Wednesday, September 16, 2009

Murdoch on newspapers (and other things)

News Corp Chief Executive showed up for his latest interview on the Fox Business Network (which he owns) on Monday. Here is a transcript of some of his remarks. He covered a lot of ground, from tonight’s union concession vote at The Boston Globe to the future of newspapers and the inclusion of software on computers sold in China that will block access to certain websites. We are providing excerpts — we trimmed for length, most notably excising his comments on healthcare and taxes (We know it’s the Internet, but we had to shorten it up a bit. You can see or read the whole thing here.

On FOX Interactive possibly looking at job cuts:
“It’s too early to talk about job cuts. … We’ve put new management in there, they’ve been there three weeks and they’re making a close examination of it and they’ll no doubt set some new directions, strengthen other very strong parts of it, and you know, the advertising is at least double what Facebook has and it’s in pretty good shape. But there will be, I’m sure, changes with the new management.”

On Chase Carey assuming the titles of deputy chairman, president and chief operating officer July 1:
“No, we’re not making any commitments on that [being an heir apparent] at all. Chase is coming in to be my partner and right-hand, he was with us for 17 years before. I think he’s like coming home.”

On the upcoming vote for The Boston Globe:
“You know, Boston is a very highly unionized place and they may find that difficult but it’s a great newspaper and a great institution, the Boston Globe, and I can’t see it disappearing. Like all newspapers, I think it will change. We think of newspapers in the old-fashioned way, printed on crushed wood so to speak, with ink. It’s going to be digital. Within 10 years I believe nearly all newspapers will be delivered to you digitally either on your PC or on a development of the Kindle, shall we say…something that’s quite mobile and you can take around with you.”

On the future of newspapers and print media:
“Communications are changing totally and we’re moving into the digital age and it’s going to change newspapers. But if you’ve got a newspaper with a great name and a great reputation and you trust it, the people in that community are going to need access to your source of news. What we call newspapers today, I call ‘news organizations,’ journalistic enterprises, if you will. They’re the source of news. And people will reach it if it’s done well, whether they do it on a Blackberry or Kindle or a PC.”
“I can see the day maybe 20 years away where you don’t actually have paper and ink and printing presses. I think it will take a long time and I think it’s a generational thing that is happening. But there’s no doubt that younger people are not picking up the traditional newspapers.”

On China requiring PC makers to include censorship software:
“I’m not worried because we don’t do any business there, or so little that it doesn’t matter. Foreign media is not generally welcomed there. There are opportunities to have 5% of this or invest in new things that are happening there. But you cannot go in and say, start a newspaper or television or whatever. We have a little television channel we make in Shanghai which is allowed to go on cable networks in the Southeast to a fairly limited audience. We have a license for MySpace there and that will grow and be a very good site.”

On whether PC makers should go along with China’s requirements:
“They would have no option. It’s either those PCs or no PCs at all. You can’t expect great companies like Dell or HP to say we’re going to sell no computers in China at all. It’s too big, it’s too big a part of the world.”

On the recovery of the U.S. economy:
“We’re in very early days yet. Wait until unemployment goes to 10, 11%…and it will…Unemployment is going to go up. It’s going to take some time to get down. Perhaps three years to get it back. We probably and hopefully have hit a bottom here, where things will be pretty stable from now on, not nearly as good as they were a little while back, but it’s going to take time to climb out of it and so that’s okay. As far as we’re concerned, we know we can grow. We have a lot of things happening like new cable channels, we’re having a great few months now in our film company so you know we’re in pretty good shape.”


The Stick Your Head In The Sand Approach To Saving The Newspaper Business

Over the past few years, as the newspaper business got in deeper and deeper trouble, we seemed to increasingly hear some particularly clueless suggestions on how newspapers should save themselves -- almost always revolving around some sort of backwards effort to put the genie back in the bottle, such as by all banding together, violating all sorts of anti-trust rules and colluding to charge for content. Of course, this also ignores basic economic reality on how people view information and news. It also, falsely, assumes that newspapers are the only source for news, and that in stupidly taking themselves out of the market, upstart competitors won't fill the void.
Yet, it seems there's no shortage of silly suggestions along those lines. Mathew Ingram recently pointed to two such examples, with the San Francisco Chronicle publishing journalism professor Joel Brinkley's unoriginal suggestion that newspapers openly collude to start charging and the NY Times' David Carr's misleading profile of a tiny newspaper that has "thrived" by "ignoring the web."
Along those lines, a few people have submitted a rant by another old school newspaper guy, saying that the internet is the "cause" of all of the newspaper industry's woes, and that things would have been fine if all newspapers had simply stayed off the internet entirely. Now, obviously, these are journalists, rather than economists, but anyone with even the most basic understanding of economic principles or just the basic history of markets and innovation would know what happens to companies that ignore how a market is changing. The buggy whip makers didn't thrive by ignoring the automobile industry. They went out of business.
The newspaper industry won't be saved by putting its collective head in the sand (or by agreeing to some anti-competitive price fixing.) The newspaper industry will be saved by finally realizing that their "product" is their community of readers, and that anything they do to serve that community better is the future, not by clinging to a past when there was no real competition.


Developing a Multiple Business Model Strategy

A recent report about the global newspaper industry published by Price Waterhouse Coopers (PWC), and aptly titled “Moving Into Multiple Business Models,” identifies the key questions newspaper execs should be asking themselves in these troubled times.

* Is your brand identity clear - both internally and externally - and focused on what differentiates you from your competitors?
* Are print and new media run as separate operations or as simply two different distribution mechanisms for the same core activity?
* Do you have an integrated paper and online advertising sales team?
* Are you using online to extend your core audience beyond the traditional print readership?
* Will video journalism and print journalism co-exist online?
* What does your audience want from you - and do you know what they will pay for?
* Can areas of non-differentiation be outsourced?
* Have you identified non-core activities that should be downsized or stopped?
* Are you investing today with a clear view of the payback on that capital allocation?
* How will you deal with the cultural aspects of change so as to maximize quality and minimize inefficiencies?
* Have you maximized the mass-market nature of your total readership (print and online) in discussions with advertisers?
* What sort of business will you be running in five years’ time?

In my conversations with people inside numerous U.S. newspaper companies recently, I’ve heard some of these issues discussed, but not most of them. For example, too many metro dailies still keep their print and online operations separate — not a good idea.
Integrated ad sales teams, a multimedia content (and advertising) strategy, outsourcing generic aspects of the operation, and effective brand management are never near the top of the strategy discussions I’ve been part of, though that doesn’t necessarily mean that industry execs aren’t aware of them.
The one question every U.S. newspaper company has addressed repeatedly is downsizing. But the PWC list is a reminder that papers have many other avenues to pursue besides cutting staff if they want to survive the transition to tghe new media age.


Tuesday, September 15, 2009

What Business Are Newspapers Really In?

Sitting at breakfast this morning in Washington, DC, I heard a familiar tale of woe from my friend. Both he and his wife are talented, experienced, and recognized journalists. He has first-rate credits as an op-ed page editor, she has won outright or shared in two Pulitzer prizes. But today she is an ex-journalist, having taken a buy-out from her paper and then gone on to form, with several other former journalists, an investigative service firm that does work for hire, often taking on difficult in-depth projects for law firms or corporations looking to use the skills of a proven reporter. He has endured involuntary furloughs and passed up, so far, various buy-out offers his paper has offered.
It was a familiar and sad story. The papers he and his wife have worked for have huge brand names--and also impenetrable bureaucracies. Like General Motors, they seem impervious to signals that tell them they must change, sluggish in their response to dramatic shifts in customer habits and preferences, indifferent to changing capabilities in technology, and stubborn in their insistence that they are right, they are important, they are special--and that if there is a problem, it must be that their competitors aren't playing fair or their customers aren't sufficiently grateful for what they have to offer.
Soon breakfast was over, ended with a sad shaking of hands and shaking of heads as both of us considered the almost inevitable demise of once-proud and once-great journalistic institutions. He headed back to work and I headed to the airport to board an Alaskan Airlines flight to Seattle.
In the course of the almost six hour flight I found myself re-thinking that breakfast conversation. Did it have to happen? Are newspapers doomed to extinction? What if, I wondered, I applied one of my favorite rules from my new book Rules of Thumb," Rule #6: If you want to see with fresh eyes, reframe the picture.
It's a rule that I learned from Harvard Business School's late, great marketing guru, Ted Levitt. In his legendary Harvard Business School article, "Marketing Myopia," Ted essentially invented the concept of re-framing. The problem with most failing businesses, he argued, was that they didn't understand what business they were really in. The demise of the once-great American railroads, he argued, was due to the fact that they thought they were in the railroad business when, in fact, they needed to see that they were in the transportation business. A company that made power tools thought it was selling drills; but its customers were buying holes.
What business are newspapers really in, I wondered? Clearly not the newspaper business--that is too prosaic, and clearly too one-dimensional. Only a fool would think he was in the newspaper business today and expect to survive. So what business--or businesses--are newspapers really in?
How is a newspaper like a comedy show? Jon Stewart ranks as the fourth most-trusted source of news in America today--and by his own description, he's proud to call himself a comic. What he offers that is so valuable is the truth behind the news--the truth that only comes clear through exaggeration, distortion, and outright lying. In other words through comedy. But it's not only Jon Stewart (and Stephen Colbert) who make sense of the news by making fun of the news; so does The Onion--to great success in both print and in web-based video. British newspapers, famously, take far more risks and make far more fun of the newsmakers they cover. When did American newspapers start taking themselves do seriously? Is it conceivable that reading a newspaper could be fun again?
How is a newspaper like a consulting firm? It's not just my friend's wife who's decided to take her core competency as an investigative journalist and ply her trade digging up material for lawyers and companies. There's a firm in Denmark that consists of a dozen or more former journalists who offer the same service--and who are flourishing in their new business. What is a newspaper if not the talents and skills, the experiences and capabilities of the people who work there? It's certainly not the sheets of newsprint and the ink--that's just the product. The paper itself is the applied intelligence of the people who work there. So why couldn't a newspaper offer investigative reporting services to outside clients? Well, in fact, at least one does: The Economist. The Economist, which is the magazine that both Time and Newsweek wish they were (and which calls itself a newspaper, incidentally), has its intelligence unit, an operation that does exactly the kind of work my friend's wife is setting up to do--because her newspaper didn't have the brains to see that it could be in that business itself.
How is a newspaper like a talk show? As an op-ed editor for one of America's great daily newspaper, my friend has carefully and thoughtfully built a stable of op-ed contributors who supply the paper with commentary, analysis, and opinion. And as large as that stable is, there's always room for new voices and fresh insights. But here's the problem: the stable of contributors is much larger than the op-ed page of the paper. Voices go unheard for long periods of time, simply because there isn't room in the paper to contain them. A phenomenal asset is going under-utilized. But what's to prevent the paper from becoming a talk show--both metaphorically and literally? Why shouldn't my friend conduct regular conversations with op-ed contributors, under the newspaper's auspices, and post them on the web? Right now we've got Jon Stewart, Stephen Colbert, Larry King, Charlie Rose, and Oprah--and every aspiring author, pundit, and pontificator pines to be on their shows. Why not launch a newspaper-sponsored web-enabled talk show?
How is a newspaper like a credit card company? Membership, as the old credit card marketing saying goes, has its privileges. Why shouldn't newspapers sell memberships, instead of subscriptions? For a base level membership, you get the base level newspaper: standard-issue coverage of the news of the day, news as a commodity. Want to reach the level of a silver card holder? That gets you a slate of op-ed columnists, behind-the-scenes sports commentary, access to the newspapers pundits and sense-makers. Ready to go for the gold? With gold you get the investigative unit, the behind-the-scene interviews, the bells and whistles that a great newspaper now gives away for free. And platinum! That gets you a weekly conference call featuring the paper's top editors, smartest columnists, and coolest reporters--and chance to get briefed, along with other platinum members over the web, over the phone, or, on special occasions, in person.
How is a newspaper like Alaska Airlines? The airline industry is, arguably, as bad a business to be in as newspapers. But somehow, Alaska Airlines, on which I'm currently sitting, makes it actually pleasant. Despite an unendurably long flight, everyone on the plane is in a good mood. In part that's because the flight attendants are amazingly friendly, courteous, even funny. In part it's because the plane we're flying on is brand new. It's clean, it's fresh, the seats are comfortable, the carpet isn't worn, and the rest rooms are spotless. But it's also the way they do business. After we take off, the flight attendants come down the aisle with personal video units. For a small fee, you can rent one and watch movies all the way across America. A little while later, they come down the aisle with food carts. Want to buy a cheeseburger? A neatly packed variety of snacks, trail mix, pastry, or chocolates? It's all ala carte, you have to pay for it, but it's done well, it's done pleasantly, it's done with service, and it's done with a smile. If people are hungry for the news, or eager for some entertainment, can't newspapers serve those up ala carte, too? No self-respecting airline thinks its actually selling a seat on a plane. When will newspapers figure out they're not selling newspapers?
They've just announced that I need to shut off my computer; we're landing in Seattle. Seattle, a city that recently suffered the loss of its newspaper, Seattle, home of the defunct Post-Intelligencer. It died, undoubtedly because it thought it was in the newspaper business.


Get Out of the Printing Business, Moody’s Tells Newspapers

Unless newspapers can figure out how to reduce their high fixed costs of printing and circulation, their already low credit ratings could fall even farther, Moody’s Investors Service warns in a report relased Thursday.
The newspaper industry’s fundamental problem, Moody’s Vice President and Senior Analyst John Puchalla writes in the report, is that is spending far too much on producing and delivering a printed paper than on creating its content and selling the product.
Moody’s calls it a “structural disconnect” with just 14% of cash operating costs, on average, devoted to content creation, while about 70% of costs are devoted to printing, distribution and corporate functions. The remaining 16% of costs are related to advertising sales — another example of devoting too few resources to the principal revenue driver.
“This disconnect is a legacy of the industry’s vertical integration beyond content creation and into the production and distribution of newspapers,” Puchalla said.
The high fixed costs — combined with high debt among many newspaper companies — is squeezing cash flow as revenue declines.
“Ultimately, we expect the industry will need to reverse the vertical integration strategy through cross-industry collaboration and outsourcing print production and distribution processes,” Puchalla said. “Although newspapers may lose some of their in-house control over press time, they would also release resources to beef up investment in content and technology.”
Moving to an online-only model is probably not practical right now, Moody’s adds, but it says a “hybrid model” combining a greater emphasis on Web content with reduced print frequency might be the answer.
Moody’s says this “structural disconnect” also threatens the credit ratings of newspaper companies, which are already depressed compared to historical levels. Nearly all publicly traded newspaper companies now have credit ratings considered below investment-grade, or “junk” — including such respected chains as The New York Times Co. and Gannett Co. Inc.
Low credit ratings increase the cost of borrowing, and reduce access to money not just from lenders but from institutions that will not hold stock in junk-rated companies.
The bad news, Puchalla said is that as low as newspaper credit ratings are now, “additional downward pressure remains.”
“If newspapers can’t monetize the content in new digital channels at the same level as with print, or cut structural costs enough to keep up with the changing competitive environment, the prospect of additional recapitalizations or shutdowns will grow, adding further pressure to
ratings,” he added.


The Rise and Fall of Traditional Journalism,

By Kurt Cagle

The centuries-old profession of journalism is undergoing change so cataclysmic that it may soon be unrecognizable. The journalist as hero -- Edward R. Murrow, Walter Cronkite, Bob Woodward -- has become displaced by the pundit. Advertising moved to the Internet, and the ground began crumbling as a disaster waiting to happen began.

The term "journalism" conjures up powerful memories for many people. For some, it's the epic confrontation between Edward R. Murrow and Sen. Joe McCarthy, which ultimately led to the senator's downfall and the end of the Red Scare. For others, it's Walter Cronkite, whose stentorian tones and skill in telling the story served to chronicle the 1960s, earning him the sobriquet of the "Most Trusted Man in America." Still others can point to Bob Woodward's coverage of Watergate during the 1970s, which ultimately forced President Richard Nixon to resign in disgrace. Indeed, Woodward's role may have spawned a number of TV shows and movies over the years in which reporters and journalists are featured heavily.
Indeed, these have, in turn, created an image of the journalist as hero -- investigating mysterious deaths, corrupt politicians and battle-torn war scenes -- and contributed a fair share of hoary tropes, from the spinning newspaper used to showcase some public "scoop" to the hoards of microphone-laden reporters converging on the villain as he's perp-walked into the courtroom.
For all that, the vast bulk of journalism was far more mundane: hours upon hours of research; even more hours of waiting for or arranging interviews; sitting in on public meetings and taking notes; long hours on the road traveling; and, of course, spending a great deal of time writing. With a few exceptions, journalism tended to be a career with comparatively little personal recognition or pay at all but the highest levels, especially as newscasters -- talking heads -- increasingly become the ones to speak the words the journalists wrote.
Despite all of that, many journalists have been happy with their jobs -- even with the stress, the long hours and the comparatively low pay. However, several factors are now pushing the journalism profession, as it exists today, into extinction.

Rise of Big Journalism

Modern journalism exists due to a curious convergence of factors that trace their origins back to the beginning of the last century. Newspapers have been around for a long time. When The Boston News-Letter, the first regular North American publication, went to press in 1704, Europeans had already had newspapers for nearly a century.
Benjamin Franklin got an early start in journalism as a regular contributor to his brother's newspaper, The New England Courant; later, he purchased the Pennsylvania Gazette in 1728 and proceeded to make it one of the most successful newspaper of the 18th century, changing its name to the Philadelphia Evening Post in the 1780s (to become one of the first daily papers) and then, after a change of ownership, to the Saturday Evening Post in 1821, which survived, aside for a few short interruptions, to the present day.
Until the late 1800s, most newspapers were paid for by subscription, donations, and the occasional support of local governments. Stories were typically gathered by reporters who would either cover local events or wait by ports or near gatehouse taverns in order to get stories from incoming travelers, sea captains, or other "reliable witnesses."
They would write up these stories in their "journals" (from the French word for "daily") and then sell them to local printers, who would produce broadsides. As papers began to develop more prestige, it became increasingly common for world adventurers to keep regular journals of their wanderings and then sell the stories to news-magazines when they returned home to help recoup costs.
With the invention of considerably more sophisticated printing technology (photogravure) in the 1870s, it became possible to create photographic images for reproduction in newspapers and magazines. This period also, not coincidentally, marked the rise of the advertising industry -- as such a process made possible the easy reproduction of advertising graphics -- and the rise of photojournalism. The additional income from advertising made it possible for formal news organizations to arise, both for local coverage and, increasingly, for foreign coverage.
Printing presses are expensive pieces of equipment and, as such, represent a significant barrier to entry, particularly for a newspaper. Magazines can be printed in runs with other jobs, but newspaper presses are highly specialized machines that can't really be suborned to other tasks, even if there should be time to run them. This has kept the number of newspapers down to a few for all but the largest cities, with many of the secondary papers serving a specific language demographic. This meant that as newspapers grew, so did their advertising sales departments, which often developed in tandem with one or two specific agencies that frequently were themselves acquired by the newspapers.
Papers survived the arrival of the radio -- and later, television -- because they offered a medium that complemented rather than competed with the other media. Specifically, with newspapers, a reader wasn't constrained by the schedule of the broadcaster. Moreover, newspapers could provide a low-cost alternative for many small-scale advertisements -- job listings, real estate and automobile listings, want ads and personal ads -- and they could also distribute coupons and other tangibles that could be shipped with the papers, something neither radio nor TV could do.
This meant that journalism itself became "Big Journalism," with journalists deployed throughout the country and the world. Syndication also helped, as it helped the largest papers establish brand name columnists with various specialities, while giving smaller papers the appearance of being far more heavily staffed than they actually were.

Rise of the Pundit

It can be argued that newspaper journalism reached its apex in the 1970s, and that it has, in fact, been in decline ever since. One factor was the diminishing costs of video production, which, when combined with the growth of cable TV, made the creation of specialized news, analysis and entertainment channels feasible. This not only siphoned off advertising dollars, but also proved a powerful allure to young reporters who saw TV news as being more visible, lucrative and satisfying than print. A similar phenomenon occurred with radio in the 1930s and '40s.
The second factor was an increasingly fractured and factionalized market, which made it harder to sustain the illusion of objective journalism -- an illusion that was only really made possible by the presumption of a monolithic culture that held sway in the 1950s and '60s. A newly politicized journalism had an overall corrosive effect upon the perceived authority of the journalist, and good investigative journalism gave way to the rise of the pundit, an opinion maker who did little to report news and everything to shape it.
The mania for mergers in the 1990s and early 2000s was the third factor responsible for the demise of big journalism. During that period, many previously independent newspapers, radio and TV stations were purchased by large news consortia such as Gannett, McClatchy, and Knight-Ridder (itself purchased by McClatchy in 2006). Newspapers have traditionally been extraordinarily profitable, and a common strategy has been to use the papers themselves as collateral for purchasing the papers -- a process facilitated by the use of low-grade (i.e., junk) bonds. Once purchased, editorial operations were often evaluated, and editorial departments downsized in order to get the maximum possible profit.
Advertising had been undergoing its own large-scale consolidation that mirrored the newspaper publishing industry. Large advertising concerns bought up smaller, newer ad agencies, which, in general, pushed them to supporting large clients such as automotive manufacturers, pharmaceuticals, insurance companies, and so on -- typically pushing the cost of advertising out of the reach of smaller producers, who increasingly moved to the Internet. This dependency upon high dollar accounts was a disaster waiting to happen.

In a world where everyone can be a reporter and everyone can sell advertising, and where search-engine powered aggregators can gather fat bundles of related news content from sources scattered across the globe, is it possible for a branded news organization to survive?

The economy came crashing down in September 2008 as the credit markets seized up, a massive dislocation which is now, tsunami-like, causing huge damage to the economy. This has significantly reduced the amount of credit available for businesses, and has put publishers, consortia and advertisers -- many highly leveraged -- into a situation that forces them to liquidate parts of their businesses and lay off large numbers of workers just to make the ballooning payments on their bonds.
Many news organizations -- made vulnerable by media competition, the rapid drying-up of advertising dollars, fragmenting markets and the Internet -- are being forced to close their doors, and it is very likely that many cities' alternate papers, and in some cases their primary papers, will cease production this year.
The advertising market has collapsed. Automobile manufacturers are now either in or near bankruptcy. Financial services are, of course, in disarray. Real estate is facing its worst markets since the mid-1930s, and luxury goods advertising is disappearing as conspicuous displays of wealth make people targets.
With 5 million jobs lost in the last year and countless others facing reduction in hours or pay, consumer spending has given way to consumer saving. Advertising hasn't completely disappeared, but its place as the engine driving journalism most certainly has been significantly diminished. In many places, advertising itself is being rethought as the Web continues to become more pervasive in our lives.

The Web's Devastating Effect

During the 1930s, a number of newspapers that had survived for decades finally succumbed to the ravages of the Great Depression, but once the economy started to recover in the late 1930s and early 1940s -- and especially as World War II created an insatiable demand for news -- the newspapers in general came back, and many new ones were started, incorporating new technologies in order to be far more competitive.
Eventually, the current crisis will end as well, but it's likely this time around that newspapers will not recover with the rest of the economy. A big part of the reason for this is the Web -- more specifically, the rise of search engines, social media and semantics, known as the "Triple S Threat." Taken together, these technologies give a significant competitive edge to the newest generation of publishers: everybody.
During the 1990s, as the World Wide Web first began taking shape, designers were torn about which medium the Web was most like. Was it more like a magazine, a newspaper, radio or television? In fact, it was like all of them ... and none of them. The Web could mimic the characteristics of other media, from the telegraph and telephone to 3-D worlds. Moreover, it could make it possible to combine these media in ways that no one could have imagined when the first Web browsers appeared. This fluidity of media became the first, most obvious, threat to existing media organizations.
However, the Web proved to be devastating in more subtle and insidious ways. Most Web pages can be thought of as content liberally sprinkled with hyperlinks to other content. These hyperlinks create alternative pathways to content that often bypasses branding (and the corresponding gates), and what's more, they make the content searchable.
Search engines like Google (Nasdaq: GOOG) and Yahoo (Nasdaq: YHOO) have changed the dynamics of the Web completely. Instead of locating content on the basis of a brand -- in this case, embodied in the server address -- they make it possible to find content by using keywords, in ways that frequently render useless the carefully designed front-page portals that companies often spend millions to develop.
Further, search results generally are sorted by relevancy, and freshness plays a big part. Because they search across news sites, the search engines themselves are very quickly fulfilling the timeliness aspect of contemporary journalism.

Everyone's an Advertiser

This aspect of the collision of journalism and search engines flared recently when the Associated Press threatened to sue aggregators of its news content. Google has a formal aggregation agreement with AP, but Google CEO Eric Schmidt nevertheless warned it -- and related organizations -- that they risked angering users of news aggregation services at their peril.
The Google chief executive called on the newspaper bosses to engage with readers more thoroughly.
"These are consumer businesses, and if you piss off enough of them you will not have them anymore," he said. He also condemned many of the newspaper publishers' Web sites for the poor quality of their technology. "I think the sites are slow, they are slower than reading the paper. That can be worked on, on a technological basis."
In this context, it's also worth nothing that Google has very quickly usurped the role of the advertising broker from Madison Avenue. Indeed, in many ways it is better to think of companies such as Google or Yahoo less as search engines and more as advertisers.
Because they control such a critical part of the Web browsing pipeline, they are able to pull together semantic information about users based upon internal profiles, and thus are much better able to target these users at a level that most ad agencies a couple of decades ago would have found impossible to achieve. Not surprisingly, those seeking to advertise are attracted to this -- even more so given the comparatively low cost of such advertisements.
Yet there's another thing tearing away at the advertising firmament. Programs such as AdSense make Web site owners into ad space sellers, even if the Web site in question is a single-person shop operating a blog.
This approach takes advantage of the distributed nature of the Web to make the "long tail" profitable, and it serves to further weaken one of they key benefits that traditional media have had: the ability to sell advertising space in a broadcast fashion.

Social media arose in a scattershot fashion as experiments in online collaboration. In the beginning, they were all fun and games. As blogs, podcasts, social networks and Twitter feeds developed, however, amazing possibilities began to unfold. For one, anyone could be a reporter -- and, in some ways, tech-savvy bloggers could arguably be better reporters than traditional journalists.

The shift from highly centralized corporations to distributed, networked "clouds" of micro-businesses is a hallmark of the Internet age, and it finds its expression most clearly in the rise of social media.
Social media services can best be thought of as ad hoc organizations of contributors providing media content of some sort over the Web. The variety of such services is stunning: blogging, for editorial content; Flickr, for photographic postings; YouTube and similar services for video; for sharing of musical tracks; Twitter (more about the Twitter phenomenon below); DeviantArt for sharing graphical art; eBay (Nasdaq: EBAY) for buying and selling; Craigslist for advertising just about anything, including job listings; LinkedIn for business profiles; MySpace for music profiles; Facebook for general profiles; Wikipedia for encyclopedia entries; and so on.
This short list doesn't even begin to consider the universe of related applications that provide value-add to a primary social media service.

The T-Blogger as the New Journalist

Blogging represents one of the most immediate threats to traditional journalism, to the extent of likely supplanting it completely within the next decade. A blog consists of a do-it-yourself article published on the Web by means of easy-to-use content management tools. What makes a blog so devastating, however, is that once it's posted, that blog content is syndicated through specialized news feeds, which means that anyone who has subscribed to it will be notified (in one way or another) of every new post.
That solved one of the major problems of the Web: knowing when new material was posted to a given site. However, it also had an unintended side effect. The first large news sites on the Web were not that radically different from newspapers or magazines, in that competing effectively required a significant investment in infrastructure: servers, content management systems, customized programming and so forth. The investment in printing presses served as a barrier to entry against anyone becoming a publisher in the 1930s, and that looked to be holding increasingly true for the Web in the early 1990s, as large media corporations set up their "Web presence" with multimillion dollar Web site roll-outs.
Blogging, however, changed the dynamics of publishing on the Web completely. Anyone could set up a blog within perhaps an hour tops and at little to no cost; could post content to it as often as desired; and lay out that content in a way that appeared visually identical to what was being published by the large news organizations (or could go the other direction and make the output unique).
Early on, most blogs were, ironically, journals that recorded day to day personal experiences. Yet over time, different styles of writing emerged as people with different talents, interests and needs-to-communicate started writing.
Some bloggers began to treat their entries like news articles, reporting on local events or even on global events as their means permitted. Some began to concentrate on analysis writing -- particularly those people in areas such as financial services, who could provide their own opinions about trends in the markets; or political analysts, who performed the same service in the halls of power. Some became reviewers and critics of everything from consumer electronics to food to film and theater, and some concentrated on writing tutorials or technical articles.
The upshot of all this has been that a second area of journalism -- the creation of "news" content -- is increasingly shifting from the domain of the "professional journalist" to the "dedicated amateur." For a relatively short period of time, this arguably reduced the overall quality of news content. Certainly, that is the opinion of many dedicated professional journalists, and there's some merit in it.

Student Becomes Teacher

However, the same thing is happening now as happened back in the 1990s, when amateur designers found themselves establishing a new visual feel for Web sites. The professionals approached Web design with a certain disdain, applying the same rules that had worked so well in print ... but they didn't work terribly well on the Web.
The amateurs, starting with fewer preconceived rules, were able to establish themselves more quickly in the new media, and in many cases became the next generation of professionals, while established design firms either made the transition or faded into obsolescence.
Bloggers have been diligently producing articles -- in some cases, several articles a day -- since 2003, which means they have had six years of exploration in a completely new medium, finding out what works and what doesn't, all the while studying the works of established journalists to compare and contrast. In many cases, what it means is that these dedicated amateurs know their medium -- and know its writing styles and limitations -- far better than the supposed professionals.
Not surprisingly, many of the more forward-thinking professional journalists started blogging on the side. As a consequence, they are now far better placed than many news organizations, particularly those that are undergoing upheavals as they make the transition to "online" or "virtual" publishing.
As a side note, there's some question about how effective these "real-to-virtual" transitions really are. In general, if an organization had already established a fairly broad online presence in the earlier part of the decade (or even earlier), the issues of Web presence, infrastructure investment and the like have generally been solved.
The likelihood that a purely offline publication will survive the jump in the current environment is pretty close to zero, as a dedicated offline subscription base generally does not, in fact, translate into a dedicated online readership.

The Online Conversation

A second phenomenon that has been taking place is what might best be termed the "Online Conversation." While there have been a number of different instances of this, one of the most recent (and most popular) is Twitter. Twitter began as yet another "social nightclub" conceit, letting users post (very) short messages describing what they were doing at that moment, and letting them subscribe to their friends' feeds to see what they were doing. Like a lot of significant social media, however, Twitter evolved.
At some point, the Twitter staff decided to add the ability to embed shortened (tiny) URLS into the status messages if longer site URLs were supplied. That meant people could start pointing to articles they'd just read and pass that information to all of their "followers." This setup became the equivalent of "headline news" -- short teasers that could function as succinct reports of breaking news events in real-time, often delivered via an Internet-connected handset. They could also be linked to longer news stories, images, videos, or analyses.
The coming-out moment for such real-time journalism occurred when an observer in New York, Janis Krums, who was videotaping flights coming out of the airport, watched in disbelief as a jet took off, then emergency-landed in the Hudson River. He caught the plane's aborted flight with his cellphone camera and uploaded the shots to Flickr , sent out a running "tweet" stream as events unfolded, and was even there to cover the orderly evacuation of the plane.
Krums, an amateur blogger/twitterer, managed to report the critical breaking news in its entirety before the first "professional" journalist could even arrive.
What's significant here is not Twitter in and of itself, but the integration of the various social media, first in an ad hoc way, but increasingly in formalized ways. Someone can Twitter a given online blog posting or event, which, if its interesting, will get picked up and spread around so that others can also determine its import. Among them, someone will follow up on the story (possibly via Skype or a similar electronic phone system), check it out, post a video to YouTube and photos to Flickr; then either write up another article or do a podcast, linking it back to Twitter or Facebook. The posted article, once published, will then appear on a news feed that can get pulled in by subscribers, and possibly get posted as part of an electronic newsletter sent via email.
Notice that despite the fact that the information involved may be newsworthy, there's no mention of publishers, editors, printers, graphic designers, or even newsboys delivering the paper from a basket on their bicycle. The whole process, from the actual event to a notice landing in your email in-box, might take place within the space of an hour. Where the event happens is not really a factor. The blogosphere and twittersphere were essentially tracking a recent Obama/G20 meeting in real-time, with aides on the scene capturing events as they were taking place at a locale that, for many "observers," was half a world away at a level of access that was very exclusive.
Facebook has recently made it possible to embed tweets into the Facebook stream, while Google (Nasdaq: GOOG) indicated that it was in discussions to acquire Twitter and integrate it into its own increasingly sophisticated news system. Whether or not the latter will happen, the reality is that new media are already talking to one another, and will likely serve only to accelerate the demise of the traditional media institutions.

The Web has changed the concept of community. "Community" no longer only means the people in your geographical vicinity. It also means the people who share your interests, regardless of where they are. As Web users in any given community are able to more actively create and self-select the news that interests them the most, traditional channels of journalism are swept aside.

Ask someone about the future of journalism, and it's likely that most people will point to something like E-Ink or perhaps the Amazon (Nasdaq: AMZN) Kindle -- high-fidelity readers that use millions of embedded, magnetically sensitive spheres which can show a black, white or in-between state to create dynamically refreshing text content. Such readers no doubt have a great deal of potential (along with a number of other display technologies), but while it's entirely possible that future newspapers will be displayed on such readers, they will also be displayed on laptops and netbooks, on cellphones, on car heads-up displays, the refrigerator, specialized glasses, and ultimately even our shirt-sleeves.
This highlights the real future of journalism -- it is increasingly ubiquitous, increasingly participatory, and increasingly germane. Ubiquity is a function of search; participatory is a function of social media; while increasingly germane has to do with a relatively new concept that's been of largely academic interest in the last few years, but is increasingly entering into common usage -- the semantic Web.

What Is Community?

Semantics is one of the more obscure (and philosophical) branches of linguistics, and in the acaddemic sense, semantics is largely preoccupied with the concepts of meaningfulness and relevancy. As such, it tends to be seen as too technical or abstract to be of use to most people. However, in point of fact, semantics (and especially computational semantics) is going to become increasingly central to the way that people work with information systems of all sorts, and most especially news.
One of the most profound changes that the Internet has introduced is the idea that we are transitioning from communities of place to communities of interest. A community of place is geographical -- your house, your neighborhood, your city, your region, your state or province, your country, your continent, your hemisphere, your world. For most of recorded history, the degree of relevance of any given thing was inversely proportional to the distance away that thing was. Not surprisingly, your allegiances likewise followed the same relationship. The king may have had more overall power, but in most cases the local lord had far more power over you, and in a struggle between your lord and your king, there was seldom any question of where your true loyalty lay.
Newspapers are very much artifacts of this idea of community of place. A paper is typically associated with a city, or in many cases, with a specific community within that city. A newspaper's National section may contain news about the country, but in most cases even that news is cherry picked for those pieces of information that may affect the newspaper's region. The Sports, Business and Lifestyle sections focused on the most proximate sports teams, the doings of the businesses that had a presence in the region, and human interest stories that dealt primarily with the local culture or environment. There are a few exceptions (USA Today comes to mind) but even here its notable that most of their content is still segmented by geography -- the USA Today that you pick up in Seattle will have very different news beyond the front page content than the same issue in Atlanta.
In communities of interest, on the other hand, the basis for the community is a particular theme, topic or cause -- such as the community surrounding a given computer language, sports team or political ideology. Such communities of interest have, of course, been around for some time, but the difficulty in coordinating communication between members of a given community has typically kept the size of such organizations small and its influence limited. With the rise of the Internet, this is changing.

Shaping Yourself

An interesting case in point is an organization such as Major League Baseball's Seattle Mariners. As the name would imply, the Mariners are located in Seattle, and as such its fan base tends to be drawn largely from the Puget Sound -- with one notable exception. Because the team features two very popular Japanese ball players (Ichiro Suzuki and Kenji Johjima) and the first Asian American coach (Don Wakamatsu), the Mariners have a large and vibrant fan base in Japan, despite appearing only once a year for exhibition games. This latter community is one of interest.
The Web has accelerated a shift that has been underway for a while: As it has become easier for people to communicate with one another across different social media, it has also made it easier for people to find others who have similar interests, coordinate activities, share information, and often to buy and sell within interest-based markets, regardless of where on Earth these people may actually live.
Most social media sites are built around the concept of community interest. Facebook , MySpace , LinkedIn and countless others provide a centralized place for a person to project a particular representation of themselves (an avatar) to the rest of the world, while at the same time acting as windows into interest groups of one form or another. Over time, the more a person becomes involved in a particular media space, the more they invest of themselves in that space, and the more that they shape their particular information sphere.
This filtering process was formerly one of the functions that a news editor performed, determining which particular content would be passed to the readers or viewers within that particular community. The editor as generalist is disappearing; instead, they are being replaced by moderators who act primarily to insure that the inbound content from contributors does not stray too radically from the role of the interest group.
It can be argued that even that function is disappearing, as users of many media services are increasingly able to enable or disable particular channels or news providers. This is the filtering mechanism that is core to Twitter , for instance. You can choose to follow people who other people in your interest circle recommend, and you can also choose to "unfollow" people who provide comparatively little value of interest to you personally. The effect of this over time is the development of a filter "envelope" that provides references to content that is most interesting to you, with comparatively little noise (i.e., the signal-to-noise ratio goes up dramatically). While this may have been an unintended side effect of the original architecture, it is surprisingly effectively.
Put another way, such services let you create your own "newspaper" incrementally, without necessarily choosing to explicitly choose given interest groups or categorizations. This process of increasingly transparent categorization is one of the hallmarks of the current age of journalism; the categorization becomes a function of the likes and dislikes of the reader rather than the editor. Add into this the fact that the reader also is able to effectively "vote" on their favorite news provider (where this information is increasingly at the level of a given writer rather than of an entire news organization), and what emerges is a powerful medium for shaping the news in ways appropriate to the user.

Wearing Blinders?

One argument that's been raised about this particular filtering and categorization mechanism is that over time, it tends to lock a person into a narrow view of the world, one where alternate ideas are not presented as often and majority viewpoints become self-reinforcing. There's some validity in that criticism, though it can also be argued that having a human editor in the question provides no guarantee that the content involved will be any more free of bias toward a particular mindset or viewpoint.
Yet consider the counterpoint to this: As such self-filtering becomes the norm, the reader needs to take on more responsibility in seeking out alternate viewpoints. Indeed, this raises the concept of the "responsible information consumer," in which the information profiles that a person sets up (either directly or indirectly) reflect a more thoughtful approach to understanding the world.
The amount of information on the Internet is reaching a point of inconceivability -- the information space is growing faster than any one person, even a voracious reader of this information, could ever take in. It is this fact as much as any that is causing the profession of journalism to collapse -- once you remove the requirement that only "formally recognized" journalists can produce content and only "formally recognized" editors can determine what constitutes news, then the amount of content can grow without limit. Through social media tools like Twitter, through blogs, through other similar media, the editorial function becomes a preferential one -- "this link is interesting to me ... if you have a similar profile to mine, you will likely find the content at the other end of this link interesting too."

Enter Semantics

Most of these filters act at the document level, but current developments in Semantic Web technology are likely to start performing a fair amount of the analysis at the sub-document level. Document enrichment, encoding terms, people, events, places and things within documents through the use of specialized markup, makes it possible to analyze a document and determine what it's "about" even if the document doesn't necessarily use specific terms in that topic.
At a minimum, such semantic analysis makes it easier to create compelling abstracts of articles without human intervention -- a remarkably difficult task for humans to accomplish, let alone computers. Yet in conjunction with specific Semantic Web technologies such as RDF, RDFa, OWL, Sparql and other sometimes cryptic acronyms, this also makes it possible for systems to read through collections of blogs, articles and other Web content and make inferences that may not necessarily be obvious to people.
Such an inference engine opens up both possibilities and raises some disturbing issues. One benefit of such a tool is that it makes it possible to perform better prognostications and forecasts (financial and resource allocation, especially), and be able to better determine when there is questionable activity taking place in business, government or elsewhere. The danger here is in failing to recognize that user-generated content does not necessarily just represent true facts, but also contains opinions, distortions, analyses and biased content.

With the current upheaval in the news, publishing and print industries, journalists are struggling against slim opportunities and poor wages. What is changing most, however, is the vehicle for expression of journalism -- not the very real need for news, analysis, investigative reporting, deep technical knowledge and entertainment. Skilled professionals are destined to make a big comeback.

When questions about the future of journalism come up, there are generally two driving concerns: what happens to the notion of "news" in an era of ubiquitous communications; and how you, as a writer, get paid.
One of the great paradoxes of the information age is that as channels of distribution have proliferated, rates of pay for producing content for those channels have continued to fall. Part of this can be attributed to the collapse of the basic business model for many news publishers that were reliant upon advertising in order to fund their operations. Part of it can be attributed to the growing number of bloggers, who are, at least on the surface, generally publishing their content for free. Part of it can be attributed to the shift from local to global economies, which translates to a larger number of people producing content.
The bad news is that the immediate future is not likely to improve significantly. We're in a transitional era, and in such periods, the specific value of anything -- especially something as intangible as writing -- is extremely ambiguous. The good news is that when things do stabilize, they will definitely stabilize in the writer's favor.

Writing Is a Skill - Blogging Is a Tool

Writing, regardless of whether you're writing a novel, a textbook or a blog, is a skill. It takes a great deal of time to become proficient in that skill, to build up a base of fans, and to reach a stage where you are capable of producing high quality content on a regular sustained basis. It requires gaining an understanding of your audience and a time to find your own voice, and time to establish a network of publishers.
Most people have the basic tools to become writers. In this day and age, all that's required is having a computer and Internet access. However, generally speaking, few are willing to make the investment of time necessary to become proficient as a writer, regardless of the domain. It's worth noting that of the huge number of blogs that are written every month, the vast majority of them are updated perhaps once every two to three months, and most blog sites will be abandoned after no more than five posts.
The reason for this is simple. Writing is a business, like any other -- but unlike most others, it requires that you are constantly inventing, constantly creating new content. This content has to be informative, provocative, or entertaining -- and hitting all three of these is better than getting one or another.
Blogging, whether as news content or something else, is the sizzle -- it is what gets readers interested in your work. It's your calling card. It is, in essence, your own advertising. The more you blog -- and the better the quality of that blog -- the larger the following you develop, but it's highly unlikely that you will get people choosing to pay for your blog.
What that means is that writers should look upon such content as being part of their overall offerings. Many financial analysts use blogs as a way to establish their authority as an expert in the field, then make their money by taking on clients for whom they provide much more customized services. Technical writers regularly publish technical blogs that prove their authority, then translate that advantage into selling their services, or selling books that outline their take on technology in a more cohesive fashion. Fiction writers may develop themes, even publish short stories within their blogs, especially if the short stories are in support of book-length storylines.
Indeed, one of the key points about "do-it-yourself" Web publishing is that ultimately, what you are selling is your expertise in some area -- your worlds, if you are a fiction writer, or your skills in being able to fashion larger, more complex bodies of work. In a lot of cases, you can package that expertise as other products -- webinars, customization of code, training, private newsletters and so forth -- that are sent to your "patrons," your actual customer base.

Five Paths to Cash

One of the keys in all of this is to recognize that you have at least five avenues of monetization as a writer in this day and age:
* Customers. Those people (or organizations) who wish for you to customize your services and offerings for their specific needs;
* Patrons. Those people (or organizations) who want to support your efforts as a way of enhancing their personal reputation;
* Employers. Those people (or organizations) who hire you long term for your skills, including your communication skills;
* Agencies. Those people who wish to sell your works through their imprint or under their banner; and
* Advertisers. Those people who wish to use your reputation to sell their own goods.

You target customers with books, digital videos, software, training materials and so forth. Typically monetization here involves content that you create once then sell repeatedly, though it may involve some customization. As a writer, you should always be looking for potential things to see in what you produce.
Patrons, in general, are people who -- for some reason or another -- are willing to support you financially in your writing efforts, either because they believe in the message that you're trying to articulate or because they want to be seen as being a supporter of your career. This mode of monetization went out of style, in great part because the mechanics of patronage made it something that only the very wealthy could do (and only at a very large scale), but the Internet may change that by letting people become "micro-patrons" (via PayPal donations to sites, for instance, as well as a number of social networks that are coming online soon).
Note also that patrons may be organizations that are interested in some particular cause or focus, and are seeking writers who can clearly articulate their purpose without necessarily hiring them as employees.
Employers often represent the most-desired path to monetization: a guaranteed paycheck, benefits, potential for career growth and so on. Perhaps one of the biggest concerns for writers who have been formal journalists is that, without an employer, their careers are dead. However, it's likely that -- at least for a while -- formal employment may prove increasingly elusive for writers. Many organizations are looking for ways to cut costs; with the exception of dedicated news organizations -- most of which are disintegrating fast -- bringing on full-time writers who do nothing but content development is very low on most organizations' priorities.
This trend is exacerbated by the fact that in a buyers market (which it is, for most companies) one of the major expectations is that anyone who is hired will, in fact, take on any writing and communication responsibilities associated with the position. In the short term, this means that although full-time employment should be viewed as a potential source for monetization, it is not necessarily the most viable.
Longer term, that will change. Recesssions should be seen as periods of adaptation, as people go from one set of expectations to another. Once that equilibrium state is reached, however, you also tend to get a huge amount of innovation and entrepreneurship that tries to take advantage of the new rules. At that point, original content creators will likely be in very high demand as organizations become their own publishers, as new news organizations that have found successful funding models emerge, and as the number of available writers declines. Expect this to be the situation by 2012.
Agencies fall into a somewhat different category from other employers. They aggregate writers (or similar experts) and package them together under the agency's label or banner. In essence, each writer is a consultant or partner within the agency, producing cohesive analysis about the state of an industry, technology, financial sector, government policy or politics.
Obviously, this applies most to writers who specialize in analysis, but that encompasses a broad swath of columnists and journalists working at news organizations today. Note that this concept also covers studios in which writers (in this case fiction writers) work together to produce entertainment content in a given genre or medium.
Finally, advertisers may end up helping to fund a given writer in order to promote their own products. This will likely prove to be a somewhat contentious area, primarily because advertisers may have gone overboard with their efforts in the last couple of decades, to the extent that as a creative individual, you have to determine the balancing point between promoting your own brand and promoting the brand of some other company.
Note that there's nothing preventing these from overlapping -- this is the era of the mashup, after all -- and there may be other venues that may emerge over time. Nor should you think that the existing modes will completely disappear; people will be buying paper-based books, magazines and newspapers for the next century, in all likelihood.
However, expect for those texts to be increasingly printed in micro-lots by all-in-one presses that can go from a PDF proof manuscript to final hardbound and paperback book without ever being touched by human hands. Expect for magazines and newspapers to become anachronisms, used for "historical color," backups or archives, but far less important as vehicles for providing news content.

Embrace the Unknown

In the end, what is changing most is the vehicle for expression of journalism, not the very real need that we still have day to day for news, analysis, investigative reporting, deep technical knowledge and entertainment. The rise of interest communities, replacing geographic ones, places an upper limit on the number of people who can effectively write to the concerns of those communities, and the means for individual writers to increasingly become their own publishers, marketers and promoters gives them considerable more leverage as the economy recovers.
It is likely that as the economy shakes out, the ethics for a new form of journalism will arise, one consistent with the media and ways of thinking of a distributed, networked society. That it doesn't bear that much resemblance to the journalism of yesterday should not be surprising. We're undergoing one of the most radical transformations to society in the last half millennium, and the rules are changing as a consequence.
With change comes opportunities, if you're brave enough to take them.


News matters so much more than what delivers it

By Jeff Jarvis

Portable reading devices were described as offering "a glimmer of hope for the embattled industry" in these pages last week. Having spent the past two months reading two newspapers - the New York Times and the Wall Street Journal - primarily on my Amazon Kindle, I'd say that glimmer is dim.
The problems with the Kindle could be - and no doubt will be - solved. The reader works wonderfully for books. But it also tries to turn a newspaper into a book, starting us on the first page of the first story and nudging us through its awkward user interface to proceed a page-turn at a time through the entire product, as we used to on paper. The digital among us, however, no longer read news in this way. Online, we search and link and flit and explore. We are in control of the experience, not some editor somewhere.
Online, news has been freed from its packaging. Indeed, that is a key architectural underpinning of the web itself: content is separated from presentation. The same text and media can be fed into a web page, or into an iPhone app or an RSS feed. Substance parts company with style. All of which makes me wonder whether we will ever see the iPod moment for newspapers.
News Corp, Hearst and other publishers are reportedly working with manufacturers to develop flat electronic substitutes for their beloved paper. Their assumption is that we are pining for a familiar, nostalgic presentation of content. They hope that when electronic news reminds us of print news - that is, when editors can once more package the world for us - we'll again be loyal to and perhaps pay for their work and brands.
Sorry, but I think the opposite is occurring. We care less about the form of news and more about the information it imparts. That is the key strategic problem for editors and publishers hoping to charge us online: once news is known, it is knowledge that can be spread through conversation, which means it can no longer be controlled behind a pay wall. News is spread in the speed of a tweet. The half-life of a scoop's value is lessened but the value of links grows.
These economics were driven home to me as I read the Journal on my Kindle. Since my days on an expense account, I've subscribed to the Journal online, paying more than $100 a year. For the last two months, I was paying an additional $9.99 a month for it on the Kindle. But in that time, I saw just how few Journal stories I read or needed to read after I'd gone through the New York Times and my RSS and Twitter feeds, which send me to a dozen sources. It's links that most often get me to read articles.
In the emotional frenzy to find a way to make us pay for news again online, the Journal is reportedly mulling the idea of micropayments, in the hope that this will attract a new audience unwilling to subscribe but wanting to get that unique Journal story - folks such as me who come in via links and search. I see unintended consequences ahead. I may end up paying cents for stories instead of dollars for a subscription. Indeed, when the Journal raised its Kindle price to $14.99, I hit my limit. I cancelled.
I will still read news on gadgets, of course. The New York Times has a brilliant iPhone app that is constantly updated and ad-subsidised and free (as I wish the Kindle were). The Times also has a new version of its PC reader that more closely mimics the experience of reading the paper; it's appealing.
But in news, neither the device nor the form matters nearly as much as the information and its timing. This requires that publishers unleash their news on every device possible. But no single gadget will be their saviour. None will bring back the good old days - if they were that - of news and the world delivered in neat little packages we paid for.


Report: Rivals can exploit Kindle shortcomings

Companies are likely to challenge the Amazon Kindle by unveiling cheaper, more versatile e-readers, moving beyond books, and striking better deals with publishers, according to a report released Monday by Forrester Research.
", leveraging its position as a dominant book retailer, has catalyzed the market for eBooks, but that's just the beginning of the eReader revolution," writes Forrester media and technology analyst Sarah Rotman Epps in the report. "Competitors will attack Amazon's market position by launching new features, expanding content beyond books, dominating markets outside the U.S., reducing costs, and improving relationships with publishers."
The eReader market has been hot, notes the report, thanks to consumers who are hungry for portable and convenient media devices. Around 14.9 million U.S. households regularly buy books online. Among that group, 48 percent earn more than $70,000 a year and spend $28 a month on books, half of them online.
Though Amazon's Kindle and Sony's Reader have carved out the biggest chunk of the market--Forrester estimates sales for the two units hit the million-dollar mark for 2008--other companies have entered the fray. Fujitsu has released a color e-reader in Japan, while Samsung plans to unveil a touchscreen e-reader in South Korea this year. In Europe, Irex Technologies makes a versatile line of e-readers with touchscreens and Wi-Fi.
The Kindle's limitations also pave the way for newcomers, says Forrester. The Kindle is geared toward reading books, but other content can work on an e-reader, including textbooks, newspapers, magazines, comics, and even blogs. Much of that will fuel the need for larger screens, color displays, and the ability to highlight text and write notes. Amazon CEO Jeff Bezos has warned not to expect a color Kindle for many years.
Besides color and bigger screens, the competition will try to distinguish itself from the Kindle by offering touchscreens, animation, and eventually video. Forrester expects color displays to be available by the end of 2010, with video following in 2011 or 2012. The Kindle's lack of social networking also is a weakness, says the report, since people who buy books often like to discuss them with others and offer their reviews and recommendations.
Drivers of Growth for eReader Devices and Content

There are other areas where the Kindle faces competition, notes Forrester. Amazon's price tags--$359 for the Kindle 2 and $489 for the Kindle DX--are beyond the budgets of many consumers. Even Sony's e-readers start at $299. With a decent Netbook selling for $300, the report says, e-reader prices will need to come down.
The Kindle is a sales hit in U.S. but lags throughout the rest of the world. Sony and other companies, such as Fujitsu and Irex Technologies, are better positioned to gain from higher worldwide demand for e-readers.
Publishers also have a love/hate relationship with Amazon, says Forrester. They love the Kindle as another profitable way to package their content. But they don't like the way Amazon hoards 70 percent of the profits, leaving publishers with only a 30 percent cut. The report expects other e-reader vendors to slice out better deals with publishers.
Overall, the next five years should see even stronger demand for electronic reading devices, says Forrester, with a large portion of that driven by students once textbooks are more prevalent on the portable format. Global demand, which now adds up to one-third of all e-reader sales, is likely to surge as well.
Research company In-Stat also predicts a soaring e-reader market ahead. As more e-readers are produced, their raw manufacturing costs will drop by 23 percent between 2009 and 2013, according to a new In-Stat report. Technology also will improve, the research firm says: today's e-readers use display technology from E Ink, but the future may see OLED screens to deliver higher-quality readers.


Thursday, September 10, 2009

Monetising media and the future of journalism

Well, it seems to me that Rupert Murdoch hasn’t realised that content is no longer scarce. Content is created in many places and the marginal cost of distributing it is close to zero. According to Universal McCann’s Wave 4 report, social networks are becoming the dominant platform for content creation and content sharing. That said, I do think there is value in professionally produced content that people will be willing to pay for. Kevin Kelly has an excellent piece on eight value generators: immediacy, personalisation, interpretation, authenticity, embodiment, patronage and findability. There is plenty of incentive there to motivate people to part with some money – as long as its not complex or uncertain. There is some work to do on formulating the right mix of subscription and transaction charges.

And the question remains, how much are people willing to pay? Moreover, the same question may well apply to TV (see the Razorfish Digital Outlook Report 2009 chapter TV at a crossroads. After all, advertising revenue is moving from broadcasting to online as well, as well as the fragmentation problem from multiple channels, time shifting and so on.

I came across a video of a US panel session on newspapers & the future of media via Gerd Leonhard, a media futurist. Click on the Gerd link to view the first 10 minutes of the session, or view the full one hour session (or part thereof) on

The event was hosted by the Commonwealth Club of California. All four panellists – from a newspaper, community funded reporting start-up, media aggregation start-up and academia – agreed that the traditional newspaper business model is toast but that journalism will remain a force. I’ve noted a good level of interest about trends in the newspaper sector and the future of journalism more generally. The panellists have an excellent knowledge of the media and cover some interesting emerging and potential developments. Can I recommend the full program to those of you with such an interest.

The newspaper representative said that the old newspaper model of 80% revenue from advertising and 20% from circulation is certainly dead. But he seems to think that print will be around for a while yet. Other interesting comments made by panellists were that:

* people still want content - people feel more connected to the community through access to content - it is the packaging that is changing
* there are likely to be different models to suit different audiences
* professional journalists can collaborate with citizen journalists, adding value in the process
* other forms of professional content, citizen journalism and consumer interaction are likely to focus on personalising media aggregation and sharing.

The community funded content outfit is Spot Us, an online “market place where independent reporters, community members & news organisations can come together & collaborate”. Kachingle is the start-up exploring new ways to monetise content on the basis of personal selection/preference aggregation.

The Future of Newspapers: A Conversation

Alex Jones, Laurence M. Lombard Lecturer in the Press and Public Policy and Director of the Shorenstein Center, Harvard University
John Carroll, Former Editor, Los Angeles Times


The recent and ongoing contraction in the newspaper industry and the emergence of the Internet as a venue for real-time news suggest that preserving newspapers will become less effective as a strategy for capturing and preserving the news record as time goes on.

Some of the observations made were:

* More versioning, but less reporting. The prevailing newspaper business model has been shattered by the Internet, with the sharp decline of newspaper classified advertising revenue. Yet the digital media outlets that are purported to be replacing newspapers tend not to “put reporters on the street” or support sustained investigative reporting of the kind that broke stories like Watergate, Whitewater, and others in the past. Original news gathering and investigative reporting are expensive, and newspaper organizations have been scaling back their investment in same, while new media, such as blogs, feeds, and news Web sites, largely draw on the traditional news media sources. As a result, while there are more sources from which people, particularly young people, get their news, the amount of substantive news coverage has been decreasing.
* Pressures on bottom-line performance. Newspapers, and news people, are themselves committed to a “public service” mission, of promoting an informed citizenry, but today are finding it difficult to reconcile that mission with the relentless pressure from owners to make money. This pressure is particularly intense at newspapers owned by stockholders. Online ad revenue alone is not yet adequate to sustain a paper, but because most expect Web content to be free, it will be difficult to succeed with a business model under which readers must pay for content.
* Declining consumption. Newspapers are also facing the reality that few people are interested in serious news and even fewer are willing to wade through lengthy text and analysis. Demand for instantaneous news outweighs the demand for authoritative reporting, and the former demand is largely met by cable and the Web.
* Investigative reporting is still alive, albeit on a limited basis, at non-profit centers like the investigative journalism nonprofit, ProPublica, based at the University of California at Berkeley, or supported by grants from foundations like the Fund for Investigative Journalism. On another independent news site, Josh Marshall’s Talking Points Memo, “ . . . even if he doesn’t report it—and he often does—he also keeps big media on the story, and it’s a great new pressure.”

A newspaper business model that's working

We make community news free and have watched profits soar.

By Dan McDonough Jr. and Alan Bauer

It's widely reported – and has become generally accepted – that the newspaper model is either dying or already dead, when, in fact, thousands of newspapers across the country are doing quite well. Thousands of newspapers deliver for their readers and advertisers every day. Thousands of newspapers are positioned to embrace – not be destroyed by – emerging technology.
But we don't get to read much about those newspapers. Sure it's news when giant corporations crash and burn and lives are disrupted. Stories that report on incompetent leaders who, ironically, receive outlandish compensation are widely read. Documenting the downfall of powerful entities, whether they are governments or businesses, is a legitimate pursuit. But, as any respectable journalist knows, when you tell only half the story, the story is incomplete – or just plain wrong.
In this instance, the half that receives little to no attention from big media involves the men and women in the newspaper industry who write the stories, sell the ads, print and deliver the papers and update the websites every day, without fail, for media companies that are far from dead.
The National Newspaper Association (NNA) last month reported on a study that showed community newspapers were far less affected by the challenging economy than the industry in general (or the economy in general, for that matter). The Suburban Newspapers of America and NNA's reporting group showed 2008 fourth-quarter advertising revenue of $428.7 million, only a 6.6 percent decline from the same quarter in 2007. The Glennco Consulting Group estimate was much worse, however, for the overall newspaper industry. There it showed decline in fourth-quarter advertising expenditures of 21 percent, according to the NNA.
So while advertisers cut their spending by 21 percent across the industry, the impact to community newspapers was less than 7 percent.
In addition, 26 percent of the SNA/NNA reporting group launched new products in 2008. Indeed, many community newspaper companies are growing.
The fact is that gains among progressive community newspaper companies are offsetting a large part of the massive losses being suffered by the staid, big newspaper companies.
"Community newspapers certainly are not immune to the economic downturn that is affecting all businesses, but, as the primary and sometimes sole provider of local news in a community, they remain strong and viable," NNA president John Stevenson said in the article.
These "strong and viable" companies recognized and adapted to the changing economy in a way that larger newspapers – for the most part – are not. They adapted to evolving reader habits and emerging business models. They abandoned the traditional, head-in-the-sand mentality of denial and exploited the opportunities presented by their often larger, but undeniably obsolete, brethren.
At Elauwit Media, we learned long ago that people don't want to "pay" for their news anymore.
We know that, for advertising to be effective, people have to actually see the ads. Our business model and philosophy of making sure "Everybody Gets It. Everybody Reads It." pushes us to bring local news not found elsewhere to everybody who has an address in town. It fills a very specific need for our readers and it works so well that, for the past two years, we have been listed among South Jersey's 10 fastest-growing privately held companies. We've gone from a start-up in 2004 with $100,000 in revenue to a thriving company with revenues in excess of $2.4 million in 2008.
That's certainly not the story we're hearing about newspaper companies today. But that's the story of so many of us smaller newspaper companies that have adapted to the changes in the market.
This success is no great mystery – it's the American way. Ingenuity, creativity, and the entrepreneurial spirit always have been rewarded. The newspaper companies that have altered circulation methods and policies, have focused their content and developed news delivery methods to fit today's audience and advertisers are thriving. They found new streams of revenue and ways to reduce costs that didn't eviscerate their core products.
In other words, they ran their businesses the way businesses ought to be run. For instance, huge regional daily newspapers would do better to stop requiring people to subscribe and instead deliver the paper to everybody in their target demographic (the market that key advertisers want to reach). If big newspapers would charge the advertisers, not the readers, they could still turn things around. That would be a bold way to evolve. It is highly doubtful they'll do that. We did.
So as the giant media conglomerates continue to watch their kingdoms crumble, and the self-styled scribes of truth chronicle their every misstep and blunder, the rest of us will continue to vacuum up their former readers and advertisers. We'll continue to grow. We'll continue to adapt. We'll continue to profit. And we'll do it all while upholding the standards of journalism that make newspapers so important. And therein lies the future of newspapers – one that's not so gloomy for everyone.


Power of Print Conference: redefining newspaper format

For two of the speakers at the Power of Print Conference in Barcelona, completely new approaches - and publications - were the required missing element of the newspaper industry. Peter Vandevanter, vice president of Targeted Products spoke about his company's personalised newspapers - for which he has coined the term 'Individuated'.
Readers receive home delivery of their 'Individuated' newspaper on the days they're free to read it, and personalised 'I-News' delivered digitally on the days they're not. 'I-News' is also available in a printable format for readers that choose to print it, alongside coupons for coffee or other products they ask for - an advertiser's dream! Vandevanter said that advertising rates for the I-product are ten times print advertising rates.
Martim Avillez Figueiredo, publisher and editor in chief of new Portugese publication I described how it "deconstructs the newspaper and rebuilds something different." He explained that "the idea is not to build a new daily paper but to try to build a new media brand."
I differs from traditional newspapers in a variety of ways, most noticeably its layout. Steering away from separating the publication into sections such as politics, sports and economy, I is instead divided into sections that follow people's reading patterns. It opens with editorial and opinion in the first section, small news summaries in the second, in-depth articles for the third and a 'mélange' of news including sport for the fourth.
Both methods are new takes on a printed newspaper, and contradict declarations of the "death of the newspaper", which Gavin O'Reilly, president of the World Association of Newspapers and CEO of Independent News and Media described as "misleading" in the conference's opening speech. Whilst these two new projects cannot single-handedly turn the industry around, they are representative of the kind of innovation that it requires to move forward.

Source: World Association of Newspapers Press Release

Power of Print Conference: innovating to boost circulation and profits

With newspapers working out how to simultaneously appeal to their readers, monetise their content and be successful businesses, some publications are taking unusual steps to do so. Speaking at the World Association of Newspapers' Power of Print Conference in Barcelona, Kylie Davis of the Sydney Morning Herald and Sun-Herald, and Rodrigo Fino of Garcia Media described what steps their publications have taken.
Davis discussed the "sacrosanct" relationship between editorial and advertising, and how the Morning Herald and Sun Herald have toed the line between the two and come up with a profitable solution. They create high quality specialised magazines of 'advertorials', bundled with the newspaper but clearly separated from the main editorial.
The content of the magazines is written by news staff to strict standards, on a brief provided by the advertiser. ""We're not selling content, we're selling context," explained Davis. She said that the specialised publications have brought the newspaper company close to $5 million AU (€2.54 million) of new revenue in under 12 months.
Meanwhile, Venezuelan newspaper El Informador has increased its circulation by 14% this year. Fino, president of owner Garcia Media, described how this was largely to do with the papers redesign to focus on hyperlocal news, using the front pages to encourage comments and interaction from readers. "As a regional newspaper, we needed to fit in closely with readers, which means calling on important people in the region to give information on their specialties," he explained.

Source: World Association of Newspapers

Europe's newspaper industry must transform itself

Senior newspaper executives from around the world are meeting in Barcelona this week to discuss the future of print media. Experts agree that high quality and multimedia elements will ensure the newspaper's survival.

The Internet age has revolutionized the way people interact with media. But it has also sparked the demise of the printed newspaper.
In the United States, a number of regional papers have folded in the past two years. Others, such as the renowned Christian Science Monitor, have resorted to a weekly print issue and are otherwise "only" available online.
In Europe, however, newspaper publishers are looking for a more integrated approach, said Angela Mills Wade, executive director of the European Publishers' Council.
"We are in the most amazing state of transition from print to online right now," Wade said. "The challenge is to make sure that the interest in the content we're producing, no matter how it's distributed, is sufficient to continue financing that content." She said this could also involve paying for online content.
Wade said she did not believe that newspapers would die off in Europe, as is the case in the US.
"I think the difference between the US and Europe is that there's a more deep-seated cultural tradition in newspapers here and I think it would be harder to brush that away," Wade said.
Hans Joachim Fuhrmann, spokesman for the Federation of German Newspaper Publishers BDZV, agreed.
"The newspaper-reading culture here is completely different than in the US," Fuhrmann said. "We also have a much stronger regional concentration."
Volker Wolff, a professor at the University of Mainz's Journalism Seminar, said he thinks change will come.
"Of course, newspapers are going to die off here in Germany, too," Wolff said.

Change is necessary

Industry experts agree, though, that things have to change in the newspaper sector.
"Here in Germany, but also all over the western world, we are in a transformation process regarding the classical printed newspaper," Fuhrmann said. "Newspapers have to transform themselves into multimedia companies."
According to Wolff, newspapers should not try to compete directly with online content.
"Newspapers can't write the same things you find on the Internet," Wolff said. "They have to concentrate on regional information and also on background stories. The future of newspapers lies in qualitative valuable stories, like those magazines previously covered."
But this will have a corresponding price tag.
"For those which survive, it's going to be expensive," Wolff said. High-quality newspapers will cost more.

Question of the right solutions

Though newspapers are suffering, Wade said one shouldn't underestimate the amount of newspapers read.
According to figures by the World Association of Newspapers (WAN), print newspapers attract more than 1.7 billion readers a day worldwide.
"Gavin O'Reilly, WAN's chairman, once said that more adults read a newspaper every day than eat a Big Mac every year," Wade said. "So though there may be a long term decline in percentage terms in newspaper consumption, there are nevertheless a growing number of people who have an appetite for reading news, comment and debate from trusted brands, from fact-based journalism."
WAN is convinced that dailies have a future.
"Print continues to be the main revenue generator for newspapers and it will continue to be for a long time," WAN spokesman Larry Kilman told news agency AFP. He said WAN believed that solutions existed to enable media companies to combine the paper and screen to be profitable.
A WAN conference on the power of print media vis-a-vis the Internet, especially at this time of economic crisis, is currently on in Barcelona until Thursday.

A new generation of newspaper readers

The integration of online elements and interactive features can attract younger readers, in particular, to a newspaper's site.
"The illness of non-reading has hit Germany just as much as other countries," Wolff said. This was particularly the case with the younger generation.
"In India, newspapers are a status symbol: if you can read, you have a newspaper," Wolff said. "Here in old Europe it's the same problem everywhere: an aging population, non-reading youth, a drop in advertising sales, dwindling markets."
But the German government is trying to get more people interested in newspapers and last year launched a national initiative for print media. It aims to increase public awareness of the importance of print media as a key political medium and is particularly geared towards promoting media competency among young readers.
Federal Government Commissioner for Culture and the Media, Bernd Neumann, said, despite the enormous growth of electronic media, newspapers and magazines are still the key political media in German society.
"Whoever wants to get a reliable and multi-sided picture of fundamental political and societal issues remains dependent on the printed word," Neumann said at the initiative's annual meeting earlier this month.
According to Neumann, the printed word in particular encouraged democratic cohesion.
"As opposed to the Internet, it directs awareness to that which is important to everyone – independent of whether it is of personal interest for an individual or not," Neumann said.
But, he said that print and online media don't have to exclude each other, but rather be complementary.
"Whoever reads newspapers and magazines acquires the possibility to deal critically with Internet offers and profit more consciously from information sources," Neumann said.
Children and teenagers should, therefore, learn to differentiate between media, whether digital or classic, he said.


Personalised content: the way forward for the news industry?

Mine magazine represents a further effort in the on-demand initiative to diversify the print industry. The Time Inc. publication professes to deliver a fortnightly magazine personalised to the subscriber's interests. Mine's content is an assortment of articles from a selection of Time's Inc.'s publications, of which the reader must chose five titles. Upon subscription the reader is asked four questions of personal choice to further gauge their tastes.
Its editors aim to provide a printed alternative to the wealth of online information that users habitually sift through to find pieces appealing directly to their own interests. It was also perhaps inspired by online services offering catered-to-taste provision of information and entertainment, such as the DailyME.
Mine magazine is currently in the experimental stages, and experiencing inevitable teething problems of timing and distribution. But the possibilities for future success along this format are there. According to Slate writer and recipient of the magazine, Farhad Manjoo:
"Mine offers a model for a smoother transition from print to digital. It gives readers much of what we like about the Web but in a package that--until a color Kindle comes along--is much more practical. Even though I've been cutting down on the number of magazines I get at home, I'd sign up for Mine, and I bet others would as well. The model will also attract advertisers, too: The same information that the magazine uses to pick out my articles can also be used to target advertising, which means the mag can charge much higher ad rates."
If personalisation is a prospect for the magazine and online media publications, could this concept be applied to the printed newspaper industry? Online versions of many US newspapers currently participate in the service provided by DailyMe, which uses licensed stories coming in from 500 different titles and wires. Moreover, DailyMe began negotiations in February with news publishers about licensing its technology so that they will be able to offer similar personalised services on their own news pages. It may be that printed versions of papers should await the outcome of the glossy experiment before launching their own ventures, whereas their online counterparts could grasp this opportunity more immediately.

Source: Slate