'Boston Globe' Will Drop Two Sections, Add New Tab

It's a recession folks! 'g' & 'T' all-round on us (the NYT Co.) and for a clink, just scrape some ice off that there iceberg.


'Boston Globe' Will Drop Two Sections, Add New Tab
By Jennifer Saba
Published: October 17, 2008 4:55 PM ET
NEW YORK Just like its sister paper in New York, The Boston Globe is in the midst of reworking its section make-up, effective with the Oct. 24 edition. The Globe is dropping two sections while introducing a new tabloid called "g" that will run in the paper.
While other newspapers across the country, including The New York Times, are hot to fold metro into the A section, the Globe opted to keep it as a stand-alone.
The paper will continue to carry the A section and sports along with metro. Business will become part of metro. Features and arts and entertainment-related items that ran in Sidekick, will be incorporated in the new tab, "g."Of course, part of the reason for the move is to trim newsprint use and cut down on rising material costs. The Globe is saving 24 pages a week with the new section formats. Martin Baron, editor of the Globe, said while some newshole will be lost, the pages lost include house ads and event listings."Fundamentally, people are changing the way they use the newspaper," Baron said, adding the Globe intends to transform to the taste of people's reading habits.
The Globe has been working on this since March through a handful of town hall meetings with the employees, focus groups, outside consultants, and an e-panel made up of frequent Globe readers who agree to be sounding boards.Baron said they are gearing the changes to meet the needs of the Globe's loyal readers. "They are the ones that stay with you and they are the ones likely to stay with you," he said.What they found is that readers value local news first but that national and international news figure highly as well. "Our readers are not parochial at all," Baron said.
Prominent local news will make it in the A section, but Baron said that since it was such a high priority, the paper wanted to keep metro too. Pulling that section is seen as a de-emphasis on local news, Baron added.
The Globe has suffered newsroom cutbacks including the closing of foreign bureaus. But Baron said readers are willing to get their national and international stories from other sources. The Globe draws from several, including Reuters, AP, Bloomberg and the New York Times. As for local news, readers "expect to get that from the Globe," Baron said.
Jennifer Saba (jsaba@editorandpublisher.com) is E&P's associate editor.

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Where are we with those NYT Company equity prices?

16.51; CET.

Name
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New York Times Company NYT: NYSE
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News Corporation NWS.A: NYSE
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$0.58
+6.39%
–29.64%

Pearson PLC. PSO: NYSE
$9.75
$0.29
+3.07%
–16.60%

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France looks to save its newspapers (IHT)

I love France, which is why I live here.

Now, that said, if the Loi Bichet was reformed, the NMPP monopoly ended and the link broken between the CGT dominated distribution industry, the first thing the IHT would do is to fire a whole load of people in production (assuming compliance with existing French employment law or revised Sarko employment law), and cut their cost base considerably without fear of the CGT blocking the distribution of the IHT in France, and countries serviced by airplane from French print sites.

Actually, they might do more than that. They might up sticks and relocate to New Jersey, New York or a new media city in the U.A.E.

The point being, the CGT and the NMPP have had the IHT by the balls forever, and that has got to stop. Because France is the IHT's biggest market in the world, circulation wise, and a stoppage of IHT distribution for a week or more in the IHT's European circulation is untenable for advertisers. The IHT's numbers are simply too small (reader reseach numbers) to stack up with out French distribution.

Bernadette Lefevre helping a customer at her Paris kiosk. Even when newspapers reach newsstands in France, they often go unsold. (Emmanuel Fradin for the IHT)

France looks to save its newspapers
By Eric Pfanner
Sunday, October 19, 2008
PARIS: Like other Paris newsstands, the kiosk run by Bernadette Lefevre displays hundreds of newspapers and magazines, from mainstream titles like Le Monde to offbeat publications like LVP, a sort of Time Out guide for swingers.
And, like most of the 28,000 other news vendors across France, Lefevre has no choice over the selection. Under a 1947 law, French publishers are guaranteed newsstand space and national distribution - an effort to ensure freedom of expression after a wartime diet of Nazi propaganda. The rule, called the Loi Bichet, may have been well intentioned, but analysts say it also has a negative side, preventing vendors from adapting to market demand and contributing to an alarming decline in newspaper readership and revenue.
"The Loi Bichet, at the very least, must be changed," Lefevre said. "We need to be able to vary the offer from neighborhood to neighborhood. Otherwise it will get harder and harder to earn a living."
Newspapers throughout the developed world are losing readers and advertisers to the Internet, but French papers are in particularly bad shape. According to the World Association of Newspapers, circulation of paid-for dailies totals 154 copies per 1,000 people - lower than in Cuba, Lithuania or Suriname, and only about half the level in Germany or Britain. Like Lefevre, many analysts see overregulation as a major reason why French papers are thinner, scarcer and more expensive than elsewhere.
"It has become a French disease," said Emmanuel Schwartzenberg, a former media editor at Le Figaro and the author of a recently published book on the problems facing the French press.
In an effort to find ways to revitalize the industry, President Nicolas Sarkozy gathered more than 140 media experts this month to begin a three-month, government sponsored study of the written press, to look for ways to revitalize the French Fourth Estate. Like many analysts, Sarkozy put the spotlight on the difficulty of publishing in France.
"Like many of you, I think that distribution is the biggest problem for the newspaper industry," Sarkozy told participants. "At a time when marketing has become so important, it is peculiar that the press is so poorly sold."
French publishers face some unusual barriers to getting their dailies into readers' hands. For starters, they have to join a distribution network, NMPP, a near-monopoly that is mutually owned by the publishers and run by Lagardère, a publishing and military procurement conglomerate. After years of complaints from publishers about the cost of using this system, NMPP is restructuring its operations. Among other things, it plans to cut hundreds of jobs and close one of its distribution centers near Paris.
But that has caused other problems. Delivery workers at the NMPP are represented by a hard-line union, the CGT, whose hold over a choke point of the distribution system gives it considerable power. The union has struck three times this year against the cost-cutting plans, most recently in September; on those days, newsstands across France were empty. Printers at the individual newspapers are also represented by the CGT, with the power to shut down production.
Even when newspapers reach newsstands, they often go unsold. Many kiosks, even in Paris, are closed Sundays or for the entire weekend - a time when newspapers in other countries often make the bulk of their profit.
NMPP wants to create 5,000 new points of sale within the next two years. But reaching that target could be difficult. Every proposal to open a newsstand is subject to review by a special commission representing publishers and distributors, which is required to ensure that the newcomer does not hurt sales at existing nearby vendors.
Why have restrictions remained in place for so long in France? After all, in neighboring Britain, publishers like Rupert Murdoch, with the backing of Prime Minister Margaret Thatcher, moved aggressively to improve their business prospects in the 1980s, dismantling powerful newspaper unions.
Schwartzenberg said politicians and publishers in France had been loath to do anything until now because both sides thought they had benefited from the system.
"When something is not working, there are hidden reasons," he said. "This hidden reason is that the will of every government since 1945, from De Gaulle to Sarkozy, has been to control the press."
By keeping the newspapers financially weak and dependent on public subsidies, he said, governments think they can indirectly exercise control. Meanwhile, French publishers are willing to go along with the arrangement because a costly and cumbersome distribution system keeps foreign media companies from entering their market, he added.
Bertrand Pecquerie, director of the World Editors Forum in Paris, said France could learn a lot from publishers in Britain or Germany. Unlike those countries, France has no mass-market tabloid like The Sun or Bild Zeitung, with circulations upward of three million. The largest paid-for national daily in France, Le Figaro, has a circulation of about 320,000.
"We have exactly the same society, the same standard of living, the same culture, but in France you don't have a popular tabloid, because the French press is very elitist," Pecquerie said. "There is this attitude that a newspaper is prestige reading. We need a popular newspaper with some tabloid attitude.
"If we don't understand the workings of the newspaper industry worldwide and try to make a French exception, we will fail."
Axel Springer, publisher of Bild, has long wanted to start a similar publication in France. But last year, shortly before it was due to start printing, the company reversed course, citing difficult "logistical and technical manufacturing conditions."
For a head of state juggling issues ranging from foreign wars to financial crisis, Sarkozy has shown a surprising level of interest in the fortunes of the media business.
Last year, he tried to crack down on digital piracy of music and movies. This year, he has proposed a ban on advertising on public television; that plan has drawn criticism from opponents of the president, who say it is intended to help his friends in the media industry by driving advertising to their privately owned networks.
Many analysts say Sarkozy's goal in convening the conference on the written press is to continue a drive to build French "national champions" with wide-ranging media interests. The president has said he favors a relaxation of rules blocking owners of major television networks from also owning national newspapers. Dropping those restrictions could bring needed money and know-how into the newspaper business, he says.
But critics note that it also could help Sarkozy associates like Martin Bouygues, who controls the largest television channel in France, TF1, and Serge Dassault, who controls Le Figaro, to consolidate their media empires.
In his speech opening the conference, Sarkozy underlined his support for subsidies, which amount to nearly €300 million, or just over $400 million, in direct aid and around €1 billion when indirect benefits like tax breaks are included.
Some newspapers, like L'Humanité, published by the Communist Party, survive largely because of state subsidies, but they are not the only ones that are struggling. The two leading national dailies, Le Figaro and Le Monde, have each recently made deep cuts in their staffs. The two main business papers, Les Échos and La Tribune, were recently sold.
Analysts question the use of some of the public money. Schwartzenberg said more than €100 million went toward financing early retirement programs for the printers and delivery workers. Very little is spent on starting new publications or on the Internet, where French papers' audiences and ad revenue remain small.
In an effort to defend the aid, the delivery workers' union said the participants in the conference should write into the French Constitution a clause identifying the press as a "cultural, social and political good."
With so many vested interests at stake, analysts say, one important stakeholder is often forgotten: the reader.
"The problem in France is that journalists, publishers and workers have never thought of their papers as commercial products," said Patrick Eveno, a media historian who is taking part in the conference.
"They have only thought of their papers as a means of political influence," he said. "If this does not change, the written press will die."

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Pop up ads on www.iht.com

You're on www.iht.com as I am on a nearly daily basis, you have a subscription to the print paper (I appreciate many Internet users do not) and this advert (see below) pops up as an entire page. Indeed entire page pop-ups even on home pages are common on many media sites.

In the case of these pop-ups, or specifically in the case of the iht.com subscription pop-up, I don't know what the click-through rate is nor the click through to conversion rate is nor the conversion to retention rate is, but either way, they bug the hell out of me.

Is Internet advertising over-rated?

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For the IHT, the most worrying bearish 2009 forecast I have seen

There has been no shortage of bearish 2009 advertising revenue forecasts. This one isn't new, but that it is carried by WWD touches upon one of the most important advertising categories for the International Herald Tribune - the fashion industry. To be read with alarm in some quarters I would think.

Question: Is Suzy Menkes Power recession proof? And what happens, if, when, she retires - where is the succession plan and what is it going to cost the IHT to make that hire?

S&P BEARISH ON PRINT ADS: Add Standard & Poor’s to the growing list of industry watchers down on print advertising, at least for now.
“High debt levels, migration of ad spending to the Internet, declining newsstand sales and mature industry growth prospects suggest a near-term decline in credit risk,” the ratings service said. S&P expects magazine ad pages to decline through the end of 2008, with “minimal benefit from election-year activity,” it said, adding, “The sector will face continued ad rate challenges, especially given pressure on circulation levels that publishers guarantee to advertisers.”
As for newspapers, S&P expects newspaper revenue and cash flow to continue to drop “at rates that accelerate each quarter.” “The pullback in advertising dollars has been so dramatic that publishers have struggled to adjust their cost structures,” the agency said. Five out of the nine rated newspaper companies are “CCC,” “signaling a near-term liquidity threat.”
The New York Times Co. was placed on CreditWatch in July after the company reported a drop in earnings before interest, taxes, appreciation and amortization of 36 percent for the second quarter, compared with the same period during the prior year.S&P expects the economic downturn will bottom out in early- to mid-2009 — although it doesn’t expect a pickup in activity until late 2009.
“As a result, we expect total ad spending to be minimally higher (0.9 percent) in 2009,” the report said. — Amy Wicks

http://www.wwd.com/media-news/fashion-memopad/sp-bearish-on-print-ads-the-princess-diaries-cutbacks-cutting-even-deeper-1837410?navSection=media-news&toc_preselected=65#/article/media-news/fashion-memopad/sp-bearish-on-print-ads-the-princess-diaries-cutbacks-cutting-even-deeper-1837410?page=2

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Is Google now so big that it is recession, even depression, proof?

More to the point, is their business model actually one that is ideal for a recession?

Google CEO Eric Schmidt

Google's Profit and Sales Leap, Firing a Rally
A big earnings surprise confounds analysts, who hadn't reckoned the Web search colossus would contain its costs so well
By Robert D. Hof
Google has defied the skeptics. The Web search leader reported third-quarter earnings that far exceeded the expectations of analysts, especially those who thought the company might finally fall victim to the slumping economy. Thanks largely to having contained costs better than in previous quarters, Google reported on Oct. 16 that profit rose 26%, to $1.35 billion, significantly higher than analysts had predicted. Sales jumped 31%, to $5.54 billion.
Relieved investors propelled the stock higher by as much as 10% after the results were released. The rally followed a 4% gain, to 353.02, which mirrored a broader market surge in regular trading. Until Oct. 16, Google's stock had plunged 53% this year.
In a conference call with analysts, Google (GOOG) executives sounded the familiar, confident notes of the past several quarters. "The economic situation today is globally worse than what people were predicting just a month ago," CEO Eric Schmidt said. "But we're optimistic about Google's future." The comments resembled those of about a month ago, when Schmidt said the "drama is in New York, not here," and "it's business as usual at Google."
Analysts Had Cut Targets
Schmidt's remarks—and the numbers that back them up—underscore Google's resilience, even as growth slows in overall online advertising. Search-related ads, which make up the bulk of Google's sales, appeal to advertisers because they reach customers ready to buy and because their results can be measured, analysts and Google executives say. "Advertisers are willing to take all the clicks we can give them" at current prices, Hal Varian, Google's chief economist, said during the conference call. A recession will prompt consumers to use search even more frequently to find deals, Varian said.
Google's profit per share, before stock option expenses, was $4.92—17¢ over expectations of $4.75. Net revenue of $4.04 billion, after payments to partners that run Google ads on their sites, was just a hair below the $4.06 billion expected by analysts. However, many analysts were informally assuming earnings might undershoot previous forecasts and have been reducing estimates and price targets in recent weeks.
Much of the earnings surprise came because Google slowed expense growth. The company hired 519 people in the quarter, compared with 2,130 a year earlier. It also reduced once-rampant capital spending by 18%, to $452 million. "Across all categories of expenses, people have been very diligent" in watching costs, Chief Financial Officer Patrick Pichette said. Rob Sanderson, an analyst with American Technology Research, said investors are relieved that Google is willing to keep a lid on expenses to buoy profit.
Online Advertising: Slowdown Evident
While growth in the U.S. continues at a respectable pace, some analysts saw cause for concern in Europe. Although most regions experienced "solid" growth, according to Pichette, revenue in Britain rose only 17% from a year earlier, compared with a 29% gain in the second quarter. "That is going to spread into Continental Europe," Sanderson says.
Google beat forecasts despite a negative impact from the strengthening dollar, which reduced effective earnings because of Google's significant international business, which accounted for 51% of sales. That's likely to continue into the fourth quarter and next year, even with a currency hedging program that began last quarter.
Encouraging third-quarter results aside, Google may not be able to withstand the headwinds of a protracted recession, which economists see as increasingly likely. "We're starting to see evidence of a slowdown in online advertising," says Jonathan Weitz, an analyst at Interactive Broadband Consulting Group. Recent Interactive Advertising Bureau figures showed the first quarter-to-quarter decline in ad spending since 2004, Weitz noted. A recession could affect even search advertising, especially because it is driven by small and midsize businesses—which may be especially hurt by falling consumer demand and a scarcity of funds as banks curtail lending.
Search Ads Keep Selling
And even if companies keep spending on search ads, it's possible that consumers who click on them will end up choosing to buy less frequently. This, in turn, would make the ads less effective for advertisers, who could then bid less for ads placed alongside Google's search results. A new study by search marketing firm SearchIgnite, for instance, found a trouble spot: Retailers in particular are starting to reduce search ad spending, which slid 10% in September.
For now, however, overall search-related advertising is holding up, and that's good news for Google. "Search is not immune to macroeconomic gyrations," says Craig Macdonald, vice-president for marketing and product management at Covario, which makes online-marketing analysis software. "But [Google] will be the last to be affected," he adds. According to SearchIgnite, overall U.S. spending on search ads rose 27% in the third quarter. "Our clients continue to want to spend on search," says Kevin Lee, CEO of search marketing firm Didit.com. "Like it or not, paid search is the front door to your store."
Another reason Google's results may not reflect the larger picture in Internet advertising is the company's sheer dominance. Covario estimates that Google accounted for nearly 83% of search ad spending in the U.S. and more than 95% in Europe. Because of that lead in one of the fastest-growing segments of Internet advertising, the results shed little light on the broader market—in particular on the climate for Yahoo (YHOO), which reports its third quarter on Oct. 21.
Given the market meltdown of the past few weeks, Schmidt conceded that the economy is in "uncharted territory." As a result, analysts may remain cautious on Google's prospects. "There's a lot of doubt about whether the 2009 estimates are too high," says John Aiken, managing director of Majestic Research. Currently the consensus is for 23% revenue growth. Aiken thinks that 20% is more likely, and even 15% is possible. But for one more quarter, at least, Google has held the bears at bay.
Hof is BusinessWeek's Silicon Valley bureau chief.

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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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