The New Local

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.

Getting All-Access right — pricing, real tablet- and smartphone-appropriate apps, customer ease, giving subscribers cross-title benefits — is one of the biggest tasks for news and magazine publishers this year.

We can point to three major phenomena that profoundly changed the news landscape this year. Each offers up its own half-formed metrics for that magic formula in process, and each has dramatically changed the possibilities of news, each largely positive:

1) The transcendant transformative age of the tablet
2) The dawn of digital circulation
3) Social curation joins editorial curation:

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

The deep freeze in the U.S. newspaper market thawed a bit over the last couple of weeks. There really hasn’t been much of a market for metro newspapers for almost half a decade. With advertising revenue down now 21 quarters in a row, it’s near-impossible to fix a value on newspaper properties. For valuation, we’d need some high likelihood of stable profitability for the next several years, and that’s not in the cards. So what do we make of the three recently announced sales? In each case, there’s a strong, willful buyer, bucking conventional business sense to bull ahead into 2012.

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

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

The Piano experience isn’t about a little-heard-from place east of Vienna. It’s about scarcity. Bella says that Piano will launch in another neighboring country next month. He notes that there are 10 to 15 European countries with small populations and a smaller number of media outlets, an early sweet spot for the company. Small countries with less than two dozen media outlets, though, aren’t the story here.

The biggest takeaway for larger countries with larger publishers is the thought about scarcity. Round up a critical mass of newsy content and you may find a few percent of digital users willing to pay. Put aside nations of 50 or 300 million. Think about regions, combining newspaper, TV, and magazine companies. Think about certain kinds of topical content, which could be corralled into consumer packages (Epicurious + Mark Bittman + Top Chef Recipes?) that might make consumer sense.

“The metered model is simply a tactic,” says Gary Farrugia, publisher of The Day. “The database is the strategy.” That database was built by Daniel Williams, whom Farrugia hired a year ago from the New York Times Regional News Group, and it’s indeed the next step in the evolution of print-based, throw-it-on-the-driveway local newspaper company.

“It’s basic human psychology,” says Silas Lyons, editor of the Record Searchlight in Redding, Calif., VP of new media content and a co-chair of one of the Scripps’ task forces that pushed forward with the game dynamics idea. “We’re not trying to solve an audience problem — we’re trying to solve an engagement problem. The reader is being rewarded for consuming, sharing, commenting, and finding insight.”

In any city, the number of print journalists far outnumbers broadcasters, even though in America the daily reach of TV news is fairly close to that of newspapers. Too often broadcasters follow up on (and feed off) work begun by print journalists. (At worst, it is “rip and read”, driven by ratings, with far less of a balance of public service and profit.) Without that daily work in print, the whole ecosystem of news spins out of balance, as it has already begun to do.