The route to survival keeps getting trickier.

Not so long ago, the combination of a solid news report and a reasonably enterprising advertising business was considered sufficient to sustain a newspaper.

The bar rose with such added online innovations as hyperlocal coverage and niche efforts aimed at such targets as moms and pet owners, all accompanied by increasingly sophisticated advertising.

Now the American Press Institute's influential Newspaper Next project has concluded, in a sequel to its original report, that it will take a great deal more for newspapers to flourish in the digital era.

The report says newspaper companies will have to venture farther afield and become the indispensable guide to everything that anyone in their local community needs to know to live there. And provide all kinds of solutions for all kinds of needs for virtually every local business.

Published online last week to very light attention by media news reporters, Newspaper Next 2.0 [PDF] is neither concise nor light reading. But there is worthwhile stuff for those willing to hunt through its 110 pages:
  • Business-side readers will want to scavenge the 24 case studies of new products piloted since the first report came out in mid-2006, along with the seven examples of how newspaper companies organized and financed innovation. Some of the efforts are truly unorthodox -- a newspaper-run consignment store for quality goods in Ogden, Utah, (page 64), which provides an upgrade from classifieds to get rid of that couch. Or QC.com (page 37), an ingenious version of online coupons at The Dispatch of Moline, Ill., that works both to attract and retain subscribers and draw in small-business advertisers.

  • Journalists may be more interested in the first few conceptual pages. They will find in a chart on page 7 that shows news is still part of the core in this concept of the future, but it is quickly dispatched as "not big enough" to be economically sustaining. Stephen Gray, managing director of the project, writes that newspaper companies need to redefine themselves as the "local information and connection utility" in their communities. Perhaps, as he writes later, a suitably big and audacious goal would be to create a wiki'ed "Localpedia," comprehensive but built with volunteered user content.
As he told me last fall, Gray found boffo demand for the road show consulting he did during 2007, coaching companies on how to implement Newspaper Next. However, many of the experiments have stuck too closely to traditional core competencies, making money, for instance, by reverse publishing online material into print, still the comfort zone for the ad sales force.
The result: the pace of change is unprecedented but not quick enough; most projects are too small and too slow to develop revenue on the scale needed. So the report urges newspapers companies to "make the leap" beyond news or even news and information. Newspapers should be venturing into unfamiliar territory like online promotions, e-mail advertising and tailoring events information into a personal planning calendar -- as well as finding creative solutions for business beyond traditional advertising.
The new report also contains a useful bonus chapter from consultant Gordon Borrell on maximizing online revenue. It expands on some ideas I wrote about last fall after interviewing Borrell -- newspaper companies venturing into local search with separate commerce-only sites or aggressively going after the nascent local online video ad business. Borrell thinks there is big money to be made there.

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I have had a reservation about Newspaper Next from the get-go that continues this round. I am not persuaded that newspaper people can simply be repurposed into "disruptive" entrepreneurs. The true disrupters -- Craig Newmark, Jimmy Wales, Jeff Taylor of Monster, Serge and Larry -- come literally from a very different place.

This 2.0 iteration also seems to reverse field at times with a vision that sounds like the traditional all-things-to-all-people newspaper model in contemporary digital dress. Gray acknowledges the difficulty of pulling this off, but says it's a shot worth taking for newspapers.

That said, Newspaper Next is worth the considerable money the industry has spent on the study and the attention it has received. I'm not sure that it comes close to offering the answer -- the equivalent of a miracle cure for what ails newspapers. But it asks the right questions, provides new business models and goads urgent action -- all good things.