How to subsidize news without feeling dirty
The U.S. Congress’s Joint Economic Committee hit one of my favorite topics on Thursday: What the government could, should, must (or must not) do to help the struggling news media survive, with the spotlight on newspapers in particular.
I had a look at the testimony and found some fascinating thoughts in the testimony from Paul Starr, a professor at the Woodrow Wilson School at Princeton University. Starr has some ideas for how the government might preserve a free press by extending a hand to the news business — all without using that word that no one wants to use: bailout.
First, the background: Newspapers are in trouble as the Internet destroys their advertising revenue. More people than ever read the news online, and news websites are trying to figure out a way to make money off that because letting people in for free just kills the circulation of their printed products. Some folks have raised the idea of federal, state or local subsidies to help papers — usually in the form of tax breaks — but the Newspaper Association and others say it’s a bad idea because the press shouldn’t be beholden to the government that it’s supposed to be monitoring for abuse, fraud, etc.
Meanwhile, the Obama White House, Justice Department and other federal offices are examining the situation. In Congress, one bill would let some newspapers become nonprofit companies, and another bill that would let businesses book their recent losses over the past five years – something that would get them some extra cash from the taxman.
The association was one of the groups that testified at the hearing. We know how they feel. What I’m INCREDIBLY eager to get your thoughts on is what Starr wrote:
Increasingly, the production of news will require subsidy, and the question is really from where and under what conditions that subsidy will come. The problems that this challenge raises are difficult because of the legitimate concern that any subsidy, whether from government or private philanthropy, may induce subservience and dependency in the press. But we should take encouragement from three experiences.
(He points out that we’ve done it before with eased postal rates for U.S. papers and public broadcasting subsidies, and it’s worked well in other countries, notably Scandinavian ones — take that how you will.)
Newspapers stay on message in tough times
It must be hard to churn out positive messages about the newspaper business when papers are losing their advertising revenue at alarming rates and the Internet is not yielding up any easy secrets for survival.
Don’t underestimate the Newspaper of Association of America’s ability to stay positive. Here’s part of a press release that it issued today:
Newspaper Web sites attracted more than 70.3 million unique visitors in June (35.9 percent of all Internet users), according to a custom analysis provided by Nielsen Online for the Newspaper Association of America. Newspaper Web site visitors generated 3.5 billion page views during the month, spending 2.7 billion minutes browsing the sites over more than 597 million total sessions.
“The newspaper audience continues to expand as publishers aggressively capitalize on their investments in digital properties, adding robust features and launching new products to attract a highly valuable consumer audience,” said NAA President and CEO John F. Sturm. “Advertisers who want to reach consumers ready to make purchasing decisions continue to use the trusted newspaper brand to ensure their messages are heard through the crowd.”
Also:
The latest Nielsen numbers come as early data from a MORI Research survey of 3,000 adults, indicates that newspaper advertising remains the leading advertising medium cited by consumers in planning, shopping and making purchasing decisions. The study, part of a series entitled “American Consumer Insights,” also found that 82 percent of adults said they “took action” as a result of newspaper advertising – from clipping a coupon or making a purchase to visiting a Web site to learn more.
Along with that came this pitch from the NAA spokesman, Jeff Sigmund, a guy who could claim political asylum in most industrialized nations after the pain I’ve foisted on him for the past few years (I’m sorry, Jeff, I can’t help it!):
It is true that newspaper companies cut their way to improved results. It is equally true that in their slimmed down state it would not take much of an increase in revenue to increase profits even more. The economy will improve, perhaps not tomorrow, but it will happen.
Moreover, many newspapers have figured out that their reliance on a small group of relatively big and once lucrative advertisers made them vulnerable in this downturn. Increasingly these papers have started to appeal to the small businesses they once ignored with a combination of special low rates and niche content that creates a positive selling environment for local businesses. This generates new revenue for the papers and cost effective ads that drive traffic for local retailers and service businesses.
Writing off newspapers in general and smaller market newspapers in particular could be a very costly mistake for the shorts you site above.
Newspapers plot survival as quietly as they can
Newspapers are in the business of making information public so readers can benefit. Newspaper publishers are in the business of revealing as little as possible unless someone springs a leak.
In the case of the two-dozen newspaper publishers who met in the Chicago area to discuss ways to get people to pay for the news they read online, the leak landed in the hands of The Atlantic. Here is an excerpt:
There’s no mention on its website but the Newspaper Association of America, the industry trade group, has assembled top executives of the New York Times, Gannett, E. W. Scripps, Advance Publications, McClatchy, Hearst Newspapers, MediaNews Group, the Associated Press, Philadelphia Media Holdings, Lee Enterprises and Freedom Communication Inc., among more than two dozen in all. A longtime industry chum, consultant Barbara Cohen, “will facilitate the meeting.” …
There was a dinner Wednesday and, according to the agenda, Thursday begins with a quick declaration of goals at 8 a.m., then an 8:10 a.m. session labeled, “Fair Syndication Consortium/Attributor.” …
That first session is followed by “Journalism Online: Presentation on proposed service to charge for access to newspaper content and to license that content that (sic) online aggregators” (the assistance of at least one of the many copy editors sent packing by the attendees might have been sought).
It’s now safe to wager that most attendees, who were scheduled to include Michael Golden of the New York Times, Gary Pruitt of McClatchy and Tom Curley of the Associated Press, will be dragged into charging for at least some online content.
In other words, the papers are trying to figure out how they can charge people for news on the Internet after largely giving it to them for the past 10-15 years. They have to do this so they don’t have to shut down when print advertising revenue gets so low that they can’t afford to stay in business anymore.
Newspapers still fail to understand the nature of the internet and, in doing so, have revealed their elitist attitude, not to mention their lack of business savvy.
Here’s a quick primer:
Information = Free (because that is what draws the audience)
Advertisement = Charge (that is the revenue source)
Trying to charge for subscriptions to online news is ludicrious– it’s like trying to charge for air. Go ahead and try. But most people will take the free air over the charged air everytime. Case in point, WSJ.
It makes much more sense to give the news for free and cash in on a newspapers reputation by charging for advertisement. Even if they just added an adsense ad, they would join the Fed-Ex club in no time.
The only real trouble is, the newspapers have been “double-dipping” (i.e., charging for both) for so long and now they have to suck it up like the rest of world. Elitist pigs, that’s what they are.
And, by the way, their level of writing has gone down as much, if
not more than, the rest of the world– enough, so that they can stop pretending to be better than anyone else. They aren’t.
Period.
Newspaper Association cuts jobs, ditches print
I suppose that it’s natural that your representatives in Washington should be people who reflect their constituencies. In that spirit, there are reports out that the Newspaper Association of America — a tireless defender of print newspapers even as ad revenue crumbles all around them — is cutting the print edition of its magazine, along with half its jobs.
I’ve left messages with several NAA contacts, but in the meantime, We confirmed the news with the NAA — 39 jobs going away. Meanwhile, here is an excerpt from a report on AOL’s Daily Finance site:
The Newspaper Association of America (NAA) is the not-for-profit organization that represents the interests of over 2,000 newspapers and other print publications. Its roots can be traced back to 1887, and for many years its magazine Presstime has kept members up-to-date on trends in the marketplace. Therefore, it seems sadly ironic that the NAA is killing its print edition of Presstime. The magazine will now be available in an on-line version only.
It also links to this article from Editor & Publisher:
While its members struggle under a punishing economic downturn and a secular transition to digital, the Newspaper Association of America is cutting its staff by 50% and will cease publication of the print edition of the magazine Presstime.
The association trimmed 39 positions this afternoon in response to the downturn in the industry, with 43 staffers remaining. In a memo to employees, President and CEO John Sturm wrote the steps were necessary and were taken at the direction of the board. “To be direct, industry economics compelled this round of staff reductions – to ensure we remain an affordable value to our members,” he wrote.
Sturm also said the association is looking to further reduce member dues.
Google CEO to keynote newspaper convention
Eric Schmidt, who will keynote the Newspaper Association of America’s annual convention, runs the search engine company and advertising beast that many journalists at sick and/or dying newspapers blame for sucking up some of their advertising dollars.
(They also blame Yahoo, which touts its newspaper consortium that tries to help the papers make at least some honest dollars off ad sales)
Google also is the company that deep-sixed its program to sell newspaper advertising because it didn’t make enough money.
All that prologue ought to make for a real yabba-dabba-doo time in San Diego as 21st Century Schmidt faces a potentially hostile crowd of dinosaurs.
Here are the details, courtesy of the NAA:
In the event’s keynote presentation, Google CEO Eric Schmidt will provide his unique perspective on newspapers, journalism and his company’s role in the future of the industry. Live audio streaming of his presentation, scheduled for April 7 at 10 a.m. (PST), will be accessible at www.naa.org/annual09audio. Additionally, NAA will offer a moderated “Cover it Live” discussion on its PRESSTIME Now! blog, available at http://community.naa.org/blogs/presstime. Users can visit the blog during the presentation to pose questions, share their thoughts and get live reactions from attendees. The full conference program, lodging information and registration details are at http://www.naa.org/Conferences/Annual09Home.aspx.
Microsoft, Gates master the art of product placement
There is no better way to learn about the art of product placement than to learn from the masters. Today, that means Microsoft Corp and the Bill and Melinda Gates Foundation, both of which were the subject of articles about how they’re delivering their messages like little pills wrapped in the sugar coating of the entertainment you consume.
Can Microsoft market its way out of the search basement? Probably not, but it’s going to try, entrusting [ad] agency JWT to craft a campaign for its new search engine, alternately dubbed Kumo or Project Kiev or Live Search, depending on who’s talking about it. … The service is being tested and is expected to make its debut in the summer. … Industry executives expect JWT, part of WPP, to unveil an estimated $80 million to $100 million push for the new search engine in June, with online, TV, print and radio executions. Microsoft spent $361 million on U.S. measured media in 2008, the bulk of it devoted to brand advertising and smaller chunks to other Microsoft brands such as Xbox and MSN, according to TNS Media Intelligence data.
The huge [Gates] foundation, brimming with billions of dollars from Mr. Gates and Warren Buffett, is well known for its myriad projects around the world to promote health and education. It is less well known as a behind-the-scenes influencer of public attitudes toward these issues by helping to shape story lines and insert messages into popular entertainment like the television shows “ER,” “Law & Order: SVU” and “Private Practice.” The foundation’s messages on H.I.V. prevention, surgical safety and the spread of infectious diseases have found their way into these shows.
Now the Gates Foundation is set to expand its involvement and spend more money on influencing popular culture through a deal with Viacom, the parent company of MTV and its sister networks VH1, Nickelodeon and BET. It could be called “message placement”: the social or philanthropic corollary to product placement deals in which marketers pay to feature products in shows and movies. Instead of selling Coca-Cola or G.M. cars, they promote education and healthy living.
The Times story uses expert comments from the Kaiser Family Foundation, which has been doing this issue placement for years, and gave advice to the Gates Foundation about how to do this. One of the Kaiser officials told the Times that this “is not about planting a message.”
