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August 02 2012
The newsonomics of syndication 3.0, from NewsCred and NewsLook to Ok.com and Upworthy
Of the many failed digital news dreams, digital syndication is one of the greatest enigmas. We’ve seen companies like Contentville, Screaming Media, and iSyndicate (Syndication 1.0) followed by companies like Mochila (Syndication 2.0), all believing the same thing: In the endless world of digital content, there must be a big business in gathering together some of the world’s best, creating a marketplace, and selling stream upon stream.
In the abstract, the idea makes lot of sense. Producers of content — AP, Reuters, Bloomberg, The Street, Al Jazeera, Getty Images, Global Post, and many more — want all the new revenue they can get. They want to see the content they produced used and reused, over and over again, helping offset the high cost of news creation. The enduring problem is the buy side. We’ve gone oh-so-quickly from Content is King to a content glut. In a world of endless ad inventory and plummeting ad rates, why take syndicated content just to create a greater glut of news, information, and ad spots? That dilemma still hangs in the wind, and has bedeviled news industry consortium startup NewsRight, as it tries to find a future. Yet I’ve been surprised by a new wave of news syndication that’s been developing, here and there. It’s worth paying attention to, because it tells us a lot about how the digital news world is developing.
In part, it’s about new niches being found and exploited. In part, it’s about responding to deep staff cuts at many newspapers. In part, it’s about a slow-dawning wave of new product creation, aided by the tablet. Each of the newer efforts sees the world a little differently, and that’s instructive, though technology and video (see The Onion’s “Onion Special Report: Blood-Drenched, Berserk CEO Demands More Web Videos”) play increasingly key roles. So let’s look at the newsonomics of Syndication 3.0, and a few of the newer entrepreneurs behind it.
NewsCred
As 31-year-old CEO Shafqat Islam notes cheerily, finding investors for his startup was complicated by the fact that “there are a lot of dead bodies in this space.” With 100 fairly top-drawer sources and a staff of 50 (35 of them in tech), NewsCred is the big new mover in text and still image syndication, launched earlier this year (“NewsCred wants to be the AP newswire for the 21st century”). Its 50-plus customers divide roughly equally into two groups: media and big brands.
Media, says Islam, are using NewsCred for two reasons. One is to build new products, as the New York Daily News has done with its March-launched India news site, recognizing a locally under-served audience. Skift, Rafat Ali’s new travel B2B start-up, is getting 30 to 40 percent of its content through NewsCred. The other is the emergence of the paywall: Charging for digital access, he says, has meant some news companies are wanting to bulk up, offering a better value pitch to would-be digital subscribers. The Chicago Tribune launched a biz/tech “members only” product, powered by NewsCred, at the end of June.
The brand use of news content has a bigger potential. Check out several case histories, showing the use Pepsi, Orange Telecom, and Lenovo has made of NewsCred-distributed entertainment and tech content. Brands are publishers and want an easy, one-source way to populate their sites. Islam says his seven sales people are working as consultants of a sort, especially with such brands. Figuring out how to create content experiences for brands-turned-publishers is one part of the syndication puzzle.
Lessons Learned:
- In a sense, this is syndication meets marketing services: As news companies both produce content and try to act as regional ad agencies, the synergies between the two are becoming more evident.
- Timing is everything: We’ve seen a maturation in curation technologies, as metatagging gets easier and cheaper, allowing niched feeds. Then, an increased emphasis on niche product creation is combining with brand need for news content, creating new potential markets.
NewsLook
With 70-plus top video news sources and 35 clients, the three-year-old NewsLook also hopes to build on the archeology of syndication ruin. Like NewsCred, it positions itself as a technology and curation company, adding value to a mass of content. For CEO Fred Silverman, the technology means, importantly, better integration of text and video content.
“We see an awful lot of guys with a video page, or a video way down at the bottom — it’s not integrated. Our push with the publishers we work with is to fluidly integrate it into a news page. You are eleven times more likely to watch that video if it is integrated into a story.” That seems like common sense — put the words and pictures together — but Silverman’s experience resonates way too deeply if you journey through news websites. For his part, he’s been working on improving both NewsLook’s own video metatagging and the ability to match that with text. Now he’s got to convince more customers to make the integration.
Using a license model — “we’re not really an ad company” — NewsLook has found its customers in three segments. He sells to content aggregators like LexisNexis and Cengage, and he sells to news companies. It’s the third area, though, vertical sites, that represent the biggest growth opportunity, especially in the tech area. NewsLook, with its video emphasis, is now partnering with text-centric NewsCred, looking for joint opportunities.
Lessons Learned:
- Think niche. Think video. Both have audiences that may be paying ones; video ad rates are still holding up far better than text.
Deseret News Service and Ok.com
Clark Gilbert caused quite a stir when he took the reins at Utah’s largest newspaper company two years ago (“Out of the Western Sky, It’s a Hyperlocal, Worldwide Mormon Vertical”). Combining Harvard Business smarts, wide media knowledge, and traditional religious values, Gilbert promised to reshape the LDS-owned media Utah media properties in a way no one else could. Now, midway through that Utah transformation, he’s also moving on a wider world of syndication.
Ok.com has launched. It’s a movie guide like no other. Less Rotten Tomatoes and more wholesome salad, it is a “family media guide.” It’s social (Facebook login) with user-generated comments and ratings, and it offers many of the features (trailers, photos, theater times, online ticketing) that you’d expect. It’s also just the beginning. Ok.com will add TV listings, books, music, and other media to its site. Just syndicated, it so far has signed up a half-dozen customers.
“We want to own the family brand,” Gilbert says, citing his own commissioned research to indicate that it could be a large market. His segmentation of faith-based readers finds not only great dissatisfaction with the perceived amorality of Hollywood, but also questioning of the values of mainstream media.
To address the latter market: the new Deseret News Service, a “values-oriented syndication service.” That service, available for both print and digital, now reaches five markets, with a couple of dozen more on the horizon.
Business models, like cars.com, Gilbert notes, include both straightforward license fees and revenue share models, with Deseret selling advertising.
Gilbert, ever the modeler, believes Deseret is creating one for the industry.
“If you look at the product strategy, we started with the newspaper. We knew we couldn’t be good at everything…..For the Deseret News, that meant our six areas of emphasis [Family, Financial Responsibility, Values in Media, Education, Faith, and Care for the Poor]. For other newspapers, that can be something else. For Washington Post, it is politics. For Sarasota, it is retirement. What I’ve seen in the failure of the newspaper industry is that we’ve lost half our resources, but we’re going to cover it all rather than having the rigor to say, ‘What are we the best at?’
“The web rewards deep expertise. You have a lot of newspapers with high cost structures, producing average commodity news. [We looked] at what can can be the best in the country at. That led to a national edition in print and now syndication.”
Lessons Learned:
- Combine your values — editorial, religious, or whatever — with the best web tools of the day to satisfy currently unsatisfied audiences. Then scale.
The AllMedia Platform
Critical Media CEO Sean Morgan may be the last man standing whose career has spanned syndication from 1.0 through 3.0. A founder of Screaming Media, circa 1995, his Critical Media company has been building syndication and other products (media monitor Critical Mention, video capture and creation platform Syndicaster, news video licensor Clip Syndicate) since 2002. Now, his company has produced AllMedia. Its primary function: a platform allowing clients “to collect and curate user-generated video content from their online communities.” It’s another component of its analytics-based enterprise business.
Morgan’s play here is wider than syndication, but syndication plays a key role. Critical Media’s technologies offer publishers (and others) value. In return, Critical gets the right to license news video assets, and it has amassed three million of them, and 100,000 are being added monthly; 350 (200 newspaper; 150 broadcast) local media companies are participating in Critical products. Clip Syndicate, its news video product, isn’t yet well promoted, but when it is, it could be powerful. It already enables “grab a channel” functionality for licensees. Clip Syndicate operates on a 50/50 revenue share model, with Morgan saying he is getting $21.40 CPM rates. The goal: monetize the “the biggest news video archive.”
Lessons Learned:
- Syndication may be a long-term proposition, taking years of building infrastructure, or partnering with those who do.
- It’s not the content — it’s the metadata about the content that unlocks its value, allowing niching and enabling product creators and editors to find what they need.
California Watch
Now incorporating content from its Bay Citizen merger, California Watch continues to expand out its syndication business. Executive director Robert Rosenthal estimates the news startup will take in about $750,000 this year in licensing money, funding about 10 percent of its budget (“The newsonomics of the death and life of California news”). California Watch offers yearly, monthly, and à la carte sales.
Its model really is the old-fashioned media wire, vastly updated with multimedia at the core and a strong enterprise journalism emphasis. With 16 significant media partners throughout California, just adding NBC Bay Area and including big TV stations and newspapers, it has been able to double some of the prices it charges over time. Further, it’s on the verge of syndicating to a major national/global news player. “Don’t silo potential audience by geography. A good story from a neighborhood in San Francisco may be the top story on the Internet one day,” Rosenthal says.
Like a traditional wire, its value is in more than its stories. It also acts as a news budget or tipsheet for subscribing news editors. With one of the largest news contingents in the state capital, Sacramento, for instance, it helps drive coverage overall.
Lessons Learned:
- Collaboration with customers creates utility as well as content itself — and cements financial relationships.
- Syndicated content, here, works on the older concept of scale: Do it once and distribute to many, without the burden of legacy costs and constraints.
Upworthy
Upworthy is like Hollywood Squares for progressives. No Whoopi Goldberg, but nine rectangles of meaningful video, well described by the Times’ David Carr.
Launched in March. It’s an on-ramp for Facebook, feeding the kinds of videos it prizes into the social sphere with headlining that would make a tabloid editor proud. Founder Eli Pariser (of Moveon.org and author of The Filter Bubble) says he borrowed headlining techniques from Slate, which he says writes “the best headlines on the web,” without slavishly pointing at Google search engine optimization. (Examples: “Donald Trump Has Pissed Off Scotland” and “How a 6-Year-Old With Ignorant Parents Just Became the Best Republican Presidential Candidate“).
Its declaration defines its would-be audience: “At best, things online are usually either awesome or meaningful, but everything on Upworthy.com has a little of both. Sensational and substantial. Entertaining and enlightening. Shocking and significant. That’s what you can expect here: No empty calories. No pageview-juking slideshows. No right-column sleaze. Just a steady stream of the most irresistibly shareable stuff you can click on without feeling bad about yourself afterwards.”
Upworthy is really syndication simplified. It uses the social sphere to see content re-used. Its currency isn’t licensing fees; no money changes hands in its viral promotion of content. Currently, its single revenue source is referral fees it gets from progressive organizations that pay it on a cost-per-acquisition basis for traffic.
Lessons Learned:
- People — many, many people — will do the syndication for you if you learn the tricks and trades of headlining, SEO, and the social rumble. While Upworthy’s referral-fee business model may have limited extension, its use of social to extend syndication (perhaps with sponsorships) can be used by others.
Consider Syndication 3.0 a puzzle, with more of the parts found but the full picture still incomplete. Technology, as in all things digital, plays a midwife role, but understanding customer use — and helping would-be customers imagine use — is fundamental. Let’s face it: Costly content creation must be paid for somehow, as ad revenues falter and reader revenues build slowly. Making more use of the content that has been created makes basic sense, and the basics of that business are being built out anew.
April 28 2011
The newsonomics of story cost accounting
Editor’s Note: Each week, Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of news for the Lab.
What’s a story worth?
Last week, I looked at a single investigative story (California Watch’s “On Shaky Ground“), and we saw the tab of half a million dollars for a 20-month-long tale of sleuthing. What about that ordinary daily story, quotidian journalism as we know it — the grinding out of less eventful articles, the kinds of things that keep us informed but don’t offer epiphanies? How much does it cost, and how much does that matter to the future of the news business?
It’s not an academic question. This week, McClatchy added to the long line of down financial reports, telling us that it was down 11 percent, year over year, in ad revenues and 9 percent in overall revenues, for the first quarter. That announcement follows on from similar reports from The New York Times Co., especially its regional properties, and Gannett. The U.S. news industry is extending its unwanted record: 21 straight quarters of revenue down quarter to quarter. That’s a lost half-decade.
Add up those down revenues and the need to maintain profitability — for public or private owners — and there’s but a single answer: cut costs. Certainly, the industry has cut out major costs in the last three years, but cost-cutting is slowing, if you look at the company reports. The New York Times’ costs were flat in the first quarter, Gannett’s down 0.9 percent and McClatchy’s down 6.5 percent. That’s in large part due to rising newsprint prices, making it harder to get costs more appreciably down. With those continuing revenue declines, though, expect more cost-cutting. It’s a given.
So, let’s ask about that daily story. What’s it cost?
Of course, we’ve never looked at it that way. We’ve hired people, told them to write, at times monitoring their production, but rarely taking a look at the cost of what they’re producing. Given the pressures of the day, given the Demand Media model and given the predilection to start counting whatever can be counted (“The newsonomics of WaPo’s reader dashboard 1.0“), story cost accounting is inevitable.
In fact, it’s already started. Let’s take a brief look at what is bound to become a bigger topic in the months ahead, the newsonomics of a single story.
Clark Gilbert, Salt Lake’s dean of disruption, is getting into the nitty-gritty of retooling editorial content production, top to bottom, and that includes getting a handle on differing costs of content. Gilbert is a key part of the team that is transforming the media properties of the daily Deseret News and leading local TV and radio stations KSL, all owned by the Church of Jesus Christ of Latter-day Saints, better known as the Mormon Church. Last August, Gilbert announced one of the most major restructurings in journalism, making major staff cuts — a prelude to the re-architecting now being done. That restructuring includes the launching of Deseret Connect, an initiative to round up pro-am user-generated content from around Utah, and around the globe.
The new CEO of Deseret Media will soon be able to tell you exactly how much articles cost him. He’ll specify the differing price points of local, proprietary content, of AP content, of a blog post written halfway around the world, and lots more.
For now, he draws upon his experience as a Harvard Business School prof and strategic consultant. From that career work, he estimates the following, general cost metrics for the content offered by news companies in print and online:
- $250-$300 per staff-written story;
- $100 per stringer story;
- $25 per Associated Press story;
- 5-12 for “remote” stories, largely written by the emerging class of bloggers
“You better know your cost per story,” he says. “That’s the kind of rigor you need.”
As focused as he is on building digital ad revenues, he makes the point directly: “You have to work both sides [revenue building, cost reduction] of this.”
“It doesn’t mean I’m not willing to pay for content,” says Gilbert. “I’m paying a boatload for stories that are a commitment to my audience.” It’s a straightforward strategy: If you are going to pay a boatload for some stuff, you better pay a lot less for other stuff.
Still, those numbers are bound to chill many a journalist. You think posting reader metrics in newsrooms is still a point of contention — wait ’til story cost accounting becomes mainstream. And it will. It’s just simple manufacturing, and like it or not, that’s what the news business has long been. Manufacturing, with lots (New York Times, Wall Street Journal) of quality added or with (insert your favorite rag here) just enough to draw ads. News creation used to be a sunk cost, with headcount a small and usually polite battle between editors and publishers. That was in stable times. In these times, knowing business drivers, down to the dollar, is going to be part of the new world.
The metrics-driven thinking may have been first demonstrated by Demand Media, with its $10, $25, and $50 stories (“The newsonomics of content arbitrage“), but once opened, that Pandora’s Box won’t be closed.
Clark Gilbert is early in the game, but others are taking a parallel cost-conscious approach.
John Paton, CEO of the new, continuous-revolution Journal Register Company, breaks it down differently, but is highly cost-aware.
“We’re not looking to save money on local, professional content,” Paton told me this week. Notice the emphasis on “local” and “professional.” Like many others, Journal Register is beginning to round up hundreds of local bloggers (as Patch joins that club), who will be largely unpaid.
What Paton emphasizes, though, in his cost-of-content analysis, is the 60 percent of JRC’s content — across print and digital — that is national. He’s done a careful counting of what’s in his products, and says that while 40 percent is local (above average for dailies, he says), 60 percent is national. So Project Thunderdome, newly headed by D.C. veteran Jim Brady, has put a bullseye on that content. The notion: Lower the cost, and where possible, raise the quality of national content. That thinking is behind JRC’s recent deal with TheStreet.com, which is now providing its national business news. It’s a revenue share, with JRC gaining national revenues. In addition, says Paton, it has increased its local business content-related revenue, given both the new inventory of ad impressions made possible and the quality of TheStreet.com content. That’s a model Paton intends to extend to other non-local content.
Further, he’s taken dead aim at the cost of getting content through the mechanics of a newsroom. Saying that about half of U.S. editorial staffs are engaged in producing content for publication — not creating it — he’s focused on changing that ratio. Instead of five of ten journalists engaged in production, he’s aiming for two of ten, to be accomplished through centralization and templating of the production functions. “Then, two or three more of the ten can create content,” he says.
Both plans will, in effect, reduce the cost of content overall. And, as with Clark Gilbert’s philosophy, the intent is to invest in unique, local, proprietary content, even though it’s far more expensive.
Let’s consider one more take on story cost accounting. As CEO of Huffington Post, Betsy Morgan pioneered the unique brand of higher-end, often personality-driven aggregation that distinguished the site’s offerings. Out of that experience, and in her new role as CEO of Glenn Beck’s The Blaze site, she’s evolved her own metrics. They divide nicely into thirds.
- One-third original, professional content, largely reported journalism.
- One-third voice and opinion.
- One-third aggregation, or to use the updated term, “curation,” as editors aggregate, honing off-site story selection given their understanding of their unique audiences.
Morgan tells me that “the thirds” form both an audience strategy and a cost strategy. Clearly, as the venture-backed HuffPo began its life, it watched its dollars very carefully. That meant that curation wasn’t just an audience-pleasing idea, of course, but a cost-saving one, as bloggers (at least then!) willingly forked over content in exchange for play and recognition, not money.
Going forward, the “thirds strategy” offers another twist on Clark Gilbert’s and John Paton’s (and Arianna Huffington’s) strategies. Obviously, you don’t pay for the curation part, other than for the technologies or smaller staff to handle it. You can pay for some of the voice and opinion, but there’s a hell of a lot of it you can get for free or cheap. And, once again, you concentrate your costs of content on the high end — original, professional, largely reported journalism.
The new AOL/HuffPo’s been doing that with pro hire after pro hire. Morgan herself is doing it, as recently as this week with the hiring of former Denver Post columnist David Harsanyi.
Add it all up, and it’s a new cost structure for the craft of journalism. As with all metrics, the good or bad they inspire depends on who is using them. What’s clear is that those news outfits — local, national or global — which only concentrate on paying staff, like in the old days, will find themselves out-strategized by those who take the blended approach.
Is it all about thirds? No, but it’s a good place to start.
I think of it as a pyramid. Original content — content that distinguishes news brands — is at the top, and, yes, is the most costly. At the bottom is clearly aggregation, because as Morgan points out, “[readers] can’t easily find and read what’s of interest to them.” Then, there’s the middle third or so. For regional news companies, that includes hyperlocal bloggers and subject-specific (transportation, public health, sports) experts; for national sites, it’s non-staff “contributors” of differing skills and costs. That third is quite open to innovation.
It’s a great whiteboard exercise, at least, for anyone in the news business. Pass the marker, please, and work the pyramid.
September 03 2010
This Week in Review: USA Today gets a mobile makeover, Twitter and trust, and a paywall’s ad struggles
[Every Friday, Mark Coddington sums up the week’s top stories about the future of news and the debates that grew up around them. —Josh]
Cuts and big changes for two papers: In the past week, two American newspapers have announced major reorganizations that, depending on who you read, were either cold corporate downsizing or fresh attempts at journalism innovation. First, late last week, Gannett’s USA Today announced that it would undergo the most sweeping change in its 28-year history, transforming “into a multi-media company” as opposed to a newspaper — and laying off 130 of its 1,500 employees in the process. The Associated Press and paidContent have pretty good explanations of what the changes entail, and thanks to the feisty Gannett Blog, we have the slide presentation Gannett execs made to USA Today’s staff.
Though there are some dots to be connected, those slides are the best illustration of what Gannett is trying to do: Push USA Today further into web content, breaking news and especially mobile content (by far its fastest-growing area) in order to justify a simultaneous move deeper into mobile and online advertising. The paper is hoping to become faster on breaking news, with a web-first mindset, fewer editors, and a strategy that focuses on flooding coverage on breaking stories and then coming back later for deeper features.
Gannett Blog’s Jim Hopkins, a longtime critic of the company, wasn’t thrilled about this move, either, pointing out the lack of newsroom experience in some of its key executives and saying that Gannett touted almost the exact same strategy four years ago, to little effect. He did say a few days later, though, that Gannett’s plans to encourage more collaboration among staffers — by flattening the “silos” of the News, Sports, Money, and Life sections — are long overdue.
News media analyst Ken Doctor was much more charitable, seeing in USA Today’s overhaul echoes of the new “digital first” mentalities at the Journal Register Co. and TBD. The best way to see this, Doctor said, is to “mark another day in which a publisher is acting on the plain truths of the marketplace and of the audiences, and trying to reinvent itself.” Newspaper Death Watch’s Paul Gillin called USA Today’s transformation a bellwether for news organizations and said its harmony between news and advertising is a bitter but necessary pill for traditionalists to swallow. And media consultant Mario Garcia said USA Today’s audience-driven approach is the key to survival in a multimedia environment.
The other newspaper to announce an overhaul was the Deseret News of Salt Lake City, a for-profit paper published by the Mormon Church. The paper is laying off 43 percent of its staff, though you wouldn’t know it from the News’ own article on the changes. In a pair of posts, Ken Doctor looked at the change in philosophy that’s accompanying the cuts — an attempt to become the worldwide Mormon newspaper of sorts, along with pro-am and local news efforts and a news-broadcast collaboration — and liked what he found. News business expert Alan Mutter examined the prospects for a slashed, print-and-broadcast newsroom and came out less optimistic.
A Twitter stunt gone awry: Twitter devotees are used to seeing untrue rumors and scoops occasionally get reported there (as Jeff Goldblum can attest), but this week may have been the first time a false Twitter report was knowingly started by a member of the traditional media as a stunt. Fed up with the more-breathless-than-usual Twitter rumor-reporting that’s been going on in the sports media this summer, Washington Post sports reporter Mike Wise decided to start a false rumor about the length of an NFL quarterback’s suspension to make a point about the unreliability of reporting on Twitter.
The stunt bombed; Wise admitted the hoax an hour later and was suspended for a month by the Post the next day. Such an ill-advised prank isn’t really news in itself, but it did spur a bit of interesting commentary on Twitter and breaking news. Numerous people argued that Wise’s hoax betrayed a fundamental misunderstanding of the nature of Twitter as a news medium — one that many others probably share. Even after the episode, Wise maintained that it showed that nobody checks facts or sourcing on breaking stories on Twitter.
Quite a few observers disagreed for a variety of reasons. Barry Petchesky of Gawker’s sports blog Deadspin said the whole incident actually disproved Wise’s thesis: The false story didn’t gain much traction, and the media outlets that did report the story credited Wise until it could be confirmed independently, just the way the system is supposed to work.
But the primary objection was that, as Gawker’s Hamilton Nolan, Slate’s Tom Scocca, and several others all argued, to the extent that Wise was trusted, it was because of the credibility that people give to The Washington Post — a traditional news organization — rather than Twitter itself. As TBD’s Steve Buttry pointed out, people would have run with this story if Wise had planted it in the Post itself or on its website; what makes Twitter any different? DCist’s Aaron Morrissey put the point well: Wise falsely “assumed that there weren’t levels of authenticity to Twitter, which, just like any other social construct on Earth, features some people who are reputable concerning whatever and others who aren’t.”
Rupert’s paywall runs into obstacles: Two months after the online paywall went up at Rupert Murdoch’s Times of London, The Independent (a competitor of The Times) reported this week that with a vastly reduced audience to sell to, advertisers are fleeing the site. In the article, various British news industry analysts also said The Times is killing its online brand and not adding any of the sort of value that’s necessary to justify charging for news. Stateside, too, Lost Remote’s Steve Safran saw the news as “mounting evidence that putting up a paywall is bad for business.”
It should be noted, though, that according to those analysts, The Times’ paywall is “more about gathering consumer information than selling content” — News Corp.’s primary intent may be getting detailed, personalized information on Times readers and using it to sell them other products within its media empire, including its BSkyB satellite TV. Francois Nel ran some possible numbers and determined that even with its relatively small audience (15,000 subscribers, plus day-pass users), News Corp. could be making more money with its paywall than without.
On the other hand, a new study reported by paidContent estimated that online subscribers to The Times and Murdoch’s Wall Street Journal are worth only a quarter of their print counterparts. Getting rid of the print product, the study posited, wouldn’t even make up for the loss of income from those subscribers. The Press Gazette’s Dominic Ponsford detailed more of the research firm’s report — a rather depressing one for newspaper execs.
Google and the AP play nice: A quiet news development worth noting: Google and The Associated Press renewed their licensing agreement that allows Google (including, especially, Google News) to host AP content. The deal was announced on Google’s side via a one-paragraph post, and on the AP’s side through a short press release, and then a much more extensive article by its technology writer Michael Liedtke. The extension is significant because the two sides have had a consistently fractious relationship — their first agreement began in 2006 after the AP threatened to sue Google for aggregating its articles, AP executives have criticized news aggregators for misappropriating content, and the AP’s material briefly stopped appearing on Google News late last year.
The Lab’s Megan Garber noted that this new agreement might go beyond another truce and mark a change in the way the companies relate: “Us-versus-them becoming let’s-work-together.” Search Engine Land’s Danny Sullivan provided plenty of background, surmising that AP has learned its lesson that Google News can live on just fine without them.
Reading roundup: This week was an especially rich one for all sorts of web-journalism punditry. Here’s a sampling:
— The American Journalism Review’s Barb Palser tried to throw some cold water on the hyperlocal news movement, using some Pew stats to argue that people don’t go online for neighborhood news as much as we might think. (That use of statistics led to a frustrated response by Michele McLellan.) And the Online Journalism Review’s Robert Niles added his skepticism to the discussion surrounding Patch and large-scale hyperlocal news.
— NYU j-prof Jay Rosen can be a polarizing figure, but there are few media observers who are better at pulling thoughtful insights out of the often mystifying world that is journalism-in-transition. We got three particularly thought-provoking tidbits from him this week: A sharp interview with The Economist about the American press; a lecture at a French j-school about the changing dynamic between “the audience” and “the public,” with tips for new students; and a video clip from the Journal Register Co.’s ideaLab on news production and innovation.
— We spent some time this summer talking about the merits (and drawbacks) of links, so consider this a worthy addendum: Scott Rosenberg, who recently chronicled the history of blogging, issued a three-part defense of the link this week. A great examination of one of the fundamental features of the web.
— Finally, two cool reads, one practical and the other theoretical. The Atlantic’s Alexis Madrigal listed five lessons from the publication of Longshot, the hyperspeed-produced magazine formerly known as 48HRS, and here at the Lab, Cornell scholar Joshua Braun talked about the way TV news organizations maintain the “stage management” of broadcast in their online efforts. “They continue to control what remains backstage and what goes front-stage,” he told Megan Garber in a Q&A, giving comment moderation as one example. “That’s not unique to the news, either. But it’s an interesting preservation of the way the media’s worked for a long time.”
September 02 2010
The Newsonomics of less-is-more, more or less
[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.]
It is a head-turner, which seems to be, at first, an only-in-Utah story. The Deseret Morning News, KSL TV, and KSL Radio, all owned by one company, the Deseret Management Co., a for-profit arm of the Church of Latter-Day Saints, are combining operations.
One headline: “Salt Lake City paper axes 43% of its staff”.
Another: “Deseret News a model of growth and innovation for the entire industry”.
One’s a fact; the other is aspirational.
Remove the religious subtext, for a moment, and I believe we see a model that will appear ordinary in many American cities, within a few years. Think about it. If we as readers, viewers and listeners want words, photographs, videos, and audio, and expect it to be served up in an easy-to-use, relevant-to-me way, then why would the companies that produce news in those various forms be separate?
They’re separate, of course, because those words/picture/audio used to be called newspapers/magazines, network and cable TV and radio broadcasters. Those words, though, describe the old world, those packages the content came wrapped in. In our digital world, we’re seeing delivery blur through the Internet. And, that inevitably, and now more quickly, means that single companies will produce words, pictures and sound — and they’ll find ways to do it more cheaply and efficiently.
If you own the Salt Lake properties, or if you’re Tribune and own the Chicago Tribune, WGN-TV and WGN radio, you practically have a fiduciary responsibility to rearrange assets that will make the company more efficient. If you own a broadcast station or a newspaper, you can more easily see the rationale in buying or combining with the other, to meet customer (reader/viewer and advertiser) demands of the coming age.
So the Salt Lake Experiment joins TBD’s (“The Newsonomics of TBD“) in putting together the text and video pieces. They are the next generation in this attempt to make convergence work. Call it News Convergence 2.0, with Tampa’s Tribune/WFLA experiment the best poster child for 1.0. How well the Deseret operation (or TBD) executes is, of course, the key. Journalism isn’t about white-board theories, in any era; it’s about getting the news gathered, analyzed, and distributed to readers, and doing it better than the competition.
Let’s look at the newsonomics of the Deseret decision, though. The numbers in play are curious ones, as Deseret News President and CEO Clark Gilbert lays out a “less is more” theme in the major restructuring of his company. In fact, let’s use the more and less theme to gauge the moving pieces of the new business model.
- Less is More: Take that “43%” headline. The legacy news staff of the Deseret News has indeed been cut 43 percent — 85 jobs, including those of the editor and publisher of the paper. That number includes both full-time and part-time positions. So we’d expect a lot less coverage, right? With a bit of frustration in his voice, Deseret News President and CEO Clark Gilbert tells me bluntly “That’s an Old Media world view. We have access to more journalists, hyperlocal contributors, national sports figures than ever before.” His point, and his plan: The combined operations of the remaining Deseret News staff and the sister news staffs at KSL TV and radio will operate smarter and more efficiently.
“Say there’s a story on Capitol Hill [in Salt Lake City]. Right now, the paper sends a reporter and a photographer and KSL sends a reporter and videographer. That’s four people, and that story may end up on B3,” says Gilbert. “Now we’ll send one.”
So, step one: “Reduce duplication.”
So the news math changes dramatically. The new staff of something more than 200 (Gilbert is being cagey about the number) will be expected to multitask, with remaining staffers increasingly cross-trained and “new employees expected to have those skills.” Do the math. If it took four people to do a story and now it takes only one, you can afford to jettison one of those positions and get more productivity out of the other two.
Step two: “Deepen coverage,” meaning the re-allocating of resources to cover issues most important to the readers. Gilbert says that about half of the remaining news staffers will serve in the “integrated newsroom,” with the remainder staying in more traditional journalistic roles. In that integrated newsroom of roughly a hundred, a third will serve as first responders/rewrite and two-thirds as field reporters. “You’re sandwiching the reporters between first responders [getting to news and getting it out quickly] and rewrite [those taking the reporters work and purposing it for various platforms],” explains Gilbert. Those who first-respond also do rewrite — so that’s going to be a busy staff.
The journalistic question: How do the new stories compare to the old ones?
- More Costs Less: Borrowing basic notions of getting cheap and free content from the Huffington Post and Demand Media, Gilbert is putting into action what he has long preached in academic and consulting circles. I’ve called this emerging time the Age of Cheap Content. That principle means that the new Deseret operation will leverage bigger-name writers (especially those consistent with its Mormon roots and values, like former BYU football star and current Philadelphia sports anchor Vai Sikahema) for little financial compensation. That’s the HuffPo model. And they’ll leverage Salt Lake and Utah reporters to address both topical and hyperlocal coverage, through the new Deseret Connect. That’s the Demand side of the idea, bringing together a large database of qualified writers — “not random bloggers,” says Gilbert — and keeping their payments low or non-existent. “Some of the best don’t write for money.”
Deseret Connect already has received more than 100 applications, and Gilbert says he can see it scaling to a thousand or more contributors within the year, using management system techniques developed outside the news industry for BYU/Idaho faculty.
Gilbert says the non-pros will work on a path from generalists to columnists to doing editorial features, with pay increasing along that continuum — though he’s clear to point out that people doing the writing won’t be looking to the company “as their main source of income.”
So, looking at cost per content unit — a Demand-like analytic — the new company will be able to house lots more content under its brand, at a far lower cost point.
- More Beats Less: The Deseret play aims to bring together text stories and blogs, video, and audio. That supposes that readers want all kinds of coverage brought together for them. It’s a bet that products that converge video and stories for readers will beat the competition, competition like MediaNews’ Salt Lake Tribune, the biggest non-church-owned news presence in the state. One big question here: How will the customer experience be converged? In Washington, two ongoing TV stations folded their websites into the new TBD at launch. How separate and how unified will the DeseretNews.com and KSL.com sites be?
- More is More: The new Deseret operation doesn’t just focus on geography — Utah’s more than 700,000 households. It’s taking a twin approach to being a general interest news site — and a new worldwide voice for the Mormon faithful of 13 million or so worldwide. In the company’s strategy, that’s described as a values-oriented approach, and you can already read that six-point values mantra widely. The six: “the family, financial responsibility, excellence in education, care for the needy, values in the media, faith in the community.” They make for a strong philosophy, but in marketing, that’s quite a straddle — one that may be difficult to pull off, especially as Salt Lake City itself has become majority non-Mormon.
The economics of it are clear, though. Pay (or don’t) to get a story written or a video shot once, and then distribute it many times over. It’s basic Internet economics, with a nichy, religious angle, one of many variations we’ll soon be seeing on these increasingly popular themes.
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