A Major City Without a Newspaper? It Might Happen.

Another major newspaper is in financial trouble. As pointed out in the World Vue Letter post dated February 12, 2009, newspaper profits are dropping rapidly and major changes are taking place in the mass media industry. Now comes word that the San Francisco Chronicle may possibly close its doors. That which was once unthinkable might happen. What's going on?

The San Francisco Chronicle was purchased by the Hearst Corp. in 2000 for $600 million. Hearst owns Cosmopolitan, Esquire, Good Housekeeping and has an investment in ESPN. Since then the Chronicle has been a financial drain. According to The Wall Street Journal, Hearst will seek significant cost-savings within weeks or possibly sell the newspaper. If it decides to sell and cannot find a buyer quickly, the Chronicle will shut down. That means San Francisco will be the first major city without a major daily paper.

Note also these trends cited in the World Vue Letter's February 12 post :

• The Tribune Company, owner of the Chicago Tribune, Los Angeles Times, and Los Angeles television station KTLA, recently filed for bankruptcy. It also owns the Baltimore Sun, South Florida Sun-Sentinel and the Sentinel of Hartford.
• The Christian Science Monitor has ceased publishing in print, relying solely on electronic publishing.
• The average number of viewers watching network TV is dropping. TV station revenues dropped 8% or more in 2008.
• Media payrolls are declining with only the biggest names earning more pay.

Since December, three other newspaper organizations have filed for bankruptcy:

• Philadelphia Inquirer and Philadelphia Daily News (both owned by Philadelphia Newspapers, LLC);
• Star Tribune - Minneapolis; and
• Journal Register Co. - owns 20 daily newspapers in Connecticut, Michigan, New York, Ohio and Pennsylvania.

Why all the troubles?

The problem is declining display ad revenues as the economy has slowed, plus the loss of classified ad revenues to Internet-based services such as Craigslist. Classifieds traditionally have been highly profitable. Some pundits also point to the fact that newspapers unwisely gave away access to their product, the newspaper content, for free on the Internet. Many people now turn to the Internet as their primary news source. Newspapers have tried to keep their readers by posting content for free in order to compete. But it's an economic model that is not sustainable.

Now there is a growing sense that newspaper editors and publishers have to start asking themselves some new questions. It's not just a case of asking how to charge readers for Internet access. It's more a matter of determining what content can a newspaper create that readers will want to buy. It's a very different perspective, one that reminds us how markets drive innovation and how it is the consumer who defines value.

Perhaps we can expect to see some very different types of headlines and reporting in the near future.

Quick Vue: Here's a more in-depth look at the newspaper industry including interviews with representatives of the San Francisco Chronicle.

Sources for this post included MSNBC.

Time to Immigrate!

Can immigrants helps us re-energize our economy? The fact is, immigration may be key to attracting the talent needed to engineer a new economic growth wave. Consider what's happening in central Ohio.

Per a report from the Columbus Dispatch, about 40,000 foreign-born residents of Franklin County, in central Ohio which includes Columbus, arrived in the U.S. during the past eight years. Compared to the general population, members of this group tend to have:

• Higher-education degrees;


• Higher average income; and


• Lower unemployment.

Who is in this group? It ranges from refugees to highly-educated persons here on special visas.

• About 39% are from Asia;
• 23% are from Latin America; and
• 21% come from Africa. This includes a large number of Somalis who fled a civil war that erupted there in 1991.

Lee Williams, director of the International Institute of Akron, Inc., which helps immigrants settle in Northeast Ohio, has said that the immigrants tend to have a "wonderful work ethic, they love overtime, and they are very loyal."

That's a winning combination, one our country has seen before when large numbers of immigrants came to the U.S. to build better lives.

Quick Vue: The two videos below celebrate the first person to immigrate to the US. through Ellis Island. Annie Moore, a 15 year-old from Ireland, was that person. The first video is a trailer for a film about Annie Moore made by 11 year-old students in Cork, Ireland. The second video features the Irish Tenors singing Isle of Hope, Isle of Tears, which also tells Annie's story.

Sources for this post include The Plain Dealer and Columbus Dispatch.

Open for Business?

From The Plain Dealer, Cleveland, Ohio: "In its heyday, Cleveland attracted immigrants like a magnet. If it wants another heyday, Cleveland needs to do so again."

From Shekhar Gupta, editor of the Indian Express newspaper (Mumbai and New Delhi): "All you need to do is grant visas to 2 million Indians, Chinese and Koreans." "We will buy up all the subprime homes. We will work 18 hours a day to pay for them. We will immediately improve your savings rate--no Indian bank today has more than 2 percent nonperforming loans, because not paying your mortgage is considered shameful here. And we will start new companies to create our own jobs and jobs for more Americans."

The above quote is from an article by New York Times columnist Thomas L Friedman. Mr. Friedman wisely makes the case that immigration can prove to be the best bailout.

There is a saying in business: You've got to build the brand. It means expand on the things that made your business successful. Expand on your good name and reputation.

Even non-profits are now doing this creatively. Examples:

• New York's Metropolitan Opera broadcasts live performances to movie theaters around the country.
• The Cleveland Clinic recently entered an agreement with philanthropist Larry Ruvo to run a new brain research institute in Las Vegas.

The U.S. has a "brand." It is a political and economic system that encourages innovation and free enterprise like nowhere else. Talk all you want about how other parts of the world have been growing, but the U.S. is still the premier venue for building wealth. And all eyes are on the U.S. for answers to the current economic malaise.

It's time, again, to build on the U.S. brand and sharply increase the number of visas we're willing to issue. It's time to announce that the U.S. is "Open for Business".

Are we ready?

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Worth repeating from the post dated January 29, 2009:

"Small businesses created some 60-80% of net new jobs during the past decade. Companies with 500 or fewer people employ over half the country's private sector employees."

Special Review: Less Than a Trillion Dollars

Now that the stimulus bill is a reality, here's another look at a post originally dated January 13, 2009 . It helps put a trillion dollars into perspective, though the stimulus is "only" about $800 billion. Worth noting are the following concepts that can help you visualize the large sums of money at stake:

• The stimulus is approximately equivalent to what the federal government spent, in 2008 dollars, to build the interstate highway system. (Econmists like to compare federal expenditures in terms of both inflation-adjusted dollars and as a share of GDP. That said, were construction of the highway system to begin today the cost, per my back-of-the-envelope guess, would likely be $2.4 trillion or more.)

• If you were to stack a trillion dollars worth of $1,000 bills on top of one another, the stack would be 63 miles high.

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Is a Trillion Enough?

Is an economic stimulus of about a trillion dollars enough? No, says Paul Krugman, last year's winner of the Nobel Prize in Economics. Here's how to think about a trillion dollars. For starters, it looks like this expressed as a dollar number.

$1,000,000,000,000

It's a big number. Too big to comprehend, really. So here is how you can put it in context. Below is a list of six major, and notable, U.S. expenditures from the past. The cost for each is expressed in 2008 dollars.

• World War II - 16 million troops; 4 years - $4 trillion


• Interstate Highway System - 35 years of construction - $800 billion


• New Deal - public expenditures during the Great Depression - $500 billion


• Space Program - Projects Mercury through Apollo (Moon landings) - $140 billion


• Panama Canal - construction cost; opened in 1914 - $7 billion


• Louisiana Purchase - 1803 - $261 million

But it's not enough to convert costs to 2008 dollars. Economists also look at how the expenditures compare to GDP (Gross Domestic Product - the total market value of goods and services produced each year). When viewed this way, the above expenditures are much, much higher. The cost of World War II, for example, equates to $17 trillion when taking GDP into account. The Louisiana Purchase, which looks relatively inexpensive in 2008 dollars, actually equates to over $400 billion when viewed in the context of its share of GDP.

So, Mr. Krugman may have had a case when he recently wrote in The New York Times that President-elect Obama's "...prescription doesn't live up to his diagnosis. The economic plan he's offering isn't as strong as his language about the economic threat. In fact, it falls well short of what's needed.

Perhaps so. We'll have to see. In the meantime, we'll all have to get used to thinking about what a trillion dollars looks like.

Quik Vue: Here are more ideas for how to think about a trillion dollars.

Sources for this post include The New York Times, Plain Dealer and Wall Street Journal.

Remember the Buggy Whip?

If you do you're older than just about everyone. The buggy whip was used to control horses. As cars replaced horse-drawn wagons the buggy whip largely dropped out of sight. Today the term refers to things that have become outmoded, particularly in cases where the manufacturer or provider doesn't see it happening until it's too late. Do you see any "buggy whips" around you?

One is the recording industry. With the advent of CDs and then iPods and iTunes, the industry was changed radically. Profits for record producers, once soaring, have tumbled.






















In his book "Appetite for Self-Destruction," author Steve Knopper asserts that the music industry erred in trying to protect a business model that no longer worked. Consumers had circumvented the traditional music distribution system thanks to file sharing technology. Rather than find ways to incorporate new technology into their businesses, producers sued their customers. The strategy failed. Consumers won.

At a time when the economy is having trouble, the story reminds us of how the marketplace continues to shape the future, often in exciting ways.

Another example is the media--specifically television and newspapers. Profits are dropping rapidly. Note these trends:

• The Tribune Company, owner of the Chicago Tribune, Los Angeles Times, and Los Angeles television station KTLA, recently filed for bankruptcy.
• The Christian Science Monitor has ceased publishing in print, relying solely on electronic publishing.
• The average number of viewers watching network TV is dropping. TV station revenues dropped 8% or more in 2008.
• Media payrolls are declining with only the biggest names earning more pay.

Quick Vue: So, what does the future hold? Here are two videos that provide some clues. The first will introduce you to a new way of reading newspapers on-line. The second video features media experts Jeff Jarvis, founder of Entertainment Weekly, and Andrew Heyward, former president of CBS News.





Sources for this post included The Wall Street Journal, article by Jeremy Philips.

Dance if You MUST!

Lar Lubovitch is one of the nation's top choreographers. The Lar Lubovitch Dance Company recently celebrated its 40th anniversary. After a recent performance he answered questions from audience members. Below are a few things he said that are instructive.


You might expect Lar Lubovitch to have a flamboyant personality. After all, for over 40 years he has pursued a profession which emphasizes artistic body movements and athleticism. In his early years he trained with the likes of Martha Graham. Yet he has a surprisingly low key style. He has the precision-oriented bearing of a mathematician for whom every word counts. When he took questions from audience members I was struck by the substance of his answers. He comes across as someone who really knows who he is and is comfortable with that.

Here are three things he talked about that you may find instructive:

1. Know thyself. Dancing is extremely challenging physically. Most dancers retire at a relatively young age. Mr. Lubovitch retired earlier than most. He came to realize that he did his best dancing in the studio rather than on stage. He was too self-conscious in front of audiences. Yet other dancers, he observed, thrived on stage and did their best work. "I realized that I should be a choreographer and not a dancer," he said. So he focused his energy on choreography and created one of the most renowned dance companies in the world.

2. Less is more, but start with more. For Mr. Lubovitch the purpose of dance is to put body motions to music. When he designs a new piece he begins by memorizing the music. In his mind he imagines all kinds of dance moves, more than could ever be performed within the confines of time and space. Then he distills all that to a small subset of ideas. The end product is an artistic work more modest in scale than his original creative output. It's focused and energized.

3. Do what you know you must. One audience member asked Mr. Lubovitch what to say to someone who is thinking of pursuing a career in dance. He responded that such a decision is highly personal. Dance as a career is a difficult choice because it is so highly demanding physically and offers low pay. "One doesn't really choose to dance," he said. "You dance because it is something you HAVE to do." Such passion and commitment can bring about tremendous results, as Mr. Lubovitch has demonstrated.

Quick Vue: Here is a look at the Lar Lubovitch Dance Company during a recent performance.


Sources for this post included Rocky Mountain News, article by Marc Shulgold.

A Daschle of Concern

Tom Daschle...Nancy Killefer...Timothy Geithner...Bill Richardson...What do thy have in common?

All were nominees for cabinet positions in the Obama administration and each had a serious flaw missed by the administration's vetting process. Is it a fluke? Or is it a symptom of something more serious ?

In the meantime, Iran announced that it has launched a satellite. This event is Sputnik Part II, a grave warning that big problems lie ahead.

In 1957 the Soviet Union launched Sputnik, the world's first satellite. It was a wake-up call for the U.S. A fierce rival had taken the lead in space exploration. Americans quickly developed a deeper appreciation for teaching math and science. We began a daunting space effort that was first to put people on the Moon. With our can-do, forward looking attitude, we prevailed.

What about now? Iran's announcement is a new call to action, heightening concerns about possible nuclear weapons in the hands of Iran's leaders. These are the same people who equip others to kill and maim our soldiers in Iraq. But our economy is struggling and our new president is having to deal with some early political stumbles.

Can we respond effectively? Of course! But to be sure, the world is watching. We have enemies. And right now I'll bet they're wondering how long it will take for us to focus and how vulnerable we may be in the meantime.

Take just a few minutes to look at this CNN report on Sputnik. The broadcast aired in 2007 marking the 50th anniversary of Sputnik's launch. Note the reactions of people at the time (1957). How different--or similar--is our situation today?

Quick Vue: The launch of Sputnik and its profound impact on the world.

Sources for this post include The Wall Street Journal, New York Times and CNN.

Do You Suffer from "Goldmansachs Head"?

Columnist Peggy Noonan has come up with a new illness. She calls it "Goldmansachs Head," a take-off on the Wall Street bank named Goldman Sachs.

"When you have Goldmansachs Head, the party's never over," she wrote in a recent Wall Street Journal column. "It is the delusion that the old days continue and the old ways prevail and you...just keep rolling along."

She takes corporate executives to task for this type of thinking. Evidence the recent large bonus payouts that caught much media attention. And she also points to the Democratically controlled House of Representatives. She says the stimulus bill it passed was about "not knowing what time it is, not knowing the old pork-barrel, group-greasing ways are over, done, embarrassing. When you create a bill like that, it doesn't mean you're a pro, it doesn't mean you're a tough, no-nonsense pol. It means you're a slob."

"That's how the Democratic establishment in the House looks, not like people who are responding to a crisis, or even like people who are ignoring a crisis, but people who are using a crisis. Our hopeful, compelling new president shouldn't have gone with this bill. He made news this week going to the House to meet with Republicans. He could have made history by listening to them."

Perhaps we should all be wondering just how pervasive this new "disease" really is.