Newspaper Monopoly That Lost Its Grip

By DAVID CARR, The New York Times

A year after announcing a plan to reorganize The Times-Picayune of New Orleans into a more digitally focused enterprise that produced a newspaper just three days a week — enraging local residents — its owners have added a new innovation: they will go back to producing a printed product every day.

 “We are excited about this opportunity to extend our daily reach in print,” an advertising executive at the newspaper said in the announcement.

You don’t say.

This daily newspaper thing may be catching on. Last week,

The Philadelphia Inquirer announced that it would begin selling a Saturday edition on newsstands after a nearly two-year hiatus.

The much ballyhooed unmaking of daily newspapering seems to be unmaking itself, and there’s a reason for that. Most newspapers have hung onto the ancient practice of embedding prose on a page and throwing it in people’s yards because that’s where the money and the customers are for the time being.

The industry tried chasing clicks for a while to win back fleeing advertisers, decided it was a fool’s errand and is now turning to customers for revenue. But in order to charge people for news, you have to prosecute journalism.

The belief that historic monopolies will hold together just on the basis of inertia has proved to be wrong. Newspapers that have cut their operations beyond usefulness or quit delivering a daily print presence have suffered. The audience has to be earned every day.

Newspaper publishing will never return to the 30 percent plus margins it once had, but some people believe there is a business model. Warren E. Buffett thinks that a 10 percent return is reasonable, now that sale prices have sunk.

Clearly, commanding a market to change on a dime because it suits your business plan does not mean readers will obey. Just ask Advance Publications, owned by the Newhouse family, which is back to where it started in New Orleans with The Times-Picayune.

Except that the name Times-Picayune, which had stood for quality and civic constancy for decades, does not mean the same thing anymore. The vaunted Web site that was to be the lifeblood of the new enterprise remains a creaky mess, and the newsroom has been denuded of remarkably talented people.

Several of those people, including the two former managing editors of the newspapers, have gone to work for The Advocate, the Baton Rouge daily that has introduced a New Orleans edition. With a new, rich owner, it has taken aim at the market The Times-Picayune once owned.

Advance made its decisions up against some very dark trends in the business, but they were made with the dead-eyed arrogance of a monopolist in a much-changed world. Columbia Journalism Review described The Times-Picayune’s strategy of the last year as a “rolling disaster.” 

It’s been a jaw-dropping blunder to watch. Advance misjudged the marketplace — the whole city and state went ballistic when the changes were announced — and failed to execute a modern digital strategy. Now it is in full retreat with new competition.

The company endlessly complicated what had been a simple proposition that has worked since the newspaper’s founding in 1837: deliver a printed bundle of its best efforts every day for a fixed price. The new distribution plan is hard to explain, but I will do my best.

On Wednesdays, Fridays and Sundays, a broadsheet called The Times-Picayune will be available for home delivery and on the newsstands for 75 cents. On Mondays, Tuesdays and Thursdays, a tabloid called TPStreet will be available only on newsstands for 75 cents.

In addition, a special electronic edition of TPStreet will be available to the three-day subscribers of the home-delivered newspaper. On Saturdays, there will be early print editions of the Sunday Times-Picayune with some breaking news and some Sunday content.

There’s more, but you get the idea — or not. It’s an array of products, frequencies and approaches that is difficult to explain, much less market.

The move was clearly defensive, unveiled the day before John Georges, the new owner of The Advocate, announced that it would expand its incursion into New Orleans. Since early fall, The Advocate has been publishing The New Orleans Advocate, with 20,000 subscribers.

Mr. Georges, a successful businessman who had less success running for governor of Louisiana and mayor of New Orleans, held a news conference on May 1 where he was accompanied by the governor, Bobby Jindal, and the mayor of New Orleans,  Mitch Landrieu. It was an indication that the home team had chosen sides and the once-beloved Times-Picayune was on the wrong side of the field.

Last July, Senator David Vitter, a Republican from Louisiana, wrote a brutal letter to Steven Newhouse, the chairman of Advance.

“From a pure business perspective, you’re about to get smoked,” Mr. Vitter wrote. “The Advocate and others are moving in to fill the void you are creating. And TP subscribers, including me, will be eager to cheer them on by trading our subscriptions.” 

 

The Advocate has never had the assets or the reputation that The Times-Picayune built up over the years, but the management of The Times-Picayune managed to create the one thing the paper never had before: actual competition.

“The Web site is still mysteriously frustrating for those who are interested in accessing the information we used to get in The Times-Picayune,” said Jed Horne, a former editor at The Times-Picayune who now works at The Lens, an online investigative news site in New Orleans.

“They promised a Tesla and it performs more like an Edsel,” he said. “Our hope is that we will be treated to an invigorating old-time press war between The Advocate and The Times-Picayune, but of course, it could end up being two dinosaurs fighting over the last mud hole on an overheated planet.”

Jim Amoss, the editor of Nola.com-The Times-Picayune, said he is proud of the various products the paper is producing and believed he had the talent and the support from ownership to compete for attention. He suggested that journalists are far more obsessed over the particulars than the audience is.

“I try to take the approach that readers’ habits are changing all of the time,” he said, “and while I share the gut reaction from journalists whose world has been turned upside down, the appetites for news here is as voracious as it has ever been.”

Still, after the deep personnel losses, Mr. Amoss is increasingly the captain of a ghost ship.

That fact was etched with some degree of finality last week when The Advocate raided The Times-Picayune and hired Gordon Russell, former city editor and investigations reporter; Martha Carr (no relation), a veteran of the city desk; and two city reporters, Claire Galofaro and Andrew Vanacore. Collectively, the departures represented what the Gambit, a local weekly, called a “shock-and-awe hiring.” 

“I hate to see when talent walks out the door,” Mr. Amoss said. “But as I told the people here on the day that happened, I am incredibly proud of the people we have and the job we are doing.” (Nola.com’s excellent coverage of a mass shooting on Sunday that injured about 17 people at a parade in the city demonstrated that the site still plays an important local role.)

Nevertheless, the raid served as a reminder that The Times-Picayune’s former monopoly over talent was a thing of the past. 

That doesn’t mean that The Advocate will have anywhere near the impact on New Orleans that The Times-Picayune once did, or that it will magically defy the laws of contemporary publishing economics. 

But it does suggest that Advance’s belief that it had New Orleans to itself and could do as it wished was deeply mistaken.

 E-mail: carr@nytimes.com

The Newspaper Guild Represented Employees at WPIX Unanimously Ratify New Contract

May 8, 2013
 

The Guild is pleased to announce that it has signed a new three year contract agreement with WPIX management, having been ratified unanimously by the membership on Monday May 6.

Two ratification meetings were held on Monday, May 6th in the 10th floor conference room at 9:30 a.m. and 2:30 p.m. The unanimous vote was taken by a show of hands as per the Guild's long-standing practice.
Major highlights of the agreement include:

$200 signing bonus for all full-time employees and most part-time employees.

Two percent (2%) wage increase for all full-time and part-time employees effective upon the first pay period following ratification, a two percent (2%) wage increase effective January 1, 2014, and a one and a half percent (1.5%) wage increase effective January 1, 2015. 

Guild Unit Chair, Joe Punday and Local Guild Rep, Bob Daraio with the new Guild/WPIX Contract

 Dinner money increases to $15

Minimum wage increase upon being promoted increases to twenty dollars per week ($20) from the current $10.

Severance will be computed at the terminated employee’s highest weekly base salary rather than current base salary in return for signing a separation agreement

Night travel allowance increases from $18 to $20.

Requirement to work a minimum of four hours between 12:01am and 6:59am eliminated. Any hours worked during those hours will earn the 15% Night Differential pay.

Higher Classification: $5.00 increase for each per shift upgrade, except graphic artists, whose current upgrade pay will continue.

Mileage increases to $.42/mile with further increases “as per Company policy”

Military leave includes Reserve and National Guard; Company shall pay the difference between an employee’s military pay and their regular base pay while they are on active service.

Current short term disability (STD) plan will be replaced with Company’s STD policy including conversion of sick pay to STD program. 

Any unused sick leave days remaining at the end of a calendar year may not be carried over to the next year, however, the Company shall convert any unused sick leave days remaining to a disability bank of up to 20 full disability pay days, which will substitute for partial short-term disability pay or long term disability pay should an employee be out on such leave.

Current health plan will be replaced with Company’s medical plan, which will potentially reduce premiums as much as between 1% and 2% of pay, depending on the type of coverage chosen. All supplemental insurance plans will now be available to Guild-represented WPIX employees. 

The company agrees to contribute an amount equal to one percent (1%) of a part time employee’s monthly wages to the Entertainment Industry Flex Plan (“EIFP”) on behalf of all part time employees that worked at least 500 hours in the preceding year.

Minimum wages will now be based on maximum top of weekly scale with exception for News Assistants, whose wages will remain based on applicable minimums.

Newspaper Guild Issues Statement About Tribune, Koch brothers and Objective News

Q

“We call on Tribune to make a pledge that they’ll only sell to a buyer that will protect the objectivity of the news product by making a public commitment to doing so,” say the Newspaper Guild and Communications Workers of America.

The release:

The Newspaper Guild & Communications Workers of America Call on Tribune Company to Protect Newspapers’ Integrity as Sale Proceeds

Recently you’ve seen many petitions asking that the Koch brothers not be allowed to buy the Tribune Company’s newspapers. We understand why the Kochs breed this distrust. They are active political proponents of harsh right-wing positions. We’re also not certain that Tribune will listen to anything but money when the final decision is made.
 

What we do know is that great papers publish credible, trusted journalism online and on the printed page. Whoever comes to own these mastheads needs to understand that protecting newsrooms from ideological taint is no small thing. The future of American journalism depends on the ability to print truth, not opinion.

 

We call on Tribune to make a pledge that they’ll only sell to a buyer that will protect the objectivity of the news product by making a public commitment to doing so. The Newspaper Guild-CWA and the Communications Workers of America seek your support in this goal.

 

The Newspaper Guild Communications Workers of America AFL-CIO, CLC and IFJ			501 Third Street N.W Washington, D.C. 20001-2797

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Interest In Adjustable Pension Plan As Alternative To 401(k)s Grows

There is a new retirement vehicle that limits employer liability while preserving guaranteed monthly pension benefits for employees. See the Adjustable Pension Plan article from Pensions & Investments magazine below.

Richard Hudson of Cheiron designed the plan, and he believes both the IRS and Treasury Department eventually will approve it.

Adjustable pension plan design begins to gain converts Benefits can shrink or grow depending on performance

By Kevin Olsen | April 29, 2013

A new pension plan design that allows employers to drastically reduce their risk while still providing lifetime income to participants is gaining support as an alternative to moving employees into a defined contribution plans.

The adjustable pension plan was conceived by Richard Hudson, principal consulting actuary at Cheiron Inc., New York. Its key difference from a traditional DB plan is that the benefit received each year is adjusted from an original multiplier based on the previous year's investment performance.

The plan design shares the investment risk between employees and employers while providing more retirement income security than a typical defined contribution plan.

Earlier this month, Consumers Union, Yonkers, N.Y., reached a collective bargaining agreement with the Newspaper Guild of New York to create an adjustable pension plan that will replace the standard DB plan for Guild members.

The existing plan had about $42 million in assets as of Dec. 31, 2011, according to the company's most recent Form 5500 filing. That plan will be frozen on May 31, and contributions to the adjustable plan will start June 1.

Consumers Union, publisher of Consumer Reports, is the second single-employer plan to switch to the adjustable plan.

Last November, The New York Times became the first with its $280 million plan for employees who belong to the Newspaper Guild.

The very first adopter of the adjustable plan was the Greater Boston Hospitality Employers Local 26 Trust Funds.

The multiemployer plan adopted the new design on Jan. 1, 2012, moving from a 401(k) to a pension plan to provide more retirement security, according to a document on the union's website. Under its plan, participants will receive either a guaranteed floor benefit or the adjustable benefit tied to investment performance, whichever is greater. (The 401(k) plan, which had $35 million as of June 30 according to its latest 5500 filing, is still open, but there no longer is an employer contribution.)

6% contribution

Under the Consumers Union plan, the employer will contribute a fixed 6% of salaries plus $100,000 each year. The New York Times will contribute about $9.5 million to its plan this year and a similar amount after that based on a formula.

“It will vastly reduce risk and volatility for the company and still provide a lifetime payment and PBGC insurance,” said William O'Meara, president of The Newspaper Guild of New York. “We're hoping that this becomes a national model for others to adopt. There is some upside potential and very little downside for employees” compared with participant risks in a defined contribution plan.

However, both plans still need approval from the Internal Revenue Service - by July 31, 2014, for The New York Times and March 15, 2015, for Consumers Union. If the plans do not receive approval by those dates, the APP will revert to a new DC plan.

An official at the Pension Benefit Guaranty Corp., who declined to be named, said the new adjustable plan sounds like a “great idea.” But the plan won't be covered by the agency unless the IRS says it is a tax-qualified plan. If that designation is granted, it will be treated like any other DB plan, the official said.

An IRS spokesman did not respond to requests for interviews. However, Mr. Hudson said he has met with IRS and Treasury Department officials and did not think it would be a problem receiving approval.

Sources said the plan design makes sense for employers with union pension plans because they have collective bargaining rights, which can often prevent, or slow, a move to DC plans.

Interest from Maine

Still, the state of Maine is considering the APP for employees and teachers participating in the $11.5 billion Maine Public Employees' Retirement System, Augusta. Cheiron is Maine's actuary.

Maine employees are exempt from Social Security and the Legislature created a task force two years ago to design a supplemental plan for new employees who would also receive Social Security for the first time. The result was a hybrid within a hybrid — half adjustable pension plan and half DC plan.

“Maine would become the first state to enter Social Security from a non-Social Security position,” said Sandy Matheson, executive director of Maine PERS.

The task force has drafted legislation to create the new plan and is awaiting a bill sponsor. Ms. Matheson said it is unlikely the proposal will be picked up during the current legislative session.

“The Legislature had very specific criteria for us to work with,” specifically long-term cost exposure of 2% of salaries, and the task force “agreed on the principles we wanted to see in the plan,” Ms. Matheson said. One percent each would go to the DB and DC components, with a 6.2% contribution to Social Security, equaling a total 8.2% employer contribution.

The state contributes 3.67% of payroll to the state employees and teachers plan in addition to unfunded actuarially liability cost, which equals 11.59% and is expected to increase to 13.43% for the next two years.

The task force wanted to provide new hires with benefits as close as possible to the traditional pension plan, Ms. Matheson said.

Cheiron's Mr. Hudson said a plan needs to immunize retiree liabilities, instead of “letting it ride” on a 60% equity/40% fixed-income portfolio that does not take into account how much of a plan's liabilities are tied up with retirees. There should only be risk in the active group, he added.

Risk transfer

When moving to a DC plan from a DB plan, all the risk is transferred to the employee, Mr. Hudson said.

“Plans increase the risk first and then pass it on to employees. So we said we can do that without increasing the risk,” Mr. Hudson said. “If you can't handle the risk you have, how would (participants) be able to take on more risk on their own?”

Under the APP there is a cut in benefits, Mr. Hudson acknowledged, but much less than with a move to a DC plan — and there is guaranteed retirement income.

“It might be a lower benefit than the traditional defined benefit plan, but at least it's secure,” said the person from the PBGC. The official added that the adjustable plan is more cost controlled than a traditional DB plan and not as dependent on big contributions.

What differentiates the adjustable plan from a cash balance plan is that the cash balance plan benefit is determined by a benchmark such as 10-year Treasuries; the adjustable plan's benefit depends on actual investment performance of the plan.

Bruce Cadenhead, chief actuary for U.S. retirement at Mercer LLC in New York, said the adjustable pension plan is similar to the variably annuity plan design that has been around for decades but differs in that the employer still bears investment risk.

“I think it's something we're beginning to see more discussion about,” Mr. Cadenhead said. “I think (this type of plan) is promising because one of the biggest risks is more people becoming retirement ready that will outlive their money, and this design addresses all those concerns.”

The APP has an emphasis on low volatility and uses a lower discount rate. Mr. Hudson said the goal is get down to around a 6% return target with a standard deviation of about 5.5% to 6%.

'Essential principles'

The important part of the APP is that it includes all the “essential principles” for a new pension plan design such as employer contributions, pooled assets that are professionally invested and lifetime income, said Karen Ferguson, director of the Pension Rights Center, Washington. The PRC is in favor of any DB plan designs that address those principles, she added.

“It significantly reduces the risk to employers and employees,” Ms. Ferguson said. “If the plan doesn't do well, then (participants) won't get a better benefit.”

The adjustable plan idea probably is most appealing to unions because it helps to have bargaining power for better pension plans, Ms. Ferguson said. And unlike other alternative plan designs, the adjustable pension plan does not need legislative approval.

“It's so logical and makes so much sense,” Mr. Hudson said. “When people ask why isn't everyone doing this, I just say, "I don't know.'”

This article originally appeared in the April 29, 2013 print issue as, "Adjustable plan design begins to gain converts".

— Contact Kevin Olsen at kolsen@pionline.com | @Olsen_PI

Robert R. Daraio
Local Representative
The Newspaper Guild of New York
1501 Broadway, Suite 708,  NYC 10036
914-774-2646 Cell 212-575-1507 Office
212.730.1531 Fax 914-944-9626 Home
bdaraio@yahoo.com

The Newsonomics of Pulitzers, Paywalls, and Investing in the Newsroom

By Ken Doctor 
http://www.niemanlab.org

Could it be that investing in the newsroom isn’t just good for journalism — that it’s also good for the bottom line?

Noteworthy in the 2013 Pulitzer announcements are the multiple winners. 

The New York Times won four and the Star Tribune two. Having just wrapped up a session on pay walls at the NAA mediaXchange conference in Orlando, one that included discussion of both the Times and the Star Tribune, I wondered about a few connections.

Was it a coincidence that two of most successful all-access digital circulation strategies in the country belonged to the multiple winners? 

What could the relationship be? How could we think about those links between Pulitzers, pay walls, and investing in newsrooms?

The Star Tribune’s two Pulitzers were generated out of a newsroom of 260. That number has stayed fairly steady in the last three years, though it is down from an all-time high of about 400. 

Amid the kind of expense cutting that swept almost the entire industry, in both the recession years and the aftermath, the Star Tribune is one of a relative few that made a point of keeping its reporting staff as whole as possible. It disproportionately made its newsroom cuts in copy handling and middle management in order to do that.

Broadcast Union News added: Brad Schrade, Jeremy Olson and Glenn Howatt won the reporting honors for a series on a spike in infant deaths at poorly regulated day care homes. The stories led to legislative action to strengthen state rules, the Pulitzer committee said. Steve Sack won the prize for editorial cartooning. "We're just thrilled and humbled to win awards for two very different types of journalism," Star Tribune Editor Nancy Barnes said.

So while the cuts at the Star Tribune have been significant, its remaining core is stronger than that of many metro dailies. Its reporting capacity tracks very favorably, for instance, compared to the more than 50 percent cuts endured by some Tribune metros. (In fact, as the Tribune sale is set to proceed — as early as this week, according to sources — the task of re-inflating those torn-apart newsrooms will be an early, serious business challenge for buyers.)

“Newsroom costs as a percent of total for us have risen [since its 2010 bankruptcy],” says publisher Mike Klingensmith, a statement that becomes more intriguing as we look at the overall industry’s trends.

Daily circulation is now at 302,000 and Sunday at 510,000, both up three years in a row.

(With the Star Tribune prize wins, we must now cede the Twin Cities title of “Newspaper of the Twin Pulitzers” to the Star Tribune. The St. Paul Pioneer Press, of which I am an alum, proudly claimed that title after two wins, in 1986 and 1988. At that point, Knight Ridder owned the paper. Our newsroom staff total hit about 235 in the next decade. Today it is less than 120.)

Similarly, The New York Times — winners of that quartet of Pulitzers — has persevered through the toughest take-Carlos-Slim’s-money-and-hope-for-the-best times.

Today, it counts 1,150 newsroom employees. While it has regularly, and sometimes painfully, pruned through the last five years, it says the 1,150 number matches its total of 10 years ago. “There have been cuts, yes, but we have also added to our ranks, particularly in the areas of multimedia producers, videographers, graphics editors, etc.,” says Times spokesperson Eileen Murphy. “That hiring has kept the number relatively stable.”

Broadcast Union News added: David Barstow and Alejandra Xanic von Bertrab of The New York Times won for Investigative Reporting. The Times staff was recognized for Explanatory Reporting, David Barboza won for International Reporting, and John Branch won for Feature Writing.

Times spokeswoman Eileen Murphy said Executive Editor Jill Abramson announced the awards to the staff, saying she and Managing Editor Dean Baquet "view the wonderful bounty of prizes as a real tribute to the newsroom's excellence and dedication." Murphy added, "We are proud to have broken new ground in multimedia storytelling and global investigative journalism."

The Times won’t divulge the percentage of overall expense devoted to its newsroom, but you can figure it’s close to 20 percent. That percentage is closely guarded by many newspaper companies, though I’m not sure why. Maybe too many are embarrassed by how low it may seem to the public.

How many are in the closer-to-20-percent club? We don’t know, but we can surmise they’re a small number of America’s 1,380 daily newspapers, including some family-controlled papers like The Washington Post. I believe that the Star Tribune is also in that neighborhood.

While winning Pulitzers is great, those wins certainly won’t in and of themselves sustain these companies on the edge of profitability and revenue growth. One thing that is sustaining them for now is reader revenue. 

The Times now takes in more reader revenue than ad revenue. The Star Tribune sees 44 percent of its revenue coming from readers, as it plies all-access and digital circulation.

Let’s look then at the newsonomics of Pulitzers, pay-walls, and investing in newsrooms, and think about whether our intuition has any basis in provable fact.

If even 20 percent of expense devoted to newsroom seems like a low number, consider that the industry average is about 12.7 percent for the largest dailies. That’s the average newsroom expense, of total expenses, for papers above 100,000 circulation, according to Inland Press Association, the industry’s acknowledged leader in much benchmarking work.

Interestingly, those with smaller circulations spend a bit more, and we know their business results over the last 10 years — less decline in ad revenue and in circulation — have been better.

We can also see in the data that newspapers overall are spending a smaller percentage of their overall expenses on their newsrooms than they were 10 years ago. (The comparisons are 2011 to 2001; 2012 data will be out soon. The survey annually samples between a few hundred newspapers “across the circulation size spectrum.”) 

Newsroom expense as a percent of total newspaper expenses
Circulation Size	2001	2011
10,000	16.30%	15.54%
25,000	16.91%	14.53%
50,000	15.63%	13.94%
100,000	14.44%	12.70%
250,000	12.75%	12.70%

The downward turn, even as small as it is, is glaring. Given how much less all newspapers spend on printing and newsprint, given circulation declines, one might expect that newsroom expenditures’ share would have risen a bit, as they have in Minneapolis. Instead, they’ve declined.

Simply put, publishers — on average — have cut their newsrooms more deeply than other parts of their operations. They haven’t believed that smart readers will respond positively to better coverage or negatively to cutbacks. (Thirty-one percent of Americans have fled a news outlet that has under-served them, according to Pew.)

For their part, editors and reporters have always wanted to believe their work had value — but they were the last ones to impute financial value, especially since so many over time have flouted their innumeracy.

If the people who are supplying most of your revenue — not yet the case for most dailies, but it likely will be within three to five years — are happy with the product, they’ll keep paying. If they are delighted, they may pay for subscriptions and for new products to be created and sold. If they’re not satisfied, newspaper business fortunes will have squandered their greatest opportunity in a generation.

Beyond the Inland numbers, we have some data on the financial value of newsroom investment.

Since the 1990s, Esther Thorson has been studying the linkage between investment in newsrooms and advertising and circulation results. “Money in, money out,” she calls it, suggesting that considering the newsroom as a simple “cost center” is short-sighted.

With credentials in both psychology and mathematics, she’s now associate dean of graduate studies at the University of Missouri’s School of Journalism. Along with her colleague, marketing professor Murali Mantrala, she has long worked with the Inland data and with individual newspaper companies as well. 

Her conclusion: “Input into the newsroom in dollars had far and away the greatest impact on all sources of revenues — both advertising and circulation.” Citing a case history that Thorson says is more widely indicative: “For every dollar invested in the newsroom, you create 21 cents of direct impact on circulation revenues, plus 56 cents of indirect impact from print ad revenues, plus 32 cents of indirect effect online ad revenue.” Investments in ad sales and circulation sales directly yield less, she says.

Her econometric models may find new life in the all-access circulation age.

Press+ co-founder Steve Brill has made this plain-spoken point: “If you want to sell journalism, you have to do journalism.” It’s colorful — and his company is building data behind it. Press+ is beginning to track the correlation between content volume and sales.

A mid-2012 study, soon to be updated and broadened by Press+, shows a wide variation, depending on news volume: “One newspaper site with an average of 82 stories posted to the site each day had first month subscription sales of approximately $36,000, while a site with similar traffic but only an average of 21 stories had first month sales of less than $400. A third, similarly-trafficked site with an average of 50 stories had first month sales of approximately $3,000. A fourth site, with an average of 55 stories had sales of slightly more than $3,000.  

Over time, the site with 82 daily stories sold 10 times as many subscriptions per month as the site with 50 stories a day and sold 15 times as many subscriptions as the newspaper with 20 stories a day.“

It must be noted that the initial survey only used four papers. But it’s another useful data-point and one to watch as it is expanded. Further, it gets to the major connection everyone in the news industry — whether in newspapers or sites like The Daily Beast, considering a pay-wall — should be talking about: How does content itself best maximize the revenue coming from readers in the pay-wall age?

Further, Brill tells me that the company is beginning to track the linkage between “engagement and actual content quality.”

Is 20 percent the magic number? No, but it sure is a great plateau.

If we look at the fledgling success of the dedicated enterprise/investigative online start-ups — California Watch, ProPublica, Texas Tribune, MinnPost, and The Lens, for instance — we find a different kind of arithmetic. Pro Publica’s Dick Tofel says 85 percent of the site’s cost go to “program,” essentially content creation. Evan Smith reports that 73 percent of his Texas Tribune expenditures go to content creation. For all of the new companies, it’s by far their largest expense.

The surprise national reporting Pulitzer winner, InsideClimate News, pays out 80 percent of its total expense, to its seven full-time staffers.

Of course, these digital-only start-ups have neither the legacy costs — printing, distribution, etc. — of newspapers, nor their billions of dollars in print ad revenue. Their model, though, is instructive.

These newbies paint a picture of the modern news company in 2023. All publishers, as they work toward their mainly digital businesses ten years in the future, will focus on two big expenses: content creation and commerce development, including but not restricted to advertising. 

Many of the other expenses that consume newspaper companies — Big Iron, trucks, massive office buildings — will be memories. (The Mercury News decision to sell its San Jose-iconic offices is indicative.) The big challenge for the legacy news companies, broadcasters included, is how much they can move to that kind of cost structure in the interim.

To be sure, there’s not a straight line between newsroom size and editorial quality; the role of active, challenging newsroom management is key in how to use resources, no matter how large or small.

But it certainly looks like one of the best predictors of it, and not just because of the numbers. It’s taken a real commitment, through the budget traumas of the past decade, to preserve as much newsroom capacity as possible. Those companies that have striven to do that tend to place more value on the editorial quality overall.

Further, newsroom size is a proxy to community commitment, thinks Orange County Register publisher Aaron Kushner. “When you cut newsrooms, when you cut days of the week, these are symptoms that you are not woven into the fabric of the community,” he told the NAA Orlando crowd this week. 

In his on-stage conversation with Ken Auletta and Terry Kroeger of Berkshire Hathaway’s media group, Kushner won a strong round of applause as a trailblazer in the industry.

For Kushner, you can’t create business success — getting readers to pay a dollar a day for all-access — if you’re not meaningfully part of the community.

For all news companies, it’s time to change the tired conversation of editors fighting for every last FTE against a tired-of-hearing-it business side. If we can start to understand how editorial quality and quantity play into the very revival of the newspaper business, we can break new ground.

Which brings us back to content — call it journalism if you like — as a business imperative.

We’ve got big experiments, such as the Orange County Register’s hiring of 108 new newsroom staffers since the new owners hit town last year. We have a number of smaller, less public, ones. 

Some newspapers have held on to more newsroom capacity than others — how will their fledgling pay-wall plans fare? 

What further correlations can we draw now that we increasingly have lots of numbers at our fingertips? 

How do the new ways to present news, like the Pulitzer-winning Times feature Snow Fall, spark or reinforce sales?

Whodathunkit? The age of Big Data may actually support old-fashioned (and newfangled) journalism excellence.