We’ve seen this story before. Newspaper announces cuts. Pundits and experts speak out about how to fix things. Then, more cuts, then, a sell off. It doesn’t need to be that way.
SFGate.com: Chronicle to cut 25% of jobs in newsroom:
To cut costs and try to adapt to a changing media marketplace, The Chronicle will trim 25 percent of its newsroom staff by the end of the summer.
IP Democracy: Why Can’t Newspapers Get With the Program?:
If somehow the newspaper industry just understood that even now the Internet is still the wild west, they’d take the journalists they’re jettisoning and instead use them to create new web-based businesses.
Dan Gillmor: San Francisco Paper Whacks Jobs:
When Hearst bought the Chronicle years ago, it pledged to keep all the employees from the old Chronicle. Then it brought the SF Examiner employees along, and had what can only be called a bloated staff.
But the paper did improve – wow, did it improve.
The city always deserved a vastly better paper than it had. It still deserves a better paper, but the positive change has been incredible since the Hearst buyout.
Yet that didn’t translate to subscribers – circulation kept dropping, in part due to deliberate corporate decisions, and advertising didn’t recover after the burst of the tech bubble and the increasing inroads from classified-ad competitors that work better for buyers and sellers. The newspaper was said to be losing $1 million a week a year ago, an amazing number. I’ve heard that the losses were slowing, but obviously not enough to matter. (For the record, we get the Chronicle – and several other papers – delivered to our door each morning when we’re home.)
The Chronicle’s website has been among the most progressive anywhere, and it reflects the dilemma many publishers face. The site is free, with no registration requirements. There are ads, but not enough revenue to make up for the whacks to the print advertising that are hard to stop. The archives are also free and open – which I have to believe is on balance a revenue booster over the paywalled archives at most other local papers.
Reflections of a Newsosaur: Staff cuts won’t cure Chron woes:
The Chronicle’s year-to-date deficit of $165,563 per day is roughly equivalent to the annual pay and benefits of two journeyman reporters. If the paper continued losing money at the same rate every day for the rest of the year, it could fire every journalist in the joint and still not break even.
With continuing uncontrolled losses of this magnitude, the Chronicle, if it were a standalone company, would be going out of business.
The only reason the Chronicle is still around is the continuing forbearance of the Hearst Corp., a family-owned, $7 billion-a-year media conglomerate whose other newspaper, magazine and broadcasting interests are sufficiently profitable to effectively subsidize the struggling newspaper.
Not directly related, but worth a read or re-read:
Recovering Journalist: Betting on the Future:
Or this, from a Microsoft exec: “This is about the opportunity,” said Kevin Johnson, president of Microsoft’s platforms and services division. “We believe that there are tens of billions of dollars in economic value that can be generated in this industry, and we are committed to getting a bigger share of it.”
Bingo. We’re in the very early stages of Web advertising, and there’s nothing but growth ahead. That’s what Microsoft, Google and others know, and are betting on–while newspaper execs complain that the online business can’t seem to catch up to the losses on the print side.
Oh, and why didn’t a big newspaper company, or perhaps a consortium of them, step forward and buy DoubleClick or aQuantive? Good question. It would have been a very smart acquisition, a real bet on the future. The technology companies seem to have that vision. The newspaper companies apparently don’t.
A few years ago, I was privy to a conversation among board members of a newspaper-centric media outfit about the possibility of buying a major Web company (I have to fudge a few details here to protect confidences). One short-sighted board member protested, “It would cost us hundreds of millions of dollars.” But a smarter exec said, “Yeah, but if we don’t do it, in a year it will cost us a couple billion dollars.” He couldn’t convince the others, and it turns out he guessed low: The Web company was sold a year later for several billion dollars–to another technology company. Once again, the newspaper industry failed to pull the trigger on the future. Some things never change.
Publishing 2.0: The New Vertically Integrated Media And Advertising:
It’s clear now that the media and advertising industries, which thanks to Google and Web 2.0 now include the software industry, will be dominated by a new breed of company – the vertically integrated media and advertising company. Google’s AdWords created a new model by combining a media company – Google’s search results and its network of AdSense affiliate websites – with an advertising agency, i.e. advertisers buy ads directly from Google through its AdWords platform. Google also revolutionized the media and advertising business by introducing a data-driven dynamic marketplace into what had once been a market based largely on human relationships.
Doc Searls: How to Save Newspapers:
Informing is not the same as “delivering information”. Inform is derived from the verb to form. When you inform me, you form me. You enlarge that which makes me most human: what I know. I am, to some degree, authored by you.
What we call “authority” is the right we give others to author us, to enlarge us.
The human need to increase what we know, and to help each other do the same, is what the Net at its best is all about. Yeah, it’s about other things. But it needs to be respected as an accessory to our humanity. And terms like “social media”, forgive me, don’t do that. (At least not for me.)
norgs.pbwiki.com: The Norgs Unconference Statement Of Principles:
7. The Internet ‘disintermediates.’ Business models based on scarcity of media and high barriers to production and distribution, are not only threatened, but are terminal. It’s change or die time for broadcast TV, traditional record companies, and yes, newspaper companies.