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Hello. Good to be with you.

Feel free to start submitting questions for Rick and Jack Shafer, who is also joining us.

I look forward to an hour of heavy drinking, shouting, and disagreement. Thanks for having me.

Rick, when you and I were setting up this chat, you mentioned that changes at the Ann Arbor Daily News (publishes just twice a week) and Detroit’s reduced delivery experiment (http://bit.ly/KfVtOW) were rescue scenarios for failing papers. You said the precipitating factor in New Orleans, though, isn’t so clear. Can you say more about this?

New Orleans has been described by Advance as a profitable paper with a high penetration rate. May be that the trend lines all point in the wrong direction and that population losses are a negative factor — but it does not seem distressesd as Ann Arbor and detroit were.

(By way of background, here’s some info about the Times-Pic ceasing daily publication:http://bit.ly/KNPRAO)

Jack, you talked about the Times-Picayune in your latest Reuters column on newspaper liquidation:http://reut.rs/LxJVZl. What are your thoughts on how the three-day-a-week model will work for the Times-Picayune?

My view is that the Newhouse family is devising a long-term liquidation plan for their large chain of newspapers. The cutback daily home delivery at some of their Michigan papers before they dropped the bomb on the Times-Picyayune and their Alabama titles. I think that they sense no growth at any of these newspapers so they’re going to extract as much value as they can from then until one day–poof!–they fold them.

What they’re telling the market by printing on the three days of the week that most advertisers advertise is that the papers exist to please advertisers, not readers.

Jack:

As we discussed earlier, I’m not sure lliquidation is just the right term.

But it is all about business/profit. The calculation has to be that savings will be greater than ad losses.

But these papers are not growing. They’re contracting. You know it, I know it, the Newhouse family knows it. Somewhere down the line they’ll turn them into weeklies, right, and then–poof!–liquidated, right?

If Steve Newhouse were here, I think he would instead say that the future of each of these papers is digital. Getting there sooner than later is the right allocation of reporting resources. I don’t entirely agree but that’s the rationale.

If only Steve Newhouse were here. If he really thinks digital is the future, why are the digital spinoffs at his papers so bad. Have you looked at MLive.com, their bland roll-up of news from their Michigan papers? They’re partying like it’s 1999 at those sites.

You’re right on that one. I’ve joked with reporters about whether “Advance” can properly applied to their digital operations. But per last comment, they had better get them improved soon.

Good point, Pete. Some artful cutting of staff and the size of the news report has been necessary because of huge ad revenue declines. But too many papers are sliding into a cycle here skippy reports turn off the remaining reades.

Before I answer Erik Wemple’s question, allow me to plug Erik Wemple’s blog:http://www.washingtonpost.com/blogs/erik-wemple. It’s great.

Obviously if the newspaper existed for readers, it would publish daily as it has for more than a century. By cutting back frequency on their profitable daily, the Newhouse family is saying that they’d rather make more money by giving readers less.

This pattern, giving readers less but charging them more is happening at practically every newspaper in the country.

Chip — You have hit on another of the rationales. In theory, three days of strong readable papers is an improvement on seven days of weak and diluted ones. Trouble is I haven’t seen that in Ann Arbor. Plus the website has had fits and starts — I am not sure it reflects more resources, more focus.

It’s gutsy, I’ll agree. I might even make the decision if I were in charge and knew all the facts. But it does not disturb my thesis that newspapers are increasingly becoming captive of advertisers, even as advertising revenue is falling and subscription revenue per subscriber is rising (because publisher are charging so much more).

Rick, if the Times-Picyayune is profitable, what’s the business rationale for axing four days from the publication schedule? Aren’t they teaching readers to avoid newspapers?

Well, print, presroom and delivery are 30 to 40 percent of costs. You save much if not all of that four days of the week. As I understand the Detroit experience, they have retained about 80 percent or more of the ad revenue in the three home-delivered days (with smaller print editions the others). So it nets out as a profit, plus, in theory building digital.

So, again, this is a confession by the publishers that the industry is in permanent decline, that there is no growth in print in the future, and the logical thing is to liquidate the asset over time?

Also, what business has successfully gone from print to digital?

Yes, they are winding down print — not enough ads to support seven days.

The Christian Science Monitor is a special case in a lot of ways. But their shift — once a week print otherwise digital — has reduced the los that the church subsidizes. So I would call it a success.

Then there’s Bloomberg, which steered away from the expense of print starting in 1981 — and more recently bought Business Week for the visibility of a print presence. (Editor’s note: We corrected this post, as it originally said Bloomberg steered away from the expense of print starting in 1971.)

Chip:

Around here (Tampa Bay Times) we believe that success is satisfying the differing demands of both subcribers and advertisers. That added alevel of complexity even before the digital era.

Publishers have traditionally gone after both advertisers and readers. But the play in New Orleans is pretty transparently designed to make one constituency–advertisers–happy and the other–readers–sad. I know of no daily newspaper subscriber who wishes his beloved newspaper came to his door less frequently.

Rick and Jack, can you say more about which papers have stopped publishing daily, and how well it has worked for them? Has this model been viable? … (One of the questions surrounding the Times-Pic’s decision is whether people will actually follow the paper more closely online once it ceases daily publication:http://bit.ly/MN2yML)

Actually, relatively few have taken the step. Advance papers in Michigan, Detroit CSM. A group in suburban Phoenix tried reduced frequency but it did’nt work.

There has long been speculation that this will be a next step in the transition to digitital. But it is a fairly extreme move — guaranteed to annoy readers as we should discuss a bit.

Can you say more, Rick, about how this type of move can annoy readers?

I’m fascinated by the outpouring of reaction in New Orleans. the Newhouses do own the paper, BUT… readers have a very proprietary feeling about the paper being theirs and their community’s. Public officials too. Mess with that at your peril.

Yes, there was a “Save the Picayune” rally earlier this week:http://bit.ly/Ka51uS

Mal:

As Jack said, they miss the paper in the driveway he days eliminated. Also, in Detroit, readers have had more specific complaints — missing death notices until after the funeral has occurred, no print edition on big news days. New Orleans will be none too happy with digital-only on the Monday after a Sunday Saints game.

Rick, my historical sense is that newspapers have been dying a long, slow death since the advent of radio in the late 1920s. They’ve been sick, but consolidation of hundreds of titles over the years, resulting in one-newspaper towns in which the surviving daily could command monopoly rent, made it look like they were successful as a whole. Don’t you think the print vehicles have no chance to survive in the next 5 to 10 years, except for a couple of national dailies and a smattering of weekly or Sunday papers?

Jack:

They have been losing share of audience for a long time, but these were extremely profitable businesses through the 1990s. That allowed big news staffs and huge papers.

Those good old days are not coming back, but papers may be able to stabilize and succeed as smaller (and/or less frequent) print products.

Yes, profitable 90s but dying from inside. There’s a great David Shaw Los Angeles piece from 1978 about the industry whose lede was, “Are you now holding an endangered species in your hands?” My view is that the dying of newspapers is well-understood by the newspaper industry, which was fretting about it decades before the Internet came alive.

Chip:

Sure — One hope for a new business model is a remaining print base and a portfolio of digital products, both profitable. We are not there yet by a long shot, but I wouldn’t rule the possibility out.

But current trends, including softening digital advertising in recent months suggest a fragility for these businesses. They badly need a big win, and one is not on the horizon.

I certainly agree with Jack that three-days-a-week is a strategic retreat.

One last thought before I sign off. (Thanks to Rick for his wisdom and Mallary for organizing and readers for comment.)

By putting eight or nine of their newspapers in the hospice, with more its titles to follow, the Newhouse family has done us a great service, confirming what some of us have been saying for the last decade: Newspapers can’t win the death race.

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