Our Track Record on 2009 Predictions

A lot of organizations issue predictions without looking back to see what they got right and what they, um, didn't. We decided to take a look at the predictions we issued in Jan. 2009, Top 14+ Media Trends for 2009.

We did pretty well with those predictions:

• We were right in saying we need a new term for newspaper once they stop printing on paper. However, our designated term "newssites" has not taken off.
• We were (sadly) correct that a lot of print newspapers and magazines would shift to online-only in 2009. And we were right that some papers would rely more on charts, rankings and shorter articles to mimic online media while magazines would print thinner editions. And, as predicted, last year saw fewer magazine launches than prior years.
• We saw more media layoffs in 2009, including cuts hitting online newsrooms. And we expected stringers and citizen journalists to contribute more content to mainstream media, which is a bit difficult to prove. Meanwhile, the New York Times got in trouble with its own ethics rules in working with some freelance reporters for potential and actual conflicts of interest. This seem to crop up with travel reporters for the Times' Sunday Travel section; that's not surprising because freelance travel writers often accept freebies to be able to afford to travel around the world. Accepting freebies, even for stories not published by the Times, goes against Times policy, and we think that's a bit of a mistake -- the Times isn't willing to offer these freelancers full-time positions yet expects them to live by the same rules as full-time Times staffers who get the benefit of a Times expense account and a Times' salary.
• We were right that hyperlocal media continues to be important. But dozens of local suburban weekly newspapers also closed last year -- so as a strategy, a hyperlocal approach can not save papers from poor business decisions (i.e. debt load) of their parent companies.
• Local TV did indeed hit a bumpy road, especially local affiliates of NBC -- not that we predicted the Leno experiment.
• Twitter did become more prominent, with mainstream references to it.
• Our prediction that people would start suffering from SNF (Social Networking Fatigue) -- did not happen in general last year. However, a few celebrities -- including Miley Cyrus and Ricky Gervais, who otherwise seem unlikely to share a point of view -- indeed seemed to be suffering from SNF, getting attention for quitting Twitter.
• We were right that online reputation management would continue to be important. That will continue in 2010, too, though some companies still don't get it.
• We got right some of the new features in Kindle 2.0, and were right that 2010 will be a bigger year for ebooks. Amazon sold a larger percentage of electronic books during the 2009 Christmas season than in the prior year.
• We're pleased that the New York Times survived 2009. We were right that the Times would not sell the Boston Globe.
• Rupert Murdoch did make more changes to the Wall St. Journal in 2009, but has not "tarted" it up. Yet.
• As for the AP and changes to its model, pricing, etc., that's still too early to call. It did not happen in 2009, but it will come.

Now, if only the economy had been better...

Prediction: The Associated Press will Consider Substantial Changes to its Model in 2009

A number of papers have given the AP notice that they want to cancel their participation in the AP. Most of these are smaller papers – like the Bakersfield Californian, Idaho Falls Post Register, Yakima Herald-Republic and Wenatchee World – seeking to renegotiate down the fees they pay. But some big papers like the Tribune Co. (parent of the LA Times and Chicago Tribune) and the Minneapolis Star-Tribune (no relation) have also given notice.

On the one hand, many papers seem to rely on wire service coverage even more in 2009, thanks to closing bureaus in Washington, DC, and foreign capitals. On the other hand, the renewed focus on local coverage means that one article appearing multiple times no longer makes sense. After all, when searching on a topic on Google News, how many links to the same article do you need?

All this means is that the AP needs to re-evaluate who it serves and how it serves them.

More Bad News for Newspapers, Part II

I wrote today's first post over the weekend, before seeing today reading today's New York Times article by Richard Perez-Pena, "Uncertainty as Tribune Prepares to Retrench."

Here are some additional points that Perez-Pena made:

• Watering down the product can hurt staff morale.
• "'To the extent you diminish your product, I think you diminish your success in print or online. In the long run, it's going to be harmful to newspapers' brand names, which is the strongest thing they've got,'" John Morton, an independent newspaper analyst. "Offering readers less, trying to cut costs and preserve unrealistic profit margins. 'It’s a strategy, basically, of gradually closing down,'" Morton added.
  
• Although not addressed in last week's analyst call, Sam Zell has said that he thinks too many resources have been allocated to international and national news -- information available from other resources on the Internet -- and that local news is what's most important to readers of local newspapers.
• The implications include smaller national and international sections -- and heavier reliance on wire service copy.
• "But a newspaper dominated by wire articles would offer little that was original — and little temptation to a reader who could just as easily go to Google or Yahoo for news."

What's the biggest problem facing newspapers? Cost structure and circulation are issues, but not the real problem. According to Mike Simonton, senior director at Fitch Ratings in Chicago, quoted in the article, "The biggest problem still is the loss of ad sales...I think there’s very little evidence that any of these strategies and changes will change that.”

Again, the point I've made before in this blog, as much I respect journalism, its survival mostly rests on being an effective mechanism to distribute advertising -- not on circulation or journalism awards. (The same is true for broadcast TV, which has been more successful in experimenting with new means to distribute advertising via product placements, even as viewership has declined.)

More Bad News for LA Times, Chicago Tribune -- and Other Major Newspapers

During a recent conference call with financial analysts, billionaire owner Sam Zell said that the Los Angeles Times and Chicago Tribune will cut staff and the size of each paper to get to a 50-50 ratio of editorial copy and advertising.

The Los Angeles Times could lose 82 pages a week, leaving regular daily issues with just 56 news pages. (Sundays issues would have bigger page counts.)

Of course this means cutting reporters. How will Tribune Co. determine which reporters to layoff?

By measuring journalists’ output. According to a New York Times article, "Tribune Co. Plans Sharp Cutbacks at Papers," Randy Michaels, the Tribune Co.'s COO, said, “'When you get into the individuals, you find out that you can eliminate a fair number of people while eliminating not very much content.' He added that he understood that some reporting jobs naturally produce less output than others."

This is a new approach to the industry, but one, that according to the article, "would save on newsroom and newsprint costs, which together typically account for 25 percent to 30 percent of a newspaper’s operating costs."

Additional changes include: redesigning newspapers' formats, like the Orlando Sentinel, to feature “maps, graphics, lists, ranking and stats...(because reader surveys showed that's what readers want, and) we’re in the business of satisfying customers, and we will respond to what they say they want,” Zell wrote in a note to employees.

In other words, the readers' experience with the paper will be totally transformed.

Even though the company says decisions will be based on productivity, the result means that Tribune Co. newspapers will be unable to adequately cover their markets. We've already heard that response from reporters themselves at the Boston Globe, Associated Press, Reuters and other news outlets. That does a disservice to readers and the community.

But at least they'll get the perception of more ads in their shrunken papers -- and we all know how people's main complaint about newspapers has been they just haven't gotten enough ads.

The future of newspapers' business sections in the Internet age

The tightening ad market is claiming more victims. The latest: "The Denver Post—which folded its business section into other sections on every day but Sunday—last month became at least the eighth daily since early 2007 to cut its stand-alone daily business section," according to BtoBOnline.

As it is, many newspapers have been pushing their readers to their websites to check out the stock pages, in part as a cost-savings initiative because the cost of newsprint continues to rise (if only I could invest in the futures market for newsprint). And in part because most active traders, these newspapers feel, already check their stocks online.

But getting rid of standalone business sections means:

• Business news becomes a less important section within the newspaper hierarchy.
• Business sections will get fewer resources and reporters. The level of business coverage will decrease because staffs won't have enough time to cover news they would like to.
  
• Business sections will be smaller sections and more difficult to find.
• There will be less room for local coverage.
  

All this will lead to a more challenging ad environment, and a downward cycle.

This is good news for local business weeklies...which should be able to beef up their pages with content and ads.

Meanwhile, the BtoBOnline article cited "a study by Arizona State University's National Center for Business Journalism found that about 75% of daily newspapers today run, on average, one page or less of business news a day, and only one in eight daily papers runs a stand-alone section."

The implications for B2B PR programs is that we need to shift our focus to the business weeklies and AP, Bloomberg and Reuters, and away from local market daily business sections.