A gut punch for “digital first” advocates

John Paton, CEO of Journal RegisterOn the great scale weighing two alternative futures of the newspaper business, Journal Register has had all its weights on one side.

Print is dead. Go digital first. And fast.

It’s an attractive message. It’s a vision, after all. As the rest of the industry meanders toward a digital future, these folks are racing ahead.

For the rest of the industry, that was handy. Journal Register offered an example for newsrooms that were too slow to change. “Look how they’re changing.” “Let’s not be left in the dust.” (And even, “At least we’re not asking you to do this.”)

The most unfortunate part of Journal Register’s bankruptcy filing this week is that it takes a little luster off that shine. It cost the digital darlings some credibility. That hampers everybody’s efforts.

The company that was supposedly showing the path toward a profitable financial future suddenly is entering bankruptcy for the second time in just a few years.

Journal Register has been the leading proponent of free access to news websites. A number of newsrooms (including most of Gannett) have been moving in the opposite direction — to online subscriptions.

The tension is obvious and has long-term ramifications to news consumers: Will local news online be free, as it has been, or will you have to pay for it?

In materials related to its filings, Journal Register says remaining costs and liabilities “that are now unsustainable and threaten the company’s efforts for a successful digital transformation.” It expects to sell its assets in bankruptcy, and already reports it has a bid.

Journal Register publishes several Michigan products, most prominently the Oakland Press, Macomb Daily, Daily Tribune, The (Mt. Pleasant) Morning Sun and several downriver and Washtenaw County (Ann Arbor area) news products.

The bankruptcy doesn’t suggest any imminent threat to those properties, but suggests there will be new ownership and speaks to the broader long-term profit-and-loss problems at newspapers.

The other unfortunate part of this filing? It hints that bigger underlying problems probably remain elsewhere: This is a company that already shed substantial costs in a previous bankruptcy. Despite being the digital first success story, it needs another round of cuts.

FYI, Journal Register also has a tenuous link to The Detroit News, where I work. The JRC management team runs Media News Group papers, excepting at least The News, via Digital First Media.

Will the Journal Register bankruptcy be anything more than a gut punch for “digital first” proponents? It seems doubtful.

But it’s certainly that.

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