Desperately Seeking the News
He
may have just bought a daily newspaper, but Chris Ferrell isn’t coming
to praise print. He’s coming to bury it...or at least kick some dirt on
its wheezing body. Last week, Ferrell and his fledgling SouthComm
Communications signed a letter of intent to purchase The City Paper
with the dream of making the sleepy daily the backbone of an online
monolith. With a new emphasis on the paper’s website—and a downscaling
of the print product—the move is meant to slash print costs and stem
the free paper’s money-dripping losses.
“I think you will see this model emerging all over the country,” says Ferrell, the former Scene
publisher who helped turn around revenues during his tenure here. “The
economics of printing a paper every day just doesn’t work.”
Maybe so, but it’s not clear the economics of Ferrell’s new company
will either.
Starting April 28, the 8-year-old City Paper, which
knowledgeable sources say has hemorrhaged between $10 million and $15
million during its short life, will publish only on Mondays and Fridays
and in turn will make its website the place for daily news. SouthComm’s
other media properties—Business Tennessee, NashvillePost.com and Music Row magazine—will provide news and analysis for an invigorated main page.
Ferrell, who stresses that his plans are evolving, hopes that if he offers a menu of alternate media options, from The City Paper’s old-fashioned print editions to Nashville Post’s pay-for-content model offering the latest news in business and politics, advertisers will buy a combo platter. Or maybe they’ll take a cafeteria approach. Either way, to lure them, he’ll have the largest staff of business reporters in town and thus, in theory anyway, the wealthy readers ad buyers crave.
Funded by Townes Duncan, a prominent and successful local investor, SouthComm hopes to strike a balance between the crusty world of print journalism and the almost dogmatic belief that the future of journalism lies only on the web. The company still will publish the dead-tree version of The City Paper, with a Monday edition focused more on news and business and a Friday edition more centered on arts and entertainment. The paper will shelve nearly all of its national wire coverage and pursue longer, more analytical stories. Meanwhile, the website will focus on shorter, breaking news items you can scan in your office cubicle.
“The biggest advantage is that you save cost—the people who read The City Paper are a lot of the same people who read the Nashville Post, people who are comfortable getting content online,” Duncan says. “And the two-day-a-week print publications will be larger papers than they are now, and we think we can do a good job of serving the advertisers.”
But for all its fancy components, the move is primarily a marriage of two long-struggling operations, The City Paper and Nashville Post. Neither publication is particularly adventurous—the Nashville Post, the more targeted of the two, can sometimes bury its smarter stories inside a virtual repository of press releases, while large swaths of The City Paper are as engaging as the back of a cereal box. Both publications have devoted readers, but they clearly haven’t lured enough advertisers to put either outlet in the black. Perhaps more importantly, have you ever looked at The City Paper or Post and thought, “Herein lies the future of journalism?”
But Ferrell thinks he’s onto something.
“The premise that I’m building the whole SouthComm publishing company around is that the way people want to receive their breaking news is online,” he says. “People want the print product to be more longer-form stories they can read at their leisure.”
And Duncan thinks that, despite the financial drain The City Paper has been, there’s a chance to strike gold if he and Ferrell can land on an unprecedented business model for journalism going forward.
“The primary goal for any investment of outside capital is to make a satisfactory return on that investment—that’s the reason you do these things,” he says when asked if he’s pursuing more of a civic venture than a financial one. “The people who figure out the answers to that—what will newspapers look like 10 years from now—will make good money.”
It’s hard to tell what will actually happen, just looking at the numbers. Last year, online newspaper advertising jumped 18.8 percent while print advertising dropped 9.4 percent, according to the Newspaper Association of America. But online advertising still accounts for only 7.5 percent of total ad revenue. That’s right—7.5 percent. Newspapers have been on the web for 10 years now, so how long will the online migration take? And can a largely web-based publication thrive in Nashville, a city that is so squarely on the cutting edge of thought and innovation that it nearly elected Bob Clement mayor?
Meanwhile, Music City doesn’t land on the rankings of America’s Most Wired Cities—though a lot of other Southern cities such as Orlando, Raleigh and Atlanta have been recognized. Ferrell himself doesn’t have any data about what percentage of Nashville households have broadband access, which would seem like something he should be able to recite off the top of his head. (Around 60 percent, according to a study cited by former Metro Council member David Briley, who ran for mayor touting the advantages of making the Internet more available.)
Ferrell says that his company’s hybrid model will allow it to wait out the evolution of the online world. And as more and more readers turn to the web for news, the advertisers will follow them.
“I believe it will be a number of years before online advertising equals print advertising, both nationally and for our own publication,” Ferrell says. “We haven’t built a model that assumes unrealistic growth in online ads.”
Then again, it’s possible Ferrell has it reversed: That newspaper in your hands is still the main moneymaker, while the website is just a handy way to add some loose change. Last month Chris Anderson, the editor-in-chief of Wired magazine, wrote on his blog that newspapers are still a $45 billion business, “which is twice as big as Yahoo and Google combined.” Even in a slumping economy, the newspaper industry is only down 10 percent from its most profitable days and still twice as big as it was two decades ago.
“The truth is that the newspaper business is still a huge industry and will be around in one form or another for the rest of my life,“ Anderson writes. “That is not to dismiss the declines, but only to note that there’s still a lot of money there, and what is required is strategic change, not giving up the ghost.”
Of course, no one really knows what that strategic change will look like. A number of Nashville Scene staffers worked with Ferrell when he was publisher here and know first-hand that he is a smart and capable guy who managed to learn the ropes of an industry that was entirely new to him in short order. Now the former Metro Council member who was once tagged as a mayor in waiting is now in the formative stage of building a locally owned media company that hopes to compete with the long-slumbering Tennessean—and that also hopes to land on the magic new formula for profitable information delivery. It’s an enormous risk, especially considering that when we try to look into the future of newspapers, we see mystery and confusion.
For Ferrell’s sake, let’s hope he sees something clearer.
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