Circulation = Revenue and the Paid Content Dilemma (NYT)

Here are two quotes from a recent article in the NTT by David Carr.

"If more people are reading newspapers and magazines, why should we care whether they are printed on paper?

The answer is that paper is not just how news is delivered; it is how it is paid for."

The above being the case, isn't it about time old media started working out how to better monetize their content on digital platforms? Obvious question, obvious answer. So why haven't they managed to do it yet?

Here's another received MSM media wisdom:

"The blogosphere has had its share of news breaks, but absent a functioning mainstream media to annotate, it could be pretty darn quiet out there."

Thank you for your use of the conditional in that sentence, Mr. Carr, but you're just covering you basaes.

Question: Are you sure about that vision of the blogosphere Mr. Carr?

In the short term perhaps, more difficult to navigate perhaps, but in the long run it would function pretty damn well. Especially with so many collaborative blognetworks springing up, staffed by ex-MSM media journalists.

The Media Equation (NYT)
By DAVID CARR
Published: October 28, 2008
The news that Google settled two longstanding suits with book authors and publishers over its plans to digitize the world’s great libraries suggests that some level of détente could be reached between old media and newIf true, it can’t come soon enough for the news business.
It’s been an especially rotten few days for people who type on deadline. On Tuesday, The Christian Science Monitor announced that, after a century, it would cease publishing a weekday paper. Time Inc., the Olympian home of Time magazine, Fortune, People and Sports Illustrated, announced that it was cutting 600 jobs and reorganizing its staff. And Gannett, the largest newspaper publisher in the country, compounded the grimness by announcing it was laying off 10 percent of its work force — up to 3,000 people.
Clearly, the sky is falling. The question now is how many people will be left to cover it.
It goes on. The day before, the Tribune Company had declared that it would reduce the newsroom of The Los Angeles Times by 75 more people, leaving it approximately half the size it was just seven years ago.
The Star-Ledger of Newark, the 15th-largest paper in the country, which was threatened with closing, will apparently survive, but only after it was announced that the editorial staff would be reduced by 40 percent.
And two weeks ago, TV Guide, one of the famous brand names in magazines, was sold for one dollar, less than the price of a single copy.
The paradox of all these announcements is that newspapers and magazines do not have an audience problem — newspaper Web sites are a vital source of news, and growing — but they do have a consumer problem.
Stop and think about where you are reading this column. If you are one of the million or so people who are reading it in a newspaper that landed on your doorstop or that you picked up at the corner, you are in the minority. This same information is available to many more millions on this paper’s Web site, in RSS feeds, on hand-held devices, linked and summarized all over the Web.
Historically, people took an interest in the daily paper about the time they bought a home. Now they are checking their BlackBerrys for alerts about mortgage rates.
“The auto industry and the print industry have essentially the same problem,” said Clay Shirky, the author of “Here Comes Everybody.” “The older customers like the older products and the new customers like the new ones.”
For readers, the drastic diminishment of print raises an obvious question: if more people are reading newspapers and magazines, why should we care whether they are printed on paper?
The answer is that paper is not just how news is delivered; it is how it is paid for.
More than 90 percent of the newspaper industry’s revenue still derives from the print product, a legacy technology that attracts fewer consumers and advertisers every single day. A single newspaper ad might cost many thousands of dollars while an online ad might only bring in $20 for each 1,000 customers who see it.
The difference between print dollars and digital dimes — or sometimes pennies — is being taken out of the newsrooms that supply both. And while it is indeed tough all over in this economy, consider the consequences.
New Jersey, a petri dish of corruption, will have to make do with 40 percent fewer reporters at The Star-Ledger, one of the few remaining cops on the beat. The Los Angeles Times, which toils under Hollywood’s nose, has one movie reviewer left on staff. And dozens of communities served by Gannett will have fewer reporters and editors overseeing the deeds and misdeeds of local government and businesses.
The authors and book publishers looking for royalties from the Google deal may be the lucky ones in the old media sweepstakes. Print publishers are madly cutting, in part because the fourth quarter, postfinancial crisis, is going to be a miserable one. Advertising from the car industry, retail business and financial services — for years, the three sturdy legs of a stool that print once rested comfortably on — are in steep decline.
So who can still afford to pay for the phone calls that reporters have to make? USA Today was made exempt from the current rounds of cuts at Gannett but even national papers, including The New York Times, have resorted to modest staff cuts over the last year. The blogosphere has had its share of news breaks, but absent a functioning mainstream media to annotate, it could be pretty darn quiet out there.
At the recent American Magazine Conference, one of the speakers worried that if the great brands of journalism — the trusted news sources readers have relied on — were to vanish, then the Web itself would quickly become a “cesspool” of useless information. That kind of hand-wringing is a staple of industry gatherings.
But in this case, it wasn’t an old journalism hack lamenting his industry. It was Eric Schmidt, the chief executive of Google.

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The Oxford Times

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Slaughtering the Cash Cows a Bit Too Early (Content Bridges)

Content Bridges
Content Bridges connects the rough edges of old and newer media, linking new revenue lines and the democratizing value of digital content

October 27, 2008
Slaughtering the Cash Cows a Bit Too Early
New Post: Christian Science Monitor Flipping the Switch

For an industry already on a ventilator, today's FAS-FAX numbers just steal more breath.
The double-digit declines -- the Atlanta Journal Constitution at 13.6% daily, the Dallas Morning News at 9.2% daily and the critical-listed Newark Star-Ledger down 10.4% daily -- shouldn't be a surprise, but they are surprising in their magnitude.
Recall that newspaper CEOs have been saying for a couple of years now that circ declines should plateau soon, as they've pruned out-state and other costlier, and less-attractive-to-advertiser circulation. The story they've told themselves, and us, is that the print business was stabilizing.
In fact, the circulation decline is going the other way -- deepening. Down 4.6% daily and 4.8% Sunday, these are new lows and a trend further downward from the largely 2.5-3.5% declines we've seen over the last four years.
Let's connect the dots.
One big reason the numbers are declining is the product itself. In the last year, we've seen unprecedented cuts in the product -- and the customers are noticing. It looks like the amount of newsprint is down about 10-15%; some in stories, some in ads. Trusted bylines have disappeared overnight. Readers notice, and talk to their friends, and they're saying: it's not the newspaper it used to be. When the subscription notices come, they're a little less likely to be acted upon.
In a sense, newspapers have been slaughtering the cash cows -- print revenues still drive more than 85% of the business -- a bit too fast. No doubt, what we're talking about big picture is the transition of the business from print to digital. What today's numbers show is that the movement is accelerating, an acceleration caused both by larger forces (younger readers preferring online, the new green revolution) and by publishers' own cost-cutting. The continuing crunch issue in that: readers online are still worth no more than a dime compared to the dollar in print. So while slashing print costs is a necessity, it is robbing print revenue at the same time. It's an ungainly process, and once started is hard to manage. In fact, it could be like a runaway train, which once dispatched, takes on a velocity of its own. If you're the CEO of such a company, you may feel more like you're a passenger along for the ride, than the engineer in control.
Today's numbers, of course, predate the financial meltdown and now all-bit-official recession. Consumers are shell-shocked, reeling from paper losses on real estate and retirement accounts and fearful of job loss or reduction. We've seen ad spend forecasts decline almost weekly, and we can guess that the next FAS-FAX will be hurt further by these consumer fears.
Otherwise, the data shows a mostly familiar story:
National papers are doing better than metros. The Wall Street Journal and USAToday are both flat, the New York Times down 3.5%. We've seen this trend, more or less, for four years now.
Community dailies are doing better than metros. Check out the Jen and Fitz list. It's heavy on these dailies that have both better community connection and less commoditized content. Same trend as last four years as well.
Yes, overall audience, now measured by industry's Scarborough combined report, is growing. However, flagging online growth numbers -- largely because of the reliance on classified bundling -- show that taking advantage of this new combined audience is an early-stage, slow-moving, work-in-progress.
New blood does not equal turnaround. Despite Brian Tierney's spirited, take-it-to-the community campaign in Philly, the Inquirer's down another 11% daily. In Minneapolis, on-the-brink Avista suffered another 4% daily decline. Tribune, with its raft of changes (though most of the redesigns occurred at the end of the reporting period), took losses, including 7.75% at the Chicago Tribune.
Sunday's as hard hit as daily. The big ad day was down another 5%. That will translate into still less of a mass market, and less print revenue in 2009.
Well, maybe we can blame a little-bitty part of today's announced swoon on broadcasters. Newspaper people have long liked to joke how their morning papers served as both tip sheets and often actual reportage for broadcasters. Rip 'n read. Now ABC News is adding injury to insult, cancelling all print subs. So to whatever extent ABC staff (and local broadcasters) are using newspapers these days, they'll take the content -- for free -- off the web, like apparently almost everyone else. The memo:
As of December 1, we will cancel all subscriptions (newspaper and magazine) for executives and production employees and move them to on-line. This change will have the added benefit of helping the environment. If there are particular circumstances where you believe this will materially impair your ability to get your work done, you should make your case to your executive producer or supervisor by November 15th.

Ken Doctor of Content Bridges

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The future of AP

Who thinks they could do without AP?

Certainly the IHT has subscriptions to Bloomberg (which it uses occassionaly since the demise of Business Asia with Bloomberg and the new deal with Reuters, for which Reuters actually pays to be co-branded in the IHT in the Business with Reuters section).

Reuters is also used heavily for briefs and www.iht.com.

One has the feeling that the IHT could live without AP, in these days of big cost cuts resulting from horrible 2009 advertising budgets, it wouldn't surprise me if even the NYTMG cut them. If they could, if Tribune Company has, many others will follow.

Shocker: Tribune Co. Gives Notice To Drop AP

By Joe StruppPublished: October 16, 2008 12:40 PM ET
NEW YORK

Tribune Company has given a two-year notice to the Associated Press that its daily newspapers plan to drop the news service, becoming the first major newspaper chain to do so since the recent controversy over new rates began.

Tribune, which owns nine daily papers including the Los Angeles Times and Chicago Tribune, joins a growing list of newspapers that have sought to end AP contracts, or given notice of that, following plans to introduce a new controversial rate structure in 2009. The notice was given earlier this week.

AP Spokesman Paul Colford confirmed the cancellation notice, but said he had no more specifics. He issued the following statement about it:"We understand that in this climate a lot of newspapers are re-examining their strategies. The Associated Press will continue to work with all members of the cooperative to ensure that we are providing the most efficient, valued and essential news service for them."

The notice, of course, does not mean Tribune is cutting AP immediately. The news cooperative requires the two-year notice as part of its current contracts. Negotiations may lead to the termination not moving forward.

Tribune Spokesman Gary Weitman did not immediately respond to requests for comment Thursday as he is traveling. The notice comes less than a year after Sam Zell, an AP board member, took control of Tribune.Tribune daily papers besids the flagship in Chicago affected include The Sun Sentinel of Fort Lauderdale, Fla.; The Orlando Sentinel; Red Eye of Chicago; the Hartford Courant; The Baltimore Sun; The Morning Call of Allentown, Pa.; and The Daily Press of Newport News, Va.

"I think many editors are concerned about the new financial rate model that AP has rolled out," Earl Maucker, editor of the Sun Sentinel, said about the notice. "It is a natural approach for us to take a hard look at that. Are there other alternatives out there that would provide the depth and breadth of coverage we need?"

In recent months, other non-Tribune papers have also given the required two-year's notice to drop AP. Those include: The Star Tribune of Minneapolis, The Bakersfield Californian, The Post Register of Idaho Falls, and The Yakima Herald-Republic and Wenatchee World, both of Washington.The Spokesman-Review of Spokane, Wash., is trying to cut ties without the required two-year notice, planning to discontinue AP content at the end of 2008. At least one newspaper, The Star-Ledger of Newark, N.J., tested the approach by publishing an entire newspaper for one day last month without AP content. So far, that paper has not given notice to cut the service.Maucker said publishing without AP would be difficult, but not impossible: "We would have to take a look at what other options might be available."

The recent decisions to drop AP service follow the planned AP rate structure change, which was announced in 2007 and takes effect in 2009. The rate change initially prompted complaints from numerous newspapers, including two groups of editors who wrote angry letters to AP to complain in late 2007 and early 2008.

Under current AP policy, each newspaper buys a package of general news created by AP based on that paper's location and circulation. The package usually includes breaking news, sports, business, and other national, international, and regional news relevant to the client's market, including its state AP wire.

Under the new structure, AP member newspapers will receive all breaking news worldwide (including items from other state wires), as well as breaking sports, business, and entertainment stories. In addition, a package of premium content — made up of five types of non-breaking stories including sports, entertainment, business, lifestyle and analysis — will be available at an additional cost.When the new structure was announced in 2007, AP promised a combined savings of $5.6 million across newspaper member budgets, which increased to $14 million —and, finally, $21 million just days before the April annual AP meeting.((AP officials said member newspapers would begin to find out in July what their exact fees would be for 2009, which prompted some of the recent decisions and could result in other newspapers cutting their service before the end of the year.

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