SAM: I think the answer is certainly, but the answer to whether the conventional approach to the newspaper business that has been the model since the beginning of time, I could tell you unequivocally that model is a failure, or that model has passed its time of relevance. The newspaper business basically grew up as a monopoly, and like every other monopoly, it built processes and approaches that reflected its monopoly status. One example was the rate card you give to an advertiser in order for that person to determine how he would like to participate. You needed a Ph.D. in order to understand the rate card. In the days where the customer had no options, you could give him the rate card and say, "Take it or leave it." But today, that doesn't work.

I think the newspaper industry truly still doesn't understand that it is in a business with customers, and the business must reflect the needs and demands of the customer. And to the extent that we don't do that, we will disappear.

JOANNE: So what is the new model? Have you figured that out yet, or are you cutting your way to…?

SAM: I think the answer is we are testing and testing and changing. We've reformatted all eight newspapers. Among other things, we shrunk the size of the newspapers by an inch. And then we responded to our customers. Our customers have an enormous interest in our newspaper on Sunday; have almost no interest on Monday, Tuesday, Wednesday; Thursday and Friday, they're more interested; and Saturday might as well be in the desert. So we did something that was really extraordinary. It kind of came out of Econ 101. We looked at demand and we said, "Gee, we ought to reduce supply when demand is weak"—a very shocking concept, particularly for the newspaper industry. So, we've now done that across all of our newspapers.

We did not have a single salesperson on commission. In other words, every single newspaper had a cadre of salaried salesman. Now, you know, I'm just a businessman, but I've never seen any kind of a sales force that was effective if, in fact, they had no incentives. Now, part of the reason is that historically, because it was a monopoly, newspapers heavily depended, and still do, on national advertising, where the salesman is an order taker. When the guy from Macy's calls and says, "We want six pages," you don't say to him, "Well, how about nine." You just say, "Yes, sir. Send me the check and we're on." But, among other things, what that led to was a massive abdication of potential advertisers within the local markets using zones, so that, in effect, the zone belongs to the salesman. Nobody else can go in there. Even if nobody has bought anything in that zone for 20 years, it's still his territory.

I mean, this is nutty stuff. And, in effect, what we're trying to do is address the newspaper business like a business.

As you and I talked about earlier, somebody has to address the home-delivery question. Right now, if you go across the street and you buy a newspaper from a vendor, you will pay 50 cents. But if you get it home-delivered, which costs the company 10 times as much, you pay 30 cents. I don't understand. Okay? I mean, you try and make those numbers work, and it don't make any sense.

JOANNE: So, all the things you're talking about are somewhat around the periphery. They're all working within the structure of the conventional newspaper, and if you really need to blow up the business model and start from scratch, what might that model be? We saw the Christian Science Monitor just said they're doing away with the print edition and only going to the Web. Do you see something that radical, or is there some other way of looking at this?

SAM: Well, if you want to play futuristic—and I don't know how big an f on the word futuristic—you can make a case that the world in the future is all Kindles, and you'll send out an email to everybody to their Kindle, and that's how they're going to get their newspaper every morning. That's a real possibility at sometime in the future.

But most importantly I think the newspaper has to acknowledge the reality of the world we're in. When I grew up—and I hate to tell you I'm that old—but when I grew up, the definition of "breaking news" was your front door. So you run…you go up in the morning, you open up the front door, you see what happened. Okay? Well, that's not the case anymore. Now, you hit your homepage, now you turn on CNN, or some other news-TV program, and that's how you find out what the latest news is.

So then the question becomes: Is there a role for newspapers? And I think the answer is yes, there's a role for newspapers, providing the newspapers understand what that role is and are able to adjust to it. So, for example, most of my newspapers do not have a comparative advantage on international news. I'm not going to compete with Bloomberg or Reuters to, in effect, secure the latest international news. On the other hand, I've got staff and people and knowledge locally that nobody else has. So…and when you do focus groups with people and you ask them, "What do you want from your newspaper?" they tell you, "local, local, local." And they say it over and over again, "I want to know what's going on locally because that's the only thing I can't find from 10 other sources."