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Newspaper association president: no bailout necessary, but industry will change

John Sturm, president and CEO of the Newspaper Association of America, rejected the idea of a federal bailout of the nation’s newspaper industry during his testimony before Congress today.

At the same time, he once again put news aggregators on notice for utilizing newspaper content without paying for it, and foreshadowed the spread of a “monetized” model for news Web sites, according to testimony posted on the NAA Web site.

Sturm, like many professional journalists, rejected the notion of a federal buyout during a Joint Economic Committee hearing on “The Future of Newspapers: The Impact on the Economy and Democracy.”

At the same time, he stated firmly that newspapers must be compensated for the content others are using as they aggregate news on their sites.

“The original reporting done by newspapers each and every day cannot be sustained over the long run if newspapers are not able to obtain fair and reasonable compensation for the content they produce. The industry is working on a variety of solutions to address this issue and make it convenient for users of newspaper-generated content to license and pay reasonable fees for such use. We expect these solutions will be in the marketplace next year.”

He also seemed to indicate that the model of providing news on Web sites for free is going to have to change as advertising dollars shrink and newspapers seek additional sources of revenue.

“NAA recognizes that newspapers – on their own – must adjust their business models to find a way to monetize online content in a way that contributes to local journalism.”

Sturm made a key point—often lost in all the gloom and doom talk surrounding the shrinking readership of newspapers—that readership actually is increasing. In fact, newspapers’ reach is greater than ever, thanks to Web.  “Newspapers’ print editions combined with their Web sites have more audience than ever, and their content never has been more popular—even among young people,” he told the committee.

As for the future, he supported a measure that would make it easier for newspapers to transform from for-profit entities to non-profits, with the support of local investors and communities.

“The Newspaper Revitalization Act has merit and could work in certain situations. This legislation, introduced last week by Rep. Carolyn Maloney (D-NY), chair of the Joint Economic Committee, would allow newspapers to organize as nonprofit entities while continuing to generate advertising revenue. While NAA believes this proposal has merit and could work in certain situations, it would require local citizens and civic leaders in a community to commit a significant volume of resources to fund newspapers’ journalistic functions.”

After yesterday’s post, friends and former colleagues in the media wrote that they agreed newspapers should not benefit from special government treatment. However, worry is widespread as they fear for their jobs as well as the future of journalism.

As if on cue, panelists at Advertising Week’s three-part panel “Are Legacy Media Going the Way of the 8-Track?” offered hope. They made the point that the media are more healthy than is widely acknowledged.

“Papers have traditionally relied on advertising for some 80 percent of their revenue. But Susie Ellwood, CEO of the Detroit Media Partnership, which operates the business side of Gannett’s Detroit Free Press and MediaNews Group’s The Detroit News, said she saw that ratio for Detroit getting to 60/40 next year and inching closer to 50/50 as the papers rely increasingly on consumer revenue.
  ‘Content’s very valuable, and we need to figure out what to put behind pay walls,’ she said.”

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