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June 27 2013

15:17

The newsonomics of Advance’s advancing strategy and its Achilles’ heel

Another city. Another melange of limited information, confused storytelling, and an unsuccessful attempt to put on a happy face to mask a huge change in newspapering and civic life.

Last week, Oregon’s dominant paper, The Oregonian, followed in the footsteps of other Advance papers and announced it would be delivering to homes only four days a week come fall. It will be greatly slimming down staff, including dozens in the newsrooms, formally going digital-first, reorganizing into two companies, and producing newsstand editions on the days it won’t home deliver. It’s Advance’s Slim-Fast, Phase 2, tweaked after its torturous New Orleans rollout last year (“The newsonomics of Advance’s New Orleans strategy”).

That’s the new Advance playbook, as the company — a top 10 newspaper company by revenue in the U.S. — proceeds with a revolutionary restructuring of the local news business. It’s a play that serves at this point as a contrarian example. Most publishers believe the Newhouse family, owners of the very private Advance, is downsizing its own business, and about to give away the local market dominance in readership and commerce monopoly regional dailies have long had in the United States.

Within Advance, you hear that its strategy isn’t just on plan — it’s ahead of it. How do we put together what’s really happening and figure out what to make of it?

It’s not easy. Working with sources up and down in Advance cities is one way, gathering lots of partial views. While top editors are willing to talk, Advance’s business leaders are mum. That’s just silly: Newspapers have a special responsibility to the public, one that although further tested by Advance’s new strategy, is universal. Newspapers are citizens of their community — leading ones, we’d hope — and clamming up about changes of this significance is contrary to the values of the trade.

Just as curiously, Advance isn’t sharing much with its peers in the industry. If Advance has really developed the new secret sauce, why not share it with other newspaper publishers nationally and globally? After all, they’re not the competition. Yet Advance’s omerta-light DNA is a sideshow here. What we care about is the Advance strategy and what it means to the readers, to the journalists, and to the business of news going forward.

So let’s look at the updated newsonomics of the Advance strategy, Phase 2, as it rolls out in Portland in October, two months after Cleveland’s Plain Dealer takes the same plunge. Let’s look the strategy — which has a fair amount of smarts built into it — and its challenges, pitfalls and, likely, its Achilles’ heel.

Planning for print decline

As a strategy, think shock therapy and you’d be close. For decades, the Advance papers had been the epitome of corporate paternalism. The no-layoff pledge, generous health benefits, and good salaries all said job-for-life. Advance’s separation of its local digital sites (OregonLive.com in Portland, for instance) from the newsroom — literally 10 blocks away and reporting to corporate, not the publisher or editor — greatly hampered a singular reader focus.

As other companies struggled mightily with the digital transition, the huge staffs of the Advance dailies found themselves too often sitting on the sidelines. Individual editors, with great variability, tried to innovate. Overall, though, Advance dailies were falling behind the peers in trying to meet the digital revolution.

After years of waiting, waiting, and waiting, the company is now in a mad rush to change. When it came time to acknowledge basic truths about newspapering, Advance management reached for the hand grenade rather than the scalpel.

Reading the same tea leaves of print decline as their brethren, they decided that blowing up the enterprise (reassembling it in two pieces) and downsizing their operations, their home delivery, and their community service was the answer.

Their analysis, curiously, parallels that of iconoclast John Paton, the mastermind behind Digital First Media, as Journal Register and now MediaNews properties experience their own more evolutionary revolution. The in-common belief: As print ad revenues show accelerated decline, companies must greatly reduce their legacy costs and concentrate on the digital future. In fact, Paton has somewhat endorsed Advance’s efforts.

While the experiments began in Michigan in 2009, it was the the New Orleans Times-Picayune downsizing that riveted public and industry attention. In fact, 60 Minutes, which had sought the one moment for years to finally talk about the decline of the U.S. press, used the Times-Picayune’s réduction des effectifs as Exhibit A.

Everyone acknowledges that Advance publicly handled the New Orleans changeover as poorly as it could. Marketing. Messaging. Engagement. All subpar.

The T-P seemed to be at odds with the community that went into the streets to demand its very pulp-based existence. The community’s clamor for a seven-day paper went unheeded — until Monday, when the street edition of The Times-Picayune hit pavement, in 60 glorious tab pages. The New Orleans paper had borrowed a page from its northern cousin, the Post-Standard, which cut back home delivery Feb. 1, publishing a print edition even on days that it no longer offered home delivery. The changeover, Phase 2.

Now The Plain Dealer, which just announced a set of layoffs last week, and The Oregonian are following the same five-point model:

  • Massively cut expenses: At The Oregonian, about a sixth of the 650 staffers will lose their jobs. At Syracuse, the number was closer to 30 percent of about 400. Overall, I’ve extrapolated that Advance is aiming for an about 25 percent expense reduction (mainly in staff, printing, and distribution); I’ve been told that is close to the mark.
  • Pixelate the remaining ink-stained wretches: As Oregonian editor Peter Bhatia made (solely, he says) the layoff decisions that eliminated the jobs of about four dozen journalist staffers — about a quarter of the newsroom — he’s been quite clear that digital skills played a part in his decision-making. “How well [people] will work in the new world order” is key, he told me this week. (For the depth of the tumult within The Oregonian, check out Willamette Week’s takeout here.)
  • Separate out the old business from the new: In all its restructured cities, two separate companies have emerged to replace the old print. In Portland, it’s the Oregonian Media Group (yes, the already much-satirized OMG) that will now employ the content and sales people. As I’ve argued over the years, it is content and sales, quite simply, that are the foundation of the new business. The Advance strategy recognizes that and takes it to an operational level. The other new company Advance Central Services Oregon houses “support” of OMG. So it’s mainly made up of the print-oriented parts of the business — production, printing and distribution — along with HR, finance, and technology.
  • Provide seven-day print, but not home delivery: In New Orleans, and at Advance’s two Alabama dailies, the end of seven-day print was cold-turkey. One day: seven days a week of print; after the changeover, only three days. Then, Advance learned something from the Syracuse model. Pushed to continue (at least for a while) the semblance of seven-day print, the Post-Standard found that a by-product of daily print — the durable, seemingly vestigial e-edition — achieved a market purpose. Today in Syracuse, with a daily circulation of about 75,000, about one in ten readers downloads that daily e-edition. E-editions have been around for 15 years; essentially, they’re replicas of the final edition of the printed paper, ones that can be updated during the next day, but often aren’t.

    Why would anyone want to read a static copy of yesterday’s news? Think older readers. They own computers, but are more comfortable with the format of the newspaper they’ve read for decades. This is an interim market, to be sure, but serving it is a subscriber retention must. To publish an e-edition, you need a print edition. If, like the Oregonian, you’re making substantial revenue printing other publishers’ papers, adding a short run of single-copy papers can be done very cheaply. Hence, single copy editions.

    In Portland, there will be four days of home delivery. The Wednesday, Friday, and Sunday editions are clearly full papers. The content emphasis of a Saturday paper — first called a “bonus” in its announcement — is still taking shape, says Bhatia. Consistent with Advance’s marketing and messaging faux pas, it has also named its daily e-edition, “My Digital O,” to the guffaws of many. Talk about service journalism.

    This single-copy story may get more interesting. Whereas Syracuse has stuck to a 16-page edition, with a single ad — to facilitate that e-edition — New Orleans’ TP Street debuted with 60 pages and a good run of ads, adding three to its print team to produce it. Both cities’ papers are delivered to hundreds of newsstands. An ironic question: What would Advance have to charge to restart seven-day home delivery, coming full-circle in its digital-first, cost-cutting exercise?

  • Keep digital access free — at least for now: Most puzzling in Advance’s strategy is its reliance on advertising, which continues to go south for the whole industry — including Advance. As more than 500 dailies in the U.S. move to charging for digital access, including all of Advance’s peer chains, Advance eschews paywalls. Why? Well, given the tight lips, we’re not sure.

    The lack of an All-Access model, I believe, looks like the Achilles heel of the Advance strategy, even if that strategy works in other ways. Why? Advance depends and will depend much more on ad revenue than its peers. Many of those peers believe that reader revenue may reach 50 percent of total revenue within two to five years. They believe that print advertising’s fade looks near-irreversible. Further, they’ve learned that the sharp growth curve upward in digital ad revenue has hit a wall. Some struggle for growth at all; most are in single-digits, well below the 15 percent growth of digital ad revenue overall. Sure, The Oregonian, The Post-Standard, or The Harrisburg Patriot-News could institute a paywall. It would likely, though, yield much less than it could have.

    Getting the order of things right on a paywall is important: Much better to improve the seven-day print product, add usable mobile apps, and then price up, even if you have a mind to cut home delivery. That way, you’ve established a new, higher price — and the monetary value of digital. Instead, Advance maintains what now seems like a nonsensical approach to paid print and free digital, and that bodes ill for holding on to current print subscribers, much less convincing many people to pay much for all-access down the road.

    If other publishers believes half of their 2016 revenue will come from digitally oriented readers, how will Advance newspapers deal with the lack of that revenue? It will have two major choices: find currently unknown large sources of revenue — or keep cutting expenses, including newsroom staff.

Stand back from this audacious strategy — with all its staff-cutting pain, its inducing of reader pain, and the promise of its digital-first, future-is-now thinking — and it’s hard to get past the point of its missing digital reader revenue strategy.

That said, Advance’s more immediate bet is that it can radically reduce its costs and maintain its dominating presence in local news and commerce.

It’s too early to assess the local advertising challenge. It’s a hyper-competitive marketplace, and Advance seems to succeeded in corralling seven-day advertisers into three days. (I’d projected it would hold on to 85 percent of its print advertising revenue in New Orleans; the number appears to be closer to 90 percent.) It still faces, though, a fast-declining (high single digits loss in metro markets) print market. Further, its ability innovate fast enough in the digital ad marketplace is unproven.

As one observer put it to me today, does the new Oregonian plan to make its future on display banner ads? I’m sure execs would answer that no. But its work in newer forms of digital advertising, from content marketing to marketing services to a major video presence, all seem relatively nascent. Is it ready for prime time as a digital-heavy company? Not yet, certainly, and the clock shows two more big Advance dailies going digital-first within 90 days or so. As it fights for digital ad revenue, it faces many competitors from Google and Facebook nationally to lots of local players.

New competition

In news impact, so far, there is mixed evidence.

Observers in both New Orleans and Syracuse tell me it is a crazy-quilt. Yes, with time-stamping on the website, more stories and posts are being pumped out of the newsroom.

The new operations break their share of news, and some second-day stories do a great job of summing up major news events. Sometimes, though — more than they used to — both papers drop the ball on breaking news. Other news players, from NewsChannel 9 WSYR in Syracuse to The Lens and the just-launched Baton Rouge Advocate’s greatly energized New Orleans play (“The New Orleans Advocate”), are competing more consistently. The Advance papers are still the biggest dog in town, but the dog park is now more diverse. Come fall, The Plain Dealer and The Oregonian will wake up to find their traditional alpha status more challenged day by day.

Times-Picayune editor Jim Amoss believes he is already seeing the dividends from the wrenching change the newsroom has seen. His staff is thinking news, not the next day’s paper.

“We’ve had eight months of having the news gatherers and editors separate, physically separate, from the print team and not having to think about the print product. The new rhythms have been inculcated in everybody,” says Amoss. “The total number of people in news went from 181 pre-change to 160 now. We’re still in the process of filling some of those positions. That total includes 91 reporters (including metro area news, sports, entertainment, Baton Rouge, and Washington correspondent). The number of reporters pre-change was roughly the same.”

Digital audience has grown, as we would expect given the print stoppage. Overall pageviews are up 15 percent, and “eyes on content” — meaning views of articles, videos, and photos across the site — are up 35 percent. A significant part of that is huge photo growth, up 150 percent year over year; photos represent 16 percent of the site’s traffic.

With the changeover, editors and ad directors have more direction of their own digital presentations and business. Advance Digital, to whom the separate sites used to report, still provides digital product development, sales strategy, news and information content product development, and centralized technology for the digital products.

Oregonian editor Peter Bhatia echoed Amoss’ newsgathering point to me this week: The Oregonian newsroom today has about 90 reporters and will have about the same in the fall. The newsroom cutting has fallen disproportionately in middle editor and copy editing ranks in all the Advance cities, a strategy well-employed by others over, including the Star Tribune, over the past several years in making cuts.

The big questions, of course, are who those reporters are, how much experience they have and what beats they cover. In any newsroom restructuring, newsroom managers can use the opportunity to make changes they long wanted to make, but found inconvenient. In this great shuffle, some areas, like environmental beat experience, have been wiped out at the Oregonian.

Further digital skills may have trumped journalistic skills in such Sophie’s Choice decision-making. Finally, The Oregonian — as keenly aware of its newsroom dollar budget as of its actual headcount — cut many high-salaried people, as well as some younger staffers, weighing, I’m sure, one more factor: exposure to age discrimination suits, as any employer in such a situation would do.

All of that change means The Oregonian, come fall, will find new areas in which to excel — and will leave its flanks more open to competition. In Portland, there’s a lot of it. Pulitzer Prize-winning Willamette Week provides city-smart, well-established news coverage. Oregon Public Broadcasting has been adding coverage area after coverage area. Add in a strong TV news presence and several niche print players, and The Oregonian may find what its sister papers in New Orleans and Syracuse have found: breaking news and analysis becomes more of a multi-horse race.

It’s not just news-gathering and writing that matters on the web, of course. A digital-first news operation should be the go-to news aggregator for the region; The Oregonian isn’t. It should have the best tablet and smartphone apps — news and entertainment — and its offerings so far are nothing special, open to competition. It could leverage community, user-generated content far better, borrowing a page from its Northwest neighbor, The Seattle Times, but hasn’t moved in that direction.

Broadly, let’s say the strategy — at least parts of it — may be right. Then the question becomes: Is the Oregonian ready to execute on it?

There’s little doubt that most of Advance’s employees — whose work will make or break the strategy — have little confidence in the “the plan.” It’s paternalism gone awry, and the sense of abandonment is clear. The lurch in strategy is offering little comfort, as Advance and its publisher largely keep the staff in the dark about how the new business is going to create successful products and long-term employment.

What Advance has done is buy some time. In radically cutting its cost base, it may have given itself a couple of extra years to get its new strategy right. It will need that time, at least, to work the prodigious to-do list it has handed itself.

Photo by Josh Bancroft used under a Creative Commons license.

June 17 2013

04:00

News Coverage Conveys Strong Momentum for Same-Sex Marriage

News stories focused on support for same-sex marriage outnumbered those opposing it by roughly 5-to-1 in the two months marked by Supreme Court deliberations on the issue, according to the latest study in Pew Research's LGBT in Changing Times series. Did statements of support vary by media sector? Did reactions on Twitter differ from the news media? How was the topic covered in LGBT outlets? The new study offers answers.

read more

June 11 2013

20:39

Lessons from Waze for media

Screenshot 2013-06-11 at 4.30.34 PMNow that I’ve written my commuter’s paean to Waze, allow me to get a bit journowonky now and examine some of the lessons newspapers should learn from the success of the service:

1. Waze built a platform that lets the public share what it knows without the need for gatekeepers or mediators — that is, media. That’s how it keeps content costs at a minimum and scales around the world.

2. Waze does that first by automatically using the technology in our pockets to — gasp! — track us live so it can tell how fast we are going and thus where the traffic jams are. And we happily allow that because of the return we get — freedom from traffic jams and faster routes to where we’re going.

3. Waze does that next by easily enabling commuters to share alerts — traffic, stalled car, traffic-light camera, police, hazard, etc — ahead. It also lets commuters edit each others’ alerts (“that stalled car is gone now”).

4. Waze rewards users who contribute more information to the community — note I said to the community, not to Waze — by giving them recognition and greater access to Waze staff, which only improves Waze’s service more quickly.

5. Waze lets users record their own frequent destinations — work, home, school, and so on — so they can easily navigate there.

6. This means that Google as Waze’s new owner will now reliably know where we live, work, and go to school, shop, and so on. We will happily tell Waze/Google this so we get all of Waze’s and Google’s services. Google will be able to give us more relevant content and advertising. We will in turn get less noise. Everybody happy now?

How could, say, a local newspaper company learn from this?

1. Use platforms that enable your communities to share what they know with each other and without you getting in the way.

2. Add value to that with functionality, help, effort (but not articles).

3. If you knew where users lived and worked and went to school — small data, not big data — you could start by giving them more relevant content from what you already have.

4. You could give them more relevant advertising — “going to the store again? here are some deals for you!” — increasing their value as a customer by leaps and dollars.

5. You could learn where you should spend your resources — “gee, we didn’t know we had a lot of people who worked up there, so perhaps we should start covering that town or even that company.”

When I say that news should be a service and that the news industry should be a relationship business and that we should act as platforms for our users and that small data about people can lead to more relevance and greater value … this is what I mean.

So now go ask Waze how to get there. Oops. Too late. Google got there first. Again.

May 30 2013

11:36

The newsonomics of climbing the ad food chain

The numbers are sobering.

While digital advertising has been growing at a 15 percent pace annually in the United States, the digital ad sales of news companies have largely plateaued, struggling to find any growth year over year. The New York Times Company reported digital ad sales down 4 percent for the 1st quarter, while McClatchy managed a 1.5 percent increase in the first quarter. Most news-based companies are significantly underperforming that 15 percent average — in the low single digits, either positive or negative. Meanwhile, the top five digital ad companies, led by Google, increase their share of ad revenue year after year and soon will hold two-thirds of it.

Why are publishers lagging?

Publishers describe their digital ad woe with these terms: “price compression,” “bargain-basement ad networks,” and “death of the banner ad.” Each describes a world of hyper-competition in digital advertising — a world of almost infinite ad possibility and unyielding downward pricing pressure.

Not long ago, news companies believed that their premium-pricing models would withstand the competitive onslaught. Now they’re retooling, trying to speed their adaptation to the new nature of the digital ad beast.

It’s a matter of survival. For some, all-access circulation revenues are a good positive (pushing overall circ revenue up 5 percent in the U.S. last year). All, though, find themselves running as fast as they can to make up both for the freefall of print ad loss and that overall digital ad pricing downturn. “The ground is falling away under you” is how FT.com managing director Rob Grimshaw describes it.

Let’s look at what some of the leading digital ad innovators among publishers are doing to regroup. Let’s look at the newsonomics of climbing the ad food chain, checking in with two global publishers, The New York Times and the Financial Times, and two regional ones, the Minneapolis Star Tribune and Digital First Media. They provide a snapshot of a world in ever-spinning change.

Their strategies are all fairly similar: employ a range of new techniques that will justify premium prices. Let Facebook, which controls as much as a quarter of all web ad inventory, sell at 80-cent CPM and make money on scale. Publishers know they will never win that game. They want rates *20 to 50* times that, offering increasingly better targeting of their affluent readers.

Climbing the ad food chain is mainly about three things: technology, creativity, and sales relationships. It is also, overall, about differentiation, the roar of a lion in a crowded landscape.

Grimshaw, a former ad guy, says simply: “You’ve got to be doing something unique.”

Let’s look at each of the areas:

Technology

Digital advertising is all about technology in 2013, and you’ll see lots of talk of the ad-tech stack, and who owns it. Google, of course, owns much of it, through its successive AdWords/Doubleclick/AdMob and more creations, acquisitions and integrations. Its stack is so efficient that many publishers feel compelled to use it, though they are wary of getting their businesses tied ever more directly to Google — or the Google “Death Star,” as some critics call it.

For most publishers, Google is the classic frenemy. They work with it when they think the advantages outweigh the hazards, even as top publishers build their own programs. In fact, expect to soon see U.S. news publishers transition their Newspaper Consortium partnership with Yahoo into something intended to be broader, something that allows publishers to opt into and out of the ad programs of multiple portals — not just Yahoo — harnessing the ad tech of the day.

Six-month-old Smart Match is one of the FT’s latest innovations to stay “premium.” In brief, the content of an advertisement is matched, dynamically, to that of an article. The technology: semantic targeting of both article content and the FT’s current “ad library” for the best matches on the fly, as compared to standard keyword targeting.

Advertisers commit specific budgets for specific time periods, and the FT does the matching. The FT says it gets a major lift in ad engagement with the technology, an average of 9x over its average clickthrough. Ten clients are now live in Smart Match’s soft launch period.

Ad effectiveness isn’t a one-time process; breakthroughs like Smart Match require ongoing engagement with marketers, as publishers work with them to figure out what works and what doesn’t — and to tweak constantly. “Ads can’t be a fire-and-forget enterprise” any longer, says Grimshaw.

The FT is setting floors on pricing and better controlling inventory, testing small “private exchanges” with select ad buyers and agencies, working with Google in the U.S. and Rubicon in Europe. Exchanges have caused publishers lots of headaches, as too much of their inventory — mixed and matched with lots of “lower quality” inventory — helped drive down pricing and deflated the meaning of “premium.” So many have pulled back from exchanges in general; a few are starting to harness the exchange concept, but in a members-only approach.

“We are constantly evolving our approach to the programmatic marketplace, and private exchange activity is one part,” says Todd Haskell, the New York Times Co. group vice president for advertising. “We’ve been using private exchanges for a series of single-client buys executed using private exchange technology, and are now exploring several single buyer/multiple brand programs.”

One big notion here: minimize channel conflict, so that a publisher isn’t competing with itself, making its inventory available at variable prices here and there. Private exchanges are proceeding cautiously. Buyers get more flexibility, but within the control of publishers.

Such private exchange testing follows the adoption of RTB (real-time-bidding), which publishers are honing to get better rates for the ad inventory they can’t sell locally. “We moved away from a remnant inventory model a few years ago with the adoption of RTB and actively manage all of the programmatic demand that we see through the ad exchanges,” says Jeff Griffing, the Star Tribune’s chief revenue officer. “As a single-entity, local site publisher, our strategy is to make sure as many bidders/buyers as possible can transact on their audience impressions that we fulfill on our site.”

Similarly, Digital First Media is moving to add new data — including third-party data from traditonal sources like Experian — into its own systems. “As we move more into the programatic world, with our own Trading Desk and all our own inventory in our private exchange, we keep adding data to all that traffic and match it in a way that enhances the ROI for the small and medium advertisers,” says Digital First Ventures managing director Arturo Duran.

Ad tech is also allowing publishers to do things they couldn’t previously do. The Times is using new brand new ad formats to help marketers gain interactivity. One new program will allow for coupon delivery within an app.

The idea of delivering more experiences within experiences — rather than alongside — can be seen in another recent announcement. Twitter Amplify allows advertisers to deliver videos in-stream — part of a slew of ad-friendly moves, well described by Ingrid Lunden at TechCrunch. Among the early partners to sign on: BBC America, Fox, Fuse, and The Weather Channel. The goals here: make ads both more experiential and more lead-generating.

Yield optimization is a term now part of everyone’s vocabulary. Optimization — the better use of data through adjustment of the digital pulleys and levers that adjust what’s offered, at which price points when — has always been a part of the advertising game. Cycle time, and sophistication, though, have markedly moved up. Where the Times used to adjust in 24-month cycles, says Haskell, it now makes significant moves in three-month periods.

There are lots of moving pieces to optimization. The Star Tribune’s chief revenue officer Jeff Griffing describes how his company does it: “The push to premium help us drive our effective yield on pageviews; we’ve established baselines that our different pageviews should meet or exceed and factor in our directly sold campaigns with those indirectly or programmatically filled. We have an optimal formula for how will fill inventory and have set up systems that make sure we’re delivering maximum revenue across all ad units.”

Of course, publishers have long adjusted based on supply and demand. Today, though, the complex external development — various sales partners, through networks, private exchanges and more — requires fine tuning to get the highest possible price for fleeting inventory.

If this all seems like four-dimensional chess, mobile adds a fifth dimension. Haskell recalls the boom in second-screen tablet usage found on election night last November. That development provides a new place for the text-, numbers-, and analysis-driven Times to play in what is usually an immediate TV story. Consequently, it opens up new ways for the Times to exploit the tablet as a second-screen, timely ad vehicle.

The tablet (and mobile, generally) is quickly moving from niche to main play for the Times and others. Of its 43.6 million U.S. unique users in March, 18.3 million arrived via mobile devices, the Times says.

There’s targeting — and then there’s super-targeting. So the Times is selling what Todd Haskell calls “super premium.” It is able to target, through its growing audience database, readers with certain job titles, reading certain sections of content. That kind of targeting drives higher rates, and it’s part of the Times’ plan to move up on the food chain, just as the middle and bottom of that chain widens infinitely.

Creativity

Over the past year, publishers have reawakened to the notion of commercial storytelling. They now see it — a cousin to editorial storytelling — as a core competence, and one that many marketers envy.

“Agencies and many advertisers don’t know how to do it,” says Grimshaw. “There’s a constant need for fresh [marketing] content.”

Enter content marketing, which I recent covered in depth in “The newsonomics of recylcling journalism.” The Star Tribune’s Griffing points to his company’s first big foray into the field, a Kids Health site. Sold to a single sponsor for one year, Children’s Hospital, the new content was produced by Star Tribune staff and is a prototype for products to come. Griffing says the company’s innovations, overall, have pushed year-over-year digital ad growth into the teens.

2013 is the year of content marketing, from New York to D.C. to Minneapolis to Dallas to San Francisco. The creative spark comes from a combination of old-fashioned journalism skills, both editorial and marketing. Sums up Rob Grimshaw: “Publishers have tremendous assets that have never been exploited.”

Now, often, the creation and placement of “native advertising” are inextricably tied. As with the Times’ IdeaLab, the Washington Post’s Brand Connect, and Atlantic Media Strategies, global publishers have asserted their high-end editorial skills, applied to other people’s storytelling, and are packaging that skill with an ad buy. Haskell points out that the creative costs can be built into the ad buy itself, if the buy is big enough. “We’re not looking to make money on the creative,” he says.

That combination of the creative and the buy shows the newness of it all, and the early flux in the content marketing craft. Over time, we’ll likely see a greater cross-title placement of above-average creative, saving on creation costs. How then will the various content marketing works of a Times, an FT, a BuzzFeed, or an Atlantic Media compare? Which will become go-to creative companies, and which will return to the old comfort area of selling placement?

Video creation has also unearthed new creativity among the formerly ink-based wretches. In fact, most companies tell me that video ad demand, at anywhere from $25 to $75 cost per thousand rates (many multiples beyond display ads), is still outstripping supply.

The Star Tribune’s Griffing puts it this way: “This one is simple. We are selling as much video inventory as we have; 1.2 million plays per month, which is significantly more than the next closest competitor, a local TV station. That said, until we’re doing 10M plays a month, revenue for video will be relatively small.”

In a nutshell, that describes the dilemma. The New York Times recently hired Rebecca Howard, late of AOL/HuffPo, to expand its sold-out video inventory.

For Digital First Media, a pioneer in local news video through the Journal Register Company, new video formats offer premium possibilities. It’s going short, and long. “For short format we just closed a deal with Tout.com, and we are deploying their player in all our sites.” DFM journalists will take videos, through Tout (“The newsonomics of leapfrog news video”) and place them quickly on the sites, says Digital First’s Arturo Duran. “Some of those ‘Touts’ are embedded inside the articles. This is following what the consumers are doing, and the tests by WSJ and BBC. They have created snippets of 15 seconds of information that feed their sites with real time information on events. For end users, it’s a faster, easier way to watch it. There is a big play in the mobile arena, specially smartphones, as end users are watching more video in this [short] format than any other.”

Longer-format video is still in the planning stages for DFM, says Duran, pointing to the potential of live events, interviews with personalities, direct chats with readers, and more. It’s noteworthy that despite the success of video advertising, text-based sites still haven’t mastered greater quality production of greater scale and aren’t well-using third-party, “higher quality” video to satisfy ad needs.

Sales relationships

In an age of self-service, spawned by Google’s paid search products, the sales channel is still multi-tiered. Self-service works profoundly for some products, but telesales and in-person, feet-on-the-ground sales forces are finding new life.

Blame complexity. The choices advertisers now have are endless. Top-tier advertisers are served by such specialized teams as the FT’s “strategic sales” unit. The group works matches the complexity of FT’s analytics-fueled approaches to marketing with advertiser needs.

At the other end of the spectrum, the burgeoning marketing services business (“The newsonomics of selling Main Street”) is bringing these new approaches to smaller, local businesses. The Star Tribune’s Jeff Grilling, a major proponent of the marketing services business, has already learned some lessons from his company’s Radius marketing services foray.

“I’m finding more similarities than less, to our traditional sales approach. I’m finding that we are only as good as our sales people and the relationship they create, and that many small business customers have been approached by some sort of digital solutions vendor in the last few years. Make no mistake, there is no easy money in the SMB digital solutions business — it is very competitive and customers have are typically skeptical because of weak solutions they’ve experienced by other vendors in previous years. So if it’s a quick and easy revenue stream that a media company is looking for, I would look at options other than SMB digital solutions. I do still believe, however, that if your intention is to genuinely help local businesses grow, and you have the stomach for investment, strategy, execution, and patience, SMB digital solutions can be a viable product line.”

That tells you how long a haul this digital transition remains, and how many twists and turns even the innovators must endure.

Photo by NJR ZA used under a Creative Commons license.

May 29 2013

21:39

The scariest chart in Mary Meeker’s slide deck for newspapers

I linked earlier to Mary Meeker’s new slide deck. For those who don’t know it, Meeker — formerly of Morgan Stanley, at VC firm Kleiner Perkins since late 2010 — each year produces a curated set of data reflecting what she sees as the major trends in Internet usage and growth. It may be the only slide deck that qualifies as an event unto itself.

Last year’s deck had one slide that I liked to cite when talking about the print advertising prospects for newspapers going forward. It’s this one:

mary-meeker-adshare-2011

The basic idea here is to compare the share of attention in various media to the share of ad spend. (This is U.S. data.) In other words: 43 percent of the time Americans spend consuming media is spent watching television. And 42 percent of the advertising dollars spent in America go towards television advertising. It’s a pretty good balance.

While there’s no ironclad law that ad dollars will always perfectly follow attention, it seems like a pretty good working assumption. And the main takeaways from that slide are (a) that print still gets a wildly disproportionate share of ad spend (25 percent) when compared with time spent (7 percent), and that (b) mobile is in the opposite situation — lots of attention (10 percent) but not many dollars (1 percent).

If you think that, all else equal, ad dollars will tend toward equilibrium with attention, that’s (a) a really scary thought for print — newspapers and magazines both — and (b) a sign that news organizations had better be putting a lot of effort into monetizing mobile.

That was last year’s slide. This is this year’s:

mary-meeker-adshare-2012

This picture isn’t any prettier. Print attention is down one percentage point; print advertising is down two. But the gap between them still yawns. Any time you hear someone be optimistic about the return of print advertising dollars, think about this slide and realize print ad dollars still have a long way to go down.

Meanwhile, mobile is continuing its move in the opposite direction: up 2 percentage points in time spent, and up the same in dollars. Mobile advertising went from a $1.6 billion business to a $4 billion business in a single year. Not much of that went to newspapers.

May 23 2013

16:33

The newsonomics of value exchange and Google Surveys

whittier-daily-news-google-survey-paywall

What happens when a reader hits the paywall?

Only a small percentage slap their foreheads, say “Why didn’t I subscribe earlier?” and pay up. Most go away; some will come back next month when the meter resets. A few will then subscribe; others just go elsewhere.

So what if there were a way to capture some value from those non-subscribing paywall hitters — people who plainly have some affinity for a certain news site but aren’t willing to pay?

Welcome to the emerging world of value exchange. It’s not a new idea; value exchange has been used in the gaming world for a long time. As the Zyngas have figured out, only a small percentage of people will pay to play games. So they’ve long used interactive ads, quizzes, surveys, and more as ways to wring some revenue out of those non-payers.

It’s a variation on the an old saw that says much of life boils down to two things: money and time. It also brings to mind the classic Jack Benny radio routine, “Your Money or Your Life.” If people won’t pay for media with currency, many are willing to trade their time.

Now the idea is arriving at publishers’ doorsteps. It is being tested mainly, but not exclusively, as a paywall alternative. Yet, as we’ll see it, there may be many other innovative uses of time-based payment.

In part, this is part of the digital generational shift we might call “beyond the banner.” Static, smaller-display advertising is increasingly out of favor, with both prices and clickthrough rates moving deeper into the bargain basement. But marketers want to market, readers want to read, and viewers want to watch, so new methods that combine the marketing of brands and offers and the go-button on media consumption are au courant.

That’s where value exchange fits. Publishers are seeing double-digit, $10-$19 CPM rates from value exchange, and that’s more than many average for their online advertising. Annual revenues in the significant six figures are now flowing in to the companies that have gotten in early on the business.

The big player in publisher-oriented value exchange is Google Consumer Surveys (GCS), a year-old brainchild born out of the Google’s 20-percent-free-time-for-employees program (and first written about here at Nieman Lab). GCS now claims more than 200 publisher partners, including the L.A. Times, Bloomberg, and McClatchy properties. It says it has so far exposed some 500 million survey “prompts” to readers.

GCS will soon have more company in the value exchange game. Companies like Berlin-based SponsorPay, which offers interactive ad experiences in exchange for access mainly to games, is beginning to pursue publisher possibilities, both in Europe and the U.S, where half of its current clients are based. SponsorPay emphasizes mobile and social in its business.

L.A.-based SocialVibe, newly headed by hard-charging CEO Joe Marchese, is an ad tech company. It’s mainly oriented to non-newspaper media, especially TV companies.

How does this value exchange exactly work? Typical is the implementation at one smaller paper, the Whittier Daily News in the L.A. area., one of some 35 Digital First Media papers (both MediaNews and Journal Register brands) that have deployed GCS almost since its inception. Upon reading their 10th, and last, free metered article of the month, readers get a choice: buy a sub for 99 cents for the first month — or take a survey. “Do you own a cat?” for instance.

Publishers get a nickel for each completed response. Response rates tend to fall between 10 and 20 percent. “Completion rates” improve by targeting specific questions to specific audiences. The nickels add up.

For publishers, then, we have a new acronym: PAM, Paywall Alternative Monetization.

Consider the innovation a by-product of the paywall revolution. If you haven’t created a barrier to free access, you have less leverage to force wannabe readers to choose the lesser of two choices to proceed with their reading. Now, publishers can say, pay me for access with money — or with time. The time is short — measured in seconds or maybe minutes, depending on a video’s length or a survey’s questions.

What does the consumer get for answering a question? It varies. Respondents can get as little as a single “free” article, or an hour, or a day of access.

These programs can offer side-by-side offers. For instance, someone like a Press+ (which now powers some 380 newspaper sites) may power a subscription offer in one box, and Google Surveys or a SocialVibe can offer up an alternative in a neighboring one.

Digital First Media, long a public skeptic of paywalls, is using value exchange as an adjunct to its paywalls, many of which were deployed before DFM took over management of the MediaNews papers. While it is using it successfully as a paywall alternative, says Digital First Ventures managing director Arturo Duran, it’s also finding a couple of other ways to wring money out of surveys.

At many of its digital properties, including The Denver Post, its photo- and video-heavy Media Center hub offers Google surveys as speed bumps for continued access. Readers perceive value; enough of them are willing to pay with a few seconds of time to keep getting access to visuals. Similarly, Boston.com’s The Big Picture “news stories in photographs” uses GCS.

This approach, putting up a speed bump — in the form of a survey — instead of paywall explores the nuances of differing consumer valuation of differing parts of news sites. The Texas Tribune has offered a similar approach, having used Google surveys on its extensive data section. How often a survey is deployed can be adjusted by the publisher, working with Google, to maximize both revenue and reduce traffic lost. The search here is for the magic sweet spots.

The Christian Science Monitor is also an earlier surveys adopter. “We don’t have a paywall,” says online director David Clark Scott. “So we tried an experimental speed bump.” Those bumps were installed first on a single section, and now have grown, popping up on much of the site. One CSM twist: If you come to the site directly, you won’t see the surveys. If you come via some search, social, or other referrals, you will.

Digital First is also testing survey deployment for a group notoriously hard for the news industry to monetize: international readers. “We can’t sell [ads] in Kenya, Japan, and India,” says Duran. Instead of fetching bottom-of-the-ad-network prices, as low as 25 cents, surveys can return money in the whole dollars. One lesson so far: “It’s a much better experience than an ad,” for many readers, says Duran.

Publishers are also finding other ways to get readers to “pay.” At the Newton (Iowa) Daily News, the paywall also provides these two alternatives: answer a survey question or a share an article (via Twitter, Facebook, or Google+) in exchange for continued passage.

“It wasn’t about market research at all — it was about trading time for content,” says Paul McDonald, head of Google Consumer Surveys. McDonald, who developed the product along with engineer Brett Slatkin, says they tested out what people would most likely be willing to do, in exchange for some good. They tested a million impressions at The Huffington Post and found that question-answering was the most likable activity. Hence, Google Consumer Surveys.

“Most research is stuck in old ways — paper, email, and phone. It’s a stagnant industry, ” McDonald says. The industry, of course, has responded, offering its own critique of GCS’ rapid-fire — surveys can be commissioned and deployed within a day, with complete results, broken down by customized demographics (at an extra cost to survey buyers) within 48 hours — disruption of the market survey space. Still, industry reaction is more than mixed, with the positives of Google’s new technique winning adherents among bigger brands and smaller businesses. It’s a self-service buying technique, borrowing from Google’s flagship AdWords model.

Interestingly, Google itself is using Surveys to obtain consumer insight. Yes, the company that derives more data from our clicks than anyone still finds asking a human being a question can yield unexpected learning — which, of course, can be combined with clickstream analytics. YouTube is among the many GCS deployers.

It’s a new frontier, and one that I think offers a number of curious potentials.

  • At scale, if there is scale to the business, it’s about significant new sources of revenue.
  • As a paywall alternative, it may be a detour that leads back to the road to subscription. If a reader is engaged enough with a news brand over time — kept engaged in part through value exchange — maybe he or she will eventually subscribe. Does a value exchange-using customer have a higher likelihood of subscribing in the future? It’s too early to know, but we may have soon have sufficient data to see.
  • Value exchange could expand the ability to gain customer data. Each time someone trades some time for reading, she or he could be asked for an additional piece of profiling information. Essentially “registered,” that new customer becomes more targetable for subscription offers or advertising.
  • We can start to widen the idea of trading time for access. Remember the idea of the “reverse paywall,” espoused by then-Washington Post managing editor Raju Narisetti and Jeff Jarvis? Spend enough time with a news product, and get rewarded, they proposed. Value exchange begins to structure that kind of relationship, providing value both to readers and publishers. Rough equalization of value would be a painful process, but it may be doable through much experimentation.
  • Let’s combine two things: the rise of mobile traffic and value exchange. Mobile may not be ad-friendly, but customers might be far more willing to watch a video or touch through a quick questionnaire on a cell phone — and that can ring a different key on the digital cash register. “Mobile is already more diversified,” says SponsorPay CEO Andreas Bodczek, explaining that it is moving beyond gaming companies for value exchange and will soon include publishers.
  • GCS is an easily deployable tool for small- and medium-sized businesses. As such, it could be an interesting add-on for publishers’ emerging marketing services businesses (“The newsonomics of selling Main Street”). That’s a line Google could allow newspaper companies to resell, just as many resell Google paid search.

May 21 2013

22:02

Two pieces of information

Two pieces of information that came to my attention today:

Firstly, from a piece of research on aspiring journalists in France:

“Students from the least privileged social sectors are more socially committed and more aware of their civic responsibility: These students want “to reveal cases of corruption, show realities that are unknown to the general public, and to do investigative journalism”.

“The students belonging to disadvantaged social classes value the profession of journalism the most, and have a culture of effort and selflessness, which has been inherited from their families. The force lifting the social elevator to access an intellectual profession like journalism is their constant effort. They consider journalism to be a “useful and noble” profession. They have a more romantic and social view of the profession: they want to be a real communication channel for the village people, the forgotten, and the voiceless … However, these students practice self-censorship by not working in recognised and prestigious media, unlike the students from more privileged social classes who do so because they have greater social capital and contacts in the profession of journalism thanks to their families.”

Secondly, from a number of sources on Twitter:

“Independent.co.uk is offering a rare opportunity to an aspiring young journalist. We’re looking for an exceptionally motivated, intelligent and organised undergraduate with a passion for our brand, the world of news, and student life, to come and gain work experience within our Digital team for three months this summer 2013.

“You must be able to work from Monday 17 June through to 30 August 2013. This is work experience, so it is not a paid opportunity, but your travel and lunch expenses will be covered. You will need to provide a letter from your university, confirming that this work experience placement is beneficial and supports your course.”

Over to you.

22:02

Two pieces of information

Two pieces of information that came to my attention today:

Firstly, from a piece of research on aspiring journalists in France:

“Students from the least privileged social sectors are more socially committed and more aware of their civic responsibility: These students want “to reveal cases of corruption, show realities that are unknown to the general public, and to do investigative journalism”.

“The students belonging to disadvantaged social classes value the profession of journalism the most, and have a culture of effort and selflessness, which has been inherited from their families. The force lifting the social elevator to access an intellectual profession like journalism is their constant effort. They consider journalism to be a “useful and noble” profession. They have a more romantic and social view of the profession: they want to be a real communication channel for the village people, the forgotten, and the voiceless … However, these students practice self-censorship by not working in recognised and prestigious media, unlike the students from more privileged social classes who do so because they have greater social capital and contacts in the profession of journalism thanks to their families.”

Secondly, from a number of sources on Twitter:

“Independent.co.uk is offering a rare opportunity to an aspiring young journalist. We’re looking for an exceptionally motivated, intelligent and organised undergraduate with a passion for our brand, the world of news, and student life, to come and gain work experience within our Digital team for three months this summer 2013.

“You must be able to work from Monday 17 June through to 30 August 2013. This is work experience, so it is not a paid opportunity, but your travel and lunch expenses will be covered. You will need to provide a letter from your university, confirming that this work experience placement is beneficial and supports your course.”

Over to you.

March 29 2013

13:30

September 02 2012

05:16

WAN-IFRA: World media gather in Kyiv

The Post Newspapers Zambia :: WAN-IFRA president Jacob Mathew in a letter to members attending the congress called on the international media community to show its solidarity with the independent press in Ukraine at WAN-IFRA's World Newspaper Congress, World Editors Forum and Info Services Expo 2012, which is being held here from 2 to 5 September. "We are going to Kiev to stand in solidarity with the local independent press, which struggles daily under great pressure, often in isolation," Mathew said.

A report by Bivan Saluseki, www.postzambia.com

Tags: Newspapers

September 01 2012

15:13

Deep generational divide: Public reaction to fewer print days mixed

The Morning Call :: Older readers of The Patriot-News are more likely to be put off by cutbacks as the Harrisburg paper pushes digital news.

Interviews with readers - A report by John Micek, www.mcall.com

Tags: Newspapers

August 31 2012

05:28

Twin threats peril preprint newspaper ads

Newsosaur :: Preprint advertising, a long-reliable source of business that represents a quarter of the remaining revenue for the struggling newspaper industry, is at greater risk than ever before, owing to a perfect storm of challenges.

A report by Alan D. Mutter, newsosaur.blogspot.de

HT: Steve Outing, here:

Newspaper pre-print ads endangered, says Alan Mutter. Final straw for some newspapers? newsosaur.blogspot.com/2012/08/twin-t… #tkclass

— Steve Outing (@steveouting) August 31, 2012

August 30 2012

15:02

The newsonomics of leapfrog news video

Our political conventions reminds us that this is not the summer of love. But it may be the season we’ll remember as the summer of video.

Certainly, video’s — news video’s — growth has been noteworthy for awhile. But now there’s a bursting of new news video forms, a hothouse of experimentation that is both refreshing and intriguing. The blossoming has implications far and wide, not just for “news,” but for tech companies like Facebook and television brands from Ellen to Piers to The View. Within it, we see the capability of non-TV companies to leapfrog the TV people.

Just Monday, both The Wall Street Journal (“The Wall Street Journal wants its reporters filing microvideo updates for its new WorldStream”) and The New York Times made video announcements. A couple of weeks ago, the ambitious Huffington Post Live launched, hiring the almost unbelievable number of 104 staffers. In these three forays, and in the thinking in and around them, we see the boundaries of old media being slowly broken. We’re on the edge, finally, of new ways to both create and present news — and how to talk about the news.

It’s funny: “Video,” as a term, as a category, barely defines what we’re seeing. All video means is moving pictures, and we’ve had those since George Méliès (as Martin Scorcese reinterpreted in Hugo). We’ve known broadcast news and then cable news, witnessed their triumphs and now the declines of both. Because of twin technologies — all the iGadgets reintroducing us to the world as we know it and the behind-the-scenes digital pipes making content creation and distribution increasingly seamless — we’re seeing what creative people can do with moving pictures.

While this week’s Journal’s announcement focused on WorldStream, that semi-raw feed (all staff contributions are okayed one-by-one for public view) is but one of the full handful of Journal experiments with video.

Watch video now better embedded into stories (as the Times also has done with QuickLinks). Get appointment programs on WSJ Live (“The newsonomics of WSJ Live”). Watch on demand, in a variety of formats. Go directly to a video page, where all of the video output is categorized. And now, WorldStream, that rawish feed the Journal is doing, because it can — and because such video becomes great bait for the social web. Pick up the url, tweet it, and the Journal has happened on a social video strategy that is curiously akin to Upworthy’s.

It’s a multi-point access world for video producers. The Times will tell you that its viewing is roughly divided in thirds among its video center, its homepage video player and embedded-within-stories video. The Journal says more than half its views are now coming from embedded videos, with less than five percent of its views come from its video page. It makes sense that “video center” usage will decrease over time; these are transitional pages. Convergence is now becoming real, and we expect to see the content, text, voice, and pictures delivered in context. Finally. We don’t go to a place on sites called “Words.”

What’s most important about we’re seeing flickering before our eyes? Try these, as we look at the newsonomics of leapfrog news video.

  • It’s about money. Video advertising rates are holding up far better than display-around-text rates. “Give me inventory” is a cry heard from the salespeople, who find agencies and top advertisers’ pre-roll appetites nowhere near satiated. For top premium brands, $45-60 CPM (cost per thousand views) are still available, as display rates fetch as little as a tenth and as much as one-half of those numbers. In addition, companies are selling video packages and sponsored tile ads in addition to pre-rolls to sweeten their take. So production of video makes financial sense — even as news companies cut back, lay off, and pinch, pinch, pinch. The smarter companies are investing in video — staffers, training, technologies — even as they make those cuts, while other companies find themselves just stuck. Video is the second-fastest growing ad category in the U.S., according to IAB, up 29 percent year-over-year. It will be worth about $2 billion this year.
  • It’s about platforms. The Journal’s Alan Murray, who heads digital news efforts, says the company’s video traffic has doubled in six months. Why? It’s not mainly because of more use on Journal platforms, even though it’s been an innovator on the tablet. Most of that growth comes from the deals the Journal has done with an astonishing 26 “platforms.” They range from the ubiquitous iPad and Kindle to lesser known 5Min and LiveStation.1 By way of comparison, The New York Times is currently using three (Hulu, Google TV, YouTube).
  • It’s about technologies. The Times and the Washington Post have been using Google + Hangout, to facilitate conversation, and we’ve seen the fruits this week at the Republican Convention. As well-described by The Daily Beast’s Lauren Ashburn, Google Hangouts are a major, disruptive force; “no longer needed are satellite trucks or underground cables to beam talking heads to people’s living rooms. A simple Internet connection and a camera are rendering expensive gadgets obsolete.” The Journal is touting Tout, a Silicon Valley start-up that has taken much of the “friction” out of the business of video production. “Make it drop dead simple,” CEO Michael Downing says is his goal. That means taking the background tasks of uploading smartphone video from the field, “transcoding” it and then translating it to work in all the various formats (devices, screen sizes, operating sizes). That removes the work from media companies, and lets them focus on content and audience. In addition to the Journal, broadcasters including CNN, CBS, and ESPN have become customers.
  • It’s apparently not about appointment TV. HuffPo’s Live is the most interesting here. While it has 10 telegenic anchor/producer/hosts, those hosts don’t have standard daily program times. Segments will last between 12 and 35 minutes (most average 20-25), HuffPost Live president Roy Sekoff told me this week. Yet, they are fluid, with segment length adjustable on the fly. Readers pick topics — before, during, and after “Live” — from a reader-activated conveyor belt at the top of the page. “It’s the Internet,” says Sekoff pointedly, meaning it’s a flow, not a TV Guide-like grid in how readers/viewers use it. The Journal agrees. Even with on-the-hour blocks of News Hub programs, the majority of its viewing is on demand. Even for HuffPo, all of that live programming is then chunked into segments, and Sekoff estimates that he’ll have about 10,000 of them archived and ready for long-tail viewing by year’s end. We want what we want when we want it — and expect it to be there. Thus, findability becomes the issue, and the multiple points of access now being offered are very much a live test of consumer behavior and want.
  • It’s about simplicity. The Times’ announcement basically said this: You’ve proven you like video. Now we’re cleaning it up and making it more pleasurable to watch and easier to find. In the cleanup, the Times moved to 11 “navigation items” from 25, says Peter Anderson, director of video product. We see that translation in more uniform positioning of video panels on NYTimes.com pages, and a more elegant 16 × 9 video player format, replacing the oh-so-20th century 4 × 3.
  • It’s about the news — and talk about the news. In the approaches of the Times and the Journal on the one hand, and of HuffPo on the other, we see two quite different philosophies and strategies, but ones that may find meeting points. Both the Journal and the Times see their reporters as the foundation of the video process; Murray calls Dow Jones’ 2,000 journalists “the core asset.” So both are putting cameras into the hands of journalists, or enabling them to better use smartphones, thereby creating more impactful, multi-dimensional, multi-platform journalism. HuffPo, from its early days of being mainly a curator/aggregator, has had its pulse on what its progressive audience is wondering and talking about. Those topics, mostly off the news (Marissa Mayer’s pregnancy, veterans and poverty), are the ones front and center in its Live pages. Some, of course, derive from its journalists’ work, and now staffers like Howard Fineman are suggesting video segments as they prepare stories. By and large, though, the talk-about-news drives the 12-hours-a-day site (5 days a week), with actual news supplementing. Sekoff says some 1,300 HuffPo community members have “raised their hands” and been featured as talking contributors on its segments. They’re unpolished and a far more diverse (for all the good and bad that implies) lot than we see among the too familiar faces of cable TV. For the Journal and the Times, traditional stories drive the video, and then, as Peter Anderson describes it, “The New York Times starts the conversation.” (Here, the Times brings civilians more prominently into its Opinion pages.) How these somewhat opposite approaches come together will be something to watch.

Maybe, most intriguingly, this video revolution may be morphing into a social revolution.

Watch a few of the HuffPo Live segments. Call them semi-slick. The technology works. The production values are okay, even if blogger/contributors faces seem a bit low-def, as TV itself moves moves from HD to Ultra. Some raise interesting, unorthodox issues and views; some are deadly boring. They are not, though, the lookalike programming of traditional news outlets. In their socialness, they cross lines.

Here’s what I find fascinating as I watch those, and smaller steps toward engagement taken by the Times, Journal, and others. As we all watch more video, where will the minutes come from? They may come from other news, text news. They may also come from Facebook. Compare HuffPo Live to Facebook and we see lots of social/sharing commonalities — but in picture form. Discussions — less in linear words than with in-motion video. They may come from morning talk shows like “Ellen” or “The View,” or compete with The Young Turks.The minutes will come from somewhere, as these technologies are more universally adopted and the world of competition only gets more complicated. This is the world in which news companies now compete.

For the news industry specifically, we see that legacy lines are written in disappearing ink, as the Journal, for instance, out-innovates ABC. One dirty little secret of broadcasting is being revealed, as technologies like Google+ Hangouts even the playing field for the print guys: it’s a game of numbers. The number of journalists in newspaper newsrooms still far outnumber those in broadcast ones. In addition, traditional TV has demanded many staffers to do the technical work of creating the broadcast. So, newspapers — if they can rapidly connect their workforces with the new technologies — have a chance to do what seems illogical: leapfrog broadcast and outflank them in the move to fully available, multi-platform news video.

Notes
  1. The full list: YouTube, iPad, iPhone, Apple TV, Google TV, Boxee, Roku, Hulu, Ustream, DailyMotion, Panasonic Internet-connected TVs, Samsung Internet-connected TVs, Sony Internet-connected TVs, Vizio Internet-connect TVs, Yahoo Internet-connected TVs, Windows Phone, Xbox (announced, not yet launched), Kindle Fire, Google Nexus 7, Pulse, 5Min, TouchTV, Flud, WatchUp, LiveStation, Tout, Etisalat.

August 23 2012

15:46

The newsonomics of a New York Times + CNN combination

Mark Thompson faces a defining and daunting challenge: Lead The New York Times on that thin tightrope to a new stability, one tethered to the digital world. We’ve seen lots of good ideas already freely offered to the incoming NYT CEO. Let me offer a new one.

Let’s imagine what a New York Times/CNN combination would look like — and what it could do for both companies. Combination? Yes, a purposely squishy word. I’m not talking about a merger of the companies. I’m thinking about what each company offers the other strategically, at this point in media history, and how each could see its business advanced. We’ll leave the messy details of corporate development, of partnership, of joint venture, for a later day.

So why put these two entities closer together? Two big reasons provide some logic.

First, the marketplace is pushing companies toward convergence. The worlds of completely separate TV (video), newspapers/magazines (text), and radio (audio) have simply been overwhelmed by the reality of consumption devices that bring all three together for us — the iPad being the current crown of creation. But the legacy roots of each medium has made it really tough to either (re-)build truly multi-platform companies or forge newspaper/TV alliances (Tampa, Chicago, etc.) that work. Logic compels greater multi-platform creation; inevitably that will mean new combinations of legacy companies, even as legacy companies try to remake themselves internally.

Second, both CNN and The New York Times fill in numerous of the other’s weaknesses. At this digital moment when “mobile” and the tablet are tossing old habits up in the air and forcing consumers to re-form new ones, it’s a great time for both the Times and CNN to double down on their native advantages, and make their products no-brainer top-three places to go in the news everywhere-and-anywhere world.

For CNN, a partnership could be part of a strategy to reclaim its mojo after seeing TV ratings drop to 21-year lows. For the Times, having turned small corners in the last year, it’s a way to increase its sense of momentum, separating itself from the pack of other top news sources.

The timing is near-perfect. Mark Thompson, after all, comes to the Times as a broadcaster. With a 33-year TV career, he knows TV, and he knows the Times is just beginning to escape its print roots. Scaling the wall of video/TV, where huge revenues still exist, is one of his daunting challenges. He is one of the few people who could have taken the job who brings both a broadcast background and one of airtight news credibility, given the BBC’s standards. He is the perfect person to imagine a strong video/TV presence for the next-gen Times. The Times is looking currently at what a major investment in video would look like; how does it climb the incremental mountain with the next generations of TimesCasts?

CNN is searching for recently resigned president Jim Walton’s successor. While the 32-year-old network’s staff debates the realities and fantasies, and CNN-directed truths, of Aaron Sorkin’s “The Newsroom,” the once top-of-the-heap TV news source faces a fundamental identity crisis and big strategic moment. It has wavered along hard/soft news lines and in programming choices, spun into a dither by Fox News’ Roger Ailes and MSNBC’s Phil Griffin.

Now the next CNN president must renew brand purpose and internal pride. Focus on news — especially adding to its forte of who, what, and where the why and how aspects of news as it has been edging into (The Freedom Project, an award-winning series on human trafficking, and Saving Aesha, for example) — or play with more entertainment/personality positioning? Worry about the Foxes and the MSNBCs, or grab the moment of the greatest potential global news reach technology and literacy has ever made possible?

There are smaller plays for both, to be sure. CNN’s been around the block with CBS News, talking news merger, but those talks foundered on issues of control and culture. The Times has tried all manner of tests, from longer-standing ones with Google to newer ones with Flipboard.

What both need is a game changer: a move that will simultaneously do three things:

  • Rocket it ahead of the news competition, as consumers decide those handful of must-go-to news sources they’ll visit each day, across their many screens.
  • Add a large new dimension of content to its current brand. While both the Times and CNN have lots of content, both — as is the case of all news companies — can use more to satisfy insatiable digital reading appetites.
  • Create a strong, new revenue line, as both see traditional lines weakened by market change.

Before I get to how a game-changer may work, let’s try this as a simplified chart to compare the two companies:

The New York Times CNN Brand Ascendant; mobile apps have now separated NYT from other “newspapers”; digital circulation has newly marked NYT as innovator Ubiquitous in U.S. and worldwide; its image — what it stands for — is unclear Top leadership CEO Mark Thompson begins in November Search on for replacement for President Jim Walton Audience Top-five web site; newspaper circulation flat Top-three web site; TV ratings at 21-year low Revenue Reader revenue, newly revived and growing, with all-access digital circulation programs; online advertising under pricing pressure, and by ad marketplace change; print advertising in 5-10 percent annual decline. Net loss of $39.7 million (2011) Cable/satellite fees, increasingly threatened by low ratings and the potential unbundling of forced consumer packages; advertising, on air and online, both under pricing pressure by ad marketplace change. Profit of $600 million (est. 2012) Global Times moving that way, with ~10 percent of paying digital-only customers outside U.S.; new China site By definition, global and recognized globally. Great worldwide distribution and name recognition TV culture/experience Experimenting, unevenly, with “video” It’s a TV company Text culture/experience It’s a newspaper company Experimenting, unevenly, with “text” Content Deep, authoritative, agenda-setting; fairly good breadth, but the deep web is exposing its areas of weakness Immediate, wide, truly global, largely authoritative; good breadth, and worldwide, though subpar to AP Access to TV platforms Minimal Ubiquitous Revenue sources Readers, advertisers Cable/satellite cos., advertisers Aggregator chops Little developed; a powerful potential for adding breadth to its brand Little developed, but it bought top-three tablet aggregator Zite Community-generated content Fledgling efforts have gone awry CNN’s iReport is a prototype for user-generated reporting; if those CNN/Mashable talks work their way to completion, CNN would have a leg up on social media journalism Wire Longstanding NYT wire and syndicate are mature Newer CNN wire fighting for place in market

There’s clearly a complementarity here that makes sense — on paper. How might it work in reality?

It’s easiest to see how the two might exploit two green fields, areas so new neither has as much ego or business invested.

If we look at the coming five screens of access, it is the emerging two — connected TV and connected car — that are most virgin, while laptop/desktop, smartphone and tablet are already deeply competitive. Both connected TV and connected car offer many new product opportunities and access to new revenue. A partnership could focus on those two, as the least threatening way to combine smarts and assets.

More immediately, we could see a new focus on tablet and smartphone products. For starters:

  • Next-generation news video products for the tablet: The Wall Street Journal has burst out of its word box this year with a major emphasis on video. It has just begun to leverage its deep journalistic expertise, though the presentation is still more talking head than “TV.” Combining the beat expertise of New York Times journalists with CNN TV smarts — and its own formidable behind-the-scenes journalistic workforce — offers breakout potential for tablet video news. CNN’s journalist workforce numbers is a hard number to compare to the Times’ 1,150 journalists; how do you count those who provide the technology to present the journalism? Yet CNN’s journalists often get short shrift in the press, which favors endless Wolf Blitzer and Anderson Cooper stories. Here’s one area where print is superior: In the breadth of The New York Times’ Sunday edition, for instance, you can see the great stretch of its journalistic talent. With the flat screen of the TV or the computer or tablet, you can’t see the rich CNN reporting behind its facade.
  • The leading global news product: Everyone from Bloomberg to the FT and BBC and from the Journal to the Times and the Guardian, is now moving on the vast global opportunity (English-speaking and otherwise). No longer must the Brits be satisfied with their one percent of the world market, or Americans with five percent. Here both CNN and the Times are among the top contenders. With 32 journalists outside the U.S. and 24 foreign bureaus, the Times has maintained a global presence, when most of its print brethren have severely cut back. CNN’s 33 foreign bureaus and vast carriage across the world lay continued claim to its birthright. If you are overseas and watch CNN International, it’s a night-and-day different product than CNN U.S.; adding the Times to the mix would lengthen its international lead.
  • Reinventing the “wire”: CNN’s wire, launched in 2009, marked its emergence from AP. The goal: compete with AP, leveraging its substantial journalistic investment with syndication, selling the same content to many, many others. That wire, like many competitors to AP and Reuters, has found tough going against the incumbents. Meanwhile, The New York Times’ wire and syndicate face the same struggles of most in that niche wire business: maturity at best, holding on to as much of the old, dwindling print world as they can. A combined “wire,” focusing on those next-generation syndicatable digital/mobile products, could harvest joint assets well.

Then, there’s the web in general and TV, the former where both engage in head-to-head combat and the latter in which CNN, though struggling, is the incumbent and NYT the wannabe. The hurdles to cooperation, there, are highest, though the payoff may be the greatest.

For CNN, the questions would be: How could TV people harness the added depth of The New York Times’ report and intelligence? How could it marry its video and text in new state-of-the-art ways?

While CNN is now much more profitable than the Times, the fragmentation and disruption of TV business models is happening quickly (see “The newsonomics of breakthrough digital TV, from Aereo to Dyle and MundoFox to Google Fiber TV”). A Times partnership could help CNN find ways to create new news and information products that consumers will pay for, as the Times has now nimbly done, with its digital circulation initiative.

For The New York Times, the questions would be: How could text-based journalists move into the next generation of multimedia storytelling, bringing over their craft and standards, but learning new skills? How could video be graft onto the Times DNA, make the Times the company it needs to be in the next age?

How could the Times tap into the revenue stream of TV access, either through programming that cable and satellite companies would pay then for, as they pay Time Warner/CNN? It isn’t as if Times reporters haven’t been well-used on broadcast. NPR does a masterful job of that, but the Times gets no revenue out of the relationship. That’s the key: wringing TV money out of a deal.

For both, the tasty intangible: Would a combination of two of the best brands in news world reinforce and heighten each side’s? Of course, there are lots of reasons why it wouldn’t, couldn’t or shouldn’t work. Yet, it if did, it would give real meaning to convergence — finally — as the old demarcations of print and TV fast erode.

It’s easy to tick off the numerous factors that make it difficult: control, valuation and culture top the list. It’s at least, though, a whiteboard exercise that allocates strengths and deficits, opportunities and challenges over a five-year time span. That’s the level of thinking, and timespan, that Mark Thompson will need to bring to the Times, as will CNN’s new chief when she or he arrives in Atlanta.

August 21 2012

16:17

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.

August 02 2012

15:04

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.

13:34

The responsibilities and opportunities of the platform

Technology companies and news organizations have a lot to learn from each other about the responsibilities of running platforms.

I have been arguing that news organizations should reimagine and rebuild themselves as platforms for their communities, enabling people to share what they know and adding journalistic value to that. As such, they should study technology companies.

But technology companies also need to learn lessons from news organizations about the perils of violating trust and the need to establish principles to work by. That, of course, is a topic of conversation these days thanks to Twitter’s favoring a sponsor when it killed journalist Guy Adams’ account (later reinstated under pressure) and its abandonment of the developers who made Twitter what it is today.

One question that hangs over this discussion is advertising and whether it is possible to maintain trust when taking sponsors’ dollars — see efforts to start app.net as a user-supported Twitter; see Seth Godin suggesting just that; see, also, discussion about ad-supported NBC ill-serving Olympics fans vs. the viewer-support BBC super-serving them. I have not given up on advertising support because we can’t afford do; without it, my business, news, would implode and we’d all end up with less and more expensive media and services. So we’d better hope companies getting advertiser support learn how to maintain their integrity.

In the discussion on Twitter about Twitter’s failings in the Adams affair, Anil Dash suggested drafting the policy Twitter should adapt. Even I wouldn’t be so presumptuous. But I would like to see a discussion — not just for technology companies but also for media companies and governments and universities of institutions in many shapes — of the responsibilities that come with providing a platform.

For the opportunities and benefits of building that platform are many: Your users will distribute you. Developers will build and improve you. You can reach critical mass quickly and inexpensively. As vertically integrated firms are replaced by ecosystems — platforms, entrepreneurial endeavors, and networks — huge value falls to the platforms. It’s worthwhile being a platform.

But if you lose trust, you lose users, and you lose everything. So that leads to a first principle:

Users come first. A platform without users is nothing. That is why was wrong for Twitter to put a sponsor ahead of users. That is why Twitter is right to fight efforts to hand over data about users to government. That is why newspapers built church/state walls to try to protect their integrity against accusations of sponsor influence. That is why Yahoo was wrong to hand over an email user to Chinese authorities; who in China would ever use it again? Screw your users, screw yourself.

I believe the true mark of a platform is that users take it over and use it in ways the creators never imagined. Twitter didn’t know it would become a platform for communication and news. Craigslist wasn’t designed for disaster relief. That leads to another principle:

A platform is defined by its users. In other words: Hand over control to your users. Give them power. Design in flexibility. That’s not easy for companies to do.

But, of course, it’s not just users who make a platform what it is. It’s developers and other collaborators. In the case of Twitter, developers created the applications that let us use it on our phones and desktops — until Twitter decided it would rather control that. If I were a developer [oh, if only] I’d be gun-shy about building atop such a platform now. Similarly, if a news organization becomes a platform for its community to share information and for others to build atop it, then it has to keep in sight their interests and protect them. So:

Platforms collaborate. Platforms have APIs. They reveal the keys to the kingdom so others can work with them and atop them. Are they open-source? Not necessarily. Though making its underlying platform open is what made WordPress such a success.

In the discussion about Adams and Twitter, some said that Twitter is a business and thus cannot be a platform for free speech. I disagree. It is a platform for speech. And if that speech is not free, then it’s no platform at all. Speech is its business.

When a platform is a business, it becomes all the more important for it to subscribe to principles so it can be relied upon. Of course, the platform needs to make money. It needs to control certain aspects of its product and business. I don’t think anyone would argue with that. But if it keeps shifting that business so users and collaborators feel at risk, then in the long-run, it won’t work as a business.

Platforms need principles.

All this can, of course, be summed up in a single, simple principle: Don’t be evil. That’s why Google has that principle: because it’s good business; because if it is evil, it’s users — we — can call it out quickly and loudly and desert it. As Umair Haque says, when your users can talk about you, the cost of doing evil rises.

There are other behaviors of platforms that aren’t so much principles as virtues.

A good platform is transparent. Black boxes breed distrust.

A good platform enables portability. Knowing I can take my stuff and leave reduces the risk of staying.

A good platform is reliable. Oh, that.

What else?

July 26 2012

14:00

The newsonomics of Amazon vs. Main Street

Order it on Amazon. Then run to your front door and have it handed to you. The news of Amazon’s same-day delivery blitzkrieg — first explained in depth in an excellent Financial Times piece — elicited a near-maniacal laugh among newspaper companies: What next?

Of course, the impact of Amazon’s move extends well beyond the further toll it may take on the ever-shrinking newspaper business — but that crater-creating possibility may well be the biggest news of a big news summer. Advertising — in Amazon-contested markets — will never be the same.

We’ve known that newspaper advertising revenues are in a deep, downward spiral — higher single digits this year, with early budget guesses showing the same for 2013. In the U.S., overall ad revenues are half what they were five years ago, down $25 billion a year from 2007.

Here’s what most hurts most about the new Amazon threat: It aims directly at the one category of newspaper advertising that has fared the best, retail.

Classifieds has decimated by interactive databases. National has migrated strongly digital. Retail, which made up of just 47 percent of newspaper ad revenues 10 years ago, is now up to 57 percent of newspaper totals. Now that advertising, albeit in just a few markets initially, will have to compete with Amazon-forced marketplace change.

Amazon, of course, isn’t targeting newspaper revenues. It’s targeting customers — selling more to current ones and engaging new ones. Further hits to newspaper revenue are just another unintended consequence of accelerating disruption of all business as usual.

The same-day push is built on strategies long in the making. Amazon knew its day of reckoning on its sales tax exemption would come. Like all big, smart companies with legions of lawyers and lobbyists, it delayed the inevitable, and with each delay, built market strength and cash.

Now the jig is finally up. Combine revenue-starved states and the late-arriving sense that Internet business no longer needs a societal jumpstart, and Amazon is being forced to charge sales taxes, though it negotiated their arrival with great agility. The exemption allowed Amazon an incredible price advantage, and many of us have been glad to take advantage of it. Not having to charge customers four to nine percent in sales in taxes (which land-based merchants couldn’t avoid) allowed it to provide lower prices.

Amazon knew this day would come. What the market didn’t know was that sales tax settlements would lead to Amazon quickly flipping its model. It had paid sales taxes in a few states, forced to do that in places it had warehouses. So it placed those warehouses close enough to customers (Nevada for Californians, for instance) to make two-day shipping a snap. Now, with the tax changes underway (it’s estimated that Amazon will be on the hook for sales taxes for half the U.S. population) , it no longer needs to selectively place vast warehouses in only a few states — it can place them everywhere and much closer to customers.

Today, if you’re in Baltimore, Boston, Chicago, Indianapolis, New York City, Philly, Seattle or D.C. , you can place an order and it the same day through Local Express Delivery. That becomes Amazon’s base program. It is now building out that simple concept with 7-Eleven distribution lockers and much more, city by dense city. Behind that new delivery service stands an array of back-end technologies, analytics, and logistics that far surpass what anyone else possesses. Even now, to get a sense, of what’s behind the evolving system, just check out the left-hand navigation on this page.

The program builds on the smarts of Amazon Prime, whereby 10 million Amazon customers pay $79 a year and get “free” two-day shipping. Same-day is just the next logical step, both for delivery of goods and deepening of customer relationships and selling opportunities — which, remember, increasingly include media (“The newsonomics of Amazon’s Prime/Subscription Moves”).

The unintended impacts of Amazon’s same-day push will be as intriguing as the ones we can foresee. Just for starters:

  • Will local advertising expand or retract? Retailing will be more intensely competitive, and anti-Amazon appeals need to be transmitted somehow, via smartphone, websites, print, community events, and more. Was SoLoMo just a dream, or is it now a counter-strategy? (Newspaper companies efforts to become regional ad agencies, ironically, may get a boost from the Amazon move.) Preprints, which may total as much as 40 percent of the $11 billion or so U.S. dailies take in as “retail,” will be a prime front here, one way or the other. While retail advertising impacts could be substantial, brand advertising may well become more important, as online buyers decide among brands in different ways.
  • Will newspapers be forced to accept still another death blow to their fortunes, as retail ads are further disrupted? The impact on print is up in the air. Further, Find ‘n Save, a fledgling newspaper-consortium-owned Amazon competitor finds itself even more outmatched as same-day delivery further trumps one of its key differentiations.
  • Will Google, with all its eggs in the ad basket, find unexpected competition, as Amazon further disintermediates advertising itself, becoming the first and only stop between “I want this” and delivery of the good? Will advertising itself be replaced to larger degree as manufacturers are forced to differentiate themselves within Amazon, maybe moving marketing spend there?
  • What will cityscapes and shopping centers of all kinds look like if Amazon’s plans succeed? Imagine a cityscape without big box stores, Walmart, Best Buy, and Bed Bath & Beyond? Impossible, you say? How about one without Borders, Tower Records, and Blockbuster Video, all of which have left hulking holes in the American suburban landscape. Nothing is safe from digital disruption; nothing, holy or commercial, is sacred. Optimistically, a couple of dozen communities are creating next-generation uses for these eyesores, as the big box reuse movement (good rundown and reuse wiki via Slate) has been unexpectedly spawned. Will big boxes, the spirit-sapping, wallet-supporting icons of our age of disenchantment, take the brunt of Amazon’s assault, or will it be smaller stores?
  • What might it do to employment? Will CVS checkers be replaced by more truck drivers and order fillers? Or is the future simply more robotic, as Amazon’s purchase of warehouse-product-picking Kiva Systems changes the supply chain? No, it’s not sci-fi, though it appears to be the year of the “robots,” as computers do everything from local “reporting” (Journatic) to filling our orders for toothpaste and printer ink.

Let’s take a first look at the competition, as we look at the newsonomics of Amazon vs. Main Street.

In one corner, there’s Amazon. Its strengths:

  • Quick findability, in your living room.
  • Delivery to your door, or near it, now “same day.”
  • Wide selection, often more than is available locally (but sometimes less).
  • Wide-ranging and increasingly deep user reviews.
  • Guaranteed satisfaction or easy return.

In the other corner, it’s Main Street. Its appeals:

  • Buy it now. Pick it up. See, buy, use. Ad veteran Randy Novak says that more than 80 percent of retail sales now come from areas within 15 minutes of a stores’ location.
  • The visual and tactile shopping experience; NAA’s Randy Bennett points to retailers’ role as “showcasers.” Then, there’s shopping as entertainment, plainly as much heaven for some as hell for others.
  • Habit.
  • Getting out of the house once in a while.
  • Support of the local guy.

Proximity here is fascinating. The local edge has long been proximity, that 15-minutes-away appeal. Now, Amazon counters that with 12 inches away (your nearest screen) and some number of hours, as Americans do their new arithmetic on buying.

Beyond proximity, there’s price. Yes, Amazon is acknowledging that the 20-year-long sales tax furlough it got is finally ending. It knows it will have to add that 4-9 percent of sales tax to its prices across the country within several years. So where will that tacked-on pricing put it?

Let’s remember that its world-class algorithms track competitors’ pricing in real time. After all, that’s been — often to Amazon investors’ chagrin — CEO Jeff Bezos’ strategy from the beginning: sacrifice profit margin for market share and growth. Its last quarterly report showed 1 percent net profit — on $13 billion of sales. Expect it to match or beat on many items, absorbing low margins, and maybe loss leaders to win market share from Main Street.

How much room, with tight margins, will Amazon have to maneuver? That could tell the tale here. Squeezing margins — lowering prices — will have one at least near-term consumer impact. If you’re selling the same vitamins, shoes, or dog food as Amazon, you’ll have to lower some prices to compete. The cautionary tales of bookstores and music stores, and now Best Buy, show that consumers don’t find a lot of sense in paying more locally than through the web.

As we consider price, the shipping fee comes clearly into view. With Prime, the innovation that paved this road, members don’t worry about each shipping cost. Pay once — that $79 annual fee that’s been remarkably stable — you get shipping “free.” Look for Amazon to embed free same-day shipping into another similar program, Prime Same-Day, for $99 or $139, or include it for anyone spending more than $500 a year, for example; we believe that Prime members may average $1,500 in annual purchases already. As with Prime and with Amazon overall, again, build market share for the long term, even at the risks of low profitability or even loss.

There’s a lot of nuance we’ll miss in the first passes on the topic, of which Farhad Manjoo had the best. This commercial initiative is aimed of course at goods, not services. It’s the goods-selling competitive and geographic landscape — think Amazon categories like drugs, clothes, toys, and electronics — that could be transformed. Services, like those that we use today — health care, restaurants, fitness centers, and, of course, coffee shops — would be unaffected. In an ideal world, we may have less time for mundane shopping and more for more fruitful activity. Or we may have big empty buildings, fewer community jobs, and less socializing. And, maybe people will have more time to read. We’ll probably see all these things happening at once.

Amazon, of course, just wants to make money. Yet, it has already, in part, disintermediated shopping itself. Expect it to be extend its Subscribe (interesting choice of words, right?) and Save program, wherein you get small discounts for getting regular deliveries of goods, like detergent, that you reorder over and over again. Expect it to try to change our mindsets from shopping to deciding and then letting it go, and getting it delivered without a second thought — changing the very notion of shopping.

With price differentiation now driven by algorithm, with ad offers driven by those with the biggest data, and now with delivery of our daily goods newly rationalized, it looks like those that prize news creation best continue to look elsewhere for revenue. That’s one of the reasons I’ve become increasingly enthusiastic about reader revenue. Yes, newspapers could repurpose their daily delivery systems here, to actually aid Amazon, but that seems like a real longshot. The technocrats of commerce, Amazon, Google, Facebook and Apple, are the biggest game in town — and increasingly, they want to be the only one.

Photo by Stephen Woods used under a Creative Commons license.

May 06 2012

05:17

Warren Buffett says Berkshire Hathaway may buy more newspapers

Yahoo News :: Billionaire Warren Buffett says his company's purchase of his hometown newspaper last year may not be the last one even though newspapers face significant challenges. A Berkshire Hathaway shareholder questioned whether last year's purchase of the Omaha World-Herald in Buffett's hometown was a personal indulgence.

HT: Jim Romenesko

Buffett defends purchase of hometown paper. yhoo.it/IUOTQ3 | That paper's coverage of BH meeting: bit.ly/JAVaxc

— Romenesko (@romenesko) May 5, 2012

Continue to read Associated Press, news.yahoo.com

Tags: Newspapers
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