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Spring 2009 Table of Contents

Should Universities and Newspapers Get Married?

Three experts talk about a world where colleges offer to pick up the tab

| From Perspectives | By Art Jahnke

Illustration by Terry Allen

The idea emerged at a conference of writers and publishers sponsored last fall by the College of Communication to discuss the uncertain future of journalism. Universities, with their considerable, if shrinking, endowments, and their dedication to sharing information and knowledge, might make worthy spouses for newspapers, enterprises whose business model has recently been run over by a truck. Universities, after all, have been supporting public radio for decades, and the pairing seems to work for both parties. And something has to be done. Writing recently in the New York Times, Yale chief investment officer David Swensen and financial analyst Michael Schmidt reported that in the past five years, the Times’ profit margins had dropped 50 percent from where they had lived happily during the previous fifteen. At the Washington Post, the decline was 25 percent. And in cities all over the United States, newspapers that were once money machines are for sale, or worse. The Philadelphia Inquirer recently filed for bankruptcy protection, and so has the Tribune Company, which operates the Chicago Tribune, the Los Angeles Times, and six other daily papers.

Bostonia put the question – what’s good and what’s bad about the idea of newspapers turning to universities for life support? – to three authorities: two former newspaper editors and one of the most respected analysts of the newspaper business.

Lou Ureneck

Lou Ureneck is chair of the BU College of Communication journalism department. He is a former editor of Maine’s Portland Press Herald, page one editor at the Philadelphia Inquirer, and editor-in-residence at Harvard’s Nieman Foundation for Journalism.

Lauren Rich Fine

Lauren Rich Fine is a practitioner in residence at Kent State University’s College of Communication and Information and director of research at ContentNext, which reports on the business of digital media. She is a former managing director at Merrill Lynch and a nationally known authority on the changing business of daily newspapers. Fine was once described by the Toronto Star as “the most powerful media figure you don’t know.”

James E. O'Shea

James E. O’Shea, currently a fellow at Harvard’s Joan Shorenstein Center on the Press, Politics and Public Policy, was famously fired from his job as editor of the Los Angeles Times in January 2008 after refusing to make the newsroom cuts demanded by the publisher. Before moving to the L.A. Times, O’Shea spent twenty-seven years at the Chicago Tribune, where he was managing editor from 2001 to 2006.

What follows here is an edited version of their conversation.

Lauren Rich Fine: As somebody who would really like to see newspapers survive, I want anybody to own them. The attraction of having a university with a serious journalism program own one is that they have people there who are equipped, presumably, to produce a newspaper. It’s not obvious that they have the right capability to run it as a business.

James E. O’Shea: I agree with Lauren. After having run a couple of newspapers, they’re very, very difficult and complex organizations, and I don’t know that there are enough rich people out there to sustain a long-term endowment solution. I think you really need to find an economic model that allows the newspaper industry to stand on its own two feet.

Lou Ureneck: I see what you’re saying, but let me pursue this line of thinking. Universities at some levels see themselves as stewards of culture. They operate museums, they run orchestras, they embrace libraries. So if we think the newspaper is making a cultural contribution that’s important to society, then perhaps universities have some stake in this. And there is the model of the radio station. For example, here in Boston we have an outstanding radio station, WBUR, which is a part of Boston University. It’s an important part of the National Public Radio network, and I wonder if an effort like BUR represents some sort of model.

Fine: If you could get some type of support like NPR does, or other types of supportive people who really care about what journalism really stands for, it’s a beginning, but still isn’t really the solution. It’s a real challenge. I think most newspapers still have too much in the way of costs in terms of how they produce the paper each day. And Jim, I say this very respectfully, but there are probably too many editors and too much concern about quality control. I’m aware of all the mistakes that get made if it’s not done properly, but in the age of the Internet, there’s more opportunity to self-correct quickly.

O'Shea: I would like to respond to that. Everybody dislikes editors and everybody needs them. That’s been proven again and again over the years.

Fine: One, just one.

O'Shea: That’s not necessarily so. You can take a look at how the Internet covered this plane crash into the Hudson River. A huge number of people were required to cover that. What’s wrong with people paying the cost of collecting and gathering and editing and putting together the news? Not just in the paper, but online. And frankly, if you get rid of a lot of the costs that newspapers have, in terms of the production and planning and delivery and ink and paper, it would be quite economical to deliver the news. I don’t even think it costs that much to produce a newspaper these days. If you had to pay for a newspaper and you charged people $1.50 to $2 a day for a newspaper, the way I look at things, you can make it in a city and you don’t really need to go and slash the staff and cut editing and cut the reporters, because what you really need is people out there covering and editing the news. That’s what makes it valuable.

Ureneck: I want to go back to the economics of newspapers. Lauren, you’ve been following newspapers for a very, very long time. Presumably, if universities were stewards of newspapers, they’d be nonprofit institutions and we wouldn’t want to see them lose money, but if they could just break even, that would be good enough.

Fine: I don’t really think so. A lot of private companies out there are owned by wealthy families who have made it clear, I think, that they’re less concerned with making a profit than they are with sustaining the enterprise. The real challenge is they are having trouble sustaining positive margins, and they have all the benefit of talented management. Jim, you know this — it’s a really challenging business right now. I actually take a point with something you said much earlier. Advertisers should support newspapers. They are still delivering fantastic demographics. Despite the media’s obsession with self-reporting its own demise, newspapers still deliver tremendously educated eyeballs. Here’s the challenge — newspapers became almost exclusively supported by classified advertising, which migrates to the cheapest medium, which in this case is the Internet.

O'Shea: I disagree entirely. Newspapers are not profitable because they’ve chosen to charge too little for their paper. They also got into a lot of trouble borrowing money to buy back stock, and they took on so much debt. If you take a paper like the Los Angeles Times or the Chicago Tribune, they are making a positive cash flow; they’re not in that much trouble. The trouble is they’re not charging enough, and the Internet for all of its glory isn’t producing an economic amount that can support the cost.

Ureneck: So is there some way for them to capture subscription revenue on the Internet?

O'Shea: The genie is out of the bottle. And that audience is so vast; it’s not localized so it doesn’t have as much value to an advertiser.

Ureneck: How about for the reader, you know, high-quality branded information? Don’t you think that there’s some willingness out there to pay for that?

O'Shea: I hear that all the time, but I’ve never seen anybody be able to pull it off yet. I think there is a market for it, but you may have a smaller, more elite readership.

Ureneck: Lauren, do you see any future for a subscription component as a serious revenue stream on the Internet?

Fine: Absolutely not, and I don’t think newspapers made a mistake. I think once you created this incredible thing called the Internet that allowed everybody to have a voice, the value of the edited paper was devalued because people felt that there were other ways to get information — in some cases the wrong way. I’m not saying that’s good, but I think it’s irreversible.

Ureneck: Well, if the advertising model isn’t working, and you’re saying that the subscription model isn’t going to work, so where does that leave us?

O'Shea: I really think that there is a model that can work, but it’s a hybrid. You have much more diverse reporting on the foreign news. Somebody sifts through all this stuff and produces a coherent report. Maybe it isn’t every day, maybe it’s three times a week. It’s more analytical; it gives more knowledge and wisdom and it just has the news online and keeps it linking and reports it as fast as you can. If you put those two together in a package and you sell that package rather than the newspaper alone versus the Internet, I think you may be able to come up with something.

Fine: I would take that one step further. While it hasn’t tested well yet, I still believe that people will want that edited product. I actively want an edited product, and I don’t care if they’re getting me news from other online sources, other print sources, or from my local community. If you could get rid of production and distribution a few days of the week and still deliver that edited product, or maybe I can print it out at home on my computer, I think the advertising would support that.

But to your point about a university-owned product, their ability to get feet on the street and do the marketing differently, to engage the community in some way that I think has been lost through the years, I think that’s where the university model becomes more interesting. You start to get this passionate group of people to get out and reenergize the community and change the way that you deliver the paper in some manner. I’m still a modest optimist in all of this. More people are interested in news today than ever — that’s the good news.

O'Shea: I think we focus too much on how we deliver. I think we ought to focus on how we produce the information, and we’re going to give it to you any way you want it. So if you want the printed paper, we’ll give you the printed paper. If you want it every day, we’ll give it to you every day. And you’re going to have to pay maybe $1.50 instead of 75 cents and $5 on Sundays instead of $1.50. And if you want it online, maybe you’ll buy it just like you buy music on iTunes. Maybe you could put that all together in a package and say, here’s what we’re going to do for you and you figure out how much want to pay for it

Ureneck: Lauren, you made the point that more people than ever are interested in news. Is it at all helpful to think of the problem this way: we don’t really face a journalism problem so much as we face a business model problem.

Fine: I think it’s really more of a business model issue than a journalism issue, but there is maybe less trust today of traditional journalism. It’s really a question of how you support the industry. And changing the ownership to one where you don’t need to make money is absolutely a step in the right direction, but it isn’t the solution. If you were starting a newspaper today, how would you do it? If you want to do it the way it had been done, you probably wouldn’t produce every section you’re producing. You wouldn’t produce it every day of the week. You probably, in this world where we can all get instantaneous types of news online, would carve out what makes you different. And it’s not just local news in a community; it’s your community position in a global world. If you can start getting people to cover those things that free up my local resources in Cleveland, to take all of that and make it relevant to me, that’s going to be a good product. You will need to rethink the whole thing.

Ureneck: You know, the other appealing part of university ownership, or sponsorship, is that the university has a lot of resources that could be brought to bear on the problem itself. We have a management school, for example, here at BU. We have a journalism program, we have a communications program, and perhaps there are opportunities to do research and innovation in a university setting that might not happen in some other setting. But Jim, I’m interested in your views separating out the problem of business model versus changing the journalism. Do you want to see this as principally a problem of business model and it’s not the journalism that’s the issue?

O'Shea: Yes, I do think that it is primarily a business side issue. There are changes that need to be made in the way journalists operate. And I don’t think that people appreciate the complexity of running a newspaper. It’s one thing to say, OK, we’ll just get a bunch of college professors to write for us. But I’ve got to tell you something — I used to edit sections where college professors wrote for us, and it was a lot of work. They want to go on and on, and you say, it’s not like a book. If you write something here, you’ve got twenty inches to make your point. And they get mad and say they’re not going to do it. So there are a lot of issues here that come along with university ownership.

The other thing that does trouble me is this lack of diversity. We’re getting down to the point where it’s not every paper that has a foreign bureau, and you aren’t getting diverse points of view. And suddenly one of the big issues with the war was that we didn’t report that there were no weapons of mass destruction. I think that’s a little bit of an exaggeration to be honest with you, but the diverse point of view is what got that weapons of mass destruction story out there. It wasn’t just one person that the government or whoever else wants to leverage to try to squash the story; you know it makes it much easier when there is one. And the other thing I’m worried about is with the economic problems that are happening in the industry, that the government and other institutions begin saying, ‘O.K. we’ll provide the public with the information they need.’ And you’re seeing that happen already in city halls and then around the country, where you have the government trying to produce something that they’re trying to pass off as news. And it’s not edited, and it’s not independently reported, and in fact, if you’re scanning the Internet, it’s pretty hard to figure out, if you type in the subject you want to know about, and you get some site that looks like it’s news and you have to really dig into it to find out oh, this is being put out by the mayor so that’s why it says he’s such a great guy. So I think there are some real problems with that.

Ureneck: You know those of us who are close to this business see a calamity ahead, the public getting less news and less trustworthy news and information in the future. What’s your sense of the public’s awareness of this potential problem? Do you think the public will wake up one day and miss what’s been lost?

O'Shea: I think there’s a growing awareness that there’s trouble on the horizon. I don’t see anybody saying, ‘Oh my God’ yet. I think right now most people seem to say ‘Oh, they’ll probably figure their way out of it.’

Fine: I don’t think consumers are that stupid; I think they figure this stuff out. And I think what’s interesting today is how many people who do look at news look at more than one site for their news. And there’s so much news written about when news stories are wrong that I guess I look at the whole Wiki model and think the Internet’s pretty amazing. We don’t always get it right the first time, but the news does still get out there. And so I’m actually very optimistic that the news will still be out there.

I want to say one other thing to your earlier point. Universities do have all the right resources. I’ve only been on a university campus for a year now, and I know it’s not an unusual one. It is really difficult to get things done in an academic environment where everyone has their own daily routine, and trying to pull this off in a university setting would be incredibly challenging unless you had a separate management to do it. We all agree it’s a tough thing to do, but academia is not known for moving things quickly.

Ureneck: Right, absolutely. I will note that here at Boston University we’ve recently set up something called the New England Center for Investigative Reporting at Boston University. We have a group, a core group of professionals, faculty and otherwise, who are working with students to do real investigative reporting. And we’re partnering with media organizations, the Boston Globe, WBUR, and others, to get this investigative reporting out there. So, you’re absolutely right, Lauren, it can be difficult to move a university to get things done rapidly. But we’ve been able to make at least this small achievement here at Boston University recently. I want to thank you both for joining in. It’s been very interesting for me to hear your points of view.

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On 19 April 2009 at 5:48 AM, Yaakov Watkins wrote:

I saw this article in my daugher's copy of the Bostonia and was immediately outraged. At the peak of newspapers, the US was consuming 111 lbs. of newsprint per capita every year. It takes roughly 2 lbs of wood to make 1 lb. of paper. That means that a 35 foot tall pine tree, 22 inches in circumference (or the equivalent) was cut for every person in the US just for newsprint.

We also have to understand that readership is segregated by social class. The undereducated don't read large newspapers.

The Sunday New York Times, for example, has a circulation of 1,438,585 and an average weight of 4.2 lbs. It takes 80 acres of trees per Sunday to supply the newsprint. That is about 54,000 trees per Sunday. Or about twice the number of trees in Central Park.

Those who access more information should take responsibility for the environmental cost of information.

The carbon footprint is enormous. We must consider not just the energy costs involved, but the loss of oxygen producing trees. The EPA just announced that it was going to regulate carbon dioxide. Maybe it should start with newspapers.

Now information can be provided electronically without wasting trees. I thought that BU would be in the forefront of environmental action, not at the rear.

On 9 April 2009 at 2:16 AM, Jason Pryde (SMG'92) wrote:

Fine:"I'm aware of all the mistakes that get made if it's not done properly, but in the age of the Internet, there's more opportunity to self-correct quickly." The same efficiency that provides instant self-correction, that allows very fast distribution of, duplication of, and action on, mis-information. So, while a newspaper error can be retracted from on the next 100K copies distributed in a region, the internet version is everywhere and instantaneios. It's kind of like making tactical errors with nuclear bombs.

"If you could get rid of production and distribution a few days of the week and still deliver that edited product, or maybe I can print it out at home on my computer" (...priner?)

I don't think the green movement would appreciate that last remark if I understand it correctly. But the principle of this idea and similar remarks about pricing is right on target I think. The population of news readers (everybody I hope) can be delineated intotwo groupos: tree-killers, I mean printed version readers and online readers. The printed version readers choose a more expensive product and should pay for the perceived value. Printed newspapers are a luxury brand.

"Journalism" on the otherhand is more than a public service or entertainment media, it is the lifeblood of democracy, no, civilization. The availability of ideas and reported facts is as necessary as air, food and water to sustaining human life.

Incredibly interesting discussion. Thanks, Jason

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