Law 9 – Apply the 10 Percent Rule

For Reuters, it’s a leg up in the agency world, and part of its big U.S. push (see my Thursday Nieman lab column, “The newsonomics of Reuters’ Americanization”). Reuters gets a semi-exclusive, able to exclude a handful of key competitors, including AP, from doing similar syndication. The wire offers no financial guarantees, but offers the three promises INN members, and Davis, are banking on to propel them forward, and importantly establish a new syndication leg of revenue, as non-profit funders push for funding diversification.

It sounds like a dream come true: cut costs and maintain control of the business. The risk: What will the FT — which won’t be selling digital subscriptions through Apple’s stores — miss out on? What about the lead generation Apple’s 200 million registered (with credit cards on file) users can offer? That’s one potential downside, finding its competitors, including the Wall Street Journal in iTunes, but no longer the FT. Another: what if readers — we who have been lately conditioned to believe in the miracle of sprightly presentation of apps, as compared to the mundane “online” world — don’t take the web app jump?

In this evolution, the iPad is so far our human pinnacle, though it will be followed by wonders to come. It also marks a signal change in digital usage, and especially in digital news consumption. I think of it as the likely missing link in the digital news evolution. It’s a link that, out of the blue — or maybe out of the darkness — has offered news companies, old and new, the unlikely (last?) chance to get a new sustainable business model.

So, if California Watch were to be totally supported by foundation money, it would take an endowment of $54 million to throw off $2.7 million a year, at a five percent spend rate. Now $54 million raised one time isn’t an impossible sum. Consider just one gift: Joan Kroc left NPR more than $200 million eight years ago. Consider that the billionaires’ club started by Bill Gates and Warren Buffett (encouraging their peers to give away half of their wealths) is talking about newly raising a half a trillion dollars for the public good.

What’s coming: Tablet specials on sports events, leisure, travel, health, and other social events. In other words: the range of what newspapers traditionally cover in feature sections, but with the content and presentation thought out with a magazine approach. That’s why iPad specials or singles should be big, whether produced by newspaper or magazine companies. Some American publishers are already thinking about home and garden, sports commemoratives, personal finance, and travel.