The current state of the print newspaper industry resembles what writer Mark Twain said about the weather: "Everybody talks about the weather, but nobody does anything about it."

The complaints and musings have led to many loose and sweeping statements about print journalism -- much of them incorrect. The online medium is still too young to offer even some modest predictions -- so investors and readers need to approach these forecasts with a critical eye.

With the above as a backdrop, what can one say, definitively, as of May 2009 about the state of print? Well, general-audience, print metropolitan dailies are in serious trouble.

However, the aforementioned does not mean that all print metros will close, nor does it mean that local print dailies will close at the same rate as their more-sophisticated brothers. The internet has flooded the U.S. and world with free, national news and that means if you're a print metro daily that had the above and not a whole lot else, that's not good news for that print product.

However, the above also means that print metros that specialize are likely to perform better than those that don't, and may survive.

For example, one can see (but one can not incontrovertibly state) the outlines of this trend already: a print New York Times (NYT) that specializes in international news and most investigative journalism efforts, a Washington Post (WPO) that specialize political coverage and public policy, a Los Angeles Times, in entertainment and media news. Does the aforementioned mean the print versions will continue to be published 7-days-week? Probably not. In order to radically lower the print publications' costs, for the print metros that survive, you may see some eliminate one day, or two days a week; some may also implement a combined Saturday/Sunday "weekend" edition.

Meanwhile, print local dailies may fare even better, particularly in those communities where local news is not quickly and freely available on the internet. The internet may even boost the print circulation of weekly 'community newspapers' that serve villages, hamlets, and other very small communities. Finding information online about the schools in Athens, Georgia (population: 112,760) may be easy; finding information about the schools in the Village of Bronxville, N.Y. (population: 6,543) is not, and that's where community newspapers come in to play. To be sure, blogs and citizen journalism sites have entered this space, but so far the coverage/quality has been sporadic/inconsistent, so at least initially, it appears there will be a market for print local newspapers.

Can the big dailies charge for online content?

Polaris Ventures Senior Advisor Larry Kramer, founder and former chief executive of marketwatch.com, and former president of CBS Digital, in an op-ed column for marketwatch.com, argues that newspapers and others can succeed at charging for content on the web: the key is letting consumers choose what they believe is worth paying for. The current problem, Kramer argues, concerns media executives who are too scared to test to the model: media moguls are afraid to charge for content because they fear winding up with fewer dollars and fewer readers.

Kramer is convinced that readers will pay for niche, specialized online content, be it informational or entertainment. He argued that Apple's (AAPL) iTunes business model success (specialized content / entertainment) can be replicated by online newspapers (specialized non-fiction content / information), if executives let readers choose what they believe is worth paying for online.

Meanwhile at The New York Times, the mood is increasingly somber. Staffers view the life-support status of subsidiary The Boston Globe, which DailyFinance's Peter Cohan has chronicled, as signaling even more,big cuts up ahead for The Gray Lady, a colleague and editor friend at The Times told DailyFinance. The Times' declining print ad revenue will not be able to support the print side's still-massive overhead, which will lead to implementing one of three (possibly combined) options: 1) further, large cuts to the print staff, 2) a large increase in the print edition's subscription price, or 3) charging for online content.

"Even with charging for specialized Times content online, major print-side cuts will occur," the editor said. "And it's equally hard to believe we could generate Times-level reports on just online ad revenue alone. So it seems charging for online is a logical next stop, but no one right now wants to take that bold step."

Sector Analysis: For the next 2-3 years, in any economic scenario, it looks like print metros will have vastly lower revenues to work with, given the attrition (and fragmentation) of print advertising to the internet. But can newspapers offset some of the print revenue decline by charging for online content? Polaris Ventures Kramer says it is possible, but thus far there are no metro dailies willing to make that first, bold move.

--

Financial Editor Joseph Lazzaro is based in New York.


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