Content Bridges

NYT and the Bagel and Lox Paradox

Okay, let's go back to happier times. Say 1990. The world of newspapers looked good. Newsroom employment had just peaked historically at 56,900, a number it would not yet see again.  Daily and Sunday household penetration had stabilized at about 65%, after a long drop. Revenues and profits were good, presaging a great decade ahead. All we had to worry about was a downturn in the economy, but we knew there'd be another peak after a valley.

Say, we then heard about this great new idea. The journalism we create could be sent anywhere in the world, beyond the reach of our circulation trucks, freely read where little journalism had gone before, even penetrating those neighborhoods whose readership was low. It could be read on little, portable devices and in schools. You might even run across our stuff on cable TV or in an elevator.  Our audience could grow well beyond the one-sies and two-sies of traditional circulation sales pressure. William Randolph Hearst, Captain James Kirk and Alvin Toffler all rolled into one impossible fantasy.

That idea, seemed like  something suited for X-Files,  or some super-secret government  project,  or some cardboard lunacy of people like early Knight Ridder visionary Roger Fidler. We now know of course that it was a time of fetal Internet development.  In a  short decade and a half since then, the Internet has come to revolutionize the whole distribution end of our news business. Far from celebrating it, newspaper companies are coming face to face with their own mortality. One, Knight Ridder, has blinked, and in a whisk of time, has disappeared. Tribune has taken one look in the mirror, and dares hardly take another. McClatchy likes its latest reflection, but may pull the curtains on the next couple of quarters.

So as the greatest ability to find readers in the history of the printed world has become a reality, consider this irony: news companies are largely creating less and less in a time of more and more.

How much less?

Well, the New York Times' latest cutback, announced yesterday, gives us some new insight. In slashing production costs, the Times is joining much of the rest of the press in cutting page size. In cutting an inch-and-a-half per page, the Times said it would be devoting 11 per cent less space to news. Bill Keller, the Times executive editor,  said the company will add back more news pages to make up about half the difference.  Five per cent less news in print. Just recently, the Wall Street Journal announced it too was adopting the thinner profile,  resulting in a 10 per cent reduction in news space.

If you look at the newsprint consumption numbers, they are dropping quickly. Newsprint usage will come in around 10 million metric tons for U.S. papers, down from 12 million just six years ago. That's more than 15 per cent, of course some of that is space that was dedicated to ads. Newsprint usage of course shouldn't be the only proxy of news production, but it bears watching.

Newsroom staff -- even without accounting for dark art of churn -- will probably drop close to 53000 by the end of the year. That too is a 5 percent drop from that 2000 high.

So we'll say conservatively there's been a 5 per cent drop in news production.

Let's call it the Bagel and Lox Paradox. You know how over the last generation, bagels have beefed up, more air, more additives -- cranberries? -- and the smoked salmon portions have gotten smaller, as it's gotten pricier.

Consider the Internet the bagel, a seemingly  ever-expanding universe. Consider the lox the news and information -- the content we crave. Much more room on that bagel for the good stuff, but less good stuff going on the bagel. And as anyone who enjoys a good nosh knows, less is not more, no matter how you slice it.

The Bagel and Lox Paradox may also explain that neurosis, verging on dread, infecting the nation's newsrooms. It's that vague sense that something is going terribly wrong. Journalists want to fully participate in the country's life, bringing their skills to the world in constant change and creation, but they feel increasingly smaller, less important.

There are many good solutions out there for enlarging journalism -- embrace new distribution business models, brand more great content, re-wed online advertising to online content -- but time is running short to reverse the paradox. It's ultimately a question of market share, mind share and share of the civic conversation, a conversation that it couldn't hurt having over old-fashioned bagel sandwiches.

Does McClatchy Have the Platform It Needs to Build the Business?

At Knight Ridder Digital HQ at Post and Market in San Jose, the long waiting is over, kind of. The brushed aluminum sign, part of KR's once-proud branding effort, is being replaced by McClatchy Interactive West.  Given the magnitude of the transition, McClatchy is doing its best to expedite the transfer of the 20 KR city websites it retained to its own platform, the McClatchy Interactive Publishing System.

The real estate itself -- once the site of a old hotel, a brothel and to-to-the-point of the Wild West Internet , a pawn brokerage --will be vacated within 24 months. Over that time, McClatchy will move as much as it can to Raleigh, its current web hub. (Hear the NANDO echoes in the wind.) Some staffers, whose numbers have been considerably thinned by exodus to Yahoo, Google and start-ups, will move to North Carolina.

The platform transition is just part of McClatchy Interactive Chris Hendricks' difficult exercise. He's got to run and dance at the same time. Getting everyone in the company on one platform of course is essential, for cost, for ad and publishing efficiency and more.

More difficult is rejiggering the national/local equation. That issue has consumed the newspaper industry for a decade. Almost funny at time, it's been a frustrating exercise. On paper, it's simple.

Centralize the best technology nationally. Make one decision. Implement it as quickly as possible and as cost-effectively as possible. Maximize local ability to sell advertising, report the news people care about and represent community uniqueness.

In practice, it's an art form -- provably not a science -- that no one has gotten exactly right.

There is a growing list of what a city-centered, newspaper-powered, well-partnered website needs, but clearly the ability to widely enable user-generated content side-by-side the professional content is of the moment. Professionals who ignore intelligent amateurism -- that formulation of the group formerly known as the audience -- do so at great peril to what the Web is about.

News professionals can take a lesson from Yelp, now spreading its wings to 24 cities across the nation.

That S.F. start-up hosts more than 100k user reviews, going way  beyond restaurants to a complete city guide -- just the kind of things newspaper sites should have done well LONG ago. It's loose, not tight like the professional sites of newspapers. It has rules, but the rules aren't front and center. It encourages opinion and outrageousness. And it's contagious, personalizable and sharable.

It's one of the many things a McClatchy and its peers need to build in to a new platform. And: better search, better personalization, better entertainment databases, great contextual, pay-for-performance tools that work on a local basis, and lots more.

As McClatchy's stock rebounds from its KR sale finalization low, we can hope it is putting aside a few dollars for a state-of-the-art platform aiming more at 2010 than 1995. That's only four years away.

Media Giraffe: What is a Professional?

Kudos to Bill Densmore. 

I first met Bill, a veteran journalist, when he is showing his Clickshare wares, believing that, yes, we could charge for content and his system would do the bookkeeping. Well, the news content e-commerce game road is well worn, with Clickshare, Yaga and who knows how many others its roadkill. Now Google Checkout joins Paypal, and soon, they'll be coming trying out 21st Century content monetization models.

But Bill's reinvented himself, as all webbies must. He's now director of Media Giraffe, a University of Massachusetts-based project, aiming at this prize:

"an effort to find and spotlight individuals making sustainable, innovative use of media (old and new) to foster participatory democracy and community"

Last week, Densmore's first Media Giraffe conference drew about 200 participants. Sure it attracted its share of naifs and a few nuts ("why do you want my e-mail address and phone; who are you going to give it to," one hard-eyed backroom blogger blurted to a poor registration volunteer). Sure, it featured some Vermont high schoolers well-drilled in advocacy media, taught how to display their taught skepticism about Big Media Bias through the joys of Quicktime. Sure, it featured a bit too front-and-center, a one-sided, nostalgic view of how everything was great back in the Gene Roberts/Philadelphia Inquirer Pulitzer-winning days.

Still, you had the sense that the stirrings of old-fashioned Town Meeting civic involvement, nurtured on the base of two centuries' local politics, could be real. iBrattleboro has won many fans, since its launch three years ago. Independent of the local daily, the Reformer (owned by MediaNews), the site brims with local vitality and the weird stream-of-consciousness conversations that are part of daily individual and community life. Apple pie (literally) to Fourth of July photos to meetings of a community/police panel. Count the stories, posts, comments and links, and you see that for a community of 12,000, someone left a light on.

By way of contrast, a daily newspaper editor from another part of the country, suggested that the MediaNews/Scripps community product -- Your Hub -- wasn't quite working right in his community. "It's too disconnected from the paper." Said another seminar participant, "it looks like it dropped in from another planet."

What is it about organic sites? If they are really organic, and have decent functionality, they will spread -- virally, by the Web itself, but as importantly by good old word-of-mouth in the community. People do truly hunger for community, and believability. With only 31% of people in a recent Gallup Poll saying they respected newspapers (unclear whether they were opining about their local rag or the big bad National Media), it's quite a conundrum. How could a newspaper company really promote a community site and get enough out of the way to make it work?

And that's what worked about Media Giraffe. Organic in a granoley-web sense.

What's curious is the intense interest of amateurs  in craft questions that should be the basis of fiery newsroom discussions, but often aren't.

• What's the new ecology of the newsroom? In other words, how do we blow it up and make it 21st-Century ready?
• "What is professionalism?" in age of rampant amateur enthusiasm for filling in the holes of what's happening, asked the esteemed UNC journalism prof Phil Meyer
• How do we open the windows, if not the doors, offering a new level of "transparency", said Pew's Lee  Rainie.

These are among the big questions that should be the stuff of newsroom brown bags, not just the fodder of alternative media conferences held on college campuses.

Tribune: Requiem for the Second Amigo?

Never let ‘em see you sweat. It’s an old maxim, and it’s one that is doubling down in the age of newspaper high anxiety.

You could almost see Tribune CEO Dennis FitzSimons sweating over the Internet on May 2. On that day, FitzSimons conducted the Tribune’s annual meeting.

The greatest clue of what was to come in next two months was FitzSimons’ choice of the setting of the meeting site. It was held right there at the mothership, in the legendary Tribune tower 

on Michigan Avenue, in a conference room. The CEO made the point, very publicly, that the company had saved $200,000 by holding the meeting there, instead of following its usual practice of renting a grander location with multimedia presentation.

The Tribune, a company not known for its skimping, had begun to skimp. The company has owned the Chicago Cubs and enjoyed three skyboxes at Wrigley, temple of baseball. A skybox for the Chicago Tribune. A skybox for WGN. A skybox for Tribune Media Syndicate. Among Knight Ridder people, whose idea of annual conference was to meet in a windowless hotel conference room for at least 10 hours a day, the joke was that the Tribune publisher and editor meetings had a hard time fitting in a business session between morning golf and evening drinks and dinner.

Flash forward two months, and you see a story unfolding parallel to Knight Ridder’s screwball tragedy demise. You also see the real possibility that in a year’s time, the industry’s #2 and #3 companies – and its Internet leaders – will be relegated to journalistic trivia quizzes. You see the great potential of an unprecedented restructuring of the journalism business in the
U.S. and you see the Tribune's much heralded strategy falling apart at the seams.

You’ll recall that KR’s leading institutional investor publicly pressured KR last November. The KR board made the expected statement: it would review the investor’s concern, but saw no immediate need for action. From there, the KR ball of string rapidly unraveled. Other institutional investors joined a call for action. Defenders of management were few and far between. Management failed to make a compelling argument for its own vision and ability to execute in this tough time. Then – it seemed so quickly – the board folded and the company was up for grabs. The Ridder stiff upper lip: no bang and no whimper.

FitzSimons’ path has varied a bit. He acknowledged the company’s soft revenues and flagging share performance, lagging his newspaper brethren, who in turn have lagged the market over the last three positive market years. He announced an ambitious buyback of Tribune stock – taking back in 25% of the company’s shares – and the sale of some non-core assets. The unannounced goal: avoid the KR death-spiral and get Tribune ready to become a smaller, but still independent company, rallied around the Chicago Tribune and its “Chicagoland” holdings.

At the meeting, FitzSimons acknowledged the KR elephant in the room. He said that the large blocks of stock owned by friendlies –McCormick Tribune Foundation in Chicago and the Chandler Trusts in L.A. – lessened the chance of a forced sale.

"That makes it a little less likely for us to face the situation that Knight Ridder did, but it is possible," FitzSimons said. 

What the CEO didn’t see coming was that his acknowledgment would turn a key friendly – the Chandler Trusts and their three (of 11) board seats – against him. Or that institutional investors' unrest would increase. So last week, FitzSimons saw that his tender offer to shareholders – offering buyback of shares slightly above the then-market – was undersubscribed. He moved ahead with his own corporate buyback of publicly traded shares to get to his 25% buyback number, but further damage had been done. 

The market has said this: we think Tribune broken up into parts or sold whole is worth more than you are offering us. Leading that charge have been the Chandlers, the family that owned the L.A. Times (and then the Times Mirror chain) and sold it to Tribune in 2000. That purchase has been an open sore for Tribune, with wide industry acknowledgment that the Tribune never could truly bring the Times particularly and other papers (New York Newsday, Hartford Courant, Baltimore Sun) fully into the fold. While the Tribune talked publicly about the synergies of its bigger newspaper holdings and its combined newspaper/TV holdings in L.A., New York and Chicago, the industry snickered that the reality was more successful insurrection than synergy.

Last week, we heard that the Chandlers, who now own about 14% of Tribune, were actively interviewing suitors to buy the L.A. Times – among them Ron Burkle, unsuccessful suitor of the McClatchy auction and entertainment mogul David Geffen.  In addition, the Chandlers are talking with the ubiquitous private equity companies still dancing around the industry’s funeral pyre.

There’s little doubt that Tribune will soon become – at best – a smaller company. It has already sold its Atlanta and Albany TV stations , and still has numerous struggling CW (formerly WB) stations to unload. Ernie Banks’ – Mr. Cub! – name has already been appropriated by two potential ownership groups, offering to salve FitzSimons’ wounds with a half a billion dollars in exchange for the perennial loveable loser.

Maybe, FitzSimons makes a deal with the Chandlers to relinquish the Times – a paper with about the lowest household penetration of any large metro – and can save his company. Maybe not.

Consider this irony. Now-gone Knight Ridder and Tribune have been two of the
Three Amigos, along with Gannett. It’s not a name they gave themselves, but one their industry brethren pinned on them. Those “non-amigo” companies – the McClatchys, MediaNews, Belos, Advances, Hearsts and Scripps of the world – believed the Three Amigos distanced themselves from the rest of the industry. They saw evidence that the Three Amigos were willing to build Internet businesses – particularly CareerBuilder – that would encroach on the non-amigos’ own turf and customers.

So two of those amigos, two companies whose advocacy and investment in Internet businesses, have lead the industry are the first confronted.

Why?

Well the reasons are numerous.

Both are single-class publicly owned companies – particularly vulnerable at this time in this market. The betting here, though, is that the challenges are as these two basics: strategy and execution. Both companies wagered hundreds of millions of dollars in the new economy, with mixed results. In the end, industry historians and analysts may look more to the business essential of execution as the culprit. Both KR and Tribune raised the stakes with their profile and their investment.

In the end, investors take a cold, hard look at those leading that charge.

My old friend Walker Lundy once demystified the process of who-got-ahead in corporate news decision-making, and who didn't it. "They like the cut of your jib, and you're golden. If not, you're out."

So those investors are doing a bit of their own jib measuring. If they buy the leadership’s strategy and execution, they stay in. If not, they are quicker than ever to cut their losses and force profound change. Replace Tony Ridder with Gary Pruitt for instance. When Dennis FitzSimons looks in the mirror today, which of those two personalities does he think he most closely resembles?

 

 

 

U.S. vs. New York Times?

Are we there yet?

Have we reached a turning point in relations between the press and those in power? Professional and amateur watchers of the Presidency and the press have well documented the icy relationship between this Administration and this press corps. We’ve seen a series of skirmishes, perhaps born in the careful calculations of Karl Rove, perhaps in the unprecedented Supreme Court-induced birth pangs of this Presidency. We've seen increasingly ugly charges, burnished on the platform of terror in New York and mayhem in Baghdad. Somewhere, early on, the cautious and wary trust usually tested between new administrations and the press corps covering them developed significant and then dam-breaking leaks, figuratively and literally.

Judith Miller. Valerie Plame. Joseph Wilson. Howell Raines. Alberto Gonzalez, Robert Novak. James Risen. These names elicit memories of the last six years -- yes, it’s been that long; we’re now closer to 2010 than 2000.

Of course, they also pinpoint how much the battle has come down to this: George Bush vs. The New York Times.

Now, with the actions in last days of last week – ironically just below American Independence Day – we see how much that confrontation assumes a critical profile.

Take these two events:

• On Thursday, the U. S. House of Representatives voted to call the press to task, accusing it -- meaning the Times -- of putting American life at risk.
• On Friday, The New York Times ran its story, covering Thursday’s U.S. Supreme Court decision that the Bush Administration had overstepped Constitutional limits in ordering military tribunals for Guantanamo prisoners. The treatment, shown here, bannered the news and minced no words in identifying the President’s involvement. Much other newspaper Page One treatment was less pointed.

This is a pitched battle, in the making for years. It’s also one that is playing with fire. What kind of fire? An unpredictable one. Consider that the woeful approval ratings of George Bush (33%) and of the press (31%) generally are about the same. We’ve arrived at a fragile place.

We have a President, backed by a highly partisan House majority, who are willing to go to the political barricades in pursuit of their ends, paying lipservice to American freedoms when they bang the drums for Iraqi “liberation” while passing resolutions implicitly questioning the patriotism of the press when it informs the public about the government’s own actions.

We have a paper that has become, especially in the Internet era, the very definition of this nation’s “national paper”. It’s a paper that has managed to shepherd its prodigious resources – more than a thousand people in the newsroom – in this shaky time when newsroom cuts are announced at large metros every week. (Witness the recent Washington Post cutback of 10% of its newsroom.) It’s a paper that has redoubled investigative efforts after its early Judith Miller-era embarrassments. Now with the demise of the Knight Ridder Washington Bureau, which had been a source of gutsy coverage of the Administration and the war, the Times looks increasingly lonely.

Predictably, it's stoking the fight, practically becoming The Loyal Opposition. Times Executive Editor Bill Keller said Sunday morning that the House's action was that of a party firing up its base.  Times columnist Frank Rich,  who eviscerates the Administration weekly with the smart bombs only a former theater critic could craft, weighed in in the Sunday Times, drawing links between the war and the House action: "Can't Win the War? Bomb the Press!"

It brings to mind a story I heard last week on NPR.  It backgrounded the G-8 meeting to be held this week in Moscow and chaired by Vladimir Putin. It detailed Putin’s consolidation of power, and talked specifically about how the press, briefly semi-free in the Gorbachev/Yeltsin era, was now being considering “dissident.” It’s a term we recognize all too well from the Soviet era and that should send even more chills down than the necks of the Committee to Protect Journalists, necks already sufficiently cooled by recent press losses around the globe.

Dissident.

How close are we to the American press being so labeled – with that word or other similar code ones – when the U.S. House says that it “expects the cooperation of all news media organizations" in keeping classified programs secret.   

How many members of the American press would be willing to accept the "dissident" label….and to continue doing their jobs? So, are we there yet? Or how close, are we?

We can’t expect things to get any less contentious as we head into the permanent campaign that will stretch ‘til the brink of 2009. Journalists, including those of us who traffick in the impacts of the Internet on the business we love, had better pay attention, speak out as appropriate and keep their eyes on the biggest picture of all in this era of press transformation – the role of the media in serving as a check on the excesses of government.