Convergence Capital, Part 2

Part two of NPR's feature of the progressive business model of Lawrence's own World, Co. continues today.

Media analysts say circulation has stagnated at many papers, and younger readers are turning to other sources of information. Many media companies hoped that convergence -- combining television, print and online resources -- would help them survive. Instead, many companies have lost money on online journalism.

In Lawrence, Kan., Dolph Simons' Journal-World newspaper has taken ambitious news-gathering approaches to local issues. The company's efforts have sparked innovation, controversy -- and no small amount of envy within the industry.

Despite its steady circulation of just 20,000, the Journal-World has a staff of 44 -- and plans for expansion. That's due in large part to parent World Company's thriving subsidiaries, from Sunflower cable, which serves 80 percent of Lawrence homes, to Sunflower Broadband, with 50 percent of the market.

The World Co., privately held by the Simons family, has accepted a single-digit profit margin for its newspaper. Rob Curley, the top news editor in Lawrence, says sometimes the Web sites just break even.

Publicly traded media companies say they're pursuing similar strategies, most would not accept the low profitability that could follow. For instance, the Gannett Company, with 102 daily newspapers and 21 television stations, seeks minimum profit margins of 20 to 30 percent for its newspapers.

While the impact of World's approach is uncertain, the company is reaching forward, podcasting music programs and sending text to cell phones. And it's experimenting with video, sending sports clips and news to wireless devices.

Listen to part two by clicking here.

Comments

[Phil Freeman]

I also heard the NPR report on Lawrence. It is indeed hopeful that the newspaper will accept single digit profits and focuses on the online side. However, I think that there is a disturbing underlying factor; this is that the Journal World has a virtual monopoly on locally produced media in Lawrence. They own the newspaper, the website, a local TV station and also own the local cable franchise, together with the broadband that goes along with it.

How would we feel if Rupert Murdoch (or Michael Moore) was the majority stockholder in the Journal World? I believe that it is dangerous when media outlets are concentrated in too few hands. We are already seeing the results of the corporate media's lack of journalistic backbone as evidenced by their total failure to question the phony intelligence produced by the Bush propaganda machine that led us into war.

It is good to celebrate the commitment to new media but we also need to look at who is doing it and the costs that may be incurred.

[Wilson Miner]

Let me open with a caveat that I work for the online division of the World Company, so I'm hopelessly biased in this case.

Phil, I think you echo a pretty common sentiment in Lawrence (and one that I share from time to time), that what the JW does is great and all, but isn't it kind of scary that they own all the media outlets in Lawrence? I don't think this quandary is unique to Lawrence.

The entire media landscape is changing and consolidating in the same way, and we as consumers of media often have no choice but to put more of our trust in fewer organizations. In turn, we also have a greater responsibility as consumers to filter what we're exposed to more diligently and work harder to find (and create) more diverse sources of information.

We don't have 12 newspapers in one city anymore, but we do have unprecedented access to the unfiltered (and un-fact-checked) opinions and commentary from individuals and organizations. If I don't buy the story the news is telling me, I can find out what Tim Keel or, if I look hard enough, just about anybody else has to say about it. And if I have something to say on the subject (and even if I don't) I can find a forum to say it pretty easily. The "mainstream media" may be consolidating, but they're only part of the public dialogue. They may still drive the dialogue in a lot of places, and especially at the local level, but they're not the center of it anymore.

Does the Journal-World have a "media monopoly" in Lawrence? Maybe. But it's a pretty small one. And if they aren't doing it, who else is going to? Could Lawrence sustain two, let alone 12 newspapers? I for one, doubt it highly. Double for TV stations. The only reason Lawrence has a locally-produced TV news station in the first place is because the Simons want it to. If they put 6News on the auction block today, I doubt anybody would be interested in taking the reins (let alone the costs).

The fact is, a lot of the things that the Journal-World does that attract all this industry attention are only possible in a city this size because of that so-called monopoly. If you wanted to walk into Lawrence and start a cable company, or a TV station or a newspaper on your own, I wish you luck (and lots of generous investors). Shared staff, resources, costs and revenue across all three makes it a lot more feasable. You call it monopoly, they call it convergence.