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November 2007

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The New(s)Paper Chase
A story of disruptive technology and disinformation

“Paint it bleak” screams the cover headline on the October Editor and Publisher.

Inside the lead article chronicles shrinking circulation, revenue downturns and staff cuts punctuated by hand wringing quotes from metro daily publishers and media analysts.

In the same edition is a 20-page pullout on “Suburban and Community Newspapers the growth segment of the newspaper industry.” It explains why in a world exploding media options local papers continue to grow as a trusted source of local news and advertising.

The schizophrenic reality is that both stories are absolutely true. A portion of the industry is sinking while in a world of fragmented page views, XM radio, Tivo and YouTube other papers are doing better than ever.

Like George Bush waiting for Manhattan to flood before acknowledging global warming, publishers are latecomers to these realities. And I suggest this disconnect, comes from disruptive technology and disinformation often repeated by publishers themselves.

The fact there has not been one net paid subscriber added to newspapers since 1986 while the population grew by 35 million and that number of 20-somethings reading papers has been cut in half should have been a hint.

The sale of Knight Ridder, Tribune on the block and Scripps Howard (Rocky Mountain News and Boulder Daily Camera) telling Wall Street it wants out of newspapers suggest some companies are getting it and some board rooms are panicking. That creates uncertainty; and when there is uncertainty investors and advertisers seek shelter elsewhere.

If most of it is true the disconnect for publishers is that printed news does not have the same relevance or timeliness it once did, home delivery is down and advertisers will not pay more for less.

However, “dead as a dinosaur” pronouncements come from defining newspapers in 1950 terms of paid audited circulation. That’s like pronouncing the magazine industry dead with the demise of Life, Look and the Saturday Evening Post.

From street corners to market research there is ample evidence that local papers are better trusted, better read and growing. *

A more palatable analogy for aging publishers is that papers are like movie studios in the 40’s — fearing theaters would be emptied by boob tube viewers. Unfounded fears since not only are there still movie goers, but adaptable studios morphed into the content providers for TV, DVD’s streaming video and who knows what next?

Before subscribing to this you should allow for my ink-in-the-veins bias as a media-observer of the Colorado and national newspaper scene for 30 years. Except for some years on an ad agency board and being a founding board member of Channel 12 those labors have all been in print.

Disruptive stories

The apparent enemy if you must beat last year’s numbers at a newspaper is the World Wide Web. From Craig’s list for classifieds, eHarmony for personals, auto-shopping sites to the blogosphere there are plenty of villains to name.

Ironically the announced savior for newspapers is —wait for it— the Internet.

“Handle the sobering news with a drink,” is the message publishers get from consultant after seminar.

The American Press Institute has perhaps the most interesting research to date on how the industry can respond, and most often doesn’t, in their Newspaper Next report. ( HYPERLINK "" )

Their premise is that when disruptive technology (think digital cameras, cell phones, ipods, etc.) emerges most established industries (Kodak, AT&T, Sony) respond by giving the market umpteen reasons that staying with their established product is better.

In the newspaper world this translates into a decade spent trying to put some version of news next to advertising on a web page that looks a lot like a newspaper. Turns out the 20-somethings who don’t pick up a paper from a rack aren’t interested in one on the screen.

Ten or even two years ago you could hear publishers at newspaper conventions saying things like “there will always be a need for newspapers” or “there is no on really making money on their web sites; we’ll do that when it’s profitable.”

Too late these folks found the train had left the station — and most of them didn’t hear the whistle Google. Now publishers say, “our future is on the Internet” while trying to convince advertisers to buy the combined print-web audience they once disdained.

“All the news that’s fit to click” is the new campaign for the web site of the New York Times. It is just one of thousands such efforts to retain market share.

Publishers are not alone in this chase the customer into the web maze game. From Wal-Mart to Wall Street, cataloguers to cable channels, every entity is touting its web presence as the wave of the future.

Wired or disconnected?

Last month at the SNA convention I took a meeting with Razorfish.

Younger agency savvy readers will wonder why I, like several larger market publishers, had never heard of this giant web ad-buying agency owned by Microsoft. After a lecture about what papers must do I asked the major account exec what she thought of newspaper web efforts such as YourHub.

“What’s YourHub?” she queried.

I took some guff from fellow Colorado publishers when I said reverse publishing was a “bold experiment.” I know that PR types love it, while reportedly staffers at Post-News call it “YourStub,” but now every paper is seeking a cyber solution.

After web to print an often-heard mantra is “community journalism,” but papers are learning, along with TV and radio, that readers who don’t have time for the paper are hard to coax into becoming free journalists.

And big Internet companies have also found trying to capture local news (Microsoft Sidewalk, AOL Digital Cities) with web dollars difficult.

Monsters in the closet?

That’s not to dispute that from Craig’s list to Monster to Google traditional advertising isn’t going web’s way.

Papers which charged HR departments many times what they do auto dealers for the same inch of advertising and created some of their own demons are now using partnerships with Yahoo and CareerBuilder to create value added. Even so those dollars have proved elusive to papers and monsters alike as industries turn to their own sites.

Advertisers and agencies are faced each day with more complicated choices.

Audit bureaus and rating services that live and die by providing reliable info find themselves redefining readers and views with every report. Can you say Buzzmetrics?

The spyders and “bots”of search engines give more false positives than Elvis sightings.

Good news is free

In the center of this gloom and doom has been a silver lining trying to shine – free newspapers. It doesn’t take market research to see the growing number of community, niche or alternative papers — often in a variety of languages — the evidence is on every street corner. Free dailies are the latest fastest growing segment of this trend world-widen and Colorado has been at the forefront.

This is publishing blasphemy I know, but a system built around delivering the same product at the same time to the same location is inherently mismatched to reader patterns. Readers now seek what they want where they want when they want and free rack papers are an efficient way to deliver that in print.

TV faces the same issue with cable and 24-hour news versus the 6 o-clock news.

In Aurora we publish free, paid, home and rack delivered papers daily and weekly so I don’t have a horse here, but I have made many presentations to agencies explaining that free papers are better read, have less waste and higher pass along readership after which I’m asked what our paid circulation is? They would never ask if a TV ad was seen on a paid channel or broadcast

At NSA in Chicago I said it was like giving a vegetarian lecture to a butchers convention. If you have spent most of your career selling, slicing and packaging meat it is hard not to ask, “where’s the beef.”

The schizoid attitude about paid vs. free includes daily companies in NY, DC, Chicago, St. Louis, Baltimore and Cleveland heavily invested in free papers and many newspaper associations too.

Meanwhile, the largest newspaper experiments since USA Today are free dailies in Baltimore, Washington DC and San Francisco headed by ex-Post publisher Ryan McKibbon for non other than Philip Anschutz.

Going up the down escalator

Last month I attended the NNA and SNA conventions where some publishers are reporting slower growth but few are talking apocalypse. The deeper you go into the heartland the better the stories get. Double digit growth (including local web sites) and margins bankers love are the rule.

Their major complaint is dealing with advertisers who assume from national stories that all newspapers have fallen on hard times and are losing readers. Although I suspect while geography and local franchises may protect parts of the industry ultimately they will have to deal with technology and behavioral changes too.

However that plays out newspaper, err I mean communication, companies still have the advantage of local news and ad gathering networks.

So, don’t paint newspapers’ future “bleak,” color it challenging and confusing.

As for the next publisher who claims to know where the industry is going — they’re wrong.

*Belden Research

H. HARRISON COCHRAN, is Publisher of the Aurora Sentinel, daily and weekly, the Buckley Guardian and Chairs Mile High Suburban Press group of 19 papers surrounding Denver.  He is on the National Newspaper Association board, Past President of  Suburban Newspapers of America,  Past Director of Colorado Press , SPJ and Boccard Agency and a founding board member of Channel 12 KBDI.

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