Daily Newspaper Companies

What percent of print ad loss is made up by digital ad gain? This is the crossover metric driving much of John Paton’s Digital First Media/Journal Register Company strategy. With print advertising down now more than 50 percent in 10 years in the U.S., and even diving more quickly now in some parts of Europe, replacement ad revenue is at the top of the crossover list. In 2011, Journal Register made up about 95 percent of its print ad revenue loss. It intends to hit the crossover mark — making more in digital revenues than it is losing in print revenues — this year.

“Everyone wants us to fast-forward to the end of the movie,” Webster notes. He has a sensible point. Given how each Patch rumor — two sites consolidated here, freelance budgets cut back there — is treated as forensic evidence, Webster is in relatively hardy form. He admits that Patch, with its fast expansion, took too much of a one-size-fits-all approach to site deployment, and was too “cookie cutter.” Some of the changes in budgeting — for instance, devoting some site budgets more to marketing awareness and less to paying stringers — derive from overall understandings of the market; others attempt to learn that needs in West Des Moines are different than in West Orange.

Commercial conversation, especially targeted commercial conversation, is the Internet’s next generation of advertising. The first generation of impression-based web ads has been a low-clicking disaster. These new ads — some better executed than others, of course — insult our intelligence less and provide what we could call a freemium ad experience. We’ll pay you for your time, they whisper, by giving you information or perspective you may find useful, and then you may want to buy something from us. The play goes well beyond the Journal and business/financial products, of course, to cars, real estate, furniture, and health. Of course, any news (or entertainment or social) medium has to offer a ready-for-prime-time tablet experience in order to qualify for such commercial conversation. Those that don’t — or only put up barely interactive, PDF-plus tablet products — won’t fool readers or advertisers

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 next CEO is a big roll of the dice, as the gaming table shrinks. There’s little room for error. Pick the right new leader and the Times has improved its chances for survival; pick wrong and these key years of 2012-2014, as news crosses over into a mainly digital business, will be cited in the obit. AP faces a similar tension as it seeks a successor for long-time CEO Tom Curley. Dow Jones, cushioned by parent News Corp.’s better-lined pockets, too, is finalizing its CEO search. Put them together, and it’s a signal moment for American news media, as three top positions open themselves up to possibility, and imagination, simultaneously.

Takeaways:

It’s 12% of the 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 186 M 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.

Consider how much revenue each of Google, Apple, Facebook, and Amazon earned from outside the U.S in the first three quarters of 2011:

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

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.

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.)

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.