Papers are going somewhere

And that somewhere is a path that leads to fewer pages, fewer ads and much lower revenue. Most dailies have essentially priced themselves into a pure luxury good for people who just like the smell of the ink and the feel of the newsprint under finger (I admit to falling into that category even though I no loner take a daily paper.)

Rishad Tobaccowala writes at Adweek on the future of the newspaper industry in a piece titled, “Papers Aren’t Going Anywhere,” and sees a relatively bright future, particularly in serving the local community. The problem with the article is it’s really about the reinvention of traditional print media into something completely different. Yes, if the newspaper industry can adapt to a brand new world, significantly alter business models and realize they don’t stand alone as arbiters of what news their market gets to consume then yeah, the newspaper industry might pull out of the current death spiral. I wouldn’t bet on it, though.

Here’s the four changes Tobaccowala’s sees as necessary for newspapers:

Having spent some time with senior and junior personnel across the newspaper industry, I know they know the perils they face. Many are making the difficult decisions and changes necessary to thrive. These changes are taking places in the following areas:

1. Culture: The newspaper industry needs to be reinvigorated. The people who created the cash cow of the paper package need help to create challenger products that will supplement and even cannibalize the newspaper. In many papers a cultural and organizational soap opera is occurring. I bet on the next generation to win since nothing trumps survival.

2. Technology: Organizations need to elevate the role of technology and technology partnerships to board-level status. The future will be about how to use technology to curate, combine and aid discovery of articles to relevant audiences at scale. This will require world-class technology smarts.

3. Partnering: In addition to technology partnerships, newspapers need to find ways to continue to embrace other voices into their bundle of products and services. These include the blogging community, the Yelps of the world and all the people outside the industry who are trying to reinvent the industry. We are living in a world of links and connections and, oddly, to be more competitive thinking synergistically is better than thinking competitively

4. Focus: Each news organization has to decide what it makes, what it shares and what it borrows. Vertical integration may be fine for Apple, but doing all things is a no go for most other firms. Each newspaper needs to determine what it’s best at or what, with investment, it could be best at. Share and borrow the rest.

And newspapers wonder why they are a dying breed

Via KurzweilAI.net — You couldn’t make this stuff up, “That social media thing? It’s a passing fad …”

NYT Bans The Word Tweet “Outside Of Ornithological Contexts”

The Awl, June 10, 2010 Phil Corbett, standards editor at the Times, has sent a memo asking writers to abstain from “tweet” as a noun or a verb, referring to messages on Twitter. Read Original Article>>

Newspapers are worse off than advertised

Probably much worse off. Not only is circulation down across the nation, new auditing rules allow newspapers to to count readers as paying customers in terms of circulation figures. I guess that’s nice to feebly prop up dying ad rates, but does nothing to stop the real bleeding. Add me to the cassandra chorus — newspapers as we still (barely) know them today will be gone within ten years. Maybe sooner.

From the link:

These looser standards are especially helpful to a newspaper if it sells an “electronic edition.” That can include a subscriber-only Web site, such as what The Wall Street Journal has, or it can be a digital replica of a newspaper’s printed product. Several dozen publications, including USA Today, sell access to these daily “e-editions” that show how the news was laid out in print.

Under the new auditing standards, if a newspaper sells a “bundled” subscription to both the print and electronic editions, the publication is often allowed to count that subscriber twice.

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.

It’s not clear what the numbers would have been under the old auditing standards. But the effects of the new rules were widespread. There were 59 newspapers that listed at least 5,000 electronic editions in their weekday circulations, according to an Associated Press review of the figures filed with the ABC for the April-September period. In all but a few instances, the number of electronic subscribers was substantially higher than a year ago.

Newspapers down for the count

I’ve blogged about the most recent newspaper industry problems here and here and even threw a little commentary on how this financial crisis is part of a downward-spiraling whole.

Here’s a story on the issues facing newspapers across the industry.

From the link just above this graf:

readers from print to the Web has become a widening torrent in this recession year. Most newspapers remain profitable, but the margins are dropping fast, with the industry losing about 15 percent of its ad revenue this year.

 

But the companies in the weakest condition are there largely because they borrowed a lot of money to buy papers, often at inflated prices, and the biggest of those deals were struck in 2006 and early 2007. Tribune’s was the biggest of those deals, $8.2 billion to take private the company whose assets include The Los Angeles Times, The Chicago Tribune and 23 television stations, a transaction that almost tripled the company’s debt.

In the year before that takeover was announced, the McClatchy Company bought Knight Ridder, including papers like The Miami Herald and The Kansas City Star; the MediaNews Group bought several papers, including The San Jose Mercury News and The Pioneer Press in St. Paul; investors in Philadelphia bought The Inquirer and The Daily News; a private equity firm, Avista Capital Partners, bought The Star Tribune in Minneapolis. Smaller companies like GateHouse Media bought up dozens of local papers.

If it were possible to unwind those deals, ”the business would still be in pretty difficult shape,” said John Puchalla, a vice president and senior analyst for Moody’s Investors Service.