In the blue corner, we have Venture Capitalist — and former newspaper editor — Alan Mutter showing us that newspapers have lost 42% of their market value ($23 billion) since 2004, most of that coming last year.

In the red corner, we have reporters and photographers at the Seattle Times Company-owned Central Maine Morning Sentinel “not allowing the newspaper to print their names above articles or in photo captions, hoping to draw attention to the fact that they have not agreed on a contract since the expiration of the previous one in January 2006, and have not received raises since January 2005.”

With respect to the employees in Maine, I suggest they pick another opponent (or give me some of what they’re smoking).

Of all the paradigms being disrupted these days, none is more interesting than that of books and book publishing. We all know about how the actual publishing process is evolving, but what you may not realize is that the path from aspiring author to published author is also being disrupted.

The established institution — like so many others in our culture — is being disrupted from the bottom up and old pathways are overgrown with new foliage. The obvious new path is self-publishing, and another is that more bloggers and geeks are writing books these days. They know how to write, because their efforts are being read by people every day, and they have the reputation with potential book buyers to get the attention of publishers.

But one old path that’s closing isn’t really evident — that from newspaper journalist to author, which is the grand dream of many budding journalists, although they might not say so. It’s not polite to state up front that you’re in it for you.

Writers need to write, and newspapers have traditionally provided a tremendous vehicle for that. It’s not just the sensational stuff, like “All The President’s Men;” it includes thousands of books all along the importance spectrum.

One such man is David Simon, who was a reporter for the Baltimore Sun for 13 years before a series he wrote on the Baltimore City Homicide Division, Homicide: A Year on the Killing Streets, was turned into a best-selling novel, and then into an NBC series. His second series and subsequent book, The Corner: A Year in the Life of an Inner-City Neighborhood, became an HBO mini-series, and Simon was on his way. He’s now Executive Producer of the HBO series The Wire, and his life as a writer is fully established.

But he began as a reporter in Baltimore.

In an interview with the fan site Fancast, Simon observed the overgrown path, but his comments strike me as remarkably shallow for a man of his position:

The newsroom where I used to work (the Baltimore Sun) had 460 people. Now it has 300. And there are people out there who just don’t care. They’ll make more money putting out a mediocre paper than they would putting out a better paper. They know this. It’s their equation. They’re quite content with mediocrity.

And within that culture we have people that are saying, ‘oh no, we’re going to do more with less,’ which is one of the great lies of the 21st century. What it means is we’re going to less with less. And that’s the nature of what journalism is becoming.

So here we have a “famous” guy, who became famous by taking a year to write a newspaper series that brought the paper recognition and awards and rocketed Simon into the future, now using the pulpit given to him to throw bricks at the tough business decisions being made today. I find that pretty disingenuous.

Why don’t we do a cost/benefit analysis on Simon’s original series?

You see these sort of ‘we gotcha’ stories, bite sized morsels of outrage, half-assed scandals. No one is tackling big problems. That kind of ambition is gone. When I went into journalism school, which is over 20 years ago now, high end journalism seemed like it was growing by leaps and bounds in its ability to assess the most delicate and ornate contradictions in society.

You look at some of the coverage (of) Watergate and some of the examinations of political infrastructure that followed on the part of high end papers. It was very impressive and there was every reason to believe that it was (going to) become more so, that newspapers were going to become more serious and instead the opposite happened.

Look, we all wish we had the time and resources to build a career as a successful executive producer while being paid by a local newspaper, and while Simon rails against the contemporary press and actually brings his outrage into the HBO series, we all need to back off the blame game and take a look in the mirror. What real, lasting cultural change did Simon bring to Baltimore’s streets? What role did this style of making-a-name-for-yourself journalism play in the distancing of newspapers from their readers?

It’s easy to cast stones, but as the old saying goes, it’s not very smart to do that from glass houses. What we’re reaping today is partially the fault of public companies more interested in the next quarter’s profits than the role of the press in our culture, but they didn’t invent the Internet or the disruptions that are originating with the people formerly known as the audience. I believe the worship of the fame of Woodward and Bernstein is directly responsible for much of what Simon finds wrong with the news these days.

And the next David Simon may come from YouTube. Would it really be all that bad? We’ll see.

If I worked for a Belo newspaper this morning, I’d be really nervous about the company’s decision to separate newspapers and television into two companies. My bosses would be telling me that this is a good thing, because we can now focus just on ourselves and our web properties and let those TV people do their own thing. I’d smile like all good troopers smile, but when I was alone with my thoughts, this is the way they would go:

Hmm, newspapers are dying faster than TV stations, so this likely means the company wants to prepare for the inevitable. What about my stock? What about my retirement?

They said something about $750 million in newspaper revenues created by 3,800 employees. Then they said that the TV stations also do $750 million in revenues with 600 less employees. How’s that going to play out in the balance sheet? Won’t investors see those extra employees as a drag? Oh crap. I’m going to lose my job!

Wait a minute. Does splitting up mean they’re going to sell the papers? Who would buy them? Oh God, don’t let it be Murdoch!

Meanwhile, I think I’d also be a little nervous if I worked at a Belo TV station. I mean, there’ll be rejoicing that “we’re finally not going to be dragged down by those dying newspapers,” which will be followed by gasps of recognition that they don’t have newspapers as an excuse anymore. Welcome to the world of shareholder satisfaction, guys.

These are volatile times for any form of mass media, and we shouldn’t be surprised by moves like this. It’s all about satisfying Wall Street, and we’re going to have to watch and see if this “works” for Belo. If so, watch for others to follow suit.

AFTERTHOUGHTS:

• It occurs to me that Belo is actually selling the newspapers — to the public. Is anybody buying?
• Part of the deal is that the TV side will get all the debt, $1.2 billion worth. That means the newspaper side has a fighting chance to transition to a web-based business, but it saddles the more profitable side with servicing all that red ink.

Here is the latest in my on-going series of essays, TV News in a Postmodern World.

I know I sound like a broken record sometimes (only people my age use that saying), but the foremost assumption of a networked media world is that the highest value goes to the people running the network, not its individual nodes. This is why we strongly recommend that clients get into the business of network building in addition to distributing their content through networks run by others. This is possible at the local level, because, well, everybody’s a sort of media company these days.

This is just one of the reasons I question the value of the Yahoo! Newspaper Consortium, an enormous blending of Yahoo!’s reach and technology with the content and sales efforts of 19 major newspaper companies in the U.S. I’ve had several discussions with people involved in the deal, including a guy I really respect who felt I wasn’t considering all the factors. This essay is my attempt to put the details of the deal into language we can all understand, because I think there is an important lesson here for all of us, whether newspaper or television.

Understanding the Yahoo! Consortium

WARNING: Broadcast bias ahead (or not).

The title statement comes from a Wall St. Journal article today — “Political Ads Stage a Comeback in Newspapers” — that proves the difficulty of media organizations covering their own industry. Despite the excellent factual data provided, the piece still comes off as self-serving — so slanted that it’s vertical.

The story itself is a predictor of good things to come in 2008 for the newspaper industry.

At a time when many categories of newspaper advertising are declining, the political message is making a comeback. As overall spending on campaigns doubled to $3.1 billion between 2002 and 2006, the amount spent on newspapers, including their online editions, tripled to $104 million, according to PQ Media. The rate of growth appears to be highest in races for local posts, such as mayor and state legislator, because newspapers boast greater penetration and influence in small- to medium-size markets.

The article notes that despite the growth, newspapers account for less than 5% of advertising dollars spent on political campaigns.

But the Newspaper Association of America couldn’t have done a better job of writing what comes next:

Newspaper readers vote at above-average rates. Even amid circulation declines, newspapers in many markets reach an audience that is competitive with any single broadcast channel, a strength that online editions are bolstering. Online editions also are reaching a demographic group that their print editions have been losing — the young reader.

…Newspapers also allow for more sophisticated arguments than are delivered in the typical 30-second television campaign.

While I don’t necessarily doubt any of those statements, they are stated as fact without attribution in a publication that’s a part of the industry. This is why it’s so hard to cover media news from the inside, but if the WSJ doesn’t do it, who will?

Even when addressing conflicting evidence, the writer offers an apologetic:

A poll last year by the e-Voter Institute asked about 200 political consultants to rank nine media by effectiveness. The consultants ranked newspapers next to last, behind not only broadcast and cable television but also blogs, radio and direct mail.

That perception conflicts with polls showing that voters rank newspapers third, behind broadcast and cable television, as their primary source of political news and information, says Thomas Edmonds, a Republican political consultant who has studied the issue on behalf of the Newspaper Association of America. Moreover, surveys taken on behalf of the NAA have shown that voters rank newspapers ahead of other media in the credibility of their political messages.

Only one opposing viewpoint goes unchallenged, and that involves a national Democratic consultant who says the primary use of newspapers during a campaign is “trying to get good coverage.”

The article then goes on to note how broadcasters do a better job at basic sales, and that this is one of the reasons newspapers don’t fare as well when it comes to political advertising.

Like I said, it’s tough to cover yourself and be fair. But here’s another thought. Media critics would have a field day if one of the broadcast networks did a similar job on a piece involving political advertising on television.

Based on earnings reports issued this week by publicly-traded media companies, one has to wonder how struggling newspaper companies linking their online futures to a struggling internet company can possibly make a real difference in how either can boost revenues and, subsequently, profits. This question has been bugging me ever since the original announcement that a consortium of newspapers would be working with Yahoo to provide local news to the web giant and split revenues.

That question looms large in the wake of 2nd quarter reports by all involved.

It’s been a rough week for newspaper companies:

• The Journal Register (22 papers) Q2 profits fell 44 percent to $5.5 million from $9.8 million the year before.
• Media General saw its profits tumble 74.8 percent. Q2 net income was $5.1 million, compared to last year’s net income of $20.2 million.
• Dow Jones reported profits fell 26.5 percent, posting earnings of $21 million versus $28.8 million one year ago.
• While Gannett’s profits were up 18% due to asset sales, revenues from its newspaper unit were down across-the-board.
• McClatchy told analysts that Q2 net income fell to $39.95 million from $44.1 million in the year-ago period. That’s a 9.5% drop.

Meanwhile, Yahoo said its profits fell 2% to $160.6 million in the second quarter compared with $164.3 million a year ago, and reporters, like Verne Kopytoff of the San Francisco Chronicle, came away from the analysts’ conference with less-than-confident appraisals.

In what could be confused with a confessional, Yahoo Inc.’s executives listed their Web portal’s problems Tuesday and then promised to engineer the greatest transformation in the struggling company’s history.

The comments, by CEO Jerry Yang and deputy Sue Decker, came during Yahoo’s second-quarter earnings call, after yet another subpar financial report. They underscored what many analysts have already speculated: Change is coming to Yahoo’s business. The question is how much.

The answer will have broad repercussions for Yahoo, which is being pummeled by Google Inc. and a growing crop of upstarts such as MySpace and Facebook in the race for users and online advertising. Although still profitable, Yahoo’s business is eroding, prompting a major reorganization at the company and ample hand-wringing by investors.

There’s a lot of speculation about Yahoo being an acquisition target, and analysts note that the company is counting on the deal with the newspaper companies to help lift its revenues.

So Yahoo is looking for the same lift that the newspapers are seeking, and I can’t figure out how that’s going to happen. Online is the big bright spot for newspaper companies (although the numbers are small, they’re at least headed upwards), and nobody’s been able to fully explain to me how this can possibly be a win-win. The papers will be using Yahoo’s ad-serving software, which will give them access to Yahoo’s considerable local users in sections of the portal beyond the local news they’ll be providing.

But doesn’t Yahoo need that revenue? And sharing the revenue means less for either, right? Is the assumption that promotion from all of these markets will drive new revenue for Yahoo simply because they’re using its ad-serving tools? I just don’t know, and my concern is always for the local media companies.

Meanwhile, other web-based pureplays reported earnings this week with much better outlooks:

• Google’s profits soared 28% but fell below analyst expectations for only the 2nd time since it went public in 2004. Revenue for the period totaled $3.87 billion, a 58 percent increase from $2.46 billion at the same time last year.
• eBay Q2 profits jumped 50 percent to $375.8 million from $250 million last year.
• Microsoft’s profit was up 7 percent, hitting $3.04 billion, compared to $2.83 billion the year before.

One final note. Media company investors are different than technology investors, and they have different expectations. I continue to believe that we’ll see more and more public media companies go private in the months and years ahead, so they can concentrate fiscal efforts on building for the future rather than responding to investor demands.

The Los Angeles Times’ consideration of page one ads is raising distinguished eyebrows and birthing harrumphs of disapproval in the meeting places of Big J journalism (formerly the “smoke-filled rooms”). Lines have been crossed and backs are being stabbed, it seems. Damn the moguls who just want their money! What about “the news?”

At the LATimes, second quarter revenue was down 10% and cash flow down 27%. In his call for front page ads, Publisher David Hiller noted it was one of the worst “ever experienced” by the paper.

Jeff Jarvis neatly sums up what I’m thinking, that page one ads really aren’t the issue:

It’s not that the paper doesn’t matter but with this rate of decline, what everyone should be concentrating on is what come after the paper: not a reinvented print product, not new companions to a print product, but a new conception of local news.

In his memo, Hiller praised the development going on, both in print and online: the launch of a new section, the redesign of another two, and two new online entertainment products. And he talks about one of those corporate initiatives that yield meetings and banners — “Times Change,” this one is called. That’s all well and good.

But what is the LA Times as a local brand and service — note: service vs. product — going to look like in five years and how is it going to get there? How can it get far more local than it is today? How can it build broader networks of people and content and advertising? How can it pay for all that development and experimentation? And how can it survive long enough to get there?

I’ll add that the hand-wringing from the pedestals of “professional” journalism about not only the purity of page one but also the relentless defense of the anachronistic mainstream are out-of-order, inappropriate, misguided and irrelevant in the face of the Media 2.0 distruption. Nostalgic moanings about how wonderful it used to be do nothing to move the rock forward. The news isn’t “the news;” it’s a business. It’s all about profit and growth, and we long ago passed crisis stage. I’m with Jeff on this. Putting ads on the front page is like putting racing stripes on the Titanic.

Oh, and broadcasters need to be paying attention here, too.

As if to punctuate what I wrote below, Romenesko provides this wonderful link:

Conrad Fink of the University of Georgia’s Cox Institute for Newspaper Management says young people “see this revolutionary [newspaper industry] change that we’re in now as simply a matter of course. I find them looking forward to helping write the new business model of the newspaper industry. “I find them intrigued with the online dimensions of the industry. I don’t see the fear and trepidation that so many of us in the older newspaper generation feel with this kind of change.”

You’ve got to love the arrogance of the print industry as it relates to television.

I was at an event recently where a print photojournalist-turned-video photojournalist was talking to people about his craft. “I’m not talking about the kind of video that you see on television news,” he told the crowd. “I’m talking about adding the elements of motion and sound to the story.”

Huh?

Did he invent that or just discover it? The NPPA might have a thoughts about the notion. Motion and sound, huh? I guess that’s a pretty novel concept when frozen images are your stock in trade.

Then there’s my fascination with the word “interstitial.” Here’s one of the web definitions:

This term means something in between and is a page that is inserted in the normal flow of content between a user and a site. An Interstitial Ad is an intrusive ad unit that is delivered without specifically being requested by a user.

Let me give the interpretation here: this is called a commercial.

You see, print folks are so accustomed to display ads that “surround” content that they’re now in love with ads that “interrupt” content. Hell, we’ve been doing that since way back.

What do you expect when the print guys see their model destroyed by disruptive innovations and are forced to “discover” this whole new world out there?
Sigh.

An article in today’s Wall Street Journal contains a graphic I want to share to restate a theme central to the vision we’re trying to share with local media companies here at AR&D.

The article is about the slowing growth in online ad revenue for the newspaper industry and how that suggests advertisers are moving money online but NOT to the coffers of the newspaper industry. It’s an interesting read, but take a close look at the graphic called “Losing Ground.”

While local media companies continue to slug it out with each other, this illustrates that the internet pureplay companies are the real enemy in the quest for LOCAL ad dollars. TV stations will look at this and say, “Hey, everybody, we grew 5.2%!” But look at the paltry 7.1% share and contrast that with the pureplays who own almost 40% of the market and grew at a 22% clip. Directory companies (Yellow Pages) are trending downward, but they still take over 11% of the local pie.

Let me repeat what I believe is THE most important truth about local Media 2.0: the real enemy here is the internet pureplays, driven by the personal media revolution. Unless and until we can get our minds around that, we’ll never create the kinds of local online businesses necessary to compete.

It’s important that we closely watch events and trends within the newspaper industry, because it is a harbinger of things to come for broadcasting, sort of a canary in the mine shaft.

Some observers argue that broadcasting’s collapse won’t necessarily follow newspapers, because, well, TV isn’t newspapers and vice-versa. This is a shallow interpretation of what’s taking place, because it isn’t newspapers OR television that’s being whacked by disruptive influences; it’s the model of mass marketing that’s the problem.

This is why I have been shouting for years that local media companies will never — repeat NEVER — recoup losses to their legacy platforms’ business model by shifting that model online. This is because traditional ad methods follow the path of scarcity, but abundance is the rule-of-thumb online.

Mass marketing requires scarcity in order to create demand. Reduce the supply, increase the demand; it’s as old as the modern culture. But online, the demand side now plays a major role in creating its own supply — and this is especially true of businesses supported by advertising, a.k.a. the media. Fragmentation, disintermediation, the ability to unbundle content from form, and the personal media revolution have all created an abundant, customer-in-charge world for media, one in which pure reach-frequency ad models won’t work.

Some argue that the Wall St. Journal proves this is incorrect, but if corporate America didn’t pay the subscriber fees instead of the subscribers themselves, the WSJ would be in the same boat as everybody else.

There are two stories in the news about newspapers that bear comment. A Reuters’ report shows that online revenue growth for newspapers is slowing, and a story in the San Francisco Chronicle about Yahoo’s alliance with a consortium of newspapers looks like a solution. Both of these articles take a generally desperate view of the revenue situation for papers, and they contain clues about the truth of what’s happening, if you have eyes to see it.

Let’s look at this consortium first. When you cut away all the details, the deal is essentially what television station websites have been a part of for a long time — creating strength for national advertising by combining to function as a network. This “pulling together” is good for the network but not so good for its individual members, primarily because no network of out-of-market users can deliver the kinds of eyeballs that local advertisers want. The balance sheet may look good for a few minutes, but it is not the salvation that the consortium seeks. It is, however, quite a deal for Yahoo, because they can accustom local users to the idea that Yahoo — not the local media company — is the place to go for local news.

I know I’ve said all that before, and a few paragraphs of this particular story suggest that this consortium is something very different. It’s not.

Publish globally, sell locally.

That’s the key to an alliance between Yahoo and a consortium of newspapers…whose local sales forces will start selling online advertising using Yahoo technology to target ads over the Web — showing shoe ads to frequent shoe shoppers, for instance.

No dollar terms were announced and details remain fuzzy, but …Yahoo Chief Executive Officer Terry Semel…(said)…it will help create an unparalleled solution for local and national advertisers.

Behind his comments lie billions of dollars in local online advertising that Yahoo and its newspaper allies have decided to sell together because neither can get that money alone, said Lincoln Millstein, senior vice president for Hearst Newspapers…

“We’ve come to the conclusion that we’ll never build (ad technology) platforms as robust as them and they have come to the conclusion that they will never develop the sort of sales resources we have,” Millstein said.

…Wes Jackson, president of the interactive division of Belo Corp., one of the leaders among the 12 chains that put together the deal, said the alliance should bring money to the newspaper side — just not enough in and of itself.

“We wouldn’t be doing this deal if there weren’t meaningful economics,” he said. “I don’t necessarily say this is a savior play for the newspaper industry. I say this is an incredibly powerful play for our newspaper Web sites.”

In a nutshell, the papers will use Yahoo’s targeting technology to put their local advertisers in front of potential customers, but because this will take place “on” Yahoo, there’s no guarantee these will be the customers they’re actually seeking. Local media needs targeting opportunities using databases of local users, not global users, and they need to get 100% of that revenue.

But look what Yahoo gains! As each day goes by, the Yahoo “audience” gets more and more accustomed to the idea that Yahoo is a one-stop shop for local news. Moreover, those advertisers to whom the local newspapers are selling also get used to the same idea.

This is certainly, at the very best, a potential, short-term revenue shot in the arm, and investors will be happy for a few quarterly reports. In the long run, however, it’s yet another up tick in the stovetop water temperature beneath the pot of frogs formerly known as the newspaper industry.

The Reuters story appears to be just another ominous sign that the industry is in trouble, but this one is a knife to the heart, because it evidences through reports released this week that the industry’s overarching online strategy is failing. Rapid online revenue growth obtained through reach/frequency ad plays has begun to slow, and this will have a domino effect in the months ahead.

U.S. newspaper companies have pinned their hopes on their Web sites and other Internet-related assets as circulation falls and advertisers shift their spending elsewhere.

The big question is when online revenue would make up for what they are losing in print.

This week’s results suggest that the transition “is going to be slower and perhaps less profitable than newspapers have anticipated,” said John Morton, a longtime newspaper analyst and president of Morton Research Inc.

Again, my money is on the belief that online revenue of the sort the industry is currently pursuing will never make up for what newspapers are losing in print.

There’s plenty of spin in the article, but I want to point out once again that the essential problem for all local media companies is their insistence in the belief that a model of scarcity online will generate the kinds of revenue needed to offset losses to legacy platforms. This is an illusion, and it’s why local media companies need to diversify and “become” entrepreneurial internet companies in order to fully survive.

We cannot rely only on our brands and our content to pull us through this transition, because it is impossible to scale content in an environment of abundance. Moreover, content is the wrong end of the information value chain online; the “right” end is the aggregation of content, which is the role Yahoo, Google, MSN, AOL and the other internet pureplays possess. The longer we wait to aggregate the local web, the more we accelerate our own demise.

Let us in broadcasting not be fooled by the notion that video is different than text online. It is, but it isn’t. And where it isn’t is what matters.

People who know me well know that I have this pocketful of little sayings (My “isms”) that I use to help define life’s seeming complexities. The title of this post is one of them, and events of the past week have brought it to mind once again.

Yesterday, the folks at Pew released their latest “State of the News Media” report, and it’s filled with ominous prose (even moreso than the same report last year, etc.) that describes a collapsing infrastructure and an industry in search of answers. “The hope that Internet advertising will someday match what print and television now bring in appears to be vanishing,” the report notes, and this is the most discouraging nugget of all. Robert MacMillan of Reuters picked up on this theme.

News outlets, particularly U.S. newspapers, were able to rely on advertising and subscriptions for years, and have staked high hopes on their online sales eventually eclipsing weaker print revenue.

That may not work out, however, said Tom Rosenstiel, the study’s supervisor and the group’s director. The amount of online advertising dollars is still rising, “but now there are growing doubts about how much of that will accrue to news,” the study said.

“The people on the countinghouse side have got to come up with a new plan,” said Rosenstiel, who used to cover the news business for the Los Angeles Times. “The audience is migrating but the advertising probably never will in sufficient amounts.”

The report questions whether the industry has the vision or the capacity to lift itself out of the quagmire and notes that public ownership likely works against it at this time in history.

And this leads me to a session I attended last week by the people at the American Press Institute’s Newspaper Next program. This elaborate and intense body of work came from some of the best business minds in America, and it’s designed to provide newspapers with the tools they need to innovate.

The data was interesting, and I was right there with the guy, until he pulled out the various forms and formulas to manage change. It was a step-by-step, “one potato, two potato, three potato, four” (illustrated) guide to building new enterprises, with appropriate attention to the bottom line, of course.

You can’t left brain your way into right brain thinking.

The problems facing the news media today are enormous and require original thinking, and you just won’t get that from the Harvard Business School.

In his keynote address to the public broadcasters of the Integrated Media Association two weeks ago, the inimitable Michael Rosenblum opened with, “I gotta tell ya, you’re all fucked!” He then went on to spin his historical tales of disruptive innovations and how failure to react correctly cost governments, armies and businesses everything.

The news media doesn’t need another report or another study. It needs a vision, and that, I’m afraid, isn’t going to come — perhaps even cannot come — from within.

A new Borrell Associates’ report due to be released Tuesday finds that newspaper-run websites are making more money from VIDEO advertising than TV station sites are by a ratio of almost 3 to 1 ($81 million to $32 million).

The numbers are small, but the growth isn’t, and Borrell is saying it’s just begun.

Video Ads, Paid Search Dominate Local Web by 2012

Source: Borrell Associates Inc., 2/2007

The report states that the newspaper money is coming from a new type of video ad.

Where will most of that (advertising) money go? Not to the purveyors of traditional “word from our sponsor” commercials, but to those who can offer long-form video information that their Web site visitors actually choose to see.

A few years ago, Doc Searls, one of the authors of The Cluetrain Manifesto, wrote that “there is no demand for messages.” He argued that the illusion of such a demand was one of the central tenets of mass marketing and one that technology was helping people overcome (think TiVo). We’ve been so busy “driving traffic” that we forgot to ask if anybody really wanted to get in the car.

It’s important to understand, however, that this has never been a desire to get away from advertising; it’s the unwanted nature of the beast that’s the problem.

The most important point of the Borrell report isn’t that newspapers are beating TV stations at their own game. It’s HOW they’re doing it, for this is a market that has tremendous potential for growth, especially at the local level.

Smart newspapers are offering these ads as part of their online classifieds, and there’s no reason television stations can’t do the same. Classifieds are the place in the print world where people go when they want advertising. But let’s step away from the print paradigm for a moment and look at this from a television perspective. What are video classifieds if not a series of channels in a station line-up? This is the world we need to explore, and the Web makes that possible.

This is the practice over at our old friend YouTube. YouTube sells “channels” to big advertisers, who are then responsible for providing the content for the channel. It is, in effect, long-form video advertising, and some of it is darned good. The advantage that YouTube brings is, of course, the staggering community of people who can choose to click on those ad channels. Check out their “partners” channel page. Could you do something similar? Why not? This is VIDEO, for crying out loud — local television’s bread and butter.

Borrell told me that the 2.0 world is “coming quickly,” and that media companies need only look at his projections to understand that local online search and local online video are where we need to point our guns.

The traditional mass-media forms of packaging news and selling “display” advertising around it are becoming less viable on the Internet. This new environment mimics what we know of cable TV, only with far greater interactivity and consumer control.

The most exciting thing I’ve seen in the numbers is the consumer demand for advertising, which pales in comparison to consumer demand for local news. In the end, the local media company that wins is one that can deliver a wealth of interactive content — especially video — around consumer verticals like real estate, health, automotive and other high-priced items that require lots of prior research.

There’s a general assumption out there that people are avoiding commercials, because they don’t like advertising. The Interactive Advertising Bureau goes to great lengths to point out that this isn’t true. People just don’t like to be interrupted by commercials. Will they seek out commercials? You bet.

Again, think of the enormous demand for online classifieds across all ad segments. And what is EBay, if not a place where people advertise their wares?

People need to shop and are always looking for bargains or selection, regardless of what they’re buying. While most people watching a commercial may do so for entertainment or because they have no choice, there is a small percentage that actually wants MORE information, as my friend Steve Marx constantly preaches. We need to be in the business of helping consumers find that more information.

Another piece of evidence revealing a demand for advertising is click-throughs for online ads. The rate that people click through is a crude measurement of demand. These rates vary depending on the relevancy of the content within which ads are placed — the more contextual the ads, the better the response. The average is somewhere around a half a percent, but contextual ads have much higher rates. That means some people want more, and providing long form video ads online is one way we can meet that need.

This new Borrell report is an absolute stunner and perhaps one of the most important and useful pieces of information to come along in years. It will be available for general distribution via the Borrell site at noon on Tuesday.

Many more years ago than I care to remember, I was close friends with an inner city high school basketball coach. At practice one day, I kept hearing players say “I’m known” when making a basket. The deal was that if a guy scored in a game, his name would appear in the paper along with the points he scored. Hence, they would be “known.”

My friend Debora Wenger wrote about my work and some of my opinions for the Society of Professional Journalists.

I’m known!

UPI is reporting that U.S. media job cuts went up 88% last year, and the trend is expected to continue. 17,809 media jobs disappeared in 2006, the largest since the collapse of the internet bubble in 2001, according to a report from outplacement consultancy firm Challenger Gray & Christmas. “A sea change in the way people get and read news,” the report said, “not to mention the way they search for jobs, used cars and consumer products, was the primary contributor.”

Media companies, including the New York Times Co. and Time Inc., have already laid off 2,000 employees in 2007, Challenger noted, saying the cuts suggested the downsizing trend would continue.

“These organizations will continue to make adjustments as their focus shifts from print to electronic,” Chief Executive John Challenger said. “Until they can figure out a way to make as much money from their online services as they are losing from the print side, it is going to be an uphill battle.”

This is grim news for anybody working in the media industry, but it’s necessary knowledge for people who would rather hold onto the past than seize opportunities for tomorrow. That job you hold so dear — the one that gives you status in the community and puts food on your family’s table — is not the provider it used to be. Now, you can fight this and anybody who tries to help you, or you can open your friggin’ eyes and accept that your boss is just as afraid as you are, and that the only way out of this hole is together.

I gave up reading the industry discussion boards a couple of years ago, because I couldn’t stand the moaning and complaining from misguided, misinformed, angry and fearful people. I think we’re all trying to do the best we can with what we have, so I’m willing to give anybody the benefit of the doubt. But I will never understand how people can be so deceived as to think the disruptive forces that are attacking mass marketing business models are anything less than historic and cultural. To blame “management” for a fragmenting and shrinking universe is like blaming the captain for a storm at sea.

Coulda, shoulda, woulda. Yeah, right.

Now is the time to grow a spine and face reality. The money in media is moving. What are you doing to avail yourself of the opportunities that the move offers?

Harvard’s Nieman Foundation for Journalism has released its Winter Report with the provocative title “Goodbye Gutenberg.” It’s an in-depth analysis of the end of the newspaper era of journalism, and it contains some really good stuff.

From Jon Palfreman’s section, “Caught in the Web,” is a look at how IQ scores of young people are rising in the area of spatial reasoning, and this, he argues, has serious ramifications for the future of journalism.

…the love fest between the MySpace generation and the Web may signal a profound moment in human culture. With the Web, we could be witnessing the most important development in expressive media since the advent of writing. One exciting if disruptive possibility is that under the influence of the young, the Internet will usher in a new era of interactive, audiovisual literacy. Though written words will remain critical to human communication, it’s likely they will no longer dominate in the exchange of news and information.

Craig Newmark of Craigslist fame adds a piece about citizen journalism from his perspective as the founder of a web empire built on trust.

…a strength of good citizen journalism is when the correspondent has the courage to speak truthfully even in the face of powerful opposition. In some respects, these 21st century Web correspondents (like some of the best journalists) are following in the footsteps of Martin Luther, John Locke, and Thomas Paine, whose words led to large scale, effective change.

From where I sit, the highest priority right now seems to be finding ways to encourage the convergence of what’s now being done by journalists with what can be done when citizens add their voices to the mix. And this includes journalism’s essential role of being a watchdog on government and other important social and economic institutions.

Rebecca MacKinnon and Ethan Zuckerman share their Global Voices Manifesto, and Judy Muller’s chilling “Plagiarism Goes by a Different Name on the Web looks at a case from her own experience in which the word “repurposing” actually means “plagiarism.”

There is some excellent material here, all built around the theme of a farewell to the creator of the printing press.

Newsrooms are being hollowed out, and editors who resist such cutbacks are losing their jobs. Digital video cameras and tape recorders replace reporters’ notebooks as newspapers—and other news organizations—train staff in multimedia storytelling. In this issue, words about journalists’ experiences in the digital era transport our vision forward, while our eye takes us on a visual voyage back to a time when newspapers wove communities together.

R.I.P. Gutenberg

Readers here won’t be surprised by this, but Frank Barnako at Marketwatch is reporting that the blogging strategy of top newspapers is having a pretty significant impact on overall web traffic.

The number of visitors to the blog pages of the top 10 online newspapers grew 210% in the past year, far outpacing growth to the parent sites. Nielsen/NetRatings found that while the unique audience to online newspapers grew 9% from December 2005 to December 2006, the number of visitors to blog pages at the top newspapers skyrocketed and accounted for 13% of the parent sites’ total traffic.

At WKRN-TV, there are weeks when the 23 blogs outperform the mother site in all metrics, and I just wonder why it has taken these other folks so long to figure out that this is smart business.

But beyond all that, there are significant reasons why these types of “publications” are having an impact:

• They’re written in conversational English.
• They contain argument — the element missing in contemporary journalism thanks to the “cleansing” of that bogus standard known as objectivity.
• They offer transparency about the writer, which leads to trust.

But the greatest benefit of all about this kind of strategy is that it moves the creation of web content into the hands of the people who are paid to create content and away from a staff of re-writers, regardless of how talented they may be. That, more than anything else, makes this strategy one of enormous value.

Is there a better illustration of what’s happening to traditional media than this photo? The Wall St. Journal (I’m a subscriber) began selling the smaller version of its paper last week, and while I like it, the image of the “new” Journal is telling. I don’t wish to beat up the newspaper industry, but here’s an interesting comparison.

Screen resolution of home computer monitors has been changing since the early days, that is to say the screen size has been getting bigger. According to Browser News, the default screen resolution is now 1024×768 pixels. Over 80 percent of computers report this resolution (or higher) now. Only 15 percent use the “old” 800×600 resolution.

Since browsers are adjustable, nobody really knows the default browser window size now, but most sites are currently designed to be 980 pixels wide, up from the popular 800 pixel width just a few years ago. Sites that continue with 800 pixel width will sooner or later get wider.

Contrast this with the Journal getting narrower, and the picture of a changing media world is complete.

In one of the most remarkable pieces of “commentary” I’ve ever read, The Philadelphia Daily News’ Will Bunch blames the altruism of Craig Newmark for the loss of jobs in the newspaper industry. Bunch’s whinefest carries a picture of Lee Harvey Oswald and draws a parallel.

The American newspaper is being assassinated by “a lone nut.”

And we’re going to tell you the name of that lone nut:

Craig Newmark of Craigslist (not pictured above) — a man whose altruistic vision of running a business to NOT maximize profits is now threatening the livelyhood of thousands of working men and women across this country, your neighbors who work at and publish your local newspaper, jobs that were once supported by the classified ads that have migrated to the most free (or low-cost) Craigslist.

Bunch quotes a Forbes article that seems unable to grasp the Craigslist philosophy of leaving money in the hands of users, and this fuels Bunch’s anger.

If you won’t charge customers for ads, and apparently you won’t, then at least start accepting those text ads, and funnel those millions of dollars into the newly formed Craig’s Foundation. And what will be the main benefactor of this new foundation? A scholarship fund, to pay for the college education of the dozens of displaced journalists across America losing their jobs everyday…And if there’s any cash left, how about building a retirement home for any newspaper folks who might somehow see a diminished pension down the road?

Craigslist is certainly a major disruptive force in the newspaper world, but Bunch sounds a bit like a whale oil spokesman casting aspersions on Thomas Edison. I know Craig Newmark, and he is one of the most sincere and likeable people on the planet. He doesn’t deserve this, but that’s not the point. Mr. Bunch needs a lesson in acceptance and humility, for clearly he suffers from oxygen deprivation atop the pedestal he’s built for himself.

And if Craig Newmark is a lone nut, then he’s growing into one hell of a free-market tree. It isn’t personal; it’s just business.

Peter Scheer’s “idea” to embargo free newspaper content on the web for 24 hours is being universally rejected by observers today. Scheer is a San Francisco lawyer and journalist and executive director of the California First Amendment Coalition. That’s THE First Amendment all right. In a nutshell, Scheer suggests that all newspapers get together (outside anti-trust laws, of course) and agree not to run any free content online until 24 hours have passed.

Imagine the major Web portals — Yahoo, Google, AOL and MSN — with nothing to offer in the category of news except out of date articles from “mainstream” media and blogosphere musings on yesterday’s news. Digital fish wrap. And the portals know from unhappy experience (most recently in the case of Yahoo) just how difficult it is to create original and timely news content themselves.

He is attempting to create an artificial scarcity for content and thereby establish its real value. It doesn’t sit well with media observers.

Jeff Jarvis:

Uh, counselor, you assume that you can still control the news. You can’t. That’s the whole point of the internet. Others can easily step into whatever void there is and report what you don’t report; you’re only opening the door for them. Oh, but they don’t have what the papers have? Look again: It’s worth cataloguing just how much in a paper is commodity news that is known elsewhere. So you would make papers staler in a world that demands freshness. You would tell you customers — your former readers — to continue living by your schedule instead of theirs. You would drive the last nail into papers’ coffins.

Cory Bergman:

Interesting idea, but it will never work, of course. How about this instead: stop trying to copy newspapers to the web and start developing new information-related, niche businesses online.

Steve Fox:

Every now and then, you read a piece where you have to stop, take a breath and then go back and make sure you actually just read that…

The assumption that embargoing information (good luck doing that, by the way) will somehow inflate the value of newspapers is achingly flawed but no doubt is a concept supported in many corporate board rooms.

An editor at The Washington Post once asked me how the Web site could drive readers to pick up and read the Sunday newspaper. I politely responded that that’s the wrong direction.

Scheer’s 1996-like proposal is just that, headed in the wrong direction. And, the idea that a First Amendment attorney would propose restrictions on the release of information? Wow.

I don’t have much good to say about this “idea” either, because it completely misses what’s really taking place online. I agree that newspapers (and other local media) will NEVER replace the money they’re losing in the Media 1.0 space with web revenues, because every strategy they’re employing is an act of defending turf from an enormous business disruption.

Salvation for local media, as I will preach ’til my dying day, lies WITHIN the disruption, and that takes an entirely different set of eyes to see.

In Texas, we’d call Scheer’s idea “dumber than a bucket of hair.”