By Peter M. Zollman

NAPLES, Fla. — “An optimist and two pessimists from the newspaper industry got together …” — sounds like the start of a bad joke.

With the punch line being something along the lines of, “There’s an optimist left in the newspaper industry?”

Maybe it sounds like a joke, but it was actually a panel discussion at the Southern Newspaper Publishers Association “News Industry Summit” held here this week.

The pessimists?

Jim Moroney, EVP of the A.H. Belo Co. and publisher / CEO of The Dallas Morning News, and Doug Franklin, EVP of Cox Media Group, which oversees Cox Newspapers, Cox Television and Cox Radio.

… and to be fair, they weren’t entirely pessimistic. Perhaps “realists” is more like it.

The optimist?

David Black, president and CEO of Black Press, which operates more than 150 tiny and small community newspapers, primarily in western Canada and Washington state but also including the Akron (Ohio) Beacon-Journal and the Honolulu Star-Bulletin.

It made for a lively discussion.

“Papers serving (markets with) populations of up to 1 million people have a rock-solid future,” Black said. “In larger cities, the major metros need to make adjustments.

“Most of it” — circulation, advertising revenue, classifieds — “is coming back. … I think most of our revenue will be there, and certainly we can cut costs sufficiently” to operate profitable businesses, Black said.

Not so fast, argued Franklin and Moroney.

“I don’t believe that classified in newspapers is coming back. Classified in newspapers was an opportunity to create the most efficient market,” said Moroney. “The Internet is a much more efficient market. It is a better mousetrap.”

Franklin, whose company recently sold all of its community newspapers except those affiliated with its remaining four metro dailies, said its small- and medium-size business advertisers now list Google as their No. 2 advertising tool in terms of effectiveness, adding, “We think by next year it will be No. 1.”

Moroney and Franklin agreed that newspapers should get out of the printing and distribution business if at all possible, and become strictly content production and advertising sales companies. Franklin noted that Cox saved millions of dollars when it outsourced the printing of The Palm Beach Post to the nearby South Florida Sun-Sentinel, which was previously an arch-competitor. In Dallas, Moroney said, the Morning News will generate 8 percent of its revenue next year through its commercial printing operations, 56 percent from advertising and 36 percent from circulation sales – a radical shift from the 80 percent advertising and 20 percent circulation revenue mix that’s pretty standard among U.S. newspapers. Even so, he said, if he could get out of the printing and distribution businesses he would.

Black said the newspaper has to compete with Craigslist.

“I think we’re all going to have a free-classified site. We’ve got to get on that.”

It has to be owned by all newspapers, Black said, and promoted heavily by them to compete with Craigslist. The business model would be upsells into print. (He made no mention of a now-dead initiative by the American Press Institute and the Newspaper Association of America  to launch an industry-wide classified site for “stuff” ads, even though API CEO Drew Davis was in the room.)

Franklin, who argued for lifting of the U.S. regulation against cross-ownership of newspapers and television stations in the same market, said he expects continuing consolidation among major media companies – all advertising-supported businesses, not just newspapers. He also said newspapers will be selling a lot more than their own newspaper and online services in a few years to survive.

“We are known to our advertisers as their local solutions,” he said. “We may become resellers of a lot of things. I think we’re going to have a much more diversified list of things to resell – and we get a cut,” he said. 

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Oh, and by the way: There are lots of optimists left in the newspaper industry. Several of them attending the SNPA conference. (Including me, if you wish to consider me part of the “newspaper industry” — an argument that could go either way.) But it certainly felt like a funny joke was coming on after that one.