Monday, August 29, 2005

Jailbirds, not of a feather

While Martha Stewart is capitalizing on her recent release from federal prison by launching two new television shows, Judith Miller has fallen into the media’s black hole. How could our values be so twisted?

Jailed for 55 days – and counting – for refusing a court’s order to identify the sources she may have interviewed for a story she never wrote about a crime that may not have been committed, Ms. Miller has all but dropped out of sight. Ms. Miller as of today has been jailed longer than any other reporter who has declined a court's order to reeveal a source.

In going to jail, she is paying a dear price for her commitment to safeguarding the identity of her confidential sources, a valuable tool that helps the press report on otherwise-inaccessible matters of compelling public interest. In every state but Wyoming, the law in most circumstances shields reporters from being compelled by courts to identify their sources. Ms. Miller is involved in a federal case, where no such protection exists.

If you require further persuasion as to the merits of a federal shield law and the inappropriateness of Ms. Miller's prosecution, perhaps Bob Dole, the old GOP warhorse, can convince you. In a newly published op-ed, he calls the case "baffling."

Based on the meager available accounts of her confinement, Ms. Miller, who slept on the floor in the early days of her imprisonment, has limited access to the outside world, save for whatever "reality" show happens to be on the communal television in her cellblock. Attired in a denim jumpsuit marked “PRISONER,” she can’t connect to the Internet (not such a bad thing, perhaps) and seldom has been allowed outdoors. Outbound mail, phone calls and visitors are limited, too.

Meantime, Martha Stewart, who was convicted of lying about her involvement in insider trading of a biotech stock called Imclone, held a press conference last week to plug her upcoming TV shows. She even playfully bared a bit of ankle to show off the soon-to-be-removed transmitter the feds have used to monitor her movements during her parole.

In an upcoming episode of one of Martha's TV shows, the audience will be composed of 150 women who have knitted ponchos similar to the one Martha wore when she boarded the private jet that whisked her from federal prison to home detention at one or another of her elegant estates. (The poncho was a parting gift from a fellow inmate.) More than 1 million copies of the poncho pattern have been downloaded over the Internet, according to the yarn company that seized on the phenomenon in pursuit of its 7½ minutes of fame.

So, Martha gets to fatten her $895 million stake in her eponymous company, while Judith Miller chills in the jug.

Ms. Miller almost certainly will write a book about her experience and, ankle bracelet or not, will gain a moment or two of media exposure before she presumably returns to her comparatively impecunious position as a correspondent for the New York Times.

But Ms. Miller, whose only crime was defending her principles, will never make the fortune Martha has amassed by blanching haricots and chiseling on her Imclone stock. With any luck, though, maybe Ms. Miller can learn to make a poncho.

Tuesday, August 23, 2005

In defense of geezers

Dan Rather would be sitting in the anchor chair today if CBS had employed some of my fellow geezers in its newsroom. But he isn’t, because the network evidently didn’t.

Now, other media companies, eager to lighten their payrolls by eliminating comparatively high-paid older staffers, are fixing to make the same mistake.

Among them is the St. Louis Post-Dispatch, which is offering employees over age 50 “a generous early-retirement incentive that rewards long-term employees who have helped make and keep our newspaper strong,” according to a P-D memo posted online by Jim Romenesko of the Poynter Institute. “It is unlikely that an offer this generous will be offered again,” the memo generously advises.

Easing older staffers out the door admittedly is a good way to trim payroll costs. They tend to make more money than younger colleagues, they tend to elevate the company’s medical-insurance premiums and they tend to cost more when it comes to funding 401(k) or other retirement plans (if any).

We’re not talking about geezers costing tons more than thirty-something employees. But every little bit will help Lee Enterprises pay for the recent $1.46 billion purchase of the P-D and its sister properties.

Because geezers are older, they are prone to being set in their ways and arguably less adaptable to new things. Chicago columnist Jack Mabley famously declined to part with his treasured wooden swivel chair and San Francisco’s late, legendary Herb Caen refused to the end to yield his trusty manual typewriter.

Notwithstanding their idiosyncrasies, older people possess (generally) sound judgment, valuable perspective and a significant amount of institutional memory. Accordingly, businesses operate at some peril to themselves when they attempt to institutionalize older workers before their time.

Proof of this is Dan’s rather ignominious departure from CBS after his last big scoop blew up in his face.

The scoop, you will recall, dealt with a handful of 1970s-era memos that seemingly added new credence to the charges President Bush shirked his National Guard duty. The problem with the neatly typed memos, as alert bloggers quickly observed, is that they were neatly typed in Microsoft Word, which was not created until a full decade after the memos ostensibly had been authored.

As any geezer could have told you, an authentic memo written in the 1970s would have been produced on a typewriter, whose output looks significantly different than the proportional typeface manifest in the now-discredited Rathergate manifestos.

Unfortunately, this fatal flaw was not spotted by the eager young staffers at CBS. Or, by Mr. Rather, who frankly should have known better.

The innocence of the youthful staffers, though unfortunate, is understandable. While Dan’s fumble could be taken as an argument for expeditiously pasture-izing all geezers, I prefer to believe it was the type of mistake that could have made by an egomaniacal anchorman of any vintage.

Buyouts or otherwise, the laws of nature assure that all geezers inexorably will pass on. Before they do, the 20-, 30- and 40-year-old virgins working in America’s newsrooms should learn as much from them as they can.

Monday, August 22, 2005

The imps who gorged too much

F. David Radler, the second banana to press lord Conrad Black, once quipped that his contribution to journalism was the concept of a "three-man newsroom" in which two of the occupants sold advertising.

In his next engagement, it looks like witty Mr. Radler will be appearing at Uncle Sam’s House of Blues. If he pleads guilty, as anticipated, to his role in the alleged fleecing of $32 million from the shareholders of Hollinger Inc., he faces five years apiece on seven counts of assorted fraud.

Until jettisoned in 2003 amid cascading revelations of corporate misdeeds at Hollinger, Mr. Radler had been the publisher of the Chicago Sun-Times, where he made miserable the lives of many of my friends and cherished former colleagues, as well as plenty of good folks I never had the chance to meet.

In merciless slashing after assuming control of the paper in 1994, Mr. Radler cut the newsroom by 28% to 185 journalists. He also cranked editorial policy so far to the right that the traditionally conservative Chicago Tribune emerged as “the city’s moderate voice,” according to Chicago Magazine.

The Sun-Times continued to pay the price for Mr. Radler’s cynical reign after his departure, when it was censured a year ago for systematically inflating its circulation to overcharge its advertisers. The circulation fraud was uncovered – and promptly reported – by the paper’s new publisher, John Cruickshank.

Through it all, the people of the Sun-Times have continued to publish a smart, gutsy tabloid that’s tough on City Hall corruption yet a tender advocate for the city’s down and out. After enduring a succession of such colorful owners as Rupert Murdoch, Robert Page and Conrad Black, this staff deserves a Pulitzer for perseverance.

When Mr. Radler was indicted last week along with former Hollinger attorney Mark Kipnis, Lord Black was conspicuously mentioned as the “Chairman” but conspicuously unindicted. After cutting a plea agreement for himself, Mr. Radler is expected to help provide the information necessary to bring to justice his long-time partner in alleged crime.

The men bought their first newspaper in 1969, and later sold it at a tidy gain. Warming to the publishing business, they acquired over the years the Sun-Times, the Jerusalem Post, the London Daily Telegraph and many other publications across Canada and around the globe.

Mr. Radler is a native of Montreal whose father ran a French restaurant called Au Lutin Qui Bouffe, which translates roughly as "The Imp Who Gorges Himself." He was the quiet Mr. Inside to Conrad Black’s Lord Overlord.

Although Mr. Black also was born a Canadian, he so coveted a peerage that he renounced his citizenship -- and twisted enough arms in Parliament -- to be named Lord Black of Crossharbour in 2001. Crossharbour, incidentally, is a commuter-train stop near the Daily Telegraph’s publishing plant in the Docklands of London.

The Lord and his vassal used their newspapers to maximize profits and settle political scores. Along the way, according to the indictment, they wrongfully created a series of complex sweetheart deals to vector profits from their shareholders into their own pockets.

Now, it looks as though the imps who gorged too much are finally going to choke on it.

Thursday, August 18, 2005

Book ’em, Google

Book (and other) publishers understandably have risen up angry against Google’s fast and loose appropriation of their copyrighted material, but they ought to capitalize on this nifty new business opportunity instead of battling the inevitable.

Faced with an outcry from publishers opposed to Google scanning their copyrighted books into a searchable online database destined immodestly to contain every title in the world, Google last week suspended until at least November the digitization of copyrighted material from publishers who have not given explicit permission for their volumes to be added to the database.

Invoking the “fair use" doctrine of copyright law, Google had taken the position that it can lawfully excerpt words and pictures from copyrighted material in the way a reviewer can quote a passage from a book or a magazine can publish a still photo from a movie. The company’s aggressive use of fair use is at the heart of a lawsuit filed earlier this year by Agence France Presse, which objected to the appearance of its copyrighted material in Google News.

As discussed previously here, “fair use” is a murky concept that only lawyers can love. It’s easy to claim fair use when you are lifting something from someone else’s protected work, but it may be costly to defend yourself if someone decides to haul you into court for violating his copyright. If you are the liftee, which publishers in this case are, you can’t just call a copyright cop. You have to hire a lawyer yourself to sue the alleged offender.

Though some publishers have the appetite to, as it were, throw the book at Google, few have the financial wherewithal to outlast a $77.8 billion company planning to top up its $3 billion bank account with a tidy $4 billion public offering.

Since the publishers aren’t likely to outlast Google in court, they may as well join the company in developing a lucrative new business for themselves. Not only will broad online exposure sell more books in the usual way at Amazon.Com and in stores, but it also will create the opportunity to sell parts of books at premium prices delivering juicy margins.

It’s a wonder that publishers, a generally cerebral set, haven’t figured this out already, but they can make much more money selling a chapter or collection of chapters online than by selling the physical books from which they are extracted.

When a portion of a book is sold online, the publisher can charge a premium price while entirely avoiding the prodigious costs involved in printing and shipping a physical volume. Apart from paying a royalty to the author and a sales commission to an online partner like Google or Amazon, the publisher faces absolutely no additional costs. When chapters are sold online, moreover, there are no embarrassing unsold copies to be remaindered.

Way back at the turn of the century (20th to 21st, that is), several dozen companies, including one headed by me, tried their darndest to convince publishers that they ought to sell their material online to the ever-growing number of people who look to the web first when researching everything from where to buy a car to how electricity works.

The publishers of books, trade journals, academic reviews, high-end market research and lots of other content were intrigued – but they held back for fear that their valuable content might be passed from the legitimate purchaser to a hoard of cyber-freeloaders. Got that covered, we told them. We not only can host and sell your content, but we can wrap it in digital-rights management software to protect it from unauthorized use, so only the rightful users can consume the content in the manner to which they are entitled.

With a few rare exceptions, however, it was no sale. Although publishers spent months, even years, exploring the concept, they never took the plunge, because it’s not how their forefathers did business in the 17th, 18th and 19th Centuries.

Today, Google is forcing the issue. But Google also is forcing publishers to do something that will be enormously good for them.

In creating the largest audience in history for books and other valuable copyrighted content, Google will expand immeasurably the market opportunity for publishers of all sizes and stature. It will enable an efficient, high-margin, low-risk sales opportunity for not only publishing houses but also for independent authors who choose to sell their works directly via the growing digital catalogue.

This could be either a good thing or a bad thing for publishers. As the breadth and depth of Google Print expands, it may become increasingly appealing to authors to self-publish their work, where they will do substantially better than the buck or two they now make on every copy sold. (Once a book is typed on a PC and turned into a PDF, it’s easy for Google to index it and the author to email it to the reader who buys it.)

Maybe the possibility of being squeezed out -- rather than the issue of copyright infringement itself -- is what’s really upsetting publishers the most.

They'll need to get over it and get busy. Or, there will be a surprise ending they won't like.

Tuesday, August 16, 2005

Jonesin’ to sell Dow Jones

Although it’s like carrying coals to Newcastle to give financial advice to the owners of the Wall Street Journal, this is not the best time to consider the sale of Dow Jones. The publisher should fix its business first.

The price of DJ’s stock rocketed when no less an authority than the New York Post reported that restive members of the Bancroft family, which owns a controlling interest in the company, would like to see the company sold. Although a representative of the family sought to tamp down the boomlet, DJ’s shares rose 11% on Tuesday to close at $41.14, the biggest one-day gain in a decade.

Most other newspaper shares jumped, too, in the sort of knee-jerk market reaction that is more jerk than knee. Although ardor and newspaper stocks cooled after a good night’s sleep, that didn’t stop Wall Street analysts from doing some analyzing.

One of them, Paul Ginocchio of Deutsche Bank, put his finger on perhaps the biggest problem at Dow Jones: The flagship Wall Street Journal is generating less than half the revenue per issue than the New York Times, the only paper that can be compared fairly with the Journal.

Average daily circulation for the Journal was 1.8 million copies in 2004 vs. 1.13 million for the NYT. But the NYT also sold nearly 1.7 million Sunday papers.

“For the latest 12 months, the New York Times generated revenue of approximately $4.56 per print paper circulated vs. the WSJ at $1.97,” reports Paul. “This significantly lower revenue per paper for WSJ…is taking place despite a better reader demographic at the WSJ.”

The discrepancy underscores the need for the Journal, which now publishes only Monday through Friday, to launch the weekend edition debuting in mid-September. The weekend Journal will blend its staple business news with what publisher Karen Elliot House called “the pleasure of the weekend."

If the weekend Journal is a hit, the paper presumably will help DJ’s stock after the considerable start-up costs are digested. If the weekender is a dud, things will get ugly in a hurry.

In the meantime, the company has attempted to diversify its holdings and build its online presence by acquiring MarketWatch.Com. The pricey MarketWatch acquisition effectively caused the Journal to double down its bet on a volatile advertising base.

With DJ inordinately dependent on national financial advertising, it is vulnerable to glitches in the business cycle, which even a fabulously successful weekend paper will not buffer. “If the economic recovery falters or if the next business cycle is delayed or weaker than expected, DJ shares could suffer,” says Paul.

Notwithstanding this week’s increase in the stock price, Paul believes DJ is worth between $50 and $55 a share to such potential acquirers as NYT; Gannett; Warren Buffett and/or his friends at the Washington Post, or Rupert Murdoch and his News Corp.

One thing is sure: A low-ball takeover would not be welcome in DJ’s executive suite.

The options of most senior execs “are priced in the $52 to $61 range,” explains Paul. “They would not want the company sold in the low- to mid-$50s, as they really don’t start making good money unless the company is sold in the mid-$60s.”

It is safe to say, therefore, that there’s no jones to sell Dow Jones at Dow Jones.

Monday, August 15, 2005

Eclectic shlock

Americans on average will consume two hours more electric, eclectic and elective media per day in 2008 than they did a decade earlier. But will it be effective?

Veronis, Suhler and Stevenson, the New York media investment bank, predicts in its annual industry review that Americans will consume more than 11 hours of media per day in 2008 vs. 9 hours in 1998. That’s an increase of 22%.

If VSS is correct, we are destined to spend an average of six hours a day watching television in 2008, or 27% more time than squandered tubeside in 1998. As illustrated at right, this includes the viewing of broadcast, cable and DVDs.

Radio will suck up the next biggest chunk of time at a bit more than three hours a day, a gain of 23% in the 10-year period.

On a percentage basis, Internet use will have grown the most, climbing 505% to two-thirds of an hour per day. Other major gainers are games and home video, whose consumption is expected to double.

The use of recorded music, magazines, books and newspapers is expected to decline by stiff, double-digit percentages.

So, we are confronting not merely the vice of media gluttony but a decidedly unheathy diet of empty info-calories, too.

Thursday, August 11, 2005

View from the caboose

Legacy media companies are living on borrowed time, but they don’t know it, because they are riding in the caboose, which provides a superb view of where you have been – but not much perspective on where you are going.

Notwithstanding the usual ups and downs of the marketplace, traditional publishing and broadcasting companies to date largely have sustained sales at historic levels, even as they battle to achieve the steady revenue and profit growth demanded of such vast and valuable enterprises.

As previously discussed, however, average newspaper ad revenues were desultory in the first half of the year and the broadcast networks were at pains to get upfront sales this fall to match those of last year. Much as executives might like to attribute the softness to the vagaries of an admittedly vague market, something far more profound is happening.

Advertisers are getting ready to shift ever-larger percentages of their budgets into the interactive media that enable them to efficiently target their messages to well segmented audiences. An added attraction for advertisers, of course, is the fact that the results of interactive media campaigns can be closely monitored, objectively measured and rapidly tweaked to improve results.

After wondering why media companies can’t seem to grasp this looming challenge to their long-comfortable way of life, the answer came to me while playing with a 2½-year-old friend and his new wooden train. And it is this:

The legacy print and broadcast companies ride so far back in the train of commerce that they not only are isolated from consumer sentiment but also from the alternative media strategies that savvy marketers are devising to reach their customers. Take a look and you will see what I mean:Viewing the above illustration from left to right, the consumer is the engine that drives all commerce, whether the item in question is a skateboard, a refrigerator or the CBS Evening News. If she’s not buying, you’re dying.

The consumer product brands are the closest to the customer. As the foremost students of human behavior, they thoughtfully use that knowledge to satisfy and shape consumer demand. One consumer-products company possessed sufficient insight into human nature to know, even before we ourselves were aware, that we needed air fresheners that could be activated by plugging them into an electric outlet.

Retailers are the vital middlepersons connecting customers and the brands. To some extent, merchants take their cues from the consumer, but the economics of retailing are influenced greatly by the incentives the brands pay merchants to sell their products. Supermarkets demand slotting fees to assign shelf space for ketchup and freezer space for Popsicles. Car dealers get sales incentives from the automakers and home centers collect co-operative advertising dollars from tool and paint companies.

Bringing up the rear are the media companies, whose customers are not the consumers themselves, but rather the brands and the retailers who buy the ads. The media business is based on satisfying the here-and-now needs of consumer brands and retailers, who buy advertising by the week, the month and the quarter. The primary job of media executives is to ensure that they get their fair share – or, ideally, better than their fair share – of the available dollars in a given period.

Media companies would be fools to not take the money and run. But they would be even greater fools to believe that the advertising marketplace of the future will resemble the one of the past.

The legacy media companies need to remember what happened to cabooses. They were sidetracked permanently by railroads 20 years ago when new technology made them unnecessary. Any remaining cabooses are strictly museum pieces.

Saturday, August 06, 2005

The tortoise and the hare

Viacom’s P&L is a perfect metaphor for the difference between the prospects of the legacy media and the new media of limitless choice that increasingly are becoming, well, the new media of choice for consumers.

The legacy part of Viacom, of course, is the CBS broadcast network, which is to be spun off as a separate company in early 2006 from the hotter, newer, faster growing and staggeringly more profitable MTV, Comedy Channel, BET, Nickelodeon, CMT and other cable assets.

In the second quarter of this year, revenues for both Viacom divisions were almost identical at $2 billion, give or take. After that, they are as different as the tortoise and the hare.

Second-quarter sales for cable were 14% higher than they were a year ago, while revenues for broadcast were down by 1% in the same period. In the first half of the year, cable revenues were up 17% at $3.7 billion and broadcast volume was down 3% at $4.2 billion.

The cable business was fully 62% more profitable than the broadcast division in the second quarter, delivering $711 million in operating income vs. $439 for the broadcasting unit. In the first half of the year, results were similar, with cable reporting 58% higher profits than broadcast, or, respectively, $1.3 billion vs. $744 million.

CBS falls squarely into the one-size-fits all, mass media broadcast paradigm. Its TV and radio stations depend on gathering the largest possible audience with programming that appeals to the broadest, if not to say the lowest, common denominators.

The cable channels have much smaller audiences, but their programming is aimed at viewers who fall rather neatly into the predictable segments prized by advertisers eager to efficiently target their message.

The cable networks are capable of producing much higher profits, because they spend far less on programming than their broadcast cousins. As any insomniac knows, much of cable programming is filled with comparatively low cost repeats of repeats of repeats of old cable, or even older, broadcast shows.

Broadcasters, on the other hand, shell out considerably more for first-run shows, access to major sporting events and their in-house news divisions, though the latter lately have been in the cost-cutting crosshairs.

To its credit, CBS is trying new stuff to turn things around. For one, it is planning to turn the CBS News website into some sort of CNN-style affair, updated continuously with news, video and such.

But the most intriguing online breakthrough is Big Brother. For only $29.99, you can spy via 24/7 webcam for three months on a household of self-absorbed, twenty-something exhibitionists doing whatever it is that they do.

My question is this: While you are watching them, will they be watching MTV?

Thursday, August 04, 2005

Swap meat

Though some critics regard the unprecedented newspaper swap engineered by Gannett and Knight Ridder as little more than rearranging the deck chairs, the moves are a sophisticated approach to managing their assets.

Shuffling portfolios, even in a sophisticated way, won’t alone solve the problems of declining circulation, shrinking advertising market share and eroding reader confidence. But concentrating assets in tight, efficient clusters is one sensible step toward equipping newspapers to be more viable competitors in the age of good, fast and cheap new media.

Newspaper companies for some time have been building or buying non-daily publications in the markets where they operate, so as to better serve advertisers, readers and the legitimate interests of their investors. More on this in a moment.

The fresh twist in the Gannett-Knight Ridder swap is that these operators have signaled a willingness to trade long-held franchises in one place to gain greater dominance in markets they covet elsewhere.

Gannett bought the Tallahassee Democrat from Knight Ridder to beef up its holdings in Florida, while Knight Ridder acquired three Gannett papers in the Pacific Northwest. In a tripartite transaction, Gannett also bought Knight Ridder’s interest in the Detroit Free Press and sold its own stake in the Detroit News to MediaNews Group.

Commentators with particular affection for one newspaper or another denounced the ownership swaps as cynical financial maneuvering, which I suppose you could say it is. With all due respect to the sensitivities of the many affected individuals, however, the strategic reshuffling is a sound business practice.

And we’re likely to see more of it, because “clustering” makes sense. Clustering simply means gathering assets in tight geographic patterns to make it easier to sell, produce and distribute product. Here’s an example of how well it works:

When I entered the cable TV business in 1988, the industry was in the midst of a land grab. Operating companies bought systems anywhere they could, so long as the price was right. From a strict financial point of view, the cash flows from the assets were fungible – money from one was as good as money from another.

It soon became obvious that a series of small, far-flung operations would be difficult to manage, casting doubt on the continued ability of the companies to keep cranking out cash at the desired levels. In the San Francisco market, where there were probably a dozen or more cable operators, a truck from Company A would have to drive through towns owned by Companies B, C and D to get to another community owned by Company A, where the technician could get out and finally do some work. Windshield time was a costly waste of time.

The solution was obvious. Buy, sell and swap systems until one company owned all the contiguous towns in a metro area, enabling the operator to manage each aspect of the business in the most efficient manner. That’s why Comcast today owns all of San Francisco, Time Warner is the largest cable operator in Los Angeles and New York, and so forth.

If the cable guys hadn’t gotten together to sensibly cluster their properties years ago, service would be worse and – difficult though this may be to imagine – bills would be higher than they are today.

As dominant or near-monopoly players markets they served for decades, newspapers didn’t have to worry as much as most other businesses about competition or efficiency. The rise of low-cost printing technologies, the Internet and other new media has changed all that, enabling upstart producers to compete credibly with publishers for advertising revenues and readers.

In response to such pressures, publishers have been investing not only in online operations but also in such additional print products as micro-local papers, free advertising vehicles and products in Spanish, Vietnamese and assorted other tongues.

In 2004 alone, according to the Institute for Rural Journalism and Community Issues, Gannett purchased or launched 85 new weeklies, making it the nation’s largest publisher of non-daily papers with 207 titles. Gannett says the total number of its specialty products is about four times higher, when you add the alternative weeklies and other publications not technically classified as weeklies.

While most publishers have the means to build, rather than buy, strategically vital neighboring publications, it is appealing to neutralize successful competitors by purchasing them.

Utilizing the formidable cash flows and strong balance sheets produced by their existing operations, such well-established chains as Advance, Gannett, Hollinger, Knight Ridder, Lee, McClatchy, Media News, Tribune and others have acquired strategically significant publications adjacent to the markets in which they operate. The Top Ten list of weekly publishers is above.

The concentration of dailies and weeklies into ever-larger contiguous regional clusters creates new advertising products for publishers to sell, thus helping them efficiently increase top-line growth. The costs of content, production and delivery can be reduced through the consolidation of staffs and capital-intensive printing facilities.

Greater media concentration inevitably will lead to a decline in the diversity of editorial voices serving our communities. This is matter of significant concern that the industry would be well advised to forthrightly address.

One creative solution comes from Las Vegas, where the evening Sun is being discontinued as a free-standing title and a 6- to 10-page “Sun” section produced by a sharply scaled-down staff will run daily in the surviving Review-Journal. It remains to be seen how effective this will be and how long that will last. But it’s a try.

From a commercial point of view, higher sales and greater efficiency will give publishers the ability to compete more energetically with the new media threatening to snatch away their advertisers and audience. But this will work only if the additional profits are invested in creating compelling and competitive new products.

If the goodies garnered at the swap meet go only to pumping up short-term profits, the industry will be cheating its readers, its investors and itself.

Wednesday, August 03, 2005

Rotating the tires in Motown

When Dean Singleton gets the keys to the Detroit News, he ought to consider dusting off the secret plan for a rock ’em, sock ’em tabloid put together by his old pal, the legendary editor Dave Burgin. He ought to consider making it free, too.

The News, a struggling afternoon newspaper now owned by Gannett, got a new lease on life in a rare three-party shuffle of newspaper assets that will turn it from a five-day-a-week afternoon product to a six-day morning paper. As discussed previously here, the prognosis is grim for evening papers in competitive markets.

In the Motown swap, Knight Ridder sold its interest in the Detroit Free Press to Gannett, which now will operate the morning paper and the newspaper agency that prints both the Freep and the News. Because the U.S. Justice Department looks unfavorably on one company owning both papers in a town, Mr. Singleton’s MediaNews Group was recruited as the junior partner in the agency and thus became the new proprietor of the News.

As luck would have it, MediaNews already has a plan for a jazzy tab so innovative and exciting that “it would have been a paper that you couldn’t possibly have conceived," according to no less an authority than its creator, Dave Burgin.

Bluff and bombastic, Dave not only is a legend in his own mind but also among those who marvel at an action-packed career in which he worked at more newspapers than most people will read in a lifetime. If there is one definitive Dave story, it was a banner in the old San Francisco Examiner reporting someone’s suspicion that Soviet submarines were secretly spying in San Francisco Bay. “Soviet Sub Tracks in Bay,” screamed the eight-column screamer. Clearly, this is a guy with tabloid ink in his veins.

As Dave recently told Michael Stoll of Grade the News, the estimable online Bay Area media watchdog, the proposed tab “would have looked more like America Online's home page than any newspaper now printed – lots of colorful graphics, bold headlines and an ‘interactive,’ conversational feel.” The working title was “The Daily Flash,“ an allusion – likely to go over the head of anyone under 50 – to the paper that employed the ancient comic-strip character Brenda Starr.

From editorial cartoons on the front page to strongly expressed points of view in the articles, Dave's Daily Flash would have challenged most journalistic conventions. Conceived as a free tab, which most certainly challenges journalistic conventions, the paper was in the planning stages for 1½ years until it was shelved, owing to competition from the new free Bay Area tabs published by Clarity Media and Knight Ridder.

Now that MediaNews is setting up shop in Detroit, it ought to dust off Dave’s plan and give the Motor City more than a choice between vanilla and plain-vanilla newspapers. Free distribution would be the cherry on top.

Monday, August 01, 2005

The avatar has no clothes

Gap has unveiled, quite literally, an ambitious viral online promotion called Watch Me Change that evidently is intended to refurbish its tattered coolness quotient. Unfortunately, it doesn’t.

Although the company deserves an A for effort, the high-concept, high-tech, undoubtedly high-price promotion merits low marks for good taste, fun and, worst of all, its likely commercial success.

The campaign begins with a visit to an eponymous website, where the user installs an interminable-to-download (and fairly unstable) Shockwave environment to create an underwear-clad cartoon character (known in the trade as an “avatar”) whose face, hairdo, eye color and body type can be wondrously modified to emulate your appearance – or the one you wish you had. Among the capabilities is a handy slider that enhances the bust of the female version to bodacious proportions.

The next step is to choose a new set of Gap clothes for your avatar from the menu on the site. When you click the “Next” button, the avatar emerges from a dressing room and does a spastically suggestive striptease to a thumping rock beat. Down to its undies, the avatar boogies into the dressing room and soon reappears in the previously chosen Gap wardrobe, shaking its booty as provocatively as a cartoon can.

Site visitors are encouraged to email or IM their friends the link to their avatar. Recipients, who are quite likely to be nonplussed by it all, are cryptically encouraged to visit the site themselves, where they presumably would be inspired to create avatars they can send to their friends in the way a fruitcake is relentlessly regifted until it mercifully lands in the trash.

Normally, I would be among the first to applaud a funny or irreverent viral promotion featuring rock music and partial nudity. The problem is that this one is more tedious than witty, more stiff than irreverent and, accordingly, feels more like a 24-hour stomach virus than a fun-to-share digital diversion.

Amusement, of course, is in the eye of the beholder, so others may differ. From a strictly commercial point of view, however, this thing is indisputably DOA. Here’s why:

:: Branding is utterly absent. The Gap name is nowhere to be found on the website or in the email dispatching the avatar to the user’s friends. Why would a company go to all this trouble and not get its name out there?

:: The cartoon versions of the Gap clothes look crummy. Not having anything better to do on a beautiful summer day, I created both male and female avatars and dressed each in several outfits. Although Gap offered several blazers and jeans, they looked hopelessly generic as cartoons. And they didn’t look good, either. How are you going to sell clothes that look rumpled, frumpy and wrinkled?

:: Assuming, arguendo, this promotion inspired you to buy a new outfit, there is no way to do so. Not only is there a no “Buy Now” button anywhere on the site, but there’s not even a line that says, “Inspired? Go Change Yourself at Gap.Com.”

Maybe my reservations are moot. If most people come out looking like the guy above, there probably won’t be a stampede of customers, anyway.

FOOTNOTE (pun shamelessly intended): For a refreshing contrast, take a look at the new Keds site, which features free wallpapers, music, viral audio postcards and other interactive features. It even tells you -- tra-la! -- where to buy the shoes.