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)

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.

Vol. 1, No. 1

It isn’t a newspaper, but to millions of computer enthusiasts, PC Magazine is an institution. It led the uprising of PC-empowered office workers against corporate IT departments in the 1980s and peaked at 1.2 million circulation in the 1990s. Issue sizes once ran to 500+ pages and the magazine supported a staff of more than 300 people. Its product reviews were considered the gold standard in the industry.

So the announcement this week that PC Magazine will exit the print market and go online-only was a turning point of sorts. With circulation down by half and an advertising base that has switched its budgets almost entirely online, the move makes sense. Expect to see more tech titles follow.

Longtime tech writer David Strom and I devote 14 minutes to a eulogy and look to the future in this podcast. Strom also has his own memorial here. Former PC Mag editor-in-chief Michael Miller also has a few thoughts.

Technology media has been a leading indicator of change in other media sectors. InfoWorld was the first major tech title to abandon print and many publishers have scaled back on size and frequency to keep their ink-on-paper operations viable. Most will tell you that they run print at break-even and make all their profits online. That was apparently the situation at PC Mag. Readers of tech publications are naturally more Internet-savvy than the general population, so the shift to the Internet was evident in the tech market several years ago. Look to that market as a leading indicator of where the media in general is going.

Tough times for the Newspaper Guild are shifting the union’s strategy from organizing laborers to simply surviving. Membership is down about 17% since 1986 and 2,000 Guild members have left this year alone. In a telling move, the union recently cut back the frequency of its internal newspaper from monthly to bimonthly and moved more content online. “Right now the biggest thing you’re fighting is the overall sense of impending doom,” is the uplifting quote from new Guild President Bernard Lunzer.

It’s so bad that the Guild is now focused on helping its longtime adversaries survive. The union recently pitched in to help finance an acquisition and it has worked actively with some newspaper owners to arrange concessions that would keep the titles afloat. It’s also beginning to organize people outside of the newspaper industry, such as interpreters in California courts.

The industry’s shift to online distribution hasn’t helped the Guild. Fobes notes that “Much of its power came from its ability to seize up a paper by asking sister unions running presses to strike.” With fewer copies to print and presses to staff, that club isn’t as big as it once was.

The Associated Press will reduce it staff by 10% over the next year. The cutback of roughly 400 positions will be accomplished by attrition to the greatest degree possible, according to CEO Tom Curley, but layoffs may be necessary. The AP instituted a hiring freeze several weeks ago. The pain being felt by member newspapers has hit the AP hard and the situation has worsened as several large members have announced plans to drop the subscription service in order to save money.

The newspaper industry is in chaos, but you wouldn’t know it at the Financial Times, the U.K.-based business daily that now sells more copies in the US than in the UK. In fact, the economic crisis has been good for business, says Caspar de Bono, managing director of Financial Times Business in a story in BtoB magazine.

The reason is that panicked investors want to know how the meltdown in the US is playing out in other countries, de Bono says. The FT, with its great international reach, is becoming a coveted source of information. US circulation is up 5% this year to over 140,000. Sales for the FT Group were up 11% in the first nine months and publishing sales were up 14%. With The Wall Street Journal setting its competitive sites on The New York Times, the time might be right for the FT to become a major salmon-colored alternative to America’s business daily.

News Without Newspapers

21^st News has a guest column by Gary Hook, former director of editorial operations at USA Today, about why he’s worried about journalism. Hook’s concerns were prompted by attending the Knight International Journalism Awards, which recognized two journalists who risked all to deliver the truth. Hook says their stories are inspiring, but at the same time he’s worried about who will carry on this kind of crusading work once many newspapers are out of the picture.

His answer may be in the award winners themselves: Aliaksei Karol, the editor-in-chief of the weekly Novy Chas in Belarus and Frank Nyakairu, a correspondent and freelancer who has documented human rights abuses in Africa. Neither of these men works for a major metropolitan newspaper. Novy Chas is published in print, but clearly serves more as a means of political expression than a profit-making concern.. Nyakairu is a freelancer and wire service correspondent who could just as easily write for paying Web publishers as for Reuters.

Both men were recognized for what they do, not the medium in which they do it. They are great journalists in spite of not working for a daily newspaper. Which makes Hook’s argument a little hollow. Early in the column, he quotes Walter Lippmann, who said, “The purpose of journalism is to give information on which the citizen can act.” There’s nothing in there about newspapers that we can see.

Miscellany

Alan Mutter takes a financial analyst’s eye to the profitability picture in the industry and concludes that further cuts are likely before year’s end. The problem is that profits are falling at a much faster rate than revenues, about 18 times the velocity of decline for 12 publishers he studied. Mutter uses EBITDA (earnings before interest, taxes, depreciation and amortization), an accounting standard that strips out all the non-cash events that influence an income statement. Nearly every publisher in his analysis suffered year-over-year profit declines to 40% or more, with Sun-Times Media Group logging the most extreme decline at -1523%. “Not one publisher in the group of 12 was able to prevent its profits from falling faster than its revenues,” Mutter writes. And imbalance like that is unsustainable, meaning that more cuts are almost certain.

Ken Doctor has the scoop and the schedule on CNN’s upcoming two-day offsite at which the cable TV network will pitch its services as an alternative to the Associated Press. Doctor thinks CNN’s coveting of major editors has gotten too little attention, and when you look at the numbers, it’s hard to disagree. CNN has more journalists than either the AP or Reuters, and it’s got more delivery channels, too. Amid a nationwide revolt against the AP’s licensing and fee policies, CNN’s argument on Dec. 1 and 2 could be persuasive. However, Doctor proposes nine questions that he thinks the execs in attendance should pose to their host first. He’s hoping they get an answer because the network has been unwilling to offer anyone for an interview.

Once-fierce rivalries in the Metro newspaper business are giving way to calls for collaboration. The Dallas Morning News and the Fort Worth Star-Telegram used to compete toe-to-toe for readers, but with circulation and revenues going south, there’s talk of a news alliance. The two companies recently began delivering each other’s papers to local markets and discussed but later discarded a joint printing agreement. More collaboration is probably on the way, however. Star-Telegram columnist Mitchell Schnurman outlines in detail the financial realities as well as the culture shock engendered by the idea of an alliance.

Speaking of Dallas, documentary filmmaker mark Birnbaum and Dallas Morning News film critic Manny Mendoza have teamed up on “Stop the Presses,” a dark documentary about the future of newspapers. The Rocky Mountain News interviews them, but gives the piece only scant space and no room for the filmmakers to say anything. Kind of like a story in print.

Bay Area News Group has rescinded layoffs of eight workers after the union filed a complaint with the National Labor Relations Board. The union says it wants to explore alternatives to layoff, such as “asking employees who were thinking of leaving, if they want to save someone else’s job.” If you can unravel the meaning of that statement, please comment.

“Bring it on!” cries the Boston Globe’s Joan Venocchi in a cheeky send-up of auto makers, labor unions and other failed institutions that hope to find succor at the government teat. Venocchi sees a parallel to her own profession. Sure, the newspaper industry is in trouble, she says, but “No one in government is going to back a newspaper bailout and no one should…If newspapers aren’t producing news in a format that people want to purchase, it’s the industry’s problem. If Detroit isn’t producing cars people want to buy, that’s Detroit’s problem – not the taxpayers’. Her logic is sound. There was no excuse for the AMC Gremlin.

BusinessWeek‘s Jon Fine tackles the same topic as Venocchi, though his angle is a bailout plan for the newspaper industry. With tongue planted in cheek, Fine proposes that the government adopt the industry crisis as its own and shell out billions to cover the industry’s debts while providing each household with an Amazon Kindle in a rescue plan thinly disguised as a green initiative.

Michael Sifton is out as chief executive of Canada’s Sun Media Corp. after just a year on the job. He’ll be replaced by Pierre Karl Peladeau, the CEO of parent company Quebecor Inc. “Disappointing” results in the company’s publishing and Internet businesses was cited.

60 Minutes’ Andy Rooney ditches his usual satiric tone in a homage to the newspaper industry that gave him his start. “I wouldn’t trade [my newspaper column] for all the stations that broadcast this television commentary. The money I’d trade,” he says. Rooney got his start with Stars & Stripes before World War II, and the industry taught him all about journalism. How sad to see it in such trouble. “There’s been a steady decline in the ciruclation of newspapers, but it’s strange that there’s no decline in the faith people put in them,” he says. TV has benefited from some great journalists, he says, but it’s not the same. “There are more pictures on television. That’s about it.”

As newspapers begin to wind down their print operations, many will take the same course as the East Valley Tribune of suburban Phoenix. Faced with steadily dwindling circulation and a cost structure that doesn’t scale proportionately, the 100,000-circulation daily has scaled back its print schedule to two four days per week. That makes it the largest daily to swallow that pill. The Christian Science Monitor all but abandoned the print market two weeks ago and a few smaller dailies have trimmed Monday or Saturday editions to save money.

The Tribune signaled this move in October, when it laid off 40% of its staff and shifted to a free distribution model. BusinessWeek notes that Wisconsin’s Capital Times took a similar approach last spring, cutting its print schedule from six to two days and abandoning paid circulation in favor of free distribution. The Capital Times had only 16,500 paid subscribers at the time, but that number has increased to 85,000 since the shift was made. Of course, circulation statistics for a non-qualified free publication are practically meaningless, but the number looks good.

Other papers are likely to follow this path. Print isn’t necessarily a bad business, but daily print is becoming a terrible one. Most major metro dailies make the majority of their profit on Thursday and Sunday editions while losing money on Monday, Tuesday and Saturday. It makes sense to start cutting where the revenues are lowest.

Circulation is also a dicey business. While paid circ is marginally profitable for many papers, that isn’t always the case. As the economy deteriorates, it’s going to become more difficult to convince people to pay for information they can get on their computers for free. Advertisers like paid circ, but they’re also learning to accept that the new generation of readers doesn’t expect to pay for information. As the Web has monetized eyeballs, the perceived value of paid circulation has declined.

While the industry debates the question of how to transition newspapers to a viable economic model for the future, papers like the Monitor and the Tribune are blazing a trail that many will probably follow. The cutbacks may be painful, but the brand survives and print continues to play a role in the business, although a reduced one.

Perhaps the newspaper executives who are meeting behind closed doors in Reston, Va. this week will bandy about this idea. Or perhaps not. Jeff Jarvis nails it with this commentary on the hush-hush affair: “These are the very same proprietors of the newspaper industry’s decline. What they need is not the same old executives but new people with new ideas,” he opines. If Jarvis was running the event, “I’d fly in people from Google and a bunch of successful tech companies as well as innovators and entrepreneurs in news and let them do all the talking.” Not a bad idea. Read the comments on his post.

Correction: The original version of this story incorrectly stated that the Tribune had scaled back frequency to twice a week. It actually cut back to four days a week. The Orange County Register has more.

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.

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.

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.