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The biggest threat to newspapers has nothing to do with the fall in circulation revenue, a drop in ad revenue or the stagnation of digital revenues. It has nothing to do with falling circulation. It has everything to do with three letters:

A-O-L.

You remember America On Line? Nice little company that once was the buzz among digital sites but has been overshadowed by Google, Yahoo, MSN, etc. Folks, AOL is back — with a vengance.

AOL has hired 500 full-time journalists and another 1,500 freelancers, according to the much respected TechCrunch.  As the report shows, AOL has hired some of the nation’s biggest and most recognizable names, all of whom worked for journalism giants.  AOL wants to buy up media brands and expand on its existing content in an effort to become a content goliath.

And why not? AOL’s numbers were down in 2008, but on a full year basis, had revenue of $968M and OIBDA of $405M, according to published reports.  With publishers in a cutting mode, AOL looks to fill the gap in two ways — by providing content to its customers and jobs to seasoned professionals with name recognition.

Can AOL get into hyper local community journalism? Probably not. There’s probably not mch money in AOL reporters scouring the local fire department or city council for news. But there is money in financial and sports news, and other specialty coverage. Could AOL go the ESPN route — create a stable of names that customers will easily pay to read?

Might others follow suit? Again, why not? These search-related businesses might find it easier to hire content producers — and there are plenty available — the battling publishers demading money for their origianl content. If AOL can do this, others can too, and that’s a scary proposition.

That’s what the residence of Birmingham, Michigan said when Gannett announced it would close the community’s 3,000-circulation newspaper. The Detroit News did a really nice story on what transpired. In short, the town rallied behind the newspaper, promised to help prop up subscriptions, and as a result, the newspaper didn’t close.

Folks, this is the future. Newspaper companies, burdened with debt and shrinking profits,  are going to close newspapers or shrink the days of the week they publish. But if a community can show some love, that newspaper could very well survive.

There’s some good and bad to that. The good: the newspaper continues to write about issues important to their customers.  Journalists — and not just bloggers — can dig and anlyze. The bad: does this mean newspaper publishers and editors now are indebted to a community that’s keeping it afloat? Could newspapers be pressured to suppress news if supporters deemed it unbecoming?

I worry about the bad. I can see someone barging into a newspaper office, demanding an unflattering  story not be published, and reminding everyone in earshot that they — and their legion of buddies — could cancel their subscriptions and possibly help push that newspaper to extinction.

But I also have faith that most in any community understand what a newspaper does — it reports the news without bias and lets its customers make up their minds. That should outweigh anything else.

The opinions expressed on this blog are mine alone.

The drop in classified revenue will kill newspapers. The drop in advertising revenue will lead to their doom. The fall in circulation will result in newspapers printing fewer days of the week, and maybe cease operations all together.

These are among the more popular doomsday scenarios, none of which will lead to the demise of newspapers. Classified revenue may be close to bottoming out; newspaper inserts — especially on Sunday — are still the most reliable way to get advertiser messages to customers; and the current circulation numbers don’t portend doom, but instead mean we have the customers that really want out products, and they’re tremendously valuable to our advertisers.

But there is new challenger that could do more damage more quickly than any of the issues above — wireless companies. Their ability to market products and turn out new technology bodes poorly for publishers.

Look at what’s happening in the market. Plastic Logic is partnering with AT&T to distribute its e-reader. Rumors persist that Apple’s tablet will be launched this fall, and be distributed through Verizon. If AT&T and Verizon are in the game, you can bet Sprint and T-Mobile won’t be far behind.

Each will be able to offer complete digital packages for one price — a cell phone; netbook (or laptop) for home use; an e-reader for portable use; a data plan to power all of those devices; and, oh by the way, home internet and cable access, too.

The wireless carriers could also sell a digital advertising package across all of their platforms, reaching customers via several tools multiple times a day. The carriers don’t have to produce any content themselves; the thousands of available free apps will take care of that. Notice I said “content” and not “news.”

Here’s where the conjecture comes in: What if the carriers decide they want to partner with select news organizations for exclusive rights to their content …  the content only appears on their devices for their audience? And what if  the carriers offer affordable data plans and focus on combining their services into one attractive package? Which publishers make it, and which ones get shut out because their content isn’t available due to these exclusive deals?

This could be entirely off base. But the wireless carriers see an opportunity, and they’re embracing it much faster than many publilshers.

My most recent column for NewsandTech has resulted in some buzz. In it, I argue that the debate over whether we can save newspapers is horribly misguided. Newspapers will be around for a long time; they may be around in a much different form.

I believe the debate we should have is over saving journalism, and the importance strong, independent journalism has to a free society. We can’t afford to have a litany of the uninformed masquerading as defenders of the truth. We have thousands of well-trained journalists who want to inform public of what’s going on in their community — and then let the community decide whether that information is good or bad. Please take a look at the entire column and let me know what you think

The opinions expressed on this blog are mine alone

What are they thinking?

Wireless companies are rushing to offer low-cost netbooks tied to expensive data plans and just as expensive gadgets that, at the end of the day, result in a netbook that costs more than Dell’s high-end Alienware laptop.  Just take a look at what Verizon is doing. The $199 netbook price looks real appealing at first. But you have to sign a two-year contract with a data package that will cost about $1,000. Do the math and you quickly go, huh?

I love  netbooks. I think these light and easy-to-use devices have a real niche market. College students can use them to take notes in class and read material away from class (the 10.1 inch screens are much easier to read that the 6″ screen most e-readers come with).  Since they’re so light, they’re easy to cart anywhere with wireless access, and it’s becoming easier by the day to find a free wireless hookup. And I also like the video and color you can’t get with the e-reader on the American market.

But  I also don’t think netbooks are going to drive mobile data adoption because the public, after the initial infactuation, will look a the overall costs and go, “No Way.”

So that’s why netbooks might have harder time growing market share. And that should concern publishers, because these nifty little devices hold a lot of promise. There could even come a time when publishers and wireless carriers form partnerships to help grow market share for both — a publisher has a local army of carriers that can deliver the devices, and the carrier has tremendous marketing muscle. That would be something worth talking about.

The views on this blog are mine alone

Amazon announced last that it would knock $60 off its Kindle 2, bringing the new price to $299. Much of the coverage stopped there. and didn’t provide much context into why this is an important development for publishers.

Forget about the price drop; that’s secondary news. The bigger news: it appears that Amazon is adjusting to the competiton, which is repidly releasing cheaper reader alternatives. In addition to the competition,  Amazon is having trouble breaking into some lucrative European markets, according to multiple reports. That inability puts pressure on Amazon to find more revenue streams.

Amazon made a lot of news with the Kindle DX, and the release kept the Kindle brand in the public consciousness. But look at everything that’s happening in the e-reader market:

  • Crunchpad by Techcrunch should be demoed next month, and it has a promised price of $299 or less.

  • The Ditto Book and Cool-ER e-readers are now available, at $249.

  • The Smart Q7, which is along the line of the Jointech device, sells for $189


And those are just a few developments. Taken in context, Amazon had to make a move in these price-conscious times. And that’s GREAT for publishers, who are trying to figure out which reader is best for its market, and how they can make money by utilizing readers in lieu of expensive ink, paper, and distribution costs. The further manufacturers drive down the price, the better chance publishers have to recoup their upfront costs and make a profit.

Over time, you can expect these devices to drop in price further. When a manufacturer can figure out how to sell a color wireless reading device for $199, then I think you’ll see adoption take off. And, at that price, publishers can afford to buy them and give them to their customers, provided they buy a subscription to the information they produce. That will help the health of the industry.

The views expressed on this blog are mine alone

I’m back after a little hiatus!

MediaPost recently reported that 37 sites are ready to implement the newest ad sizes implemented by the Online Publishers Association.  These are bigger, badder, in-your-face ads that scream LOOK AT ME. These behemoths chew up huge portions of the online space.  Among the ad sizes: The Fixed Panel (336 wide x 700 tall), which stays on the screen as a user scrolls up or down the page.

No surprise, but the naysayers are out, claiming that these newer ad units will kill audience. Users don’t want to be bothered with annoying ads anyway, and these bigger units will send them fleeing to …. websites without these bigger units.

Nonsense, I say. These bigger units aren’t going to drive users away. I’m convinced that, if done properly, users won’t mind them at all. The right creative can make these ads entertaining, so much so that they can attract a user’s eye. I don’t think gigantic static ads will do much; the right creative will make the difference.

From a more practical perspective, newspaper web sites need the money. News organizations are, by in large, giving away their content free. We need to remind our users that in exchange for free, there comes a small price — we ask that you view the ads and, hopefully, buy something from the advertiser. What would a user do — pay to read a story or look at a well done piece of creative?

I say, the more intrusive, the better.

The views expressed on this blog are mine alone.