[Each week, our friend Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of the news business for the Lab.]

When The Sporting News began publishing, the telephone was barely 10 years old. First published in 1886, just a decade after “Mr. Watson, come here — I want to see you,” a single copy cost five cents (and a year’s subscription was $2.50).

Flash forward a mere 124 years, and Bell’s invention has been succeeded by brick phones, StarTacs, Palms, and the wonder of our age, the iPhone. But it’s the iPhone’s sister, the iPad, that takes us to our updated story. Take a storied, once-down-on-its-heels brand, the newest-fangled technology, and some smart thinking, and you’ve got a set of products and a business model worth studying.
Sporting News now is actually a set of three distinct products:

• A biweekly sports magazine, its flagship product, which reaches 500,000 readers.
• A free website — Sporting News Feed — heavy on breaking news, trending topics and lots of sports video.
• A newer paid product — aimed at tablets and smartphones, but also to web users — called Sporting News Today.

The pricing of the products is intriguing. First off, Sporting News Today is pitched as a “dime a day” product, 30 issues for $2.99 through Zinio. So what was five cents an issue in 1886 is now a dime “an issue” a century-plus on. As of this week, you can now buy the bundled magazine (standalone: $14.97 for a year) and Sporting News Today apps/access for $39.95 a year.

It’s the path to that pricing and those products that’s interesting.

Last week, I participated in a MediaPost-sponsored Online Media Marketing and Advertising (OMMA) panel, along with Jeff Price, publisher of Sporting News, among others. His comment intrigued me and our follow-up conversation provided more details of his work.

Price joined Sporting News as publisher in February of this year, after seven years as first chief marketing officer and then president of SI Digital. He’s taken a hands-on approach to the job, and that seems to be making a difference in how the company creates and tweaks its products. Price is aiming at an important sports segment, those who rank “eight, nine or 10 on the sports avidity scale” and follow at least three sports (of the six covered by Sporting News). Yes, there is such a scale, and it helps measure highest interest, of course. That’s the group Price is targeting, and therein we have a peek into the newsonomics of sports avidity.

From our conversation, here are three takeaways, worth applying more widely:

• Watch the data — personally. Analytics (see my previous piece on the FT) is important overall, of course. Crunching data on usage, response to offers, and device usage help all publishers tailor their wares. Price took one further step: When the company made a switch to paid access for the Sporting News Today product in early April, it gave users a two-month free trial. Of those that didn’t convert to paid — about 6 percent did, proving the emerging 5-10 percent consensus of who is the target paid audience — Sporting News sent emails to 6,000 of them. Those emails asked why readers didn’t pay up, didn’t convert — and they included Price’s personal e-mail. He got almost 1,000 responses. Those took a week of his time to review, but he learned a lot out of the process that’s now reflected in pricing and product.

  Those thousand or so responses divided into three groups: 40 percent who said they wouldn’t pay under any circumstances; 30 percent who said they’d pay, if it were bundled with the print product; and 30 percent who said they’d pay if it were more than the print product, if it gave them more of what the iPad could specifically do with video, data, and overall interactivity. All of that funneled into pricing plans and the tweaking of the iPad product itself.

• Differentiate the products, reorganize the staff. Sporting News Today launched in 2008 as a free product, one distinctly different from the magazine. In fact, Price estimates that only two percent of the content of Sporting News Today — which promises “30 pages a day, seven day a week by 6 a.m.” — comes from the magazine. It’s increasingly interactive. Price is hiring a new editor-in-chief, one comfortable with a newsroom organized around some shared staffing and then dedicated staffing for each of three products. It’s largely a digital-first operation, but there are lots of moving pieces. “It’s a bit of a Rubik’s Cube,” says Price of the product and business model pieces.

  His goal: 250,000 paid subscribers to Sporting News Today by mid-2011; he’s a little less than a tenth of the way there, with a number of strategic marketing relationships to be announced in the next couple of months. He guesstimates that a 25-percent overlap of customer usage may emerge — free website to print magazine to paid digital access — over time.

• Distinguish yourself from the competition. USA Today Sports is a “snippets” competitor, while Sports Illustrated is more about storytelling, and “ESPN is the 800-pound gorilla in our space.” His plan: Target the busy “commuter, business traveler, and student,” offering a downloadable product so that intermittent connectivity isn’t an issue. The Sporting News position: depth and breadth, covering what moves, in those six sports areas.

  How instructive to the news world is Sporting News’ work? Well, we can say that the sports is more entertainment than news, and subject more to entertainment buying habits. But it is news — niched news of, as we’ve learned, high avidity. And that connects us to those we call — you know who you are — news junkies. I don’t know if there’s a news avidity scale (please do tell), but it there is, it’s those who would score 8-plus on it who are the prime prospects for paying for digital news. It’s that 10 percent, plus or minus, of digital readers that all news companies are sighting as they aim for digital reader revenue. So I think the application is fairly direct. We should watch Sporting News, with news in general in mind, and see which models do — and don’t — move into play.