Content Bridges

Frankly, Candidly, Truthfully: Newspapers CEOs Talk About 2Q

It's time for second-quarter newspaper earnings reports, with Gannett leading off Wednesday, with the long tale of woe to follow. Given the many newspaper staff cutbacks, which I thought might include the investor relations people, I've put together a few boilerplate remarks that I hope are helpful.

Good morning. Let me say I’m glad that the few remaining financial analysts covering the industry want to hear about our second quarter results. Our CFO will be giving you the details on those in a few moments. But let me make a few introductory remarks first.

Frankly, visibility has gotten worse. We told you in the last quarter that it was limited. Well, now – did you see that George Clooney movie “The Perfect Storm” -- we’re smack in the middle of the biggest fogbank you’ve ever seen. Some of you have asked why print revenues have fallen off the table. Frankly, I don’t even see the table anymore. What I see though, I don’t like. Some of you have asked to see what I see, and I’ve got to tell you, it’s better not to.

Excuse, me, I think I’m being Twitterized, isn’t that what you call it? Rupert keeps buzzing, like I’m media so I can be in Sun Valley and you newspaper rats are stuck in your hot, brick buildings. But back to the subject at hand.

First, let’s address costs.

We’re having our people talk to Dean Singleton’s people – I’m not talking to Dean directly; I think that’s how Ganzi got in trouble – about centralized printing. Frankly, Dean’s better than us at thinking outside the box, and we’re talking about one large printing plant, somewhere in the low-wage rural West, and then distributing the papers almost instantaneously, through some kind of system of high-tech pneumatic tubes. Apparently, it’s part of that Google Print deal, involving Google Flux technology. Sounds almost like back-to-the-future, but my people tell me it’s got potential.

You all know that Goldman Sachs is now predicting 30% year over year increases in newsprint pricing for the second half of the year. For some reason, all those Indians and Chinese are buying up newspapers like there is no tomorrow, driving up paper usage and pricing; I’d like to know their secret sauce.

As you know, our biggest cost is people.

On staffing, some of you have asked why we don’t cut more, and some of you have asked why we cut so much. Which proves I think that we’re taking the right, down-the-middle approach.  To tell you the truth, it’s a whole new world out there. Journalism schools seem to be stealing away our most experienced talent. Then there’s ProPublica, which considers itself some kind of high-minded, non-profit, picking off our highly prized investigative reporters. Then there’s the allure of these pajama blogger start-ups; did you see that Rafat Ali guy just got a big payday selling his site to the Brits? I always wondered if his work permit was in order.

We do realize that we need reporters, but frankly, they are a pain in the ass to deal with in good times. And, now, always in a bad mood. I’m told all the so-called “content” they create will prove very valuable online, even if we have to shrink the paper to the size of a menu. I just keep asking how soon?

Now let’s talk about revenues.

On ad sales, we’re thinking of adopting more self-service techniques. Hey, if you haven’t seen that YouTube video on how publishers can make more money using Google’s system, you should.

Our big initiative, of course, has been our work with Yahoo through the consortium. We’ve bet most of our 2009 growth on using its AMP system – or whatever they call, seems they have some legal problem on that, but they’ve got enough lawyers to work it out. Frankly, we love it. They do all the technology hocus-pocus, and our sales people just sell more stuff. You know, when they are over there golfing in Scotland with the car dealers and all, they just ladle on some more online products, and we can make some new revenue.

Some of you have asked what if Yahoo gets sold or split up like an estate. To tell you the truth, we haven’t a clue. Frankly, we don’t think it’s fair. We finally get our, excuse me, stuff together with the consortium, and then Steve Ballmer and Carl Icahn have to spoil the whole thing. We can’t seem to catch a break. We try not to think about how we’ve placed the continued viability of the American newspaper industry on the fortunes of Yahoo. I, for one, sleep better, not thinking too much about it, after 9 p.m. Anyways we have the firm assurances of Hilary Schneider that one way or another, it will work out okay, and my people say her track record certainly bears that out.

On content, you’ve asked what we’re doing in video. Lots, I’m told, though it’s not easy getting those union photographers to deal with things that move, my people tell me. Anyhow, AP’s on top of it, I hear; and yes, we plan to stay part of the AP. We’re now paying on a month-to-month basis, though I think we discontinued the use of the IndyMac card on that one.

Now, let me talk about the company overall.

We’ve previously announced that we’ve engaged strategic consultants, which – I won’t be fancy about it – is a way to say we’re offering for sale anything anyone would like to buy. Sam’s running a seminar on selling the real estate out from under each of us; my people are going, and I told them to watch their wallets. Craig still seem to have some cash – I want you to know that while I’m sure he earned every penny of that $7.9 million last year – we’re a tad more prudent than Gannett, and my compensation shows it. 

Finally, the Times Moves to Re-Brand the IHT (In Part)

The Times’ move to bring the International Herald Tribune website into the brand fold certainly makes sense. The change will add about 7 million uniques to NYTimes.com's 58 million, a nice 12% boost.

One question is why it took so long – the Times arm-wrestled the Washington Post out of its IHT stake back in 2002. The IHT is not a spectacular business, but it has a good foothold in Europe. That foothold is key to the Times’ biggest hope for a stable, prosperous future – making The New York Times a truly global, multi-platform brand.

The other question is why it is leaving the IHT brand on the paper, which is in midst of redesign. Certainly that brand has much history and resonance for its English language, European readership, but it's the Times brand that says "future," while "IHT" speaks much more to tradition, and therefore the past. Would IHT readers leave the paper if it were Times-branded; I doubt it. Would the paper attract new readers, and offer even more congruent multi-platform promotion, with a Times brand; I think so.

It is a Times-branded, global presence that is, at this point, the sole promise that fosters hope at and about the Times. It is a hope that most local and regional US dailies cannot share. The 1500+ dailies’ drive to the future is local --- hyperlocal in many cases. But for the Times – and the Journal – it’s a different game.
Both are newspapers, but they increasingly have less and less in common with their newspaper brethren. Scale and reach define their business strategies. How can they get to the almost one billion English-speaking news readers out there? How can they become a top-three, go-to source for readers on every continent?

It’s the Night Before Christmas Strategy. On paper. On desktop. On cellphone. On cable. On satellite. On social net. To the top of the porch! To the top of the (digital) wall!

No one’s close to getting the strategy done yet. CNN and MSNBC have the labeling right  --  TV, Web and Mobile fronting their TV branding, but curiously absent at the top of their websites. 

The BBC and Guardian have crossed the pond, understanding the value of new business colonization in the states.  News Corp gets it and is moving on its master plan, in part noted by the recent announcement of a single, multimedia platform for Journal, Marketwatch and Barrons properties, signing up with EidosMedia. Thomson Reuters, AP and even ABC are making their plays.

So the Times’ IHT web move makes a lot of synergistic sense. NYT Europe needs to build the same kind of momentum that the Times periodically shows, embracing and integrating multimedia, bringing high-end civilian bloggers under the Times brand, and better packaging content. Its Politics panel, for example, combines video, news, live blogging and contextual news into one easy-to-take-in whole. (Memo to NYT: now take this panel, consider it a giant, endlessly configurable widget and syndicate the hell out of it.) Its European product needs to build on the same mojo, while maintaining the IHT's Eurocentricity. Getting it done right is high-end nuance.This appears to be one step.

The Times says it is still working through various internal issues before making the change.  Certainly those issues existed – slow internal decision-making has bedeviled the newspaper industry even as layoffs and buyouts burgeon. My bet, though, is that finally it is the hot breath of Rupert that will end up closing the deal. Rupert hasn’t wasted a minute in going for the Times’ head. Anything – and everything – the Times can do to meet the threat and build the same kind of primacy in cyberspace that it has in print must be done now.

The IHT move is a small one in the scheme of Times' ones. A bigger one is what to do about the Times' local papers -- a business that makes increasingly less sense for the company to stay in, as I wrote in Februrary. Today there's an item about what will happen to the Times' ownership in the Boston Globe, with Arthur Sulzberger saying he "can't get into the whole thing." It is complex - trying finding buyers out there now amid news of default -- but more urgent a matter each day.

More NYT Coverage, here

WSJ on Nasdaq Real-Time Quotes: Fair and Balanced?

An acid test of newspapering is how a paper reports on itself. We're taught to be cautious, even leaning over backwards, to make sure that stories involving the paper, or its parent companies, are done according to basic journalistic standards, meaning fairly and with neither fear nor favor. It's sometimes a hard call. I remember many papers driving their publishers crazy in their early days of the web when they'd write about this great new thing called the Internet, where, could-you-believe-it, you could get free classifieds! Often times, newspaper people would glibly note Yahoo, AOL, Lycos, eBay, craigslist and the like and not even mention their own newspaper websites. That fairness gene, kicked unnecessarily into overdrive.

But then there's today's case of the Wall Street Journal. The Journal's long been one of my fundamental reads, and has bent over backwards in reporting on itself, especially during the drama of its sale to News Corp last year. That's why its story on "Real Time Stock Quotes Issued In a Nasdaq Test," stands out like a sore thumb.

Summer, 2008: The Smell of "Burning Furniture"

Summertime and the livin' is far from easy. Now that we're past Memorial Day, let's speculate on the summer that will be. It's a long time til Labor Day for the news industry. We've seen Rupert Murdoch, ironically drawing stark attention to his own advanced age -- and the question of what will become of his emerging digital empire -- in recently noting that print will out-live him. ("Print will be there for at least 20 years, and outlive me.") The London bookies might be having a field day with that one.

But for most publishers, the times just turn edgier and edgier. I asked a keen observer about the major strategies news publishers are considering as they face the changed business landscape. "Strategies?," he laughed. "They're too busy burning the furniture."

Burning the furniture? In June? Well, the industry has had a hard time separating out cyclical change from structural change, but those still working might hope some wood's left for winter.

Here are nine of my questions about the summer ahead. What's yours?

---1. At the New York Times, it's going to be a tense summer. Buyouts and layoffs have now taken out about 100 jobs, as the Times increases its dividend to try to retain shareholders. The new Harbinger/Firebrand board members are now inside the tent, poking at its corners. How soon will the Times management heed their calls to bite the bullet, sell ailing newspaper properties (Globe, regional group), buy a little time, save a little staff and invest more in the great digital future, which is the Times' salvation?

---2. Love the photo with David Hiller (left) and Randy Michaels (center), in Crain Chicago Business story.
Hiller, tried-and-true Tribuneite, is the ultimate survivor, but the expression says even his tenure as L.A. Times publisher is limited. The Times' publisher and editor change dramas have been quite public, but consider they've been churning through ad VPs about yearly for most of this century. Think what that does to the numbers (and you see why Tribune's own numbers are disproportionately down). Will David Hiller last out the summer or the year?

---3. We hear the grrrrrrrrrrrrrrrrrrrr grinding of teeth from large-player Gannett to small-player Gatehouse, down to a new low of $3.90 a share on Monday. As the Goldman Sachs report put it circumspectly: ""Our thesis that a focus on smaller, 'hyper-local' markets would serve as a counter weight to the cyclical and secular pressures negatively impacting newspaper industry revenue performance has proven only partially correct, as evidenced by the declining trend in same-story revenues over the last several quarters." In other words, is there no refuge out there?

---4. Why did US news publishers fail to follow other big US corporations in diversifying to international markets?  Look at the now-double digit decreases in US ad revenues -- 10% in ads overall in April; 20% in classifieds -- and you see that the US is the epicenter of the newspaper meltdown. UK, Europe and Japan are muddling along -- down a tad -- but much of the developing world from Eastern Europe to Latin America to South Africa to China and India is going gangbusters. Chains like the Irish-centered Independent News and Media and the Norwegian-based Schibsted saw this change coming and have invested way beyond their initial  comfort zones. Now they are diversified, and growing, while US chains see the double whammy of fewer ads and higher newsprint (expected to price up 20% year over year for the second half of 2008) costs.

---5. Will salvation be found in motherhood? "Soccer moms" might have been so last election, but momomania is sweeping news websites. Boston.com's ""Bomoms"," and the Orange Country Register's "OCMoms" are part of the profound move to niche. If general news still pulls in puny CPMs, sites are looking at profiliferating niche sites around them -- in this case, the fast-expanding, now dozen-strong Mama web chain (San Diego Mama, Houston Mama, DC Mama. The hard part - producing enough compelling content, engaging real community and getting the ad people sufficiently connected.

---6. How fast can we replace expensive staff-written stuff with user-gen? The economics are clear. Better to pay nothing for something that will get you 1000 page views than part of a professional salary. User-gen's not just about community engagement -- it's about cold, hard cash. As user-gen initiatives rage, look for more of them to get connected to newspapers' main publishing systems -- witness the recent Saxotech/Pluck announcement -- joining the two worlds of newsroom and user gen. One publishing system, monetized singly.

---7. How big a bandage will we need to blot the paper cuts? Much has been made of the news industry covering its own demise (that's what we do). But you have to admire the Google mapping/color-coding of the rampaging layoffs and buyouts by Erica Smith, here.

---8. How much workouts will the whiteboards get? Structural change is an order of the day. Sometimes highly strategic, perhaps, and sometimes Titanic deck-chair-like. Belo and Scripps have split themselves in halves, the Washington Post is re-doing print/online orgs and the San Diego Tribune is trying a grand experiment of putting it all together.

---9.  How loud will the Yahoo! be by summer's end? With AMP being touted by Yahoo as a salvation to newspaper consortium members' audience/ad targeting woes, its arrival by end of summer at MediaNews properties, among others, may be a cause for whooping it up. Of course, it is bound to be a  summer of High Anxiety (shout out to Harvey Korman)
at Yahoo and for those partnered with it at the hip and wallet. With Google gaining search ad market share, Yahoo and Microsoft, abetted by matchmakers like Carl Icahn, are being forced to do something. Yes, Microsoft's making a bunch of moves, but expect it to circle back around to Sunnyvale., especially given today's revelations that Jerry Yang may have rejected an earlier $40 a share Microsoft bid. Nothing's stopping Yahoo from moving on AMP and its implementation for now, but a Yahoo uncertain of its own future just adds to the newspaper summer worry pile.

Bloomberg's Next Push: Consumer, Advertising and Global

If you've seen a bit of Bloomberg TV or heard Bloomberg Radio or been in front of one of its terminals, you may have recently wondered: Why isn't it doing more with what it has?

Its reporters are some of the fastest moving on the web, and know data better than most covering the news industry.

So what might today's announcement that news industry veteran Norm Pearlstine is becoming "chief content officer" of Bloomberg mean?

My quick take:

* Right now, Bloomberg derives almost all its revenues from Corporate markets. With Pearlstine at the hub, it plainly will look at leveraging its assets beyond Corporate, most directly to B2C markets. I hear that has made recent forays into Legal markets as well, competing with Reed Elsevier's LexisNexis and Thomson Reuters' West Publishing.
* Key question is one familiar to all legacy news companies. Can it keep its grip on stable (in this case, installed terminal) revenue, while competing in markets new to it. It faces risk of commoditizing its core business, unless it executes a Free Web B2C strategy smartly.
* Business advertising draws among the highest CPM rates, more than $100 CPM for business news video and above $50 CPM for graphical ads, for high-branded content. But the overall pie of online business news ad revenue is still small -- that's why News Corp decided against eliminating wsj.com subscription wall. There's simply not enough money in web business news advertising to make up its online sub revenue loss.
* Pearlstine's experience tells us that this is all about leveraging the content assets across all modern media platforms. So expect Bloomberg to go where the growth is -- advertising. Web advertising is still growing around a 20 per cent rate, and Bloomberg should cash in there.
* The new Bloomberg view should be more global. According to Outsell research numbers, it drives 47% of its revenues from the US, 38% from EMEA and only 10% from Asia. Asia should be bigger. So look for Bloomberg to become a more global player, both through acquisition and greater use of partner distribution channels.

In sum, I think there are three words that define the Pearlstine announcement:
---Consumer
---Advertising
---Global

Bloomberg sees a similar opportunity as Rupert Murdoch saw in buying Dow Jones -- the global business news opportunity leveraged over all platforms. Today's announcement means more competition for Dow Jones -- and Time Warner's business magazines, McGraw Hill's Business Week, Forbes, the New York Times and the Financial Times.

Let the new business games begin.

Cablevision Moves Forward with First Home Run Game Plan

I've long compared the cable and phone companies on the one hand to the newspaper companies on the other.

Newspaper companies saw there business being upended by the Internet, made small bets and have lost out on the big ad growth the web has generated.

Telephone companies -- the successors of monopoly Ma Bell -- first consolidated and then saw that old vanilla phone service was disappearing, well, almost as fast as newsprint-based news. They moved into internet service provision and then into more lucrative broadband, acing out the many small companies that had at first parted the waters (some of which, including Infinet, were owned by newspaper companies). They invested heavily (and often clumsily) in mobile and have figured out how to wring many new dollars from all of us.

Cable companies saw that they were reaching a saturation point in their own penetration, and then felt the hot breath of the formerly telephone companies moving to offer .... cable TV. So they've gone after both internet service providing and local voice, understanding that boomers still want the comfort of the old landlines.

Triple Play, once a novelty, has become the standard. Cable + Internet + Telephone.

Now Cablevision's stuck out its neck, $650 million worth, to swing for fences.

Cable + Internet + Telephone + Newspaper. A combo that could give Cablevision an edge against Verizon, its biggest competitor.

A home run?

My betting is that it's one of the best labs for everyone in the news industry to watch.

What stands in the way of a big Cablevision win? In a couple of words: strategy and exectuion.

In strategy, Cablevision must move beyond the hazy notion of Long Island Convergence (some say the Dolans may have had a bit too much Long Island Tea in offering $70 million more than their competition for Newsday) to a true strategy. That strategy, in a nutshell:

---Create a new ad vision of how Cablevision/Newsday can serve local advertisers, from its Long Island home base to metro New York to southern Connecticut to northern Jersey. Providing advertisers reach to mass and targeted niche audiences, through cable, newspaper and internet is what must be done.
---Create a new content vision for how Cablevision/Newsday can serve local news readers, sports lovers, business observers and entertainment seekers. The company will have a newsgathering/production force of more than 500. The goal has got to be to get out of text/TV/audio silos, creating text and multimedia content, distributing that content to become dominant in its key geographic areas
---Connecting the ad and content engines to the wider web distribution world. The new independent-of-Tribune Newsday may well move out of its Tribune partnerships (nothing in release one way or another on CareerBuilder, Classified Ventures, QuadrantONE, etc.) and look at joining the Yahoo News consortium, among others. The Daily News is in it, but has no market exclusivity.

The Execution? Tougher than the strategy. It should be streamlining as many of the cost centers of both companies as possible, but doing that in a way that builds the company for success, rather than crippling it.

Yes, ad staffs and selling propositions can converge and yes, scribes and TV producers are really members of the same species. But the human dimension here is what's tough. Habit, tradition and skill set are all obstacles. As I wrote last week, someone is going to surmount them; Cablevision's just one of the newest and potentially most interesting to try.

For Rupert-watchers, the sale is something of an enigma. Why did it go this way less than a week after his public boast that he'd win the prize? Questions to be answered:
---Did Tribune's latest double-digit declines convince him that it really wasn't a prize at all, that the the Post's $50 million loss really wouldn't turn to profit, given both a bigger Newsday pricetag and the detiorating newspaper ad market?
---Is News Corp thinking that further investment in newspapers just won't pencil out?
---Back to the overpay question. Did Rupert overpay for Dow Jones and did the Dolans overpay for Newsday?
Both are long-term investments, and you can't make judgments based on today's pressures and short-term trends. This is all about real convergence and its value.

Can Cablevision Turn a Triple Play into a Newsday Home Run?

It's easy to get lost in the current era of Big Man in Town Journalism. Zell. Singleton, Murdoch. Tierney. Harte. So much of the recent drama in newspaper ownership change has been driven by personality, as keep-it-in-road, rationale profit-seeking companies turn up their noses at the prospects of buying newspaper companies. It takes an outsized ego, an outsized wallet (your own maybe, but preferably someone else's) and a perhaps outlandish optimism to grab onto the horns of the bull and take off for a wild ride.

One current installment of that drama is playing out in Long Island, home of once-proud Newsday, a paper that innovated ahead of its day and then saw its fortunes cascade through the Times Mirror and Tribune funhouses. As Sam Zell stares down his first balloon debt payment, Newsday's hit the block, and an unusually crowded one it is. Isn't it great to see a bidding war for a newspaper company? It is highly enjoyable, if unique to market circumstance. With Murdoch's Post and Mort Zuckerman's New York Daily News in lethal competition, both have a hard time imagining the other getting Newsday and using it as cudgel in the war.

The weapon for each in that case is, of course, cost reduction -- a relentless streaming of cost in all departments -- ad, circ, production and printing and finance, not to speak of how newsroom synergies might be achieved. It's the other bidder in this case -- currently the high one -- that I think paints a more interesting picture of what the local "press" may become.

Cablevision has offered $70 million more than either Mort or Rupert, currently at $650 million, $150 million above its original offer. With Rupert and Sam increasingly better buddies (formally on AP board and informally, we can only guess), I would have put my money on that deal (and agree with Alan Mutter's notion of a potential Murdoch/Zell endgame, here). But $70 million is quite a differential, and for now, Rupert is saying he isn't going up. Further the potential of FCC review of his increasingly entangling NYC-area cross-ownership (the Post, WWOR-TV and WNYW-TV, Dow Jones and Newsday) would at least slow down and bring uncertainty to the deal. Sam Zell's bankers don't like uncertainty.

So that may leave us with a new attempt at....synergy. In fact, it could turn the emergent idea of Triple Play -- TV cable service, Internet service, local phone service -- into a Home Run, adding "newspaper" to the diamond.

In this new synergistic interpretation, we'd observe what new owners would see as complementary in combining Cable News -- including News12 Interactive.com (its cringe-worthy tagline -- "only in cable  not on phone company tv or anywhere else"; you need a password to get in unless you are a local cable subscriber) -- with Newsday. It's been done before you say, and you're right. In fact, Cablevision and Newsday themselves jointly produced a one-hour cable news program years ago. But it was too early and didn't pencil out. It's been done elsewhere as well, with mixed results.

What's changing now, I think, is that the time is coming back around to do it right and to make it pay. Is it a "TV-centric" time, as someone close to the Dolan family, who control Cablevision, said? TV-centric misses the point. It's more video-forward than TV-centric. News video is now here to stay. More than half of the US population has watched video within the last month; already in Britain, that number is now more than 90%. We're getting used to seeing video first, on our time, time-shifted, Apple TV-enabled, and through the Internet. The much-maligned pre-rolls and their children, "in-video" ads, are still highly sought after and fetching $25-35 CPMs, on average. We do like to watch. 

Look at most newspaper sites, and you see dabbling. The AP Online Video Network is so far populated on about 1800 sites, newspaper and broadcast. On too many, though, it's relegated downpage, and seems like an after-thought.

So what happens, in this new, coming age of convergence -- in which easily watchable video marries quick-read text and always-on opinion -- if you combine the resources of a Newsday and a Cablevision, which, too, counts hundreds of journalists in its newsrooms that span from northern New Jersey to southern Connecticut.

Circ Numbers: Talking Quantity...and "Quality"

How fast can you paddle?

That's the unabated message of today's ABC FAS FAX circulation numbers being reported. They cover the six-month period, through March 31. Overall, the water keeps rising: 3.5% down daily, and 4.5% down Sunday. Those are in line with what we've now seen for more than three years. The waves aren't subsiding, but rising a bit more. Worse, there's not much relief in sight.

As paper-specific reports filter in, we can expect to see more explanations that "we didn't want the circulation anyway."

That's the heavily discounted circulation, next-to-freebie stuff that many dailies have used to prop up numbers for years. Of course, there's some truth to the statement, but it raises a couple of problems:

---As an explanation, it's getting a bit long in the tooth. When circ began to go substantially south more than three years ago, publishers offered the "cutback to quality circ" argument and said they'd cycle through that within a year or so. In Year Four, it seems like less compelling a reason. Just how much how low-quality circ is out there, anyway, or is the definition of it a rolling phenomenon?

---Selling audience to advertisers is in major change, and in that change, newspapers take on new risk. For instance, in Editor and Publisher this a.m., Jim Moroney, publisher of the Dallas Morning News is quoted as saying "We are trying to get out of the churn business." The Morning News is pulling back on its discounted copies. The paper cut one discounted category -- more than 25% but less than 50% paid -- by 75% daily and 80% on Sunday. What did the cut mean? Massive loss with daily circulation down 10.5% to 368,313 and Sunday down 7.6% to 520,215. Metro dailies' market position has long been offering the mass market better than anyone else. Now as household penetration dives toward 40% of households in many metro areas, that mass argument is harder to make. True, newspapers are making more of a niche argument, but niche is a game that internet marketers are having an easier time winning than those who peddle poor non-interactive browsable paper. In the transition from mass to niche, more ad dollars are put at risk to competitors from Google to Spotrunner.

They aren't many winners out of the numbers released today, but you can almost feel the grin of Rupert Murdoch.

His nemesis, the Times, saw a bottom drop out and his Wall Street Journal showed a .35% gain. The Times Sunday number -- down 9.26% or 150,000 copies -- to 1,476,400 is particularly scary. (It was down 3.85% daily.) The Times attributed two-thirds of the Sunday decline to "the elimination of bonus days" and the familiar "third-party bulk." Last year, it took a gutsy price increase to its readers -- and has been showing positive circulation revenue growth, an oddity in the industry. These circ numbers are the first since last year's increase. If they continue to trend significantly down, the make-the-high-demo-niche-audience-pay-more-for-quality strategy -- one watched by the industry -- will be seen as a loser.

I can't help but wonder about the contribution of Times Select's termination here. As it ended, the Times counted about 470,000 paying customers who received Times Select for "free," as long as they were print subscribers. That called to attention the print/web connection. Take it away, and you give readers pause -- do I really need to take that non-green pile of paper when it's all unambiguously free?

Looking at today's numbers, we see a couple of other intriguing trends:
---Optimistic Buyers of Big-City Metros Beware: Both the Philadelphia Inquirer and the Minneapolis Star Tribune -- both bought within the last couple of years -- were down significantly. The Strib: 5% daily, 7% Sunday and The Inqy: 5% daily and 6% Sunday. New owners had counseled optimism that new approaches -- marketing forward -- could turn around those papers.
---Flat is the New Growth: The Strib's competition, the Pioneer Press (my alma mater), was essentially flat. Its fellow MediaNews property -- the Mercury News -- somehow managed to gain 1.7% despite its turmoil, newsprint and staff cutbacks. (Other gainers, here.)
---Seattle's About the Only Place Circ Was Up: Starbucks down; news reading up? Particularly dreary, bone-tingling winter?

Today's news, combined with the spiraling downward trends in print ad revenues, only means more misery. With new layoffs announced in Raleigh, we may see the buyouts/layoffs of 2007 simply as prologue. I think what we're seeing, unannounced, is the radical restructuring of the newspaper industry. The drip, drip, drip of change is now becoming a torrent.

Top 25 list of numbers at Editor and Publisher, Sunday and daily.

Rupert, Sam and A Future of American Journalism

Last week, I talked to a veteran reporter wondering -- of course -- who might buy his struggling metro paper. We went through the possible names and then arrived at Murdoch. "At least, he's a newspaperman," the reporter hopefully offered.

That's what we're down to -- guessing games and choosing the least worst of evils. None of the above applies neither in newspaper ownership nor politics in the US.

Zell selling Newsday, after saying he wanted to keep the Tribune empire alive. No surprise.

Murdoch buying Newsday. No surprise there either. Zell and Murdoch are now tied at the hip, fellow newspaper titans and lately on the AP board. Rupert Murdoch can do a lot more for Sam Zell than Mort Zuckerman, owner of the Daily News, could.

Well, Murdoch is a newspaperman. The question is what kind?

We'll ask Marcus Brauchli, soon as he's free, which with today's news looks like it will be soon. The WSJ managing editor replaced by a hand-picked Murdoch editor. Of course. You'd like to laugh when you recall all the hand-wringing and speculation last year within and without the Bancroft family about what Murdoch ownership would mean. Would he "interfere"? Recall the board that's set up to maintain the paper's integrity, and how mushy that seemed to some of us. Well, now it's deciding if it has any say in who the new m.e. is.

Please, Murdoch owns the paper. He'll do with it what he pleases. Produce some great journalism, sure. Use it as weapon to bludgeon the Times, sure. Make resource decisions that determine the journalism and the fates of his friends, sure.

That's the way it is. The question will be how much of 21st century robber baron journalism comes to pervade the industry. Sam Zell's bought himself some time, for now, but those balloon payments and the effects of a  recession won't leave him much time to catch his breath. For the rest of us, it is lots of sighs and heavy breathing.

Regional Dailies Give Business Away

We can add still another franchise – business news – to those being abandoned by the daily press. I’ve seen slimming of business pages, some announced grandly, some never acknowledged but painfully obvious to newspaper readers. Once-robust sections of eight pages have trickled to six or four, clear candidates for newspaper hospice.

So the Orange County Register’s recent moves – in addition to a segmentation (old people: print; young people: online) approach caught my eye. The Register seems to be giving up on the local print business business: 

• Its Business Monday section was eliminated.
• It stopped publishing its stock tables.
• It folded daily business news into its main news section 

That’s indicative of what we’re seeing, usually in a more piecemeal decline, across the country, with papers as diverse as the Denver Post, Cincinnati Enquirer, Columbus Dispatch, Reno Gazette-Journal, Winston-Salem Journal, Monterey Herald and Akron Beacon-Journal announcing major cutbacks.   

It’s not surprising. The Web is so much better suited for business news in so many ways. Business is immediacy, moving faster than government – seconds, minutes, hours, days – as often compared to months and years. Business is about numbers, and instant access to interactive, automatically databases are a wonder. Take Marketwatch’s new Portfolio product, for instance, which combines current stock price, historical pricing and current news into one dynamically updated screen. 

Such innovation reminds me of the days of newspaper business innovation. I believe (Knight Ridder alums, please remind me) it was the Miami Herald that innovated the Business Monday section in the early ‘80s. The idea was a simple one: both for the readers and for the newsroom journalists – business literacy. 

Where daily newspaper had long concentrated on governmental coverage, it started dawning on people that this little phenomenon called American capitalism might be worth a look. The emergence of local and regional private sector coverage was a good thing, and over time, we even saw some journalists hired for some degree of business acumen. The comfort with numbers has never approached, though, the comfort with words in any daily newsroom I’ve ever seen, save the Wall Street Journal.

It is worth pointing to SABEW, the organization for business news editors and reporters, which has managed to keep nurturing the beleaguered trade.

(Last year I did a presentation of news business change to a group of editors at a midsize daily. One came up to me at the conclusion and offered, “That was really interesting, though I’m not sure I got it all, “I’ve never been good with statistics.'”) 

That discomfort has never been a good thing. Increasingly sophisticated readers have become increasingly frustrated with innumerate journalists and gone elsewhere, as dailies largely failed to climb the business news hill fast enough. 

So here we are in 2008 and face these realities: 

• As print papers slim, they’ll cut business news and business news reporters. It’s fine to eliminate expensive-to-print listings tables, something they should have done earlier before today’s big crunch.

•  Papers will have less call on local/regional print business advertising, further reducing those revenues. Failure to deeply cover regional business only exacerbates such ad loss, as business advertisers find the B2B and B2C ad targeting and lead generation of the web far superior to expensive, mass market print.

• On the web, the business news game is largely global and national – not local. While dailies used to be the portal of business news – local and national – for their readers, they’re not online. We’ve learned that national media – WSJ, New York Times, AP, Reuters, Business Week, Forbes, Fortune, Business 2.0 and lots of specialized blogs or blog aggregators like TechCrunch, AllThingsD and SeekingAlpha are the places to go.

•  The Web business news business is lucrative. Business news – an area through which lots of money is moved – pulls in the highest CPMs out there. Take the niche of business news video – exploding on the above sites – and you see CPMs of $100 and more.  

So where does that leave local business news coverage? Most companies I think will just cutback in print and limp along online. 

We may see innovation and new business models in a couple of areas. Expect to see more partnerships between the national/global business news suppliers and local media sites. Look at what Reuters did with the International Herald Tribune a couple of months ago. IHT, owned by the New York Times, contracted with Reuters to provide both its print and online business sections. Co-branded. Revenue share. 

That’s also the approach of Dow Jones, which over the years has signed up about three dozen papers for its Sunday personal finance print product. The Register is one of those papers carrying the product, along with the Denver Post, Star Tribune and Sacramento Bee. Steve Townsley, an alum of both Newspaper Direct and New Century Network, is directing sales for the product.