The <i>Boston Globe</i>: Arrogance With Blinders On Equals Failure.

The Editors of the Boston Globe, with the massive sense of self-worth and entitlement that is seemingly a trait of all failing newspapers, led off the Saturday paper with a massive front page whining that its Parent Company was threatening to close it, some say, in 30 days if the Globe's unions do not immediately agree to concessions.

Today, they followed up with another gem:
"Threat To Globe Triggers Emotions."

The Globe is losing over $1,000,000 every single week. It could be losing close to $2,000,000 a week pretty soon here and its owners, who basically have already written off the billion dollars they paid for it in 2003 are less than thrilled.

The Globe, its employees, writers and editors, completely lacking in any sense of self-perspective, are searching the city for people to support them.

Good luck.

The Globe is not failing because of the recession, or because of the 'advertising climate' - it's failing because when the whole world went left, the Globe continued to go arrogantly to the right and continues to this day. It didn't help that its reporting was turned into absolute crap by newsroom cutbacks.

In 2005, I was working on a corporate turnaround project for a large business here in Boston. In 2004, they had spent $3,000,000 advertising in the Globe, it was too much money for too little return so we proposed to the Globe that we would spend one million dollars and we wondered what rate discount we would receive

The answer was zero, that's right, zero. Rack rates, which, as the subscription numbers were falling, were being raised so we were going to pay more, receive nothing and like it. Well, let's just say we passed on that opportunity.

Every six months since then, the Globe has reported a steady decline in distribution numbers. In their wisdom, they did what every business facing declining sales should do, they raised their news stand prices and then they raised them again. Now, you can pay up to $1.00 for your copy of the Globe. It's just so smart.

All around the country newspapers are failing.

They are failing because the product they deliver is no good for their readers, so their numbers are down. They are failing because their advertising model doesn't work for businesses to support them.

They are also failing because of the bursting of the asset bubble and cheap credit. I have been involved in some discussions with groups looking to purchase some of the newspapers that are for sale out there. The amount of debt these papers have amassed is staggering. In one case, a small newspaper with 150,000 subscribers had $800,000,000 in debt. It was shocking.

Of course, newspapers are failing because of sites like this and many more new media means of distributing news are developing, and in the end, here's the rub.

Newspapers are in the news business, not the paper business. If you took the online advertising revenue from boston.com, you'd have a very strong business. But no, it can't support 200 deliverymen and women driving the paper around. It can't support the presses and the lifetime contracted workers.

The world changed, not now, but years ago, and the newspapers, like the auto companies, hung on not by improving their product, but by improving their ability to manage debt.

Eighteen months ago, right here, I predicted we would see one major city newspaper fail by the end of 2008. This year, we will see dozens fail.

From their carnage, new models will emerge. New means to advertise, new means of reading the news. The faster the transition occurs, the better.