It’s now generally accepted wisdom that, at some point, the population of people who are willing to pay for printed newspapers will decline to the point that print will no longer be a viable medium. Alan Mutter hauls out the spreadsheets and applies his trademark statistical eye to the data in a two-part entry that establishes a likely endpoint for daily print frequency.

Mutter points out that the core newspaper audience of people over 50 years of age today represents only 30% of the population. He projects that half of them will be gone by 2025 and the other half by 2040. Mutter enlists government lifespan projections in his estimates as well as survey data about the percentage of young people who read newspapers. He believes printed newspaper consumption will fall by at least 27% over the next 15 years and 50% in the 15 years after that.

“The projections clearly indicate the publishers pursuing a business-as-usual approach may find their current operations… to be unsustainably unprofitable within five years,” the Newsosaur concludes. Some variables in the calculations could change, though; advertising rates could suddenly start rising. If you believe that, we’d recommend a 12-step program.

Mutter presents three scenarios and only the most optimistic forecast has newspapers printing profitably on a daily schedule five years from now. The more likely outlook is that most papers have to cut back from daily frequency in order to remain viable, as has been done in Detroit. We believe that print newspapers will exist for many years, but we doubt that the major metro daily model has more than about 10 years left in it. Mutters calculations tend to support our opinion.
Miscellany

Charles Apple points out that surprisingly few newspapers featured the massive earthquake in Haiti on their front pages today. Perhaps that’s because deadlines have been moved up and design staffs cut in the name of cost savings? Apple points to one paper that featured a graphic headline that almost made light of the tragedy. Check out his blog and see what you think. We tend to agree with Apple.

Apple also notes that Jim Hopkins, the publisher of the popular Gannett Blog, has quietly returned to the field and is publishing as busily as ever. Hopkins shut down the blog last fall with considerable fanfare; in fact, some people thought his countdown to closure was overplayed. Just as we were becoming accustomed to a post-Hopkins existence, we learn that Hopkins is feeling more energetic and has a renewed commitment to keep the tone of Gannett Blog more civil. Here’s a brief interview on Jilted Journalists. In the months leading up to last summer shutdown, tensions between the blog and Gannett had reached a fever pitch.

What the blog gods giveth they also taketh away, and McClatchy Watch is the most recent casualty. This online watchdog, which was cast in the image of Gannett Blog, went dormant two days before Christmas. We can’t say we’re going to miss it. While McClatchy Watch was once a valuable source of intelligence about the company it follows, in the past year it’s taken on a conservative political agenda that has been distracting to the point of irritation. If the anonymous author who publishes it ever decides to come back, we hope he/she will focus on the topic at hand.

The Los Angeles Times, which maybe the most troubled title in the Tribune Company portfolio, is addressing its online competitors by moving its deadlines earlier. LA Observed says the Times‘s effort to save money by shuttering its Orange County presses and taking on production of The Wall Street Journal has forced the paper to move its news deadlines up by as much as five hours. This means that in a world in which competitors publish information in seconds over Twitter, the Times will now have a 6 PM deadline for a newspaper that hits readers’ doorsteps more than 12 hours later. Please don’t follow this example.

No matter what you may think of Google — and a lot of newspaper publishers think it’s the great Satan — you have to hand it to the search engine giant for announcing that it will pull out of the China market rather than continue to censor its search results. Google’s complicity with the Chinese government’s repressive policies has been a black eye for some time, but there are good financial reasons why it’s been reluctant to stand up for its principles: Its stock price would get hammered. In light of that fact, the decision to draw a line in the sand deserves praise. Jeff Jarvis, who recently published a book about Google, puts it in perspective. He expects Google to suffer Wall Street’s wrath but pays tribute to the company for putting its principles ahead of its stock price. Lots of discussion on that post.

Speaking of Google, did you know that it has severed its relationship with the Associated Press? That’s right: Google News doesn’t have any AP stories dated after December 23, 2009. Google isn’t saying very much, but publishers might want to keep an eye on this divorce to see if it has any lessons for their own deadly embrace with the search engine company. CNN Money points out that the AP doesn’t derive much revenue from advertising, so the loss of the Google business isn’t significant. Still, AP may be in a good position to provide its members with data on what the Google breakup has meant for its traffic.

The latest on Tribune Co.’s plans to exit bankruptcy are that the event is likely to happen in the first half of this year. Tribune chairman Sam Zell made that forecast in an interview with CNBC this week. Zell has been unspecific lately on when the troubled media company, which has been in bankruptcy for a year, would reemerge. The news of a pending reappearance should be a boost for Tribune employees, since the company has avoided massive asset sales in order to bring its books into line. Instead, it has relied on layoffs and surgical cost cutting.

A new Harris survey says that 77% of American adults would not be willing to pay to read a newspaper’s content online and the 23% who would pay won’t pay much. If you extrapolate the results, they indicate that less than 1.5% of online adults would pay more than $10 per month for a newspaper. This can’t be good news to the smattering of papers that had recently erected paywalls.

John McIntyre takes issue with a Washington Post headline that a lot of people apparently think is brilliant. We agree with McIntyre that it is more at cryptic than clever. We also agree that the example of a brilliant headline that he proposes — “Freedom’s Just Another Bird With Nothing Left To Lose” — is a thing of beauty. Reald the blog for background on how that one came about. Lots of people are weighing in on this discussion. If McIntyre isn’t in your RSS reader, he should be.

We don’t entirely agree with Michael Kinsley’s piece in the Atlantic this week criticizing newspapers for verbosity, but we’ll defend to the death his right to say it (briefly). Kinsley (below right) eviscerates both The New York Times and the Washington Post for their coverage of health care reform by dissecting lead paragraphs and quotation choices. Are all these words really necessary? Kinsley thinks not.

The Post, for example, leads its story with 13 words of pointless Presidential rhetoric and then proceeds to quote other lawmakers making equally vapid statements. Readers don’t care if legislators are “answering the call of history,” Kinsley notes. They want to know what happened. Unfortunately, reporters and editors have been trained to frame everything within the bigger context of “what it means,” and in the process have obscured news of the actual event.

Perhaps the most controversial point in the piece is Kinsley’s criticism of the standard journalistic tactic of attributing analysis where attribution really isn’t needed. He cites a recent New York Times story about the unintended consequences of regulatory crackdowns on Wall Street bonuses. It turns out some executives who were forced to take stock instead of cash are now making a killing as financial stocks rebound. The reporter clearly considers this irony, Kinsley notes, but she’s not allowed to say that. So she digs up a quote from an obscure trade editor to validate what everybody already knows.

This last point is a slippery slope for news organizations. Facing competition from bloggers whose stock in trade is opinion, journalists are redoubling their efforts to sound impartial. Of course, impartiality doesn’t really exist, so reporters search for third-party sources whose opinions validate their own. Bloggers have no such limitations, so they are free to get to the point, state an opinion and move on. This has the effect of actually making blogs more efficient to read than stories in the mainstream media.

We don’t think it’s that simple. The most common complaint we hear about the decline of mainstream media is that people don’t know whom to trust anymore. By at least taking a stab at presenting an unbiased view, mainstream news organizations can save readers from having to triangulate multiple perspectives to form their own opinions. The risk, as Kinsley accurately observes, is that reporters pick and choose analysis that matches their own. That’s worse than misleading; it’s downright deceptive.

We have always believed the smart people have the capacity to hold opinions while also fairly representing multiple points of view. We see nothing wrong with the reporter in the Times piece writing a separate opinion, whether as a blog entry or something else, that states the view of an informed observer. If anything, that should encourage a reporter to present a more balanced perspective in the piece that’s labeled news. Just don’t mix the two.

Freelance Free Fall Threatens Quality

Writing in the Los Angeles Times, James Rainey laments the freefall in freelance compensation that is forcing writers to scramble to make a fraction of what they made two or three years ago. With publishers paying as little as five cents a word for assignments advertised on Craigslist, journalists are finding they can’t afford to practice their craft and are fleeing the profession.

The problem is systemic. Advertising doesn’t pay the bills the way it used to and online publishers have to shovel information into a bottomless pit in order to generate revenue. As advertising gets cheaper, the pit only gets deeper. Amateur writers and offshore competitors who work at a fraction of the traditional freelance wage are attractive new sources of words.

But what are those words about? As the pressure to generate traffic intensifies, online publishers are tempted to push out anything that will drive page views. So the news is increasingly dominated by sex, drugs and “Twilight” instead of investigative or interpretive journalism.

This is a real problem. And there are precious few ideas what to do about it. There will always be an elite cadre of journalists who can command a living wage for what they do, but the vast middle class of meat-and-potatoes reporters are seeing their livelihood seep away. A lot of publishers are working on ways to make advertising more profitable through better targeting and contextual relevance, but until those new models emerge, the freelance market will become less and less appealing for quality journalists.

Miscellany

Usage of newspaper websites is trending slowly upward, although the numbers reported by various sources remain surprisingly small. The Readership Institute says the percentage of people who never use newspaper websites has dropped from 70% in 2003 to 62% in 2008. The World Association of Newspapers and News Publishers says about 20% of the population accessed  a newspaper site in the past 30 days. On the other side of the equation, Scarborough Research reported a couple of months ago that  74% of American adults read a paper in print or online during the past week. Pew Research reported a year ago that 35% of American rely primarily on newspapers for news. Each survey examines slightly different slices of the public, but the discrepancy between the figures from all four sources indicates that someone is asking the wrong questions.

Hyperlocal news site EveryBlock added its first major enhancements since its purchase last summer by MSNBC.com. Visitors will now be able to post their own announcements, which will show up in the localized views that the service provides. PaidContent.org asks what the appeal of advertising will be if advertisers can simply publish their own notices for free. Presumably they’ll get some kind of enhanced placement.

Speaking of PaidContent, it’s hiring. The website is seeking reporters with specialties in either digital entertainment or the combination of tech, media and finance. Both jobs are based on the West Coast.

Former Baltimore Sun copy chief met John McIntyre continues to document the declining investments publishers are making in copy editing. He notes that Media General will consolidate the copyediting of three of its largest newspapers into one desk and that the Minneapolis Star Tribune is cutting 30 editorial jobs, with more than half of them coming from the copy desk. The paper says it won’t sacrifice quality. “Uh-huh,” McIntyre comments.

They’re taking the concept of hyperlocal seriously in the Netherlands. Telegraaf Media Groep has moved the former editor-in-chief of the Dutch tabloid Spits to lead a new venture that will create a network of hyperlocal information platforms. Details are still sketchy, but Bart Brouwers says the venture will ideally incorporate existing local bloggers. He also has some interesting ideas about slanting advertising to be written in more of a blog style to engage the audience rather than pushing messages. Imagine that.

The Guardian’s Dan Kennedy has an intelligent piece about why the great newspaper collapse of 2009 didn’t pan out as expected. If you remember, early this year there were dramatic closures in major markets like Denver and Seattle, along with threats of similar harsh medicine in San Francisco and Boston. But as 2009 comes to a close, the San Francisco Chronicle and the Boston Globe are still alive and kicking and there have been no major newspaper shutdowns in nine months. Kennedy points out that publishers took strong action to reverse the tide after that scary first quarter, cutting back sharply on expenses, boosting subscription prices and finding novel new ways to generate revenue. They also had considerable success whittling down the debt that has paralyzed many of their operations

Most daily newspapers, in fact, operate in the black but massive debt accumulated during multiple rounds of consolidation earlier this decade were threatening their existence. The threat is still there, but it looks like there was more fat in newspaper operating budgets than many observers had believed. Washington Post publisher Katharine Weymouth has pointed out that her paper employs twice as many journalists as it did during the Watergate years, even after multiple rounds of cutbacks.

Time to celebrate? Hardly. This industry is not a growth story and probably never will be, but it does appear that publishers are finding ways to gracefully manage their print operations down to sustainable levels. Early experience indicates that online news publishers can the profitable at about 20% of the expense level of their print counterparts. It’s likely that some publishers will figure out ways to get there without shutting down the brand entirely. Of course the price of advertising is also in decline, but that’s a different problem entirely.

It turns out that shares a Gannett Corp. were a heckuva buy in March when they plummeted to $1.85. The stock hit $15.49 on Wednesday as a leading analyst upgraded his outlook for the newspaper industry, saying December could be the industry’s best month in three years. Well Fargo Securities analyst John Janedis said the slide in advertising is slowing and that ad revenues could be down only 8% or 9% next year, compared to more than 30% this year. Janedis raised his rating on Gannett to “outperform” from “underperform” and on New York Times Co. to “market Perform” from “underperform.”

Not in Our Back Yard

We continue to be amazed at how newspapers bury the lead when announcing bad news about themselves. Check out this press release from the Washington Times as reprinted on Talking Points Memo:

The Washington Times today announced that it will begin producing a more focused Monday through Friday edition designed to feature its most distinctive news and opinion content.

Offered as a combination controlled market and paid general interest newspaper at a price of $1.00, the new print edition will be available at retail outlets and newspaper boxes throughout the D.C. metropolitan area. The current newspaper’s last Sunday edition will publish on December 27.

That’s right: the news is that the Times is killing its Sunday edition. This is on top of laying off 40% of its staff a few weeks ago. The paper is also reportedly considering eliminating its sports section entirely. Perhaps the Times reporters wouldn’t bury the lead on this particular story, but the PR department surely did.

Miscellany

Slate’s Jack Shafer throws cold water on publishers’ love affair with e-readers. Citing slick recent demos by magazines like Sports Illustrated, Esquire, GQ and Wired of their content running on handheld tablets, Shafer harkens back to the days of the Washington Post‘s Pathfinder.com experiment and Newsweek on CD-ROM. Publishers thought those delivery vehicles were going to reinvent their business but the efforts crashed and burned for reasons ranging from the public apathy to the relentless commoditization of information. E-readers are simply another delivery device, Shafer asserts and the tiny sales generated by iPhone apps aren’t going to replace revenue lost from print advertising. The devices also negate the tactile and visual appeal of a print publication, reducing the editorial product to just another stream of content.

The New Bedford Standard-Times becomes the latest paper to start charging readers for online access. Its rather convoluted plan announced this week gives readers three stories per month for free, seven more stories if they register and full access for $4.60 per week. That package also includes a print subscription, which usually costs $4.23. So online access for existing readers comes at an additional charge of $.37 per week.

If you’re looking for an inspiring message to give journalism school students, you can’t do much better than the one NewsLab’s Deborah Potter invented for graduates of the University of North Carolina at Chapel Hill. Today’s journalism professionals need to be inquisitive, resourceful and versatile, she says. Yes, news organizations are contracting and pay levels are shrinking but journalists have an unprecedented opportunity to reach a global audience. You’re on your own more than you’ve ever been, but that can be energizing as much as it’s terrifying. The future of journalism is “what you DO, irrespective of where you do it…your credibility depends on HOW you do what you do, not where you do it.” Believe, us it reads better in context. Potter’s also confident that revenue models will emerge that make journalism sustainable.

If you’re wondering what all the fuss is about augmented reality, Jeff Jarvis has a nice collection of video clips showing different ways in which the commendation of images, databases and mobile access can make the world around us more accessible. Here’s one:

It would be nice to believe, as many newspaper executives apparently do, that brighter days are ahead. Kubas Consultants polled 500 newspapers executives in November and found that, on the whole, they believe the worst is almost over and the 2011 could actually see a return to growth. Most expect next year to be flat, and few foresee the need to outsource printing or reduce frequency, as many newspapers did this year. In fact, one in four said they plan to start specialty, niche or lifestyle products.

Alan Mutter isn’t buying it, and apparently neither is the man who produced the survey. Mutter e-mailed Ed Strapagiel, the Kubas executive who led the research. His opinion is that publishers’ forecasts of a .2% decline in ad sales next year aren’t realistic and he offers a list of reasons for their optimism. Our favorite: “Optimism is better than slitting your wrists.”

In the category of blind optimism, you can also include the Bureau of Labor Statistics. It forecasts that the newspaper industry will lose 25% of its jobs over the next eight years, making it the seventh fastest shrinking job market in the US during that time. The bureau doesn’t explain its methodology, but we suspect that a dart board is involved. The newspaper industry has shed 45% of its jobs since the 2001 peak and nearly 31,000 and just the last two years, according to the amazing Erica Smith. There is nothing on the horizon from a demographic, economic or competitive standpoint that suggests a turnaround in the business so the BLS forecast of a roughly 3% annual decline over the next eight years strikes us as a bit optimistic. Perhaps the prospect of an end to the suffering of the last 18 months is sparking some irrational exuberance.

Incidentally, these last two stories were reported by the industry trade journal Editor & Publisher, whose closure was announced last week in a sale of magazines by its former owner, Nielsen Co. A short story on the E&P website says that staff members plan to go ahead with a January issue and that E&P‘s 125-year run may not yet be at an end. “A number of outside companies and individuals have expressed interest in possibly keeping E&P going, so stay tuned for updates,” the story notes, cryptically.

For a more realistic look at the industry’s short-and long-term prospects, read Martin Langeveld’s thoughtful list of predictions for 2010. Among them are continuing slides in revenue of about 10%, disappointing performance for paywalls, a couple of publisher bankruptcies and likely consolidation by some of the survivors. There’s other good stuff there, too.

Miscellany

The BBC’s worldwide chief executive, John Smith, has come out in support of Rupert Murdoch’s plans to charge for news. The endorsement is notable because the BBC has been something of a foil for news organization’s paywall ambitions, since it provides high quality information – including international coverage – under a government subsidy. While Smith praised Murdoch’s lone-wolf advocacy for the “importance of having quality content,” he notes that paywalls will be extremely difficult to maintain. Separately, the BBC’s director general last month said the broadcaster had no plans to erect paywalls around its public service broadcasting websites.

Whether you like Jeff Jarvis or you hate him — and few people in the publishing industry feel ambivalent about the outspoken blogger — you have to admit that he walks the walk. In the spirit of total transparency and living in public, Jarvis has posted an update on his battle with prostate cancer. The good news is that he appears to be winning. Treatment, however, has come with its fair share of pain, and Jarvis outlines in great detail his problems with incontinence and impotence.

“I plan to say that publicness has benefitted me and that I wish the doctors would, in turn, be more public,” he writes. “The response I got from my posts here was helpful not only in the support I received but especially in the information I got from fellow patients who proceeded me and told me in frank and brave detail what I would experience.” We wish him a speedy recovery, whether in public or private, as we would all be worse off for the loss of his often blunt but always intelligent criticisms.

In one of the final feature stories in Editor & Publisher, which is closing after 125 years, Jennifer Sabba has an interesting dissection of the circulation experiment at the Dallas Morning News. That paper was one of the first to dig into the economics of circulation pricing in order to better understand elasticity. Newspapers have traditionally derived only about 20% of their revenue from circulation, but the wholesale collapse of categories like classified advertising has forced them to get creative. The Morning News is one of several newspapers have experimented with turning the screws on loyal customers to see how much more they would pay for a print product.

It turns out that pricing elasticity isn’t absolute. Research conducted by the Morning News found that readers were willing to pay more if they thought they were getting more in the bargain. Specifically, the most important topics they identified were national news, local news, business, state, sports and investigative journalism, in that order. “If the paper raised the subscription price but readers felt they were getting more content, the fall-off in volume would be around 10%. At the same price, if readers felt like they were getting less content, volume would fall by 40%.”

The Morning News responded by jacking up its home delivery prices an audacious 66% in one year. However, it also expanded its news hole and launched a free edition that’s distributed to about 200,000 homes four days a week. As a result, in the most recent six-month period, the paper reported one of the largest circulation declines of any major newspaper: 22.1%. But that may not be a bad thing for the bottom line. The paper is sticking with its pricing strategy in the belief that the overall business impact will be positive. That’s the philosophy executives at Hearst Corporation adopted with the San Francisco Chronicle last year. The Chron has hiked its subscription rate 63% in the last 18 months and seen circulation plummet. However, it has reportedly also stabilized a business that was losing $1 million a week in 2008.

Sabba’s story provides a new context for understanding the dizzying drop in newspaper circulation over the last few years. While the declines are troubling, they are at least in part voluntary as publishers shed unprofitable circulation and focus on loyal readers. This isn’t a long-term growth strategy, but print isn’t going to be a long-term growth proposition anyway. The thinking behind the strategy actually makes sense in light of the inevitable shift that news organizations must make from print to digital distribution. If there is a cash cow, then milk as much profitability out of it as possible while transitioning the rest of the business to a new economic model.

Debating Paid Models

Rupert Murdoch is apparently getting sick of being portrayed as an old fuddy-duddy who wants people to pay for information that should be free. So he’s taken his case to the Wall Street Journal. In a December 8 opinion, the News Corp. CEO says journalism is the foundation of a free society and blogger “theft” of the hard work of reporters and editors is undermining the value of quality information. Murdoch rejects suggestions that news organizations should become nonprofits as well as the possibility of a government bailout. “The future of journalism belongs to the bold, and the companies that prosper will be those that find new and better ways to meet the needs of their viewers, listeners, and readers,” he writes. But he also states that the economic future of the industry can’t be sustained by online advertising. Instead, readers must be convinced to pay a “modest amount” for good information. “The critics say people won’t pay. I believe they will, but only if we give them something of good and useful value. Our customers are smart enough to know that you don’t get something for nothing,” Murdoch says. Unfortunately, he provides no research or factual evidence for his belief.

Karthika Muthukumaraswamy has a thoughtful post on Online Journalism Blog about how to make paywalls work. She summarizes conventional wisdom that paywalls only succeed when the publication has content that has a high perceived value, usually for a focused audience. The problem with most news organizations is that they’ve been trained to make their information appeal to the broadest possible readership. So how do you change the mindset? Muthukumaraswamy suggests that the best course may be a dual track: continue to deliver broadly appealing information for free while analyzing traffic to determine where the high-value readers are. Then ask them to pay for access to that information. In that vein, “Steven Brill’s Journalism Online plans to charge only the most frequent users who seek very specific content while allowing cursory surfers to avail of most topical news for free.” Don’t demonize Google – she quotes research estimating that search engines can deliver about 50 cents a day of revenue per unique visitor – but don’t make it an either/or proposition, either. The key is to get focused on the numbers and seek your area of highest value.

Speaking of pay walls, The New York Times is mulling the online subscription option but isn’t tipping its hand about its plans yet. Senior Vice President for Digital Operations Martin Nisenholtz told the UBS Global Media and Communications Conference in New York City last week that there’s too much at stake to make this an all-or-nothing proposition. The company values its relationship with Google but is looking at the paid options employed by the Financial Times and the Wall Street Journal, as well as the possibility of just staying free. There is some evidence that the financial free-fall is turning around at the Times, and staff cuts that have trimmed 25% of the workforce could reestablish some stability.

Traffic figures are in for the first month of Newsday‘s bold experiment to charge a $5 monthly fee for access to most of the content on its website. Declines of 21% in page views and a little under 20% in unique visitors were within expectations, according to management. Year-over-year page views were down 35% and unique visitors off 43%, but that compares to unusually busy election year numbers from a year ago. Management isn’t saying how much of the advertising revenue decline was made up by subscription fees. Newsday‘s numbers also can’t be taken as a benchmark for the industry, since a provision of the plan enables the many Long Island subscribers to Cablevision’s Optimum Internet service to get access for free.

Miscellany

The Journalism Shop surveyed 75 former Los Angeles Times journalists and found that more than half believe the paper will not survive in the long term. Only one in six thought the Times would weather the storm that is buffeting the industry. The poll is hardly scientific, but it has some interesting findings about how the former staffers see their future jobs (more than a third expect to exit the profession entirely) as well as whether and how they believe journalism can survive. The generally dour findings show that the journalists believe the media is descending into a mud pit of top 10 lists and celebrity gossip.

Google continues to try to make nice with newspaper publishers while at the same time introducing new products that threaten their business. Editors Weblog points us to Living Stories, a Google Labs feature that aggregates news from around the Web and organizes it by content. The prototype uses content derived from a partnership with The News York Times and the Washington Post. The feature appears to be a modest evolution of Google News at this point, although there is certainly potential for more innovation. One neat feature is a timeline atop some of the news packages that tracks important milestones in the evolution of a story. According to a post on the Google blog, the content is being maintained by staffers at the two newspapers. Google continues to insist that it has no plans to get into the original content business. The blog entry also says the company will provide open source tools that news organizations can use to adapt the service to their own needs.

It appears the Associated Press has begun to turn the tide of customer defections that began last year when the service raised its rates. Some 180 newspapers canceled their AP contracts after the revised rate structure was announced, but now 50 have come back, although not necessarily under the full licensing plan. The Minneapolis Star Tribune is the latest to rescind its cancellation.

Newspaper publishers are reporting some good news at last, although how good it is depends on your perspective. Speaking to the UBS Global Media and Communications Conference in Chicago this week, executives from Gannett, Media General, McClatchy, the New York Times Company said revenue is showing signs of bouncing back.

Gannett’s Bob Dickey said the industry is emerging from a “cyclical downturn” and that Gannett is positioned to take advantage of new revenue opportunities and an improving climate. Executives said they were comfortable with the high end of Wall Street’s earnings estimates for the quarter. However, that doesn’t mean growth is back. Gannett is still planning to trim expenses by single-digit percentages during the next year and it started with the announcement last week of further cuts at USA Today.

Media General said it sees signs of ad spending “firming,” and that aggressive cost cuts of the past two years have stabilized the company. Media General has whittled $200 million off its debt load over the last three years, although the total debt still stands at a daunting $700 million.

The New York Times Company has also been cutting its debt — from $1.1 billion-$800 million — and sees the slope of decline in advertising revenues beginning to flatten. It expects print advertising revenue to be down 25% in the fourth quarter, but that’s compared to inflated election-year spending in 2008. CEO Janet Robinson said it looks like online advertising will actually increase 10% in 2010.

McClatchy says it’s lifting a pay freeze that’s been in effect for over a year but don’t break out the champagne just yet. Revenues were still down 23% in the third quarter although CEO Gary Pruitt said McClatchy is “successfully navigating through these difficult economic times.”

Newsosaur Alan Mutter isn’t buying any of it. He says newspaper executives are whistling past the graveyard when you look at the magnitude of the industry contraction over the last four years. According to his projections, “classified advertising in 2009 is likely to total no more than $6 billion, or fully 65% less than the $17.3 billion in sales booked in 2005.” He also points out that the recession took a particularly heavy toll on retail and automotive companies, which are the backbone of newspaper revenues. Most of that business will never come back, he says.

Meanwhile, new figures from TNS Media Intelligence show the media industry is far from out of the woods. Advertising expenditures slipped 14.7% in the first nine months of 2009, with traditional media leading the downward spiral. Newspapers and radio posted identical declines of 22.8% in the period. Business-to-business magazines fared the worst, with revenues down more than 27%.

That brightening at picture at the New York Times Co. won’t stop it from continuing to cut costs at its flagship. The newspaper will be forced to resort to layoffs after it failed to meet its target of cutting 100 positions through a voluntary buyout offer. The Times isn’t saying how many people stepped up to take the severance package, but speculation is that about 50 union and nonunion jobs will be cut to layoffs.

The news is better at the Worcester Telegram and Gazette, which the Times Co. has pulled off the auction block. The T&G was offered for sale early this year almost as an afterthought when the Times Co. put the Boston Globe up for sale. The company later canceled the sale, reportedly because bids weren’t high enough. While the Globe has been in a downward cost-cutting cycle this year, its sister 30 miles to the west has apparently been focusing on remaking itself. The reason cited for the cancellation of the Worcester paper was a transformation of its “journalistic and business operations.”

Perhaps all those fresh-faced young journalism wannabes who are flooding J-schools across the country right now know something we graybeards don’t. While there’s still plenty of legitimate hand-wringing going on over the collapse of publishing institutions, some media seers are beginning to see promise where others see peril.

David Carr’s essay in The New York Times last weekend is drawing considerable attention and well-deserved praise for its glass-is-half-full perspective. Carr, who put in his time at the traditional media watering trough, observes that the technology-enabled young journalists he meets these days increasingly see the collapse of hidebound media institutions as an opportunity to make a name for themselves based upon merit rather than survival. “The next wave is not just knocking on doors, but seeking to knock them down,” he writes. “Young men and women are still coming [to New York] to remake the world, they just won’t be stopping by the human resources department of Condé Nast to begin their ascent.”

We found ourselves nodding vigorously as we read this piece. Carr expresses no nostalgia for an industry that was built on the inefficiencies of traditional advertising that are now being Googled out of existence. Career paths that relied upon young journalists doing “marginal jobs for indifferent bosses doing mundane tasks” are being vaporized and replaced by a meritocracy in which the best may not only survive but thrive. We’re still a long way from the Promised Land, and it’s a scary world if your job security is based upon having outlasted everyone else, but it’s invigorating if you’re young, energetic and enabled with all the trappings of today’s technology.

New York City venture capitalist Fred Wilson agrees. “I believe the move from a velvet rope model to a meritocracy is a good thing and that the new media business we are building in the wake of the old one will be a better media business; leaner, faster, and controlled more by users than media moguls,” he writes. Amen. As sympathetic as we are to the many people whose careers and lives have been thrown into chaos by the collapse of traditional media, we continue to see a much brighter future once the wreckage is cleared away.

AOL to Automate the News

America Online, which recently announced plans to lay off a third of its employees, is breaking some new ground in the newsgathering field. The company plans to use automation to crawl the Web looking for stories that its visitors have indicated they prefer through their clicks and page views. The robot will then advise a team of increasingly dehumanized editors when and where to publish what it finds. AOL will also use its new venture, Seed.com, to outsource assignments to an army of (presumably low-paid) reporters and photographers.

It sounds impersonal and even a little creepy. The idea of building a new site based entirely upon the preferences of viewers strikes us as a little like the model at Digg.com, which generates boatloads of traffic, but tends toward stories about video games and loopy kids. Digg isn’t threatening to upend CNN.

Writing on FastCompany.com, Kit Eaton makes an interesting case for AOL’s actions creating a revenge effect. If social media is actually adding more of a human element to interactions between groups, does a service that removes much of the human decision-making make any sense? Eaton proposes that readers today actually expect more of the human element in their news coverage rather than less. Of course, we haven’t seen the AOL technology in action and human editors could tweak the parameters over time to make its selections look more like The New York Times. But we doubt it.

Miscellany

Last week we told you about a new daily newspaper that is being launched into the Detroit market, hoping to fill a void left by the reduced publication schedules of the two major dailies there. Well, the experiment didn’t last long. The Detroit Daily Press published just five issues before hitting “a bump in the road” and suspending further operations until the new year. The suspension was blamed on “lack of advertising, lateness of our press runs and lack of distribution and sales,” according to an announcement on the publication’s Facebook page. This sounds to us like more than just a pothole, but we hope the owners, who have courted this market before, can overcome their troubles and come back in 2010. Photographer Rodney Curtis offers an insider’s perspective. Having lost his job at the Detroit Free Press earlier this year, he’s now a double-dip victim of the industry’s troubles.

Some local television stations are now crowdsourcing the news assignment process. Broadcasting & Cable reports on stations in Milwaukee, Lancaster, Pa. and Little Rock that are opening their daily news budget meetings to outsiders through video, live blogs and Twitter. News directors say the experiment has been a mixed bag, since audiences that sometimes number over 100 can get stuck on gossip and minutia instead of general interest stories. However, they say the open-air meetings have also resulted in solid news tips, such as the WITI (Milwaukee) story on a father surprising his son at school upon returning from Iraq. The boy’s teacher had clued the station about the visit.

Add MediaNews and A.H. Belo to the short list of newspaper publishers who are considering joining Rupert Murdoch in his crusade against Google’s evil empire. Executives at both companies were quoted recently saying that they may withhold some paid content from Google’s search spiders. However, they indicated that they would not block access to free content. These statements are a minor blow to Google, which says it can work perfectly well with paid content and that publishers using paywalls need Google even more to make their content discoverable.

The Hopi Tribal Council has decided to close down the Hopi Tutuveni, which is the primary newspaper covering Hopi lands. The 6,000-circulation paper, which has been publishing since the 1970s, was called “ineffective” by one tribal Council maker and didn’t merit continued funding by the budget-pressed group.

It’s the end of an era, of sorts, at the Washington Post. The paper plans to close down its last three domestic bureaus – in New York, Los Angeles and Chicago – at the end of this month in a significant retrenchment that focuses on the Washington area. The move continues a recent trend toward embattled big-city dailies shutting down the remote offices as they attempt to go hyperlocal. David Carr quotes Post Executive Editor Marcus Brauchli as saying “We are not a national news organization of record serving a general audience.” The Wall Street Journal announced plans to close its Boston bureau last month.

The dismal circulation figures reported by the US newspaper industry a couple of weeks ago may actually have been optimistic. There’s new evidence that many publishers took advantage of recent changes to Audit Bureau of Circulations (ABC) rules to actually overstate their real readership numbers. The blogosphere is having a field day with this one.

The catalyst was this AP piece that points out that changes adopted by the ABC seven months ago now enable publishers to count “bundled” subscriptions of paid and online editions as two subscribers, even if only one person is doing the reading. This continues recent trends by the bureau to loosen rules and give its publisher customers more flexibility to pump up their numbers. In the spring of 2008, for example, the ABC made it possible for publishers to declare as paid circulation copies that sell for as little as a penny.

The AP story doesn’t pinpoint how many news organizations benefited from the rules change in the most recent reporting period, but notes that 59 newspapers counted at least 5,000 electronic editions in their weekday circulations. If those numbers were backed out, the record 10.6% drop in the most recent six-month period would probably have been even worse. The story cites several examples of papers that showed declines in print subscribers but were still able to post circulation increases by counting delivery of electronic editions.

However, numbers games don’t fool anybody in the world in which smart people with spreadsheets can quickly analyze them. As Mark Potts points out, “Fudging the numbers may make internal constituencies happy, but they’ll bite you in the long run. Advertisers can count, too.” In other words, you can slice the numbers any way you want, but it doesn’t count for a hill of beans if customers don’t come in the door.

Electronic editions are basically digital versions of the print product that readers can download for the sake of convenience, ecology or availability. Jim Brady tweets wryly, “Nothing shows that you ‘get’ digital more than trying to deliver it to people in exactly the same form it appears in print.”

The circulation gains are part of a broader campaign by publishers to distract people from the reality of plunging circulation and ad revenue. Scarborough Research released a much-cited report recently that documented that 74% of American adults read a paper in print or online during the past week. These statistics look impressive, but qualifiers like “adult” and “in print or online” color the numbers. The newspaper industry has largely lost the youth market and online distribution is a mixed blessing at best.

Publishers are playing numbers games of their own. Mark Hamilton notes that the industry has largely abandoned circulation figures in favor of research-driven readership numbers that report the number of people who have read or looked into a newspaper in the past seven days. These figures serve to buttress the argument that newspapers are still a core element of American life while obfuscating the fact that subscribership is down.

And even large circulation numbers don’t equal business success. Alan Mutter contrasts the circulation strategies of two Bay Area publishers: Hearst’s San Francisco Chronicle and MediaNews Group. The Chron has all but abandoned discount circulation in a quest to cut its operating losses and drive circ revenue to 45% of total sales next year. MediaNews is taking the opposite course. It has used aggressive discounting to become the most widely circulated publisher in the area. The combined circulation of MediaNews papers in the region is now nearly triple the Chron’s. MediaNews president Jody Lodovic calls his strategy a long-term view, but is junk circulation good for anybody? The Chronicle‘s strategy is to stabilize its business, which may be a more rational plan in an unpredictable economy.

Whatever the numbers, advertisers are speaking more loudly with their dollars. US newspaper advertising revenue fell by nearly 28 percent in the third quarter from $8.9 billion to $6.4 billion. If you extrapolate that out to a full year, the US newspaper industry has shrunk by nearly half since 2006, when it reported $49.2 billion in revenue. The AP quotes Newspaper Association of America (NAA) president John Sturm positioning the figures in the context of a dismal economy, but it’s hard to find any bright spots when even online advertising was off 17%.

Miscellany

All may not be lost for the East Valley Tribune, which earlier this month announced plans to shut down at the end of the year. The paper reported on Friday that an unnamed buyer has emerged who plans to keep the paper operating both in print and online. The buyer also plans to keep a “substantial” number of Tribune employees on the payroll. There were no other details. Freedom Communications, which owns the Tribune, has been seeking a buyer since early this year, but no serious offers emerge prior to a Sept. 1 bankruptcy filing. In fact, Freedom’s chief financial officer said one bidder offered to take over the business only if Freedom paid him to do so

Count Twitter cofounder Biz Stone among the army of skeptics about Rupert Murdoch’s plans to remove News Corp. properties from Google’s search index. Saying Murdoch’s scheme is likely to “fail fast,” Stone told a London audience that the Australian media magnate should instead focus on “how to make a ton of money out of being radically open rather than some money by being ridiculously closed”. He suggested that Twitter’s crowdsourced model offer some opportunities and that the company would be willing to work with newspaper publishers. Twitter executives also said last week that the service will soon announce a plan to start making money off of the estimated 60 million members it has acquired.

And Finally…

Ed Padgett pointed us to this clever music video by Christopher Ave, the political editor at the St. Louis Post-Dispatch who isn’t a copy editor but who is sympathetic to the plight of wordsmiths around the country who are falling victim to layoffs. The slick production, which looks like it was recorded in a newsroom, includes the following refrain:

I was there to fix your grammar
When you thought it wouldn’t matter
Cut all your extraneous blather down

AP Stylebook is my bible
Helped me stop a suit for libel
But nothing ensures my survival now

And I don’t know what I’ll do
After I am through
Killing my last adjective

Mallary Jean Tenore tells the story behind the video on Poynter Online. It has less than 800 views, so go visit it and add to its five-star rating.

There are more signs that the advertising environment is improving. IDC says global online ad spending just 1% to $14.6 billion. While that’s still down, it’s an improvement over the negative 5.6% growth registered in the second quarter and the smallest drop since the ad market started going south a year ago. IDC expects the US market to decline another 1% or so in the fourth quarter, but now foresees growth by the first or second quarter of 2010. IDC says search advertising will lead the industry out of its slump, but that the big winner is Microsoft’s Bing, not Google. However, Bing may not hold its gains once growth returns. Display advertising continues to be a downer. America Online, which derives most of its ad revenue from display units, saw its online ad revenue fall 23% in the quarter. AOL has lost nearly half its market share over the last four years.

Miscellany

The Awl takes a graphical look at the circulations of major US newspapers over the last two decades. The data is predictably horrible, but the chart makes some trends clearer. One is that the precipitous circulation declines began almost at the same time – around 2006. Another is that the trends haven’t been consistent for everyone: The Wall Street Journal has more or less held its own while the New York Post’s circulation today is only slightly below 1991 levels. “The once-captivating battle of the New York City tabloids has become completely moot,” the author notes. In fact, the the only battle in New York now seems to be a race to the bottom.

The biggest loser in the timeline is the Los Angeles Times, whose 50% drop in circulation over the last 20 years is the visual equivalent of a topographic map of the Grand Canyon. Whatever malaise is afflicting US dailies, the LA Times has got a triple dose of the illness.

Jeff Jarvis has a 25-minute video of an anti-protectionist speech he made to Munich Media Days a week ago, but what caught our eye was a comment by a reader that attempts to explain the changing economics of journalism. Bob Wyman notes that mass media economics of the past century made it a virtue for journalists to be objective because that was how you amassed the largest possible audience in markets defined by geography. Once the geographic limitations were lifted, the rules changed. Today, journalist maximize their value by being leaders in advocating certain points of view. Specialization and bias (supported by expertise) become a source of differentiation.

“This will result in greater quality of journalism on specialist interests being made available across the board as well as probably increased revenues to individual journalists who are successful at becoming leaders in particular market segments,” Wyman comments. This is worth pondering for journalists who mourn the loss objectivity in their profession. Bias may actually be a factor that makes them distinctive and marketable in the future.

The Wall Street Journal had the Detroit Media Partnership on the hot seat last week with a story about advertiser involvement in editorial decisions  the Detroit Free Press, including story topic and placement. While not alleging direct advertiser interference, the Journal story, which was provocatively headlined “Major Detroit Newspaper Takes Cues From Advertisers,” pointed to a 10-page package on Medicare open enrollment that appeared on Nov. 1 that it said was inspired by an idea submitted by Humana and that carried extensive advertising from the health care provider. Retailer Target was also involved in conceiving and scheduling recent articles on secondary school education that were placed adjacent to Target ads. “The publisher has redrawn…traditional boundaries,” the Journal wrote. “Generally, papers make layout decisions within the newsroom, not in connection with ad placements.”

The Free Press was pretty steamed. Romenesko has the letter that Free Press Editor/Publisher Paul Anger sent to the Journal. The Freep didn’t consult with advertisers on any story content, although it did work with them on schedules, Anger said. “We did nothing to compromise the newsroom while creating a win-win-win for our news coverage, for readers, and for advertisers,” he wrote. Anger also tweaked the Journal for carrying a special section on mutual funds stuffed with ads from investment firms on the same day that the story about the Free Press appeared.

The Claremont (N.H.) Eagle Times, which died in July and rose from the ashes last month under a new owner, is in the news again. This time it’s over the state of New Hampshire’s unusual decision to guarantee part of a $250,000 loan to the paper’s new owner, Pennsylvania-based Eagle Printing & Publishing LLC. The New Hampshire Business Finance Authority, a state agency, agreed to guarantee 75% of the loan because of the potential for the Eagle Times to preserve and create new jobs in the area. The nearby Valley News devotes some 1,100 words to its analysis, focusing on the potential conflicts of interest created by a debtor covering the very same politicians who are providing its sustenance. However, no pols quoted in the piece seem to believe things will change that much over a lousy $187,500 in capital.

Quote from a short piece by Paul Bradshaw on Online Journalism Blog about monetizing content and audience: “I think there’s an enormous amount of vanity among journalists who forget that people buy and bought newspapers not just for journalism but crosswords, cartoons, TV listings and indeed advertising.”

The CEO of the Associated Press is stirring up trouble in China. Tom Curley (right) took the opportunity of an address to the World Media Summit in Beijing to outline plans for an AP-led initiative to retake control of intellectual property produced by the organization and its members.

The three-part initiative includes the News Registry, which is a rights management and tracking system that includes some kind of digital licensing protocols. He also said the AP will create a NewsMap, which is a master index of original content submitted to the registry, and NewsGuide, which is “an aggregated body of unique news content,” that sounds a little bit like Google News only a lot harder to use. All this is happening under the banner of “Protect, Point and Pay,” the objective apparently been to make it really difficult for aggregators to access AP content without paying for it. Of course, history shown that, when faced with roadblocks like this, aggregators simply go elsewhere. No timeframe for the new initiatives was announced.

Jeff Jarvis is having none of it. The media iconoclast says he can’t help pointing out the irony of Curley’s choosing to unveil the AP’s plans in a land where government exercises tight control over what citizens may know. The whole idea indicates that the AP doesn’t understand the dynamics of the link economy and word-of-mouth transmission. Curley and his fellow control freaks, “are the ones killing newspapers, not the Internet,” Jarvis says.

Condé Nast ’09 Revenue Decline May Hit $1 Billion

If anyone doubts how hard this economy has hit the luxury sector, they have only to look at the dismal performance of Condé Nast. Newsweek reports that the upscale magazine publisher – one of the nation nation’s three biggest — may see its ad revenue drop by $1 billion in 2009. In light of that disaster, it’s not surprising that Condé Nast last week decided to close venerable publications like Gourmet and Modern Bride. The company still owns Architectural Digest, Vanity Fair, The New Yorker, GQ, Vogue, and Wired.

But for how long? Newsweek estimates that ad revenues at Architectural Digest are off by almost half and that Wired and Vanity Fairare off 35% and 27%, respectively. For the newspaper industry, there’s bad news, too. Condé Nast owns newspapers in more than 20 cities through its Advance Publications subsidiary. Cost-cutting could force cutbacks at those titles as well.

Glimmers of Good News

Newspaper stocks are finally coming back from the dead, but can they hold their gains? MediaPost points to encouraging news. Since April, Gannett stock has more than tripled from $3.81 to $12.50, McClatchy has quintupled to $2.56, and Media General has jumped 250% from $2.54 to $8.86. It could be that the current valuations better reflect reality, Erik Sass suggests. Newspaper stocks became such a hot potato during the revenue implosions of the last two years that investors may have forgotten that the companies still have valuable audiences and profitable businesses.

Another researcher says the online ad market is bottoming out. eMarketer analyst David Hallerman says ad declines in the second half of 2009 will be less than the first half’s 5.3% drop. These days, that’s considered good news. See the eMarketer chart above. It looks like the big gainer will be search while classified advertising will lose ground.

Miscellany

For beleaguered news industry veteran who happen to speak Portuguese, the new mantra may be “goes south, young reporter.” The people of Brazil are reading newspapers in bigger numbers than ever, reports The Guardian. Total circulation of Brazilian newspapers rose 12% in 2007, or nearly five times the global average. It was up another 5% last year. The cause, apparently, is rapid growth in the middle class, which is seeing disposable income increase and creating both advertiser and reader demand. Newspaper revenues have risen every year since 2001. Rio de Janeiro’s historic Olympic Games win will only add life to the party.

Ink-stained wretches who enjoy pointing out the failings of the blogosphere should read Paul Carr’s rant about an apparently flagrant miscarriage of journalistic justice by ZDNet. The story, which was the work of a ZDNet blogger named Richard Koman, alleged that Yahoo had passed the names and e-mail addresses of hundreds of thousands of bloggers to Iranian authorities during the country’s controversial election. It turns out Koman‘s unnamed source for the story was an Iranian blogger with a decidedly vested interest in spreading misinformation. ZDNet has since retracted and apologized for the misstep. Carr isn’t letting the publisher get off that easily, however. He lectures blog aggregators in general — and ZDNet in this particular — for shoddy journalism for not even passing the blog entry by a second set of eyes before posting it. Quoting Winston Churchill: “A lie gets halfway around the world before the truth has a chance to get its pants on.”

USA Today has defied the industry circulation trends with minimal losses for the last two years, but that’s all about to come to an end. The newspaper is expecting circulation to drop 17%, the largest decline in its 27-year history. That translates into a loss of nearly 400,000 daily copies. The losses are apparently due to USA Today‘s reliance on hotel distribution. Cutbacks in business travel, combined with Marriott’s decision to discontinue automatic deliveries to its guests, created a potent double whammy.

Chicago has a new newspaper magnate, and he says he’s not going to repeat the mistakes of the last one. James Tyree, 51, chairman of Mesirow Financial, can’t help being compared to Sam Zell, the real estate magnate who bought Tribune Co. in 2007 and presided over its rapid descent into bankruptcy. Tyree (right) says Sun-Times Media Group is different. For one thing, there’s no debt. For another, Tyree understands the Internet. He reads six papers daily, all of them online. He has also made no bones about the challenges facing the company and has wrung significant concessions from the unions as a precursor to acquiring the Chicago Sun-Times and 58 suburban titles. If all goes as planned, he will take over control of the company in late October, much to the relief of employees and the Internal Revenue Service, which is owed more than $600 million by former owners.

The Russian owner of the London Evening Standard has decided to stop playing pricing games and simply make the 182-year-old newspaper free. Alexander Lebedev (left) says the move will more than double distribution from 250,000 daily copies to 600,000. The billionaire banking magnate, who took over the paper earlier this year, says the loss of circulation revenue can be more than made up by advertising gains. However, skeptics say that’s a long shot in a market that has recently seen the loss of one free title (TheLondonPaper) and that shows no sign of an advertising upturn.

Canwest Global Communications will be run by a group of creditors as it attempts to dig out from more than $4 billion in debt. Canada’s largest publisher was granted bankruptcy protection late last week. The company owns a variety of broadcasting and print businesses including Global TV and the National Post. Its acquisition of the latter is now widely seen as the source of its current difficulties because it loaded down the company with debt.

The Claremont (N.H.) Eagle has been resuscitated and removed from our R.I.P. list after a new owner rehired about 20 staff members and relaunched the 8,000-circulation newspaper on a somewhat-less-than-daily frequency.

And Finally…

It often takes an insider who understands the existing cultural norms to effect real change. That’s why Dan Gillmor continues to be such an effective voice for new-media reform. The former San Jose Mercury News columnist posts a list of 22 ideas for “changing the way news is produced.” They include simplifying language to speak in facts, not euphemisms, linking aggressively to competitors’ content, doing away with the use of unnamed sources and illuminating the motives of the people behind reported stories. While some of Gillmor’s proscriptions may seem condescending, his manifesto reflects the way information is communicated in the emerging bottom-up world. More than 100 commenters contribute their own addenda.