Law 9 – Apply the 10 Percent Rule

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.

let’s call it the newsonomics of small things, with a nod to Mr. Jobs and to Meinolf Ellers’ realization. Let’s focus on Small Things as opposed to Big Things — meaning traditional advertising and circulation, the long-in-the-tooth double-digit contributors to newspaper company revenues.

It would be great to replace those-end-of-lifecycle business lines with other Big Things, but those are few and far between. Google developed the Next Big Thing of paid search advertising, and continues to dominate that $40 billion global industry, with 76 percent market share in the Americas and 94 percent in EMEA, according to Covario, an large, independent search marketing agency. AT&T and Verizon replaced their cycle-ending landline business by going Triple Play, adding broadband and cable to their revenue lines. Facebook cornered the market on a little segment called global social connectivity. Newspapers have been searching in vain for two decades for such Big Things and have come up short.

So let’s touch on six Small Things — each now a small egg, at best a single digit contributor to overall revenue. Then let’s toss in a couple of Wild Things, fliers of businesses that might work.

The 100-product-a-year model is a much-needed growth model. We can see how it fits nicely with all-access subscriptions, and together we have two interconnected Lego blocks of a new sustainable news model. We have two essential parts of a crossover model (“The Newsonomics of Crossover”) that I detailed here a few weeks ago. The big, hairy challenges of accelerating print ad loss and onerous legacy costs remain, but at least we’ve got a couple of building blocks we didn’t have two years ago.

The Infinity Stopper: The Internet has just gotten too big for its britches. It is spilling over into our bedrooms, through tablets and smartphones. It assaults us in elevators. It even threatens the passivity of our living-room TV experience, a particular hazard to our culture as Americans lead the world (save Serbia and Macedonia) in couch potatohood. The Infinity Stopper, though, handily offers to put a plug in some of that content, boundaries you know that any media psychologist will tell you are the must-have for 2012. Somehow, The Economist (“Yet Another Reason the Economist is Trouncing Competitors“) got one of the beta Infinity Stoppers and has been going to town with it, extending its limited print franchise into a limited (and quite successful) digital franchise. The simple secret of the Infinity Stopper: a beginning, a middle — and ta-da — an end to the stream of content. As infinity-loving tablet aggregator products now prolliferate (Google Currents and Yahoo Livestand joining Flipboard, Pulse and Zite), both The Daily and AOL’s Editions test out their own versions of the Infinity Stopper, offering a daily snapshot for infinity sufferers. Expect the sale of Infinity Stoppers to mushroom, as publishers just say “no.”

“It’s basic human psychology,” says Silas Lyons, editor of the Record Searchlight in Redding, Calif., VP of new media content and a co-chair of one of the Scripps’ task forces that pushed forward with the game dynamics idea. “We’re not trying to solve an audience problem — we’re trying to solve an engagement problem. The reader is being rewarded for consuming, sharing, commenting, and finding insight.”