By Mark Fitzgerald and Jennifer Saba
Editor & Publisher
Published: August 22, 2008 11:50 AM ET

NEW YORK Something's happening here, in the newspaper industry, and as the old Baby Boomer anthem goes, what it is ain't exactly clear. Faced with an unprecedented crisis that combines cyclical turbulence with metastasizing digital technology that steals away revenue and readers at an alarming and seemingly accelerating rate (while offering newspapers only stingy payoffs), publishers and editors everywhere have thrown away their rule books — and, to find their way in this new and alien environment, are ready to implement previously unthinkable changes.

Or are they?

Ask any two industry observers and you'll get at least three views on whether the drastic measures under way at newspapers — the deep staff and page cuts, copyediting and ad design outsourced abroad, massive shifting of resources to the Web, getting out of the printing business — are harbingers of truly fundamental change.

"I think everything is on the table," says Earl Wilkinson, executive director of the International Newsmedia Marketing Association (INMA). One indication of his claim: INMA used to stand for International Newspaper Marketing Association. Another: In New York, two archrivals — the Daily News and New York Post — are reportedly discussing combining some key business functions.

There's one good reason for the industry's new openness to change — fear, says Drew Davis, president and executive director of the American Press Institute (API): "I have never seen so many senior newspaper executives so depressed and frightened for their future."

Just look at all the depressing news rolling out this summer. Gannett froze employee pensions and reorganized its newspaper division. The Plain Dealer in Cleveland, normally protected under the cloak of Newhouse, was ordered to cut 32 pages a week from the daily. The Record in Hackensack, N.J., put its entire headquarters up for sale, spinning the move as a way to get into "mobile journalism." Parent company North Jersey Media Group expects to save as much as $2.4 million per year by dumping the building. Executives with The New York Times Co. floated the idea of a 10% wage reduction for union employees at The Boston Globe.

Lee Enterprises CEO Mary Junck told the Cribb Greene Report, "There was a time when no one published on holidays. Maybe we should go back to that concept. We're considering the idea now." Eliminating some sections on certain days of the week — or even dropping entire Monday or Tuesday editions — are other ideas she might consider.

And while the newsroom cuts have naturally grabbed national headlines about newspapers' woes, every part of the business is operating in crisis mode, with more "urgency" than ever, says Jeff Hood, CFO of Seattle-based Pioneer Newspapers.

Privately held Pioneer is not under the same kind of pressure from Wall Street as bigger chains, but it's a good example of a company that's adopting and considering practices that would have been unthinkable as recently as five years ago. For instance, one of its papers prints a nearby daily owned by The McClatchy Co. Pioneer is looking to outsource not simply ad design or copyediting but perhaps its accounting as well, to India or the Philippines. "Whether it's in finance or editorial or production, we know we have to change," says Hood.

Steven S. Duke, an associate professor at the Medill School of Journalism who works with newspapers as managing director for training at the Readership Institute, isn't so sure the industry has gotten the message, even now. "I haven't seen anything I would call radical, despite all the talk," he asserts. At Institute training sessions, he has noticed a change in demands that tells him newspapers are still not ready for fundamental change: "They used to say, 'Tell me who's doing this, and if it's working to increase readership.' Now what they say is, 'Tell me who's doing this — and making money at it.' Everyone wants promises that risks they take will bring in dollars — and, of course, nobody can do that."

YACKETY-YACK?
Everyone can at least agree there is plenty of talk. Much of the discussion has been sparked by Sam Zell — the real estate mogul who came to the newspaper industry less than a year ago when he engineered the deal to take Tribune Co. private — and his Chief Innovation Officer Lee Abrams, who's best known for inventing the "album-oriented rock" format on FM radio back in the 1970s.

As cash flow fell by unexpectedly large numbers, squeezing heavily debt-laden Tribune even further, Zell and CFO Randy Michaels ordered the chain's dailies to shift the editorial/advertising mix, traditionally 60% to 40% in favor of editorial, to an even 50-50 split — and redesign its papers to contain fewer pages. And, by the way, use fewer journalists in the process.

The flagship Chicago Tribune was given 90 days to transform itself into that kind of paper. Editor Ann Marie Lipinski — who had been with the paper since 1978 — resigned in mid-July, not long after the announcement. The same day, David Hiller, publisher of the Los Angeles Times, exited. The Chicago Tribune's publisher, Scott Smith, had moved on a little earlier.

The deadlines at smaller Tribune papers are even tighter. A brief firestorm broke out over Tribune's hint that it might start measuring reporters' value literally by the published inch.

At the same time, Abrams has encouraged employees to think way outside the box in rambling memos that have compared newspapering, favorably or unfavorably, to poetry, a 1966 Bordeaux, National Public Radio, and GPS devices. "Tweaking will kill you. Aggressively and noticeably changing the look and feel can and most likely will grow you," he wrote in one memo.

That kind of talk is catching, says Tim McGuire, who first noticed the different tone in the industry at this year's American Society of Newspaper Editors convention. The despondency of editors in recent years was replaced by a willingness to entertain just about any option. "I think you're on the brink of seeing things that are going to push the boundaries pretty dramatically," he says. "You're not seeing it just yet, but the conversations have taken a turn decidedly in the direction of radical change."

McGuire is an expert on change with a capital "C," having implemented radical shifts in beats and newsroom management in the early 1990s as editor and senior vice president of the Star Tribune in Minneapolis. "Let me tell you, by the standards of what's required today, I was a piker," says McGuire, now the Frank Russell Chair for the business of journalism at Arizona State University's Walter Cronkite School of Journalism and Mass Communications. "I knew the business had to change, and what I wanted to do was develop a culture of change. But I sure don't want to glorify what I did, because I was as much a part of the problem as anyone was."

McGuire's advice for newspapers now is to radically rethink what the newspaper looks like day to day. Monday's paper might be just 16 pages, covering more sports than news. Tuesday, another loser for most dailies, might even drop sports. The Sunday paper would be almost unchanged, the product for mass distribution not only of ad inserts but as a "convener" of the whole community to have a conversation. And to get everybody in the door, he suggests dramatically lowering the price of that fat Sunday paper.

MONDAY, MONDAY
Some newspapers are already going the route of shrinkage. The San Jose Mercury News, for instance, is in the process of downsizing its Monday and Tuesday editions. "We are looking at trying to tighten up stories and see how we can convey more information in less space," says Editor/Vice President David J. Butler.

The Salt Lake Tribune, another MediaNews Group Inc. paper, is also greeting the beginning of the workweek with smaller papers, something Editor Nancy Conway says is a positive step: "The key is not to have fewer stories; the vision is to make them smaller."

The time could be ripe for fulfilling a longtime fantasy of some publishers — eliminating dog days like Monday, Tuesday, and Saturday. It's fueled by the obvious fact that in the U.S., at least, newspapers generally lose money during the week and coin it on Fridays and Sundays, says INMA's Wilkinson: "I know of newspapers that for 20 years have had blueprints for killing days of the week."

In recent weeks, two small GateHouse Media Inc.-owned dailies in Illinois actually implemented those plans. Tony Scott, publisher of the Daily Review Atlas in Monmouth, Ill., told readers that the paper had been thinking about eliminating Mondays for at least two years, and were finally pushed to do it by newsprint costs that soared 45% year-over-year and rising gas prices. Its sibling Kewanee (Ill.) Star Courier also dropped Mondays.

In Wisconsin, the Forum Communications-owned Daily Telegram in Superior went even further, announcing in July that come September, it was dropping four of its six publishing days while shifting daily reporting to its Web site. In making the decision to switch to a twice-weekly, paid-circ model, Publisher Ken Browall says all options were open for the 5,500-circ evening daily — from turning tabloid to going to free distribution.

INMA's Wilkinson is skeptical that larger-circulation newspapers will actually pull the trigger on the idea of eliminating Mondays. But Alan Jacobson, president and CEO of Brass Tacks Design, thinks it could become as widespread an industry practice as narrowing web widths.

"Staffing a newsroom seven days a week has been tough," he says. Newspapers, Jacobson figures, will drop a day following the same logic many papers are using in lopping off feature sections for low-circ days. "Reporters spend a lot of time on those feature stories," he says. "You eliminate that section, and you just bought yourself three days of reporting time — if you still have that reporter."

THE EFFECTS OF SHRINKAGE
Consider Jacobson's marching orders for the redesign of a Florida paper he'd rather not name: "The big thing behind the redesign is cutting back drastically" on pages and people. What it wants is a product that can be produced by far fewer people.

While some newspapers are attempting to sell these kind of content cuts as some kind of service to readers, Ventura County (Calif.) Star Editor Joe R. Howry in a note to readers early this summer refused to sugarcoat its changes, which he bluntly said were simply about cutting costs in bad economic times: "We're not trying to fool anybody with phony catchphrases like 'new and improved' or 'to better serve you.' Beginning Monday, we're eliminating some things from the paper; it's as simple as that."

More papers have stopped claiming that after the cuts the paper will be better, says Butch Ward, a former managing editor of The Philadelphia Inquirer who is now a distinguished fellow at The Poynter Institute: "I think it's some reflection of the fact that we're now cutting bone."

This focus on cost-cutting raises another question that the industry must answer quickly: Is it possible to change fundamentally when you're barely holding the paper together day to day? Newspapers that once talked about changes to better serve readers and advertisers are now looking out for number one, says Ward: "I think 'appetite for change' would be more aptly described as an 'appetite for survival.'"

API's Drew Davis recalls a conversation with a board member about the institute's Newspaper Next program for brainstorming revenue-producing initiatives. "He said, 'We are like drowning people, who are treading water as fast as we can. And you people are throwing life preservers' — he meant it in the form of Newspaper Next — 'and we can't even get our hands out of the water to reach them.'"

In its first year, Newspaper Next programs reached some 6,000 people, but since API rolled out its 2.0 version last February, the response has not been anywhere near that, says Davis. The biggest newspaper companies, he adds, are most conspicuous in their absence.

MARKED DOWN
Even worse than the shrinking of newspaper training budgets are the cuts in marketing and research, says INMA's Wilkinson. He's long advocated shifting attention to business side from the squeaky wheels in the newsroom.

"We have a misallocation of resources across the industry," he says. "We are dramatically bloated in newsrooms relative to the business. We are dramatically under-funded in advertising sales, research, and marketing. Now the money is gone — and it is harder to get the money back."

More newspapers, Wilkinson says, should be like The Bakersfield Californian, which in good times and bad sets aside at least 1% of revenue for an "innovation budget." Right now, with central California Ground Zero in the national housing crunch, things are very bad indeed for the Californian — but the family-owned publishing company continues to fund experiments in niche print and online publishing. "We're committed to this innovation fund because we think we need a bunch of lines in the water to catch the fish," says President/CEO Richard Beene.

The Californian made industry headlines in 2006, when — like the Orlando Sentinel in recent weeks — it launched a redesign that was a shocking departure from its previous look. After a big spike in single-copy sales, circulation settled back. But the redesign had and continues to have a purpose, Beene says: target Baby Boomers, newcomers, and families.

"We made the decision that we were going to fish where the fish were," he says, "and that's a readership that is older, more affluent, and better educated." Others in the marketplace it targets with products ranging from a Spanish-language weekly and the social media site Bakotopia to its new "Raising Bakersfield" site for moms.

That, says Tim McGuire, is perhaps the most radical change newspaper could introduce on the print side: Stop chasing non-readers. Give up trying to attract younger readers to the core daily paper, he argues. Give them great Web sites, and design the print paper for those who will grow old reading it over the next 25 years or more.

One other thing newspapers might try doing, suggests Urban & Associates consultant Christine Urban, is not continually insult its print readers and advertisers. "It scares me, for instance, to see our newspaper subscribers constantly being told the industry is dying and what they are doing is silly and retrograde — instead of thanking them and restating our value proposition. This seems like real simple stuff."

Newspaper consultant Robb Montgomery isn't ready to completely give up on print for younger people. "The people who complain about shorter stories are journalists, and I wouldn't even say reporters, I'd say writers," says Montgomery, CEO and founder of Chicago-based Visual Editors. "Newspapers are full of writers, when they should be full of reporters."

Getting to a smaller yet still engaging print newspaper will take a culture change that Montgomery and others are not entirely sure U.S. papers can pull off anymore. INMA's Wilkinson jokes mordantly that newspaper culture can't be transformed: "It's being changed now only by being eliminated."

Things are clearly changing when the publisher of The Star-Ledger in Newark feels compelled to tell employees that the New Jersey paper's unique job-security "Pledge," which has protected non-union employees from layoffs for more than a quarter of century, will continue to do that "so long as the newspaper continues to publish daily in its current newsprint form." The Pledge, Publisher George E. Arwady told employees in a recent memo, "never was intended to apply to weekly publications or to distribution of content over the Internet."

WHEN THE HAMMER FALLS
And yet some change that's considered radical by newspapers would be fairly ho-hum in other industries, or countries.

Take advertising. Only now are U.S. newspapers beginning to move to modular advertising, which sells high-impact ads in logical portions of a page, rather than by the column inch. "For years, we've been telling papers that modular is just one component of a larger program, but at least the fact they're looking at it means they're willing to change," says Chris Kubas, vice president of Kubas Consulting.

But this year's devastation of the pillars of classified advertising — real estate, automotive, and help wanted — has some papers undertaking dramatic changes. The most notable came at the flagship of Sam Zell's Tribune Co.: In January, the Chicago Tribune eliminated help-wanted classifieds from the pages of its weekday papers, except for a couple of pages that run on Tuesdays and purposely mimic the look of listing sites such as Craigslist. Recruiters and job seekers are directed to its careerbuilder Web site rather than print — a strategy it is toting as a success in a series of house ads.

But newspapers continue to rely on needlessly complicated rate cards, complains Tony Marsella, the former corporate director of classified advertising for Morris Communications and now president and COO of Ranger Data Technologies, a developer of software for classified departments and call centers.

If newspapers ran hardware stores, Marsella jokes, a salesperson asked the price of a hammer would turn around and ask the customer what he was going to use it for. Shelves in the kitchen? $14.95. Nail down loose fencing? $17.95. "I was at a paper that had a rate card for just real estate that was 12 pages," he says.

In advertising, Marsella argues, news- papers are not reacting to the unprecedented economic pressure with unprecedented ideas. "Newspapers are forever tweakers and tinkerers, but we're not big changers," he sighs.

That will have to change, says former Star Tribune Editor McGuire: "What we're lacking right now is really philosophical thinking. If this is a seminal crisis, then we have to do some seminal thinking. And it really does have to be radical."

— Joe Strupp contributed to this report.