Are Newspaper Web Sites Dead?

By: Steve Outing Editor's note: Steve Outing's next column will appear Wednesday, Oct. 10.

Now that we're headlong into the dot-com downturn and approaching a recession that's hit all media companies hard, how is the online newspaper industry positioned?

Compared to the dot-com startups, newspapers have always been conservative in their approach to spending money on the Internet. With a handful of exceptions, most newspaper publishers went slowly -- devoting small staffs and limited budgets to new media. While the likes of The Washington Post could staff new media with 100-plus employees, the newspaper industry norm was an online staff you could count on one or two hands.

Newspaper publishers were chastised for this frugality, but the newspaper Web sites remain standing, while dot-com competitors have sunk or are left clinging to the life rafts.

To be sure, everyone's is being hit by the post-attack economy, but how badly were online newspapers affected? And are they in steady enough shape to weather the rest of the downturn, and eventually grow to form a profitable industry segment?

For this column, I attempt to find out -- by surveying a variety of newspaper new-media operations on such topics as staff size and overall health. I endeavored to find out how the last year of dot-depression has left them. (And if they are prepared for the increased demands of providing coverage after the terrorist attacks.)

It could be a lot worse

Overall, newspaper sites seem to be holding their own. While I found a few examples of reduced staffing, the majority of sites hadn't slipped much or at all in the last 12 months. Their staffs are working harder, and when employees leave or retire they may not be replaced, but management commitment to the sites remains solid -- despite the media hype that online media is dead.

Typical is the Web site of the The News & Observer (Raleigh, N.C.), a medium-sized McClatchy-owned newspaper. The Web content staff currently has 8.4 FTEs (full-time equivalent employees), plus five more people on the ad/marketing side, which is down one employee from a year ago, according to content manager John J. Jordan III. In the last year, one new-media sales person was lost due to cutbacks, but that was made up for by better integration with the print-side sales staff (moving three ad sales people to the print side to do cross-media sales, and saving the new-media department on FTEs). "That more than made up for the FTE we lost," says Jordan.

While growth in staff would certainly be nicer, Jordan (in a sentiment echoed through most of my interviews) commented that this lean year has forced the new-media staff to become as streamlined as possible, and to figure out how to most efficiently utilize resources.

The last year has not been a time to retrench, and so far McClatchy has obliged by not forcing cuts on the News & Observer's Internet efforts. The argument that the site's managers have effectively used to maintain their level of staffing is: As dot-coms crash and some of our pure-play Internet competitors go out of business, now is the time to step up to the plate and secure the No. 1 positioning for our Internet initiatives.

Jordan cites Raleigh CitySearch, which has dropped down in local Web traffic numbers, behind NewsObserver.com and WRAL.com (the popular Web site of a local TV station). CitySearch, an Internet pure-play and once a high flier in the Internet boom years, is the frequent subject of rumors that it's in trouble. At one point, the local CitySearch site was NewsObserver.com's principal threat. Another national competitor that was based in Raleigh -- the local-business news Web operation dBusiness.com -- has gone out of business. Now is the time to improve the site and "be No. 1" at a time when the competition is not so fierce -- but not by pouring money into the site, but by acting smarter with what they've got.

Moderate cutbacks

Some newspaper sites have suffered moderately in the last year -- large and small. The content staff of ChicagoTribune.com, for instance, is down to eight, from 12 one year earlier. (That's just the staff of the news site, which has a heavy focus on local breaking news, and does not include staff for other Chicago-area Web sites operating under the Tribune Interactive umbrella.)

The ChicagoTribune.com staff declined slowly. As some people left for new jobs or retirement, they were not replaced. The duties of those individuals were given to remaining staff and/or moved to other departments. For instance, the site staff used to do multimedia video processing, but that task was sent to another group within Tribune. Such shifting of workload, handily accomplished within large companies with a wide store of resources, fits under the category of "becoming more efficient" while saving money from the new-media budget.

ChicagoTribune.com editor Ben Estes repeats the mantra of the day: His site has had to learn to better leverage its remaining assets -- and more importantly, to leverage the resources of its print counterpart. The main thing the site has done in the last year, he says, is to concentrate on leveraging the Tribune newsroom. There are fewer online-original articles written, and more stories done in concert with the print newsroom. Print reporters filing stories to the Web site are more important than ever, and a new "traffic cop" was hired to sit in the main newsroom and arrange for stories for the Web as the news day proceeds.

"The big thing is that we've taken a more holistic approach," says Estes. It's no longer thought of as the online staff; the economy has helped push along the trend toward newspaper and online operations working in concert, and less as separate entities. Such print-online integration has long been thought to be a good thing, but execution throughout the news industry hasn't been easy. The sour economy and the ad slump are forcing newsrooms to "get it together."

The situation is similar at NYTimes.com, where there's no longer any "flab" in staffing, reports editor Bernard Gwertzman. The Web site for The New York Times suffered some loss as part of company-wide layoffs last January, but the business and systems departments were affected more so than editorial. Gwertzman oversees an editorial staff numbered in the mid 40s. The biggest challenge, he says, is that there's little redundancy to cover for illness and vacations -- and the site now operates 24/7, which was not the case a year ago.

Improved integration with the newsroom is the most important aspect in dealing with the new schedule, and during the post-terrorist attacks period, the demands on NYTimes.com's existing staff will be great. Gwertzman says that the special online desk in the print newsroom (paid for by the Web site) has been invaluable in the last two weeks, as the site has struggled to get breaking news online as fast as possible. Gwertzman doesn't expect to be able to add online staff in the near future, so online-print newsroom integration -- which he says is improving significantly as print editors get more used to it -- will have to take up the slack.

Some cut back sharply, most don't

While it doesn't seem to be the norm, some small newspaper sites have seen setbacks in staffing. The Web site of The Morning News in Springdale, Arkansas, for instance, has seen the Internet staff drop to two people from five. According to creative services director Jeff Norris, the site lost a Web assistant, the Web editor, and the online sales manager in the last year. The cuts forced the elimination of some "great e-mail bulletins," he says, and made it a struggle to keep some sites that relied on freelancers going.

Far more common is the simple lack of growth. Says Barry Friedman of The Ledger Online, "We were small a year ago; and we're no smaller today." The Lakeland, Fla., newspaper employs four people on its Web staff -- two editorial and two advertising/marketing.

"Even though there's been no change in staffing, I believe our staff is working harder because we're supporting more products than we had a year ago," says Friedman. The Ledger site operates largely independent of the print newsroom.

At the Albuquerque (N.M.) Journal, the Web site likewise is holding steady with its modest staff -- 3.5 FTE editorial employees plus one advertising person. That's the same as a year earlier.

Getting by with what you've got, and adding to the employee workload, is a common refrain, because many news site managers do feel the need to expand the quality of their offerings even when times are tough. When tough times finally pass, online news executives want to emerge with quality services that will attract audience and advertisers.

At AP Digital (the online division of The Associated Press), there are 45 editorial staffers -- the same as a year ago. But despite the lack of growth, the division, which produces The Wire online news service used by many newspaper sites, has actually been able to enhance its existing services, according to Ruth Gersh, editorial director.

Show me the money

Just about everyone I interviewed for this column cited revenue pressures -- the demand from top management that new projects (and indeed existing services) be shown to generate a reasonable return on investment, and certainly not lose money. "We can no longer do things just because they're cool," one newspaper new-media manager told me.

As an example, at the Web site of the Daily Camera in Boulder, Colo., (a Scripps newspaper), "we're expected to justify our expenses and demonstrate ROI" on new projects, reports new media manager Christopher Ryan. There have been no new additions to the online staff in the last year (nor cuts), but resources have been adequate enough to embark on significant new projects.

The premier example of a project that was designed to make money is the Camera's new online classifieds ordering system, which allows Internet users to place ads online (for publication in the print edition and online) -- and order up special "upsell" features like reverse type, horizontal bars, etc. Ryan says the service is now taking in about $1,000 a day in revenues. (Some of that is new money; some ads otherwise would have been placed over the phone, as always.)

The impact on salaries

Leah Gentry, managing partner of Finberg-Gentry, The Digital Futurist Consultancy, says her experience with clients indicates that newspaper new-media departments have been "spared the rod" in the last year when it comes to cutbacks and layoffs. Because of newspaper executives' conservative funding of new media, with a few exceptions most newspaper Web sites never were well staffed -- so there's little justification for making significant cuts, she says.

One effect of the downturn, Gentry says, is on newspaper salaries -- affecting print and online divisions. Salaries were forced up at the height of Internet mania, as newspapers tried to prevent talent from walking out the door to accept higher-paying dot-com jobs. Those pressures have now evaporated, which eases the financial burden on publishers.

The News & Observer's Jordan notes, "I can find much better talent -- and have a much wider pool to gather from -- today than one year ago." After convincing his publisher earlier this summer to seek an information designer, Jordan got a bunch of quality resumes "from people far and wide" -- many of whom told him that they would take the expense to relocate.

"There is no doubt that new media salaries -- along with other positions in the high tech arena -- will take a hit in this environment."

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Publishers Should Open Creativity Faucets, Wednesday, July 25
A Whack on the Head for Online Media, Wednesday, July 11
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