Last week's numbers on online advertising revenue made grim reading, though some spinning might have left you thinking that things are going entirely to plan.

Web Newspaper Advertising Up 19 Percent as AP put it sounds like quite good news. The fact that online has increased its share of total revenues at newspapers by 31.5% (up from 5.7% to 7.5% of total revenue) isn't much to brag about. The scale of that rise reflects the decline in other revenues. The number is inconveniently close to what I predicted  the optimistic increase in ad revenue for newspapers would be back in July 2007. Back then though I was using it to show that online revenue in its entirety wouldn't even cover the cost of 50% of current staff by 2015. It's starting from such a low base that it just can't make up for the decline of print intime for any kind of orderly transformation. And here we are. ...<< MORE >>

In order to work in newspapers and believe in them you have to be an optimist. I am definitely an optimist. I can tell you how England will win the World Cup in 2010. And I am just waiting for an early-season excuse to believe that the Tampa Bay Rays might win the World Series this year.

But in examining the ABC's recent proposed changes I was instantly sure it was a bad thing.  The optimist in me has regained  control now though and I think that maybe it could have something to be said for it.

The first thing to be said for it is that at least it will be disruptive. Anything that disrupts newspapers from their current charge over the online cliff and makes them think about print circulation strategies is a good thing. In fact it strikes me that a smart newspaper could well use the change to reinvent the American newspaper and innovate in the sort of way that could bring us closer to what consumers actually want from print.

The biggest asset American newspapers have is their distribution networks. Journalists will try to point to quality content, but the value of that has diminished massively in the face of the online information revolution. There are plenty of other sources of local content now. But I can't think of any other local product capable of being manufactured and distributed to someone's door within an hour every single day. The salvation of newspapers will be found in that network.

Maybe the 1c paper finally opens the door to a more sophisticated use of that network. Could we slim the main section of the paper down to a tabloid summation of the news and deliver it widely to as many people as possible for 1c (or 5c or whatever) a day, only supplying sports sections to people who want them (and adding 10c a day to the bill). And the same for Business. And for a hyperlocal section. And a nice magazine or two at the weekend.

It wouldn't be an entirely personal paper for consumers but it would give advertisers the sort of local penetration they want (via the news section, whose circulation will increase if it's smaller and at a lower cost). It would make consumers who like sports pay for a vastly improved section (improved with the cash saved from printing fewer copies) and give the newspaper an incentive to improve circulation for print sections. I've been banging on about this for some time now and I am no less convinced by its possibilities than I was back in in July and in August too.
 
Technically, each section could now have its own ABC enabling newspapers to sell advertising on penetration in certain sections and engagement at lower circulations in others. It could allow us to expand print offerings where there was a continuing point to them. And close them where our purpose is gone (stock prices are still in far too many papers though I don't see the point any more.)

It would connect us to consumers and give us a reason to really give them what they demand from print and support it with what they demand online.

The problem of course is that we've spent a lot of time contracting away our control of the distribution network. Many of our distributors just won't want to do more than throw papers at a house they know from memory gets the paper. There's a whole lot can go wrong if people are getting different papers. But humanity wouldn't make much progress if we only ever tried to tackle problems with obvious solutions. It's worth at least thinking about. Does anyone think it could be made to work?

I love a good list. Especially one from Ryan Sholin, my favorite online evangelist. His latest output explored the reasons why he reads newspapers now and how that should impact on what newspapers put online and what they should concede is now done better online by others.

A point he made but didn't explore was the ease of searching a newspaper if it happens to be in front of you. If I wanted to know a local movie time I would look in the newspaper first if it was right next to me, but I'd search the Muvico site if it wasn't. So Ryan's right, a newspaper is wasting its time putting movie times on their site for me. But actually so is the printed newspaper. I'm not going to subscribe to the newspaper on the off chance that maybe one day I'll need to know a movie time either. The newspaper used to be competing with the telephone (I could always ring up the cinema). Now it's competing with the web. It's not a fair fight.

Ryan doesn't explore what now does and doesn't work in print. Fair enough - I suspect his primary job is stopping newspapers just loading their newspaper online. But it raises an interesting question. What do I want in a newspaper? How do I read it now? And when?

That was a theme picked up by Gainesville's finest: Mindy McAdams (if Ryan is my favorite evangelist, Mindy is the digital Monsignor) MIndy contributed her own list. That led her to conclude that she doesn't really read the paper much any more because she spends so much time in front of a computer and can graze the news whenever she wants. Which I suspect is not an uncommon experience, as does she.

So what are newspapers good for?

The when of newspaper reading for me personally is straightforward. I read it in the morning with the TV on and a mouthful of Frosties.

The how? I go to the stuff I know I want to read. Mainly sports and anything about Florida's property tax and our idiot politicians. That's kind of it. When I was in the UK I had a list of things from the 2 papers I subscribed to (Daily Telegraph and FT). Sport, Lucy Kellaway, Alex cartoon, political gossip, media business news, more Lucy Kellaway, flick through news section to see if anything grabbed me. And away...

It makes me feel that papers need to have less in them to become better.

The old broad church theory was that we had to put enough material in every newspaper for a large constituency to construct their own paper out of what we give them. But I'm really reading no more than a par or two of most news stories and I think that's a common experience. I'm using the paper to tell me what the agenda is, because it's easier to search a printed page than online. But I'm digging down into what I'm actually interested in online or on TV.

I would still go to a columnist I liked in the morning and wouldn't mind paying 25c just for that. (C'mon Lucy Kellaway, come and work for the Tampa Tribune!). Funny still works in print (it's just that many of the people who do it well are working in TV or online). Big news works well in newspapers still. But it's not an everyday event.

Newspapers are terrified that there isn't enough in the paper that isn't anywhere else. Maybe it doesn't matter as long as what still works in print is worth the cover price. Maybe.

Newspapers don't need to be thick to be useful. I would take my papers at half their current size and twice their current price if they ditched the stuff that doesn't interest me or which I can get easily somewhere else. In fact if my local paper gave me an A4 news magazine each day (think a local daily Newsweek, improved newsprint inside, heavier cover) with a summary of most news, a couple of meaty features, business and a bunch of smart and funny opinions and observations bundled with a full-color sports magazine (same improved newsprint, think Sports Illustrated meets Observer Sports Monthly) that always had a spread about the Bucs, I'd be happy as Larry. It used to be an impossible dream because of deadlines: it isn't any more. It's expensive (probably new presses?), but it's not impossible.

Is it just me? Ask yourself what or who you would need in your paper for it to be worth the cover price? My guess is you'll be surprised how little it is.

Quietly and without much fuss, ABC, the Audit Bureau of Circulations, just killed itself. And it may well take newspapers with it. An agreed proposal at ABC's March meeting means that publishers can now charge as little as 1c for their newspaper and still count them towards paid circulation. And they can opt in weekend subscribers to the daily edition without permission, as long as there is some way to opt out if the householder actually doesn't want it (how thoughtful!). Previously anything less than 25% of a declared full price just didn't count and subscribers had to actually want more newspapers in order to receive them. With newspapers thus able to distribute at an effectively free price (from next April), the value of a paid copy versus a free copy just disappeared. And with it so did the point of the ABC.

Now some change makes sense. The byzantine ABC rules which utilize a full armoury of reference, cross-reference and double-cross-reference to create rules, regulations, exceptions and allowances with a bunch of Roman numerals thrown in just in case you weren't confused already, have become a messy network of laws by which newspaper circulation departments must live and (News)die. And the fussy way ABC forces the classifying of sales looks silly next to the internet's broad brush stroke approach to reporting.

Newspapers have looked on with righteous envy as online circulation measurement services changed their rules at the request of their customers to make themselves look better. When the industry looked small, it was all about page impressions which made it look bigger than it was. When that started to look so big it was attracting skepticism, it was changed to unique monthly users, though what that measured was inconsistent and not entirely trustworthy. Now that video works online, time spent is being factored in. All the while newspapers were tied in knots filling in forms for the ABC and getting crucified for the odd innocent "exaggeration" here and there.

But newspapers probably needed to be protected from themselves by ABC rules. The reliability and dependability of ABC was the rock on which we sold our advertising story. And it has proved a very effective foundation for our business.

The rules are not final yet and are to be reviewed in July before implementation. But our industry has a history of short sighted self destruction. The legacy of numerous city cover price wars is still evident today in most American cities with a single surviving title exerting an unchallenged monopoly over the market, a monopoly which has allowed newspaper titles to ossify and avoid expensive innovation because, well, where else can our readers go? Now that they have plenty of places to go, the money that would have enabled real newsprint innovation is disappearing from our business and we haven't got the imagination or the cash to really make it happen.

Does it matter? Well, it will do when any circulation department in need of  few thousand readers runs an absurd discount program to bump up its numbers. And then they do it the next month too so it doesn't look bad. And so on. The best circulation departments have spent the past few years kicking this sort of addiction to quick meaningless circulation boosts. Now they are going to come under growing pressure from head office to put it all back in place.

So newspapers will drop prices to lower and lower levels, the ABC numbers will become meaningless to all major advertisers, and while we watch circulations rise again, and with them the cost of printing we will rail against advertisers who refuse to pay for access to our newly expanded audience because they don't trust our numbers any more because at 1c a copy they don't know who is and isn't actually reading the paper. Extra readers + extra cost + no new revenue = bankrupt PDQ.

Competition creates better newspapers. But price wars don't. They improve newspaper sales temporarily but in the UK it was the Guardian, who refused to play ball with Rupert Murdoch's Times price war, and who instead invested in imaginative editorial-driven ways to serve advertiser segments,  who came out of the war in best financial and readership shape when Murdoch finally gave up, many millions of wasted pounds later.

The industry most needs to be investing in smart new ways to emphasize the strengths of print. Instead, from next April when the rules come into play, we look set to spend our money printing more copies of the same newspaper and convincing ourselves that we have therefore magically become more popular. No one but us will be fooled.

The news on advertising revenue is very very grim. If you haven't already poured yourself a large one, please do so and have a look at the latest figures on US ad revenue in newspapers. We're looking at 15-20% annual declines in revenue in cars, homes, jobs and classified. Ad revenue for newspapers online up about $100m and slowing in growth. Ad revenue in print down about $1,000m and gathering pace.. Please don't tell me any more how online revenue is going to save the newspaper business ever. If you believe that you are about to kill your newspaper.<< MORE >>

The Sarasota Herald Tribune (SH-T) is a deeply mediocre local newspaper, politically estranged locally, resented by advertisers and editorially very poor indeed. So why do recent newspaper deals suggest it could be worth as much as the Chicago White Sox? That can't be right, can it?<< MORE >>

"It is a lot easier to win in poker," says Chris Zook in the intro to his book Unstoppable, "if you know you already hold a few aces than if you are relying on the dealer for a whole new set of cards." This is potentially a classic bit of business-book bullshit. Sounds great, definitely true, but not necessarily a very good metaphor for anything in particular. But he gets a pass on this one, because it's a great metaphor for the newspaper industry's response to the internet disruption of the past 10 years. We have looked at the smiles on the faces of internet entrepreneurs around our poker table and are being conned into folding a perfectly good hand without even considering the possibility that they are bluffing or that we might have the skills to play this hand to victory.<< MORE >>

I have been spending four hours a day in my car, which really cuts into my alone time with my keyboard.

The good news is that it's given me a new optimism about the future of the newspaper. Now I can see how we get some of our revenue and readers back. We get them to read their newspapers in the car.

Now I don't for a imnute advocate popping the newspaper on your steering wheel and trying to take in a coruscating editorial about North Korea whilst negotiating a tough intersection on the way to work. Though here in Florida it would hardly make people drive more badly.

But while everyone repeats the mantra of platform neutrality it is perhaps odd that no one has yet thought how newspapers might disrupt the radio business. ...<< MORE >>

How do we get around the fact that newspapers have always been cheap in the US and we need urgently to raise the price? In an nicely counter-intuitive way, I think the best way to get people to pay more for newspapers is to make some parts of them free. << MORE >>

I thought I'd have a look at Gannett's numbers to see if they reflected the same percentages of revenues as McClatchy's. It's harder to tell from Gannett's 2006 annual report, because they still put newspaper and online revenue together under the heading of newspaper revenue.

But Gannett chief Craig Dubow did reveal in his preamble to last year's annual report that

"our digital revenues for 2006 surpassed $400 million, substantial growth over 2005".

Now that really does sound like a big number. Until you realize just how big Gannett is. Advertising revenues from newspapers (which includes online) was $5.37 billion. Revenue from circulation was $1.3 billion. So $400 million is 5.99% of revenue (excluding broadcast and other).<< MORE >>