Let’s look this week at the journalistic turmoil in the world’s eighth-largest economy: California, a.k.a. the Golden State (beta motto: “We get post-IPO Facebook capital gains taxes — you don’t”).

The massive changes we’re seeing in California journalism portend even faster journalistic change across the country. We Californians like to believe we’re always at the birth of the new new, from Hollywood to Silicon Valley. Certainly, that’s been true of news change — and now that change has greatly accelerated, doing spins, free falls, reversals of fortune, and lots more. It’s not really change — it’s chaos. No one can tell what the journalistic landscape of the state may look like in, say, 2014. All we can say with certainty: we’re witnessing the death and life of California news.

Who will own the biggest news media? Who will manage the biggest news media? How much of a life in print will be left for newspapers as they go digital? And, of course, how many journalists will be paid to get the news to the state’s 37 million residents and to the rest of the country? Already, well over 1,000 daily newspaper journalists have lost their jobs over the past five-plus years.

How many new combinations — among news entities formerly known as newspapers, broadcast, and digital news startups — will emerge and grow to scale? Those combinations are already beginning to tax legacy imaginations, and as of this week, we’ve got a new intriguing model to add to the mix.

The promise of California Watch’s model

Tuesday, we saw a new model birthed: the friendly takeover of one digital news startup by another. California Watch, the almost-three-year-old statewide-oriented model of a modern news agency, is merging with Bay Citizen, the two-plus-year-old Bay Area-oriented news startup, which has had more than its share of birthing pangs.

Both sites were born in the depth of the recession and a relatively dark period of Bay Area journalism. (See “Bay Area Online News Renaissance: 7 Pointers Forward.”) Both hired talented staffs (from voluminous applications) and won journalism awards. Yet California Watch, built on $5 million in foundation funding, developed under the wing of the Center for Investigative Reporting (itselffounded way back in 1977). It has prospered, grown, and earned quick legitimacy and even respect from the state’s major media, which run its stories. CIR, which has long focused on investigative pieces of national import, is now largely synonymous with California Watch; it’s one organization made up of 30 journalists (writers, editors, producers, data analysts, and more) and nine other staffers.

We’re seeing in the merger the greater strength of the California Watch model. Call it B2B (business-to-business), a statewide news agency re-imagined for this century. It’s a model being eyed by journalists in some of the other 49 states: Produce muscular, multimedia journalism once (with a little tailoring of stories by market) and distribute it to many news outlets, from Voice of San Diego to KABC-TV in L.A. to the San Francisco Chronicle. These news distributors pay small sums for the stories, but the money is adding up. Increase the flow of journalism, in the Bay Area specifically and California more widely, and the networking “new wire” importance of California Watch grows, especially as struggling dailies continue to cut their own content-originating staffs.

Bay Citizen foundered on leadership and strategic disagreements, on personalities, on the editorial priorities muddied by the otherwise-valuable feeding-stories-to the-regional-edition-of-The-New-York-Times program, and more. That’s all history now.

CIR/California Watch executive director Robert Rosenthal, and his former boss at the San Francisco Chronicle, Phil Bronstein — the two served as managing editor and executive editor, respectively in the last decade — now face strategic and operational decisions on how best to put together the combined nonprofit. Bronstein, who has served as president of the CIR board, now serves as the executive chair of the merged organization, in part owing to the last wishes of the Bay Citizen benefactor Warren Hellman, who died unexpectedly in December. Two long-time daily newspaper guys, now able to build a new news model outside the constraints of constant cost-cutting and legacy hand-wringing. The foundation is set, with such stories as “On Shaky Ground” (“The Newsonomics of California Watch’s Single Investigative Story,”), which won over many editor skeptics.

For the moment, the big news out of this move is this: the potential to establish a new local model of scale and capacity. California Watch/Bay Citizen will be able to move forward with an editorial staff of more than 50, providing a scale that’s been needed to fill the yawning vacuum of local and statewide coverage. National investigative nonprofits from ProPublica to the Center for Public Integrity have stepped up their work, in volume and value, as newspaper-based coverage has slipped. In America, though, it’s a local-to-statewide news — across the 3,500-mile expanse of the country — that’s been crying out for bigger, new models to build on the successes of the MinnPosts and Texas Tribunes.

MediaNews dives into Digital First

The merger isn’t the only big news news in the Bay Area; it’s just the most public.

MediaNews — the largest news publisher by circulation in the state, with more than 30 dailies and great strength in the Bay Area, north of the Bay Area, and in greater L.A. — is about to be shaken to its Dean Singleton foundation. Singleton built the company, deal by deal, and assembled a coalition of willing executives to run the businesses and newsrooms.

They clustered, they cut, and they maneuvered through bankruptcy, and now their leader has been pushed into retirement, replaced by the wild, private-equity-bankrolled revolutionaries from Digital First/Journal Register Company (JRC). CEO John Paton and company moved rapidly (especially in newspaper time) to turn the financially and editorially bankrupt JRC upside down, lopping legacy costs, shooting voluminous video, opening newsrooms, and jettisoning anything and everything that didn’t smell of local.

That’s easier done in New Haven and Macomb that it is in San Jose and L.A. Applying faster, digital-first fixes to larger newsrooms and newspaper operations offers a complexity of challenge that will makes good drama for the rest of us. Expect to see rolling retirements of the Old Guard, with Denver Post CEO Jerry Grilly already announced.

Reorganizing newspapers on paper (or computer) is one thing — the new management knows its toughest and first challenge can be summed up in one word: culture. Yes, after the newspaper industry has been half-sized, culture, good, bad, and silly, is usually the first challenge new management faces in pushing change.

As MediaNews’ California properties change, they’ll change the landscape around them. Expect differing kinds of new competition and new potentials for unorthodox partnerships. Partner up, in fact, the MediaNews turmoil with those of another high-profile experiment: Patch.

The hyperlocal shoot of AOL, it has made a big bet on California. Of its 800-plus sites, 132 are based here. Many of the sites are lively, with good features, calendars, and lots of local, if episodic, bloggers — even if the sites don’t come close to living up to Patch’s tagline: “Hi there, we’re Patch, your source for local knowledge you can’t live without.” AOL, of course, won’t release traffic data, but its latest financial report showed that its $120 million investment isn’t close to bringing in enough ad revenue. That’s confirmed by checking on the sites (national ads prevail) or attending a local Patch-sponsored community meeting, as I did last Friday. Second question from the audience: “Why don’t you have local ads?”

Given Digital First’s open-newsroom strategy and philosophy, Patch is particularly vulnerable to the MediaNews changes. MediaNews can do what Patch is doing — and cover the news with more than single reporter/editors. Or MediaNews properties could partner with Patch.

Don’t think that Bay Area media change is restricted to text and print. KGO Radio, the market’s long-time talk leader, saw its talk line-up of multiple decades jettisoned one night in December — to public uproar, where else, but on Facebook — as it embraces the all-news (broadcast and digital) mantra and goes head-to-head with KCBS.

Public radio on the move in L.A.

Moving briefly to the south, we can see that the change is only prologue.

If Californians like to be first, they can be the first to claim one metro area with three — count ‘em, three — bankrupt daily newspapers. That would be metro Los Angeles. Both MediaNews (Los Angeles News Group, or LANG, with holdings like the Daily News, the Long Beach Press-Telegram and the Pasadena Star-News) and Freedom Communications (Orange County Register) fell into bankruptcy and emerged quickly from it, with banker and private equity owners. Then last summer, the two tried to mate, as Alden Global Capital, holding about 40 percent of each, tried to arrange an arms-length (tough to negotiate with yourself within the bounds of law) marriage and somehow failed. Tribune’s Los Angeles Times entered bankruptcy in December 2008 and has yet to emerge from equity owner/bondholder hell. Those three companies continue to gyrate in the marketplace, maneuvering within their increasingly limited options.

With L.A. Times publisher Eddy Hartenstein assuming the Tribune CEO title as well last spring, the Times has been shaking up its strategy and management, edging into its own digital-first territory. One clue: the November appointment of a quartet of new VPs tried to find new harmony in digital revenue. They include Jennifer Collins from Variety and Andrea Nunn from HBO, giving an indication the newspaper company is trying to stretch well beyond its roots. They move in as long-time Times chief revenue officer John O’Loughlin moves out, having just assumed the president’s job in a exec-suite reorg at the Houston Chronicle.

Among the Times’ many options: a flipping-the-switch bet that would have it abandon some print to cut costs and become more heavily digital faster.

Ahead of still more staff cuts, the Times lost its change-oriented editor, Russ Stanton, in December — and then saw him hired by public-media mover KPCCas VP of content. Even a few years ago, that would have seemed a bizarre career move. The editor of The Los Angeles Times goes to lead the news effort at a local public radio station?

Yet when you compare the two enterprises — today — you see one in decline and one believing in its own upside.

Yes, The Los Angeles Times still has (today) 500-plus newsroom people, and KPCC can claim fewer than 60. But as the Times cuts, though, the Southern California Public Radio (SCPR) board has given the go-ahead to double its newsroom to more than 110 by July 1, 2014, needing to raise $24 million over four years to do it. Already raised toward that goal: $8 million so far. Already hired: 20 people in the last year. For 2012 alone, the plan is to bring in at least 13 more news positions — including producers, editors, bloggers, and hosts.

Those numbers are curious ones, but still seem small. Don’t, however, under-estimate SCPR president Bill Davis. Davis is a public media exec in the mold of his mentor Bill Kling, the Minnesota Public Radio visionary entrepreneur who first outlined how public radio could become public media and move into the local news vacuum. In fact, MPR, through its joint parent American Public Media subsidiary, is a sibling to KPCC.

Davis knows how to raise money, and he sees the journalistic devastation that’s enveloped his city. Add that energy and ability to the mix and the journalistic arithmetic begins to change. Five hundred newsroom people at the L.A. Times sounds like an army. Peel off the parts of that army that are devoted to sports, entertainment, and the production of content (as opposed to the creation of it), and you may be down to a couple of hundred who report the local news.

That local news — sans entertainment and sports — is what the expanded KPCC plan aims at. So let’s say that KPCC could get to 100 (Kling’s magic number) in the next several years, as public-spirited citizens (a la Philadelphia and Chicago?) chip in to create and sustain a local news alternative. Let’s say the Times continues to reel, run aground on the shoals of legacy costs, and its newsroom, already dispirited, trims down to 150 local news creators. As Rick Santorum said not long ago in Iowa: Ballgame.

Finally, let’s head to the border. There, the San Diego Union-Tribune, worth a billion dollars a decade ago, has been sold twice in three years. This time, local developer Doug Manchester bought it and promises to turn the newspaper of record in California’s second biggest city into a booster sheet. Across town, online startup Voice of San Diego — a California Watch affiliate which just had to cut staff due to budget cuts — has recently partnered with the local NBC station for news coverage.

Mix ’em, match ’em. It’s a Mating Game that seems like it could only come out of California.

Related post: At Almost 400,000 Digital Subscribers, Inside the New York Times Pay Strategy, Year 2

• 390,000 digital subscribers overall.
• Growth rate of 20% fourth quarter over third quarter.

Those are the public numbers. We’re left to extrapolate the dollars. My extrapolation is that the run-rate for the Times’ new digital revenue is about $86 million a year. We take the 390,000 digital subscriber number and assign an average revenue per digital customer of $221 a year. At its four-week (or 13X a year) billing rate, that’s a little less than $17 every four weeks. Full all-access (tablet + smartphone + online) costs $35 each period, tablet access $20, smartphone, $15. So let’s take the differing price points, rolling intro offers (99 cents for the first month), special deals and cancellations into account. Let’s believe that it’s the lowest price point digital product (online + smartphone) for $15 each four weeks generates the majority of buys. Let’s then use a $17 average.

That produces $86 million a year, or more than eight times what the Times took in annually from Times Select; time to bury that ghost. If we compare it to some other Times’ yardsticks, it takes on more meaning:

• It’s 12% of the New York Times overall circulation revenue for the year. That puts the annual circulation number in positive territory — up 3% for the year, and a lively 8% for the fourth quarter – reversing the 2010 trend.
• It’s $100 million less (about $186M for New York Times itself) than the amount of digital advertising revenue for the year. So it’s important, but the digital ad number still is more decisive in making up for the print revenue decline. Despite 10% digital ad growth for the News Media group (without About properties), the NYT property still saw a 3% decline in ad revenue for the year. One more way to look at it: the Times took in $22 million less in advertising overall in 2011, so new digital circulation revenue exceeded that decline by 4X.
• It’s 1.1% of the Times’ 33 million U.S. unique visitors, once we take out international buyers. That one percent seems like a tiny number, but it’s 34% of its print circulation. Anyhow, “total unique visitors” are getting to be close to an irrelevant number. Paid readers who also consume a majority or strong plurality of page views are the customers the Times’ care about.
• It’s four times ousted CEO Janet Robinson’s good-bye payout. That’s small consolidation to outraged staffers, dealing with their own 1% issue.
• It’s four times the dividend family members are hoping to see reinstated. The dividend paid out $20.8 million in 2008. Even they need to be kept happy to keep the Times out of public play, there are few new dollars to assuage them.

So, overall, the Times digital circulation seems to be an increasingly important part of the next-gen publishing model, but not an earth-shaking one. I think much of the story — and import — here is behind the scenes. As we look at the mechanics of selling digital access, we see a business model with birthing pangs, and one that may lead to anticipated and unanticipated healthy development. In talking with Paul Smurl, VP of paid products for the Times, this week, I picked up some related datapoints that help us understand what this first year may lead to:

• 70%+ % of the Times’ print subscribers have now “authenticated.” That’s hugely important. Several years ago, the Times began exhorting its print subscribers — through direct mail and e-mail — to sign up for online access to the Times, laying the ground work, intentionally and unintentionally, for the model of All Access that it introduced a year ago. In August, 2010 the Times had only 50% of Times subscribers registered. That didn’t mean that only 50% read the Times online. It meant that a significant portion didn’t read the Times online and that those who did, but didn’t register, didn’t associate much value with their print subscription payment. Why register, when anyone can go to nytimes.com and read for free?

Now, with three-quarters of print subscribers registered, the Times has climbed a major mountain. Paying customers increasingly see value in both print and digital. The Times can begin, as it has to link up print subscriber profiles (address, demographics, buying history, and more) with digital usage (what read on which device when and lots more). So through these initiatives, the Times is moving — as every smart publisher must — toward a single view of its reader customer. That view then informs the Times’ ability to better target advertising and to sell readers more digital and print stuff, like the New York Times Store. (And it’s all about stuff, as George Carlin timelessly reminds us.)

• Look beyond subscription sales. Hearst, Rodale, Conde Nast and other magazine publishers have led the way in producing new ebook specials. The future here — think of mining the NYT database — is game-changing. Smurl says he thinks of it as “SKU management,” a new discipline for a new publisher. Look for the Times to start with specials around events like the Olympics and the Oscars, feeling its way along as it figures out “cover price,” sponsorship and ad potentials.
• Compare old and new world costs of acquisition: It costs a lot for a newspaper to sign up a new subscriber. I’ve heard estimates from $50 to $200 per new customer. The cost of acquiring a digital customer can be as little as near-zero to a small fraction of the print cost. Here, we begin to get into the positives of the digital press shift; picking up new customers costs far less. CFO Jim Follo noted on this morning’s call that costs for the company will not decrease this (the first time in four years), and part of the reason is increased spending on digital marketing. The Times is pouring the limited cash it has in going to digital subs.
• Churn is less with digital than print customers: Skeptics opined that people might sign up, but then flee after sampling the paid digital product. The opposite appears true: Smurl says digital churn is less than print churn. Add together the low cost of digital acquisition and the lower churn, and you have a formula for much digital marketing experimentation in 2012 and beyond. Who is the Times trying targeting to buy? “Like-mindeds,” in Smurl’s parlance, those with curiosity, societal engagement — and education and income to match.
• About 12% of digital buyers live outside the U.S.: That’s a growing number. It’s an indication that the Times is becoming a global news medium. Of course, that’s always been true, in Internet times, but largely meaningless. It’s been hard to sell advertising outside the U.S. (other than the Times-owned International Herald Tribune’s traditional business) and, of course, there was no way to make money from digital readers. Now that’s changed. With only 5% of the world’s population (last week I focused on this upside in “The Newsonomics of the Global Media Imperative“), the Times has huge growth potential beyond its core market. By 2016, I wouldn’t be surprised if 25% of the Times’ digital subscribers — many with no access to print, remember — are non-U.S.
• Exploiting Sunday: It took about 12 seconds for Times’ readers to figure out the new subscription math, when the company when digital-paid last year. When they did the math and saw they could get the four-pound Sunday paper and “all-digital-access” for $60 less than “all-digital-access” by itself, they took the newsprint. Which stabilized Sunday sales, and the Sunday ad base. Then the Times was able to announce a near-historic fact in October: Sunday home delivery subscriptions had actually increased year-over-year, a positive point in an industry used to parsing negatives. Now, Sunday is emerging a key point of strategic planning. Keep the Sunday paper strong for at least several more years — and quite likely longer — and the Times gains a fighting chance to find a print/digital hybrid model to sustain its journalism.

In addition to his day job, Smurl has been busy over the last year talking to newspaper publishers, near and far, about going paid. Dozens of people have filed into the Times to see what they can learn, and apply. In addition to the tricks of the trade, Smurl finds itself offering quasi-spiritual advice. “You can’t be apologetic about charging,” he tells his often down-hearted visitors. “Sometimes it’s as much a motivational session as anything else,” he says. Today’s motivational lesson heard all around the media world is summed up neatly in four words: 390,000 paying digital subscribers.

Let’s elevate, for a moment.

Let’s take a NASA view of the media landscape, enjoying the clear, whole-earth picture of our struggling news planet.

The wide view would tell us that, although the U.S. often believes itself to be the straw that stirs the global drink, we make up but 5 percent of the world’s population. Our special friends in the U.K. make up only another 1 percent. While much of the world’s digital inventiveness and entrepreneurial investment is born in the U.S.A., the marketplace for digital news, media, and information products has been going increasingly global.

The global digital media revolution is transforming how, in economic terms, we now think of the business. Global growth is no longer an add-on to the usual in-country business model; it’s becoming a major driver of business — and product — planning.

As we look at the newsonomics of the global media imperative, let’s pick out just a few of the many diverse datapoints on which we have to draw:

• The Financial Times, probably the single best model of print-to-digital transformation success, has announced that its digital business leader, Rob Grimshaw, is leaving Number One Southwark Bridge, astride the Thames, for New York City. Grimshaw is managing director of FT.com, and his business is truly global. The company, founded in 1888, now finds 31 percent of its readers in the Americas and only 23 percent in the U.K. — with another 13 percent now in Asia. For the FT, Grimshaw’s move is logical: Go where your customers are, and to the heart of digital innovation. (Talk to Europeans in the digital business, and they’ll tell you how America-centric, and West Coast-centric, the digital business is, somewhat to their dismay.) For the FT, even with its good number of American consumers, the U.S. is “an emerging market,” a belief held by Reuters as well.
• If you were to name the FT’s most head-to-head competitor (for time, and thus indirectly for money), it would be The Wall Street Journal. The Journal’s digital audience is now 30 percent international, and just last week in launched still another international local (in native language) edition, for Germany. The Journal’s crosstown rival, The New York Times, is moving globally as well. Already 12 percent of its paying digital subscribers are international, with the Times applying its pay strategies to its European operation, the International Herald Tribune. Last year, it also launched India Ink, focused on that country’s news and culture, with an on-the-ground team there. Expect the Times to move into China this year.
• Less than a year after launching its first non-U.S. site in Canada, Huffington Post last week added an Italian site, alongside its French one. It continues negotiating with publisher partners in several other western European countries, following up on Arianna’s meet-and-greets there last fall.
• The (second) British invasion of the U.S. continues apace (“The newsonomics of the British invasion,”), as the Guardian (reinvigorated U.S.product), the Independent (using Press+ to sell access to U.S. consumers), the BBC (staffing up editorial and ad pushes) and the Daily Mail, which announced a new U.S. push last year and said last week it is now moving on to India.

This isn’t just about news media. Netflix, in yesterday’s earnings report, tells us that almost 10 percent of its streaming business is now global, almost two million of 21 million streaming subscribers. That global growth — and huge upside — is balancing Netflix’s 2011 pricing stumbles.

For an even bigger picture perspective on the global imperative, let’s look at the four digital behemoths that are reshaping everything in their paths (get out of the way, if you can, or accede to junior partner status). Consider how much revenue each of Google, Apple, Facebook, and Amazon earned from outside the U.S in the first three quarters of 2011, from my recent report for Outsell, “Getting it Right with GAFA”:

• Google: 54 percent
• Apple: 54 percent
• Facebook: 38 percent
• Amazon: 46 percent

Yes, there’s lots of current political hullaballoo about “bringing jobs home to the U.S.,” but the truth is that much of the digital industry, as with their brethren in the Fortune 500, is now truly global. Look at those GAFA numbers and you have a harder time thinking of them as American companies, in the traditional sense of serving American customers.

Forget the 99 percent meme; think of the 95 percent (outside the U.S.) as the real opportunity for the companies formerly known as national. (And, yes, the global imperative further illustrates the difficulty that metro and community newspapers face in finding growth. Other than metro newspapers’ smartphone, tablet, and web city-guide potential for international visitors — $1.34 trillion spent by 60 million of them last year — the lure of global riches doesn’t do much to support community journalism in our far-flung land.)

It’s a stark fact for what once were nationally defined media businesses: If you don’t go global, you’re at an increasing disadvantage to your competitors — and who isn’t a competitor for audience or advertising? If you stay nationally focused, you’re trying to wring as much revenue out of a much smaller market, while competitors are building their top line and their capability to innovate with global revenues. So increasingly, I think we’ll see media companies that are either global or regional/local, with national ones more the exception than the rule. Yes, there’s a role that the English language plays here, as about a billion people worldwide may read English well enough to be eligible audience, and, that, too adds to the imperative to compete against other English-first media based in London or New York. Yet as proven with the Journal’s non-English editions, this is about more than language domination. We also see early signs of non-English products finding their way to English speakers, as Worldcrunch (“All news is global”) brings translations of top worldwide titles to the market.

There are lots of ways to play the global game. Many newspaper companies are putting out editions of their core product, aimed at in-country issues. Some are putting a new face on the same content. Then there are those truly becoming multi-national news and information companies.

You’d have to put Oslo-based Schibsted in that group. Now eighth overall by revenue in the global news industry, the company operates online classifieds businesses in 28 nations; in 20, that’s its main business. Those nations can be found on three continents and now include such populous growing markets as India, the Philippines, Indonesia, and Malaysia, as well as much of Latin America. That’s a truly global play that is supplying Schibsted with 49 percent of its profits, on just 25 percent of total revenues.

News Corp. — the leading company by news revenues worldwide — is certainly flexing its muscles, even if it contracts them for the time being in the U.K. amid scandal. Just in the last week, we saw the company’s moves in Turkey and Afghanistan, which aim to add to its presence on every continent. As a pipes (satellite and cable) and content company, the lines between the two will blur. Expect for instance, products like the innovative WSJ Live  (“The Newsonomics of WSJ Live“) to find carriage all over the world as digital distribution and monetization mature.

A lot of what we are seeing in the marketplace today is prologue. If you look at how small the non-home-market revenues are for many companies — in the low single digits — we see not global businesses, but national businesses with stronger global intentions.

What’s your signature content?

Quick: If somebody buttonholed you in an elevator, a school play, or a bar, and said, “Why should I pay you for that?” — what do you tell them?

Each passing week, it seems we’re further into the age of signature content. That only makes sense: If the death of distance is now old news, if everything is available everywhere at the touch of button or the swipe of a finger, then what makes any news or entertainment brand stand out amid this plague of plenty?

Closed systems — from three or four TV networks to less than a dozen big movie studios to a half-dozen major magazine publishers to geographically dominant newspapers — made signature content less important. Sure, big shows and big names have always driven media to some extent, but now, media without big names or big shows are going to get lost in the ether. Take Hulu’s announcement last week about Hulu Originals. You do have to wonder if Hulu’s fictional 13-episode “Battleground,” about a dysfunctional political campaign, will be bested by the Republican reality show in progress when the show debuts next month. Hulu is also bringing a Morgan Spurlock series for a second run, and probably will feature one other new program. The Hulu announcement joins Netflix’s own foray into signature content. Three years ago, would the thought of Netflix signing up Little Steven to do an original comedy series have crossed anyone’s imagination?

Hulu and Netflix both need to distinguish themselves in the market — not only from each other, but from Comcast, DirecTV, and Time Warner, among others. They need to buy protection as supposed masses consider cutting the cord on packaged services, Roku-ing and Apple-enabling Internet video onto their living-room screens. In movies and TV, we’re quickly morphing from a world of news and entertainment anywhere — get all of these things, somewhat haphazardly (Comcast Xfinity, for instance) on all of our devices — to one in which consumers ask, “What special do you have for me, in addition to my all access? Yes, All-Access, the cool feature of 2011, will quickly graduate from a wow to an expectation.

Why as consumers should we pay $7.99 (down from an initial $9.99) to Hulu Plus, when the same stuff (kinda sorta) is available through Boxee, or Apple TV, or Netflix, if I can find it? Why am I paying $7.99 a month (apparently the magic price of the moment) to Netflix for a catalog of films that is both voluminous and too often lacking what I want? Consumers are going to be asking that question a lot more.

Publishers, distributors, aggregators, and networks all want more money, and they’ve seen — courtesy of tablets and All-Access — that consumers are now more ready to pay for digital content than ever before.

Forget “content wants to be free.” Now content wants a fee. And everyone from Time Inc to The New York Times to the Memphis Commercial Appeal to Hulu’s co-owners (Fox, Disney, and Comcast) see gold. They see another digital revenue stream, in addition to advertising or to cable subscription fees. Yet they are increasingly believing they’ve got to up the ante (and Hulu is raising new funds to buy original programming) to compete and to win those consumer dollars.

News companies — at least one in ten U.S. daily newspapers and many consumer magazines — are rapidly embracing digital circulation revenue and All-Access. Yet results have been quite uneven. That makes sense: Consumers will pay for digital news, feature, and entertainment content, but they don’t want to overpay, and they’ll increasingly be forced to make choices. Buy this; let that go.

Let’s be clear. Paid media is paid media, and the original-programming pushes of the video companies have great meaning for news and magazine companies, global to local. For them, the calculus is similar. News and magazine brands can launch new products, though that’s out-of-their-DNA-tough for many. So they’ve focused primarily on sub-brands, many of which are people. These are the faces of news and magazines; many of these have become hot commodities over the last several years (“The Newsonomics of Journalistic Star Power“) as companies try to distinguish themselves — and give readers and viewers a reason to pick them out of the crowd.

How, though, can media companies afford to pay a premium for branded, promotable talent, talent that may open consumers’ pocketbooks? That’s easy: spend less on other content. So we’ve got the rise of user-generated content, obtainable free or cheap, and all kinds of new syndicate action from Demand Media to startup Ebyline (and maybe NewsRight), all trying to make it cheap and easy to get more medium- and higher-quality content more cheaply. What’s old is new again — as a young features editor, I got regular visits from syndicate and wire salesman, ranging from high-quality to the Copley News Service, that sold its stuff by the pound.

Another prominent model no news or magazine company can afford to ignore: The Huffington Post. Back to the early days when Betsy Morgan first teamed up with Arianna, HuffPost has worked this evolving content pyramid. At the top, a few highly paid site faces, many opinionated faces (some paid, most not), and then low-cost aggregation, much of it AP, headlined with the site’s recognizable swagger.

Then, of course, there’s the old standby: staff cutting. We’ve seen lots of staff cutting. In fact, these days, while we see some announcements like Media General’s big Tampa cut, most of the bloodletting is less public, but no less real. If you need to pay more to stars, and ad revenues are still declining, staff cuts of less than premium content (and those that produce it) make economic sense (“The Newsonomics of the New News Cost Pyramid“). It’s the new news math.

These newsonomics of signature content are getting clearer. Netflix is planning to spend 5 percent of its expenses — or $100 million a year — on original, Netflix-defining content. Hulu is spending about a quarter what Netflix’s total, or $500 million in total, on all content licensing this year. We don’t know how much of that is for original content, but observers believe “Battleground” will cost $15-20 million for its 13 episodes. With its other forays, it will probably spend closer to 10 percent of its content budget on original content.

Curiously, many newspaper newsrooms constitute only 10-20 percent of the overall expenses of a daily newspaper company. So we’re starting to see some new, and old, arithmetic play out here.

Simply, Andy Forssell, Hulu’s SVP of content, explained the cost/benefit ratio to Variety: “…having an original scripted series that hasn’t been seen anywhere else yet is considered the best tool for standing out with either advertisers or viewers.”

As usual, we see the bifurcation of the bigger national brands — those with more audience to gain and more money to spend — and local news brands. While many local newspapers have cut to the bone, with too much of the tissue in the form of experienced, name-brand metro and sports columnists cajoled or drummed into “early retirement,” we see increased branding of stars at places like Time, The New York Times, Fox News, and ESPN. The sports network may be the classic business model of our age, and in its anchors and top analysts — many initially lured from daily newspapers — it has shown the way for many years now.

At the Times, consider business editor Larry Ingrassia’s build-up of business columnists, from veterans Gretchen Morgenson and Floyd Norris to new(er)bies Andrew Ross Sorkin, Brian Stelter, David Carr, Ron Lieber, and David Pogue. And the Times more recently picked up James Stewart from archrival Dow Jones.

At Fox News, Roger Ailes has cannily built the most successful cable news operation not on the interchangeable blondes that provide so much fodder for Jon Stewart and Stephen Colbert, but on O’Reilly and Hannity.

At NBC, the news franchise is so built around Brian Williams that his well-received newsmagazine “Rock Center with Brian Williams” is synonymous with its host.

At Time Warner’s CNN and Time, we see the building of a worldly franchise on Fareed Zakaria’s clear-eyed, no-nonsense view of our times.

And then there’s the more local and regional press. Newspapers have long believed that it wasn’t any one or a half-dozen names that sold the paper. They’ve believed the news itself was the star, and the daily information report was the brand. That may be still be true of the Times, the Journal, the Financial Times, the Guardian, and a handful of other national/global news organizations — all of which have substantial, multi-hundred newsrooms that produce branded, unique products. It’s less true of regional and local dailies, many of which still present too much commoditized news in national, business, entertainment, and sports coverage, and have bid goodbye to many faces familiar to readers. Those that have retained familiar faces must do what they can to keep them; all need to recruiting more.

Then they may have a good answer to the question, in one form or another, consumers and advertisers will increasingly ask: What’s your signature content?

It’s an emerging issue of our time and place. They know too much about us, and we know too little about what they know. We do know that what they know about us is increasingly determining what they choose to give us to read. We wonder: What are we missing? And just who is making those decisions?

Today, in 2012, those questions are more pressing in our age of news deluge. We’re confronted at every turn, at every finger gesture, with more to read or view or listen to. It’s not just the web: It’s also the smartphone and especially the tablet, birthing new aggregator products — Google Currents and Yahoo Livestand have joined Flipboard, Pulse, Zite, and AOL Editions — every month. Compare for a moment the “top stories” you get on each side-by-side, and you’ll be amazed. How did they get there? Why are they so different?

Was it some checkbox I checked (or didn’t?!) at sign-in? Using Facebook to sign in seemed so easy, but how is that affecting what I get? Are all those Twitterees I followed determining my story selection? (Or maybe that’s why I’m getting so many Chinese and German stories?) Did I tell the Times to give the sports section such low priority? The questions are endless, a ball of twine we’ve spun in declaring some preferences in our profiles over the years, wound ever wider by the intended or (or un-) social curation of Facebook and Twitter, and multiplied by the unseen but all-knowing algorithms that think they know what we really want to read, more than we do. (What if they are right? Hold that thought.)

The “theys” here aren’t just the digital behemoths. Everyone in the media business — think Netflix and The New York Times as much as Pandora and People — wants to do this simple thing better: serve their customers more of what they are likely to consume so that they’ll consume more — perhaps buying digital subscriptions, services, or goods and providing very targetable eyes for advertisers. It’s not a bad goal in and of itself, but sometimes it feels like it is being done to us, rather than for us.

Our concern, and even paranoia, is growing. Take Eli Pariser’s well-viewed (500,000 times, just on YouTube) May 2011 TED presentation on “filter bubbles,” which preceded his June-published book of the same name. In the talk, Pariser talks about the fickle faces of Facebook and Google, making “invisible algorithmic editing of the web” an issue. He tells the story of how a good progressive like himself, a founder of MoveOn.org, likes to keep in touch with conservative voices and included a number in his early Facebook pages.

He then describes how Facebook, as it watched his actual reading patterns — he tended to read his progressive friends more than his conservative ones — began surfacing the conservative posts less and less over time, leaving his main choices (others, of course, are buried deeper down in his datastream, but not easily surfaced on that all-important first screen of his consciousness) those of like-minded people. Over time, he lost the diversity he’d sought.

Citing the 57 unseen filters Google uses to personalize its results for us, Pariser notes that it’s a personalization that doesn’t even seem personalized, or easily comparable: “You can’t see how different your search results are than your friends…We’re seeing a passing of the torch from human gatekeepers to algorithmic ones.”

Pariser’s worries have been echoed by a motley crew we can call algorithmic and social skeptics. Slowly, Fear of Facebook has joined vague grumbles about Google and ruminations about Amazon’s all-knowing recommendations. Ping, we’ve got a new digital problem on our bands. Big Data — now well-advertised in every airport and every business magazine as the new business problem of the digital age to pay someone to solve — has gotten very personal. We are more than the sum of our data, we shout. And why does everyone else know more more about me that I do?

The That’s My Datamine Era has arrived.

So we see Personal.com, a capitalist solution to the uber-capitalist usage of our data. I’ve been waiting for a Personal.com (and the similar Singly.com) to come along. What’s more American than having the marketplace harness the havoc that the marketplace hath wrought? So Personal comes along with the bold-but-simple notion that we should individually decide who should see our own data, own preferences, and our own clickstreams — and be paid for the privilege of granting access (with Personal taking 10 percent of whatever bounty we take in from licensing our stuff).

It’s a big, and sensible, idea in and of itself. Skeptics believe the horse has left the barn, saying that so much data about us is already freely available out there to ad marketers as to make such personal databanks obsolete before they are born. They may be forgetting the power of politics. While the FCC, FTC, and others have flailed at the supposed excesses of digital behemoths, they’ve never figured out how to rein in those excesses. Granting consumers some rights over their own data — a Consumer Data Bill of Rights — would be a populist political issue, for either Republicans or Democrats or both. But, I digress.

I think there’s a way for us to reclaim our reading choices, and I’ll call it the News Dial-o-Matic, achievable with today’s technology.

While Personal.com gives us 121 “gem” lockers — from “Address” to “Women’s Shoes”, with data lockers for golf scores, beer lists, books, house sitters, and lock combinations along the way, we want to focus on news. News, after all, is the currency of democracy. What we read, what she reads, what they read, what I read all matter. We know we have more choice than any generation in history. In this age of plenty, how do we harness it for our own good?

Let’s make it easy, and let’s use technology to solve the problem technology has created. Let’s think of three simple news reading controls that could right the balance of choice, the social whirl and technology. We can even imagine them as three dials, nicely circular ones, that we can adjust with a flick of the finger or of the mouse, changing them at our whim, or time of day.

The three dials control the three converging factors that we’d like to to determine our news diet.

Dial #1: My Sources

This is the traditional title-by-title source list, deciding which titles from global news media to local blogs I want in my news flow.

Dial #2: My Networks

Social curation is one of the coolest ideas to come along. Why should I have to rely only on myself to find what I like (within or in addition to My Sources) when lots of people like me are seeking similar content? My Facebook friends, though, will give me a very different take than those I follow on Twitter. My Gmail contact list would provide another view entirely. In fact, as Google Circles has philosophized, “You share different things with different people. But sharing the right stuff with the right people shouldn’t be a hassle.” The My Networks dial lets me tune my reading of different topics by different social groups. In addition, today’s announced NewsRight — the AP News Registry spin-off intended to market actionable intelligence about news reading in the U.S. — could even play a role here. (More on NewsRight: “Nine Questions for the Cusp of 2012“)

Dial #3: The Borg

The all-knowing, ever-smarter algorithm isn’t going away — and we don’t want it to. We just want to control it — dial it down sometimes. I like thinking of it in sci-fi terms, and The Borg from “Star Trek” well illustrates its potential maniacal drive. (I love the Wikipedia Borg definition: “The Borg manifest as cybernetically-enhanced humanoid drones of multiple species, organized as an interconnected collective, the decisions of which are made by a hive mind, linked by subspace radio frequencies. The Borg inhabit a vast region of space in the Delta Quadrant of the galaxy, possessing millions of vessels and having conquered thousands of systems. They operate solely toward the fulfilling of one purpose: to “add the biological and technological distinctiveness of other species to [their] own” in pursuit of their view of perfection“.) The Borg knows more about our habits than we’d like and we can use it well, but let’s have us be the ones doing the dialing up and down.

Three simple round dials. They could harness the power of our minds, our relationships, and our technologies. They could utilize the smarts of human gatekeepers and of algorithmic ones. And they would return power to where it belongs, to us.

Where are the dials? Who powers them? Facebook, the new home page of our time, would love to, but so would Google, Amazon, and Apple, among a legion of others. Personal.com would love to be that center, as it would any major news site (The New York Times, Zite-powered CNN, Yahoo News). We’ll leave that question to the marketplace.

Lastly, what are the newsonomics of the News Dial-o-Matic? As we perfect what we want to read, the data capturing it becomes even more valuable to anyone wanting to sell us stuff. Whether that gets monetized by us directly (through the emerging Personals of the world), or a mix of publishers, aggregators, or ad networks would be a next battleground. And then: What about the fourth wheel, as we dial up and down what we’re in the marketplace to buy right now? Wouldn’t that be worth a tidy sum?

2. Didn’t CNN’s coverage of the Iowa Caucuses illustrate our screens future? John King has been the King of the Screens, and we can remember when his magic-touch screen seemed wildly innovative. Now in the touch-screen era, it was all screens all night — save Wolf Blitzer’s classic utterance of “OMG” in seeing Romney go up by a single vote — and CNN newbie Erin Burnett brought the right slapstick spirit to the uncertain screencraft. She whooshed one image off one screen on to the next one, sometimes successfully. CNN’s use of data, even as limited as it was for this election, showed how much we’ve moved beyond the world of still print infographics. The marriage of analytics and screens from tablets to livingroom monitors is forever changing how we take in information.

3. If AOL crumbles in one direction or another, what’s the future for smart cookie Arianna Huffington, who has parlayed personality and business model into an enviable perch in American journalism? Who might pick up HuffPo, one of the easiest-to-define business lines in journalism? How much will its relatively low rate of ad return (“The Newsonomics of ARPU” deter buyers? With the emergence of a broad international strategy (10 new editions) – “We’re now re-expanding back into a list of countries”, said CEO Tim Armstrong Tuesday – it becomes a more interesting play.

4. With Alibaba hot on the Yahoo tail, how much should we wonder about the future of big aggregators stocking up on a professional journalists? AJR estimated that Yahoo has hired about 200 journalists and AOL 250 (not counting the Patchers). Those hundreds have produced some pretty good journalism, particularly with sports scoops, and have proven that the term “as first reported by Yahoo,” isn’t a joke. The question of Chinese ownership is a knotty one (interesting Fortune take on American hypocrisy, here), but we have to ask questions about how free a journalistic corps would be under Jack Ma leadership. It might be well and good to uncover U.S. football corruption, and that’s a growth sport itself, but what about wider public policy coverage? For AOL journalists, the questions are even gauzier. With AOL’s deepening financial questions and investor pressure to cut back on non-profit-producing business lines, how long will there jobs be maintained, under current or potential new management/ownership?

5. Won’t be 2012 be the age of All-Access perfecting? Time Inc is among those getting its tablet act together well, with Time Magazine a fairly slick tablet app. In December, the company made a foray at convincing print subscribers that connecting the print sub with digital access is a good idea. The sign-on process is fairly straightforward, and seems to hold session to session, unlike some others. Yet, subscribing to more than one Time Inc. product — Time Magazine and Sunset, for instance — has to be done twice. Expect that kind of obstacle to be eliminated going forward. All-Access will be real all access, made easier for consumers. And All-Access is even trickling down very local as the Monterey (Ca.) County Weekly heralds its all-access availability through public radio sponsorship. Getting All-Access right — pricing, real tablet- and smartphone-appropriate apps, customer ease, giving subscribers cross-title benefits — is one of the biggest tasks for news and magazine publishers this year.

6. How could a single person be empowered to send a message on behalf of the New York Times to eight million people? The Times’ your subscription-is-ending embarrassment email showed the company at its worst in detecting and handling a crisis. My larger question is how, in any scenario, a single person has the unchecked power to send a message to eight million people on behalf of a big brand? The culture of checking and doublechecking (yes, the sorry Judith Miller tragedy aside) is so deeply ingrained in Times’ DNA. Why isn’t it part of the wider culture, especially in the one-click age?

7. What’s more local than language? The Times profiled Wordnik Sunday. It’s an innovative modern language company making the most of digital technology to surface new and real meaning of our living language in this fast-changing age. Noted in the story is that the Times and News Corp’s Smart Money are using Wordnik for glossaries? As local media look for ways to really be more local, knowing and presenting more about place is essential. So what about using something like Wordnik to create local language guides? It’s a small idea, perhaps, but one showing how even local media need to make more use of digital tools if they are to make future claims of relevance to local audiences.

8.Hasn’t Gail Collins turned out to be a just-right-for-the-times replacement for Frank Rich? Rich’s rich prose and panoramic view often left us breathless in its sweep, and well deserved a Pulitzer. Yet Collins — a New Yorker who recently pointed out that “John McCain came in fourth in 2008, with the support of 15,500 Iowans. This is approximately the number of people who live on my block” – has brought a Hee-Haw sensibility perfectly suited to the Wonderlandia of the Republican primary scene.

9. With a call-out to Ken Kesey, isn’t 2012 the year when you’re either on the cloud … of off it?

The New York Times is slimming down to bulk up. It is no longer a newspaper company, with a strong national newspaper, a Boston cousin in the Globe and regional newspaper interests. It is a global news company whose future is mostly digital, and it will live or die on that adventure. It is a company that now sees 63% of its revenues (last from the third quarter) coming from the Times print and digital operations. Over the past several years, the Times — despite its many trials (selling its flagship building, participating in Carlos Slim usury, before paying back the 14% $250 million loan to the Mexican magnate) — has outperformed financially both the regional group and the Globe .

That only makes sense. Borrowing lessons from Google, Microsoft, Yahoo and many others, the global Times is about scale. You can pay a Times reporter to write a story that can reach some of the Times ‘ 50 million global monthly unique visitors, three-fifths of them in the U.S. Or you can pay a Gainesville or Tuscaloosa reporter a little less to write a story that can reach a hundreth of that total. Do the math, and the future bet is on the company with the big global news brand and the reach.

The regional news companies, important as they are to their communities, have been but a business distraction. The Times has tried to sell them before, pulling back as market conditions forced it to do. Now Halifax Media Group seems set to complete its deal, which we’d have to believe is in final form given its inclusion of the NYTRNG papers on its website (courtesy of Romenesko), now taken down. Halifax is part of new generation of newspaper property buyers, believing they can make a go of these distressed properties, through more consolidation of jobs and other efficiencies. (“Now at Fire Sale Prices, a Few Newspapers…and Maybe More,” Newsonomics, Dec. 2, 2011)

For the Times now, and going forward, the competition is CNN, the BBC, News Corp, ABC, NBC, the Guardian, Bloomberg, Reuters and several others. Who indeed will be among the most trusted names in the (digital) news business?

The spasms of change at the Times come ironically after one of the most relatively successful years for the company. Yes, profits are still tough to come by — a measly $33 million in the last quarter — but the company pulled off a digital pay scheme that has established a modest beachhead. It begins to provide the Times a second digital revenue stream, in addition to advertising. Circulation revenues grew 3.4% for the last period, as the Times’ new digital All-Access push circulation had netted 324,000 “digital” subscribers of one kind or another and enabled the first Sunday home delivery print increase since 2006. It has positioned itself well with apps for emerging tablet and smartphone platforms, moving quickly into the Apple Newsstand, for instance. It is aiming for ubiquity and is in the lead of the newspaper pack, with the Journal nipping and biting along the way.

Yet, ominously, print advertising revenues decreased 10.4 percent and digital advertising revenues decreased 4.5 percent in the last quarter. 2012 looks like another down year, in high single digits. In fact, there’s an array of numbers that offer a quite uneven path to success next year, as I described in the Newsonomics of 2012′s Magic Formula, last week.

Consequently, the company is barely keeping even, and will likely have to accelerate cuts next year to stay profitable. So the plow must be sped. With less than a quarter of its revenues now driven by digital, the Times has to move quicker. It may balance (smartly as its done with its Sunday print/digital pricing) package print and digital, but it is has to grab mind share and market share in all the emerging digital spaces, tablet, smartphone, connected TV and web.

Expect the new CEO, most likely from the outside to be focused on three A’s: audience, advertising and analytics. Arrange those three in a virtuous circle, and you have an efficient spinning of the new digital economy. That’s clearly what Time Inc has in mind as it hired Laura Lang from the ad world.

The new CEO must also drive a faster kind of decision-making at the Times Company, a company now seeing both CEO Robinson and digital head Martin Nisenholtz leaving at the same time, the latter by retirement. Famously balkanized, with numerous power centers, the company has been both innovative and plodding. That’s an odd combo, but one fitting its prudent-above-all news culture. With one distraction removed (and now we wonder about the Boston Globe, its own pay scheme innovation underway, and how long it will remain a Times Company property), the new CEO aces a tough terrain. Given that the company, even post NYTRNG sale, is 90%+ newspaper-based, it suffers in its ability to grow. News Corp, CNN, Reuters and Bloomberg all are part of large, diversified companies that can buffer them from the permanent print ad downturn. As Janet Robinson found, the path forward is an extremely narrow one.

There’s an algorithm out there, we can be sure. It’s got all the components of business success for news-creating companies, each value carefully computed and relational to the others. Yet, approaching 2012, the algorithm hasn’t been found. We have but shreds of numbers, beacons of numerals that portend models, but can’t prove them out.

2011 has been a remarkable year. We can point to three major phenomena that profoundly changed the news landscape this year. Each offers up its own half-formed metrics for that magic formula in process, and each has dramatically changed the possibilities of news, each largely positive:

• The transcendant transformative age of the tablet: The first real replacement device for print swept aside doubters, netbooks, and much conventional wisdom before its second birthday. More than one in 10 American adults owns one, with that number likely to more than double in the next two years. Those owners are readers, spending lots of time with news, single brands, and longer stories.  (“The Newsonomics of the Missing Link“)
• The dawn of digital circulation: Forget “paid content.” Forget “paywalls.” It’s the back-to-the future age of circulation: paying for news and magazines that we depend on, no matter how they are delivered to us. All-Access reinforces our relationship with news and magazine brands we like; ubiquitous access (print, online, tablet, smartphone, soon connected TV) allows us to justify paying for convenience as much as the content itself. Publishers are still experimenting with how to get the paid proposition right, but those that do now have a potent second digital revenue source — and that’s a business advantage digital-only competitors lack.
• Social curation joins editorial curation: We knew that Facebook, in particular, and “social” more generally — including Twitter, LinkedIn, most-emailed lists and our own individual sharings — were changing how we all decided what to read. Now, though, social curation is being built into the best publishing models. Why should each of our own personal quests be a virgin start-from-scratch idea when many consumers/searchers/researchers/shoppers (some of them people like us) have tread there before? So social intelligence, gleaned from mountains of data, is becoming a required part of the companies’ product development and consumer experience. Facebook is in the catbird’s seat as that world develops.

Those three game-changing phenomena offer major drivers of change — but not models. For publishers, the near-term is just getting harder and harder; witness Media General’s major cuts of this week in Tampa (16 percent workforce reduction) and elsewhere. Major cuts are happening this month and into January, as publishers gird for another 5-12 percent decline in ad revenues. Continuing profitability can only be achieved by cutting.

Publishers, publicly or not, are embracing the Digital First mantra of John Paton and Clark Gilbert, the industry’s dynamic duo, who put on another show at BIA/Kelsey this week. Everyone’s into the deconstruction/reconstruction of their companies; some are faster, more adroit, and more public about it.

As that reconstruction moves forward, the new magic formula may seem simple: reconfigure costs and revenues. Yet, working the in-between — most publishers still depend on print for 80 percent of their revenues — is hardly formulaic. Building the new cost structure and the new revenue structure, in tandem, with changing audiences and advertising spending habits, is the fixing-the-moving-car-at-65 MPH scenario publishers face.

With that speeding car in mind, let’s look at some of the numbers that will go into that magic formula, when it’s finally perfected. Mix, match, blend, and extrapolate:

5-15 percent: That’s the percentage of many news sites monthly unique visitors that drive half or more of their pageviews. That’s a jaw-dropping number, and one that news companies are just beginning to acknowledge — privately. Why be quiet about it? Look at the annual reports and quarterly financial disclosures of the public companies; they trumpet uniques and pageviews. Yet in the age of news ubiquity, we’ve reached near-infinity in pageviews and of ad inventory. Is there much meaning left to one random web visitor hitting one random web page, courtesy of Google or Facebook, some time in any given month? Not much. Yet, that’s what most people still point to publicly. Privately, the question is the 5-15 percent. These are your customers. How much will they pay for access? How much more valuable are they to targeting advertisers, given you know much more about their reading and shopping habits? The metric needed: How much does a core customer yield annually, and in a lifetime? Then: How do I most efficiently find and convert more of them?

35 percent: That’s the percentage of print readers who will transition to tablet-only by 2014, believes one prominent news company, which is using that forecast in its business planning. High? Low? What’s your number?

$544 a year: That’s a Newspaper Association of America number (from 2009) for the revenue value per unit of Sunday circulation. What will a tablet customer be worth, combining subscriber and ad value? Get that answer right and you can try to accelerate, or slow down, your readers’ embrace of the tablet.

10-20 percent: That’s how much of national news company traffic now comes from mobile; Facebook already says that 35 percent of its use comes from mobile. Yet, in the U.S., only three percent of digital revenue comes from mobile. That’s a huge gap — the audience is way ahead of the money — and it will be closed over the next several years. In fact, in the age of expected anywhere access, “mobile” will disappear as a category. Big issues for publishers: dividing what kinds of revenues can be wrung from tablet (now lumped into “mobile”) and from the brain extensions in our pockets and pocketbooks, the smartphone.

One billion: That’s one estimate of how many smartphones will be shipped worldwide in 2016. It’s a continuing curve upward from the almost half-billion shipped this year. U.S. smartphone penetration is about a third of cellphone owners; so there is lots of headroom for growth. (Singapore’s the first to cross the 50 percent threshold.) Big challenge for news and magazine companies: coming to terms with how to make money on that little screen: advertising, sponsorship, All-Access subs, and more.

63 million: That’s the number of smart TVs that will be shipped in 2011, up from 43.6 million in 2010. 2016 forecast: 153 million. Smart TV is just the next screen, joining the tablet and the smartphone, providing us ubiquity. When WSJ Live (“The Newsonomics of WSJ Live“) — the company’s model-breaking tablet product launched this fall — it included launch partners Samsung and Vizio, leading smart TV makers. This is the beginning of the next wave.

$2.75: That’s the average ad CPM, or cost-per-thousand rate gotten, at one top 15 news sites. Average rates have been going down and are likely to continue doing so. High-targeted and high-branded (combine the two, and you’ve got the best of both worlds) audiences continue to outpace average sites and average inventory. It’s less and less good to be average.

22 percent: That’s the third-quarter increase in U.S. digital ad revenue. Digital ad growth accelerates as print declines more rapidly; in the U.S., it is now surpassing newspapers to become second only to TV. Worldwide, expect the industry to hit $80 billion this year. Within that ad spend, publishers have access to less than half: Paid search continues to be about half the market, with publishers getting only a tiny slice of it. Display/banner ads — publishers’ strongest suit — account for 23 percent of the total. Video is growing 42 percent a year. Performance-based business models (as opposed to selling impressions) now command 64 percent of the market. (Most data from IAB.) So, in all the areas of growth, news and magazine publishers are weakest. Despite uneven digital ad results reported by newspaper and magazine companies, it’s not that the money isn’t there — they just haven’t transitioned their businesses enough to compete for it.

$13 billion: That’s the amount of retail ad revenue the newspaper industry in the U.S. took in for all of 2010, and it’s down this year. Retail makes up roughly half of all newspaper companies’ ad revenue. In a new, circle-the-wagons attempt to hold on to it, ShopCo, a consortium of eight of the large newspaper companies, is building out a new local shopping portal. FindnSave, tested first by McClatchy, should be up in 250 larger markets by the middle of next year. Will it be good enough and big enough, to satisfy both consumers and merchants? (“The Newsonomics of Google’s retail push“)

25 percent: So if a reader drops print and embraces the tablet, and digital access overall, how much savings can a news company achieve? It no longer has to print and deliver a paper, but it still has the costs of maintaining a staff, maintaining distribution, and maintaining a plant. So maybe it costs 25 percent less to fulfill that customer’s access? In this long interim with hybrid digital and print reading, how much of their production costs can companies cut out? The long-term question: At what point can the news industry make a major shift, as most reading becomes digital and a minority of it in print?

56.7 percent: That’s the percentage of downloaders of the Guardian’s new Facebook app who are under 24, with 16.7 percent 17 or younger. For a news industry decrying the lack of young readers and focused on aging baby boomers as the core audience, the Guardian’s early experience is phenomenal. It’s well and good to sell All-Access to long-time print readers; it’s essential to bring in new ones, and Facebook looks like a great bet.

7: Daily means seven days a week for newspapers, right? MediaNews is dropping Monday printing at some Northern California papers. Michigan remains the epicenter of the non-daily daily. Following the 2009 cuts in metro Detroit, Advance is now going digital-first with smaller papers there, with several becoming three- and four-day print “dailies.” The idea: keep 85 percent of print ad money and radically reduce print costs. Publishers take a very deep breath and hope they aren’t cutting the print cord too soon. Expect to see more of such day cuts in 2012 and beyond. It’s a hybrid strategy, and as we see its impacts — on print ad revenue and on digital reader and ad transition — we’ll have new numbers to plug into the model.

> 1 percent: Google now makes 54 percent of its revenue outside the U.S., as does Apple. Such international orientation is a major differentiator in the economy of the day, and not in the publishing and digital industries. Even The New York Times, with impressive global reach, gets only a percent or two of its revenue internationally. In the last year, we’ve seen The Independent (through Press+) selling U.S. access, PBS launching a British channel, and the Guardian relaunching an American foray. Digital media knows no national bounds, but monetizing outside home countries has been difficult. Breaking through this barrier could create significant upside for top publishers.