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Newspapers can choose gloom, doom or a third way

Circuit City is seeking bankruptcy. Several newspaper companies aren't far behind.

The New York Times' David Carr sees a connection between the two: "Circuit City came up with a plan to confront softening sales and competition: fire the most talented, experienced employees."

Sound familiar?

While Carr believes that staff cuts may lead to newspapers' undoing, he might be one hundred percent wrong – eliminating talent may be the smartest thing newspapers can do. Here's why:

If newspapers keep doing what they've been doing, they'd be better off cutting (employees) and running. The trend lines are clear. Newspapers are dying. To fulfill their fiduciary repsonsibilies, publishers should save as much money as possible before they are compelled to turn out the lights.

As distasteful as this is, the logic is undeniable. But Poynter's Rick Edmonds makes an equally compelling argument:

Edmonds reported on the likely shuttering of two Journal Register newspapers in Connecticut, in addition to other JRC papers in Pennsylvania and Michigan.

According to Edmonds, it was the knife that did them in: "Whenever JRC bought a paper, it slashed news staff and cut salaries of those who remained."

Publishers seem to have two choices:
  1. Cut the staff > Reduce quality to the point that circulation plummets > Go out of business.
  2. Keep the staff > Become unprofitable > Go out of of business.
Either way, it's bad business. And first and foremost, newspapers are a business. While it's easy to tell a publisher to hold on to talent, it's not gonna happen in the current economic climate. So journalists like Carr should save their breath.

But there is a third way: Newspapers should leverage their talent pools with an eye on the bottom line. It's no longer enough to merely publish the news on paper and/or electronically. Newspapers need a completely different approach to disseminating information – both news and advertising – with profitability as the number one goal. While profitability has always been important, it has never been the number-one goal of newsrooms. That's got to change.

Unfortunately, newspapers have no intention of making those changes. We need no clearer proof than the disapppointing summit at API that has perplexed pundits.

Newspapers are wasting money on talent by playing by the old rules. They need to follow the new rules I proposed in 2006. Granted, these rules are two years old, but they remain valid because newspapers haven't adopted them yet. (Note the comments of the former editor of The Christian Science Monitor, which will cease daily publication at the end of this year.)

At the top of the list is "Get real about the Internet." And by real, I mean real revenue.

See the specific online revenue strategies I offered at the bottom of this story. Here are the bullet points:
  • Focus on revenue, not content
  • Drop cost-per-thousand (CPM) and adopt cost-per click (CPC)
  • Pursue email marketing
  • Embrace user-generated content (UGC)
  • Aggregate from other sources
  • Redesign to improve usability and effectiveness of advertising
  • Develop a portfolio of niche products.
  • Get mobile. The train is leaving the station and newspaper can't afford to miss another one.
So get to it, and save some jobs. They are worth saving, because our democracy depends on journalism. To quote Thomas Jefferson: "Were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate any moment to prefer the latter."



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