Must Reads

Where have I been? Well, let's just say I got tired of saying many of the same things over and over. Besides, other people sometimes say them much better. Two cases in point today:

John Robinson, recently departed editor of the Greensboro News & Record and all-around smart, good guy, has gotten even smarter now that he's gotten some distance and perspective from his former job. (Same thing happened to John Temple.) He's blogging good suggestions on how newspapers can make themselves more relevant to and trusted by their communities, quickly and easily. Obvious stuff—except, as John admits, it wasn't so obvious until he got away from the daily grind.

The great Clay Shirky, who seems to have perfect pitch for understanding, explaining and analyzing the changes roiling the newspaper industry, takes on paywalls, er, online subscription models—and how they're changing the news business in many subtle, largely unrealized ways. It's very provocative stuff—there's too much of it even to pick out a representative quote. Go read it!

Newspaper Next, Five Years Later

Everybody in the newspaper business needs to read and think hard about Justin Ellis' Nieman Lab post mortem of the American Press Institute's Newspaper Next project from 2006.

Then ask yourself: Why are you still thinking about it as the "newspaper" business? Because that means you weren't paying enough attention.

Newspaper Next had its flaws, principally that it didn't go far enough in its "blueprint for transformation." (At the time, Jeff Jarvis correctly carped, "the project seems to be trying to move a big, old barge five degrees when we need to blow up the barge and pick up the pieces and build new boats.") But it still was a manifesto for change in a hidebound industry that was—and sadly, still is—staunchly resisting transformation.

As Ellis notes, even Newspaper Next's fairly timid recommendations had limited effect, further blunted by what he describes as newspapers' "near-extinction level event in 2008" (I wasn't aware it was limited to 2008—it's still going on!). The industry's dire financial problems and the massive staff cuts that followed choked off just about any of the kind of creative thinking about new products that Newspaper Next recommended.

As a result, five years on, newspapers haven't taken the kind of bold steps that Newspaper Next—much less bolder visionaries like Jarvis—prescribed for them. There's been a lot of talk, and too little action by an industry still gripped by fear of change, multiplied by unprecedented financial woes. The newspaper of 2011 isn't really radically different from the newspaper of 2006. Just thinner. Meantime, rivals like Facebook, Twitter, Groupon and the mobile revolution portended by the iPhone have flourished in the same period. At best, newspapers are playing catch-up—from farther and farther behind.

Worse, there have been unfortunate rollbacks of the sorts of interesting projects that Newspaper Next advocated, like Gannett's idiotic and ham-handed snuffing of the once-excellent MomsLikeMe initiative a couple weeks ago. John Paton, with his Digital First initiative at Journal Register and now the MediaNews properties, is doing by far the most interesting work in the field, but its results remain to be seen, and it feels too little too late. The time to act was long before Newspaper Next's 2006 manifesto.

Steve Buttry, part of Paton's Digital First team and an architect of Newspaper Next, has his own reflections on the project's legacy; he's disappointed, too. You should also read James Rainey's LA Times' analysis of the Philadelphia Inquirer's ill-fated effort to sell its own custom tablet, which on one hand is the sort of bold move Newspaper Next might have been applauded, but on the other hand was so ill-timed and botched that it just looks boneheaded. ZDNet's "How Not to Launch a Custom Tablet" story sums up the Philly fiasco nicely.

Newspapers, as Jarvis said five years ago (and before), don't need small experiments and test projects and niche products. They need rethinking from the ground up, with every single facet of the product and business severely questioned and cold-bloodedly scrapped if they're found wanting, with creative new products and approaches put in their place. Do you need every single feature you're stuffing into the paper? Do you need to print every day of the week? Are you selling to the right advertisers? Are your readers moving inexorably to the Web while you're still stubbornly trying to keep them on a printed product? (Hint: yes) These are all fundamental, foundational questions that newspaper managements need to be asking themselves (and their advertisers and readers), then truly listening to the answers and acting on them. That's what Newspaper Next, at its heart, was trying to encourage.

Jarvis was right five years ago, and he's even more right today: Blow up the barge. Build new boats.

I'll double down on what I said at the beginning: Still think you're in the "newspaper" business? Then you're part of the problem.

Newspapers Still Not Out of the Woods—If Ever

It turns out that 2010 wasn't quite the bloodbath in the newspaper business that some of us expected. After an initial outbreak of significant cutbacks, bankruptcy filings and closures that largely began in 2009, the vast majority of major papers made it through the year alive, mostly by cutting costs to the bone or by getting protection from their creditors in bankruptcy court. Revenue and circulation continued to decline at most papers, but at least they survived the year.

Still, a  flurry of industry headlines in the past few days indicates that the bleeding continues:

  • Gannett announced another week of unpaid employee furloughs—and in one case, pay cuts—at most of its papers.
  • The Raleigh News and Observer cut another 20 positions.
  • The bankers that own MediaNews Group, one of the nation's largest newspaper chains, ousted much of the company's top management.

The management shakeup at MediaNews is a real eyebrow-raiser, because the soon-to-be-deposed CEO, William Dean Singleton, is one of the industry's longtime titans—chairman of the Associated Press and a wheeler and dealer who has assembled a group of more than 50 papers, including the Denver Post and most of the dailies in the San Francisco Bay Area (outside of Hearst's San Francisco Chronicle).

Singleton built his empire on a mountain of debt, always staying one step ahead of his creditors. But MediaNews had to file for bankruptcy protection a year ago, and now it appears the bankers have taken over, ousting Singleton and his handpicked board, forcing company president Joseph Lodovic IV into sudden retirement, putting a bunch of bankers in temporary charge of the company and announcing a search for a new CEO.

That's a big fall for a big name, and it echoes the 2010 toppling of Sam Zell at Tribune Co. and Brian Tierney at Philadelphia Media Holdings—two others who tried to run newspaper companies with large amounts of debt, but ran into the realities of the industry's decline and the lousy economy, and were forced out by their bankers.

The Wall Street Journal is speculating that MediaNews might wind up merging with Freedom Newspapers, the publisher of the Orange County Register, which went bankrupt itself in 2009 and was taken over by its creditors–who happen to include investment firm Alden Global Capital, conveniently a significant owner of MediaNews, as well. Can two sick newspaper companies be combined to create one healthy one? Be skeptical.

The backdrop for the continuing upheaval in the newspaper business is a slowdown in print advertising that has morphed from ongoing to chronic. While the rest of the economy (including other advertising media) is slowly recovering, newspapers are still hurting. As Alan Mutter has pointed out, newspaper revenue dropped 5.4 percent in the third quarter, the latest period for which industry figures are available, the 17th consecutive quarter that newspaper ad sales have been down. As Mutter wrote, "Although the decay in newspaper ad sales has declined in each of the three quarters of 2010, the industry is the only one of the mass media still in negative territory." That's not good.

It doesn't seem very likely that things will get better. Newspaper circulation continues to decline, which in turn makes newspapers less attractive to advertisers. The deep cuts in most newsrooms have had predictable effects on newspaper quality, as well, which turns off readers and advertisers and adds to the vicious cycles of decline in circulation and revenue. A lot of advertising dollars are also shifting to other media, especially online players. There just aren't a lot of positive trends in the newspaper business.

And now, the news from Gannett, the News and Observer and MediaNews may be the canary in the coalmine for continuing problems. While most companies haven't released their fourth quarter results yet (much less aggregated industry totals), the timing of those actions, right after the first of the year, indicates that the numbers continued to be lousy as 2010 wrapped up, requiring still more Draconian measures.

It's painful to watch the newspaper industry get hollowed out like this. But it's hard to see the downward spiral truly being reversed. Cost cutting may restore a measure of profitability, at least temporarily—but it will also continue to make papers less attractive to customers that pay the bills. We may not have seen the barrage of newspaper closings or publication-cycle cutbacks in 2010 that many expected—but that doesn't mean they aren't still to come.

 PS: Ken Doctor's got an excellent post on Singleton's demise.

The Social Subscription

The argument between proponents of paywalls on news sites and those of us who are skeptical that news consumers will pay for anything but the most unique content rages on. But is there another path?

Reuters business journalist/blogger Felix Salmon thinks so. In a thought-provoking post, he wonders whether the real value to publishers and advertisers is not the pennies and registration data that might, maybe, be collected through online subscriptions—but the much deeper social data on readers that can be gleaned by analyzing their participation and connections in Twitter, Facebook, and the like.

I'm oversimplifying Salmon's argument. Let him make it:

[A]dvertisers, looking to reach a large audience online, are going to have to look past the simple question of whether or not people are paying for content. And they’re going to end up with a much more granular and useful way of working out who’s seeing their ads: social media.

The fact is that if I sign in to a free site using my Twitter login, I’m actually more valuable to advertisers than if I paid to enter that site. That’s because the list of people I follow on Twitter says a huge amount about me, and a smart media-buying organization can target ads at me which are much more narrowly focused than if all they knew about me was that I was paying to read the Times.

This is, of course, a variation of what proponents of online advertising have been arguing for years: That the trick to making money in online news (as it is in print, incidentally) is in selling advertisers highly targeted audiences at premium prices. Subscriptions sort of accomplish that by making it easier to identify audience members—but first you've got to get the audience to be willing to pay money to subscribe, and that's still a largely unproven (and largely unlikely, in my view) model. But by parsing a site visitor's social-network information, publishers can deliver all sorts of interesting targeting to advertisers.

There are privacy issues here, of course, as well as—as pointed out by one of Salmon's commenters—a question of just who ends up "owning" the reader. Is it the publisher? Or Facebook? Or does it matter?

But I think Salmon is onto something: a new model for monetizing audiences that breaks with simplistic old print paradigms (see audience; sell audience to advertisers; maybe try to charge audience) and takes advantage of the much more sophisticated data that social-networked site visitors are now carrying around with them. 

As Salmon says:

We’re not quite there yet. But it seems to me that online publications are making a big mistake if they make subscribers go through a dedicated registration and login process, because the demographic information they can get from that will be less useful and less accurate than if they outsource the reader-identification procedure to Twitter or LinkedIn or Facebook. And people will definitely enjoy an automatically personalized reading experience, where they can see what their Facebook friends are reading and what the people they follow on Twitter are reading.

Interesting stuff. Worth reading and thinking about.

Still Cooking the Books

As I've written before, the ability of newspaper circulation departments and publishers to spin good news from bad by deftly manipulating dodgy circulation numbers knows no bounds. And as things get ever more desperate in the newspaper business, the number cookers are getting ever more creative.

Witness this report from Michael Liedtke of the AP (oh, is he ever going to be unpopular with his wire service's members, and extra credit: that link goes to a Google News page!) about the latest example of creative accounting: double-counting readers of electronic editions who also happen to pay for the print copy. This turns out to be perfectly legal under the Audit Bureau of Circulations' conveniently flexible rules, even though it inflates circulation numbers.

If not for these rules, the industry's numbers would look even worse. Average weekday circulation at 379 U.S. newspapers fell 10.6 percent during the six months ending in September. That was the steepest decline ever recorded by the Audit Bureau of Circulations, the organization that verifies how many people are paying to read publications.

Yikes. Liedtke isn't the first to raise questions about the quality and veracity of the latest circulation numbers. The estimable Alan Mutter put up some red flags a few weeks ago, as well.

Publishers managed to make matters worse by taking unprecedented liberties with the way they tally the discount circulation that represents a significant percentage of the readership at many papers. …

The consequence of the change in the discounting rule is that circulation figures are all over the map. … 

The inconsistent circulation data is bound to not merely confound advertisers but also cut into the industry’s fragile credibility with them.

Of course, as Liedtke reports, nobody seems too upset that the numbers are getting less believable all the time. The papers are just playing by the rules set by the ABC, which gets steadily more pliable to keep its publisher customers happy. Nobody likes to hear bad news, after all. Or, in the case of newspaper circulation, really bad news.

It's not just print numbers that are getting fuzzy, either. Former WashingtonPost.com editor Jim Brady and others are tweeting up a storm tonight about murky online numbers, as well—which, as anybody who's ever worked with Web analytics knows, can be a black art—at best. "There are just as many games played with pageviews and unique visitors as newspapers play with circ," Jim tweets, and then asks: "Interesting Q for us Web-heads off the news about paper circ shadiness: Are we making the same mistake blindly chasing unique visitors?"

Interesting Q indeed. Fudging the numbers may make internal constituencies happy (and make bonuses attainable), but they'll bite you in the long run. Advertisers can count, too. And print newspapers already are paying the price for not delivering the results to advertisers they've long promised. Online stats should be more reliable. As in so many other things, news sites would best be served by not lapsing into bad counting habits inherited from the print side.

Introducing GrowthSpur

As much time as I spend on Recovering Journalist railing against the problems and failings of traditional media, I spend far more time away from the blog trying to come up with solutions and thinking about What Comes Next. That’s the main reason why I’ve been posting less frequently lately: I’ve been in the thick of creating a new company that will provide support for local media entrepreneurs.

It's called GrowthSpur, and it's the outgrowth of conversations among a group of new-media thinkers, including Jeff Jarvis and myself, about creating new business models to support local news and information  sources. GrowthSpur will provide tools, training, services and ad networks that will help local sites grow and become successful businesses. 

Countless local sites and blogs have been started over the past few years, mostly as labors of love, and there are many more to come as newspapers founder and journalists and community leaders look for new ways to provide news, information and forums to their neighbors. 

But as I know all too well from my experience as co-founder of early hyperlocal network Backfence, starting a successful local site is very hard. And many of these startups don’t give enough thought to revenue and business models needed to sustain a site or blog after the first blush of excitement or funding wears off.

That’s where GrowthSpur comes in. The company will provide a suite of tools and services that will take a lot of the guesswork out of starting or running local sites and turn them into successful, sustainable businesses, including:

  • Training local sites how to set up multiple revenue sources, including best practices in ad sales

  • Providing tools that local sites can use to manage and enhance their businesses, from ad-serving to analytics to mobile delivery

  • Organizing networks to bring local sites together to sell ads amongst themselves

  • Enabling “citizen ad sales” efforts that can provide additional sources of ad revenue to local sites by letting local entrepreneurs get into the ad-selling business

There’s no upfront cost to local sites for a GrowthSpur partnership. Our revenue model is a service fee on the advertising revenue we help you with. In other words, we make money if you make money. 

How much money? We believe, based on our research and experience, that a well-run, sophisticated local site can bring in more than $100,000 a year in revenue from advertising, e-commerce and other sources. GrowthSpur exists to help local entrepreneurs achieve that level of success—and more. 

While our initial focus is on independent local sites, we’re also aware that there are more traditional local media sites that can take advantage of the networks we’re creating to provide additional soruces of ad inventory and revenue. We’re happy to work with them, too.

As I mentioned, Jeff Jarvis, one of the smartest thinkers around about the changes in the media business, helped develop the concept and will be a senior advisor to the company. Other members of our founding team include:

  • Dave Chase, a former executive at Microsoft and its erstwhile local network, Sidewalk, who now operates his own local site, SunValleyOnline.

  • Tom Davidson, who focused on local efforts as a VP at Tribune Interactive.

  • Jennifer McFadden, formerly of New York Times Digital and co-founder of the Yale Entrepreneurial Institute.

  • Mel Taylor, a local advertising wiz who has shown companies like Tribune, Philly.com, FoxTV and ClearChannel how to improve their local online ad sales efforts.

My role is CEO and chief instigator. We’ve also assembled a first-rate advisory board, including people with extensive experience in local sites, media and startups:

  • Jonathan Weber is founder of NewWest.net, another pioneer in this field

  • Michael Rogers was the New York Times Co.’s futurist and editor and publisher of Newsweek.com 
  • Chris Schroeder is CEO of HealthCentral and former CEO of WashingtonPost.Newsweek Interactive

  • Liddy Manson was CEO of DigitalSports and a former executive of WashingtonPost.Newsweek Interactive

  • Josh Grotstein is CEO of MotionBox and was a partner in SAS Investors, one of the backers of Backfence. He’s also been an executive at Prodigy and NBC.

One more GrowthSpur resource: We’re privileged to be working with Jarvis’ New Business Models for News program at CUNY’s Graduate School of Journalism. Their help has been invaluable in helping us understand the needs of local sites.

GrowthSpur is open for business, and we’re already working with our first group of charter partners. If you run a local site and would like our help, go to our site, read more about it and get in touch with us. We’re still in our early stages, but we’ll try to help you as much as we can. 

And while GrowthSpur will be taking much of my time, not to worry. I’ll still be making occasional trouble here at Recovering Journalist.

PS: Jon Fine at BusinessWeek has a column about GrowthSpur. And Jeff Jarvis weighs in at BuzzMachine.

Upwardly Mobile, Pt. 2: What Works

Just as it was stupid to paste a newspaper onto a computer screen, it's dumb to assume that what works on the Web works on a cellphone screen. They're very different.

In the first part of this two-part post, I described the explosive growth in the delivery of news and information to mobile devices such as cellphones and smartphones—and why newspapers and other local news organizations need to jump quickly into the mobile fray with sophisticated products that have real potential for advertising and even subscription revenue. In this part, I look at what works (and doesn't) in mobile—and why it's different from news and information delivery on the Web.

What really distinguishes mobile is immediacy and location. You want news and info you can use immediately to make a decision—to reroute your trip home because of a traffic jam, to find out about a fast-breaking story or sports score, or to search and find a restaurant, an entertainment venue or a local business. The phone in your hand is your direct pipeline to solving problems right here, right now, and mobile-enabled services have to recognize that. It's the purest definition of the old "news you can use" chestnut.

That breaks down when news organizations aren't smart about what they provide mobile users. I'm a subscriber to WashingtonPost.com's local text alerts, for instance, which veer wildly between traffic and weather bulletins (generally very useful) and not-particularly-time-dependent local news headlines (not very useful, and generally limited to District of Columbia news rather than the Washington suburbs where most of the Post's audience lives). The Post's iPhone-enabled site is fairly slick, but it isn't updated frequently enough: While the text alert service was prompt in delivering results of Virginia's gubernatorial primary election this week, the WashingtonPost.com iPhone app was hours behind with the news. The Post's mobile products are also very lazy about redirecting users to the Web site for more information (a lost opportunity) and do nothing with advertising (lost revenue!).

That's a case study in how not to do mobile news, or at least how to do it poorly. On the other side of the ledger is Tampa Bay Online's ambitious mobile service, which slices and dices local traffic and weather information (the latter very important in hurricane-prone Florida) down to the local town level, so that users get exactly what they want and need in those areas. It even provides localized radar weather maps.

Tim Repsher, who oversees mobile services for Tampa Bay Online and its parent company, Media General, says the secret to a good mobile strategy is "news and information, wherever, anytime, anywhere." A mobile user is "looking for something I want to know right now. … I want to know things as they happen." And that information has to be immediately useful and actionable—not something that can easily wait to be read later. Art Howe, whose Verve Wireless supplies mobile services to Media General and many other newspaper companies, echoes that sentiment: What works in mobile, he says, is "stuff that is immediate to peoples' lives. It's stuff that helps you through your day and your life."

Along those lines, mobile users want to be able to use their phones to search for restaurants, businesses and the like, preferably with reviews and other information (this is why Yelp's iPhone application is so good). Other things that work: Personalized classifieds notifications (e.g. the car you're looking for just popped into the classifieds database), hot deals, sports scores—even high school football results: Media General's WSAV-TV in Savannah signed up booster clubs at 44 high schools to provide real-time football play-by-play via text messages, and gave the boosters a piece of the associated ad revenue to keep them properly motivated. Smart.

Repsher emphasizes that Media General doesn't see mobile as a standalone business. "We use mobile to always draw people back into the core product," he says. "Mobile is supplemental to all your efforts, all your products. It should never be standalone." Media General also uses mobile services to help reporters and photographers file stories and photos, to update liveblogs and Twitter, to solicit and gather user-generated content, and even to help advertisers build their own mobile services. Oh yeah—Repsher also says the company's mobile business is "very profitable," with a very aggressive ad-sales effort.

That's a sophisticated mobile strategy, one that other papers and local news organizations should be studying and emulating. Just as the Web did 15 years ago, mobile is really taking off as a news and information delivery platform, and it may even prove to be more ubiquitous than the Web (the notorious "digital divide" doesn't seem to be affecting mobile growth, so seemingly everybody has—or will have soon—a cellphone or smartphone in their pocket). Perhaps even more so than the Web—and as a direct replacement for the portability of newsprint—smart mobile products give newspapers a chance to retighten their loosening grip on local audiences and advertisers.

PS: The NAA is doing webinars on mobile strategies.

That Loud Yelp You Hear is Newspapers Being Squeezed—Again

There's something I've said in passing in a couple of posts and comments recently—and in any number of offline conversations—that bears highlighting: I believe that Yelp is doing the kind of fundamental damage to newspapers' traditional local entertainment listing and reviewing role that craigslist did to classifieds.

I'm not the only one making this point. Paul Smalera made a great argument about Yelp's dominance in Slate's The Big Money recently, and Peter Krasilovsky raised the spectre of Yelp reaching critical mass as far back as November.

What's happening is that Yelp now has enough crowdsourced participants and reviews of enough businesses in enough markets to be a truly useful tool in trying to decide what to do for entertainment (and more). Combined with search and geo-location (Yelp's iPhone app is indispensable), Yelp is becoming a very powerful tool. 

That's a big deal for newspapers, which long have touted their allegedly encyclopedic knowledge of the local scene, as well as their restaurant and entertainment reviewers. But why grapple with clumsy newspaper entertainment-guide and calendar interfaces, and take the word of a single, over-stretched reviewer, when you can quickly see what the crowd is saying on Yelp about the place you want to go? And as Yelp expands its reach beyond restaurants and entertainment locations into other local businesses, it's becoming even more valuable. Advertisers will be sure to follow.

The last really defensible franchise for newspapers is local news and information, and local entertainment, dining and business listings and guides are a critical part of that franchise—especially in the ways they can attract advertisers. But if Yelp is providing a better, easier to use mousetrap, just as craigslist did with classifieds, newspapers are going to lose big. Yet again.

John Temple and the Forecast of Doom

Maybe you have to get out of the newspaper business to get the proper perspective on everything that's wrong with it. Or maybe John Temple knew all along, but just couldn't push the boulder far enough up the hill as president and editor of the Rocky Mountain News. 

Either way, four months after the death of his newspaper, Temple has become one of the clearest-eyed observers of the industry. In an echo of the splendid frustration earlier this week from Dan at the Xark blog and a similar screed from venture capitalist John Thornton, Temple is unsparing in his comments about the recent meeting of newspaper execs in Chicago and the API's feeble set of recommendations to those executives. 

I'll sum up what these three thinkers, and others of us, are saying: The industry, and its leaders, after years of incredible strategic errors and miscalculations, have now set a course to sail straight off the edge of the cliff. The mistakes that are being made in meetings like the one in Chicago, or proposed by the API report, will be the final nail in the newspaper business' coffin. It's that simple.

And Never is Heard a Discouraging Word…

Jeff Jarvis, poking around lately in the post-modern world of advertising, has hit upon a scary thought: What if, basically, advertisers don't need media to reach audiences? What if advertising, as we know it, is irrevocably, irretrievably broken?

Jeff writes: 

So here's the real punchline: Advertising ends up having nothing to do with media. They become decoupled. Audience no longer yields advertising. Hell, advertising isn’t advertising. It’s relationships. Media only get in the way. There’s the corner we’re painted into, the chaos scenario, perhaps the doomsday scenario for media.

Doomsday scenario indeed. (Bob Garfield has presaged some of this thinking in his excellent Chaos Scenario, soon to be a book.) To put it another way: In a world where anybody–including an advertiser–can be a publisher via the Web and other digital media, why do advertisers even need to bother with the middlemen (i.e. newspapers, magazines, broadcasters–the ad-supported media) to reach audiences? Get a Web site or Twit or online campaign to go viral and you've bypassed the traditional channels. 

One might argue that you still need mass media to start the fire—that somehow, word has to get out that there's something great there, so that the virality can be stoked. Susan Boyle on YouTube, kindled by British TV and U.S. news reports (though those mostly came after YouTube), might be an extreme example. And maybe there still will be a role for media in focusing audiences for advertisers to reach. Maybe.

But I think we're going to see more examples of grassroots phenomena that spread on their own, without traditional media help, and advertisers figuring out how to take advantage of that to save themselves huge amounts of money in getting the word out. It's still a crude system (hell, so is advertising as we know it—remember, Wanamaker was an optimist!), but it's not hard to envision a world somewhere down the road in which advertisers are, well, no longer advertisers anymore, and decide they don't need the media middlemen. 

Uh-oh.