A Better Plan for the Newspaper Industry

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The recession killed a Denver icon last week. After more than a century reporting on local and state government, crime, sports, and the community, The Rocky Mountain News has folded under pressure from E.W. Scripps (NYSE: SSP  ) to cut costs.

The shutdown followed a months-long search for a buyer for the News with no success. Color me saddened, and not surprised. Every major media market is under assault. Take San Francisco. Even as the News was dying, Hearst Co. was threatening to kill one of its signature properties, The San Francisco Chronicle.

Old pressmen never die ...
I'll admit to preferring The San Jose Mercury News when I lived in the Bay Area, but that's hardly the point. The Chronicle is an icon -- the paper where Herb Caen played eyewitness to the emergence of his city's beatnik culture and where another Herb (Greenberg) established a reputation for stock market commentary.

Here in Denver, the Rocky waged a legendary game of one-upmanship with MediaNews Group's The Denver Post. No longer. One combatant has passed on, never to fight again. That's a loss for Denver and for me personally; I'll miss the Rocky's rich Saturday edition.

Other cities face a similar fate. McClatchy (NYSE: MNI  ) is searching for a buyer for The Miami Herald. Former PR pro Brian Tierney proved unable to keep his newspaper company out of hock, threatening the future of both The Philadelphia Inquirer and its competitor, The Philadelphia Daily News. Tribune Co., too, has filed for bankruptcy protection. Capital-raising efforts include selling its interests in the Chicago Cubs baseball team.

Hey! Over here! How about a bailout?
Varying ideas for how to save the newspaper industry have floated to the surface in recent weeks. One calls for a pay-per-story model a la Apple's (Nasdaq: AAPL  ) iTunes. Another says the newspaper industry should turn to digital platforms like Amazon's (Nasdaq: AMZN  ) Kindle e-book reader. Hearst has already announced a plan for just such a device. Others say that it's time to think of newspapers as non-profits, funded via contributions and public allocations, a la National Public Radio and PBS.

Are any of them viable? I asked Alan Mutter, a longtime newspaper editor who today analyzes the industry via his Newsosaur blog. His advice, divided here into three broad themes, is comparatively simple.

Give the customers what they want. Mutter asserted that publishers aren't thinking as drastically or as creatively as they need to. "They [publishers] need to stop printing seven days a week if the market can't support it," he said in an interview last week.

It's a fair point. Why not publish just a Saturday edition and digitally the remainder of the week? Or, frankly, just on Saturday. Give readers what they want and then figure out how to accommodate advertisers within that framework.

Charge only for original content. In a recent blog post, Mutter held high the example of News Corp.'s (NYSE: NWS  ) The Wall Street Journal as a model worth emulating, because it engages in truly original reporting.

"The Journal's generally reliable and insightful reporting -- which is flashed immediately across a variety of interactive and mobile platforms -- provides critical and actionable information to executives, investors and policy makers. To steal an old tag line from Forbes, it is an indispensable capitalist tool," writes Mutter.

Similarly, The New York Times (NYSE: NYT  ) and its namesake newspaper are an indispensable cultural tool. But the Times doesn't charge for digital content. Any of us can read Paul Krugman, David Pogue, the Times book review, and the musings of its other top commentators for free. That's a lost opportunity.

Be the Big G. Mutter concedes that content alone won't pay the bills. But he also rejects begging for change a la NPR as a broad strategy. Newspapers aren't an interactive medium like radio and TV. It's very easy to ignore pleas for cash printed on paper or on a Web page.

Which leads us back to ads. "They [newspapers] have to figure out better advertising forms, rather than blind banner ads," Mutter said. He believes that papers have to borrow from Google (Nasdaq: GOOG  ) and institute cost-per-click or cost-per-action models that prove the value of their original reporting.

I agree. But I'm also unclear how the Post or any of its peers would do this without sacrificing print editions. The Web is where ad effectiveness is best measured.

So are we witnessing the end of the inky fishwraps I lugged about as a carrier nearly 30 years ago? Mutter thinks more broadly than that. He says that successful publishers will emphasize original reporting in many media formats, and offer ads commensurate with that content.

"Newspapers need to start selling content," Mutter concludes. Simple. Obvious. And, quite possibly, the only option left.

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Fool contributor Tim Beyers had stock and options positions in Apple and Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy should be read all over.

Read/Post Comments (2) | Recommend This Article (11)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 08, 2009, at 9:53 PM, RightTiltedGuy wrote:

    Death of the Newspaper? No its death of the media monopoly of the liberal news barons. All the news publishers have their own slant and their own agenda, which stinks up the front pages as much as the editorials. . In this age of hyper patisanship why should right of center persons be concerned about liberal rags like the NYT, SF Chron, The Sacto Bee?? I don't support their papers and I don't support their advertisers if I can help it.

    Liberal Print is dead, thinks to Craigslist and the internet. Wait where are all the great conservative daiy newspapers?? Anyone ever read one?? None here in Northern Californai.

  • Report this Comment On March 09, 2009, at 2:31 PM, motleyanimal wrote:

    The Sacramento Union just folded....again.

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