The Proposal to Reinvent Journalism

The generally accepted idea is that the Internet is the successor to newspapers. Whereas this may ultimately be true, newspapers and their websites must work in collaboration until a definitive business-model is discovered. Websites must serve as a supplement to newspapers, rather than a replacement. At this stage, the two mediums rely on one another as a form of cross-promotion. The key to capitalizing on news websites is to customize.

Rather that having one general website, each news organization would offer multiple sites aimed at meeting that particular readers interests. When the consumer signs up for a subscription they will answer a variety of questions regarding the news topics they are most interested in. They are then classified into a grouping based on age, gender, their personal interests and other demographics and receive a customized news website where the stories that pertain to those topics of their interests are more prominently displayed than others.

During the subscription sign-up, consumers will also be questioned on their buying habits and personal interests in order to group them into a target market for advertisers. Along with the customization of stories, the advertisements will also be strategically placed to meet the interests of the consumer. Doing so will ensure advertisers that the ad has more potential to reach the attention of the reader because the ad pertains to their needs and the stories were customized to be of interest to them in hope of sustaining their attention span and forcing them to spend a considerable amount of time on the site.

The next step will be to preserve print editions by balancing content between newspapers and websites. The paper should contain some exclusive content that will sustain its relevance and keep the market alive.

It is possible for the two outlets to co-exist. I don’t believe the Internet alone can provide the revenue necessary to fun quality journalism. Until a definitive model that proves otherwise is discovered, changes must be made to capitalize on the news websites while preserving the revenue generated from print editions.

Introducing the Future of Newspapers….

Amazon recently introduced the latest product in the Kindle line that may serve as a replacement for print editions.  The device is larger than the original Kindle, thus more suitable for print readers, and Amazon is hoping that it will become the successor to textbooks and newspapers.

According to the New York Times, the Kindle DX has a screen two and a half times the size of those on the two older versions of the Kindle, which were aimed primarily at displaying book pages. The DX costs $489, or $130 more than the previous model, the Kindle 2. It will go on sale this summer.

Customers can receive a discounted price (only if they live in an area where the print edition is not available) on the new Kindle if they commit on a long-term subscription to papers such as The New York Times, Washington Post, or Boston Globe.

Brace yourself news consumers, the future is upon us.

The Globe Staves Off Death

After weeks of threats led many to believe that the Boston Globe was on borrowed time, the union and the New York Times Co. reached an agreement that will enable the paper to continue operations.

Pay cuts, unpaid furloughs, and changes to the lifetime job guarantee provisions resulted in concessions of $20 million that the Times had required.  The elimination of job guarantees ensures that lay offs are on the horizon for a paper that  is projected to lose $85 million this year.

Last month, employees of the Globe, union workers, and readers rallied in Boston to support the paper and speak out against the Times.  The website http://www.savethebostonglobe.com was also launched in an effort to save the paper.

Although many members of the union were hesitant to concede certain aspects of their original contract, they agreed that they had to do whatever possible to save the paper.

A rare success story in the era of dying newspapers.

Cut Jobs But Approve Bonuses??

The Chicago Tribune laid off 53 people from its newsroom staff, cutting about 11 percent of its overall staff. The Tribune continues to reduce staff and cut costs, saying they will begin to focus on local news.

Interestingly enough, this round of layoffs came as Tribune Co. asked a bankruptcy judge to approve over $13 million in bonuses for 693 managers.  How can a company justify rewarding management as their subordinates are sent packing?  Rather than awarding bonuses to those who still have a job, Tribune should be dividing that $13 million amongst those who have been laid off over the past year by the company.

Yet another case of the rich getting richer, and the poor getting poorer.

Ad Revenue Drops Even More Than Expected???

When publishers set their predictions for advertising revenue during the first quarter of 2009, they did so with bleak expectations.  Apparently, they weren’t bleak enough.

With first quarter numbers set to be released soon, analysts are expecting a advertising drops far worse than they originally expected, some as high as 30 percent at some newspapers, with drops of over 20 percent being the norm in the industry.  At the rate that advertising is dropping, budget cuts and layoffs will no longer be a viable option to offset losses, and more newspapers will turn towards bankruptcy, if not final editions.

I am curious to know which aspect is more responsible for the loss of newspaper advertising.  Is it the Internet stealing advertising by offering an innovative alternative to traditional print ads?  Or is it the state of the economy that is causing major advertisers like car companies to drastically reduce or even eliminate their advertising budgets?  Clearly it is a combination of both, but if it is in fact the latter that is more responsible, what happens when the economy rebounds and companies are willing to place ads again?  By that time, online advertising may be their only option.

LA Times: Ad or News Story?

The Los Angeles Times recently came under fire for putting an advertisement on its front cover that could have been mistaken for an actual news story.

According to the Times, the ad for the NBC drama “Southland” appeared in the left column, starting below the fold and above and beside a banner ad for the television show. The ad, which was labeled “advertisement” and carried the NBC peacock logo, was written from the perspective of a reporter on a ride-along with the show’s main character, a Los Angeles police officer.

With advertising revenue at all-time lows, newspapers are looking for innovative ways to recoup lost revenue. The publisher said that the ad did command a significantly higher rate than traditional ads but drew complaints from nearly 70 readers and objections from the newsroom and multiple editors.

So now advertisements are being confused with front-page news stories. (Sarcastic) Solution: remove the news stories from the front page and run full page ads to avoid confusion.

Zell: Tribune Was a Mistake

Mistakes are made everyday. However, they are usually on the level of locking your keys in the car, or accidentally putting on two different colored socks. I don’t think the word “mistake” justifies buying a multi-billion dollar business and leading it into bankruptcy within the first two years.

Nevertheless, Sam Zell (seemingly unaware of this new phenomenon known as computers) recently admitted that the rapid decline of the newspaper industry caught him by surprise and his acquisition of the Tribune Co. was a mistake. He is merely stating the obvious in my opinion. Kind of like saying it was a mistake for the captain of the Titanic to increase the ship’s speed when he was warned of icebergs in the water.

I’m not sure if that analogy even applies.  Like Mr. Zell, I sometimes make mistakes too.

Newspaper Giants Continue to Cut Costs

How we long for the days when prestigious papers such as the New York Times and Washington Post were swimming in profits.

Revenue and profitability have been replaced by layoffs  and  cost-cutting measures.  Despite multiple levels of  cutbacks,  the slashing continues at two of the most prominent newspapers in the world.

In an attempt to cut back on the use of ink, paper, and freelancers, the Times announced that they will be eliminating several weekly sections, including the City Section and regional weeklies in New Jersey, Long Island, Westchester and Connecticut.  The move comes amidst salary cuts and other drastic cuts including the sale of part of its Manhattan headquarters (only to lease it back) in order to raise capital.  The Times hopes the latest cuts will be the final significant reductions for the year.

The Post will undergo drastic changes within the newsroom, as the print editorial staff will merge with the online staff to create a single operation and universal news desk.

What happens when there is nothing left to cut?

NYT: Survival of the Fittest

New York Times executive editor Bill Keller feels that once this current storm surrounding the news media blows over, the New York Times will still be standing.

If evolution hinges on the survival of the fittest, the Times is certainly in position to outlast all of its competitors during this economic crisis, despite the cost-cutting measures the paper has taken.  According to Michael Calderone’s blog on Politico.com, Keller recently spoke at an event at Stanford and suggested that readers have even offered to donate money to keep the Times going, which shows the loyalty of the Times following.

It will be interesting to see where the Times stands once the recession stabilizes and advertisers are willing to spend again. The death of its inferior competition could result in a very lucrative post-recession time period for the mighty Times.

As far as the controvery surrounding newspapers’ competition from search engine websites, Keller said, “If you’re inclined to trust Google as your source for news — Google yourself.”

An Ultimatum for the Boston Globe

The Boston Globe, owned by the New York Times Co., is one of the most respected and well-known papers in the country.   Despite being in a major market and being in association with an industry leader for a parent company, the paper has been issued a threatening ultimatum by the New York Times:  Provide $20 million in labor concessions  or the paper could be shut down within a month.

According to the AP, in response to the threat, the unions associated with the Globe plan to eliminate bonuses for more than 200 managers and executives, including its publisher, as part of a cost-cutting effort at the struggling newspaper.

Yet another paper clings to dear life.  My question is, why is anyone in the newspaper business even receiving bonuses?  Aren’t bonuses a reward for a job well done with a prosperous, thriving business?  Granted the economy has facilitated the death of newspapers, newspaper management were reactive rather than proactive in response to the threat of the Internet and that is why their jobs and the state of newspapers in general is in jeopardy.  Their job performance hardly warrants a bonus.  In my opinion, nobody in the newspaper, automaker, or financial industries should receive a dime in bonus money.  But I digress…