Amazon.com is finally addressing complaints about licensing fees for its Kindle reader. Starting next month, the online retailing giant will give newspapers 70% of revenue from digital versions of their publications sold in Amazon’s Kindle Store. That’s what Apple and Google give developers for their iPhone, iPad and Android devices, so Amazon is merely playing catch-up.

Amazon also introduced Kindle Publishing for Periodicals, a program that’s intended “to speed up the process of producing a version of the newspaper for the many platforms where Kindle software can be downloaded,” according to CNN

Amazon has been criticized for being greedy in the royalties it extracts from news publishing clients. The change in royalty payments brings it in line with industry standards, and the new publishing platform is said to make it relatively painless for clients to get their content on Kindle-compatible devices, including the iPhone, iPad and Android. The move also appears to be aimed at the scarcity of iPhone-savvy coders, which is somewhat limiting the growth of that platform. ” Apple has sold more than 125 million gadgets — iPhones, iPods and the iPad — that run its mobile operating system. But finding developers capable of coding software for the system can be difficult and expensive,” CNN said.

Take Two Tablets and Call Me…

How big is the tablet market going to be? Really, really big, says Gartner, which sees nearly half a billion tablets selling in 2013 alone. The sudden explosion of this market seems curious in light of the fact that tablet – or “slate” – computers have been around for more than a decade. Gartner casts some interesting light on this phenomenon.

Early table computers were mainly Windows machines, meaning that they differed from PCs only in form.  Gartner points out that, in contrast, the usage model of the new breed of tablets “is closer to what consumers do with a smartphone…It is about running applications, playing games, watching video content, reading books and magazines…If you can do all of this without having to take five minutes to boot up, without having to look for a power outlet after a couple of hours… and with a user interface that allows you to easily get to what you need, why would you not buy a media tablet?” Makes sense.

We were at the Web 2.0 Summit this week, which ordinarily would have been lousy with laptop computers. However, we estimate that about one third of the attendees were toting iPads. Part of this trend is Silicon Valley chic, no doubt, but there’s no question that one appeal of the iPad is that it takes about 10 seconds to boot and the battery doesn’t die after 90 minutes. We found ourselves staring lovingly at the iPads being hoisted by others in our row as our laptop battery drained to zero.

Early tablet-makers obsessed over features like handwriting recognition and supporting an 800 X 600 screen. Apple chose instead to reinvent the experience around user need. Gartner sees the cost of tablets quickly dropping to under $300 as competition increases. Meanwhile, publishers are being careful not to screw up this market opportunity like they did the Web.

WaPo Gets Hyperlocal

The Washington Post is floating ideas about its next foray into online news and it looks like it’s going hyperlocal with a vengeance. TBD, itself a recent D.C.-area startup, reads the tea leaves from a recent Post survey and deduces that the newspaper is planning a major mobile thrust with a social networking flavor. TBD also quotes an anonymous source saying the plans include “this new crop of sites would be even more hyperlocal than AOL’s Patch.com sites that are now spreading around the region. The mission of the Patch sites is to dig deep on municipal news, including school board meetings, high school sports, trash collection and the like.

The new Post initiative, says a source, would “carve things up even more micro” than the Patch sites, as in subdivision by subdivision. It’s unclear how the Post would fund such an initiative or find the volunteer citizen sources to do the reporting, but it’s breaking with the pack in making such a strong commitment to local coverage. Few publishers have the cash – or the cajones – to disrupt their traditional model to that degree.

Speaking of the Post, it just released a new iPad app that aggregates “social media conversations, videos, photos and user engagement through Twitter and Facebook about the top three to five issues of the day,” according to a press release picked up by Editor & Publisher. It’s free here for now, $3.99/mo. beginning in February.

Miscellany

US News & World Report, the former newsweekly that has been monthly for the last couple of years, will stop publishing its monthly magazine in 2011. The magazine, which is famous for its annual rankings of the best colleges, hospitals, personal finance and other businesses, will continue to publish the rankings in print along with four special topic issues. Everything else will go online.

US News has long been the weakest competitor in a three-horse race dominated by Time with Newsweek a distant second. The whole newsweekly sector has been devastated by online competition, forcing the Washington Post Co. to sell Newsweek this summer. Its circulation has plunged more than 25% in the last year.

The San Diego Union-Tribune is turning the tables on the traditional model of selling a printed newspaper and giving away electrons for free. The struggling daily, which was bought by private investment firm Platinum Equity last year, is offering readers a free copy of the  print edition when they use their mobile phones to check in on Foursquare, Gowalla or Facebook. All a checked-in member has to do is show a mobile device to workers at kiosks around the city. We’re sure the U-T’s newsdealers are just thrilled about this idea.

The Oregonian just got a $50,000 grant from the Knight Foundation via the American University’s J-Lab, and it’s going to spend the money on hyperlocal journalism. Read Editor Peter Bhatia’s passionate and persuasive argument for the need to adopt a “big tent” strategy and partner with localized news outlets of all shapes and sizes in order to “offer a level of local and neighborhood detail our staff…cannot get to.” It’s nice to see a newspaper editor embracing amateur journalism instead of dismissing it. “In the digital media world there really aren’t any limits on who can gather news and distribute it. Anyone with a laptop can create journalism,” he writes. The usual assortment of nut-nut commentators weighs in with their spew about how Bhatia is ruining the newspaper. He responds with admirable restraint.

Gannett Blog estimates that USA Today has five reporters covering Congress and 27 covering entertainment. We have no idea if those numbers are true, but if they are, we are going back to bed and putting a pillow over our head.

Amazon.com is finally addressing complaints about licensing fees for its Kindle reader. Starting next month, the online retailing giant will give newspapers 70% of revenue from digital versions of their publications sold in Amazon’s Kindle Store. That’s what Apple and Google give developers for their iPhone, iPad and Android devices, so Amazon is merely playing catch-up.
Amazon also introduced Kindle Publishing for Periodicals, a program that’s intended “to speed up the process of producing a version of the newspaper for the many platforms where Kindle software can be downloaded,” according to CNN
Amazon has been criticized for being greedy in the royalties it extracts from news publishing clients. The change in royalty payments brings it in line with industry standards, and the new publishing platform is said to make it relatively painless for clients to get their content on Kindle-compatible devices, including the iPhone, iPad and Android. The move also appears to be aimed at the scarcity of iPhone-savvy coders, which is somewhat limiting the growth of that platform. ” Apple has sold more than 125 million gadgets — iPhones, iPods and the iPad — that run its mobile operating system. But finding developers capable of coding software for the system can be difficult and expensive,” CNN said.

Take Two Tablets and Call Me…

How big is the tablet market going to be? Really, really big, says Gartner, which sees nearly half a billion tablets selling in 2013 alone. The sudden explosion of this market seems curious in light of the fact that tablet – or “slate” – computers have been around for more than a decade. Gartner casts some interesting light on this phenomenon.

Early table computers were mainly Windows machines, meaning that they differed from PCs only in form.  Gartner points out that, in contrast, the usage model of the new breed of tablets “is closer to what consumers do with a smartphone…It is about running applications, playing games, watching video content, reading books and magazines…If you can do all of this without having to take five minutes to boot up, without having to look for a power outlet after a couple of hours… and with a user interface that allows you to easily get to what you need, why would you not buy a media tablet?” Makes sense.
We were at the Web 2.0 Summit this week, which ordinarily would have been lousy with laptop computers. However, we estimate that about one third of the attendees were toting iPads. Part of this trend is Silicon Valley chic, no doubt, but there’s no question that one appeal of the iPad is that it takes about 10 seconds to boot and the battery doesn’t die after 90 minutes. We found ourselves staring lovingly at the iPads being hoisted by others in our row as our laptop battery drained to zero.
Early tablet-makers obsessed over features like handwriting recognition and supporting an 800 X 600 screen. Apple chose instead to reinvent the experience around user need. Gartner sees the cost of tablets quickly dropping to under $300 as competition increases. Meanwhile, publishers are being careful not to screw up this market opportunity like they did the Web.

WaPo Gets Hyperlocal

The Washington Post is floating ideas about its next foray into online news and it looks like it’s going hyperlocal with a vengeance. TBD, itself a recent D.C.-area startup, reads the tea leaves from a recent Post survey and deduces that the newspaper is planning a major mobile thrust with a social networking flavor. TBD also quotes an anonymous source saying the plans include “this new crop of sites would be even more hyperlocal than AOL’s Patch.com sites that are now spreading around the region. The mission of the Patch sites is to dig deep on municipal news, including school board meetings, high school sports, trash collection and the like.
The new Post initiative, says a source, would “carve things up even more micro” than the Patch sites, as in subdivision by subdivision. It’s unclear how the Post would fund such an initiative or find the volunteer citizen sources to do the reporting, but it’s breaking with the pack in making such a strong commitment to local coverage. Few publishers have the cash – or the cajones – to disrupt their traditional model to that degree.
Speaking of the Post, it just released a new iPad app that aggregates “social media conversations, videos, photos and user engagement through Twitter and Facebook about the top three to five issues of the day,” according to a press release picked up by Editor & Publisher. It’s free here for now, $3.99/mo. beginning in February.

Miscellany

US News & World Report, the former newsweekly that has been monthly for the last couple of years, will stop publishing its monthly magazine in 2011. The magazine, which is famous for its annual rankings of the best colleges, hospitals, personal finance and other businesses, will continue to publish the rankings in print along with four special topic issues. Everything else will go online.
US News has long been the weakest competitor in a three-horse race dominated by Time with Newsweek a distant second. The whole newsweekly sector has been devastated by online competition, forcing the Washington Post Co. to sell Newsweek this summer. Its circulation has plunged more than 25% in the last year.

The San Diego Union-Tribune is turning the tables on the traditional model of selling a printed newspaper and giving away electrons for free. The struggling daily, which was bought by private investment firm Platinum Equity last year, is offering readers a free copy of the  print edition when they use their mobile phones to check in on Foursquare, Gowalla or Facebook. All a checked-in member has to do is show a mobile device to workers at kiosks around the city. We’re sure the U-T’s newsdealers are just thrilled about this idea.

The Oregonian just got a $50,000 grant from the Knight Foundation via the American University’s J-Lab, and it’s going to spend the money on hyperlocal journalism. Read Editor Peter Bhatia’s passionate and persuasive argument for the need to adopt a “big tent” strategy and partner with localized news outlets of all shapes and sizes in order to “offer a level of local and neighborhood detail our staff…cannot get to.” It’s nice to see a newspaper editor embracing amateur journalism instead of dismissing it. “In the digital media world there really aren’t any limits on who can gather news and distribute it. Anyone with a laptop can create journalism,” he writes. The usual assortment of nut-nut commentators weighs in with their spew about how Bhatia is ruining the newspaper. He responds with admirable restraint.

Gannett Blog estimates that USA Today has five reporters covering Congress and 27 covering entertainment. We have no idea if those numbers are true, but if they are, we are going back to bed and putting a pillow over our head.

A couple of weeks ago, we profiled Sacramento Press, a bootstrapped startup that appears to be doing a lot of things right, including adopting a diversified revenue model and partnering with other small publishers to share in advertising contracts. Well, they’re moving fact. Ben Ilfeld, the 29-year-old founder of Sacramento Press, sent us this announcement yesterday. He’s hoping to expand and duplicate the Sacramento business model in other towns throughout California. Tomorrow, the world! Here’s to the renamed Macer Media’s success.

The following is an edited press release:

Looking to help communities elsewhere build successful new local online media models as traditional media struggle to survive, the founders of The Sacramento Press have chosen a new corporate identity – Macer Media LLC – to underscore their philosophy to keep their operations lean, even as their business continues to develop new sources of revenue and grow at a healthy pace.

Macer Media will serve as a corporate umbrella over several operating entities, including The Sacramento Press, Sacramento Local Online Advertising Network (SLOAN), The Bay Area Publisher Partnership (BAPP) and DealTicket, an online local daily deal site.

Macer Media aims to assist 21^st Century publishers in other markets in understanding and obtaining the innovative blends of news gathering, advertising, social media and technology needed to succeed at seeding their own “hyper local” new media outlets.

“We want to run a lean company in the spirit of these local and hyper-local champions and be a company that not only has a stake in the hyper-local fight in the form of The Sacramento Press, but also helps out others in our space by providing the tools to build healthy local media ecosystems,” said co-founder Geoff Samek.

The Macer Media team is focusing initially on creating trusting relationships with local publishers throughout California to test the sharing of news, as may be appropriate for their readers, and as a means for local advertisers to expand their reach.

The Macer Media team encourages publishers to develop their own distinctive blends of news gathering, advertising, social media and technology infrastructure rather than adopting a “cookie cutter” approach to serving local audiences.

“We learned fairly quickly that people respected what we’re doing with The Sacramento Press in terms of our mix of technology, advertising and news gathering,” Ilfeld said.  “We’ve demonstrated an ability to innovate with technology and then leverage our strengths in technology and marketing to start SLOAN, our local ad network.  Those are hallmarks of what we do.”

We can’t remember the last time we went two weeks without updating the Death Watch, but a crush of work (though not so much money) has overwhelmed us recently. Plus we saw the new Harris Poll that found that over half of online adults now believe traditional media as we know it will no longer exist in 10 years, causing us to wonder if there’s really any point to “chronicling the decline” any more when the majority now agree  on the end point. But we forge ahead for SEO purposes, if nothing else. Here are some stories we’ve bookmarked lately.

Nielsen: 362K Paying for London Times

How are the early Murdoch paywall experiments in the UK faring? That involves unraveling some complex formulae about the value of free versus paid circulation and the opportunity cost of a paid subscriber. However, for now we are calling the early figures from Nielsen encouraging. The media monitoring service recently estimated that some 362,000 people have been accessing subscription content on the Times of London’s website each month since a paywall went up in June. The trade-off: unique monthly visitor traffic is down about 44% from 3.1 million to 1.78 million.  A separate analysis by Hitwise concluded that there had been a “large reduction” in visits to the Times’ website since the paywall was erected, resulting in a drop in online market share of nearly 60%.

So does this mean the Times’ paywall is a good or a bad idea? Here’s one way to look at it: The Times charges £1 per day or £2 per week for online access, with print subscribers getting a free ride. The back of our envelope says that if the Times can get half of those 362,000 monthly visitors to pay for one week’s worth of access each month, then it will have traded 1.3 million visitors for £362,000, or about 25 pence per visitor. The question then is whether those lost visitors can be monetized to the tune of 25p.

That actually should be a fairly easy calculation. If the Times looks at its online advertising revenue for the prior year, for example, and compares it to average unique monthly visitor volume, it can calculate the value of a free visitor pretty quickly. If that value is less than £.25, then the paywall is working, at least for now.

It isn’t that simple, of course. Those 362,000 monthly visitors aren’t necessarily paying the full price for Times content. Some are using free or heavily discounted promotions account or are print subscribers when get the online product bundled. However, they may also be more valuable that afree visitors. If advertisers are willing to pay more to reach paying customers on the theory that they’re better prospects, then those 362,000 visitors could be worth more than two bits apiece.

There are also intangibles, like the lower cost of operating a computing infrastructure to serve a smaller visitor base. However, we would suggest that the quick and dirty calculations aren’t all that complex, and if other Murdoch titles forge ahead with similar strategies, then the paywall is probably working.

A Case for Editorial Accountability

“In reality, publishers and CEOs have little understanding about what their editors are doing,” writes Neil Heyside (left) of New York-based CRG Partners in a provocative piece on MediaShift about the cost of content. Heyside shares some anonymized cost figures from client newspapers in the US and UK showing that the ways in which publishers allocate budget for different kinds of content varies wildly.

He makes the argument that publishers can reduce the amount of staff-generated content by increasing contributions from free (aka citizen) sources and making more use of “reworked” or rewritten material like press releases. He also suggests that publishers can make use of pooled or wire service material for topics that have little local relevance but that are important to carry anyway, such as international news and movie reviews.

“One paper printed 8% of its material from free content,” Heyside writes. “If that number moved up to 20% …a reduction of the use of 16% of staff-produced material led to a savings of 28% in staffing costs.” Sounds easy, but as anyone who’s worked with a substantial amount of contributed free content will tell you, the time required to massage it into something worth publishing can nearly equal the cost of paying for good material in the first place. Commenter Scott Bryant makes this case with some passion. Both Heyside and Bryant are right. Publishers should scrutinize the process and costs of creating content more carefully and editors should be more accountable for what they spend. However, quality is an intangible that defies rigid classification. As Sam Zell and his team found out at Tribune Co. a couple of years ago, boiling editorial content down to column inches, source counts or other rigid metrics is a recipe for trouble.

AP: Newspapers Are Now Loss Leaders

For the foreseeable future, publishers don’t seem to be funneling their investment dollars into wire services. Associated Press CEO and President Tom Curley (right) tells Poynter’s Rick Edmonds that newspapers now make up only 20% of the AP’s revenue and that figure is expected to continue to decline by 4% to 5% a year for the foreseeable future. In fact, “The AP loses money on services to newspapers and effectively subsidizes those offerings with more profitable lines of business,” such as photo wires and corporate business news, Edmonds writes.

The silver lining for the AP is that the drop appears to be a consequence of the industry’s overall decline rather than the contentious battles that erupted between the AP and its member newspapers two years ago. Curley says that unpleasantness has largely been put to rest as a result of adjustments to AP’s licensing fees and a lot of face-to-face meetings.

There is one battle still ongoing, however: with CNN. The AP claims that the broadcast giant is effectively using wire service material without paying for it by picking up (and attributing) stories moments after they hit the websites of AP subscribers. Here’s another area in which copyright law has failed to keep up with the velocity of digital information. As long as CNN summarizes and attributes information, it isn’t technically doing anything illegal, but the AP also has a defensible case for arguing that those actions are unfair to it and other members.

Miscellany

Could Starbucks soon compete with the newspaper publishers whose products it places next to the cash registers at its ubiquitous coffee shops? Yes, but for now it’s taking pains not to call its new in-store information service a “news” network, even though it sure looks like one. Instead, the Starbucks Digital Network is being positioned as a means for the retailer to gather more intelligence about what interests its customers in order to deliver to them better…um…latte? Sounds like a bit of a stretch to us. More likely, Starbucks is testing ways it can use localized and even personalized news as a way to improve customer affinity and maybe even sell advertising.

We proposed more than two years ago that Starbucks could become a major force in the US media market (see slide 28 in embedded presentation below) if it chose to pursue the opportunity. Our scheme was to provide printed, personalized mini-newspapers optimized for reading by commuters. Since we floated that idea, though, the iPad happened, and it now makes more sense to deliver news digitally to a tablet-toting public. However the plan works out, we think publishers should look at Starbucks as a potential partner rather than a rival, because anyone who feeds the caffeine jones of millions of affluent professionals enjoys a chemical bond that no editor can hope to match.

Forbes’ Jeff Bercovici rang up a media appraiser who correctly estimated the value of Newsday two years ago in order to find out what the Boston Globe is worth. Kevin Kamen’s guess: a maximum of $120 million and a realistic value of $75 million. That sounds terrible in light of the $1.1 billion that Globe parent New York Times Co. paid for the New England Media Group in 2003, but remember that money was relatively easy to come by in those day and that the Times Co. couldn’t find someone to take its Boston Harbor boat anchor off its hands last year for a paltry $25 million. Since then, cost-cutting has made the Globe a little more valuable, Kamen estimates. Perhaps that’s why a group of investors, led by entrepreneur Aaron Kushner, wants to buy it, Bercovici reports.

And Finally…

Rupert Murdoch has been the most strident of all publishers in demanding that readers pay for content, which is why the circulation promotion now being used by his Sun in the UK is so deliciously ironic. The paper stuffed thousands of banknotes into Saturday’s issue. Presumably it used small denominations so as not to encourage assaults on its street vendors. The daily has recently suffered a 4% drop in circulation. Perhaps Murdoch is hoping that readers will put their winnings to work to pay the access fees for the Times or News of the World.

About 55,000 readers of the Los Angeles Times in the San Gabriel Valley and Riverside were surprised to open their morning papers late last month to discover that the Times had acquired a sudden fixation with topic of “briefs subhed (see below).” Actually, it was a production error.  “About 55,000 papers were printed before the error was discovered,” the Times wrote in a correction. “Readers feared that all the copy editors had been laid off, or even ‘massacred,’ as one put it.”

We got an invitation to speak to the founder of the Sacramento Press a couple of weeks ago, and since few hyper-local publishers have the desire or financial means to do any PR these days, we were curious to hear what Ben Ilfeld (right) had to say.

Ilfeld is a 29-year-old entrepreneur who has created a different approach to community journalism. He has no journalism background, and that’s probably a virtue, because Sacramento Press is unencumbered by preconceptions about how publishing should be done. It is also experimenting with a diversified business model in which advertising is only a piece of the revenue picture. That’s an idea we’ve been advocating for some time.

Anybody can contribute to Sacramento Press and about 1,200 people have. About 65% of the content is generated by the community and managed by a full-time editorial staff of five people. The underlying principle, though, is what is sometimes called a “Folksonomy.” In other words, the community organizes the site.

Ilfeld and co-founder Geoff Samek created Sacramento Press’ content management system from scratch in Java. It incorporates a new navigation concept called a “story line.” Everyone who registers is asked to create one.

A story line links together all the work an author has done on a particular topic, providing a sort of background narrative. The site also relies heavily upon tags to give members the means to self-organize its content. “You can create a tag like ‘Marshall School Park’ and apply that tag to any other content,” Ilfeld said. “We then give you a URL and that creates your own front page.” The site also employs a traditional section taxonomy and its default front pages are laid out by human editors.

Merit Rewards

Members are urged along through a system of merit badges that rewards them for accomplishments like covering the fire department beat or participating in one of the many free workshops the company offers on topics like “writing for readers” and “interviewing techniques.” Basically, the more you contribute, the more recognition you get. This rewards system is a staple of user-generated content sites like Yelp and Kaboodle.

Sacramento Press’ greatest innovation, however, may be its business model. The company created a local vertical advertising network called the Sacramento Local Online Advertising Network (SLOAN) that gives advertisers and independent online publishers a chance to participate in national and regional ad campaigns. SLOAN takes care of negotiating deals and each publisher shares in the revenue. The network now represents over 50 sites and brings in over $10,000 a month.

But it goes beyond advertising. “The number one thing we do as an organization is provide marketing services,” Ilfeld says. “If building a Flickr account will help a client’s business, we’ll do that for them.” Advertising now comprises less than 50% of revenue. “Most of our sales are coming from social media work, events and services,” he says.

Sacramento Press isn’t profitable yet, but that doesn’t worry its founder. “Every time we approach profitability, we reinvest in the business,” Ilfeld says. With 90,000 unique monthly visitors and a 10% to 15% monthly growth rate, Sacramento Press is quickly becoming a significant force in the local media scene. Its ad network is also raising a barrier to entry for others.

Sacramento Press is demonstrating that a hyperlocal news model can work if publishers discard assumptions and think of new ways to generate revenue. Local media organizations are ideally positioned to provide marketing services to small businesses that lack the resources to manage their own campaigns. By diversifying their businesses, publishers can insulate themselves from disasters like the current collapse in advertising rates and position themselves as essential partners to local businesses.

So what are they thinking at The New York Times Co.? Having failed to sell its New England properties last year at an asking price that was reportedly 97% below what the Times Co paid for the Boston Globe and Worcester Telegram & Gazette in 1993, the company has now settled on splitting the Globe into two parts: one paid and the other free.

According to an account in Editor & Publisher:

Whereas Boston.com will continue to offer breaking news, sports, and weather from various sources, along with classified advertising, social networking, and information about travel, restaurants and entertainment, BostonGlobe.com will be designed to mirror the experience of reading the paper’s print edition. It will contain all the reports from the day’s paper as well as exclusive reports, in-depth news, analysis, commentary, photos and graphics, plus video and interactive features.

What does this mean? Will Boston.com become a My Yahoo-like text portal with wire feeds and little else? Will all of the material produced by the paper’s staff of reporters and photographers migrate to the paid edition but not be available to non-paying subscribers? How will those staffers feel about reaching a smaller audience? Will paid subscribers get anything more than an online version of the print edition? If so, why wouldn’t they just choose to receive the print edition in the first place and skip the whole online hoohah?

The answers to these questions will no doubt emerge in the nine months or so that the Globe has to consider its transition. Staffers will be watching the experience of their corporate parent as it imposes a pay wall at nytimes.com in January. BTW, we haven’t heard a whole lot about the plans for that experiment in recent months. We assume it’s still on.

We are on record as believing that paywalls will not work to salvage or grow the newspaper industry, but we also believe that the New York Times Co.’s strategy in this case is sound. Basically, management has recognized that trying to rejuvenate the print operation is futile, so it’s better to manage it into the ground as profitably as possible. This means raising subscription rates, erecting pay walls, holding the line on advertising prices for existing customers and generally trying to squeeze every last dollar out of the print operation that it can. It’s called milking the cash cow, and it’s a tried-and-true business strategy.

It is also a strategy of capitulation. The Boston Globe will never again see growth in its print edition,  so the best it can do is to wring profits out of the dwindling number of subscribers it has. Publishers are learning that over in London right now, where online readership of the Times fell 7.6% between July and August. Page views dipped 22% and time spent on site fell 16%. Some of this was no doubt due to the summer holiday, but the evidence is becoming abundant that pay walls significantly reduce traffic. The question is whether the incremental revenue offsets the corresponding declines in readership. No one has an answer yet, but it appears that newspaper publishers are increasingly willing to admit that print has no future and trying to get what they can out of a dying franchise. Believe it or not, than is healthy.

In the case of the Globe, The Times Co. will hopefully plow profits from paid subscriptions back into new properties that have the potential for growth, but it may choose to do something else instead. In the meantime, the message from the Globe’s move is that print is dead, resuscitation efforts are futile and those who still value print are going to pay for the privilege of receiving it. Not a bad strategy at all. At least it’s realistic.

Miscellany

Staffers at the Globe and elsewhere might want to look at the experience in Pittsburgh, where the Post-Gazette‘s PG+ is reportedly profitable and figuring out a sustainable business. The secret sauce in the publishing realm is sports, which motivates fans in the Steel City to fork over dollars in exchange for the latest information about local stars. However, a more important development may be the Web property’s shift into new areas of revenue such as sponsored events. “Those events have included a Post-Gazette “summer camp” featuring classes on fly fishing and cooking, as well as higher-brow discussions of the midterm elections,” writes Poynter’s Bill Mitchell. Hmmm… diversifying revenue. Where have we heard that before?

Did we really say that print is dead? Well The Wall Street Journal’s print advertising revenue jumped 21% in the just-completed quarter compared to the year-ago period, according to a memo from Dow Jones CEO Les Hinton. Online revenue was up, too. Those are impressive numbers, but one month does not a trend make.

Did we really say that print is dead? The Richmond (Mo.) News will reduce its print frequency from daily to twice weekly. Beginning Oct. 18, the 96-year-old News will be published on Monday and Thursday afternoons.

Slate’s Jack Shafer writes entertainingly about the history of the op-ed page, a 40-year-old invention often credited to The New York Times. Not surprisingly, the idea of portraying opposing viewpoints directly across from a newspaper’s editorial page has many fathers, given that it “has undoubtedly been one of the great newspaper innovations of the century,” in the words of John B. Oakes, a Times editorial board member who proposed the concept in the late 1950s. Oakes says the idea was his, but others who were at the Times dispute that, and other papers used similar vehicles as early as the 1920s. The Times‘ move to action was actually spurred by the death of the New York Herald Tribune in 1966, which removed a major conservative voice from the market. Editors realized there was an opportunity in dissent, and began openly soliciting prominent foes to write for their pages. This turned out to be a good business decision, since public figures write for cheap and the Times was able to realize an immediate advertising windfall. The concept was quickly picked up by other newspapers and  became a staple. It’s hard to believe that something we accept so easily today was the subject of so much controversy a few decades ago.

They’re on a bit of a roll over at Verve Wireless, which just raised $7 million for development and expansion of its local ad network and publisher platform. Among the investors are The Associated Press. Verve creates apps to deliver news to mobile devices. In addition to contracts with McClatchy, Belo Interactive and The AP. the company was selected earlier this year by the Audit Bureau of Circulations to measure the audience on mobile applications, mobile browsers and tablets. Verve Wireless claims that 750 publishers worldwide are using its apps.

And Finally…

Publishers could do worse than to rely upon the genius of their reporters. In Chicago, Sun-Times reporter Kara Spak won a “Jeopardy” quiz show to the tune of $24,001. In response to a question about an 1863 poem that mentions “the eighteenth of April in Seventy-Five,” Spak correctly identified the source as “The Midnight Ride of Paul Revere.” We don’t believe her employer requires her to contribute her winnings to the company pension fund. Had she worked for Tribune Co., we’re not so sure that would have applied.

Poynter’s always-insightful Rick Edmonds asks if he’s missing something: In Hyperlocal News, Where’s the Urgency?, He examines an assortment of hyperlocal news startups and comes away wanting more. “Sampling a host of aspiring online hyperlocal franchises — Examiner.com, Outside.in, OurTown.com and others — I’m consistently underwhelmed. One roundup of ‘news within a mile of me’ had crime stories a month old and many reports on the business travails of Outback Steakhouse’s parent company.”

Edmonds makes an important point about the distinction between “content” and quality. Basically, having a blog does no one any good if it’s used to publish crap. However, a lot of blogs (many hyperlocal publications are essentially blogs) put publishing ahead of reporting. Throw it up there and see if anyone reads it because – you know – you can. This is a natural result of the current fascination with social media as a shiny new object. People are publishing because it’s cool to publish. Five years from now, that novelty will have worn off and we’ll be figuring out what these new tools are really good for.

We expect that hyperlocal journalism ventures will consolidate into a small number of professional publishers who have the operational and sales skills to run profitably a lean organization of semi-professional journalists who contribute news about their immediate area. There will always be neighborhood bloggers – and some of them will be good enough to build significant followings – but readers won’t adopt the current cacophony of amateur local reporters as a replacement for major metro newspapers. Professional oversight will be needed.

There’s a land grab going on in this area right now, with aggregators like Patch, Everyblock (above) and the three organizations mentioned earlier each jockeying for position. They’re mostly using whatever low-cost sources of content they can find, and people like Rick Edmonds are astutely calling them on the shortcomings of that approach. We expect that as more ad dollars funnel down from dying dailies into hyperlocal ventures – and as the owners of these ventures become savvier about finding new sources of revenue – the quality will improve and jobs for professional journalists will emerge. They won’t be the cushy union gigs that the previous generation of scribes enjoyed, but they will be enough to bring some pros back into the business.

How to Manage a Blogger Network

Megan Garber speaks with Eric Berger about what it takes to build a good blogger network. Berger is the Houston Chronicle science reporter and blogger who created a network of science blogs at the newspaper back in 2008. The experiment was somewhat groundbreaking for a newspaper at the time, although ScienceBlogs and LexBlog were doing the same thing years earlier. Garber wants to know what makes a blog network successful and Berger shares advice that anyone can use to head down the same path:

Blogging requires passion – “If you’re writing about stuff that you’re interested in and enjoying what you’re doing, it’s going to come through in your writing.” Forcing people to blog never works. If they don’t catch the bug, they’ll simply mail in their entries until they can gracefully escape.

Blogging is a conversation – That includes responding to comments. A lot of folks think once they post an entry, they can walk away, but that isn’t so. The best bloggers want a dialog with their readers. Berger notes that it’s particularly difficult to find scientists who want to follow up on their original posts.

Don’t ignore the news hook – Key advice here: “People want stuff either that’s related to the news of what’s happening or that has some kind of popular hook.” Blogs are best at communicating timely information.

Good source = good blogger – This is a great point. “Experts who make good sources might also make good bloggers,” Berger notes. That’s because they have a natural inclination to explain.

Miscellany

Lauren Kirchner does what reporters do too rarely: Updates us on last year’s hot news. In this case, the subject is Kachingle, a tip-jar-style service that lets readers contribute micropayments to the Internet publishers they like without having to make a conscious effort to do so. The service was all the rage when announced in early 2009 (we gave it several paragraphs in February), but its star seems to have faded since.

Kachingle has signed up about 300 publishers, but none whose title begins with the word “The.” Kachingle founder Cynthia Typaldos said she’s been getting a great reception from news organizations, but the sales process seems to die at the executive level. Kirchner speculates that Kachingle’s transparency – visitors can see which sites inspire the most contributions – may be one barrier. But more likely it’s just bureaucratic intransigence: “Fitting a little Kachingle widget seamlessly onto a homepage isn’t actually as easy as it sounds, if the homepage you’re talking about is nytimes.com.”

Huffington Post has scored another big hire: Howard Fineman . The 61-year-old veteran Newsweek reporter and MSNBC news analyst will become HuffPo’s senior political editor. In an interview with MediaMatters, Fineman contributes some insight on why his new employer is having so much luck attracting senior journalists. Arianna Huffington is trying to bootstrap a professional news organization that stresses quality journalism and independent politics at a time when news is splintering into partisanship and theatrics. She apparently has the money to do it. “Bringing in the best of the old involved more money than we had when we launched. But now that our Web site is growing, we’re able to bring in the best of the old,” she told The New York Times. Journalists like Fineman don’t work 16-hour days and file stories every four hours. Huffington is doing something right to attract prominent people like him and veteran technology editor Jai Singh. We’d suggest that HuffPo is emerging as one of the first big winners in the race to supplant conventional news organizations.

And Finally…

“The English language, which arose from humble Anglo-Saxon roots to become the lingua franca of 600 million people worldwide and the dominant lexicon of international discourse, is dead, ” begins a wonderful essay by the Washington Post‘s Gene Weingarten. He proceed with a litany of recent butcherings of the language by some of the US’s most notable publications, including The New York Times, which has used the term “reach out to ” as a synonym for “attempt to contact ” at least 20 times this year. Other offenders: The Winston-Salem Journal‘s use of was “Alot ” to describe the number of locals Salemites who would be vacationing that month, the Miami Herald‘s report on someone who “eeks out a living ” and his own employer’s publication of a letter referring to the first couple the “Obama’s. ” We hope you’re socialize this article to others and reach out to Weingarten to complement him.

We continue to be amazed at the willingness of news organizations to employ the same tactics of obfuscation and doublespeak that their reporters spend their days combatting. Witness this press release from last week:

The Deseret News today announced a bold new direction to provide innovation and leadership at a time when daily newspapers throughout America are struggling to define a course for the future….New initiatives, includ[e] the creation of Deseret Connect, a broad and uniquely qualified group of story contributors, a new Editorial Advisory Board and the expansion of the news reporter base…These initiatives will increase the depth and quality of the Deseret News’ daily newspaper. As part of these changes, the organization also announced a reduction in workforce.

But this is no ordinary reduction in workforce. This is a 43% reduction in workforce, or 57 full-time and 28 part-time employees, according to Editor & Publisher. Among the victims are Editor Joe Cannon and Publisher Jim Wall. In the worst spinmeister fashion, the publisher doesn’t even touch upon the layoffs until 700 words deep in the release. That news is preceded by five bullet-pointed items peppered with words like “expansion,” “more,” “launch” and “new.” In other words, this is a major cutback spun as an expansion.

We actually see nothing wrong with what Deseret is doing. It’s combining editorial staffs with affiliated broadcast subsidiaries and shifting its focus toward digital delivery. Makes sense to us. It also makes sense that a large layoff may be needed to get costs in line with the new revenue reality. But why bury the lead so deep in the story? Why not come out and admit that tough times demand tough action?

In any case, other news outlets took care of asking the hard questions, including Huffington Post, Bloomberg BusinessWeek and the Salt Lake Tribune. Charles Apple says he hears the layoffs include the entire design staff.

Salty Words for USA Today Reorg

“It is odd that the best-read print newspaper in the country would walk away from that pre-eminence and embrace technologies in which it lags the field,” writes John K. Hartman, journalism educator and author of two books about USA Today, in an opinion piece in Editor & Publisher. He’s referring to the Gannett flagship’s bold announcement two weeks ago that it would restructure itself around online delivery to mobile devices, lay off 9% of its staff and de-emphasize print.

In a commentary bluntly titled “USA Today Setting Itself Up For Failure,” Hartman argues that not only is USA Today’s strength in print, but that is the only area in which it has innovated. He points to the decline in the national daily’s once market-leading sports coverage at the hands of ESPN and chides publisher David Hunke for betting on online delivery when USA Today isn’t even in the top 10 news sites in the world (It’s actually #21, according to Alexa, placing it behind such competitors as Drudge Report and the Times of India). In the professor’s view, a media company with such little online visibility is crazy to place such a big bet on a digital strategy.

He’s right, but what else is USA Today going to do? It’s already an also-ran on the Web and its print business is declining like everybody else’s. Mobile seems to be an open field at this point, so Gannett is making a play for the only opportunity it has to establish market leadership. There’s also a possibility that a genuine reader-funded subscription model could evolve in the mobile category. That has failed to happen online. USA Today is playing the only hand it’s got.

Part of the problem of analyzing strategic moves like Gannett’s is framing them in the context of a publication’s previous success. Will USA Today dominate the mobile market? Of course not. No one will. The barriers to entry are too low. But can mobile delivery become a growing revenue source to complement a modestly successful Web presence and a profitable print product? Sure it can.

Hartman is critical of USA Today for fumbling away its leadership in sports coverage to ESPN.com, but the reality is that broad-based media will always lose out to narrow, targeted media. The best strategy for a comprehensive news site is to be everywhere but expect to lead nowhere. In this age of hyper-focused media, that’s not a very comfortable position, but it’s about the only hope a brand like USA Today has got.

Miscellany

Also in the realm of church-owned newspapers, the price for the floundering Washington Times is $1.00. At least that’s what a Unification Church-affiliated buyer could pay, according to a memo released to the media. The selling price probably reflects a bit of a family discount, since the buyer is Doug Joo, an ally of Rev. Sun Myung Moon, whose Unification Church owns the paper. It’s not like the one-buck price is a bargain; the buyer has to assume all the paper’s unspecified financial obligations. The Washington Times has cut 40% of its staff this year.

Journalism schools are teaching more bells and whistles and less journalism, or at least that’s what some journalists and educators think. About.com’s Tony Rogers cites of some trends that make traditionalists uncomfortable, including the University of Colorado at Boulder’s recent announcement that it is considering dismantling its 700-student journalism school in favor of an interdisciplinary communication program. Roger spoke to several journalism educators who said schools are increasingly stressing video cameras and Photoshop over the  essential tools of good reporting. As a result, there are jobs for journalists with good public affairs reporting skills sitting open. While not denying that multimedia skills are critical, educators say the balance is getting out of whack, and we’re producing less capable journalists as a result.

Newspaper publishers probably welcome any help they can get these days, even if it’s from the company that perpetuated the largest oil spill in history. BP bought newspaper ads in 126 markets in 17 states in the three months after the spill, according to the Congressional Committee on Energy and Commerce.  BP dropped over $93 million in advertising during the three months after the spill began. That’s about three times what it spent in a comparable period a year ago. Most of the newspaper ads were targeted at the states most affected by the spill.

USA Today, which set off a publishing nuke, the impact of which still reverberates across the industry 28 years later, is undertaking the most significant overhaul of its format and strategy in its history. The Gannett Flagship is the scrapping of its traditional four-part organization (News, Sports, Money, Life) in favor of a cluster of 13 “content rings” that will produce information for distribution in both print and digital format. The rings will include Your Life, Travel, Breaking News, Investigative, Washington/Economy, Tech, and Auto, among others, paidContent.org reported. The company said the new organization is designed to address the growing importance of smart phones and tablets as delivery vehicles and potential sources of subscription revenue. About 130 staffers, or 9% of the workforce, will lose their jobs in the reshuffling.

An executive reorganization puts former life section editor Susan Weiss in charge of content. According to a slide presentation obtained by the Associated Press, Weiss will have a “collaborative relationship” with the paper’s vice president of business development. The presentation said the restructuring will “usher in a new way of doing business that aligns sales efforts with the content we produce.” The statement is already raising eyebrows by publishing pundits who fear that the deteriorating business situation in American newspapers will force editorial departments to become handmaidens of sales operations. Publisher Dave Hunke and editor Editor John Hillkirk said nothing will interfere with the paper’s commitment to independent journalism. However, as paidContent wryly put it, “While this doesn’t necessarily mean a complete demolition of the “Chinese Wall” that traditionally exists at established news organizations, it certainly sounds like it will be little more than a nylon curtain.”

Publishing executives would be wise to closely watch USA Today‘s moves. While the paper has long been derided as a journalism lightweight, it has a history of innovation in adapting to changing audience tastes. Many publishing veterans sniffed at USA Today in the early days, believing its formula of short stories without jumps, large infographics and generous use of color represented a dumbing down of news. A few years later, nearly all of them had adapted the same style. In the years since, USA Today has solidly established itself as a national institution with a readership of more than 1.8 million.

It’s particularly interesting that USA Today has made such a public commitment to harmonizing its editorial and advertising operations. This is a bitter pill for traditionalists to swallow, but a necessary one if professional news organizations are to thrive in the future. We believe that win-win solutions are possible when creative minds seek them. Few have done so to this point, and USA Today‘s strategy shift shouldn’t be dismissed until it’s had a chance to work.

Miscellany

Former Walt Disney Co. CEO Michael Eisner is among the candidates to take over the bankrupt Tribune Co. once it emerges from Chapter 11 reorganization. Eisner confirmed speculation that he is a candidate for the top job in a Variety interview this week. Jeff Shell, a former News Corp. cable executive who’s now with Comcast, is being considered for the CEO slot. Presumably, that means Eisner would be chairman. In the Variety interview, Eisner expressed support for paywalls. “The salvation of the newspaper is some kind of pay arrangement [online], which will evolve into something significant,” he said. The Tribune may actually be a bargain. Romenesko got hold of a memo stating that Tribune Co. has $1.6 billion in cash and generated $18 million more in cash flow in July than in the same month last year.

Newspapers as we know them will be irrelevant in a decade, at least in Australia, digital media consultant Ross Dawson told the Australian Newspaper Publishers’ Association yesterday. Or at least that’s what he told Editor & Publisher he planned to say earlier in the week. Dawson, who is considered a media seer Down Under, said the publishing platform of the future will be iPads and their derivatives, which will fall in price so much that they’ll be given away free within a few years. By that time, news organizations will be earning serious revenue from subscriber dollars. But they’d better not get comfortable. Media revenues will soar, but “established media organizations will need to reinvent themselves to participate in that growth.”

Dawson is a big fan of tablets as a delivery medium and has several interesting posts on his blog about a topic. the chart below is one of the free takeaways (click to download).

The financially troubled Washington Times is reportedly being sold to News World Media Development, which is affiliated with the Unification Church, which owns the Times. The conservative daily, which claims a circulation of 40,000, has cut its staff by 40% in a desperate effort to stay afloat. Executive Editor Sam Dealey called the impending sale a “welcome development.”

Add the Waco Tribune-Herald to the growing list of metro dailies that are putting up paywalls. Beginning Sept. 15, non-print subscribes will have to pay $9.95 per month, or $1.99 for a 24-hour pass to WacoTrib.com. We had a chance to work with a couple of the top editors from WacoTrib last summer and we wish them all the luck in the world.

The former Philadelphia Newspapers continues to struggle toward viability. Newspaper Guild employees at the Philadelphia Inquirer and Daily News voted for a package of wage cuts totaling about 6% in exchange for a year of job security for unionized reporters, editors and advertising staff. The company is also changing its name to the Philadelphia Media Network.  The Guild is the first of the paper’s14 unions to agree to terms with the new owners, who bought the paper in a wild and wooly auction in April. With 500 members, though, it’s considered the big cahuna of the negotiation process. The new owners have pledged to keep the Inquirer and Daily News editorial staffs separate and to manage the company for growth.

“Inc. magazine has released its annual list of the 5,000 fastest-growing private companies in the country. Sadly, but perhaps not surprisingly, only 59 of them are media companies,” writes Lauren Kirchner on the Columbia Journalism Review website. True that, but Kirchner is choosing to take a glass-half-empty perspective. You can turn that statistic around and marvel at the fact that any media companies are on the list. Kirchner does go on to cite a number of interesting media startups that are actually growing and adding people. They aren’t media in the conventional sense, but they do appear to be onto something. This column Is worth reading for the examples alone.

The Pew Research Center’s Project for Excellence in Journalism gave mainstream media a lukewarm but nonetheless positive endorsement for its coverage of the Gulf oil spill. Noting that the three-months-plus duration of the event challenged news organizations to explain and provide context for the event, Pew said media outlets rose to the challenge under trying conditions. “A news industry coping with depleted staffing, decreasing revenues and shrinking ambition was tested by the oil spill and seemed to pass,” Pew said.

And Finally…

Popular comic strip “Cathy” will end its 34-year run on Oct. 2. Cartoonist Cathy Guisewite, 60, who started the strip as a series of autobiographical doodlings that she sent to her mother, said she wants to spend more time with her family and explore other creative avenues. Cathy was an instant hit in 1976. It struck a chord with the growing number of women who were entering the workforce and struggling to balance career and personal priorities. It currently runs in 1,400 newspapers. In recent years, the strip has been criticized for being dated and even anti-feminist. It’s still clipped to a lot of refrigerators, though.

Forbes likes blogs. In fact, the magazine that bills itself as the “Capitalist Tool” is now requiring its reporters to blog. The new rule is part of an effort to maximize the value of True/Slant, a blog-driven citizen journalism venture founded by Lewis Dvorkin, a veteran journalist who’s worked at The New York Times, The Wall Street Journal, AOL and – you guessed it – Forbes.

Forbes Media was an early investor in True/Slant and apparently liked what they saw enough to buy the company and hire Dvorkin. In its new skin, the True/Slant platform will include content not only from Forbes’ bloggers but also from selected experts in finance and investing. The Columbia Journalism Review story says the first few entries look promising, but questions whether Forbes will be able to maintain its quality standards if all reporters are now required to blog on the side. It contrasts the Forbes approach to The Economist, which rigorously enforces a consistent style and voice, regardless of author.

Dvorkin doesn’t seem too concerned. “Editorial command and control is a relic of the past and has no place in a Web world,” he wrote in a True/Slant anniversary post last year. “It will slow you down, cost you and stifle the upheaval you want to unleash.” And CJR’s Lauren Kirchner is inclined to give Dvorkin the benefit of the doubt. “One can argue that, given the state of the online news industry, upheaval is good, and the time for Hail Mary passes is upon us,” she writes.

Speaking of magazines, Jeff Jarvis suggests eight ways magazines can survive if they’re willing to turn the traditional model on its head. Survival is job one for the U.S. magazine industry, which has seen circulation of the top brands plummet by more than 60% this decade. Jarvis’ number one suggestion: “Ignore print. Enable community…Magazines still have tremendous, if very perishable, value if you know how to unlock it because their people care about the same stuff. Enable communities to build and meet and create value around their interests, especially those that are specialized.” Magazines are still nexus points for communities of readers, but their value derives not from producing content as much as enabling community members to create and manage their own. Curation, anyone? Some of his recommendations – specifically that magazines diversify their revenue models – sound a lot like the ones we proposed back in April.

Miscellany

Publish2 announced the launch of News Exchange Co-ops, which make it “easier than ever for news organizations to share content with each other.” The new service is based on News Exchange, a service the fledgling company announced in May as “a new efficient supply and distribution chain for high quality content brands.” In its earlier announcement, Publish2 positioned itself squarely against the Associated Press, the wire service that angered some of its largest members with price increases as their businesses entered a free-fall two years ago. Unlike the AP, Publish2 isn’t set up as a source of original content, but rather as a way for news organizations to create content-sharing networks organized around topics, regions or anything else. If this sounds a lot like RSS feeds, there’s a little more to it than that. Publishers can “Set limits on which newsorgs have access to your content. You can exclude specific newsorgs, include specific newsorgs, or open your content up to everyone,” says a tutorial on the home page. Copy editing is apparently extra. Megan Garber has an excellent analysis of News Exchange on the Nieman Journalism Lab blog that looks at its rivalry with AP.

Publish2 describes as co-op as “a group of news organizations that all give each other permission to republish the content from one or more of their newswires.” The concept is similar to informal cooperatives that have been established in New York and Ohio. “You can create a co-op, invite your sharing partners to join, and then each of you adds a ‘Local News’ newswire to the co-op to share with the group,” wrote Ryan Sholin, Director of News Innovation, in an e-mail. “All newspapers contribute via their newswires, automatically importing stories from their print publishing systems. All  newspapers can then automatically export co-op content to their print publishing systems using AP standard formats.” There’s that AP again.

National Newspaper Association (NNA) representatives are opposing the U.S. Postal Service’s (USPS) proposal to drop Saturday service, saying it will hurt rural communities that have few alternatives to weekly newspapers for local information. NNA postal expert Max Heath said the loss will be felt most acutely in coverage of high school sports, which “form the nucleus of community gatherings. If the Postal Service’s mission is still to bind the nation together, it must use the bindings that the community chooses,” Heath told the Postal Regulatory Commission. In fact, the cost savings that are achieved from axing Saturday service will be more than offset by competition from private delivery services, which will step in to serve local newspapers, Heath said. Newspaper delivery has been the only growth item in the USPS’s revenue line over the last year. The USPS says it’s on track to lose $7 billion this year and that eliminating Saturday service could save $3 billion. Lawmakers are trying to block the plan.