What’s your signature content?

Quick: If somebody buttonholed you in an elevator, a school play, or a bar, and said, “Why should I pay you for that?” — what do you tell them?

Each passing week, it seems we’re further into the age of signature content. That only makes sense: If the death of distance is now old news, if everything is available everywhere at the touch of button or the swipe of a finger, then what makes any news or entertainment brand stand out amid this plague of plenty?

Closed systems — from three or four TV networks to less than a dozen big movie studios to a half-dozen major magazine publishers to geographically dominant newspapers — made signature content less important. Sure, big shows and big names have always driven media to some extent, but now, media without big names or big shows are going to get lost in the ether. Take Hulu’s announcement last week about Hulu Originals. You do have to wonder if Hulu’s fictional 13-episode “Battleground,” about a dysfunctional political campaign, will be bested by the Republican reality show in progress when the show debuts next month. Hulu is also bringing a Morgan Spurlock series for a second run, and probably will feature one other new program. The Hulu announcement joins Netflix’s own foray into signature content. Three years ago, would the thought of Netflix signing up Little Steven to do an original comedy series have crossed anyone’s imagination?

Hulu and Netflix both need to distinguish themselves in the market — not only from each other, but from Comcast, DirecTV, and Time Warner, among others. They need to buy protection as supposed masses consider cutting the cord on packaged services, Roku-ing and Apple-enabling Internet video onto their living-room screens. In movies and TV, we’re quickly morphing from a world of news and entertainment anywhere — get all of these things, somewhat haphazardly (Comcast Xfinity, for instance) on all of our devices — to one in which consumers ask, “What special do you have for me, in addition to my all access? Yes, All-Access, the cool feature of 2011, will quickly graduate from a wow to an expectation.

Why as consumers should we pay $7.99 (down from an initial $9.99) to Hulu Plus, when the same stuff (kinda sorta) is available through Boxee, or Apple TV, or Netflix, if I can find it? Why am I paying $7.99 a month (apparently the magic price of the moment) to Netflix for a catalog of films that is both voluminous and too often lacking what I want? Consumers are going to be asking that question a lot more.

Publishers, distributors, aggregators, and networks all want more money, and they’ve seen — courtesy of tablets and All-Access — that consumers are now more ready to pay for digital content than ever before.

Forget “content wants to be free.” Now content wants a fee. And everyone from Time Inc to The New York Times to the Memphis Commercial Appeal to Hulu’s co-owners (Fox, Disney, and Comcast) see gold. They see another digital revenue stream, in addition to advertising or to cable subscription fees. Yet they are increasingly believing they’ve got to up the ante (and Hulu is raising new funds to buy original programming) to compete and to win those consumer dollars.

News companies — at least one in ten U.S. daily newspapers and many consumer magazines — are rapidly embracing digital circulation revenue and All-Access. Yet results have been quite uneven. That makes sense: Consumers will pay for digital news, feature, and entertainment content, but they don’t want to overpay, and they’ll increasingly be forced to make choices. Buy this; let that go.

Let’s be clear. Paid media is paid media, and the original-programming pushes of the video companies have great meaning for news and magazine companies, global to local. For them, the calculus is similar. News and magazine brands can launch new products, though that’s out-of-their-DNA-tough for many. So they’ve focused primarily on sub-brands, many of which are people. These are the faces of news and magazines; many of these have become hot commodities over the last several years (“The Newsonomics of Journalistic Star Power“) as companies try to distinguish themselves — and give readers and viewers a reason to pick them out of the crowd.

How, though, can media companies afford to pay a premium for branded, promotable talent, talent that may open consumers’ pocketbooks? That’s easy: spend less on other content. So we’ve got the rise of user-generated content, obtainable free or cheap, and all kinds of new syndicate action from Demand Media to startup Ebyline (and maybe NewsRight), all trying to make it cheap and easy to get more medium- and higher-quality content more cheaply. What’s old is new again — as a young features editor, I got regular visits from syndicate and wire salesman, ranging from high-quality to the Copley News Service, that sold its stuff by the pound.

Another prominent model no news or magazine company can afford to ignore: The Huffington Post. Back to the early days when Betsy Morgan first teamed up with Arianna, HuffPost has worked this evolving content pyramid. At the top, a few highly paid site faces, many opinionated faces (some paid, most not), and then low-cost aggregation, much of it AP, headlined with the site’s recognizable swagger.

Then, of course, there’s the old standby: staff cutting. We’ve seen lots of staff cutting. In fact, these days, while we see some announcements like Media General’s big Tampa cut, most of the bloodletting is less public, but no less real. If you need to pay more to stars, and ad revenues are still declining, staff cuts of less than premium content (and those that produce it) make economic sense (“The Newsonomics of the New News Cost Pyramid“). It’s the new news math.

These newsonomics of signature content are getting clearer. Netflix is planning to spend 5 percent of its expenses — or $100 million a year — on original, Netflix-defining content. Hulu is spending about a quarter what Netflix’s total, or $500 million in total, on all content licensing this year. We don’t know how much of that is for original content, but observers believe “Battleground” will cost $15-20 million for its 13 episodes. With its other forays, it will probably spend closer to 10 percent of its content budget on original content.

Curiously, many newspaper newsrooms constitute only 10-20 percent of the overall expenses of a daily newspaper company. So we’re starting to see some new, and old, arithmetic play out here.

Simply, Andy Forssell, Hulu’s SVP of content, explained the cost/benefit ratio to Variety: “…having an original scripted series that hasn’t been seen anywhere else yet is considered the best tool for standing out with either advertisers or viewers.”

As usual, we see the bifurcation of the bigger national brands — those with more audience to gain and more money to spend — and local news brands. While many local newspapers have cut to the bone, with too much of the tissue in the form of experienced, name-brand metro and sports columnists cajoled or drummed into “early retirement,” we see increased branding of stars at places like Time, The New York Times, Fox News, and ESPN. The sports network may be the classic business model of our age, and in its anchors and top analysts — many initially lured from daily newspapers — it has shown the way for many years now.

At the Times, consider business editor Larry Ingrassia’s build-up of business columnists, from veterans Gretchen Morgenson and Floyd Norris to new(er)bies Andrew Ross Sorkin, Brian Stelter, David Carr, Ron Lieber, and David Pogue. And the Times more recently picked up James Stewart from archrival Dow Jones.

At Fox News, Roger Ailes has cannily built the most successful cable news operation not on the interchangeable blondes that provide so much fodder for Jon Stewart and Stephen Colbert, but on O’Reilly and Hannity.

At NBC, the news franchise is so built around Brian Williams that his well-received newsmagazine “Rock Center with Brian Williams” is synonymous with its host.

At Time Warner’s CNN and Time, we see the building of a worldly franchise on Fareed Zakaria’s clear-eyed, no-nonsense view of our times.

And then there’s the more local and regional press. Newspapers have long believed that it wasn’t any one or a half-dozen names that sold the paper. They’ve believed the news itself was the star, and the daily information report was the brand. That may be still be true of the Times, the Journal, the Financial Times, the Guardian, and a handful of other national/global news organizations — all of which have substantial, multi-hundred newsrooms that produce branded, unique products. It’s less true of regional and local dailies, many of which still present too much commoditized news in national, business, entertainment, and sports coverage, and have bid goodbye to many faces familiar to readers. Those that have retained familiar faces must do what they can to keep them; all need to recruiting more.

Then they may have a good answer to the question, in one form or another, consumers and advertisers will increasingly ask: What’s your signature content?

2. Didn’t CNN’s coverage of the Iowa Caucuses illustrate our screens future? John King has been the King of the Screens, and we can remember when his magic-touch screen seemed wildly innovative. Now in the touch-screen era, it was all screens all night — save Wolf Blitzer’s classic utterance of “OMG” in seeing Romney go up by a single vote — and CNN newbie Erin Burnett brought the right slapstick spirit to the uncertain screencraft. She whooshed one image off one screen on to the next one, sometimes successfully. CNN’s use of data, even as limited as it was for this election, showed how much we’ve moved beyond the world of still print infographics. The marriage of analytics and screens from tablets to livingroom monitors is forever changing how we take in information.

3. If AOL crumbles in one direction or another, what’s the future for smart cookie Arianna Huffington, who has parlayed personality and business model into an enviable perch in American journalism? Who might pick up HuffPo, one of the easiest-to-define business lines in journalism? How much will its relatively low rate of ad return (“The Newsonomics of ARPU” deter buyers? With the emergence of a broad international strategy (10 new editions) – “We’re now re-expanding back into a list of countries”, said CEO Tim Armstrong Tuesday – it becomes a more interesting play.

4. With Alibaba hot on the Yahoo tail, how much should we wonder about the future of big aggregators stocking up on a professional journalists? AJR estimated that Yahoo has hired about 200 journalists and AOL 250 (not counting the Patchers). Those hundreds have produced some pretty good journalism, particularly with sports scoops, and have proven that the term “as first reported by Yahoo,” isn’t a joke. The question of Chinese ownership is a knotty one (interesting Fortune take on American hypocrisy, here), but we have to ask questions about how free a journalistic corps would be under Jack Ma leadership. It might be well and good to uncover U.S. football corruption, and that’s a growth sport itself, but what about wider public policy coverage? For AOL journalists, the questions are even gauzier. With AOL’s deepening financial questions and investor pressure to cut back on non-profit-producing business lines, how long will there jobs be maintained, under current or potential new management/ownership?

5. Won’t be 2012 be the age of All-Access perfecting? Time Inc is among those getting its tablet act together well, with Time Magazine a fairly slick tablet app. In December, the company made a foray at convincing print subscribers that connecting the print sub with digital access is a good idea. The sign-on process is fairly straightforward, and seems to hold session to session, unlike some others. Yet, subscribing to more than one Time Inc. product — Time Magazine and Sunset, for instance — has to be done twice. Expect that kind of obstacle to be eliminated going forward. All-Access will be real all access, made easier for consumers. And All-Access is even trickling down very local as the Monterey (Ca.) County Weekly heralds its all-access availability through public radio sponsorship. Getting All-Access right — pricing, real tablet- and smartphone-appropriate apps, customer ease, giving subscribers cross-title benefits — is one of the biggest tasks for news and magazine publishers this year.

6. How could a single person be empowered to send a message on behalf of the New York Times to eight million people? The Times’ your subscription-is-ending embarrassment email showed the company at its worst in detecting and handling a crisis. My larger question is how, in any scenario, a single person has the unchecked power to send a message to eight million people on behalf of a big brand? The culture of checking and doublechecking (yes, the sorry Judith Miller tragedy aside) is so deeply ingrained in Times’ DNA. Why isn’t it part of the wider culture, especially in the one-click age?

7. What’s more local than language? The Times profiled Wordnik Sunday. It’s an innovative modern language company making the most of digital technology to surface new and real meaning of our living language in this fast-changing age. Noted in the story is that the Times and News Corp’s Smart Money are using Wordnik for glossaries? As local media look for ways to really be more local, knowing and presenting more about place is essential. So what about using something like Wordnik to create local language guides? It’s a small idea, perhaps, but one showing how even local media need to make more use of digital tools if they are to make future claims of relevance to local audiences.

8.Hasn’t Gail Collins turned out to be a just-right-for-the-times replacement for Frank Rich? Rich’s rich prose and panoramic view often left us breathless in its sweep, and well deserved a Pulitzer. Yet Collins — a New Yorker who recently pointed out that “John McCain came in fourth in 2008, with the support of 15,500 Iowans. This is approximately the number of people who live on my block” – has brought a Hee-Haw sensibility perfectly suited to the Wonderlandia of the Republican primary scene.

9. With a call-out to Ken Kesey, isn’t 2012 the year when you’re either on the cloud … of off it?

There’s an algorithm out there, we can be sure. It’s got all the components of business success for news-creating companies, each value carefully computed and relational to the others. Yet, approaching 2012, the algorithm hasn’t been found. We have but shreds of numbers, beacons of numerals that portend models, but can’t prove them out.

2011 has been a remarkable year. We can point to three major phenomena that profoundly changed the news landscape this year. Each offers up its own half-formed metrics for that magic formula in process, and each has dramatically changed the possibilities of news, each largely positive:

• The transcendant transformative age of the tablet: The first real replacement device for print swept aside doubters, netbooks, and much conventional wisdom before its second birthday. More than one in 10 American adults owns one, with that number likely to more than double in the next two years. Those owners are readers, spending lots of time with news, single brands, and longer stories.  (“The Newsonomics of the Missing Link“)
• The dawn of digital circulation: Forget “paid content.” Forget “paywalls.” It’s the back-to-the future age of circulation: paying for news and magazines that we depend on, no matter how they are delivered to us. All-Access reinforces our relationship with news and magazine brands we like; ubiquitous access (print, online, tablet, smartphone, soon connected TV) allows us to justify paying for convenience as much as the content itself. Publishers are still experimenting with how to get the paid proposition right, but those that do now have a potent second digital revenue source — and that’s a business advantage digital-only competitors lack.
• Social curation joins editorial curation: We knew that Facebook, in particular, and “social” more generally — including Twitter, LinkedIn, most-emailed lists and our own individual sharings — were changing how we all decided what to read. Now, though, social curation is being built into the best publishing models. Why should each of our own personal quests be a virgin start-from-scratch idea when many consumers/searchers/researchers/shoppers (some of them people like us) have tread there before? So social intelligence, gleaned from mountains of data, is becoming a required part of the companies’ product development and consumer experience. Facebook is in the catbird’s seat as that world develops.

Those three game-changing phenomena offer major drivers of change — but not models. For publishers, the near-term is just getting harder and harder; witness Media General’s major cuts of this week in Tampa (16 percent workforce reduction) and elsewhere. Major cuts are happening this month and into January, as publishers gird for another 5-12 percent decline in ad revenues. Continuing profitability can only be achieved by cutting.

Publishers, publicly or not, are embracing the Digital First mantra of John Paton and Clark Gilbert, the industry’s dynamic duo, who put on another show at BIA/Kelsey this week. Everyone’s into the deconstruction/reconstruction of their companies; some are faster, more adroit, and more public about it.

As that reconstruction moves forward, the new magic formula may seem simple: reconfigure costs and revenues. Yet, working the in-between — most publishers still depend on print for 80 percent of their revenues — is hardly formulaic. Building the new cost structure and the new revenue structure, in tandem, with changing audiences and advertising spending habits, is the fixing-the-moving-car-at-65 MPH scenario publishers face.

With that speeding car in mind, let’s look at some of the numbers that will go into that magic formula, when it’s finally perfected. Mix, match, blend, and extrapolate:

5-15 percent: That’s the percentage of many news sites monthly unique visitors that drive half or more of their pageviews. That’s a jaw-dropping number, and one that news companies are just beginning to acknowledge — privately. Why be quiet about it? Look at the annual reports and quarterly financial disclosures of the public companies; they trumpet uniques and pageviews. Yet in the age of news ubiquity, we’ve reached near-infinity in pageviews and of ad inventory. Is there much meaning left to one random web visitor hitting one random web page, courtesy of Google or Facebook, some time in any given month? Not much. Yet, that’s what most people still point to publicly. Privately, the question is the 5-15 percent. These are your customers. How much will they pay for access? How much more valuable are they to targeting advertisers, given you know much more about their reading and shopping habits? The metric needed: How much does a core customer yield annually, and in a lifetime? Then: How do I most efficiently find and convert more of them?

35 percent: That’s the percentage of print readers who will transition to tablet-only by 2014, believes one prominent news company, which is using that forecast in its business planning. High? Low? What’s your number?

$544 a year: That’s a Newspaper Association of America number (from 2009) for the revenue value per unit of Sunday circulation. What will a tablet customer be worth, combining subscriber and ad value? Get that answer right and you can try to accelerate, or slow down, your readers’ embrace of the tablet.

10-20 percent: That’s how much of national news company traffic now comes from mobile; Facebook already says that 35 percent of its use comes from mobile. Yet, in the U.S., only three percent of digital revenue comes from mobile. That’s a huge gap — the audience is way ahead of the money — and it will be closed over the next several years. In fact, in the age of expected anywhere access, “mobile” will disappear as a category. Big issues for publishers: dividing what kinds of revenues can be wrung from tablet (now lumped into “mobile”) and from the brain extensions in our pockets and pocketbooks, the smartphone.

One billion: That’s one estimate of how many smartphones will be shipped worldwide in 2016. It’s a continuing curve upward from the almost half-billion shipped this year. U.S. smartphone penetration is about a third of cellphone owners; so there is lots of headroom for growth. (Singapore’s the first to cross the 50 percent threshold.) Big challenge for news and magazine companies: coming to terms with how to make money on that little screen: advertising, sponsorship, All-Access subs, and more.

63 million: That’s the number of smart TVs that will be shipped in 2011, up from 43.6 million in 2010. 2016 forecast: 153 million. Smart TV is just the next screen, joining the tablet and the smartphone, providing us ubiquity. When WSJ Live (“The Newsonomics of WSJ Live“) — the company’s model-breaking tablet product launched this fall — it included launch partners Samsung and Vizio, leading smart TV makers. This is the beginning of the next wave.

$2.75: That’s the average ad CPM, or cost-per-thousand rate gotten, at one top 15 news sites. Average rates have been going down and are likely to continue doing so. High-targeted and high-branded (combine the two, and you’ve got the best of both worlds) audiences continue to outpace average sites and average inventory. It’s less and less good to be average.

22 percent: That’s the third-quarter increase in U.S. digital ad revenue. Digital ad growth accelerates as print declines more rapidly; in the U.S., it is now surpassing newspapers to become second only to TV. Worldwide, expect the industry to hit $80 billion this year. Within that ad spend, publishers have access to less than half: Paid search continues to be about half the market, with publishers getting only a tiny slice of it. Display/banner ads — publishers’ strongest suit — account for 23 percent of the total. Video is growing 42 percent a year. Performance-based business models (as opposed to selling impressions) now command 64 percent of the market. (Most data from IAB.) So, in all the areas of growth, news and magazine publishers are weakest. Despite uneven digital ad results reported by newspaper and magazine companies, it’s not that the money isn’t there — they just haven’t transitioned their businesses enough to compete for it.

$13 billion: That’s the amount of retail ad revenue the newspaper industry in the U.S. took in for all of 2010, and it’s down this year. Retail makes up roughly half of all newspaper companies’ ad revenue. In a new, circle-the-wagons attempt to hold on to it, ShopCo, a consortium of eight of the large newspaper companies, is building out a new local shopping portal. FindnSave, tested first by McClatchy, should be up in 250 larger markets by the middle of next year. Will it be good enough and big enough, to satisfy both consumers and merchants? (“The Newsonomics of Google’s retail push“)

25 percent: So if a reader drops print and embraces the tablet, and digital access overall, how much savings can a news company achieve? It no longer has to print and deliver a paper, but it still has the costs of maintaining a staff, maintaining distribution, and maintaining a plant. So maybe it costs 25 percent less to fulfill that customer’s access? In this long interim with hybrid digital and print reading, how much of their production costs can companies cut out? The long-term question: At what point can the news industry make a major shift, as most reading becomes digital and a minority of it in print?

56.7 percent: That’s the percentage of downloaders of the Guardian’s new Facebook app who are under 24, with 16.7 percent 17 or younger. For a news industry decrying the lack of young readers and focused on aging baby boomers as the core audience, the Guardian’s early experience is phenomenal. It’s well and good to sell All-Access to long-time print readers; it’s essential to bring in new ones, and Facebook looks like a great bet.

7: Daily means seven days a week for newspapers, right? MediaNews is dropping Monday printing at some Northern California papers. Michigan remains the epicenter of the non-daily daily. Following the 2009 cuts in metro Detroit, Advance is now going digital-first with smaller papers there, with several becoming three- and four-day print “dailies.” The idea: keep 85 percent of print ad money and radically reduce print costs. Publishers take a very deep breath and hope they aren’t cutting the print cord too soon. Expect to see more of such day cuts in 2012 and beyond. It’s a hybrid strategy, and as we see its impacts — on print ad revenue and on digital reader and ad transition — we’ll have new numbers to plug into the model.

> 1 percent: Google now makes 54 percent of its revenue outside the U.S., as does Apple. Such international orientation is a major differentiator in the economy of the day, and not in the publishing and digital industries. Even The New York Times, with impressive global reach, gets only a percent or two of its revenue internationally. In the last year, we’ve seen The Independent (through Press+) selling U.S. access, PBS launching a British channel, and the Guardian relaunching an American foray. Digital media knows no national bounds, but monetizing outside home countries has been difficult. Breaking through this barrier could create significant upside for top publishers.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Ask most publishers or editors about games, and they’ll tell you their business isn’t about fun and games. It’s about the serious, semi-Constitutional role of informing the public.

Game dynamics may change that thinking.

When we think of games these days, our minds move to enraged birds or fortune-seeking farmers. We think of the little games now app’d onto our smartphones, a diversion, something trivial. But think of the playable game — the fun — as the hood ornament. The business of game dynamics — or gamification — is what happens under the hood.

Game dynamics isn’t about time-wasting. Au contraire: it’s about a seductive, powerful drawing-in of human habit. It’s about changing those habits, leading us to do new things (over and over again). This being America, those habits increasingly have a lot to do with selling stuff, with commerce. On the Internet, they increasingly help companies chase greater engagement with customers, be they buyers, readers, or both.

Silas Lyons is a pioneer among newspaper people in understanding the potential value of game dynamics to the news business. “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.”

Lyons explained the new notions to readers, in a column, entitled “Civilization comes to Redding.com.”

The goal here isn’t simply to build core customers. It’s to bring greater civility and perspective — what Lyons calls “insight” — to the site. Readers now can mark others’ comments as “insightful,” resulting, over time, in higher ranking of commenters the community seems to value. You gotta love it, at this time and place in America: Let’s play civilization.

The Redding Record Searchlight (circulation of 25,000 on Sunday, 22,500 daily, and more than a half million unique visitors monthly) is an E.W. Scripps newspaper located in northern California, about 200 miles north of San Francisco. It’s far from big media markets and a paper of record for its far-flung geography. In print, it’s long been a little center of civilization, a community center. Online, it hasn’t, like most newspaper websites. The new initiative, partnered with gamification pioneer Bunchball, is an effort to apply old values on the new medium.

Take a look at the two-week-old new features page on Redding.com. Readers are invited to check it out with an invitation at the top of the home page: “Redding.com now recognizes users who contribute to the community. Explore the new features“.

It is prize- and recognition-based. “Badges recognize you for being a valued member of our local news community”. They can earn points a number of ways, including viewing stories or photos, sharing news on Facebook or Twitter, or commenting on a story. The more you participate, the more points you earn. Your points build on your profile page — your own place on the site, your “trophy case” — and allow you to compete for placement on Redding.com’s leaderboard.

Overall, the two- to three-week-old metrics are promising. Registration is up 35 percent and comments are up 19 percent. 7,600 users are in the game. (Redding.com’s top user has toted up 8,800 points already; profile here.) 16,200 comments have been rated “insightful.”

“We’re seeing some very strong movement in engagement — users commenting, marking other comments insightful, sharing our content, registering, opting in to email products and news alerts,” Lyons told me this week. “If these trends hold up, they give us a very strong foundation on which to build. The key to making this work so far, and potentially to building it out in the future, has been the Scripps development and user experience teams. They’ve been working deep in the code and templates so that the game dynamics are tightly intertwined with the full experience on the site, and they’ve created something that relies on our technology partner, but is really unique. It doesn’t feel bolted on, because it’s not. Strategically, that’s where we want to be.”

In addition to the civilizing effort, what are the newsonomics of game dynamics? More page views and greater audience data-for-targeting for advertisers, for starters. Engaged core customers who really make Redding.com a starting point, a center of their digital lives will be a great market to serve anything from daily deals to special services to new products, and possibly to charge for digital access (as Redding watches Scripps’ digital circulation initiative soon to be tested in Memphis.)

The Redding experiment is an intriguing one and good start. It forces us all to think about what community, community engagement and civil behavior should be in this digital age. Redding.com is emphasizing commenting out of the chute. That may be worthwhile — it’s high-minded to hope that insight can be rewarded — and we’ll watch eagerly to see how it succeeds.

But commenting, I think, is at best the tip of iceberg here. We really want to greatly re-engage local readers in community, engagement far beyond what was ever possible in print. That print newspaper was a wonderful community water cooler — with 50-percent-plus household penetration — but it was tough for readers to go beyond discussion.

Now we have the tools to do that. So let’s start to think about the kinds of additional engagement that game dynamics could incent, re-enforce and help build. We’re five years into thinking of readers (courtesy of Jay Rosen) as the people formerly known as the audience. Readers are a lot more than audience these days, but can we use habit-forming incentives to create new pro-news behaviors? For instance, what if news companies provided a wider array of incentives for help in:

• Crowdsourcing: Occasional news tips are great. What if community tipsters got points?
• City guide population: MediaNews’ new TapIn Bay Area tablet product is big into points as well, as it seeks to have readers help it build its next-generation city guide product. Newspapers have something of value to offer those who help populate city guides that Yelp doesn’t: digital (and/or print) subscription discounts, better daily deals and ad discounts for merchant contributors.
• Blog writing: Gamification can support pro-am community blogger outreach. “Pay” ongoing contributors with points.
• Buying stuff: Why not earn points by buying stuff from advertisers? It’s co-op, game-inflected capitalism for the 21st Century.
• Data crunching, visualizations: The Guardian and The New York Times, among others, are open-sourcing more of their code, inviting wider collaboration. Why not incent this behavior as well?
• Design: Build a better site section, a better app or a cool new product. Give major points — major benefits — to those who make major contributions.

For one great example of applying incentive techniques to business building, check out WSJ’s Andy Jordan’s Tech Journal video segment, “From Web Surfer to Successful Inventor.” It tells the story of New York invention start-up Quirky, “a social product development company,” a great tale unto itself. But catch this quote from Quirky’s 24-year-old CEO Ben Kaufman: “For literally centuries, it’s been really, really hard to make stuff. You needed access to capital. You needed to know the right people. You needed to be multi-disciplinary between design, engineering, manufacturing and retail, and you needed all these things to push one new product out into the world. We’re just not okay with that.”

So Quirky uses its widening community to refine dozens of products in invention. It incents contributors with something we all understand — money — and shows their small, but growing, receipts (based on the value they add to the products) in real-time on a website.

Creating new physical goods is in many ways harder, and different, than new digital news goods, but the thinking is immediately applicable. Are the rewards points, or badges, or money, or community standing? We don’t know yet, but there’s clearly a new ability to value readers — and for readers to value news/community centers.

That belief is increasingly shared. Scripps, along with MediaNews’ TapIn, is one of the leading-edge experiments here. Hearst and Morris are testing out gamification. Even The Economist tells me it is looking at testing game dynamics over the next year.

These game techniques are beginning to pervade our lives. They are used by media more widely, and by merchants of all kinds. Mike Earhart is vice president for marketing at Silicon Valley-based Bunchball, Scripps’ technology partner. The 40-employee company was into games “too early,” he says, before mobile ignited casual gaming. So it turned to helping established companies use game techniques. It counts 125 million unique visitors through its products, with those visitors executing 2.3 million “actions” a month.

Bunchball has worked with NBC (“The Office”), Bravo (“Top Chef”), Meredith National Media Group, and Wendy’s among others. Using game dynamics to jumpstart new business strategies may seem like a stretch — initially — for both marketers and media. Yet, says Earhart, it boils down to using the new techniques to answer an age-old question: “What are you trying to get your users to do?”

Here’s my take, below, and a link to others’ takes:

MEDIA isn’t what it used to be. We used to be able to think of TV news, radio news, and newspaper news distinctly. Digital media is rapidly blurring these long-established boundaries. We need to think about video, audio and text (not TV, radio and newsprint) because it is clear that the journalism-producing companies of 2015 must be proficient in producing all of them. That is a work in progress, as newspaper companies climb the curve of creating video and TV company personnel struggle with the daily art of writing for the page, not for broadcast.

More immediately, the diminishment of the print press is a great cause for concern. Why? It is not the words—the text, to which we can not be married—it is the thinking; the analysis; the time; the resources; the usually strong tradition of resisting advertiser pressure on what we write, and what we do not write. It is the willingness to take on investigations that take time and aren’t sexy. The press has a different, long-established culture to commercial television and radio, even as the business of TV and radio are changing quickly in the digital age. Changing technologies, business models and devices are one thing, harder-to-define culture is quite another, and the best of the press culture, updated for the digital age, must be maintained.

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.

Finally, while print-based operations are flagging, commercial TV and radio broadcasters can only argue that they are doing better by comparison. Their businesses are more flat than growing, threatened also by changes in audience and advertising behaviour. They have no guaranteed future either. Diminishment of the old is the order of the day; more reason to get on with building the new, the right way.