News Corp/Dow Jones

So Thomson’s ascension is no surprise (“Nine Questions as Murdoch Splits The News Corp. Baby”). Sure, he’s an editor — but he’s a News Corp. editor, and has been for a decade. Robert Thomson has been well schooled in the College of Murdoch. He’s a strategic news executive with a good sense of how emerging editorial and business models mesh, or sometimes collide, in the digital age. Further in the U.S. and Australia, News Corp. has put innovative and strategic business leaders in place as Dow Jones and News Limited move forward — so he has a bench in place. In the U.K., the business questions are more profound, as are concerns about the economy and the deepening business model gloom of the U.K. press overall.

Why did The Daily fail? I think the short answer is that it missed the first law of media: Make it interesting. The Daily was attractive, even sometimes stunning, in its visual appeal, but too empty-headed to attract a daily readership. If you are going to call something The Daily, you better figure out how to make it a must-read, and that means differentiated content, a reason for you and me to stop reading something else and start reading The Daily. I called it (“The Newsonomics of Mr. Murdoch’s The Daily”) an attempt to create a USA Today for the tablet century, and it failed as that publication attempts its own renewal. Chalk it up as an expensive R & D lesson for News Corp, though its Wall Street Journal tablet learnings are far more to the point of its future. One other note: On business model, The Daily’s Demise reminds us that if far easier to launch a large digital/All-Access circulation business if you start with a print publication — and an installed base of paying customers — than from scratch. We can extrapolate a lot from that learning, but that’s for 2013.

The newsonomics of native, indigenous, and immigrant content promises a revenue evolution for both national publishers and regional ones. At a time when pricing pressure on display ads remains relentless — and even Google’s paid search rates have hit a bad patch, causing recent investor concern — this new commercial content offers a way forward to re-invigorate advertising.

Let’s start definitionally. Jay Lauf, Atlantic Media Co. vice president/group publisher and graduate of Wired (back into the days when it defined much of early Web lexicography), defines native content as content that “is native to the web.” It is “linkable, sharable, findable, able to be Facebook-liked and tweeted.” What it’s not: ad units.

I’ve highlighted just two data points: the number of journalists and the profit performance of four major news organizations in the spotlight. We see about 4,200 journalists employed among these four companies. One, the BBC, is an intentional nonprofit. Another, The Washington Post, is unprofitable in its publishing division. The New York Times is barely in the black. And the FT, though in better financial shape, may be the odd man out as its parent company re-strategizes its future. We can see how tenuous their business models are, given the profit numbers. They’re each in transition, each in a somewhat different place. Those transitions, though, are subject to many impacts, such planned and some not. Bottom line: There’s not a lot of room for error at even the world’s biggest news producers.

Is the conflating of Hackgate and this BBC scandal fair? We’ll see. Let’s be clear though. This one will quickly push Hackgate to the background. So, instead of the New York Times playing the white knight, aiding the Guardian in its disclosure of Hackgate, it now gets sucked into the scandal of the day, and may appear somehow involved, given Thompson now heading the company. Mark that fair or unfair, but it will be a reality.

The wind in this scandal’s sails is only getting stronger. Arthur Sulzberger has calculated that it will blow over. For the Times’ sake, let’s hope that’s true and that the blowback doesn’t push the Times’ off its corrected course (digital circulation to the rescue!), just as it is finding a new route to sustainability.

For the Times, though, it’s not a foreign scandal. It’s a scandal, like Superstorm Sandy, that will arrive on its doorstep Monday morning.

Today, Mark Thompson isn’t the head of the Times. Today, the Times has the ability to sidestep the storm. Today, the Times has the ability to move forward, building on what’s been a very good 2012. Yet, the only way to do is for Mark Thompson to announce that despite his full confidence that he will be cleared of any wrongdoing, the inevitable public questioning of his role — in Parliament and beyond — makes it impossible for him to proceed with his new post.

Tribune’s own market assessment of all its eight newspaper properties, part of the bankruptcy proceeding, came in at $623 million, compared to $2.85 billion for the broadcast business. Without competitive bidders, that amount may be optimistic. With competitive bidders — especially in L.A. and Chicago — it may be low. For round numbers, let’s say a competitive bidding process prices the Chicago Tribune and L.A. Times at a combined $600 million. That’s a pricey number given the cash flows of the two papers, especially given that those meager cash flows have only been achieved with continuous cost-cutting. It’s an above-market price, and the owners would need a heedless-to-market buyer to pay it.

Enter Rupert Murdoch. He won his prized Wall Street Journal and Dow Jones from the Bancroft family. He paid $5.6 billion, and then wrote down about half that value within a couple of years. He knew he was overpaying — but it was what he needed to do to get what he wanted.

So, first question: Can Murdoch buy these papers?

Well, he’s got the money and control of News Corp., even if investors have been making increasing fuss over that family control. The company should end the year with cash of something less than $9 billion after it completes planned Foxtel TV acquisitions in Australia.

There is the little matter that News Corp. is in the process of splitting in two. Pressured both by Hackgate and those restless investors tired of the drag the newspaper holdings were having on profits, Rupert agreed to split News Corp. into two companies, one essentially TV- and entertainment-oriented and one largely newspapers. That split, though, isn’t scheduled until roughly mid-2013.

The Tribune properties will come on to the market earlier, probably around the beginning of the year. So pre-division, how exactly does Rupert take about five percent of his remaining cash to put it into the old business? You can bet News Corp. finance people are readying that analysis and argument.

This has been the year of global expansion for the world’s biggest news companies. The Wall Street Journal launched its Deutschland digital edition in January, and Alisa Bowen, WSJ’s head of product, tells me additional international expansion, along with video, is a top 2013 priority. The Financial Times, which had retrenched from non-English language initiatives a number of years ago, just launched a new Latin American homepage on FT.com and rolled out a new mobile app for the region, while initiating “digital printing” through HP. Reuters and Bloomberg have both also upped their presence in the market. For the Times, the Brazil edition follows on its China edition launch in June. (For more on this developing phenomenon, see “The Newsonomics of Global Media Imperative.”

It is the early success of that Chinese edition that is serving as a model for the Times’ new global push, says Sulzberger. “In just the first 90 days, we reached the traffic goal that we hoped to achieve by spring 2013,” Sulzberger said.

Circulation has turned from a means (getting ad-rich papers to shoppers) to an end unto itself, actually getting readers to pay a significant share of the journalism costs. It’s a simple proposition: You ask the people who really value you and your journalism to pay you more. Surprisingly to some, it looks like many of us are willing to. Why didn’t we think of this earlier, before the carnage of cuts overwhelmed the profession? Call it a brew of misunderstanding the digital transition, of timidity, of Steve Jobs’ iRevolutions…and of desperation. As Disraeli put it, “Desperation is sometimes as powerful an inspirer as genius.”

Remember the first time you got cross-platform delight?

For me, it was when I started a second look at “Lost in Translation” on my TV, happened to click on my Netflix app while working out the next day, and was astounded to see the film paused precisely and ready to start where I’d left off, at the literal single touch of a finger. Pandora is a similar wonder: Create an Adele/Tom Waits station on the web and it’s instantly available on the iPhone. Start with Comcast’s Xfinity app on the iPad and, with a touch, you can record tonight’s baseball game or launch a series recording of “Homeland.”….In truth, news — and its steady, unending stream — is harder to tame than finite movies, songs, and TV programs. Yet consumer appetite — and now that pesky expectation — has been whetted by those near-miraculous entertainment plays. Tell readers that all-access is the new name of their subscription, as many hundreds of publishers are doing, and they’ll soon think it should be as smooth as their entertainment device switching. Get it right, if you are a news publisher, and you’ll reap the dividends.