Dan Gillmor:
At the “Changing Economics of News” gathering in Berkeley, we’re getting down to some fairly core issues. The industry that has provided high-quality journalism (amid the garbage) for all these years had better pay attention. Here are key observations by panel members:

“I don’t think today we know the magnitude of the market failure” in the loss of what’s often called “hard news” reporting, says James Hamilton, professor of economics and public policy at Duke University. (His new book, All the News That’s Fit to Sell”, should be required reading in the industry.)

Are we returning to the economics of the 19th Century, when circulation (as opposed to advertising) provided the bulk of the revenues? Perhaps, says Albert Scardino of the Guardian.

News is becoming a service, not a product, says GBN’s Katherine Fulton. Maybe we’re heading for a world where great journalism needs patrons as opposed to traditional customers.

Craig Newmark says, “The effects we’re having on the classified (advertising) market are pretty overstated.” But he says the news business has lost trust. He’s cautious about predictions, having predicted “lunar colonies.”

Brad DeLong asks: Why is Bloomberg (which hired the Washington Post’s excellent Federal Reserve reporter) more interested in covering the Fed correctly than the Post?

The New York Times’ John Markoff says a discussion like this in five years will derive from near-universal access to high-speed data connections — that the medium will determine a lot of the economics.

Sandy Close of Pacific News Service notes the explosion of ethnic media, a “hunger to be visible” in a world where mass media have failed to reflect society’s realities. Small businesses are the advertising base.

Zephyr Teachout says we must create an architecture for civic involvement, including journalism — but we need to combine real world activity with online work.

Reaching the new America is an enormous opportunity for emergent media, says Sandy Close. She urges multi-lingual jobs classifieds for craigslist, as an example of what’s needed.

Fulton: We are at absolute takeoff point with “motion media” online, a shift in power to different kinds of institutions and citizens. The old institutions (and people) have a preservation mindset, while “the real game is innovation, not preservation” — and will take place outside the current power structure. Is the Associated Press of the future a bottom-up phenomenon?

Kim-Mai Cutler, editor of the campus Daily Californian, notes that the news aggregators and portals — such as Yahoo News — are the current winners. Raises the question of how journalism will be paid for…

More here.