Embracing the Future   

Visits to 50 newspapers in 50 states find an evolving industry launching new initiatives in an effort to survive and thrive in the digital era. Thurs., April 5, 2012.

Is the newspaper industry dying or is it "managing through a transition of consumer habits" en route to a successful new business model? Christopher Mayer, publisher of the Boston Globe, believes the latter is true. And his view is widely embraced in the profession.

Mayer sees his formerly newsprint-centric news organization expanding its reach while transforming into a multimedia, multiplatform news and information company.

Given that intent, can the "transformational newspaper" refinance a declining industry or does it face insurmountable hurdles?

Over 13 months in 2010 and 2011, we visited 50 news-papers across the United States – one in each state – to discover firsthand how newspapers are doing.

With the assistance of state press associations, we selected a cross section of leading daily and weekly newspapers. We interviewed each newspaper's publisher, editor and Web site manager and published our reports on a Web site: www.WhoNeedsNewspapers.org.

We discovered a rapidly evolving industry that is troubled but not dying.

The newspaper business' core financial challenges have not yet been solved, but many initiatives are producing new, digitally enabled products to support news operations.

Despite the challenges, there is optimism the new revenue centers will grow, and confidence newsprint- generated revenue will be sufficient to finance professional news operations during this transition.

Here are our key findings from the 50 newspapers we visited during this Internet-driven revolution.

I. What's Stayed the Same at Successful Newspapers?

• The keys to success.

"A good newspaper is like a community talking to itself," says John Bodette, executive editor of Minnesota's St. Cloud Times. "I want this newspaper to continue to be the place the community goes to have those conversations."

Bodette's mantra was echoed in every newsroom we visited. Emphasizing local news, providing watchdog reporting, facilitating community dialogue and serving the public remain the fundamental keys to success.

• Vetted, edited, ethically managed reporting.

"If a newspaper doesn't have its credibility, its audience figures it out real quick. And its audience turns away," says Thomas Dewell, coeditor of Wyoming's Jackson Hole News & Guide.

"I really feel like we do something important for a lot of people from all kinds of different walks of life," says Keith Magill, editor of the Courier in Houma, Louisiana. "In this community, I feel that..if we don't tell people, they don't know."

• A cadre of community service-driven journalists.

"The classic contribution" we make "is shining a light on things," says Carole Tarrant, editor of the Roanoke Times. "We have this huge megaphone, and we can point out things that are good and things that are bad... I think everybody in [our] newsroom has a general interest in leaving the community a better place."

• Publishers dedicated to their community's success.

Copublishers Kurt and Paula Johnson purchased the weekly Aurora News-Register in Nebraska because Aurora was a growing community, and they believed the newspaper should take an active role in community leadership. "I think it's important in a town like this that the newspaper just not be an observer," Kurt Johnson says.

II. What's Changed at successful Newspapers?

• Newspapers are embracing digital delivery.

Every newspaper we visited operates a news and information Web site. "The way it is now, when we get together for our morning meeting each day, we're not thinking print first; we're thinking Web first," says Dennis Anderson, managing editor of Kansas' Lawrence Journal-World.

• Digital delivery requires complex content management software.

As news platforms have diversified, more complex content management systems are needed to handle text, photos, graphics and video, and shape them for print, Web sites and mobile platforms. Newspapers owning radio and TV operations also need software to manipulate newspaper copy for use for broadcast and vice versa.

• Newspapers are producing multimedia reports (and multimedia advertising).

Most newspapers have added video, digital databases and social media to their reporting tool chests. Some metros, such as the Providence Journal, have staff dedicated to producing video packages.

Because it requires additional skills and time-consuming editing, many smaller newspapers have struggled with video, but most of the newspapers we visited see video news and advertising as a potential source for new revenue.

• Some print, some don't.

Newspapers are rationalizing their printing costs in three main ways. Some newspapers, like the Boston Globe, streamlined their printing operations. Others, like the Northwest Herald in Crystal Lake, Illinois, outsourced printing to other daily newspapers to cut overhead costs.

Newspapers with state-of-the-art printing plants, like the Opelika-Auburn News in Opelika, Alabama, treat their printing business as a profit center. The Opelika-Auburn News earns incremental revenue by printing several regional dailies and weeklies.

• Breaking news is back.

"We've changed the way we think. We're more real time," says Sara Scott, community news director of the Citizen Patriot in Jackson, Michigan. "We have veteran reporters who can recall the days when they were..on deadline and they loved it, and now they're back on deadline again."

All the daily newspapers in the WNN sample post breaking news on their Web sites whenever local news events occur.

• Print circulation has shrunk, but readership has expanded.

As the Internet's impact has grown, newspaper circulation has declined, but newspaper readership has grown.

"We have never had more consumers of our content," says Boston Globe Publisher Mayer. "We have over 50 percent penetration in this marketplace between print and digital." Expanded readership is the norm.

• News staffs are smaller.

Almost every newspaper in the WNN report has cut its news staff in recent years. In his book, "Newsonomics: Twelve New Trends That Will Shape the News You Get," industry analyst Ken Doctor estimates newsroom staffs shrunk about 20 percent between 2005 and 2010.

• Fewer reporters dictates focused coverage.

Vermont's Burlington Free Press no longer has the space to be the "paper of record" for its town, says Executive Editor Mike Townsend. "We can't spread ourselves out like that anymore."

The Free Press emphasizes watchdog journalism and coverage of what Townsend calls "passion topics": politics, the environment, local food and culture. This is a common trend.

• "Swiss Army Knife reporters" are needed.

"If you're in [journalism] because you don't like technology, it's just not possible anymore," says Meg Heckman, Web editor of New Hampshire's Concord Monitor, who uses the "Army Knife" phrase to describe the phenomenon. "You need to know a little bit of everything."

"I think the skill set is much different," says Frank Scandale, former editor of the Record in Bergen County, New Jersey. "Right now, if you're in the game, if you're not in school, you have to train yourself or seek the training."

• Hyperlocal Web sites are blossoming.

An Internet-savvy innovation within the WNN sample is the hyperlocal Web site. At lasvegassun.com, readers are encouraged to provide their ZIP codes; the Sun's Web site responds with a list of ZIP code- centric neighborhood events, a neighborhood crime blotter and neighborhood ads.

The Times of Northwest Indiana in Munster, Indiana, serves a growing region of contiguous small towns. Its strategy is to create "communities" – custom Web sites for each venue in its coverage area. There are now 20 Times community sites, which showcase hyperlocal news and local ads and draw on the nwitimes.com Web site for regional news.

• Some newspapers use community journalists.

Many newspapers in our sample explored using nonprofessional community reporters with mixed results, but two newspapers are deeply committed to tapping into such reporting.

Clark Gilbert, president and CEO of the Deseret News in Salt Lake City, says his newspaper is building a cadre of 4,000 unpaid community journalists, creating what it calls "Deseret Connect."

In Cedar Rapids, Tim McDougall, vice president of products and the publisher of the Gazette, is finding local experts and tapping into their perspectives to create "dense networks around a topic."

• Newspapers might aggregate news from non-news-paper sources.

Aggregation is rare, but at the Seattle Times, Executive Editor David Boardman says the newspaper has partnered with local blogs. "They do a level of coverage we never did... We never covered neighborhoods like that. So our thinking was, 'Hey, they're doing great work. Let's see if we could create a network for which we could be a convener.' "

III. What are the key problems?

• News audiences are fractionalizing.

When A.J. Liebling wrote, "Freedom of the press belongs to the man who owns one," he did not envision the Internet. The torrent of blog and social media postings has further fractionalized the news audience, so assembling and retaining an audience is difficult.

• No single "silver bullet" revenue source has been discovered.

Joe DeLuca, publisher of the Tampa Bay Times' Tampa edition, says "there is no silver bullet" to ensure the economic viability of newspapers, which have lost much of their advertising. "The basic business model remains the same," says DeLuca, but "there will be many different revenue streams" to support it – "that kind of creative thinking needs to go into building a model for digital publishing."

• 10 percent won't pay the bills.

More competition and ease of entry to the Internet keep digital advertising rates low. Newspaper organizations are increasing readership but, according to Tom Rosenstiel, director of the Project for Excellence in Journalism, even as the audience grows, print-based advertisers "are not migrating with newspapers to their Web sites" to purchase ads there.

Also, when advertisers do purchase ads on newspaper Web sites, the news organizations earn revenue at rates of about 5 percent to 10 percent of comparable newsprint advertising rates, according to WNN reporting.

• The 2008-2011 economic downturn still hurts.

A "tsunami" has been "going through our industry and all of society," says Gary Farrugia, publisher of the Day in New London, Connecticut. The downturn has been caused not only by the industry's transformation but also by the "oppressive recession" that has hit, "particularly hard, businesses that rely on advertising as a major source of revenue."

• Gauging investment in digital assets is problematic.

"Technology is important to us," says Seattle Times Publisher Frank Blethen, "but you can't be a captive of [it]. When [digital news] is only 10 percent of your business, you just can't dump all your resources into it."

• Selecting new digital tools is daunting.

"I don't want to be the leader [in new technology]; I want to be two steps behind," says Publisher Jim Thompson of Idaho's Coeur d'Alene Press. But, Thompson adds, "I don't want to get any farther back than that."

• Digital news delivery requires newsroom reorganization.

The Day in New London went from 66 FTEs (full-time equivalents) in the newsroom in 2001 to 57 in 2012, but their jobs are vastly different. Now the paper has "videographers, video producers, digital directors and breaking news editors," says Publisher Farrugia. These changes required a "deconstruction" of the traditional news and copy desks.

• Selling digital ads takes new skills.

At North Dakota's Grand Forks Herald, Advertising Director Zach Ahrens needed to convince his ad staff that online journalism is here to stay. "Some of the veteran staff thought, 'If we just wait this out – it's the latest fad – it will go away,' " Ahrens says. An accelerated bonus plan motivates the Herald sales staff to sell both print and online ads.

IV. What are the key opportunities?

• Newspaper readership persists.

"I think the newspaper form has at least 15 years," says Stephen Borg, publisher of the Record in Bergen County, "because you have people who are ingrained in the habit, where, if we don't mess it up, they'll die with the habit."

• Newspapers have unique compelling attributes.

The newspaper has distinctive storytelling advantages. In New Orleans, we watched a local TV news story about a man who had dined in every restaurant in the city.

The local paper, the Times-Picayune, ran a feature story about this same man. Beneath his picture was a list of the 740-plus restaurants at which he had dined. Readers could immediately absorb the immensity of his project and determine if their favorite restaurant had been included.

The newspaper used its unique print attributes to tell the story graphically. Random access, serendipitous story presentation and easy portability also distinguish newspapers.

• More news platforms can earn more revenue.

Some newspapers charge readers for stand-alone online products. The Austin American-Statesman sells access to a www.hookem.com Web site for University of Texas football junkies.

The Roanoke Times is seeing success from "Daily Deal," a partnership with advertisers in which the newspaper earns revenue when readers purchase a featured daily deal from a local business posted on the Times' Web site. "We're brokering the sale, rather than just selling advertising to our customers," says Times President and Publisher Debbie Meade. "It's quickly grown into a very nice revenue stream for us."

In Portland, Oregon, an alternative weekly, Willamette Week, says 17 percent of its total revenue comes from producing public arts, culinary and entertainment events.

And newspapers are learning since new digital initiatives are relatively inexpensive, they can try and fail and try again until they design a winning product.

"We have to be doing stuff that other people aren't or can't," says Kathy Best, managing editor of the Seattle Times. "First, you've got to be a really passionate journalist. Second, you've got to be willing to change... You've got to be willing to experiment and fail.

"But," she adds, "fail fast."

• Newspaper Web sites can charge for their services.

After years of giving away their digital content, more and more newspapers are erecting paywalls. Some newspapers are adapting a two-tier subscription strategy. They publish local headlines, calendars and Associated Press copy on a free site. But only paid subscribers get access to the complete array of digital news and information.

"If you've got two products – one's a print product and one's the Internet product – and they're basically substitutes for each other, and you're asking people to pay for the print product and you're giving the Internet product away, you're driving people to the Internet," says Jay Seaton, publisher of the Daily Sentinel in Grand Junction, Colorado. "That's just simple economics. And that's an unsustainable business model."

• Midsize, smaller and weekly newspapers have more time to transform.

"Smaller newspapers have a better place into the future because what they do is unique," says newspaper industry analyst Doctor. "To the extent that they do not have editorial competition and [have] lesser advertising competition, they're far less endangered than metro papers."

Also in smaller communities, the digital revolution is not moving so fast. Small-town merchants are still

learning how to advertise online, and print delivers some kinds of advertising – like Sunday inserts – more effectively than the Internet.

Our visits to 50 newspapers across the country suggest that the newspaper industry is not ready for hospice care. The newspapers we checked out have become transformational news companies.

They have reduced staff and streamlined costs, admittedly reducing their newsgathering capacity. But they have also reshaped their missions to seize the opportunities of the digital era.

Before 1995, newspapers were traditional newsprint-bound, three-dimensional media – text, graphics and photos. Since then, at widely varying rates of speed, they have become multimedia, multiplatform news and information outlets.

The leading transformational newspapers are trying to reshape their industry. They've added video reporting and video advertising (a new revenue source). They are matching sellers and buyers to create transactional revenue streams. They are devising local mini-Web sites to assemble special interest audiences for niche advertisers.

Some newspapers – those that do not have the potential to aggregate vast, Amazon-sized audiences – are erecting two-tier Web sites: one free, with weather and headlines, and another, behind a subscription paywall, with all the news organization's content. This strategy has reduced the loss of paid circulation revenue at such newspapers as the Arkansas Democrat-Gazette in Little Rock, a pioneer in charging for digital content.

Predicting the long-term future of the newspaper industry is beyond the scope of this report. But we invite readers to visit the WhoNeedsNewspapers.org Web site, meet the people who are fighting to transform these newspapers and judge the level of their intelligence and commitment. You'll find bright, energetic, community service-oriented journalists and business people.

Their progress and missteps are writing a compelling, high-stakes drama. It's a business story about whether the public is willing to pay for valid, vetted, professionally gathered news, and whether the embattled newspaper community can recapture the public's imagination.

And it's a cliffhanger.

Paul Steinle is an adjunct professor at Quinnipiac University and professor emeritus at Southern Oregon University, with 30 years professional experience as a reporter and news manager.

Sara Brown was a human resources manager at Washington's Vancouver Columbian and the Los Angeles Times, and a national newspaper management consultant.