Moody’s Investors Service has joined the Greek chorus of financial watchdogs predicting more bad news for the newspaper industry. Analysts expect newspaper advertising revenue to drop 7% to 9% in 2008 and maybe slightly less in 2009, but only if the economy recovers next year. If it doesn’t, look out.

Most troubling is the decline in cash flow, defined as earnings before interest, taxes, depreciation and amortization (EBITDA). Over the past 10 years, EBITDA has fallen from 28% to 19% as a percentage of revenue, Moody’s said. Cost cuts aren’t keeping up with revenue declines, which is eroding EBITDA by more than 10% a year. That erosion comes at a terrible time because so many publishers are heavily leveraged with debt. Less cash means less money to pay creditors. Moody’s thinks deeper cuts will be needed in editorial operations, but “It will prove challenging to continually reduce editorial costs without impairing the core news product or employee morale.”

As if to accent the Moody’s forecast, E.W. Scripps Co. said newspaper revenues will fall 8% to 10% in the second half of 2008. The company is in the process of splitting itself in two.

Optimists See Growth, But Much of it is Free

The head of the World Association of Newspapers says reports of the industry’s demise are greatly exaggerated. Speaking to the World Editors Forum meeting in Göteborg, Sweden, CEO Timothy Balding cites statistics showing growth in Asia and South America that is outstripping declines in the US and Europe. Overall newspaper circulation is up over 3% internationally. A lot of that growth is coming from the expanding free-daily industry, however. Free papers now make up 23% of circulation in the EU and 8% in the US.

Wired magazine editor Chris Anderson comments on this trend, noting that it is another indication that information is becoming free. While any growth is good, the loss of paid subscribers presents big challenges to the economics of the newspaper industry, which are predicated on circulation lists.

Free isn’t necessarily good business in the US, though. The CEO of Metro International SA tells Bloomberg that it’s examining its options in the North American and European markets while looking to expand into 30 new markets. The world’s leading publisher of free dailies has struggled to reach profitability, although its market penetration has grown rapidly. Per Mikael Jensen says emerging economies look to have more promise at the moment.

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A study conducted by advocacy group Newspaper Works shows that Australian readers hold newspapers in high esteem. The survey of 1,010 people found that 90% of readers do nothing else when reading a newspaper as compared to the half who busy themselves with other things while the TV is on. Most perceive newspapers as “absorbing, dynamic and reputable,” and the online extensions only add to that credibility. (Via Editors Weblog).

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Finally, the editor-in-chief of the Los Angeles Times tells Media Bistro that print isn’t going away in his lifetime. That said, Russ Stanton is honest about the challenges, noting that the substantial infrastructure cost of print is a liability. “Someone, somewhere is going to grow the revenue from online enough that it can support a newsroom of our size and talent. And when that happens, that’s when you can start, if you so choose, to pull the plug on the paper,” he says. He adds that citizen journalism is pretty intriguing.

Turnover Continues At the Top

Rupert Murdoch continues to put his own team into place at The Wall Street Journal. Deputy Managing Editor Bill Grueskin is the latest to go, leaving the paper for a post in the ivy-covered halls of academia. Grueskin’s departure comes just two months after Managing Editor Marcus Brauchli was unceremoniously shown the door.

Los Angeles Times Editorial Pages Editor James Newton will leave the paper to finish writing a book about Dwight Eisenhower. He had been in the job only 14 months. Newton’s memo to staffers made it clear that he wasn’t motivated by some pressing inner urge to tell the Eisenhower story. “[T]he paper still has challenges ahead. The publisher and I have discussed those difficulties, and he is entitled to an editorial page editor who shares his vision on how best to confront them,” he wrote. LA Observed has Newton’s farewell memo, as well as the obligatory bouquets of gratitude from Publisher David Hiller.

Thoughts on the New Journalism

Jeff Jarvis eloquently expresses an important point about the future of journalism in this essay on the ethics and culture of linking. The link is the currency of the blogosphere, of course, and the emerging culture of journalism is embedding links into news reporting process. In the old days, Jarvis notes, reporters would rather repeat all the legwork done by a competitor than acknowledge being beaten on a story. This led to tremendous duplication of effort. In the new model, though, journalists are learning to link to useful information and build upon it, creating a new and richer style of journalism.

Jarvis cites the experiment being conducted by a group of Ohio papers that are sharing stories between each other rather than processing them through the Associated Press. This means less rewriting, faster delivery and more genuine content. Says Jarvis: “[T]hey’re doing what they do best and linking to the rest and they are linking to original journalism: the new architecture at work.”

Meanwhile, the CEO of acquisitive MediaNews Group urges newspaper executives to “discard our arrogance.” Speaking to the World Newspaper Congress in Sweden William Dean Singleton says, “We’re going to have to quit writing and editing for each other and write and edit for that consumer out there.” He says half the chain’s profits will come from online sources by 2012. Singleton continues recent criticism by industry CEOs of the way newspaper journalism is done. News Corp. CEO Rupert Murdoch recently said The Wall Street Journal has too much management overhead and Tribune Co. CEO Sam Zell has also insulted his editors.

Layoff Log

 

• The Portland Press-Herald and MaineToday.com will cut up to 35 positions on top of the 27 jobs that were eliminated in March.
• Newsday has reportedly laid off 32 employees — half in operations management and half from Star Community Publishing. This follows a 120-person reduction in March. Publisher Timothy Knight said the move would “reduce management layers in operations, clarify roles and responsibilities, and speed decision-making.” The paper is awaiting transfer of ownership from Tribune Co. to Cablevision Systems Corp.

And Finally…

Simon Owns interviews journalist and Editor & Publisher columnist Steve Outing about a new venture he’s working on called Reinventing Classifieds. It’s a blog in which prominent publishing professionals contribute their insights on classified advertising and how the newspaper industry can recapture that business. At first glance, the content looks a little like Newspaper Death Watch – lots of bad news. But there hasn’t been much good news to report in the classified industry of late. There’s lots of up-to-date news and even a piece by design guru Roger Black. The site is tied to a project led by Future of News developer Christopher Ryan that’s attempting to build a distribute ad placement platform that newspapers could use to get a leg up on Craigslist.

The 15th World Editors Forum is going on in Göteborg, Sweden, and Editors Weblog is providing exhaustive coverage. A lot of the talk has been about the new, integrated newsroom and the reinvention of journalism. Here are some highlights.

• Two researchers discuss a study analyzing the five stages of news production and how journalism organizations are involving readers in each. Not surprisingly, most news outlets still don’t ask readers for much input until after the story is published, although a few are experimenting with early intervention. News editors still see their gatekeeper role as vital, the researchers say.
• Sweden’s Östersund Posten has launched a hyperlocal experiment involving 101 unpaid bloggers to write about community issues. Traffic is up 60% and so is advertiser interest, although no financial figures are cited.
• The CEO of Denmark’s Det Berlingske Officin, and editor-in-chief of Berlingske Tidende says journalists must give up their gatekeeper role and adapt to a new style of reporting that stresses reader participation and links. “The reader has broken the old circle of power,” says Lisbeth Knudsen.
• The managing editor of The Wall Street Journal’s wsj.com tells how an integrated approach to news reporting has helped double online traffic in the last year. Almar Latour says journalists are now encouraged to incorporate video, photos and informational graphics into their work. It hasn’t been easy to convince writers to put down the pen and pick up the camera, though. One tactic that’s helped has been the Most Popular List, a constantly updated report on the stories that are getting the most traffic. The list has generated healthy competition between reporters.
• The assistant managing editor of the UK’s Daily Telegraph tells how one-week training programs intended to help the newsroom adapt to multimedia have improved camaraderie and morale
• The editor-in-chief of Germany’s Tide sings the praises of citizen journalism as a cost-effective way to develop content, but warns that citizen “reporters” need to be trained that quality is as raw content. The paper has trained almost 200 ordinary folks, who now contribute an hour-and-a-half of video a day to the site, says Werner Eggert.
• The editor-in-chief of the national Danish newspaper Kristeligt Dagblad tells how adding weekend editions and offering defecting readers the chance to switch to a smaller weekend-only package has doubled circulation. Erik Bjerager says the new editions are less newsy and more focused on Christian values.
• The Innovations International Media Consulting Group presents its annual survey and calls upon newspapers to be more innovative. It singles out several papers for praise, including The Spokesman Review of Spokane, WA, which has invited anyone in the community to attend its daily news meeting.
• The managing editor of India’s Mint business newspaper tells how his publication survived in a highly competitive market by making journalistic ethics a differentiator.
• The founder and editor-in-chief of Rue89.com tells of journalism without print and says that life is good. The French website combines professional journalism with blogger and reader input to create rich content at low cost. Many of the best stories have come from reader comments, says Pierre Haski.
• Svetlana Khoroshev, whose role at Russian business newspaper Delovoy Peterburg isn’t identified, says the print publication has managed to connect with the famously print-averse youth audience by incorporating content from a popular MySpace-like community and spreading word-of-mouth through entrepreneurs.
• The head of development at Norway’s VG Multimedia tells how the popular vg.no news website for adults was able to extend its appeal to the youth audience by launching a social network. Jo Christian Oterhals says Nettby.no now has 61% of the teen market, although the model hasn’t necessarily transplanted well to other countries.

Let’s look at some recent stories about publishers who are reinventing traditional news operations and creating innovative new models. This is inspiring stuff.

The San Francisco Chronicle reports on how startup 8020 Publishing is producing two beautiful magazines consisting almost entirely of reader-contributed content. Everywhere is a travel magazine and JPG is for photo enthusiasts. People vote on the work that others submit and the best stuff goes into print. Photographers get a check for $100 and a year’s subscription. Big money apparently isn’t needed: the contents of the April/May issue of JPG was culled from photos uploaded by 16,278 submitters.

What’s especially remarkable about the model is its efficiency. The two magazines are produced by a staff of just 19 people. Both titles are expected to be profitable within a year and the company is looking to expand into other markets. “Any human interest can become a magazine,” says Halsey Minor, the CNet founder whose VC firm owns 8020.

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The Hartford Courant has set up an online gathering place for citizens and is reverse-publishing in print. iTOWNS invites readers to submit news briefs, events, photos and videos to a website, with guidance from a local staff member. Every Sunday, selected content is published in six regional print editions. All the content comes from the community. “We reached over 3/4 of our ad goal before the first print edition was published. Amazingly we did all of this without a single new hire,” the Courant’s designer tells Charles Apple.

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The UK’s Press Gazette reports on ambitious plans at Guardian News & Media to overhaul its editorial operations. The company is merging the news staffs of The Guardian, The Observer and Guardian.co.uk in a platform-agnostic structure in which journalists working in specialty “pods” and feed stories to the appropriate department editors for publication in a variety of media. One radical concept: journalists will have the freedom to publish directly to their audiences on timely stories, without the intercession of an editor. Editor-in-chief Alan Rusbridger says, “In the newspaper world, if a bomb goes off in Burma or there’s a flood in the Philippines, suddenly your story is taken down to two paragraphs. In this world the reporter isn’t going to have to hop around on foot to speak to [national news editor] Nick Hopkins – he can just publish it.”

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Writing on Publishing 2.0, Scott Karp praises a New York Times blogger for practicing good link journalism. The online story he cites is one on oil prices in Mike Nizza’s The Lede. Nizza effectively consolidates information from more than a dozen sources into a summary piece and then links to the source material like crazy. “The value for the reader here is enormous — not only do they get Times blogger Mike Nizza’s framing and perspective, they get links to all of this original reporting and analysis on this issue,” Karp writes. The link journalism model is an emerging form of reporting that makes the journalist as much filter as a reporter. As newspapers can get over their not-invented-here syndromes, they’ll come to understand the reader value this provides.

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The Society of Professional Journalists has embraced citizen media. The venerable organization recently launched three regional seminars to teach anyone who’s interested how to report the news. “There are quite a few bloggers, particularly in larger cities, who do work on a par with any journalist,” SPJ President Clint Brewer told Steve Johnson of the Chicago Tribune. Attendance at the $25-a-day sessions was underwhelming, Johnson reports, but the motivations of the attendees were an interesting mix of civic pride, activism and curiosity.

And Then There’s Also Denial, Distrust and Sneakiness

• USA Today publisher Al Neuharth whistles past the graveyard, trumpeting miniscule circulation gains by his paper and The Wall Street Journal as evidence of the health of the industry. “That’s why newspaper-oriented media companies have a bright future,” he says. For another take on the same circ figures, see our post from that day. Gannett closed yesterday at $29.25, nearly 70% off its five-year high. (via Editors Weblog)
• The UK’s Guardian asks ordinary citizens “How much do you trust the following [new organizations] to tell the truth?” and finds that faith in media has fallen sharply. Broadcast journalists from the country’s ITV commercial network have fallen the farthest, from 82% to 51% in five years. Trust in broadsheet papers is down 22% to 43%, and local outlets are trusted by just 18% of the population. Even the BBC is down. (via Editors Weblog)
• Meanwhile, Editor & Publisher reports on the Audit Bureau of Circulation’s decision to reclassify copies given away in exchange for advertising consideration as part of its new “verified” circulation class. The concern is that some publishers are using free or almost-free copies to plug holes in their circulation reports. The big newsweekly magazines are especially fond of this tactic.

And Finally…

Alan Mutter reports on a free-paper war breaking out in the most unlikely place: filthy-rich Palo Alto, CA. The new entrant is the Palo Alto Daily Post, launched by two founders of the Palo Alto Daily News, a freebie that they sold to Media News Group in 2005. Mutter notes that free newspapers tend to target urban commuters, which makes this leafy San Francisco bedroom community a strange place for a showdown of this kind. Palo Alto residents are more likely to be seen reading pecking at their BlackBerries while driving 70 mph than reading a newspaper, he says.

The owner of the Minneapolis Star Tribune is disputing a report in the New York Post that the paper is on the brink of bankruptcy. In a statement issued late Friday, Publisher and Chairman Chris Harte said the Star Tribune “currently has sufficient liquidity and is current on all its debt payment obligations.” However, he acknowledged that the company has hired a private equity firm to advise it on business options.

There’s no question things are grim at the “Strib.” The paper has cut 10% of its workforce over the last two years and was one of the leading losers in the ABC audit report published last week. In February, Harte told his people “Total revenue is down almost $75 million in the last two years… classified revenue was down over 50 percent from what it was at the start of the decade.”

A Star Tribune bankruptcy raises the likelihood that the paper’s creditors could end up owning it, and you know how committed banks are to quality journalism. The most likely scenario is massive expense cuts and a fire sale. The Star Tribune’s near-monopoly position does buy it some breathing room, but it’s hard to imagine there would be much hope of attracting new readers from such a crippled state. Ironically, as we noted two weeks ago, readers of the Star Tribune’s website spend almost as much time there as readers of The Wall Street Journal’s wsj.com.

Do J-Schools Hinder Progress?

Vin Crosbie writes a searing commentary on ClickZ about why journalism schools are part of the problem in the newspaper industry, rather than part of the solution. Having spent most of the last year on a sabbatical from consulting to teach journalism, Crosbie says he’s been astounded by the refusal of faculty at various academic institutions to change the ways in which they teach their craft in the face of seismic industry disruption (he’s careful not to point the finger at his own). “What I found were faculties resistant to change and students whose insights and mastery of new media were being eroded by the authoritative resistance to change of so many professors,” he writes.

He estimates that a quarter of J-school professors are actively blocking curriculum change and that they’re intimidating the 50% of the teachers who do want to move forward. Surprisingly, it’s the academics in their 30s and 40s who seem to be most in denial.

Union Agitation in the East Bay

It didn’t take long for union organizers to return to the East Bay. More than half the employees of a chain of newspapers in the region have signed cards demanding that they get union representation. They’ve filed their petition with the National Labor Relations Board, which will probably clear them for a vote.

The unit of MediaNews Group that runs the papers in the area probably thought it had scored an end run around the union nine months ago when it combined enough operations to dilute union membership below the 50% level required for recognition. Now employees of the combined operations have struck back. It’s hard to imagine what either side stands to gain. As a commenter on Los Angeles Times Pressmens 20-Year Club notes, “Gee, now they get to be laid off in order of seniority instead on who can do the job best.”

Your Daily Murdoch

As expected, Cablevision bid $650 for Newsday, which means Murdoch will have to match the ante. Speculation is that he’ll do just that and will eventually walk away with the prize, in part because his offer cuts Tribune Co. in for a tax-efficient minority stake and in part because he and Sam Zell are now good buddies.

Alan Mutter thinks Zell has a secret agenda in cozying up to Murdoch: he sees News Corp. as his exit strategy. Mutter sketches a scenario in which Tribune Co., on the brink of default, sells to News Corp., giving News Corp. cross-ownership of multiple print and TV properties in key cities. Murdoch and Zell then argue before the Federal Trade Commission that such consolidation is necessary for survival in the face of Internet competition. If the FTC modifies the rules, then News Corp. goes on a shopping spree. Intriguing idea.

And Finally

Editor & Publisher has a nice analysis of recent shakeups in D.C. newsrooms, including the ousters of the Associated Press bureau chief and a top national editor at The Washington Post. The common thread appears to be that these people were the victims of political struggles touched off by industry change.

The Economist summarizes the trials of the U.S. newspaper industry. It’s nothing you haven’t read here already, but it’s done in that crisp, efficient Economist style.

Blogging for Time, Justin Fox says newspapers will milk their current business until they die because they just can’t bring themselves to change their print-centric mentality. This statement is followed, curiously, by a discussion of his lunch.

Monday was all about the Audit Bureau of Circulation report, and the news was as hideous as expected. Rather than repeat the numbers, we’ll point you to Editor & Publisher’s overview story, the list of the largest 25 dailies, the largest 25 Sunday papers and the papers that actually grew circulation.

Big markets fared the worst. The Miami Herald, Atlanta Journal-Constitution and Dallas Morning News all reported sickening daily circulation declines of 8.5% or more. Some of the contraction is no doubt due to publishers’ efforts to rein in free and heavily discounted circulation, but the overall trend is clear: The top 10 metropolitan daily newspapers in the U.S. (note that this excludes the nationally cirulated USA Today and Wall Street Journal) collectively lost more than 235,000 daily readers. The Sunday numbers are even more staggering: more than 635,000 readers lost in the top 10 markets in just one year.

There were no clear patterns among the daily figures. On Sunday, it was a case of the bigger they were, the harder they fell. The five biggest markets averaged a 6.6% drop, while the 21^st through 25^th largest papers averaged a 4.2% decline. Patterns were harder to find in the daily numbers. There were a few bright spots: 12 dailies did manage to show gains. But their circulation averages about 100,000, while the 10 largest papers average north of 630,000. And they were all down.

Alan Mutter does a flash analysis and notes that daily circulation in the U.S. is at its lowest level since 1946. Considering that population has more than doubled since then, that adds up to a 50% decline in readership. Sadly, the demographic trends offer little relief. The post-war era was the beginning of a surge in population and in readership. But as we’ve noted repeatedly, today’s kids and young adults don’t read newspapers and aren’t likely to start. The readership pig in the newspaper python is the over-55 crowd, which isn’t desirable to advertisers and which won’t be much of a factor in 15 or 20 years.

Layoff log

The Orange County Register, whose 11.9% daily circulation decline was the largest among the top 25 dailies, will lay off 80 to 90 people, or about five percent of its workforce. This is the third round of layoffs in a year for Orange County Register Communications, which is the Register’s parent. That’s either a sign of poor management or a completely unpredictable market. The worst way to cut expenses is by dribs and drabs. It saps morale and spreads fear among the survivors.

The Raleigh News and Observer downplayed the news that it will offer buyouts to about a quarter of its staff. No more than 1% to 2% of the employees are expected to take the deal.

WSJ’s Mystery Man Demystified

The New York Times profiles Robert Thomson, the de factor editor of The Wall Street Journal in the wake of Marcus Brauchli’s abrupt resignation last week. The generous profile portrays Thomson as a talented journalist with loads of people skills. In previous assignments, his staff reportedly loved him. His reluctance to cut headcount would make him an unlikely choice to initiate mass layoffs at the Journal. He’s also got Rupert Murdoch’s ear.

One Reason Why the FT is Ascendant

Editors Weblog is running a series of interviews about the future of journalism, and the latest one is with Dan Bogler, Managing Editor of Robert Thomson’s old employer, the Financial Times. If you want to hear the perspective of an editor who gets it, read this interview. Bogler has no illusions about what’s happening to his industry. “We’ve gone from zero videos on our website to over 100 per month in the last 18 months. That’s part of the continuum: it’s us doing the same thing in different distribution channels,” he says.

Asked if the golden age of investigative reporting is over, he responds matter-of-factly, “The idea that journalists have to do long-term, deep, undercover investigations where they reveal something months later - I don’t think it works like that anymore…[J]ournalists working under cover, developing sources and breaking big scandals is less likely; but revealing news that people don’t want out there, on a short term basis, uncovering a scandal and having it come to light, that’s more likely.”

Bogler betrays no defensiveness, resentment or belligerence. He’s adapting to change. With editors like this at the helm, its no wonder the FT is coming on so strong in the U.S. market.

And Finally…

Is he a blogger? A journalist? A marketer? James Arndorfer is all three. His BrewBlog frequently breaks news or casts new light upon happenings in the beer industry. But Arndorfer is a full-time employee of Miller Brewing, which openly supports BrewBlog. Rival Anheuser-Busch is a favorite target for negative news or snarky analysis, but Arndorfer says he isn’t afraid to tweak the nose of his employer. It’s all very new media-ish. Read the WSJ profile.

How successfully are newspapers making the jump to the Web? It depends on whom you believe. A lot of research is trying to make sense out of people’s online reading habits as they relate to newspaper brands, and the numbers are inconclusive.

The monthly Audit Bureau of Circulation figures are due today, and the news is not expected to be good. Editor & Publisher got the drop on the figures and says that for the six months ending in March, daily circ was off 3.5% and Sunday was down 4.5%. The ABC has started tracking online readership for the first time, but it’s too soon to compare numbers. E&P did cite research by Scarborough Research that showed that combined print/online reach of major dailies is slowly declining.

“When comparing 20 papers, only two — The Atlanta Journal Constitution and The Oregonian in Portland — increased their integrated market reach year-over-year,” the story says. A Scarborough exec verifies, “Print [readership] is in a steady decline, and online readership is growing but the declines in print are not being offset by the increases in online readership.

The good news is that display advertising on newspaper websites is booming, according to a Media Post analysis. The bad news is that online classified advertising isn’t. That combination is leading to slowing growth in newspapers’ digital revenues.

But wait, there’s more good news. A Newspaper Association of America report, based on research commissioned by Google, finds that 30% of Internet-using newspaper readers went online to research a product they saw in a newspaper. It adds that 70% of those readers then made a purchase. The fact that the research was sponsored by Google will no doubt help make it appear more credible.

Notes

• Reports from several sources say The New York Times will announce its first-ever editorial layoffs this week after fewer people took the paper’s buyout offer than management had hoped. Speculation is that 30 people will lose their jobs. Expect massive news coverage of this relatively small workforce reduction, mainly for its symbolic importance.
• Speaking of the Times, the paper has a eulogy for the Capital Times, a Wisconsin afternoon institution that closed its print edition last week. The shutdown was announced in February. The Times piece has some interesting tidbits on the former popularity of afternoon dailies, which are declining faster than their morning counterparts. Afternoon papers have been hit particularly hard by online competition.
• PBS’s Idealab has “Ten Things Journalists Should Know About Surviving In a High-Tech Industry,” including “Jobs are temporary. Friends are forever” and “Nobody has the right qualifications.” This list is right on the money. Journalists considering the shift to online media organizations need to understand that the jobs aren’t lifetime guarantees. You’re on your own, but you can learn a tremendous amount and prosper more than you would as a Guild lifer .

We wish we could end the week on a happy note, but as we noted on Monday, it’s earnings season. Unfortunately, the news couldn’t be much worse. If troubles at the New York Times and Media General are any indication, the rest of the year could be ugly.

New York Times Co. Troubles Deepen

The New York Times Co. swung to a small loss in the first quarter from a $24 million profit a year ago. In a conference call, the CEO didn’t indicate that things were going to get better any time soon. The more worrisome trend may be that online growth is now slowing.

As a result, it looks like the Times newspaper will have to resort to some layoffs to achieve its goal of a 100-position reduction in workforce. Not enough people have taken the buyout offer. The deadline is next Tuesday and the layoffs, if they happen, will be the first in the paper’s 167-year history.
The media’s focus on the 100 job cuts at the Old Gray Lady may obscure the bigger view of the NYT Co. crisis. Media Post points out that the company has cut over 2,000 jobs – about 18% of the total staff – since 2003. The reason for the low response to the recent buyout offer is that the job market is so bleak for ex-journalists, the article suggests.

It offers this cheery quote from analyst Ken Doctor: “Clearly, the decline in revenues is deepening. At this point, there really is no bottom.” As layoffs continue, in future he predicts “a lot of newspapers hiring part-timers, stringers and bloggers–but no more full-time, $50,000-a-year jobs.”

Media General Hammered by Florida Exposure

The news was even worse at Media General, which is heavily dependent to the recession-laden Florida market. The quarterly loss of $20.3 million is more than three times last year’s loss. But check out the declines in these ad categories:

• Newspaper ad revenue off 19.1%
• Interactive media revenue down 3.3% (this is the future, remember)
• Classified ad revenue off 28%
• National ad revenue down 21%

It’s not surprising that Media General just offered buyouts to half the employees in its Florida Communications Group. The terms are generous, ranging up to 39 weeks of pay. Media General didn’t say how many jobs it hopes to eliminate with the offer, but it did say that layoffs are possible.

And the Bad News Spreads

More talk of layoffs, closings and cost reductions. Here’s the rundown:

• The Los Angeles Times Pressmens 20-Year Club has the scoop on Advance Publications’ plan to shut down one of its two production facilities. Advance Publications publishes the Newark Star-Ledger. The two plants employ more than 600 people, though it’s not clear how many jobs would be cut. A decision is expected within the next few weeks.
• Times are hard, indeed, in the New York-Philadelphia corridor. The AP reports that the owner of Philadelphia’s two largest daily newspapers told a judge last week that unraveling its pension mess could lead to more layoffs. One of the two pensions the company merged is underfunded and the costs of bringing it up to snuff were unanticipated. In January, Philadelphia Media Holdings LLC said it had to cut costs by 10% or its viability would be in doubt.
• The Toronto Star will cut 160 jobs, or a little less than 3% of its total workforce. The Canadian Journalism Project points out that this is disconcerting in light of the recent reports that the Canadian newspaper industry is faring much better than its U.S. counterpart.
• The Raleigh News & Observer just told its staff that layoffs may be needed to cope with the business downturn. The paper employs 206 editorial staff.
• The suburban Chicago Daily Herald laid off an unspecified number of employees throughout the company. Classified ad revenues are off as much as 45% year-over-year.
• And finally, further evidence that Sam Zell’s Tribune Co. empire may be unraveling. Revenues continue to fall faster than expected, and now Zell is talking about selling off “newspapers and other properties.” Could that mean that titles other than Newsday may go on the block? One recent report said the LA Times may be in play.

But wait, there’s even more: The source of many of the industry’s problems is doing just fine. Blogger Roy Greenslade notes that Craigslist.org has quietly expanded its global footprint by 120 cities, bringing the total to 570. Craigslist may be the single biggest financial competitor the newspaper industry has. Here is the devastatingly brief, haiku-like announcement from Craig Newmark.

Finally, Philip Stone comments on the empty halls at the once-great Nexpo newspaper equipment trade show. It used to be that Nexpo was so big that only a few convention centers in the country could accommodate it, he says. But at this year’s event, you could have rolled a bowling ball down the expo floor and not disturbed anyone.

Go bowling this weekend. We can use a break.

All News Must Stand On Its Own

Encyclopedia Britannica kicks off a “Newspapers & the Net Forum” with an excerpt from Nick Carr’s new book, The Big Switch: Rewiring the World, From Edison to Google.He states what publishers have known for some time: the shift from print to online delivery changes the product entirely. No longer can high-margin classified ads support expensive investigative reporting. In today’s world, every item of content is an island and must stand on its own merit. Advertisers want contextual adjacency. This creates pressure to publish stories about high-definition TVs instead of stories about Iraq.

Among the more than two dozen comments is one that notes “I have a copy of Newsweek with a cover story entitled, if I am recalling correctly, “Are Newspapers Dead?” The magazine is from around 1965. So this debate has been going on a long time.” True, but this is the first time those predictions really appear to be coming true.

The Forum goes on all week with some other provocative topics that I promise to get around to reading. Here’s the index page.

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Rethinking the Value of News

Tom Abate thinks newspaper publishers could learn a few things from the airline industry. In other words, figure out how to charge different prices for the same product. As he sees it, the background notes that a reporter collects, which would never be of interest to a mainstream newspaper audience, could be a gold mine to businesses that specialized in that area. Use a blog to publish those notes and attract those special-interest readers and then sell ads to businesses that will pay top dollar to reach those people.

Abate laments all the attention being paid to Fark.com, a snarky linklog with a juvenile sense of humor. Newspapers shouldn’t be trying to out-Fark Fark, he says (although, if you look at Fark, it sends a lot of traffic to newspaper websites), but should focus on attracting the highly engaged readers who appreciate depth and context. There’s sensible thinking behind his comments, although the airline industry isn’t exactly the gold standard of business models and the devil would be in the details.

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Abate would probably find a soul mate in Ted Gup, a journalism professor at Case Western. Writing in the Chronicle of Higher Education, he laments his students’ appalling ignorance of basic current events.

Quoting:”Nearly half of a recent class could not name a single country that bordered Israel. In an introductory journalism class, 11 of 18 students could not name what country Kabul was in, although we have been at war there for half a decade. Last fall only one in 21 students could name the U.S. secretary of defense. Given a list of four countries — China, Cuba, India, and Japan — not one of those same 21 students could identify India and Japan as democracies. Their grasp of history was little better. The question of when the Civil War was fought invited an array of responses — half a dozen were off by a decade or more. Some students thought that Islam was the principal religion of South America, that Roe v. Wade was about slavery, that 50 justices sit on the U.S. Supreme Court, that the atom bomb was dropped on Hiroshima in 1975. You get the picture, and it isn’t pretty.”

In his view, we’re raising a generation of kids who are so distracted and self-absorbed that they’ve tuned out the rest of the world. And part of the problem is that the don’t read newspapers or watch serious television.

Confidence in the Future

The publisher of the LA Times says the company is getting it together. In a memo to employees published on Los Angeles Times Pressmens 20 Year Club, David Hiller talks of adding 400 new regional advertising accounts, expanding Spanish language products and topping 100 million page views online the last two months running. There’s a new organization, new management and a commitment to build a vision and financial model that is sustainable for the long term. He also mentions in passing that there will only be merit raises this year and that they’ll be three months late. The Pressmen tap dance on that news. More to come during an April 30 town meeting.

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Meanwhile, the Albany Times Union believes in the future of print. The company’s about to spend $55 million to enlarge its headquarters and install a new printing press that will print color on all pages. The additional 70,000 sq. ft. faciliity is also intended to position the Times Union as a printer for other publications in the region.

Silver Linings in Pink Slips

Slate’s Jack Shafer sees some goodness in the latest wave of buyouts: a chance to bring new blood into the organization. The boomers who sit atop the editorial pyramids at all the big publications are too invested in the way things have always been done, he says. Get some whippernsappers in there for whom experimentation is a way of life.

Quoting: “‘There goes our institutional memory,’ somebody usually laments whenever a graybeard leaves a news organization. The speaker is usually another graybeard who, if pressed, couldn’t tell you what is so vital about the institutional memory wheeling out the door.”

Buyouts can mean rebirth for those taking the buyout, too, Shafer says. Longtime Washington Post political reporter Thomas B. Edsall is now at Huffington Post, where he says seeing his work appear without the meddling of a dozen editors is a rebirth.

And Finally

Leave it to Canada to buck the North American trend. Newspapers are actually doing pretty well up there, says Editors Weblog: “Total 2007 revenues, including online operations, slipped only 0.8%, with print advertising decreasing 2.4%. In contrast, online revenue grew 29% over 2006. Newspaper circulation as well took a very minor fall in 2007, decreasing 1.2% after a 3.8% rise the previous year.”

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A Racepoint Group blogger saw some value in my opinions and interviewed me about the future of newspapers. The fellow is a regular NDW reader, which makes the whole thing rather incestuous. Or perhaps circular. In any case, I blather.

We have a stack of good news about the reinvention of journalism that we really, really will get to you ASAP. It’s just that this depressing stuff keeps coming up.

2007 Newspaper Ad Plunge Was Worst in a Half Century

You’ve got to admire John Sturm, the CEO of the Newspaper Association of America. Here’s his quote in Editor & Publisher, commenting on news that the newspaper industry experienced its worst one-year drop in advertising revenue in 50 years in 2007: “Even with the near-term challenges posed to print media by a more fragmented information environment and the economic headwinds facing all advertising media, newspapers publishers are continuing to drive strong revenue growth from their increasingly robust Web platforms.”

You get the sense that John is the kind of guy who could find a silver lining behind any cloud. In this case, it’s the news that online revenue now represents 7.5% of overall newspaper ad revenue, up from 5.7% the previous year. The “near-term challenges” are that print ad revenue plunged 9.4%. Run the numbers, and you can attribute at least half of the gains in online revenue to the fact that the whole pie is getting smaller.

Newsweek Cuts 111, Including Many Top Critics

Newsweek is buying out 111 staffers, reports Radar, and a lot of institutional memory is going out the door. Quoting: “Among those leaving are some of the magazine’s best-known, most-admired and longest-service critics, including David Gates, David Ansen and Cathleen McGuigan. Harold Shain…All of the chief researchers are also leaving, including Nancy Stadtman, Ray Sawhill and Ray Anello, and their positions may be eliminated.” The report doesn’t say what percentage of the total staff this represents, but the cuts were probably inevitable in light of the recent 16% decline in newsstand sales.

Cuts aren’t just in print

Online technology publisher CNet has laid off 120 people, or about 10% of its workforce. The cuts were announced suddenly and were immediate, with no grace period. International Business Times has the details and the corporatese memo from the CEO. CNet is suffering from an overall downturn in tech ad spending, the result of consolidation and lack of new startup activity in the IT market. It’s also being pecked to death by ducks, as bloggers steal traffic in dribs and drabs. TechCrunch’s Michael Arrington remarks on this phenomenon, but suggests that bloggers will have to band together to form a significant media entity. He says it’s going to happen, though.

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Malaise is apparently spreading into local broadcast media. U.S. New’ Liz Wolgemuth reports that TV stations in Miami, Denver and Sacramento have laid off staff. A commenter says it happened in Dallas, too.

Short Takes

One of the few newspaper chains to resist the recent write-down frenzy, Lee Enterprises, finally swallowed the bitter pill, taking $500 million to $700 million in lost goodwill charges for the first quarter. A defiant management statement said the current stock price undervalues the company.

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LA Observed has assembled some of the parting e-mails sent by laid-off staffers at the LA Times. Several take shots at TribCo owner Sam Zell. “You want people to ‘Talk to Sam’ but not to ‘Talkback to Sam,’” says one.

As If You Didn’t Know, “The State of the News Media Is Troubled”

If you don’t have time to read the voluminous (180,000-word) State of the Media Report, J.D. Lasica gives a pretty fine overview here. Summarizing his summary: The old “destination” model is dead. The job of the news organization today is as much to direct people to information as to tell stories. The big-brand news organizations may have even more throw weight online than they do in print. The vast democratization of news that was expected isn’t occurring. In the age of search, every story is a home page (we liked this one). More reporting will consist of incremental updates, some even being simple e-mail or Twitter messages.

Last week marked the one-year anniversary of Newspaper Death Watch, a blog I started on a whim but which has built enough readership to merit several hours of my time each week. In posting more than 150 entries over the last year and reading many times that many articles, I’ve learned a few things that I thought I’d share on this anniversary.

The catalyst for this blog was an essay I wrote nearly two years ago in which I predicted that the newspaper industry was about to undergo a business implosion that would be stunning in its speed and scope. I wasn’t by any means the first person to predict the collapse of the industry, but I was probably one of the few to foresee how fast it would occur.

That’s because I’ve followed the high tech industry for more than 20 years and repeatedly seen successful, stable businesses come apart at the seams when their environment changed: Digital Equipment, Compaq, Novell, WordPerfect, Wang Laboratories, Cullinet Software, Lotus, Silicon Graphics, and many others. It wasn’t a stretch to see two years ago that the same pattern was occurring in the newspaper business. The environment for publishers was changing in ways that would make their value proposition irrelevant very quickly. Demographic trends all pointed in that direction.

What went wrong

The inevitability of the industry’s self-destruction seems clear now, so there’s no news in that. But how could a business that was so stable and profitable for 150 years go into such a rapid tailspin? Two stories from the past year offered great insight into that question: Outgoing Wall Street Journal editor Paul Steiger’s farewell piece from the end of 2007 and Eric Alterman’s thoughtful analysis from the March 31, 2008 issue of The New Yorker.

Steiger’s piece was memorable for the stories it told about the excesses of the post-