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Newspapers' Plea: We're Still Relevant!

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The dead tree dailies hope local content will save them.

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Newspaper executives hope that keeping it local will keep them in business.

"What newspapers do best is deliver the local perspective," Susie Ellwood, chief executive officer of the Detroit Newspaper Group and the Detroit Media Partnership, said Tuesday during a panel discussion held as part of Advertising Week in New York.

Making the news relevant to local readers means newspapers will continue to deliver key consumers to advertisers. But there are huge challenges ahead.

The Pew Project for Excellence in Journalism reports that declines in print newspaper circulation, which began to accelerate in late 2003, deepened in 2008. Overall, newspaper circulation fell 4.6% daily and 4.8% in Sunday issues for the six-month period ended September 30, 2008.

Still, total daily circulation was 48.4 million and Sunday circulation totaled 48.8 million, making newspapers an effective way to reach a broad audience in a single advertising buy.

Page views of newspaper websites were up 25.2% in the survey period. On average, unduplicated Internet readers added 8.4% to a newspaper's readership in its home market.
Like other media, the basic question for newspapers is: Who sees the ads and actually responds to them?

Current measurement techniques are imprecise, but that may change as electronic delivery becomes more important to newspapers.

E-readers, such as Amazon's (AMZN) Kindle DX will allow newspapers to know who sees the ads and to better measure response. Sony (SNE) offers a competing product and Apple (AAPL) is expected to launch its e-reader in 12 to 18 months.

One disadvantage: So far, e-readers don't offer color and advertisers may not be enthusiastic about making their pitch on a screen that has all the emotional snap of a monochromatic computer at the Department of Motor Vehicles.

E-readers are often pitched as the next big thing, but it's not yet clear that newspaper readers will adopt them in huge numbers. Newspapers, the original portable media, are cheap, easy to use, and not damaged if dropped. E-readers are expensive, fragile, and using one on a train or a bus in a large city may invite theft.

Don Meek, president of Tribune 365, says some critics overlook a basic strength of newspapers: their ability to deliver ads or sample products to every residence in select areas, typically portions of upscale zip codes.

Some publishers now deliver stripped-down versions of the daily newspaper to non-subscribers that offer just the basics, including a news summary and sports scores. Readers can quickly scan the news and advertisers can reach a new cohort of potential customers.

Despite the lure of new technology, content remains the key to success.

"Good quality content is the price of admission to this game," Meek said. "You can't play without it."

That's a polite way of saying publishers must give readers a reason to read the paper or click to the website. But reporters and editors are expensive and maintaining adequate staff levels is an ongoing challenge in the current economy.

Cutting too deeply would dilute the editorial content. After all, it was The Washington Post (WPO) -- not TV -- that broke the Watergate scandal.

Some publishers have experimented with pay walls, but this typically works only with major publications such as The Wall Street Journal (NWS) that offer stories or a take on the news that competitors can't match. Even The New York Times (NYT) ended its paid content, TimesSelect, in 2007.

What's unclear is how metropolitan dailies will serve local readers in outlying areas. One response is hyper-local websites that provide community news and low advertising rates that their big-city brethren can't match. But it's not certain that such sites will deliver significant numbers of key readers to advertisers.

Newspapers will deliver news via the Internet and mobile phone, forcing publishers to repackage the information. But panelists said this won't alter newspapers' key role in reporting the news. New technology also will improve targeted advertising by letting readers select fields of interest, which will then allow advertisers to reach out to relevant readers.

But the panelists agreed that black ink on a white page won't vanish.

"I think print will always be important -- it's at the core of what we do," Ellwood said.

Maybe. But it's not hard to imagine that buggy whip manufacturers said the same thing as Ford (F) cranked up the assembly line.
No positions in stocks mentioned.
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