California newspaper defies trend to shrink costs

originally appeared in The Associated Press:


New and expanded sections to cover business, automobiles and food. A nearly five-fold increase in community news pages and more investigative reporting. Even daily color comics.

It feels like a throwback to an earlier era at the Orange County Register, where a first-time newspaper owner is defying conventional wisdom by spending heavily to expand the printed edition and playing down digital formats.

The head of an investor group added about 75 journalists and, with 25 more coming, will have expanded the newsroom by half since his group bought the nation's 20th-largest newspaper by circulation in July.

Changes also include thicker pages with triple the number of colors to produce razor-sharp photos and graphics. By the end of March, the newspaper will have 40 percent more space than under previous owners, Freedom Communications Inc.

The investor group chief believes people will pay for high-quality news. His bet is remarkable in an industry where newspapers have shrunk their way to profits for years, slashing costs while seeking clicks on often-free websites to attract online advertising.

As more newspapers begin charging for online access, Kushner's spending spree is drawing close attention.

If he's successful, it's going to show the way for other papers to follow, according to the publisher of the Arkansas Democrat-Gazette and an early advocate of charging readers for online access.

Seated behind his large, clutter-free desk near shelves stacked with newspapers, the former Stanford University gymnast said his lack of industry experience may be a plus because he hasn't been through the tough times in newspapering.

So when we sit down and look at what's possible, our view of the world is different, he said. We're a little crazy in that we really do believe that we can grow this particular newspaper.

It's too early to know whether he's right. he said advertising revenues have grown, though he won't say how much.

Average daily circulation rose 5.3 percent as of Sept. 30 from a year earlier to 285,088 on weekdays and 387,547 on Sundays, bucking an industry decline of 0.2 percent, according to the Alliance for Audited Media.

One key test will be when the Register begins charging for online access sometime before the end of March. He said readers will pay the same as the print edition - a contrast to publications that charge online subscribers substantially less.

If you have a wonderful restaurant and it cost $10 to come in the front door, I've never understood why it should cost anything less to come through a side door, he said.

The value of the journalism isn't any less. The reporter isn't paid any less. The photographer isn't paid any less.

The investor group president who has a master's degree in organizational analysis, founded a business in the 1990s that allowed people to change their addresses online and later owned and managed a greeting-card company for seven years.

In 2010, he started an investors group, 2100 Trust LLC, to scout for newspapers, flirting with The Boston Globe and later with MaineToday Media Inc., publisher of The Portland Press Herald.

The president of The Portland Newspaper Guild, said the group chief presented the union with 50 demands, including a longer work week and increases in employee health care contributions.

We got off to such a bad start that it was hard to recover, according to the Newspaper Guild president, who is skeptical that the investor group's print bet will succeed.

The investor group president settled on Freedom and its 107-year-old flagship paper, the Register, for an undisclosed sum. The newspaper serves affluent, growing, well-educated and ethnically diverse communities near Los Angeles, bolstered by 24 community publications.

He became Freedom's chief executive and the Register's publisher, working five days a week at the company's Santa Ana headquarters and flying cross-country to his wife and three children in the Boston area.

Many executives stayed put, including the top editor, who joined the Register in 1989.

The newsroom is nearing 300 employees, including about 40 year-round interns who are paid $10 an hour and provided housing. The new owners eliminated 401(k) matches at the non-union newspaper and have resisted pay raises.

Like other newspapers, the Register experimented over the last decade as its circulation tumbled 40 percent and the newsroom shrank in half. A tabloid paper featuring snappier stories failed, as did a weekly entertainment publication.

Reporters got ever-rising numerical targets to generate Web traffic, with constant reminders of how they fared against peers. It was more like a sales floor than a newsroom, one columnist wrote in a recent piece hailing the Register's reawakening.

To focus more on the print edition, the Register slashed the number of blogs from around 40 to less than a dozen. It scrapped an iPad application for news, traffic and weather.

The new owners have introduced a daily page for coverage of a major development, began sending a reporter and photographer to every one of the region's 50 high school football games on Fridays and doubled editorial pages.

Reporters have been encouraged to dig deeper and expand sources. It's a new experience for (a publisher) to say, Are you sure you have enough investigative reporters? I think you ought to hire more, he said.

The Register's editorial page - once a strong libertarian voice - didn't endorse for president in November. The new owner has contributed to Democrats such as Barack Obama and Joe Biden and moderate Republicans, including Sen. Susan Collins of Maine.

He declined to discuss his political views and said they are separate from his work at the Register.

He is looking to buy more newspapers, telling Register staff last year that he had a list of 15 that fit his criteria. In an interview, he expressed interest in Tribune Co. newspapers, which include the Chicago Tribune, Los Angeles Times and Baltimore Sun.

Some readers and employees question how much the new owners will stomach if growth stalls. The owner insisted he is committed, saying the Register has a strong balance sheet and doesn't answer to shareholders seeking quick returns.

If you don't have a clear tangible way to grow revenue you only have one alternative and that's to cut costs, he said. That path may well work. That's not the path that we're on here.

Book Review: 3 New Books Search For The Future Of Media

USA Today

This is an awkward time to write about the media business. We know a lot about the damage that the Internet and other technologies have done to traditional movie, television, music and print companies. It's still unclear, though, whether the familiar pillars of civic and popular culture are merely teetering, or about to collapse — and, if they do fall, what will take their place.

Still, the story is too important to resist. And three books provide useful, but different, perspectives for readers who want to understand the current mess.

The Curse of the Mogul: What's Wrong with the World's Leading Media Companies is the most challenging book in this group. But it's also the most important for anyone who wants a sophisticated analysis of how media businesses work — or, more precisely, how the authors believe they should work.

Jonathan Knee, Bruce Greenwald and Ava Seave deftly and often entertainingly cut a generation of media CEOs down to size. Curse shows that many of them were geniuses at finding ways to stuff their pockets with cash, but pompous lightweights when it came to serving their shareholders or preparing their companies for the digital onslaught.

(Full disclosure: The book grew out of a course the authors teach at the Columbia Business School, which I took in 2004.)

The authors throw their sharpest knives at moguls in hit-driven businesses who think they're hot stuff because they're tight with entertainment stars or have a sixth sense for what TV watchers, moviegoers or music listeners like. That sounds impressive in magazine profiles, or when companies try to justify their CEOs' inflated salaries. But the data show that these creative-friendly executives don't consistently deliver big profits.

The same can be said for moguls who love megamergers, including ones that blend news and entertainment with distribution, such as TV networks and cable systems. They dream that their size will enable them to beat or circumvent all comers.

But the winners in media avoid competition. When companies have competition, the authors say, they should divide the market and fix prices (using code so as not to rouse antitrust officials).

That's great for investors; not so much for consumers.

And it's especially cold comfort for most companies trying to make it in the digital age. How do you create barriers to entry in a medium that enables everyone to reach a worldwide audience?

That's what makes Google so intriguing, and a worthy subject for New Yorker writer Ken Auletta's 11th book, Googled: The End of the World As We Know It. Unlike Curse, which treats moguls with derision, Auletta's more interested in penetrating the often secretive world of the business elite and telling the stories with skill, intelligence and respect.

As the media industry's most inside outsider, Auletta has become its chief storyteller — much as The Making of the President author Theodore White was to presidential campaigns.

That makes Googled a fine guide for people who want to know how the force behind the leading Internet search engine, YouTube and Android phones positioned itself to become the first $100 billion media company.

Unfortunately, the story delves too deeply into Silicon Valley's cool, insular subculture to grip readers who aren't already interested in Google. For all of its importance in contemporary life, this media company is about engineers solving technical and business problems — not entertainers who want to touch people's hearts or journalists who want to engage their minds.

Also, Auletta never seems to get close enough to Google founders Larry Page and Sergey Brin to humanize them.

So the book's detailed accounts of key events in Google's development read more like a series of stories from a trade magazine than a compelling work of literary journalism.

Just as important, it's still too early to say anything that's meaningful about where Google's taking the media business.

Bob Garfield, Advertising Age editor at large and co-host of NPR's On The Media, faces a similar problem in The Chaos Scenario, a sweeping, often provocative and sometimes entertaining series of essays about how the media business is changing.

Unlike Auletta, Garfield seems eager to channel Hunter Thompson. He taps his keen sense for the absurd to riff on social trends and personal experiences as he makes bold predictions about what he thinks will happen to media companies.

But the effort offers too few flashes of brilliant insight, and strains too hard to impress with bluster, anecdotes and shtick.

The bulk of Chaos suggests that the gig is up for traditional media. These companies are wedded to obsolete models and arrogantly fail to listen to their customers.

Garfield, who likes to label things, considers listening so important that he's elevated it to a field of study he calls Listenomics.

Garfield seems OK with the prospect of newsrooms and studios going under: The masses have "aggregated curiosity, IQ to spare, and all the time in the world," he writes, to replace them with their own news and entertainment.

That's a fascinating possibility.

Sadly, Garfield never develops the evidence and arguments that might support his vaguely libertarian faith.