Placing the blame for newspapers' 900-job loss this week

The Recovering Journalist blog has a sobering post up for anyone connected to the newspaper industry, noting that the total amount of jobs targeted for elimination this past week by major newspapers reaches above 900 positions.

I've been telling friends that being a working newspaper journalist -- and entertainment critic -- feels more and more like being the last penguin left on the ice floe. This morning, a friend and fellow journalist told me he doesn't read the industry blog Romenesko any more because it feels like looking at a roster of the dead.

This was never more true than this past week, when the industry learned of job cuts at the Baltimore Sun (100 jobs), San Jose Mercury News (at least 17 jobs), Palm Beach Post (300 jobs), Boston Herald (160 jobs), Daytona Beach Journal (99 jobs), Hartford Courant (57 jobs), Detroit newspapers (150 buyouts targeted), and more. See an interactive layoff map here and here.

But then blogger Mark Potts goes on to blame this mess on newspapers' complacency, citing -- among other things -- the fact that newspapers have provided their content for free on the Web for many years. And this is where I have to part company with the Recovering Journalist.

Because those of us who have been watching this meltdown in real time know what is truly happening; every source of revenue feeding newspapers is crumbling, either because of the country's massive recession or because of digital technology. And no one in the industry has figured out how to stop it or find a new source of revenue large enough to plug the hole.

Declines in real estate, the auto industry, the airline industry and the retail industry have decimated our advertising market. Craigslist and similar free online advertising services have stolen away our lucrative classified ad business. And fewer people have time for the newspaper, which is depressing our circulation numbers.

When I hear people argue that newspaper didn't innovate soon enough, I never hear anyone propose an innovation that would have actually kept any of this from happening. It is easy enough to say newspapers should not have put their content on the Web for free, but the recording industry found out the hard way how difficult it is to make people pay for anything they can get free online, even illegally. And records have always cost more than a daily newspaper.

The problem newspapers have is that we have indoctrinated our customers for years to value our news product well below what it costs to create it. We used advertising revenue to foot the bill, and now that revenue isn't enough.

So tell me, folks who are criticizing newspapers, how do we find another source of revenue big enough to plug that hole, when even now, advertisers will only pay one-tenth the fee for an online ad that they would pay for a print advertisement? 

 

Comments

[scott]

Gee. maybe if news told the truth all of these years instead of selling 'stories" and half-truths, people woulnd't be flocking out the door...afterall, they aren;t nbecessarily going elsewjere, they're just not paying attention to the lies amd hype any more.

[mark jump]

I think you need to address the archaic views of newspapers in a changing environment and the unwillingness of most media management to make the changes that are inevitable.

1. Give up trying to be a major metro daily that "covers the world" and go back to providing purely local content to local readers - which you cannot find online in almost any mix. Niche papers aimed at geographical targets that have a blend of online and printed content will still make money, but as long as "major" newspapers refuse to cover "ALL" the local news first, they are destined to pour money into a dark morass. Where is the indepth coverage of local government, local education, local business, local activities, local sports. Not in any paper with a circulation higher than 50,000 as they still strive to print the next Pulitzer and fail to provide a service to the readers concerning what they want to read and see.

2. I don't feel the Times is in this quaqmire, but as long as media companies are publically owned, they will not serve the local readership first as their first stated priority is to provide a profit to stockholders. I find it an aboration that every major media company is reducing staff and cutting services to satisfy the whim of stockholders who demand growth every year. What about the needs of the public to be informed by those sworn to do so - or so they state in probably every single mission statement that seems to get thrown out the window for the sake of profit.

3. I understand fully that print, tv and online news organizations must strive to operate as a business and a business needs to make a profit to be sustainable. After 30 years in the industry, I understand. What I am waiting to see is which major paper will "blink" first and try to forge forward in a new era that truly combines the strength of all media outlets and to serve a local environment. Why not "bury" the national news inside and make the local content the focus of the product. I can find out what is going on in Iraq faster and better through other media outlets that have more knowledge and more resources. Why run AP copy that is regurgitated in every news outlet in the country. Tell me what is going on in my neighborhood first that I need to know and how it affects me.

[Robin 'Roblimo' Miller]

Five or six years ago I asked about having our NewsForge tech news site (since merged into Linux.com) join AP. Nope. Online pure-plays were not welcome.

Guess they're changing their minds now, eh?

Of course, with the advent of RSS feeds, plus our automated feed-selection system, we no longer have any interest in joining AP or any similar group.

RSS has essentially made AP obsolete.

[Jim Johnson]

Here's a great Wall Street Journal story about the AP ... and why I think newspapers should disband it.

http://online.wsj.com/public/article/SB121444598979205887.html?mod=blog

[Jim]

I don't think having "free" content online is contributing to the death of newspapers. For example, I do not subscribe to a newspaper anymore, but I visit this site frequently for news. In fact, I think at this point, newspapers would be crazy to charge for online content. That being said...

I think one source of value is the incredible archive of articles going back to the 1800's. I think this vast material could be a revenue stream if newspapers put this material online and charged for it instead of using labor intensive Microfiche at the library.

Also, frankly, newspapers at some point will have to cut back on how many papers they print and begin to move everything online.

But it doesn't help that many papers, including the 'Times', have resorted to cutting story length and using tabloid headlines to fill your pages. That may be the biggest mistake of all.

[Robin 'Roblimo' Miller]

I work for a 100% online company -- http://sourceforge.com -- and we pull an okay profit from advertising + our ecommerce division ( http://thinkgeek.com ). Our ad revenues are up this year, and were up last year over the year before, too, so obviously money *can* be made delivering news over the Internet.

Now here's something funny for you: Even though we are "successful," our board of directors has consciously decided that we will *not* be profitable for the next few quarters, possibly for as long as the next two years. Rather, we're collectively and corporately working to provide new and better services to our readers/users AND to our advertisers. We're investing in our future, you might say, by expanding and improving.

We may even take a whack at local news -- or at least try a group of regional tech news sites, then let them become more granular geographically if it looks like our users would appreciate that -- and it looks like they can generate enough (and targeted enough) traffic to be profitable.

The main thing, though, is we're trying to make experimentation part of our corporate culture. We were getting a little crufty for a while. After having invented citizen journalism, what are now called "blogs," and the first ad-supported online free software development community, plus having built the world's leading (by a HUGE margin) source of Linux and open source news, we were getting a little complacent for a while, and many of our people, including me, were getting a little bored.

Culture. Of. Experimentation.

Say it again.

Reality = that *all* of our successes have come from comparatively low-level people in our company saying, "Hey! It would be cool if we..." and almost all of our failures have been top-down ideas based on market research or other MBA-style "metrics."

No one expects every one of our experiments to succeed. But what we do rationally expect is that enough of them *will* succeed to make the process of constant experimentation worth what it's costing us.

And, so you know, we are hiring. Across the board, from editorial to sales to engineering. But we are so under-the-radar in the world of traditional journalism that the people who are watching mainstream media companies self-destruct neither notice nor care what (successful) small, specialized online companies are doing -- or how we are doing it.

[Jim Johnson]

Eric, Good points (as usual).

First, archived stories should not be in the same format as originally posted. They should be in the same format as the current stories. In this fashion, the Times would make the same amount of money per page view whether the story was posted today, in 2002, or 1982.

Second, consider if there are only four ads per page at only $10 per 1,000 impressions. That would be 4 cents per page view in revenue. The cost to store article text would be around 1/10,000th that price. Which means you can have 10,000 articles on your server for every page view -- and still cover the storage costs. And these are continuing to get cheaper.

Add in bandwidth costs, electricity (for powering the servers), technical support (to cover the cost of the website), on a per page view, and you're still making 2 to 3 cents per page view...

Finally, I would say the difference in effectiveness between online and print ads is more about both the actual ads as well as the targeting of those advertisements. Online advertising can and should be measured the same as any advertisement -- direct mail, television, print, etc. If advertisers do not see the same ROI, then I would say it has less to do with the platform, and more to do with the ads themselves. (How many of your ads come through ad agencies versus directly from the advertiser? I am willing to bet agency ads see a higher ROI than direct ads.)

I am by no means an expert, and these are just my opinions... but I like to think of myself as a "typical" early adopter -- meaning, my habits and thoughts today are now many more people will be in a few years.

Heck, when MicroSoft is saying that all information will be sent using IP technology in 10 years, that should indicate how quickly news organiztions need to start moving.

-- Jim

[Eric Deggans]

I'd be careful about disbanding the Associated Press -- right now, it's one of the few news organizations still well funded enough to do incisve journalism across the nation and the world.

What's ironic is that many of the suggestions mark makes on his homepage, the St. Petersburg Times is already doing.

We've reimagined our classifed ads and made ads cheaper in outlets such as TBT. You would be surprised how much material a movie or TV critic generates that is not provided on the wires -- i know the Tampa Tribune, for example, tried using a crew of people from the general public, but wound up supplementing their work with by sending the TV critic write some reviews.

Many of our stories do remain online the same way they looked when they first appeared there, for many years. i'm just not sure how many people go back to those stories after they've first been published. I wonder if there would be much profit in stories the pieces in our archive with ads intact, versus how much it might cost us in server space or computing power.

From my limited conversations with our ad people, it seems our biggest problem is that advertisers don't see a direct result from online ads the way they do with the print model. In print, they run and ad and they can see traffic at their store spike or sales go up measureably.

But think about your own relationship to online ads. When is the last time you paid much attention to an online ad, let alone moved to buy something associated with it? More intrusive online ads have only served to anger customers more.

So, until advertisers see the kind of response from online ads that they see from print, i'm not sure we'll be able to charge the kind of money we need to make the web site's profits closer to print.

[Mark Potts]

Just for the record, nowhere in my post do I say that the newspaper industry's problems have to do with papers providing their content for free on the Web? I said, "Failing to be creative about business models to fully monetize Internet content." That covers a lot of ground, but certainly doesn't specifically talk about free content (in fact, I was thinking about advertising models when I wrote it). I happen to think there are certain specialized, unique, in-depth products that newspapers could be charging for online, but I meant that comment far more broadly. And I certainly never said free content was a cause of the industry's problems.

[Jim Johnson]

These are also good ideas:

http://recoveringjournalist.typepad.com/recovering_journalist/2008/06/newspaperx-revisited.html

(I wrote my comment before reading the RJ blog).

[Jim Johnson]

1) Online advertising needs to be thought of in terms of volume. For example, every story that ever appeared online should appear in the same format today. This way, a column you wrote in 1998 would generate the same revenue per impression as a story published today.

This would be how the Long Tail works.

Unfortunately, older stories get "archived." and the format changes. (This is worse at places like the Tampa Tribune where they go behind a pay wall.

2) Disband the Associated Press. You don't need to spend the money on their stories (especially when I can get them online from other sources anyway) -- and your own stories are just as reachable from Google. Moreover, if the Times offered its stories through an exchange, it could make money selling its stories to other papers or websites.

[Almost like freelance or syndication services.]

3) Add more multi-media. Audio and video files provide new opportunities for advertisers -- and an audio/video ad can bring more money than banner ads.

4) Open "local news" to citizen journalists. If the local PTA, Church, homeowners association, etc could write "stories" on "TampaBay.com" it means your site becomes my home online.

Moreover, this would be free content that is surrounded by your ads. (To some extent you could use AP or wire stories like this as well, but wire stories cost money while citizen journalist content is free.)

5) Change your content management system to be more customizable. Now this is the hard part. Newspapers spent oodles of money on terrible CMS software for their website. TBO.com, for example is just God awful.

But if I could create a profile, tell the website what sections are most important to me, then see those stories -- you could charge more money for the ads on my pages. Why? Because you could really target the advertising. If I tell you that USF sports are important to me, then you could get Bulls Heaven, Bulls Outfitter, or Beall's to pay three to five times more per impression.

Look at MySpace. If I want to offer a product to older, white, women in Tampa Bay -- I can target that granular.

6) "Advertising Free" subscriptions. People can download Lost without commercials from iTunes. Give me a website without advertising, and I might be willing to pay a few bucks.

There are more... it just takes a different perspective and a willingness to take a chance.