We’re back from filing an 80,000-word manuscript for a book about using billions of dollars worth of high-tech satellite equipment to find Tupperware in the woods. Really. And not much has changed in the last 10 days.

Murdoch Now Struggles Online

Rupert Murdoch was hailed as a visionary when he paid the then-bargain price of $580 million for MySpace in 2005, but now it appears that the newspaper mogul may not know that much about running an Internet community after all. MySpace just laid off 400 employees in the US and could cut another 100 internationally. That would amount to more than 15% of the company’s 3,000-employee workforce.

Crain’s New York quotes eMarketer forecasting a 15% drop in MySpace ad revenue this year, while Facebook is expected to gain 10%. MySpace is still bigger, but it’s headed in the wrong direction, with a 2% decline in visitors in April, compared to an 89% gain at Facebook. Murdoch has fired some executives and promised to rejuvenate MySpace, but the site has lost its utility to the older audience, which is flocking to Facebook. MySpace is still the preferred destination for rock bands and entertainment companies, but that doesn’t give it much cachet with the wealthier audience that Facebook is attracting.

Post Publisher Just an Ordinary Mom

Vogue has a feature on Katharine Weymouth, publisher of the Washington Post and granddaughter of the revered Katharine Graham. Nancy Hass portrays Weymouth as an unpretentious, down to earth mother of three who just happens to run one of the world’s most prominent media properties.  “She’s a mother first,” says her friend Molly Elkin, a labor lawyer.

The Post‘s new managing editor, Marcus Brauchli, calls Weymouth “an amazing listener” who isn’t afraid of criticism and who seems more at home with her people that the glitterati. She moved her office off the Post‘s executive floor and down into the advertising department, where she easily banters with her employees. Her home is a modest four-bedroom affair in Chevy Chase, where she greets visitors amid the barely controlled chaos of a living room full of toys.

Although she faces a huge task in reinvigorating a paper whose circulation has dropped 20% since its heyday, she says she has no grand plan. In fact, the piece makes out Weymouth to be a smart (Harvard magna cum laud and Stanford Law) achiever who makes it up as she goes along. Her attitude toward the Huffington Post and The Daily Beast, which both use Post content without paying: “Good for them. All’s fair, you know.”

Miscellany

The Associated Press is struggling to change its business model in light of the collapsing fortunes of the newspaper industry. The cooperative is trying to negotiate more lucrative licensing deals from major Internet news sites while cutting prices to newspapers in an effort to prop them up. The AP will reduce fees by $45 million for newspapers and broadcasters next year, or about $10 million more than the rate cut it announced in April, CEO Tom Curley said earlier this week. But that won’t stop the decline in revenue, which is expected to continue through at least next year. Curley said the AP aims to reduce its 4,100-person workforce by 10% through attrition, but that layoffs may be necessary.

After 18 months on the market, the Portland (Me.) Press Herald finally has a new owner who has promised to reinvigorate the troubled paper and restore it to profitability by the end of the year. Bangor native Richard Connor officially took the helm this week and said readers will immediately notice a thicker paper and better integration with the website. But there will be pain, with layoffs of up to 100 employees likely.  Remaining employees will get a percentage of the operation and two seats on the board. A conciliatory Guild executive said the layoffs will prevent much bigger job losses that would have occurred if the Press Herald had gone under.

The Knight Foundation is funding nine new-media projects to the tune of $5.1 million. The biggest winner is DocumentCloud, a project conceived by journalists from The New York Times and ProPublica to create a set of open standards for sharing documents. Other projects receiving support include one to help citizens use cell phones to report and distribute news, an effort to develop a media toolkit for developing mobile applications and an online space where the people can report and track errors in the media.

Yahoo’s Newspaper Consortium continues to be a bright spot for the industry. Yahoo reported that five new members just joined the ad-sharing cooperative: the Orange County Register, Colorado Springs Gazette, North Jersey’s Record and Herald News and the San Diego Union-Tribune. The group’s 814 newspaper members account for 51 percent of all Sunday circulation in the US.

Newspaper Guild members at the Albany Times Union have rejected a management proposal that would have eliminated seniority considerations in layoffs and permitted outsourcing of Guild jobs. The vote was 125 to 35. No word on whether the parties will return to the bargaining table, where they have been deadlocked for nine months.

Dan Gillmor has a short, pointed piece on MediaShift pleading for an end to caterwauling over the future of journalism and praising the “messy” process that is going on.  “I’ve grown more and more certain that we will not lack for a supply of quality news and information,” provided that risk-takers are permitted to experiment and that the supply of people who want to practice quality journalism doesn’t dry up, he writes. Like Clay Shirky, Gillmor believes experimentation will ultimately lead to many smaller news operations replacing a few big ones, and that that’s not a bad thing.

Two new entries in the almost-but-on-second-thought-no front: Google considered buying a newspaper but decided against it. Eric Schmidt tells the Financial Times that “There is a line and we’re going to stay on our side of it.  We have done well by letting content people creating great content in their own way.” He also says Google has no interest in buying The New York Times, but says David Geffen would make a great owner.”

Schmidt, whose company is often reviled as the great Satan by newspaper publishers, says that the loss of smaller papers come in particular is a tragedy. “The reporting that keeps the mayor honest is going to be gone and I don’t know what to do about that,” he says.

Without explicitly stating that newspapers should become nonprofits, Schmidt implies that the model has appeal. “Newsgathering and profitability model has always been an uncomfortable relationship,” he says. But he dismisses the idea that nonprofit is a panacea. “I don’t know how to solve the problem taking for-profit structures and transitioning them to a nonprofit world without some very generous person between,” he says. But that’s not going to be Google.

There’s a 10-minute video at the link above. If you think Schmidt is some kind of business velociraptor, watch the vid.  He has a Ph.D. in engineering, is thoughtful and contemplative and is also flat-out brilliant.

Also in the might-have-been category, the Washington Post‘s two managing editors told visitors to an online chat last night that the Post considered expanding its distribution base into Baltimore, where the Sun is hemorrhaging, but decided against it. “The best and most cost effective way to get us in Baltimore is either online or through a Kindle subscription,” they wrote as one. “We have indeed evaluated whether it makes economic sense for us to sell subscriptions in the Baltimore area and determined that the math doesn’t work in our favor.”

Miscellany

That’s all she wrote for the Tucson Citizen. A last-ditch attempt attempt by the Arizona attorney general to save the newspaper failed when U.S. District Judge Raner C. Collins said the AG had failed to show that violations of antitrust laws or of the Newspaper Preservation Act had occurred. Quoting verbatim: “While regrettable that the Citizen‘s illustrious legacy must come to end, it can not be said at this time, the decision to close the Citizen involves an anti-trust violation. The Court can not say at this point in time that there is a violation of the Newspaper Preservation Act,” wrote the judge, who definitely should hire one of the Citizen‘s laid-off copy editors.

The Federal Trade Commission will hold a series of workshops entitled “Can News Media Survive the Internet Age? Competition, Consumer Protection, and First Amendment Perspectives” beginning on September 15. From the release: “The workshops will consider a wide range of issues, including possible business and non-profit models for news organizations, the role of targeted behavioral and other online advertising, whether additional, limited antitrust exemptions may be necessary under these unique circumstances, and the implications of online news for both copyright protection and the availability of broadband access.”

The Associated Press is offering a novel buyout program: employees get $500 for every year of service but their pension benefits are increased to 14% to 16% above that which they would normally receive. The plan is clearly aimed at older employees. Applicants must be at least 55 years of age with at least 10 years of AP service and the combination must add up to 75.

Latest layoffs totals, from Erica Smith’s Paper Cuts blog:
Salt Lake Tribune: 3
Raleigh News & Observer: 31
Durham, N.C. Herald-Sun: 7
Detroit Newspaper Partnership: 150
Baton Rouge Advocate: 49
Honolulu Advertiser: 15

And Finally…

From the Columbia Journalism Review: “Stephen Colbert weighed in on future of journalism right now, taking a side in the debate over the role of print: ‘Newspapers are an important part of our lives, not to read, of course, but, when you’re moving you can’t wrap your dishes in a blog.'”

“Gannett Co., the largest U.S. newspaper publisher by circulation, reports earnings on Thursday, kicking off what is expected to be the ugliest quarter in recent memory for the industry,” says The Wall Street Journal in a blunt assessment of the coming earnings season. USA Today is expected to take it on the chin when Gannett announces its results. Forthcoming numbers from the Audit Bureau of Circulations are expected to show a six-month decline of about 100,000 in USA Today‘s 2.3-million circulation, largely as a result of lower occupancy in hotels.  Free hotel distribution accounts for more than half of the paper’s 2.3 million circulation.

Adding to USA Today‘s woes is Marriott’s decision to make room delivery of newspapers optional. Citing environmental concerns, the hotel chain said it will now offer guests a choice of papers or no paper at all, if they so choose.  Declining readership was also a factor in the decision, which will reduce daily circulation by about 50,000 across the US.  One quarter of travelers didn’t even crack open the newspaper that was delivered to their doorstep, a spokeswoman said.

Ugly Spat Over LA Times‘ Front-Page Ad

An internal battle of the Los Angeles Times over the publisher’s decision to run a front-page ad resembling news story highlights growing tension between editors and publishers as the industry revenue woes deepen.  The ad ran last Thursday below the fold in a position and typeface that some people believe could be mistaken for a news story (left). Charles Apple has an image of the entire front page. In an interview with TheWrap, LA Times executive editor John Arthur called the ad “horrible” and “a mistake.” However, the VP for entertainment advertising at the paper said Arthur’s boss, editor Russ Stanton, “approved both advertorial units.”

Not so, says Stanton, who told the Times’ own reporter that the ad ran over his objections. “There is not an editor in this nation — including me — who really wants to see something like that on the front page of his or her publication,” Stanton said. Publisher Eddy Hartenstein said he made the decision to run the ad because of the perilous financial situation at the newspaper. “I’m just trying to keep the lights on here, folks,” he told an angry newsroom last week.

Barriers to front-page advertising have been falling recently as publishers struggle to get creative. The New York Timesshattered tradition in January with a front-page strip ad for CBS and the Boston Globe followed suit just two weeks later.

Miscellany

Newspaper executives like to point out that their total readership — including the Web — is bigger than ever.  However, online ad revenue is still growing more slowly than the market as a whole, according to Alan Mutter.  The most alarming recent statistic: “Interactive revenues for newspapers dropped by 1.8% in 2008 to $3.1 billion at the same time overall online ad sales in the United States surged 10.4% to a record $23.4 billion,” Mutter writes. What’s more, newspapers’ online ad revenues today are 13.3% of the overall market, the lowest share ever.  Mutter suggests that the culprit is newspapers’ practice of up-selling print advertisers with discounted online campaigns, a strategy that grows weaker as print sales decline.  Publishers need to develop sites that look more like the Web and less like digital versions of their print products, he advises.

The Chicago Tribune is cutting another 20% of its already depleted newsroom staff. The paper didn’t say how many employees are left in the newsroom, but there were about 440 as of the most recent layoffs in February. The paper is also reorganizing some production groups, merging copy editing, page design, graphics, imaging and some photo editing into a single department.

Writing on Slate, Jack Shafer takes on joint operating agreements as the great sucking sound that weakened the newspaper industry.  “The tragedy of the joint operating agreements is that instead of making the stronger paper stronger, the arrangement tends to weaken it,” he says, pointing to the San Francisco Chronicle as the poster child example. “Had the Chronicle and the Examiner been forced to compete on the business side in 1965 instead of to collaborate, a clear victor would have a fighting chance at surviving in today’s environment.” Instead, the Chronicle was forced to support the weaker Examiner to the point that both papers were worse off.

The Gannett-owned Observer & Eccentric Newspapers will cease publication of five print and Web editions of the Eccentric chain in suburban Detroit on May 31. Gone are the Birmingham, West Bloomfield, Troy and Rochester editions of the Eccentric. Two other newspapers will be merged into the South Oakland Eccentric, serving nearby communities. The consolidation will result in the loss of 44 jobs.

The Huffington Post has published a terse set of editorial guidelines, demonstrating that the standards being applied to citizens journalists don’t differ all that much from those practiced by mainstream media.

And Finally…

Is that a penguin on the telly? Well, a few penguins, actually, but click the image to see the truly awesome spectacle of what happens when penguins congregate. This is one of the photos on Incredimazing, a website devoted to collecting bizarre images submitted by people like you and me. If you want to scramble your brain, check out the M.C. Escher car.

The New York Times Company shocked the newspaper industry last week with its threats close the Boston Globe on May 1 unless Globe unions give back $20 million in concessions.  There’s new evidence that the May 1 date is a bluff and that closing down the Globe could cost the Times more than keeping it in business.

The Newspaper Guild is taking an initially defiant stance on the Times’ request that the union shoulder half of the $20 million in targeted cost savings. “We’re willing to consider some concessions but not the draconian amount they put forth,” said union president Daniel Totten, in an apparent call of the Times’ bluff. He also characterized the Times’s demand for freedom to lay off people without regards to seniority as “a nonstarter.” Globe reporter Scott Allen, who has a lifetime employment guarantee, commented “Now, nobody thinks that if we make these concessions, there won’t be more cuts in a few months.” Yes, Scott, we think you can count on that when the paper is losing $85 million a year.

The very act of closing the paper would trigger huge expenses in itself. The Boston Herald analyzed public records and found that union members could be entitled to up to 50 weeks of severance pay and that underfunded pension liabilities could swell the total cost to more than $100 million.  Contractual obligations also make the Globe a tough property to sell, since few buyers would want to assume open-ended liabilities like the lifetime employment pledges to 435 employees.  The only way to cancel the guarantees, apparently, is to close down the paper.

If the Times Co. plans to carry forward with its threats, it has yet to tell the government. The Worker Adjustment and Retraining Notification (WARN) act requires most employers with more than 100 employees to give 60 days’ notice of plant closings and mass layoffs.  The Times Co. hasn’t yet filed a WARN notice, although it could still shutter the paper and pay employees for 60 days thereafter.

The Globe is raising its newsstand prices by as much as 60% in a gamble that readers will help pick up some of the bill for keeping the paper afloat. Residents outside of Boston will now pay $4 for a Sunday paper, compared to the current $2.50.

The Globe‘s crosstown rival Herald, which can barely disguise its glee in covering this story, also reports that four Guild leaders and six governing board executives are among those with lifetime job guarantees. Those guarantees are one of the biggest obstacles to selling the paper and are a primary negotiating point between the Times Co and the Globe unions.  The guarantees are causing friction within Newspaper Guild ranks, as some members believe that the leadership will be unwilling to negotiate in good faith out of fear of losing their jobs.

The Herald’s rapacious columnist, Howie Carr (left), skewers his blue-blooded competition for a series of past errors provoked by lapses in judgment.  Too bad there are no hyperlinks; it would’ve been nice to read the background on this stuff.

Meanwhile, the Globe itself notes a trend: newspaper owners are increasingly using the threat of closure to extract concessions from their unions. Hearst’s success in gaining significant givebacks from the union in order to keep the San Francisco Chronicle afloat may have prompted the Times Co. to threaten the Globe with oblivion. Also, Members of the Pacific Northwest Newspaper Guild in Seattle were scheduled to vote this week on accepting a wage freeze and two weeks of unpaid furloughs in exchange for keeping the Seattle Times afloat. A similar holdup is going on in Maine. Could it be that newspaper owners are merely posturing in order to gain concessions from the unions? Nah, they both have the higher goal of quality journalism in mind.

Is AP Worst Content Thief?

A new blog called The Future Of Newspapers features a guest column by veteran Denver sports writer Dave Krieger that poses a curious question: How can the Associated Press proposed to champion the intellectual property rights of newspapers when the AP is itself the worst violator of those rights? Krieger notes that readers don’t make a distinction between the source of information and where they consume it. News from the Denver Post that appears on ESPN.com is presumed to be from ESPN.

“Why should any newspaper in the Internet age be a member of an organization that takes that paper’s original material, rewrites it and distributes it around the world without attribution or compensation? In fact, an organization that charges the newspaper for the privilege?” The AP had some utility when newspapers were expected to provide national and international coverage, but obligation is gone now.  For most metro dailies, the AP is nothing more than a subscription service that pirates their content and distributes it free on the Internet.  He has a point.

Miscellany

Executives might want to look at what’s going on at the Virginian-Pilot, where management reports that the financial outlook is brightening even as it lays off another 40 employees.  The company has cut nearly 20% of its workforce in the past year and reduced its newsroom staff by 30% since early 2007, but it has also taken some initiatives to diversify and grow revenue. These include targeted websites, expansion of entertainment coverage and contracts to deliver national newspapers in its region. While print revenue continues to fall, management said online revenue is growing. The newspaper turned a profit in the first quarter and March was its best month in a year.

Boston University’s newspaper asks three journalists-turned -academics if university partnerships could be a solution to newspapers’ financial troubles.  They agree that university endowments could be an important source of support for failing journalist enterprises and that universities have a duty to support worthy cultural and public service institutions.  However, educational institutions are not known for acting quickly and trustees would probably balk at taking on financial liabilities as daunting a complex as those that the industry faces.

Rosa Brooks fires a parting shot in her swan song as a Los Angeles Times columnist. She’s going to the Pentagon as advisor to the undersecretary of Defense for policy, but she fears that the evisceration of her industry will leave the American public wanting. She “can’t imagine anything more dangerous than a society in which the news industry has more or less collapsed.” Brooks believes that the government must step up to the plate and subsidize journalism, which isn’t the same as subsidizing media. The problem with existing subsidies is that they “have actually contributed to the decline of high-quality journalism by enabling monopolies, freezing out smaller and locally controlled media outlets and encouraging large corporations to treat the news as just another product,” she writes. The issue isn’t how to save the media, but how to save quality.

The Reno (Nev.) Gazette-Journal is laying off 35 people, or about 10 percent of its workforce, and closing a weekly paper in Carson City. These are in addition to 61 other positions eliminated since December.  Do the math, and the paper has cut almost 25% of its workforce in the last four months.

Veteran newsman Ric Cox has launched a blog called “Save Our Tribune” that’s dedicated to “rescuing Chicago’s leading newspaper.”  In one of his initial posts, he suggests ways that the Tribune can make online subscriptions palatable to users who are accustomed to getting news for free.

And Finally…

Some residents of Omaha, Neb. have created a satirical website to celebrate “Totally bogus news from the mid-heartland.”  The principal target of its barbs is the Omaha World Herald, “which has laid off employees twice (usually after throwing an extravagant party for an ex-publisher), cut back circulation, and now runs obits where it used to run op-eds,” according to a promotional message. One of the early posts notes the possibility that the state may create a precedent in capital punishment due to a typographical error. “The state might be replacing the electric chair with ‘lethal infection’ rather than the intended ‘lethal injection,'” the editors write, noting that some members of the Senate Judiciary Committee actually like the idea. One of them “added an elegant provision permitting the use of a piece of rusty barbed wire to begin the process and inject the pathogens,” says the site.

Vanity Fair uses a lot of words to describe Arthur Ochs Sulzberger Jr. in its 11,000-word profile of the New York Times Co. chairman, but “complex” isn’t one of them. That isn’t to say that Sulzberger isn’t bright. It’s just that he appears to be ill-suited to cope with business problems that are swamping executives with far more business savvy and seasoning.

Mark Bowden’s profile is sympathetic, even moving in places, but it won’t put shareholders of the New York Times Co. at ease. Sulzberger, who is the fourth member of his family to run the company, is clearly a hard-working, well-meaning, engaging man. When he assumed stewardship of the company in the late 1990s, he saw his job as being to keep the ship on course. That worked well until tectonic shifts began reshaping the business began around 2001. Since then, we get the sense that Sulzberger has been way out of his league.

“The Sulzbergers embody one of the newsroom’s most cherished myths: Journalism sells,” Bowden writes. “But as a general principle, it simply isn’t true. Rather: Advertising sells, journalism costs.” The Sulzberger family has always operated on the principle that investing in a quality product will lead to business success, and Sulzberger has perpetuated that value in the face of recent overwhelming evidence to the contrary. Throughout his 20-year tenure at the Times, he has concentrated his investments in traditional media like the Boston Globe while demonstrating almost blithe ignorance of the changing publishing landscape.

Agnostic = Indifferent

Bowden homes in on Sulzberger’s famous quote that he is “platform agnostic.” Agnosticism implies lack of commitment, but it also reveals a basic misunderstanding of new media. “When the motion-picture camera was invented, many early filmmakers simply recorded stage plays, as if the camera’s value was just to preserve the theatrical performance and enlarge its audience,” Bowden writes. “The true pioneers realized that the camera was more revolutionary than that. It freed them from the confines of a theater.” So it is with newspapers today. The issue isn’t the platform, but rather the basic approach to news. The Times’ traditional top-down style is less and less meaningful to an audience that wants diversity and immediacy and online revenues simply won’t support a large, vertically integrated organization.

The Times Co. has made a few spot investments in Internet ventures like About.com and its website is arguably the best (and most well-trafficked) of any newspaper in the world. However, these times demand reinvention of the business and the Vanity Fair piece implies that Sulzberger is not the guy to do it. In contrast, it singles out Rupert Murdoch as the company’s most dangerous competitor and potential acquisitor.

Described as a “lightweight” and even “goofy” at one point, Sulzberger is clearly a nice and likable guy but not one given to tough decisions. He is a fan of pop psychology team-building exercises, even though they make his hard-bitten managers groan. And he is prone to risk avoidance. Bowden describes one management offsite exercise in which executives played a game that challenged them to decide between safe choices and higher risk but potentially more rewarding long shots. An employee who had witnessed many groups play the game observed, “This is the most conservative group I have ever seen.”

The Vanity Fair piece doesn’t attempt to cast any new light on the problems facing the newspaper industry; it’s a profile of the man who is perhaps under more pressure than anyone to come up with a solution. This is a complex profile of a man who doesn’t sound very complex. That can’t be good news for the Times.

Miscellany

The Associated Press, which has drawn much scorn from newspapers for its licensing terms, is cutting prices again. At its annual meeting in San Diego, the news cooperative announced $35 million in rate assessment reductions for 2010 on top of $30 million it made this year. The service also said members can now cancel their membership with one year’s notice instead of two. The AP also threatened to “pursue legal and legislative actions” against websites that don’t license news content and that it would track news distributed to members to see if it’s being misused. The AP may be in a better position than any of its member news outlets to actually enforce such a policy and it has the clout to put together a consortium of members to charge for news access if the law permits it.

The AP’s Canadian counterpart, called the Canadian Press, is laying off 25 people, or about 8% of its workforce. The service has been the victim of withdrawals by two of Canada’s largest publishers.

Newsosaur Alan Mutter is so fed up with people dancing on the graves of newspapers that he is banning newspaper-bashing comments from his blog. He can’t resist offering one last example, though.

The Milwaukee Journal-Sentinel laid off 26 full-time and five part-time employees and proposed a third round of buyouts aimed at cutting newsroom staff.

And Finally…

Is this how you’d like your typical reader portrayed? It’s an ad created by the North Carolina Press Association to urge citizens to fight legislation which would allow local governments to post public notices on the Web instead in local newspapers. We don’t know about you, but the ad seems to imply that newspaper readers are old and technophobic (courtesy McClatchy Watch).

Two numbers stood out in Friday’s shocking news that the New York Times Co. was threatening to shut down the Boston Globe: $85 million and 450. The first number is the amount of money the Globe is expected to lose this year without union concessions. The second is the number of employees at the paper who have lifetime-employment contracts. All of those people should be very nervous right now.

The Times Co., which is groaning under $1.1 billion in debt, wants the unions to give up $20 million in concessions or face closure of the 137-year-old Globe, which has dominated the news business in Boston for more than 30 years. Given the size of the projected loss this year, $20 million seems like a modest amount. This would indicate that the Times Co. threat is merely posturing, as Alan Mutter argues. But ultimatums appear to be working in San Francisco, where the union just voted 10-1 to give the Chronicle broad authority to lay off employees without regards to seniority as well as to cut vacation time and extend working hours. The Chronicle and the Globe have similar audience characteristics.

The brass ring for Times negotiators has to be the 450 Globe employees who work under lifetime job guarantees. We knew such guarantees existed, but we hadn’t seen a count of the number of employees who have them until this past Friday; they comprise nearly a third of the unionized workforce. It’s hard to imagine any company handing out promises of that kind, but the Globe did that in 1993, when the economy was emerging from recession and businesses were being conservative about guaranteeing anything. Such management hubris testifies to the dominance the Globe enjoyed at the time over the Boston market, where its only competition is the working-class Herald and a string of suburban dailies.

We live in Globe country and can testify to the paper’s reach in the affluent suburbs. Drive through a quiet subdivision on any Sunday morning and the Globe is the paper you see in the driveways of the $700,000 homes. However, the tech-savvy Boston audience is also more open than most to online alternatives, which is perhaps one reason Boston.com is the sixth largest newspaper website while the Globe reported a circulation decline of more than 10% last November on top of an 8.3% decline six months earlier.

If the 450 employees each cost $100,000 on a fully loaded basis, that’s $45 million in annual costs over which management effectively has no control. We don’t have to comment on the lack of motivation that guaranteed employment must instill in a heavily unionized environment. If we were Times Co. management, though, we’d probably aim the first few blows of the ax directly at that soft middle.

The Globe covers its own news with reaction from community members ranging from fry cooks to U.S. Senators.

College student Adam Sell, who has interned at the Globe for two years, sent us a link to a Flickr photostream he created of the closing of the Globe‘s NorthWest bureau 10 days ago.

Miscellany

Two central Pennsylvania newspapers that have published separately with a single weekly combined edition will join forces on a permanent basis at the end of June. The Intelligencer Journal and Lancaster New Era will be published Monday through Saturday mornings with combined news and features operations but separate editorial pages.  The merger will result in the reduction of 60 full-time and 40 part-time positions, or about 20% of the workforce. Management said the combined circulation of 229,500 has been growing but that the economics of the publishing industry demands changes.

Publishers who are struggling with solutions to the revenue problem, none of them very appetizing, might want to look to Europe for inspiration. The big German publisher Axel Springer just reported record profits and is looking to expand overseas, possibly into the US.  Norway’s VG Nett charges citizens for access to its news through a cable TV subscription fee. And a group of papers in Belgium joined forces to force Google to remove their content from its search results. All in all, some papers in Europe are doing just fine, thanks to tight government partnerships and creative approaches to revenue

The Detroit Media Partnership, which publishes the Detroit Free Press and the Detroit News, has closed a deal with Plastic Logic to distribute the Plastic Logic Reader under purchase or lease to subscribers of the Detroit dailies as an alternative to paper delivery.  The reader is the size of an 8.5 x 11-in. pad of paper, weighs less than many print magazines and sports a touch-screen interface.

With the Minneapolis Star Tribune in bankruptcy, employees have started a grass-roots effort to save the paper. A group has launched a Facebook group (1,280 members, but only one discussion post since Jan. 17), a website (inactive as of this morning) and plans to hand out paper hats and scorecards at the Twins’ home opener. It’s probably going to take more than that.

If you like Chicago Sun-Times columnist Richard Roeper, you probably won’t after reading this egotistical, self-indulgent monument to himself. If this is how newspaper columnists regard their own celebrity, it’s no surprise readers are turning elsewhere. But there are a couple of good anecdotes that illustrate how divorced these scribes are from their readers.

Google CEO Eric Schmidt will keynote the Newspaper Association of America national convention in San Diego this week. Schmidt, who is often considered the great Satan by newspaper publishers, has nevertheless been a vocal proponent of the need to help the industry.  It should be an interesting encounter. Schmidt is scheduled to speak on Tuesday at 10 a.m. PDT. You can listen to his remarks live. NAA will offer a moderated “Cover it Live” discussion on its PressimeNow! blog, where visitors can pose questions, share their thoughts and get live reactions from attendees.

The Sun-Times Media Group is considering ending publication of some of its suburban newspapers as it struggles to emerge from its recently declared bankruptcy.

A.H. Belo Corp., owner of the Dallas Morning News and three other daily newspapers, will cut employee salaries next month and suspend a retirement supplement to pension plan participants next year. Cuts will range from 2.5% to 15%, depending on an employee’s salary. The company’s CEO will also take a 20% cut in pay.

Last month we told you about St. Louis Post-Dispatch editor Christopher Ave’s use of song to lament the layoffs of newspaper copy editors. Now, 26-year old Berkeley musician named Jonathan Mann has joined forces with the staff of the East Bay Express to come up with a solution to newspapers’ business problems. You have to wait to the end to hear it, but the three minutes are time well spent.

Amid all the hand-wringing about the lack of new-media alternatives to newspapers, the online-only Huffington Post is setting up a small investigative unit to examine the nation’s economy. The news site is collaborating with The Atlantic Philanthropies and others to launch the Huffington Post Investigative Fund with an initial budget of $1.75 million and plans to hire 10 investigative journalists who will primarily coordinate work done by freelancers. “All of us increasingly have to look at different ways to save investigative journalism,” said founder Ariana Huffington (left). She added that the fund will probably hire laid-off newspaper journalists.

Everything the venture produces will be available free for any publication or website to publish. While the group’s initial focus will be on the economy, the founders intend to cover a wide range of topics over time. Content won’t reflect HuffPo’s left-leaning politics because the philanthropic funding requires a neutral perspective. Jay Rosen, who will advise the project, has more detail on his blog.

Critics find a hint of irony in Huffington’s journalism bailout plan. Joseph Tartakoff notes that “Some traditional media outlets have previously accused the HuffPo of stealing their content. The Chicago Reader, for instance, charged Huffington Post with ‘grand theft‘ after it reprinted one of the publication’s articles wholesale on its site.” HuffPo practices a new style of journalism with a small staff of reporters and links to other sources aggressively from its home page.

Jeff Jarvis likes the HuffPo idea and suggests that $1.75 million can go a lot farther than one might think. He evokes the “1% rule” of online communities, which is that 1% of the people create the content that the other 99% consume and discuss. “You need only a limited number of contributors to support great things in a gift economy. See: Wikipedia and NPR,” Jarvis writes.

John Yemma would probably agree. As his publication, the Christian Science Monitor, goes Web-mostly, the editor (right) has launched a blog that he hopes will be “a place to talk about the changes in media.” In his second entry, he compares the crowd-sourced Wikipedia model to the closed Encarta and Britannica products. “General knowledge…can’t withstand an effort that was developed specifically for the Internet and that harnesses gifted amateurs,” he writes. And he issues a warning to newspapers about putting content behind a pay wall, as Britannica and Encarta did. “The Web is its own universe with its own rules,” he writes. Such new-media thinking from a veteran print journalist indicates that the Monitor experiment will be an interesting one to watch.

Debating the Value of Newspapers to Democracy

Slate’s Jack Shafer takes a dim view of the idea that newspapers are essential to democracy. Before the current crisis, he writes, people mostly complained about the lousy job newspapers did of getting the facts straight and delivering balanced coverage. Now that the medium is failing, newspapers have been “reduced to a compulsory cheat sheet for democracy. All this lovey-dovey about how essential newspapers are to civic life and the political process makes me nostalgic for the days, not all that long ago, when everybody hated them.”

17th Century Newspaper

Shafer points out that when Thomas Jefferson said he preferred newspapers without government to government without newspapers, he wasn’t talking about the broadsheets we know today. Newspapers in Jefferson’s time were baldly partisan and often skewed the facts to suit their views. How did people figure out the truth when each journal had its own version of the truth? They triangulated, they checked other sources and they figured it out. This worked okay up until about 50 years ago, when newspapers decided to become the arbiters of truth. That’s convenient, but it doesn’t mean we can’t go back to a form that the founding fathers believed was essential to democracy.

The idea that many small contributions can out-produce a few big ones is nicely articulated by Timothy Lee on TechDirt. In order to understand how journalism can be reinvented, you need to discard the notion that only monolithic, vertically integrated organizations can cover the news. “The Internet makes possible a much more decentralized model, in which lots of different people, most of them volunteers, participate in the process of gathering and filtering the news,” he writes. “If millions of people each contribute small amounts of time to this kind of decentralized information-gathering, they can collectively do much of the work that used to be done by professional reporters and editors.”

If you’re geeky enough, you’ll recognize the open-source software model in this thinking. The most powerful force ever to come along in software development depends upon teams of loosely-organized developers each contributing a little bit of their time to building software that anyone can use for free. No, journalism isn’t software development, and there are certain practices of journalism that can’t be duplicated by a person sitting at a desk in India. However, Lee suggests that if the gadflies who already hang around city council meetings start reporting upon them on their blogs, then the community effect can take over to turn that amateur reportage into real journalism. You don’t need professional reporters for everything.

Jon Talton begs to differ. In an angry and resentful blog entry, he derides the idea that grass-roots efforts can ever replace the depth and credibility of what professional journalism organizations produce. Special interests, “will all have stronger voices for their agendas. Manias, rumors and groupthink will be more prevelant. In many localities, people will be particularly ill-informed about their government and major economic powers, pluralism will decrease and corruption will rise,” he writes. After that, we suppose, come the locusts.

Miscellany

Media General is cutting back again in Florida, saying there are no signs yet that the economy is picking up. Its Florida Communications Group cut 53 jobs, eliminated 12 vacant positions, closed two niche publications and added three more days of unpaid furlough to the 10 that employees were already required to take.

Back in the early days of the Web, some newspapers were criticized for withholding information from their websites until the stories had already appeared in print. Now that times have changed, the Minneapolis Star Tribune is being labeled a visionary for doing the same thing. The Strib has enjoyed good success online despite its small-market roots, so the paper is gambling that it can entice readers to become print subscribers by withholding some deep investigative reporting from the website. “The best of our deep, exclusive content will be available online later in the week, unless we have a compelling reason to post it sooner,” wrote editor Nancy Barnes in a letter to readers.

The Boston Herald laid off 12 people, or 6% of its workforce.

The Associated Press has a great list of “daily newspapers that have reduced publication days since last year.” In reality, many of the papers on the list were not technically dailies to begin with, but all publish at least five days a week.  It looks like Mondays, Tuesdays and Saturdays are the most popular days to cut.

With this latest and deepest round of layoffs, the Atlanta Journal-Constitution will have cut the population of its newsroom by more than half since 2006.

The newspaper announced today that 30% of its editorial staff will be dismissed through a combination of voluntary buyouts and layoffs. Another 107 full- and part-time jobs will be eliminated because of a reduction in circulation. The move will trim the size of the news group to about 230, from a high of 500 people just three years ago. Distribution to seven outlying counties will be severed, reducing the AJC‘s reach to 20 metro Atlanta counties.

This is the third round of layoffs at the AJC, which can’t be accused of dribbling away staff.  In December, it eliminated 56 full-time and 100 part-time jobs in its circulation unit. Last July, it cut 189 jobs – including 85 in the newsroom – while also spending $30 million on new printing presses. In that move, the paper also discontinued all its regional editions, including the Gwinnett County regional, where its main printing press was located.

The new cutbacks will target people making the most money.  Most of the reductions “will be in production and management, allowing us to keep as many news reporters as possible,” AJC Editor Julia Wallace said.

And this isn’t the end. “Today’s announcements are the first in a series of initiatives we’ll announce over the next 90 days to reduce costs,” said Publisher Doug Franklin, who added that the goal is to regain profitability by 2010.

Remaining editorial staff will be reshuffled to plow more resources into the profitable Sunday edition.  The strategy hints at possible cuts in frequency, which has been a popular cost-saving move for an increasing number of papers in the last few months.

Clay Shirky takes us back 500 years to reflect on the revolution that’s going on right now. Everyone who wonders “What will become of journalism when newspapers are gone?” should read this superbly voiced essay by the author of Here Comes Everybody. The piece has racked up 225 comments and trackbacks just over the weekend, and there will be many more.

To sum up Shirky’s case:  The game is over for newspapers. Nothing can save the business, so it’s pointless to try. We’re in the middle of a revolution and revolutions are uncomfortable things because “The old stuff gets broken faster than the new stuff is put in its place.”

His distant mirror is 16^th century Europe, when the printing press was beginning to lift the world out of the Dark Ages. As translations of the Bible into languages other than English began to threaten the church-dominated world order, everyone frantically searched for assurance that the old institutions would be preserved. This applied even to disrupters like Martin Luther,  who insisted he wasn’t creating a schism in the church even as he was inventing Protestantism.

“And so it is today,” says Shirky, fast-forwarding. “When someone demands to know how we are going to replace newspapers, they are really demanding to be told that we are not living through a revolution…They are demanding to be lied to.”

Revolutions are messy things because old institutions have to be destroyed before new ones are put in place. We’re witnessing the destruction now but we have no idea what will grow out of the rubble. And that’s scary.  “The list of models that are obviously working today, like Consumer Reports and NPR, like ProPublica and WikiLeaks, can’t be expanded to cover any general case, but then nothing is going to cover the general case,” Shirky writes. The only certainty is that the newcomers will be more specialized, distributed and democratized than the old, vertically integrated institutions.

We won’t say Clay Shirky puts our minds at ease, but he at least points out that we have come this way before and that everything turned out pretty well in the long run. All we have at this point is faith and optimism.  The sooner we can turn our attention from salvaging the unsalvageable to inventing the future, the sooner we can get on with the rebuilding.

Eugene (Ore.) Register-Guard columnist Bob Welch should read Shirky’s essay. So should Mark Willes, former publisher of the Los Angeles Times and now head of Deseret Management Corp., who’s quoted in this Salt Lake Tribune story remarking “[I]f we’re going  to have all the things I think are central to having a civilized society and a successful society, [newspapers] must grow.”

Union Grants Broad Concessions to San Francisco Chronicle Management

Their collective backs against the wall, members of the Northern California Media Workers Guild voted 10-1 to give the San Francisco Chronicle broad authority to lay off employees without regards to seniority as well as to cut vacation time and extend working hours. The union, which represents 483 employees at the Chron, had little choice. Owner Hearst Corp. has threatened to close the entire operation without major concessions. Even so, Hearst is still likely to lay off 150 Guild workers.

Union members took consolation in the fact that that figure is one-third less than the 225 jobs Hearst originally threatened to eliminate. The Guild was also able to secure a decent severance package for laid-off employees. However, members will pay more for health benefits, lose 25% of their vacation and work longer hours. The Mercury News story notes that Hearst had threatened to make “most” of the 225 threatened job cuts in the Chron‘s 260-person newsroom. This seems incredible, since a cutback of that magnitude would leave less than 200 reporters covering the entire Bay Area. That may still be the case after the anticipated layoffs happen. Hearst is also eliminating 100 unionized pressroom jobs after it outsources printing to a Canadian contractor in June.

How to Save the Classified Advertising Business

Christopher Ryan and Steve Outing propose some head-slappingly simple ideas in their “Classifieds Manifesto.” So why aren’t more newspaper companies following them?

Newspapers can still have important and profitable classified advertising businesses, the authors say, but first they have to stop thinking about classifieds as agate type on a page. Craigslist has won that battle, so newspapers have to change the rules of the game.

Why not open a used-car lot for your auto clients? Or create a division that helps realtors sell homes? And while you’re at it, reinvent the way you present information. Craigslist is butt-ugly, man. Use tables and icons and easily navigable ways to get readers to the stuff they want to buy. And while you’re at it, get a video camera out to those properties that realtors are trying to sell and give them a hand.

There are a bunch of other smart and simple ideas in this essay. Send the URL to the head of your classified advertising group.

Miscellany

Mark Potts totes up the market capitalizations of the publicly held newspaper companies in the US and comes to a striking conclusion: Their combined value is just $1.3 billion, or a little more than what The New York Times Co. paid for the Boston Globe alone ($1.1 billion ) in 1993. This same group of companies was worth over $7 billion just six months ago. And speaking of the Globe, Potts says Barclays recently valued the paper at just $20 million.

McClatchy Watch is reporting that the Kansas City Star could announce a layoff early this week that’s larger than the newspaper’s last three layoffs combined. This rumor is a little confusing, however, since the Star announced plans to cut 15% of its workforce just last week.

Owners of the Minneapolis Star Tribune and its pressmen’s union have reached agreement on a set of union concessions involving layoffs, wage cuts, health care premium increases and staffing reductions. No details were released pending a vote by members on the agreement this week.

McClatchy Watch is reporting that the Kansas City Star could announce a layoff early this week that’s larger than the newspaper’s last three layoffs combined. This rumor is a little confusing, however, since the Star announced plans to cut 15% of its workforce just last week.

Spain’s El Mundo newspaper has an article about the Death Watch that has received some notice in the Spanish speaking world, including Cuba and Argentina. We wish our Spanish was better, but we think they’re mostly saying the same thing.

We thought you might like to see the text of the e-mail interview with El Mundo correspondent Carlos Fresneda that formed the basis of this story. As always, your comments are welcome.

How do you feel when you read about events such as the end of the Rocky Moutain News? Which newspapers will survive in the US?

The closure of the Rocky Mountain News left me feeling sick because we are seeing institutions of knowledge collapse before our eyes. The vital public service that these newspapers provide is being lost and, for the moment, there is nothing to replace them.

I believe a few national dailies will survive, among them The New York Times, USA Today, The Washington Post and The Wall Street Journal. These papers made the transition to national distribution a decade ago and that will serve them will. The need for newspapers will not disappear, but the economic model of regional dailies is no longer sustainable. Papers that do not count their national circulations in the one million range will not be able to command the advertising fees to keep them alive. However, there will be a place for some print properties and a few will remain to fulfill that need.

Do you think that something like this could happen in Europe?

It depends on the location. Areas of Europe that are well wired for the Internet and have robust wireless infrastructures, like the Nordic region, will probably see the need for newspapers decline more quickly than those that charge high fees for Internet access or do not have affluent populations. Eastern Europe, in contrast, will probably be a fairly robust market for newspapers for some time. Some cultures are also more invested in the newspaper model, as is the case in the UK. In general, Europe will discard print newspapers more slowly than the US because traditions are more embedded and, in some cases, government subsidies will keep print publications afloat. France is an example of that.

Will more newspapers follow The Wall Street Journal model and charge for their content on the Web?

They will try but mostly they will fail. Readers aren’t accustomed to paying the costs of news, even in the print model, where the cost of a newspaper to a reader is trivial compared to the cost of producing it. Newspapers may be able to generate some revenue from subscription fees but not enough to support their operations at their current size.

Will “micropayments” be the solution for some of them?

The only way a micropayment model can flourish is if there is a broad-based campaign by journalists, public officials and celebrities to promote it. This is the model that is creating a viable paid-content model in the recording industry. There must be a public education campaign to convince the public that a vital information source is threatened and that it must be supported. Perhaps these organizations can steal a lesson from the music industry by giving away their content free on their website but charging for downloads to a Kindle. If readers perceive the value, they’ll pay. However, I think it’s unlikely that the news industry can muster enough support to make such a campaign successful.

The new generations of reader is used to getting information for free. Will these people be willing to pay for high quality journalism?

There will be public funding models like National Public Radio’s that will have some success applying public support to worthy news organizations. However, I doubt that individual readers will be willing to pay enough to cover more than a small amount of the operating costs of conventional newspapers. A few organizations may survive on public funding and philanthropy, but the vast majority of daily newspapers will not be able to sustain themselves under that model.

What will happen to investigative journalism?

In the short term, a lot of investigative journalism will disappear. However, I believe a new style will emerge over time that leverages increased public access to government documents and the work of individual “whistle blowers”  to fulfill many of the same objectives of investigative journalism. New-journalism organizations like Talking Points Memo actually recruit their readers to assist in the reporting process by scouring public documents and fact-checking information. In a world in which everyone is a publisher, some new models of investigative journalism will emerge that harness the work of individual citizens.

Will the new model of journalism using reader-generated content reach the same quality and level that “old school” journalism?

It won’t have the finish and polish of professional journalism and it won’t be nearly as well packaged, but the new model could be richer in many ways because so many people will be involved in the “reporting” process. There will also be new aggregators emerging online that gather the work of citizen journalists and package it professionally.

What is the future of the journalist? Will we be mostly self-employed and will the lack of funds eventually affect the quality of our work?

Journalists will need to think more about their personal brand than the brand of the publication they work for. Many more of them will be freelancers in the future, but they can still make a good living by selling their services to various outlets and by publishing in multiple media. They will need to be more specialized in focus but more generalized in terms of the media they use (text, audio, photo, video).

What is the future of weekly and monthly magazines?

That depends greatly on the audience. Computer displays can’t match the visual quality of a printed page and will never match the tactile quality. Magazines that deliver high visual quality to discerning audiences – high-end travel and lifestyle publications, for example – may do very well for a long time. Those that mainly deliver news will be under more pressure. Magazines with large newsstand circulations will probably do better than those that deliver principally through the mail because people are accustomed to reading them when out of the home. However, mobile news services may blunt much of this advantage over time. I think Brides magazine has a long life in print ahead of it. I’m not sure The Economist does.

Should we blame publishers for the current crisis in the same way US car makers are being blamed for not seeing their problem coming?

Journalists aren’t responsible for this crisis. The business executives who failed to understand changes in their audiences that were apparent a decade ago deserve most of the blame. They considered the Internet to be simply another distribution medium for their printed products and they failed to adapt their services for the unique characteristics of the Web. They also failed to adjust their sales models to target small and local businesses. They placed their bets on classified and department store advertising, and as those revenue sources were taken away or went out of business, they had nothing to fall back upon. Even more damaging was the consolidation spree of the last 10 years that plunged many publishers into heavy debt. Most of them will never recover. The burden of debt service handcuffs them from making meaningful change in their business.