Washington Post Co. dipped into the red for the first time in its 37-year history, reporting an operating loss of $2.7 million in the second quarter.  A big factor was the cost of an $87 million buyout program intended to reduce headcount, but the newspaper division lost money on operations for only the second time in the company’s history. The $5.3 million operating loss came on a 22% dive in print  advertising revenue. Online advertising was up an anemic 4%. Fortunately for the Post, it owns the Kaplan education company and some cable and Internet franchises. Unfortunately, it also owns Newsweek, which had an operating loss of $3.7 million for the quarter.

Troubles in Hyper-Local Land

Some people say the savior of the newspaper industry is to go hyper-local, but remember to tell that to the ad sales people, who could make a lot less money. The Wall Street Journal reports on the sliding market share of newspapers in their own local ad markets, where one researcher says they now control only 27.4% of the business, down from nearly 36% two years ago. The reasons? Ad commissions for online sales are much lower than those of print sales, meaning that ad reps have less incentive to sell digital ads. Also, newspapers are mostly limited to selling poorly performing banner ads to local business, while pay-per-click programs like Google’s are cheaper and more cost-effective. Newspapers need to come up with more innovative sales programs and retrain their sales forces to live on lower margins than they’ve been accustomed to, and that’s not easy.

“Internet companies like Google and Local.com, which collectively control 53.3% of the local online ad market, up from 25% in 2006. And they’ve done that with only 1,400 ad-sales reps,” says the Journal. That’s one reason that E.W. Scripps, A.H. Belo and Lee Enterprises all reported declines in online ad revenue in the most recent quarter. (WSJ chart)

Maine Chain Finds a Buyer

Looks like Seattle’s Blethen family is finally going to rid itself of  a troublesome chain of newspapers all the way across the country in Maine. A group of four investors with local ties has secured exclusive rights to negotiate terms to buy the papers, which includes  the Portland Press Herald/Maine Sunday Telegram,  the Kennebec Journal in Augusta and the Waterville Morning Sentinel,  as well as some weekly publications. A spokesman for the group said the investors are all savvy businesspeople who are committed to the newspaper business and who see the purchase as an opportunity to grow the properties. Richard L. Connor is the most likely candidate to head the operational turnaround. He’s had success in his most recent role as  editor and publisher of the Wilkes-Barre (Pa.) Times Leader, where circulation has actually grown since he took over in 2006. A spokesman for the investors said the group is going to ask for concessions from the Newspaper Guild. A Guild spokesman said the union is happy to work with someone who has a plan.

Miscellany

The Hartford Courant has been pretty quiet about covering its own layoff of  57 newsroom employees,  and TV newsman and blogger Rick Hancock says he’s heard that reporters have been told to spike such stories. He quotes the paper’s reader representative confirming that at least one story about the matter was killed, although she didn’t know why. The Courant has cut its newsroom staff by 55% since 1994.

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Ted Rall has radical prescriptions for the industry. Go offline, copyright everything and stop feeding the wire services.  Newspapers’ troubles began when they started to give away their products for free to online distributors, says the noted cartoonist and liberal columnist. So it’s time to shut down and declare ownership of intellectual property. Newsosaur Alan Mutter may agree. His analysis of Associated Press content shows that only a small percentage is contributed by AP reporters, about a third, by his estimation. “If newspaper staffs continue to erode, where will the AP and its clients get the news in the future?” he asks.  Rall might also find an ally in Goodloe Sutton, publisher of the Linden Democrat-Reporter in western Alabama. He’s just raised the price of a daily issue from 75 cents to one dollar and it hasn’t made a whit of difference. Maybe people are willing to pay for news they can’t get anywhere else.

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Slate’s always provocative media critic Jack Shafer probes at an underlying reason for newspaper troubles: they’ve lost their role as social currency. Shafer remembers the days when conversations typically started, “Did you read the story in the paper today about…?” and observes that those discussion-starters have been replaced by comments on Facebook and Twitter. The loss of that central role as the source of current information deprived newspapers of their “must read” status, he says, and that made them less crucial to the everyday needs of local communities.

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Yahoo! has driven more than 100 million page views to its 779 member newspaper  sites with a traffic-generating power that one publisher described as a “fire hose”. The Deputy ME of the Dallas Morning News says, “We’ve had placements that have accounted for up to 27% of the day’s page views, and 65% of the day’s unique visitors.”E&P quotes liberally from the Yahoo press release in its  coverage, which omits important details like how the traffic patterns break  down between member newspapers and how traffic has grown since the project’s inception. But it  was a Friday afternoon…

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Playboy publisher Christie Hefner blogs about the newspaper industry’s troubles and suggests that papers should market their products better and unify print and online sales, as her publication has done. Perhaps they should also adopt the Page 3 Girl idea that’s worked so well for the U.K.’s Sun.

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Shares of Journal Register Co. fell to a penny in over-the-counter trading on Friday. That values JRC, which traded at $20 a share less than three years ago, at just $590,000.

Layoff Log

• The Newark Star-Ledger is looking to cut 200 jobs, or about 15% of its 1,400-person payroll, through buyouts, according to publisher Advance Publications. If it doesn’t hit that goal, the paper will go up for sale. Editor & Publisher’s Joe Strupp says the paper’s troubles symbolize how bad things have gotten in the industry. The Star-Ledger dominated New Jersey life, he says, and the paper was so fat and happy that it didn’t even see the need to invest in its online properties until recently. Strupp quotes one reporter as saying that news of the extent of the Star-Ledger‘s problems come as “a punch in the gut.” Advance is also seeking to wrest concessions from the union that represents about 750 employees.
• Times are tough in Idaho. The Press-Tribune of Nampa will  lay off 16 employees, or about 10% of its staff, and leave an unspecified number of vacant positions unfilled. The move comes a month after the Boise Stateman laid off 16 people and cut another 22 pressroom positions by combining printing operations.  Lee Enterprises will combine five Idaho daily and weekly papers into one daily – the Times-News – and lay off 14 people, or about 12% of the total staff. The move sounds sensible, given that two of the weeklies had circulations of less than 600.
• Another Lee property, the Munster (Ind.) Times, has laid off 12 employees  and cut an unspecified number of additional positions through attrition. The story in the Gary Post-Tribune didn’t say how many people the Times employs.
• The Bozeman (Mt.) Daily Chronicle will lay off six full-time and three part-time employees and hold nine vacant positions open.  Five of the affected positions are in the newsroom.
• The Des Moines Register may also announce some job cuts soon, internal sources told  the Iowa Independent.  Specifics were hard to come by, however. Management raised the possibility as part of a standard staff meeting and didn’t elaborate. The paper, which dominates the Iowa market, has about 200 editorial staffers.

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