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.

Jeff vonKaenel has spent more than 30 years in alternative weekly publishing and he has some interesting observations about the paradox of publishing success. The CEO of the News & Review newspapers in central California is a student of media history, and he notes that the trend toward consolidation and monopolization that began in the 1970s dumbed down newspapers’ editorial product and set them up for failure when the rules changed.

The real demon was blandness. Alternative weekly publishers know that advertisers don’t like to run next to controversial editorial content. This is one market dynamic that keeps the alternative press small. Monopoly newspaper publishers aren’t small, however. They thrive on big-ticket schedules built on co-op ad dollars from giant national brands. They can’t afford to piss off million-dollar clients, so they intentionally keep the product inoffensive.

“It’s safer to make an outrageous statement about Saddam Hussein than to make a mild criticism of a local car dealer,” vonKaenel writes. “It’s something newspapers don’t like to admit. It has always mattered who pays the bills.” This is true. How many times can you remember the automotive section of your daily newspaper offering advice on how to get a better deal on a used car?

This dilemma creates a scenario that we’ve seen play out again and again: big industries and big companies collapse hard on the heels of their most successful years. That’s because success creates risk-aversion which leads to mediocre products (see General Motors). That strategy works fine until the rules change, and it served newspaper publishers very well for more than 30 years. But, as Bill Wyman pointed out in a recent essay, it also led them to create mediocre, inoffensive and bland products. When a low-cost alternative medium emerged, newspapers were poorly equipped to retain readers because, well, they sucked.

VanKaenel’s essay has one interesting twist: It implies that the current fascination with hyperlocal media could be in for a hard reality check. Noting that alternative weeklies’ coverage of music and nightlife topics has been heavily influenced by the willingness of those kinds of advertisers to run in those papers, he suggests that hyperlocal publishing will by driven by market forces. In other words, don’t expect a lot of critical stories about local merchants if those merchants are paying the bills. This reality actually could drive new-media publishers to broaden their scope. After all, they can’t afford to piss off thousand-dollar clients.

Orange County Register Owner in Bankruptcy

The small print of the bankruptcy filing by Freedom Communications Holdings Inc. contains a startling figure: circulation at the Orange Country Register is off 23% in the past four years. How can any business survive when it’s on a run rate to lose more than half its customers in a decade? The problem is made worse by the fact that the newspaper business model scales down so badly. The Register can’t cut back by 23% on printing or delivery expenses because of the high fixed costs involved. That means that operational expenses must be chopped to a disproportionate degree in order to make up for the shortfall. That comes directly out of the quality of the product, which leads to reader dissatisfaction, which creates bigger circulation declines.

This is why the newspaper industry is in a death spiral. The only way to turn the situation around is to dramatically improve the quality of the product, but economics demand that quality must take the biggest hit in order to keep the operation afloat. And so another noble publishing franchise falls into the hands of its bankers. They are always the owners of last resort for businesses whom, in their misguided greed, they chose to support.

Divide by 2

Did we say spiral? Alan Mutter has some sobering statistics. He projects that US newspaper revenues will fall $10 billion this year, making the industry about half the size it was in 1986. The most devastating collapse has been in classified advertising. For example, recruitment advertising was a billion-dollar quarterly business as recently as 2006. In the most recent quarter, it generated $202 million in revenue. The story is similar in automotive and real-estate advertising. While the recession has hit these categories hard, it’s hard to believe that they will ever again resemble their former size now that the Web provides nearly limitless advertising inventory.

The Providence Journal is taking hyper local to heart. The paper has moved all its local coverage to the front and banished national and international news to a separate section. The move may be either brilliant or brain-dead, but at least the ProJo is doing something, writes David Scharfenberg in the Boston Phoenix. The ProJo has long been considered one of the best small-city newspapers, with a history of strength in local communities and a commitment to good reporting. However, recent layoffs and cutbacks have forced it to learn to do more with less. Suburban bureaus have been closed and the newsroom has been reorganized around five thematic desks, including public policy and justice. It’s unclear whether the strategy will work, but Scharfenberg quotes pundits saying that if any paper can figure out how to reinvent itself as a journal of local events, it’s this one.

Last April Fool’s Day, the Manchester Guardian published a very funny spoof story about its plans to reinvent the whole paper as a collection of Twitter posts. It turns out the idea may not have been so far off the mark. Check out Tewspaper, a localized news service composed entirely of Twitter feeds. Tewspaper currently serves five cities and hopes to expand, according to its “about” page. The service monitors the Twittersphere for relevant local information and posts the entire tweet, along with a link. Graphics are mainly stock photos and clip art and the whole site has a bit of a cheesy look and feel, but we have to give its creator points for innovation.

US newspaper advertising revenues shrank by 29% in the second quarter as the industry’s slide worsened. Total ad sales were $6.8 billion, down from $9.6 billion in last year’s second quarter. The declines were most pronounced in bread-and-butter ad categories that have been hit hard by the recession: recruitment ad sales were off 66%, real estate was down 46% and automotive advertising fell 43%. Print revenue fell 30% and online advertising dropped 16%

Chris Lake has a list of 25 things journalists can do to future-proof their careers. While many of his recommendations are obvious (“Start a blog” and “Embrace Twitter”), the piece is kind of a laundry list of Web 2.0 phenomena that are driving the evolution of journalism and a worthwhile read for journalists who are wondering what to do next. It’s also delightfully British. One recommendation: “Big up yourself.”

Among the biggest circulation gainers in the UK over the last 12 months are thelondonpaper, a Murdoch holding that the publisher plans to close, and the Observer, a Sunday companion to the Guardian that has been singled out as a potential candidate for closure by its owner. Several other papers saw healthy readership gains as British papers continue to defy the declining circulation trends taking place across the pond.

Jeff Jarvis is revealing some of the work he and his students have been doing at the City University of New York on New Business Models for News. He posts about some of the new expectations publishers should have if they expect to compete in the flattened information landscape of the future.

Among them are to partner with sites that can deliver traffic in sufficient volume to support advertising. “In the link economy, value is created by he who creates content and she who delivers audience,” Jarvis writes. Another new rule is to look at the website as a platform, not a newspaper. He notes that some of the world’s largest news organizations have application programming interfaces that developers can use to plug into their sites and to repurpose content elsewhere.

Publishers should also specialize coverage to draw small but highly engaged audiences. Finally, adopt the tactics of social networking sites, which facilitate communication between their members. Jarvis points to some recent number-crunching by Martin Langeveld that demonstrates that the Newspaper Association of America’s much ballyhooed newspaper Web traffic statistics are but a rounding error compared to traffic to really big websites. When you look at the amount of time people spend on newspaper sites, the news is even worse.

Applications to the Columbia Graduate School of Journalism are up 38%, and the flood of interest in journalism education isn’t confined to New York City, reports the CJR blog. “At the University of Maryland’s journalism school, applications increased 25 percent; at Stanford, they jumped 20 percent; at NYU they were up 6 percent.” The editors ask why the sudden surge of interest in these programs at a time of cutbacks and crisis for mainstream media? Only two comments so far. Please add your own.

Britain is looking for the first time at the possible loss of a major newspaper, and last-ditch efforts are under way to save it. The 218-year-old Observer is reportedly being evaluated for closure by its owner, the Guardian Media Group. Editors Weblog tells of a campaign called “Observer SOS” that’s being mounted by the Press Gazette, a small monthly magazine for journalists. Former European Minister Denis MacShane has also written letters to 100 Members of Parliament urging them to sign a letter to the paper’s owner imploring it to continue publishing the Observer. Press Gazette also says that the the Birmingham Post may be the first major UK daily to reduce frequency. Its editor says that going weekly is probably the best option for survival.

Is the free daily newspaper model really invalid, as the Financial Times said last week? Piet Bakker begs to differ. The author of one of the best blogs about free newspapers says the reason Rupert Murdoch is closing thelondonpaper is because London already has three other free dailies, in addition to a dozen paid newspapers. There are only so many commuters to read them, Bakker notes, and recessions tend to hit free-subscription titles the hardest. “There certainly is room for a free paper as the young urban non-paid audience is growing and still valuable for advertisers,” he writes. “Room for one at least and two perhaps, but not for three or four.”

You probably know of Roger Ebert as a legendary film critic, but did you know he is also an alcoholic? Ebert reveals this little-known fact (Wikipedia’s Ebert entry has no mention of it) in a long blog post marking his 30^th year of sobriety. It’s a remarkable piece of writing by a man who has had more than his share of struggles the last few years. Ebert writes glowingly of the value of Alcoholics Anonymous in his victory over alcohol and shares a few memories of notable meetings in the people in them. Our favorite:

I was on a 10 p.m. newscast on one of the local stations. The anchor was an A.A. member. So was one of the reporters. After we got off work, we went to the 11 p.m. meeting at the Mustard Seed. There were maybe a dozen others. The chairperson asked if anyone was attending their first meeting. A guy said, “I am. But I should be in a psych ward. I was just watching the news, and right now I’m hallucinating that three of those people are in this room.

Bob Garfield of NPR’s “On The Media” interviews media superblogger Jeff Jarvis and asks “Can journalism be sustained in the top 25 markets if all the dailies fold?

The question was prompted by a recent project by the City University of New York Graduate School Of Journalism that created economic models for next-generation news organizations. Jarvis says a decentralized, hyperlocal newsgathering infrastructure is not only plausible but quite profitable. Some hyperlocal bloggers are already pulling in up to $200,000 annually in revenue, he says, and that’s without the sophisticated funding and advertising mechanisms that are now being developed. We’d like to talk to one of these people.

The metropolitan news organization of the future will be smaller but no less profitable than that of today, Jarvis predicts. His study foresees a full-time staff of about 45 people with substantial contributions from locals. “It needs to work more collaboratively with bloggers and other locals,” he says. All together, a next-generation metro newsroom could have about 275 regular contributors.

“At the end of three years, our research shows that these businesses bring in margins that are reminiscent of the glory days of newspapers,” Jarvis states. “However, they’re much smaller businesses. A 20% margin on a $30 million business is not the same as on a $400 million business. But it is profitable, and that means it’s sustainable.”

Ever the optimist, Jarvis further states that journalism can become “better and richer” in the new model, Although there’s going to be some chaos in the process, “I believe we can actually improve journalism, not just save it,” he says.

They won’t be doing either in Loudoun, Va. The Washington Post Co. is closing its experimental hyperlocal site, the LoudounExtra, after two years, saying that the business “was not a sustainable model.” There were extenuating factors, however. The executives who launched the site left soon after startup and LoudounExtra never received the appropriate attention from the struggling parent company. One of those execs Rob Curley, moved on to bigger and better things in Las Vegas.

Miscellany

The Chicago Sun-Times Media Group (STMG) may be a few weeks from insolvency. The owner of the Sun-Times newspaper has just $19.3 million in cash left and is burning nearly $1 million per week, according to court documents. Chairman Jeremy Halbreich said he has been talking with several potential buyers who are more focused on cost structure than cash on hand.  STMG has been in Chapter 11 bankruptcy since March 31. If it runs out of money, it would probably have to abruptly shut down without offering severance or other transitional amenities.

The Red Wing (Minn.) Republican Eagle will cut back from five days to two days a week. “Goodhue County’s No. 1 news Web site” will continue to be updated daily. The paper said the cutbacks were being made in order to save money and to focus  reporting on its local market.

In the economically devastated region of South Florida, the 55-year-old Boca Raton News published its last print edition yesterday. The paper had previously cut back from five days per week to three. No employees will be laid off, but the paper’s offices will be closed and everyone will work from home. Perhaps this is precisely what Jeff Jarvis has in mind.

“The New York Times is quietly seeking a buyer for its Santa Rosa (Calif.) Press Democrat,” said the anonymous message that landed in our inbox. Now you know as much as we do.

And finally…

As we enter the last two weeks of summer and news all but grinds to a halt, bloggers are turning to the offbeat and bizarre. Former Baltimore Sun copy chief John McIntyre reviews a third and expanded edition of “The F Word“ (Oxford University Press, 270 pages, $11.53 on Amazon), a book that is all about, well, the “F word.” Author Jesse Sheidlower apparently scoured 500 years of English literature to trace the evolution of everyone’s favorite expletive from its mid-15th century origins on the European continent to Jon Stewart on The Daily Show. In the course of his research, Mr. Sheidlower “read an astonishing amount of Victorian pornography,” McIntyre concludes. We can’t wait till Google gets around to putting it all on line.

We’ve been reading with some dismay recently that the US no longer ranks in the top 25 countries on high school achievement test scores. We don’t want to believe that, but then we see videos like this monologue by a resident of Santa Cruz, Calif. testifying before the city Council last year about, we think, vegetables. It speaks for itself.  (Via Free From Editors.)

It hurts to read Bill Wyman’s blunt, sometimes savage piece on Five Key Reasons Why Newspapers Are Failing, but the veteran journalist says some things that need to be said. Unlike recent analyses that have mainly focused on the industry’s business challenges, Wyman aims his guns squarely at the editors and reporters whom he believes fostered a culture of risk-aversion and self-absorption even as the need for change grew urgent. Although the piece is heavy on anecdotes and light on statistical evidence, we found ourselves nodding in agreement frequently as Wyman ticked off a list of editorial missteps.

Perhaps the most damning point in the 9,000-word opus is when the author lists headlines from a “recent” (actually, it was well over a year ago) features section of an unnamed local newspaper (actually, it was the Arizona Republic). They include: “Post office food drive,” “Fight Crohn’s and colitis,” “Mom and Estában,” “Healthful salsa non-guilty pleasure,” and

“Great gifts for teachers.” The point: “There was nothing there of remote interest [to] just about any sentient being. But that’s not what the paper’s editors were aiming for. The point is that there was nothing there that could possibly offend anyone.”

Wyman hammers home this point repeatedly. In his view, advertisers and editors joined in an unholy alliance decades ago in which watchdog journalism was sacrificed to reliable and profitable ad contracts, stable circulation and don’t-rock-the-boat blandness. As a consequence, the guiding principle in editorial departments changed from informing the public to offending as few people as possible. Causing a reader to cancel a subscription was the ultimate sin. Better to under-inform than to antagonize.

As a longtime arts critic, Wyman has some stories to back up the premise. He tells of one arts editor who instructed him to avoid negativity in reviews because readers didn’t want to “hear bad things about their favorite artists over breakfast.” Reviews sections in local papers are almost unfailing positive, or at worst blasé, he notes. Arts sections are filled out with snippets from those stanchions of informational blandness: Press releases.

“Let’s be honest. Most newspapers in the U.S. aren’t watchdogs…Most papers are instead lapdogs, and the metaphorical lap they sit in isn’t even that of powerful interests like their advertisers…The real tyrant the papers served was the tender sensibilities of their readers,” he writes.

Tangled Web

The piece is equally damning in its criticism of newspaper websites, which Wyman believes are too often ponderous, difficult to use and inwardly focused. Search results return rivers of irrelevant promotions that the user doesn’t care about and that exist only to serve the interests of internal constituents, he says. External links are far too rare and readability is managed by people whose expertise is mostly in print. As a result, newspaper websites are some of the least useful properties on the Web, which is a shame because their content should be some of the most useful.

Wyman’s piece makes valuable reading, if only to hammer home the problems of a change-averse culture that still exists in many metro dailies. In part, that attitude is a hangover of management greed that has steadily pared back resources in the interest of maintaining 20% profit tax margins. However, the evils of management are a horse has been beaten to death pretty thoroughly by now. What’s different about Wyman’s perspective is that he takes editors and reporters to step to task for not doing more with the resources they have. Pack journalism and the not-invented-here mentality frustrate efforts at meaningful change. Last week’s acquisition of EveryBlock by Microsoft and MSNBC – rather than by a newspaper company — is just another indication that these businesses don’t move quickly enough.

Bloggers’ Harsh Glare

One insight that we found particularly illuminating is Wyman’s observation that the freewheeling — some would say reckless — culture of the blogosphere has cast a harsh light on the mediocrity that many newspapers have dished out for years. “The Web mercilessly exposes the flaccidness of the content of most papers. It creates a straightjacket for them: As they desperately bland themselves out on land, the material they have on hand to impress in cyberspace is correspondingly pallid,” he writes.

This point deserves special attention. Journalists like to trash talk bloggers for lacking basic journalism skills, but for all its weaknesses, the blogosphere is nothing if not interesting. Put another way, the sudden availability of massive choice exposes boring information for what it is. Big media could get away with mediocrity for many years because readers had no choice. Now that they do, the weakness of the products is magnified.

Wyman’s piece is far from perfect, being at times more tirade than exposé. But it is thought-provoking and — dare we say it — interesting. To hear him tell it, that’s a characteristic that’s all too often missing from the publications he criticizes.

Miscellany

After six quarters of stomachturning losses, newspaper companies finally reported some stability in the most recent quarter, and even a couple of upside surprises. The Wall Street Journal asks if the recovery is sustainable and largely concludes that it isn’t. One unexpected factor in the industry’s recent good fortune has been the plummeting price of paper, which is down nearly 40% in the last nine months. But the Journal expects those prices to come back as the market winnows out some weaker players. It also points to recent research indicating that marketers are more likely to cut newspaper and direct-mail spending than any other line item in the name of increasing their interactive budgets.

Rupert Murdoch’s British newspaper company plans to close the free daily thelondonpaper after reporting a ₤13 million pretax loss. Thelondonpaper is one of two afternoon free dailies, which are targeted mainly at young commuters. It lost ₤12.9 million in the fiscal year ended June 2008 on revenue of just ₤14.1 million. About 60 jobs are affected, though it’s not clear how many people will lose their jobs.

Marty Petty, a Pulitzer Prize-winning journalist-turned-successful-publisher, will leave the St. Petersburg Times after nine years. Calling the apparently voluntary move a “business decision” that reflects the shrinking size of the newspaper, Petty said management must adjust along with employees. Petty was a member of two Pulitzer Prize-winning teams at the Kansas City Star and Times in 1982. She later joined the Hartford Courant, where she rose to the position of associate publisher. She was named the Tampa Bay Business Journal’s BusinessWoman of the Year for media in 2005.

What do journalists and porn stars have in common? Plenty, according to a short piece in New York magazine. Jessica Pressler writes that pornographers who were making good money online just a couple of years ago are suddenly confronting a new threat from amateur videographers who are giving away all the sex you can watch for free. Once highly paid porn stars are complaining that they can’t find work and there’s little new blood coming into the system. Pressler suggests that maybe The New York Times ought to steal a page from the porn industry by focusing more on stars than on programs. That means orchestrating the careers and various activities of its best reporters instead of simply publishing their stuff.

Did you know they still do paste-up at the San Diego Union-Tribune? That’s just one of the revelations in a story about the new openness of the U-T’s management, an openness that is apparently playing very well with employees. Having laid off more than 300 people since taking control of the daily in May, Platinum Equity is now forecasting a profit of $5 million this year, which would be a major turnaround from the $8 million the paper was on track to lose when new management arrived.

The extent of the new ownership’s transparency about the paper’s finances and operations apparently surprised and pleased staffers, who had been privy to almost no financial information under former owners the Copley family. They learned that the U-T’s revenues have dropped 53% since 2006 while profitability has plummeted from $67 million that year to the expected $8 million loss this year. They also learned that the paper has shed nearly half its staff in the last 21 months. However, cuts like that are what set the stage for a return to profitability. Staffers apparently liked what they heard. They told Voice of San Diego that Platinum’s decisiveness was a welcome change from the plodding pace of change under the Copleys. Now they need to work on getting rid of those paste-up boards.

Platinum’s early success at the U-T is apparently not typical of private equity firms. Yesterday’s blockbuster announcement that Reader’s Digest is bankrupt cast a harsh spotlight on Ripplewood Holdings, which bought the publisher for $1.6 billion in 2007 and which has now seen that entire investment wiped out by bankruptcy. Reader’s Digest magazine, which was once a coffee-table staple, has suffered circulation declines of more than half over the last 30 years and 40% in the last decade. The company is staggering under $2.2 billion in debt. Under the proposed reorganization, creditors will now own 92.5% of the company, which publishes more than 100 titles. Even after the debt is restructured, though, Readers Digest will owe four times its annual earnings to lenders.

Meanwhile, the owner of Philadelphia’s two largest newspapers has proposed an audacious plan to get creditors off his back. Brian Tierney wants to swap $300 million in debt for $90 million in cash, real estate and bankruptcy costs. Under the proposed deal, creditors would get little ownership stake in Philadelphia Newspaper Holdings, while the company would walk away from most of its debt. Tierney appears to be betting that the alternative of total insolvency will scare lenders into accepting the deal, but an attorney for the creditors calls the plan a “horrible proposal.”

Miscellany

The Financial Times began charging for access to its website in 2002, and history is vindicating the London-based publisher. With media leaders like Rupert Murdoch now openly advocating for pay walls, the FT is stepping up its experimentation with new paid-content models. It plans to add a micropayment system for access to individual articles and it recently launched an online newsletter for investors in China that costs $4,138 a year for a subscription. The FT newspaper has only 117,000 paid online subscribers, compared to more than one million for The Wall Street Journal, but it charges $300 a year for Web access. CEO John Ridding says he’s pleased that the industry is finally coming around to seeing things the way the FT has seen them for many years. “Quality journalism has to be paid for,” he tells The New York Times.

A partnership of Microsoft and MSNBC made off with EveryBlock and Alan Mutter can’t quite believe it. “If ever there were an application designed to fast-forward newspapers into at least the late 20th Century, then this was it,” he writes. Funded by a Knight Foundation grant, EveryBlock (screen grab at right) is perhaps the nation’s most visible experiment in hyperlocal news. It covers 15 cities with news focused on tight geographic segments. Under Microsoft/MSNBC ownership, expect that coverage to expand dramatically. Microsoft was actually an early innovator in hyperlocal publishing with its Sidewalk city guides more than a decade ago. Sidewalk bombed, but the concept may simply have been ahead of its time.

Things continue to rock and roll under new ownership at the Waco Tribune. A few weeks ago, the paper made headlines when the new owner added the words “In God We Trust” under the front-page logo. Now it has jettisoned rock musician and gun activist Ted Nugent as a columnist after Nugent refused to tone down invective and personal attacks in a weekly guest column he writes. Editor Carlos Sanchez makes it clear that he was somewhat reluctant to carry out the new owner’s orders to reprimand Nugent, but he was stunned and outraged by the tactics Nugent used to lodge his protests.

The AP has one of those charming throwback pieces about The Budget, a 119-year-old newspaper that serves Amish and Mennonite communities and which seems to have none of the problems or pressures of its Internet-addled counterparts. In fact, the 20,000 readers seem to be quite militant about keeping The Budget in print and delivered by mail to their homes each week. The Budget’s owners and editors aren’t Amish, but they’re careful not to offend their pious readership. Ads for alcohol and tobacco aren’t accepted and much of the content consists of homespun diary entries submitted by a network of unpaid correspondents. To the geographically dispersed Amish, The Budget is kind of a hard-copy Facebook. It’s the way they keep up to date on births, deaths and the price of wheat. Circulation has stayed strong even during the economic downturn.

Mark Potts elucidates a criticism of pack journalism that we’ve been expressing for some time: Why do news organizations send so many people to cover the same event?  Potts observes that the Tribune Company “had 14 reporters, columnists and photogs at this year’s Super Bowl, even though neither Super Bowl team came from a city where Tribune actually has a newspaper.” Tribune Co. has apparently wised up and is consolidating some sports beats. Potts also points to the Dayton Daily News, which recently forced its Cincinnati Reds beat reporter into retirement. Potts estimates the paper was spending about $250,000 a year for the 37-year veteran to cover a baseball team 55 miles away that was already being covered by the AP. Perhaps that money would be better used to double up on coverage of local sports, although Potts doubts that’s what’ll happen.

We feel the same way whenever we watch a political convention or a Presidential press conference. Hundreds of journalists travel from far away, stay at expensive hotels and drink top-shelf booze to report the same things everyone can already see on TV. Is it possible that Super Bowl trips are used as rewards for treasured staffers? Could a couple of nice dinners out or a $1,000 bonus accomplish the same objective at less cost? We’re just asking.

Although we outsource most of our layoff coverage to the vastly superior work of Erica Smith, we occasionally see news that merits a comment. Such is the case in San Diego, where anyone who thought Platinum Equity would be the white knight to preserve jobs at the Union-Tribune should have those dreams dashed by the latest round of layoffs. The new owner cut 112 jobs this week on top of 192 announced shortly after Platinum assumed control in May. That means Platinum has laid off nearly 30% of the U-T’s workforce in less than four months. The story on the U-T website reads like a press release, mixing news of the job cuts with upbeat talk about investments in new pagination systems and improvements in local reporting. There is no effort to analyze the impact of Platinum Equity’s ownership on the staff or the product they produce, and no comments about the human impact. Perhaps that’s being held for a day two story.

We also have to give the Journal News of Westchester County a nod for their innovative idea of firing all 288 employees and inviting them to re-apply for 218 jobs. It’s not layoff, it’s a job fair! Seriously, the company plans to make all rehiring decisions final by the week of August 24, which means that managers must conduct 218 interviews within the next two weeks. Just shoot us. Fortunately, August is a slow week in the publishing business.

Journalism Online, LLC, the company formed by Steven Brill to help newspapers charge for content, said 506 publications have now signed up for its affiliate network. In a press release carefully crafted to avoid the gaze of antitrust regulators, the company said its customers are eyeing annual charges of $50 to $100 per subscriber “with little diminution of overall page views or online ad revenue.” Neat trick.

Sites with one million monthly page views can expect to earn an additional $5 million to $10 million annually through reader revenue, which figures out to about 40 to 80 cents per page view. Wow, if any plan can generate 40 cents per page view, sign us up! Journalism Online was cautious to stress that each individual publisher will make its own decisions about what, and whether, to charge. “We’re giving them all the dials to turn…but they will be the ones turning the dials,” Brill said.

Perhaps the best argument we’ve seen against citizen journalism is the parade of crazies showing up to criticize the Obama health care plan. The thought that some of these people could acquire a following is truly unsettling. Sacramento Bee cartoonist Rex Babin illustrates this brilliantly, provoking the usual rash of political diatribes.

In our interview last week, Ken Doctor commented, ““Newspapers missed the search market and are still paying the price.” A confidential Associated Press document dramatizes how true that statement is.

The evidence is buried in an otherwise dry discussion of measures the AP plans to take to track and monetize its proprietary content. Beginning on page five, the document recounts Web activity in the hours following the first reports of Michael Jackson’s death. It contrasts this to Web user behavior following the 1997 death of Princess Diana and the September 11, 2001 terrorist attacks.

The contrast is startling. When the earlier blockbuster stories broke, Web users mostly went to branded websites and continually refreshed the pages for updates. When Jackson died, however, the behavior took on a new form. “Two of the biggest beneficiaries of that traffic bonanza were Twitter and Wikipedia, a couple of digital natives that would have been viewed as very unlikely news competitors a few years ago,” the AP document observes.

Unholy Troika

The new pattern described by AP looks like this: People learn of new information on Twitter, they search on Google and then head to Wikipedia. The result: “Google News was the single largest beneficiary of traffic for ‘Michael Jackson’ searches, attracting 7.1% of the clicks in the four-week period measured. Wikipedia was a close second, receiving 6.8%…the only traditional media outlet in the top 10 was tenth at 1.5%.” In fact, “The Los Angeles Times, at the heart of the story, managed to capture [just] .79% of the ‘Michael Jackson’ search traffic. It was the lone American newspaper site in the top 20.”

Consider the implications of this behavioral change. In the new troika of news dissemination, newspapers are almost completely boxed out of the equation. Even CNN, which was the big daddy of online news just a few years ago, has been resoundingly thumped by Wikipedia. The only player in the triumvirate that makes a profit is Google News, which produces no original content at all. It drew nearly 5 times the traffic of the top performing for-profit content site.

Taking Back the News

The AP document goes on to outline a plan to reclaim ownership of intellectual property through a code wrapper that makes content trackable, a common tagging and indexing scheme and enhanced publisher reports. Ultimately, the report fingers Wikipedia as the biggest rival to news organizations.

Zachary Seward at Nieman Journalism Lab has been tracking and analyzing the content. The big news for publishers is that the AP indicates that it will begin withholding some information from even its paying subscribers in order to drive traffic to a central AP website. Seward quotes an AP legal representative trying to untangle the vagaries in the document. Seward concludes that “The AP would essentially be relying on its vast network of members to provide search engine optimization for its most unique content.” Nearly 50 comments have been logged in the last 48 hours, and we suspect this is only the beginning of the debate.”

As publishers debate whether hyperlocal websites will be the news organizations of the future, GrowthSpur is preparing for that eventuality.

The startup, which was co-conceived by Backfence founder Mark Potts and a cast of industry all-stars that includes super-blogger Jeff Jarvis, is preparing for the new media world. It’s one in which armies of neighborhood bloggers, local events sites, community discussion forums and small-town print and online newspaper publishers will fill the gap created by the passing of media giants. It’s building a back-end business system that it hopes will enable these small publishers to quickly monetize their businesses while building a network that multiplies opportunity for every member.

The company, which was announced less than two weeks ago, is targeting a US local advertising market estimated at $25 billion that has been devilishly difficult for publishers to monetize.

Second Try

GrowthSpur CEO Mark Potts

CEO Potts has been here before. Backfence was one of the earliest and most notable experiments in citizen journalism. The venture raised $3 million and expanded to 13 local communities before collapsing in 2007. One problem was that Backfence was ahead of its time. With GrowthSpur, Potts thinks his team has got the timing right. The influx of thousands of journalists who have been laid off over the past two years has created a petri dish for online innovation. But it’s also created a gap: few of those journalists know the first thing about selling advertising.

“People are starting to build replacements for newspapers and we plan to support them,” he says. “We think a local site in a decent-sized town should bring in $100,000 to $200,000 a year.”

How does Potts arrive at that figure when most small-town newspapers struggle just to make a small profit? The GrowthSpur founders think that best-of-breed sales tactics, combined with a robust network of regional advertising outlets, can make the difference.

QuickBooks For Community Media

Media blogger Jeff Jarvis will advise GrowthSpur

The startup is building a technology platform and local network that fledgling publishers can easily tap to generate and manage revenue. It’s kind of a QuickBooks for community publishers, Potts says. The platform, which is still in development, will give publishers the wherewithal to manage everything from ad serving to invoicing while connected them to a network of nearby sites where customers can also place advertising.

That feature is one of GrowthSpur’s more intriguing ideas. Potts’ Backfence experience taught him that many local businesses want to advertise in a wider geographic radius than that provided by their local newspaper. Most community publishers lack the connections or infrastructure to place their client’s ads outside of the outlets they control. The result is a frustrating experience for advertisers and lost revenue for the publishers.

In the GrowthSpur model, the more publishers who adopt the platform, the more powerful the ad network. “The idea is that we can get you on the local mommy blog, the food blog and the site in the next town,” he says.

Sticking to Its Knitting

GrowthSpur is being driven by a small but elite group of publishing veterans. The venture is currently self-funded but is entertaining outside financing. GrowthSpur doesn’t have pretensions of being all things to all publishers. It’s strictly a sales and business management engine with no content management or editorial production features. In addition to technology, the company will bundle advisory services and deliver enhancements like do-it-yourself ad creation and search engine optimization through partnerships. The venture will make money through revenues shares. There will be no upfront costs to the community publishers and no payments to GrowthSpur unless revenue is coming in.

The size of the market opportunity naturally begs the question of why existing newspaper companies haven’t done more to take advantage of it.  Potts response is simple: “A lot of the big metro dailies haven’t even tried,” he says. “It’s too inefficient for them to sell below about a $10,000 campaign level. The money’s out there but many of big guys haven’t tried to get it.”

GrowthSpur is going to try. The service formally launches early next year, but the company is already fielding an “enormous” number of inquiries and has put some basic tools and services in place, Potts says. Although principals like Potts and Jarvis have been vocal critics of the newspaper establishment, GrowthSpur is born of a sense of optimism.

“This is an incredible time for journalism,” Potts says. “We’re going to see a fascinating multiplication of voices.”