Dorian Benkoil senior consultant at Teeming Media. An award-winning journalist and editor, he was a foreign correspondent for AP and Newsweek, and international and managing editor for ABCNews.com. At ABC News he moved to the business side, handling sales integration and business development, before joining Fairchild Publications as General Manager for their Internet division, becoming editorial director for mediabistro.com, then a consultant for Teeming Media in New York. He graduates this year with an MBA from Baruch's Zicklin school of business. Learn more about him at Benkoil.com or his blog - MediaFlect.com.
Robert Cauthorn is a journalist, former vice president of digital
media at the San Francisco Chronicle, and was the third recipient of
the Newspaper Association of America's prestigious Digital Pioneer
Award. He launched one of the first five newspapers web sites in the
world and is generally considered to have delivered the first
profitable newspaper web site in 1995. Cauthorn has been in the middle
of the transition from old media to new and is recognized as
frank-talking critic when he believes newspapers stray for their
mission. In mid-2004 he became the president of CityTools, LLC a new
media startup based in San Francisco.
Ben Compaine has divided his career between the academic world and private business. He was a journalist when manual typewriters were considered state of the art, but also led the conversion of his college newspaper to cold type. He has started and managed weekly newspapers. His dissertation at Temple University in 1977 was about the changing technologies that were going to unsettle the landscape of the staid and low profit newspaper industry. Since then he has focused his research and consulting on examining the forces and trends at work in the information industries. Among his most well-known works (and the name of his blog) is "Who Owns the Media?".
Vin Crosbie has been called "the Practical Futurist" by Folio, the trade journal of the American magazine industry. Editor & Publisher magazine, the trade journal of the American newspaper industry, devoted the Overview chapter of executive research report Digital Delivery of News: A How-to Guide for Publishers to his work. His speech to the National Association of Broadcasters annual conference was one of 24 orations selected by a team of speech professors for publication in the reference book Representative American Speeches 2004-2005. He has keynoted the Seybold Publishing Strategies conference in 2000; co-chaired and co-moderated last year's annual Beyond the Printed Word the digital publishing conference in Vienna; and regularly speaks at most major online news media conferences. He is currently in residence as adjunct professor of visual and interactive communications and senior consultant on executive education in new media at Syracuse University's S.I. Newhouse School of Public Communications, and meanwhile is managing partner of the media consulting firm of Digital Deliverance LLC in Greenwich, Connecticut.
About this blog
Two forces have shattered the news media. Technology is the first. Although media technology is undergoing its greatest change since the day in 1440 when Johannes Gutenberg first inked type, for more than ten years now the news industry has mistaken new technologies merely as electronic ways to distribute otherwise printed or analog products. Estrangement is the second. The news media has lost touch with people's needs and interests during the past 30 years, as demonstrated by rapidly declining readerships of newspapers and audiences of broadcast news. How we rebuild news media appropriate to the 21st Century from the growing rubble of this industry is the subject of this group weblog.
In the Pipeline: Don't miss Derek Lowe's excellent commentary on drug discovery and the pharma industry in general at In the Pipeline
Two pieces of seemingly unrelated news hit the online world about 24 hours apart. However, the first may weigh heavily on the second.
Number one was the announcement yesterday (June 2) from AT&T signaling the end, for now at least, of unlimited wireless broadband. As of June 7 most 3G iPad users and all buyers of iPhones and other AT&T connected smartphones will have to pay for data based on usage. Unless grandfathered, from now on it will all be metered.
According to most reports (the New York Times’ David Pogue among them), most smartphone users should come out ahead by under either of the two plans. AT&T itself calculated that 65% of its subscribers use less than 200 mb of the lower price option (half the cost of the current unlimited plan they have) and altogether 98% use under the 2 gb limit of the higher price plan. But for the newer iPad, optimized for streaming video and more accommodating for watching You Tube, will these parameters stunt their use?
The matters if we probe the implications of the second news item, an AP story under the headline “Publishers see signs the iPad can restore ad money.” It began: “Good news for the news business: Companies are paying newspapers and magazines up to five times as much to place ads in their iPad applications as what similar advertising costs on regular websites.”
The story noted that “early evidence suggests the iPad is at least offering publishers a way to get more money out of advertisers.” Perhaps prophetically, though, author Andrew Vanacore hedged his bets, adding two graphs later: “Still, a lot will need to go right for publishers before the iPad and imitator tablet computers become a significant source of income.”
The seeds of what may not go right comes soon enough. Describing why iPad applications such as USA Today’s can justify higher ad rates than the standard online ad, Vanacore replays this scenario: “A reader can click on Courtyard by Marriott's USA Today ad and then with a flick of a finger scroll through images of the hotels' updated lobby design. Another tap and a high-definition video appears, full of happy hotel guests.”
But wait. With AT&T’s new data limited plans, this simple “tap” will generate perhaps megabytes of “high definition” video. Will tablet users want to eat up precious data usage on a Marriott ad. When the pool was bottomless, well, so what. With the pool is emptying fast, then perhaps not. At least, not as spontaneously.
AT&T’s new data plans are likely to be mimicked by other carriers eventually. Some or all might hold off initially so as to gain a short term competitive advantage. But they know AT&T is right. The spectrum for data is finite and when any commodity is free it get overused. Some mechanism is needed to ration it.
Every decision has consequences. It’s not unusual for some to be unintended. Matt Richtel, in his report describing AT&T’s data plan announcement, closed his piece with this anecdote:
“Mike Lapchick, an AT&T customer in Chicago, said that he tended to use his iPhone mostly for e-mail, and that he would probably see his data bill drop in half to $15.
“But Mr. Lapchick, who is the chief executive of a company that makes software used by Internet retailers to allow consumers to zoom in on product images, has another concern. As unlimited data plans go away, it could prompt cellphone users to watch their intake.”
He may not have realized it, but Lapchick could have been describing every media business that has hope that iPad and its competitors' forthcoming tablets may just have been blindsided by AT&T without being aware of what hit them. At least not yet.
According to a piece from The New York Times this week, “No topic is more hotly debated in book circles at the moment than the timing, pricing and ultimate impact of e-books on the financial health of publishers and retailers.” It goes on to says that publishers are concerned about making e-editions of their trade books available the same time as the print edition.
Amidst the uncertainty of how to treat the e-books is the fear of cannibalization of hardcover sales. “If you as a consumer can look at a book and say: ‘I have two products; one is $27.95, and the other is $9.95. Which should I buy?’,” according to Dominique Raccah, chief executive of Sourcebooks.
I’ve been delving into the nuances of book distribution and marketing since I wrote a book about the subject in 1978. And, typical for anything about the book publishing industry, notably missing form this article, and most such discussions, is an examination of the economics and the retail marketplace.
First, for bestsellers, at least—which is what this article focuses on—the real retail price of a hardcover fiction is not about $25 or $30 but the 40% discount price charged by most major outlets, including Amazon and B&N. Thus, the real price difference for most consumers is roughly $15 to $18 for the hard copy vs. $10 for the e-book.
Second, the article does have one data point—that Amazon is paying the same price for the e-book as the hardcover. Assume that is 50% off list. So that from the publisher’s position, it gets the same revenue no matter which format. And it saves the manufacturing cost. And it gets no returns! What’s not to like?
Third, this discussion would be enhanced by knowing how author royalties are being handled these days. If the author is earning a royalty based on a percentage of the revenue the publisher receives, then it is at worst a wash whether it is a percentage of the physical book or the price the e-book distributors pay. And to the extent that books are price elastic, the $10 e-book price point could potentially increase sales, thus resulting in greater revenue.
The difference between the business model needs of the legacy media and the new Web based media has t do with network externalities. This economic concept holds that the value of the services increases exponentially with the number of users of the service. Think telephone networks, fax, Facebook. In all these cases the value is in other users. For the traditional media there are few if any network affects. The value of the content of the Boston Globe to be is neither increased nor decreased for me as circulation does down—or up. Twitter, on the other hand, becomes more valuable as more users can get access to posts or me to the potential posts or more and more other users.
I’ll come back to this at the end.
The construct of network externalities struck me while reading coverage of the annual media conference sponsored by small investment bank Allen & Co. for 27 years usually generates news just because of who attends: the top executives of the big media companies, the young stars of the Internet challengers, investment bankers, some politicians, academics and a few outliers, like a sports star. Though the sessions are closed to the media, there are enough leaks to keep the scribes busy,
Most years the gist of the news is about who might be acquiring or merging with whom. This year, in the midst of an economic slump that puts the kabash on merger activity, much of the chatter was about business models. Media companies that for decades—or centuries—thought they knew where their revenue was coming from are in a quandary about where they might be getting their next dollars or Euros.
Thus the latest theme is the insistence-- from New Corp’s Rupert Murdoch, IAC’s Barry Diller, Liberty Media’s John Malone, Disney’s Robert Iger, among others -- that the free content gravy trend must end. Consumers are going to have to learn to pay for content online as they do in print or via cable, for music and movies. The legacy media have been struggling with the online model for years now—so far with limited success to show for their all their studies, experiments and worries.
But for me, the more fascinating discussion was the one of the business model for the new guys, like Twitter and YouTube. Diller reportedly told one session that he did not see how Twitter could make any money, despite its growing visibility. It has something north of 4.5 million accounts, but only a small fraction actually post anything.
What business model might work for Twitter? It has been highly successful in attracting users and in generating “buzz.” But so far it does not have a business model. It is operating on $55 million of venture capital.
A report on the Allen & Co conference, says that apparently some of the smartest media and Web executives could not come up with a model that would work to generate revenue without undercutting the network externalities that have been so crucial to Twitter's adoption.
Barry Diller, a media industry veteran, commented "I think it's a great service. I just don't think it's a natural advertising medium." John Malone, a cable industry pioneer and savvy media investor, voiced a similar view. Twitter would be hard-pressed to sell advertising on its messaging service without alienating users. He added that Twitter's best bet is to simply get people so addicted to the service that they might eventually pay fees. Malone claimed that Warren Buffet, one of the most successful investors, was thinking along the same lines, applying that model to YouTube, another media property that is wildly successful as measured by use, but still quite unprofitable. Buffett told Malone he would pay $5 a month to continue using it (that’s easy to say for the second wealthiest man in the world).
So here we have publishers and programmers and cable operators not only worried about their tried, if not quite true, business models in the face of declining circulation or viewership, unable even to see a healthy financial outcome for the new players that are growing exponentially, at the same time they achieve millions of users. Can it be that bleak?
So, finally, back to network externalities. The reason why a subscriber fee as a revenue source is a dangerous road for Facebook, MySpace, Twitter, or YouTube and the like is that any sort of charge, even a nominal one, is likely to lop off a substantial portion of its user base. This is the "Penny Gap.” – the experience that getting a user to go from free to any sort of payment, even a penny, is, in the online world, harder than getting a paying subscriber to pay more.That is, going from free to one cent a month would see a larger drop off in users that a service charging $1 riaisng its price to $2. The Penny Gap effect sets the network externality model in reverse. As some users drop off, the service becomes less useful to the remaining users, they are less enamored with it and drop and so it spirals down. Thus, services that thrive on network externalities need to proceed very cautiously—as their founders and managers presumably understand.
The folks who run the Web sites of legacy media, whether the online sites of the newspapers or newer sites like Hulu, do not have this issue. The value to me of my local newpaper—or its Web site—does not depend on the increase or decrease in the numbner of subscribers (except indirectly in the form of maybe more or less content as it generate more or less revenue).
The Penny Gap issue remains. Though media execs are calling for an end to free content as a way to save their franchises, so far no one has been willing to make the move, as they fear it will have a greater impact on the ad revenue than user fees will bring in. When The New York Times abandoned its subscriber Times Select pay tier, it made the decision that it could make more from advertising to large numbers than from a combination of subscriber revenue and lower advertising dollars.
The lesson is that the legacy media folks are going to have to solve their business model problem with a different solution than the one that might be best for new content Web sites like Twitter.
What could the Globe fetch? Well, certainly nothing within a rifle shot of the $1.1 billion it paid 16 years ago. David Carr, himself of the Times, asked six experts who specialize in valuing media properties. You could get the short answer in his column.
But even more fascinating is the almost stream-of-conscious responses of the six that he posts verbatim on the Media Decoder blog at the Times site.
The values—all guesses of course-- range from $250 million to a negative $25 million. Yes—The Times Co. might need to offer a buyer (if it could be called that) cash to take off their books the stream of losses projected for the paper into the immediate future, the union contracts and the 400 guaranteed-for-life jobs.
Bottom line? The price of the newspaper company may be less than what it charges ($1.00) to buy a copy of the newspaper.
Jeff Jarvis says Google is not the enemy but for many it’s also clearly not a friend. Panelists yesterday at Digital Hollywood’s Advertising 2.0 conference cited $Goog for creating an environment in which consumers expect that information and entertainment will be free, and for confusing the idea of capturing and engaging consumers, getting them involved in a marketing message, brand and the like. “Google is the culprit, they’re not interested in engagement,” said Jonathan Klein, CEO of Getty Images. “You come in, and then go out.”
This, just a couple days after The Wall Street Journal’s article on the Justice Department taking a closer look at Google’s deal with publishers to put books online, in the context of a broader push toward antitrust investigations in the technology industry. Clearly, a portion of Google CEO Eric Schmidt’s job is going to be focused on battling Washington, and wooing the advertising and publishing industries. And, of course fending off competition from a host of companies and products like Microsoft’s Bing that are, in the words of Warren Lee, Venture Partner at VC firm Canaan Partners, trying to “out-Google Google.”
For most though, though, Google is simply an “is.” It has to be dealt with and understood. Its analytics are useful for those who want at least an entry-level solution for Web analytics. Its search, and sometimes its ads, and office tools can be used to good effect -- again, especially for those who don’t need large enterprise solutions, or don’t have large staffs to build them. It has a valuable, if not highly diversified, business model, and a model that is not the panacea for media, but rather a component of some media businesses.
Yes, journalism and marketing are converging, sharing the same terms and concepts. Editorial icon Tina Brown, journalist-turned-entrepreneur John Harris of the Politico and Tina Sharkey of BabyCenter were very comfortable at Digital Hollywood’s Advertising 2.0 conference today talking up the value to advertisers of their sites, and their willingness to go well beyond the banner ad to try to integrate advertising in more creative and interesting ways (though Brown and Harris were careful point out that advertising initiatives were labeled as such). “The muscles you use on the editorial side,” help with advertising, Harris said, in helping a message “break through” to the audience. “We see the journalistic and advertising sides as two forces galloping together.”
“There was a time when advertising staff was not allowed to step into the newsroom,” observed moderator Sarah Ellison of The Wall Street Journal. “Obviously we’ve come a very long way from that point.” Brown noted that in the magazine world, as editor of such leading publications as Vanity Fair and The New Yorker, she was always comfortable working with the publisher to “create an environment where advertisers want to be.”
But she seemed to take umbrage at the idea of marketers trying to do their own journalism (such as this recent Pepsi-led project for Internet week, for which I was editor in chief). To them, “I would say good luck,” Brown said, defending journalism and saying it takes real skill to practice it, and to edit it. (Assuming, it seemed that those who practice it on behalf of Pepsi are not journalists.) I had asked her how she would convince an advertiser to put ads on her site, if they could go to their target audience directly without her Daily Beast as an interlocutor. Sharkey, who is not and has not been a journalist, acknowledged that it was all a mishmash, very confusing with “marketers as publishers, publishers are marketers, brfands are agencies, agencies are brands ... it’s like ‘Who’s on First.’ “
Few of my friends or acquaintances are fans of the editorial
page of The Wall Street Journal. I live in Cambridge,
Mass, where President Obama received 88% of the vote in November.
So I thought I’d call their—and your—attention to the lead editorial
in today’s paper. Titled “Ink-Stained Politicians,” it is critical of congressional
initiatives to “rescue” the newspaper industry. One of the leaders of this
movement is my own senator, John Kerry. As are many of us, he is concerned
about the future
of the hometown Boston Globe. (The stakes may be particularly high, though,
for the senator. In his re-election bid last year the Globe gushed:"The case for reelecting John Kerry
would be strong under any circumstances . . . [but] the country needs his voice
more than ever.")
So it was Sen. Kerry’s subcommittee that held
a hearing on May 6 titled "The Future of Journalism." It was a
morose affair, with publishers enumerating the fate of failing and fallen
comrades. Then the senators turned to the culprits, Huffington Post and Google.
The hook for the
hearings was what role Congress could conjure to help out what Kerry buys into as “the fourth branch of government.” One
proposal, from Maryland Senator Benjamin Cardin, would allow newspapers to convert
to nonprofit status (hmm-it seems like the point is that they are already nonprofits.
What they should say is not-for-profits). Their operating revenues would be tax
exempt. In return, they would be precluded from endorsing political candidates, though, as the
Journal points out, that wouldn’t prevent them from taking sides more subtlety.
The other idea being floated was some sort of an antitrust
exemption that, as described by Dallas Morning News publisher James Moroney,
would allow the newspaper industry to conspire to find ways for making money from
putting the work of its journalists online. Of course, I thought that was what
the industry has been doing with such projects as Newspaper Next and The Newspaper Project. But I
suppose a major league baseball-like exemption would allow publishers to band
together for steps that would prevent the Huffington Posts and Googles from
making money off their backs.
The Journal’s position is one that I have trumpeted, as have
my colleagues here Dorian
Crosbie. That is to let the forces of technologies, consumer behavior and
the marketplace play themselves out, at least for awhile longer, before
have argued (as have others) that there will be changes, for sure. But that
there will also evolve multiple business models. There will be winners and
losers. Services lost-- for example some local coverage if some cities or towns
lose their daily printed papers—are highly likely to be regained as new players
jump in to fill a vacuum.
We see hints of that with an array of Web sites that focus
on local and even hyperlocal news. Some, like EveryBlock, for the moment are compendia
of links to local government sites, some blogs and even local news from other
sources. But that doesn't mean that is their end point. It is their opening gambit. Should they gain traction some will start adding original content (or they may find the togain traction they will need original reporting). A few, such as Buffalo Rising and Patch, already do have reporters covering the local
scene. Very few now. But given time, and a market, more
speaks for many in the legacy media who are urging Congress to legislate a
"consent for content" requirement to get the Googles and Huffington
Posts of the online world to pay "fair compensation" for content they
pick up and then sell advertising on. The
Journal comments“So, although most
newspapers are giving away their content free online, the feds should guarantee
them a stipend from anyone who gets someone to pay for it. There's a winning
In any event, it would seem to be a matter for negotiation rather than legislation.
The Journal continues: “The larger story here is that
newspapers are enduring the familiar process of economic "creative
destruction," in this case brought on by the Internet. Advertisers are
fleeing to search engines, while barriers to entry in publishing have crashed.
Despite the pain this causes to certain companies, this is not much different
than any other industry buffeted by new technology or business strategies.”
Creative destruction is right. In the early 1990s, the 200 year old Encyclopaedia Britannica was a $650 million company. Five years later in was bringing in one third that. It’s business model based on a high priced part time sales force selling “guilt” as much as $2000 sets of books was undermined by Microsoft’s Encarta, given away for free on a CD with a new computer and based on an old Funk & Wagnall supermarket-distributed encyclopedia. The World Book suffered similarly. Both have had to retreat and reformulate to survive in the world of DVDs and online delivery. Where was Congress then?
The Journal’s editorial concludes with an argument almost
stolen (dare I charge?) from a recent post of mine, save the last line:
“Some new business model will
emerge for journalism, if not for all newspapers, and in the meantime the
business of reporting the news isn't vanishing. It is taking new forms and
adapting, with newspapers growing their audiences online even as the sources of
their revenue shift. The industry is currently debating how to charge customers
for content, and no doubt many experiments will be tried. No matter who emerges
victorious, the journalism business will be stronger and more credible if it
avoids the government's embrace.”
To its credit, the Obama Administration is keeping its distance. Press Secretary Robert Gibbs, responding to a question, commented that while it's sad for cities to lose their daily papers, any public assistance "might be a tricky area to get into.…I don't know what, in all honesty, government can do about it."
The sooner the suits in Washington
and the executive suites in Dallas
understand that, the better off it will be for the future of journalism.
Steve Outing today pointed me to Journalism Online, a new attempt to charge for journalistic content. The press release makes it seem they’ll be offering readers a way to pay one price and pick from among paid content they want, and publishers a chance to make their efforts available at a price point they choose. Users will be able to pick stories a la carte, or via subscription. The release frequently mentions newspapers, but also says there are talks with magazines.
The release says ads, alone, can’t and never have paid for quality journalism. Maybe not. And we’ll find out if J.O. is right that Americans will pay for journalism because they understand it needs to be supported. I’m not so sure. They will pay for convenience, ease of use, utility and access they wouldn’t otherwise have.
What will make this work, I think, is from the reader side:
if they can get what they want with ease
if the price point is low enough that convenience outweighs the desire to go hunting for the info elsewhere (think iTunes)
If there are enough publications available
if the content is not commoditized or the kinds of stuff available so many other places that it’s easy to find. (I doubt breaking news or big stories available all over the place will make much money.)
... and for publishers:
the ability to make additional incremental revenue from content they couldn’t get on their own.
strong Incentives to cooperate in the project rather than go it alone, as they’re so used to doing
ease of installation and use
flexible pricing -- Journalism Online is promising to let publishers charge their own prices and adjust them.
data, which J.O. is also promising, to allow quick changes in pricing, story mix, etc. (“Journalism Online will provide reports to member publishers on which strategies and tactics are achieving the best results in building circulation revenue while maintaining the traffic necessary to support advertising revenue.”)
assurance their content won’t be pilfered, will be in an environment they can trust in every sense
enough revenue and revenue share that they’ll feel it’s a fair shake, that J.O. isn’t taking too much of a cut.
The below is from Steve Outing, who posits that allowing only paid subscribers to participate fully in a community’s news site can be a component of a valid business model. He may be right. But what about the competing issue of blocking those who haven’t paid from commenting and participating. Do we create a separate class of reader/citizen? Does the paper have an obligation along these lines? Not taking a position. Just asking the question.
A paid subscription also will allow you to interact with the site and its staff, and participate in discussions, daily chats and comment threads; free readers won’t have their voices heard. (I have to say, this is not a bad idea. Many popular newspaper Web sites have comment threads that are out of control and populated largely, it sometimes seems, by idiots who drown out the sane and smart voices. Charging to be part of the conversation is one way to create more rational, intelligent and useful discussions — albeit smaller — between journalists and readers, and readers and other readers.)
Arianna Huffington, along with NYU professor Jay Rosen and others, are causing a buzz today with their announcement of a new HuffFund to support investigative journalism with $1.75 million in contributions from The Huffington Post (HuffPo) and multi-billion-wielding The Atlantic Philanthropies. “This nonprofit Fund will produce a wide-range of investigative journalism created by both staff reporters and freelance writers,” HuffPo chief Arianna Huffington writes. She writes, further, that this is an attempt to preserve investigative journalism and the crucial role it plays in democracy “during this transitional period for the media.”
It’s good she puts it that way - that the support is during a transitional period. It’s easy to fear that going hand-out to foundations becomes the way those working in the field come to think of as the natural way of things. Others have laid out some of the dangers: Foundations want control; they have specific missions that may be in conflict with the purity of purpose required of investigative journalism; they can be quasi-governmental, slow-moving and bureaucratic. Yet, one could raise equally challenging views of investigative journalism that’s sponsored by commercial interests. It’s hard to find any really good investigative pieces about real estate in any newspaper, reliant as they are on real estate advertising. It’s easy to find reporters and editors who will tell of pieces being tempered for reasons they believe have to do with the need to not offend a sponsor (a.k.a. funder). The ability to continue great journalistic work has relied largely on the strength of character of those doing that work, and their bosses -- anyone from executives of TV networks to the families that run great newspapers. Today, perhaps, that will include the Arianna Huffingtons, Atlantic Philanthropies and Knight Foundations of the world. (An aside: I haven’t seen much discussion of the Medicis and other benefactors who have facilitated creation of some of the great art of our civilizations. Perhaps there’s an analogy there.)
Within the foundation-supported model, the most powerful news organizations will be one(s) that move toward self-sustainability. Mixed revenue models-- without the need to call on the generosity of benefactors -- are surely the best for a number of reasons I won’t get into deeply here, but include everything from creating offsetting revenue streams that bring in different types of cash flows (advertising, subscription, products, events, etc.) to not relying on any one benefactor, so that even if one or the other revenue stream dries up or drops out the core project(s) can continue. Jeff Jarvis writes that what can make this work is the one-percent rule that works in a “gift economy”: If one percent of consumers will support a project, the project can be sustained, as for NPR and Wikipedia. If the one-percent can, ultimately, sustain the journalism without foundation input or control, great. But it doesn’t have to be a gift economy. I’d argue that the one-percent rule is analogous to marketing -- one percent or fewer of people who see a marketing message will take action that justifies the marketing spend. And in this instance the product, itself, is its own marketing message. There is not a need for a separate marketing budget or PR spend (see Fred Wilson's recent Tweet on Twitter and Etsy getting on CBS TV without PR agencies).
And just as the need for short-term profit should not drive a company to destroy its core businesses, the need for ad revenue should not allow a journalistic enterprise to gut its ventures. The effects of that kind of thinking and acting is evident today. We’ve seen weather and sports and tech news blown out while simple coverage of community school boards and local politicians languishes.
The structure of newspapers has not been born of editorial need or service to the communities that consume them but rather commercial convenience. While separate sections for Local, National, International and Opinion may be driven by news decision and interest, one could equally imagine a newspaper where clearly delineated opinion about any given topic appears next to the relevant news story (much as is done with links and feeds digitally) or in which car news and financial news appears on the same page, rather than in separate ‘auto” and “personal finance” sections that serve advertisers of those types of content. Sections have been created and blossomed in those way to support advertisers in each of those verticals. In re-imagining the news business, let’s also free our thinking, as Rosen has done, from the need to have news be created solely by “professionals,” and also from the need to structure news sections and pages according to preconceived notions of what a reader is interested in.
In a “search economy,” people will find and assemble what they want on their Facebook and DailyMe and Netvibes and Instapaper and whatever other pages according to their interests. Those interests create a powerful profile, and “opt-ins” that give clues as to what those folks might be willing to support through contributions, purchases, ad viewing and more. That can then support the journalism they want and need, and, for those willing to tap it while serving them, make the news self-sustaining.
A college classmate, Peter, who lives in Ann Arbor, Michigan, asked me what “my take” was on the changes in the media world, referring to the de facto demise of this home town Ann Arbor News.
If you’ve been on vacation in Bali and didn’t want to pay the $15 a day resort Internet fee, the shut down of the 45,000 circulation News will make this the first city to lose its newspaper. The plan, according to owner Advance Publications, is to completely shut down the operation, lay off all empoylees, then start fresh with two new companies that will need far fewer staff. One, a Web venture called AnnArbor.com, will have some original reporting but rely substantially on reader input and community forums. A second company is described as a printing company that will publish a twice weekly newspaper fo some sort. Advance is also cutting back its daily newspapers in Flint, Saginaw, and Bay City to a thrice weekly schedule.
Types of organizations eligible for non-profit status under IRS 501(c)
My take, I wrote Peter, is that I suspect new players will see it as an opportunity to pick up the slack. They will enter with a different expense base. Maybe no single one will totally replace today's version of the newspaper, but in aggregate they will cover whatever territory for which there is a demand, e.g., an entertainment paper-- probably ad supported. More local stuff online. More stuff you can view on iPhone-like devices or Kindle-like. We’re in a period of fits and starts, but if there is a market there will be big guys or entrepreneurs who will fill the gaps. At the premium end there is the example of the for-profit (they hope) GlobalPost.com. The low end may be the for-profit (they hope) citizen journalist new AnnArbor.com.
But what about the not-for-profit model, a proposal popularized by an op-ed piece in The New York Times last month? An academic study being prepared for publication in the Journal of Media Economics this summer (I’ll post more details in July) looks at the fortunes of nonprofits in the magazine business. It notes that “nonprofit” can take many forms, both legally and as operational models. Many not for profits rely heavily on advertising revenue, just as their for-profit cousins. The study observes that they can be just as susceptible to economic downturns as for profit publications.
Indeed, at a small conference I attended earlier this month, I pointedly asked Rick Edmonds of the Poynter Institute whether the general downward pressures facing the newspaper industry had affected the St. Petersburg Times. That paper is something of the poster child for the non-profit model. The paper is controlled by a foundation set up by the late Nelson Poynter. If the paper has a surplus – the nonprofit term for profit—it declares a dividend. This is turn is the primary source of support for the many good program of the Poynter Institute. Edmunds had to admit that the Times is indeed taking a hit from the same forces felt by all newspapers. It has made staff cuts in its newsroom to help keep up profit. Even so, dividends are down. The Poynter Institute has a comfortable cash reserve for now. But the larger point is that the Times as well as the Institute are not immune to the forces and trends in the industry or the economy.
Philanthropic organizations—even the wealthiest—cannot defy gravity. Harvard, the richest of universities, is having to make major cutback because its endowment—line the financial markets—shrunk 22% ($8 billion) between July and October 2008 alone.
So let’s suppose that a newspaper does indeed have a billion dollar endowment behind it. To generate income it must invest that money somewhere. The more aggressively it’s invested, the more money for the newsroom. If invested in Treasury notes, the endowment is safer—but it may be short changing its mission—essentially leaving money on the table that could be used for journalism. So it takes a moderate course of investment. And suppose that lets the endowment generate a 5% return devoted to newspaper operations. That would be $50 million initially, a nice subsidy to keep up salaries, news bureaus, staffing. But what happens, as it has this past year, if the invested funds lose 20% of their value—well under the markets overall financial loses in the past year, thanks to our hypothetical endowment's conservative portfolio.
Now, with an $800 million portfolio, if it still drew 5%, it could only add $40 million to its income. What’s a publisher to do? Just as advertising and circulation revenue are falling, so is the endowment income that could otherwise prop up its finances. True, it may be better off than its fully for- profit brethren. But it will inevitably need to make cuts: in personnel, in travel, in salaries—the same types of cuts we hear about weekly.
So not-for-profit is not the solution, endowments are not the solution. What is?
As I wrote to Peter, there is not a solution. We have left behind an either/or world for one of many options. There is opportunity for non-profits, such as the well established Pulitzer Center on Crisis Reporting or the new Pro Publica. The entrepreneurial for-profit sector is represented by a new model with GlobalPost. The Detroit newspapers are leading the way (or were pushed) for daily newspapers in hybrid online and print. Advance Publications is trying out another for profit model in Ann Arbor.
The result will be an evolving stew of print, online, mobile, video and audio news sources—international, national, local and hyperlocal. For profit and not for profit. From existing well known media companies, from nonmedia players, from entrepreneurial start-ups. Those that will be successful and those that will prove unsuccessful.
When I teach about marketing, the most important word I emphasize is the word “some.” I tell them not to think in terms of “People want more news” or “People are willing (or unwilling) to pay for…” Market segmentation is about “some." “Some people” want. “Some people” will pay. Some. The digital technologies here and still emerging make it far more efficient to provide news, entertainment, whatever, to each of us in more forms than at any time in history.
It was striking at the Media Summit in New York today how definitive the people on the future of advertising panel seemed compared to the more unsettled tone of the one on the future of news. The news people, from Vanity Fair writer and Newser.com co-founder Michael Wolff (“We just don’t know how to fashion our product” for the new market of news consumers) to Michael Oreskes of AP and ex- of The New York Times (he said there’s a debate about whether there’s even such a thing as journalism) to Dick Meyer of NPR ex of CBS News (who quoted Clay Shirky’s recent essay on disruption of the newspaper business and said we "don’t have a clue" what’s next), were all candid about their grasp for a business model, let alone an editorial process and structure that works to produce news and satisfy an audience today. (Related thoughts on the disruption being much further than for news, here.)
Meanwhile, the advertising and marketing panelists sounded like they knew the solution -- engage consumers in a conversation, be part of a discussion, don’t just bombard them with ad messages -- and were convinced they simply have to lead others in the industry (product managers, marketers, media buyers) to think on their scale and not be locked into old methodologies. Bob Jeffrey of JWT said it doesn’t matter how much is spent on a campaign, what matters is how much it can engage an audience. Carl Fremont of Digitas called for more “active listening," then a “proactive, reactive strategy" of messaging back to consumers by joining in conversations they are having (presumably in places like social networks). He said old models of pushing ads at people weren’t going to work, and that there would be more development of social applications that provide real value and get consumers to opt in. The panelists all agreed on convergence, and also seemed to think TV would make a comeback as it became more addressable through digital technologies.
A later conversation I had with IBM researcher Bill Battino, who moderated the ad panel, said that the clients -- the companies buying the advertising -- were often leading the charge, had combined what were formally separate and segmented advertising and marketing budgets into a more unified whole from which they could then address the challenge of reaching audience through a holistic rather than silo’d media view (display ads, here, direct marketing over there...).
Whatever the state of play between clients and agencies, there was general agreement on the need for entering the “conversation” with consumers, rather than hitting them with messages, to get people to engage, to use technologies to know more about audiences, and to be genuine in messages, seemed to get general nods of agreement. One would think the same might hold for news ; after all, what better way to get at what a news consumers want than to ask them and have them contribute? I’m loathe, hesitant to say the advertising people are farther along in understanding the ways out of the current morass more than those producing news. But I can say I’ve seen it happen before, where the advertisers adapt and adopt a technology (behavioral targeting comes to mind) well before it’s talked about as a way of delivering content.
Nathan Richardson, CEO of ContentNext, writes that newspapers, with old thinking, could learn something from Silicon Valley, and their attitude of sharing both ideas and information. Well written, and a little inside peak at when he was at the Wall Street Journal. But one part of it gave me pause:
Finally had a chance to read and consider this piece. Nicely written and reasoned, and even has some smiles. One portion gives me pause:
“Portals should agree to show search results only for the original sources of news content, as opposed to outlets that have repurposed that content.”
That kind of restrictive thinking seems fair at first glance -- after all, shouldn’t the one creating the content be the one who reaps the benefit? -- but it goes against the grain of the way it’s been done not just for the past 10 years of Web journalism, but for the past 40-50 years, with broadcasters and others picking up information, and, if fairly, attributing it to the original source.
Today’s model calls more for incentive than restriction. Perhaps we could allow for some kind of prioritization in the search algorithm for the originator of the content. And some sort of additional revenue to the creator, where there is a shared revenue scheme.
But by highlighting only the creator (which will often mean the large player), Google and the other search engines would be alienating a significant chunk of their constituency, favoring one business over another, and potentially violating tenets of free speech. For example, commentary on a piece of journalism or even pickup of a small portion of it might be fair use, and thus deserve to the be linked to from the search -- and something the searcher would want to see. If the algorithm excludes those results, because they weren’t from the originator of the content, it might be a disservice all around. (Not to mention that the original’s SEO ranking would suffer because of fewer links and accesses to it.)
A final thought: Where would PaidContent be had the system of excluding repurposed content been in place?
At the Digiday Social conference today, Alan Brody of iBreakfast conjectured that we’re moving into a “relationship economy” that’s replacing the current “knowledge economy.” (Made me think of Howard Lindzon’s Social Leverage -- his thesis, in a nutshell, that using relationships and “leveraging” their power is now beating the concept of “financial leverage.”) Brody talked of how relationships -- built up over years, with special people who can hire, do favors, etc. -- cannot be outsourced to faceless people overseas, while knowledge work can. He said there are MBAs and college-educated people walking around India and Zimbabwe with every bit of useful knowledge of the people with multiple degrees in the U.S. who used to be able to use that knowledge they’d acquired to make sure they’d “never have to dig a ditch.”
Still, even in a relationship economy, the technology speeds things up, adds leverage, power. Companies like Social Vibe, whose CEO Joe Marchese was also at the conference, have shortened the timeline for creating relationships from years to months. Its passionate users select ads to place on their social network pages (such as on Facebook and MySpace) and then designate charities to receive any funds they earn. Those users are passionate, and feel a tremendous connection -- a relationship, if you will -- with SocialVibe.
Still, unlike a purely transactional commercial relationship, this one, because it runs deeper is more easy for Social Vibe to violate. The company will have to treat their passionate users with extreme care and nurturing. The company, venture-funded, seeking profit, and having arrived at their current model more by accident than by grand plan, must trust its backers to not push for fast cash above all. Marchese assured me in a previous discussion (for the We Media conference), that the backers -- including VCs JAFCO and Redpoint -- won’t subjugate the need to develop and care for users to the need to turn a profit. At We Media conference there seemed something of a consensus that, in fact, by doing social good many now believe profits will be stronger over time.
(Note that both iBreakfast and We Media have been media partners of our show, Naked Media.)
I fell asleep the other night watching Twitter CEO Ev Williams on Charlie Rose (not his fault, I was tired), so am relying on PaidContent’s synopsis of what he said. He was apparently vague on how Twitter plans to make money. Co-founder Biz Stone was less so in a conversation he and I had for the We Media Game Changer awards.
Biz indicated they’re hoping to forego traditional advertising and instead quiz their power corporate users to find out what kinds of services or features they might pay for -- a way, for example, to officially verify that a Twitter account is actually from who it claims to be. From the Game Changer essay (PDF Format):
They plan to start creating revenues this year, moving up from their original plan of 2010, asking businesses like Whole Foods, Jet Blue and Comcast -- who use Twitter feeds to stay in touch with customers -- what new features and services they might pay for. He doesn’t, he says, expect you’ll see traditional Web advertising.
Biz said they don’t know what the services would be but is confident the companies they ask will have ideas that Twitter can then turn into something that will be paid for and help create a sustainable business. He said he wants it to be an easy-to-use tool (not one-off consulting). Another idea he hinted at was helping companies monitor mentions of their names, and turn that into a commercial service.
With Twitter’s open API, though, and thousands of mashups and applications, with more every week, I can’t help but wonder if ideas like what Biz is proposing will already be developed by someone else before Twitter gets to it. What’s to prevent a third party from making a powerful way for companies to scrape and find mentions of their name? Others have already tried to integrate ads. (Twittads is one example.) StockTwits is building a business off the Twitter platform. Dell has sold $1 million of equipment, it says, off its feed. So, if there is a way for Twitter to help Dell double, or quintuple that, sure, there could be a business. But will Twitter, itself, get there first? One of the very things that has made them so powerfully successful, their openness and ability of others to use and re-use the tool, may also be a challenge. On the other hand, pundits at first said Google had to way to make money.
There is a delicious irony that the wireless phone companies reap the rewards of enlisting tens of millions of users to pay about $10 monthly for the feature of sending and receiving 160 character text messages, yet publishers can’t make a business of convincing a small fraction of that number to pay half that amount to receive an online “newspaper” or magazine.” We pay to create our own information but won’t pay to receive news and other information created by “professionals.”
This phenomenon is at the heart of a sudden groundswell of concern for the future of the newspaper. Of course, it’s been building, with wave after wave of bad news (which editors thrive on when it refers to anything but their own backyard) of steep declines in circulation and an erosion in advertising that transcends the fall off signaled by the general recession.
And the remedies being proposed? Stripped to their core, there are two. One is to rely on some form of philanthropy. An investment officer at Yale and a financial analyst propose turning newspapers into nonprofit organizations, perhaps endowed by a foundation. They estimate that it would take only $5 billion to fund The New York Times (assuming I suppose a stock market that is more robust that we see at the moment).
The second is to cajole readers to pay something for the online version or to pay more for the print version. In this column I’m focusing on the latter. Another day I’ll add my analysis to the non-profit fantasy.
The re-ignition of the “pay for content”—or as it is now called a “paywall” --- is a response to the tsunami of bad news emanating from all corners of the legacy media business. Although local television and radio are hurting while magazines are downsizing, most of the Sturm und Drang has been about the even worse performance of newspapers. The New York Times has eliminated its dividends to conserve cash and has taken a $250 million loan from a Mexican oligarch. Hearst Corp., once the largest newspaper publisher in the U.S., put the Seattle Post-Intelligencer up for sale Jan. 9, and announced it will convert to digital only or shut it down if a buyer is not found soon. Same for its San Francisco Chronicle. The Detroit Free Press and The Detroit News now deliver papers only on Thursdays, Fridays and Sunday. The Tribune Company is in bankruptcy. And on it goes.
The argument of the growing bandwagon is that newspapers must stop giving away their content free in their online incarnation. They can’t depend on advertising revenue to pay for the same amount of quality journalism that has been supported under the traditional newspaper business model. They need to start charging something. Though not new (I last wrote about it almost three years ago), the subject has been largely dormant until recent months) when a flurry of articles and Blog posts have energized the subject. Tim Burden, at Printed Matters, has nicely annotated the debate since December.
The Achilles heal of this line of reasoning is that advertisers have long covered the full cost of content for newspapers. The share of the total cost of running a newspaper that is derived from circulation revenue has at best covered the cost of the paper, ink and maybe the press, the gas and trucks. Subtract the cost of the presses, printing and delivery and subtract the revenue paid by readers and what is left is the actually the cost of producing the content and the revenue provided by advertisers. At its core, readers have been receiving the information for free for decades.
So if the issue is how can “newspapers” continue to provide whatever mission we think they have fulfilled for the past century as they migrate to an all digital format, then we must follow the money. And that takes us to advertisers-- the same folks who make Google “free” and Yahoo “free” and Huffington Post “free” and “Politico “free.”
If newspapers have essentially been able to thrive on the revenue from advertisers alone (again, with cost of printing more or less covered by circulation revenue), why are they having so much trouble today? The answer is not one single factor, But a major contributor is that newspapers – whether print or digital—are just worth less to advertisers than they were 20 years ago. Back then, local advertisers did not have many options for reaching the mass local audience. What was the alternative for auto dealers? For real estate agents? Supermarkets or department stores? For some, direct mail was one possible option. But that was about it. Using pre-prints instead of ROP became attractive for some large display advertisers, leaving the publishers with a piece of the cash flow. Advertisers were hit with regular rate increases. And they pretty much had to pay, The publishers made good money.
But then a double whammy. Just about the time the Internet became a real alternative for classified listings—think Craigslist, Monster.com, eBay, Autotrader.com—and for retailers—think DoubleClick, Google, et al—the boys at the cable operators had perfected the insertion of highly local spots into their feeds. Between 1989 and 2007 local cable advertising increased from $500 million to $4.3 billion—or from 0.4% of all advertising to 1.6%. Advertising in newspapers fell from 26% to 15% in this period. Although some of the highly local advertisers going to cable may have taken some of their funds from budgets for radio or other local media, it is probable that a significant share came from the hides of newspapers. I estimate perhaps up to 20% of the decline in local newspaper advertising share can be attributed to local cable spots.
The other whammy, the gorilla in the room, is Internet advertising. No need to elaborate. But its impact on newspapers is not just that it has siphoned off dollars per se. Much more importantly is that the Internet has given most advertisers greater market power against newspaper publishers. Many big advertisers—like car dealers, real estate offices and big box retailers—don’t need the newspapers as much.
And this also explains why even an all-digital newspaper may have trouble supporting its economic model with online advertising. If newspapers could have simply eliminated all hard copy production costs and kept its advertising rates at the online equivalent of print milline rate, they could be profitable even with less advertising. But online rates are much lower on an equivalent copy sold vs. online visitor basis.
All old media also had a house edge over advertisers stemming from merchant John Wanamaker’s insight, “Half my advertising dollars are wasted. I just don’t know which half.” Now they do. Publishers (and broadcasters) are at a disadvantage in promoting the efficacy of their product when online metrics provide much greater certainty on who is clicking and even buying, vs. the legacy media.
Hence, the renewed look at shaking coins from the readers or viewers. Easier wished than accomplished. We already have a history of those who have tried and succeeded. It’s a short list: The Wall Street Journal. Those who have tried and considered it a failure include The New York Times, Slate, the Atlanta newspapers and USAToday. The Penny Gap lives.
The magnitude of the challenge can be distilled from The New York Times’experience with its Times Select. In its two years of existence, the Times attracted 227,000 paying customers, at $49 annually. This translates into about $11 million annually. And this was just for access to a portion of its material. In abandoning a partial pay model, the Times calculated that it could get greater revenue from advertising on those paid for pages by opening them up, no charge.
I suspect that what we will find in the intermediate future is a mix of models and choices, among them:
• The Detroit model is one reasonable experiment: An attractive daily digital version, with home delivery of the paper reduced to Thursday, Friday and Sunday.
• An advertising supported all digital model, with the publisher closing down the printing plant, selling off its trucks, laying off the circulation and production departments.
• A voluntary pay model. This may take one of several forms. The “shareware” model for software has proven to work to a point. Users are asked to pay what they can or think the product is worth. Many users will be free riders. But, as we see with public television and radio, millions in their audience make annual contributions. (In 2007 at least one-third of those who downloaded Radiohead’s free "In Rainbow" album made a payment, in some cases higher than what the band would have received from a CD sale.)
How these and other variations develop will also depend on changes in the mobile business. The rate of adoption of SmartPhones with iPhone-sized screens; the pricing and availability of e-readers, such as the Amazon Kindle and the price for wireless broadband will enter into the viability of digital news formats replacing physical formats.
On the one hand, he does not see a scenario where most daily newspapers can survive by squeezing a few dollars a month in the form of micropayment from readers. Having tried the user-pays-something route at Slate, he holds this to be a nonstarter.
But he does see the survivors—several of the major news organizations, plus a few “local papers that execute their transfer to the Web so brilliantly that they will earn a national readership” or some “Web site [that] might mutate into a real Web newspaper” – as actually providing more choice for most readers than existed in the past when there were thousands of print newspapers. Furthermore, “Competition is growing as well among Web sites that think there is money to be made performing the local paper’s local functions. One or two of these will turn out to be right.”
The result, observes Kinsley, is that the “American newspaper industry will be more competitive than it was when there were hundreds.” This is a song a few of us have been singing for years. Soon we might have a chorus.
Investors here at the AlwaysOn media conference have been confirming in private discussions and on stage what angel investor David Rose said recently: that their money is having to stretch farther, that others are reluctant to come into the rounds as early.
One venture capital investor also told me he’s seeing “A Series pricing” for B and C rounds, meaning that people investing even later in a company’s life cycle are able to, for their money, get a larger share of the equity. For example, instead of getting 15 percent of the company, they’re able to get a fifth of it, he said.
But in a sign of optimism, another, based in Silicon Valley, said that funds of money that were raised 1-2 years ago are still uninvested, so they will need soon to find something to invest in in the next few months.
Later, on a panel about later-stage venture capital investment, Alan Spoon, Managing General Partner of Polaris Venture Partners, said he was seeing more funds looking to others for liquidity, trying to shore up balance sheets and less interested in such calculations as ROI (return on investment -- which in the financial world is a more specific ratio than often gets thrown around in advertising) and IRR, another ratio that figures out the internal rate of return -- how much a company is supposed to be able to earn from the money it has.
The pressures on the markets are making hedge funds and mutual funds get out of the venture game, the panelists also said, and money is being lent and companies being valued at much lower valuations than before the bust.
I'm pleased to report that the Out of Town News kiosk in Harvard Square is not ready for a 30. It apparently has found a new proprietor. I wrote in November that the long time owner was intent on
closing it when its lease expired at the end of that month. It agreed with the landlord-- the City of Cambridge-- to remain open through January while a new operator was sought.
The Cambridge Chronicle reported last week that
there were four bidders. The high bidder was an outfit that runs several other newsstands in the Boston area. At $140 per square feet for the 451 square foot landmark, the rent will actually be a bit
higher than the previous owner paid. Reports of the death of Out of Town News were pre-mature.
A NY Times Op Ed today suggests newspapers should move to a foundation-supported model and become 501(c)3 not-for-profits. Through that model, with its tax advantages, the newspaper business can survive, the authors write.
Their piece starts by quoting Thomas Jefferson, who said he’d prefer a country with newspapers and no government to the inverse. But I don’t know that Jefferson would have anticipated the rise of everything from public radio to the BBC, from Pajamas Media to The Huffington Post to hyper-local news websites. Many people have come to think of newspapers as the catch-alls of community information, with hard news in one section, opinion in another and service in yet other pages. They have been constructed that way, in large part, because of the business model. Advertisers were assured that news would be presented without slant so as to offend no potential customers, while in other sections relevant ads could appear next to relevant content -- food ads next to recipes, electronics in the tech section, car ads near car articles and so on. Of course, the biggest economic decline for newspapers comes from the classifieds, which for newspapers were like printing money.* Today, the newspapers’ cost structures -- everything from huge printing operations to sales staff and organizational hierarchies -- are in place to support such a business model, built up over decades in which their medium had near-monopoly status. Newspaper chains had achieved such levels of profitability that they competed with oil companies for investors' hearts on stock exchanges. Those investors were interested in whopping financial returns rather than any journalism the papers produced, or even seeing that the papers survived.
Yes, as Dave Morgan, Jeff Jarvis, my colleagues on Rebuilding Media, I and others have written, there are ways to use the newspapers’ cost structures to better effect. Sure, there’s a place for the foundation, or at least the not-for-profit contributory model. NPR is one example. The Knight Foundation is experimenting, to the tune of tens of millions of dollars, with endowing various news ventures to see what can survive and thrive. In a recent interview conducted for the We Media Game Changer awards, Knight president Alberto Ibarguen said the best measure of success for the funded projects would be whether those in the local communities used them for news and information, correcting himself when I challenged an earlier assertion he made that success would be spelled when mainstream news organizations used the nascent products. That kind of flexible thinking is unusual in the news business, and it came from a man who once ran the Miami Herald.
Just because the newspaper business as practiced isn’t feasible, that doesn’t mean news will die or that there is no model to support it. Many smaller blogs are serving their local communities and covering their costs -- without large staffs or printing presses, and minimal costs for infrastructure, distribution and sales. I’ve been told that certain free dailies, such as my hometown’s amNY, are profitable, even if their operations are taken as a standalone entity. Blogs and free newspapers run on a shoestring are not the only possible for-profit business models, either. News cannot always be expected to make a profit, on its own. Network news shows were, according to books I've read, originally seen as public service loss leaders, attracting viewers to entertainment shows that in turn funded the news programming. The news shows also helped the networks keep in the good graces of the FCC. (TV news shows apparently became profit machines only after producers in the Roone Arledge era showed that TV news magazines, morning shows and their ilk could bring the kinds of sponsor-pleasing audiences that would earn many millions of dollars.) Other news operations are also supported by separate operations. The Advocate, a leading voice of news for and about the gay and lesbian community, is funded at least in part by an entertainment company that produces movies and other fare. The news operations of Thomson Reuters are a fraction of the operational cost and income of the financial information parts of the company. Other news organizations are supported by events, custom or other paid media, syndication and other outlets.
I'm not saying foundation support of the news business is a bad idea, inasmuch as news is a public trust. They could be a healthy part of the mix. The foundation-supported news product could even feed the for-profit ventures, much like News 21 and Pro Publica are trying to do.
I don’t know in what fashion(s) the news business will survive, but I do have a very clear picture of how to make individual news operations work cost-effectively -- whether funded by benefactors, investors' capital or simply readers and ads. The ramp-up to profitability takes awhile but much less time than the five or more years it typically takes in the print world. Everything from GigaOm to PaidContent to Gawker Media to The Poliico, from MarketWatch to some very targeted products I’ve worked on under non-disclosure agreements are run as real businesses. Whatever you think of their journalism, they’re no less reliable, journalistically, than a panoply of so-called mainstream newspapers and tabloids I could cite.
There are for-profit models there, and great journalism can survive. Just maybe not in the newspaper business the way it’s been run.
* Classified ads were almost literally printing money. Every square inch of the page represented income, and profit. That was so much profit per square inch, in fact, that newspapers for years were in the very top in profitability -- up there competing with oil companies for the highest profit margins. And the list continues, with auto ads, real estate ads, coupons and other forms of informational advertising to a highly interested buying public that has been rendered, if not useless, at least much less cost-effective by a much more efficient Web, delivered online or on mobile devices.
When I wrote about the expected cut back on home delivery for the Detroit newspapers, the assumption would be that many of the affected customers could access the online sites of the newspapers. I have learned, however, that the alternative to the “paper” paper is a bit more involved. Beyond the traditional Web site, the newspapers will be introducing rather impressive digital editions.
The digital version is more than a Web site. When initially accessed, the user sees a low resolution rendition of the front page on the left of the screen. Clicking on any article brings up the text of the article on the right. In a touch that tries to preserve the traditional flavor of the print paper, the etxt of articles with a jump actually stop where they would on the front page, followed by a link to the jumped page, but then continues with the rest of the article following. It’s an anachronism—but I can see the rationale for this formatting.
Users also have the option to display two pages across in the layout of the actual newspaper. In this format, the cursor changes to a magnifier, so a click on the low rez image enlarges it to a readable size. Yet another option allows downloading individual sections or even the entire newspaper as a pdf file. (Today’s newspaper was a 46 mb ZIP file). As best as I can tell this still needs some work, as each page is a separate pdf file.
The technology is far more amenable to user preferences than the more static approach taken by YuDu or The Sporting News or other previous digital publications’ digital editions.
The notion behind the digital edition is that it is fixed, being a representation of the print version. It is not updated 24/7. It IS the printed paper, digitally rendered. There is no ink to rub off or newsprint to toss out, but otherwise it has the benefits—pages randomly accessible – and drawbacks—fixed in time—as the print edition. Users are advised to go to the paper’s Web site for updates and breaking news.
I also tried it on my iPhone and it worked well, with the usual caveat of the iPhone’s small screen. But I could use all of the digital version’s functionality. Apparently the digital edition does not use Flash or any other non-browser standard technology.
The digital Free Press (and any other newspaper that adopts a similar technology) won’t appeal to everyone. Nothing does. SmartPhone access can provide some flexibility for mobile use, but is not a satisfying substitute. Reading a digital version, even on a nice widescreen monitor, is confining to a fixed place. But it is not hard to see the possibilities. If compatible with e-readers, such as Amazon’s Kindle or the newly introduced iRex with a 10” “paper” screen, the portability issue and the form factor hurdle recede.
Of course, the technologies only address the economics of the newspaper. They do not solve the enduring bigger question: Who will be paying to buy a newspaper, digital or otherwise?
The auto industry is not the only one in Detroit that is hurting badly. The Wall Street Journal reported today that The Detroit Free Press and The Detroit News will cease home delivery four days a week. The two newspapers are independently owned (by Gannett and MediaNews Group, respectively) but operate under a joint operating agreement that handles business operations for both papers, including delivery.
It’s no surprise that newspapers have been hurting, but the Detroit papers seem to be failing faster than those in other cities. Circulation of the papers is down between 15% (Free Press) and 22% (News), a long term slide that has no doubt been exacerbated by the troubles particular to Detroit’s major business.
The official announcement, expected next week, specifically refers to home delivery, suggesting that the papers will continue to print hard copies daily, with distribution limited to newsstands the four non-delivery days. The digital versions will continue as well.
I would have to assume that, if this comes to pass, the green eye shade folks have figured out the savings for this half-a-loaf strategy. I need to be convinced. If they do indeed still turn the presses every day, then the only savings are the variable costs of ink, newsprint, and delivery costs for the home delivered copies. All other fixed first copy costs stay the same. Subtracted from the savings is the lower advertising rates that could be charged for those days, reflecting lower circulation. The cut back is expected to be accompanied by a dramatic redesign of the print editions, which may have some cost implications. I guess we should wait for the details to make a final judgment.
The pending announcement makes very real the current virtual office pool in media circles, the winner being closest to predicting when the first major city newspaper would announce it would become an online-only service. Indeed, we may have a winner. in his column last week on media predictions for 2009, Business Week columnist Jon Fine included this precocious prophecy: “More than one newspaper in a top-100 market ceases publication or reduces its print edition to something unrecognizable as a daily newspaper.” Had he heard the scuttlebutt about Detroit, or is he just that good? (Fine also wrote “At least one recent, heavily leveraged media deal—Tribune, Univision, Clear Channel, the Minneapolis Star Tribune, I could go on—goes bankrupt. A week later the Tribune company did file for Chapter 11, though that debacle was a bit more foreseeable).
Two months ago, the Christian Science Monitor announced that it would become a weekly in print, along with its continually refreshed Web version. The Monitor has long been suffering so it was even less a surprise that the Tribune filing.
Still, this is quite likely the start of a trend. Some publishers may be emboldened by the Detroit plan to move ahead their own online-only strategy. Others can wait and see how it works out for Gannett and MediaNews, then either follow suit or decide to find other ways to cut costs. My own prediction (drum roll please) if that over the next two or three years more dailies will move to a hybrid platform, akin to Detroit, with less than daily delivery or even printing. The early trickle could become a stampede by the end of the decade, regardless of how fast the economy recovers. Newspaper economics are changing.
There is no dearth of bad news about the state of the newspaper business: Declining circulation and advertising linage, translating into repeated downsizing of staff and bureaus.
But much of that is abstract for those not actually losing jobs. So here’s a blast that brings the harsh reality home: Out of Town News, the venerable international news outlet in the epicenter of Harvard Square, in the epicenter of one of the more literate nooks of the world, is closing.
Out of Town News used to be a bustling hub, situated just outside Harvard Yard, across from the Harvard Coop bookstore, at the literal crossroads of Massachusetts Ave, JFK Street and Brattle Street. It was at the entrance (or exit) to the Red Line of the subway system.
John Kenneth Galbraith bought a copy of Le Monde there every day. Julia Child searched for obscure Italian and German cooking magazines, and Robert Frost once stopped by - it actually was a snowy evening - to get directions to a reading.
I used to stop by often. Outside there were stacks of the Globe and Herald, The New York Times, New York Post and the Daily News, Wall Street Journal and Washington Post. Inside were shelves laden with newspapers from Los Angeles, Philadelphia, Denver, Athens, Tel Aviv, London, Paris, Frankfurt, Tokyo: Indeed, 200 cities. Its name was truth in advertising. There were also hundreds of magazine titles, inside and outside. Customers could stand there and browse—or even read—without fear of being asked to move along.
But times change. I haven’t bought anything from Out of Town News in maybe 10 years. And apparently many others haven’t. Galbraith and Child are gone—replaced by a new generation that can read today’s Le Monde online—instead of paying $4 for a two day old issue.
Out of Town News was started by Sheldon Cohen in 1955. Previously he hawked newspapers with his father at the subway station. I met Cohen in the early 1980s. At the time I was working at a policy research program at Harvard, trying to scope out the implications of the inevitable transition to digital for the information industry. For a guy with ink under his nails, he was precociously curious not only about what threats that might have for the print business but what opportunities it might hold for him.
Though later I would see him now and then in the Square, I don’t know for sure where those few discussions lead him. But with great timing—maybe luck, maybe insight—he sold his business to Hudson News in 1994—yes, the year that the Internet went commercial and the Netscape browser was released. Hudson News is the purveyor of print media and over priced gum at newsstands in many airports. According to the Globe, Cohen, now 77, wept when he was told that the kiosk would be closed.
Institutions need to sunset when they have outlived their usefulness. There is probably a majority of two or three generations of Harvard students who have walked through Harvard Square for four years and never stopped into Out of Town News or even thought much about it. I wonder what will be the media institutions that disappear for them to shed a tear over when they look back.
[Added March 30, 2009: Reports of the death of Out-of-Town News were a bit premature. See this brief update.]
Call me a pollyanna, but I’m hopeful. Hopeful that the Web may actually have been a force that’s raising the level of political discourse in America, making us smarter and better at understanding what’s going on. I’m hopeful because before the election I heard people talking, sometimes in Red states (the “real” America, not my beloved Manhattan’s Upper West Side) picking through divisive and unintelligent arguments being made by politicians and the political campaigns.
I do think the American public ultimately gets it right, but that often it’s frighteningly slow to do so (think how long it took for a majority to decide the Iraq war is horribly mismanaged). But I heard an intelligent skepticism from voters this time, examining arguments, asking whether the things being said in political ads were right, wondering whether one candidate’s policies are better for the economy. I also saw a lot of discussion and uptake throughout the Web shooting down personal attacks (William Ayers, Muslim terrorism, etc.). I note that the attempts to Swift Boat the now president elect didn't take hold.
It was a real, intelligent level of discourse that makes me happy to hear. Sure, the economy is in crisis, and the mainstream media is telling us what’s wrong in Iraq and elsewhere. But the more intricate unweaving is going on online, not only in blog discourse but in the ability, for example, of many people who wouldn’t have seen Palin or Biden or McCain or Obama speeches and interviews to see them, rewind, look at them at their leisure, to observe charts and graphs comparing policies and opinions, expert and not, to watch The Daily Show and Colbert Report at our leisure and decide what to or not to laugh about or examine further. To, crucially, watch the Katie Couric, Sarah Palin interview segments and compare them with the Tina Fey impressions. We didn’t have to rely on reports of what Palin said, but instead after hearing about it (perhaps in the mainstream) could go see it and decide for ourselves as never before.
Neil Postman might have thought we were prone to nothing but amusing ourselves to death with our media, but maybe the kind of media we have now (and that the new White House might help us employ) is helping us to think about whether we want change and what that change really means.
Finally, a term for what happens in the real MediaVerse: The Pinball Effect. That’s what Nielsen CMO John Burbank used to talk about the way online and TV interrelate to spur consumption of the other. His example: The Katie Couric-Sarah Palin intterview gets six million viewers. That’s cut into clips, each of which is viewed three million times. Viewership of Saturday Night LIve (with their parody of the interview) spikes to 9.5 million viewers and 25 million people watch the skits on the Web and THEN a record 70 million people on 11 TV networks watch the vice presidential debate. That, Burbank said at the Media and Money Conference that concluded today in New York is how audiences build over time due to the effect, on “word of mouth.”
Of course, that doesn’t mean anyone’s making money on it, a point Burbank also raised.
Oddly, though, he said there has been “little impact” of citizen journalism, no breakout viral video clips from a cellphone, despite the many opportunities of Joe Biden speaking many places every day. (I might counter that there’s a lot of influential blog and Twitter discussion, and that any Swift Boating might occur online, especially via email. Video is not the only place to look for influence. Not to mention Obama’s in-game ads.)
I heard Jeff Jarvis on the radio this week say he wanted someone to, in easy link-and-click fashion, explain what’s going on, what the current financial crisis is about. And I suppose he's right (while hoping he’s wrong) that that easy click and see doesn’t exist. (He did on his site say he likes this explanation.)
And, in so complaining, he put his finger on a major problem with journalism as it’s practiced. Amid all the tit-for-tat accusations, running around trying to dig up, follow the latest, get the scoops, journalists too often forget to explain to those who desperately want it what the story at its deepest levels is really about -- which also would serve to tell the reading/listening/viewing public why they should care. That kind of depth, of course, doesn’t get the quick pageviews, nor is it the kind of investigative journalism that tends to win Pulitzers and other prizes. In a business sense, it’s not the kind of journalism that will pay for the resources it takes create it. But it is a big public service that can accrue pageviews (on pages carrying ads) over time. And there are ways to “monetize” it beyond the pageview-ad formulation. (partnerships, re-branding, syndication, books, new sections ... that would be another blog post.)
Not that it’s easy to explain something like this crisis. A lot of people tasked with explaining what’s going on probably themselves don’t understand, and good journalists are trained not to let their grasp exceed their reach. Heck, some of the smartest professors I had in business school seem at a loss to completely explain what’s happening in the economy right now. (One wrote an email about the opposing views of who’s to blame, without answering a question I asked about whether models he taught us projecting increased value as debt is taken on were still valid, or formulations for calculating risk should be changed). And, the ones who can explain it all to us -- smart MBAs who do financial modeling -- are, after all, ones who helped get us into this, with the very financial models they created or followed. They’re likely to earn a lot more than the ink- and pixel-stained wretches working in newsrooms. Then, again, there’s a few of those folk who have a bit of free time at the moment. Maybe they could write a little something for the papers, even help come up with some graphics and videos to explain it all.
Even without the business justifications, though, the explanation would be worthwhile and a public service.
The current financial crisis only rubs salt into the wounds of the newspaper industry. Already hemorrhaging advertising linage and revenue (The Philadelphia Inquirer is reduced to putting car dealer display ads in the main news section where attractive full pages of department store ads used to be), a recession would further erode advertising. But now comes a credit and liquidity crunch that could affect newspapers companies carrying high debt loads, especially if the debt needs to be refinanced in the near term.
The “Heard on the Street” column of The Wall Street Journal last Friday noted that “Of the U.S. media companies whose debt is rated by Standard & Poor's ... 86% are speculative-grade, a higher percentage than any other industry.” Those companies planning to pay down debt through asset sales, such as The Tribune Co., may find that potential acquirers will have less access to financing. With $12 billion in debt, it was expected to pay some of that down through the sale of the Chicago Cubs. But that is not a done deal.
McClatchy Balance Statement
For example, McClatchy, the third largest newspaper publisher, is laden with debt from its 2006 acquisition of Knight Ridder. Its long term debt is still 10 times higher than pre-Knight Ridder even after using proceeds from sales of some newspapers to pay down debt. At the end of June, McClatchy had $1 billion in revolving and term bank notes loans as well as $50 million in public debt that will come due in 2009.
Its Long Term Debt to Equity is 5.8, up from 0.1 in 2005. And its stockholders equity is down 72% from its 2005 level. All this gives the owner of the Miami Herald and Raleigh News & Observer little wiggle room for raising additional capital. This crunch is reflected in its recent dividend announcement, cutting in half its dividend to conserve cash. That step is in addition to a 10% reduction in its workforce.
Holding higher relative amounts of debt is called “leverage” in the financial world. Used judiciously, leverage can help an enterprise grow without diluting the holdings of the owners. But when access to debt is too cheap and easy, it can also lead to making poor strategic decisions. And once laden with debt, it restricts further flexibility when, as now, credit comes with more strings and tighter knots.
With the decline in advertising and circulation, restrictive and more expensive credit may only accelerate the slide for some media companies.
Earlier, I saw the AP having trouble if a group of Ohio papers didn't use it. Now, Jay Rosen points us to to a Wired pickup that links to this story from the MinnPost about Minneapolis Star Tribune sending the AP the requisite two-year notice that it intends to cancel. This after five other papers did so. Now, this doesn't mean that the Strib will necessarily drop AP. Sending notice ahead of a deadline is a common tactic. In fact, some lawyers routinely send out cancellation notices as a matter of course, to they can cancel in the event they do actually wish to cancel. And, Rosen also notes, The Spokesman Review is challenging the two-year cancellation notice requirement.
Nevertheless, it has for decades been a "given" that a U.S. newspaper would take the AP as a core component or important supplement of its news coverage. The MinnPost writer, David Brauer, talks of the damage to the area's news gathering if the AP loses the Star Tribune's participation (and fees). But he also notes that papers could use that money to pay for more of their own reporting:
If AP gets less cash and copy from the Strib and cuts its local presence, Minnesota’s news ecosystem could take a big hit. The wire service’s copy fleshes out local papers big and small; a diminished AP weakens a key line of defense for cash-strapped newsrooms.
Then again, non-metro editors around the nation were among the first to give AP notice; most said they’d rather save the coin for their own staffers (even as their publishers were thinking cash flow)
A Newsweek editor once quipped in an editorial meeting that "if we have two examples, it's a trend, three, a cover story." Well, now we have at least a half-dozen.
If the major reason for the American daily newspaper industry's demise were its stories contained too many dangling participles, then the industry could more easily comprehend its situation than instead hearing that the reason was it had violated the Principle of Supply & Demand.
The understanding of economics, particularly media economics, has never been its strong suit, except if the topic is how many tons of newsprint to buy, how many points a major stock market dropped, or how cut expenses to match revenues. Most newspaper publishers, editors, or journalists tends to equate economics as solely the science of government financial policy, household spending, Wall Street speculation, and petroleum pricing. They don't understand or have forgotten that a major branch of it is the behavioral science of Microeconomics - the study of how individuals make decisions to allocate their time and activities.
The main paradigm of microeconomics is known as rational choice theory or rational action theory, which states that individuals choose the best action according to their preferences and what constraints of supply, demand, time, and access face them. In it now lays the demise of American daily newspapers as we know them.
How did the American daily newspaper industry violate the Principle of Supply & Demand by failing to adapt the industry's core product to a radical change in consumers' supply of news and information during the past 35 years? To understand how, both start and end at the roots of the newspaper industry.
Start in the European city of Strasbourg during 1605 when the world's first newspaper began publication. It used a technology developed there 164 years earlier by the metalworker Johannes Gutenberg, who had invented a device for producing innumerable copies of the same text. (Please keep that concept in mind, because it's now moldering the newspaper industry). The Supply & Demand equation for accessing daily changing information was then quite the opposite it is today: Consumers had little or no supply of daily news until the daily newspaper. So to produce newspapers, this adaption of Gutenberg's book printing technology spread quickly worldwide.
Some modern critics of newspapers say the industry is leaden and 'doesn't think outside the box.' They probably don't realize the historical irony that underlay their criticisms. The core of Gutenberg's technology was a box containing lead type whose impressions could print innumerable copies of the same thing. In that core is the inherent limitation that it produces the same edition for everyone. Although in the 19th Century steam and later electrical power speeded Gutenberg's technology and the introduction of offset lithography during the middle of the 20th Century eliminated its use of lead, the analog technology used to produce today's daily newspapers is still Gutenberg's. Indeed, today's analog printing technology still has the same limitation that it had in Gutenberg's days - it produces the same edition for everyone.
That technological limitation delineated the newspaper industry's editorial and advertising practices during the past four centuries. Because each edition had a finite number of pages and was printed by analog technology had to produce the same for everyone at once, newspaper editors had to select stories according to two criteria:
Ignorance isn't bliss to the dying. Witness the pathos of American daily newspaper companies. Most have finally begun to realize that the deterioration of their businesses isn't cyclical but grave. Yet few, if any, understand why. Almost all grasp for the reasons.
Some attribute their grave condition to advertisers suddenly switching huge portions of spending from print to online - an excuse that ignores more than 30 years of declines in those newspapers' printed editions' circulations and readerships. Some others attribute their deterioration to not having transplanted their content into online quickly enough -an excuse that ignores not only the dozen years they've spent transplanting it but how their online editions are now read even less frequently and less thoroughly than their printed editions.
Most of the print newspaper experts who diagnose these companies' condition still prescribe stale nostrums such as more consumer focus groups, subscription price incentives, more stylish typography, or shorter stories. Meanwhile, most of the experts who diagnose these companies' Web sites prescribe balms and accessories such as giving blogs to reporters, adding video, or having the readers themselves report the stories. American daily newspaper companies have long been too financially impatient to submit themselves to anything but ostensibly quick cures and they've even longer been too conceptually myopic to perceive the real reasons for their declines.
I'll declare the real reasons. There are but two and neither has anything to do with multimedia, 'convergence', blogs, 'Web 2.0', 'citizen journalism,' or any ancillary topics you may have heard presented at New Media conferences this millennium.
Nor is either of the real reasons advertisers' abandonment of printed newspapers. Their abandonment is a symptom, not the reason for the decline. Contrary to myopia of many newspaper executives, advertisers aren't newspapers' primary customers. Although advertising revenues may be sunshine for newspaper executives, the roots of their business are readers. A newspaper with readers will attract advertisers but a newspaper without readers will not. Readers ultimately support and sustain the newspaper business.
To understand the real reasons why the American daily newspaper industry is dying, first understand why more and more Americans are no longer reading daily papers and how their abandonment of newspapers has been wrought by changes in their own media economics. Also comprehend why the epicenter of the newspaper industry's problems in post-Industrial countries is America and exactly how grave the situation is there.
... That's what Google Trends says. Like I've said, sometimes when you're poking around for other work, you find curious stats. Like, today, if you search "NYTimes.com" in Google Trends, it shows that more visits come from California than New York.
Today was the first public edition of “The Sporting News Today.” This is a free, online daily version of The Sporting News, the weekly magazine that got its start as a bible for baseball fans.
The Sporting News has a rich history, starting publication in 1886. I remember my father subscribing in the 1960s. It was thick with box scores and stats for every team and every major sport. In 1977, when the Times Mirror Co bought the publisher for all of $18 million it had a circulation of about 356,000. By the time it was sold to Vulcan Ventures in 2000 for $100 million it had a circulation of over 500,000, but it was being threatened by the successful launch of ESPN Magazine, which had 850,00 circulation within two years of its 1998 launch.
The Sporting News was sold again in 2006, to American City Business Journals. Today the circulation is about 700,000, but at an annual price of only $14.97 for a new subscription—compared to about $61.00 in constant dollars in 1978.
Like many print publications, The Sporting News has been substantially affected by online content. Daily sports news has been particularly hard hit. The Internet is made for getting late night scores, accessing the scads of stats that even casual fans crave, following teams in far-off cities—and all for little or, most often, no consumer cost.
Like most other print publications, it has had an online presence. The Sporting News Today is something else though. It is a magazine formatted for the screen. But it is not like a Web site. It involves no scrolling. It is pdf-like, though it is not read with Adobe Reader. It is not the print edition read online, as with Zinio. To me each screen looked like a double page spread in a magazine—but with no need for a gutter. I sort of felt that I had spread opened the tabloid-sized magazine. You will note that each of the “double pages” has one page number.
By offering to send subscribers an email each day, readers so do not have to bookmark anything. Just click the link.
The content is vintage Sporting News: Right now heavy on baseball, but lots on football—professional and college. There is hockey, basketball, NASCAR, tennis. Even Little League World Series coverage is promised. And, with a nod to WEB 2.0, it will offer readers the opportunity to provide their own input: “You’ll get a byline, file to an editor.” (Actually, a clever spin on “Letters to the Editor.”)
No surprise, the business model for the Sporting News Today is, for the moment at least, advertising, though it was rather light for a first edition. The inaugural issue had a full page from SpeedTV.com, three half page house ads for Sporting News affiliates and a full page promotion for the revamped Sporting News magazine, which will become a bi-weekly. (Management expects to lose 100,000 circulation from current levels to the free online publication).
I’m not a design expert—I’ll leave that to my colleagues at Innovation Media Consulting Group. But the Sporting News Today will feel comfortable to readers who like the look of print and are put off by clicking here and there for do their online reading. The layout feels modern but grounded in print. How that plays may be generational—or not.
As a final note, it may be worth pointing out that while traditional print publications are downsizing, The Sporting News Today is hiring. Indeed, I got turned on to its impending launch by Charles Apple, it’s new art director, who was hired away from the Virginia Pilot newspaper. (Has anyone seen numbers on how many print journalists have been hired by online-only ventures other than self-funded blogs?)
There has been speculation in recent years on when we will get the first announcement that a daily newspaper will shut down its presses completely and switch to digital-only. There are still some big hurdles, like portability. But should services such as Amazon’s Kindle take off, allowing readers to take their digital publications on the go, then the Sporting News Today model may have legs and encourage a general interest newspaper to give it a whirl.