Content Bridges

What's the Boston Globe Worth? A Buck, More or Less

The New York Times' David Carr asked six analysts one of the questions of the moment: just how much is the Boston Globe worth?

I liked how Fitch's Mike Simonton suggested that "buyer" may be a misnomer; "assumer of costs" might be truer.

Carr also reminds us that Jack Welch's indicated that he might be willing to round up some $500 million or so to buy the Globe just three years ago. 2006, though, now seems like another lifetime in the newspaper industry. How the Times could have used that kind of money to do battle with Rupert.

So, this week, as we try to separate the potential buyers from those who may just delight at seeing those books (how much of the $85 million in annual Globe "loss" is operating loss and how much "other"?, for instance), I'll amplify on my remarks to Carr.

Given the state of the world, the ad market, the newspaper market and vagaries of the online future, my best guesstimate of a price: a buck.

A buck essentially represents a gentleman’s agreement: I take a liability, headache and a distraction off your hands, says the buyer. I give you the great potential of the Globe brand, a top 25 news web site and improved ability to re-jigger the pieces, thanks to our new contracts and cost-cutting, says the Times.

A buck recognizes that there is so much unknown and such unchartable risk and reward here that only a token payment can even it out for both sides.

The Times gets shortchanged. It paid $1.1 billion for the paper just 16 years ago. It’s struggled to keep the Globe staffed through bad economic times. It’s subsidized losses. 

The new owner takes on great risk. It's highly unlikely any bank will finance a purchase, given the half-dozen bankruptcies we've seen over the last year in the industry. That means the new owner’s own money is immediately at risk. The new owner starts out behind, even with recent contract givebacks, given the trajectory of operating loss and a continuing 30% decline in year-over-year advertising revenue. Forget the purchase price; how many millions will I have to sink in within the next year?

The potential upsides include buying an ad-based franchise at the bottom of a recession and being able to be a shiny newly painted boat in a rising economic sea; 2010  ad numbers can hardly help to be an improvement over this year’s. The feds will soon be paying people to buy cars, and houses will start to sell again; related advertising will recover a bit. 2010, I'm coming to believe, will offer a breather to the beleaguered industry. Yes, the structural changes of ad spending and reading will continue, but a small ad bounce will help dramatically downsized companies in the next calendar year. That may only stop the gasping temporarily, but breath is breath.

The potential downsides include inheriting a heavy-on-cost business model at a time when competitors from Huffington Post to Politico to local start-ups to emerging online initiatives of local broadcasters threaten to do further damage to daily newspapers. In the fact, the new business models we're seeing from the start-ups -- small, editor-heavy, full-time staffs, growing legions of part-time reporters, columnists and bloggers, regional aggregation models -- stand far distant from the model of a paper like the Globe. If you truly believe that Boston needs a vibrant, public service-oriented news source, is assuming Globe ownership the place you want to start?

Nine Questions: New England Guilds, Tribune Fallout, San Diego Vacuum and the News Industry's Most Successful Alumnus

Things are turning ugly. Globe staffers up the ante in Boston. John Carroll calls Sam Zell an idiot. Online ads on newspaper sites drop to double-digit negatives. Which leaves me, as we approach this summer of our discontent, with more questions than answers. Here's Nine:

1. Down the road, will the Globe Guild members like their new owners better than the New York Times Company? Certainly, the Globe's sense of loss is understandable -- and real. Still, it's intriguing to compare the Globe Guild's rejection of the Times' offer to the Portland Guild's recent partnering with venture capitalists to take Maine Newspapers down a new road. The Maine Guild accepted givebacks to get the deal done, and to get a share of the company. My sense: It's always easier to be enthusiastic about the new, unknown guys than the management you've dealt with for years, even it is the New York Times. 

2. Where will lenders -- the new owners-to-be of bankrupt newspapers like the Tribune and the Inquirer -- turn for new leadership? They've got old-time publishers to choose from -- lots of them in the market -- as they replace the entrepreneurs like Sam Zell and Brian Tierney who fatally entered the trade in the last several years. They've got broadcast people, borrowing a page from Zell's playbook, as inevitably newspaper and local broadcast operations do grow together. They've got their pick of ad veterans, if they smartly see that local media success is going to be dependent on inventing scalable digital businesses.

3a. Won't Connecticut Attorney General Richard Blumenthal's okay of Tribune's merged TV/newspaper operations in Hartford seem quaint fairly soon? Sure, the FCC-related value of diverse community voices is a good idea. Going forward, though, the divide between local news video and local story/blog writing creation is an artificial one. Bottom line: The marketplace will probably take care of local news diversity rather than the increasingly outmoded rules of Old Media. 

3b. Aren't we finally able to put a pricetag on Sam Zell's unwarranted optimism and hubris? It looks like his $250 million "loan" to Tribune will be wiped out in the bankruptcy, as will his $90 million warrant. Still, it's just pin money for the guy who sold his real estate investment trust for $36 billion in 2006 and knows enough -- endowing the Zell Center for Risk Research at Northwestern -- to make judicious bets.  

4. While the San Diego News Network (Chris Jennewein's new hangout) is hardly a commercial threat yet in San Diego, the cratering of the Union-Tribune --  a one-time employer of 1422 people that will soon be paying only 572 850 -- leads to this question, in San Diego and elsewhere: How big a marketplace hole does a disappearing daily leave in its wake? My guess is that with an economic recovery, we'll see lots of small-shop entrepreneurs aiming to pick up local merchant dollars now in flux. 

5. Why would anyone expect the Kindle to "save" newspapers when it hardly supports advertising and takes 70% of subscription revenue? 

The Shrinking Daily vs. The Daily Eric

New week, new storyline.

This one appears to be: The Shrinking Daily vs. The Daily Eric. 

Just when you thought it couldn't get worse, it did. Today's FAS-FAX report tells us that print is dying off more quickly. The basics:

• 7% down daily and 5.3% Sunday;
• Double-digit carnage at major metros: The New York Times' Boston Globe, down 13.6% (daily) and 11.2% (Sunday); Hearst's Houston Chronicle down 13.9% and 7%; Cox's Atlanta Journal Constitution down 20% and 7% and McClatchy's Miami Herald down 15.8% and 13.1%. (Incidentally, the first reports out there today show what seems to be a smaller sample for the circulation report; that sample may be more skewed to metro dailies than it has in the past. So smaller market dailies, as has been the case, are probably faring relatively better than the metros, suffering single-digit declines.)

These losses cap deepening print circulation losses over the last five years -- and are accelerating. We've seen 2.5%+ annual declines in circulation for that period. We've heard from publishers that some/much of the decline was "planned," pruning farther-flung and junk circulation, more expensive to deliver and/or of less interest to advertisers. These numbers, their duration and their acceleration confirm much bigger things are happening here. 

Against this news today, we have Sharon Waxman's report of a conversation with the now-omnipresent Eric Schmidt (who recently seems to have a sense of bad timing, his Google growth announcements juxtaposed against news industry cries and announced woes) at a Hollywood soiree. The Google news summary on that talk:

The Daily Eric to Tell Readers What They Want to Know

Within six months, Google will automatically serve news readers the news they want by combining its knowledge of their reading, buying and search behavior. Google will sell premium ads on these pages and keep the revenue, sharing none with publishers. 

So there we have it. As print shrinks, Google will replace its daily functionality, its daily utility -- and it's been on that road for awhile -- with Google News, v2. It sounds like Google News, v1 meets Google IG meets AdWords for news, a new algorithm that knows us better than we know ourselves. Importantly -- distinguished itself from all the My Yahoo products that have come before -- Google is recognizing how fundamentally lazy we all are. In effect, we're taken to be the corpulent creatures in Wall E. Google seems to be saying: you don't have to do anything, we'll be your new paperboy.

Of course, this digital paperboy keeps all the money from the collections, a bizarro turn on the old value chain. News producers used to get the money and pay a few pennies (Newsies-like) to the distributors. Now the distributors are making the collections, and keeping it. 

How well will Google's new product work? 

It will be an improvement over Google News, the wonder whose main properties are aggregation, immediacy and some rough hierarchy of importance, though it's the last point that has made it vulnerable. Schmidt's project is as much as a defensive play, shoring up Google News against numerous others looking for ways to improve the news-finding experience (including AP with its landing page plans), as an offensive one. Lost in much of the current Google/newspapers debate is that Google News is still out of the Top 10 in U.S. "Top News" (Nielsen) and needs to improve there compared to Yahoo, MSN network, AOL and others. (It's Google overall dominance, News + Search + Paid Search, etc. that has made it the target.)

The two events of the day remind us how quickly the print to digital news acceleration is now happening. When we look back it, it will be simple to see:  Over the years, the ravages of Internet competition have damaged the press, causing it to cut back and back, and then the recession came long, just as a fierce storm whacks off the limbs of weakened trees, further diminishing them. 

What are the causes for the sharper downturn in circulation? How about:

• Continued generational change to online preference for news over print. Each year, the data speaks louder.
• Continued decline of the print product. You can't squeeze pages out and not expect to have an impact. 
• Earlier deadlines. In moves to consolidate production and printing, we've seen earlier deadlines around the country. Earlier deadlines mean even less timeliness for print readers, though there's no way print will ever beat digital on that.  
• The recession. With unemployment numbers where they are, and all of the above happening, it's an easier decision to not renew these days.
• More publisher cutbacks. Yes, there's been some truth to the publisher cutbacks of less-than-essential circulation, though that was supposed to have run its course. Given the need to reduce legacy costs however possible, some cutbacks are still happening.   

Add it all up, and the future gets clearer. And it's in pixels. The big questions get bigger. Who will pay journalists to create the news? Who will distribute it? How will a new, fairer, stable ecosystem emerge?

Through the Pulitzer Prism: Multimedia, Daily Winners That Are No Longer Daily, and Times Perserverance

The news industry's Oscars are in. Though there are many other awards that recognize good, great and distinguished work, it is the Pulitzer name and brand that still connotes the highest accolades of the year.

We spend most of our time these days, understandably, writing about daily journalism's busted business model. It's worth taking a moment to make several quick observations about today's prize announcements:

• What's busted about journalism is the daily business model, not the journalism. The journalism has always had its high and low points. We fete the high ones, lampoon the low ones and try to do better next week and next year.
• Look at the list, and you notice several things about the newspapers named.

1. The New York Times, of course, stands out proudly with five prizes. The wars in Afghanistan and Iraq, the Spitzer scandal, the co-opting of retired generals, the Obama Revolution in photos and top-notch art criticism all attest to the what the Times manages to turn out, in the face of pressures, cutbacks and endless second-guessing. In the hail of debate about the Times' and journalism's future, let's not lose sight of its contribution to national knowledge and debate.
2. The top two Pulitzer dailies for local are no longer really daily. The Detroit Free Press staff, led by Jim Schaefer and M.L. Elrick, won for their investigations into former Mayor Kwame Kilpatrick's "pattern of lies." A half a continent away, the East Valley Tribune, led by Ryan Gabrielson and Paul Giblin, won for their look at the impacts of the tenure of infamous Maricopa Country Sheriff Joe Arpaio. You can still buy both papers, but not so easily and not every day of the week. The Freep is available by home delivery three days a week, with slimmed-down versions available at newsstands the other days. The East Valley Tribune announced just last week it was dropping its Saturday edition, reducing publication to just three days a week, after announcing in October it would become one of the first dailies to drop to four days a week last year.  So the top two local papers -- by this year's Pulitzer -- are no longer really daily. 
3. The winner of the Pulitzer for cartooning, Steve Breen, now works for private equity owners who may have bought the paper more for its real estate than journalistic value. Bought for less than $100 million, the Union-Tribune will undoubtedly be the subject of significant cuts last year -- and the cartoonist position (hey, what's the ROI on that?) -- will certainly get scrutiny. Already, at least 29 editorial cartoonists have lost jobs in the last three years. 
4. The Miami Herald, with Patrick Farrell, winner of the Breaking News Photo Pulitzer, has been on the sales block for months. No takers at a price, its owner, McClatchy, considers worthwhile. 
5. Lastly, worth noting that East Valley Tribune series was one that embraced the web as a storytelling platform. Overall, seven of the 14 winners included some "online content" in their submissions. At the Tribune, staff used extensive multimedia and careful analysis of databases, then make publicly available, to tell its story.  We've seen the inroads of multimedia story-telling, but we can see the ball being moved slowly down the field as some journalists more fully embrace the wondrous tools of the day. 

Journalism Online: Part of the Web $2.0 Goldrush

Maybe we should call it Web $2.0. 

There's a goldrush underway, all of a sudden, though no one can yet pinpoint the location of the precious stuff. Will this be an El Dorado fantasy or is it say late 1847, a couple of years before modern California took shape as miners hit vein after vein of shimmery gold? 

Clearly, though, there are dollar signs in many publishers' eyes. Part-Google envy, part desolation over the busted business models newspapers are now operating on, these dollar signs are lighting up several new initiatives, some announced, some coming soon. Let's look at the latest entry.

The latest to join the would-be party is Journalism Online, LLC. Journalism Online has set out its shingle, with a website and sufficient firepower to engage in discussions with the captains of news publishing. At this point, it has neither technology nor staff. What it does have is the intention to build the next-generation platform for news e-commerce and a wide and ambitious range of potential products it is willing to take on. If it were just another Silicon Valley Web 2.0 (without the dollar sign) start-up, you'd say, haven't I seen this movie before?

Most curiously, behind its facade, we may see something of a strategy/back-up plan, a kind of "Who Do You (Anti-) Trust". More on that below, as we get to its emerging board of advisors.

Journalism Online is headed by a triumvirate of well-known execs.

Gordon Crovitz, former publisher of the Wall Street Journal. Crovitz took a nice payout in Rupert Murdoch's buyout of Dow Jones. Of the eight or nine post-Journal pursuits he's taken on, he says this new one as co-founder of Journalism Online will get a lot of attention. Crovitz, of course, brings the cred of having been in at the founding of the most successful U.S. pay news model yet birthed. 

Then there's Steve Brill, late of Contentville, an early paid content aggregation site that flickered brightly and then died in 2001. He founded Court TV and American Lawyer, and is a principal in the company that brought us Clear, a quick-pass (do we see a theme here?) through once-crowded airports. Brill got a lot of digital ink this year, in suggesting that the New York Times had blown its paid content opportunities, and offered his own prescription, to Times scion Arthur Sulzberger. 

Leo Hindery, a successful Internet private equity and pipes (cable, Yankee sports network+), rounds out the threesome.

Then there's Merrill Brown, a savvy, web (Real One, MSNBC+) veteran, who worked with Brill to start up Court TV.

Maybe most intriguing are two non-media business names: Attorneys Extraordinaire David Boies and Ted Olsen.

As in David Boies, who defended IBM in an anti-trust suit. David Boies, who defended Napster in a copyright case. David Boies, who led the federal government assault on Microsoft in, you got it, an anti-trust case.

As if Boies' name weren't enough, add in Ted Olsen, former Solicitor General. (Yes, you remember correctly. Boies represented Gore and Olsen represented Bush in the 2000 Supreme Court Case that decided the Presidency.) He's got anti-trust experience within his diverse resume as well. 

I see a theme here. No, of course, Journalism Online hasn't brought in David Boies with the notion of litigating. After all, it's a company that is in the talking stages, first with publishers, but presumably soon with search aggregators. You don't even have to mention "anti-trust" to Eric Schmidt, in setting up a meeting. You just have to say, we may bring along David Boies and Ted Olsen.

"Fair Share": Google, Trust, Anti-Trust....and What Happens Next

Maybe we've found an answer: get Dean Singleton, Rupert Murdoch, Eric Schmidt, Jeff Jarvis, Nick Carr, Mathew Ingram and Danny Sullivan in one room, charge admission and use the proceeds to pay for American journalism.

Last week may have shed as much heat as light on the trials and tribulations of the American press, as visceral responses to the state of the trade grew sharper. 

We saw a number of newspaper sentiments, from enlightened to reactionary, conflated together, given their paid-fire presentation in San Diego, as a multitude of fighting words pouring into the debate from San Diego's Newspaper Association of America/AP board meeting confabs, and its aftermath. "Anti-piracy". "Copyright". "BS detectors". "Ads with narrative and engagement.”  "OEMs, OPMs and VARs." 

We've seen name-calling, thoughtful response and ping-pong intellectual matches that make your head hurt, like this one on the always-engaging Nieman Lab

To the debate, I modestly had added the notion of "Fair Share," a new business reckoning between search engine aggregators, led by Google, and major news producers, old and new. That reckoning, I suggested, should recognize that Google is getting too much value and news producers too little out of of the current relationship. 

To my reckoning notion, I got a lot of response, with a wide spectrum of approval ("This is one of the most clearheaded, lucidly written analyses I've encountered regarding this situation") and disapproval (My fave, off Twitter: "I rarely agree with anything Ken Doctor writes.") Some dismissed the notion of righting news producers' relationship as "philanthropy." Far from it. I'm keenly aware of the separate battle over profit-seeking vs. non-profit journalism, and I'm an agnostic about that. Whatever produces more good journalism I favor, and there's no doubt it will be some mix of profit- and non-profit-based. 

My Fair Share argument, though, has nothing to with philanthropy, and everything to do with plain old business. 

In basic business terms, the news industry is a supplier - and an important one - to Google and the other search engines. In fact, it's a supplier/manufacturer (of traffic and ad revenue) relationship that has gotten out of whack, and is therefore useful for both parties to adjust. After all, manufacturers, too, have problems as their higher-quality supply lines dwindle.

Individual news companies, and here I mean the Politicos, the MinnPosts, the Techcrunches, the Global Posts as well as Media News, Gannett, New York Times, ABC and the BBC, have had relatively little leverage of late. Their inability to exercise leverage made sense historically. 

Take us back in the news time machine to 1998, a nice tweener period, and one that predated many of the companies above. Legacy news companies -- big 'ole big iron media -- could sense that their dominant place in the world was being shaken a bit, but AOL, Yahoo, Lycos (!?) and a couple of others didn't seem like Big Brother. So that legacy news industry had to tread lightly in pressing its case -- anti-trust seemed real for an industry in part built on city-by-city monopoly. 

In 1998, Google was born, and in the decade since the roles have been reversed. What was city-by-city monopoly has splintered, with local and regional advertising marketplaces much more diverse. 

On the other hand, Google, in particular, has become the gateway of our times, making a can't-refuse offer. It is the number one sender of traffic to news sites -- 25-35% as a rule. In saying that news companies are free to tell Google not to index them, and that Google will be glad to comply, you can practically hear the smile behind the statement. It's like Microsoft telling suppliers they were welcome to work with others if they didn't like the rules on Windows partnership. 
It's a choice that's not really a choice at this point. 

So as suppliers -- and here again I look broadly from AP and Business Week and USA Today to The Huffington Post to PaidContent to Demand Media -- it's about renegotiating the supply relationship. 

It doesn't mean having to erect pay walls. It doesn't mean a pause in radically reorganizing and rethinking news companies structures and products in this new hybrid age. it doesn't mean philanthropy. It doesn't mean calling Google evil or denying its genius. It doesn't mean limiting the free flow of content and debate on the web. 

It is about re-setting a new relationship of trust, trust that there's some equity in the deals. 

In the always quotable expression of Michael Corleone, ""It's not personal, it's just business."

So, let me suggest four forces that will move the recent web parlor talk into action this year. Each of the forces will have an impact on each other, and it's impossible to say at this point, which will have the greatest impact. 

Google and Newspapers: Fairplay, Fair Share and Fair Use

You can see the familiar battle lines drawn, in this week's script: At NAA, in San Diego, the semi-mad newspaper owners open the web network window to scream, "I'm mad as hell and won't take it anymore" while web denizens below merrily prepare to dance on those owners' graves, deriding how out-of-touch with Internet reality those owners are. AP fights gamely on behalf of the Old Guard as New Guard vanguard Eric Schmidt tells it like it is, even urging publishers "not to piss off their customers."

I think it's time we get beyond this tired storyline and confront the realities of the moment. Just as God didn't ordain that newspapers should drive 25%+ profits from their daily monopolies, God didn't set the pay-out rules that drives current web business models. It's time to re-boot the conversation and devise business models that represent real world needs. The two big needs: maintaining the free flow of global news and information and figuring how to pay people to create journalism and other useful content we all need. 

Meeting both those goals is the key, and it won't be done with a single bold stroke. It's time though for a reckoning. That reckoning can rejigger the the relationships between the new mass media of our day -- Google, Yahoo, MSN, AOL and increasingly the emerging Facebooks -- and news producers. 

That reckoning means moving beyond the fatigued arguments of another day. 

"Fair use," which some believe is rooted in the UK's 1709 Statute of Anne, has served a great public purpose. The simple idea: stimulate the public discourse by allowing judicious excerpting, while maintaining producer value through copyright. As web companies first started "excerpting" in the early days of the web, it set corporate attorneys atwitter. Was search engine or other excerpting "fair use"? I was involved in too many of those conversations at Knight Ridder, and with counsel of other newspaper companies. 

The short answer is we still don't know. Newspaper companies -- fearing they would lose in court -- have failed to pursue the question of fair "fair use," in the digital age. In fact, in the immortal words of Harvey Cox, "not to decide is to decide," and in their indecision, newpaper companies have lost. 

AP, Britain's PA, Canada's CP and AFP all huffed and puffed about fair use, threatening legal action and won licensing contracts with newspapers. Those are the "multi-million dollar" payouts Eric Schmidt noted as he professed surprise at all the publisher consternation that had erupted in San Diego prior to his Tuesday keynote. 

Individual publishers, though, have not won licensing deals. One reason newspaper companies haven't banded together to threaten suit and demand payment: "anti-trust." That's another legal concept that's served the country well. It, like, "fair use," though didn't anticipate the upending chaos of the Internet. 

So two good concepts, made in part obsolescent, by the way we communicate and the way journalism now operates. 

It's time, especially at this time of national re-thinking and re-jiggering, to get beyond "fair use" to "fair share." It's as American a concept as you can devise, and it's one that plays directly to our moment in history. 

Read or Eric Schmidt's remarks, and you'll find them quite reasonable. He's a smart guy who can put the digital world into context. They are, however, disconnected from the reality of our times. Here he is talking to a newspaper industry that has already seen five bankruptcies, newsroom cuts of greater than 20% and a downsizing future as far as any impartial observer can see, and he's talking to them about the transformative power of the mobile experience, how ad models will work out in the end and micropayments. We need to be talking about macropayments. 

Astounding. 

It's like offering a five-year plan to a group that's found itself afloat on a deserted island with little food. Sure, we can argue that some of those publishers are somewhat responsible for their straits, and I'd be the first to agree. The fact, though: they are still stuck on the island. And we're all held hostage by their plight, as the flow of what we know about our communities, our nation, our governmental policies and our business practices is reduced daily. We don't know what we don't know, but we do know we know less than we used to. 

How might fair share work and how can we justify it?

First, it's important to stress that this isn't about Google and isn't about newspapers. Both have their strong and weak points, but it's not about them. It's about us. 

On the first hand, it's about that excerpting that fair use, and re-interpreting it for digital times. That excerpting (indexing, snippetizing, etc.) is done most successfully by Google, but also by the other search engine and by tens of thousands of sites. That's what's behind this week's AP's anti-piracy push. There's lots of use differing taking of news content, with little to no compensation. So it applies to Google and way beyond. 

On the other hand, it's not about newspapers and providing a Legacy Media Bailout Act of 2009. It's about enabling the production of authentic, independent newsgathering by providing a going-forward way of compensating the work it takes to produce it. That work can go on in within the confines owned by multinationals like News Corp, Thomson Reuters and Gannett or rented by the recently (and deservedly) awarded Voice of San Diego or the Huffington Post or Slate or TechCrunch. It's the free flow of news production we care about, not preserving the companies.

So fair share would simply recognize that the first stage of web monetization has been, well, a bit simple. There's little nuance to it, with way too much value accruing to the search and aggregation players, and far too little to the content producers. There's nothing particularly evil about this; it's just what happened. (For context,  consider the parallel discussion of "conversion attribution" in the online ad world, a spirited argument that has fallen off the table recently.) 

Google is our proxy here for search engines and other indexers of content. Why? It's the leader, providing 25-35% of the traffic to news websites (while the combined traffic contributions of the others push that number to well over half the traffic many news sites receive). It indexes news websites, and out of more than 4000 news sources, produces Google News. Ask Google how fair this arrangement is, and it will cite two things: 1) the fair use legal argument; and 2) the amount of traffic it sends news websites. What is in fact saying is, hey that's fair, that's even.

Wait a minute, maybe legally fair. But even? How do balance value here? The way it works now is that whatever value Google can derive from snippetizing news is fair game, and even. If it produces a million in revenue related to news, that was fair. If it produces billions related to news, well, that's fair and even too. 

In fact, Google derives lots of value from the news it presents, and we have no clear accounting of that value.

Consider a few diverse data points here:

• Here's the grossest number: $21.7 billion. That's Google's 2008 annual revenue. Big number, and growing at a 24% 31% rate. How has Google weathered the recession? Well, better than most we think. We'll see first quarter results Tuesday. Compare that number to how much advertising revenue the US newspaper industry has lost. It pulled in $47 billion in 2005 and will come at maybe $36 billion in 2009. Certainly, there's not a one-to-one transfer of those dollars, but do all the forensics you want, and you'll find dollars formerly spent on newspaper ads are now spent on Google ads. Advertising makes up about 97% of Google's revenues. (More on Google, newspapers and profit here from Poynter's Rick Edmonds.)

NYT and CNN: Global Editions Bring Battle Head-to-Head

The launch of the Times' new Global Edition opens a window on the emerging global news competition to come. Even in deep recession, we see the battle lines being drawn.

Global Edition is a simple concept. You know NYTimes.com. And you know the Times has lots of world-oriented news, the staple of the A section for print readers. And you know you can find World News on the Times site.

The Global Edition, though, is a new product. Its trick is mostly in presentation, with the Times saying, We Bring You the World. It's timely. Pew told us that 40% of Americans say they get most of their international and national news from the Internet, compared to only a 24% in September, 2007.

You may recall that the idea's not a new one. Go to CNN.com, and you see "international" as a choice at top right of the page. It is less visible than NYT's, but the same idea (and an Arabic page option as well, once you click on international).

The news business is truly going global, enabled by the cheap and flexible distribution offered by the Internet. Already about a third of the NYTimes.com unique visitors come from outside the U.S. This new move integrates the Europe-centered International Herald Tribune into the Times web business, both in advertising pushes and in web branding. Go to the IHT website now, and you'll see the Global Edition, though branded as a sub-brand with the IHT, a move to bring those longtime IHT readers gently into the larger Times brand. As a bonus, IHT-originated content is now prominently added to the Global Edition for all NYT users, although some of it has been there before. (Today, about 20 IHT stories can be viewed on Global Edition.)

The latest development is a perfect example of the increasing head-butting of media that we've used to think of as distinct. Cable TV and Newspapers. That's the old world. In the new world, we've got CNN as a cable news leader, as a mobile news provider, as a website -- and now of course as a wire, as CNN President Jon Klein further talked about last week. 

Then, there's the Times. A print newspaper, doing a major website, experimenting with video and audio, and having a long-standing wire and syndicate business that is trying to find its way amid the publishing meltdown. It has also produced the leading news app in the iTunes store.

These are two, among many, companies on a collision course. Think ABC, AFP, AP, BBC, Bloomberg, CBS, the FT, Guardian, NBC, NPR, News Corp, Reuters, Telegraph and Wall St. Journal, and News Corp overall, here as well.

Paid Content: You Can't Tell the Players Without a Scorecard

Make 'Em Pay! Sounds like a old Clint Eastwood movie. Now, though, it's the theme of the newspaper industry month. We can't blame the industry for trying new tacks; that's only to be encouraged in the time of ransacked newsrooms.

Furtive cable bundling. Special e-newspaper readers. Hints of content pony walls. Tax relief and government training monies. 

Let's take a quick look at the landscape, and try to score them:

1. Cablevision's Newsday/cable idea: I pooh-poohed the paid Newsday notion, when it first leaked out last week. Putting up a pay gate around a site that draws 4.5 minutes per month per average visitor just isn't a good idea. From Cablevision's furtive comments, we can now divine that it meant to say it would somehow bundle Newsday as a cable offering, details to come. As Peter Kafka over at AllThingsD has pointed out, this idea may have more appeal for its ad value than its news value. The big new idea here, though, could be an old, tweaked one. Bundling! Imagine bundling Newsday online access in with Cablevision's cable bills all over Long Island. If you've actually looked at your cable bill lately, you know it's undecipherable. Cablevision -- owner of Newsday -- could peg any amount it wanted to Newsday value, call it an information access charge or whatever, and attribute the money to ..... Newsday. Sound familiar, maybe a bit like, the early days of classified bundling (the '90s), in which newspapers attributed whatever they wanted out of a recruitment/auto/real estate print buy to online. The trick here would be for Cablevision to continue raising rates to make the "bundling operation" really profitable for the whole company, and not just a shell game.

         Odds of Happening: 2-1.

         Impact: Great model....if you are a cable company that owns a newspaper. Would Comcast like to pull Tribune out of bankruptcy?

         Added Bonus: Having "The Housewives of Orange County" subsidize newspaper reporting.

         2. Hearst's e-paper idea: Hearst's Interactive Media President Ken Bronfin piqued imagination last week with news that the company has developed a "wireless e-reader with a large-format screen." As with the Cablevision word, we know little more so far. Jeff Bezos' pet Kindle and lately PlasticLogic's to-be-released-in-2010, oh-so-cool bendable screen (good informative piece by Emma Heald here at Editors Weblog) have re-lit hopes that people will want to read newspapers on this new device, paying for them of course. We know Kindle has some thousands of buyers for newspaper products, at $10 or so a month. 

         Odds of Happening: 2-1.

         Impact: Seems niche-y, rather than mass.  Wireless sounds good, if it can update newspaper content on the fly. Otherwise, we're back to today's latest technology bringing you yesterday's news. Of course, even if it is the latest news, how many people want it in the newspaper format (As Steve Yelvington points out, this is the old Roger Fidler idea, late of Knight Ridder, updated by newer technology)? My problem with e-readers has been that by presenting news in the newspaper format metaphor, they appeal to baby boomers and up, who are habituated to the format -- but don't prefer to spend their time reading digitally. Additionally, for younger-than-baby-boomer readers, they're puzzled why you'd have a proprietary reader, when you already have a laptop or smartphone that can get you the latest on anything, and offers other usefulness.

         Still, the device does offer the promise of a Chiropractic Full-Employment Act, as we (to use a USA Today-ism) all pack around so much digital garbage that our backs are permanently swayed. Here is one of those great USA Today snapshots, published fortuitously last week, showing the e-burdens Americans tote around these days.

         My sense is that the way Hearst may intend to make this work is as follows:

• Give away the e-reader to subscribers, or discount it substantially, figuring that the money saved from printing and distributing a daily paper (or Hearst magazines) -- more than a quarter of the cost of producing it -- will be saved if Hearst can hold on to the subscriber.
  
• Offer a have-it-your-way approach: 1) E-reader, "free" with upfront payment or guaranteed contract, a la cell phone contracts. 2) Print, which is priced higher.
  
• So it would be an attempt to both reduce costs immediately and offer an alternative to more tech-savvy younger readers.

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         Added Bonus:  A new device to add to the Graveyard of Proprietary Devices, sure to be on one of the popular stops on the Silicon Valley 2020 Tour.

          3. Hearst paid content idea: New Hearst News head Steve Swartz' leaked memo talks about charging for access to some online content, to be determined. Hearst execs have been told, since the announcement, not to erect any paywalls yet. In fact, they've been told to reach out and lasso more community content, another (better) idea newly regaining attention all around the country.

        

Paid Newsday Site? What's 4 1/2 Minutes Worth to You?

(Brief update on parsing what Cablevision meant, here)

Numbers can be terrible reality checks.

Want to know how likely it is that Cablevision's new charge-for-Newsday-online will work? A few rational arguments to follow, but consider this number: The average unique visitor on Newsday.com spends four minutes, 25 seconds per month on the site. Ouch. That number can sub for lots of focus groups, price elasticity testing and the like. Newsday's would-be digital audience has voted with its fingertips. That number is up almost one minute from a year earlier, here courtesy of E and P's monthly Nielsen rankings, but still ranks Newsday as having the lowest online engagement of the top 30 newspaper sites.

Confronted with having to pay for a site you may use less than five minutes a month, you think you are going to pay for it? Wrong site. Wrong year. Wrong metro area.

It will be fun to watch though, since we all needed another case to chew on. Our best case has been Little Rock. Yes, the Democrat-Gazette has done better than average in circ retention, but it is still laying off dozens of people this week. It has applied a tourniquet and that only helps for awhile when you have an internal hemorrhage. They've been able to keep circ better because it is Little Rock, with far less competitive media, and it is the big dog in the state.

Long Island is no Little Rock. In New York, Newsday faces strong competition from the three other dailies plus dozens of local websites. Much of its coverage, in print and online, can be readily found for free elsewhere on the web. So assuming, it gives free, or next-to-free access to its print subscribers, it is unlikely to pick up much new revenue from non-subscribers who can go elsewhere. Similarly, I don't think it's a strong retention device for holding to print readers, though it may work there to some degree for the short-term.

To be more successful, Newsday would need to shift its model to being more hyper-local about Long Island, rather than bringing the world to Long Island, and it doesn't show much signs of doing that.

Cablevision swung for the fences with the $650 million (now written-down) purchase. It tried to parlay the industry triple play (cable, Internet, telephone) into a Home Run. This new move seems to be another attempt to swing for the fences, after apparently whiffing on the dreams of internal synergy that have upended so many media companies. Right now, it looks like you'd have to score the Cablevision auction "victory" over Rupert Murdoch and Mort Zuckerman as a strike out at the end of the ninth inning, but we'll get ready for the second game of the doubleheader.