Mr. Fellone, my questions are:

How is the Democrat-Gazette trying to monetize the Internet? Please give us some specific examples.

Are there differences between the paper product and the Internet product? Will the Internet always be second-place to the paper?

Mr. Hussman maintains that he'll never give news away for "free." How does he take into account for bloggers, TV news and the Associated Press, all of which regularly reformat the paper's news product and re-distribute it for free?

Why doesn't the newspaper concentrate more on Arkansas and local news? The front page is frequently dominated by national and international news that is readily available from numerous other sources. But you fill the Arkansas section with the obituaries and opinion pages, why not use more state news?

Many questions, my friend. On some, I'm not so authoritative. But let me try.
Monetize the Internet? Sell more ads. Maybe have more partnerships. I'm unclear, but so is the future.
Differences? Yes. The web site has tons of stuff that can't be shoehorned into the print newspaper. That's a good thing for the web site. The nature of the web site is that it can be limitless. The nature of the newspaper is that it has a finite number of pages. The idea is that the one complements the other, and vice versa.
Second place to the newspaper? See above, complement.
On the question of free ... technology has changed everything. It's a cut-and-paste world now. What we have to do is offer three important things. First: Authoritative, comprehensive, useful, profound news of Arkansas — in the public interest. Second: Provide the best in informed opinion — in the public interest. Third: Do it every single day. Oh, fourth: Have fun doing it. If we have fun, so will our readers.
Why don't we concentrate on local and state news? We do. Who else covers the sheer volume of news we do? No one. Look at today's Arkansas page. More news from more places by more journalists. But we also try to give, on the front page, a snapshot of the day's more important news events from the nation andd the world. There's a constant give-and-take in the newsroom about what should go on the front, and indeed above the fold. You and I could drink copious cups of coffee discussing this one topic.
Hope this helps, and thanks for writing.

I'm curious why we're talking about the current problems of the statewide daily newspaper as though they were happening in isolation. It seems to me that EVERY advertising-dependent entity in the state is in trouble, too.

You are wise and perceptive. These are difficult times for local television affiliates as well. The Wall Street Journal recently reported that affiliates across the country will generally suffer a 20-30 percent decline in revenue in 2009.
One thing about newspapers is they tend to be transparent. Our newspaper has reported at least twice on its own reductions in staffing.

Hello, Little Rock! You're right -- local stations and network news divisions are hit hard too -- though not the three largest cable news channels, which are reporting some strong advertising revenues as they reach large niche audiences. I think part of what's driving the coverage is the (perhaps belated) recognition that newspapers really have been the engines driving most serious news coverage in communities around the country. Reporters and producers at local TV stations and even national television networks acknowledge this when you talk privately with them; these days, as papers seem imperiled, they are willing to say so publicly as well. I say this as a recovering newspaper reporter: at my old daily, the Baltimore Sun, our staff topped out at roughly 410 news staffers; the comparable figure for the largest TV station in town was several dozen. Even if their staffers matched ours in skill -- and I'd argue they largely didn't -- the math tells the story. But you're right that it's a problem throughout the industry. Local TV stations around the country are also cutting back on such watchdog functions as covering state politics and government with the seriousness it deserves.

Many newspaper companies have attacked their declines in revenue by cutting staff; the Democrat-Gazette sincerely seems to be trying to avoid that strategy, at least in the newsroom, and deserves kudos for the effort to preserve quality.

The strategy employed so far to reduce expenses, however, has seemed a bit erratic, and I am wondering if you can provide insight behind the decisions to:

* provide christmas bonuses in December at a time when trouble clearly lied ahead?

* announce in February -- after the first round of layoffs and news that 2009's 401K contributions would not be made -- that 15 percent of 2008's profits would be allocated to the 401K and profit-sharing plans, above what was needed to fully fund it for that year?

* Emphasis both in December and in February that the shareholders come last on the company's priority list -- yet in a February memo shortly after layoffs and before mandatory furloughs make the annnouncement that they planned to still take their regular dividends of 10 percent of net income?

And lastly, can you tell us what other cost-saving measures have been taken that haven't been addressed in memos. Have there been efforts, for instance, to look at the building's energy consumption and employ strategies to reduce utility bills? Or efficiencies found in production or other areas? Etc.?

Sorry, but I'm not in a position to answer the questions about bonuses, etc. There's a totem pole here — everywhere — and I'm down there at the bottom, trying not to tump over.
As for other cost-saving measures, there are three of significance. First, and most important, was the redesign of the TV magazine. As reported in our newspaper, changing from a quarter-fold to a tabloid will save us about $300,000 a year in production costs. Many people were unhappy — but many understood the need for the change. Second, we've cut back the Sunday Travel section. Third, we've eliminated the Books section. By making these latter two moves, we effectively cut six pages from the Sunday newspaper. All these changes help us maintain the core of what we do. That is, state and local news coverage.

How many newspapers around the country charge for online content?

Not many. We are a slim minority. Part of the problem is that once you give it away for free, for many years, it's hard to take it away. When we took it away, we got literally hundreds and hundreds of angry responses. It's never fun to make so many people mad. Is paid online content the right answer for all newspapers? Ask again in two years. We may know more.

Not many. The Wall Street Journal is the shining beacon, but it has an unsurpassed brand name in a big niche market -- business and financial news. Efforts by larger papers, such as the NY Times and the LATimes to put part of its editorial offering behind a pay wall failed. So did a similar initiative at the Columbus Dispatch in Ohio, which, as I understand it, determined a few years ago it could charge enough more for online ads by dropping those barriers that it would be worthwhile. There's a lot of interest now in figuring out other means -- "micropayments" that would charge online readers a penny per page view, or some similar model -- but no clear way to get people to embrace the idea of paying for something they've previously read for free. The key question is, can you find something else that's good enough to replace what you're being asked to pay for. And often, you can, even if it's not quite as good. But NYTimes Executive Editor Bill Keller says the paper is exploring how to structure a paid access model.

One irony: a lot of people already ARE paying to read newspapers online -- it's just they're paying the companies that provide broadband Internet service, as opposed to the newspapers actually doing the heavy lifting of reporting, writing, editing and presenting that news.

Mr. Fellone,

Thank you for taking questions. Did the Dem-Gaz see a decline in print subscriptions when it was "giving the news away for free" on the website?

Our evidence was essentially anecdotal. When people are telling you, "Hey, thanks for making the newspaper free on the web; I cancelled my subscription!" you better come to a logical conclusion.

I never thought I would get rid of my telephone in favor of this cell phone. Even my 80 year old parents did too. I prefer the online version and think it is only inevitable that the traditional paper version will fade. The question becomes, what can the papers do to transfer great journalistc inquiry without losing great journalists?

Let me point out that in the history of the world, no medium has ever been eliminated. We even still scribble on walls!

To keep the great inquiry, we have to keep the journalists. To keep the journalists, we have to make enough money. From all sorts of revenue streams. Back to the topic of free website or not. When we went to a paid web site, angry people would complain. I sometimes asked them what they did for a living. One guy was an insurance agent. I asked: Can you please give me a life insurance policy — for free? He was not amused, but I think he got the point.

It seems unlikely that newspapers can continue to employ as many print journalists as they have in the recent past. Revenue is peeling away, and if they went to an all-online future, they could continue to employ even fewer, as advertisers are willing to pay far less to reach people online than to reach print readers. It's a few dimes to the dollar. We're already seeing that process occur, as newspapers owned by the Tribune Co., Gannett, Cox Hearst and McClatchy, among others, have suffered from repeated and deep cuts. The Atlanta Journal-Constitution just announced a staff cut of 30 percent -- on top of previous cuts to the news room. It may be that newspapers generally smaller become but that ultimately there is a profusion of other media outlets to compete and complement -- often at the same time. Why, well, obviously the financial obstacles to publishing are awfully small online. So niche online publications can serve serious (and not-so serious) purposes. But there's no guarantee that's how it plays out.

I haven't yet had a chance to listen to the story, but I'm curious as to whether the future is moving toward a sat/sun print edition only, with the Mon-Fri news exclusively presented electronically? Just from my own experience, I never read a print newspaper during the week but love the experience of curling up with a print paper leisurely on the weekends, and I would imagine that this scenario might hold true for others.

We plan to be a seven-day print publication. That's what we are, what we want to be. I can see some newspapers going to a different print schedule. Some already are. Each newspaper will find its own way.

You're beginning to see that in Michigan, with both major papers in Detroit cutting back to home delivery three days a week, and a chain of smaller papers in the state reducing the print publication schedule as well. I believe you'll see that in other parts of the country -- but such decisions are very much dependent on factors in each local area. Typically Monday is a pretty dead day; Thursday, Friday and Sunday tend to be winners. When newspapers had fat profit margins they didn't have to make such austere decisions. Now, many do. Some remain perfectly profitable, even amid this global recession. But others are losing money -- and still others have already been losing a ton of money for years. So survival of some papers with great histories has been in doubt.

from Clay Shirky's "Newspapers and Thinking the Unthinkable"
http://www...thinkable/

The curious thing about the various plans hatched in the ’90s is that they were, at base, all the same plan: “Here’s how we’re going to preserve the old forms of organization in a world of cheap perfect copies!” The details differed, but the core assumption behind all imagined outcomes (save the unthinkable one) was that the organizational form of the newspaper, as a general-purpose vehicle for publishing a variety of news and opinion, was basically sound, and only needed a digital facelift. As a result, the conversation has degenerated into the enthusiastic grasping at straws, pursued by skeptical responses.

..Round and round this goes, with the people committed to saving newspapers demanding to know “If the old model is broken, what will work in its place?” To which the answer is: Nothing. Nothing will work. There is no general model for newspapers to replace the one the internet just broke.

With the old economics destroyed, organizational forms perfected for industrial production have to be replaced with structures optimized for digital data. It makes increasingly less sense even to talk about a publishing industry, because the core problem publishing solves — the incredible difficulty, complexity, and expense of making something available to the public — has stopped being a problem.

..."You’re gonna miss us when we’re gone!” has never been much of a business model. "

"Society doesn’t need newspapers. What we need is journalism. For a century, the imperatives to strengthen journalism and to strengthen newspapers have been so tightly wound as to be indistinguishable. That’s been a fine accident to have, but when that accident stops, as it is stopping before our eyes, we’re going to need lots of other ways to strengthen journalism instead."

I have read this piece. It has in it much food for thought.

from an interesting interview with Brian Storm, of MediaStorm:
http://www...?id=100937

"When everyone has access, that is disruptive and causes chaos. Access is the territory that journalists used to own and now they look at what is happening with the crowd. The crowd has access to these great digital cameras, to this incredible powerful publishing tool called the Web, and they have expanded the conversation. They have access to distribution that we, as professional journalists, have. This doesn’t make me fearful; it makes me excited. That’s democracy—to have more people, more input, and more access to different perspectives.

We, as journalists, also have to elevate our game. We can’t keep doing things the way we’ve always been doing them. We have to get better as journalists. From my perspective, this actually helps long-form in-depth journalism since the crowd is less likely to go that direction. In fact, they’re taking some of the burden off of us in producing and discovering the things that waste our time. For me, the larger question is why we are wasting our time and skills covering stories that the crowd is all over. Why are we, as professional journalists, allocating our resources for such daily, perishable stories? We should be allocating them for things that are in-depth, investigative and require the kind of expertise and professionalism that we have. We need to take a deep breath and remember all the things that we used to do, then reconsider given the new landscape and decide what is going to give us the most value over time. What is the role that we need to play? I don’t believe that is day-to-day, perishable content. I think we need to be more in-depth, more investigative, and more robust in what we do."

from John C. Dvorak's column: "Newspaper Publishers are Idiots"
http://www...X1K0000584

"Like most writers who have worked at newspapers, I have mixed feelings regarding their future as instruments of communication for something vaguely referred to as "news." I'd advise people to take a good look at newspapers before 1850 and compare them with what we have today.

Early newspapers consisted of local stories, summaries of events, and listings of items such as ship departures and other notices. There were no recipes, feature stories about dogs, or full-page advertisements for movies.

Then somewhere along the way, newspapers became more entertaining than informative. The writing was often flowery and dramatic. Columns written by personalities joked around about the events of the day. There were cartoons and horoscopes. If I wanted to know what ships were coming in and out of port carrying a shipment of Honda cars, where would I find it? Some papers carry notices like this in the financial pages, but most do not.

And, as an aside, what is dumber than the stock quote listings in the newspaper? You can type a ticker symbol into Google and get a real-time quote with all sorts of other information. How do you compete with that? Individual sites and technologies simply do certain things better than old-fashioned newspapers can.

So should the newspaper go the way of the buggy whip? No, it just needs to return to its roots, and focus on providing densely edited and directed information of importance as decided by a trustworthy source. And it should leave the fluff to the Internet.

For too long newspapers have taken on the role of cultural arbiter and distribution channel for popular culture ideas. That is all over and can never return."

I find it both interesting and telling that this conversation could not happen in print or on the Arkansas Democrat-Gazette Web site. Is there any plan to make the ADG more interactive online? Allowing a comment section on stories and updated news for subscribers?

So far this year we have seen changes in the paper that tighten it up like the removal of the Weekend section, staff layoffs and two days ago I received notice of your subscribers price increase. All these things added together means a lower value to me. It seems now would be the time to be looking for ways to appeal more to subscribers not less.

It also seems, and this is purely based on gut feeling, that the ADG is using more syndicated news. I often find that page after page is written by a writer for a New York, Chicago or LA newspaper. I see less and less local reporting which is something you claim to offer to subscribers. Maybe more local sporting events besides football and basketball.

I guess I'm not seeing the love for the subscriber, so tell me why should I continue my subscription?

You should continue your subscripion if you want the best, most authorative and comprehensive state and local news in Arkansas. Plus the best informed opinion in Arkansas.
As for sports, your perception that we only cover football and basketball on the local level is wrong. We cover high school wrestling, and volleyball, and track, and variety of spring and fall sports. Soccer? Tons of it in season. Even rugby. And swimming. Gymnastics! All in season. Not to mention outdoors. Did I mention hunting and fishing?

At the root of this issue is newspaper profits, right? From what I understand, the lifeblood of newspaper profits aren't subscription or newsstand sales, or even classifieds (hello craigslist) but rather advertising revenues.

Newspaper execs still want their tried and true advertising structure to hold online, but it likely won’t be able to support massive organizations that we have currently. I think advertising itself might rest on a rotting business model.

Online—revenues, per reader, are far lower online than they are for print. That pattern is interpretable in two related ways: First, ad impressions aren’t as valuable online—for every ad dollar that a print reader brings in, an online reader brings in just 10 to 15 cents. That’s due to the nature of the web, which has users actively seeking relevant information, so they can more easily ignore ads—rather than passively consuming them in a newspaper or an hour of television.

And this is the big one: the web offers advertisers incredibly rich ways of tracking how well their ads are performing, which means it also provides a truer pricing mechanism for ads. Ads have thus come up wanting; they never were as worthwhile as the ad agencies and management consultants had hoped—and companies know that now.

The crossroads that media now faces recalls a similar situation from the interstice between the Renaissance and the Industrial age. At that time, the model that supported writers and the written word changed completely. Writers, who once depended on the largesse of a patron, suddenly had to earn their money from a publisher. (The changeover eventually led to the rise of advertising.) Early on, self-published pamphlets and myriad (scurrilous) “news” sources littered European streets.

That sounds really familiar to our current situation. We now live in the rubble of an obliterated system. We can hear a million new voices, on blogs and Twitter and message boards etc..

My guess about the shape of publishing’s future is that there won’t be a “bridge” between this phase and the next. Rather, in a situation analogous to 200 years ago, we’ll see the wholesale collapse of our present big-media system, and its replacement with another that severs the cord with advertising revenue. In the meantime, things are going to get interesting.

One element that I think is worth pointing out -- and I find the online essays by Shirkey and Storm particularly intriguing -- is how much of this damange is self-inflicted. The Tribune Co., owner of the LATimes, the Chicago Tribune, andthe Baltimore Sun, among other well regarded papers, is currently operating under bankruptcy protection. So are the owners of the Minneapolis Star Tribune and the Philadelphia Inquirer. Each is laboring under severe declines in local economy and the structural changes in the news business, such as the erosion of classified advertising cited above. But each also took on enormous unwarranted debt in recent years to purchase those titles, on the belief that they would figure out their revenue challenges and that they could perennially refinance their loans. The freezing of the credit markets last year created incredible hardships for them that have little to do with the underlying viability of news organizations. Other major newspaper companies that are not in bankruptcy, particularly McClatchy and MediaNews are also burdened by enormous debts taken on in recent years to finance their purchase of additional papers. These turn out to be self-inflicted wounds.

A "wholesale collapse"? I dunno. More likely just a gradual shift. I don't think the American people will allow most of their prestigious newspapers to fail. They are too important. The "fourth estate", critical to our democracy. Executive, legislative, judicial, then the press.

That said, there are lots of politicians and corporate thugs that wouldn't mind seeing the press decline.