The chart (from Alan Mutter) says it all. The U.S. newspaper industry experienced its ninth consecutive quarter of falling print revenue, according to the Newspaper Association of America. Worse is that the rate of decline is accelerating and online revenue is now dropping, too. Although the second quarter decline was only 2.4%, it’s a stark contrast to the 20%+ growth rates the rest of the industry is experiencing.

Classified advertising is a disaster. Look at these numbers: Real estate ad revenue down 36% to $619 million; recruitment advertising down 40% to $600 million; automotive classifieds down 23% to $580 million. The lifeblood of newspaper profitability has historically been classified advertising and the blood is gushing away.

This has a ripple effect on online ads, which had previously been the industry’s sole bright spot. MediaPost puts its finger on the problem: “Unfortunately, most of the growth in [newspaper] online revenues was due to ‘up-sells’ from print classified listings. As the volume of print listings declines at an ever-faster pace, that means there are fewer opportunities for online ‘up-sells.'”

TechCrunch chips in: “Advertisers trained to buy bundled ads are more likely to drop the entire bundle when making budget cuts.”

Inflation-adjusted newspaper revenues

These trends continue to have all the makings of a classic death spiral: accelerating revenue declines create alarm among traditional customers who start fleeing in droves out of fear of being associated with a dying business. Print revenue declines have accelerated each quarter for the last two years, with the most profitable parts of the business taking the biggest hits. For example, automotive advertising, which totaled $5.2 billion in 2003, is now on track to do less than $2.5 billion in business this year. That’s more than a 50% fall without accounting for inflation.

If you do account for inflation, it gets worse. As the above chart by Tim Windsor shows, inflation-adjusted newspaper revenues are now below 1982 levels (click here for a readable version). The right side of that chart looks like a cliff, which is what the newspaper industry is hurtling toward.

There are simply no bright spots left. Between a recession, Internet competition and dramatically increased newsprint costs, this is a perfect storm. Quoting TechCrunch: “At this rate, there won’t be an industry left by the end of next year.”

Or, as one comment on Mutter’s blog put it, “The best news recently at our paper: the cleaning staff determined that the mold growing under the Coke machine is not hazardous.”

The New York Sun, which was launched in the shadow of 9/11 with the mission of providing a politically conservative alternative to The New York Times, is on its last legs. An eloquent column by Editor Seth Lipsky says the Sun, which is published on weekdays, will have to shut down at the end of this month if the owners can’t find financial backing. Interestingly, the Sun tried to compete with the worldly Times by being hyper-local, a strategy that is sometimes cited as the salvation of the newspaper industry. “It would put Manhattan and New York state news on its front page (in contrast to the Times’ emphasis on national and international news over local issues),” reads a very good description on Wikipedia. While the paper claims a readership of 150,000, its actual daily sales are less than 15,000. Talks are underway with potential partners and investors to continue publishing the Sun, but time is clearly running short.

Crisis is breeding cooperation in Philadelphia, where Newspaper Guild members from the Inquirer and Daily News voted to forego a scheduled $25-a-week pay hike for at least a year. The owner of those two papers is in serious danger of defaulting on its debt. “We want to see this company thrive, now and in the future,” said the Guild’s administrative officer.

There’s a new group on Facebook called Newspaper Escape Plan. “The newspaper industry is an abusive relationship,” writes Martin Gee, who created the group. “We keep getting beat up but we keep coming back because we love him.” The group has signed up 1,300 members in less than three weeks. Discussion forums are quiet but the wall is busy. (via Robb Montgomery).

The weekly Raytown (KanMo.) Tribune is no more. The paper stopped the presses after 83 years, citing the same pressures everyone else cites. Most of its 11,000 circulation was free, but there were a couple of thousand paid subscribers. If you want to see something depressing, take a look at its home page.

The independent Daily Orange campus newspaper at Syracuse University will stop printing on Fridays. However, its problems appear to be an exception to the rule. The president of the College Newspaper Business and Advertising Managers organization is quoted in this AP story saying that campus newspaper ad revenues actually rose 15% in 2007. Apparently, it’s all about focus.

Layoff Log

The Oklahoma City Oklahoman will cut 150 positions, beginning with an early retirement offer to 102 of its over-55 workforce and making up the difference through layoffs. The paper employs 1,100 people. The publisher noted that newsprint costs are up 40 percent.

The Providence (R.I.) Journal, which is often cited as an example of a paper that has thrived in a competitive market by staying true to its community roots, will lay off an unspecified number of employees. Owner A.H. Belo had hoped to avoid cuts through a buyout offer, but there weren’t enough takers. There’ll also be layoffs at The Dallas Morning News (50 jobs) and the Riverside (Calif.) Press-Enterprise (30 positions).

The Missoulian of Montana will lay off four full-time and three part-time employees. No word on whether that’s a lot for Montana’s third-largest daily.

One of those employees is going to work for the Ravalli Republic in Hamilton. But the Republic is also laying off three full-time and three part-time people. But it’s also planning to make another newsroom hire in the next few weeks. Which is a lot to digest for an organization with only 17 employees.

Clarification on yesterday’s reference to a vaguely worded item in Editor & Publisher about the Raleigh News & Observer: The paper is offering buyouts to 40% of its employees. It doesn’t expect to cut 40% of its staff, although it may get there if business doesn’t improve. “We’re not anywhere near where we thought we were going to be on the revenue side,” says the publisher. The N&O is also consolidating some sections to save on printing.

And Finally…

How will technology innovation support journalism and participatory democracy? Heck, we don’t know. We’re just a blog. But the Media Giraffe project will delve into that issue at a conference in Philadelphia Oct. 23-25. It’s called Rebooting the News, and the focus is on how educators can respond to the alarming flight of young people from traditional news media. Registration is downright cheap at $105.

Here’s a cost-saving idea: pay your best employees to leave the company. Sound dumb? More than 20 newspaper companies have done just that during the past year.

Buyouts are a popular alternative to layoffs because they’re voluntary and they avoid a lot of anguish. From a management perspective, though, buyouts are a terrible idea. They reward the employees who are the most ambitious and whose skills are the most marketable. The people who apply for buyouts tend to be the people who are confident they can find work elsewhere. In most cases, these are precisely the people a company should want to keep.

A layoff is a far more effective management tool than a buyout. It’s a way to slim down the organization from the excesses brought on by past prosperity. During good times, organizations tend to grow fat and inefficient. Growth masks a lot of problems and no one wants to cut staff when they don’t have to. As a result, organizations are inclined to hold on to marginal performers and sustain questionable jobs because the alternative is too painful. Nearly every company does this. It’s human nature to tolerate a certain level of inefficiency in order to avoid the emotional turmoil of depriving someone of his livelihood.

Invariably, a slowdown comes and companies have to cut back. This hurts, but it’s also an opportunity to make adjustments to the organizational structure to prepare for new growth. It’s a way to get rid of under-performing employees and unnecessary jobs while also redoubling the commitment to top performers. Good companies reward their best people even during difficult times. Across-the-board cutbacks make no sense because they penalize your best people. Why would you want to do that?

A buyout takes bad management to a new level. In effect, the company is saying, “You’ve taken initiative to develop skills that are in demand in our industry. We’ve paid you to do this. Now please go away. And take this bonus with you.”

Buyouts are very popular with ambitious employees who are seeking new opportunity. Who can blame them? Wouldn’t you rather get paid to look for a new job than do it in your spare time? People actually slept in the lobby of the San Diego Union-Tribune this week in order to take advantage of a limited buyout offer. Those are motivated folks. Could management possibly find a more productive way to harness that ambition?

Sorry if this sounds calculating and insensitive, but businesses aren’t charities. They need to run as efficiently as they can, particularly at a time like this. Buyouts are simply a way of dodging unpleasantness by paying good people to leave the company. They’re bad management.

Miscellany

They’re piling on the ailing San Francisco Chronicle. Clint Reilly digs up some past dirt about the early days of Hearst ownership. Of course, this happened eight years ago, so keep it in perspective. One passage did strike a chord, though: “I repeatedly witnessed bizarre behavior at newspapers that no other business would ever allow. Some reporters and columnists were frequently drunk or on drugs on the job. Such conduct was not simply tolerated, it was condoned. These third-rate Hunter Thompsons screwed up appointments and scrambled facts but were never called to account for their mistakes, incivility or disruptive behavior.” Sound familiar to anyone?

The Wall Street Journal is redoubling its commitment to print with plans to launch WSJ. magazine this weekend. The coming-out party gave new Journal managing editor Robert Thomson the chance to take a shot at the rival New York Times and to use the word “eschatological” in a sentence.

Here’s a little good news for magazine publishers: rich people are actually reading more magazines. Research by Ipsos Mendelsohn shows that folks making more than $100,000 a year said they read 15.3 publications on average compared to 15.1 in 2003. People who make more than $250,000 read an average of 24 print publications. Favorite titles: People, National Geographic, Sports Illustrated, Time, Newsweek and Southern Living. Four in five rich folks also shop at Wal-Mart.

Is the Raleigh News & Observer really seeking to cut 40% of its staff? That’s what this short item in Editor & Publisher appears to say. If so, this would be the paper’s third round of job cuts in the past year. Oh, and it’s a buyout.

Journalists are at each other’s throats in the Windy City. It all started last Tuesday, when provocative Chicago Sun-Times sports columnist Jay Mariotti quit the paper after 17 years and only a few weeks after signing a lucrative three-year contract. Mariotti’s epiphany apparently was a trip to the Beijing Olympics, where he observed that most of the journalists in attendance were “there writing for Web sites.”

After resigning, Mariotti launched into attacks on his former employer and the newspaper business in general, which he said is dying. The Sun-Times and the Tribune probably won’t survive, he said. “To see what has happened in this business. … I don’t want to go down with it,” he told the Tribune.

Mariotti has clearly made some enemies with his tough-guy style, and critics didn’t hesitate to pile on. Film critic Roger Ebert abandoned his usual soft style to post a blistering open letter, concluding, “On your way out, don’t let the door bang you on the ass.” CBS Chicago caught up with several of Mariotti’s colleagues, who didn’t mince words. “We wish Jay well and will miss him — not personally, of course — but in the sense of noticing he is no longer here, at least for a few days,” said Sun-Times editor Michael Cooke. White Sox Manager Ozzie Guillen chipped in “Am I enjoying this? Yes.” There are more good quotes in the CBS account.

Meanwhile, the Cubs have lost four in a row, and the team’s NL Central division lead has shrunk to four games. There is no apparent correlation with Mariotti’s departure.

San Juan Star Gave No Clue of Shutdown Plans

Aug. 29, 2008 was the final issue of the San Juan Star

Here’s the front page of the last issue of the San Juan Star, which shut down abruptly last Friday after nearly 50 years. This leaves the island of Puerto Rico with no English-language daily. The paper gave no indication that it would cease publishing. On page three of that day’s issue, there was a small announcement that frequency would be scaled back to five days a week (above right). Employees said they were unaware of the change in plans until a general announcement was made.

Miscellany

More proof that adversity makes strange bedfellows: The Miami Herald, Palm Beach County Sun-Sentinel and the Palm Beach Post will share basic news stories with each other while continuing to compete vigorously in the South Florida market they serve. The experiment will last for three months, after which the participants will decide if they want to continue.

2008 Newspaper Job Cuts Total Nearly 4,000; Source: Erica Smith

The Des Moines Register has laid off 12 staffers and frozen another 11 open positions. The publisher is being unusually open about who’s losing jobs. They include a 30-year veteran farm reporter and a top feature writer. Daily circulation is down 20% since 1994 and Sunday circulation is off nearly 30%.

After trying to make a go of it as a daily newspaper for five years, the Noblesville (Inc.) Daily Times gave up the ghost last week and shut its doors, idling 24 full-time employees. Owner Schurz Corp. had tried to sell the paper for the last six months but was unable to find a buyer. The Daily Times had increased from weekly to daily frequency in 2003. The company also shut down the twice-monthly Westfield Times.

Apparently, a lot of central California residents think that just because the Modesto Bee will now be printed in Sacramento, the paper is going away. Its editor says that couldn’t be further from the truth.

The Arizona Republic is shedding 27 newsroom employees on top of 35 pressroom workers laid off earlier this month. Gannett Blog claims the paper has 2,700 employees, which makes these reductions a drop in the bucket compared to the typical industry cutbacks of about 10% of the workforce. Blog visitors say the mood at the Republic is horrible. “Morale here is so low people who weren’t offered buyouts congratulated those who took them,” writes one.

Following the lead by several papers recently to reduce “soft” news and features, the News & Record of Greensboro, N.C. will cut its second editorial page and eliminate its dedicated book reviews section. Editorial Page Editor Allen Johnson doesn’t mince words: “We won’t even attempt to pretend that these changes will give you a bigger, better opinion section. They won’t. And you know that.”

Your editor has been in Puerto Rico for the past week, a vacation that happened to coincide with the publication of the last issue of the San Juan Star. Puerto Rico’s only English-language paper shut down after almost 50 years, blaming the union for not agreeing to pay cuts that would have kept it afloat.  Union officials said the closure surprised them, since management had most recently led them to believe that frequency would be scaled back to five days a week.

The Star won the Pulitzer Prize for editorial writing in 1961 and once turned down Hunter S. Thompson’s application to become its sports editor. Thompson later created a fictionalized version of the paper setting for his novel, The Rum Diary.

The Minneapolis Star Tribune has canceled its Associated Press subscription, and it probably won’t be the last paper to do so. The Strib is one of several papers that have complained loudly about the AP’s pricing policies, which they say constitute an onerous tax at a time when member newspapers are already bleeding red ink. Now it’s given the wire service the required two-year notice of its intention to cancel.

More papers are likely to follow. In Ohio, a group of dailies has banded together to share stories, a move driven in part by a desire to cut dependence on the AP. Many papers rely on the wire service to deliver national and international coverage, but with the recent push to go “hyper-local,” the need for such information is declining. Readers already get most of that stuff online anyway, and with its liberal syndication agreements with various online portals, the AP is actually competing with its member companies.

If newspapers begin opting out of their AP subscriptions, it could have interesting ripple effects for the AP and its members. Alan Mutter has noted that the AP gets two-thirds of its stories from member papers. If it loses those sources, then the wire service will have to invest in its own staff to make up for the shortfall. That means the AP has to make a choice between cutting its license fees or losing members and the content that drives its other licensing arrangements. However, as David Brauer notes, “If AP gets less cash and copy from the Strib and cuts its local presence, Minnesota’s news ecosystem could take a big hit. The wire service’s copy fleshes out local papers big and small; a diminished AP weakens a key line of defense for cash-strapped newsrooms.”

In short, the AP is engaged in a stare-down with its member newspapers. Will more defections like that of the Star Tribune force it to blink?

The industry’s dire financial situation has got newspapers thinking creatively about how to avoid cutting into bone. Editor & Publisher continues its recent reporting on this issue, focusing on creative content-sharing and partnership agreements that many papers are hatching to deliver quality information to readers while abandoning traditional rivalries. Adversity is the mother of invention, and some editors are reporting that by abandoning their “not invented here” bias, they’re minimizing the impact of layoffs and cost cuts.

Miscellany

Almost two-thirds of the top 30 newspaper websites had double-digit percentage increases in year-over-year unique traffic in July, according Nielsen Online. Ottaway Newspapers led the good news parade with a gain of 167%. The Los Angeles Times was up 66% and The Wall Street Journal Online advanced 94%. Editor & Publisher didn’t try to explain the dramatic improvements, but the combination of high gas prices driving more at-home “staycations” along with interest in the presidential campaign and Summer Olympics probably all played a role.

University of South Carolina journalism professor Ernest Wiggins was curious about how newspaper websites handle comments from readers, so he looked at 10 of the largest titles to see if there was any consensus. His findings: not really. All of the newspapers he reviewed post some language intended to keep discussions civil, and a minority actually screen contributions. Beyond that, practices range from the New York Daily News‘ genteel “Be nice” plea to the Los Angeles Times‘ draconian warning that “A VIOLATION OF THESE POSTING RULES MAY BE REFERRED TO LAW ENFORCEMENT AUTHORITIES.” He cites advice from two Poynter faculty as a rule of thumb: encourage comments, state the purpose of the forum but don’t threaten people.

Alan Mutter says the distressed financial condition of American newspapers could make them appealing buyout targets to foreign interests with a political agenda. He focuses, in particular, on Arab and Asian governments that are flush with cash in overseas investment funds and that could benefit from having bully pulpits in the US market. The Unification Church-owned Washington Times set the precedent by using a newspaper to champion its conservative political causes and there are no rules that would prevent other overseas buyers from doing the same thing. At current valuations, newspaper companies would be a rounding error for some of these funds, which boast assets of as much as $400 billion. If overseas interests bought big into the US market, it could lead us back to the early days of newspapering, when publications typically took strong positions on the issues and made no effort to deliver “just the facts” journalism, he says.

The Honolulu Advertiser is again moving to cut headcount, even as it pursues rocky negotiations with the Newspaper Guild. The company will eliminate 27 positions at its Pacific Media Publications community newspaper group and consolidate seven community newspapers into three. The company had earlier cut 54 jobs at the Advertiser. A Guild spokesman said the move “certainly does not reflect a move toward trying to get a contract.”

The Chicago Sun-Times is seeking more staff cuts on top of the 40 positions eliminated earlier this year as part of a $50 million expense reduction campaign. The editor didn’t specify a reduction target, but said the cuts are driven by the “awful” advertising climate. Two weeks ago, parent Sun-Times Media Group announced that it was outsourcing its inbound classified advertising operations after reporting a dismal $38 million loss in the second quarter.

Sam Zell says Tribune Co. will be able to cover its debts for at least the next seven years. Buried in a Bloomberg story about Zell’s forecasts for the real estate market is the tycoon’s comment that “We don’t have any real maturities that aren’t covered until 2015.” Zell also said he expects to sell the Chicago Cubs and Wrigley field later this year for “a lot” of money.

At Tribune Co.’s namesake newspaper, social media has come of age. Huffington Post’s Todd Andrlik writes that a four-person social media team has come up with strategies to monitor news reports on Twitter, establish communities on Facebook and generally improve its reader interaction. A recent page three story about a bomb threat at Daley Center bomb originated as a Twitter message to Colonel Tribune, the paper’s online avatar that’s a throwback to colorful onetime owner Col. Robert R. McCormick. Sharing content through social networks has also resulted in an immediate 8% uptick in site traffic.

CNN has joined with the free Metro papers in New York, Boston and Philadelphia to deliver columns by CNN correspondents in select Metro editions every Friday for 12 weeks. Their stories began appearing last Friday. The deal expands an existing agreement that provides 70 Metro editions with content produced by CNN exclusively for Metro.

The Sacramento and Fresno Bee newspapers offered buyouts to employees and held out the possibility of layoffs if unspecified cost-reduction goals aren’t met. Sacramento’s buyout offer covers 55 percent of its full-time employees and a smaller number of part-timers, including most editorial employees. The Fresno Bee‘s offer is open to most of its full-time workers. The publisher called the current situation, “some of the worst economic times we’ve faced.” Both papers cut staff just two months ago.

The Gainesville Sun and Ocala Star-Banner will merge news operations, with the editor of the Sun running the show. News, copy desk, design, layout and pagination for both papers will move to Gainesville. Executives at both papers stressed their intent to remain committed to their local communities. However, they also said jobs will be cut at each newspaper, although specifics haven’t been determined. (via Romenesko).

Management and union executives are cooperating in Philadelphia as the owners of the Philadelphia Inquirer and Daily News seeks to cut staff amid a growing financial crisis. Responding to union concerns, the owners are targeting newsroom managers for cuts instead of unionized reporters. No numbers were specified. Standard & Poor’s recently reported, that owner Philadelphia Media Holdings (PMH) was trading at less than 50 cents on the dollar, meaning that the risk of bankruptcy is high. PMH missed a key interest payment in June, forcing it into a forbearance agreement with its creditors that lasts through September 10th.

Miscellany

GateHouse Media Inc. and American Community Newspapers (ACN) could become the third and fourth newspaper companies to be delisted from a major stock exchange this year.  ACN disclosed on Friday that it has been warned that it may be delisted from the American Stock Exchange for failing to file a 10-Q report. ACN publishes more than 100 community papers and shoppers. The company has until Sept. 4 to file a report telling how it will come into compliance. GateHouse has been notified by the New York Stock Exchange that it could be delisted if it doesn’t get its stock price over $1 a share (it’s at 60 cents now) and maintain a market capitalization above $75 million.

Yahoo Japan is experimenting with user-generated editorial content. The Japanese Yahoo News page now features large amounts of material suggested and edited by readers. It’s a variation on Wikipedia and Google’s Knol, which are two experiments in community journalism. Unlike those two examples, though, Yahoo requires user editors to apply and take a test before they can contribute. (via Editors Weblog)

The Editor of the McDowell (N.C.) News remembers fondly the days when a good monkey story merited a trip to Tokyo and a phalanx of support staff. Now all people want to read about is presidential candidates and their love children. Sheesh.

And Finally…

Editors at the annoyingly elitist Wine Spectator must be red-faced after their magazine bestowed a coveted Award of Excellence on a non-existent restaurant named Osteria L’Intrepido. The prank was dreamed up by Robin Goldstein, author of The Wine Trials, as part of a research project. Goldstein concocted a website featuring a menu assembled from recipes found in an Italian cookbook and submitted it as an entry in the magazine’s contest, along with a $250 entry fee. To twist the knife a little, he put together a reserve wine list “largely chosen from among some of the lowest-scoring Italian wines in Wine Spectator over the past few decades.” His blog entry lists some of the reviews Wine Spectator published of his choices:

“Sweet and cloying. Smells like bug spray.”

“Smells barnyardy and tastes decayed.”

“Turpentine. Medium-bodied, with hard, acidic character.”

These reviews apparently missed the fact-checkers at the magazine, which awarded it a top honor anyway. We suppose $250 will buy you a lot these days.

Chicago Tribune Editor Gerry Kern sent a memo to staffers last week that challenges some shibboleths of journalism and appears to advocate for giving readers more entertainment at the expense of traditional community affairs.

The message reads like a mission statement. “We clearly are moving toward a 24/7 online business that also publishes in print once a day,” Kern says. While acknowledging the value of traditional fare like public service and investigative reporting, he also stresses the need to delight and entertain.

The nut graph is about halfway down, where Kerns relates that “One of the most revealing insights from recent research is how little excitement some people feel about their daily encounter with us. Many of our regular readers regard us like the electric company or water utility. Yes, everyone wants electricity and water and it’s a pain to do without them. But your soul just isn’t stirred by the sight of working faucet or wall socket.

“Without an engaged audience that finds value in what we offer, we cannot succeed. Journalism is not an abstraction that exists apart from the audience. It must deliver what the audience needs and wants.”

This sounds like a not-too-subtle message that Tribune staff need to take themselves a little less seriously and listen to their readers a little more closely.  If that means giving them record reviews and Sudoku puzzles, so be it.  The Tribune is about to debut a new design along the lines of its Tribune Co. brethren.  If their lead is any indication, you’ll see a lot more color and a little less gravity.

The St. Louis Post-Dispatch has apparently got the same religion.  The paper is upgrading its features sections with more emphasis on local entertainment and leisure destinations while merging its news sections and cutting back on commentary.

Also, the Tribune has a new managing editor with a track record of success addressing young audiences. Jane Hirt was the founding co-editor of Redeye a free tabloid aimed at Chicago commuters that is considered one of the Tribune’s more successful recent ventures.

All this may be too little too late. Fitch Ratings on Friday cut the debt rating of Tribune Co. to “CCC” and said default is a “real possibility.”  The assessment comes just a week after Tribune CEO Sam Zell said the company had paid down $807 million of borrowing to meet its obligations for the rest of the year.  Fitch isn’t very positive, though.  The firm believes lenders can expect to get between 31 and 50 cents per dollar of investment.

Too Much Time Spent on “Time Spent”

Editor & Publisher has its regular exclusive report on the amount of time people spend reading newspaper sites. At first blush, the numbers look bad. “Nearly half of the top 30 newspaper sites, ranked by total number of unique users, fell year-over-year,” E&P says. “Fourteen dropped slightly or significantly.”

E&P has been reporting the Nielsen numbers dutifully since Nielsen said it would rely on “time spent” as the most important attribute of newspaper website stickiness a year ago, but a review of some historical numbers shows that this metric has its limitations. Look at the examples below, taken from previous E&P accounts.

While these numbers aren’t necessarily indicative of the overall health of the industry, they demonstrate how unreliable the “time spent” figure can be. Look at The Wall Street Journal, which presumably has enough readers to make its figures consistent.  What on earth happened this past May to cause such a drop-off in reader interest?  And what happened over the next three months to cause a revival?

Similarly, the Houston Chronicle tanked in July, 2007 but recovered spectacularly in the year since.  And are readers in Minnesota staying home this summer cruising the Internet instead of driving?  How else to explain such a dramatic recovery?  We’re sure the people Philly.com would like to know the answer.

Here’s some interesting perspective on the subject.

Miscellany

Media General’s publishing revenue fell nearly 19% in July compared to a year ago as the sour Florida economy continue to eat away at its business.  Classified advertising revenue plunged 32.5% with real estate falling an incredible 47%.  Online revenue was up a scant 5.7%,

The Milwaukee Journal Sentinel laid off 22 employees to reach its goal of 130 total job cuts after a voluntary buyout program failed to achieve the magic number.

Valleywag digs up some old screenshots in a trip down memory lane as it tells of “5 ways the newspapers botched the Web.”  Reading the account, you get the sense that there were some smart people who saw the opportunities in online publishing as early as 1983 but cluelessness about how people would use the Web combined with a compulsion to protect their print franchises scuttled the early innovations.  It’s a depressing account of opportunities lost.

Your obedient editor will be on vacation for a few days and posting less frequently, to the relief of newspaper executives everywhere.

Editor & Publisher has a 3,000-word special report on the newspaper industry’s prospects that doesn’t turn up much new ground but documents the panic that has set in across the business. Everything is on the table, industry execs now say. In the coming year, expect a lot of papers to eliminate money-losing Monday, Tuesday and Saturday editions, dump their classified advertising sections and combine forces with rivals or outsource overseas. Recent redesigns like those at the South Florida Sun-Sentinel are intended to be produced by smaller staffs. Some papers consider giving up on courting the youth audience and decide to just focus on giving their older readers something they’ll want to consume for the next 25 years.

The problem is that newspaper are tinkerers, not re-inventers, the piece concludes. Their core skills are mis-matched to the enormity of the task that faces them, and the unrelenting declines in business have left them with no option to think through bigger changes. Noting the waning interest in the the “Newspaper Next” program, the American Press Institute’s Drew Davis quotes one board member as saying, “We are like drowning people, who are treading water as fast as we can. And you people are throwing life preservers and we can’t even get our hands out of the water to reach them.”

In its first year, Newspaper Next reached some 6,000 people, but since API rolled out its 2.0 version last February, the response has not been anywhere near that, says Davis. The biggest newspaper companies, he adds, are most conspicuous in their absence.
Not everyone is as dour as the people quoted by E&P. Kevin Slimp reports on a recent meeting by a group of consultants, speakers and trainers who call themselves the Media Specialists Group. They discussed the future of newspapers and, while they agree that big dailies are mostly toast, they’re generally optimistic about circulation trends among regional and focused titles. Expect to see a lot more free distribution and segmentation, they say. Newspaper publishers will also do more contract printing and use their delivery channels to distribute advertising.

Decline is Worse Than Numbers Indicate

Vin Crosbie submits the most lucid, dispassionate and coherent explanation for the decline of the US newspaper business that we’ve seen since Eric Alterman’s groundbreaking piece in The New Yorker this spring. The industry’s problem isn’t the Internet, he argues, it’s the steady loss of respect for and contact with its readers, a trend that began more than 30 years ago. While absolute circulation has declined only 14.5% since 1970, the real decline is more like 45% when adjusted for population growth. Only a third of Americans say they read a newspaper yesterday and only 46% read one regularly, down from 71% in 1992.

Crosbie skillfully skewers the online readership data that newspaper execs use to obscure their problems, pointing out that readers who visit four or five times a month can’t be compared to subscribers. He also dismisses the so-called “passalong rate,” which dying publications like to use to inflate circulation numbers

In the end, he predicts that half of all American dailies will be gone – both online and in print – by the end of the next decade. He promises more analysis of what went wrong in essays today and next week.

Is Yahoo Friend or Foe?

First, Yahoo created an ad consortium and invited newspapers in so they could sip from the cup of online spending. Now it’s competing with its partners. In an Agence France Presse story (carried, ironically, on Yahoo News), Glenn Chapman reports that Yahoo is here to stay as a primary news source. It’s got feet on the street in Beijing for the Olympics (following the herd there) and has scored coups with recent interviews with South Korean president Lee Myung-bak and George W. Bush, who gave his first Internet-only interview to Yahoo. One of its tactics is apparently to ask readers to submit questions during interviews with dignitaries, which is kind of cool, when you think about it. (via Josh Catone).

For some reason, the industry’s troubles are hitting particularly hard in New Jersey. Newsday gathers up the bad news: Gannett just 120 jobs in six Jersey papers. The owner of the Newark Star-Ledger says the paper is on track to lose $30 million to $40 million this year. And the Hackensack Record just sold its building and will turn most of its staff reporters into “mobile journalists,” which is a new euphemism for “stringer.”

Novel Concept

Jason Mandell writes about a writer’s novel approach to sustaining investigative journalism using a community support model. David Cohn, a former tech and science reporter for Wired, has created Spot.Us, a place where journalists can float ideas for investigative reporting pieces and get funded by visitors, who vote with their wallets for the stories they like. The results are then syndicated to partner outlets. “If you get 100 people to give just $15, that’s enough to pay a journalist to do a story on something that will benefit the community,” Cohn told Mandell. Spot.US is partially funded, ironically, by Knight Foundation. Knight-Ridder was forced to sell out to McClatchy two years ago and has suffered along with its acquirer. Maybe Spot.Us is a way to begin to build at least a shell of a new vision for investigative journalism.

Layoff Log

How bad is morale at USA Today? The Gannett Blog floats the possibility that the national daily, which has so far escaped outright layoffs, may finally be on the chopping block. What’s most interesting, though, is the 50+ comments, most of them from people purporting to be USA Today employees, describing the dour mood in the halls and speculating about a big meeting next week with the publisher. There’s also an interesting account of a recent internal meeting at which tensions flared between print and online staff. Apparently, online is now the favored child at McPaper and some of the print veterans resent it.

Also,

• The Fort Worth Star-Telegram is now offering a buyout to “the majority of regular full-time employees.” This is its third job reduction this year.
• The Rockford (Ill.) Register Star laid off 13 employees and closed its Springfield bureau. A round of voluntary buyouts this spring wasn’t enough. from April to June that resulted in the departure of 17 employees. The publisher wouldn’t rule out further cuts.
• Warren Buffett’s Buffalo News may be somewhat insulated by Berkshire Hathaway’s might, but it’s still offering a small buyout. The package is good, though, starting at $60,000 and going up. Staffers were surprised to learn of the offer first on the newspaper’s website, though.
• The Burlington (Vt.) Free Press is laying off six people, which is only about 3% of its staff. A 50-year-old columnist says he “didn’t see it coming.”
• The St. Petersburg Times avoided layoffs as 200 people accepted a buyout. The early-retirement package took out 40 percent of the paper’s staff of 50-and-older employees.

And Finally…

Slate’s Jack Shafer Ron Rosenbaum hates pencil puzzles, and his rant against a practice that he sees growing in popularity is worth reading just for gems like his characterization of Sudoku as the “mind-numbing hillbilly heroin of the white-collar class.” Shafer Rosenbaum picks up copies of Will Shortz’s Funniest Crossword Puzzles and let’s the first “down” clues speak for themselves:

4. Highly ornamented style

5. Tell ___ glance

Whoa, dude, you’re killin’ me!

Puzzle addicts could cure cancer if they’d apply their brains more appropriately, like by reading a book, he says. “For you puzzle people: Reading is a seven-letter word for what you’re depriving yourself of every sad minute you’re spending on your empty boxes.” In the end, “there are two kinds of brains. Those hardwired to obtain deep pleasure from arranging letters in boxes and those hardwired to get the creeps from the process.”

It’s very funny. Now, back to our puzzle…

When the Web became a consumer phenomenon a decade ago, newspaper executives first shivered and then rushed in to what they believed would be a gusher of growth. Online channels appeared to deliver incremental new readership, and advertisers were eager to reach more eyeballs.

Most publishers took the path of least resistance to exploiting the online opportunity. They simply layered the job on the existing ad sales force. Reps were given packages and incentives to upsell print advertisers with incremental business. And it all worked great. Until recently.

Ad Age sums up the alarming news that online ad sales by newspaper businesses is beginning to decline. Among the publishers reporting drops in the most recent quarter are Tribune, Scripps and Lee. For now, sales are dropping in the single-digit percentage range, but the falloffs are a sharp contrast to the 20%+ annual growth of the online ad market in general.

Why is this happening? Simply stated: greed. When most newspapers went online, they slapped the same stuff they were producing in print into an HTML template and uploaded it to a server. Today, few of them offer any reader interaction outside of a basic commenting capability and some shortcuts for bookmarking stories to Digg. The stuff they post online is still cut and pasted from print. There’s been no investment, no innovation and no effort to keep up with Web 2.0 evolution.

More problematic is that newspapers have failed to establish and train dedicated online sales forces. Their reps did okay when online ads were a simple add-on to free value-add to an ROP advertiser, but now that the online business is becoming the engine of growth, those simple upsells don’s work very well.

If you talk to most veteran print sales reps, you’ll quickly learn that they have no idea how to sell online advertising. The language and metrics are foreign to them. That’s not surprising, given that their incentives have historically been heavily loaded toward print sales. Print generated a disproportionate amount of their revenue and commissions, so they sold what brought in the money. Their motivations aren’t difficult to figure out. Sales people are coin-operated. They prefer the path of least resistance and sell what’s easiest to sell.

The problem is that upselling print advertisers is a losing business when those advertisers are fleeing print. This forces sales reps to prospect for new business, and all that new business is coming in online. What’s more, the revenues and commissions from that business are much lower than what the reps have been accustomed to. And they have to learn a whole new language and process to bring the business in the door.

So now you’ve got ad sales reps who have been taught how to close $10,000 deals that carry a 1% commission suddenly selling having to sell $500 deals that take just as much time to close. Even if you hike the commissions to 5%, it’s still a pretty unappetizing prospect for most of them. The fact that the products are uninspiring and expensive makes things worse. That means reps are basically selling brand and reputation, and newspaper brands are now becoming a liability.

Some nimble publishers have experimented with setting up online-only sales staffs and training new recruits in the intricacies of selling a highly targeted and measurable medium. They’re on the right track. Those that have deputized their print sales people to peddle banner ads as a companion to their ROP contracts are headed off a cliff. Sadly, that’s probably most of them.

Gannett Loses Control

What do you do when a blogger becomes the chief source of information about what’s going on inside your company for employees of that company? That’s the conundrum that’s facing Gannett these days, as Jim Hopkins’ independent Gannett Blog has apparently gone viral. Hopkins reveals some recent traffic statistics: 91,000 visits and 189,000 page views in the last 30 days. That’s serious blog traffic, folks. What’s more, the site is being swarmed by Gannett employees. It’s become the virtual watercooler for a company of 46,000 people

The conundrum for Gannett is what to do about Hopkins. So far, it’s chosen a strategy of benign neglect, which is a huge mistake. Hopkins remarks that Tara Connell, Gannett’s chief spokesman (and interestingly, a former managing editor at USA Today) has gone almost silent recently as rumors have swirled about layoffs and cutbacks. Meanwhile, check out the volume of comments on each post on the blog. Gannett’s strategy (and we suspect this isn’t Connell’s decision) is about as wrong-headed as it could be. It is allowing a brush fire to grow out of control. What’s worse is that it’s failing to address an important channel to its own employees, who are the most valuable spokespeople it has.

One of the great ironies of watching the newspaper industry collapse has been to see the same media icons that have long scolded institutions for their insularity become reclusive and inwardly focused when the spotlight is turned on them. Gannet Blog is exhibit A in how not to handle a new influencer.

Stiff Upper Lip at the Sunday Times

The UK’s The Guardian sits down with John Witherow, who’s edited the Sunday Times for 14 years, for his first interview in nine years. Jane Martinson finds the 56-year-old Witherow to be charming, disarmingly unpretentious and energetic. He’s full of passion for newspapers and optimistic about the future. Speaking of uber-boss Rupert Murdoch, with whom Witherow speaks every week, he says, “He intuitively believes in newspapers and thinks they can be successful. He believes that all titles should aim to expand their circulation.”

The Sunday Times has had limited recent success in that area. Witherow admits that a price hike to £2 two years ago was a tactical mistake that cost the paper 100,000 readers. Still, at 1.15 million weekly copies, it’s a profit engine that earns £50 million a year.Witherow is excited about a new design that has added full color. He doesn’t see his 14-year tenure in one of the country’s most visible journalism jobs as a liability. He loves the experience of reading newspapers and views it as his challenge to pass along that enthusiasm to others.

DirectTV Pioneer Takes Over at the LA Times

Broadcast veteran Eddy Hartenstein takes over as publisher at the beleaguered Los Angeles Times. The paper runs a terrific profile of the guy. Hartenstein is “regarded by many as the father of the satellite TV industry,” having germinated and nurtured the idea of delivering by satellite what had previously been available only over wires. He’s an analytical thinker who also has the people skills to lead an organization. He prefers to stay out of the spotlight and let his accomplishments speak for him. People respect and like him. He had lunch with Times editor Russ Stanton for 3½ hours before agreeing to take the job. Sam Zell assured him that Tribune Co. won’t micro-manage the operation. And mark this quote from Zell about the Times: “This [the Times] is a keeper.” Let’s see if that promise holds up when the next debt payments come due.

Miscellany

• The Chicago Tribune has cut 70 of newsroom positions – or about 13% of its total editorial headcount of 550 – in recent weeks. That’s more than most people expected, according to rival Chicago Sun-Times. The mood in the newsroom is described as “tense,” which is probably an understatement.
• More signs that the Modesto (Calif.) Bee is being absorbed into the Sacramento borg. The paper is offering a buyout to all of its 200+ employees, its second such offer this year. Last month, the paper said it will stop printing in Modesto and move those operations to Sacramento. That cost 33 full-time and 127 part-time employees their jobs. In April, the Bee extended a buyout plan to about 100 employees, 11 of whom took it. The McClatchy Co, which owns the franchise, is trying to cut overall expenses by 10%.
• The Indianapolis Star will lose 23 employees as part of the bigger cuts at Gannett. The story didn’t specify the size of the paper’s total workforce.
• Tucson Newspapers, which publishes The Tucson Citizen, will eliminate some 30 jobs, also as part of the Gannett cutbacks.
• The anonymous “Retch” at TellZell is exhorting readers to fill out an online petition. “It calls for Sam Zell to add two seats to the Tribune board of directors: one to represent the workers and another to represent readers.” Seeing as the workers own the means of production at Tribune Co., it doesn’t seem a half-bad idea. However, they’ve got to get more than the 128 signatures so far.

We Miss Copy Editors Already

From CIOInsight.com

And Finally…

If you’ve ever taken a “money shot,” you’ll appreciate this gallery of pictures that were taken just at the right time. A good 90% of them were no doubt accidental, but let’s pat the photographers on the back anyway. Everyone needs a good pat on the back once in a while.