New Year's resolutions for newspapers

Some realistic resolutions for newspapers in 2009:

• Stop talking about your web site as if it's a separate entity. The print and web products are part of one newsgathering organization.
• Grow revenue by offering low-cost web advertising solutions to small local businesses. It will mean setting up a web-based ad purchasing system to bypass your sales staff, and implementing more text-based ads. Ask Google how that's going for them.
• Accept larger internet ad formats. Reject pop-ups and ads that grow and shrink. Figure out what works in print display advertising, and apply it to the web.
  
• More photos, in print and on the web.
• More raw video. Less produced video. No "pop-out" viewers. More pre-roll and lower-third ads.
• More "police blotter" type content on the web site. Take a few cues from local TV news when appropriate.
  
• Grow some thicker skin, and stop lamenting your own decline in your own pages.
  
• Make signing up for home delivery ridiculously easy, straight forward, and relatively cheap. Give devoted web readers reasons to subscribe on Sunday only (comics, coupons, sales fliers, puzzles, etc.) Embrace a hybrid print/web future.
  

WaPo ombud amazed that conservative misses paper

Don't get me wrong: most of the trouble newspapers are in have to do with changing readership habits and the inability to monetize internet traffic. But the "liberal media" label doesn't help.

On Sunday, outgoing Washington Post ombudsman Deborah Howell penned her "goodbye" column. Among regrets about not being able to respond to all reader concerns and ruminations on the changing nature of the business, Howell added this:

"Most cities don't have as good a paper as The Post. A friend who moved away told me that she misses The Post more than anything else. And she's a conservative Republican."

So, apparently, it's noteworthy that a conservative Republican can enjoy the Washington Post.

The hand-wringing over the political affiliation of journalists and readers baffles me. A very loud minority of bloggers and story commenters will cry "bias" at almost any story in print. The majority of people could care less about the minor slights that partisans on both sides cite as examples of a huge media conspiracy. So why should newspapers make this an issue for discussion in their pages?

Howell writes: "It's not that we have thin skin; we often act as though we have no skin and bleed at the slightest touch." Therein lies the answer.

Stop talking about it. Make sure that you treat both sides fairly, make sure that you're applying the same standards of story selection to both sides, and then shut up. An assertion repeated often enough will generate its own reality.

You are a publishing for a mass audience. Act like it. Be confident enough about your own neutrality to let stories stand on their own. Stop putting your own insecurities in print and giving your publication a dubious reputation in the process. Now, back to talking about real problems.

Web-only vs. print-only business models

Following up on my modest proposal for Detroit, there's new evidence that a print-only model may be viable, and a web-only model may not be too far off.

First, New York Times media business reporter David Carr profiles TriCityNews of Monmouth County, NJ. It's an alternative weekly, granted, but the real "alternative" here is that it doesn't publish articles on the web. Instead, you actually have to pick up a free copy of the printed paper, complete with "beautiful full-page ads." It's a decidedly low-tech business model that's generating double-digit profit margins during a recession. "Right now, the Web makes no business sense for us," says Dan Jacobson, the paper's owner.

On the other side of the coin, there's word that the Los Angeles Times' web revenue is exceeding its editorial payroll costs. As commenters on Jeff Jarvis' blog point out, this doesn't mean that LAT can drop its printing operations and business offices, and survive with just a newsroom. But with payrolls shrinking and internet ad revenue increasing (albeit at a declining pace), the break-even point for a big, online-only newspaper may be approaching. Up for debate: whether shedding the print "anchor" will erode the brand and hurt online traffic and ad sales.

There's no doubt that print operations account for a large portion of a newspaper's budget, perhaps around half. But the print product is also making much more money than the online product. So which is the right approach? It's unclear. Until newspapers can come up with more effective web advertising options to sell, while also adding a diverse array of new revenue streams, I'd put my money on a print-only paper over an online-only one.

A modest proposal for Detroit

I propose that the Detroit Media Partnership try something really bold. Instead of having both the Free Press and the News cut back on home delivery, how about an experiment? Deliver the Free Press seven day a week, and discontinue free access to the web site. For the News, quit publishing altogether, and just focus on the web site. Okay, I know that couldn't really work because of their partnership agreement. But imagine if it could work.

Would the Free Press regain subscribers who didn't see why they should pay for a dead-tree edition when they could read the stories for free online? Would the News get rid of so much overhead that it would be able to survive as a lean, scrappy digital news source? Man didn't get to space and the moon before launching a couple test rockets. If only we could have two newspapers in one city willing to test radical new ideas. Which newspaper would be the next Laika, and which would (possibly) be Neil Armstrong?

In the long term, the Detroit model may make sense. Even if newspapers are able to get online revenues up to the current level of print revenues, print won't necessarily be dead. There's a reason thousands of people subscribe only to the Sunday paper. They like to sit outside and read the features. They like to clip coupons and flip through the circulars. They like to give their kids the comic page, while they read about the football games they didn't catch on TV yesterday. This is not likely to change. Perhaps there is room for dead trees in our digital future; perhaps Detroit is ahead of the curve, if only in this regard.

Detroit's big gamble

So can you make a business out of selling newspapers if you reduce home delivery to 2-3 days per week? The Detroit Free Press and Detroit News are going to find out. In March the Free Press will start delivering only on Thursdays, Fridays, and Sundays. The News will deliver on Thursdays and Fridays. On all days, however, a smaller one-section paper will be available on newsstands, and a digital edition will be offered free to subscribers.

I'm sure there are number-crunchers at these two papers who think this will save money. It will allow a 9% reduction in staff; all of the cuts, it's implied, will be from the production side. This is good news for the newsroom... for now.

In the longer-term, however, is it a good idea to cut back on distribution of the product that accounts for ~90% of your revenue (circulation and advertising)? Is it a good idea to essentially punish your loyal subscriber base. At least one well-informed blogger thinks not.

As big of a change as this is, it's really just a half-assed attempt to move towards an online-only model. The problem is, you still have an enormously expensive printing operation, and the web site isn't making enough money to pay for much of anything.

There's some emphasis on the digital facsimiles of the daily paper that will be distributed on days when home delivery is not available. Unfortunately, this will not catch on with consumers... not now, not ever. We already have an online distribution model that consumers like: newspaper web sites. So, the answer to this puzzle remains: figure out how to make money on the web.

We need bold action to save newspapers, but this isn't it.

Baltimore Sun unveils breaking news site

Today the Baltimore Sun unveiled a blog-style breaking news web site, baltimorebreakingnews.com. Clearly, this site is still being developed. So far, it seems to just consist of excerpts from reporter stories posted throughout the day. Assumedly this will eventually change. Readers are not clamouring for normal newspaper stories to be presented in the form of a long chronological list.

A better use for this site would be to publish blurbs that you wouldn't normally find in a newspapers. People would love to know, say, if anybody was hurt in that three-car accident they passed, or if there was a water main break near their kid's school, and so forth.

It could also be used to provide updates on a big, breaking story as they come in. I imagine that is a use the Sun folks had in mind.

Tribune files for bankrupcy

Tribune Company filed for Chapter 11 bankruptcy today. The Chicago Tribune ran the story about its own potential demise on page one. Of course, this is just a restructuring. Tribune took on a huge debt load when it was brought private as an employee-owned company by Sam Zell. Chapter 11 will enable the company to restructure its debts, which may give the company a fighting chance to survive this recession.

Would this bankruptcy have happened if we weren't in a recession? In an internal memo to employees, Zell called the current financial conditions a "perfect storm." Of course, print circulation would almost certainly be falling, as it is now, recession or not. Newspapers derive most of their revenue from the old-fashioned print product. It doesn't help that big advertisers like General Motors are now on the verge of bankruptcy themselves, but a big reason Tribune is in trouble is because it's having a hard time selling the Chicago Cubs baseball team while the credit markets are frozen. Zell was counting on a big sale to keep Tribune afloat as he and his team tried to right ship.

In the long term, there's little evidence that Tribune has a solid plan for monetizing internet traffic to such a degree that would match print revenue declines. Tribune internet properties have seen big jumps in traffic, but the web is still only producing a fraction of newspaper revenues. This is the big disconnect.

In the coming days and weeks, we'll see whether Zell will be able to eek out a sale of the Cubs, whether Tribune will have to go through with another round of painful layoffs, and whether other big, debt-ridden newspaper conglomerates will follow suit.

In the meantime, here's Zell's email to employees, in all its melancholy glory:

From: Talk to Sam
Sent: Dec 8, 2008 1:52 PM
Subject: Today's Announcement

Partners,

We just announced that Tribune is restructuring its debt under Chapter 11 protection. I’m sure you saw the speculative coverage last night and this morning. I would have preferred everyone get the news from me first, but since our debt is publicly traded, we had to keep this decision
confidential until we had a formal board decision. The Cubs franchise is not part of the filing.

Most importantly, I want to stress that we will continue to operate our business as usual. That includes meeting payroll and covering benefits (such as healthcare, disability and others), and paying vendors for all goods and services they provide to us going forward.

As is routine with Chapter 11 filings, we have filed “First-Day Motions” to get court approval on
these and many other programs that are essential to continuing our businesses without disruption. We expect to get approval on these motions within the next few days.

You are also most likely wondering about the other aspects of your compensation. The 401(k) is unaffected by the filing, and in general, the existing benefits in the pension and cash balance plans are also unaffected by the filing. The ESOP is part of the ownership structure, so its value and role long-term will be determined in the restructuring. We believe the structure is a
valuable asset to the company and that there are strong reasons to preserve it.

So, how did we get here? It has been, to say the least, the perfect storm. A precipitous decline in revenue and a tough economy have coupled with a credit crisis, making it extremely difficult to support our debt. All of our major advertising categories have been dramatically impacted.

By restructuring our debt, we will reduce the pressure on the company’s operating businesses, enabling us to pursue our vision of creating a sustainable, cutting-edge media company that is valued by our readers, viewers, and advertisers, and that plays a vital role in the communities we serve.

This filing should not impact the way you do your jobs on a day-to-day basis. We will
continue to operate responsibly in a challenging environment – aggressively managing costs and maximizing revenue opportunities. These are all things we would do whether or not we were restructuring our debt.

Our challenges are consistent with those facing all media companies, and an increasing number of companies across a variety of industries today. The reality is that we – along with the rest of the country – have very little visibility on where the economy is headed and how our businesses will perform given the recession.

The good news is that we have great brands, and we produce great products every day. It’s
up to all of us to continue to focus on what it is we do best.

As your Chairman and CEO, I will continue to be actively engaged in the business and I
remain committed to the company, to you and to our lenders. Randy, Gerry and the rest of the management team are equally dedicated to moving this company forward.

I’m sure you have a lot of questions that this email doesn’t cover. I encourage you to visit TribLink where we’ve posted some anticipated Q&A, or call the toll-free number we’ve established – [redacted]. We’ll also have information posted on Tribune.com. But, recognize that there is quite a bit we don’t know – or that we cannot confirm – at this point.

I am proud of the work we have done at Tribune in the last year. I’ve seen strong determination to take hold of this company and put it on a new course. As a result, we’ve reduced costs, gained market share, and laid the groundwork for creating a new business model out of traditional media. This restructuring will give us the time we need to build that model, to secure sustainable and growing cash flow, and to achieve the success the talented partners in this company deserve.

Sam