As 2009 draws to an end, about the best thing anyone in the US newspaper industry can say about it is, “Thank God it’s over.”

This was unquestionably the worst year in the history of the business. Circulation plummeted to pre-World War II levels and advertising revenues hit regions not seen since the Johnson administration. The year opened on a dismal note with the closure of major dailies in Denver and Seattle and threatened shutdowns in San Francisco, Boston and Chicago. Many pundits predicted a bloodbath with dozens of dailies folding during the year.

But then the unexpected happened. Union concessions and deep cost cuts brought the Boston and San Francisco papers back from the brink. While smaller dailies did give up the ghost in Tucson and Ann Arbor – and more than 100 weeklies shut down – the doomsday scenario never occurred. Instead, publishers came to grips with the reality of their plight and made earnest attempts to stabilize their operations. In a January column on WallSt.com, former Financial World magazine and Switchboard.com president Douglas McIntyre listed “Twelve Major Media Brands Likely To Close In 2009.” In fact, only one – Gourmet magazine – did.

As the year wore on, signs emerged that sales declines are slowing and circulation revenue from the core of loyal readers is making up some of the advertising gap. A broad consensus has emerged that the ink-on-dead-trees model is mortally wounded, giving publishers permission to turn their attention from saving a dying industry to managing it profitably downward while investing in new ventures that have growth potential.

Creative revenue ideas ranging from pay walls to behavioral targeting sprung up this year. Enrollments in journalism schools hit all-time highs and undergrads said they are approaching their careers with the idea of building personal brand rather than working for a big metro daily. Many industry veterans applauded their spirit.

As the second decade of the new millennium begins, there is a palpable sense of optimism, not only about the economy but also the potential to reinvent journalism. It’s an attitude we have tried to encourage in our own small way, for this blog long ago turned its attention from death to rebirth.

We’ll be posting less frequently during the first six months of 2010 as we tackle a new book on business-to-business social media. Your comments and many words of encouragement have been a constant source of delight in this otherwise dreadful year. We wish you better times in 2010. Keep your chin up.

For now, here are some of the more memorable items from the 178 entries we posted this year, presented in no particular order

Uppers

• Doc Searles presented a well-reasoned argument why journalism isn’t disappearing from the earth but simply following the path already blazed by business. Much as personal computers and open source software moved computing innovation from the center to the ends of the network, journalism is undergoing a similar metamorphosis, he wrote. Journalism isn’t going away so much as being democratized.

• Life magazine published a delightful collection of classic photos – like the one of Los Angeles gangster Mickey Cohen at right – about the contribution of newspapers to our culture under the banner of When Newspapers Mattered.

• The Library of Congress offered free access to a searchable database of dozens of daily newspapers stretching back to 1880. Nearly 1.5 million pages have already been scanned.

• A team of publishing veterans that includes Backfence founder Mark Potts and super-blogger Jeff Jarvis announced GrowthSpur. The startup is building a back-end business system that it hopes will enable bloggers and small publishers to quickly monetize their businesses while building a network that multiplies opportunity for every member.

• A team of veteran journalists and news technologists joined forces to create a technology to enhance the Web browsing experience while creating a new revenue stream for content producers. Startup CircLabs is developing a tool that learns from the user’s online behavior to deliver recommendations for relevant content. Founders include three top officials from the Donald W. Reynolds Journalism Institute at the University of Missouri.

• News-editor-turned-Silicon-Valley-entrepreneur Alan Mutter proposed ViewPass, a subscription service that would aggregate editorial content and collect visitor data that could be used to sell higher-priced ads. Mutter estimated that the system could more than double the CPMs that publishers charge advertisers and would manage copyrights more effectively than the current haphazard system.

• Former Rocky Mountain News Washington correspondent ME Sprengelmeyer penned a splendidly written essay about the joys of rediscovering his journalist roots as publisher of a small weekly newspaper.

• In a moving retrospective, Christian Science Monitor Editor John Yemma reminded us why he admired Walter Cronkite.

• “My beat at The Globe and Mail is the dead,” wrote Sandra Martin in a superbly written piece on the craft of obituary writing, one of the least understood and most often satirized disciplines in journalism.

• Writing in The New York Times, David Carr presented a glass-is-half-full perspective about the future of journalism. Carr observed that the new breed of technology-enabled young journalists see the collapse of media institutions as an opportunity to make a name for themselves based upon merit rather than survival. “The next wave is not just knocking on doors, but seeking to knock them down,” he wrote.

• A new Bay Area nonprofit was funded to the tune of $5 million by a local investor. The venture is a collaboration between public broadcaster KQED and the Graduate School of Journalism at the University of California at Berkeley.

• The Knight Foundation funded nine new-media projects to the tune of $5.1 million. The biggest winner was DocumentCloud, a project conceived by journalists from The New York Times and ProPublica to create a set of open standards for sharing documents. Other winners included one to help citizens use cell phones to report and distribute news, a project to develop a media toolkit for mobile applications and an online space where the people can report and track errors in the media.

Downers

• The New York Times published a jaw-dropping correction from its July 17 “appraisal” of Walter Cronkite’s career. Among the eight errors in the story where Wikipediable factoids such as the date of Martin Luther King, Jr.’s assassination. Ombudsman Clark Hoyt was blunt in his explanation: “A television critic with a history of errors wrote hastily and failed to double-check her work…editors who should have been vigilant were not.” The critic, Alessandra Stanley, has a history of being so careless with facts that in 2005, “she was assigned a single copy editor responsible for checking her facts.”

• The owner of Editor & Publisher, which has covered the newspaper industry for 125 years, announced that it will shut down the magazine.

• The bankrupt Tribune Company sent “14 reporters, columnists and photogs to this year’s Super Bowl, even though neither Super Bowl team came from a city where Tribune actually has a newspaper,” observed Mark Potts.

• The Printed Blog, a venture by serial entrepeneur Josh Karp that sought to flip the online publishing model by delivering blogs in print, shut its doors after just a few months.

• The Journal News of Westchester County fired all 288 employees and invited them to re-apply for 218 jobs. Managers had two weeks to conduct interviews and decide who got to stay.

• Many publishers apparently took advantage of recent changes to Audit Bureau of Circulation (ABC) rules to overstate their real readership numbers. The rules changes enabled publishers to count “bundled” subscriptions of paid and online editions as two subscribers, even if only one person was doing the reading.

• Ahwatukee (Ariz.) Foothills News staff writer Krystin Wiggs told of being victimized by an elaborate hoax concocted by a young man who claimed to be a gifted and successful chef. The man convinced Wiggs that he had won scholarships to culinary school and landed a sous chef job at a top restaurant at the age of 21. He even enlisted an accomplice to masquerade as head chef at the restaurant for a phone interview.

• BusinessWeek was put up for sale for $1. It was no bargain, since the legendary newsweekly was on track to lose $75 million this year. Bloomberg eventually paid up and then took a hatchet to the senior staff.

• After a tense four-month staredown with The New York Times Co., the Boston Globe’s largest union voted to accept a package of pay cuts, benefit reductions and other concessions that was worse than the one it had rejected a month earlier. The union chief was later charged with misappropriating funds by, among other things, faking a countersignature on his own paycheck.

• Sydney Morning Herald technology writer Asher Moses was publicly embarrassed over comments he made about a sex scandal involving a prominent former rugby star. Although the comments were made during his off hours, Moses’ impartiality was widely questioned.

• Amazon.com had a chance to win friends among the ranks of newspaper publishers by offering paid subscriptions to their products via the Kindle e-reader. Unfortunately, Amazon’s onerous licensing terms entitled it to keep 70% of the subscription fees.

• Todd Smith, who was shot on the job while working as a reporter for the Missouri-based Suburban Journals chain of newspapers, was called to a meeting at headquarters on April 15. Smith thought that maybe the staff had won an award for coverage of the massacre. Instead, he learned that he and several others were being laid off.

• Boston Herald Sunday editor Tom Mashberg reprinted an e-mail exchange between him and Keith O’Brien, the author of a harshly critical story about the Herald that appeared in the rival Boston Globe. The e-mail outlined O’Brien’s intention to include negative comments about the Globe in his story as well as the fact that the Herald was profitable while the Globe wasn’t. None of that information appeared in the final piece. “Looks like the editors got hold of this and turned it into a hatchet job,” Mashberg wrote.

• Washington Post publisher Katharine Weymouth (right) canceled plans for a series of dinners at her home after an overzealous Post marketing executive issued flyers positioning the events as a way for sponsors to buy access to the paper’s journalists and members of Congress. Weymouth said the promotions “should never have happened.”

• French President Nicolas Sarkozy said his government would double its advertising in print and online newspapers in an effort to prop up an industry that many people believe needs a radical overhaul more than money. That’s on top of previously announced subsidies that give every 18-year-old French citizen a free newspaper subscription.

• The Chicago Tribune’s marketing department launched an experimental project to seek feedback on stories that hadn’t yet been published or even fully reported. A group of 55 reporters signed an angry e-mail in protest. Editor Gerould Kern issued a statement calling the experiment “a brief market research project.”

• A survey of 1,400 people by Britain’s YouGov found that media people consume an average of 44 drinks a week, or almost twice the recommended maximum.

• In a Vanity Fair profile of New York Times Co. CEO Arthur Ochs Sulzberger, Jr., Mark Bowden described one management offsite exercise in which Times Co. executives played a game that challenged them to decide between safe choices and riskier but potentially more rewarding long shots. An employee who had seen many groups play the game observed, “This is the most conservative group I have ever seen.”

• The Houston Chronicle devoted just 208 words to news that it was laying off 12% of its staff, or nearly 200 people. In fact, the Chronicle didn’t even mention a body count. A Wall Street Journal story was the source for the number.

• A press release from the Washington Times, as reprinted on Talking Points Memo, also buried the lead about its own bad news: “The Washington Times today announced that it will begin producing a more focused Monday through Friday edition designed to feature its most distinctive news and opinion content.” In other words, it was killing the Sunday edition.

• Kubas Consultants polled 500 newspaper executives in November and found them to be optimistic that the worst is almost over. Blogger Alan Mutter e-mailed the researcher who conducted the survey and learned that even he didn’t believe the resutls. “Optimism is better than slitting your wrists,” reasoned Ed Strapagiel.

• A new newspaper in Detroit, the Daily Press, published just five issues before hitting “a bump in the road” and suspending further operations until the new year.

• ZDNet blogger Richard Koman alleged that Yahoo had passed the names and e-mail addresses of hundreds of thousands of bloggers to Iranian authorities during the country’s controversial election. It turns out Koman‘s unnamed source for the story was an Iranian blogger with a vested interest in spreading misinformation. Paul Carr ranted about the incident and ZDNet retracted the entry and apologized.

Signs of the Times

• The online-only Huffington Post set up a small investigative unit to examine the nation’s economy. The online news site is collaborating with The Atlantic Philanthropies and others on the Huffington Post Investigative Fund with an initial budget of $1.75 million and a staff of 10 investigative journalists to coordinate work done by freelancers.

• HuffPo also began writing two different headlines for some stories and showing them randomly to viewers for five minutes. After that time, the headline that generates the most clicks becomes the default.

• The Providence Journal took hyperlocal to heart by moving all its local coverage to the front and banishing national and international news to a separate section.

• TV stations in Milwaukee, Lancaster, Pa. and Little Rock opened their daily news budget meetings to outsiders through video, live blogs and Twitter. News directors said the experiment has been a mixed bag, but has resulted in some solid news tips.

• The New York Times shattered tradition in January with a front-page strip ad for CBS. The Boston Globe followed suit just two weeks later. And the Los Angeles Times ran a page-one ad (at right) in a position and typeface that some people believed could be mistaken for a news story. Executive editor John Arthur called the ad “horrible” and “a mistake.”

• Science and technology columnist Dave Brooks of the Nashua Telegraph handed over partial control of his blog on the Telegraph website to the University of New Hampshire news service so that it could “post items about science and social science research at the university…directly on GraniteGeek whenever it wants.” Said Brooks, “Slightly to my surprise, reaction in the newsroom has been uniformly favorable.”

• Reader’s Digest filed for Chapter 11 bankruptcy protection.

• Three Connecticut alternative publications – the Hartford Advocate, New Haven Advocate and Fairfield County Weekly – outsourced all editorial content for one week’s issue to freelance journalists in India. Editors assigned journalists 7,700 miles away to principally cover local news, entertainment and culture.

• Writing under the pseudonym of @TheMediaIsDying, microblogger Paul Armstrong racked up more than 21,000 followers for his stream of tweets about the troubles of mainstream media.

• Several blogs were started to tote up the gloomy layoff numbers across the US. They included The Layoff List, Layoff Blog, Jobless and Less, The American Lawyer Layoff List and the TechCrunch Layoff Tracker.

• One print paper did just fine this year. The Slammer boasts a newsstand profit margin that “is four times that of most local dailies, and its circulation has grown to 29,000 – up nearly 50 percent from 20,000 just last year,” wrote The Christian Science Monitor. The Slammer is full of mug shots, crime reports and allegations of misdeeds and carries the slogan “All Crime, All the Time.”

• The Wall Street Journal launched an interactive map showing “adverse events at the top 100 newspapers” since 2006.

• Condé Nast closed four magazines, including the 70-year-old Gourmet. September ad page figures for the publisher showed a stunning fall of nearly 1,700 pages.

• The 12,000-circulation Newport (R.I.) Daily News instituted a paywall that requires online visitors to pay nearly two-and-a-half times as much for a yearly subscription as print subscribers do. “Our goal was to get people back into the printed product,” publisher Albert K. Sherman, Jr. told Nieman’s Edward J. Delaney.

• More newspapers began pooling resources to share stories, with consortia forming in Florida, Tennessee, New York and New Jersey. In New York, five newspapers banded together to exchange content in the largest such arrangement since the share-nicely trend began in 2008. Bloomberg and the Washington Post did a deal to create the Washington Post News Service With Bloomberg News. The alliance includes a revenue-sharing agreement to create a co-branded online business section on the Post’s website in the first quarter of 2010.

• In Moscow, the the GazetaPacket began delivering news, crosswords, recipes and advertising on printed paper bags.

Numbers

• A Pew Research study in January found that the Internet passed newspapers as the preferred source of news among Americans. The survey of 1,489 adults found that 40% get most of their national and international news online, compared with 35% who rely primarily on newspapers. Television continued to be the number one choice, at 70%. Among people under 30, however, the Internet is now as popular as television for news.

• In March, Mark Potts toted up the market capitalizations of publicly held newspaper companies in the US and came to a striking conclusion: Their combined value was just $1.3 billion, or a little more than the $1.1 billion that The New York Times Co. paid for the Boston Globe in 1993. Valuations had recovered somewhat by year’s end.

• One-third of Americans under the age of 40 told Rasmussen Reports that Comedy Central’s Daily Show with Jon Stewart (right) and the Colbert Report are replacing traditional news outlets.

• A survey of 95 editors by the Associated Press Managing Editors found that newsroom workers between the ages of 18 and 35 were the most likely to be laid off, despite the industry’s need to increase its appeal to precisely that age group.

• Nevertheless, journalism schools saw an astonishing surge in enrollments. “According to an annual survey by the University of Georgia, the number of undergraduates enrolled nationwide in journalism and mass communication schools jumped more than 41% between 1997 and 2007,” reported the Capital Times of Madison, Wisc.  Also, Forbes.com noted that journalism schools at Columbia University, the University of Maryland and Stanford University saw significant spikes in applications in 2008 — 30 percent, 25 percent and 20 percent, respectively.

• A poll by Zogby International found that only one in 200 people believes newspapers will be a dominant source of information in 2014. In addition, 56% of adults said that if they were only allowed one source of news, they would choose the Internet, compared to 41% for television, newspapers and radio combined.

• Martin Langeveld calculated that in 1940 publishers distributed 118 newspaper copies for every 100 households. Today, the number is 33 copies per 100 households, down from 53 less than a decade ago.

• Ninety-three percent of all newspaper sales “can now be attributed to kidnappers seeking to prove the day’s date in filmed ransom demands,” reported The Onion in a hilarious spoof of the industry’s downturn.

Notable Quotes

“Our newspaper’s biggest revenue source today is foreclosure notices.”

–Clifford Buchan, editor of the Minnesota-based weekly Forest Lake Times.

“That’s like asking someone in another business if they want to get vaccinated with a live virus.”

-Tribune Co. CEO Sam Zell, commenting on the prospect of finding a merger partner for his bankrupt company.

“Most people would hear you say that, and they would say, you know, he doesn’t — with all due respect, you don’t get it.”

–Charlie Rose to Mortimer Zuckerman regarding the latter’s plans to continue publishing the New York Daily News because, among other things, his 11-year-old daughter is going to be the next publisher.

“Students will work to make their blogging more vivid using the fundamentals of the craft, such as imagery, foreshadowing, symbolism, and viral paparazzi photos of celebrity nip slips.”

–McSweeney’s Internet-age writing syllabus and course overview

“JFK assassin8d @ Dallas, def. heard second gunshot from grassy knoll WTF?”

-The UK’s Guardian in an April Fool’s Day announcement that it would cease print publication after 188 years and go Twitter-only.

“There was nothing [in these newspapers] of remote interest [to] just about any sentient being. But that’s not what the paper’s editors were aiming for. The point is that there was nothing there that could possibly offend anyone.”

— Bill Wyman’s blunt, sometimes savage essay on Five Key Reasons Why Newspapers Are Failing

“I don’t know how to write an inverted pyramid story or even really what that is. I do know how to write for different platforms, be scrappy and break news. I’ve had zero important alum connections and never got an internship at a big daily. And, in hindsight, that’s probably the greatest stroke of luck I could have had.”

–BusinessWeek’s Sarah Lacy writing on TechCrunch

“As I rose through the editorial ranks of various magazines, I was encouraged to cultivate a mild contempt for readers.”

– MIT Technology Review Editor Jason Pontin in a prescription for saving print media

“The 500-year-old accident of economics occasioned by the printing press – high upfront cost and filtering happening at the source of publication – is over. But will The New York Times still exist on paper? Of course, because people will hit the print button.”

– Clay Shirky

“Newspapers are an important part of our lives, not to read, of course, but, when you’re moving you can’t wrap your dishes in a blog.”

-Stephen Colbert quoted in the Columbia Journalism Review

“There’s an enormous amount of vanity among journalists who forget that people buy newspapers not just for journalism but crosswords, cartoons, TV listings and indeed advertising.”

-Paul Bradshaw on Online Journalism Blog

“‘Jon and Kate’ for first mention, ‘Jesus, ENOUGH’ afterwards.”

@FakeAPStylebook, a Twitter-based parody that has quickly amassed more than 82,000 followers.

“Completion of a tower that will give Phoenix Sky Harbor International Airport controllers technology and visibility to monitor air traffic for the foreseeable future, settling a contract that will keep the controllers on the job and redefining air space corridors, are keys to the Valley airport’s future, Robert Sturgell, FAA deputy administrator, said Thursday.”

-Unattributed quote cited by former Baltimore Sun copy chief John McIntyre as an example of the tortured inverted pyramid prose that is driving readers to blogs

“It’s safer to make an outrageous statement about Saddam Hussein than to make a mild criticism of a local car dealer. It’s something newspapers don’t like to admit. It has always mattered who pays the bills.”

-Alternative weekly publishing veteran Jeff vonKaenel

“This is the thought of the day and this is where you put the thought of the day as if anyone has a thought for the day. And can’t work out what the hell is going on. But who knows what is happeningishness. – Jesus Mark 7:21-23 (Bible for Today)”

-Dummy copy mistakenly published as the Thought for the Day in Australia’s Advertiser

Images

The AP posted this photo of discarded newspaper racks languishing in a San Francisco junkyard. Updated: This was the consequence of a new city ordinance banning stand-alone newspaper racks. However, the image acquired particular power in light of the industry’s plight.

An ad created by the North Carolina Press Association to urge citizens to fight legislation that would allow local governments to post public notices on the Web instead of in local newspapers appeared to portray newspaper readers as old and technophobic.

Christopher Ave, the political editor at the St. Louis Post-Dispatch, isn’t a copy editor but he’s sympathetic to the pain of wordsmiths around the country who are falling victim to layoffs. He created this clever music video to dramatize their plight.

This monologue by a resident of Santa Cruz, Calif. testifying before the city council about, we think, vegetables, raises questions about whether as a population we can, you know, express stuff.

A 26-year old Berkeley musician named Jonathan Mann joined forces with the staff of the East Bay Express to come up with a solution to newspapers’ business problems. Wait till the end to hear it.

The Seattle Post-Intelligencer and the Rocky Mountain News took very different approaches to commemorating their final issues.

In one of the final feature stories in Editor & Publisher, which is closing after 125 years, Jennifer Sabba has an interesting dissection of the circulation experiment at the Dallas Morning News. That paper was one of the first to dig into the economics of circulation pricing in order to better understand elasticity. Newspapers have traditionally derived only about 20% of their revenue from circulation, but the wholesale collapse of categories like classified advertising has forced them to get creative. The Morning News is one of several newspapers have experimented with turning the screws on loyal customers to see how much more they would pay for a print product.

It turns out that pricing elasticity isn’t absolute. Research conducted by the Morning News found that readers were willing to pay more if they thought they were getting more in the bargain. Specifically, the most important topics they identified were national news, local news, business, state, sports and investigative journalism, in that order. “If the paper raised the subscription price but readers felt they were getting more content, the fall-off in volume would be around 10%. At the same price, if readers felt like they were getting less content, volume would fall by 40%.”

The Morning News responded by jacking up its home delivery prices an audacious 66% in one year. However, it also expanded its news hole and launched a free edition that’s distributed to about 200,000 homes four days a week. As a result, in the most recent six-month period, the paper reported one of the largest circulation declines of any major newspaper: 22.1%. But that may not be a bad thing for the bottom line. The paper is sticking with its pricing strategy in the belief that the overall business impact will be positive. That’s the philosophy executives at Hearst Corporation adopted with the San Francisco Chronicle last year. The Chron has hiked its subscription rate 63% in the last 18 months and seen circulation plummet. However, it has reportedly also stabilized a business that was losing $1 million a week in 2008.

Sabba’s story provides a new context for understanding the dizzying drop in newspaper circulation over the last few years. While the declines are troubling, they are at least in part voluntary as publishers shed unprofitable circulation and focus on loyal readers. This isn’t a long-term growth strategy, but print isn’t going to be a long-term growth proposition anyway. The thinking behind the strategy actually makes sense in light of the inevitable shift that news organizations must make from print to digital distribution. If there is a cash cow, then milk as much profitability out of it as possible while transitioning the rest of the business to a new economic model.

Debating Paid Models

Rupert Murdoch is apparently getting sick of being portrayed as an old fuddy-duddy who wants people to pay for information that should be free. So he’s taken his case to the Wall Street Journal. In a December 8 opinion, the News Corp. CEO says journalism is the foundation of a free society and blogger “theft” of the hard work of reporters and editors is undermining the value of quality information. Murdoch rejects suggestions that news organizations should become nonprofits as well as the possibility of a government bailout. “The future of journalism belongs to the bold, and the companies that prosper will be those that find new and better ways to meet the needs of their viewers, listeners, and readers,” he writes. But he also states that the economic future of the industry can’t be sustained by online advertising. Instead, readers must be convinced to pay a “modest amount” for good information. “The critics say people won’t pay. I believe they will, but only if we give them something of good and useful value. Our customers are smart enough to know that you don’t get something for nothing,” Murdoch says. Unfortunately, he provides no research or factual evidence for his belief.

Karthika Muthukumaraswamy has a thoughtful post on Online Journalism Blog about how to make paywalls work. She summarizes conventional wisdom that paywalls only succeed when the publication has content that has a high perceived value, usually for a focused audience. The problem with most news organizations is that they’ve been trained to make their information appeal to the broadest possible readership. So how do you change the mindset? Muthukumaraswamy suggests that the best course may be a dual track: continue to deliver broadly appealing information for free while analyzing traffic to determine where the high-value readers are. Then ask them to pay for access to that information. In that vein, “Steven Brill’s Journalism Online plans to charge only the most frequent users who seek very specific content while allowing cursory surfers to avail of most topical news for free.” Don’t demonize Google – she quotes research estimating that search engines can deliver about 50 cents a day of revenue per unique visitor – but don’t make it an either/or proposition, either. The key is to get focused on the numbers and seek your area of highest value.

Speaking of pay walls, The New York Times is mulling the online subscription option but isn’t tipping its hand about its plans yet. Senior Vice President for Digital Operations Martin Nisenholtz told the UBS Global Media and Communications Conference in New York City last week that there’s too much at stake to make this an all-or-nothing proposition. The company values its relationship with Google but is looking at the paid options employed by the Financial Times and the Wall Street Journal, as well as the possibility of just staying free. There is some evidence that the financial free-fall is turning around at the Times, and staff cuts that have trimmed 25% of the workforce could reestablish some stability.

Traffic figures are in for the first month of Newsday‘s bold experiment to charge a $5 monthly fee for access to most of the content on its website. Declines of 21% in page views and a little under 20% in unique visitors were within expectations, according to management. Year-over-year page views were down 35% and unique visitors off 43%, but that compares to unusually busy election year numbers from a year ago. Management isn’t saying how much of the advertising revenue decline was made up by subscription fees. Newsday‘s numbers also can’t be taken as a benchmark for the industry, since a provision of the plan enables the many Long Island subscribers to Cablevision’s Optimum Internet service to get access for free.

Miscellany

The Journalism Shop surveyed 75 former Los Angeles Times journalists and found that more than half believe the paper will not survive in the long term. Only one in six thought the Times would weather the storm that is buffeting the industry. The poll is hardly scientific, but it has some interesting findings about how the former staffers see their future jobs (more than a third expect to exit the profession entirely) as well as whether and how they believe journalism can survive. The generally dour findings show that the journalists believe the media is descending into a mud pit of top 10 lists and celebrity gossip.

Google continues to try to make nice with newspaper publishers while at the same time introducing new products that threaten their business. Editors Weblog points us to Living Stories, a Google Labs feature that aggregates news from around the Web and organizes it by content. The prototype uses content derived from a partnership with The News York Times and the Washington Post. The feature appears to be a modest evolution of Google News at this point, although there is certainly potential for more innovation. One neat feature is a timeline atop some of the news packages that tracks important milestones in the evolution of a story. According to a post on the Google blog, the content is being maintained by staffers at the two newspapers. Google continues to insist that it has no plans to get into the original content business. The blog entry also says the company will provide open source tools that news organizations can use to adapt the service to their own needs.

It appears the Associated Press has begun to turn the tide of customer defections that began last year when the service raised its rates. Some 180 newspapers canceled their AP contracts after the revised rate structure was announced, but now 50 have come back, although not necessarily under the full licensing plan. The Minneapolis Star Tribune is the latest to rescind its cancellation.

Perhaps all those fresh-faced young journalism wannabes who are flooding J-schools across the country right now know something we graybeards don’t. While there’s still plenty of legitimate hand-wringing going on over the collapse of publishing institutions, some media seers are beginning to see promise where others see peril.

David Carr’s essay in The New York Times last weekend is drawing considerable attention and well-deserved praise for its glass-is-half-full perspective. Carr, who put in his time at the traditional media watering trough, observes that the technology-enabled young journalists he meets these days increasingly see the collapse of hidebound media institutions as an opportunity to make a name for themselves based upon merit rather than survival. “The next wave is not just knocking on doors, but seeking to knock them down,” he writes. “Young men and women are still coming [to New York] to remake the world, they just won’t be stopping by the human resources department of Condé Nast to begin their ascent.”

We found ourselves nodding vigorously as we read this piece. Carr expresses no nostalgia for an industry that was built on the inefficiencies of traditional advertising that are now being Googled out of existence. Career paths that relied upon young journalists doing “marginal jobs for indifferent bosses doing mundane tasks” are being vaporized and replaced by a meritocracy in which the best may not only survive but thrive. We’re still a long way from the Promised Land, and it’s a scary world if your job security is based upon having outlasted everyone else, but it’s invigorating if you’re young, energetic and enabled with all the trappings of today’s technology.

New York City venture capitalist Fred Wilson agrees. “I believe the move from a velvet rope model to a meritocracy is a good thing and that the new media business we are building in the wake of the old one will be a better media business; leaner, faster, and controlled more by users than media moguls,” he writes. Amen. As sympathetic as we are to the many people whose careers and lives have been thrown into chaos by the collapse of traditional media, we continue to see a much brighter future once the wreckage is cleared away.

AOL to Automate the News

America Online, which recently announced plans to lay off a third of its employees, is breaking some new ground in the newsgathering field. The company plans to use automation to crawl the Web looking for stories that its visitors have indicated they prefer through their clicks and page views. The robot will then advise a team of increasingly dehumanized editors when and where to publish what it finds. AOL will also use its new venture, Seed.com, to outsource assignments to an army of (presumably low-paid) reporters and photographers.

It sounds impersonal and even a little creepy. The idea of building a new site based entirely upon the preferences of viewers strikes us as a little like the model at Digg.com, which generates boatloads of traffic, but tends toward stories about video games and loopy kids. Digg isn’t threatening to upend CNN.

Writing on FastCompany.com, Kit Eaton makes an interesting case for AOL’s actions creating a revenge effect. If social media is actually adding more of a human element to interactions between groups, does a service that removes much of the human decision-making make any sense? Eaton proposes that readers today actually expect more of the human element in their news coverage rather than less. Of course, we haven’t seen the AOL technology in action and human editors could tweak the parameters over time to make its selections look more like The New York Times. But we doubt it.

Miscellany

Last week we told you about a new daily newspaper that is being launched into the Detroit market, hoping to fill a void left by the reduced publication schedules of the two major dailies there. Well, the experiment didn’t last long. The Detroit Daily Press published just five issues before hitting “a bump in the road” and suspending further operations until the new year. The suspension was blamed on “lack of advertising, lateness of our press runs and lack of distribution and sales,” according to an announcement on the publication’s Facebook page. This sounds to us like more than just a pothole, but we hope the owners, who have courted this market before, can overcome their troubles and come back in 2010. Photographer Rodney Curtis offers an insider’s perspective. Having lost his job at the Detroit Free Press earlier this year, he’s now a double-dip victim of the industry’s troubles.

Some local television stations are now crowdsourcing the news assignment process. Broadcasting & Cable reports on stations in Milwaukee, Lancaster, Pa. and Little Rock that are opening their daily news budget meetings to outsiders through video, live blogs and Twitter. News directors say the experiment has been a mixed bag, since audiences that sometimes number over 100 can get stuck on gossip and minutia instead of general interest stories. However, they say the open-air meetings have also resulted in solid news tips, such as the WITI (Milwaukee) story on a father surprising his son at school upon returning from Iraq. The boy’s teacher had clued the station about the visit.

Add MediaNews and A.H. Belo to the short list of newspaper publishers who are considering joining Rupert Murdoch in his crusade against Google’s evil empire. Executives at both companies were quoted recently saying that they may withhold some paid content from Google’s search spiders. However, they indicated that they would not block access to free content. These statements are a minor blow to Google, which says it can work perfectly well with paid content and that publishers using paywalls need Google even more to make their content discoverable.

The Hopi Tribal Council has decided to close down the Hopi Tutuveni, which is the primary newspaper covering Hopi lands. The 6,000-circulation paper, which has been publishing since the 1970s, was called “ineffective” by one tribal Council maker and didn’t merit continued funding by the budget-pressed group.

It’s the end of an era, of sorts, at the Washington Post. The paper plans to close down its last three domestic bureaus – in New York, Los Angeles and Chicago – at the end of this month in a significant retrenchment that focuses on the Washington area. The move continues a recent trend toward embattled big-city dailies shutting down the remote offices as they attempt to go hyperlocal. David Carr quotes Post Executive Editor Marcus Brauchli as saying “We are not a national news organization of record serving a general audience.” The Wall Street Journal announced plans to close its Boston bureau last month.

The dismal circulation figures reported by the US newspaper industry a couple of weeks ago may actually have been optimistic. There’s new evidence that many publishers took advantage of recent changes to Audit Bureau of Circulations (ABC) rules to actually overstate their real readership numbers. The blogosphere is having a field day with this one.

The catalyst was this AP piece that points out that changes adopted by the ABC seven months ago now enable publishers to count “bundled” subscriptions of paid and online editions as two subscribers, even if only one person is doing the reading. This continues recent trends by the bureau to loosen rules and give its publisher customers more flexibility to pump up their numbers. In the spring of 2008, for example, the ABC made it possible for publishers to declare as paid circulation copies that sell for as little as a penny.

The AP story doesn’t pinpoint how many news organizations benefited from the rules change in the most recent reporting period, but notes that 59 newspapers counted at least 5,000 electronic editions in their weekday circulations. If those numbers were backed out, the record 10.6% drop in the most recent six-month period would probably have been even worse. The story cites several examples of papers that showed declines in print subscribers but were still able to post circulation increases by counting delivery of electronic editions.

However, numbers games don’t fool anybody in the world in which smart people with spreadsheets can quickly analyze them. As Mark Potts points out, “Fudging the numbers may make internal constituencies happy, but they’ll bite you in the long run. Advertisers can count, too.” In other words, you can slice the numbers any way you want, but it doesn’t count for a hill of beans if customers don’t come in the door.

Electronic editions are basically digital versions of the print product that readers can download for the sake of convenience, ecology or availability. Jim Brady tweets wryly, “Nothing shows that you ‘get’ digital more than trying to deliver it to people in exactly the same form it appears in print.”

The circulation gains are part of a broader campaign by publishers to distract people from the reality of plunging circulation and ad revenue. Scarborough Research released a much-cited report recently that documented that 74% of American adults read a paper in print or online during the past week. These statistics look impressive, but qualifiers like “adult” and “in print or online” color the numbers. The newspaper industry has largely lost the youth market and online distribution is a mixed blessing at best.

Publishers are playing numbers games of their own. Mark Hamilton notes that the industry has largely abandoned circulation figures in favor of research-driven readership numbers that report the number of people who have read or looked into a newspaper in the past seven days. These figures serve to buttress the argument that newspapers are still a core element of American life while obfuscating the fact that subscribership is down.

And even large circulation numbers don’t equal business success. Alan Mutter contrasts the circulation strategies of two Bay Area publishers: Hearst’s San Francisco Chronicle and MediaNews Group. The Chron has all but abandoned discount circulation in a quest to cut its operating losses and drive circ revenue to 45% of total sales next year. MediaNews is taking the opposite course. It has used aggressive discounting to become the most widely circulated publisher in the area. The combined circulation of MediaNews papers in the region is now nearly triple the Chron’s. MediaNews president Jody Lodovic calls his strategy a long-term view, but is junk circulation good for anybody? The Chronicle‘s strategy is to stabilize its business, which may be a more rational plan in an unpredictable economy.

Whatever the numbers, advertisers are speaking more loudly with their dollars. US newspaper advertising revenue fell by nearly 28 percent in the third quarter from $8.9 billion to $6.4 billion. If you extrapolate that out to a full year, the US newspaper industry has shrunk by nearly half since 2006, when it reported $49.2 billion in revenue. The AP quotes Newspaper Association of America (NAA) president John Sturm positioning the figures in the context of a dismal economy, but it’s hard to find any bright spots when even online advertising was off 17%.

Miscellany

All may not be lost for the East Valley Tribune, which earlier this month announced plans to shut down at the end of the year. The paper reported on Friday that an unnamed buyer has emerged who plans to keep the paper operating both in print and online. The buyer also plans to keep a “substantial” number of Tribune employees on the payroll. There were no other details. Freedom Communications, which owns the Tribune, has been seeking a buyer since early this year, but no serious offers emerge prior to a Sept. 1 bankruptcy filing. In fact, Freedom’s chief financial officer said one bidder offered to take over the business only if Freedom paid him to do so

Count Twitter cofounder Biz Stone among the army of skeptics about Rupert Murdoch’s plans to remove News Corp. properties from Google’s search index. Saying Murdoch’s scheme is likely to “fail fast,” Stone told a London audience that the Australian media magnate should instead focus on “how to make a ton of money out of being radically open rather than some money by being ridiculously closed”. He suggested that Twitter’s crowdsourced model offer some opportunities and that the company would be willing to work with newspaper publishers. Twitter executives also said last week that the service will soon announce a plan to start making money off of the estimated 60 million members it has acquired.

And Finally…

Ed Padgett pointed us to this clever music video by Christopher Ave, the political editor at the St. Louis Post-Dispatch who isn’t a copy editor but who is sympathetic to the plight of wordsmiths around the country who are falling victim to layoffs. The slick production, which looks like it was recorded in a newsroom, includes the following refrain:

I was there to fix your grammar
When you thought it wouldn’t matter
Cut all your extraneous blather down

AP Stylebook is my bible
Helped me stop a suit for libel
But nothing ensures my survival now

And I don’t know what I’ll do
After I am through
Killing my last adjective

Mallary Jean Tenore tells the story behind the video on Poynter Online. It has less than 800 views, so go visit it and add to its five-star rating.

After nearly losing its two daily newspapers a year ago, Detroit is actually adding one to the stable. The Detroit Daily Press will launch next week with daily newsstand distribution at first and home delivery scheduled to begin in about a month. This is actually the title’s second appearance; it originally appeared in 1964 and lasted for about four months before folding. The owners, who said they came out of retirement to take another shot at the Detroit market, plan to distribute 200,000 daily copies and charge a fraction of what their competitors charge for newsstand sales and advertising space.

Brothers Mark and Gary Stern say they have enough capital to make a go of it for two months and need 150,000 paying subscribers to break event after that. In light of that short timeframe, the quote in Editor & Publisher seems a little odd: ” “This is a permanent situation for us.” However, the brothers say they have raised private capital and have a much more efficient operating model that does away with unions and captive printing presses, so perhaps they have cash on hand to last much longer. The operation will employ about 60 people. It has recruited several veterans of the Detroit newspaper industry.

The Detroit market was roiled early this year when the Free Press and the News scaled back their home delivery operations to three and two days per week, respectively, in the name of saving costs. Few details have emerged on the financial success of the experiment. Both saw circulation declines in the first half of this year, but well within the average range for the industry

Local writer Isak Dinesen notes that the Stern brothers are Detroit natives and so may have an affinity for their local area. She also points to a Facebook page and online mockup (above) of the new title. The promotional language advertises “paper delivered seven days,” which is a direct reference to its competitors’ reduced schedule.

Miscellany

The question of whether readers are willing to pay for news appears to come down to how you ask the question. Alan Mutters tallies up recent research and finds that the percentage of Americans who say they’d crack open their wallets ranges from a low of 20% (Forrester Research) to a high of 53% (American Press Institute). The amounts vary widely, too. We’d suggest the wording of the question and the makeup of the sample group has a lot to do with the variations. That and the fact that Internet research is inherently unreliable. Forrester at least has been doing this for a long time.

Jeff Jarvis hits the nail on the head again with an essay about the new business model for news organizations. He observes that the cost model for a successful online title is about 10% that of a print property. In other words, there’s money to be made online, but requires the cost structure to be radically changed. The problem is that most newspaper publishers  can’t stomach the idea of eliminating 90% of their staff. Of the major metro dailies that have closed this year, only one — the Seattle Post-Intelligencer — has successfully shifted it is cost model to match the online revenue opportunities. Recent reports have indicated that the P-I actually is profitable online, although few details are available.

It isn’t human nature to shoot nine out of every 10 employees. So for many publishers, it’s easier simply to go under completely. That’s why Jarvis argues that bankruptcy is a bit of a magic potion. It’s an opportunity to get out from under debt, blow up the unions and completely restructure the way an organization works. Unfortunately, he correctly points out that those publishers that have gone through the bankruptcy procedure — which is most of them — have mostly failed to do more than trim a few expenses here and there. That isn’t going to save them; it will just postpone the inevitable.

The New York Times will end its Times Extra aggregation experiment in two weeks, about a year after launching the feature. The company insists that the decision isn’t a backtrack from the goal of aggregating outside content but rather than the content would now be presented within stories rather than on a dedicated site.

The New York Sun, a weekdaily that shut down a year ago, has been rejuvenated online. It will be resurrected for a 20-week run featuring crosswords from famous puzzle editor Peter Gordon for $1 per week. No word on whether management will decide whether to continue publishing the paper, but we expect that revenue will be an important factor.

BusinessWeek is reportedly set to lay off 100 people in the wake of its acquisition by Bloomberg LP. It appears that layoffs will be across the board, with employees who are in the line of fire being asked to submit resumes, news clips, and 250-word statements about their qualifications for continuing to work at the esteemed business publisher. BusinessWeek becomes property of Bloomberg on Dec. 1.

The Associated Press laid off 57 union workers, including 33 editors. The newswire is seeking to cut its personnel expenses by 10% by the end of the year.

Citizen journalism startup AllVoices will start paying professional journalists to cover beats, although the compensation is a meager $250 for now. The site has more than 200,000 registered members, most of whom contribute their work for free. AllVoices’ CEO Amra Tareen said the program is intended to recognize that these are “tough times for many journalists as news organizations downsize” and noted that reporters could earn more than the basic fee if their stories generate a lot of traffic. We profiled AllVoices last year.

And Finally…

Go to the basic Google home page and start typing a question. See what the Genius Google, in its near-infinite wisdom, thinks you’re asking when it provides all those “helpful” suggestions in a drop-down box. It turns out that certain kinds of queries generate amusing suggestions. For example, type “Is there any” (sans quotation marks) and see what Google suggests you really mean. (Okay, so we stole that from TheNextWeb.com.) Let’s get creative… Type in “why will” or “how come” or even “why is it that” and see what you come up with. The results are so strange that this feels like a big practical joke on Google’s part, but it does lend itself to endless experimentation.

Nearly a year to the day after announcing a radical strategy to cut back from daily to four-times-per-week frequency, the East Valley Tribune of suburban Phoenix is finally pulling the plug. Unless a buyer emerges with a reasonable bid, the paper will shut down at the end of the year, publishing its last print edition on December 30. About 140 employees will lose their jobs.

We’ve covered the Tribune’s twists and turns in previous entries, and there’s nothing particularly new to say about the situation. The Tribune has been operating under a cloud since it cut 40% of its staff and moved to free distribution a year ago. It has not been profitable in two years. The paper can still be saved if a buyer emerges within the next seven weeks, but owner Freedom Communications said no inquiries have been received that “we would remotely consider.” The Tribune traces its heritage back to 1891, when it was founded as the Evening Weekly Free Press. Its website has extensive reaction, a timeline and comments from the community.

Miscellany

The San Francisco Chronicle is going glossy. The beleaguered daily, which has been on thin ice since Hearst Corp. threatened to close it early this year, is making the unusual move in an effort to move its image upscale and appeal to advertisers as well as its core of older, affluent readers. Beginning Monday, the front page and many of the section fronts will be printed on higher-quality paper, although there’s disagreement about whether the paper will actually be glossy or simply a somewhat smoother version of newsprint. Huffington Post notes that the Chronicle has staged a comeback this year by hiking circulation prices and focusing on its core readership. It has even turned a profit some weeks, which is an accomplishment given that the Chron was reportedly losing $1 million per week at the beginning of the year.

The Chronicle’s strategy mirrors that of an increasing number of metro dailies, which are compensating for circulation declines by squeezing more circulation revenue out of its loyal customers. Circulation at the Chronicle is off more than 50% over the last eight years. The retrenchment isn’t a growth strategy, but it least it offers the prospect of financial stability.

That’s a short-term benefit, but the long-term problems may be worsening. The Wall Street Journal reports that newspaper publishers are scraping the bottom of the barrel in their cost-cutting efforts. With newsroom staffing down more than 40% in the US over the last eight years, there’s very little fat left to cut, Nat Worden notes. That means that revenue needs to start growing again. But it isn’t, and that means that publishers may be on the brink of an abyss. “It’s possible that newspapers are cutting costs to a level that accelerates the departure of their audiences towards other outlets,” says Fitch Ratings analyst Mike Simonton. In other words, a death spiral.

Alan Mutter throws water on the paywall concept, saying that publishers may be talking a good game but won’t have the nerve to pull the trigger and accept the loss of website traffic and its associated advertising revenue. He cites recent comments by executives from the Washington Post and the San Francisco Chronicle that indicate that neither believes paywalls are a viable strategy. Many publishers are intrigued by the prospect of charging for premium services, but they may have dug their own graves by hacking their workforces to the extent that there is little of value to offer. He also cites a poll of newspaper executives that indicated only half think paywalls have a chance.

While that may be a glass-half-empty perspective, Mutter points out that lack of unanimity on the issue is self-defeating. In other words, the strategy can’t work unless everyone is on board because the outliers will sabotage the whole equation.

That isn’t stopping MediaNews from pressing ahead, however. The publisher will test pay walls at two of its smaller newspapers beginning in the first quarter of 2010. The Chico (Calif. ) Enterprise-Record and the York (Pa.) Daily Record had been selected for the experiment, presumably because the downside risk is small. MediaNews CEO Dean Singleton said he has no intention of blocking free content from all his properties, but, “We have to condition readers that everything is not free.”

The Toronto Star plans to outsource about 100 editing jobs overseas, including copyediting and pagination. The move comes even as parent company Torstar reported a modest profit for the third quarter, despite a 12.6% plunge in advertising revenue. “We must find the best way to operate our business at the lowest possible cost, including contracting out non-core functions where there is a sound business case to do so,” wrote publisher John Cruickshank in a memo to employees. Offshore outsourcing has been a growing trend for the last couple of years, but job losses have mainly been confined to back-office functions. There’s no word on whether the Star may actually farm out reporting jobs, which are far more difficult to perform from half a world away.

It just gets worse and worse in the magazine business. The Associated Press is reporting that Time Inc. will lay off 540 people next week, while The New York Times says the publisher has informed the state of New York that 280 layoffs are coming in New York alone between now and the end of January. Time Inc. cut 600 jobs, or about 6% of its workforce, a year ago.

At least there are a few new jobs for those idle to journalists to apply for. Editors Weblog reports that the UK’s Bureau of Investigative Journalism is hiring up to 20 journalists as it seeks to spend a £2 million pound grant it recently received from the Potter Foundation. And The Wall Street Journal plans to hire a dozen journalists to staff up a new regional edition. Of course, the Journal also just closed its Boston bureau and laid off nine reporters

And finally…

“‘Jon and Kate’ for first mention, ‘Jesus, ENOUGH’ afterwards.”

“Stories about people who claim to have psychic abilities must always be written as though they aren’t liars, for some reason.”

“To describe more than one octopus, use sixteentopus, twentyfourtopus, thirtytwotopus, and so on.”

“The plural of ‘Pokemon’ is ‘vermin.'”

Those are just a few of the gems from one of the funniest new voices in the Twittersphere. Follow @FakeAPStylebook for more. Journalists will recognize the style of the tweets as being in the mold of the AP style book. Only the crew of 16 publishing professionals who collaborate on the tweet stream bring a deliciously twisted perspective to their craft. Mark Glaser rips the lid off the anonymous micro blogger, noting that the account has gathered 40,000 followers in just 15 days as well as a literary agent who wants to score a book deal.

Implicit in the hand-wringing over the death of news organizations (one guest on last week’s Hobson & Holtz Report podcast wondered if PR professionals should even bother tracking newspaper coverage any more) is the concern that good journalism will vanish from the Earth. We’ve always argued that the problem with newspapers today isn’t that they have no value, it’s that they no longer have a sustainable business model. The need for good journalism hasn’t changed but good journalism needs to find new ways to support itself.

Check out two new resources in this area. Jeff Jarvis articulates a future for journalists in an exceptionally cogent summary of his recent work with the City University of New York’s New Business Models for News project. Jarvis sees tomorrow’s journalists as entrepreneurs who create business models around selling their services to those who will pay for them.

We like the analogy to people who work on Hollywood movies. Studios don’t employ legions of camera operators and set designers. They hire that talent as needed for a project. Everyone comes together and works for a few months and then the team breaks up and goes on to other things. Lots of people make their livings that way. Some of them do very well. That’s the way things work in a competitive, entrepreneurial environment.

The skills that journalists will need to survive in this decentralized market are very different from the skills they need today. For one thing, young journalists won’t be expected to spend a decade toiling away for pocket change while learning at the knee of some cranky city editor. They’ll be able to make a good living much faster if they have the smarts and skills to compete.

Political skills won’t matter for much because most journalists won’t work for big organizations. Journalists will succeed or fail based upon the quality of their work and their ability to sustain mutually beneficial relationships with multiple employers. Social skills will matter more than political ones. Self-promotion will be essential. There’ll be less time spent in pointless meetings and bitching about the boss at the local bar because, well, there is no boss any more. Journalists will reclaim vast amounts of time that are now spent on organizational bullshit. They’ll spend their time making money instead of covering their asses.

Risky Business

This future is going to look scary to some people because there’s no job security or benefits. But who’s got job security anywhere these days? And benefits plans are being hacked to pieces as businesses downsize. In the future, working for an organization isn’t going to have many advantages over independence. There will still be company jobs for those who prefer them, but a lot of energetic and resourceful journalists will find that life is better on the outside. It’s amazing how productive you can be when you discard all the overhead of working in a big organization. Trust us on that. We left corporate life four years ago and have managed to produce three books and maintain two active blogs while still making a decent living.

Most journalists we’ve talked to are fine with this idea except for one thing: The thought of selling advertising terrorizes them. They have reason to be nervous. Most journalists we know would be lousy salesman (we tried it for a year and hated every minute) so it’s likely that business models will emerge to manage the business details for them. We told you about one of them – GrowthSpur – back in August, and there no doubt will be many others. As news organizations collapse and journalism opportunities disperse out to a million topical blogs and hyperlocal foundries, new ventures will spring up that aggregate opportunities and provide a variety of other services ranging from promotion to ad sales to accounting.

Read Jarvis’ essay for an optimistic perspective on the future opportunities for journalists. No one is suggesting this transition will be easy, but it will result in a market that is vastly more efficient than the one we have known. Journalism schools today should be training their students in the skills of small business management. Those that continue to preach the virtues of working one’s way up through a newsroom hierarchy are doing their students a disservice. Perhaps J-schools will evolve to become subspecialties of colleges of business. That wouldn’t be a bad thing; just different.

Thriving in the Free Economy

To hear some new ideas about how organizations can profit from the emerging free economy, listen to this Churchill Club podcast titled The Free Economy: How Companies Make Money From Giving Things Away. The panel was moderated by Chris Anderson (left), whose new book,  Free: The Future of a Radical Price, paints a picture of economic change brought about by the availability of cheap digital distribution. Anderson hosts a panel of entrepreneurs who are making money with businesses that give away all or part of their services for nothing.

Media-watchers are interpreting yesterday’s horrifying Audit Bureau of Circulation audit numbers that show newspaper circulation falling at an accelerating rate. Alan Mutter takes calculator in hand and figures that readership is at historic lows. “Newspaper circulation now is lower than the 41.1 million papers sold in 1940, the earliest date for which records are published,” he writes. In those days about 31 percent of the population read a newspaper. Today, it’s less than 13%.

Mutter’s analysis draws quite a few comments, several of whom quibble with his math. Martin Langeveld cites figures that are even more alarming than Mutter’s: In 1940, publishers distributed 118 newspaper copies for every 100 households. Today, the equivalent number is 33 copies per 100 households, down from 53 per 100 less than a decade ago.

Writing in the Atlantic, Megan McArdle chooses a blunt headline for her analysis: “This is the End of the Newspaper Business.” In her view, publishers are now at the end of their ropes. They’ve cut all they can cut and still put out a respectable product. The industry is in a death spiral. “We’re eventually going to end up with a few national papers, [most likely] The Wall Street Journal, the Washington Post, and The New York Times…But in 25 years, will any of them still be printing their product on the pulped up remains of dead trees? It doesn’t seem all that likely.”

McArdle’s predictions sound eerily similar to what we wrote more than three years ago in an essay entitled “How the Coming Newspaper Industry Collapse Will Reinvent Journalism.” We picked the same three dailies to survive but gave print only about 15 more years. We tried to place the essay in a few big dailies at the time but were rejected. Too implausible, the editors said.

In a release that served as a preamble to the ABC numbers, the Newspaper Association of America (NAA) provided some context for the circulation plunge. Its latest numbers reveal the impact of publishers’ recent efforts to tighten up on circulation in order to reduce churn and acquisition costs. As a result, newspapers are seeing “higher levels of subscribers retaining subscriptions, with subscriber ‘churn’ falling dramatically to 31.8 percent in 2008, compared with 54.5 percent in 2000.” Publishers are also raising single-copy rates and discounting more aggressively for subscriptions.

The NAA’s analysis is an important counterpoint to the hand-wringing that’s going on over the ABC numbers. At least part of the decline in US circulation is intentional. Publishers are cutting back on free distribution and deeply discounted promotions in an effort to make circulation a profit center. That’s good business sense, although it’s hardly a long-term strategy.

Miscellany

More local weeklies are closing.

• Oklahoma’s Midwest City Sun will shut down this week after nearly three decades, idling 10 employees.
• The Shoreline/Lake Forest Park (Wash.) Enterprise will print its last edition tomorrow and four other weeklies in the area will be combined into a single edition, appropriately named publisher Allen Funk announced. Enterprise features Andrea Miller editor puts the loss in human terms. “This leaves more than 65,000 people in north King County without a newspaper devoted solely to coverage of the communities they live in,” she wrote in a thoughtful e-mail to us. The Enterprise has be around more than 50 years and its lineage actually stretches back to 1904, she wrote in a 2007 history.

Last night was the American television debut of Stop The Presses: the American Newspaper in Peril, a 2008 film that claims to be the only documentary about the industry’s downfall. Directors Mark Birnbaum and Manny Mendoza interviewed “reporters, editors, media critics, journalism professors, students and newspaper readers to document the historic role of newspaper journalists as public watchdogs.” They also talked to many journalists like Ben Bradlee and Ken Auletta. It appears that the filmmakers are going to let their work trickle out through localized TV showings over the next year. You can buy a copy at prices ranging from $25 to $250 at AMS Pictures. Now that the vid has appeared on television, it will no doubt pop up online somewhere, but we would never point to a pirated copy. Just who do you think we are? Commenters are another story.

And Finally…

If you’re a newspaper history buff, have we got websites for you. Life just published a collection of classic photos involving newspapers under the banner of When Newspapers Mattered. It includes gems like the image below of Los Angeles gangster Mickey Cohen sitting amidst the newspaper headlines that galvanized his reputation as the kingpin of crime. Cohen and the Los Angeles media enjoyed a mutually beneficial relationship, as he sold a lot of newspapers. He and William Randolph Hearst were reportedly pals.

The Library of Congress is now also offering free access to a searchable database of dozens of daily newspapers stretching back to 1880. The service is part of National Digital Newspaper Program, a partnership between the National Endowments for the Humanities, the Library of Congress, and state projects “to provide enhanced access to United States newspapers published between 1836 and 1922.” Nearly 1.5 million pages have already been scanned. It’s unclear how exhaustively they’ve been indexed, but news buffs can view images like the front page from the San Francisco Call-Chronicle-Examiner documenting the earthquake of 1906 (below).

Circulation at major metro daily newspapers fell at more than twice the rate of last year’s record declines, although extenuating circumstances may be partly to blame.

Audit Bureau of Control (ABC) numbers released today showed that daily newspaper circulation plunged 10.6% for the six months ended Sept. 30 compared to the same period a year ago. Sunday circulation was off 7.5%. In the same period a year ago, average daily circulation fell 4.6%, while Sunday papers were down 4.9%. Only one newspaper – The Wall Street Journal – showed an increase in circulation and it was a meager .6%. It blew past USA Today to become the US leader in circulation as USA Today posted a 17% circulation decline, largely as a consequence of the loss of Marriott’s hotel-distribution business.

The New York Times was down 7.3% and its neighbor New York Post was off 18.8%. Both blamed extenuating circumstances. The Times has been pruning unprofitable circulation as it seeks to make subscription revenue a bigger piece of its top line. The Post blamed its plunge in part on an April, 2007 decision to double its newsstand price. The Post didn’t explain why it took two years for the price increase to show up in the circulation figures.

The figures may have also been impacted by recent ABC rules changes that tighten up the ability for newspapers to count bulk and sponsored copies in their total circulation. That doesn’t change the fact that this is the last news the industry needs to hear right now.

Paid-content advocate Steven Brill (right) has been busy defending his position lately. He squares off over the pay wall issue with visionary Clay Shirky on McKinsey & Co.’s website.  Shirky says forget about charging readers for content. They’ll pay only if the information is “necessary, irreplaceable and unshareable.”  The Financial Times can get away with charging for online access because people make money from the information they find there, but few outlets have the kind of audience demographics to do the same. On the sharability point, Shirky notes that preventing paying subscribers from sending interesting information to their friends goes against the grain of the Internet, thereby subverting the pay wall by its very nature.

Brill begs to differ. The point is not to charge everyone for access, he says, but rather to charge those people who are most committed to the product and are willing to pay. So a college newspaper could ask alumni to pay for a subscription in order to subsidize free copies for the students. Brill says he basically agrees with Shirky but thinks publishers should go after subscription revenue where they can get it. He resorts to that most annoying of branding tactics by inserting that little ™ symbol whenever he mentions his own products. We at the Death Watch™ just hate that.

Brill was also at an event sponsored by the Paley Center for Media that put him up against National Public Radio CEO Vivian Schiller, iconoclast Jeff Jarvis and media consultant Shelly Palmer. The most damning quote came from Vivian Schiller, who was previously general manager of NYTimes.com during the newspaper’s ill-fated TimesSelect experiment. The pay-walled venture “made $10 million, but I don’t think it was worth it,” she said. “Trying to force a change in audiences’ behavior is the fundamental problem I have with some of these pay wall models.” PaidContent.org’s David Kaplan notes that despite the debate format, the panelists really weren’t that far apart on the fundamental issues. All of them believe publishers need to find new ways to monetize their audiences. It’s just that most believe that charging for content that readers can find elsewhere for free is not the way to do it.

Bloggers Need Shield Laws

Writing on Media Shift, Clothilde Le Coz says a double standard applies when it comes to shield laws for citizen journalists. She notes that 37 states have passed laws that protect journalists from prosecution for failing to reveal their sources. Now there is a bill awaiting Senate approval that proposes to implement a shield law on a national level. The problem is that the bill defines journalists as people who work for professional media organizations. Bloggers are not specifically addressed in its language, which seems a rather blatant oversight these days.

Le Coz cites the 2005 case of journalist and blogger Josh Wolf, who was jailed for failing to hand over video of a clash between protesters and police during the G8 summit. Wolf spent a month in jail but was eventually released under the terms of California’s shield law. “Imagine what would have happened if Wolf wasn’t a journalist and couldn’t argue his right to protect his sources?” Le Coz writes. “He would have been forced to give up his footage and thus become an accomplice in the arrest of protesters.”

Blogger anonymity is a thorn in the side of many professional journalists, but the writer argues that it’s an essential tool for bloggers in some countries if they are to speak freely at all. Even in the US, the rise of citizen journalism as a legitimate complement to mainstream media would seem to argue for an extension of legal protection to those who happen to be on the scene when something happens and who report the details.

Miscellany

If you have a couple of hours to kill and want to trace the history of the Boston Globe‘s near-death experience at the hands of owner New York Times Co., PaidContent.org has a link list of its coverage in reverse chronological order.

USA Today‘s loss is The Wall Street Journal‘s gain. As the Gannett-owned week daily announced a plunge in daily circulation figures earlier this week, the Journal reported a year-over-year increase of .8%, making it the top-circulating US daily. The shift in industry leadership has more to do with accounting practices than actual leadership habits. USA Today attributed much of its circulation plunged to Marriott’s decision to stop distributing the paper free to all guests in its hotels. Meanwhile, changes in Audit Bureau of Control rules now permit the Journal to count more of its deeply discounted copies as legitimate circulation.

“We bought BusinessWeek to invest in it,” says Bloomberg Chief Content Officer Norm Pearlstine in an interview with PaidContent.org. The former Wall Street Journal and Time, Inc. executive says Bloomberg did have some reservations prior to its blockbuster acquisition of the struggling newsweekly, which was announced earlier this week, but that the financial publisher sees BusinessWeek as a tool to expand its reach into the executive suite. Bloomberg intends to invest in the magazine’s editorial staff and become a “true newsweekly,” meaning 52 issues a year and no games during slow times. Paid content.org has a history of the BusinessWeek sale in links.

Huffington Post is doing some pretty creative stuff with customization, reports Zach Seward on the Nieman Journalism Lab. It’s writing two different headlines for some stories and showing them randomly to viewers for five minutes. After that time, the headline that generates the most clicks becomes the default. Huffington Post is also toying with the idea of regional versions of its homepage that would serve up, for example, a different menu of stories to the lunchtime crowd in New York than to people just arriving at their workplace in Los Angeles.

After years of cutbacks and sales declines, the Dallas Morning News is fighting back by raising subscription prices and investing in better journalism. The seven-day home delivery rate just jumped 43%, making the Morning News one of the US’s most expensive metro dailies. The paper has also added pages, increased local news and sports coverage, expanded its recipe section and introduced a new feature in the business section. And it’s looking to hire five reporters. “We need it to continue to be profitable so that we have the funds to invest to make the transition…to digital,” says publisher Jim Moroney.

If you’re using WordPress for your blog (and who isn’t these days?) then be sure to check out this list of 85 WordPress plug-ins for blogging journalists. They include gems like BackType Connect, which pulls comments posted about you on other social media sites into your own pages, and Global Translator, which translates entries into 34 different languages. We’ll include a plug here for Apture, a utility that makes it drop-dead simple to insert links and media into posts without going through the tedious download and upload process. See our ham-handed application of Apture in the Wikipedia clip above. We’re still learning.

And Finally…

Ninety-three percent of all newspaper sales “can now be attributed to kidnappers seeking to prove the day’s date in filmed ransom demands,” reports The Onion in a hilarious spoof on the industry downturn. It seems that evildoers just can’t get enough of “the smell of ink coupled with the mildew odor of a windowless basement.” Publishers are seizing the opportunity to cater to this influential audience by targeting advertorials and special sections devoted to ski masks, abandoned warehouses and industrial meat freezers.