Recent downsizing initiatives in newspaper land:

• St. Louis Post-Dispatch offers 60 buyouts – Employees must be at least 50 with 10 years of service. The move is expected to save up to $4.4 million a year, or $73,000 per employee.
• The Baltimore News-American will lay off an undisclosed number of employees, citing the sluggish economy in the area.
• The Daily Herald, third largest newspaper in Illinois, will lay off about 40 employees. Surprisingly, circulation has been flat at the paper, compared to the overall pattern of declines throughout the U.S.
• The St. Paul Pioneer Press said 15 employees will take buyouts, including 10 newsroom staff members. The paper is hoping to eliminate 30 positions in all.
• Media News Group of Denver said it’ll cut back on staffing at some of its Northern California papers. The publisher hopes to eliminate jobs through attrition, but said layoffs can’t be ruled out.
• The Tennessean offered voluntary buyouts to 15 staffers. The paper has already frozen hiring and cut issue sizes by about six pages.

Media-watchers have found some reasons to be optimistic recently:

• Deutsche Bank thinks the alliance between 17 newspapers companies and Yahoo could stanch the industry’s bleeding much faster than expected, reports Editor & Publisher. Analysts think that the revenue from Yahoo’s HotJobs recruitment site, in particular, could add 20% to newspapers’ online revenue growth by the second half of 2008. Taken together, the online boost from the Yahoo alliance could pull newspapers out of their slide and turn them toward revenue growth by 2009, the authors say.

The forecast is positively giddy, given that few facts and figures have been released since the alliance was announced last November. It also seems optimistic in light of signs of a coming economic slowdown and softness in recruitment advertising. One odd note is the study’s description of the display advertising business as growing “gang-busters.” In fact, the most recent Interactive Advertising Bureau data actually sees a decline in display ads as a percentage of overall online advertising. While the overall display market is growing, it’s a stretch to characterize it as being on a tear.

• Ad spending on newspaper websites increased 19.3% in the second quarter, according to a Newspaper Association of America survey cited in MediaPost. Of course, the decline in print advertising revenue for the quarter exceeded the total online revenue of the newspapers cited in the study. But it’s nice to see the growth trend continue.

• E&P asks, plaintively, “Is Ad Revenue Stabilizing?” That’s because Wachovia Equity Research reported that newspapers suffered only a 7.2% decline in ad sales in July, which is less than the 7.5% and 8.1% drop-offs reported in May and June. While the news is heartening, it’s probably best to wait for a few more months’ worth of data before forecasting a soft landing.

• Writing for the Seattle Times, John Harner visits a couple of veteran journalists and turns up all the stereotypes about bloggers. It will be a step forward when journalists stop dismissing bloggers as just a bunch of undisciplined vermin and start working with this democratic medium to make it better.
• MediaPost cites the unusually dire language financial firms use in recent forecasts for the newspaper industry. Moody’s lowered its outlook for the New York Times Co. to a rare “negative” rating. Fitch Ratings noted that at least half the recent declines in revenue are due to “secular” rather than “cyclical” factors. That means that money ain’t coming back. Fitch then piles on by forecasting that newspapers’ online revenue will be under continuous pressure from the large number of alternative venues that advertisers have there.
• Maybe the salvation of print is scratch-n-sniff advertising, which is being tried out by the LA Times, according to Forbes. At least that’s one idea that can’t be duplicated online. Or can it? Back in the dot-com bubble, a startup called DigiScents invented a product that could transmit smells over the Internet. A company called TriScenx is still pushing the concept. It takes all kinds.

Three recent items of note:

MediaPost reports that newspapers have a surprising new competitor in eBay. The auctioneer’s new classified advertising service, which facilitates transactions between people who live near each other, is a potentially powerful force in classified advertising, which is newspapers’ most profitable business. The article goes on to suggest that newspapers should partner with eBay, which is kind of like thanking your host for the glass of poison he’s just offered you.

The VP of Marketing at Eluma makes a case for news organizations to get local again. In an iMediaConnection opinion piece that’s otherwise a shameless pitch for his company’s products, Joe Lichtenberg cites a B&C/Magid Media Labs study of 2,000 Internet users that found that only 13% use the Web for local news. However, 60% said they’d be likely to use a local TV site for topics that include health, real estate, in-depth sports and local events. Yes, it’s all about local. Years ago, a lot of papers got New York Times-envy and decided to expand their international coverage. They’re paying for that now. The few newspapers that survive the coming nuclear winter will be those that refocus aggressively on local issues and leave White House press conferences to the AP.

Editor & Publisher, whose coverage of the meltdown of its core market has been largely uninspiring, does come through with a provocative argument by Steve Outing that newspapers should get over their obsession with objectivity. Harking back to the finest days of muckraking, Outing argues that the media’s efforts to tell both sides of the global warming issue is as dumb as telling both sides of the polygamy issue. The fact that some whackos still believe global warming is just a cyclical atmospheric change is no reason to give them equal time. Newspapers should advocate for their readers to get active and do something, Outing says. It’s interesting advice. In the new world in which everyone is an opinion writer, not having an opinion may make newspapers look clueless.

Two published items caught my attention today because they focus on issues that are so microscopic in the context of the newspaper industry’s accelerating collapse that they barely seem to merit attention. Both appear in Editor & Publisher.

Letter writers Leo J. Shapiro, Erik Shapiro, and Steve Yahn argue that “There ‘Auto’ Be A Change for Newspaper Ads” because of changing demographic trends. People are keeping their cars longer, which will lead to declining auto sales in the long term and fewer auto ads, they say. But there’s good news: more people are riding bikes and taking public transportation! So get out there and sell those bike ads. And you circ directors, start marketing more aggressively to commuter rail stations!

Auto advertising, a profitable staple of newspaper income statements, was off a disastrous 13% last year. The overall decline in US auto sales will only worsen that very bad situation. I don’t see bicycle ads picking up much of the slack. As far as public transportation goes, the authors’ characterization of the increase in mass transit ridership from 2% to 2.8% of the US population over the past decade as a “sharp” rise needs no comment.

Also in E&P, editor Joe Strup asks “Will Consolidation at MediaNews Group Kill Guild?”. This issue is over the consolidation of two northern California newspapers, a business decision that will almost certainly lead to layoffs.

Questioning the impact of a move like this on the power of the Newspaper Guild is like worrying about a dent in the fender of your car that was just stolen. Of course the Guild will lose influence. Newspaper publishers are fighting just to stay alive. Who cares about the Guild’s bargaining power when the publisher has nothing to bargain with? We don’t hear much from the once-obstreperous United Auto Workers any more, do we?

You have to wonder what service E&P believes it’s providing by focusing on minutiae like this when much weightier problems face its readers.

Recent headlines:

Post-Dispatch offers more early retirement – “Calling 2007 a ‘difficult year for the newspaper industry,’ the St. Louis Post-Dispatch said yesterday it will offer employees early retirement packages. The offer comes less than two years after about 130 employees, including about 40 in the newsroom, retired early…[the publisher said] ‘This is a great market. Our actions now will enable us to face 2008 and beyond in a much better position.'”

Sadly, no. Early retirement incentives don’t solve a systemic problem where costs are wildly out of synch with future revenues. This is putting a Band-Aid on a gunshot wound.

Sun-Times Media Group Weeklies Target Jittery ‘Daily Herald’ Employees – “In an unusual ad campaign targeting employees facing what might be the first layoffs in the newspaper’s history, the Pioneer Press group of weeklies is offering jobs to staffers of the Daily Herald in suburban Chicago.”

Kind of a good news/bad news scenario. I think it points to the growing strength of localized media. It’s actually getting cheaper to publish in print and this could lead to a resurgence of activity at town/community levels. The death of metro dailies could be accompanied by a rebirth of small-town weeklies.

AP to Shut Down Premium ‘Asap’ Service – “The Associated Press is closing down a 2-year-old premium multimedia service that emphasized nontraditional methods of storytelling, saying that it had failed to gain enough traction with newspaper clients.”

Good for AP for trying this idea, even if it didn’t play out financially. These “nontraditional” methods are the future of journalism, even if the economic model hasn’t yet evolved fully.

And finally…

At the New York Press: Layoffs, Circulation Drop, and No More Hooker Ads!– Manhattan Media, new owner of the New York Press, says it’s going to challenge the Village Voice and build a high-end audience. For starters, sex ads are gone, a move that could cost a million in lost revenue per year. Hooray for a vote of confidence in print and a decision to take the high road.

Scott Karp does the math on the lone bright spot of the newspaper economy – the growth in online business – and calculates that newspaper websites will need nearly 2 trillion ad impressions at a $30 CPM to equal their print revenue. that’s 24 times as much traffic as newspaper sites currently receive, he notes. And that’s assuming that CPMs would hold steady at $30 at those traffic levels.

The Newspaper Association of America said online advertising revenue at newspapers was up 22 percent in the first quarter. However, traffic was up only about five percent. Even if visitor growth continued at that pace indefinitely, it would be many decades before online revenue could equal print sales.

The best path for newspapers, of course, is to get away from anonymous metrics like page views and impressions and move toward an alternative model that monetizes reader engagement and contextual relevance. The trouble is that newspapers are the ultimate mass-market media vehicle. There is no historical or cultural precedent for addressing small markets, which are the most valuable ones to advertisers. The lone bright spot in the picture looks like a flashlight.

Snipping text here from a piece in Ad Age about reading habits that will go behind a paid registration wall in a couple of days:

“As new forms of media consumption, including web surfing, downloading and time-shifted TV viewing gain more of a foothold in the U.S., different generations have begun to form distinct habits. But what’s interesting is that both the old and wise and the young at heart are developing some commonalities as well, according to a new study by Deloitte.

“The consulting and advisory firm found that every generation — from young Millennials (ages 13 to 24) to Generation X (25 to 41) to Baby Boomers (42 to 60) and older Matures (61 to 75) — enjoys reading magazines. Almost three-fourths of all consumers choose to read them even though they can find the same information online. There is also a greater receptivity overall to print ads compared with internet ads, the firm found.”

This is an important point. While most major metro daily newspapers will go out of business in the coming years, lots of print properties will do just fine. Next time you’re at Barnes & Noble, visit the newsstand and look at the racks of thick magazines. There are plenty of viable business models in print. It’s just that large-circ-daily-newspaper isn’t one of them.

Publishers continue to find bright spots in otherwise dismal news. Quoting MediaPost:

“The Milwaukee Journal Sentinel, flagship paper of Journal Communications, enjoyed an online revenue boom of 46.9%, ending the quarter at $3.4 million. And Mary Junck, chairman and CEO of Lee, noted that ‘our rapid online growth has accelerated to a rate of more than 60% in the last quarter and now accounts for almost 8% of our advertising revenue, surpassing national.'”

That’s good news. However, overall revenues were off $8.5 million in the quarter, or about two-and-a-half times the total of all online business. As bright as the future appears for the online arms of daily newspapers, the rapidity of the decline in print advertising still points to painful cost-cutting if these businesses are going to survive.

What’s different about the two scenarios described in these articles in BtoB Online today?

New York Times Co. earnings fall in second quarter

McGraw-Hill Q2 earnings soar.

I’d suggest that the big difference is in McGraw-Hill’s strength in vertical publishing. If you read these brief articles, you’ll see that both the Times and BusinessWeek suffered declines in print advertising. However, McGraw-Hill’s earnings were boosted by revenues in Aviation Week and other vertical publications.

This goes to the contrast between what’s happening in the newspaper world and everywhere else. Big, broad general-interest publications like newspapers — and including magazines like Time and Newsweek — are suffering from a profusion of alternative information sources. However, certain vertical industries aren’t feeling the pinch at all and are, in fact, growing.

If you pick up an issue of Cigar Aficionado or Brides magazine, you’ll see what I mean. These publications are as fat with advertising as they ever have been. In both cases, readers enjoy sitting down with an elegant print publication and leafing through it, looking at the beautiful pictures. Newspapers, with their awkward format, grainy texture and ink that rubs off on your hands, are a much less enjoyable reading experience.

Just one more reason why it’s not good to be in the newspaper business these days.