The newspaper industry’s malaise has spread to the magazine business. Ad pages were off 20.1% in the most recent month, according to Media Industry Newsletter (Min), and those figures are down from an already depressed October last year. Of the 155 titles tracked by Min, 143 are down for the year. The carnage is worst in luxury titles like Architectural Digest (down 49.4%), Veranda (down 47.4%), W (down 45.5%), Town & Country (down 45.2%), Conde Nast Traveler (down 45.1%) and Gourmet (down 42.7%). Bucking the trend is Family Circle (up 13.9%) and several fitness titles.

The magazine industry’s troubles can be traced to the alarming trends in newsstand sales, which are off 37% since 2001, according to MediaPost. Newsstand sales are important because they’re far more profitable than subscription sales and are also a significant source of circulation promotion. However, it appears that not many people are buying magazines on newsstands any more. Check out these numbers covering total annual newsstand sales:

One title that’s gone against the grain over the last eight years is The Economist, which is up 82% in that time. One reason might be innovations like a new service that enables New York City residents who receive text alerts from the magazine to order single copies delivered overnight. As long as the order is placed by 9 p.m. on Thursday, the customer can have a hard copy of that week’s new issue in hand in time for the Friday commute. That’s before the newsstands are even stocked. The Economist says it can provide the service at no additional charge over the newsstand price because it doesn’t have to pay distribution middlemen.

Not that magazines’ troubles are any solace to beleaguered newspaper publishers. Fitch Ratings says the decline in newspaper ad revenues will continue for at least another year, due to continued weakness in the print advertising market. The forecast is especially dour because it comes off terrible 2008 numbers and because most media markets are expected to enjoy a modest upturn in 2010 off of dismal results this year. PriceWaterhouseCoopers earlier forecast incremental newspaper advertising declines of 4.5% a year through 2013, noting that circulation revenue is falling in line with readership. Meanwhile, publishers are relying more and more upon circulation revenue to boost the bottom line. MediaPost documents several recent price increases by daily publishers and notes that circulation now makes up 39% of The New York Times revenue, compared to 27% five years ago.

Coupon Clipping

We somehow missed writing about this two months ago, when the survey was released, but the Newspaper Association of America just spent a lot of money on research that demonstrates that consumers rely upon newspaper advertising as an essential shopping tool. The survey of more than 3,000 consumers found that 59% cited newspapers as the “medium they use to help plan shopping or make purchase decisions,” while 82% “took action as a result of newspaper advertising.” Other media were way behind.

When you think about it, these results aren’t surprising. Retail purchases are local, and newspapers still do the best job of delivering local advertising. It’s also less convenient for a consumer to print and clip a coupon from the Internet than it is to cut it out of the newspaper. Finally, local display advertising has a better chance of catching the attention of passersby than an online banner ad, which many people block anyway. One thing the research makes clear is the importance of coupons: 90% of respondents said the presence of a coupon made it more likely they would read or look at an ad, making it the single most important influencing factor in stimulating an action. The NAA released the research as a series of short reports, all of which can be downloaded here.

Another Case Against Paid Content

Programmer guru Paul Graham has a pretty good essay on why people won’t pay for content. He notes that the print publishing model is based on selling paper more than it is on selling information. The more paper publishers can produce, the more revenue they generate. This is why the industry is in the doldrums now. He also suggests that the iTunes model is a poor one for publishers to emulate. “iTunes is more of a tollbooth than a store. Apple controls the default path onto the iPod…Basically, iTunes makes money by taxing people, not selling them stuff.” Well, not really. There are other ways to load up an iPod, it’s just that Apple has found the threshold of pain for paid content and manages to squeeze in just under it. The point about tollbooths is important, though. “A toll has to be ignorable to work.” Maybe that’s why micropayments have a chance.

Harkening back to arguments made earlier by Chris Anderson, Graham notes that the worst place to be is in the copying business. Consumers now perceive anything that’s distributed as a “copy” to be of low value. The reason movie and game producers manage to maintain high price points for their products is because they’re in the experience business, not the copy business. Perhaps that’s where publishers need to be, although their background as publishers gives them no particular head start in getting there.

And Finally…

Cuitlacoche, or fungus in a can

Meet Steve. He’s married, has kids, could be your neighbor or your boss or your underling. Steve is a writer, whether he thinks of himself that way or not. Steve proves the point that King Content rules the social media kingdom. Steve is gross and uses foul language. Steve is racy. Steve is one of the funniest bloggers we’ve found on the Internet. You see, Steve finds “food” that no mortal would dare eat (including, but not limited to, Ralph’s Potted Meat Food Product, Dolores Brand Pickled Pork Rinds, Cuitlacoche — “a black fungus that infects corn fields, making the kernels bulbous and swollen as they fill with spores”) and, well, scarfs it down.

How do we know he’s not lying to us? Because he very explicitly reviews each product after he tastes it. Texture, smell, taste, everything. Could he be making up his reviews? Of course, but far be it from us to correct him. We’ll leave the job of testing to him; we just hope his hospital visits are insured.

Judy Sims’ “Top 10 Lies Newspaper Execs are Telling Themselves” may be painful for newspaper execs to read, but they should read it anyway. In blunt language, she shoots down some of the most common rationalizations newspaper executives use for continuing to do business as usual. Not all of her points are thoroughly supported, but it’s hard to argue with the common-sense thinking behind most of them.

Among our favorite quotes:

The only way newspapers can ensure the survival of their brands and the journalistic principles they hold so dearly is to separate the Web organization completely from the newspaper.

This frames the list’s biggest “myth,” which is that news organizations can prosper online while doing what they’ve always done in print. The nature of online publishing is conversation and community, not top-down communication. Organizations that derive 90% of their revenue from print are never, ever going to give an online division the attention or resources it needs.

Figure out what is truly scarce information to your readers.  Then, maybe you can charge for it.

Yes, yes, yes. Putting pay walls in front of information that doesn’t meaningfully affect people’s lives is a DOA idea, yet it seems to be conventional wisdom right now that readers will pay for stuff like popular columnists and exclusive sports coverage. No they won’t. They will pay for information that saves them money, enhances their appearance or finds them love, and precious little else. Maslow’s Hierarchy wasn’t invalidated by Internet.

We used the paper to help us shop every week…and decide what movie to see at what time and where. How much of the value of the newspaper was derived from news and how much was derived from all these other things?  After all, news has always been free on TV and radio.

See the previous point. Publishers who think readers are going to pay for news are delusional. Not to mention pompous. Half the reason people subscribe to newspapers is for the coupons. News is a commodity. You have to deliver value that affects people’s lives in a meaningful way.

Figure out what is truly scarce information to your readers.  Then, maybe you can charge for it…Do what you do best and link to the rest.

The second part of the quote is from Jeff Jarvis, but the sentiment is appropriate to the “myth” theme. Newspapers have traditionally had to do everything for their readers because readers had no way to find information for themselves. Now that restriction has been lifted, which means publishers should stop spending money on stuff they suck at.

The more cuts are made, the more newspapers are guaranteeing their own demise.

That’s because the people they’re cutting are setting up shop as hyperlocal bloggers and competing against their former employers. Newspaper layoffs are thus giving rise to the next breed of competitors.

If there’s any unifying thesis to Sims’ 10 lies, it is that trying to manage a revolution is futile. Publishers will not iterate themselves to a secure future, nor will they ever bring back the profit margins of the past. The rules have changed forever and that means blowing up a lot of stuff. The process is incredibly painful but it’s necessary for any organization that hopes to make it to the other side of this vortex.

A couple of weeks ago, SeattlePI.com reported that its Web traffic has remained unexpectedly strong after pulling the plug on its print edition and firing 80% of its staff. The Post Intelligencer may have given the rest of the industry a model for completing the transition to the digital world.

Get Comfortable with “Good Enough”

After you’re done reading about 10 lies, head over to Journalism Iconoclast Pat Thornton, who speaks much truth about what he calls the “Down and Dirty Revolution.” Thornton’s main point: Stop thinking like an entity that was the be-all and end-all of information to its community and start thinking like a participant in the digital community. What does that mean? Paraphrasing:

• Make the most of what you’ve got and stop whining about the resources you lack.
• Be satisfied with good enough. You can improve it later. Perfection is the enemy of getting stuff done.
• Stop duplicating effort. “If parents are taking pictures at a high school football game…it makes much more sense to work out a deal with them than to spend staff resources on taking pictures at said game.” So true. Likewise, use Creative Commons photos and stuff people post on Flickr instead of sending your own photographer to shoot the same stuff.

There’s more, but those are the basic themes.

Miscellany

If all goes well, we may soon remove the Claremont (N.H.)  Eagle Times from the R.I.P. list.  A federal judge has given a Sample, Pa. newspaper chain conditional approval to buy the newspaper with the intent to relaunch it. The 7,800-circulation Eagle Times closed abruptly in July when its owner ran out of money. It took with it three small weeklies, which also will be relaunched if new owner Sample News Group has its way. Owner George Sample said his goal is to relaunch the daily before the end of the month with a staff of 25, which would be significantly smaller than the 66 full-timers and 29 part-timers the paper previously employed. Sample also said he plans to relaunch the weeklies at some point. Sample offered just $261,000 for the franchise, which was nearly $4 million in debt when it declared Chapter 7 this summer.

Ryan Chittum runs the numbers and finds that newspaper ad revenues are on track to hit their lowest level since 1965. In real dollars, revenues peaked in 2000. The comeback from the 2001-2002 recession was never very strong and sales have plummeted for the last three years. Real dollar revenue for 2009 will be about half of what it was just nine years ago, a stunning development in an industry that’s been historically known for its stability. Chittum also notes that circulation is the only slice of the revenue pie that’s growing right now while online advertising is declining. In fact, it appears that the online advertising business will only support one spectacularly successful business and that’s Google. A busy comment stream on this month-old piece debates whether online advertising is actually stealing share from print. Right, and global warming is a myth. (If you have trouble reading the chart below, click on it to go to Chittum’s analysis at the Columbia Journalism Review, where you can see an enlarged version.)

PaidContent.org has an interview with Josh Cohen, senior business product manager of Google News. Cohen has been schooled well to say little in a lot of words, so don’t expect any great insights. The main takeaway for us was that Google has no intention of sharing with publishers any revenue generated on Google’s site but that the company really wants to work with news organizations to make sure content behind pay walls is visible to Google’s search engine. In conversations like these, we hear Google executives sounding more and more like Microsoft officials did in the early 90s.

Speaking of Google, have you seen Google Fast Flip? It’s a new Google Labs project that “lets you browse sequentially through bundles of recent news, headlines and popular topics, as well as feeds from individual top publishers,” according to an entry on the Official Google Blog. “As the name suggests, flipping through content is very fast, so you can quickly look through a lot of pages until you find something interesting.” The service is the product of a partnership between Google and “three dozen top publishers, including the New York Times, the Atlantic, the Washington Post, Salon, Fast Company, ProPublica and Newsweek.” The idea is that if people can access news more quickly, they’ll read more news and that will result in more advertising revenue. Google continues to try to extend the olive branch to publishers who see nothing to like in other Google services that they claim steal their intellectual property.

Final bids for BusinessWeek are due today and Bloomberg LP is reported to be the leading contender. Other possible buyers include Bruce Wasserstein, Lazard, OpenGate Capital and ZelnickMedia, but Bloomberg is said to have the top bid. BusinessWeek revenues are on track to be down 43% from last year’s levels.

We’d like to be able to close out the week on a happier note, but the evidence that newspaper executives and union leaders have no friggin’ clue about the enormity of the challenges facing them just keeps on coming. Consider:

Newspaper layoffs have hit young people the hardest, according to a survey by the Associated Press Managing Editors. The survey of 95 editors found that newsroom staffs have shrunk more than 10% in the last year and that workers between the ages of 18 and 35 were the most likely to be shown the door. This information comes at a time when newspapers are desperately struggling to become relevant to precisely that age group. It’s not that the editors want to lay off all the young staff, but union rules require them to preserve the jobs of older – and more change-averse – employees at the expense of younger and cheaper workers. We like Silicon Alley’s graphic accompanying this story. It shows a man aiming a revolver at his foot.

Ken Doctor of Outsell has a new report on the state of newspaper companies’ digital migration efforts and he comes to some pretty bleak conclusions. Newspapers derived just 11% of their revenues from digital sources in 2008, Doctor found. In comparison, the rest of the information industry gets 70% of its revenue online. In other words, the specialty publishing markets have substantially completed their migration to digital business models while newspapers are just beginning.

It gets worse. Online revenue for newspapers is now static or declining while it’s growing nearly everywhere else. And all the major publishers except Dow Jones are losing market share. “The news segment still stands out as the biggest laggard in the information industry overall,” Doctor says. Listen to our August interview with Doctor.

Miscellany

The number of reporters on Capitol Hill isn’t declining, but the profile is changing. There were 819 accredited reporters from mainstream US newspapers and wire services on the Hill in 2009, a decline of 193 – or 19% – from the previous year, according to the Pew Research Center. However, the gap is being filled by reporters from niche and specialty publications. There were 500 of them in the galleries this year, up from 335 a decade ago. As a result, the full Washington press corps has remained fairly stable at between 1,300 and 1,500 souls over the last 20 years. It’s just that newspapers now make up less than half the total, compared to two-thirds a decade ago.

The authors of the study note that ordinary Joes are privy to less and less information about their government, while well-heeled business types can afford to finance on-site reportage that keeps them in the lobbying loop. And the advantage isn’t limited to conservative business interests. “The Washington bureau of Mother Jones, a San Francisco-based, left-leaning non-profit magazine, which had no reporters permanently assigned to the nation’s capital a decade ago, today has seven, about the same size as the now-reduced Time magazine bureau,” the study notes.

The Pittsburgh Post-Gazette is the latest newspaper to jump on the pay-wall bandwagon. Its new PG+ section went live this week, offering bonus features like “social networking, live chats, videos, blogs and behind-the-scenes” look at the daily news,” according to president Christopher H. Chamberlain. Standard daily fare will remain free, but for $3.99/month or $36/year, readers will get exclusive access to the thoughts of Steelers reporter Ed Bouchette, as well as undefined special offers. We’ll see. You can tour the “PG+ Experience” here.

The folks at North America’s largest French-language daily must have liked what they saw in Boston, where The New York Times Co. successfully stared down unions at the Boston Globe and won significant cost reductions. Montreal’s La Presse will shut down Dec. 1 if the newspaper’s eight unions don’t help it cut $26 million in operating expenses. Among the concessions management is seeking are the end of a four-day work week for full-time pay and elimination of as many as 100 of the 700 jobs at the newspaper. The union says it’s open to discussion if it can see the paper’s books. La Presse cut out Sunday publication earlier this year in order to save money.

Things are looking up in Seattle. Shortly after the closing of the Seattle Post-Intelligencer just five months ago, the surviving Seattle Times asked publicly if the city was about to become a “no-newspaper town.” Hardly. Since the P-I went under, circulation at the Times has shot up 30% to 260,000 daily readers. The paper has crept back into the black on a month-t0-month basis and is enjoying its best outlook in years.

One of the last family-owned major metros in the country, the Times has been weighed down for years by a joint operating agreement that required it to support the money-losing P-I. Fortunately for the Times, it managed circulation for both papers, so when the P-I went under, the Times simply switched subscribers to its circulation list and gave them the option to cancel. A remarkable 84% opted to stay with the Times.

But it gets better. The online remnant of the P-I is beating its numbers. Although SeattlePI.com has only one-eighth the editorial staff of the failed newspaper, it has focused its coverage and kept most of the reader traffic it had before the newspaper went under. Hearst won’t say if SeattlePI.com is making money, but it does say that audience and revenues are ahead of projections.

In other good news, Cox Enterprises has pulled the Austin American-Statesman off the market, saying the bids it was receiving didn’t reflect the true value of the paper. The American-Statesman is one of 29 titles Cox put up for sale nearly a year ago. While there were many visitors and several bids, the offers were in the fire-sale range, said publisher Michael Vivio. “it just did not make sense to sell it for the prices offered.” The story quotes newspaper analyst Ed Atorino speculating that “there are signs that the newspaper industry may have bottomed out. ‘We see hopes for better conditions by the end of 2010,’ Atorino said. ‘It’s been very difficult, and now, maybe, the worst is over.’”

A Reader Revenue Model That Works

Amid the wreckage of the media industry, there is at least one publisher who’s charging readers for content and making a lot of money at it. He’s Christopher Kimball, the intense, non-nonsense publisher of Cook’s Illustrated and Cook’s Country magazines. The flagship Cook’s Illustrated has nearly a million subscribers who pay between $25 and $35 a year for six issues. There’s no advertising. The business is reportedly insanely profitable.

Kimball’s recipe is to give readers exactly what they want: no-fail recipes vetted with exhaustive trial and error in kitchens outfitted with the best gadgetry money can by. You won’t find exotic dishes in the Cook’s magazines. What you’ll find is instructions on how to make the perfect pancake, combined with exhaustive background information on details such as the role of baking powder in the process.

The Boston Globe profile says Cook’s Illustrated enjoys an almost unheard-of 78% renewal rate. Kimball charge for website access and finds readers through intensive direct-mail campaigns and a successful spinoff cooking show called America’s Test Kitchen. Though he’s a multi-millionaire, Kimball can usually be found on weekends at his Vermont farm, testing new recipes. He’s a rigid perfectionist who believes advertising is an unholy alliance that does a disservice to readers. So far, he’s confounding the critics.

Miscellany

The 23^rd annual Veronis Suhler Stevenson media survey is out (TG; we’ve been on pins and needles) and  finds that for the first time last year, consumers spent more time with media they paid for – like books and cable TV – than with primiarly ad-supported media. The study also forecasts somewhat counter-intuitively that media/communications will be the third fastest-growing industry in the US over the next five years, trailing only mining and construction. The growth won’t come from traditional media, though. Rather, it will be driven by new areas like paid product placement, e-mail marketing, in-game advertisements, mobile advertising and video downloads.

The New York Daily News is hiring a social media manager.  It’s joins crosstown rivals New York Times and New York Post in recently putting some bucks behind the explosion of interest in Facebook and the link. The Daily News has a long way to go: it’s roster of Twitter followers is about 1/10^th that of the Post’s.

The Boston Globe interviews New York Times Co. chairman Arthur Sulzberger and CEO Janet Robinson. They say the threat to shut down the Globe unless major union concessions were made was not a bluff. They also don’t plan to sell the paper to the highest bidder. They want someone who’s going to continue a history of quality journalism. And they think the Times Co. has been a splendid custodian of the Globe’s reputation. Sheesh.

We stumbled across a new search engine: Yebol that “utilizes a combination of patented algorithms paired with human knowledge to build a Web directory for each query and each user.” We’re not so sure what that means, but the search results pages are very cool.

“If you look very closely, the small-town newspaper’s business model does and always has resembled a miniature version of the direction the big-city papers will eventually reach.”

That’s one of several gems in this splendidly written essay by ME Sprengelmeyer (right), a former Washington correspondent for the Rocky Mountain News and now the proud publisher and editor of the Guadalupe County Communicator, “the sixth-smallest weekly in the 36th most populous state.”

Writing on the blog of John Temple, former editor and publisher of the Rocky, Sprengelmeyer explains how his 18-month track across the US chasing the presidential candidates had the secondary objective of helping him find a new home in small-town journalism.

What he found was a century-old model that looks much like the future of big market dailies. ” They have tiny staffs – only what the day-to-day cash flow can sustain. They aren’t afraid of reader-generated content. They outsource many functions, such as printing and distribution…they keep their communities addicted to the print product because they…do not give away a whole lot of material for free.”

Most don’t make much money — in fact, some lose money — but that’s usually because they aren’t particularly well run. Big media organizations don’t bother with small markets and even if they cared, the cost of opening bureaus in thousands of small towns would cripple them.

Sprengelmeyerwrites about the “caravan of great journalists” who showed up to help him relaunch his paper. They spent the weekend strategizing, mapping the local area and redesigning the product. Then they left. “I cried some more,” Sprengelmeyer writes, “because then I was alone again, facing my first week on the job with the scariest boss in the world: myself.”

The account is an inspiring story of personal discovery and reinvention. It may make you cry, too.

The Times Regrets All the Errors

The New York Times published a jaw-dropping correction from its July 17 “appraisal” of Walter Cronkite’s career. Among the eight errors in the story where Wikipediable factoids such as the date of Martin Luther King Jr.’s assassination. Ombudsman Clark Hoyt files an explanation with this blunt assessment: “A television critic with a history of errors wrote hastily and failed to double-check her work…editors who should have been vigilant were not.” The critic, Alessandra Stanley, is apparently much admired for her intellectual coverage of television, but is so careless with facts that in 2005, “she was assigned a single copy editor responsible for checking her facts.” Those were the days…

According to Columbia Journalism Review, Stanley’s latest miscues have vaulted her into the top five most corrected journalists on the Times staff again and guaranteed her more special attention. Hoyt’s play-by-play is a fascinating glimpse into the operations of a journalistic institution and the mishaps that can bedevil even the most rigorous quality process.

It’s also a commentary upon editors’ willingness to overlook screw-ups because of perceived countervailing virtues. Be sure to read Mark Potts’ remarks upon the Times incident, in which he relates a few war stories of careless reporters he’s known. “I edited a reporter who had little or no concept of how to use commas; another who would submit long stories with gaps labeled ‘insert transitions here;’ and a third who infamously spelled a type of citrus fruit as ‘greatfruit,’” he writes. His account will make you alternately laugh and groan.

Daylife Draws Big-Media Attention

The New York Observer profiles Daylife, a startup that is partnering with media companies — and increasingly with commercial clients — to build cells of thematic content. With a small staff of 26, the New York City-based venture has already signed up the Washington Post, NPR and USA Today as clients. It takes a different approach to reporting the news. Editors are skilled not only at identifying important stories but also assembling webpages on the fly that combine all sorts of widgetized information.

The big difference between the Daylife approach and that of conventional media, explains founder Upendra Shardanand, is that Daylife assumes that news is a living and evolving organism, not a shrink-wrapped package. Investors include the odd pairing of The New York Times and Craig Newmark, whose Craigslist is considered the great Satan by many in the newspaper industry. Headlined “The Aggregator That Newspapers Like,” the story merits at least a quick read from publishers seeking reinvention, because these guys are doing something right.

Miscellany

Newspaper websites attracted more than 70 million visitors in June, who collectively spent 2.7 billion minutes browsing 3.5 billion pages, according to the Newspaper Association of America (NAA).  The figures are part of a new measurement methodology developed by Nielsen that measures a larger sample size and reports more granular information, according to an NAA press release.

The trade group has been on a campaign recently to stress the value of newspaper advertising.  It released a report last month showing that six in 10 US adults use newspapers to help make purchase decisions and that newspaper ads are more valuable than ads in any other medium.

The NAA’s timing may not be so great. Online ad spending declined 5% in the second quarter and the situation isn’t expected to improve much until the middle of next year, according to two reports released today. In the US, the rate of decline was 7%, or slightly above the global average. Classified ads fell 17% and display ads were down 12%. A J.P. Morgan report issued this morning said that search advertising, which has been one of the few bright spots in the market over the last year, dropped 2% in the second quarter, mainly due to poor results at Yahoo and AOL. Results were also dragged down by a 31% decline in ad sales at Monster.com.

Google has quietly quadrupled the number of articles in its News Archive Search service. The oldest newspaper digitized to date is this June 2, 1753 edition of the Halifax Gazette. Google hopes to make money by selling targeted advertising against the archives, a market that has traditionally been the source of some revenue for publishers themselves.

Two groups of former Los Angeles Times journalists have organized themselves into contract editorial groups selling journalism and photography. They’re called the Journalism Shop and Pro Photography Network.

The Boston Globe is said to be considering an option to become a nonprofit organization as a way to bail itself out of its current financial woes. Columnist Howie Carr of the rival Herald pens this vicious satire of the idea, calling his crosstown rivals “the bowtied bumkissers.” If you’re a disciple of editorial savagery, there is no more skilled practitioner than Carr.

The Fresno Bee will begin charging 29 cents a week for its TV supplement.

If you like the Amazon Kindle, you’re going to want to keep an eye on a new product from Britain’s Plastic Logic, which is due to launch early next year. The razor-thin reader will reportedly sell for around $300 and will have a flexible screen that makes it easy to carry. It’s also larger than the Kindle, which should warm the hearts of newspaper executives who don’t want to give up their broadsheet format. Here’s a video:

The New York Times Co. swung to an unexpected profit in the second quarter, although the turnaround had nothing to do with an improving business. Revenue at the company plunged 30%, which was even worse than the decline in the first quarter. The Times Co.’s success in reducing costs was the hero; expenses in the quarter were $450 million lower than a year ago. However, total revenues clocked in at $584 million, which was $19 million less than analysts expected.  The news did nothing to lift shares of the company’s stock, probably because analysts weren’t impressed by the sales performance. Even online revenues were down 22% because of weak recruitment advertising sales. The good news: The company has cut its debt from $1.3 billion to about $1 billion and is expected to slash that burden further with the expected sale of the New England News Group and the company’s share in the Boston Red Sox.

Sale of the New England News Group? Editor & Publisher‘s Jennifer Saba listened to the earnings call and heard evidence that the Times Co. may not be in such a hurry to sell the Globe after all. Cost cuts combined with circulation revenue increases have apparently put the enterprise on more stable ground.

McClatchy results were similar to the Times’, with ad revenue falling 30.2% and overall revenue tumbling 25.4% from a year earlier. Still, McClatchy managed to post a 43% increase in income on the back of stringent cost-cutting. Employment classifieds were off a gut-wrenching 62.5% as overall classified revenue fell 41% to $80 million from $135 million a year earlier. McClatchy CEO Gary Pruitt said digital advertising was up as a proportion of total ad revenues, but that’s only because total revenues were down so much.

Miscellany

Of all the tributes paid to Walter Cronkite over the last week, nothing topped this recollection from the Christian Science Monitor’s John Yemma. The story epitomizes Cronkite’s quiet greatness.

Meanwhile, Slate’s Jack Shafer takes a contrarian view, arguing that Cronkite’s legacy of trust emanated from a single survey of dubious quality combined with FCC regulations that required news broadcasters to remain impartial. Trust isn’t all it’s cracked up to be, says Shafer, noting that PBS’ critically acclaimed News Hour is actually losing viewers to the partisan and popular news programming of the cable channels.

Ken Doctor says Yahoo’s new deal with AT&T is bad news for the beleaguered newspaper industry. The partnership means AT&T’s 5,000 yellowpages.com ad sales people will now be out in the field selling small and mid-sized businesses on the glory of the Yahoo ad network. Until now, that role was filled almost exclusively by reps in the Yahoo’s 800-member newspaper network. Doctor says newspapers are finally getting religion about the merits of small-business advertising, a market that is estimated to exceed $25 billion annually. With national account display advertising falling like a stone, newspapers have to make a more compelling play for the local dry cleaner. Many of them are doing that, but the addition of 5,000 new competitors selling the same product can’t be much help.

The Ann Arbor News published its last daily edition last week, ending 174 years of continuous operation. The new Ann Arbor News will be a twice-weekly print newspaper with a continuously updated website.

The Associated Press will cut fees to print nad broadcast subscribers  by $45 million next year on top of $30 million in fee reductions already enacted this year. Total revenues are believed to have declined more than 6% this year and another big drop is forecast for 2010. A reduction of about 10% of its workforce is ongoing through the end of this year.

JD Lasica riffs on a meeting that we also attended last week with representatives of 10 mid-sized newspapers. The assembled editors and publishers were challenged to come up with ideas for reinventing their organizations and, while Lasica believes they still could have gone farther, he’s heartened by their innovation and positive thinking. One problem many participants complained about, however, is that they will go back to their managers and be challenged to show 25% first-year returns for their ideas. Some executives still just don’t get it.

Another group of Rocky Mountain News ex-pats is taking a run at a new-media publishing model with a paid-subscription component. The Rocky Mountain Independent debuted yesterday with a staff of 14 ex-Rocky employees and a determination not to repeat the mistakes that were made by InDenverTimes, a startup that struggles along on life support after badly missing its goal of recruiting 50,000 paying subscribers. Several members of the Independent staff also worked at InDenver Times.

The new site will be mostly free but with a small collection of columns and in-depth pieces behind a $4/mo. pay wall. Staffer Steve Foster (right), a former assistant sports editor at the Rocky Mountain News, likened the model to ESPN, which is mostly ad-supported but which also has a small amount of subscriber-only material for diehard sports enthusiasts. Foster said editorial content will focus on “larger, broader stories…We’re not as interested in following somebody on the campaign trail on a daily basis. We’d rather step back and assess someone’s chances in an election.” If anyone can detect a difference between that approach and a daily newspaper’s please let us know. Foster also said the Independent will run long pieces, too, which challenges conventional wisdom that online readers don’t have the attention span for that kind of material. The reason? As magazines and newspapers shrink, there’s less long-form journalism being published any more. That creates demand.

Some Good News, Some Bad News on Ad Front

ZenithOptimedia sees some light at the end of the tunnel for advertising. The plunge in global advertising appears to have reached bottom in the second quarter and is poised for some recovery. The agency also trimmed its forecast of a 6.9% decline in advertising spending for 2009. Growth will come mainly in online ads, which is the only segment to expand this year. Within that segment, search advertising has the greatest momentum, with expected growth of 20% this year. The big losers are newspaper and magazine advertising, which the agency expects to decline nearly 15% this year.

The pickup can’t come too soon for the beleaguered magazine industry, which has seen 279 titles close their doors this year already and another 43 end their print versions. The good news: there have also been 187 new launches. However, the trend is in the wrong direction, according to MediaFinder, which notes that in the second quarter alone, 77 magazines have launched while 184 have folded.

Overzealous WaPo Marketer Ruffles Feathers

Washington Post publisher Katharine Weymouth cancelled plans for a series of dinners at her home after an overzealous Post marketing executive issued flyers positioning the events as a way for sponsors to buy access to the paper’s journalists and members of Congress. Weymouth said the promotions “should never have happened… We’re not going to do any dinners that would impugn the integrity of the newsroom.” Post Editor Marcus Brauchli said he was “appalled” by the promotions that promised “an exclusive opportunity to participate in the health-care reform debate among the select few who will actually get it done.”

The whole affair was a platform for strong language on the part of participants and observers. Boston University’s Tom Fiedler said he was “astonished” at the Post’s “crossing a boundary line that seems to me painted so brightly white.” Charles Pelton, the Post marketing executive who created the flyers, said he had been “sloppy” in allowing them to go out. A spokesman for Rep. Jim Cooper, a Tennessee Democrat, called the dinner as advertised “a radioactive event.” Everyone flagellated themselves fully and promised not to let it happen again.

Miscellany

Gannett Blog has a letter that was apparently sent to employees of Gannett’s 10-paper Newspaper Network of Central Ohio that outlines plans to consolidate 10 regional newspapers under a single editor. The letter is from Linda Greiwe, publisher of the Newark (Ohio) Advocate. It outlines plans to consolidate page production into two locations and to form an “enterprise and data reporting team of two people” who will “write in-depth daily and project stories on issues that impact as many NNCO markets as possible.” Headcount will be reduced but the job losses are not part of Gannett’s larger 1,400-employee layoff announced last week.

Talking Points Memo, the fledgling new-journalism venture run by Josh Marshall, just took a venture funding round from Marc Andreessen, creator of the Netscape browser. The investment is small – less than $1 million – but it’s an important step for TPM, which has been bootstrap-funded until now. Marshall told TechCrunch the company is profitable and has 11 full-time employees. After this cash infusion, it will no doubt have more.

The bankrupt Tribune Co. may be under legal protection from debtors, but it isn’t protected from the realities of the market. The company’s revenue slid 23% in the first five months of the year and its profit margins have dwindled from 19% to 8% during that time, according to a Morningstar analysis. Tribune Co. doesn’t have to report financial results while in bankruptcy, so Morningstar derved the financial picture from an analysis of “operating receipts” reported so far this year. While the company is still cash flow positive, the declining margins would indicate that its debts will have to be significantly restructured to enable it to emerge from bankruptcy. The good news is that the company appears to be close to selling the Chicago Cubs to a local family for a reported $900 million. The Cubs have been for sale for two years. Tribune bought the team and the stadium for $20.5 million in 1981, representing a capital gain of nearly 4,500% in 28 years.

A new study finds that small newspapers are faring better than large ones, although only marginally. Media Post reports on the study by Inland Press that found that papers with less than 15,000 circulation actually saw revenue increases of 2.4% over the last five years. While that’s tiny, it’s a lot better than the 22% decline experienced by the overall newspaper business. However, the study also found that there’s plenty of pain in small markets, particularly at papers in the 25,000-to-50,000 circulation range that are under heavy debt loads. “If this trend continues, bankruptcy and sale or closure could follow for scores of newspapers, as the plague afflicting big metro dailies infects smaller markets,” it asserts. The problem many markets, of course, is debt. Heavy debt burdens are forcing big publishers to plow profits into loan payments instead of investing in their properties. Small publishers without much debt are better positioned overall to weather the crisis.

Trying to come up with someone to blame for the newspaper industry’s crisis? Try Macy’s. The department store chain has chopped more than half of its spending on newspaper advertising since 2005, Alan Mutter reports. He estimates the bite at $616 million annually. And considering that Macy’s it itself a chimera of smaller department store chains, the aggregate loss may be even larger. Macy’s was the second-largest newspaper advertiser in 2008, surpassed only by Verizon.

Tomorrow is the deadline to get in bids to buy the Boston Globe, so hurry!

The Houston Business Journal conducted a non-scientific poll asking readers, “If your local daily newspaper stopped its print edition, would you miss it?” Fifty-six percent said they wouldn’t, with many adding that biased coverage is their biggest complaint.

The San Francisco Chronicle shut down its presses on Sunday after more than 140 years in the printing business. The function has been outsourced to Transcontinental, Inc., the sixth largest printer in North America. More than 200 unionized pressmen lost their jobs.

The tsunami that swamped the newspaper industry in 2008 appears to be spreading to the magazine business. “Virtually every major magazine is experiencing an often-substantial decline in ad pages,” says MediaPost, citing year-to-date numbers.

“Substantial” is being kind. Look at these ad page declines in 2009: Among women’s titles, Allure, Lucky, and Vogue are all down over 30%, and W is down 44%. Among magazines targeting men, Power & Motoryacht is down 63%, Boating down 49%, Automobile down 43%, and Motor Trend and Road & Track both off more than 31%.

In the lifestyle category, Details is down 38%, Maxim off 33.5% and GQ down 32%. Spin down 28%, Vibe off 39%, Gourmet off 46% and Bon Appetit down 34.5%.

Of 118 titles tracked by Media Industry Newsletter (MIN) Online, only eight saw year-to-year growth from 2008 to 2009.  The rest continued a pattern of decline that began in 2007, and the rate of drop-off is accelerating.  Subscribers are also beginning to flee the venerable titles in droves. Among the titles seeing year-over-year circulation losses of more than 10% are Reader’s Digest, Ladies’ Home Journal, Entertainment Weekly, and Redbook. And that’s not factoring in the deeply discounted subscription rates that publishers are using to lure subscribers these days.

Last Gasp for Newsweek?

“Newsweek executives are gambling that advertisers will support the equivalent of shifting from beer to wine,” writes the Washington Post‘s Howard Kurtz, summing up a major redesign of the weekly newsmagazine that appeared this week.  Newsweek is cutting its circulation in half to 1.5 million, increasing both its subscription and cover prices and adopting an editorial profile looks like the Economist: lengthy, opinionated pieces analyzing national and international affairs.  Gone are the summaries of weekly news that have long defined the category.

“The staff doesn’t understand it,” says editor Jon Meacham, but Newsweek really has little choice.  The age of mass media is giving way to the era of targeting, and even 1.5 million subscribers may be too many to serve effectively. Newsweek is on a run rate to lose $20 million a quarter, so this is probably a last gasp for the 76-year-old newsmagazine. Time, with a circulation of 3.25 million, now stands alone in the category of broad, general purpose weeklies that once dominated the newsstands.  It’s still on track to deliver a “substantial profit,” this year, although even Time has also reduced its circulation base, although less dramatically than its competitor, from a peak of over 4 million.

It’s interesting that clicking on the link to the story in the Post, whose parent company owns Newsweek, delivers a pop-up ad for the Economist, which is the one weekly newsmagazine that seems to have gotten it right.

Wired Stuck in the Middle

And what about Wired, the hip digital lifestyle magazine that chronicled the dot-com revolution? Surely it has figured out how to bridge the print-digital divide. Nope. Its business is in the tank, and even Chris Anderson, the new-economy guru editor whose books have foreseen foretold the emergence of hyper targeted media and free content, doesn’t seem to know what to do.

Ad pages are off 50% this year, making Wired the third worst performer among the 150 magazines tracked by MIN. The problem may be systemic.  Wired serves the digerati, whose natural preference is online media.  The publication’s website is operated almost entirely independent of the magazine, and despite multiple design awards, the print version of Wired has been unable to find the popular appeal that could make it a million-circ powerhouse. At 704,000 subscribers, it’s one of the smallest magazines in the Condé Nast portfolio. It lacks the scale to support giant branding campaigns by luxury products, but is too large to deliver efficiency for smaller advertisers.  It’s an uncomfortable place to be: in the middle.  And Condé Nast, which has already shuttered two major titles this year, is probably not in the position to invest in it.

Asserting that the collapse of mainstream media demands the same urgency as “the threat of terrorism, pandemic, financial collapse or climate change,” two authors of a forthcoming book called Saving Journalism propose massive government intervention in the journalism crisis. Writing in the liberal journal The Nation, John Nichols and Robert McChesney say the recent debates over micro-payments and nonprofit funding is all well-intentioned, but these rescue scenarios don’t address the serious structural problems the US media faces. In essence, the public watchdog function is vanishing with nothing to replace it.

Media Post chart

This trend isn’t new; cost-cutting in the newsroom began in the 1970s when media tycoons began to form quasi-monopolies under the umbrella of government protection. Today, the media is a pathetic shadow of its former self, doing “almost no investigation into where the trillions of public dollars being spent by the Federal Reserve and Treasury are going but spar[ing] not a moment to update us on the ‘Octomom,'” the authors write.

Government already subsidizes media to the tune of tens of billions of dollars annually through mailing discounts, government advertising, monopoly broadcast, cable and satellite licenses and copyright protection. However, private interests have taken advantage of those subsidies to create wealth, and in the process are destroying the services they provide the public, Nichols and McChesney assert.

And they get specific about what needs to be done:

• Eliminate postage for periodicals that get less than 20% of their revenues from advertising;
• Give all Americans an annual tax credit for the first $200 they spend on daily newspapers or online sources that meet certain quality criteria;
• Allocate funds to enable every middle school, high school and college to have a well-funded student newspaper, a low-power FM radio station and accompanying substantial websites.

Face it: The old system is collapsing and won’t be resurrected, they say. We are entering a world in which government abuse and corporate greed will run rampant because no one is watching over the abusers. The business media completely misled the public about what was happening in Iraq and completely missed signs of financial disaster. And that was before 20,000 more journalists lost their jobs.

Although you need to take the left-wing source into account, this article is a pretty compelling argument for government intervention.  It is particularly chilling in its description of the impact that media cutbacks have already had on the public’s ability to understand the financial crisis and its own legislators’ actions.  The authors maintain that the estimated $20 billion cost of their proposal is a drop in the bucket compared to the amount being spent on the financial bailout.  The stretch may be in equating the urgency of the two problems.

Uphill Climb

Stewart: Millennials' Cronkite?

The Nation will have a battle convincing a skeptical American public that government support is the answer. Recent data from Rasmussen Reports paints a picture of a public that is largely disengaged from traditional media institutions while increasingly deriving its news from entertainment. A telephone survey of 1,000 Americans early this month found that 30% overall read a daily newspaper, but among respondents under 40, that percentage was only half as large. The survey also showed that newspaper websites have less “stickiness” than a product that arrives at the front door each day. Only 8% of US adults say they read their local paper’s website every day.

Meanwhile, one-third of Americans under 40 say Comedy Central’s Daily Show and Colbert Report are replacing traditional news outlets, which is slightly more than the 24% of Americans overall who think this is true. And there’s a popular opinion that this is a  good thing. “Thirty-nine percent of adults say programs of this nature are making Americans more informed about news events, while 21% believe they make people less informed,” the report says. Interestingly, Democrats are much more inclined to share this positive view than Republicans, by a margin of 48% to 28%.

Miscellany

The New York Times Co. imposed temporary 5% pay cuts for most employees in hopes of avoiding cuts to the newsroom staff.  Nevertheless, the Times also laid off 100 people in its business operations and said it would reduce freelancer spending and possibly consolidate some sections.  The pay cuts are subject to union agreement. Times management threatened to lay off 60 to 70 people out of its 1,300-person news staff if the union doesn’t concur.  The Times Co. cited an overall drop in advertising revenue of 13.1% in 2008 and 17.6% in the fourth quarter.  The pay reductions were described as temporary.  Salaries will revert to their previous level next year unless economic conditions improve fail to improve.  The company has already laid off more than 500 people this year.

The recession has clearly taken hold in the advertising business and the result is likely to be “the closing of more big regional daily newspapers and bankruptcy declarations from even more big publishers,” according to Media Post. Fourth-quarter 2008 results were a disaster, and that’s coming on top of two years of declines that seemed to get worse with each quarter. Newspaper classified advertising fell 39.2% overall in the quarter, with job-recruitment advertising plunging nearly 52%. Perhaps more ominous is that online revenue at newspaper sites was off  8% in the quarter, although online advertising is weak across the board right now.

The Rockingham News of southern New Hampshire has just published its final edition, and the weekly that has served the region for more than 40 years offers quite a lesson in its own history. Aubrey Bracco must have interviewed a couple of dozen local residents to get their recollections of what the paper meant to them, and he pens a loving and informative farewell.

Mike Hughes, president and creative director at the Martin Agency, pens an impassioned plea to his colleagues to support newspapers with their advertising dollars. “Our industry needs newspapers — but just as important, so does humankind,” he writes.  So stop following the latest trend and putting your advertising in the trendiest places.  “How many agencies aren’t selling newspaper advertising to their clients as hard as they should? It’s time for a wake-up call.” It’s an invigorating argument until you read the bio and see that Hughes’ employer is the “agency of record for the Newspaper Association of America.”

Writing on Mashable, Woody Lewis lists five ways newspapers can embrace social media more effectively. He notes that The New York Times now has an application programming interface that third parties can use to access its content from their programs. This is a cool idea. He also says partnerships with strong technology partners are a good idea.

Jay Rosen lists a dozen articles about journalism that he really thinks you should read, although we can’t fathom his top pick: Paul Starr’s laborious New Republic epic. Many of the others are excellent, though, and a few we hadn’t seen before.

And Finally…

We were thrilled to be included among the “Death of Newspapers” bloggers cited by Paul Dailing in Huffington Post. We agree with him that our self-absorbed, righteously indignant, told-you-so attitude is crap and that we have no answers to the problems facing the industry. We encourage you to boycott our book (available in fine bookstores everywhere) in support of his position. We should be ashamed of ourselves.

Five New York newspapers have banded together to exchange content in the largest such arrangement since the share-nicely craze began last year. The new group includes The Record of Hackensack, New Jersey, The Star-Ledger of Newark, the Times Union of Albany, the Buffalo News, and New York Daily News, which apparently organized the party.

Members will “assist each other in gathering news, sports and features materials, giving our readers access to more and expanded content from the top newspapers in each of the respective markets,” said Marc Kramer, CEO of the New York Daily News, in a very prepared statement.

No details were forthcoming, but the group issued a press release quoting top editors at all the participating papers making head-slapping “Why didn’t we think of this earlier?” statements.

The regional consortium trend was kicked off last April, when a group of five Ohio newspapers began posting all their daily stories on a private website where editors could pick and choose whatever they wanted. The Baltimore Sun and Washington Post are among other newspapers that have banded together in this way.

There was immediate speculation that the New York consortium was an excuse to lay off more newsroom employees. However, announced cutbacks at the Ohio Five haven’t been any greater than at other newspaper companies. The handshake deal is more likely aimed at setting members free from the Associated Press, which has been an industry whipping boy for the past year because of its license fees.

We’re interested in what you are seeing. If you subscribe to the Cleveland Plain Dealer, Columbus Dispatch, Toledo Blade, Cincinnati Enquirer and/or Akron Beacon Journal, please leave a omment and tell us if you’ve seen any noticeable difference in quality since those papers began sharing stories nearly a year ago.

State Aid and a Posthumous Polk

Blethen - hanging on

Publishers from the state of Washington pleaded with legislators for a special tax break yesterday, saying the severe recession has dealt a body blow to their already shaky business model. “Some of us, like The Seattle Times, are literally holding on by our fingertips today,” said Times publisher Frank Blethen, who presumably was not literally holding in by his fingertips at that very moment.

Publishers appeared before the state senate Ways and Means Committee to support a bill that would give them a tax break through 2015. While the measure would cost the state about $8 billion, lawmakers appear willing to help. The bill has bipartisan support.

In an ironic demonstration of the seriousness of the problems in Seattle, the Times covered the story with AP wire copy. 

Speaking of Seattle, the Post-Intelligencer may become the first newspaper to win a major journalism award posthumously. Mark Fitzgerald reports that Eric Nalder, the P-I‘s chief investigative reporter, has won a George Polk Award for his two-part series “Demoted to Private,” about waste by government military contractors. The P-I is due to close March 15 if a buyer can’t be found, meaning that at the April 15 ceremony, the award may be bestowed on a newspaper that no longer exists.

P.S. The Pacific Northwest Newspaper Guild will hold a meeting next week to see if it can rustle up enough enthusiasm to initiate an employee buyout of the P-I. In more robust economic times this idea might stand a chance, but it’s hard to believe employees are going to dig into their depleted savings to buy a money-losing operation.

Miscellany

Having already laid of 12% of its staff if 2008, The Milwaukee Journal-Sentinel is now freezing wages and may impose a one-week furlough. Print revenue was down 10.4% in the fourth quarter and “We’ve seen that deterioration accelerate in the first weeks of 2009,”said publisher Betsy Brenner.

Journal Register Co.’s mass execution of scores of weekly newspapers got little media coverage because not that many people will miss the Millbrook Round Table. But an unsigned editorial in the Odessa American delivers a poignant message about the impact a local weekly’s closure has on a community. 

A blog called Brazosport News has word that the Houston Chronicle is about to cut 10% of its staff. It even has a memo from the publisher saying so. We can find no coverage of this story anywhere else.

And Finally…

Yes we can. We just found it on Twitter. And if you came here looking for breaking news about the latest layoffs and cutbacks, you’re wasting your time. This is a daily blog, which is so last year. Instead, subscribe to The Media is Dying on Twitter. This anonymous microblogger is so speedy at documenting gloom and doom that he/she puts Romenesko to shame.  Fortunately for Romenesko, he gets more than 140 characters.