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?

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.

It looked like just more head-butting among the mammoths of our time: Google will match up with Amazon, said the Wall Street Journal last week: “The Web-search giant is in talks with major retailers and shippers about creating a service that would let consumers shop for goods online and receive their orders within a day for a low fee.”

Most of the stories played on that Goliath vs. Goliath theme, and of course that’s an increasingly familiar one as the businesses of Google, Amazon, Facebook, and Apple overlap, intersect, and collide. Who is a bookseller? Well, Amazon, and Apple, and Google, kind of. Who is selling and renting media — well, who isn’t or preparing to do so? Who is in the hardware biz — all except Facebook? Who’s reaching for the digital ad riches, now generating $80 billion worldwide; Google, the king, and Facebook, the fast-threatening prince.

Yes, the Google/Amazon match-up over delivering goods is a good and real storyline. As big brains butt, it could be thunderous and landscape-changing. That landscape includes the news business, and you can almost feel the rumbles underfoot just with the word of Google’s move.

Let’s look at the newsonomics of Google’s would-be one-day-shipping program — let’s call it Google Tomorrow™© — and its wider impacts and strategic rationale. First, we’re talking about a lot of potential money. U.S. retail e-commerce is forecast to hit almost $200 billion this year, with the global total adding up to $700 billion. So there are many companies trying to get in the middle of it.

The idea of website-facilitated buying — and shipping — from fairly local retailers isn’t a new one by a longshot. Storerunner plied this territory, too early, a decade ago. Webvan, the best funded of the grocery deliverers went from brilliance to punchline in about 30 seconds. Shoprunner is currently out there, pitching the same idea as Google Tomorrow. Newspaper companies have been more steadfast, more the tortoise in the race for perfection of our emerging online/offline commercial world.

Companies like the Gannett-owned ShopLocal and independent Travidia, with its FindnSave product used by McClatchy and other news chains, have been building the know-the-local-retail-inventory, compare-prices-and-buy terrain for years. Unlike what Google may do, they don’t deliver one-click buying and delivery. They offer product selection, availability and then click off to retailer’s own sites for buying and shipping or store pickup. The idea seems like a great one, a merger of the best of online and offline, yet it’s been slow to grow. Every time I’ve checked out the sites, I’ve found the promise smart, but the inventories too uneven or the hierarchy of results skewed to preferred shops — not mypreferences. Consumers have clearly opted for Amazon over these kinds of sites.

The impact on the ShopLocals and FindnSaves is not what should concern newspapers, though. The big issue: retail advertising.

While the web has greatly damaged newspapers’ classifieds and national ad businesses, retail has been a relatively stronger area. Worth about $13 billion last year — or half of daily newspapers’ ad revenue — it’s a lifeline at this point in the tough print-to-digital transition. Retail is being challenged on several fronts, with the Sunday preprint business a big concern. In fact, both Google and newspapers are pursuing e-circulars to counter the inevitable print downturn in that area.

Wait a minute, you may say — that $13 billion is advertising money and Google, like Amazon, wants to make money facilitating actual commerce. But the division between advertising and selling is an old one, fast blurring. Think about where we’ve come from the era of impression-based (newspaper, TV, radio, magazine) ads into the era of pay-per-click, pay-per-lead, pay-per-acquisition, and more.

Retailers don’t want to advertise; they want to sell stuff.

Give them new routes to sell stuff, and deliver it more cheaply than they could before, and they’ll migrate their ad/marketing/lead generation dollars. So if Google can really make it easier to personalize, routinize and make more efficient the selling process, it will place itself between the seller and the buyer. As it does that, it replaces the newspaper as middleman, further reducing much of the revenue that is keeping newsrooms staffed, even if many of them are now half-staffed at best.

Is the replacement of newspaper as advertising-oriented middleman inevitable? Probably, but over a longer term. Since the dawn of the web, people have been chasing the perfection of commerce, and it’s been a tough slog with far more losers than winners. Amazon, of course, is the big winner, but with relatively small profits, a paltry $63 million in the last quarter on sales of $10.8 billion. While Amazon is perfecting commerce, it’s got a long way ago. Since it was born in 1994, four years before Google, it has built a one-of-a-kind business on customer obsession and brilliant analytics. Its recommendations engine is ready for the web hall of fame, and its latest foray with Prime membership (“The newsonomics of Amazon’s prime moves“) shows it knows how to build on its foundation.

Google lacks some of Amazon’s core strengths. It’s a mix-and-match technology company, famously trying lots of things and at times more quickly abandoninglosers. In commerce, Google is moving forward with a spate of moves. Google OnePass is a restyled content buying system, with some prominent publishers signing on. Add in Google Latitude, Google Local, Google Local Shopping, Google Shopper, Google Tags, and Google Places, all relating to local commerce.Google Offers is gaining steam and is working with publishers on syndicating local daily deals.

There’s an irony to such publisher partnerships, of course. On the one hand, Google is a “partner,” magnifying publisher businesses through its ad and search products. On the other, initiatives such as Google Tomorrow are a potential dagger to newspapers’ jugular. That’s the way of the web world. For Google, or Amazon, or Apple, or Facebook, any new initiative it takes on has its own internal logic. Should another industry — say newspapers — be wounded in the process, it’s just collateral damage. Given the size of these digital behemoths, as they decimate legacy industries, you can almost hear them say, “Sorry, did I sideswipe you? I didn’t feel anything.”

If everyone is a frenemy these days, and Google is taking on Amazon, media companies have to ask: Who is the frenemy of my frenemy?

One last point to ponder about Google Tomorrow. Consider it, in part, adefensive move.

If, in fact, selling and advertising are blurring, Google has to move more in the selling direction. Right now, it’s an ad company, pure and simple. About 97 percent of its revenue comes from advertising (and you thought newspapers relied too much on that revenue source). It has brilliantly moved to expand its digital ad dominance (now taking in about 40 percent of the dollars in the U.S.) by merging its paid search foundation with big acquisitions in display advertising and mobile. Just last week, the feds let it buy AdMeld, an ad optimizer — and Google’s 57th acquisition so far this year. Now, the Doubleclick ad management system offers a singular approach, incorporating in one place display, search and mobile, to the delight — and terror — of publishers and others in and around the ad industry.

The dominance is a sight to behold. Yet as digital innovation continues to disrupt everything in its path, the ad business is vulnerable, with companies, led by Amazon trying to eliminate the cost and friction of finding buyers. So let’s look at the Google Tomorrow battle plan as one aimed at Amazon surely, but with ammo that may hit newspapers as well — and one that may allow Google to find that big, elusive second revenue stream.

So what do we make of the three recently announced sales? In each case, there’s a strong, willful buyer, bucking conventional business sense to bull ahead into 2012.

In Omaha, we’ve got Warren Buffett, the man who said just two years ago: “For most newspapers in the United States, we would not buy them at any price. They have the possibility of nearly unending losses. … I do not see anything on the horizon that sees that erosion coming to an end.” Unfortunately, the owner of the Buffalo News, investor in and long-time (now retired) board member of the Washington Post Company, is right. The erosion was deepest — almost 20% in the depth of the recession — but the bleeding in higher single digits has continued since then and it will continue into 2012. The U.S. industry is literally half the size, in revenue, that it was five years ago.

So is the Oracle of Omaha’s vision now blurred? Doubt it.

Buffett is an American hero, generously giving away more than half his fortune through the Gates Foundation and making the common sense point that those Americans who are among our wealthiest can, and should, afford to help out their countrymen in the time of great distress (witness just today’s New York Times’ story on the intense, and long-lasting, pain of permanent unemployment). His company, Berkshire Hathaway, is buying out the employee-owned Omaha World-Herald for $200 million, including debt assumption. Why? Warren Buffett understands the link between news and democracy, especially in his home state of Nebraska, where the paper sets a lot of the agenda with its coverage. You’ve got to believe that the World-Herald’s management, facing the same dismal picture as all metro publishers, looked for the whitest knight around, and turned to Buffett.

In Chicago, a buyout group led by two business leaders,  Michael Ferro Jr.and  John Canning Jr., is in talks to buy the Sun-Times group, which bought the paper out of bankruptcy (alas, Chicago doesn’t win the prize for city with most bankrupt dailies; that goes to L.A., which has had three) two years ago.  The reported price: $11 million plus assumption of debt. Both Ferro and Canning have been deeply involved with the Chicago News Cooperative, former Trib and L.A. Times editor Jim O’Shea’s effort to provide independent, high-quality news in Chicago.

Meanwhile, last week, the San Diego Union-Tribune’s most recent sale (we need flow charts to follow the now-rapid movement of some properties) was announced. Local businessman and developer Doug Manchester are buying the paper, and its underlying real estate, for about $110 million from Platinum Equity (“San Diego’s Union Tribune: Out of the Private Equity Pot and Into Local Political Fire“). John Lynch, the CEO-to-be once the sale closes, wasted no time in laying out the paper’s quasi-journalistic instincts:

“Lynch said he wants the paper to be pro-business. The sports page to be pro-Chargers stadium. And reporters to become stars.

“It’s news information, but it’s also show biz,” Lynch said. “You get people to tune in and read your site or the paper when there’s an ‘Oh wow’ in the paper.”

He wants that sports page to be an advocate for a new football stadium “and call out those who don’t as obstructionists.”

“To my way of thinking,” Lynch said, “that’s a shovel-ready job for thousands…”

“We’d like to be a cheerleader for all that’s good about San Diego,” Lynch said. “Our motivation, both of us, was to do something good for San Diego.”

Expect the newest U-T to support the new owner’s business and (conservative) political interests, and do so with relative national impunity. When Sam Zell talked about bringing some pizzaz to the Tribune, he won lots of coverage. But that was the Tribune, with a half-dozen substantial metros. This is San Diego, though the second-largest city in our largest state, off in a corner of the country far away from media watchers.

Reporters with whom I’ve talked rightly ask if these three deals in the making are a trend. Yes, of sorts, we’d have to say.

First, let’s consider how little money is changing hands in these deals. We could say that Warren Buffett’s $200 million offer is generous; that’s almost twice what the San Diego quasi-monopoly daily is selling for. If someone had told you 10 years ago that the World-Herald would sell for twice the Union-Tribune, you would have laughed them out of the room. U-T owner Helen Copley was courted by the royalty of Old Guard ownership, from Knight-Ridder and Tribune among others, letting her know they were ready to open their wallets to the tune of well over $500 million when the will to sell struck her. It never did and when she died, her family sold, to pay taxes and in panic, in the depth of the recession to Platinum Equity, which swooped in and is now making some decent profit ($80 million+) on the deal.

Important to the trend/no-trend question is price. These are fire-sale prices, mere pocket change to the 1%. So for reasons of altruism, preserving local voice and journalism or bolstering one’s own personal or business agenda, the price is right.

Given that, will we see more sales to motivated, individual (yes, we know Berkshire Hathaway bought the World Herald, not Buffett, but we also know who made the decision) buyers? Probably.

If and when the squabbling Tribune debtholders and bondholders ever release the hostage company out of bankruptcy, several Tribune cities have would-be owners queued up, if management wants to sell. When will the new Digital First get its properties in sufficient financial order, so that owner Alden Global Capital can begin to make its exit? At what point do companies like Gannett, Gatehouse and CNHI start to let it be known that individual properties may be bought? That’s an unknowable question at this point, but with ad revenue headed further down next year, selling something to somebody — it is appears there are buyers here and there — becomes a more intriguing option.

Interestingly, we’ve heard little from would-be “community trust” buyer groups. There was much talk of community-oriented, non-profits, with some support from the Newspaper Guild, a couple of years ago. Maybe, it’s fatigue, felt by everyone in and around the business, save apparently a few bright-eyed businessmen. In the tumult of the last two years, the voices have gotten quiet. The intriguing start-up models of MinnPost, Texas Tribune, Voice of San Diego, CNC and Bay Citizen don’t seem to have ignited a wildfire of imitation across the country. Only AOL — with HuffPost city sites announcing rapidly and Patch outposts in place — seems to making a substantial local play.

It’s an odd environment out there, with all kinds of characters still to come out of the woodwork.

The San Diego Union-Tribune moves back to private ownership, after Platinum Equity swooped in during a seeming bottom of newspaper recession — 2009 — and turned its $35 million investment into a sale for $110 million. Nice cash pick-up for Platinum, a classic vulture move, sprucing up the carcass turned loose finally — and way too late by the Copley family.

Now $110 million isn’t a lot of money for what was once one of the most coveted newspaper properties, one that could have fetched ten times that if the Copleys timed their sale better. And the seeming tripling of “value” in two years has left a lot of people confused about what newspaper properties may be worth today.

My sense: The supposed tripling only tells that the Copleys panicked in selling so low two years ago, or that the details of the real-estate-influenced deal are obscuring actual news to news value. Whatever, here’s what we know about the deal:

• The Union-Tribune, like all other metro dailies, is seeing an interrupted trail of print advertising woes. I’ve written recently how most metro forecasts put print ads down another 5-12% in 2012. That means the Union-Tribune, like all other metros, is now taking in less print ad revenue than it was when it was sold two years ago.
• Any current or future profitability scenarios have got to be based more on increased cost control than ad revenue increase. The Union-Tribune deserves some credit for being a leader  in Groupon-like local deals, having created a highly successful program, th0ugh, digital ad increases — while a long-term solution — are still an inadequate band-aid for print losses. Fact of life: The only way to maintain 2011 profitability for the Union-Tribune’s new owners will be to continue to cut expenses, including people, or subsidize shortfalls.
• Private equity’s endgame — and think Alden Global Capital’s growing Digital First play — is to get out. Whether it’s real makeover (the Journal Register Company) or lipstick on a pig, the idea is to get local news enterprises into such a state where someone will pay top (of the moment) dollar, and move on. (And now, it’s an odd moment of loss, as some San Diego community members lament the mild progress Platinum has brought to some of the UT’s journalism.) Platinum has now moved on; when will Alden? Last week, I mentioned a vision of local (Digital First-run) newspaper editor who talked about the potential of the community reclaiming its newspaper:

“If Alden [invested strongly in his company as it is in a number of chains] ever wants to sell, I think I can put together a group of 40 families willing to step and invest. They wouldn’t do it to make a big profit, though maybe they could make some, but they’d do it maintain a community voice.”

A family-owned (or families-owned) newspaper future? Back to a future?

Our editor can keep his model safely tucked in his desk drawer for now. We need several things to happen to test the idea: (a) willing sellers; (b) models of community investment and ownership, which could be adapted from other enterprises; (c) a taste of Silicon Valley fervor”.

In fact, the world, as we now know it, intrudes. In the Union-Tribune’s case, it’s Doug Manchester, a strong right-wing advocate and major land developer who is buying the paper. That’s the sense it makes. As the silliness of our current politics distracts America, as a nation and in too many communities, from the common work of building our future, this silliness can well infect daily newspapers. Will Manchester honor long-held separations between impartial news reporting and opinion?

Don’t hold your breath. Manchester’s new CEO-to-be  John Lynch, sounded something Sam Zell — with conservative, pro-development, anti-tax and anti-gay rights positions added – in talking about the coming sale, as quoted in the Voice of San Diego (and that’s a fledgling institution whose importance now grows):

“Lynch said he wants the paper to be pro-business. The sports page to be pro-Chargers stadium. And reporters to become stars.

“It’s news information, but it’s also show biz,” Lynch said. “You get people to tune in and read your site or the paper when there’s an ‘Oh wow’ in the paper.”

He wants that sports page to be an advocate for a new football stadium “and call out those who don’t as obstructionists.”

“To my way of thinking,” Lynch said, “that’s a shovel-ready job for thousands.”

More changes will be evident after the deal closes between Nov. 30 and Dec. 15. Lynch said they want a stronger editorial page and to attract younger readers. Lynch hopes to bring other media into the building. He wants to be a newspaper industry precedent-setter.

“You change now or you die,” Lynch said…

“We’d like to be a cheerleader for all that’s good about San Diego,” Lynch said. “Our motivation, both of us, was to do something good for San Diego.”

We can see where this is going. The ideologically inclined see the bully pulpit value of these declining economic assets — assets still owning significant community sway and agenda-setting abilities — and pick them up. Traditional journalistic standards are simply collateral damage in a world of too much change. Who knows the difference; same masthead, right?

It’s a lot easier for a single, monied advocate, regardless of political stripe, to buy a cheap property than it is to put together a group of 40 to reclaim it for a “community.”

In San Diego, we’ve moved from an old-fogy, often clueless, newspaper family (the Copleys) to on-so-private equity and now onto more overtly political ownership. The saga of dailies is taking some odd turns, and I fear this is a new chapter we will soon see written in other cities.

Membership ain’t what it used to be.

Two years ago, I signed up for Amazon’s Prime program. $79 a year for unlimited two-day shipping. It was a tailor-made program for someone like me who bought everything from printer paper to lawnmowers online. (Really — a nifty all-electric model, delivered to within three feet of my door, requiring just two bolts to be attached before it was ready to roll.)

Some financial analysts decried the program, limiting themselves, as they often do, to the math. And the math said Prime could be a losing proposition, with customers costing Amazon more in shipping costs than the $79 they paid. It was short-sighted. Amazon CEO Jeff Bezos was, and is, all about building market share.

As a consumer and a media analyst, I understood immediately what Bezos was up to: make it easy for me to buy, save me some money on shipping, deliver my stuff quickly (whether I needed quickly or not) — and I’d buy more stuff from Amazon. It’s worked.

As Amazon expands Prime, and rolls out Kindle Fire, it’s time we looked at the Prime moves as a quasi-subscription product, something news and magazine companies know a lot about it. Let’s take a quick look at the relative newsonomics of what Amazon is up to, and how it compares to the business publishers know well.

For Amazon, giving me “free” shipping for a capped annual price is certainly about volume of sales. Estimates are that Prime members — about 10 million in total — up about 40 percent of Amazon’s U.S. sales, each member buying around $1,500 worth of stuff a year.

These are core customers, the same sort of core customers that is driving digital subscription sales for newspapers and magazines. We were either already core when we saw the Prime offer or became core because of it. Simply, Prime is all about relationship. In fact, “free two-day shipping” turned out to be — was it Bezos’ plan from the beginning, or a happy stumble? — a backdoor to relationship building.

Bezos took a retail business without much loyalty and is turning it into a loyalty business.

Then, in February, Amazon extended Prime benefits to free instant streaming of videos, as its on-demand service (13,000 movies so far) got off the ground. Then, two weeks ago, it announced a “free” book lending service (5,000 books so far) for Prime members. These are just fledgling steps in turning Prime customers into media-swilling Amazon members. It’s an old-fashioned, co-op-like membership meme, offered from one of the world’s great progenitors of digital age capitalism. (Here’s a good Prime primer by Brad Tuttle at Time’s Moneyland, and here’s a good rundown on the business end from the Journal’s Stu Woo.)

Consider these numbers offered up by Piper Jaffray analyst Gene Munster in the Journal story:

• Amazon currently incurs about $90 a year in cost for each Prime customer, losing $11 annually per subscriber, off its $79 single price point. (The more you buy, the more you save!)
• Of the $90, $55 is due to shipping costs and $35 is driven by acquiring digital video content. Now, related book-lending services costs will be added, driving up the loss for this leader.

So investors were a tad concerned recently when this trajectory of cost reduced Amazon’s overall operating margin shrank to 0.7 percent in the third quarter from 3.5 percent a year earlier.

Munster smartly juxtaposes the increased loyalty and sales volume against that loss — or against that investment.

Now let’s turn the news and magazine industry, and ask a few questions:

• What’s the difference between a shipping fee and a subscription? They seem quite different historically, but Amazon is building a bridge between the two.
• What’s the difference between a buyer and a reader? Shopping and reading always coexisted in newspapers and magazines; Amazon just offers a new twist here, starting with buying and then moving to reading.
• What’s the difference between a newspaper subscription and a membership that gets you “free” media? Amazon pushes us back into the mindset that soft goods — digital books, digital music, digital movies — are worth less than hard stuff that it ships us, the office supplies and lawnmowers. That’s a bit depressing. Wouldn’t it be a wonderful world in which the soft stuff that provides enjoyment, entertainment and learning were more the real value, and garden and office tools the freebies?

In the world as it is, though, news and entertainment media are countering with the All-Access value model. Take all our content — and be excited about all the ways we now bring it to you. Netflix, Comcast, HBO, The New York Times, and the Wall Street Journal are selling convenience, immediate gratification, and mobility — all great if often short-sighted American virtues. “Sell the sizzle, not the steak” is as good a Mad Men tenet of faith as any.

“Smart is the new sexy,” the Newspaper Association of America’s most recent effort to reassert the value of news media, probably misses the sizzle we’re seeing offered by others. Everyone knows it’s easier to buy a smart pair of eyeglasses to achieve the sexy look than read a paper (or site) every day.

A few more things for news and magazine media to think about here:

• Newspapers have been rightly concerned about losing a direct customer relationship as digital subscribers become Apple or Amazon customers rather their own. The Prime move sheds new light on this question: If the world’s premier online seller becomes a media hub, the question of who owns the customer gets even bigger. It’s a growing Goliath vs. a shrinking David here; Amazon just will continue to add more and more media (and other goods and services) to its Prime membership base.
• Amazon’s 10 million Prime members compares well against individual media. Among U.S. newspapers, the Wall Street Journal leads with about million sales. AARP puts its magazine number at 22 million — a number boosted by a model framed around membership — while Meredith’s Better Home and Gardens comes in at 7 million. Maybe more apt “media” comparisons may be Netflix at 22 million or ATT Wireless’ more than 100 million. The key questions here: What is membership, what is subscription and what is media?
• This is about much more than a $79 offer; it’s about deep and building customer knowledge. Amazon’s “Recommendations” have long been talked about, but its mastery of customer analytics is the big story here. That’s what any competitor to Amazon must contend with. It’s noteworthy that companies as small as The Day in Connecticut  (“The Newsonomics of 100% Reach“) and as global as the Financial Times (“The Newsonomics of the FT as an Internet Retailer“) ) are taking similar analytics-driven approaches to their businesses. If you are in the media business and behind on the analytics curve, Prime is a new caution in how your franchise could crumble in the age of Big, Actionable Data.
• So what are news and magazine companies’ propositions here? Is All-Access to the news or magazine titles just a foundation? If Amazon, a former hard book seller, can reinvent itself as a media company, which media might become wider media centers, essentially re-selling the movies, music and books streamed by others (including Amazon)? If this is about customer relationship, it’s probably either an upward or downward spiral. Keep the customers you have by offering them more, or risk losing those primary relationships to others (Kindle Newsstand, Apple Newsstand, plus, plus, plus). That’s a sobering, but likely, scenario.

Those Pew research numbers — 11 percent of U.S. adults owning a tablet, tablet news-reading numbers off the charts — make everybody even hungrier.

Yahoo is the latest to try to get in on the growing banquet of reading riches, with its long-awaited Livestand tablet news product launch Wednesday. It joins the summer-launched AOL Editions news aggregator and sets up the next one to join the dinner party, Google Propeller.

It will take awhile to plumb around Livestand and figure out what’s what, what’s where, who’s in the product and who’s not. And yes, it earns the sobriquet of would-be Flipboard-killer, with a lot “less” — less busyness (which some readers will like), less elegance, less apparent news variety and fewer flips — than the market leader.

As a tablet news aggregation product from the No. 2 U.S. web property, it demands to be taken seriously. In addition, we’ve got to place it into some kind of context among Flipboard, Pulse, Ongo, Editions, and coming Google products, as well as the dominant single-brand news sites that have enjoyed fledgling tablet success.

With the launch of Livestand, we see the beginning of Aggregator Wars 2.0, to be fought on a tablet near you.

Livestand pushes the question: How are we going to receive news and features via the tablet, through individual apps (paid or free) or through an aggregator? And how are publishers going to monetize their content and audiences, as those audiences move dramatically from newspaper, magazine and broadcast to the tablet? A Pew data point: “A majority, say the tablet takes the place of what they used to get from a print newspaper or magazine (59 percent) or as a substitute for television news (57 percent).” (See “The Newsonomics of the Missing Link,”)  So let’s look at the Newsonomics of Livestand.

We start with this proposition: The app world Steve Jobs bequeathed us broke the old web paradigm. Where most news sites have seen no more than 35 percent of their traffic coming direct (the majority coming from Google, Facebook, Twitter, and the rest of the sideways web), apps reasserted singular brand access. The Digital Dozen — the leading global and national news brands — quickly took Apple’s early invitation and have building out news products ever since. They love the fact that readers come directly to them; those that are charging for digital access find tablets (and smartphones) tailor-made for single-brand, All-Access subscription plans.

On the other hand, the Livestand proposition says: You want more, and we’ll provide it. That aggregator’s creed has been enormously successful on the web — five aggregators take in 67.7 percent of the U.S.’s digital ad revenue — and they’d like extend that winning formula to the tablet. Alas, the tablet is not the same as desktop or laptop web (or the smartphone), so how easy or hard will the aggregators’ extension attempt be? Here’s what I’ll be watching for as the tablet aggregators go forth:

How high — or low — will the walls go?

These early tablet aggregators are walled gardens, to borrow a portal metaphor from the pre-Google web. Yahoo says it has assembled about 100 content sources (it’s unclear if that number includes Yahoo-owned brands) that provide whole content for the company to host within its HTML5-driven app. They range from Consumer Reports and Forbes to Scientific American, the NFL, and Surfer, a magazine that may have benefited most from the launch PR. For national and global news, you’ve got AP, Reuters, and Yahoo’s new top partner, ABC, along with a few others. There are some link-offs, but not too many, with the product strongly advantaging Yahoo’s own content and that of its third-party partners. Of course, Yahoo is a significant content producers, given the hundreds of content creators it employs, and sports a mind-boggling array of sites.

Flipboard, too, is a walled garden, but looks to have — it’s hard to measure — more wildflowers among its partners. That $60 million venture startup now has 50 content partners, with more diverse global/national news (The Economist, USA Today, The Guardian, BBC, The Daily Beast, and lots more) than Livestand, and seems to offer more links to non-partners as well. For instance, News Corp.’s All Things D (a free site) is a partner, with full content on Flipboard. The Wall Street Journal (a mostly paid site), which is not a partner, can still be found if you troll through the business section. Flipboard, of course, can lay claim to another overused portal metaphor of the ’90s: “We’re Switzerland.” That’s true to an extent; it doesn’t create its own content, and says it can therefore better aim at just pleasing readers. Yet, it, too, must find a business model to survive.

Right now, Flipboard looks stronger in news, with a good set of feature content. Yahoo looks like it covers the major bases in news — through wires and ABC — and is heavier on feature sites.

Raise the content wall, and you can provide a more, whole (no need to link off) experience, with better benefits to key partners, but create a more limited experience for readers. Lower the wall and provide more content, and you will need to link off more and have a harder time showcasing partners and building a business model.

Who will figure out the ad model?

Tablet aggregator news products are, by their nature, dependent on advertising to be successful. Livestand enjoys the advantage of being part of Yahoo, with the country’s second-highest levels of digital ad revenue, though its sales are in decline. Just this week, it bought ad-matching company Interclick for $270 million to bolster its arsenal. In addition to display, one big hope with Livestand is video ads, a significant growth sector. It seems to have launched with fairly little ad support, a surprise for a product long-planned and backed by Yahoo. Flipboard, too, is hoping to break the code, or more precisely, to have its content partners do it. Surprisingly, though, only about a half dozen of its 50 content partners are actively selling ads on the site. Yes, tablet advertising is fetching ad rates 5-10x higher than online ads at single-branded sites, but they are a work-in-progress at Flipboard, despite the interstitial beauty of the ads. Publishers says they need more audience volume before they start selling in earnest. That points to an early challenge: Publishers may enjoy the relative non-competitiveness of Flipboard, as compared to Yahoo, but they see Flipboard as an experiment, one to help gather data on reader usage — and maybe a long-term revenue play.

In the end, publishers’ direct participation in these products — and they are being cautious now — will directly depend on how well they can monetize their audiences on aggregator sites compared to on their own sites. Their analytics are much better now than they were five years ago. They’re experimenting with Facebook sites and Apple’s Newsstand and seeing if the new Kindle catches Fire. If aggregator-related ad revenue is good, they’ll play. If not, the aggregators will be left with uneven, feature content, or their products will be composed of a lot of link-offs — not an experience that makes use of what the tablet does best.

Where’s local?

Yahoo is quite strong in local news aggregation, given its five-year-old partnership with more than half the industry through the Newspaper Consortium. It has pitched partners on joining Livestand — I’ve heard of one near-comic presentation that turned off newspaper publishers — but I don’t see much local in the product. That’s probably due to publisher wariness — why cede audience to aggregators or to Yahoo’s product development timetable? Local would be a great differentiator for Livestand — especially given its deeper relationships with newspaper companies. It could also be valuable whenever AOL’s Editions patches its local Patchs into its mix. An aggregation that reaches from global to local makes reader sense; who will deliver it?

Ironically, local should be a green field for the tablet news aggregators. While the big national and global news sites have established powerful app platforms, most local news publishers are way behind the curve, and falling farther behind every day. Yes, sites from The San Francisco Chronicle to The Dallas Morning News to the Memphis Commercial Appeal to The Boston Globe have put up live (non-replica or replica-plus) tablet sites, but they are in the minority. By the count of the Newspaper Association of America, there are only 87 U.S. daily newspaper apps in the iTunes store, and many of those are replicas.

If aggregators can aggregate local on the tablet faster than local publishers claim their own tablet turf, they’ll be a long way down the road in the battle for local digital ad dollars, a battle coming to the tablet in 2013.

Who will provide the best routes to digital subscriptions?

With more than 150 news titles and dozens of consumer magazine titles going digital-paid, figuring out the link between free aggregated content and paid, full digital access is a must. If the aggregators can feed the paid digital access business, publishers are more likely to buy in and provide more content. Flipboard’s Economist partnership, with its lead-out to Economist products, services, and games, is the model to watch. Could aggregators work with publishers to jointly authenticate paid customers? Sure, they could, but it’s a significant tech challenge.

Where does Ongo fit in this?

It’s easy to forget Ongo, which seems to have gotten little traction in the popular mind, or in audience or revenue. A consortium put together by Gannett, The New York Times Co., and The Washington Post Co., it suffers from at least two on-the-surface issues. Number one: It charges $5.99 a month for some subset of news company content, with upcharges from 99 cents to $9.99 for each local title, many of which don’t even have digital paywalls of their own. Number two: While it’s improved its poor launch design, it’s still nowhere as flippin’ cool as either Flipboard, Pulse, or Livestand.

Who or what are our gatekeepers?

So how do these companies decide what to show us? That’s a fundamental question we don’t have to answer when we open up The New York Times, Financial Times, or BBC. We know editors have used their judgment to decide what to include and how to play it. On the tablet, especially, it’s a witch’s algorithmic brew of editorial, business, and social curation. Business considerations — what do we own? — color Livestand and AOL’s Editions. There’s some traditional editorial curation going on at all the aggregator sites, but it’s hard to see or navigate. What’s being picked by editors, driven by business deals or by our social graph, when we sign in with Facebook or add our Twitter list to filter the news? We don’t know at this point, and we don’t have handy levers to adjust the mix.

The wizard behind the curtain appears to be in charge of our news experience. That’s both pleasing and anxiety-making: Am I missing something? Just how did this page get in front of me? Those questions will color the single brand vs. aggregator experience on the tablet. I may be willing to trade single-brand certainty of news judgment for some aggregating algorithm, or I may not. Down the line, we’ll end up with much more knowable and personalizable systems that let us harness both editorial and social intelligence, but we’re not there yet.

Will Livestand work? I think the answer is that it will take all of 2012, at least, for news consumers to sort out the competition. The big issue Yahoo faces is habit. It would love to translate the Yahoo News web habit to the tablet, but it’s clearly not a one-to-one transfer, as Google News will find. As The Daily (80,000 paid circ or so) has found, it’s really hard to change or establish new reading habits. There, incumbents like the Times, Journal, the BBC and Guardian have built strong one-click news habits, verified by the Pew study that found that “90% of app users went directly to the app of a specific news organization, compared with 36% that went to some sort of aggregator app like Pulse.” Those early habits will get harder and harder to displace. My guess: We’ll each pick a single news aggregator to complement our top two to three top single brand choices. Those will be the buttons, the apps, on the first page of our iPads — and the second page won’t matter much.