• On paywalls: “I don’t think paywalls are the answer to anything. If we’re swapping out print dollars for digital dimes, I think paywalls are a stack of pennies. We might use the pennies in transition to get where we’re going.”
• On the future of print: “Newspapers in print are clearly going away. I think you’re an idiot if you think that’s not happening. I don’t think that news organizations are dying but are newspapers going to stop running in print? Yeah. Absolutely.”
• On print vs. digital: “We have $1.3 billion in revenue. And of $1.3 billion, $900 million is advertising and $165 million of the advertising is digital advertising. That $165 [million] is going to have to more than double in three years. To do that, we’re going to have to take some risks on the print side. That’s the one thing that scares the [expletive] out of everybody.”
• On newspapers: “I love newspapers. I’m a newspaperman. My father was a printer. I started off as a copyboy. I love newspapers. But they don’t love me anymore.”

Paton also talked about the bankruptcy of one of Digital First Media’s subsidiaries, the Journal-Register Co., which filed for court protection last year for the second time — driven by what DFM said were massive commitments related to pensions and other costs taken on when the newspaper industry was better off financially. A group of funds managed by Digital First’s financial backer Alden Global eventually bought the company’s assets back. Said Paton:

“The process allowed the company to shed a bunch of legacy obligations it could never afford that it incurred when it was a much bigger company. The Journal Register incurred most of its long-term debt, most of its pension obligations, most of its lease obligations when it was nearly twice the size the company that it is today, which is kind of what’s happening to newspaper companies.”

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• Building a better paywall: strategies for monetizing news content
• NewNet Q1: Content Farms and Niche Networks on the Rise

Key highlights in this report include:

• For publishers, the first step to monetizing something is to be able to measure it. The analytics tools now available make it possible to track the spread of content on social platforms closely.

• Until now there has not been a marketplace where those potential buyers and sellers of content could meet. Nor were there adequate tools to enable verifiable transactions between them. Tools like Cascade and Ricochet are helping put the foundations of such a market in place.

• Both publishers and licensees will need to seize the sort of ad hoc syndication opportunities that arise online and on social media networks. One of the major tasks facing publishers over the next three to five years will be to structure their repositories of content so they can be searched, sorted, customized, repackaged, and accessed in real time via standardized APIs.

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• Frenemy mine: The pros and cons of social partnerships for online media companies
• Social media in Q1: commerce and discovery dominated

Paton, who took over Digital First Media in 2011 and has published a number of manifestos about the need to put the web first — both at DFM and in his previous job at the Journal Register Co., a unit of DFM that recently filed for bankruptcy for the second time in 4 years — starts his announcement by saying he doesn’t like paywalls and thinks most publishers are implementing them incorrectly (Note: We are going to be discussing paywalls and other forms of monetization at our paidContent Live conference on April 17 in New York). As Paton puts it in his post:

“I think they can be a dangerous management distraction to the real job of adapting a legacy business to the realities of an Internet world… you don’t transform from a broken model by tweaking it – you build something else. I think paywalls, meters if you like, are exercises in tweaking not transforming. Most paywalls in the US are simply initiatives in subscription price hikes – bundling digital with print with no clear plan for sustainable growth.”

That said, Paton admits that since he is the CEO of a company that needs to find new sources of revenue, he is experimenting with paywalls, or what he calls “the Subscription Project.” Part of this involves trying to fix the existing paywalls or subscriptions plans at some of the chain’s newspapers — paywalls that Paton inherited when he took the job of CEO (when paidContent’s Staci Kramer interviewed him about what he planned to do with them, he said they would remain until he figured out whether they worked).

Digital First is experimenting with a Google survey

Paton says in his post that the performance of these paywalls at 22 of the company’s newspapers was “abysmal.” After watching them for a year, he says they had brought in just $300,000 in revenues — not enough to make a difference at a company whose annual revenues are close to $1 billion. Paton says this failure is now internally referred to as “Paywall 1.0.” The second version of this effort is coming soon, the Digital First CEO said, after doing some research with paywall operator PressPlus into best practices around charging subscribers for digital content.

Meanwhile, Paton said the company is also experimenting with a different kind of wall around some of its content — namely, a “survey wall” operated in partnership with Google and its consumer survey unit. At all 75 newspapers belonging to DFM’s MediaNews Group unit, a group that includes the Detroit News and the Denver Post, readers will be asked to fill out a short survey after reading a certain amount of content. Google has been promoting this idea as an alternative to traditional paywalls.

According to Paton, the Google survey experiment is beating the paywall experiment in terms of revenue growth, although he adds that both “cause traffic issues.” And he said Digital First Media is planning a future test that will combine digital subscriptions for some of the chain’s print products and mobile apps with Google’s survey wall. In the end, he says:

“It is too soon to say what will work and what won’t. But I think we can say that emotional arguments over what something is worth in a market economy is a near worthless waste of time at the expense of finding real solutions to the problem.”

With Digital First Media now experimenting with paywalls, and the Washington Post — another prominent holdout on the idea — reportedly considering a subscription wall as well, it looks like the only major players who remain steadfastly against the trend are The Guardian in Britain and USA Today, where publisher Larry Kramer has confessed that the paper simply isn’t unique enough to convince people they should pay money for it.

Post and thumbnail images courtesy of Shutterstock users Daniilantiq and Voronin76

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The picture that emerges from Paton’s discussion of the news on his blog, and from reports by Reuters and others, is of a newspaper business that has desperately been trying to bail the boat with digital-first initiatives aimed at boosting online advertising revenue and/or cutting costs, but is still taking on water at a furious pace. According to Paton, the chain emerged from bankruptcy in 2009 with $225 million in debt — down from about $700 million before the filing — and while digital revenue has grown by more than 200 percent since that date, it has not been nearly enough to compensate for the decline in print revenue and the chain’s legacy cost structure. As Paton describes it in his blog post:

“The Company exited the 2009 restructuring with approximately $225 million in debt and with a legacy cost structure, which includes leases, defined benefit pensions and other liabilities that are now unsustainable and threaten the Company’s efforts for a successful digital transformation.”

Legacy costs from a former business model

Despite its attempts to push a digital-first agenda, which includes opening community newsrooms and cutting back on printing plants and other embedded costs, the Journal Register Co. is in the same boat that many other newspapers in the U.S. are: print advertising, which still represents over half the company’s revenue (a ratio that is much higher at some other papers) has fallen by almost 20 percent over the past few years, and circulation revenue has also fallen. And meanwhile, the chain is carrying not just debt but leases for buildings and pension plans that were designed for a much healthier industry: according to Paton, the chain’s projected revenue for 2012 is half what it was in 2005.

As Financial Times columnist John Gapper has noted, one of the obvious legacy costs that many newspapers are struggling with is the burden of carrying pension obligations for the thousands of employees they maintain, many of whom have jobs that are either being phased out or no longer exist — something Rick Edmonds at Poynter says is commonplace throughout the industry.

@jxpatonJournal Er, yes, I might have one or two questions if you'd just stripped my defined benefit pension scheme by declaring bankruptcy

—
John Gapper (@johngapper) September 05, 2012

It may be cruel to think of using bankruptcy to shed those kinds of obligations (Alden Global, the financial entity that is a controlling shareholder of both Journal Register Co. and its parent company Digital First Media, apparently plans to buy back the remaining assets after the bankruptcy is finalized). But is it really that different from the upheaval that other industries have been through over the past few decades? To take just one example, the steel business was disrupted by the arrival of cheap mini-mills — in some ways, the steel equivalent of the Huffington Post or BuzzFeed — and it took years for that to work its way through the system, with an entire generation of workers laid off.

The automotive industry and the airline business have both gone through similar painful transformations, not to mention companies like Kodak and others who have seen their industry disrupted by digital forces. While the upheaval in cars and airlines may not have been caused by the web the way the disruption in newspapers has been, the reality is that all of those businesses were stuck with massive legacy costs as a result of a prior business model that stopped working for a variety of reasons. Moving from print to digital for newspapers isn’t just a matter of shutting down the presses or selling a few buildings — there is much more involved.

Digital first is not a magic wand

Journal Register Co. may be a more extreme version of what is happening elsewhere in the newspaper industry, but it is hardly unusual (other companies that have already gone bankrupt once, like Canada’s national Postmedia chain, are also still struggling). Everyone pays attention to what the New York Times is doing, and how its paywall seems to be generating substantial amounts of revenue — but even that has not come close to making up for the ongoing decline in print revenue, and the high embedded costs of a business that is still based around print. That’s why chains like Advance are shutting down printing altogether, and trying to make the jump to digital sooner rather than later.

Critics are calling foul on Paton’s talk of a digital-first turnaround, and saying the bankruptcy of Journal Register Co. means his vision is questionable — but this is like complaining that a giant steel company hasn’t been able to make its tiny new mini-mill compensate for the billions in traditional revenues it is suddenly missing. And in many ways, the transformation that is required for the newspaper industry is much harder than what the steel or auto markets went through: it’s not just that readers want something different, it’s that advertisers are also fleeing. That’s a double whammy.

So yes, newspapers have to try new things, put digital first — and try at the same time to change the culture within their newsrooms, which is even harder than tangible moves like selling off buildings. And even paywalls might help for some, but they are still ultimately just a line of sandbags against the rising tide. And the reality is that the tide is rising faster, not slower, and the upheaval it is going to cause won’t be measured in months or years, but in decades.

Post and thumbnail images courtesy of Flickr user George Kelly

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There has been a lot of criticism of Newhouse-owned Advance Publications since the media chain announced it was scaling back printing of some newspapers in Louisiana and Alabama, including the Times-Picayune in New Orleans, which will now only be printed three days per week, with a website picking up the slack. Some celebrity fans of the city have written an open letter asking the Newhouse family to either return to printing daily or sell the newspaper to someone who will, but the chain has refused. Are the critics right? In a blog post on the issue, Digital First Media CEO John Paton makes a strong case that the Times-Picayune has to find some way forward in a digital world, as all newspapers do: There is no going back.

Although the changes announced by Advance affect daily newspapers in Alabama and other states, shutting down the daily printing for the Times-Picayune has attracted the lion’s share of attention, in part because of eulogies written by New Orleans fans like David Carr, a media writer for the New York Times (who initially broke the news the paper would no longer be printing daily and would also be laying off staff). Critics say the bond between New Orleans and its printed newspaper is different than it is in other towns and cities, as a result of incidents like the disastrous flood of 2005.

Change is coming, whether newspapers like it or not

Carr and others have tried to make the case that having a daily newspaper in print — rather than just an online operation — makes a crucial difference in how journalism is practiced in New Orleans, and they point to the low penetration of Internet access in the region. But Paton, who recently took the helm of Digital First Media (the parent company of newspaper owner Media News Group) after turning around the bankrupt Journal-Register Co. chain, argues Newhouse had no choice but to make some drastic moves in New Orleans and elsewhere, as print advertising revenue continues to dwindle. As Paton puts it:

An old and distinguished business in New Orleans has seen more than half of its revenue disappear in five years and has decided to change how it conducts business — before it goes out of business . . . The business is not alone in its problems. Everyone they know in the same industry has the same problems. Everyone knows something has to change.

Much of the coverage has focused on the way Advance communicated (or miscommunicated) the news, the departure of some key staffers from the Times-Picayune and other newspapers, and also the fact that the chain’s websites — including NOLA.com, which is expected to pick up coverage from the no-longer-daily paper — are underwhelming in the extreme when it comes to being bastions of local journalism. Some reporters have also been offered online jobs with odd titles such as “buzz reporter,” which hasn’t exactly helped to dispel such concerns.

No one knows what the right solution is

In his defense of the changes, Paton acknowledges the chain communicated poorly, didn’t have its new digital assets in shape before it made the announcements, let some key writers go when it shouldn’t have, and made other mistakes that “chew[ed] up a lot of goodwill.” But despite those failings, Paton — whose own chain has made some dramatic changes at many of its newspapers in an attempt to deal with a decline in ad revenue — says he supports Newhouse and its desire to try something different:

I support them because their industry is my industry and it will not survive without dramatic, difficult and bloody change. And like them I am willing to do what it takes to make our businesses survive.

In a lot of ways, the criticism triggered by Newhouse’s moves is similar to the backlash some other newspapers have faced for using outsourcing services like Journatic, which was attacked recently after using fake bylines on some of the content it provided to papers like the Chicago Tribune. As I argued in both a post on the topic and a segment on WNPR earlier this week, newspapers of all kinds are trying to find whatever means they can to cut costs, since they are facing an almost unprecedented decline in advertising revenue. Some are trying paywalls, some outsourcing: No one is sure of the right answer.

Could Newhouse have done a better job of handling the printing changes at the Times-Picayune and other papers? Almost certainly. And it remains to be seen whether the chain will actually devote the kind of resources to NOLA.com and its other online properties that they require (although it should be noted the Times-Picayune published online only for several days during the floods of 2005 and later won a Pulitzer Prize for its work). But it is no different from any other newspaper owner, all of whom are trying to find a way of salvaging what they can from the wreckage of their former business model. Trying to return to the glory days of old just isn’t an option.

Post and thumbnail images courtesy of Flickr user Zert Sonstige

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After much speculation, News Corp. has confirmed that it is considering a split that would see the media and entertainment conglomerate cleave itself in two, with the newspaper (and book publishing) assets carved out as a separate unit from its TV and movie businesses. Although the company could still decide not to do so, the idea raises an interesting question: Assuming that chairman and CEO Rupert Murdoch is interested in seeing that newspaper-only unit succeed — as opposed to just selling it to someone else or slowly liquidating it — what would he have to do in order to make that happen? (Update: News Corp. officially confirmed the split on Thursday)

When it comes to the digital aspects of its newspaper business — which includes the Wall Street Journal, the New York Post, the Times of London and the Australian, among other prominent names — News Corp. is a creature of contradictions. Many have criticized Murdoch for being too quick to erect “hard” paywalls at newspapers like the Times (as opposed to soft or metered paywalls like the one at the New York Times), since that resulted in a massive loss of readers for the venerable British paper. Murdoch also maintained the paywall at the Wall Street Journal after buying it in 2007, despite initially saying that he planned to remove it.

At the other end of the spectrum, there’s The Daily, a bold experiment aimed at creating a digital-only newspaper designed and produced specifically for the iPad and other tablets. Even if you see the venture as something of a failure — given that it doesn’t seem to have come close to the readership or revenue targets News Corp. envisioned when it was launched — it is still a substantial ($30 million plus) bet on the mobile and digital future of news. It may be an attempt to duplicate the old scarcity model of news, but that’s a much bigger investment than many other traditional media entities have made in the potential future.

Less like The Daily, more like the Pulse deal

Is The Daily something that News Corp. could build on or expand with its other newspaper properties? It no doubt has lessons it could teach the conglomerate’s other papers about what works and what doesn’t in terms of mobile or digital apps, but to some extent the iPad newspaper is a very different animal. For one thing, it still doesn’t even have a website where you can go and browse the content the way you would with the Journal or the Australian — so it is more or less a hermetically sealed tablet product, and it’s not clear yet whether that’s what readers (or enough readers) actually want.

Arguably more interesting as an indicator of future direction are some of the moves the Wall Street Journal has been making. As we’ve noted a number of times, the Journal has been experimenting with a variety of ways of moving what it does into a digital future, including the expansion of its video offerings — which my colleague Jeff Roberts has described in more detail — as well as more recent ventures like the partnership it signed on Tuesday with Pulse, the news-reader/aggregator app for the iPad.

What’s particularly interesting about the Pulse arrangement is how it differs from a similar deal that the New York Times struck with Flipboard, another news-reader/aggregation app. While the NYT is distributing content to existing subscribers through the tablet app and hoping to generate additional revenue from advertising within Flipboard, the Wall Street Journal is actually selling subscriptions to some of its content in a new way: readers can click and get access to just the Water Cooler, the Technology Digest and other sections rather than having to subscribe to the whole newspaper.

Is that how people want to read the news? No one really knows yet, but at least the Journal is experimenting with one possible solution — and you could argue that it is a smart way of taking advantage of the brand value that the newspaper has in the financial sector, where readers are theoretically more likely to want to pay for content. With the Pulse deal, they can subscribe to only the specific content they want (which might attract more casual readers than a blanket subscription to the whole paper) and they also take advantage of the alternative distribution method that Pulse represents. Those are both arguably smart moves.

Let the content flow and monetize it elsewhere

So what does the future hold for a standalone News Corp. newspaper company? Undoubtedly, there would have to be cutbacks and even asset sales, since the newspaper operations will no longer have the financial support provided by the parent’s entertainment assets — and $30-million bets on experiments like The Daily would probably also be a thing of the past, for the same reason. As media analyst Ken Doctor notes in a post on the future of News Corp., Murdoch might even wind up deciding to sell or dispose of everything other than the Journal.

But if News Corp. (or whoever winds up owning the newspaper assets) wants to try and make the transition to a digital future instead of just liquidating its properties, it would do well to continue the kinds of experiments that the Wall Street Journal has been implementing: in other words, let content flow through different channels like the Pulse app or Flipboard and find readers wherever they are, and then monetize that content where it is being consumed instead of pushing people to a website. And think more about how to make use of video — and other alternative content forms — rather than just the traditional news story.

At some point, the Journal and some of Murdoch’s other properties could also try to implement some of the ideas that former Washington Post managing editor and now WSJ managing editor Raju Narisetti has proposed with respect to a “reverse paywall” approach — one that focuses on membership benefits for devoted readers, rather than simply penalizing everyone with a paywall. Whether News Corp. or its successor company have the gumption to try something like that, however, remains to be seen.

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Vox Media CEO and Chairman Jim Bankoff

In order to tell the story of Star Wars, George Lucas had to create a new technology company that was powerful enough to tell that story. The same thing has to happen in digital news publishing.

That’s the conclusion of Jim Bankoff, CEO and Chairman of Vox Media, whose sites The Verge and SB Nation have shaken up the world of tech and sports journalism.

“Story telling digitally is a native art just like broadcasting,” says Bankoff, who argues that publishers must build themselves in response to the shape of the web and its audiences.

In practical terms, this means building content that is tailored to the fractured, passionate communities that make up the web. The audience isn’t “sports fans” or people interested in “health” but rather New York Rangers fans or those suffering from gout. Bankoff also touted his company’s proprietary tech platform that he says allows writers to better tell stories.

Bankoff was speaking at a paidContent 2012 panel with incoming USA Today publisher Larry Kramer and John Paton, a longtime newspaper veteran who is now CEO of Digital First Media.

Kramer and Paton addressed the familiar challenge for newspapers of how to manage legacy structures while trying to keep pace with nimbler digital natives like Vox. Paton described newspapers’ longtime practice of repurposing existing content as a lousy strategy and predicted that papers’ cost-cutting phase would last another five years.

The upshot is that legacy news companies will remain hard-pressed to leverage their biggest advantage — powerful brand equity — fast enough to be part of the new publishing world.

Check out the rest of our coverage of paidContent 2012. Full archived video on livestream (registration required).

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I’m also thinking about the range of interviews on tap, including two I’m doing. As president of Condé Nast, Bob Sauerberg is managing the translation of some of the magazine industry’s most iconic brands to a variety of devices and formats. In some cases, CN has tried to revive a brand by going pure digital, most famously with Gourmet Live. We’ll talk about what Sauerberg has learned, how committed CN is to app distribution, whether magazine consortium Next Issue Media can gain any meaningful traction and more.

Jon Miller is the chief digital officer of News Corp., the home of tablet tabloid pioneer The Daily, as revolutionary in its own way as USA Today was in 1982, and of a lot of digital experiments and acquisitions with mixed results (including MySpace, an acquisition Miller didn’t make but had to unwind after numerous rescue attempts failed). A current fixation for the former AOL CEO: video across properties, including the Wall Street Journal and IGN, not just the traditional sources of Fox networks and studios. And through it all, News Corp. has to protect its traditional billions and cope with the constant image hits in the UK. The same internet that offers so much potential revenue also makes it easy for every ripple to go tidal wave.

Other one-on-ones include:

• betaworks CEO John Borthwick with GigaOM Founder Om Malik
• VC Fred Wilson with Mathew Ingram, who outlined some ideas here
• Pulitzer Prize-winning author Richard Russo will talk with our legal writer Jeff Roberts about the challenges facing authors from copyright to consolidation to pricing
• Pottermore CEO Charlie Redmayne will talk to Laura Hazard Owen about taking a beloved brand digital
• Automattic’s Matt Mullenweg in conversation with Anil Dash about platforms, power and disruption.

And that’s just part of the day. Check out the complete schedule and the full list of confirmed speakers is here.

The remaining ickets are selling fast — so if you want to take full advantage of the opportunities that come with networking from breakfast to closing cocktails, I strongly suggest you register now.

Thanks to our sponsors for their support. If you’re interested in sponsoring paidContent 2012, please contact eventsales@gigaom.com.

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If there was an Uncle Sam-style campaign to recruit media executives into the “digital first” movement, John Paton would probably win the role of poster boy in a landslide. Even before he became the CEO of the giant MediaNews Group chain, Paton was calling on the media industry to give up its attachment to print and embrace the web and digital media — and he reiterated that message in a fire-and-brimstone speech to a journalism group in Toronto, Ontario recently. The bottom line, according to Paton, is that the time for deliberation is over: media entities of all kinds must give up the “information gatekeeper” model, he said, or they will surely perish.

The MediaNews Group chief executive (who got his start in journalism working at a tabloid newspaper based in Toronto) started his talk off with a bang by saying that the newspaper industry and journalism as a whole are more at risk from “crappy newspaper executives” than from any changes that have been wrought by the Internet. Their refusal to try and adapt to the new digital reality, Paton said, is “like aging ingénues… declaring they can still play Juliette. And nobody has the heart to break it to them.” Paton added:

[W]orse still [are] mediocre journalists, wrapping themselves in the flag of long-form journalism, to deride the value of social media as a reporting tool… and then having to watch them use that ignorance to dismiss the phenomenon of participatory journalism. And while these false, zero-sum arguments play themselves out, Rome burns.

Since 2005, Paton reminded his audience, the U.S. newspaper industry has lost “more than 60 percent of its advertising revenue and so many jobs no one can accurately count them,” and new platforms are targeting customers in such precise ways that “we print folks are effectively taking a knife to a gunfight.” Instead of building paywalls around their content and criticizing the rise of social-media tools, the MediaNews CEO said that newspapers should spend more time trying to understand “how professional journalists can come together with the people we used to call the audience.”

Traditional media needs to shed its assumptions, Paton says

Paton also referred to media analyst and journalism professor Clay Shirky’s essay on the future of newspapers from last year, in which Shirky argued that the old-media model these entities are based on is fundamentally flawed in a digital age, and that “there is no general model for newspapers to replace the one the Internet just broke.” So what are media companies to do? Paton says they must rethink some long-held views about what a newspaper is supposed to do, and get rid of many of these assumptions, including:

• “We are the gatekeepers of information.”
• “That we are the agenda setters and that we decide what news is and what is not.”
• “That we keep the Outside world outside and only let in the chosen few – people like us.”

Paton said the uncomfortable fact is that “we have entered a new era where what we know and what we traditionally do has finally found its value in the marketplace and that value is about zero.” And what does a newspaper chain do in that kind of environment? The MediaNews Group CEO says he plans to roll out the same changes he introduced as part of a digital-first model at the Journal-Register Co. chain — including a “community newsroom” that builds engagement with readers, and a focus on using social tools to distribute content in as many different ways as possible.

Sharing equals influence, and influence is what advertisers want

Those efforts, which Paton has said in the past are having a positive effect on the Journal-Register chain’s bottom line, are designed to take advantage of the web instead of trying to hide behind a paywall, the Media News CEO said:

One of the reasons I am so stern on paywalls and other walled gardens is because I firmly believe that in the future content will go to the audience and not the other way around. Smart, original content, tagged with advertising will gain value by being shared through networks. Shared content equals influence. And influence in the new ecosystem equals engagement. And engagement equals value to those advertisers and others trying to reach that engaged audience.

Paton’s criticisms of the traditional newspaper business may be uncomfortable for industry executives to hear, but I think his focus is the right one. Paywalls like the one the New York Times installed last year may produce some extra revenue, but they will not be enough to make a dent in the bottom line of most newspapers as advertising continues to fall — and in that sense, as I’ve argued before, they are more like a wall of sandbags designed to try and stem the rising tide than they are a true digital strategy. The New York Times needs a lot more than just a paywall if it is to remain relevant and survive in a digital world.

The distributed model that Paton describes is much like the approach The Guardian has taken with its “open platform,” which offers its content to developers and services via an open API, and is designed to be able to monetize that content wherever it appears, instead of trying to hide it behind a paywall. Former Washington Post managing editor Raju Narisetti and journalism professor Jeff Jarvis have both talked about a “reverse paywall” that could reward regular readers who engage with a newspaper, instead of penalizing them by charging them money.

The bottom line, Paton says, is that media executives of all kinds have to start learning from and being open to the potential of digital and social media, instead of always seeing it as a threat that needs to be defended against. As the MediaNews CEO put it, telling readers “you’re gonna miss us when we’re gone” isn’t much of a business model.

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What happens to the MediaNews paywalls? It is too early for me to figure the future of Media News Group’s paywall experiment. They have just started and I have to come up to speed on their rationale for launching and criteria for judging success.

Is there a chance you could wind up deciding paywalls — or at least trials of them — make sense in some places while staying away from them at JR? It is possible but clearly I would have to be convinced paywalls are worth management’s time in pursuing and that they are part of a comprehensive strategy to grow audience.

Were you aware of the Bay Area consolidation (from 11 newspapers to two) and do you approve? Will you change it at all? I was not made aware of the Bay Area consolidation prior to that initiative. Again, I have to come up to speed on the rationale before making a comment.

What is the single greatest change MediaNews needs to make to be digital first and how do you go about it? The single biggest challenge at Media News Group – is the same that exists at any newspaper company – culture change. To understand the nature of how news is created and consumed today and what role journalists and newsroom play in the new news ecology.

Using Press +, MediaNews launched metered paywalls — digital subscription required after five free pages a month — at 23 of its papers last month. Unlike the New York Times or some other papers, digital access isn’t bundled with print. Instead, print subs get a discount of $1.99 per month or $19.99 per year for online access, while non-print subscribers who want full access have to pay $5.99 per month or $59.99 per year. Home pages, classifieds, obits and announcements are also free. The Chico Enterprise-Record, York Daily Record and York Dispatch have older online subscription plans in place. Dean Singleton, the CEO at the time, promised in 2009 MNG would avoid a “cookie-cutter approach” in favor of a market-based strategy. Singleton, chairman of the Associated Press, remains chairman of MediaNews.

Despite his feelings about paywalls, it’s not a stretch to see Paton trying a variation that would include bundling to encourage more digital adoption by print subscribers or to look for some other options that may work on a market-by-market basis — particularly if local advertising get hit. It’s also not a stretch to see him shutting it all down.

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