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I wrote my March 1 blog about the Rocky Mountain News, a venerable 150-year-old newspaper that went bust. I suggested how it could have avoided bankruptcy, in the face of a 50 percent fall in advertising revenues. Later, I heard an expert note that subscribers to American newspapers fell from 60 million to 50 million in the past decade — but subscribers to Internet editions rose from about zero to 75 million! The newspaper industry faces bankruptcy — even though it has more clients, more subscribers! Why? Because like the music industry, it has failed to adapt to the changing times. It treated the Internet not as savior but as fierce foe. What a tragedy. And what a dumb mistake. But a small handful of newspaper managers seem to see the light.

Not far from Colorado, in the state of Washington, a newspaper understands the paradigm shift. It is the Seattle Post-Intelligencer. Here is what the International Herald Tribune wrote on March 17:

Seattle newspaper drops the ‘paper’
By William Yardley and Richard PérezPeña
Tuesday, March 17, 2009

SEATTLE: The Seattle Post-Intelligencer planned to produce its last printed edition Tuesday and become an Internet-only news source, Hearst Corp. said, making it by far the largest American newspaper to take that leap. But The P-I, as it is called, will resemble a local Huffington Post more than a traditional newspaper, with a news staff of about 20 people rather than the 165 it had, and a site with mostly commentary, advice and links to other news sites, along with some original reporting. Other newspapers have closed and many more are threatened. But the transition to an all-digital product for The P-I, announced Monday, will be especially closely watched in an industry that is fast losing revenue and is casting around for a new economic model.

And the way that The P-I is changing might hint at a path for future newspaper closings. To some extent, in shifting its business model, it will enter a new realm of competition. It will compete not just with the print-and-ink Times, but also with an established local news Web site, Crosscut.com, a much smaller nonprofit organization that focuses on the Northwest. The move shows how some newspapers, in the future, may not vanish but move the battle from print to the digital arena.

‘ Had Hearst not made this decision, the survival of The Times was unlikely,’’ said Jill Mackie, vice president for public affairs at The Times.

The P-I lost $14 million in 2008. Hearst announced in January that if it could not find a buyer, it would cease printing. Few people expected a buyer to emerge. Hearst hopes to capitalize on the healthy Web traffic The P-I already has — about 1.8 million unique visitors a month, according to Nielsen Online. It usually outranks the online readership of The Times, despite a smaller print circulation: 118,000 on weekdays last year, compared with 199,000 for The Times.

‘‘We clearly believe we are in a period of innovation and experimentation, and that’s what this new SeattlePI.com represents, said Steven R. Swartz, president of Hearst’s newspaper division. We think we’ll learn a lot, and we think the Seattle market, being so digitally focused, is a great place to try this.’’

David Brewster, the publisher of Crosscut, praised Hearst for creating new journalism, rather than completely shutting down The P-I. There’s definitely room, he said. Seattle will be quite a vital place.’’

Blog entries written by Prof. Shlomo Maital

Shlomo Maital
April 2009
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