A business model for newspaper journalism?

A friend sent me “Can the Washington Post Survive?” a Fortune article by Marc Gunther. In it he describes Donald Graham’s mission to save his family’s legacy. It’s a well worth reading at least by newspaper aficionados (here is part one and part two.) Gunther flatters his subject, saying:

“If Graham and his people can’t build a business model for journalism in the digital world, nobody can  . . . Since the mid-1990s, the Post has plowed many millions of dollars into its interactive unit . . . Graham has made the paper’s digital business his uppermost priority. “If Internet advertising revenues don’t continue to grow fast,” he says, “I think the future of the newspaper business will be very challenging. The Web site simply has to come through.”

But Gunther reveals the challenge facing the Post and, by extension, other print papers:

“Advertisers paid about $573 million last year to reach readers of the company’s newspapers, predominantly the 673,900 daily and 937,700 Sunday subscribers to the Post. Advertisers paid only about $103 million to reach the eight million unique visitors to the Post‘s Web sites each month.”

Regarding the finances of the Washington Post corporation, Gunther said:

“Graham’s singular accomplishment as CEO has been to reduce the company’s exposure to print. In 1990 the Post Co.’s newspaper division contributed 48 percent of revenues and 51 percent of operating income; last year newspapers accounted for 25 percent of revenues and 14 percent of operating income  . . . Graham’s best move has been to invest in the sprawling array of education businesses – a test-prep firm, colleges, an online university and professional training businesses – that make up the Kaplan unit. It contributed 43 percent of the Post Co.’s $3.9 billion in revenues in 2006.”

So the smartest guy in online news is buttering his bread in the college preparation business.

Meanwhile journalists should pay attention to the Post, which seems to be tranforming itself as rapidly as possible from a newspaper into a newsgathering operation. The article describes how Post reporters regularly produce versions of the same story for different media, print still being their first but not only storytelling tool.

This last point rings true because a few weeks ago I heard much the same from Post editor Rob Curley, one of the new gurus of newspaper interactivity. Curley gave a talk at the SF Chronicle, where I work, and said: The Post is the most converged newsroom I’ve ever seen, or words to that effect. Even if you discount for the fact that they pay him to say stuff like that, he had some great stories to tell and some great examples to show. I blogged about his editorial thinking as MiniMediaGuy and his hyperlocal startup for the Chronicle Tech Blog.

One of the Washington Post multimedia experiments that Curley showed off, a slice of life video series called On Being, just won a Knight-Batten award for journalism innovation.