Nieman Foundation at Harvard
HOME
          
LATEST STORY
Should it stay or should it go: News outlets scramble to cover Britain’s decision to exit the European Union
ABOUT                    SUBSCRIBE
Nov. 18, 2008, 8:03 a.m.

The newspaper summit: Lots of lines, all going the wrong way

Some 50 newspaper executives met in Reston, Va., Friday for the American Press Institute’s “Summit on Saving an Industry in Crisis.” McClatchy, Hearst, E.W. Scripps, and The New York Times Co. were there, along with many others. Did anything come of it? Well, they agreed to reconvene in six months, but media blogger Steve Outing doesn’t think they have that long.

Chuck Peters, the chief executive of The Gazette Company in Eastern Iowa, liveblogged the otherwise-closed-door summit, which attracted comments from new-media gadflies, including Jeff Jarvis and Michelle McClellan. From the looks of that account and the API’s summary of the meeting, however, the newspaper executives didn’t get far beyond acknowledging their industry’s systemic problems. Perhaps, as Mark Potts said while the summit was still in progress, “the wrong people are in the room.”

Turnaround specialist James Shein did present a frightful chart that portrayed newspapers on a rapidly plummeting roller coaster. It reminded me of a slide that Nick Denton highlighted from Sequoia Capital’s advice for surviving the economic downturn. Since they’re both plotted over time, I’ve laid them on top of each other to make a point:

Shein’s Thunder Mountain ride to oblivion (the thin black line) isn’t inevitable, at least not for everyone. But getting off that track requires a change in cash flow — more revenue, fewer expenses. So here’s one problem: Newspaper executives seem to think they can increase revenue in this climate, when ads sales are declining both in print and online. Many talk of finding new revenue streams in social networking, data collection, and subscription services. But even if there is fruit on those trees, it’s a long way from summer, and the colored lines on that chart are saying expenses need to be cut dramatically yesterday (green) or else troubled companies will fall into a death spiral (red). When your stock is “worthless” — a label recently slapped on McClatchy and GateHouse Media — the best you can hope to do is take a dive and pray the water isn’t shallow. (Apologies for all the metaphors in this graf. Reality is easier to confront when it’s coated in similtude — thus, The New York Times comparing newspapers to bicycles and Circuit City.)

This imperative for cost-cutting is why, of course, most American media companies are gutting their newsrooms, a practice that Shein notably discouraged at the API summit. There are no easy answers here, but I think more insight was to be had last week in Monte Carlo than in Reston. That was the site of the Monaco Media Forum, which has posted a bunch of videos from the conference on YouTube. The one to watch is the keynote by Jeffrey Cole, director of the USC Annenberg Center for the Digital Future. (It’s embedded below.) He said:

Traditionally a big-city newspaper, whether The London Times, The New York Times, the Globe and Mail in Canada, traditionally 70 percent of a big-city newspaper has been advertising. There will never come a day that 70 percent of thenewyorktimes.com will be advertising. But while their revenues from advertising may be smaller, they also — if you look at a newspaper’s budget, only 30 percent of it goes to editorial, goes to writers and editors. Seventy percent of it goes to printing and distribution, and those costs almost disappear in a digital world.

When drastic cuts are required, it seems crazy to focus them on the minority portion of one’s business. Maybe a few newspaper executives who saw Shein’s crisis curve on Friday and are seeking to follow Sequoia’s survival model will be frightened enough to consider taking a chunk out of the printing and distribution side of their expenses by getting out of print, in whole or in part. There are many downsides and risks to that move, of course, but as one attendee at the API summit said, “We have nothing to lose.”

Here’s the full video of Cole’s speech:

[Hello, readers from Romenesko, and welcome to the newly launched Nieman Journalism Lab. We hope you’ll come back every weekday for reporting, commentary, and conversation about the future of journalism. Here’s our front page, here’s more about us, and here’s our RSS feed.]

POSTED     Nov. 18, 2008, 8:03 a.m.
SHARE THIS STORY
   
Show comments  
Show tags
 
Join the 15,000 who get the freshest future-of-journalism news in our daily email.
Should it stay or should it go: News outlets scramble to cover Britain’s decision to exit the European Union
Online, readers stayed up for the results: Peak traffic to BBC News, for instance, was around 4 a.m. GMT, and by 11 a.m. BBC.com had received 88 million page views.
Acast wants to get new audiences “in the podcast door” with more diverse shows and better data
With a new paid subscription option and its sights set on non English-speaking countries, the Swedish podcasting startup is looking for listeners (and shows) beyond the iTunes set.
“Medium’s team did everything”: How 5 publishers transitioned their sites to Medium
What happened when Pacific Standard, The Ringer, The Awl, The Bold Italic, and Femsplain moved their sites over to Medium.
What to read next
0Spain’s Eldiario.es has 18,000 paying members, and its eye on the next several million
“We have a potential of six million readers. You may not convince all six million people to be your socios, but if you learn more about their interests, you can get closer.”
0The Washington Post is testing out a few new hurdles for non-paying online readers
The Post is now asking readers to submit their email in order to read stories without paying.
0This new collaboration hopes to aid the endless debates about media with some actual hard data
“For a long time, I’ve wanted to try to put more data and quantitative analysis behind some of the claims and questions we ask around underrepresented and misrepresented stories in online spaces.”
Encyclo is our encyclopedia of the future of news, chronicling the key players in journalism’s evolution.
Here are a few of the entries you’ll find in Encyclo.   Get the full Encyclo ➚
The Huffington Post
CBS News
Associated Press
GlobalPost
El País
Placeblogger
Knight Foundation
ProPublica
Foursquare
Chicago Tribune
The Seattle Times
The Nation