Nothing like a punch in the face to focus the mind

Denver, Seattle, Tucson, Detroit, San Diego. Yesterday, it was our turn in Portland. Pay cuts of 5-10% for everyone on staff (15% for the three most senior execs), four furlough days and the freezing of our traditional defined-benefit pension plan.

Worse than the announcement itself was the sense of fear and desperation it seemed to unleash through the ranks. What if the advertisers don't ever come back? What if we never get control of our digital destiny? What if it really is the beginning of the end, as the gloating MSM naysayers have been predicting?

And a deep and abiding sense of anger, of course, that the owners and managers of the company didn't see this coming and somehow head it off.

There is a best-case scenario: All that fear and loathing manifests itself as motivation to innovate quickly and comprehensively. At some level, that's already playing out. The number of unsolicited suggestions I've received in the past 24 hours about ways to generate new revenue exceeds what came my way in the past two or three months. That's certainly a good start. Let's turn all these smart and creative minds at least partially to the problem of reinventing the newsroom and the news business for the next generation.

But now comes the hard part, which is a lot of nibbling around the edges, trying things that don't work out and otherwise innovating in place. It would be so much easier if one great idea could fix everything. If we could wake up one morning, see the brilliance of some new business model or form of distribution, and laugh about how scary it was there for a while. Not gonna happen, folks. At least not anytime soon.

So we're left with dozens or hundreds of small changes we have to give a shot. We have a window of opportunity -- while we're still receiving quite a bit of print revenue -- to reinvest in myriad other forms of (mostly digital) distribution. To experiment. To learn. We should be thinking like pharmaceutical companies, in that we need to have a whole bunch of projects in the pipeline at any given time. The more the better. Most won't work out, but that's fine. We'll learn, adjust and try again. At least a handful do need to work out, some of them in fairly significant ways.

Twitter, Kindle, RSS feeds, e-editions, Facebook, micropayments, other forms of for-pay content, online stores, creative use of digital archives, CDs and DVDs, speakers' bureaus, TV and/or radio stations, reader participation and interaction, visual storytelling, documentary film, niche publications, wholesale blogging, entirely new lines of business, etc. There are no wrong suggestions at this point. Only a lack of vision and willpower that is as much of a threat to our future as any external force. Eventually, if we're lucky, some of it will begin to coalesce into a new business model.

So, colleagues here and elsewhere, I feel your frustration. But don't look askance at the small innovations that come down the tube. Embrace them and offer more ideas like them. Because it's the little things, not the one great idea, that may ultimately save us all.

Gone fishin'

Really. Fishing. No new posts 'til Monday. I'm optimistic the industry will still be alive and kicking at that point...

Building a better Craigslist

A group called RevenueTwoPointZero is pulling together a bunch of new-journalism thinkers this weekend in Washington, DC, in an effort to solve some of the big problems bedeviling us all. One of their four founding charges is to "Create a better Craigslist." So I'm going to offer one completely unsolicited idea for them to chew on.

Let's start with the basic challenge. On the group's Web site, Alan Jacobson offers the following four criteria:

1. Make it easier to use (than Craigslist)
2. Make it free for the general public
3. Serve up context-sensitive, paid ads along with free classified ads
4. Provide a forum for feedback on sellers to keep ‘em honest.

Okay, fair enough. Here goes, Alan.

I'd build a classified-ad aggregator with a nice interface and a better search engine than Craigslist provides. Have your own classifieds there along with Craigslist, shopgoodwill.com, Autotrader.com and any other online auction or sales site that seems appropriate. When a user types in "Honda Accord," they'll get the top listings -- if any -- from each of those sales sites for that product. Meanwhile, you can sell display ads (from a local car dealer in this case, for example) to run elsewhere on the results page.

As an industry, we'd have to concede that we've actually lost the classified-ad war. That seems easy enough to most of us, since it's so obviously true. But we'll have to talk gently into the night to executives in our advertising departments to convince them it's finally over.

Even when that's done, we'll have to get our legal eagles involved to make sure we're on solid ground scraping those other sites. But I'm convinced we could find a way to do it. Hell, other places have been aggregating from our sites for a decade or more.

Finally, we have to figure out how to leverage this new model to maximize our gain. Again, I have faith we could handle it. There are ways to provide incentives for classified advertisers to come to us, especially if our user numbers start to put us on more equal footing with the Craigslists of the world.

Best reason yet to offer Kindle subcriptions

What you see above is the e-reader from Plastic Logic, which the Detroit papers say they plan to lease to subscribers in place of print several days a week. On those days, readers will get a combined Free Press and News that runs 32 e-pages.

Certainly, everybody in the industry will be watching to see how they do in Motown. But the point for now is not to dicker about whether they'll be successful. Undoubtedly, they'll adjust and change things as they go. God knows how it'll turn out in the end.

The point is that future business models will likely include some version of this for the rest of us. Some portion of our distribution will be on some type of tablet or e-reader or not-yet-ready-for-prime-time e-paper. In Detroit it's Plastic Logic, elsewhere it'll be Hearst's supposedly in-development e-reader, and in yet other places it'll be other things.

But why not start experimenting now, in a low-cost and low-risk environment? At last count, only 22 U.S. newspapers were available for subscription on Kindle. That leaves about 1,400 other daily papers that probably ought to think about it.

It’s relatively simple, after all, to send an .xml feed to Amazon each night. And if nobody subscribes, you lose nothing but your IT guy's programming time. If several hundred (or several thousand) people subscribe to your paper via Kindle, you gain a slight bump in revenue and begin moving along the e-reader learning curve.

Plus, any subs you get count as paid circulation. (Not sure about the new "verified circulation" model.) A circ bump, no matter where it comes from, is a good thing these days.

Finally, there’s a “soft” benefit to giving the impression, both internally and externally, that your paper is experimenting and trying new things. Fewer than two dozen U.S. newspapers are offered on Kindle now, so there's still a chance to be an early adopter. So what are we all waiting for?

Well, somebody has to go first...

NYT Chairman Arthur Sulzberger Jr. reportedly said, in a speech last week, that the Times has "renewed our analysis of how paid content can augment our core advertising business." And the paper's executive editor, Bill Keller, has said "a lively, deadly serious discussion continues within the Times about ways to get consumers to pay for what we make."

God bless them. If they can make it work, it might give courage to all the publishers out there who are afraid to experiment with paid online content. I'm not suggesting we should put everything behind a paid wall overnight, but finding ways to generate incremental revenue from readers should be on the table. As of now, however, no editor or publisher wants to stick his or her head out of the gopher hole first, for fear of being shot.

Of course, the Times has been down this road at least two other times. In each case, it eventually abandoned the effort. The question is whether the situation is dire enough now that execs there will be willing to bet their franchise on finding a way to make it work. In the end, that might be what it takes.

The 90/40 dilemma

The chart above is from the Pew Project's 2009 State of the News Media, sourced to the Newspaper Association of America and other research. The portion in red is revenue from online advertising; the gren(ish) portion is from print revenue sources. (Click on it to see a larger version, or go look at it and many others at the Pew site.)

The chart's numbers are updated only through 2007, but the underlying reality hasn't changed since. Roughly 90% of newspaper company revenue is still generated by print subscriptions and advertising, while only about 40% of its costs are attributable to printing and distributing the dead trees.

Kill off your print edition right now, in other words, and you're giving up virtually all of your revenue but keeping the lion's share of the costs.

I hear from new media types all the time that the first step to take in finding the future is to stop the presses. Go online only, or mobile only, or digital only. But as long as the calculus looks like this, you'll be hard pressed to convince many publishers.

Goodbyes and hellos

We all knew it was coming, didn't we? The Seattle Post-Intelligencer as of tomorrow will become the second major U.S. daily to stop publishing this year. It's especially painful because in many ways the P-I was the better of the two dailies serving the readers of Seattle.

But we don't really have the luxury to wallow in the pain of a journalistic voice being silenced. There's too much to do at all the other major metro newsrooms if we don't want to be writing our own obituaries. (And keep in mind that both the P-I and the recently deceased Rocky Mountain News were the weak partners in JOA agreements that made it unlikely they would have survived permanently, anyway. The changing business model and the recession merely precipitated their declines.)

Plus, there's a potential silver lining in this. The P-I is going to make a stab at inventing a new type of big city newsroom, working with an online-only platform. Quoting from the P-I's story today:

"Steven Swartz, president of Hearst Newspapers, said in the release the Web site 'isn't a newspaper online -- it's an effort to craft a new type of digital business with a robust, community news and information Web site at its core.'

He continued: 'The Web is first and foremost a community platform, so we'll be featuring new columns from prominent Seattle residents; more than 150 reader blogs, community databases and photo galleries. We'll also be linking to the great work of other Web sites and blogs in the community.'"

And from Colorado, word comes today that a bunch of the former Rocky journos are hoping to develop their own version of the same thing, called In Denver Times. In their case, they want to provide most news for free but will have a premium level of content for subscribers. If they don't get 50,000 subscribers to commit in the next five weeks, they'll pull the plug.

Good luck to both ventures. The rest of us in the industry should watch and learn and hope they succeed. The directions they're heading, regardless of the details in each case, are similar to ones we'll all be heading in some form before long. And for most of us -- unlike at the partially or fully shuttered newsrooms in Seattle and Denver -- that doesn't have to be a terrible thing.

While I wish both ventures well, I do worry about their business prospects. The journalists have their hearts in the right place, but it will be difficult to sell ads and develop a competent (and self-sustaining) business model from scratch. Which is basically what they need to do.

Both are leaving JOAs that largely gutted their own abilities to sell advertising. Even if ads don't make up as much of the going-forward revenue as in the past, they'll presumably want some level of ad money. Yet they'll be out there as newbies competing against their former reps in the sales trenches. Tough way to start a new venture in the best of times. And these times, needless to say, ain't so good to start with.