Sunday, March 3, 2013

The fall of the Times-Picayune

The Columbia Journalism Review published a thorough analysis of the changes made to the New Orleans Times-Picayune. The article reports on the changing emphasis from a model based on journalism to one based on clicks. However, the article points out revenue plunged 40% over the last few years thus begging the question: how can a newspaper stay in business if it can't make money? The CJR reports:

"The secret meetings in May led to a bloodletting in June. Advance Publications laid off nearly half the paper’s newsroom, halted daily publication of the Picayune, and implemented a business and news model that shifts the focus of the operation to its free news website, NOLA.com....

American newspapers have lost more than half their advertising dollars in the last five years, an existential threat to an industry that in 2007 depended on ads for three-fourths of its revenue. The Times-Picayune is no exception to the trend. Its advertising has plunged 42 percent since 2009, according to an analysis of figures its publisher gave The Wall Street Journal in September...

if anything was broken at the Times-Picayune, it wasn’t the newsroom. The paper covered its metro area as well as any in the country, a mix of broad daily coverage and ambitious enterprise reporting that effected change, despite a news staff already down roughly a third from the 270 it employed before Hurricane Katrina. It could be counted on to unearth the foibles and corruption of local politicians, cover the Saints and Uptown social events like a blanket, and capture poignant photographs like one that ran in May of a five-year-old girl, shot in the abdomen at a birthday party, dying in her father’s arms. It produced stellar investigative work, too, like Cindy Chang’s prison series, which exposed the perverse financial incentives behind Louisiana’s bloated penal system. Readers rewarded such coverage: The Times-Picayune had the highest market penetration of any major US daily.

Nonetheless, on May 23, word came that Advance was bringing the Michigan model to New Orleans—ending daily publication of the paper and firing much of the staff....

As in Michigan, the newsroom would be partly repopulated by younger digital natives who could be paid much less—as NOLA Media Group reporters, not Times-Picayune reporters. They would be told to write search-engine-optimized posts for the Web multiple times a day, and not to worry about print deadlines. Editing would be de-emphasized. “Curators” on the newspaper side would pick stories off of NOLA.com and put together a print newspaper on Wednesday, Friday, and Sunday. This in a city that worships its habits and traditions.

Editor Amoss told his staff that the new NOLA.com would be a “website emphasizing sports and entertainment."....


Then shades of GM and IBM appeared:

"But as many loudly pointed out, New Orleans is one of the poorest and least digitally advanced cities in America. More than a third of its residents have no Internet access at home....

There is no sure answer for what to do about this. Still, by now, most major newspapers have begun moving to strategies that play to their strengths: charging core readers online while allowing casual visitors 10 or so free stories a month; increasing the price of the paper, sometimes by charging an upsell fee for bundling digital access with print; shoring up Sunday circulation; and attempting to convert ad departments into marketing-services operations that provide more holistic solutions to local promotion, like website creation, social-media help, app creation, and the like. These and similar strategies are based on the value of the content, and on a hopeful bet that newspapers can keep significant subscription revenue in the coming all-digital future.

Advance is following the industry into marketing services. But mainly it has stuck by what was conventional Web wisdom from before the recession—chasing clicks. In the new NOLA model, editors push reporters to increase “inventory,” more content with fewer journalists. And more of its remaining resources are in sports and entertainment. In this system, a distracted click on a story that says, in its entirety, “Hornets officially announce their nickname will be changing from Hornets to Pelicans,” is worth as much as one on, say, a prison exposé. More, actually, since the former comes with less time and effort....

Considering circulation revenue of roughly $25 million to $30 million, based on CJR estimates, the print paper brought in more than 90 percent of the company’s revenue before the changes, and still likely brings in five of every six dollars in revenue. If NOLA Media Group were a standalone business with no newspaper to support it, its costs would exceed its revenue by many times.

In the near term, Newhouse’s idea to shrink the print product makes perfect business sense. It still gets revenue from three fat papers—Sunday, Wednesday, and Friday—even if readers are alienated by the loss of less profitable Monday, Tuesday, Thursday, and Saturday editions. And by laying off 200 employees—journalists, salespeople, pressmen, and delivery drivers—and sharply reducing what it pays for paper and ink, Advance may have doubled its operating profit in New Orleans. Doctor estimates that the moves gave the Times-Picayune a one-time boost of 11 percentage points in profit margin.

But that’s the near term....

In fact, reporters say they often file without any editor seeing their copy. They’re told to write two-sentence ledes because someone up the chain at NOLA got the idea that Google’s algorithm favors them. (“It’s a secret that only we’re in on,” says a sarcastic reporter.) After Hurricane Isaac in August, one top editor bemoaned the clicks NOLA.com had lost to outlets that called it a hurricane while it was still a tropical storm, arguing that NOLA.com should have matched the inaccuracy rather than lose search-engine points.

In January, imitating an infamous Huffington Post piece, NOLA.com ran a brief post headlined “When is Super Bowl 2013” to draw cheap search-engine clicks. But showing how the organization doesn’t quite get the game, it tweeted the post, too, effectively spamming its followers with SEO detritus meant only for Google spiders....

the newsroom employs a Staff Performance Measurement and Development Specialist and incentive pay might be introduced next year. Lorando has told staffers that accomplishing the goals could mean roughly three to five posts a day....

It’s hard to imagine a lucrative future for NOLA.com once the print edition inevitably slides into the red. But consider this: If they sold the paper right now, the Newhouses probably would get less than $40 million for it, based on the earnings multiples of recent newspaper sales. By radically slashing costs, as they have done—perhaps by as much as $25 million—the company can earn that amount in a couple of years thanks to higher profit margins. Anything beyond that is gravy.

This looks like an orderly liquidation. By cutting costs well ahead of perpetually declining revenues from the “Inkosaurus,” as James O’Byrne calls the print edition, the Newhouses can ride the Times-Picayune down profitably while minimizing the loss of money. Once the paper reaches terminal velocity, they can shut down Advance Central Services, the print wing, tie up any potential liabilities from the paper, and pitch them into the Mississippi.

If NOLA Media Group is able to turn a profit on its own by then, probably with a dramatically lower headcount than its newsroom has even now, so be it. But it will never amount to much as a business. Not to a family worth at least $14 billion.
.." Rest of the article

12 comments:

Anonymous said...

"Based on clicks"?

clintonrebel said...

If Columbia wants to do a case study on how not to run a newspaper, they should visit Jackson's Clarion Ledger. Why would anybody pay to have AP feeds delivered to their driveway?

Anonymous said...

Amen, clintonrebel. If they put the money they paid AP into reporting local news they may reverse their circulation slide.

Anonymous said...

I was about ready to cancel our CL sub, but Geoff Pender, Brian Eason and a few others have convinced me to give them a little while longer.

Anonymous said...

Thanks for that testimonial, Brian.

Anonymous said...

If you cancel your subscription, the CL will go away. And with them the good reporters and guys like marshal Ramsey. While I hate being a socialist, it is our responsibility to contribute if only for the coupons.

Anonymous said...

We should all be worried about the demise of The Fourth Estate.

If to be entertained or to have all our preconcieved notions reinforced so that profit can be made is the new objective, our democratic republic is doomed.

Few reporters these days have the slightest clue how government or business or finance is supposed to function. Expertise is expensive and so a caaualty. Stories are spoon fed by special interests and no one is checking facts.

He who controls the flow of information controls power.

Ofelia said...

Their are still several very good reasons for pouring over the pages of the *Glaring Error*, the mainmost reason being because its delightful to see all there writers typos, mispellings, creative punctcuation and grammer mistakes. I for one hope they fair better than the *TP* and continue to flurrish. At least the comics, Dear Abby, and the obituaries, which oftentimes make very entertaining morning reading as sometimes the deceased have written they're own.

Anonymous said...

Clicks = mouse clicks = internet

Anonymous said...

Times P was a fantastic newspaper. Incredible reporting, hard working reporters. Still makes me sad that its going by the wayside.

Anonymous said...

Two words: Blockbuster.

Blockbuster Video's fatal flaw was that the company fundamentally misunderstood the business it was in. Blockbuster saw itself as a retail outlet for DVD and video game rentals. What people wanted was in-home access to entertainment. When alternative delivery options came along -- Redbox, NetFlix, on-demand video from the cable companies -- people began accessing in-home entertainment in the most efficient and convenient ways. Blockbuster could have easily adopted the original NetFlix model of mailing DVDs to subscribers' homes -- they had the studio relationships and access to media. It was a slam dunk. Then, they could have developed their own online delivery platform. But, no. They kept schlepping discs out of store fronts. Now, they are the walking dead.

The Times-Picayune, the C/L and all of the other struggling newspapers in this country have the same problem. If they understood their true function -- the discovery, accumulation and dissemination of relevant information to the public -- they could survive. Newsprint is merely the media by which this information is (or was) disseminated. Information was once recorded and disseminated on stone tablets, then papyrus scrolls. Newsprint was simply another iteration of the media -- as is the internet.

The whole hue and cry about the death of the Fourth Estate and how detrimental it would be to our country is a bunch of horse crap. A lot of this is coming from the newspapers themselves (and their political patsies), and that is money talking. The Fourth Estate is by no means dead. In fact, we now have substantially more sources of information via the internet than we ever did with printed newspapers. I know, the next argument is how internet news outlets aren't as "unbiased and disciplined, etc." Blah, blah, blah. That's the newsprint guys talking. The real issue is that the newspapers lose their competitive advantage when expensive printing presses in local markets no longer offer them protection from competitors. With the draining of that protective moat, of course they are going to lob criticism at internet-only news outlets. Furthermore, the ad-revenue model changes somewhat (but not completely) when you move from print to online. Newspapers who are slow to adapt and change to the new model get left behind. Live by the sword; die by the sword.

Perhaps the new Fourth Estate is no longer characterized by large corporations and newspaper conglomerates. Perhaps it is made up of thousands of individual, creative, enterprising reporters who contribute their product to multiple outlets. It's harder to capture and consolidate revenue in that model, but maybe that's actually a better, more objective way of getting information to the public anyway. Look at Matt Drudge , the late Andrew Breitbart and Ariana Huffington. In a relatively short timeframe, they have created impressive news franchises of their own in this new world.

Ophelia said...

Ummmm, yeah, what he just said! With flawless style, clarity, grammar, and (*mirablie dictu*, these days) even perfect orthography, 2:04 should maybe consider doing some writing hisownseff, if he should ever retire from or "loose" his day job!



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If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

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