Newspapers take notice of revenue threat

LANSING – The next wave of digital transformation in the news business: Public notices?

Unlikely. Printed in tiny type, the government notices can include upcoming public hearings, legal descriptions of property to be sold or redeveloped and election dates. They’re far from the most disruptive force challenging news organizations today, and they certainly don’t make for thrilling reading.

But they do still represent a revenue stream – although no one seems to be able to say exactly how much of one – and Michigan’s newspapers are battling to keep a lock on the business.

House Bill 4183 would require that public notices be published solely online, changing the legally required practice of townships, villages, cities and counties paying to publish some notices in print newspapers serving their residents. Online-only publication now would allow TV and radio stations to compete for contracts.

So far, there’s not a groundswell of support: A vote on the bill was postponed June 18, the last session day before the House left for summer break, when it became apparent lawmakers didn’t have enough support to pass it. It could be taken up again later this summer or fall.

“The way technology’s going to go, we get our news a lot by television and other media sources, and we see readership in newspapers going down,” said Rep. Amanda Price, a Republican from Ottawa County’s Park Township, who introduced the bill.

“We envisioned a time when we’ll have fewer and fewer newspapers and more and more technologies and ways to inform the public.”

The bill pending in the House gradually would phase out print publication of government notices by 2025. It would allow local governments to publish notices on their own websites, or contract with newspapers or broadcast outlets to host them on their sites.

A similar bill passed the House in the last legislative session, but died in a Senate committee.

More than 200 state laws require advance notice of hearings and other government notices, with varying requirements, Price said. Some include specific language that notices be published in general-circulation newspapers that reach residents within the affected municipality, or that notices be published for a certain amount of time. Many of those laws were adopted before the birth of the Internet.

“When these laws were enacted, newspapers were virtually the only form of reliable communication. That just isn’t the case anymore,” said Nikki Brown, a legislative associate for the Michigan Municipal League. “This legislation promotes good government and transparency by providing the public notices in other forms of communication that are visited more often.”

Going digital also could save taxpayers money, Price said, by reducing the amount local governments have to spend on publishing the notices.

Supporters of moving public notices online, including Price and the municipal league, however, could not estimate the amount of possible savings.

Message access

Initially, Price said, her idea was to get notices in people’s hands however possible – through emailed newsletters, Twitter, text messages. The bill evolved after hearing “pretty compelling” testimony from broadcasters about their viewership numbers, she added.

State and national press associations say the issue, while about money, also has to do with government transparency, universal Internet access, geography and economic competition.

“Is it a turf war? Of course, that’s an aspect of it,” said Brad Thompson, president of Detroit Legal News, who says less than a tenth of his publication’s revenue comes from such notices.

“We just don’t feel there’s any place in a free market for exclusivity, especially now, because the way people consume media is so varied.” – Karole White, president/CEO of the Michigan Association of Broadcasters

But, cumulatively, public notices add up to hundreds of millions of dollars for American print newspapers – and are especially important for smaller daily and weekly papers, wrote Geoffrey Cowan and David Westphal, of the Annenberg School for Communication and Journalism’s Center on Communication Leadership and Policy at the University of Southern California, in a 2010 report.

They cited an estimate from the National Newspaper Association – which represents 2,400 newspapers, mostly weeklies and small dailies, across the U.S. – showing government notices made up 5-10 percent of community newspaper revenue in 2000. The association’s CEO, Tonda Rush, told Crain’s the estimate came from a previous executive and she doesn’t have an updated figure.

Groups like the Michigan Press Association, which opposes the legislation, can’t say how much money its member newspapers take in from government notices – nor how much of a financial hit they’ll take. That depends, they say, on the size of the publication, the market, the ad.

The nonpartisan House Fiscal Agency, in an analysis of Price’s bill, said publishing costs could hit $4,000 in a township and $50,000 in a larger county.

Broadcasters, who hope they will be able to compete for government business, believe it’s time public notices enter the 21st century and adapt to new technology that has changed the way people receive information.

“We just don’t feel there’s any place in a free market for exclusivity, especially now, because the way people consume media is so varied,” said Karole White, president and CEO of the Michigan Association of Broadcasters.

The organization represents all of the state’s commercial TV stations and 87 percent of its radio stations.

“We feel we can make public notices somewhat more popular than what they are now,” White said, adding that broadcasters would direct viewers to visit their public notice Web pages on the air.

“They should be more than to line a birdcage.”

No ‘Net?

Opponents resist the digital shift in part because there’s still a large swath of the state without reliable Internet or cellphone service. Some townships and small cities, especially in rural areas, have rudimentary websites and older populations that still rely on newspapers for information.

Rep. Peter Pettalia, R-Presque Isle, was a township supervisor for 16 years before he was elected to the Legislature. He said fewer than half of the townships he represents in the northeastern Lower Peninsula have Internet service at their government offices.

He said his opposition to Price’s bill isn’t about protecting the print newspaper industry, but rather out of fear that government, left unchecked to post their own notices, could change or hide parts they don’t want the public to see.

“If the zoning ordinance changes on the township, city or village website,” Pettalia said, “how many people actually go there on a daily basis or a weekly basis or a monthly basis or even a yearly basis to look at something that may be changed until somebody says, ‘Oh, my God, do you know what’s going on?’ ”

An amendment has been attached to Price’s bill that would allow local government leaders to decide on their own whether they want to continue publishing public notices in newspapers, rather than phasing out print entirely. Price said she is supportive of the idea.

“When we do things like this, we’ve got to be mindful of the variety of ways government is delivered,” she said. “It falls to the elected officials to know which way is the best way to reach their constituents.”

As for the tepid support in the House for her bill last month, she said, “I need to continue to listen to my colleagues and figure out other language that (they) would like to include in the legislation.”

Papers as watchdogs

Ensuring government transparency might be the only part of Price’s bill on which newspapers and broadcasters agree.

Newspapers believe they have an advantage over TV and radio because they have a permanent record built into their business model, said Lisa McGraw, public affairs manager for the Michigan Press Association.

Archived editions of newspapers dating back centuries can still be read on microfilm at public libraries. And newspapers consider themselves government watchdogs, even more so than broadcasters, which is intended to keep government honest.

The MPA doesn’t oppose cities and townships from hosting their own public notices, McGraw said. They just shouldn’t be the only source.

“People don’t go to local government websites for news. We feel that we’re a better source for this kind of information,” she said. “I just don’t think the broadcasters can do what we do because they can’t provide a print source.”

The revenue newspapers gain from government notices is not significant, McGraw said, but it might fund a position, particularly at a smaller daily or weekly publication.

Thompson, of the Detroit Legal News, said he publishes Detroit’s public notices. He charges the city about $8 per inch and has dropped the rate several times while the city was going through financial trouble.

“We have worked extremely hard to police our own industry,” he said. “Municipalities get our absolute best pricing, and most newspapers do that.”

TV and radio stations don’t know what they might charge because they’ve never been able to compete for the business, said White of the broadcasters association. Whether they win contracts would depend on the market, the popularity of their websites compared to other local media outlets and how capable the sites are to host and archive public notices.

Broadcast websites are just as capable of storing archived information as newspapers’ sites, White said. Newspapers disagree.

“We feel it creates competition, and competition often drives down prices,” White said. “We’re going to have to cross that bridge. We know that we’re going to have to be competitive with what print has.”

Facts matter. Trust matters. Journalism matters.

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Mon, 07/06/2015 - 10:52am
I am a former archivist and public librarian. In my work I used printed public notices extensively. The people I helped fell into four categories: historians, community activists, parties interested in specific issues before the local government or the courts, and in my community, the poor and/or uneducated who didn't have either newspapers or computers in their homes due to the cost. I have no objection to duplicating these notices on digital sites, but believe that they need to continue to be printed to ensure governmental transparency in relevant issues before government. These notices often contain critical information. The bill eliminating the directive to print these notices is being represented as "forward thinking" in the "digital age." In actuality, by eliminating one vehicle of informing people of actions of government, it is disadvantaging significant portions of the population which may be affected by various actions, including those who can't or won't use their computers and the poor and handicapped who might not be able to access libraries or travel to governmental offices. It's to the advantage of the government not to spend money on publication. A cynic might say it's also in the interest of governmental agencies to obscure their actions in some instances. Several years ago my city revamped its website. In doing so it eliminated links to historical minutes of commission and committee meetings and commission background packets. Now people looking for background on actions taken on blighted property, historical spending of various departments, etc., have to go to City Hall and slog through printed records which only exist in one place in one office with limited hours. There is no guarantee that public notices wouldn't be treated similarly in my view. As long as they are printed in newspapers however, that vehicle exists in libraries to help folks find the information they need.
Mon, 07/06/2015 - 11:34am
Hmmmm...another example of 'it depends on whose ox is being gored'. Let's see the papers either cease to publish or limit publishing dates and deliveries to homes. It would suggest that is a restriction of access by the shut-ins of our community. The excuse 'well that is how the public gets their info now just go to our website'. And it is beyond unconscionable the rates for 'death notices' in the local papers...that is the ultimate last shot at former subscribers. TskTsk...government save some $$$'s and go electronic.
John Haeussler
Mon, 07/06/2015 - 11:53am
First I must give a nod to the use of the Daily Mining Gazette (DMG) in the photo. That's beautiful, and presumably intentional, because the DMG recently published an editorial on this topic (under the banner of "In Our Opinion" because, unlike the requirements for reader submissions, newsprint employees don't sign their editorials so you never know for certain whose opinion is being foisted upon you). The DMG called HB 4183 a "government scheme to hide"; "a threat to democracy"; and "a blatant government attempt to blindfold the watchdog and allow government to operate in the dark." Which is all a bunch of hooey, in my opinion. HB 4183 is better described as a blatant attempt to allow governments to function while remaining fiscally responsible. Rep. Pettalia's comments re: checking on a daily basis to see if the zoning ordinance had changed are irrelevant to this discussion and show a lack of understanding of the issue. This has nothing to do with the actual change to the zoning ordinance (to stick with his example) and everything to do with the notification that is legally required to be given if there is a proposed change to the ordinance. I'm a former municipal official in a small municipality and there were numerous occasions where a minor change to an ordinance was the proper course of action but wasn't taken due to the cost associated with the publishing requirement. Frequently the municipal board will take the view that paying several hundred dollars (or more) to publish a minor wording change to an ordinance that adds clarity simply isn't worth doing and they put off making the change until several other ordinances are to be similarly changed, because if you can publish several changes together you can save money. Unfortunately, the membership of the board turns over and these small but helpful refinements to the ordinances get lost and are never made. My experience is with small municipal government. I can only shake my head at larger municipalities where no longer paying the publication fees could mean hiring another firefighter or law enforcement officer, or perhaps both. The DMG argues that "about one in four American households do not have computers or internet access." I'm interested in knowing what proportion of households do not have a subscription to the local newspaper. In my municipality it's surely more than one in four. Personally, I find the argument of access to be virtually meaningless. People interested in knowing, in receiving these government notices, will find them regardless if they're in the newspaper, on the municipality's website, or on a third-party website. People not interested, which unfortunately is the majority of the public, will not read them even if you taped the notices to their front doors. One potential issue with HB 4183 is the archiving requirement: "the notice shall be maintained in the archival notice portion of the website for not less than 5 years." That's great. Easy access to notices for at least five years. I'm OK with that as long as the municipality maintains some record of these notices in perpetuity. The pro-newsprint faction has a reasonably valid point. In general, one can go to a local library and find older editions of the newspaper on microfilm, thus there is inherently a perpetual record. (Note, however, that this perpetual record isn't required and isn't maintained by the publisher, I.e. the newspaper.) As long as municipalities maintain permanent records, in some accessible form (at least as accessible at microfilm at a nearby library) they should be allowed to stop spending taxpayer dollars, or spend them more responsibly, on publication requirements for notices. Don't let the print journalists fool you. This isn't about them protecting the taxpayers. It's about them protecting their share of the taxpayers' dollars.
Mon, 07/06/2015 - 1:35pm
Print them in both places...newspapers and the web where they can be easily accessed and referenced. Eventually, though, they'll have to migrate exclusively to the web.
Mon, 07/06/2015 - 2:43pm
In the Lansing area all (that I am aware of) public notices are published in a small weekly alternative paper (circulation around 20,000). I believe local govts. dropped the Lansing State Journal in order to cut costs. I'm not sure how much of their advertising revenue the small weekly gets from posting the public notices but I suspect it is substantial since some of the notices (especially those about foreclosures) run for many pages are are published about twice a year along with a lot of other small routine notice for zoning changes etc.
best of both worlds
Tue, 07/07/2015 - 8:33am
Print publications charge by either column size or number of words. Why not try the best of both worlds and print a short notice that there is a public notice available on the municipality's website? The online version can include all of the required text and legal descriptions but the cost of the more expensive printed announcement is greatly reduced.
R T Kuzmnski
Tue, 07/07/2015 - 9:16am
I would like to see piggy-back reform along with these proposed changes to include transparency in open meetings postings. The 18 hour posting of special meetings is open to suspect of special agendas. We have to move into the 21 century, we do not drive cars with carbs, we don't go to drug store to process our photos anymore! To insure the transparency in government why don't we mandate local government into the new media age? Perhaps we should encourage taxpayers to 'opt' in to automatic emails or something similar to 'Amber Alerts' to inform taxpayers of Special, Regular, Zoning and Planning Meetings through email alerts? This would also coincide with the proposed changes in posting of government notices too.
Mrs A
Wed, 07/08/2015 - 3:34pm
I worked for a Michigan newspaper a few years ago where I was in charge of legal notices. Because fewer and fewer people subscribe to newspapers, I can sympathize with local governments required to budget for published notices when there is no guarantee anyone will see them anymore, especially with state cuts in revenue-sharing. (I often reflected that putative parents of children in foster care were probably the least likely to read a newspaper.) Maintaining the legal requirement to publish in a local paper amounts to public subsidization of private publishing companies. BestOfBothWorlds and R.T. Kuzmnski's ideas are sound, and in fact some organizations have gone to this solution -- often seen with Bid Notices where extensive details would be cost-prohibitive to include in a classified ad priced by line. My suggestion is that the State of Michigan could establish and manage an official website for all public notices within the state, including an archive, and require submission by the local authority to its editorial board. Such public notices site could be a node on the current website or it could even become a new service administered by MEL or other library association, which would yield the desirable third-party overview. State control would prevent "editing" by submitters, and there would be a significant advantage over newsprint because everything could be searchable. City, county and regional websites could easily link in, offering additional access. There could also be the option for readers to create a personal alert -- whether it be a name, a bill in progress, a community topic, address or locality -- and have updates delivered to their inbox or smart phones. Overall, such a change could still accomplish the ultimate goal, which is to get the word out to the people, but at a much lower cost.
Wed, 07/08/2015 - 8:44pm
If the purpose of such notices is to inform the public so they can take actions related a particular notice I wonder why the print media doesn't provide more than simply printing the notice. It would seem if the print media were to include an article describing the notice, why it is offer, and how people have used it then they would provide added value to the public. The disappointing thing is my local newspaper simply prints with with no interest in the readers, so whether it is printed or electronically posted seems to offer no difference. Print media can whine for public support or they can create added value to the public to gain support, that seems to be the choice.