Content Bridges

Sunday Most Threatened in ABC Report

As the six-month ABC circulation numbers become official today, we see how evenly distributed the pain is, all over the country. The overall pain: daily down 2.1%, and -- most ominously -- Sunday down another 3.1%

Not much is working. Gary Pruitt’s strategy of getting out of higher-cost, lower-growth markets hasn’t helped McClatchy (down 3.6% daily and 3.9% Sunday) much. Lee’s strategy of massive staff retraining and marketing the hell of niche products maybe meant  less decline (.3 percent daily and 1.3 percent Sunday). Both companies – which analysts and investors saw as the prettiest of a plain-faced lot of publishers not long ago – have seen share price plummet. 

In looking at the numbers, we see:

• Problems across the sunbelt, as the Sunday numbers take your breath away. Down 10.1% at the Miami Herald. Down 13.3% at the Dallas Morning News, 7.2% at the San Diego Union-Tribune.

• Losses at two papers critical to our national reporting, especially as major metros cut  back on their own national and global coverage. The Washington Post lost 3.2% Sunday and 3.4% daily.  The New York Times lost 3.3% Sunday and 1.9% daily.

• The San Jose Mercury News sees a 4.9% daily decline and 4.4% Sunday loss -- those in a local economy that’s chugging along ahead of the pack. Recall that the Merc already has cut about one-third of its newsroom staff since 2000.

• Yes, newspapers are making a point of total reach, adding up paid daily, niche print and online. The problem though is that the online isn't monetizing fast enough to offset print losses, even as media buyers struggle to make sense of what that total reach really means.

The bad news runs the table.

For the industry, it’s water torture. In each of the last 5 reporting periods, stretching back to the end of ’04, we see the effects of the drip. At least a 2% drop in Sunday (okay, a 1.9% in there somewhere) and daily each period. The foundation rock of paid circulation has been dented for decades by little drops. TV, cable TV, busier two-career households, the endlessly frustrating “no-time-to-read”.  But the Internet spigot really poured in on recently. Other contributors to the current decline: continuing cuts in third-party and farther-flung circulation.

Whatever the many causes, the dent is now a hole, a hole in the paid circ mass market that has long sustained the industry’s business model.

Newspaper revenue is largely based on delivering a massive market of local attention – delivering impressions. It’s no accident that the 1Q earnings reports showed double-digit declines in classifieds and declining retail and national numbers. There’s a direct correlation between that revenue decline and toll of circ shortfalls, and media buyers are connecting the dots.

The industry’s got to be most concerned about the publicity of this further Sunday decline, down 3.1% on average. 

Sunday has increasingly become market day for newspapers, with many earning more than half their ad income on that single day of seven. Sunday circ, in this report and in previous ones, is heading downward even faster daily. That’s an overall problem, but one with a specific concern: preprints. The Sunday circulars have been the part of the ad pie least affected by Internet competition. Now as everyone from Google to Spotrunner targets niches, and retailers see increasing alternatives to mass-is-mass preprints, that business is threatened.

Really, today’s report offers no surprise. But, if possible, it adds even more urgency to the transformation ahead.

 

 

KR's Sign Lives On

For the fraternity of KR alums, and glad-not-to-bes: Another update on those Knight Ridder signs towering across downtown San Jose, from the site that covers the KR signage better than all others, Content Bridges. Post One. Post Two. This morning's Mercury News reported that Accenture was leaving its Palo Alto digs for the building formerly, but yet still, known as the Knight Ridder building. Accenture is taking 32,000 square feet in the "Class A" building. But as the building owner's policy has it, that's not enough to earn naming privileges. The building's owner, Forest City Commercial Group, is holding out naming for someone taking 60,000 or more square feet -- or someone who will pay a premium just for the naming rights. How long might the signs --1000 sq feet each, 57,000 pounds apiece, flanking the building's top, facing east and west (recalling, perhaps, that at one time the sun never set on the KR empire)?

User Gen & Money: Quotables

Social Media and Economics. Almost an oxymoron, as the galloping world of user-generated content, participation media – whatever – has captured public imagination and investors, with business models few and far between. 

So give PaidContent.org's Rafat Ali credit for planting the two together in the soil of the Beverly Hill’s Beverly Hilton, with his Economics of Social Media conference held today. Plainly there are lots of seedlings here, some sprouts worth noting, though no previously invisible trees emerged. More detail on the shrubbery later.
 
The questions were right – Social Media and …..Marketing, Hollywood, News, Music, Mobile, Deals. And some of speakers provided an insight or too along the way.

Notable and Quotable: 

Justin Hirschhorn, of Sling, on dealing with big company thinking  as compared to start-ups: “It’s unbelievable sometimes. It’s all about the quarter, the EBITDA and then you’re in a Fellini movie.” And on an acquiring company knowing how to use the work of the company it’s just bought:  “Integration ends with the press release.”

Esther Dyson, investor and pundit, on finding business leaders for companies in the developing world: “If you want a CFO here, you can go down Wilshire Boulevard and get three of them out of their BMWs. In India or in Russia, it’s a lot harder. There are thousands of Russians on Linked In, but not many who know how to use QuickBooks.”

Barak Berkowitz, founder of Six Apart, on what the user-gen revolution enables: “ Record your life. Store your life. Share your life.”

Michael Birch, of Bebo on the issue of money: “Social media companies are not focused on revenue. We’re focused on building product, building audience.”

Simon Assaad, of Heavy.com: “Marketing is creating a conversation between two interested parties. There’s no purpose in marketing to someone who is not interested.”

Boffo Beltway Antics May Be a Bellwether of Media Change to Come

Are we witnessing the passing of dinosaurs or is that an Internet-induced optical illusion? 

Take David Carr’s to-the-point column in the New York Times on Monday. He covered Saturday night's White House Correspondents’ Association dinner, the annual cut-up affair where Beltway pols and media drop their supposedly adversarial poses for an evening and spoof it up. Carr puts the You Tube-amplified hosting of last year’s affair by Stephen Colbert in perspective – it was a mistake that organizers made sure they didn’t repeat. He lays it out this way:

This year, the correspondents’ association decided to regain custody of the event, sending out the message that it values Washington as it used to be, a maypole for policy and power, even as the next generation of consumers gathers more news and information from outside the mainstream media.

So this year, media and the mediated played it as safe as humanly possible, exhuming Rich Little to practice safe satire. You know, a new kind of MSM, Men Having Satire With Men. 

Carr concludes with the notion that this kind of affair may be going out the door, saying,

But the world outside the Beltway is becoming far less civil. Unlike elected Washington, the members of the press are not facing term limits or an impending vote. But if consumers continue to exercise their right to get news when and where they feel like it, the press may eventually get voted out all the same. 

Certainly, that’s a possibility.

Sam Zell and the Smell of Burning Newsprint

Two weeks ago, Sam Zell told the Chicago Tribune in an interview that  he knew the newspaper industry was smokin'. No, not smoking with profits, but with a troublesome fire. The nature of the blaze was the question he couldn't yet answer:

The question is, 'is it a 5 -11 alarm fire or is it a brush fire?' If it's a 5-11 fire we're in big trouble. If it's a brush fire, we're going to figure out how to put it out or make its impact so minuscule as to not to impair the rest of the opportunity.

Now, you've got to be wondering what Sam thinks. Consider what's happened just since then:

• Twelve mid-size newspaper companies with more than 250 cities among them have jumped into bed with Yahoo. While Tribune's long-time partner Gannett has stayed out, as have the New York Times, Washington Post and Advance (all for now, at least), those 12 companies make up the broad mid-section of the American daily press. Most damaging to Tribune and Gannett was the defection of McClatchy to the consortium. While McClatchy will not (now) join in the Yahoo HotJobs recruitment partnership, it will join in the rest of it, and its CEO Gary Pruitt is prominently quoted in the p.r. What McClatchy is saying to its Gannett and Tribune partners is this: we'll stay with you on recruitment, auto and real estate (through Classified Ventures) for now, but we think the mojo has moved beyond newspaper-only partnerships to at least Yahoo. It's a public repudiation of the proposed national ad network Gannett and Tribune had pitched earlier this year. Sam's takeaway: Tribune isn't the leader in the newspaper trade I'd been told.

• Google buys DoubleClick for $3.1 billion. Forget news and news readership, this digital revolution is all about connecting buyers and sellers. If that is through news, great, but any kind of content that people will read, listen to or view is good. This is the same Google that Sam had previously complained about, noting how it takes newspaper headline and briefs without paying them. Sam's takeaway: If Google's paying that kind of money and buying an ad system that works without us, this could be a bigger problem than I thought.

Laptop Wars: The Twin Cities Newspaper Battle's Now in the Courts

We've all been focused on the antics in the Tribune Tower recently. But it's amazing to remember that it's already been a year since McClatchy agreed to buy Knight Ridder, and KR began its quick fade into history. I was reminded of the year anniversary by two KR scions recently.

The actions of one, Par Ridder, have made big news. The words of another, Mark Batten, sent to me in comment on a post I'd written about his dad, serve as a timely counterpoint.

The saga of Par Ridder, erstwhile publisher of the Saint Paul Pioneer Press and now (but for how long?) the (Minneapolis) Star Tribune, would be entertaining, if it didn't cut so close to the bone.

We recall that the saga became public on March 5, when Par jet-skiied down the Mississippi, on one Friday morning moving from one publisher's office to another. The problem was, according to the civil suit filed against him,
that he took a few things with him that he shouldn't. What did he take, according to the suit? Well, for starters his laptop that had lots of confidential and competitive information about Pioneer Press ad accounts and a folder with several non-compete contracts signed by Pioneer Press execs. Apparently, the Pioneer Press, after recovering from the shock of Par's betrayal, sent someone over to the Strib to recover the laptop...and had to wait while its contents were being copied. (Here's a good AP story summing up the case.)

It took a few days but Dean Singleton, CEO of MediaNews and managing partner of the Pioneer Press since last summer, assembled quite a dossier on the crosstown caper. He then took it to the Strib's new owners, Avista Capital Partners, who had hired Par away, and proposed a settlement for the damage done due to the confidential information now known by its key and historic competitor. Several days of talking produced no settlement, and Dean filed suit on March 12. That case was filed in Ramsey County, Saint Paul's home county. It charged Par, Avista and two other new Strib execs with "fraud, civil theft, disclosure of trade secrets and conspiracy." The two others? Two Pioneer Press execs, apparently both of whom had signed non-competes. It's a 46-page complaint overall, and it makes incredible reading. If you're so inclined, here's a post form Pioneer Press alumnus Brian Lambert on the color and the reasons the ad information might really hurt the Twin Cities' second paper.

Latest news in the case came Friday when the Ramsey court ruled in favor of letting the Pioneer Press search about a dozen Star Tribune computers, execs' computers that apparently received the copied Pioneer Press data. In addition, it also suspended from Strib employment one of the two execs Par had hired away.

For those of us who are veterans of the Twin Cities journalism wars, it's an amazing turn of events. Just before I arrived at the Pioneer Press to take a job in 1986, then-publisher Roger Parkinson had decided to break the historic gentlemen's agreement between the Cowles (Star/Tribune) and Ridder (Pioneer Press/Dispatch) families, an agreement that let the Mississippi largely divide markets. Parkinson had an epiphany one day, flying into town, that indeed from the air was one big city, not really two, separated by a river. Anyone who has lived in Saint Paul, experienced St. Patty's day, the Winter Carnival, the Vulcans and Cossetta's will tell you differently, but the war was on.

And that war has a more immediate logic in our time of shrinking newspaper revenues.

Newspaper Companies to Swim with the Sharks

It's out of their ponds and into the big ocean for the 12 companies that have wedded their futures to Yahoo. Can they swim with the sharks?

We've seen this announcement coming for a long time, and now that it's official, it's time to sort out the big impacts from just the curious ones.

First to the acknowledgements. See it as a white flag or white smoke merrily wafting out of newspaper company chimneys, but one way or the other, this is an acknowledgment that the first war is OVER. The Audience War, which newspaper companies thought was theirs to win 10 years ago, has been lost. Yahoo, with its 150 million uniques and preeminent position in, of all things, News, is one of the winners. And when one war is over, you make peace on the best terms you can and gird yourself for the next battles.

Hearst, MediaNews and Belo provided the leadership and landed a new high-p.r. value amigo at the eleventh hour, McClatchy. 264 newspaper titles in 44 states -- those are impressive numbers. But those numbers -- and even Yahoo's own  impressive ones -- obscure this point: All these companies need each other badly at this point.

The news companies know they need the audience they haven't been able to generate on their own, as their sites command a quarter to a fifth of the local loyalty that their print newspapers do. Most importantly, it's not even really the reader revolution that's the key to the deal; it's the ad revolution. Newspaper companies need to participate in that ad revolution way beyond the upselling and bundling of their own products. Those techniques made sense in the Internet's early days. Now with paid search, video ads and behavioral tracking rapidly changing the very notions of advertising, buying and selling, newspaper companies face the proposition: change or die.

Changing has been torturous and at best a work-in-progress; partnering's the next best bet.

For Yahoo, it's become a beleagured, share price-challenged, second-place finisher to Google. It needs to break out of its woes. How much of a harbinger is it that on the day of the announcement -- a big upside stock market day --  Yahoo's price has barely moved, while Google is up?

Let's sum up, for now, the impacts of the announcement, using a few  Es. Why E? Maybe for Egads. I've heard that parts of this deal may stretch out over 10 years. That's an eternity online. Imagine what we've seen in the first 10 years of the commercial Internet, imagine what may happen in the next ten, and your mind reels.

EXECUTION:  All the deal points -- joint selling of ads, provision of local news content, embedding Yahoo search deeply into news sites -- have lots of potential in concept. Executing on them will be hard. Lots of integration is needed. Remember that all these news companies are on different platforms of their own and their sales departments have struggled to get with past web programs. 

The new  products will demand changing platforms and that takes precious time; the already-announced HotJobs! partnership won't be fully implemented til maybe summer, as Yahoo completes that platform, for instance.

Recall too that Yahoo is famously balkanized. Making this deal an operational success is a headache beyond headaches. The announcement of the deal won't win big ad dollars; only the thorough execution of it can do that, and from today on, the clock's tickin'.

It's curious that so much of the Yahoo consortium push is tied to people associated with now-defunct Knight Ridder Digital. KRD was a player with big ambitions, but often mid-rank execution and standing. Now Yahoo EVP Hilary Schneider, who served at KRD's CEO, is at the center of newspaper's company's web fortunes.  Here the new leadership team -- Yahoo's and  newspapers' -- will prove critical

EXCLUSIVITY: I hear the exclusivity provisions around the provision of local content are a bit murky. Yahoo of course wants to be the local online source, and that's part of Schneider's public strategy -- tie local content to local listings to local ads to local events, all monetized with ads big and small. While the newspaper companies know they need the wider distribution, they can't limit themselves to one portal. Who knows what will happen with Yahoo, its relative reach and even ownership, within one year, much less 10?

Exclusivity in ads plays out similarly, but here Yahoo will be even more embedded in newspapers' lifeblood. In agreeing to use at least Yahoo HotJobs! and graphical ad platforms, newspapers grant Yahoo not only a business exclusivity, but one that makes that increasingly dependent on the company for their very lifeblood. That's a tricky decision, and one that will be harder and harder to undo, if necessary.  Sure there are performance clauses built into the deal, but the embedding of the Yahoo technology will make any unraveling of the deal harder.

Why did newspapers choose Yahoo?  As one exec told me, "You dance with the one that wants to dance." Simply Yahoo put on a prettier smile and showed off Panama. In the meantime,  Google has dithered in its news publisher operations, beta-ing along with print ad tests and offering paid search, but never putting together an effective  whole program. Even though Google was characteristically diffident, how big a chill do you think went down newspaper consortium deal-maker spines on Friday, when Google swallowed DoubleClick.

Yahoo may have the prettier smile, but Google's got the biggest ranch, and it just got bigger.

Ultimately, newspaper companies as creators of editorial and advertising comment need to have the widest possible distribution of their products across all digital media. To the extent Yahoo jumpstarts that, great. To the extent, it's just one widening of the road that limits other construction, that's a problem.

EVOLUTION:   As grand as the plan is today, it matters far less than how it evolves. The market moves at lightspeed. Yahoo must get out of its own doldrums and the newspapers must see a significant ramping up of their own revenues.  And they must be able to jointly snag the ventures not highlighted -- like owning mobile local.

EAGLE EYE:  What's written is one thing, what happens behind the scenes is another. Just as this announcement was being readied, AP CEO Tom Curley launched an unusual volley, accusing either Google or Yahoo of mis-using AP content for mobile. "It's a cat-and-mouse game," he told the Chicago Tribune. "They are knowingly not forthcoming."

Of course the wizard is behind the curtain here, as Yahoo will mix and match advertising and content mainly on its technology and platforms, which will make the watching harder.

ELIMINATION: Given brutal revenue losses in print, newspaper companies must cut all costs they can. Look for increasing cuts online, as newspaper companies decide that Yahoo's technology and salesforce can do better than they can. Will newspaper online operations start to look like Yahoo sub-divisions?

The End for now, but with The New York Times, Washington Post, Gannett, Tribune and Advance sitting this one out for the time being, with Monster's leadership woes, and with Sam Zell sorting through the his new company's closets,  all of the jostling only gets more interesting.

Points to Yahoo now for great wooing. The work begins as soon as the romance is certified.

NYT: Now That's Timely

Through-the-day reporting started as an abstract web ideal, sputtering toward reality over the last decade. It's hard to turn a largely once-a-day publishing operation to up-to-the-minute. Many papers are finally making great headway. This page from the New York Times -- on a Friday afternoon no less -- really struck me as getting it. If we can depend on the Times not only for insightful coverage and analysis, but also for a moving tableau of the world's biggest news, it can become a first read online.

Here's the page. Note the time stamps and how many unrelated articles were filed to keep up with the day's news.

The Malibu Times: Now That's HyperLocal!

So this is what all the buzz about hyper-local really means.

You're Sam Zell. You just got somebody else to pay the freight and all of a sudden you're just not a newspaper chairman (pending) but a pundit of your
times. You opine about Google ripping off newspaper stories ("Hey, I almost own some of them" and it's news in the Washington Post. (Of course your comment about the Internet perhaps being a passing fad, obviously seen as less fashionable, got lesser play.)

But you do know local. Like your new buddy-to-be David Geffen. Did Zell already talk to Geffen about buying the L.A. Times? No, it was just a social visit. After all, they both live in Malibu, as did another player in Tribune Billionaire Bingo, Eli Broad. Malibu, a city of no more than 13,000 souls, and three of them want to be newspaper moguls. What are the odds of that?

So maybe they buy out the little 90265 paper known as The Malibu Times (check out second item) and re-name the mothership on West First.

Sam Zell, Alfonso Soriano....and David Geffen?

Congratulations Mr. Zell. You have now joined a proud, but reeling fraternity. Nine questions in celebration of the end of the story that wouldn't end, Gawker's sentiment among many others:

1. So does this mean that the group that ended up with the prize are the unwilling employees of the Tribune Company, whose proxy was voted by Sam Zell?
2. Won't the record show that Zell got effective control of the company -- and its chairmanship -- for $315 million?
3. Is it really Alfonso Soriano's fault -- that big contract which grants him a right to learn Wrigley's center-field -- that the Tribune had to be sold?
4. While Zell has experience at seeing through distressed assets, isn't it the industry -- rather than the company -- in this case, that's distressed?
5. How much of the facts of Zell's Chicago connections and indication that he'd keep management in place swung the deal his way?
6. Did Ron Burkle ever really have a chance -- again? Will he try it again and somehow pierce the brotherhood more easily, and without public recrimination at the Eleventh Hour? Did his hiring of Jeff Johnson as a strategic adviser at the last minute hurt his case?
7. With a now-critical pass of newly independent owners -- Brian Tierney's group in Philly, Avista in Minneapolis, Zell -- will we see a new group band together to get their properties better deals from Google, Yahoo and the rest of the audience channels?
8. So, what will the new Tribune do with or without Yahoo, as 10 of its newspaper chain brethren, expand that consortium?
9. What sells after the Cubs? David Geffen, is your $2 billion offer for the Times still open?

What's your question?