Rick Edmonds

Researcher and writer for Poynter Institute on business and journalism issues. Co author, State of the News Media 2006. ExSP Times and Phil Inquirer


Bowe Bergdahl

How non-stop Bowe Bergdahl coverage hit its expiration date at CNN

FILE – This undated photo provided by the U.S. Army shows Sgt. Bowe Bergdahl. Bergdahl. His complicated story does not seem to have caught the attention of CNN like the missing Malaysian airliner story. (AP Photo/U.S. Army)

Hard on the heels of its critically slammed, but ratings friendly, wall-to-wall coverage of missing Malaysian Flight 370, CNN appeared last week to have found another big story to play big around the clock: the Bowe Bergdahl rescue.

CNN’s in-house media critic/reporter, Brian Stelter, opened his Reliable Sources show Sunday with a Bergdahl segment, saying that in the news-about-news arena “it is (the) one obvious lead story.”

But a funny thing happened Monday and Tuesday. The political storm over Bergdahl’s release in exchange for five Taliban detainees and questions over whether he deserted his unit suddenly faded to a middle-of-the-hour topic.

The Bergdahl affair did rally Wednesday with live coverage of Defense Secretary Chuck Hagel’s two-hour appearance before a congressional committee.However, it appears, going forward, that CNN’s coverage will be episodic rather than continuous.

Stelter and a CNN spokesperson declined to discuss how the decision to drop focus on Bergdahl down a notch was made or why its run was cut short after 10 days while the missing plane saga dragged on for six weeks.  But the two provide a tidy update on the evolution of CNN’s big story obsession as the three-way rating competition with Fox and MSNBC has intensified.

USA Today media columnist Rem Reider wrote Monday that the Bergdahl story was “not another fleeting flap du jour” and deserved continued intense coverage.  He observed that there were at least five intriguing story lines — legal, strategic and political — each with important open questions. (The Washington Post weighed in Wednesday with a scoop reporting on Bergdahl’s journal and discharge from the Coast Guard for psychiatric reasons).

On closer inspection, though, Bergdahl was not nearly the match to CNN’s competitive strengths the missing plane had been.

My TV-savvy colleague Al Tompkins told me the missing plane search had a flavor of  mystery in which a now-we-find-out resolution seemed to be coming (though it has yet to arrive and may never).  In that way, Tompkins said, it resembled the appeal of live coverage of big trials which are the staple on CNN’s sister HLN network.

The missing plane story also had no political element, unless you happen to care about the competency of the Malaysian government.  So with more reporting resources and a strong international presence, CNN outflanked its right-left competitors at Fox and MSNBC.

The Bergdahl rescue, by contrast, quickly turned to an intensely partisan issue with Fox advancing an assortment of Republican accusations and MSNBC falling into the posture of defending the Obama administration.

Plus it grew complicated, while the main line of the missing plane story stayed simple.  That’s my best guess, anyhow, of why the story faltered on CNN early this week.

CNN is coy about whether there is a centralized decision-making process that elevates a given story to the super-star massive treatment or determines when wall-to-wall coverage has run its course. Perhaps all that is regarded as a trade secret.

Stelter did provide some hints in one of Reliable Sources earlier segments on whether the missing plane coverage was the wretched excess CNN critics claimed.  During his March 30 show, he said:

CNN, as you know at home, is still concentrating very heavily on this story for both editorial reasons as well as business reasons. Every day I get a spreadsheet with the ratings from the day before. It’s circulated widely at CNN.

And every day, I wonder is there going to be a big drop-off in the ratings because, of course, that would mean a decline in the audience’s interest in this mystery. Well, so far the interest is still very high…

Since the plane disappeared, CNN’s demo ratings have just about doubled. Now, television executives should not be blinded by ratings. But they cannot be blind to them either. That’s the reality of the news business.

The stakes are doubly high in the current cable climate where ratings drive not just advertising revenues but the carriage rates the networks can negotiate with cable providers.

CNN’s editorial and business obsession with big story, 24-7 blowouts dates to its earliest days.  The network’s breakthrough to prominence in the early 1990s was attributed to its coverage of the first Gulf War.  But even earlier it carried the only live network coverage of the Challenger’s 1986 blowup on launch and a continuous broadcast of Baby Jessica’s 1987 rescue after she fell into a well in Midland, Texas..

Ken Auletta wrote in a 1993 New Yorker article about the ratings/big news correlation for CNN.  And during Tom Johnson’s decade-plus run as CEO, CNN offices prominently displayed a longitudinal chart showing ratings spikes and the events that drove them.

Final ratings for Bergdahl week are not in, though Fox may have had a higher volume of coverage (and ratings bump) than CNN.  During the prime of the missing plane story, Fox gained a little additional audience and CNN took some share from MSNBC.  But the driver of its 94 percent audience increase in the first three weeks of the story was viewers shifting to CNN from entertainment options.

Which is to say that jumping hard on the right big story, while complicated by competitive factors with the two partisan cable news channels, remains a compelling business strategy for CNN.  Watch for the network to continue to ride such coverage hard so long as an increased audience rides along. Read more

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Pierre Moscovici

Digital disruption is now in full bloom at European, Australian newspapers

Traveling periodically to Europe and Latin America in the 2000s to speak at news business events, I got a consistent impression: international newspapers were better off than ours, but executives could see U.S.-style decline on the horizon within a few years.

Statistics released yesterday by the World Association of Newspapers and News Publishers (WAN-IFRA) suggest that digital disruption is now in full bloom in Europe and Australia. Latin American newspapers are still showing moderate circulation and advertising growth. The picture is mixed in Asia and Africa.

The summary picture now matches the United States fairly exactly:  some growth in combined digital and print audience, digital ad revenues not keeping pace and both print circulation and print advertising declining sharply.

And Larry Kilman, secretary general of the association, sees a familiar implication.  “Unless we crack the revenue issue,” he wrote in a release summarizing the findings,  “and provide sufficient funds so that newspapers can fulfill their societal role, democracy will inevitably be weakened.”

Former French Finance Minister Pierre Moscovici reads a newspaper during the EU Finance Ministers meeting, at the European Council building in Brussels in 2013. (AP Photo/Yves Logghe)

The report’s release coincides with the association’s annual World Congress conference, being held in Turin today through Wednesday.

The WAN-IFRA statistics show print circulation declining 5.29 percent in 2013, comparing with losses of 5.20 percent in Europe and 9.94 percent in Australia and Oceania during 2013.

A five-year comparison showed those regions faring even worse: while print circulation was down 10.25 percent in North America, it declined 23.02 percent in Europe and 19.59 percent in Australia and Oceania.

Print advertising losses for the year were comparable in North America (-8.7 percent) and Europe (-8.2 percent).  Australia and Oceania are not broken out separately for this measure.

As in the United States, paid digital circulation was up sharply worldwide, 60 percent for the year, and digital advertising continued to grow by 11 percent in 2013.

But the report adds important qualifiers. Newspaper organizations get only a modest share of overall digital advertising growth where Google and other big non-news companies dominate. And despite the digital revenue gains, globally 93 percent of newspaper revenues still come from print.

The report also takes a sideways swipe at the industry’s reliance on unique visits and page views as indicators or digital health.  More important, it says, is building the level of engagement:

While 46 per cent of the digital population visits newspaper websites, newspapers are a small part of total internet consumption, representing only 6 per cent of total visits, 0.8 per cent of pages viewed and 1.1 per cent of total time spent on digital platforms.

As in the United States, comparatively few international newspaper organizations have gone out of business (FT Deutschland is an exception).  But waves of sharp newsroom staff reductions and other expense cuts are common in both Europe and Australia.

European governments have been much more aggressive than ours in attempting to regulate Google or force subsidies to news organizations suffering financially.  France persuaded Google to donate $80 million, mostly in-kind services, to news organizations there in exchange for freedom to link to content.

The WAN-IFRA program reflects a roster of potential transformation strategies:  faster innovation, attracting capital, data as an asset both for news and business, video and reports tailored to mobile devices.

But those are all prospects for a stronger growth story rather than widely achieved successes with easily replicable models. Kilman’s commentary concludes:

If newspaper companies cannot produce sufficient revenues from digital, if they cannot produce exciting, engaging offerings for both readers and advertisers, they are destined to offer mediocre products with nothing to differentiate them from the mass of faux news.

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newspapers_depositphotos

Expansionary Halifax Media looks beyond its Southeast base for next buy

The Worcester (Mass.) Telegram & Gazette, long up for sale, reported Thursday that an executive team from Halifax Media Group had been in the building for several days of talks with management — a signal that the company is a likely buyer.

Halifax who? The Florida-based company, barely four years old, now has 35 dailies. With a billionaire backer, Warren Stephens of Arkansas, Halifax is pushing to the front of the line as mid-sized and smaller papers come up for sale. It bought the 16-paper New York Times Regional group for $143 million in December 2011 and 19 Florida and North Carolina dailies and weeklies from Freedom Communications six months later.

Halifax is little-known by design. Except for the occasional letter to readers, CEO Michael Redding typically does not do interviews (and I got no response to an email request that he discuss the company’s growth). But Halifax is exemplary of an acquisition boom in recent years. While billionaire hometown buyers like The Boston Globe’s John Henry or the Star Tribune’s Glen Turner get the ink, the consolidators are scooping up smaller papers by the dozen.

A landmark event for the sector occurred last September. GateHouse Media simultaneously went through a prearranged Chapter 11 bankruptcy, purchased the Dow Jones local media group (formerly the Ottaway chain) and re-emerged as publicly-traded New Media Investment Group. The reorganized company, backed by Fortress Investment Group, has indicated it has enough capital to make further acquisitions and will.

Sellers who want out and the prevailing bargain-level prices are driving this opportunistic group of buyers. Halifax was formed in 2010 to buy the Daytona Beach News-Journal from court receivership for just $20 million. The paper had been the subject of a long court battle between minority shareholder Cox Enterprises and the Davidson family owners, losing most of its value as the suits dragged on.

The Worcester paper, for that matter, was purchased by The New York Times for $296 million in 2000 but was assigned a value of only $7 million as part of the sale of The Boston Globe to Henry last August.

Halifax’s way of operating remains mysterious but appears typically to involve newsroom layoffs and a booster-ish editorial tone. Shortly after the purchase, Redding announced the pro-business stance in an open letter to Daytona Beach readers, breaking with the liberal-leaning former owners.

Kevin Drake, newly installed as publisher of the Lakeland Ledger, struck a similar note in another Open Letter to Readers 10 days ago:

Our editorials will advocate for our community and the potential we have here. We will support free enterprise and the benefits that come with a stronger economy. A thriving business environment elevates a community. We will point out positive opportunities for our city, county and state.

The Sarasota Herald Tribune — the largest in the Halifax group — was a Pulitzer finalist in 2010 and a winner in investigative reporting in 2011. Though publisher Diane McFarlin and editor Mike Connelly have left for other jobs, I am told the Herald Tribune retains at least some of its enterprise reporting bite.

Several other of the acquiring firms like GateHouse and Warren Buffett’s BH Media Group also have tended to be aggressive in downsizing newsrooms and consolidating editing and layout functions at centralized hubs.

Those two, along with Digital First Media and long-established CNHI (Community Newspaper Holdings), have a national footprint. Until now, Halifax has operated only in Florida and four other Southeastern states. It sold the Santa Rosa Democrat in California wine country, which had come as part of The New York Times group deal.

Acquiring Worcester would move Halifax further afield into New England, once a center of thriving, editorially ambitious smaller newspapers, but for the last decade a center of ownership changes, consolidation and downsizing.

It is noteworthy that Stephens, the lead among the three private investment firms that control Hallifax, has a media group of 11 Western dailies of its own, with the Las Vegas News-Review its flagship. It is possible the two groups could be combined at a future date.

Warren Stephens, nearly as sparing as Redding with public comment, did discuss acquiring The New York Times group, as part of a long interview with Steve Forbes in 2012. Echoing Warren Buffett’s comments on the durability of local franchises, he said:

I don’t think the news gathering aspects of magazines or newspapers are going to go away. I think at some point in time there’s going to be a realization that the professionalism of the reporters, the editors, the people that determine what’s going to make it into a publication and what’s not going to make it into a publication is actually worth something.

In newspapers’ particular case, I just don’t think there’s any way you’re ever going to get local news, sports, politics from any other source but your local newspaper. The purchase of the New York Times group – most of those papers are pretty small newspapers by most standards. We’re very optimistic that we can improve their operations, but also that in the long run those are going to be great, long-term assets for us.

It remains an open question whether firms like Halifax will be the wave of the future, dominating the management of small and mid-sized papers. No dispute though, they are a huge ownership force right now. Read more

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NAA_190

Newspaper industry narrowed revenue loss in 2013 as paywall plans increased

The newspaper industry narrowed its total revenue loss in 2013 to 2.6 percent, the best performance since 2006, according to figures released today by the Newspaper Association of America.

As suggested by earlier year-end reports from public companies, daily and Sunday print advertising revenues were down 8.6 percent and total advertising revenues down 6.5 percent.

However, circulation revenues grew for the second consecutive year, up 3.7 percent in 2013 compared to a 5 percent increase in 2012. That was driven by continued adoption of paywall plans, now at more than 500 of the roughly 1,400 dailies.

Revenue from digital-only subscriptions was up 47 percent, and print + digital bundled subscription revenue grew 108 percent. With many newspapers now offering all print subscribers a free digital access bundle, revenue from print-only subs and single-copy sales was down 20 percent.

Besides the circulation gain, the industry had 2.4 percent growth in digital marketing services offered to local businesses and showed some growth in newer activities like events and conferences.

Total revenue for the industry stands at $37.59 billion compared to $38.60 billion in 2012. Of that, $10.87 billion comes from circulation.

The NAA calculates digital advertising revenue rose 1.5 percent for the year and now accounts for 19 percent of ad revenues. Mobile ad revenue, though still very small, increased 77 percent in 2013.

The NAA has made several changes in how it computes and releases these figures in recent years. In 2013, it stopped releasing quarterly reports, which CEO Caroline Little said usually resulted in negative coverage and thus fueled a “newspapers are dead” narrative.

Starting with last year’s report for 2012, the NAA began trying to include more different sources of revenue in the computation. That resulted in the discovery of about $5.5 billion in revenue in such activities as contract printing and weekly and niche publications owned by dailies that had not been previously counted.

Because of those changes total industry revenue figures for the last two years cannot meaningfully be compared to those for earlier years.

The NAA estimates are based on a survey of both public and private companies along with projections for those papers not reporting.

Today’s report does not include updated estimates for daily and Sunday circulation, the number of daily papers and industry digital traffic. Metrics and sources for these numbers are in transition.

The results underscore the thesis of former NAA Chairman Jim Moroney, publisher of The Dallas Morning News, and others that new revenue streams apart from traditional advertising and circulation are becoming a key element of financial  improvement.

Though digital ad revenue gains again failed to make up for print revenue losses, there was mildly encouraging news on that front. Despite continued downward pressure on prices and tough competition from digital giants with virtually no news operations, the industry eked out a gain.

The NAA also calculated that “pure play” digital ads — that is ones not sold in a combination with print schedules — now account for nearly a quarter of the digital ad total.

The figures also bear on the continuing debate on paywalls.

Companies that continue to offer all digital content for free like many Digital First papers and all of Advance’s are sitting out the main source of revenue growth over the last several years. They are growing digital traffic much more quickly than most, but it is unclear how their digital ad revenue growth compares with potential circulation revenue left on the table.

Paywall critics like Digital First CEO John Paton have suggested that the gains amount to a one-time price increase and may be hard to sustain or even maintain after the first year or two. Part of the 2013 growth doubtless comes from new digital and bundled pay plans.

But The New York Times has introduced both higher and lower priced versions of its initial pay plan this spring, and others are expected to follow suit. So that could be a basis for continued circulation revenue growth on top of the first surge.

Public companies have not yet reported their first quarter 2014 results, but the trend of print and total revenue loss continues. That is resulting in current or prospective cuts to newsrooms and business operations at many companies.

Clarification: A previous version of this story reported the narrower revenue loss in 2013 was the best performance since the mid-2000s. For clarity, it is since 2006. Read more

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Anchorage Daily News homepage _ via Newseum.

Alaska newspaper sale: a second look at money, logic behind purchase

The news out of Anchorage Tuesday afternoon had one of those story lines too good to check — plucky little digital upstart Alaska Dispatch is buying the legacy Anchorage Daily News for $34 million from The McClatchy Co.

Well, yes. But several accounts, including those of The Associated Press and Reuters, neglected to mention that Alaska Dispatch owner Alice Rogoff is married to multi-billionaire David Rubenstein, co-founder of The Carlyle Group private equity firm. The Dispatch, in its thorough takeout on Rogoff, noted that she is wealthy in her own right. Her father was an engineer and businessman who invented a key component of GPS systems and cell phones.

So the financial story is that another rich person has bought another hometown paper.  A little twist was that the Anchorage Daily News was not for sale until Rogoff made her offer. McClatchy shares took a modest bump up the morning after the sale, indicating the stock market is good with this kind of sell-off. We seem to be entering a period where newspaper groups are quite willing to dispose of some titles as The New York Times Co. did with its regional newspapers and The Boston Globe.

Also, unlike other well-off buyers like John Henry in Boston, Doug Manchester in San Diego and Glen Taylor weeks ago in Minneapolis, Rogoff comes with her own news operation. It is a substantial one with about 30 employees overall and a newsroom of about 20.

The buyers said in their announcement that it will take at least six months to put the Dispatch and the Daily News websites together. That is only one of the intriguing questions as the acquisition goes forward. My email request to Rogoff asking for an interview was unanswered. So here are a few issues I think will be worth watching:

Who is in charge?

Rogoff will likely become publisher, and I am guessing that Tony Hopfinger, editor and the founder of Alaska Dispatch before she acquired a controlling interest, will be the top editor of the merged operation. But the pair will need to decide whether the print paper needs its own experienced leaders with daily print backgrounds on both the business and the news side.

A metro or a statewide focus?

Rogoff is a self-described enthusiast for the whole state, regularly flying her own plane to remote locations. The Dispatch has a section on Arctic Region news and Rogoff holds a yearly conference pulling in leaders of Iceland and other far north countries. Hopfinger has written extensively about Alaska’s rural indigenous population and was co-author of a book about Big Oil’s domination of the state.

That’s not to say the Daily News doesn’t have its own generous ration of state news like a series on Alaskans and alcohol. Ideally the merged operation will simply publish more good stuff.  But I do wonder how the eclectic interests of the Dispatch will mix with the daily grind of cops, courts and sports news of the Daily News.

Conflicts of interest?

Pando Daily’s David Sirota weighed in with a piece noting The Carlyle Group’s huge presence in Alaska. So will how will Rogoff’s paper and digital editions cover that story? If she is smart, and by all accounts she is, she will take pains not to mandate favorable coverage of her husband’s firm.

John Henry, for example, has taken pains to say that The Boston Globe’s exhaustive and often critical coverage of his Boston Red Sox should go on unchanged. That is probably an easier call, however, for a sports franchise than a big business with plenty of public entanglements.

My read is that Rogoff like others in the new wave of local owners is motivated by a passion for the place and the conviction that it deserves a first-rate, vital newspaper organization. But drawing the line between caring and pushing pet causes remains an occupational hazard for sole proprietors. Rogoff’s background as a journalist and publishing executive (assistant to former Washington Post CEO Don Graham and a decade as chief financial officer of U.S. News and World Report) gives her an edge in making the right calls.

Profits?

Wealthy owners can put investments both in journalism and in digital transformation ahead of high short-term profits in a way publicly-traded companies cannot. In announcing the acquisition, Rogoff said she will do just that.

Assuming the Daily News is like other McClatchy papers, it runs with a relatively high operating margin of 15 to 20 percent. Executives have been forthright in saying that they would prefer not to be making the cuts in news staff and news space to keep earnings up. But paying interest and reducing debt accumulated from the 2006 purchase of Knight Ridder has been essential to keeping the company out of bankruptcy and in family control.

Rogoff, the pilot, may want to embrace Washington Post owner Jeff Bezos’ felicitous phrase that he brings “financial runway.” She can reinvest as makes sense.

The $34 million sale is representative of the better prices being paid recently for newspapers, having improved from 3 times EBITDA (earnings before interest, taxes, depreciation and amortization) several years ago to 5 times EBITDA. It probably is a reasonable estimate that the Daily News is making an operating profit of around $5 million.

Print + digital or digital + print?

I subscribe to the view, articulated 18 months ago by Earl Wilkinson, executive director of the International News Media Association, that digital isn’t going to wipe out print anytime soon (or vice versa). We are in  a print+digital era, likely to last at least a decade.

The Dispatch/Daily News deal is entirely consistent with that principle. In this instance though, the digital side is challenged with making print work. Call it a digital + print venture. So maybe that initial story line, if misleading financially, is on target going forward. Add Rogoff’s play to the list of notable newspaper experiments (Deseret News, Digital First, Advance) in trying to achieve a business and journalism model with just the right balance.

Related: Online publication buys McClatchy’s Anchorage paper Read more

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Technology background, News text in perspective

What went wrong at Digital First Media — and what’s next?

The announced shutdown of Digital First Media’s national newsroom Wednesday and the probable sale of its 75 daily newspapers later this year is a significant jolt to those who believe a viable business model for rapid transformation of legacy operations is close at hand.

CEO John Paton’s explanation in his blog that the company has decided to dismantle Project Thunderdome “to go in a new direction” barely hints at the converging economic troubles.

Most basically, the very able editor Jim Brady (a Poynter National Advisory Board member) and his lieutenants were like a crack auto racing team trying to succeed in a highly competitive field driving Chevy Cobalts.

The two companies that were merged into Digital First, Journal Register and MediaNews, have both been through bankruptcies, Journal Register twice. Both had been under-invested for years in content management systems and other essential technology.

Steve Buttry, who was just months into “Project Unbolt” to hasten the break from print habits to digital, told me the four pilot papers for that project all had different CMSes, none of them especially good.

It is myth, embraced by digital future-of-news enthusiasts, that Web publishing is close to free. Paton seemed of that view early in his tenure when he asked newsrooms to use mainly free tools to put out their reports for a week.

But in his most recent manifesto/speech to the Online Publishers Association in January, he said he was looking for another $100 million to invest in the company’s digital activities on top of an earlier $100 million.

To weave quality mobile offerings into the often creaky pairing of print and Web content is an order of magnitude more expensive. And new lines of digital business like other startups come with the cost meter running well before the revenue kicks in.

The leading edge of the bad news was the shutdown of the Project Thunderdome news center, along with the departure of Brady and many other editors and reporters, 50-plus in all.

Several aspects of that operation struck me as odd. Digital First has plenty of company — Gannett, Tribune and others — in trying to centralize production and content generation of national news, freeing local staff (and print news hole) for local content.

But could a staff of 50 or so, however digitally adroit, really generate a range of material suitable for papers of very different sizes and aspirations, competitive with The Associated Press and other wire services?

And with cost considerations looming large, why would you put such a news center not just in Manhattan but half a block from Wall Street?

While not terribly detailed, Paton’s blog announcement said the company would be returning to a more decentralized treatment of national and international topics and let its scattered newspaper clusters do more of the picking of which digital initiatives to pursue. As for what’s next, Paton wrote that while the company will continue to invest in digital, “increasingly our focus will be in local where we are the news and information leader in our markets.”

Paton did not say that the company is being put up for sale. A thorough report from the reliable Ken Doctor said it would be coming soon. I did verify from two other informed sources (who declined to be quoted by name) that the properties have informally been shopped around since the start of this year.

That is not to say definitively that a formal sales process is in place. I am also not so sure that a buyer for the whole company or a set of buyers for its component parts will be found.

But the clear signal is that the money guys behind the company — hedge fund Alden Global Capital — are looking for an exit. Paton, as I have noted in earlier posts, spent several years as an investment banker himself. So he was a logical CEO for Alden, but probably under more pressure than he has let on to clear the firm’s financial hurdles in a timely fashion.

Ideally, investors in distressed businesses like Alden (a.k.a vulture funds) are looking to squeeze out costs, restructure strategically and sell at a profit after a few years.

However, if that scenario doesn’t work out, they are ready to bail out sooner and take their licks. Alden has done that once already, selling its controlling interest in Philadelphia newspapers to local investors at a 50 percent loss after just two years.

Opinion on the dramatic news was split. Many (including my colleague Jill Geisler) paid tribute to the innovative drive of the Thunderdome news operation and wished the talented staff well in finding new employment.

Buttry told me in a phone interview, “if you could succeed by newsrooms embracing digital challenges, we would be a success.” But at an earlier Brady-Buttry collaboration, the freestanding digital TBD site in Washington, the money guys lost patience before the original timetable for the experiment was close to completion.

There was a more negative undercurrent in the Twitter stream from some savvy digital operating executives.

Raju Narisetti, the outspoken senior vice president, strategy, for News Corp, wrote that the episode is “a classic case of media critics and Twitterati enamored by ‘digital first’ talk & not looking at economics.”

In subsequent posts, he called Digital First “a house of newspaper cards” and faulted Paton’s note on Thunderdome’s demise as “all PR euphemism.”

Rafat Ali, who founded the Paid Content site (an early venture covering digital businesses) and sold it at a premium price, blistered Paton in a tweet, writing “at some point people have to stop worshiping false prophets.” Ali has moved on to an ambitious new travel information site, Skift.com.

Neither Narisetti nor Ali could be called stick-in-the-mud legacy nostalgists, as Paton has frequently characterized his critics. But they clearly see more pep talk than substance in what he has done at Digital First.

I have e-mailed Paton, who replied that he was willing to talk time permitting. I will add his comments if I get them.

In earlier conversations, before the second Journal Register bankruptcy, Paton was eloquent on the difficulty of shedding legacy costs and the inevitability of continued print advertising losses.

You could blame the failure of Thunderdome and perhaps the rest of the Digital First experiment on those burdens. Or on a bet-the-store reliance on big digital advertising revenue gains that have yet to materialize. Or both.

In any case, the takeaway, is that the Paton way, peppered with encouraging but selective growth statistics, didn’t add up to those who have seen the books in their entirety. Read more

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Oregonian Digital Shift

Advance defends bonuses for reporters who post frequently and join comment chains

Advance’s quota and bonus system at The Oregonian came in for heavy criticism last week, prompting a rejoinder from the typically close-mouthed private company.

In a note to senior executives shared with Poynter, Advance Local’s President Randy Siegel says that each newsroom “decides how to structure its own bonus program and what qualitative and quantitative criteria will be used.” He adds “every one of our local plans is different and will doubtless evolve over time.”

Siegel also includes recommendations on rewards from “an internal committee of Advance journalists.” It puts quality at the top of the list, and says prolific digital posters should not be considered “exemplary” unless their work rates high on that dimension too.

The Oregonian is in the middle of a switch having reduced print delivery to four days a week and giving higher priority to breaking news on the Oregon Live website. Willamette Week obtained a leaked internal memo establishing targets for daily posts by reporters and asking them to be first commenters on their stories. 

That prompted critical coverage from The New York Tmes’ David Carr and others, summarized well by Nieman Lab’s Mark Coddington (second item). A number of commentators including Poynter’s Sam Kirkland noted that even hot digital-native sites like BuzzFeed and Upworthy do not offer incentives rewarding journalists for traffic or number of posts.

Siegel’s note underlines a bit of a paradox in Advance’s operation. The digital emphasis is a top-down initiative that has been phased in the last five years at most of the company’s 33 papers. But tradition at the company had been to let individual properties operate in a very decentralized way with infrequent visits from corporate bosses and only an informal budget.

The Advance pattern of reorganizing as a digital company and dismissing some senior print journalists in favor of new hires for the digital sites came last week to The (Newark, N.J.) Star-Ledger. Unlike most properties that have made the shift, Newark will have no reduction in print frequency or home delivery for now.

While almost no other companies have made as drastic a print-to-digital shift, Advance has argued that scaling up digital and reorienting newsrooms to primarily focus on generating content for the digital sites is necessary. Siegel’s note says moves to accelerate digital growth are necessary “to offset the inexorable decline of our newspaper circulation and ad revenue.”

The full text of the note follows: 

The Oregonian Media Group in Portland, one of eleven Advance Local digitally focused news and information companies, received a lot of attention recently for a document its editors used to describe a new year-end bonus program that rewards journalists who do good work and engage with readers in meaningful ways.

Since the Oregonian program has stirred up some debate, here is some additional context:

Each Advance Local newsroom decides how to structure its own bonus program and what qualitative and quantitative criteria will be used. There is no corporate plan and every one of our local plans is different and will undoubtedly evolve over time.

Several months ago, an internal committee of Advance journalists put together these thought-starters on how to reward individuals who are excellent performers:

• QUALITY: Quality is an embedded, core competency. Quality is bedrock. As content staff adopts new forms of engagement and storytelling, a focus on quality should guide all work, whether it is live reporting on breaking news, smart aggregation of social media activity or longer-term enterprise projects. Quality is baked into the objectives, so simply hitting a number will not be considered exemplary performance.
• PRODUCTIVITY: How often does the employee post? And how often should that employee be posting? Those two questions begin a process of determining a productivity goal. A couple important points to consider:
» “Post” does not mean traditional inverted pyramid story. A post can be a video, an aggregation of links on a beat, etc.
» Consider how to set posting goals. The recommendation is to assign posting totals that relate to the expected productivity for a beat. They need a different posting goal. Peer groups and like beats – public safety, Tier 1 sports, entertainment, etc. – need goals appropriate for that group. Some will likely be higher than others.
• ENGAGEMENT: Engagement refers to the interaction an employee has with the public. For reporters, this can be how many comments they contribute, it can be how many comments their stories generate, or it can be how many times they participated in a public event. It might include social media activity. The key here is an audience focus: Listening and responding to what the audience wants leads to a more relevant report.

IS THIS ONLY ABOUT THE NUMBERS? Absolutely not. The primary goal always will be quality and impact in our journalism, and that is a topic built into competencies and objectives. At the same time, our ability to grow audience and engagement is directly related to our success as a business, and we need to build a culture that embraces growth and accountability.
We are fortunate that our newsrooms have the largest and most accomplished staffs in each of the communities we serve. Thanks to their commitment to quality journalism, five of the top 10 newspaper-affiliated websites in the U.S. for local market penetration are Advance Local websites, according to the latest Scarborough research. And our combined sites, which now reach 33 million readers each month, currently rank #8 nationally in comScore’s General News category, which includes sites such as Yahoo News, CNN and NBC.
As we scale our digital operations and accelerate our digital growth to offset the inexorable declines in our newspaper circulation and ad revenue, we will continue to hire more journalists and expand our news-gathering capabilities, including significant investments in the mobile and video platforms we need to succeed.  And our newsrooms will continue to measure their successes in a multitude of ways while rewarding the many talented individuals who are doing outstanding work and engaging more than ever with our rapidly growing audiences.

Longtime Oregonian editor Peter Bhatia announced earlier this month he is leaving for a teaching job at Arizona State University.

At a number of Advance papers including The Oregonian, the emphasis on digital has been accompanied by moving most of the newsroom to new, generic office space. That is meant to jolt reporters and editors from a print-first mentality that might persist in the cozy and familiar old quarters.

Whether the moves are working for readers or as a business remains an open question. On the one hand, the sites (nola.com is a good example) post breaking local news much more frequently and have seen audience growth and a younger demographic.

But for readers who prefer their local news report in print – still more than half according to a recent Newspaper Association of America analysis -- they have lesser frequency or convenience and may be pushed to the alternative of a digital replica edition online.

Growth of digital advertising generally has been disappointing for newspaper sites the last several years, with average rates continuing to fall.  Advance has not been specific about how digital ad gains compare with print revenue losses. There is no digital audience revenue because the sites remain free.

That may not be a huge issue. The real test will be whether Advance’s early swing to digital leaves the company’s sites and papers better positioned and more profitable several years hence.

Correction: The Oregonian’s print delivery is provided four days a week. An earlier version of this story included a different number. Read more

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Pew finds embattled newspaper industry still pulls in more than half of all news revenue

Pew’s 11th annual State of the News Media report, out this morning, offers fresh measures of news media revenue and news staffing at digital-only start-ups. Both findings are arresting for those of us in the news-about-news business but also shed light on the well-being of the industry as a whole.

Among the highlights:

  • The Pew research team attempted a revenue estimate for all the branches of the United States news industry it has covered in past reports. The surprising conclusion: Even though newspaper advertising revenue has fallen by half over the last decade, including subscriptions and other revenue, the industry still accounts for $38.6 billion of $63.6 billion in news revenue per year. That is roughly 61 percent of the total.
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At Newspaper Association of America conference, content — and passion — make a surprise appearance

I went to last week’s NAA mediaXchange conference in Denver anticipating I would hear plenty of talk of big data, native advertising, mobile apps and social media. And I did. A less expected discovery: the concept of focusing coverage in a given paper’s print editions and website on a handful of “passion topics” particular to that community is picking up steam.

Make no mistake. Advertising sales and revenue are still the main event when 1,000 business side execs and vendors gather. But having attended many an NAA or investors conference where news and journalism made only a cameo appearance, I am heartened to see distinctive content given its due as a strategic investment in the industry’s future. Read more

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Time to ditch uniques and page views for engagement in measuring digital audiences

When Nieman Lab’s Josh Benton asked me in December for a New Year’s prediction, I leaned toward the bombastic and led my wish list for 2014 as follows:

Ditch uniques and develop a better metric. Then-Newspaper Association of America president Mark Contreras was right when he made this case four years ago. It still hasn’t happened. One- or two-time visitors are not a business opportunity — they are an accident.

So we are two-and-a-half months into the year, and I am sorry to report that uniques and its evil twin, page views, are still with us — offered as the basic yardstick for digital audience for both individual sites and whole industries.

But I took cheer last week when three separate sources made the case that attention and engagement matter more.

Chartbeat CEO Tony Haile led off with an iconoclastic essay for Time.com titled “What You Think You Know About the Web Is Wrong.”

Chartbeat’s existence and success are themselves indicators of the imperative to get beyond clicks. Chartbeat’s products are real-time measures of traffic, time on story and time on site that editors rely on for decisions on how to play pieces and how long to leave them up in a prominent position.

In my recent profile of USA Today, I found that its national news desk, like many other digital operations, keeps a billboard-size display of Chartbeat indicators in plain view.

Haile’s whole piece is worth reading. His lead graf postulates:

We confuse what people have clicked on for what they’ve read. We mistake sharing for reading. We race towards new trends like native advertising without fixing what was wrong with the old ones and make the same mistakes all over again.

He continues his case that attention should trump visits and clicks:

At the core of the Attention Web are powerful new methods of capturing data that can give media sites and advertisers a second-by-second, pixel-by-pixel view of user behavior. If the click is the turnstile outside a stadium, these new methods are the TV control room with access to a thousand different angles. The data these methods capture provide a new window into behavior on the web and suggests that much of the facts we’ve taken for granted just ain’t true.

Other highlights:

  • An internal Chartbeat study of 2 billion visits found that stories with strong news content far exceeded clickbait in time spent.
  • Many people who share stories on social media do not actually read them. Ditto the recipients. The same internal research found that only eight of 100 articles read were accessed by Facebook and only one in 100 via Twitter.
  • Banner advertising is not as dead nor are native ads as vibrant  as current coverage would have you believe. Part of the reason, Haile said, is that nearly two-thirds of those accessing a home page go “below the fold” of the first screen to see what else is being featured.

Jeff Jarvis, with whom I don’t always agree, played off Haile’s piece in a BuzzMachine post on:

What the right metrics for media ought to be….How do we create positive feedback loops that improve the news not degrade it as uniques, page views and other relics of mass media have done?

Drawn from his persistent efforts at City University of New York to birth sustainable local news sites, Jarvis considers time spent (maybe efficiency summarizing news should matter too), then suggests several other measures of engagement: outcomes, follows, bookmarks, citations and embeds.

Finally my colleagues at Pew Research (whose annual State of the News Media report will be out a week from today) offered a study documenting what you might expect — direct visitors to websites spend more than double the time there than those who come via a Facebook referral, search or other side doors.

As this post is being edited and produced, I am on my way to Denver for the annual Newspaper Association of American mediaXchange conference. I will be moderating several panels and auditing the rest.

The great metrics debate is not formally on the agenda but may come up in segments on big data, a new American Press Institute study of audience behavior tracking news and another panel on advertisers’ perspective.

If I hear something new, I will report on it when I’m back. Read more

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