In the new world of journalism, anyone is potentially a journalist, even if only for a few minutes. This idea doesn’t sit well with a lot of media veterans, so it’s no surprise there is debate over the tactics of the Huffington Post and its employee, Mayhill Fowler, that led to two big campaign scoops.

The most recent one, which every political junkie heard by now, concerns a three-minute rant by Bill Clinton over a Vanity Fair report questioning the propriety of his post-presidential decorum. Clinton’s remarks were captured on video by Fowler, who didn’t identify herself as a reporter but who claims to have had the video camera in plain view while Clinton was talking. The LA Times account describes the recorder as “candy bar-sized” and Clinton claims to have not known he was being recorded.

Fowler also recently caught Barack Obama criticizing small-minded Americans in comments that were not meant for reporters.

Fowler claims no professional journalism experience, which means she isn’t a “true” journalist, to use a phrase favored by veteran editors. Yet no one can dispute the veracity of her reports. After all, they’re on tape.

The hot potato for professional journalists is that ordinary people with a $100 video camera can now capture major news events that the media miss. The problem for public figures is that these folks don’t necessarily identify themselves as journalists or operate by the rules. And since public figures have practically no coverage under libel laws, their every utterance is potentially fair game for the media. Which is actually a problem for the media.

Layoff Log

• Continuing the trend toward newspapers burying their own bad news, The Day of New London, CT cut about 12% of its jobs and relegated the news of the cuts to an inside business page on a Saturday. The comments are as interesting as the story on The Day’s website. Readers question whether senior executives are taking pay cuts and cite a director’s profile from dating site Match.com, of all places, as a source of information about the director’s compensation for his services.
• Layoffs are spreading into the magazine industry, which until now has been far less affected by the ad sales slowdown than the newspaper business. Folio magazine reports that three publishers are announcing layoffs. Meredith Corp. will cut 60 positions and leave 60 other open jobs unfilled. B-to-b publisher Reed Business Information is eliminating 41 jobs in advance of its divestiture by parent Reed Elsevier. And another b-to-b stalwart, Penton Media, will cut 42 jobs. There’s no word on what percentage of the workforce these layoffs constitute.
• The Cleveland Plain Dealer is one of a ring of innovative Ohio newspapers that came up with the idea of putting aside rivalries to share resources. That isn’t going to save it from the storms that are battering the industry, though. Cleveland Leader reports that management plans to cut 35 pages of news a week along with 20% of the workforce. That’s on top of a 17% cut in positions after a recent buyout.

Miscellany

Craig Stoltz reviews the redesigned websites of the ultra-conservative Unification Church-backed Washington Times and the Bay Area-bred San Francisco Chronicle and concludes that, surprisingly, the Times is the one doing the innovating. Whereas the Chron’s new design is more of the same, he says, Times has apparently started with a blank slate and rethought its approach to news presentation without bias toward print or anything else. The most innovative new feature is the Dig Deeper button, a hyperlink that literally flips a story on its head to show more background and detail. Try it; it’s neat. (via Jeff Jarvis).

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Editors Weblog rounds up some data and opinion from around the industry and shows why the economics of online advertising don’t comfortably replace the print model. There’s a study that shows that readers of nytimes.com spend an average of 68 seconds per day with the paper, compared to 16 minutes for the print edition. And the bounty of alternatives means that ad rates are under constant competitive pressure. Quoting Scott Karp of Publishing 2.0, “Print circulation is about 10% of total audience reach, while online advertising revenue is 10% of total ad revenue — the economics are nearly the perfect inverse of what they should be.” This is not an optimistic piece.

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Gannett Co. will write down the value of its assets by up to $3 billion, blaming troubles at its UK operation. Gannett is widely to considered to be one of the most financially sound US newspaper publishers.

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Google CEO Eric Schmidt says his company has a “moral imperative” to help the newspaper industry and that the company’s recently acquired DoubleClick ad service could help. He didn’t offer any more details. Newspaper publishers must be breathing a huge sigh of relief.

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Dan Schultz of MediaShift Idea Lab proposes a five-step process for vetting news that originates from citizen journalists. It involves link analysis, commenting, geotagging and moderation, among other things. Content Ninja has an analysis.

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It’s depressing to see newspapers shutting down ventures in new markets. The Milwaukee Journal Sentinel will close a free weekly aimed at young readers. A memo posted by Romenesko cites two years of ad declines and increasing newsprint costs as the double whammy.

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The new venture by former Wall Street Journal managing editor Paul Steiger has debuted. Pro Publica will produce investigative reports in partnership with other media outlets and publish those stories first on the partner’s print and Web properties. The initial site is nothing more than a roundup of news from other sources, but the site is almost fully staffed and original material will begin appearing shortly, according to the “about” page. Pro Publica is a nonprofit funded by some big charitable organizations. It will initially employ 27 journalists.

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Paul Bradshaw wants to know if blogging has changed the way journalists work. You can take his short, anonymous survey here.

And Finally…

The Online Journalism Blog is piercing the gloom with a new website where journalists can tell why it’s a great time to be in the business. It looks like Jolly Journalist just debuted, so hurry on over to be one of the first to comment.

 

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.

Last night I had the pleasure of moderating a panel on “The Future of Journalism,” featuring a group of reporters and former reports from the broadcast, print and online media. This panel was perhaps not representative of the media world these days, since all of the members are involved in digital initiatives of some sort at their organizations. But all come from conventional media backgrounds, and I found their optimism to be refreshing.

Panelists included Ted McEnroe, Director of Digital Media at New England Cable Network; Robin Lubbock, Director of New Media at WBUR radio; Howard Sholkin, Director of Communications & Marketing Programs at IDG Communications; and David Wallace, Managing Partner of Gamechange LLC and a professor at Emerson College.

All the panelists noted that newsrooms in their organizations were having some difficulty bridgingt the divide between the specialty journalist, who does one thing well, and the new journalist, who’s expected to work in multiple media with almost equal facility. Some veteran reporters simply haven’t been able to make the change, they noted, and their organizations are tolerating that fact. When journalists can’t make the transition to a new style of reporting, management is ultimately to blame, they said. Retraining is critical right now.

It was clear that the old walls that separated different kinds of media from each other are fallng. Robin Lubbock cited some recent stories by his radio station that demanded a visual component. In the past, the reporters would have had to do the best they could within the limitation of audio, but today they can post images on the website and send interested listeners there. This has added a wonderful new dimension to the craft of audio journalism and has energized the reporters, he said.

IDG’s Sholkin commented that the company has successfully transitioned from a print to a mostly online model in the US and that the new breed of journalist that’s entering the company is more flexible and adaptable than the print-only generation that preceded them. Today’s twentysomething reporters are only too willing to grab a camera or a video recorder if it’ll enhance the story.

The panel was also upbeat on the prospect for citizen contributions to the news reporting process. While acknowledging that mistakes were more likely in the still-undefined community journalism world, they applauded the trend toward involving readers in the newsgathering process. They were unanimous in the opinion that readers’ voices can only improve the quality of the final product.

Backpack Journalism

Several panelist also remarked on the emergence of the “backpack” journalist, who takes an assortment of devices into the field with which to capture a story. Notepads and tape recorders are no longer enough. Reporters must today be facile with any media. They also must be comfortable with communicating in short bursts. An example is the Wichita Eagle’s current coverage of a grisly murder trial via Twitter.

Editor & Publisher has a detailed special report on these mobile journalists or “mojos.” Using lots of examples, the magazine tells how some editors are dismantling the traditional newsroom and seding reporters out into the field to file from wherever they happen to be. A fully stocked backpack of gadgetry (which can run nearly $15,000) is essential, but when journalists have the tools, they become one-person news machines. “I have had days with five or six stories,” says Brian Howard of the Journal News in White Plains, N.Y.

These journos aren’t all kids, either. Most people quoted in the story are in their 30s and the man identified as the grandfather of mobile journalism is 63. Reading this story, you get the sense that change is happening.Good change.

Murdoch as Antidote

Rupert Murdoch is putting the finishing touches on his takeover of The Wall Street Journal with his the designation of Robert Thomson as managing editor. There wasn’t a word of opposition from the newspaper’s editorial independence committee, whose reason for existence becomes more questionable with every non-decision.

Simon Constable writes on TheStreet.com that Murdoch is injecting a healthy shot of competition into the fat and lazy US newspaper business. He contrasts the frantic competitiveness of the newspaper market in the UK, with its more than a dozen dailies, to the languid complacency of a US market defined by one-paper towns and government-sanctioned monopolies. No matter what you think of Murdoch, Constable says, the man is shaking things up and that can’t possibly be bad for an industry in crisis.

Not everyone agrees. Writing in Canada’s Financial Post, Editor Terence Corcoran rips into the Journal’s creeping left-wing bias, focusing in particular on new columnist Thomas Frank. Far from being a counterbalance to the Journal’s traditionally conservative editorial views, Frank is just a liberal ideologue spouting the tired old mantra of publications like The Nation, from whence he came, according to Corcoran. And Cameron blames Murdoch, whose left-wing leanings Cameron says are routinely injected into the editorial voice of the newspapers he acquires.

And Finally…

Seattle Times Executive Editor David Boardman gives his readers a forthright account of why his newspaper is laying off when circulation is actually growing. The problem isn’t that the paper is losing relevance, he explains. It’s that the business model doesn’t work any more. “Thanks in part to a Bay Area entrepreneur named Newmark and his free, online ‘craigslist,’ the bottom dropped out. In the past eight years, revenue from classifieds has fallen by two-thirds, and they now account for only 20 percent of total ad income.”

Boardman’s piece is refreshing. It’s direct and free of the “our combined print/online readership is bigger than ever” denial. He says newspapers need to find a new way to make money. So that’s what they’re going to do.

LAmag.com rounds up a group of former LA Times editors for one-on-ones about the past and future of the newspaper. The conversation is pleasant until you hit the jump page, when former EICs Dean Baquet and James O’Shea unload on owner Sam Zell.

Quoting from Baquet:

“Tribune was not a good steward, but Zell seems to be worse. Tribune didn’t like the L.A. Times, but Zell seems to be flailing and making it up as he goes along. At least with Tribune, you could have a rational fight—they never shouted obscenities at me. I wish somebody could tell this guy that he’s presiding over important newspapers and that sounding like a knucklehead won’t work in the newspaper business. Doesn’t he understand that the best people at the Times are floating résumés across the country because of his bullying?”

And from O’Shea:

“I think Mr. Zell looks at newspapers as he looks at any business, but a newspaper isn’t any other business. It’s a public service. If you do a good job serving the public, then business will be good. Public service is not a dividend you decrease or increase when profits fall or grow. What the L.A. Times becomes will depend on Mr. Zell’s understanding of that.”

Survey says Newspaper Websites Attract Smart, Rich People

A Nielsen survey commissioned by the Newspaper Association of America reports that newspaper websites attracted more than 66.4 million unique visitors in the first quarter, up 12.3% from last year. Page views were up a more modest five percent. In addition, the survey found that regular online newspaper readers are richer, better educated, more likely to travel and more likely to use iTunes. They have all kinds of other desirable characteristics, which you can read about in the press release.

Murdoch Still Favored to Win Newsday

Newsday continues to provide the best coverage of its own impending sale. You’d think that with Cablevision outbidding two other suitors by $70 million, the deal would be a no-brainer.  Not so, says this report. For one thing, Sam Zell may be reluctant to snub his new buddy, Rupert Murdoch. Cablevision may also face the same kind of cross-ownership regulatory hurdles as News Corp. And the whole deal needs to be rubber-stamped by a watchdog group of Tribune Co. employees, who may or may not agree with their boss. The whole thing could drag on for months. (via Romenesko)

Envisioning the Future of News

Susan Edgerley, assistant managing editor of The New York Times, is answering questions from readers. She’s focused on reinventing the newsroom. Some notable quotes:

“Two years ago, we might have been hesitant to break a scoop on the Web — we would have worried about the competition catching up to us before our print deadline. No more. Now we put the story out there and figure out how to advance it for the next day’s paper.”

 ”The Web staff used to be in a different building a couple of blocks from our old Times Square office. When we moved into our new building about a year ago, we had the space to sit together for the first time.”

 ”I don’t think you’re wasting your time getting a print journalism degree. Telling stories fairly and compellingly will always be at the center of what we do.”

 ”We’re hiring people, some of them straight out of school, for their Web skills.”

 ”Finally, NYTimes.com is more than the stories, pictures and graphics you see everyday in The New York Times. It is more than a newspaper on the Web. We want to use its blogs and reader comments and Topics pages and interactivity to talk more directly to our readers and find ways for them to share information with us.”

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ReinventingClassifieds.com has a prescription for resuscitating the dying business. Newspapers should put all their classifieds into one distributed, constantly updated database and then distribute them freely to bloggers, who can sell display ads against them. Bloggers can offer free classifieds to their readers, which become part of the master database. It’s an interesting idea, although we question how much interest bloggers – or display advertisers – will have in running ads next to ads. (via Romenesko)

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For the true TV news junkie, check out LiveNewsCameras.com. The site aggregates video feeds from more than 100 stations around the U.S. The project is the brainchild of a former Bay Area TV producer, says the San Francisco Peninsula Press Club.

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Editors Weblog reports on Sunlight Foundation’s new tools for online journalists. They include a Google Maps mash-up of earmarks from last year’s Labor, Health and Human Services appropriations bill.

There’s also an item on the innovative uses of Twitter by the Evening Leader in the UK. The group text-messaging service recently enabled the paper to cover local election results, scooping its competition and setting up the print edition for more thoughtful next-day coverage. Will Twitter become an essential tool for journalists in the future? Let’s hear your comments.

Layoff Log

• The Lexington Herald-Leader is offering a voluntary buyout program, looking to reduce its staff of 385 employees by about four percent. Layoffs are possible if the offer doesn’t generate enough interest.
• The Camera of Boulder, Colo. laid off nine employees — 6 percent of its staff — in response to declining advertising revenues. The president of the company described the newspaper’s business as “healthy.” You figure it out.

The New Communications Forum conference brings together some of the leading thinkers in social media for three days of discussion about where media and marketing are heading. Increasingly, journalists are in the audience and on the agenda. This year, the Forum devoted one of its five tracks to the changing face of journalism.

There are some young, smart and visionary young journalists in the crowd. They understand that the world is changing and they’re not only prepared but eager to lead the charge. Talking to them gives you confidence in the future of journalism.

But they all cite the same problem: editors don’t see the need for change. “We’re still explaining to editors why reporters need to blog,” said one San Jose Mercury News journalist. “They’re very focused on the print publication which, after all, generates most of the revenue.”

Print is, indeed, the cash engine at newspapers, but it’s generating less and less green while the future of the business is clearly online. While many newspapers have made efforts to integrate their print and Web operations, the commitment is half-hearted, journalists said. “The print staff still sees the online reporters as second-class citizens,” said one online editor.

As positive as these young journalists are about the future of their profession, one gets the sense that they’re frustrated and restless. They’re trying to effect change from within but running up against too many roadblocks. It seems unlikely that many of them will stay with their current employers for long. “I’m here trying to drink up as much as I can to improve my own skills,” said an editor at an east coast daily. “If I need to go out on my own at some point, I want to be ready.”

McClatchy Earnings are Worst of a Bad Lot

McClatchy reported some of the worst results of any newspaper publisher for the first quarter, with revenues sagging 13.8%. The company was particularly hard-hit in California and Florida, which accounted for 56% of the chain’s revenue decline. Among the eye-popping numbers: classified revenue was down 25.7%, led by real estate advertising (down 35.8%), help-wanted ads (off 33.4%), and automotive business (down 16.1%). As reported earlier, McClatchy CEO Gary Pruitt sees no bottom to the downturn.

Wall Street is hammering newspaper stocks. On an up day for the Dow, three newspaper issues hit all-time lows.

Even Free Papers Feel the Pinch

Metro International SA, which publishes more than 100 free daily newspapers in 23 countries, saw revenue decline 6.1% in the first quarter. The publisher is feeling the same ad pinch as its subscription-driven peers. “The U.S. market is probably the worst it has been since the 1930s for media companies,” Metro Chief Executive Per Mikael Jensen told The Wall Street Journal. Metro plans to cut about 20% of its U.S. staff and is reviewing its New York, Boston and Philadelphia properties for possible sale.

WSJ Airs Dirty Laundry of ME Ouster

Outgoing Wall Street Journal managing editor Marcus Brauchli was under careful scrutiny from the beginning by News Corp. management, which wanted to see rapid change at the paper and which was frustrated from the beginning at Brauchli’s reticence to expand the Journal’s scope, shorten stories and write punchier headlines, according to a piece in Wednesday’s Journal. The paper airs its dirty laundry in a nearly 2,000-word article that details how Brauchli was kept out of the loop on changes in production and design and yet was seemingly unaware of long-brewing plans to replace him.

Brauchli was given his walking papers in a meeting about two weeks ago, although the story says Brauchli offered little resistance. He’ll stay on as a consultant. The Journal’s committee on editorial independence is supposed to approve the choice of a successor, but the rapid pace of turnover at the paper would indicate that Rupert Murdoch won’t look favorably upon too much opposition.

Members of the Bancroft family, who opposed the Journal’s sale to Murdoch, say they’re not surprised by the turn of events. “This is why I was not in favor of selling the paper to that man,” said Jane Cox MacElree, who controlled 15 percent of the family’s Dow Jones shares. “Words mean nothing to him, unless they’re his.”

And Finally…

• Philip Stone thinks the unthinkable: editorial and advertising departments should work more closely together. It’s been done before, he says. The two operations team up on an idea with sales appeal and then go their separate ways to fulfill the mission. Purists will had this idea, Stone writes, but “editorial must now surely understand its very jobs depend on how well advertising does its job. And any help editorial can give to advertising to bring the bucks in should be par for the course.”
• Two environmentalists disrupted a speech by New York Times columnist Thomas Friedman. One ran on stage and heaved a pie at the writer. Friedman tried to duck the flying confection, but it caught him in the face and torso. No one was injured and the woman and her accomplice were arrested.

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.

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-Watergate period. He remembers, for example, how one top editor put the kibosh on a proposal to tighten the belt by eliminating first-class travel for reporters. “I like flying first class,” Steiger quotes the man as saying with a smile. “You’re setting a bad example.” He also recounts internal struggles that occurred when newspapers went online, struggles that no doubt held back these papers from making the bold moves they needed to insure their survival. Steiger’s piece makes it clear that newspapers fumbled the opportunity to get out front of the Internet by focusing too much on protecting their print franchises.

Alterman notes the changes that occurred around the time of Watergate, when papers began to shed their partisan past and reposition themselves as impartial (read: bland) recorders of history. The scramble to win Pulitzers and duplicate the Washington Post’s Watergate success resulted in millions of dollars being flushed on large Washington bureaus and expensive overseas correspondents. Basically, newspapers lost touch with their local constituencies and began writing for other journalists more so than for their readers.

Alterman also documents another ominous trend that began in the 1970s: the rise of the “insider journalist.” As reporters gained celebrity, their access to the great and powerful became a status symbol amongst their peers. Powerful people knew this, and they learned to exploit their access to leading journalists for their own gain as well. Readers weren’t served by any of this, and as the journalism world became clubbier during the 1980s and 1990s, the reading public lost interest.

This culminated in embarrassments like the Jayson Blair scandal and subsequent fallout in which a number of high-profile columnists at newspapers around the country lost their jobs. It was the low point of modern journalism: the profession had sunk so far that facts no longer mattered; if a reporter said something was true, then it must be true. Who had time to fact-check, anyway? There were gala dinners to attend and golf dates with a CEO.

Whistling Past the Graveyard

Meanwhile, newspaper executives knew full well what was going on around them. Circulation began sliding in the mid 1980s and demographic trends made it clear that young people didn’t read newspapers. A few papers saw catastrophe coming and made the leap to national circulation. They will survive the carnage.

The rest were addicted to the healthy and predictable profit margins of their business. Executives knew they were over-exposed to advertising from the shrinking department store industry and that their classified ad franchises were horribly vulnerable to online competitors. But why do anything? Their investors were fat and happy and there was no need to rock the boat.

This complacency is common in industries on the brink of collapse. IBM averaged $8 billion in annual profits during the decade before it lost $8 billion and nearly went out of business. Big companies often enjoy their most profitable years just before the undertow of market change sucks them under.

Watergate’s sad legacy

It’s too late for the newspaper industry to save itself. The average regular newspaper reader is 55 years old. Fewer than one in five people under the age of 25 ever reads a newspaper. They’re not going to start reading one now.

Reading accounts of the industry’s mistakes, I’ve become increasingly convinced that Watergate was the worst thing that ever happened to the newspaper industry. It transformed the role of the reporter from anonymous scribe to media celebrity. It distracted editors from the needs of their readers and diverted investment from productive local channels into wasteful global folly. For almost 30 years, the industry got away with these mistakes because it was the only game in town. Had executives acted a decade ago to dominate the online age, they might have saved themselves. But in this day of blogs, Wikipedia and Craigslist, newspapers don’t have a compelling value proposition.

Sure, online traffic is growing and online dollars are inching upward, but the top line is falling too fast. The union contracts negotiated two decades ago can’t be easily changed, the presses still need to be maintained and delivery truck drivers need to be paid. At some point during the next two years, the revenue and expense lines will cross, but there will be little left to cut without turning major metro dailies into expensive supermarket advertisers. There will be massive consolidation and a lot more layoffs.

I’ll continue to chronicle the sad decline of an American institution on this blog, but I’ll also write about some of the exciting experiments that are transforming journalism across multiple media. I firmly believe a new kind of journalism that embraces blogs, camera phones, Twitter, wikis, hyperlinks, search engines and millions of ordinary citizens will be far richer and more vibrant than the one that preceded it. We just have to clean up an ugly mess first.

Continuing the dirge of dreary earnings that began on Wednesday this week, Tribune Co. wrapped up its last quarter as a publicly traded firm with a $78 million loss from continuing operations. The pattern was identical to that reported by Journal Communications, McClatchy and New York Times Co. yesterday: Classified revenue down 25%, hurt by a 34% drop in real estate advertising and a 28% decline in help-wanted; retail advertising off 10%; national down 11%. Most ominously, the publisher reported that Internet ad revenue was up only 6%.

Evidence is mounting that Sam Zell had no idea what he was getting into. Having initially declared that the Tribune Co. wouldn’ t downsize its way to profitability, he has hacked more than 500 jobs and is talking of further cuts. Zell said he planned to keep the company mostly intact, but in announcing disappointing quarterly earnings on Thursday, the company said it has ““begun a strategic review of certain Tribune assets.” There’s now talk that Newsday is on the block, with media moguls Rupert Murdoch and Mortimer Zuckerman sniffing around.

The Chicago Sun-Times ran a contest for the best reader-submitted video opposing Sam Zell’s proposal to sell naming rights to the Chicago Cubs. The winner was a college student who interns at the Tribune. The Trib has some fun with winning its rival’s contest in this clip, which also includes the winning video.

Three Big Publishers Tell Same Sad Story

Continuing to bang the drum slowly, Editor & Publisher reported financial results from three big newspaper publishers on Wednesday, each of them dismal:

• Journal Communications’ February revenue fell 7.5%, dragged down by catastrophic results at the flagship Milwaukee Journal-Sentinel. Check out these numbers from the Brew City: national ads down 31%, direct marketing down 54%, help-wanted ads down 31% and real estate ads down 26%. The only bright spot was online revenue, which was up 16%, but only to $1.1 million.
• McClatchy had a similar tale of woe, reporting that total revenue in February slid 11.7%. National advertising was off nearly 13%, while classified advertising declined 25%. The recession hit classifieds particularly hard as real estate and employment advertising both dropped more than 30%
• Finally, The New York Times Co. said that ad sales that fell 6.6% in February, largely due to plunging classified revenue (off 19%) and double-digit advertising declines at its New England group, including the Boston Globe. While the Times stopped short of blaming God for its troubles, it did note that March results will be “adversely affected” by the early Easter this year. Easter is traditionally a slow advertising period.

There was one bright spot, though. USA Today advertising jumped 14.5% in February. “Strong growth in the travel, technology, financial, packaged goods, retail, advocacy and pharmaceutical categories offset lagging the telecommunications and automotive advertising at the paper, Gannett said.” Here at the Death Watch, we’ve been saying all along that a few national newspapers will survive and actually thrive as the industry collapses. Count on The New York Times, The Wall Street Journal, The Washington Post and USA Today to come out the other end, as all made the jump to national distribution when they had the chance. Business travelers need a morning paper, and that’s an attractive audience for national advertisers.

And Yet Editors Still Don’t Get It

Here’s another indication that newspaper editors are still blissfully clueless about the long tail. The fifth annual “State of the American News Media” study by the Project for Excellence in Journalism finds that as newspapers cut staff, they’re actually concentrating their remaining resources in fewer places, which means they’re overlapping each other more. “You have in a sense more reporters across more outlets, but they are all covering a fairly narrow band of stories,” the project’s director told Reuters. “There are more people congregating at the White House, fewer at any one government agency.” So we’re still going to have 150 reporters covering a presidential press conference at which everyone sees the same thing instead of cutting back on White House coverage and redeploying staff locally, where it might actually do us some good.

Recognizing Unsung Victims of Newspaper Meltdown

MarketWatch Video deploys an international team of journalists to rip the lid off the story of the unappreciated victims of the newspaper industry implosion: journalist bars. The seven-minute story takes us to San Francisco, Chicago, Boston and New York, where bartenders reminisce about five-hour lunches and payday parties and mourn the decline of conversation. There’s even a 45-second clip from London, where the reporter’s only apparent contribution to the story is to show us that he’s in London. Hey, that’s more than the Boston Globe can say!

There are so many cutbacks to report that we have to spread the news across two posts.

Bay Area Blues

The big news comes out of the Bay area, where some 1,300 employees at San Francisco-area newspapers were offered buyouts. The San Jose Mercury News offered packages aimed at shedding nearly 200 non-union employees and also said it would cut an unspecified number of union jobs. Bay Area News Group-East Bay, which includes the Tribune, the Times and 14 other newspapers, offered all 1,100 of its employees the chance to apply for buyouts, raising the question of what it would do if everyone took the offer. On the other hand, that might be a preferable option to staying in business. Employees have to decide by the end of this week.

MetroActive describes the somber mood in the Merc newsroom, which has lost half its staff since 2001. The story quotes the president of the San Jose Newspaper Guild says, “A whole lot [of people] have been looking for something else because they are done. This is not a company that people want to work for.” But where else are you going to go?

The AP quotes a veteran Merc business reporter saying, “We’ve been through this a number of times. You just wonder when it’s all going to end. The problem is nobody knows where the bottom of this is.” Hint: it’s still a long way down. The Merc covers its own gloomy news here.

In nearby Tracy, Calif., the Tracy Press has scaled its frequency back from five times weekly to twice weekly over the last six months and just laid off an unspecified number of staffers. The paper has a free circulation of 9,700. One of the laid-off employees commented, “I’m a victim of three things: the Internet, the real estate mess and the recession.” Management at Tracy’s two other daily newspapers — the San Joaquin Herald and Stockton Record — have also recently announced cost-cutting measures, though this story didn’t specify what they were.

 

Venture Trims and Tells the Tale

In the spirit of true openness The Ventura County Star devotes 750 words to a layoff amounting to 2% of its staff, including perspective on its parent company’s finances and the overall health of the newspaper industry. No editors were affected in this round, however, the newspaper’s publisher ominously noted, “I don’t think we’ve seen the bottom yet…Things could get worse before they get better.”