overcoffeemedia.com

Here’s the flip side of the March 30 Over Coffee item on declining ad revenues. The print decline is irreversible and inevitable. But as I’ve been preaching for a while, we will eventually evolve to an economic model that preserves newsrooms and professional reporting. The Dallas Morning News is probably right in planning for a world in which the print and online products swap places. The online product will dominate. For the time being, “online” translates into web, but that could change too, eventually.

US: Today’s newsrooms can survive – Editors Weblog

According to the Newspaper Association of America, in 2006, newspaper websites on average boosted their readership by 22 percent, showing that perhaps today’s newsrooms are making the transition to the online world. Tom Rosentiel of the Project for Excellence in Journalism said that five years ago, he wasn’t sure who would be producing the online content consumers wanted. “Today it seems more likely that the New York Times newsroom is going to survive,” he said, “that the old newsroom is the really the newsroom of the future too.”Of course, different papers have used different strategies to move their papers online. Where the New York Times chose to integrate its print and online editorial staffs, the Washington Post took the opposite road, separating its teams to create specialized web content.

The Dallas (Texas) Morning News is looking rapidly toward the future, as half its photographers have moved to video since January 2006. Deputy head of the picture desk Chris Wilkins said that in the next 10 years, “the newspaper will be a by-product of the web, it is inevitable.”

Powered by ScribeFire.

I’ve been focused more on circulation in tracking the decline of print-based newspapers, but the drop in ad revenues is bad news. As I’ve noted before, reporters and editors have to eat, and advertising pays the bills. If the advertising-based business model quits working, the loss of print-based products will be the least of our worries. New York Times story below.

By KATHARINE Q. SEELYE Published: March 26, 2007

For newspapers, February was the cruelest month. So far.

Revenue from advertising was in striking decline last month, compared with February a year ago, and were generally weaker than analysts had expected.

And while there was one piece of good news for the industry — ad spending on newspaper Web sites rose — many industry watchers were wondering whether the February declines were part of a short-term slump or whether they signal a deepening systemic problem.

“I’m reluctant to say that a single data point is a trend,” said Barry Parr, a media analyst at Jupiter Research. “But those are scary numbers, especially when we’re not in a recession.”

At USA Today, the nation’s biggest newspaper, ad revenue was down 14 percent this February, compared with February last year. Gannett, which owns USA Today and is the nation’s biggest newspaper company, reported that its overall ad revenue declined 3.8 percent in February from February 2006.

Ad revenue at The New York Times Company fell 6 percent overall, declining 7.5 percent at The New York Times; ad revenue at the company’s New England Media Group, which includes The Boston Globe, was down 4 percent. At The Wall Street Journal, published by Dow Jones, it was off 10 percent.

The Tribune Company, whose papers include The Los Angeles Times, The Chicago Tribune and The Baltimore Sun, reported losses of more than 5 percent. So did McClatchy, whose papers include The Miami Herald, The Sacramento Bee and The Lexington Herald-Leader in Kentucky.

Even papers in smaller markets, which are shielded from some of the forces buffeting some of the bigger metro dailies, saw losses in February. Ad revenue for the publishing division of Media General, which owns The Tampa Tribune, The Richmond Times-Dispatch and The Winston-Salem Journal, were down 5.8 percent.

Most of the numbers were worse than January’s and came after a difficult year in which many newspapers continued to pare costs by laying off employees, shrinking the physical size of their print publications and reducing benefits. Several newspapers also tried raising revenue by accepting advertising in prominent spaces that they had long reserved for news.

And still the numbers were bad. Collectively, the February sales were “the worst group performance to date,” Steven Barlow, an analyst at Prudential Equity Group, wrote to his clients.

The newspaper companies blamed the declines largely on the continuing shift of classified advertisers from print to online, especially to mostly free sites like Craig’s List. In some cases, particularly in Florida and California, they traced the weaknesses to volatile real estate markets.

Tampa, Fla., which is also recovering from a series of hurricanes, was hit particularly hard, with revenue from real estate ads plunging 44 percent compared with last February. Tampa’s overall classified revenue was off 27 percent, with help wanted down 32 percent and automotive off 27 percent, according to Media General.

Lauren Rich Fine, a media analyst for Merrill Lynch, cautioned in her analysis of McClatchy’s February numbers not to “overreact to just one month of poor performance.” Nonetheless, she said, McClatchy’s problems were “just starting.” She cited the stark comparison between California’s hot real estate market last February, when revenue from classified real estate ads was up 48 percent, and its weaker market this February, when that revenue was down 20 percent.

Mark Fratrik, an economist at BIA Financial Network, said the February results were “not a blip on the screen.”

“It’s fundamental, what’s going on with newspapers,” he said. “The younger groups, the most desired demographics, are just not reading them. They aren’t listening to traditional radio either, but I tell radio broadcasters that they’re lucky not to be in newspapers.”

Mirroring the slide in ad revenue is a long slow decline in circulation.

Newspaper circulation nationally reached its peak in 1984, when there were 1,600 morning and afternoon paid dailies with a circulation of 63 million. With the rise of cable television and, later, the Internet, newspaper circulation began to decline. Today there are 1,450 paid dailies with a circulation of 53 million. The losses have accelerated over the last two years.

While many newspapers still have healthy profit margins, their costs are up and ad revenue is down.

On the bright side, says the Newspaper Association of America, ad spending on newspaper Web sites jumped 31.5 percent last year compared with the year before, to $2.7 billion.

The bad news is that online spending accounted for only 5.4 percent of all newspaper ad expenditures in 2006, the association reported. And print revenue fell 3.7 percent for the fourth quarter of 2006, to $13.2 billion, compared with the same period in 2005.

Online spending is projected to continue to grow, and many newspapers are investing more and more in their Web sites. But so far, the online revenue is too small to begin to compensate for the losses from print advertising.

Mr. Parr, the Jupiter analyst, said that gap was going to force the industry to adapt to survive and that the February results were just a symptom of this larger struggle.

“There is absolutely no question that the next 10 years are going to be really bad for the newspaper business,” he said. “This is a time of wrenching change and chaos. All of our assumptions about newspapers are going to be changed. The format, the business model, the organization of newspapers have outlived their usefulness.”

Powered by ScribeFire.

From the Project for Excellence in Journalism (journalism.org):

A new Pew survey may offer some good news to a journalism industry eagerly seeking new and younger customers. People in the rapidly growing ranks of wireless Internet users are more likely to retrieve news online than those who access the web in other ways.The study—conducted by the Pew Internet & American Life Project in December 2006 and released last week—finds that a third (34%) of all online adults in the U.S. have now logged onto the Internet using a wireless connection, such as a laptop computer, cell phone, or a personal digital assistant (PDA) such as a Palm Pilot, BlackBerry or Treo.

Not only has that number grown by an impressive 36% in the past two years, but it also includes a sizeable segment of young people. According to the survey, almost a third of wireless online users are between the ages and 18 and 29.

The survey reported that the most popular wireless device is the laptop, with roughly four in ten (39%) online users owning one. Just 13% of online users have a PDA, and 25% say they have cell phones with wireless capacity

The report also found that nearly half (46%) of all wireless users go online for news on a typical day. This percentage surpasses those who go online for news using a broadband connection (38%). That appears to be a significant finding because previous research has generally found that broadband users were the heaviest online news consumers.

This data may offer some guidance for news organizations looking to reach more consumers, especially in the face of mounting evidence that more Americans are now going without news altogether. Polling data from the Pew Research Center for the People & the Press found that 19% of all Americans said they got no news at all on a typical day in 2006, up from nine percent in 1994. And that trend was most pronounced among young Americans aged 18 to 29.

John Horrigan, the author of the Pew report, is optimistic that the research could lead media companies to invest more in news content delivered over wireless devices. “Those who use mobile devices to get news are valuable customers to begin with, and it would make sense to provide content optimized for these devices,” he told PEJ. It might also suggest one way to capture some of the younger audience that the news industry is so eager to attract.

Source: Pew Internet & American Life Project

Experienced investors have long known that when news of the bull market moves from the business section to the front page, the party is nearing an end. When barbers begin to offer stock tips, it”s time to batten down the hatches.

It’s called a blow-off, and it occurs with virtually everything that involves crowds of people. One day, everybody”s talking about the latest “thing,” and the next day it seems to disappear.

Last year, we saw that with the hype preceding the long-awaited DaVinci Code movie. Dan Brown”s books had been selling in incredible numbers, and at any given time, the New York Times Best Seller lists would have a half dozen or more books about conspiracy theories, the Templars, the Gnostic gospels, and related topics — both fiction and non-fiction. Then the movie came out, and the DaVinci phenomenon hit an air pocket. Sure, it”s still selling a lot of books, and people are still buying and renting the DVD. But the phenomenon itself has pretty much run its course.

Lately, “event TV” has approached a manic stage, having evolved from the “reality programming” of a couple of years ago. American Idol is the king of them all, consistently drawing up to 30 million viewers. (They expect this to double when the program nears its climax in about 10 weeks.) Has American Idol become a new reality, or is it just a passing fad? My bet is on the latter. But here”s the point: These things don”t dribble to a messy end, but rather with a bang. Don”t be surprised if American Idol”s final episode of all time draws the biggest audience ever. Then, it will disappear, along with the other current event-based programs. Realityshows.com lists more than 80 reality shows currently airing. No sane person can think that level is sustainable.

In a few weeks, we will have our sixth American Idol winner. Some of them have made a lot of money and sold a lot of records, as have the runners-up — notably Clay Aiken. But at some point, we will reach a “been there, done that” stage, and the studio executives will look at the numbers and decide to quit while they”re ahead. It wouldn”t surprise me if this season were the last.

The other phenomenon we have to consider is the entire “social media/citizen journalism” thing. When Time put a cheesy mirror on its cover and declared “You” the Person of the Year, it appeared that the world of blogs, YouTube, MySpace and other online vehicles had arrived. Only time (the passing of years, not the magazine) will tell. I wouldn”t be surprised if history marks the Time cover as the climax of the entire “social media” phenomenon. We Media breathlessly tells us that we are at “the beginning of a Golden Age of journalism.” Again, we won”t know for a long time. People will grow tired of home movies, rumor-mongering sites and vanity blogs. The shakeout will be severe. But what remains at that point will probably be worthwhile.

In the 1970s, when I was still a reporter, we got a letter-to-the-editor from a lady who had figured out just what was wrong with the world.

It all started, she said, in the 1960s, when the local newspapers began to report that there were people on the West Coast called beatniks, who grew beards and played guitars and smoked marijuana. Since then, she went on to say, the world had been taken over by longhairs (called hippies by that time), Vietnam War protesters, addicts and other unsavory types.

As long as they”d been sequestered safely in California, it didn”t matter much. But when word got out, otherwise decent folks imitated them — growing their hair out, wearing sandals, adopting liberal notions and smoking dope. The real stunner was that she actually said everything would have been OK if only we had never started writing about those beatniks in California.

I wish I’d kept the letter. It was a classic. I can’t help wondering what this lady would say in a world where any idea from anywhere in the world can show up on your doorstep (or computer screen) within seconds.

It’s easy to dismiss her as a nut case, but it”s good to remember that there are people out there on all sides of the spectrum who see things through very small filters and make sense of the world by simply making it small enough to manage.

One of my RSS feeds this week led me to a story that contained some fascinating “facts” and projections regarding the impact of the subprime mortgage crisis. I had already read the story when I even bothered to see who had published it — a right-wing religious group. Reading more carefully, I noted that the facts were undocumented, and no sources were cited. But the story was well written and the page was designed like a million other “news” sites.

One of the great strengths of the web”s news portals (notably news.google.com and news.yahoo.com) is that they give us easy access to perspectives from all over the world. This is also one of the portals” greatest dangers. If a great piece of journalism like Frankel”s can sit side-by-side with a piece of junk, we readers have to watch our step. As I write this, I”m referring to the current news.google.com page, which carries the story on the recent federal court ruling on Internet porn. It has 271 links to versions of the story (mostly the same wire story), ranging from the New York Law Journal to TMZ.com.

I’d rather have the choice than not. But I have to hone my own filtering system, because nobody’s filtering it for me any more. Caveat emptor.

From Editor & Publisher:

ASNE Panel: Newspapers’ Future Good, Bad, Unknown

By Joe Strupp

Published: March 29, 2007 2:50 PM ET

WASHINGTON The state of newspapers in the exploding Web world appears to be a mix of good, bad, and mostly unknown, according to a panel of experts from both sides who discussed the ongoing changes at the American Society of Newspaper Editors on Thursday.

The group, which ranged from ultra-blogger Arianna Huffington to Donald Graham, chairman of The Washington Post Company, seemed to agree that newspapers remain a vital source of news, but not nearly as much as they did in the past.

Huffington, whose two-year-old site has countered many expectations of its demise, defended newspapers, contending that they remain a strong news source, no matter how many competing Web sites are launched. “I don’t think newspapers will ever be doomed,” she said, saying her site seeks to bring “the best of the old and the best of the new. There is something in our collective DNA that still loves reading newspapers.”

Graham, former publisher of the Post, praised Huffington’s online efforts, but said his top sources remain newspapers, although often online. “Next to the Post, the site I spend most of my time on is The Wall Street Journal site,” he said.

Graham, a Pulitzer Prize Board member, also pointed to the annual crop of Pulitzer nominees each year from newspapers, saying some of last year’s group of nominees from The New York Times and The Blade of Toledo are unmatched by any other medium. “What the New Orleans [Times-Picayune] did before Katrina, during Katrina, and in the aftermath, no other place in town could have done.”

But others on the panel, which included Huffington’s co-creator Kenneth Lerer, InterActive Corp. CEO Barry Diller, and Walter Mossberg and Kara Swisher of The Journal, were less optimistic about newspaper’s chances in the expanding Web age.

“I spend more time on the Internet than in print,” said Lerer, who also teaches at NYU. “Not one student in any of my classes raises their hand when I ask who reads newspapers. I’m not sure so many 18- and 19-year-olds read newspapers.” Diller countered, slightly, saying, “When I was 18 or 19, I wasn’t reading newspapers either.”

But Diller admitted that the online influence has had an impact, saying “most people I know are pulling in information all day long, most people get a barrage of online information.”

Mossberg, who writes numerous online items for the Journal and a related Web site, said he still gets the Times, Journal and Post delivered to his home “but I spend less time reading them than I used to. Something has happened in the past few years about variety online.”

Huffington said that traditional print outlets now on the Web need to get past differentiating the Web and print information. “The whole debate, ‘is it online or is it print’ is old,” she said. “It’s like saying, ‘is it Ginger or is it Mary Ann?’ I say ‘let’s have a threesome.’”

Graham said the Post, which has one of the top Web sites in the country, is still trying to take full advantage of online, without losing the Post’s brand connection to it. “We have a lot of work to do to get the Post and Post.com where they need to be,” he said. “A lot of discussion in my house growing up was about a Washington Post that was struggling. … the Post got [successful] with great journalism, but also with trying new things.”

Graham claimed that the paper is focusing on great journalism, such as the recent Walter Reed revelations, but also providing “entertaining stuff.” “No newspaper, no one site is going to do everything,” he stressed. “What the Post can do is produce something that people want to go back to.”

When asked by Mossberg why the Post did not develop a site similar to the new Politico.com, which has several former Post staffers, Graham hinted that working from its existing site was the best approach. “The Post has a political staff and a political mission of its own.”

Diller stressed the need for many newspaper sites, especially at small and mid-sized papers, to utilize their local connection and expertise. “You have to get very engaged in the community you serve,” he said. “Be relevant to somebody.”

Huffington then brought up the idea of “citizen journalism” and plans for her site to utilize more original reporting from regular readers. “More and more sites online are going to be doing their own version of investigative reporting.” But when Diller asked her to explain “citizen journalism” Mossberg stepped in to say “it’s like citizen surgery, very similar.”

But Huffington defended the approach, saying the site even plans to use bloggers affiliated with political campaigns in 2008 to post items about candidates’ doings. “We are going to get it first,” she said of many items, but said they will be labeled as partisan bloggers and that it will be ethical “as long as it is accurate.”

Still, Huffington said it is important to make online content and visuals worthwhile. “Not everyone can swim in both waters,” she said of the Web and print mediums. “Not everybody translates.” But she said that those running Web sites still have a better handle on the medium, and its uses to follow a story, than most newspapers have had. “The online community suffers from obsessive compulsive disorder and the mainstream media suffers from attention deficit disorder.”

Powered by ScribeFire.

A note on the AP article below following up on the concept of original and derivative reporting is that aggregators like Yahoo News, Google News, NewsGator and others are derivative in nature. Yahoo started out with the intention of getting into the news gathering business but figured out pretty quickly it’s not what they do.

Newspaper publisher, Yahoo form alliance – Los Angeles Times

Newspaper publisher, Yahoo form alliance From the Associated Press March 29, 2007

McClatchy Co., the nation’s third-largest newspaper publisher, will begin providing international news coverage and commentary to online powerhouse Yahoo Inc. in a partnership that further underscores the media industry’s shifting balance of power.

The deal announced Wednesday is the latest example of a long-established media outlet teaming up with an Internet leader in search of a wider audience and more revenue.

Sunnyvale, Calif.-based Yahoo already has been working to sell more online advertising with an alliance of major publishers that own more than 200 newspapers across the country. Sacramento-based McClatchy hasn’t joined that group yet.

Beginning in the second quarter, McClatchy will provide news from four international bureaus: Baghdad, Cairo, Jerusalem and Beijing. Many of the stories also will appear in McClatchy’s newspapers as well as their respective websites.

McClatchy’s correspondents also will provide exclusive information and commentary to Yahoo in less-formal blogs.

Yahoo expects McClatchy’s contributions to supplement the international news coverage that it already receives from the Associated Press, Reuters and Agence France-Press, said Neil Budde, Yahoo’s editor in chief of news, finance and sports.

Financial terms of the deal weren’t disclosed.

The new package will be branded as Trusted Voices, in tribute to McClatchy’s long history in journalism.

With roots dating to 1857, McClatchy is trying to overcome perceptions that it has become part of a dying breed as more people shun newspapers in favor of online sources such as Yahoo, which didn’t even exist until the mid-1990s.

That trend had caused many newspapers to view Yahoo and Google Inc. as adversaries, but that appears to be dissolving, Budde said. “We have gotten so big that they are starting to realize it makes more sense to work with us than shy away from us.”

Yahoo’s news section attracted 36.3 million visitors in February, more than any other website, according to ComScore Media Metrix. The combined paid circulation of McClatchy’s 31 daily newspapers averaged about 2.84 million during 2006.

McClatchy expanded last year with its $4.6-billion acquisition of Knight Ridder Inc., which was pressured into selling by major shareholders who didn’t believe the company could cope with the financial upheaval triggered by the rise of the Internet.

That deal hasn’t helped McClatchy’s slumping stock, which has plunged nearly 50% since the end of 2005. The company’s shares fell 25 cents to $31.36 on Wednesday.

McClatchy hopes some of the revenue from the Yahoo deal will help defray some of its costs for gathering international news.

Powered by ScribeFire.

To understand how the current media shifts will affect us, we have to understand a few fundamental concepts. With all the hype surrounding the blogging phenomenon, we have to remember that we have two kinds of journalism — original and derivative.

Original journalism is what the professionals do. They go out and interview people. They sit through the boring parts of meetings and trials to catch the interesting stuff when it happens and pass it on to us. They go down to City Hall and the Courthouse and other places to filter through public records to make sure our elected officials are doing their jobs right. They investigate and quell rumors, and when there’s substance, they write stories that are reviewed by editors (and, increasingly, fact checkers) before they see the light of day.

These people who do the grunt work of reporting have to eat. So do their editors and the many production people who bring us their products, however they are delivered. I was thinking about this Sunday when I read Max Frankel’s fine article in the New York Times Magazine about Washington‘s “back channels. Frankel spent months on the very fine piece, interviewing scores of people. It is original journalism at its best. But in the long run, great reporting has to happen within a business model that operates at a profit. Otherwise, people have to make a living some other way and don’t have the time and resources for the hard work.

The news blogs, on the other hand, are derivative. They feed off the work of people like Frankel and the thousands of other working journalists who do the grunt work. They can – and do – play an important role. It was a loosely knit team of bloggers that showed CBS had been duped by fake documents about President Bush’s National Guard service. But even that was derivative, in that it came in response to the work (albeit flawed) of the working press. The blogs also offer important commentary and analysis. They bring insights from places reporters rarely go. So they’re making an important contribution.

Original and derivative. Two different things.

Time Inc. to Close LIFE Magazine Newspaper Supplement

Time Inc. announced today that it will close LIFE magazine, but the company will continue to develop LIFE online and operate the brand’s other successful businesses. The issue dated April 20, 2007 will be the magazine’s last.While consumers responded enthusiastically to LIFE, with the decline in the newspaper business, and the outlook for advertising growth in the newspaper supplement category, the response was not strong enough to warrant further investment in LIFE as a weekly newspaper supplement.

“LIFE magazine was a truly innovative publishing venture. It was developed, edited and published by some of the best talent in the business and we can remain proud of its many achievements. But sometimes we have to make tough calls, and this was one,” said Time Inc. Chairman, CEO Ann Moore. “Growth requires taking risks and the potential upside was huge, but unfortunately the timing worked against us. The market has moved dramatically since October 2004 and it is no longer appropriate to continue publication of LIFE as a newspaper supplement. However, Time Inc. remains committed to the LIFE brand, and we will now be concentrating on migrating this iconic brand in many innovative ways on multiple digital platforms.”

Since its launch as a weekly newspaper supplement in October 2004, LIFE carried over 800 ad pages totaling almost $270 million in PIB revenue. LIFE has brought in 140 advertising brands which ran 220 pages that were exclusive to LIFE within the supplement category. LIFE was carried in 103 newspapers across the country with a total circulation of 13 million.

powered by performancing firefox