Barney Pell's Weblog

Note: While I'm pretty good at capturing sessions in real-time, so this almost looks like a transcript, I don't claim that I was accurate in the notes -- I did not capture everything, and abbreviated or interpreted as I absorbed the content.

Walt: biz model and readership issue. circulation declines. why are fewer people reading your newspapers?

Don: why are we here at this conference? I got 150 emails from Swisher in the last year insisting I be at this panel. I'm the least digital person who has ever been at this conference.

If we're in trouble shame on us. our readership has doubled in 7 years (more readers online than ever). we need to make business now out of the combo of print and website. it's harder but far from impossible.

Walt: why the drop in your paper readership? you had the highest penetration in your metro area of any paper in the country. some people said they wouldn't even take it for free.

Don: despite which: most of the people in DC woke up this morning and read it in print. 82% of adults in DC will access our content. the readership of printed post is down for a variety of reasons. the growth in our area is now 50 miles from the capital building. people have to get up earlier to drive to work. immigrants aren't always fluent English readers. young people

Tony: I would challenge biz in trouble. there are 2 businesses out there. our largest 8-9 newspapers have the biggest challenges. like the SJMN, but hasn't had an impact on our smaller papers. those markets have revenues up 7%, don't have the circulation issues. so this is a big city phenomenon.

but when you combine the readership of print and online, it's actually up. the internet has impacted our paid circulation. some people who used to buy it were not frequent readers. now they can get employment info online. single copy sales in big cities are the most challenged.

53% of all adults each day read a daily newspaper.

Walt: when I hear a ceo say it's not a problem it's a challenge, that's a way of saying it's really a big problem.

Peter: web has had an impact. they key is do we capture the people migrating from print in our publishing franchises. DJ is a publisher or news and info however people choose to get that. we have a slightly different model, a paid subscription site with 730 thousand paying subscribers. so we're monetizing whatever shift is taking place and protecting our franchise long term.

There's a high degree of essentiality to business content. it's a dynamic site with 800+ wire service reporters, minute by minute.
some of these may not apply generally. but we all have to figure out a good model to deal with an inevitable gradual migration from print to online.

Walt: I wonder if it's just a transition in how people receive news (dead trees vs. screen). I think there are people who aren't reading in either format, or as regularly as they once did. I go to my driveway and more than a few years I say I'm lucky there are 3 newspapers among the best in the country in my driveway. I spent hours a day on the web ... 50 blogs, and other online only publications. But my kids, expensively educated, don't read the newspaper regularly. My youngest son said "I stole a Journal from someone else in the office and saw your column". He and lots of people in 20s and even 30s aren't willing to consume long-form journalism that the best papers have long specialized in it.

Don: it's definitely a problem. this room is full of people with businesses with problems. this one looks like it should be capable of human solution. we love what we do. when Peter Kann and I were on staff of Harvard crimson, at Harvard in the 60s one room out of 5 got any paper at all. So this is not a wholly new phenomenon.

We have got to look hard to what we're publishing. We can make them readable in more ways for more people. But the other side, Knight Ridder's business initiatives on the web. obviously we're making more money on the print readers than the internet readers.

Walt: among the people switching to screens, you can't make as much from them.

Tony: we don't lose money on web advertising, it's actually more profitable than print as you don't have to buy print.
But you have to make it up with volume. I concede we have a problem.

Every generation has come in at a lower level. radio, television, etc. As people grow up, have families, and get involved in community, they tend to become newspaper readers.

Walt: are you sure that pattern still holds? I know people in their 30s with families, education and jobs, would be natural newspaper readers, but don't have time.

Tony: when Don and I were newspaper publishers a long time ago, we used to go door to door and talk to people about taking the paper, trying to get them to subscribe. People would say "I'm sorry I just don't care about the news, see this pile of papers, I just don't read it." Now there's radio, TV, and internet. This has an impact, but just an accumulated impact.

Walt: monetizing the web to make up for money lost?

Peter: if we product content with high proprietary value, we can charge to the direct customer and parlay that into ad revenue. everyone told us some years ago the web has to be a freebie. my view was I don't see why we should give all this proprietary content away for free in one medium while we charge a couple hundred in another medium. it didn't make sense, so we went with a paid sub model. I can imagine a day where online addition revenue may equal the circulation revenue. we will have two revenue sources, print
and online.

what can print publications do? organize, index themselves better, and make the info more easily accessible. what we shouldn't do: dumb down our publications in search of audiences we're not likely to get anyway. (applause). a newspaper can't compete with TV for visual impact. if we try, we're chasing a different kind of medium we can't
effectively compete with. I'd rather assume there is always going to be a sizeable audience of intelligent people who want serious info. present it effectively to them in print and online.

Walt: a certain segment, just starting to grow, in addition to reading
online and print are reading blogs (or some other entry in web publishing). blogs operate in a self-referential way, link to things that are interesting on the web, have conversations about them, etc. by putting wsj content in a paid sub form, people say we've cut ourselves out of the conversation, the network of commentary where people discuss things. if we have a terrific story, it won't get linked to as much on the web as it's a paid wall. how much does this affect relevancy of WSJ and New York Times, which has opinion columnists behind a paid wall?

Peter: one has to start with premise that we're all in business, want to make money on what we publish. judging suggest by how many echoes from the echo chamber doesn't seem the valid model. the business question is can we make $ with our web edition, which we do.
we do put a dozen stories on web edition, so bloggers can comment on them. Walt is in fact available for free (Walt: I'm cheap!).

Walt: I wanted people to feel free to link to my columns, tech in particular is echoed and discussed.

Peter: we actually have blogs; opinionjournal.com is free size, accessible by email. we're not dismissive of bloggers, and that you want some content on the free web. but the most valuable content we have is the news. that's behind a paid wall and seven hundred thousand plus are willing to paid to get it.

Walt: So why did you just spend $410M on Marketwatch, which is in the same business category we're in but they're free?

Peter: Marketwatch is a new brand, no significant print audience, aimed at a much broader audience of individual investment than WSJ. we think WSJ content, brand, and site dynamism is enough that we can charge for it.

Walt: what % of the WSJ subscribers are paid for by corporations?
Peter: the great majority are individual subscribers. we have very few corporate bulk buys. some put it in on expense voucher, but that's not the determining factor.

Walt: (after polling the audience): most of the audience are expensing it.

Walt: how many Washington Post subscriptions are paid for by the government?

Don: the #1 url accessing washingtonpost.com is .gov

Walt: there is a massive infusion of new voices. is that a problem or a good thing for journalism in general? can anybody be a journalist?

Don: No thinking citizen can say the blogging phenomenon is anything but great. It takes us back to the beginning of newspapers, when one person was putting out a paper. Now somewhere out there is Ben Franklin, and one hundred thousand people who think they are Ben Franklin. Sorting them out is a problem, but it generates a forest of traffic who are reading a blog, which makes a reference to our paper, and make it to our site. It's utterly different than what papers do in other ways, not edited, but it's a good thing.

Tony: I think it's a good thing; it opens up new ways to get info, keeps journalists honest. I'm all for it. I think it's good for our business.

Walt: but in world where people are busier than ever, to the extent they find you a thoughtful blogger, or millions of blogs just for friends, family, people who quilt, etc, but whoever is spending 15 minutes on that has 15 minutes less to devote to the newspaper. isn't that a problem for newspapers?

Tony: we're trying to grow our internet biz as fast and successful as we can. we allow bloggers on our site to build more traffic.

Don: in those terms, Walt, anytime someone picks up a book it's
competition...

Walt: but these blogs are additive to that...

Peter: There are better and worse blogs and newspapers. A broad range of publications as I see it. but there are some fundamental differences in what a traditional journalist tries to do and what bloggers are doing. when you open Washington Post or San Jose Mercury News or Wall Street Journal, you ought to have a certain degree of trust in things like: news and opinion are kept largely separate, not blended together. reasonable confidence there are
not hidden commercial agendas influencing the content. yes we run ads and news but the ad does not in fact influence the news in a good
newspaper. there are a certain number of reporters trying to compile facts to get source to truth. there are editors making judgments on quality of what goes into the paper, and what does not go into it. this doesn't mean we don't all do it perfectly and bloggers can't produce quality content, but there are differences and viewing this as a continuum doesn't capture them.

Walt: every public opinion survey show that increasing numbers of people in your target audience doesn’t believe what you just said. they don't believe we don't have an agenda, stories and editorial are separate, or a given individual story in the Detroit Free Press, Washington Post, or Wall Street Journal is any better than what they read on the web.

Don: I feel strongly about this. when Woodward and Bernstein were reporting Watergate stories it was intense. Today, our paper has 4 reporters in Iraq and one in Afghanistan as it happens. in the last month, two of our reporters have come within one vehicle in a convoy of getting killed or seriously wounded. harrowing experiences ... those people are not over there because the mainstream media or anybody is telling them what to write, but because they want to tell the readers the truth. we are a community, and we try to bring in the news as truly as we can, period. [applause]

Walt: where do you stand on first amendment and legal issues that will
inevitably be raised by bloggers. right of reporters to find things out and print them. not just pentagon papers but tons of little things, libel suits, etc. the cases Apple has filed are one example, where they said trade secrets (one of which run by a 19-year-old Harvard sophomore). we're journalists and should feel outraged. I don't see newspapers lining up behind the bloggers.

Tony: we did file briefs for the Apple case, as did most big newspapers in California, for that very reason that we think it's info that shouldn't be suppressed. it gets into a tricky area how far you go. it's the degree of responsibility on the blog. even though we try to be as accurate and unbiased as we can, have great professionalism in what we do. we felt in the Apple case it should be public info, not suppressed. I haven't thought enough about it actually.

Walt: Ana Marie said something in the last panel that resonated with me (but none of her usual curse words). she talked about the gap between what reporters tell other reports is happening in a story, and what goes in a paper. if I go home at night and my wife asks me what's going on, I'll say to her "this guy is lying, this guy is right but he's a coward, etc". you can in 5 minutes say what you think. but you can't write it exactly that way in the paper. you get it in kind of in the margins, because we have a formula for the way we write stories in papers developed over 100 years, where you write claims on both sides for event, even if it's a staged event, then tell the readers what you think it means. but for that you have to
quote some other people saying what you want to says. it can be a puzzle how to tell the reader what you would tell your wife in 5 minutes. should we just tell the readers what we really think, in eth spirit of saving time?

Peter: we should publish what the reporter knows to be true. the fact that you have sexier stuff you don't know for sure to be true is a reason not to publish that. are readers interested in the opinions of journalists? clearly there are hundreds of people here interested in Walt's highly informed opinions about personal technology. but I don't think hundreds of thousands of people are interested in what a reported is covering. the job of reporter is to come up with facts, not opinions.

Walt: telling what you think is really going on, in a way that is quicker and more direct. are we trapped in a kabuki formula for writing stories that has evolved in order to be objective.

Don: there are all kinds of formulas and ways of writing newspapers that we should not be trapped in any of those formulas. I hope people listened word for word to what Peter was saying. Peter is the one great reporter on this panel. In his journalism he did a couple of different things. he told you what happened and he told you how it felt. newspapers can do both of those things.

You don't have to go back to the 1920s where every paper sent its reporters to describe the trial, how the witnesses testified and flinched. In the post today, Dana Milbank is writing a regular A section feature called Washington Sketch where he tries to describe not his opinions about the event but how it felt. I hope he'll write about what went all night during the filibuster. There are lots of ways for newspapers to do this. I agree people don't want all the opinions of all the writers in the Washington Post. But that's not the same as not describing what happen, that's something we can
do.

Q&A
q: Jesse Hornbluth: Great praise for Knight Ridder's coverage of the war. Q for Don:
I'm a fan and have written for Washington Post. Salient fact about
Washington Post on blogosphere is that you held the Downing Street memo for 2 weeks and buried it on A14. Which troubles you more: that is the impression of Washington Post of a large number of thoughtful people, or that you held it for two weeks?

Don: I'm not a scholar of the why's of that story. you can read a good
reprise of the incident in a column on Sunday. How the post is received is not the first thing on our minds, it's did we do our job. We should have gotten to the story earlier. We're trying to bring you as straightforward and honest and truthful an account as we can. We will make mistakes but that will be an error of human accountability. When we can bring a paper devoid of mistakes, we'll charge much more than 35 cents per paper.

q: Esther Dyson: you are news guys, but investors see you as a media
company. if you had a great business strategy you'd get rid of the guys in Iraq and focus on movie and gadget reviews.

Peter: someone said yesterday that if they were still running CBS they'd probably get rid of the news department. that's not my view. we are serious content companies, not entertainment companies. so the challenge for us to to keep investing tin the news resources, not cut back, as it is the content and talented people that are the asset of our companies. invest in content and it is from that that the business model proceeds.

Tony:

Don: we're in the business for the long term, not the next 3 months.

q: Howard Morgan: you haven't talked about local. the blogs are doing the best job of really local news, which you should be covering more offline and in print. how do you integrate the greater amount of info online for local into your products?

Tony: in Philly we try to do a great job on local. we are going to
incorporate 8 or 9 of our columnist blogs. I think blogs are a source of info, way to find out things you might miss from reporting.

Walt: new company starting up backfence.com. Don: local is everything for us and we have to cover local news more authoritatively than anyone else out there.

q (La Tribune writer): in France, national newspapers have the same
problem. The risk is none of them have done like KR buying and publishing free newspapers, because the risk was to dilute the value of the brand and content. Don't you see the same risks?

Peter: we don't publish any free newspapers and aren't about to do so. I think publishers by and large have underpriced their products, newspapers. Nobody in this room thinks twice about spending $2 buying a bad cup of coffee, but most newspapers are wary of getting their single copy price up to $1, doing something you'd pay FedEx much more to do, getting overnight delivery to your doorstep. if you think about the value in our product, we probably ought to be more aggressive about charging the individual customer and putting less burden on our advertisers.

Walt: you raise prices when demand falls?

Peter: there is a core audience for any of our publications. that audience by and large is willing to pay more than we charge (and pay online too). we're not selling to our advertisers a rate base, but an audience, demographics, sense of community, environment of trust in the paper. we're much better off if you have 40K fewer people but those who are with you are even more loyal and paying us more.

q: Richard Warman: if I assume every story in every newspaper is accurate and truthful and well-written, my concern is with issue of separation of fact, good writing, and opinion, when my fundamental concern about opinion with every newspaper, magazine, and TV, is choice of what to report. that choice is the biggest form of opinion we have in our news: what gets in the paper or TV. So news and opinion aren't really separated, as it's a form of opinion when
you decide not to publish.

Tony: Humans have to decide what are important issues. nobody has figured out how to do all this by machine.

Walt: Google is getting there... editors at the San Jose Mercury News have meetings to decide what goes on page 1 and what won't make it in the paper at all. They decide which are the least and more important. That's a statement of judgment, part of what you're selling.

Tony: People like that, they like the judgment of WSJ editors.

Peter: It's also not done in a total vacuum. I go out frequently to
subscribers and non-subscribers and ask them story by story, page by
page, what did you read or not and why. that can inform the editors. if you discover that few people are reading one topic area which we're devoting lots of space to, you can rectify that balance. all newspapers are trying to do that.

Don: In newspaper, the hardest decision each day is what to leave out. In the web the decision is different -- you can include it all.