John Paton, CEO of the company that owns the Pioneer Press. Credit: INMA

The marketplace value of traditional journalism is zero. The business model of newspapers is irretrievably broken. And anyone who thinks differently is bringing a knife to a gunfight.

So says the man who runs a media empire that includes the St. Paul Pioneer Press.

John Paton is CEO of Digital First, a venture created to operate the holdings of two struggling media companies: Journal Register Co. and MediaNews Group (which owns the Pioneer Press).  Digital First describes itself as “a local news powerhouse with more than 880 multi-platform products in 18 states serving more than 57 million Americans per month.”

In recent years, Paton has become a powerful voice in the debate over the direction of the news industry. That may be because most of the news industry is battered and disoriented by the twin disasters that have befallen it over the last decade: the destruction of its business model by the Internet, coupled with the worst economic downturn since the Great Depression.

Under those circumstances, anyone willing to stake out a firm position and advocate it vigorously is bound to become a thought leader – and Paton has been an unusually vigorous advocate for his view that the future of journalism is digital.

In a recent address to the Canadian Journalism Foundation, Paton made his case. Among his observations:

• “There is no general model for newspapers to replace the one the Internet just broke.”
• “What we know and what we traditionally do has finally found its value in the marketplace and that value is about zero.”
• “ ‘You’re gonna miss us when we’re gone’ is not much of a business model.”
• “Investors don’t buy into myth. They buy into math. If you want investors to take a long-term view on our industry or our companies, then you better give them a long-term plan that works.”

Paton’s solution is to focus on digital media above all else. Digital and print can work together, but digital has to be in charge. That’s a tough sell in an industry that still relies on print advertising for 80 to 90 percent of its revenue, but Paton hasn’t backed away from his position.

He also believes in getting regular people more involved in creating and delivering the news, breaking down the distinction between professional journalist and citizen journalist.

Regular people are already delivering news through Facebook, Twitter and other social media, he reasons. So why not give them a greater role – and hence a greater stake in – the traditional media that are fighting to maintain relevance in the digital age?

I haven’t subscribed to the full Paton, but I do think he’s a voice well worth listening to. Yet I can’t help but notice that the Pioneer Press hasn’t dramatically expanded its digital range. It may be that there hasn’t yet been time for Paton’s innovations to filter down.

But if Paton doesn’t put his theories into practice at the properties he controls, who will?

This is John Reinan’s weekly marketing column for MinnPost.com.

The Missoulian

In what I can only describe as a community-minded act of charity, multi-billionaire Warren Buffett recently announced that he would pay $150 million to buy his hometown newspaper, the Omaha World-Herald.

Buffett, who had a paper route as a boy, once was an enthusiastic investor in newspapers. He’s owned the Buffalo (N.Y.) News since 1977 and owns a significant stake in the Washington Post Co.

But in recent years, the Oracle of Omaha has been issuing doom-laden pronouncements on the future of the newspaper business. He’s said that newspapers “have the possibility of unending losses.” Of the Buffalo paper, he said, “On an economic basis, you should sell this business.”

So I have to conclude that Buffett’s purchase of the Omaha paper is the generous act of an aging rich man who wants to leave his hometown with a stable, well-financed, locally run news organization.

Good for him, and great for Omaha. If only every city had a Warren Buffett to insure the future of its leading journalism organization.

That got me wondering: Who could be the Twin Cities’ Warren Buffett?

We have two daily newspapers that have struggled along with the rest of the industry over the last five years. But we don’t have anyone as wealthy as Buffett, ranked No. 2 on the Forbes 400 list of America’s wealthiest citizens with a fortune of $39 billion.

Still, we do have six members of the 400, billionaires all. What are the odds that any of them would decide to take a late-life flyer in the news business?

Glen Taylor: Nope. He fulfilled his obligation to buy a struggling community institution when he took over the Minnesota Timberwolves.

Whitney MacMillan: The Cargill heir stays completely out of the spotlight – Forbes didn’t even have a photo of him to run with his listing. Hard to imagine him taking on such a public role as owner of a newspaper.

Barbara Carlson Gage and Marilyn Carlson Nelson: Same story. The sisters, daughters of the late Curtis Carlson, have stayed out of the limelight in recent years – although Marilyn Nelson was unquestionably the state’s most powerful businesswoman for decades.

Richard Schulze: The Best Buy founder has shown admirable community-mindedness with his generous donations to educational institutions. But he’s never given any public indication of a desire to become a media mogul.

Stanley Hubbard: Now, this guy is already a media mogul. A legend in both terrestrial and satellite broadcasting, he’s smart and tough. Just the man to take on the challenge of breathing life into a fading news medium. The only trouble is, he’s probably too smart to bet on such an uncertain enterprise.

Bottom line: We probably don’t have anyone likely to step up and buy either of our daily newspapers. And you know what? We may not even need them. The Star Tribune has Mike Klingensmith, Editor & Publisher magazine’s newly named “Publisher of the Year,” and the Pioneer Press is under the corporate management of one of the news industry’s current visionaries, John Paton.

If they can’t figure out a path to the future, none of our local moneybags is likely to, either. And we’ll be a cold Omaha – without Omaha’s news coverage.

This is John Reinan’s weekly marketing column for MinnPost.com.

By Horsey, courtesy of Chazz Writes

A couple of months ago, I wrote that the end of newspapers is closer than you think. Since then, events have lent credence to that prediction.

Most notably, several newspaper companies have moved decisively toward a digital-first identity. Let me explain why that’s a big deal.

In the infancy of the Web — barely a decade ago — newspapers often held their scoops for the morning print edition. And TV stations held their best stuff for the 10 o’clock news.

Though the newspapers and TV stations had websites, they didn’t want to publish significant stories on the Web first, fearing that the competition could follow up with its own version during the same publishing or broadcast cycle. That line of thinking went out the window a few years ago. Now, media organizations almost always publish their news to the Web as soon as they can.

Many TV stations and newspapers still do hold out some exclusive content to give people an extra incentive to watch their broadcast or buy the print newspaper. But those are usually so-called “enterprise” stories involving significant reporting that can’t be easily repurposed by a competitor.

For the most part, there’s been a recognition of the importance of immediacy. The modern news consumer has many choices, and often the key to engaging a reader or viewer is simply to be first with the story, rather than offering the most insightful or the most complete version.

Now, several newspaper companies have gone all-in on that notion:

•    Booth Newspapers, which publishes eight newspapers in Michigan cities like Grand Rapids and Kalamazoo, announced last month that it’s adopting a digital-first strategy. Most of its newspapers will cut back home delivery of print editions from seven days a week to three. As further proof of its commitment to the digital world, the company is changing its name to MLive.

•    GateHouse Media, which owns nearly 500 newspapers — mostly small-town dailies, weeklies and shoppers — announced an acceleration of its digital efforts as part of “Project Apple.” Newspapers, the GateHouse CEO declared, are “a product declining in popularity and readership.”

•    The Roanoke (Va.) Times, owned by Landmark Media Enterprises, announced job cuts and a reorganization geared toward “building a newsroom that is oriented first toward delivering news online.” Said Editor Carole Tarrant in a memo to her staff: “We do not expect to see growth in our print advertising base. … We are pursuing growth where growth continues to reside — on the digital side of our company.”

•    Just last week, Pittsburgh got a new, digital-only afternoon newspaper. The Pittsburgh Press launched under the same name that died 18 years ago when the competing Post-Gazette bought and closed the Press.

•    New York Times journalist David Carr published a compelling look at the strategy of John Paton, CEO of MediaNews Group — the nation’s second-largest newspaper company and owner of the Pioneer Press. Wrote Carr: “[Paton] is absolutely convinced that if newspapers are to survive, they will all but have to set themselves on fire, eventually forsaking print and becoming digital news operations.”

Nobody loves print newspapers more than I do. I’ve been reading at least three newspapers a day since I was 7 years old, and there have been few thrills in my life to match the occasions when I’d walk into a coffee shop and see people reading a front-page story of mine.

But the growing body of evidence is overwhelming. Many of the people who run our nation’s newspapers have decided that the future of their print product is unsustainable.

I hope they’re wrong. But I wouldn’t bet on it.

This is John Reinan’s weekly marketing column for MinnPost.com.

The big news last week was the death of Apple’s co-founder Steve Jobs. Because the immense legacy of Jobs sucked all the oxygen out of the room, the looming death of another great American technology icon got little attention.

But I noticed, because for a few years in the mid-1990s I was a newspaper reporter in Rochester, N.Y., the home of Eastman Kodak.

More than a century ago, Kodak was a company as revolutionary as Apple is today, in its technology as well as its marketing. Today, it’s denying a groundswell of bankruptcy rumors.

Before Kodak, photography was a messy and physically taxing activity requiring special expertise. Kodak’s founder, George Eastman, developed celluloid roll film that replaced the glass negatives then in use.

But his real genius was in marketing. Kodak cameras came pre-loaded with enough film for 100 pictures. When you used them up, you mailed the entire camera back to the factory and they sent back your photos and a freshly loaded camera. Kodak made things easy on the consumer, much as Jobs did with Apple’s brilliantly designed products. Kodak cameras, like iPods and iPhones, were simple and intuitive to use.

Like Jobs, Eastman also knew how to sell his goods. Kodak popularized one of the earliest mass advertising slogans in America: “You press the button, we do the rest.”

Even the name “Kodak” was created by Eastman. He thought the letter “k” had strong properties, and so he devised the company name himself, working on the principles that it should be short; not susceptible to mispronunciation; and unique — not resembling or associated with anything but itself. In this, Eastman was 100 years ahead of the marketing industry, which now hires specialized agencies to come up with new product names.

Rochester is a beautiful city with a cultural scene far beyond its size, much of it due to the legacies of wealthy families who invested early in Kodak. I greatly enjoyed my time there. But even 15 years ago, it was obvious that Kodak was slipping. First Fuji and other Japanese competitors undercut its profitable film and paper business. Then digital photography – which Kodak had invented – took off, and Kodak was slow to respond.

In that, the company was like the newspaper business, which grew so fat after decades of virtual monopoly that it failed to realize the threat from digital communication and advertising.

Kodak, which at its peak employed more than 60,000 people in Rochester, now employs fewer than 7,000 there. And earlier this month, its stock crashed to less than $1 a share on news that the company had hired a law firm specializing in helping companies file for bankruptcy. Kodak has denied that bankruptcy is imminent, but the denial rings hollow to me.

Newspapers and Kodak, two icons of 20th Century industry and culture, both flailing and sickly in the early decades of the 21st Century. It doesn’t seem possible that Apple could one day join them – but then again, nobody 30 years ago ever would have predicted the end of newspapers and Kodak.

This is John Reinan’s weekly marketing column for MinnPost.com.

Newspapers face a perfect storm of trouble: rising newsprint prices and transportation costs, coupled with declining readership and a shrinking ad base.

Though newspaper companies are working hard to increase their digital presence, they still get anywhere from 80 percent to 90 percent of their revenues from the struggling print editions.

But at some point, the expense and decreasing relevance of day-old ink on paper will force newspaper companies to severely curtail or even shut down their print editions.

And that day might come sooner than you think — perhaps within five years, and very likely within 10.

Gannett, the nation’s largest newspaper company, is a good proxy for the industry. According to a recent item in the Gannett Blog, readers are dropping their Gannett papers at a frightening rate.

Overall, Gannett newspapers lost 27 percent of their subscribers in the past decade. The drop occurred in large markets such as Phoenix and Indianapolis; medium-sized markets such as Des Moines and Rochester, N.Y.; and small markets such as Marshfield, Wis.

But that 27 percent drop hides an even uglier truth: Circulation held reasonably steady through the first half of the decade, then began falling dramatically after 2005.

Meanwhile, the newspaper industry has lost more than half its ad revenue since 2005 and the typical newspaper has slashed anywhere from one-third to one-half of its news employees.

Fewer readers, fewer dollars and fewer newspeople generating less news coverage. That’s not a recipe for success in either the long or the short term.

I actually believe that the Star Tribune and the Pioneer Press will last longer than newspapers in other markets. Readers here are loyal and both papers seem to have steadied themselves after the shocks of recent years. But even Nancy Barnes, the editor of the Star Tribune, told a professional group this month that the Strib’s weekday print editions might not be around much more than five years.

When print dies, newspapers will be forced into even more severe staff cutbacks. A handful of professional editors will oversee web content from poorly paid freelance writers and photographers, bargain-basement “content farm” news services and unpaid community members.

Newspapers will make increased use of computer programs that generate simple news, business  and sports stories from statistics and factual data – no human writing required.

They’ll fill their websites with sensational, titillating — and cheap — photo galleries designed to boost page views. Again, Gannett has pioneered this with the Metromix feature found on many of its properties’ websites – for example, this 54-photo gallery of Indianapolis Colts cheerleader tryouts.

When print newspapers die, their online brands will suffer, too. Right now, newspaper websites get great traffic, but still don’t bring in a lot of revenue. When their organizations lose that lucrative print revenue stream and cut back on news personnel and quality content, their websites won’t be as compelling as they are now. Traffic will drop as people find fewer reasons to visit.

Smaller weekly and community newspapers will last longer in print. Reader expectations are different and they’re already on a less-demanding publication schedule. And the handful of national papers like the New York Times and the Wall Street Journal will continue to be available in print – at a very hefty price for those who still want the paper edition.

But the age of the large, metro newspaper as a common news source for the majority of residents is drawing to an end – and that end might come more quickly than any of us could have imagined just five years ago.

This is John Reinan’s weekly marketing column for MinnPost.com.

That comes as no surprise to print and broadcast executives, who have seen their once-mighty monopolies erode in recent years faster than a Mississippi River levee at full flood.

But the report makes for fascinating reading for anyone interested in the massive communications upheaval we’re undergoing — and whether we can preserve the news gathering needed for an informed society.

In clear and compelling language, backed by research and extensive interviews, the authors tell the story of how traditional media were blindsided by a change that few saw coming.

And they strive to answer the fundamental question of online news: Why do so many digital users generate so little advertising revenue?

Consider these examples:

• A TV station in a top-five market gets seven million page views a month on its website, yet the site generates only 1 percent of the station’s advertising revenue.

• Believing that videos would boost its web audience, the Miami Herald devoted significant resources to producing its own video reports. Yet Herald-produced videos bring in ad revenue of only $4,000 in an average month.

• As its traditional base of large advertisers shrank, the Houston Chronicle began targeting neighborhood, mom-and-pop businesses that it once ignored. Using an innovative business model, the Chronicle sells an array of digital ads and services, including helping its clients build their own websites and improve their search engine rankings. But even if the new approach succeeds, the paper’s publisher figures it will do no more than match the current revenue from just one of the paper’s largest advertisers. “This has become a nickel-and-dime business,” Publisher Jack Sweeney said. “And you need a lot of nickels and dimes.”

The authors cite some success stories, to be sure. But many of them involve media companies in small cities, where advertisers have fewer options and also may be motivated as much by civic pride as by cold financial facts.

Meanwhile, traditional media are under attack by so-called “aggregators,” sites that scoop up news stories from everywhere, slap new headlines on them and run summaries on their own sites. The Huffington Post is one well-known example, but there are thousands more.

Said Aaron Kushner, an investor who’s trying to buy the Boston Globe, “The definition of a competitor now is someone who gives away your story for free.”

The report offers some suggestions for the traditional media: develop targeted local content that can’t be found elsewhere; strive to build a loyal audience rather than chasing large numbers of casual visitors; and look for ways to break the stranglehold of the CPM (cost per thousand) pricing system, which relies completely on the number of eyeballs that see an ad but doesn’t do a good job measuring loyalty or engagement.

The authors conclude with a hopeful exhortation to news organizations: become smarter, more nimble, more innovative — and you may become more profitable.

It’s a fine sentiment. But it’s easier said than done. Still, this report is an absorbing and insightful read for anyone who cares about the news.

This is John Reinan’s weekly marketing column for MinnPost.com.

You know the phrase “caveat emptor:” Let the buyer beware. There’s another bit of Latin that people should acquaint themselves with: “caveat lector,” or let the reader beware.

Never has there been so much information available to the public. And never has so much of it come from people with an axe to grind, either politically or commercially.

Anyone over the age of 30 grew up in an era in which media choices were relatively limited. The mainstream media were conscious of their role as an information source for the broad public, and generally made a good-faith effort to be as objective in their news reporting as possible. (No, they weren’t perfect, but I’m not here to debate that.) Meanwhile, there was a clear distinction between news and advertising.

Today, information sources have exploded, and many of the most successful ones have a definite point of view. There’s the Daily Kos and the Huffington Post on the left, Townhall and Fox News on the right. The general-interest outlets that thrived on serving the broad public are the ones struggling to gain traction in today’s marketplace of ideas.

At the same time that partisan news sources are thriving, commercial entities are breaking down the wall that used to exist between news and advertising. Sponsored content is more common than ever, both on the Web and even in print media that used to disdain such things. For example, several Gannett newspapers in New Jersey have regularly published stories written by an employee of the NHL’s New Jersey Devils. And they didn’t always make clear his relationship to the team.

Here in the Twin Cities, Hopkins-based ARAnet has built a successful business providing content that offers useful information to readers – and also gives a boost to businesses that have paid to be mentioned in the articles. These articles have run in the Star Tribune and many other traditional mainstream media. I wrote about this previously for MinnPost.

While ARAnet’s sponsored articles provide credible information, the Internet also has spawned a crop of websites that pose as real news sources but offer nothing more than unsubstantiated marketing claims.

In addition, well-funded interest groups now have the means to quickly create websites that promote a particular point of view on issues of the day – and it’s usually impossible for a casual observer to discern who’s behind the effort.

In many ways, these developments are a throwback to the early days of the republic, when media outlets (usually newspapers) were created by partisans explicitly for partisan purposes. There’s a reason why so many newspapers have “Democrat” or “Republican” in their names. Readers knew that each publication had a point of view, and took that into account. It was only in the last 75 years or so that an increasingly educated, professional class of journalists adopted the mantra of objectivity.

It may be that we’re living in a Golden Age of media, when any kind of writing, recording or video is instantly available to anyone, free of charge, any time of the day or night. Viewpoints that previously were shut out of the cautious, middle-of-the-road mainstream media now can flower. There’s a lot to be said for that.

Just remember that many of the people bringing you this Golden Age are also hoping to enlist you – either in a cause or a transaction.

Caveat lector.

This is John Reinan’s weekly marketing column for MinnPost.com.

The future of newspapers in the Twin Cities could hinge on events in Southern California. Sound crazy? Let me explain.

One of California’s largest newspapers, the Orange County Register, is for sale. Industry analysts expect a couple of companies to bid aggressively for it: Tribune and MediaNews Group. Both companies have extensive holdings in the Golden State, and the O.C. Register would help the winning bidder consolidate its position as California’s leading media company. News industry blogger Alan Mutter explains things in detail here.

MediaNews, you might recall, is the current owner of the Pioneer Press. If MediaNews adds to its already-large California holdings, then St. Paul would become even more of a corporate outlier. The Pioneer Press is the company’s only property in the Midwest, a lone ranger in an organization that has staked its future on the economies of scale offered by geographically clustering its news properties.

I suspect that if MediaNews buys the Register, it would be more inclined to look favorably at some kind of deal to dispose of the Pioneer Press. And in that case, the time might finally be ripe for the merger of the Twin Cities’ two major newspapers – either through a joint operating agreement or even an outright takeover, most likely by the Star Tribune.

We’re one of a handful of metro areas that still has two daily newspapers, and analysts have long speculated that we’d someday be down to one. The continuing struggles of the newspaper industry make that scenario more likely than ever.

Industrywide, newspaper revenue has dropped nearly 50 percent from its historic peak in 2005, and while other advertising media have begun a comeback from the recession, newspapers continue to lag. Several publicly traded newspaper companies reported single-digit revenue declines in the fourth quarter of 2010 and the first quarter of this year. That’s an improvement from the double-digit hemorrhages of 2007, ’08 and ’09, but it’s not encouraging at a time when other media have begun to show actual revenue gains – not just smaller losses.

While the Star Tribune made a good showing in 2010, it’s off to a slow start in 2011, as my MinnPost colleague David Brauer has reported. That could strengthen the case for the federal Justice Department approval that would be required for any kind of merger or takeover. (Brauer doesn’t agree with my overall analysis, however; read his reply.)

That’s where the other part of the Southern California equation comes into play. It’s hard for me to imagine a scenario in which the Star Tribune could buy the Pioneer Press unless the Strib can sell its land near the Metrodome for the $40-50 million price tag that’s been bandied about.

The only likely buyer for that land, at that price, is the Minnesota Vikings. And the Vikings won’t be buying the Strib’s property unless they get a deal for a new stadium. If they don’t get it, the team could wind up in Los Angeles, where an investment group has announced plans to build a new stadium to lure an NFL franchise back to the nation’s second-largest TV market. (It’s also possible, of course, that the Vikings could build a new stadium here on some site other than the Metrodome area.)

So if the Vikings do end up in California, the Star Tribune potentially loses out on a big payday. That would make it tougher – not impossible, but tougher — for the organization to make any deals involving a buyout of its rival.

For years, I’ve believed that the Twin Cities would inevitably end up with one newspaper. That’s been the trend nationwide for half a century. Why should we be the only place that bucks it?

Events in California could determine whether we finally succumb to that trend.

This is John Reinan’s weekly marketing column for MinnPost.com.

It’s been called journalism’s original sin of the Internet age: media companies giving away their content for free. Focused on their lucrative print and broadcast properties, they viewed the Internet as an afterthought and offered uninspiring websites as throw-ins for customers who wanted them.

Having trained their customers to expect free Web content, traditional media companies began hemorrhaging money in the mid-2000s as the Internet became consumers’ preferred medium. With their traditional products shrinking, mainstream media suddenly were in competition with an endless array of digital ventures that had grown up on the Web and understood how to engage customers and make money online.

All this has been widely discussed by media analysts. What’s gotten less attention is how the growth of the Web has devalued writers, photographers and other content providers. The model that’s developing in today’s communications business mimics the distribution of wealth in America: a few rich people at the top and a big group struggling at the bottom.

The new Web media learned one lesson very quickly: It’s a lot easier to make money if you don’t pay for your content.

The poster child for this is the Huffington Post, which recently was sold to AOL in a deal that netted founder Arianna Huffington an eight-figure payday. The Huffington Post does employ a growing staff of writers and editors, but most of its traffic is generated by articles it “aggregates” from other sources and by an army of unpaid writers who hope the exposure on one of the Web’s most popular sites will help them land paying gigs elsewhere. Bill Keller, executive editor of the New York Times, recently attacked the Huffington Post in the New York Times Magazine.

Huffington “has discovered that if you take celebrity gossip, adorable kitten videos, posts from unpaid bloggers and news reports from other publications, array them on your Web site and add a left-wing soundtrack, millions of people will come,” Keller wrote.

In recent years, AOL had been investing in its own journalism operation. After acquiring the Huffington Post in February, however, AOL quickly axed several hundred people from its own existing news staff.

Getting into the spirit of things, AOL’s Moviefone unit fired a group of freelancers who had been contributing paid reviews to the site. But wait: In a memo from Moviefone’s top editor, the fired critics were invited to continue their contributions “as part of our non-paid blogger system.” After the memo leaked out, the top Moviefone editor was herself fired – not, I’d argue, for the substance of her memo, but for the embarrassment it caused AOL.

The old media are catching on. Last week, the Village Voice – whose parent company also owns City Pages – published a “comics issue.” Several stories focused on how tough it is to make a living these days as a cartoonist. No wonder – the Voice paid nothing for the cartoons it published in the special issue, having gotten cartoonists to contribute them free for the exposure. After an outcry, the Voice backtracked and paid the artists.

What does this mean for you as an information consumer? It means fewer professional journalists delving deeply into important topics – or even less important ones. It means you’ll rely more on information from unpaid sources like bloggers and consumer forums like Yelp!

It also means you’re likely to get more of your information from corporate sources, which are discovering that they can communicate directly with consumers without needing traditional media middlemen to tell their stories.

The Bible says that Adam and Eve were turned out of the Garden of Eden for eating from the tree of knowledge. Traditional media had their own Garden of Eden – a paradise of no competition, 30 percent profit margins and well-paid journalists with health benefits and pensions.

And at this point, I think the media are about as likely to get their Garden of Eden back as Adam and Eve were.

(Editor’s note: John Reinan wrote this item free, for the exposure.)

Credit: HealthHabits.ca

Editor’s note: This is John Reinan’s weekly marketing column for MinnPost.com.

Some stability has returned to the traditional media. Local TV stations just fattened up on their usual feast of election-year commercials. And after four years of ruthless cost cutting, newspaper companies have slowed — not stopped, but slowed — their bleeding.

But this brief spell of relative quiet may simply be the calm before another storm.

Newspapers are facing a huge boost in the cost of newsprint – their second-largest expense after employee salaries. Newsprint prices have risen more than 20 percent in the past year, and are expected to stay at that level for the foreseeable future.

Higher newsprint prices could force publishers into another round of cost-cutting. That could mean either fewer employees, or fewer pages in the paper. Either solution risks a degradation in the quality of the product that could drive more readers away.

Meanwhile, local TV hasn’t yet felt the full impact of the Internet. Hulu, a leading Internet TV service, is on track to more than double its revenue in 2010. Netflix has also aggressively entered the Internet TV market.

Here’s how that affects local TV. Cable TV companies nationwide lost nearly 750,000 subscribers in the third quarter of 2010 – the biggest drop in 30 years. Some of those cancellations no doubt were by people trying to save money in a recession. But others probably represent a switch to Internet TV.

Cable systems typically have franchise agreements requiring them to carry local TV stations. Internet-based TV services like Hulu and Netflix have no such requirements. People watching TV on the Internet will find it much easier to ignore local stations.

The rise of the smartphone also comes into play. By 2012, smartphone sales are expected to surpass, for the first time, combined sales of desktop and notebook computers. So, as more people watch Internet TV on mobile devices, local TV again risks being left out of the picture — unless the locals can come up with compelling Web offerings of their own.

A proposed sale in the traditional media world could provide clues about the future. Freedom Communications, which owns the Orange County Register along with 100 smaller newspapers and eight TV stations, recently put itself up for sale.

Some analysts have suggested that Freedom would use the money from the sale of its traditional media properties to remake itself as a digital company. That would be a sign that one management group, at least, no longer sees a future in newspapers and broadcast TV.

So, where is the future? On Facebook and sites like it. Facebook currently accounts for 10.3 percent of all visits to Internet sites by U.S. users. That’s more than Google, which comes in second at 7.2 percent.

What’s even more striking is that Facebook accounts for one in every four page views (actually, 24.4 percent). YouTube is second at 6.4 percent.  People use Facebook a lot, and they visit multiple pages while they’re using it.

The audience for Facebook is bigger than any TV show, and as time goes on it will become less about chatting with friends and more about delivering information and advertising of all kinds.

As Tim McGuire, longtime editor of the Star Tribune, said recently on his blog: “Mass media may not be dead — but call it fragmentation, targeting or hyperlocal, the day of a dominant local or national news force has definitely begun to fade. Mass media is on the clock.”