In your third graf, you mentioned that newspapers will learn to be more like magazines in that they will learn to appeal to narrower niches.

In a not obvious way, newspapers are already doing this.

The most dire forecasts of newspapers would probably come from sociologists. They would conjecture that newspapers’ crisis is a demographic one — something that companies would ultimately be fruitless to stop.

If you work at a newspaper or media organization, try to get a marketing report on your readership profile.

Organizations operating in major metropolitan areas have to deal with the WOW Factor. WOW sounds like a marketing call to arms. It’s actually the demographic equivalent of the Gordian Knot.

The WOW Factor is thus: Media organizations (and especially newspapers) tend to have audiences that are Whiter, Older and Wealthier disproportionate to their actual numbers in the metropolitan areas in which they live.

If you read these reports, you’ll see that metropolitan areas are diverse in race, ethnicity, age and income — while the core base of media consumers are generally clustered in white, upper-middle income neighborhoods. Moreover, the age demographics are appealing if you are AARP magazine’s marketing director, but worrisome for all other outlets.

The other problem is that trying to shed this demographic meets with resistance from advertisers. One of the hidden reasons why newspapers don’t reach out to younger (or non-white) audiences is that there’s an insufficient advertiser base to match ad buyers with media consumers.

It’s quite evident that on the sales, marketing and journalism fronts, there is a disconnect between the organization and its audience. Otherwise, media demos would match census reports.

So, mainstream media are already catering to a niche audience: the whiter, older and wealthier members of the community.

I guess I ended up reinforcing what you were saying about the disconnect between media and community.

As for news as marketing, replace “content” with “news” and sounds like you may have a winner. Again, good journalism is not necessarily good business.

For instance, let’s say a newspaper covertly reinvents itself — still performing the same functions, but journalism instead becomes not a pursuit for news but “intelligence gathering” for advertising agencies and marketing firms. Say a marketing company wants to test the waters in a new area for a client. It would pay the newspaper not for advertising, but instead would subsidize a position for a staff writer to cover the marketer’s target demographic. It would be under the guise of objective journalism, only the marketer would have pre-publication access to the story and begin calculating prospects.

Only the most desperate, check-pulling hack journalist would agree to this. Most would rather resign than to get their hands dirty into such an affair.

But, do you think newspapers should be looking for these hacks?

The thing about cab drivers is that the only place they can sell their time is owned by the cab company. Not true about “freelance on steroids” or “entrepreneurs.”

The thing about information is that it only has real value in context. Yes all copy can be cut and pasted at will. It’s the last mile to the community where value happens.

Newspapers might turn out to make their money the same way lots of magazines have learned to make money. By being a voice for a certain kind of person and then selling them lots of other stuff they want. For example, events or books or CD’s or…. Then the real value a newspaper can give to their advertiser is a deep knowledge of their potential customers.

The news then becomes the best way to connect with a particular community. Given that issue is gaining intelligence about a particular community, the one size fits all of grabbing stuff from the web, or AP, won’t do it. Even if it’s free and even well written. If it doesn’t speak to the people in the room, it’s worthless.

In this model, news it is not an overhead expense. It just becomes part of the marketing budget. As part of the marketing budget, no need for pay for words. Besides, the suits, who mostly don’t understand journalism anyway, definitely think they do understand marketing and tend to throw silly amounts of money at it.

The Internet hit newspapers’ ad margins on both flanks.

You are right on about Craigslist. It spells doom for classified ads.

The search engine spelled doom to display advertising, since it enabled advertisers and customers to interact directly, eliminating the middleman of the physical advertising space. The Internet also flattened the cost of advertising, as a Web page is the lowest cost and the most flexible for advertisers.

As for the monetization of content, most news organizations cannot count on it. For one thing, there’s too much free content that fills the need for the average reader. Second, the Internet makes information easy to steal if it was behind a paid wall. Plain text can simply be copied and shared. Any sort of copy protection will be ripped, and news organizations are going to play a losing game by trying to keep ahead of the cyberthieves.

If news organizations can’t meter the content, they’ll make the money on the backs of journalists. If news organizations shutter their newsrooms, and change compensation from wages to remuneration for consumed information, or pay-per-click journalism, they’ve solved the monetization problem.

This is not as far-fetched as it sounds. For example, where does the cab company in your city make its money? If you said, fares … surprise, but no! Cab companies make their money off their own drivers! How? First, drivers are “independent contractors,” and the taxi is their shop, so they must pay for all the costs out of their own pockets. Second, drivers must “work” for a cab company, and must turn over a flat rate (not a fixed percentage) per day to the franchise holder.

News companies can just as easily make money by paying the lowest amount for content possible, especially if they aren’t growing their audiences.

Journalists wouldn’t settle for the crumbs they’d get, but the content void would be filled by bloggers, hobbyist writers or well-paid professionals who could use the compensation as secondary value, like the Amazon Affiliate program.

The underlying lesson is that in the media world, the more the more. It’s not a zero sum game. What I meant about monopoly position had more to do with the business model and was place determined.

When the number of newspapers in metro areas went down to 2 or 3 or 1, instead of 15 or 20 or more. It gave local newspapers a monopoly for local advertising.

Craigslist probably did more to hurt the newspaper business models than anything else. Classifieds were a great revenue stream. Very little space. Easy to place. Short sales cycle.
Once craigslist scaled that hurt. Meanwhile, shoppers and ultra local newspapers have continued to grow. But it’s not about journalism. It’s about giving people info they need to do what they want to do. Shoppers are successful because the ad listings are the copy.

In my humble opinion, the newspaper business model hasn’t had that much to do with journalism for at least 50 years. It was about aggregating eyeballs to sell to advertisers. The journo stuff was a “nice to have”, not a “must have”. Things that are not “must haves” tend to wither and disappear with new competition.

What I think this implies is that the b model question is ” How do you get people to pay for stories that entertain and inform?” Job one is to produce articles that entertain and inform.
There are lots of experiments on the web and even within newspapers to do job one, with uneven success, so far.

At the top of the pyramid, I think the New Yorker is a model worth looking at. They seem to have many ways to monetize their content. Paradoxically it seems, they allow open access to all their content on line. But they produce a long tail with many ways to create revenue streams.

Newspapers have had to worry about competition in the form of radio and television news for most of the 20th century.

The internet, though, is something different.

Never in the history of human civilization has information been so democratized. Never in the history of human civilization has there been a method of communication that was so widespread, so quick to gain acceptance and so affordable. It is also amazingly versatile.

It is a tool that has greatly advanced humanity.

So where does this leave news organizations? In a bad spot.

But it’s one that has been faced before. What we are seeing is not new. Most of the people who witnessed the last communications revolution, television, are now retired and out of the business. This is new to most of us.

It’s too early to bet on who the winners and losers are. There are just too many unknowns. As a generality, I will say that there will be a true oligopoly of media companies that offer the full spectrum of information: news, entertainment and PRAM (public relations, advertising and marketing) divisions all under the same umbrella. Most media companies today would all be under the Viacom, GE, Disney and News/Fox banner. That’s all.

Maybe the answer to “Why has no one developed a business model where the print version and electronic version can co-exist in a profitable relationship?” can be found there.

My answer is a little different. I think newspapers have lived for too long in a monopoly environment. It’s hard to stay sharp without real competition. In some ways, they are the victims of their previous success. I think it’s a dinosaur problem.

Journalists and Print will find their new space. The internet will be part of it. But slow moving newspapers, maybe not so much.

I agree with virtually all of the comments made. For starters I like a tangible product in my hands. There’s nothing better than the morning coffee and newspaper or a magazine before bedtime. For me, it’s not very appealing to sit in an airport terminal and read the news on my laptop. Don’t get me wrong, I supplement the physical media with online news everyday, and I share newsworthy items through Facebook, Twitter, LinkedIn and delicious with my colleagues.

I have long stated that the media is not going to die. I believe it will continue to compress – we’ll see more magazines fold and newsroom layoffs – but there will never be a time (at least in my lifetime) when we won’t be able to walk out our front door and pick up the local daily newspaper.

To the point of the old guard and the new, young technologists. There is definitely a place in journalism for both.

But the question I have is how did journalism fall into its current state? The simple answer is the economy – reduced ad revenue equals reduced profit and layoffs. But is laying off journalists the answer? You reduce the quality of your product and you expect consumers to still buy it?

Other say the web is destroying journalism. What exactly does that mean? How is the web destroying journalism? Why has no one developed a business model where the print version and electronic version can co-exist in a profitable relationship?

I’ll admit I don’t have the answer but I am desperate to find one. Now for my plug. I started a blog – http://themediamind.blogspot.com/ – where I asked the question – what do we need to do to save the media industry? I welcome feedback to my blog posts and this reply as I hope to begin the revolution to save the media from its downward spiral.

Has anyone else noticed that even given the dismal state of the industry, there is still much competition amongst newspaper companies? We need a new business model! There is simply not enough advertising money out there for us to be competing with each other for it. Is it worth it to ruin another newspaper just so yours survives? Maybe I am being too naive, but ideally I would like all newspapers to survive. Or at least let the Internet be the killer, not another newspaper.

Nice analysis. I agree with about the importance of metrics to the business people. But I think at least some of them are starting to realize that they are measuring the wrong things.
Consider Lehman, et al. Lots of measuring and metrics going on there.

Consider freelancing on steroids. If you could make a decent living with health care and always be able to fire your boss, it has it’s advantages. Let me share one story from a graphic designer I used to teach. She decided to freelance (start her own business, which is just freelancing in different words.) She is very talented and has a high risk profile. Young, just married, no kids.

She works 12 hours a day for 2 weeks every month. Then takes 2 weeks off to recharge and live a life. Then she repeats. For the last two year, she made over $80K a year. With no permanent boss.

Meanwhile, freelance for Generation Google is not a bug, it’s a feature. And the organizational forms to support it are starting to emerge. Google “freelancers union” to see what I mean.

As for the bean counters who are focused on metrics that don’t have much to do with either business success or real life, into the trash bin of history for them.

Those experts, such as economists or environmental scientists, can always freelance.

That is the most likely way the business is going to try to protect itself.

To elaborate further on what I mentioned about the vapor paper, I observe the changes will be led by the finance end of the business for its own needs and prerogatives.

I am a journalist, but I am not here to argue the obvious worth of the journalists. I am saying that we, as journalists, have to get inside the mind of the money people and understand why and how they base their decisions.

Financial people are hardcore empiricists. The most dispassionate ones tend to do the best. The problem is, their well-being and the journalists’ are a zero-sum game. Their self-preservation is increased at the expense of every eliminated job.

This may seem odd, but shedding losses is also considered growth even though revenues or profits decline.

The biggest job loss came from the prepress and production departments, but this was through technology. Advancements made workers redundant, and computers not only made even more workers redundant, but they also de-skilled jobs. So not only are there fewer replacements, but they also have to be paid less since the cost of pushing buttons is less skill-intensive than the manual trades, which usually required lengthy appenticeship for workers to become skilled.

Now it’s the journalists’ turn at the guillotine. Only this time, technology is not our undoing. Yes, I dare say that the internet is not our enemy. In fact, it has been the greatest enhancement to journalism ever. It makes research, information gathering and multi-way feedback spontaneous and easy, and has actually improved the skill-set of journalists.

The one piece of technology that proves to be the undoing of journalists is the spreadsheet, not the internet.

See, a finance person can quantify how much a journalist costs to keep on the payroll. He or she can calculate how much in salary, perks and taxes has to be paid to each journalist. What he or she doesn’t know, however, is how much does the copy that the person produces bring in as revenue?

There is no gross-revenue-per-byline metric, though.

Finance people want one desperately. Once they find it, the newsroom goes the way of hot lead and linotype.

The crisis in newspapers is going to press them into action, and in short order a metric for revenue-per-byline will be devised. The goal is going to be for a news organization to monetize every single bit of information — not so much to make money on every article, but to make remuneration so low that journalism will become a worthwhile pursuit only for mass-quantity writing or already bankable established names, such as best-selling authors. That, and/or freelancing becoming a hobby or a pittance income for bloggers who are largely writing for free — a sort of Amazon affiliates for copy, if you will.

My prediction is that this aggregation will be like freelancing on steroids. At least freelancing is paid according to input. The new style of freelancing will be based on consumption: click-throughs and column-inches as a percentage of paid circulation.

So the plan for reinventing journalism is to reduce journalists to sharecroppers.

If you want to know how much you’d make under such a system per year, take the highest salary you made, and take off the digits to the right of the comma. And that’s if you put in the same amount of work as you do right now!

I’ll spare you the details of where this will lead us, unless you really want to know. It’s a lot like making sausages and laws, but only more morbid, because it affects all of us reading this blog.

The link:http://sellingprint.blogspot.com/2008/11/if-i-were-printer-pt-1.html

The thing is that flex time and independents present a new opportunity. The way to get them paid is still being crystallized. I listen to NPR, Brian Lehrer is for my money a model for a beat reporter with NY as his beat. An idea I’ve been floating around is that newspapers should go after the textbook business. But that’s a different story.

My take is that journalism companies more than anything need new business models. The talent is out there. Lots of that talent will work for passion and visibility as long as they have a reasonable comp, health care and control their own time.

We agree about the old talent. As long as they are really talent, not just job holders who go through the steps. There are many younger people who need to be guided and mentored. Why leave it to the schools to get the training money? Why not figure out a way to get paid for apprenticeships? Better education for the kids. Better role for the Baby Boomers.