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

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

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

Second Try

GrowthSpur CEO Mark Potts

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

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

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

QuickBooks For Community Media

Media blogger Jeff Jarvis will advise GrowthSpur

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

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

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

Sticking to Its Knitting

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

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

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

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

Ken Doctor is one of those rare breed of editors who understands the business side of newspapering. After spending nearly 25 years as an editor at papers ranging from alternative weeklies to the St. Paul Pioneer Press, he moved to Knight Ridder corporate to help lead the company’s push into new media. Doctor ultimately worked on editorial, strategy and content services for Knight Ridder Digital, ran its online content division for five years, a position that had him managing a P&L  and scouting out new sources of revenue. He’s currently an Affiliate Analyst With Outsell, a research and advisory firm focused on the publishing, information, and education industries.

Doctor is fundamentally optimistic about the reinvention of the industry to come, but he worries about the estimated 800,000 stories that Americans won’t read this year because reporters around to write them. In this interview, he assesses the various rescue strategies that have been floated, the struggles publishers are having with reinvention and the silver lining behind the nearly 15,00 newspaper layoffs of the last two years.

Paul Gillin spoke to Ken Doctor on August 5th. Here are highlights of the 33-minute conversation.

Listen to the interview (33:23) (right click to download)

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

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

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

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

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

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

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

The Times Regrets All the Errors

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

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

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

Daylife Draws Big-Media Attention

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

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

Miscellany

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

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

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

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

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

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

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

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

One popular new model for paying for journalism leaves funding up to the journalists. That’s not going to fly in the long term, argues Karthika Muthukumaraswamy on the Online Journalism Blog. Bootstrap operations like Spot.Us do have promise in that they enable enterprising journalists to fund work that wouldn’t otherwise get done.

The problem is that philanthropic and publicly funded organizations like it and Pro Publica are becoming a crutch for cash-strapped mainstream news organizations that no longer have the means to pay for hard-to-get information. Their solution is to push the funding back on the reporters, who then have to scrape by on subsistence income in order to pursue their stories. The model doesn’t scale, she argues, and it won’t work for journalists who have families and  mortgages.

Robert Picard would beg to differ. “The primary value that is created today comes from the basic underlying value of the labor of journalists. Unfortunately, that value is now near zero,” he writes in the Christian Science Monitor. Publishing’s traditional high barriers to entry used to place a premium on publishing space and therefore on journalism. No more. Today, technology is “de-skilling” journalists and making everyone a publisher. That means journalists need to redefine their value, and it won’t come from arguing that their work occupies some kind of moral high ground.

One approach might be to specialize. “The Boston Globe, for example, could become the national leader in education and health reporting because of the multitude of higher education and medical institutions in its coverage area,” writes Picard, an oft-published professor of media economics at Sweden’s Jonkoping University. “Similarly, the Dallas Morning News could provide specialized coverage of oil and energy.” Whatever the solution, it doesn’t mean just Twittering and blogging, but really connecting with an audience’s most sacred needs.

Value Prop

Much as we hate to say it, Picard has a point. There’s a lot of focus on tools right now, as if video cameras and iPods have some kind of intrinsic journalistic value. Those are merely tools, and using new tools to do the same old thing doesn’t change the value of the product. Unfortunately, Muthukumaraswamy also has a point. If the value of journalism has been debased to the point that journalists need to go door-to-door to buy food, then a lot less good journalism will get done.

That doesn’t mean that the traditional model of fat union contracts and generous travel budgets are a good alternative. Today, they’re not even an option. Journalism must become more efficient to survive, and the new models for doing that are still under development.

What do you think? Will journalism be better in a world in which journalists themselves are responsible for funding their work?

The battle over concessions by Boston Globe union is over and management won. Was there ever any doubt? By a decisive 366-to-179 vote, the Boston Newspaper Guild voted to accept a package of pay cuts, benefit reductions and other concessions that is harsher than the one the union rejected last month. Owner New York Times Co. responded to the earlier contract rejection by unilaterally slashing wages 23%. That forced the union to dance a jig and recommend a revised package that had even deeper benefits reductions. Despite considerable grousing in the ranks, Guild members ultimately decided they’d better accept the current deal before things get any worse. Still, widespread layoffs are expected.

Meanwhile, Boston Business Journal editor George Donnelly reports that the Globe’s cross-town rival Herald just closed its fiscal year with a $2 million profit. It seems the publisher started cutting costs and working with the union long ago, while the Globe shoveled money into a pit. So who’s more likely to survive if the recession continues? Ask staffers at the Seattle Times, who believed that the Post-Intelligencer was the weaker of the two local dailies before Hearst abruptly pulled the plug.

Miscellany

Congressional Quarterly, which has been on the market for much of this year, has been acquired by rival Roll Call, which is part of the Economist Group. This can’t come as happy news to CQ employees, who now face the awkward task of merging with an organization that would have been happy to put them out of business. Still, they could do worse than work for The Economist. “The new CQ-Roll Call Group will have the largest and most experienced newsroom covering Washington,” said Laurie Battaglia, managing director and executive vice president of Roll Call Group. Mike Mills, editorial director at Roll Call, will call the shots at the combined entity.

Steve Yelvington has a well-balanced reality check on the future of journalism. The decline of print isn’t the end of journalism, he argues, but it will require a shape-shift. While Yelvington does succumb to some finger-pointing (“Newspapers could have invented search, directories and social networking. Few even tried.”), he ultimately puts the challenge of reinventing journalism at the door of journalists: “How long and how well newspapers and professional journalists persist in our future will be determined in part by how well they identify new ways to play socially valuable roles.”

Cox Enterprises continues to divest its newspaper holdings. It just sold three North Carolina dailies and 10 weeklies to John Kent Cooke, a media, sports and real estate magnate. Cooke’s son will run the North Carolina operation.

Mark Potts analyzes Rupert Murdoch’s plans to knock off The New York Times with The Wall Street Journal, dubbing it a “scorched earth strategy.” Murdoch appears content to let the Times Co. implode under the weight of its own debt while gradually moving the WSJ into its mainstream news stronghold. “There’s been some speculation that Murdoch’s real endgame is to buy the Times on the cheap, but why bother? If he makes the Journal the dominant national paper as the Times withers, he’ll emerge the winner,” writes Potts. It’s a good point. Murdoch biographer Michael Wolff has said that the Australian media magnate “sits around all day and thinks about buying The New York Times,” but why bother when market forces may make that expense unnecessary?

Darrell Laurant writes: “I run something called The Writers’ Bridge that is unique in the freelance universe. Not only do we match ideas with markets, but we generate lots of ideas for writers. We handle each member individually, and we’re good at hand-holding. My biggest frustration is the inability to recruit journalists, a group I see as the guts of this endeavour. I am currently a columnist/feature writer for a mid-size daily in Lynchburg, and I think I have something to offer. It costs $10 a month, but I’m willing to offer two months free to anyone who’s been laid off, just to check us out. After that, it’s $10 a month.” Let us know if it helps, OK?

Ahwatukee Foothills News staff writer Krystin Wiggs writes about being victimized by an elaborate hoax concocted by a young man who claimed to be a gifted and successful chef. The man, Vinayak Gorur, convinced Wiggs that he had won scholarships to culinary school and landed a sous chef job at a top restaurant at the tender age of 21. Gorur even enlisted an accomplice to masquerade as head chef at the restaurant for a phone interview. The guy even duped his parents. Wiggs is sick, angry and apologetic about the whole thing, but her story will resonate with any reporter who had gone through the usual motions of reporting a seemingly benign human interest story. How often do we go the extra mile to verify a story when everyone appears to be so genuine?

And Finally…

Slate has a clever video mashup of what media coverage of the moon landing might look like today. Many of the quotes are clipped from the last presidential election, but work just fine. Best scene: Wolf Blitzer interviewing a Neil Armstrong avatar.

For sheer satirical hilarity, though, we can’t beat this clip from The Onion.

Gannett gave the industry some welcome good news by posting quarterly results that actually exceeded expectations. In the wake of three layoffs of steadily increasing scope over the past year, conventional wisdom was that Gannett would lay a stinker on investors when it reported earnings this week. Instead, its stated results of 46 cents per share beat Wall Street expectations by nearly a dime. “Demand seems to be firming up a bit in some categories and in some geographic locations,” the CFO said.

Maybe those results are a harbinger of better times, because it looks like advertising spending is going to drop 2% next year. That would ordinarily be terrible news, but in 2009 it’s cause for celebration. That’s because ad spending is off 14.5% this year and 18% in the second quarter alone, the worst showing since the Marx Brothers were movie marquis headliners. The new estimates come from Magna, a unit of the Interpublic Group and a closely-watched monitor of advertising activity. The forecaster expects growth to resume in the second half of 2011 but to expand at an anemic 1% annually through 2014. Online advertising – particularly search – will lead the way, although local TV, national cable and outdoor venues will also grow. Not surprisingly, the big losers are newspapers (3.7% annual decline through 2014) and magazines (3.3% over the same period). Magna’s Brian Wieser says the newspaper industry is in “terminal decline.”

Buy BusinessWeek For Less Than a Copy of BusinessWeek

Have you always wanted to own a newsweekly? Well, you can buy BusinessWeek for $1. If that sounds like a bargain, keep in mind that the magazine is reportedly set to lose $75 million this year. That’s down from profits of up to $100 million during the dot-com boom. Times certainly have changed.

Alan Mutter’s prescription is for BW to niche itself at the high end, doing deals with peddlers of pricey Wall Street reports that funnel subscribers their way. He also suggests that the magazine could become the ultimate destination for crowd-sourced financial information, since there are so many smart people out there who want to give advice. His ideas would be plausible if they didn’t involve completely reinventing the culture and the brand at a business that’s hemorrhaging money right now. Perhaps a buyer could effect that transformation by firing 90% of the staff and starting over. There’s also the small problem of the complete irrelevance of a weekly in a world that can barely even support dailies any more.

However, Alan M. Webber thinks BW is a steal at $1. The Fast Company co-founding editor thinks the title is perfectly positioned to become the American foil to The Economist, which seems to be doing just fine these days. “BW could bring fresh energy, opinion, and perspective to all of the change in business that is so hard to make sense of,” he enthuses on Huffington Post. So what are you waiting for, Alan? Just a buck.

Shirky on Journalism’s Future: Put Down the Phone!

Clay Shirky may not always come up with breakthrough ideas, but he has an uncanny ability to derive sensible trends from apparent chaos. Read Shirky’s views on the future of journalism from the Cato Institute. His basic insight: journalism as we’ve know it has long been supported by advertising inefficiencies that made it possible for coupon clippers and automobile buyers to fund journalism that they didn’t personally care about.

The Internet has removed so much inefficiency from the market that these subsidies are no longer viable, so journalism must find sustainable new models. Shirky sees three: crowdsourcing or “participatory” journalism, database mining and patronage.

Working journalists might be most interested in his description of Off the Bus, a Huffington Post venture that monitored polling places using a crowdsourced model last year and achieved remarkable success. Off the Bus couldn’t have worked without a dedicated team of behind-the-scenes editors who made sense of reports filtering in from across the country. That’s journalism, but it’s not what Shirky terms “the ‘phone call’ model of reporting — one paid journalist talking to one source at a time.” Instead, the journalist is an organizer and interpreter.

Shirky  also likes the database-driven style of journalism practiced at The Smoking Gun, which mines public documents and databases for insights. Again, the idea that journalism requires phone calls and reportorial shoe leather is losing relevance in an age when shoe leather is becoming free.

Miscellany

San Diego Weekly Reader and the new owners of the San Diego Union-Tribune are engaged in a vicious battle over allegations by former employees of U-T owner Platinum Equity Partners that the investment firm engaged in ritual acts of sexual harassment, including sex-for-favors and hush-money payments.

The dispute originated from lawsuits filed anonymously by three former employees in 2007, which were ultimately dismissed. Reader describes the allegations in detail and also republishes a lengthy warning shot letter by a Los Angeles lawyer called “Mad Dog” Singer that threats all kinds of terrible consequences if Reader goes ahead with its story (which it did) or publishes Singer’s letter (which it also did). The dispute tarnishes some of the shine on Platinum, whose rescue of the U-T staved off possible closure of the paper. The Reader also tells of Platinum’s latest venture: to take over bankrupt auto-parts maker Delphi Corporation with help from General Motors and Federal bailout money.

Mark S. Luckie has been running 10,000 Words for nearly two years now and he celebrates the liberation of unemployment in an uplifting essay entitled “Why being an unemployed journalist is the best thing to ever happen [sic] to me.” Luckie celebrates his layoff last December as a chance to redouble his efforts to become a multimedia journalist and do the blog right. He also praises other grass-roots efforts by former employees of the East Valley Tribune and the Newark Star-Ledger as evidence that “all the talk of journalism dying is hooey.” Several unemployed journos contribute supportive comments about their own reinvention, but one notes that Luckie fails to address a basic question that also occurred to us: how is he making a living?

Last week’s demise of The Printed Blog evidently didn’t put the final nail in the blogs-in-print coffin. A UK startup called The Blog Paper is taking a run at the same idea. It’s inviting bloggers to submit their stuff to a community ratings machine that will determine which entries are most print-worthy. Co-founder Anton von Waldburg thinks this Digg-like functionality is distinctive as he repeatedly tells Online Journalism Blog. One of the most highly-rated entries on the site today is an idea to put advertising on keyboards (right). Good luck with all that.

Two upstate New York newspapers have dropped a day from their publishing schedules. The Tonawanda News cut its Monday edition and will now publish Tuesday through Saturday. The Medina Journal-Register eliminated its Tuesday edition and now publishes four days a week.

Did you know that 4,000 bloggers contribute to Huffington Post, all of them for free? Michelle Haimoff cites this statistic in a HuffPo column proposing a rewards system for bloggers. Haimoff says her proposal is a way to “create a sustainable business model in the long term,” but we think getting people like John Kerry and Larry David to write for free is a pretty good model to begin with.

Back in January, we told you about The Printed Blog, a venture by serial entrepeneur Josh Karp that sought to flip the online publishing model by delivering blogs in print. The idea was to take the best entries by local bloggers and rush them into print for consumption by busy commuters, whom advertisers would want to reach. “If his idea reaches its full potential, he’ll have hyper-local twice-daily editions in thousands of communities around the US,” we wrote. “Chicago alone could support 50 localized Printed Blogs.”

Well, it turns out Chicago could barely support even one Printed Blog for more than a few issues. Josh Karp shut his doors last week, having poured more than $100,000 of his own money into a venture that barely got off the ground. The Printed Blog published 16 issues in seven regions and it was a pretty interesting read. Its slogan – “Like the Internet, only flammable” – betrayed its playful nature and the website is the essence of Web 2.0 shareability. The venture was a victim of a harsh economy, in part, but also the reality that people apparently don’t want to read 13-hour-old blog entries about the White Sox in print, as the Christian Science Monitor account points out. It was a long shot that drew skepticism from the start, but it generated huge publicity for Karp, who we hope will quickly find a more successful outlet for his ample creativity.

Karp posted several closing entries on his blog, including this one about the lessons he learned from the venture. Among the half-dozen he lists are this one: “Instead of focusing on one thing – revenue – on a small enough scale to prove our model, I decided to try and publish the paper in Chicago, San Francisco, New York, and Los Angeles… I got carried away, and we spread ourselves too thin too fast.” We’re going to be seeing a lot of entrepreneurs try to fill the void left by dying newspapers in the coming years and they would do well to read Karp’s advice. Or even bring him on as a publisher.

The Flap Over Free

We don’t know if you’ve followed Wired editor Chris Anderson’s latest book, Free: The Future of a Radical Price, but the premise is worthy of attention from publishers. Anderson’s premise is that the Internet has created a new competitive dynamic that is relentlessly forcing the price of all things digital – and some things physical – toward zero.

Software that once commanded six-figure license fees is now free.  The entertainment industry has all but abandoned efforts to copy-protect music. Artists now give away music and make money on concerts.

Anderson further argues that other businesses may be pulled into the low-cost business model orbit. T-shirts are basically free, but the cost of a Major League Baseball logo is $30. Casinos give away flights and hotel rooms and make it back on gambling. Ryan Air has staged promotions in which its flights are given away for free while revenue is derived from value-added services like luxury meals or gambling.

This has big implications not just for publishers but for anyone whose value is predicated upon delivering content. Anderson’s premise is controversial and scary to many people. Others simply don’t buy it, including Malcolm Gladwell, who penned a well-argued review in The New Yorker last week. Gladwell points out that Anderson’s argument ignores the value – and cost- of the distribution network. He notes that YouTube makes most of its money from advertising sold against professional programming that it buys from entertainment companies. Thus, the company’s supposedly free content model is really underwritten by real cash money.

Anderson fires back with a respectful rejoinder, telling the story of GeekDad, a blog he started a few years ago that is now run by a largely volunteer workforce. These writers do a heckuva job delivering a product that would have formerly required an expensive publishing infrastructure, and they do it for personal fulfillment, Anderson says. He suggests that this is where the news model is going: “I can imagine far more subjects that are better handled by well-coordinated amateurs than those that can support professional journalists. My business card says ‘Editor in Chief’, but if one of my children follows in my footsteps, I suspect their business card will say ‘Community Manager.’ Both can be good careers.”

True to form, Anderson is giving away digital copies of Free (you can read the whole thing here) but charging for the book. Publicity will no doubt help sustain his five-digit speaking fee. That’s further support for the book’s premise. It isn’t helping his magazine, though, which is among the worst-performing print magazines of 2009. Free can apparently only get you so far.

Miscellany

The Cincinnati Enquirer appears to be shouldering more than its share in the latest round of Gannett Co. layoffs. The paper has laid off 101 people out of a total staff estimated at between 800 and 920. It has also laid off the entire staff of CinWeekly,  companion publication aimed at young readers. Meanwhile, the Detroit Free Press is escaping the axe entirely, but that’s because it and its JOA partner the Detroit News have already cut 17% of their combined workforces since December.

More than half of business communicators surveyed by Ragan Communications think Twitter is a fad that will crest and decline as people run out of interesting things to say. The 28% of respondents who have a microblogging policy in place credit it with improving employee engagement, helping customer service, building reputation and boosting website traffic. Another 40% have no microblogging plan in place. EMarketer remarks on Twitter mania, noting that when people start attributing world-changing characteristics to a new technology, it’s time to start worrying.

The New York Times Co. has extended until late this month the deadine for bids on the Boston Globe. The move is intended to give prospective bidders (three at the moment) time to see if advertising revenue has leveled off and whether the Newspaper Guild approves a tentative contract containing $20 million in concessions. Meanwhile, a lively discussion is going on within the Guild ranks over whether to approve the proposed deal.

A federal judge has cleared the way for Journal Register Co. to emerge from bankruptcy with 90% of the company in the hands of its debtors. The company’s reorganization plan had been held up pending resolution of a dispute over a $1.3 million “shutdown” bonus, which will pay some senior managers to lay off staff and shut down publications. Opponents argued that the bonuses are excessive and unwarranted, but Judge Allan L. Gropper ruled that the fact that the fact that the plan was approved by secured lenders and the company’s creditors committee justified its validity. Under the reorganization plan, JRC gives up 90% of the company in exchange for $225 million from lenders.

And Finally…

The comedy team of Bob & Ray once had a skit about an idea called edible food packaging. It turns out the notion may not have been so far-fetched, as publishers are trying every possible idea to make their print products palatable. In Moscow, the the GazetaPacket is delivering news, crosswords, recipes and advertising on printed paper bags. It’s been running since last August. Editors Weblog tell of other ideas, like Bill Shein’s suggestions for edible paper, martini-flavored ink and naked women on the cover. That last one’s been tried and apparently doesn’t work, but you know what they say about if at first you don’t succeed…

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

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

Some Good News, Some Bad News on Ad Front

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

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

Overzealous WaPo Marketer Ruffles Feathers

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

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

Miscellany

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

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

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

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

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

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

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

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

Time magazine writes about the first crop of graduates from a new master’s program at the Medill School of Journalism that aims to blend programming and journalism skills. Medill is the most prominent of several academic institutions that are dabbling with crossover programs that seek to make the news more accessible and multi-dimensional through technology. One outcome of the students’ labors has been NewsMixer (right), a site that enhances the reader commenting experience by enabling contributors to start discussions, post quick tweet-like messages or write thoughtful letters to the editor about stories or elements within stories. The text is annotated with these comments and questions and Facebook Connect integration takes the conversations to other venues.

Most of the students in the Medill program are techies. They spend three quarters learning the craft of traditional reporting and then team up with students from the traditional journalism side to develop an application that delivers information in a new way, enhances the reader experience or makes journalists more productive.

Speaking of new ways of presenting news, a group of senators began working on a bill to overhaul of the US health care system this week, but NPR turned the camera around on the swarm of lobbyists who filled the hearing room. The radio network published photos of the scene, annotated with information about the lobbyists pictured there. And it’s asking readers to contribute information about people the staffers couldn’t identify.

Also, take a look at Newsy, an online video site that aggregates perspectives on important stories. Jessi Stafford, a recent University of Missouri graduate and Newsy intern, told us about it. “Newsy.com creates videos that analyze and synthesize news coverage of important global issues from multiple sources. Its method of presenting the ways in which different media outlets around the world are covering a story lends itself well to understanding complexities.” Newsy aggregates coverage from all kinds of news outlets and presents it in a packaged video format similar to what you might see on the evening news. A newsy “anchor” guides the viewer through a variety of perspectives and attempts to explain what’s going on using these multiple sources. We’re not sure it’s easier to follow than a print digest, but it’s certainly different. See an example below.

You Are What You Tweet

The Australian media watchdog site New Matilda comments upon the ethical dilemmas presented by Twitter. It tells the story of Sydney Morning Herald technology writer Asher Moses, who was publicly embarrassed recently over comments he made about a sex scandal involving a prominent former rugby star. Moses’ comments were made during his off hours, but hasn’t stopped many Australians from questioning the journalist’s impartiality.

Julie Posetti wonders whether Twitter’s humanizing capacity is a blessing or a curse for journalists. Twitter “merges the professional and the personal, the public and the private — blurring the lines of engagement for journalists trained to be didactic observers and commentators rather than participants in debates and characters within stories,” she writes. Twitter makes journalists more accessible and thus more appealing, Posetti notes, but should people who are supposed to be rigidly unbiased be allowed to share their views on anything? Moses says he’s made up his mind. “He’s now decided to restrict his Tweeting to purely work-related messages.” BTW, it’s worth checking out Posetti’s Top 20 Tips for Journo Twits.

Miscellany

Small and mid-sized newspapers may be a bargain in the current market, according to a study by brokerage firm Cribb, Greene & Associates. Despite the fact that smaller papers haven’t suffered the steep losses of their big-city brethren, many publishers are putting them up for sale out of fear of losing further asset value. Asking prices are between four and eight times earnings before income tax, depreciation and amortization (EBITDA), compared to 10 to 14 times EBITDA a few years ago, the firm said. This is despite the fact that revenue declines at these papers have been only about half that of major metro dailies.

At least two potential buyers for the Boston Globe have emerged, and owner New York Times Co. is doing everything it can to welcome them. Former advertising executive Jack Connors and private equity investor Stephen Pagliuca have received permission to team up on a bid. There is also reportedly a rival bid by former Globe executive Stephen Taylor, whose family originally sold the paper to the Times Co. for $1.1 billion in 1993. The Times Co. sweetened the pot by announcing that buyers would only have to assume $51 million worth of pension obligations for the Globe and another $8 million for the Worcester Telegram instead of the full $200 million+ for which the current owners are liable. In an unrelated event, the paper’s editorial page editor, Renée Loth, announced she is leaving the paper after 24 years for unspecified new adventures.

Circulation at the Los Angeles Times passed one million in 1961. Last month it passed one million again – only headed the other way. Edward Padgett remembers. Meanwhile, the revolving door continues in the top editorial ranks: John Arthur (left) is out as executive editor after 23 years at the paper. A memo from Editor Russ Stanton makes it clear that the decision wasn’t Arthur’s.

Microsoft CEO Steve Ballmer says media companies should stop waiting for the market to bounce back because it isn’t going to bounce back. In the future, “All content consumed will be digital, we can [only] debate if that may be in one, two, five or 10 years,” he told the Cannes Lions International Advertising Festival, where he was named media person of the year. What’s more, advertising will continue to migrate online, leaving a smaller pie for traditional media companies to share.

Gannett Co. will lay off 1,400 people, not the 4,500 that was rumored. Still, that brings to 5,400 the total layoffs in the past year, which is about 12% of the company’s workforce. Gannett Blog is tracking the reductions, both announced and unannounced, from reports submitted by employees at local Gannett offices. As of this morning, the count is up to 205.

Magazine publishers might want to catch the next flight to London to find out what the heck they’re doing right at The Economist Group. The publisher of The Economist just reported a 26% jump in profit on a 17% increase in sales in the first quarter. Circulation grew 6.4% to nearly 1.4 million while Economist.com ad revenue leapt 29% and page views climbed 53%. Don’t these people know the media is dying? Interestingly, The Economist enjoys a much hipper image in the US than it does in its native land. In fact, the company just launched a new video ad that portrays a young man walking on high wires across a European city, seeking to highlight its appeal to young readers.  The average Economist reader in the US is 39 years old. In the UK, where the magazine has a more serious image, the average if 47.

We’ve been working our way through the social media and journalism sections at OurBlook, a Web venture that seeks to combine some of the best attributes of blogging and in-depth book writing. Editor Gerry Storch and Founder Paul Mongerson, who both have extensive media experience, have posted more than 50 interviews and first-person opinion pieces from people who care about the future of journalism. We haven’t read them all yet, but here are some excerpts we noted from the 35 or so we’ve completed so far. More will follow later.

OurBlook is inviting more people to contribute to the discussion by signing up on its website. What’s a blook? It’s a cross between a blog and a book.

From Robert Brown on Social Media

Brown is President of RDB Consulting

“Web analytics is the mechanism that will drive the proliferation of targeted messaging across the Web to users via the ever-growing array of social media tools…[Mike] Orren [founder of Dallas-based Pegasus News] calls this convergence of media into one vast network ‘Web 3.0.’ The idea of a single website as a source of content is quickly becoming archaic. As Orren says, …’With Web 3.0, it no longer matters where the information lives. Once you post something, it will be quickly disseminated via social networks to those users who care about the information.’”

From Joe Shea on the Future of Journalism

Shea is editor-in-chief of The American Reporter

“The biggest issue is the failed model. Journalists need to own their own news publications, not simply toil for the people who own them…[T]here’s really no point in supporting other people with our work when we can support ourselves with it. The American Reporter was founded to make that possible when journalists are ready for it. We don’t care how long it takes; we always knew they would be slow to get off the corporate teat and start walking on their own.  When that happens, and great news organizations owned and operated solely by journalists who are their own bosses exist all around the world – that’s when a newspaper war will erupt, and the world will find journalism anew. It won’t be so boring then.”

From Michael Saffran on the Future of Newspapers

Saffran is addjunct professor of communication at Rochester Institute of Technology

“Lifting the newspaper/broadcast cross-ownership ban could benefit both newspaper and radio industries; however, rather than serving as an open-ended gift to media conglomerates, repealing the ban should be tied to stricter radio ownership limits. According to an FCC study, newspaper/television station cross-ownership enhances the quantity and quality of TV news and public-affairs programming. Radio could similarly benefit from partnerships between broadcasters and publishers because most newspapers (with a few notable exceptions) are, much like radio, inherently local. Thus, the addition of print reporters to the small news staffs (if they exist at all) of cross-owned radio stations could enhance local-radio news … an area in which local radio is currently underperforming.”

From If Newspapers Fold, We’ll Adjust by Gerry Storch

Storch is the editor of OurBlook

“I think what will replace the newspaper in [my hometown of] Naples, [Fla.], and newspapers elsewhere, will be a pricy on-line newsletter. It will have a cheap, barebones staff to cover the basic business of the town – the city council, the school board, the police beat – and a couple veteran pros to provide an insider’s knowledge of what’s going on and make it worthwhile for readers to cough up $100 a month for a subscription, or whatever it costs to make a profit.  So people who want straight news will still be able to get it. The media will continue but in a much different form, and they won’t be the mass media any more.”

From Paul Conti on the Future of Newspapers

Conti is an instructor in communications at the College of Saint Rose in Albany, N.Y.

“Frankly, my students want and expect everything ‘on demand.’ They are not specifically loyal to media brands. They do not care what the source of their media content is as long as it entertains or informs them.  If I were running a newspaper’s city room, I’d be sprinting to create more ‘TV News Stories’ that people can watch on their websites.  A few newspaper companies are doing this, but the vast majority [of them] simply send one of their print reporters out into the field with a substandard consumer camera to record a news conference.  Yes, that’s content, but it isn’t good content and it won’t attract younger readers. They need to mimic the styles that TV reporters do with visualizing stories. Every story in the newspaper should have a companion video version available on demand.”

From Sean Dougherty on the Future of Journalism

Dougherty is vice president at Stern + Associates, a public relations firm

“I am one of those old timers and I love print newspapers, ink stains and all, but that is no reason to ignore reality: the value of the placement is the journalist’s brand and reach, not whether or not the information originally appeared on paper. Online articles get forwarded, increasing influence. Bloggers prefer to blog about topics where they can link through to what they are commenting on.  Online articles are more easily fed into your own distribution channels, whether it is a personal blog, e-mail distribution list or website.  While streamed video clips are usually associated with sketch comedy like ‘Saturday Night Live’ or ‘The Daily Show,’ it is unlikely that Harvard University Professor Michael Porter’s recent interview on ‘The Charlie Rose Show’ was seen live as often as it was viewed online based on the number of bloggers who linked to the segment.”

From Andrew Degenholtz on the Future of Journalism

Degenholtz is president of ValueMags, a magazine subscription marketing agency

“Many anticipate that the modern day journalist will morph into the ‘backpack journalist,’ where not only good writing and grammar skills will be valuable, but taking photographs and shooting video will almost become a necessity. As we’ve already seen, the ‘citizen journalist’ also plays a large role in this new media landscape. Bloggers getting press passes to news events once reserved for the traditional media will only help hungry consumers get even more specialized information. But one thing remains the same: good writing is still good writing. That won’t ever change.  If you have something to say, people will read, no matter how it’s packaged.”

From Nigel Eccles on Future of Papers

Eccles is co-founder and CEO of UK website hubdub.com, “a prediction market where people trade predictions on the outcome of running news stories or future events.”

“Blogging is not nearly as big in the UK as it is in the US. For example, there are only a handful of high quality political blogs [in the UK] compared with hundreds in the US. One of the reasons that blogging is so popular in the US is that it is written in an informal and familiar style and tends towards sensationalism. The UK press is much closer to that style than the US press (where every other article seems like it is written for the Pulitzer Prize committee).” (Telegraph.co.uk photo)

From Paul Swider on Papers’ Future

Swider was a reporter with the St. Petersburg Times until he was laid off in May, 2008

“The larger issue, and the one that makes me so ‘popular’ with my erstwhile journalism colleagues, is humility, or its lack in the newsroom. Most reporters are well-meaning and believe they are doing a public service, but that is a legacy from an era when there wasn’t that much information available to the general public. Now that there is, to persist in the attitude that the newspaper is the source of all information is kind of silly. Most government meetings are televised, many documents are publicly available, dissatisfied workers that were the source for many an exposé can now publish directly themselves to the Web, so a journalist isn’t as indispensable as before, and may be superfluous in some contexts.”

From Louis Sarmiento on Social Media

The interviewer comments, “Big-name athletes and entertainment celebrities seem to have taken to Twitter because 1) they can control their message, 2) the message is short and non-taxing, 3) they bypass reporters, 4) they can have ‘contact’ with fans that really isn’t contact and 5) fans end up thinking they have contact though they really don’t.”