The Internet Is No Substitute for the Dying Newspaper Industry

The Internet Is No Substitute for the Dying Newspaper Industry
By Chris Hedges, Truthdig
http://www.alternet.org/story/92284/

The decline of newspapers is not about the replacement of the antiquated technology of news print with the lightning speed of the Internet. It does not signal an inevitable and salutary change. It is not a form of progress. The decline of newspapers is about the rise of the corporate state, the loss of civic and public responsibility on the part of much of our entrepreneurial class and the intellectual poverty of our post-literate world, a world where information is conveyed primarily through rapidly moving images rather than print.

All these forces have combined to strangle newspapers. And the blood on the floor, this year alone, is disheartening. Some 6,000 journalists nationwide have lost their jobs, news pages are being radically cut back and newspaper stocks have tumbled. Advertising revenues are dramatically falling off with many papers seeing double-digit drops. McClatchy Co., publisher of the Miami Herald, has seen its shares fall by 77 percent this year. Lee Enterprises Inc., which owns the St. Louis Post-Dispatch, is down 84 percent. Gannett Co., which publishes USA Today, is trading at nearly a 17-year low. The San Francisco Chronicle is now losing $1 million a week.

The Internet will not save newspapers. Although all major newspapers, and most smaller ones, have Web sites, and have had for a while, newspaper Web sites make up less than 10 percent of newspaper ad revenue. Analysts say that although Net advertising amounts to $21 billion a year, that amount is actually relatively small. So far, the really big advertisers have stayed away, either unsure of how to use the Internet or suspicious that it can't match the viewer attention of older media.

Newspapers, when well run, are a public trust. They provide, at their best, the means for citizens to examine themselves, to ferret out lies and the abuse of power by elected officials and corrupt businesses, to give a voice to those who would, without the press, have no voice, and to follow, in ways a private citizen cannot, the daily workings of local, state and federal government. Newspapers hire people to write about city hall, the state capital, political campaigns, sports, music, art and theater. They keep citizens engaged with their cultural, civic and political life. When I began as a foreign correspondent 25 years ago, most major city papers had bureaus in Latin America, the Middle East, Europe, Asia and Moscow. Reporters and photographers showed Americans how the world beyond our borders looked, thought and believed. Most of this is vanishing or has vanished.

We live under the happy illusion that we can transfer news-gathering to the Internet. News-gathering will continue to exist, as it does on this Web site and sites such as ProPublica and Slate, but these traditions now have to contend with a new, widespread and ideologically driven partisanship that dominates the dissemination of views and information, from Fox News to blogger screeds. The majority of bloggers and Internet addicts, like the endless rows of talking heads on television, do not report. They are largely parasites who cling to traditional news outlets. They can produce stinging and insightful commentary, which has happily seen the monopoly on opinion pieces by large papers shattered, but they rarely pick up the phone, much less go out and find a story. Nearly all reporting -- I would guess at least 80 percent -- is done by newspapers and the wire services. Take that away and we have a huge black hole.

Those who rely on the Internet gravitate to sites that reinforce their beliefs. The filtering of information through an ideological lens, which is destroying television journalism, defies the purpose of reporting. Journalism is about transmitting information that doesn't care what you think. Reporting challenges, countermands or destabilizes established beliefs. Reporting, which is time-consuming and often expensive, begins from the premise that there are things we need to know and understand, even if these things make us uncomfortable. If we lose this ethic we are left with pandering, packaging and partisanship. We are left awash in a sea of competing propaganda. Bloggers, unlike most established reporters, rarely admit errors. They cannot get fired. Facts, for many bloggers, are interchangeable with opinions. Take a look at The Drudge Report. This may be the new face of what we call news.

When the traditional news organizations go belly up we will lose a vast well of expertise and information. Our democracy will suffer a body blow. Not that many will notice. The average time a reader of The New York Times spends with the printed paper is about 45 minutes. The average time a viewer spends on The New York Times Web site is about seven minutes. There is a difference between browsing and reading. And the Web is built for browsing rather than for reading. When there is a long piece on the Internet, most of us have to print it out to get through it.

The rise of our corporate state has done the most, however, to decimate traditional news-gathering. Time Warner, Disney, Rupert Murdoch's News Corp., General Electric and Viacom control nearly everything we read, watch, hear and ultimately think. And news that does not make a profit, as well as divert viewers from civic participation and challenging the status quo, is not worth pursuing. This is why the networks have shut down their foreign bureaus. This is why cable newscasts, with their chatty anchors, all look and sound like the "Today" show. This is why the FCC, in an example of how far our standards have fallen, defines shows like Fox's celebrity gossip program "TMZ" and the Christian Broadcast Network's "700 Club" as "bona fide newscasts." This is why television news personalities, people like Katie Couric, have become celebrities earning, in her case, $15 million a year. This is why newspapers like the Los Angeles Times and Chicago Tribune are being ruthlessly cannibalized by corporate trolls like Sam Zell, turned into empty husks that focus increasingly on boutique journalism. Corporations are not in the business of news. They hate news, real news. Real news is not convenient to their rape of the nation. Real news makes people ask questions. They prefer to close the prying eyes of reporters. They prefer to transform news into another form of mindless amusement and entertainment.

A democracy survives when its citizens have access to trustworthy and impartial sources of information, when it can discern lies from truth. Take this away and a democracy dies. The fusion of news and entertainment, the rise of a class of celebrity journalists on television who define reporting by their access to the famous and the powerful, the retreat by many readers into the ideological ghettos of the Internet and the ruthless drive by corporations to destroy the traditional news business are leaving us deaf, dumb and blind.

We are cleverly entertained during our descent. We have our own version of ancient Rome's bread and circuses with our ubiquitous and elaborate spectacles, sporting events, celebrity gossip and television reality shows. Societies in decline, as the Roman philosopher Cicero wrote, see their civic and political discourse contaminated by the excitement and emotional life of the arena. And the citizens in these degraded societies, he warned, always end up ruled by a despot, a Nero or a George W. Bush.

Chris Hedges, who graduated from Harvard Divinity School and was for nearly two decades a foreign correspondent for The New York Times, is the author of "American Fascists: The Christian Right and the War on America."

For papers, online's still a world apart

For papers, online's still a world apart

Media buyers want to see integrated ad packages

By Lisa Snedeker
Jun 25, 2007


For the longest time, newspapers were confused by the web, and frankly annoyed, irked that they were having to post stories for free that print subscribers were having to pay for.

But most publishers have moved a long way in understanding the longer-term strategic value of their web sites.

While they're still not sure how or whether internet advertising will ever make up for losses of print revenue, they know they must invest. They need to build up their online offerings, and they must also integrate them with their print editions, making them that much more attractive to advertisers.

Yet very few papers have yet to pull it off, just a handful. And the fear now is that time is running out.

A new JupiterResearch study on media consumption shows that people are spending more time online but they are doing so at the expense of newspapers. They are going elsewhere. The worry is that advertisers will follow.

The value of integrating print and web is in being able to offer advertisers combo deals that tie them into the paper. That means deals that are flexible, easy to understand, and priced in a way that makes them that much more attractive than anything the competition can come up with.

It's doable. The devil seems to be in the transition. All but a few papers continue to sell print and online separately, through different departments, each with its own rate card.

“I don’t know that newspapers have it 100 percent right yet. They are still trying to figure out structure and price to make those multimedia buys," says Randy Bennett, vice president of audience and new business development for the Newspaper Association of America.

And Bennett allows that there's a real need for it. “From the advertisers’ side, there’s particular interest in trying to change the media mix and moving money online,” he says.

A recent survey by the Newspaper National Network found that 74 percent of their customers felt newspapers should offer integrated packages. NNN sells advertising for more than 1,500 newspapers across the country.

A similar Media Life survey a year ago found much the same thing. Media buyers regarded them a top priority, and a far bigger story, way ahead of the circulation issues that dominate so much of the coverage of newspapers.

The absence of integrated ad deals was a major source of frustration for media buyers.

Little seems to have changed in a year.

“We are not being approached with combo packages as of now,” says Mike Monroe, vice president of media and advertising operations at Macy’s, which advertises in four dozen newspapers and is one of the Los Angeles' largest advertisers. “Frankly, more times than not, we are the ones pushing bundling a print campaign with their (newspapers) online property.”

There are exceptions, of course: The New York Times, The Wall Street Journal and The Tampa Tribune are among those cited for offering integrated advertising packages across print and online platforms.

Most newspapers continue to see online as value-added, something to tack onto a print buy. Print is where the big dollars are, and there's where the interest is too.

As Bennett suggests, the problem is working out the details of a truly integrated buy, in which media buyers could move and choose from column A and column B and shift dollars back and forth as plans changed.

That's a lot harder to create than a bundled package with a single price and no flexibility, which is exactly what buyers do not want, says Jason Klein, president and chief executive officer of the Newspaper National Network.

“The print and the online package should not be stapled together but rather built using elastic bands for flexibility," Klein says.

“There is pressure from consumers and the market that newspapers have to be integrated to build that, even if it means they have to retrain their work force,” Klein says. “Change is never easy, but it clearly needs to be done.”

But one buyer at a top agency believes things have improved. She's Jouette Travis, executive vice president and managing director of Dallas-based Carat USA.

“Newspapers are getting better about selling combined print/online packages, and we are responding by having our internal newspaper and online teams make joint evaluations,” she says. "This has resulted in some new programs and begins to pave the way for a migration to the future of newspapers. It's very exciting to see publishers getting into this marketplace."

All-out outsourcing

All-out outsourcing
Alan Mutter
http://newsosaur.blogspot.com/

Struggling to sustain their traditional profitability amid weakening sales, newspaper publishers are looking to outsource everything from composing ads and printing papers to producing content and answering the phones.

After nipping and tucking headcount in newsrooms over the last few years, publishers appear to be poised to eliminate a significantly greater number of jobs in their plants by focusing on areas that previously were immune to cutbacks.

The initiative likely to claim the largest number of positions in the near future is the outsourcing of advertising composition to places like India and other low-wage countries.

In light of the apparent success of a pilot ad-outsource program at the Media News Group properties in Northern California, publishers like Gannett, McClatchy, the New York Times Co. and Scripps are considering whether they, too, should export such duties to offshore vendors, according to insiders familiar with the discussions.

These talks may or may not result in a decision to outsource jobs at any given property. But, human costs aside, the economics are powerfully persuasive.

Newspapers sending ad production offshore typically can reduce payroll costs by some 45%, says Robert Berkeley, president of Express KCS, one of the outsourcing companies. Thus, a paper could cut its costs to $30,000 a year per outsourced worker from $55,000 for an American doing the same job. These savings are even higher in unionized metro environments, where papers are struggling the hardest to sustain their margins.

The Columbus (OH) Dispatch was among the first to shift ad production to India, eliminating 90 jobs from a paper with daily circulation of 231,355. Assuming savings of $25k per employee, the paper should be able to add roughly $2.25 million a year to its bottom line.

Putting it another way: If a paper paid each departing employee a generous half-year of severance, the outsourcing project would begin to pay for itself in little more than 12 months – a terrific return on investment.

In what may be a harbinger of future initiatives elsewhere in the country, the San Francisco Chronicle has signed a 15-year contract with a Canadian company to begin printing the paper in in a new plant being constructed by early 2009. The opening coincides with the termination of the contract covering the newspaper’s 230 unionized press operators. When the new plant opens, their jobs will be gone.

While not outsourcing their production altogether, companies like the New York Times, Gannett, Media News and Journal Register have consolidated the printing and mailroom operations among certain of their geographically contiguous properties. In New Jersey, 200 production positions were eliminated when Advance Publications opened a plant to combine the production of the Newark Star Ledger and the Trenton Times.

While outsourcing production is complicated and not always feasible, the easiest jobs to shift are those of the people who work in telephone rooms or perform accounting, billing, accounts payable, human resources and other clerical functions.

Many newspaper groups already funnel want-ad and circulation calls to regional or national centers, where a single group of workers serving multiple time zones is far more efficient than a team dedicated to a single market. Many chains also have either consolidated clerical functions at in-house service bureaus or outsourced them to domestic vendors.

Sending call-center and clerical work offshore can shave 25% to 30% off the present costs of such operations, according to Gartner Research, a private firm. The New York Times and Boston Globe, among others, are each sending 40 to 50 clerical jobs to offshore contactors.

Even editorial and online operations are not immune from outsourcing.

Knight Ridder had a plan to create regional copy desks to handle headlines and layouts for groups of newspapers, a concept that was shelved prior to the sale of the company last year. Preposterous as the idea might sound, this is exactly what is being implemented in New Zealand by the publisher of the country’s largest daily and several other publications.

APN News and Media, a division of Britain’s Independent News & Media, is outsourcing about 70 jobs to an Australian company, according to Deutsche Presse-Agentur. If it works well, Independent News may extend the program to its titles in England and Ireland.

Reuters has more than 300 journalists in India writing many of the routine stories on its financial wires, according to MediaGuardian. Reuters has said it may increase the size of the Indian staff to 1,500 writers, though this could be affected by the potential merger with Thomson Corp.

And today's Los Angeles Times reports that a hyper-local website in Pasadena (not affiliated with a newspaper) has hired two writers in India, who, among other things, will cover city council meetings via webcam.

As valuable as Internet operations are to the future of newspaper companies, some publishers are having at least a portion of the work done overseas. London’s Financial Times, for example, relies on a staff in the Philippines to help edit and maintain its web site.

With offshore development, testing, hosting and technical support common in the information-technology sector, it is only logical that newspapers could achieve additional economies by moving – or expanding – many of these functions abroad.

When everything from designing buildings to analyzing X-rays can be performed by lower-paid professionals in another part of the world, there’s no reason to believe newspapers can avoid the workforce shake-ups that have jolted most other industries.

Institutional inertia and economic self-satisfaction have maintained the status quo until now. As an increasingly challenging business environment forces newspapers out of their comfort zones, many dedicated workers, unfortunately, will be forced out of theirs, too.

All-out outsourcing

All-out outsourcing
Alan Mutter
http://newsosaur.blogspot.com/

Struggling to sustain their traditional profitability amid weakening sales, newspaper publishers are looking to outsource everything from composing ads and printing papers to producing content and answering the phones.

After nipping and tucking headcount in newsrooms over the last few years, publishers appear to be poised to eliminate a significantly greater number of jobs in their plants by focusing on areas that previously were immune to cutbacks.

The initiative likely to claim the largest number of positions in the near future is the outsourcing of advertising composition to places like India and other low-wage countries.

In light of the apparent success of a pilot ad-outsource program at the Media News Group properties in Northern California, publishers like Gannett, McClatchy, the New York Times Co. and Scripps are considering whether they, too, should export such duties to offshore vendors, according to insiders familiar with the discussions.

These talks may or may not result in a decision to outsource jobs at any given property. But, human costs aside, the economics are powerfully persuasive.

Newspapers sending ad production offshore typically can reduce payroll costs by some 45%, says Robert Berkeley, president of Express KCS, one of the outsourcing companies. Thus, a paper could cut its costs to $30,000 a year per outsourced worker from $55,000 for an American doing the same job. These savings are even higher in unionized metro environments, where papers are struggling the hardest to sustain their margins.

The Columbus (OH) Dispatch was among the first to shift ad production to India, eliminating 90 jobs from a paper with daily circulation of 231,355. Assuming savings of $25k per employee, the paper should be able to add roughly $2.25 million a year to its bottom line.

Putting it another way: If a paper paid each departing employee a generous half-year of severance, the outsourcing project would begin to pay for itself in little more than 12 months – a terrific return on investment.

In what may be a harbinger of future initiatives elsewhere in the country, the San Francisco Chronicle has signed a 15-year contract with a Canadian company to begin printing the paper in in a new plant being constructed by early 2009. The opening coincides with the termination of the contract covering the newspaper’s 230 unionized press operators. When the new plant opens, their jobs will be gone.

While not outsourcing their production altogether, companies like the New York Times, Gannett, Media News and Journal Register have consolidated the printing and mailroom operations among certain of their geographically contiguous properties. In New Jersey, 200 production positions were eliminated when Advance Publications opened a plant to combine the production of the Newark Star Ledger and the Trenton Times.

While outsourcing production is complicated and not always feasible, the easiest jobs to shift are those of the people who work in telephone rooms or perform accounting, billing, accounts payable, human resources and other clerical functions.

Many newspaper groups already funnel want-ad and circulation calls to regional or national centers, where a single group of workers serving multiple time zones is far more efficient than a team dedicated to a single market. Many chains also have either consolidated clerical functions at in-house service bureaus or outsourced them to domestic vendors.

Sending call-center and clerical work offshore can shave 25% to 30% off the present costs of such operations, according to Gartner Research, a private firm. The New York Times and Boston Globe, among others, are each sending 40 to 50 clerical jobs to offshore contactors.

Even editorial and online operations are not immune from outsourcing.

Knight Ridder had a plan to create regional copy desks to handle headlines and layouts for groups of newspapers, a concept that was shelved prior to the sale of the company last year. Preposterous as the idea might sound, this is exactly what is being implemented in New Zealand by the publisher of the country’s largest daily and several other publications.

APN News and Media, a division of Britain’s Independent News & Media, is outsourcing about 70 jobs to an Australian company, according to Deutsche Presse-Agentur. If it works well, Independent News may extend the program to its titles in England and Ireland.

Reuters has more than 300 journalists in India writing many of the routine stories on its financial wires, according to MediaGuardian. Reuters has said it may increase the size of the Indian staff to 1,500 writers, though this could be affected by the potential merger with Thomson Corp.

And today's Los Angeles Times reports that a hyper-local website in Pasadena (not affiliated with a newspaper) has hired two writers in India, who, among other things, will cover city council meetings via webcam.

As valuable as Internet operations are to the future of newspaper companies, some publishers are having at least a portion of the work done overseas. London’s Financial Times, for example, relies on a staff in the Philippines to help edit and maintain its web site.

With offshore development, testing, hosting and technical support common in the information-technology sector, it is only logical that newspapers could achieve additional economies by moving – or expanding – many of these functions abroad.

When everything from designing buildings to analyzing X-rays can be performed by lower-paid professionals in another part of the world, there’s no reason to believe newspapers can avoid the workforce shake-ups that have jolted most other industries.

Institutional inertia and economic self-satisfaction have maintained the status quo until now. As an increasingly challenging business environment forces newspapers out of their comfort zones, many dedicated workers, unfortunately, will be forced out of theirs, too.

Newspaper Sites Growing Faster Than Web Overall

Newspaper Sites Growing Faster Than Web Overall
by Erik Sass, Tuesday, May 8, 2007 6:00 AM ET

THE AUDIENCE FOR NEWSPAPER WEB sites is growing faster percentage-wise than the Internet audience at large, according to a study commissioned by the Newspaper Association of America and released on Monday.

The study, done by Nielsen//NetRatings, found a monthly average of 59 million people visiting Web sites in the first quarter of 2007--representing 5.3% growth over the same period of 2006. Meanwhile, the pool of total Internet users in the United States grew about 2.7%.
These numbers "validate the industry's investment in digital innovation, and the ongoing attraction consumers have to newspapers online," said NAA president and CEO John F. Sturm in a statement. "Newspaper publishers have aggressively transformed their business models, continually providing ground-breaking content to consumers with their expanding digital portfolios."

What's more, the NAA data paints an appealing portrait of newspaper's Web audiences from an advertiser perspective, with the average user having a higher household income than the norm, according to Nielsen//NetRatings: 11.9% of Web users who visited a newspaper Web site have an income of $150,000 or more, compared to 9.3% of the overall Web population. Users of newspaper Web sites show a greater propensity to shop online, with 88.1% making an online purchase in the last six months versus 78.9% on average. They are more likely to hold a professional or managerial-level job, with 41% falling into this category versus 32.7% of the general Web population. In terms of Web behavior patterns, 73% are daily Web users versus 57.8% overall, while 42% have viewed streaming video on the Web in the last 20 days, versus just 27.4% for the average Web user.

All that is good news for newspapers, according to Shawn Riegsecker, chief executive officer of Centro, a leading ad network for online newspaper sites: "As newspapers continue to invest in their digital properties and produce world-class content, I predict they will capture a much larger percentage of the overall online pie."

Although their online audiences are still growing at impressive rates, newspaper companies are having a hard time monetizing those audiences at levels high enough to offset losses from print advertising declines. Worse, the rate of revenue and income growth at many newspaper Web sites appears to have slowed in the first quarter. Internet revenue rose 21.6% at the New York Times Company, down from 39% average growth in 2006. At the Tribune Company, interactive revenues rose 17% to $60 million--down from a 29% growth increase in 2006. And the Washington Post saw revenues rise just 10%, compared to 34% for the first quarter of 2006, on a year-over-year basis.