WHAT'S NEXT: INNOVATIONS IN NEWSPAPERS

A new face of a newspaper in China.

More and more, Saturday editions are becoming like second Sundays.

This is an expected crisis.

But a big one.

That will affect not just banks, but millions of small investors.

Millions of newspaper readers.

But, another crisis to which newspapers were not ready to offer quick responses.

Why, why, why?

What to do?

Help me!

Instead, we got front pages with the traditional “Oh my God!” pictures.

The traditional charts.

And reports about what happened YESTERDAY around the world.

So…

Why do we need these kind of newspapers?

Why do we need these kind of newsrooms?

Why do we need these kind of journalists?

What we need are TOMORROW newspapers.

What we need are jour-ANALYSTS.

Tonight I had dinner with Jose Luis Diaz de Villegas (Paco Villon) and his wife Graciela, along with Carlos Soria, Marta Botero and Claude Erbsen.

Jose Luis is now 81 but full of life and the same curiosity of a young reporter.

This Cuban engineer that Carlos Casteneda recruited as the first Art Director of El Nuevo Dia in San Juan, Puerto Rico, is a great journalist, illustrator and internationally-known gastronomic critic.

He has more than 100 “carnets” where he keeps a graphic record of friends, daily moments, and details of his life.

People like Jose Luis have made newspapers art galleries.

El Nuevo Dia, one of the most succesful newspapers of the Americas, gave him the freedom to present his daily work.

Great newspapers are always great places to display artistic talent.

Visual journalism is what Jose Luis produced on a daily basis.

He was a teacher for many generations of journalists.

We need more people like him.

We need more visual journalists.

The Financial Times headline:

Online ads to overtake US newspapers

The story:

The rapid growth of online advertising is expected to see the sector overtake US newspaper advertising in terms of size by 2011.

The forecast comes against a backdrop of declining advertising sales reported by newspaper groups this year in spite of continued strength in the US economy.

The findings are from a widely-watched annual research report on the media sector by Veronis Suhler Stevenson (VSS).

In the 2007 study, published on Tuesday, VSS forecasts that online advertising will grow by more than 21 percent per year to reach $62 billion in 2011, making it bigger than newspaper advertising, which is expected to total $60bn in 2011.

“The path of online advertising and newspaper advertising is a continuation of what we’ve been observing for many years, but it is finally getting to the point where the lines will cross,” said James Rutherfurd, managing director at VSS.

The VSS forecasts also illustrate the lag between changes in consumers’ behaviour and advertising spending.

The survey also measured the time spent on different media, and in 2007 the amount of time spent reading newspapers is expected for the first time to be overtaken by time spent online.

Spending by companies on information and media, including business-to-business magazine and trade shows, is also increasing, up 8.1 per cent in 2006 to $227 billion.

“Knowledge and information industries drive the US economy, meaning that information is a critical tool,” said Mr Rutherfurd.

“Companies are prepared to pay a lot of money to get that information.”

Good news if you are in the informartion business.

Bad news if you are in the newspaper printing business.

(Thanks to Michael Agar in London)

Dear Sirs,

We want to thank you very much for your genuine interest and concern about our future independence and working conditions under the new ownership of Mr. Murdoch.

But after reading that your bankers’ and lawyers’ $40 million in fees will be paid not by you but by News Corporation, and after getting almost $3 billion in cash, we would like to know if you are going to share some of this money with us.

You’ve said all along that our quality journalism was the most important asset of Dow Jones as a media company.

We agree.

Thank you very much.

The journalists and our first-class journalism were the key elements behind the success of your newspaper.

But, let’s be serious: how much of that $3 billion are you willing to share with us?

Or has another ship been sold with the slaves inside?

Yours,

The slaves.

After capturing the Wall Street Journal, Murdoch is gunning for the FT

Tim Luckhurst reports in the Independent on Sunday, that News Corp goliath’s latest acquisition isn’t just a blow for the liberal left in America. It also threatens a very British institution. 

Following June circulation figures showing the newspaper up 0.72 per cent year on year to 444,763 daily sales, even better news emerged last week from publishing parent Pearson. The group, which also owns Penguin books, revealed that its pre-tax profits almost trebled in the first half of the year to £40m.

FT journalists had particular reason to celebrate. Newspaper division profits increased by 28 per cent, reflecting a 12 per cent rise in subscriptions to their title’s four printed editions (UK, US, Europe and Asia) and equally impressive growth in subscribers to the online version, FT.com. 

Pearson’s chief executive, Dame Marjorie Scardino, boasted that “the FT has never been stronger editorially” and is “doing fantastically well”.

But the good news came against the background of market-changing events taking place beyond Pearson’s control in the heart of New York’s financial district where New Corporation concluded the sale of Dow Jones, and the WSJ for $5.6bn.

In America liberal activists from Moveon.org – a campaign group trying to “fight the right and elect progressives” – advertised their fears of how Mr Murdoch may use his acquisitions. 

They paraded the streets with dummy editions of the WSJ carrying real headlines from News Corporation’s ideologically conservative Fox News network. “Is the liberal media helping to fuel terror?” asked one.

There had been hopes – not least inside the FT – that the Bancrofts would find Mr Murdoch’s reputation unpalatable and deny him the status of owning Dow Jones and the WSJ. Their spokesperson described the family’s thinking as “long, complex and arduous” and insisted that the decision to end more than a century of stewardship was reached only after “much soul-searching, hard work and analysis”.

The truth of that was confirmed when one family member of the Dow Jones board, Leslie Hill, resigned, explaining that although the deal was lucrative it could not compensate for “the loss of an independent global news organisation with unmatched credibility and integrity”. Now Pearson has at least as much cause for concern as the American left.

Friday’s FT outlined Mr Murdoch’s likely ambition, explaining that the purchase is “less a bet on newspapers than a move … to acquire content that he can use across the many media sectors in which he plays: print, television and, increasingly, the internet”. 

The assessment almost certainly understated News Corporation’s ambition to position the WSJ as a direct competitor to every edition of the FT.

The 118-year-old WSJ is hugely prestigious in America, where it has the second-highest circulation of any newspaper. It comes complete with tailored editions for Europe and Asia and a radio news operation that sells business reports to 280 American radio stations.

With 931,000 paid subscribers, its internet edition, WSJ Online, is the world’s largest paid-subscription website.

To this Dow Jones adds online financial and business information services, which enjoyed a 30 per cent increase in advertising revenue between the first quarters of 2006 and 2007. 

Other products include Barron’s magazine, a weekly title providing detailed market analysis as well as its own subscription-only website. MarketWatch, a financial news and information site, is another powerful Dow Jones asset.

Adding these new prizes to his existing properties, Fox News, the New York Post newspaper and his soon-to-be-launched Fox business Channel gives Mr Murdoch a potential financial news behemoth. 

A few analysts question whether even that justifies his decision to pay 67 per cent above Dow Jones’s market value. Media sophisticates believe he knows exactly what he is doing. 

They note that Pearson understood the value of Dow Jones sufficiently clearly to cast around for a partner to help it make a counter-bid.

“If I were a businessman who didn’t understand media I might say Rupert Murdoch had overpaid,” says Lawson Muncaster, chief executive of the London financial newspaper City AM. 

“But in fact it is an extremely clever move when you consider it in a global context, not a US one.” Apart from Dow Jones’s online power, he explains, “WSJ’s strength is in Asia, where Murdoch’s existing presence is weak. This acquisition makes a perfect match.”

The FT like the WSJ, publishes tailored editions for America, Europe and Asia. It owns a magazine, The Economist, and has invested heavily in online content, acquiring 97,000 subscribers to FT.com. But Rupert Murdoch has pledged all-out war. In a letter to the Bancroft family he wrote: “News Corporation [will] leverage its global resources and platforms to drive international growth.”

A Pearson spokesman is dismissive. Pointing to evidence that many WSJ readers are appalled to see the title under News Corp control, he explains: 

“It has taken the FT many years to change from being a UK paper to a global business newspaper. We are not complacent, but we think our strategy remains good. 

The FT will be a worthy competitor for the WSJ. We now sell more copies in the United States than we do in Britain. More than half of our advertising runs in all four editions.”

It is fighting talk, but while the FT’s reputation remains potent, Press Gazette’s Mr Ponsford warns: “Mr Murdoch will soak up losses for years to beat off competition. The FT can’t do that. It has to deliver to Pearson’s bottom line.”

 (Thanks to Michael Agar in London)

Gorbachev will appear in an ad campaign for the French luxury label, along with tennis stars Steffi Graf and Andre Agassi and veteran French actress Catherine Deneuve, the division of the LVMH group, Moet Hennessy Louis Vuitton.

Shot by Annie Liebovitz, the ads focus on travel — a “core value” for the company which started in 1854 as a trunk-maker.

Gorbachev is featured in a car, a Vuitton bag at his side and the Berlin Wall in the background.

Another example of the new “gauche caviar.”

Like the biggest billboard in Moscow across from the Kremilm that has a gigantic ad for Rolex.

Near the new Moscow Ritz hotel, with standard rooms at $1,000.

The Wall Street Journal posted the full text of the agreement, in a SEC filing.

Board members will be paid $100,000 per year.

The initial members of the editorial board will be: Lou Boccardi, former head of the Associated Press and a director of the Gannett Co.; columnist Thomas Bray; former Republican House member Jennifer Dunn; former Tribune Co. president Jack Fuller; and Nicholas Negroponte, founder of MIT’s Media Lab.

In summay:

SPECIAL COMMITTEE

(a) The Company hereby establishes a stand-alone special committee (the “Special Committee”) to oversee and enforce compliance by the Company and Dow Jones and their Affiliates with the terms of this Agreement and to perform the obligation and undertake its responsibilities and rights hereunder. The Special Committee shall have perpetual existence. For the avoidance of doubt, the Special Committee is a special committee of the Company and is not a committee of the Board of Directors of the Company or Dow Jones.

1.2 Composition.

(a) The Special Committee shall consist of five (5) members (“Members”) who are distinguished community or journalistic leaders and who are independent of the Company, Dow Jones, the Murdoch family, the Bancroft family and their respective Affiliates (as defined by Rule 12b-2 under the Securities Exchange Act of 1934, as amended). As used in this Agreement, the term “independent” shall refer to persons who, in the sole judgment of the Special Committee, are able to consider and evaluate objectively any issue that comes before the Special Committee and whose judgment is not impaired by any interest in or relationship with the Company, Dow Jones, the Murdoch family, the Bancroft family or their respective Affiliates. Employees, directors and consultants of the Company, Dow Jones or their respective Affiliates shall be deemed not to be independent. Any Member shall promptly report to all of the other Members any change in his or her circumstances which may reasonably be expected to bear on the determination of his or her status as independent (as defined herein).

(A) The authority of each of the Editors will include:

(1) the power to hire and remove subordinates (including any material changes in the terms and conditions of employment of any such subordinate that could give rise to constructive termination, such as a material reduction in compensation, relocation of principal place of employment, material change in duties, responsibilities or position and the like) within their respective publications and operations, in each case consistent with departmental budgets set by the Company or Dow Jones management following discussion with the relevant Editor; the decisions of the Company or Dow Jones on departmental budgets will be final, and

(2) control over spending and allocation of resources within departmental budgets set by the Company or Dow Jones management following discussion with the relevant Editor; the decisions of the Company or Dow Jones on departmental budgets will be final,

(B) in the case of the managing editor of The Wall Street Journal, and, so long as he or she is an Editor, the managing editor of Dow Jones Newswires (or any successor of the foregoing), authority over:

(1) all news decisions with respect to The Wall Street Journal Publications and Dow Jones Newswires Publications, as applicable (including decisions on subjects of news coverage, length, placement and accompanying art or other media), and

(2) use of staff of The Wall Street Journal Publications and Dow Jones Newswires Publications, as applicable, by advertisers or other businesses, publications or services;

(C) the managing editor of The Wall Street Journal shall continue to report to the publisher of The Wall Street Journal,

(D) the managing editor of The Wall Street Journal shall be consulted prior to the use of The Wall Street Journal or Dow Jones brand names by the Company, its Affiliates or any other party to provide the managing editor the opportunity to raise any objections to and suggestions concerning the proposed use of the brand; provided that the decisions of the Company on branding matters will be final.

Yes, it could happen anywhere.

Especially if newspapers are sleeping.

What about watchdog journalism?

What about local coverage?

What about our bridges?

Before they collapse.

See all these front pages from yesterday’s papers.

Yes, they are asking the right questions.

But too late.

We need newspapers that watch for us.

And our newspapers, like the bridge in Minneapolis, collapsed.

The Virginian-Pilot reacted to the news by producing an excellent package that includes a review of the bridges in this area.

This is the inside page with the local bridges that present problems.

(Thanks to Luis Vilches)