Enough already with ‘mediums’

Hey, fellow armchair copyeditors, do you see anything wrong with this sentence at the Los Angeles Times website?

“Two senior Los Angeles Times editors were given new responsibilities today as part of an effort to create a 24-hour newsroom serving multiple mediums.”

The blunder, of course, is the inappropriate use of “mediums” as a plural of the word medium.

As everyone in the media business ought to know, media is the plural of medium.

Thus, television is a medium. A newspaper is a medium. Together, they are media, not mediums.

The only time the word “mediums” is appropriate is to describe a gathering of psychics.

Can grassroots journalism do the job?

My doubts are growing about whether we can rely on volunteers to produce credible journalism for a sustainable period of time.

Although a number of do-it-yourself ventures have embraced modern technology to attempt to fill the void created by the retrenchment of the mainstream media, there is scant evidence to date that any have succeeded to the point that they will support the sustained efforts of professional journalists.

Professionalism matters among journalists, because it enables them to devote the proper levels of diligence, discipline and time to reporting on public affairs in an objective and disinterested fashion. And professionalism, by definition, means paying the practitioners a sufficiently high level of compensation to attract bright and talented people to the craft.

New projects like Global Post, True/Slant and San Diego News Network give journalists platforms to present their work in exchange for what everyone hopes will be a comfortably compensatory share of the advertising revenues attracted to each site. The projects are in their early days, but it is safe say the participants in even these comparatively well-funded and high-profile ventures are toiling at the moment for far more love than money.

While it is true that the hard work of one or a handful of highly motivated individuals can create something worth reading for as long as their enthusiasm holds out, the time and hard work involved in serious reporting seems to suggest even the most impressive grassroots projects will be condemned to relatively short life spans.

Even where the will to go forward remains powerful, there is no satisfactory answer to the practical question of how long talented, capable and motivated individuals can afford to commit themselves to self-assigned journalistic endeavors that so far are not known to have generated any appreciable income for the writers.

The Gannett Blog is a case in point. A seemingly promising experiment in hyper-local, crowd-sourced citizen journalism, it was launched about 1½ years ago by Jim Hopkins, a former Gannett journalist. Now, Hopkins says he is going to pull the plug.

Hopkins said he will stop producing his blog on Oct. 1 because he is exhausted by the hours required to tend it, because he is disgusted with invective he says was hurled at him and because he couldn’t earn even $15,000 a year for his trouble.

Though the Gannett Blog started strong in the fall of 2007, Hopkins' behavior got a bit peculiar. He said he spent $2,000 to hire a bodyguard to protect him when he attended the Gannett annual meeting on April 28. And a video of the meeting shows him exhibiting something less than professional journalistic demeanor during the Q-and-A portion of the program.

Regardless of what you think about Hopkins or his blog, his experience makes for an intersting case study.

An editor and reporter for 20 years, Hopkins had a number of unique advantages that should have favored any hyper-local, crowd-sourced venture in citizen journalism. Consider:

:: The Gannett Blog’s hyperlocal community consists not of a group of people who coincidentally happen to inhabit a particular geography but rather a homogenous community of more than 40,000 people who work for Gannett Inc., the nation’s largest newspaper publisher. Beyond sharing merely geography, Gannett employees share common professions and the common fact that they all rely on the same company for their livelihoods.

:: Crowdsourcing was a slam dunk. Hopkins fortuitously began writing his blog at almost the precise moment the traditional economics of the media business began unraveling. News, rumors and tips rapidly flowed to Hopkins from employees who hoped he could help them make sense of what proved to be a series of spending cuts, layoffs and mandatory unpaid furloughs. Traffic to his blog peaked during the most traumatic moments.

:: The citizens who provided journalism to the Gannett Blog in many cases were real journalists. Strategically positioned throughout the company, the blog’s contributors had the motivation, acumen and professional skills to ferret out the inside dope they fed to Hopkins. Those tidbits made the blog indispensable reading for a great number of their colleagues.

Hopkins started the blog after taking a fairly generous buyout from Gannett that enabled him financially to turn the blog into something approaching a full-time endeavor. As the proceeds of the buyout dwindled, he began casting about for a way to be paid for his efforts. He considered selling advertising but soon found that he had too-few page views to reap appreciable revenues.

When he tried the tip-jar approach, he was subjected to a fair amount of scoffing and came up thousands of dollars short of the modest $25,000 a year he had targeted. So, despite all the advantages the Gannett Blog had going for it, Hopkins says he will call it quits.

The Gannett Blog is only one of hundreds, maybe even thousands, of grassroots journalism ventures. While it admittedly is not fair to project this outcome on all the rest, you are left wondering:

If a blog for employees of a media company run by a journalist who is leveraging the skills of other journalists can’t make it, then what can?

Now Twittering, if you happen to care

There is a new Twitter feed here to alert you to every future post on Newsosaur, if you happen to care.

But there is strong evidence that you may not, according to a new Harvard Business School study of 300,542 inviduals.

The research found that “most people” only tweet once in their lifetimes.

Among the precious few who stick with it, “half of all the people using Twitter updated their pages less than once every 74 days,” according to the study.

“It looks like a few people are creating content for a few people to read and share,” said Bill Heil, who carried out the work.

I have to admit that I am a Twitter slacker.

The only reason Newsosaur will be tweeting in the future is because search guru Danny Sullivan, who couldn't stand my recalcitrance any longer, set up the new, automatic feed.

Thanks, Danny.

P.S. In another technical breakthrough, this is my first airborne post. It is coming from 36,027 feet over the Utah-Colorado border, owing to a slick, $12.95 wifi connection on Virgin America. Now, if they only could master the technology of spacing the seats farther apart...

Sarah Snyder, spunk you could love

“You got spunk,” barked Lou Grant at Mary Richards on the old Mary Tyler Moore show. “I hate spunk.”

The quote came to mind today when I read the obit of Sarah Snyder, a much beloved and talented editor at the Boston Globe who died Sunday well before her time at the age of 51.

Sarah had tons of spunk as a newly minted reporter working at the Chicago Sun-Times in the early 1980s. But we loved her for it.

A perfect example of the enterprise and gumption she applied to her work was when she accompanied a photographer to a press conference being held by Mayor Jane Byrne at the crime-ridden Cabrini-Green housing project.

When the press conference was over, Sarah quietly told the photographer that she would get back to the office by herself. He protested that it was too dangerous for her to stay in the area on her own. But Sarah had other ideas.

As Mayor Byrne was about to enter her limousine, Sarah positioned herself conspicuously where the mayor could see her.

“How are you getting back to the office?” the mayor asked Sarah.

“Oh, I don’t know,” she replied.

“Then, get in the car with me,” said the mayor. “I’ll give you a ride downtown.”

That’s what Sarah did. While they were riding back to the office, Sarah got the big scoop of the day.

Which was her plan all along.

Facing up to life after print for newspapers

There are many unsettling parallels between newspapers and General Motors, the iconic American corporation struggling to regain its financial health and vigor as a consumer brand.

But there is a major difference between the opportunity that lies ahead for publishers and the continuing challenges facing America’s No. 1 disgraced automaker. Publishers have a far better chance at re-inventing their businesses than GM – but only if they act quickly and wisely.

GM recently joined Chrysler in filing for Chapter 11 to restructure a company burdened not only with insurmountable debt, an uneconomic manufacturing infrastructure and unsustainable union obligations but also a revenue crisis caused by a long-running slump in customer confidence aggravated by a precipitous collapse in the economy.

That sounds a lot like newspapers, especially the several who in recent months sought bankruptcy protection from debts that, in retrospect, they shouldn’t have incurred and now can’t handle. But here’s the difference:

Unless GM goes into some entirely different business, it always will be a capital-intensive, 19th Century-style manufacturing company. GM never can escape the need to operate big-ticket, dedicated manufacturing facilities that cost as much to own if the company builds a thousand cars as if it builds millions.

While your heart wants to wish GM well in the effort, your head says the company seems fated to creak and groan and struggle and shrink until there’s nothing left but a black hole in the federal budget.

The story could be pretty much the same for newspapers, minus the federal bailout. But the outcome could be significantly brighter for publishers, if they are quick, creative and bold enough to reposition their businesses for the modern, interactive world.

Unlike GM, publishers are approaching the day when they will have the opportunity – and perhaps no other choice – to exit the anachronistic manufacturing business that is eating most of them alive.

Between 60% and 70% of the cost structure of newspaper companies is consumed by the production and distribution of the print product that for years has been falling out of favor among readers and advertisers alike.

To be sure, most newspaper publishers will be required to be in the printing business in the immediate future, because roughly 90% of their sales are generated from ads and circulation fees for the physical product. Stop the presses tomorrow and you will kill the businesses before they can effectively transition to the future.

But the days of print newspapers are numbered. As the last generation of newspaper readers fades away (the trend is indisputable in the chart below), the demand for the print product will continue to shrivel among consumers and marketers.

Like it or not, it’s only a matter of time before it will not be economically feasible in most markets to print newspapers seven days a week.

If manufacturing newspapers were all that newspaper companies could do, then that would be the end of them. But newspaper companies, unlike GM, have options.

While printing and delivering newspapers certainly ranks among the core competencies of the industry today, newspaper companies possess many of competencies requisite for success in the Information Age. They are:

:: Enormous brand recognition and a high degree of credibility in their markets.

:: The largest, best-equipped staffs of content creators in the communities they serve.

:: The marketing power and know-how to attract large and desirable audiences.

:: The largest and best-connected advertising sales staffs in their individual markets.

Not even the strongest online competitors have those capabilities.

To gain full advantage of the resources remaining at newspapers after the recent years of extreme cost cutting, many publishers are going to have to face the emotionally difficult decision to cut back on their daily print schedules.

By producing a limited number of premium-priced, niche publications on only the days when it is profitable to do so, publishers can begin to focus more of their attention and resources on creating the wide array of tightly targeted Internet and mobile products that represent the future for their franchises.

Freed of the requirement to produce enormous quantities of newspapers every day of the week to support an increasingly challenging business model, publishers could get out from under the high costs of their production infrastructure by shuttering their dedicated production plants, selling off their fleets and outsourcing to lower-cost vendors the strategically immaterial chores of production and distribution.

This step is difficult to contemplate for those of us who get goose bumps watching the presses roll and enjoy burrowing into the pages of a crisp, new paper.

It is particularly painful to contemplate the enormous dislocation that would befall the pressmen, mailroom staffs, circulation crews and other dedicated workers whose jobs would go away. I was in Chicago when we moved from hot metal to computer composition in the 1970s. It was awful watching the proud and skillful members of the typographers union consigned to history.

But there was no denying the wisdom of that business decision. Today, the time for more tough decisions is upon us.

Publishers must do everything they can to save what’s left of the press, even if it means eliminating the presses.

Can you still trust me?

Now that I have offered newspaper publishers a potential solution to building revenues and improving their strategic position in the interactive age, some commentators have raised the legitimate question of whether this blog can be trusted.

Sidestepping the obvious issue of whether anyone should have trusted me in the first place, my response is this: Once you know where I am coming from, you can decide how much to credit anything I say in the future.

I wholeheartedly stipulate that my interest in working with newspaper publishers on a possible commercial project exposes me to potential conflicts of interest. But I felt I had no other choice.

Just as a news photographer should drop his camera to rescue a child from a burning building if no one else is around, I felt obliged to contribute what I believe is a constructive solution to the revenue crisis that threatens the future of journalism.

If my idea works, I might make some money. I am not allergic to that. And I won’t apologize for trying.

Now that I have moved from observer to participant in some of the discussions that may shape the future of the media business, I reserve the right to offer my thinking – like other businessmen who write op-ed pieces from time to time – on how to solve the devilish problem of charging for valuable content after giving it away for free for the last 15 years.

One thing I will never do, however, is to reveal the private conversations I have with publishers or other partners. Their business activities are not mine to discuss.

When I write about something in the future, you will get the best of all possible worlds. In addition to already knowing what my biases are and where my interests lie, you will benefit from the insights (but not the proprietary information) that I gain in my work.

This standard of transparency ought to be common in the media, in the business world, in government and in other elements of our society. You may not always find it there. But that’s what you’ll get here.

What I recommended to publishers in Chicago

Yes, it’s true. As reported today by the Nieman Journalism Lab, I was one of the three people who presented ideas to newspaper publishers at the (formerly) under-the-radar meeting to explore ways to monetize content.

In a minute, I will share what I can of what I told the publishers. And I’ll tell you why I think those ideas are on the right track. But first, here’s the story of how I wound up standing in front of a room filled with just about every mover and shaker in the industry.

Most of you know me only as someone who has been kibitzing about the newspaper business for the last 4½ years as Newsosaur. In real life, I have been a Silicon Valley guy since 1996, where I started or ran a number of companies involved in online media, software development, commerce systems and high-availability networks.

With the newspaper industry in a fight for its life, a friend and I had some specific ideas about how publishers could leverage technology to solve one of the most vexing problems any business ever faced: How to charge for something after 1½ decades of giving it away for free.

I partnered with that friend, Ridgely Evers, a technology wizard and fellow serial CEO in Silicon Valley, to urge publishers to create their own system to monetize their content – and to do so principally by boosting the value of their page views rather than merely erecting pay walls that could provoke a dangerously negative reaction among many of their readers.

We call the system ViewPass and that’s what I introduced to the publishers last week. I presented it as a conceptual framework that represents perhaps the best chance for the industry to revitalize itself as it transitions its emphasis to the interactive media. To bring the idea to life, I offered the services of a talented technical team that Ridgely and I have assembled.

The ground rules of the session at the O’Hare Hilton in Chicago called for confidentiality on the part of all of the participants. Now that the comments of all three presenters have been leaked to Nieman Labs, I feel free to discuss ViewPass so readers know where my interests lie. While I will be happy to discuss ViewPass itself, I will not discuss any past or future conversations that I may have with industry leaders.

ViewPass would be a single, ubiquitous brand to enable consumers to access valuable content on the websites and mobile platforms of all participating publishers. It would be deployed as a widely recognized and widely accepted brand in a manner similar to the way Visa cards were established by the banking industry as a ready substitute for cash.

The other parallel to Visa worth noting is that ViewPass would be not merely a consumer-facing brand, but also an industry-owned, high performance backend authorization system, one which provides all parties with a uniform mechanism and significant economies of scale.

ViewPass would consist of a simple, one-time registration system that would remember users as they moved among participating websites. It would build a profile of individual users from demographic information supplied by them, as well as by tracking the content they viewed as they moved from site to site.

Like many of the several monetization systems coming to market, ViewPass would support payments for individual articles, subscriptions and bundles of content.

But the system’s greatest value would be the data it assembled on each individual consumer, because the data would enable publishers to sell their advertising inventory at premium rates to advertisers seeking to target their messages to the most likely consumers.

ViewPass is designed to complement, rather than compete with, existing ad networks. Each page rendered to a ViewPass member would provide the networks serving ads to participating publishers with richer, more accurate data about that viewer.

The data would enable superior ad targeting, thereby improving consumer response. Improved response would generate higher CPMs, boosting revenues as advertisers competed for access to the availabilities.

It is important to note that the information offered to the ad networks would not identify individuals, thus protecting their privacy.

Based on the models Ridgely and I have constructed in consultation with a number of newspapers, we believe the enriched customer data potentially will enable publishers to more than double their ad rates.

In addition to lifting their revenues, industry leaders could improve their profitability by owning ViewPass in a co-operative type of structure that would enable them to share in the profits of the business each year after covering the cost of the operation.

This, of course, would be a major improvement over what they could hope to achieve by working with what almost certainly would be a fragmented collection of third-party vendors, each of whom would naturally expect to make a profit from providing similar services

Taking into account the improvements in revenues and profits discussed above, we believe the industry could rapidly triple its online margins by adopting ViewPass.

In addition to me, the three-member panel meeting with the publishers in Chicago included Jim Pitkow of Attributor, who has developed a system for identifying websites that are poaching copyrighted content, and Steve Brill of Journalism Online, who is advocating the industry-wide adoption of a system he hopes to build to enable the sale of content for cash.

The Attributor solution, as discussed here, could be reasonably effective in policing copyright abuse. But a more positive approach to copyright compliance would be welcoming the broadest number of websites into the ViewPass system, where each participating site would be motivated to respect copyright to protect the value of everyone’s content.

The ViewPass carrot would be greater revenue for participating publishers. The stick for copyright violators (the detection of whom could easily be provided by a partner such as Attributor) would be the sanction of being booted off the ViewPass network.

The approach advocated by Journalism Online seems to be a concerted campaign to force consumers to subscribe to online content after some 15 years of getting it for free.

But there’s a huge problem with that.

If you suddenly put a pay wall on a website that used to be free, you are bound to lose a substantial amount of traffic representing a considerable amount of potential advertising inventory. Once customers are turned off, it will be awfully hard to get most of them back, especially as plenty of free websites will be glad to welcome them.

You could argue, as Steve does, that some newspapers are doing a poor job of selling their existing online inventory. But the solution is to sell the ad inventory better, not to write it off.

The publishers successfully selling targeted advertising on Yahoo’s Apt system have proven that it pays to have superior data about their customers. If you ask them, they will tell you so. But the problem with Apt is that Yahoo gets 50% of the revenues.

An industry-owned, co-operative venture like ViewPass would put publishers in a stronger negotiating position than they are today with such partners as Yahoo and the other online mega-powers.

If ViewPass were expanded to other print, broadcast and online publishers across the globe, it could give the American newspaper industry some badly needed mega-power of its own.

Worst quarter for newspapers: Sales dive $2.6B

In the worst quarter in modern history for American newspapers, advertising sales fell by an unprecedented 28.3% in the first three months of 2009, plunging sales by more than $2.6 billion from the prior year.

Statistics posted without publicity on the website of the Newspaper Association of America show that print ad sales fell by a historic 29.7% to $5.9 billion in the first period of this year and that online sales fell a record 13.4% to $696.3 million.

The worst percentage decline was in the highly profitable classified advertising category. which dived 42.3% to produce slightly less than $1.5 billion in sales.

As illustrated in the graph below, newspaper sales have dropped at a steadily accelerating rate since April, 2006. In records published by the NAA that date to 1950, there is no precedent for the sort of decline suffered in the first three months of this year.

The $2.6 billion sales decline in the first period of this year is equal to almost a third of the $7.5 billion that newspaper ad revenues fell in all of 2008. Newspaper ad sales last year fell 16.6% to $37.8 billion, making it by far the worst 12 months in the history of the industry.

Barring a miraculous turnaround in the economy, the first quarter sales performance suggests the industry could be headed to its first year since 1987 of less than $30 billion in annual sales.

By contrast, newspapers sold an all-time high of $49.4 billion in advertising as recently as 2005. If the industry achieved only $30 billion in sales this year, its volume would be 40% lower than it was four years ago.

The rout in the first quarter of 2009 was wide and deep, owing in part to the most difficult economy since World War II but also to major secular changes in consumer and advertiser behavior. Here is a category-by-category breakdown:

:: Employment classified advertising skidded 67.4% to $205.4 million.

:: Real estate classified advertising slumped 45.6% to $336.9 million.

:: Automotive classified advertising swooned 43.4% to $332.8 million.

:: National advertising slipped 25.9% to $1.1 billion.

:: Retail advertising stumbled 23.7% to $3.3 billion.

:: Other classified advertising slid 16.5% to $587.7 million.

Could BBC-style ‘news tax’ save U.S. press?

Amid growing economic distress at newspapers and magazines, a number of folks have suggested imposing a BBC-style tax on American households to rescue the struggling print media.

Could the idea work? Potentially. Would it help? Possibly. Could it really happen? You be the judge.

Although the idea of a news tax raises a host of troubling questions, it has one powerful argument going for it: It worked great for the BBC.

The British Broadcasting Co. has been supported since 1922 by a tax imposed first on radios, then on radios and televisions, and now on televisions only.

The annual fee, which started at 10 shillings per radio receiver, today is £142.50 (US$227.43) for a color TV and £48 (US$76.61) for a black-and-white set. The fee applies to those who view TV on computers and blind people get a half-off discount.

Assuming the tax is collected on all of the 26.3 million TVs in the UK, the levy generates $3.7 billion a year to help fund eight national television channels, five national radio networks and an assortment of local broadcast and Internet services in England, Scotland, Wales and Northern Ireland.

The tax evidently is one reason the BBC continues to cover Iraq on a full-time basis, while the once-proud American Broadcasting Co. is outsourcing a good deal of its coverage of the conflict to – you guessed it – the BBC.

The BBC tax dates back to the earliest days of broadcasting, when the government decided it was important to ensure that radio service and quality programming were widely available throughout the British Isles. When TV was invented, the tax simply was carried over to it. Today, it supports a number of top-notch websites, too.

In the United States, by contrast, the print and broadcast media grew up as privately capitalized businesses, prospering handsomely for decades until the Internet-enabled media rocked their world.

The notable exceptions to private media ownership in U.S. are National Public Radio and the Public Broadcasting System, which each derive about a fifth of their funding from federal sources; about a fifth of their funding from state and local government; about a fifth of their funding from educational institutions, and the rest of their funding from foundations, corporate donors and listeners and viewers like you.

In the absence of a tradition of government support for the media in the United States – not to mention the constitutional proscription against government interference with the press – a move to impose a fee to fund newspapers would be, to say the least, a sharp break with precedent.

For the sake of argument, however, let’s think about how a news tax would work.

The most popular proposal, which has been discussed but not advocated by such industry leaders as Tom Rosenstiel, the director of the Center for Excellence in Journalism, would "embed" a fee to pay content producers in the bill of everyone who subscribes to Internet access through a telephone company, cable-television service or other provider.

Assuming 75% of the 118.3 million U.S. households subscribe to Internet service and the news tax were $10 per month, the measure would raise the respectable sum of about $10.6 billion per year.

If the tax were allocated strictly to newspapers by daily circulation, then 350,000-circulation papers like the Boston Globe or San Francisco Chronicle would get annual subsidies of $85 million apiece. That would be enough to cover the $1 million-per-week in operating losses that their owners say each paper is suffering and make it possible to reverse some of the recent draconian staff cuts at each publication.

A 10,000-circulation paper would be entitled to a windfall of $2.4 million, enough to cover the pay and benefits for nearly 50 employees for a year.

If the ball got rolling for a news tax, however, wouldn’t magazine and web publishers want a share of it, too?

If the tax had to be divided among the nation’s 1,400 daily newspapers, 26,400 magazines and 75 million active blogs, then the estimated annual subsidy would tumble to less than $50,000 for the Globe or Chronicle, $1,400 for a 10,000-circulation paper and a few bucks for a blog with a handful of page views.

Apart from the apparently negligible economic benefit a news tax would deliver if it were applied broadly to all print and web publishers, a levy intended to assist strictly newspapers would face a number of daunting barriers of its own:

:: Only a third of Americans cared enough about newspapers to read one in the prior day, according to a survey released in August by the Pew Center for the People and the Press. Why would the other two-thirds be willing to pay the tax?

:: The vast bulk of the American population has come to believe that news, information and entertainment are supposed to be free. What would motivate them to be willing to pay the tax?

:: Voters don’t like new taxes and politicians don’t like doing things that voters don’t like. Are there enough brave political leaders to take this on?

You be the judge.

No local without us, says start-up web newsman

Working for free and doing just about everything at his bootstrap local website, veteran journalist David Boraks has become the sole source of news for his community in Davidson, NC.

In this guest post, he describes life at what one of his readers calls the “21st Century replacement for the local newspaper.”

By David Boraks

A funny thing happened as I covered Davidson College's graduation on Sunday for my startup community website DavidsonNews.Net, in Davidson, N.C.: I became part of the story.

As the dean of students read a flattering citation, I put down my camera and notebook and just listened. I am humbled to report that I received the college’s Algernon Sydney Sullivan Award, given annually to a member of the off-campus community for “fine spiritual qualities practically applied to daily living, usually going to persons who have given unselfish service without due recognition.”

Only once before in my 35-year career have I set out to cover an event and wound up part of it. As a young courthouse reporter at the Middletown (CT) Press in 1980, I was called to the witness stand during an auto-theft trial. It was over quickly, and the defense attorney's attempt to prove a motion about prejudicial news coverage failed.

Since then, I’ve worked as an editor, reporter, and photographer at newspapers from Boston and New York to Taipei and Charlotte.

Now, I’ve traded a paying career for a start-up, where I do everything from covering the Town Board and writing obituaries to plotting marketing strategy and coding web pages.

Davidson, N.C., is a town of about 9,000. DavidsonNews.Net’s daily report includes town hall news, a police blotter, a social column, calendar listings, school and church news, audio “four-minute interviews” and video.

We bring journalistic standards to our efforts, which in my mind are no different from what community newspapers have done for generations.

Many are talking about “hyperlocal” websites as the future of local news. But we're not the future of local news. We're the present.

The big metro daily in our region – The Charlotte Observer, where I once worked – has all but eliminated suburban coverage. One local weekly newspaper recently folded, and other publications don’t cover our town. At many town meetings, I am the only reporter (and sometimes the only citizen) in the room.

Without our site, there would be no local news.

DavidsonNews.Net grew out of a neighborhood email newsletter I started three years ago. Its scope quickly expanded, as I began covering town-wide issues. Starting the site was easy, in part because web hosting is relatively inexpensive and web-publishing software simple to use.

In organizing the business, I considered two approaches: non-profit and for-profit. Although I realize other news organizations are avidly pursuing the non-profit approach, and there’s plenty of foundation money to fuel them, I believe newsgathering is essentially entrepreneurial. I couldn’t get my brain around how a non-profit news operation might work. In mid-2007, we incorporated as a limited-liability company.

Today, DavidsonNews.Net has two paid part-time staffers­: an ad salesperson and an office manager/advertising coordinator/graphic designer. As publisher and editor, I work full-time ­ without pay. My wife, Shelley Rigger, supports us with her college professor’s salary. I supplement our income with freelance writing, photography, web design and occasional work as a public radio announcer.

Two other regular contributors - an assistant editor and a social columnist remain volunteers, though we pay them quarterly honoraria for their efforts. Several other residents contribute occasional news and photos as volunteers.

So how do you make money doing this? The answer is still coming into focus.

Our model is emerging as a roughly equal mix of advertising revenue and subscriber payments.

The site is a good buy for local advertisers, both in price and in reach. Most of our advertisers – small local businesses ranging from restaurants to community banks – never have used the web, and there’s a lot of education to be done. We simply can’t charge rates comparable to local print publications, even though we can demonstrate deep penetration and can deliver their messages daily, rather than weekly or monthly.

Some have suggested we turn to the town for help. Just this week, a newspaper in Carrboro, N.C., near Durham, was asking the local Board of Aldermen for a $100,000 loan to help expand.

We’re uncomfortable with direct government involvement, though we think it has a role. We recently added the town as an advertiser, rather than as a lender or investor. Meanwhile, we also count some town staff and elected officials among our paying subscribers.

At the moment, those subscriber payments are voluntary. It would be great if some of the nation’s larger newspapers put up toll windows on their websites, so as to help helped educate Americans that online news is something to pay for.

For now, we’re taking a public-radio approach to subscriptions ­ making appeals on the website, through email and through public appearances and direct appeals to readers, business owners, and local leaders.

Fortunately, those appeals are finding a receptive audience. Nearly 250 residents have contributed between $10 and $500 each over the past two years, with payments averaging around $60.

At a time when our town is growing and our sense of community is threatened, these people understand how a local news site can provide timely and factual information, ­not to mention a shared experience that can hold us together.

Our business plan calls for quadrupling that number, and we’ll make a big push this month with our first coordinated subscriber campaign.

Revenues have been picking up, and the business recently began repaying loans I’ve made to it. At the moment, we have no other debt, and I hope that, by year’s end, those loan payments can turn into modest paychecks.

For now, we measure success mostly in positive feedback. Last weekend’s award confirmed what our recent online reader survey showed: People love the site and they’re willing to become partners to ensure its success.

As one reader told us: “The community feeling is what brought us to Davidson, and DavidsonNews.Net is a big part of it.” Said another: “DavidsonNews.Net is the 21st Century replacement for the local newspaper.”

Car dealer closings will crunch local ad sales

The shutdown by Chrysler and General Motors of roughly 10% of the surviving auto dealers in the United States could cost newspapers and local broadcasters millions in annual revenues they can ill afford to lose.

The forced closing of a combined 1,889 dealerships ordered last week by Chrysler and GM will more than double the estimated number of dealers who went out of business in 2008 when the economy imploded and neither dealers nor their prospective customers could get financing.

An estimated 900 of the nation’s 20,770 dealerships succumbed in 2008, according to the National Association of Automobile Dealers (NADA). Once all the dealers dumped by Chrysler and GM shut their doors, the number of franchises will fall to a modern-day low of 17,981, assuming (optimistically) that no additional dealers succumb to the most toxic economic since the Depression.

Beyond the immediate impact on the affected dealers and their employees, the sharp contraction in the retail side of the car business will carve another hefty hunk out of the already diminished revenues of newspapers, local television stations and radio stations.

Across all ad categories, newspaper revenues fell 16.6% in 2008 to $37.8 billlion, local TV dropped 6.5% to $20.1 billion and radio fell 8.6% to $19.5 billion, according to statistics obtained respectively from the Newspaper Association of America, BIA Advisory Services and the Radio Advertising Bureau.

Among the three industries, auto revenues are broken out only for newspapers. But the trend for publishers was ugly even before Chrysler headed to bankruptcy court, where GM is likely to turn up by the end of the month.

Auto classified advertising in newspapers fell 29% in 2008 to a 25-year low of $2.3 billion, representing less than half of the $5 billion in car ads sold by publishers as recently as 2004.

Based on data from the NADA showing how auto dealers historically have allocated their marketing budgets, it is possible to estimate that the drop in the number of dealers could reduce newspaper revenues by as much as $140 million this year.

This 6% decline would come on top of whatever additional spending cuts are undertaken by the auto dealers who remain in business. The survivors may trim their spending to cut operating expenses, boost profits or because they no longer feel they have to compete with dealers selling the same brand in their markets who have gone out of business.

As of 2007, newspapers garnered 27% of the advertising dollars spent by auto dealers across the country, according to the NADA. This is down by almost half from the 52% of dealer dollars that newspapers controlled in 1997.

The NADA reports that TV and radio broadcasters each sell about 17% of the auto advertising sold in the nation, which made their respective shares of the market worth about $1.5 billion apiece in 2008.

Assuming sales fall 6% for each of the electronic media because of the dealer shutdowns, then each of the broadcast industries could be headed this year for a tumble of approximatley $100 million. As noted above, auto expenditures would even fall further if the surviving dealers rein in their spending.

While newspapers have had a few years to get used to a significant decline in auto advertising, the wounds will be fresher and the blows may fall harder on broadcasters than publishers.

Auto classified advertising in 2008 represented only 6% of the sales for the newspaper industry as a whole. Anecdotally, broadcasters say that auto advertising can represent up to 20% of the revenue for certain metro radio formats and up to 30% of sales for a metro television station.

Six of the top 10 ad spenders at TV stations in the fourth quarter of 2008 were either domestic or foreign brands, according to the Television Bureau of Advertising. But expenditures by five of the six auto groups in the final quarter of 2008 were lower than in the prior year, contributing to a 29.3% plunge in auto ad sales for the final period of 2008.

The full impact of the auto sales collapse was buffered for many broadcasters in 2008 by an enormous leap in political advertising. Political ad purchases on TV rose 675.5% in the last three months of the year, paced by a 2,146.2% surge in purchases by the Obama for President Committee.

This year, broadcasters will not be so lucky.

Washington papers paid dearly for tax cut

Newspapers sacrificed their moral authority and compromised their credibility in exchange for the gift of a token tax break from the governor and legislature in Washington State.

While the 40% tax reduction in the state’s main business signed into law on Tuesday sounds impressive, it will save the jobs of perhaps 15 reporters across all of the state’s ailing newspapers.

This calculation is based on the statement by legislators during hearings on the bill that the measure would save newspapers $8.1 million between now and when the tax cut expires in 2015. Assuming an average annual cost of $75,000 for a fully loaded reporter and that savings are reaped equally over seven years, then approximately 15 jobs could be saved if the publishers applied all the savings to payroll.

There is no obligation, of course, that the savings be used to preserve jobs. They could be used for anything from press equipment to redecorating the lobby.

While every little bit admittedly helps embattled publishers, this special gift instantly made the publishers more beholden than they properly should be to Gov. Chris Gregoire and legislators who overwhelmingly backed the measure in spite of a budget deficit estimated at more than $8 billion – and climbing.

In lobbying aggressively for the tax break, the publishers sacrificed their moral authority to challenge favoritism, fiscal imprudence and self-dealing on the part of the state government and the dozens of political figures who supported the measure.

Further, this dangerous bargain compromises the credibility of the newspapers by leaving readers to wonder:

:: Will the political leaders who supported the tax break be accorded favorable treatment – or outright immunity – in the coverage of any real or alleged transgressions in the future?

:: Will the paper fairly cover upcoming political campaigns involving the politicians who supported the tax break?

:: Will future political endorsements be tilted in favor of the politicians who helped the newspapers?

Publishers and editors undoubtedly will promise to be as vigilant and impartial as ever. And that may be true.

But thoughtful readers will be left wondering. And that can’t be good for business.

Don’t forget Laura Ling and Euna Lee

As we celebrate the liberation of journalist Roxana Saberi from prison in Iran, don’t forget that two other innocent American newswomen are being held on similarly trumped-up charges in North Korea.

Laura Ling and Euna Lee, two correspondents for San Francisco-based Current TV, have been detained in North Korea since March 17, when they were arrested while filming a story at the border between China and North Korea.

They have been held essentially incommunicado since then in a “guest house” in Pyongyang on charges of “hostile acts” and illegally entering one of the most secretive and paranoid nations in the world. If they are not rescued, they could face years of imprisonment in a harsh labor camp.

Lee and Ling, who had traveled to China to interview North Korean defectors, were arrested at the frozen Tumen River. Because information about their case has been limited, the precise circumstances are not clear.

Current TV, which is owned by former vice president Al Gore, has adopted a strict no-comment policy on the case in the apparent belief that the delicate diplomacy necessary to win the women’s release is best conducted in private. The United States has no diplomatic relations with North Korea, relying on Swedish diplomats to attempt to broker the release of the reporters.

By contrast, a substantial degree of attention was focused on Saberi’s case by National Public Radio and the British Broadcasting Corp., for whom she worked as a correspondent.

The best man won in Berkeley j-dean search

They looked high and low for two years for a new dean for the Graduate School of Journalism at the University of California at Berkeley but it turns out the best man was there all the time: Professor Neil Henry.

As a member of the adjunct faculty recently recruited by Neil, I have not only an obvious conflict of interest but also an insider’s view on the goings-on at fabled North Gate Hall, where Neil has been acting dean since the summer of 2007.

I have worked closely enough with Neil to know that he is an ideal pick for a difficult position at the most challenging time ever for journalism, journalists and journalism schools.

An accomplished newsman, Neil is passionate enough to want to preserve quality journalism and realistic enough to know that things have to change: Not only in the practice of the craft but also at the schools training professionals for the future.

Neil brings to the position a demonstrated ability to build consensus and commitment through patience, quiet diplomacy and wise counsel.

And he totally understands that the school’s future, like that of any similar institution, depends on its financial strength. He has raised $5 million in the last year, including two endowed chairs and generated the funding and institutional support to make possible the Media-Technology Summit planned for the fall.

Neil was appointed permanent dean last week after two high-profile searches churned through literally hundreds of candidates to replace the last permanent dean, Orville Schell, who departed in mid-2007.

In the first search, the leading candidate withdrew after failing to come to agreement with the university on the terms of her engagement. In the second search, which took place this spring, the top candidates bowed out when it became clear that the committee searching for the new dean wanted to explore additional alternatives.

The result of the protracted process was that some reports, like this one, concluded that either the j-school couldn’t get its act together or that no qualified candidate would want the job. Neither is the case.

After being appointed acting dean in mid-2007, Neil declined to apply for the permanent position. Instead of running for office, Neil took care of business. When the smoke cleared, it was obvious to nearly everyone that the right guy already was on the job.

The dean search admittedly may have appeared to be messy and convoluted to the casual outside observer. But it produced a first-rate result. And that’s what matters.

What would Google do about newspapers?

This guest commentary comes from Bill Grueskin, the academic dean of the School of Journalism at Columbia University and former managing editor of WSJ.Com. For an alternative look at Google’s role in the emerging news ecosystem, see this prior post, Don’t Blame Google for Newspaper Woes.

By Bill Grueskin

Marissa Mayer is the Google executive whose rigid adherence to improving the user experience helped vault the company to pre-eminence. But her elliptical comments at a congressional hearing on the sorry state of the newspaper industry revolved around a message that seemed to add up to: “Lotsa luck, fellas.”

Mayer, who is Google’s vice president of search products and user experience, appeared Wednesday at the Senate commerce subcommittee hearing called by Sen John Kerry (D-MA) to consider ways the government might aid ailing publishers.

Mayer’s prepared remarks weren't easy to decipher – perhaps because Google itself is under such scrutiny these days, including from federal regulators. So, here are some excerpts from her testimony (in bold), along with suggested translations:

"Every day, millions of people search the Web for relevant answers to their questions. In response, search engines strive to connect each user with the right results…. Google is one such search engine that people use to find answers online."

Google is indeed one such search engine. It appears there are others, but it’s been a long time since anyone has said, “I’m going to AltaVista that guy before I go out on a blind date with him.”

"Another service we offer is Google News…. We show people just enough information to invite them to read more -- the headline, a line or two of text, and a link to the news publisher's website."

That’s true, but many Web readers are entirely satisfied with just a headline and summary. They won’t tolerate the painful load time of news sites, and dislike seeing a single story broken into four or five sections just to drive more page views.

"Together, Google News and Google search provide a valuable free service to online newspapers specifically by sending interested readers to their sites at a rate of more than 1 billion clicks per month. Newspapers use that Web traffic to increase their readership and generate additional revenue."

A billion clicks sounds like a lot, until you divide it among thousands of news sources and then figure most of those page views generate a penny each, at best, for the underlying sites.

"We allow site owners to choose whether or not Google can index their sites. … So, while we think inclusion in a search engine can drive a lot of beneficial traffic, our policy first and foremost is to respect the wishes of content owners."

You want someone else to get the traffic? Be my guest.

"By providing relevant ads and improving the connection between ad"vertisers and our users, Google AdSense creates billions of dollars in annual revenue for publishers. In fact, in 2008, that figure exceeded $5 billion in revenue for AdSense publishers. "

“Publishers” is a very broad term here. It includes every blog, site and news organization that uses AdSense.

"The atomic unit of consumption for existing media is almost always disrupted by emerging media. … The structure of the Web has caused the atomic unit of consumption for news to migrate from the full newspaper to the individual article. As with music and video, many people still consume physical newspapers in their original full-length format. But with online news, a reader is much more likely to arrive at a single article."

Now we’re getting to the core issue. In other words, people used to buy newspapers to get disparate chunks of information (sports scores, movie times, local-government coverage, weather forecasts) that papers provided, yet those readers were effectively subsidizing the entire newsroom. By atomizing content, the Web makes each story instantaneously and ubiquitously accessible, meaning newspapers have gone from the profitable front end of the distribution chain to the unprofitable back end.

"Treating the article as the atomic unit of consumption online has several powerful consequences. When producing an article for online news, the publisher must assume that a reader may be viewing this article on its own, independent of the rest of the publication. To make an article effective in a standalone setting requires providing sufficient context for first-time readers…"

So, news sites spend a lot of time coming up with links from current stories to past stories, blog posts, data from other sources, etc. That works great in a search context, where people are often looking to dive deeply into specific topics, but far less well in a news context, where time is as important, or more important, than depth.

"…while clearly calling out the latest information for those following a story over time…."

So good news sites now update top stories constantly, which is incredibly important online, and is also incredibly expensive and time-consuming, with opportunity costs of its own.

"It also requires a different approach to monetization: each individual article should be self-sustaining."

Yes, it should be, but it isn’t. Most mid-tier news sites’ stories get under 5,000 page views. It’s hard to justify a reporter spending even a half a day on that story if it’s going to generate $50 in revenue (assuming a most generous $10 CPM).

"These types of changes will require innovation and experimentation in how news is delivered online, and how advertising can support it."

Lotsa luck, fellas. Even the brilliant minds at Google haven’t figured this one out.

"A much smaller but important factor for online newspapers to consider in today's digital age is the fundamental design and presentation of their content."

Too many news sites are clunky, slow, and packed with links no one clicks on. Why can’t you design a home page with this kind of elegant simplicity?

"When a reader finishes an article online, it is the publication's responsibility to answer the reader who asks, “What should I do next?” Click on a related article or advertisement? Post a comment? Read earlier stories on the topic?"

A few years ago, the mantra was, every article page is a home page. So editors bulked up article pages with related links, interactive doodads, and so on. And in the end, they found out that it’s the referrer, not the referree, that still winds up with the bulk of the traffic.

"Preserving robust and independent journalism at the national and local levels is an important goal for the United States. Google is doing its part by driving significant traffic to online news publishers, by helping them generate revenue through advertising, and by providing tools and platforms enabling them to reach millions of people."

Google isn’t to blame for news publishers’ problems, which began long before the company was founded. So, lay off.

Why feds can’t – and shouldn’t – rescue press

Apart from whatever modest cathartic effect it may have provided participants and observers, the qvetch-in over the fate of the newspaper industry hosted by Sen. John Kerry was pointless.

Two days before the opening gavel struck Wednesday at the hearing called by the failed Democratic presidential candidate from Massachusetts, the outcome was presaged by White House spokesman Robert Gibbs, who observed succinctly: “I don't know what, in all honesty, government can do about it."

Gibbs is dead right. Government can’t, and shouldn’t, do anything about the stupendous – and lamentable – reversal of fortune that has scourged newsrooms, squeezed newsholes and shuttered such proud titles as the Rocky Mountain News and Seattle Post-Intelligencer.

There is no persuasive economic argument for the feds to bail out faltering newspapers in the same way they acted to shore up AIG, several banks, Fannie Mae and two of the three domestic automakers.

In the case of the financial institutions, government aid materialized because they were deemed, not withstanding their prior reckless behavior, to be essential to the over-all well being of the nation, given their power to fund economic activity ranging from business expansion to home mortgages.

In the admittedly less compelling case of the Motown duo, the argument for government support is that tens, and maybe hundreds, of thousands of jobs would be saved by enabling the companies to stumble along until the earlier of two outcomes: (a) they miraculously figure how to make cars people want to buy or (b) the economy is strong enough to absorb the workers displaced when the companies implode.

As previously discussed here in some detail, no similar argument can be made for newspapers, which collectively employ a mere 0.2% of the nation’s labor force and generate only 0.36% of the gross national product. In other words, newspapers, from an economic point of view, are not too big to be allowed to fail.

Apart from any other reason you could muster for federally funding hard-up publishers, there is the matter of how any handout could be reconciled with the First Amendment.

Grants, loans or other federal goodies properly would require oversight by the government and accountability on the part of the publishers. In that event, there would be no imaginable safeguard to keep politicians and government bureaucrats from gnawing away at the freedom of the press.

As chilling proof, look no further than the way the Bush administration not so long ago terrorized and politicized the Corporation for Public Broadcasting, which dispenses government-allocated funds to National Public Radio and the Public Broadcasting System.

Another clear and present danger to the separation of government from the press is inherent in the non-starter legislation proposed by Sen. Benjamin Cardin (D-MD) that would confer certain tax advantages on newspapers electing to be organized as non-profit organizations.

The catch in Cardin’s legislation is that non-profit papers would be prohibited from making political endorsements. But the provision is unenforceable, as well as unconstitutional.

While a newspaper could avoid saying “we endorse Senator X,” what would happen if it published a series of stories exposing fund-raising shenanigans by his opponent or a columnist excoriated the opponent day after day for everything from marital infidelity to bad breath?

Could a series of news articles or commentaries be construed as improperly favoring one candidate over another? Who would make the judgment— a senate committee, a federal bureaucrat or someone else?

Beyond those issues, Cardin’s bill fails to face up to the fundamental problem that threatens the financial viability of many newspapers: Advertising revenues are plunging faster than publishers can trim their considerable, fixed operating expenses.

If a newspaper is losing more money than it makes, changing its corporate structure won’t suddenly fix its problems. As demonstrated by the financial challenges faced by the St. Petersburg Times and the Christian Science Monitor, non-profit ownership won’t shield a paper from the harsh laws of economics.

Thanks but no thanks, Uncle Sam. Saving newspapers is a problem that has to be solved by publishers themselves.

Kindle-ing while newspapers burn

Why do newspaper publishers think they can be saved by a clunky, electronic distraction like the double-wide Kindle DX introduced today?

Do they really think anyone wants to spend $489 to lug around a clunky 10.4- by 7.2-inch tablet to read a static (that is to say non-interactive) version of the paper?

In announcing the new jumbo Kindle today, Amazon.Com said pilot programs would be launched by the New York Times, Boston Globe and Washington Post to provide Kindle-friendly versions to subscribers who shell out for the e-readers.

But why? Of all the things that are wrong with newspapers, the format of the printed product isn’t one of them.

It’s true that you can get the news more rapidly on the web, satellite radio or Twitter. And you can watch videos anyplace from CNN to YouTube to your smart phone.

But nothing beats the convenience and portability of a well-organized newspaper.

A newspaper requires no batteries or AC current, can be read anyplace in all-but-blackout conditions, can be folded (unlike a jumbo Kindle) for convenient transport, can be clipped for coupons, can catch canary poop and can be responsibly recycled into cute flower pots (see below) in a way that electronic detritus cannot.

If you don't care to acquire your news interactively, a printed newspaper is a superior choice. And a daily paper is cheaper than a Kindle by about $488 per copy.

If you want a dose of interactive news, then you already can find the contents of your newspaper – generally available for free – on a PC, laptop, net book or iPhone.

Instead of trying to persuade consumers to adapt to an expensive, awkward and idiosyncratic gizmo like the wide-body Kindle, newspapers would be wiser to spend their time and resources optimizing their existing offerings for the interactive formats already in popular use.

Newsosaur’s Top Ten media blogs

Blogs.Com, a guide assembled by humans for humans, asked me to name the 10 blogs I turn to most often for information and inspiration about how technology is changing the media business.

It was exceedingly tough boiling the list down to only 10, but here it is, with apologies in advance to the many worthy contenders who almost made the cut:

Buzzmachine – A ready and reliable source of quick-draw critiques of MSM foibles. Author Jeff Jarvis also would want to you know that he wrote the book about Google.

C3 Blog – Even bigger news than a man biting a dog is when the CEO of a newspaper company writes a blog. Beyond the marvel of the thing itself, you will get a straightforward accounting from Chuck Peters of the amazingly disruptive changes he is making at the Cedar Rapids (IA) Gazette.

Content Bridges – An insider’s insider, former old and new media editor Ken Doctor dishes secrets about newspapers that they didn’t even know they had.

Greenslade Blog – Global depth, breadth and insight from Mr. Roy Greenslade, the pre-eminent journalism maven in the United Kingdom.

Media Café – Jeff Mignon and Nancy Wang deliver strategic analysis across the media and around the world, thanks to their unparalleled network of clients and colleagues.

Monday Note – Crisp and forward-looking insight from Frédéric Filloux in Paris, a top product strategist for Schibsted Publishing Co., and Jean-Louis Gassée, a Silicon Valley veteran.

Neiman Journalism Lab – Deep and reasoned analysis from Martin Langeveld, Tim Windsor and others. A rarity in the world of blogging, they do their homework before they opine. Must be that Harvard mojo.

Press Think – “Mindcaster” Jay Rosen, a journalism professor at NYU, is one of the most original and unsentimental thinkers about how news is transitioning from the legacy media to – well, uh, who knows? He also writes even longer posts than I do, which is saying something.

Recovering Journalist – Far from recovered as a journalist, Mark Potts blends pithy reporting, exceptional writing and smart analysis in his unblinking take on the media scene. He does it all without wearing socks, too.

Romenesko – Quite simply, this is the Bible of journalism news and media gossip. It’s penned by the indefatigable Jim Romenesko, whose energy level may have something to do with his fascination with a certain coffee company.

Why not use research to edit the paper?

Despite the recent uproar at the Chicago Tribune over road-testing stories with consumers prior to publication, there is nothing wrong with editors using market research to shape their publications.

More of them should do it. And it’s pretty easy, too, as I’ll discuss in a moment.

Well-executed research is a valuable tool for the managers of any consumer-oriented business. The long-running plunge in newspaper circulation is proof that the industry is not pleasing enough of its intended customers. Thoughtful research, thoughtfully applied, could help the industry arrest the decline by becoming more customer-driven.

Journalists at the Tribune were properly up in arms last week when they learned the marketing department was asking consumers what they thought of specific stories potentially destined for upcoming editions of the newspaper.

Telling the public what you are going to publish before you are done reporting and writing the story is poor practice, admitted Trib editor Gerould Kern, who said he was unaware of the research until staffers sent him an email urging him to stop it. “To prematurely disseminate information about stories in progress compromises reporting,” he said. “There are a lot of reasons, such as potential legal [issues], fairness, accuracy and completeness.”

Emailing summaries of upcoming news stories to 9,000 people seems particularly inadvisable in a competitive news town like Chicago, where the Sun-Times, Huffington Post-Chicago, ESPN Chicago and several enterprising broadcast outlets would be only too happy to spoil any pending Trib scoop.

The inelegant execution of the Trib project should not be taken as an argument against the value of blending consumer sentiment with sound journalistic judgment in editing a newspaper or website.

While editors would not have the time or money to conduct formal polling to determine reader preferences on a day-to-day basis, they can get instant, ongoing snapshots of consumer sentiment by monitoring the traffic on their websites and local Twitter feeds.

Website logs show not only the stories people are reading the most but also which ones they took time to email to their friends. Even though many newspaper sites actually publish a list of most-emailed stories, it is not clear that most editors consider this information when laying out the paper. (This is not possible, of course, when stories are published in print before they appear on the website.)

The editor of a distinguished newspaper in South America told me that he posts stories to his website as soon as they clear the editing process. He watches website activity through the evening and takes the relative interest in each story into account when he lays out the print product at 10 p.m.

This is not to say editors should yield their professional responsibility or news judgment to a stream of meandering tweets.

But taking advantage of the rich empirical data available to modern editors beats the decidedly unscientific research I conducted when I ran the city desk of the Sun-Times in the early 1980s.

While schlepping to the office on the bus and the L, used to peek over the shoulders of fellow commuters to see which stories they were reading. Although I occasionally gleaned some useful information, I also got a lot of dirty looks.

Pulling Boston Globe back from the brink

A simple compromise on lifetime job guarantees is the right answer to breaking the impasse between the Boston Globe and its largest union, the Boston Newspaper Guild.

The compromise would be for the union to abandon the archaic concept of preserving lifetime jobs for its most senior members – and for the Globe to agree to fund an enriched severance payment to any “lifetime” employee who is laid off by the company now or in the future.

Then, both sides can get on with the decidedly unpleasant business of implementing some $10 million in cuts that will come at the expense of the 700 editorial, advertising and business employees represented by the Guild. The company today said it had come to terms on expense reductions with the six other unions beside the Guild that repreent Globe employees.

Difficult as cost cuts may be, they are a necessary step to try to staunch losses that management has said would be $85 million this year. In light of the size of the stated losses, the givebacks requested from the union are moderate, as this sort of thing goes these days.

By all accounts, including this one in the Globe, the Guild has agreed to the $10 million in cuts demanded by management.

But the negotiations evidently have foundered on management’s demand that the union abandon the lifetime job guarantees that were given to some 700 Guild employees working at the company as of 1992, according to this backgrounder in the Globe. Approximately 170 “lifetime” workers remain on the Globe’s payroll today.

The idea of lifetime jobs seems hopelessly quaint in this era of Darwinian globalization, continuous technological disruption and profound economic uncertainty.

It also was born of arrogance on the part of publishers who thought their market supremacy would endure forever and arrogance on the part of unions who once wielded sufficient power to intimidate management into agreeing to this perfectly preposterous proposition.

Apart from federal judges and tinhorn dictators, no one has the luxury of a job for life. And no one should.

At a time management and labor ought to be working closely together to help restore the economic health of the Boston Globe, frustration and fatigue have overtaken common sense and evidently escalated negotiations from a merely unpleasant exercise to out-and-out rancorous one.

If the collective goal is to help the Globe to carry on in as good a shape as possible, then both sides need to bend on the issue of lifetime jobs and get on with the serious business that lies ahead.

Finally, someone makes hyperlocal pay

Richard M. Anderson, a publisher serving four Maine communities, has found a way to generate as much as a fifth of his ad revenue through hyperlocal websites featuring, among other things, blogs that are sponsored and maintained by local merchants. He tells how he does it in this guest commentary.

By Richard M. Anderson

Is the newspaper business sustainable? Not any more. Is the community network business sustainable? Yes. And at the hyperlocal level.

Some people think we’re crazy. We’ve spent the past 12 years developing a community network business. In this model, we take one step backward and two steps forward.

We've stepped back and re-focused on hyperlocal population centers of 20,000 to 50,000 people in four communities in Maine. Why? Because it is in these places, whether urban neighborhoods, suburban villages or ex-urban towns, that citizens are most closely engaged in the practice of democracy at its root level.

This re-focus is possible because the Internet has reversed the flow of information. In the old days, major daily newspapers brought world, national and state news to hyperlocal population centers. Now, reporters, citizens and businesses in these centers share their news and information across the globe directly. No daily paper to monitor and filter the flow.

Our community network model consists of two products – branded web sites we call VillageSoup and separately branded weekly newspapers. We have four newspapers in Rockland, Belfast, Bar Harbor and Augusta. And each one has its own VillageSoup website.

Our community network model began in1997 as an online publication. In 2003, we introduced two weekly papers-of-record to compete with four legacy weeklies. In 2008, we acquired the weeklies, which each were 100 years old.

Our products enhance each other. Professional journalists report news as it happens on the website. Weekly, this news is contextualized, analyzed and printed in the newspaper. Citizens and businesses post timely news and information online and many of their posts also appear in the paper. And two-thirds of our web sites’ front pages are filled with citizen and business posts. We call them, “Neighbors growing together.” Our community networks are the trusted source of news and views.

The most distinctive component of our model are the sponsored postings (illustrated below) that businesses can buy. The posts, which run right next to the ordinary editorial content, are not controlled by us. No fetters, no filters.

In the two most mature of the four markets we serve, the sponsored blogs help generate a large portion of the online sales that collectively generate 19% of our $2.5 million in annual advertising revenues. So far as I know, no other newspaper, not even The New York Times has been able to do this.

The Knight Foundation recognized the value in our business model and in 2007 awarded VillageSoup an $885,000 News Challenge Grant. We are using these funds to redeploy our platform as open-source code for downloading and operating at sites independent from VillageSoup.

We also offer entrepreneurs and legacy newspaper companies the opportunity to join VillageSoup Common using our own variation of the open source code in conjunction with a suite of services from VillageSoup.

Here is how this model works. VillageSoup handles the technical stuff and provides the brand and its promotion. A VillageSoup Common wiki provides a repository of experiences and ideas which empowers small operators to learn and advance in ways not achievable as stand-alone entities.

So, one step back, re-focusing on hyperlocal communities of 20,000 to 50,000 people, and two steps forward – creating hyperlocal community networks sourcing the community, bundling professional, amateur and business content – and generating new revenue from businesses using our platform to inform and serve their customers in the neighborhood and beyond.

While there is much to learn, we are convinced that this evolving community network model will soon be applied to hyperlocal communities around the world.

A tale of two very different journalism start-ups

One journalism start-up tries to restore things to the way they were. The other is looking to a different future. Bill Grueskin, academic dean at Columbia University’s Journalism School and a former managing editor of WSJ.Com, compares them in this guest post.

By Bill Grueskin

You can learn a lot about where journalism is headed by looking under the hoods of two new startups.

The companies – Journalism Online and Publish2 – share a common goal, to help save journalism. But they couldn’t be more different in they ways they’re organized, the backgrounds of the executives or the solutions they offer.

Journalism Online is a weeks-old venture founded by Steven Brill (founder of American Lawyer), Leo Hindery (former telecom chieftain who was the partner of Newsosaur Alan Mutter back in their cable-TV days) and Gordon Crovitz (ex-publisher of The Wall Street Journal, where he was my boss when I was managing editor of WSJ.Com.) Their group vows to provide streamlined ways for publishers to generate online circulation revenue.

In the other corner is Publish2, run by two young guys you may never have heard of, Scott Karp and Josh Korr. Karp ran digital strategy at The Atlantic, and Korr helped develop a Web site for the St. Petersburg Times, but their combined experience is a pittance compared to what the Brill/Crovitz/Hindery team can muster. Still, their company has raised $2.75 million in Series A venture funding and $1 million in venture debt.

The two likely don’t see each other as competitors; indeed, they’re rarely cited in the same article or blog post. But I happened to interview Crovitz and Karp separately one day last week, and was struck by their widely different visions of journalism’s future.

Crovitz is a thoughtful (as in Rhodes Scholar-thoughtful) gentleman who oversaw much of the growth of the Online Journal. In our interview, he outlined a four-pronged strategy, ranging from providing a commerce system for publishers to devising aggressive marketing plans to sell subscriptions across the board for multiple outlets. His group also wants to help negotiate licensing and royalty deals with aggregators, which may explain why they brought attorneys David Boies and Theodore Olson to the company’s board.

Crovitz believes a coordinated effort to build subscriptions could bring scale and lower costs. In the late 1990s, when a one-year WSJ.com subscription cost $49, the incremental cost to serve a new subscriber was $8, Crovitz said. By 2006, the price of that subscription was $99 while the cost of serving the subscriber had dropped to 85 cents.

Brill, who is Crovitz’s co-founder, told Paid Content recently that the technical side of this venture hasn’t been hashed out. “We’re talking to a whole variety of developers,” Brill said, adding that launching an e-commerce site “isn’t rocket science.” (Actually, having seen the pitfalls of an online commerce system, I’d say rocket science is pretty close to what they’ll need, especially if this is going to work across multiple content-management systems.)

Toward the end of our interview, Crovitz brought up an interesting insight. He said his firm would also try to address the “more complex issue” of how publishers long enjoyed “a direct relationship with readers. Now we’re entering an era of multiple devices, and it’s not clear publishers can maintain their relationships with readers online. The device sometimes has the relationship, not the publisher.”

Which gets us to Publish2.

Karp, the venture’s CEO, agrees newsrooms are in a terrible fix, and identifies similar issues about publishers and readers. In the media business, he says, “it’s the package that’s valuable, not the individual article. … Newspapers used to own the distribution channel; they used to be at the front end.” But now, “Google and others have taken over distribution. And newspapers are at the tail end, which is the least profitable.”

Karp wants news organizations to get back to the distribution business by sharing their own content broadly and surfacing others’ content aggressively. That goes against the instincts of many journalists, but even when reporters buy into it, the process in most newsrooms is clunky (lots of cutting and pasting, with links often stuck under the ads). So Karp offers a platform to make that process as seamless as possible.

To see this in action, Karp cites coverage of floods last January in Washington State. As high waters inundated highways and breached levees, editors who ordinarily would compete with each other used Publish2 to learn what other news organizations were reporting and to sharing that content as part of their overall reports. A fuller explanation of that effort appears here, and an example of how this looked on one of the sites appears here.

The idea of journalists surfacing links from other sites isn’t new. What is different is that Publish2 enables sites to fuse content sharing with the reporting process, and it also provides ways for journalists to surface the links they gathered in the reporting process. “Collecting links should be a work product,’’ Karp says. “Newsrooms can use and publish those links instead of throwing away that research.”

Karp is rolling out an ambitious project to track spending in the federal stimulus plan, marrying reporters’ content and citizens’ tips, but – and this is important – always through the lenses of journalists. He calls this as a “new ecosystem” of news, that is, a way of understanding that the Web empowers sharing of information, and that journalists have a special role to play in identifying worthy content and evaluating the quality and credibility of others’ reporting.

To participate in Publish2, you go through a short approval process that includes adherence to an ethics code with standards designed to “separate journalism from marketing, PR, paid advocacy or personal expression, which on the web are increasingly difficult to differentiate.”

So, which vision will succeed?

As Crovitz demonstrated at Dow Jones, a subscription strategy can generate substantial revenue and define a uniquely valuable audience.

But as I wrote a few weeks ago here, it’s very hard to ask readers to pay for a publication you’ve trained them for more than a decade to expect to be free. Is there a single example of this having worked in the media business – or any business? (Readers, feel free to cite examples in the comments section.)

Too often, this strategy is portrayed not as a business case, but as a moral argument, viz., good journalism costs a lot of money, and so readers ought to pay for it. That entails its own risks. Or as Jonathan Landman, deputy managing editor of the New York Times, told alumni of Columbia’s journalism school Saturday, "Imposing a pay wall could be risky without being bold."

Karp’s business model is also uncertain. He foresees paid, commercial applications of his platform, as well as building a broader advertising network among news organizations.

But what Publish2 also represents is a vision of how journalists can take advantage of each other’s strengths and readers’ knowledge, creating content that transcends what any one newsroom can do.

Right before Karp came to my office last week, he visited the New York Times’ newsroom and made a quick convert in Michael Moss, an investigative reporter. Moss has been writing about food safety, and he asked Karp for ways to maximize reader attention to his investigative work.

Karp turned the tables and “suggested reframing the issue by thinking of ways to generate interest before the stories run,” Moss said. So Moss put out a direct appeal to readers for tips.

While Moss says he got at least a dozen “substantial” leads, what was more important is that he is creating “a community of people who are interested in food safety. … They like that they are participating in the creation of investigative stories.”

So there you have it: One new firm seeks to generate much-needed revenue by building a platform for subscription services, another seeks to generate new forms of journalism with a platform to share and distribute content. It’s hard to reconcile those two visions of journalism’s future.

* * *

Here’s an addendum to the points by Crovitz and Karp on news organizations losing their preeminence in the distribution channel. According to Sharon Waxman, Google CEO Eric Schmidt is saying his company will launch an algorithmically based filtering system in six months to surface news “the reader is looking for without knowing they’re looking for it.” That sounds like a turbocharged Google News, personalized without all the muss and fuss of setting it up.

Both the New York Times and Washington Post will “get this treatment,” Waxman writes ominously, and “Google believes it will be able to sell premium ads against premium content.” Will the news organizations make more money? Not directly, said Schmidt, adding only they might get more traffic from Google, which they can monetize on their own.

Diving circulation? Raise newspaper prices

Instead of fretting about the all-time record dive in newspaper circulation the last six months, publishers should focus as never before on the quality, not the quantity, of their audience.

That means, among other things, proving the passion and loyalty of their readers by raising the single-copy and home-delivery prices of their daily papers to at least the cost of a venti, double-shot, half-caf soy latte. They go for $3.90 apiece at the local Starbuck’s.

Serious newspaper readers will be glad to pay the price, especially now that nearly all of them have gotten the message that the industry needs their support to continue producing the product they value.

And advertisers of many premium products and services will gain new respect for a medium capable of attracting affluent, well-informed and passionate individuals willing to spare the price of a venti latte for a newspaper.

As proof that premium circulation pricing works, look no further than The Economist, whose single copies sell for the cost of the approximately 1½ venti lattes. Named the top-performing magazine of the year for the last two years by AdWeek, the Economist in 2008 grew ad revenue by 25.5% last year to $131.5 million and boosted its circulation by 9.2% to 786,977.

The Economist’s success in 2008 compares with the average drop of 7.09% in daily newspaper circulation and an average decline of 5.4% in Sunday sales in the six months ended on March 30 that was reported today by the Audit Bureau of Circulations, the industry-funded body. The record 7.09% decrease in daily circulation in the last six months rivals the 8.1% fall in daily circulation in the prior 12 months.

The decline in circulation is long running, accelerating and seemingly irreversible.

The last time daily newspaper circulation increased was in 1984, when it peaked at an average of 63.3 million papers per day. Using ABC numbers and historic data provided by the Newspaper Association of America, it is possible to estimate that daily newspaper circulation today has fallen to 43.8 million copies. Sunday sales now are 44.3 million vs. an all-time high of 62.6 million in 1990.

The last time newspaper circulation was this low was in the mid-1940s, when the population of the United States was half the size that it is today. Today, only 18 out of every 100 adult Americans buys a newspaper. That is less than half the penetration the industry enjoyed in 1945.

Not surprisingly, metro newspapers suffered the steepest declines in the latest circulation reports. Leading the carnage was the New York Post, whose daily sale plummeted a staggering 20.6%. As you can see from the table below (click to enlarge), the Post was followed closely by the Atlanta Journal-Constitution, Newark Star-Ledger, San Francisco Chronicle and several other double-digit losers.

Many of the drops were self-inflicted, as publishers reined in their distribution areas to reduce the high costs of shipping comparatively small numbers of newspapers to distant counties.

Significantly, the Wall Street Journal, which pursues a premium subscription and advertising strategy was the only one of the top 25 papers to show a circulation gain. Comparatively modest circulation declines were reported by New York Times, which sells in my neighborhood for $1.50 (plus tax) during the week and $5 (plus tax) on Sunday.

After years of increasingly accelerating circulation declines, there can be no denying that print newspapers have become niche, not mass, products. This means publishers need to begin marketing them in a different way.

When the traditional newspaper model was to maximize reach by maximizing audience size, it made sense to keep subscription prices as low as possible to be able to charge advertisers the highest possible rate for the largest number of readers.

“I sell bellybuttons,” said my friend Bob McCormick back in the 1980s. He was an ace ad salesman who at one point headed the agency that published the San Francisco newspapers.

But mass quantities of bellybuttons don’t cut it for most advertisers in an age when they can connect rapidly and oh-so-cost-effectively with a prospect on the Internet by offering an ad that appears only when a customer Googles whatever magic words the advertiser has selected.

Best of all, the advertiser pays only when a prospect clicks on a Google keyword ad; the rest of the dozens of times the ad appears, the advertiser doesn’t pay at all.

Printed newspapers can’t compete with Google, of course, because they are unable to offer targeted, interactive advertising. But they can take a cue from successful magazines by targeting their customers geographically, demographically and in other ways.

By charging premium prices to carefully targeted groups for single copies and subscriptions, newspapers will reinforce the value of the product to their customers and re-establish their value to advertisers.

In so doing, the demoralized practitioners struggling with the challenges of the industry also may end up proving the value of the product to themselves.

Content cops or Keystone Kops?

Beleaguered newspaper and magazine publishers may gain a certain amount of emotional satisfaction from mounting elaborate efforts to chase down online content poachers, but the payback may be more psychic than economic.

While print publishers are well within their rights to crack down on web publishers who violate their copyrights through the unauthorized use of articles and visual media, the simple facts are:

:: There is no efficient way to identify and extract payment from the vast array of web publishers who may be ripping off content.

:: There is a limited population of publishers generating enough money to make the effort worthwhile.

Accordingly, there is a danger that the emerging initiatives among newspaper and other publishers to police content poachers may come to look more like an episode from the Keystone Kops than an effective and profitable business strategy.

If everything were hunky-dory in the publishing business, this exercise in enforcing the value of copyright might worth a shot. It should be noted, however, that the music industry, which has been aggressively trying to battle pirates for 15 years, admits that 10 free songs are downloaded for every one that is purchased.

But things are far from hunky or dory for publishers, as the latest dismal earnings reports attest.
A content crackdown could prove to be a costly and unnecessary distraction at a time that publishers ought to be focusing on controlling the most important thing they can control: Monetizing the visitors and page views at their own sites, an objective that has become increasingly elusive for many of them.

The above conclusions result in part from an effort to gauge the potential effectiveness of tracking down copyright violators by using a service called Attributor, which at the moment represents the industry standard in poacher-nabbing technology.

As you can see from the results of the test-drive here, the state of the art at this writing suggests that a considerable amount of human judgment/capital would be necessary to actually DO something about unauthorized content poachers.

It is not the least bit clear that the cost of pursuing violators ever would be equal to the additional revenue it might bring in. Here’s an example from the test-drive:

I discovered that 99% of one of my posts had been grabbed and republished by a site called Newspapers Watch, which describes itself as written by “Musomar” a "journalist with 25 years of experience" in Malaysia.

This particular site does not seem to carry advertising, so there would be no commercial reason to pursue the author. Even if the site did have ads, the sales would be so trivial – and the hassles of tracking down a copyright violator in Malaysia to complicated – that no one would bother to do so.

This case was not an extreme example. In reviewing all the instances identified by Attributor, I found no violations by a site whose profile or advertising sales were so significant that I would dream of seeking payment.

Based on this admittedly limited test, it appears that it would make sense only to go after only the relatively small number of sites what both use (a) lots of unauthorized content and (b) generate significant advertising revenues.

How many of them are there? Honestly, I don’t know. But, judging from the sampling turned up by Attributor, probably fewer than you would think.

Sites sophisticated enough to generate lots of traffic and advertising revenue generally will be smart enough to avoid copyright violations.

They either will subscribe to syndication services or try to position excerpts from copyrighted articles – see this example from Huffington Post– as fair use. Fair use is the provision of the copyright law that allows snippets of protected content to be used in news stories and reviews.

In other words, online publishers with something to lose either will pay print publishers or figure out ways to continue using copyrighted content for free.

The ones who have little or nothing to lose may well continue to use copyrighted material brazenly. Does it make sense for publishers to hire David Boise and Theodore B. Olson to pursue them?

If the time, trouble and cost of policing content are likely to net only limited amounts of new revenue for print publishers, don’t they have more important things to do?

Attributor test delivers so-so results

Attributor pretty much represents the state of the art these days in tracking down copyright violators. To see how well it works, I took a test drive of the free version it offers to bloggers. The results are fair to middling.

Attributor works by gathering all the content on a publisher's website and then crawling the web to see if it finds sites that have picked up some or all of an article. When it finds a match, Attributor tells you what percentage of the article was used and links back to the site that used the article. In some cases, the quote is highlighted in yellow on the site that used it.

In a test of the free version offered to bloggers, which presumably is less robust than the version sold to major publishers, I discovered many new places where Newsosaur had been quoted that I had not known about before.

Most of the web publishers using Newsosaur content used limited snips from this blog and properly linked back to me. Many of the sites carried no advertising and none of them appeared to be large enough to generate sufficient advertising revenue to make me want to get on the phone to demand my fair share.

As useful as Attributor was, it also missed a number of places where my articles had not only been cited but largely reprinted intact. I knew about the prior instances in two ways: By tracking back inbound links to my blog and through Google agents that alert me when “Alan Mutter” or “Newsosaur” is discovered by Google as it trolls the web.

Attributor also reported a few false positives, including stating that some of my blog had been reprinted – which it had not – on the site of the consulting and investing firm where I am a partner.

Verdict: This is a workable but not foolproof solution. As Attributor grows and indexes more of the web, its hit rate presumably will get better. The product today will require a good deal of human intervention to be useful to any publisher.

3 jailed journalists, 2 very different reactions

Three American female journalists are being held on charges of spying in two of the scariest countries in the world but their news organizations couldn’t be treating the matters any more differently.

Everyone knows that Roxana Saberi, a contributor to National Public Radio in Iran who has been in custody since January, was convicted last week of spying after an evidently coerced confession. You know that, because NPR and other media have been covering the story heavily.

But you may have forgotten that Laura Ling and Euna Lee, two correspondents for Current TV, have been held on similar charges in North Korea since mid-March. That’s because their employer has been maintaining absolute silence about the case.

While you can find 60 mentions of the Saberi case at the NPR website and 16 mentions of her case at Current TV’s site, there is not a word about the plight of Ling and Lee at Current TV. Even NPR has mentioned the Ling-Lee case nine times.

“The most effective thing we can be doing [to help Saberi] is constantly and consistently shining a light on the story,” said Vivian Schiller, the chief executive of NPR, speaking tonight on the PBS News Hour. “It’s the best thing we can do for her.”

In the effort to keep Saberi’s case at the forefront, the network even drew strong support Sunday for the jailed journalist from President Obama.

At Current TV, however, “no comment” is exactly all that chief operating officer Joann Drake Earl had to say today about the case of her two journalists, who were seized at the border between China and North Korea. They had traveled to China to interview North Korean defectors but apparently crossed the frozen Tumen River into North Korea.

It’s not likely that Current TV is any more indifferent to the welfare of its journalists than NPR, but Current TV apparently has been advised to keep a tight lip and low profile in the case so as not to endanger negotiations with the totalitarian and dangerously eccentric North Korean government.

Current TV has been relying on the help of Swedish diplomats, because the United States does not have diplomatic relations with North Korea. Current TV doubtless also benefits from the political clout of former Vice President Al Gore, who is the founder and chairman of the channel.

Even if Current TV feels obliged to hold its peace, there’s no reason for the rest of us to forget about Laura Ling and Euna Lee.

He makes $1 million crowdsourcing sources

Peter Shankman, who describes himself as a marathon-running, sky-diving, cat-loving PR guy, says he is grossing nearly $1 million a year by using the web to help reporters find sources for stories.

He crowdsources sources with a nifty and thoroughly modern service called Help a Reporter Out, or HARO. It works like this:

A reporter who needs to interview someone for a story sends Shankman a request, which he adds at no charge to a three-times-a-day email he sends to some 75,000 recipients who are looking for publicity. The recipients include individuals and fellow flacks.

When a source spots a story where she thinks she can help, she contacts the writer and the connection is made. Shankman says 25,000 reporters have used his service and he reckons that nearly all of them have successfully sourced sources in the “12½ months” he has been in business.

For those too rushed to wait for an email, Shankman also posts urgent requests at his perch on Twitter, which had 37,214 followers at this writing.

The subjects requiring experts in one recent email ran from “spirituality during pregnancy” to families facing mortgage foreclosure to “whoopie pies,” which evidently are a Pennsylvania Dutch confection.

Recent urgent tweets sought “people leaving/ready to leave NYC b/c high taxes,” “bosses w/employees afraid they're going to get laid off so they're sucking up” and “therapists: is facebook coming up more in therapy sessions with clients?”

Reporters seeking sources range from freelancers and aspiring book authors to name-brand news organizations like the Atlanta Journal-Constitution, Fox News, Ladies Home Journal, Christian Science Monitor, Motley Fool and the PBS Nightly Business Report.

Shankman makes money by charging between $1,500 and $2,000 for a short, chatty text ad he runs at the top of each email. Recent sponsors have included a service that helps you contact celebrities, a company that sells computer-security software and the makers of the Dot Girl's First Period Kit.

Shankman says the number of email subscribers and source requests has climbed by the week since he launched the service. The rollout has been entirely viral, with one HARO user telling another, telling another, telling another…and so forth.

To keep up with the demand, Shankman said he has hired one editor and one assistant. That would seem to leave a tidy profit for Shankman to share with his sofa-hogging cats, Karma and NASA.

Shankman says he is an early AOL veteran who then operated a New York-based marketing boutique that once served such clients as Disney and American Express. He also wrote a book explaining why companies should stage “outrageous PR stunts.”

Far from being outrageous, the sources who offer themselves up on HARO seem to be legitimate and useful to the journalists, said Shankman in an all-email interview. He admitted, however, that there have been a few “oops” moments.

One case was a family featured in the Wall Street Journal whose business was “being killed” by the economy, said Shankman. “They’re now doing much, much better,” said Shankman. But even that’s “heartwarming,” he adds, ever the flack.

Don’t blame Google for newspaper woes

Newspaper people are wasting time and wasting their breath in blaming Google for the failure of their products to thrive in the digital universe.

They need to look to themselves – not Google, Yahoo or some other third-party savior – to begin strengthening their franchises and building up their businesses on the Internet.

The airwaves have been clogged in the last couple of weeks with newspaper people alternatively blaming Google for the industry’s problems or begging Google to come to their aid.

Google isn’t responsible for saving the newspaper industry or journalism. Publishers and editors are.

As a rationally managed corporation, Google will do only the things that advance its best interests. The company isn’t going to start paying for newspaper content or sharing its revenues with publishers unless it is required to do so to grow its business, defend its franchise or comply with some as-yet-unenacted law.

For the record, newspapers actually had a head start over Google. But Google “got” the web. And newspapers didn’t. That’s not Google’s fault.

Before you blame Google, consider:

:: Several newspapers launched their first websites by the time Larry Page and Sergey Brin met at Stanford University in 1995 and started noodling on a research project called BackRub.

:: Two or three years before the first public peek of the still-nascent Google in 1998, the ill-fated and short-lived New Century Network had a plan to aggregate the content from 140 newspapers in searchable format for the web. The plan, which included the idea of inserting ads in selected markets at the push of a button, died when NCN succumbed to industry infighting.

:: It was not until October, 2000 – a good five years after most newspapers were up and running on the web – that Google figured out how to make money off its spectacularly growing traffic by selling keyword advertising.

As Google and many other savvy online publishers learned how to capitalize on the openness and interactivity of the Internet, newspaper publishers stubbornly spent the last 1½ decades trying to sustain their once-enviable print business model in the face of overwhelming evidence that everything was changing: technology, consumer patterns and advertiser behavior.

For an excellent example of the sort of opportunities missed by the industry, look no further than this tale of how the Boston Globe blew the chance in 1995 to buy a significant share of Monster.Com for a comparatively modest $1 million.

Or, ask yourself why Dow Jones, the publisher of the Wall Street Journal, never started its own online stock site. Instead, Dow Jones waited until 2004 and spent $520 million to buy MarketWatch, faithfully printing stock listings in the newspaper all the while.

Today, print advertising has fallen off a cliff because consumers find it faster, easier, more timely and more fun to get their news online. Advertisers increasingly are gravitating to online media instead of print, because it is cheaper, highly targetable and the results can be readily measured and analyzed.

None of this is Google’s fault. Blaming Google won’t help.

Newspaper web sales lag by every measure

By every measure, online advertising sales at newspapers seriously trail the growth of the rest of the interactive market in the United States. And the industry is falling farther and farther behind.

The inability of newspapers to capture and retain their fair share of digital advertising likely is one of the reasons that a growing number of publishers are thinking about charging for access to their websites.

Frustration over fast-shrinking online market share also may be why some publishers were so outspoken at their annual convention last week about the revenues they believe they are losing to online aggregators and to web publishers who violate newspaper copyrights by running unauthorized stories on their sites.

Several indicators illustrate the failure of the newspaper industry to thrive online. The following facts emerge from an analysis of sales data reported by two trade groups, the Newspaper Association of America and the Interactive Advertising Bureau:

:: Interactive revenues for newspapers dropped by 1.8% in 2008 to $3.1 billion at the same time over-all online ad sales in the United States surged 10.4% to a record $23.4 billion. See Sales Growth graph below.

:: Where there was only a $6.1 billion spread between annual newspaper sales and total online revenues in the United States in 2003, the gap widened to $20.3 billion in 2008. See Annual Revenue graph below.

:: The newspaper share of online revenues, which peaked at 16.2% in 2005, has declined annually ever since, dropping to an all-time low of 13.3% in 2008. See Market Share graph below.

Although it is reasonable to expect that newspaper market share would shrink in light of the explosive rise of online competitors ranging from YouTube to teeny blogs earning a few bucks a month from a handful of keyword-ad clicks, this argument seems insufficient to explain why online newspaper advertising declined last year when the sales of the over-all industry rose by more than 10%.

One of the reason newspapers trail the over-all online industry is that they offer no search advertising, the largest and fastest-growing category of online advertising. Those are the keyword-driven ads that appear next to searches at Google, Yahoo and Microsoft and other search sites.

Another reason for the under-performance of the industry is that newspapers are inordinately dependent (discussed previously here) on generating online sales from their traditional print advertisers, a business that is in both secular and cyclical decline.

As of the end of 2008, print advertising sales had dropped 23% from a record high of $49.4 billion as recently as 2005. Deep print sales declines likely occurred in the first quarter of this year, too.

The worst part about the print-to-web “upsell” strategy is that a substantial portion of online newspaper revenues historically came from classified ads sold to three verticals suffering mightily in the economic downturn: recruitment, automotive and real estate.

Even before the collapse of the economy battered each of these categories, advertisers increasingly had been shunning high-priced newspaper advertising in favor of sites like Craig’s List, sites targeted to job seekers in particular professions and sites optimized for selling houses or cars.

The only way newspapers can turn around their lagging digital sales performance – assuming it can be turned around – is for them to develop web and mobile venues that are less like newspapers and more like the interactive, viral and fun environments operated by their competitors. (More tips here.)

Newspapers also will need to develop more sophisticated online revenue solutions than selling the dollar-a-holler, backfill ads they use to fill the substantial banner inventory that many of them seem unable to sell on their own.

Why Strib lets print scoop its website

Although most newspapers rush to publish their scoops on the web as rapidly as they can, the Minneapolis Star Tribune has decided to break certain major stories and projects in print and not publish them on its website until a few days have passed. Editor Nancy Barnes tells why she is doing this – and how it’s working – in this guest commentary.

By Nancy Barnes

I’ve gotten more response from readers on my print-first announcement than anything I’ve written in two years.

Most of the comments are very positive, thanking me for rewarding paying customers with exclusive content. A few have called me an idiot and one told my publisher he should fire me and publish it as a print exclusive.

Overall, though, I’ve been pleasantly surprised by the response.

For now, we are holding out the best of the Sunday content, and putting it online on Wednesday. But breaking news, of course, still goes up on our website immediately.

What types of stories are we holding out?

Exclusive investigative pieces, most projects (except those that cannot succeed without the online pieces), deep profiles, mid-range enterprise, etc. In the Sunday paper, we label this as content that is only available in print and we are trying to make sure there is at least one piece in every section.

Why are we doing this?

We’ve been creating so much content just for the web and have had great success in driving traffic to the web that I just wanted to do something for our paying customers.

We don’t believe we will see a significant decrease in web traffic, since so much of that is driven by spot news. But we’re watching. We may expand this model in the future if it turns out to be successful for us.

You can see what stories we are holding out on the web on Sunday, because we promo them as print exclusives on the website. Some of these promos have been getting a lot of traffic, particularly if it is on a topic of great interest.

Last Sunday, for example, we had a story on the collapse of a well-known auto dealer’s empire that we held out only for print. That promo got tremendous traffic.

Some subscribers who read both online and in print have asked me to make the print-first content available to them online in a more timely manner, so they can read any way they want to. This is probably a next step for us.

We’ve only been doing this about two weeks, so I don’t think it’s possible to point to any impact on circulation.

This is an experiment. It might fail.

But I think all of us have to try to do things differently, to challenge the status quo and the groupthink, to find some new ways of doing business. If it doesn’t work, we haven’t lost a thing.

Publishers seek ad block on copyright abusers

Alarmed by what they believe to be widespread piracy of their copyrighted material on the web, some publishers want to force companies like Google, Yahoo and Microsoft to stop serving ads at sites carrying unauthorized newspaper content.

The movement to target the pocketbooks of content poachers emerged this week at a private meeting of top industry executives that coincided with the annual convention of the Newspaper Association of America in San Diego.

The private meeting, which originally was revealed here, was called to address the ways the newspaper industry might respond to the increasingly fierce online competition that has contributed to the 23% decline in advertising sales since the industry booked a record $49.4 billion in revenues in 2005.

While many of the senior executives attending the meeting increasingly are focused on ways to charge for the expensively produced content most of them give away for free on their websites, another top concern galvanizing the participants is what they see as the unfettered use of copyright-protected newspaper stories on websites, blogs and other online venues.

“If a newspaper runs a 26-paragraph investigation and a blogger publishes the entire story on his site, that is not fair use,” said one publisher who participated in the meeting. “Although Google will not argue that publishing all 26 paragraphs is fair use, Google and the other online ad services benefit by selling ads on that blog. The ad services are profiting from the improper use of our copyrighted material. We’ve got to put a stop to this.”

Fair use refers to the exception to the copyright law that permits someone to publish an excerpt of protected content in such cases as a quote in a news story or a video clip accompanying a movie review. The problem with fair use is that publishers and fair users often differ on how much content is fair to use.

The issued was summed up succintly by Eric Schmidt, the chief executive of Google, in a speech to publishers on Tuesday. “Lawyers go to different schools,” said Schmidt. “If you went to School A, you were told one thing [about fair use]. If you went to School B, you were told something else. All the lawyers who work at Google went to School B. All those on the other side went to School A.”

What this means in practice is that allegations of fair-use violations can only be resolved in court on an after-the-fact, case-by-case basis – and only when a publisher is sufficiently aggrieved to devote the time and expense necessary to sue the party accused of publishing the disputed content.

But publishers don’t want to expend their increasingly precious resources scouring the web for content poachers and then hauling them into court.

Instead, a number of them want to begin adding a bit of computer code to every copyrighted story and telling such online ad services as Google, Yahoo, Microsoft and Value Click not to serve ads to any page containing a story carrying a copyright tag. After putting the ad services on notice, the publishers presumably would watch for infractions and, if necessary, challenge the deep-pocketed companies in court.

Tagging technology already is used to track Associated Press stories to see where they go on the web. Evidence of the widespread misappropriation of AP stories is why publishers have become sufficiently alarmed to consider seeking similar protections for their own articles, images and videos.

In addition to the technology solution, the publishers also discussed a separate but parallel initiative to lobby Congress for changes to strengthen copyright protections in the Digital Millennium Copyright Act of 1998. “The law was passed in the days of Prodigy and CompuServe,” said a publisher. “It’s way out of date today.”

The other hot topic among newspaper publishers this week was whether and how to begin charging for at least some of the content on their websites.

Participants in the private meeting, which was attended by an attorney to ensure the talks didn’t stray into inappropriate territory, said that publishers do not appear to be inclined to adopt a common, industry-wide protocol for charging for content. “There is a general feeling that newspapers cannot get together” on charging for content, said the participant, citing the group’s fear of being accused of engaging in anti-competitive conduct.

“There also is still a lot of confusion and trepidation about charging for content,” said the publisher. “If you take a 180-degree turn in the road, it is not easy.”

The last rant: Failing papers ‘bring me joy’

The more the problems of the media mount, the more that newspaper-bashing comments are flowing to this blog. As of today, the media bashers can save themselves the trouble, because I will reject them, one and all.

Before I turn off the spigot, I want to share the mother of all anti-MSM rants to illustrate the virulent hostility that many feel toward the press. Journalists and publishers ought to know what they are up against. After taking note, they should move on to more constructive pursuits.

The following 1,181-word broadside scourges journalists, publishers and even journalism educators, whose ranks I joined earlier this year as a member of the adjunct faculty at the Graduate School of Journalism at the University of California at Berkeley.

Like the authors of most such efforts, the writer is anonymous. (UPDATE: The ever-vigilant Mark Potts notes that, unbeknownst to me until now, a similar version of this post appeared at AngryJournalist.Com.) And now, here’s the last anti-media rant you’ll see on this blog:

By Anonymous

Seeing newspapers fall apart brings me joy. Not for those suffering loss of income of course, but rather I see a tremendous opportunity for entrepreneurs to serve customers for social gain and profit.

In their present incarnation, newspapers are regional monopolies of sales and distribution of display advertising. As such, they charge exorbitant fees for their advertisements to support and protect their monopolies – leaving few resources actually to gather news. I left that business after I witnessed the way the monopolists practiced it.

Entrepreneurs exist to slay bloated, mismanaged so-called businesses just like these. And monopolist newspaper owners know this. That is why they have developed – for decades, at every deliberate step – a program of undermining competitive business practices.

For this reason, we all want to see them fail, no matter the cost or collateral damage.

Joint operating agreements demonstrate the most obvious example. Natural monopolies define the business. High barriers of entry: fancy offset web color printing presses, wide geographic house-to-house distribution and big staffs.

The way the business was originally established, it was very difficult to gain a foothold. Only the most daring would spend the amounts of money required to compete.

To punish them, media owners with political influence convinced lawmakers to permit the ultimate competitive abomination, the joint operating agreement. A JOA allows a single capitalist to take control of two separate, supposedly competitive media entities to extract the profit from both.

The solution to the economic equation admits two variables: capital and labor. The JOA allowed a constraint against competitive capitalists, but what about competitive laborers?

This was the only business that was allowed to hire child labor into the 1980s. I know: I was a legally employed child laborer employed by a monopolist newspaper corporation operating under a JOA in the 1980s. I woke up at 6 a.m. to throw papers on doorsteps at $0.15 apiece plus tips.

The only reason newspapers stopped hiring children was because eventually they realized they could hire ex-cons with driver’s licenses and $800, gas-guzzling, 15-year-old clunkers – and pay fewer of them the same rate as the children they once employed!

But it’s worse than that.


I am convinced these monopolists loaded up journalism schools with operatives to teach students one thing: that journalists should not expect high wages. Then, drape the profession in the flag and a noble patina and inculcate students with the expectation of low pay.

The monopolists installed these operatives at places like Columbia and Northwestern who charge how much for a degree? What other profession trains their workers never to expect to be successful? Why should any worker providing a valuable service to millions of customers not expect to become wealthy? Was it this way in the days before large monopolies took over?

I expect when there was competition among producers – a time when being a journalist was not defined by possessing a qualified university liberal arts degree – a journalist would expect her superior talents would allow her to rise up the income ladder, as with other industries.

The journalist laborer’s expectation of low wages – repeated from the first j-school professor to the last suburban line editor – comes from the top, BY DESIGN, as a cost of protecting the monopolist profit.

Who endows and supports these positions politically within the university system? What sort of academic credentials does a typical journalism professor possess, compared to, say, a physics or law professor?

A guy with a J-school degree and 20 years experience as a mid-level night city editor is damn happy to get a square 9-to-5 teaching gig with benefits. And he owes a debt of gratitude to his benefactors. This is a perverse way to train professionals but a great way to ensure cheap labor.

What is happening to all these journalism degree holders now after being laid off and forced to compete in other fields? What is the value of that credential, training and newspaper experience? I believe the monopolist extracted it.

The monopolists also get away with providing an inferior product: day old news wrapped in layers of plastic weighing five pounds. The informational, or “news,” yield of news versus total ink content is probably less than 30%. The commercial yield is, let’s say, 20% of coupons and information about other commerce.

The rest is literally garbage. This thing is dumped off at your doorstep (if you’re lucky) by someone possibly an ex-con (which is not to say that describes ALL delivery people, but such people find it easier gaining employment as newspaper deliverers than fast-food cashiers. And excellent fast food cashiers probably expect raises or they work somewhere else).

The opinions are usually unhinged screeds rather than sustained appeals to reason. If someone made arguments like these in another professional context, how long could they keep their jobs? Maureen Dowd calls George Bush ignorant names. Pulitzer-Prize opinion maker Cynthia Tucker calls white conservatives racists because they’re white conservatives.

These are not arguments. And at their worst they are dangerous incitements. Karl Marx at least presented an argument, even if it was against monopolist behaviors exemplified by the employers of Maureen Dowd and Cynthia Tucker.

And the reporting. Of the news-ink to total-ink content described above, celebrity and sports coverage is probably close to 50%. Wire coverage from distant areas, say, another 20%, leaving about 30% for local news. Obviously the monopolist knows the cost of celebrity and wire news compared to local original reporting.

As a former reporter myself, I realized that the newspaper was a ridiculously inefficient means of getting valuable local information to people in the community compared to what is technically and economically feasible.

The newspaper paid me a wage to collect information about a local area. I went out and conducted interviews with important officials lasting many hours. I collected data on important meetings, reviewed legal proceedings, observed political processes, etc. I collected thousands of documents, maps, spreadsheets, court filings and pages and pages of interview notes. Now reporters collect other images, audio and video.

One day of solid reporting could literally return many, many megabytes of valuable data about a community. The result – a two paragraph brief that runs on page D-16 usually presented outside of any useful context.

Other than the low pay, this to me was the most dispiriting aspect of reporting. Most of it was literally a waste of time. Under this scenario, how does one worker stand out from another when it’s so difficult to publish the reporting? By kissing a lot of ass, that’s how.

Consequently, ignorant incompetents abound at high levels and quality and working conditions suffer. But the monopolist does quite well, thank you.

I guess my point here is that there is nothing about the practice of daily journalism (and perhaps journalist training) that could not be improved by eliminating these toxic monopolist practices that pervert newsgathering and presentation.

Going from natural monopolist perverse newsgathering to competitive market newsgathering requires one first crucial step: That the monopolists fail.

It will be difficult for any lean, focused newsgathering operation to gain a commercial identity in the shadow of these monsters.

Berkeley sets media-tech leadership summit

A unique, invitation-only conference for senior leaders of technology and media companies will be convened at the Googleplex this the fall by the University of California at Berkeley.

The UCBerkeley Media Technology Summit, which is being sponsored jointly by the Graduate School of Journalism and Haas School of Business, will be held from Sept. 29 to Oct. 1 at the Google campus in the heart of Silicon Valley.

In addition to my teaching duties as a member of the adjunct faculty of the journalism school, I also have been organizing the conference with the guidance and support of Dean Neil Henry and Assistant Deans Gina Rieger and Paul Grabowicz.

The conference is intended to provide the leaders of traditional media companies with new insights into the technologies, consumer behavior and advertising systems that will affect their businesses at a time of momentous change.

At the same time, we aim to memorably underscore the value – and values – of journalism for the participants attending from the technology companies. Those values, of course, are objective inquiry, balanced reporting and effective storytelling.

The intimate nature of the event, which will include a number of opportunities for participants to mingle socially, is designed to provide maximum networking opportunities for some 70 invited leaders from two industries who do not often have the opportunity to interact with one another.

More details are here. To get further information about the conference in the future, please add your name to the mailing list here.

Publishers zero in on charging for online news

The way to charge for digitally delivered content is a prime topic on the minds of the newspaper publishers meeting in San Diego this week to contemplate the future of their badly battered industry.

Even if charging for online or mobile content is not publicly discussed at the annual meeting of the Newspaper Association of America, participants have confirmed that significant private talks on the subject are taking place among several of the chief executives convened at the Manchester Grand Hyatt Hotel.

The under-the-radar discussions include a sit-down among several CEOs – held quite separately from the convention under the guidance of a lawyer to ensure the talks don’t stray into inappropriate territory – that would be similar to a confab where many of the same leaders discussed the industry’s challenges in January, 2007. Despite the deterioration of the newspaper business in the intervening time, no similar session has been held since then.

In addition to discussing whether and how to charge for the expensively produced content that today is available for free at most newspaper websites, publishers familiar with the agenda for the private session said other topics were:

:: How to recover some of the classified advertising business that has been usurped by Craig’s List and others.

:: Whether to demand payment from aggregators who now freely link to content from their sites.

:: How newspapers might get a greater share of the $10.8 billion in search revenues that represented 46% of all U.S. online advertising revenues in 2008.

Publishers are focusing on charging for at least some of their now-free interactive content because they are desperate for new revenues to replace some of the $11.6 billion in ad sales that have vanished since 2005.

Advertising sales, which produce the vast majority of industry revenues, plunged 16.7% in 2008 to $37.8 billion. That is a 23% drop from the record $49.4 billion in sales achieved by the industry as recently as 2005. The deterioration this year appears to be continuing, if not accelerating, in the scariest economic environment since the 1930s.

Publishers also seem to be recognizing, albeit perhaps belatedly, that further cost-cutting in their newsrooms will degrade the thing that differentiates them the most from all other web competitors: Authoritative and original local content.

At the same time, drastically slumping banner ad rates – they fell by some 50% in the last year – have made it clear that there is no point in generating traffic by giving away free content if you are filling a substantial portion of your online inventory with ads netting as little as $1 per thousand views.

Although publishers may not rush home from San Diego to declare that they are going to start charging for online content, there are few among them who already have not ordered intensive internal studies of the business models and implications associated with implementing a pay strategy.

After comparing notes in San Diego, the executives may come to recognize that the number of publishers willing to charge for at least a portion of their online content is approaching sufficient critical mass that they may be able to pull it off.