While most headlines today highlighted the 21 percent increase in online revenue for newspapers online (see here, here, here and here) , the real story is that total newspaper revenues continued to decline by a whopping 7.4 percent over last year.

Leave it to Editor and Publisher to focus on the revenue decline. So why can't digital close the gap? Because some of the biggest money makers -- special sections, classifieds, and circulars -- aren't being monetized online sufficiently to make up for decling print subscriptions.

Yahoo is working with more than 400 papers to promote classifieds, which is helping to stem the bleed. But papers need to find a way to integrate local coupons and sales into their content -- currently almost none do.

Customization is another big feature, and again papers are MIA. Not many offer personalized home pages or integrate news from around the web about a particular region, the way Topix.net does. Papers also should receive more of the revenue from personalized pages (iGoogle and MyYahoo that embed their RSS feeds, which also haven't been mined sufficiently).

Newspapers have to work syndication both ways, by making the website the place to start the day and integrating other content from around the web. The biggest competition is from local TV stations, which are doing just that.

Lastly, geotargeting is also critical. By differentiating ads between local and national readers, papers can serve advertisers and charge higher CPM by guaranteeing the appropriate audience.

First there was the sound bite, which the media used to drive popular opinion. Now there's the content bite, where media companies allow snippets of their content to be mashed up as long as they share some of the revenue.

Sony has deals with Google and now Yahoo that allow end users to post snippets of copyrighted music and video as long as Sony gets a slice of the ad revenue. The tools for extracting clips of TV and movie content and mashing it up online have made it a snap, and media companies are recognizing that it's better to join 'em (those who clip content) than try and beat them with anti-piracy technology.

Viacom and others are clipping the content themselves to make it easy to embed video, but that won't stop others from creative endeavors to catch miscues from live TV or montages.

Third-party services such as Mochila and ClipSyndicate and new comer (based in the hotbed of startups, Philly) RedLasso are providing mash-up tools and sharing the money with the media companies.

This enables media companies to squeeze every last once of revenue out of popular video online. Expect more companies to follow Sony's lead.

AT&T made the smart decision to purchase Ingenio, a pay per call (PPC) advertising company. Buying the technology that enables advertisers -- both local and national -- to track and route them over voice over IP networks will broaden its appeal and bolster its Yellowpages.com service.

As I've been saying, PPC is the right model for local advertising and will be the direction the industry will go. Routing calls through VOIP is very cost effective, and majority of local advertisers who've yet to advertise online are much more likely to pay higher amounts for calls than pay for banner ads or keywords.

I've had good success with my pay per action campaigns on directory services, and I wish every service offered it. Soon they will have no choice if they wish to remain competitive.

Pity the poor e-book. In theory reading a tome digital makes all sense, but the code for selling success has been harder to crack than 256-bit encryption. Amazon's Kindle e-book reader will likely to do nothing to improve the fate of e-books, which will go down in history as a solution looking for a problem.

The $400 e-book reader is too costly and too limited in function. Even if you are paying $15 less per title for a best-seller, that's more than 28 book purchases before you break even in the cost of the device.

According Steven Hartley, senior analyst at Ovum

It is big (467cc); heavy (292g); expensive ($100 more than the Sony Reader); and has a black and white display (albeit from E-Ink, manufacturer of the Sony Reader display). Surely users could take a paperback and a mobile internet enabled device to get the same or greater experience (certainly lighter!) for less?

Charging to read newspapers and blogs as well as for email (about 10 cents each!) is also the exact opposite way the industry is going, as well as the business model that should have been chosen.

This device could have worked if it sold for less than $200 and included free online subscriptions (supported by advertising). The Kindle should be a showcase for the power of Sprint's fast wireless data network; instead it's a pay as you go service with high upfront costs.

While making the Kindle PC-independent is cool, are their really that many people who want to buy an e-book as an impulse purchase? If you want to buy a book immediately, their are plenty of bookstores at the airport to do so. And who really wants another electronic device to carry around?

As much as I'm a book and tree lover, the total audience of affluent and avid book readers could probably fit into a Broadway theater. Sorry Kindle, you're not going to make it.

AOL has teamed up with ad firm PointRoll to create interactive "ticker ads that play at the bottom of the video stream.

Pre-rolls are becoming more popular with advertisers but continue despite consumer resistance. While some are predicting pre-rolls will die, I think it is just an adjustment period as video companies learn the right mix of length of ad and consumer get used to them.

Ticker ads, as well as overlays, make sense because they don't interfere with the content, which may not require all of the viewers attention. They must be more compelling than banner ads to warrant higher CPMs, but they can't overwhelm the video content. If they are relevant to the content or the individual, then ticker ads might become an important component of the ad mix.

Via MediaPost

Years from now they will be teaching the story of Blockbuster's rise and fall in business schools everywhere. The once unstoppable video marketing company is bleeding money and market share due to as a resurgent Netflix and slow move to video downloads.

Blockbuster was too aggressive in defending it's turf against Netflix. The decision to remove all late fees from in-store rentals and to allow offer a free in-store rental for every online movie rented decimated the company's revenue.

The deal was too good to be true (I made the jump from Netflix myself). Now Blockbuster's curtailment of free in-store rentals has cost the company customers, and a plan to restore some late fees or raise prices will prompt more of an exodus to other services.

Blockbuster is also considering in-store burning of DVDs, an idea likely to fail as it will give customers the idea that burn your own services are out there and will take too long and cost too much in discs and labor. The company will also start selling/renting music CDs and e-books, which may help, but not much.

The future is video on demand. Today online rentals are just 16 percent of the market (no number was provided for VOD sales), and consumers are showing a growing liking for not having to run out to the store to get or return a movie.

The movie studios aren't so happy about that because they charge the rental stores more for a DVD rental than they do for download because of the associated purchases (candy, soda, etc.) that an in-person rental generates.

But consumer demand will speak, and video on demand and online-to-TV rental services are the answer. From the Amazon Unbox to TiVo service to AppleTV to vide on demand being able to order online and watch on TV is the ultimate solution.

How can these services be made more profitable? Volume, and delivery food tie ins.

Pizza and a movie at home are becoming as popular as popcorn at the theater, and some chain (Pizza Hut, Poppa Johns) should offer free or discounted movies with every pizza purchase. You call and order a pizza, you get a code for a free or 99 cent movie, and by the time the pizza arrives, your movie is already queued up on the TV, either through video on demand or the internet-to-TV service.

The volume tie in would be a video on demand service that provides new releases for $3 and secondary runs at $2 through subscriptions. For $15 you get 6 rentals, 3 being "blockbusters" just available for rental (Shrek, Spidey 3) and 3 additional 2nd tier rentals.
Additional movies cost say $2. That would expand the reliable revenue and reduce administrative costs of charging per rental.

Blockbuster won't die out for the next few years, but it will no longer be part of a growth industry.