How news outlets can survive: dispelling myths about newspaper revenue

This is the part where I explain that people are wrong when they look at me enviously and say, "You're so lucky, working in news, because you know your job is safe."

Nuh-uh. I am not safe.

Gannett's approximately 40,000 reporters, editors, techies and other news support employees nationwide have been ordered to participate in a companywide weeklong furlough.

Story here.

I know several Gannett employees, and this is kind of lame for them, but it's a reasonable short-term solution to the pinch all of us news outlets are feeling due to the archaic business model our publishing companies cling to so tenaciously. Anyway, a furlough is better than a permanent layoff, any day.

Inside my company, we have faced a salary freeze, and our Christmas bonuses were reduced from previous years.

These are not acceptable long-term solutions, however. Long-term solutions will be far more revolutionary, and will require a better understanding of where our revenue comes from.

Most people assume these penny-pinching moves mean fewer people are reading the news, because they believe news outlets make money from circulation and subscriptions. This is absolutely not true -- if it were, how would you explain, say, network news' income?

Another common myth is that newspaper subscriptions ought naturally to increase during times of recession, because "people are looking for job listings, right?" Wrong.

First of all, it's a lot easier to look for and apply for jobs online, these days, than to read the Classifieds.

Second, news outlets make money in advertising -- not subscriptions. Approximately 10 percent of our revenue comes from subscriptions. The other 90 percent? You guessed it: our advertisers.

So, naturally, when the economy is in a recession and businesses are closing and cutting expenses, newspapers suffer. We have fewer advertisers, and the ones we are able to retain purchase smaller and fewer ads. The number of our pages is reduced, therefore the need for copy is reduced, so the need to employ as many people to produce, edit and print the copy is also reduced. You see?

That does not, however, mean fewer people are reading the news. They ARE reading the news, just in a more convenient and cheaper format: the Internet.

A good way to respond to our hurting economy is to make ads cheaper, so more businesses are able to afford them. The best way to do this is to reduce overhead, and we could do that by transitioning to the Internet and reducing paper/ink use.

A great way to make those ads even more appealing is to ensure they will have a larger audience. We can do THAT by offering more and better content on the Internet, augmenting what we have in print. Continuous updates throughout the day, multimedia packaging (slide shows, video, audio, etc), blogs, etc.

There are a lot of ongoing discussions here among paper editors about utilizing the Internet more effectively (we could use it, for sure). Our ads people are the biggest opponents, ironically.

Wish they realized, if they don't jump on board and make this new model work, there won't BE a news outlet anymore, much less ads to sell for it.

Sorry to say it, but our aging population in this area will soon be gone, and at that point, we will be contending for the attention of two generations who rely almost exclusively on the Internet for their news, shopping and networking (among countless other things). They will not be reading the paper, and our advertisers will not be willing to pay for ads in a paper nobody reads.

This sounds fatalistic, but I firmly believe this situation can be improved by letting go of the traditional media business model and leaping into the 21st Century with the rest of the world. Reporters and news outlets are not a dying breed, their job descriptions are merely changing. Their bosses just need to accept this and accommodate it.