Another gathering at API, low key this time

I'm basing this info solely on hints in a few Tweets from participants, but it appears that "Round Two" of the American Press Institute's Summit for an Industry in Crisis is underway today. (Or perhaps it's just an interim session to plan for a full Round Two session.)

Round One, a gathering of 50 top newspaper executives, was held back in November, with considerable fanfare and zero results. It was criticized roundly for being closed-door, for bringing in just one outside expert, and more. It announced nothing other than a decision to meet again in six months, which seemed an impossibly long time to wait. A press conference was called to discuss results, then cancelled.

So for reconvening in just three months, kudos. For shutting the doors even more tightly this time, to the point of not even mentioning the meeting on the API site, well, whatever the opposite of kudos is. All I can glean from a couple of tweets by John Newby and Chuck Peters (who gained fame for liveblogging the November event) is that today's proceedings include small group discussions, and that they're more "nuts and bolts" (I like that). And by the way, that's a 100 percent increase in the count of Twitterers among the API crowd.

Chuck asked Twitterdom: "What is the game changer." My answer, expanded from a Tweet:

• Stop the incremental cuts. Round after round of layoffs, content cuts, newshole cuts, bureau cuts, cutting out publication one day a week, Gannett's audacious furlough program—some of these may have slight merit but in the aggregate, they're just killing the industry by slow torture.
• Instead, do something really reinventive. This may actually mean more cuts, but so be it. Decide what a successful local enterprise could look like 5 or 10 years from now, and go directly to it in one or two big steps. The model I've elaborated on often in this blog is a robust (some say "kick-ass") online-first, 24/7 web site, coupled with a printed paper published just once a week on Friday, distributed all weekend—in which you seek to preserve much of the existing print advertising. See the last part of this post for details.(Hearst's gambit in Seattle may turn out to be one of these transformative steps, and they have the opportunity to take such a step in the Bay Area as well.)
• Build social networks around news and information content. Newspapers, even the New York Times, have barely dipped one toe in the social networking waters, but they need to take the plunge. What they might do is take a look at the enterprise social sites being developed by Newsgator and others and see if they can be adapted as community social networks.

UPDATE 1/16: Many thanks to John Newby and Chuck Peters for providing further information on API Summit Round 2 in the comments to this post.

The elusive "business model"

It's all about the business model.

New York magazine has a don't miss-piece by Emily Nussbaum about the New York Times geeks—a team of 20-something experimental online coder/journalists who last year broke down a convoluted approval structure and are now collaboratively integrated into the paper's news operation, rolling out one innovation after another, dragging the rest of the news team along into the future, whether they like it or not. They've done great stuff and have great plans. Over drinks at the Algonquin, one of them gets around to the business model (italics added):

Over time, [Aron] Pilhofer adds, this is the role the Times can play: exciting online readers about the value of reportage, engaging them deeply in the Times’ specific brand of journalism—perhaps even so much that they might want to pay for it. If this comes true, it would mean this terrible year was not for nothing: that someday, this hard era would prove the turning point for the paper, the year when it didn’t go down, when it became something better. Pilhofer shrugs and puts his glass back down on the Algonquin table. “I just hope there’s a business model when we get there.”

In other words, "we don't really know if there is one, but that's not our job," and rightly so.

At the Times itself, media columnist David Carr, who is quoted in the New York story, has a column called "Let's Invent an iTunes for News," which has been much lambasted in the blogosphere (by Matthew Ingram, Jeff Jarvis and Jay Rosen, among others). Carr hopes against hope that readers can be induced to pay for news once again, but he doesn't really know what the model would be, either:

Is there a way to reverse the broad expectation that information, including content assembled and produced by professionals, should be free? If print wants to perform a cashectomy on users, it should probably look to what happened with music, an industry in which people once paid handsomely for records, then tapes, then CDs, that was overtaken by the expectation that the same product should be free.

He mentions expectations that we'll see, later this year, an iPod Touch with a 7-to-9 inch screen (we may, and we'll see upgraded Kindles and, before long the Plastic Logic reader, as well).

The device would allow scanning of pages with a flick of the finger. It sounds promising for newspapers and magazines. Now all we need is a business model to go with it.

And that business model would be? Carr doesn't tell us , the column ends there. But he's thinking that if you want to read the Times on that thing, you're going to have to pay. (Earlier in the column he expresses the hope that someone like Steve Jobs will somehow convince "the millions of interested readers who get their news every day free on newspapers sites that it’s time to pay up." A cashectomy.)

Wrong. Yes, we know that some publishers have some content that some people will pay for some of the time. (Carr mentions that he pays for the Wall Street Journal, Cook's Illustrated and Consumer Reports). But most people will never pay for any content at any time, whether or not micropayments become easier to handle. Besides that, when you put up any kind of paywall, you put a serious dent in your ability to sell advertising, because in contrast to the traditional printed newspaper (in which publishers owned the only available delivery pipeline), today's reader has free alternatives that are just a click away through whatever device they choose for browsing.

I've speculated, myself, that the news business could be enormously transformed by the advent of an "iPod for news" in the form of an e-reader that's particularly suitable for news reading, because the proliferation of such devices would broaden the consumption of digital news content away from computer screens, to anyplace where an iPod can be carried and used.

But while consumers might buy the gizmo, they won't pay for the content, so we still need a business model, no matter what. In mine, publishers dump print (except for a weekend edition), and deliver content digitally via all interfaces that come along, from desktop to Blackberry, from Kindle to iPodTouch. They layer in a robust social network for news (the Times geeks have only scratched the surface of that need with TimesPeople, but they must have more up their sleeves). They "monetize" by delivering all kinds of commercial content including much more video and new forms such as geotagged ads on mobile devices; and by moving beyond advertising into the sale of premium services (not premium content), by facilitating transactions, by leveraging their social network in ways not yet invented (but Facebook and others are trying).

In the end, it's still about capturing a slice of the advertising pie, which, as I've detailed before, is going to remain at around 2 percent of GDP as it has for 80 years or more, simply because our competitive economic model can't do without it. With the partial exception of non-profits such as public radio and TV, every major new content delivery method in 400 years (newspapers, magazines, radio, TV) has been financed by commercial content. (The subscription and single-copy revenue of newspapers and magazines is not relevant here, it's simply an offset for printing, distribution and circulation overhead expenses.) The online news organizations that newspapers morph into (or those that supplant them if they fail) need to find their share of that 2 percent pie. That's why it's important not only for newsrooms to become online-first, but for the advertising sales department to follow suit. Right now.

I do hope that Aron Pilhofer and his fellow Times Geeks (if they don't get to stodgy hanging around the Algonquin), let their thoughts wander away from news toward revenue generation now and then. It sounds like they could come up with some nifty ideas on the commercial content side of the equation, as well. Meanwhile, when the nation's press barons assemble for Round Two of their API Summit for an Industry in Crisis, perhaps the smartest thing they could do is to create a national newspaper geek squad focused on innovation in commercial content. It's the only way out of the swamp, fellows.

PM UPDATE: I can across this post at MediaBistro, quoting Aron Pilhofer, which sheds a tad more light on the Times's intentions with regard to real social networking: "The goal is to 'make the NYT programmable.'" Pilhofer is also on the team looking for a Knight News Challenge grant to create DocumentCloud.

The Digital Enterprise Solution

Yesterday I summarized why it's crunch time in newspaperland—and why, rather than making strategic decisions, most of America's newspaper companies will be rolling out a variety of tactics to chop off a digit here and a limb there, until the patient bleeds to death. Shortly after I published that post, Jim Hopkins reported that Gannett will chop as many as 3000 jobs, or 10 percent of its newspaper division, on top of earlier cuts, and that a corporate reshuffling is to be announced today. I rest my case.

And you know, some cuts may be essential and unavoidable. Some newshole tightening is probably called for. Some sections and supplements make no sense and ought to go. In my own career, I found plenty of ways to reduce expenses. It's part of doing business. And guess what, I even supported, right here on my blog, my old boss Dean Singleton's thoughts about outsourcing the copy desk—I've wondered for years why nobody was doing that. In fact, what's the difference between that and Dave Morgan's proposal to disaggregate the whole news business?

Yesterday I promised some solutions, but I'm going to suggest and expand on only one, and mention an organization that's embracing it. It's not new, it's the necessary strategic transformation everyone has been talking about, but which very few companies have actually thought through.

The strategy sounds simple: Transform the business from its manufacturing roots into a digital enterprise. I proposed a version of it in my second-ever post, back in September: "To have even a chance of survival, the mindset of the industry needs to become: We are in the business of publishing information content continuously on our web sites; every 24 hours (for now, and this may ultimately change to once or twice weekly) we gather some of that information into a printed product and distribute it, but our business is focused on and driven by our online operations." And I've explained it again more recently when I explored the economics of a daily that morphs into a web-first weekly or twice-weekly, and previously as part of my Six Theses, and elsewhere. I'm not alone on this. "Digital is first" is at the top of Steve Outing's list of suggestions for the industry as well; others have hammered away at it; it should simply be on everyone's list.

But, the problem with"digital enterprise," "digital first," or "online 24/7", however it gets distilled, is that it's much easier said than done. Many news organizations have talked the talk, but when you really look closely at how they're organized, they're still completely focused in all departments on the daily print cycle. Newsrooms plan budgets, assign stories, cover events, write stories, edit, format and send, all with the old 11 p.m. deadline in mind. That's not "digital first," it's digital when we get around to it, no matter what the mission statement might say.

An organization adopting the strategy of becoming a digital enterprise must think through what it really means. If they do it right, they'll find it will literally change every job in the company. Getting people's heads into those newly defined jobs is not easy, but it has to be done.

(And really, newspapers are about 10 years late to the party. Most Fortune 500 firms have been engaged for at least a decade in transforming themselves into digital enterprises. It means different things in different outfits, but those that ignore this revolution are left behind.)

One newspaper CEO engaged in this process is Chuck Peters of the Cedar Rapids Gazette, who gained a few moments of fame while microblogging the API summit a few weeks ago. (He heads Gazette Communications, which encompasses TV and commercial printing as well as the daily paper, its web sites, and other print and online products).

Chuck's blog is called "C3—Complete Community Connection." Back in July, after spelling out the need to break away from a focus on product, he laid out this challenge to his team: "What we need is the ability to create and collect, in the first instance, textual snippets, audio, video, and visual assets in native XML, tag them appropriately, and place them in a contextual framework that has meaning for the community or communities that have interest in that information." That's the raw material and the core content flow in a digital news enterprise focused on becoming the glue that holds its communities together.

After some setbacks from this summer's floods in Cedar Rapids, Chuck is now focusing his organization on understanding the changes in jobs and mindsets that are needed for success.

As an individual, my interests are not easily discerned by my geographical location or demographics. So, I am looking for a way to keep up with friends, neighbors, certain local organizations, and certain local issues, while getting the overview of key issues that an editor thinks I should know. We need an elegant organization of information to make that happen....

It is my strong belief that an organization such as ours, with over 500 employees, cannot expect that we can change all the mindsets and pursue a new game by simply repeating the forces and ideas driving the change in a series of seminars or links to interesting articles. We need to change the tasks, titles and organization so that we are doing new tasks, in new ways, and making the results of our efforts available immediately to our communities as we begin the larger task of organizing all this information elegantly.

Walking the walk, the other day Chuck laid out new job concepts for various key players in the C3 organization, including himself. The CEO becomes "Community Liaison," the editor becomes "Information Content Creator (Moderator)." The process is ongoing (for more detail and background, read this report from the Readership Institute about what's happening in Cedar Rapids.) But the point is, here is one news organization working hard at blowing itself up, reinventing itself, and becoming a truly digital enterprise.

Becoming a digital enterprise has many other potential implications, depending on the market. I've suggested some of them: emulate the CIA's Intellipedia model; find an end-run around the FCC's cross-ownership rule (Cedar Rapids is one of the grandfathered markets); disaggregate; adopt social networking as a key part of your model; experiment with lots of new digital tools like Twitter. Every news organization needs to be exploring these and many other implications of becoming a digital enterprise.

Can any of this be even discussed in an organization demoralized by waves of layoffs and cutbacks? It won't be easy, obviously, but it has to be done. A newspaper organization that chooses not to adopt, embrace and fully implement a strategy of becoming a digital enterprise will remain a manufacturing enterprise with a product that fewer people want or need, every day. Perhaps it will be remembered one day by a nice brass plaque on the historic printing plant.

Year-end crunch time at newspaper firms

During the next month or two, the crisis at America's newspapers will come to a head. There will be boardroom decisions that go well beyond the incessant paring of staff we have seen all year. Here are the reasons why it's crunch time now:

• Those of us still subscribing to "ink-on-dead-trees" versions of newspapers noticed that after a 4-day weekend with apparently ad-laden papers, what got tossed on our porches yesterday and today was mighty thin. Retailers expect a very slow holiday sales season, and they're going to be stingy with their ad dollars from here on out.
  
• The fourth quarter is normally the best for newspapers because of holiday-related advertising, but with slow retail sales in the offing, there's every indication that the revenue slide will continue. Total revenue (including online) was down (click on "Quarterly"), year-over-year, about 13 percent in the first quarter, 15 percent in the second quarter, and 18 percent in the third. Notice a trend? (For a longer trendline, the losses during the prior four quarters in 2007 were -4.8%, -8.6%, -7.4% and -10.3%,) If the fourth-quarter bleeding holds at "just" 18 percent, total revenue for the year will come in at a hair over $38 billion, down 16.1 percent versus 2007 (which was down 7.9 percent from 2006).
• Faced with these numbers, "stakeholders," also known as bankers and stockholders, will want to see evidence of serious restructuring. After December 31, most newspaper companies will have to report end-of-fiscal-year results, face Wall Street analysts, and hold stockholder meetings. Some, both publicly and privately owned, are laden with bank debt and will face loan covenant defaults. Banks are not in a position to be especially lenient about this, and will demand evidence of serious restructuring before issuing default waivers at the customary fees. Even firms that still possess fairly solid balance sheets will be looking to conserve cash and otherwise prop up ratios to placate stockholders.
• The first calendar quarter of the year is typically the slowest for newspaper revenue, so the pressure will be on to announce and implement drastic measures as early as possible.
• There will be no bailout in this sector, they're on their own. And the industry quietly failed in its single attempt (the API Summit on Saving an Industry in Crisis) to come together to develop an industry-wide strategy, agreeing instead to reconvene in six months—when it will clearly be too late.

So what will happen? I wouldn't expect much in the way of positive thinking in upcoming weeks. The talk in newspaper boardrooms will be tactical, not strategic (about "newspapers," not "post-newspapers"), and the actions under consideration will mostly be steps down a dead-end avenue. They include:

• Further layoffs and buyouts, where there's still "fat" left to cut
  
• Closing or selling underperforming papers
• Closing distant bureaus; paring coverage of Washington, D.C. and foreign venues
• Pulling out of A.P. in favor of the new CNN service (or no wire news at all), and creating shared statehouse bureaus
• Combining printing, packaging and distribution operations with neighboring papers, even with competitors
• Merging newspapers in neighboring markets, even when those markets have separate, distinct identities, interests and concerns
• Cutting frequency—not radically and strategically as suggested here and elsewhere—but one or two days at a time, prolonging the agony.
• Outsourcing whatever is outsourceable at a savings, regardless of quality
• Cutting virtually all investment in capital resources and new business development (or R&D as it's called elsewhere)
  

Alan Mutter, the Newsosaur, is in the midst of a series, "Thinking the Unthinkable," with two installments so far, discussing these kinds of options.

There have been plenty of suggestions made by journobloggers (yours truly among them) and other industry observers on how to restructure in positive ways that will allow newspapers to become post-newspaper information utilities. Some are even being implemented here and there.

Tomorrow, I'll have a roundup of solutions, free for the taking.

Chuck Peters summarizes API Summit liveblog

Chuck Peters, CEO of the Cedar Rapids Gazette, was the fellow liveblogging the API Summit last week (his first attempt at that, no less). He has now rededicated his own blog, C3—Complete Community Connection, to this mission:

Newspaper executives from around the world are trying to implement new business models. However, it is hard to implement a new model with an old mindset. Many are trying to arrange the concepts for a new ecosystem of local information. What I hope to do here is share my thoughts, and connections, as we explore these new frontiers.

He has now distilled the liveblog into "Learnings from the API Summit." You can also click the link at the end of his summary and download (MS Word) the full 41-page transcript of the liveblog.

I have to say also that Chuck's paper has a hell of a good website. He's got my nomination play the part of J. Robert Oppenheimer, should the Manhattan Project to blow up and reinvent the newspaper industry get off the ground.

(See also "Don't Bail Out the Watchdog" by Steve Buttry of the Gazette, who works for Peters. This references the tongue-firmly-in-cheek suggestion by Jon Fine of Business Week of a bailout plan for the newspaper industry. Buttry mentions it in passing, but the Newsosaur, Alan Mutter, seems to have taken it seriously, with a detailed explanation of "Why the feds won't bail out newspapers.")

The bottom line: how it fares when you nuke your newspaper

To undertake the Manhattan Project for newpapers, there’s no need to sequester anyone in Alamogordo (or to wait six months to meet again). We are already reinventing the industry by way of ongoing dispersed collaboration, and there has been no lack of conferences on the subject (if you're hankering for another one, you might check out Bill Densmore’s Information Valet Project gathering, happening in a couple of weeks in Columbia, Missouri—I'll be there). A Manhattan Project wiki would be nice, too (are you listening, Matt Thompson?)

Anyway, one of the questions that arises from time to time in this process is: If a newspaper were to just drop its print edition today, what percentage of its expenses is eliminated, and how close would it be to breaking even on just online revenue?

Let me try to address that. First of all, no newspaper could or would make that transition all at once, so the question should be rephrased. As noted in one of my Six Theses, print is not actually dead, so let’s not be too quick to kill it. There’s still a lot of revenue in print, even though it seems to be dropping like a stone.

Let’s agree that the Christian Science Monitor's planned departure from daily print is really a one-of-a-kind outlier. Apart from that, there are a few papers tinkering with dropping Monday editions and rearranging sections, but those are cost-cutting moves, not bold attempts to blow things up and start over. So if we owned a newspaper and wanted to consider a nice nuclear blast to position themselves for the future, today or soon, what would the aftermath look like?

Here's my suggestion: drop Monday and Tuesday, consolidate Wednesday and Thursday (for delivery Wednesday), drop Friday, and consolidate Saturday and Sunday (for delivery Saturday). So, a twice-weekly Wednesday and Saturday paper.

(This presupposes, of course, a completely kickass 24/7 online news operation, and a staff that totally gets that online comes first. The web operation should have plenty of blogs, plenty of databased local information, a wiki, social networking features, Twitter feeds, you name it. And it should be ready to evolve and adapt as even more tools and features come along.)

(And, the right solution for the print side will be different for every market. Tim Windsor proposed a different one last week, but we agree about the online presence.)

What’s lost, what’s gained, and how’s the bottom line in our web plus twice-weekly model ? Here you go:

Lost:

1. Print readership five days a week. But readership of those big Wednesday and Saturday packages would probably spill into Thursday, Friday, Sunday and other days, and might exceed the current daily average.
2. Some portion of the print revenue. But we're eliminating the weakest days for advertising sales. With some shifting and smart selling, the paper could keep as much as 80 percent of print revenue. There’s plenty of advertising that still wants to be in print, and it will take the days you've got.
3. Printing and distribution expenses five days a week. To become a truly digital enterprise, we could cut a lot of brick, mortar and steel overhead by outsourcing all production and most distribution, saving about half the production expense. And we'd lose maybe a quarter of the newsprint cost because of the frequency change. (Or if we keep our press, we've freed up a lot of time for commercial printing.)
   
4. Some circulation revenue, since people won’t pay as much for a two-day paper as they do for seven days. But each edition would have a sales shelf life of several days. I’m guessing only one-third of circ revenue would disappear.

Gained:

1. A lot of traffic from younger demographics, if the online content is right. Many folks who are print-only readers would be nudged online because of the change, as well.
2. More online revenue, which would follow the eyeballs, although perhaps not immediately. But it would not be unreasonable to target a doubling, or more, of online revenue over the next five years.
3. More print readers, including younger ones, if the Wednesday and Sunday packages are carried out with a lot of pizzazz. Check Alan Jacobson’s blog for ideas.
4. A stronger brand, because in reality, two fat newspapers each week and a robust web platform will have more impact than five or six skinny papers and a site that’s not foremost in the newsroom’s mind.
5. Strategic positioning to take advantage of any new online or digital opportunity.

And the bottom line? I’ll spare you the spreadsheets, but I constructed a model of a hypothetical medium sized newspaper using industry averages for various revenue and expense categories. Before nuking itself, it has a bottom line operating profit of 17 percent. Projecting out five years, it’s in the red, with no prospect of revival, because print advertising and readership continue to shrivel, it has downsized below critical mass, and has no financial resources left to maneuver with.

After reinventing itself as described, an optimistic five-year projection shows operating profit about 20 percent below pre-blast levels, actually at a slightly higher margin on sales. Pessimistically, the drop is 50 percent, but either way, that’s better than complete oblivion under the status-quo projection.

This means that post-Manhattan Project, the Business Formerly Known as Newspapers will be smaller, in terms of revenue, both in the aggregate and in any particular market. But for the companies that figure out how to make the leap into the digital/print hybrid future, there will be plenty of opportunities to grow by moving into the markets of newspapers that failed to adapt.
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Update: Marsha Ducey, a journalism prof at Canisius College, asked her students today to contribute ideas for a Manhattan Project to reinvent the newspaper business. Here's what they came up with. I like “A web site for the ‘Manhattan Project’ where innovative and ‘young’ journalists can collaborate and voice their opinions.”

Busted flat in Reston

The American Press Institute has published a staff summary of Thursday's CEO conference, "CEO Summit on Saving an Industry in Crisis." The last two paragraphs, under the subhead "Next steps," kind of sums up the industry's whole problem:

Participants agreed to reconvene in six months, and to explore additional collaboration. Some spoke of joint investment in research and development of both technologies and products, others of more formal means of sharing information.

"Why can't we be the disruptors?" asked one. "We have nothing to lose."

Six months? What are they thinking? They've laid off more than 10,000 people in the last six months—what will be left six months from now? They need to launch a Manhattan project to blow up their industry and start over. Now, not six months from now.

"We have nothing to lose" is about right, but they may have nothing left to invest in change, either.

Who Will NOT Pay for The News

Now that the press barons have returned home after circling the deck chairs in Reston, excuse me, "developing a shared vision for going forward," we'll be anxiously awaiting the results. Meanwhile, I recommend a look at the available video output from another comfortable confab, the Monaco Media Forum, held last week. There's half a weekend's worth of viewing there, so I haven't yet digested it, but expect to comment on it Monday.

Alan Mutter has a roundup today of third-quarter financial results from the publicly-traded newspaper firms. Most of those that have not plunged in the red on an operating-profit basis are seeing 40 to 90 percent declines. Elsewhere, an analysis of the New York Times Company's QIII results looks pretty scary, if you know what a quick ratio is. (Their currently liabilities are more than double their current assets, which is something that would put any normal company into bank covenant default and make it very difficult to refinance debt.)

So, the question of the moment is certainly: Who Will Pay For The News. Those with a vested interest in the topic may want to maker their calendars for O'Reilly Tools of Change for Publishing Conference, February 9-11, 2009 in New York. Although it's a book industry gathering, it looks like newsies might learn something as well. Jeff Jarvis will be there, as a keynote speaker, no less. (What would a conference be without him?)

Meanwhile, a substantial piece of thinking to chew on (yes, I know it's ancient, but I'm just catching up with it): "Free! Why $0.00 Is the Future of Business,"a piece in Wired by Chris Anderson (see also his related Long Tail blog post). If you haven't previously encountered it, it's long but worth adding to your weekend reading, and it has new relevance during the current crises in newspapers and elsewhere. Samples:

The rise of "freeconomics" is being driven by the underlying technologies that power the Web. Just as Moore's law dictates that a unit of processing power halves in price every 18 months, the price of bandwidth and storage is dropping even faster. Which is to say, the trend lines that determine the cost of doing business online all point the same way: to zero....

This difference between cheap and free is what venture capitalist Josh Kopelman calls the "penny gap." People think demand is elastic and that volume falls in a straight line as price rises, but the truth is that zero is one market and any other price is another. In many cases, that's the difference between a great market and none at all....

The huge psychological gap between "almost zero" and "zero" is why micropayments failed. It's why Google doesn't show up on your credit card. It's why modern Web companies don't charge their users anything. And it's why Yahoo gives away disk drive space. The question of infinite storage was not if but when. The winners made their stuff free first.

Traditionalists wring their hands about the "vaporization of value" and "demonetization" of entire industries. The success of craigslist's free listings, for instance, has hurt the newspaper classified ad business. But that lost newspaper revenue is certainly not ending up in the craigslist coffers. In 2006, the site earned an estimated $40 million from the few things it charges for. That's about 12 percent of the $326 million by which classified ad revenue declined that year....

Thanks to Google, we now have a handy way to convert from reputation (PageRank) to attention (traffic) to money (ads). Anything you can consistently convert to cash is a form of currency itself, and Google plays the role of central banker for these new economies.

There is, presumably, a limited supply of reputation and attention in the world at any point in time. These are the new scarcities — and the world of free exists mostly to acquire these valuable assets for the sake of a business model to be identified later. Free shifts the economy from a focus on only that which can be quantified in dollars and cents to a more realistic accounting of all the things we truly value today.

Barons of the press, repeat that: Reputation and attention are the new scarcities. Again: reputation and attention are the new scarcities. (Keep repeating. Monetization will follow.)

Rearranging the deck chairs at API

The 50-odd newspaper moguls (or their stand-ins) who are packing their bags for tomorrow's "API Summit on Saving an Industry in Crisis" are, of course, checking their RSS feeds to see what the blogosphere buzz is about the event, and about the industry's tribulations.

Or perhaps not. So, in case they missed anything, here are various takes on the closed-door Reston confab:

• Jeff Jarvis's screed at Buzzmachine: "The last thing newspapers need." ("Closed-door is exactly wrong. What they should be doing is asking for help, ideas, perspectives, models, worldviews, and suggestions from outside their industry.")
• Steve Outing: "Why newspapers are likely to die as we know them." ("Is there still time for newspaper industry leaders to make necessary course corrections? Is the industry just waiting for the “catastrophic event” that will force an abrupt transformation to stave off extinction?")
  
• Robert MacMillan at Reuters Blogs: "When the going gets tough, newspapers clam up." ("Many sources whom we deal with in the media world — particularly reporters, editors and other members of the editorial staff — find it funny that the industry they’re in (finding and reporting information, truthsquadding the government, holding the powerful accountable, etc. etc.) relies on publishers and other executives who are among the most press-averse people in the business world.")
• Tim Windsor at Zero Percent Idle: "Saving newspapers from the scrap heap: a plan." (Tim suggests something I've been talking about here: a hybrid "print-online model"—I'd make that "online-print," just to put the emphasis where it belongs—and he provides some detail.)
  

And, of course, before gathering, they will have thoroughly digested the available output of several recent conferences on the future of journalism and new business models for news. These include:

• Jarvis's own "New Business Models for News Summit" last month at CUNY.
• What the leaders of Twitter and Current TV had to say at the Web 2.0 Conference last week in San Francisco.
• Video from this week's UK Society of Editors meeting featuring Michael Rosenblum (aka The Energizer Bunny, who was also at the CUNY gathering) explaining how disruptive technologies are sinking newspapers, and how video journalism can build new news enterprises.
  

As well, they could find out (hopefully, we will, too) what was figured out at another closed-door conference held Monday and Tuesday of this week at Poynter, called "Who will pay for the news." (There are some thoughts on this subject on the blog of Poyter's Ellyn Angelotti, but nothing on Poynter's site about the conference, which was sponsored by the Ford Foundation.)

Were we to be flies on the wall tomorrow at API, I bet we'd hear at least one exec making the case that print is not yet dead by pointing at the one-day spike in newspaper sales on November 5, as Obamamaniacs snapped up the historic editions as keepsakes. Newsosaur Alan Mutter writes about this phenomenon: "The mad rush among consumers to buy the historic editions proclaiming the Obama presidency is at once a validation of the power of newspapers and a reminder of what ails them." He goes on to suggest: "Newspapers need to get off their haunches, boldly pick their shots, and then rip the lids off their respective towns, turning themselves once again into confident and thundering voices delivering coverage that compels attention and delivers results."

Now, with all due respect to Alan, who I believe is even more of a geezer than I am, newspapers can do that, but it will not create a boom in sales, because it will not change the demographic fact that the average newspaper reader is closing in on 60 years of age, which as I've laid out in some detail, is not a model for a sustainable business. People were buying those November 5 papers as souvenirs, not to read any "thundering" prose. They already knew who won the election. News enterprises need to do their thundering online, first and foremost, if they want to survive.

The moguls need to realize this. They need to digest the lessons of disruptive technology outlined in their own NewspaperNext project. If they watch Michael Rosenblum's video, linked above, they will hear him tell of the whaling captains of New Bedford, America's most prosperous town in 1795. When petroleum was discovered in Titusville, Penn. in 1859, these gents failed to understand the disruptive nature of the new technology, nor the great opportunity it presented. For the less historically inclined, within our own lifetimes there are plenty of examples, from the passenger railroad to the typewriter, of once-thriving businesses that failed to re-invent themselves (and very few that succeeded).

They also need to realize the clock has run out and we're in triple overtime. Newspapers are shutting their doors. Yet, the summit's agenda includes this item: "Strategies for reversing the decline." Forget the declines. We'll be seeing more shutdowns; it's a necessary and irreversible process. We've talked about strategies for reversing the decline for 30 years, and they have brought us where we are. What needs to be applied, instead, are the strategies, already developed, already clear, for creating new news enterprises.

Thankfully though, the execs won't have to pay much to show up, since API has a grant from the McCormick Foundation covering "virtually all expenses to attend the summit conference," including hotel, meals and "up to $500 reimbursement for travel costs." (Too bad private jets cost about that much every 15 minutes while flying.) Hopefully there will be a few bucks left over to publish a report summarizing the conference, or better yet, video.