Will established newspaper owners be as honest as Buffett?

Warren Buffet said he expects the group of smaller daily and weekly papers he bought recently to have a 10 percent profit margin.

Sounds fair enough, doesn't it? After all, before the rise of the Net, smaller papers had smaller margins than the big dailies, but many still ran at 20 percent.

Of course, 10 percent may not sound like enough for owners of other smaller newspapers. Like a CNHI, still under a mound of debt but not declaring Chapter 11.

That said, that's only half of his honesty.

Buffett added that he expects those profit margins to continue to decline. (And, let's not forget, he's indicated paywalls are coming to most of these newspapers.)

And, one larger Australian chain expect to trump Advance and be out of print papers entirely within 10 years. If not sooner.

“Print revenues have been going down and are going down faster now,” Greg Hywood recently told the annual World Congress of the International News Media Association in New York. To the extent print newspapers have a future, he said, they will be “expensive, bespoke and narrowly distributed.”

That said, Hywood says papers need to cut, cut, cut further on "legacy" costs before making this move. And, since his Fairfax Media owns Australia's flagship paper, the Sydney Morning Herald, Hywood probably has some background whence he speaks.

So, are established newspaper owners willing to practice some degree of "acceptance"?

Meanwhile, while going digital first means cutting legacy costs, Internet readers' continually-growing expectations means expanding digital costs on a regular basis, if larger daily papers are serious about this.

Light at end of tunnel for papers, and more new ideas for smart paywalls

Earlier this week, I blogged about how Matthew Ingram at GigaOm appears to have a Jeff Jarvis/Clay Shirky/Jay Rosen paywall-hating burr up his ass.

Well, per Ken Doctor at Nieman Labs, that’s a good description, because Ingram, a blind follower of the Three Musketeers of Gnu Journalism (deliberately ripped off, with same snarky intent, from Gnu Atheism) details several specific ways in which he and they are wrong.

First, especially at non-daily papers, the light is not only apparently at the end of the tunnel, but profits may actually pick up next year. As a result of that, newspaper stock prices (albeit from in-the-toilet lows) are soaring.

And, yes, even some non-dailies have paywalls. The light for dailies, definitely for smaller ones, and possibly for mid-sized ones, is at least probably getting near to a flattening out point.

Second, and directly related, Doctor details the economics of paywalls. There’s a variety of ways to skin the paywall cat. Most new adopters are going with fewer freebie reads than, say, the New York Times, and also a lot less leakiness. That includes not just small companies but as big a boy as Gannett. Doctor says opt-out provisions, in which hardcopy subscribers are automatically charged at least a nominal fee for digital access, are also growing. (I hate opt-out provisions in general, including this one, but … the idea is, nonetheless, growing.)

Third, the truth is what the Three Musketeers and hangers-on won’t tell you: paywalls are growing internationally, too.

But, even there, Doctor starts with the US side of the equation:

By the end of this year, figure that about 20 percent of the U.S.’s 1,400-plus dailies will be charging for digital access. Gannett’s February announcement that it’s going paywall at all its 80 newspapers galvanized attention; when the third largest U.S. newspaper site, the Los Angeles Times, went paid (in March), more nodding was seen in publishers’ suites.

But, that’s his takeoff point to note that (as of March) more than a dozen European dailies also had paywalls.

That, then, leads to the more significant issue. Doctor notes most paywalls are neither flaming successes nor flaming failures. So, why?

So if charging for digital access — a too long phrase, but one that’s most accurate than paywall — is neither a panacea nor a tombstone on the way to the inevitable, what is it? It’s a building block, and it’s a way to re-envision the business.

And, that’s a good point. 

Isn’t that type of creative thinking and re-envisioning what the Three Musketeers laud?

Short answer? Yes, as long as it’s done for free online.

That’s because they deliberately practice a selective quoting of only one of two sentences from Stewart Brand’s famous “Information wants to be free” comment:

On the one hand information wants to be expensive, because it's so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other.

Note carefully that first sentence.

Then, also per Wiki, and partially reflected on its original link, there’s the question about whether Brand meant free in terms of cost, or free in terms of access.

That, then, gets back to many critics of the Three Musketeers noting that two (Jarvis and Rosen) are paid academics, and at public, taxpayer-funded universities, no less, and therefore can easily afford to tell newspapers to let people be online leeches. Until 2010, Shirky was at the public Hunter University, so ditto on him. Let’s also not forget Shirky’s consulting for Libya’s former strongman Moammar Gadhafi, and his naivete about how autocrats could use social media to their own ends when queried about that consulting.

Update, May 3, 2013: I probably spoke too soon. 1Q 2013 numbers for most major papers show that hardcopy advertising continues to slump, and that digital advertising isn't (yet? ever?) offsetting it. Paywalls are adding some money, but they may be not much more than digital dimes, until (ever?) AP (and Reuters, and AFP) up their rates to Google et al, enough to force wire service news to be paywalled, too. And, Saint Warren of Omaha expects newspaper revenues to continue to decline, even though he became a buyer last year.

When a sales proposal is laughably wrong

OK, I'm in publisher, not editor, mode, right now, at my small town paper.

Somebody from corporate drafted (for my predecessor, actually) details for a sales proposal presentation to one of the two new car dealers here in town.

It said that, if you the dealer bought X amount of advertising, you'd need just one new car sale to more than pay for the ad campaign.

What was wrong?

It assumed that the dealer gets 100 percent of the car sales price.

And the dealer ain't looking at it that way, of course.

He's looking at his net. Smaller community, fewer luxury vehicles sold, with the partial exception of a "loaded" SUV or truck, and we'll say his average margin is 6 percent.

That means he's got to sell 15-16 vehicles or so to pay for that ad campaign -- 15 or 16 that he's reasonably sure he wouldn't have sold without it. (This doesn't count any increased volume in used cars, service contracts, etc., so I may be skewing things a bit heavy his way.)

That said, you get the general picture.

And, this is coming from somebody from higher up my food chain.

Sorry, even if coupons aren't great, and people don't always bring them in, I can see how, on a higher-dollar product, especially, a business is looking for some way to track metrics. And, if I use one of those lines as a sales line, that people sometimes forget coupons, or don't always remember where they saw a special, and use it too openly, then I'm actually discounting our newspaper's potential ad reach even more.

Being a publisher at an independently incorporated newspaper

But one that is still corporately owned?

I think it's like having one testicle.

My guess is that individually incorporating newspapers, or small groups, is for tax reasons and little else.

I think it means little to nothing as far as any degree of additional independence from HQ, while possibly meaning that the buck stops even more with you the publisher at times.

Well, that's life.

I'm not a 1 percenter.

If things change, they change.

I had had forgotten why I left this newspaper company before

Any company, not just a newspaper company, that only offers one week paid after one year, and never offers more than two weeks paid, should not be surprised if it does not necessarily generate long-term staff loyalty.

Of course, I am glad to have landed on my feet from my previous newspaper company which, less than five months after replacing me (and having been "pushing" me before that) is now looking for the replacement for my replacement.

Folks, in any industry, high turnover isn't good.

I am also grateful for what I'll be learning on the publisher side of stick. I hope it includes skills that, if necessary, will transition outside the newspaper industry.

Oh, and I forgot ... telling a pregnant employee she is eligible for up to 6 weeks unpaid leave. The FMLA says 12 weeks. Now, technically, this employee has been here less than a year and is ineligible for FMLA, but .. if she had been here a year? Would be the same, I'm sure.

Media pay rising? NOT! Huff Post NOT real journalism

One Caroline Fairchild at the Huffington Post, who must be an actual paid staffer if she's got a HuffPost email account, claims media wages have shown their biggest climb since 2006.

Ahh, but she forgot, or didn't analyze, this the nut graf (emphasis mine):

The job category, which comprises public relations jobs [and] media and communication workers as well as entertainers and performers, saw a 4.6 percent increase in wages, outpacing the national average wage increase of 3.5 percent for the year and far surpassing any wage increases in the industry since 2006. 

Let's be real.

If you worked in an actual media job, your pay remained flat. If you worked in PR, it went up.

As a commenter there notes, a lot of the PR/communications hike was possibly election-related, too.

If you worked in an actual media job, your pay stayed flat — unless your job disappeared.

More refutation of Ms. Fairchild?

In Philly, the owners of the Inquirers and Daily News are threatening to shut BOTH and liquidate if they don't get "major concessions."

Public will pay for media content

A new survey says the public will pay for media content — if the need/reason is adequately explained.

"When participants were provided with a compelling justification for the paywall -- that The New York Times was likely to go bankrupt without it -- their support and willingness to pay increased," Cook and Attari concluded.

Again, take that Jay Rosen Jeff Jarvis Clay Shirky and other new media fluffers who tout "no paywalls" for selfish reasons:.

That said, the survey authors note that many people will believe the “information wants to be  free” quote out of context and misinterpreted means they should get newspaper stories for free:

Those publishers should also consider this cautionary note: a majority of The New York Times readers surveyed by Cook and Attari said they wouldn't pay for content and made good on their threat, often by switching to free providers. "The decline reported in our study is echoed in the decrease of over 3.3 million unique website visitors reported in The New York Times marketing materials between the spring of 2011 and 2012," Cook and Attari wrote.

Of course, with more and more papers adopting paywalls, that option is shrinking. The key will be AP (and Reuters and AFP) continuing to up their rates they charge news aggregators.

A newspaper where pets matter more than people?

Via a newspaper exchange, I get copies of my former newspaper, the Marble Falls Highlander, at my new location.

Well, I knew it offered to run pet obits, but we didn’t get any while I was there.

What I didn’t know until now was that, although obits for people are free for the first 500 words, the pet obit has a minimum charge of $10.

Never heard of such a thing before, with a newspaper valuing pets above people. That said, readers can probably insert jokes about this if they want, and there’s nothing I can do to stop you.

Digital newspaper circulars — good news or bad?

Short-term good, long-term bad? Or, the other way around? A growing consortium of newspapers is backing Wanderful Media, a company that creates digital versions of newspaper circular inserts. It is a way of looking to the future, to have a digital version of the grocery store and hardware store flyers online, yes. OTOH, in at least a certain percentage of digital readers, are they already going to Target.com or whatever anyway? And, as newspapers' complains over Valassis' deal with the USPS show, print circulars are still an important part of newspaper revenues, so ... if this leads retailers to abandon print circulars sooner rather than later, it could be a big issue.

I doubt this will come to non-daily papers any time soon, so no hurt there. And, bigger seven-days will still attract plenty of print-version circulars. Smaller dailies, though? At some point, retailers participating with Wanderful may make a take-it-or-leave-it digital-only offer to some of these papers, perhaps playing them against Valassis/Red Plum on mail-out versions of print circulars.

Especially if smartphone/tablet apps are next, this is another gift horse that may not pony up well for the longer term.

And, of course, there are other issues involved. One I can think of is, will these digital circulars get past ad-block extensions or not?

Editing pettiness is ...

An editor of a group of newspapers who takes a byline off an individual editor's story because he thinks he has too many bylined stories on the front page.

Just another way in which black is not even white, but tangerine or something, here in MF-ville.