The article and the graphic are a grim reminder of what is happening. It’s a reminder why so many folks, including all of us at the Center for Sustainable Journalism, are trying to find new models.

Here is the graphic’s introduction:

Heavy debt has dragged several newspaper companies into bankruptcy. The industry’s dwindling revenues have forced some money-losing papers to close, and papers that are for sale are having trouble finding buyers. Experts say that before long, a major American city could be left without a daily paper.

Here is the key paragraph from the related story:

“In 2009 and 2010, all the two-newspaper markets will become one-newspaper markets, and you will start to see one-newspaper markets become no-newspaper markets,” said Mike Simonton, a senior director at Fitch Ratings, who analyzes the industry.

Here is a quote from Joel Kramer:

“It would be a terrible thing for any city for the dominant paper to go under, because that’s who does the bulk of the serious reporting,” said Joel Kramer, former editor and publisher of The Star Tribune and now the editor and chief executive of MinnPost .com, an online news organization in Minneapolis.

“Places like us would spring up,” he said, “but they wouldn’t be nearly as big. We can tweak the papers and compete with them, but we can’t replace them.”

Joel Kramer, MinnPost founder, writes:

MinnPost is a national leader in building a new economic model for high-quality local journalism on the Internet. This is not easy to do. Our traffic is growing dramatically — we’ve tripled our page views in one year — but revenues from sponsors, advertisers, and our nearly 1,300 members currently cover only about 60% of our very lean spending.

One of the ideas floating around for financing journalism is “community-funding” — getting lots of people to donate small amounts to support a writer, a beat, or a specific story project they are interested in.

So we’ve decided to try this concept out with BrauBlog, since it’s our most popular feature on MinnPost, other than the home page itself. This is an experiment. If it works, we’ll brag about it all over the country, and pay some of our bills, too.

Kramer adds:

What you will NOT get is public recognition…because David Brauer does not want to know which individuals are supporting him.

The Harnisch Foundation also underwrites the Center for Sustainable Journalism here at Kennesaw State University. Here is what Ruth Ann Harnisch says about the matching grant to MinnPost:

I don’t read MinnPost.com — it’s local news, and I’m not a local.

But what happens to MinnPost.com is going to affect the future of local journalism everywhere.

People all over the world are looking at your community and wondering if MinnPost.com is going to succeed….

It’s your community, not mine — but I’m investing in your community’s bold experiment in journalism because it’s a beacon of hope on a bleak business landscape. If you succeed, others will follow. Who will pay for the news? I’ll pay for some. Will you?

MIAMI – Four online community news sites will expand their local reporting staffs and bring their communities more content, with a combined $390,000 investment from the John S. and James L. Knight Foundation.

The grants aim to help the non-profit sites draw a larger audience by providing more local news, a key to their long-term viability.

The grant recipients are:

• MinnPost, which provides news and analysis, including video and audio, from experienced journalists primarily in the Minneapolis-St. Paul area.
• voiceofsandiego.org, the only professionally-staffed, nonprofit online news site in California.
• Chi-town Daily News, which uses citizen journalists and staff reporters to cover Chicago’s 75 neighborhoods.
• St. Louis Beacon, which emphasizes local news on its site founded by veteran journalists, and partners with its local public TV station.

It reminds me of MinnPost.com, the now almost one-year old online journalism experiment run by Joel Kramer. He believes high quality journalism is enough.  I am a high quality journalism advocate, but just putting news stories up without any interactivity, without any pizazz to pump up the best of the stories, is not going to be enough.  Also I don’t think just throwing an electronic newspaper on the online doorstop will sell.

For success mix print, video, audio, interactivity and community building. The Christian Science Monitor has a chance to build that community because it has a worthy brand and Kramer might build one too because he has connections, but just throwing that electronic newspapers on the online doorstep is not enough.

OJR has a good interview with Kramer today. All those who think hyperlocal is the Holy Grail had best read this from Kramer:

Before we started I thought we’d do everything local. My reasoning for that is that when you’re on the Web, you’re just one click away from national sites that have a lot of resources so why duplicate? But even before we started we did some focus groups with interested readers, and in those focus groups people said to us, ‘If you want a site that we’re going to identify with, as being the site for Minnesotans to come to who are serious about news, don’t make it provincial. We have broad interests.’ So even before we launched we heard quite a bit of that. So even before the launch we decided to do some national work. I can tell you after 11 months of watching what people read, we’ve learned that in fact, doing those national stories increases traffic because of the way the Web works.

We’ve had some very good, solid local stories that have gotten 5,000 readers or more. But others not so much. Our goal is to do serious, high-quality journalism for people who care about Minnesota. That’s our public purpose. But we’re dealing in a medium where you often get traffic from strange things.

I did not intend to say that the MinnPost business model is grim. I believe that the for-profit model for high quality regional journalism is grim. That’s why MinnPost has adopted a not-for-profit model — about which I am very optimistic.  

Update: June 5, 2008: I did a separate blog on this, after talking with Joel Kramer:

Yesterday I blogged that Joel Kramer, MinnPost publisher, spoke in a broad sense about the grim outlook for news business models. He said that’s not what he meant — if that’s how it was interpreted. Here is the message he wants conveyed:

I did not intend to say that the MinnPost business model is grim. I believe that the for-profit model for high quality regional journalism is grim. That’s why MinnPost has adopted a not-for-profit model — about which I am very optimistic.  

 Representative Journalism Network Trial Project Team

Leonard Witt, Project Director — also the Robert D. Fowler Distinguished Chair in Communication at Kennesaw State University, outside of Atlanta

Chris Peck, Editorial Director — also Editor of the Memphis Commercial Appeal

Bill Densmore, Administrative Director — also Executive Director of the Media Giraffe Project, University of Massachusetts, Amherst

Representative Journalism Network National Advisory Board
Updated: April 14, 2008

Bill Buzenberg, Executive Director, Center for Public Integrity
David Cohn, Editor at Off the Bus, BeatBloggers, NewAssignment.net
Oscar Corral, Reporter, Miami Herald
Ken Doctor, Digital Media Consultant, Content Bridges
David Eckoff, Media Consultant, formerly Turner Broadcasting VP
Amy Gahan, Content Strategist, Poytner & J-Lab
Mark Glaser, Host & Editor, MediaShift
Joel Kramer, Publisher, MinnPost.com, former editor/publisher Minneapolis Star Tribune
Dori J. Maynard, President and CEO, Maynard Institute
Ken Sands, Innovation Editor, Congressional Quarterly
Jan Schaffer, Executive Director, J-Lab
Venise Wagner, Chair and Associate Professor, San Francisco State University Journalism Department
Lisa Williams, Founder, Placebloggers

Representative Journalism Network Financial Support

A generous grant from the Harnisch Family Foundation with the inspirational and intellectual support from its president Ruth Ann Harnisch has helped advance the Representative Journalism concept and made the Northfield, Minnesota trial project possible.

An Update 4-02-08:

Representative Journalism Network Researcher

Rachel Davis Mersey, assistant professor in the School of Journalism and Mass Communication  at the University of Minnesota, is overseeing the assessment and evaluation of our Locally Grown, Northfield project.

Locally Grown Trial Project

The Locally Grown blog and podcast in Northfield is overseen by its triumvirate: Griff Wigley, Ross Currier and Tracy Davis.

 Story 1: McClatchy Co., one of the nation’s biggest newspaper companies, reported sharply lower profit and revenue for its third quarter Tuesday and said it would take an accounting charge to reflect the poor conditions in the newspaper business and its falling share price.

Story 2: MinnPost.com (and a paper version known as MinnPost in Print) will launch November 8, it was announced today by Joel Kramer, CEO and Editor of the not-for-profit startup.

Kramer also said that in addition to the $1.1 million of previously announced major gifts, MinnPost has now raised more than $107,000 from 220 member-donors. This surpasses MinnPost’s projection of $75,000 for all of 2007, Kramer said. The smallest of these donations is $10. The largest is $36,000 — received recently from the Martin and Brown Foundation, a local family foundation.

“MinnPost will be about great journalists doing great journalism,” Kramer said. Six editors will oversee contributions from more than four dozen journalists, including two Pulitzer Prizewinners.

Story 3: As the Inter American Press Association, which focuses on freedom of the press in South and Central America, holds its general assembly in Miami, the Sun-Sentinel takes the moment to … say to hell with national and international news.

Story 4: The third wave in American journalism—that of the foundation press—may be taking form now thanks to Bay Area billionaires Herbert and Marion Sandler. Waving $10 million that they promise to replenish annually, the Sandlers have founded the nonprofit ProPublica to produce investigative journalism. (Usual suspect the John D. and Catherine T. MacArthur Foundation is also chipping in some money to the ProPublica kitty, as are the Atlantic Philanthropies and the JEHT Foundation.)

Today’s New York Times reports that ProPublica will soon hire 24 reporters and editors to create one of investigative journalism’s largest staffs. Based in New York City and led by former Wall Street Journal managing editor Paul Steiger, ProPublica promises to produce quality investigative journalism and give it—not sell it—to media outlets.

Story 5: NEW YORK — E.W. Scripps Co. plans to split into two parts, becoming the second media company in recent weeks to isolate fast-growing assets from the troubled newspaper sector.

The move would create one company with Scripps’ highly profitable cable-television networks and its shopping comparison Web sites, and another with its newspapers and local television stations.

The decision reflects the length companies will go as souring sentiment on the newspaper industry dents stocks prices of companies exposed to the sector. Shares of Scripps, which generates roughly one third of its revenue from
newspapers, have fallen 15% this year.

Story 6: Belo presents details on spinoff of newspapers (This is an interesting story with lots of newspaper and media publishing details as well as how having no debts on the newspaper side, it can be more nimble in making changes.)

Actually there are a few more stories linked at Romenesko that tell of layoffs etc. , but enough for one day.

 Leonard Witt: Hi Joel. Thanks for agreeing to do this. I read somewhere you made up to $8 million when the Star Tribune was sold to McClatchy for $1.2 billion. You have a place in  Montana, you have grandkids, correct? You could be retired leading the good life…why this? Have you lost your mind?

Kramer: My wife says retirement doesn’t suit me. Yet.

I care deeply about the future of serious journalism. This spring, when the Star Tribune announced its second round of buyouts (bringing the total for the year to nearly 75 journalists), a lot of people asked me if there was something I could do about the shrinkage of commitment to serious news. I thought about, explored it, decided there was an opportunity here, and that I was the best person to pursue it.

Witt: Why are you the best person?

Kramer: Because with my background as both editor and publisher of the Star Tribune, and my connections in the community, I could attract the financial support and the journalists to do it, and consequently foundation support to help get it started. I wasn’t sure I could do it, but I felt that this background gave me perhaps the best chance.

Witt: Sounds like you are the right person. One thing troubles me. When I think of the Internet, disruptive technology, I think young, vibrant, innovative, but when I look at the editorial names on your roster I see many long established Twin Cities names. What’s going to prevent the same old, same old traditional ways of doing journalism that is steadily losing market share?
Kramer: Our target audience is news-intensive Minnesotans.That’s perhaps 15 to 20% of the adults in the state. Some of what they want is the “same old,” i.e. hard-hitting, serious journalism that they feel they’re getting less of as the business model of newspapers deteriorates. They also want new things the internet makes possible, but only the new things that are high-quality. Our challenge will be to deliver both. To do that, we need a mix of experienced journalists AND people who understand the new medium’s potential and how people are using it. We intend to have both.
 

Witt: Sounds serious. Where will the fun reads be? What role will Britney Spears, Paris Hilton have in all of this? The garden, travel, celebrity mainstays? Or will serious news be enough?
Kramer: We’ll have fun. Even the New York Times found a way to get one Paris Hilton story on its front page — by focusing on the angle of celebrity justice in Hollywood. Seeing Paris Hilton on the front page of the New York Times is my idea of fun.

Witt: Speaking of the front page, when folks log on to MinnPost what will they see. Something like the New York Times or something very different? 
Kramer: The look will be more like a newsmagazine than a newspaper website. Fewer stories, better displayed. Quality over quantity. We want to create the feel that trusted editors are helping busy people focus on what matters.

Witt: I want to go back a second to your 15 to 20 % news intense adults. Tell us about those demographics. Are they geezers? Urban, rural? Rich, poor? Who are they?
Kramer: All ages, generally well educated, engaged in their communities.  They rely on multiple sources of news, and they care about quality and depth. Perhaps more likely to live in cities and first-ring suburbs, but news-intense people can live anywhere.

Witt: Yeah, they can live anywhere, but the Star Tribune and other large metros have said, “If you live outside the advertising hubs, sorry, no rural news for you.” How do you help the news starved folks in more remote areas?
Kramer: MinnPost is eager to serve people who care about the Twin Cities and Minnesota news, wherever they live. One of the charms of the Internet is that we don’t have to pay extra distribution costs to get another reader in Ely. On the other hand, we won’t provide news coverage that is of interest only in Ely.

Witt: You said you were interested in people “engaged in their communities.” Are you just going to serve them up the news and be done with them, as traditional newspapers do, or are you going to try to form communities, make them a part of the conversation, help them find solutions to common problems?
Kramer: We’d like to form communities and engage people in important conversations, but there is a challenge. In focus groups with people in our target audience, we hear a lot of respect for what professional journalists do, and a certain resistance to being forced to read the “opinions of amateurs.” We need to figure out how to deal with that dilemma. Our priority is quality, not maximum reader participation.

Witt: Interesting, that seems to be going against the news as a conversation mantra.
Kramer: There is no one definition of news. I think it’s a mistake to assume that because newspaper are struggling financially that people have stopped respecting what the good ones do on their good days.

Witt: Yeah, but how do you get the youth, the next generation of readers on board, if you follow the tried and true, but now faltering, path?

Kramer: Among young people, we find there is also a news-intense subset. It may be somewhat smaller than the news-intense subset of older people, but it’s still a significant target audience.  We intend to explore new forms of news, but always respecting the interests of this news-intensive group, whatever their age.

Witt: I would like to talk about the financial model, if we can. $1.1 million used to sound like a lot of money. It sounds like a lot less these days, how long can it sustain a viable operation?
Kramer: Most of the $1.1 million we’ve raised is intended to serve as a reserve, to cover early annual losses. Our annual operating plan will be funded by a combination of sponsorship/advertising revenue, donations from members (the public radio and public TV model) and foundation support. But we’ve told the foundations that by the fourth year — maybe even the third — we’ll be break-even just on the first two revenue categories, not relying on soft money from foundations for our basic operations.

Witt: I know lots of people are wondering how you can pull off a public TV model? How can you?
Kramer: We are confident that a lot of Minnesotans will be willing to pay to support quality journalism. We received three $5,000 annual membership commitments before we even announced our plans.

 Witt: Ah, yes, the good old Minnesota community spirit. Speaking of which, I noticed you and your wife Laurie, Sage and John Cowles, Vicki and David Cox, and Terry Saario and Lee Lynch and the John S. and James L. Knight Foundation all invested money in this nonprofit. Does that mean it’s just a donation, do you all get your money back, how does that work?
Kramer: All tax-deductible donations; we get nothing back. In addition, I am working without pay through at least the end of 2008, as is my wife, who is membership director.

Witt: A true Minnesotan — who happens to also lives in Montana. One final question, what effect will this have on the established papers: the Star Tribune, Pioneer Press, City Pages? Do you care?
Kramer: I want the newspapers to succeed, and I don’t think our little startup will have a major effect on their revenue streams.  But at the same time, I’m watching their business model deteriorate, and I want to make sure the community doesn’t suffer because of their shrinking commitment of resources to quality journalism.

Witt: You mention Laurie as the membership director. Awhile back I mentioned my Representative Journalism idea, where groups of people can fund a reporter who covers issues important to them. Did that resonate at all? I wonder because I am getting ready to write more about that topic in the days to come.

Kramer: I find it intriguing, but others mentioned risks associated with “strings”.  We’ll see. Gotta go to a late dinner, Len. Thanks. 

Update: Ken Doctor has an excellent analysis of MinnPost at Content Bridges.