GLG News by Richard Hine

Implications: With unique users up 94% and total page views up only 45%, it's clear that wsj.com has found more ways to introduce non-subscribers to the frustrations of its site

Analysis: It's always a good bet that any Rupert Murdoch-owned news vehicle will find ways to attract people's attention.  (Just look at Fox News this week: accused of allowing racism against Obama, poor taste in showing a dead model's body, and childishly doctoring the photos of New York Times journalists).

And in a year like this -- amid election fever, financial meltdowns, and general economic woes --  it's only natural that more people than usual would be interested in the Journal's news and opinion.

June numbers show that the Online Journal attracted 16.2 million unique users in June -- up 94%.  Yet total page views are up only 45%.  The logical explanation: the new traffic is being lured to free articles by news aggregators and bloggers, but not sticking around to read more than one or two items (or ferret around to find other free (i.e. less good) stuff.

How valuable is this traffic to The Journal and its advertisers?  Are any of these grazers being lured to subscribe to the product?

With print subscriptions still available for $79 -- with online just a $20 add-on, it's clear that the Journal is having a very tough time convincing average news consumers of the value of its products. It has proved, however, that as more and more people go online for news, they are willing to flit in and out of The Journal's site to follow up a headline.

Increasing traffic is the easy part.  But so far, it only proves that more people than ever are discovering The Journal's roadblocks.

Implications: Massive debt + no real plan + continued business decline = big trouble

Analysis: Hundreds more "employee owners" are heading for the doors at Tribune Company.  Analysts have been speculating for months about possible defaults on the company's loans.  And Sam Zell has found out that buying an old media company is a far different, more complex and intractable proposition than investing in depressed real estate.

Any optimism that surrounded Zell's acquisition of Tribune was short-lived.  He spent the first few months telling employees how bad old management was, what a smart business man he was, and what the long-term benefits of "employee ownership" would be if things played out right.

Of course, things haven't turn out so well.  Zell bought the company without any clear vision of what to do with its media properties.  He lacked any kind of transformational plan for the company, and this, combined with his inability to reach out to advertisers in a way that would help at least limit his revenue declines, has created a potentially disastrous situation.

There's a limit to how far Zell can go by cutting costs and selling assets.  By trying to force through synergy in some areas, he's creating situations where individual newspapers and TV stations may actually be severely weakened -- and have content and/or operational problems -- if the company ends up splitting apart.  And if other investors want to take on a "prize" like the L.A. Times, they'll find that many of its best people are gone and its "hold" on its home market has already been eroded.

As Tribune employees have found out: Knowing your way around a balance sheet is not the same as knowing what to do with a broadsheet.  And being a former "owner" isn't much help when you no longer get a paycheck.

Implications: Newspapers are failing on both fronts.  They are in a severe print advertising recession.  And online sales are slowing -- up  a mere 7% vs. industry-wide growth of 24%.  Falling revenues make reducing debt at Tribune more difficult and put dividends at risk at McClatchy, Gatehouse and Lee.

Analysis: As predicted, newspapers are being severely hurt by the 2008 ad recession. Print revenues are down 14% in the first quarter -- the biggest decline since comparable records began in 1971.  And online growth of a mere 7% shows how badly newspaper companies have done in competing on the web.  Since 2004 the newspaper industry has at least been able to champion double-digit online growth (even if that growth has been generally below the overall growth of online advertising).

The business press is now putting ever-shorter timelines on the future of the industry.  Fortune, for example, has switched from "down but not out" headlines in Feb, 2007 to the more recent headline: "Print-is-dead vs. long-live-print debate rages."  In that article, Rupert Murdoch, is described at expressing cautious optimism that newspapers will be around "for at least 20 years."  Other timetables are not so generous.

Murdoch has a more global viewpoint than most US newspaper publishers, which is one reason for his optimism.  But he has also injected life into the "national newspaper" market with the purchase of WSJ, an acquisition which has possibly helped USA Today -- a 2% gainer in the otherwise down Gannett portfolio.

The local ad recession is bashing the likes of Gatehouse, Lee and McClatchy.  Bloomberg quotes John Janedis at Wachovia as saying those companies' dividends are all at risk.

Meanwhile, newspapers are still lagging in every of area of online -- from content creation to ad sales.  A quick look at the QuadrantOne website launched by Tribune, Gannett, Hearst and the NYT Company back in February with the goal of boosting online sales shows remarkably little change since it went "live" in February.  That's only four months ago.  Which is not long in the history of newspapers.  But it's about 17 years in internet time.

Implications: Amid falling ad revenues, is Sam Zell destroying the LA Times (and other Tribune papers) by cutting news pages, making newsroom decisions based on quantity not quality of reporting, facilitating the exits of his best staff and dumbing down his papers beyond recognition?

Analysis: The Washington Post's Harold Meyerson rips into Sam Zell today, calling him a "human wrecking ball" who may well destroy the L.A. Times. 

In Meyerson's view: "A paper that is both an axiom and an ornament of Los Angeles life, that helps set the political, business and artistic agenda for one of America's two great world metropolises, is being shrunk and, if Zell continues to get his way, dumbed down."

Yes, ad revenues are falling. And yes, it's true that no one reads all the articles. But a smaller paper, with less original reporting and a heavier reliance on wire service copy will only accelerate the trend of smart, affluent people to the internet for all their news.
 
Papers are in decline. And maybe the best any newspaper company can hope to do is delay the inevitable. But in the meantime, many readers still have a strong bond with their paper. They still recognize that the act of reading on newsprint (with the paper's editor as a guide) will lead them serendipitously to stories they might otherwise find nowhere else. And, I'm sure, they still occasionally read one rare article or column that, all by itself, reaffirms their need to renew their subscription.
 
As Meyerson spells out, one of the most troubling aspects in the Tribune announcement is that it was, in part, driven by an analysis of the volume of material created by each reporter (the New York Times earlier noted that this analysis signaled to Randy Michaels that some people were not pulling their weight and "would hardly be missed.") Thus, all future Woodward and Bernsteins who might think of applying to the Chicago Tribune or LA Times are put on notice that the importance of the story -- or the depth of the reporting -- no longer matters.

Or, as they used to say in that old British sitcom: "Never Mind the Quality, Feel the Width."

Implications: Individual ideas from employees may help Tribune innovate in new and interesting ways.  But Sam Zell still needs to define a vision of what the company is -- and what it can be.

Analysis: Having spent weeks convincing his 19,000 Tribune employees that they are uncreative, oversensitive and bureaucratically stymied, Sam Zell is now trying a different approach: He’s ordering every Tribune employee to get creative in the kind of new, different and breathtaking ways that can actually save the company.

Ideas will be put into a massive, interactive suggestion box and ranked and refined by the Tribune employees themselves.  No doubt many managers will try and dust off old, silo-based ideas and try to get their staffs to give enthusiastic "thumbs-ups" to the ideas that benefit their groups.

I can't help thinking that these beaten-down employees need to be inspired (or at least directed) by some kind of vision that reaffirms why they should continue to put their hearts and souls into the company.  I don’t have access to the suggestion box myself, so I’ll post my ideas here instead:

1.  Define the corporate mission.  For example:

Tribune’s goal is to be the best (bleeping) media company in the world, as defined by content, innovation and business performance.

2. Reaffirm the mission of Tribune’s newspapers.  For example:

The goal of every Tribune newspaper is to be the essential source of news and information for the audience it serves, understanding and “owning” the stories that matter most to its readers, delivering the content when and where it is wanted – and continually reaffirming its importance within the business and cultural life of its geographic community.

3. Integrate and innovate for readers and advertisers.  For example:

The goal of every Tribune brand is to integrate its content into the fabric of its customers’ lives.  This means: a) delivering content across all relevant media platforms; b) adapting as necessary for different audience segments; c) engaging consumers in a two-way dialogue that allows divergent views to be represented; d) creating a bond that has unrivaled value for consumers and advertisers alike.

OK, Sam, I know none of this is earth-shattering advice.  But it’s not only free, it’s fundamental.  And it needs to be repeated often, with or without profanity.

Implications: Despite its unique status -- and the backing of Rupert Murdoch -- The Wall Street Journal is not immune to the pressures facing the newspaper industry.

Analysis: Here’s the good news at the Murdoch-owned Wall Street Journal:  According to new CEO Les Hinton, online is doing well – and prospects are good in Asia.

From that we can extrapolate: The US print Journal is hurting.  And in Europe, with stronger competition from Pearson’s FT and the Economist, the paper is lagging too.

NewsCorp had previously announced it would no longer report WSJ US print lineage – a clear sign that it didn’t expect to have a steady drumbeat of good news to promote to advertisers.

In an interview with the Murdoch-owned Australian, Hinton mentions gains in consumer advertising at the US Journal, which leads to an obvious conclusion: there’s little or no good news to talk about in the core B2B, Financial or Classified advertising categories on which the Journal relies.

Under Murdoch, content at The Journal continues to evolve (more politics, more sports) and the launch of WSJ magazine in September will give The Journal a new way to compete with the The New York Times Magazine and its successful spinoffs, like T.  NewsCorp and The Journal will no doubt do all they can to make the premiere issues of WSJ look good.  But at what cost?  How much of the new magazine advertising will come out of the newspaper itself and how much will be new to the brand?  And with potential cuts to luxury advertising budgets throughout the year, how many advertisers are going to want to switch out of proven Conde Nast and New York Times schedules?

Virtually every newspaper is suffering in the current advertising climate, and the Journal seems to be no exception.  It continues to hedge its bets with wsj.com, keeping it "paid" while evolving to a "hybrid" formula (which makes its least valuable content free).  The "value" of the website also offers NewsCorp a way to stem declines in print circulation, with bundled subscriptions that make the 6-day print Journal available to subscribers for less than $1 a week.

Implications: Alternative media spending is growing rapidly despite the recession.  More important, because of the recession, most of this new spending will have to come from "traditional media."

Analysis: The question being posed is: Are big agencies and clients ignoring "alternative media"?

Clearly not.  Advertiser spending is migrating rapidly to these new media choices -- mainly at the expensive of traditional media.

The fact is, though, that many consumer segments are embracing the new options faster than big advertisers and agencies.

But one thing's for sure: Where consumers go, advertisers follow.

In the short term, this may cause frustration in the "richly diverse and innovative" vendor community.  ("We've built a better mousetrap--why can't they see that?")

The reasons are varied, including: a) big advertisers have a natural tendency to take a wait and see approach to all new media possibilities -- and big agencies won't invest (or divert) major resources until advertisers create the appropriate budgets; b) advertisers know and understand what they're doing already -- and if it's working, why rock the boat?; c) they have long-standing personal and business relationships with the media companies they already deal with; d) it takes time and people-power to evaluate, approve and create new forms of advertising -- and that has to happen on both the agency and client side; d) the diversity and innovation of vendors reinforces the tendency to wait and see -- why not sit back till the most powerful and effective alternative media forms emerge and dominate?; e) advertisers need to figure out not only how to create appropriate marketing messages based on the platform and when/where/how the message is delivered and received -- but also to capture and respond to the new datapoints generated by alternative media.

The shift may not be happening fast enough for some of the vendors in the mobile media community -- but it is happening.  By 2012, 25% of all media dollars are forecast to be spent in alternative media.

Implications: Cutting costs and calling the old bosses stupid won't be enough to turn the Tribune Company around.  If Sam Zell doesn't have answers for the company's problems, who does?

Analysis: Sam Zell’s tour of Tribune Company offices is fun to watch on YouTube – but hell to sit through if you’re a Tribune employee.

In fact, if you sit through a lot of the video clips that have been posted online you can learn quite a lot about Sam Zell:

1. He’s “a business man, not a newspaper guy.”
2. He thinks the old managers at Tribune Company were a bunch of losers.
3. He likes to swear a lot.*
4. He’s rich and he’ll still be rich even if his Tribune experiment fails.
5. He’s all for puppies on the front page if they sell papers.
6  He doesn’t want reporters thinking about Pulitzers when they should be thinking about revenues.

(* It’s interesting to note that Chicago Tribune readers have to be protected from the kind of language that Zell directs routinely to Tribune employees.  One seven-minute video clip from Zell’s employee roadshow posted to the Chicago Tribune website was bleeped NINE times.)

So how well is Zell doing at motivating his 19,000 employees?

In a sign that Zell’s act is more troubling than inspiring, the LA Times bureau chief called his recent visit a “suicide bombing.”

And Bloomberg quotes one 25-year LA Times veteran who sums it up: "Zell makes a lot of noise but he hasn't articulated the new model other than saying we're doing it wrong."

Revenue and cashflow are continuing to decline. Hundreds of employees are being laid off.  And Bloomberg also notes that “Tribune bonds due in 2015 are trading at 40 cents on the dollar.”

Clearly, turning Tribune around – and motivating a workforce of 19,000 employees -- will require a lot less profanity and a lot more vision.

Implications: 2008 is already shaping up to be another tough year for newspapers.  Falling revenues have prompted big layoffs at New York Times and Tribune.  A recession only makes matters worse.

Analysis: When marketers want to reduce spending quickly, it’s easy to cut spending in newspapers.  Production cycles are much shorter than monthly magazines.  Advertisers are not locked into “upfront” commitments like they are on TV.  And advertisers are less wedded to their newspaper creative than they are to their expensively produced commercials.

That’s why newspapers have always been one of the categories hit hardest going into a recession.

Whatever label we give to the current economic slowdown, it’s already got all the hallmarks of a recession for the newspaper category.

We saw it last year when Classifieds tanked in all three major categories – Help Wanted, Real Estate and Automotive.

We’ve seen it in the end-of-year ad figures for 2007.

And we’ve seen it at Tribune this month where 500 jobs will be cut because, as Sam Zell put it in a widely publicized memo to employees: “significant declines in advertising at our newspapers are putting downward pressure on our cash flow.”

The New York Times, facing similar pressures, announced 100 job cuts of its own.

Newspapers usually do very well coming out of a recession.  That won’t happen this time.

When the economy improves, marketers traditionally rush back into newspapers to promote products, services and special offers.  Here’s when newspapers’ ability to take ads quickly, print more pages as needed – and deliver messages directly into consumers’ hands – come into play.  This time around, things will be different because:

1.  Classified advertising’s decline is, as I’ve said in other articles here, a case of the cyclical reinforcing the secular trend to the internet.  After the dot-com bust of 2000, Help Wanted ads in print never attained their previous levels.  This time around, do not expect to see Real Estate, Automotive or Help Wanted to get back to their ‘05-‘06 levels.  Newspapers will continue to try to sell the benefit of Classifieds that appear both in print and online.  But the future of Classified is predominately online, with print being relegated in future to a nice-but-non-essential “add-on.”

2.  Newspaper display advertising will also be challenged by new competitors for “post-recession” advertising spending.  All forms of online and mobile advertising are likely to hold up well during the current recession – and continue to do well in the upswing.  Plus new digital and video technologies in the out-of-home space will be competing very aggressively – as will radio – for every available media dollar.  Meanwhile, cable TV is staying strong and capturing TV revenue from the networks.  It all points to printed newspapers playing a smaller and smaller role in marketers' future media mix.

To sum up: 2008 will be another tough year for newspaper advertising.  And it’s hard to see 2009 being much better.

Implications: Four big newspaper players have created a new company to sell online advertising to national advertisers.  QuadrantOne will have dedicated inventory on 175 newspaper and TV web sites, reaching 50 million unique users in 27 of the top 30 markets.

Analysis: The launch of QuadrantOne this April will give advertisers a new way to reach the “premium” users of quality local news sites.  

The idea makes sense.  

QuadrantOne offers advertisers a one-stop shopping option to place ads on newspaper and TV websites around the country.

Importantly, advertisers will be guaranteed premium inventory on the branded new sites, something The Wall Street Journal noted wasn’t guaranteed through the Yahoo newspaper partnership.  (I didn’t link to that article as it’s behind the subscription wall!)

“National” newspapers like NYT and USA Today are not included, but it seems that the QuadrantOne will let advertisers cherry-pick from some high-quality sites including Tribune’s ChicagoTribune, NYT’s Boston Globe and Hearst’s San Francisco Chronicle.

And another good sign: Interim CEO Dana Hayes tells Mediaweek that: “quadrantONE’s technology partner, which he would not identify, would let advertisers buy based on content, context and behavioral targeting.”

So what’s wrong with this picture?

Maybe nothing.  But as of now, QuadrantOne’s bare bones website at www.quadrantone.com isn’t likely to impress potential advertisers.  

And it could be taken as a bad sign that all 175 of these local players have “premium, above-the-fold” inventory they can throw into the pot.  This fact alone indicates that -- on both the local and the corporate level -- the four companies involved have not done a good enough job selling their “premium” online inventory against the likes of Google, Yahoo, Microsoft and AOL.

But looking at the bright side…

As a stand-alone entity, QuadrantOne, if done right, should boost online revenues to the four partner companies.  This will be especially good news to the smaller sites that aren’t currently monetizing their online eyeballs as well as they could be.

QuadrantOne could also serve as a breeding ground for the online sales talent that these four newspaper companies desperately need going forward.

Because right now, recruiting good online sales talent remains a major challenge for newspapers.

Implications: Newspapers are facing more declines in readership and advertising.  Online gains are not making up the losses.  Costs are too high.  And continued cost-cutting makes newspapers less appealing for readers and advertisers.

Analysis: The traditional strengths of newspapers have been rooted in delivering a trusted, relevant and useful source of news to readers and a  highly-involved, geographically targeted audience to advertisers.

There weren't too many games in town.  Advertisers -- from the local classified seller to the national brand -- could tell very quickly if the ad worked.  If it did, they ran more.  If it didn't, they tried a new approach.

However, as the game shifted online, and more and more players entered it -- bloggers, news aggregators, Craigslist, national news brands, local TV stations, etc. etc. -- newspapers were too slow to change and recognize that, for a whole new generation of readers, newspapers, as a format at least, didn't matter.

For too long, "online" was given a free ride within the newspaper, viewed as an incremental revenue stream, not carrying its proper allocation of costs. 

Meanwhile, we have entered an age where editorial, production, sales, marketing and distribution costs for a print newspaper can no longer be carried indefinitely by circulation and advertising revenue.  Without a significant contribution from online, the business models for most newspapers are out of line with the new realities.  Yet online is still, on average, contributing only 7% of an average newspaper's revenues.

Today. most readers don't need printed newspapers for local weather, sports, business, politics and general interest news.  Anyone under 40 with a broadband connection has been trained to get what they need, when they want, either on their PC or directly to their mobile device.

In 2007, newspapers lost ground in every way. Classified and display ad sales slumped.  Circulations declined.  Investment in staff and product was cut.  And newspapers lost ground on the web to pretty much everyone else -- especially the national and local TV news providers.

Things don't look a lot better in 2008. 

Dow Jones, now part of NewsCorp, may succeed best, injecting energy into the national news category, and extending The Wall Street Journal brand globally and across platforms.

Gannett and USA Today in particular may benefit in a perception among advertisers that there's still life in the national newspaper category.  Gannett has an opportunity to do even more online to make its local papers and national USA Today content work well together - and cement USA Today as the preferred (and familiar) newspaper for business and leisure travelers when they find themselves away from their hometown routine.

The New York Times will see its national circulation challenged, but conversely will succeed better than most online.  Web traffic has jumped substantially since Times Select went free.

Tribune Company under Sam Zell's leadership is announcing new layoffs amid continued advertising weakness.  It seems that the "new sheriff" hasn't arrived in town with any ready-made solutions for the newspaper business to learn from.

The national economy will likely to put pressure on everyone else too.  Classified advertising in real estate, help wanted and automotive has declined and migrated to the web.  This is the case of a cyclical downturn accelerating the secular trend.  Newspapers shouldn't sit around and wait for the economy to rebound and Classified ads to come back.

The problems they face are far, far bigger than that.

Implications: News Corp has decided to dismantle, not demolish, wsj.com’s paid subscription wall. Weakness at the print Journal may be the real reason for the change of plans. At $1 a year, Barron’s is also facing some serious “paid” subscription challenges.

Analysis:

For months Rupert Murdoch has been talking about making wsj.com free. It looked like a no-brainer. And I, for one, thought he would do it.

But the problems News Corp (NYS:NWS) inherited at Dow Jones ensured that the decision to go free wasn’t that simple. And the talk is now turning to the “hybrid model,” where high-value content stays behind a paid wall.

What’s the difference between “hybrid” and “free”?

For a lot of readers, there is no difference. As The Journal itself reports, its free online content already includes: “breaking-news alerts and personal-finance and lifestyle content, as well as videos, blogs, podcasts and other interactive elements. This month, the Journal began offering free access to all of its Opinion section.” Plus: “online readers can come to the Journal's site from Google News and read any individual article free.” More free content will likely be made available in the months ahead. Meanwhile, a lot of “free” sites, already charge for a variety of content, including archives. All of which makes the difference between “hybrid” and “free” virtually meaningless for the more casual online reader.

However, wsj.com’s paid subscribers get access to a depth and breadth of financial information and research tools that go beyond what other free sites offer. It’s high-value stuff worth a lot more than the subscription price to those who use it. This is part of the rationale for the hybrid model.

Why does News Corp care about the distinction?

It may be that Murdoch simply enjoys the fact that he psyched out The New York Times (NYS:NYT), which recently abandoned its Times Select product and left The Journal as the only paid news site in town. The trouble with that argument: The Times has seen enormous traffic gains since it tore down its wall. Announcing that wsj.com is free – at least in terms of daily news content – would give the site a tremendous traffic and ad sales boost.

The real reason for the distinction – and the delay in making wsj.com free -- may be this: After years of disastrous consumer marketing efforts at Dow Jones, the print Journal’s paid subscription base has become so eroded it now needs the “value” of the online Journal to prop up its faltering circulation and readership. Because it has failed to market itself effectively – and entirely missed the opportunity to broaden its readership when it launched Weekend Edition in 2005 -- The Journal is now falling prey to the same circulation pressures as other newspapers. And this is where the paid site helps prop up the print edition.

“Bundled subscriptions” – where readers are offered the chance to buy the print and online Journal’s at a significant discount to the “regular” print-only price of $249 – are crucial to managing The Journal’s circulation level. (Current prices available on wsj’s subscription site: $79 for a year of online; $99 for a year of print; $125 for a year of both.)

In other words, if you want to subscribe to the Online Journal, you can add-on 6 days a week of the print Journal for just $46 a year (vs. $681/year for The New York Times.) For most people in business and finance that’s a no-brainer.

It’s all about ad sales.

Ad sales at the print Journal are still crucial to Dow Jones’ overall performance. And the image of The Journal as the essential daily paper for American business is crucial to that sales story. That’s why maintaining print circulation is essential.

Murdoch and News Corp – and the new Dow Jones management team – need more time to figure out how to fix what they acquired and market The Journal print edition more effectively.

Meanwhile, if you’re interested in the Journal, subscriptions are going cheap. And things are even worse at Barron’s, where a recent mailer offered the venerable weekly for just $1 a year with the purchase of a discount subscription to Smart Money.

Implications: Competition for the global English-language news audience is not based on geography: readers can flip easily between The New York Times or The Times of London, The Wall Street Journal or The FT, CNN or the BBC.  So far, the Brits are doing a better job of internationalizing their offering.

Analysis: New research shows that major British news sites -- including the BBC, The Guardian, The Times and The Daily Telegraph are attracting more than 50% of their online audiences from readers outside the UK.

In the battle for the global online audience, these brands are doing a better job than many US sites in targeting international readers.  Some reasons:

Sports. Yes, one reason international readers go to UK sites is to find news and scores for non-US sports like cricket, rugby and football (sorry, soccer).  But on a site like the BBC's they also find news and results from the US too, like scores and slideshows from the NFL playoffs.  To find British soccer news on CNN, you first get bounced to SI.com and have to figure out how to navigate through a different site to get what you need.

News. UK-based sites have a reputation for a more global approach to news, politics and business, putting US stories in the appropriate context vs. important events in Europe, Africa, the Middle East, China, India, etc.  They also offer a perspective on how the world views America, from the war in Iraq, to the upcoming election, to the global impact of Britney Spears.

Attitude. British news organizations often feature columnists and perspectives that take a clear point of view, are funny, politically incorrect (by US standards) and hard-hitting.  It's a more in-your-face style than traditional American newspapers, but perhaps more in keeping with the opinionated, blog-fueled online world.

Original Content.  The UK newspaper-market is still highly competitive on a national basis, so each newspaper is creating original content designed to scream at newsstand buyers. Often, these stories are the kind that international sites love to feature and link to.  Meanwhile, too much of what is on US sites is of the "me-too" kind: bland journalism that repeats what readers (wherever they may be) already know.

The US sites will need to do more to truly compete overseas.  The Guardian is encroaching more and more onto US-turf, with a specific online edition to compete with The New York Times -- and international ambitions to be the global voice of quality (left of center) journalism. 

Meanwhile, Rupert Murdoch's News Corp is perhaps best positioned to take advantage of the global opportunity.  With a prominent newspaper presence on both sides of the Atlantic, he will be hitting the NY Times (and the FT) in the US and overseas with the one-two punch of The Wall Street Journal and The Times of London.  News Corp will also be looking to expand the Fox News and Business brands online (they are already the TV equivalents of News Corp's attitude-heavy newspapers).  With Fox attacking on one side, Time Warner's CNN will continue to be challenged by the BBC, particularly in Asia, in both TV and online.

Implications: Rupert Murdoch is already making one thing clear: Under NewsCorp, the new Dow Jones will not look or operate like the old Dow Jones.  That will make life interesting for its own and many more media brands.

Analysis: For months, Dow Jones management has signaled its resistance (or lack of imagination) when it comes to embracing a new, more aggressive, more global vision for the venerable-but-fading publisher of The Wall Street Journal.

But things are changing.  A new CEO and a new publisher at the Journal are just the first steps in putting the team in place that will embrace Murdoch’s vision, integrate Dow Jones brands into the global plans of NewsCorp, and make life a lot more interesting for readers, advertisers and DJ’s employees and competitors.

Here’s an early assessment as to what it means for some of the most affected “content” brands.

National Newspapers:  Winners: WSJ and USA Today.  Loser: NY Times.  A re-energized Journal will breathe new life into the category and remind advertisers that millions still read national print newspapers each day.  The Journal and Gannett’s USA Today will be the winners, retaining a first-or-second-read status for their at-home and business-travel audiences.  The New York Times will see its national circulation ambitions severely challenged, especially beyond the northeast.

Magazines: Losers: Time and Newsweek. There are no real winners among news and business magazines.  With the Journal and the Times battling even more fiercely in general news and political reporting, the weekly newsmagazines will continue to decline in relevance and influence.  Business Week will also face new challenges.

Online: Winners: WSJ, NYT, Marketwatch.  Losers: Forbes.  The Times has already seen rapid traffic growth since abandoning Times Select, proving that millions of people are hungry for content (but not quite hungry enough to pay for it). A free WSJ website is coming soon.  And that will mean more visibility for WSJ stories all day and every day, more links from the blogosphere and more visibility all around as NewsCorp promotes WSJ’s news and business reporting across its other platforms.  In the old Dow Jones, a free WSJ would have been a threat to Marketwatch.  But in the new Dow Jones, more traffic to WSJ will mean more traffic to a better-defined and better-marketed Marketwatch site aimed at retail investors.  All of this is bad news for other general business sites, especially Forbes.

International: Winner: WSJ.  Loser: Financial Times.  Murdoch (and his son James, now in charge of NewsCorp’s European and Asian businesses) will renew The Journal’s global ambitions and make the Journal brand a more accessible source of news (across all platforms).  This will not be a return to the days of expensive efforts to increase print circulation, but a more integrated media effort.  The FT will likely suffer.

More twists and turns will be added to the tale in the months ahead (have we heard the last of NewsCorp-LinkedIn?), but Murdoch is already signaling his intent to make life a lot more interesting for Dow Jones and its competitors.

Implications: All newspapers need to recognize and respond to the changing information needs of their geographic and demographic constituencies. If the Merc's transparent reinvention process succeeds, other newspapers will want to emulate it -- fast.

Analysis: The San Jose Mercury News is attempting a bold reinvention.  And it’s doing it with an unusual degree of transparency.  Why?

First, its newsroom has been cut in half over the past few years.  Second, it has been sold twice in 20 months, by Knight-Ridder and McClatchy and is now owned by Media News.  Third, it recognizes that the main community it serves -- Silicon Valley –- doesn’t exactly represent the best future market for a dead-tree, ink-on-paper product.

Rather than continue the “death by a thousand cuts” process, the Merc is committed to figuring out a future that consists of a more focused (and cheaper to produce), more useful daily paper, plus a beefed up website that it hopes will keep it relevant and essential in the lives of its community. And it’s documenting the project online at: http://www.mercurynewsphoto.com/rethink/

In the words of the Merc’s Matt Mansfield the goal is create a print-online combination that becomes: “the meeting point of the larger conversation the community is having about itself.”

So far, the effort has produced the full gamut of reader responses.  On one end, the “traditionalists” complain loudest about how the Crossword and Sudoku puzzles keep switching pages.  On the other, Silicon Valley leaders, when given a preview of the newspaper’s (self-perceived) radical redesign, told editors they didn’t see much difference.

So, can this newspaper be saved?  The new paper is expected to debut early next year.  Hopefully, it will reflect smart editorial and design decisions that other papers can learn from.  Ideally, these decisions will have been made after the paper’s open dialogue with their reader and opinion-leader community.

However this plays out, it’s worth watching this effort closely. If we’re lucky, we’ll have a new model to show us what the print paper can and should be, and, equally important, what it can no longer hope to be.  A paper that remains or becomes a must-read because it gives readers more of what they need from the paper –- and less of what they are already getting elsewhere.

Implications: While Dow Jones worries that a free wsj.com could hurt other parts of Dow Jones, Rupert Murdoch will be more interested in a free wsj.com hurting  Dow Jones’ competitors

Analysis: Something funny happened over the past 11 years.  Not only did wsj.com slowly amass 1 million paid subscribers, who now pay Dow Jones an estimated (perhaps overstated) $63 million a year in subscription fees.  But, as The Wall Street Journal and other news sources have reported:

- Google emerged as a company that transformed the media business and grew to have a $200 billion market cap.

- MySpace got invented, got big, got bought by NewsCorp (just like Dow Jones) and got even bigger, now counting more than 200 million members.

- Apple created and sold more than million iPods, sold more than 3 billion downloaded songs through iTunes, and launched the iPhone.

Meanwhile, in other news: the Euro got introduced and Eurozone membership expanded to 316 million people in 13 states, the Chinese and Russian economies boomed, and, oh yes, the world’s population grew by one billion people.

The world has changed. And the reality is this: Millions are willing to spend $5 each day at Starbucks, but only one million people in the world are willing to spend $5 a month for wsj.com.

Dow Jones has always prided itself on being a “content” company, not a “marketing” company.  And The Journal and wsj.com certainly offer great content.  But creating the world’s best business and financial content and asking consumers to pay for it is no longer enough.  There are simply too many other choices, and too many ways the Journal’s most essential news gets disseminated instantly through other free sources.  

While The New York Times has seen web traffic jump to record levels in the weeks since abandoning Times Select, Dow Jones is continuing to think “inside the box” – agonizing over the ways a free wsj.com will cut short-term revenue, accelerate print Journal declines and affect the plans of other Dow Jones businesses like Factiva and Dow Jones Newswires.  (Of course, if Factiva’s and Newswires’ future successes are dependent on repackaging Wall Street Journal content, those business models will need looking at, too.)

There is, of course, another way to look at the The Journal’s situation.  It’s a global, expansive, confident, influential, 24/7, multiplatform, aggressively marketed vision.  It's a vision that aims to put the Journal brand front and center throughout the English-speaking business world and beyond.  It's the vision Rupert Murdoch clearly plans to adopt and enforce.

Implications: New leadership, plus freedom from “synergy” and “cross-divisional cooperation” will give Time Inc. an opportunity to figure out its future

Analysis: The idea that new Time Warner CEO Jeff Bewkes will spin off Time Inc is gaining traction.  Why?  Because it makes sense from both a parent company and operating unit perspective.

To Time Warner and its investors, Time Inc. represents a business that’s flat and looking forward to an extended period of decline.  Recent closures include Business 2.0, LIFE and Teen People.  And even if online revenues are up, there’s still very little reason to be excited about what Time Inc. can do to help the long-suffering (AOL) Time Warner stock price.

From the Time Inc. perspective, things look a little different.  As the internet has transformed the media business, Time Inc has for years been forced into corporate strategies and missteps dictated more by the myths of “synergy” and “cross-divisional cooperation” than by commonsense.

With a stable of great-but-tired brands, Time Inc needs to find new ways to connect with consumers beyond its printed pages.  

Liberation plus new leadership will give the company at least a fighting chance to figure out what comes next.

Implications: Paid circulation at most newspapers is falling.  Newsstand sales are falling fastest of all.   While lower circulation levels help publishers cut costs now, they also reinforce advertisers' negative perceptions of the category

Analysis: There are more than a million fewer paid copies of newspapers being read today than there were on the same day last year.

On average, daily paid circulation is down 2.5%, and Sunday circulation is down 3.5%.  Among the top 25 newspapers, 21 are down, and only one is up more than 1%.

Even worse: newsstand sales, a key measure of vitality, are down 5%.

While the industry is “moving toward (audience) numbers that take into consideration all their products, including newspaper Web sites, not just paid circulation,” the reality is that print advertising still accounts for more than 90% of ad revenues at most papers – and most newspapers are not registering the kind of growth in online traffic that will make up for the declines in print advertising and circulation revenue.

Packaging audience numbers across media platforms sounds great, but it only works for an advertiser if his or her brand message is delivered effectively to the consumer on each of those platforms.

With the recent freefall in classified advertising, newspapers have been struggling to restore a sense of stability.  Cutting back on inefficient circulation is one way to eliminate costs.  But it only reinforces the perception and the reality among advertisers that newspapers are in decline and online is, more and more, the place to be.

Implications: WSJ.com is continuing to promote its paid growth.  But new subscribers are "paying" little or nothing to access the site.  Rupert Murdoch will move quickly to make the site free -- making the Journal a bigger player in the global debate, and the global ad market.

Analysis: Dow Jones executives are trumpeting the “million subscriber” milestone as proof that the paid subscription model works.

It doesn’t.  It hasn’t for years.  And Rupert Murdoch won’t wait long to change it.

In fact, the very way that wsj.com’s “growth” in paid online subscribers was achieved highlights the weakness of the Dow Jones case.  Bundled subscriptions – where readers pay one low price to get both the print and online versions – have been used to lure and renew subscribers.  Today, anyone who wants the print edition can Google “wsj subscription” to instantly get a deal from the Journal which includes wsj.com at little or no extra cost.  If wsj.com is effectively free, no wonder so many people are willing to almost pay for it.

Are these new subscribers really buying the print edition?  How often are they using the online edition?  More importantly, how many other millions of readers is wsj.com missing out on by maintaining its subscription wall?

The New York Times has already abandoned Times Select.  In doing so, it’s not only looking to increase traffic and ad revenues to its site.  It’s looking to stay relevant in the real-world of news and opinion, where online readers want to connect to the stories that matter in a seamless, unobstructed way.

Murdoch’s News Corp is buying The Wall Street Journal for the quality of its journalism – not the limited scope of its current audience.  He will soon hand its editors a bigger megaphone – in the form of a free, globally promoted site that will finally get the chance to take on the world.

Implications: Dow Jones management is still trying to explain the wisdom of a paid wsj.com site.  Their new boss isn't likely to listen.

Analysis: Here’s a great example of the smart thinking to be found at the modern American newspaper:

For 11 years, wsj.com has trained non-subscribers not to expect access to its paid-only content.

Now, today’s Wall Street Journal reports, web surfers connecting through Google News (NMS: GOOG) “can read a single article for free but are blocked from entering other parts of the site.”

OK, so far.  But guess what?

The article also reports:  “According to an internal Dow Jones (NYS:DJ) review of WSJ.com, nonsubscribers only stay on the site for an article or two, unlike subscribers, who stay on the site much longer.”

In other words, it took an internal review to discover that people who don’t have access to content don’t read it!  And these managers want to use this revelation as an argument for keeping the site paid.

I would hate to be part of the team responsible for that stunning insight when the NewsCorp (NYS: NWS) deal for Dow Jones gets closed.

Murdoch will make wsj.com free whether current staffers like it or not.

Meanwhile, today’s Journal article also points out that newspaper websites in general are still making the mistake of thinking they are competing with other newspaper sites for online readership.

The reality is different: For digital-first consumers, the internet IS the newspaper.  It doesn’t matter whether they read a story on NewYorkTimes.com (NYS: NYT), CNN.com (NYS:TWX) or HuffingtonPost.com.

The challenge is to have news these consumers want – and that they can’t find anywhere else.  That means creating a dynamic site that is a must-read for a paper’s core audience– plus great coverage of important topics that encourages surfers to connect in big numbers via other sites, aggregators and blogs.