Here’s A New Business Model That Newspapers Should Snap Up –Appoint A Video Business Development Manager

Philip M. Stone July 23, 2008

Advertisers are turning increasingly to the Internet, right? Readers are turning increasingly to the Internet, right? And Internet users like to access video via their broadband connections, right? So doesn’t it make sense for newspapers to encourage their advertisers to create video advertising for the newspaper web site? Right!

And that’s exactly what the Times-Dispatch (Richmond, Virginia – Media General) is doing in affiliation with its inRich.com web site. Thomas Silvestri, president and publisher of The Times-Dispatch, described the strategy, “We’ve made a lot of strides with news video. Now we need to advance video as an effective tool for advertisers to reach customers and keep the cash register ringing."

inRich.com General Manager Michael Fibison added, “We will use video to better serve our advertisers ranging from big companies to mid-size businesses to mom-and-pop operations. We are eager to learn as we innovate in this expanding medium."

The unit is to be headed by Rick Thornton, a senior editor at the newspaper since 2004, and will focus entirely on advertising. It will have videographers and sales representatives. How many newspapers out there have video sales departments?

In this, our weekly look at new business practices (we won’t mention the multiple mass layoffs – more than 500 in the last week alone – but rather here is what being done to keep readers and bring in additional revenues:

• The Sacramento Bee (McClatchy flagship) has announced a redesign for July 29 that will include daily color comics, a doubling of daily stocks listings, and more coverage of local food and wine. And the obituaries, read mostly by older folks, will be in a larger type size. But the redesign also includes narrowing the page width, dumping some sections and correspondingly a smaller news staff. “Our focus is on quality rather than quantity,” wrote Editor Melanie Sill.

• Modesto, California is some 70 miles (112 kms) south of Sacramento. The circulation of the Modesto Bee (McClatchy) is 78,001 and the circulation of the Sacramento Bee (McClatchy) is 268,755. The Modesto newspaper says it has done its homework and determined that in spite of $4 a gallon gas it will be less expensive to print the newspaper in Sacramento and have it trucked down to Modesto each day and it plans to do that by September.  Publisher Margaret Randazzo explained, “it is clear that this move makes both financial and operational sense, not the least being to avoid future printing capital expenses.”  The newspaper will have its own dedicated press in Sacramento that offers greater color and page capacity. “This initiative responds to our declining revenues and the need to find new and efficient business models,” Randazzo said in a staff memo. “It is essential for The Bee — as it is for any business — to adapt to changing business conditions, even though change can be difficult.” No explanation what the change means to editorial deadlines. Oh, yes, it will cause 80 full-time job losses in Modesto.

• The Atlanta Journal-Constitution (Cox) is eliminating more separate community sections and coverage from those communities will now be included in expanded metro and sports sections. The newspaper said in a statement that a 35% increase in newsprint price means, “the cost of producing the separate community sections has become ‘prohibitive’.” As an added measure it is also laying off 8%of staff – some 189 employees.

• The Wisconsin State Journal (Lee Enterprises) says starting in August the Monday edition will have just two sections instead of the normal four on a trial basis. The first section contains local, national and international news and the second section will have sports and classifieds.  If not too many complaints the section cutback might be extended to Tuesdays and Wednesdays, too.

• The Morning Call, (Tribune) Lehigh Valley, Pennsylvania, will close two bureaus, consolidate other offices, eliminate three daily editions and cut nearly a quarter of its newsroom jobs. Timothy R. Kennedy, publisher, president and chief executive officer, explained succinctly, “'When it goes south, the whole business model goes with it.'' Five zoned daily editions, which have existed since 1981, will be reduced to two. The newspaper will maintain is state capital Harrisburg bureau and its Washington, D.C. bureau. It says it has lately been concentrating its coverage based on reader feedback and has seen a 7% jump in readership.

• The Seattle Times Company, so far unsuccessful in selling its Blethen, Maine Newspapers has filed suit against a union there because it can’t find a buyer if continuation of the union contract is part of the deal, and the union won’t give up its contract. The newspaper company says it is in danger of not being able to meet debt payments, and is warning of further job cuts. The debt situation is so precarious that debt holders must give permission for any extraordinary costs such as severance payments. The Times Company borrowed $230 million in 1998 to purchase three Maine dailies and a Web site. Since then the company has defaulted twice and the papers are said to be worth a small fraction of that $230 million.

• The Minneapolis Star Tribune says it wants to arm its readers with the same raw information that it turns into stories and it has combined various databases and built new ones that readers can access on the Internet via its new InfoCenter. Editor Nancy Barnes wrote, “What can you find at infoCenter? I logged on first thing Wednesday to see what homes were selling for in my neighborhood -- I was curious to see how much the housing crisis had affected my community. I found out how my child's schools had done in the latest rounds of tests, and then searched the activity calendar to see if there were any family-oriented events. You can also see what many public employees make (salaries), and how publicly traded companies pay their executives and even where to find a farmer's market. How you use the service depends entirely on your own personal information needs. In most cases, except one, we put all the raw data online. In the case of the database of public employees and their salaries, we published the salaries of department heads, publicly-elected or appointed officials, management leaders and anyone making over $100,000. We will, before long, add lower-paid employees.” She said the site got more than 300,000 page views in the first 48 hours. There have been complaints, however, that listing salaries, while “legal” is an invasion of privacy.

• As part of its downsizing, the Los Angeles Times (Tribune) is ceasing its Sunday Book Review, migrating a few reviews instead to its Sunday Calendar section. Four former Book Review editors joined in a letter of complaint. “To be sure, no section of any newspaper can remain hostage to past ways of covering the news of the day. We are convinced, however, that the way forward is to increase coverage of our literary culture -- a culture that every day is more vibrant and diverse in the thriving megalopolis of Los Angeles. Angelenos in growing number are already choosing to cancel their subscriptions to the Sunday Times. The elimination of the Book Review, a philistine blunder that insults the cultural ambition of the city and the region, will only accelerate this process and further wound the long-term fiscal health of the newspaper.”

• The Commercial Appeal (E.W. Scripps) in Memphis, Tennessee is shrinking its print newspaper to a 46-inch web (11.5 inches page width, 292mm) from 50 inches (basically Berliner size at 12.5 inches, 315mm). Its own story said the move was in reaction to a 30% increase in newsprint pricing while advertising revenue is down about 15%. The reduced width will save about 6% consumption. "The key issue for us is to make sure that the core news coverage continues,” said Editor Chris Peck. "That will mean the need to edit the paper more carefully and also to encourage readers to go online more often when we have additional details that might not fit into the print edition.”Those two tasks are certainly challenges, but my hope is that overall the news report will be more easy to navigate and, in fact, will match up with what appears to be a long-term trend that digital delivery will be an ever bigger part of the news business."

And finally there is some dismal reading from the Project in Excellence in Journalism that took a very close look at what has been going on in newsrooms over the past three years. Headlines around the world centered on the finding that more than half the editors surveyed believe they are producing an improved product, and yet the raw results are:

• Newsroom staff had been cut at 85% of the 100,000 plus circulation dailies, and at 52% of the less than 100,000 circulation papers.

• Some two-thirds of the newspapers have decreased foreign news coverage, while more than one-half have cut back on national coverage and business coverage has been reduced by one-third of the newspapers.

• There is more local and regional coverage, but because of newsroom cutbacks the quality is somewhat questionable.

• Story length has been cut way back.

• While new, young, less paid journalists are versatile, tech-savvy and have high energy, editors bemoan as their greatest loss the veterans who took with them talent, wisdom and institutional memory.

• Only 5% of the editors said they were very confident how their newsrooms would look five years from now. “I feel I’m being catapulted into another world, a world I don’t really understand,” said Virginian–Pilot Editor Denis Finley. “It’s scary because things are happening at the speed of light. The sheer speed (of changes) has outstripped our ability to understand it all.”