http://www.niemanlab.org/2009/10/look-whos-hiring-journalists-at-ona-2009/

We’re worried about the future of investigative reporting and the AP listed 9 staffers as contributors to the David Letterman affair story. http://news.yahoo.com/s/ap/20091003/ap_en_tv/us_tv_letterman_extortion

As newspapers continue to struggle, traditional news-aggregation sites like AOL and Yahoo are planning to produce more original content. Are they the future of journalism?

Over the past several months, as many of the traditional pillars of journalism have begun to show severe economic strain, there are new signs of a growing future for original content on online platforms.

Early Internet portals like AOL and Yahoo, after years of describing themselves as only aggregators of other sources’ content, have now changed course and begun to build what might be the next generation of journalistic powerhouses. They have aggressively moved into the media space by becoming creators of original content in areas such as politics, finance and the economy, sports, food, travel, and music.

“We intend for AOL to be the largest publisher of high-quality content in the world,” Marty Moe, senior vice president of AOL Media, told Bnet this month. “Furthermore, we are a low-cost producer of high-quality content at scale.” Moe went on to say that AOL enjoyed “structural advantages” over newspapers, magazines, and television networks and was increasingly hiring refugees who have left those places over the past 18 months.

These latest moves come against the backdrop of a deteriorating situation in the traditional media business. The future of journalistic stalwarts like the Boston Globe, San Francisco Chronicle, Philadelphia Inquirer, and even The New York Times and Washington Post, has been threatened by the dramatic increase in free and timely news and information from thousands of Web sites, including these newspapers’ own online editions. With advertising dollars shrinking, people are wondering what news outlets will replace the papers. The moves to original content from the former kings of aggregation is an encouraging sign that some companies may come up with the business model that can support serious journalism.

Yahoo’s new CEO, Carol Bartz, who came from a tech background and is an unlikely advocate of content creation, told the Times this month that she will be investing in original content in entertainment, finance, and news, in much the same way as Yahoo already has in sports. She noted to the Times that there were a lot of available, unemployed journalists out there for the picking.

Sites like Politico, The Huffington Post, and The Daily Beast are all making the same bet: that there is value in original content in addition to aggregation and community, and they are starting to build businesses around that content. In many cases, they are also betting that there is enough Web and mobile readership to support advertising models so they don’t have to charge customers directly.

But invariably, their business models will not be the same. They will vary by the type of audiences they attract, and the unique characteristics of their content. If, for example, stock-market-information sites and sports-betting sites can offer their users actionable information in real time, it’s worth real money to their readers. In fact, they would rather fewer people see that information, to increase their own chances to act on it before others do.

Other very-targeted content sites—even successful ones—are seeing original content as a way to grow their audiences. Take, for example, Creditcards.com, on whose board I used to sit. Previously, virtually all of the site’s audience used to come from people using search engines to find sites that deal with credit cards. The business’ original content has drawn more people to the site, many of whom did not expect to look for a new card until they read an article.

There are two primary reasons some of these Internet aggregators may have a leg up on finding the ultimate business model for original content: 1) They already have experience giving audiences the kind of content they want on the new digital platforms; and, 2) They don’t have to support the legacy businesses, like print or broadcast, which have huge cost structures that are becoming less efficient as their audiences splinter off and require multiple distribution systems to reach.

“Principally, we have none of the legacy costs associated with producing print publications, “ AOL’s Moe told Bnet. “For example, we don’t own printing presses, or fleets of delivery trucks. We don’t have the elaborate editorial structures geared to producing products over a printing press.”

While this is all great news for proponents of original content, it’s a shot across the bow of the existing media companies that continue to cut editorial and other content-creation assets as a way to stem losses. They are now increasingly in danger of losing their one advantage—the brand equity they have built as the “go-to” place for whatever category of content they dominate. These new players could have time to build up their reputations and take the entire business away.

by Larry Kramer
As if the year hasn’t been tough enough for the media, the press’ role in disseminating news took some harsh blows this week.

Consider this lead on a wire story on CBSSports.com on Wednesday:

“MINNEAPOLIS—Minnesota Timberwolves forward Kevin Love says on Twitter that Kevin McHale will not return as coach next season.

“In an update posted early Wednesday, Love tweeted, ‘Today is a sad day…Kevin McHale will NOT be back as head coach this season.’”

Media will no longer be the filter through which all news must pass. That genie is out of the bottle.

These words were not followed by any official confirmation, but by this:

“Upon seeing the posting, a person in the league was told McHale sent a text message to Love indicating he was not coming back. The person requested anonymity because no official announcement has been made.”

So one Tweeter goes on the record to say the coach has been fired, and a worldwide news organization, even after the information is public, is reduced to a secondhand rumor from an unnamed source.

“P.S. I am not a breaking news guy…” Love further tweeted, according to the wire report…which I assume is at least reporting the tweets accurately. “I had no idea no one knew…I’ll tell them I stayed at a holiday inn express last night. Always works…”

This is just the latest incident to highlight the growing role the general public is taking in news dissemination. Raw, unfiltered, and with out any known standards to follow, news on Twitter from nonprofessional journalists can be inaccurate and even dangerous. But even knowing that, the public is quickly gravitating toward interactive social networks and devices like Twitter.

Go back just one day and look at what is happening in Iran. Twitter became the delivery method of choice for news out of Iran. The only action the Obama administration took to try to ensure the free flow of information out of Iran over the last couple of days was to ask the Web programmers who work on Twitter to delay a planned upgrade that would have shut down the system during daylight in Iran.

The White House made no pleas to give our news agencies access or protection to do their job. The State Department knew where people were getting their information—and knew that Twitter was difficult for any government to control.

What does this mean for traditional news organizations?

For one thing, they can’t afford to be lazy or continue to ignore their readers. Form matters as much as substance now. News consumers want news on demand and in formats that work for them. They know a tweet is real time and they like its precision and efficiency. And they like the feeling they are being put right on the scene. They can feel the emotion.

The old image of the City Hall reporter with his feet up on his desk, being handed a press release and turning it into a story without ever having to move, may be a bit unfair, but it doesn’t matter. Media will no longer be the filter through which all news must pass. That genie is out of the bottle.

Basketball player Kevin Love’s tweets are interesting to the public—more interesting than what the fifth, sixth, or seventh beat reporter covering the Timberwolves is giving them. In fact, sometimes more interesting than what the number 1 beat writer is giving them. People don’t need a reporter to give them access to what a person of interest is thinking.

The media needs to finds its place in the new media world. It will be needed. There were already concerns that the Iranian government was sending out disinformation on Twitter in Iran. Just as Twitter becomes an effective medium, it will surely be co-opted by evildoers and hucksters who can take advantage of its lack of filtering. There will be a need to curate the growing tsunami of information.

But the media is learning the hard way that the tsunami can’t be ignored. It is changing the world we know, and we have to find a way to make it better and to be part of it…not cling to our old ways of doing it. And the media needs to improve. In the throes of cutback after cutback, the content being presented is suffering. Newspapers have allowed themselves to become largely irrelevant.

While it is true that news will not be delivered 12 hours later on a printed and delivered piece of paper, it is just as true that boring news, or news that doesn’t advance what a reader already knows, will be just as useless.

Editing and context will be valued, but only to the point where readers/viewers believe it’s helping to advance their absorption of information. Smart opinions and firsthand reports will grow in value.

Our news organizations need to understand these audience changes and become part of the new ecosystem in a way that enhances these living streams of information, not ignores them.

This media business authority explains how companies can “avoid tragedy” by developing alternative revenue streams

By David Hirschman – May 20, 2009

Larry Kramer didn’t intend to be a media entrepreneur: Growing up, all he wanted to be was an investigative reporter and editor, breaking Watergate-like stories from the side of business. But after following this path through Harvard Business School, and into stints as a reporter, editor, managing editor, and editor-in-chief of some of the most highly respected newspapers in the country, he saw an opportunity and he took it. The result was Marketwatch, an online news service that he helmed for 14 years before it was sold to Dow Jones for more than $500 million in 2005. Kramer will be moderating a panel entitled “New Business Models for Media” on Wednesday, June 3, at Mediabistro Circus. Here he talks to mediabistro.com about which models for monetization look the most promising, and how a young journalist might break into the industry in this age of media upheaval.

You’ve been involved in thinking about models of online content monetization for a while. What do you think are the most promising ideas out there, and how do you think publications are going to make money in the future?
I think that what the Web allows — and what we should therefore offer — is alternatives. Look at entertainment TV: you can watch shows on TV and you can look at the ads, or you can go to iTunes and pay for it and watch it with no ads, or you can get it some other way. And so I think we should have every option open to people. I think whether or not people will pay for content (or how many will) depends on a lot of things, including the economy. But the Web is wonderful in that it allows for multiple business models. It has to be about multiple revenue streams — you’ve got to have that to avoid tragedy, and to avoid what’s happening now to companies that are entirely ad-based.

So you think advertising is done as a business model for the time being?
Absolutely not. We’re in a downturn, but advertising will come back. People have to sell things, and companies need to market their products — and they will. There’s no question that there are new ways to do that — and for some advertisers, something like [Google's] AdSense might be the most efficient way to do that no matter what happens. But there still are multiple kinds of advertising that will need homes, and they generally reside around where people are spending all of their time. If you’re trying to sell people something they don’t know they want, then you have to go wherever they are. And people are on the Web… We have a huge open area as to what people are going to watch and how they are going to get that content. So advertising will find a way to be involved in that — it has to. It’s in its infancy now; they don’t know how to measure it.

One of the great things about the Web is that it’s an enormously accountable medium. If we sold a million newspapers, you can’t know how many people saw your ad on page B22 — yet the medium can charge you for the million they were printing. On the Web, you don’t get ad money paid to you unless people go to the page it’s on.

Magazine editors love controlling the look and feel of what you see. That’s a big part of what a magazine is; the way things look and the quality and the size. They all make a difference to you as a consumer. In the Internet world, the consumer controls that — how big a screen he has, what he’s looking at, what he chooses to look at. You have to adapt to that — both as someone who is giving them information, or something for purposes of entertainment, or selling something.

And so the storytelling process is being reinvented; it’s just totally at a new moment. We don’t yet have that generation of digital storytellers who are integrating all forms of media on one platform… The real future is total integration. When someone is telling a story they use video when they should, use text when they should, use pictures when they should, and use interactive graphics when they should. And it’s a single, seamless process. And we don’t even have that down as a medium yet, so how can the advertisers have it down?

The theme of the Mediabistro Circus this year is “Doing More With Less.” Which companies do you think are doing the best at this point in economizing?
For media companies, doing “more with less” means that, in all likelihood, a good number of the revenue streams which supported you are gone. Newspapers and newsgathering were supported by, among other things, classified ads, and that was purely because of the medium. Because the only way to get those ads into every house was to have them delivered there in a newspaper — because a newspaper went to every house. It had nothing to do with the news, but the news operation was supported by it. Now there’s a more efficient way to do it, so there’s the end of that revenue stream.

As a media company, you assume you have less revenue and it has to be made up to some extent. But it also means that you need to figure out how to more efficiently deliver the message that you have to deliver. And on top of that, because the public can now go to any news source, one of your key roles is no longer going to be filtering everything the way it used to be. But the fact is, you still have to filter it, but you are filtering more of a finished product.

In the old days, press releases went to the press, and you didn’t get coverage unless they gave it to you. Today, people issue press releases and they show up in a hundred places, whether any news chooses to pick it up or not. But if you’re the consumer of that press release, you might not know how important that news is — you’re not getting anyone’s advice. So the journalist’s role as the curator of the “long tail” is the new part of what they have to do. It means that instead of ignoring the fact that everything is now available to the public, they’ve got to take advantage of that and help the public figure out which of the 20 blogs out of the 10 million on a subject they care about matter — or are giving you an intelligent offering. Part of the journalist’s role will be to help link you, the reader, to the best and the brightest information. And there you don’t need armies of reporters to necessarily cover everything yourself. The public has said very clearly in some places, “We care about the wisdom of the mob.” We care about what 1,000 people think is the best hotel in Belgrade — not necessarily a paid journalist who’s out there reviewing it, or the marketing efforts of a company that owns it.

As journalists you have to use that information and use everything that’s out there publicly, and organize that for your readers. And, in a lot of ways, that’s different from investigative reporting — which you still have to do by the way. It’s less important for you to write a piece saying, “Here are the best hotels in Belgrade,” and it’s more important — instead of paying $100,000 a year to a great travel editor — to pay some people less who are basically moderators or curators, to take what’s available and use the wisdom of your position to select as opposed to do it again.

If you’re The Boston Globe’s foreign editor, your value may not be anymore in hiring a reporter in every city in the world, but in telling your readers who’s got the best coverage that matters to them and delivering it to them.

But as there are fewer and fewer newspapers producing this kind of content, isn’t there less and less content for news organizations to aggregate?
Yes, there are right now. But here’s how the model changes in my book: Ten years from now, we don’t have TV newsrooms, newspaper newsrooms, radio newsrooms — we just have newsrooms. And the newsrooms are built around what they’re covering, not how they’re delivering it. So you get a Washington newsroom that is covering D.C., and it’s covering the federal government. And instead of it being a newspaper or a TV station or a network or whatever, its job is just to cover Washington, and it has journalists everywhere there. And its job is to distribute content on every platform from there. It could be sports, it could be finance… These could be geographical or whatever. It’s just subject matter coverage… It doesn’t mean that every reporter has to have a camera and do video. It just means that you have to understand what part of that story is best told in video and be able to tell it.

There will ultimately not be one news organization covering each place of topic — there will probably be a couple or more. To make an analogy, it was once this way for wire services. There was AP, UPI, Reuters, Agence France Press — all these alternatives that would give you some coverage of London or Moscow or Washington. This is not to say that The Boston Globe shouldn’t have a reporter in Washington — there is a Massachusetts delegation, and there are issues that are related to Boston there that they should be covering. But why do they have to have a reporter covering the White House? Why not have the equivalent of one or two wire services covering the White House — only instead of wire services, they’re news services and they cover it for everybody.

Because these platforms are merging… why not just do them once? The smartest way to do this is to divide it up not by medium, but by what it is that they’re covering.

As a guy who started out wanting to be a newspaper man during the Watergate period, how do you feel about the fact that the old-style culture of journalism has been lost in these changes?
I think it was lost way before all this happened. Everybody I knew who was a reporter back then wanted to change the world. But the industry got much more “professional” over the last couple decades. That’s not necessarily a bad thing. We’re training good journalists, we’re doing all the right things. But I think that what they’ve lost is a lot of the passion that drove us. There are great journalists now — don’t get me wrong, and it’s fun to find them and see them do their thing, but it was more prevalent then. There were fewer people who really cared that much about how much they made, and that led to a situation where media people really aren’t paid that much — unless they’re really big. There’s a really big chasm between the average reporter and a superstar. The danger of that had already happened. But one of the nice things about the Web is that it’s bringing back a lot of the people who have passion, because they don’t have to get a job at The Washington Post to go and be an investigative reporter.

What would be your advice for someone who is starting out now — say a 23-year-old college grad who is thinking about J-school?
The difference now is that [young journalists] don’t have to go to Grand Forks [North Dakota] for three years to become anchor. They’re going to where they want to live because, like everyone in the world these days, they’re more used to getting things the way they want it.

I don’t think people have to go to strange places or small towns [to get started as journalists]. There’s nothing wrong with it — small towns need coverage too. But the fact of the matter is, if you’re a good statistician, you should go to Washington and work with one of the investigative groups that are using stats to break stories… Or if you love business reporting, work for any of a number of Web sites that cover business. One of the traditional ways in, too, was always through trade publications, and there are more and more of those with the Web. Niche publications are great.

We still don’t have yet a whole generation of storytellers on these new platforms. Platforms are changing so much that nobody’s got a head start on you if you’re a kid. If you have the heart and soul and you’re interested in covering something, you can go to any one of these new media places and in three weeks be as knowledgeable and up to date as everybody there — including what tools are available and how to tell stories — because they changed last week anyway. I think it’s a wonderful time, and it’s a great time to reinvent what we do. But at the core of it — are ethical standards, are issues of fairness.

Do you think that ultimately the big media companies are on the way out?
I think the big media companies right now are in bunker mentality. They’re getting so slammed on revenues, that it’s not about where they are now or where they’ll be in 10 years, it’s about the transition. And taking the transition, particularly if you’re a public company, is brutal right now — because you have to recondition your company (including all of the shareholders) that this is going to be a very different company. It’s not going to be nearly as big.

Everybody has to reset what defines success [for a large media company]. And that’s almost impossible to do.

Name: Larry Kramer
Position: Senior adviser, Polaris Venture Partners
Birthdate: April 24, 1950
Hometown: Hackensack, N.J.
Education: Syracuse University (journalism) undergrad, Harvard Business School
Resume: Reporter and editor in various positions at the San Francisco Examiner and The Washington Post; Editor-in-chief of the Trenton Times; managing editor, Metro, of The Washington Post; editor-in-chief of the San Francisco Examiner; founder of Marketwatch; advisor to CBS Digital and others. Currently writes for The Daily Beast and serves on the boards of seven different companies and institutions, including Discovery Media and The S.I. Newhouse School of Public Communications at Syracuse University.
Marital status: Married
Favorite TV show: House
First section of the Sunday Times: Sports or business, depending on the season.
Last book read: Boom! by Tom Brokaw
Guilty pleasure: Playing golf.

David Hirschman is editor of mediabistro.com’s Daily Media Newsfeed.

[This interview has been edited for length and clarity.]
discussion by DISQUS

Time Warner’s decision last week to spin off AOL marks the end of a spectacularly failed merger. One that actually could have worked.

AOL will likely become its own company again shortly, ending one of world’s most spectacularly failed mergers. It didn’t have to end this way.

Despite how badly things went from the beginning of the AOL-Time Warner merger, it would be wrong to just assume it was a bad idea. In fact, I would argue it was a good idea that was never given a chance.

The promise seemed obvious. One of the world’s foremost content companies was merging with one of the largest distributors of online content. Content meets customers. Sounded perfect.

That is not to say there weren’t problems with the deal. Clearly, it was later learned, AOL had done some very improper things that inflated its revenue. So it wasn’t everything it was supposed to be.

But it was a leading Web portal with millions of users on their platform. The idea that you could put world-class content in front of a huge audience wasn’t a bad one.

But the execution was a disaster from the beginning.

Most of the key people at Time Warner resented AOL and thought of it as a waste of their money and time. Not very many people were involved in doing the deal, so almost no one felt they had a stake in making it work. And no one at the top of the company really tried to persuade the people in charge of their brands that they needed to try to make this deal work. Many feared that the AOL team would try to take over the entire company. So they froze out their new cousins and refused to work with them.

It became widely known in the content world that it would be easier to get a distribution deal with AOL if you were outside of Time Warner than if you were inside. The great brands of Time Warner, CNN, HBO, Fortune, and Sports Illustrated to name a few, put their content almost anywhere else on the Web rather than on AOL.

There is a troubling trend in the media world of companies throwing up their hands after deals and saying “Oops, it just didn’t work. We guessed wrong.” But in fact, the real villain may have been not the idea, but the failure to execute and bring people together. In all mergers, a key issue is trying to blend different cultures. It never happened at AOL-Time Warner.

AOL never behaved like a Time Warner company. At Time Warner, content is king. Editors have as much or more power than publishers. The editorial product was considered the primary asset of these products. At AOL, it was the equivalent of the “circulation” and “marketing” departments that ran the company. There were no strong editors at the top of AOL who worried about making sure they were serving their audience with the right editorial product. During most of AOL’s existence, their audience was forced to stay on the AOL platform by technology, so they just didn’t worry about losing them to the outside Web.

Instead, marketers dominated the business. Sending out billions of CDs to get people online, these marketers were selling connectivity to the Web, not an editorial product. If they connected to the Internet through AOL, it was just assumed that AOL owned them.

How Time Warner could make that kind of mistake is beyond me. Why didn’t they put a great content guru at the top of that division is one of the great mysteries of this deal.

And why no one forced the content brands of Time Warner to work with AOL is another such mystery.

They took their eye off the ball. Without strong editorial leadership, AOL did deals that worked for their business-development group but not necessarily for their users. So when they started to lose their dial-up customers, and when more and more people signed up for high-speed Internet connectivity, AOL could no longer keep them on the site because, well, the site just wasn’t that good. Others were doing much better work on the Internet and AOL’s viewers could reach them as easily as AOL content.

What happened to management at the two companies after the merger? Were they held in any way accountable for blowing billions of dollars of shareholders’ money by failing to execute the deal they made?

Not really. In fact, when they finally do roll AOL out of Time Warner, which appears imminent, they will essentially just say, “Never mind.”

Charging for online content is possible
By Larry Kramer

NEW YORK– There are many who believe you can’t charge for content on the Web. They fear consumers stand firm in their conviction that all online content should be free. Therefore, you simply can’t charge.
Those who believe that are probably wrong. But most media executives are too scared to prove it to them.
Media moguls are afraid to charge for content because they fear winding up with fewer dollars and fewer readers. Right now, newspaper executives take some solace in the fact that even though circulation numbers are plummeting, at least more people are reading their content than ever before — thanks to the Web — even if the bean counters can’t “monetize” it.
Enter media mogul Steve Brill, who started a new company to create a mechanism that would help media companies learn how to charge readers for their online offerings.
Brill created Journalism Online LLC along with fellow mogul Leo Hindery and up-and-coming mogul Gordon Crovitz, who managed The Wall Street Journal’s online pay strategy. The Journal is seen as the industry leader for collecting money from readers for the right to read the paper’s content online.
This isn’t the first time Brill has been down this road. About nine years ago, he created a company called Contentville, designed to collect micropayments from people for Web-based content from many different publishers. I was one of what may have been a handful of people who actually did pay money to Contentville for access to Inside.com, a site about the media.
Too few people wanted to pay for content on the Web to make Contentville work, and it was shuttered after the Sept. 11 terrorist attacks.
Multiple streams
In all my Web efforts, I have always advocated making as much online content as possible free to all users. I believe there ultimately will be enough advertising to support widely read Web content.
But I have also believed in multiple revenue streams to help media companies deal with advertising droughts, like the one we are in now. And for several types of niche content, audiences are used to paying a premium.
I find Brill’s latest effort interesting because there are a couple of aspects of his proposed model that are essentially side effects but are important enough to carry the entire idea.
One of the pet peeves all consumers share concerns the chaos around print subscriptions. We never know when we really need to renew a magazine subscription. From the day a subscription starts, we get blitzed regularly with renewal notices. Eventually, because we never remember when the subscription is up, we put off paying any of them until warned about damage to our credit.
How much would we all love to have someone manage all our subscriptions, allowing us to go to a single page on the Internet that tells us the status of all of our Web, print and maybe even video subscriptions? For the first time, we would actually know what we spend on information, and we could make intelligent decisions about what’s worth keeping.
Media companies could save a fortune and stop sending out their weekly letter. Instead, they would just send account alerts to our new middleman, who would alert us via email or text message, that some action is required on a subscription. For our part, we could decide to have a subscription renewed automatically — or not. We could even change our mind and cancel whenever we wanted.
All this serves the consumer well.
Business could win
The second potential winner in Brill’s plan is business. Business owners all have problems monitoring how much money they spend on information for their employees.

Giving consumers every option the Internet can offer is exactly what we should be doing.

Historically, employees find multiple ways to have their companies pay for their newspaper, magazine or Web subscription. They use expense accounts, company checks, company credit cards — you name it. If Brill’s idea takes hold, companies could manage all their content acquisition through a single place and keep track of how much they spend, as well as possible duplication and waste.
These are nice side effects of having a content clearinghouse.
But to get back to the real point, we have to assume that people want quality content, whether it’s entertainment or informational. We are watching business models develop around entertainment. Apple’s (AAPL)
iTunes is doing big business selling content to people who could watch or listen to that content for free but are willing to pay to watch or listen to it uninterrupted.
There is no reason to believe that consumers of nonfiction material won’t be willing to do the same thing. In the end, those who run digital-media businesses don’t really care who pays for what they do, just that someone does. Giving consumers every option the Internet can offer is exactly what we should be doing.
Test every alternative. Offer every alternative. As with every other business undergoing a reinvention on the Internet, let the customer choose. End of Story
Larry Kramer is the founder and former chief executive of MarketWatch, publisher of this report, and is the former president of CBS Digital. He also was a newspaper reporter and editor for 20 years. He now serves as senior adviser to Polaris Ventures.

The Hearst Corp. announced today that it will be the first major media company to convert a metropolitan daily newspaper into a website, and end it’s run as a printed newspaper.

When Hearst follows through on its promise to shut down the Seattle Post-Intelligencer on Tuesday, it will shift to an online-only news business.

This dramatic shift could be the catalyst behind a new era in the news business. The single most important message sent by this action is that the news business has changed, and it may be possible to better serve an audience digitally than in print, and do it profitably.

Hearst believes it can serve the Seattle audience with an editorial staff of around 20 people on its website, a fraction of the number it employs on the newspaper. Which 20 they pick will have a lot to do with the ultimate success of the online venture. They will need to capture the essence of what make people read the PI, which will be a different mix than say 20 most important employees to the newspaper.

This is what entrepreneurism is all about.

But the fact is, a website can take more advantage of everything else that happens on the web and link to content from outside sources, bloggers and other publicly available sources of information, like movie listings or little league scores. Some things the paper did well can be provided on the web with little or no staff effort through links to outside sources.

The message is that Hearst executives believe they can produce the essence of what they do now—a local news product, with a personality, that offers unique, high quality content—with 20 journalists who both cover news and curate everything else on the internet to give their readers a package that gives them a sense of what is happening in their town.

The implications of this change are huge for the newspaper industry. If Hearst is right, they will prove that an online local news operation can be a good business. Even if they fail at this attempt, we will learn from their efforts. This is what entrepreneurism is all about. What makes this experiment so important is two things: 1)It’s hard to find entrepreneurism at work in traditional companies and 2) We get to find out if a traditional media print news brand is a competitive advantage in building an online news business.

We will learn if the brand equity of a respected news organization will be able to accelerate a change in reading habits among those who haven’t already shifted from print to the web for their news.

There are certain aspects of the Seattle situation that make this move easier than it might be in other cities right now. Because the PI is in a joint operating agreement with the Seattle Times, the other local daily newspaper, Hearst does not have to close down a major printing operation completely, which would be costly. The Seattle Times, which is not owned by Hearst, will continue to publish as a newspaper. In recent years, it has performed all the publishing functions for the PI.

So Hearst has a clear shot at trying this new business. The town will still have a printed newspaper from the Times, but the more than 100,000 people who got the PI each day will be sent to the Internet for their favorite columnists or writers. The newspaper world will be watching to see if the readers follow the writers.

The cost structure of this new business will be a fraction of its print ancestor. There won’t be any of those people who printed or delivered the paper, or who managed the pre-press process.

The revenues will also be a fraction of what they had in print. Internet advertising is not yet a mature business. Major advertisers don’t yet know how to advertise best on the web. While the public has shifted much of it’s time to web consumption, the advertising world has not shifted it’s spending to reach those people nearly as much.

Still, one of the main reasons the time is right to try this experiment is that print revenues are already dropping in a big way, causing many, if not most, metro dailies to be losing money.One high-ranking executive of a major metropolitan daily told me that last week’s revenues were 45% below the same week a year earlier. To make matters worse, he also said that the largest advertiser, a major retailer, now was responsible for between 15 and 20 percent of all revenues at the paper, up from below 5 percent a couple years ago. Based on what is happening in retailing, one can only speculate how worried that makes publishers.

Internet-based content businesses are considerably smaller than their existing print or broadcast ancestors, a fact that has made it difficult for major media companies to transform themselves into digital businesses. No one wants to preside over a strategy that argues that shrinking a company is the best way to survive. In the world of public companies, executives are loathe to suggest that reduced revenues are a good thing, even though the smaller businesses will soon be, or ever are, profitable and the large ones are seeing virtually all of their profits disappear.

The best and the brightest in the media industry will have to be willing to weather the pain of such shift, and still try to transition into businesses that have a future, even if they are smaller businesses today.

The media companies will be watching Seattle and the Hearst Corp. over the next few weeks, as should every journalist.

Larry Kramer is senior adviser at Polaris Venture Partners, a venture-capital firm. He served as the first president of CBS Digital Media. Prior to joining CBS, Kramer was chairman, CEO, and founder of MarketWatch Inc. Kramer spent more than 20 years as a reporter and editor at the San Francisco Examiner, the Washington Post, and the Times of Trenton.

According to sources in The Hearst Corp. the company is will be the first major media company to convert a metropolitan daily newspaper into a website, and end it’s run as a printed newspaper.

When Hearst follows through on its promise to shut down the Seattle Post-Intelligencer sometime over the next few weeks, it will announce that it is shifting to an online-only news business.

This dramatic shift could be the catalyst behind a new era in the news business.  The single most important message sent by this action is that the news business has changed, and it may be possible to better serve an audience digitally than in print, and do it profitably.

Hearst believes it can serve the Seattle audience with an editorial staff of around 20 people on its website, a fraction of the number it employs on the newspaper.  Which 20 they pick will have a lot to do with the ultimate success of the online venture.  They will need to capture the essence of what make people read the PI, which will be a different mix than say 20 most important employees to the newspaper.

But the fact is, a website can take more advantage of everything else that happens on the web and link to content from outside sources, bloggers and other publicly available sources of information, like movie listings or little league scores.  Some things the paper did well can be provided on the web with little or no staff effort through links to outside sources.

The message is that Hearst executives believe they can produce the essence of what they do now – a local news product, with a personality, that offers unique, high quality content – with 20 journalists who both cover news and curate everything else on the internet to give their readers a package that gives them a sense of what is happening in their town.

The implications of this change are huge for the newspaper industry.  If Hearst is right, they will prove that an online local news operation can be a good business.  Even if they fail at this attempt, we will learn from their efforts.  This is what entrepreneurism is all about.  What makes this experiment so important is two things:  1)It’s hard to find entrepreneurism at work in traditional companies and 2) We get to find out if a traditional media print news brand is a competitive advantage in building an online news business.

We will learn if the brand equity of a respected news organization will be able to accelerate a change in reading habits among those who haven’t already shifted from print to the web for their news.

There are certain aspects of the Seattle situation that make this move easier than it might be in other cities right now.  Because the PI is in a joint operating agreement with the Seattle Times, the other local daily newspaper,  Hearst does not have to close down a major printing operation completely, which would be costly.  The Seattle Times, which is not owned by Hearst,  will continue to publish as a newspaper.  In recent years, it has performed all the publishing functions for the PI.

So Hearst has a clear shot at trying this new business.  The town will still have a printed newspaper from the Times, but the more than 100,000 people who got the PI each day will be sent to the Internet for their favorite columnists or writers.  The newspaper world will be watching to see if the readers follow the writers.

The cost structure of this new business will be a fraction of its print ancestor. There won’t be any of those people who printed or delivered the paper, or who managed the pre-press process.

The revenues will also be a fraction of what they had in print.  Internet advertising is not yet a mature business.  Major advertisers don’t yet know how to advertise best on the web.  While the public has shifted much of it’s time to web consumption, the advertising world has not shifted it’s spending to reach those people nearly as much.

Still, one of the main reasons the time is right to try this experiment is that print revenues are already dropping in a big way, causing many, if not most, metro dailies to be losing money.   One high-ranking executive of a major metropolitan daily told me that last week’s revenues were 45% below the same week a year earlier.  To make matters worse, he also said that the largest advertiser, a major retailer, now was responsible for between 15 and 20 percent of all revenues at the paper, up from below 5 percent a couple years ago.  Based on what is happening in retailing, one can only speculate how worried that makes publishers.

Internet-based content businesses are considerably smaller than their existing print or broadcast ancestors, a fact that has made it difficult for major media companies to transform themselves into digital businesses.  No one wants to preside over a strategy that argues that shrinking a company is the best way to survive.  In the world of public companies, executives are loathe to suggest that reduced revenues are a good thing, even though the smaller businesses will soon be, or ever are, profitable and the large ones are seeing virtually all of their profits disappear.

The best and the brightest in the media industry will have to be willing to weather the pain of such shift, and still try to transition into businesses that have a future, even if they are smaller businesses today.

The media companies will be watching Seattle and the Hearst Corp. over the next few weeks, as should every journalist. –Larry Kramer

Today’s collapse of the Rocky Mountain News has prompted the usual hysterics and hand-wringing over the death of print—but people need to get over the notion that quality news only comes on paper.

OK, so now it has begun. The Rocky Mountain News, Denver’s 150-year-old daily newspaper, is shutting its doors tomorrow. I fear this will begin a stampede to the exits for many of the nation’s newspaper companies.

There can be no doubt that bad news continues to pile on in the newspaper industry, with the economic downturn providing the knockout blow to an already-staggering industry. The Philadelphia newspapers and the Journal Register Company both filed for bankruptcy over the past week. According the Associated Press, four owners of 33 newspapers have sought bankruptcy protection over the last 2 ½ months.

In recent years most newspapers weren’t doing that kind of journalism anyway. Rarely did investigative reporting win out over covering the local sports franchises, for example.

The Hearst Corp. announced that it might close its papers in Seattle and San Francisco if it can’t sell them or find other solutions to the millions of dollars they are losing each week. (That’s right, each week!)

In recent days, both Time and the New Republic have printed huge pieces speculating on how to save the newspaper business, joining a chorus of voices calling for help to save investigative and in-depth reporting by saving the newspaper industry.

Enough already! Let’s do something the industry hasn’t done in years: Listen to its customers. Let’s try giving them what they want. And guess what, they want news. And history has shown us that people will pay—one way or the other—for something they want..

A new poll from the respected Pew Research center tells us that for the first time in history more people say they get their national and international news from the Internet than from newspapers.

It’s time for the industry to listen and follow their customers.

Forget the newspaper industry. Let’s launch the News Industry. Say hello to News Inc. Let’s do what every industry does: Identify consumer demand and meet it.The good news is that consumers are just learning all the new ways they can get news and are still figuring out what works best for them. There is still time for those of us in the news industry to work with them and find out at the same time.

Many of us in the new-media world have known this for a long time and have been building outlets that are serving millions of readers. MarketWatch.com, TheStreet.com, Huffington Post, and The Daily Beast, among many others, have built audiences and businesses on this concept, without the benefit of having a traditional media product or news operation as our base. We built these businesses from scratch.

With the head start most media companies have, they should be able to build their digital platform businesses even faster. Some have. More people read the New York Times and the Washington Post online than in print.

What simply must change is this hand-wringing attitude that if newspapers die, so will responsible, in-depth reporting. Enough already. In recent years most newspapers weren’t doing that kind of journalism anyway. Choices were made, and rarely did investigative reporting win out over covering the local sports franchises, for example.

So let’s get this straight. There is a big future for news, journalism, investigative reporting, analysis, in-depth reporting, and terrific storytelling. But we need to do some work to create the business models that will support it.

Let’s stop arguing over whether there is enough advertising to support this, or if there needs to be other ways people pay for content. There are a huge number of alternatives and we just need to do what every business does: Test each possible method. Something will work.

Those models exist—just ask the people at MarketWatch, or Politico (which by the way includes a PRINT newspaper among its products), or TheStreet.com, YahooNews, MSNBC.com, or countless others.

We need to partner with people who know this new medium, technology and consumer habits. We need to launch new businesses with different revenue streams.

We can build these businesses out of the existing news businesses, but they must accelerate their ability to change and behave more entrepreneurially. They must explain what they are doing to their shareholders and their audience. No one said it would be easy, but they could capitalize on their brand value as trusted sources to their audiences.

But they have to change their focus.

The time has come for News Inc.

Let’s build these new news businesses around the content they cover, not the format in which they deliver the news. There should be one or more newsrooms on Wall Street that will cover Wall Street for every possible kind of outlet, including television, newspapers, BlackBerries, cellphones, magazines and the web. It should be obsessed with informing the public about everything going on in their financial center, good and bad.

There should be another newsroom that covers every major city. Another to cover Washington, or parts of it. Maybe one should just cover Capitol Hill, and another should just cover the White House. Maybe one should cover your state house or your city hall.

Or maybe one should cover your whole city, or just your neighborhood.

In some ways, this looks a bit like an old-fashioned wire-service model. One news-gathering force that supplies its output to many different news outlets. That AP reporter in Moscow would write a story that showed up on the front page of many newspapers across America the next day.

These news companies don’t even have to own their own outlets. They could create their news for partners in each media form: newspapers, phone companies, broadcasters. Each will pay for their news.

If we are going to create models to support news operations in the future, this is the way we will have to do it. Let’s rebuild an industry around its audience.

Larry Kramer is senior adviser at Polaris Venture Partners, a venture-capital firm. He served as the first president of CBS Digital Media and previously was chairman, CEO, and founder of MarketWatch.