…my pal Glenn Fleishman believes the paper’s online revenues, at the industry’s current low ad rates, simply can’t support a newsgathering staff of more than 10 or so people.

Of course, if the P-I were to go web-only with fewer than 10 percent of its current personnel, the resulting product would likely generate far fewer online readers.

My thoughts:

A purely online local-news venture is a far different beast from a printed daily with a Web presence. It will need to be conceived, designed, and nurtured (yes, that includes startup-period losses) as its own thang. For the P-I to evolve into such a product, it will need deep-pocketed owners willing to steer it through this morphosis without immediately, excessively chopping the staff (the P-I’s one valuable asset).

U.S. daily papers evolved, especially during the local-monopoly era of the late 20th century, as bland mass-market products intended to be everything to everybody. Online content is far more of a niche business.

Seattlepi.com would need to evolve into a niche operation—or several niche operations. That’s why I previously suggested the news/opinion, business, sports, arts, and lifestyle departments be treated as separate sites, with separate balance sheets.

And each of these sites (subsites, if you will) will need to establish a newer, more direct rapport with its audience. (The P-I has already done a lot of preliminary work in this regard.)

The business, sports, arts, and lifestyles subsites could each be run by a dozen or so journalists (including those unsung heroes, copy editors) with about the breadth and depth of coverage the print P-I currently enjoys in those departments.

What the Seattle Times used to call “General News” is different. It encompasses everything from politics and the environment to human-interest profiles and pictures of scenic sunsets.

It’s the part that would/will need to evolve the most in a transition to an all-online or predominantly-online news space.

More on this later.

But, for now, back to Fleishman’s main argument: Yes, online banner ad rates are too low to support professional team content creation. These rates will likely stay low for the near future; even after the general economy improves, marketers will still think cheap, and sites based upon unpaid or “aggregated” content are cheaper to operate than pro sites.

Pro news sites will have to stand out from the deluge if they’re ever going to command higher rates.

Cutting the reporting team down to the level of a small group blog would hurt seattlepi.com’s chief point of differentiation.

Keeping a daily print edition, even in a digest version, would help promote the seattlepi.com brand.

In any event, there’s going to be a monetary burn rate. In the early dot-com mania, there were plenty of investors, here and nationally, willing to lose money up front in order to build their brands. Is there anybody like that left today?

Meanwhile, the P-I and Times have shrunk their daily classified sections to a single page in large type. The last time the local dailies had only one page of want ads was during the nadir of WWII paper rationing.

Less than two years ago, the Post-Intelligencer’s Joint Operating Agreement (JOA) with the Seattle Times was last renegotiated. At the time, everyone said (and most everyone thought) the P-I was saved for at least another decade.

What happened between then and now? Only the perfect storm of the media biz.

Retail advertisers, who’d once been the papers’ biggest supporters, moved to direct mail (especially supermarket chains), to the Web, and to cable channels—at least those retailers who were still in business (unlike many indie merchants and strip-mall chains) and still spending money to advertise (unlike car dealers).

And then there’s Craigslist.

The nationwide free-classifieds site essentially killed off newspapers’ other biggest means of support. The Times and P-I each once had 10 pages of want ads each Monday-Thursday. Now they’re lucky to have two.

Online readership of news sites has exploded, especially during this past election season; but online ad revenues have risen far more slowly.

Publishers tried to cut costs in big and small ways. As an example, the Seattle Times (which runs all the P-I‘s non-editorial functions under the JOA) cut back on distribution to outlying counties. This hurt the P-I more, because it traditionally had a more regional reach than the Times.

So now we’ve got two “failing newspapers,” with no assurance that the putative “survivor” (the Times) can turn its fiscal fortunes around with true monopoly status. The Times will have the same costs that both JOA papers had heretofore shared. The only savings will come from having only one product to print and distribute each morning instead of two. And the end of the JOA’s profit-sharing arrangement doesn’t matter if there are no profits to cease sharing.

Leaving this aspect of the discussion for now, let’s get back to our main topic, saving the P-I.

Right now, Hearst execs say they’ll choose one of three options, sometime in March:

1. Shutter the operation altogether;2. Keep it going as a (much more thinly-staffed) online entity; or

3. Sell it to a willing taker, if there is one.

Hearst is a very private, family-run enterprise. There’s no telling how they’ll act. They could turn down a healthy buyout offer and shut the place down if they simply want to.

So instead of trying to predict what they will do, let’s parse out what they might do.

Option 1 would be a relatively simple, quick move. Pay unionized staffers their severance packages. Invoke the death clause in the JOA. Settle any final monies owed by or to the Times. Donate the globe to MOHAI (which already has the pre-1970 P-I photo library).

It’s something a pubilcly held corporation might do to instantly revive its stock price.

Hearst isn’t publicly held.

And that specific part in the JOA’s original death clause you might recall, the part that would have paid Hearst a share of any Times profits even if the P-I dies? That was removed in the 2007 revision. A dead P-I isn’t worth more than a living one.

Option 2 would keep something of the P-I legacy and presence alive. Depending on how the lawyers work things out, it might be a JOA-ender, putting Hearst in full control of seattlepi.com’s destiny. (They’d have to hire their own ad sellers under this sub-scenario, but it’d be hard to sell fewer ads than the Times is doing these days on behalf of both papers.)

Option 3 would require a deep-pocketed ownership group (let’s not expect a single investor to try it) willing to shoulder the losses and perhaps wield the layoff axe while the reinventing goes on.

But such an ownership group could potentially keep a paper P-I going. And it might be willing to keep more P-I people on staff than a Hearst-owned online-only venture might. (I know, all these unknowns and hypotheticals…)

Coming Wednesday: What I, specifically, would do if I bought the P-I or worked for someone who did. (I know, I’m dragging this on, but it’ll all be worth it I promise.)

Last Friday came the horrible news that Hearst doesn’t want to run a printed daily paper in Seattle anymore, but would consider selling the Post-Intelligencer or turning it Web-only. Since then, several people besides myself have spoken out in favor of keeping the P-I newsroom going. Some have even offered more-or-less-vague ideas for making this possible.

Here are a few:

• First, the paper’s own Art Thiel explains why the P-I, as an ongoing info-resource, should stick around:”…The P-I always has been poor in staff numbers and rich in cantankerousness, light on editors and heavy on writers, mean when needed (and unneeded) and benevolent when least expected. Somehow this added up to a newspaper as exhilarating as it was exasperating.…

  “If ever there were a place where private wealth, invention, technology, emergency, opportunity and desire are in abundance for a new idea, it is here, now.

  “Even in a profound recession, some things cannot be surrendered..”

  In the Web comments to Thiel’s piece, “llachglin” nails the real reason newspapers around the country are in panic mode. It’s the advertising. It’s dropped, faster and fuller than most anyone expected.

• As we’ve mentioned briefly before, Brian Reich at WeMedia offers his own “Plan for the Seattle P-I“ based, so far, on re-organizational generalities: “A renewed focus on issues that impact the local community;” “explaining why, how, and what impact an event will have;” “look at all the ways to make money in the news space—my list includes selling content and advertising, providing research and insights, aggregating and syndicating everything;” “an increased role for local media in the community.”These prescriptions largely match those on a list by Edward Roussel, who runs the Web site of London’s Daily Telegraph: “Narrow the focus,” “plug into a network,” “engage with your readers,” “nimble, low-cost structure, “invest in the Web,” “shake up leadership,” and so on.
• At TechFlash.com (owned by the Puget Sound Business Journal’s parent), ex-P-I scribe Todd Bishop offers “Ten steps to save the Seattle P-I, and maybe the rest of the industry.” Bishop envisions a lean-n’-mean, locally-owned, online-only operation, with “a top technologist” and “a top Internet executive” on the payroll, but with much of the news-gathering outsourced to freelance “vetted bloggers,” whatever those are.

  On the same site, John Cook nominates “twelve techies who could help nurture and save Seattlepi.com.” Yes, the name of Paul Allen is predictably dropped. So is David Brewster, who’s already learned one way not to make money from online local news.

• Peter Kafka, writing on the Wall Street Journal’s All Things Digital site, agrees with some local pessimists that an online-only local “paper” couldn’t possibly turn a profit. Kafka asserts that seattlepi.com’s 2.6 million monthly unique visitors might be enough fo sustain a low-staffed site with a national niche audience (like, say, All Things Digital), but not a local general-interest site.However, Jeff Jarvis at guardian.co.uk offers grist for a potential counter-argument to Kafka. As Jarvis notes, the Los Angeles Times now claims it’s making enough money from online ads to support the paper’s entire editorial payroll (albeit one that’s almost half what it was a few years back):

  “I see hope: the possibility that online revenue could support digital journalism for a city. The enterprise will be smaller, but it could well be more profitable than its print forebears today and—here’s the real news—it would grow from there. Imagine that: news as a growth industry again.”

  At Brewster’s Crosscut.com, Bill Richards suggests profitable online local news is closer than a lot of people think, and notes that Hearst is already investing in Kindle-like digital reader products. Richards posits that Hearst might keep an all-online P-I and use it as a grand experiment in paperless news.

• And back at the P-I itself, editor David McCumber offers up his own take on the crisis:”It’s a fine mess we find ourselves in—but I’m not giving up yet. This newspaper is for sale. No, it may not be the most attractive investment around (What is the most attractive investment around? Your 401k? Your house? Yeah, right) but that doesn’t mean we won’t find someone who cares about Seattle and about journalism, and sees promise where others see only loss.

  “Might we go online only? Yes, that’s a distinct possibility too, although that operation would inevitably be much, much smaller than our current newsroom, which is to say it will inevitably have to feature other content besides the kind of journalism that takes significant people resources to execute correctly.

  “Right now, I’m determinedly positive, but I’m not completely unrealistic.”

All this quoting other people, and I still haven’t given my own P-I Rx. Tuesday, I promise.

Yep, it’s true. Hearst doesn’t want to run the Post-Intelligencer anymore, at least not as a printed daily paper.

If no buyer’s found in the next month or two, and none’s likely to show up, Seattle will become a one-newspaper town.

This is the moment many of us have tried to prevent for the past quarter century or more.

And I don’t know what to say or do about it.

The whole premise of the Committee for a Two-Newspaper Town is predicated on the presumption that big city daily papers are, at least potentially, profitable, at least if they’re protected from predatory monopolistic behavior. This notion has become increasingly doubtful, particularly over the past year.

I still don’t want a pure Seattle Times monopoly. That paper’s made many dumb right-wing moves over the years, in both its editorial pages and its “news” coverage. The P-I is better written, better designed, and much more attuned to this city’s working-class past and progressive present.

But what can be done now to save this voice?

• 
  Find a buyer for the P-I as is? The big media combines are trying to get out of some of the newspapers they do own. The industry’s business model is broken, maybe permanently. Sure, some local buyer(s) could step in; maybe even the same guys who didn’t rescue the Sonics. But in pro sports, you lose money with the prospect of making it back when you resell the team. In today’s newspaper biz that’s quite unlikely.
• 
  Buy the P-I and shrink it, to something whose losses would be small enough for rich owners (or a nonprofit entity) to sustain? A newsstand-only paper (no home delivery)? A compact tabloid format? A free weekly? There’s no limit to how small a paper can be shrunk. Just don’t expect a point of “core profitability.”
• 
  Go online-only? Again, nobody’s yet figured out how to make professionally-created online news pay its keep. But a lot of people are trying to figure that out. I worked last year with one such group.

I watched part of the Repo Men’s convention tonight on my TV, while my computer was playing the first-season DVDs of Mad Men. As you may know, that’s the HBO-esque drama (actually on AMC) about an ad agency in 1960 that’s so behind the times, it still devises whole major national product campaigns around two-page ads in The Saturday Evening Post.

Like that agency and the Mad(ison Avenue) Men running it, the Republican Party’s retail marketing effort has, for a generation, been about a lifestyle brand image that presumes a target market that’s so different from me, relentlessly pushing emotional buttons I haven’t got.

Note the convention slogan, “Country First.”

In the first half of the last century, “America First” was a slogan of guys like William Randolph Hearst who advocated keeping our butts out of other countries’ business when it didn’t directly affect us. In practical terms, the America Firsters helped delay U.S. involvement in both world wars.

Today’s “Country First” means the opposite. It means war everywhere, war forever, just as long as somebody else’s kids have to fight ’em.

But “Country” could also be construed as implying the rural/exurban, lily-white, never-existed fantasy utopia to which the GOPpers, from Nixon on down, have appealed. A place that’s no more real than the world within a ’50s magazine ad.

Meanwhile, several blogospherians have noted that the most outlandish (and probably false) rumor about Sarah Palin (that she’d faked a pregnancy to hide that of her own teenage daughter) resembled a storyline in the past season of Desperate Housewives. As you may know, that’s the ABC drama set in a refined residential suburb where fantasies of The Good Life violently clash with brutal reality on a regular basis.

I’ll leave it to you to decide which Republican Convention celebrities are more like which Desperate Housewives characters. (To me, Cindy McCain looks like a Bree but acts more like a Gabriele.)

Other thots: Fred Thompson’s speech was all banal as heck, but at least he delivered it professionally. (Though the only Lawn Order star I like is S. Epatha Merkerson, whom I’ll always remember as Reba the Mail Lady on Pee-Wee’s Playhouse.)

Same could not be said for George W. Bush’s satellite speech. NBC’s prime-time convention hour included an excerpt from Bush’s speech in D.C., without the applause audio from the convention in St. Paul. It just made this failed-head-of-state seem even clumsier.

A few of you might have noticed that the Obama campaign’s got a a really slick graphic-design department.

One of this design team’s major motifs is a solitary, serif capital “O.”

To many, that letter, presented in that context, is reminiscent of a magazine whose figurehead and co-owner is a big Obama supporter.

To others of us, it reminds of The Story of O, the classic novel and movie about bondage, discipline, submission, pain-as-pleasure, and the total surrender of one’s being to a figure of strong authority.

Damn, doesn’t that sound exactly like the ol’ Republican seduce-n’-swindle syndrome, from which Obama promises to deliver us.

Oh, and the time remaining until Election Day? Nine and a half weeks.

…I documented local sign structures that no longer bore any messages. Now, it seems there’s a whole Signifying Nothing city. It seems the city leaders of Sao Paolo, tired of their burg being ignored by the world in favor of the smaller but prettier Rio, took the bold step of banning billboards and most other outdoor advertising signs. They called it a move against visual pollution.

Of course, a city without advertising is still the same city, just a little less dressed. In this case, it’s a huge city with some stunning skyscrapers and civic monuments, but also a lot of non-cosmetic civic problems, many arising from an exploding population and poor urban planning.

…(see below), last Tuesday apparently saw the demise of Procter & Gamble Productions. This would also mean the end of sponsor-owned programming as a regular feature on the old-line broadcast networks.

When network radio was launched in the U.S. in the 1920s, networks would sell whole blocks of time to advertisers. The advertisers, in turn, would hire ad agencies to create and package both the commercials for the advertisers’ products and the shows that would surround the commercials. Procter and its soap-making competitors were the main sponsors of melodramatic daytime serials; thus the nickname “soap operas.” One of the first of these, The Guiding Light, was originally sponsored by Procter’s “P and G White Naphtha Soap.”

When TV came along, so did sponsor-owned programming. But TV’s higher production costs meant such ventures as The Colgate Comedy Hour and The Camel News Caravan faded from view.

But Procter & Gamble Productions (PGP) continued, like the stories on its shows. At its 1982-84 peak, PGP controlled 25 hours of network programming per week (more than Fox or The CW broadcasts these days).

Through PGP, P&G financed the shows and exerted both censorship and hiring control over them. But the shows’ actual production was subcontracted to ad agency Benton & Bowles. That agency disappeared some years ago in a series of global corporate mergers. Its TV-production unit was renamed Televest, then spun off as Telenext Media, which is apparently now an independent company.

(I know, this story’s getting to be as convoluted as any As the World Turns storyline.)

Anyhoo, on July 1, PGP’s name and logo disappeared from the ATWT and GL closing credits, replaced by that of Telenext. The shows’ official Internet message boards changed addresses from “pgpphoto.com” to “tnmphoto.com.”

Without any official notice of what, if anything, has changed, online message boards are rife with speculation.

Some users claim P&G must have sold off its interests in the shows. That wouldn’t be out of character with the company’s recent spate of portfolio-shuffling. (In recent years P&G’s bought Tampax, Gillette, Braun, and Clairol, while selling Comet, Duncan Hines, Crisco, Jif, and Folger’s.)

Of course, the credit change could just be a matter of semantics. But many of these message-board users have complained about P&G’s (mis)management of the serials, including drastic budget cuts on GL and its alleged cold feet concerning ATWT’s current gay-love storyline. Some of these users say they would like the shows to become independently owned.

Of course, even the deftest indie producer would have to be pretty clever to effectively confront the daytime-soap genre’s collapsing ratings and revenues.

But that’s a topic for another day. Tune in again.

…(really) has today’s vulvic-imagery-in-a-consumer-product image. It’s for margarine. Bearing the name of Lee Iacocca. You know the puns you’ll see in the item’s comment thread.

…by people with far too much time on their hands: A comprehensive guide to fictional breakfast cereals.

…hits Ed McMahon. It might take a miracle to keep him housed; either that, or winning a magazine sweepstakes.

…the first person to notice the similarities between the logo for this year’s Seattle International Film Festival and that of Mattel. You can tell it’s an Argentinian abstract-collage feature, it’s swell!

There was once a time when the Seattle Times wouldn’t run ads such as the following, at least not in a quarter-page size in the middle of the A Section. (OK, sure, they ran those scary “bed wetting” therapy ads back in the day, and those all-text ads for “The Lazy Man’s Way to Riches.” But not this.)

Political blogger Eric Alterman’s New Yorker essay on the apparently inevitable death spiral of the newspaper biz is a worthy encapsulation of the industry’s current conventional wisdom—that circulation and ad revenues are down for good, that they’ll just keep going downward, that no amount of “rightsizing” or firing people will bring papers back to stable profits, that ad revenues from papers’ Web sites can’t make up for collapsing print revenues.

In short, this CW goes, daily papers are doomed.

And with them goes not just the romantic image of the ink-stained wretch and Citizen Kane but the very flow of information a democratic society needs.

If reiterating this CW were all Alterman did in his piece, I wouldn’t bother discussing it here. But he also discusses some of this premise’s limitations.

One of the biggest such limitations has to do with the idea that the urban/suburban daily, as we’ve known it in our lifetimes, is the one (1) and only business model that could ever support serious, professional reporting.

Alterman knows this is a crock. He’s simply too polite to say so in so few words.

A Times of London essay a few years ago noted they typical newspaper’s particular package of information, entertainment, and infotainment wasn’t some eternal set-in-stone formula, but grew over decades of industry practice. Why should there be only one paper in most towns? Why should everyone have to get a sports section? Why do those sports sections cover a few big spectator sports in minutae, but ignore most participant sports?

I happen to believe journalism isn’t dying. It’s evolving. Into what, I don’t know. I spent much of the previous year with a group trying to figure that out. Our little group didn’t come up with a fully formed answer.

But I’m convinced such an answer is out there.

As this election year unfolds, so will online journalism; from repurposed print articles and volunteer blogs toward sites that are written for online reading from the ground up.

The business model for these sites will lag about a year behind the development of the sites themselves. And it has to be this way; otherwise, the more idiotic financial speculators will pour in and ruin it all.

…claims you, the avid Internet consumer and blog reader, just might be a “virtual crackhead.”

I’m a little skeptical of these scares. Remember how horror comic books were supposed to turn cleancut suburban boys into juvenile delinquents? When the mere act of viewing an operating TV screen was supposed to turn everybody into brainless zombies? (Oh wait, that accusation’s still being made.)

So go ahead and keep browsin’. Learn a few things. Have some laughs. Just make sure to fulfill those pesky work and home duties.