Among business school strategy lecturers, it turns out, there’s a favourite way to kick off a tutorial. They ask: "What business is this company in?"

It could be an airline - let’s say, easyJet. So we all answer: "It’s an airline". And they say, "yes, but what business is it in?" And we say: "the… er… airline business?" And they, of course, say no.

easyJet is, of course, in the transport business - a broader definition that fits because it fights not just (or even mainly) other airlines, but trains and car transport and even inertia - staying at home and doing something else. Thus, it’s also in the sprawling leisure business, up against various diversions and forms of entertainment, because many of the trips being taken on its planes are opportunistic holiday flights that wouldn’t have happened without its low fares. All this fresh approach has a huge impact on how easyJet runs its business, and helps explain why it does jolly well (mostly) in an industry that, mostly, is a struggle.

Turning, now, to the newspaper industry, things have been set going by a piece in the Wall St Journal (link goes to a referring blog; article is behind a paywall the article - thanks Andrew!) by Walter E. Hussman Jr., the Publisher of the Arkansas Democrat-Gazette, where he said: "It is time for newspapers to reconsider the ultimate costs and consequences of free news."

He was arguing for users to stump up, at least for some bits of content. But the argument for paid-for news is dead now, and Vin Crosbie explains why with a typically incisive piece of analysis.

Adrian Monck then follows up Vin with a rather gloomy prediction that, because consumers won’t pay directly, the news business is essentially going to collapse.

"The future funders of general online news content will not be consumers themselves, nor advertising, nor micro-payments. They will be governments and businesses that see ‘independent’ news provision as a public affairs spend."

Really? Why? Let’s ask: what business are we in? What were we in before?

Newspapers have lived for a very long time with an easyJet-style strategic complexity; we journalists would love to think it’s all about great stories and pictures and a vivid, brilliant package, but the ad guys would say we’re in the business of building audiences they can sell. Both are right. We’re also, like easyJet, competing for people’s time versus a million other things to do.

In the web world, the balancing act - between journalistic purpose on one hand, and the commercial realities of building an audience and selling access to it - hasn’t changed, even if the level of competition has. (That increased level of competition has given users choice, so diminishing their loyalty and willingness to pay directly for content).

But the big point is: the audience never fully funded news anyway. Cover prices simply don’t reflect the cost of production. Yet news remains a great way to bring an audience in. The newspaper business has historically been very profitable working this way.

These days, easyJet skimp on the stuff you don’t need, but the quality of the fundamentals - the airline’s jets, safety and flight - is no worse (sometimes better) than traditional airlines. They worked out what mattered, and delivered.

In news, we need to work out the fundamentals, because the old fundamentals of news - what worked in print - are changing. And then we need to work out how to put those fundamentals together - in a world with multiple news sources, bloggers, community, ubiquitous broadband, UGC and YouTube. This is the great opportunity for innovation in online news, and big media organisations have a grand hand to play here. It’ll be much harder for startups to exist in this space because, put simply, newsgathering - primary newsgathering - is difficult. Big news companies also have scale already, and Umair over at Bubblegen - hitting a few nails right on the head - alludes to supporting opportunities in online classified advertising.

Get this right and real businesses will emerge; not just fleet-footed new media organisations rising out of traditional newspaper publishers, but new classes of journalistic operation serving niches made possible by the new means of delivery. Get it right and there’s a new dynamism in journalism; many more journalists, doing a better job because we are more connected to our users than ever before.

Get it wrong and - blimey, yes - maybe we will just have governments, and a few businesses that see news as some kind of charitable cause, telling us what’s going on the world in the old, old style, getting lazy because nobody realised it could have been different. But that would be a terrible failure.

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