A new survey-based study from the Pew Internet & American Life Project reports that the percentage of adults owning tablet computers went from 10% to 19% between mid-December and early January, with the same growth rate seen among black-and-white e-readers like the Kindle.

Source: The Dec. 2011 and Jan. 2012 Pew Research Center's Internet & American Life Project

So how should content providers and publishers react to this news? As the founder of e-book publishing startup BookBrewer, I live and die by these kinds of numbers, and they're obviously good for us. But they should serve as a wake-up call for traditional publishers -- especially newspapers, magazines and book publishers that still manage their businesses around shrinking print audiences.

The Pew study said tablet and e-reader adoption sped up due to holiday gifting, but it was amped by two new value-priced color tablets: Amazon's $199 Kindle Fire and Barnes & Noble's new $249 Nook Tablet, both of which are far below the iPad's $499-$829 price point. Amazon doesn't release exact figures on the Kindle Fire, but investment research firm Morgan Keenan recently estimated that Amazon sold 4-5 million Fires over the holidays at the expense of 1-2 million iPads that Apple would have sold absent the Fire.

Also noteworthy in the study is that the sex divide has disappeared -- at least for tablets. In November of 2010, 60% of tablet owners were male. Today? It's at a healthy 50-50 male to female ratio. Curiously, black-and-white e-readers went in the opposite direction, with women now making up 57% of of e-reader owners. (My theory on that based on e-book sales data I'm privy to as the owner of BookBrewer is that romance e-books play a role, but I digress.)

In both cases, people with more education and higher incomes were more likely to own a tablet or e-reader, although the difference was slightly less for e-readers.

GOODBYE PRINT?

So what's left for the print market? This is a valid question because the contrast in trends for tablets and traditional print couldn't be more stark. Think about it. In just one month the number of people with a sexy new device that can display books, websites and streaming video doubled. When's the last time you saw those kinds of figures for mass-market newspapers or magazines?

What's more, these tablets are generating significant sales from content after very little time on the market. An RBC Capital analyst projects that the brand-new Kindle Fire will make Amazon $100 over the lifetime of the device. The revenue comes directly from sales of e-books, apps and streaming content from Amazon.

Compare that to Pew's figures on yearly newspaper revenue, which has been going in the opposite direction for some time.

Having been completely out of the newspaper industry for over two years, I see the glass as more than half full, but I keenly remember how it felt to work for a newspaper and feel tied to a tanking business model. That's partly why I've been urging journalists and news organizations to repackage and publish their content as e-books. E-book sales were surging even before the numbers looked this rosy, and they represent a new way to monetize content without advertising.

And here's the great news there. I now have multiple, solid examples that readers buy e-books about news.

Our first news partner, The Huffington Post, has published several e-books through BookBrewer that quickly moved into the No. 1 spots of their categories -- including this latest about the Occupy Wall Street movement. And we're seeing a similar effect with The Denver Post's first e-book about Tim Tebow and the Denver Broncos. Based on these successes, we're openly looking for more news organizations that are ready to jump into the e-book world with both feet, so let me know if that means you or your organization.

Here's just one example. On January 8, we started pre-order sales for the Post's Tebow book as a Print on Demand paperback through our partner Consolidated Graphics. Even though readers have a choice between e-book and print, we've been amazed to see the print orders outpace the e-book orders by a 3-to-1 ratio. The book's print pre-order sales reached $23,000 in just 10 days, and they show no signs of slowing down.

I heard something similar from the folks at O'Reilly Publishing at a session I ran at their recent NewsFoo camp in Phoenix. Founder Tim O'Reilly told participants that his company sells twice as many e-books from the O'Reilly website than it does directly through Amazon. Those e-book sales are high, but print sales still make up at least half of their business. More and more of those print books are printed on demand from online orders, too.

GIVE INFORMATION CONSUMERS WHAT THEY WANT

Here's what I see as the broader trend. It's not the printed book itself that's dying, but rather the way that books are mass-marketed, shipped to physical book stores, retailed, sold at a loss, and ultimately shipped back to publishers for a refund. (And what does that tell you about my view on daily newspaper delivery? It should be obvious. Stop the insanity! Newspapers should be personalized and on demand, too.)

On the same note, the growth in tablets and e-readers says more about peoples' desire for convenience and choice than it does about gadget lust.

Information consumers now expect to get whatever they want, whenever they want, in whatever form they choose. Tablets, e-readers and smartphones speak directly to that need, but so does an impulse buy of a printed book that shows up at your doorstep five days later. In fact, more and more of those purchases initiate from smartphones. The need for on-demand, multi-platform publishing -- perhaps including an app or two -- has never been more important.

On her blog, Arianna Huffington explains how "A People's History of the Great Recession" was written by a staff beat reporter who was assigned two years ago to put "flesh and blood on the data of our economic crisis." "How We Won" is by a HuffPost blogger who has been a leading advocate for gay rights in the military. Both are excellent examples of writers curating years of work into a narrative and selling it as an e-book -- something I and others have been encouraging journalists to do for the last year.

This is a sort of homecoming for BookBrewer to the journalism world, as our company evolved from a Knight News Challenge project called Printcasting. While most of our business now comes from top-selling novels, including one New York Times bestseller, journalism has always been at the heart of what we do. In fact, I will go so far as to say that the difference between a good romance or science fiction novel and a well-written non-fiction narrative isn't that large from the reader's perspective. A good human-interest story makes a good book whether it's based on hard facts or just good observation of human nature.

A growing trend

As Jeff Sonderman at Poynter points out, this is part of a growing trend of news organizations publishing e-books. HuffPost is joined by such venerable news organizations as The New York Times publishing an e-book about WikiLeaks, and The New Yorker publishing an e-book of 9/11 stories. Both are selling thousands of copies based on their own announcements or high Amazon rankings, and so far, The Huffington Post's first e-book seems to be on the same track.

This couldn't come at a better time for journalists who, thanks to the double-whammy of a weakening economic recovery and struggling news business models, are once again facing layoffs.

It wasn't that long ago that I worked for a newspaper, and I can't tell you how many presentations I sat through asking the same question but never answering it: "How are we going to pay for quality journalism?" And to their point, paywall models didn't work the first time and aren't working that well the second time. As a result, the idea that readers will never pay for digital news is so ingrained in the minds of journalists that they become blind to the paid-content models that are working today.

Why you can't ignore e-books

So let's all take a moment and admit that we're asking the wrong question. The real question is how to take advantage of the amazing paid-content model that e-books represent, as evidenced by this IDPF graph showing 300 percent year-over-year growth in e-book revenues:

Yes, that's $120 million per quarter, easily up above $160 million per quarter by now since this data is almost a year old. Correlate that with the fact that some news organizations are now selling thousands of copies of e-books at an average of $2.99 per copy and we can bury the "people won't pay for digital content" myth for good.

The convenience, affordability and form factor of e-books and tablets make readers pull out their wallets in ways that they aren't as willing to do when sitting at a computer. Case closed!

Common news organization excuses

I delved into this topic in the spring at Steve Outing's Digital Media Test Kitchen symposium on finding new business models for news. (See my presentation and video here.) What I found is that once journalists understand that e-books are more than just a theoretical business model, they move on to two more questions: 1) "But how can we find the additional resources to create books?" and 2) "What could we possibly write books about that people would buy?"

To the first question, compare the resources of newspapers that have an entire staff of writers to those of most self-published authors who do everything themselves, and you'll see that it's not about resources at all. It's about prioritization. The top-selling writers in BookBrewer's Red Carpet plans (reserved for high sellers) do everything themselves, from writing to marketing to cover design. Some even hand-code their own ePub files, while others build them in our simple copy-and-paste tools or through affordable conversion shops. As an entrepreneur and founder of a startup, I can tell you that they're entrepreneurs and startups themselves -- just like every journalist needs to be.

And to the second question -- just look in your archives. Newspapers and news organizations are swimming in content that's perfect for e-books. A few examples include multi-part series, collections of celebrity interviews, popular columns, restaurant reviews and -- irony of ironies -- collections of book reviews.

An even better source of content is beat reporters who are sitting on dozens of notebooks, e-mails and interviews they never published (precisely what HuffPo's Delaney did with "A People's History of the Great Recession"). So here's a crazy idea for you news organization managers out there. Why not tell your staff that they can publish e-books of their unpublished interviews in exchange for getting 50 percent of the resulting revenue? It's money you're not making now, and it's low-hanging fruit. Create some incentives that tie directly to the hard work journalists already do and watch how fast they compete to curate the best newsbook.

Don't forget the marketing

The single hardest thing about e-book publishing is marketing, and truth be told, it's where most self-published authors fail. Some of them would do anything just to get their book mentioned in their local newspaper or linked to from a high-traffic website. Hopefully, you see the irony and opportunity here: When a news provider publishes a book, it can easily jump that hurdle. Put up a link, some ads, send out newsletters -- and you're already ahead of most individual authors.

I could go on and on, but the message is simple. If you're a journalist and you haven't published an e-book yet, you're missing out on a great opportunity. If you're a news organization, here's a way to grow revenue that also pays for the content creation.

So now I want to hear from you. What content are you sitting on that might make a good e-book? What's held you back from publishing it, and what needs to happen to clear that hurdle? As a former journalist, nothing would make me happier to see more quality journalism in BookBrewer.

Last night, on the eve of the latest Knight News Challenge winner announcement, I was reflecting back on what I've learned from working on BookBrewer -- a project that grew out of the 2008 Knight News Challenge-funded Printcasting -- and what it says about how packaging and consumer expectations affect the monetary value content.

These two products are essentially the same underneath the hood, but the expectations of the reader couldn't be more different. The bottom line is that I now wonder if we ever could have made a successful business with Printcasting simply because it was built within the context of newspapers and magazines, which customers expect to get for free.

ABOUT PRINTCASTING

Printcasting was a web-based system that made it easy for people to create PDF magazines that they could distribute locally and pay for with local advertising. We launched it in November 2008. In case you've blocked it out, that was the beginning of the global economic meltdown, arguably the worst time in history to test a product supported by local business advertising.

By early 2010, we'd gotten 400 grass-roots publishers to use Printcasting in five geographic markets. As we watched them also struggle to sell local ads, we realized that Printcasting.com's long-term future was not very bright. The service's continued existence was thus 100 percent dependent on getting additional grants.

Rather than try to live grant to grant -- something that grated against my entrepreneurial spirit -- we decided to pivot to something with a better revenue model than local advertising. And that led us to e-books and BookBrewer.

ABOUT BOOKBREWER

BookBrewer is a web-based tool that makes it easy for anyone to build, publish and distribute e-books to popular devices and retailers such as Amazon, Barnes & Noble, Apple iBooks and Borders.

In stark contrast to Printcasting, BookBrewer came along at the perfect time in history. In 2010, Amazon announced that e-books were outselling print books only three years after introducing the Kindle, and authors were just beginning to self-publish e-books that would later sell thousands of copies each month. According to Bowker, there were 764,000 self-published titles created in 2009, up from far less than 60,000 a few years ago. And the International Digital Publishing Forum shows e-book sales increasing 300 percent or more each year.

Unlike Printcasting, which could only be supported by grants, BookBrewer pays for itself with service fees and royalty share and has an audience of nearly 7,000 active users after six months. While we've talked to many investors, we've been able to bootstrap this far and our revenue continues to grow.

SAME PRODUCT, DIFFERENT PARADIGMS

While it may not be obvious up-front, Printcasting and BookBrewer are really about the same thing: turning the average Joe into a publisher. Their most obvious difference is that one is about physical media and the other tablet-based media, but that's actually pretty minor. The major difference is the economic and cultural frameworks in which they operate.

Printcasting was built in the mold of free newspapers and magazines, while BookBrewer was built in the framework of paid physical books. This difference is extremely subtle and semantic, but it quite literally creates a rags-and-riches dichotomy between the writers who fill their pages.

On the one hand, you have journalists who, thanks to abundant online content and the collapse of local advertising, are getting laid off by the thousands and taking jobs as bricklayers and nannies. On the other, you have average people like stay-at-home moms who are paying for their kids' college education with just two weeks of sales of their self-published romance novels. (I'm not exaggerating with the second scenario. It's happening right now to one of our BookBrewer authors, and she's not the only one.)

COULD NEWSPAPERS MAKE MONEY WITH E-BOOKS?

Because I come out of the journalism world and know so many journalists, I'm tempted to take this personally. What is it about news that makes people value it so little? But it also seems like there could be opportunities for news organizations to use e-books to generate revenue.

As I recently told Amy Gahran at the Knight Digital Media Center and a seminar of non-profit journalists at CU's Digital Media Test Kitchen, there's no reason that stories told by journalists couldn't be repackaged and sold as e-books. But how many will actually even try?

Sadly, I think few newspapers will take advantage of the e-book revolution because they and their readers choose to be defined by their past relationship, which is all about free content. Magazines and newspapers have a history of being available for next to nothing and making the bulk of their supporting revenue from advertising. It's hard to change that mindset. But I hope that some of you will prove me wrong, and I would love to see you turn your fortunes around by selling good journalism to e-reader audiences.

Meanwhile, e-books evolved from a completely different direction. Books have always required payment by the reader, with new hardbacks costing $20-$30 or more. When Amazon began selling e-books for $2.99, it was received by readers like the biggest Blue Light Special of all time. As a result, the same reader who may balk at paying $20 a year to subscribe to Business Week had no problem at all loading up her e-reader with $30 worth of $3 novels.

THREE MORE LESSONS

There are a few other lessons in our story for other News Challenge grantees, and innovators in general:

1) Listen to Your Customers: We were able to change focus from PDFs to e-books because of what Printcasting users were telling us. Every month, at least one new Printcasting publisher would ask us, "Can I publish my magazine to the Kindle?" which quickly evolved to "How do I get this on the iPad?" If we'd remain focused only on our grant obligations we would have missed one of the biggest opportunities in publishing history, but because we listened we were perfectly positioned to be a major player in the e-book space after our grant ended.

2) Change and Innovation Go Hand in Hand: When doing something that has never been done before, the way you start is just that -- a start. It's hardly ever how you end up. If you do manage to do something exactly the way you planned over many years, you're either not innovating fast enough, or you have the gift of precognition. It's for this reason that I have strongly urged the Knight Foundation to give grantees more flexibility to allow their projects to grow and change over time -- something we weren't allowed to do as much as new grantees.

My advice to you all: Change and evolve based on what your customers are telling you. If you're afraid of getting dinged later by a grant manager, remember that it's always easier to beg for forgiveness when you've created a new success.

3) Everything is a Business: Apart from tax law and management, there really isn't a major difference between non-profit and for-profit enterprises. Even grant-funded projects need to make money (or in non-profit parlance, reach "sustainability") or they can't continue. If you're working on anything with Other Peoples' Money, you need to stop right now and figure out what your future business model will be when that money is gone, because that day will come sooner than you think.

Borders has chosen BookBrewer -- the first product of my startup, FeedBrewer, which grew out of a News Challenge grant -- to power the engine for its e-book self-publishing service. You can read about our partnership in the official press release, or in media coverage from a variety of sources including Fast Company, Publishers Weekly and PC Magazine.

We made the announcement at BlogWorld Expo, one of the largest confabs of bloggers and new media enthusiasts in
the world. The response at our booth was enormous and even overwhelming
at times, with people lined up to talk to me, my team and Borders' e-book manager Kelly Peterson about how they can turn their content into sellable e-books. Their response is not surprising, given the explosive growth in e-book sales in recent months.

About BookBrewer

So what is BookBrewer? It's a web-based tool that helps you turn content from your blog, or Word or PDF documents on your computer, into e-books that can be sold on your through multiple online e-book stores, own through your own website. After importing your blog, you then add posts and organize them into chapters, edit and enhance content, and push a button. BookBrewer then turns your content into an e-pub that most e-book stores require. You can pay one fee to have it published to e-book stores we work with, or another fee to just get the file to do with as you wish.

This video shows how it works:

BookBrewer Help: Building Your Book from Dan Pacheco on Vimeo.

Some highlights on our partnership with Borders:

• On October 25 the same technology and user experience will be surfaced on a separate site called "Borders Get Published, Powered by BookBrewer." You can enter your email address on the form on Borders.bookbrewer.com to be notified as soon as the service launches.
• Books published through both BookBrewer and Borders Get Published will be available for purchase on Borders.com and viewable in Borders-branded apps (such as Kobo), but will also appear in other eBook stores that BookBrewer has relationships with. Those include Amazon.com and KoboBooks.com, with more on the way.
• Borders will use its marketing muscle to encourage thousands of new authors to get published, and will promote promising new authors in its weekly emails and on its website. This is a huge boon for self-published authors because Borders reaches more than 30 million people per week in emails alone.

Our booth team, from left to right: Todd Levy, Laurelie Ezra, Kelly Peterson, Dan Pacheco.

BookBrewer, which only launched last week, will operate as its own entity. We will serve customers through both sites and will roll out more strategic "Powered By BookBrewer" services throughout the year that benefit our company and partners, in addition to other services for authors and content providers. With one of the largest bookstores in the world on board, we're now shifting our focus to companies with content or content relationships.

Given my news background, I know that a lot of newspapers and magazines have "evergreen" packages or investigative reports that would stand the test of time as e-books. I will be reaching out to some of you about that at the Online News Association conference later this month. And you freelancers/entrepreneurial journalists out there? This is a fantastic opportunity to pay for freight while also building your brand.

Borders' Open Publishing Stance

Some people are surprised that Borders would want "their" e-books to show up in competitors' stores, but it makes sense when you think about  the self-publishing customer. They want their content to be everywhere  that people want to buy it.

I can tell you from spending two days in a booth with Kelly Peterson and talking extensively with others at Borders that they're one of the  most customer-focused companies around. They understand that authors -- a category that now potentially includes each and every one of  you -- don't want their content to be defined or confined based on which service or programs they use to create it. The customer always comes first for them, and with self-publishing the book always belongs to the author.

I heard Kelly put it this way: "If you buy a piece of clothing at a store, you expect to be able to wear it everywhere, not just in the store where you bought it." You can see that evidenced with the wide variety of e-book readers and apps Borders promotes, beyond the Kobo reader the company invested in last year.

I'm also excited to work with Borders because they, and bookstores in general, are part of the fabric of local communities -- that rapidly disappearing third place that has been so important in the history of civil life. Other types of third spaces exist online, but at a local level physical meeting spaces are still important. Digital community engagement is the common thread  in my most meaningful endeavors (Bakotopia, Printcasting and AOL Hometown as just a few examples), and as a previous recipient of a Knight News Challenge grant from the John S. and James L. Knight Foundation I'm a proud  public champion of helping the news and information needs of communities in the digital age. I see BookBrewer and Borders Get Published being strongly connected to those goals.

No Man is an Island

On that note, I want to once again thank the Knight Foundation for its role in the Printcasting project, which evolved into my company FeedBrewer, Inc., from which the Knight Foundation will one day benefit thanks to a voluntary 6 percent gift to the Knight Media Innovation Fund. While the Knight  Foundation didn't provide any funding for our proudly "bootstrapped" BookBrewer (and we did not ask for any), BookBrewer is an example of how non-profit seed funds can light a spark that continues to burn later.

It's my sincere hope that future successes from BookBrewer will go to help fund other startups that help local news and information.

The technology for BookBrewer is all new and distinct from Printcasting, but the thinking, methodology and customer insights evolved from it. In fact, thinking back, the biggest thing we learned from Printcasting was that even first-time print publishers really wanted to be multi-platform digital publishers. They just didn't know that until they got their feet wet. In the space of a few weeks after publishing a PDF magazine, they would start asking us if they could publish the same stories into Facebook or as a blog, and they would tell us that they saw print as only a small part of their future business.

They also started asking about e-books as the Kindle and, later, iPad grew in popularity.

The feedback we're getting with e-books validates that. People occasionally ask us if we can provide print-on-demand paperbacks for their books, but when we say we're currently focused on digital books they're fine with that. Most just want to make sure older readers who don't have e-reading devices, iPhones or iPads to have a print option. (And we will be looking into that, by the way).

What I've learned through this process is that when you have an idea that you're passionate about, people will step in at the last minute to help you out. I think the BookBrewer product engenders a desire to reciprocate after authors see how much it can do for them. We even had the leader of a writer's group in Florida buy an ad in a conference program for BookBrewer with her own funds -- a first in my 15 years of working on digital products.

I also want to thank Jon Nordmark, the co-founder of Wambo.com and founder and former CEO of Denver-based eBags. He facilitated Denver's inaugural class for Adeo Ressi's Founder Institute, an intensive technology and mentoring program. For four months, I would spend every Tuesday night from 5:30 to 9 p.m. with him, other startup CEO mentors, and founders of 17 other companies. We would sound ideas off each other, refine them, give and receive brutal feedback, and delve deeply into the business behind our businesses. While I had a lot of ideas before, I can safely say that without the Founder Institute program I never would have been able to create this product at this time and get it in front of Borders. Nordmark also helped with the Borders introduction.

Fellow Founder Institute graduate Todd Levy, co-founder of BloomWorlds, and his girlfriend Laurelie Lee Ezra also stepped in at the last minute to man our BlogWorld Expo booth and talked to hundreds of people about BookBrewer as if it was their product. I will never forget that, and can't wait to talk more about BloomWorlds once it launches.

Then of course there's Don Hajicek and Andy Lasda, my amazing team of co-founders, who have worked tirelessly on this alongside me with no pay other than generous equity. You learn a lot about people when you're down in the trenches with them, and these two are solid. In addition to their incredible development and product design skills, they've shown incredible faith and dedication. And a big thank-you to our advisors, especially Kit Seeborg from BumperTunes.

Last but not least, there's my family. My wife Kendall Slee and two daughters have given up many nights and weekends with me, and also helped with ideas and feedback. (My 7-year-old Lauren even published an e-book that was for sale in Amazon, and she's now perfecting a second edition.) My mom and dad even pitched in at the end to handle the logistics of ordering last-minute t-shirts for our BlogWorld booth.

Start Brewing Your e-book!

...But I guess you should expect that from a community-focused product. BookBrewer is and will continue to successful thanks to the community of people behind it. Hopefully that also includes you. Start brewing your e-books so we can help you get published and featured by Borders!

FeedBrewer Inc., a new company I co-founded with two other Printcasting team members, is donating 6 percent of its corporate stock to a brand new Knight Media Innovation Fund. Our hope is that our future success can also enable success for others who, just as we did with the Knight News Challenge, will receive grants that allow them to create new innovative media tools and programs. You can read more about our company and the donation on our site and at the Knight Foundation blog.

After the announcement, I got two reactions from conference participants. The dominant reaction was very positive: "Way to go!" "You did the right thing!" "That's awesome."

But there was also another, more pragmatic reaction. A few asked me point blank, "What are you getting out of this?" "Is there any new funding attached?" "What motivated you to do something you didn't have to do?"

What Are Your Values?

The second question is the more interesting one, because I think it speaks directly to the real value the Knight Foundation has created through four years of the Knight News Challenge. this value has nothing to do with money. But just to be clear, the answer is that no, there is no new funding attached to this donation (which would make it a purchase versus a donation), and there is no tangible, quid pro quo benefit.

But we feel we are definitely getting something out of this. We're showing with our actions that we want to remain a partner with the Knight Foundation and its community of media entrepreneurs in writing the story of innovation -- whether or not they're writing us more checks.

Empowering Publishers, and Future Innovators

Just as we've used Printcasting to empower new local publishers, and will use FeedBrewer to expand that mission to mobile and eBook publishers, we hope that we can one day say that FeedBrewer's financial success helped empower new innovators. And in the spirit of open source, we also know we may benefit from their contributions just as they may with ours (Printcasting code was open sourced on Drupal.org this month).

I think this is a really important thing for future media entrepreneurs to understand, because ultimately it comes down to values.

I've been going through a tech entrepreneur training and mentoring program called The Founder Institute in Denver, and every Tuesday night we hear presentations from successful CEOs and entrepreneurs. I was struck by what Bruce Dines, a principal at venture capital firm Liberty Global Ventures, recently told us.

"What is your culture, and what are your values? Make sure your behavior is consistent with your values," he said. "You are building a corporate identity that is consistent with your brand. Everything impacts your brand. It is a precious thing that can be destroyed in a minute."

I found it interesting that this was coming from someone who manages an investment portfolio for the purpose of getting a hefty financial return, which for VCs is typically five to 10 times their initial investment. What this says is that values are important even in the context of making money, and that bad values can hurt your bottom line.

I wish more newspapers had paid heed to this over the last 20 years. Falling circulations led many to capitulate on core values -- for example, the now widespread practice of charging for obituaries that were previously seen as a core community service. Values and brands are tightly connected, and once you lose your brand, you're toast.

How Equity Works in Incubators

I'm learning a lot of great lessons through the Founder Institute, just as I did through the Knight News Challenge. The Founder Institute also has its own "pay it forward" concept. If I proceed to graduation in two months, I and my board will sign a document giving the institute a warrant to take 3.5 percent of FeedBrewer stock in the event that we receive significant future funding.

That isn't unique to the Founder Institute. Most tech incubators, such as Y Combinator and TechStars, require some sort of equity in exchange for funding, training and connections. However, the Founder Institute is unique in that every graduate also shares in a pool from that 3.5 percent.

Up until very recently, the Knight Foundation required nothing in terms of equity, etc. in return for the grants it gave out, but it is moving in that direction with the Knight Media Innovation Fund. I think that's a good thing, so I'm glad to support it up front with this first, non-mandatory equity donation.

FeedBrewer's Road Ahead

So what's ahead for us with FeedBrewer? Riches? Fame? Glory? Not initially, if ever, but there will be a lot of hard work as we strive to achieve our vision for simple multi-platform publishing solutions. And if we succeed in that vision, whatever else comes after is icing on the cake. We're running a startup because we think we can do a better job achieving our vision than if we were operating in a large company, not because we anticipate an immediate windfall.

The other thing I've learned through the Founder Institute is that I am a hair short of insanity for starting a new business. My co-founders and I are already bootstrapping our path to the future, taking on consulting projects that leverage our expertise while keeping a percentage of our time free to work on our own concepts (such as BookBrewer -- more on that later!)

Contrary to what you may think, the vast majority of startups do not attract enormous multi-million dollar investments or acquisitions. They work project by project, sale by sale, and some result in sustainable businesses. (Shameless plug: yes, we have room for more consulting projects. Learn more about that here).

The Real Value of the Knight News Challenge

The bottom line is that without the Knight Foundation's support, I would never have had the time to study and learn what I have through Printcasting, and FeedBrewer simply wouldn't have been possible due to lack of confidence. I also wouldn't have had the opportunity to share my thoughts with the large audience that this Knight-funded Idea Lab blog provides, or present my wacky ideas at countless conferences around the world. And I doubt I would have had the honor and privilege to be part of such a fun and inspiring Knight News Challenge community.

So I want to thank the Knight Foundation and its late creator John S. Knight -- who it turns out shared my birthday -- and all of the innovators past, present and future that emerged as part of his legacy. That community is the real value of the Knight News Challenge. I'm looking forward to seeing more projects pay it forward like we have done.

We're still extremely busy with Printcasting and are working on multiple tracks over the next six weeks before our grant ends. We're finishing up version 2.0 of the Printcasting system on Drupal 6 and preparing to open-source everything, including the Drupal 5 version that powers the existing site. And we're also helping partners, such as Temple University's Philadelphia Neighborhoods in Philadelphia, which just printed 500 copies of its Printcasts and distributed them to the urban neighborhoods it serves. (Read more about what they're up to here). Here's a picture of PhiladelphiaNeighborhoods co-directors Linn Washington and Christopher Harper proudly displaying their first print editions.

But we're also planning ahead for what comes after Printcasting. So today, I'm very excited to announce the formation of a new for-profit company and future product called FeedBrewer.

The FeedBrewer Approach

"FeedBrewer is a one-stop shop for designing, publishing and distributing your content on multiple platforms -- including e-readers, mobile devices, e-mail and printable PDF magazines. You can even use it to redesign parts of your existing website. You don't need to change how you publish content now to use FeedBrewer. Simply provide the RSS feed from your blogging tool or content management system, choose a design scheme, and we'll do the rest."

In other words, by simply providing an RSS feed and checking off some boxes for the outputs you want, FeedBrewer will let anyone become a multi-platform publisher in just five minutes.

Rethinking Print as Mobile Content

In addition, Printcasts already work on mobile devices that display PDFS, such as the iPhone and iPad. They're purely digital products that exist solely in The Cloud up until someone decides to send them to a printer or view them on a mobile device.

To prove this point, here's a picture of a Printcast on an iPad, which I brought up by going to Printcasting.com, clicking into a microsite, and clicking a "Download PDF" button. You have the same experience whether you look at the publication on a tablet like this, or by reading it on paper.

FeedBrewer will use many of the same Drupal modules we created for Printcasting for feed aggregation and designed output. We will simply build additional FeedBrewer modules that can plug into a basic Printcasting installation that will enable output for different mobile devices.

The fact that we can do this speaks to the highly-structured nature of the new Printcasting 2.0 system on Drupal 6 which, once open-sourced, will be able to be used by anyone in this way. We know that we will be one of many different parties using the opens-source Printcasting tools, and as the maintainer of those modules we look forward to seeing what other developers can do with them.

Our Business Model

This new "software as a service" approach is a departure from our experimental business model for Printcasting, which relied on taking a cut of self-serve advertising revenue. While we will continue to experiment with new advertising revenue models, we see more near-term potential in providing value-added services to publishers who are trying to publish in an increasing number of channels with limited or shrinking resources. They will be able to monetize their publications using their existing ad networks, which is what Printcasting partners have been asking us to do from the beginning.

On the financial front, we are also beginning to reach out to investors. Anyone interested in being a financial partner in FeedBrewer's future can contact us at news@feedbrewer.net, through our contact page.

Looking Ahead, and a Big "Thank You"

I would also like to send out a huge Thank You to the John S. and James L. Knight Foundation, whose initial funding of Printcasting made future things possible -- including our new company, but also many other projects that will use the Printcasting code in the future. We recognize the role that philanthropy played in our development, and while we will operate as a for-profit company we feel our future mission is still very much in line with the goals of the Knight News Challenge. Our objective always has been, and will continue to be, to preserve the news and information function of local communities. Mobile is an increasingly important part of that.

We're also thrilled that we'll still be able to work with The Bakersfield Californian, where I started Printcasting in my previous role as Senior Manager of Digital Products. In addition to being a shareholder in FeedBrewer, the Californian is also signing on as our first paying customer. In my six year as a Californian employee, I've been privileged to be allowed to play a critical role in its evolution from a single-product, print-centric newspaper to a multi-platform cross-media information company. My hope is that through FeedBrewer, we can help them and others in the next big transition to portable "anywhere" content.

We've added three partners in two weeks. They are:

• La República, one of the leading newspapers in Lima, Perú.
• El Nuevo Día, the dominant newspaper in Puerto Rico.
• Philadelphia Neighborhoods, a hyperlocal news site run through the Temple University Urban Publishing Lab.
  
• And in a purely technical sphere, we're also working with HP on a Printer app.
  

About Our New Partners

La Repubública is a relatively young, innovative and independently-owned political newspaper in Lima, Perú. It has a history of empowering and engaging citizens, which it does currently through its innovative print edition and Drupal-powered website. It also backs its words up with action. In 1992, La República was a staunch opponent of Peruvian President's Alberto Fujimori's coup, and has been an important defender of freedom of speech and democracy at a time when most other local media was controlled by the
Peruvian government.

In addition to using Printcasting locally, La República will also be co-developing with us, thanks to the fact that they use the Drupal content management system.

El Nuevo Día is the dominant newspaper in Puerto Rico, a U.S.-owned commonwealth of 3.9 million people. It also operates an edgier tabloid, Primera Hora, which has been well received since its creation in 1997. Based on its success with Primera Hora, El Nuevo Dia is planning to create even more niche products, and it will be experimenting with Printcasting as one cost-effective way to do that. We first started talking to El Nuevo Día after I spoke on a panel with the editor of Primera Hora at a SIP-IAPA conference in Buenos Aires, Argentina and we both realized that we share many of the same ideas about where local media is heading.

Along with La República, El Nuevo Día will be translating everything in the Printcasting system into Spanish so that we and they can launch Spanish versions. This will help us learn how to serve Spanish speakers everywhere. I expect they'll show that Printcasting is also a good fit for Spanish speakers in the United States.

According to the U.S. census bureau, there are 34 million Spanish speakers in the U.S. -- a large and growing proportion of its 304 million residents. That's a huge number that's hard to ignore (although plenty of media companies do, to their peril), and now we'll have partners to help us plot our Spanish strategy.

Philadelphia Neighborhoods is a hyperlocal journalism site tied to the capstone course at the Multimedia Urban Reporting Lab of Temple University. Each year, Temple assigns 160 reporters from its 700 undergraduate journalism majors to 25 underserved neighborhoods. The demographic makeup of these neighborhoods is very diverse, including African Americans, Hispanics, Koreans, Polish and other ethnicities. The quality of their student-reported stories is extremely high, with one Philadelphia Neighborhoods journalist recently beating out the Philadelphia Inquirer and Daily News for an award.

Multimedia Urban Reporting Lab co-director Chris Harper told me that a lot of the people in these neighborhoods don't have reliable access to the Internet, so they're not always able to read the stories about their community that are online. Many have been asking for local print editions of the stories that Temple's students are writing. For this reason, I have a feeling that Philly will be the most ambitious local test of Printcasting yet. The local community there is asking for it.

Our HP Print App Project

I think HP is on to something with these devices, and they could be the start of a complete reinvention of home printing -- something that replaces the printer's connection to a desktop computer with "the cloud." You can use a TouchSmart printer app even if you don't have a computer, as they go directly online to fetch content based on your input. Think of it as a kiosk that can be placed anywhere in your house, or even at a public place like a shopping mall, to create instant prints from digitally stored content.

The best part is that HP has given us permission to open source the code we write to create the Print App interface. Along with the Drupal modules that we open source, future developers will have everything they need to make print-on-demand services that are able to interface with HP printers. (Note that the software we'll open source will simply help you build an interface for their touchscreens. It's separate from the HP server-side software or anything proprietary to the HP printers themselves).

Who Will the Next Partner Be?

Also remember that anyone can use Printcasting without making a deal with us. Just go to http://printcasting.com and click the Create Publication button on the home page.

If you haven't seen the list of features we originally promised to build into Printcasting, let's just say it was pretty darned long. So it's with great satisfaction that I can say that, 18 months after our Knight-funded Printcasting project started, we have finally completed all of the features we promised.

But that doesn't mean we're finished. If anything, we've made our list even longer thanks to constant feedback from people who call us up to say, "Printcasting would perfectly fit my needs if you could just add this one extra thing..."

Introducing Printcasting 1.5

To those of you who have been asking for more control over publishing and design -- pay attention. This week we'll take a huge step forward by rolling out Printcasting 1.5, which is all about giving more control to publishers. You can see a quick preview of some of the 1.5 features here:

The elevator pitch for those who don't want to watch the video is that Printcasting 1.5 has much more professional-looking templates, more options for how text and pictures can be arranged on a page, more control over fonts, and some really cool design features for header images.

We call this a "dot-five" release because it's really an incremental step toward the even more ambitious Printcasting 2.0, which will be a complete rewrite in Drupal 6 that will be more usable by the open source community. (We will also open source the Drupal 5 version once we're satisfied with where it's at).

We say that this release is all about publishers because, until relatively recently, we were still working on an extremely complicated self-serve advertising system. It was important to get the advertising system to work (and it was an important part of our Knight News Challenge proposal); but, to be frank, we haven't seen a lot of interest from the small businesses it was designed for.

One reason is the economy. Many of those businesses either cut their marketing budgets or flat out went out of business in 2009. You could say that it was the second worst time in American history to launch an advertising tool, with the first worst being the Great Depression. I continue to be a believer in the idea of "democratizing" print ad publishing, but it will take more time to get the features just right, and attract interest from time and cash-starved businesses.

Surprise! Businesses Need Democratized Publishing, Too

We also continue to get attention from the tech community. MIT included us in a list of Research to Watch, and O'Reilly will include us in a session at their Tools of Change in Publishing conference, along with our friends from RIT's Open Publishing Lab and Spot.us.

Looking Ahead

• Launch Printcasting 2.0 on Drupal 6. My challenge to the development team is to complete this by the end of February.
  

• Roll out more partnerships We've inked one to-be announced partnership with a Latin American newspaper, with a second in the wings, and are deep in discussions with a well-known membership organization. We also hope to work with some smaller non-profit news organizations that have reached out to us. Think your company and organization could make for a good Printcasting partner? Fill out this form and we'll get in touch with you. (On a side note, we've had many discussions with U.S. newspapers, but sadly most have stalled as most of those papers deal with collapsing business models).

• More promotion in Bakersfield through our sponsor / partner The Bakersfield Californian. After Printcasting 1.5 launches, the Californian plans to seriously ramp up marketing of the service in both print and online. We've already seen some increases in usage from some test promos.

• Experiment with e-book formats starting with ePub, which is what Apple is using for the recently announced iPad. I was really excited to see Apple adopt this open standard, rather than promote a new proprietary format. Those of you who think Printcasting is all about paper may be surprised to hear that we're thinking about e-books, but the truth is that Printcasting has never been just about print. It's a digital technology platform that creates content that is designed to be read in your hand. The more visual e-readers become, the more important layout and design will be. We hope to make our service an integral part of the e-book and e-publishing ecosystem.

So that's what we're up to. Please give Printcasting 1.5 a try this week (we'll post an update on our Twitter feed when it's ready), and get ready for more fun stuff in the future.

UPDATE on 2/4/2010: Printcasting 1.5 went live on Feb. 3. Read more about how to get started on the official Printcasting blog.

Andynoise: Citizen Sports Journalist
The best example so far is a sports enthusiast named Paul Anderson in Bakersfield, California who goes by the online moniker "Andynoise." He's now one of 400 publishers who have collectively created 1,500 editions since we launched in late March.

For several years now, this citizen journalist has been blogging about cross-country running in Bakersfield on Andynoise.com, a bare-bones site that focuses completely on local runners in Bakersfield. As just one example, he's taken and posted 61,000 pictures of high school runners in three years. It goes without saying that nobody in Bakersfield -- not even the local newspaper -- has done more to cover cross-country running events than him.


When we told Paul about Printcasting, he immediately saw its potential to get his content into a printable magazine form that he can take to cross country meets. We helped him with the printing costs for his first issue (an offer we made to all of our active publishers). As a result, a few weekends ago he handed out 500 copies of his Printcast at the Wolf Pack Invitational cross-country meet in Bakersfield that was attended by 700 athletes from 16 schools. We'll be printing up another issue for him for a second event, and have also sent a copy of his magazine to local sports shops and given them an offer for free advertising for one issue.

In addition to being a great case study for Printcasting, I think Andynoise says a lot about the future of journalism and the role that average people play in it every day. He's the perfect example of a journalistic entrepreneur, and he uses every tool available to him to find new ways to inform his audience. He publishes two other Printcasts in addition to Andynoise.com: one for the Bakersfield Distance Project and another for the Bakersfield Marathon Walkers. He's also active in Facebook, Twitter, Smugmug and any service that helps him serve his community of interest.

New Feature: The Edition Builder

The great thing about having active users is that they immediately tell us what they hate (really!), and we were caught off guard when the majority of users told us that they don't like the idea of automatically-generated editions.

As we probed into this more, we realized that they don't hate all automatic (people like Andynoise love how Printcasting pulls in content they've posted on blogs), but rather the lack of control over which stories appear in each spot.

In response, we've launched an entirely new path for creating a Printcast that we call the Edition Builder. Users can now choose every single article and placement, and also write or copy & paste stories from elsewhere (for example, from a Word document). But the real power is in the Story Finder, which lets you search through the 6,000 articles that have been imported into Printcasting. You can save them in a Story List (what we internally call "hunter-gatherer mode"), then drag and drop them into your publications.

This video shows how the Edition Builder works:

Initial reactions to the Edition Builder have been positive, but we're not stopping there. Over the next two months, we'll launch a completely new version of Printcasting that's tied more tightly to the node structure of Drupal 6.

Also, a new PDF generator we're experimenting with should allow much more flexibility and variability between templates, with headlines, images and story spots appearing in completely different places as you switch between them. Here's a screen shot of one of them, created by our Web designer Don Hajicek (who is also behind most of our site design and even some functionality):

We're also working to make Printcast subscriptions work more like an email newsletter tool that just happens to include a beautiful printable magazine.

Planning for More Partners

Finally, we continue to get inquiries from large companies and organizations that want to experiment with Printcasting -- and the nature of the inquiries in changing. Perhaps the most interesting development there is that not just one, but two membership organizations are now looking at Printcasting as a way to provide value-added news services to their members.

This was a pleasant surprise, but we should have seen this coming. Organizations of all types seem to be ramping up their content staffs (some even call them "newsrooms") just as newspapers are laying off reporters, and they always have a certain number of members who like the option of reading in print. In some cases, these organizations' members are telling them that they want them to do something to help save newspapers. Who would have predicted that?

Printcasting fits in because it's a "bridge" product that provides digitally aggregated content in a form that works great on a home printer. In the current economic recession, they can't afford as much paper and ink as they used to, so having a PDF version that members can print at home is appealing. And they all see the value of having instant handouts that they can take to real-world meetings. That isn't all that different from what Andynoise is doing with cross-country meets.

From a philosophical standpoint, this makes me wonder if membership organizations, non-profit news startups and the like will be the ones who carry the torch of the printed newspaper as "newspapers" reduce or eliminate printed copies altogether. But more likely, they will both end up in a happy middle-ground.

Oh, and one last thing about partnerships. Our objective has always been to spend the last 6 months of our Knight News Challenge grant period helping 5 other organizations make Printcasting work in their local communities. We have the ability to do that now thanks to some focused tests with MediaNews Group, but we won't delve into partnerships fully until around January.

If you or your organization are interested in being a partner, we'd like to hear from you. Please fill out this form. We'll contact you if we think there's a good fit.

This is an important exercise because, as many of us were reminded in the re-imagined "Battlestar Galactica" series, "All of this has happened before, and all of this will happen again." Or if you prefer the non-geeky version: "Those who cannot remember the past are condemned to repeat it," as George Satayana said. If we can learn from what didn't work so well yesterday, perhaps we can collectively use that knowledge to help make things better tomorrow.

This is all the more important in the current economic climate, as even the smallest vulnerabilities of businesses are magnified -- sometimes fatally so. And just to be clear, while I work in newspapers now, I'm not talking only about them. This is true of many, many industries, most notably even relative newcomers with highly technical, highly intelligent employees. As just one example, when I worked at AOL, I saw many of the same group behaviors that I see in newspapers today.

The other night I started to explore this on Twitter with the question. "Why is it so hard for old companies with existing customers to change quickly?" People replied to me with additional ideas, and together we built the list below. But don't let it stop there. If you can think of other ideas please post them in a comment below. (Note: One thing we discovered in the Twitter conversation is that it's easy for this to turn into a gripe session about specific situations or industries, and the symptoms they show. There's no end of blog posts about that and they're not that helpful. Here, let's try to get to the root causes that apply to any mature business.)

With that, here's our short list...

Innovation Killers

1. FEAR: Too much money can be the enemy of progress.

This is perhaps the biggest irony of all, so I list it first. How can too much money keep you from innovating? It's because of a phenomenon that someone named Siddhartha Gautama -- otherwise known as Buddha -- explained a long time ago. It's because you're attached to it. That kills innovation because you're focused on keeping what you have rather than serving your customers' changing needs.

In general, successful companies are either too afraid to stop making money the old way or they're not allowed to. This is true even when a pool of money is decreasing. On the flip side, I have noticed that once revenue drops past a magical percentage, it triggers a panic which can result in a flurry of last-minute innovation -- but that's not a plan for success.

It's even worse for publicly traded companies. The shareholders they really work for, whom they have almost no control over, are often even more afraid. Or worse, they can't agree on a course of action -- with half of the shareholders punishing a stock when it makes drastic changes and the other half punishing it for not changing fast enough.

But this is also true for privately owned companies. If an inspired leader sees a storm coming that will likely result in a 30% drop in long-term revenues and tells the board of directors that it needs to proactively cut current profits 20% while it focuses on emerging business opportunities, what happens? That leader is most likely fired and nobody wins. A few years later, the company is still down 30% or more, but in this case without any game plan whatsoever.

I once, probably foolishly, told one of the leaders of a company I worked for that she would one day have to eat her own children to compete with free advertising. She looked at me like I was crazy, but this is basically what I was talking about. Sometimes you have to kill a large portion of your current business to preserve your future. Very few newspapers -- let alone many established companies -- have done that, and now they're paying the price of inaction.

2. BRAND ADDICTION: Companies are addicted to their current products and brands.

I'm surprised at how many businesses act as if their job is to protect a current brand from change, as if the brand itself is the customer as opposed to the audience. This blinds them to their customers, who are usually the ones driving the rapid change.

The good news is that we're finally seeing some movement with newspapers. More and more are creating new brands that go after audiences that didn't read the newspaper anyway, or extending their brands to audiences like Facebook and Twitter. But think of how much further along they'd be if they had started four years ago? (Side note: At the Bakersfield Californian, where I currently work, new brands have increased our audience by 100,000 individuals in a city of only 330,000. This can work, but it takes time.)

The bad news is that many still think that creating separate brands means they're killing or competing with existing brands. I'm reminded of this every time I see a niche brand that is "Brought to you by" a newspaper. This mindset only makes sense if your goal is to better serve an existing audience, but it's usually a bad idea if you're trying to grow your audience. It's the vestige of protectionism, and you can only hope that the new audience isn't turned off by the marketing tag.

Just to be clear, I'm not opposed to building and growing existing brands, but in today's fragmented world I think that "one size fits all" brands have limited appeal. My advice to mature information companies is to think of their brands as "wrappers" for capabilities and expertise. They deliver solutions to customers. But every audience prefers different packaging, so if you use the same brand for everything you end up polluting their potential.

3. PARANOIA: Companies assume everyone is their competitor, as opposed to potential partners or members.

This is something that affects business people of all types, including sole proprietors. The other day I was talking to a friend who was starting a technology consulting business in a tourist town. I gave her the name of someone else I know there who could help her out. A cloud passed over her face, and she told me, "Oh -- I don't want to talk to someone who's in the same business because they may compete with me."

If you multiply that mindset by a few hundred or thousand, you can see how paranoia can be ubiquitous in many large companies. But in my opinion, the entire premise of this argument is disproven by the open source movement, which shows that sharing leads to more opportunities and lower costs for everyone.

A corollary to this is that information businesses in particular never talk openly about their problems. This makes absolutely no sense because, in my experience, everyone will eventually find out if your traditional business model isn't working. Your current customers are also most likely to want you to succeed, and they may even be able to help you out if you're more honest about challenges up front.

4. BUSINESS BLINDNESS: Most innovation is on the consumer side, but not with the business model.

Finally, the biggest hindrance of all is that core business models don't fundamentally change until it's too late -- and that's a huge problem. You can innovate your ears out on the consumer side, but if you can't eventually grow revenue to pay for that it doesn't matter.

I was reminded of this three years ago when former Knight-Ridder exec Brian Monroe addressed winners of the Knight-Batten Awards. I wrote about his chilling words then, but I'll repeat them here for emphasis.

He told us about how the Knight Ridder newspaper chain -- which has since been sold -- was a pioneer in using digital technology to better inform citizens, "but that wasn't enough. In the end, our shareholders didn't believe in our ability to be relevant in the future. They placed more value in our assets when sold than they did in our future potential."

He said that everyone needed to innovate even more quickly or history would repeat itself and more newspapers and news providers would go out of business. He was right. Lots of innovation has happened, but it hasn't been enough. As a result, people in places like Ann Arbor, Mich., have no daily newspaper.

Power of Fear and Attachment

How is it possible that this could happen when there was so much warning? I think the answer is clear in #1 above: the paralyzing power of fear and attachment. But it also comes down to how businesspeople are motivated and compensated. If you feed your children based on a percentage of sales, are you going to do anything to upset the department store that makes up 20% of your salary? Probably not -- until it's too late and two department stores merge or one goes out of business.

To summarize, innovation is hampered by fear, brand addiction, paranoia, and insufficient focus on the business. What else? Post your ideas here. If we can make a good list, maybe some people who can make a difference will read it and help break the cycle of mediocrity.

Starting now, all ads placed with the Printcasting self-serve advertising tool cost $10, an amount that publishers can mark up per publication. In addition, 60% of every ad dollar is shared with publishers through their Paypal accounts, and 30% of every dollar is set aside to share with participating content providers in the future in proportion to how often their content has been used in Printcasts.

We've also made it easier for advertisers to place ads in each magazine by adding a "Place an Ad" button on the microsite pages. Click that, and you'll see that your publication is automatically selected as a target (see an example here). This allows a business to advertise in publications they like by simply typing in the URL from the PDF printout (possibly in a sample copy that a publisher gives to them), click that button, pay and be done.

• First, we can finally tell publishers and content providers that they can use Printcasting not only to meet the information needs of their communities, but also to help pay the freight for reporting, content creation, printing and distribution. Like our fellow Knight News Challenge project Spot.us, we're helping answer the question of how to pay for local journalism.
• It creates a very compelling new way for local businesses to place affordable ads that they know will be seen locally. This is especially helpful for so-called "long tail" advertisers, that majority of businesses in every town that have very little time or money (and these days less money than ever before), but still need to market their services to stay open. These are businesses like nail salons, home contractors, local book stores, ice cream shops and the like.
• For newspapers, like The Bakersfield Californian and partners such as MediaNews Group, it creates a new way to reach those long-tail advertisers. One of the biggest problems newspapers are coping with right now is that most of their revenue comes from very large businesses. When two of them merge, or one ceases operation, it starts a snowball effect that these days leads to things like cost-cutting, layoffs and a corresponding loss of quality. For this reason, everyone who likes getting local news from newspapers has a vested interest in newspapers' ability to diversify their revenue sources. Expanding their revenue to small businesses is one critical part of that.
• And finally, it completes the feature set we laid out 18 months ago when we entered the Knight News Challenge. From this point onward, everything we do will build upon and improve the core features in response to the feedback and usage patterns of users and partners.

Find more info about on the Printcasting blog about how revenue sharing works and, if you're a publisher or contributor, some important things you need to do to get paid.

So what does this mean for the average person? Up until now, the Printcasting site was focused on Bakersfield, California -- in keeping with the geographic focus objective of the Knight News Challenge. The site has been open to anyone since March, but there wasn't a way for people in other cities to create and find locally-targeted publications for their areas. Now people in Denver, Boulder, Los Angeles and the San Francisco Bay Area can also create locally-focused Printcasts in a way that lets local readers and advertisers find them.

Partners like MediaNews Group will seed those markets with content and use Printcasting the same way as everyone else, but by doing that they also provide content that the community can remix into their niche publications. When we begin to charge for self-serve advertising (which we plan to do very soon), MediaNews -- just as any content contributor -- will receive a portion of ad revenue from Printcasts that use their content. Likewise, if MediaNews -- just like any Princasting publisher -- creates Printcast publications, and they use content from local bloggers, those bloggers will receive a portion of the ad revenue. In this way, Printcasting's partnerships also create grass-roots partnerships between professional and "citizen" media that is mutually beneficial to both parties.

The experience on the Printcasting.com site doesn't change much on its face, as all of the real changes are on the back-end. When you go to the Printcasting.com home page, you'll now see a search box to "Find Printcasting Near You." Enter a zip code and it will tell you if there's a site in your town. If there is, you'll be taken straight to a site that aggregates Printcasts from your area. If not, you're asked to create a Printcast and tag it to your zip code. If we start to see a large number of Printcasts in a particular area, we'll create a site that features it like this one for Bakersfield: http://printcasting.com/bakersfield.

But we're not opening city sites for the entire U.S. just yet. Because Printcasting is such a new concept, we need people to help seed their markets with content (from blogs and professional sources) and publications that use that content. And we also need people who are willing to do the local foot work, and meet with bloggers and community organizations to show them how Printcasting can help them communicate with their audience. I invite you to register your content and create Printcasts, then let me know so that I can start to see where new geographic communities are emerging. If enough people use Printcasting from a particular area, that's a sign that we should open a city site there.

When we first announced our intention to partner, we said we'd work with any locally-focused organization that had expertise in using print to build community. The most natural partners are newspapers because they have local content, local people, and an interest in growing local audience and revenue. Printcasting offers a way for them to do that at lower cost while also leveraging content from bloggers in their communities. Local bloggers will also benefit through ad revenue share, assuming a newspaper chooses to use their content in one of their Printcasts, and that Printcast makes money. In this way, Printcasting provides a way for newspapers -- long leaders in local community development -- to work in partnership with local entreprenurial-minded content providers rather than in competition with them.

This is where MediaNews Group comes in. I met Peter Vandevanter, MediaNews Group's Vice President for Targeted Products, a year ago at his Individuated Newspaper Conference (thanks to former Rocky Mountain News editor John Temple for the introduction!) Peter has been working on his separate I-News initiative, which will soon let readers of certain MediaNews Group papers create personalized editions that contain only the content they're interested in. The approach is different from Printcasting, but the end-result is the same. It creates more opportunity for targeted advertising.

I think Peter is more committed to content personalization and what he calls "individuation" than anyone working in media today, and he proves it by running an open-invitation conference every year about personalized news. Peter is the one who came to me with the idea of using Printcasting as an internal niche-magazine engine. While that wasn't what we created Printcasting for, it made sense. Add to that his and MediaNews' openness to letting citizens in their markets create publications -- even with content that starts within MediaNews -- and we knew that we'd found our first partner.

But there are others out there who are equally interested. From the very beginning of this project we've received interest from organizations around the world -- often newspapers, but also organizations such as universities and membership groups. It started as soon as we posted a prototype in the Fall of 2008, and it caught us by surprise. We're responding to demand rather than going around asking people to participate, and that's a good sign.

Between now and December we will continue to talk to interested parties and roll out more sites in more cities. If you think your organization may be a good match, please let us know! And regardless of that, please feel free to start using Printcasting wherever you are. If you enter your zip code (or international postal code) when you create content, that will be a sign to us to open a Printcasting city site near you.

A confluence of inexpensive, accessible consumer technology, and microblogging sites like Twitter and Facebook, has lowered the barriers of entry so far to make me think we're witnessing the birth of a completely new -- and arguably better -- breaking news system that involves everyone.

Just look at the experience of Lauren, my 6-year-old daughter, with her $68 Fisher-Price digital camera. On Tuesday, it vaulted us both into the local media spotlight within minutes after she captured footage of a funnel cloud forming over our house.

I uploaded everything to Flickr and Vimeo and posted links in Twitter. Minutes later, @CBS4Denver, the local CBS News affiliate, was broadcasting the footage on the air and interviewing me live over the phone.

That night, CBS came to our house to do a segment about my daughter and how she shot the photo on her Fisher-Price camera. Here's that segment, followed by my video footage.

What's most interesting to me is how naturally all of this happened, and how quickly a couple of tweets were picked up and broadcast all over the state. And it wasn't just by CBS -- The Denver Post, Daily Camera and Colorado Daily also pointed to it from their websites.

How It All Happened

Rewind to last Sunday, when five tornadoes went through the Denver area, with one overturning a car and injuring a man taking pictures. Since then, everyone here has been on edge whenever strange clouds form. That day, I bookmarked a local Twitter search for the term Tornado and began monitoring it whenever I heard reports of strange weather.

When my daughter came into my home office on Tuesday saying there was a scary looking cloud outside, I checked the NOAA radar for Denver and didn't see anything. I checked Twitter search and saw nothing as well. So we marched upstairs to take a look ourselves.

And that's when we saw a strange, sideways, shoelace-like cloud that appeared to be growing:

I immediately grabbed my camera and starting taking pictures. It was at this time that I remember hearing Lauren say, "I'm gonna get my camera too!" It was ultimately her photo above that ended up on TV news, also spreading through Twitter via a few retweets that resulted in 400 clicks in just a few hours (according to bit.ly).

Here are the most popular Tweets that started the ball rolling:

I should add that I also addressed some tweets to the attention of @cbs4denver, which made it easier for them to find, as well as @denverpost. I subscribe to both of their feeds and had noticed them asking people to tweet tornado news on Sunday. This was an incredibly smart move by both organizations, as it immediately extended their newsroom to include everyone on the ground. The Denver Post, followed by the Daily Camera and Colorado Daily, ended up embedding my video on their home pages. Vimeo reports that the video has been played 729 times since then, with 400 views on the first day.

How Breaking News Has Changed

This personal experience has really changed my view of breaking news, and opened my eyes to the revolution in news reporting that microblogging and real-time search are making possible. A year ago, I was skeptical of Twitter, thinking it was just another Web 2.0 darling that would quickly lose its luster. Now I'm starting to sense that Twitter, microblogging and real-time search are a new medium in their own right, distinct from being simply part of "the Internet." They're a new chapter in the digital media revolution.

This anecdote also shows how quickly breaking news spreads through Twitter, which, as a medium, is scooping not only local news organizations but also the National Weather Service, which did not declare a tornado warning in Broomfield until 30 minutes after we saw a funnel cloud forming.

This was even more obvious when the CBS 4 news crew arrived, fresh from chasing the storm all the way to Greeley, Colo., and still getting no direct tornado footage. Instead, they spent the afternoon visiting people who had already taken and broadcast their own footage online. There was once a time when a news station provided the main lens on a locality and thus the eye of common experience. Now, the news station's role is shifting to be more of a spotlight on "everycam." As Clay Shirky said in his book by the same name, here comes everybody!

As of today, 180 Printcasts have been set up that have published 734 editions (You can peruse them all in the Printcasting directory ), and 144 registered content feeds. Because we're seeding the market with our own content and magazines some of these are ours, about half of this comes from the community -- which is not bad for the first month, and before we've done any serious marketing.

I'll be sharing more anecdotes about community outreach in the coming weeks. In the meantime, we continue to improve the product based on feedback from people in Bakersfield and elsewhere (for example, see this review and our response on the Metaprinter blog).

The new feature we're most proud of is a new tool that lets you create your own masthead using a photo from your hard drive.

Our development team is going down a punch list of 34 near-term projects like this. And in parallel, we're starting on the next big round of features that will launch in early summer. Those are:

1) Ad payment and controls
We're now working with The Commerce Guys in Jackson, Michigan to build out a straightforward, secure way for businesses to pay for ads (currently free during a trial period). Publishers will also be able to reject individual ads -- or all future ads from a particular business -- before those ads can appear in their Printcasts. All of this should be available in a testable mode in May, and ready to launch in June.

By the way, for you Drupal fans out there, we're really excited to have Ryan Szrama, the lead developer on the open-source Ubercart module in Drupal who recently joined the Commerce Guys team, working on the ad payment project.

2) Revenue Share
The Commerce Guys are also helping us build out a very sophisticated, but user-friendly, system that shares advertising revenue. We will be providing more information about how this will work in the future, but here's the gist.

Whenever a business places a self-serve ad in a Printcast, 60% of that money will immediately be passed on to the publisher via a Paypal account deposit. 30% will be set aside in an escrow account which is shared with contributors on Printcasting.com, and that escrow will be split among them every quarter in proportion to how much their content has been used. The final 10% will be maintained by the Printcasting network to cover ongoing hosting, development, maintenance and transactions fees.

Sharing revenue at all is fairly radical for anyone, including a newspaper. But we'll also be giving much more direct revenue to the citizen publishers on our network than most revenue-sharing services do, and for a simple reason. We feel that publishers bear the highest burden for the success of everyone on the network, and the network itself. They'll be footing most of the bill for printing, distribution and marketing of their publications to their own communities of interest, and contributors will only benefit when they do. If they incur the highest costs, we feel they should get the highest reward.

Note that the percentages above reflect only our current thinking, and they could change. One reason we can keep our portion so low is because our expenses are covered by the Knight Foundation through the end of May 2010. After that date we hope to be able to keep rev-share proportions steady, but much will depend on how much ad revenue is coming in the door by then, and how it compares to network expenses. In that sense, our own future success is also dependent on the financial success of publishers on the Printcasting network. And we like that, because it automatically aligns our interests with the interests of Printcasting.com participants.

Do you think these percentages are too high? Too low? Just right? Let us know.

3) "City Hubs"
As I've written about before, from the beginning we have seen organic demand for Printcasting in other cities. Our original plan was to extend Printcasting to five other cities starting in December, but based on all of the interest out there -- which includes interest from other newspapers -- we will be starting this rollout sooner.

City Hubs will be geographically-targeted launching pads for partners in other cities to promote Printcasting. If you don't live in Bakersfield and you want to use Printcasting, be sure to add your zip code to your Printcast at setup. This data will be used to surface your content on any future city hubs we may roll out.

I can't share which cities will be first because the partners have not been announced yet. But do let me know if you or your organization are interested in sponsoring a city for our national rollout.

4) Print on Demand
If you've ever ordered photo prints from a site like Shutterfly or ordered an on-demand book on Lulu.com, you understand what we want to do here. Imagine an "Order a Printed Copy" button on every Printcasting.com microsite and you get the idea. You click that button, enter payment details, and a few days later get a copy of the magazine at your doorstep (or perhaps pick it up at a local print provider).

When I started this project a year ago I assumed there would be numerous print services that we could tap into using free Web APIs. I was wrong in that assumption. Most of these types of companies don't have full open APIs, although some are beginning to work on them. Now that we've launched, we're finally making progress with getting some large printing companies with national footprints to talk to us, so I'm hopeful that we'll be able to add printing functionality sometime in the summer.

That's the news from Printcasting.com this week. In the future: more about revenue sharing, and how it can benefit individuals, organizations, and also newspapers and printing companies.

For those of you who haven't followed the progress of our Knight News Challenge funded project, the gist is that Printcasting lets anyone participate in niche magazine publishing, and if they do a good job they also stand to benefit from advertising revenue when we begin charging for self-serve ads. It's an admittedly radical idea to come out of a newspaper at a time when many newspapers are cutting back or shutting their doors. As a result, we're starting to attract media attention, with positive mentions in The Miami Herald and Business Week.

But that's all talk. We're launched, so now instead of telling you about it you can jump in and try it out. One fun way to do this is as a Printcasting subscriber. With the permission of Mark Glaser, we've set up a Printcast for this Idea Lab site. Check it out here:

The thumbnail above comes from a special blog widget that's available for any Printcast. Click on it to flip through a facsimilie of what the printed version will look like. To get a copy to print, click the Download link. And if you want to receive an e-mail whenever a new edition is available (which happens about once a day for the PBS Idea Lab blog), click "Subscribe" and provide your e-mail address.

It's also really easy to get a blog widget to promote your own Printcast, or one that you like. Just find a Printcast in the directory (or your own), then click the "Share" link at the top of the page. Copy and paste the HTML code into your blog template, and your blog or Web site promotes a printable PDF version for those who may want to print it out or read offline. When a new edition is published the thumbnail and link will update automatically.

If you have more time you can create a Printcast using feeds people have already registered, including some very good ones from The Bakersfield Californian newspaper. To get your own site's content into your Printcast or make it available for other Printcasts to carry, simply register your RSS feed. All of these tasks take only a few minutes.

You can also print a few copies yourself and leave it at local coffee shops, bars, your local library, or anywhere that people in your community may be looking for local information. That's exactly how we plan to start local promotion of Printcasting in Bakersfield, starting out with the 3,600 blogs on the Californian's eight social networking sites. In addition, those sites have more than 53,000 public user profiles, which is a good indication of active participants who may take 5 minutes out of their day to register a feed or set up a Printcast.

We're also gearing up to work on something a journalism major like myself never expects to be involved in: integrating e-commerce payment into the ad tool. To be honest, this is something we'd hoped to have finished by now, but we intentionally put it off so that we could give the core product the focus it deserved before launch. (Since we planned to make ads free for the first few months anyway, this doesn't hold us back at all and may even make local advertiser outreach easier -- especially in this crazy economy.)

It's been a big year, and a very big week. Thanks to all of you who have followed our progress and given us suggestions, feedback and moral support. Do us a favor and post a link to your Printcasts in a comment. And as always, let us know if you have any questions or need help.