Whap! Whap!

My employer of 24 years, The Columbian, is facing bankruptcy. It is, in so many ways, a microcosm not only of the newspaper industry but of the broader economy as well.

Society has been changing rapidly, making the traditional newspaper model look old and obsolete. Faced with those societal shifts, the paper could have shifted from its traditional manufacturing model to a knowledge-based model. It did not.

Much like the American auto industry ignored shifting needs and focused ever more on the aspect of its business that was dying instead of evolving for the future, the paper chose to gut its new media efforts to refocus on its dying newsprint product (”The Big Dog” as the paper’s editor was still calling it earlier this year).

Despite plummeting circulation and ad sales, the paper chose to invest heavily. Not in its future, but in real estate. After all, the thinking went, you can’t lose on real estate, can you? So up went a gleaming high-rise headquarters, a monument to a bygone era.

Of course as with the case of our Federal government these past eight years, “investing” really meant “borrowing,” mortgaging the future with no coherent plan for how pay off the debt.

To pay off that debt, the company had to slash spending on its infrastructure and on what John McCain might call its “fundamentals”: the people who create the only real value an information company has. Somehow in the eyes of the big shots, those working-class folks were the problem, not the solution. Lavishing more money on the wealthy owners was the surefire way of having prosperity trickle down to the masses.

So spending on the product shriveled, and customers continued to leave in droves. The future was shot, but the present sure was comfy, all holed up in the new palace.

Comfy, at least, until the banks and real estate experts who had helped fuel this madness realized that they, too, were operating on debt with no coherent plan for paying it off. Now, luckily for them, they had their buddies in the Federal government to bail them out. The argument, of course, is that by stabilizing the supply side, the bailout would trickle down to the companies that actually employ people, and from there trickle down to those hapless “fundamentals” who created the mess in the first place.

And maybe all that will happen. In the meantime, dozens of people who devoted years of their lives to The Columbian are out of work. The paper is losing its gleaming new McHighrise. Bankruptcy looms.

The company says it’s adapting to the changing marketplace. It’s investing in technology to better automate production of the print product, with the side benefit of automating the shoveling of its tired old wares onto those new-fangled internet pipes (pipes that will carry the printed product up to Alaska for Ted Stevens and, yabetcha, Sarah Palin, so she can continue to read all the papers).

Life in the District of Columbian is a mess. Fear grips everyone involved. There’s no certainty that the paper can survive this crisis. If it does survive, it has no plan for surviving the next inevitable crisis. All it has to point to is more than 100 years of history. We’ve always survived, the execs say. This crisis will be no different.

I hope they’re right. For that to happen, however, they’ll need to make dramatic changes. A change of leadership would work wonders. That’s not likely to happen, of course, because the failed leaders who created the mess are just certain that they’re the ones to fix it. The paper is a proud independent - and the leaders believe they form a proven team of mavericks - and therefore perfectly suited to bring about the necessary changes.

In light of all that, I would like to be able to tell my friends still clinging to life on the sinking ship that everything will be OK.

I would love to.

I just can’t.

Well, my old home: The Columbian.

The daily paper in Vancouver, WA, is close to filing Chapter 11.

The paper built itself a fancy palace, moving in in January. There’s no kind way to put it. This was a stupid move.

So today the publisher announced that the paper is being forced to move back into its old building. Oh, and unless the company can refinance its current debt, it will file for bankruptcy.

Building the garish palace was a uniquely bad move, but the demise of the company offers lessons for every paper.

About 10 years ago, The Columbian hired a former Gannett editor who quickly stripped the paper of its local character, turning it into a clone of every corporate franchise in the country.

At the same time, the editor and publisher took a hard turn to the right politically.

Also at the same time, the company (which had been a pioneer in digital media) turned newsprint-centric, crippling the website while greatly expanding its print product.

So this newly right-wing, ink-on-paper dynasty did what every right-wing entity does: Go deeply in debt, mortgaging its future for short-term pleasure.

Today, the once-proud institution is a journalistic and business disaster.

I spent 24 years of my life at The Columbian. I felt I was part of a family. Part of something important. So I take no pleasure in saying that the institution I loved so much is now the poster child for the disaster I have been predicting.

I hope The Columbian survives. I hope other papers do, too.

They won’t, however, until they start firing the people at the top who created this mess instead of the hard-working people who are getting the pink slips.

So how is the newspaper industry reacting to its current crisis?

By refusing comment.

Here’s a line from an AP story:

“In fact, the industry group that compiles and releases ad revenue figures, the Newspaper Association of America, this month stopped putting out quarterly press releases with the numbers, though it quietly updated them on its Web site.”

How would the newspaper industry react to such a move by the auto industry, for example? With condemnation. Public’s right to know and all, you know?

Pretty typical hypocrisy from the industry that prides itself on credibility.

Newspaper executives claim that no one saw the current crisis in the industry coming, so taking on enormous amounts of debt to erect buildings, buy presses an gobble up other papers was prudent business back when publishers were doing such things. Back in the good old days. A year or two ago.

Now that this unforeseen crisis has hit, the only solution is to shed journalists as fast as possible. And, of course, to boost CEO pay to retain top talent. The thing is, the CEOs are the problem, and the journalists are the only viable solution.

Let’s be blunt. I told you so, at least those of you who had the misfortune to work with me or attend a seminar with me. For more than 15 years, I’ve been telling anyone who would that this crisis was inevitable. So have many others. Our biggest mistake was thinking the crisis would hit sooner than it did.

The poor, pitiful, blindsided publishers are lying to their staffs, their investors and their creditors. The rise of the internet with its inherent disintermediation has been coming for years. Google, eBay, craigslist and others didn’t just spring up last night.

The writing was on the wall about display advertisers as well. The folks making the buying decisions were geezers who missed the revolution right along with publishers. Those geezers are quickly being replaced by people who have grown up digitally and never had the newspaper habit.

Penetration has been plummeting for years. No, decades. Major advertisers have been consolidating for decades. Research firms have been pimping their seemingly too-good-to-be-true “readership” numbers to placate advertisers for decades, and publishers have been complicit (should we talk about TMC numbers?). The environmental movement has been gaining steam for decades right along with the price of natural resources.

For the past decade, publishers have been fooling investors about the profitability of the print side of the business, stubbornly refusing to acknowledge that the web, not print, was all that was keeping classifieds alive.

Today we’re watching Bear Stearns executives being led away in handcuffs for misleading investors. There just might be some newspaper CEOs and CFOs who are squirming a bit watching this spectacle. At the very least, boards should be firing these guys right and left, not increasing their compensation.

But who suffers? Mostly the journalists who get laid off. But also the readers, who have fewer and fewer reasons to pick up the paper every day.

I don’t think the death of newspapers is inevitable.

Unless, of course, the current generation of executives stays in place.

I was no ordinary child. I loved newspapers.

My family would go on road trips throughout the country when I was little. From Detroit, we would venture out to Texas, Oregon, Florida, California, Manitoba … and at every stop I would buy a copy of every newspaper available.

I collected hundreds of them, and kept them in my bedroom closet, where I would read them on cold winter nights. It was like reading an adventure. Each paper had a unique look and personality. Some were staid and polished. Some were amateurish but endearing. Some were printed on colored newsprint. Some called famous politicians by only their first names in headlines. Some had folksy local columns at the top of the front page.

Regardless, I loved every one of them. I can’t imagine a child doing that today. With very few exceptions, newspapers everywhere across America are bland, lifeless corporate clones of each other.

So I read the hue and cry about the redesign at the Orlando Sentinel and think “Is this really so bad?”

At first glance, I don’t like the design. It looks like it puts form before function and trivializes the news. Not only that, but it’s being pushed by the buffoons running Tribune. There are plenty of reasons to dislike it.

But I think there is one big reason to like it: It’s different. It might actually catch the eye of someone (let’s say a young person) who otherwise ignores newspapers. If it can deliver on its visual promise and offer a unique view of its community, it might even hold someone’s interest.

Oldtimers won’t like it at first. Oldtimers don’t like any change at first. Some oldtimers might even drop their subscriptions, although the core readership rarely does that. Compare the risk of that against what’s costing papers their readers today - lack of change - and it seems like a gamble worth trying.

There’s a big risk here for the industry. If the redesign fails to attract new readers, and this particular one just might, papers will become even more hesitant to change, if that’s possible.

Of course, there’s another much bigger problem in this redesign. If folks in Orlando actually like the changes, it probably won’t trigger innovation elsewhere.

We’ll start seeing bland, lifeless corporate clones of it popping up all over North America.

Stanley Bing of Fortune writes a scathing entry about people who question the future of newspapers.

He makes several points. Among them:

• People see other industries as dying, but never seem to see anything wrong with their own.
• He and his children enjoy newspapers, so all is well.
• The internet is a medium used to spread rumor, gossip, falsehoods, etc.
• 89 percent of citizen journalists are full of it.

I actually agree with most of his points, but overall he misses the point entirely.

For example, I agree that people tend to over-emphasize the troubles facing other industries while downplaying those facing their own. Unfortunately, newspaper and magazine folks are more guilty of that than most, and Mr. Bing’s column is a prime example. I don’t believe I’ll live to see a day with no newspapers. I think that’s possible, but not likely.

I am, however, certain that I will live to see the day when newspapers in general will be shadows of their former self in terms of size, content and influence. That day is today.

I’m also certain that soon we’ll see far fewer daily papers than exist today. I don’t know what percentage decrease we’ll see. Maybe the 89 percent he throws out in a later point …

He says he and his children still enjoy newspapers. I don’t doubt that, but there are two problems with this point. First, I don’t know anyone who suggests that no one (even no one under the age of 35) likes newspapers. There are lots of people in all age groups who do. But there are many fewer of them than 10 years ago, and the number continues to fall. Second, the challenge isn’t so much getting people to want newspapers; it’s finding a model that makes filling that desire possible. I would love a compact, safe helicopter that runs on water and doesn’t make any noise. Anyone have a business model for meeting my desire?

The internet is a medium used to spread rumors and falsehoods. So is television. So are newspapers. So is talk radio.

Finally, 89 percent of citizen journalists are full of it. Probably true. I think 89 percent of newspaper columnists are full of it, too. I read newspapers for the 11 percent who write informative, compelling stories. I read the internet every day for the 11 percent of citizen journalists who do the same.

So I would add that 89 percent of the people who say that newspapers are dead are 89 percent full of it. Mr. Bing, as evidenced by this column, is 89 percent full of it. I’m 89 percent full of it.

But somewhere in all those remaining 11 percents there’s truth about the bleak future for many papers, and there’s truth about what can be done to make the future brighter for those that survive.

So Dean Singleton says 40 percent of the top metros in the country are losing money, and that the future of the industry is online.

So Mr. Singleton can’t tell Barack Obama from Osama bin Laden, but he does see the future clearly, right? Not so much. Toward the end of his speech, he says this:

This year, we’ll generate 89% of total revenue from our core, 7% from online and 4% from new products.

On operating cash flow, we currently generate 73% from core, 22% from online and 5% from niche products.

In five years or 2012, we expect 68% of revenue to come from core, 20% from online and 12% from niche.

On operating cash flow, our goal in 2012 is 40% from core, 50% from online and 10% from niche.

What’s wrong with this picture? First, his choice of wording. As long as print is the “core,” it will be treated as the core. Second, print does not generate anywhere near 89 percent of current revenue; that’s due to legacy accounting that attributes classified revenue to print.

Finally, he brags about his heavy investment in the dying core while laying off the people needed for the growing segments of the company.

Regardless of the rhetoric, newspapers view themselves first and foremost as factories producing a product, not as information companies.

My first post on the subject suggested that gutting classifieds is a good start to changing the self-image of papers. In that post I mentioned Steve Outing’s new reinventingclassifieds.com, which offers up some innovative thinking. It’s a good site and I don’t want to pick on it or its users. But even among these innovative thinkers you find people tied to some pretty outdated ways of thinking about technology. Here’s an example:

“We need a better online ad placement system and/or verticals offering video/animation, all the bells and whistles at the point of sale. AND ALL THIS FROM ONE VENDOR!”

Software vendors are necessary at papers primarily because of obsolete production methods. Being reliant on these vendors, even the very best ones, limits what a newspaper can do. Until newspapers adapt to open-source, platform-independent software, they’ll be weighed down by their vendors. And these vendors are getting weaker all the time, because trying to run a software company with only a few hundred potential customers is not a very good business model.

In the case of classifieds, the need for specialized vendors virtually disappears with a few relatively minor changes to the business model:

• Make private-party ads free, or at least charge per ad, not by line, and billing becomes easy.
• Stop nickel-and-diming customers with silly upsells, and the software suddenly becomes pretty vanilla.
• Automate the process for web placement and you can survive with almost no staff, so you don’t need vendor workstations.
• Print classifieds in easy-to-read formats and you can use off-the-shelf publishing software.

Some of the software you need if you make the right changes is free. Some of it is a couple hundred dollars a workstation, instead of thousands. Hiring IT help is easier because employees don’t need to know or learn arcane proprietary systems.

Get out of the assembly-line factory thinking, and everything becomes cheaper and easier. “Change” no longer means endless vendor interviews and scary, problematic conversions; it becomes organic and fluid.

Online revenue accounts for about 10 percent of revenue at The New York Times, we keep reading. Classifieds for roughly 30 percent.

But many classified advertisers view the web component as equal to (or in some cases greater than) the print component. So why not evenly split the revenue between print and online or, if you want to be arbitrary, apply it to online? Suddenly, ‘online revenue’ is one third to one half of total revenue.

Changing the accounting method is more than semantics. Doing so focuses strategy where it belongs: On the future, instead of the past. We know people are willing to buy online-only classifieds, but where’s the evidence people would buy print-only ads now, or certainly in the future?

In the final analysis, accounting probably doesn’t matter. Survival of newspaper classifieds is far from certain, and the more time and money papers sink into them, the less time and money they have for preserving news. If papers don’t start to choose one over the other, they might end up with neither.

One of my theories for this site is that conservative politics and conservative use of technology go hand in hand. But here’s a technology kudo for that ultimate right-wing train wreck, The Washington Times.

The re-design of the print edition (see details here) is one of the best I’ve seen at integrating the print and online offerings. The print product in many ways becomes a jumping-off point and guide to the meat of the company, the website.

There are caveats attached to this kudo. The big one is that the digital edition the print product plugs is, well, not very good. washtimes.com makes the same mistake almost every newspaper website makes, leading with the print offerings. It does, however, include more-prominent links to online tools than many sites. The big problem is that the online tools tend to be as skimpy as the print product. There’s just not much there considering the market and budget of the paper, regardless of your politics.

(BTW … where are the email addresses for editors? Phone numbers are great, but email is a better option for everyone.)

Critics no doubt will argue that these changes are being made out of desperation, to save a rapidly sinking ship. I won’t argue that point, but I would remind other papers that the Times is sort of the canary in the coal mine. Its problems are worse than most papers, but only by degrees. Many of the rest of you are headed down the same path.

The early posters on the site hate the changes. Then again, the most vocal newspaper readers tend to hate any change (”Don’t mess with my ‘Nancy’ strip! It’s the best!”).

But don’t dismiss the blue tab gimmick and some of the other changes designed to help guide you to fuller coverage online. If implemented at a paper with more robust content, some of these ideas just might work …