Content Bridges

What's the Boston Globe Worth? A Buck, More or Less

The New York Times' David Carr asked six analysts one of the questions of the moment: just how much is the Boston Globe worth?

I liked how Fitch's Mike Simonton suggested that "buyer" may be a misnomer; "assumer of costs" might be truer.

Carr also reminds us that Jack Welch's indicated that he might be willing to round up some $500 million or so to buy the Globe just three years ago. 2006, though, now seems like another lifetime in the newspaper industry. How the Times could have used that kind of money to do battle with Rupert.

So, this week, as we try to separate the potential buyers from those who may just delight at seeing those books (how much of the $85 million in annual Globe "loss" is operating loss and how much "other"?, for instance), I'll amplify on my remarks to Carr.

Given the state of the world, the ad market, the newspaper market and vagaries of the online future, my best guesstimate of a price: a buck.

A buck essentially represents a gentleman’s agreement: I take a liability, headache and a distraction off your hands, says the buyer. I give you the great potential of the Globe brand, a top 25 news web site and improved ability to re-jigger the pieces, thanks to our new contracts and cost-cutting, says the Times.

A buck recognizes that there is so much unknown and such unchartable risk and reward here that only a token payment can even it out for both sides.

The Times gets shortchanged. It paid $1.1 billion for the paper just 16 years ago. It’s struggled to keep the Globe staffed through bad economic times. It’s subsidized losses. 

The new owner takes on great risk. It's highly unlikely any bank will finance a purchase, given the half-dozen bankruptcies we've seen over the last year in the industry. That means the new owner’s own money is immediately at risk. The new owner starts out behind, even with recent contract givebacks, given the trajectory of operating loss and a continuing 30% decline in year-over-year advertising revenue. Forget the purchase price; how many millions will I have to sink in within the next year?

The potential upsides include buying an ad-based franchise at the bottom of a recession and being able to be a shiny newly painted boat in a rising economic sea; 2010  ad numbers can hardly help to be an improvement over this year’s. The feds will soon be paying people to buy cars, and houses will start to sell again; related advertising will recover a bit. 2010, I'm coming to believe, will offer a breather to the beleaguered industry. Yes, the structural changes of ad spending and reading will continue, but a small ad bounce will help dramatically downsized companies in the next calendar year. That may only stop the gasping temporarily, but breath is breath.

The potential downsides include inheriting a heavy-on-cost business model at a time when competitors from Huffington Post to Politico to local start-ups to emerging online initiatives of local broadcasters threaten to do further damage to daily newspapers. In the fact, the new business models we're seeing from the start-ups -- small, editor-heavy, full-time staffs, growing legions of part-time reporters, columnists and bloggers, regional aggregation models -- stand far distant from the model of a paper like the Globe. If you truly believe that Boston needs a vibrant, public service-oriented news source, is assuming Globe ownership the place you want to start?

Journalism Online: Part of the Web $2.0 Goldrush

Maybe we should call it Web $2.0. 

There's a goldrush underway, all of a sudden, though no one can yet pinpoint the location of the precious stuff. Will this be an El Dorado fantasy or is it say late 1847, a couple of years before modern California took shape as miners hit vein after vein of shimmery gold? 

Clearly, though, there are dollar signs in many publishers' eyes. Part-Google envy, part desolation over the busted business models newspapers are now operating on, these dollar signs are lighting up several new initiatives, some announced, some coming soon. Let's look at the latest entry.

The latest to join the would-be party is Journalism Online, LLC. Journalism Online has set out its shingle, with a website and sufficient firepower to engage in discussions with the captains of news publishing. At this point, it has neither technology nor staff. What it does have is the intention to build the next-generation platform for news e-commerce and a wide and ambitious range of potential products it is willing to take on. If it were just another Silicon Valley Web 2.0 (without the dollar sign) start-up, you'd say, haven't I seen this movie before?

Most curiously, behind its facade, we may see something of a strategy/back-up plan, a kind of "Who Do You (Anti-) Trust". More on that below, as we get to its emerging board of advisors.

Journalism Online is headed by a triumvirate of well-known execs.

Gordon Crovitz, former publisher of the Wall Street Journal. Crovitz took a nice payout in Rupert Murdoch's buyout of Dow Jones. Of the eight or nine post-Journal pursuits he's taken on, he says this new one as co-founder of Journalism Online will get a lot of attention. Crovitz, of course, brings the cred of having been in at the founding of the most successful U.S. pay news model yet birthed. 

Then there's Steve Brill, late of Contentville, an early paid content aggregation site that flickered brightly and then died in 2001. He founded Court TV and American Lawyer, and is a principal in the company that brought us Clear, a quick-pass (do we see a theme here?) through once-crowded airports. Brill got a lot of digital ink this year, in suggesting that the New York Times had blown its paid content opportunities, and offered his own prescription, to Times scion Arthur Sulzberger. 

Leo Hindery, a successful Internet private equity and pipes (cable, Yankee sports network+), rounds out the threesome.

Then there's Merrill Brown, a savvy, web (Real One, MSNBC+) veteran, who worked with Brill to start up Court TV.

Maybe most intriguing are two non-media business names: Attorneys Extraordinaire David Boies and Ted Olsen.

As in David Boies, who defended IBM in an anti-trust suit. David Boies, who defended Napster in a copyright case. David Boies, who led the federal government assault on Microsoft in, you got it, an anti-trust case.

As if Boies' name weren't enough, add in Ted Olsen, former Solicitor General. (Yes, you remember correctly. Boies represented Gore and Olsen represented Bush in the 2000 Supreme Court Case that decided the Presidency.) He's got anti-trust experience within his diverse resume as well. 

I see a theme here. No, of course, Journalism Online hasn't brought in David Boies with the notion of litigating. After all, it's a company that is in the talking stages, first with publishers, but presumably soon with search aggregators. You don't even have to mention "anti-trust" to Eric Schmidt, in setting up a meeting. You just have to say, we may bring along David Boies and Ted Olsen.

"Fair Share": Google, Trust, Anti-Trust....and What Happens Next

Maybe we've found an answer: get Dean Singleton, Rupert Murdoch, Eric Schmidt, Jeff Jarvis, Nick Carr, Mathew Ingram and Danny Sullivan in one room, charge admission and use the proceeds to pay for American journalism.

Last week may have shed as much heat as light on the trials and tribulations of the American press, as visceral responses to the state of the trade grew sharper. 

We saw a number of newspaper sentiments, from enlightened to reactionary, conflated together, given their paid-fire presentation in San Diego, as a multitude of fighting words pouring into the debate from San Diego's Newspaper Association of America/AP board meeting confabs, and its aftermath. "Anti-piracy". "Copyright". "BS detectors". "Ads with narrative and engagement.”  "OEMs, OPMs and VARs." 

We've seen name-calling, thoughtful response and ping-pong intellectual matches that make your head hurt, like this one on the always-engaging Nieman Lab

To the debate, I modestly had added the notion of "Fair Share," a new business reckoning between search engine aggregators, led by Google, and major news producers, old and new. That reckoning, I suggested, should recognize that Google is getting too much value and news producers too little out of of the current relationship. 

To my reckoning notion, I got a lot of response, with a wide spectrum of approval ("This is one of the most clearheaded, lucidly written analyses I've encountered regarding this situation") and disapproval (My fave, off Twitter: "I rarely agree with anything Ken Doctor writes.") Some dismissed the notion of righting news producers' relationship as "philanthropy." Far from it. I'm keenly aware of the separate battle over profit-seeking vs. non-profit journalism, and I'm an agnostic about that. Whatever produces more good journalism I favor, and there's no doubt it will be some mix of profit- and non-profit-based. 

My Fair Share argument, though, has nothing to with philanthropy, and everything to do with plain old business. 

In basic business terms, the news industry is a supplier - and an important one - to Google and the other search engines. In fact, it's a supplier/manufacturer (of traffic and ad revenue) relationship that has gotten out of whack, and is therefore useful for both parties to adjust. After all, manufacturers, too, have problems as their higher-quality supply lines dwindle.

Individual news companies, and here I mean the Politicos, the MinnPosts, the Techcrunches, the Global Posts as well as Media News, Gannett, New York Times, ABC and the BBC, have had relatively little leverage of late. Their inability to exercise leverage made sense historically. 

Take us back in the news time machine to 1998, a nice tweener period, and one that predated many of the companies above. Legacy news companies -- big 'ole big iron media -- could sense that their dominant place in the world was being shaken a bit, but AOL, Yahoo, Lycos (!?) and a couple of others didn't seem like Big Brother. So that legacy news industry had to tread lightly in pressing its case -- anti-trust seemed real for an industry in part built on city-by-city monopoly. 

In 1998, Google was born, and in the decade since the roles have been reversed. What was city-by-city monopoly has splintered, with local and regional advertising marketplaces much more diverse. 

On the other hand, Google, in particular, has become the gateway of our times, making a can't-refuse offer. It is the number one sender of traffic to news sites -- 25-35% as a rule. In saying that news companies are free to tell Google not to index them, and that Google will be glad to comply, you can practically hear the smile behind the statement. It's like Microsoft telling suppliers they were welcome to work with others if they didn't like the rules on Windows partnership. 
It's a choice that's not really a choice at this point. 

So as suppliers -- and here again I look broadly from AP and Business Week and USA Today to The Huffington Post to PaidContent to Demand Media -- it's about renegotiating the supply relationship. 

It doesn't mean having to erect pay walls. It doesn't mean a pause in radically reorganizing and rethinking news companies structures and products in this new hybrid age. it doesn't mean philanthropy. It doesn't mean calling Google evil or denying its genius. It doesn't mean limiting the free flow of content and debate on the web. 

It is about re-setting a new relationship of trust, trust that there's some equity in the deals. 

In the always quotable expression of Michael Corleone, ""It's not personal, it's just business."

So, let me suggest four forces that will move the recent web parlor talk into action this year. Each of the forces will have an impact on each other, and it's impossible to say at this point, which will have the greatest impact. 

NYT and CNN: Global Editions Bring Battle Head-to-Head

The launch of the Times' new Global Edition opens a window on the emerging global news competition to come. Even in deep recession, we see the battle lines being drawn.

Global Edition is a simple concept. You know NYTimes.com. And you know the Times has lots of world-oriented news, the staple of the A section for print readers. And you know you can find World News on the Times site.

The Global Edition, though, is a new product. Its trick is mostly in presentation, with the Times saying, We Bring You the World. It's timely. Pew told us that 40% of Americans say they get most of their international and national news from the Internet, compared to only a 24% in September, 2007.

You may recall that the idea's not a new one. Go to CNN.com, and you see "international" as a choice at top right of the page. It is less visible than NYT's, but the same idea (and an Arabic page option as well, once you click on international).

The news business is truly going global, enabled by the cheap and flexible distribution offered by the Internet. Already about a third of the NYTimes.com unique visitors come from outside the U.S. This new move integrates the Europe-centered International Herald Tribune into the Times web business, both in advertising pushes and in web branding. Go to the IHT website now, and you'll see the Global Edition, though branded as a sub-brand with the IHT, a move to bring those longtime IHT readers gently into the larger Times brand. As a bonus, IHT-originated content is now prominently added to the Global Edition for all NYT users, although some of it has been there before. (Today, about 20 IHT stories can be viewed on Global Edition.)

The latest development is a perfect example of the increasing head-butting of media that we've used to think of as distinct. Cable TV and Newspapers. That's the old world. In the new world, we've got CNN as a cable news leader, as a mobile news provider, as a website -- and now of course as a wire, as CNN President Jon Klein further talked about last week. 

Then, there's the Times. A print newspaper, doing a major website, experimenting with video and audio, and having a long-standing wire and syndicate business that is trying to find its way amid the publishing meltdown. It has also produced the leading news app in the iTunes store.

These are two, among many, companies on a collision course. Think ABC, AFP, AP, BBC, Bloomberg, CBS, the FT, Guardian, NBC, NPR, News Corp, Reuters, Telegraph and Wall St. Journal, and News Corp overall, here as well.

Paid Content: You Can't Tell the Players Without a Scorecard

Make 'Em Pay! Sounds like a old Clint Eastwood movie. Now, though, it's the theme of the newspaper industry month. We can't blame the industry for trying new tacks; that's only to be encouraged in the time of ransacked newsrooms.

Furtive cable bundling. Special e-newspaper readers. Hints of content pony walls. Tax relief and government training monies. 

Let's take a quick look at the landscape, and try to score them:

1. Cablevision's Newsday/cable idea: I pooh-poohed the paid Newsday notion, when it first leaked out last week. Putting up a pay gate around a site that draws 4.5 minutes per month per average visitor just isn't a good idea. From Cablevision's furtive comments, we can now divine that it meant to say it would somehow bundle Newsday as a cable offering, details to come. As Peter Kafka over at AllThingsD has pointed out, this idea may have more appeal for its ad value than its news value. The big new idea here, though, could be an old, tweaked one. Bundling! Imagine bundling Newsday online access in with Cablevision's cable bills all over Long Island. If you've actually looked at your cable bill lately, you know it's undecipherable. Cablevision -- owner of Newsday -- could peg any amount it wanted to Newsday value, call it an information access charge or whatever, and attribute the money to ..... Newsday. Sound familiar, maybe a bit like, the early days of classified bundling (the '90s), in which newspapers attributed whatever they wanted out of a recruitment/auto/real estate print buy to online. The trick here would be for Cablevision to continue raising rates to make the "bundling operation" really profitable for the whole company, and not just a shell game.

         Odds of Happening: 2-1.

         Impact: Great model....if you are a cable company that owns a newspaper. Would Comcast like to pull Tribune out of bankruptcy?

         Added Bonus: Having "The Housewives of Orange County" subsidize newspaper reporting.

         2. Hearst's e-paper idea: Hearst's Interactive Media President Ken Bronfin piqued imagination last week with news that the company has developed a "wireless e-reader with a large-format screen." As with the Cablevision word, we know little more so far. Jeff Bezos' pet Kindle and lately PlasticLogic's to-be-released-in-2010, oh-so-cool bendable screen (good informative piece by Emma Heald here at Editors Weblog) have re-lit hopes that people will want to read newspapers on this new device, paying for them of course. We know Kindle has some thousands of buyers for newspaper products, at $10 or so a month. 

         Odds of Happening: 2-1.

         Impact: Seems niche-y, rather than mass.  Wireless sounds good, if it can update newspaper content on the fly. Otherwise, we're back to today's latest technology bringing you yesterday's news. Of course, even if it is the latest news, how many people want it in the newspaper format (As Steve Yelvington points out, this is the old Roger Fidler idea, late of Knight Ridder, updated by newer technology)? My problem with e-readers has been that by presenting news in the newspaper format metaphor, they appeal to baby boomers and up, who are habituated to the format -- but don't prefer to spend their time reading digitally. Additionally, for younger-than-baby-boomer readers, they're puzzled why you'd have a proprietary reader, when you already have a laptop or smartphone that can get you the latest on anything, and offers other usefulness.

         Still, the device does offer the promise of a Chiropractic Full-Employment Act, as we (to use a USA Today-ism) all pack around so much digital garbage that our backs are permanently swayed. Here is one of those great USA Today snapshots, published fortuitously last week, showing the e-burdens Americans tote around these days.

         My sense is that the way Hearst may intend to make this work is as follows:

• Give away the e-reader to subscribers, or discount it substantially, figuring that the money saved from printing and distributing a daily paper (or Hearst magazines) -- more than a quarter of the cost of producing it -- will be saved if Hearst can hold on to the subscriber.
  
• Offer a have-it-your-way approach: 1) E-reader, "free" with upfront payment or guaranteed contract, a la cell phone contracts. 2) Print, which is priced higher.
  
• So it would be an attempt to both reduce costs immediately and offer an alternative to more tech-savvy younger readers.

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         Added Bonus:  A new device to add to the Graveyard of Proprietary Devices, sure to be on one of the popular stops on the Silicon Valley 2020 Tour.

          3. Hearst paid content idea: New Hearst News head Steve Swartz' leaked memo talks about charging for access to some online content, to be determined. Hearst execs have been told, since the announcement, not to erect any paywalls yet. In fact, they've been told to reach out and lasso more community content, another (better) idea newly regaining attention all around the country.

        

Nine Questions: Flipping the PI, NY's 4 Dailies, Re-Kindling Women Readers, Talking USAToday, Journalistic Deviance and More!

1. Will the Post-Intelligencer Flip the Switch in Seattle? You know, go online-only. (Is online the onliest medium?) With Hearst's Ken Riddick and the PI's Michelle Nicolosi working through the what-ifs, we may have a new, great test to watch. We’d be able to compare the online PI to the Seattle start-ups. Those include two of the best sites of their kind, the metro-oriented Crosscut and the neighborhood site West Seattle Blog, among dozens more as we see in Placeblogger. Then, of course, a renewed battle -- likely a David of a few dozen staff of SeattlePI.com vs. SeattleTimes.com.

In the PI's favor: It starts out with an above-average site, a strong reader base (about four million monthly unique visitors), some well-known bylines and (maybe, depending on the JOA settlement) strong ad relationships. The negatives: It will have the cultural adjustment, for its newsroom and its readers, of seeming less than it was. It may consequently lack the passion of the start-ups and have a harder time fully adjusting to the realities of more community-oriented, blog-forward local web.

2. If bad data keeps coming out about newspapers, isn't good data part of the solution? Take SacBee's innovative -- and quick -- application of database technology to the news. Amy Pyle and Philip Reese have been ramping up databases on the SacBee site for a year, using Caspio's technology. They are now up to 32 databases, all collected nicely here on an Investigations Center page. The two newest, off of California's ridiculous budget straits, include how to figure out the personal impact of the proposed new budget and the fastest growing and disappearing job sectors in the Sacramento area. They say the databases now supply 7% of the site's traffic, up from essentially zero at the end of 2007. (Tip to Jen & Fitz & Jen podcast for the SacBee pointer.) And this is pre-EveryBlock big rollout, though it's nice to see the Times moving forward with it.

3. Do we need another "best practices" journalism transformation site? That's one of the bets of The Newspaper Project. Randy Siegel tells me that newspaperproject.org has surpassed 30,000 unique visitors and 50,000 page views since launching on Feb. 2. That would tell us there are a lot of quick lookie lous, at least. In this age of information overload on information overload, though, the site's got a tough proposition of being Facebooked, Linked In and Twitterized into oblivion.  

4. How much is the USA talking? I hear that USAToday.com is now producing about 10,000 comments a day on its site, in what's becoming a new venue for cooler conversation.

5. If most American cities can hardly support one daily newspaper, how long can New York support four of them? Sure, the New York Times is a global/local hybrid and Newsday serves the Long Island niche, but still there are four of 'em.  Alan Mutter's rightly suggested that it's good timing for Rupert Murdoch to scoop up the remains of Newsday (recently devalued by 70% by its new owner Cablevision). Even with the $100 million or so cost savings that a New York Post/Newsday combo might allow, times are still tough for News Corp. Its revenues are way down; newspaper, broadcast and movies are going the wrong way, and we see that even cable ad revenues are flagging. As Michael Wolff laid out so memorably in his Murdoch bio, Rupert does what he wants to do, independent of shareholder sentiment. The Newsday opportunity will be a good, updated test of that; can even Rupert ride above these awful times and do what he pleases? My betting is that there will be no more than three companies owning dailies in New York soon.

How Well Does Fox News Mix with Reality?

Quiz question. What's Fox? A news network? A regional sports broadcaster? An entertainment network? A reality show company?

Of course, it's all of the above, and therein lies the rub.

David Carr's Monday The Media Equation column, in the New York Times, told the story of Fox's hook-up with Phoenix' notorious mayor Joe Arpaio. The shtick: The Sheriff tells Fox which bad guys he wants hoodwinked out of their hiding, and Fox artfully turns it into watchable TV.

Carr explains how the show got on the air:

“Smile... You’re Under Arrest” was initially conceived as a pilot for Fox Broadcasting. Executives took a pass and Fox Reality, an offshoot of the network, picked up the pilot. Three episodes are being broadcast with an option for more if they’re successful.

Carr makes the point well that the media's partnership with the over-the-line, lock-'em-sheriff poses a bunch of questions.

One question not posed lingered with me though: Since Fox is both a news channel with pretensions of journalistic authority and credibility and an anything-goes entertainment provider, we see how it is getting harder and harder to separate out real journalism from everything else.

Sure Fox Reality has different standards from Fox News, I'm sure. And Fox's entertainment division sounds like it has different ones that Fox Reality. But who's to know, even in the industry. For the public, you've got to believe one Fox is just like another -- otherwise why did they give it the same name?

This isn't an issue just for Fox. The reason it is going to be harder to separate out real journalism from everything else is that journalism operations will increasingly be housed in companies doing journalism and everything else.

Consider NBC, whose brands include NBC News itself, local stations, Bravo, Chiller, SCI FI Channel, Sleuth, Telemundo, USA Network and CNBC and MSNBC. (And recall the dust-up during the Presidential campaign as NBC News pulled back Tom Brokaw and Tim Russert from MSNBC when Keith Olbermann and Chris Matthews crossed a line?) Far-flung Disney owns ABC; CNN's part of behemoth Time Warner. These big "broadcasters" are busy recasting themselves for the web age, like Fox, and they have the deep pockets to do it.

Sure, traditional newspaper publishers seem less potentially conflicted or brand-confusing. Standalone journalistic companies, though, are getting to be the exception, where once they were the rule. Knight Ridder prided itself on being a newspaper pure play, and that's where the New York Times, Media News, McClatchy, Lee and others find themselves today. It's not a good place to be. While all ad- and circulation-based consumer media are having a tough time of it, newspapers are by far having the worst. So it helps -- financially -- if newspapers are part of a larger company, with other revenue streams.

News Corp, parent of both Fox and the Wall Street Journal, only gets a little more than 20% of its revenue from newspapers; which explains why the Journal has not suffered the cutbacks other papers have. The Washington Post drew a lucky straw with education company Kaplan, which now represents more than 50% of its profits.

We can, in fact, expect that if journalism is going to be well-funded going forward, it may be as part of larger, entertainment-oriented companies, companies that see that "content" widely distributed and over multiple platforms can be profitable. If that's the case, then Fox's little reality problem becomes a bigger one for journalism more generally. We know that journalism is different from the entertainment trades; without fear or favor is not a phrase you hear a lot in Hollywood. So, to the current mix of challenges, add this one: how do journalists call out their work in some easily noticeable way (especially online) to distinguish it from ... everything else?

Newspapers: Acute, Chronic or on Hospice

You gotta like media analysis that starts with The Simpsons.

This week, Matthew Schwartz, senior editor of ScribeMedia interviewed me, on the trials and tribulations of the news industry. His intro:

"In an episode of The Simpsons (that takes place in the not-too-distant future) local- news anchor Kent Brockman is delivering his nightly report. It’s apparent that the TV station has a new owner; Brockman’s ‘over-the-shoulder’ image reads something like, ‘CNNCBSNBCABC.’ It’s another brilliant stroke by The Simpsons’ creators, predicting mass mergers among some of the major media brands".

We touched on tipping points, newspaper valuations, best practices and the question -- unresolved -- of if the newspaper industry were in the hospital it would be on the acute, chronic or hospice floor. 

Here's the link, part of Matthew's "Print to Digital" series.

9 Questions: Business News Wars, Gary Pruitt, the Yahoo Bump and the New COOL

As I train down to D.C. for the Online News Association conference (moderating a panel hopefully titled, Optimize and Monetize, tomorrow; if you're there, say hello), the dizzying news industry news of the last week raises more questions than answers. Here's my top nine of the moment. Feel free to add to them:

• As we keep one eye out for the WSJ.com re-launch Sept. 16, I'm wondering why there's no WSJ -- or Marketwatch or Barrons -- app in the iPhone App Store. It's the place to be and be seen, show the flag and at least seem au courant. So far AP is there, with deep local, NYT has a strong, if straightforward presence, Internet Broadcasting has put together a decent aggregation product and Express is porting over its useful Palm/Blackberry product. But news company participation beyond that is weak, and not well-niched.  Will a mobile iPhone app be part of the 9/16 re-do?
• How much more prominent will video be on the WSJ site? It's halfway down now on the home page now, though still a bit higher than NYT's video display. Both text-based companies are starting to master video, but their sites seem to say: text and photos. And, though, we know the Washington Post is doing massive video training, led by Chet Rhodes, here, too, we see little front-and-center placement. News customers are getting beyond a world of  "content types" -- text, story, photo, audio, video, bar chart, etc. -- and just expect to get all the relevant info delivered on a single page, with best coverage (regardless of type) highlighted.
• New York's tabloids had a field day with the lipstick-on-a-pig nonsense (Post: "Boar War"; Daily News: "Lipstick Bungle". Will the Post be right with its data box head,  "Slim pickins"? Indeed, did one of globe's top three rich guys buy at a suitably low-price, considering? Considering among other things that the New York Times is still the top newspaper brand in the world, and that it has barely tapped markets around the world. there are about 900 million English speakers here and there, and yet the Times today derives only about 4% of its revenues from outside the US (mainly International Herald Tribune-related.) That's a big potential upside. Slim's confidence in the Times also underscores the difference in value in national/global brands (like the Times and Dow Jones, as compared to local and regional papers. The big question here is how much the buy is a strategic, long-term one, with hands largely off, and how much a Harbinger-like one, pushing for greater short-term change and divestment of non-Times brand properties?
• As newspaper market caps plummet, how great a percentage of those valuations are now built on real estate? Sam Zell's people probably know more about the land under his holdings in L.A., Chicago, Baltimore and Florida, than they do about what's going on top of the land. NYT has taken criticism for its airy new HQ, which has been valued for as much as $1B. For the industry as a whole, with goodwill being discounted daily and future revenues highly uncertain, these real estate holdings are getting to be a prominent piece of newspaper valuations.
• If Gary Pruitt's not setting the table today, then how soon will tomorrow come? The McClatchy CEO issued a statement to tamp down journalists' and analysts' saying his stepping apart from four family trusts may signify financial restructuring and/or going private. Maybe that's so -- and the move is long-planned and coincidental to the company's current stress. Pruitt had to know that the trustee change would be found by journalists, and that would start speculation. So why not get out ahead of it, with a statement? Yes, the means of restructuring are tough, but something is going to give somewhere at McClatchy, and it's hard not to see this move as one part of setting the table for it.
• Isn't Dow Jones' touting of the "Heard on the Street" expansion just another volley in the budding all-out war between WSJ and NYT over business news? WSJ made some news, gleefully talking staff expansion and iconic Heard on the Street expansion as the Times has had to mainly talk about cutbacks. Heard's expansion, and the folding in of the WSJ's "The Skeptic" blog, makes sense. It's a strategic journalism, taking a well-known column, turning it into a brand, turning loose staffers to follow the business sun around the globe and expanding its presence in print and digitally. Online, Heard still seems more newspaper-like than blog-like (how will it be handled in the redesign?). We don't get the sense of constant updating by its newly assigned staff of 12. NYT's Andrew Ross Sorkin's Dealbook is the growing competing brand -- and it may get a boost as the Times moves forward with a business and tech news upgrade of its own the end of this month.
• As the long-awaited, much-planned-for and much-trained-for Yahoo ad platform rolls out later this month with the San Francisco Chronicle and the Mercury News, how much will the platform separate the growers from the shrinkers? Many consortium companies -- more than 40% of US circulation -- have invested in sales training and re-training. Some have hired anew, all for the purpose of making the most out of the behavior-tracking Yahoo platform. They believe its power will up their local rates and gain them substantial revenue streams from selling Yahoo inventory. The rub, though, is, as is often the case, execution. Case in point: in phase one of the Yahoo/newspaper ad deals, in which buys have been enabled more manually, a few newspaper titles have gone to town, well into deep six figures, while others have practically no new revenue to show. As consortium members look at consortium benchmarks over time -- the rollout of news sites on the platform won't be completed until the end of 2009, they'll see how well, or poorly, they're performing compared to peers. As we see quarterly earnings from 2Q, 2009 on, we'll all see who's making most of the Yahoo Bump. 
• How soon before Yahoo-owned video service Maven is integrated into the consortium ad play, at least as an option? Just as readers are getting more content-type agnostic, ad buyers increasingly want more centralized ways to buy audience, whether behavioral-targeted display or pre-roll?
• How COOL is that? Could that be the budget regimen for 2009. COOL, as in expense reduction through: Clustering (having close-by properties share services), Outsourcing (you name it!), Offshoring (ad production plus) and plain old Letting Go, as in people, buildings, distribution trucks, etc. More on COOL soon.

Person Robert Thomson

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WSJ Engages NYT over Luxe Bucks

Yes, the rich are different. They may disproportionately affect which national newspaper "wins," as the Wall Street Journal increasingly targets the New York Times' readership and advertising dollars.

The latest shot in the war will be launched Saturday, as the Journal debuts its new luxe, glossy magazine WSJ. It seems to have a good start, 104 pages, trumpeting "19 new advertisers," out of 51 included in the issue. It'll be a quarterly now, with plans to go monthly in mid-'09. The Journal says that nearly half of the advertisers bought placement in all editions worldwide, and that many have signed long-term deals extending into 2009 and beyond.

Make no mistake this is one of many double-edged marketplace moves. The Journal, like all newspaper-based companies, is struggling with ad revenues overall. It needs new revenue streams, and the luxury market provides one, though no one should over-estimate the impact of just 51 advertisers. Second, though, every dollar the Journal takes out of the luxe market, it may take out of the New York Times' coffers. That's a key strategy that we'll see with each new WSJ marketplace move.

The Journal's move follows major New York Times company initiatives in the same luxe area. Consider NYT CEO Janet Robinson's comments in her June 10 comments at the Deutsche Bank Securities Media and Telecom conference:

"For example, three years ago, recognizing the strength of our position in the luxury advertising market, we seized the opportunity to redesign our Sunday supplemental magazines and rebranded them “T: The New York Times Style Magazine.” These new publications have been hugely successful with both readers and advertisers, particularly with luxury brands. Even in a softer economy, luxury advertising has continued to grow. Earlier this year, T: Women’s Fashion broke all records for the number of ad pages and, year-to-date April, luxury categories such as jewelry and fashion have grown.          

Since the introduction of “T,” we expanded its franchise in print, online and globally. Last December we introduced “T” Magazine online, which provides a unique platform for luxury brands. We have showed them how a great online environment can help them brand their products, and advertisers such as Bloomingdale’s, Gucci and LVMH Group have responded by purchasing packages through November 2008.

Last December The International Herald Tribune launched its own international “T” Style Magazine in Europe and the Middle East. Eight issues are planned for this year....

....Like The Times, The Boston Globe has introduced new print products in areas where it believes there are opportunities to garner advertising, especially in luxury categories. This includes three new magazines and a new section on money and careers."

So this is no new area for the Times, but one well-executed. The New York Times "T" brand is one we should expect to see a lot more of, in print and online.

Its efforts, and the Globe's, point the direction that WSJ glossy is headed.

I've talked with Globe editors and managers and had a chance to review their publications (Design New England, Fashion Boston, LOLA) in print. They're good ones, high in production and editorial quality. At least one -- LOLA, a women's magazine, is produced by newsroom editors. Others are produced by those working for Boston Globe Media, a business arm of the Globe. Importantly -- and here we see a future-grabbing model -- the Globe's got a cross-divisional Innovation Group that hatches and then warms up good reader-pleasing/advertiser-satisfying ideas. These luxe magazines display the flexibility that modern news companies will need. They vary in who produces them. They vary in paper quality. They vary in page size, from 12 x 21 to 7 x 9. All, though, do their jobs. (It's curious to note that the Globe is one of the few remaining dailies with an actual Sunday magazine. It apparently is doing well enough with ads -- many shelter ones -- to push on, and the magazine is almost a retro pleasure to read at this point.)

Niching, and higher-end niching, is certainly the order of the day. Our modern age lets us all specialize, readers and advertisers alike. So niching will continue apace, aided by increasingly sophisticated ad targeting. While both NYT and WSJ have enviable overall demographics for advertisers, the ability to further niche by readers' specific buying interest is what's in play here.          

With today's WSJ media splash, some have wondered about the timing of launching a luxe product in an economic downturn. The timing, though, makes a lot of sense to me.