As he usually does, Scott Adams nails both sides of a complex issue while managing to bring hilarity to what is otherwise a pretty grim topic.

Not surprisingly, there’s been a ton of news of late surrounding the daily newspaper industry, but the summary of it all is that as bad as things are for the dailies, these businesses are incredibly gifted at finding new, imaginative ways to make things even worse.

• Newspaper revenues are down 29%, and papers around the country continue to crater. Freedom Communications, owner of 33 dailies (including the Orange County Register) and 70 weekly newspapers, filed for bankruptcy this week while the San Francisco Chronicle is cutting more employees. Ann Arbor lost its daily entirely, the L.A. Times is restructuring its sales force (as if that’ll help in the least), and Rupert has shuttered his free London Paper. With no attractive offers, the Austin American Statesman was taken off the block, while local investors purchased dailies in Philadelphia and bidders are emerging for the Boston Globe.

• Want to see local movie listings in the paper? Sorry.

• The debate over paid news continues to rage with more stories here and here.

• Rather than charging for online news, maybe the answer is better distribution through e-readers or ‘hyperdistribution.’

• Due to a string of bankruptcies that have placed media companies into the hands of creditors (like some cruel game of hot potato), the largest publisher in the country at the moment is….J.P. Morgan. The Banking giant now controls Readers Digest, Source Interlink Media and American Media Inc. which have combined revenue of just over $5 billion.

• Local news is a big deal these days and is being looked to as the savior for local dailies (as if it hadn’t always been). As everyone except daily newspaper publishers has known for years and years, the strategy of gutting local coverage in favor of generic AP stories and reruns from other newspapers has proved fatal for almost every local daily in the country. Now, after virtually every newspaper in the country is either on its last legs or already in bankruptcy, local news is back in favor.

• Local news is even big enough to be fueling some M&A activity. Local blog site Examiner.com has acquied NowPublic for an undisclosed sum. NowPublic raised $10.6 million last summer from lead investor Rho Ventures and seed investors Brightspark and the Working Opportunity Fund.

• Even the most dysfunctional paper in the country is seeing the local light. The Tribune Company has started a local blog network to boost its online coverage of all things local. Too little, too late, I’m sure, and they’ll undoubtedly find a way to screw it up, but at least they got the right answer eventually.

• Speaking of the most dysfunctional paper in the country, Tribune has finally sold the Cubs. Unfortuantely, only now is the greatest fraud in the industry’s final chapter receiving the scrutiny it should have from the very start.

• And finally, in the most baffling, head-scratch-inducing development over recent weeks, the same businesses that were slow to appreciate and effectively leverage the digital tsunami that swept across the industry are now letting go of the very people who have any chance of saving them.

It continues to dumbfound me how much this industry enjoys digging its own grave.

It’s been a very interesting past few weeks with a bunch of stories relating to the death of older news and journalism models (daily newspapers) and the emerging models that hope to replace the dailies. Below are a few of the stories that have caught my attention…

• On the old model front, Gannett has cut 1,000 more people from its payroll, and McClatchy’s efforts to restructure its massive, crippling debt load failed miserably. An extremely insightful, detailed analysis of Gannett’s debt reveals just how rapidly that company’s balance sheet has deteriorated and how perilously close to insolvency the once stalwart publisher truly is.

• Also on the old media front, USA Today shuttered ‘Open Air,’ its quarterly magazine targeting more affluent readers, and Tribune also ceased publishing its weekly Sunday magazine.

• Even smaller dailies, who had seemed somewhat immune to the travails of their big-city brethren, are feeling the impact of the web as well as the current economic meltdown. Deal activity in that segment of the media landscape is rising, and valuations present some interesting opportunities.

• Despite the grim news, there are signs that things may have bottomed and that at the current prices, certain media companies present compelling investment opportunities. Even Sam Zell appears to have found a buyer for his Cubs and Wrigley and his cable business. While below initial estimates, the fact that it might get done at all in the current environment is amazing.

• Another positive sign for the dailies is the fact that some are beginning to see returns on their investments in emerging media and technology. Even despite some embarrassing missteps and the fact that many investments are still in their very early stages, there is hope that the flurry of activity over the past few years, while perhaps too late, might have a chance in salvaging some value for the large dailies.

• Even Google is helping the cause of publishers by helping pave the way for customized news delivery.

• On a much smaller scale, some monthly magazines like Men’s Health have even figured out how to capitalize on the iPhone phenomena to create a nice little recurring revenue stream.

• One thing certain to not work for any daily paper is charging for the vast majority of its daily news content. Some will try, and perhaps one or two (NYT & WSJ) might be able to succeed at some minimal level, but the pay for content model is a death sentence for anyone else.

• A bunch of stories have sprung up recently about emerging new models for online news and journalism such as Huffington Post and Politico seeking to fill the vacuum being created by the implosion of the dailies. Debates are raging as to whether Huffington Post, in particular, is a credible, high-quality source of journalism, news, and opinion or a trashy parasite, and the arguments on both sides are both enlightening, interesting, and entertaining.

One of the most compelling and critically important side stories (or maybe it is THE story and the business stuff is secondary) related to the death of the daily newspaper is the impact on our communities, our society, and our democracy. There are a wide range of opinions about what will happen to the vacuum being created as newspapers implode and disappear, or at a very minimum, become far less able to afford true journalism. I subscribe to the belief that the concern is extremely justified, but that successful alternatives are already emerging and will continue to do so at an accelarting pace. In any event, Doonesbury has a great arc this week on the dumbing of America and the panel below even connects to the death of newspapers….very amusing but horrifying as well.

Here is the last day (finally) of cleaning out my backlog of stories relating to the dailies, traditional media, new media, advertising, etc. Some of these headlines are slightly outdated, but so be it.

• Village Voice Media is stepping in to capitalize on the opportunity completely missed by the dailies in creating a local advertising network. This may turn out to have been the biggest whiff of all the missteps of the dailies over the last decade. And while that may be arguable given how badly the dailies have handled their fortunes of late, there is no arguing that in these late innings, the creation of a local ad network (both online and offline) represents perhaps the last great hope for local newspaper franchises.

• Unfortunately, the local ad play has also taken a beating in the current downturn, so maybe it’s not the immediate fix everyone believes it to be. (Though long-term, the hype over local ad networks, local search, local media, and local advertising is more than justified). Even local TV, which has also whiffed on many of the opportunities they’ve been presented, is showing signs of innovation and change in the new media landscape.

• Online classifieds are soaring these days (as if anyone needed more evidence of how badly the dailies blew their monopoly in that arena).

• Tucson has lost its daily. And again, while some say enough with the obvious and tell me something I don’t know, the pace of death and destruction in the industry is staggering and is still worth endless commentary and observation. Anytime an industry can lose $18 billion in 3 years, it’s worth commenting on.

• …another article to add to the mix on whether or not micropayments will or won’t save the dailies. And despite the arguments against charging for content, MediaNews is forging ahead anyway.

• Some believe the Kindle won’t save the dailies either (though I’d argue that it might).

• Maybe public subsidies are the answer (even Congress is jumping on the bandwagon)…or maybe the dailies can follow the example set by the Huffington Post and start auctioning off internships and even higher level jobs on ebay.

• Also in the obvious category, the trend with the dailies over the next few years will be local billionaires and/or real estate developers buying their local daily from debt-holders. It’s already happened in San Diego, and next on the list will be Boston, L.A., and possibly even New York. (Something has to happen with the Times as it’s too valuable to be run down to zero and the Sulzberger family is eventually going to riot as their fortune continues to be decimated…). But eventually, most large metro dailies will be owned by local individuals or groups of individuals and we’ll be back to where we were 100 years ago.

As I indicated yesterday, I have a huge backlog of daily newspaper, media, and advertising news items that have accumulated over the past few weeks and am trying to get through them in as few blog posts as possible, so here’s day two of cleaning out the closet…

• McClatchy is scrambling on multiple fronts to stay ahead of the avalanche crashing down around it. The company has restructured its debt, accepting a 3x increase in the interest rate it’s paying (5% to 15%) in exchange for an extension on the debt of a few years. In the head-scratching department, the company is also experimenting with an additional charge for subscribers who want the TV Guide with their newspaper. Really?!?!?!?

• There is little doubt that the Wall Street Journal will be out front leading the charge in charging readers for its content online. This is a good thing (if done the right way), and in one form or another it will work and it will be an important component allowing certain publishers navigate towards a long-term, sustainable business model online. Circling the wagons and working out an industry-wide program might be the answer, but the dailies just need to make sure they stay out of trouble with anti-trust regulators in the process. The trick will be balancing the need to generate a decent value proposition that warrants a paid fee and the urge to maniacally police the web for ‘pirated’ content.

• Another component of that sustainable business model will be individualized news. There has been countless attempts of this, and many, many failures, but eventually publishers will figure it out and it will become a standard component of news delivery, both in print and online. The latest attempt in this effort comes from MediaNews.

• Newspapers are now less liked than airlines. According to a recent report, the American Customer Satisfaction Index, newspapers ranked below airlines and cell phone companies in customer satisfaction. That’s pretty low.

• With all the chaos swirling around newspapers, it remains an active area for deal activity. This is likely to increase as papers work through bakruptcies, consolidate, shut down, develop new models, and begin arriving at new models that provide some prospects for growth and value creation. Despite the collapse of the industry, print remains an incredibly appealing media channel for consumers and advertisers alike, and that will likely remain so for decades to come. But at some point, all the newspaper debt holders that are quickly becoming equity owners are going to realize that they have less chance of successfully managing a daily paper than industry veterans (who deserve about a D- for their effort even with an exceedingly generous curve applied to the grade) and are going to have to sell at whatever price they can muster. Debt holders who hold out hoping that good days are going to return are delusional. Selling now at $.10 on the dollar is far better than nothing down the road, no matter how painful the write-down might be today.

• The New York Times continues to experiment with new advertising formats on its site. While some may be annoying and hopefully short-lived, readers should be patient and forgiving and let the Times keep experimenting until it eventually arrives at workable solutions. If brilliant campaigns like the Mac/PC ads are any indication, the future is solid for online advertising. I also credit the Times for raising its prices. I haven’t a clue if this will work long-term, but at least they’re aggressively trying to figure out what to do with their business to stay solvent.

• What is sure not to work, however, are weak attempts to launch new publications that are aborted before issue #1 even hits the street.

• As if more evidence is needed, Pew just released a new study showing how badly newspapers dropped the ball with online classifieds. This news comes just as online employment classifieds are beginning to rise once again.

Taking a few weeks off from posting the latest headlines concerning the plight of the dailies has created a massive backlog of items to list. I am not sure if the pace of noteworthy events is accelerating or if it just seems that way due to my short hiatus, but I have about 3 blog posts worth of items to try to get through this week, so here’s the first batch:

• The saga of the Boston Globe continues, with growing acrimony between management and the unions.

• Global readership of newspapers continues to rise, and readership of and traffic stats surrounding newspaper websites continues to lend hope that there is an answer for some dailies who are smart enough with their web offerings.

• News that Craigslist’s revenue will soon top $100M provides further proof that while the site has certainly played a role in stealing classifieds away from the dailies, the credit the site receives in the mainstreams press’ coverage of the death of the dailies is massively overblown.

• Given the recent public statement from Google that they will not be the savior for newspapers, perhaps Apple will step in to carry the day. Or maybe it’s the gaming industry. Or maybe it’s the oft-mentioned ‘user-generated content’ that is helping Hearst’s TV station sites.

• Newspapers are finally catching on to the power and appeal of online video. It seems to be working for Philly.com.

• What a shock! Sam Zell might lose control of his not-so-beloved Tribune. I hope the holders of the $8.6 billion in Tribune debt have fun with their new prize.

• For a preview of what’s coming for almost every single major metro market in the U.S., check out the battle in San Diego between a non-profit online news company (Voice of San Diego), a local for-profit online news site (San Diego News Network), and a cratering daily (San Diego Union Tribune) that was purchased by a private equity group with no experience in publishing primarily because of the daily’s real estate holdings. (Sounds pretty similar to the situation in Minneapolis, although we’ve swapped the local online-only, for-profit website for another daily over in St. Paul).

• True/Slant, the latest entrant into the for-profit, online news & journalism fray offers another possible glimpse into the future of online journalism.

• Right on the ball just like they were in accurately assessing credit risk in the housing, mortgage, and banking sectors over the past decade, Moody’s has released a report on the daily newspaper industry. In the report, John Pucalla writes:

“Ultimately, we expect the industry will need to reverse the vertical integration strategy through cross-industry collaboration and outsourcing print production and distribution processes,” said Puchalla. “Although newspapers may lose some of their in-house control over press time, they would also release resources to beef up investment in content and technology.”

In English, that means newspapers are over-leveraged, crippled by unions, and suffering tremendously due to chronic under-investment in value-added journalism and online technology. What timely and prescient insight.

• In a non-daily related story, the Computer History Museum has posted two fascinating documents that provide some visibility into the earliest days of Apple. These should be heartening for every entrepreneur and early-stage company that’s had to make use of their magic crystal ball to gaze into the future with perfect clarity.

The tectonic shifts transforming the media and advertising landscape have always been fascintaing to me a stand as one of the central areas of focus of this blog. And while the earthquakes and volcanos along the fault lines are worthy of the headlines they grab, I am equally intrigued by the smaller events and more subtle (and not always so subtle) tensions that are constantly taking place as the traditional media plate gets subducted underneath the new media plate. This subduction zone seems to be generating peak activity these days (I’ll save the record-length list of story items for another post) and has now even been put to music. Mad Avenue Blues is a little long, but for anyone in the media, advertising, search, web, or tech/software business, it’s worth watching in its entirety.

(Thanks Lief for the link)

One of the most frustrating experiences I have with newspaper sites is trying to find a story on a newspaper’s website that I just read in the print edition. It happens quite regularly that I will read something interesting (I still read 3 newspapers a day) and decide that someone I know would benefit from reading it, too (and who most likely doesn’t read a newspaper every day). So I’ll go to the newspaper’s website to find the URL for the story and at least 30% of the time, the search results will not return the story that I am looking for (and I always take the time to type in the exact headline of the story from the newspaper that day). I then usually search on Google by typing in the newspaper name and the headline, and the first result is invariably the story that I am looking for.

It happened again yesterday with a story in the WSJ about applicant tracking systems. The story I read (here) was entitled “Resume Overload” and the search results on WSJ came back as follows:

Google’s search results returned the following results:

The story I was looking for was the FIRST search result.

The New York Times is no better. I recently searched on their site, again using the exact headline from the story I was looking for, and got the following results:

How the NYT’s and WSJ’s search functionality on their own sites can be so awful as to not return a decent search result is beyond me, but it’s further proof (as if anyone needed more) that the newspapers are completely ill-equipped to climb the hill online that they need to climb in order to have any chance of competing. It’s all the more laughable in light of the recent flap that all the newspaper moguls (Rupert Murdoch included) are making about shutting their content off from Google. Were Rupert Murdoch and Dean Singleton to make good on their threats, not only would their site traffic plummet, but no one would ever be able to find anything to read on their site given their horrendous search functionality. If it wasn’t so annoying, it would be comical how pathetic the search functionality is on newspaper websites.

From ‘Newspapers & Technology’ Dateline newsletter:

2 more publishers file for bankruptcy protection

American Community Newspapers Inc.’s bankruptcy could cost Gannett Co. Inc. hundreds of thousands of dollars.
Gannett’s printing group, owed $273,000, was listed as ACN’s largest unsecured creditor, according to the filing. ACN filed for bankruptcy protection April 28, citing a weak advertising market, according to Gene Carr, ACN’s chairman and chief executive officer. The Dallas-based publisher prints more than 80 newspapers — primarily weeklies — in four markets: Dallas, northern Virginia, Minneapolis-St. Paul and Columbus, Ohio. The firm said it had obtained $5 million in debtor-in-possession financing. The publisher listed assets in the range of $50 million to $100 million and debts of about $107 million.

Meantime, the family-owned Columbian Publishing Co. in Vancouver, Wash., filed for bankruptcy protection in order to address credit issues with the Bank of America. The company borrowed money from the bank to finance a new building in downtown Vancouver. According to filings, CPC owes $17 million to BofA as well as other unsecured creditors.

CAN and CPC are the sixth and seventh newspaper publishers to file for bankruptcy protection, following Tribune Co., Philadelphia Newspapers LLC, the (Minneapolis) Star-Tribune, Journal Register Co. and the Sun-Times Media Group.

The decimation continues….