Saved by the net?

Only a few short months ago The LA Times was one of the newspapers on the short list of those expected to fail in the next year or so. Today, according to a report on Buzzmachine, it’s web revenue covers the entire editorial payroll.

Russ Stanton, editor of the LA Times, sent [an] email following up on questions I had confirming the much-discussed report below that its web revenue is now sufficient to meet its entire editorial payroll, Jarvis wrote today. “Given where we were five years ago,” he emailed, “I don’t think anyone thought that would ever happen. But that day is here.”

This transition hasn’t been painless. The Times has drastically reduced staff over the last few years. Likewise, meeting editorial payroll isn’t the end of the story (last I checked newspapers still need other departments, like advertising and IT). But it does hold out hope.

Any parts applicable to The Star-Ledger?

• The Times needed bankruptcy for this to work ($12 billion in debt made breaking even impossible for all Tribune papers). Reportedly, Newhouse isn’t carrying much debt, making The Ledger (theoretically) closer to the point where the economics would work.

• They fully committed to online and brought in the talent to help that flourish.

We have added some outstanding web talent over the past two years, including latimes.com editor Meredith Artley, blogging guru Tony Pierce and database specialist Ben Welsh, who is part of a new 10-person team of interactive and data experts supplementing our print report with terrific online material (more on that in a minute), according to Standton. And our printside reporting and editing staffs have embraced the future like never before.

• A training program for staff to help them embrace the future properly.

• Cooperation with the advertising staff to make the online enterprise a paying proposition.

• And finally, as one commenter on the original Buzz item suggests — BOLD LEADERSHIP.

Dave Martin wrote: Interesting post. The issue is larger than you suggest. Dr Gary Hamel proffered a profound thesis that seems applicable here, to wit: “What ultimately constrains the performance of your organization is not its operating model, nor its business model, but its management model.” Tribune and others in the dead tree trade have a leadership problem. Your “do your best link to the rest” and “reverse syndication” concepts are certainly interesting and they do merit consideration, however, both will require bold leadership.

Tags: futureof journalism, online revenue, advertising

Some good news for newspapers

No newspapers will declare bankruptcy in 2009. That’s just one prediction from Martin Langeveld of the News After Newspapers blog.

He has quite a few other predictions for 2009, including that the advertising decline now being experienced by newspapers will slow while their online ad sales perk up, circulation figures will stabilize and that many other papers will successfully follow the Detroit example of reducing the frequency of publication. He even expects that many hyper-local start-ups will expand from online only to print.

One provocative prediction was the partnering of Craigslist and (potentially) Ebay with newspapers as a way to drive readers to newspaper web sites.

Of course it isn’t all rosy. He expects that some major newspaper players will merge (Media News with Hearst is his top candidate) and that at least 25 newspapers will close outright.

All this might merely be of academic interest if the employment fate of thousands wasn’t hanging in the balance.

Tags: futureof newspapers

The (Part of) Oregonian

Last week our sister paper on the west coast, The Oregonian, sent letters to subscribers in the second largest metro area of its state, Eugene. Those letters announced the cessation of daily distribution of the newspaper there.

Does this mean some Newhouse franchises will soon start attempting a Detroit Experiment? Does such a pull-back make economic sense? What do readers think?

On the first, we must wait and see. On the second, some news analysts have noted that since more than half of newspaper revenues typically come from their Sunday paper (which The Oregonian will continue to deliver to  the Eugene environs) such gambits could actually make a significant dent in costs without severely affecting income.

Reader opinion on the subject is not quite so positive. Here is what subscriber Betsy Boyd of Eugene had to say about it on her OregonLive blog.

Highlight:

The Oregonian has always tried to be a big vision newspaper, bold enough to claim the state’s name. How does The Oregonian survive this period of news format disequilibrium if it gives up on Oregon’s next largest metropolitan area after Portland? Does a name change come next?

The news hit me first like an unexpected loss in the night. But when the morning came (along with my newspapers), it felt more like a dear yet provoking and distinguished member of the community had just made an incomprehensible mistake, too strange and disastrous to overlook. The neighbors are talking. Some are angry. Everyone is aghast.

The lone comment is that The Oregonian wouldn’t be doing this unless it made good business sense. Whether that is true is just another thing on which we will have to wait and see.

Tags: futureof newspapers

Where the Jboy been?

I haven’t posted in awhile. Besides taking some time to pursue other projects — gotta eat after all — I decided to give Ledger management the time they requested to get done what they felt needed to be done. I didn’t want to be faulted for spilling beans, revealing secrets or simply whining while they tried to prepare for the future.

Wednesday a large number of those who have taken the buyout will depart. Some departments — biz for example — already need to put on a few pounds to reach skeleton status, yet they are about to lose more.

Rumor has it that we are also about to be graced with our marching orders for the new year. That and some recent newspaper-industry news made the time seem right to have another say.

Abandon ship?

Over the weekend Star-Ledger part-timer Lee Roberts stirred a little ruckus when he passed on an assessment regarding the future of the newspaper industry. The issue wasn’t so much what Lee brought to everyone’s attention, rather it was how he did it. The editorial-all email he dispatched had as subject line: “You should have taken the buyout.”

One responder faulted him for being negative and another for not being sensitive to others. Both seemed to believe that the news from the bond-rating firm Fitch Ratings wasn’t surprising. “I think we’re all very aware of what’s going on in our industry,” was one quote.

Just to make sure we are all aware of what is going in our industry, here is the highlight from that Dec. 3, 2008 rating report: “Fitch believes more newspapers and newspaper groups will default, be shut down and be liquidated in 2009 and several cities could go without a daily print newspaper by 2010.”

Fitch also listed the debt rating for two newspaper groups — McClatchy and Tribune — at junk status because of the likelihood of default. Less than a week after that assessment Tribune company filed for bankruptcy. McClatchy renegotiated it’s billion-plus dollar debt load earlier this year but still may not be able to maintain payments.

However, what is striking these two chains is neither unique or isolated. What’s more, it significantly pre-dated the economic collapse of September. Even before Sam Zell finalized the deal for Tribune, less than a year ago, questions were being raised as to whether the company could service the $13 billion debt (required to finance the purchase) given a steepening decline of advertising revenue and circulation.

But more to the point, what does any of this have to do with us at The Ledger.

First the good news:

• The paper is privately held; there are no shareholders demanding an increase in the value of their stock. (There may, however, be some Newhouse family members concerned about the size of their dividends.)
• While little is known about the Newhouse empire (it’s privately held, so doesn’t have to file annual info with the SEC) it is assumed it carries little debt load.
• The Newhouse family has never demanded the level of profit that has led companies like Gannett and Tribune to gut entire newspapers. Even if you don’t believe what has been said about the financial situation at The Ledger, it seems clear that for some time it has not approached the margins considered SOP by other newspaper companies.

What’s the bad news?

• The relationship between the newspaper and its online entity would have to improve to become dysfunctional. At the moment one could argue they aren’t even working toward the same goals.
• Other than survival it isn’t clear what goals there are for the newspaper or the internet entity. No long-term plan has been mentioned (expectations of a return to profitability are not a plan, they may not even be a realistic goal in this economic climate) and no interim steps have been provided that would guide toward those uncertain goals.
• As the newspaper advertising market continues to collapse The Ledger and NJ.com still lack the infrastructure to efficiently sell ads online or locally should any interested buyers be found. Worse than not recruiting new advertisers, the newspaper and NJ.com may have to turn them away.
• Speaking of NJ.com, Nielsen online reports continue to indicate slippage both in numbers of unique visitors and time of visit. From Oct. ’07 to Oct. ’08, the average time spent per person at our web site fell from nearly 12 minutes to less than 3. Only two of the other top-30 news sites reported such a precipitous decline. Some (NY Times, Houston Chronicle, Politico, Village Voice) reported major gains. Rumors of changes at Advance Internet continue to be just rumors. Given the Soviet-era mindset in Jersey City, changes to address such obvious failings could begin in 2013.
• Editorial management at the newspaper hasn’t finished planning for the future even though it is already here. Meetings continue about how the editorial department will function as departure-day for the last of the buyout-ees looms.
• Instead of using the smaller staff to focus on largest audiences or the newspaper’s core strengths, editorial leaders seem intent on trying to keep the newspaper just as it is (with maybe fewer pages and a couple of cosmetic changes). Rather than reorganize, the newspaper seems to have simply reduced staff.

Does that mean The Ledger is doomed and we should all have jumped ship? No.

Many people love newspapers. Lots think they are necessary (they supply a significant portion of the internet’s best content and may be critical to a functioning democracy). What’s more, privately owned newspapers (like The Ledger) seem a better bet for the future. Publicly held newspapers are much more interested in profit than journalism and much less likely to even want to survive if massive profits are gone forever.

But, if you will pardon my extension of a metaphor, The Ledger is leaking badly and listing to stern. The hand on the helm seems far from certain how to navigate through a screaming gale that is about to become a class 5 hurricane. The time for rearranging deck chairs and waiting to see which way the wind blows is long past. All that may be left is to batten hatches and pump for your lives.

Besides, the lifeboats are already away.

Tags: newspaperfuture, buyouts, bankruptcy, advertising outlook

The List

When I saw the list, I couldn’t help but wish that Rob Gebeloff’s name was on there.

Sure, Gebeloff absconded for points east long before the buyout, so he didn’t even get to enjoy the wait with us and certainly wouldn’t be among the 160 or so names listed as those remaining at The Ledger now that all the recent fun is done.

Why would it be good to still have him around? Because he would have databased all the folks — those who are staying and those who soon will be gone — by age, salary, marital status and whether their children are nearing college age. He would have mined our personal info and then rendered it as digital three dimensional computerized graphics that would have told us lots about how the recent events have changed the workforce in the newsroom and newspaper.

He would have compared median age before and after the buyout, telling us whether that figure went up or down. He would have compared the average pay, how many children they have per capita, household expenses and many other data points I’m not even considering.

Perhaps it could have factored in economic and market trends, provided some quotient for hope or fear that might give insight into why some let go and others still hang on.

What would it tell us? What kind of portrait would it paint of those who left and those who stayed? Maybe we don’t really want to know.

But I can’t help but wonder when I see a list rendered in such spare, unevocative terms. The journalist in me demands context, analysis, some deeper meaning. Is it a roll call of the fortunate or the damned? Should those on it be given congratulations or commiserations?

And why have all those departing been acknowledged only by their absence from this list?

Tags: list, data-mining, computerized graphics, future of The Star-Ledger

In Preperation for Wednesday’s meeting — Pt. 2

At a 4 p.m. meeting  today (Wednesday, Oct. 29, 2008) Jim Willse will give those in the editorial department a “first cut at how we’ll be planning for transition” from the old to the new Star-Ledger and then allow “discussion of same.”

Rather than wait, I would like to toss out some ideas that might be good to consider as The Star-Ledger moves into this period of planning for transition to an editorial department and newspaper that has cut staffing by more than 40 percent and may soon be experiencing revenue and circulation reductions of near 20 percent.

To be clear, though, these thoughts aren’t necessarily mine (though I am in agreement with them). Most come from some of our own editors and others with whom they recently met to discuss ways to help revive or preserve journalism in the digital age.

A few days ago Jim Willse and John Hassell (who departs today for a position at Advance Internet) participated in the New Business Models for News Summit at the CUNY Graduate School of Journalism. Find a full list of participants here.

The event was called to bring together “a diverse group of editorial and business executives, entrepreneurs, and academics” for presentations and discussions on how to develop new business models for the news industry. Willse acted as leader for a discussion on News Organizations while Hassell served as rapporteur for the Newsroom Efficiencies group.

The most radical thoughts came from Hassell’s group. Charged with finding new newsroom efficiencies they came up with a few things our newspaper might want to discontinue. Among them: staff coverage of national sports, national entertainment and national/international news. They also recommended dropping the editorial page.

Summit moderator Jeff Jarvis often puts it this way: Focus on what you do best and link to the rest. I would simply say that if we can’t do it better than everyone else (e.g. ESPN, Rotten Tomatoes and The WaPost/NY Times, respectively), we shouldn’t do it with our dwindling staff.

Hassell’s group “decided to focus on a market like Philadelphia or Dallas and, rather than tweaking the existing daily newspaper model, to start fresh with an online-only news organization.”

They imagined a staff of 35 consisting of:
-Content creators who do blogging/photography/video/curation of beats: 20
-Community managers who do outreach, mediation, social media evangelism: 3
-Programmers/developers: 2
-Designers/graphics artists: 2
-Producers who do site management, etc.: 5
-Editors: 3

Staff levels were a product of revenue calculations: “A website with 800 million page views/year at $5 rpm, [would generate] total revenue of $4 million. We set aside $2.1 million of that revenue to pay an editorial staff of 35 FTEs $60,000/year.”

While such a staff seems ridiculously small for an operation such as The Star-Ledger, which attempts to cover the entire state of New Jersey, it does offer an interesting concept for our organization.

What if The Ledger / NJ.com formed a number of such groups (some even smaller than this model) that are tightly focused on specific coverage where there is a sure audience and at least the opportunity for making a clear advertising connection? Examples would be high school and college sports with built-in alumni audiences and/or geographic locales; state government; and local communities.

Each would have independent web sites (i.e. not part of a confusing, monolithic structure that attempts to aggregate everything about everything — not that there is anything wrong with that) and print products that are direct reverse publishing of the content (generated by professional and citizen journalists, as well as commenters). The reverse published print products could be inserted into the more traditional newspapers or sold as stand-alone periodicals in order to tap whatever revenue remains for news on paper advertising.

Perhaps we could experiment with an idea like this in Trenton given that the recent buyouts have almost completely eliminated the editorial staff at The Times.

In Willse’s group, his announcement of the staff cuts at our newspaper led to a questions about advertising, production costs and why “newspapers [are] firing journalists to deal with losses from the industrial side, when it is content that … is ultimately valuable, content that is the future, and printing presses are what is leading to lost [sic].”

Group participant Bob Garfield from On The Media, put it this way: “What the hell are we doing laying off the journalists when we should be laying off the presses?”

Group members were asked if newspapers could survive in a web-only world and the consensus was that remains impossible — at least for publicly held newspapers. However, they also agreed that newspapers are letting revenue opportunities slip away.

What those opportunities are is not mentioned specifically in the recap. But there are many that have not been grasped at The Star-Ledger / NJ.com due largely to a one-dimensional and confusing web presence that appears to lack an effective advertising sales strategy.

One revenue idea was out-sourced ad sales. That concept may be a necessity for hyper-local sales, but the lower costs will be offset by a smaller split of revenue for the news organization.

Another was public support via direct contributions. The model sounds almost like creating an E-bay for projects where story ideas will need a minimum audience bid before they can be pursued. While interesting and potentially useful in a number of ways (e.g. direct response to audience desires, a method for gaining audience participation even at the story-concept stage), this is a pretty scary way to cover news.

Ultimately, the groups didn’t come to many conclusions on almost anything. In fact, much of it isn’t even new. Some concepts close to these were floated about three years ago during the re-envisioning The Ledger meetings.

The real issue isn’t ideas. There are smart people at The Ledger who have spent a lot of time considering new and different ways the paper could do business in the future (of course, many of them have left or will be leaving in the next couple of months).

The question isn’t really whether there is material for The Star-Ledger to begin planning for an inevitable transition. Discussions have been ongoing for years and the staff-reduction process began three months ago.

The bottom line is whether anything different will be done. Will transition mean real change or trying to continue business as usual on both the print and internet side with far less people? Maybe we can start the discussion there.

Tags: Business Sumit, What’s Next, future of journalism, revenue

AP on notice

According to Editor & Publisher, The Star-Ledger is one of several daily newspapers discussing the formation of content-sharing consortium that could provide them with state or regional feeds in place of those provided by The Associated Press.

The story says:

A “Northeast Consortium” of newspapers, which will include New York’s Daily News … Newsday, The Buffalo News, the Times-Union of Albany, N.Y., and the Star Ledger of Newark, N.J. is weeks away from announcing a content-sharing arrangement that will include both stories and photos.
—
One executive who spoke on condition of anonymity and who attended the “summit” of New York-area papers, held in Manhattan within the past two weeks, cited cost savings, more timely exchange of content, and what that executive called “a new spirit of cooperation” as the primary motivations for such an undertaking. This source referred to the “Draconian terms” of the AP, which last Thursday responded to newspapers’ concerns by announcing further rate cuts and restructuring.

I’m not privy to our AP fees, but The Columbus Dispatch, with daily circulation more than 100,000 lower than The Star-Ledger, pays $800,000 a year, according to E&P.

But this isn’t just about money, according to the story’s source.

“It’s fair to say that newspapers across America are upset with the treatment they get from the AP,” the executive said. “Newspapers are now taking the view that they want to take events into their own hands. The truth of it is, there is a real desire to get better content, shared among people in non-competitive markets.”

AP is responding to the rising tide of dissatisfaction by freezing or lowering fees and discontinuing its tier structure for distribution of text.

The Cleveland Plain Dealer is apparently already part of such a group made up of Ohio newspapers.

Tags: futureof journalism

In Preperation for Wednesday’s meeting — Pt. 1

As in the ongoing U.S. presidential campaign, change is the topic for the staff meeting has been called in the newsroom for 4 p.m. Wednesday.

The question isn’t simply what will be discussed, but also whether that change will be significant enough to keep The Star-Ledger going.

The announcement says the short gathering will be to hear a “first cut at how we’ll be planning for transition” and then “discussion of same.”

I might wish for something a bit more concrete. The buyout process began about three months ago and the first wave of the orchestrated exits is that same day. It seems a little late to be discussing the process for how we will be planning.

Still, since we’re just getting started, I have some thoughts about what I would like to hear at the meeting and see occur.

I’m hoping this first cut won’t deal primarily with a shuffling of offices and consolidation of production responsibilities. I’m hoping it won’t be a hollow more-with-less pep talk. I really don’t want to hear we’re going to make it up as we go along.

I’m hoping that there is (or will be) a real plan and that it indicates the newspaper, maybe the entire Newhouse group, is ready to make the difficult choices required to keep going. Cutting staff by nearly 50 percent has been extremely painful; an operation performed with a meat cleaver. But it will be even worse if the patient, now a double-amputee, remains on permanent life-support or dies.

Beyond the newsroom I’m hoping that there will be changes that fix the dysfunctionalities in advertising between online and print that the publisher has mentioned in his monthly meetings with staff. I’m hoping that there will be sweeping changes in how things are done at Advance Internet that will provide for a coherent, cooperative and modern web strategy that fully leverages the creativity, insight and abilities of those working for Newhouse even if they don’t happen to be at an internet property. I’m hoping that there will be changes in how all of the New Jersey newspapers — maybe all the Newhouse papers — work together and share content.

I know, I’m hoping for a lot. Heck, all of that isn’t where I’d stop, it’s just a start. And maybe it doesn’t really matter to those of us who have been lopped off. But if The Ledger can’t change now, then it won’t change. And that would be a shame.

Tags: futureof journalism, planning,

Surprise: Times gets new publisher

Richard Bilotti, longtime publisher of The Times of Trenton, announced Thursday he will retire in November.

The departure of Bilotti, who spent almost 25 years at the newspaper’s helm, is hardly unexpected. Most of the staff, including almost everyone in the editorial department, has been granted a buyout that will see them leaving by the end of this year.

What came as a bit of a curveball was the promotion of Brian Malone to replace Bilotti.

It isn’t just that Malone may not have a staff. Based on statements made by The Star-Ledger’s publisher, the plans for the Times involve it becoming essentially a re-masted version of The Ledger with a hyper-local online presence.

However, as with so many other things these days, plans seem to change on an almost daily basis. Likewise there often seems a lot of leeway between what is said and what actually occurs.

Regardless, Malone will need more than congratulations in his new post. But we offer it anyway.

Tags: trentontimes, publisher, promotion