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News Evolution: Seattle P-I Goes Digital and New Data from Pew

digital-news2-sm.jpgThe occasional journalist Mark Twain famously told a newspaper reporter that the report of his death was an exaggeration.  For the staff at Seattle’s daily Post-Intelligencer, reports of the paper’s death were anything but.  After weeks of rumor, failed efforts to sell the paper, and a last tortuous week of expectation, Hearst finally pulled the band aid off the wound and confirmed today that it’s stopping the presses at its Seattle property.

In place of the P-I, Hearst is set to launch a reworked, digital-only news service.  Hearst representatives explicitly avoided calling the new incarnation a newspaper, however.  The goal, Hearst CEO Frank Bennack, Jr., said in a statement, is to turn into “the leading news and information portal in the region.”

“ isn’t a newspaper online – it’s an effort to craft a new type of digital business with a robust, community news and information website at its core,” explained Hearst president Steven Swartz.

Perhaps a test lab that will later expand to other Hearst properties, will deliver a mix of reader blogs, staff blogs, and some breaking news coverage alongside community databases and photo galleries. 

Under Michelle Nicolosi, about twenty staffers will form the core editorial team.  All will be expected to wear multiple hats handling the writing, editing and media production tasks.    The more than 130 other staffers who filled the P-I.’s ranks will join the swelling mass of job seeking journalists.

To manage local ad sales and oversee broader ad partnerships ( will work with Yahoo for display, and Google, Yahoo, MSN and for search), the website will rely on an internal digital agency that’s currently being staffed.

Tuesday will be the P.I’s last day in print.

The failure of the one hundred and forty six year old paper had been expected for weeks.  Despite a weekday readership of more than 117,000, the paper lost $14m last year and was continuing to bleed money.  Hearst set a sixty day deadline to determine the fate of the paper in January.  If a buyer wasn’t found, Hearst said it would shut it down or refocus solely on digital delivery.  

The fateful deadline came and went last Monday.  Reports almost immediately said provisional offers were floated to keep some staff around and that a digital deployment would be announced shortly but details were absent until today’s coup de grâce.

To an extent, the papers passing is a tired tale – one reported and repeated, in some form, many times over this past year (and likely to be repeated again).  Like other papers, particularly metro area dailies, the P-I was caught between our society’s digital evolution and a perfect storm of market conditions (the global economy, dropping ad rates and rising newsprint costs) that accelerated the deterioration of its already declining revenue stream.

The same net that caught the P.I., was complicit in causing the New York Times to trim its dividend and take outside investment, the Tribune Co. filing for bankruptcy,  and McClatchy cutting 1,600 jobs.

As Arthur Sulzberger, Jr., the Chairman of the New York Times put it in a recent speech on news literacy delivered at Stony Brook University (transcript here):

Journalism – whether published in newspapers or magazines, broadcast on television or on the radio; or consumed online or on a mobile device – is under enormous stress, both from the permanent shifts set off by the Internet and from the cyclical forces unleashed by this current severe economic downturn.

But something even more fundamental is going on …. Journalism is being transfigured by the new information ecosystem and its very definition is changing…

In some ways, journalism is expanding and offering us great opportunity. In other ways, it is contracting; resulting in a wave of self-doubt among practitioners of our craft and confusion among our consumers.

The industry is facing a crisis that is both morphological and circumstantial.   Morphologically, structurally, regardless of delivery mechanism, traditional media needs to find a way to balance the costs of professional reporting against the changing revenue models in the digital age. 

Circumstantially, it needs to find  a way to better insulate itself from the threats macroeconomic environments pose to its revenue streams.

We’re fast becoming an information driven society and culture.  Data has, and always will have, value.  The challenge facing media is figuring how to unlock that value both in a world where the volumes of information exceed our capacity to devour it, and where so much information has become freely accessible, that fee-based offerings are harder to deliver and sustain.  Simply stated – news sources need to figure out how to keep from becoming commoditized.

Last week, 24/7 Wall Street assembled a top ten list of papers facing situations similarly dire to those that enveloped the P-I.  In reality, the list could have just as easily been a top twenty five.   

There are a mess of data points and statistics that give color to the situation.  Here are some of the facts from Pew’s expansive, newly released State of the News Media 2009 report (released today), and two additional recent reports.  By the numbers:

• Newspaper ad revenues fell 23% over the last two years.

•Pew estimates 1 in 5 journalists working for newspapers in 2001 are now gone.  The American Society of Newspaper Editors census says 2,400 full time professional newsroom jobs were lost at American dailies in 2007.  Pew estimates the number could be 5,000 for 2008 and that by the end of 2009, newsroom staff numbers may be 20 to 25% smaller than they were in 2001.

•  Newspaper ad revenue dropped 13% in Q1 of 2008, and 18% on the year.    Two years ago, ad revenue was $49.5b, in 2008 it was down 23% to $38b.

•Publicly traded newspaper stocks lost 42% of their value from 2005 to the end of 2007.  In 2008, they lost 83% of their remaining value.

news usage trends pew• In a separate news consumption survey, Pew found the percentage of Gen Y readers viewing print only newspapers the prior day declined by 35 percent from 2006 to 2008.  Only 27% of the demographic read a paper the prior day.   Among Gen X the decline in readership over the two year period was off 40% and in the Baby Boomer category, print-only viewing the prior day was off 22%.  (see table).

• Asked if the loss of a local newspaper would hurt civic life, 43% of respondents in a Pew survey found it would hurt “a lot.”    Asked how much the paper would be missed, only 33% said “a lot.”   25% said they’d miss it a “a little,” 16% said “not much” and 26% said not all.   48% of those between 18 and 39 said they wouldn’t miss a local paper “much” or “at all” if it disappeared.

• Online growth for news sites was top-heavy. The top fifty news websites saw traffic grow 27% in 2008.  All news and information sites grew 7%.   Yahoo, MSNBC.Com, and AOL, as the top four news sites, saw traffic rise 22% (based on comScore data).  The rate of growth was more than double that for 2007 and more than five times that in 2006.

•Web audiences (unduplicated) are estimated to add 8.4% to the average newspaper’s readership.

pew sectors chart• Asked about magazine readership, less than a quarter of American adults read a magazine of some kind in the prior day, down from 1/3rd in 1994.  There were 42 mergers and acquisitions among , the value of these deals fell 97%. 


[The full Pew State of the Media 2009 report, which covers all forms of media is available here]

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