What’s the difference between being informed and being educated?

What’s the line between learning something new and being taught something new?

Are news media and universities just two ways to do the same thing: gain knowledge?

As Coursera, Udacity, edX, and several other offerings begin to unravel everything we thought we knew about post-secondary education, we can’t help but make links to the world of news.

You gotta love the geeky name that applies to this new hybrid for-profit/nonprofit industry: MOOCs, or massively open online courses.

For top-rank universities, the embrace of online education promises to be transformational, upending many of the millennium–old rules of academe, as education, learning, certification, payment for services, and measurement of teaching effectiveness all inevitably succumb to major rethinks. For daily newspapers, themselves becoming mainly digital news products ever more quickly, it’s a time ripe for redefinition, for declaring new and expanded roles as the digital age removes long-ago built barriers — some real, some always imaginary.

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

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

What indeed, then, might media’s greater role in society be, and how can it now harness technology to multiply its impact? MIT, Stanford, and Harvard, among others, are wandering into that territory — testing the reach of technology — without knowing where their travels will take them in this terra incognita. We know that news media may be well suited to new educational roles. Why? It’s what we produce — information and perspective, building blocks of learning — and it’s what we believe when we talk about “public service.”

This emerging blur between media and education joins others. In its mischievous disruption, that’s much of what digital does. It blurs.

As the tablet makes mincemeat of the historic differences among newspapers, magazines, TV, and radio, we see another bright line ready to dim: that seeming line between what a news organization and what a college each do. This is still another stopping point for all those leading the craft of journalism into the new age to ask what business we’re really in. What business does it make sense for us to consider, test, or ply? What fits with our mission?

Let’s take “mission” for a moment.

Our history offers lots of punchy “raise hell and print the news” missions. But scratch deeper and you find a commitment to learning and its cousin, community building — one that reaches beyond simply pitching the news.

How about The Wall Street Journal’s simply elegant, “The daily diary of the American dream.” Or: “The Scotsman. It’s thinking time.” Or The Everett (Wash.) Herald: “If It Matters To You, It Matters To Us.”

While we all know about The New York Times’ “All the news that’s fit to print,” consider its deeper declaration: “The Company’s core purpose is to enhance society by creating, collecting and distributing high-quality news, information and entertainment.”

Beyond mere words, we can see small educational extensions of the news companies’ basic businesses. Most every paper has participated in Newspaper in Education programs, providing papers and, sometimes, lesson plans for elementary and secondary students. The New York Times sponsors many talks, lectures, and other learning events in the city. Education in the pre-online sense has long been part of its brand, and its Knowledge Network has offered “adult and continuing education opportunities.” Consider the Texas Tribune’s forays in events, both as a business line and a way of extending its journalistic raison d’etre beyond publication. Many newspapers sponsor candidate forums or public debates on an issue.

Largely, though, newsies inhabit an industry focused on the day. We trot out the well used quote, “News is the first rough draft of history,” but we let others make sense — and value — out of the incredible riches of newspaper archives. Let others create courses, connect the dots, and create knowledge. We’ve always been into a snapshot approach to the world. What’s news today lacks sufficient lineage to yesterday — or to tomorrow. We see such innovations as Storify and a few Google efforts (Living Stories, Timeline) that are efforts to connect the dots of news time.

All these efforts, though, are piecemeal, not intended as new ways of gaining mass impact, as in massive — think thousands or hundreds of thousands of people — open online courses.

So in the emerging age of the democratization of education, let’s consider how news companies could rethink their role in news, and education. Let’s call it the newsonomics of News U. [Update: I should have noted Poynter Institute's long-time and well-used News University, sometimes called NewsU, in the original post. The program, headed by Howard Finberg, offers more than 150 courses in journalism and multimedia. ]

Coursera, which has gotten a huge amount of press, is more than a collection of online courses. Working with the University of California, Princeton, Penn and, of course, Stanford, the Palo Alto-bred company has pioneered an “interactive online learning system.” Read its near-revolutionary mission statement of this Kleiner Perkins-funded company:

We are a social entrepreneurship company that partners with the top universities in the world to offer courses online for anyone to take, for free. We envision a future where the top universities are educating not only thousands of students, but millions. Our technology enables the best professors to teach tens or hundreds of thousands of students.

Through this, we hope to give everyone access to the world-class education that has so far been available only to a select few. We want to empower people with education that will improve their lives, the lives of their families, and the communities they live in.

What if we take the Coursera’s thoroughly democratizing aspiration and apply it to a modern news media company that wants to stake a greater claim to learning and community as part of its mission?

We are an entrepreneurial company that takes advantage of the best sources of news, information, and knowledge in our area to maximally inform our citizenry, at prices that bring civic literacy to everyone in our community. We envision a future where media and citizens work together, building on fact-based knowledge to better the community and tackle long-standing issues. Our technology enables us to broadly engage community as never before possible in building on community knowledge, feeding the democratic process of debate and decision.

We believe that civic learning and engagement are lifelong pursuits, and we are dedicated to using the most contemporary techniques, technological and otherwise, to empower people to improve their lives, the lives of their families, and the communities in which they live.

Too high-minded? Or is that simply another way of saying, with the aid of technology, what The Guardian, Journal, and Times first said more than a century ago?

What’s increasingly possible here — recognized by the pioneering elite educational institutions, but available to media institutions as well — is the ability to both increase the institutional reach of their brands and to provide transformational learning opportunities at small incremental cost.

Few traditional media have the know-how internally. One fascinating exception: U.K.-based Pearson. It owns the global Financial Times news franchise, Pearson Education is a leading K-12 publisher, and Penguin Books is positioning itself well to extend ebook links between “media” and “education.” While at Pearson, the press and the educational press share a home, most media will have to partner to test forays into learning, or to position themselves as Pearson does as “always learning.”

Beyond high-minded mission statements, what are some practical ways we can test media/education links? How about these to start:

• Build on in-depth series you’ve done or have in the works. Think of “courses” as an extension of the work. Pulitzer- (and other award-) winning series are naturals here and can take students into environmental science, health policy, hydrology, engineering, sociology, business management, and history, just to name a few academic areas.
• Take a page from One Book projects, in which communities settle on single books to read and discuss, by trying One Series courses that try to achieve maximum community reach. Topics like immigration, bullying and water planning come to mind, will draw new audiences.
• Add courses to the kinds of community engagement initiatives such companies as Digital First Media (and Steve Buttry, its leader in that area) are championing. (Thanks to Steve for the context and thinking, in his follow-up post.)
• Match up burgeoning ebooks initiatives (“The Newsonomics of 100 Products a Year“)  to coursework. Sell the book; provide the course at a low cost? Local history courses are a natural here.
• Think next-gen Newspaper in Education program. While some newspapers put real effort in bringing the news alive in the classroom, many long regarded it as just another way to add a percentage point or three to circulation numbers. What would a digitally revitalized, 2012 NIE program look like?
• Membership programs — think “you’re more than a subscriber to me” — are all the rage from Boston to L.A. Membership needs to have some real benefits, and news-based learning opportunities can be among them.

So where do media companies look for partners?

Consider that this is much more than putting words into lesson plans, or creating education replicas of news products. At the MIT/Harvard-based edX, video lectures, embedded quizzes, interactive learning, online labs, and much peer interaction. So these new MOOC companies themselves could be partners.

Other natural partners would be educators themselves, as school districts and community colleges, as well as the bigger, more prestigious colleges in the forefront of this movement.

The Knight Foundation — the funding pacesetter of the new journalism — should be of help. Its DNA is media and community-building. Just last Friday, Knight’s Eric Newton challenged journalism school educators to adopt a “teaching hospital” model to create greater community engagement and betterment. If transformative technology needs to be applied to enable media to become educators as well, maybe Knight would be a source of aid.

So where is the money here? Is there a business model to be found? The facile Silicon Valley answer may seem unpalatable to current newspaper company owners: Become more essential to people, and the money will follow. And what can be more essential, and more relationship-building, than lifelong education?

We see three other major web concepts in the business thinking of the MOOC founders: freemium, gathering data, and aggregation.

On business model, most MOOC courses are free to students at this point, a wonderful price point that brings in lots of customers, er, students.

On data, Coursera’s goal is to “analyze student data to obtain a better understanding of online pedagogy and student learning…and understand human learning at a scale and depth that has been never been possible before.” Think of the power of that data.

On aggregation, look at edX’s statement about the project, “The gathering of many universities’ educational content together on one site will enable learners worldwide to access the course content of any participating university from a single website, and to use a set of online educational tools shared by all participating universities.” Become the go-to source, globally, nationally or locally for something people value, and the digital world rewards you.

One other way we can look at building value and revenue here. Let’s take the prism of manufacturing. Publishers manufacture content (and ads), use it for a single purpose — the paper, the site — and then discard it. News is a raw resource, whose value is poorly amplified; better for publishers to move up the food chain and find higher-end uses for it in the creation of learning and knowledge.

Establishing new relationships and deepening old ones should create a future pipeline for products and services still to be born.

Forget Udacity — let’s think audacity. The audacity to think, in spite of news organizations’ shrinkage, they can make a larger, not smaller, contribution to their readers and communities.

Many non-profits, like NPR, like to tell the public that they are “mission-driven organizations,” words, I assume, that are meant to separate them from profit-seeking media. With news media profitability now only achieved by keeping the scalpel handy and well-oiled, the profit line works less as a defining difference. More important may be that, in comparison, much legacy news media seemsmission-free. It still exists, but in economic decline harbors increasing doubt about its own purpose. With self-doubt and its apparent clout receding, it has grown less clear about its role in democracy, rather than more clear.

Maybe a mission-based exhortation to adapt the technologies of the day to further community education, engagement and civic problem-solving is a tonic for the deepening media malaise.

Let’s let The Guardian’s C.P. Scott bring us full circle, reconnecting journalism and education.

Scott’s clear-eyed, pre-cable, pre-web view of what journalists — and educators — do rings even more important today: “Comment is free, but facts are sacred. ‘Propaganda’, so called, by this means is hateful.” In fact, one of the greatest shared values of the news and education industries is that both are fact-based enterprises, operating against longer odds as misinformation and disinformation can be funded on a different massive scale.

In 1921, he wrote:

A newspaper has two sides to it…It is a business, like any other, and has to pay in the material sense in order to live. But it is much more than a business; it is an institution; it reflects and it influences the life of a whole community; it may affect even wider destinies. It is, in its way, an instrument of government. It plays on the minds and consciences of men. It may educate, stimulate, assist, or it may do the opposite. It has, therefore, a moral as well as a material existence, and its character and influence are in the main determined by the balance of these two forces.

When the price of your digital product is zero, that’s about how much you learn about customer pricing. Now, both the pricing and the learning is on the upswing.

The pay-for-digital content revolution is now fully upon us. Five years ago, only the music business had seen much rationalization, with Apple’s iTunes having bulled ahead with its new 99-cent order. Now, movies, TV shows, newspapers, and magazines are all embracing paid digital models, charging for single copies, pay-per-views, and subscriptions. From Hulu Plus to Netflix to Next Issue Media to Ongo to Press+ to The New York Times to Google Play to Amazon to Apple to Microsoft (buying into Nook this week), the move to paid media content is profound. The imperative to charge is clear, especially as legacy news and magazines see their share of the rapidly growing digital advertising pie (with that industry growing another 20 percent this year) actually decline.

Yes, it’s in part a 99-cent new world order as I wrote about last week (“The Newsonomics of 99-Cent Media“), but there are wider lessons — some curiously counterintuitive — to be learned in the publishing world. Let’s call it the newsonomics of Pricing 101. The lessons here, gleaned from many conversations, are not definitive ones. In fact, they’re just pointers — with rich “how to” lessons found deeper in each.

Let’s not make any mistake this week, as the Audit Bureau of Circulation’s new numbers rolled out and confounded most everyone. Those ABC numbers wowed some with their high percentage growth rates. Let’s keep in mind that those growth numbers come on the heels of some of the worst newspaper quarterly reports issued in awhile. Not only is print advertising in a deepening tailspin, but digital advertising growth is stalled. Take all the ABC numbers you want and tell the world “We have astounding reach” — but if the audience can’t be monetized both with advertising and significant new circulation revenues, the numbers will be meaningless.

When it comes to dollars and sense, pricing matters a lot.

Let’s start with this basic principle: People won’t pay you for content if you don’t ask them to. That’s an inside-the-industry joke, but one with too much reality to sustain much laughter. It took the industry a long time to start testing offers and price points, as The Wall Street Journal and Walter Hussman’s Arkansas Democrat-Gazette provided lone wolf examples.

The corollary to that principle? If you don’t start to charge consumers — Warren Buffett on newspaper pricing: “You shouldn’t be giving away a product that you’re trying to sell.” — then you can’t learn how consumers respond to pricing. Once you start pricing, you can start learning, and adjust.

We can pick out at least nine emerging data points:

• 33-45 percent of consumers who pay for digital subscriptions click to buy before they ever run into a paywall. That’s right — a third to a half of buyers just need to be told they will have to pay for continuing access, and they’re sold. As economists note that price is a signal of value, consumers understand the linkage. Assign what seems to be a fair price, and some readers pay up, especially if they are exposed to a “warning” screen, letting them know they’ve used up of critical number of “free” views. Maybe they want to avoid the bumping inconvenience — or maybe they just acknowledge the jig’s up.
• If print readers are charged something extra for digital access, then non-print subscribers are more likely to buy a digital-only sub. Why pay for digital access is the other guys (the print subscribers) are getting it thrown in for “free”? Typically, Press+ sees a 20-percent-plus increase in signups on sites that charge print subscribers something extra. That extra may be just a third or so of the price digital-only subscribers pay (say, $2.95 instead of $6.95), but it makes a difference. Consequently, Press+ says 80-90 percent of its sites charge print subscribers for digital access. The company now powers 323 sites and thus has more access to collective data than any other news-selling source.
• You can reverse the river, or at least channel it. The New York Times took a year, but figured it out righter than anyone expected. It bundled its Sunday print paper (still an ad behemoth) with digital, making that package $60 or so a year cheaper than digital alone. The result, of course, is that Sunday Times home delivery is up for first time since 2006. It’s not just NYT or the L.A. Times which have embraced Sunday/digital combos. In Minneapolis, the Star Tribune began a similar push in November. Now, of its 18,000 digital-only subscribers, 28 percent have agreed to an add on the Sunday paper, for just 30 cents a week, says CEO Mike Klingensmith (“A Twin Cities turnaround?”). So we see that consumers may well be more agnostic about platform than we thought. Given them an easy one-click way of buying even musty old print, and they will. Irony: If you hadn’t charged them for digital access, you probably wouldn’t have sold them on print.
• New products create new markets. 70 percent of The Economist‘s digital subscribers are not former print subscribers, says Paul Rossi, managing director and executive vice president for the Americas. That’s surprising in one sense, but not in another. Newspaper company digital VPs will tell you that they’re surprised to see how little overlap there is between their print audience customer bases and their digital ones. The downside here: Many print customers seem not to value digital access that much. The Star Tribune is finding a low take rate of 3 percent of its Sunday-only print subscribers willing to take its digital-access upsell. One lesson: The building of a new digital-mainly audience won’t be easy and will require new product thinking; it’s not that easy just to port over established customers.
• The all-access bundle must contain multiple consumer hooks. Sure, readers like to get mobile access as well as desktop and print, and maybe some video. Yet some may especially prize the special events or membership perks they are offered, as the L.A. Times is banking on (and start-ups Texas Tribune, MinnPost, and Global Post have applied outside the paywall model). Some will like the extras, like The Boston Globe telling its new 18,000 digital subscribers, as well as its print ones, that they now get “free” Sunday Supper ebooks (“The Newsonomics of 100 Products a Year“). Sports fanatics or business data lovers will find other niches to value — and ones that make the whole bundle worthwhile. Archives — and the research riches they offer — will prove irresistible to some. In 2012, a bundle may offer a half dozen reasons to buy, casting a wide net, with the hope that at least one shiny lure will reel in the customers. By 2013, expect “dynamic, customized offers,” targeting would-be buyers by their specific interests to be more widely in use.
• While pageviews may drop 10-15 percent with a paywall, unique visitors remain fairly constant. We see the phenomenon of those who do hit a paywall one month coming back in subsequent months, rather than fleeing forever. “It may be the second, third, or fourth month before someone says, ‘I guess I am a frequent visitor here, and I’ll play,’” says Press+’s Gordon Crovitz.
• Archives find new life. Archives have lived in a corner of news and magazine websites for a long time. They’ve been used, but not highly used or highly monetized. Now, courtesy of the tablet, and a new way to charge, The Economist is finding that 20 percent of its single copy sales are of past issues. Readers will pay for the old in new wrappers, whether back e-issues, or niched ebooks. The all-access offer can be much wider than cross-platform, or multi-device. It can extend across time, from a century of yesterdays to alerts for tomorrow.
• News media is probably underpriced. Take the high-end Economist. CEO Andrew Rashbass — speaking to MediaGuardian’s Changing Media Summit 2012, in a recommended video — said that a survey of its subscribers showed that a majority didn’t know how much they were paying for the Economist. When pressed to guess, most over-estimated the price. At the Columbia (Missouri) Daily Tribune, an early paywall leader in the middle of America, a recent price increase to $8.99 from $7.99 has so far resulted in no material loss of subscribers. At Europe’s Piano Media, early experience in Slovakia and Slovenia is that price isn’t a big factor, says Piano’s David Brauchli. “Payment for news on the web is really more a philosophical mindset rather than economic. People who are opposed to paying will always opposed to paying and those who see the value of paying don’t mind paying no matter what the price is.” That suggests pricing power. It makes sense that publishers, new to the pricing trade, have approached it gingerly. Yet the circulation revenue upside may well be substantial.
• Bundle or unbundle — what’s the right way? Mainly, we don’t know yet, and the answer may be different for differing audience segments. The Economist started with print being a higher price than a separate digital sub. Then it raised the digital price to match that of print — to assert digital value. It now offers all-access: one price gets you both. Next up: You can buy either print or digital for the same price, but if you want both, you’ll pay more. It’s an evolution of testing, and so far, it’s been an upward one.

Overall, this is a revolution in more than pricing. It’s a revolution in thinking and, really, publisher identity.

The Boston Globe’s Jeff Moriarty sums it up well, as his company aims (as has the Financial Times before it; “The Newsonomics of the FT as an Internet Retailer“) to emulate a little digital-first company called Amazon:

I think overall publishers have to start thinking more like e-commerce companies. More like Amazon. You can’t just throw up a wall or an app and expect it to just sell itself. We’re still building that muscle here at the Globe, and some of our colleagues in the industry are even farther along. We have extensive real-time and daily analytics and are employing multivariate testing to try offers and designs to refine the experience that works best for each type of user.

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.

Alfredo Corchado was used to getting mortal threats.

He received three in Mexico, but now he was in a Laredo bar, north of the border.

You better stop what you’re doing, or you’ll end with a bullet in your head and your body in a vat of acid, he was told. And then we’ll deliver the bones to your family in El Paso.

It was a chilling warning, or at least we’d expect it to put a chill into Corchado. An investigative reporter for the Dallas Morning News (and a former Nieman Fellow), he’s been covering the ravages of drug trafficking for years, much to the concern of his parents living, as the traffickers plainly know, in El Paso. Yet Corchado goes on with his work — as do Adela Navarro Bello of Tijuana’s Zeta news magazine, Jerry Mitchell of the Clarion-Ledger in Jackson, Miss., and Ramita Navai of the U.K.’s Channel 4. As Navarro Bello explained of her paper’s coverage of the drug trafficking that has consumed at 50,000 Mexican lives, “If we don’t publish this information, we are part of the problem.” (Filmmaker Bernardo Ruiz has captured Zeta’s struggle — including the murder of two of its journalists — with a new movie.)

Each is an investigative reporter who put their lives on the line to reveal stories they think readers must know about. They spoke on the “When the Story Bites Back” panel this weekend, at UC Berkeley, part of the sixth annual Reva and David Logan Investigative Reporting Symposium (live blogging of the conference, here, with a #Logan12 Twitter feed).

That panel and the entire spirited weekend, organized and led by esteemed investigative producer Lowell Bergman, tells us a fair amount about the business of journalism. Though it is not — like most of my work — concerned with the dollars and cents of the business, in its very essence, it describes why the current crazy-quilt economics of the business matters. Funding the journalism business isn’t like funding Sears and Kodak  (“The Newsonomics of the Long Good-Bye“) or other fading institutions. It’s not even about saving a perhaps-vital American industry, like the auto industry.

It’s about keeping a lifeline of funding open so that our best reporters can do their jobs.

I’ll call it the newsonomics of risking it all because that’s what these reporters do. Many of the other Logan participants and attendees, thankfully, do less life-threatening work. Yet those represented at the conference — from ProPublica, the Washington Post, and New York Times to ABC, NBC, and NPR — are among the cream of the crop of investigative work and produce work with real public interest impact.

As we endlessly debate pay models, whether or not to work with Facebook, how to deal with Apple and Amazon and multi-platform journalism, the Logan Symposium is good tonic — certainly for those of us who attended, but really for all of us who know why this business matters to democracy. Whether and how the economics of the new news business work out isn’t an arcane question; it’s central to our collective future. The value of good, deep reporting is truly priceless.

So what about the state of investigative reporting? Look at the glass as half full and half cloudy.

What emerged from the conference, surprising to some, is that national investigative reporting is keeping its head above water. Both NBC and ABC talked about their expansions in the investigative area, while companies like NPR and Bloomberg have put new resources in as well. Units at the Post, L.A. Times, and New York Times may not be growing much, but seem to be sustaining themselves, for now.

“For now” is an important qualifier, and New York Times managing editor Dean Baquet’s opening interview at Logan, in its over-the-top self-assurance, bothered many of the conference participants with whom I talked. (See my related post about that.)

Washington Post investigative editor Jeff Leen suggested that there were 200 investigative reporters paid by news media in the U.S., which I calculate as one for every 1.5 million Americans. That’s not a ratio that’s going to hold many big institutions — government, business, labor — to account. Maybe that’s why as Logan participant and new-media vet Neil Budde tweeted, “How many times will ‘existential’ be used this weekend? I think count is six so far.”

Importantly, it is largely the largest news media — mainly national and global ones — that continue to put money into investigative work; these are the Digital Dozen companies I identified in my Newsonomics book. For them, as NBC senior executive producer David Corvo put it, investigative work is a “differentiator,” important to distinguishing big news brands from one another in the digital age.

What’s going on regionally is more of a patchwork.

Dozens of people like the Logan family are using their wealth to fund investigative enterprises from coast to coast, most with little fanfare. The Knight Foundation, represented at the conference by its senior advisor and grant-giver extraordinaire Eric Newton, has put $20 million into investigative journalism. With the decline in newspaper budgets, and thus in funding of investigative teams at many regional papers, such private funding has been a lifeline, though there’s a profound sense that significantly less in-depth work is being done at former powerhouse regional papers.

This Logan conference lacked the always-odd spontaneity of a Julian Assange appearance, but it offered intriguing emphases:

• Front and center, though not appearing in person was Rupert Murdoch.After screening “Murdoch’s Scandal,” Bergman’s Frontline documentary that aired March 27, “The Murdoch Effect: News At Any Price,” made for a raucous panel. Milly Dowler attorney Mark Lewis told how the phone hacking scandal had consumed his life and spoke of the “commercial despotism of Murdochracy” in the U.K., given the News Corp. CEO’s multi-party, decades-long influence. Big questions: What next, and if and how this tale plays out in the U.S.
• “If it’s not on TV, the American public doesn’t know it,” observed Diana Henriques, the New York Times financial investigative reporter. Yes, we may be on the brink of this multi-platform age, where old newspapers like the Times and the Journal do video alongside print, but still — in terms of notice and public action — there’s nothing like the impact of TV documentary.
• This is a generational challenge. Journalism has always had its challenges, but never has there been more uncertainty about how one generation can pass along its best practices to the next. Through that foundation funding, a couple of dozen younger journalists and students had their way paid into the conference. Surveying the group on the last day, Robert Rosenthal, executive director of the Center for Investigative Reporting and California Watch, summed his baby-boomer generation’s role: “I’m a bridge — we’re all bridges to the future.”

Bridging is, in part, what Lowell Bergman’s program does. UC Berkeley’s Investigative Reporting Program is a partner in the new Collaboration Central project, along with PBS MediaShift. With new funding, IRP will soon move into a new permanent office. It provides lots of training and fellowships, bringing along new generations to work alongside people like the Pulitzer Prize-winning Bergman, whose career has spanned from early Ramparts through CBS, The New York Times, and Frontline, and who was played by Al Pacino in the tobacco industry exposé The Insider.

Bergman paid tribute to his one-time CBS colleague Mike Wallace, underscoring Wallace’s storied tenacity. That tenacity, based on Wallace’s fierce journalistic power (highlighted at CBS, in story and video), is what it took a non-journalist to highlight in Berkeley.

Jules Kroll, who led the invention of the modern intelligence and security industry, gave the trade good, pointed advice. Saying he had heard a lot of journalists talking about how beleaguered they are, he noted, “You have a big impact.” His shared his inside view of the power of a good investigation. Colloquial translation: Stop whining and get on with it.

And that’s always good advice. As ProPublica managing editor Steve Engelberg aptly said, “They were whining in 1989, when times were good.” That’s true. There may be more to whine about these days than in 1989, but the power of great public service work, sometimes when lives are on the line, is one of the things that must propel the trade forward.

Try this: Call up your local newspaper or online news organization. Tell them you want to buy something and ask them what they can sell you? Of course, at first, they’d be non-plussed: Sell you something? Then, after giving it some thought, they’d say you can buy a newspaper or a subscription or a membership — or, maybe, an ad? Would you like one of those?

Those days — mark it — are coming to an end. We’re on the brink of news companies producing hundreds of products for sale each year. While digital technology hath taketh (the easy ability to make money on news distribution), digital technology also giveth back, with the ability to create hundreds and thousands of newsy products at small incremental costs. The bonus: News organizations will be able to satisfy groups of readers and advertisers (often disguised thinly as sponsors) better than ever before. Double bonus: The let-a-hundred-products-bloom revolution fits neatly with the all-out embrace of all-access circulation initiatives, which news companies in North America, Europe, and Asia now can’t seem to implement quickly enough.

Can we call this the ebook revolution? Maybe, but that’s probably too narrow. Delivery of new products to new audiences can take several forms. A text-only ebook, a shinier iBooks-enabled product with video, or an app with all the glorious functionality apps offer. It’s not the form; it’s the content, content that satisfies niches rather than serves masses with one-size-fits-all newspaper or magazine products.

Call it the newsonomics of 100 products a year, or just one way to envision a much bigger future.

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

Is it a big moneymaker? We don’t know yet, though we can extrapolate some numbers below.

It’s directionally right, though, for at least a couple of strategic reasons. The notion of 100 smaller products reminds us that so much of the new world is based on volume. Google has built a monstrous advertising business on hundreds of thousands of smaller advertisers, while daily newspapers reaped huge profits on relatively few bigger advertisers. Even as movie watching by streaming surpasses DVD watching, more money is still in the old medium. Streaming will monetize at a lower rate, but end up generating bigger dollars over time. The same thing is true in the digital music business. Selling lots of stuff to lots of people at smaller price points is something the Internet enables superbly.

Yes, there are definitely new winners and losers in movies and music, as there will be in news. Those who transition best and fastest will win.

Second, it’s in line with the strategic push to satisfy the hell out of core customers. As publishers have figured out that it’s the top 15 percent of site visitors who make the big difference in building the new digital business — perhaps paying for subscriptions, consuming many more pages than fly-by users sent by Google — core customer satisfaction is key. Ebooks deeper the relationship to that reader customer.

This 100-product-a-year model may fit as well with the new California Watch/Bay Citizen combo (“The Newsonomics of the Death and Life of California News“), finalized Tuesday, as its does with The Wall Street Journal, The New York Times, the Charlotte Observer, GQ, or Conde Nast Traveler.

Let’s take one example. On Wednesday, the Boston Globe launched “Sunday Supper & More.” It’s a cookbook. It’s New England. And it could be the beginning of a new franchise: Expect summer, fall and winter editions each year to join this spring debut. The Globe’s staff built it with Apple’s iBooks Author tool, so it offers video within it.

Want to buy it? Not so fast. Today, Sunday Supper & More is only available to Boston Globe print, all-access, and digital subscribers. So subscription — think “membership” (the recent riff of the L.A. Times new paywall intro) — is gaining new benefits. Surprise, says the Globe, you not only get our paper, our spiffy new replica-plus edition, if that’s what you want, and our mobile apps — you also get our cool cookbooks, with more to come.

The Globe will sell the book to non-subscribers — probably at $4.99 — but will decide the timing of that sale after next week’s Globe confab at which execs and editors will plot an ebook plan for the company.

“Events and ebooks will be the two biggest perks” of the new Globe subscription push, says Jeff Moriarty, the Globe’s VP of digital products. Beyond Sunday Suppers and a new spin on the Fenway 100 historical Red Sox book, we can picture the Globe soon mining its archives in both sports and features to provide new value for customers and a new leg of revenue. It experimented early with three books on its Whitey Bulger stories, and learned some lessons in pricing, distribution, and the technical creation process along the way.

The Globe has plenty of company in this push. We see Canada’s National Post committing to a couple of dozen ebooks in the coming year, again from hard news to features (“To learn what works (quickly), Canada’s National Post dives into ebooks”). Guardian Shorts is an early innovator; Politico is churning out four campaign ebooks this year.

Magazine publishers, faster than newspaper publishers to embrace the tablet as the next-gen platform, are also ahead of most newspaper publishers in ebooks. Vanity Fair’s done more than a half dozen, and its parent Conde Nast is hosting an explosion of more single-purpose apps in the iTunes Store, some unrelated to Conde’s magazines. Hearst’s Cosmopolitan is embracing ebooks, and now partnering, along with ProPublica — an early tester of ebooks — with Open Road Integrated Media . Open Road Integrated Media?

Well, it’s a book company, an ebook company juiced on the possibilities of our age. Headed by former HarperCollins CEO Jane Friedman, the company is prototypical of a new group of middlemen. With book marketing savvy (cover design, marketing, distribution+), these companies are now feeding the emerging ebook marketplace. They are also partnering back for that old standby, print, as Open Road has done with book services company Ingram. In Canada, it was Harper Collins Canada that became the National Post’s partner in bringing news ebooks to market.

Just as the web has knocked many middlemen for a loop, it creates openings for new ones.

If you talk to publishers about ebooks, they are farther along in experimenting than they were a year ago. Yet some basic issues — producing the books, marrying them to commerce engines, placing them prominently in e-stores and more — are giving them headaches as they push forward. “How do we make the right offer to the right person at the right time?” one experienced exec asked.

The marketplace has been exploding (recall that Amazon announced last spring that its ebooks were now outselling its paper books), but those issues are setting the stage for a new group of companies, many staffed with graduates of the book industry, offering their help. Newspaper and magazine publishers are looking to the Open Roads for guidance.

Some are turning to their digital circulation partner, Press+. That company, which is powering more than 280 titles’ subscription commerce, says its system can handle the commerce and even help with identifying likely customers, based on tracked content usage, so its customers are just beginning to ply the ebook trade.

ProPublica general manager Dick Tofel opted for Open Road for the non-profit investigative publisher’s fifth and sixth books. He says the company will start producing a half dozen or more a year now and is now fielding calls from other publishers eager to get the benefit of his early ebook experience.

So far, ProPublica has put 90,000 ebooks into the market. The first couple were free downloads, but with the addition of new original introductions to work ProPublica had already published free online, Amazon and ProPublica agreed on test pricing of 99 cents and $1.99, and new revenue is rolling in. It’s small, but “pound for pound, it generates more than advertising,” notes Tofel, who is a Wall Street Journal veteran. And, of course, the incremental cost of creating ebooks is closer to zero, with most sales cost able to be a commissioned cost of sale.

As assistant publisher, Tofel oversaw the print books business that’s been a good Dow Jones sideline for a long time.

Those books — personal investing and more — are naturals for the ebook revolution now. Look for the Journal to experiment more with those titles, perhaps niching by life stage.

As news and magazine publishers look to this new revenue stream, here are six points to ponder:

It’s about product development: Yes, it’s editing, but fundamentally, it’s a mindset change for many publishers stuck in the one-size-fits-all world. Publishers either need staffers with new product chops or partners wanting to license publisher content and create the products for the marketplace.

Free the archives!: Digital archives have never been a big business for publishers, caught somewhere between Google and musty library connotations. Packaged archives — for specific audiences — can offer new life for older content.

Don’t think content; think problem solving: Publishers too often start with content. If we start with audience — college-planning students and parents, new mothers and fathers to be, bored cooks, and, big time, sports enthusiasts of all ages — we can see the motors of ebook publishing beginning to role. Think life stage, just for starters, and add the geo angle, and regional publishers can play.

Mining the database: As onesies and twosies, it’s fairly easy to pick content from publishers’ own databases. Think of bigger production cycle, going beyond the 100 a year, to a thousand, all niched products that could be semi-automated and templated over time. Better tagging of content for ebook usage then becomes a priority.

Ebook or app?: Early experimenters say let the content be your guide. The more multimedia, the better an app may work. Ebooks, though, can be sold through more distributors, while Apple continues to dominate the app business.

Pricing: What’s an ebook worth? If it solidifies a subscriber/member paying $300 or more a year, it’s worth a lot, even if it’s free. Think of the lifetime value of that subscriber.

To the right niche, some ebooks will be worth $1.99 and others — Retina perfect — will go for $19.99. Let’s take our 100 products a year. Let’s average 5,000 sales for each. Let’s price at $2.99 on average. That would be $1.5 million. Some books, though, could be blockbusters. We can play with this math and see where it goes.

For the ProPublicas, it’s a nice non-ad revenue stream. For other publishers, it’s at least a growing third leg of revenue (beyond ads and circulation) and one that may be nurtured into something significant. (Last fall, Will Sullivan offered a gaggle of reasons ebooks make sense for publishers.) As importantly, it can reinforce those two legs, pleasing subscribers/members with free (or discounted) perks and advertisers/sponsors who have new opportunities to represent themselves to niche audiences. That’s a pretty good combination, and one that publishers will soon embrace, just as they lately have all-access digital circulation.

By the end of this year, figure that about 20 percent of the U.S.’s 1,400-plus dailies will be charging for digital access. Gannett’s February announcement that it’s going paywall at all its 80 newspapers galvanized attention; when the third largest U.S. newspaper site, the Los Angeles Times, went paid this week, more nodding was seen in publishers’ suites.

More than a dozen dailies in Europe are charging, led by Finland’s Sanoma (see “Sanoma’s Big Bundled Success”), Axel Springer, and News Corp.’s Times of London. It looks like more than a dozen in Germany alone may be charging by year’s end. In Asia, the powerful Singapore Press Holdings is first out of the gate, with other dailies there planning to follow.

Suddenly it’s paywalls all around the world. We’ve moved — in a couple of years — from the question of whether to when. The big question that should be asked now: How?

Charging for digital access is a nuanced question. For smart publishers, it’s part of a much larger strategic shift, touching every part of their operations: circulation, content, and advertising.

Let’s look at the newsonomics of an increasing paywalled world. The well-publicized New York Times digital scheme has gotten most of the attention, but it’s a global news source — more akin to The Wall Street Journal, the BBC, The Guardian, and CNN than to regional and local dailies.

While the Times is a fledgling pay model success, we can’t say, broadly, that paywall models are widely successful. Most aren’t failures, but few can point to the significant revenue difference that The New York Times, WSJ, or Financial Times plans have made to their transitioning businesses. Why? And what are the emerging successful formulas?

First, it should be said that the sky has neither opened up into a dazzling blue future nor fallen. A couple of years ago, predictions about the impact of paywalls mostly fell on the doomsday side of the equation. About the same time that going pay was proclaimed as another sign of the imminent death of Old Media, some were poking fun at the new iPad as a big smartphone that no one would want to hold up to her ear. Time to chill on the whole doomsday storytelling — we’re all in for lots more twists and turns.

So if charging for digital access — a too long phrase, but one that’s most accurate than paywall — is neither a panacea nor a tombstone on the way to the inevitable, what is it? It’s a building block, and it’s a way to re-envision the business.

It’s about a major shift in strategy, says Star Tribune publisher Mike Klingensmith, whose paper went pay on Nov. 1.

“We’re changing the nature of the customer relationship,” he told me. “Instead of the website undermining pricing of your content, it supports the pricing of your content” — seizing on the profound difference the all-access revolution is beginning to make. Relationships don’t change overnight, and that’s one important lesson to draw here: If newspaper companies can do more than offer lip service about relationship and “membership,” they have the ability to recreate an updated version of the trusted, community-oriented relationship that the better dailies long held. If they can reinvent the relationship, they have a shot at transforming themselves (“The Newsonomics of Crossover“) as they move into the mostly digital era.

Let’s look at some of the metrics learned from the early pay period, in talking with a number of the business executives who have been at the forefront of this grand experiment.

The big bogeyman of digital ad loss

The first big question that’s been laid to rest is the journalistic corollary of the Hippocratic Oath: Do no (advertising) harm. Remember the big fear about “going pay”: Would a paywall decrease digital visitors so much as to harm theonly part of newspaper publishers’ businesses that’s growing, digital advertising? Metered models, like The New York Times’ (“At Almost 400,000 Digital Subscribers, Inside the New York Times Pay Strategy, Year 2″) and the Los Angeles Times’, are now the trade’s standard, having been advocated strongly by Press+ when it got rolling in 2009. Allowing 10-20 free articles a month has meant that traffic loss has been minimal; given the near-infinite amount of digital ad inventory, such traffic loss has had practically no effect on digital ad sales.

“All of the almost 300 publishers now using Press+ have kept their online ad revenues because we use data to make sure there is plenty of ad inventory to meet advertiser demand,” says co-founder Gordon Crovitz of Press+, which was acquired by RR Donnelley last year.

Even if some papers experience a small negative impact, new digital revenue quickly outpaces it. “In our first month of paid service, online subscription revenue was 3x the network advertising we lost because of the drop in pageviews, and our online subscription revenue has grown every month since,” says Andy Waters, general manager of the Columbia Daily Tribune in Missouri, which went pay on Dec. 1, 2010.

Pageview loss has ranged as high as 40 percent (at the Columbia Daily Tribune) and has typically run about 10-15 percent. Interestingly, from Minneapolis to Columbia to Hamburg, traffic often begins to grow markedly after the initial shock of a paywall. It may take months or a couple of years, but traffic is essentially reset and can then be rebuilt. Clearly, the most important readers — core readers who really use the news product through the week — have stayed the course.

The flipside of a tougher paywall is a higher signup rate, and more revenue, from those valuing the content.

Remove one major fear.

Selling more papers

One reason some papers went pay: Try to reduce the number of subscribers fleeing print. So far, there’s been a minimal impact on retaining subscribers, or “reducing churn,” as it is called in the business. The Memphis Commercial Appeal’s publisher Joe Pepe points to a 1 percent increase in Sunday home delivery, similar to what The New York Times has found. In Minneapolis, the Star Tribune has gotten 20 percent of its 15,000 “digital-only” subscribers to pony up an additional 29 cents (!) a week to get the Sunday Strib.

The Sunday sale is a major part of the how we see rolling out. At the Strib, it’s an inside-out, outside-in offer. If you only take the Sunday paper (subscribers who get two or more days of the paper delivered get free digital access), you’ll get a low, introductory rate to add digital access; if you’re a digital signup, you’ll be pitched on the 29-cent deal.

The L.A. Times is putting its own spin on the Sunday deal: pay 99 cents a week for the first four weeks (and $1.99 thereafter) to get free digital access and the Sunday paper. Want just free digital access only — that’ll cost $3.99 a week. You don’t have to be a coupon professional to figure out the better deal. The LAT approach mimics the NYT approach, which charges readers about $60 a year more if they refuse to take the Sunday paper. Maybe we should call it the Godfather offer.

How much will Sunday (“The Newsonomics of Sunday Paper/Tablet Subsciptions“) grow, given such pricing — which I expect more metros will adopt, given that they still have relatively weighty, ad-revenue-rich Sunday papers? The first job is to stop the Sunday bleeding, and if combined digital/Sunday products do it, consider it a tourniquet that publishers hope to get a couple of years out of, even as daily print circulation continues to decline. The Sunday angle — the Sunday paper angle — is a big one.

New money

While The New York Times is on a double-digit circulation (print + digital) revenue trajectory, other papers are having a hard time reaching that number. Columbia points to a 5-6 percent lift, enough to cover several newsroom positions for the small daily. Minneapolis points to a 3.75 percent lift, based on its new $1.5 million revenue stream, earned at $100 a year (or $2/week) from 15,000 digital subscribers. Others say the circulation revenue is flat to a little up.

One little secret of the trade: the opt-out. Build in higher pricing for combined print and digital access, and allow readers to take print only — if they affirmatively opt out. Eighty percent or so won’t opt out, and so we’ve seen high retention rates among newer subscribers.

The wild card here is how much the all-access offer — part of the changing customer relationship the Star Tribune’s Mike Klingensmith suggests — allows papers to price up their overall print/all-access subscriptions. He says the paper priced up its overall subscriptions 9 percent last spring, with little negative impact, the first time it had priced up in recent memory. Another increase is in order for this fall.

That’s the big key here, I think: If you tell customers “we’ll get you our content however, wherever you want it” — and deliver on that proposition with products that match the tablet and smartphone age — the creation of added value makes sense to readers. So it’s important to look beyond digital-only revenue itself, and look at the total reader-revenue-producing potential of smart pay plans.

As Gannett points to a goal of adding $100 million in new revenue, which would be a 10 percent circulation rev boost overall, look for as much of that to come from upward pricing in general as new digital-only subs themselves.

That said, it’s useful to pay attention to a new emerging metric: what percentage of a newspaper’s site unique visitors are signing up for digital access-only subs. The New York Times broke the 1 percent barrier last year, 390,000 subs compared to 33 million U.S. unique visitors. The Commercial Appeal is at .8 percent; The Star Tribune is at .25 percent with its four-month initiative. The Columbia Tribune is at .2 percent. It’s just one metric, but one that tells us about comparative traction. Though, it seems like a tiny number, it’s not. Fly-by traffic, supplied by Google and now Facebook, supplies so much traffic that about 3 percent of most newspaper sites’ unique visitors equal their paid print circulations. The digital-only conversion metric provides an apples-to-apples comparison, even as overall print/digital circulation impact remains key — and is measured in that old standby, dollars, euros, and pounds.

The goal here: Head to 50 percent of overall revenues being paid by readers.

These numbers are only a snapshot and come from some of the better practitioners of the digital pay craft. Many more are underachieving. The point is that there is an emerging playbook of how to get pay working right.

For now, let’s boil it down the how to 5 P’s:

• People: As in customers. Few newspapers — probably a dozen or fewer in the U.S. — know their combined print and digital audiences as a single audience. It takes a lot of technology moving to get a single, whole view of a customer, matching the subscriber database with the digital registration database to get a holistic view. Without that view, it’s tough to operate a modern, somewhat digital/somewhat print business — and maximize the value of new pay propositions. The New York Times, the Star Tribune, and the Commercial Appeal are among those who do, and papers as small as The Day are getting there.
• Product: This is a simple question of content. How much strong local coverage are readers missing after a half decade of staff cuts? The better a news organization covers its community, the more it can dare to charge and still get customer traction. Some papers may simply have already cut too much.
• Presentation: Consumers — us — understand the all-access pitch. News (and magazine) publishers have to make it real. That means real ready-for-the-tablet (and smartphone) products, app-based and HTML5. Replica-plus products will satisfy paying readers less and less over time — and won’t compete with Flipboard-esque experiences.
• Pricing: Enough said. Newspaper (and magazine) pricing has been fairly dumb over the years, a follow-the-leader, seat-of-the-pants exercise. Playing with the value equation, print and digital, requires both testing and matching of new value to new price.
• Promotion: More than just marketing, the new promotion makes better psychological sense of the all-access proposition to older and newer (and younger) customers.

So 5 P’s — or maybe more.

“You have to do eight things right,” says Gregor Waller, a former exec at Axel Springer and now CEO of Digital Age Consulting, who is in the midst of advising a number of major media globally on pay models. “It’s like a golf swing. If you miss out on one, you can’t hit the ball correctly.”

We live in two worlds.

In the afternoon, on our desktops or laptops, we read news like the new Pew study showing yet another way that newspapers are going to hell. This one was hardly news to anyone in the industry, but it put the issue plainly, if dryly:

A new study of advertising in news by the Pew Research Center’s Project for Excellence in Journalism finds that, currently, even the top news websites in the country have had little success getting advertisers from traditional platforms to move online. The digital advertising they do get appears to be standard ads that are available across many websites. And with only a handful of exceptions, the ads on news sites tend not to be targeted based on the interests of users, the strategy that many experts consider key to the future of digital revenue.

Pew’s report underscores the fact that many of us have written about: Digital advertising, once the little sister, is surpassing print (newspaper and magazines) in the U.S. and Europe, and will pass whatever we mean when we say “TV” by 2016 or so. So news companies’ failure to get a larger piece of the fastest-growing ad segment — perhaps the fastest-growing ever — is a big problem. And the problem is growing: Three years ago, the top five digital companies took 63 percent of U.S. digital ad revenue; this year, they’ll take 72 percent, eMarketer estimates. Those companies: Google, Yahoo, Facebook, Microsoft, and AOL. That 9 percent differential is worth about $3.5 billion a year. Yes, it’s getting worse, by so many standards, as we’ll continue to see over the next month as final 2011 financials come in and more jobs go away.

In the evening, though, on our oh-so-lean-back tablets, we can open up our au courant news apps and face a quite different reality.

Open up The Wall Street Journal tablet app this week, and you’ll find a garden’s delight of interactive ads. These ads grab the potential of the tablet and run with it — joyously. They move beyond what we’ve known as “advertising” and sprint into a new field of commercial conversation. These truly interactive ads are increasingly targeted to users, but more importantly they attract top-end advertisers, at good rates, into news products.

An early adopter of the iPad — the Journal’s launch date of April 3, 2010, slips easily off the tongue of Daniel Bernard, chief product officer of the Wall Street Journal Digital Network — the WSJ has a half-dozen or so cousins in early experimentation. Add The New York Times, The Guardian, NPR, the Financial Times, Reuters, AP, and a few others to that short list of news companies with two years of development experience under their belts.

It’s the Journal, though, that seems to be making the most headway with this next generation of ads. In fact, perusing the Journal tablet edition reminds me of the wonder many felt viewing that Wonderfactory-created SI demo a month before Steve Jobs launched the iPad.

Consider a few of those ads:

• Virginia is for (business) lovers: In touting its best-for-business credentials, the ad offers state-by-state comparisons, chosen by the reader, of five basic business rankings. Of course, the chosen stats are picked for their Virginia toutability, but the point is you have to interact. It’s supplemented by a five-minute video from the state’s governor.
• Putnam Perspectives puts info first: Putnam Investments gives you plenty of places to sign up, but before it does that it offers numerous gateways to free teaser content. Blog posts (“Looking for signs of life in European markets,” “Default worries overdone, states finding stability”) offer analysts’ takes, in addition to survey data, infographics, and more.
• Charles Schwab’s Windhaven portfolios of content: Tap into the Schwab ad and you get interactive charts, videos, and the reprint of an entire FT story on Windhaven.
• Liberty from disaster: What’s better for an insurance company like Liberty Mutual than threatening you with disaster (tornado, earthquake, flood) and then, by simply tilting your iPad see the damage magically disappear. It’s a gimmick, but it makes its point, and for now, the gimmickry is still new and begs to be tried.

These aren’t ads that simply take you away to separate brand page when you touch it. They offer more useful information, within the app.

They are the fruit of the Journal’s partnering with top agencies and advertisers to build applications that take advantage of the tablet, a partnering that has been “top of mind for us,” Bernard says, for at least a couple of years. They begin to understand what the target audience wants beyond being “sold.”

This is information-as-advertising, advertising as a gateway to connection beyond simple pitch and simple impression. Brands are important here, but their ability to tempt engagement is the key.

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

Of course, this new world of commercial swipes, taps, tilts and downloads is extremely measurable.  WSJ’s Bernard notes that each “event” — as our every touch of the tablet is called — can be recorded. Talk about metrics, data, and the emergence of conversion analytics. He notes that, at this point, “some advertisers ask for more event metrics, and some for less.” Interestingly, the Journal isn’t selling such high-touch ads on the basis of their effectiveness, although we can see models emerging as pay-per-touch, alongside pay-per-click and pay-per-action.  Rather, the Journal is making these ads part of its broader selling — some bundled with print and/or “online,” some not.

Bernard makes the point of how his product team — which serves both journalists and advertising staff — is focusing heavily on the tablet, given its unprecedented ability to get us to interact. He defines “mobile” and “tablet” separately for development purposes. The smartphone — with 257 million to be out there in America alone by 2016, according to Forrester — is a more elusive ad medium, its commercial potential so far under-realized. The tablet, though, with its print replacement + interaction abilities, offers game-changing selling and buying possibilities. For this interactive world, it’s beyond tilting and tapping — it’s time to shake, rattle, and roll the worlds of advertising.

So, yes, while the Pew survey accurately shows the sorry state of advertising readiness at many sites, the potential of harvesting the newest of news-heavy technologies offers the promise of a reprieve. Yes, news companies may have been slow to the parties of search, social, video, and mobile, and most have unfortunately taken a go-slow approach to the tablet — but platforms like the iPad offer a way out of the ad desert Pew paints.

In 2012, it’s still early, for both ad and editorial adoption of tablet benefits. “People are building toolkits,” he said. “They are experimenting. They’re making things easier to build.” If you are in the publishing business, are your people building toolkits, experimenting, and getting faster at time-to-market?

The ad interactivity we’re seeing is mostly app-based right now. HTML5 development for the iPad’s Safari browser is next up for the Journal. Various flavors of responsive design — allowing content to format more automatically for multiple devices, as The Boston Globe has done — are in the works. Ironically, on an average day we may see more touchable interactivity in ads than in editorial. Yet the editorial future of swiping and swooshing, now typically saved for special projects, is right in front of us. As Raju Narisetti, late of The Washington Post and now returned this week to the Journal, has put it: The next big change frontier in news is the integration of journalists and technologists. Incorporating the real interactivity of this newest medium into the daily workflow of the news trade is but in its infancy.

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

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?