Ask most publishers or editors about games, and they’ll tell you their business isn’t about fun and games. It’s about the serious, semi-Constitutional role of informing the public.

Game dynamics may change that thinking.

When we think of games these days, our minds move to enraged birds or fortune-seeking farmers. We think of the little games now app’d onto our smartphones, a diversion, something trivial. But think of the playable game — the fun — as the hood ornament. The business of game dynamics — or gamification — is what happens under the hood.

Game dynamics isn’t about time-wasting. Au contraire: it’s about a seductive, powerful drawing-in of human habit. It’s about changing those habits, leading us to do new things (over and over again). This being America, those habits increasingly have a lot to do with selling stuff, with commerce. On the Internet, they increasingly help companies chase greater engagement with customers, be they buyers, readers, or both.

Silas Lyons is a pioneer among newspaper people in understanding the potential value of game dynamics to the news business. “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.”

Lyons explained the new notions to readers, in a column, entitled “Civilization comes to Redding.com.”

The goal here isn’t simply to build core customers. It’s to bring greater civility and perspective — what Lyons calls “insight” — to the site. Readers now can mark others’ comments as “insightful,” resulting, over time, in higher ranking of commenters the community seems to value. You gotta love it, at this time and place in America: Let’s play civilization.

The Redding Record Searchlight (circulation of 25,000 on Sunday, 22,500 daily, and more than a half million unique visitors monthly) is an E.W. Scripps newspaper located in northern California, about 200 miles north of San Francisco. It’s far from big media markets and a paper of record for its far-flung geography. In print, it’s long been a little center of civilization, a community center. Online, it hasn’t, like most newspaper websites. The new initiative, partnered with gamification pioneer Bunchball, is an effort to apply old values on the new medium.

Take a look at the two-week-old new features page on Redding.com. Readers are invited to check it out with an invitation at the top of the home page: “Redding.com now recognizes users who contribute to the community. Explore the new features“.

It is prize- and recognition-based. “Badges recognize you for being a valued member of our local news community”. They can earn points a number of ways, including viewing stories or photos, sharing news on Facebook or Twitter, or commenting on a story. The more you participate, the more points you earn. Your points build on your profile page — your own place on the site, your “trophy case” — and allow you to compete for placement on Redding.com’s leaderboard.

Overall, the two- to three-week-old metrics are promising. Registration is up 35 percent and comments are up 19 percent. 7,600 users are in the game. (Redding.com’s top user has toted up 8,800 points already; profile here.) 16,200 comments have been rated “insightful.”

“We’re seeing some very strong movement in engagement — users commenting, marking other comments insightful, sharing our content, registering, opting in to email products and news alerts,” Lyons told me this week. “If these trends hold up, they give us a very strong foundation on which to build. The key to making this work so far, and potentially to building it out in the future, has been the Scripps development and user experience teams. They’ve been working deep in the code and templates so that the game dynamics are tightly intertwined with the full experience on the site, and they’ve created something that relies on our technology partner, but is really unique. It doesn’t feel bolted on, because it’s not. Strategically, that’s where we want to be.”

In addition to the civilizing effort, what are the newsonomics of game dynamics? More page views and greater audience data-for-targeting for advertisers, for starters. Engaged core customers who really make Redding.com a starting point, a center of their digital lives will be a great market to serve anything from daily deals to special services to new products, and possibly to charge for digital access (as Redding watches Scripps’ digital circulation initiative soon to be tested in Memphis.)

The Redding experiment is an intriguing one and good start. It forces us all to think about what community, community engagement and civil behavior should be in this digital age. Redding.com is emphasizing commenting out of the chute. That may be worthwhile — it’s high-minded to hope that insight can be rewarded — and we’ll watch eagerly to see how it succeeds.

But commenting, I think, is at best the tip of iceberg here. We really want to greatly re-engage local readers in community, engagement far beyond what was ever possible in print. That print newspaper was a wonderful community water cooler — with 50-percent-plus household penetration — but it was tough for readers to go beyond discussion.

Now we have the tools to do that. So let’s start to think about the kinds of additional engagement that game dynamics could incent, re-enforce and help build. We’re five years into thinking of readers (courtesy of Jay Rosen) as the people formerly known as the audience. Readers are a lot more than audience these days, but can we use habit-forming incentives to create new pro-news behaviors? For instance, what if news companies provided a wider array of incentives for help in:

• Crowdsourcing: Occasional news tips are great. What if community tipsters got points?
• City guide population: MediaNews’ new TapIn Bay Area tablet product is big into points as well, as it seeks to have readers help it build its next-generation city guide product. Newspapers have something of value to offer those who help populate city guides that Yelp doesn’t: digital (and/or print) subscription discounts, better daily deals and ad discounts for merchant contributors.
• Blog writing: Gamification can support pro-am community blogger outreach. “Pay” ongoing contributors with points.
• Buying stuff: Why not earn points by buying stuff from advertisers? It’s co-op, game-inflected capitalism for the 21st Century.
• Data crunching, visualizations: The Guardian and The New York Times, among others, are open-sourcing more of their code, inviting wider collaboration. Why not incent this behavior as well?
• Design: Build a better site section, a better app or a cool new product. Give major points — major benefits — to those who make major contributions.

For one great example of applying incentive techniques to business building, check out WSJ’s Andy Jordan’s Tech Journal video segment, “From Web Surfer to Successful Inventor.” It tells the story of New York invention start-up Quirky, “a social product development company,” a great tale unto itself. But catch this quote from Quirky’s 24-year-old CEO Ben Kaufman: “For literally centuries, it’s been really, really hard to make stuff. You needed access to capital. You needed to know the right people. You needed to be multi-disciplinary between design, engineering, manufacturing and retail, and you needed all these things to push one new product out into the world. We’re just not okay with that.”

So Quirky uses its widening community to refine dozens of products in invention. It incents contributors with something we all understand — money — and shows their small, but growing, receipts (based on the value they add to the products) in real-time on a website.

Creating new physical goods is in many ways harder, and different, than new digital news goods, but the thinking is immediately applicable. Are the rewards points, or badges, or money, or community standing? We don’t know yet, but there’s clearly a new ability to value readers — and for readers to value news/community centers.

That belief is increasingly shared. Scripps, along with MediaNews’ TapIn, is one of the leading-edge experiments here. Hearst and Morris are testing out gamification. Even The Economist tells me it is looking at testing game dynamics over the next year.

These game techniques are beginning to pervade our lives. They are used by media more widely, and by merchants of all kinds. Mike Earhart is vice president for marketing at Silicon Valley-based Bunchball, Scripps’ technology partner. The 40-employee company was into games “too early,” he says, before mobile ignited casual gaming. So it turned to helping established companies use game techniques. It counts 125 million unique visitors through its products, with those visitors executing 2.3 million “actions” a month.

Bunchball has worked with NBC (“The Office”), Bravo (“Top Chef”), Meredith National Media Group, and Wendy’s among others. Using game dynamics to jumpstart new business strategies may seem like a stretch — initially — for both marketers and media. Yet, says Earhart, it boils down to using the new techniques to answer an age-old question: “What are you trying to get your users to do?”

The Bay Area News Group’s announcement Tuesday caused a few ripples, and some head-scratching. “About 120 lose jobs in Bay Area News Group re-branding, streamlining,” read Poynter.

Hadn’t we read that story before? Didn’t MediaNews already reorganize its Bay Area papers? Hadn’t it cut lots of jobs? Didn’t it change its circulation reporting methodology to get one big number for readership — and ad sales? Yes, yes, and yes, plus a litany of other related re-orgs that may have confused us.

In short, Bay Area News Group (BANG), which has had 15 separate titles,announced it was combining 10 of those titles into two new ones (the East Bay Tribune and the Times), closing a printing plant and gaining other production efficiencies. Gone into history will be such titles as the Oakland Tribune, the San Mateo County Times, and Contra Costa Times, along with another 8 percent of the overall workforce — or another 120 or so jobs, 48 in newsrooms.

It’s one sad tale of decline, further decline, and then more. MediaNews’ experience isn’t unlike that of many of its brethren; it just offers a breathtaking vista of newspaper loss — and reader loss. I, too, was inured when I first saw the news break, and a bit confused about what was new news and what was old news. Then, yesterday, Bay Area public radio station KQED’s Forum with Michael Krasny did an hour on the massive new changes, and asked me to participate, along with David Weir (associated with Salon, the Center for Investigative Reporting, and now 7×7), and Newsosaur analyst Alan Mutter.

We heard from a number of callers. A few shared concerns about the news emergency. Some were willing to pay for news; others were devout advocates of the church of free news. One call, though, stayed with me.

A woman named Laurie called, saying she was court-appointed conservator. She talked about elder abuse.

Two colleagues and I have been working for 15 years on a very elaborate scam by a couple of individuals, and they’ve taken hundreds of thousands of dollars, homes and cars; it’s very complex…The news is our last great hope for justice for these elders. The Adult Protective Services has been cut. The two detectives we’ve worked with are being laid off. The DA’s office is too strapped. We’ve been working with a reporter, to get in front of people to show the outrage. The crime just goes on and to see the newspapers get cut back is really hard.

This is loss.

It’s a breakdown in which the press is both cause, given its weakness and lesser ability to call attention to such outrage, and a victim of collateral tech-driven damage. We live in a society that knows how to measure lots of things financially, but less and less non-financially. Sophisticated metrics tell us how well we’re doing with hard value and throw up their hands at things that can’t be measured but are deeply felt.

It isn’t simply the sad loss of middle-class journalism jobs, as lamentable as that is, just as so many other good jobs that have disappeared in recent years. It’s a community loss, and points to the wider impact of news cuts on the society in which we live. That’s often forgotten as we focus too narrow on industry loss.

The Bay Area News Group cutback, in fact, reflects much of what we are coming to miss. So let’s look briefly at this newsonomics of loss, a function of our times, even as much is being rebuilt — and gained — at the same time:

• Identity: The soon-to-departed (in November) Oakland Tribune is 137 years old. It will be subsumed under the East Bay Tribune nameplate. The East Bay Tribune will stretch from Oakland south to Fremont, a stretch of 27 miles and at least 1.5 million people, many of whom don’t feel connected to the geography Media News now asserts. Newspapers are all about community identity; they have both reflected it and provided rallying symbols of it. Business efficiencies may argue for “East Bay,” but readers’ senses of what’s local are something else again. With this decision, Oakland, for one, has lost something of itself.Dori Maynard, president of the Maynard Institute, and daughter of Robert Maynard, who revived the Oakland Tribune before selling it in 1992 to MediaNews, summed it well this week: “It was a newspaper that you had to read and people took pride in reading….My father died knowing that Oakland had a newspaper and that was really important to him……[Former MediaNews CEO Dean] Singleton kept it going for a long time.” (For a contrarian view of how MediaNews damaged the Maynard legacy, check out Zennie Abraham’s SFGate post.)
• Reporting: Most of the jobs cut in this re-org are on the production and printing side of the business as BANG closes one of its four regional printing plants. However, 48 jobs are being cut from the East Bay newsrooms, about a quarter of the unionized editorial workforce, and that’s got to affect news-gathering. The company has already moved regional production from San Jose to Walnut Creek, to take advantage of a lower-cost union contract. Like most companies, Gannett and Tribune among them, MediaNews is templatizing as many sections (common business and tech sections, for instance) and pages as it can, cutting out production and design, while trying to preserve reporting. Yet, the reporting loss already has been huge, with the best estimates saying that newsroom size of the Bay Area papers overall has been cut in half over the last 10 years. That’s hundreds of reporting jobs, with the once-Top 10 Mercury News now operating in a semi-empty building.How much of the reporting that does see the light of day will be “local”? Each of the new consolidated titles — the East Bay Tribune and the Times — will have single metro sections. That means what’s local to reader won’t really be local to another. Regional, while valuable, isn’t local, and in fact, has seemed to be a hindrance to metro papers as they try to find some footing in the increasingly digital news reading world. Is MediaNews’ move here a smart one, or one that makes its new titles even less vital of a read for its audience?How many elder abuse-like stories never see the light of day? How many corruptions, large and small, are unfound? We don’t know; we don’t know what we don’t know.
• Community leadership: Many chains are cutting their executive costs by combining publisher and ad director positions, with the actual duties concentrated on the ad (revenue-producing) side. Both business and editorial oversight of newspapers increasingly happens at the corporate level. BANG appears going down that road as well, though I couldn’t verify how much. Clearly, though, further homogenizing newspaper titles and operations furthers this trend. As community publishers disappear, community groups — from chambers of commerce to Rotaries to library boards — lose a key connection to the paper. A publisher is often the business face, sometimes more popular than other times, but serves as a connection to an important civic institution. Neither editors nor ad directors, no matter how well they perform, can fulfill that role.

While putting a semi-optimistic face on the changes, with talk of rebranding, there is little mistaking what’s behind MediaNews’ moves. Like all newspaper chains, it is struggling with year-over-year ad revenue losses. It is tentatively trying to find some small, new digital circulation revenue. It is experimenting with new tablet products, like its TapIn launch. It is hoping and praying a double-dip recession (“The Newsonomics of the Next Recession“) doesn’t blow it off the financial tightrope it is already walking. Without a permanent CEO (Dean Singleton moved aside in January and has only been replaced by interim Gordon Paris), this company heavily directed by Alden Global Equity is doing everything it can to operate in the black, preventing financial loss, even as all the other losses mount.

In short, it is hunkering down, while it tests some digital initiatives. This MediaNews restructuring, with all its implicit and explicit loss, seems less a strategy than a new phase of a holding pattern, as the old newspaper industry hangs suspended in disbelief and disorder.

At the end of the KQED hour, Oakland Tribune editor Martin Reynolds called in, plaintively responding to several callers’ statements that the quality of local journalism had declined. He acknowledged that much had been cut (the Tribune’s newsroom in 1995 had 40-plus people, and that’s down to a mere dozen today), but talked about the dedication of the current staff and the good journalism they produce.

It was a good coda.

It’s important to mark the multiple losses, and let what has been lost sink in for a short time. Then, it’s important for all the journalists still employed — those remaining at MediaNews’ Bay Area properties, those at the financially reeling Chronicle, those at national model start-ups Bay Citizen and California Watch and those at news staff-building KQED, among others — to do what journalists need to do: Forget the uncertain business around them and report the news as best they can.

Nothing (witness Jim Romenesko passing into semi-retirement this week) lasts forever. But there’s always news that needs reporting.

We’d all like to know what comes next. That can be a spiritual quest, a political one, or in the case of news publishers, one that would help them know what it is readers who land on their site would like to read next.

A new batch of news-oriented tech companies are hitting the marketplace, claiming to better understand — and help news publishers act on — what readers are more likely to read next. Know that, and publishers can better satisfy those readers, getting them to click on more pages, providing more ad-targetable data, and growing their businesses on the relative cheap.

It’s another riff on publishers’ renewed concentration on core readers, satisfying them more deeply and getting them to spend more time on site and maybe even pay for a digital subscription. It’s another way of saying we need more revenue per customer (“The newsonomics of ARPU“). New customers aren’t being minted overnight (most news sites’ unique visitor growth has stalled), so it’s time to improve the experience of current customers. In general, this is all part of  movement to better understand the news business, by the numbers.

In macro terms, if the U.S. newspaper industry could use these newer technologies to improve revenue by 10 percent, that would be worth about $300 million a year, collectively. That’s a big number in the new no- to low-growth era we’re in.

Three companies — YieldBot, Jumptime, and Outbrain — are among those who offer news and media companies differing approaches to better reader engagement. Each has its own story to tell, and each is emblematic of a wider trend in the industry: mastering how the digital business is oh-so-different than print.

They have a common belief in the limitation of human intelligence, especially that of the common editor.

The human reader brain, goes the theory, is far more unpredictable than editors ever believed. (And most editors I’ve known have a low, low regard for readers’ brains.) Online, editors and designers have long packaged stories, placing whatever stories seemed relevant to the story being read, either manually or by simple algorithm. Of course, that’s worked — to some degree.

To how great a degree now is increasingly measurable. And these would-be tech partners are telling publishers: you are leaving stories (and money) on the table. We’ll show the real, provable relationships between stories and by adjusting your presentation, you’ll bump up your pageviews — especially among valuable core readers — and make more money.

It’s an evolution of thinking beyond a single edition of a newspaper, read from front page to back, in an orderly fashion. Few people actually read papers in that orderly a fashion, but that’s how publishers and editors thought about it. Then they constructed their online sites the same way, with disproportionate attention to the hallowed home page, some attention to the section “fronts” and less to the “article” pages.

Now as sideways traffic — greatly multiplied by Google, Facebook, and Twitter links, mentions and touts — has become recognized as the way things really are, publishers need new understanding. There are real, discernible patterns of behavior, if you crunch a lot of data, and these companies can show it to you on graphs, scatter charts, clusters and more. Let your online presentation people link stories or sections they wouldn’t have otherwise linked. Let your audience management people make longer-term decisions about how valuable that Facebook traffic was compared to that Google traffic. Let your ad staff have the ammo it needs to prove out the kind of visitors who are attracted to certain site sections.

“Sure, we’ll show you where your readers come from and where they go off to, but the real question is what they do when they get to your site. What’s happening at this moment,” says Jonathan Mendez, CEO of New York-based start-up YieldBot. Mendez, a self-described “crusader for relevance,” was a principal at ad optimizer Offermatica before it was sold to Omniture in 2007.

L.A.-based Jumptime paints itself as an “optimizer.” It, too, is focused on what happens once someone hits a news site. Jumptime is all about better routing. Using its “Flo-Power” metrics, the company assigns value to different pages not just on the basis of its individual usage, but largely on how well that page performs in redirecting traffic elsewhere on the site. Some pages are freeway cloverleafs, others not so much. “Why would you send someone to a cul de sac?” asks Michele DiLorenzo, Jumptime’s CEO, an MTV business development veteran.

Both Jumptime and YieldBot give you real-time info on which pages are creating high bounce (exit to other sites) rates, for instance. “A page,” says DiLorenzo, “is a determinant of what happens next.” And wouldn’t we all like to know that?

Outbrain takes a different approach to the same issue. It produces seemingly simple modules of what appear to be “content recommendation” links. Aggregate Knowledge, Inform Technologies, and Sphere (first bought by AOL, rebranded and then sold to Outbrain this year), among others, have plowed similar territory, but never got much traction with news publishers. Outbrain says it produces links that are “things of interest, not just related.” It’s another complexity-reducer, applying its algorithms to individual and group reading behavior, maybe offering a Spanish debt story or a how-exercise-will-save-your-life article to someone reading a Jihadists-target-Letterman piece. Counter-intuitive, but customers say it works to juice traffic.

Outbrain is a five-year-old New York-based company, which just launched its mobile product. It enables publishers to optimize site usage, like YieldBot and Jumptime, and also offers several networking features, recirculating both traffic and small revenues among its numerous member publishers. It has the most established base of customers.

Both Jumptime and YieldBot are newer entries, now testing their products in beta with a few major publishers, looking for an edge. Each site offers consoles and tools to manage data, draw intelligence from it and make real-time or over-time decisions from it. Jumptime works a on fee-for-service models, while YieldBot and Outbrain focus on revenue shares.

The mantra of these companies: Counting traffic with Omniture, Chartbeat, and Google Analytics is oh-so-first-generation. They will tell you how people got to your site and where they are going, but it’s tougher to get real, actionable intelligence about what they are doing on your site, and what they might do, given different content choices.

“Publishers don’t know the [relative] value of their assets,” says Jumptime co-founder Anke Audenaert. “Can you imagine operating a business and not understanding the value of your assets?”

Of course, publishers thought they knew that. They thought, though, of value created by whole editions, circulation value and ad value. Now as readers flit from one story/video/blog on one site to another on another site, all of these tech companies are saying, essentially, value has been atomized. Each article or page has a value, and that value grows or diminishes in context to other articles and pages. And you need our algorithm to figure it all out.

Of course, any good algorithm produces a better yield. Outbrain will tell you its algorithm provides a 6-to-8 percent lift in pageviews for sites that properly deploy its boxes of linked stories; some of its customers tell me they’ve gotten that and more. Jumptime will tell you it can improve revenue by 20 percent by maximizing that secret sauce of FloPower, creating that much more engagement.

These companies, and others like them, are in the business of modern divining rods. Divining rods for the digital age.

Mendez says it is all about intent, determining a web users’ intent better — and then satisfying it. “People have a goal-oriented state of mind,” he says Mendez. “Something is motivating them. That intent makes the medium good at demand capture.” He says big publishers, especially, have enough data to help advertisers better target readers; they just need to use it much better. “Media is worth much more than they are getting.”

Editor’s Picks is a new, prominent module on the right hand column of Google News. It showcases five links from two dozen of the biggest news brands — from MSNBC, to The Atlantic, The Wall Street Journal, ProPublica to the Guardian, Marketwatch, Reuters and the L.A. Times (but alas, no Yahoo News) — and offers easy-to-use instructions on how other publishers can get their content, for free, in front of Google’s many eyeballs. Publishers simply pick the stories they want represented and send ‘em off; that’s the proxy part because no Google person need be involved in editorial decision-making.

It’s a simple idea, really, a box of links, as old as the web itself. What seems revolutionary about, as Nieman Lab’s Megan Garber points out is that it seems like a departure from the ancient (2002) Google News dogma: “This page was generated entirely by computer algorithms without human editors…No humans were harmed or even used in the creation of this page.”

It kind of seemed cute then, this algo approach to the world. In the subsequent era, though, in which human editorial judgment has been diminished in value, and its funding put in jeopardy, it now seems like an approach from another age.

Go back to 2002, briefly, and we can see this simplistic Machine vs. Man way of thinking. In Google’s approach, the purest taken around news aggregation, man (and woman) was seen as interloper, getting in the way of the ultimate wisdom of the crowd. Newspaper people, of course resented The Machine, its ascendance and its job-killing nature.

For at least a decade, we’ve lived in this rhetorical age of either/or. Machine, symbolized well by Google News, and Man, symbolized by The Man, making his editorial decisions the old-fashioned way, on whim, wit and the indefinable “news judgment,” without regard to what the reader data said.

Now, we’re emerging, slowly, from the silliness. Newsroom editors are starting to use reader data, some through the day ( “The Newsonomics of WaPo’s Reader Dashboard 1.0“) to check their instincts against what the crowd of readers is saying it wants to read. The new tools and metrics able to inform human editorial judgment are getting better everyday, and there’s a new round of companies offering their real-time metrics-creating products to news publishers. That’s one positive sign we’re emerging from Man or Machine Dark Ages thinking.

And, now, Google News has — ta-da! — allocated a box, separate and independent from (let the record show) its algo news results, never mind that the algorithms themselves have been created, and are constantly tweaked, by humans. (Calling Werner Heisbenberg.)

That’s a small indication that the Machine is responding. What Editor’s Picks is a response to is an intriguing question. Yes, Google still is the huge driver of traffic to news sites, much as they differentiate the value of its many fly-by referrals from the relative few that make a meaningful revenue difference, sending, it says, more than a billion referrals to news publishers worldwide each month. Yet, its behemoth standing is being challenged on multiple fronts. Facebook, Twitter and Linked In are newly proving the power of social news links. Further, in Steve Jobs’ mythical world, which is fast becoming our own reality, search is so yesterday, replaced by a single-purpose (Apple-enabled), high-branded apps. With apps, search necessity is diminished, and we’ve already tiptoed into that world.

So, chalk up Google’s move as a marketplace move. Yes, it acknowledges that The Machine is not all we need, and that some nexus of Man and Machine, the algo of that combination still being written, will be a new order of the day.

We’ve seen lots of consternation over numbers recently. Take Groupon’s foggy (more opaque than fuzzy) math now being dissected by the SEC. Dissatisfied with all the usual metrics-for-investors the business world has produced, it decided to create its own: ”adjusted consolidated segment operating income,” or adjusted CSOI.

The excellent WSJ piece, by Shayndi Raice and Nick Wingfield, lays it out well, though it’s a pinch-yourself, “Is-this-The-Onion?” kind of story. As one portfolio manager said, ”In essence, Groupon is asking investors to look at their profit before any expenses.”

In June, we read the Triumph of Charts over commonsense, with the Huffington Post surpassing The New York Times in unique visitors and the UK’s Mail Online now the secondmost-read site in the galaxy. I remember the good old days when it was hard to put up a chart on the web. Now, it’s so easy, anyone and everyone is doing it. Too often, it’s form before facts of consequence. Too often, charts feed delicious, SEO’able headlines that drive incredible traffic…that put some sites high up on the charts. It’s quite a circle, though lacking virtue.

Others (check out Steve Myers’ smart Poynter piece) have pointed out fallacies in the NYT/HuffPo comparisons. Let’s add to them with a look at the newsonomics of ARPU, or average revenue per unique visitor. It’s a great benchmarking metric, long used by telcos and in the cable TV industry, and one being increasingly used, though not publicly, in the digital news industry. In addition, it’s a revealing number when we look at such players as HuffPo, the Daily Mail, and NYTimes.com.

ARPU basically says: Don’t tell me how many customers you have; tell me how much money you are making on each of them. While it’s not the only number anyone wants to use to run a digital business, it’s a big piece of the puzzle — especially as we compare like companies to each other.

Let’s look at the ARPU of traffic. I’ve used full-year 2010 data, the cleanest available, and extrapolated where necessary.

For NYTimes.com, I’m estimating digital ad revenues of $170M in 2010. That’s 80 percent of total reported digital revenues for the Times News Media group overall. The Times represents just under 70 percent of total company revenues, and, clearly, the Times itself is driving more digital revenue, proportionally, than the smaller papers in the company. So 80 percent should be close.

In December 2010, comScore reported 48 million global uniques for the Times. So each unique would be worth $3.54 for the Times for the year. (Of course, uniques vary by month, and domestic uniques — 32 million or so — are worth more than non-domestic.)

For the same month, comScore reported 31 million global uniques for the Huffington Post. Most 2010 revenue estimates for HuffPo come in at about $30 million. So, in 2010, each HuffPo unique would be worth 96 cents.

Let’s take two supposed competitors in the UK, both in the news business, both selling advertising but attracting quite different audiences.

The Guardian took in £37.5 million in digital revenue in 2010. Using the December ABCe number of 39 million uniques, each unique was worth about £.96, or $1.53 at today’s exchange rates.

For the Mail, I extrapolate, from its reports, about £16 million in digital revenue for last year. Using the March (aligning with its reporting period) ABCe unique number of 66 million, I figure each unique visitor is worth about £.24, or 38 American cents to the Mail.

If close to right, the value of a unique visitor is 3.5x greater for the Times than for HuffPo, in advertising. It’s 4x greater for the Guardian than Mail Online.

Why the differential? Reasons run a wide course. Take your pick from:

• “Premium” brands get higher rates than non-premium ones.
• Legacy sales forces are better at leveraging bigger buys than newer sales forces.
• Advertisers believe they get better results from the Times and the Guardian.
• The Guardian and The New York Times are driving more pageviews per unique visitor than the Huffington Post and Mail Online — both of which may have mastered search engine optimization and search engine marketing to tilt the unique numbers in their favor. The more pageviews, the more chance for monetization, and, thus, more revenue. Fly-bys are a huge part of everyone’s traffic (probably 60-70 percent of New York Times and Guardian traffic); they may be an even huger part of HuffPo’s and Mail Online’s.

(As another comparison to our news calculations, it’s intriguing to run the numbers for Groupon and Twitter. Twitter has about 139 million uniques (May, 2011) and maybe revenues of $150 million this year, or $1.07 ARPU. Groupon, with $460 million in U.S. revenue in 2010, estimated by Techcrunch, and about 10.7 million unique visitors in December, would have an ARPU of $42.90. That’s off the charts — and why it has attracted its valuation, despite its “profits” accounting.)

Whatever deeper analysis will show, the ad revenue numbers are real. Would you rather have the Times’ $170 million in digital revenues or HuffPo’s $30 million? (I know Tim Armstrong’s answer, and you AOL shareholders can sit down now.) Of course, it’s true, HuffPo/AOL traffic may continue to ramp up (or not), on a much-smaller cost base. It’s also true that the Times, still profitable, owns a huge brand equity — now being leveraged in digital circulation money as well — and has lots of upside, as it is challenged by its own legacy cost burdens.

Whatever kind of battle this is, it’s not a battle of equals, and it’s not a battle that can be understood by charting unique visitors.

Unique visitors are a great dumb count. As I’ve noted, it’s as if in the print world we counted the everyday subscriber — consuming 5 hours a month of a news publication — the same as someone who, standing on a Midtown corner on a windy day, happened to catch a sheet of flying newsprint as she held up her hand to hail a cab. Hardly equal, yet that’s what unique counts level.

Unique counts play to the wonder of Google search and, now, by Facebook and Twitter touts, but they are increasingly meaningless in a world that still seems to operate on a single currency: currency. Expect the bounce rates (hit one page and then leave the site) of the fly-bys only to increase in our new age of ubiquity, with mobile devices providing everywhere-and-anywhere access. It is hard not to run into big brands: Add to the Times, the HuffPo, the Guardian, and Mail Online such top-of-Google sites as Examiner.com and eHow.

Counting unique visitors — increasingly — is like counting air.

ARPU itself is just a beginning at better counting. Some will say it’s too general, the “A” as in average, just too broad to be useful. So companies can segment it, especially as they value core customers — say, the RPU of readers who read 50 pages a month compared to those who don’t.

Consider, in addition, how ARPU can be stretched and fine-tuned: mobile ARPU, smartphone ARPU, iPad ARPU, video-consuming visitor ARPU. Into the future, as each digital reader is offered an array of niche (sports, travel, health) products, increasing the ARPU of core readers becomes even more important. Much easier to upsell a customer, in any trade, than get a new one.

In addition, increasing ARPU is a better investment, says Scout Analytics’ Matt Shanahan, than either increasing sales volume or decreasing sales expense.

Some execs told me that ARPU is getting more important in the age of paid reader digital access, as, this week, Time Inc. ratifies that new age with its all-access provisioning for all 21 of its consumer magazine titles. While eCPM (the effective cost-per-thousand rate publishers get for their advertising, taking into account sponsorships and several sales types) is the preferred metric for ad efficiency, the emerging ARPU number can combine both how much a unique visitor provides in subscription (or pay per view, day, week) revenue and how much advertising revenue, on average, that unique enables.

Bonus question of 2011: What does the cross-platform (weekend print/daily digital, for instance) ARPU look like?

This isn’t an idea that’s alien to the legacy newspaper and magazine business — we’d have to combine a few legacy numbers to get an Average Revenue Per PrintSubscriber number — but the twists and turns, and added data, of the digital business give ARPU and its offspring increasing relevance.

It is all coming down to the same two revenue sources — circulation and advertising — just moved to the new digital business, gradually. (Lee Enterprises this week accepted Journalism Online’s advice and is up-charging print subscribers as it rolls out six tests.) As everyone toys with reader pricing, bundling, and add-ons, add up circulation and advertising, and we’ve got those increasingly familiar economics of transition.

Here’s my take, below, and a link to others’ takes:

PICTURE the journalist in the new social era. She is twitching, nervous system all lit up by the pings and arrows of outrageous (and occasionally insightful) comment traversing across her screen every waking moment. After being forbidden to participate in the social universe only a few years ago, her employers have now made getting involved part of the job description. Tweet, make new friends, “link in”, for godsakes.

At this early point in the socialisation of news, our nervous systems are most affected. Evolution is only beginning to change our brains and our hearts, and to build new muscle. We’re learning how to crowdsource, how to use audiences to find stories and angles, how to detect trending topics that really help us decide what to report.

We are learning that we are not islands of wisdom and knowledge. As the old gates rust, the old gate-keeping mentality is disintegrating with it. We were arbiters of what our readers could read. A monopoly metro was not just commercial (and why do you think those high ad rates are so hard to match online?), it operated as a community monopoly mindset. Editorial page writers called it agenda-setting, but it was really deciding what was best for everyone.

Now that world is fast fading into history. I think the best metaphor for what is replacing it is this notion of circles, most lately appropriated by Google. Digital life works best when it augments our long-honed human habits in positive ways. We’re used to consulting circles of close buddies, some associates, a few family members and sometimes a wide group. We know what to share with whom and what we’re likely to get back. We’re now trying to recreate that in the digital world. Technology is helping, but is still clumsy; witness the unending invitations we all get to join this or that group.

Inevitably, journalism is getting socialised. It is really a model of shared governance, borrowed from other professional cultures. Power is not as absolute, and can be better informed. Yes, readers are becoming their own editors, as I pointed out in the first law of Newsonomics. But the role of the editor and the passionate journalist, in leading (whatever the popular trend of the day) remains just as vital a part of this new sharing. The Guardian’s steadfast leadership in the News Corp scandal is one great reminder of that.

Sure, there are some publishers who recognise the business value of cheap user-generated content, and are ready to dispatch professional journalists to their earlier and earlier retirement. I think that is a losing play. I believe that readers expect us to lead, and listen, and lead.

As important as how journalism is changed by socialisation is how socialisation is changing the business of newspapers. We already know, in talking to numerous publishers, that the social/news link is valuable. Those who track incoming links (Google vs Facebook vs Twitter) will tell you that social links convert better. More registrations. More pages read. More likelihood of becoming a new reader of the site. That’s testament to the power of social recommendation—ancient, village-spawned word of mouth exponentially multiplied in our time. Algorithms will help us master this social whirl, recreating communities and circles of readers, in part inspired by the integration of game dynamics into news sites that we already see developing. What now seems like social guesswork is becoming science, and it will drive the news business in distinctly new and better-informed directions.

INN founders talk to each other regularly, by phone, online and at the occasional conference. Yet, they haven’t had a way to easily do things in common, to harness common technology, to do common business deals. A recent deal, executed by the Investigative News Network, promises to bring some order, a model perhaps, out of the motley chaos.

INN’s deal with Reuters is a test, and a significant one for both INN members and Reuters, which will begin distributing an INN-branded product, as an add-on to its wire, by the September meeting of the Online News Association.

“This is about understanding our commercial value,” INN’s CEO, Kevin Davis, told me. “Only the market can tell us how much it values our content.” The idea: piggyback on Reuters’ extensive marketing and sales operation to take high-grade, but  non-traditional branded content to many potential customers, from online-only sites, to newspapers to broadcasters. The payoffs for the 30-plus (of the current 52) INN members that have opted into the deal:

• Revenue, potentially, as Reuters and INN member sites, share licensing revenue;
• Brand awareness of these high-achieving, but nascent brands
• A few services provided by Reuters to those who opt in, proving them with some access to assets they otherwise couldn’t afford.

The deal also pushes INN’s tech abilities ahead. In using the Thomson Reuters-powered Calais, INN is able to draw its diverse content set together, and then subdivide by topics and by regions, at once making the sum of the parts greater than the individual pieces, and more marketable.

Davis says the deal includes full-text from those sites opting in, but that data and video are not included.

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 those three promises to INN members. The big hope: the establishment of  a new syndication leg of revenue, as non-profit funders push for funding diversification.

For Reuters, which in the past year, has put together similar packaging deals with Examiner.com, The Wrap, SB Nation, CCTV and others, it’s a smart way to increase the content offered under its brand, but without the cost. It is learning the chops of next-age curatorial syndication, borrowing lessons from HuffPo, user-gen content and Demand Media.

What would have been an unlikely match several years ago — disparate online start-ups and a 164-year-old traditional news wire — has now taken on a logic of its own.

The FT move isn’t an iron stake in the ground, encased in concrete. It’s more like a moveable post. It can be moved, like a football (American) yardstick up or down field, depending on market experience.

The FT’s release heralds for its first-in-the-news-biz innovation:

FINANCIAL TIMES FIRST MAJOR NEWS PUBLISHER TO LAUNCH NEW BROWSER BASED APP FOR TABLETS

In bullet points, it then details the consumer benefits of the new “browser-based” app, including:

• “Reading offline – saving a shortcut to your home screen so you can read it offline, at any time, just like one of our existing apps

• Web browser access – no download needed

• All access – one registration or subscription will offer customers access to FT

content through a range of devices or on a PC

• Speed – the new app offers improved performance

• Automatic updates – instant product improvements with no need to download

new versions of the app

• Specific to smartphones – a completely new and improved design, inclusion of

images and FT video content, a new currency converter

• Specific to tablets – new content from FT Blogs

There are many real benefits there. What the release says between the lines, and how it will be read in Cupertino: And we no longer need Apple’s proprietary apps to build our digital subscription business, thank you.

There are two converging tech worlds here. One is the Apple world of native apps, as in iOS, which fuels iPhones and iPads. Android and HP’s (nee Palm) Web OS are similarly native apps. The other world is the emerging world of HTML5. We first heard of HTML5 as an alternative to Adobe’s Flash as Apple excluded Flash from its products. HTML 5, though, has proven to be a strong foundation for next-generation digital product development (“The Newsonomics of Apps and HTML5″). HTML5 is also the basis for web apps, and it is web apps — those browser-based apps the FT is trumpeting today — that are now providing tech and business competition to native apps.

While many major publishers are now developing both native apps — especially in iOS, given Apple’s market share — and web apps, straddling both worlds, the FT is the first to strongly favor web apps. FT.com Managing Director Rob Grimshaw told me Monday that the FT will continue to build some native apps (iOS and Android), but that the introduction of new features will be done first on the web apps and then, weeks or months later, for native apps. The FT is no longer doing parallel development; it’s betting business growth on web apps.

Why? Well, for one thing, it’s cheaper. Grimshaw says the explosion of the app world enabling mobile products is costly, with the FT increasing development costs more than 50% since the recent dawning of the age of Apple (and Android) mobile products. It can take months, he says, to build each new proprietary native app, and it will only get more complicated as the market sorts out the Apple/Android/HP/Microsoft (Windows Mobile 7)/Blackberry Rim mobile world. So, the FT’s new web app will be the main focus for the company, as it tries to convince customers that the web app experience is as good as the native app one, and offers other benefits to boot. (Other companies, including the New York Times are building on web apps first, then wrapping native app shells around them, economizing to some degree, but still doing building out both kinds of apps.)

The business benefits of web apps for the FT, and all other publishers, is already clear. Web apps, available through a browser — an open platform, after all — enable the publisher to maintain control and independence. The FT can charge what it wants for its web apps, and for all-access (including print) subscriptions, and keep all the money, not having to share 30% of it with Apple or anyone else. It can use its own much-invested-in e-commerce and customer management systems, gathering whatever data it wants from customers, not having to argue with Apple or others about it.

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?

Grimshaw, who sportingly points out that this is a pro-FT, not anti-Apple move — “We don’t want to be seen as squaring off against Apple” — is comfortable with data that supports his decision.

First off, a little more than half of mobile users — smartphone and tablet — access the FT through the mobile Safari browser already, a number he says has been consistent over the months. That usage should be bolstered as the web app experience and presentation improves with the new launch.

Second, only 15% of the FT’s digital subscriptions — now totaling 224,000 overall, out of combined print/digital circulation of 605,402 — are currently coming directly from mobile devices, though most of them do come through Apple. Many FT subscribers add on mobile to their web or print subs. With more 85% of digital subs clearly coming from outside the world of Apple, Grimshaw believes the risk is low.

So what does the FT move mean to everyone else? That’s more nuanced.

Consider two points:

• Build-out: The FT can do what it is doing today because of what it’s done for more than 10 years. Charging for content since 2002, it’s built out impressive systems in cross-platform authentication, e-commerce, customer management, content management and analytics, coming the closest of any news publisher to becoming Amazon-like in running its business (“The Newsonomics of the FT as Internet Retailer“). Only the Wall Street Journal comes close — in some areas — to that build-out. Without that build-out, most news publishers are far more reliant on others, including Apple, to jumpstart their mobile businesses.
• Tablet-forward: Grimshaw makes the point of the FT being “ahead” of the customer, in the tablet/mobile market. The company isn’t fooling around with low-cost, “replica” tablet products. Among a half dozen top global news publishers (among those “Digital Dozen” I identified in the Newsonomics book), it is already into successive generations of tablet products — now built on the faster-to-market web app strategy — and that gives it something strong and tangible to sell to readers through the browser. Most publishers don’t have their products ready, too focused on “waiting for the market to develop,” a strategy we’ve seen repeatedly fail for news companies. If they do it again with tablets, it’s like a horror sequel; Saw 8?

At best, the FT moves acts as a counterweight in the marketplace. Given news of the Apple’s latest innovations (good visual rundown in Mashable) with the new iOS, it’s clear that company isn’t slowing down; in fact, it’s Newsstand auto-update directly blunts one of the FT web apps advantages noted in the release. Yet, the question of where paying customers, new core readers, especially among those under 50, will come from is a big one. Yes, Apple may drive them to news publications new and old, but so will Facebook, Twitter, Google and Microsoft. The FT aim: build a business with lots of partners, but maintain control of it, not farming out bits and pieces here and there, subject to the data whims and revenue share usuries that can develop. That’s a laudable goal, and once again, the company is offering the news and magazine industries both new models and new tests, with the learning valuable to all.

First published at Nieman Journalism Lab

Picture Pre-Tablet Man (or Woman). Let’s go back to the time before Palm Pilots, at the dawn of consumer digital civilization itself, a time of AOL, Prodigy, and Compuserve. Hunched heavily by the analog world on his shoulders, Pre-Tablet Man has slowly begun to raise his head, through successive innovations of laptops (!), pocket-sized cellphones, smartphones, smarter phones and early e-readers. Now, as we enter Year 2 of the iPad era, it seems like our digital man is almost standing up straight. The digital world has moved from geek chic to consumer commonplace. Our digital devices have become on/off appliances, no manual necessary.

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.

We’re now approaching the second half of this highly transitional year, with its multiplying paid circulation tests, continuing print revenue declines, and greater re-focusing on digital ad sales. As we do, let’s look at the newsonomics of the tablet as the missing link. Let’s do that in light of what I think are the six major realities confronting news companies at mid-year.

1. Reality: Print is in permanent decline.

That’s what 21 consecutive quarters of decline (year over year) in U.S. newspaper print ad revenue tells us (“The newsonomics of oblivion“). Consumer magazine revenue has moved barely positive, but is still substantially below pre-recession levels. Print is there to be milked, as long as it can, in the digital transition. Fewer newspapers are being sold, and they are thinner and thinner.

The tablet link: The tablet is a print-like replacement for newspapers and magazines. Publishers privately report (and an increasing spate of reports from Instapaper to RJI to Yudu) that tablet readers read the tablet much more like the newspaper than the way they read news websites. Longer session times. Longer stories. Early morning and evening reading. Pre-tablet, publishers had no potential replacement. Yes, smartphones have been a great check-in short-form reader, but that’s more of a traditional online-like behavior. Now they’ve been given a gift by the technology gods.

Caveat: The tablet is print-like, but it’s not print. It’s a new medium, first inviting — and soon demanding — that publishers make use of its interactive, video-forward, and smooth-as-silk social sharing capabilities. If publishers persist in “going slow,” sticking with cheaper-to-produce replica tablet products, they’ll squander the tablet replacement-for-print opportunity, as new market entrants from the AOLs (including flag-in-the-local-sand Patch) to the Bay Citizens surpass them.

2. Reality: Online engagement is inadequate.

The tablet link: The tablet offers a way to re-engage readers, a corollary to the tablet’s replacement potential. The biggest problem for news publishers isn’t (a) that the digital ad world only produces pennies on the old ad dollar, (b) the low share of digital ad revenue they get, or (c) a changing cabal of digital startups from Yahoo to Google to Apple that are stealing their business. Their biggest problem is online engagement.

News producers work in a world of massive cost, funding well-paid newsrooms and all the legacy supports from advertising to finance to circulation. That investment made a lot of sense when readers really engaged with their products. Consider that in the heyday, your average newspaper would command 270 minutes (4.5 hours) of attention per household per month. Consider that online, the average engagement time is five to 15 minutes per month.

So, if early tablet reading patterns persist, publishers could find themselves on the road to re-engagement. The possibility: short-form, headline-and-blurb desktop/laptop reading may have been the news industry’s nuclear winter, with a greener spring on the horizon.

Caveat: It’s still way early to know whether more engaged reading patterns will last. I believe they largely will, but that publishers will soon find themselves fighting for engaged minutes with whatever successful aggregators emerge from new crowds of Flipboard, Pulse, Zite, Trove, Ongo, and News.me, just to name a few. Ventures like Next Issue Media address may address destination buying, but not product aggregation in ways that consumers have shown they love. Aggregation won Round One of the web, as individual publishers lost. We may be seeing history repeating.

3. Reality: Google juice is wearing thin.

The tablet link: The tablet is driven more by direct traffic, by apps, and by direct browsing than by search; early publishers results show a healthy majority of tablet news visitors coming direct, unlike the online experience. Search isn’t over, but it’s being pushed aside as the beginning and the center of our online news activity. Publishers never found Google juice all that nourishing; it provided lots of calories, but too little muscle tone in new direct revenue created.

Caveat: Again, this is early behavior. While Google juice may stay thin, Facebook and Twitter juice are getting tastier, and will, in part, replace Google as important referrer of potential new customer traffic.

4. Reality: The only big growth is digital.

The tablet link: The tablet may be the path to getting print-like ad revenues.

News publishers have one story to tell, and that’s what we hear in quarterly reports and increasingly infrequent interviews: the growth in digital ad sales. The New York Times touts that 24 percent of its ad revenue is now digital, with McClatchy and Gannett just below 20 percent. Journal Register CEO John Paton talks about the digtital EBITDA his company will be able to throw off by 2014. At the same time, digital ad growth isn’t coming close to making up for print ad decline at most companies.

With current high ad rates, approaching print ones, high national advertiser and ad agency focus, tablets may be a great ad platform, unlike online or smartphone.

Caveat: Newspapers current earn more than $500 a year in Sunday revenue from print subscribers. Can tablets, if they replace print, ever come near that number?

5. Reality: Digital circulation revenue essential is essential to a new sustainable business model.

The tablet link: Consumers appear willing to pay for some kinds of tablet content. Imagine the paid proposition today without the tablet. Selling online/print? That’s a tough proposition. Print/smartphone? Well, maybe. The tablet gives publishers a much better value proposition to offer readers. All Access — including tablets — may prove to be a winning proposition.

Caveat: Early paid experiments aren’t producing much digital circulation. Why? In part, the tablet-wow products are in their infancy, and engagement remains too low. If too few readers bump into the pay wall, even fewer will pay up.

6. Reality: The News Anywhere Era is becoming real.

The tablet link: The tablet is a part of this new News Anywhere expectation. Getting news wherever we are has moved from something cool to something expected overnight. News Anywhere has offered a new playing field and a new value propostion that publishers can offer readers. In the era in which Netflix, HBO, and Comcast offer Entertainment Anywhere, news publishers have been presented a model — an All Access model — that readers can easily grasp.

Caveat: Readers grasp the model — and have high expectations. That means news publishers must more quickly satisfy those News Anywhere habits, properly formatting for each device and understanding how consumers are using news differently on their iPhones, their iPads and on their desktops. Most are simply not yet prepared to take advantage of this revolution.