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Print-is-dead vs. long-live-print debate rages

Challenging conditions in the media business are driving a wide variety of strategies.

By Richard Siklos, editor at large
Last Updated: June 16, 2008: 6:06 PM EDT

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LONDON (Fortune) -- The debate over the future of print media has generated some interesting sound bites of late: Microsoft CEO Steve Ballmer told The Washington Post that ink-on-paper is dead in 10 years. Rupert Murdoch, meanwhile, expressed cautious optimism at a conference sponsored by his Wall Street Journal that print will be round for "at least 20 years, and outlive me."

What's become increasingly clear is that if Murdoch is right, newspapers and magazines will be very different - in format and frequency - from what we see now.

At the Tribune Co., (TXA) which publishes the Chicago Tribune and Los Angeles Times among others, new controlling shareholder and real estate billionaire Sam Zell has empowered his chieftains to reduce page count significantly in pursuit of a 50-50 ratio between advertising and editorial content. He also wants them to start measuring the productivity of journalists. (Note to my editors: bad idea.)

And U.S. News & World Report, which used to be known as the No. 3 newsweekly but these days focuses on health and money service features, is now moving its publishing schedule to once every two weeks.

At the same time, of course, all publishers are placing bigger emphasis on their digital media products, which, though tapping into the fastest-growing advertising market, are still in their infancy relative to the size of the print market.

Followers of the economic theory of creative destruction know that a basic tenet of any successful business is that if you stand still, you're dead - and even if you keep improving your product, the odds are against you staying on top for long. As the Internet roils the media world, the degree of innovation - both inspired and desperate - is accelerating on the print side of the business in the United States. (In some parts of the world, print is booming.)

It used to be that every few years a newspaper or magazine would switch editors and redesign to "freshen up". Not only do redesigns seem commonplace now, but more fundamental changes are in the offing. The Christian Science Monitor, for example, may switch from a daily to a weekly print edition.

Nowhere has this sense of accelerated change been more true than here in England, the world's most storied newspaper market with no fewer than 10 national newspapers.

The Times, owned by Murdoch's News Corp., (NWS, Fortune 500) just unveiled a stylish redesign. Following the Independent, the Times converted from a broadsheet to a tabloid format a few years ago. That move may or may not help circulation in the long run, but for now it shows that their owners are committed to staying robust. Their conversions also inspired more innovation from rivals such as the Telegraph and the Guardian, which bear little physical resemblance to their former iterations.

That said, the UK market is a strange one: it's not clear that many of its biggest papers - including the Times, Independent and Guardian - have turned a profit in recent years. The American newspaper market has been more conservative. It's still a big deal when a newspaper stops publishing stock listings. And most publishers there are still making a nice buck, if not as nice as before.

In the magazine business, reductions in frequency like the one planned by U.S. News are part of the creative destruction process (think of the many iterations of once-mighty but now dormant Life magazine which, like Fortune, is owned by Time Warner (TWX, Fortune 500)).

Not every publication is destined to live forever in print, but the Web can provide a kind of immortality. When Hachette closed the magazines Premiere and Elle Girl, it kept them going online, albeit with a lower profile. And the Washington Times recently announced it will only publish its Saturday edition online. (Correction: An earlier version of this story incorrectly stated that the Albuquerque Journal was pursuing the same strategy.)

The challenge, of course, is that once you start moving in a direction that looks like it gives your core customers less than they were getting, you may simply lose them that much faster.

Thus Tribune Co.'s gamble: Will smaller, redesigned, lower-cost papers boost profits and be a hit with readers (as some reader surveys suggest)? Is a 50-50 editorial/advertising mix a magic ratio for success? Count me a skeptic: that's a tricky algebra question relating to the cost of producing a page of content versus whatever the prospective advertising revenue each page of these reconfigured papers will command. The X factor: whether the edit content that remains will keep readers happy.

What's clear is that for Zell and his lieutenants, standing still isn't an option. Newspapers are suffering far more than the glossies, and they need to stop the bleeding. As Tribune chief operating officer Randy Michaels said on a recent conference call after the company reported that publishing revenue was down 11%: "Frankly, this environment gives us every incentive to speed up the process a little bit, and get where we need be a little bit quicker."

Before the last page rolls off a press, one or many decades from now, there will be more creativity -- and equal helpings of destruction-to read about. To top of page