THURSDAY, MAY 15, 2008
Posted at 6:04:12 AM
First Prize for Innovation: Spokane
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TWO MORE
INNOVATION WINNERS |
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There were two more winners in the first INMA innovation contest, co-sponsored by the Switzerland-based PubliGroupe, a similar association:
*The Toronto Star print edition placed second for a three-section design with 24 modular advertising sizes. That is combined with differential pricing by section, a concept that U.S. publishers have been considering, but generally not implementing, to spread ads more evenly through the paper.
*Our colleagues up the street at Poynter's St. Petersburg Times won a related prize judged by INMA members for creating and promoting "The Hub," a Web site for high school sports -- thus reaching a younger audience.
Also in the spirit of things new, INMA has dropped Newspapers from its middle name and is now the International Newsmedia Marketing Association.
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The newspaper industry may be shrinking, but the high volume of self-congratulatory writing and reporting contests rocks along unabated. So I found it notable last week that the International Newspaper Marketing Association has inaugurated a new contest for innovative business models –- you know, the ones that will support continuing news investment.
And the winner is: The Spokesman-Review in Spokane, Washington, for an ingenious variation on local search, a business directory that includes an informative free listing and lots of opportunities for upsells.
The twist at Spokane's BizFinderNW.com, is to offer a listing with address, store hours, a map and a photo for free. Businesses can amplify on the listing or buy a display position if they wish. Like most local search ventures, there is room for user comments, though no news content per se.
Kathleen Coleman, The Spokesman-Review's director of digital business operations, told me in a phone interview that publisher W. Stacey Cowles has had his eye on the yellow pages business for some time. With a template from vendor Edirectory, Coleman said, the company did a "low-cost, build-it-ourselves" design, generated 25,000 listings and now "owns the rights to tweak the software."
The family-owned Spokesman-Review has won Digital Edge and Online News Association prizes for the general excellence of its Web site, which Coleman said draws 500,000 unique visitors a month. BizFinderNW has a prominent anchored spot at the top right of the site's home page to build traffic.
The directory has only been in business since January so the numbers to date are modest: 4,000 unique visitors and 30,000 to 50,000 page views per month, 25 "enhanced programs" and a dozen display videos. On the other hand, about 3,000 businesses already have a photo accompanying their listing. Hard start-up costs including design, list acquisition and promotion were held to under $10,000; ad contracts to date are twice that.
As the INMA judges said, there is a lot to like about the venture's positioning, tapping into both local search and video, considered to be high potential growth categories and later to queries from mobile devices.
BizFinderNW also addresses the so-called "decoupling" problem: online display ads do not command the attention or rates of print and can be annoyingly distracting (like the notorious dancing mortgage rate offerings). If online users treat the medium's advertising more like the yellow pages with a particular destination in mind, why not use part of the site to open into a virtual yellow pages?
The BizFinder model "taps into newspapers' unique strengths," the INMA judges wrote, "established commercial relationships with local businesses and credibility with local audiences." If the pioneers taking enhancement packages see results, sales momentum ought to follow.
Coleman said the pre-launch preparation included a pricing structure slightly below established yellow pages competitors and an emphasis on comprehensiveness to outflank similar efforts from other local media outlets.
Coincidentally the Spokesman-Review foray into the directory business dovetails with a recent study of yellow pages by Deutsche Bank Securities analyst Paul Ginocchio. His international survey found the business migrating quickly from paper to online in fairly direct proportion to broadband penetration.
Looking at the United States specifically, Ginocchio comments that the established companies retain an "inertia" base of loyal print customers. But the companies will be handicapped in managing a transition to online by weak brand recognition and heavy debt loads.
In sending me some operating stats, Tyler Mack, who directs sales for the site, made the same point in salesman-like fashion, "I'm certain that this program will continue to grow in both popularity and ad revenue for us," he wrote in an e-mail. "It makes too much sense not to. With the huge traffic source we have in S-R.com and such a nice easy-to-use system as this, why would anyone use anything else?"
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THURSDAY, MAY 8, 2008
MinnPost: Nonprofit News Site Reaches Six Months
The notion that the nonprofit/philanthropic sector could pick up some of the slack from shrinking newspaper newsrooms has been in the air for several years now.
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MinnPost.com was first to the plate last Nov. 8 to test the proposition in practice with a five-day-a-week online news magazine. Founder Joel Kramer, who had retired as publisher of the
Star Tribune eight years earlier, pulled together financing from various donations and assembled a mainly part-time staff, heavy with experienced professionals bought out or laid off by the two Twin Cities dailies.
I asked Kramer in this e-mail interview how the venture has matured in six months and what he has learned. (Disclosure: Kramer and I worked together on our college paper and have been friends for more than 40 years).
Overall, how is MinnPost doing six months on?Kramer: Great. The public response has been very gratifying. Traffic is strong, membership revenue is growing, and after a slow start advertising has picked up substantially in the past month. Our original plan called for achieving break-even by 2011, and the results to date suggest that we can do it -- assuming we can raise the money we need to sustain us until then.
What has surprised you most? Kramer: How hard it is to start a news organization from scratch. Until MinnPost, my journalism career was spent at newspapers that were founded before I was born.
Your contributors and full-time staff are mostly experienced professionals, many who took buyouts from the two Twin Cities papers. Is working part-time at freelance rates doable for the contributors, or are they drifting off to better paying full-time employment? Kramer: The freelance model appears to be working very well. Less than a handful of our original contributors have left us, and we have added many new ones, including younger ones, so we have more contributors today than when we launched. The freelance model enables us to feature a large number of talented people, with their different areas of expertise. We have, however, moved two reporters to full-time work, and we may do more of that in the future.
Your bio on the site discloses your political contributions, the liberal policy think tank you founded and your ill-fated run for lieutenant governor. But how are the contributors able to avoid conflicts of interest between what they write about and what else they do to earn a living?
Kramer: Very few of our contributors earn a living in ways that conflict with their reporting and writing for us. On a few occasions, our editors have worked out with writers that they should not cover certain subjects because of a conflict. Otherwise, we simply opt for transparency and disclosure.
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Kramer: Three pieces stand out. (1) Eric Black's
scoop on the staff turmoil in the office of Minnesota's attorney general; (2) John Camp's
series of pieces from Iraq on the daily life there of Minnesota National Guard troops; and (3) Doug Grow's
profile of the state's Democratic superdelegates, the first piece of its kind in the market. One of the exciting things about MinnPost has been watching writers develop a style that merges serious reporting and analysis with a more informal Internet style.
This recently posted piece by Eric Black is a really good example, in my view, of MinnPost at its best.
You said in the early going that you had no designs in knocking off the dailies. But by my reading MinnPost is competitive on some stories --- like Al Franken's recent tax troubles. How would you compare MinnPost now to the papers and their Web sites? Are you some people's first read?
Kramer: Our target audience is news-intense people who care about Minnesota. By definition, news-intense people go to multiple sources for news. We may be some people's first read, but our goal is to be read most days by most news-intense people interested in Minnesota, along with whatever else they read. We absolutely want to break stories, and we do –- there are many examples of stories where the metros have followed our lead. And we want to go deeper than the dailies on key stories that we didn't break, and we do. But we are not aiming to be as comprehensive as the dailies. We don't promise to cover every story; we do promise that whatever we do will be done well.
The site seems very conservative on user-generated content -- accepting "Community Voices" columns but little else. As social networking design has improved and outlets are extracting more than pet pictures and anonymous rants from readers, are you planning to build more interactivity? Or do you like where you are?
Kramer: Yes, we would like to add more interactivity, as long as we can do so consistent with our commitment to high quality. We're working on that.
You told me you need a second round of start-up donations, comparable to the first of $1.5 million, to get to sustainability. Assuming you are successful, is MinnPost unique to the state and the opportunity created by the travails of the dailies? Or do you think it would be a sustainable model elsewhere?
Kramer: The travails of the dailies in the Twin Cities are far from unique. Every market is different, in terms of the news intensity of the audience, the range of competitors, the culture of philanthropy, the talent level of the bought-out journalists, and so on. But I do think that MinnPost could prove to be a model of how a metro area or state could sustain high-quality journalism as a community asset, as the for-profit model deteriorates.
Posted at 11:00:26 AM
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FRIDAY, MAY 2, 2008
Posted at 10:01:23 AM
What Should a Newspaper Cost?
What should a newspaper cost in 2008? Two dollars? A penny? Different amounts for different people? I have heard all three answers within the last month -- evidence that the standard 50 cents may be part of what is broken in the industry's traditional business model.
Start with the case for a substantially higher price. Most papers abroad cost two, three or four times the going rate in the United States. Most still receive slightly more than half their revenue from circulation -- here it is 80 percent advertising, 20 percent circulation.
My trips to the corner store on a recent holiday junket to London typically set me back about $3.50 for two of the quality dailies. I am hardly typical, but I certainly didn't balk. This was the week of Benazir Bhutto's assassination and there was a lot to read in these papers. The
Financial Times, in particular, pretty well defines a daily you would pay $2 for (its cover price in the United States).
I floated the higher prices idea at a lightly-attended session on good ideas from abroad early in the recent Capital Conference in Washington. I got a strong second from international consultant Jim Chisholm. Later, at a session of his own, Chisholm, a cheeky Brit, chided American publishers for fielding "the cheapest papers in the world."
You could defend our system as different but effective back in the day when classified revenues were flowing like water and 20 percent margins were a slam dunk. But those times are gone and not coming back. Time was too when a newspaper cost the same as a cup of coffee. You know what happened to coffee prices if you purchased a $4 latte or even a 7-Eleven small regular today. But most newspapers have stubbornly held back from charging more.
Writing in the same week as a fresh report of big circulation losses, I am well aware of the counter- argument. Even at low rates, the demand for newspapers is price sensitive. For subscriptions the tab is higher, and readers feel guilty (and now environmentally irresponsible) if unread issues stack up. So abrupt increases could backfire.
Nonetheless a few papers are taking the plunge. The
Austin American-Statesman went to 75 cents a copy and $4.99 for seven-day delivery April 1, the highest price in the Southwest. Harry Davis, vice president for circulation, cited the rising cost of paper and gasoline, among the factors for asking readers to pay more.
The
American-Statesman is also getting notice for
a pilot program offering new subscribers a $2 a week rate if they lock in for an entire year. That is a direct attack on the churn rate on most trial subs (often 80 percent), which in turn forces papers into expensive direct marketing programs to keep up numbers.
There are other isolated signals that more realistic pricing may be a trend.
The Boston Globe has been at 75 cents for a while.
The Washington Post, long a practitioner of the low price/high household penetration model, went from 35 to 50 cents December 31 -- and I bet they don't lose 40 percent of single-copy sales.
USA Today increased from 50 to 75 cents several years ago and remains one of the few American papers holding circulation totals steady. (Former Gannett CEO Al Neuharth was long an advocate of charging more).
While some are gradually upping prices or experimenting with mixed models like the one in Austin, I also see a counter trend in some of the
new Audit Bureau of Circulation rules. Starting in the April 2009 period individuals who pay anything for a subscription can be counted as paid -- hence the penny-a-day option. ABC is also redefining as paid sending Sunday-only or weekend-only subscribers the rest of the week's papers free for up to 120 days (though only if they ultimately accept an offer to pay something for an extension).
Poynter librarian/historian David Shedden reminds me that
the Penny Press of the 1830s was a significant publishing phenomenon. Charging a penny versus the prevailing 6 cents, entrepreneurs captured a working class audience that stayed with newspapers until well after World War II. But that was then and this is now.
The Newspaper Association of America does have some fresh research suggesting that readers of discounted papers spend as much time with an issue as those who pay full price. But I am dubious. The super discounts seem reminiscent of the pre-Joint Operating Agreement days in Detroit or Denver when the competing papers had vastly inflated their circ numbers with low-cost and no-cost subs. Once the JOA papers began charging, these "readers" quickly peeled away by the hundreds of thousands. So it's not so clear that anyone -- least of all advertisers -- was benefiting from giveaway subscriptions except the newsprint suppliers.
Making the case for charging more, I recognize that, like other business model changes for the industry, this one would need to take place by degrees over a period of years. Already, though, there is talk (explicitly by Gannett in a December 2006 presentation to analysts and investors) that the print edition of the future will be mostly (but not exclusively) for older, more educated, more affluent readers.
If you suspect I have a hidden agenda here, I do. I hope as they consider more aggressive pricing, newspaper execs will ask themselves hard questions about what value needs to be built into a paper for which readers who prefer print will pay, $1, $1.50 or $2. It is a question the
Financial Times, for instance, has already asked and answered.
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TUESDAY, APRIL 29, 2008
Posted at 3:35:13 PM
The Worse News on Newspaper Audience
You thought yesterday's circulation numbers were bad? Here is some related, and to me more discouraging, news: The total audience for the typical metro daily's news report, even including online-only readers, is not expanding. In fact, it appears to be contracting.
Six months ago the Newspaper Association of America, the Audit Bureau of Circulations and Scarborough Research
announced with a flourish a new measure of total reach with 200 initial newspaper participants. The figures were updated yesterday and can be found by registered users in the bowels of ABC's Web site, but none of the sponsoring parties put out a news release this time.
You have to suspect that in this instance, no news is bad news. Indeed, a separate Scarborough study,
Newspaper Audience Ratings Report 2008 [PDF], released April 22, shows that Web-only readers add just modestly to the news audience of the typical metro daily. And at most papers, that total audience has declined rather than increased since Scarborough's first report in this series a year ago.
The explanation, according to Scarborough senior vice president Gary Meo, is that while online audiences are growing at a healthy pace, the growth is on a much smaller base than print readership. Hence that growth online, even in double digits, can't make up for thousands of lost print readers represented by a few-percentage-point drop in circulation.
That echoes
the observation I and other analysts have been making for years about online advertising revenues. They are growing at a healthy rate, but it will take a decade or more to make up for the business falling away so quickly from print. The Scarborough reports are the first I have seen that establish the same pattern for news audience.
The 2007 and 2008 reports both show that some stars among regional newspaper sites -- Atlanta, Boston and Phoenix -- reach as many as 16 to 18 percent of adults in their designated market areas per week. Penetration of 6 to 10 percent is more typical.
But even the stars are adding only 5 to 6 percentage points in unduplicated audience to the print edition's weekly reach. An addition of 1 or 2 percentage points is more common.
With a few exceptions (The Atlanta Journal-Constitution, for one), the 2008 totals for overall audience are down from 2007.
Another interpretation of the data is that most local online readers are at least occasional print readers as well. "And that's not necessarily a bad thing," Meo said in a phone interview. Advertisers might want to reach the hybrid reader with the right message both places. "It is an argument we at Scarborough make," Meo said, "but I haven't heard much of it in the industry."
That's probably because both the NAA and newspaper companies are sticking to their story that the
"total footprint" of all their products on all platforms is expanding. Counting specialized Web sites like those for moms, hyperlocal sites and niche print publications, total audience may be bigger. (And the Scarborough study does not measure the handful of youth-targeted or Spanish language dailies, which do capture additional news audience.)
Still, I take these figures as evidence that newspaper organizations are "following their readers online" only if you are talking about those readers who use both platforms regularly.
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FRIDAY, APRIL 25, 2008
Posted at 3:51:00 PM
The Dog That Didn't Bark: Newspaper Buyers
You don't need to practice sophisticated content analysis like my friends at the Project for Excellence in Journalism to figure out the industry newsmaker of the week. First Rupert Murdoch
deposed Marcus Brauchli, the managing editor of the
Wall Street Journal. Then he turned around and
offered $580 million to buy Newsday, a nice fit with his perennially money-losing
New York Post.
But I am left wondering whether the Newsday bid (with a counterbid expected from Mort Zuckerman, owner of the New York Daily News) proves anything more than that there is still a market for newspapers -- in certain special circumstances.
Sherlock Holmes famously cracked the case of "Silver Blaze" by noting the "curious incident of the dog" -- curious because the dog did nothing. And with dozens of papers openly for sale this year, there has been little woofing at all among potential buyers.
It is early to say that there are no buyers left. In the best of times, the sales process typically takes four to six months. It is fair to say, though, that as spring turns to summer and summer to fall, we should get a definitive read on whether there are buyers, even at depressed prices, and who those buyers might be.
A short roster of available properties:
- The remaining community newspapers (formerly Ottaway) still owned by Murdoch's News Corp. and targeted for eventual sale since before the deal closed in December 2007.
- Landmark papers in Norfolk, Roanoke, Greensboro and elsewhere that went on the block at the beginning of the year.
- The Portland Press Herald and Maine Sunday Telegram, that state's largest newspaper.
- Any or all of the 22 Journal Register dailies, as the company's distressed stock has fallen to 35 cents a share.
- The Daytona Beach News-Journal, crippled after appeals failed earlier this month and left family owners a judgment they cannot afford in their long-running legal dispute with minority owner Cox Newspapers.
Dissidents who have just gained seats on the boards of The New York Times Co. and Media General have indicated they would like to push for sale of properties like the Times'
Boston Globe or Media General's newspaper-TV station-online cluster in Tampa.
Gannett used to be first in line for such deals, but it has reduced its newspaper holdings by 10 this decade and expresses only faint interest in old media acquisitions. MediaNews, McClatchy, Lee and GateHouse are digesting the debt from recent acquisitions and unlikely to assume more. By my reckoning only Hearst remains in the buying mode, having bought papers in the wealthy Connecticut suburbs of Greenwich and Stamford from Tribune last fall.
A local investor group in Philadelphia and a private equity firm in Minneapolis-St. Paul have admitted to an urgent cash squeeze as revenues and earnings threaten to plunge below what is needed to meet debt payments. Hardly an encouragement for other such groups to come forward.
Turbulent ownership remains one of the industry's most important stories in 2008. For now the headline continues to be the nothing that is happening at most properties for sale.
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