Joining us were Zoe Margolis, aka the Girl With A One-Track Mind; Laura Tyler of law firm Schillings; Shane Richmond from Telegraph.co.uk; and novelist and Times journo Robert Collins. Scroll down for some photos from the night, taken by Nell Block; we’ll be back next month for Immersion Drama, more details to follow early next week…

Our panel (l-r): Oliver Beatty, Zoe Margolis, Laura Tyler, Shane Richmond

The estimable Robert Collins

Brought to you by the team behind The Butcher’s Shop (‘Innovative… a literary bearpit’ - The Guardian), and hosted at the UK’s most culturally connected cocktail bar, Future Human is a unique ‘theatre of ideas’ that promises to reinvent the intellectual salon for a decade of radical change and innovation.

At Future Human, guests will be invited to open their minds, become a part of the show and debate important ideas of the age with pioneering thinkers. As they do so, they’ll find themselves immersed in an interactive, brain-spinning spectacle where intellectual exotica can be washed down with a fine lychee margarita.

“We’re looking to take our guests to the frontiers of our radically altered near future,” says event organiser Jack Roberts. “Then provide access to strong drink.”

The first Future Human event will take place on Wednesday, February 10, and is subtitled ‘Advertising at the Frontiers of Consciousness‘. The event will explore how the advertising and marketing industries are using brain science to map human desires. With the help of audience members, the Future Human team will road test some of the cutting edge techniques that are being used to harness the subconscious mind for commercial gain.

Exactly what happens to your brain when you see a 118-118 commercial? And why does a drumming gorilla make you feel happy? What is it that so inexorably draws irrational minds towards particular products and services? All these questions and more will be answered by special guests including Professor Gemma Calvert, a cognitive scientist and neuromarketing pioneer; brand mastermind Greg Rowland; John Phillips, Director of a company that uses ‘multi-sensory’ methodology - including fragrance, sound and touch - to tap into consumer emotions; and popular science-fiction author Matthew de Abaitua, whose debut novel The Red Men is currently being adapted for the big screen.

An airy, upmarket and restlessly creative sibling of the Queen of Hoxton bar, The Book Club is the ideal setting, having already captured the imagination of East London’s smart set.

“Future Human sums up what the Book Club is all about: Thinking and Drinking”, says Creative Director Heather Lawton. “People want more from a night out nowadays, and Future Human will encourage debate, learning and socialising. The cocktails will only serve to make things more interesting.”

Future Human events will take place on every second Wednesday of the month and last approximately two hours. Thereafter, the evening turns into a networking event for guests, who are invited to stay for cocktails, DJs and dancing.

Upcoming events will focus on similarly agenda-setting topics, and feature a roster of innovators and experts discussing the urgent ideas that are changing the face of contemporary Britain.

Future Human, London’s New Theatre of Ideas launches at The Book Club, London, EC2A 4RH, on Wednesday February 10, 2010 with ‘Advertising at the Frontiers of Consciousness’. The event starts at 7.30 pm and entrance is £8.

Tickets are strictly limited, and can be purchased HERE or directly from the venue.

For press and other enquiries, please contact info@badidea.co.uk.

Poster by Bryony Lloyd.

As the editorial captain of Wired magazine, Conde Nast’s future-tech Bible, Anderson professes to behaving “like a complete fascist” towards his small corps of twenty-something staffers. Such totalitarian affectations are, of course, par in the U.S. magazine world, where successful editors are expected to cultivate an autocratic celebrity persona in the Simon Cowell mould: one part Elton John to two parts Lope de Aguirre. In most cases, the peacock plumage masks a deficiency of talent, but not so with Anderson, whose editorial chops are undisputed: Wired has won a series of National Magazine awards recognising its grabby design and editorial, and has an enviable national profile that defies its circulation figures.

Internationally though, it’s through his moonlighting gig as a ‘Big Idea’ authorial guru that Anderson is becoming best known. His 2006 book The Long Tail explained the economic miracle of Amazon.com, illustrating how a company could make more money selling niche products than mass products via the Internet, where shelf space is theoretically infinite. It catapulted him into an A-list of bestselling pop-theorists with Malcolm Gladwell and Thomas Friedman, and led to lucrative gigs on the business conference circuit: he currently delivers around 50 speeches a year at £20,000-£30,000 a pop.

In his new book, Free: The Future of a Radical Price, Anderson takes this idea even further, arguing that the near-zero ‘marginal costs’ of digital distribution – caused by the exponential decrease in the cost of computer processing power, hard drive storage and bandwidth – have created a new marketplace, where free pricing is practically a force of economic gravity. As Google, the poster child of the ‘free’ movement, has disrupted the conventional ad-funded media business model, so the digital economics of ‘bits’ is disrupting other industries in the ‘atom economy’, and Anderson argues that “every industry is either going to have to become free or compete with free” in the future.

“I didn’t invent this, I’m not predicting or projecting,” he says, with typically crisp enunciation. “I’m just looking at the data, and the data says in a world where inputs fall in price, price will fall. That economic model is just the law of physics, and the business models built around that are going to change dramatically.”

Many critics, including his fellow pop-theorist Gladwell in The New Yorker, disagreed with Anderson’s counter-intuition, with some of the more smart aleck pundits snickering that his evangelism for all things free hadn’t prevented his publisher from slapping a hefty RRP on the hardcover at Barnes and Noble (Anderson has pointed out that he did freely distribute digital and audiobook editions). 

Anderson was subjected to more justifiable criticism, however, when the literary journal Virginia Quarterly Review accused him of plagiarising passages of Free direct from Wikipedia without attribution. Responding rapidly, he owned up to failing to cite long passages taken from the online encyclopedia in the advance proof, and explained that pressures to meet publishing deadlines had led to his failure to conduct “write-throughs” of text written by Wikipedians, in which he would have rewritten their entries using different word choices. It was a shaky defense, especially from someone with such a lofty editorial reputation, and many blog commenters took Anderson to task for what they considered, at best, sloppy practise and at worst literary fraud, plain and simple (Anderson later defended himself against the plagiarism charge, telling a reporter in a televised CNN interview, “We live in a remix age…”).

Viewed in retrospect it’s understandable – although not entirely excusable – that Anderson cut corners writing the book, as his resources appear to have been thinly spread at the time. Apart from the editorial duties at Wired, there were conference speeches and travel, the research and writing work for a 75,000 word manuscript, and also commitments to his startup companies BookTour, an author appearance calendar website, and DIY Drones, a remotely operated aircraft community site – and all this at a time when he was bringing up a young family and also suffering from Lyme disease.

It would be a shame if the Wikipedia scandal were to overshadow the ideas set forward in Free, which are genuinely provocative in challenging our inherent distrust of the concept of ‘free’ itself, or what Anderson characterises as ‘twentieth century free’.  Anderson cites two pioneering examples of this hundred year old marketing gimmick in Jell-O’s free distribution of gelatin recipe books to promote a novel dessert product and King Gillette’s bundling of free razors with packets of gum and marshmallows, in order to stimulate demand for disposable razor blades. In both cases, ‘freebie’ products were used as a lure to bait customers into spending more than they intended.

The popularity and subsequent public awareness of the practise has shaped common, sceptical attitudes towards ‘free’ that endure to this day – further proof that, as the economist Milton Friedman liked to say, “there’s no such thing as a free lunch.” But, Anderson contends, that was then.

“We have a complicated relationship with free: we’re drawn to it, but we’re also repelled by it,” he says. “But twenty-first century free is different from twentieth century free. If your supermarket has a sign that says ‘free beer tomorrow’ you should be suspicious that tomorrow will never come, but when Google says, ‘Gmail is free’, I don’t think you need to be suspicious. In the atoms economy -we understand there must be real costs, and those costs must be paid directly – so there can’t be a free lunch. But in the digital economy the costs are manageable, and there can be a free lunch. Someone is paying, but it’s not you.”

And it’s not just in the digital world: in the ‘atoms economy’ many companies have taken a page from digital ‘twenty-first century free’ and reinvented their industries by offering loss leader products and services to profit from indirect revenue streams – what is known as a ‘cross subsidy’. In analysing this topic, Free isolates a popular new business trend; in aviation, Ryanair has rapidly grown into the largest largest airline in Europe by selling its flights for next to nothing. How? A healthy margin is made via ancillary revenues: charging for baggage, check-in fees, credit card handling fees, shares of car rentals, hotel bookings, and so on. Anderson lists other companies who are making money by giving away TV set top recorders, stocks, directory phone assistance, CDs, secondhand goods – even a general store of free products (respectively: Comcast, E*Trade, GOOG-411, Prince and The Mail on Sunday, Freecycle, and Japan’s SampleLab). A particular Anderson favourite is the Portuguese media company Controlinveste, who gave away a 60-piece silverware set, day by day, with the purchase of a newspaper. The boost in revenue from newsstand and advertising sales far exceeded the cost of the Chinese-made cutlery, and the company made a healthy profit.

“Essentially, they found a way to put advertising on spoons,” he says, triumphantly. However, mindful that advertising is no safe bet in a recession, Anderson proposes the most interesting businesses today employ a ‘freemium’ template: that is, free products that upsell premium services. This is the model used with varying degrees of success by online applications like Flickr, Skype, Spotify, Vimeo and others, marrying the reach benefits of digital free with the direct profit of paid.

“The old model for business was ‘make something people will pay for’. The new model is ‘make something people will want and something they’ll pay for’,” he says.

As Free notes, some of the most interesting new applications of the ‘freemium’ model can be found in the video games industry, particularly in free-to-play online multiplayer games, where virtual goods and subscription features generate huge revenues. Originally developed by New Horizon Interactive, the Club Penguin website hosts a ‘massively multiplayer online game’ (MMOG) that became a playground craze in the U.S. after its launch in 2005. By late 2007, there were 700,000 subscribers paying for ‘igloo upgrades’ on the Club Penguin site, and New Horizon Interactive was purchased by Disney in a deal that would be worth a total of US $700 million.

Many modern applications of the tiered pricing model are highly imaginative, and none more so than Radiohead’s 2007 ‘honesty box’ experiment. Fans of the Oxford band were invited to pay what they perceived their new album In Rainbows to be worth before downloading it from Inrainbows.com. According to Anderson, In Rainbows sold more than 3 million copies via direct downloads, CD’s, a deluxe CD/vinyl box set and mp3 sales via digital retailers, and the album proved the band’s biggest commercial success, with 100,000 sales of the £40 box set and 1.2 million tickets sold for a subsequent tour.

But it’s hard to deny that for every music industry innovator like Radiohead, there are ten independent record labels that have ceased trading, and few can convincingly make a case for the digital revolution leaving the music industry in a healthier condition. While few consumers will shed a tear at the decline of large record companies, in an increasingly fragmented market a small number of highly commercial acts – and the companies backing them – disproportionately harvest the income from emerging revenue streams. The Sony-owned entertainment company Syco is currently demonstrating this in the UK with its X-Factor TV show, which has leveraged its commercial worth to the ITV network into an unprecedented dominance of the national music charts.

On a grander scale, Google’s revolutionary free-centric business model, which is heavily reliant on selling search advertising against indexed Internet content, has been accused of contributing to the ‘demonitisation’ of entire industries – from news media to software and telecoms. Thanks to the “network effects” that take hold in digital markets, Internet brands combining a clear niche in their specific field with mass distribution strategies that harness the power of ‘free’ tend to dominate global market share, creating virtual monopolies that can be extremely difficult for competitors to challenge. Google CEO Eric Schmidt describes this approach to achieving mass adoptions as the “max strategy.”

For those who work in industries that have been disrupted by such technological and business innovation though, the ultimate cost is unemployment – a process that can be traumatic. What happens to workers when expensive people businesses become inexpensive software businesses? And is this process really so beneficial for a nation and its communities? Anderson addresses this topic in Free, but never wholly convincingly.

“You either move upstream or you don’t,” he says. “It’s really simple: 10 years ago, I had a travel agent, a stockbroker and a personal tax accountant. They’re all software now, they’re all free. So what happened to my travel agent, stockbroker and my tax accountant? Well, some of them are driving cabs, and some of them moved upstream: my stockbroker became a financial advisor, my personal tax accountant became a corporate tax accountant. They moved upstream to where specialised skills were required – and they got paid more for it, by the way. It’s exactly what you saw with the coal miners in Wales. What happened to them?”

The answer is that the majority (or rather their progeny) work in taxpayer funded local council jobs, while many do not work at all. In 2008, approximately 25% of the potential working population of Wales was economically inactive, with close to 30% working in the public sector. It is not a picture of economic health.

“Well it’s a lost generation,” says Anderson. “For most of them, there’s really nowhere to go upstream. If you’re a coal miner, you can’t be a gold miner… That’s hopefully not the case for most industries. But this is not new; the hot type pressmen, the guys who shoveled coal into boats – all these people have been displaced, and it happens time and time again; software is just the second wave of outsourcing. The first time your job was replaced, it was by an Indian, and then his job was replaced by software.

“There is no simple answer to what happens to the displaced. Some land on their feet and find a better job. Some don’t.”

As the questions come to an end, Anderson droops in his chair and massages his temples with both hands. He ushers me out of the Wired office, past posters of magazine covers that trail lead features about secret Wall Street formulas, groundbreaking technological innovations and the like, and I can’t help but reflect on the throwaway line about coalminers and goldminers: perhaps now he travels business, Anderson doesn’t meet many of the twenty-first century ‘coal miners’ for whom his economically upturned future is a source of profound anxiety? He is an extremely bright man but can seem emotionally detached at times. 

I can’t help but wonder whether his rosy view of the world – where digital economics spreads the wealth around, entrepreneurial innovation trumps state incompetence, and the economically displaced saunter “upstream” into better paid jobs – will have dark consequences. It’s easy to imagine a future following such trends where dying ‘demonitised’ industries are not adequately replaced, millions are dispossessed of a stable income, economic inequality accelerates towards a form of globalised plutocracy and violent social upheaval follows. Some might argue this is an unavoidable staging post in the post-industrial evolution of capitalist nations (Karl Marx might sympathise). But while the democratisation of information in the digital age can be intoxicating, the rise of hegemonic forces like Google and the fragmentation of an economic base that once provided jobs on a mass scale suggests the Internet’s promise of individual empowerment and untrammelled opportunity is chimeric.

Anderson appears uninterested in exploring the juicier political implications of his economic theories, presumably because it might make his business and tech industry clients uncomfortable. Optimism is never in short supply amongst those who identify with Silicon Valley’s ethos of pro-active evolution, after all. Nevertheless, while Anderson must be applauded for bringing the story of our collective drift to digital economics into the public sphere, until he convincingly addresses the wider political and societal problems that will be created by this outcome, his enthusiastic claim that ‘free is the best price’ should be qualified with an acknowledgment that it is not necessarily one without a cost.

Illustration: Jim O’Raw

Photograph: Joi @ flickr 

Welcome to the new incarnation of Bad Idea online – here are some of the exciting new features you’ll find on our refreshed website:

– Long-form journalism. Previously, Bad Idea feature stories have been held back for print editions of the magazine. From now on though, we will be providing a regular diet of feature articles online, for free.

– Blogging innovation. Industry experts and special guest writers will be giving us their informed perspectives on cutting edge developments in the creative industries, finance, science and technology, and the green economy.

 – Conversations with the world’s smartest people. In the coming weeks, we will be talking to Chris Anderson, Robert Peston and Paul Krugman about innovation in the aftermath of financial crisis – and those are just the opening names on a long, distinguished list.  

– Read previous digital editions of Bad Idea. Our new digital magazine archive allows you to peruse past editions of Bad Idea, again for zip nada. Check them out on our ‘Magazine’ page.

– Facebook and Twitter connectivity. Log into our site with your Facebook profile, comment on articles and then continue jabbering with friends in FB Land. You can now friend us or poke us, or tweet about all the poking, to your heart’s content.

– Videos and podcasts. Look out for exclusive multimedia content on our homepage with radio programmes, video interviews and coverage of live events on the way. We’re kicking things off with a debate on transhumanism from our ‘Future Human’ event in London; check out Cory Doctorow, Ian Watson and Gwyneth Jones grizzling over man’s biological destiny. 

– Crowdsourced Innovation Map. A rich seam of location-based information on the UK’s most exciting new companies.

– Reader offers for The VOX POP, our exciting new monthly event. The VOX POP launches February 10 at a secret venue in London; further details are imminent. 

We hope you enjoy the latest iteration of our website, which is really only the beginning of some of the exciting new features we will be pioneering in coming months, so keep your ear to the floor for further updates.

Meanwhile, do let us know what you think of the way things are headed – either in comments on the blog, on Facebook or Twitter, or via email: editorial[at]badidea.co.uk; if you’d like to receive irregular newsletter updates too, you can submit your email at the top of the page for the full B.I. experience. 

Otherwise, keep going boldly readers, and we’ll see you in the digisphere!

For those who missed episode three, BAD IDEA editors Jack and Daniel pitched a website business idea to the managers of Trustedplaces.com, but were told they’d have better chances approaching a sacked banker than a venture capital firm. They also met book publisher Malcolm Croft, who told them there was next to no money available – even for the authors he was commissioning (“I’m not going to use the word cheap but… inexpensive“). It left Daniel wondering if they weren’t headed for “some kind of cataclysmic career suicide.”

In episode four, Jack sets up a meeting with entrepreneur Ben Caulfield, and the duo decide to pitch him a business proposal for creating an “open university” styled online creative-writing community. It’s a big opportunity – but can they make it pay?

To catch up on all the other episodes, visit www.badidea.co.uk/printomortis.

If you missed episode two, BAD IDEA magazine editors Daniel and Jack faced up to a crunched advertising market by brainstorming new moneymaking ideas. These included a digital agency for the sons and daughters of celebrities, ‘artsex.org’, and an application for grant funding to create a “kabuki theatre for the disabled.”

In episode three, Daniel goes to pitch a website business idea to the managers of Trustedplaces.com, and gauge the chances of securing funding from venture capitalists. Afterwards, Jack and Daniel meet book publisher Malcolm Croft as they look to convince him their proposal is worthy of a big advance. They have less than six weeks to save their business – could this be their moment of redemption?

To catch up on past or current episodes, visit www.badidea.co.uk/printomortis – and watch out for the concluding episode of the series, which will arrive in the next week or so. 

BAD IDEA’s monthly writing workshop returns on Wednesday, January 28.
 

Ok, ok – you get the picture, but for those who haven’t been before, The Butcher’s Shop is a unique blend of practical writing workshop and bawdy theatrical experience. 

Short stories submitted by guests are dissected, chopped up, and improved through an intensive process of live editing and debate. Along with an audience of 50 other writers, you can discuss and argue with BAD IDEA’s editors as they place your writing on a 19th century operating table – projected onto a big screen – and go to work removing inefficiencies, excising flabby adjectives and probing narrative structure, involving attendees in a ‘theatre-in-the-round’ exploration of the writing craft.

Plus, for one night only, we’ll be giving aspiring writers the chance to pitch novel and book ideas to top publishers and literary agents. Could the unfinished novel sitting in your hard drive be a ticket to global stardom? We’re offering an opportunity to find out and get some friendly advice – just bring your ideas on the night and we’ll be having an open floor discussion.

Welcome to the world of London newspapers Mr. Lebedev!

Yesterday Paul Dacre confirmed to his staff that ex-KGB man turned plutocrat Alexander Lebedev had taken over the Evening Standard for a nominal sum, believed to be £1, and by the afternoon Rupert Murdoch’s afternoon freesheet thelondonpaper was crowing about the sale in a full-page editorial by editor Stefano Hatfield.

“It is not for us at thelondonpaper to comment on why the Standard’s owners have given up the fight for the price of a chocolate bar, nor to question Mr Lebedev’s ownership credentials. Lord Mandelson, the business secretary is doing that.”

Miaow! In a direct address to the londonpaper’s readers, Hatfield goes on to chastise the Daily Mail General Trust (DGMT) chairman Lord Rothermere for running a “negative, reactionary” paper that had “abused its monopoly,” and claims that “readers and advertisers were deserting the title.”

Then, perhaps inspired by the soaring rhetoric of Barack Obama, Hatfield appealed to the better angels of a newly defined generation:

“We are optimistic and confident because we have you, Generation Free, a million urban Londoners, on our side. For that we thank you, and look forward to a bright future together in the run up to the Olympic Games and beyond, navigating our way together through the credit crunch and the gathering economic storm.”

Bravo Stefano. But on the day his rag pushed on with its usual diet of lifestyle fluff features and celebrity tripe (“Tom: A Move Here Would Be a Cruise,” “Lily Resorts to Life in Jamaica,” etc., etc., ad infinitum) Lebedev gave a press conference in Moscow after two employees of his Russian newspaper Novaya Gazeta –journalist Anastasia Baburova and lawyer Stanislav Markelov (pictured below) – were shot dead by a masked killer in central Moscow. Markelov, who gave legal advice to investigative journalists at Novaya Gazeta, had just given a press conference condemning the early release of a former member of the Russian army, who had been jailed for murdering a Chechen woman. There were also suspicions that Baburova may have been targeted for her reports on Russian neo-nazi groups.

Lebedev said that his journalists were being targeted for violent reprisals, and given little protection from the state.

“I think that the FSB [Federal Security Service] and other law enforcement agencies are not carrying out their responsibilities regarding what is happening with Novaya Gazeta, So we have officially submitted documents requesting the right to carry weapons.”

Lebedev stated he believed the journalists were targeted because of their work at Novaya Gazeta, and that his staff had been working on an investigative story that they have yet to publish for fear of what could happen to the reporters. 

“The editors feel personal responsibility for people dying and are saying that perhaps we just have to close it [Novaya Gazeta]. I understand their position, I too feel a responsibility personally that people are dying.”

All of this adds further credence to Lebedev’s recent comments that the British have no idea how lucky they are to have a free press, however flawed, and it should be pointed out that such a commitment to real journalism is a far cry from thelondonpaper’s powder-puff imitation of the form.

Stefano Hatfield’s tub-thumping could hide wider fears though. As Private Eye revealed this week, Lebedev’s takeover of the Standard was heavily influenced by his friend Geordie Greig, editor of Tatler, and also PR svengali Matthew Freud, who is the son in law of… Rupert Murdoch.

Freud’s hope was that by taking over the Standard, Lebedev would ditch its freesheet spin-off London Lite, which is locked in a war of attrition with thelondonpaper that has seen both titles haemorrhage money in an attempt to see off the other (while striving to discredit their rival’s circulation figures – see the video below), and so help the Dirty Digger make good on a costly venture that is losing News International approximately £20 million a year.

Instead, London Lite has been transferred to a different division of Associated Newspapers (owned by DGMT) and looks likely to be incorporated into their morning freesheet Metro, which has fared rather better than London Lite or thelondonpaper, on account of having an exclusive distribution deal with Transport for London, that sees copies of the paper stacked in tube stations. Practically, this is likely to lead to ‘Metro AM’ and ‘Metro PM’ newspapers, with the latter being a huge threat to thelondonpaper’s future success. 

Assuming the print advertising market doesn’t collapse completely (a very big if at this moment in time), DMGT’s sale of the Standard puts them in a strong strategic position to assert themselves as the dominant force in free newspapers, not only in London but across the country.

If that happens, ‘Generation Free’ will have done for Stefano Hatfield’s thelondonpaper, and DMGT will be rubbing their hands with glee. 

For those of you who missed the first episode, BAD IDEA magazine editors Daniel and Jack received some bad financial news from their bank,  giving them a mere six weeks to rescue their business or face “downsizing,” a process which has grim implications for employee Ben, as “overheads walk on two legs.”

In episode two, the team face up to a crunched advertising market. Realising they need to come up with moneymaking ideas, and fast, they decide to have a brainstorming session. 

To catch up on past or current episodes, visit www.badidea.co.uk/printomortis.

PRINTOMORTIS is directed by the super-talented Channel 4 filmmaker Bronwen-Parker Rhodes, and written by BAD IDEA editors Daniel Stacey and Jack Roberts.

A short extract: 

“Now I’m back in my own house in Dublin, uncorking some nice wine, ready for the vinegar it can turn to when families and friends overindulge, as I am about to. Right by the hole-in-the-wall cellar, I look up to see a vision in yellow: a painting Frank sent to me after I sang “I’ve Got You Under My Skin” with him on the 1993 “Duets” album. One from his own hand. A mad yellow canvas of violent concentric circles gyrating across a desert plain. Francis Albert Sinatra, painter, modernista.”

R.I.P. NYT, 2009.

In a seminal piece in this month’s Atlantic Monthly

A little context: like most American newspaper companies, the New York Times Company, which is owned by the Ochs-Sulzberger family, is getting creamed right now by the worst recession since the Wall Street Crash, declining print circulations, and the slow growth of online advertising revenue at a time when print advertising revenues are falling through the floor. Much of the money from these ad budgets has migrated into the maw of ’search’, which is dominated by Google, and unlikely to come back anytime soon.

Ok, so the climate isn’t great for newspapers right now, but surely a title that has existed for over 150 years should be able to weather the storm? Hirschorn says no, as earnings reports released in October show that the New York Times Company will default on US $400 million of debt in May unless they perform a massive reconstructive surgery on their finances. The company is already carrying US $1 billion of debt, and only had $46 million cash reserves as of October.

“At some point soon – sooner than most of us think – the print edition, and with it The Times as we know it, will no longer exist,” says Hirschorn. “And it will likely have plenty of company. In December, the Fitch Ratings service, which monitors the health of media companies, predicted a widespread newspaper die-off: ‘Fitch believes more newspapers and news – paper groups will default, be shut down and be liquidated in 2009 and several cities could go without a daily print newspaper by 2010.’”

(As we reported recently, American mogul Sam Zell’s recent travails with the Tribune company further illustrate this apocalyptic trend in the American newspaper industry.)

Options for the Ochs-Sulzbergers are to sell some of their other assets – such as the Boston Globe and the Boston Redsox baseball team – to raise cash, or they could sell their headquarters, expensively built for $600 million, in a diving property market and buy themselves some time to turn things around. Another option is to sell the company altogether, and hope that a liberal billionaire like Carlos Slim or Michael Bloomberg will take it on as a trophy asset. Failing that, they could sell out to Murdoch (assuming he’s interested), or even a company like Google or Microsoft, who might “strip it for parts, and turn it into a content mill to goose its own page views,” as Hirschorn has it.

In any case, he sees the future of the New York Times as being web-only, and not very far away, with up to 80% of the company’s journalists being laid off and the rest focusing on domestic reporting, while tapping into other journalistic networks to outsource foreign coverage.

Hirschorn’s overall outlook is optimistic though: that the newspaper will get back to the kind of hard reporting it’s good at, and ditch the fluff lifestyle features that previously underwrote the Pulitzers.

“In this scenario, nytimes.com would begin to resemble a bigger, better, and less partisan version of the Huffington Post, which, until someone smarter or more deep-pocketed comes along, is the prototype for the future of journalism: a healthy dose of aggregation, a wide range of contributors, and a growing offering of original reporting.”

Ah, yes – the Huffington Post, who of course raised multiple millions from American venture capitalists last month by pushing themselves as ‘The Internet Newspaper’. However, in the Observer yesterday, grizzled commentator Peter Preston poured scorn on the HuffPost’s projections as new media hype, pointing out that despite a supposed $100 million evaluation, the company only took $302,000 in advertising revenue between January and August last year according to a TNS Media Intelligence analysis published in Advertising Age;

“Maybe $2m would be a better guess… Take a closer look at where the lifeblood news on which they comment comes from. Huffington Post provides a long source list, including an impressive roll call of bloggers, but the basic facts and developments arrive far more conventionally: from 40-plus newspapers and broadcasting station newsrooms catalogued as providers (including the Guardian, Times and Indy over here). Dig a little deeper among individual strands, moreover, and you wonder how on earth either Huff or Beast could get by without the Associated Press and New York Times.”

And therein lies the crux of the problem, a conundrum that will likely come back to bite Internet news aggregators: the HuffPost currently pays it’s contributors nothing but will surely be forced to amend this business model in the face of its massive injection of capital. If that happens, and their online advertising revenues don’t increase markedly in accord, this will cease to be a laughing matter and their investors could even pull out. Meanwhile, unless someone conceives a genius new business model to save print dinosaurs like the New York Times, the prospects for most newspapers in the US, and also Britain, look dire.