Recovering Journalist

The Chasm, Revisited

Charles Layton, in American Journalism Review, revisits my prediction from last year that it will take several years before online newspaper revenue gains catch up to the huge declines in print revenue. I predicted gloom and doom while the industry struggles to cross this revenue chasm. 

Layton's conclusion: I was probably optimistic. Uh-oh.

I'm not surprised. Newspaper print revenue is now falling almost twice as fast as it was when I did that study last fall. And online revenue growth is slowing. Both are partly the result of the slowdown in the overall economy. I'd argue that the print revenue drop will slow a bit as the economy comes back, and that online revenue growth with increase as advertisers and newspapers get smarter about online advertising. It's hard, as I noted at the time, to do accurate predictions based on a quick snapshot of current conditions.

But the deep structural issues with the newspaper business remain, and that was the overall point of my original posts, which Layton's piece echoes: There's a huge revenue gap before the online business replaces the print business. And unfortunately, it's likely that many newspapers will fall into that gap and never come out. That's why newspaper companies need to be taking drastic steps—as I've outlined—to transform their business. Otherwise, they're doomed. 

It's Still a Business

A lot of well-meaning journalism theorists and pundits have suggested that the optimal model for the future of newspapers is some sort of locally owned public trust, which theoretically would protect the paper from the vicissitudes of Wall Street and shareholders and their demand for such crass things as, say, profits. This, in turn, would allow the paper to operate above the coarseness of the business world, providing a shield for its journalism (and journalists) from those money-grubbing capitalists. What a romantic notion.

Exhibit A in this argument usually is the St. Petersburg Times, which is owned by the Poynter Institute, the journalism think-tank and training center.

Problem is, newspapers, no matter what their ownership structure, still are businesses. And in fact, the St. Pete Times, while ultimately owned by Poynter, also is a business, and its leaders are very open in saying that it must make a profit to survive. Not surprisingly--especially in the economically tough Florida market--the Times is having the same problems with declining audience and advertising that every other newspaper faces, regardless of ownership structure. 

So it's not surprising to find out that this alleged model for the future of the industry is handling the challenges the same way others newspapers are: with staff buyouts, salary cuts, and perhaps even layoffs.

So much for romantic notions of saving newspapers through some sort of profit-proof local public trust. Anybody got any other ideas?

NYT=API

This is very, very interesting.

The New York Times is planning to open up its content to anybody who wants to draw from it, mash it up, reuse it, etc. This is technology-think, not media-think, and every news organization should be thinking about the same thing (and there probably should be some cooperative work on setting standards for how the information should best be structured). News sites need to find new ways to distribute their content far and wide, and the Times' effort is a major step in that direction.

Advertising 2.0. Please.

Great post: Scott Karp in Publishing 2.0 on why traditional advertising formats don't work online. I touched on this a year or so ago, but Karp does a great job of indicting the banner ad as a legacy of a bygone era and pointing out that Google's Web advertising success has come through a vehicle (contextual advertising) that's truly a Web product, not a re-pasted print ad.

Money quote:

Traditional advertising formats FAIL on the web. By traditional advertising formats, I mean display ads, video ads, and any other ad whose format and value proposition approximates or imitates that of an offline advertising format.

Exactly right. There's a crying need for advertisers (and the media companies that enable them) to try to do more than replicate display ads on the Web, and to understand that tools like context, search, social media, pay-per-click, etc., are available to the Web advertiser. This is a big reason why traditional media sites have hit the wall on revenue--and why Google is lapping the field.

As Karp says:

We need to invent new forms of advertising on the web. But it’s more than that. ... Online advertising must create value for users or it will create little or no value for advertisers. This would seem self-evident, but it has not been the case with traditional advertising, which was developed for CAPTIVE audiences, and web users are increasingly anything but captive.

Muttering About Newsday

Not to be missed: Alan Mutter's superb evaluation of the Cablevision deal for Newsday—and how it compares to Rupert Murdoch's offer. As Alan suggested in an earlier post this week, it wouldn't be surprising if Murdoch winds up with Newsday in a year or so after Cablevision runs headfirst into reality.

The New Philly.com

When I took a temporary gig as VP-Editorial at Philly.com a few months ago, I wrote that I probably wouldn't be able to say much in this blog about what we were doing while we rethought the site. Well, now I can: We launched the new version of Philly.com this weekend, and I think we've broken some important new ground in what it means to be a newspaper Web site.

To start with, the new Philly.com doesn't look like most other news Web sites. It doesn't have an endless collection of text links on the home page. Instead, it's got a clean, elegant design (by the good folks at the Philadelphia office of Avenue A/Razorfish) that highlights important content and is designed to move readers deeper into the site to find more. It makes very strong use of photos and video, in addition to text. It uses photo-illustrations of Philadelphia landmarks at the top of most pages so that there's no question that you're on a site about Philadelphia. In short, the new Philly.com has a strong personality and identity—unlike most newspaper sites, which generally lack local identity.

But those are just the cosmetics. Philly.com also tries to rethink what it is to be a newspaper site. Yes, the excellent content of the Philadelphia Inquirer and Daily News is front and center. But the site is not just about news. It's also full of guidance to living and visiting in the Philadelphia region, including events calendar searches on every page, to help readers find out what's going on around town besides what's in that day's news.

More importantly, Philly.com finally breaks free of being a one-way lecture to the audience. It's bristling with calls to action for reader participation, in comments, discussions, user-submitted reviews, photo and video uploading and other user-generated content. Highlights of that reader content are displayed on just about every page, so that visitors are invited to talk amongst themselves about what's on the site and what's going on around them. I don't think any news site as gone this far in encouraging reader involvement. Underlying this is an industrial-strength comment-management system that minimizes the amount of work the staff has to do to police all of this user interaction.

On top of that we've got dozens of reporter and columnist blogs, a growing number of video elements and shows, ubiquitous horizontal navigation to keep readers moving around the site, some cool tools from Aggregate Knowledge to help readers see what others like them are interested in, and much more.

And this is really only the beginning. As with any redesign and relaunch there were a few things that didn't make the deadline, most notably some social features, which will be phased in over the next few months. Philly.com will continue to grow and improve, but it's already light years ahead of where it was before this redesign. (For a glimpse at what it used to look like, see the screen-grab at left. The change is really dramatic.)

There are a number of people who deserve great credit for the new site, starting with Philadelphia Media Holdings CEO Brian Tierney and Philly.com President Eric Grilly, who have strong ambitions for what the site can be and how it has to move from simply being a "newspaper site;" the aforementioned Avenue A/Razorfish, which delivered a great design (further polished by Jill Hoover and Jeff Aiken); Jennifer Musser-Metz, who did an incredible job project-managing the design and launch process; and the talented and hard-working production and tech teams at Philly.com, who brought it all together and will keep the site evolving and growing over the next weeks and months.

As you can tell, I'm very proud of what's been accomplished with the new Philly.com, and I'll be excited to see it get even better in the future. We're defining what makes a great newspaper site. Up next: Philly.com does hyperlocal. Watch this space.

Comments Aren't Rocket Science

I've said it before and I'll say it again (and again): Managing comments on newspaper Web sites isn't exactly rocket science. But newspapers seem to keep thinking that it is.

Today's hapless example: Norwich (Conn.) Bulletin, which turned on comments and discovered that, HORRORS, contributors were posting horrible things (even on wedding announcements, which is actually pretty funny). So what did The Bulletin do? It turned the comments off—while The Day, in neighboring New London convened a public forum about online comments, replete with various experts and editors (not necessarily the same thing), along with an earnest followup story in the paper that talks about "the relatively new and challenging world of online reader comments."

Relatively new world? Really? Maybe to The Day and the Bulletin. But there have been online comments for more than two decades now, beginning at places like The Well, Compuserve and AOL, and advancing through too many online forums to mention—some of them even run by newspapers. There's nothing new about comments. The only thing new is the newbies in the newspaper business that don't do their homework before turning them on.

What those veteran sites have learned—which papers like The Bulletin only seem to bother to find out through trial and error—is that fully anonymous, ungoverned comments turn into chaos. Surprise!

Let us count the ways—and the ways it could have been prevented: The Bulletin said it had trouble with profanity (try a profanity filter), "irrelevant ranting" (try registration and moderation) and "vitriol" (see previous recommendations). Yep, that's pretty much the usual list of complaints. And they all could have been avoided from the jump. (I'll link to my previous post on this again.)

To repeat: This isn't rocket science, and it's hardly a new field. The Bulletin says it is going to relaunch its comments with user registration and staff moderation (the latter is probably unnecessary if registration and user-policing are used); no word about a profanity filter (highly recommended). And like other newspapers before it who have taken these steps, The Bulletin will discover that the comments aren't as difficult as they first appear. Gee—maybe The Bulletin's editors could have avoided these problems if they'd just done a little research first.

When the Presses Go Silent

The New York Times has an interesting story about International Data Group, the tech industry trade magazine publisher, which is transitioning its print magazines to a Web-only model. Results: losses turn to profits, online ad revenue outstrips print, and revenue is growing 10 percent a year. Surprise!

Stewart Alsop, the journalist-turned-VC who once edited IDG's flagship, InfoWorld, gets the kicker quote: “What’s happening at IDG is a fairly accurate map for every other publishing organization. Get over it, it’s going to happen.”

eBay v. craigslist

I'm not sure why this hasn't gotten more industry media attention (or maybe I've been so busy I've missed it), but the eBay-craigslist relationship has finally hit a bad patch.

This fracas has been fairly predictable since eBay purchased 28.4 percent of craigslist in 2004, reportedly from a former employee (though eBay now hints that it bought the shares directly from the company). Everybody involved talked about how amicable and friendly it all was, but you had to wonder how long it would take before tensions bubbled up between the auction giant and the classifieds behemoth.

Craigslist is run essentially as a cooperative, with little focus on profit or stockholder value. At some point, there had to be a flashpoint with a big, publicly owned investor like eBay, which would want to see some return on its investment (the price was never disclosed, but it was said to be a few million dollars; in theory, it's now worth hundreds of millions, at least). Capitalism vs. communism—it never ends happily.

There were a couple of signs of problems in the relationship over the years, most notably eBay's promotion of its own classifieds site (and craigslist competitor), Kijiji. But now, eBay has filed suit (PDF) in Delaware alleging that craigslist has diluted eBay's share in the company by issuing new stock. Craigslist, in turn, allegedly tried to adopt a "poison pill" provision to head off an eBay takeover, and has been trying to buy back eBay's stake.

Game on.

“The recent actions by the craigslist directors have disadvantaged eBay and its investment in craigslist,” eBay General Counsel Michael Jacobson said in a written statement. EBay's Delaware complaint--with some key numbers and details oddly redacted--argues that craigslist's actions "robbed eBay of valuable economic and non-economic rights" and accuses founder/namesake Craig Newmark and CEO Jim Buckmaster of breach of fiduciary duty to shareholders.

Counters craigslist, on its blog: “Sadly, we have an uncomfortably conflicted shareholder in our midst, one that is obsessed with dominating online classifieds for the purpose of maximizing its own profits.”

"Dominating online classifieds?" Hmmm. Who does that sound like? Newspapers, devastated by craigslist, should be watching this legal battle closely. Though it may be too late--this is a case of two big players fighting over a business newspapers wish they still had. The outcome could be a change in ownership structure and control at craigslist. It would be interesting to see how different a company craigslist would be if it had to focus more on the bottom line.

Oh, and memo to newspaper executives: The company's name is craigslist (lowercase), not Craig's List. It's comical how many newspaper company presentations get that wrong. If you don't even know the proper name of one of your biggest competitors...