Industry watchers are applying some mathematical discipline to various proposals to bail out the newspaper industry.

Mark Potts buries a hatchet in the idea that paid subscriptions are the salvation of the newspaper industry. Hauling out the spreadsheet, he suggests that the $10 million a good-sized daily could realize from selling 500,000 subscriptions at $20 each would be substantially offset by advertising revenue declines triggered by reductions in website traffic. Some people estimate that pay walls could cut page views by up to 90%, effectively obliterating that revenue stream. And charging a higher price will only drive traffic lower. Potts says newspaper owners aren’t doing nearly enough to optimize their online ad revenue streams. They should focus on selling ads to local businesses and shift from a reliance on traditional big display ad campaigns.

Taking a more expansive view, Ken Doctor handicaps the odds of various rescue strategies, ranging from pay walls to cable bundling to government handouts. The best bets are Cablevision’s idea of bundling Newsday into cable subscription fees and Hearst’s plan to distribute free wireless e-readers, both of which he rates at 2-1 odds. But even those have major downsides. The longshot: charging for premium content. Newspapers just don’t have the goods, Doctor says. Odds: 4-1.

Down and Out in Denver and San Francisco

If you want detailed background on what exactly happened in Denver prior to the Rocky Mountain News‘s closure last week, read this interview with David Milstead, the Rocky columnist and business reporter who broke scoop after scoop about the behind-the-scenes machinations. At nearly 5,200 words, the transcript is of epic proportions, but interested readers can learn about why Scripps chose to be the bad boy to abandon Denver, Media News CEO Dean Singleton’s’ decision not to buy the paper, the emergence of a possible buyer late in the process, the mood in the Rocky newsroom after the closure was announced and the possibility that Milstead’s critical reporting denied him a job at the rival Denver Post.

Singleton is also at the center of a San Francisco Bay Guardian analysis of what could be done to save the Chronicle. The report documents the extreme cost-cutting campaign at Hearst Corp. which is seeking to derive half its revenue from circulation by 2011. Among the news that was buried in the announcement of the Chronicle’s for-sale offering was layoffs of more than 55% of the newsroom at the San Antonio Express-News.

The only conceivable buyer for the Chron is Singleton’s MediaNews, which has gradually bought up nearly every other newspaper in the Bay Area. However, MediaNews is unlikely to want to take on a money-losing property when it is already so highly leveraged. The story also says the Society of Professional Journalists is calling for a public discussion of the Chron‘s predicament, saying the potential loss of such a large news source is an “urgent civic challenge.”

Layoff Log

• The Fort Worth Star-Telegram will cut its workforce by 12% and enact wage reductions ranging from 2.5% to 10% on employees making more than $25,000 annually. The paper cut 18% of its workforce last year and initiated other cost-reduction efforts, including a joint distribution agreement with rival Dallas Morning News and real estate sales. In addition to the layoffs, the paper is offering buyout agreements to many of its workers.
• Canada’s largest newspaper will lay off 60 unionized workers. The cuts mainly hit the advertising department, where 38 employees, or about one quarter of the unionized staff,  got their walking papers. The leader of the Southern Ontario Newspaper Guild calls the cuts outrageous in light of the $8 to $11 million package CEO Rob Prichard is getting to step down in May.
• Having announced 60 layoffs last week, the Arkansas Democrat-Gazette is now requiring newsroom employees to take off one work day out of every 20. The plan applies to salaried and hourly employees who work the equivalent of a full-time schedule.
• The Myrtle Beach Sun News will cut 20 positions and reduce pay and hours for all staff.

Miscellany

The Connecticut attorney general thinks it’s pretty audacious of Journal Register Co. to pay up to $1.7 million in bonuses to 31 people when the company owes the state $21.5 million in back taxes. However, we should point out that the bonuses are tied to the achievement of cost reduction objectives.

Add The Wall Street Journal to the ranks of outlets now tracking US layoffs. Its interactive layoff tracker sorts job reductions by industry, company, date, size of layoff, percent of workforce and stock decline. The Citigroup numbers are especially ugly.

And Finally…

Many visitors to this website also frequent Reflections of a Newsosaur, a blog written by Alan Mutter, who is “perhaps the only CEO in Silicon Valley who knows how to set type one letter at a time.”

Mutter was a reporter and editor at major metro dailies for 20 years before transitioning to a successful career as a technology CEO in Silicon Valley. His blog combines an executive’s financial acumen with a journalist’s inquisitiveness. Newsosaur offers insight on the media industry’s financial condition that you just can’t get anywhere else. Not surprisingly, it is one of the top 10,000 blogs worldwide, according to Technorati.

Mutter particularly enjoys challenging conventional wisdom with mathematical fact. Early this week he poked holes in the recent excitement over micropayments by creating a likely revenue scenario. Using The New York Times as a subject, he concluded that micropayments would bring in less than $4 million a year, or enough to pay about 2% of its staff.  For small papers, they would amount to beer money. Pundits have come to rely on Mutter for reality checks like that.

Knack for Numbers

His financial analyses are his signature item. Mutter sounded the alarm about the newspaper industry’s growing debt load more than four years ago, and he has methodically documented the damaging role that debt has played in limiting the industry’s options. His Default-O-Matic documents the financial viability of major players, giving early warning of who’s likely to be next off the cliff.

A complete financial restructuring of the industry is likely, Mutter says. Debt has painted publishers into a corner and many will have no choice but to walk away from their obligations and let the banks and investors sort it out. It’s not that the core business model is so bad, he says. It’s that their financials stink.

Having reader Newsosaur for a couple of years, we thought it would be interesting to find out more about the person behind it. So we called up Alan Mutter and spent an hour on the phone with him. Our complete, lightly edited interview is below for you to stream or download.

Show Notes

Download the interview (right-click and save)

Stream the interview:[audio:Alan_Mutter_NDW_Interview.mp3]

It’s the pit of winter and the economy is stuck in molasses, yet the tone in the newspaper business has turned brighter. The few publishers who aren’t weighed down by crushing debt are talking tough and a paid news model is getting renewed attention.

Charlie Rose convenes a panel of industry notables, including The Wall Street Journal‘s Robert Thomson, Time‘s Walter Isaacson and New York Daily News owner Mortimer Zuckerman, who provides comic relief (See “And Finally…” below). The issue is “The Future of Newspapers,” and Poynter has thoughtfully provided a transcript.

Thomson’s comments are the most insightful. He hits the nail on the head with his description of Google as the great leveler: “Google is great for Google, but it’s terrible for content providers, because it divides that content quantitatively rather than qualitatively.” He also has razor-sharp criticism for editorial arrogance. “There’s a great tendency for journalists to be high and mighty, and to underestimate the intelligence of readers. And I think one of the reasons they’re losing readers is for that very reason.” And he says the Journal now “loves” the paid-subscription model it considered abandoning only about a year ago.

Everyone marvels at the new Amazon Kindle (right) and declares that it may be the last chance to create a reader-funded news model. Isaacson says the challenge for newspapers is to “prevent us from giving it away for free on the Kindles…just like we gave it away for free on the Web. We’ve got one more shot at it… Let’s make some really cool…applications we can…actually charge for.”  Tom Foremski and Greg Sterling both have interesting comments on the roundtable.
Watch the video here:

Making the Case

The New York Times has an op-ed by Eduardo Porter that argues that no other entity can take newspapers’ place. Citing numerous historical precedents, he argues that populations with an active media enjoy higher voter turnout, better government services and a higher standard of living. “During the Great Depression, the Federal Emergency Relief Administration doled out more money in counties with more radios,” he writes, in just one example. “Today, Hispanic voter turnout is higher, relative to the non-Hispanic vote, where there is a local Spanish-language TV station.” He also says television has been cited as an important factor in declining voter turnout beginning in the 1950. Porter’s use of these distant mirrors is novel, but his assumption that it takes a newspaper for a population to achieve these benefits is a bit of a stretch.

The former CEO of Cox Newspapers makes a plea for embattled newspaper companies to fight back. Jay Smith retired eight months ago, just as the walls were beginning to cave in, and he recently joined with three top executives from the business to talk about the industry’s plight. “Their passion and enthusiasm contrasted with…the bleak forecasts for newspapers,” he writes. “Their voices have not been heard much, but they should be.” In particular, “Donna Barrett, who runs the 140 newspapers of Birmingham, Ala.-based CNHI Inc., says nothing in the financials of her company resemble the gloom and doom she reads about.” And the publisher of Parade magazine says he’s still delivering a convincing ROI to advertisers.

Smith is right that these publishers aren’t being heard, and why not? If CNHI is bucking the industry trend, we’d think the Newspaper Association of America would be parading her around like a football hero. It’s odd that those individuals are so quiet when their business is under such siege.

Speaking of sieges, check out the comments at the end of this piece. They’re typical of the reactions we see to published commentaries on the industry’s future: political bashing of the media by both left- and right-wing ideologues accusing newspapers of liberal or conservative bias. This response is so common that we wonder if it’s a coordinated campaign. The comments invariably have nothing to do with the original commentary. They seem designed to spread some kind of agenda. Does anyone have a theory as to why this criticism turns up with such mind-numbing frequency?

But Will They Pay?

Eric Alterman, who penned last spring’s riveting account of the newspaper industry’s problems in The New Yorker, updates the scene in a shorter account on The Nation. Unfortunately, he has no better ideas for saving the industry than anyone else. Alterman recaps the solutions that have been proposed, ranging from micropayments to charitable support, and finds them all wanting. And he points out that the core news section of the typical major metro daily is the part most at risk. “Ironically, it is the sections of the paper most crucial to informed democratic discourse that are in danger of disappearing,”Alterman writes. “Sports news, entertainment news, health news, fashion, celebrity and style reporting will always be with us in one form or another, because they are such delightful places to advertise.” In contrast, no one wants their ad to appear next to a story about an airplane crash.

Writing on Nieman Journalism Lab, Matthew Ingram basically agrees. Ingram recaps the recent debate and says there’s no way readers are going to pay the freight. “Newspapers have never been paid directly by readers for the news,” he writes, adding that subscription and or newsstand fees cover, at best, a few pages worth of production cost. “What newspapers need to do is find ways of creating content that is more valuable than the perishable daily news.” Ah, but that is the problem. No one short of a few specialized publishers has figured that one out.

Miscellany

Three weeks after it pulled the plug on a print advertising program, Google has cancelled a second offline initiative. Google Audio Ads was the second leg of the stool that Google was building to support its expansion into offline advertising. Like Print Ads, the program was meant to upsell airtime to search advertisers. However, the radio industry never much took to the idea, seeing it as a way to commoditize its business. Only one major station owner, Clear Channel Radio, signed on to the program and many smaller networks gave Google the cold shoulder. The search giant still has a similar program to sell television ads and analysts say that one probably isn’t going away soon. About 40 people will lose their jobs.

Have you tried the The New York Times’ new article skimmer? We just did and pronounce it cool. The as-yet-unnamed service (though we like “skimmer” just fine) attempts to recreate the experience of scanning a printed newspaper on a computer screen. Each “page” includes a tiled assortment of summaries and sections slide pleasingly into place. Coolest feature: “Instead of displaying dates, articles gradually fade as they get older,” says a post on the Times‘ First Look blog. ReadWriteWeb notes that it would be nice if you could read the articles in the same interface. But first things first. This is a nice new idea.

And Finally…

Is Mortimer Zuckerman losing it? Or perhaps the collapse in value of his Manhattan real estate holdings has addled his mind just a bit. In this exchange from the Charlie Rose interview referenced above, Zuckerman oulines his plans to turn around the Daily News through the addition of color:

I committed to the new presses out of sheer passion 18 months ago…They will dramatically increase our revenues, because we’ll have all color, and this will increase our advertising revenues, and it will also increase our circulation, because it will be a completely transformed visual product.

The Daily News is one of the last newspapers to go to color. Printing in color isn’t helping anyone right now. But just wait a few years and Zuckerman’s daughter will figure out the solution:

I own The Daily News and I’m determined to keep The Daily News going because my daughter, who is 11, is now committed to be the next publisher…She’s agreed. She liked the working conditions. She liked the demands.

Rose comments, delicately, “Most people would hear you say that, and they would say, you know, he doesn’t — with all due respect, you don’t get it.”

The Baltimore Examiner will close on Feb. 15, ending its three-year-run as the city’s second newspaper. Launched by a company controlled by Denver billionaire Philip Anschutz, the free daily had been troubled since the beginning. Parent company Clarity Media Group had cut newsroom staff by half since launch and reduced home delivery from six to two days per week last summer. A spokesman blamed the closure on a lack of national advertising. The AP report said the newsroom was shocked by the news, a surprising reaction considering that the Examiner had been on the market for months. About 90 people will lose their jobs.

The Examiner is part of a small chain that includes siblings in Washington and San Francisco. Those papers are unaffected by the closure. It seems odd that Clarity would have chosen to launch two of its three newspapers just 40 miles from each other. However, MediaPost says the company hoped to achieve advertising synergies between the two.

Campus Paradox: College Students Prefer Print

College newspapers continue to defy overall demographic trends by enjoying greater success with their printed products than their websites. In fact, writes Brian Murley, the challenge for campus publishers is to get more students to visit them online. Murley, who is assistant professor of new and emerging media at Eastern Illinois University, director for innovation at the Center for Innovation in College Media, and the college media correspondent for MediaShift, writes at length about the growing financial problems at college newspapers. National advertising has been tough to come by, and local advertisers still prefer to run in print. College publications have been hurt by the global recession, as has everybody else. Some of them are now also seeing their university funding dry up. In response, many are toying with supplements on topics like housing and entertainment, and they continue to push local sports as a key differentiator.

Murley points to an Alloy Media + Marketing study last spring that found that 76% of college students had read their college newspaper in the past month. This behavior contradicts the conventional wisdom that young people don’t read newspapers, but perhaps reinforces the notion that hyper-local coverage can appeal even to the digital generation.

There’s Life After Newspapers, But Less Money

Veteran reporter Robert Hodierne posted an online survey asking the question: “Is there life after newspapers?” He got 595 responses and while the results aren’t scientific, they offer an interesting glimpse into experiences of people who have left or been forced to leave the daily grind.

You can read Hodierne’s 4,100-word essay on American Journalism Review here, but here are some bullet points we took away. More than half the layoff victims report finding full-time work within three months. More than 90% found jobs within a year. Only 6% found jobs at newspapers. Most of those who switched industries – media relations is a popular alternative, but Hodierne’s vignettes cover a broad range of new careers – say they’re happy in their new jobs. Even so, 85% said they miss working at a paper.

The news isn’t all good, though. Many are making less money. “The midpoint salary range for their old jobs was $50,000 to $59,000. Those who listed salaries for their new jobs were a full salary band lower – $40,000 to $49,000,” Hodierne writes. Worse is that the salary cuts appear to hit older workers harder. “The median age of those who made less than $20,000 at their old newspaper job was 24. The median age of those now making less than $20,000 is 48.”

Hodierne interviewed many respondents and found a wide range of experiences. Theresa Conroy opened a yoga studio and loves it. But Joseph Demma, who participated in three Pulitzer Prize-winning projects, found himself unemployed at 65 and considering a job as a Wal-Mart greeter. The piece is heavier on anecdotes than statistics, but it offers an interesting glimpse into the lives of many career journalists who have had to adapt to the realities of the new market.

Miscellany

Add Media News Group to the growing ranks of publishers asking employees to take a week of unpaid leave in order to avoid job cuts. This follows Gannett’s announcement of a similar plan earlier this month. Media News’ 3,300 employees at more than 50 newspapers in Northern California have to take a breather by the end of March. The union is negotiating the terms, which is what unions do. Lake County News has more details about cutbacks at Media News, including a report that the company had to loan its flagship Denver Post $13 million to make its December payroll, has cut its staff at the East Bay Newspaper Partnership by 60 percent and laid off the person at the Lake County Record-Bee who is largely responsible for laying out and proofing the paper. If the last item is true, then Craig Silverman at RegretTheError might want to keep a careful eye on future issues of the Record-Bee.

The Congressional Quarterly, which isn’t quarterly, is for sale. No, this isn’t another distressed publishing property being shopped for pennies on the dollar. CQ is actually a nicely profitable business with a subscription website, a weekly magazine and a daily paid newsletter, among other properties. It’s just that owner Times Publishing Co., which is wholly owned by the Poynter Institute, has other things to worry about, like how the south Florida advertising collapse is affecting the St. Petersburg Times. CQ has come under pressure from a slew of recent startups covering Capitol Hill and it needs some careful oversight in order to stay competitive. Plus, Times Publishing could use the money.

NPR’s Marketplace reports that there are plenty of working journalists on Capitol Hill; they just aren’t working for newspapers. Specialized newsletters continue to thrive amid the general industry carnage because they serve up valuable information to small audiences that are willing to pay for it. “Our readers get excited about things like section 112R of the Clean Air Act,” says Rick Weber, who oversees the Inside EPA newsletters. “We cover the minutiae of how policy is shaped and implemented.”

Specialty publications may be attractive options for laid-off journalists who don’t mind focusing on a single topic or government agency. They offer plenty of entrepreneurial opportunity and a lean management structure. The downside is their vulnerability to political shifts and economic uncertainty due to their reliance on a small number of paying subscribers.

“The Death of Daily Newspapers Is a Step Forward” headlines an opinion piece by former newspaper reporter Jon Severson, who maps out a long list of publications that arrive continuously on his BlackBerry. Severson monitors about 30 news feeds on his handheld device and supplements that information with an assortment of weekly magazines, radio programs and personal contacts. “I don’t know a twenty – or thirtysomething young professional worth his or her salt who doesn’t own a Blackberry or similar smart phone,” he writes. “We’ve moved on to more efficient ways to get the information that suits our busy lifestyles.” And it’s eco-friendly.

And Finally…

This has nothing to do with newspapers, but it’s wicked fun. T-Mobile cashed in on the flash mob craze two weeks ago by staging a simultaneous dance by more than 200 people at Liverpool Street Station in London. The event had to be done in one take to maximize the element of surprise, and bystanders did exactly what the cell phone carrier hoped they would do: they recorded the dance on their cell phones.

“The future of newspapers is rooted firmly in 1878. Some guy was doing … 130 years ago, exactly in a place like this … what I’m doing right now. Except he had a better heating system.”

The speaker is Ed Shamy, a 50-year-old former newspaper editor from Vermont who’s part of a growing number of laid-off publishing professionals who are starting their own local publications. Ed Shamy publishes the 130-year-old County Courier in Vermont. All by himself.

Is this a trend? It could be. Yesterday, we told you about Melissa Marinan, a veteran ad sales rep who lost her job when her newspaper closed. So she’s starting her own local newspaper. Just last week, we pointed to a story about Joshua Karp, an entrepreneur who wants to start hundreds of hyper-local newspapers written by bloggers.

Amid all the hand-wringing about the perilous economics of major metro dailies, one fact has been buried: the cost of publishing a local newspaper is lower than it ever has been. Digital cameras have cut the time and cost of taking and publishing photos. Desktop software can be used to lay out pages quickly and cheaply. Editors can tap in to local blogs and websites for information that used to require phone calls and faxes. Many printers can now go direct from computer file to plate. Distribution can be done in an afternoon out of the back of one’s car.

It’s not a great way to make a living, but potentially it is a living. For the ranks of laid-off baby boomers who are no longer supporting kids and big mortgages, it may be a viable way to apply their skills. We believe local newspapers actually have a bright future.

Superior Economics

Why can local publishing flourish while major metros collapse? No unions, for one thing. No presses, no delivery trucks, no circulation departments, no call centers. In fact, local newspapers have almost no infrastructure costs at all. A skilled writer who works full-time and leverages contributions from the community can turn out enough copy and photos to fill a 16-page weekly issue. A second person can cover every prospective advertiser in the area.

The advertisers are there. In fact, local businesses are the great untapped revenue source. Major metros traditionally haven’t bothered with them because the dollars are too small. There are no online services that serve local communities effectively. Most small businesses advertise through a patchwork of channels that can include place mats and business card holders in the local hair salon. It’s a frustrating, time-consuming process that small business owners would rather not bother with. A newspaper that reaches a local audience has a chance to deliver a better return at a lower sales cost.

Print is not dead, only certain manifestations of print. A lot of skilled publishers are out of work right now, and at least some of them will follow the path of Ed Shamy and Melissa Marinan. We wish them well.

Layoff Log

• Baltimore’s Capital Gazette Communications will cut 111 jobs as it moves all printing operations from Annapolis to Comprint, a Laurel, Md. Printer that already produces several daily and weekly papers. The body count at Capital includes 31 full-time and 51 part-time press and mailroom positions, along with 29 other people in other departments. No reporter jobs were cut. The Capital Gazette also prints the Bowie Blade-News, Crofton News-Crier and the West County Gazette. No word on whether the contractor will hire any of the laid-off employees.
• The Missoulian (Mont.) has cut six jobs and will combine its call center with four other newspapers in big sky country. The Montana Standard is doing the same thing.
• The Hutchinson (Kan.) News will lay off four employees and require everyone to take one unpaid week of before April 30. The newspaper also plans to reduce its daily page count.

Downturn Hits Ethnic Press

New York’s ethnic press, which has been mostly insulated from the downturn affecting the newspaper industry, is beginning to suffer. A Spanish-language daily and a Chinese weekly have already closed this year and now the Ming Pao Daily News, which is considered the most intellectual of New York’s four Chinese newspapers, is reportedly slated for closure by its Hong Kong parent. The New York Times notes that ethnic newspapers enjoy an intimacy with their readers and advertisers that big-city dailies traditionally don’t and that this has bought them some security in the past. But the lousy economy is threatening the already thin margins of these small-circulation properties, and many don’t have websites to fall back on. Ming Pao will continue to publish a free daily, which has been the sole bright spot in the market. New York had 10 Chinese daily newspapers just 20 years ago.

Extra! Extra! Blog All About It!

Blogging has come full circle in San Francisco, where a software entrepreneur-turned-publisher has launched a weekly newspaper composed entirely of blog entries. Joshua Karp has big plans for the chain he calls The Printed Blog. If his idea reaches its full potential, he’ll have hyper-local twice-daily editions in thousands of communities around the US. Chicago alone could support 50 localized Printed Blogs. Karp’s editorial model is very Web 2.0-like: bloggers give him their stuff in exchange for a slice of the profits. More than 300 have already signed on. Profits aren’t an issue right now, but Karp believes that local businesses will appreciate the tight control they’ll have over their ad messages as well as the low cost of $15 to $25 to reach 1,000 readers. The New York Times account quotes one advertiser exulting in his new ability to tailor his ads to specific neighborhoods. Printing is outsourced to local distribution points. Naturally, there’s a website.

Layoff Log

• Voice of San Diego is reporting that another 50 employees will be laid off at the Union-Tribune. The paper has been a prominent victim of the area’s cratering economy, having already laid off 15% of its employees a year ago and staging another buyout since then. The U-T has also been for sale for the past six months. While several local investors have expressed interest, no one has written a check yet.
• The Mason City (Ia.) Globe Gazette has laid off nine full-time employees and will leave six open positions vacant. No word on how large the total staff is.
• Lee Enterprises-owned River Valley Newspaper Group, which includes two dailies and eight weeklies in Wisconsin, has cut 10 positions across the company.
• The Traverse City (Mich.) Record-Eagle has cut the equivalent of eight positions from a staff of unspecified size.
• The Peoria Journal Star is laying off an unspecified number of employees part of a plan to reposition the paper. Asked for a quote, publisher Ken Mauser delivers one of the most vapid comments of this new year: “Like many companies operating in today’s business environment, change will be inevitable and necessary to position our business for the future.” A blogger at Illinoize says 11 people lost their jobs.

Miscellany

The sour economy has spurred the San Jose Newspaper Guild and two newspapers to come to terms after 23 months of negotiations. The 25 Guild members get a year of job security and pay raises through 2012, but give up the right to block management from outsourcing some of their jobs.

The right-wing Tulsa Beacon takes the publisher of the Tulsa World to task for joining the most exclusive country club in the city while simultaneously laying off 28 people at the newspaper. Hypocrisy, the Beacon reports, is exclusively the domain of the liberal media.

Good obituary writers have their research done well before the subject is laid to rest. In that spirit, Newsosaur Alan Mutter begins the process of writing an obit for the Chicago Sun-Times, a newspaper that he clearly believes is destined for our R.I.P. column in the not-too-distant future. Mutter, who used to work at the Sun-Times, begins his tale in 1984 and tells the story of the first 10 years of ownership changes that “turned our thoughtful, respected and reasonably prosperous tabloid into a scandal sheet.” It’s a personal, poignant and sometimes funny account that will be told in installments.

Congratulations to Martin Langeveld, whose thoughtful News After Newspapers blog has been scooped up by the Nieman Foundation as part of its journalism lab.  He’s joined there by Tim Windsor and Matthew Ingram. In an introductory entry tellingly tagged “audience, doom, newspapers, and print,” Langeveld describes the reasons why the industry has entered into an inescapable vortex and how the thinking at daily papers must change if there is to be any hope of survival. He will continue to serve up the provocative ideas he started at NAN and the industry will be better for it.

The Register-Pajaronian of the Santa Cruz valley area will cut back its publication schedule to three days a week from six. The 141-year-old paper blamed its financial troubles on the collapse of major advertisers Mervyns and Circuit City. Unspecified layoffs accompanied the move.

If you’re still wondering “Who the hell is Carlos Slim?” Fortune has some background for you. A brilliant investor who specializes in buying distressed firms, Slim is now bailing out The New York Times Co. and may end up controlling the company as a result. For journalists, the nut graph is near the end: ‘Slim seems to neither covet the attention nor access that comes with being a media baron, nor to share the controlling Sulzbergers’ view that their ownership is a trust that puts the company’s journalistic mission ahead of commercial imperative.” If it’s a bio you want, get thee to Wikipedia.

And Finally…

The Boston Globe held out longer against front-page advertising than The New York Times – about two weeks longer. The Globe‘s first page-one ad ran on Wednesday, timed to coincide with the production of an additional 100,000 inauguration issues. The ad was for the movie “Defiance” (see below).

Last night I attended a dinner hosted by the Boston Globe for the stated purpose of gaining insight from a small group of new-media enthusiasts about its Boston.com website. The evening turned into a wide-ranging discussion about the future of the Globe itself, with no clear consensus emerging. I was struck by the vision that the Globe showed when it launch Boston.com 13 years ago and how that vision was later clouded by conventional newspaper wisdom.

Boston.com was originally intended to be a destination site for residents of the Boston area.  It was launched at a time when nearly every metro daily was going online, most under their own brands.  The Globe took a different approach: Boston.com would be branded and focused on a region rather than an existing print property. The Globe even enlisted some local media partners to contribute content and share in the profits. Those partners have mostly fallen away over the years, but the vision of the newspaper’s website as a geographic focal point was a precursor of the “hyper-local” concept that’s so popular in the industry today.

Blurred Vision

That vision didn’t carry through, though. With news editors running the show, Boston.com over the years increasingly looked like the front page of the Globe. National and international headlines shared the home page with local copy and the site lost its regional distinctiveness. Suburban bureaus were axed in the name of cost savings.  As a resident of a nearby town, I personally found that my information needs were better met by small sites that were tightly focused on topics or regions that matter to me.

Now the Globe is trying to get back some of the distinctiveness of Boston.com.  There’s no question that the site is more local today than it has been in years, but the online landscape has changed as well.  Some of the questions that came up during the meeting:

Does a website even matter anymore? So many people get their news through feeds and aggregators that the idea of a website as a destination may be outmoded.

Is brand important? Maybe The New York Times brand is, but does the Boston Globe‘s brand strike enough of a chord in people’s minds to distinguish its value?  Brand may be the only thing newspapers have left in the long run, so that’s a critical question.

How local does the site need to be? Many communities in the greater Boston area are served well by e-mail lists, community newspapers and even individual bloggers.  How granular does a major metro need to get in order to be truly hyper-local?

Who’s going to do the grunt work? Part of the service that major metro dailies perform is sitting through tedious budget committee meetings and city council sessions. It’s a little-appreciated loss leader for newspapers, but it’s essential to their watchdog role.  What blogger in his or her right mind is going to do that?

In my humble opinion, the Globe should do the following:

• Create Huffington Post-style bureaus in local communities, with news provided by stringers and citizens.  Many reporters for community weeklies make little or no money, so the exposure in the Globe would be an incentive for them.

• Borrow a page from Yelp.com, Going.com and Angie’s List and become the dominant source of buying advice for local products, services and activities.

• Ramp up its custom publishing arm to help local companies become legitimate publishers in their own right.  Many businesses want to take advantage of new media to do this, but their efforts are mostly terrible.

• Treat print as a cash cow and manage it downward gracefully while building new revenue streams.  Further cutbacks are inevitable, but it would be nice to balance that with some growth.

• Take a hatchet to the sales force, focusing on hiring and retaining people with classified advertising experience.  Future revenues are going to come from local businesses, so invest in the people who can sell to them.

The group from the Globe listened attentively and appeared to take the input seriously.  Unfortunately, the barn door has already closed on print and the declining revenue picture offers fewer options for investment with every passing day. But Boston.com is a nice website.

Envisioning a Future Without the Times

Writing in the Atlantic, Michael Hirschorn starts with an outrageous statement: what if The New York Times folds its print newspaper four months from now? Okay, it’s not likely to happen, Hirschorn writes, but the way The New York Times Co. is spiraling downward, the Big Apple’s intelligentsia should prepare for a day when they won’t have a newspaper to read in their SoHo coffee houses.

Hirschorn goes on to present a well-written summary of the changes readers are likely to see as newspapers exit the scene. “Common estimates suggest that a Web-driven product could support only 20 percent of the current staff; such a drop in personnel would (in the short run) devastate The Times’ news-gathering capacity,” he notes, suggesting that international coverage will almost disappear in the process. “Internet purists may maintain that the Web will throw up a new pro-am class of citizen journalists to fill the void, but for now, at least, there’s no online substitute for institutions that can marshal years of well-developed sourcing and reporting experience.”

Ultimately, emerging sources like Huffington Post and Talking Points Memo may create a new model for participatory journalism, but the quality of services they provide will be more erratic and unpredictable that those readers have known in the past. New-media operations needs to maintain low overhead. Huffington “is the prototype for the future of journalism: a healthy dose of aggregation, a wide range of contributors, and a growing offering of original reporting.” Since few of those contributors are paid, what you see is what you get.

For Better or Worse, China Invests in Newspapers

“As international media is contracting, China is going in the other direction,” says Doreen Weisenhaus, a media law professor at the University of Hong Kong, in an opinion piece by Forbes‘ Robyn Meredith, about China’s ambitious plans to expand its international media presence. Meredith says China plans to spend $6.6 billion to build the staffs of China Central TV, People’s Daily and other news organizations both on the mainland and around the world.  US bureaus are planned, among others, and new Chinese-owned, English-language newspapers will be launched in the U.S. and China.

The problem, Meredith says, is that China doesn’t have a free press.  Although controls were loosened somewhat during the 2008 Summer Olympics, there’s no indication that these expanded news organizations will be allowed to say anything that displeases the government. The result could simply be an expansion of the Chinese propaganda machine.  And if someone gets the idea to spend some of that $6.6 billion buying up distressed US newspapers, well, it’s not a pretty thought.

Layoff Log

• Even as it expands its footprint into the US market, the Financial Times is still feeling the pinch. The newspaper will cut 80 positions across its global operations. The British have their own word for this: redundancy. We would still prefer to be laid off than found redundant.
• The Billings Gazette is laying off eight people.  There’s no word on what percentage that is of the total staff size.

Miscellany

We’ve noted several examples of newspapers burying the lead in reporting on their own layoffs.  So give credit to the Seattle Post-Intelligencer for doing the opposite.  Not only did SeattlePI.com cover the announcement of its likely sale or closure in detail, but now the paper’s managing editor, David McCumber, has launched a blog to document the 60 days until decision time. It’s an honest, personal and well-written account of the many thoughts are no doubt going through his mind as the clock ticks away.

Erica Smith, whose Paper Cuts maps mashup is de facto official record of newspaper industry layoffs, has put together a nice list of newspapers that use Twitter. Such a roster is automatically out of date the minute it’s posted, but it gives you a good idea of how various news organizations are segmenting their coverage and also where the list of followers is growing fastest. You can also see who gave up early. BTW, the Paper Cuts counter has been reset for 2009.

Veteran travel editor John Flinn recently took a buyout package from the San Francisco Chronicle. He’s not bitter or angry, but he’s a bit wistful about how the industry’s troubles are affecting his specialty area. Travel scribes are a different breed of feature writer, each with a unique voice and a different way of going about the job. Sadly, they are being replaced by “utility infielders” with their top-10 lists and “charticles.” But Flinn isn’t looking back. He’s hitting the road soon in his VW Westfalia pop-top camper van.

Give-Us-A-Break Department: “The vast majority of Americans believe the U.S. media industry’s coverage of the faltering economy is actually contributing to the economic crisis by ‘projecting fear into people’s minds.’ That’s the finding of a survey of 1,000 U.S. adults released Thursday by Opinion Research Corporation. The survey, which was conducted last month via telephone, found that 77% of respondents believe fear mongering by U.S. media outlets is negatively impacting consumer confidence in the economy.” – MediaPost, 1/2/09.

The media blogosphere has been buzzing over a short interview with Google CEO Eric Schmidt in Fortune in which the executive laments the loss of newspaper journalism but doesn’t offer to lift a finger to help the industry financially. Schmidt’s remarks may appear disingenuous at first, but if you consider Google’s philosophy, they’re actually consistent with his previous statements and make sound business sense.

Among the digerati, Schmidt has been outspoken in his concerns about the damage that the industry’s troubles are inflicting on the public’s right to know. However, it makes no sense for Google to intervene to prop up a business model that doesn’t work any more. Google stands to lose plenty from the industry’s collapse. Newspaper content is one of the most valuable assets in Google’s index and users of the company’s news aggregation service are its most attractive demographic audience. Newspapers “don’t have a problem of demand for their product…People love the news,” he tells Fortune.

Google is in an awkward situation: it has the money to prop up the industry, but doing so would be bad business judgment. Schmidt notes that Google can do nothing about the structural problems that plague the industry. Investing in failing business models is simply throwing good money after bad. So, to some extent, people like Schmidt must stand by and watch helplessly as a business that they respect and admire comes apart at the seams.

Schmidt’s position is based on sound business judgment, the kind of judgment that has gotten Google where it is. He shouldn’t be blamed for doing what’s best for his shareholders and employees.

It looks like a chain of Connecticut newspapers that were just days from closure will continue publishing under the guidance of a New Englander. Longtime newspaper executive Michael E. Schroeder (left) has bought the group that includes the Bristol Press, the New Britain Herald and three nearby weeklies. Schroeder was most recently publisher of BostonNOW, a free daily with a promising future that abruptly closed under unusual circumstances last spring. Schroeder was previously with Newsday. There’s no word on what he plans to do with his new possessions, but the papers will continue to publish on their current schedule for now. “We look forward to building upon the rich history of these properties,” reads Schroeder’s quote from the press release.

Selling Local

Steve Outing has a dozen tips for how newspaper companies can make money. Some are amplifications of his earlier ideas and a few are brand new. Two themes run throughout: create lots of niche products and learn to sell them that way.

It’s the latter theme that doesn’t get as much press as it should. Newspaper industry pundits tend to focus a lot on what needs to be fixed on the editorial side of the house (still plenty) but we don’t read that much about ad sales. While admitting that he’s an editorial guy, Outing addresses that issue repeatedly.  Success in the emerging hybrid print/online world demands that ad sales staffs be able to sell targeted advertising aimed at niche interests. This is antithetical to many print sales veterans, who have grown up in a world that demands skill at selling 26-time print schedules to large department stores and cell phone companies.

This is a problem for newspaper companies.  In our own experience working at an Internet publisher a decade ago, we found that sales reps recruited out of the print world were often disasters at online sales.  They didn’t understand how to define the value of niche markets and they sometimes appeared to believe that signed contracts in the few hundreds or thousands of dollars was beneath them.  Yet this is the only way that advertising works online.  The most successful print refugees often came from the classified sales field, where success was all about closing lots of small deals.

Outing’s recommendations deserve careful consideration, as do most of his ideas.  What he doesn’t address in this column is the thorny issue of how to equip a generation of sales reps with a whole new set of skills.  In our experience, it’s difficult at best and often impossible.

Shooting Holes in “Hyper-Local”

Last month, we reported on new Gallup research that shows the Internet closing the gap with local newspapers as people’s preferred news source. Now David Sullivan of “That’s the Press, Baby” has taken Gallup’s own numbers and sketched out a counter-intuitive case that newspaper readership is actually stable or growing among the young people who are widely believed to be abandoning the medium. What’s more, he makes an argument that readers are gravitating to national news and not to the hyper-local content that’s frequently held out as the industry’s salvation.

A big factor could have been last year’s election, Sullivan posits. People just couldn’t get enough of news from the campaign trail, which is too bad because local newspapers were busily paring back national coverage in the name of being more local. There’s no question that national newspapers saw the least erosion in circulation during the last year. Could it be that hyper-local isn’t a obvious as solution as it seems? We weren’t able to give Sullivan’s number-crunching adequate scrutiny, but his logic looks sound. Please have a look and post your comments here.

Here Comes Shirky

If you haven’t read any Clay Shirky, you’re in for a treat. The NYU adjunct professor and author of Here Comes Everybody has a chat with the Guardian about the future of media that yields several fine quotes:

• Newspapers “were such a good idea for such a long time that people felt the newspaper business model was part of a deep truth about the world, rather than just the way things happened to be.”
• “The 500-year-old accident of economics occasioned by the printing press – high upfront cost and filtering happening at the source of publication – is over. But will The New York Times still exist on paper? Of course, because people will hit the print button.”
• “Imagine only having one browsing copy of every book in a bookstore. You could say ‘Malcolm Gladwell’s Outliers looks good’, and out pops a brand new copy. Why does a bookstore or a publisher have to be in the shipping and warehousing business?”

Layoff Log

• The Springfield (Mass.) Republican plans to cut 22 full-time and 14 part-time positions, although the cutbacks won’t affect news or sports staffing. There was also some good news for the Republican: it will soon begin printing the Record-Journal from nearby Meriden, Conn.  Apparently, the Connecticut paper’s 30-year-old presses were no longer up to the task. The bad news: the Record-Journal is eliminating 24 full-time and 32 part-time jobs.
• The Wyoming Tribune Eagle revealed that it has cut 14 positions in the past year, but didn’t say how many people it employs. Two more were laid off this week.
• Oklahoma’s second largest newspaper will lay off 28 employees, 26 of them in the newsroom. The Tulsa World said the cuts amount to about 5% of the workforce.
• The Anchorage Daily News is shrinking and re-sectionalizing to accommodate smaller issue sizes. Here’s Editor Patrick Dougherty’s super-nice explanation.

Miscellany

Expect many more papers to follow the lead of Detroit’s Free Press and News this year. Hernando Today, a daily produced by The Tampa Tribune, will cut back to five days later this month by eliminating its Monday and Tuesday editions. Founded as a weekly in 1981, Hernando Today went daily in 1996. It covers Florida’s Hernando County.

Detroit-area writer Dave Hornstein has an interesting history of the newspaper wars – or lack thereof – in Detroit. The miserable condition of the two dailies in that city is largely self-inflicted, as Hornstein tells it. The killer was a bitter battle between newspaper management and labor unions that led to a lockout, large circulation declines and $500 million in losses in the late 1990s. Add to that a couple of ownership changes and major modifications to the joint operating agreement and you have two organizations that were severely weakened when the recession hit. Under those circumstances, it’s not surprising that Detroit was the first city to swallow the bitter pill it did last month.

 Richard Pachter says the new book, The Man Who Owns the News: Inside the Secret World of Rupert Murdoch, is well worth a read. The inside scoop on what went on with Murdoch’s Wall Street Journal acquisition is worth the price of admission (a modest $19.77 on Amazon) and the reviewer praises author Michael Wolff for maintaining balance in a book about a man who inspires strong opinions from both fans and foes. Interesting tidbit: while Murdoch’s Fox News is often criticized for its right-wing slant, the media mogul’s Sky News network in the UK has a liberal tone. Murdoch is politically conservative, but his current wife has broadened his thinking.

Steve Yelvington has created The Shutdown List, an interactive timeline of newspaper closures. The site appears to be more of a programming exercise than an actual tracker, but it’s a lot slicker than our lousy RIP list to the left. You can submit your own candidates for inclusion.

We thought we’d never see this one: The New York Times has started selling advertising on its front page.  Yesterday’s issue carried a 2 1/2-inch strip ad at the bottom of page one from another distressed media company: CBS. It was the first time in the newspaper’s 157-year history that an ad has appeared on the front page.

The Times rolled out the program quietly, making no advance announcements and covering the news matter-of-factly in its business section. MediaPost notes that the Times’ concession illustrates just how bad the business is. “Although many big newspapers have offered advertisers front-page spots, The New York Times long prided itself on presenting readers with nothing but news–in keeping with the paper’s reputation for substance and gravitas,” it said.

The Times‘s own account notes that most newspapers offer some front-page ad space, but the Times and the Washington Post have been long-time holdouts. Today’s edition doesn’t have a front-page ad.