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Well, Chicken Little, the sky could indeed be falling. So reports Alan Mutter in his Reflections of a Newsosaur blog. Mutter is reporting NAA figures that actually passed along the “good news” that newspaper sales were off 23.7 percent in the final quarter of the year. That’s the good news? It is when you consider the fact that sales were off 28.3 percent in the first quarter, 29 percent in the second, and 29.9 percent in the third. So 23.7 percent is looking pretty good now, huh? Mutter says: “If the rate of decay continues to slow in 2010, the industry will shrink at a slower pace than it did last year. But it still will continue to shrink. And declining shrinkage should not be taken as a sign of health.”

William Durant didn’t like automobiles.

Durant, who was in the carriage business in the 1890s, thought cars were smelly and noisy, not to mention downright dangerous.  But he realized that automobiles, as distasteful as he thought them to be, were the wave of the future.  So he left his still-successful carriage company, one of the world’s largest, to join the new Buick company.

Ultimately, Durant went on to found General Motors.

The point?  Durant’s times were a lot like ours.  He was living at the edge of a paradigm shift-a whole new mode of transportation.  Cars did not take over from carriages immediately, but within a decade, it was obvious that they would soon rule the road. 

We live in a similar age, but the paradigm that’s shifting is communication, not transportation.  One advantage that Durant had over today’s current industry-in-crisis — newspapers — is that the industrial landscape of his day was shifting more slowly.  Metro newspapers have gone from boom to bust in a decade (though many in the know have been pointing to the danger signs for metros even before the advent of the Internet).

The just-released Pew Report only confirms the bad news for big-city newspapers. According to the report, newspaper ad revenues (including online) declined by 26 percent last year, bringing the total loss for the past three years to 43 percent.   The Gawker blog even headlined the recent post on the Pew Report this way:  “There is Literally No Way to Make Money Selling News.”  Wrote Gawker:  “That is the only conclusion a reasonable person can reach reading this new Pew Foundation report. Paywalls are anathema. Nobody clicks on ads. The value of news is zero dollars and zero cents.”

To be fair, the Pew Report did talk about some encouraging news, mainly that metros, after having shed considerable expenses and salaries, are returning to profitability.  But even that has a downside:  These papers are now mere shadows of their former selves.  The Report quotes a journalist who said that the independent contractors who deliver the paper complain that the Monday edition doesn’t have enough throw-weight to get all the way up the porch.  The report said that newspapers now spend $1.6 billion less annually on reporting and editing than they did a decade ago.

But what about community papers, generally acknowledged to be the most successful part of newspaper journalism right now?  Is our situation as bleak – or at least uncertain – as that of our metro brothers? And what are the modern-day journalistic Will Durants doing as they face that future?

First of all, what’s the good news in community journalism, as compared to the metros in crisis?  Community journalism is different in the following ways:

• Competition.  If you want the news in communities across Texas, typically newspapers are your best bet.  We don’t have all of the magazines, radio and TV competitors that big-city papers have.  And Internet penetration is not as significant – some rural communities do now have broadband services available and mobile service is sometimes spotty.  We have a near-monopoly on the news that matters.  You can’t say it better than one small-newspaper editor in Pennsylvania did:  “It’s often said that newspapers are dying, but that’s a gross oversimplification. The papers with the big problems are the metropolitan dailies. But here, if you want to read a professionally written news story about what the Board of Township Supervisors did on Thursday, you really don’t have much choice but to pick up the Elizabethtown Advocate, because I was the only journalist at that meeting. I am the only game in town.”
• Demographics.  The population is often older, which means they are more print-loyal.  Older readers are comfortable with their coffee and morning paper and less likely to want to go online for their news — even if there were an online source for local news, which there typically isn’t.
• Advertising effectiveness. The bottom line is that if you want the news in many communities in Texas, we’re pretty much the only game in town.  And local businesses who want to reach consumers know that — there’s no medium more effective than the newspaper.  All newspapers have been affected by the economic downturn as the advertisers they depend on suffered in the recession.  But community newspapers have taken less of a hit.  In the second quarter of 2009, metro ad sales dropped off a little more than 30 percent; ad sales in community papers dropped off just over 12 percent.

But the Pew Report contains some disquieting news for community newspapers:

• As we drop pages in cost-cutting and because of less advertising, our product becomes less attractive to readers.  A less attractive paper will draw fewer readers, and fewer readers mean advertisers see less value in newspapers….the classic chick-and-the-egg dilemma. One small-city newspaper owner quoted in the report said he is “worried as hell we’re not going to have enough news in the newspaper to make it worth picking up for 50 cents, let alone 75 cents.”
• One hopeful sign for journalism cited in the report may not be hopeful at all for community papers in Texas.  The report noted that it is easier than ever now to start new newspapers on the Web, without the overhead costs that ink-on-paper media have.  In other words, it has never been easier for someone with a computer and just a little Web savvy to become your competitor.
• We are faced with a significant dilemma:  Our readers are older and are not being replaced by younger readers.  The future is clearly on the Web, but most of our revenues are from the traditional print product. 

The first automobiles hit road experimentally in the 1890s.  The horse still ruled transportation.  In the early 1900s, when cars began to be manufactured on a larger scale, most people still rode horses.  Lots of folk thought they were a fad.  Carriage makers were still profitable.

But Durant and others realized that the future was in the automobile — that cars would not instantly dominate the road, but they would inevitably dominate the road.

Unfortunately, we in Texas community journalism are faced with the challenge of playing on two courts at one time.  Our revenue and most of our audience are in print, and we cannot afford to neglect our newspapers.  But our future is inevitably digital, and while we focus on putting out the best print product we can, we must explore what our digital future will be like.

At the Center, we’re dedicated to helping all we can.  We have done workshops on building your Web presence, and we will do more.  We are already flight-testing our free content management system with several Texas community papers; we hope to make it widely available — free — as soon as possible.  And we offer consulting services to those papers who are taking the first steps toward an improved Web product.

Will Durant was making money manufacturing carriages.  But he realized that the future was elsewhere.  And if he had stayed with carriages, he may have ended up losing everything.

The Center wants to help those of you who are looking to find your place in a future of digital community journalism.  And in the meantime, we hope to help you produce the best possible printed newspaper.

Some of you will remember Vicki Simons, who – along with her husband Tony Jones – led two seminars on newspaper management for us five years ago. Vicki has been heroically battling cancer, and, of course, blogging about it (vickicancer.blogspot.com). She died of that cancer on March 1. And in typical Vicki fashion, she left her own obit, which you can read at the URL above. I know you join us at the Center in mourning a great leader in community journalism.

Download the file here.

That’s the convention wisdom, and now it’s confirmed in a new report, “Small business Marketing Health Check.” The report found a direct relationship between spending on marketing and the success of the small business. Example: Of businesses with flat or declining revenues, only a third had raised or planned to raise spending on marketing. But two-thirds of businesses with increased revenues had raised spending on marketing. The survey also showed small businesses shifting spending away from traditional media toward social media and email newsletters.

Two news items about our business from last week:

• Circulation is down. Big-time.  Average weekday circulation has dropped nearly 11 percent, the sharpest decline in years.  And the big guys are hurting the most:  Nearly two-thirds of the 25 largest papers in the U.S. posted circulation declines of 10 percent or more.
• Despite the drop in circulation, or maybe because of it, the buzz in corporate offices is still about how to charge for content.  More publishers, it seems, are determined to make news consumers pay for what they’ve been getting up to now for free. But despite the conversation about the need for pay walls, and no lack of proposals about how to make them work, publishers realize that erecting pay walls only drives away readers.

About the only pay-wall ideas with traction now are the ones that involve charging not for the basic news content of the paper, but for supplemental content.

The Minneapolis Star-Tribune, for instance, has a free site but charges $19.95 a year for premium coverage of the Minnesota Vikings — a plan similar the Milwaukee Journal Sentinel‘s Packer Insider coverage.

The Wall Street Journal Online uses a model now being talked about in Texas newsrooms — offering some free content, but only teasing a lot of major pieces, which will require a subscription.  The magazine Consumer Reports uses much the same approach.

The issues here, of course, are that these are highly specialized media.  WSJ is the last word in business and financial coverage, and CR is best known for its product reviews.  Neither — at least of that quality and reputation — is available free on the Web and gathered in one site.

Some newspapers have even offered up as a model iTunes, which lets the consumer pay for individual music downloads.  Newspapers, some publishers say, could offer news downloads in the same way.  Of course, downloaded music can be played again and again, and you don’t typically see news and opinion being read over and over.

And perhaps the Internet’s best example of pay-for-specialized-content is the one type of content that (until social media came along) was most prevalent online:  pornography.  But even with porn, you can now get pretty much all the smut you want for free, and profits for purveyors of porn have plummeted.  [Sorry; some alliterations are just too good to pass up.]

Lauren Fine, research director for ContentNext Media, believes that newspapers are going to have to realize that they cannot charge for most types of news:

“[Newspapers] have to think a little more creatively about what people will pay for, what they find of value, but core news in and of itself still feels like there’s so much available that it will be hard to get people to pay,” Fine said.

The analyst believes newspapers are going to have to think out of the box to come up with the types of content people will pay for on their Web sites:

“If I’m a local newspaper, maybe I can’t get you to pay for the content, but I could create a real estate service that says you’re going to be one of 25 people who receive the first alert that a new home is available,” she said.

The real question, of course, is what kind of content the reader will be willing to pay for.  One blogger put it like this in a series of questions we must all eventually ask ourselves:  “What value are you providing that makes it worth paying you? That’s the question I keep asking. Newspaper folks seem to think that their content is magically so valuable that everyone will start paying if they charge. There’s no evidence that’s true at all. So what value are they adding beyond all the other content out there that makes it worth actually paying for?”

That’s the dilemma.  The staff of the Center is following this issue, so you keep following the blogs and Around the Web features here, and we’ll report the newest trends and experiments in ways to charge for premium content.

Community journalists, as announced at our latest workshop you’re being invited by the Schieffer School of Journalism to participate in an exciting two-day event at the School featuring one of the country’s top journalism minds. See the invitation below and this page on TCU’s website for more information:

Colleagues, students and media professionals:

You are cordially invited by the TCU Schieffer School of Journalism to a unique two days of discussions on media innovation and ethics in media led by Steve Buttry. 

As many of you know, Steve is a faculty member of the American Press Institute and creator of the Complete Community Connection in his role as C3 coach of Gazette Communications, a family-owned multi-media enterprise based in Cedar Rapids, Iowa.  Steve is an alumnus of TCU.

“Innovations and Ethics” will be November 18 and 19 at the Brown-Lupton University Union. 

The programs are sponsored by the Schieffer School of Journalism and the American Press Institute. 

There is no registration charge, but space is limited to 50 persons for each of the two sessions on Complete Community Connection and 40 persons for each of the four sessions on media ethics. 

“The Complete Communication Connection” will be presented twice on November 18.  Both four-hour sessions are the same so you sign up for one or the other.

“Upholding and Updating Ethics” on November 19 includes four 90-minute seminars on different subjects.  You can choose to attend all four or any combination of one, two or three of them.

See the attached agendas for more program details.  A registration form is also attached.

We look forward to seeing many of you November 18-19 in the Brown-Lupton University Union on the TCU campus.

Sincerely,

John Lumpkin
Director, Schieffer School of Journalism

This page contains handouts and presentations from the workshop. The amount of content on this page will increase as the videos are edited and posted. To keep up with new content as it’s posted, follow us on Twitter (@tccj) or find us on Facebook.

Chuck’s handouts

You have already read Andrew Chavez’s great piece here on this site about the impact of Craigslist on newspaper classifieds. Now check out these three articles from NAA that tell the stories of three newspapers that have gone to free classifieds:

• Oregonian Aims to Change Perceptions, Create Attractive Marketplace
• Atlanta: An Exchange of Sites and Mindsets
• In Houston, Kaango Brand Boosts Print

NAA’s Digital Edge blog also tells the story of a smaller newspaper, The Daily Journal of Kankakee, Ill., which went to a free classifieds concept (no URL here because you need a Digital Edge subscription to access this one, so read on to find out what happened).

For the Kankakee paper, the impetus was the establishment of a free shopper four years ago.  The shopper sold its display ads but gave away its classifieds.  The paper hired a temporary employee who called everyone who had taken out a free ad in the shopper, telling them that the Journal also had free ads and had a much greater circulation.

The shopper even offered free auto ads – the newspaper countered with a $19.95 “Run It ‘Till It Sells” promotion. It partnered with a local car wash to offer $5 car wash coupons for readers who submitted a photo along with their six lines of ad copy.

The paper even purchased digital cameras and offered to take a photo of a reader’s car if the owner brought the vehicle to the newspaper office. The bottom line: The Daily Journal‘s classified section has grown to more than four times its original size.

Says the paper’s classifieds manager:  “It’s been phenomenal. We actually didn’t see a downturn in revenue after we started this.” Even the pet section has grown, with dog breeders across the state wanting to advertise.

The result? The free shopper has disappeared, and The Daily Journal has maintained its free classifieds policy for merchandise under $400. Since the shopper died, the paper changed its policy to offer the free classified only to newspaper subscribers.  Each month, the paper signs up 25 to 30 new subscribers because of the free classifieds offer.