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April 12 2012

15:12

The newsonomics of small things

If the news business were sexy enough (it’s not) to fuel Hollywood or Bollywood filmmaking, we might envision this wake-me-from-the-dead screenplay: A publisher (I’m thinking Tom Hanks, now almost old enough to look sufficiently weary), lured by the sirens on the Isle of Profitos, falls into a deep, deep sleep.

Awakened 10 years later, he finds his golden egg of a business withered, an ellipse of uncertain provenance or fertility, halved in size. He pokes around the egg — surely the once-thriving thing can be revived somehow. Finally, after what seems like years, he gives in to nature, and set outs to find a new, big golden egg.

Yet search as he might, through forest, beach, and urban landscape, he can find none. All he finds is little eggs. They seem puny. Egg analysts calculate that these little finds will never reach the size of the prized golden egg, and advise they be discarded. They are no replacement for that big golden egg.

But maybe, say a couple of advisers, you need to learn how to assemble a bunch of those golden eggs. Some will never grow big, to be sure — but some may thrive, and if you add three or four of them together, maybe they will begin to approach the size of that golden egg.

That’s the news industry today.

Until recently, the holy grail was summed up in two words: replacement revenue. Now the jig’s up. No matter how fast you shovel digital dirt into the chasm of print loss, you can’t recreate the past; you can’t fill the hole. Now, though, we see new foundations being set and fresher building — with more realistic expectations — begun. The change is a huge one. Where once top newspaper company execs eschewed new initiatives as too small with which to bother, the awareness that the old business simply is never coming back has almost sunk in.

Meinolf Ellers, managing director at dpa-infocom, crystallized the Small Things phenomenon for me last month. At a Moscow conference of MINDS International, a five-year-old network of 22 of the world’s news agencies, he invoked Steve Jobs and talked about “getting small things right.” People have talked about the Apple founder’s attention to small product details, to doing fewer things better and to pricing some things low (think iTunes songs at the uniform and now ubiquitous price point of 99 cents). Start small, get it right, and then maybe if the universe aligns, get big.

For Ellers, one of the best forward thinkers in the news business, thinking small works, for now, on at least two levels.

He thinks of the lessons of the digital gaming industry (“The newsonomics of gamification”) and how luring in customers step-by-step — first with freemium techniques, and then with low (yup, 99 cents) incremental pricing — builds customer engagement and purchasing.

Secondly, he thinks of it on a more global level: “What we all see — newspaper publisher or news agency — is that the bundle is eroding, losing its power. The more we see the bundle losing market share and reaching the end of its lifecycle, the more we have to work on smaller, fragmented products that, not each by each, but overall, can compensate. That’s the strategy.”

So, let’s call it the newsonomics of small things, with a nod to Mr. Jobs and to Meinolf Ellers’ realization. Let’s focus on Small Things as opposed to Big Things — meaning traditional advertising and circulation, the long-in-the-tooth double-digit contributors to newspaper company revenues.

It would be great to replace those-end-of-lifecycle business lines with other Big Things, but those are few and far between. Google developed the Next Big Thing of paid search advertising, and continues to dominate that $40 billion global industry, with 76 percent market share in the Americas and 94 percent in EMEA, according to Covario, an large, independent search marketing agency. AT&T and Verizon replaced their cycle-ending landline business by going Triple Play, adding broadband and cable to their revenue lines. Facebook cornered the market on a little segment called global social connectivity. Newspapers have been searching in vain for two decades for such Big Things and have come up short.

So let’s touch on six Small Things — each now a small egg, at best a single digit contributor to overall revenue. Then let’s toss in a couple of Wild Things, fliers of businesses that might work.

We can turn our eyes to Texas to see at least half of them, an indication of how fast the Small Things movement is accelerating.

In Houston and San Antonio, Hearst has been leading the marketing services push, among newspaper companies. In Dallas, the Morning News is making a significant business of in-sourcing, becoming a major printer and distributor of Old World print, at the same time it is launching (with Hearst) its own marketing services foray. In Austin, the Texas Tribune has created an events business model, widely, if quietly, being studied and adopted in various parts of the country.

In Morning News publisher Jim Moroney’s sum-up of his push, I think we see a common thread among these and of Small Thing moves: “Print editions are not going away anytime soon. So take the extra capacity of your print facility and bring in as much commercial broadsheet or tab newsprint work as you can. There’s no reason to have idle capacity.”

In a word, capacity. What kinds of skills, knowledge and abilities do you have in your company, assets that can be used newly and differently? What kind of job needs to be one by someone who has the budget and has no go-to supplier…yet?

Let’s look at those six Small Things, just as first examples, through the lens of capacity and revenue potential.

Marketing services

That push (“The newsonomics of 8 percent reach”) is indicative of the fastest-growing digital ad line for many news publishers. Hearst Media Services and its Local Edge push, Tribune 365, Gannett Local, Advance Digital, and McClatchy are among the many companies plying this territory.

John Denny, VP of marketing for Advance Digital, recently spoke in Boston to the Kelsey Interactive Local Marketing East Conference. He outlined well the value of the marketing services push: “[There's a] growing importance of ‘services’ in the world of marketing priorities for businesses. That money is now shifting from what has always been viewed as ‘advertising’ (whether traditional or digital media) to a whole host of growing priorities including search engine optimization, social media optimization, blogs, and content marketing.” Every merchant faces the same kind of blur of too many choices — digital marketing choices — and some will take a newspapers’ help in sorting them out.

Talk to marketing services execs and they’ll tell you that today marketing services revenues — money paid by local merchants to publishers who help them with their advertising, in addition to any ads those merchants buy on publisher websites or in the paper — amounts to at least 10 percent of overall digital ad revenues. Some are pushing that number towards a quarter or a third of the total; several say they expect marketing services to account for half of all digital ad-related revenue within three years.

Capacity use: Makes great use of newspaper brand equity capacity. While many companies employ a separate (from their own ad selling) salesforce, some company infrastruture can also be used.

Revenue contribution: 1-3 percent of total revenue in 2012; could reach 10-15 percent by 2015.

In-sourcing printing and distribution

From recent quarterly reports, figure that the Morning News (good interview with publisher Moroney in News & Tech) is now getting close to using the full capacity of its printing and distribution resources. You won’t find a Morning News thrower with a single paper; they toss USA Today, The Wall Street Journal, The New York Times, and a couple other titles.

Capacity use: Rather than outsourcing, more common among daily papers, the insourcing is making almost full use of the Old World asset.

Revenue contribution: Figure about five percent of Morning News revenues, with fair margins, are derived from insourcing.

Custom publishing

Journalism companies know how to create readable content, though we often take that for granted. In London, the Press Association, the AP’s cousin, is building a substantial business in bespoke — or as Yanks would say, custom — publishing. News agencies, of course, are native B2B industries. They are used to selling the same content stream — the wire — to many comers, a good business for a long time, but now threatened as their newspaper customer budgets decline.

So Tony Watson, PA’s managing director, has now extended that B2B publishing customer relationship. Working with top portal customers, providing them unique content they can monetize, he’s grown that business more than 50 percent year over year. It’s still small, but growing rapidly, as newspaper revenue contributions to his budget decline markedly in the UK recession.

Watson isn’t alone, but custom content marketing — whether performed by an auxiliary staff or the core one — is nascent in much of the news industry.

Capacity use: For Watson, that’s what it’s about: using PA’s “significant product development capability” — though the agency is careful to avoid conflicts of interest.

Revenue contribution: Low single digits at this point, but could make up 10 percent within three to four years. In addition, it’s a cousin to commercial content creation, noted under marketing services.

Events

Newspapers have long sponsored bridal fairs and the like. What we see in Texas Tribune’s new event model (“For the Texas Tribune, events are journalism — and money makers”) is connecting public service journalism with worthy civic events that make money. CEO Evan Smith told me that he expects $900,000 in revenue from events sponsorships this year, plus attendee income. I hear a lot of ferment among publishers wanting to borrow the model.

Capacity use: While the events staff is focused on that work, the piggybacking on the Tribune’s excellent journalism doubles its value.

Revenue contribution: Maybe about 20 percent now — a big number for a start-up finding its model — and could grow to around 33 percent, while supporting other revenue lines like site sponsorship and membership.

Syndication

California Watch, now newly expanded with the CIR/Bay Citizen merger, has smartly considered itself largely a B2B business, a new wire for a new time. Its stories reach hundreds of thousands of print, online, and broadcast news consumers.

Capacity use: That’s the once (and future) beauty of the wire business. Produce once, customize a little, and distribute many times over.

Revenue contribution: California Watch stories are still underpriced, contributing less than 10 percent of the organization’s revenue. With scale and a greater track record, it may be able to wring closer to 20 percent of its revenue from syndication in three years.

Ebooks

Last week, I wrote about the coming explosion of ebook publishing by news and magazine publishers; in the past week, I’ve heard from many more publishers whose ebook plans I hadn’t known about. Getting into the ebooks business — or “mining the archive” — is becoming mainstream. Ellers’ dpa is one of those stepping up its business, out of its News Lab. It will soon produce ebooks on both wacky subjects and the historically significant, like the 1972 Munich Olympics killings of Israeli athletes.

Capacity use: Excellent. Content is already paid for, edited, and largely ready to go.

Revenue contribution: Tiny in 2012; at least five percent by 2015, if publishers execute well.

A couple of Wild Things that could become Small Things:

Journalism company journalism schools: College education is going digital and virtual anyhow, so why can’t journalists (and marketers) get into the business. The Guardian is tiptoeing into it, and you can imagine what a diploma from The New York Times or Wall Street Journal might be worth. Journal Register is already retraining its own staff at its Digital Ninja schools; why not go bigger?

Professional services: Several publishers have told me how they idolize the Financial Times for its pricing schemes, product initiatives, and intensive use of analytics. As the FT goes forward, and at least some other publishers get proficient at newer parts of the business, professional services — or, to use the old-fashioned world — will make sense for some.

Overall, it’s much better to move into the future with a half-dozen revenue streams — even if some are now just trickles — to stick with only two big-but-slowing ones. It should be more lucrative than selling the same old things. And maybe more fun, too.

“As a news agency guy,” says Meinolf Ellers, “I’m used to being disrupted. Now I can be the disruptor [with ebooks] to the book industry.”

May 27 2011

17:53

#newsrw: ‘It’s almost as if the liveblog is the new home page’


Far from being the death of journalism, it is almost as if the liveblog is the new home page if it central to the coverage signposts to the rest of the coverage, according to Matt Wells, blogs editor of the Guardian.

Liveblogs are Twitter for people not on Twitter, panelists agreed in the fourth and final session at news:rewired – noise to signal, who demonstrated that liveblogging has not been killed by Twitter, as has been claimed.

Matt Wells, blogs editors, the Guardian responded to criticism that suggested journalism should only follow the the tried and tested format of a news story.

The inverted triangle is the single reason why journalism is so mistrusted and the search for the top line encourages sensationalism, Wells said

Liveblogs are good for stories that don’t have a beginning and an end, Wells explained, and cited the example of Hosni Mubarak’s resignation from the Egyptian presidency.

“Liveblogs can’t be printed, you can’t broadcast them on television or on a radio station. They only work on a digital screen.

“It’s the only format that has developed specifically for the digital media,” Wells said.

He responded to Tim Montgomery’s claim that “Twitter has killed live blogging,” giving this as a reason for not live blogging the AV vote.

So what is next for the Guardian’s live blogs? Wells said the team is working on ways to better signpost liveblogs, better navigation and to make it “easier to get out of if you don’t want to be there”.

Users want to read a live blog in different ways.

“Show me it from the start, show me it form the latest post, show me the best posts,” is what Wells is hearing from readers.

Alan Marshall, head of digital production at the Press Association, said liveblogging is bridging the gap between the PA wire service and other products

“It’s a natural extension of what PA has been doing for a long time,” he said.

PA uses ScribbleLive and reporters can file via Twitter, email, smartphone, which interact with the CMS.

Marshall used a liveblog of the Royal Wedding as an example and one he described as “a real watershed for PA”.

PA’s Royal Wedding liveblog was used by its customers, including Yahoo and Newsquest, both companies were able to integrate their own users content and comments onto their sites.

Reporters sent reports, including observations filed by Twitter, and the “the bits that don’t make the wire”.

Paul Gallagher, Manchester Evening News, explained how the MEN started liveblogging with an English Defence League rally in 2009. It received 3,000 comments and gratitude from readers for the information.

MEN has produced 30 liveblogs during the past 18 months, including reporting from all council meetings, and some liveblogs have resulted in a spike in web traffic, including the Manchester City parade celebrating its recent FA cup win.

“Every single person in our newsroom live blogs,” Gallagher explained.

As well as being popular, liveblogs result in people spending longer on the site which has led to people requesting for email alerts giving “the potential for a better profile of our audience”, he said.

Anna Doble, social media producer, Channel 4 News, gave the example of liveblogging the budget including a video comment of Faisal Islam from his desk, surrounded by piles of paper and not in a suit, who gave analysis while chancellor George Osborne was still on his feet.

The liveblog also included the “real person on the street” by inviting a carer, a mother and a student to post.

Doble also discussed liveblog following the death Osama bin Laden, and how it made use of the huge video resource of Channel 4 News.

She demonstrated increased audience engagement explaining that a farmer living near Fukushima nuclear plant in Japan contacted Jon Snow via Twitter and is now a regular contributor providing updates now the journalists have left the scene of the news story.

November 30 2010

15:00

CCTV spending by councils/how many police officers would that pay? – statistics in context

News organisations across the country will today be running stories based on a report by Big Brother Watch into the amount spent on CCTV surveillance by local authorities (PDF). The treatment of this report is a lesson in how journalists approach figures, and why context is more important than raw figures.

BBC Radio WM, for example, led this morning on the fact that Birmingham topped the table of spending on CCTV. But Birmingham is the biggest local authority in the UK by some distance, so this fact alone is not particularly newsworthy – unless, of course, you omit this fact or allow anyone from the council to point it out (ahem).

Much more interesting was the fact that the second biggest spender was Sandwell – also in the Radio WM region. Sandwell spent half as much as Birmingham – but its population is only a third the size of its neighbour. Put another way, Sandwell spent 80% more per head of population than Birmingham on CCTV (£18 compared to Birmingham’s £10 per head).

Being on a deadline wasn’t an issue here: that information took me only a few minutes to find and work out.

The Press Association’s release on the story focused on the Birmingham angle too – taking the Big Brother Watch statements and fleshing them out with old quotes from those involved in the last big Birmingham surveillance story – the Project Champion scheme – before ending with a top ten list of CCTV spenders.

The Daily Mail, which followed a similar line, at least managed to mention that some smaller authorities (Woking and Breckland) had spent rather a lot of money considering their small populations.

How many police officers would that pay for?

A few outlets also repeated the assertions on how many nurses or police officers the money spent on surveillance would have paid for.

The Daily Mail quoted the report as saying that “The price of providing street CCTV since 2007 would have paid for more than 13,500 police constables on starting salaries of just over £23,000″. The Birmingham Mail, among others, noted that it would have paid the salaries of more than 15,000 nurses.

And here we hit a second problem.

The £314m spent on CCTV since 2007 would indeed pay for 13,500 police officers on £23,000 – but only for one year. On an ongoing basis, it would have paid the wages of 4,500 police officers (it should also be pointed out that the £314m figure only covered 336 local authorities – the CCTV spend of those who failed to respond would increase this number).

Secondly, wages are not the only cost of employment, just as installation is not the only cost of CCTV. The FOI request submitted by Big Brother Watch is a good example of this: not only do they ask for installation costs, but operation and maintenance costs, and staffing costs – including pension liabilities and benefits.

There’s a great ‘Employee True Cost Calculator‘ on the IT Centa website which illustrates this neatly: you have to factor in national insurance, pension contributions, overheads and other costs to get a truer picture.

Don’t blame Big Brother Watch

Big Brother Watch’s report is a much more illuminating, and statistically aware, read than the media coverage. Indeed, there’s a lot more information about Sandwell Council’s history in this area which would have made for a better lead story on Radio WM, juiced up the Birmingham Mail report, or just made for a decent story in the Express and Star (which instead simply ran the PA release).

There’s also more about spending per head, comparisons between councils of different sizes, and between spending on other things*, and spending on maintenance, staffing (where Sandwell comes top) and new cameras – but it seems most reporters didn’t look beyond the first page, and the first name on the leaderboard.

It’s frustrating to see news organisations pass over important stories such as that in Sandwell for the sake of filling column inches and broadcast time with the easiest possible story to write. The result is a homogenous and superficial product: a perfect example of commodified news.

I bet the people at Big Brother Watch are banging their heads on their desks to see their digging reported with so little depth. And I think they could learn something from Wikileaks on why that might be: they gave it to all the media at the same time.

Wikileaks learned a year ago that this free-to-all approach reduced the value of the story, and consequently the depth with which it was reported. But by partnering with one news organisation in each country Wikileaks not only had stories treated more seriously, but other news organisations chasing new angles jealously.

*While we’re at it, the report also points out that the UK spends more on CCTV per head than 38 countries do on defence, and 5 times more in total than Uganda spends on health. “UK spends more on CCTV than Bangladesh does on defence” has a nice ring to me. That said, those defence spending figures turn out to be from 2004 and earlier, and so are not exactly ideal (Wolfram Alpha is a good place to get quick stats like this – and suggests a much higher per capita spend)

December 17 2009

13:43

Journalism.co.uk signs up Press Association as event partner

Press Association logoThe Press Association has signed up as a media partner for Journalism.co.uk’s digital journalism event news:rewired.

The Press Association joins the BBC’s College of Journalism and sponsor Audioboo as partners for the event on 14 January 2010 at City University London.

To meet a growing demand for digital and multimedia content from its clients, the agency launched its video news wire in April. In keeping with our news:rewired session on working in partnerships, the Press Association is also planning a public service reporting pilot in collaboration with local media groups.

You can follow the agency on Twitter on @pressassoc and find out all about news:rewired at this link.

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