Monday, January 28, 2013

Most newspaper stories are still too long

The news cognoscenti gasped when the Columbia Journalism Review recently reported that the nation’s leading newspapers aren’t writing as many long stories as they used to. But I think most stories are still way too windy.
In a moment, I’ll tell you why, as briefly as I can. First the background: 
Tallying yarns topping 2,000 words on Factiva, CJR found the number of long-form stories at the Los Angeles Times dropped by 86% between 2003 and 2012.  In the same period, stories of similar heft fell by 50% at the Washington Post, 35% at the Wall Street Journal and 25% at the New York Times.
“When it comes to stories longer than 3,000 words, three papers showed even sharper declines,” said CJR. The number of super-sized stories dropped everywhere but the NYT, which actually had a 32% increase in articles of 3,000 words or more.  Remember the epic Snowfall?
The reasons for what CJR called a “meltdown in long-form journalism are well known:  Skinnier news holes, shrinking staffs and more digital chores for slimmed-down staffs to perform – 24/7, if you please. 
But the constraints of the modern publishing business actually may be a bad thing that’s a good thing for newspapers laboring to sustain their relevance and utility for the time-constrained multi-taskers also known as their remaining readers.
With all due respect to my colleagues and friends in the business, newspapers are written by journalists for journalists, who not only love their words but also tend to equate the length of a story with the importance of the subject, if not the writers themselves.

Back in the day, words often were the only way to tell a story.  In the digital production era, however, there are superior ways to tell stories in print, too – and to sustain reader engagement by making the most of the 20 minutes per day that the average reader spends with a newspaper. Here’s what I mean:
Many stories can be told better in charts, pictures or infographics than in the hundreds, and sometimes thousands, of words that tend to be the go-to medium for most newspaper journalists. When the story is about a new public opinion poll about gun control, I jump straight to the tables  that tell me who’s for it and who's not. When trying to wade through a complex investigation of corruption among the political elite in China, I find it easier to follow the money in the infographic than reading columns of gray prose. And what could have been more eloquent than the blank spot on the sports front in the New York Times (illustrated above) on the day no one was voted into the Baseball Hall of Fame? 
Newspapers tend to blow valuable column inches on the details of events that everyone already has seen on television.  Watching the inauguration, I was struck by the legions of producers, reporters and cameramen covering the same story in the same way with the  same live video feed. On the morning after the event, most newspapers acted as though their readers, who are exactly the sort of people who would have watched the ceremony on TV or the web, had been in a coma for the prior 24 hours.  While journalists by all means should have been seeking to identify fresh angles, generate new insights or get ahead of the story, that’s generally not what we got. 
Newspapers squander ink and tax our patience by providing extensive background on running stories where not much has happened from day to day.  Casualty tolls from Syria, political feuding in the Statehouse, economic aftershocks in Greece, procedural wrangling in a long-running trial and insignificant developments in the search for Middle East peace often top full-dress stories filled with nothing but the yadda-yadda of weeks-old background. When I hit the A-matter, I stop reading. I doubt I am the only one. On the other hand, I read every one of the 722 words in this piece.  
We know reporters write long to justify the time they put into a story and to elevate its importance, as well as their own.  (I did it myself.) And editors run the pieces for the same reasons.  (I did, too.) But no one has time for this self-indulgence any more.
The way for editors to make the most of the scarce resources available to them is to be as economical with the time of their readers as they can be.  If it takes 2,000 words to tell a story, let it rip.  If a daylong assignment turns out to be worth only a brief, then so be it. 
Now, in the interests of brevity, I will stop. 

Tuesday, January 15, 2013

Newspaper audience aged severely since 2010

The population of people reading newspapers has aged dramatically in the last three years to the point that nearly three-quarters of the audience is aged 45 or older, according to my analysis of survey and census data. 
When I performed the same analysis using the same methodology in 2010, only half of the newspaper audience was aged 45 or higher, reflecting a rapidly growing rejection of  newspapers among most younger readers.
The rapid graying of the newspaper audience has huge and unpleasant implications for publishers, as discussed in a moment.  First, the data:
As illustrated in the chart immediately below, the Pew Research Center reported in a survey last fall that newspaper readership is heavily concentrated in the upper age ranges of the population.  While only 6% of respondents in the 18-24 bracket said they had read a newspaper in the previous day, Pew found that fully 48% of those over the age of 65 had done so. Here is how that looks:
I compared the Pew data with census data to estimate the actual numbers of newspaper readers in each of the age cohorts. The graph below compares the percentage of newspaper readers in an age group (blue) with the percentage of individuals in the population as a whole (orange).
As you can see, 74% of the newspaper audience is aged 45 years or older, even though the two oldest age cohorts collectively constitute 39% of the population.  At the other end of the continuum, only 6% of the newspaper audience is 18-24, even though this age group constitutes 10% of the population.   
The above calculations caused me to check my math several extra times, because the new data show that the newspaper audience has aged radically since I performed the same analysis in 2010, discovering that only 51% of newspaper readers were older than 45.  If the aging of the newspaper audience seemed like a problem for the industry in back in 2010, then the far older audience today can be regarded as nothing less than a crisis. Here’s why: 
∷ The mature skew of the audience is unappealing to most advertisers, who generally target individuals in the early life stages of forming households and raising children.  The older audience delivered by newspapers could reduce the sales potential for an industry that already has lost more than half of its advertising since hitting an all-time high of $49.4 billion in 2005.
∷ Absent a sudden influx of twenty- and thirty-something readers, the heavy dependence of the newspaper industry on aged and aging readers means that its audience at some point will die off.  While the Social Security Administration says a 65-year-old woman statistically can look forward to nearly 20 more years of life, the above data clearly demonstrate that the industry is failing to replace older readers with younger individuals.   At some point, the newspaper audience may contract so severely that (a) publishers cannot attract enough advertisers, (b) publishers no longer enjoy the economies of scale necessary to print profitably or (c) both of the above.
∷ The weak readership in the younger segments of the population suggests that both the form and content of the print product are not widely appealing to the generations that came of age in the digital age. While there doesn’t appear to be much hope of attracting a significant number of sub-45 individuals to the print product, publishers have a shot at extending and protecting their valuable franchises by developing digitally native products that could – and should – be embraced by the Digital Natives. 
The time for the industry to pivot from print to pixels appears to running low. In the meantime, none of us is getting any younger.  

UPDATE (1.17.2013):  The above post was challenged in this article at Poynter.Org.  Following is my response to the issues raised by the author:

Scarborough Research says 68% of the newspaper audience is over 45 and I say 74%. So, we are not too far apart about the state of play today. 
As for the velocity of change, I based my analysis and my blog post on two studies from Pew, which asked where people got their news. In 2010, 21% of those between the ages of 18-29 said they used newspapers.  In 2012, the number fell to 8%.  In 2010, 26% of those aged 30-49 said newspapers. In 2012, the number dropped to 14%. Newspaper readership also declined among older reader but not nearly as much. 
Like my friend, Tom Rosenstiel, the author of the Poynter article, I would rather fix the problems than debate the data.  In his new role at the American Press Institute, he is in an exceptional position to do so.  

Wednesday, January 09, 2013

Smartphone shopping perils publishers

The smartphone has emerged as the hottest shopping accessory since the brown paper sack, the latter of which, as a matter of law, now costs a dime if you don’t bring your own environmentally sustainable tote into the supermarket in my part of California. 

With nearly one out of five consumers now consulting their mobile gizmos when making a purchasing decision, smartphone shopping represents a profound threat to newspapers, because it strikes at the heart of the historic value of the medium to the merchants who buy the preponderance of newspaper advertising.

The stakes hardly could be higher: Based on the newspaper industry’s actual performance for the first nine months of last year, I estimate that national and retail advertising likely generated three-quarters of the approximately $19.3 million in print advertising sold by publishers in 2012. 

Here's why smartphone shopping matters: While local media in the un-wired age were the primary conduit for connecting sellers with potential buyers, the efficiency and immediacy of smartphone-assisted shopping has created an unprecedented opportunity for both on- and off-line retailers to build powerful, personalized and direct relationships with consumers. The stronger and more efficient those ties become, the less merchants will need to buy ads from such traditional intermediaries as newspapers, radio and television. 

This is not some threat in the distant future.  The popularity of smartphone shopping rocketed last year during the holiday shopping season.   

On Cyber Monday (the first day after the national Thanksgiving-weekend shopping orgy), more than 18% of consumers used mobile devices to visit a retailer's site, according to an analysis complied by IBM Corp.  The number of smartphone shoppers was 70% greater than in the prior year.  

And the mobile-ized shoppers weren’t just browsing.  IBM said smartphone-powered sales nearly doubled between 2011 and 2012, reaching “close to 13%” of digital volume for Cyber Monday, which historically is the busiest day of the year for online merchants.  Based on ComScore data that pegged Cyber Monday turnover at a tad under $1.5 billion, smartphone shoppers bought some $200 million of goods in a single day.   

Beyond their obvious convenience as point-of-sale devices, smartphones are used by one out of five consumers to share pictures of products they are considering; to consult with friends, social networks or product-review sites about a prospective purchase, and to scan barcodes in search of product information or better prices, according to a report by Business Insider.  

With more than half of Americans now wielding smartphones as they prowl the aisles, merchants are moving quickly to respond to both the challenges and opportunities the phenomenon represents. 

According to a survey last year by CrossView, a mobile marketing consultant to the retail industry, merchants are equipping stores with wifi, producing branded mobile apps and, to a great degree, matching in-store and online pricing to avoid angering bricks-and-mortar customers who check the web to ensure they are getting the lowest-possible price.  During the Christmas shopping season, Best Buy even promised to match the prices offered by Amazon and the other leading online discounters. 

Smartphone shopping is popular among all ages and genders, said CrossView. “The local retailer who makes inventory positions available to the mobile shopper has a significant competitive advantage,” added the firm. “Clearly, top retailers understand this – and it’s why 80% of those we surveyed allow customers to use their mobile devices to see if products are in stock at a particular store.”

Though the transparency is bound to please customers, merchants aren’t doing this sort of thing to be nice.  The real reason retailers are embracing mobile commerce is to develop far more targeted and actionable relationships with consumers than was possible in the un-wired era. 

The more shoppers use their phones to compare products, to research purchases and to scout for deals, the more digital breadcrumbs they leave for merchants to analyze, including: who they are, where they are, what they have purchased and what they might buy next.  The more data that merchants capture about individual consumers, the more data they can crunch to predict the types of products or services an individual might buy, thus tailoring offers in terms of time, place, features and even pricing. 

Unless newspapers want to get shut out of their lucrative and long-standing partnership with the retail industry, the shift to smartphone shopping merits their full attention. 

Unfortunately, publishers are so technologically out of touch that, according to the Newspaper Association of America, only 110 (8%) of the nation’s 1,382 dailies have gotten around to launching apps for the tablet, which happens to be the fastest-growing electronics product since electricity was discovered.

To play in the new order of things, publishers need to (a) talk with astute merchants to discover their needs, (b) partner with savvy technologists to meet said needs and (c) get serious about investing in modern mobile platforms.  

© 2012 Editor & Publisher

Monday, January 07, 2013

Auto recovery leaves newspapers behind

Although the sales of new vehicles hit a five-year peak in 2012, automotive advertising at newspapers was on track at year’s end to decline for the ninth straight year – and likely headed to the lowest level since 1979.  

The continuing slump in auto advertising at newspapers, which has persisted in spite of a healthy rebound that powered new vehicle sales to 14.5 million units  in 2012, is perhaps one of the best examples of how technology irrevocably has changed the behaviors of both buyers and sellers in what once was one of the most significant and reliable categories for publishers.  

As we will see in a moment, the new dynamics of the marketplace make it highly unlikely that auto advertising, which once reliably tracked the ups and downs in the economy, will return to its former prominence for newspapers.  First, the numbers: 

In the third quarter of this year, auto classified slipped by 0.9% to $255.5 million, according to the Newspaper Association of America, an industry-funded trade group.  In the same period, vehicle advertising by auto makers across all national media – print, broadcast, Internet and outdoor – surged 26% to $2.7 billion, according to the Nielsen marketing-information service.  Beyond the advertising bought by the factories, Nielsen said local dealers boosted their spending by 22% to $1 billion.  Thus, newspapers captured less than 7% of auto advertising in the three-month period.   

The feeble newspaper auto sales in the third quarter of last year contrast with the $1.1 billion of vehicle advertising sold in the same period in 2005, the last year before publishing revenues began a catastrophic tumble  that has cut the industry's aggregate ad revenues by more than half.   Thus, as illustrated in the chart below, publishers have lost three-quarters of their ad volume in this key vertical in just seven years. 

The once-powerful partnership between auto dealers and publishers has collapsed because consumers for the better part of the last decade have moved to shopping for cars on highly optimized digital sites, rather than in print. 

Well aware of the ability of consumers to compare models, read ratings, peruse inventories and negotiate terms while still in their pajamas, both dealers and manufacturers are shifting ever-greater portions of their marketing budgets to the digital media in the interests of intercepting potential customers early in the decision-making process. 

The exodus of auto advertising from newspapers began well before the onset of the Great Recession in late 2007.  After peaking at an all-time high of $5.2 billion in 2003, auto advertising began falling in 2004 – a good four years ahead of the recession – and has continued to slide ever since.    

The trend in the first nine months of this year suggests newspapers collectively will sell approximately $1 billion in vehicle advertising for all of 2012 – or less than 20% of the volume achieved in 2003. Assuming the projection is accurate, this will bring the industry’s auto sales to the lowest level since 1979, according to records maintained by the NAA.  

Back in 2003, auto advertising delivered a significant 11.6% of industry revenues for publishers. This year, my projections show vehicle advertising will generate no better than 5% of total print sales. (The NAA does not detail the sources of online revenues in its reports, but Jim Conaghan, the trade group’s research chief, noted in an interview that 15% of the industry’s total revenues come from digital advertising.) 

The secular shift in the way consumers buy cars is detailed in a comprehensive new report from AIM Group, a research and consulting firm formerly known as Classified Intelligence. The report, which is available here, costs $795.     

The reason auto sellers are forsaking newspapers is that “most buyers made vehicle and dealer decisions before stepping foot in any showroom,” said AIM in the report. “Then, 40% went straight to their chosen dealership and bought.” 

In addition to visiting such pure-play sites as Auto Trader, Kelley Blue Book, Edmunds, eBay and Cars.Com, AIM said consumers also shop and share information on eBay, Facebook and Craig’s List.   Cars.Com is owned by A. H. Belo, Gannett, McClatchy, Tribune Co. and Washington Post Co., a quintet of newspaper publishers who were wise enough to hedge their bets by investing in what has become one of the top pure-play sites. 

Instead of kicking tires at car dealers on Saturday morning, consumers today “talk pre-sale with dealers by email, live chat, text and social media,” said AIM.  Noting that 15% of consumers are shopping for cars on mobile devices and many shoppers also are comparing models among themselves on the social media, Jim Townsend, the editor of the AIM report, said “social-mobile” services will further transform the way buyers and sellers interact.  

“If you think about what your customers already are doing with their phones and tablets, you really can’t afford to ignore the trend of social-mobile,” said Townsend.  “Incorporating social-media tools like Facebook, user reviews and social sharing of information into auto advertising is the direction every publisher needs to go.”  

Thursday, January 03, 2013

Why investors embraced newspapers in 2012

Part two of two parts.  The first part is here

While more than half of newspaper advertising has vaporized since peaking at $49.4 billion in 2o05, the share prices of five out of the nine publicly held publishers impressively outpaced the broader stock market in 2012. 

Yesterday, we looked at the winners and losers among the publishing sector in a year when the average share price of newspaper issues rose 20.8% at the same time the Standard and Poor’s index of 500 shares gained 13.4%.  The industry’s performance on Wall Street last year contrasts sharply with the loss, on average, of a third of the value of publishing shares in 2011.  

Today, we’ll look into the reasons for the remarkable turnaround – and why newspaper shares fared so well on Wall Street in spite the relentless decline over more than half a decade of the industry’s primary revenue stream.  

Before proceeding, it should be noted that even the best-performing newspaper stocks last year closed at a fraction of the prices they commanded six or eight years earlier. For example: Although Lee Enterprises rocketed 61.7% to become the biggest gainer in 2012, its shares closed the year at $1.14, or 98% less than the $49 they fetched in mid-2004. 

In a nutshell, the newspaper stock boomlet of 2012 was fueled by the belief among a certain number of investors that publishers have the motive, means and opportunity to transition their businesses out of the faltering print model and into prosperity in the digital era. 

The investors evidently were persuaded by the persistent and consistent effort of publishers throughout 2012 to change the perception of their industry. As discussed below, publishers at almost every turn emphasized their commitment to introducing a growing array of digital products on the web, on mobile platforms and through the social media.  Further, the executives of most publicly held publishing companies jazzed up their financials by lowering their debt and/or improving their profitability. 

In other words, publishers were telling investors exactly the sorts of things they love to hear.  As long as publishers can deliver – and there is scant reason to doubt they will make every effort to do so – then newspaper stocks may continue to enjoy high regard on Wall Street.  If publishers prove to be longer on rhetoric than they are on execution, their shares – and perhaps individual executives – will suffer. 

Here’s a look at the several factors that fueled fresh confidence in newspapers in 2012: 

Warren Buffett's buying blitz 

America’s favorite billionaire, who already held a stake in the Washington Post and owned the Buffalo (NY) News, got into newspapering in an even bigger way in late 2011 when he  paid $200 million  for his hometown paper, the Omaha World Herald – and then kept buying papers throughout 2012. Saying he believed newspapers to be strong and unique franchises in each of the communities they serve, Buffett quickly acquired most of the Media General papers and, by all accounts, remains in an acquisitive mood.  Buffett’s prominence as an investment guru, combined with his demonstrated conviction, played no small part in fanning investor interest in newspapers. 

Print-to-pixel pivot potential

The publishers whose shares advanced the most in 2012 were also the best at articulating their plans to transform their companies from their print legacies to multiproduct, multiplatform, multimedia digital franchises.  In a presentation to investment analysts in New York last month, the top officers of Gannett used the word “digital” 63 times and the word “print” just 10, according to the transcript of the event.   The story is the same elsewhere.  “It's noteworthy that a growing percentage of our advertising revenues are now coming from sources outside of our traditional newspapers,” said McClatchy chief executive Pat Talmantes in his third-quarter earnings report. “Digital advertising and direct marketing together now make up over 36% of our advertising revenues.” 

Premium payment prospects

After years of charging modest prices for print papers and almost always giving away their digital content for free, many publishers have moved aggressively to force readers to contribute a fatter slice of the revenue pie.  To a large degree, the New York Times paved the way to charging for digital content when it added a pay system to its website in early 2011.  By the end of 2011, the Times generated 42% of its revenue from print and digital subscriber fees, as compared with 27% of its revenues from print-only circulation in 2006.  One of the reasons the subscriber-fee percentage rose is that advertising sales fell; thus, the company saw its revenues plunge to $2.3 billion in 2011 from $3.2 billion in 2006.  Apart from that detail, the seeming success of the Times in getting subscribers to pay for content has motivated literally hundreds of publishers – at least a quarter of the nation’s nearly 1,400 dailies – to either install or get ready to install tollgates on their digital products.  

Pumped-up profitability 

At the same time publishers are working to boost revenues, the ones getting some of the strongest interest from investors in 2012 were those doing the best to cut expenses to generate higher profits in the face of listless advertising sales. In the first nine months of the year, McClatchy’s net income rose 140% even though its sales fell by nearly 5%.  In its investor presentation last month, Gannett, said it hopes to increase operating margins by 15% to 19% between 2011 and 2015, even though sales are projected to rise by only 2% to 4% in the same period. The mid-year decision by Advance Publications to cut print publication of the New Orleans Times-Picayune and other titles to three days a week may have been taken as a sign by investors that virtually every tactic is on the table when it comes to powering newspaper profitability.    

Burnished balanced sheets

While several publishers entered the Great Recession carrying the heavy and costly debt they acquired to finance what proved to be ill-timed acquisitions, they have been paying down and/or restructuring their obligations to repair their dangerously over-leveraged balance sheets. Among them are the New York Times, McClatchy and Lee, the latter of whom even went though a brief, prepackaged bankruptcy to get the job done.

Power of a positive press 

The resurgence in newspaper stocks attracted a number of positive articles last year, which not only proved the enduring power of the press but also seemingly inspired investor interest. “Warren Buffett Likes Newspaper Stocks,” said Forbes in June.  “Newspaper Paywalls Proving Successful,” said the Wall Street Journal in October. And even Jim Cramer, the CNBC wild man who in 2008 called newspapers “one of the worst neighborhoods in the stock universe, last month recommended purchasing Gannett shares, gushing: “The company is executing a phenomenal turnaround plan!” 

Though Cramer may be among the most mercurial market commentators of our age, his mood swings are not uncharacteristic of the market itself.  Cramer, like the market, can be high on a stock one day and down the next.  And when Cramer, like the market, is displeased – as demonstrated in this classic video – the vengeance can be fierce.   

Wednesday, January 02, 2013

Many newspaper stocks beat market in 2012

Part one of two.  Second part is here

After getting shellacked in 2011, a number of newspaper stocks rebounded sharply last year, with five out of nine publicly held publishers handily outpacing the broader market. 

On average, newspaper stocks rose 20.8% in 2012, as compared with a 13.4% increase in the Standard and Poor’s index of 500 shares. But the average doesn’t properly reflect the wide disparity in the industry’s performance on Wall Street.

The biggest percentage gainer last year was Lee Enterprises, which surged 61.7% after averting default on some $900 million in high-interest debt in a quickie bankruptcy. Notwithstanding Lee’s performance in 2012, its yearend closing price of $1.14 a share was nearly 98% lower than the $49 level at which it peaked in mid-2004.   

The biggest percentage loser in 2012 was GateHouse Media, whose stock fell 9.1% to close the year at six cents per share (yes, six cents), thus leaving the company's market capitalization at a paltry $3.5 million, with an M.  When GateHouse began trading as a public stock in 2006, the company was valued at $1.25 billion, with a B. This represents more than a 99% plunge in shareholder value. 

In addition to Gatehouse, two other stocks lost ground in the last 12 months. The Washington Post Co., which is battling operating losses at the flagship paper and weakness at the Kaplan educational division that actually represents a far bigger part of the business than the newspaper, tumbled 3.1%. After producing desultory sales and operating profits  in the first nine months of the year, the shares of A.H. Belo slipped 2.1%.   

The shares of every other publisher advanced in 2012.  In addition to Lee, the other stocks beating the broad market were Gannett, Journal Communications, McClatchy and E.W. Scripps. While the shares of the New York Times Co. rose in 2012, they failed to match the increase in the S&P 500. Here are the details: 

To put last year’s robust percentage gains in perspective, it should be noted that every newspaper stock exited 2012 at a fraction of the price it commanded at the end of 2006, the first year of a relentless slide that has more than halved the industry’s collective advertising revenue since topping at $49.4 billion in 2005.  

In the last six years, publishing shares on average have shed 72% of their value. Following are the percentage declines experienced by the newspaper companies that essentially include the same assets today as they did at the end of 2006. Belo and Scripps were eliminated from chart because they underwent corporate restructuring in the intervening years that makes it impossible to do an apples-to-apples comparison of the value of their shares. 

Two publicly traded companies that previously were included in the annual survey of newspaper stocks were eliminated in this year’s market analysis for the following reasons:

∷ Although News Corp.’s shares soared by 44.3% in 2012, most of the gain came after Rupert Murdoch confirmed in the summer that he would spin his newspaper holdings into a standalone venture, isolating his fast-growing and highly profitable entertainment assets in a company to be called Fox Group. With all due respect to the Wall Street Journal, New York Post and London Sun, the jump in the pre-spinoff stock seems to be attributable to investor cheer that Fox is getting out of the newspaper business. Next year, the free-standing print incarnation of News. Corp. – which reported a pro forma loss of $2 billion  in fiscal 2012 – will be included in this analysis. 

∷ Media General was removed from the annual survey because it sold most of its papers last year to Berkshire Hathaway for $142 million and certain other consideration. With $424 billion in assets, it is unlikely that the performance of Berkshire’s shares will be materially influenced by its newspaper holdings.  Accordingly, Berkshire will not replace Media General in future annual surveys. 

The boomlet in newspaper shares in 2012 occurred in spite of the fact that advertising – the primary revenue stream for newspapers – continued to contract throughout the year.  At the end of 2012, industry ad revenues were less than half of the all-time high of $49.4 billion achieved in 2005.  While final numbers remain to be compiled for the fourth quarter, a projection based on actual performance in the first nine months of the year suggests that the industry’s aggregate print and digital ad revenues will come in at about $22.5 billion for 2012. 

Although print advertising slipped throughout 2012, digital advertising, which most publishers proclaim to be the future of the industry, rose 3.6% in the third quarter of the year.  Unfortunately, as reported here, this growth rate is substantially lower than the 18% increase in the same period in over-all digital advertising in the United States.

The performance of newspaper shares last year contrasts with the battering the industry took in 2011, when publishing stocks, on average, lost nearly a third of their value at the same time the S&P 500 closed at exactly the same level it opened 12 months earlier. 

Given that the stock market is largely driven by expectations of future performance, Wall Street’s far more positive disposition toward newspapers in 2012 appears to reflect a growing confidence among at least some investors that publishers have a plan to successfully pivot their businesses away from print and into the digital realm.    

If publishers execute well on their promises, the market potentially could reward news executives and their shareholders with still higher valuations in 2013 and beyond.  If publishers falter or fail, the market’s judgment is likely to be swift and harsh.  

Next:  Behind the news-stock boomlet