USA Today First Edition, 1982 via Fast Horse blog

As USA Today celebrates its 30th birthday, columnists are wondering it it’ll see 40. Or even 35.

Writing in Editor & Publisher, John K. Hartman breaks down McPaper’s run into three stages.

The first decade was growth and massive disruption, as USA Today challenged many of the industry’s assumptions about how and what people wanted to read.

The second decade was prosperity, when USA Today became the most widely circulated newspaper in America and Gannett reaped the spoils of more than $1 billion in investment.

The third decade was decline, marked by competitive surges by The New York Times and Wall Street Journal, changing reader habits and all the economic pressures that have hit the industry. Hartman offers 30 ideas to rejuvenate the national daily, but his list looks a bit forced. The situation “has all the makings of a death spiral,” he admits.

We liked Alan Mutter’s analysis better. The Newsosaur recalls some of the innovations USA Today brought to the market beyond jump-less stories and “We’re Eating More Broccoli” infographics. Founder Al Neuharth astutely scoped out changes in the audience for newspapers before anyone else. He targeted the paper toward business travelers who were time-pressed, mostly male and equipped with expense accounts. Neuharth bet that airline deregulation, which had happened just four years earlier, would spur an explosion of air travel and a boom in the hospitality industry. Hotels are still the single largest distribution channel for USA Today.

Gannett was successful in attracting upscale ads from airlines that were competing on amenities at the time, Mutter notes. Not so much today. Travel has become a cutthroat business, and business travelers now make decisions based more upon TripAdvisor reviews and price-comparison engines than on which airline has the best food. Sports coverage, which was long a USA Today strong point, has been co-opted by ESPN.com and other online channels for the rabid fan. Even USA Today‘s once-prominent full-page weather map is now an  artifact, thanks to smart phone apps.

Mutter points to a more fundamental weakness in the business model: “Nearly two-thirds of its coast-to-coast circulation is built on free copies distributed by hotels and other businesses, meaning that barely more than a third of its readers actually think enough of the paper to pay for it.” Those who do pay have to fork over one dollar, which is far less than they pay for the Times or Journal. The fact that both those dailies are eating USA Today‘s lunch would indicate that price isn’t much of a factor for the dwindling ranks of newspaper buyers.

Neither columnist holds out much hope for USA Today‘s long-term survival, and we have to admit the situation doesn’t look good. This is ironic in light of the fact that Gannett anticipated many of the changes in reading habits that other newspapers grudgingly adopted. While newspaper publishers may have hated USA Today, their reluctant move toward shorter stories, more graphics and full-color production probably staved off the industry’s decline by a few years.

USA Today continues to resist the paywall trend, and its free website may be one of its few distinguishing features. However, the price of advertising is in long-term decline, and it’s hard to believe that free will be a virtue in a crowded market. Unfortunately, USA Today may have little choice. If more people are willing to pay $2.50 for a  copy of the Times or $2 for the Journal, then it’s hard to imagine that a paid website strategy will get much traction. USA Today arguably had more impact on American newspapers than any publication of the last 30 years. Sadly, it may be one of the earliest casualties.

Ebyline Challenge Seeks a “100% Solution”

A service that pairs freelancers with editors has teamed with Editor & Publisher to launch a $35,000 journalism contest called the Ebyline Challenge. The contest picks up on a post by Jay Rosen two years ago that asked readers to envision how they could cover 100% of a large topic using a combination of sources. This is basically an innovation contest. “First, come up with an idea for reporting on 100% of something….Fill out an entry form and tell us how you’d use freelancers to make your idea happen,” the contest page says. The 35 grand isn’t cash, but a one-year credit toward use of the Ebyline service.

We like the idea in principle, but the focus on freelancers is too narrow. If you’re going to cover something 100% these days, your available resources should include blogs, tweets, people on the spot with phone cameras and community publishers, among others. That isn’t in Ebyline’s best interests, of course, but the option would open up opportunities for innovation. Not all journalism carries a price tag anymore.

Journal Register Co., which has been the poster child for the “digital first” strategy that many newspapers are pursuing, declared bankruptcy today, just three years after emerging from a previous bankruptcy filing. This doesn’t mean the end of the road for the company, of course, but it does dramatize the difficulty of transitioning from a model based upon captive audience and economies of scale to one that accommodates constant audience churn and targeted advertising. We still like CEO John Paton’s vision for reinventing news.

Mathew Ingram has an excellent analysis on GigaOm, as usual. There’s not much we can add to it. As Ingram states, “Digital first is not a magic wand.” There’s still a massive amount of legacy baggage that needs to be discarded. We particularly like his characterization of paywalls as “just a line of sandbags against the rising tide.”

Ever heard of James Macpherson? If you’re a veteran journalist, you probably have, although you might know him better as “that asshole who fired his entire reporting staff and outsourced local coverage of Pasadena, Calif. to India.”

We got a note from Macpherson the other day pointing out that recent trends would indicate that he was a trailblazer, not a nut.

In spite of the clobbering in the media I took for the idea then — and in spite of the Journatic debacle now —  the truth remains that some form of editorial outsourcing IS coming to newsrooms near you, and probably soon…Newsroom outsourcing is inevitable. The idea is so powerful it should be explored and discussed, not simply rebuked.

Macpherson also pointed us to a couple of his own blog entries on the subject: “The Outsourcing of Hyperlocal Journalism Is Inevitable” and “And Now, A Penny for My Thoughts.” They’re both worth reading. As we pointed out recently, the price of journalism is being readjusted to a new equilibrium point, and ideas like outsourcing local city council coverage to writers in Manila aren’t nearly as far-fetched as they once seemed.

It’s a Business

A lot of debate about the future of journalism has been tinged with emotion, which is understandable given how many jobs have been lost. The harsh reality, though, is that the vast majority of journalism is practiced by profit-making organizations. These companies are struggling with seismic shifts that have changed their business model forever. Advertising costs are in long-term decline, reader switching costs are zero, barriers to competitive entry have vanished and mass media are being displaced by specialized media. Any organization that hopes to survive in such a market needs to do things differently.

The approach to outsourcing that Macpherson outlines in this post is rational and workable in many scenarios: Offshore whatever can be offshored and have the people on the scene focus on capturing the action. Keep expertise local and farm out the rest.

If you’ve ever worked in a newsroom, you know there’s a lot of work that doesn’t require people to leave the office. Copy editing is a desk job. So is obituary writing. Editors fill holes on print pages by rewriting wire copy. Sports editors rarely go into a locker room and city editors don’t cover school board meetings. They’ve done all that stuff and graduated to jobs where they supervise others.

Some of this stuff is easy to outsource, and a lot of it already has been dispatched to interns or specialty shops like Legacy.com. The tough part is deconstructing jobs where experience is an asset, like the sports editor. Those jobs should stay intact on these shores, although some of the routine work may be able to be done elsewhere.

Get Me Rewrite

Journalism has traditionally been a vertically integrated craft. The reporter who covers the city council meeting is also expected to write the story, even if that person can’t compose a coherent paragraph. We’ve all known people who were great fact-finders or interviewers but who couldn’t write. Rewrite editors were an early tool to compensate for that. Now technology is taking deconstruction to a new level.

Anyone with a smart phone and an Internet connection can now be a live streaming news source. People on the scene can embellish or correct a published account, even if they don’t work for the news organization. Aggregating, summarizing and commenting upon published reports is the essence of what most bloggers do. In many cases, being on the scene isn’t nearly as important as it used to be.

Outsourcing is not an all-or-nothing proposition, but a process of optimizing for value. Move routine work to the lowest-cost source and invest in stuff that makes a difference. Businesses have done this with manufacturing, payroll, facilities maintenance, information technology and the many other tasks for years.

But what about quality? That’s the most common objection to outsourcing in general, but we think markets are pretty good at figuring that out. Journalists aren’t the ultimate arbiters of quality; their readers are. If you believe that the public no longer has an interest in quality journalism, then outsourcing is a pretty depressing prospect. However, we don’t think the public is that stupid.

Macpherson is right: These ideas should be developed and not dismissed as lunacy simply because they break with tradition. If someone can put out a journal at lower cost that its audience values and that someone will pay to support, then the market will make it own decisions.

Jeff Jarvis nails it with this headline:  “Reporters: Why are you in Tampa?” And he goes it one better by running some numbers that estimate that media organizations will spend $30 million this week covering a Republican convention of which the outcome is already known. Then they’ll do the same thing next week for the Democrats.

Here’s what we’ll get for this investment:

• On-the-spot analysis of speeches that could be covered just as easily by watching them on television;
• Interviews with political junkie delegates who in no way typify the American voter;
• Journalists talking to each other;
• TV reports that are supposed to look more urgent because the reporter is standing in front of  a sign labeled “Wisconsin.”

All this is happening in an industry that’s in free fall.

• Digital advertising is expected to pass print advertising for the first time in 2012.
• More than 6,000 jobs have disappeared in the U.S. newspaper industry over the last 20 months.
• Credibility of major news organizations is at its lowest point since Pew Research started tracking it in 2002.

Yet what we’ll get over these two weeks is the same political pabulum we’ve gotten for decades, served up to an American public that’s sick of it all.

Political convention coverage epitomizes what’s wrong with mainstream media today. Conventions long ago ceased to have any news value. The last brokered convention was in 1952. Since then, the only purpose of the quadrennial party has been to deliver what Jarvis calls an infomercial. Everything is scripted for the greatest possible momentum going into the fall campaign, and the media plays right along.

Why? Well, as Tevye said: “Tradition!”  It’s always been done this way. Conventions aren’t about news. They’re a junket for senior reporters. They’re easy to cover because everyone who attends them is media-trained and has a scripted message. There’s what media needs today: stuff that’s easy.

How can you cover the reaction of voters back at home when all your best reporters are down in Tampa snarfing down shrimp and free booze? Why are the TV networks  interviewing a small number of delegates and ignoring  millions of online conversations between real voters? How can the media, which prides itself on independence, cooperate so willingly with the PR manipulators who script this stuff? How can it possibly spending so much money on something that produces no news?

Let’s ask different questions: What if The New York Times, Washington Post or NBC made a statement in 2016 and announced that it would skip the conventions and invest that money instead in an investigative unit or database journalist? What if the media stopped coming to the conventions entirely and left the coverage to Journatic? Do you think we would be any worse off? Do you think the economy would suffer? Do you think anyone outside of the media would even notice?

Won’t happen. That would be rocking the boat. And for heaven’s sake, why would anyone want to do that?

Update: Andrew Cohen writes about the unholy camaraderie between media and political parties in the Atlantic. Noting that Huffington Post, The Politico, CNN and Bloomberg spend lavishly on receptions for  delegates, he notes, “People are angry about politics and politicians. They are angry about the way the media cover politics and politicians. Can you blame them, in the face of [media-sponsored] spas and sports bars, in the face of the self-promotion, for perceiving some sort of unholy alliance between reporters and the people upon which they are supposed to be reporting?”

Apparently a Pulitzer Prize is no protection against the ravages of the marketplace. The Harrisburg (Pa.) Patriot-News, and the Syracuse Post-Standard will reduce print frequency to thrice weekly beginning in January. They follow the lead of their Advance Publications brethren in New Orleans and Alabama, which scaled back this spring. The news is particularly disappointing because the Patriot-News  won the 2012 Pulitzer Prize for local reporting for its coverage of the Penn State scandal. These are not small marketers. The two papers have a combined Sunday circulation of nearly a quarter million. They’ll keep publishing on Sunday. The other two days of the week haven’t been decided. Expect more members of the Advance family to follow.

Update: A tipster says he’s been told there will be a 50% staff reduction at the Post-Standard starting next week. “That’s 200 lost jobs in an already hard-hit community.”

We got a come-on from one of those content-farming services the other day, but instead of throwing it away in disgust, we decided to run the numbers instead.

The e-mail promised us the possibility of earning $80 per 400-600-word article! That’s right, that statement ended with an exclamation point. We’d normally be insulted at the prospect of being offered less than 20 cents a word, but when we took at look at the site we’d be writing for, we thought heck, one could actually make a living at this.

We can’t identify the site because our revenue from Adwords doesn’t permit the luxury of retained legal counsel, but there are plenty of services out there that provide low-cost, keyword-optimized articles for businesses that want to attract search engines. They all work pretty much the same.

The particular site we looked at is focused on a vertical B2B market. It publishes 12-15 articles a day from an impressive assortment of freelance writers. We’ve never heard of any of them, but most of the contributors write one or two articles per day for this site, and presumably also write for other sites supported by the content farm.

The stuff they write follows a predictable format: The writer reads three or four stories in an industry trade or business publications and summarizes what they say in a kind of a news roundup format. The more experienced writers may add a dose of their own opinion, but for the most part no one strays too far from quoting the industry pundits.

There is no original reporting to speak of. We scanned about a dozen articles and didn’t see any evidence of primary research beyond repackaged analysis from industry trades. In the new journalism, first-person sourcing is less important than linking to source material online.

Doing the Math

We figured a fast writer with a working knowledge of a vertical industry could pound out five or six such stories a day without breaking a sweat. Heck, we’ve sometimes posted 1,200 words to this site before 9 in the morning. So do the math: Five stories per day at $80 per story equals $400 a day. That’s $2,000 a week. That’s $100,000 a year. That’s a decent living.

What makes this possible is the near total lack of quality control. It doesn’t appear that anyone is reading the stuff these writers post. There were typos and formatting problems that would have been caught with even a minimum of editorial oversight, but the publisher doesn’t care. As long as the keywords are in the right place and the search engines are delivering, everything is fine.

What matters is speed. Frequently updated sites get more attention from search engines, and this particular site focuses on breaking news. The idea is to get something into the news stream while interest is high so you can get in on the page-view bubble. After a couple of days, most of the interest has waned, but the search engines are still paying attention to you because you post so frequently. Long-tail search typically delivers about one-third of the traffic to news sites.

We don’t mean to imply that the content on this site was junk. Quite the opposite: Some of the writers clearly follow the industry closely and chose their topics well. Considering that no one is editing them, the copy was impressively clean. For a business audience that is challenged to keep up with the news, you might even say the site is valuable.

These are the new economics of the working journalist: Pump out a large volume of keyword-laden stuff with minimal guidance or oversight. None of this work is ever going to win a Pulitzer, but it is enabling a few writers to actually sustain themselves by writing. And who knows, maybe they can do some serious reporting in their spare time, or perhaps someone at a name-brand publication will notice their work and offer them a job.

Either way, it’s a living.

Photo via Wikimedia Commons

Editor & Publisher caught up with humorist Dave Barry to talk about receiving the 2013 Ernie Pyle Lifetime Achievement Award from the National Society of Newspaper Columnists. Barry is funny as always in the Q&A, but he also provides some plain-talk insight on the troubles that afflict the industry that made him a star. We thought they were worth sharing.

 So what role did newspapers play in the decline of humor columns? 
Newspapers have had a consistent problem over the past 30 to 40 years that whenever they are offered two options, they always pick the one that is more boring and less desirable to readers.

Personally, I attribute the modern failure of newspapers to English majors. We let our business be run by English majors, but since the model was a foolproof way of making money and the only place for Sears to buy and print a full-page ad, they could do whatever they wanted. This created the notion that whatever they were doing had huge market demand, and when the Internet came along, we found out that wasn’t necessarily the case.

With the decline of print, do you think there are opportunities for aspiring humor writers out there to get a break like you did? 

I was lucky. When I started writing in the mid-1970s, newspapers were really flush. Baby boomers were subscribing in huge numbers, and they were my audience. I did meet with some resistance, because my columns were different and weird. I violated a lot of newspaper tenets. I lied a lot in my columns; I was willing to be completely absurd and didn’t worry that the end of my column didn’t have anything to do with the beginning.

My columns were different enough that readers felt they could relate to them with their own lives, and they liked them for that. Plus, back then newspapers could take a chance on someone like me. They were more fearless back in those days. The idea of someone canceling their subscription was kind of a joke. Now they’re terrified of doing anything that might offend readers and fall outside their marketing plan.

It doesn’t really matter, because I don’t know of any young, funny person who wants to get into the newspaper business anyway.

Maybe it’s the summer slowdown kicking in, but the news has been mostly bad this month.

Why must all media coverage of newspapers have a photo like this?

David Carr writes about a little-discussed liability that’s nearly as damaging to the newspaper industry as its mountain of debt: Pension obligations. Gannett pension fund is under-capitalized by $942 million, McClatchy’s by $383 million and The New York Times Co.’s by $522 million. Carr says the hedge funds that bought up newspapers at bargain prices over the last few years are running for the exits, but they can’t find anyone to take the properties off their hands. Pensions are one reason why. The only investor who’s shown confidence in the industry lately is Warren Buffett, but Carr notes that even he stuck Media General with the retirees when he bought a bunch of its titles.

Pension funds became an albatross around the necks of the steel and auto industries back in the 1980s. Faced with retiree obligations that were, in some cases, significantly larger than annual revenues, companies like U.S. Steel had not choice but to shaft the recipients. A lot of newspapers set up generous pension funds when times were good in the 70s and 80s, and now those workers are retiring. It’s a frightening replay of history, particularly if you’re nearing retirement age.

Carr’s piece is kind of a mid-year health check on the state of the industry, and there’s very little cheer about. He opens with accounts of some recent printed blunders that would have been unthinkable a few years ago. The situation in the print world is so bad that when the New Orleans Times-Picayune offered jobs to some of its editorial staff on the new three-day-a-week print edition, many said no, thanks. They included a Pulitzer Prize winner and one of the editors who anchored the paper’s Hurricane Katrina coverage.

The Thin Line Between Journalism and Typing

Carr reserves some of his most acerbic comments for Journatic, an editorial outsourcing firm part-owned by Tribune Co. that is suddenly getting a lot of scrutiny for practices that would make a professional journalist’s stomach turn.

Read Ryan Smith’s insider account on The Guardian for a look at how far the newspaper industry has fallen. Journatic lives under the radar (its sparse website is actually designed not to attract search engines), providing copy to client publishers that is mostly produced by a loose network of freelancers who work for pocket change. Many of its writers are in the Philippines, which means they speak decent English and work for less and a dollar an hour.

Most of them can’t write very well, though, and Smith recounts stories of barely rewritten press releases that crossed his editor’s desk ready to go into some of America’s finest newspapers. Press releases are Journatic’s bread and butter, along with obituaries from Legacy.com and real estate transaction listings. These are rewritten by its far-flung editorial staff and turned in to U.S. copy editors who make $10/hour. The practice that’s drawn the most criticism is Journatic’s practice of putting fake bylines on articles. The company says it adopted the tactic to protect employees, but that doesn’t sit well with its clients, who are now abandoning ship in the wake of negative media coverage. Hundreds of bogus bylines have already shown up in the Houston Chronicle, Chicago Tribune, Chicago Sun-Times and San Francisco Chronicle, writes Poynter’s Jeff Sonderman.

Oops.

Journatic produces original content, too. It farms out local stories to U.S. freelancers who report by phone from 1,000 miles away while pretending to be at a desk in the newsroom across town. Reporters need to work quickly. Smith says he was offered $24 for an 800-1,000-word story, $12 for 500 words and $10 for a Q&A. Most of the work went unedited into major newspapers as if reported by a staff journalist.

I’ve copyedited or written news stories for a handful of major US newspapers over the past 18 months – the Houston Chronicle in Texas, San Francisco Chronicle in California and Newsday in Long Island, New York and others – yet it’s doubtful that any of the editors or senior executives for those news organizations could pick me out of a police line-up. In fact, it’s unlikely they could tell you a single personal detail about me or the other journalists behind the bylines of countless stories that appear in their print editions or on their websites, as provided by my employer.

A number of big dailies have quit using Journatic in the wake of recent unflattering coverage, but you can bet this model is far from dead. “Journatic’s approach — and the change it represents — is not going away,” writes Craig Silverman on Poynter.org. That’s because the economics of the news industry are in such dire straits. Whatever work can go offshore will go offshore as newspapers struggle to keep their print properties viable. With revenues spiraling down at 8% to 10% per year, quality will only get worse.

But it’s not just print. As the Times’ Carr points out, no one has yet cracked the code of making online local news profitable. In fact, Journatic’s stronghold is local media, which simply can’t afford to hire full-time reporters any more. So they lay off staff and farm out coverage of the local football team to a stringer. In Manila. (Hat tip to David Strom)

Tablet Salvation

The good news is that tablets will save the day, right? Possibly, but don’t count your winnings just yet. A new study by the Reynolds Journalism Institute and the University of Missouri finds that lots of people use their tablets to keep up with the news. In fact, news-reading is the fourth most popular activity by tablet users, behind communication, entertainment and Web search.  Users’ preferred source of information is news organization websites by a nearly 8:1 margin over social media. Interestingly, 53% of the 1,015 survey respondents said news-on-tablet was a better reading experience than ink-on-dead-trees, compared to just 18% who favor printed media.

The Public Relations Society of America suggests that tablets could revitalize the evening paper, since so much iPadding takes place after 5. But they’ll have to convince Rupert Murdoch of that. The media mogul has reportedly put The Daily on watch. The iPad-only zine is losing $30 million a year, The Politico reports, and its viability will be reassessed after the Nov. 6 election. This despite the fact that The Daily broke the story of Pink Slime, the ground beef additive that triggered a hysterical reaction in the U.S. earlier this year before the USDA stepped in and said that not only is the ingredient safe, but we’ve been eating it for a decade without knowing.

BTW, the most interesting item in the Politico story may be the comment by Martha Jo Peters, whose Facebook profile simply says, “Intend to live alone the rest of my life.” Evidently Murdoch is at least partly responsible. Sad.

Twitter’s News Ambitions

Mathew Ingram thinks Twitter wants to be a media company, and that means its role in the media ecosystem will get more complex. Twitter faces the same challenges that Google has been struggling with for several years: Its basic value is as a filter and organizer that quickly sends people elsewhere on the Web, but it’s hard to make money when your visitors are always leaving so quickly. In essence, the  publishing model that is failing so badly in the traditional media is the model that the biggest new-media startups are seeking.

Twitter appears to see its future as being some kind of newswire. In an interview with the Los Angeles Times, CEO Dick Costelo said, “Twitter is heading in a direction where its 140-character messages are not so much the main attraction but rather the caption to other forms of content.” Remember that quote, because it’s really important. It means that in the future Twitter wants to host more content instead of sending people away. But where’s the content going to come from? A lot of it will be from media companies, which have come to value Twitter as a traffic-driver but who may now have to re-evaluate that relationship. Like Google, Twitter is both their best friend and their worst enemy.

If you’ve noticed there are a lot more dead third-party Twitter sites lately, there’s a reason: Twitter is locking down its famously open set of application interfaces and trying to control more of the user experience. Ingram notes that Twitter has had great success with its mobile ads and promoted tweets, and it would like users to stay a little longer on its site. The acquisition of Tweetdeck, as well as several recent improvements to the Twitter.com user experience, are part of that campaign to capture more of the visitor’s time.

Miscellany

Another daily newspaper has joined the ranks of newspapers that are not-so-daily. The Anniston (Ala.) Star will cut its Monday edition beginning in the fourth quarter. Poynter’s Julie Moos has more than you probably want to know here.

Has your local newspaper trimmed frequency from seven days to something else? We’ve had a few inquiries recently from people looking for a list of such journals, but we’ve  never seen one. If you have, please provide a link in the comments, or simply tell us if your local paper has been affected. This will start a list of some kind.

A little good news: The New York Times is more than making up for declining advertising with growth in paid subscriptions. Ad revenue was down 8.1% in the most recent quarter, but circulation revenue was up 9.7%, thanks largely to the success of a new paywall program. Forbes reports that the International Herald Tribune and Boston Globe are also seeing promising results from their early paid digital subscription initiatives.

Stuff we’ve bookmarked recently.

Warren Buffett Buying Newspapers by the Bushel

Warren Buffett
(New York Times photo)

The world’s ultimate value investor – Warren Buffett – has apparently decided that there’s untapped value in newspapers. His Berkshire Hathaway has just purchased 63 of them along with a 3% stake in Lee Enterprises, and Buffett says he plans to buy more. Newspaper lovers should applaud Buffett’s interest. A self-described newspaper “addict,” he believes in an intensely local editorial focus and a sustainable business model. His interest in the newspaper industry could be a boost for paywalls. “The original instinct of newspapers was to offer free in digital form what they were charging for in print. This is an unsustainable model and certain of our papers are already making progress in moving to something that makes more sense,” he wrote in a letter to publishers.

The New York Times traveled to Buffalo to check out The Buffalo News, which Buffett has owned since 1977. It found a profitable operation that has scaled down intelligently over the years through buyouts rather than layoffs. Buffett has little personal involvement in daily operations, but his philosophy of investing in local coverage and skimping on overhead is evident everywhere. Media Audit says The Buffalo News has the second highest audience penetration of any newspaper in the country. Part of this could be because the Rust Belt population of the area is older than the typical demographic, but it’s still remarkable that more than 70% of Buffalo households have read the paper within the last month.

If anyone can figure out how to make a newspaper profitable, it’s Warren Buffett. He built an estimated net worth of $44 billion by buying distressed businesses at the bottom. His interest in this industry would indicate that there are better days ahead.

US Newspaper Ad Revenue Continues Sickening Plunge; Online Growth All But Halted

First-quarter 2012 total expenditures totaled $5.18 billion, down 6.86% from $5.56 billion a year earlier. Online revenues grew by just 1% to $816 million, which was the smallest for any quarter since 2009 and not nearly enough to offset the 8.2% drop in print revenues, to $4.36 billion. The Newspaper Association of America previously revealed that print revenues (in absolute dollars) fell by half between 2005 and 2011. And there is no end in sight.

Oregon Publisher Puts Happy Face on Frequency Cut

“There are a lot of new things to like about today’s Observer,” writes Kari Borgen, publisher of the Observer of Union and Wallowa counties in Oregon. Borgen goes on to celebrate the Observer‘s new design, added features and bonus puzzles, among other goodies. What she fails to dwell upon is the fact that the issue that “seems bigger and feels heavier to you today” is that way because frequency has been cut from five days to three. The Observer eliminated Tuesday and Thursday editions and now publishes only on Monday, Wednesday and Friday. No one has yet gotten around to updating the About page with this information.

Tribune Co. Edges Closer to Bankruptcy Exit

Details of the legal wrangling between stakeholders, negotiations with the FCC and the likelihood of judicial approval of a restructuring plan will leave your eyes crossed, but the bottom line is that the company’s three-year stay in Hotel Chapter 11 may finally be nearing a conclusion. There’s still regulatory and legal wrangling to be resolved, including a petition to transfer Tribune Co.’s broadcast licenses to a group of banks and hedge funds that will own the company. There’s also a challenge from a group of junior bondholders who are challenging the restructuring plan and who might sue 35,000 former Tribune Co. shareholders to recover more than $2 billion in claims.

Whatever happens, the likely outcome is that Tribune Co. will be carved up and sold off piecemeal by the banks and hedge funds that assume ownership. The real value of the company is in its portfolio of 23 TV stations and some other equity investments. The newspaper business is barely a rounding error on the balance sheet. The story in the Tribune notes, “Before the Zell deal, Tribune Co. entertained offers topping $2 billion for the Los Angeles Times alone, but today, according to a recent valuation analysis by Tribune adviser Lazard Freres & Co. the entire publishing group of eight newspapers, including the Times and Tribune, is worth about $623 million.”

By the way, the Chicago Tribune is considering a novel approach to paywalls. Instead of charging for access beyond a certain number of articles per month, the paper would charge for bonus content, as ESPN does. The tactic has worked well for sports addicts, but observers question whether it can succeed in local news. It hasn’t done so anywhere yet.

Blowing Up the Article

The always-provocative Mathew Ingram writes about why we need to reconsider the concept of the article in publishing. This traditional approach to packaging information is rooted in the limitations of printed media where hyperlinking was impossible. Now, however, we have the ability to deliver only what’s new and link to the rest.  Jeff Jarvis has been beating this drum for some time and in a post entitled “News articles as assets and paths,” he suggests that articles will devolve into component parts that can be mixed and matched according to need.  Why reinvent the wheel with hundreds of words of background every time we update a story? Simply provide the new information and link to the rest. Jarvis has even suggested that new kinds of media organizations could emerge that specialize in different kinds of assets, such as news, multimedia or background. An example of the latter is Wikipedia, which is a great source of background information for many timely events. Reddit is building this model with its Ask Me Anything forum, which has become a coveted destination for book authors. Basically, Reddit is becoming a specialist in Q&A assets.

Media Consolidation: The Infographic

Everyone is doing infographics these days, and we’ve never seen a bandwagon we couldn’t hop on. This one was actually created by Frugal Dad last November, but it popped up on Business Insider last week. Some of the information is out of date. For example, GE no longer owns NBC, so the sixth company is now Comcast. And Time Warner got rid of AOL. But the main point still holds: Media consolidation has reached a pinnacle, with only six corporations controlling 90% of media in America. And 250 million bloggers and Twitter users controlling the rest.

Source: Frugal dad

Tom Foremski could be excused for trashing the business model Henry Blodget has used to get Business Insider over the profitability hump, but he chooses to trash journalism traditionalists who criticize Blodget instead.

The trigger was this profile of Business Insider deputy editor Joe Wiesenthal in The New York Times. Wiesenthal has an obsessive personality. He rises at 4 a.m. and routinely works till 9 p.m. He files 15 news items in an average day and sends 150 tweets. His first tweet each morning is “What did I miss?” He is the ultimate new media journalist.

Have a look at Business Insider. It’s nothing like a traditional financial newspaper. It’s got headlines like “14 Common Ways People Cheat At Golf” and “Everything You Ever Wanted To Know About Russian Mail Order Brides.” The home page is about 20 screens long and adorned with cheesecake photos of models in bikinis next to headlines about the Greek financial crisis. It’s Huffington Post meets Weekly World News. It’s offensive to everything traditional journalists believe a news outlet should stand for. And it’s turning a profit.

Broken Rules

A lot of journalists hate operations like Business Insider because it violates so many rules. It reports information that hasn’t been verified, mixes reportage with editorializing and blatantly caters to its readers’ prurient interests. Dan Reimold, a journalism professor at the University of Tampa, posted a critique of Wiesenthal on the Associated Collegiate Press blog, arguing that Wiesenthal’s approach to journalism – and his lifestyle – are something no aspiring reporting should emulate. “It doesn’t seem like Weisenthal has conquered the news cycle.  He is a pathetic slave to it,” Reimold wrote.

Reimold’s post drew a pointed response from Henry Blodget, the disgraced former equities analyst who was banned from the securities industry after the dot come bubble burst and who has reinvented himself as a publisher. Blodget argues that Reimold is addicted to an old model of long-form journalism that isn’t relevant in the manic, always-on Web 2.0 world. “The skills required to do what a great real-time digital journalist does are different than those required to do what a great magazine writer does,” Bodget writes. “Doing what Joe Weisenthal does is extraordinarily difficult. That’s why there are so few Joe Weisenthals.”

Tom Foremski is a traditional reporter who understands and respects the new  journalism, and he’s got the street cred to command respect. A veteran of the newspaper industry, Foremski most recently worked at the Financial Times, but in 2004 he quit to become a full-time blogger. His story at Silicon Valley Watcher is good reading.

Foremski backs Henry Blodget on this debate. “Criticism of Business Insider’s largely lightweight journalism by journalism professors is valid only when it’s debated within the context of the economic reality of the news business,” he writes. For good measure, he adds “My chief complaint about journalism professors is how distant they are from a real newsroom.”

As we’ve noted before the pay structure of today’s online news industry is dramatically lower than that of the dying print industry. Demand Media pays freelancers as little as a nickel a word, and Huffington Post gets most of its content for free. Staffers at The Politico typically start their work day before dawn and may file thousands of words per day.

This sucks, but it’s part of the evolution of a more sustainable model. Foremski doesn’t endorse the way Business Insider treats its employees, but he clearly thinks that cursing the onrushing tide is a waste of breath. “Journalism professors should be railing against the failure of the industry to establish a business model that works, and rallying students to learn new techniques in producing quality journalism in quantity,” he writes.

We agree. Remember that the newspaper world of the 1930s and 1940s was no model of integrity. Publishers routinely invented news to support political agendas and the concept of seeking both sides of the story was a novelty. Reporters also didn’t make much money.

That business evolved through trial, error and consolidation, and we expect much the same process to occur in the new online world. Whether that results in a 40-hour work week and six-figure salaries is still to be determined (although we doubt it), but the challenge for people who are committed to journalism today is to find a way to preserve it within a new business climate. Tom Foremski is an important voice in that crusade.

Incidentally, Business Insider claims that Reimold has accepted an offer to come to New York for a day and do Joe Weisenthal’s job. It apparently hasn’t talked to him directly or confirmed anything but is basing its report on an offer that Reimold posted on his blog. How very new media of it.

The New Orleans Times-Picayune, a fixture in the Big Easy since 1837, will slash its staff and production schedule, going from 7 to 3 days a week beginning this fall. The body count isn’t known yet, but estimates are that at least a third of the staff will be fired. Those who stay are expected to take pay cuts.
The Times-Picayune, which is owned by Newhouse Newspapers, is apparently taking a page from the Ann Arbor News, another Newhouse paper that cut its frequency to twice-weekly more than three years ago. The Detroit Media Partnership was the first to eliminate daily frequency in late 2008. Many smaller papers have since quietly cut money-losing Monday, Tuesday and Saturday editions.
The strategy is aimed at preserving the newspaper brand – and a viable business – by eliminating unprofitable editions. The newspaper will continue to be published on Wednesdays, Fridays and Sundays, which are typically the three most profitable days of the week.
The New York Times‘ David Carr was the first to break the story in an item published just before midnight last night. Ricky Mathews, who will become president of the newly created NOLA Media Group, confirmed the news in a statement this morning that contained the usual sugar-coating. “NOLA Media Group will significantly increase its online news-gathering efforts 24 hours a day, seven days a week, while offering enhanced printed newspapers on a schedule of three days a week,” he said. The only enhancements specified were to food and dining coverage.
All the spin-doctoring in the world doesn’t change the fact that New Orleans will soon become the second major U.S. city without a daily newspaper.
Publishers are struggling with strategies to preserve their brands while transitioning to a digital-mostly strategy, which typically requires between one-third and one-quarter the staff of a printed newspaper. U.S. newspaper revenues have plummeted to levels not seen since the Truman administration on an inflation-adjusted basis, and there’s no indication the trend is likely to turn around. The thinking in New Orleans is that frequency cutbacks can keep the brand in front of readers while enabling the cost reductions to take place and still preserving enough margin to invest in new digital products.
The Times-Picayune won two Pulitzer prizes in 1997 and two more in 2006 for its coverage of Hurricane Katrina. Former staff members include William Faulkner and O. Henry.

Update: As noted in the comments, The Birmingham News, Mobile Press-Register and Huntsville Times will also reduce frequency to three days a week. They’ll become part of a “new digitally focused media company” called the Alabama Media Group. Read more on Al.com.

Marketplace Radio’s Kai Ryssdal interviews Chris Rose, who worked at the paper for 25 years and helped it win two Pulitzers for its coverage of Hurricane Katrina.

We were interviewed on Marketplace as part of its coverage of this story.
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