Jackson Jambalaya

The Columbia Journalism Review published a thorough analysis of the changes made to the New Orleans Times-Picayune. The article reports on the changing emphasis from a model based on journalism to one based on clicks. However, the article points out revenue plunged 40% over the last few years thus begging the question: how can a newspaper stay in business if it can't make money? The CJR reports:

"The secret meetings in May led to a bloodletting in June. Advance Publications laid off nearly half the paper’s newsroom, halted daily publication of the Picayune, and implemented a business and news model that shifts the focus of the operation to its free news website, NOLA.com....

American newspapers have lost more than half their advertising dollars in the last five years, an existential threat to an industry that in 2007 depended on ads for three-fourths of its revenue. The Times-Picayune is no exception to the trend. Its advertising has plunged 42 percent since 2009, according to an analysis of figures its publisher gave The Wall Street Journal in September...

if anything was broken at the Times-Picayune, it wasn’t the newsroom. The paper covered its metro area as well as any in the country, a mix of broad daily coverage and ambitious enterprise reporting that effected change, despite a news staff already down roughly a third from the 270 it employed before Hurricane Katrina. It could be counted on to unearth the foibles and corruption of local politicians, cover the Saints and Uptown social events like a blanket, and capture poignant photographs like one that ran in May of a five-year-old girl, shot in the abdomen at a birthday party, dying in her father’s arms. It produced stellar investigative work, too, like Cindy Chang’s prison series, which exposed the perverse financial incentives behind Louisiana’s bloated penal system. Readers rewarded such coverage: The Times-Picayune had the highest market penetration of any major US daily.

Nonetheless, on May 23, word came that Advance was bringing the Michigan model to New Orleans—ending daily publication of the paper and firing much of the staff....

As in Michigan, the newsroom would be partly repopulated by younger digital natives who could be paid much less—as NOLA Media Group reporters, not Times-Picayune reporters. They would be told to write search-engine-optimized posts for the Web multiple times a day, and not to worry about print deadlines. Editing would be de-emphasized. “Curators” on the newspaper side would pick stories off of NOLA.com and put together a print newspaper on Wednesday, Friday, and Sunday. This in a city that worships its habits and traditions.

Editor Amoss told his staff that the new NOLA.com would be a “website emphasizing sports and entertainment."....

Then shades of GM and IBM appeared:

"But as many loudly pointed out, New Orleans is one of the poorest and least digitally advanced cities in America. More than a third of its residents have no Internet access at home....

There is no sure answer for what to do about this. Still, by now, most major newspapers have begun moving to strategies that play to their strengths: charging core readers online while allowing casual visitors 10 or so free stories a month; increasing the price of the paper, sometimes by charging an upsell fee for bundling digital access with print; shoring up Sunday circulation; and attempting to convert ad departments into marketing-services operations that provide more holistic solutions to local promotion, like website creation, social-media help, app creation, and the like. These and similar strategies are based on the value of the content, and on a hopeful bet that newspapers can keep significant subscription revenue in the coming all-digital future.

Advance is following the industry into marketing services. But mainly it has stuck by what was conventional Web wisdom from before the recession—chasing clicks. In the new NOLA model, editors push reporters to increase “inventory,” more content with fewer journalists. And more of its remaining resources are in sports and entertainment. In this system, a distracted click on a story that says, in its entirety, “Hornets officially announce their nickname will be changing from Hornets to Pelicans,” is worth as much as one on, say, a prison exposé. More, actually, since the former comes with less time and effort....

Considering circulation revenue of roughly $25 million to $30 million, based on CJR estimates, the print paper brought in more than 90 percent of the company’s revenue before the changes, and still likely brings in five of every six dollars in revenue. If NOLA Media Group were a standalone business with no newspaper to support it, its costs would exceed its revenue by many times.

In the near term, Newhouse’s idea to shrink the print product makes perfect business sense. It still gets revenue from three fat papers—Sunday, Wednesday, and Friday—even if readers are alienated by the loss of less profitable Monday, Tuesday, Thursday, and Saturday editions. And by laying off 200 employees—journalists, salespeople, pressmen, and delivery drivers—and sharply reducing what it pays for paper and ink, Advance may have doubled its operating profit in New Orleans. Doctor estimates that the moves gave the Times-Picayune a one-time boost of 11 percentage points in profit margin.

But that’s the near term....

In fact, reporters say they often file without any editor seeing their copy. They’re told to write two-sentence ledes because someone up the chain at NOLA got the idea that Google’s algorithm favors them. (“It’s a secret that only we’re in on,” says a sarcastic reporter.) After Hurricane Isaac in August, one top editor bemoaned the clicks NOLA.com had lost to outlets that called it a hurricane while it was still a tropical storm, arguing that NOLA.com should have matched the inaccuracy rather than lose search-engine points.

In January, imitating an infamous Huffington Post piece, NOLA.com ran a brief post headlined “When is Super Bowl 2013” to draw cheap search-engine clicks. But showing how the organization doesn’t quite get the game, it tweeted the post, too, effectively spamming its followers with SEO detritus meant only for Google spiders....

the newsroom employs a Staff Performance Measurement and Development Specialist and incentive pay might be introduced next year. Lorando has told staffers that accomplishing the goals could mean roughly three to five posts a day....

It’s hard to imagine a lucrative future for NOLA.com once the print edition inevitably slides into the red. But consider this: If they sold the paper right now, the Newhouses probably would get less than $40 million for it, based on the earnings multiples of recent newspaper sales. By radically slashing costs, as they have done—perhaps by as much as $25 million—the company can earn that amount in a couple of years thanks to higher profit margins. Anything beyond that is gravy.

This looks like an orderly liquidation. By cutting costs well ahead of perpetually declining revenues from the “Inkosaurus,” as James O’Byrne calls the print edition, the Newhouses can ride the Times-Picayune down profitably while minimizing the loss of money. Once the paper reaches terminal velocity, they can shut down Advance Central Services, the print wing, tie up any potential liabilities from the paper, and pitch them into the Mississippi.

If NOLA Media Group is able to turn a profit on its own by then, probably with a dramatically lower headcount than its newsroom has even now, so be it. But it will never amount to much as a business. Not to a family worth at least $14 billion..." Rest of the article