Posts about norg

The dark cloud inside the silver lining of the dark cloud

The New York Times tries to find some good news in the newspaper industry’s dreadful circulation report but moments later, I see a Poynter analyst at Journalism.org blowing the foam off that latte.

Says The Times:

For starters, those circulation figures may not be as dire as they sound. A “significant portion” of the drop “results directly from the industry’s long-term, and arguably long-overdue, initiative to eliminate inefficient vanity and promotional circulation,” writes Allen Mutter on his blog, Confessions of a Newsosaur.

That means newspaper companies are cutting out discounted subscriptions, free papers at hotels and delivery to far-flung locales, none of them particularly appealing to advertisers and increasingly seen as not worth the cost.

Counters Poynter’s Rick Edmonds (my emphasis):

Yet there’s more to the story. [The Audit Bureau of Circulations] further breaks down paid circulation into categories of “over 50 percent” and “25 to 50 percent” of the paper’s cover price. [That is, highly discounted sales – jj] Merrill Lynch analyst Lauren Rich Fine plugged in those figures for a sample of the mid-sized and large papers of public companies and the results were clear: even these losses reported to ABC were achieved with a lot of deep discounting.

In other words fully paid circulation is typically falling even faster than the overall totals reported this week. Apparently, newspaper companies trying to bolster the numbers either pushed deeply discounted introductory offers at readers or extended discounts they were already offering many subscribers rather than trying to convert them to fully paid.

Suzy Sunshine Times:

Just as the lackluster circulation numbers were being dissected, the Newspaper Association of America released the results of a study it commissioned showing that when Internet readership is counted, the newspaper audience is actually way up — nearly 8 percent over all from February 2005 to March 2006.

Chicken Little Poynter:

A closer look at those numbers, however, underscores the difficulty of the industry’s current business dilemma. If you divide that monthly total into a daily one, there were roughly 1.9 million people visiting newspaper web sites each day in September. By the same calculation, the average time spent online would be about 1.4 minutes per day. (A recent NAA/Scarborough study estimated that the typical reader spends a little less than 30 minutes with the daily edition of the printed newspaper and more than 45 minutes on Sunday.) Those numbers may not be big enough to really make up for the loss in circulation.

Also, note the irony of The Times complaining:

Cluttered, hard-to-navigate newspaper sites proliferate. And many sites force readers to register, which Internet types say is counterproductive, when those readers can so easily go elsewhere for their news.

If you’d like to read the rest of that story, you will, of course, have to register.

: Newsosaur now punctures a hole in the aforementioned latte cup, pointing out that time spent on newspaper sites compares badly with other sites:

But the 41 minutes spent at newspaper websites in a month is fully 40% lower than the average 1 hour and 40 minutes that visitors linger at the 10 busiest web sites in a month, according to traffic statistics compiled by Nielsen/NetRatings in April.

: And while we’re on the subject of gravity and newspaper circulation, NewsDesigner does a great job of charting circulation against the timing of redesigns. I believe this project was partly inspired by a good post Jay Small wrote arguing that papers are overinvesting in design. As one of the commenters there says, it would also be useful to chart papers that have not had redesigns. But in any case, this demonstrates that redesigns are no cure for what ails papers. As another commenter there said, “We need a new boat.” Or to mix that metaphor: The lipstick ain’t doing it.

The outsourced newspaper

The Daily Express decides to outsource its business section to the Press Association, the UK wire service (its Associated Press), cutting a tenth of the paper’s 350-strong staff.

It makes sense, as far as it goes. When I was Sunday editor of the New York Daily News, I worked to outsource our TV grids and book. Papers have long since done this with financial tables. Why not whole sections? If I ran a chain like Gannett or McClatchy (no thanks), I’d consolidate or outsource all kinds of editing. Yes, it makes sense on paper.

But what about off paper and online? There, if you don’t want to go to the expense of having a business section, if it’s not core to what you do, then you can link to one. And that forces you to decide what is core. What is it that just you can do and that can’t be outsourced?

When you’ve answered that question, then, finally, you’ve decided what your news organization is really all about.

Trimming newspaper fat v. meat

After Howard Kurtz issued what I characterized as the common, kneejerk newsroom response to threats of cutbacks — oh, woe is journalism; ah, what will become of investigative reporting? — many of us piled on to say that newsrooms are bloated and need cutting — or more to the point, need to cut the crap so they can focus on what matters. Kurtz responds , quoting Jack Shafer and me and saying:

Not to spoil a good food fight, but I don’t disagree with any of that. Some newspapers are overstaffed. Not all budget cuts are bad. Not every newspaper in America needs to have a reporter covering the White House, or London, or attending political conventions and writing the same pap as everyone else. What’s more, lest they suffer the fate of General Motors by churning out gas-guzzlers, they need to move more boldly into the digital age, which probably requires smaller newsrooms than in the past as print circulations decline.

Here comes the ‘but’ . . .

But many of the corporate executives ordering these cuts don’t care about finding innovative ways to cover the news; they just want to please Wall Street by getting the payroll down.

But shouldn’t it be up to the editors of these newspapers to find those innovative ways to cover the news and to help the institution and its value survive the transition to the new world? Instead, we see editors stomping their feet, refusing to cut back as if there is no need to, as if it’s just some big, bad, greedy biz guys — instead of a post-monopoly market reality — forcing them to fire. Kurtz continues:

Investigative reporting doesn’t just mean maintaining separate SWAT teams. Beat reporters do important digging all the time, but that requires having a few extra days or weeks to pursue leads and pore over records. If, in depleted newsrooms, they have to churn out copy every other hour, the chances that they’ll look into the mayor’s land deal or the congressman’s favors for big contributors are greatly diminished.

But who says that kind of reporting is what should be depleted? If editors have the good sense and foresight to get rid of what’s not needed, they can put their resources where they matter: into reporting. And they can also find new ways to report. Kurtz:

Newspapers — good ones, at least — do two things that, if their staffs shrivel, no TV station, Web site or blogger will be able to match. One is to provide detailed local coverage of schools, hospitals, zoning battles and town councils. The other is holding public officials and business executives accountable with aggressive investigative work.

No one is saying that bloggers will replace journalists; let’s eliminate that red herring from the playbook. But bloggers can help. And the truth is that most metro papers and many local papers do a terrible job covering local schools and town councils; bloggers and other cooperative efforts in networked journalism could, indeed, increase a paper’s coverage as never before possible. And as for investigative efforts: Yes, we need more. Yes, we need reporters doing more. But here, again, when you open up to help, you may be able to report in new ways. Witness the Porkbusters, et al outing of Senators Byrd’s and Stevens’ secret hold on Congressional accountability legislation. I’m not saying that will replace investigative staffs but it can help, if you let it. Kurtz concludes:

They are also tradition-encrusted places that need to become less cautious, less stuffy and less arrogant. But if the critics think that a starvation diet will somehow produce healthier reporting, they are fantasizing.

The fantasizing we see in in newsrooms that believe newspapers can and should continue with business-as-usual, that newsrooms need to be as big as they are to get their real job done, and that they are doing a good job now.

I continue to believe that cutbacks will force newspapers to decide what they really are. The brave, wise, and strategic editors will get rid of the crap and invest more in the kind of reporting Kurtz properly celebrates. The wussy, job-protecting editors will do just what we see them doing: whining.

: At the end of Kurtz’ response, a bold headline said, “End of discussion.” That took me aback. Cheeky, I thought until I saw that it was the subhead over the next item. This discussion is far from over.

: See also the response of Jeff Crigler of Voxant.

Your customers are ahead of you

The Newspaper Association of America reports a surge in online traffic and audience to newspaper online sites.

On average, over 56.9 million people visited newspaper sites each month in Q3 2006, up almost 24 percent since Q3 2005. . . . The group earlier this month reported unique visitors to newspaper sites rose 31 percent during the first half of 2006 over the same period in ’05. Unique visitors to paper sites averaged more than 55.5 million per month during the first six months of ’06, up almost a third from the 42.4 million during the first half of last year. Newspaper sites generated 2.7 billion pageviews in the third quarter, and visitors spent more than 41.5 minutes each month on the sites, according to the report. During that period last year, visitors viewed around 1.9 billion paper pages, spending 40.4 minutes on the sites on average monthly.

I think this further feeds the idea that newspapers are in “free fall,” as The Times said last week: The rush online is getting faster and faster and if media execs and ad execs don’t catch up, they will be left behind… sooner than they think.

: I call out ad execs for a reason: They are holding back the progress in media. Oh, it’s the fault of media execs as well. But get a load of these stats from today’s Times:

Indeed, the Internet draws only a sliver of the total spent on advertisements. Last year, Internet ads accounted for just 4.7 percent, or $12.5 billion, of the $267 billion spent on advertising, according to the Interactive Advertising Bureau, a trade association of online publishers. And the top 50 advertisers spent just 3.8 percent of their budgets in the first half of this year on online ads, excluding search, TNS Media Intelligence data shows. For all other advertisers, the average spent online was 6.8 percent of the budget.

Procter & Gamble, the nation’s biggest advertiser last year, spent $33.5 million — less than 1 percent of its $4.6 billion ad budget — on online ads in 2005. General Motors, the second-biggest advertiser, spent $110.5 million online, or 2.5 percent of its $4.35 billion total, according to TNS, which does not include search ads in its figures.

The essential change in media is that we, the people, won’t go to where you are anymore. You have to come to us. And you’re not.

: LATER: The latest circulation stats for newspapers continue to back up the notion of free fall. Romenesko’s summary:

* Los Angeles Times daily circulation dropped 8%; down 6% on Sunday.
* San Francisco Chronicle dropped 5.3% daily; down 7.3% on Sunday.
* New York Times dropped 3.5% daily; down 3.5% on Sunday.
* Boston Globe dropped 6.7% daily; down 9.9% on Sunday.
* Washington Post dropped 3.3% daily; down 2.6% on Sunday.
* Wall Street Journal dropped 1.9% daily; WSJ Weekend Edition down 6.7%.
* Chicago Tribune dropped 1.7% daily; down 1.3% on Sunday.
* USA Today dropped 1.3%.

The media infrastructure implosion

We are about to see an implosion of the expensive and outmoded infrastructure of media: the presses and trucks of news, the production priesthood of TV, the money that goes to everything but the information and creativity that really matter. This is good news.

On the way to one of three meetings I happened to have this week with people who are starting new, lightweight networks — because the internet lets them — I walked by a location shoot for a TV show. We see them all the time, we jaded New Yorkers, and so we’re never amazed. But what does not cease to amaze me is all the stuff it takes — or they think it takes — to shoot a show: trucks filled with lights and cables and plugs, handcarts filled just with the director’s chairs with stars names on the back, bins overflowing even with wooden boxes with the Paramount logo on the side, assistant directors running around trying to act more important than the snotty gophers they are, catering trucks with expensive caterers: expense everywhere.

Do they really need all that to shoot three minutes of obvious primetime drama? Of course, they don’t. Studio and network executives have lamented the cost for a long time, but they haven’t been able to change it. That’s how TV is made — or that’s how the priests of the TV tools told us it is made. But with ratings and now revenue facing merciless shrinkage, the networks will attack this cost structure. The first, stupid response was to invent stupid, cheap, reality shows: NBC’s answer to its declining economics was to declare defeat at shovel us shit at 8 p.m.

I predict that one smarter network will soon discover a show made cheap, handheld cameras, no location trucks, no gaffers, no ADs, no caterers, and no numbing studio structure but lots of creativity and passion and independence: a show made by one of those three ventures I met with this week. That show will go on the air and be a hit, not because of how it is shot but because of what it says. The networks will discover that they can get quality TV that is still popular — not as popular as the blockbusters of old, yes, but popular enough to be profitable so long as the costs are low. That will be great news for the creative class, because it will lower the barrier to an audience. And that will be good news for us, formerly known as the audience, because we’ll see TV that is valued for its creativity over its infrastructure.

And then a lot of those location trucks and all the expensive stuff in them will go into mothballs with battleships and propeller planes: relics of old technology.

We’ll see the same thing happen in TV news: See my tale of three tapes, how I could get the same message across as a CBS News segment with nothing but a Mac, how quality can even improve with three-camera HDTV shoots but with low cost and no priesthood. This week I also went to a show by the National Association of Broadcasters and I wandered around the floor looking at more expensive equipment thinking, your days are numbered. Same thought went through my head as I wandered the floor of the Folio magazine show: Knowledge doesn’t need your gadgets anymore.

And we’ll see it happen in newspapers: See yesterday’s post about the “free fall” of the newspaper industry.

Let me repeat: This is good news. This means that we can eliminate incredible costs — and with them, the bureacrats and time-wasters and creativity-killers they support — in the making of media, both news and entertainment. This means that we can rediscover what these media are really about, what makes them valuable, what makes them good: We don’t define quality by the number of sound guys or gaffers or producers or assistant managing editors, they do. We define quality by substance and value and creativity. And it’s high time we return to those measures of media.

This is why I find it so disingenuous and dangerous for media executives, especially editors, to defend the old cost structures as if that defined their quality and value. That means they don’t understand their own value. It means they will help destroy that value by stubbornly holding onto those costs. Be honest: newspapers, TV networks and stations, studios, magazines are filled with waste and we should be grateful to have the chance to peel away those stinky layers of onion and get back to what we’re really about: informing or entertaining or connecting. And if the clumsy old big guys don’t learn that lesson fast, us nimble new little guys will steal their stage.

But I think that the survival instinct of smart media executives will kick in and I think we are going to see a rapid implosion of the old infrastructure and hierarchy and priesthoods of the tools in old media. Media are about to go on a crash diet.

Sell! Newspapers ‘in free fall’

In the continuing parlor game — “What would you do with ____ [fill in media organization here]?” — I’ve been asking people what the brash, bold, ballsy thing they would do. In newspapers, I’m hearing three such options:

1. Sell. Fast. Find some local egotist who wants to be a publisher and get the hell out of town. Today, Jack Welch is reported to be interested in buying the Boston Globe (see more grisly details in the Wall Street Journal). I’d take him out for a very drunken dinner and get him to sign on the line before it’s too late. The advantage for the seller is that the hell is over. The problem if you care about journalism or the community is that they will descend deeper into hell. Witness what is happening in Philadelphia now: The new owner of the paper is suddenly discovering that the business is shrinking and he’s better shrink it faster if he’s going to pay off his loans. Oops. Note well that the Times story said that the newspaper industry “appears to be in a free fall/.” Yow. [Disclosure: I still consult at The NY Times Co., but you can bet it’s not about strategic asset sales.]

2. Get out of the printing business and into the news business. I’ve heard more than one exec suggest trying to offload printing and distribution and concentrate on the real business of news and advertising. That doesn’t change the P&L much; you’ll have to buy those services so long as you are tied to a physical product. So it’s no cure for the business. But it gets rid of certain obligations and liabilities and makes other options easier — like selling the thing.

3. Give it away. A few weeks ago in the Guardian, a former newspaper editor made back-of-the-envelope calculations to argue that giving away the paper makes sense because it reduces marketing costs and increases circulation and ad revenue (while also increasing paper costs) but that the real value is that it would force the organization to stop protecting the paper and to drive people online. I like that in theory. I’ll be no one will have the balls to do it.

Note that I did not list going private. At best, that merely puts off the inevitable. See Philadelphia. Nor do I buy the argument that newspapers should become beneficiaries of not-for-profit foundations. That, too, is just an attempt to shield the paper from reality.

I am not ready to give up the idea that news is commercially viable. It is. News is getting bigger than ever. It’s just run with terribly inefficiency by the old guys. With a fresh start, news can and should be a viable business. See Netzeitung.

No, you have to do something brash, bold, and ballsy to drive the paper to its future. Anything else is as good as giving up.

: See also Will Bunch at the Philadelphia Daily News: “And so I’ve never been more pessimistic about newspapers than I am today.”

: And see this from PaidContent:

Merrill Lynch analyst Lauren Fine came out with a report today on the state of the newspaper industry, and wrote that even as online rises in importance, but still small overall. “Although online now represents 6-7% of newspaper ad revenues on average, the proportion is still small overall. Even if we assume double-digit growth for online ad revenues through 2012 and then 5% thereafter, while print ad revenues drop by 1.5% annually, we do not see online representing over 50% of total newspaper ad revenues until more than 30 years from now. (Of course, we can get there sooner if print declines faster.) In terms of EBITDA, even if we assume 50% margins for online ad revenues and 25% for print (but declining slightly every year), a back-of-the-envelope calculation suggests that industry EBITDA will be flattish for the next 20 years, supporting our assumption of flat to slightly declining perpetual free cash flow for the industry.”

Well, I’d assume a faster drop for print. But I’ll also say this represents the essential problem of the industry: They think they can maintain (or grow) their monopoly-supported margins and cash flow. They can’t. News operations will have to be smaller. That doesn’t mean they have to be unprofitable. But bloat is out.

: And see Jack Shafer’s very good column today questioning the holy writ in newsrooms that more bodies means better journalism and questioning the even holier gospel that investigative journalism is the great protector of democracy.

However appalling newsroom downsizing may be for journalists, it will ultimately reveal what the people who run and own newspapers really think their publications are for. Scratch a serious reporter, and he’ll offer volumes about the “public service” his newspaper performs in the form of investigations: It watchdogs government. It keeps corporations honest. It uncovers the dastardly deeds of foreign dictators and prevents genocide. It exposes quacks and charlatans. (It turns the common man into a Socrates if he reads the editorials!)

Newspaper people have enormous egos, if you get my drift, and don’t mind massaging the big hairy things in public. Yet the press is hardly the sentry and bulwark of society reporters imagine it to be.

: But here a much calmer newspaper publisher, Carolyn McCall of the Guardian (which is owned by a trust), speaking in London. Three of her five points for managing the digital transition:

3. Innovation must be used for learning purposes. Newspapers can’t be afraid to fail. They must experiment and take risks to see what works. McCall mentioned the Guardian’s blog experiment, Comment is Free, which has proven a huge success with hundreds of contributing bloggers and dozens of comments on each post.
4. Software developers are now just as important as your journalists, an insinuation that would have been mocked only three years ago.
5. Newspapers must drive digital revenue growth.

[Disclosure: I write for and very occasionally consult for the Guardian.]

Killing the crap to save the news

Howard Kurtz — and most of the newspaper industry — is getting it wrong. Kurtz laments cutbacks at newspapers, fearing it will cut investigative reporting. I think what he should lament is the refusal of newspaper editors to wake up and smell the latte: all the wasted froth that squanderes their budgets. The newspaper has to learn what its real value is and that is, indeed, reporting and its editors have to stop defending raw numbers of bodies. They need to boil themselves down to their essence and they haven’t had the courage to do that yet. Stop wasting money on commodity news, ego, and fear and start investing it in reporting again.

: Roy Greenslade agrees to disagree with Kurtz:

Without wishing to be unduly rude about US journalists, seen from the British perspective, it appears that there are far too many of them being far too unproductive. The LA Times has 980 journalists at present, a huge staff compared to any serious British national paper. Yet we manage to hold our government to account. Ask Tony Blair is he can get away with anything without being scrutinised.

Now, I’m fully aware of the different journalistic cultural differences between us and them. I’m certainly not urging that US newsrooms should be cut to the quick. But it appears to me that there’s been a lot of feather-bedding on big monopoly metro papers in the States and the current crisis is providing an opportunity to hack away the hacks who do not contribute. Kurtz concludes: “If this erosion continues, it would be bad news for serious journalism, and good news for corrupt politicians.” But Howard, please get this into proportion. There’s a revolution going on and we need to think positively about that.

Amen, brother bombthrower.

And here comes Juan Antonio Giner with a lit fuse:

Of course … you need journalists, but for what?

To re-package the same news from the same sources?

To attend the same boring press conferences?

To publish today the same news that our readers knew YESTERDAY?

To produce pages and pages of commodity information with no value added?

To edit pages and pages of listings that could go directly to our web site?

To attend long and badly planned news meetings?

To expend hours and hours in front of our computers?

To work with not real feed-back from your editors?

To work with no time to think?

The real challenge in our industry is not how many people do we need, but to know how to change the rules and traditions of a newsroom management system that does not work anymore.

Firtst fix the newsroom management system, and then let´s discuss how many people do we need.

And then we will not have any problem to keep or find the best talent.

Today´s problem is the opposite: newspapers are loosing or not attracting talented people because our newsrooms are not creative places to work, to discuss, and to dream.

I am not about the people that leave (many of them with great early retirement packages) but about the people that stay in our newsrooms to work under the same conditions.

It is vital — for the survival of news(papers) that we have guts enough to rediscover our real value and essence and build from there. Cutbacks can help.

I think you begin by deconstructing the newspaper.

Bad news

Just piling up the bad news for newspapers this week:

* Newspaper circulation continues to clog: “Industry sources who have seen the numbers tell E&P they anticipate that for the six months ending September 2006, top-line daily circulation will fall roughly 2.5% while Sunday will drop approximately 3%.”

* Newspaper advertising is declining: “Earnings from three big newspaper companies — Tribune Co., New York Times Co. and Belo Corp. — provided more dramatic evidence that print-advertising revenues have gone into decline after a long period of low growth. All three posted lower newspaper-advertising revenue in the third quarter compared with the year-earlier period, echoing results from most of the companies in the industry that have reported earnings in recent days. . . . Results in recent days have reinforced gloomy predictions coming from some analysts. Last week, Merrill Lynch cut its newspaper-ad revenue forecast for this year to flat from 1.2% growth and revised its 2007 forecast to a drop of 1.5%.”

* Those who thought they were saved from conglomerates and profit margins when they were bought by local owners were fooling themselves. Those papers are laying off: “The new owners of three former Knight Ridder newspapers announced layoffs, expected layoffs and abrupt changes in management yesterday as they painted a bleak outlook for the newspaper industry. . . ‘Newspaper publishers and owners across the country are saying that this has been the worst 90-day stretch that they have ever seen in the business,’ Mr. Tierney wrote. ‘They also universally believe that this reduced revenue picture will be a permanent part of the future of newspapers.’ ”

* There’s upheaval all over: NBC News cuts back. The Chicago Sun-Times appears to be for sale. The Toronto Star ousted its editor and publisher. Liberation’s future in France is in question.

That’s just one week.