Tuesday, January 10, 2006

NEWSPAPER FUTURES: Trying to stay relevant after losing monopoly?

A feature writer for the Long Island, N.Y., daily Newsday has written a thorough overview of the economic challengesfacing newspapers, concluding that the way is clear for entrepreneurs to invent new ways to deliver new forms ofjournalism.

ORIGINAL URL:http://www.newsday.com/features/printedition/ny-etnews4581130jan09,0,31290.story

PUBLISHED: January 9, 2006
HEADLINE: Journalism's paper tigers?
A decade into the Internet age, newspapers try to stay relevant after losing a monopoly

If you are reading these words on a sheaf of brittle sheets, with the ink seeping into your fingerprints, you are participating in an antique ritual that may be heading toward its final act. If you have arrived at this story by following a blogger's link, or a friend has e-mailed it to you, then you are helping to reshape the idea of what a newspaper should be.

The daily press is becoming antiquated. Millions of adults still stretch broadsheet folios over the breakfast table, just as their great-grandparents did. But for their children, headlines blink across the screen, updating every few minutes. For them, the notion that an account of the day's events cannot be read until it has been packaged, printed and hauled through the dawn by truck is almost medieval. Deadlines can sometimes betray the news. Last week, millions of newspapers rolled off hundreds of presses all over the country bearing the mistaken word that a dozen trapped West Virginia coal miners had survived the ordeal.

A decade into the Internet age, newspapers are attempting to transform themselves into electronic media with one hand, while clinging to their ink-on-paper past with the other. It's hard to avoid eulogies for the news industry, or the Orwellian scenarios in which propaganda and entertainment all but obliterate information. Some envision a future in which news will slip effortlessly into cyberspace, with professionals working alongside amateur citizen-journalists. A few expect technological salvation to come in the form of a roll-up plastic computer screen that could be read on the beach or in the bathroom. What virtually all industry-watchers agree on is that the news business needs a radical renovation.

An "absolute necessity"

Newspapers used to have a monopoly on information, and it is taking them a long time to get used to the idea that they have lost it. A century ago, in every American city, various Heralds, Timeses, Tribunes and Gazettes may have competed with each other, but as a mass medium, the newspaper enjoyed total primacy.
"It went out once a day and it was of absolute necessity to absolutely everyone," says Stephen T. Gray, former managing publisher of The Christian Science Monitor, who now runs a research project called Newspaper Next at the American Press Institute in Reston, Va. "Today we've got an infinite pipe for information, but we're still putting out a medium that goes out once a day and meets the needs of 100 years ago."

There is no shortage of ideas on how to update. Joe Mathewson, a banker, lawyer and former reporter, wrote a recent column suggesting that papers metamorphose into tax-exempt, nonprofit organizations. Ken Sands, online publisher for the Spokane (Wash.) Spokesman-Review, threw the Web site open to local bloggers, then introduced a $7-a-month online subscription fee. Even the dowager New York Times is covering the run-up to the Academy Awards online this year, giving reporter David Carr his own gossipy outlet, The Red Carpet, and the nom de blog of Carpetbagger.

Existential questions

Everything about newspapering is negotiable these days: who writes, who reads, who pays, what should be covered and how. Even as they shovel the daily quota of prose, editors are pondering existential questions. What gives a newspaper its soul? Excerpting a politician's stump speech, summarizing a school board meeting, passing along rumors about a star's sex life, investigating a company's fraudulent accounting, reviewing a new play or suing the government to open records to public scrutiny? Newspapers traditionally have done all these things at once, but it is no longer clear that they can or should.

"If you went to an editor and said, 'I'll give you 400 newsroom people and $50 million a year to start a publication, and you must create a printed news product and an electronic product' - if that were the premise, would any editor in this country create the same paper they have today?" asks Tim Porter, a former newspaper editor who writes a blog called First Draft.

But change brings trauma. Adapting to the electronic age means bending rigid organizations and balancing the need to put out tomorrow's paper with longer-term strategies. Reporters accustomed to an end-of-day deadline balk at churning out hourly updates for the Web. And funneling dispatches to electronic and print editions simultaneously requires a double set of editors in an era when layoffs are pandemic.

"It's a very difficult transition to manage," says consultant Peter Zollman, whose clients include Tribune Company, Newsday's corporate parent. "If you could shut Newsday tomorrow and just run it as a dotcom, on an intellectual level, it would be a lot easier. But there's a real business there that has to be managed and grown and maintained."

If anything can prod the business into painful reinvention, it is the news it has been publishing about itself. The Audit Bureau of Circulation reported last month that U.S. circulation dropped by an average of 2.6 percent in 2004. The San Francisco Chronicle sold almost 17 percent fewer copies than the year before; the Atlanta Journal-Constitution lost 8.7 percent.

It doesn't look as though the downward trend is going to change anytime soon. The young get their news from papers far less than their parents did, and there's no reason to think their habits will change as they age, says Hazel Reinhardt, director of market research at the Media Management Center of Northwestern University. While nearly three-quarters of seniors at least glance at a newspaper every weekday, not even 40 percent of 18- to 34-year-olds do.

Meanwhile, expenses are rising and revenues ebbing. Newsprint costs 34 percent more than in 2002. Craigslist and other online services are nibbling away at the classified-ad business, which produced more than one-third of all newspaper revenues in 2004. The industry depends heavily on advertising by retail chains, which have tended to merge and hence run fewer ads.

The whirlwind of circumstances has incurred Wall Street's ire: Newspaper-company stocks have been shuddering toward disaster, and executives have responded by whittling their payrolls by thousands.
Nevertheless, some optimists are still standing. "Anybody who tells you that newspapers will be going away within the next five or 10 years is just crazy," Zollman says. "Newspapers have supposedly been going away since the advent of radio, but they're still among the most profitable businesses in the U.S."

Despite shareholder scorn, newspapers make money - lots of it. A few years ago, industry profit margins ranged into Google territory, up to 25 percent. They have fallen dramatically since then, but the Gannett chain's current 17 percent margin still puts it in a completely different zone of profitability from, say, Wal-Mart, which translated its 3.6 percent margin into juggernaut status.

Perhaps it is their less tangible forms of value that make newspapers indispensable: They are repositories of cultural memory, guardians of civic virtue and emblems of democracy. Like universities, they stockpile knowledge and expertise. One of the most persuasive examples of the resilience - and adaptability - of newspapers came recently from the New Orleans Times-Picayune, which, though hobbled after Hurricane Katrina by underwater presses, uninhabitable offices, homeless employees and dispersed readers, kept publishing online until it could patch together a print edition.

Different perceptions

Journalists who love what they do have a hard time learning to do it differently. Newsrooms are redolent with nostalgia that even greenhorn reporters quickly absorb. Stories used to be longer, deeper and smarter, they say. The brass used to care about quality. Now it's all sidebars and charts and handout photographs of stars.
Reporters and readers have different perceptions of what constitutes good reading. The Atlanta Journal-Constitution appointed Stacy Lynch to talk to readers and tell editors what she hears. "There are stories that deserve long narrative," Lynch says, "but until you've watched readers keep flipping pages over and over again, you don't see how high the bar is to justify that kind of length."

But if the readers' attention span determines the limits of coverage, many journalists argue, it will choke off in-depth series and investigative articles whose impact is measured by civic good. "The average large metro newspaper runs 200 stories a day," Lynch says. "We don't drive people away with too many heavy-duty investigations. We drive people away because out of those 200 stories, it's hard to find 10 that are really interesting."

Editors would do better to make longer-term investments, in her view. Devote resources to court battles to get government documents released. Hire reporters with the specialized backgrounds to tell complicated stories. Devote more resources to local news, and up the ante on investigations.
It's common sense that in an age of info-aggregators like Google and Yahoo, newspapers should focus on the information they can really own. Facts are generic: tomorrow's weather, the number of dead from a Baghdad bombing, the price of stocks remain the same no matter who reports about them. But a book review, a background check on a local politico, a profile of a neighborhood eccentric or a multipart series on the cost of volunteer fire departments is proprietary content: the stuff that people will pay for.

Such unique writing lies behind The New York Times' recent launch of Times Select, a $49-a-year online service that gives subscribers access to the paper's columnists. The move is a trail-marker on the path first cleared by The Wall Street Journal, toward a future in which newspapers can make money online. In its first three months, it attracted 150,000 online-only subscribers.

Martin Nisenholtz, the Times executive in charge of digital operations, says charging readers for electronic journalism is not the final answer to making money online. While the rest of the industry hunts for a new business model, he believes new media will make money the way old media did: from advertising. "There are now several large-scale businesses that are extracting revenue from the Web, and that's mostly advertiser-supported," he said.

Adapting to gizmos

Some news-hawkers await a technological elixir that will eliminate the need for press operators and truckers, but leave reporters alone. Others think the news-gatherers will have to adapt to the gizmos.
Roger Fidler, a professor at the Missouri School of Journalism, has been preaching the gospel of electronic papers since the 1970s. Over the next few years, he predicts, papers will begin zapping their content, ads and all, not just to laptops but also to electronic "document readers" - lightweight screens that can roll up like portable window shades. Philips, the Dutch electronics giant, has created an Amsterdam-based subsidiary called Polymer Vision that plans to introduce its first plastic roll-up screen next year.

Fidler craves a gadget roughly the size, weight and feel of a magazine to help wean readers away from paper. But Polymer Vision is aiming for a global mass market, which means miniaturization and total portability. "What people in the newspaper industry want is an electronic version of what's available today on paper," says Karl McGoldrick, general manager of Polymer Vision. "But people are demanding news and information on the move. If I make a screen that's 15 inches, we can do it, but it's not truly mobile. For me, true mobility means in your pocket." It also means news distilled to a stream of five-word headlines.

The compromise solution will be far more wrenching to journalists than to product designers. Adapting journalism to the new environment probably requires throwing out some ancient rules. "We have a formulaic approach: We cover the city council meetings and then whatever happens there becomes news," says former publisher Gray. "Is that serving people's needs? My parents' generation says, 'Go to the city council meeting.' The 18- to 25-year-olds say, 'Don't go.'"

Still, he believes local and regional newspapers can convert their Web sites into profitable community-service centers. "We used to think that we gave people information and presto, you were empowered. But if you have a big pothole in front of your house, how is a reporter writing about it going to empower anyone? The Department of Public Works probably doesn't have a Web site that allows you to complain about it so that it can get fixed. But a newspaper could - and we could manage it with the same set of skills that we already have."

Rather than absorbing Web sites that thrive on wire-service reports, Gray believes papers should be starting their own artisanal sites to complement what's printed on paper. "If an advertiser comes to you and says, 'The market for my product is working women 18 to 35,' I have to say, 'I can't help you much in the newspaper because we don't do very well with that group. But hey, I've got this community Web site with blogs and a certain number of reporters producing stories about issues that group cares about.' Is it journalism? If it's serving people's needs for information, then it is."

The question is not whether news will survive. The human needs to know and tell are instinctive, and new technologies have magnified the power of dissemination. The real issue is how a few can get rich and others make a living serving those urges. In the early days of radio and TV, newspapers allowed newcomers to bring fresh forms of journalism to maturity. It's a familiar response to technological advance.

So perhaps, as newspapers accept more and more draconian shrinkage, nimble upstart enterprises will appear over the digital horizon. They will have plenty of journalists to choose from.

Copyright 2006 Newsday Inc.
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