer, it’s in the wrong place. In other words, we’re not in the business of…underwriting writers for the future. We’re a business that…has a bottom line…I think Pulitzers are terrific, but Pulitzers should be the cream on the top of the coffee. They shouldn’t be the grounds…newsrooms have basically never recovered from Watergate, and everybody wants to be Woodward and Bernstein, and that’s the definition of success.

86 percent of the cost of the newspaper business is print, paper, distribution, and promotion. That’s untenable long-term and…short-term.

Mark Potts has been no Zell zealot, but he sees a lot of sensibility in the mogul’s remarks. “More so than a lot of people in the newspaper business, he’s dealing in a reality-based environment, not living in the past,” the recovering journalist writes. Newsosaur Alan Mutter, who’s also no Zell fan, largely agrees. And Mark Lacter of LA Observed, which has been a vehement Zell critic for his cost-cutting at the Los Angeles Times, applauds the CEO’s rationale. “Much of what Zell says is painful to read, but it would be a mistake to dismiss many of his views about the news business,” Lacter writes.

We were struck by Zell’s comments about the sales infrastructure he inherited. According to the CEO, Tribune Co.’s sales reps were effectively order-takers, competing with no one and holding a lifetime lock on their territories. In a harsh advertising environment, you wonder how any sales force can be competitive without incentives, particularly when their task is increasingly to sell low-margin online ads in high volume. Internet companies know that online ads require a fundamentally different compensation structure, a hungrier sales staff and a incentives that encourage reps to develop new business. It’s hard to believe that even a year ago, major newspapers were operating without those simple principles in place.

Speaking of Zell, we can’t help notice that it’s been more than two full months since the wonderfully snarky Tell Zell blog has posted an update. We’ve heard that management at the LA Times has recently been coming down on internal critics like a ton of bricks and we hope that the blog’s anonymous author, InkStainedRetch, is simply in hiding, waiting for another chance to ply his or her viciously eloquent talents at a future date.

Happy Thanksgiving to all our readers in the US!

Newspapers have to stop selling ads and start selling audience. Even more importantly, they have to sell what their business customers seek: awareness. That’s best accomplished by engaging many small audiences within the community and monetizing that through ad programs that span multiple channels.

That’s the gist of comments by Stephen Gray, managing director of the American Press Institute’s Newspaper Next project , in an interview with Mark Glaser last week. The piece has caused a stir in the blogosphere because of Gray’s suggestion that newspapers should learn to think of themselves as advertising agencies. In other words, their role could be to direct their customers’ marketing dollars to the channels that work best for the customer, whether the newspaper company owns them or not.

“It’s not just ‘buy banner ads on my news website,'” Gray says. “It’s ‘we can make your business effective on the Internet.’ And that might include doing your website or buying the keywords you should have on Google AdWords for our market.”

Newspaper Next’s three-year project to figure out a strategy for the newspaper business has employed the services of Clayton Christensen, author of The Innovator’s Dilemma, a book that should be required reading for every newspaper executive. The book examines the paradox of successful companies responding ineffectively to changes in their market that ultimately kill their businesses, even though they understand fully the implications of that failure.

Successful newspapers are reinventing themselves as comprehensive sources of local information through whatever channels people use. Gray tells of the experience of the Pocono Record, which sent out a team of reporters to interview local residents and find out what information was difficult for them to find. The paper rejiggered its products to deliver that information and saw print circulation group and Web traffic and sales surge 50%.

As far as what this means for journalists, Gray offers this provocative quote:

“[This is a] watershed moment, when people stop getting information from a [once a day] dropper. We now live on the ocean and can dip in at any time and get whatever we want. So we will spend a lot less time with things that are designed for everyone like news and spend a lot more time proportionately finding solutions for me and what will help me in my life today…I am preaching in the field that newspapers need to visualize themselves becoming the local information utility.”

Gray’s comments are right on the mark, but it’s doubtful that many newspaper executives have the insight or innovation to make the changes he recommends. In Innovator’s Dilemma, Christensen points to numerous examples of executives in highly competitive, fast-changing industries who failed to respond to technology disruption. If the people who ran Digital Equipment Corp. or Novell were unable to accommodate change, why should we believe managers who have overseen comfortable local monopolies for the past several decades will fare any better?