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.