Nine News Industry Questions: Is the Recovery for Real?

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by: Ken Doctor

The sails are up, and news companies feel a little recovery wind at their backs. With the worst of cost-cutting over, they're looking for growth. Here's nine questions as they chart that new path.

1. Is one foot better than two? Newspaper companies are feeling a new vim and vigor, and their share prices reflect that. The last 12 months have felt as if someone was standing on their chests with both legs, one leg's is the challenge of the web for readers and advertisers. The other's been the recession. Now the recession leg is applying less pressure, and may be removed completely soon. In other words: Back to the challenges of 2007.

2. Doesn't Mediaspectrum's announced partnership with Tribune offer significant potential to the news industry? Saving money on ad pre-press (ad order-taking, ad design, etc.) is hardly sexy stuff, but Mediaspectrum's customers report savings of 25-50% in ad pre-press costs. That's huge, especially applied over an industry still beleaguered by cost structure issues. (We can see that news companies have cut 25-40% of their costs over the last three years in staff, paper and everything else, but more is needed as online-only rivals come at them.)

A little sexier -- and to the point of where news companies can find growth going forward -- is Mediaspectrum's self-service ad platform. I wrote recently about Advance's partnership with Microsoft (NASDAQ:MSFT) around local sales, further ratification of the Yahoo (NASDAQ:YHOO) Newspaper Consortium notion that it's all about enlarging local sales going forward.

"How you get more of your local businesses that we haven't gotten to before," is the big goal of the self-service platform, says vp/operations Mike Sacks. Sacks tells me that Tribune has gone live with the self-service ad platform in six of eight Tribune markets and has already brought in hundreds of new, smaller advertisers, ones that could never afford print and may not have been touched by the company previously.

So where does self-service fit for Tribune. "We're not firing salespeople; we're redeploying them to [sell] larger businesses." The system may allow the company to re-allocate as many as a fifth of its sales staff.

Now Tribune and Mediaspectrum, which also has made a believer of UK-based Trinity Mirror, are teaming up to sell the newspaper industry on ad self-service, launching a joint initiative today.

3. If Journalism Online takes off, will we see a pitched battle between Paypal and Google Checkout in the news world? Google has recently renewed its pitch to publishers, urging them to use Checkout to power their paid content strategies. Checkout has been aimed at micropayment initiatives, but it hasn't caught fire.

On the other hand, Journalism Online, which this week announced 1000 "affiliates" willing to keep talking -- and provide some potentially highly useful reader data -- about paid content, will probably focus on Financial Times-like "metering" approaches. That means subscriptions, rather than micropayments. And don't be surprised if you hear that JO's partners, as it goes operational with pay offers, will include Paypal and Zuora. Paypal, owned by eBay, of course has become an online payment standard. Zuora is a Paypal-partnered start-up with a good lineage (funded by Benchmark Capital and by Salesforce.com's Marc Benioff). It focuses on subscription marketing. Zuora's role: working with JO and news publishers to craft subscription products that readers might actually pay for. (Thoughts from Zuora founder K. V. Rao on subscriptions and the web, here.)

4. Isn't California Watch one of the models to really watch? The model is simple, fits the economics of the day and produces.....above-average journalism. What's not to like and apply? The 11-person California Watch unit -- funded by foundations and run by the Oakland-based Center for Investigative Reporting -- hit a home run with its first project. That project focused on wasteful Homeland Security spending. It ran in 25 papers across California, from big metros to the small dailies, on indie VoiceofSanDiego.com and caught play on KGO-TV in San Francisco.

So: an independent, non-profit news operation produced well-done enterprise journalism and found a ready and eager audience of editors and readers. How tough was it to get daily editors to accept this journalism?

"It was incredibly uncomplicated," says CIR's Exec Director Robert Rosenthal, the prime driver behind California Watch. Learnings: "Our customers were the publishers. The easier you can make it for the publisher, the better." California Watch charged fees in the low hundreds and has found publishers and TV outlets asking, "What's next?"

That's the good question Rosenthal and his new merry band now get to answer, as they think through the kinds of reporting, the amount of cooperation and customizaton useful and the business models that will work as this new form of distributed journalism.

Among the principles being proven out: When established daily journalists leave big metro dailies, they take their cred with them -- and it looks like it is instantly transferred to their new enterprises.

5. Is Rupert Murdoch replacing Henny Youngman? Is it the one-liners he is tossing out or is the press just starved for received wisdom. Now Rupert, leader of the Free World's News Media, says he is going to charge a buck a month for WSJ mobile to subscribers and two bucks for non-subscribers. I think that's a step in the right direction.

Charging for non-desktop/laptop access should be a new revenue stream for news publishers. The math, though, isn't huge. Who is most likely to pay for Journal mobile? Presumably it's online subscribers, of whom there are about a million. So $12 a year, if all of them signed up, would be $12 million. Not bad, but only about an 8% increase in reader revenue. I can't see lots of non-subscribers shelling out $24 a year, but I may be wrong.

Better than charging just for mobile, I still think All-Access is the way to go: Get the Journal (or the Times or Guardian or ?) anyway we produce it, print, desktop, laptop, phone, e-reader, e-edition. And add a $5.95 per month charge for that. All-you-can-eat model that Americans seem to love, even if they don't often sample the whole buffet.

6. Is News Core the right bite of the apple? Lost in the flurry of news was News Corp's (NASDAQ:NWSA) News Core announcement. Another unsexy one about bringing together all the company's news content -- think Journal, Barrons, Marketwatch, Times of London, Australian, Fox, etc. -- in one place. That's essential (core) to taking advantage of the scale News Corp has built. In digital publishing, it's all about content management, control and measurement.

If News Core can successfully harness its internal content, to multiply value of its individual content units (yes, new language for new times), it's got a leg up for its own destination sites, and for syndication out. This is one answer to the two-year-old question of how much Murdoch "overpaid" for Dow Jones in December, 2007. Yes, he "overpaid," but multiplying the value of those DJ assets through News Corp's worldwide pipes of distribution -- satellite, cable + print and web -- helps us all to see the value that can be unlocked.

In concept, News Core parallels Gannett's (NYSE:GCI) ContentOne, that company's attempt to reinvent an internal wire for the digital age.

Big question for these companies: How much of this activity is truly integrating content management on single platforms (Dow Jones is moving that way with Eidos Media) and how much is simply better sharing of old-fashioned budgets. It's the former that will pay huge dividends.

7. How much will the New York Times (NYSE:NYT) digital news operation miss Jon Landman? Landman gets it, a Timesman with commonsense. I've talked with him about staff blogging, for instance, and he is one of the too few people at the top of journalism who get that blogging is just another useful new tool in the journalist's bag. We can see that in the Times' growing comfort with blogging and multimedia, done to Times standards. Yes, it still seems too slow sometimes to many of us, but it's been directionally right. That said, let's see what he can do as Culture Editor online, where such innovations as NPR's Culturetopia podcast (often helmed by the capable Neda Ulaby) and Linda Holmes' MonkeySee blog are bringing the right sensibilities and selectivities to online culture journalism.

8. Is the NYT about to make a pay content decision? The ghosts of Times Select roam the new hallways. Membership notions abound. An ad rebound gives punch to those who say keep it free. Rupert's mobile upcharge offers another path. Word is that the Times may soon decide what it will -- and won't do -- with paid content in 2010.

9. Couldn't Walter Hussman have chosen better words? The Arkansas Democrat owner has proclaimed that his merger with Stephens Media would create "a permanent solution" to both companies' cost issues in northwest Arkansas operations.. The phrase gives some of us the willies, in its finality. Besides, isn't it quite clear that given the fast-changing landscape, there is little permanence and everything is in long-term transition?