The newspaper business is in freefall. An ailing international economy, rocketing paper and fuel costs, dwindling ad revenue – all these factors have combined to create a perfect storm that seems likely to swamp the once-mighty industry. In 2007, US newspapers reported their worst sales decline in history as print revenues fell 9.4% to $42.2 billion – and that’s the good news.

As old readers are literally dying off, new readers are not rising to replace them. While over 70% of both older and younger internet users regularly read the news online, the majority of kids 12-24, according to the Center for Digital Future, will never read a newspaper – the kind you can hold in your hands. In the future you may never again hear someone say, “Hand me the sports section.”

But that may not be a bad thing.

What I have found in my 25 years of experience is that the newspaper business is all about change and those that don’t evolve are doomed to early extinction. (This is why Alan Mutter, a former editor at the Chicago Sun-Times and the San Francisco Chronicle, calls his blog “Reflections of a Newsosaur” – though Mutter left the newspaper business in 1988 to work in the digital world of Silicon Valley, a classic example of a “newsosaur” ready to evolve.)

I call those readers who grew up on newspapers, the kind you can hold in your hand, analogs. Their comfort zone is print and paper and they are most comfortable with web sties or any other digital publication that mirrors the print experience. They like their reading experience to be linear and feel right at home with online publications like Indigo and Flyp. (More on these groundbreaking publications in our site at: Dynamic Media)

Digital immigrants are what I call those readers who began reading print and, over time, migrated to the internet. They are equally comfortable reading their favorite newspaper in its print or web incarnation, and have grown accustomed to receiving news updates via email, RSS feed, Twitter and so on. They tend to be any age between 30 and 50, just as analogs tend to be older. They are new here but have learned the native dances.
Digital natives, on the other hand, grew up in this new landscape and they do not speak print. Hand them a newspaper and they would be as puzzled as an aborigine would with a can opener. For them the mouse is an appendage, and they demand a lot of their digital reading experience. For a story to engage them, they must be able to interact. It must have a level of playability as well as usability.

There are three postures you can take in the face of change: You can adapt to change, you can adopt change, or you can exploit change. As newspapers have come to accept that the meteorite is, in fact, heading for their planet, many have adapted to change in predictable fashion. They have reduced the size of the paper itself, saving on costs. They have laid off workers on both the business and the editorial sides. And they have closed bureaus and eliminated coverage, in some cases outsourcing whole beats by using wire services and other news providers and aggregators. (The Wall Street Journal was shrinking long before Rupert Murdoch bought it, the LA Times has scaled back its international coverage under new owners the Tribune Company, and for an example of a print publication reducing costs by “downsizing” its staff – well, pick almost any paper or magazine you like.

Some newspapers have adapted to change by being smarter with their resources, and providing more readers with less, in a sense. This is the long-tail model, first coined by Chris Anderson in the pages of Wired and adopted most obviously by companies like Amazon and Netflix: small quantities of a particular product (ie, books and movies) are made available to a large number of consumers. We will discuss how this long tail idea can be applied in the newspaper business in greater detail in Chapter TK. While some might argue that there is nothing new about this model of inventory distribution, it has rescued more than one industry and the newspaper business is uniquely qualified to take advantage of it.

In fact, this is how we can exploit change – not just by surviving the storm that has buffeted our business but by actually using it as a spur to provide greater services to our customers, our readers. By streamlining production and making more efficient use of designers and reporters through the use of templates, by taking advantage of digital technology to produce an analog product, we are actually looking forward – and planning on greater profitability – instead of merely making do in the face of cataclysmic change.