Honk if you still love newsprint enough to pay $700 or more a year for a seven-day print subscription to The New York Times. Of course, you have many other choices.

You can try one of several print/bundled options for considerably less money. Or if you want to be parsimonious, you can get 10 free article views a month, or more if you want to work the social and search on-ramps to NYTimes.com. Maybe you want to be among those who pay Ongo $1.99 a month, and get 20 Times news stories a day, among lots of other news content.

Love the Guardian, and want to follow each tick of the U.K.’s Murdoch saga? If you’re in the U.S., you can subscribe to the lively iPad edition for $13.99 a month — or access it for free via the Safari browser on the tablet. In the U.S., its smartphone app is free, but in the U.K. and Europe, it requires a subscription. Of course, it’s quite successful Facebook app gives you access for free as well, anywhere.

If you’re shopping the Ongo news kiosk, look at wide spectrum of prices individual publishers are charging for access through that product: The Guardian is 99 cents a month, The Christian Science Monitor is $3.99, while the Chicago Tribune is $9.99 and The Boston Globe $14.99.

It’s not just newspaper companies that offer a patchwork of buying (or not buying) choices.

Are you a late-arriving fan of AMC’s series “Breaking Bad”? If you want to catch up and subscribe to Netflix streaming, you’ve got a good deal at the $7.99 a month rate. Cram in the first three seasons’ 37 episodes in a single month (where did that month go?), and you’ll pay just 21.5 cents per show, and anything else you have time to watch is gravy. Ah, but if we want to watch Season 4, which you can’t yet see on Netflix streaming, you have to upgrade to those red envelopes and get Season 4 DVDs — but it’ll cost you another $7.99 a month, and you’ll have to wait until the DVDs are released in June. (Ah, maybe that’s one of the reasons Netflix’s maladroit move to streaming is pushing it to a loss.)

Or you can turn to Amazon VOD and get the episodes for $1.99 each (or $2.99 in HD!), or $25.87 for the season. Or why stream when you own the DVD in a few weeks for $29.99 (or add an extra 10 bucks for added Blu-ray clarity). But wait — I’m an Amazon Prime customer. Can’t I watch it for free? It’s not part of the Prime free streaming offer, but I can watch a whole lot of other stuff as often as I want for nothing. Or maybe I can access “Breaking Bad” through Comcast’s Xfinity $100-a-month plus service. Nah, no deal — “Breaking Bad” isn’t available.

One more try: on the AMC site itself, there’s quite highlights, blogs, and more on the series, but no full episodes.

Let’s add in music.

Take Tristan Prettyman. It’s $9.99 (or 83 cents a song) for her last CD on iTunes. Through my $36 annual ad-free Pandora subscription, I can listen to dozens of her songs, her musical soundalikes, and thousands of other tunes in a year, bringing down the cost to pennies per song. Or there’s Spotify, where her songs are available for either zero, five, or ten bucks a month, depending on what devices I want to use and whether I can stand ads.

Magazines, of course, are offering their own split-screen experiments. The U.S. magazine industry (“The Newsonomics of Next Issue Media’s All-You-Can-Eat Kiosk“) is testing the all-you-can-eat, cross-title buffet, bringing some its titles down to as long as 37 cents a month (if you consumed all 27 “basic” titles) through the kiosk, but $39, or $59, or $79 a year if you buy a single title directly through a publisher.

How much to charge?

It’s a fool’s paradise of pricing out there in the digital world, right now, at least for wily consumers. The Department of Justice’s ebook suit and related settlements only complicate things. Five and ten years ago we were wondering whether people would ever pay for digital media — Newsweek’s Steven Levy took us into the terra incognita in “Meet the Napster Generation” back in 2000. But now the question isn’t whether people, young and old, will pay — it’s how the hell to figure out how much to charge them throughout what we politely like to call our multi-platform world.

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.

We can certainly identify the wrong-headedness of the Department of Justice’s price-fixing suit against book publishers and/or point out how the DOJ had little choice in pursuing the case, neither of which is a surprise. The law has struggled unsuccessfully to keep up with business changes wrought by the Internet, from fair use to antitrust to media monopoly. Oft-earnest American regulators find themselves falling farther and farther behind, trying to track technology’s dominating nature and make new sense of it. Often, European Union regulators take a more forthright stab but end up retreating.

Create a new legal framework that better balances producers, distributors, and consumers? Forget about that in this age of politics where stalemate and status quo is the order of the day.

Publishers of all media are on their own, then, and they’d better make sense of pricing. It’s core to their survival and future sustainability. Sure, the Amazons of the world will try to monopolize book pricing, returning closer to its pre-”agency pricing” market share of 90 percent from its current paltry 60 percent. Yet, publishers — especially of news and feature media, news organizations and “magazine media” — have many pricing plays to try as customers discover content near and far from traditional outlets.

The magic of a good price point

I’ll call this the newsonomics of 99-cent media because that’s the world into which we have moved. Today let’s look at that 99-cent model, and next week we’ll delve into the early lessons that pricing’s practitioners have stumbled across as they’ve moved into paid content.

At first, it looks like a tyranny of 99-cent pricing (or the parallel expected tyranny of $9.99 Amazon book pricing). Will 99-cent pricing cause brand damage? Will it last? If the U.S. follows Canada and forsakes the penny, then the 99 cent pricing may fall into history. For now, though, it’s got a certain consumer magic.

“Ninety-nine-cent introductory offers have done wonders for take rates,” says applied economist Matt Lindsay, president of Mather Economics. His company has worked with more than 200 titles — about 75 percent of them newspapers — on pricing and related strategic issues. Take a look across media pricing, from The New York Times to Hulu Plus, and 99 cents (or its derivatives of $1.99 to $7.99 to $9.99) are everywhere.

Take rate is simple: What percentage of customers click yes — and provide precious credit card data — when confronted with an offer. Offer readers the ability to start a “trial” for 99 cents, and you’ll see results two to three times any other number, says Lindsey. At 99 cents, readers “take that as a signal. They understand that you want them to adopt this product. By setting the full price at a high number, you are basically saying, ‘This is the true value of the product.’”

Steve Jobs understood signaling in a parallel way. As Chris Anderson described well in Wired last November (“The Magic of 99 Cents”), one of Jobs’ great successes with iTunes and the iPod was that 99-cent pricing for songs. He could get the hardware and software right, but in the not-quite-post-piracy age, 99 cents was the third leg of the value equation. It worked as a signal: somewhere in between free and too much.

Start with 99 cents and you can conquer the world. As they set off on that quest, what are some of the pricing guideposts for publishers?

• 99 cents is a beginning and not an end. For newspapers used to being paid $200 or $400 a year, 99 cents seems like a declaration of cheapness. Put some round 0s on pricing; it just seems more honest. The oft-cited example of Louis CK’s $5 video is a case in point. Five bucks says authenticity. Yet media that answer thousands of reader questions every day aren’t comedians. Just because you set an intro price of 99 cents, the down-the-road price sends thatother important signal to value. Ultimately, says Lindsay, it’s true that “people take price as a signal to quality.”
• If you have lots more to sell, then 99 cents isn’t a price, it’s a price of admission. Responding to my recent column about ”small things” adding up, Rob Pegoraro asked, on Twitter, how The New York Times’ earnings results related to the notion. “I think NYT 454K dig subs become great market for ‘small things’ like ebooks, events+,” I responded. David Johnson then added, “You pay to be in a market. These business plans resemble theme parks and non-profit fundraising strategies.” That thought fits perfectly here: it’s not about the money, large or small, an even buck or 99 cents — it’s about establishing a new relationship. Or, to use the vernacular, 99 cents is gateway-drug pricing.
• Get ready to sell lots of stuff. So if you are Six Flags, or The New York Times or the L.A. Times, you’d better be able to leverage that new relationship by selling lots of stuff. Maybe not yet 100 products a year, but at least a half dozen to start. Ebooks, of course, fit perfectly here, as add-on products offered to members or subscribers. Sure, use some, as The Boston Globe is doing with Sunday Suppers, to reinforce subscriber/member value. But price others to match potential value. A guide to Boston-area colleges from, who else, the Globe, could be a $19.95 solid seller, given the $100,000-plus parental investment ahead. “Ebook,” though, is much too limited a name to put on it, and sounds like something not current. Wonderfactory founder and creative director David Link made this basic but hugely important point when we talked last week: There really isn’t a fundamental difference between an app and an ebook. “From an agency and a technology’s point of view, it’s only in how you create them. Talking about a recent product Wonderfactory worked on, “You go to the ebookstore, and it’s just text. You go into the app store and it’s got the text with 50 percent app-like sauce.” So, right now, publishers and their creative people are having to create multiple forms, but essentially the same product is both an app and an ebook. The technologies, and the costs, will clarify, as will the marketplaces for all the digital paraphernalia of our lives. The point for publishers selling more stuff is clear though: solve audience needs better than someone else, create products for the devices of the day, and price accordingly.
• It’s not just the content we’re paying for. That’s a tough, tough lesson for literal newsies. As with the music revolution Apple wrought, it was the combination of convenience, ease, presentation, pricing, and wonder that rationalized (for good and bad) the digital music industry. Today’s first batch of digital news subscriptions rely as much on convenience and mobility values as they do on the words and pictures.
• We’re all in the same business. Think of your own media purchases. A little music, more and more video, selective news and magazine subscriptions, increasing numbers of ebooks. Yes, the marketplaces for ebooks and apps, alongside this kiosk and that e-store, are confusing. Media, though, is media, and the pricing schemes are forming in a remarkably similar way across movies, music, newspapers, and magazines. We all like, for instance, the notion of All Access; we’ll pay once and get our stuff everywhere. So news and magazine publishers must look through the assorted lessons of the music and movie industries, those lessons still in much progress. News pricing is not an island.

It’s easy to get cynical about hyperlocal news on the web. People have been working to figure out a scalable model to support it for years. But news-model fatigue shouldn’t be mistaken for permanent failure — it’s just that no one has yet found success.

Community journalism pioneer Steve Buttry, now heading up community engagement at Digital First Media, says he is buoyed by disruptive-change theorist Clayton Christensen’s notion that 90 percent of successful startups start out with the wrong strategy and often take three or four attempts to get it right. That makes some kind of web sense. For those of us trained in the arts of journalism, though, it’s probably a tough lesson: We’re trained to get it right thefirst time.

With that in mind, let’s look into the next round of hyperlocal, the emerging newsonomics around Patch’s aim to become profitable, just as Digital First Media (DFM) dials up its own hyperlocal strategies. Though many newspaper companies are testing hyperlocal strategies, individually or through their chains, Patch and DFM stand out for the scale of their intent. We’ll stick with the term “hyperlocal,” even though it’s a squishy one, because it still best describing the kinds of close-to-where-we-live school news, local sports, police reports, and government coverage we find useful. It may a community of 20,000 or 80,000, but for many of us, it’s less than a whole city.

Let’s start with Patch. Each quarter, as AOL announces its financial results, CEO Tim Armstrong sticks his head in the boxing ring, and lets it get punched around a bit. He took over a newly independent Time Warner spinoff and has been madly transitioning it beyond its sinecure of the old-timey Internet access business.

I won’t debate here his hits and misses, his romancing of Arianna (or was it the other way around?), or the half-life of AOL, given its trajectory and the fact it haslost more than $800 million since its 2009 spinoff.

For the news business, two facts stand out. First, Patch is doing journalism, employing more than 1,000 journalists. Second, it is testing a model that needs testing, however Patch’s history is eventually written.

That model may be getting a rocket boost of revenue, if January’s trends hold up. In an interview last week, Patch President Warren Webster says that January booked ad revenue alone equaled half of all of 2011 ad revenue. If that trend were to continue, we’d be looking quite differently at Patch’s chances of making it into the black before AOL’s investor patience runs out. Just last week, Starboard, an “activist fund,” increased its AOL stake to 5.1 percent, pushing for strategic changes, and Patch is in the middle of its sights.

[Update, 2:52 p.m.: Some added context to the Patch ad revenue increase: The January ad revenue noted above should be noted as bookings for the year as a whole, committed by January. Further, Patch says that, as of today, it now has commitments for more than 75 percent of the total revenue that it recognized in 2011. Those are ads that it has sold and that will run some time in 2012. It recognizes the revenue, like almost all ad sales companies, when ads run. Indeed, January 2012 is up manyfold over January 2011, but in terms of the yearly revenue contribution, it will be relatively small given that January is a light ad month throughout the industry. While it's impossible to extrapolate whole year 2012 revenue, based on the data so far, the sharp turn up in trajectory portends a major boost in ad revenue in 2012 — how large and how sustainable, still to be seen.]

That model may be getting a rocket boost of revenue, if January’s trends hold up. In an interview last week, Patch President Warren Webster says that January ad revenue alone equaled half of all of 2011 ad revenue. If that trend were to continue, we’d be looking quite differently at Patch’s chances of making it into the black before AOL’s investor patience runs out. Just last week, Starboard, an “activist fund,” increased its AOL stake to 5.1 percent, pushing for strategic changes, and Patch is in the middle of its sights.

AOL won’t release specific Patch financials, but we can piece together numbers — Patch CSI — that tell us the story so far. AOL has said publicly that one quarter of its 864 sites are making $2,000 a month or more of revenue. That would also mean that 645 or so of its sites are making less than $2,000 a month in revenue.

On revenue, let’s be generous and say that one-quarter of the Patch sites are making an average of $2,500 per month. That would mean $30,000 a year. So 215 (or one-quarter of the sites) at $30,000 kicks up to $6.45 million annually.

Let’s say that on average the other three quarters of sites are earning an average of $1,500 a month, or $18,000 a year. Multiply that by 645 and we get $11.6 million.

So annual 2011 revenue would come in at about $18 million. That matches up with other extrapolations, guesses, and the like, which put the number around $20 million.

We know that AOL is spending $160 million a year on Patch. So on an operating basis for 2011, total revenue of $18 million would leave Patch with a $144 million operating loss.

But wait. If January was that good, equaling half of the 2011 revenue rate, that would mean Patch took in $9 million in that month. If it could sustain that number all year, it would be up to $108 million in revenue. Yes, its sales cost would increase, so let’s add in another $20 million for those. If all the other costs were constant, 2012 costs would be $180 million. 2012′s revenues would be $108 million.

You could look at that number two ways:

— It would still be losing $82 million a year;

— It would have erased 43 percent of its operating loss in a year.

A Patch half-green, or a Patch half-brown.

On the green end is Patch’s maturing approach to ad sales. For instance, Webster is enthusiastic about its recent initiative to add a third leg of revenue, in addition to national impression-based advertising and largely sponsorship-based local advertising.That third leg is better monetizing of its directories. “In the last two months, we pushed our sales team to push claims.” “Claiming” is getting local merchants to verify their free business listings. Of course, the next step is to get them to advertise and to enhance those lists. “We hit an all-time high recently,” he says. “We got 400 claims in a single day across Patch.” Patch says its claimed-listings rate is up roughly 124 percent over the past six weeks.

The big potential payoff here: Claiming is lead generation, and Patch has found claiming merchants to be 4 to 5 times more likely to advertise once they claim. These enhanced directories offer video profiles, highlighted listings and “owner messages.”

Journalistically, what does Patch have to do to win a race towards profitability, a marathon that will probably last at least three more years? Fundamentally, it needs to fulfill its promise: “Hi there, we’re Patch, your source for local knowledge you can’t live without,” a promise it curiously makes on its overall entry page, but not on its town sites.

If I were giving out grades, I’d give many sites As and Bs for vitality and enthusiasm — and those are good starters in journalism. The better sites do give us a sense of townness, a tribute to the reporters running ragged around their geographies, snapping photos, doing quick interviews, promoting Patch, and more.

In news, they’re in and out — no real competition to good daily newspapers, even with their diminished staffs. They’ll hit on good stories here and then, but can’t be depended upon to do it. I thought that the March 2011 acquisition of Outside.In would lead quickly to better news aggregation from other local news producers — creating a better local news briefing — but so far I see scanty evidence of that.

Blog posts are increasingly numerous — Patch is up to 14,000 active bloggers, Webster says, or 16 per site on average. But they run a wide gamut in quality and readability.

In utility, Patches are hit and miss. Lots of local events can be found — to the gratitude of civic-minded organizers of them — but the presentation isn’t the most user-friendly.

As sources of finding a good new restaurant or a handyman or the best child care in my neighborhood, they fail. The city guide vacuum (“The newsonomics of the Swift Street Courtyard“) — still left in place after the Sidewalks, Digital Cities, Real Cities, and more have come and gone — is a market opening for Patch. Yet its directories are utterly generic, not distinguishing an above-average eatery andJack in the Box (“Whether you’re looking for a quick bite for breakfast, lunch or dinner, or a late-night snack, this Jack in the Box, conveniently located on Ocean Street near Water Street, is ready to serve you 24/7. You’ll find favorites such as cheeseburgers, Sourdough Steak Melts, Chicken Fajita Pitas, shakes and fries, as well as specialties that include a chicken teriyaki bowl, deli trio grilled sandwich and grilled breakfast sandwiches. Salads, tacos and a kids’ menu are also available.”)

That may explain the recent hiring of Rachel Fishman Feddersen, late of Bonnier’s Parenting.com, and an early city-guide staffer, way back in 1995 for New York City’s Metrobeat, which was later bought by CitySearch. A feature pro and a mom in Montclair (once the hyperlocal capital of the country, when Patch, Baristanet, and NYT’s The Local competed there, and now still deeply competitive even after the Times pulled out), she’s into her second week on the job. She told me that her job as chief content officer will range from “the unsexy stuff” — things like page load times, better SEO, newsletter-sending time — to showcasing Patch best practices to coming up with winning editorial features.

Patch is also experimenting with new more visually interesting designs in a couple of dozen markets. Webster acknowledges that the directories in particular and other parts of the site “are not yet built out.”

What else might AOL and Patch do to close the profit gap faster? It could grow its audience more quickly by better connecting Patch to other relevant parts of AOL. Huffington Post, for example, doesn’t automatically recognize local visitors and give them easy access to a local Patch site. Find the “Local” tab, and you can choose one of HuffPo’s city sites — but there’s no Patch content to be seen. That seems like a no-brainer. Further, a dedicated tablet app (rather than the 2x smartphone product) seems like it should be in place by now.

“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.

That’s only fair, I think. Whether the moves have been right or not, it makes sense to tweak this hyperlocal business and journalism model, and each change shouldn’t be a cause for suspicion. Let’s remember that at the same time Patch may be cutting out freelance dollars here and there, daily newspapers are continuing to remove dozens of full-time jobs.

Further, as Buttry points, it takes time to get things right — though it’s not clear how much time Patch has, given growing competition.

Advertising competition is ubiquitous, with Google, Facebook, and Yahoo all taking new runs at local treasure. Buttry’s Digital First is making moves of its own. The company, which is making itself famous for developing dozens of new local, digital advertising products, is now in a couple of big Patch territories, particularly Connecticut and California, as Digital First digs deeper into MediaNews management in both Northern and Southern California.

People increasingly will compare Patch and Digital First. Says Buttry: “We get a lot of attention because of the geographic overlap, and we have big ownership [Alden Global Capital, in Digital First's case]. But we are transforming whole newsrooms, not setting up one-person shops.” Digital First’s Connecticut Group Editor Matt DeRienzo outlines the coming competition even more directly, pointing to the strengths of his Connecticut test lab in Torrington, a model soon to spread to Oakland and New Haven, with numerous variations elsewhere. He makes three points — ones that all legacy newspaper companies would have to use against insurgents like Patch:

• “A larger staff, and a newsroom structure with reporters who have editors on site leading and counseling them;
• 134 years of history covering the community (and in Torrington, we opened our entire archives for free access to the public, one of the most popular features of the newsroom café);
• A physical gathering place that is built more like a community center than a newsroom (free public meeting space for the Garden Club, Little League board of directors, Young Republicans, etc., classes and workshops for the public, open story meetings, etc.).”

And yet: Digital First, at this reading, has about 1,000 bloggers within its cities, compared to Patch’s 14,000.

Then there’s the overlap question: Aren’t these guys doing the same thing? Well, sorta, kinda. Buttry even says Digital First could reach out to Patch, offering a partnership or aggregation arrangement of some kind, though he hasn’t done that yet. “We should include them in our local networks.”

So it’s not David vs. Goliath, nor David vs. David, nor Goliath vs. Goliath. In fact, these may be two Davids both fighting against the Goliaths of Facebook and Google, which are rapidly gaining digital ad market share on everybody. It’s just another front in the digital wars, one perilously close to our homes.

Important Details: Newsy is an unusual project. It’s a for-profit enterprise, housed at a university. It’s an aggregation product in the largely single-title environment of the tablet.  And it’s a digital product that is tablet first, smartphone second and, the web, a distant third.

Newsy now produces 25 to 30 video stories each day, seven days a week, on an 18-hour cycle. Its stories are unusual. They run two and a half to four minutes in length, anchored by a staffers. Newsy benefits from the its partnership with the UniEssentially, they are summaries of the day’s news, drawing from both video (NBC, CNN, Fox News, BBC and more) and text (newspapers) sources. The sources are prominently featured, in short video clips and paragraphs displayed behind the speaking anchor.

Usage of clips is covered by Fair Use law, just as text aggregators, such as Google, built their businesses, says Spencer.

President Jim Spencer, a veteran of MSNBC and AskJeeves, moved his fledgling operation to Columbia, Mo, home of the University of Missouri, receiving economic development incentives from the City of Columbia (REDI) and substantial tax credits from the Missouri State Department of Economic Development.  Newsy benefits from its partnership with the literally across-the-street University of Missouri, providing hands-on instruction to students and then hiring the cream of each year’s crop. He credits the lower-cost location and enthusiasm of the student/University community with helping to rapid growing the business.

“They [the students] intrinsically get it,” Spencer told Outsell, talking about their grasping of the new product form. “They’ll stay up two days in a row working on an initiative.” On the development path: personalization in various forms, and new Mandarin- and Spanish-language versions.

Key to Newsy’s strategy is the engagement mobile news providers are finding with delivery to the new tablet devices. On its iPad product, Newsy has found that more than 45% of sessions are greater than three minutes in length, with 15% of all sessions being greater than 10 minutes. Shorter sessions are conducted on the iPhone, consistent with most publisher experiences: Newsy is finding users generally spend one to three minutes, and watch fewer videos (2.3 videos “initialized” compared to 3.4 for the iPad user). Median session length on the iPhone app is around 150 seconds, says Spencer. All those numbers compare favorably with industry online usage.

The two-and-a-half-year-old Newsy now employs 18 full-time and 12-15 part-time staffers. It is expanding its advertising presence, using 15-second pre-rolls and bottom of the page banners as  its main business model, with others in the offing.

Implications: Outsell believes the Newsy model in and of itself is of great consequence to news creators. It’s an intriguing tablet native product that manages to grab a hold of much of what makes the new platform such a mind-boggling reader and advertising opportunity.

It’s a plus product, as in: Mobile + Video + Social + Curation, all on the foundation of News. On the tablet, these factors aren’t separate from each other; in fact, the confluence of them is, in part, what gives the tablet platform its game-changing power. It’s not just news publishers, or broadcasters, who can take note. All producers of information can learn lots from taking a look at the Newsy product and business model.

As Spencer notes, it’s the tablet that is the center of his business, because of its unique capabilities; mobile accounts for 70-80% of the traffic. The web, meaning desktop and laptop? “I publish to the the web as the platform of last resort.” That’s a mind-turning idea, and one that legacy companies can think through, tossing print into that “what’s your best platform for this product?” question.

The whole question of aggregation products for the tablet is a work-in-progress. While Google, Yahoo!, AOLand MSN have dominated the online space, the single brand-encouraging interface of the iPad has transformed the picture — for now. We see services such as Flipboard and Pulse out early with curation/aggregation products, but the big guys aren’t yet well represented. At the same time, both newspaper and magazine publishers (think Next Issue Media) are trying to figure out if industry aggregation plays, long discarded for online, may be resuscitated. Newsy, then, gives those companies and industries something to think about, and in its get-it-done, get-into-the-market-cheaply momentum, a model from which to learn.

That’s the dream that the MediaNews’ new made-for-the tablet, TapIn taps into. Potentially – and I cannot emphasize that word too much — it may become a prototypical product for the news industry, pointing a new way out of the hollowing-out landscape into which the news industry has meandered.

TapIn, which launches today (you’ll find it in the iTunes app store as an iPad app), is parent company MediaNews Group’s big play for the iPad, “a better version of Patch,” says MediaNews exec Steve Rossi.

Debuting in the Bay Area (where MediaNews is the largest daily publisher, and recently centralized its Bay Area titles, including the Mercury News, Contra Costa Times and Oakland Tribune, under a single editorial structure), it will launch in Los Angeles later in the summer. In fall, it will take flight in Denver, home of the MediaNews’ flagship Denver Post. It’s a fresh start, in thinking and in content presentation for a traditional newspaper company. It’s the combined brainchild, about nine months in the making of MediaNews digital leaders and of Tackable, a BayArea start-up, whose technology grows out user-generated photo aggregation, intending to become the “Twitter of photos,” according to Luke Stangel, CMO and a co-founder. (Good Q & A with Stangel, at CJR.org)

It’s a $4.99 a month product (after the free trial period, which carries into the summer) — and can be paid for in cash or in points earned through techniques strongly adapted from gaming companies.

When you open up TapIn Bay Area, it greets you pleasantly, colorfully and youthfully; it’s a visual product in three modes tilted toward a younger demographic than read newspapers, or newspaper readers aspirationally who would love to look young and vibrant again.

It’s a product that works on the metaphor of layers.

Browse through “on tap,” and you find photo/video feature stories and galleries.

“Explore” with the Bay Area map, pinching in or out and find the same photo/video features, located by geography.

“Find” maintains the large map, but taps into the potential power of newspaper editorial and commercial databases. Behind this screen is the real power of the interface. Choose from among above-the-map icons for features, deals, events, a business directory, movies, news and “gigs.”  You can open one, several or all of the icons simultaneously leading you to deeper into the product, by your neighborhood or region.

This is not your father’s replica or replica-plus product. Such text-centric replicas, done on the relative cheap by and for news companies are placeholders. They offer up the brand of the newspaper — and its re-purposed print/online content — but they embrace the promise of the tablet. They don’t delight. Delight, of course, is what newspaper city guide products have been after for 15 years. From Digital Cities to Real Cities, from Sidewalk to Zip 2′s Just Go, from the Washington Post’s Local Explorer to Zvents and OutsideIn’s appropriation of Google mapping, we’ve seen all kinds of attempts to both harness event-based information and to present it in useful ways.

What is TapIn? You can see Yelp or Kayak in it more than a newsprint legacy. In fact, my first reading says it works better for city guide/directory/doing stuff than for news itself.

“It’s as much a new media type as the website was for the newspaper. I don’t know how well it will play on the desktop,” says Jeff Herr, vice-president for digital for the California Newspaper Partnership, which publishes 34 dailies and 50 weeklies in the region. MediaNews drives CNP, which includes Gannett and Stephens Media holdings as well. ” We’ve set up a product platform.”

That indeed seems to be the best word for it. I’ve plumbed around the prototype. As with any early product, there are a few head-scratchers and missed linkages, lots of questions of depth and breadth, but overall I can see how the product could become a daily point of usage. That would make it stand out from the first 15 years of newspaper-company websites.

I’ll point to four characteristics of TapIn that distinguish it:

• Tablet native product: Largely, it’s not starting with the website and porting it over, though its news pages look too mercurynews.com for me,  complete with small ads. It’s highly visual, interactive and has, at best, a feel of Flipboard about some of its presentation. Remember all the pub Rupert’s The Daily got, a few months ago. That’s greatly attributable to it being made-for-the-tablet. This is the first, big regional news initiative made for the tablet.
• Commercial platform: TapIn begins to change the marketplace dynamic. Website advertising has been a dud for most local newspaper companies, returning low ad rates on display ads, while offering some ability to “digitize classifieds”; the whole newspaper industry takes in $3 billion annually in digital advertising, compared to the $20 billion+ it has annually lost in print. TapIn’s immediate commercial play can best seen in its deals — GotDailyDeals.com is MediaNews’ Groupon-like play here — giving those deals their own button and making them geo-findable. Its interstitials — in photo/video galleries — offer the kind of tablet immersiveness that advertisers are starting to test. At best, TapIn can support the new regional digital agencies initiatives, undertaken by many local newspaper companies (“The Newsonomics of Eight PerCent Reach,”), from selling SEO to SEM to couponing to display to social. I also talked with Herr about all kinds of e-commerce revenue share possibilities, from movie ticketing to Open Table to StubHub, and he acknowledges the platform is well set up to take advantage of those and many more. Curiously, there are no classifieds in the launch product; the issues of tech integration, there, are numerous.
• The incorporation of game dynamics: For Herr — and increasingly the mantra heard newly throughout the digital news industry — it’s all about engagement. Engagement, we’ve learned, means going well beyond presenting news. So TapIn customers will be able to earn points for everything from commenting on stories to posting photos to reviewing restaurants to sharing TapIn with friends. In fact, the prominent Gigs button — a centerpiece of the Tackable photo product play — allows editors to ask for specific user-gen coverage of community events. As TapIn users engage, they gain points, points that are currency and can be used to pay for the TapIn subscription.
• Syndicatable, networkable platform: In addition to rapidly rolling out the platform through MediaNews, the company is already in talks with a couple of other newspaper chains, about licensing the technology. For companies looking for a next-gen tablet play, it will be attractive — assuming reader and ad results tell an early, good story.

All that said, TapIn has a long way to go to be commercially successful, a point which Jeff Herr, a leading digital innovator, understands.

First, it must port in lots of content. It offers a movies button, but no trailers, ticketing or professional reviews (local or Rottten Tomatoes-aggregated). It has restaurant listings, business directory-like, but no reservation functionality nor built-in reviews. It lacks the utter usefulness of a Yelp, which, especially in the Bay Area, is a bible for local finds, and avoids. Newspapers first thought one of their key competitive advantages was their restaurant and movie reviews, for instance. Having failed to win the local wars with that ammunition, many are now just starting over, fresh, seeking user-gen reviews; my sense remains that combining the two, Pro and Am, still offers the most reader value. Starting “fresh” sounds appealing, but in 2011, the product starts out far behind Yelp, Open Table, Angie’s List, Rotten Tomatoes and many others for reader comment and in utility.

I do think the tablet can spawn a new digital marketplace, quite distinct from the print newspaper, the online newspaper site or the patchwork of Google/Amazon/Yahoo commerce of today. As a location-based commercial center, allowing me to personalize and customize (potentially coming, says Jeff Herr), it holds lots of consumer promise — and of several new revenue streams. Putting a $60 a year price on it will be counterproductive to creating, quickly, that marketplace. (Putting a price on news — the whole digital circulation debate — does make sense to me, but more as a bundled print/digital play.)

Which gets me to my final point, for now, on TapIn: It does work that well, yet, as a news vehicle. Its news mapping is clearly a work in progress. It’s hard to both give a sense of the most important regional news, and let readers zoom in on the dozens of more local stories with relevance to them. The connections so far in place don’t do that well, and I’m not sure the tablet real estate works effectively for a region as large as the Bay Area, with its population of seven million.

News quiz: Which company can claim the largest journalistic workforce in the world?

As you ponder the globe’s premier news organizations — from the Times, the Journal, the Post, and the Guardian, to the BBCs, NBCs, ABCs, and NPRs, to the Bloombergs, AFPs, and APs — you’re getting closer to the right answer.

It’s Reuters, with a stable of more than 2,900 journalists at last count, and still growing. That’s right: No single company now tops 3,000 journalists, though AP, at 2,300 — and Japan’s Yomiuri — are closer to Reuters’ total. Most of the other companies are closer to a third to a half of Reuters’ size.

Reuters — a household name in the U.K., where it was born 160 years ago — is now an emerging force in the U.S. That push is fueled by the 2008 Thomson Reuters merger, by the great disruption of the U.S. news business, by the launch of Reuters America (“Reuters America Claims New Territory: First Stop, Chicago and Tribune”), and by the rapidly moving effort to make over Reuters News itself.

That U.S. initiative, where it fancies itself an insurgent, is ironic, given how big a company of which it’s part. Thomson Reuters took in $13.1 billion last year, only a one percent gain, but showing $1.4 billion in profit. More than 95 percent of that revenue comes from financial, business, and legal clients, who pay top dollar for industry news and analysis that feeds their decision-making. So, with Reuters Media less than 3 percent of TR’s revenue (at $324 million in 2010), the news operation’s own profit pressure is lessened. Unlike The New York Times, for instance, for which the new digital circulation play is practically a bet-the-company move, Reuters Media has the running room to get it right, to innovate with products and to invest in new markets.

Steve Adler, a veteran of BusinessWeek, the Wall Street Journal and American Lawyer, as well as Reuters itself (which he joined in January 2010 as senior vice president and editorial director of the company’s Professional Division), is the first U.S.-based editor-in-chief of Reuters News, taking on that job in February. In rat-a-tat-tat fashion, he’s made a slew of high-level appointments. Those choices tell us a lot about the new direction of Reuters and how it is likely to become much more of a well known brand, both within the trade and in the greater business/consumer reader world.

I talked with Adler this week to get a greater insight into the changing world of Reuters Media. In his mandate and in his vision, we can see powerful newsonomics in motion, that complex play of money and journalism that is reshaping what is written and what’s read.

Adler’s big push is to add stories of context and deeper understanding to its century-old craft of cranking out “fast, accurate, and fair” pieces. “The business itself drives us to do both,” he told me. “It’s also a move against commodification. You want to write the smartest story on the earnings report.”

He’s clear, though, that the move is huge one for a company whose very DNA is in those fast pieces. Reuters’ 2009 acquisition of Breakingviews, commentary on business news, was an early indication of doing both. The shift Adler and team are leading, though, is remodeling the news organization, top to bottom, not just adding on a new window here or there.

While Reuters.com still features vestigial “update 1″ and “update 2″ stories, in recent months it’s begun to showcase in-depth pieces, ranging from “The Hunt for Mladic” to major academic disclosure questions, indications of the intended balance.

His news exec appointments reinforce the notion that Reuters News is intending to step out from its get-it-first, get-it-fast, say-it-in-less-than-900-words legacy. Among those appointments:

• Paul Ingrassia, a former president of Dow Jones Newswires, is the new deputy editor-in-chief, responsible for news content creation;
• Jim Impoco, ex of the New York Times, Conde Nast, Fortune and more, is now executive editor;
• Reginald Chua, former editor-in-chief of The South China Morning Post, is now the data editor, emphasizing the increased emphasis in connecting Thomson Reuters’ deep data assets to its journalism;
• Jim Gaines, former Time Inc. magazine editor, will focus on ethics, standards and innovation;
• Harold Evans, legendary Sunday Times editor, joins as editor-at-large, making a big splash this week in his Henry Kissinger/Jon Huntsman, China-oriented event, which Huntsman chose to announce his presidential run;
• Stuart Karle, former general counsel to The Wall Street Journal, has become the chief operating officer, responsible for all support functions for news;
• Mike Williams, former Page One editor of the Wall Street Journal, is now global enterprise editor;
• Jim Ledbetter, ex of Slate’s the Big Money, CNN Money, and the Industry Standard, has just become op-ed editor, moving from the Reuters.com editorship that he took on last year.

And in the digital operation:

• Chrystia Freeland, ex of the FT, is now editor, Thomson Reuters Digital, focused on showcasing content across the company’s digital news platforms globally;
• Ken Li, a former FT staffer who returned to Reuters last year, moves up to online global editor of Reuters.com, from editor of tech and media. Ryan McCarthy, ex of HuffPo as business editor, becomes Li’s deputy.

That’s just the top of it, as reorganization starts to impact many reporting teams. (Good coverage of the Reuters news changes at TalkingBizNews.com.) Even in an age of much high-talent hiring and raiding, it’s a most impressive list, and represents the diverse lineage that Adler intends to draw on to create the new Reuters.

One big key to Reuters’ news future: the United States. It’s admittedly weak here, in number of clients, in consumer share of mind, and in revenue. In that weakness, we see Reuters’ paradox — why isn’t the world’s largest news organization the clear news leader? — displayed.

Reuters has an American problem. Reuters has an American opportunity.

“We don’t want to be seen as a foreign posting of a global operation,” says Adler. “We want to be more global by being stronger in the U.S.” While global competitors talk about Brazil, Asia, or the Middle East as top growth markets, Reuters says its number one target market news market is the U.S.

That means that the its bullseye is squarely on AP, whose own 2010 revenues were $630 million, a seven percent decline. Reuters America is aimed at breaking apart AP’s historical relationship — a must-have relationship — with U.S. newspapers.

The December 2010 Tribune deal broke that ice, as Tribune cut its AP spending by half, and bought Reuters services. Chris Ahearn, who as president of Reuters Media runs its online business, says Reuters America now has more than a dozen U.S. daily or weekly newspaper clients, with additional tests in the field. Reuters presents itself as the unbundled alternative to the traditional all-you-can-eat wire, as it offers more discrete packages in attempting to take market share from AP. In its unbundling, it’s not alone. Change agent John Paton, CEO of Journal Register, has also been peeling back his wire buys, signing a business news deal with TheStreet.com, and is in the midst of signing similar deals in other topical areas (“The Newsonomics of the New News Cost Pyramid.”)

Reuters has added some reporting resources in the U.S., but won’t specify how much. My sense is that the new staff commitment has been minimal and still pales against AP — but that it will grow under Adler. The company has made a point of adding third-party content modules, the latest from the 52-member-strong Investigative News Network (see “INN’s First Big Deal: The Reuters Test“); that’s a smart, cheaper way to offer more content at less cost, a wire twist in the curation era.

Competition is all around, as other companies morph to meet similar challenges. There’s Bloomberg, whose hot breath Reuters can feel as the company aims to eat some of TR’s core business, with the Financial Times and News Corp’s Dow Jones taking more targeted aim, and The Economist, the Times, and AP all competing for differing parts of the business. In each of its verticals, it’s got specific competition, as well. In that big consumer news war, the competition is all the English-language global news competitors, those Digital Dozen companies that only get stronger each year compared to more regionally focused companies. Global news dominance — a new quest sometimes cited — can’t be achieved if it remains a middle-of-the-mind U.S. brand.

To win that consumer battle, Reuters must wrestle with this fundamental question: Who is the reader?

Reuters veterans will tell you the company can be so focused on the B2B market, that it’s hard to make big progress in the B2C market. It’s training to be sure — and Gaines’ appointment there signals strong re-training intent. It’s also culture, and that’s tougher to change.

Journalists at Reuters are now being called upon to balance, and balance differently. There’s the balance between being first, with breaking news — still a core value, especially for key markets served — and the kind of thoughtful, context-rich analysis Adler’s new team is emphasizing. There’s also the balance of serving core professional markets, from by-the-second financial ones to the wider corporate ones, looking for news edges of all kinds, and the broader consumer markets.

Reuters would like to be a big, U.S.-recognized news brand, but it wants to emphasize serving professionals’ news reading habits. That’s a niche within a consumer niche, increasingly cloudy as the business and leisure reading worlds merge, in time and device.

All that balancing and nuance is at least a double challenge. It’s the internal challenge Adler’s execs face in aiming to transform the newsroom. It’s an external challenge, a branding challenge. It’s been tough for Reuters — since its early-web forays into the U.S. in the mid-’90s — to (re-)present itself clearly to its publics. It clearly has the assets of time and money on its side, as it tries to get those balances right, and Adler is clear in noting that’s been a big help in recruiting. Though its challenges are clear, for editors and writers, Reuters seems like a better long-term bet than numerous other news companies.

Don’t expect Reuters to be in the thick of the paid content debate. The company has launched a number of tablet and smartphone products, but Adler is quick to note that getting consumers to pay for digital content is a minor priority; the big payoff for TR is goosing that enterprise business. For a company that grew revenues only one percentage point in 2010, if revitalized news could push sales up just another percentage point overall, that would mean another mean another $130 million annually. Like Bloomberg, it can play a game of takeaway compared to pure play consumer news companies gasping for revenue.

So it’s a game of takeaway and breaking through news noise and reader habit, especially in the U.S.

How will we know how much Reuters is making U.S. headway? Over the next year, and in the run-up to the election, let’s see how much we hear, or see quoted, “as reported by Reuters” or links to Reuters.com. Let’s see how many Twitter links point back to Reuters stories. Let’s see how often we hear Reuters reporters interviewed on NPR or Marketplace. Let’s see how often the Reuters banner appears in the background when cable news brings on subject experts. All those — as much as unique visitor and pageview counts — will tell us how much venerable Reuters is really penetrating American culture.

INN founders talk to each other regularly, by phone, online and at the occasional conference. Yet, they haven’t had a way to easily do things in common, to harness common technology, to do common business deals. A recent deal, executed by the Investigative News Network, promises to bring some order, a model perhaps, out of the motley chaos.

INN’s deal with Reuters is a test, and a significant one for both INN members and Reuters, which will begin distributing an INN-branded product, as an add-on to its wire, by the September meeting of the Online News Association.

“This is about understanding our commercial value,” INN’s CEO, Kevin Davis, told me. “Only the market can tell us how much it values our content.” The idea: piggyback on Reuters’ extensive marketing and sales operation to take high-grade, but  non-traditional branded content to many potential customers, from online-only sites, to newspapers to broadcasters. The payoffs for the 30-plus (of the current 52) INN members that have opted into the deal:

• Revenue, potentially, as Reuters and INN member sites, share licensing revenue;
• Brand awareness of these high-achieving, but nascent brands
• A few services provided by Reuters to those who opt in, proving them with some access to assets they otherwise couldn’t afford.

The deal also pushes INN’s tech abilities ahead. In using the Thomson Reuters-powered Calais, INN is able to draw its diverse content set together, and then subdivide by topics and by regions, at once making the sum of the parts greater than the individual pieces, and more marketable.

Davis says the deal includes full-text from those sites opting in, but that data and video are not included.

For Reuters, it’s a leg up in the agency world, and part of its big U.S. push (see my Thursday Nieman lab column, “The newsonomics of Reuters’ Americanization“). Reuters gets a semi-exclusive, able to exclude a handful of key competitors, including AP, from doing similar syndication. The wire offers no financial guarantees, but offers those three promises to INN members. The big hope: the establishment of  a new syndication leg of revenue, as non-profit funders push for funding diversification.

For Reuters, which in the past year, has put together similar packaging deals with Examiner.com, The Wrap, SB Nation, CCTV and others, it’s a smart way to increase the content offered under its brand, but without the cost. It is learning the chops of next-age curatorial syndication, borrowing lessons from HuffPo, user-gen content and Demand Media.

What would have been an unlikely match several years ago — disparate online start-ups and a 164-year-old traditional news wire — has now taken on a logic of its own.

What’s a story worth?

Last week, I looked at a single investigative story (California Watch’s “On Shaky Ground“), and we saw the tab of half a million dollars for a 20-month-long tale of sleuthing. What about that ordinary daily story, quotidian journalism as we know it — the grinding out of less eventful articles, the kinds of things that keep us informed but don’t offer epiphanies? How much does it cost, and how much does that matter to the future of the news business?

It’s not an academic question. This week, McClatchy added to the long line of down financial reports, telling us that it was down 11 percent, year over year, in ad revenues and 9 percent in overall revenues, for the first quarter. That announcement follows on from similar reports from The New York Times Co., especially its regional properties, and Gannett. The U.S. news industry is extending its unwanted record: 21 straight quarters of revenue down quarter to quarter. That’s a lost half-decade.

Add up those down revenues and the need to maintain profitability — for public or private owners — and there’s but a single answer: cut costs. Certainly, the industry has cut out major costs in the last three years, but cost-cutting is slowing, if you look at the company reports. The New York Times’ costs were flat in the first quarter, Gannett’s down 0.9 percent and McClatchy’s down 6.5 percent. That’s in large part due to rising newsprint prices, making it harder to get costs more appreciably down. With those continuing revenue declines, though, expect more cost-cutting. It’s a given.

First published at Nieman Journalism Lab, on April 28

So, let’s ask about that daily story. What’s it cost?

Of course, we’ve never looked at it that way. We’ve hired people, told them to write, at times monitoring their production, but rarely taking a look at the cost of what they’re producing. Given the pressures of the day, given the Demand Media model and given the predilection to start counting whatever can be counted (“The newsonomics of Washington Post’s reader dashboard 1.0“), story cost accounting is inevitable.

In fact, it’s already started. Let’s take a brief look at what is bound to become a bigger topic in the months ahead, the newsonomics of a single story.

Clark Gilbert, Salt Lake’s dean of disruption, is getting into the nitty-gritty of retooling editorial content production, top to bottom, and that includes getting a handle on differing costs of content. Gilbert is a key part of the team that is transforming the media properties of the daily Deseret News and leading local TV and radio stations KSL, all owned by the Church of Jesus Christ of Latter-day Saints, better known as the Mormon Church. Last August, Gilbert announced one of the most major restructurings in journalism, making major staff cuts — a prelude to the re-architecting now being done. That restructuring includes the launching of Deseret Connect, an initiative to round up pro-am user-generated content from around Utah, and around the globe.

The new CEO of Deseret Media will soon be able to tell you exactly how much articles cost him. He’ll specify the differing price points of local, proprietary content, of AP content, of a blog post written halfway around the world, and lots more.

For now, he draws upon his experience as a Harvard Business School prof and strategic consultant. From that career work, he estimates the following, general cost metrics for the content offered by news companies in print and online:

• $250-$300 per staff-written story;
• $100 per stringer story;
• $25 per Associated Press story;
• $5-12 for “remote” stories, largely written by the emerging class of bloggers

“You better know your cost per story,” he says. “That’s the kind of rigor you need.”

As focused as he is on building digital ad revenues, he makes the point directly: “You have to work both sides [revenue building, cost reduction] of this.”

“It doesn’t mean I’m not willing to pay for content,” says Gilbert. “I’m paying a boatload for stories that are a commitment to my audience.” It’s a straightforward strategy: If you are going to pay a boatload for some stuff, you better pay a lot less for other stuff.

Still, those numbers are bound to chill many a journalist. You think posting reader metrics in newsrooms is still a point of contention — wait ’til story cost accounting becomes mainstream. And it will. It’s just simple manufacturing, and like it or not, that’s what the news business has long been. Manufacturing, with lots (New York Times, Wall Street Journal) of quality added or with (insert your favorite rag here) just enough to draw ads. News creation used to be a sunk cost, with headcount a small and usually polite battle between editors and publishers. That was in stable times. In these times, knowing business drivers, down to the dollar, is going to be part of the new world.

The metrics-driven thinking may have been first demonstrated by Demand Media, with its $10, $25, and $50 stories (“The newsonomics of content arbitrage“), but once opened, that Pandora’s Box won’t be closed.

Clark Gilbert is early in the game, but others are taking a parallel cost-conscious approach.

John Paton, CEO of the new, continuous-revolution Journal Register Company, breaks it down differently, but is highly cost-aware.

“We’re not looking to save money on local, professional content,” Paton told me this week. Notice the emphasis on “local” and “professional.” Like many others, Journal Register is beginning to round up hundreds of local bloggers (as Patch joins that club), who will be largely unpaid.

What Paton emphasizes, though, in his cost-of-content analysis, is the 60 percent of JRC’s content — across print and digital — that is national. He’s done a careful counting of what’s in his products, and says that while 40 percent is local (above average for dailies, he says), 60 percent is national. So Project Thunderdome, newly headed by D.C. veteran Jim Brady, has put a bullseye on that content. The notion: Lower the cost, and where possible, raise the quality of national content. That thinking is behind JRC’s recent deal with TheStreet.com, which is now providing its national business news. It’s a revenue share, with JRC gaining national revenues. In addition, says Paton, it has increased its local business content-related revenue, given both the new inventory of ad impressions made possible and the quality of TheStreet.com content. That’s a model Paton intends to extend to other non-local content.

Further, he’s taken dead aim at the cost of getting content through the mechanics of a newsroom. Saying that about half of U.S. editorial staffs are engaged in producing content for publication — not creating it — he’s focused on changing that ratio. Instead of five of ten journalists engaged in production, he’s aiming for two of ten, to be accomplished through centralization and templating of the production functions. “Then, two or three more of the ten can create content,” he says.

Both plans will, in effect, reduce the cost of content overall. And, as with Clark Gilbert’s philosophy, the intent is to invest in unique, local, proprietary content, even though it’s far more expensive.

Let’s consider one more take on story cost accounting. As CEO of Huffington Post, Betsy Morgan pioneered the unique brand of higher-end, often personality-driven aggregation that distinguished the site’s offerings. Out of that experience, and in her new role as CEO of Glenn Beck’s The Blaze site, she’s evolved her own metrics. They divide nicely into thirds.

• One-third original, professional content, largely reported journalism.
• One-third voice and opinion.
• One-third aggregation, or to use the updated term, “curation,” as editors aggregate, honing off-site story selection given their understanding of their unique audiences.

Morgan tells me that “the thirds” form both an audience strategy and a cost strategy. Clearly, as the venture-backed HuffPo began its life, it watched its dollars very carefully. That meant that curation wasn’t just an audience-pleasing idea, of course, but a cost-saving one, as bloggers (at least then!) willingly forked over content in exchange for play and recognition, not money.

Going forward, the “thirds strategy” offers another twist on Clark Gilbert’s and John Paton’s (and Arianna Huffington’s) strategies. Obviously, you don’t pay for the curation part, other than for the technologies or smaller staff to handle it. You can pay for some of the voice and opinion, but there’s a hell of a lot of it you can get for free or cheap. And, once again, you concentrate your costs of content on the high end — original, professional, largely reported journalism.

The new AOL/HuffPo’s been doing that with pro hire after pro hire. Morgan herself is doing it, as recently as this week with the hiring of former Denver Post columnist David Harsanyi.

Add it all up, and it’s a new cost structure for the craft of journalism. As with all metrics, the good or bad they inspire depends on who is using them. What’s clear is that those news outfits — local, national or global — which only concentrate on paying staff, like in the old days, will find themselves out-strategized by those who take the blended approach.

Is it all about thirds? No, but it’s a good place to start.

I think of it as a pyramid. Original content — content that distinguishes news brands — is at the top, and, yes, is the most costly. At the bottom is clearly aggregation, because as Morgan points out, “[readers] can’t easily find and read what’s of interest to them.” Then, there’s the middle third or so. For regional news companies, that includes hyperlocal bloggers and subject-specific (transportation, public health, sports) experts; for national sites, it’s non-staff “contributors” of differing skills and costs. That third is quite open to innovation.

It’s a great whiteboard exercise, at least, for anyone in the news business. Pass the marker, please, and work the pyramid.

It’s as old as organized humanity itself: the mercado, the bazaar, the marketplace. We love to visit Old World marketplaces as we travel abroad. At home, our own shopping is now a mish-mash of malls, big box stores, neighborhood shops, and online commerce. Amazon, itself, is now a $34 billion business, and its Prime delivery program can deliver just about anything (my favorite buy: an electric mower) right to your door, seeming so local.

We can research almost any purchase. We can compare prices. We can get advice and reviews from hordes we’ll never meet.

Yet it’s far from nirvana. Navigating the byways of web commerce, other than great walled gardens like Amazon, can be frustrating. Numerous culs-de-sac interrupt us. Price-comparison sites like Price Grabber, Google Product Search, Shopzilla, and UK’s Kelkoo only seem to give us a partial view of what’s available. It’s tough to know when reviews may be gamed. Sites like preprint-digitizer Shop Local (“Your Local Weekly Ads, All in One Place”), owned by Gannett, seem curiously backwards, like replica E-Edition newspaper products for reading. Trying to compare model numbers, on sites like CNET or Best Buy, can give us digital nervous breakdowns.

Within the infinity of shopping choice, a lot of us would like some order.

That’s what the new Find n Save product aims to provide, and for the benefit of newspaper companies. Find n Save is the latest effort from newspaper companies to reclaim what they consider to be their birthright, maybe a third generation of such marketplaces following the ShopLocals and the earlier Storerunners.

Find ‘n Save focuses us on a decade-old-plus newspaper company problem.

While the daily newspaper — with its display and classified ads, its Sunday circulars, and its Wednesday food coupon – used to be the leading local marketplace, it now is just part of the pack. One number — print ad revenue halved in 10 years to $24.8 billion in 2009 (no final tally is yet in for 2010, which was still lower in single-digit decline) in the U.S. — gives real meaning to this splintering of commerce.

Digital media, with its search-led research/price comparison abilities and, now, with the new couponing craze, has wrought havoc with the newspaper business model.  All of that digital commerce has been disruptive and disintermediating. Yet there’s been more disintermediation (of traditional publisher/merchant relationships) than remediation.

We turn to lots of digital media to research and shop, but we have few go-to places of habit, again with Amazon making the greatest inroads into our shopping lives so far.

From a customer-centric perspective, it’s never been more confusing to find good deals. Yes, they seem to come from every quarter — print circulars, the web overall, direct mail, eBay alerts, Amazon “notifications” — but they’re disordered.

A recent study by the BIA/Kelsey group puts a number on the proliferation of marketplace choice. The annual study points to consumers using an average of 7.9 different media to make buying decisions in 2010, compared to only 5.6 in 2007. Buying’s gotten more complex.

The flipside, of course, is that merchants’ own choices about how to market have gotten more complex (“The Newsonomics of Eight Per Cent Reach,” ), with small- and medium-sized businesses using 4.6 media to reach customers in 2010, as compared to 3 in 2007.

So taking a look at Find n Save, let’s look at the Newsonomics of the would-be new mercado, and what it will take to make these new marketplaces bigger business for local media.

McClatchy’s newspapers are the first big clients for Find n Save, a product ofTravidia, a long-time player in the print-to-digital ad conversion business. Find n Save replaces Marketplace 360, the company’s former regional marketplace product.

Two big McClatchy papers — its hometown Sacramento Bee and the Kansas City Star — launched Find n Save in November. The company’s other big sites, from the Miami Herald to its North Carolina properties (Charlotte and Raleigh) and the Fort Worth Star Telegram, should feature it by July 1, with the rest of the company’s 30 markets putting Find n Save in place by year’s end. MediaNews’ flagship Denver Post will also launch it soon.

It’s not the only new effort at a regional marketplace.

Find n Save will soon by joined by another regional commerce portal. FYI Philly will launch this spring, in the greater Philadelphia region, two of its principals tell me. It’s conceived as a commerce portal, details to come. Significantly, it’s the result of unprecedented cooperation among four newspaper competitors in that region: Philadelphia Media Network (the new parent of the Inquirer and Daily News), the Journal Register company, Gannett, and Calkins Newspapers.

For Chris Hendricks, McClatchy’s VP/interactive, the Find n Save push is about a grand goal: reclaiming retail advertising. While the destruction of print classifieds has been well chronicled, the steady decline of local retail has been less so. You can figure that retail advertising has declined about $7 billion annually since its 2001 height. Yes, online display advertising has yielded some retail revenue, but doesn’t come close to recreating the lost revenue — or the lost sense of marketplace. 

So Hendricks talks about “blowing up retail” — and reordering it with Find n Save. “People are searching more and more for local services and products,” he says. “And they’re getting more and more confused.”

Find n Save aims to bring some simplicity to that confusion. Take a look at it, and you can see it’s a work in progress. What we notice about it — very prominently — is the deal of the day. Yes, Find n Save aims to take advantage of the Groupon revolution. Some Find n Save sites are partnered with Groupon, while others offer their own deals of the day. The idea is that the deal of the day isn’t just a new ad play, a new revenue source, for news sites; it’s also a new gateway to local commerce. The rest of Find n Save shows its ambitions:

• It gives prominence to other local couponing, deals without the social must-buy incentives of the daily deal. Subway sandwiches, vacuum cleaners, lots of restaurants, and car care — but all in one place.
• It incorporates product search, as have previous versions of the product. Consumers can search by product, brand, and store, among other attributes, narrowing or expanding search as they wish, and see where that product is available locally. The big allure, here, is the ability to check whether a product is in stock, at multiple, close-by locations. Search for lamps or shoes or spas, and you’ll find a motley assortment of offers.

So far, the November-launched sites have seen their marketplace traffic “quintuple,” says James Green, chief marketing officer of Travidia and an alum of Raleigh’s pioneering Nando Media. He says that’s due mainly due to “product-centric search engine optimization,” providing a new level of prominence in Google search results.  If that base can keep growing, Chris Hendricks sees the sites becoming commercial magnets. Possible new, related streams can include display ads, offering prominence and placement, charging local retailers for ingestion of their inventories and conversion of their print material generally and topical directories, he says.

“Deals are the content,” says Hendricks. He notes, for instance, that news sites’ attempts to connect up editorial content with restaurant directories — using newspapers’ unique and core strengths — hasn’t produced the dividends many of us thought they would. Forget the packaging of feature content with ads; just focus on the ads.

So what can we make of this step forward?

Well, it’s a step, but probably many more are needed. Fronting a site with coupons makes some sense, and will pull in additional audience. Yet the overall research and shopping experience will have to be fuller if these are to become go-to sites with masses of local buyers.

It’s hard to know how many years we are away from the perfection of commerce — you know, getting each of us the kinds of timely and meaningful shopping offers that bring order out of the digital shopping chaos. Certainly, though, here is some of what will be needed:

• Broader, deeper databases of products: That’s simple to say, and hard to achieve. I asked James Green whether Find n Save is a breakthrough product. Not yet, he said, saying that there’s not yet “enough conversion.” That translates as product search being too spotty; provision of retailers’ real-time inventories is still a work-in-progress. If we as consumers run into more dead-ends than usable deals, we’ll stop coming back.
• Reviews and recommendations: Find n Save contains none. In a world of imperfect knowledge, we love seeing what dozens of others think of products and services, just like in the early mercados. What’s new, good, and fresh? Throw out the reviews that are outliers, and we’ve got a better-than-even shot of making a better buying decision. Sites without them lack the critical component found in sites from Amazon to Best Buy to Yelp.
• Preferences and customer knowledge: While some of us are highly concerned about privacy, many others say, ‘Just use your tracking to give me what I want — including deals — and stop spamming me with useless ads.’ So the ability to state preferences and to have my digital behavior intelligently watched — for my benefit — will be a big differentiator.
• A great tablet product. James Green says Find n Save’s mobile app will be ready soon. Apps are, of course, becoming a price of admission for mobile customers. More importantly, the winning local marketplace will figure out how to combine deep, broad shopping info, social reviews, deals — and to fully embrace the interactive and visual capabilities of the tablet. Just as the iPad — and its newer cousins — are the big do-over opportunity for news companies’ reader business models, they’re also literally a blank slate for the new mercado.

Who will build it? It could be a Travidia, or an Amazon or a Google or a Facebook or a Flipboard-for-commerce so far unborn. There are billions of dollars baiting the hook.

A logical position: We’re the new free, anti-Murdoch alternative! At at a time when News Corp, the New York Times and dozens of others U.S. newspapers are “going paid,” about to erect porous (metered) and solid pay walls, taking a free position can be clear to mass audiences confused by what wall they may run into here or there. Imagine the new AOL/HuffPo ad soon after the New York Times goes metered — best in the Times itself:

Come Visit Us

Anywhere

Anytime

FOR FREE

That kind of position may fit well with Tim Armstrong’s mantras and manifestoes. If the former head of Google advertising really believes he can more efficiently monetize digital content than his various competitors, then he bets the company on it. Forget the two legs of revenue — advertising and circulation — that the old guys want, we’ll just focus on the fastest growing kind of advertising in the country and the world, digital, and do it better than anyone else. He’s got a major issue with that, of course, pointed out by many observers. The new independent AOL is not (yet) climbing the digital ad mountain quickly enough. In fact, its last report showed continuing year-over-year declines.

Execution must match up with strategy, and now given the HuffPo purchase for $315 million, sooner than later. One key question there: where exactly is AOL’s mobile push? Its apps are anemic, still focused on instant messaging, and so far lacking for Patch, this as the location-aware mobile marketing revolution takes flight.

Advertising execution may be key, and today Tim Armstrong put a new face on his brand. In fact, given the announcement that Arianna will head editorial operations overall, we’re unclear how much the going-forward brand is in fact AOL or HuffPo, or some nested version of the two, a nesting that would probably only confuse the marketplace and readers more.

Make no mistake. Armstrong needed to put a face on the brand, for AOL, overall, has been faceless. Sure, Armstrong is well-known among media people, but not more widely. AOL, like Yahoo, suffers from portalitis,a big grab-bag of topics and sites that don’t have a common consumer promise. (It’s no accident that both showed revenue drops, as digital advertising is going gangbusters again in the recovery.) With Egypt exploding over the last couple of weeks, it was CNN, Al Jazeera, the Times, the BBC and the Guardian that people turned to. No one said, I’ve got to see what AOL has out of Cairo.

Ah, but what kind of new face will AOL/HuffPost’s be?

It could be, simply, the anti-Murdoch. Sure, The Daily is “centrist,” whatever that means in the world of 2011, but the right-leaning proclivities of Murdoch Media are clear. MSNBC has tiptoed into the “anti” position, leaning forward gingerly, but then wrapping itself in knots over small campaign contributions. Arianna could simply embrace the left end of that spectrum, porting over her passion and partisanship, the very elements that have defined her Post, the fastest growing news site on the web (“The Newsonomics of HuffPo’s Pinball Wizardry“. In fact, if she doesn’t bring along what got her to where she is, then what exactly is AOL buying and where will her core audience go?

Would Tim go for it? Yes, if it makes money, as we saw clearly in the leaked AOL Master Plan. For Armstrong, it’s simply about the efficiency of the markets, bringing state-of-the-art digital manufacturing techniques to the old standbys of editorial and advertising. He needs lots of content — some from highly paid names and lots more from good-enough user gen — and must get his machine (better SEO, more pageviews per story, lots more lucrative video) tuned before he runs out of money. Just one suggestion for a short-term moneymakers: pay-per-view web video of Arianna’s first meetings with Techcrunch’s Michael Arrington and Engagdet’s Joshua Topulsky. Bonus WWE prices if she talks to them together.