Photo: CC from flickr user Lachlan Hardy

Remember recently how Alan Mutter warned that the business of local TV news — supported primarily by expensive advertising on its flagship news programs — was about to be newspapered? That is, to have its very business model rendered, eventually, moot?

Well, here are two more signs that the other shoe is dangling by the merest nanometer of fingernail for local TV news. The first sign is about as concrete as you can get and the other is informed speculation about what Apple (and to a lesser extent, Google) may be up to in the TV space, as soon as this coming Monday.

First, the news, which, here in Baltimore at least, is not good for the news. David Zurawik reports in The Sun that viewership for 11 p.m. newscasts at the ABC, CBS and NBC affiliates has plunged over the past five years in the key demographic of viewers 25 to 54 years of age:

• WBAL (NBC) down 62%
• WMAR (ABC) down 56%
• WJZ (CBS) down 52%

That’s right: The winner of that horserace lost only about half of its 11 p.m. audience.

The usual suspects are cited in the article: The Internet (correct – how much of the late news is actually news for people who are interested in the news?); Our Changing Lifestyles (if this is another word for choosing how to spend a half hour and finding the local tv news wanting, then correct); The arrival of the dreaded Nielsen People Meter (whining and misdirection — if the more accurate and precise tool shows a drop in audience, what does that say about those figures you reported for years using the less precise tool of a hand-completed diary?).

But, to me, the key here is that all of this plunge happened before the onslaught of hyperlocal competition from Aol’s Patch, Yahoo, Fwix and others just now threatening to wash away the footing from under local tv and newspapers. If the past five years have been interesting, the next five are starting to look, well, Biblical.

. . .

And now, the speculation, comma, informed division.

Remember Steve Jobs “hobby,” Apple TV? It was a set-top box released in 2006 and, largely, un-updated in any compelling sense since then. You can rent movies through it, watch video podcasts, show off your photos and watch YouTube videos. Not bad, but you can do a whole lot more with a Boxee box.

There’s currently a growing groundswell of informed speculation (which, in the Apple community, is often 2/5 wish-fulfillment and 3/5 tea-reading) that as soon as this coming week’s World Wide Developer Conference, Apple will reveal a new approach to Apple TV that could very well shift the paradigm for how we “watch tv” in the same way that they changed how we listen to music when iTunes went from a hobby to a full-blown business.

And no one has done a better job of channeling that combination of dreamy-thinking and clue-sifting than Adam Lisagor, in his post titled iPad TV:

I’ve owned and used an Apple TV box for two years. When I found out it could be “opened up” to allow for additional media, it started to overtake my usage of my DVD player and my cable box. So if Apple TV has been, up to now, a hobby, I have been right there with it, a tinkering geek.

But would Steve keep a hobby around for so long without any real plans for it? … Now I’m not one to get all drooley over rumors (yes I am) but when Engadget broke news last week about the next version of the Apple TV box being 1) cheap ($99), 2) run on iPhone OS and 3) streaming-only, without internal storage, I got excited. There are pieces of this hobby that are starting to fit together, and once they do, the hobby will have matured into something important.

For one, what of the massive $1 billion data center Apple’s building in North Carolina? I’ll just echo what others have speculated: this will be where our video originates when we pluck it out of the sky and siphon it through all our devices (including the cheap, tiny new box that sits by the TV).

… It could even be that the Apple TV is the lynchpin of the whole operation, the way that iTunes started as a “hobby” that organized our music collection, and revealed itself to be a hub upon which more than one industry was redefined.

It could be argued that this could be actually good for local stations — allowing them to get their news video in front of even more people in non-traditional channels — but if they don’t think of a way to monetize that video, it’s not. Would you pay 99 cents for access to a video of aftermath of a car crash or a house fire? I’m guessing no.

The reason local television stations (and, under the same model, newspapers) could previously rake in all that advertising cash isn’t so much about the content, but about the content-aggregation. For one discrete half-hour a day, they could guarantee advertisers that a sizable percentage of the local population would tune in for the news/sports/weather bundle and, likely, see the ad in the bargain.

See above for why that’s already no longer working. If Apple and Google get serious about TV, it probably just adds to the pain for local TV stations.

Sam Phillips is not just a singer-songwriter, she’s a mogul.

Well, okay. A mini-mogul. And she’d probably bristle at even that. But through her year-long “Longplay” experiment in making music in semi-public for a paying audience, she’s set herself up as a fascinating amalgam of record company exec and free-wheeling artist.

And what’s really neat about it, it’s allowed average fans to become patrons of her art. Well, mini-patrons. For a dollar a week, anyone can buy into the experiment, directly supporting her work and getting early access to the music as it is recorded and made available to paying members (if you come in late, you still get access to all the music already released).

I’m reminded of this because her latest EP, Old Tin Pan, just came out and, once again, I’m getting to enjoy new music and she and her band are able to (I’m assuming here) keep the food on the table. Or buy some nice shoes. Whatever. And it’s really not about the money, but about the support: I pay because I want her to keep at it. There are lots of other performers I’d gladly support similarly, if they’d only ask.

Think of this the next time someone says people won’t pay for anything online. They will. We will. We just won’t pay for crap or commodity. I’ll pay for Sam’s music, or Evernote’s service or great iPad apps like Appigo’s ToDo or the amazingly useful Digging Into WordPress e-book.

There’s a business model for you: Make things people want to pay for.

The New York Times, as expected, seems to have settled on a date for the paywall to go live: January, 2011.

There’s no point in hashing out, again, whether or not this is a good idea for the New York Times and the many other major metro papers considering such a move. The one good thing about paywalls going live is that the theoretical questions will finally be answered in the real world.

No, what’s interesting is whether this is a good idea for other sites serving those same markets. If, for instance, The Chicago Tribune eventually opts for a paywall of any kind, do the people in the newsroom of WLS and other local media bliss out over the potential for reaching more news consumers? What about the rapidly growing ecosystem of micro-local news and information sites serving communities and towns? If your local newspaper walls up, will you pay, or find other sources?

By stepping back from a 100% free model — no matter how carefully (and slowly – we’ve been talking about this for years) — the large news sites can’t help but create some amount of vacuum into which the smaller sites — and audience — will flow.

But that’s where this all gets very interesting. Because if we’ve learned nothing else in the past decade, it’s that gathering a large audience — “eyeballs,” as the ad guys used to say — is no longer enough. Large publishers and tiny publishers need to cover their costs and make a little profit in the bargain if they’re going to continue publishing. So flowing into the vacuum isn’t enough for the upstarts — they need real business plans.

Recently in the NY Times Magazine, there was a long look at the business models of the non-traditional publishers that have emerged in recent years. It strikes more of an elegiac tone than I think is entirely appropriate, implying that the task is Sisyphean, but it’s essential reading for anyone trying to understand the struggles the journalism business model is facing and will continue to face.

The overriding theme: The future is much, much leaner for journalism, and that business models will need to change, radically, to accommodate that fact:

…the new world could end up looking a lot like the old one, albeit with smaller newsrooms and new players. Politico replaces the Washington correspondent, TMZ is the gossip page and you can get coverage of your baseball team directly from MLB.com, which employs professional sportswriters. In cities like San Diego, New York and Washington, online start-ups are taking on metro news coverage, hoping to tap local ad markets. All of these publications have been hiring real, full-time employees — as have nontraditional providers like Yahoo, which is constructing a new political news site.

If you’re a journalist or a publisher, whether you read that passage and weep or rub your hands with anticipation and hope is a good indicator of what the next few years hold in store for you.

Photo: Creative Commons license, flickr user Shawn Econo.

Photo by Hushed Lavinia

Martin Langeveld reports on a conference focused on the notion of an “InfoValet.” It sounds like attendees at the conference spent a lot of time thinking of ways to describe what they’re onto, but I’d put it this way, from a consumer perspective:

A universal logon system whereby users “pay” for access to information with (secure) information about themselves, rather than with dollars.

Langeveld says, “While a system like this will not necessarily save newspaper publishers (because, for one thing, it will take some time to gain traction), it has the potential to help save journalism by enabling online news publishing at a different scale. While the New York Times could be an InfoValet network member, so can a blogger or micro-local news site, and each can benefit proportionately to their traffic and content value to advertisers and consumers.”

Interesting idea, though any attempt to build a new ecosystem from scratch is going to meet with a certain amount of stubborn resistance. Perhaps the recent announcements by Google and Facebook, opening their logon systems to other sites, might provide some readymade structure for the InfoValet idea.

Two fat newspapers each week and a robust web platform will have more impact than five or six skinny papers and a site that’s not foremost in the newsroom’s mind.

Martin Langeveld, who blogs at News After Newspapers, makes the case that local newspapers are on the road to ruin if they continue to publish every day in print. His recommendation: Print two big papers weekly, on Thursday and Saturday. Profits do shrink under his new model, but at the end of five years, he says they’re much more robust than they would have been following the existing 7-day model to its slow death.

I do hope he posts his spreadsheets, though, so we can all poke and prod at the assumptions.

People like Langeveld are reinventing an industry, idea by idea.

Read the entire proposal here.

I try not to get into outright arguments here, but this seems to me to be a really, really bad idea. You can’t micro-manage every single industry with bailouts and new taxes to support them. If US automakers, for instance, can’t build cars that people want, then they should contract, combine or even, in the most extreme outcome, disappear. We won’t have any shortage of vehicles, as better-run companies slip in to fill the void. That’s cold, true, but that’s also the marketplace in action.

Same goes for journalism. If newspapers have created the perfect storm of outdated content and revenue models at the very moment when user consumption patterns are changing radically, then that’s a bright neon sign that it’s time to change. Not that it’s time to find a deep-pocketed government benefactor to allow things to operate as they always have.

But don’t tell that to David Sasaki. He’s thinking about the National Journalism Foundation, funded by the federal government. Which, as we all know, is really you and me:

The National Journalism Foundation would essentially serve as a re-invented Corporation for Public Broadcasting. Annual funding should increase from $200 million to $3 billion. (One percent of the total cost of the Iraq War; four percent of the federal bank bailout.) Similar to the NSF, the National Journalism Foundation would regularly award grants to individuals, organizations, and institutions that propose projects which serve to better inform the American public about their communities, government, nation, and the rest of the world. PBS and NPR would, of course, continue to receive funding, but other organizations and projects like EveryBlock and FiveThirtyEight.com, which provide important information to the public but don’t attract advertising revenue, would also be considered for funding.

As described, it sounds sort of enticing. Let’s fund the the cool startups. Let’s tax those “telecommunications giants” (who will, no doubt, totally absorb these new taxes out of the kindness of their bleeding hearts) and give the money away to a super-sized Corporation for Public Broadcasting. Yes, let’s. And Popsicles for everyone.

Or, publishers could look down the long-barrel of changing realities and change in ways that will allow them to continue in the business of informing people while still making a profit. But they surely won‘t do that if the Gravy Train is about to pull into town, just like GM won’t change if it’s guaranteed a future through taxpayer bailouts.

And what’s really the worst thing about this? Live for 5-10 years under such a system, and the bulk of the press will be dependent on the government for funding, essentially defanging an already gap-toothed watchdog.

Sorry, I’m not buying it. Journalism is currently screwed, but that’s a good thing. It’s finally forcing some real change. Let’s not screw that up by taking away the only incentive they have to change: fear.

Photo by John Smock, CUNY

At the CUNY summit last week, I was assigned to the group that looked at rethinking our newsrooms to meet the current financial imperatives. Or, as someone wryly named us, “the cost-cutting group.”

But, as Chris O’Brien, one of the thought-leaders in that group, notes in his excellent distillation of the day’s themes and discussions, it was less about the wild slashing that’s going on now in newsrooms large and small, and more about rebuilding a newsroom suited to the needs and challenges of 2008 and beyond.

We took the approach of essentially creating a new news organization from the ground up. But the other way to look at this question is to ask: How would you make a current newsroom more efficient? After leaving the discussion, a number of things occurred to me that should be explored:

1. Use templates for the print paper. Spend less money on designing the paper every day and use that money elsewhere. Newspapers have been trying to design their way out of their problems for years, and it hasn’t worked. I don’t think this something print readers think about. They want substance and content, not more pictures.

2. Cull circulation. Most newspapers are underwriting a chunk of their circulation to fight churn. What if you stopped spending so much money trying to sign up new subscribers? That costs a lot of money. This would require a change in ad rates. But I think it might save costs in the long run.

3. Reduce editors. I love editors, but it seems a lot of content, especially shorter stories, could be posted directly the Web. Many newspapers now let reporters post to blogs without editing. Why not the main site?

4. Newsroom salaries. I’m not sure yet how I feel about this, but it would seem that how we pay people needs to be rethought. Some online news sites pay employees by traffic they generate. That’s ruthless, but still, I wonder if that might work for some online jobs at newspapers?

There’s much more, here at Chris’s Next Newsroom project.

He’s right, to a point. We do tend to dwell on the audited newspaper circulation numbers when they are reported twice yearly. But we do it largely because those are numbers that can directly affect a news organization’s ability to grow revenue. If circulation is up, newspapers traditionally have been able to charge more for ads. If it’s down, as it has been consistently in recent years, it adds to the revenue crisis by devaluing the printed product.

I’m a cheerleader for interactive, probably to a fault. After 12 years building the business, that’s my bias. But as much as online growth matters, print circulation matters just as much at the moment. Yes, digital audience is growing and digital revenues will carry news organizations forward, but due to the competitive environment online, there’s currently not nearly enough online income to make up for the shortfall on the print side.

So circ. matters, and I think it’s right to pay attention to the numbers.

But I’m puzzled by this piece of Baldwin’s argument:

Judging a newspaper by the number of copies in the market makes no more sense than counting the number of television sets to evaluate a TV station. To paraphrase a recent United States President, “It’s the audience, stupid!”

Counting distributed copies strikes me as the best – if not only – way to judge the effectiveness of the printed paper in reaching an audience. It’s not at all like counting TV sets; that analog would be counting newsstands or newspaper trucks. Counting circulation counts consumption of the print product. Whether a paper is paid or free, it’s essentially valueless until someone picks it up and reads it.

Newspaper companies have finally been reaching new people in new ways in the past decade, people who are establishing habits that may not include the printed newspaper at all. Interactive continues to be a substantial success and a growth engine in most markets. I get as frustrated as Matt Baldwin does that the stories about circulation declines – often written by print newsrooms – neglect to mention the enormous upside opportunities. But it’s far too soon to ignore print circulation – and its associated revenue – unless we’re ready to make the leap to an all-digital future.

And that’s a post for another day.

The Sun is typical of a mid-metro market newspaper in that even with the recent news, it remains the dominant media source for news, information and advertising in its market, but it has seen its position slip greatly over the years. When that slippage is reported in 6-month increments of a certain percentage, year-over-year, it’s hard to understand exactly how bad the story is. But, over time, the numbers are bracing.

The oldest reports currently available from ABC are from 1996, so that will be the base year.

In 1996, the Baltimore DMA had 906,100 occupied households. In the September, 1996 Audit Report, The Sun reports an average of 320,986 daily papers and 483,971 Sunday papers. In pure penetration numbers, that represents 35% for the daily and 58% for the Sunday. For every household in the Baltimore DMA, slightly more than one in three was touched by a daily Sun and a bit more than half of the households took a Sunday Sun.

Fast-forward to this week. Using population figures from the March 2008 Publisher’s Statement (not reported yet for September), there are 1,018,455 occupied households in the Baltimore DMA. In the September, 2008 figures reported by The Sun to ABC, the daily average for the paper was 218,923 and 350,640 on Sunday. By these numbers, daily household penetration had slipped to 21% and Sunday household penetration was at 39%.

Keeping in mind that the overall number of households in the Baltimore DMA grew 12% from 1996-2008, during this same period household penetration of the paper in the market dropped 40% on average on weekdays, and 33% on Sundays. While the Baltimore market added 112,355 households in that period, The Sun ended the period distributing 102,000 fewer papers on a typical weekday and 133,000 fewer papers on a typical Sunday.

Of course, in the same period, The Sun’s online audience went from nothing to more than three million visitors a month, from zero page views (The Sun’s web operation launched in September 1996) to more than 37 million a month in 2008. So it can be argued – credibly – that The Sun’s readership actually increased during the 12 years beginning in 1996.

But as robust as the online revenue stream is at The Sun and at similar metro news operations in other markets, the vast majority of revenue is still pegged to print. And when you look at the numbers across the past 12 years, it’s clear that local newspapers would be in a business-model crisis even without over-leveraged corporate owners or the current shaky economy.

Every indicator available to us says that print is not now and will not be the powerhouse driver of revenue it’s been historically. You can’t have your influence drop by 33-40% in 12 years and continue as if nothing’s changed. Slicing dollars and people off the cost structure isn’t enough. Newspapers need to start over, with a business model that acknowledges that the print cash cow has run dry and the digital future is still exchanging dollars for pennies as the audience and advertising moves.

Efforts like Jeff Jarvis’s recent summit on New Business Models for News and the News Innovation web site are good starts, but it’s time that we start treating this like the crisis it is.

This conversation could not have come at a more critical time. Circ. is down. Revenue is down. Staffing is down. If there is going to be journalism in the future, it’s time to change the model now.

This morning, a quick one, courtesy of data from Eric Stein of Google.

As we wrestle with the inevitable and undeniably secular disappearance of classified revenue from newspapers and, by extension, their web sites, the obvious question is “How do I replace those dollars?”

The answer for a lot of us has been local – helping local businesses to grow. And, according to Stein, that potential for growth is just beginning.

By federal estimates, there are 23 million small businesses in the U.S. Of that number, 6-7 million have one or more employees; the rest are sole-proprieterships.

And yet, most of them – in fact the vast majority – have yet to create a web site to promote their businesses. We can’t help them drive traffic. Google can’t help them drive traffic. In the digital world, they don’t exist.

So what are local newspapers doing to help? As the largest single sales and marketing organizations in our markets, what can we do to reach out to the millions of going concerns that need to reach the massive and targetable audience we have?

Who’s doing a good job out there of helping local businesses to reach their audiences? Who’s using the pricing advantage of digital media to show local businesses that they can prosper and even grow in a down market?

What are we doing to help local businesses in our markets?