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August 15 2012

20:28

The newsonomics of breakthrough digital TV, from Aereo to Dyle and MundoFox to Google Fiber

In 1998, when Rupert Murdoch’s News Corp. bought the Los Angeles Dodgers, the storied franchise was worth $380 million. News Corp. sold the team in 2003 for $430 million. After winning the ability to negotiate a new multi-billion sports TV contract this fall, they sold earlier this year for $2 billion, blowing the lid off sports property values.

In 1994, the San Diego Padres were worth $80 million. After recently signing a 20-year deal with Fox Sports for $1.2 billion, they sold (pending league approval) for $800 million.

Meanwhile, in 2000, the Los Angeles Times was worth at least $1.5 billion when it was sold as part of Times Mirror to Tribune Company. Today, as it is newly readied for market out of the Tribune bankruptcy, it would go for something less than $250 million. The San Diego Union-Tribune, once valued near a billion dollars, sold for about $35 million in 2009 and about $110 million in 2011.

It’s a reversal of fortune: Newspaper franchises that once outvalued baseball teams by 3-1 or 5-1 or 10-1 now see the inverse of that ratio. Why?

Two letters: TV.

Those numbers tell us a lot about the continuing power of television, in worth, in value creation, and in the news business itself. If we look just at recent events in the ongoing transformation of broadcast and cable to digital, we now see multiple breakthroughs on their path to digital. They give us indications of what the news business, video and text, will look like in the coming years. While we can argue endlessly about the relative virtues and vices of print and TV news, we must acknowledge the relative ascendance of TV and think about what that means for the news business overall.

TV’s revenues are holding up far better than newspaper companies’, and TV is better positioned to survive the great digital disruption.

TV has continued to have great audience. Nearly three in four Americans tune in to local TV news at least weekly, surpassing newspaper penetration, even as Pew Research points out they mainly do it for three topics: breaking news, weather, and traffic. Further, it retains great ad strength — 42 percent of national ad spending, matching the actual number of minutes Americans spend with the medium and making it the only medium still ahead of digital spending as digital has surpassed print (newspapers + magazines this year, both in the U.S. and globally). Yes, TV remains a gorilla. While Netflix won headlines when it announced it had streamed one billion hours of TV and movies in a single month, that huge number compared to about 43 billion hours of U.S. TV consumption, according to Nielsen’s 4Q 2011 Cross-Platform report.

In a nutshell, that’s the difference between TV and video, circa 2012. Video is the next wave — incorporating TV perhaps, but still the very young kid on the block.

Today, TV is no longer a box. Sure, even with all the Rokus, Boxees, and Apple TVs, it seems like TV isn’t yet an out-of-the-box experience. But with Hulu, Netflix, and Comcast’s Xfinity, it’s emerging quickly, escaping our fixed idea of what it once was — the boob tube in the living room. If it’s not just a box anymore, it’s a platform. From that platform, we see both the disruptors and the incumbents doubling down their bets. As in most things digital, few of these launches will be huge winners — but some will drive big breakthroughs. Some of the iconic legacy companies we’ve long known will be absorbed in the woodwork as new brands supplant them. Consider the spate of recent innovation, as we quickly assess the newsonomics going forward:

  • NBC, bashed up and down Twitter, nonetheless proved out a new business model with its multi-platform approach to Olympics coverage. Whatever you think of the tape delays or the suspended reality of Bob Costas’ gaze, NBC made the economics work, surprising itself and others. Its live streaming has ratified the development of cable- and satellite-authenticated, all-access digital delivery. That reinforces cable/satellite value. Further, it whetted prime-time viewing appetites, boosting ratings and earning NBC more ad revenue than it had projected. That’s icing on the cake for NBC, which, under Comcast ownership, has rocketed forward in digital strategy. The network has made a number of moves to transform itself into a global, video-forward, digital news company, joining the Digital Dozen global news pack. Recently, it bought out Microsoft’s share of msnbc.com, a leading Internet news portal. It immediately rechristened it NBCNews.com. In short order, it appointed Patricia Fili-Krushel as the new head of NBCUniversal News Group, an entity made up of NBC News, CNBC, MSNBC, and the Weather Channel. A former president of ABC, with 10 years of experience at Time Warner, she heads a growing news operation. Earlier this year, NBC combined its sports properties into a unified NBC Sports Group, merging NBC’s broadcast sports unit and Comcast’s regional sports networks. NBC is growing out of its digital adolescence. (See “One year after she was hired, Vivian Schiller’s ‘wild ride’ at NBC is just beginning.”)
  • Aereo, the TV startup funded by media magnate Barry Diller, is expanding its footprint from its current New York City base, and starting to offer multiple promotional deals. Diller’s in-your-face challenge to over-the-air broadcasters (CBS, NBC, Fox, ABC, CW, PBS) takes their signals and delivers that programming via the Internet. It charges consumers $12 a month, or as little as a dollar a day. They can then watch those TV stations on up to five devices; in addition, they can deliver these signals to a TV via Apple TV or Roku. Aereo also offers DVR capability, with 40 hours of storage. It’s classic disruption, with Aereo upping the pressure on the cable bundle and messing with the “retrans” fees that broadcasters get from cable companies to run their programming. Is it really legal, as a court recently found? It may be as legal as Google presenting snippets from every publisher and directory provider.
  • Local broadcasters — representing a broad swath of ownership groups organized in a newer company called Pearl — are bringing local TV to our mobile devices themselves. Just a week ago, Metro PCS started selling a Samsung Galaxy S phone with a TV receiver chip in 12 markets. That’s just the first push of Mobile Content Ventures, a collection of Pearl, NBC, Fox, and others. Expect mobile TV, marketed as Dyle, to be available for other phones and tablets, either with built-in chips or after-market accessories — although price points are an issue, with $100-plus premiums likely over the next year. So what does this innovation mean? Simply, that broadcasters are going direct to mobile consumers — no Internet needed, no data charges applying, and maybe providing more consistent video connectivity — with live programming; whatever is on TV at that moment is also on your phone or tablet. Broadcasters just use part of their digital signal to, uh, broadcast to us on our phones. It’s that antenna, and its cost, that’s the issue. Business questions abound. Given the timing of the launch, Dyle seems like an aspiring Aereo killer, and certainly broadcasters would like to see it do that, if further court action doesn’t. More deeply, though, broadcasters want to maintain their direct-to-consumer brand identity as they do a balancing act and try to keep those retrans fees from cable and satellite companies. They don’t want to be left out of the digital party.
  • Social TV pulls up a chair. First it was startup Second Screen, matching tablet ads to real-time TV viewing. Now ConnecTV, partnered with Pearl, is trying to corner the activity as it takes off. Its promise: “synchronization of local news, weather, sports, and entertainment programming along with social polls.” Ah, synchronicity, a Holy Grail of our digital aspirations. Last week, Cory Bergman (a man of at least three full-time digital lives, with MSNBC, Next Door Media, and Lost Remote) sold his Last Remote social-TV site to Mediabistro.
  • Then there’s the disruptor of everything on planet Earth, Google. The company recently announced it is putting another $200 million into YouTube Channels, building on its initial $150 million investment. The move emphasizes how quickly YouTube is growing beyond its homegrown, user-generated roots. Now partnering with dozens of prime video producers, creating more than 100 new channels, it is trying to establish itself in viewers’ lives as a go-to video aggregation source. Major video producers are still wary of Google getting between them and their customers, both ad and viewer, but many others are signed on. Meanwhile, in Kansas City, Google Fiber TV (TV that’s healthier for you?) launches. It’s a rocket shot at the cable, telco, and satellite incumbents. It’s also a demonstration project: providing more, cheaper. The more: interactive search for TV that combs your DVR and third-party services such as Netflix. (Yes, The Singularity ["The newsonomics of Google ad singularity"] marches on.) Google Fiber TV combines DVR and third-party (Netflix-plus) search. Its DVR holds 500 hours of storage of shows in 1080p and the ability to record eight TV shows simultaneously. Bandwidthpalooza. Google’s goal: Toss a hand grenade among the TV-as-usual business models, and pick up some of the pieces, adding new significant revenue lines.
  • CNN moves to break out of its identity funk, figuring out what that powerful global brand means in this fast-changing digital news world. CNN President Jim Walton recently stepped down, clearly acknowledging that his 10-year run had reached an end. “CNN needs new thinking,” he said in a farewell note. On TV, CNN has been beaten up badly both both Fox News and MSNBC. In 2Q, CNN showed its worst numbers in 20 years, down 35 percent year-over-year. On the web, it’a a top-three news player. But overall, it’s become the Rodney Dangerfield of news entities, getting little respect. Its cable fees — the strength of its revenues — could be challenged by low ratings. Going forward and competing against other global news brands — many of which are transitioning their own businesses to gain far greater digital reader revenue — it is, at this moment, caught betwixt and between. How it brings together a single — and global — digital/TV identity is at the core of its continuing journalistic importance and financial performance.

That’s a short list. We could easily add HuffPo’s streaming initiative and The Wall Street Journal’s wider video embrace. Or Les Moonves’ digital moves at CBS. And Fox’s new MundoFox, Spanish-language TV network, taking on Telemundo and Impremedia. The new network, at birth, offers a strong digital component, working at launch with advertisers along those lines. Let’s note some quick takeaways here, all of which we’ll be talking about in 2013:

  • Note how much you see the names News Corp. and Fox here. While segregating its text assets (and liabilities), News Corp. is investing greatly in the video future.
  • Cable bundling’s longevity is uncertain. There’s a lot of residual power here, but we know how quickly that can fade in legacy media. Yes, the unbundling of cable and satellite has been overestimated by some, as Peter Kafka pointed out recently. Yet, these multiple digital strategies may still push a tipping point. Clearly, legacy TV media, despite their public protestations, sees that potential and is acting in multiple ways to prepare for it.
  • Though broadcasters are making major digital pushes, they start from a lowly digital position. Many broadcasters can count no more than 5 percent of their total revenues coming from digital. That compares to 15-20 percent or more for newspaper companies. While there are other sources of revenue have been more stable than those of newspapers, they need to grow digital revenues quickly to make up for inevitable erosion of older money streams.
  • TV ≠ newspapers. Much of broadcasters’ revenues are made on non-news programming, as much as one-half to two-thirds for most local broadcasters. While learning from TV experience here is useful, given lots of differences, the learnings must be smartly applied. As news consumers and advertisers move increasingly digital, though, that thick line that separate local TV from local newspapers thins by the day.

The all-access, news-anywhere, entertainment-everywhere era has created a new massive business competition. Which brands will be top of mind? Who will consumers pay? How valuable is news itself in this contest?

Comcast, Time Warner, Verizon, AT&T — pipes companies — are in one corner. CNN, NBC, CBS, ABC, Fox, HBO, Showtime, and other known-to-consumer brands in another. Aggregators like Netflix and Hulu over there. Media marketers like Amazon and Apple holding court. Google. The local broadcasters fighting for their place in this digital ring. This new battle of brands, in and around “TV,” is now joined.

December 20 2011

16:36

Daily Must Reads, Dec. 20, 2011

The best stories across the web on media and technology, curated by Nathan Gibbs


1. Man sentenced to one year in federal prison for uploading X-Men movie (Deadline)

2. New York Times Co. negotiating to sell regional newspapers (Media Decoder)

3. Should computer science be required in K-12? (MindShift)

4. E-books as a digital news business strategy (Nieman Reports)

5. Winners and losers from the death of AT&T's T-Mobile deal (paidContent)




Subscribe to our daily Must Reads email newsletter and get the links in your in-box every weekday!



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March 25 2011

17:30

Mediatwits #2: AT&T Buys T-Mobile; 'Tweets from Tahrir' Authors

Welcome to the second episode of "The Mediatwits," the new revamped longer form weekly audio podcast from MediaShift. The co-hosts are MediaShift's Mark Glaser along with PaidContent founder Rafat Ali. This week's show looks at the repercussions of the $39 billion buyout of T-Mobile USA by AT&T. Rafat has had both services and will stick by AT&T, but Mark is making the move from AT&T to Verizon. Plus, Nadia Idle and Alex Nunns, the authors of the book Tweets from Tahrir, were special guests on the show, explaining how they got their book to print so fast. Finally, MediaShift poll results showed that nearly 90% of respondents would not pay for NYTimes.com content at the current high prices.

mediatwits2.mp3

Subscribe to the podcast here

Follow @TheMediatwits on Twitter here

Intro and outro music by 3 Feet Up; mid-podcast music by Autumn Eyes via Mevio's Music Alley. "iPhone Blues" by The Temps.

Here are some highlighted topics from the show:

AT&T buys T-Mobile

2:20: Mark sings the "iPhone Blues"

3:40: Rafat compares T-Mobile in L.A. to AT&T in NYC

5:50: Media companies will lose a big cell phone advertiser

7:20: Google makes deal to supply Sprint with Google Voice

10:20: Rafat will stick with AT&T

"Tweets from Tahrir"

Nadia Idle.jpg

13:10: Nadia Idle talks about her trip to Tahrir Square

17:45: Alex Nunns says they got permission from all tweeters to use their tweets in book

21:15: What's up with the @HosniMubarak feed?

24:30: Nadia will return to Egypt in May with books in hand

26:00: Mark and Rafat discuss print-on-demand aspect of the book

NYTimes.com pay wall

29:50: NY Times execs pooh-pooh people hacking the wall

33:50: MediaShift poll results on people paying for access to NYTimes.com

35:45: Rafat happy that companies are trying revenue models

More Reading

What does AT&T's T-Mobile merger mean to you? at News.com

Lawmaker: Make Net Neutrality A Condition Of AT&T/T-Mobile Merger at MediaPost

AT&T's Pitch for Free Mobile at WSJ

"Tweets from Tahrir" book from ORBooks.com

'Tweets From Tahrir' Collects Egypt Posts in a Book at NY Times Media Decoder

New York Times Paywall Breached With Four Lines of Code at PC Mag

A Note to Our Readers on the Times Pay Model and the Economics of Reporting at NY Times

Be sure to vote in the MediaShift poll about the AT&T/T-Mobile buyout:




AT&T + T-Mobile = _________?online survey

Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian. You can follow him on Twitter @mediatwit.

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January 14 2011

23:13

4 Minute Roundup: All Hail the Verizon iPhone!

The iPhone is coming, the iPhone is coming, the iPhone is coming... to Verizon. After an endless string of complaints from users about dropped calls on the AT&T iPhone, Verizon finally is offering relief with its own iPhone, due out next month. The downsides of the new Verizon iPhone include that it's on the CDMA network, and not a new 4G network, and doesn't do global voice roaming. I talked with CNET's Nicole Lee about the pluses and minuses of the new Verizon iPhone.

Check it out!

4mrbareaudio11411.mp3

>>> Subscribe to 4MR <<<

>>> Subscribe to 4MR via iTunes <<<

Background music is "The iPhone Blues," an adaptation by Mark Glaser of "Phone Booth" by the Robert Cray Band. Performed by The Temps.

Here are some links to related sites and stories for the podcast:

Consumer Reports offers scathing critique on Verizon iPhone 4 at Consumer Reports

With Verizon's iPhone, a rare example of customers getting what they crave at the Washington Post

Verizon iPhone is 'Ultimate Threat' to Android, Report Says at PC Mag

Is Verizon IPhone Too Late For Apple? at MediaPost

A Few Points to Think About Before You Grab a Verizon iPhone at Huffington Post

Amazon Says No Plans to Carry Verizon iPhone at PC Mag

The Verizon iPhone 4: Promising, but likely to be short-lived at Consumer Reports blog

Also, be sure to vote in our poll about the Verizon iPhone:




What do you think about the iPhone on Verizon?survey software

Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian. You can follow him on Twitter @mediatwit.

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August 10 2010

18:00

To click or not to click: Could tiered data plans water down advertising possibilities for news publishers?

In the good old days (of three months ago) you could surf the web on your iPhone with abandon. Do I want to watch this video? Sure! Do I want to download this huge attachment? Why not? Data plans were unlimited; there was no need to think twice, at least not about cost. And that offered news organizations hope, especially when the iPad came along. Maybe slick smart phones and tablet devices would usher in a new advertising revenue stream more akin to print advertising rates than the standard, abysmal web rates.

But now AT&T has nixed the all-you-can-eat data plans for users of the new iPhone 4 and the iPad. (Some lucky folks have been grandfathered in.) And rumor has it that Verizon will soon follow suit with their smartphone plans. It sounds like the Internet’s trajectory from dial-up pay-by-the-minute plans to unlimited — only in reverse. I can picture my mother now: It’s 1995 and she’s waiving the AOL bill frantically, exasperated. What are you spending all this time online doing? Back then, the Internet was like the worst big box store you can imagine: get in, get what you need, and get out. Quickly. When the billing structure for Internet usage went unlimited, Internet use exploded in our house — and everywhere. It’s a version of Chris Anderson’s “mental transaction costs” — even “very cheap” forces a thought process that “free” does not.

So what happens when we move back to a world where data is scarce? Will we act like I did in the days of my 300-minute cell phone plan? (Wherearewemeeting? OKbye!) With consumers facing an extra $15 per extra 200 MB used (depending on your plan), will news sites — particularly those heavy on video — suffer from user indecision? This New York Times video on New Orleans bounce weighs in at 32.9 MB; our latest video is 216 MB. Mobile versions are smaller when available, but even then, a few videos can send users of the cheapest iPhone plan down the toll road. (AT&T estimates that someone on that plan could watch only 20 minutes of streaming video a month before hitting the cap.)

I spoke with Jeff Whatcott, senior vice president of marketing for the online video platform Brightcove, which provides the video back end for lots of news sites. He said that while the shift may cause some changes in user behavior at the margins, he doesn’t predict a shift away from mobile video. If anything, he says, Brightcove has seen the opposite: The iPad has triggered immense interest among advertisers, who want to get rich media like video ready for mobile.

Whatcott suspects that AT&T wouldn’t set prices in such a way that they’d “kill the golden goose.” If users started seeing their monthly bill skyrocket, they might abandon their devices. But going over, say, ten bucks a month? Abandonment seems less likely. “The people that are buying [mobile devices] have disposable income and unless the cost of these new data plans are just exorbitant, where people are getting bills for hundreds or thousands of dollars, I think the costs are going to be in that reasonable range.” No one likes paying the cable bill, he points out, but most of us do anyway.

But what about just the threat of a higher bill? Could fear water down use? Whatcott says he can imagine that sentiment, it being somewhat like using a costly international data plan, which he does traveling. “I think it’s a real world concern,” he says, “but it hasn’t been an acute thing that has bubbled up to us as a crisis.”

I also reached out to Adobe, which helped Wired build its successful iPad app, which weighs in at a whopping 500 MB. Dave Dickson, product marketing manager for digital publishing at Adobe, said he didn’t think the move away from unlimited data would have a big impact on apps like Wired’s. AT&T already limits the downloading of large (over 20 MB) apps to wifi or desktop connections only, and downloading an entire magazine issue at once eliminates the slow dribble of data that its web equivalent would involve.

Indeed, a shift to wifi is a common prediction for how consumers would react to capped data plans. AT&T has in the past pushed iPhone owners to shift to wifi whenever possible.

Still, smartphones are designed to be mobile devices, and it’s not realistic to expect users to have wifi available anywhere they’d like to consume content. “Should smartphones emerge as the device class of choice,” Dickson emailed, “publishers may need to tailor their content package to the capabilities of the device (for example, streaming video instead of embedding it) so that users can more easily download and view content applications under bandwidth-restricted conditions.”

Mobile Marketer Daily explored this topic when the new data plans were announced, and analysts for the mobile ad industry agreed that the new structure is unlikely to reverse a trend toward an explosion in mobile devices. “I don’t think this move by AT&T will slow the adoption of smartphones and connected devices like the iPad, as enough consumers have experienced first-hand the benefits of how these devices enrich their daily life,” Paul Kultgen, director of mobile media and advertising at Nielsen Online, Chicago told Mobile Marketer Daily.

In any event, we’ll find out in the coming months whether there’s any real impact for mobile video. If you’re on a newly tiered plan and watching your KBs the way you once watched your minutes, has it affected how you surf the web?

July 08 2010

14:00

The newsonomics of replacing Larry King

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

I know. You say, who could ever replace Larry King? But I remind you that Larry’s six ex-wives have already confronted that question.

Most of the speculation about a replacement has focused on a range of usual suspects, personalities from Katie Couric to Ryan Seacrest to Joy Behar to Piers Morgan — all around the question of who will be able to command a better audience than King, whose ratings have seen a steady decline. Indeed, his successor, who will take over the show in November, will probably come from that list, a month after the network plucked Eliot Spitzer and Kathleen Parker to fill Campbell Brown’s spot.

Yet the changing economics of CNN’s basic business model prompt lots of questions about ways CNN could go — as well as offering print- and broadcast-based news companies some pointers on their own business model development.

Let’s recall that CNN is a tale of two modern stories. Its flagship cable news station has been flagging badly, having fallen to a #4 position in cable news behind Fox, MSNBC, and its own Headline News Network (HLN), tabloid TV without tabloid wit. CNN is cool and confused in an age of hot and pointed.

Online, though, CNN has built a formidable business. It ranks at or near the top of the top news sites, excels at user-gen news content and offers one of the few paid news apps.

It’s a tale of two business units going opposite directions.

Look at the revenue pie for CNN, and you discover more nuance. One-half of CNN’s roughly $500 million in revenue comes from what it calls business subscription fees — what cable companies pay it for carriage. Ten percent of its revenue is now coming from prime-time advertising; the same percentage from its digital businesses. Advertising outside prime time, international, and some syndication round out the revenue picture.

We can certainly see that CNN’s revenue model is much more diverse than newspaper or broadcast companies. That payment from cable systems for carriage — averaging about 50 cents per subscriber per month, according to recent accounts — makes a huge difference in a time of great advertising change.

We can also see that CNN is becoming more and more of a content company. It gets paid that half dollar a month from cable companies because its inclusion helps drive subscribers. Recently dropping the Associated Press, it’s moving increasingly into syndication, both video and text, and there the quality and breadth of content counts. As one of the first news companies to embrace multi-platform publishing (cable + desktop + mobile, long before others got that notion), it moved quickly to price its product for the iPhone, charging $1.99 and now ranking as the #2 news app in the iTunes store.

So content creation — and content creation that rebounds in digital waves, even if it starts from a cablecast — is more important to CNN every day. If it could come up with more programming that provided digital multipliers — smartphone and tablet users willing to pay for access, and advertisers joining them — then the Larry King replacement might be not just good TV, but good strategy.

What might that mean?

For instance, how could could CNN better leverage its substantial iReport operation, a user-generated innovation that is the gold standard for TV news. Viral user-gen video is a mainstay of the digital world. Or maybe it could create an America’s Best News Videos (is Bob Saget available?), riffing on the montages that Jon Stewart has made almost mainstream. Maybe it could go The View-like, aggregating characters whose comments and rants might generate great two-three minute digital products. Or, most likely, it could find a bolt-out-of-the-blue digital age personality, like Rachel Maddow, who may well front MSNBC’s first iPad app. As MSNBC’s Mark Marvel told AllThingsD’s Peter Kafka about its coming app, it will allow users to “engage with the host of that show.” Engagement with Rachel, yes; with Larry, no. With Katie, maybe.

Can CNN find a digital upgrade to the analog King?

The goals here would be to produce great digital content, not just ratings. Sure, TV has seen some pick-up of memorable interviews — think CBS’ Katie Couric and Sarah Palin, or more recently the half-million pageviews after-market that Maddow generated with her Rand Paul interview. That aftermarket, though, has been more of an afterthought. If revenue growth is in the digital content business, CNN, broadcasters, and all news producers must increasingly think at least digital rebound, if not digital first. As Stephen Covey legendarily said, “Begin with the end in mind.” A good habit for highly effective media companies to adopt.

What else might print news companies learn from the CNN model?

First, syndication. While the Chicago News Cooperative and Bay Citizen pioneer innovative content syndication models, both with the New York Times, and Financial Times’ direct licensing model breaks new ground, most newspaper companies have failed to find other new, lucrative markets for their content. Yes, they’ve made some money from enterprise and education licensing, but if their content is really that valuable, they should be able to find other companies (Comcast, NYT, regional businesses, and more) to pay them for it.

Second, the pay-per-subscriber model that has insulated CNN from the ravages of ad change is one news companies should ponder. CNN made itself an indispensable part of the cable mix. Is local/regional news content indispensable to any aggregators — AT&T, Verizon, Apple, Nokia, for instance — as they bundle technology and content? What would it take — in the kind and breadth of content (video?) produced — to get a monthly payment, especially in the mobile digital world to come?

June 11 2010

23:23

4 Minute Roundup: iPhone 4 vs. Android Phones

In this week's 4MR podcast I consider the new iPhone 4 announced by Apple, with a sleeker design, longer battery life, "retina display" and a front-facing camera for video calls. How will the iPhone stack up against popular Android phones such as the new 4G HTC Evo and the Motorola Droid? I talked with CNET associate editor Nicole Lee to discuss the pros and cons of the new iPhone.

Check it out:

4mrbareaudio61110.mp3

>>> Subscribe to 4MR <<<

>>> Subscribe to 4MR via iTunes <<<

Listen to my entire interview with CNET's Nicole Lee:

nicole lee final.mp3

Background music is "What the World Needs" by the The Ukelele Hipster Kings via PodSafe Music Network.

Here are some links to related sites and stories mentioned in the podcast:

iPhone 4 vs. HTC Evo vs. Droid Incredible at Mashable

Sprint CFO - HTC EVO can take on iPhone 4 at News.com

Dialed In - iPhone 4 versus HTC Evo 4G at News.com

4 carriers and 4 super smartphones - which is your favorite? at ZDNet

HTC EVO 4G for Sprint Review at MobileCrunch

iPhone 4's 'Retina' Display Claims Are False Marketing at Wired News

iPhone 4 multitasking will disappoint at Computerworld

Apple previews iPhone OS 4, adds multitasking at Computerworld

Also, be sure to vote in our poll about choosing iPhone or Android:




iPhone or Android?survey software

Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian. You can follow him on Twitter @mediatwit.

This is a summary. Visit our site for the full post ».

June 10 2010

15:00

The Newsonomics of tablet ad readiness

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

Are you ready to receive? That’s the question news company should be asking themselves this month, as the second half of the year — with its unexpected flow in mobile ad dollars — beckons.

The numbers are mostly anecdotal at this point, though as some of us forecast, tablets promise a new, significant source of revenue for the companies that are ready to play the tablet game, and play it well.

Among the early evidence, reported by AP’s Andrew Vanacore, are:

  • $50 CPMs ($50 per each one thousand views) for USA Today’s iPad ad, as compared to maybe $10 for its web ads.
  • Irrational exuberance! Brian Quinn, WSJ’s VP/general manager for digital ad sales, says overall ad spend is increasing because of the iPad version, not just switching dollars from one platform to another. “Out of the gate, there was an exuberance about this,” he says.
  • Chase Sapphire, which is a New York Times iPad sponsor,  says its ads are getting a remarkable 15 percent clickthrough rate. That’s 150 times the rate of an average web ad.

Add to that the July 1 launch of Apple’s iAds, which will introduce ads within iPhone and iPod Touch (but not yet iPad) apps, and which will begin with $60 million in sales, with such companies as Disney, AT&T, and Best Buy participating. You can bet that when the program launches on the iPad, a vastly superior ad medium given the screen size, it will do well. Even just on the “phone” side of the business, the iAds launch should give Apple — and, importantly, apps — almost half of the mobile ad spend in the U.S.

Want a little flavor to understand advertiser enthusiasm? Check out this Steve Henn Marketplace report featuring a VP for The Gap. She’s near-ecstatic in describing her enthusiasm for the iPad/tablet as a way of selling stuff and gaining customer knowledge.

So, yes, maybe the iPad ad euphoria should come with a few grains of salt. But, still, the “multi-touch” immersive future, painted by Steve Jobs and talked up by the big digital ad agencies (themselves looking for new reasons to be in the supply chain) is upon us.

So, are publishers ready?

I had a conversation recently with someone who runs a digital division for a major newspaper group — smart guy, a pioneer in the field. I asked: “So are you working on an iPad app?” Answer: “We’ve looked at our logs, and we’re seeing increasing traffic from the Kindle, but not much yet from the iPad, so we’ll wait awhile.”

I felt a rant coming up, but suppressed it then and will channel it now: If not now, then when?

We can look at each of the major revolutions in digital news and commerce, and see how news companies responded.

Search. Late.

Paid search. Way too late.

Video. Late.

Social. Too late.

Mobile. Largely too late.

News companies have used old yardsticks to measure new technologies, and the results have been, predictably and disastrously, too little, too late.

Now with the iPad, the advent of tablets generally, and the invention of the app metaphor as a way of navigating the digital life, news companies have another chance. The newsonomics of tablet ad revenue are uncertain — will iAds simply flood the ad market with more low-cost ads, as developers happy to get any ad revenue price their ads low? — but the tablet offers the biggest do-over potential for engaging readers anew and re-engaging advertisers, at rates somewhere between the laughably low of the web and the near-impossible-to-sustain-long-term highs of print.

The digital division head told me that the logs told him that there was insufficient customer demand to justify investment in an iPad app. This, I think, is like managing by rearview mirror.

The whole metaphor of the iPad is the app; ask anyone who uses it, and they’ll tell you they are surprised how little they use the browser and use search. So if you are counting browser views of your website coming through the iPad browser, you have no idea how a reader might use your product if it were built to take full advantage of the tablet’s abilities. In addition, consider that the sale of iAds require an app — not a browser-available site.

If this sentiment were uncommon, fine, but I fear it’s too commonly held. Wait and see. Wait — until it’s too late. That’s what I generally see happening among regional and local newspaper companies. They talk about early adopters and the high cost of a state-of-the-art iPad app, and most are waiting.

The big guys — what I’ve called the Digital Dozen — aren’t waiting. The Wall Street Journal, The New York Times, Thomson Reuters, The Guardian, BBC, and AP are in the game — some with better apps than others — and all planning the next generation of products. We’re seeing impressive sales in the thousands for the WSJ paid app and can wonder about the applicability of Wired’s impressive sales of 73,000 (which are on a trajectory to beat print newsstand sales) to news and newspaper companies.

We’ve already seen a great separation in product development, audience engagement, and ad revenues between the nation’s and world’s biggest news companies — each with struggles of its own — and the other guys. Yet as they struggle, they’ve gotten most of the ad revenue smartphones have so far generated, as local news media has failed to get any revenue of scale. At this point, the iPad era looks like it the opening of an even greater divide among the largest media — and the rest.

[Ken will be on vacation the next few weeks, but back in July. —Josh]

09:31

Forbes.com: Did mainstream media ignore the AT&T iPad hack story?

The Forbes.com Firewall blog looks at the media treatment of a big tech story from this week, the breach of iPad buyer information.

The source of the AT&T story claims he approached mainstream media titles before he gave the exclusive to Gawker…

Asked if Gawker paid for the scoop, Weev said the publication did not provide remuneration. “we did a benefit analysis and decided they could take our story viral the fastest,” he writes in an email.

Full post at this link…

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April 01 2010

18:16

The Newsonomics of iPads and tablets, floor by floor

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

AppleMania meets Rummy’s oft-noted trilogy of known knowns, known unknowns and unknown unknowns this week. The iPad is finally here.

Predictably, opinion is widely split on the impact of the tablet on future of news publishing. We don’t know enough, in truth, to ground any certainties. We can, though, start pecking away at it. Here’s a start. One way to assess the new is to connect it to the old.

So let’s build on the traditional cost-and-revenue structures of newspaper operations. I recall the floor-by-floor layout of the Pioneer Press, in Saint Paul, in the ’90s, a time our staff still filled almost all the floor space.

Bottom floor: HR and Finance. 2nd floor: Circulation. 3rd: Production. 4th: Marketing. 5th floor, advertising. 6th and 7th, newsroom. 8th, Exec suite.

So in a tablet world, what’s the impact on the major cost and revenue divisions of the news enterprise, knowing that HR, finance, marketing and executive suites have already seen their own slimming-downs and won’t be much affected?

Let’s start with the newsroom and with “production.” The traditional newsroom provides the meat-and-potatoes of the tablet experience, the text-reading experience. Yes, the iPad should turn “e-readers” and “e-editions” into trivia game answers. Most publishers look at their first tablet products as lite versions of what’s to come, incorporating a few gee-whiz features to salute the innovation. In those first versions, content production doesn’t need to change much.

Soon, though, it will. News companies will need to hire up and skill up — designing, creating and presenting reader-pleasing content. That’s enough of a challenge for monthly and weekly magazines; for dailies, it’s truly a transformative process. Dozens of newsrooms have incorporated videographers, design-savvy producers, and social net masters into workflow, but even in those newsrooms, the resources aren’t sufficient to create the truly new product the tablet enables — a product worth consumers paying for. Then, there are the hundreds of newsrooms who have relatively few of the skills they need at all. Newsroom (and Production) Net: The tablet demands new investment, mainly in new hires, somewhat in new training. With papers still in cutting mode, where will the money come from?

Circulation: It’s an accident of timing that the tablet launch coincides with the Year of Experimenting (Perhaps Dangerously) with paid content. Journalism Online’s Press+ system will soon test niche play from prep sports to obits to metering schemes of several kinds. The New York Times is neck-deep in its begin-metering-in-early-2011 plan. News Corp is erecting walls, the latest around the Times of London, as it just announced a paywall there to go up in June. Yet the timing of the iPad launch means that tablet economics will inevitably color – and may drive – paid content plans.

The Apple model, in a sense, just sets a new cost-of-distribution. While web distribution has been free-plus, the cost of Apple distribution — if you charge for news products — is a predictable, and seemingly stable 30 percent. Just give me 30 percent off the top, says Steve Jobs. Ironically, that 30 percent isn’t far off from the costs of physical distribution for newspapers.

With many news publishers planning on charging for iPad apps (though free, lite apps-as-teasers will probably be near-universal), we see the model of tablet “circ” emerging. Publishers look at the Guardian example (charging about $3.75 one time for its iPhone app), and have two reactions:

— Wow! They got 100,000 people to pay in just a couple of months!

— One-time sales are peanuts. We’re going to charge ongoing subscription rates for our apps/news products. Right now, each edition of a magazine is a separate app, as the Apple store is architected.

So, almost overnight, we’ve got a new model of paid content and supplier/distributor business model. The content company gets 70 percent; the distributor (Apple, first at least and foremost at least for now), gets 30 percent. That’s the inverse of the detested, standard Amazon model, 70 cents to Amazon and 30 to the publisher.

What might be the impact of such a split? Well, let’s estimate that The New York Times serves about 75,000 customers with its Kindle product, a nice little niche. The price is $13.99 a month. That’s $168 a year. With the standard split (the Times may do better), that would be $50 a year to the Times and $118 to Amazon. That would be $3.75 million a year for the Times (and $8.85 million to Amazon).

If the split were 70/30, the numbers would be reversed, netting the publisher another $5 million a year. That’s not huge money, but we can see how it would scale over time, as is clearly the intent with Wall Street Journal’s new $17.99 iPad product.

Now, Apple-delivered apps will not be the only way to monetize content, but expect to see the approximate 70/30 split become a model, a good starting point.

Circulation Net: News and magazine publishers now see a second digital revenue line. It’s 70 percent of X (the retail price) multiplied by Y (volume of sales). As news companies reinvent not only products, but new business arrangements with the distributors of the day — from Google/Amazon/Yahoo to Comcast/AT&T/Verizon — expect to see the Apple model invoked as “fair.”

Advertising: Early returns have been blockbusters — big advertisers like Chase supporting the New York Times iPad launch and watchmaker Hublot subsidizing two months of the FT product, for instance — and that buoys hope. At launch, iPad advertising is like Triple A office space in the city; it’s the new shiny, slick must place to be.

As the shine wears off a bit, it’s likely to become a great test ground for a new merger of brand and performance advertising. Brands love the idea of owning their own tablet experience, directly embedding themselves into customer experience, given the multitouch capabilities, video, and social upfront natures of this new platform. Connect that to direct-response advertising (glossy magazine with built-in wifi), and you’ve got all kinds of opportunities for engaging customers and watching the resulting metrics, minute by minute. Branded premium pricing may mate with AdWords performance-based pricing; who knows what the offspring will look like?

The first advertisers are the big national ones, and they in turn will want to associate with products that best use the new medium — the better to attract the kind of customer they want: leading edge, willing to try something new.

Ad Net: Tablet-based advertising should add, unexpectedly, to top line revenues in the second half of 2010 and more strongly in 2011. Expect though, a big split here: those companies I call the Digital Dozen, the 12-15 companies with national and global publishing reach and resources, will be the ones to create the best out-of-the-box news and magazine products – and they’ll be rewarded with a small surge in ad revenue. Those unable to play at a significant level will in turn reap few rewards.

March 19 2010

14:44

Geo-Location, Sentiment Analysis, AT&T Blankets SXSWi

As SXSW Interactive comes to a close and SXSW Music kicks off, it's worth taking a look at the ideas, trends, discussions, and issues that dominated the four-day technology summit. Here are the five areas that stood out the most to me.

1. Conference Buzz

Every year there is a product or two that monopolizes most of the buzz -- for example, you couldn't go ten feet in 2008 without hearing a discussion about Twitter. For 2010, the buzzed-about phrase was without a doubt location-based services. Although the start of this discussion was in 2009, these mash-ups of geography and social technology really hit their stride this year.

foursquare1.jpg

Foursquare and Gowalla are the clear leaders in this space, as evidenced by the major presence enjoyed by both at the conference. Foursquare had a record 347,000 check-ins in one day this week, and the use of the service will certainly continue as the music crowd floods Austin.

The discussion I had with most people centered around the question, "What next?" As in: Now that these services are gaining momentum and adoption, where is the business model? Other than high-level brand partnerships and individual locations offering incentives for customers to check-in, few other monetization and call-to-action results have been seen. I see plenty of value in getting 10 percent off my order if I am the Foursquare mayor of a restaurant, or in allocating a big ad spend for a custom promotion, but where is the middle ground for everyone else?

But apart from that, you know you're hitting some level of critical mass when CNN chimes in on how to use Foursquare to be cool (or at least not uncool).

2. Data Tracking and Analysis Tools

In my 2009 wrap-up piece, I stated that 2010 would be the year of analytics. The data has been available for ages, but the tools to turn raw data into information -- and better yet, knowledge -- have finally found a strong value proposition. More and more products are emerging to monitor and analyze Twitter activity, social media trends, community management results, and overall impact and impressions.

Google Analytics is still a strong contender in the space, with almost everyone mentioning this as a core piece of the puzzle. Platform-specific tools such as Twitter Counter and bigger-picture services such as Radian6 were discussed at great length and examples were provided of their functionality.

The current Holy Grail of analytics (and I bet a buzz-topic at SXSW in 2011) is sentiment analysis -- not only knowing who is saying what how often, but getting a feel for the tone and meaning of what they are saying. Be on the lookout for more discussion and tools as time goes on. (MediaShift's Nick Mendoza looked at sentiment analysis related to the Oscars recently.)

3. Disappointing Panels & Keynotes

There is no lack of articles on the multiple disappointments around this year's panels and keynotes (start here and here). Spotify's Daniel Ek and Twitter's Evan Williams both brought in packed houses, but by the end of their talks the attendance was sparse and the content was thin.

As someone who speaks at and attends many tech and music conferences, I've seen my fair share of highly informative panels, and have had plenty of my time wasted. I wish I could report that SXSWi had a non-stop stream of amazing takeaways, but unfortunately it didn't go that way.

It's not for lack of relevant, forward-thinking topics. And it's certainly not for lack of amazing speakers who are getting big things done. In my experience, it comes down to two things: Having to cater to a very wide audience with varying skill levels, and only having a short time to address a long list of topics. The solution? Keep the panels focused on the core topic -- I'm talking to you, moderators -- and keep in mind that the audience can read theory on any blog; what they need are actionable takeaways.

The reason I left most panels disappointed was that I felt it was a missed opportunity. With such brilliant and accomplished panelists, I should have walked out of the room with a few action items I could implement immediately. This was very rare.

4. Skyrocketing Attendance

hero.jpgThe attendance at this year's conference says something positive about the state of the tech industry. Last year's attendance was approximately 10,000; this year, there were over 15,000 badge holders. The feeling is very reminiscent of the mid-'90s in Seattle, when a new wave of technology and investment quickly expanded the marketplace.

What seems great for the industry -- a glut of big thinkers and tech geniuses -- is not as ideal for the conference itself. Getting into panels meant waiting in long lines and, often, only getting in when someone else left. The same thing happened at most industry parties, where the RSVPs far exceeded room capacity. It was a constant feeling up "hurry up and wait."

Fortunately, AT&T thought ahead and brought in an extra cell tower, providing massive bandwidth for what seemed to be the biggest concentration of iPhones on the planet. I can honestly say it was the best 3G coverage I've ever had.

5. Parallel Conferences

Something I noticed this year that I hadn't seen near as much in prior years was a number of parallel conferences, both perceived and actual. Depending on your interests and network, the conference experience tends to vary widely. In a single night you can find yourself in the middle of a raging party with young (and wealthy) tech entrepreneurs, a serious business dinner with corporate executives, and in a development workshop with programmers (that's their own unique type of party).

3369165500_4e38106073_m.jpg

In addition, there were a number of side conferences, including fully off-site panels that almost felt like secret societies. Celebrity bloggers hosted workshops, independent organizations hosted roundtable discussions, and trade organizations fostered discussions focused on their interests. There was certainly something for everyone.

SXSW Music has now begun, and the tone of the conference has dramatically changed. Stay tuned for a report back on that experience...

Photo of Foursquare app by dpstyles via Flickr. Photo of attendee with Mr. Spam by Randy Stewart via Flickr. Photo of SXSW closing party logo by Fellowship of the Rich via Flickr

Jason Feinberg is Vice President, Direct To Consumer Marketing for Concord Music Group. He is responsible for digital and physical direct-to-fan solutions for CMG's frontline and massive catalog including the Fantasy and Stax labels.

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