The top 23 US newspapers collectively lost about 6% of daily circulation over the past six months, indicating that even the most compelling Presidential election in a generation isn’t stirring people to subscribe. Ironically, the news came the same week that the Newspaper Association of America reported that traffic to newspaper websites was up almost 16% in the third quarter. The contrast underscores the trend toward consumers turning to newspapers for information but preferring not to read in print.

The downturns were especially bad in towns like Houston, Newark, Atlanta, Philadelphia and Boston, where consumers have plenty of choices and strong media operations in nearby cities. The Washington Post and New York Times suffered the smallest percentage declines, indicating that those papers that made the leap to national circulation a few years ago are struggling less. In fact, the two biggest national dailies – USA Today and The Wall Street Journal – actually had small circulation increases.

Editor & Publisher doesn’t provide raw circulation decline numbers, but we reverse-engineered them out of the published data. Here are our estimates of total declines among the 23 papers that lost circulation:

Other than a concentration in the northeast, the most precipitous declines don’t follow any clear pattern. This is similar to the story six months ago, when the top 10 Sunday newspapers lost 635,000 circulation in one six-month period. Alan Mutter provides the historical perspective. American newspapers have lost nearly a quarter of their circulation since 1984, he says.

Layoff Log

Ugly week…

• The Orange County Register will lay off 110 people, or about 8% of its workforce, in the fourth staff cut this year and the six since 2006. Publisher Terry Horne said the reductions are part of a process to become a “different kind of company.” The company will be “more focused on Interactive and make more of an effort in the print business,” whatever that means.
• The Santa Rosa Press Democrat will lay off 16 people, 10 of them in the newsroom, in the California paper’s third headcount reduction in a year. The newsroom is now about 30% smaller than it was in 2004. The publisher said the weakening economy has cost the paper some major retail advertisers.
• The Memphis Commercial Appeal will lay off 27 workers, or about 4% of its workforce. The cuts include 11 editors.
• McGraw-Hill will cut 270 jobs, but the company’s woes apparently aren’t due to the publishing industry’s implosion as much as to the bigger implosion on Wall Street. The media and information division actually grew revenue 5%, with business-to-business publishing leading the way. It was the market data and analysis businesses that got clobbered. McGraw-Hill has trimmed 670 jobs this year.
• The Cape Cod Times will cut six newsroom jobs and will close bureaus in Falmouth, Orleans and Sandwich, MA. The paper’s owner also plans to consolidate printing operations. The reductions amount to a little less than 10 percent of the Times’s editorial staff. They include three full-time and three part-time positions.

Miscellany

The New York Times’ David Carr has an exceptionally lucid account of the troubles afflicting the newspaper industry and the implications for us all. The twist at the end is especially effective – and troubling.

Writing in Fortune, Richard Silkos is optimistic that the newspaper industry will survive and thrive, although he’s not sure in what form. Silkos sums up the caterwauling by financial analysts and dismisses it as opportunistic. In the long term, the industry outlook is better described by Disney CEO Bob Iger, who said, “It would be hard to dispute the universal appeal of a product that promised to practically deliver the news of the world to your doorstep every morning in a neatly produced, printed package.” Someone’s going to make a killing when the industry recovers, Silkos says. Just you wait.

The editor of the Echo in Suffolk, England, has been jettisoned after 32 years, and he does not go quietly into the night. David Hart uses the occasion of his farewell column to protest the proclivity of media executives to treat editors like replaceable parts. In reality, the editor is deeply ingrained into the community, Hart writes, quoting Malcolm Muggeridge: “Like a man with a white stick, tapping his way blindly through events first in order to try to guide others coming after.” Hart thanks his readers for letting him lead them through the shadows all these year, but one gets the sense he’d use the stick differently on his boss.

The Associated Press has been under mounting pressure from newspapers that object to its fee structure, and now it has a new problem: CNN. The Atlanta-based cable network is wooing editors at some major newspapers with promises of a news service that will “provide stories of interest to your newspaper and online readers — breaking news, national, international, business, politics, consumer, medical, and more.” And it’s hosting several top editors at a three-day, all-expenses-paid event in Atlanta next month to tell them more. Meanwhile, the AP is further reducing rates in a frantic effort to stave off defections.

And Finally…

“The American newspaper may be dying. But this one, the oldest college daily, isn’t going anywhere,” chirps the Yale Daily News in a stirring kickoff to its 132^nd year. It seems the president of Yale still makes time every day to speak to the campus paper and, with the university kicking off its biggest expansion in 50 years, there’s plenty to write about and plenty of eager students to read what the editors write. Booya!

Rupert Murdoch biographer Michael Wolff says the media mogul was unaware that Dow Jones had an enterprise business when he purchased the company two years ago. “He wanted the newspaper, and the fact that afterward he found himself with businesses that were rather more successful than the newspaper business, was surprising,” Wolff told a conference.

Newspaper sales in Japan are 2.5 times those of the US as a percentage of the population and journalist layoffs are all but unheard of. The reason: the population is declining. The percentage of children 14 and younger is the lowest it’s been in 100 years and the overall population of Japan is expected to decline by a third over the next 50 years. The lack of a new generation of Web-savvy upstarts means papers have less pressure to move online and figure out how to serve a new audience. “We only put 20 percent of our content on the Web,” says on association executive. Of course, there’s a train wreck waiting down the line at some point, but in the meantime, publishers can plan to gracefully manage their properties into oblivion in lock-step with demographic trends.

The Pacific Northwest Newspaper Guild pried a nice contract settlement out of the Seattle Times: a 6% raise over two years. That money’s gotta come from somewhere, though, and staffers are bracing for an “ugly” layoff announcement in the near future.

We’re late reporting this one (little things like making a living do take their toll), but the New York Times Co. reported that profits fell 51.4% on a 14.4% decline in ad revenue in the third quarter.  Standard & Poor’s responded by lowering the company’s debt to junk bond status. Print advertising was off 18.5% and online advertising was up 10%. Online revenue now makes up over 12% of total sales at the company. The board also said it is considering writing down the value of assets in its New England Media Group, which includes the Boston Globe, $150 million. The Times Co. originally paid $1 billion for the group.

Traffic to newspaper websites was up almost 16% in the third quarter, according to the Newspaper Association of America. Page views were up 25%, making it the best quarter for newspaper website traffic since the organization began tracking those figures in 2004. Interest in the political campaigns and the ongoing turmoil on Wall Street were cited as likely drivers of the traffic surge. It remains to be seen how year-over-year comparisons will fare once the election is over.

Threatened Journalist has an uplifting story on San Diego Union-Tribune ex-pats who are doing quite nicely, thank you. One is a communications manager for the Port of San Diego, another works in media relations for the University of Southern California and a third is a Methodist minister in Mission Valley. All are wistful about their former jobs in the pressure-packed newsroom, but they say they have no regrets. The way the industry was going, there wasn’t much future in the business. The author relates other happy landings: “Former metro reporter Liz Neely just landed a job as an investigator for a law firm. Former business reporter Craig Rose is working for City Attorney Mike Aguirre. Former columnist Gerry Braun is working for Mayor Jerry Sanders. Former reporters Chet Barfield and Mark Sauer are working for Councilwoman Donna Frye. Former North County reporter Lisa Petrillo is working at Children’s Hospital. And the list go on.” So there is life after newspapers!

It’s a dismal day in newsland. Gannett Co. will cut 10% of its workforce, or about 3,000 jobs, by early December. The announcement – Gannett’s second major headcount reduction this year – will bring to over 15,000 the number of newspaper employees who have lost their jobs in the US alone in 2008.

In reporting sharply lower earnings on a stunning 17.7% drop in quarterly revenue, Gannett said it must cut broadly across its portfolio of 84 major daily and hundreds of local newspapers, with the sole exception of USA Today, which appeared to escape the carnage. Rather than cutting arbitrarily, the company will ask each paper to submit its own plan and then trim selectively. These aren’t buyouts but layoffs, and they come on top of the 1,000-person reduction announced in August.

Also today, Time, Inc. said it plans to cut 600 jobs, or 6% of its workforce, and restructure the company in a move to rein in its decentralized structure and improve efficiency. The layoffs will come across the range of Time, Inc. titles, although some publications will be hit more severely than others. The company will also organize its 24 magazines into three groups: news, lifestyle and style/entertainment. A New York Times report says the restructuring is intended to focus more energy on the company’s flagship brands like Sports Illustrated and Fortune, while increasing information-sharing and even bylines across publications. The company will still have 10,200 employees internationally after the cuts.

Gawker has a list of Time, Inc. layoffs and closures stretching back to 2002. The site also notes that the coincident resignation of Time publisher Ed McCarrick, a 35-year veteran, is a symbolic departure from the old-school style of publishing, in which two-martini lunches and golf courses were the principal business venues.

Analyzing the Monitor‘s Exit from Print

The New York Times offers some perspective on yesterday’s announcement that the Christian Science Monitor will broadly scale back its print operations, saying the move makes the Monitor “the first national newspaper to largely give up on print.” The Times also quotes Monitor editor John Yemma describing the move as “a new model” that few news organizations outside of the heavily subsidized Monitor could hope to attempt. Stephanie Clifford’s account also notes that Monitor circulation has dropped from 220,000 in 1970 to 52,000, making the print closure a lot easier to justify. She adds that while going online-only may seem appealing to some executives, print advertising still brings in 92% of newspaper revenue in the US.

Such was evidently not the case at the Monitor, though. Yemma is quoted as saying that advertising revenue brings in a paltry $1 million a year, compared to $9 million from subscription revenue. In fact, the Monitor already makes more money online than in print, he said. Not many newspaper publishers can say that. Another nugget: the CSMonitor.com site gets about 3 million page views a month right now, a number Yemma said he wants to increase to at least 20 million over five years.

That’s the Press, Baby! agues that had the Monitor been forced to fend for itself as a profit-making entity rather than enjoying massive subsidies from the Christian Science Church, it would have closed the print business long ago. David Sullivan also harkens back to his youth in Indiana, when two daily newspapers controlled the flow of information and told you only what served their political interests. The Monitor was an oasis of objectivity and journalistic quality in that stew, Sullivan writes, and he hopes it will continue to set a standard for rational discourse when everyone else is going crazy.

When we spoke to Christian Science Monitor Editor John Yemma last month, we got the impression that print was central to the Monitor‘s mission for a long time to come. Looking back at that interview, we realize that Yemma never said anything about daily frequency.

So we suppose it’s no surprise that the Monitor used its 100th birthday year to announce that it’s shifting most of its resources online and scaling back to a weekly format. Given the trends in the business right now, the move is probably prescient. Below is today’s press release. We’ll have more from a Monitor spokesman within the next few days.

CHRISTIAN SCIENCE MONITOR ANNOUNCES SHIFT FROM PRINT DAILY TO ONLINE DAILY AND LAUNCHES WEEKLY PRINT PUBLICATION

– International Newspaper Embraces the Future of Journalism with a New Web-first Format –

Boston, MA, October 28, 2008 – The Christian Science Monitor plans major changes that are expected to make it the first newspaper with a national audience to shift from a daily print format to a daily online publication that operates 24/7.  The Monitor today announces that in April 2009 it will produce an enhanced, constantly updated version of its Web site, CSMonitor.com, and launch a weekly print edition and a daily electronic subscription product.  In addition, the Monitor will discontinue its daily print publication.

Consistent with the Monitor’s commitment to thoughtful, global news and perspective, its new Web edition will feature original reporting seven days a week, and its new weekly print publication will look behind the headlines and help readers understand global issues.

As recent years have shown, the future of journalism is the Internet.  By transforming itself into a daily online publication, the Monitor is the first major international newspaper to fully embrace that future, allowing its reporters to publish news as it happens.

In the coming months, the Monitor will make significant upgrades to its Web site, CSMonitor.com, including:

• Original reporting on global news and events seven days a week
• Continuously updated stories
• Global conversations between readers and Monitor staff
• Links to valuable content elsewhere on the Web

By launching its new Web-first format, the Monitor is remaining consistent with its original vision to be a daily publication as laid out by Monitor founder Mary Baker Eddy.  With the full commitment to 24/7 coverage via the Internet, the Monitor is now a true daily news outlet.

Although the Monitor’s Web site will be the home for its daily news coverage, the new weekly edition of The Christian Science Monitor will ensure the continuation of the Monitor’s thoughtful, unbiased, in-depth coverage in a print format.  The new publication will feature:

• The Monitor’s well-regarded analysis of both US and global news
• Weekly snapshots of life around the globe and news around the Web
• Profiles of individuals who are tackling tough problems and trying to make a difference
• Special emphasis on the environment, innovation, money & values

As part of its multiplatform format, the Monitor will also launch a new daily e-news edition which will be delivered via e-mail. The two to three page subscription product will include:

· An original column from the editors

· A selection of the most important Monitor stories of the day

· Links to other Monitor stories

“Like much of the news industry, the Monitor has embraced online reporting and is now one of the first publications to treat its Web site as its primary publishing format,” said John Yemma, editor of the Monitor.

“The Christian Science Monitor recognizes that daily print has become too costly and energy-intensive.  Online journalism is more timely and is rapidly expanding its reach, especially among younger readers,” said Yemma.  “There’s still a role for print, but one that is geared to weekends, when people still can find time to catch up, look behind the headlines, and experience the pleasures of print.  Our shift to a Web-first, multiplatform strategy is likely to be watched by others in the news industry as they contemplate similar moves.”

Monitor Managing Publisher Jonathan Wells added that the move to a Web-first format enables the Monitor to more effectively reach a global audience, and he emphasized the combined value of the Monitor’s Web edition and its new weekly print publication.  “We have a base of print readers that we can continue to serve by providing longer format journalism on a weekly basis,” he said.  “Ad revenues from our Web site and circulation revenue from our print and e-news editions will form the basis of our business model as the Monitor enters its second century.”

Last week, I spent a day speaking to two college classes about the changing media industry. Both groups consisted of juniors and seniors, nearly all of them majoring in public relations. These people should be heavy consumers of information, and they are. When I asked the roughly 45 students how many of them read a newspaper online every day, nearly ever hand went up. But when I asked how many subscribe to a newspaper, only a single student raised a hand.

Oh, they read newspapers. They read Metro, the local entertainment weekly, the college daily and even the major metro dailies on occasion. The difference is that they don’t subscribe. They consume information when it’s convenient to them, and so much information is being pushed at them all the time that they have plenty of choices about what to read. The concept of paying to subscribe to something is foreign to these people in their early 20s. Why pay for what you can get for free?

Some publishers may be adapting to this new reality and paring back their paid subscriptions accordingly. Back in April, the Audit Bureau of Control changed its rules to enable publishers to declare as paid circulation copies that they sold for as little as a penny. At the time, some people predicted the beginning of a new circulation war. But the opposite has apparently happened. The Wall Street Journal reports that the current trend at big papers is to manage circulation intelligently, focusing on hitting the highest-quality readers at the best time of day. The story cites the Atlanta Journal-Constitution and the Arizona Republic as two papers that have cut circulation to the applause of advertisers, who didn’t see much value in distributing to readers who live so far away that they would never be candidates to come in to their stores. And publishers do see growth potential in circulation of Sunday issues, which arrive when people are most receptive to reading them.

Involuntary declines, continue, though. The two New York tabloids continue to post ongoing readership losses, in part because of price increases announced earlier this year to offset the rising cost of newsprint. Fortunately, newsprint prices are stabilizing now, in large part due to decreases in demand brought about by the slowing global economy.

Pressure to Go Private

Many years ago, for reasons that are unknown to us, major newspaper publishers began reporting monthly, rather than quarterly earnings results. Today, that practice has become a millstone around the industry’s neck, casting a public spotlight on the industry’s woes with painful frequency.

While reporting on the latest round of earnings declines, James Erik Abels of Forbes begins to ponder the once-imponderable: maybe it’s time to think about the end of the newspaper industry. The business model isn’t viable any more, Abels says, and the recession will hit hard at its base of local advertisers. The piece suggests that the pressure of earnings comparisons is only making matters worse by publicizing the industry’s problems. That’s one reason some equity managers are encouraging owners like the Sulzbergers to take their companies private: it enables them to restructure outside of the glare of publicity.

Newspaper brands have considerable value, which is one reason some private investors are lining up to buy them, Abels says. Relaunched with smaller staffs and more nimble businesses, newspapers would have a leg up on online startups because of their reader loyalty. It’s just that the process of getting to that smaller staffing model is to difficult to manage in public view.

Superblogger Robert Scoble has a proscription for the newspaper industry: experiment a lot and do it quickly. Scoble thinks every reporter should have a camera phone that’s capable of taking high-quality video images and should be able to broadcast events in real-time just like television does. He also says people who think quality journalism is dead should look at TalkingPointsMemo, Pro Publica and Topix, which are building profitable businesses based upon good reporting. He also says keep an eye on Spot.us, a startup that will fund journalism based upon the stuff people want to read.

Layoff Log

• Having recently extracted major union concessions by threatening to go out of business, The Newark Star-Ledger rewarded its staff by eliminating 40% of their jobs. Most of the reductions will be achieved through buy-outs, though, and management had told the unions back in August that it needed substantial cuts to keep the paper viable. Huffington Post says the actual newsroom losses will be closer to 45% of the 334 editorial employees. The magnitude of the cutback is impressive eye-popping at a time when most newspapers are still trimming around the edges. However, the publisher said it believes the Star-Ledger can return to profitability when the changes are complete.
• Speaking of trimming around the edges, A.H. Belo is doing everything it can short of layoffs to tighten the belt. The suffering publisher announced it will freeze salaries, reduce employee retirement contributions, suspend its dividend, trim capital spending and lower the fees it pays to its board of directors. The company also renegotiated its deal with creditors. “It’s probably not going to get better until 2010, if then,” says industry analyst John Morton., a newspaper industry analyst in Maryland.
• As LA Observed predicted last week, the Los Angeles Times laid off 75 journalists, or about 10% of newsroom staff. That comes on top of 150 job cuts in the newsroom this past summer. The site has the dour memo from Editor Russ Stanton.
• Randy Turner is the latest blogger to point out the contradiction of newspapers reporting everyone else’s layoffs but burying their own. He cites the Joplin Globe, a Missouri paper that he says laid off 15 staffers last week but has said nothing about it since. And he provides a laundry list of layoffs at other local businesses that the Globe has covered in recent months.

More papers are dropping the Associated Press. The Columbus Dispatch becomes the latest media entity to just say no to the wire service, following by just days Tribune Co.’s blockbuster announcement that it would exit the consortium. The AP’s costs are a sore spot with budget-challenged publishers, as are its tendency to compete with them online.  Editors are frustrated by new rules that require them to insert tags on stories they contribute to the wire service, which the AP then publishes through its numerous Internet channels.  The editors complain that revenue-generating traffic is thus diverted to the AP from their own web sites.

The AP claims new pricing will cut newspapers costs by about 10% beginning next year and that it will share ad revenues with members.  Publishers, though, say the lower prices aren’t enough. The AP’s fees can exceed $1 million annually at some newsrooms, which is about the same cost as 12 to 15 salaries.  In light of the need to cut costs, newspapers are coming up with creative alternatives, including regional consortia and citizen contributions. The New York Times account says defectors will also turn to less expensive newswires to cover the void left by the AP.

Pundits Disagree on Media’s Future

The director of digital at the UK’s Guardian Media Group forecast two years of “carnage” in the traditional media industry.  Emily Bell said she could see five national newspapers in Britain going under during the next two years as well as “the regional press heading for complete market failure.”  Even successful media companies will have to prepare for a long period of losses, she said.  The culprit is undifferentiated content driven by the traditional role of media as representatives of their customers, rather than participants in a conversation.  The only way to avoid irrelevance is to change this mindset, Bell believes.

However, the global leader for entertainment and media practice at PriceWaterhouseCoopers in Hong Kong begs to differ. “Traditional media isn’t dead yet and won’t be for the next five years, ” Marcel Fenez told the World Association of Newspapers readership conference, Despite its rapid growth, digital advertising will represent just 10 per cent of total advertising for newspapers by 2012, he said. He forecast that global newspaper advertising (including digital) will grow 2.9 percent to $136.8 billion during that time.  Part of traditional media’s advantage is its willingness to collaborate, he noted.  By not trying to “gouge the other guy’s eyes out,” media companies can come up with the kind of creative partnerships that stymie other industries.

Another speaker at the same conference danced on the hyper-local theme. Randy Bennett, vice president for business development at the Newspaper Association of America, said newspapers need to fight back against stagnant readership growth by becoming the destination of choice for local activity. “We must be a trusted source for all relevant content created by us, or others – professionals or amateurs,” Bennett said. “We must give users a tool for extracting the content they need and create a platform for interactive conversation.” Is there a business model in all this?  Bennett admitted he was unaware of one but expected that large sites would come up with something

When Bad News is Good News

Publishers know that bad news sells, and new data from Nielsen Online proves that point. The service’s tally of unique visitors at the nation’s top newspaper Web sites in September showed that all but one (the Village Voice) were up by double- or even triple- digit percentages. The big winner was the Anchorage Daily News, which enjoyed a 928% spike in unique visitors, presumably due to interest in native daughter and Vice Presidential candidate Sarah Palin.

The irony of the financial crisis is that it has also been good for some segments of the publishing business. Reuters says business media are enjoying a short-term lift in readership and ad dollars, thanks to all the attention being drawn by Wall Street’s financial crisis. The question is what happens after reader interest cools? The long-term slowdown in advertising in conventional media is likely to continue and perhaps worsen beginning in the first quarter of 2009, experts predict.

Miscellany

News Corp. Chairman Rupert Murdoch says the unprecedented global financial crisis presents a buying opportunity for his company. Speaking at the company’s annual meeting on Friday, Murdoch said News Corp. just turned in its sixth straight year of record earnings and is sitting on $5 billion in cash, making it well prepared for further downturns in credit markets. The company has also renegotiated its credit lines to allow for longer payback periods.

No one, including News Corp. has been left untouched by the mess on Wall St., Murdoch said.  ”It has weakened advertising markets and beaten down our share price,” the 77-year-old CEO said. “We have prepared ourself well for this day.” With next year presenting “unprecedented challenges,”  News Corp. will look for acquisitions in growth businesses. India, eastern Europe and Asia have the most promise, Murdoch said. He also expressed “great confidence in our future,” apparently referring to News Corp.’s future, not necessarily everybody else’s.

A team of enterprising publishers in the UK has produced a four-page newspaper created entirely by hand. “Every word and every image and every mark of any kind in The Manual was drawn by a team of volunteers – mostly illustrators,” a blog entry says. “Each copy of the paper has been numbered in a limited edition of around 100.” The experiment foresees a day when “handmade qualities can transform newspapers from ‘junk’ to collectable.” Sounds like a neat idea.

Just two months after Puerto Rico lost its only daily English-language newspaper, a new suitor has stepped in. The Puerto Rico Daily Sun will be available starting this Wednesday by subscription and at newsstands. The paper will be staffed largely by members of the now-defunct San Juan Star. Few details were released. The publisher said an upcoming press conference would reveal more.

The Seattle Times Co. may be close to selling its newspapers in Maine, but that probably won’t save it from having to make deep cuts early in the new year.  Al Diamon, Maine’s most widely-read media critic, reports that “two informed sources in the newspaper industry” says a company called Maine Media Investments could buy the Blethen Maine Newspapers by the end of the month. The chain has been an albatross for the Seattle Times, which has enough of its own problems on the opposite coast. Diamon quotes sources as saying more deep cuts are expected in January.

The new executive editor of the Merced Sun-Star in California’s heartland mixes metaphors and crows about his performance at the free throw line in one of the more delightfully clueless homespun essays we’ve seen by a scribe in a while. Our favorite line is this drug reference (emphasis added): “The newsroom…is down to seeds and stems in terms of numbers of reporters, photographers, copy editors and sports writers.” Someone should put Mike Tharp in touch with the Merced County Sheriff’s department, which destroyed about six tons of marijuana plants the previous day.

Unlike many newspapers, the Death Watch functions as a nonprofit (although, in the recent words of Wall Street Journal Managing Editor Robert Thomson, the same thing could be said about many newspapers these days), so an extremely busy week has forced us to pull back on updates.  Here are a few recent items we’ve noticed.

WNYC’s On the Media has an audio interview with Lee Abrams, Chief Innovation Officer at Tribune Co. Abrams addresses the widespread perception that he is, well, a little crazy. Are you slightly unhinged? the radio station asks? “Maybe, if that’s what it takes,” Abrams responds. He also praises some advertising sections for being readable and useful and chides journalists for not accepting that fact. And he’s surprised that papers like the Chicago Tribune don’t promote more forcefully the fact that they have reporters on the ground in placed like Baghdad.

“I’ve never seen an industry more negative,” Abrams says, citing a Tribune editorial that called the paper’s recent makeover nothing more than a campaign to publish on the cheap. “That’s typical of the whole newspaper businesses’ point of view. I’ve never seen an industry more negative in articles like that…If [the industry] was in free fall, you’d think they’d be trying more things.”

Abrams has been more outspoken recently.  He was at the Dow Jones/Nielsen Media & Money Conference this week, where he tweaked one of Tribune Co.’s South Florida properties for running stories that even the reporters agreed were boring.  Abrams also challenged what he called the myth that staff cuts cheapen content and he called the idea of a government bailout for the industry “terrible. Newspapers would then focus on this ultra-elite point-five-percent and create these papers that are just unreachable to a mass audience,” he said.

Robert Thomson, the Wall Street Journal’s managing editor, seems to agree.  “Part of the problem is… you had a journalistic culture which was very self-indulgent, self-reverential and self-referential.  It wasn’t referring to reader’s interests’ but more to journalistic self-devotion,” he told the crowd.

Gawker’s Nick Denton says The New York Times is planning 20% staff cuts in the newsroom, with the feature sections and magazine staffs to absorb the brunt of the hit.  He doesn’t quote any sources, though.

The 120,000-circulation Winnipeg Free Press will be on an erratic publishing schedule for a while after 1,000 employees walked off the job on Monday, demanding a new contract.  The union is asking for a 3% increase on a multi-year contract.  Publisher Bob Cox said the Free Press will continue to publish via its website and won’t charge readers for missed papers.

A Las Vegas publisher of niche newspapers and magazines laid off as much as 10 percent of its staff this week, or about 20 employees the Las Vegas Review-Journal says. Greenspun Media Group, a sister company of the Las Vegas Sun newspaper, idled the editor of H&D, a glossy bi-monthly home and design magazine, a reporter for the special sections division at the weekly In Business Las Vegas and a few other people.

Writing for Reuters blogs, Robert MacMillan quotes former Merrill Lynch newspaper publisher analyst Lauren Rich Fine as being cautiously optimistic about the long-term outlook for newspapers.  “Most of these companies can still be decent businesses.  They just have to rethink their expectations,” Fine says.  MacMillan also has encouraging words from Goldman Sachs analyst Peter Appert, who believes that newspaper companies will survive in the long term, although at much lower margins.  What’s the timeframe?  At least five years, Appert believes. For now, he’s advising clients to underweight the stocks.

John Schuster wonders how long Tucson, Arizona can continue to be a two-daily town.  The East Valley Valley Tribune announced huge cutbacks last week and the rival Arizona Daily Star is owned by Lee Enterprises, a company that is in severe financial straits.  Meanwhile, public faith in journalism wasn’t helped by an incident at the student newspaper of the University of Arizona.  A student reporter was recently outed for submitting for stories that allegedly quoted fictitious sources.

Cincy Navigator

Mark Glaser has an extended interview with Jennifer Carroll, Gannett’s vice president for digital content. She gives a progress report on Gannett’s Information Center initiative, a 2006 campaign to remake its 85 daily newspaper newsrooms into 24-hour digital publishing platforms. Carroll says that the programming and video skills the company has taught its journalist has led to some truly innovative coverage, like the Des Moines Register’s video/database/map mashup coverage of the Parkersburg tornadoes. Another innovation is CinciNavigator, a mass mashup created by the Cincinnati Enquirer that embeds information about local events ranging from arrests to nightclub listings on a map.

Carroll says database reporting can create a groundswell of interest that leads to improved print sales. The Rochester Democrat and Chronicle found that by publishing a database on police overtime the Thursday before a Sunday print date, it created anticipation that drove the highest Sunday single-copy sales of the year.

Carroll says Gannett is hiring and expanding its commitment to digital journalism, even against the backdrop of a terrible business climate.  A few people comment on the interview skeptically, suggesting that newspapers will never be a destination for multimedia content.

Future for Journalism Bright, Just Not So Much for Newspapers

John Kirch writes about a recent panel on the future of journalism at the University of Maryland-College Park. He offers the optimistic view that that future is bright.  The comments by panelists reflect our own opinion that the best time to get into journalism is when everyone else is getting out.  The future of big branded news institutions is dim, panelists said, but journalists will still be able to survive and thrive by promoting their own brands instead of the brains of their employers.

Paraphrasing the panelists, Birch writes, “Reporters will not only have to know how to interview sources and write stories for different media platforms,…they will have to know basic business principles so that they can create individual brand names for themselves that can be used to build followings and create job opportunities.”

Knowledge of business principles goes against the grain of conventional journalism teaching, of course.  However, that doesn’t mean journalist have to sell their souls, only that they need to be able to promote themselves because they are the product.  The risk is that journalists fall back to providing only content that delivers a large audience, such as celebrity gossip. We hope to see nonprofit and public interest organizations emerge that promote content that the public needs to know about.  The difference is that the content mix will be pulled by the readers more than pushed by editors.  What that will look like is anybody’s guess.

Miscellany

Jeff Jarvis is as provocative as ever in this withering attack on a recent AJR piece by Washington Post reporter  Paul Farhi. Farhi makes the case that journalists aren’t responsible for the plunging fortunes of newspapers; a variety of competitive and demographic trends are the real culprit. Balderdash, says Jarvis. “Victimhood is an irresponsible abdication of responsibility, a surrender.” We suspect that Jarvis was trying to stir up controversy and boost attendance to his forthcoming conference more than he was trying to savage a colleague. In that respect, he was successful. There are more than 150 comments on the piece, many of them thought-provoking, and Jarvis returns to engage with his audience frequently during the debate.

While free daily newspapers have struggled in US, they’re evidently hitting a chord with the commuter set in the UK.  Brand Republic reports that free dailies given away to commuters are gaining a foothold with the younger readers, who have largely forsaken paid daily newspapers. “City AM‘s daily reach has increased from 23% in 2007 to 32% this year, while the FT’s has dipped from 22% to 20%,” writes Mike Fletcher. Metro’s circulation now tops 3 milllion across the UK and has brand extensions that offer eight different platforms for advertisers. Perhaps more importantly, the freebies have solid demographics among the up-and-coming audience of young adults. London Lite, which is published by the same company that also produces the Daily Mail and Evening Standard, counts almost 80% of its readers in the 18- to 34-year-old demographic group.

The Providence Journal will lay off 25 part-time in six full-time employees, all from its news operation.  The move leaves a news staff of 200 people and a total staff of 705 at the ProJo, down from 763 in early September.

If online competition is hitting the broadcast industry as hard as the print business, why haven’t there been more layoffs in TV newsrooms?  Here’s one explanation.

The collapse of so Wall Street firms will hit the media business hard, with newspapers taking a disproportionate share of the body blows, according to a Bernstein Research report.  The report says finance and insurance/real estate advertising makes up 21% of newspapers’ ad revenue, about double that of broadcast media and slightly more than that of online media. “History suggests that another industry will eventually fill the growth void left by the insurance/real estate and finance sectors, but the operative word is clearly ‘eventually,” wrote the report’s author, analyst Michael Nathanson.

Into the perfect storm of Internet competition, spiraling newsprint costs and the decline of classified advertising has come a fourth factor: probable worldwide recession. It couldn’t happen at a worse time for the beleaguered newspaper industry.

Newspaper advertising revenue is expected to decline a record 11.5% to $40.1 billion this year, the Newspaper Association of America says. The organization does see light at the end of the tunnel; it’s predicting that the nosedive will level off a bit in 2009. But such forecasts should probably be taken with a grain of salt, considering that no one knows the full extent of the current financial crisis or the likelihood that worldwide government interventions will succeed. Also consider, at Tim Windsor points out in a comment on the E&P blog, that the NAA initially forecast just a 1.2% decline in business this year.

The 11.5% revenue drop would be the largest the association has seen since it started tracking results 58 years ago, and it reflects the continuing collapse of the classified advertising market at the hands of Craigslist et. al. In fact, the NAA expects classified revenues to fall from $14.1 billion in 2007 to just $9.4 billion in 2009, a 33% crash in a business that is already off by 50% from its peak. Retail advertising is expected to decline about 10% and national advertising should drop 13% in the same time period. Online revenue won’t pick up much of the slack: the NAA forecasts meager growth of 1.8% this year.

Media Life magazine catches up with David T. Clark, senior research analyst for publishing and advertising at Deutsche Bank Securities, to get his take on the wreckage. Here are a few quotes:

“This is a pivotal time for the newspaper-retailer relationship…Share losses now will be amplified when we emerge from this downturn.”

“Newspapers must be perceived as a marketplace in which the advertising is considered content, not clutter.”

“I think we’ve got at least several more quarters of very steep industry ad revenue declines to go before we see much improvement.”

“Newspapers do digital pretty well, but…it doesn’t look like a viable business model will emerge in time to save some metro dailies…They are at the bleeding edge of the structural issues the industry faces…Metro papers over-index to classified advertising, which is disappearing fast….They need to variabilize as much of their costs as possible, get all of that old media hardware off of the balance sheet…Tough to sell a printing press these days, though.”

Desert Storm

The East Valley Tribune of Mesa, Ariz. will make massive cutbacks, laying off 142 people, or about 40% of its staff. The daily will also withdraw coverage from nearby Scottsdale and Tempe and scale back to four days a week, most likely Wednesday, Friday, Saturday and Sunday. The print format will also be scaled back to two  sections ‑ one for local news and one for sports, entertainment and late-breaking news.The Tribune has a paid and free distribution of around 100,000. It’s owned by Freedom Communications, a publisher of more than 100 mostly small newspapers and a few big ones, including the Orange County Register. Ray Stern analyzes the impact on the valley, including the huge loss the cutbacks represent to the city of Scottsdale, which may become the US’ largest major metro area without a daily newspaper.He also lists some of the prominent journalists who will be exiting the scene.

Spokane Spokesman-Review Girds for More Cuts

The Spokane Spokesman-Review, whose editor quit last week over cutbacks in his staff, named Gary Graham to the post. Publisher W. Stacey Cowles took some questions from staffers and offered little optimism about the immediate future. His responses are noted on a staff blog. Highlights:

• The S-R “is planning for the possibility of not having” the Associates Press in the future.
• Potential cost-cutting measures include a reduction in trim size reduction (next June), dropping some circulation routes in outlying areas, reconfiguring press runs and office space consolidation. The paper is likely to close its Spokane Valley bureau.
• “The company would like more flexibility in compensation of newsroom employees, more flexibility to change compensation to reflect market rates.” In other words, pay cuts are likely.

Tumbleweeds in Albany

The New York Times writes of the impact of staff cuts on the press corps covering goings-on in Albany. With the closure of the New York Sun last week, five newspapers have exited the state capitol in less than two years. The organization of statehouse journalists in Albany has seen its ranks dwindle from 59 members in 1981 to 42 journalists last year. “With the exception of Buffalo, Watertown and Albany itself, no city outside the New York metropolitan area has a newspaper with a dedicated, full-time correspondent in the Capitol,” writes Jeremy Peters. Wire-service bureau reporters don’t offer the local angle that correspondents used to provide. Reporters who once jostled for desk space now have their pick. “It’s like tumbleweed should be blowing around here,” says one reporter. Observers fret that the cutbacks are leaving legislators to play in their own private sandbox withoutthe limits of citizen oversight.

Layoff Log

• More cutbacks at the Los Angeles Times. LA Observed is reporting that the paper will cut 75 positions, which would bring total newsroom staffing to about 650. That’s down from a high of nearly 1,200 in 2001. The reductions will be achieved through buyouts, if possible, but staffers will be told that this round of cutbaks will be their last chance to get a package of two weeks’ pay for each year of service. Media Bisto says the Washington bureau will be cut back right after the election.  American Thinker comments“More and more unemployed left wing journalists are joining the sans culottes. History teaches us that unemployed intellectuals are fodder for revolutionary movements.” (via Edward Padgett)
• The Cleveland Plain Dealer plans to cut 38 unionized newsroom jobs, or about 13 percent of the newsroom’s staff. Most of the jobs being eliminated are held by Guild members. Employees have until Nov. 20 to accept a buyout offer, with layoffs expected to make up the difference. The Plain Dealer, which has 299 newsroom employees, cut 64 journalist jobs in 2006. The actual reductions are somewhat below the rumors of 20% cutbacks that circulated in June.
• Boulder’s Daily Camera is moving all of its remaining printing and packaging operations from Boulder to Denver and laying off 29 more workers by the end of October.The paper will now be printed at the Denver Newspaper Agency facilities, where the Denver Post and the Rocky Mountain News have recently taken up residence.

And Finally…

The industry downturn has claimed one of the world’s most famous journalists – and he isn’t even a real person. Rick Redfern, the resident ink-stained wretch of the Doonesbury comic strip for more than 30 years, has decided to accept a buyout. “Redfern leaves with utter resignation, apparently having reasoned that he has no real newsroom options,” writes The Washington Post‘s Michael Cavna. “Thanks for the 30-plus years, Rick. By the fourth panel — in the style of a true newspaperman — you always had the perfect line.”

With the newspaper industry already reeling from a perfect storm of recession, Internet flight and falling real estate prices, it’s hard to imagine how things could get much worse. Well, they just did. The bankruptcies and sales of several prominent Wall Street firms have severely tightened capital markets at a time when many newspaper companies are already groaning under the burden of enormous debt. The collapse of the mortgage industry will also drive down real estate prices, further crimping a vital source of classified advertising revenue. One analyst estimated that the total value of US real estate could fall from a high of $22 trillion to a low of $9 trillion before the healing begins. This will leave creditors will massive amounts of real estate assets that are worth pennies on the dollar. And there are few buyers available. As John Duncan explains in this insightful analysis, no one is giving credit right now, which drives prices lower and further limits the pool of available buyers.

With credit markets tightening, publishers have few places to turn to raise capital. Duncan cites the example of McClatchy which just restructured its debt payments. McClatchy’s debt is based on the London Interbank Offered Rate (LIBOR), which is the rate at which the world’s most preferred borrowers are able to borrow money. The LIBOR climbed to an all-time high of 6.88% this week, which Duncan estimates will cost McClatchy at least $1 million a week more in debt service payments than it expected just a week ago. The same dynamic applies to any other publisher looking to relieve debt loads. Restructuring will only force those costs further upward.

For businesses like Tribune Co., the news gets even worse. Sam Zell has been performing financial card tricks just to meet quarterly debt payments. His ace in the hole has been non-newspaper assets like the Chicago Cubs and Wrigley Field, as well as real estate picked up in the Tribune LBO. Those assets are now valued at significantly less than they were just a few weeks ago, meaning that Tribune Co. has far less leeway to leverage them to generate cash.

On top of all this, of course, is the worsening outlook on the revenue side. As the economy settles in to what is likely to be a protracted recession, ad revenues will shrink further. The real estate sector, which has traditionally been a profitable source of classified advertising revenue, will suffer most of all. Just look at the effect that the devastation of the Florida real estate market has had on newspapers there. Now imagine this scenario spread across the entire country.

Alan Mutter theorizes that even a broad recovery in real estate prices wouldn’t help very much. He notes that advertisers are spending a shrinking proportion of their dollars on newspaper advertising. The emergence of more-efficient online channels is sucking dollars away, meaning that even an unlikely quick recovery in large consumer markets like housing and cars would benefit newspapers disproportionately less than other media.

Duncan’s likely scenario is that cash-rich investors will sit on the sidelines until the carnage is complete and then enter the markets to buy properties at pennies on the dollar. This isn’t necessary a bad thing: “If newspapers were managed by new groups of people with no real romantic link to the glory days of newspapers, and freed from management grown fat and lazy on the easy profits of the glory days of American local newspapers, maybe titles can innovate again and start thinking about how they serve audiences better in print and online,” he writes. In other words, instead of saving the American newspaper industry as we now know it, the more likely scenario is that the business collapses completely and is reinvented by people who have no romantic attachment to earlier times.