Innovation

At first glance, the question of whether professors and journalists are in the same business seems almost absurd, doesn’t it? We know what a college is, and we know what a newspaper is. One’s got ivy-covered walls, demands on-site instruction, costs tens of thousands of dollars a year, and grants certificates of completion, or degrees. The other is a physical, throwaway product that until lately cost a quarter a day and now can go at the top end — in print — for $650 a year. No prizes are awarded for reading daily — or for 50 years.

Online, though, these historic differences seem to fade rather quickly. We read to learn, whether it’s a course on European history or the latest twists and turns of current European economic drama. Greek tragedies of two different era. We read to understand and make sense of things.

Let’s start with this basic principle: People won’t pay you for content if you don’t ask them to. That’s an inside-the-industry joke, but one with too much reality to sustain much laughter. It took the industry a long time to start testing offers and price points, as The Wall Street Journal and Walter Hussman’s Arkansas Democrat-Gazette provided lone wolf examples.
The corollary to that principle? If you don’t start to charge consumers — Warren Buffett on newspaper pricing: “You shouldn’t be giving away a product that you’re trying to sell.” — then you can’t learn how consumers respond to pricing. Once you start pricing, you can start learning, and adjust.

Content no longer demands to be free. It wants a fee — but how much of one? Consumer pricing is not a core competence of many media companies. For decades, media pricing was on automatic. Newspapers picked a quarter or fifty cents, and then re-programmed the coinboxes. Magazines kept prices low enough to build audiences to reap substantial ad rewards. Book publishers did some minor stratification. Music companies picked a couple of price points, and let the vinyl and CDs fly. In the digital era, though, pricing is confronting — and confounding — media companies. Just what in the digital world of vanishing manufacturing costs is digital media worth? Now with those 20th-century costs — printing, manufacture, distribution, shipping — passing into the night, the question of price, and value, is making itself loudly heard.

Funding the journalism business isn’t like funding Sears and Kodak or other fading institutions. It’s not even about saving a perhaps-vital American industry, like the auto industry.It’s about keeping a lifeline of funding open so that our best reporters can do their jobs.

let’s call it the newsonomics of small things, with a nod to Mr. Jobs and to Meinolf Ellers’ realization. Let’s focus on Small Things as opposed to Big Things — meaning traditional advertising and circulation, the long-in-the-tooth double-digit contributors to newspaper company revenues.

It would be great to replace those-end-of-lifecycle business lines with other Big Things, but those are few and far between. Google developed the Next Big Thing of paid search advertising, and continues to dominate that $40 billion global industry, with 76 percent market share in the Americas and 94 percent in EMEA, according to Covario, an large, independent search marketing agency. AT&T and Verizon replaced their cycle-ending landline business by going Triple Play, adding broadband and cable to their revenue lines. Facebook cornered the market on a little segment called global social connectivity. Newspapers have been searching in vain for two decades for such Big Things and have come up short.

So let’s touch on six Small Things — each now a small egg, at best a single digit contributor to overall revenue. Then let’s toss in a couple of Wild Things, fliers of businesses that might work.

In the hurly-burly of digital content innovation and monetization, it’s hard to figure out what things are, so we try to find apt comparisons. With the new Next Issue digital newsstand, let’s think Netflix or Pandora or Spotify as the closest cousins. Next Issue, the offspring of five prosperous parents (Time Inc., Conde Nast, Hearst, Meredith, and News Corp.), launched last night what I think will be a model-changing product for publishers. In short, the Next Issue kiosk idea is transformative — though we’ll have to see how quickly customers take to its unknown brand.

The 100-product-a-year model is a much-needed growth model. We can see how it fits nicely with all-access subscriptions, and together we have two interconnected Lego blocks of a new sustainable news model. We have two essential parts of a crossover model (“The Newsonomics of Crossover”) that I detailed here a few weeks ago. The big, hairy challenges of accelerating print ad loss and onerous legacy costs remain, but at least we’ve got a couple of building blocks we didn’t have two years ago.

Why do it? Why trade in the sleepiness of California’s capital city (Sacramento is McClatchy’s headquarters) for the bright lights of Broadway, a long walk from AP’s NYC offices?

Number one on list may be McClatchy fatigue. Pruitt and his CFO, now-successor Pat Talamantes, have rowed the third-largest U.S. newspaper company oh-so-gingerly around the bankruptcy shoals that have grabbed more than dozen of their peers. They’ve had to make devastating cuts in staff and other expenses along with other companies, but get some points for greater efforts to keep newsroom size and spirit going in the face of that bleak reality. It’s important to note that McClatchy has found no special sauce in transforming itself for the digital age, performing on par, sometimes better, sometimes worse, than its peers. Pruitt is getting this job not on the basis on being a proven transformative player, but on being a known, highly respected news exec who understands the challenges of the times.

The 39-minute Daisey piece did what dozens of previous stories on Foxconn’s massive manufacturing of our Apple (and other) wonders hadn’t accomplished: It captured listeners’ imaginations. Why? Daisey turned our portable pleasures to guilty ones. Then, within two weeks, The New York Times began publishing a series on Apple, China, job creation, and Foxconn. Where Daisey made Americans care anew, the Times did what it does best: It hammered at the Foxconn record, detailing it with exhaustive reporting and all the data it could uncover.

First published at Nieman Journalism Lab We watch a conveyor belt of passing numbers, moving faster and faster. A few stand out and capture our imagination. The passing of print advertising in the U.S. has caught everyone’s attention in the last month (though we saw that passage in the U.K. two years ago). The gap [...]