The prospect of hanging

"Nothing so focuses the mind as the prospect of hanging."

Ben Johnson said that (or something like it -- I've seen the quote in various forms). It can be applied to business quite well, and we see it in action in the newspaper business today. An industry long noted for arrogance, insularity, and absolute disdain for innovation (see Michael Kinsley's column, "Black and White and Dead All Over", which I posted about a couple weeks ago), is suddenly awakening and recognizing the need for change.

Why? Because the noose is tightening every time the latest circulation numbers are posted.

Total newspaper weekday circulation fell about 2.4%, to 54.6 million, from 1999 to 2004. Sales in the 100 largest markets fell 2.9% in the year ending on Sept. 30, according to a Credit Suisse analysis of data from the Audit Bureau of Circulations.

Even worse than declining circulation is declining stock prices:

Growing uncertainty about newspaper companies' prospects contributed to a 20% decline in the collective value of newspaper company stocks in 2005.

USA Today reports on the minds that are slowly opening, part of which is an "initiative by the industry-supported American Press Institute to design a new business plan for companies grappling with competitors on the Internet and other new media."

"Across the industry the message I pick up is, 'Oh my God. It's slipping away. What can I do?' " says Stephen Gray, managing director of the initiative, called Newspaper Next.

So what are papers doing about the problems. USAT lists some approaches:

Extreme local focus: Report in extreme depth ("Recent editions included stories about the new school crossing guard, happenings at the Bluffton garbage dump ...") The idea is to do what no other medium can do.

New media: "We offer content over iPod, cellphones, PlayStation, TV, radio and magazine. We want to be platform agnostic. What's the best way to tell that story? Does it need video or audio?" This is a recognition that they are in the business of conveying information, not in the business of selling ink-covered paper.

Mini-dailies: These are free-circulation tabloids given out in many major markets, and they seem to be successful: "The business model seems to work. For example The Dallas Morning News' 2½-year-old mini-daily, called Quick, should begin generating cash flow this year..."

They're entertainment and gossip rags, to a great extent. "Our consumer-driven society is about a lot of things besides hard news," Decherd says. "Americans spend a tremendous amount of time focused on their lifestyles. We have to listen to our audiences to some extent."

Now there's a really new idea.