Gannett's Hyperlocal-Sports Play

Gannett is among the many newspaper groups that are broadening their online strategies in search of more online visitors and therefore more advertising as readership and advertising of the print product continues to decline. A popular tack among papers is to go "hyperlocal" online, and Gannett is adding high school sports to its coverage. The company owns HighSchoolSports.net, and will distribute its stories into 100 separate sites that aim of attract people (and advertisers) in particular areas where Gannett owns community papers. The sites will stand alone but will also be linked to the community papers, given them more online material for readers and advertisers. Gannett hopes to reach about 9.4 million people with this hyperlocal play.

From: "Gannett Goes Hyperlocal WIth HighSchoolSports.Net," PaidContent.org, August 18, 2010.

Seattle Newspaper at a Major Turning Point

One thing is clear: at the end of the sale process, we do not see ourselves publishing in print.

- Steven Swartz, president of the Hearst Corp.‘s newspaper division

In David Kaplan, "Hearst Says Seattle P-I Will Either Be Sold, Close Or Go Web-Only," PaidContent.Org, January 9, 2009

Reflecting the increasingly dismal situation of the U.S. newspaper industry, Hearst Corporation has decided that it can no longer support the Seattle Post Intelligencer, the weaker of two dailies in the city. Steven Swartz said the paper’s losses have been escalating steadily for the past nine years. The paper was founded in 1863. "Publicly, Hearst sees three possibilities for the Seattle P-I, which is one of only two of the city’s daily papers: it will either be sold, turned into a web-only publication or shuttered." Hearst is giving itself thirty days to find a buyer, and then will turn to the other options.

Hearst owns 15 other papers around the US, including the San Francisco Chronicle. It and other newspaper firms are facing the twin problems of lower print circulations, difficulty of making the lost print money from online growth, and the current recession.

Questioning the AP's Future

Right now, the biggest thing you're fighting is the overall sense of impending doom.

- Bernie Lunzer, president of the Newspaper Guild

In Erik Sass, "Ripple Effect: Newspaper Cuts Hit AP, Newspaper Guild," Mediapost Daily News, November 23, 2008

Newspapers around the United States are suffering from the convergence of a secular trend and cyclical phenomenon. The secular (longterm) trend is the decline in readership of print papers over the decades and the rise of the web for estwhile newspaper specialities such as classified, auto, and movie advertising. Although the growth of advertising on newspaper websites has been strong, the revenues lost by print editions to the have not been anything near those gained. The "cyclical" phenomenon is the current fiscal crisis which has led to a business recession and so a further decline in the revenues papers bring in from their printed editions. Important newspapers such as the Chicago Tribune lie at the edge of bankrupcy, and hundreds of their workers have been let go.

"The Newspaper Guild said it has seen membership rolls shrink by about 2,000 over the last year, reflecting the sweeping push by newspaper publishers to reduce their workforces through buyouts, attrition, and layoffs over the last couple of years. That equals about $200,000 of membership dues." This "collapse" of the newspaper industry is also affecting the Associated Press and the Newspaper Guild, which are both highly dependent on the health of the industry . Beyond the AP’s high cost in the terrible newspaper economy, part of the problem newspapers have with the AP is that because readers can read its stories throughout the web, papers no longer really have a monopoly of AP news in their areas. Because of that and the AP’s supposed increased concentration on feature stories have convinced publishers it doesn’t pay to keep it.

Newspapers' bad relations with the AP might end before they give up their connections. Papers must give two years' notice, and the AP could still convince them to stay. But the fact that newspapers did give notice is one example of the broad changes coursing through the news industry.

Advice for Reconstructing the American Big-City Newspaper

Reconstructing the American metro newspaper won't be easy, pretty or painless, but the alternative is far, far worse.

- Dave Morgan, blogger partner in The Tennis Company, which owns TENNIS.com, and TENNIS and SMASH Magazines

In Dave Morgan, "Reconstructing The American Metro Newspaper," Media Daily News, October 2, 2008

Morgan, a serial web entrepreneur (he founded Tacoda and Real 24/7) who also worked in the newspaper industry, suggests that the "big city" American newspaper firm must confront its precarious situation in the new media environment and take drastic steps to keep its product viable. Here are some of his main points:

* "Newspaper companies and their management teams have to recognize that their problems -- falling circulation and readership, plummeting ad revenues, disappearing classifieds, and exploding fixed cost structures that won't go away -- are secular, not cyclical."

* Newspapers have enjoyed monopolies in their areas for decades that have allowed them to control production (including owning the printing machines and sometimes the trees for paper) and distribution (including the trucks). Such vertical integration no longer makes sense. "Their survival requires that they ... give up control over a number of parts of their businesses and underlying capital structures." They should, for example, contract out printing activities.

* Produce printed newspapers with fewer pages, more local news, and news that is targeted to those receiving it. "General news products won't be delivered every day, but will avoid days when there is little ad support, like Mondays and Tuesdays."

* With far fewer resources than they had in the past, newspapers should fundamentally change the nature and size of the newsroom. Focus on "a few critical areas of reporting like local news, government and community events, and put the vast majority of their focus on providing and promoting a platform for their readers to report and comment about the issues they care about."

* Local papers should not be covering national and international news but focusing on their areas. This tack opens the door to partnerships with national newspapers such as The New York Times "A national newspaper like The New York Times needs much more print circulation and readership, or it will never reach the critical mass that advertisers require to really make a long-term go of it with their print product."

Some newspapers are already pursuing a few of these approaches. If all of them are followed, it certainly augurs a transformed newspaper industry some decades from now.

Is the Google News Glitch a Mark of Mistakes to Come?

Anytime anyone spreads false information about a public company over a communication medium like the internet, its message boards, chat rooms or otherwise, that will raise questions as to whether someone is committing securities fraud.

- John Reed Stark, head of the US Security and Exchange Commission's office of internet enforcement

In Joanna Chung and Justin Bear, "SEC Probes United's Sudden Slump," Financial Times, September 12, 2008

The web's power over people's understanding of reality became quite vivid on news on September 8, 2008, when United Airlines stock lost more than 75% of its value because a 2002 article about its bankruptsy filing that had been published that year the South Florida Sun-Sentinel (owned by the Tribune Company) mistakenly appeared on Google News. The appearance led readers on the site to believe it was happening that day, and they responded by selling the stock. A few days later, US security regulators opened an informal investigation of how that happened.

It seems that the glitch began when on early Sunday morning a single visitor to the Sentinel website viewed the 2002 story reporting on United's bankruptcy filing. That visit was enough to have the old article land on the Sun-Sentinel's most-viewed list at that hour. "Google said its web-trawling program spotted the link and indexed it as a new story when it could not find a 2002 dateline. Tribune has said it would have been obvious to a reader that the article was six years old."

Each company, in other words, says that the mistake was the other's fault. United, in the meantime, is considering filing a lawsuit against both. The lurking question: Will--or when will--this sort of agenda-setting mistake happen again on Google News or elsewhere on the web, and with what consequences?

The Social Dangers of Declining Newspaper Support

With no end of the cyclical woes in sight, at the end of this downturn, who will be left to investigate those who seek to govern?

- Michael B. Nathanson, senior analyst for Bernstein Research

In Michael B. Nathanson, "Weekend Media Blast: So Attention Must Be Paid," Bernstein Research, August 22, 2008

In a recent privately circulated report (therefore no link), respected Bernstein Research analyst Michael B. Nathanson concisely lays out key secular and cyclical trends that are affecting the system, a kind of perfect storm of problems that in his view bode particularly bad news for newspapers and radio. He worries about the newspaper “carnage” both in terms of the impact on employee lives and for its long-term implications for a free press. Two key paragraphs:

…The reasons behind this demise are fairly well-established
and we have called them the 3 Ds – Dollars, Devices,
Digital. This is shorthand for the negative structural factors
facing the content-creative industries, from the growth of
online advertising, which is eating share of traditional
advertising, to the emergence of negative technology trends,
like DVRs and satellite radio that continue to fragment the
consumer while fostering advertising avoidance. While the
trends are certainly not new, the cyclical pressures of a
softening economy are now just emerging in national
advertising.

…As we watch this carnage, that phrase "attention must be
paid" is reverberating in our heads. For starters, faced with
steeply falling demand, industries are massively cutting back
staff. According to Bloomberg, Gannett is cutting 1,000 jobs
in their community newspapers, McClatchy is eliminating
1,400 jobs (10% of total staff), Tribune is eliminating 235
jobs at the Los Angeles Times and 80 more at the Chicago
Tribune and A.H. Belo is firing 500 staffers. Of course,
there is also sadness on a personal level as affected families
struggle with the loss of income. There also should be
broader concern that a critical piece of our democracy – a
free public press – is in such a tattered state. With no end of
the cyclical woes in sight, at the end of this downturn, who
will be left to investigate those who seek to govern?

What Nathanson's trends fundamentally reflect is the power of media-buying firms to define audience trends and where media money should go. When they and their advertisers act based on their understanding of the media economy, the decisions affect the life and death of magazines, newspapers, and other outlets. Wall Street investors also play a big role in shaping a sense of what is taking place in the media world. A recent Variety article traces the reasons behind News Corporation's stock decline. Much of has to do with Murdoch's purchase of Dow Jones and Wall Street's belief that involvement with newspapers is throwing good money after bad. Supporters of Murdoch buy his belief that Dow Jones can serve as a news-and-information engine across media platforms.

Research Group: News Firms Need to Counter Young-Adult "News Fatigue"

[P] eople were conditioned to respond to headlines and updates as presenting whole news stories, when in reality they do not. We observed consumers click and re-click news updates and headlines and continue to do so, seemingly regardless of the outcome.

- Context-Based Research Group

In Associated Press and Context-Based Research Group, "A New Model for News Studying the Deep Structure of Young-Adult News Consumption," Associated Press, June 2008.

The Context-Based Research Group, an applied-anthopology company, interviewed and observed 18 young adults in the US, UK, and India regarding their news habits. One conclusion was that these people continually confront news while they are multitasking--accessing email while watching television and talking with friends, for example. Yet rather than digging deeply into stories as they click or watch, they seem to be seeing the same stories only at the surface levels. The young adults developed what the researchers call news fatigue. "Many consumers in the study were so overwhelmed and inundated by news that they just did not know what to do. Participants with news fatigue would try to ascertain whole news stories, but they regularly and repeatedly were left unsatisfied. . . . The more overwhelmed or unsatisfied they were, the
less effort they were willing to put in."

The researchers noted that programs such as The Daily Show and Howard Stern Show helped to put more structure and depth on news for the Americans in the sample than they would normally get. To the anthropologists, this and other findings suggest that young adults do want news with some depth. The researchers suggest that news firms such as the Associated Press need to create appealing content that presents not just facts and updates to a story, but also the story behind the story (the back story) and the implications (future story). Moreover, the news organizations need to "deliver it across all the channels these consumers use." But the researchers see the challenge: "[E]ven if you create news people can use, how do you reach consumers who spurn established packaging and consume information in haphazard, nonlinear fashion?"

Here, say the anthropologists, is where the news professionals must enter the discussion: "Anthropologists cannot answer that more difficult question for the news industry, but the value
proposition is clear for both producers and consumers: Young people are tired of the same old news and want something better. They just need some help."

Debating the AP's Role in the Digital Age

I talked to a reporter this week about the embattled Associated Press and said three times that I didn’t want it to die. I might take that back.

-Jeff Jarvis, Journalism professor and BuzzMachine blogger

In Jeff Jarvis, "FU AP," BuzzMachine, June 12, 2006

In a bad economy and losing print readership and advertisers to the web, many revenue-challenged newspapers are unhappy about spending large amounts of money for membership in the Associated Press, the legendary non-profit news gathering and distribution service. Some, like a group of Ohio papers, are starting regional consortia to share news and sports. In this difficult environment, AP executives have become exasperated that blogger websites are excerpting its stories without payments. The company has gone after websites it believes are violating the Digital Millenium Copyright Act (DMCA) by reproducing portions of its stories that go beyond "fair use." Most recently, the AP filed a DMCA take-down notice against The Drudge Retort blog on the belief that Retort's use of AP material doesn't fit the definition of fair use.

Jeff Jarvis argues that "the AP is flouting fair use and fair comment. It is ignoring the essential structure of the link architecture of the web. It is declaring war on blogs and commenters." Moreover, argues Jarvis (as he has for a while), the Associated Press has been no real friend of original journalism from even its member news organizations. Its own stories often rewrite pieces by member newspapers without giving credit to the source of the journalism and without linking to the original source. The real problem, Jarvis states, is that "the AP is hurting original reporting by not crediting and linking to the journalism at its source. We should be operating under an ethic of the link to original reporting; this is an ethic that the AP systematically violates."

Clearly, this is a major issue in journalism that started before the web but has been foregrounded because the impact of the economy, the move to the internet, and the possibilities of the hyperlink. All have put local newspapers and their journalists under a lot of pressure. Jarvis is trying to find ways to use the hyperlink to help local and regional news survive.

New Tribune Editorial Policy May Have Grave Consequences

People are reading newspapers less, and that will increase, especially if there's not as much there.

-Ken Doctor, a newspaper analyst with Outsell, Inc.

In Erik Sass, "Paper Cuts: Tribune to Slash Edit, Employees," Mediapost's MediaDaily News, June 9, 2008

Doctor was specifically commenting on a decision by Sam Zell, owner of The Tribune Company, to cut editorial content at all its newspapers so that at least half of each edition is advertising. Among the papers involved are the Chicago Tribune, Los Angeles Times, Baltimore Sun and Orlando Sentinel. Currently, the editorial split seems to hover around 63% editorial and 37% advertising. The downsizing of the papers--or "right-sizing" as a Tribune executive calls it--will allow the company to lay off still more employees. As Erik Sass notes, citing Ken Doctor, "the Tribune Company's approach runs opposite to the tack of other publishers like Dow Jones, which are trying to maximize the amount of content distributed via digital channels--in part by retaining print reporters and repurposing their work, or adding to their workload."