Thursday, January 28, 2010

Will Web take legals too?

My slap-to-the-forehead, Homer Simpson "D'oh!" moment occurred this morning at a news conference at the National Press Club in Washington, D.C.

The realization was this: that newspapers could lose their lucrative legal notices to the Web, just as classified advertising sales have been siphoned off by the likes of Craigslist and Monster.

The occasion was a news conference at which Geoffrey Cowan and David Westphal released a report from the University of Southern California's Center on Communication Leadership & Policy detailing government's long role in subsidizing commercial news.

Titled "Public Policy and Funding the News," the report traced back to Colonial times the postal and tax breaks that still benefit newspapers and magazines. "Government has always been deeply involved in journalism," said Cowan, director of the center and dean emeritus of USC's Annenberg School for Communication & Journalism, which hosts the center.

The report grew from a desire to dispel the myth of a separation of press and state, in order to encourage debate on whether new forms of assistance should be considered now, a time Westphal characterized as "this critical moment for the news industry." A longtime journalist with the McClatchy chain, he is an Annenberg executive in residence.

But government support is declining. And while the loss of the subsidies isn't the primary problem faced by newspapers -- loss of circulation and advertising revenue is -- "government support represents a critical element of economic survival," according to the report.

Take legal notices.

They're the ugly-to-the-eye, hard-to-read ads that by law must be put out for all to see: foreclosures, zoning board meetings, divorces, requests for proposals, invitations to bid. For small community newspapers, they represent 5 percent to 10 percent of annual revenue; for larger papers, perhaps 1 percent. But they are a nearly guaranteed stream of advertising sales that makes papers jockey for the business.

Indeed, according to the USC report, they pitted the likes of The Wall Street Journal against Virginia regional newspapers last year in a fight to print local legal notices, a battle that wound up in the courts.

(Today's classified section of The Washington Post also provided ample evidence of their value: most of the 14-page section was legal notices, the bulk of them notices of foreclosure sales. The Post charges a per-line rate for the ads that can range from $7 to $11 daily, depending on frequency. Ka-ching!)

But the newspapers' hold on legal notices is waning as bills pending in 40 states would allow the government and private entities required to post them to shift their business to the Web.

Newspapers are fighting the push online with editorials and informational campaigns organized through the Public Notice Resource Center, which many of the state newspaper associations have joined. They see the loss of legals as a hit not only to revenue, but also to the public's right to know.

"D'oh!" I say to that, too.

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