Law 3 – Local: Remap and Reload

The deep freeze in the U.S. newspaper market thawed a bit over the last couple of weeks. There really hasn’t been much of a market for metro newspapers for almost half a decade. With advertising revenue down now 21 quarters in a row, it’s near-impossible to fix a value on newspaper properties. For valuation, we’d need some high likelihood of stable profitability for the next several years, and that’s not in the cards. So what do we make of the three recently announced sales? In each case, there’s a strong, willful buyer, bucking conventional business sense to bull ahead into 2012.

In San Diego, we’ve moved from an old-fogy, often clueless, newspaper family (the Copleys) to on-so-private equity and now onto more overtly political ownership. The saga of dailies is taking some odd turns, and I fear this is a new chapter we will soon see written in other cities.

“To my way of thinking,” Lynch said, “that’s a shovel-ready job for thousands.”

Now let’s turn the news and magazine industry, and ask a few questions:

–What’s the difference between a shipping fee and a subscription?
–What’s the difference between a buyer and a reader?
–What’s the difference between a newspaper subscription and a membership that gets you “free” media?

2012 budgeting, still in full swing at many newspaper companies, is too much like a medical examiner’s exercise. What I hear: Dailies are budgeting down from mid-single digits to as high as low double-digits in print advertising for 2012, compared to 2011. That would compare to how much they’ve already lost this year, compared to last year. Those are brutal numbers.

With the launch of Livestand, we see the beginning of Aggregator Wars 2.0, to be fought on a tablet near you.

Livestand pushes the question: How are we going to receive news and features via the tablet, through individual apps (paid or free) or through an aggregator? And how are publishers going to monetize their content and audiences, as those audiences move dramatically from newspaper, magazine and broadcast to the tablet? A Pew data point: “A majority, say the tablet takes the place of what they used to get from a print newspaper or magazine (59 percent) or as a substitute for television news (57 percent).” (See “The Newsonomics of the Missing Link,”) So let’s look at the Newsonomics of Livestand.