The newspaper business has been in a tailspin for some time, between declining circulation, falling advertising and the rise of the internet as a competitor for both eyeballs and ad dollars. Just what papers plan to do about this challenge seems to be the next big question for the medium. Newspaper owners are trying a variety of solutions, from cutting back publication days to throwing more resources online to thinning their staffs. Some publications, like the Christian Science Monitor and Wisconsin’s Capital Times, have abandoned print almost entirely. But no one seems to know exactly how to strategize in this new world of newspapers. That’s led to some panic in the industry. Most recently, the Journal Register said it will shut down up to a dozen of its Connecticut papers, including two dailies, if it can’t find a buyer. Ken Doctor, newspaper analyst with Outsell Inc., talks to Media Life about the future of newspapers, the limitations of the internet, and when an ad revival will arrive.

 
What’s the smartest strategy for a big-city paper? What do you do?
 
News on newsprint is becoming a niche business. Metro newspapers must flip the switch prudently, banishing as many legacy (production, printing, circulation) costs as quickly as possible while retaining as much of the higher-margin print ads they can. More digital, some print.
 
And the digital must position them as local multimedia companies, as the lines between newspapers, TV stations and radio all blur and recombine online.
 

How does the newspaper revitalize itself in the community, or can it?
 
The internet is the greatest real-time communications medium yet invented. Newspapers have been slow to understand that, but a number of them are investing in staff and in technology to re-create the “newspaper” as a city information hub.
 
That means facilitating a free flow of professional-amateur news and comment offered up by community members (and clearly demarcated from “professional” content). It also means becoming the go-to source for what’s happening for all kinds of community (and neighborhood) events.
 

Is this a dying business?
 
It’s a shrinking business that only looks like it is dying.
 
The U.S. newspaper business will still take in some $40 billion in revenues in 2008. Inevitably, these companies are all getting smaller, focused on the two skills that will drive the new, digital business – multimedia-creating journalists and re-energized, re-trained, multimedia-adept sales forces.
 

How can newspapers change? Does going online only make sense?
 
No U.S. newspaper company can attribute more than 15 percent of its total revenue to digital – and that’s the rub. They can’t flip the switch to digital, without becoming a much smaller enterprise.

Consequently, they need to profit from print as long and as much as they can.
 

What are some other innovative solutions that newspapers around the country are looking at?
 
Niche sites, such as the MomsLikeMe, a Gannett experiment at more than 60 sites across the country, are an example of targeting. Newspaper companies are moving from mass to niche, quickly. They’ve got an incredible ability to create and aggregate content. Now they’ve got to serve the niches, finding biggest and most advertiser-sought-after audiences.
 
Video, self-produced and aggregated (both from local and national sources) is a major driver for 2009, as the AP focuses on its new relationship with ThePlatform and other companies retrain their newsroom staffs to shoot video. The Washington Post has trained a quarter of its newsroom this year. 
 

The Journal Register said this week that it will close many of its Connecticut papers if it can't find buyers. Do you anticipate more newspaper closings, or is that just panic?
 
We’ll see some more closings. We’ll see more dailies become less-than-daily.

A daily outside of Phoenix, the East Valley Tribune, is going four days a week in January. We’ll see a lot more of that kind of re-jiggering of the print/digital equation.
 

When do you anticipate a turnaround, if at all, in newspaper advertising?
 
When the recovery happens, some recruitment, real estate and auto advertising – the traditional classifieds – will come back. Retail and national will also perk up from some of the bottoms that newspapers are now experiencing and will experience into the first half of 2009.
 
The big question of course is how much of this advertising moves to more measurable ad forms, paid search in its several variations mainly, and how much returns to print.

Forty percent of the newspaper industry is partnering with Yahoo, and we should see a good Yahoo bump, in online display ads, especially from those companies that have done a good job of retraining their online-only-oriented ad staffs.