When the price of your digital product is zero, that’s about how much you learn about customer pricing. Now, both the pricing and the learning is on the upswing.

The pay-for-digital content revolution is now fully upon us. Five years ago, only the music business had seen much rationalization, with Apple’s iTunes having bulled ahead with its new 99-cent order. Now, movies, TV shows, newspapers, and magazines are all embracing paid digital models, charging for single copies, pay-per-views, and subscriptions. From Hulu Plus to Netflix to Next Issue Media to Ongo to Press+ to The New York Times to Google Play to Amazon to Apple to Microsoft (buying into Nook this week), the move to paid media content is profound. The imperative to charge is clear, especially as legacy news and magazines see their share of the rapidly growing digital advertising pie (with that industry growing another 20 percent this year) actually decline.

Yes, it’s in part a 99-cent new world order as I wrote about last week (“The Newsonomics of 99-Cent Media“), but there are wider lessons — some curiously counterintuitive — to be learned in the publishing world. Let’s call it the newsonomics of Pricing 101. The lessons here, gleaned from many conversations, are not definitive ones. In fact, they’re just pointers — with rich “how to” lessons found deeper in each.

Let’s not make any mistake this week, as the Audit Bureau of Circulation’s new numbers rolled out and confounded most everyone. Those ABC numbers wowed some with their high percentage growth rates. Let’s keep in mind that those growth numbers come on the heels of some of the worst newspaper quarterly reports issued in awhile. Not only is print advertising in a deepening tailspin, but digital advertising growth is stalled. Take all the ABC numbers you want and tell the world “We have astounding reach” — but if the audience can’t be monetized both with advertising and significant new circulation revenues, the numbers will be meaningless.

When it comes to dollars and sense, pricing matters a lot.

Let’s start with this basic principle: People won’t pay you for content if you don’t ask them to. That’s an inside-the-industry joke, but one with too much reality to sustain much laughter. It took the industry a long time to start testing offers and price points, as The Wall Street Journal and Walter Hussman’s Arkansas Democrat-Gazette provided lone wolf examples.

The corollary to that principle? If you don’t start to charge consumers — Warren Buffett on newspaper pricing: “You shouldn’t be giving away a product that you’re trying to sell.” — then you can’t learn how consumers respond to pricing. Once you start pricing, you can start learning, and adjust.

We can pick out at least nine emerging data points:

• 33-45 percent of consumers who pay for digital subscriptions click to buy before they ever run into a paywall. That’s right — a third to a half of buyers just need to be told they will have to pay for continuing access, and they’re sold. As economists note that price is a signal of value, consumers understand the linkage. Assign what seems to be a fair price, and some readers pay up, especially if they are exposed to a “warning” screen, letting them know they’ve used up of critical number of “free” views. Maybe they want to avoid the bumping inconvenience — or maybe they just acknowledge the jig’s up.
• If print readers are charged something extra for digital access, then non-print subscribers are more likely to buy a digital-only sub. Why pay for digital access is the other guys (the print subscribers) are getting it thrown in for “free”? Typically, Press+ sees a 20-percent-plus increase in signups on sites that charge print subscribers something extra. That extra may be just a third or so of the price digital-only subscribers pay (say, $2.95 instead of $6.95), but it makes a difference. Consequently, Press+ says 80-90 percent of its sites charge print subscribers for digital access. The company now powers 323 sites and thus has more access to collective data than any other news-selling source.
• You can reverse the river, or at least channel it. The New York Times took a year, but figured it out righter than anyone expected. It bundled its Sunday print paper (still an ad behemoth) with digital, making that package $60 or so a year cheaper than digital alone. The result, of course, is that Sunday Times home delivery is up for first time since 2006. It’s not just NYT or the L.A. Times which have embraced Sunday/digital combos. In Minneapolis, the Star Tribune began a similar push in November. Now, of its 18,000 digital-only subscribers, 28 percent have agreed to an add on the Sunday paper, for just 30 cents a week, says CEO Mike Klingensmith (“A Twin Cities turnaround?”). So we see that consumers may well be more agnostic about platform than we thought. Given them an easy one-click way of buying even musty old print, and they will. Irony: If you hadn’t charged them for digital access, you probably wouldn’t have sold them on print.
• New products create new markets. 70 percent of The Economist‘s digital subscribers are not former print subscribers, says Paul Rossi, managing director and executive vice president for the Americas. That’s surprising in one sense, but not in another. Newspaper company digital VPs will tell you that they’re surprised to see how little overlap there is between their print audience customer bases and their digital ones. The downside here: Many print customers seem not to value digital access that much. The Star Tribune is finding a low take rate of 3 percent of its Sunday-only print subscribers willing to take its digital-access upsell. One lesson: The building of a new digital-mainly audience won’t be easy and will require new product thinking; it’s not that easy just to port over established customers.
• The all-access bundle must contain multiple consumer hooks. Sure, readers like to get mobile access as well as desktop and print, and maybe some video. Yet some may especially prize the special events or membership perks they are offered, as the L.A. Times is banking on (and start-ups Texas Tribune, MinnPost, and Global Post have applied outside the paywall model). Some will like the extras, like The Boston Globe telling its new 18,000 digital subscribers, as well as its print ones, that they now get “free” Sunday Supper ebooks (“The Newsonomics of 100 Products a Year“). Sports fanatics or business data lovers will find other niches to value — and ones that make the whole bundle worthwhile. Archives — and the research riches they offer — will prove irresistible to some. In 2012, a bundle may offer a half dozen reasons to buy, casting a wide net, with the hope that at least one shiny lure will reel in the customers. By 2013, expect “dynamic, customized offers,” targeting would-be buyers by their specific interests to be more widely in use.
• While pageviews may drop 10-15 percent with a paywall, unique visitors remain fairly constant. We see the phenomenon of those who do hit a paywall one month coming back in subsequent months, rather than fleeing forever. “It may be the second, third, or fourth month before someone says, ‘I guess I am a frequent visitor here, and I’ll play,’” says Press+’s Gordon Crovitz.
• Archives find new life. Archives have lived in a corner of news and magazine websites for a long time. They’ve been used, but not highly used or highly monetized. Now, courtesy of the tablet, and a new way to charge, The Economist is finding that 20 percent of its single copy sales are of past issues. Readers will pay for the old in new wrappers, whether back e-issues, or niched ebooks. The all-access offer can be much wider than cross-platform, or multi-device. It can extend across time, from a century of yesterdays to alerts for tomorrow.
• News media is probably underpriced. Take the high-end Economist. CEO Andrew Rashbass — speaking to MediaGuardian’s Changing Media Summit 2012, in a recommended video — said that a survey of its subscribers showed that a majority didn’t know how much they were paying for the Economist. When pressed to guess, most over-estimated the price. At the Columbia (Missouri) Daily Tribune, an early paywall leader in the middle of America, a recent price increase to $8.99 from $7.99 has so far resulted in no material loss of subscribers. At Europe’s Piano Media, early experience in Slovakia and Slovenia is that price isn’t a big factor, says Piano’s David Brauchli. “Payment for news on the web is really more a philosophical mindset rather than economic. People who are opposed to paying will always opposed to paying and those who see the value of paying don’t mind paying no matter what the price is.” That suggests pricing power. It makes sense that publishers, new to the pricing trade, have approached it gingerly. Yet the circulation revenue upside may well be substantial.
• Bundle or unbundle — what’s the right way? Mainly, we don’t know yet, and the answer may be different for differing audience segments. The Economist started with print being a higher price than a separate digital sub. Then it raised the digital price to match that of print — to assert digital value. It now offers all-access: one price gets you both. Next up: You can buy either print or digital for the same price, but if you want both, you’ll pay more. It’s an evolution of testing, and so far, it’s been an upward one.

Overall, this is a revolution in more than pricing. It’s a revolution in thinking and, really, publisher identity.

The Boston Globe’s Jeff Moriarty sums it up well, as his company aims (as has the Financial Times before it; “The Newsonomics of the FT as an Internet Retailer“) to emulate a little digital-first company called Amazon:

I think overall publishers have to start thinking more like e-commerce companies. More like Amazon. You can’t just throw up a wall or an app and expect it to just sell itself. We’re still building that muscle here at the Globe, and some of our colleagues in the industry are even farther along. We have extensive real-time and daily analytics and are employing multivariate testing to try offers and designs to refine the experience that works best for each type of user.

Honk if you still love newsprint enough to pay $700 or more a year for a seven-day print subscription to The New York Times. Of course, you have many other choices.

You can try one of several print/bundled options for considerably less money. Or if you want to be parsimonious, you can get 10 free article views a month, or more if you want to work the social and search on-ramps to NYTimes.com. Maybe you want to be among those who pay Ongo $1.99 a month, and get 20 Times news stories a day, among lots of other news content.

Love the Guardian, and want to follow each tick of the U.K.’s Murdoch saga? If you’re in the U.S., you can subscribe to the lively iPad edition for $13.99 a month — or access it for free via the Safari browser on the tablet. In the U.S., its smartphone app is free, but in the U.K. and Europe, it requires a subscription. Of course, it’s quite successful Facebook app gives you access for free as well, anywhere.

If you’re shopping the Ongo news kiosk, look at wide spectrum of prices individual publishers are charging for access through that product: The Guardian is 99 cents a month, The Christian Science Monitor is $3.99, while the Chicago Tribune is $9.99 and The Boston Globe $14.99.

It’s not just newspaper companies that offer a patchwork of buying (or not buying) choices.

Are you a late-arriving fan of AMC’s series “Breaking Bad”? If you want to catch up and subscribe to Netflix streaming, you’ve got a good deal at the $7.99 a month rate. Cram in the first three seasons’ 37 episodes in a single month (where did that month go?), and you’ll pay just 21.5 cents per show, and anything else you have time to watch is gravy. Ah, but if we want to watch Season 4, which you can’t yet see on Netflix streaming, you have to upgrade to those red envelopes and get Season 4 DVDs — but it’ll cost you another $7.99 a month, and you’ll have to wait until the DVDs are released in June. (Ah, maybe that’s one of the reasons Netflix’s maladroit move to streaming is pushing it to a loss.)

Or you can turn to Amazon VOD and get the episodes for $1.99 each (or $2.99 in HD!), or $25.87 for the season. Or why stream when you own the DVD in a few weeks for $29.99 (or add an extra 10 bucks for added Blu-ray clarity). But wait — I’m an Amazon Prime customer. Can’t I watch it for free? It’s not part of the Prime free streaming offer, but I can watch a whole lot of other stuff as often as I want for nothing. Or maybe I can access “Breaking Bad” through Comcast’s Xfinity $100-a-month plus service. Nah, no deal — “Breaking Bad” isn’t available.

One more try: on the AMC site itself, there’s quite highlights, blogs, and more on the series, but no full episodes.

Let’s add in music.

Take Tristan Prettyman. It’s $9.99 (or 83 cents a song) for her last CD on iTunes. Through my $36 annual ad-free Pandora subscription, I can listen to dozens of her songs, her musical soundalikes, and thousands of other tunes in a year, bringing down the cost to pennies per song. Or there’s Spotify, where her songs are available for either zero, five, or ten bucks a month, depending on what devices I want to use and whether I can stand ads.

Magazines, of course, are offering their own split-screen experiments. The U.S. magazine industry (“The Newsonomics of Next Issue Media’s All-You-Can-Eat Kiosk“) is testing the all-you-can-eat, cross-title buffet, bringing some its titles down to as long as 37 cents a month (if you consumed all 27 “basic” titles) through the kiosk, but $39, or $59, or $79 a year if you buy a single title directly through a publisher.

How much to charge?

It’s a fool’s paradise of pricing out there in the digital world, right now, at least for wily consumers. The Department of Justice’s ebook suit and related settlements only complicate things. Five and ten years ago we were wondering whether people would ever pay for digital media — Newsweek’s Steven Levy took us into the terra incognita in “Meet the Napster Generation” back in 2000. But now the question isn’t whether people, young and old, will pay — it’s how the hell to figure out how much to charge them throughout what we politely like to call our multi-platform world.

Content no longer demands to be free. It wants a fee — but how much of one?

Consumer pricing is not a core competence of many media companies. For decades, media pricing was on automatic. Newspapers picked a quarter or fifty cents, and then re-programmed the coinboxes. Magazines kept prices low enough to build audiences to reap substantial ad rewards. Book publishers did some minor stratification. Music companies picked a couple of price points, and let the vinyl and CDs fly.

In the digital era, though, pricing is confronting — and confounding — media companies. Just what in the digital world of vanishing manufacturing costs is digital media worth? Now with those 20th-century costs — printing, manufacture, distribution, shipping — passing into the night, the question of price, and value, is making itself loudly heard.

We can certainly identify the wrong-headedness of the Department of Justice’s price-fixing suit against book publishers and/or point out how the DOJ had little choice in pursuing the case, neither of which is a surprise. The law has struggled unsuccessfully to keep up with business changes wrought by the Internet, from fair use to antitrust to media monopoly. Oft-earnest American regulators find themselves falling farther and farther behind, trying to track technology’s dominating nature and make new sense of it. Often, European Union regulators take a more forthright stab but end up retreating.

Create a new legal framework that better balances producers, distributors, and consumers? Forget about that in this age of politics where stalemate and status quo is the order of the day.

Publishers of all media are on their own, then, and they’d better make sense of pricing. It’s core to their survival and future sustainability. Sure, the Amazons of the world will try to monopolize book pricing, returning closer to its pre-”agency pricing” market share of 90 percent from its current paltry 60 percent. Yet, publishers — especially of news and feature media, news organizations and “magazine media” — have many pricing plays to try as customers discover content near and far from traditional outlets.

The magic of a good price point

I’ll call this the newsonomics of 99-cent media because that’s the world into which we have moved. Today let’s look at that 99-cent model, and next week we’ll delve into the early lessons that pricing’s practitioners have stumbled across as they’ve moved into paid content.

At first, it looks like a tyranny of 99-cent pricing (or the parallel expected tyranny of $9.99 Amazon book pricing). Will 99-cent pricing cause brand damage? Will it last? If the U.S. follows Canada and forsakes the penny, then the 99 cent pricing may fall into history. For now, though, it’s got a certain consumer magic.

“Ninety-nine-cent introductory offers have done wonders for take rates,” says applied economist Matt Lindsay, president of Mather Economics. His company has worked with more than 200 titles — about 75 percent of them newspapers — on pricing and related strategic issues. Take a look across media pricing, from The New York Times to Hulu Plus, and 99 cents (or its derivatives of $1.99 to $7.99 to $9.99) are everywhere.

Take rate is simple: What percentage of customers click yes — and provide precious credit card data — when confronted with an offer. Offer readers the ability to start a “trial” for 99 cents, and you’ll see results two to three times any other number, says Lindsey. At 99 cents, readers “take that as a signal. They understand that you want them to adopt this product. By setting the full price at a high number, you are basically saying, ‘This is the true value of the product.’”

Steve Jobs understood signaling in a parallel way. As Chris Anderson described well in Wired last November (“The Magic of 99 Cents”), one of Jobs’ great successes with iTunes and the iPod was that 99-cent pricing for songs. He could get the hardware and software right, but in the not-quite-post-piracy age, 99 cents was the third leg of the value equation. It worked as a signal: somewhere in between free and too much.

Start with 99 cents and you can conquer the world. As they set off on that quest, what are some of the pricing guideposts for publishers?

• 99 cents is a beginning and not an end. For newspapers used to being paid $200 or $400 a year, 99 cents seems like a declaration of cheapness. Put some round 0s on pricing; it just seems more honest. The oft-cited example of Louis CK’s $5 video is a case in point. Five bucks says authenticity. Yet media that answer thousands of reader questions every day aren’t comedians. Just because you set an intro price of 99 cents, the down-the-road price sends thatother important signal to value. Ultimately, says Lindsay, it’s true that “people take price as a signal to quality.”
• If you have lots more to sell, then 99 cents isn’t a price, it’s a price of admission. Responding to my recent column about ”small things” adding up, Rob Pegoraro asked, on Twitter, how The New York Times’ earnings results related to the notion. “I think NYT 454K dig subs become great market for ‘small things’ like ebooks, events+,” I responded. David Johnson then added, “You pay to be in a market. These business plans resemble theme parks and non-profit fundraising strategies.” That thought fits perfectly here: it’s not about the money, large or small, an even buck or 99 cents — it’s about establishing a new relationship. Or, to use the vernacular, 99 cents is gateway-drug pricing.
• Get ready to sell lots of stuff. So if you are Six Flags, or The New York Times or the L.A. Times, you’d better be able to leverage that new relationship by selling lots of stuff. Maybe not yet 100 products a year, but at least a half dozen to start. Ebooks, of course, fit perfectly here, as add-on products offered to members or subscribers. Sure, use some, as The Boston Globe is doing with Sunday Suppers, to reinforce subscriber/member value. But price others to match potential value. A guide to Boston-area colleges from, who else, the Globe, could be a $19.95 solid seller, given the $100,000-plus parental investment ahead. “Ebook,” though, is much too limited a name to put on it, and sounds like something not current. Wonderfactory founder and creative director David Link made this basic but hugely important point when we talked last week: There really isn’t a fundamental difference between an app and an ebook. “From an agency and a technology’s point of view, it’s only in how you create them. Talking about a recent product Wonderfactory worked on, “You go to the ebookstore, and it’s just text. You go into the app store and it’s got the text with 50 percent app-like sauce.” So, right now, publishers and their creative people are having to create multiple forms, but essentially the same product is both an app and an ebook. The technologies, and the costs, will clarify, as will the marketplaces for all the digital paraphernalia of our lives. The point for publishers selling more stuff is clear though: solve audience needs better than someone else, create products for the devices of the day, and price accordingly.
• It’s not just the content we’re paying for. That’s a tough, tough lesson for literal newsies. As with the music revolution Apple wrought, it was the combination of convenience, ease, presentation, pricing, and wonder that rationalized (for good and bad) the digital music industry. Today’s first batch of digital news subscriptions rely as much on convenience and mobility values as they do on the words and pictures.
• We’re all in the same business. Think of your own media purchases. A little music, more and more video, selective news and magazine subscriptions, increasing numbers of ebooks. Yes, the marketplaces for ebooks and apps, alongside this kiosk and that e-store, are confusing. Media, though, is media, and the pricing schemes are forming in a remarkably similar way across movies, music, newspapers, and magazines. We all like, for instance, the notion of All Access; we’ll pay once and get our stuff everywhere. So news and magazine publishers must look through the assorted lessons of the music and movie industries, those lessons still in much progress. News pricing is not an island.

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Alfredo Corchado was used to getting mortal threats.

He received three in Mexico, but now he was in a Laredo bar, north of the border.

You better stop what you’re doing, or you’ll end with a bullet in your head and your body in a vat of acid, he was told. And then we’ll deliver the bones to your family in El Paso.

It was a chilling warning, or at least we’d expect it to put a chill into Corchado. An investigative reporter for the Dallas Morning News (and a former Nieman Fellow), he’s been covering the ravages of drug trafficking for years, much to the concern of his parents living, as the traffickers plainly know, in El Paso. Yet Corchado goes on with his work — as do Adela Navarro Bello of Tijuana’s Zeta news magazine, Jerry Mitchell of the Clarion-Ledger in Jackson, Miss., and Ramita Navai of the U.K.’s Channel 4. As Navarro Bello explained of her paper’s coverage of the drug trafficking that has consumed at 50,000 Mexican lives, “If we don’t publish this information, we are part of the problem.” (Filmmaker Bernardo Ruiz has captured Zeta’s struggle — including the murder of two of its journalists — with a new movie.)

Each is an investigative reporter who put their lives on the line to reveal stories they think readers must know about. They spoke on the “When the Story Bites Back” panel this weekend, at UC Berkeley, part of the sixth annual Reva and David Logan Investigative Reporting Symposium (live blogging of the conference, here, with a #Logan12 Twitter feed).

That panel and the entire spirited weekend, organized and led by esteemed investigative producer Lowell Bergman, tells us a fair amount about the business of journalism. Though it is not — like most of my work — concerned with the dollars and cents of the business, in its very essence, it describes why the current crazy-quilt economics of the business matters. Funding the journalism business isn’t like funding Sears and Kodak  (“The Newsonomics of the Long Good-Bye“) or other fading institutions. It’s not even about saving a perhaps-vital American industry, like the auto industry.

It’s about keeping a lifeline of funding open so that our best reporters can do their jobs.

I’ll call it the newsonomics of risking it all because that’s what these reporters do. Many of the other Logan participants and attendees, thankfully, do less life-threatening work. Yet those represented at the conference — from ProPublica, the Washington Post, and New York Times to ABC, NBC, and NPR — are among the cream of the crop of investigative work and produce work with real public interest impact.

As we endlessly debate pay models, whether or not to work with Facebook, how to deal with Apple and Amazon and multi-platform journalism, the Logan Symposium is good tonic — certainly for those of us who attended, but really for all of us who know why this business matters to democracy. Whether and how the economics of the new news business work out isn’t an arcane question; it’s central to our collective future. The value of good, deep reporting is truly priceless.

So what about the state of investigative reporting? Look at the glass as half full and half cloudy.

What emerged from the conference, surprising to some, is that national investigative reporting is keeping its head above water. Both NBC and ABC talked about their expansions in the investigative area, while companies like NPR and Bloomberg have put new resources in as well. Units at the Post, L.A. Times, and New York Times may not be growing much, but seem to be sustaining themselves, for now.

“For now” is an important qualifier, and New York Times managing editor Dean Baquet’s opening interview at Logan, in its over-the-top self-assurance, bothered many of the conference participants with whom I talked. (See my related post about that.)

Washington Post investigative editor Jeff Leen suggested that there were 200 investigative reporters paid by news media in the U.S., which I calculate as one for every 1.5 million Americans. That’s not a ratio that’s going to hold many big institutions — government, business, labor — to account. Maybe that’s why as Logan participant and new-media vet Neil Budde tweeted, “How many times will ‘existential’ be used this weekend? I think count is six so far.”

Importantly, it is largely the largest news media — mainly national and global ones — that continue to put money into investigative work; these are the Digital Dozen companies I identified in my Newsonomics book. For them, as NBC senior executive producer David Corvo put it, investigative work is a “differentiator,” important to distinguishing big news brands from one another in the digital age.

What’s going on regionally is more of a patchwork.

Dozens of people like the Logan family are using their wealth to fund investigative enterprises from coast to coast, most with little fanfare. The Knight Foundation, represented at the conference by its senior advisor and grant-giver extraordinaire Eric Newton, has put $20 million into investigative journalism. With the decline in newspaper budgets, and thus in funding of investigative teams at many regional papers, such private funding has been a lifeline, though there’s a profound sense that significantly less in-depth work is being done at former powerhouse regional papers.

This Logan conference lacked the always-odd spontaneity of a Julian Assange appearance, but it offered intriguing emphases:

• Front and center, though not appearing in person was Rupert Murdoch.After screening “Murdoch’s Scandal,” Bergman’s Frontline documentary that aired March 27, “The Murdoch Effect: News At Any Price,” made for a raucous panel. Milly Dowler attorney Mark Lewis told how the phone hacking scandal had consumed his life and spoke of the “commercial despotism of Murdochracy” in the U.K., given the News Corp. CEO’s multi-party, decades-long influence. Big questions: What next, and if and how this tale plays out in the U.S.
• “If it’s not on TV, the American public doesn’t know it,” observed Diana Henriques, the New York Times financial investigative reporter. Yes, we may be on the brink of this multi-platform age, where old newspapers like the Times and the Journal do video alongside print, but still — in terms of notice and public action — there’s nothing like the impact of TV documentary.
• This is a generational challenge. Journalism has always had its challenges, but never has there been more uncertainty about how one generation can pass along its best practices to the next. Through that foundation funding, a couple of dozen younger journalists and students had their way paid into the conference. Surveying the group on the last day, Robert Rosenthal, executive director of the Center for Investigative Reporting and California Watch, summed his baby-boomer generation’s role: “I’m a bridge — we’re all bridges to the future.”

Bridging is, in part, what Lowell Bergman’s program does. UC Berkeley’s Investigative Reporting Program is a partner in the new Collaboration Central project, along with PBS MediaShift. With new funding, IRP will soon move into a new permanent office. It provides lots of training and fellowships, bringing along new generations to work alongside people like the Pulitzer Prize-winning Bergman, whose career has spanned from early Ramparts through CBS, The New York Times, and Frontline, and who was played by Al Pacino in the tobacco industry exposé The Insider.

Bergman paid tribute to his one-time CBS colleague Mike Wallace, underscoring Wallace’s storied tenacity. That tenacity, based on Wallace’s fierce journalistic power (highlighted at CBS, in story and video), is what it took a non-journalist to highlight in Berkeley.

Jules Kroll, who led the invention of the modern intelligence and security industry, gave the trade good, pointed advice. Saying he had heard a lot of journalists talking about how beleaguered they are, he noted, “You have a big impact.” His shared his inside view of the power of a good investigation. Colloquial translation: Stop whining and get on with it.

And that’s always good advice. As ProPublica managing editor Steve Engelberg aptly said, “They were whining in 1989, when times were good.” That’s true. There may be more to whine about these days than in 1989, but the power of great public service work, sometimes when lives are on the line, is one of the things that must propel the trade forward.

The nation’s top investigative watchdogs convened last weekend to figure out how to better get the work of public interest, democracy-supporting news done, and I’ve covered that Logan Symposium 2012, over at Nieman Journalism Lab this morning.

Indeed, it was a power-packed — and collaborative — weekend, yet it got off to sputtering and almost jaw-dropping start.

Logan organizer Lowell Bergman, who heads UC Berkeley’s growing Investigative Reporting Program and is a longtime investigative producer and reporter (Frontline, CBS, New York Times+), led off with a Friday evening one-on-one interview with Dean Baquet, the New York Times’ managing editor. Baquet was subbing for Times editor Jill Abramson.

With a strong theme of collaboration — reporters sharing ideas and tips, TV and newspapers partnering, more is better than less — running through the conference’s schedule, Bergman tossed out an easy question for Baquet about collaboration.

“This is going to sound arrogant, but we need it less,” he said. You know, when someone starts off a sentence like that, he is usually right. Bergman gave Baquet a few more chances to explain himself….and sound less arrogant. Baquet whiffed, repeatedly.

His reasoning:

• The Times newsroom of 1200 is large enough to do what needs to be done, “unlike the Washington Post which has given up areas of coverage.”
• The Times seems like a more stable business now, with the fledgling success of its paywall — both making journalists feel their work is valued in the digital age and contributing to revenues. Baquet likened the paywall decision to the Times’ 1980 decision to launch a national edition, as milestones in the company’s strategy.
• “Reporters blanch at having two sets of editors.”

Asked what he thought of the Times/local collaborations with Texas Tribune, Bay Citizen and the Chicago News Cooperative (the second and third having recently been terminated), his response: “We got some good coverage out it,” particularly Texas “for the 20 minutes that Rick Perry ran for President.”

The Times as “the center of the world” approach seemed a bit odd Friday night. One audience questioner, hearing the comments, did ask with a tone of incredulity, “Surely, you can’t cover the whole country with 1200 people?” Baquet did allow that there are big issues in the non-national press, “The dirty little secret of newspapers is that many aren’t that good. For every Philadelphia Inquirer, there is a dipshit paper.” Which is kind of a problem if there are only two serious national newspapers in the country and 1400-plus non-national ones.

As he I talked with participants over the weekend, the take was unanimous: Baquet hadn’t been merely arrogant, but extraordinarily and doubly so, given the conference’s reason for being.

Now, most observers were quick to point out that Baquet himself had proven to be a good — and collaborative — colleague in his years in journalism in New Orleans, Washington, L.A. and New York. Still his words seemed out of place. Let’s maybe blame it on the cold pills he may have been taking to soothe an ailment.

Whatever, the pose seems dangerous.

It’s wonderful that the Times still pays 1200 people, but how much longer will it be able to? In the depth of the recession, it cut more than 100 positions and as recently as last fall had to offer newsroom buyouts. Its financial future is far from assured, with its print advertising woes a great weight going forward. It is not out of the woods; it may simply be seeing a clearing.

When times get tougher, and they may well soon, the Times will need friends. You know, those people who are with you in the good, and bad, times. Talking like the king of the hill doesn’t win friends. Beyond that, even the Times’ 1200 staffers only provide limited capacity, and in the total distribution era of news, capacity counts. That’s one of the things that has made the the local collaborations of the Times such an interesting experiment. Could it generate more journalistic capacity — quality journalism that met its standards, though it was done by non-Timesmen and Timeswomen — with the local partnerships?

We’re left wondering what the Times learned from those partnerships, and where it goes from here. We’re used to not feeling warm and cuddly about the Times; arrogance has often walked hand-in-hand with its great journalism.

Yet, journalism, inevitably is a humbling trade, and even the Times is better off, for itself and for all of us, remembering that.

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So what is it? iTunes for magazines? Maybe Hulu for periodicals? How about Piano Media for American titles? Tivo for print?

In the hurly-burly of digital content innovation and monetization, it’s hard to figure out what things are, so we try to find apt comparisons. With the new Next Issue digital newsstand, let’s think Netflix or Pandora or Spotify as the closest cousins. Next Issue, the offspring of five prosperous parents (Time Inc., Conde Nast, Hearst, Meredith, and News Corp.), launched last night what I think will be a model-changing product for publishers.

In short, the Next Issue kiosk idea is transformative — though we’ll have to see how quickly customers take to its unknown brand.

It offers single-priced, all-you-can-eat access to top-shelf magazines, including Time Inc’s People, Fortune, Sports Illustrated, and Time; Conde Nast’s Vanity Fair, Allure, and Conde Nast Traveler; Hearst’s Esquire and Popular Mechanics; and Meredith’s Better Homes and Gardens and Fitness. Thirty-two magazines in total, at launch.

Magazine publishers long eschewed the web as largely detrimental to their business, and they participated on it unevenly and haphazardly. Without the loss of classifieds threat experienced by their newspaper cousins, they could better afford to hold back, though many titles have seen a steady decline in both circulation and advertising revenues.

So when the tablet came along, they sniffed it with great interest. In terms of size, it looked like…a magazine. Sports Illustrated demoed it first and that WonderFactory-wow-of-a-prototype has generated 1.135 million YouTube views in three years. Since then, magazine publishers have moved faster than newspaper publishers to embrace the tablet. Some have told me they expect the tablet to grab a third or more of their print subscriber bases within two to three years. Many have put all-access pay-me-once subscription models into place, making it easy to pay for print and get tablet, too.

They’ve grumbled and growled about Apple’s onerous customer data and revenue sharing, but have moved ahead, in varying degrees with Apple’s Newsstand and other sales outlets. Additionally — and here’s the big difference with the newspaper industry — they pooled their efforts in Next Issue. That company is owned by the five behemoths, and it had difficult birth pangs. At times, it has seemed that Next Issue would become a side attraction (as so many publishing industry consortia become), just dabbling in the Android slice of the tablet market (though the slice is thickening).

Behind the scenes, though, it looks like Next Issue has become a major play of magazine publishers. Though the kiosk at launch only works with Android devices, expect iPads (and then iPhones) to be on board by late summer; Next Issue is about to offer up its product for Apple approval.

Non-Android users can get a sense of the product at Next Issue’s website, though the tablet, of course, is the best way to experience it, as Next Issue CEO Morgan Guenther affirmed yesterday in an interview: “It’s all about touching product.” Guenther, a former TIVO exec, is a West Coast guy, and interestingly Next Issue seems like a bi-coastal play.

Last June, Next Issue released some beta products, all in run-up to this kiosk. “In Silicon Valley, we call it beta. In New York [where most of his owners reside within a few dozen blocks of each other], they call it ‘preview release.’ Business operations are in New York, but it’s the 40-plus product people and engineers in Palo Alto that have worked to create this Next Issue experience.

“It’s all about the USP,” says Guenther. And you can’t have a unique selling proposition, if you don’t have a compelling, ahead-of-the-crowd customer experience. While I’m Android-less, there are a number of reasons to believe that Next Issue may have gotten the new product right, or at least, righter than many of the products or consumer propositions out there.

Let me outline seven things to watch as you take a look at Next Issue:

One way to read: Sign up once — and the new site is offering relatively generous 30-day trials — and you have but one navigation to learn. While the full content from each of the magazines is present, with added video, Next Issue says customers need only learn one way of getting around. If it’s an intuitive design, that’s a huge plus, as news- and feature-hungry readers find ourselves forced to learn the navigation nuances of each of our favorite apps.

One price: Well, almost. Next Issue’s pricing seems simple enough:

• Buy a single copy ($2.49-$5.99) of a magazine or a single subscription($1.99-$9.99 a month), and with the latter, access to growing archives that began Jan. 1, 2012.
• Buy one of two kinds of unlimited passes. For $9.99 a month, you get Unlimited Basic (think cable tiering). For $14.99 a month (or $180 a year), you get Unlimited Premium. At that tier, you get Times Inc’s Entertainment Weekly, People, Time, and Sports Illustrated — plus Conde Nast’s New Yorker.
• If you’re a print subscriber of an all-access-offering magazine, like Time Inc’s, you can get free access through the Next Issue site (and even if you’ve already “authenticated” through Time’s direct app). That kind of seamlessness is customer-pleasing.

The 32 launch titles are premium, not the low end of these publishers’ collections. Next up: adding more owners’ titles, and then non-owners’ magazines.

Newspapers? Well, maybe some, says Guenther. If so, think large regionals like the L.A. Times, Chicago Tribune, or Houston Chronicle, and not a proliferation of small, local paper apps. Not (yet) represented: Next Issue Media owner News Corp.’s The Daily, which as a magazine-like newspaper might fit in well here.

Revenue splits built on “engagement”: So Next Issue, for its work and investment will take a “industry standard” commission, which we can figure is in the 25-40 percent range. While Guenther won’t disclose the formula for divvying up the subscription revenues among publishers, he does say it will be built on “interaction by the consumer.” That sounds similar to what Piano has pioneered in sharing revenues by tracking actual reader usage of content. Consortia often fall apart on revenue sharing issues, so just getting an initial deal done is noteworthy.

New accommodations with Apple: Just as Netflix is newly playing with Apple and ponying up its commission cut, Next Issue looks like it will play along as well. The big reason: Next Issue owners have found, says Guenther, that most of their digital subscribers are new, non-print ones. With cannibalization of the print base less of an issue, paying a rev share to Apple becomes a less emotional cost of doing business.

Get ahead of Flipboard: It’s not a Flipboard-killer, but it’s intended to aggregate before tablet aggregators get the better of the aggregatees, as they’ve done on the web. Flipboard remains a superior browsing experience — cool, comfortable and serendipity-pleasing — and importantly offering a blend of changing content all within one interface. While Next Issue offers a single navigation, it’s not a blended product in the same sense that Flipboard is.

Down the road (how far will be the question), says Guenther, are the additions of search and personalization — and maybe, should the publishers allow it — cross-title topical bundles of health, fashion, or travel products. (Remember Mine magazine?) Should Next Issue continue innovating, combining the best of high-branded bliss with Flipboard fun, it could triumph. Flipboard, for its part, could still find a place in this adjusted ecosystem funneling some new (and younger) readers into Next Issue’s payment system, for a cut of the action.

It’s all a set-up for the print-to-tablet transition: So will a third of print magazine readers prefer the tablet sooner than later, as surveys seem to tell us? Readers love tablet magazine reading. If they transition quickly, and are paying subscribers, then the big business question is advertising.

Tablet ads continues to fetch rates (mainly for national publishers) five times or more greater than web ads. That differential may moderate, but the tablet’s immersive, customer-educating, consumer-grabbing capabilities offer major upside to advertisers and sponsors. It will take a couple to several years to reach some maturity, but the tablet ad ecosystem is developing quickly. Consider that earlier this week, we learned that both Hearst and Conde Nast will start releasing key-to-advertiser metrics on tablet usage, and that the Association of Magazine Media announced its own guidelines. The association goals: “to drive growth of advertising on tablets,” by providing data on:

1. Total consumer paid digital issues

2. The total number of tablet readers per issue

3. The total number of sessions per issue

4. The total time spent per reader per issue

5. The average number of sessions per reader per issue

In another words, just as Next Issue launches, the ad foundation is being thickly laid.

A model and a warning for the newspaper industry: In one sense, newspaper titles are very different than magazines. Other than the U.S.’s three national titles, newspapers are by nature local, appealing only to tiny slices of the national population. Yet in creating a single place to buy subscriptions, or single copies — and then potentially packages of content  (“The Newsonomics of 100 Products a Year“) — Next Issue is well ahead of the U.S. newspaper industry. Piano Media, in Slovakia and Slovenia and soon farther west, is testing the newspaper portal notion, with fledgling, if small-scale, success.

AP’s new mobile apps create a better national/local aggregation that its first-generation did, but they don’t lead to digital subs. Press+, with now more than 300 customers, has the capability to create a newspaper kiosk, but has seen little enthusiasm among its customers to do so.

One big question for Next Issue is who will notice it? It’s been a business-to-business brand largely. Consumers know how to buy magazines from magazine sites or from Apple or Amazon, but they don’t know much about Next Issue. That stealth position may be one of the reasons its publisher owners have gone forward with it.

They can hold onto, they think, their current print subscribers, transition them over to all-access over time, and use Next Issue — as it tests out new markets — to find new readers and customers.

So what is Next Issue? It is a Netflix wannabe, in the CEO’s vision. Visit, see a bunch of choices, queue ‘em up, and pay a single price for unlimited usage. It’s not iTunes with individual price points. It’s more like the Pandora or Spotify pay-us-once-and-forget-about-it model. And like all digital-native companies, it will focus as much on harvesting data on its customers and their usage, knowing that intel may be a large part of the company value going forward.

That makes consumer sense. It could make a lot of consumer sense.

Let’s recall the innovative New York Times paywall model. The Times priced digital + Sunday print $60 below digital only. That meant a significant number of new Sunday subscribers (home delivery Sunday subs went up for the first time in five years), but it also meant some number of seven-day print subscribers giving up the print habit for Sunday print + digital.

In the Next Issue case, well-magazine-read consumers may do the math and find the $180 a year premium bundle (all-you-can-read, including archives, of all the magazines in the kiosk), such a good deal that they’ll drop individual magazine subs. My first math shows that if you subscribe to seven or more titles, that price point may be economical, though if you get the Next Issue pass, you’ll be passing up the print editions of the magazines, which publishers are almost throwing in these days, à la NYT.

So we can see the planning in the pricing: preserve print if you can, bring in new digital-only customers, and then upsell those into print for as little as five bucks a year more.

Aggregation. Customer ease. Pricing that psychs out consumers. We see the makings of our new print/digital/print world.