TechCrunch has an interview with Marc Andreessen in which the Internet boy wonder advises media companies to “burn the boats,” an analogy to the instructions Cortés supposedly gave his army upon landing in Mexico nearly 500 years ago in order to insure that the soldiers pressed on.

Print newspapers and magazines will never get [to new online business models], he argues, until they burn the boats and shut down their print operations. Yes, there are still a lot of people and money in those boats—billions of dollars in revenue in some cases. “At risk is 80% of revenues and headcount,” Andreessen acknowledges, “but shift happens.”

Andreessen has a point that it makes senses to abandon failing models in the long term, but setting fire to profitable print operations is the wrong strategy at the moment. After years of fretting over declining circulation and trying desperately to rejuvenate a dying business, newspaper publishers are finally adopting an intelligent strategy. They’re milking all they can from their profitable business while trying to manage it down to a level that new models can take over. It won’t be easy.

The strategy that most publishers have recently adopted has three parts:

• Raise subscription rates in order to milk as much revenue as possible out of an aging but loyal reader base;
• Manage costs downward in a manner that preserves profitability without alienating traditional readers;
• Invest in growth markets that can preserve the brand and generate new profits.

The New York Times reported last year that its second-quarter subscription revenues nearly matched its advertising revenue. Aggressive price increases, combined with a substantial reduction in discounted circulation, are turning paying subscribers into a profit engine. Other publishers are adopting this approach, which is why the seemingly catastrophic declines in circulation of the last couple of years aren’t as devastating as they seem. Many businesses have legacy customers that generate a small but profitable business. Successful long-term franchises, however, also have the skills to move on.

A Successful Online Model

New media news entities have demonstrated that they can earn a profit with about 20% of the revenues of print organizations. That’s because their operating expenses are about 90% lower. These organizations are profitable, but a lot smaller than print publishers.

In their most recent round of earnings reports, most publishers stated that they are now deriving between 12% and 16% of their revenue from online advertising. Most of them have also not done nearly as much as they can to monetize other sources such as events, transaction fees and value-added and classified advertising. Once publishers reach the threshold of 20% online revenue, they can conceivably shutter their print operations while sustaining the business and the brand. They’re trying to get to that threshold gracefully, though. Lots of money can still be made in print if publishers can manage that asset down steadily while reducing costs in lockstep.

That’s a tricky process. If publishers cut costs too deeply, they risk losing loyal print subscribers and circulation revenue could enter a free-fall. They also don’t have the luxury of much time to complete the transition.

Even harder is the third bullet point. The people who run newspapers are skilled at operations and asset management, not visionary investments in emerging markets. In the TechCrunch interview, Andreessen correctly points out that technology companies are adept at dealing with constant disruption to their markets, a situation that faces Microsoft right now. Successful technology companies manage this challenge through a kind of creative destruction process. Successful executives are experts at learning to identify new opportunities and quickly discarding old product lines without looking back.

However, technology companies don’t have the luxury of a loyal legacy base that newspaper publishers have. The audience of committed daily readers may still buy the newspaper industry another 10 years of life in print, although that business will eventually become unsustainable. It isn’t crazy for publishers to want to milk the cash cow for a few more years. The hard part is finding new opportunities and having the stomach to invest in them in the face of inevitable shareholder demands for greater profits.

Burning the boats isn’t a wise strategy at the moment. But it’s a good idea to start collecting firewood.

---

Newspaper executives and their largest advertisers will gather next month in Orlando to discuss the transition to a digital media world. Advertisers in attendance include Staples Inc., Walgreens, Best Buy,  Home Depot, RadioShack, Target and many other print media veterans.

It’s good to see the industry tackling its challenges head on, but we have to wonder if this is the right crowd to do it. Nearly every person in the room will have a career and a business built on a crumbling advertising model. It seems unlikely that much innovation will flourish in that atmosphere. And if you believe what people like Mark Potts and Steve Outing are saying, then the future of these companies is about diversifying revenue and cultivating local advertisers, not finding new ways to squeeze more blood from the display advertising stone.. Meanwhile, the agenda is packed with speakers from the newspaper industry. We trust Huffington Post wasn’t invited.

---

Meanwhile, Outsell has a new report predicting that US companies will spend more on digital marketing than print for the first time ever this year. Of the $368 billion that Outsell expects US advertisers to spend this year, roughly $120 billion will be spent online and $111 in print. Of the total online spending, 53% will be on company websites. Outsell expects print newspaper ad spending to drop 8.2% to $27 billion. The report costs $1,295. More here.

And Finally…

The folks who brought you the wonderful Fail Blog have aggregated some of their best media miscues into Probably Bad News, a site whose tagline is “News Fails, because journalism isn’t dying fast enough.”You can upload your own favorite typos, double entendres and acts of sheer stupidity for others to vote upon. Many of the examples are computers gone haywire, which lack the sheer hilarity of printed mistakes, in our view. But there’s some good stuff there, anyway.

---

Dan Bloom has been pushing the idea of renaming newspapers “snailpapers.” He’s put the cause to music. It’s six-and-a-half-minutes of countrified banjo-picking. Watch it if you can.

We don’t get a lot of e-mail from Pulitzer Prize winners, so we were pleased and intrigued when David Cay Johnston sent a lengthy response to our recent comments on the shortcomings of American journalism schools. Johnston is a reporter’s reporter in the classic mold of “comforting the afflicted and afflicting the comfortable.”

In his career, Johnston has certainly done plenty of afflicting. Starting with a staff writer job at the San Jose Mercury in 1968, he progressed through reporting positions at the Detroit Free Press, Los Angeles Times, and Philadelphia Inquirer before landing at The New York Times, where he reported on economics and tax issues until his retirement in 2008. He was awarded the 2001 Pulitzer Prize for Beat Reporting “for his penetrating and enterprising reporting that exposed loopholes and inequities in the US tax code, which was instrumental in bringing about reforms,” according to his Wikipedia bio.  He was also a finalist for the prize in 2000 and 2003. Today, he writes, teachers and consults.

You can read much more about his accomplishments in the biography accompanying his book, Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and StickYou with the Bill). It’s one of three bestsellers he has authored, a list that also includes Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super-Rich–and Cheat Everybody Else and Temples of Chance: How America Inc. Bought Out Murder Inc. to Win Control of the Casino Business.

Although Johnston considers himself to be an optimist, he’s anything but cheerful about the state of American journalism and its culture of celebrity-mongering, lightweight lifestyle pieces and regurgitation of factoids spoon-fed to junior reporters by executives and government officials.

“Young journalists need to learn techniques for getting people to open up and especially to check, cross-check and re-cross-check facts; they need to learn how to mine documents which J schools do a lousy job of teaching; they need to become adept at numbers, which goes virtually untaught; they need to learn the underlying principles of whatever issue they cover,” he commented in his e-mail to us. “Use your independent judgment and you stop letting sources tell you what is news.”

This 24-minute audio interview covers the decline of investigative reporting, hopeful signs from early philanthropy-backed experiments and the passive culture of many American newsrooms that has contributed to a dumbing-down of content. “I’ve discouraged a lot of young people from going into journalism,” he told us. But he also noted that if you can make a living in the field, “It’s fun, there’s a lot of freedom and a cachet to it.”

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

Right-click and save to download.(24:43)

Melissa Massello is the 31-year-old “Stealfinder in Chief” at Shoestringmag.com, an online magazine for people who want to live a frugal but socially responsible and healthy life. She manages a loose federation of freelance contributors, many of whom barter their services, while writing more than 5,000 words each week and also handling the business affairs of the bootstrap operation.

With 140,000 monthly visitors, Shoestring is beginning to turn the corner toward profitability. Melissa’s background is in newspaper journalism, but she has successfully navigated the transition to the online world. The work is hard and the rewards modest, but she loves her job. She shares some advice for up-and-coming young journalists.

Following up on today’s earlier post about the changing job environment…

Yesterday I visited with a journalism class at a major university. This institution’s journalism program is considered one of the finest in the country and its faculty boasts notable veterans of the newspaper and broadcast field. I spoke to a small class for about 90 minutes, devoting the first hour of that time to a discourse on the state of the US media: Why it’s in a predicament, how the story is likely to play out and what it all means for aspiring journalists. The rest of the time was discussion.

My material wasn’t the type of stuff these students are used to hearing, judging by their reactions. About 2/3 of my talk was about economics and business. Among the topics I addressed were:

• How advertising efficiency is devastating the media economic models that are based on the inherent inefficiency of mass-market advertising;
• The irony that newspaper readership is at an all-time high even as the industry craters;
• How the efficiency of online publishing permits new media organizations to operate much more cheaply than their predecessors;
• Why the 57-year-old average daily newspaper reader is an undesirable target for advertisers;
• Why advertising costs will continue to go down and why this is a problem for traditional media;
• Why Craigslist has devastated newspapers’ most profitable revenue source;
• How the need to sustain high circulation levels has made newspaper editorial content bland, inoffensive and, ultimately, vulnerable to competition.

The students were aware that they’re stepping into an uncertain world but they didn’t seem to grasp the finer points of the media business. Looking at the journalism department’s website later, I could see why. The curriculum lists 29 courses in the journalism program, and not a single one is about the economics of publishing or how to sustain a career as a journalist.

This university is failing its students. I suspect that so are a lot of others.

Learning a Trade

Journalism schools are essentially trade schools. When I was going through a J-school program in the late 1970s, everything was focused on getting the students out into the working world with the skills and savvy needed to get to the top. Judging by my recent experiences with journalism schools, the same career path that was advised 30 years ago is still being recommended today. This begins with a low-paying job at a small daily and proceeds through a series of staff positions at increasingly larger publications. The Holy Grail is to land a job on the staff of The New York Times, which itself has laid off 200 journalists in the last year.

This career path isn’t going to work in the future. Newsroom staffing levels today are 55% of what they were eight years ago. While elimination of high-paying jobs has created some entry-level opportunities, the path for career journalists will increasingly be up and out into the freelance world where they will have to compete on speed, agility and business skills.

The business side of the equation is where the greatest disconnect occurs. Journalism schools mostly disdain the moneymaking side of the house. Students are taught that revenue is somebody else’s job; they are in the position of delivering information. In fact, the ad sales department is often portrayed as a den of evil, full of conniving capitalists who only want to bastardize the product journalists so lovingly nurture.

The failure of the economic model is the reason most news organizations are in such trouble today. Journalists are mostly unprepared to help. The church-state separation that is intrinsic to the culture of newsrooms prevents them from understanding why the business is in trouble. Most journalists I have met still show alarming ignorance of the business that pays their salaries.

I’ve written before about the need for young journalists to develop entrepreneurial skills. This doesn’t necessarily mean going door-to-door selling ads, but it does mean understanding how advertising works, how audiences can be monetized and how diversified revenue streams can build a sustainable income. These topics are distasteful to veteran journalists, who have never had to worry about such things. Unfortunately, they’re very relevant to the students they teach.

Journalism schools need to become small business foundries if they are to continue in their mission of preparing students for the real world. Unfortunately, most of them change slowly, and the rapid decline of media institutions has caught them flat-footed. They need to move quickly to adjust their curricula in order to avoid sending their students unprepared into the tumultuous job market that awaits them.

Alan Mutter is stirring things up again with a spreadsheet that journalists can use to value their work. His thinking: Stop debasing yourself by working for peanuts. Figure out what your time is worth and charge accordingly.

With his characteristic eye for detail, Mutter figures such factors as the self-employment tax and capital expenses in his calculations. The sample shows a fictional reporter charging about 55 cents a word to cover his/her fully loaded costs figuring an average pay rate of about $30/hour, which is union scale in Pittsburgh. Your mileage may vary, of course.

If journalists “don’t put a value on what they do, then no one else will, either,” Mutter declares, noting that media organizations are using the explosion of blogs and citizen media operations to “pick off writers, photographers and videographers on the cheap.”

We have enormous respect for Alan Mutter, but we find ourselves in complete disagreement on this one. In our view, journalists who draw lines in the sand and start charging only what they think they’re worth will find themselves practicing a lot less journalism.

Are media organizations taking advantage of plummeting freelance rates? You betcha. Is what they’re doing wrong? We don’t think so. Supply and demand is the underpinning of a capitalist economy, and if the rules have changed in a way that devalues quality journalism, well, those are the cards we’re dealt. It sucks, but it’s how the system works.

Journalists can try to charge what they think they’re worth, but they’ll ultimately live or die by what the market is willing to pay. With the arrival of Web 2.0-style publishing, millions of people have started playing at journalism and it turns out some aren’t half bad at it. The trouble is that many of these casual journalists don’t make a living as reporters. Their journalism is a sidelight to their day jobs. They may be happy to work for a vague reward defined as “exposure” if it pays off in speaking jobs, consulting work or book contracts.

Mutter is outraged that people contact him asking “to commission an article or reprint a post in exchange for the ephemeral compensation known as ‘exposure,’” but the reality of the market is that a lot of people are willing to work for that (full disclosure: we recently approached Mutter about contributing to a for-profit website in exchange for a modest fee; he politely declined). For example, many book authors write extensively about their expertise for free in exchange for exposure in major publications.

We sympathize with journalists who have seen the market value of their work collapse over the last couple of years. We’ve experienced some of that pain personally and we have many friends and colleagues who are suffering because of it. However, the market has spoken, and the solution to collapsing fees isn’t to insist on getting a rate that employers will no longer pay.

Is there a solution? Well, journalists who specialize in everything from geography to gastroenterology can still command higher prices than general assignment reporters. Also, a lot of journalists work for commercial clients on the side so that they can afford to practice their craft. There’s money in speaking, consulting, writing books and corporate ghost-writing. Some of that work may be distasteful, but at least it pays the bills.

That doesn’t solve the problem of who is going to embed in Iraq for six months at 25 cents a word. That’s a much tougher issue and we wish we had better ideas how to solve it. But drawing lines in the sand is career suicide.

---

Indianapolis-based freelance journalist Christopher Lloyd sees things our way. He’s passionate about movies and has contributed free movie reviews to some area newspapers since being laid off by the Indianapolis Star. “I knew I wasn’t going to drop my passion for film criticism. If I was going to do it, I might as well have it published,” he writes. Plus, movie studios won’t pay attention to a journalist whose work isn’t being read by anyone. He’s still plugging away and some of his clients are now paying a modest fee. He’s also got a site for film buffs called The Film Yap, where contributors work for, you guessed it…

---

Speaking of careers, a university professor has analyzed six months worth of recent job postings and discovered that traditional and non-traditional news outlets differ in their criteria for hiring journalists. Dr. Serena Carpenter, an assistant professor in the Walter Cronkite School of Journalism and Mass Communication at Arizona State University, looked at 664 online media job postings and concluded that established media organizations such as newspapers tended to favor candidates with solid writing and reporting skills while new media operations looked favorably on what she calls “adaptive expertise.” That includes broad-based experience and creative thinking.

---

Seth Lewis, a former Miami Herald editor and Ph.D student at the University of Texas, has joined the Nieman Journalism Lab as a contributor (paid?) specializing in journalism education and he’d like to know your ideas for what J-schools should teach. Perhaps stealing a line from the research noted above, Lewis is inclined to recommend a focus on adaptability. He defines that as the skills “to work in unpredictable settings, to generate their own funding as needed, and otherwise learn as they go.” In the process of interviewing for a faculty position at various academic institutions, Lewis says he was often asked what journalism schools should teach, which indicates that the profs at those schools are perplexed as well. Maybe you can provide him with some guidance.

Miscellany

Opponents of government subsidies for media organizations overlook an important detail: US media has been subsidized for 200 years, reports The New York Times. Citing a report released last week by the Annenberg School at the University of Southern California, the Times notes that government support of newspapers has actually been declining in recent years as mailing discounts have diminished laws requiring businesses to buy newspaper ads for certain kinds of legal notices have been dropped. In fact, the study’s authors estimate that annual government support has declined from more than $4 billion in 1970 to less than $2 billion today.

---

News organizations are starting to figure out how to monetize social networks. The Austin American-Statesman is charging for tweets and actually booking revenue. Local businesses can buy two tweets per day of up to 124 characters (to allow for retweets). The messages are labeled as ads and must prompt the reader to take action. Huffington Post is experimenting with the same idea. The New York Times is also selling packages of ads against visitors to its Facebook site. Nobody’s making much money at this yet, though.

---

Gannett executives demonstrated a rarely-seen attitude during this week’s earnings call: Optimism. “”We are very excited by what we are seeing,” said CEO Craig Dubow. Circulation is beginning to recover and profitability is returning to the income statement, enabling Gannett to pay down some of its debt. Profitability was still driven more by cost-cutting than by revenue growth, however. Classified revenues were down nearly 22% in the quarter and digital revenues fell 7.2% due largely to the dismal picture state of employment advertising. More coverage.

---

Newspaper readership continues at record levels when you factor in online traffic, according to the latest results from Nielsen Online and the Newspaper Association of America (NAA). More than 72 million people — about one quarter of all Internet users, according to the NAA — visited a newspaper site in the fourth quarter, racking up 3.2 billion monthly page views. The NAA declined to provide year-to-year comparisons, citing a change in Nielsen’s measurement technique.

Publishers who cheered The New York Times decision last week to build up a wall in front of its content should be considerably less cheery about the news emanating from Newsday. The Long Island daily has admitted that it has signed up just 35 paying subscribers since it put most of its content behind a pay wall in October. At $260 per subscriber per year, that amounts to just $9,000 in annualized revenue for a relaunch that reportedly cost $4 million.

There’s more to the story, of course. The total audience of potential online subscribers to Newsday is pretty small, given that the service is free to subscribers to Optimum Cable, which is owned by Cablevision. Cablevision bought Newsday for $650 million in May, 2008 after a bidding war. Newsday said Optimum Cable cover 75% of Long Island, meaning that just about everyone who would want to read Newsday online can already read it. The company also said  its goal was never to amass a huge audience but rather to increase engagement and improve advertiser value by focusing on local residents.

Still, you have to wonder about the wisdom of the paywall strategy, given the sacrifices  made to implement it. Editors Weblog says traffic to the site is down by a third since October. However, PaidContent.org says the drop off is only on the order of 10%. Either way, Newsday has traded off a lot of eyeballs for a small number of credit card numbers and unless its advertising rates have increased proportionately, the paywall is probably a net loser at this point.

Newsday is sticking by its guns and saying that the slow ramp up is neither surprising nor a problem. “Given the number of households in our market that have access to Newsday’s web site as a result of other subscriptions, it is no surprise that a relatively modest number have chosen the pay option,” the company said in a statement that called into question why such a strategy was desirable in the first place.

Give Newsday credit for being a pioneer, though. The industry has been buzzing about paywalls for the last year and the company at least had the cojones to do something.  You do have to wonder about the timing, though. Publisher Terry Jimenez reportedly told the staff last week that Newsday lost $7 million in the first three quarters of last year. It’s now embroiled in a labor dispute with unions that are refusing to accept a 10% pay cut. under the circumstances, this seems like an odd time to make a bet-the-business decision.

iPad is Here. You Can Breathe Again

Our reaction to Apple’s iPad announcement yesterday was summed up in our tweet: “It’s a big iPod Touch? Really? That’s it??”

For a product that was generating over 200 tweets per minute in the hours leading up to the launch event, the reality of the iPad underwhelmed us. Perhaps we’ve just learned to expect bigger things from Apple (although the iPad certainly is bigger than the iPhone – by several inches).

The commentators we read see more potential, however. Nicholas Carr, who’s been documenting the shift of data and applications from the desktop to the cloud, sees the iPad as a potential paradigm shift. In Carr’s view, this product completes the transformation of the end-user device from personal computer to window on the Internet. Unlike a laptop, the iPad relies upon software delivered over the Internet for most of its functionality. The large screen and persistent connection could change user behavior, he observes. People will get into the habit of expecting words, images and sound to be delivered whenever they need it in a slim device that fits in a briefcase, although not a purse.

Ken Doctor evaluates the pluses and minuses of yesterday’s announcement. The good news for publishers is that readers will finally carry around a device that delivers an experience similar to what they have traditionally received from a magazine or tabloid newspaper. That can’t be bad for publishers who are accustomed to working in that format. Doctor also sees the iPad as a “magnet for marketing dollars” from companies that can finally deliver a television-like experience to a handheld device. The tablet may also rejuvenate long-form reading, which has suffered as continually distracted readers have learned to consume information in sips rather than draughts.

Doctor worries, however, that media companies were not a bigger part of the launch. Apple seemed to play it safe, touting the iPad as a work machine but imbuing it with a clumsy virtual keyboard and incorporating features that will obviously be appealing to gamers. The company claims to have more than 140,000 applications in its iTunes store. Publishers who are accustomed to having the biggest brand in their markets are going to get lost in there unless Apple pulls them out of the muck and gives them some visibility. At least at this point, that isn’t happening.

David Coursey looks at the iPad from more of a technologist’s perspective with Six Reasons You Want an iPad, Six Reasons You Don’t. He notes, “Apple wants you to pay $829 for the 64GB device, plus monthly wireless fees for AT&T’s 3G. The first year total: $1,189.” Of course, the iPhone was also vastly overpriced when first announced.

Meanwhile, Amazon last week revised its royalty policy for self-published authors and small presses. Amazon could be ready to make a play for the loyalty of publishers who were shut out of the Apple party. Its licensing terms need to be friendlier, but it’s already showing a willingness to make those changes.

---

By the way, Ken Doctor’s new book, Newsonomics: Twelve New Trends That Will Shape the News You Get, will be available next week. We just received our review copy in the mail and while we haven’t had a chance to pore through it yet, we’re confident will contribute important new insights on the transformation of news from print to digital format.

Miscellany

Publishers that seemed to be ready for the toe tag at this time last year are staging some remarkable comebacks. Following hot on the heels of MediaNews Group Inc.’s announcement last week that it will enter a controlled bankruptcy and quickly reemerge in better condition, McClatchy said it has reached a debt restructuring deal with its creditors that will give it more time to get its debts under control. The owner of the Miami Herald, Sacramento Bee,  Kansas City Star and 27 other dailies has shifted its obligations to extend its repayment deadlines for a couple of years and says that 90% of its creditors have agreed to the plan. Year-over-year revenue is still falling at an alarming rate of 20%, but McClatchy said the rate of decline has slowed and it is getting its expenses under control. Its stock closed at $5.60 yesterday, up 1,600% from its 2009 low of 35 cents. Don’t you wish you could turn back the clock?

---

The good news in McClatchy’s shrinking revenue is that the percentage coming from online sources has grown. CEO Gary Pruitt told an investor conference call yesterday that online advertising now makes up 16% of the company’s total revenues. Perhaps more importantly, Pruitt said that 44% of digital revenue is online-only, meaning that the company is having success seeking out new advertisers and not simply selling discounted Web packages to print customers. He also said the company is ready to experiment with a pay wall, but is looking to the New York Times example for guidance.

---

Young people are reading newspapers online less than they used to. That’s the finding of an IBM survey of 3,327 people internationally (900 of them in the United States) as reported on Poynter last week. The good news is that people over 55 are increasing their consumption of online news, but that statistic disguises a more ominous trend. Overall consumption of online sources is up for the population as a whole, which presumably means fewer people are getting their news in print. Poynter’s Dorian Benkoil says the trend suggests that news organizations may have less time than they think to shift their strategies to a digital-first approach. separately, new research from Nielsen shows that consumers spent an average of five hours and 35 minutes on social networking sites in December, 2009, an increase of 82% from December 2008. Facebook is now second only to the telephone in the medium people use most often to reach out to friends and family, and it isn’t behind by much. The problem that creates for news organizations is that they can’t control what happens on Facebook but clearly must adopt strategies to deliver more information that way.

The New York Times is building a paywall despite the 2005-2007 disaster that was TimesSelect. On Wednesday, the Times announced the decision to start charging for access beyond a specified number of articles beginning in 2011. Details, including the fee and the access threshold, weren’t revealed. The Times is leaving itself plenty of leeway to modify or even call off the program, knowing that the eyes of a $35 billion industry are upon it. “We can’t get this halfway right or three-quarters of the way right. We have to get this really, really right,” said Times Co. publisher Arthur Sulzberger, Jr.

The Times is stepping with characteristic caution into territory that its own coverage acknowledged has both “tempted and terrified” publishers. The most well-read newspaper in America is under pressure to set a precedent that others can follow while at the same time preserving its dominance and an online revenue stream that is a growing part of its business.

A Q&A on the Times‘ website sounds almost apologetic in tone. It points out that readers will continue to have full access to Times content from search engines but will not be able to click through to other stories on the website without paying a fee. Readers will be entitled to access a certain number of articles each month at no charge, but the limit was not specified. The decision to announce the paywall a year before implementation gives the Times some breathing room to assess reaction and set thresholds that readers can live with. The article in the Times notes that most readers still arrive at NYTimes.com via search engine, meaning that their experience will be undisturbed. The piece also notes that reader reaction on the Times’ website has been modestly favorable toward the move.

Even if the Times‘ paywall experience is successful, there’s no guarantee that other newspapers will be able to duplicate it. The newspaper enjoys a cachet that few other titles can duplicate and it’s likely that some readers will support the initiative in the name of keeping the hallowed title afloat. The same can probably not be said for the Chicago Tribune.

The New York Post reports that New York Times Co. minority owner Carlos Slim is a big fan of paid content and has been  pushing Times Co. executives behind the scenes to take the plunge. TimesSelect was an early stab at paid content that floundered when columnists complained that their visibility plummeted when a price was put on their work.

The problem with paywalls is that they cannibalize Web traffic that could otherwise be monetized with advertising. ClickZ reports that Forrester Research analyst James McQuivey predicts that ad revenues for NYTimes.com will drop by up to 50% after the paywall is erected. It also notes that Newsday saw website traffic drop 21% in the month after it built a limited paywall last fall. The trick is to find the right balance and The New York Times, with its history of online innovation, is the best candidate to reach a happy medium.

---

The Times is diversifying its revenue through a novel partnership with four institutions of higher learning that deliver Times expertise as online courses. This spring, the Times will start awarding certificates to paying students. For example, Ball State University just launched a six-week course on video storytelling that bestows certificates in “emerging media journalism” co-validated by the Times and Ball State. We love this idea. While tuition will never be a major revenue stream for the old Gray Lady, it is at least a diversification out of the declining advertising business. And with more citizens wanting to learn the craft of storytelling, perhaps a course with Times reporters and editors is something they’d be willing to pay for.

Internet Out of the Courtroom

Print journalists can take some heart – while new-media advocates roll their eyes – at two court decisions last week that limit the dissemination of trial coverage over the Internet. First, the U.S. Supreme Court overrode a trial judge’s decision and blocked video coverage of a federal trial about the constitutionality of California’s law banning gay marriage. Then a Florida judge ruled later in the week that a Florida Times-Union reporter couldn’t live blog a capital murder trial.

The California case is important because it involves a highly polarized issue that has implications in other states. A 5-4 conservative majority ruled that the judge in the case had erred by initially allowing video of the trial to be streamed to other courtrooms even though that practice is usually denied in federal cases. However, the justices did not address the bigger constitutional question of whether live video is permissible in legal proceedings.

In the Florida case, the judge banned a reporter from live blogging because he said the noise was distracting. A second reporter who was texting notes from the courtroom on a cell phone was also told to cut it out. However, a third reporter who was writing notes on paper was not disciplined. The tweeting journalist had drawn a more than 1,300 followers on Twitter for her coverage of the trial.

The cases illustrate the discomfort that new media is creating in the trial courts. The capability of anyone to relate the events of a trial would seem to comply with the founding fathers’ desire for legal transparency, but the fact that those narratives can now be communicated worldwide makes some jurists nervous. Both of these issues are likely to need a Supreme Court resolution.

Miscellany

When Nielsen orphaned Editor & Publisher in a sale of several of its titles to e5 Global Media last month, the staff at the venerable newspaper industry trade publication held out for a rescue. It came. Duncan McIntosh Co., an Irvine, Calif.-based publisher of trade magazines that ironically include FishRap News (which has nothing to do with newspapers), has picked up E&P and will continue more or less uninterrupted publication. “We’re all very excited around here about the news,” said staffer Mark Fitzgerald, who gains a promotion to editor in the process. Monthly print publication will resume next month and entries on the magazine’s two blogs – Fitz & Jen Give You the Business and the E&P Pub – have already resumed. Hooray.

---

The parent company of MediaNews Group, Inc. will file for bankruptcy, the 13^th such filing by a U.S. newspaper publisher in the last 13 months. But it doesn’t look like MediaNews plans to stay in Chapter 11 for long. It has a debt restructuring plan in place that will cut its debt from about $930 million to $165 million and swap senior debtors’ paper for stock. The 116 creditors will have a majority of stock but not voting control. The Hearst Corp. and the family of MediaNews co-founder Richard Scudder are reportedly giving up interests in the company. Hearst took a $300 million stake in MediaNews in 2006 and that investment is now effectively worthless.  MediaNews said newspaper operations, employees and suppliers wouldn’t be affected and that the debt restructuring plan would enable the company to quickly emerge in better financial condition.

---

Dan Bloom has come up with a new word for newspapers. He calls them “snailpapers.” Only the longtime newspaperman insists this is a term of endearment, not derision. He thinks maybe if newspapers poked more fun at themselves instead of getting all righteously indignant about new media, they would generate more sympathy. More on his blog.

---

The Greenwood Lake (N.Y.) News is shutting down after 46 years, idling a small staff. The weekly had been honored for  editorial quality by the New York Press Association.

Dramatic Effect

We get some unusual requests at the Death Watch and always try to be helpful, but we were stumped by this inquiry from Amy Wimmer Schwarb, a 15-year journalism veteran:

“What’s more old-school than the print-on-paper newspaper we both love?” she writes. “The theater, of course. I’ve been working on and off for the past 18 months on a script that I’m about to start submitting to play competitions around the country. The title is ‘Dash Thirty Dash: An Allegory for the End Times.’ The piece celebrates the fun and beauty of the business and documents the suicide of newspapers.

“My concern about submitting this play through traditional channels is that I want it to be seen NOW, and sometimes, such channels have long lag times. Through your online travels and contacts, do you have any suggestions for how I might distribute this work? In my dreams, it will be performed in small independent theaters around the country.”

We couldn’t help, but perhaps you can. Post any ideas below as comments, or e-mail us using the contact box on the right and we’ll put you in touch with Amy directly.

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.