“Patch expects to be the largest hirer of full-time journalists in the U.S. this year,” says the AOL release.

Let’s put this Patch push into perspective. About 400 new sites, spread out across the country. Five hundred new journalists being hired. Let’s remember, though, that this is one journalist per community, communities that range in size from 10,000 to 80,000 people. One journalist per community.

The fact that Patch is getting such recognition, and discussion, is another indicator of how thoroughly journalism has fallen on hard times. The announcement of the hiring of a single journalist in a single community? That was the stuff of internal newsroom memos not too long ago. It’s as if the news industry is struggling to rebuild itself, cell by cell, just as researchers are figuring out how humans themselves can regenerate lost limbs and organs.

Still, we should take the news as good news. The more journalism, the better — especially if it can be sustained. Now-independent AOL, though, is a profit-seeking company, at the moment chastened a bit by its just-released quarterly earnings report. Patch has lots of promise, but it will have a tough slog to profitability, as mano-a-mano battle for local ad dollars only intensifies.

As we parse the Patch news, here are a beginning nine questions about the initiative:

1) If this is a big national, hyperlocal play, is that oxymoronic or does scale really help? It seems to me that scale is a plus in a couple of ways: 1) national ad sales (witness the Pepsi Refresh campaign running across the current sites) and 2) technology costs, with one centralized production and presentation system, one that should be able to get to market quicker with tech innovations. In two important ways, though, scale will be of a lot less help — and these are core to the site’s promise and success: 1) local content production and 2) local ad sales. Patch, with its organizational structure, will get some efficiency boost through regionalized ad selling and some content sharing (as sites with a common school district may combine coverage, for instance). In the main, though, the hard work of gathering local news and selling local merchants isn’t greatly helped by the national brand.

2) How do I parse the Patch taxonomy? Okay, you’ve got your sites. Each one covers a geographical area with some identity, with the sweet spot of population somewhere between 40,000 and 75,000 — large enough to be an audience/market, yet small enough not to be an anonymous “metro” area. (That’s the same size as Backfence’s Mark Potts averred in the first hyperlocal go-round.) Each site has an editor, and Patch recently decided to add a 13th editor to each cluster, for back-up.  Each editor has a freelance budget equivalent to about one FTE, more or less, depending on the geography, and will pay stringers to extend what that single editor can do.

Then, you’ve got 12 sites per cluster, each cluster headed by a regional editor and regional ad/marketing manager. Expect between a dozen and two dozen ad sellers per cluster, as they try to divvy up territories to take advantage of their overlap in communities.

Then, you’ve got a block, which is two clusters. Those blocks then roll up to four editorial directors and four sales directors, who divide the country into sections, reporting back up to Patch HQ.

3) So who’s the ad competition? Maybe we should ask, who isn’t? Most importantly, in going after ad dollars, it’s a free-for-all. With Borrell Associates 2011 projection of $16 billion in 2011 local online advertising the mantra many companies repeat, the competition is intense. McClatchy is saying it is taking in $2.5 million annually in hyperlocal ads, Gannett is moving more aggressively through GannettLocal and, its recent broadcast site partnership with DataSphere and every other newspaper company sees that local merchant future. The question is how well they’ll execute on the emerging vision. Then, there are local broadcasters in general and Yellow Pages companies knowing that printed behemoths tossed on our doorsteps are endangered species. The target of all these legacy companies: SMB, the millions of small- and medium-sized businesses they used to largely ignore, but which now must be romanced with digital dreams, as bigger-money advertisers make bigger and earlier moves digital.

But, wait, that’s just the old companies.

Then, there’s Examiner.com, which has been replicating its own sites, on its national templates, served by national advertising.

It’s not 2005 anymore, so now we can dozens of local bloggers, independent sorts, scratching for their own livings, from veteran BaristaNet to sites everywhere. Most of these sites are out there selling ads and/or sponsorships. And now, there are ad networks forming. Consider the Miami Herald’s ad network around its partnership with local bloggers and the new TBD’s Community Network, a local blogger ad network out of the chute. (Newsonomics: “10 Reasons to Watch TBD“). GrowthSpur is working with TBD and others to train blog ad pitchers. Then there’s BlogAds and Addiply, among many other newer hyperlocal ad plays.

Soon, the neighborhood florist will have to wear a flak jacket, just to ward off the dozen “hyperlocal” sales guys and gals, all rediscovering the joys of local — at the same time.

But, wait, here’s the real payoff, for those that can wait: Mobile advertising and marketing. Again, the Borrell number is causing mass salivation, and I’d bet it’s whetting the appetites of the AOL Board as they swallow the investment in Patch. Local mobile ads, which fetched $285 million last year, are projected to bring in $4.7 billion in four years (2014). (Interesting fact: At the moment, Patch, unlike TBD, has no smartphone apps ready for its sites. )

4) Who’s the news competition? Same players, more or less. In fact, we may begin to believe that some local communities will soon be better covered by journalists (though metro coverage still suffers) in this digital age than they were in the analog one.

Examiner, with those hundreds of templated local sites, displays a growth trajectory a year ahead of Patch’s — and so its audience stats, provided by The Nielsen Company — greatly outpace Patch. The gap, though, is narrowing. And in sessions per month, and maybe time on site, Patch may be moving ahead. That would show that readers are seeing some value from Patch’s truly local news push, as compared to Examiner’s often shared-content across “local sites.” (Newsonomics: “Examiner: New Local Competitor or Faux Local?“)

5) So how do we make sense of Patch and whether it’s good for journalism? It may be too early to know. Patch is hiring hundreds of journalists to do journalism; that’s novel. Those journalists include 20-year veterans as well as twenty-somethings a few years out of school. It has provided new opportunities for editorial leadership jobs, and that’s a good thing since journalism-schools-as-refuge may have reached a limit.

Most importantly, for the moment, readers will get more news.

The question, here, is one of sustainability. Certainly, there’s the question whether Patch can sustain itself, as its parent AOL struggles to find a new identity and growing business model. Then, there’s the question of the sustainability of hyperlocal journalism already being done from coast to coast. These are true start-ups, often one-man (or -woman) bands, invented by journalists truly passionate about community coverage. Pre-Patch, it’s been the fledgling blog ad-and-distribution network experiments that gave hope that more money could be found to support these ventures. Now, we have to wonder whether Patch — which will link to other sites it finds useful, but won’t network them — will make the sustainability of these more organic, non-templated local blogs more questionable.

Once again, we’ll come back to the question not of how much coverage a community needs, but just how those doing it are going to be paid.

6) What’s in the secret SEO sauce? Wouldn’t a lot of legacy publishers like to know? As I pointed out in a quick post on a breaking Bay Area story covered by both Patch San Ramon and the Contra Costa Times, Patch’s story appeared at the top of Google (web & news), though the CC story was more detailed and more recent. Check on many local news stories. Time and again, Patch and Examiner will rise to the top, besting newspaper content. That’s the mastery of search engine optimization, a science too many publishers still flunk. Maybe the Knight Foundation, in its quest to bolster news content generally, should move up on its to-do list tools that help publishers finally master SEO.

7) Is there any connection between Patch and AOL’s Seed, beyond the garden-metaphor-approach to naming digital start-ups? Yes, in fact, though, just in the testing stage. Seed — AOL’s Demand-like, Associated Content-like Pro-Am news business — may feed freelancers into Patch. As each site’s editor decides how she wants to use that freelance money, one logical place to check will be Seed’s database of contributors, which, of course, is geo-tagged. Consider this a work-in-progress, but one way AOL will seek to connect the dots within its content-creating business, now including AOL Finance, Politics Daily, Engadget and more.

8) Who may the biggest winner out of the intense hyperlocal competition? With all those new players in action, we’ll see lots more content, even if the ad battle is brutal. So, look to the aggregators, like OutsideIn (partnered with Tribune+), FWIX (partnered with New York Times+) and OneSpot (partnered with Wall Street Journal+). Creating content is expensive; aggregating is cheap.

9) If hyperlocal is such a good idea, how come Rupert Murdoch’s not investing in it? Murdoch is ubiquitous in the talk of journalism’s future — Alesia bundled content site, new platform for tablets, a tabloid tablet product, pay walls and lots more — but we don’t see him in the hyperlocal space. Does he know something Tim Armstrong doesn’t? Or is the retail of block-by-block selling from Portsmouth to Pleasanton just too small potatoes?

That’s the number of companies Google has bought since January, 2009. Its latest acquisition is Jambool, a social payments site.

That’s the number, of course, of the publications to which WikiLeaks leaked the Afghan War papers. The papers: the New York Times, the Guardian and Der Spiegel. Marketplace reporter Eve Troeh and Poynter’s Kelly McBride do a good job of connecting the dots: the power of scarcity as a few big old media brands connect with new media leaked files to create huge impact. I’ve talked about the power of the Digital Dozen — the 12 or so going-global media companies who will fare well in this next generation of digital journalism; this story supports that notion.

Google is trying to push the country out of recession, perhaps by itself. The company “hired nearly 2,000 workers through the first half of the year, putting it on pace to add the most people to its payroll since 2006 when it ushered in 6,100 new employees in 12 months,” points out AP’s Michael Liedtke. In the second quarter, alone, it hired 1200. Total workforce: 21,800.

While investors have reacted negatively to drain on profits, Google’s aggressive hiring is an audacious move for market share — what smart companies, with the means, do in a recession.

Important Details: The Financial Times has built on its direct licensing initiative with two new programs; both are indicative of the next stages of of news usage on the web.

In April 2008, the FT made a significant break from traditional practice by reclaiming control of its licensing activities. At that point, it said that building and growing direct customer relationships, rather than indirectly licensing via aggregators, was a top goal. In addition, the FT believed it could maintain product value and pricing power better with this strategy. The FT now has more than 550 direct customers in its program. These direct customers can choose to have unlimited access for a defined group of users to FT journalism via FT.com and/or any of 21 aggregators. Academic and public library customers can continue to access FT journalism under a 24-hour embargo via the indirect licensing model.

Fundamental to that approach is the FT’s consumer model. Like the Wall Street Journal, the FT charges for online access, after allowing readers to sample up to 10 articles per month.

This year, the FT built on its direct license service in two ways:

• It began offering a customized RSS feed to its direct license customers. Corporate information managers can now pick FT content — by topics, byline, key word, company name, etc. — and let the FT headlines flow directly into the relevant places in its intranet. Each information manager can then update search criteria over time, making adjustments on the fly, with no limit to the number of RSS links that can be created. The news and information flow can also then be tailored to specific departmental or individual needs, with click backs to FT.com where direct customers have unlimited access rights.
• It began offering IP-authenticated access to its direct license customers. FT.com had previously used an individual sign-on/password authentication, which is still available and best used for remote access. The new IP-authenticated access provides organizations with unlimited access rights for a defined group of users and a single picture of the amount of usage.

“Both of these [initiatives] are the tangible results of our direct relationship,” says Caspar de Bono, managing director of B2B for the FT. On the RSS initiative, the belief is that the more customizable RSS will lead to more usage. As de Bono says, the FT wants to “help the customer make best use of their time – to filter out the noise.” Greater relevance equals more usage. More usage equals more value. More value equals increased ability to retain customers and to maintain price. Similarly, the IP-authenticted access, de Bono believes, will work in FT’s favor to prove, and re-prove, value.

Implications: Whether publishers license directly or not, Outsell believes that some lessons out of the FT’s emerging experience are key for all publishers who syndicate — and the syndicators that work with them.

These are the keys:

• It’s one thing to say the customer’s in control; it’s another to give them tools of control. To prove and re-prove value, publishers and aggregators need to provide better customization tools to customers.
• RSS is not a one-size-fits-all solution. Too many news publishers have begrudgingly offered RSS feeds, but many of them have defined them so broadly as to be of little usefulness. The granularity of RSS feeds is a key. Some readers — in the enterprise, in the school or in the local community — may just want a RSS feed of their most highly-regarded writer, or on a subject that’s a niche of a niche. Giving them what they want encourages engagement and loyalty.
• Knowing your customer is a long-term proposition. Many sellers — of information and much else — put much effort into the front-end of the relationship: the initial sale. The metrics are clear though that the cheapest way to gain business is first to retain, and then grow, the current customer base. In these times, such retention and growth must be fed by analytics. If the customer is not making complete use of the product (and how many are?), then sellers of information must first know that and then act on it. That’s one of the goals of the FT’s IP-authenticated access. For sellers of information generally, it’s key: keep learning about customer behavior and keep applying that knowledge.

What’s copyediting worth these days?

Of course, it used to be something we took for granted — like writing and design — just part of the journalistic process. You know, a second set of eyes, at least, on any story that would be published.

There’s been a fair amount of craft skirmishing about copyediting, its role and its decline, over the last decade. I’ve been confronted this week by several recent “editing” experiences and data points, which have renewed my own thinking about editing, its value and how news people can harvest that value.

In the past week, I’ve got three calls from “fact-checkers,” whom I’d thought were an endangered species. Two of the calls came from magazines, checking the basics of my name, affiliations, and quotes, for stories on which I’d been interviewed. The third came from a university journal, for which I’ve written a piece; for that one, the fact-checking was exactly that, asking a half-dozen questions about the sources of my factual assertions.

That was the old-world experience, preserved in at least parts of the magazine and academic worlds.

Then, there was my conversation with Associated Content CEO Patrick Keane, about his five-year-old content engine site. While Demand Media’s gotten more media attention, Associated’s kept pumping along. In its content database: 2.1 million stories, written by more than 375,000 individual writers who get paid $5 to $30 per piece for their work. More astounding, the site is adding 2000 stories a day, says Keane.

To be sure, what Associated Content does isn’t news, but it’s newsy. Keane believes that newsy, but more evergreen content on everything from going green to health to potty training to TV buying is building a great annuity for the company, its long tail monetizable for a long time. News people would broadly recognize it as features content.

I asked Keane how many editors Associated employs to manage the copy flow. The answer: 15. Now that’s 15 FTE, so they’d be spread over the course of a week. Do the arithmetic, though, and you get close to 15,000 stories a week, edited by 15 people. Or a thousand stories per editor each week, or 25 an hour. That’s a number of magnitudes more than we’re used to seeing in the traditional world of journalism.

Keane heard the amazement in my voice, and hastened to add that Associated’s editors’ work is focused on “making sure the title is correct, the story’s not gibberish and not created by a bot in the Philippines,” says Keane.

Copyediting meets Captcha, that lovely human verification system that forces us to enter a couple of words here and there in our web transactions to prove our very humanity. Of course, what Associated is doing isn’t copyediting as we’ve known it, as Keane would be the first to acknowledge. It’s bot patrol, something I’m betting they still don’t teach much about at the journalism schools of Columbia, Northwestern, Arizona State, or the University of Oregon, my grad school alma mater.

This wide disparity in editing editorial content isn’t wildly surprising; the disparity has grown markedly over the last decade, and certainly the blogosphere making each one of us our own editors has taught us new uneasy conventions. We’ve gained a lot in the free and easy flow on web-enabled writing and publishing. We’ve clearly lost something too, as finding (and paying for) an intelligent second set of eyes has become a luxury.

That’s left me wondering exactly what value is in good editing. Are there any Newsonomics of editing, value to be gained and harvested?

Readers implicitly believe some media to be more credible than others. In various polling we’ve seen lately, such national brands as CNN, Fox News, AP and a few others rank the highest in trustworthiness. Readers may have some sense that there’s some judgment being applied to the words written or spoken, some vetting, some editing. I think so, but I don’t know of any data we have to support that. Are bigger, usually better-edited news brands rewarded with more traffic?

There’s something I think well-edited brands, big and small, new and old, can do to improve the chances they’ll be rewarded — that the investment in editing time is rewarded with advertising revenue and maybe, as models work, reader revenue.

That something is to claim their professionalism publicly, prominently and persistently, yet discreetly.

True news media from the Times and Post to the MinnPosts and Texas Tribunes can place a statement (or least a prominent link to it) of their news principles in a similar place on their sites. It could be anywhere from a manifesto to a disclosure, worded by each online publication as it sees fit. If, though, we can get some agreement on similar placement, then readers can learn over time — and schools can teach — how readers can begin to critically evaluate digital information sources.

In such a statement, it would be great to include who pays for the content produced, what kinds of fairness and conflict-of-interest principles to which the site adheres (or doesn’t) and important practices — like editing.

Sure, some sites offer such statements here and there, but there’s no consistency of placement among those that do. Good luck finding — and comparing — them. “About us” links, now a standard, can offer such a business explainer, but usually don’t.

Will news-principle boxes capture some of that value of editing, and care, and staffing? It’s hard to know, and hard to measure — but without the effort, it’s my sense that we’re headed quickly into a world where only one set of eyeballs determines publication.

There are no new ideas in the digital business, just ones recycled from earlier dreams — ones that vaporware couldn’t make work, but newer technologies can.

Take business directories, for instance. The idea built huge Yellow Pages businesses, businesses now mature and, well, yellowing. You know you need a service — fix a broken water heater, a sore tooth, a cranky marriage — and you knew where to turn; let your analog fingers do the page-turning. Classic, order-taking annuity business. The web comes along and the Big Yellows, SuperPages and dozens of others — huge and small — take the print Yellow Pages business online. Of course, they struggle with the new medium, adding not much value, and usage is low; business growth is challenged. Angie’s List, Yelp and OpenTable come along, eating away the edges.

Now we’re seeing a next generation, best symbolized by PaperG’s new PlaceLocal product. In a nutshell, PlaceLocal creates instant ads for a business, drawn from the best of the available information out there on the web — photos, user reviews, basic address, phone, hours, menus.

It gives publishers — TimeOut, Hearst TV, and McClatchy are three of the first companies testing it — the ability to create ads on the fly, spec ’em out and use their sales staffs to do the selling. Victor Wong, one of the young geniuses behind the PaperG’s innovation — its first product, FlyerBoard, simply updated for the digital age the old notion of the ubiquitous kiosk flyers found around college campuses — tells me he thinks PlaceLocal will be a bigger product. It should sell for a higher rate, and that’s what his publisher customers are hoping. Initial rates — we’re talking about smaller businesses which aren’t frequent advertisers — run in the hundreds up to a thousand dollars monthly. That $1,000 target would more than double the pricing of the FlyerBoard product, a key in PaperG’s growth plan as the company of a dozen plus leaves the friendly confines of New Haven for Silicon Valley North, San Francisco.

Why a higher rate? Well, it’s potentially a highly actionable piece of commerce. As the commercial world moves increasingly beyond online display ads (a fairly static category of spending), beyond paid search (where almost half of today’s digital ad dollars are spent), to cost per call and various flavors of cost per acquisition, a PlaceLocal-kind of product — expect many knockoffs — is well-positioned.

One big lesson here for everyone to get their heads around. This is commercial crowdsourcing. Why outsource the collection, organization and checking of “directory data,” as numerous Yellow Pages companies have done over time, when you can have the crowd do it — for free. It’s using the web, as a whole, to find, value, and associate commercial content. We can see roots of Google PageRank, Demand Media content organization and Yelp user reviews in the thinking behind the product.

Newspaper companies have cut the cost of their ad production markedly over the last several years, as they’ve outsourced to companies like 2adpro, Affinity Express and Express KCS, with much of the work done in India. Those companies have made it possible for newspaper companies to cut their print (and increasingly online) ad production — often at union wage — costs by 40 percent or more. Now, a PaperG comes along, with a new kind of disintermediation notion, replacing that outsourcing with websourcing. Of course, we don’t yet have an apples-to-apples comparison of the advertising done the traditional way — asking a business what they want to sell and creating the ad from there — vs. the web-scraping PlaceLocal will test out. PaperG takes a revenue-share percentage of the ad sold, so publishers will have lots of comparisons to make on ad quality, ad effectiveness, net profit, and the ability to sell new customers.

My Newsonomics Law 9 — “Apply the 10-percent rule; the heavy lifting of journalism can be aided and abetted by smart use of technology” — comes into play here. Sometimes it takes 10 percent of the effort it used to to create news products — through smart aggregation, for instance. In this commercial case, we’re seeing a different twist on the 10-percent rule, and one that bears watching as city-based news and entertainment operations look for new revenue streams as the older ones morph rapidly.

Sherlock Holmes (as played by Robert Downey, Jr.)

This week, though, also saw an impressive report from another of the key players in the local journalism game — a foundation. The William Penn Foundation (assets: around $2 billion) commissioned J-Lab, an energetic newer media provocateur largely funded by the Knight Foundation, to figure out what was going on in local news, and what could be done about it. J-Lab’s recommendation, encapsulated in a readable, short-form report:  A Networked Journalism Collaborative for Philadelphia.

Most of you will nod as you read the key findings, my own emphasis added:

• The available news about Philadelphia public affairs issues has dramatically diminished over the last three years by many measures: news hole, air time, story count, key word measurements.
• People in Philadelphia want more public affairs news than they are now able to get.
• They don’t think their daily newspapers are as good as the newspapers used to be.
• They want news that is more connected to their city.
• People from both the Old Philadelphia, anchored by the city’s union and blue-collar workers, and the New Philadelphia, representing tech-savvy, up-and-coming neighborhoods, want to be involved in helping to generate that news.
• The city is awash in media and technological assets that can pioneer a new Golden Era of Journalism.
• There is strong, but guarded, interest in exploring a collaborative journalism venture.
• A significant number of Philadelphia’s new media outlets have expressed interest in pursuing a collaborative media initiative.
• Any collaborative news effort must validate and support the fiercely independent mindsets of the city’s new media makers.

Philly’s a special place in some ways — argumentative, feisty, proud of many heritages — and, in some ways, it’s like many other cities. While daily newspaper companies emerge from bankruptcy (13 in the U.S.), proclaim profit and swear that the ad revenue bleeding is lessening (though they are taking in less revenue in 2010′s first (recovery) quarter than they did in 2009′s (near-Depression) quarter, many outside of daily newspapers believe they’ve seen the future, and it doesn’t include the dominant, near-monopolistic presences of daily metros that it used to.

So we see re-grouping everywhere. J-Lab’s report, like Len Downie’s last year, deserves credit for describing the reality well: Less is less — and it’s not enough. Foundations are redefining local journalism as a public good, like education, health and the arts — all community benefits that nobody expects the market to completely support. They’re pouring dollars into experiments, as are angels like Warren Hellman, the financial force behind Bay Citizen and Buzz Woolley, instrumental in getting Voice of San Diego off the ground. Entrepreneurs are testing models like TBD, as Allbritton (a TV veteran and innovator of Politico) believes a profitable enterprise can be constructed that’s digital-first, community-connected and tech-forward. The FTC continues hearings, roundtables and inquiries to see what can be done to “save” American journalism.

One big question that the Philly report begins to tackle is how to connect up diverse local media in any metro area. That seems like an academic question — the cliched herding of cats multiplied — but it’s not. Clearly, we see metro futures in which local news media will be far more diverse — public radio; news start-ups; commercial broadcasters; reduced, yet still substantial daily newspaper-based operations, plus a host of ethnic media and hyperlocal blogs. Connecting them smartly is key for two big reasons, ones that are the currency of the digital business: distribution and revenue.

Findability — the discovery of the local content — is key. Everyone from Outside In and FWIX to Yahoo, Google, MSN and AOL is trying to lasso local content, seeing the findability problem. Aggregation is happening, though it’s ungainly. Readers don’t yet know where to look for the best aggregation of diverse, yet trustworthy local news. Research I’ve done with Outsell confirms that while we’re all quite used to using aggregators to get to national and global news, we’re still stumbling around as we look for local, tepidly sampling newspaper and broadcast sites, without forming strong time-on-site attachments.

So whoever can best aggregate any single metro’s news content — in a way that’s logical, useful and fun (think iPad here, for instance) — can drive a big audience. That big audience, of course, will drive the revenue, revenue for the aggregator, and in the Philly model and some others, revenues that will fund (not just form a sick trickle down) the local content producers. It’s arithmetic that’s just forming, so it’s hazy to see.

It leaves us, for the moment, with these kinds of questions:

• What indeed is a daily newspaper’s role in these collaborations? The Philadelphia operation now run by publisher Brian Tierney and editor Bill Marimow seems old-school in seeing their papers’ roles in the community. Yet, in other cities, we see the Miami Herald, Seattle Times, Charlotte Observer (all three funded by J-Lab) and Seattle PI.com actively reaching out to other local journalists, forming big tents of various constructions.
• If not the local daily, then who may do the organizing? TV broadcasters could do it, but it’s not much in their DNA, though a few national leaders like Raleigh’s WRAL show leadership here. Public radio could do it, and it may, spurred by local innovation and Project Argo-like national encouragement. The New York Times (or Wall Street Journal) could do it, if it decides its Chicago (Chicago News Cooperative) and/or Bay Area (Bay Citizen) models make broad financial and journalistic sense. The start-ups themselves could do it, but most are more oriented to doing the journalism, than organizing it more widely. The big aggregators, Yahoo foremost among them, have seen the coming, big local ad play, but may not have the patience and provision of resources for what will likely be a laborious bringing-together of local media. The Outside Ins and FWIX’s are tools companies, able to offer good software, but unlikely to do the aggregating themselves.

The magic word here from a business perspective: Roll-up. Whoever figures out how to roll up major audiences and monetize them wins. J-Lab’s report holds out hope that may come about somewhat organically. History, though, teaches us that it’s more likely to come by dint of more singular zeal.

In Philly, the next steps sound more foundation- than journalism-like, three Penn Foundation grants directed at planning, enterprise encouragement and creative use of technology. J-Lab Executive Director Jan Schaffer, herself an Inqy alumnus, notes that the enthusiasm the study encountered is palpable: “There were people that wanted to start tomorrow.” What does the project need? “The right editor,” says Schaffer, one that combines the savvy of the old and new news worlds. They are out there.

The newest start-ups show that. In D.C. TBD’s head, Jim Brady (Poynter’s Steve Myers good piece on Brady and his push here) is one of them, as are two of his key hires, Erik Wemple and Steve Buttry. Jonathan Weber brings three lives of news experience to Bay Citizen. Soon, there will be lots more.

We’re into a new age of digital news content. Every conceivable kind of company is starting to produce it and find homes for it. Smarter advertising strategies are matching up against the new content. Mix and match exploding content creation with ahead-of-the-curve ad targeting, and you’ve got a new math.

Presto: Content arbitrage. Forget “curators”; an accurate but museum-musty term for judgment. As news sites have branched out, bringing in community bloggers and sites, “hiring” top-end bloggers, we’ve come up with the genteel “curation,” a popular term at this week’s ASNE conference, a hot (well, warming) bed of such forward-reaching ideas.

So if want to move beyond “editors,” with its old-world connotations, to get at a reaching out, an aggregation of more content, what’s the proper word? Well, aggregator is technically correct, but it’s Terminator-like. News people don’t like to think of themselves copying the the first, big aggregators like Yahoo, Google, MSN and Huffington Post. (Each of which, not incidentally, sees great next-stage opportunity in content brokerage and are competitors to news companies in this area going forward.)

So let me suggest a title that fits what is going on, though it will make “editors” uneasy: “Content brokers.” I’m not suggested that anyone change a job title to “content broker,” but rather to recognize that’s a huge role going forward. (And even backwards, for us veteran features editors who understood that buying content from diverse syndicates, wires and freelancers was an essential part of the business.)

Let’s go to the newsonomics of content brokering.

Demand Media, fairly and not, has become the poster child of the content-and-ad arbitrage. It’s both been derided as an amoral, slave-wage content farm and marveled at for its absolute smarts about the value of content, and its creation. Just last week, Demand announced a deal to power a “Travel Tips” section for USAToday.com; earlier it had done a lower-profile deal with AJC.com, in Atlanta

It’s just one example of news companies starting to get it about content brokering. The principle is simple: Obtain the highest quality content you can (or at least sufficient to what the market of readers and advertisers demand) at the lowest possible cost. Then, make sure you can make a profit over each set of obtained content. We all understand the idea: Buy low, sell high.

Demand will pay, say, $35 for an article of new treatments for spring allergies, knowing how many pageviews its distribution networks can generate and what cost-per-thousand rates it can get. Maybe it makes $100 or $300 on that article. Maybe it makes a lot more. You can do lots more arithmetic here, with thousands of stories, higher-priced ones and even “free” user-gen ones. The principle, though, is the same.

Newspapers understand that principle. For decades, they employed large newsroom staffs, paid them what they had to, sold advertising, at expectable and rising rates, and took in margins of 20-percent-plus. That’s content-and-ad arbitrage, though it moved at glacial speed and seemed more like a constitutional principle than an evolving business, subject to change.

Now, the arbitrage business is moving at warp speed. Consider just a few of many brokerage initiatives:

• The New York Times is “buying” content from the Chicago News Cooperative to power its local Chicago edition. It will soon do the same with the emerging Bay Citizen in California. The economics are key here: The Times can’t afford to add full-time staffers at $100k a pop; it can afford something less to get its standard of journalism from other sources.
• Seattle is hosting the battle royale to aggregate local bloggers. The now-online-only Seattle P-I, led by Michelle Nicolosi, has been signing up bloggers for years, and hosts more than 200 of them, who use the P-I’s publishing system. Across town, Bob Payne, communities director of The Seattle Times, is working with 22 hyperlocal sites in the region. That’s a J-Lab-funded project, which the Miami Herald and Charlotte Observer are also trying. All the newspaper sites get more content, as blogs and bloggers get more notice and traffic.
• Hearst recently signed up Bleacher Report to provide fan-generated sports content for its sites.
• Demand’s growing list of competitors to provide brokered content to news companies (and others) includes Associated Content, Helium, Seed, and Examiner, although there are signal differences among them. Outside.In and FWIX both offer pointers to local content of interest and have done deals with news websites.
• Poynter Institute is even putting a finer point of the business of getting cheaper content, hosting a “Stretching Your News Budget with User Content” seminar in May.

Some of this content brokering brings in community-oriented “user-gen.” Some of it brings in useful content in niche areas, like sports, travel, family, religion and much more. Some does both.

Is there a danger in content arbitrage? It’s value-neutral; it’s all in how you do it. Let’s remember that journalism is essentially a manufacturing process, with as much or as little value added as we want.

On a brand- and content-integrity level, it’s all in exercising good judgment — but against a much wider array of choices. On a business level, it’s making sure you are buying low and selling high. Ironically, many news companies are starting to bring in more content — mostly from local bloggers and sites — but few are seeing ad departments monetize it well. That’s buying cheaply, but if you don’t sell it, it’s not really much of a business advance. That should be temporary, if news publishers and editors take content brokering to heart.