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The State of The World Media, As Outlined by The Project for Excellence in Journalism, Posted by Robert Paisola

The Mainstream Media is OUT- The Consumer Media Machine is in FULL STEAM AHEAD!

Overview

By the Project for Excellence in Journalism

Intro

The pace of change has accelerated.

In the last year, the trends reshaping journalism didn’t just quicken, they seemed to be nearing a pivot point.

On Madison Avenue, talk has turned to whether the business model that has financed the news for more than a century — product advertising — still fits the way people consume media.

With audiences splintering across ever more platforms, nearly every metric for measuring audience is now under challenge as either flawed or obsolete — from circulation in print, to ratings in TV, to page views and unique visitors online.

Every media sector except for two is now losing popularity. Even the number of people who go online for news — or anything else — has stopped growing. Only the ethnic press is up.

The definitions of enemy and ally in the news business are changing. Newspapers have begun to partner, for instance, with classified-job-listing Web sites they once denounced, brought together by mutual fear of free sites such as Craigslist.

With fundamentals shifting, we sense the news business entering a new phase heading into 2007—a phase of more limited ambition. Rather than try to manage decline, many news organizations have taken the next step of starting to redefine their appeal and their purpose based on diminished capacity. Increasingly outlets are looking for “brand” or “franchise” areas of coverage to build audience around.

For some, the new brand is what Wall Street calls “hyper localism” (consider the end of foreign bureaus at the Boston Globe or the narrowing of the coverage area at the Atlanta Journal Constitution). For others, it is personality and opinion (note the rising ratings of Lou Dobbs or Keith Olbermann). For still others it is personal involvement (the brand of Anderson Cooper, and, more tentatively and occasionally, even broadcast network anchors). For an emerging cohort of Web sites it is the involvement of everyday people (some alternative news sites now come closer than ever to the promise of authentic citizen media).

In a sense all news organizations are becoming more niche players, basing their appeal less on how they cover the news and more on what they cover.

The consequences of this narrowing of focus involve more risk than we sense the business has considered. Concepts like hyper localism, pursued in the most literal sense, can be marketing speak for simply doing less. Branding can also be a mask for bias. Handled badly, the new strategy might also render a big city metro paper irrelevant. The recent history of the news industry is marked by caution and continuity more than innovation. The character of the next era, far from inevitable, will likely depend heavily on the quality of leadership in the newsroom and boardroom. If history is a guide, (be it Adolph Ochs, Ted Turner, or Google) it will require renegades and risk-takers to break from the conventional path and create new directions.

“I really don’t know whether we’ll be printing The Times in five years, and you know what? I don’t care,” the paper’s publisher and chairman of the New York Times Company, Arthur Ochs Sulzberger Jr., told an interviewer earlier this year. The head of country’s most esteemed news company meant to sound an optimistic tone about journalism’s future, but the statement, like the industry, seemed to teeter between boldness and uncertainty.

This is the fourth edition of our annual report on the state of the news media — the status and health of journalism in America. The broad context outlined in earlier editions remains the same: the transformation facing journalism is epochal, as momentous as the invention of television or the telegraph, perhaps on the order of the printing press itself. (See Previous Reports).

The effect is more than just audiences migrating to new delivery systems. Technology is redefining the role of the citizen — endowing the individual with more responsibility and command over how he or she consumes information — and that new role is only beginning to be understood.

Our sense remains, too, that traditional journalism is not, as some suggest, becoming irrelevant. There is more evidence now that new technology companies have had either limited success in news gathering (Yahoo, AOL), or have avoided it altogether (Google). Whoever owns them, old newsrooms now seem more likely than a few years ago to be the foundations for the newsrooms of the future.

But practicing journalism has become far more difficult and demands new vision. Journalism is becoming a smaller part of people’s information mix. The press is no longer gatekeeper over what the public knows.

Journalists have reacted relatively slowly. They are only now beginning to re-imagine their role. Their companies failed to see “search” as a kind of journalism. Their industry has spent comparatively little on R&D. They have been tentative about pressing for new economic models, and that has left them fearful and defensive. Some of the most interesting experiments in new journalism continue to come from outside the profession — sites such as Global Voices, which mixes approved volunteer “reporters” from around the world with professional editors.

There are signs, meanwhile, that those the press is charged with monitoring, including the government, corporations and activists, have reacted more quickly. Politicians, interest groups and corporate public relations people tell PEJ they have bloggers now on secret retainer — and they are delighted with the results.

These are a few of the conclusions we arrive at about The State of the News Media 2007. Each year, we try to identify new key trends facing the media. In the past, among others, we have noted that journalism’s challenge is not from technology or lack of interest in news but from diminished economic potential; that power is moving to those who make news away from those who cover it; that there are now several competing models of journalism, with cheaper, less accurate ones gaining momentum; that while there are more outlets delivering news, that has generally not meant covering a broader range of stories.

Major Trends

In 2007, we see seven new major trends worth highlighting:

News organizations need to do more to think through the implications of this new era of shrinking ambitions. The move toward building audience around “franchise” areas of coverage or other traits is a logical response to fragmentation and can, managed creatively, have journalistic value. To a degree, journalism’s problems are oversupply, too many news organizations doing the same thing. But something gained means something lost, especially as newsrooms get smaller. There is already evidence that basic monitoring of local government has suffered. Regional concerns, as opposed to local, are likely to get less coverage. Matters with widespread impact but little audience appeal, always a challenge, seem more at risk of being unmonitored. What do concepts like localism and branding really mean? Should only national newspapers maintain foreign bureaus? Does localism mean provincialism? Should news organizations, so as not to abandon more high-level coverage, enlist citizen sentinels to monitor community news? To what extent do journalists still have a role in creating a broad agenda of common knowledge? Those issues, debated in theory before, are becoming real. And the wrong answers could hasten, not stave off, the decline of news organizations.

The evidence is mounting that the news industry must become more aggressive about developing a new economic model. The signs are clearer that advertising works differently online than in older media. Finding out about goods and services on the Web is an activity unto itself, like using the yellow pages, and less a byproduct of getting news, such as seeing a car ad during a newscast. The consequence is that advertisers may not need journalism as they once did, particularly online. Already the predictions of advertising growth on the Web are being scaled back. That has major implications, (which some initiatives such as “Newspaper Next” are beginning to grapple with). Among them, news organizations can broaden what they consider journalistic function to include activities such as online search and citizen media, and perhaps even liken their journalism to anchor stores at a mall, a major reason for coming but not the only one. Perhaps most important, the math suggests they almost certainly must find a way to get consumers to pay for digital content. The increasingly logical scenario is not to charge the consumer directly. Instead, news providers would charge Internet providers and aggregators licensing fees for content. News organizations may have to create consortiums to make this happen. And those fees would likely add to the bills consumers pay for Internet access. But the notion that the Internet is free is already false. Those who report the news just aren’t sharing in the fees.

The key question is whether the investment community sees the news business as a declining industry or an emerging one in transition. If one believes that news will continue to be the primary public square where people gather — with the central newsrooms in a community delivering that audience across different platforms — then it seems reasonable that the economics in time will sort themselves out. In that scenario, people with things to sell still need to reach consumers, and the news will be a primary means of finding them. If one believes, however, that the economics of news are now broken, with further declines ahead, then it seems inevitable that the investment in newsrooms will continue to shrink and the quality of journalism in America will decline. One thing seems clear, however: If news companies do not assert their own vision here, including making a case and taking risks, their future will be defined by those less invested in and passionate about news.

There are growing questions about whether the dominant ownership model of the last generation, the public corporation, is suited to the transition newsrooms must now make. Private markets now appear to value media properties more highly than Wall Street does. More executives are openly expressing doubt, too, whether public ownership’s required focus on stock price and quarterly returns will allow media companies the time and freedom and risk taking they feel they need to make the transition to the new age. The radio giant Clear Channel made that point when it went private. So have a host of private suitors emerging in the newspaper field. What is unknown is whether these potential new private owners are motivated by public interest, a vision of growth online, having a high-profile hobby (like a sports team), or as an investment to be flipped for profit after aggressive cost-cutting. Public ownership tends to make companies play by the same rules. Private ownership has few leveling influences. And the new crop of potential private owners is unlike the press barons of the past, people trying to create their legacy in news. Most of them are people who made their fortunes in other enterprises.

The Argument Culture is giving way to something new, the Answer Culture. Critics used to bemoan what author Michael Crichton once called the “Crossfire Syndrome,” the tendency of journalists to stage mock debates about issues on TV and in print. Such debates, critics lamented, tended to polarize, oversimplify and flatten issues to the point that Americans in the middle of the spectrum felt left out. That era of argument —R.W. Apple Jr. the gifted New York Times Reporter who died in 2006, called it “pie throwing” — appears to be evolving. The program “Crossfire” has been canceled. A growing pattern has news outlets, programs and journalists offering up solutions, crusades, certainty and the impression of putting all the blur of information in clear order for people. The tone may be just as extreme as before, but now the other side is not given equal play. In a sense, the debate in many venues is settled — at least for the host. This is something that was once more confined to talk radio, but it is spreading as it draws an audience elsewhere and in more nuanced ways. The most popular show in cable has shifted from the questions of Larry King to the answers of Bill O’Reilly. On CNN his rival Anderson Cooper becomes personally involved in stories. Lou Dobbs, also on CNN, rails against job exportation. Dateline goes after child predators. Even less controversial figures have causes: ABC weatherman Sam Campion champions green consumerism. The Answer Culture in journalism, which is part of the new branding, represents an appeal more idiosyncratic and less ideological than pure partisan journalism.

Blogging is on the brink of a new phase that will probably include scandal, profitability for some, and a splintering into elites and non-elites over standards and ethics. The use of blogs by political campaigns in the mid-term elections of 2006 is already intensifying in the approach to the presidential election of 2008. Corporate public-relations efforts are beginning to use blogs as well, often covertly. What gives blogging its authenticity and momentum — its open access — also makes it vulnerable to being used and manipulated. At the same time, some of the most popular bloggers are already becoming businesses or being assimilated by establishment media. All this is likely to cause blogging to lose some of its patina as citizen media. To protect themselves, some of the best-known bloggers are already forming associations, with ethics codes, standards of conduct and more. The paradox of professionalizing the medium to preserve its integrity as an independent citizen platform is the start of a complicated new era in the evolution of the blogosphere.

While journalists are becoming more serious about the Web, no clear models of how to do journalism online really exist yet, and some qualities are still only marginally explored. Our content study this year was a close examination of some three dozen Web sites from a range of media. Our goal was to assess the state of journalism online at the beginning of 2007. What we found was that the root media no longer strictly define a site’s character. The Web sites of the Washington Post and the New York Times, for instance, are more dissimilar than the papers are in print. The Post, by our count, was beginning to have more in common with some sites from other media. The field is still highly experimental, with an array of options, but it can be hard to discern what one site offers, in contrast to another. And some of the Web’s potential abilities seem less developed than others. Sites have done more, for instance, to exploit immediacy, but they have done less to exploit the potential for depth.

Audience

Technology is overwhelming the old ways of measuring the audience for news. In 2006 the push to find new metrics gained significant momentum.

The pressure is coming from two directions. Advertisers, worried about having to split their budgets among an expanding list of platforms, want more precise information about exactly who is consuming what. And in certain media, the content producers feel the old yardsticks are undercounting their numbers.

In television, watching shows on DVRs, Web sites, and YouTube is making conventional TV ratings only part of the equation. Advertisers also want to know whether people are fast-forwarding through the commercials. Nielsen, the primary company for counting television viewers, is working on something called “Anytime Anywhere Media Measurement” that will track viewership of TV commercials, fuse TV and Internet viewing and, within five years, eliminate paper diaries that require people to write down their viewing habits.

In newspapers, worried publishers want to make more of three key ideas they think are missed by the old notion of circulation, the number of newspapers sold each day. That metric, they argue, fails to recognize how many different people actually read a paper, how much time they spend with it, and the number of people who read the paper online. Their goal is some measurement that will capture total audience.

Magazines may be headed toward something similar, led by Time, which wants to sell itself as a combination of print and online.

And online, the situation may be even more muddled. What is a page view? What is a visit? The way pages are built and the measuring system employed often yield different results. And new delivery systems, such as e-mail alerts, RSS, podcasting and more, can go uncounted in the current ways of measuring. The more successful a site is in making its content mobile, the more it may drive down “traffic” to the site itself.

The effects of that may already be showing. The number of people who go “online” for news or anything else has now stabilized, confirming something we first saw last year. In all, about 92 million people now go online for news, according to one leading survey.¹

How is it possible that the online audience has already reached a plateau, even as high-speed connections are spreading? The spread of new mobile digital equipment may be part of the answer. The concept of going online itself may now be too limited.

And online is the best that it gets. In 2006, by the traditional yardsticks, the audience numbers dropped for more media than we have seen before. Even public radio, which had seen its audience explode over the last decade, appears to have flattened out. The audience for alternative weekly newspapers, recently a growth area, now appears to be contracting.

One big change was cable. Fox began to see its audience decline in 2006, enough despite gains at MSNBC to produce an overall slide for the industry. The mean average audience for cable news dropped roughly 12% in prime time and 11% in daytime.

At newspapers, despite hopes that the year might be better, 2006 saw daily circulation drop by almost 3% and Sunday almost 4%, about as bad as the year before. The 50 biggest papers in the country continued to suffer more than that by about another percentage point.

Over the last three years, the losses total 6.3 percent daily and 8 percent Sunday.

Readership, the new preferred number, while it looked better, was also falling, down 1.7% in 2006.

The audience for magazines over all was flat, but magazines to some degree can buy circulation through discounts. The more telling factor was that Time decided to reduce the circulation it guarantees to advertisers.

In network news, a year of change on the air made little difference with audiences. Despite new anchors, millions in promotion, press attention and more, network evening news lost another million viewers, roughly the same number it has lost in each of the last 25 years. As a percentage, of course, the number is growing.

Morning news also fell, for the second year running, by 500,000 viewers (to 13.6 million) putting the audience at the lowest point of the decade.

Local news, meanwhile, registered even more rapid audience declines — a disappointment after earlier numbers had suggested the losses had stabilized. We found ratings and share numbers dropping year to year in every period of the year and in every daypart, in some cases by double digits. The use of new digital people meters may have something to do with it, but that hardly explains it all.

The ethnic press is still a growth area, but some analysts now see it as cresting. For the first time, the number of native-born Hispanics in the U.S. was higher than the number of immigrants. Still, in 2005, the latest year with data available, Spanish-language newspaper circulation — not just dailies but all papers — continued to grow substantially, up 900,000, to 17.6 million.

The audience for radio, meanwhile, remains stable, with more than 90% of people listening at least some each week. But logic suggests that the landscape there is changing, too, in the amount of time spent listening if not the total number of listeners. In traditional radio, news/talk/information remains the most popular category, but news is probably a small part of that.

While alternative listening devices are proliferating, news is only a small part of that universe as well. Only 8% of MP3 owners listen to news podcasts, 6% of cell phone owners get news on their phones, and 18.5% of owners of personal digital assistant devices get news from their PDA’s. One technology dismissed earlier, Internet radio, seems to be now gaining some force.

Footnotes

1. And nearly a third of them, or roughly 29 million people, now regularly get news online.

Economics

If the audience trends are down, the financial picture for journalism is more nuanced. The industry has learned to manage decline, to a point. But it has also shown it can over-manage, cutting costs without innovating.

Heading into 2007, that tension, between managing decline and maneuvering through transition, will become even greater. The signs of more structural change are strong.

There is more evidence that advertisers are reluctant to spend money without a clearer sense of its effect. The technology for measuring audience is about to leap forward, including methods for showing whether TV viewers are skipping the ads. The hope that Internet advertising will someday match what print and television now bring in appears to be vanishing. Former enemies, newspapers and classified job Web sites are now creating partnerships in part to fend off the effects of free listings from Craigslist. The entire business model of journalism may be in flux in a few years.

For the moment, however, the current phase of transition for many sectors is proving difficult.

In 2006, newspaper revenues were flat and earnings fell — for the first time in memory in a non-recessionary year. The decline in earnings before taxes was sizeable, about 8% from 2005, and 2005 was not an especially good year either.

The fundamentals are all problematic: Employment classified is disappearing. Automotive is suffering too. And the gains in online ad revenue are no longer enough to make up for the combined declines in print ads and circulation.

The response by Wall Street was grumpy. The price of newspaper stocks fell about 11%, and that after 20% declines the year before.

The other major print sector, magazines, fared better, but it was still not a good year. After a bad 2005, the industry anticipated a recovery in 2006 that didn’t materialize. The number of ad pages in magazines in 2006 was flat industry-wide, and news magazines fared about the same.

That has led several publications, particularly Time and to a lesser degree U.S. News and World Report, to announce that they want to be considered for the purposes of setting ad rates combined online and print publications.

The one sector in print that seemed to break the trend continued to be the ethnic press, especially Hispanic. For the latest year available, 2005, ad dollars spent in Hispanic publications grew 4.6%. The percentage ad revenue at Hispanic newspapers from national advertisers doubled, according to the Latino Print Network.

Online, meanwhile, the advertising market appeared headed for yet another record-setting year, up more than a third again, past $16 billion, in 2006.

But now there are growing doubts about how much of that will accrue to news, and the projections are that the growth rate in online advertising will begin to slow next year and could drop to single digits before the decade ends. That adds to the sense of urgency that journalism must find a new economic model online or suffer serious erosion.

If the problems in print seem intractable, and the growth of online still not enough to clarify the future, television continued to manage the balance sheet more successfully.

In local TV news, projections for 2006 have advertising revenues increasing 10%. TV is still able to increase revenues by adding more news programming during the day, and indeed the number of hours of local news programming has reached record highs. But at some point local TV news will likely hit a ceiling when it comes to adding programs.

In network news, according to the latest full-year figures (2005), all three networks saw revenues grow for both morning and evening news, in some cases by double digits. The projections for 2006 also look positive.

And in cable, where fees come both from advertising and from 10-year contracts signed with cable carriers who pay licensing fees to the channels, business for the news channels is robust. Fox is projected to see profits grow by a third, overtaking CNN. CNN is expected to increase profits 13%, MSNBC is expected to see meaningful profits for the first time.

Radio, by contrast, was flat in 2006, with total ad revenue rising just 1%. More radio news directors, according to survey data, have also been reporting losses from their news operations in recent years.

But some of that may be deceiving. Revenues from new audio technology are growing rapidly; online radio advertising rose 77% in 2005 to $60 million. Those numbers are still small, but a good portion of such revenues (half in the case of online radio advertising) are going to traditional radio companies.

Ownership

A year ago in this report, we outlined how arguments reaching back nearly a century, about what models of ownership of media were best, had suddenly intensified.

The progression from local owner to chain and from chain to publicly traded company was fueled by growth. Going public and getting bigger allowed media companies economies of scale and gave them cash to invest — for more reporters, more presses, more papers, more TV stations.

Later, when companies like Tribune, Times Mirror, the Washington Post and others, went public, they bet in effect that they were so profitable they would be immune from many of the conventional pressures of Wall Street. That bet looked solid for a while.

And even as the business fundamentals changed in the last decade, media companies were able to manage the decline. Critics complained that the companies were “eating their seed corn,” by failing to invest in the future, but managers countered that they had to make a profit and operate in the real world. Whatever the long-term implications, business was good.

Yet the argument that journalism was more than a business, that it had some larger public-interest obligation, began to fade. What could not be justified financially, quite simply, could no longer be justified. The media business felt it could no longer afford it.

Now, there has been a new turn in the debates over ownership. Starting in 2005 and accelerating in 2006, there have begun to be questions not only from journalists but now from corporate managers and investors about whether the dominant model of media ownership, the public corporation, is still preferred. And the questions are no longer simply moral ones.

Companies that rode the wave of deregulation and consolidation, such as Clear Channel, went private in 2006. The radio giant also began to divest and get smaller. There was more sales activity in local TV than in years, properties that at the moment can command high prices. Newspapers are losing value, and the percentages are staggering. The Minneapolis Star Tribune was sold to private investors for half of what McClatchy paid for it eight years earlier. The New York Times wrote down the value of the Boston Globe by 40%.

What model might replace the public corporation? That is in much more doubt. Philanthropies have had talks about whether they should get involved. Already charitable funding of the news, sometimes with pointedly political motive, has become more of a factor in financing particular stories, but not yet in owning media. Private equity firms have become more active. So have wealthy magnates like the record mogul David Geffen, the former General Electric boss Jack Welch and real estate magnate Eli Broad. But look more closely. The list is so diverse it represents uncertainty, not a direction.

The Federal Communication Commission decided to reopen talks about relaxing ownership rules, a step it tried and failed to put into effect in 2003. Liberals like the FCC commissioner Michael Copps want to push in the other direction. He told a panel at Columbia University in early 2007 that the country should not only re-impose the regulations junked in the Reagan years, including tighter ownership caps, the Fairness Doctrine and Equal Time rule. He also wants to impose new rules, perhaps for print as well. Whether or not there is now a constituency for that on Capitol Hill, few would have wasted their breath on such a campaign a few years ago.

The one thing that can be said with certainty — to a much greater degree than was true a few years ago — is that the notion that a diverse public corporation is best suited to have the wherewithal, resources and experience to manage the future of media is no longer gospel. The concept of the media conglomerate, in that sense, has been put into play.

News Investment

Over the previous two years, some of the long-term cutbacks seen in newsrooms appeared to ease. Blogging gained momentum. We found the beginning of more genuine investment in the Internet. The cutbacks in network news appeared to stabilize.

In 2006, however, the situation for most of the media we study appeared to worsen. And that occurred at a time a time when the news was hardly slowing down during a global war on terror and a worsening situation for the United States in Iraq.

Matters are eroding most acutely at daily newspapers, and what occurs in that industry still has an echo effect on the press generally. Papers remain the news organizations most likely to cover the fullest range of life in a community, to influence what is on the wires, to provide the news for the Internet and to be an alert for other media.

Between 2000 and 2005, newsroom staffing at dailies had already dropped by 3,000 people, or about 5%.

By the time the final tally is in for 2006, we estimate it could be down another 1,000 —with more now expected in 2007.

When combined with reductions at several papers in the physical size of the page, the overall number of pages and a smaller ratio of news to advertising, the changes suggest that American newspapers have reduced their ambitions. The year 2007 may well be one when a smaller American newspaper, more targeted and analytical — rather than one that purports to cover the whole waterfront — emerges as a trend.

That is significant in part because newspapers, according to our research in the past, were one of the last platforms attempting to provide people with a complete diet of the news —from international to local, from hard news to lifestyle. Newspapers remain the alert system, too, for so many other media.

Less clear is what is lost and what is left uncovered. That becomes a concern that deserves more study.

The retrenching comes, too, as new research reaffirms what scholars of an earlier generation also felt they had establishment—that the best way for news organizations to thrive is to invest. The study, based on research conducted by the University of Missouri’s School of Journalism, found that when newspapers increased spending on newsrooms, their profits went up. And cutting could be shown to do the reverse. “If you lower the amount of money spent in the newsroom, then pretty soon the news product becomes so bad that you begin to lose money,” said Esther Thorson, a co-author of the study.

As he resisted more reductions at the Los Angeles Times, the soon-to-be ousted publisher Jeffrey Johnson argued the same notion. “Newspapers,” he said, “can’t cut their way to the future.”

The situation at the three major weekly news magazines also appears serious.

After big cuts in 2005 and 2006 — 14% of Time magazine’s newsroom by our analysis — Time Inc. in early 2007 announced staffing cuts of nearly 300 more at all its magazines. Time itself will lose 50 people (from business and editorial combined) and close bureaus in Los Angeles, Chicago and Atlanta.

At Newsweek, meanwhile, editorial staff positions in 2006 were down by half from what they were in 1983, and down 11% from 2005.

In network news, our sense, new this year, is that the cutting continues. From 2002 to 2006, a new PEJ analysis estimates that total news division staffing dropped about 10%, with reductions in non-correspondent staff down at greater rates than that.

And that was before NBC Universal announced plans to cut another 300 jobs in the news division, or about 5%. Many of those, it said, would come from consolidating the operations of its cable channel, MSNBC.

In radio, the situation appears to be one of continuing consolidation. The great majority of stations delivering news (70%) now do so through joint newsrooms, and the situation in those newsrooms looks increasingly complicated. The average number of stations that those centralized newsrooms serve is 3.3, according to a survey for the Radio Television News Directors’ Association. Over a third of news directors reported overseeing five or more stations.

In cable, meanwhile, the picture is mixed. Fox News appears to be investing more in its newsroom (expenses up 11%), but not at a rate that is keeping pace with surging revenues and profits. CNN is just barely keeping up with inflation (expenses up 5%), and MSNBC is cutting.

It is less clear how much of these expenses are going into reporters and producers — newsgathering — and how much is going elsewhere, including into star salaries.

But not all of the electronic media are shrinking.

In local TV, for the latest year for which there are data, 2005, staffing appears to have risen some, to an average of 36.4 people per newsroom, the second-highest level of full-time staff since the survey began in 1993. Those people may be spread across more programs than before, but it is still a small upward trend. But people have more to do. The number of hours of news is at record high (3.8 hours) and more newsrooms are producing news for multiple stations and the Web.

One media sector that continues to grow in several ways is the ethnic press. Staffing here is on the rise, particularly at Hispanic daily newspapers, where the average staff increased from 90 in 2003 to 108 in 2005, some 20%. The trend in Spanish-language television, however, appears to be going the other way, led by cutbacks by NBC at Telemundo.

Online, the details are sometimes hard to pin down. The evidence, however, points to the idea that investment is continuing to grow, something we began to see in earnest a year ago.

It is less clear how much of that is in what journalists would call original newsgathering and how much is on the technical side. But at least one survey from a leading journalism school found that more online managers valued content-related skills like copyediting than technology skills like producing audio and video. That may reflect something of a change. After getting the technical skills into the operations, it may be that newsrooms are now turning to think about creating more content rather than simply importing it.

Yet all these problems are added to the larger picture of shrinking newsrooms. One other new piece of data was released in 2006. The scholars David H. Weaver, G. Cleveland Wilhoit and three other distinguished academicians released The American Journalist in the 21st Century: U.S. News People at the Dawn of a New Millennium. The book is the largest longitudinal study of journalists, dating back to the early 1970s.

The new study found that between June 1992 and November 2002, the number of full-time people working in news in the U.S. workforce declined by roughly 6,000, or about 5%.¹

All evidence suggests that in the four years since, those losses may have significantly accelerated.

Footnotes

1. David H. Weaver, Randal A Bean, Bonnie J. Brownlee, Paul S. Voakes, G. Clevelan Wilhoit, The American Journalist in the 21 st Century: U.S. News People at the Dawn of a New Millennium ( Lawrence Erlbaum Associates: New Jersey) 2007: p. 2

Digital

Even in a tough year, the news industry moved toward digital journalism with new seriousness.

Only two years ago our sense was that traditional media were still hesitating. In addition to the more obvious fears about a drain on resources and the culture clash over new technology, journalists worried that the medium was by nature so immediate and demanding that it tended to threaten two of the qualities the best news people covet —taking the time to verify the news accurately and understand and report in depth.

A year ago, we saw evidence that attitudes had begun to change. One reason was that online activities were one of the few areas that were creating revenue growth, especially for newspapers. Inside the boardroom, that made digital journalism a priority. Inside the newsroom, the Web was coming to be seen as less a threat and more a promise of something that could stem a growing wave of cutbacks and declining audience.

As an internal report at the Los Angeles Times put it in late 2006, “news organizations are experimenting energetically.”¹

Those experiments differ greatly in emphasis and scope, even within media sectors. At the Washington Post, for instance, the site is forming an identity distinct from the print newspaper. According to one report there are 200 full-time Web staff people, and the Web is already contributing 15% of the Post revenue, with 50% in sight.² Our content analysis also found the Post site to be one of the most broadly based and richest in appeal of these we studied.

The Los Angeles Times’s candid internal appraisal of its own site concluded that the paper needed to become far more serious about the Web and indeed make it the primary rather than the secondary goal. “We are Web-stupid,” the report declared.³ Some papers are experimenting with blogs, real-time traffic coverage, localized community sections written by readers, reporters carrying digital cameras and more — almost all in just the last year or so. Yet our content analysis also finds that some papers have yet to act, still mostly using their sites as a morgue for old copy.

The networks in 2005 had already begun to approach the Web as a major opportunity, developing ways to free themselves from the limits of time slot. In 2006, while their efforts were growing, behind the scenes there were more questions. CBS ousted its head of digital, the widely respected Larry Kramer, in favor of someone who is more strictly a business figure, though its Web site appears to be one of the strongest we have studied. MSNBC’s site, while popular, still has been eclipsed in some ways as an innovator. ABC may have the furthest still to go.

In cable, too, there were signs of movement. All three national news channels began to make content available to the third screen, cell phones. Of the three sites, Fox trails rather than leads in online audience, in contrast to its TV audience, and its site in 2006 lagged measurably behind the others in what it offered as well. But it underwent a significant redesign late in the year that according to our analysis made a clear difference. The site, however, is still more a platform for promoting talent than its rivals. For its part, CNN’s site still relies heavily on wire copy. It also features only a few stories that get major treatment. Despite all that, the site attracts 20 million visitors a month.

The new array of Web-only news outlets, meanwhile, reflect a growing diversity in the kind of information offered, the editorial approach, and the features they provide. The aggregators continue to emphasize searchable, up-to-the minute news while still relying on others for the content. Bloggers offer voice and citizen input but have also taken steps in the last year to set their own reporting guidelines. Citizen-based sites, according to our study, have shown some of the most sophisticated experiments in newsgathering and dissemination — embracing original reporting and a wide mix of voices, as well as firm editorial control.

Even the digital laggards apparently began to move in 2006.

Local TV news was among the slowest media, our content assessments found, to make a commitment on the Web. The resources still appear to be relatively small, according to surveys-- an average of just three people working on each Web site. But there are clear signs of movement. More sites are making a profit. More stations are producing their own sites. And the two local TV news sites included in our content analysis evinced more effort than anything we had seen in earlier years.

The magazine industry, too, has begun investing more online. The leader here is Time. The biggest name in newsweeklies remade its Web site and identified a plan to count its audience as a print and online group combined. There are also signs of movement at the other news magazines, but perhaps in directions quite disparate from each other.

If there are conclusions to be drawn, for now we see two. First, there is no one model or formula for news success on the Web. Second, increasingly, sites are moving away from their legacy media, splitting into distinct approaches based on ideas rather than history.

As audiences sort through the options and creators look for economic formulas, that diversity will encourage more experimentation. For those who lack vision and resources, it will also make simple imitation more difficult.

Footnotes

1. The Los Angeles Times Spring Street Project Report, www.innovationsinnewspapers.com

2. Ibid.

3. Ibid

Public Attitudes

About the best that can be said for the public’s view of the press is that the situation is no longer on a steady and general decline.

Americans continue to appreciate the role they expect the press to play, and by some measure that appreciation is even growing.

But when it comes to how the press is fulfilling those responsibilities, the public’s confidence in 2006 according to some indices continued to slip.

And perceptions of bias, and the partisan divide of media, appear to be on the rise.

All that comes, of course, against a background of more than 20 years of growing skepticism about journalists, their companies and the news media as an institution. As we have noted in other reports,since the early 1980s, the public has come to view the news media as less professional, less accurate, less caring, less moral and more inclined to cover up rather than correct mistakes.

The fundamental issue, as we interpreted it in earlier reports, is a disconnection between the public and the press over motive. Journalists see themselves, as Humphrey Bogart put it in the movie “Deadline USA,” as performing “a service for public good.” The public doubts that romantic self-image and thinks journalists are either deluding themselves or lying.

The roots of the disconnection can only be speculated about. The public-opinion data go only so far. But it probably is fair to say that journalists are growing frustrated with the public’s doubt as they struggle against increasingly difficult conditions — lower pay than they might have made in other professions, newsrooms suffering major cutbacks, the buffeting effects of new technology, and depictions in movies and on TV of journalists as exploitative jackals.

The public, in turn, sees a news industry whose corporations increasingly act like other businesses. News outlets in an era of fragmentation seem more prone to produce content designed only to attract a crowd. Alerts of journalistic failures are coming more frequently from politicians, bloggers, mainstream press critics and, with more ways to add their own voice, even citizens themselves. Perhaps most important, with more choices, the public can easily see the limits of what any one news organization is offering.

The structural forces, in other words, may bring with them a new kind of relationship that makes improving the public view of the press difficult.

Sorting through the data from 2006 suggests that, with all this, the public’s view, while skeptical, is nuanced.

The public does appreciate what the press has to do, and in some ways it does so increasingly.

If given a choice, for instance, a growing percentage of Americans would pick press freedom over government censorship. After September 11, a majority leaned the other way (53% to 39%). That number has been reversing to the point that by February 2006 a majority now favored press freedom (56% to 34%).¹

A slim majority of Americans also continue to say they enjoy keeping up with the news, and this number, a key indicator of news consumption, has been stable for years.²

And by a large majority people continued to say in 2006 that they prefer getting news from sources that don’t have a particular point of view — 68% — unchanged from two years earlier. Less than a quarter — 23% — wanted to get the news from a source that shared their point of view.³

But on some key measures of performance, public skepticism is still growing.

The number of Americans with a favorable view of the press, for instance, dropped markedly in 2006, from 59% in February, to 48% in July. The metric can be volatile, but that was still one of the lower marks over the course of a decade.⁴

And in one of the most basic yardsticks of public attitudes, the number of Americans who believe most or all of what news organizations tell them, there were continued declines. Virtually every news outlet saw its number fall in 2006. In a battery that included more than 20 outlets, the only ones that did not decline were Fox News, the Wall Street Journal, people’s local paper, the NewsHour on PBS, People magazine and the National Enquirer.⁵

In contrast with a decade ago, there are no significant distinctions anymore in the basic believability of major national news organizations. About a quarter of Americans believe most television outlets. Less than one in five believe what they read in print. CNN is not really more trusted than Fox, or ABC than NBC. The local paper is not viewed much differently than the New York Times.

And there are signs, despite the appreciation for an independent press, that the perception of bias, even agenda-setting, is a growing part of the concern.

Among those who feel that their daily newspaper has become worse, for instance, the number who blame bias, and particularly liberal bias, has grown from 19% in 1996 to 28% in 2006.⁶

Overall, Republicans express less confidence than Democrats in the credibility of nearly every major news outlet, with the exception of Fox News. Yet that partisan gap is narrowing, and that is because Democrats are beginning to doubt the believability of more news outlets, and their suspicion of bias is growing too.

One big change is that more people now feel they can get what traditional journalism offers from the Internet, and that, too, is a challenge for the press, one that may be accelerating faster than declining trust.

In the end, there is no sense that the public view of the press changed markedly in 2006. Such shifts are almost always evolutionary. But there are reminders in the data of the continuing sense that journalism matters, and continuing doubts about whether it is being practiced in a way people want.

That suggests that allegiances could switch to new outlets fairly quickly. And more competition, as it has for the last two decades, may breed still more skepticism.

Footnotes

1. Pew Research Center for the People and the Pres, “Bush Drag on Republican Midterm Prospects,” February 9 2006

2. Pew Research Center for the People and the Press, “Online Papers Modestly Boost Newspaper Readership,” July 30, 2006

3. Ibid.

4. Ibid.

5. Ibid.

6. Ibid

Conclusion

In the first two years of this report, we sensed the news media in America trapped by the twin phenomena of changing technology and economic success. The former created the need for the news media to change fundamentally. The latter bred conservatism and aversion to risk. The role of the press was changing, yet the companies that controlled the media, insulated by high profits, seemed neither to fully understand nor ready to act boldly.

We sensed that had changed some heading into 2006. Problems had worsened. The direction of audience and advertising was clearer. The industry turned more seriously to new technology.

In 2007, that recognition and change began to take on a more discernible shape. And for many, it was the shape of branding, targeting and diminished ambitions. That may be inevitable. It may even be logical. But it also strikes us that it continues to lack boldness. The new direction has the strengths and weakness of prudence, of consensus.

News is not a corporate product. It was not invented in a laboratory or an R&D department. It evolved out of popular sentiment, out of political movement and out of a human instinct for knowledge and awareness. And its greatest leaps forward came from risk-takers who were often discounted because their vision broke with convention, and because their tastes ran in sometimes contradictory directions, the likes of Ted Turner, or Joseph Pulitzer, or Adolph Ochs.

We have wondered in earlier reports whether the news industry had waited too long, letting too many opportunities slip by, such as offers years ago to buy start-up companies that now are major new-media rivals; or whether consumers will care about the values that the old press embodies, or the brands — such as CBS and the New York Times —that represent those values.

Now, as change accelerates, it is the third question we have posed before that seems most urgent. Does the industry have a vision that is bold enough, and does it have leaders whom journalists and audiences will follow?

The answers, we continue to suspect, will be in the journalism, too, not only in the business strategies that fund it. If the past tells us anything, it’s that the two sides cannot flourish unless they move together.

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Digital Journalism

Intro

By the Project for Excellence in Journalism

The newspaper’s Web site, the internal report began, was now 10 years old. “Its stated strategy was to be an indispensable information retailer,” complete with “news, listings, reviews, databases,” and more.

“This vision is unfulfilled” the Los Angeles Times’s highly anticipated “Spring Street Project” declared in December 2006.

“Latimes.com is virtually invisible inside greater Los Angeles. By some measures, the site is losing traction even faster than the newspaper.”

Why? “Inadequate staffing, creaky technology,” dead links, infrequent updating, lack of interactivity with readers and much, much more, the report concluded. When the paper eliminated most daily stock listings in print, for instance, the Web sites declined to purchase the software that would allow users to track their stock portfolios online.

The list of reasons for the problems amounted to an indictment of bureaucracy at its worst: culture clash, lack of investment, political balkanism, corporate division, out-of-date technology.

The Spring Street Report was the fruit of an extraordinary effort by the Times’s former editor, Dean Baquet. As he clashed with the paper’s owner, the Tribune Company in Chicago, over cutbacks he thought ill considered, Baquet unleashed a team of his best reporters to investigate the future of the Times — in effect turning his newsroom into an R&D unit. If journalism needs to change, the effort implied, journalists should be involved in reinventing it.

To outsiders, the report amounted to an unusually candid internal assessment of a major news operation as it struggles to make the transition to the digital age. Many other news Web sites, the report found in assessing the field generally, were much further along than the Times.

What is the state of digital journalism? What progress are Web sites making to exploit the potential of the Web to go beyond what any one traditional medium might offer? What capacities of the Web are sites developing, and which are they not?

In past years, our report on the State of the News Media offered glimpses by examining a handful of Web sites each year from different media sectors, usually noting the design of the pages and the treatment of top stories.

To go deeper, this year the Project undertook a detailed examination of the structure and features of more than three dozen Web sites from a range of news sources — network, local and cable TV, newspapers, radio, online-only and citizen media.

The goal was first to identify which characteristics news sites were developing online and which they weren’t.

The second was to determine whether Web sites could be classified into groups, into a kind of typology, or whether the field was still too fluid and embryonic.

Among the findings:

Web sites have developed beyond their root media. In character, many news sites now cut across medium, history, audience size and editorial structure. The New York Times Web site, for instance, has different strengths and a noticeably different character from that of the Washington Post. The Web site of CBS News is notably different in its strengths from ABC’s. Some citizen media sites have distinct editorial processes and standards.

News sites seem to be exploiting two areas of the Web most of all: editorial branding, or establishing a distinctive identity through original content and a distinct editorial process; and the potential for users to customize information, particularly through mobile delivery of it. More sites earned high marks for promoting original content and unique brand than any other feature we studied. Indeed, the notion that the Web is dominated by yesterday’s newspapers, wire copy, opinion and rumor is increasingly an oversimplification.

Sites have done the least to tap the Web’s potential for depth — to enrich coverage by offering links to original documents, background material, additional coverage and more. That suggests that putting things into context, or making sense of the information available, is an area Web journalists still need to work on. This deficiency may expose the tension between old-style journalism, which sent reporters out to write stories, and technology-based aggregation, which gathers those stories and links via computer algorithm. Building real depth into coverage probably requires people to weave relevant sources of information together and to help consumers navigate and go deeper by themselves.

Digital journalism has also not fully exploited the potential for users to participate by commenting and adding their own voice to the information. The notion that the Web is a place for people to be “prosumers,” simultaneously consuming and producing information in a kind of conversation, is at this point probably something of an exaggeration.

Only a few sites excel at multiple areas of the Web’s potential. Only four of those we analyzed earned top marks in even three of the five content categories studied. Most excelled at only one or two.

To make this more useful, we have created an interactive area where users can probe our findings, look closely at where sites ranked in certain categories and compare sites across the categories. We also discuss the broad findings and offer profiles of each site.

The web is constantly evolving and Web sites frequently changing. Even as we write this report several sites studied have gone through changes, and many more certainly will do so during the course of the next year. As such, this study is not meant so much as a long-standing portrait of what each site has to offer, but more a key tool to the landscape of options. The topography is diverse. Our hope is this tool will help users understand the Web better and news outlets better define what they have developed so far and where they might want to invest further.

About the Study

The study closely examined 38 different news Web sites in September 2006 and again in February 2007. The sites were chosen from a mix of their root-based media (e.g., newspapers, radio, cable) including a variety of online-only outlets.

We examined each site according to more than 60 different measurable features or capabilities from six different areas:

The level of customizability of content
The degree to which users could participate in producing content
The degree to which sites offered content in different media formats
The degree to which sites exploited the potential for depth on a subject
The extent to which a site’s own editorial standards, content and control were the brand being promoted
The nature and level of revenue streams for the site

After completing the site studies, we then tallied the scores for each site and ranked them within each category. For a full description of the methodology and the sites studied please see the methodology section of this report.

Findings

News Web sites still defy hard classification. No formula or set of models has set in. That, indeed, constitutes one of the findings of this study.

The universe is changing so rapidly that of the 38 Web sites examined, at least a quarter were either thoroughly redesigned or made noticeable changes between September 2006 and February 2007, usually to make them more user-centric.

The field is marked by experimentation, and in some cases noisy crowding.

A few sites even now are still largely “shovel ware,” an online morgue for the content their owners produced in another medium.

Other sites are made up of a few packages for top stories and then largely wire copy after that.

Even so, we did not find sites that scored poorly across the board.

On the other hand, we found no sites that excelled at everything. That may reflect the fact that the Web is so rich in possibilities that sites need to make choices. The greater the focus on speed and immediacy, the harder it is to take the time to build depth into coverage — multiple links in story packages to background material, documents, full text of interviews, archives and more.

Indeed, every site studied except two scored in the lowest tier for at least one of the five areas of content we examined. And no site scored in one of the lowest two tiers for everything.

What qualities of the Web’s potential are being exploited most?

1. User Customization

The Web allows for a nearly infinite array of style and content, a level of choice that can overwhelm. Hence a growing premium is now placed on the degree to which users can customize content to their interests, pre-select the stories that come their way or the form they come in. We called this User Customization.

In general, there are two types of customization. People can tailor the design of the page itself (Web site customization). Or they can choose to have different kinds of content delivered to them from the page, including RSS (Real Simple Syndication), podcasts, mobile phone delivery and more (delivery customization). We examined sites for both.

Allowing visitors the ability to pick and choose what they were interested in or tailor its delivery appears to be an effort the news Web sites in our sample have focused intently on. After branding or editorial control, a high degree of customization of material was the second-most-developed potential we found in online journalism. Twelve of the 38 sites were highly customizable. (To be so designated, they possessed at least five of the six elements we examined).

There was little pattern about what kinds of sites fit into this grouping. Their creators ranged from online-only entities like Global Voices and OhmyNews International to the weekly magazine the Economist to NPR to the local station King 5 TV, in Seattle.

Some kinds of customizability, moreover, were more popular than others. The move now appears to be toward making content come to the user. The features the sites were most likely to offer were multiple RSS feeds, usually prominently displayed and podcast options (though sometimes not as prominently displayed). And many of the site upgrades in early 2007 had to do with adding some kind of mobile phone delivery.

Sites also tended to emphasize advanced methods for finding a specific news story.

Interestingly, one feature more likely to be absent, even in these sites that scored well in customizing, was the option to customize the homepage story layout. About half of the highly customizable sites (and half of the sites overall) did not offer any kind of flexibility here.

Apparently, for now, the ability to have content sent to you, or to find what you want, is taking precedence over letting people make a page theirs.

On the other side of the spectrum, just three sites fell into the lowest tier of customizability — offering nothing more than a simple keyword search. Visitors to Benicia.com (the Web-based local “newspaper” in Northern California), to theweekmagazine.com (the Web site of the latest weekly news magazine phenomenon), and to sfbg.com, the pugnacious alternative weekly of San Francisco Bay, had to accept it as it came to them.

No other content category had so many sites scoring so well.

2. User Participation

One of the chief appeals of the Web early on was the notion that online media would become a dialogue, not a lecture, in which the user could speak for himself or herself. That is one reason Time magazine made everyone in 2006 the Person of the Year (a feat it accomplished by showing a small mirror on the cover).

Potentially, the Web offers many ways to accommodate participation — everything from a simple e-mail link to having a story’s author post user content as a part of the story mix.

What we found in the sites studied is that the participatory nature of the Web is more theoretical than a virtue in full bloom.

We examined 10 different features that broke participation into two different types. One was the extent to which people could express their Individual Voice. That included offering e-mail, writing blogs, commenting on stories, rating them or entering a live discussion, or even taking an online vote on a question. The other was the extent to which users were heard from in a site through a Group Voice, such as by tracking of the most e-mailed or most viewed stories and then featuring those lists on a site.

Just three sites, the blog Daily Kos, the citizen-based site called Digg and AOL News, possessed enough of those features to earn top marks for participation.

On the other hand, a dozen sites studied earned the lowest marks, with no user content, no live discussions, rating of news stories, or compilation of the most viewed or e-mailed stories of the day. On the bulk of those sites, visitors could not even e-mail the author of a news story to comment or raise questions. Another 10 sites earned the second-lowest marks in participation.

Most news sites, whether stemming from traditional media outlets or not, place a high premium on reported news stories and keep control over their selection (and sometimes creation).

Visitors are sometimes invited to express themselves by responding to the stories through user comments or e-mails to the author of a bylined story. But those features were not standard, even among sites that scored at the higher levels for participation.

What the higher-scoring sites were more uniform on was tracking the Group Voice — a list of most viewed, most e-mailed or most linked stories. All the sites in the top two tiers for participation had at least one such list that users could access, and some offered all three. In the lowest tier for participation, however, this option was completely absent.

3. Use of MultiMedia

The third major area of Internet potential is the fact that the platform works, at least theoretically, for all media formats — video, audio and text. How much are sites exploiting that? Are most sites still expressions of their own roots, with TV sites more video-oriented but not as rich with text, and print sites the opposite? Is there any pattern to what kinds of sites are doing more here than others?

To get answers, we catalogued all the content on a homepage (as text there or linked to items) for 11 different media options. We then noted the percent of the content devoted to each of these media forms to get a sense of which type the site was emphasizing.

What we found was that the multimedia potential of the Web is also not as developed on many sites as people might imagine. Only six of the 38 sites earned top marks for offering a rich range of media formats.

And nearly half the sites (17) earned the lowest marks. For those, more than 75% of their content was just narrative text — “Still Reading the News” sites.

The ones in that last group were not all from traditional print outlets. They ranged from the news pages of the aggregators Google and Yahoo, to the blog Michelle Malkin, to the citizen-based sites Digg and OhmyNews International to newspaper sites like the San Francisco Bay Guardian and the New York Times. Only one — PBS’s Online NewsHour — offered less than half the content as narrative.

For those sites with at least a quarter of the content something other than text, what kind of media form were they using? For most, the next-biggest medium used was an older one, still photos. Nearly a quarter of the sites filled at least 20% of their homepages with pictures.

And how many sites were really multi media, or used at least five different media in addition to text and still photo? Just six.

Most in that group were TV-based sites — ABC, CBS, BBC, Fox News — but also included Washingtonpost.com and the site of a local Washington radio station, WTOP. The media used tended to be slide shows, interactive graphics, and live streaming video. But none of those accounted for more than 4% of the overall content on a site.

In short, the Web, for now, is still largely dominated by the content that fills newspapers — text and still images.

4. Site Depth

Another potential of the Web is its infinite depth. It can to link to past reports, biographies or referenced documents, graphically display certain elements, offer analysis and bring in outside insights.

Depth is also in some ways the hardest potential to measure. A related link may add important information or insight to the main report or it may mostly repeat what was already said. To get a sense, at least, of the extent to which news Web sites try to broaden their coverage, we looked at four different features: how frequency a site was updated, the number of related story links it offered with its lead story, the use of archive material, and the use of links inside news stories.

As a rule, sites scored lowest in depth than any other area studied. Nearly half (18) earned the lowest marks for depth, another 16 fell in the next-lowest tier, and only three earned top marks.

And, as noted above, one site was unique in this category: Google. No other even came near Google’s average of 900+ related links attached to the lead news story. And every headline down the page gets this treatment.¹ In a sense, Google defines an extreme, but a powerful potential of the Web.

Visitors could spend the good part of a day just following the links for a single news story. If someone were to actually do that, though, the value might be disappointing. With no editing process, related stories automatically pop up from all different outlets. In some cases the reports are nearly identical wire stories carried in different outlets. In other cases, a later link is to a report that was written before the main story and thus has old or incomplete information. All the stories are in narrative form with occasional photos attached. (As for links inside the stories, Google was not scored here since that content is not their own.)

After Google, there was quite a drop-off. The other two sites at the high end were Global Voices and CBSnews.com, both of which had more than 10 related links, as well as links to archive information and frequent updating. Global Voices also embedded links into the news stories themselves, while CBSnews.com did not. Many sites (10 out of 38) still treat even the lead stories as stand-alone reports, without even one related link as normal practice.

Inside the content itself, news sites were even less likely to offer consumers links to additional information, either on their own site or from another place. More than half (17) contained no links inside their top 4 stories.

5. Editorial Branding

More than any other quality, sites built themselves around the idea that their organization’s standards, judgment, and professionalism are the core of the site’s brand.

In other words, the notion that the Web has no standards, no professional rules of conduct or editing, is not true when it comes to sites connected to traditional news organizations, to many blog sites studied, or to many citizen-media sites.

Critical to the notion of branding in our study was whether a site was promoting its organization’s particular content, had discernible editorial standards and promoted its staff with the use of bylines.

We looked at three distinct elements:

The range of sources and originality of the content
The level of staff control over the editorial process
The use of bylines in top stories

We found that those values still dominate, and that is true even of some of the most innovative and user-driven sites we studied.

Across the three different measures nearly two-thirds of the sites studied (24) earned top marks for emphasizing their own brand and standards. That is more than any other content area that sites emphasized.

And all but five of the sites studied had some in-house editorial process they exercised to select stories. That was sometimes combined with user input like story ratings or a list of the most-linked-to stories, but staff people made daily decisions about what to post.

Even the fairly sophisticated citizen news site OhmyNews International, with 100% “user” content, has a heavy editing process of the content that comes in from approved “contributors” from around the world. The same was true of Global Voices, another citizen-media site.

Some of the sites have no editorial branding of their own and instead rely on the established brand identity of other outlets that they present second hand. At Google, AOL News or Topix.net, for example, most of the content comes from establishment news organizations.

The majority of sites studied did offer some content through their own brand name. The more traditionally rooted sites usually also made some use of wire reports, though the mix of original to wire varied greatly. Some sites, like those of MSNBC and USA Today, relied much more on wire than their own work. Others, like the New York Times and BBC News, primarily featured staff reports. And, as mentioned above, some of the newer news options contained the greatest degree of original work, along with stringent editorial practices.

6. Revenue Streams

Increasingly, a fundamental question is whether the Web can subsidize journalism, and at what level? Sites have struggled with getting people to pay for content. There is growing concern about how ads work online. Are too many ads counterproductive? There are different kinds of advertising, not to mention premium areas of paid content and registration which is free but often sends consumer information to the site and to advertisers.

To understand all this, we looked at three potential revenue streams. First, did the sites include ads, what kind of ads, and how numerous were they? Next, what did the site demand of the user: payment for certain content or registration, or could visitors roam free, other than leaving their digital fingerprint?

On the days we analyzed, the number of ads that greeted a visitor varied widely, though nearly all the sites studied had some ads on the homepage. We also found that the number of ads on a site was the element that varied the most from September 2006 to February 2007, sometimes higher and sometimes lower. Perhaps that speaks to the still experimental nature of economic models online. (Our scores for the sites reflect the February download, except when the variety seemed to be simple day-to-day variance rather than policy changes in which case we took an average of the figures.)

The only site that was completely ad-free was the news page of the revenue giant Google. The aggregator’s main search page — and the company as a whole — is largely structured around advertising, but for now anyway it has kept the news pages ad-free. The other aggregator studied, Yahoo, began placing some ads on the main news page in the fall of 2006. Even the two government-funded sites —pbsnews.org/newshour and news.bbc.co.uk — contained ads from their corporate sponsors. As logo links to the corporate Web sites, though, those ads were much less intrusive than those found on many other sites.

All in all, the more traditionally rooted sites were at the top of the pack for total ads on the homepage. The Des Moines Register led with 25 (nearly all of which were external as opposed to self-promotional), followed by the New York Times, Fox News and the Washington Post. Two blogs, Little Green Footballs and Daily Kos, had mid-to-high levels of ads, as did WTOP.com, the Web site of the local Washington radio station. The site with the greatest display of self-promotional ads was CBSNews.com, with an average of 14 against just 3 from outside companies.

There are still some places where users can get the news without first giving away their own personal diary. In fact, there seem to be quite a few places. Close to half the sites studied had no registration process (not even a voluntary one) and offered all content on the site free, including all archive content. None of the sites required registration at the outset, though many prompted you to on a voluntary basis.

Premium content, the kind requiring payment for specific areas, is also rare, with just four sites featuring some of it on the homepage. Even a bit more surprisingly, the practice of charging for content that is more than a week or two old is also not widespread. On 32 of the 38 sites, users could search and access more than a month’s worth of old content at no charge. One site, Economist.com, charges for all archive material, while the others offer the first week or two for free and then impose a fee.

Yet, most sites are limited to ads, user registration, or some combination of both.

The least common economic group was sites with no user requirements and less than five ads on the homepage. Six sites fit this bill and ranged in character from a publicly funded site to an aggregator to a local newspaper.

Consumers have more choice if they are willing to click through a few more ads in order to escape registration or fees. Eleven sites had no user requirements but between 6 and 10 ads on the homepage. But alas, as organizations seek to figure out how to succeed financially online, revenue streams will be an area likely to change, and will be worth watching closely.

News Web Site Groupings

Our study led us to conclude that it is probably too early in the history of news Web sites to develop a firm typology, or set of classifications, for them. Also, the study included 38 sites, a number that is hardly definitive. Still, we offer five tentative groupings.

High Achievers

Only a few of the sites studied excelled across more than two of the content areas we studied. They might be called High Achievers, sites that scored in the highest possible tier for at least three of the five content areas.

Only four of the sites qualified, and they had little in common beyond the breadth of what they offered. They were a network TV site (CBS), a newspaper (Washington Post), a British television and radio operation (BBC) and an international citizen media site (Global Voices).

And what did these sites emphasize? All of them scored highly for the originality of their content. All of them also scored highly for the extent to which they allowed users to customize the content, to make the sites their own or make the content mobile. None of them, interestingly, scored particularly well at allowing users to participate. Only two, CBS News and the Washington Post, involved a lot of multimedia components.

The Original Brand Crowd

Another grouping would be those sites that promote their own original content above all. Call them The Original Brand Crowd. In every case, those sites scored in the highest range for the degree to which they controlled and promoted their content or editorial judgment. What that content was varied widely in style. The sites ranged from a number of daily newspapers, a public television station (the NewsHour on PBS), a news service, (Reuters), and in several cases blogs. The editorial judgment and standards here may vary widely. So may, in the judgment of some, the quality. Yet it was their judgment, their approach, they emphasized most.

Some of those sites were offering little more than what they had published in their newspaper, so-called shovel ware (such as The Week). Others, such as the New York Times, offered a good deal of content that was updated often and that had not yet appeared anywhere else. For all of them, though, their appeal, in the end, is what their writers have to say, and their standards, their practices, their content. This was also the largest category of sites.

In all, 16 of the 38 sites studied fell into this group. The 16 were the Web sites of the New York Times, the Chicago Sun Times, the New York Post, the Des Moines Register, the Economist, NewsHour on PBS, the Boston Phoenix, Reuters, Salon, the San Francisco Bay Guardian, Little Green Footballs, the blog site Michelle Malkin, The Week, the online magazine Salon, Crooks and Liars, a blog that features video, and the citizen-media site ohmyNews International.

Us and You

A third grouping of sites involves those that earned their highest scores (and perhaps were building their appeal) around a combination of two categories: the branding of their content and the ability of users to interact with it: the Us and You sites.

Many of them were just as strong as The Original Content Crowd in producing and promoting their own brand standards for the news. But these sites have also put a major emphasis on allowing users to do more. In most cases, that meant offering users the ability to customize the material.

Some venerable journalism names fit this grouping. What places them here is their willingness to give up agenda-setting and let users decide what they consider important. These include Time magazine and National Public Radio, the online-only site Slate, a local TV station (King5 TV in Seattle) and Daily Kos, a liberal political blog.

Jacks Of All Trades

The second-largest number of sites of those studied form a group that does not excel at one thing but tried to manage most or all of the categories. They may produce some original content, but don’t stand out for doing so. They received the lowest possible grade, evincing little or no effort, in no more than one category. They are, in other words, demonstrating skills across the range of Web potential.

Six of our three dozen sites fell into in this grouping: Yahoo, USA Today, CBS 11 TV, in Dallas, MSNBC, CNN, and Crooks and Liars. Interestingly, these included three of the four top Web sites in overall traffic (Yahoo, MSNBC and CNN).

User-Centric

A fifth grouping of the sites studied includes those that earned their higher marks or put most emphasis on letting the user control the material, and thus might be called User-Centric. That could mean either letting the user customize the material or interact with it directly by producing material or commenting on it. The sites scored higher in those areas than in creating material. Six sites fit here. Three scored well in both participation and customization: Digg, a site where users submit content and ranks stories; Topix, which aggregates local and world news stories on one site; and AOL News. Three others scored their highest marks for offering multi-media content and then allowing people to customize that: Fox News, WTOP, and Benicia, a local news site in Benicia Calif., which relies heavily on bloggers.

Site Profiles

By the Project for Excellence in Journalism

ABC News (www.abcnews.com)

The Web site of ABC News was redesigned in late 2004.

A new site is expected later this year, perhaps as soon as spring.

But until it arrives, the Web identity of ABC News reflects the strategic thinking of the network for the last two years.

ABC’s Web team paid particular attention to the most popular television Web sites, CNN.com and MSNBC.com, and sought to “broaden its online initiatives past the familiar narrowband Web,” according to one of the key designers, Mike Davidson.

The designers built in more video, developed more wireless initiatives, and began offering RSS feeds. The site also launched ABCNewsNow, which it claimed was the globe’s first 24-hour online video feed.¹

An analysis of ABCNews.com also suggests that the site places the greatest emphasis on using multiple forms of digital content, and at the same time, promoting the ABC brand. Indeed it stands out as the only site among the 38 studied to earn the highest scores on multimedia and branding but on nothing else.

The site puts less emphasis on the depth of its content, it was in the bottom tier in that category.

One of the most noticeable things about ABCNews.com is its layout. Its three-column format is set against a white background with one dominant photo — a slide-show image that cycles through five top stories — as well as a list of headlines. All of that lets the viewer know there is a lot available without seeming overwhelming.

The key to the site’s information-rich-but-clean-to-the-eye look may be the simple color scheme. The site is basically black and white and blue all over, with small red callouts for “video” or “webcast.” That’s important on a site where the first screen offers 16 clickable news links and headlines.

As with ABCNews.com, only half the content is narrative. A mix of six other media forms make up the rest of the content, putting it in the highest tier for its use of multimedia forms. Nearly a quarter of the content is in video form, including a 15-minute “World News Webcast,” designed with a younger audience in mind. The webcast offers a lineup and format different from those on the traditional evening newscast and is first available to users live at 3 p.m. Eastern Time. The site also makes use of audio, podcasts, poll data, photos and more slide shows than any other site studied.

Executive producer Jon Banner said of the site: “What it has become is much more of a broadcast aimed at people who use the Web and who are much more Web-savvy than people who watch the broadcast. You still get a lot of things that are on the broadcast every evening, but they’re done in a much more Web-friendly style.”²

To cater to the user, the site has also taken steps to make its news content more portable. All the network news sites now offer podcasts or “vodcasts,” but ABC News vodcasts are consistently among those most frequently downloaded on Apple’s iTunes. In September, for example, there were 5.2 million downloads of the “World News Webcast,” Reuters reported.³

On the homepage itself, though, there is less customization. There are no options for the user to adjust the layout, and the search is based only on simple key words. Over all, then, the site fell in the mid-to-high-tier ranking for customization.

What exactly is behind all those headlines on this site? As with the other networks, ABC placed heavy weight on the originality of and control over its content. Beyond the World News Tonight vodcast, the content relies more heavily on outside sources. The featured stories that appear in the center of the homepage slide show are always from ABCNews.com itself, in their print and video forms. But the print stories that appear under “Top Headlines” and “Hot Topics” are FROM AP or Reuters. In fact, that’s true of the vast majority of the print copy that appears on the site besides the pieces in the featured-stories box.

There are a few exceptions. Correspondent Brian Ross and his investigative team have space on the homepage — “Brian Ross Investigates” — with original content. And there is a section on the page about half-way down that features “Blogs and Opinion” with original content.

ABCNews.com has yet to make much use of the ability to link several news reports together and offer coverage of one event in multiple media forms. The lead story tended to have just one additional report listed as a link. And most stories themselves contain no embedded links offering additional information such as biographies of sources or original documents.

The user-generated content, in the form of narrative, photos or videos, has presented the site with some advantages and challenges.

In 2006, after first breaking the story on the so-called page scandal involving the Florida Congressman Mark Foley, a blog on the site received even more messages from pages providing “even more salacious messages,” according to Mark Glaser of PBS.⁴ ABC, however, didn’t just post the material; it called Foley’s office and asked people there to verify the instant-message postings.

The site scored in the middle-to-low tier on user participation. Individuals can usually e-mail the author of a news report, but cannot post comments for others to see, or rate the story. But what stands out here is the site’s use of user-generated content. There is a clear place for users to submit stories, such as their own reports from breaking-news locales, some of which appear as a part of the homepage layout.

Finally, the ads on the site are largely self-promotional, which in part led to its sitting in the mid-to-low tier for revenue stream. The top banner ad is always related to ABC and/or Disney products, and ads for ABC news programs appear up and down the page. There are only two true outside ad spaces on the page, a small box under the topic navigation box and a long one over the page header. There is no registration process, though there is some premium content that users can pay for if they choose. All archived material remains free.

AOL News (www.aol.com)

With its modular design that places everything in boxes and its range of sources AOL.com’s news site seems focused on telling users what everyone else thinks is news. This is a not an aggregator site that is focused on combing through sites to put together a kind of uber news page. It is rather a site that seems content to mine the wires, the big broadcasters and prominent print outlets for a snapshot of the days news viewed through different prisms. Most of the pages “top news” comes from the news wires but further down the page are boxes for AOL partners – the New York Times, USA Today, CNN, Wall Street Journal and CBS News – each with three headlines that take users to those pages. Video links work the same way on the page, listed by outlet.

This approach had pluses and minuses in our site inventory.

AOL News scored high in our participation category – in the first tier – for giving viewers several ways to interact with the site. There was a user blog, a page with stories generated by users and chances for users to comment on stories. Authors could also be emailed in some cases.

The site was also fairly customizable – ranking in the second tier in that category. Users could modify the front page and the site offered multiple RSS feeds and an advanced search option.

AOL News scored in the third tier on multimedia. While there are video links here, the site on its face is mostly text driven with more than 70% of the home page content consisting of narrative and narrative links. It also finished in the third tier on depth. While the site often linked stories together for packages that give readers a the broader context of issues, the site was hurt by not updating as much as others. And as one might expect from a site that simply gathers content from elsewhere on the Web, the site scored in the bottom tier on branding.

It doesn’t have a strong revenue stream either, sitting in the third tier in that area with only about a half-dozen ads in the site.

In terms of content, the news on AOL may not be organized into a comprehensive page, but there is clearly a lot here. Between the wires, news outlets, blogs and “citizen media” links here, users can see the day’s events through a lot of different lenses. And the combination of human editing (which the site clearly uses on its “Top Story” and the running headlines from the wires and other outlets on the rest of the site makes for a real mix of news. The site’s design may be a drawback as well. The site can feel like looking at a wall of front pages. All those top headlines from various outlets feels in some ways like the site is missing a page two.

BBC News (www.bbc.co.uk)

The Web site for the British Broadcasting Channel is one of the more advanced that we came across. Its look is that of a traditional site, designed around the news of the hour-- with lead headlines on a range of topics, followed by video and audio reports. Its offerings, though, are significantly more complex. It scored in the highest tier for at least three out of six categories (one of just four sites to do so). And, the area where it scored in the lowest tier—revenue streams—may be one that users would welcome since it means fewer ads to navigate.

The site placed the most emphasis on customization, use of multi media forms and editorial branding. Users of the site can tailor the home page layout each time they visit (though the selections are not saved for repeat visits) and can access the specific news items through advanced search techniques. They can also have the news come to them. The site features multiple RSS feeds, podcast options and even mobile delivery.

The BBC News also makes more use than most of the multimedia forms the web allows. On the days we visited the site, news items listed on the home page came in seven different media formats, including video, audio, live streams, podcasts, interactive graphics and more.

When it comes to the editorial branding, the BBC name takes high priority. All content comes directly from the BBC itself—without even wire service supplements. And all news stories are bylined.

The ability for users to participate—to somehow add their voice to the mix—is more evident here than on most of the 38 sites we examined. While most sites fell on the lower end of the spectrum, BBC News scored in the second tier. Through a section called “Have Your Say,” linked to from the left-hand column of the home page, users can submit their own photos and video and view selected submissions from others. Also on this page, visitors can email in their thoughts on a number of daily topics—some of which continuously “crawl” across the top of the landing page. Specific news stories also have links at the bottom where users can send in comments. Group voice is displayed through lists of the most viewed and most emailed stories of the hour.

The BBC news site did less, scoring in the third tier, for making use of the potential depth of the web. Editors here have chosen to forgo the ability to place links inside stories to additional information about the newsmakers or to original documents. What they do offer instead are links to other related news stories they wrote as well. The individual story is still king here.

As a government funded entity, the area where BBC News scored the lowest—revenue streams—comes as little surprise. Users can dive into the content right away. There is no registration process at all, just one small self-promotional ad on the home page, and all the content is free—including all archive content.

Benicia News (www.benicianews.com)

It is unlikely that Benicianews.com will win any awards for Web design, at least with its current layout, but slick looks and clean lines are not what the site is about. It is rather something of a rarity on the Web. It is a completely online local “newspaper” for Benicia California, a small community in the Northern part of the state, not far from Oakland, that is made up of stories aggregated from around the Web and from citizen journalists.

Visually the site is laid out in three columns, a narrow navigation column on the left, a wide one that contains content in the middle and another narrow column on the right that holds ads. There are few photos on the page. And its overall look – from the small logo in the top left with a dog holding a newspaper jumping through a computer screen to the text that appears in many different sizes – gives the site something of a homemade feel.

That look, however, is not in contrast with the site’s larger mission. The top 10 stories on the page all come under the “Citizen Journalism” header, with the top three containing teaser text. These pieces were all submitted by users. Under that comes a broader “News From The Web” header with 10 more stories – all of them culled from online news sites based in the area (like the Contra Costa Times and San Jose Mercury News sites). Under that are a bunch of category headers – News, Education, Cartoons – that may or may not have any headlines with them.

The site did not score well in many of our inventory categories. It was in last tier in customization. It offered users no way to modify the home page no RSS feeds and no podcasts. It was also in the bottom tier on multimedia. On the day we examined the site it not only lacked video and audio links – which is generally the case – there were also no photos.

Its depth score was also in the bottom tier, hurt a great deal by the few updates on the site (some stories were on the front page for days) and the lack of an archive. And it sat in the lowest tier on branding. The site’s staff editing helped its score, but the amount of material from outside hurt it. It did slightly better on revenue streams, the third tier. The 11 ads on the page were more than some sites offered, but there was no fee content or fee archive.

As one might imagine with a site so dependent of citizen journalism, Benicia News did better on user participation, where it sat in the second tier. There is obviously a lot of user content here and users can email story authors. It didn’t score higher because it lacked thing like interactive polls and online discussions.

This site speaks to the strengths and weaknesses of citizen journalism. Topics are extremely varied – from personal experiences to the opening of new parks – and users are “empowered.” But they don’t seem to be empowered that often. Perhaps the most surprising thing about the content on Benicia News is how static it is. Stories can sit in the top two or three for weeks at a time.

Boston Phoenix (www.thephoenix.com)

The website of the respected 40 year-old alternative news weekly, Boston Phoenix, is still in the early stages of Web development. It is a lively site, with bright photos and language clearly aimed at younger, culturally active Bostonians. Even the top news item is constantly on the move as a handful of headlines and photos rotate through the lead space on the page.

Despite all that, however, the site does little to take advantage of all the Web offers. It scored in the lowest tier in three categories, the second lowest in two and the highest in just one.

Its high spot lay in promoting its own brand name. All content is original, bylined material by Phoenix staff. The news stories themselves are in the free-spirited tone of the print version, with headlines like “The who behind What” and “Of pols and pop culture.” Beyond the headlines are sections on dining, movies, arts, a highlighted Reader Poll on the Best of 2007 and other cultural areas.

This reliance on staff reports impacts another area—depth. The site is largely built around individual stories. What’s more, the print product is weekly, not set-up for hourly or even daily news reports. This carries through to the Web site as well, which scored in the low-mid tier here. The site is not about news of the minute. On the days we visited, much of the content was nearly a week old. Only the top headlines were newer and even several of those were three-days old. There are no links embedded into articles and only on rare occasion a related, secondary story attached to a headline. The site is officially updated every six hours or so, but again, only for a few choice headlines.

The media forms have moved slightly beyond those of the print version, but not by much. More than 70% of the home page content (all links other than those to landing pages) is narrative with accompanying still photos accounting for another 15%. Beyond that, users can find a section of video stories—many of which are several days old—and some use of interactive graphics.

Boston Phoenix also does little to let its audience customize the news to their tastes. The home page comes only as is, the search is simple key word, and the only alternative delivery mode available is RSS. User participation is just as scarce. The only options we found here were the ancient mode of emailing the author as well as a way to post comments to a story.

Even this low-tech product though has appeal. Visitors can access all this personality driven content without any kind of registration or fees. And, the number of ads in on the low side—an average of just seven on the home page—granted they are quite large, colorful and pretty hard to miss.

CBS 11 TV (www.cbs11tv.com)

The Web site of the local CBS affiliate in Dallas-Forth Worth also stood out among local TV sites for the its web offerings. CBS11tv.com placed highest emphasis on customization and on offering content in different media forms. It also scored in the mid high range for economics, or the level of developing revenue streams.

The site earned lower marks for the depth of its offering and for giving users a chance to participate in the content.

The homepage’s upper banner features local weather, traffic and a search tool, which is unusual, because most sites feature a banner advertisement in that prime homepage property. Below the banner, the Web site usually calls attention to its lead story with a large headline and picture, often packaged with a video or another multimedia component. Following the lead story are 10 links to other top stories, a featured slide show, most popular videos, and a poll of some sort. The right- and left-hand columns of the homepage feature categories of information (such as “local news,” “politics,” and “health”), more videos, local services like yellow pages, stock quotes and more.

The site scored in the mid-high range in multimedia. The bulk of the content is a mix of narrative, still photos and videos (roughly 90%) with some use of slide shows, polls and interactive graphics. And, while just a small portion of the content comes in these last three forms, the fact that the site uses them at all increases its rank here.

The site has chosen a mix of -options for users to customize the content, ultimately scoring it in the mid-high level. The home page comes as is, but with an advanced search option for archived stories. And, it has leapt over podcasts (not offering them at all) and gone directly to an option for mobile delivery.

One thing it seems to have almost no interest in at the moment is offering participation options to the user. There are no user forums, comments or polls. There is no way to email the correspondent of a report, nor are there lists of the most viewed or emailed stories. There is a section at the bottom of the site that asks readers, “Got an Idea for a Story?” The link, however, only prompts an e-mail window.

The site also does less than others, to promote its own brand. A slightly obscured category in the left-hand column is a link called “The Investigators,” which sends a user to CBS11 original reporting, special reports and consumer news. The work of three reporters is highlighted here, along with a picture. Outside of the Investigators section, much of the content on the site comes from the Associated Press. That is true even for some local news stories, though to a lesser extent than for national and international stories.

One of the more unusual content destinations on the site is a section called “Inspiring People,” which presents a gallery of videos about acts of kindness and heroism. The site also offers three lifestyle sections (“beauty & style,” “family,” and “new baby”) aimed at niche audiences, primarily girls and young women.

Most content on the site is free, though users do need to pay for material that is more than a month old. Their biggest hope for revenue, though, seems to come in the advertising realm. We found an average of 15 ads on the homepage, the bulk of which were not tied to any kind of self-promotion.

CBS News (www.cbsnews.com)

Over the past few years, CBS News has attracted the most buzz among the networks for its Web site. After hiring Larry Kramer, who founded MarketWatch.com, as head of CBS Digital in March 2005, it announced a ambitious plan in which a revamped Web site would “bypass” cable news by providing news to the consumer anytime, anywhere.

In 2005, the CBS News site was the first to allow users to build their own newscasts, and promised to put its entire archive of news video online. Its unique blog, Public Eye, gave readers a look at the inner workings of the editorial process that produced the evening newscast, a move that offered much-needed transparency after the CBS News’s Memogate affair tarnished its credibility in late 2004.

Heading into 2007, what is going on? The changes have given way to more changes. Kramer was ousted in November of 2006 and replaced by Quincy Smith, a 35-year-old venture capitalist, who said he planned to be "much more proactive making acquisitions across the board,” according to an interview with MarketWatch.⁵ Possible targets include social networking sites, the “hot” sites in 2006 and 2007.

Whether that emphasis will move resources away from the news site is unclear, but for now, CBSNews.com remains one of the Web’s most diverse and robust news sites. In our measurements, indeed, it ranked along with only three others — the BBC, the Washington Post and a citizen media site called Global Voices, for its breadth and depth. In our loose grouping, it was one of our High Achievers.

Upon opening the homepage, it is clear there is a lot going on. There is a slide show with rotating stories, a lead story in the center of the page, a list of “Top Stories” next to that, and a large advertisement. Above all that are links to streaming “Live Video,” E-mail alerts, RSS feeds, Podcasts, and more.

All of this quickly gives users a sense of exactly how much is available and gives them access to it all quickly. With that comes a busier feel than at some other sites, perhaps a bit too busy for some.

Over all, CBSNews.com scored in the top tier in three out of five content categories, one of only two sites to do so of all 38 studied.

The Web site is highly customizable for the user and scored in the top tier in that category with advanced searching, multiple podcast options, mobile phone delivery and several different RSS feeds. The one option it does not give users is the ability to tailor the homepage to their own interests.

The site also scored in the top tier for its mix of multimedia. It offered nearly every kind of multimedia option we had on our checklist. Only about half the content on its homepage was narrative text, with the rest a mix of video, photos, audio, live discussion, polls, slide shows and interactive graphics.

The site was also one of only three studied to score at the high end when it came to the depth of the content. The site updates at least once every 20 minutes and makes significant use of the ability online to “package” news by offering myriad related stories under the lead headline — an average of 18 in our study.

Some of those stories have only tangential links to the stories they are tied to. For instance, on January 8, the site’s homepage listed the headline “Genocide Charges Against Saddam Dropped” in its “Top Stories” column. The story was bylined CBS/AP and though it was attached to a CBS News video, that video was about how Iraqis might react to a U.S. troop surge, rather than about the genocide charges against Hussein.

There is a lot of CBS video here, but the site is more than a collection of items from what it airs on its news programs. For example, 60 Minutes posts lengthy interview clips that don’t air on the Sunday night broadcast.

The network, however, has stopped short of others when it comes to showing the newscast online before it appears on TV. The site offers a live simulcast of the evening news broadcast, the first to do so. ABCNews.com, on the other hand, offers a 15-minute webcast starting at 3 p.m. CBSNews.com simply offers the potential “rundown,” or a list of stories being considered for the night’s broadcast, late in the afternoon.

In content, the CBS name still carries weight, but not to the degree of some other destinations, and CBSNews.com earned a high mid-range grade on the level of brand control it tried to exercise. Homepage content comes from either CBS News, sister outlets owned by the CBS Corp., or wire services. The wire service news, though, gets heavy use. The print stories on the site are largely wire or wire that has been edited by CBS (usually bylined “CBS/AP”). But perhaps because of the heavy reliance on wires, the site makes sure there are few print stories that stand alone.

The reliance on outside news, though, may grow over coming years; CBSNews.com has formed partnerships with two major content producers. First, the site joined forces with WebMD in August 2006, tapping into a growing, somewhat underrepresented market of medical news, where research shows there is considerable consumer demand. Then in October it announced a deal with Answers.com, which allows readers to get more background and information on words and phrases that are hyperlinked in news articles published on the site. But even unoriginal content is subject to staff editing, and most links inside the stories keep people inside the CBS News Web site.

The site fell at the low end of the spectrum when it came to participation, letting the user take part in the news, an area that news sites over all tended to underplay. Users can comment on most stories, but cannot do much beyond that. There is no way to rate the story, to e-mail the author, enter into a user-based blog or contribute original news stories. User choices are recognized through a list of the most-viewed stories of the hour, though the site does not track the most e-mailed or linked-to stories.

One noticeable aspect of the site is the large role the promotion of CBS entertainment programming plays. The homepage page features an entire column of links to clips from that night’s CBS primetime lineup. Katie Couric has a prominent spot on the page, just under the lead story and “Top Stories” column. A small mug shot of Couric sits next to five video links from the CBS broadcast as well as a link to the Couric & Co. blog, where users can watch video and post comments.

Economically, CBSNews.com demands something from its users but not as much as others, scoring in the second tier on revenue stream. All content is free, even in the archives. Users can register if they choose, but don’t have to, What they must do instead is make their way through a number of different ads — we found an average of 18 just on the home page, many of which were self-promotions.

Ultimately, there is a lot on CBSNews.com. It is an example of a site that sees the Web’s potential as a multimedia news outlet, but also as a way to win viewers for CBS.

Chicago Sun-Times (www.suntimes.com)

Chicago’s tabloid daily, the Sun-Times, has created an online identity that is clean, well-organized and very local, with a dash of sensationalism thrown in.

Suntimes.com uses a two-column layout with a white background and mostly emphasizes news from the Chicago area, particularly the print headlines. But the video links, which are played high here, are focused more on celebrity and news of the weird.

What the site emphasizes is the personality of the paper. It earned its lone top mark for branding, the level of original content and its own editorial judgment and style.

As for the rest of the inventory, it sat in the third tier on customization. The home page cannot be modified to personal taste. Users cannot get podcasts or a mobile version of the site. It was similarly in the third tier on user participation. Beyond the ability to e-mail the author, there was little opportunity for users to contribute to the site. The only other participatory option was the most controversial one, an online vote or so-called poll.

The site landed in the lowest tier in its use of multimedia. There were video and slide-show links on the homepage, but more space was taken up by text than on other sites. The site also fell in the last tier relative to others for depth. It was updated less often and offered fewer links to go deeper into topics and events.

When it came to economics, or the number of revenue streams, Suntimes.com fell to the bottom tier. Advertising was the only revenue stream, and the number of ads was small.

The content here was again, highly local. Other than video AP links high on the page, national and international news takes a back seat on the site. Links to those kinds of stories come only after the lead item on the page, the videos and metro and tri-state headlines.

The site’s homepage on February 12, 2007, for example, led with a piece about car fatalities caused by a drunken driver in the Chicago-area community of Oswego, Ill. The feature under it asked users to “Outguess Roger Ebert’s” Oscar predictions. The film reviewer, incidentally, has his own navigational tab on the site. Then the site ran three local headlines ranging from the shooting death of an off-duty police officer to a winter storm watch. After that came two national headlines, two world headlines and two politics headlines. And that was after a big weekend for Illinois politics as Sen. Barack Obama announced his candidacy for president.

CNN (www.cnn.com)

Streaming an average of 50 million news videos a month, and averaging about 24 million unique visitors a month,⁶ CNN.com comes second to MSNBC among the three cable news sites in traffic.

While MSNBC has the advantage of being a partner of MSN, the leading Internet portal in the U.S., CNN benefits from its commercial relationship with Yahoo, which is the search engine for CNN and sells the advertising displayed on the site.⁷ It is also working to tie together its digital media components. In October of 2006, the channel formed “CNN Events,” a division devoted to cross-media marketing that allows a marketer to buy advertising across the CNN spectrum — television, the Internet, and newscasts provided through cell phones and podcasts.⁸

What impression does the site give its users? Like MSNBC, the site seems more about doing many different things than identifying itself around particular skills. Again like MSNBC, the site did not earn top marks in any one of our content categories, but scored in the mid-range for all, and earned low marks for none.

The site maintains the cable channel’s focus on up-to-the-minute information. But it also makes some effort to develop its own Web identity with less emphasis on the on-air personalities and more on user’s ability to customize the news. Beyond the top few stories, however, it also relies more often than not on outside wire copy for its headlines and its breadth.

On the homepage, the latest headlines take up the bulk of the screen view. The lead story dominates the site on the left of the screen, and is normally accompanied by three or four related stories that have some multimedia elements. On September 22, 2006 it was a story about the E. coli outbreak in spinach with links to a CNN video report on the lack of standards for spinach safety and a graphic map of states with E. coli outbreaks.

It adds new content at least every 20 minutes, with a time stamp for the latest update at the top of the homepage and time stamps at the top of each full story. The focus on continuous updates, though, seems to take priority over other depth to the news. The site averaged just four related story links to lead story and just over one for other top headlines.

The CNN name is important on the site, but as with depth, takes second seat to timeliness. Most headlines are wire stories, and those that come from CNN staff carry no bylines, except when stories are taken directly from the cable channel or occasionally from a sister outlet from the Time Warner family. The layout of the page is by top news and then by topic area like World, Health, Travel and Law, and the stories here are mostly AP as well. Overall, CNN.com fell in the high-mid range for the level of brand control.

Under the headlines is a list of video segments, offered again in two ways: either most popular or “best video” (though it is not entirely clear how “best” is determined). Next to that the site displays its premium video content — CNN Pipeline. A commercial-free subscription service of streaming video content, it was launched in December 2005 and has helped to make the site more appealing.⁹

CNN puts noticeable effort into letting the user customize the material. The site scored in the mid-high range here. Users can create a customized home page. They can also choose to have the information come to them through RSS with more than 20 feeds, ranging from straight news to blogs, Podcasts (both audio and video) or even to their mobile phones (an option not yet available at even some of the higher-tech sites we examined but available on all three cable news sites).

The site’s mobile content is in a section called CNN to Go, which includes news headlines, alerts on breaking news and an audio-video newscast produced specifically for the Web called “Now in the News.” CNN also offers a live audio feed of CNN Radio. What’s more, nearly all of the content on CNN.com is free. That includes all archives, a feature quickly fading on many Web sites. Users don’t even have to register to go through content, but can if they choose. The only fee-based content is CNN Pipeline.

In an attempt to be more interactive, CNN launched a citizen journalism initiative in August 2006. Called “I-Report,” it invites people to contribute news items for possible use on the Web and on the cable channel. On a subsidiary site called CNN Exchange, users can submit their own news reports, photos or video either on specific solicited topics or those of their own choosing. CNN editors then screen the material and decide what to publish. (CNN does not pay for the material).

The user content here stands out among news sites, but some of the more standard ways to invite user input are absent. There is no place on the homepage for users to post comments, enter live discussion, rate stories or take part in a user-dedicated blog. Even the ability to email the author is offered in only the most general capacity.

When it comes to multimedia components of its content, the site landed right in the middle of our ranking scale. It is still heavily based on narrative text—it made up roughly 70% of all the content on the homepage. Pre-recorded video and photography were still the most common other forms, but the site also offered live streams, slide shows and interactive polls. The lead story was almost always made into a “package” of reports offered in at least three different media formats.

When it came to revenue options, the site demands little of users and varies on its use of ads. The only fee-based content is on CNN Pipeline, a broadband channel providing live streaming video, video-on-demand clips and video archives. Its subscription fee is $25 a year or $2.95 a month.¹⁰ For the rest of CNN.com, the “cost” to users is putting up with a barrage of ads. When it comes to ads, one visit to the home page displayed 19 separate ads, only 6 of which were self-promotional. But another visit had just six ads, all but one of which was non-CNN related.

Crooks and Liars (www.crooksandliars.com)

The liberal blog Crooks and Liars labels itself a “virtual online magazine,” but the site is ultimately a relatively straightforward Web diary of links and excerpts of other material. The element that differentiates this blog from others is its heavy use of video links. And for that material it seems to rely heavily on cable news to provide the fodder, positive and negative.

In our site inventory, Crooks and Liars scored it s highest marks for branding, where it placed in the highest tier of the 38 sites studied. But that score is somewhat misleading. While the site does have bylined entries that included some editorial commentary (which helped its score) the majority of those entries were excerpts from other places.

Beyond that, the site didn’t score highly in any of the categories measured. Even its multimedia score was in the third tier despite the many video links on the page. That was largely because even with those links, the page was dominated by text. Crooks and Liars also fell into the third tier for the level at which it allows users to participate, offering little beyond the ability to e-mail authors and comment on stories. There was no user blog here.

The site also scored in the third tier for depth. It doesn’t offer much of an archive and does little to link stories together into compete packages. It also wasn’t updated as often as other sites.

Crooks and Liars scored in the bottom tier on customization. This is essentially a static site. There is no way for users to modify the homepage. There are also no podcasts for users and no mobile version of the site.

The home page reflects one revenue stream, advertising, and it had a fairly high number of ads, about 12.

In content, Crooks and Liars is similar to many blogs with a political agenda. It uses print and video clips to hit at issues, politicians and personalities on the right, and uses other material to support those on the left. On March 5, for instance, one of the site’s authors posted a clip of the MSNBC host Keith Olbermann’s “World’s Worst Wingnut Trifecta” (Newt Gingrich, Rush Limbaugh and Ann Coulter). On the same day a different author posted video of CNN’s Jack Cafferty calling the recently chronicled problems at Walter Reed Hospital “a disgrace.” The same post also quoted the New York Times columnist Paul Krugman as calling the Walter Reed fiasco “another Katrina.”

Daily Kos (www.dailykos.com)

With 20 million unique visitors monthly, Daily Kos, the liberal blog started in 2002, is one of the busiest on the Web, and the site shows it. With its orange and white color scheme and professional-looking banner, it does not look like a mom-and-pop operation. It also offers it own line of merchandise — t-shirts, sweatshirts and hats. And its founder, Markos Moulitsas Zúniga, has become something of a TV talking head, appearing on cable shows to discuss issues in the news.

In terms of format the site does the usual linking and quoting one expects on a blog, but there is more original text and commentary mixed in. Indeed, some posts are largely the author’s thoughts about the topic he’s discussing, with the cited material making up only a few lines. That is a big reason why the site scored in the highest tier on branding. This site is about the mind of Daily Kos.

Daily Kos also received high scores for user participation, sitting in the top tier in that category. It lets users blog, e-mail authors, add their own content and rate stories. It was the only blog we examined that scored in the top tier in this category.

The site scored lower, in the third tier, for customization, or the degree to which it allows users to make the site their own by customizing what they see or how it is delivered. Like most blogs, it does not offer some of the customizing features that bigger sites do. There are no podcasts, for instance, and the site has no mobile version. Users do have the ability to modify the homepage, however.

Daily Kos also scored lower on multimedia, again in the third tier. It does not offer photos or audio links on the front page and only a few video links. Daily Kos is largely focused on words.

It placed in the lowest tier on depth. Posts were not packaged together by issue or topic, and stories didn’t offer links to archived material to add context for users.

The site’s heavy readership has led to a fairly strong revenue stream. It was in the second tier of all the sites we looked at in that area with about 15 ads on the page.

Daily Kos’s approach to content varies depending on who is posting, but the site is more likely than other blogs to include extensive comments from posters. Excerpts from other outlets are often used as jumping-off points for longer, column-like entries. And the posts here, from the left side of the political spectrum tend to be more inside-politics than on other sites. There is less commentary on other commentary than there are posts about actual news. For example, many posts the week of March 5, 2007, addressed the inquiry into whether several U.S. attorneys had been forced from their positions for political reasons. The posts looked at the specifics of the case, who might be coming forward in the days ahead and what groups were filing additional ethics complaints.

Des Moines Register (www.desmoinesregister.com)

The Web site for the Des Moines Register bears the hallmarks of an online home that has been added to and expanded to make room for new features. Yet the content can seem to be competing with itself.

Dominating the top of the page is a DesMoinesRegister.com logo with a score of navigation buttons above and below it. The main story on the page sits in the extra-wide second column of the four column layout, with a headline and teaser text, but no picture. The space that might be used for a photo is occupied by a tabbed box that features, depending on the tab a visitor clicks, staff blogs, local news videos, photos or online extras. Under that lead story are nine more headlines, mostly local. Next to those are four ads, three of which include flash animation. And in the far-right column is a bit of a catch-all space that holds weather, a searchable calendar of local events, and a series of ads. After news at the top of the page, there is a section on sports in the middle, followed by “entertainment & life.” Those sections have photos connected to their top items. On the bottom of the page are links to a variety of sites the page says are “worth a click.”

Like many newspaper sites in our inventory Desmoinesregister.com earned its highest marks for branding, or the emphasis put on its own content and editorial standards and judgment. It scored closer to the bottom in other content areas.

The site was not particularly customizable, ranking in the third tier. It did not offer users the chance to modify the homepage, download podcasts or receive a mobile version. The site’s text-heavy front page, 70% of which was narrative, also placed it in the third tier on use of multimedia. There were photos and some video links, but no other multimedia options.

It ranked in the third tier relative to other sites, too, on user participation. The site did not give users the ability to e-mail authors or create blogs and offered no live discussions or other options. And it ranked in the lowest tier relative for depth, or the use of links and other methods to give users access to background material, archival content, documents, reference sites or more.

The site did rank at the high end for economics. There was no fee content, but there were more than 20 advertisements on the page, over a quarter of them from local advertisers.

The content on the site is updated throughout the day and is extremely local. A visitor has to hunt through the front page to find national or international news; they are down near the bottom with headlines from the AP and USA Today. And that means the majority of the copy here is from the staff, though not all of it. Even in the lead-stories section of the site, editors are not averse to running AP copy for pieces they don’t have staff to cover, though those stories, too, are from Iowa.

Many of the stories updated during the day are relatively short, some only a few graphs. But the main piece, which stays on top as the content beneath it changes, is a longer, newspaper-length piece.

Because the paper is based in Iowa, home of the nation’s first presidential caucuses, it has a blog devoted to politics written by the paper’s well-known political David Yepsen.

The video on the site is noteworthy because it is mostly local — everything from high school sports features to highlights from a karaoke contest — a pattern not seen on even bigger sites. Reporters off-camera ask questions of interview subjects or simply record action. There are links to USA Today video as well.

Digg (www.digg.com )

Digg is democracy in action. The site, which calls itself a “user driven social content Web site,’’ is all about user participation. Users do more than participate — they select, create and manage the content. Indeed, with its high level of customization and user involvement, it was among the most user centric sites examined.

It works like this. A user — any user—posts new stories that appear in a simple column format. They are originally posted in chronological order, but then users rate them as stories they either “digg” (like) or don’t like and want to bury further down the list. The list of stories constantly changes with new posts and rankings.

Each story has a headline, a line on who submitted the story to the site and a few lines of teaser text. Next to that a small box shows how many users “digg it” as well as a way for others to rate, blog or e-mail the story and its topic.

There is no editorial staff making decisions on the content or even determining what the page looks like. The only requirement made of users before they begin adding their input is a fairly unobtrusive registration process — choose a user name and password and submit your e-mail address.

While most of the layout is determined by the masses, users can customize it a bit to fit their own interests, placing the site in our top tier as one might imagine. When users register with the site and begin to “digg” and “bury” items they are able to get a feel for other users who post things they are interested in, and over time they can make those people “friends.” They can then remake the homepage to feature posts by “friends.” RSS is also an option prominently located on the front page. A podcast tab was also available, though in beta-test at the time of the study, and mobile-phone options were absent.

Over all, Digg scored in the top tier of user participation as well. The entire site, after all, wouldn’t really exist without users supplying content and they ultimately control where stories end up on the page through participation.

The site, like some other citizen based sites, was largely narrative, and it scored in the lowest tier on the scale of multimedia. Its home page offered no audio or video links and nearly 85% of it was text.

As an aggregator, Digg also scored near the bottom, the fourth tier, in branding. Editors don’t really play a role here and there is no site-generated content.

Ads are limited, helping place the site in the bottom tier of economics. Small Google ads appearing under the header and down the right column are the only sign of revenue-producing advertisements. And in terms of depth, Digg was a third tier site, with frequent updates and an archive, but no story packages.

So about what kind of things do these users post? Perhaps not surprisingly, since this is an online group made up largely of early adapters, there is a heavy focus on technology. For instance, on January 11, the morning after President Bush’s major speech on his policy shift in Iraq, only one of the top 15 stories on Digg in the previous 24 hours concerned Iraq — a map showing where the U.S. armed forces casualties were from. Eight of the top 15 stories were about technology.

The top story on Digg can also look dramatically different depending on what minute a user comes by — literally. At 5:29 p.m. January 10, the top story was “A First Person Shooter in javascript?” a piece about what users can do with the program Java. At 5:30 p.m. it was “Nastiest traffic jam EVER” with a picture of lions eating a giraffe carcass on a highway in Africa.

The Economist (www.economist.com)

The brand. The brand. The brand. If there is one thing that Economist.com accomplishes, it is clearly and successfully pushing the Economist brand online. Lest anyone wonder, the site is anchored in the top left corner by the signature white lettering in a red box — in this case spelling Economist.com — with a picture of the current magazine’s cover prominently beneath.

Like the magazine, the site is clean, well-organized and text-heavy. It is also, like its print sibling not heavy with pictures or graphics (there were six on a representative homepage, and four of them were quite small). Even the site’s ads, (often for petroleum companies or large blue-chip corporations) are designed without a lot of colors or jumpy graphics.¹¹

There is a lot of free content here, but most of the stories from the print edition are accessible only to subscribers — those who get the magazine delivered or pay a fee to access premium online content.

At the time we did an accounting of Economist.com it was in the second tier in terms of customization, receiving points for having a multiple-component search and several RSS feeds. It was also in the second tier on multimedia, due to the photos on the page several and podcast options.

Its weakest scores came in interactivity and depth, where it was in the bottom tier. A user-based blog (one where the Web editor picks a topic of the day and users are invited to sound off on it) was essentially the only way for users to participate on the site, hurting its interactivity score. And the site’s twice daily updating – as a magazine site it seems less interested in being up-to-the-minute – cost it points in out depth raking.

The site was in the top tier for having a number of revenue streams, boosted by a significant number of advertising combined with the content available for a fee helped its economic score.

But it was brand that stood out. The content here all comes from the staff of the magazine. This is not a place to go to keep up with what’s on the wire. Nor is there content from other publications in The Economist Group, which includes Roll Call and European Voice.

Nonetheless, Economist.com does keep a steady flow of content coming by magazine standards. The top story is new every day, as are the items in Today’s Views — which includes a staff column and a Correspondents Diary (both unbylined) and Debate, a blog devoted to an interesting topic elsewhere on the Web. That is the closest economist.com gets to outside sources for news. The online pieces are short — in most cases, it appears, a bit shorter than the tightly written pieces that appear in the magazine — but they attempt the same kind of news blended with analysis for which the magazine is known.

One of the best features may be the staggering amount of data accessible here. Beyond the news and analysis pieces there are entire separate sections like the site’s Cities Guide, with information about happenings in 27 cities around the world, from Atlanta to Zurich. And there are the country briefings, which look at economic and political news from countries around the world. They include recent stories from the magazine on each country and an economic forecast, a fact sheet and information on the political structure of each.

For The Economist, which prides itself on giving readers data and raw facts along with its analysis, it is yet another way to extend the brand.

Fox News (www.foxnews.com )

Fox News, the star on cable, lags behind the other two cable news channels online. Its Web site has roughly a third the audience of its competitors, though it made efforts to address that lag in 2006.

In November, Roger Ailes appointed Ken LaCorte, Fox Television’s Los Angeles bureau chief, to head Foxnews.com and take over all editorial and design functions. He will report directly to John Moody, vice president of news for the Fox network.

The site was revamped in September 2006 in an effort to streamline the content. It also added new interactive and delivery features. Visitors to the site can now customize it as they like and have the option of getting Fox News headlines on their Blackberry phones and cell phones.¹² As a result, the Fox site now earns the highest marks for both the level of customization offered on the site and for the level of multi media offerings, and mid-range marks in all other categories. It has become somewhat more competitive, by those measures, with its rivals.

Even so, Foxnews.com still feeds off the identity and strength of the cable channel more than it embodies an identity for itself. For the most part, the site is the Fox News Channel. The brand promoted here are the Fox personalities rather than individual stories, to a much greater degree than CNN or MSNBC.

The top of the page is dedicated to the news headlines, but up-to-the-minute news is clearly not given the same kind of priority as at other cable news sites. It updates every half hour, but there are usually just three or four headlines, which are brief unadorned reports from wires. Each headline stands alone, sometimes with a related wire story link underneath. There is little attempt to create coverage packages with multimedia reports or backgrounders from Fox News. About a quarter of the stories we captured had been augmented somehow by staff members, whose names, unknown to most, appear on the inside (i.e. landing) page at the very bottom of the story. What’s more, the page has just one overall time stamp of the latest update, rather than time stamps on each story as is common at other sites.

After top headlines and other “latest news” from the AP, the page focuses on promoting the Fox Brand with content involving Fox hosts and programs. In the upper right corner when we looked in September 2006 were Fox News videos, with a Web-exclusive interview with Senator Barack Obama. The interview was an exclusive that first aired about 10 hours earlier. That same interview also appeared as the lead item in the next section down, “Only on Fox,” along with a link to a science report “Black hole won’t devour Earth, scientists say.” Other subsections on the page also carry the Fox name and previously aired Fox News content: Fox411, Fox Online, FNC iMag, Fox News Talk and individual program listings.

The site does emphasize the use of multimedia more than those of its cable rivals. Just over half of the content was text-based (primarily the wire feed stories) with heavy use of video and still photos but also some live streams, podcast items, polls and interactive graphics. In October 2006, Foxnews.com launched two new video products, collectively called “Fox News Flash.”¹³ They include two one-minute newscasts, in the morning by Fox & Friends and in the afternoon by the Fox Report with Shepard Smith. Those news segments can also be received, without any need to subscribe to the site, in the form of video podcasts.

The site also targeted mobile phone users starting in January 2007 when it launched a new service called “#FOXN,” the acronym for the digits you dial to access it. It allows customers to listen to live audio of the cable channel’s on-air broadcasts. The service costs $2.99 a month and so far is available only to Cingular wireless service customers . It will also offer headlines on demand as well as a call-back service to let users know when a particular program is about to begin on the television channel.¹⁴

In promoting its brand, the site places little emphasis on making its users part of that identity, ranking in the low-mid tier of all 38 sites. The personalities on Foxnews.com speak to you much more than you speak to them or even to each other. The site had one of the lowest user-participation scores of any Web site in the study, offering only the most basic ability to e-mail the author of a report along with a poll on how visitors rated the Fed (related to a topic to be discussed on “Your World” later that day). Even the e-mail ability is only occasional, and the e-mail goes not to the staff member who worked on the piece but to the nameless “editor” of that section. There is no way to post comments or rate a story, no live discussion and no user-oriented blog.

When it comes to economics, the main revenue stream on Fox News.com is commercial ads. Upon entering the site, Foxnews.com visitors see a lot them—on average 21 ads on the home page alone, among the highest number we encountered.

There is a news archive, at least two years of which is free to users. It includes stories from all the main sections of the site, though video components are quite spotty at this point.

All in all, Foxnews.com is the lesser-nourished sibling of the Fox News Channel. Whether attention and resources begin to even out as the online world expands remains to be seen.

Global Voices (www.globalvoicesonline.org )

Of all the Web sites we examined, Global Voices was in many ways the least conventional. The end result was that it scored high in several of the areas we measured. It was the only citizen media site that would fit our definition of a high achiever, a site that earned top marks in three of five content areas.

The site is non-profit, with an emphasis on relating information that the staff editors find interesting, not on providing the top news of the hour (or minute or day).

But Global Voices takes a unique four-step approach to identifying what is interesting. First, rather than searching stories from mainstream news outlets, editors cull through a vast number of blogs from around the world. The editors, who themselves are located across the globe, then decide which postings are worth passing on. Next, they add their own comments or background information to put the blog entries in context. Finally, when necessary, entries are translated into English, often by a different “language” editor.

Take, for example, January 10. In the afternoon the lead was “Philippine free press under attack.” The entry featured a lead-in by an editor noting that the Philippine press has been “one of the freest in the world” since Ferdinand Marcos was deposed, but reporting that the current first family “is harassing journalists by filing libel cases” against them. The post then ran blurbs from the Pinoy Press and the site Freedom Watch. The next post used the same approach to look at the Iraqi government’s efforts to register bloggers.

In our inventory, the site scored well, in the top tier, on customization. While its home page could not be modified by users, there were many RSS and podcast options available to users.

Global Voices was also one of only three sites studied to score in the top tier for depth. It did well because of the large number of stories it grouped together in packages and the archive it included.

The site also earned top marks for the degree to which it was offering a unique brand in which its own editorial process and judgment was emphasized. With thestories chosen by paid editors and with content that came from wholly staff, even when citing other sources, it exercised significant editorial quality control. The banner across the top of the page pays tribute to its many authors. The page’s logo and name sit next to the headshots of four bloggers, each one linking a short bio and a compilation of that blogger’s work. Each post then has the link to the original blog as well as a tag-line of the Global Voices editor. And running down a side column is the list of blog authors and the number of posts each has contributed to date.

The site also scored well, in the second tier, for user participation. It did not offer live discussion and interactive polls, two of the more controversial elements of web participation. But it contained a good deal of opportunity for users interact. In addition to the editorial choices, user content — through a user-based blog — is a big part of this site. At the end of each piece users are invited to “Start the conversation” by posting comments, which are moderated by site editors.

The one content area where this remarkably well rounded site did not stand out is for multimedia. This site is about words, 95% of the content available from the home page was narrative.

The site’s score for revenue streams placed it in the bottom tier as well – perhaps not surprising since it is a non-profit.

The strongest impression one has when visiting this site, however, is its international feel. The largest box of text is a list of countries from Afghanistan to Zimbabwe. Next to that is a thinner blue box with a list of topics ranging from Arts & Culture to Governance to History to Youth. Under that is a slim one-line search box that runs the width of the page.

Global Voices is not a site to visit to get the latest headlines or find out what the media are talking about. But it shines a bright light on issues the big media often pass by.

Google News (www.news.google.com )

If you could constantly comb through thousands of news stories to cobble together a page of top news links from outlets around the world, you would be creating the front page of Google News. No person can do that, of course, but Google’s computer programs can. The result is a page that is broad, deep and somewhat serendipitous. Users never know exactly what they are going to get when they visit the site – maybe the lead piece is from the New York Times and maybe it is from China’s Xinhua news service – but Google’s algorithms ensure that many people are reading them. That determines what stories make it to the front page.

The stories also contain lots of links to other pieces on the same topics which is the why the site scored obscenely high in our depth category, not only in the first tier but far and away first overall. Stories were “packaged” with hundreds of other stories to give users more links on any one topic than they probably know what to do with – though often the stories are just the same wire copy repeated in many outlets. The site was also updated frequently.

Google’s news page scored fairly high on customizability – in the second tier. Users can modify the page, choose from multiple RSS feeds and access a mobile version of the site. There are, however, no podcasts here.

In all other areas we measured, though, the site ranked in the last tier. Its multimedia score was hurt by the fact there is so much text on the front page. And opportunities for user participation are largely nonexistent. There are no user blogs, no ways for users to comment on stories and no polls to take part in. And, of course, the site’s branding score was bound to be low considering everything on the site is from somewhere else.

There is essentially no revenue stream for the content on the page, with no ads and no fee content from Google.

The content here is from well-known outlets from across the globe and that can make for some interesting reading. On March 6 for example, the top story in the afternoon was about the just announced verdict in the Scooter Libby trial, though the account was from Prensa Latina. The second story was a New York Times piece about the Mega Millions lottery jackpot, which was at a record $370 million. But other top pieces (running along the right side of the page) included a Business Week story about Michael Eisner’s bid to buyout the baseball card maker Topps and San Jose Mercury News account of Virginia Commonwealth University defeating George Mason in men’s college basketball. Users, of course, can ultimately shape the page as they want – choosing what kinds of stories they want to see on top. But visiting Google News randomly can be a lot like going by a virtual newsstand that is constantly updated. What one takes away depends on when one stops by and where one looks.

KING 5 TV (www.king5.com)

The Web site of Seattle’s Belo-owned local television station, KING 5, stands apart from the average local-TV Web site. Its content, unlike many other local TV sites, is highly local. There is weather, a link to a free classified section, a box, updated roughly every hour, that spotlights developing local stories or other advisories, followed by three top stories that are presented as a package with headline, brief story synopsis, picture and at least one video clip.

But that layout is not a must. KING5.com earned its highest marks for being customizable. A button at the top of the page, “Customize KING5.com” allows users to “choose your news,” by constructing an individual news page with headlines they choose form KING5.com as well as other sites. The site also allows users to do advanced searches to find what they want on the site. And if you’d rather not come to the site, it will come to you via RSS, Podcast or even your mobile phone (a feature available on only on a handful of sites examined).

A major site redesign at the start of 2007 gave even more weight to the user. In October 2006, there was no way for the user to add their own voice—no way to comment or rate a story or even access a "most emailed" list. By February 2007, visitors who become “members” (something they are prompted to do after a few clicks on the site) are encouraged to contribute to the site’s content. One of the headers along the top of the page along with “news,” “weather” and “sports” is a link called “interact,” and invites users to contribute photographs, engage in forums to discuss news, politics, sports and the outdoors, comment on King 5 blog entries, and contribute to the local calendar of events. With no way to directly email station staff, have a live discussion, rate a story, or see a list of the most emailed or linked to repots, there is still some room to grow. Overall, it falls in the mid-low level here for participation. But this is a site that is focusing more than many others on users.

The redesigned KING 5 site also increased its use of multimedia forms for its content, putting it in the mid-high category here. Just over half of the content on the homepage is text-based. The rest features video news clips, slide shows and interactive graphics like a two-way calendar of local events.

KING 5 does not place nearly as much emphasis as some other sites on its own branded material or content control. It fell in the high mid-range of sties studied. There is a place, called “Investigators, designated to its news team’s original reporting” But these reports, primarily local in focus, appear only periodically: on January 30, 2007, the top 10 stories listed on the Investigator page were dated January 23, 2007 back to November 21, 2006. Over all, the primary source of content, for both video and narrative stories, is the Associated Press. KING 5 reporters have bylines for about half of the local news content, with the AP and other contributing sources (such as KGW.com) filling in the rest.

The site scored at the low mid level for depth. That, given the paucity of this characteristic in the sites studied, still ranks it better than many others. The site updates its content every hour, but again it is primarily with wire copy that does not offer many links either inside or along-side the story to provide readers with additional information.

Finally, for now anyway, visitors can use the site with little demanded of them. Registration is optional (though encouraged), all content is free including the archives and there are on an average of just five ads on the page.

Little Green Footballs (www.littlegreenfootballs.com)

Blogging from the right side of the political spectrum, Little Green Footballs has become a popular Web destination for conservatives by offering, largely, a critique of mainstream media coverage. It is of the category of blogs that focuses less on original content and more on aggregation. Much of the content is a few lines of author text tied to an excerpt or link from another online outlet. The entries are not always critical of the media, often pointing out approvingly stories the blog wants noted.

Like all the blogs we looked at in our inventory, Footballs scored highest on branding, landing in the top tier in that area, because its content all comes from the author of the blog, Californian Charles Johnson. Again, that is despite the fact that many of the entries on the page were largely content from other places. Even in those cases though, a few lines from the blogger usually introduced the item and put the excerpts in context.

The site didn’t score well in the other areas examined. It was in the third tier on customization. Though it did have a front page that users could modify, it had only one RSS feed and no podcasts or mobile version of itself available.

It sat in the bottom tier in the other areas we measured. It offers little in the way of participation. Users have no ways to interact with the site beyond posting user comments at the end of entries.

As for depth, the site offered an archive and updated fairly frequently, but it did not package links to give user a broader sense of issues.

The site was also not heavy on multimedia. All told, 84% of the page was made up of narrative text.

Again though, like Daily Kos, the site’s unique visitor number has helped with its revenue streams, where it ranked in the second tier. Though it depends on ads there were a lot of them, just under 20 on the homepage.

The content of Little Green Footballs is diverse with a strong foreign-affairs tilt. Topics can range from domestic politics to the news media, but international news has a special place here. And while the site’s view on such issues always comes from the right, one can read the site and get a fairly comprehensive view of the subjects in the news. The first six posts on the site on the afternoon of March 6 were the verdict in the Scooter Libby case, the way the Huffington Post was blocking nasty comments about Vice President Cheney’s blood clot, the story of a possible defection of a former Iranian defense minister to the U.S., the hunt for Osama bin Laden, and a visit by German bishops to Israel. Little Green Footballs is a site for those wanting a conservative look at the news of the world.

Los Angeles Times (www.latimes.com )

The online home of the Los Angeles Times is best known heading into 2007 for an internal study the paper conducted that was sometimes brutally frank about its shortcomings.

Our content inventory found the site crowded with material, but still organized. Latimes.com may not be a clean site, but it finds a place for everything — videos, photos, blogs and, of course, text.

The site uses a four-column layout set against a white background, which helps prevent it from looking overwhelmed and cluttered. But the sheer amount of content on this page is impossible to ignore. The site tries to prominently feature as many as eight stories at the top and in the middle of the page, more than most of the sites we studied.

Framing the page down the left side is a lengthy set of navigational buttons. Over it all is the blue Latimes.com masthead, and over that in smaller is the Old English logo of the Los Angeles Times. In look, indeed, the site in some ways echoes the Washington Post in the sense of trying to create a distinct online personality that differs from the print product.

There is a lot of content on the site, and it helped Latimes.com score well in some areas of our site inventory. The site sat in the second tier on customization with its multiple RSS feeds and a mobile version of the site. It also gave users the chance to modify the homepage and saved those modifications for future visits. In terms of multimedia, it was also a second-tier site. It was not overly text-heavy and offered users many video links, but little else — no audio, live discussion or podcasts.

The ability of users to post and add content helped the site’s user participation rating, placing it again in the second tier. It would have scored higher had it offered live discussion or other options. The site, in other words, seemed to have been constructed for more user participation. But the elements that would require staff to keep that opportunity fresh did not always materialize.

The site ranked lower, in the third tier, in another area that would require continuing attention, depth. That requires the kind of effort that occurs story by story, and probably involves team effort. It is also an area where most sites studied had room to grow.

Interestingly, LATimes.com also placed in the bottom tier on economics, or the number of revenue streams evident on the site. It offered fewer ads than most sites we examined — only six — and did not have any fee content or a fee archive. That may help explain why, according to the Times internal report, it generated less revenue for the company than other major newspaper sites.

In terms of content, Latimes.com may be based on the West Coast, but it is a national news site as well. The lead stories tend to have a few local entries, but the biggest headlines are usually national or international in their focus, and most are staff written. Wire bylines do appear on some pieces.

On February 14, for instance, the top stories for the site were about film makers in Hollywood, North Korea’s nuclear shift, the insurgency in Iraq, the Fed chairman Ben Bernanke’s feelings on the economy and the disappearance of a statuette of the Maltese Falcon at a local restaurant. The Bernanke story was form the AP, the rest from the staff. The smaller “More News” headlines in the top tend to be local in nature, however, and the photos from users in “Your Scene” are usually from California locations.

Video links on the site are a mix. Some come from the local news team at KTLA, some are Times-produced and some don’t have any attribution at all.

Over all, Latimes.com looks like something of a combination of Nytimes.com and Washingtonpost.com. It is a unique online entity that strives to be national in content with heavy multi-media options. But the potential in some ways seems unrealized.

Michelle Malkin (www.michellemalkin.com)

The blog of the syndicated columnist Michelle Malkin is clean and understated in its look, with a white background and a column of running posts from the author. But what may stand out the most about the blog is the lack of writing on it. Malkin, who writes a weekly political column for the Creators syndicate, seems happy to use the blog as a way to stay on top of breaking news, calling attention to news that she wants noticed without writing extensively online. That’s not to say there is a lack of viewpoint here. Malkin’s arch and sardonic conservative voice is clearly heard, but it comes in short, quick bites.

In our inventory, the site’s strength was its branding. It is all about Malkin, from the domain name to Malkin’s picture looking over the page to each item, which is posted by her. This is the writer’s online home. Michelle Malkin is the reason to go here, the brand and the appeal.

The site scored in the bottom tier in the other categories we measured. It offers users few chances to modify the site, our category called customization. There is an RSS feed, but no podcasts, no mobile version of the site and no way of altering the front page.

Malkin also scored low on participation. The site offered no way for users to interact beyond the ability to e-mail the author. Other than the picture of Malkin, the site was all text when we did our accounting, which led to a low multimedia score. There were no video or audio links and the page was 96% text.

And like other blogs its depth score was low because the site didn’t package pieces together to give users context and breadth. The site also didn’t update as much as others.

As for revenue stream, Malkin’s site was also limited. There were only a few ads on the page (roughly five) and no for-fee content.

That said, the site isn’t really about those categories or about generating revenue. It seems designed to give Malkin an online platform to talk about the things she wants and extend her brand online. Its content allows her to do that. For instance, in a March 6 entry about the Huffington Post’s blocking users from saying cruel things about Vice President Cheney’s blood clot, Malkin wrote “Huffington Post has disallowed comments on an article about VP Cheney’s blood clot. The first step toward recovery...” In a March 5 post about the Walter Reed Medical Center scandal, Malkin posted a “Note to haters” in which she told people who questioned her critique “I know perfectly well that Walter Reed is not part of the VA system. Duh.”

Michelle Malkin’s Web site is ultimately a place for her fans and detractors to go to find out what’s on her mind. On that score it is highly successful.

MSNBC & NBC News (www.msnbc.com)

MSNBC.com comes across as an amalgam. As the online home of NBC, MSNBC and the weekly magazine Newsweek, the site strives to give all three their due while at the same time creating its own identity. Those efforts, however chaotic they may seem, have succeeded in building an audience.

Unlike its performance on cable TV, MSNBC’s Web site (which launched simultaneously with the cable channel in 1996 as a joint venture between Microsoft and NBC) has long been one of the top three news sites on the Internet, with a monthly average of 26 million unique visitors.

What is in the brand that draws users to the site?

No one trait jumps out. In our study of 38 different news websites, MSNBC doesn’t strongly emphasize any one area. Indeed, it did not earn the highest marks in any category of content. But it scored fairly well at everything and did not earn low marks anywhere, one of the few sites that can make that claim. It really was a jack of all trades.

The site is word oriented. Roughly three-quarters of the stories on the homepage are text-based. Just 12% of stories took advantage of the video produced by either MSNBC or NBC. This puts it at the mid-low range of the spectrum for multimedia. On the days we examined, users could at one point access a slide show or an interactive graphic, but these were few and far between. There were no live components at all.

The lead story often has a video component attached to it, but most other video offerings on the page stand apart either within a section labeled “Video” or under the header “NBC News Highlights.”

A bigger draw may be the ways users can customize the news or add their own views, but even here the site doesn’t employ as much as others, falling in the mid-high range of the sites studied. Currently, the site has focused more on making its content mobile, rather than the site itself customizable. In November 2006, the Web site began offering free video podcasts of NBC’s Nightly News and Meet the Press. Earlier, in April 2006, the channel announced that a specialized, ad-supported version of the Web site would be available free on cell phones with Internet capability. MSNBC’s mobile phone service (called MSNBC.com Mobile) is available on all major phone networks. Initially it was only text, photos and podcasts, with a notice on the site saying that multimedia components were expected, but with no timeline mentioned.¹⁵ The new business model is seen to be a test to gauge how consumers react to advertising on their mobile devices. There are also additional RSS options.

The home page itself, though, is less flexible. There is only a simple key word search. And users can choose homepage layout, but only for the current view. At the next visit, it’s back to MSNBC’s design.

How about citizen voice — web 2.0? MSNBC is not the top destination we found for users who want to be heard. There is no user-generated content, no user-based blogs, and no live discussion. There are a few ways to be heard. Some stories allow users to enter into an online chat. Also, users can rate a story and the results are used in a couple of different ways. First, the results for that story are posted at the bottom of the piece in a star system along with the number of ratings to date. Second, on each inside page is a list of “most popular” stories at a given moment.

As the online home of multiple news outlets (even Newsweek’s own site often directs people here) it is not surprising that brand identity can get confusing. There is content from all of its family members—MSNBC, NBC, Newsweek—as well as the Washington Post and the wire services. In fact, wire stories make up a good portion of their top headlines. Staff editors control the content, but again, there seems to be a bit of a split over whether their mission is to promote the family names or the content itself.

The top stories of the hour command a good amount of the prime real estate. The next three sections promote reports from each of the three news outlets, followed by Web site-only content — “only on MSNBC.com.” Scrolling down the page, though, a visitor can eventually get to a list of content organized by topics in the news. The editorial staff also keeps tight control over where users go once they enter. None of the stories we examined ever contained links to outside Web sites.

Perhaps in the end, it is the revenue structure, or lack thereof, that attracts people to the site. MSNBC.com expanded how many ads it contained from September 2006 to February of 2007, but it still remained on the low end. In September there were just 7 ads, all of which were self-promotional. In 2007, a few more had been added, including one prominent outside ad per day and a list of “sponsored links” at the bottom of the page.

Still, the most visible ones are self-promotional and are relatively unobtrusive.

The site doesn’t make up for the ad-free environment by asking users to pay. There is no fee-based content at all, not even the archive. Nor does the site demand that visitors reveal personal information; it has no registration at all.

New York Post (www.nypost.com)

Love it or hate it, there is little question that nypost.com brings the spirit of the tabloid paper to the Web, along with a great deal of the appearance.

So strong are the ties to the print edition that the homepage for the site actually looks like a tabloid paper, complete with the ruffled right side of the page where a reader would turn print pages. There is also what looks to be a rip just under the masthead, where the top stories change as virtual pages appear to be turned. The Post’s familiar red and black motif is on full display and pictures dominate the page. Top stories feature very large headlines that are usually printed on top of a photo, as in the print newspaper.

If the challenge of Web for newspapers in part is that a screen is much smaller than a broadsheet, Nypost.com offers a hint of how a tabloid online can be different.

Yet after offering the contents of the paper, with some additional multi-media features, plus making use of more multimedia formats, Nypost.com does not score as highly in our systematic audit as some other sites. The only area where it earned top marks was in branding, or the level of original content and promotion of its own editorial standards and practices.

The New York Post’s site is not very customizable, for instance; it ranked in the third tier of sites studied. It offered no podcasts and limited RSS feeds. Users were also unable to change the page in any way, and there was no mobile version of the site.

Nypost.comalso sat in the bottom tier on user participation, or the degree to which visitors can contribute. There is little chance for users to get involved beyond e-mailing authors. There was no way for users to add content, no users’ blog and no interactive discussions.

It was also in the bottom group in depth, with few stories linked as packages, fewer updates than many sites and no embedded links in stories. And with few ads on the page and no fee content, Nypost.com also placed in the bottom tier of economics.

In its content, the Post’s Web site makes it clear that the organization believes its franchise to be “shocking” stories, “exclusive” photos and pieces about government malfeasance. All play a prominent role here.

In the three days after the death of the former Playboy model Anna Nicole Smith, for instance, the Post was still leading with a story about her and the battle over her baby. “MAD 'DADDY' IN HEIR RAID” read the headline.

Or consider the piece about how the state’s comptroller failed an economics quiz given him by a Post reporter: “TESTY POL GETS ‘F’ IN FISCAL ED.” Along with those stories, the paper’s signature Page Six gossip page gets an entire section on the site with stories about movers and shakers in New York, celebrity photos and poll questions for readers. One showed pictures of the actresses Scarlett Johansson and Cameron Diaz and posed the question, “Who’s Hotter?”

New York Times (www.nytimes.com)

The look of the newspaper is still there, including the paper-white background and the distinctive old-English masthead. The work of the correspondents, their bylines and their reporting, still form the core attraction.

But while retaining the feel of print, the Web site of the New York Times, redesigned in 2006, is more subtly a customizable, participatory news outlet that covers the news as it happens.

Indeed, to a degree greater than for most newspaper Web sites, this really is the newspaper and more; it is the New York Times….online.

That sense begins with the page’s design. Users will undoubtedly notice how wide the page is and how much information is there. The site is one of only a few with a five-column layout, another evocation of the newspaper, which has six columns. Most Web sites are three or four columns wide.

And the sense that this is the newspaper’s identity and brand in an online form is also reflected in the numbers from our content analysis. In our site inventory, the New York Times earns its highest mark for promoting and emphasizing its own brand and editorial control. Most of the content here, more than 75%, is from the Times staff. It promotes the bylines of its writers prominently.

Yet this is now more than a given morning’s newspaper. A visitor is also struck by the frequency with which the page is updated. Times correspondents are filing the news as it breaks, and then filling in more as the day goes on. There is a sense of the news breaking, the day evolving, the page changing; small red text indicates when a story first appears on the page. The site gives the impression of being in the Times newsroom and seeing as reporters come back and start filing. Even breaking stories on the site are usually written by the staff. Wire copy does appear in this lead story area, but it is usually replaced quickly by a staff byline.

Interestingly, the site has also found a way to use blogs to rely on wire copy less, at least ostensibly. For instance, the day of Anna Nicole’s Smith’s death, the site quickly had the story on its front page with a staff byline under “The Lede Blog” header. When users clicked the link they were taken to a blog that largely quoted other sources. Thus the site ran wires, with the look of running staff copy.

Beyond its exceptional emphasis on the Times brand, in real time, the site offers a good deal more, though not as strikingly.

NYTimes.com also scored well — in the second-highest tier — for the degree to which it allows users to customize the content. It offers multiple RSS feeds and allows visitors to create their own homepage layout to greet them on each visit. It has yet to offer, though, the newer delivery mode — mobile.

The site also makes some effort to allow participation. Visitors can e-mail authors now, and even add their own comments to stories and to blogs. The site scored, over all, high mid-range marks here.

NYTimes.com ranked in the bottom tier, however, for multimedia use. That may be somewhat deceptive, partly because most of its video links are on a separate page, not featured on the home page. That, again, reflects the fact that the newspaper is the core identity here, more than the site as its own environment. Yet even though the page incorporates some video and a bit of audio and graphic work, this is still by and large a text-heavy destination.

The site also scored somewhat lower, in the third tier, for depth, or the extent to which stories also linked to other material, original documents, background pieces, archival material and more. That, too, reflects its character; stories written by Times correspondents are what this site is about.

When it comes to revenue streams, not surprisingly, the Times also scored highly. It features, in effect, everything that a Web site today could. It has a lot of ads — 13 on the days we examined — many of them small and unobtrusive. And it adds revenues from fees it charges for premium content.

Nytimes.com is leading example of a franchise that has decided not to create a new identity online, but to transfer the old one, enriched and modernized.

National Public Radio (www.npr.org)

NPR.org is becoming something of an identity unto itself, a destination offering substantially more than just radio programs moved online. The site leads with a top story usually presented as a package with multiple links and multimedia components. That is followed by a list of other top news stories, which, once accessed, are offered as both audio and text.

Below the top stories comes a mix of news content, including a list of top e-mailed stories (updated continuously), a sidebar of news topics for further reading/listening, and Associated Press headlines.

Amid all this content is a clear sense of the NPR brand—a clear emphasis of this site, and a category where it got some of its highest marks. The vast majority of stories posted on the site are researched and written by NPR’s staff, something it accentuates by offering bylines to most stories as well as links to the author’s biography. In addition to the NPR content, the site augments its stories with a limited selection from the A.P.

The other area where NPR.org excels is in allowing users to customize the NPR content to their own interests or needs. Both RSS feeds (“really simple syndication”) and podcasts are prominent features, situated in the upper left-hand column of the homepage. The RSS link takes users to a page where they can choose to receive particular categories of news feeds (e.g., opinion), specific programs (e.g., Morning Edition), topics (e.g., children’s health), or particular member-station feeds (e.g., KQED in San Francisco). All in all, there are 52 categorical RSS feeds and 19 member station feeds. Another feature extensively employed on the NPR site is podcasts. The podcast link from the homepage takes the user to an extensive directory of podcasts organized by “this week’s picks,” topic, title and by station provider. As of February of 2007, though, the site had yet to embrace the latest trend of mobile phone delivery.

NPR.org was in the mid-level range when it came to use of multimedia forms. Audio features were prominent, with some live streaming options, podcasts and other MP3 downloads. These are supplements, though, to the more common text and photo elements on the home page. And, the site did not offer video content.

Clicking further inside the site, however, reveals more of a multimedia feel. Once users click on a story headline from the main page, they are taken to the transcript of the story (or a synopsis) and are then presented with the choice to read or listen to the story. Indeed, NPR.org stands out in offering about 85% of its content simultaneously as textual narrative and audio streams or podcasts.

A big question facing all online entities is one of economics. NPR.org hosted only two advertisements on its home page, one self-promotional, the other a PBS logo. Still, it does find a way to draw in some revenue. The site charges users for some archive material: $3.95 for a single archived transcript, or $12.95 for a monthly subscription to the archive (up to 10 transcripts).

OhmyNews International (English.ohmynews.com)

Lying somewhere between globalvoices.com and digg.com, OhmyNews International is a hybrid of citizen journalism and news editing. As with Digg, all the content comes from users, in the format of news stories rather than blog entries. There is also a heavy emphasis on narrative text. But, as with Global Voices, the editorial staff plays a heavy role in the internationally focused content. The approach in the end gives users a lot of ways to contribute and be heard but with strong brand identification.

The site itself is based in Korea, though the international version is posted in English. Although the content all comes from users, the site is far from an open forum or a clearinghouse for stream of consciousness. Potential reporters and writers must apply and accept the conditions laid out by the site, and if “hired” are paid for their work.

The process of submitting reports operates a lot like that at more traditional news outlets. There is a heavy editing process that instills a uniform style, which in the end reads a lot like a straight news or analysis piece. The contributors here are hybrids — edited citizens.

The diverse mix of largely international topics speaks to the individual interests of the citizen journalists who filed them. Stories come from around the world. On the afternoon of January 11, the lead item on the page was Part 3 of a series on the “History of French Nuclear Tests in the Pacific.” The next piece was a story on women in Africa using cell phones and the growth of mobile technology there. It was followed by a story about a Japanese politician visiting Pyongyang.

In addition to the stories themselves, the editors use a fair amount of the homepage to highlight certain features or help visitors find what interests them most. Next to the lead stories is a slimmer column with content the site is emphasizing in some way — special-report sections, podcasts, pieces on citizen journalism and a list of that week’s “Featured Writers.” And on the right is a map of the world showing the areas generating the most media attention, more featured-site links and headlines from the International Tribune.

Farther down are headlines arranged by topic area — Korea (the site’s home), World, Technology, Art & Life, etc., and finally a list of the most recent posts to the site.

As such, OhmyNews International sat in the top tier on branding. There is no wire copy on this site and the home page decisions are made by staff, not computers. What the site offers, instead, is branded controlled citizen journalism. If the number of citizen journalists posting to OhmyNews International continues to grow, one would expect the topics and regions covered to grow as well.

Thus, while the site may currently be the home of various bits of international news that have fallen through the cracks of mainstream journalism, it may be something very different in six months or a year

The site scored fairly well on user customization, in the second tier. It was helped by offering multiple RSS and podcast options high on the page. Visitors could not, however, remake their own homepage or get a mobile version of the site. As with Digg and Global Voices, multimedia was less of a focus, it placed in the last tier in that area. There was no video and no live streaming audio and, while the site is made up of content from citizen journalists, no blogs per se.

The site scored highly, in the second tier, on user participation. The site, obviously, has a lot of user content. It did not, however, accommodate live discussions, or the use of online votes.

The site did poorly in the rankings for depth and economics. Its depth score was hurt by not updating as often as other sites and not packaging stories together. And ads are largely non-existent on OhmyNews International. From its base in Korea it has a variety of Korean corporate “partners,” most notably Samsung, but there are no real ads on the homepage and the only ones on interior pages are Google ads.

The Online NewsHour (http://www.pbs.org/newshour)

The online home for the NewsHour is a lot like the program itself – it is focused on a few topics and doesn’t overwhelm the user with charts, graphs or information. A calm and deliberate site, the Online NewsHour uses a two- or three-column format to offer stories from the previous night’s program. Pieces are available in text, audio or video format. The name of this Web site sums it up fairly well. It’s an online version of the program.

In our site inventory, the Online NewsHour scored highest, in the top tier, in branding. This content comes completely from the program. The site does not rely on the wires or other outlets for news and it is put together by a human editor, not a computer program.

The site also ranked fairly high on customization, in the second tier. There was no way for a user to modify the front page, but there were a large number of RSS feeds and podcasts available to customize content delivery. The site also achieved a second-tier ranking in multimedia. It was relatively light on content overall, and almost all of what was there had audio and video links attached.

The Online NewsHour sat in the bottom tier of all the sites we examined for user participation and depth. Other than through occasional email addresses alongside the reporter’s byline, there was essentially no way for a user to interact with the site. And its depth score was hurt because it isn’t updated often and doesn’t offer embedded links in most stories.

As one might expect with a public TV site, the Online NewsHour doesn’t have a strong revenue stream, but it was in the third tier – not the bottom one – with eight ads on its home page.

As for the site’s content, it is largely repurposed NewsHour items, offered in multiple forms and with a few added features. Along with the audio and video links, there are links to past stories and external links to sites of interest. For instance the lead piece on January 9th was a transcript from the January 8th show, but it also included maps, lists of “key players” and a timeline among other things.

NewsHour is definitely not a site to visit if a user is looking for the latest news on a large variety of topics, but for focused coverage on a few – usually very current – topics, it offers a lot.

Reuters News Service (www.reuters.com )

Like 19 th century wire service of its name, the main thrust of the Reuters web site is the latest news headlines. The page is filled with news reports across a wealth of categories— U.S., international, Investing, business, science, and many more. As the wire service is known for, the reports themselves are unadorned, focused primarily on articulating the information at hand. A few key features though—one of which is it being open to the public—moves the Web site beyond the image of the age-old wire service.

Overall the site scored in the highest tier in only one area—editorial branding—and the lowest in four.

With staff reporters spread throughout the world, Reuters has no trouble filling its vast pages with original, bylined content, giving it the highest score possible for editorial control and branding. Branding here does not imply voice, but conveys the more traditional sense of original content and strict editorial practices. The bylines are clearly there for added authority and accountability rather than to feature the voice of staffers.

For a news outlet that was never before even available to the general public, Reuters places a good amount of emphasis on allowing the public to make the web offering their own--customization. Users can create their own home page structure to greet them each time they return, can subscribe to multiple RSS feeds and have news delivered to the mobile phone. The ability to search their vast array of content is more limited, with only a simple key word option and for now anyway, the site had skipped over the podcast phenomenon.

User participation and multimedia use appear to be not so highly emphasized. Beyond the ability to email the author of a news story, users must keep their views to themselves. When it comes to story forms, Reuters has initiated quite a strong video news service with many stories offered both as narrative and video reports. Other media forms, like live streams, Q & A’s and user polls are left for other sites.

The site also fails to take advantage of the potential depth of news stories. Though constantly updated, the site does not embed links into the news reports and often does little to try to link stories together.

For revenue, the site at this point relies more on advertising than on direct user fees. The site averaged 7 different ads on the home page with all content and archive material a free service for visitors.

Salon.com (www.salon.com)

Salon.com has often been thought of as Slate’s less affluent and smaller sibling — it was launched at roughly the same time, 1995, also as a Web-only magazine. Salon.com in 2006-07 is an attempt to carve out a niche as a place where “you’ll directly support independent journalism,” the site says. The result is something akin to an online version of Mother Jones, much more predictably liberal than Slate, with a few dashes of pop culture and sports thrown in.

It also differed in the scores it earned. The site stood out for promoting its own branded content, where it earned top marks. In every other category, Salon by our metrics earned mostly low-mid range scores.

Upon reading the content, the brand becomes quickly evident. Reports generally feature a first-person voice. Politics is a mainstay, but there is also a lot of culture as well. And often the two come together, such as the January 22 review of movies at the Sundance Film Festival. “You can start out a weekend at Sundance, as I did, irritated by all the minor inconveniences of this place,” the review began, “and end it as I also did, sitting in a roomful of strangers weeping at an impromptu late-night speech delivered live by Dick Gephardt.”

Also striking is the number of ways Salon.com aims at raising revenue. There are five outside ads on the site, split between two advertisers and a prominent advertisement for joining Salon Premium for $35 a year. That membership gives users access to Salon.com’s discussion forums and the ability to skip ads on the page as well as some benefits that have nothing to do with Salon — subscriptions to Wired and The Week. Despite this, the site was in the third tier of our revenue streams category in part because it didn’t feature many ads – only eight.

The site had been redone between the time of our inventory, October, and the New Year, and had added podcasts and video to its homepage. It did not score highly in most categories in our examination, however.

It was in the third tier in terms of customizability. Users could not modify the home page and there was no mobile version of the site available – though the site would have ranked somewhat higher after its additions. The same could be said about its multimedia ranking, where it was in the bottom tier. The big video link now on the front page would have lifted that score as well.

Its score for the level of user participation, also in the third tier, was unchanged though. There are live discussions and users can email story authors, but the site does not include user content or things like polls. Its third-tier depth score also would have been the same. The site’s relatively infrequent updates – three a day – helped keep the figure low.

San Francisco Bay Guardian (www.sfbg.com)

The San Francisco Bay Guardian is one of two alternative weekly newspapers in San Francisco, and one of the few papers in the country that is still independently owned. Like most “alt-weeklies,” it is known for its local investigative pieces and extensive entertainment listings. Its online version is pretty much the same thing—literally. All of the reported pieces come straight from the current week’s print edition. The web specific content comes if two forms. A right-hand column highlights (in red-text that often runs together) a list of daily “picks”—cultural events about town. Second, a block in the upper left-hand column offers five blogs. The blogs—one on music, arts and culture, politics, San Francisco and a featured blog by Bruce Bergmann—provide more recent musings than those in the print edition, but are not nearly as active as some. On the days we studied, the most recent postings on most of the blogs were four days old.

As a site that mostly proffers it print-work along with city calendar listings, it scores low in most areas of Web potential. Its highest ranking, not surprisingly, is in the editorial brand. The work is all by SFBG staff. The report’s byline is often not only attached to the story, but featured on the home page along with the headline. Voice is clearly a main thrust of the site.

It welcomes visits but doesn’t do much to compete with other online options. The ability to email authors and post comments to stories or blog posting gives the site a few marks for user participation, but there are no options beyond that, keeping it in the low to mid tier in this category. Customization is even scarcer with a simple key word search as the only way users can take control of the headlines they see. How about multimedia? Suffice it to say in our study we found 95% of the content to be straight narrative. The other 4% was still photos.

When it comes to revenue streams, the site has spent some energy placing ads—an average of 8—prominently on the home page. If you don’t mind wading through these, the rest of the content is available for free. Registration is optional and all past editions of the paper (and website version) are available free of charge.

Slate (www.slate.com)

Though it is one of the pioneers in the world of Web journalism, most Americans who regularly visit the Internet for news are probably at least aware of Slate, the online magazine founded in 1996 by Microsoft and run initially by Michael Kinsley, the highly regarded editor who helped revive the New Republic in the 1980s. Since it began, Slate has gone through several redesigns, a change in editors and a change in owners.

Through it all it has retained a distinctive look, feel and approach. Of all the sites examined, Slate probably uses visuals the most prominently — almost in place of headlines.

In our content analysis, Slate might be called the site that offers Its Brand, Your Way. The site clearly is offering a team of writers and commentators, with a high degree of editorial quality control. But, it also stood out for the level of customization allowed. It was one of the few sites studied, along with NPR, to stand out for that particular combination.

The opening screen features several prominent photos or cartoons, each linking to a story or feature. There is text on the page, but the pictures dominate. The lead piece in the center of the page, twice as wide as any other column, is anchored by a photo. The headline for the piece even runs within the picture, and there is no teaser text. Under that lead item are five smaller items lined up in a row, each with a small photo and a headline.

Slate may be owned by the Washington Post and have an affiliation NPR, but its content is its own. There are no links to pieces from the Post or the wires on the homepage to give users the latest stories. From the beginning the site has taken great pride in its editorial voice — usually “smart” and often counterintuitive. The pieces rarely stress reporting, but rather about offering different views on topics in the news. On January 19, for instance, the lead article for the site was “How the Camera Phone Changed the World — For the Worse.” The piece recounted the rise of the camera phone’s prominence in news events, such as Saddam Hussein’s hanging. “A camera on a phone has only aided the perverted, the nosy, the violent, and the bored,” the piece opined. As such, it scored at the very top of the sites studied for branded control of its content.

It earned its high marks for customization with multiple RSS and podcast options featured prominently. Mobile phone delivery was also available back in September; a feature found only on a few of the sites studied.

The site also put notable emphasis on allowing users to participate. They were welcomed to comment on stories. There were links to most-read and most-e-mailed stories and there were ways to e-mail the authors of stories.

After quality narrative and giving users a lot of room to participate and customize the site, Slate became more typical.

Even with the heavy use of photos, the site scored in the bottom tier for multimedia potential. On the days monitored, 85% of the content on the front page linked to narrative text only. There is some presence of video, slide shows and interactive graphics, but despite a partnership with National Public Radio there were few audio links.

It also is not doing much to exploit the potential of the web for depth. Its score there was hurt by updating less often than other sites and by not packaging related stories together.

When it came to the level of revenue streams evident on the site, Slate scored in the low mid range, second from the bottom. It boasts relatively few ads and its experiment with paid subscriptions was abandoned some years ago.

Slate has grown immensely, adding new features and blogs in its 10 years, and is climbing the ranks of most-visited sites. And in an age when people are pointing to multimedia as the Web’s next wave, Slate seems happy to stake it position as the Web’s version of the New Yorker — relying heavily on writing but minus the heavy reporting, of course.

Time (www.time.com)

At the start of 2007, Time revamped and re-launched its Web site. It added new features, limited its color palette and cleaned up a site that was fairly cluttered. The new site is more organized and simpler without being sparse. It looks and feels more like the online home of a new Web outlet than it did before and less an online parking space for the magazine.

Still, some of what we found on the site in October still held true in January. For instance, the first thing a visitor is likely to notice is that Time is not alone here. Signs of its partnership with CNN — another news outlet owned by Time/Warner — appear in the header. But there is more brand differentiation now than before. In the earlier incarnation, the site offered “The Latest Headlines from CNN.” That has been replaced by “Latest Headlines,” which lists 10 news items from a variety of sources, CNN among them.

The new Time.com is also an environment more distinct than before from the print magazine. The image of the current week’s magazine cover, for instance, is pushed further down on the page, rather than appearing in the top right hand corner.

One thing the old and new sites have very much in common, however, is that everything here is still free.

Visually, the new Time.com uses a cleaner three-column format as opposed to the four-column approach it used to have. And while the old site had pictures scattered all over it, the new one features only a changing slide-show picture, with an ad on the right side and a row of three photos in the section below. The layout is modular.

The old cluttered Time.com was not without its advantages. It was one of the more customizable Web sites, finishing in the top tier in part because it offered several different RSS feeds, podcasts and a mobile version of itself. It also finished in the top tier for branding, using human editors to make decisions about layout (rather than computer programs) and using bylines on staff copy. The site also relied heavily on its staff for lead stories – more than 75% of its lead pieces carried staff bylines.

It scored lower, in the third tier, in depth. Its score was hurt by offering fewer updates than other sites (something true of most magazine sites) and not using embedded links to take readers further into a subject

Time put even less emphasis on multi media (it finished in the bottom tier). This is a text based Web site. It also earned the lowest marks for user participation. It offered users little in the way of communicating or reacting, not even the opportunity to send emails to authors.

Time also does not have a significant number of revenue streams on the site at this point. It did not have many ads – eight – and it did not charge for any content.

The new Time.com seems to place less emphasis on allowing users to customize it — it certainly highlights customization less—and is more focused on presenting users with a clean, uncluttered first view of the page. It still has multiple RSS feeds and podcasts, and a link to get a mobile version of the site, but those links are at the bottom.

On the other hand, blogs have multiplied. Andrew Sullivan’s Daily Dish is still here (though Sullivan announced that his blog was moving to Atlantic.com), and it has been augmented with blogs about Washington (Swampland), The Middle East and entertainment (Tuned In). The site also added a column called “The Ag,” which stands for aggregator, which talks about what’s news in other media.

Interestingly, the redesign actually left the site with fewer ads. There were a total of four in September, placing it in the bottom 10 of the sites we looked at. But there were only two in January and they were coordinated for the same product — Bentley College. That approach, also taken by Economist.com, makes the ads feel more like an integrated part of the page and less noisy.

The strength of Time.com is its willingness to reach beyond its own pages for content. There is a lot here. The 10 stories in the “Latest Headlines” box are usually wire copy, but they do at least offer users a link to major breaking news. And such fare as Andrew Sullivan’s blog not only brings more outside content to the page, its teaser text can definitely bring a different flavor, as it did on December 9, 2006: “If the Democrats have the balls to restore our constitutional order I may have to stop being an independent for awhile.” Not exactly journalism in the tradition of Henry Luce.

Perhaps most interesting, the new Time.com does not make a point of offering content from the magazine. The daily stories from Time’s staff, on the page’s top left, are often shorter than magazine stories and feature either a different tone or some exclusive tidbit, and Time.com clearly differentiates between them and the stories on the rest of the site. And articles from the actual magazine are hidden down the page under the image of that week’s cover. Users have to click the image to get to those pieces.

It all amounts to a step toward a Web environment that is more than the magazine, with plenty of short items and Web-only content. That is what Time promised in the summer of 2006 when it said it was going to turn to the Web more and more, particularly on breaking news.

Topix.net (www.topix.net)

The first thing a user probably notices at Topix.net is the breadth of information available. The site does not generate content, but is an aggregator plain and simple. It draws from thousands of outlets ranging from U.S. newspapers to wires to foreign news sites.

That diverse mix is evident from the headlines that fill the homepage. The top nine may feature nine different news outlets from nine different countries. Under those are three headlines from your home area — something the site automatically identifies when you arrive.

Still, the site scored in the lowest tier of sites for depth, or making use of the potential of the web to go deep into a topic. Its rating here was hurt by the fact that it offered no archive and stories on the site existed as separate items, with nothing connecting related content together.

Topix.net scored somewhat higher, in the low-mid range, for customization. The site had strengths in that area – users, for instance, can further customize the local news section by choosing from a list of 30,000 different U.S. cities. And if a user changes his or her home location, the site remembers it. Other kinds of customization found on other sites, however, were absent here. There was just a single RSS feeds and at the time of the study, there were no podcasts or mobile phone delivery options.

The site puts somewhat more emphasis on allowing users to participate in the site. It scored in the second tier here. The page’s entire right column is reserved for readers’ comments, with a list of topics and the number of comments posted under each. Every headline also has a similar place for feedback.

As one might imagine with an aggregator site, the branding score for topix.com placed it in the bottom tier, with no content coming directly from the site and a computer program selecting the stories that appear on the front page.

Nor is Topix oriented to multimedia. It earned low marks in that category. Its home page was mostly text with roughly 90% of it being narrative. There were also no audio or video links.

The site also scored in the bottom tier for the level of revenue streams to the site. There was no paid content here and few ads.

That limited number of ads, though, helped with Topix.net’s clean-feeling front page. Ads are limited to the far right of the screen, after the user comment column. Here, too, localizing comes into play – the ads are local ones from Google about everything from cars to jobs to court records.

Unlike other aggregators, such as Google, Topix doesn’t change the top news headlines all that frequently. While there is no human editor on the site (its headlines are selected by a computer program), the program operates at a little slower pace than others. At noon on January 10, 2007, its lead story was about the possible of the chief of Al Qaeda in Somalia had been up for seven hours. Other “latest” stories had been there six hours, 10 hours and 13 hours. In other words, the stories that show up on the homepage are not just the latest wire copy. That can have the virtue of not piling the most recent story on top when it’s not necessarily the most important.

USA Today (www.usatoday.com)

As this report went to press, the Web site for USA Today underwent an extensive redesign. The redesign took steps to advance in several of the categories that we identified. It now offers more video and other multimedia components. It also facilitates more of an online community by allowing users to contribute their voice to the site and tailor it to their needs.

The study of the site—and this analysis—was performed in February of 2007, before these changes.

The Web site for USA Today carries over a lot of the newspaper’s look and feel. The blue USA Today header box is on the site as are the color-coded section names, a red box around Sports, a green one around Money, and so on. Other than a flash picture slide show on the top right of the screen usatoday.com feels a lot like USA Today online.

The site also has carried over the simple, modular layout of the newspaper. It essentially features a two-column layout, fewer than many of the newspaper sites we visited, that keeps things fairly simple. There is a lead story with a photo just under the masthead on the left and next it on the right is a list of six headlines, some with supporting material like photos and analyses and others without, and no teaser text.

But the impression that this is the newspaper in another platform is not entirely accurate. Indeed, this is one of the few newspapers that did not earn top marks for branding, or promoting its own content and editorial control. It scored in the second tier. To stay immediate, it relies heavily on wire copy.

Indeed, in our sit inventory, USAToday.com didn’t particularly stand out in any area. In our loose groupings, it was Jack of All Trades.

The site ranked in the second-tier on customization partly because of the large number of podcasts and RSS feeds available. That rating was also helped by giving users the chance to modify the home page. But the site is not as mobile as some others and offers no podcasts.

USAToday.com was also a second-tier finisher on multimedia . The site is not particularly text heavy; photos made up a larger percentage of the space. But there were no large audio or video components, and limited offerings, relative to other sites studied, in the way of video or audio links.

The site fell in the lowest tier relative to others when it came to the level of user participation. There was no chance for users to add content, no live discussions, and few chances to even e-mail authors.

And the site scored in the third tier for depth, the degree to which it linked stories in packages, or went deeper with paths to relevant archives, background, documents, interview transcripts and so on.

USAToday.com fell toward the middle in terms of the number of revenue streams on the site. There 13 ads on the page. The site does not charge for content, even its archive.

Unlike the paper, which publishes Monday through Friday, the site is always adding material, even on weekends, though it relies heavily on wire services to do that.

Staff people do sometimes contribute as news breaks, but much of the material comes from the Associated Press. Even in its lead positions the site is comfortable using wire copy.

On the afternoon of February 11, for example, six of the seven stories in the lead area were from the AP. That is particularly interesting since the site is owned by Gannett and could, in theory anyway, stock its page with stories from the papers the company runs around the country. The newspaper does pull stories from other Gannett papers at times.

Washington Post (www.washingtonpost.com)

In contrast with some sites, particularly that of the New York Times, the Washington Post has gone out of its way to create a different identity on the Web from the one it has in print. The Web identity is high-tech and defined by multimedia and the ability of users to customize the site as their own.

The traditional logo of the paper is small and off to the side. The dominant masthead is the two-toned washingtonpost.com logo in black and red, which of course we do not see in print. The layout is a clean, three-column format, unlike the paper product.

In our content analysis, Washingtonpost.com scored highly in more categories than almost any other site examined. It was one of only two sites of the 38 studied, indeed, not to earn low marks in any category. And it was one of only four to earn the highest marks in three of our five content categories — in our loose groupings, one of four High Achievers.

The site earned top marks for branding, or the degree of original content and editorial control. More than 75% of the content was staff written.

Yet the site also earned top marks in our content audit for customization. Visitors could create their own page layouts, subscribe to content through multiple and highly promoted RSS feeds, and arrange to receive a mobile version of the site.

And it was also a top-tier site for its use multimedia formats. A visitor is more likely than on most sites to find video, photo and Q&A links on the homepage. Live chats with Post staff members and newsmakers are featured prominently. All this also meant that the amount of plain text was smaller than on other sites. This destination is about more than reading stories.

The site earned second-tier marks for the level of user participation. That, however, still put it in the upper half of all the sites studied in a category where only three sites earned top marks.

The site was a high-scorer on economics, landing in the top tier with somewhere between 15 and 18 ads usually on the homepage. That includes advertisements for site features and logos of sister sites like Newsweek, Slate and MSNBC.

Washingtonpost.com earned its lowest marks for depth, in the third tier. That meant the site did not embed a lot of links in and around stories for people to go deeper, to background, documents, full text of interviews and various other options, including easy access to archives.

To some extent, given the nearly infinite set of options the Web offers that may reflect the fact that depth and immediacy are hard to balance. The content here starts out in the morning, as most newspaper sites do, with stories from the print paper, and throughout the day the site is updated to add new material.

The overwhelming majority of the stories, upwards of 90%, feature staff bylines. But washingtonpost.com is not afraid to run wire copy, particularly in sidebar stories that provide supplementary information around staff-written lead pieces. And the site takes great pains to include a lot of supplementary copy to go along with its featured pieces, including links to photo presentations, staff Q&As and interactive graphics. Generally, each featured story has at least two extra sidebar links.

Washingtonpost.com is a site that takes advantage of much of what the Web has to offer, adding a lot of interactivity to expand the paper’s identity beyond its print franchise of heavy coverage of the federal government.

The Week (www.theweekmagazine.com)

The online home for The Week, www.theweekmagazine.com, can best be described as exactly that — a place for the online versions of the content that appears in the print title. It is a sparse environment, and appears by and large to be an afterthought.

Its narrow, three-column format is evocative of a magazine page and fills only about half the screen. Only the wider middle column holds real content, which is labeled “In the Magazine…” and features a large photo. The narrow left column is saved for navigation. The current week’s cover image is displayed prominently in the narrow right-hand column (it links to a page where users can subscribe to the print version) and is followed down the page by ads. Users coming to the site are greeted by only three images and three story links on their first screen.

All told, there are 24 links directly to stories on the page, an extremely low number among the sites we examined.

There is no place for breaking news and no attempt at posting daily staff-written content.

In fairness, The Week’s format, which involves giving a weekly summary of news accounts from around the nation and world, may not really be suited to the Web. First, publishing more often online goes against The Week’s raison d’etre: the premise that people are overloaded with information and need a simple, short synopsis of events that they can carry with them. Second, if one wants a quick look at what’s going on in the world from several sources while online, online aggregators already offer many such services.

But that limited approach is ending. The magazine has announced it will soon launch a new Web site that will do on a daily basis what the title does every week — condense news from around the nation and world.

Looking at the rankings in our site inventory, The Week was not a big winner in much of anything. It scored well in one category, branding, where it was in the top tier because editors choose what content goes on the page and all of it is generated in-house – though it must be noted the content consists of summarize stories from other outlets.

In all other categories, the site was in the bottom tier. There were, in essence, no opportunities for customization.¹⁶ The page’s only multimedia only components were the photos it ran. There were none of the participation options (user blogs, author email addresses, live chats) we looked for on the site. The site was not updated during the day (in fact only once a week, at the time of our inventory) which hurt its depth score. And the site had few ads – only six – and no fee content which placed it near the bottom in revenue streams.

While many people look at The Week as the print version of a Web aggregator, its Web presence pays little or no heed to the capabilities of the Internet or the on-line world’s 24-hour news cycle. It is the new-media home of a very old-media approach.

WTOP Radio (www.wtop.com)

Washington-based WTOP represents an entirely different look at radio online, one which is simultaneously local and national in scope. The homepage features an obvious lead story; an invitation to visitors to listen to WTOP radio news; weather and traffic information for the day; and a prominently featured local news section. Advertisements also have a heavy presence.

WTOP.com ranks in the top tier for offering customizable options. Users can subscribe to both RSS feeds and podcasts, and its RSS feeds are relatively varied (totaling 12 different feeds, all of which are different categories of news). WTOP also goes further than NPR in providing on-demand listening options: visitors can sign up for content delivery (headlines, weather, traffic and breaking news) to their mobile phones.

WTOP.com is still largely about narrative text (it makes up close to three-quarters of the content with still photos the second-most common form). Still, it did make some effort at multimedia forms (falling in the mid-level range of all sites studied) with some presence of video stories, slideshows, interactive graphics and yes, live streaming audio. Listening makes up only a small though prominent part of the Web site’s homepage with a section called “ Audio Center” that is devoted to live streaming of the WTOP radio station content.

The site puts less emphasis on its own original branded content, relying mostly on the A.P. The heavy use on wires reflects the larger reality of radio today — even in Washington, D.C., national and international news comes heavily from sources other than the station itself. And even for local stories, only some had WTOP staff bylines; most came from the A.P., along with a few contributions from the Washington Post.

Economically, WTOP seems to emphasize revenue streams from its Web site, as opposed to simply leaning on its radio station for cash-flow. It averaged close to 20 different ads on its home page, only one of which was self-promotional. Ad eyeballs, it seems, are the way users pay for use of the site. All the content is free and there no registration is necessary.

Yahoo News (www.news.yahoo.com )

At first glance the news page for Yahoo.com looks a lot like a dumping ground for the newswires, particularly the AP. The top stories are all wire, as are the pieces in the secondary “More Stories” area. But look a little closer and there is more going on here on this site. There is video from a number of sources, including CNN and ABC News. And further down the page there are tabs to look at headlines from a number of sources including NPR, USA Today, the Christian Science Monitor, Congressional Quarterly, Business Week, Fashion Wire Daily and the Sporting News. Outlets specializing in specific topics are grouped under their topics headers – like Business, Entertainment, Travel and Sports. The site is a mix of approaches seen on other aggregator sites. The news here makes a comprehensive “newspaper” like page, but news is segregated by outlet.

In our site inventory, Yahoo’s news page didn’t really stand out in one category. It scored fairly well on customization, ranking in the second tier. Users could modify the page considerably and the site remembered the changes they made on subsequent visits. There were multiple RSS feeds and an advanced search option. But the site didn’t offer podcasts on its page or a mobile version.

It was also a second-tier site when it came to user participation. It offered a link to a page with user content, let users rate stories and offered most viewed and most emailed story lists. But there was no user blog, live discussions or polls.

Yahoo News scored lower on branding, in the third tier. It was hurt by the fact that it simply pulls material from other places, but the site’s human editors gave its score a lift. It also scored in third tier on depth, hurt by the limited number of stories it linked into packages. And it was in the bottom tier on multimedia. There are some video links here, but no audio and the page is dominated by text.

Its revenue stream also scored fairly low, in the third tier, with only eight ads on the page.

The strength of Yahoo News’s content is that it is always fresh. The site is put together by real people, not a computer program, and they apparently comb the news all day long looking to make updates. So at one point on March 7 the lead story was an AP account of an airliner that overshot a runway in Indonesia and a few minutes later it was a Reuters story about civil strife in Iraq. Users of the site, in other words, are not likely to miss the big stories of the day with human editors constantly updating the news. But if there is a drawback it is that those lead stories are wire stories – long on facts, but often done as the news breaks and short on context.

Footnotes

1.Mike Davidson, “ABC News Redesigns,” October 9, 2004, Mikeindustries.com.

2. Paul J. Gough, “ABC News is courting next gen on Internet,” October 31, 2006. Hollywood Reporter

3. Ibid.

4. Mark Glaser, “Brian Ross: Foley Story a Watershed for ABC News on the Web,” Media Shift, October 25, 2006

5. “CBS Interactive taps Quincy Smith,” MarketWatch.com, November 6, 2006

6. Scott Leith, “CNN to Start Web site for Viewer’s Journalism,” the Miami Herald, August 3, 2006; PEJ, Online News Ownership section, State of the News Media 2006, see chart on top online news sites at: http://www.stateofthenewsmedia.com/2006/chartland.asp?id=139&ct=line&dir=&sort=&col1_box=1&col2_box=1&col3_box=1&col4_box=1

7. Elise Ackerman, “New media making deals with old news providers,” San Jose Mercury News, July 31, 2006

8. As Greg D’Alba, CNN’s head of marketing and sales, was quoted as saying, event marketing gives the CNN brand the opportunity to extend itself beyond the television channel to all digital media, specifically to initiatives like podcasts and video-on-demand

9.On September 11, 2006 it used CNN Pipeline to stream the TV channel’s coverage of the original terrorist attacks, exemplifying how it can be used for value added content.

10. While Pipeline is fee-based, most digital offshoots and hybrids are typically advertising-supported and therefore free for consumers. Unofficially, many Internet-savvy users have figured out how to download virtually any TV show they want for free. Using file-sharing software, they have set up Web sites where they share digital video recordings. The most prominent of those is YouTube.

11. The page falls into three columns — with the left one designated for site navigation and the other two the same size. The center column is topped with a large red box labeled “top story.” The far-right column is topped with boxes for “Today’s views,” three new daily features the site added in December.

12. Jon Fine, “How Fox was Outfoxed,” Business Week, February 13, 2006

13. The two newscasts are also available on the News Corp. sister site MySpace.com and through iTunes. Customers who have video capability on their Cingular, Sprint or Amp’d phones can also get them. Paul J. Gough, “Fox Making News in a Flash,” Hollywood Reporter, October 30, 2006

14. Glen Dickson, “Fox News Channel Provides Audio-to-Go,” Broadcasting & Cable, January 17, 2007

15. See the MSNBC Mobile section on the Web site for details - http://www.msnbc.msn.com/id/16192026/

16. The home page, www.theweekmagazine.com, was not customizable. It offered no options for a mobile version of the magazine and no RSS feed.

Methodology

As the Internet continues to change the news industry and the methods of production, circulation and consumption, it is ever more critical to understand the emerging trends and news outlets available online. Citizens must make daily choices about what sites to go to for various kinds of news information, but it is largely up to them to figure out which site can best fit their needs at the moment. And in many instances they may be making choices without fully understanding why.

The content analysis element of the 2007 Annual Report on the State of the News Media was designed to try to sort through the many different kinds of sites that offer news information. What do some sites emphasize over other things? Are there common tendencies? The creation of the study and the analysis of the findings was a multi-step process.

Sample Design and Web Site Capture

To assess the range of news Web sites available, we selected 38 different Web sites that provide such information. The sites were initially drawn from the seven media sectors that PEJ analyzes in each annual report:

Newspaper (9 sites from a mix of national, regional and local papers)
Cable news (3 sites)
Network News (3 sites, commercial and public; NBC’s online identity is merged with that of MSNBC)
Local TV (2 sites)
Radio (2 sites, one national network and one local)
Weekly news magazine (3 sites)
Online-only news sites (10 sites ranging from aggregators to citizen-based sites to online magazines)
Online blogs (4)

In addition, we included one foreign broadcast site (BBC News) and the site of one wire service. (Due to the language barrier, Ethnic, non-English language Web sites were not included in the study.)

The result was the following list of sites:

Sites Studied

ABC News Com http://abcnews.go.com

BBC News http://news.bbc.co.uk

Benicia News http://www.benicianews.com

Boston Phoenix http://www.thephoenix.com

CBS11 TV http://cbs11tv.com

CBS News http://www.cbsnews.com

Chicago Sun Times http://www.suntimes.com

CNN http://www.cnn.com

Crooks and Liars http://www.crooksandliars.com

Daily Kos http://www.dailykos.com

Des Moines Register http://www.desmoinesregister.com

Digg http://digg.com

Economist http://www.economist.com

Fox News http://www.foxnews.com

Global voices http://www.globalvoicesonline.org

King5 TV http://www.king5.com

Los Angeles Times http://www.latimes.com

Little Green Footballs http://www.littlegreenfootballs.com

Michelle Malkin http://www.michellemalkin.com

MSNBC http://www.msnbc.msn.com

AOL News http://news.aol.com

Google News http://news.google.com

Yahoo News http://news.yahoo.com

New York Post http://www.nypost.com

New York Times http://www.nytimes.com

NPR http://www.npr.org

Ohmynews.com http://english.ohmynews.com

PBS NewsHour http://www.pbs.org/newshour

Reuters http://www.reuters.com

Salon http://salon.com

San Francisco Bay Guardian http://www.sfbg.com

Slate http://slate.com

Time Magazine http://www.time.com

Topix http://www.topix.net

USA Today http://www.usatoday.com

Washington Post http://www.washingtonpost.com

The Week Magazine http://www.theweekmagazine.com

WTOP Radio http://www.wtop.com

Web sites were captured by a team of professional content coders. At each download, coders made an electronic and printed hard-copy of the homepages for each site as well as the top five news stories. Prominence was determined as follows:

The biggest headline at the top of the screen is the most prominent story. It may or may not have an image associated with it. The second-most prominent story is one that is attached to an image at the top of the screen, if that is a different story from the most prominent story. If there is no image at the top of the screen, (or there are two significant stories attached to the same image) refer then to the next-largest headline. To determine the next-most-prominent stories, refer first to the size of the headlines, and then the place (height) on the screen. If two stories have the same font size and are at the same height on the screen, then give the story on the left more prominence.

Stories were defined as:

Any headlines that linked to a landing page within the Web site rather than a specific news report were omitted, as were links to landing pages of other Web sites.
We did include links to specific stories on other Web sites as well as video or audio stories.

Capture Timing

Web sites were initially studied from September 18 through October 6, 2006. For that initial review, each site was captured and coded four different times. For two captures, the research team coded for the entire set of variables, both the homepage analysis and the variables related to the content of news stories. The other two rounds of capture were coded only for the variables relating to the content of the lead stories.

Each site was then studied again during the week of February 12-16, 2007, and coded separately. Results for the two time periods were compared. In cases where features had changed, we closely examined the site again to confirm the change or correct inconsistencies. Final analyses were based on the confirmed February site scores.

Coding Scheme and Procedure

To create the coding scheme, we first worked to identify the different kinds of features available online — everything from contacting the author to quickly finding just what you want to receiving your news free — and how they could be measured. After several weeks of exploratory research, we identified 63 different quantitative measures and developed those into a working codebook (see list of primary variables below).

Coding was performed at the PEJ by a team of seven professional in-house coders, overseen by a senior researcher and a methodologist. Coders were trained on a standardized codebook that contained a dictionary of coding variables, operations definitions, measurement scales and detailed instructions and examples. The codebook was divided into two sections. The first was based on an inventory of the Web site’s homepage. That was performed three separate times — twice in September, 2006, and once in February, 2007. The second component involved coding the content of news stories themselves. We included the top five stories for the variables related to the content of the news and took the average score for each variable.

Before coding began, coders were trained on the codebook. Excel coding sheets were designed and used consistently throughout the process. Meetings were held throughout to discuss questions, and where necessary additional captures took place to verify findings.

Coders followed a series of standardized rules for coding and quantifying Web site traits. Three variables deserve specific mention:

1. Multimedia components on the homepage: Coders counted all content items, defined as links to all material other than landing pages or indexes of some sort. Included were narrative text, still photos, interactive graphics, video, audio, live streams, live Q&A’s, polls, user-based blogs, podcast content and slide shows. Next, the coders tallied the total number of content items on the page as well as the totals for each media form and entered the percentages for each into the data base.

2. Advertisements: In counting advertisements on the homepage, coders included all ads, from obvious banners and flash advertisements to the smaller single-link sponsors of a site. Self-promotional ads were also included in the total. The idea of this variable was to estimate the economic agenda of a given site based on the amount of advertising on the homepage. Advertisements on internal pages were not included in the tally. Because of day-to-day variance in the total number of homepage ads, the final figure was either the average based on all the visits to a site or, in cases where a site redesign had clearly occurred, the latest use of ads.

3. Also in the Byline variable, blog posts required special rules. In counting bylines, for instance, researchers coded a blog entry as if the entry was posted by the blog host—John Amato on Crooks and Liars, for example. If the blog entry was posted by a regular contributor or staff, the “story” scored a “2.” And if the blog entry was posted by an outside contributor, not bylined, or consisted primarily of outside material (an entry, for instance, that simply said, “Read this,” followed by an excerpt from another source), then the post received a score of “3,” the lowest on the scale of original stories.

Analysis

In analyzing the data, we were able to group variables into six different areas of Web emphasis: User Customization, User Participation, Multimedia Use, Editorial Branding and Originality, Depth of Content and Revenue Streams.

Customization includes

Homepage customization (allows user to tailor page)
Search options (simple or advanced search)
RSS feeds — options and prominence
Podcasts — options and prominence
Mobile phone delivery options

Participation includes

Users’ contribution to content
Scheduled, live discussions
Ability to:
- e-mail author
- post comments
- rate the article/post
- take a poll
List of most-viewed stories
List of most-e-mailed stories
List of most-linked-to stories

Multimedia includes

Percent of homepage content devoted to:

Narrative
Photos/non-interactive graphics
Video
Audio
Live stream
User blog
Live Q & A
Slide show
Poll
Interactive graphic

Editorial Branding includes

Breadth of sources
Editorial process
Use of bylines
Direction of story links (internal or external)

Story Depth includes

Frequency of updates
Use of related story links
Use of archive links

Revenue Streams includes

Registration requirements
Fee-based content
Archive fees
Number of homepage ads (self-promotional and external)

Codes within each variable were translated into a numerical rating from low to high for that particular feature. Then PEJ research analysts produced an Excel template to tally the scores (summing the variables) for each site within the six categories. Thus for each of the six categories, each site had a final score. The range of scores was then divided into four quartiles and sites were marked according to which quartile they fell into.

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Newspapers

Intro

By the Project for Excellence in Journalism and Rick Edmonds of The Poynter Institute

Is the newspaper industry dying? Not now. On an average day, roughly 51 million people still buy a newspaper, and 124 million in all still read one.¹

The industry is recording pre-tax profit margins in the high teens, and online editions are adding readers and advertising revenues at a healthy pace. When online and print readers are combined, the audience for what newspapers produce is higher than ever.

But the print newspaper is unquestionably ailing. Circulation is declining. Advertising is flat. As Warren Buffett said at his annual investor’s meeting in May 2006 newspapers appear to have entered a period of “protracted decline.”²

The search is on for new business models, but success is not guaranteed. And while the fundamentals might reverse, there is no compelling case that they will.

Newspapers are focusing more on improving their journalism online. But it is not clear if the Web will ever make enough money to support journalism as we know it in print. The worry is that newspapers may be stuck with a traditional manufacturing cost structure that cannot be reduced or shifted fast enough.

In 2006, the traditional indicators were all negative:

*Circulation fell even faster than in 2005 — down 2.8% daily and 3.4% Sunday for the six months ending in September compared to that period a year earlier.³

*Industry revenues were flat, a poor showing in a non-recession year. On the print side, retail, national and automotive classified all showed weakness. Online growth left most companies roughly even in revenues for the year.

*Earnings fell. Wall Street responded by marking shares of publicly traded companies down by about 14%, after a tumble of 20% in 2005.⁴

*At big metro papers, such as the Dallas Morning News and the Philadelphia Inquirer, there were deep newsroom cuts. Together with some closings of national and international bureaus, the trend was to smaller, local papers with diminished ambitions.

The outline of what readers might be losing in coverage is still emerging. For now, metros have pulled way back from coverage of more remote areas. Unglamorous watchdog coverage of council and school board meetings appears to be suffering. Copy editing is being reduced. Already in 2007, several papers have collapsed business news and metro into a single department.

The industry looked for a more positive story by proposing some new audience measures. One of those is the much larger number that reads at least one edition of a paper in the course of a week (as distinct from those who buy it on newsstands or subscribe to it). The total reach of print, online and niche products combined is another. For a sales pitch, the Newspaper Association of America sponsored research showing that print newspapers remain a valued “destination” source for information on stores, products and comparative prices.

Another positive is that the growth in online revenue and readership continued. By the end of 2006, however, there was evidence that the rate was slowing and would slow some more in 2007.

The industry is taking the Web more seriously, and that will probably only intensify in 2007. Many sites are cluttered and due for a redesign that can promote interactivity and create more display space for advertisers. Online enhancements, in turn, are prompting rethinking of the print product — a tighter, more forward-looking and analytical approach on the model of the reworked Wall Street Journal, introduced in January 2007.

The Web clearly is both opportunity and threat to newspapers. It represents a chance to increase audience across new delivery systems and perhaps draw in young people and other readers who have proven elusive in print. Optimists hope that the online advertising will not only grow in revenue but expand in form to include things like local search and e-mail. Already newspaper companies are partnering with former rivals like Monster and HotJobs.

But something else could also happen. The competition online is even greater than in print. It is easier than ever for alternative news sources to start up and lure away audience. And the newspapers’ own online advertising, which increasingly seems unlikely to be sufficient by itself to sustain journalism at anything like current levels, could also further ebb in the face of options with no news content at all, like design-your-own-car company sites, Craigslist and more.

As of now, we find it too soon to side with either the optimists or the alarmists.

All those factors, both the problems and the long-term promise, seemed to manifest themselves in a flurry of ownership changes and the emergence of various private investors as a force in the transactions. But what does the arrival of the new private suitors portend? Are they investors for the long term and for the interest of the papers’ home communities? Or are they rich magnates looking for a plaything? Or will they prove liquidators looking to flip a property? It is simply not clear yet.

Near the end of 2006, groups of newspapers struck separate advertising deals with Google and Yahoo, holding out at least the promise of broader collaboration with the two Internet giants and a boost to online ad revenues.

Newspapers could gain momentum if they demonstrate success, rather than just good intentions, in inventing new lines of Internet revenue. Some strong initiatives that would reduce business-side costs over time would help, too.

More likely, the stage seems set in 2007 for more business turmoil, a negative industry image and further cuts in the newsroom’s capacity to do public-service reporting with distinction.

Footnotes

1. The circulation number 51 million is more current than the figure of 53 million offered by Editor & Publisher, which only accounts for circulation through September 2005. The 51 million is derived by taking the Newspaper Association of America’s “Daily Circulation 2004” and adjusting that for reported 2005 and 2006 circulation losses. http://www.naa.org/trends-and-numbers/market-databank/newspaper-circulation-volume-.aspx and NAA “Daily and Sunday Newspapers 2006 Readers Per Copy,” http://www.naa.org/trends-and-numbers/market-databank/2005-daily-and-sunday-readers-per-copy-.aspx

2. Quoted in Paul Ginocchio, “Warren Buffett Makes Some Dire Predictions for Sector,” Deutsche Bank Securities analyst’s report, May 25, 2006

3. 2006 Editor & Publisher International Yearbook, 86 th Edition, and Newspaper Association of America, “NAA Analysis Shows Eight Percent Increase in Total Newspaper Audience Reach,” press release, October 30, 2006

4. Paul Ginocchio, Deutsche Bank Securities, to co-author Edmonds, February 13, 2007; also Miles Groves, Morton-Groves Newspaper Newsletter, January 22, 2007

Audience

For a third consecutive year, daily and Sunday circulation of America’s newspapers fell sharply in 2006. The losses may moderate in 2007, but few in the industry are now saying the downward trend can be reversed in the foreseeable future. And 2006 in the end was worse than many had expected.

To keep things in perspective, the magnitude of the losses over all is not by itself devastating. Even better, the growth in audience online may be more than making up for the losses in print. The problems facing the newspaper industry are not about readers abandoning what newspaper newsrooms are producing, which is why industry leaders are pushing now for those alternative measures of audience – including the total a newspaper reaches in the course of a week or total reach including the paper, online users and niche publication readers.

Circulation

For the six months ending September 2006 —industry circulation was down 2.8% daily, 3.4% Sunday compared to the same period a year earlier. That was marginally worse than in the same period of 2005, when circulation was down 2.6% daily and 3.1% Sunday.¹ And those 2005 results were considered dramatic, producing headlines about the possible death of the industry.

U.S. Daily Newspaper Circulation

Circulation in Millions, Weekday and Sunday editions, 1990-2005

Design Your Own Chart

Source: Editor and Publisher Yearbook data
Note: Based on 2006 E&P estimates

Average Circulation of U.S. Daily Newspapers

Weekday and Sunday editions, 1990-2005

Design Your Own Chart

Source: Editor and Publisher Yearbook data
Note: Based on 2006 E&P estimates

The losses are mounting. For the last three years, cumulative losses total 6.3% daily and 8% Sunday.²

What may be even more significant than the numbers is the change that the trend signifies. Circulation has been falling in absolute numbers since roughly 1990, and as a percentage of households since the 1920s. Yet much of that history could be attributed to the waning popularity and ultimate closing of evening papers. As recently as 2003, morning circulation was as high as it had ever been.

Now, even those surviving morning papers are beginning to shrink, and some of the country’s most famous papers — the Washington Post, the Los Angeles Times and the Boston Globe — are not immune.

Industry analysts attribute the more recent, steeper declines to many factors, not one or two. Some news consumers, particularly the young, have moved online. The current generation of young adults also includes more people who have no interest in news.

Free dailies are a competitive factor, too, especially in larger cities. The availability of media generally is a rival for giving people news.

The net result is not so much that people are giving up on newspapers altogether as that they read less often. Seven-day-a-week subscribers have become a smaller group; many have switched to getting the paper a few days of the week and skipping others.

There are also some more technical matters. The federal do-not-call registry restricted phone marketing and made using that method to acquire new subscriptions more expensive at a time when newspaper budgets had been tightening. Finally, after circulation-padding scandals hit four papers in 2004, many others also set about trimming their reliance on third-party sales and other loophole categories of paid circulation that were of little benefit to advertisers.

Those trends raise a number of questions. Several newspapers had suggested that once some of the softer circulation numbers were trimmed, the losses in 2006 would lessen. That didn’t happen, but there is some anecdotal evidence that it could begin to happen as early as the reporting period ending in March 2007.

It is also not clear how much the circulation losses will hurt advertising rates. It is possible, some industry executives hope, that many advertisers don’t care about a decline of 2% or 3%.

A grimmer scenario is that the current pace of losses continues or even accelerates, confirming an advertiser perception that newspapers are falling out of favor, and thus depressing the lifeblood of advertising revenue.

Distributing the Pain: Big Metros Are the Big Losers

The most severe losses were in large metro markets like Los Angeles, Boston, San Francisco and Philadelphia, continuing a trend we identified in 2005 and 2004. The top 50 in circulation lost an average of 3.6% daily, September to September, according to the Deutsche Bank Securities analyst Paul Ginocchio, eight tenths of a percentage point more than the industry average.³

Yet there were some even more ominous signs of generalized decline in 2006. Admired regionals like the St. Petersburg Times, the Sacramento Bee and The Oregonian did not escape the trend. Each was down more than 3%. For those who hoped for evidence that more news investment and quality would hold circulation, those dips were a tough signal. Each of these papers lost more than the industry average.

In the two previous years, the three national papers had managed to stay even, but not in 2006. The September-period circulation was off 3.2% at the New York Times, 1.9% at the Wall Street Journal, and 1.3% at USA Today.⁴

A few papers were in positive territory, but they seemed to be special cases: the New York Post and New York Daily News, aggressively promoted tabloids, and the St. Louis Post Dispatch and Cincinnati Enquirer, which had heavy losses in earlier years.

Among publicly traded companies, Lee, with a portfolio of mid-sized papers, was the best performer with a loss of only 0.2% September to September. Tribune Company, which announced in September that it would consider buyout bids, recorded the steepest declines of the large publicly traded newspaper companies. Its circulation losses stood at 5%, with its largest-circulating daily, the Los Angeles Times, leading the other 10 Tribune paper holdings in circulation losses with an 8.5% drop.⁵

The big metros appear to have three particular negatives as they struggle to hold readers. Their markets typically have a high proportion of Internet users and high broadband penetration, facilitating visits to online sites and the offerings of national news outlets. From the opposite direction, many face meaningful competition from suburban dailies and weeklies that dish out hyper-local news regional papers cannot hope to cover. And the big cities, especially those with lots of public transportation, are most likely to attract free dailies.

A New Story: Weekly Readership and Total Audience Reach

Understandably, the industry is looking for a new and more upbeat story on audience to tell. One thread is the sense that some of the “lost” readership is being lost to newspapers’ own Web sites. The problem, in that sense, is a change in platform, not a migration entirely from what the newspaper is offering.

For some years , the Newspaper Association of America and certain companies have touted readership as a more meaningful measure than paid circulation. Readership is the total number of adults who read a paper rather than the number of copies of the newspaper sold. It is of course a bigger number — on average about 2.3 times bigger daily and 2.5 times on Sunday.⁶ It also is a more comparable metric to how television and radio measure audience.

Newspaper readership is falling, too, but not as fast as circulation. According to the Newspaper Association of America, the average weekday readership in 2006 was 124 million, or about 57% of the adult population.⁷ According to the association’s study of the top 50 markets, that represents a 1.7-percentage-point drop from the previous year, and 5.2 percentage points from 2000.⁸

A similarly positive spin is that while approximately 50% of adults read a newspaper on a given day, roughly 76%, according to the Newspaper Association, read at least one issue in the course of a week.⁹ That may not mean a great deal to an advertiser placing an ad on a given day, but it is valid rebuttal to the perception that print newspapers have become irrelevant to most adults. Even two-thirds of young adult Americans, 65% of those 18 to 34, are at least once-a-week readers, according to the association.¹⁰

A third way to look at audience is to add together traditional print audience, unduplicated — exclusive — online audience, and unduplicated audience for the newspapers’ specialty niche publications. The industry has different terms for what that adds up to — total audience, integrated audience, total reach or market footprint. But they mean the same thing.

A major reason the industry likes this metric is that the audience for newspaper online sites and niche publications continues to grow at double-digit rates. Hence the Newspaper Association was able to headline its analysis of results for the six-month period ending September 2006, “Eight Percent Increase in Total Newspaper Audience.”

Is it a valid measure? Certainly it helps the industry’s battered image. It is less clear how well it sells financially.

Not too many advertisers will simultaneously buy across all platforms to reach that overall audience. But having a portfolio of products to offer (including direct marketing as well) does help newspaper sales people as they make their rounds.

The hitch is that the standard measure of online audience is unique visitors per month. That clearly does not equate to circulation or readership on an average day or even in the course of a week. Stronger metrics are under development, and 2007 may be the year that newspaper companies can build a better case to advertisers that at least some portion of those visitors give the online edition a thorough reading on a regular basis.

The New York Times Factor

In earlier reports we have mentioned the New York Times’s gradual shift over a decade to a more national circulation strategy. More than half the paper’s circulation is now outside the New York metro region, and it still has room to grow as it adds printing plants reaching more of the country. We have pondered whether the Times may be draining business from local papers, especially in big, cosmopolitan cities.

A pair of academics, Lisa M. George and Joel Waldfogel, answered yes to that question in an article in the March 2006 American Economic Review. Studying 600 papers and 11,600 zip codes during the period 1996-2000, they found that the availability of the Times did cut into the circulation of local papers among targeted, well-educated readers.¹¹ They also found that the effect was to make papers more local in their coverage orientation. The Times’s national march has now continued for another six years beyond the period studied. On top of that, the audience for its Web site continues to grow even faster — presumably heightening the effect the researchers found.

Circulation Revenue

Circulation now accounts for only about 20% of a typical newspaper’s revenue.¹² In 2006, some papers increased their prices; USA Today, notably, completed a full year at 75 cents a copy and a 1.3% drop in circulation. Some of the circulation losses that resulted from the price hikes were of marginal, deeply discounted subscriptions, so the revenue impact was minimal. Over all, as papers raised prices, the industry managed to keep circulation revenue loss at about 2.5%. Even so, by some estimates, circulation made the difference between gaining and losing overall revenue at some companies.

A question for the future may be whether mainstream papers will consider doing away with paid circulation — giving papers away — or charge only for the convenience of home delivery. Doing so would have several benefits. It might boost circulation. The savings from not having to constantly push for new subscriptions and reducing the delivery fleet and circulation work force, could also be significant. But traditionalists might say that even as new metrics are receiving heightened attention, the commitment of readers who have paid for their newspapers is a plus to advertisers.

A Closer Look at Online Audience, and Online Strategy

It belabors the obvious to say that the audiences for online newspaper sites continue growing and that the Internet is the platform of choice for younger readers. The shorthand description is that news readers are migrating to the Net. But the reality is more complicated, and more nuanced, than that.

As we have reported in earlier editions of the Annual Report, the percentage of readers who get news exclusively from the Net is quite small. Adding the number who go online and watch some television news but don’t read newspapers yields a higher count. But the predominant pattern of consumption is that most people now tend to regularly use a mix of four or five different media.

Efforts to document the total reach of a newspaper Web site reveal that a great many print readers also go online. The Scarborough study of “integrated newspaper audience,” (which is the percentage of a market that weekly consumes only the print edition, only the online edition, or both) found that the Atlanta Journal-Constitution added 10% to its weekly reach with readers who only visit its Web site. But the duplicated audience, or combined print and Web site people, however, was double that — 19%.¹³ The Washington Post recorded the largest duplicated audience reach, with 25% of its readers consuming both the print and online version. The New York Times and the Boston Globe came in next with duplicated audience levels of 22% and 21%, respectively. The Journal-Constitution was fourth on the list.

A second development, somewhat unexpected, is that newspaper online readership at work is robust. A study of heavy users by MORI Research for the Newspaper Association found that nearly as many visited between 8 a.m. and 11 a.m. as during the leisure hours between 6 p.m. and 10 p.m. Many of the visits are brief, and appear to fly under the radar of employers monitoring for serious Internet abuse like visits to gambling and porn sites.

The industry also acknowledges that a share of those “unique visitors per month” are out-of-area, dropping in once or twice a month from a search engine and staying only a minute or two. The New York Times says the average visitor spends 30 minutes a month on its Web site; the Web sites of local papers are lucky to average a half or a third that.¹⁴

Thus, a couple of current strategies. Sites are aiming to maximize the number of visits a day and a month, often with prominently displayed breaking-news updates. They also want to increase so-called “stickiness” — the time a visitor spends on site — with an array of multimedia presentations and interactive features. If successful, such initiatives will help close the gap between the value to an advertiser of a daily reader and a Web site visitor.

Unfortunately for the industry, following readers to the Web comes at a price. If the many readers who sample both print and their local paper’s Web site spend more time online, that is a transfer of attention from lucrative print advertising to sparser and cheaper advertising on the Web. (See Economics).

A U.S. census bureau report released in December 2006 suggested the cumulative impact of the migration. Since 2000, the time a typical adult reports spending with a newspaper fell from 201 hours a year to a projected 175 hours in 2007. For the Internet, average hours were expected to rise to 195, up from 104 in 2000.¹⁵ The Internet time, of course, includes great deal of online use unrelated to news. But that is part of the challenge for the industry — competing for time and attention, not just competing as a news source.

Number of Newspapers

Despite the problems with print circulation, the total number of daily newspapers in the U.S. has remained pretty stable.

The number declined to 1,452 in 2006, just five less than the previous year.¹⁶ The number of morning papers in daily circulation is up to 817 (over 814 in 2005 and 787 in 2004). The number of Sunday papers is relatively static, seeing gains and losses of no more than four papers since 2000. Evening papers continue to disappear at a continuing rapid rate that portends their likely extinction.

Number of U.S. Daily Newspapers

Weekday and Sunday editions, 1990-2005

Design Your Own Chart

Source: Editor and Publisher Yearbook data
Note: Based on 2006 E&P estimates

Conclusion

Circulation trends were as bad in 2006 as they had been in 2004 and 2005. Those trends are beginning, though, to have the flavor of old news — not nearly so shocking as the first waves of losses. Among industry executives and some analysts, there is guarded optimism that the multi-year exercise in trimming extraneous circulation and building a “quality” core is cycling through and may lead to slowing losses in 2007.

The industry has redoubled its focus on building online audience. But that is no longer a raw numbers game. Here too the focus will increasingly be on building and documenting quality — of time spent reading on the Web and attention to its advertising.

Demographics of Newspaper Readers

Newspaper readership, across all age groups, is ebbing. And that problem is compounded by the fact that readership continues to skew toward older people, raising questions about the future.

In 2006, just 35% of people between 18 and 24 read a newspaper in an average week, according to data from the Scarborough Research.¹⁷ That is down from 42% in 1999. In contrast, 67% of adults over the age of 65 read a newspaper in an average week in 2006.

Another problem, however, is that even fewer older Americans read newspapers than used to. The number of people over 65 reading a newspaper in 2006 was down 7 percentage points from only two years earlier. Indeed, readership dropped for every age group. [See Chart].

Sunday readership shows even steeper declines among all age groups. But Sunday readership among those 25 to 34 dropped most precipitously, from 58% in 1999 to 43% in 2006.¹⁸ [See Chart].

Education has always been a strong indicator of newspaper readership, and that continues to be the case. In 2006, 64% of those with postgraduate degrees said they read a newspaper in an average week. In contrast, 47% of high-school-only graduates read the paper.¹⁹ [See Chart].

Race and ethnicity send a murkier signal. On the whole, half of all whites/Caucasians report reading a daily newspaper followed by blacks/African Americans (44%), Asians (41%) and Spanish/Hispanics (30%).²⁰ In a measure that combines all other ethnicities, 45% report reading the paper. Over time, readership for each of those groups has gone down. Since 1999, readership has fallen most with Asians (10%), and least with both blacks/African Americans and “other” ethnicities (7%). [See Chart].

But the trend lines are what matter: newspapers are losing readers across all demographics.

Footnotes

1. 2005 Editor & Publisher International Yearbook, 85 th Edition. See also State of the News Media 2006, http://www.stateofthenewsmedia.com/2006/narrative_newspapers_audience.asp?cat=3&media=3.

2. Editor & Publisher Yearbook data

3. Paul Ginocchio, “Circulation Trends Weaken Further, Big Markets Hurting,” Deutsche Bank Securities, October 31, 2006

4. Ibid.

5. Ibid.

6. Newspaper Association of America, Daily and Sunday Newspapers 2006 Readers Per Copy, http://www.naa.org/Trends-and-Numbers/Market-Databank/2005-Daily-and-Sunday-Readers-Per-Copy-.aspx

7. Ibid.
Note: 123,799,000 total readers divided by 216,971,000 total adult population = 57%

8. Newspaper Association of America, “Daily Newspaper Readership Trend – Total Adults (1998-2006), http://www.naa.org/marketscope/pdfs/Daily_National_Top50_1998-2006.pdf

9. Newspaper Association of America, “The Source: Newspapers by the Numbers, 2006”

10. Newspaper Association of America, “Newspaper Audience Demographic and Geographic Analysis,” October 2006, http://www.naa.org/nadbase/analysis0601004.html

11. Jack Shafer, “How the New York Times Makes Local Papers Dumber,” Slate, July 27, 2006

12. Miles Groves, Full Year Newspaper Statistics, Morton Groves Newsletter, February 16, 2007

13. Scarborough Research, “A New Story Lead for the Newspaper Industry: Newspapers Are Successfully Extending Their Audience Online,” August 2006.

14. “Nonsense About the New York Times” Poynter Online, August 26, 2007 http://www.poynter.org/column.asp?id=82&aid=106433

15. Associated Press, “Study of American Media Use Finds Web Finally Passing Newspapers,” Editor and Publisher, December 15, 2006

16. 2006 Editor & Publisher International Yearbook, 86 th Edition

17. Scarborough Research Center , survey data spring 2006

18. Ibid.

19. Ibid.

20. Ibid.

Economics

Newspapers have a tough time making the case that their business is headed in the right direction. The year 2006 was terrible in many respects, and there seems little prospect that 2007 will be much better.

The best that the industry can hope for is that some easing of costs — both paper and people — will improve earnings and that they can demonstrate continued strong growth in the range of their online and niche offerings and in ad revenues in the new media.

Even that last seems in doubt. Online revenue growth came in just below 30% in 2006 after years of 30%-plus growth.¹ The rate is expected to fall to 22% in 2007, and for the first time newspaper sites are not maintaining share in total Internet advertising growth.

The grim 2006 picture contained these elements:

*Pre-tax earnings at print newspapers were off about 8.4% compared with 2005, and that was not an especially good year either.² At companies with television holdings, that was softened by the predictable windfall of Winter Olympic and election advertising.

*Ad revenues were flat , despite contributions from online and niche publications that continue to grow at an average rate of 20% to 30% rate. Optimistic industry sources are predicting a slightly more positive 2007 for advertising.³ Most analysts, however, forecast that ad revenues will be down by 1 to 2%.

*After seeing their share prices drop an average of 20% in 2005, publicly traded newspaper companies lost another 14% of value in 2006.⁴ One of the gainers for the year was Tribune — but that came on speculation that it would be sold at a premium early in 2007.

There will be some good news on costs in 2007, though it comes with a caveat. Newspapers have been downsizing everything from their staff counts to the dimensions of the paper to the breadth of their coverage and the range of their circulation area. All of that flirts with the danger of chasing away readers from an inferior product. Executives argue that they must live within means, but some are also cutting way back on business-side staffing and circulation promotion, which will likely further depress circulation.

One unambiguous bit of good news is that newsprint prices, after three consecutive years of 10% increases, had softened by the end of 2006 and were expected to be flat or down in 2007. With smaller papers, a typical company can save 7% on newsprint spending.⁵

Looking for more fundamental reasons for hope, we find two. A year ago we noted that the impending sale of Knight Ridder was a likely “lose-lose” proposition — dooming the 32 papers to more deep cuts under new ownership or the industry to a sort of no-confidence vote if no buyer materialized.

In fact, the McClatchy Co., with a strong record of commitment to editorial quality, came away with 20 of the papers. All 12 of the papers McClatchy chose not to keep, in turn, found buyers among private companies and investor groups. But the fact that only one public company came forward did signal some lack of interest in newspapers generally. And some of those local and private owners have indeed made deeper cuts at the papers they purchased (See Ownership and News Investment).

The drama over newspapers’ appeal continued with turns at another company, Tribune, in 2006 and early 2007. With Tribune on the block, a trend may be emerging in which private investors see better possibilities for newspapers than Wall Street does.

Then there are indications that the industry is making progress toward a whole-hearted commitment to transformative online growth. Paul Ginocchio, one of our analyst sources, said after listening to company presentations during the December 2006 Media Week investors’ meetings he could now see at least the potential outline of a successful turnaround.

But the biggest question remains whether the economic model of the Internet can change as the audience moves more heavily to that platform. Until it does, it seems reasonable to foresee the economics of the newspaper business — even with an ever-larger online component — as one of erosion and shrinking horizons.

What Ails Advertising?

In the golden era of the newspaper business financially, from the 1960s well into the 1990s, newspapers had three big things going for them. The first was a lock on the highly profitable classified advertising business. The second was page after page of department store advertising — John Wanamaker in Philadelphia, Woodies in Washington, D.C., Dayton’s in Minneapolis, and dozens more. The third was the leverage to raise rates aggressively even as circulation was beginning to slide because of the numbers, the attractive demographics of newspapers’ readership and their near-monopoly pricing power.

You will find vestiges of all three in newspapers circa 2006-2007. But all three of those pillars are now badly eroded.

Classifieds are subject to massive competition from electronic companies like Google, Yahoo, Monster and Craigslist, plus an assortment of sites for autos and real estate.

The traditional department store has been progressively weakened by the growth of Wal-Mart, a very light newspaper advertiser, and other discount retailers. Remaining department stores have been consolidating over the last quarter-century notably in the merger of Federated and May stores, carried out over 2005 and 2006.

Stronger competition and faster circulation losses eat at newspapers’ ability to raise rates at will.

Daily Newspaper Advertising Revenue

1984-2005

Design Your Own Chart

Source: Newspaper Association of America Business Analysis and Research Department

Here is a breakout of how those advertising troubles played out in 2006.

Retail The department store herd has been thinned dramatically. Some of the big-box stores — Best Buy and Home Depot — are at least reliable sources of insert income. In 2006, the Federated and May consolidation led to double-digit-percentage losses in local retail advertising in some markets.

Despite that, the overall picture for local retail advertising in newspapers is not so bad. The Newspaper Association of America found that spending on such advertising was up just under 1% from 2004 to 2005.⁶ In the first three quarters of 2006, spending on retail looks flat.

Classifieds Classified advertising has a more complicated set of troubles. From competition from online listing entities to companies connecting directly to the consumer through their own sites, skipping the middle man altogether, to the free pricing of Craigslist, classified advertising has entered a new era.

The online giant Monster Inc. built a huge business in employment listings through the late 1990s and early 2000s while newspapers were sitting on their heels. The industry finally countered with its own national service — CareerBuilder — which now edges Monster in volume but not profits. At the end of 2006 Yahoo, with its Hot Jobs (No. 3 in online job classifieds) signed an agreement with 200 papers. Monster, too, has begun to make newspaper affiliations.

After massive declines in ad revenue from employment classifieds in the 2000-2002 recession, the sector bounced back some in 2004 and 2005. But employment classified again declined in the second and third quarters of 2006, down 6.5% and 10% year-to-year, respectively.⁷ That leaves the marketplace unsettled headed into 2007, but this much is clear: the industry has lost its pre-eminent position.

Automotive classifieds had an especially bumpy 2006. One of Detroit’s responses to the deep losses of the domestic manufacturers has been to eliminate some local dealerships and reduce the advertising budgets of those that remain. Direct online-to-consumer communications, where car buyers can sample everything from interior color schemes to prices, have become a big factor in the business. (A current Toyota TV ad touts the Web site rather than the cars themselves.) New marketing dollars are sure to flow that way in years to come. Automotive classifieds have declined since 2004, and those declines accelerated through the first three quarters of 2006, hovering near 15%.⁸

Real estate classifieds were a bright spot in 2006, up about 20% year-to-year through the first three quarters, as a big inventory of properties stayed on the market for months at a time.⁹ But as real estate heads from slowdown into downturn in 2007, the industry will be pressed to stay even in that category.

For those three big categories of classified advertising and the smaller “other” (general merchandise and services), the industry faces killer competition from the communitarian-minded Craigslist. From a modest local start in San Francisco in 1995, it has expanded to 450 cities worldwide and posts 14 million new classifieds a month.¹⁰ Most listings are free. The service is now among the top 10 in monthly page visits and clearly has achieved the mass to do the job for a great many buyers and sellers.

National advertising was also weak in 2006, contributing particularly to the poor performance of large regional newspapers and of the New York Times, where the important movie advertising category has fallen considerably from its 2000 peak. Year-end spending in 2005 was down 18.5% from that 2000 high, representing a loss in revenue to newspapers of over $230 million.¹¹

Another major source of national ad revenue is transportation advertising, which accounts for about 15% of the category (down from about 19% in 2000). As in the case of movie ads, newspaper revenue from transportation ads also fell, by 18.5%, from 2000 to 2005, representing a revenue loss to newspapers of over $265 million.¹²

There is a bright element in this dismal picture, however. Coupon spending, which currently accounts for approximately 17% of national advertising, has increased by just over 17% from 2000 to 2005.¹³

Ad Rates On pricing, the industry has a pair of problems. Online is competitive and priced accordingly. Google search produces results (and premium bid pricing for top placements) that the industry cannot currently match.

Even in the face of falling circulation, newspapers raised their stated rates in 2006 and have said they plan to do so again in 2007. But the higher rates may paint a misleading picture — some advertisers are simply choosing to take less space, something that is evidenced by the decline in total print ad revenue for 2006.

Discussions of newspaper economics are often thin on new trends in the advertising industry. At the moment, advertisers are moving their budgets not only online but also to non-traditional direct-to-the-consumer marketing. One example is Procter and Gamble, a bell-cow in consumer product marketing. It now has its own word-of-mouth agency, Tremor, with 800,000 registered panelists who agree to sample products and then talk them up to friends and acquaintances. The Web makes such “viral marketing” far more powerful.

In the face of all this, newspapers need to protect their share of flat traditional-media budgets, continue to grow online and invent some new lines of e-commerce — all three at once.

Making the Best of It

While advertising has not declined at the same pace as circulation, there are parallels to the two stories. Repeated reports hammering newspapers for circulation losses tend to overlook the 50 million-plus buyers and 120 million-plus print readers on an average day.

On the advertising front, all the challenges and losses may obscure something about the enduring financial muscle of newspapers: Taking into account the loss of some advertising and the simultaneous arrival of new business, newspapers annually are holding on to the vast majority of their advertising base.¹⁴

Loyalty and inertia play a role; local advertising practices don’t turn on a dime. So does the perceived effectiveness of newspapers, especially when advertising a store’s sale prices. The Newspaper Association attempted to highlight those elements with a campaign hailing newspaper advertising as “a destination not a distraction.” The study, by MORI research, includes a barrage of survey statistics on how many readers consider advertising a welcome information resource. The “distraction” is a thinly veiled dig at television, where blocks of commercials are a repetitive irritant increasingly vulnerable to being zapped by TiVos and other DVRs. In short, newspaper ads, executives believe, still have distinct advantages, especially as the landscape of options becomes more cluttered.

Newspapers also continue to field the largest advertising sales force in most communities. We are told anecdotally that there has been a steady effort to upgrade sales people and particularly managers, recognizing that simple order-taking will not suffice. With the boom of online and niche publications, those sales people now have a portfolio of products to sell.

Newspaper pricing practices also help. Advertisers earn big discounts if they commit to a fixed-amount annual contract. That can help lock up budgets against other alternatives.

Costs

On the cost side, mark 2006 down as a transitional year. Throughout the industry (not just at public companies under Wall Street pressure) newspaper executives were judging that their cost structure was out of whack with revenues and future prospects.

Many reduced the page width, paper weight and space allocated to news. The Wall Street Journal shrunk to five columns, instead of its former six, and a 12-inch page width with its first 2007 edition, a 20% trim in the physical size of the page. The Journal expects to net $18 million annually in newsprint-related savings from the downsizing.¹⁵ The New York Times will follow later in the year, the last of the big-circulation broadsheets to take a trim.

Another cut was of distant, so-called “vanity” circulation, basically to readers who live too far away to be of interest to advertisers. The Dallas Morning News for instance, eliminated all distribution beyond a 100-mile radius in 2006 and will cut back, with a few exceptions, to a 50-mile radius in 2007.

One negative in 2006 was the rising price of paper. Newsprint costs were up for the fourth consecutive year in 2006 to the tune of 7% to 8%.¹⁶ But with the ad slump and the shrinking dimensions discussed above, demand was off dramatically by the fourth quarter. Prices are expected to flatten or even fall during 2007. Another positive factor, we were told by William Dean Singleton, CEO of MediaNews Group, is that imported Chinese newsprint, less expensive and high-quality, is now an option, especially for West Coast publishers.

The most conspicuous attempt to rein in costs was another round of staff reductions, both in the newsroom (discussed in the News Investment section of this chapter) and elsewhere in the operation. Many of those were in the form of buyouts of more experienced and better-paid staff members. There will be savings in 2007 and years to come, but in the short run, the reductions are an expense. At the Washington Post print edition, for instance, the pre-tax profit margin would have been about 10% had the paper not bought out employees.¹⁷ With the plan, it fell to about 5%.

In previous editions of the Annual Report, we have not treated labor issues. But 2006 ushered in a trend of hardball negotiations that seemed likely to continue. Block Communications used non-union help in the production departments of the Toledo Blade and threatened to sell both that paper and the Pittsburgh Post-Gazette unless unions agreed to new contracts with deep concessions on benefits and work rules. The National Labor Relations Board ruled the lockout at the Blade illegal in December 2006, but in early 2007 the situation remained unresolved. Blade management said the paper lost $5 million in 2006.

Dean Singleton’s MediaNews Group got the Newspaper Guild at the San Jose Mercury News to agree to discontinuation of a pension plan, a new employee contribution to health benefits and a two-tier wage scale with lower pay for new employees. In exchange management agreed to a 2% wage increase and fewer layoffs than previously planned.¹⁸

In Philadelphia, the Guild made loud noises about striking but reluctantly voted in early December to accept a disappointing contract rather than further endanger the financially precarious position of the Inquirer and Daily News. At the Boston Globe, the Guild agreed to tie future raises to revenue increases at the paper and its online operation.

Can Online Editions Rescue Newspapers?

Since newspapers typically have the best-trafficked Web sites in their markets and the sites’ ad revenues have grown at a 30% rate for five years now, it would be appealing to think that readership and advertising will simply transfer gradually to the Web.¹⁹ Thus could the expensive news-gathering function and newspapers’ public service mission be preserved, and without the cumbersome costs of printing and delivering the paper.

Unfortunately, after all that growth, online typically still contributes only 6% or 7% of ad revenues.²⁰ So while developing the new platform, papers can ill afford to take their eye off the ball of a print operation that constitutes 94% of the business.

As we noted last year, Rick Edmonds of the Poynter Institute, a co-author of this chapter on newspapers, in January 2005 ran a rough projection estimating that it would take online a dozen years to pass print as a revenue source, assuming continuation of the trends of 2003 and 2004. Built into that model, in other words, online would have to continue to grow by a third each year. Print revenue would grow modestly, by 3%.

Two years later, it probably makes sense to adjust downward the assumption that print will grow at 3% a year for a dozen more years.

But it also seems overly optimistic, absent some surge from new and unanticipated lines of business, to think that online can keep up that percentage growth.

Partly that is just the law of large numbers. As the base gets bigger, even substantial gains are not so large a percentage (a phenomenon that soured Yahoo’s earnings reports in 2006).

More mature newspaper Web operations, particularly those of the national papers, are now growing annually in the 20% to low 30% range. Gannett executives told analysts in December that USA Today.com would end 2006 with 25% revenue growth and was estimated to grow 18% to 20% in 2007.²¹

Industry online growth fell just below 30% in 2006, and the Newspaper Association forecasts that it will grow just 22% in 2007.²² That is still robust growth, but not a third a year. So it still seems reasonable to expect that the industry is a decade or more away from seeing online business contributing half of revenue What can newspapers do to maximize sustained online growth? The consensus strategy heading into 2007 is to get more people to visit and more often (especially with breaking-news updates) and to stay longer (especially with new multimedia and interactive features). More page views can equate to more advertising opportunities.

A second strategy is to redesign, reduce clutter and create better display space for advertising. The industry’s current mix depends lopsidedly on classified (roughly 75%).²³ But some speculate that the mix could shift as national and regional advertisers gradually develop the capability for integrated campaigns that include more online display advertising, some of it now in video or even interactive video.

A shift of readership from print to online cuts several ways for newspapers. The commitment of time and attention is so much less that online readers do not command the premium rates print can charge. Paul Ginocchio, a Deutsche Bank analyst, estimates that a print reader is worth $350 a year to a newspaper, an online reader 10% to 15% of that.

Since only the Wall Street Journal and the New York Times charge for all or part of their daily content, newspapers are losing circulation revenue every day, month or year that a potential reader opts instead for the free Web version.

On the other hand, in theory, there should be a critical mass of Web audience that will allow newspaper companies to save at least on paper costs and perhaps on printing and delivery capacity.

So the potential profitability of news Web sites theoretically is high but also conjectural. One can envision a scenario in which lucrative Web operations carry costs for a newsroom that serves both the site and a slimmed-down and more targeted print edition. But it is just too early to predict that. Nor is there evidence that papers are using the savings from online production and distribution to reinvest in news staff.

Donald Graham, CEO of the Washington Post Company, has a reputation for plain-speaking on the topic. He noted in a December 2006 presentation to investors that the Post already gets 11% of revenue from online (nearly double the norm) and reaches a huge national and international audience who are not served by the print edition.²⁴ But even with those “strong cards to play,” he concluded, “I simply have no way to tell you” what combined newspaper print and online revenues will be like in five or ten years. Extrapolating from the last several years doesn’t work because trends could easily change, he said.

Niche Publications, Acquisitions and Collaborations with Google and Yahoo

Companies have several additional strategies to keep overall revenue growing as the print newspaper falters.

As discussed in earlier editions of this report, most have added a family of niche publications as a way to target audiences that the main paper is starting to miss. Some of the more ambitious go after a Spanish-language audience with separate daily editions where concentrations of immigrant Hispanic population are highest — cities like Miami or Dallas. Others target young adults, with free dailies in the big cities, weeklies elsewhere.

Another layer of niche products, many of them monthly and in magazine format, focus on health, home design, travel and fashion, often with an advertising-driven agenda of reaching the well-to-do. Gannett now has 1,000 such publications in its 90 newspaper markets, 100 in Phoenix alone and 40 in St. George, Utah, where print circulation is just 24,000.²⁵

The companies now routinely lump those niche efforts together in reports to investors with online as a part of a growth story in counterpoint to the negative trends for the traditional paper. Our read is that niche publications remain significant but less of a novelty. They aren’t expanding as quickly as a few years ago, hence a lesser part of the growth story. The St. Petersburg Times and the Virginian Pilot in Norfolk, Va., launched free youth dailies in 2006, but the pace of such launches is slowing. In several markets, Spanish-language launches have met strong competition from established family-owned publications or community-based start-ups.

A second approach has been to acquire online companies, often information-driven but not strictly news. Examples include E.W. Scripps’s Shopzilla, a comparison-price shopping site, and the New York Times Company’s About.com, which offers information on more than 500 topics, produced by freelance “guides.”

The acquisitions bulk up and diversify online operations, adding further counterpoint to profitable, slow-growing print operations. Most of the acquisitions took place in 2005, and it is not clear whether the best properties had been picked over by 2006 or whether the companies were marshalling cash for other priorities. Gannett did add Planet Discover, a small company that provides technology for local search. Scripps acquired U-Switch, a British company that lets consumers switch utility providers online (legal there but not in the U.S.).

What was new at the end of 2006 was joint ventures with both Yahoo and Google — a sign that the industry had gotten past wringing their hands about the huge upstart competitors and started figuring out ways to make money together.

In the Yahoo deal, put together by Dean Singleton, 200 newspapers will partner with the online giant. Initially that will mean placing online classifieds through Yahoo’s Hot Jobs (third in listings behind Craigslist and Monster). But the partners envision later sharing content and mounting an initiative to build local search advertising (essentially the equivalent of Yellow Page listings for specific goods or services). That would combine using Yahoo’s technology and the newspapers’ advertiser contacts within their markets to ramp up an emerging base of new business.

The venture is open on the same terms to any other newspapers that wish to join. Media General, owner of 25 newspapers (with a circulation of over 850,000), did so weeks after the initial announcement. The deal is being celebrated as “transformational” by several of the participants, and could be so if it opens a new front on local search, which Google dominates. The market analyst Gordon Borrell estimates that local paid search and e-mail advertising will be the hot growth areas online in the next four years, and that newspaper sites are in danger of losing share unless they strengthen their effort.

The Google deal is entirely different: a 90-day trial in which Google is placing ads from its base of search clients into 50 newspapers with digitized “bid” pricing. Initially it was for so-called “remaindered” space in which newspapers typically place house ads but it has been expanded to guaranteed placements. The buzz at the December investment meetings where major media companies talk to Wall Street analysts was that Google had met its three-month revenue projection in the first three weeks.

Each of those experiments is new enough that the results cannot be predicted (nor were the revenue splits disclosed). But they add one more piece of evidence that the industry is no longer committed in wishful fashion to doing all the traditional things the traditional way.

If all goes well, the deals might help increase ad revenues as well as pave the way for licensing content to Google and Yahoo, a far more realistic prospect for newspapers than charging local customers directly for content.

Newspaper Next and the New Business Model

If one thing seems inevitable, it is that the newspaper industry is moving toward a new business model, though no one seems certain what that will be. The turmoil of 2006 prompted many proposals (see sidebar).

The one attracting the most attention was a year-long, $2 million project of the American Press Institute entitled “Newspaper Next” and based on work by Clayton Christensen and others at the Harvard Business School.

In essence, the Harvard team concluded in a report released in September, all of the above — the print edition, existing online sites, niche publications and acquisitions — may not be enough.

Newspapers were urged instead:

*To be much more committed to a systematic approach to innovation, scoping out unmet “jobs to be done” for consumers and advertisers in their communities.

*To settle for projects that can be started quickly on a modest scale and be readjusted if the initial plan is flawed, as it likely will be.

*To consider a broad cooperative industry-wide effort to sell and place national online advertising.

One of six pilot projects, at the Dallas Morning News, involved setting up a Web site for mothers, with lots of informative listings on camps, after-school programs and the like. The appeal to a set of advertisers is obvious if the targeted audience is assembled. The idea is catching on fast. By the December investor meetings, Gannett and Journal Communications announced that they had similar sites up, running and off to a fast start at the Indianapolis Star and Milwaukee Journal-Sentinel, respectively.

Another pilot paper, The Oregonian, sought to tap into the “non-consuming” youth population of Portland and learned that its potential audience primarily demands local and entertainment information. The newspaper is developing a product to meet those needs.

The Boston Globe, like the Richmond Times-Dispatch, is focusing on marketing, using search engine marketing (SEM) programs for its Web site that guarantee advertisers with small budgets a certain number of clicks from high-potential customers.

Yet another of the pilot papers, the Desert Sun in Palm Springs, Calif., asked employees to take a close look at the pages of their own paper to identify what they read regularly. Executive Editor Steve Silberman found his reporters consumed little of their own product, and when he asked them to write in a way that they would be more inclined to read, the result was that stories shrunk in length.

Ultimately, the “Newspaper Next” project’s strategy is to encourage newspapers to experiment outside of their core news product to compete with cheaper alternatives, or what Christenson refers to as “disruptive” products that are proliferating online and as niche publications. Such changes may seem radical to some or a sign of desperation in a beleaguered industry to others. But as one of the organizers remarked, the motivation for change shouldn’t be fear, but enthusiasm. For now, it may be both.

Profits, Stock Performance and the Dividend Question

Newspaper stocks staged a “mini-rally” late in 2006, but it was another year of falling valuations. Having lost 20% on average in 2005, shares declined another 14% in 2006.²⁶

There was substantial variation company by company. The biggest losers were Journal Register, which experienced some of the sharpest advertising revenue declines, and McClatchy, a former market favorite, which in Wall Street’s view doubled down at the wrong time by purchasing Knight Ridder.

Newspaper Company Stock Values
2004 vs. 2005

Company	12/31/2005	12/29/2006	% change	2-year peak	Decline from peak
Gannett	$61/share	$61/share	0%	82 (2/05)	-26%
Tribune	30	31	3%	42 (2/05)	-26%
New York Times	26	24	-8%	41 (1/05)	-41%
Dow Jones	35	38	9%	43 (1/05)	-12%
E.W. Scripps	48	50	4%	52 (4/05)	-4%
McClatchy	59	43	-27%	75 (04/05)	-43%
Washington Post	765	746	-2.5%	928 (2/05)	-20%
Lee	37	31	-16%	46 (2/05)	-33%
Journal	14	13	-7%	17 (4/05)	-24%
Journal Register	15	7	-53%	19 (9/05)	-63%
Media General	51	37	-27%	69 (7/05)	-46%
Belo	21	18	-14%	25 (1/05)	-28%

Source: Yahoo Finance, PEJ Research

Dow Jones, improving on several years of poor performance, saw a nearly 10% rise in the value of its shares.²⁷ Scripps, Washington Post and Gannett were all roughly even for 2006. Tribune stock was declining for the first part of the year but rallied on the announcement that it was being put up for sale.

Pre-tax earnings margins for the public company group fell to roughly 17%.²⁸ Individual papers, including the San Francisco Chronicle, Seattle Times and Boston Globe, now report losing money.

Various analysts suggest that newspaper companies could boost their appeal to shareholders by paying out a big dividend (a reasonable course for a business with strong cash flow but slow growth). The companies have resisted, saying they need to keep those earnings to cover the cost of new ventures, acquisitions, debt repayment, and the transition to online.

GateHouse Media Inc., a New England-based chain of weeklies and dailies, had a successful initial public offering in part by saying it planned to pay a 7.5% dividend, more than three times the industry norm.²⁹

Conclusion

What are the chances of the industry’s making a successful transition to a new business model? Newspapers are embracing transformation as a concept and a slogan. The Newspaper Next project even provides models of what new lines of business could look like.

Still, a pessimist might note the number of competitors that have emerged from nowhere so far this decade — Google and Craigslist siphoning off ad dollars; Wikipedia, My Space and YouTube capturing audience and attention. Isn’t it reasonable to expect more of the same new ventures at regular intervals in coming years?

There is a case too, however, for a more positive long-term picture. Newspapers remain the pre-eminent source of news, recycled by aggregators and blog commentators. The aggregators, at least, are now signaling that they may prefer cooperation to a duel that continues to diminish newspapers’ capacity.

Footnotes

1. James Conaghan, Vice President, Business Analyst & Research of Newspaper Association of America, presentation at UBS Media Week Conference, December 4, 2006

2. Paul Ginocchio, “ ’07 Outlook More Positive Than Expected,” Deutsche Bank Securities, December 1, 2007

3. James Conaghan, presentation at UBS Media Week Conference, December 4, 2006

4. Paul Ginocchio, Deutsche Bank Securities to co-author Edmonds, February 13, 2007; also Miles Groves, Morton-Groves Newspaper Newsletter, January 22, 2007

5. Lauren Rich Fine, “Headwinds Despite Newsprint Relief,” Merrill Lynch, January 18, 2007

6. Newspaper Association of America, “Annual Newspaper Ad Expenditures” Year-end 2005 over 2004 total retail ad spending increased by .8%. The first three quarters of 2006 were as follows: 1 st quarter showed (-1%) growth, 2Q (1%), and 3Q (-.3%)].

7. Newspaper Association of America, “Newspaper Classified Advertising Expenditures”

8. Ibid.

9. Ibid.

10. Craigslist Fact Sheet, http://www.craigslist.org/about/factsheet.html

11. Newspaper Association of America, “Quarterly Newspaper National Ad Expenditures”

12. Ibid.

13. Ibid.

14. Lauren Rich Fine, “Headwinds Despite Newsprint Relief,” Merrill Lynch, January 18, 2007

15. Katharine Q. Seelye “In Tough Times, a Redesigned Journal,” The New York Times, December 4, 2006

16. Lauren Rich Fine, “Headwinds Despite Newsprint Relief,” Merrill Lynch, January 18, 2007

17. Donald Graham, UBS Media Week presentation, December 6, 2006

18. Pete Carey, “Mercury News Reaches Tentative Pact With Union,” San Jose Mercury News, December 5, 2006

19. Rick Edmonds, “An Online Rescue for Newspapers,” Poynter Online, January 27, 2005, and Rick Edmonds, “The New Bottom Line: 25 Percent Online Revenue by 2011,” June 23, 2006

20. Ibid.

21. Craig Moon, UBS Media Week presentation, December 6, 2006

22. James Conaghan, presentation at UBS Media Week Conference, December 4, 2006

23. Gordon Borrell, UBS Media Week Presentation, December 4, 2006

24. Donald Graham, UBS Media Week Presentation, December 6, 2006

25. Lisa Snedeker, “In St. George, Utah, There’s Lots to Read,” Medialife, January 11, 2005

26. Paul Ginocchio, Deutsche Bank Securities, to co-author Edmonds, February 13, 2007; also Miles Groves, Morton-Groves Newspaper Newsletter, January 22, 2007

27. Yahoo Finance

28. Janet H. Cho, “Web Reshaping Newspapers, Analyst Says,” Cleveland Plain Dealer, February 16, 2007

29. Steven Syke, “An Unlikely IPO,” Boston Globe, October 24, 2006

Ownership

For the last several years, newspaper ownership changes were few, and industry consolidation — the old pattern of big fish acquiring smaller ones — seemed to be stalling out.

With business fundamentals worsening and shareholders disgruntled, 2006 was far more dramatic. The dynamic flipped into reverse. Big companies came apart. Private owners, from large operating companies to private equity firms to rich individuals, peeled individual papers away from public ownership. In 2007, more of the same seems likely.

The trend even tends to raise a new question: Has public ownership, the model that increasingly took hold in the industry from the 1970s on, begun to show cracks? Do the demands of Wall Street now conflict with the demands of management? Is the future of the newspaper industry, to survive the transition to the next phase, demand longer-term bets and more risk than the public markets can safely allow? And what risks are special to the private alternatives?

Among the highlights of a volatile year:

*Knight Ridder, the second-largest chain in circulation and third in revenues, vanished — sold for $4.5 billion (and assumption of $2 billion in debt) to McClatchy Co. in March.¹ McClatchy turned around and sold 12 of the 32 Knight Ridder papers, including the Philadelphia Inquirer and San Jose Mercury News, to an assortment of private buyers by July.

*In a year-end surprise, McClatchy sold its largest newspaper, the Star Tribune of Minneapolis, to Avista Capital Partners, a private equity group, for $530 million.² McClatchy had paid $1.2 billion for the paper and some smaller businesses in 1998.

*Tribune, second-largest of the companies, in revenue with 13 newspapers and a range of television and other holdings, was formally put in play by management in the fall. Wealthy individuals, including the real estate tycoon and philanthropist Eli Broad and the entertainment mogul David Geffen, bid on the Los Angeles Times. Local investor groups also expressed interest in the Baltimore Sun, Newsday and the Hartford Courant. By early 2007, it appeared that the market had deteriorated. Two rounds of bids came in so low they were rejected. A possible outcome is that Tribune will retain its Chicago properties and some other newspapers, taking the company private, and auction off its broadcast division and some other newspapers.

*Several companies — Dow Jones, Journal Register and the privately held Copley — disposed of a number of their smaller newspapers to redeploy resources to stronger properties and digital ventures.

*Early in 2007 E.W. Scripps management indicated it might eventually consider selling some or all of its 19 newspapers. Nothing imminent should be expected, CEO Ken Lowe said later. But the company did tell investors at a December conference that newspapers and broadcast will play a progressively smaller role in the company, whose main business now is cable television networks, which contribute 60% of earnings.³

*The New York Times Co. was also under pressure from unhappy shareholders, but, unlike Knight Ridder and Tribune, is protected by a controlling family share of voting stock. Jack Welch, the former General Electric CEO, and associates expressed serious interest in acquiring the Boston Globe, a money-losing problem child for the Times in recent years. Times management did not sell but was equivocal on whether it might in 2007. The Times bought the Globe and other New England properties for $1.1 billion in 1991 and added the Worcester Telegram & Gazette for $296 million in 2000. In early 2007, it wrote down the value of the properties by more than half to reflect changed market conditions.

*Amid all the breakups, GateHouse Communications, a New England-based chain of small weeklies and dailies, had a successful initial public offering in October. Its promise to pay a cash dividend of 7.5%, a novel business proposition, ensures a good return to shareholders even if the stock does not appreciate.⁴

What’s Happening Here?

What has caused the sudden activity? For the first several years of this decade, newspaper share prices continued to rise, even as circulation, ad revenue growth, earnings growth and margins were stalled. Safe and steady was attractive to investors after the burst of the tech bubble in the late 1990s. Plus, conventional wisdom held that newspapers would be first to come roaring back after a recession like that of 2001.

Holders of big blocks of newspaper stocks were thus set up for a fall when industry performance turned worse in 2004 and 2005 despite a relatively healthy economy. With an 18.5% share of Knight Ridder and little prospect of a stock turnaround, Bruce Sherman of Private Capital Management saw a potential way out by demanding that the company be put up for sale in the fall of 2005. He was joined by two other longtime Knight Ridder shareholders, and suddenly nearly 40% of the company’s ownership was pushing for a sale.

The sale to McClatchy in March was hardly a windfall, but it gained back some of the losses the three big institutional investors were experiencing.⁵

Tribune has less concentrated ownership, but came under a parallel set of pressures in 2006. Share price had fallen more than 50% from its peak.⁶ Like Knight Ridder, Tribune responded with cuts and promises of more cuts. It also did a large share buyback in the middle of the year, enabling investors who wanted out to leave at a modest premium.

None of this, however, sent share prices up significantly. The Chandler family, with more than 10% of the stock, was the most outspoken of many Tribune critics. And the company’s management was further damaged when its two top executives in Los Angeles, publisher Jeffrey Johnson and editor Dean Baquet, openly broke with their corporate bosses, denouncing their plans for more cuts as short-sighted and damaging. In September, Tribune’s board established a committee to “explore strategic options” — code for seeing whether the company, or at least pieces of it, could be sold at a premium.

The auction drew expressions of interest from several private equity firms. The billionaires Broad, Geffen and Ron Burkle all indicated they wanted to buy Tribune’s largest paper, the Los Angeles Times. But as of March, the rumored interest hadn’t translated to a winning premium offer.

That implied some cooling of the acquisition climate since the Knight Ridder deal. Even so, with share prices falling again in 2006 after a 20% tumble in 2005, investors looking for a shock-wave boost to the value of their holdings are likely to continue as a force pushing for the sale or breakup of big newspaper companies.

A second dynamic became apparent with McClatchy’s decision to sell 12 of the 32 newspapers it acquired in the Knight Ridder deal. McClatchy explained that the papers, quickly dubbed the “orphans” of the transaction, were in slower-growing communities that did not match McClatchy’s preferred profile. The papers also had lower profit margins, were mostly in the Northeast and Midwest, and had union representation.

Nonetheless, all 12 sold within a matter of three months. Even more eye-opening, those ostensibly less attractive properties actually went at a higher ratio to earnings than McClatchy paid for its Knight Ridder keepers.

Lauren Rich Fine of Merrill Lynch and other analysts extracted the clear lesson: we seem to have entered a period where private markets now value newspapers more highly than Wall Street does.

The buyers included big private companies like MediaNews and Hearst, obscure small companies like Black Press and Shurz Communications, and consortiums of local investors (in Philadelphia and Wilkes-Barre). All are in a better position than Wall Street institutional investors to be patient if the industry is indeed making a multi-year transition to new business models with depressed earnings in the meantime.

Private equity funds are flush with cash — including money from institutional investors like pension funds that also can play on Wall Street — and they are looking for deals. As we had speculated might happen in earlier editions of this report, very wealthy individuals are now looking at newspapers as the might look sports franchises — high-profile enterprises important to their communities, where making lots of money may not be the main point. Nonprofit foundations and even the Newspaper Guild have also surfaced as potential buyers. But what such owners would do to papers and their journalism is yet to be tested. (See Private Ownership section below)

With 2007 looking no better than 2006 for operating results and other near-term indicators, the valuation gap is likely to continue for at least another year.

In 2006 newspaper companies felt a variety of financial pressures, forcing some hard choices about which operations are essential and which expendable.

Dow Jones sold six of the papers in its small paper group to Community Newspaper Holdings for $282.5 million.⁷ The transaction allowed Dow Jones to complete its acquisition of Factiva, an electronic business information service.

Journal Register, experiencing some of the sharpest ad revenue and share price declines, sold two Massachusetts papers and has three in Rhode Island for sale, hoping to pay down debt.

Copley Press, facing an estate tax bill after the death of its owner, Helen Copley, is in the process of selling all nine of its smaller papers, to concentrate on its flagship San Diego Union-Tribune and its online and niche businesses.

The New York Times Co. dealt off its seven TV stations in January 2007. It declined an initial offer for the Boston Globe from Jack Welch and associates, but has left the door open to revisiting the deal in 2007.

McClatchy provided a coda to turbulent 2006 when it announced the day after Christmas that it had sold the Star Tribune of Minneapolis to a private equity firm. “How often does a newspaper company sell its largest paper?” William Dean Singleton, CEO of MediaNews, commented. “It doesn’t happen.”

On close inspection, though, the deal, while surprising, was not inexplicable. With the big loss compared to the purchase price eight years ago, McClatchy said, it was able to save $160 million of the $500 million in capital gains taxes it was facing on the sale of the orphan Knight Ridder 12.⁸

The proceeds could be used to pay down debt and invest in Internet ventures, the company added, after a year in which operating results had fallen far short of expectations.

McClatchy’s CEO, Gary Pruitt, has emerged as a leader among those speaking out for the future of the industry, and the company has been considered a model of commitment to news quality as a sound business strategy. The Star Tribune offered an ambitious redesign in late 2005 that Pruitt said he hoped would be a model for the industry.

All of which made the transaction a letdown to the Star Tribune’s staff and many outsiders alike. It underscored that financial logic, unfortunately, trumps journalistic idealism with some regularity these days.

Private Ownership: Potential and Perils

The emergence of various private ownership groups, especially those more attuned to their communities and public service role than to maximizing profit margin, was hailed in some circles as a potential avenue to put the industry back on track journalistically.

John Carroll, the respected former editor of the Los Angeles Times and a bruised veteran of Tribune’s newsroom cost-cutting initiatives, articulated the possibility in an April speech to the American Society of Newspaper Editors. Profit-driven public corporations, answering mainly to fund managers, Carroll said, “are shrinking the social purpose of newspapers…are shrinking the newspaper journalist.”⁹

Potential local owners, he continued, include “sophisticated people with real money…willing to accept a lower financial return” to maintain a newspaper that will serve their community.¹⁰ But Carroll conceded that “the old local owners were far from perfect. Some of them were good, most were mediocre, and some were downright evil.”

How are the new owners doing? The honest answer is that by early 2007 the model has barely been tried. Though the billionaire class is eagerly pawing the dirt for potential acquisitions, we don’t yet know, as the writer Michael Wolff put it in a Vanity Fair article, what “the Daily Geffen” would look like. And we may not know for awhile.

One cautionary case exploded soon after Carroll’s talk. Wendy McCaw, the billionaire owner of the Santa Barbara News Press, already had a record of turning over publishers quickly and supporting pet causes in editorials. But beginning with the protest resignation in July of her editor, Jerry Roberts, she was soon at war with much of her news staff. Resignations and firings, lawsuits and a movement to unionize soon followed.

A scenario that seemed more likely to become typical played out in Philadelphia, where a local group headed by the public relations executive Brian Tierney bought the Inquirer and Daily News for $562 million.¹¹ In his PR days, Tierney was a bare-knuckles advocate for clients like the Roman Catholic Archdiocese of Philadelphia. But he and his partners signed a pledge not to interfere in editorial matters, which appears, so far, to have been honored.

The hitch was that a steep fall throughout the industry in third-quarter advertising hit the Inquirer especially hard. With union negotiations looming, Tierney wrote in an October memo to employees that without substantial concessions (and some reduction in work force), his group would be unable to meet their commitments to lenders in 2007.

A strike was narrowly averted in December and the unions accepted some easing of work rules and reductions in benefits. Then the other shoe dropped in the first week in January: 71 Inquirer newsroom employees and 30 more in the advertising department would be laid off. The following week, management announced it was considering putting the Inquirer’s landmark building in downtown Philadelphia up for sale.

Not all the news was bad. Tierney claimed he was bringing an informed outsider’s view to market the paper better and make it more attractive to advertisers, efforts that would start to bear fruit in 2007. He also succeeded in hiring as editor Bill Marimow, who won two Pulitzer Prizes as an Inquirer reporter and had earlier top editing jobs at the Baltimore Sun and National Public Radio.

Still, the events called into doubt whether Tierney would be able to play out his hopes for a gradual revitalization of the battered Philadelphia papers. The problems raised the question whether his group may simply have paid too much at the wrong time.

Elsewhere several of the new private owners made sharp newsroom cuts on top of those earlier imposed by Knight Ridder: MediaNews at the San Jose Mercury News, Hearst at the St. Paul Pioneer Press, and Black Press at the Akron Beacon Journal, which lost 40 newsroom employees from a staff of 160. (See News Investment).

The year occasioned interest in models of nonprofit ownership like that of the St. Petersburg Times or the Guardian in Great Britain. At both those companies, control is firmly in the hands of journalist/executives, an arrangement that may be difficult to replicate on the fly.

Freedom from short-term profit pressures has served those papers well, just as it has helped some of the large private chains like Advance and Cox. But no one is insulated from the current rough financial climate, and as much as news company executives are maligned for short-sightedness and timidity, it is far from clear that owners with no experience will do better.

And the new private owners are different in one important characteristic from the patriarchal owners of the past, a group whose record may be more checkered than is remembered. Whatever their strengths and weaknesses, family owners like Ochs, Hearst, Pulitzer, Scripps, Copley and many more made their reputations and their fortunes in news. They were, fundamentally, news industry people. The new generation is a different model. For some, such as Geffen or Welch, news is a second act in life. They made their fortunes elsewhere, with a different set of business pressures and attendant cultures. For others, such as private equity firms, newspapers may even be short-term, three-to-five-year investments made with an eye toward turning around and selling.

It is safe to say, though, that 2007 will almost certainly provide more public-to-private transactions and a richer record of whether the new ownership models are a potential path to salvation.

Footnotes

1. Pete Carey, “Knight Ridder Sold to McClatchy,” San Jose Mercury News, March 13, 2006

2. Katherine Q. Seelye, “Equity Firm Buys Paper in Minnesota,” New York Times, December 27, 2006

3. Kenneth Lowe, UBS Warburg Media Week Conference, December 6, 2006

4. Steven Syke, “An Unlikely IPO,” Boston Globe, October 24, 2006

5. Actually, McClatchy shares lost some value between the March announcement and the July close and more after — eating into the benefit for the three institutional investors who forced the sale.

6. Yahoo Finance – Tribune (TRB), max chart. High of $60/share in October 1999, low of $27/share in March 2006.

7. Dow Jones press release, “Dow Jones Agrees to Sell Six Local Newspapers for $282.5 Million,” October 26, 2006. http://www.dj.com/Pressroom/PressReleases/Financial/2006/1027_FIN_6440.htm

8. Katherine Q. Seelye, “Equity Firm Buys Paper in Minnesota,” New York Times, December 27, 2006

9. John S. Carroll, “Last Call at the ASNE Saloon,” speech to American Society of Newspaper Editors convention, Seattle, April 26, 2006 http://www.knightfdn.org/clips/200604/2006_04_26_johncarroll_asne.pdf

10. Ibid.

11. Katherine Q. Seelye, “ Philadelphia Investors Buy Two Newspapers,” New York Times, May 24, 2006

News Investment

With every business indicator down for 2006 and looking little better in 2007, the newspaper industry continues to downsize. Newspapers, especially big metros, are not only shedding reporting and editing staff, they are shrinking in physical dimensions — paper width, paper weight — and in the space allocated for news.

The predominantly bad news of 2006 broke down this way:

Newsroom staffing continued to fall, not as precipitously as in 2005, but with no end in sight. The layoffs and buyouts are still not as great as in other industries, and it would be a mistake to exaggerate them.
Nonetheless, when combined with smaller paper sizes and reduced newshole, the result is that American newspapers have diminished ambitions. The metros are pulling back to a much more local orientation.
At the same time, Wall Street seems to have reached a point where it wants more from companies than simply cutting. Growth on the top line (revenue) is more important.
The effort online continues to become more serious. No reliable count of online staff growth is available, but it clearly does not equal the losses on the print side.

Over all, the industry enters 2007 with a flurry of redesigns for both online and print products. This may well be the year when a smaller American newspaper, more analytical and targeted to older, well-educated readers, emerges as the new model.

Staffing

The most fundamental metric of American newspapers’ ability to cover the country is the overall workforce, the number of people dedicated to gathering and editing the news. In contrast with most other news media such as network television and radio, the newspaper industry has stood out because it sustained and in many cases enlarged its newsrooms in the 1980s and 1990s, even as its share of the audience declined.

That trend is now over, probably permanently. The newsrooms of America’s newspapers are shrinking.

The industry began 2006 with roughly 3,000 fewer full-time newsroom staff people than it had at its recent peak of 56,400 in 2000.³ Over the course of the year, that number fell further, and more cuts are coming in 2007.

How much did newsrooms shrink? Our prediction of the 2005 losses in last year’s report proved more severe than the actual estimated result as calculated by the Newspaper Editors in their annual census, released in April 2006. That showed an industry with 53,500 full-time professionals in 2005, a drop of just over 1% from the year before, but less than the 2.5% drop we had forecast.² Once burned, we are inclined to be twice shy on projections. Still, weighing the numbers that have already been announced (many are not) we would be astonished if the job loss was less than 500 to 1,000 in 2006. And it could be as bad, or worse, in 2007. If so, that would amount to an accumulated drop in newsrooms since 2000 of roughly 7% by the end of 2007.¹ But in certain newsrooms the cuts go far beyond that — as high as 40%.

Newspaper Newsroom Work Force

1977-2005

Design Your Own Chart

Source: American Society of Newspaper Editors, Newsroom Employment Census, 2006
Note: Minorities include Native Americans, African Americans, Latinos, and Asian Americans. ASNE dates its data according to the release date. PEJ presents the data according to the year the data was compiled.

Just as the circulation and advertising losses were worst at metro newspapers, the buyouts and layoffs were concentrated at prominent big-city papers, too. Among those that made headlines were the Dallas Morning News, the Philadelphia Inquirer, the Washington Post, the Cleveland Plain Dealer and late in the year the Boston Globe.

There were also deep cuts, however, at mid-sized papers. Under new ownership the Akron Beacon Journal lost a quarter of its 160-person news staff. MediaNews acquired the San Jose Mercury News and made cuts both there and at the St. Paul Pioneer Press, which it operates under an agreement with the new owner, Hearst. For all those papers, save the Plain Dealer, it was the second or third wave of cuts this decade.

Once again most companies opted for buyouts — offering veteran employees sweetened severance packages — as the preferred method of staff reduction. On the one hand, the practice allows for voluntary departure, and some of the takers may be ready for a change or near retirement . On the other, it tends to strip the papers of experienced, talented professionals and depletes their institutional and community memory

With fewer people, papers also pulled back on their reach. The Baltimore Sun closed down its venerable network of foreign bureaus. In January 2007, the Boston Globe announced that it would do the same. The Washington bureau of the Toledo Blade and Pittsburgh Post-Gazette, which generated the lead for a recent Pulitzer Prize in national reporting, was cut from five reporters to one. The Sacramento Bee called home its Los Angeles and San Francisco correspondents.

At another Tribune paper hit with repeated cuts, the Hartford Courant, publisher Jack Davis retired and editor Brian Toolan quit for a national editing job at the Associated Press.

The threat of deep cuts was also central to a mutinous struggle at the Los Angeles Times and the ouster of its highly esteemed editor, Dean Baquet. In Chicago, Tribune was insisting that the paper cut as many 140 newsroom jobs, trimming a staff that was at about 940 people.⁴ The paper’s publisher, Jeffrey Johnson, and Baquet both refused, arguing that the cuts would materially damage the quality of the paper. Still others at the Times were more alarmed by their sense that Tribune had no long-term plan. Each year, it wanted more cuts. “I think we can produce a great newspaper with 800 people,” one senior manager told PEJ. “I’m worried that next year they will just say, now cut to 600.”

Tribune ousted Johnson for resisting. Baquet remained, and launched a project in which the newsroom began to form a long-term plan for the paper’s future — the Spring Street Project — sending out some of his best reporters to investigate the future of the business. Before it was completed, the paper’s new publisher, who had been sent from Chicago, became incensed when Baquet continued to speak out against newsroom cutbacks. Shortly after Baquet returned from a speech at the Associated Press Managing Editors conference in New Orleans, in which he talked about editors pushing back on excessive staff cuts, he was fired. Baquet was eventually hired by the New York Times as Washington bureau chief.

The company’s proposed reductions for the Times are surely coming in 2007 if Tribune Company retains control.

Where the Cuts Came

The details of the cuts show their range and seriousness.

According to ASNE’s projection from its annual newsroom census, the industry lost 2,000 full-time newsroom jobs during the advertising recession of 2001 and a net of about 1,000 more in the next four years.

That set the stage for some drastic reductions during 2006:

*At the Belo Corp.’s Dallas Morning News, 111 news staff members accepted buyouts.⁵ That reduced the staff, which numbered 575 at the start of 2004 and stood at roughly 500 at the beginning of the year, to fewer than 400.⁶ Besides the typical financial pressures, the Morning News was one of four papers caught in 2004 padding its circulation. So as publisher Jim Moroney put it, the business was smaller — by at least 10% — than it had thought it was.⁷ During its heyday in the 1980s and 1990s under Burl Osborne, editor and then publisher, the Morning News was considered among the top 10 or even the top 5 papers in the country. In 2006, editor Bob Mong told an interviewer from a local weekly that it would aim to be “a leading paper in the region.”⁸ Belo’s Press Enterprise in Riverside, Calif., also bought out 50 newsroom employees.

*At the Washington Post, 70 senior staff people accepted buyouts early in June.⁹ Another 54 had accepted a similar offer in 2003. While the latest action stripped experienced talent from the newsroom, especially in the business news section, the Post remains well-staffed. And its Web site, WashingtonPost.com, is among the strongest editorially and best at generating revenue, with 75 to 100 news people assigned to it full-time.¹⁰

*The Philadelphia Inquirer, which absorbed 75 buyouts in 2005, seemed poised for an upswing when the local investors headed by Brian Tierney, the PR executive, bought the paper in July.¹¹ But the industry’s third-quarter advertising shortfall resulted in Tierney’s October announcement that he would need concessions and further reductions in staff to meet his group’s bank obligations in 2007. In the first week of the new year the layoffs of another 68 in the newsroom, about a sixth of the staff were announced.¹² In its glory days in the 1970s and 1980s under the legendary editor Gene Roberts, the Inquirer, too, was considered a top regional, winning numerous Pulitzers and becoming a destination for talent.

*At the Cleveland Plain Dealer, 65 news staff members accepted buyouts, reducing the staff by 17%, to 308.¹³ The paper’s owner, the Newhouse family’s Advance Publications, has a reputation in recent years for running good and well-staffed papers, including The Oregonian of Portland and the Times Picayune of New Orleans, while accepting more modest profit levels than Wall Street would demand if the properties were publicly owned. But Editor Doug Clifton told a local magazine that margins had slipped to “passbook savings levels” — presumably about 3%.¹⁴ That was too low and the paper was overstaffed for its sliding revenue base, he said. In January 2007, Clifton announced plans to retire later in the year.

*At privately held Copley, 45 staffers, including 19 in the newsroom at its flagship San Diego Union Tribune, accepted buyouts early in 2007.¹⁵ That represented a cut of approximately 7% to the newsroom.

*Privately held MediaNews trimmed 16 positions from the San Jose Mercury News (6%) and cut 21 from the St. Paul Pioneer Press (about 10%).¹⁶ Another buyer of the 12 papers McClatchy chose to divest, Black Press, cut 40 positions from a staff of 160 at the Akron Beacon Journal (25%).¹⁷ All three of those papers had experienced deep cuts earlier in this decade under Knight Ridder ownership.

*Other well-regarded newsrooms labor under the sword of Damocles. Tribune is expected to cut at least 100 reporting and editing jobs if it retains ownership of the Los Angeles Times. A new generation of leadership at Block Communications has said publicly it need concessions and cuts at the Pittsburgh Post-Gazette and Toledo Blade or it will sell the papers.¹⁸

*The surprise sale the day after Christmas of the Star Tribune of Minneapolis to a private equity group raises worry that staff cuts are on the way, even though the buyers, Avista Capital Partners, have said otherwise.

*Smaller papers don’t make headlines, but there are cuts there too — five in the newsroom at Media General’s Winston-Salem Journal, 44 part-timers, company-wide, at Advance’s Union-News of Springfield, Mass.¹⁹

*Plenty of papers — Tribune properties in particular —did not experience new announced layoffs or cuts in 2006 but have been on the attrition train for a long time. The Hartford Courant, for instance, has shrunk from a newsroom staff of 355 in 1998 to 265.²⁰ More cuts could be on the way in 2007. Besides the deep cuts at the Philadelphia Inquirer, the New York Times Company’s Boston Globe announced in January 2007 that it would eliminate 19 newsroom positions through buyouts, a reduction of about 5%.²¹

As this report was being prepared in early 2007, the Columbus Dispatch, the Sun Sentinel of Fort Lauderdale, and the Ann Arbor News all announced buyout plans. The Atlanta Journal Constitution has offered up to 80 buyouts to a newsroom of roughly 475 as part of a plan to reorganize print and online reporting and editing and reduce distribution and coverage from a multi-state region to, basically, metropolitan Atlanta.

Paper Size and Newshole

The year 2006 was also one in which the few holdouts for wide broadsheet design capitulated to the trend of trimming the physical size of the paper sheet. The Wall Street Journal’s first edition of the New Year packaged a thoroughgoing redesign with a substantial trim in web width and a reduction from six columns to five. The St. Petersburg Times, following the same game plan, reduced both paper weight and page width in a redesign in October. The New York Times plans to trim its width in August 2007.

The new dimensions may be easier for readers to handle and may be readily accepted, but there is no mistaking the guiding agenda of saving on paper expense. It also means less space, page for page, for news and ads.

Reductions in newshole (the daily space for news content) typically are not announced as big staff cuts are, but we would venture that the typical metro is printing 10% to 20% less news than in the good old days of 2000.²² Of course, papers with a lesser volume of ads are smaller, but here, too, budget-minded managers are capturing some savings on paper.

Among larger papers, the Wall Street Journal reduced newshole by 10% with the redesign, about half of that from financial tables.²³ The New York Times plans a 5% reduction when it trims width.²⁴ And in a memo to the newsroom in 2006, editor Len Downie of the Washington Post mandated an unspecified percentage of further “tightening” of the total space for news and individual story lengths.²⁵

Is the Sky Falling?

Anyone who wants to make the case that despite all this negative news, the sky is not falling, might cite these factors:

*Medium-sized and small papers are not experiencing the severe financial setbacks of the metros and are not cutting their staffs as deeply. That would explain, for instance, why the net job loss, by the Newspaper Editors’ count, during 2005 really was not much more than the cuts announced by big papers (though the census does show some losses at smaller papers).

*Cuts and threatened cuts get the notice, but stability is invisible. The co-author of this report on newspapers, Rick Edmonds of the Poynter Institute, is given access to the paper-by-paper results on the condition that individual titles are not named. At the end of 2005 about as many papers with 250,000-plus circulation had increased staff size or held it equal since the end of 2001 as had experienced losses. In total, however, losses well outnumber gains.

*The trims are being paired with development and increased staffing of online sites. Not even rough counts of online-dedicated news staff are available, and it is unclear whether the reports papers file for the ASNE census consistently include those positions. It is fair to say, though, that the increases in no way cancel the losses. Belo, for example, paired the announcement of 111 buyouts at the Dallas Morning News with a planned increase of 30 positions in its Dallas online operations. At the same time, the responsibility of creating content for the new platforms also adds to the workload of the remaining staff in the newsroom.

*There needs to be some correspondence of news staff and budget to revenues and revenue prospects. As the business shrinks, so must newsrooms.

*With cuts to news space and the elimination of features like long-form stock tables and TV listings, not as many people are needed. Probably, technology from Google to cell phones to electronic page design has made the work of the newsroom at least somewhat more efficient.

*The industry still comfortably fields more than 50,000 full-time professionals. Losses for the decade are well under 10%.²⁶

All that said, the fairest assessment must include an acknowledgement that the cuts have an effect, one that is only like to grow.

The Ambitions of the American Newspaper

Collectively, the effects of smaller staff, smaller sheets of paper, and smaller newshole add up to something more significant. The logical next phase for the industry is defining a newspaper of more modest ambitions and proportions.

What that will mean to citizens is hard to say definitively. Where are the cuts being made? What does more localism mean? How does building up the Web affect original newsgathering? Are the hires online technical people or reportorial? How will citizen contributors be used? The answers to all those questions are still emerging.

For now, this much can probably be safely determined.

Concentrated at metros, the staff reductions are gutting once-great and ambitious publications. In effect, the industry ends up ceding national and international coverage to four papers and the Associated Press. That means less effort, less variety.

Newspaper editors say one of the last things to go will be investigative public service work. Certainly the flow hasn’t stopped. But retaining an investigative team is not the whole story. The work at its best entails a willingness to let a number of reporters explore leads that may not pan out. That requires generous staffing rather than lean.

And the watchdog function is more than big-splash special investigation. The novelist Carl Hiaasen’s 2003 book, “Basket Case,” a screed against corporate newspapering and a villainous CEO with more than a passing resemblance to Tony Ridder, puts the matter pungently. A hiring freeze at the fictional Union-Register leaves a single reporter covering first two communities, then three, all of whose city councils meet on Tuesday. “The politicians in Beckersville and Palm River are not exceptionally astute,” Hiaasen writes, “but soon figured out that every other meeting was pretty much a freebie and composed their venal agendas accordingly.”²⁷ Management racks up a 23% profit margin while readers “were semi-regularly being reamed and ripped off by their elected representatives, all because the newspaper could no longer afford to show up.”

The curmudgeonly alt-weekly columnist Jack Lessenberry offered this real-life example from Detroit. A local woman, Iris Ovshinsky, who with her husband was a prominent inventor and scientist, died. Neither the Detroit Free Press nor the Detroit News nor the suburban Oakland Press provided more than passing notice. Compounding the offense, Lessenberry said, two of the three mistakenly reported she had drowned when she in fact had suffered a heart attack while swimming.

So loss of people along with newsgathering and editing capacity translates into loss of what people come to a newspaper looking for. There is a downside, too, for those who stay. News people aren’t known for their cheery dispositions, but the last few years have left morale in many places, as a colleague used to say, “lower than a snake in snowshoes.” A Pulitzer-Prize winning reporter, who had surveyed contacts at other regional and mid-sized papers, privately put it this way: “In the trenches, people are scared, panicking. They look to the glass offices for leadership but aren’t finding it. Where are we going? Are we doomed?”

The response of companies is no. Doom is an extravagant and emotional overreaction. Rather than giving up, the industry is becoming more local. By the end of 2006, that new phase — the micro-local mantra — was spreading from small and mid-sized papers to the likes of the Philadelphia Inquirer, Dallas Morning News, and Boston Globe. The extended debate over the future of the Los Angeles Times could be framed as a question of whether it should scale way back on its national and international news effort in favor of more intense Los Angeles coverage.

Skeptics are dubious. The big metros are not equipped to cover civic clubs and little leagues as a suburban weekly or daily might. Part of the economizing, indeed, has been pulling back staff from the outer edges of the metro area. Hence, some of those communities won’t get local coverage at all.

Part of the re-imagining of print newspapers involves seeing them as complementary to the online edition and/or targeted to a narrower, older audience.

The Wall Street Journal billed its redesign project as Journal 3.0, suggesting that online and print would play in tandem in new ways. USA Today has a version of the process in progress, to be unveiled around the date of publication of this report.

Wall Street Reaction

In many a telling of this story, analysts and investors are the heavies, driving public-company executives to make imprudent cuts for shot-term profits. That is not all wrong. Institutional investors are in the newspaper game to make money. Perhaps going public was, in retrospect, a deal with the devil for many companies (though most of their executives insist otherwise). (See Ownership).

But there is some over-simplification at work here. In the roster of staff-cutters earlier in this section, private companies — Advance, Copley, MediaNews and Brian Tierney’s Philadelphia group — are generously represented. Financial pressures are now significant for any good-sized newspaper, so inattentiveness to cost control is not an option.

And Wall Street, while it still likes cost control, has also come to see that newsroom cuts are no cure-all. Both Knight Ridder and now Tribune sought to placate shareholders with high-profile cuts, and neither stock recorded any forward movement of note as a result. Journal Register, proudly skinflint in its news operations, had the worst stock performance of any public newspaper company in 2006.

That squares with what we hear from the three analysts we read and talk to frequently — Lauren Rich Fine of Merrill Lynch, Paul Ginocchio of Deutsche Bank Securities and Peter Appert of Goldman Sachs. All agree that excessive newsroom cuts will lessen reader appeal, circulation and value to advertisers. And they say that to build online, investments in content will be needed. They contend that revenue growth rather than profit margin is the key to getting more favorable valuation in the market. Ginocchio and Fine add that newspapers, while whacking at their newsrooms, have been relatively slow in upgrading their ad-sales staff or identifying potential savings in production and distribution.

Attention to cost control is still viewed as a plus. But these days deep newsroom cuts are likely to be seen more as a symptom of financial distress and lack of a strategic plan than as a remedy.

Online: The Good-News Story of 2006

In last year’s report, we noted that after languishing for years, newspaper online sites showed a better effort in 2005 and might be in for more visible upgrades in 2006. That came to pass, and rather quickly.

Rick Edmonds and colleagues of his at the Poynter Institute surveyed a dozen online news operations in spring 2006. PEJ also included another 38 sites in its own study. Both found two dominant trends: (1) All the sites were aiming for rapid posts of breaking news. The practice of saving good stories (at least those with a strong time element) for the next day has become passé. (2) Sites are experimenting with all manner of multi-media enhancements – blogs, audio, video, slide shows, podcasts and interactive features . No one model or even two or three models have yet emerged as dominant. It’s reasonable to think some approaches will become more successful and popular than others, but for now a lot of experimentation by itself represents a new level of commitment.

The initiatives were typically supported by what might be called a “some-of-both” staffing effort. The main newsroom staff is increasingly being asked to contribute breaking news and multimedia efforts. At the same time sites are adding producers, tech specialists and reporters and editors with special skill at tailoring their work to the medium. We heard almost everywhere of bottlenecks: not enough people to teach print people the new formats or work with them to execute ideas.

Unfortunately, there is a dearth of information on even such basic questions as how many full-time news professionals now work predominantly online. A fuller set of metrics paralleling print basics like staff, budget and newshole, is several years away. So is any measurement of combined news effort in print and online, though companies have been quick to add faster-growing online advertising revenue into their reports of financial results.

National web sites — the Wall Street Journal, the New York Times, USA Today and the Washington Post — have dedicated news staffs of 50 to 100 and participation (even full integration) with the legacy newsroom. It shows in sites that are freshened hourly and have a rich offering of Web-specific features and a steady stream of innovations. On the day the draft of this section is being written, NYTimes.com offered a first