BuzzMachine

Below, I linked to Colin Crawford announcing IDG’s transition from being primarily a print to primarily a digital company a year ago and today the NY Times wrote about it. Colin follows up today on his blog and says (my emphasis):

There’s a lot to this story but one of the most important issues is that by being unburdened by print allowed the team at Infoworld the opportunity to focus on the changing needs of their customers and to develop online , event and mobile products. It’s changed the culture of that brand.

Yes, print is a burden. It’s expensive to produce for it. It’s expensive to manufacture. It’s expensive to deliver. It limits your space. It limits your timing. It’s stale when it’s fresh. It is one-size-fits-all and can’t be adapted to the needs of each user. It comes with no ability to click for more. It has no search. It can’t be forwarded. It has no archive. It kills trees. It uses energy. It usually brings unions. And you really should recycle it. Wow, when you think about it, print sucks.

The Star-Tribune disputes a New York Post story that it’s about to go bankrupt but I wouldn’t say this sounds positively optimistic (my emphasis):

“The Star Tribune currently has sufficient liquidity and is current on all its debt payment obligations,” Harte said in a statement issued Sunday afternoon. Pressed further, he said the newspaper would not miss a debt payment this year unless things worsened.

Bets, anyone? Add this to Tribune Company having to sell Newsday to raise cash to handle its debt and Journal Register facing a debt crunch. The slope is getting slipperier and steeper.

Henry Blodget analyzed the future of newspaper advertising this week, concluding that “the $42 billion that was spent on print newspapers in 2007 isn’t going to vaporize–it’s just going to go somewhere else.” By 2017, $10 billion of it will go to surviving newspapers, $2 billion to outdoor, and $30 billion to digital — of which, he predicts, $5 billion will go to newspaper web sites and $25 billion will go to “Google, Yahoo, Craigslist, eBay, Amazon, job sites, blogs, mobile ads, video ads, etc.”

But I disagree. Much of the advertising that is still in newspapers will vaporize. Much of it already has vaporized. Papers in top markets are down tens upon tens of millions of dollars each in classified revenue that has disappeared. Those former advertisers are using free or near-free substitudes to bring in and serve customers: craigslist, real estate agents’ own sites, car dealers’ own sites, and other new competitors. That’s not even to mention the cheaper sites — Monster, et al — that took real marketshare but at lower revenue. That newspaper revenue is gone forever. I’m not whining about that. It’s the new reality of the post-scarcity economy. This will only continue.

Now add Google and its power to get more and more targeted in a more efficient and transparent (well, translucent) marketplace. That is to say, the same marketing power will be bought for less.

Now add more changes in the marketplace itself. There has been a tremendous consolidation in retail with all department stores becoming one — Macy’s — and big-box and mall retailers that spend more on national than local budgets and Wal-Mart killing stores but not advertising locally itself. Yellow Pages will also migrate to mobile Google maps, I predict.

And there is the overall trend of advertisers replacing ad dollars when they create instead direct relationships with their consumers. Bob Garfield identified that in his Chaos Scenaro 2.0. And I wrote about that here.

So you see plenty of revenue vaporizing. It’s not a zero-sum game. It’s a minus-sum game.

Now at the same time, if papers are smart, they can use online and its laser targeting to serve a new population of hyperlocal advertisers that never could afford high-priced papers before. But as I can tell you from first-hand experience, papers are not built for high-volume, low-cost advertising like this. So those advertisers will go to Google and local blogs.

: Gallows humor: Friend Steve Gorelick sends me the Onion’s analysis:

A recent glut of feature stories on the death of the American newspaper has temporarily made the outmoded form of media appealing enough to stave off its inevitable demise for an additional 21 days, sources reported Monday. “People really seem to identify with these moving, ‘end-of-an-era’-type pieces,” Washington Post editor-in-chief Leonard Downie, Jr. said. “It’s nice to see that the printed word is still, at least for now, the most powerful medium for reporting on the death of the printed word.” Downie added that the poignant farewell Op-Ed he recently penned was so well received that he will be able to hold onto his job for up to six more days.

I just saw this stat as I was searching for something for the book.

Pew said that in 2004, 2007, 53 million Americans “have used the Internet to publish their thoughts, respond to others, post pictures, share files and otherwise contribute to the explosion of content available online.”

Only 50 million Americans now buy daily newspapers.

The writers are starting to outnumber the readers.

And the readers are reading something else. Pew says that in 2006, 57 million Americans read blogs, more than read newspapers.

If I were Rupert Murdoch, I think I might just let the Dolans of Cablevision have Newsday. For they’ll likely run it into the ground. Like Brian Tierney, who had the misfortune of winning the Philadelphia Inquirer, they’re ill-prepared to manage the rapidly declining fortunes of a newspaper (see the post about accelerating circulation declines and the post about local advertising I’ll soon write above). Unlike Murdoch and the Daily News, they have no real opportunities for synergy and savings. Oh, yes, they have cable channels News12 LI, NJ, and NY but they are bargain-basement operations that could have reinvented local TV but instead come off like parodies. (I worked with them on the New Jersey launch when I worked at the Star-Ledger’s parent company.) The opportunities for cross-media ad sales are slight. They have a terrible reputation in the market for their customer service. They haven’t been able to agree with their board on more than one offer to take their company private; it’s almost as if they hope that a newspaper would be dead weight sufficient to lower the price of the empire so they could finally buy it.

Here’s the irony: As with the Wall Street Journal, which was better off with Murdoch’s willingness to invest than the Bancroft family’s unwillingness, so would Newsday appear to be better off in his hands than in those of the alternatives. On On the Media this morning, Brooke Gladstone asked Jack Shaffer whether Murdoch is the last salvation of the American newspaper industry. Jack pshawed the thought. I’m not so sure.

: Lauren Rich Fine, former analyst, says she’d buy a newspaper if the price were low enough. I think all you may be buying are shutdown costs. Remember when Tribune unloaded its strikebound Daily News on Robert Maxwell (I was Sunday editor at the time), they paid him $60 million to take it off their hands. And newspapers have only continued to slide since then.

Alan Mutter, chronicler of the decline of newspapers, has a good bit of context on the accelerating decline of newspaper circulation.

Based on the record 3.5% drop in daily circulation reported today for the nation’s largest newspapers, it appears that average daily circ this year will be no better than 50 million. If so, that would be the lowest level since 1946, when daily sales averaged 50.9 million, according to statistics provided by the Newspaper Association of America.

Though circulation has fallen back to pre-Baby Boom levels, the population has more than doubled since 1946. If you divide circulation by population, you will find that fewer than 18 out of 100 Americans today buy a daily or Sunday newspaper. Back in 1946, 36% of the population bought a daily paper and 31% took a Sunday edition.

While newspaper circulation has weakened since the 1980s, the decay has accelerated sharply since 2003, as illustrated in the chart below. Sunday circulation, which had been relatively more resilient than daily sales, now is falling more precipitously than daily sales. In the six-month reporting period ended on March 31, 2008, Sunday circ fell 4.2%, nearly a full point higher than daily circ.

For contrast, 121 million Americans voted in the 2004 Presidential election, 97.5 million Americans watched the SuperBowl, there are 40 million black Americans, 37 million Americans watched American Idol last year.

It’s no longer news that newspapers are reporting disastrous drops in circulation: “Apart from those two national dailies, which eked out gains of under 1 percent each, every other newspaper in the top 20 posted declines, according to figures released Monday by the Audit Bureau of Circulations.” It would be news if they figured out what to do about it.

Change in newspapers — upgrading, updating, inventing, innovating — should be celebrated, no matter what causes it. See the story of the Madison Capital Times shifting — “reluctantly,” says the NY Times copy editor — from print, 90 years after it was first printed, to the web. Bravo, I say. This is the kind of bold move the American newspaper industry should have made five years ago, when they easily could have foreseen this future. The public is online, the new means of gathering and sharing news is online, the medium is more efficient and cheaper to run, the old business model is shot. Why wait? Yes, I sympathize with the staffers who lost their jobs, just as I sympathize with those on other papers who’ve lost theirs because their managements have not been strategic and brave and have not retrained them (or to put the responsibility where it better belongs, they they haven’t retrained themselves). But every newspaper in America should be delighted this is happening and should be watching it closely to see what works and what doesn’t. I think Jay Rosen shares this view as he reports on the shift and gives good advice to the former paper’s editors:

* I know this isn’t how they’re thinking about it in Madison, but from my perspective Saturday marked the debut of a local newsblog and opinion site in Madison with an editorial staff of 40, and a web-to-print engine that is ready to start clicking. Those are basically good facts for the Cap Times. It’s up to the staff to bring journalistic imagination equal to them. . . .

* If I were Paul Fanlund, the editor of the Cap Times, I would set a first year goal of developing 400 solid contributors of news, expertise and opinion able to work with my 40 pros at headquarters, and I would calculate that to get the 400 I would need a to register about 4000 participants in various networked journalism projects.

I think this is a big deal: LA Times editor Russ Stanton said the paper will “train all editorial employees in new skills in every medium in which we work (print/web/TV/mobile/radio).” I hope that also means training everyone in new opportunities: collaboration, networks, opening up the process… (By the way, I was honored to be included in Stanton’s reading list.)

I’m frustrated these last few days by the discussion online about newspapers and the future of journalism. It’s just such a retread.

Britannica’s blog — yes, even they have a blog — invited a handful of commentators to pontificate, doling it out as if it were a newspaper series (remember them? they were kinda like miniseries, only in black & white). What I want to hear is ideas for the future, not restating of the problem or the worries, but that’s mostly what we got. Nick Carr led it off with his predictable lamentation about change. Jon Talton — apparently a computerized algorithm with a name — recycled every blog complaint since 1999. Well, that’s helpful. Jay Rosen wondered about business models, which is on point (though the Britannica people, with their access to all the world’s wisdom, might have wanted to bring in some economists and business geniuses to try to answer his questions). At least Clay Shirky pushed for experimentation. And even former Tribune columnist Charles Madigan, after issuing what he seems to think is a required snark about the audacity of citizens daring to speak, has some ideas (he wants to make money for a free print paper by charging people to make wedding videos, arguing that it’s so hard to learn; I hereby invite Charlie to a CUNY class where we’ll teach him in no time). But it’s just so old, not moving the peanut down the street.

Meanwhile, friends Chris Anderson and Howard Weaver find kismet arguing that the state of the newspaper business isn’t as bad as some say. Well, a discussion of how bad bad is isn’t terribly helpful, either. What we need is discussion of ideas and action.

We must move past this pining for the past and shrugging about the future. We also have to stop seeing newspapers as the center of the news universe. More on this later.

One could make a blog with nothing but daily reports of bad news about newspapers.

One could make another blog with suggestions for drastic measures that should be taken — even if as experiments — at every newspaper company in the country.

The latest bad news is word that Journal Register, publisher of the New Haven Register and 21 other daily and 310 nondaily newspapers, could go bankrupt. The article argues that this is more a problem of debt service than operations — but then it goes on to say that “its operating performance has declined” with EBITDA expected to fall from $90 million to $70 million in a year.

If I can get some money into a program at CUNY — and as part of a conference on new business models for news I’m holding there, probably now in September — I’m thinking about hiring MBAs to create drastic models of new newspaper businesses, such as:
* The free newspaper — here’s an argument that the Guardian should go that way.
* The online-only newspaper — that has happened in Madison.
* Selling off printing, production, and distribution arms — as suggested by Dave Morgan.
* Break them up into a bunch of niche products — as suggested by NewMediaBytes. That could mean selling the sports section separately (or making it online-only); it could mean turning out a whole bunch of products from golf to parenting to food.
* Go hyperlocal.
* Turn all the reporters into independent agents — as I sort of suggested here — and the newsroom and news product into just a packager and ad network.
* Jettison everything but real reporting — which is a smaller proportion of an editorial budget than many would like to admit — and charge more for the product to a highly interested audience.
* Distribute a local supplement inside national papers: USA Today, The Times, or the Journal.
* Become a local magazine with an online component covering breaking news, local calendars, and such. (Except I think that local magazines are in as much trouble as local newspapers.)
* Become an ad network.

What else? Note that I did not suggest foundation or public support. I think that’s a pipedream. Journalism either is or isn’t a business. I think it is, but not like the one we have now. And we’d better get to reinventing it or it could well die. The Journal Register could just be the first.

Whoop. Whoop. Whoop. That’s the alarm going off, newspaperfolk.

: LATER: Note that the Britannica blog is holding a forum this week on the fate of newspapers. I’m looking forward to Clay Shirky’s call for experimentation.

The New York Times Monday media report completely buried the report of the worst newspaper ad revenue decline since 1950, when the NAA started measuring the number (which is to say, the worst decline ever). It’s on page C-7, given a mere four paragraphs. Granted, the news is a bit stale, having come out three days ago. Still, you’d think that the media section would have decided to give this more perspective.

I think the proper perspective is that we are at a full-blown, slippery-slope, accelerating-fall, watch-out-below crisis for the newspaper industry and professional journalism with it. It’s time for drastic thinking.