Tumblelog by Soup.io
Newer posts are loading.
You are at the newest post.
Click here to check if anything new just came in.

January 12 2012

16:30

The newsonomics of the long goodbye: Kodak’s, Sears’, and newspapers’

No old-world icon is safe. Just in recent weeks, both Kodak and Sears have percolated back into the news, offering headline writers a dilemma borrowed from the classic Saturday Night Live Weekend Update line, “Generalíssimo Francisco Franco is still dead.”

How long have these companies been dying? Yes, it was a surprise sometime a long time ago, that digital media was challenging Kodak and that Walmart, Target, Kohl’s, and later Amazon were making life difficult for one of America’s retailing pioneers.

Ask an American in 1990 if they could imagine a world without Kodak. Or a shopper of a world without Sears. Now, in 2012, it’s a lot easier to imagine. These are companies ebbing away, drip by agonizing drip. Which reminds us, of course, of the newspaper industry, and the question still on some lips: Can you imagine a world without newspapers? Now two years into the tablet, it’s much more easily imaginable. I always laugh when asked the question, “Will newspapers exist in 2015 or 2020?” Papyrus is a durable medium. It’s just that digital is rapidly replacing print, and in the process rapidly restructuring the nature of news ownership, news creation, news employment, and more. We’ll have some kind of print for the rest of our lives, but it will be the sidecar to the revving engine of digital news and information, as more and more publishers call it quits on print.

We like to think of change in the world as an on/off switch. This….or that. In fact, the world changes both in an instant and agonizingly slowly.

Let’s call the slow disappearance of familiar brands the newsonomics of the long goodbye. Take companies that have huge imprints in our culture and habits — and cashflows to match — and their disappearance from our lives can seem like it is moving in glacial digital time. But that disappearance is no less real. It is a fact of the news landscape that newspapers, and to some extent consumer print magazines, will disappear over time. We can take bets how much more quickly they’ll continue to vanish. By continue, I mean that data shows 44 percent less newsprint usage (and about 75-80 percent of all newsprint usage is attributed to newspapers) over the past four years, according to The Reel Time Report. (And for more on the industry-leading Michigan Meltdown, check out Alan Mutter’s column at E&P.)

So we can see this goodbye is both real and long. At some point, though, you see this message (on one medium or another), “Kinograph to cease production of silent films,” as borrowed from the neo-silent film The Artist. (Perhaps someday we’ll be talking about “neo-print”?)

Let’s ask a couple of questions about the relationship of Kodak, Sears, and newspapers. How do their revenue slides compare? What lessons apply across the three?

On revenues, take a look at the chart below. I’m tracking revenues from Kodak, Sears, and all U.S. dailies through 2010 — with final 2011 data not yet in, though the year wasn’t kind to any of the three.

What stands out most prominently is that U.S. newspapers’ ad revenue decline is worse, percentage wise, than either Kodak’s or Sears’. Yes, although Kodak and Sears are now poster children of legacy businesses gone wrong, newspapers — as counted through their main revenue source — are doing worse.

Ad revenue is down 53 percent over the period shown, while Kodak’s overall revenues are down 49 percent. Sears’ overall revenues (I removed Kmart revenues, which became part of the Sears Holding Company in a 2005 merger) are down 31 percent over the same period.

The savings grace for newspapers has been circulation revenue, down a relatively low 6 percent in the last decade. Circulation has continued to plummet, but continuing price increases have moderated the revenue losses. Circulation revenue now makes up about 30 percent of all U.S. daily newspaper revenue, so it’s significant — but not enough to stabilize companies reeling from ad revenue loss.

If you combine ad and circulation revenue, over the decade, newspapers have lost 45 percent of the two tentpoles of their business overall, four points less than Kodak.

Share prices will tell us a similar story, as investors — slow to the understanding of the long goodbye — head for the exits.

What are the threads among our three cases? Digital news pioneer Steve Yelvington shared a similar thought about Kodak/newspapers relationship, this week, noting that “brands decay” and “disruption doesn’t happen just once,” among other lessons.

Let’s extend the metaphor. Remember those “Kodak Photo Spots,” where tourists were encouraged to stand and take the exact same picture that tens of thousands had taken before them? Let’s put the newspaper owner — or buyer, given that there’s been a spate of recent purchases — on that spot, and see what they can see about this landscape.

The viewing is hugely important. Why? While we may say newspapers are dying, we can say long live the news. Those owning — or buying into or creating news franchises — do still have time to pivot and learn from failure. History is not fate; this Kodak/Sears history is simply a big cautionary tale from which to learn, a slomo Kodak moment.

With that in mind, let me suggest five points of learning deeply applicable to news management decisions of 2012:

  • Don’t believe your own b.s. Public companies carefully apply their makeup as they talk with analysts and shareholders, as do politicians. Too often, though, they begin to believe what they see in the mirror. Trumpeting the future of the department store, or of “photography,” or of community newspapering doesn’t solve the fundamental issues of disruption plaguing them. Give credit to the few change agents who publicly proclaim that the clock is ticking and that the current business model will explode sooner rather than later.
  • Cutting costs ≠ innovation. Simple, right? Yet Sears chairman Eddie Lampert, heralded early as a whiz by some in the business press when he took over the company in 2005, cut and cut and then cut some more, making the unattractive Sears floors even more moonscape-like than before. Most newspaper companies have cut so much, while driving out nodes of innovators here and there, that they are left half-staffed for the apps/HTML5/digital circulation revolutions playing out before them. Innovation means at least fast-following; otherwise, you’re left in the dust.
  • Constant re-organizing and re-structuring doesn’t mask deeper problems; it just diverts time from consumer focus. Kodak is now reorganizing its units; Sears has done the same in recent years. How many times have newspaper companies shifted back and forth from standalone digital units to integrated operations, in the process losing time and focus, no matter the potential benefits of reorganization?
  • Selling assets is a short-term band-aid. Kodak, as it makes a last stand, is busily trying to sell off its intellectual property, though the value of much of that IP is in question. The sale may raise some cash, but it won’t solve long-term issues, and it will sap ability to innovate. Newspapers don’t have much IP (they have intellectual capital, perhaps), so they are selling their only real assets, their buildings and land, and leasing back quarters. That may buy time — but not that much.
  • And, finally, perhaps the biggest parallel: The old companies are still stuck in a manufacturing mindset. Kodak creates film and products. Sears sells products. Newspapers print products and far too many “print” websites. The new world is about service. iPhone photos are about capturing moments, sometimes for family scrapbooks, but far more often adding to our individual and collective memories, of events, places; they are the kinds ofextensions to our brains that we’ve lately come to accept. Retailers like Target (“Expect more. Pay less.”) are about about price, but also attitude and service. News is about getting what I want now, not a physical product. Of course, it’s tough to change such a manufacturing mindset — one that produced profits to drool over for decades. The manufacturing mindset, though, is oh-so-last-century, and those that adhere to it are going down with it.

One newer victim of the old mindset may give us pause: Best Buy. Best Buy built expensive and dominating superstores, eating alive the CompUSAs and Circuit Cities. Now Amazon and a hundred websites have made buying a 62-inch TV cheaper and as easy to deliver to your house as a sweater. Faced with disappointing financial results in an otherwise booming holiday season, Best Buy CEO Brian Dunn, like his Kodak, Sears, and newspaper counterparts before him, is left to sputter: “This misguided perspective [that electronics buying is moving profoundly online] is especially troubling for me, because it blatantly and recklessly ignores overwhelming evidence to the contrary.” His irritation is understandable — but history is proving increasingly hostile to those failing to adapt fast enough.

Kodak camera photo by Kevin Stanchfield used under a Creative Commons license.

March 05 2010

16:00

This Week in Review: Surveying the online news scene, web-first mags, and Facebook patents its feed

[Every Friday, Mark Coddington sums up the week’s top stories about the future of news and the debates that grew up around them. —Josh]

The online news landscape defined: Much of the discussion about journalism this week revolved around two survey-based studies. I’ll give you an overview on both and the conversation that surrounded them.

The first was a behemoth of a study by the Pew Research Center’s Internet & American Life Project and Project for Excellence in Journalism. (Here’s Pew’s overview and the full report.) The report, called “Understanding the Participatory News Consumer,” is a treasure trove of fascinating statistics and thought-provoking nuggets on a variety of aspects of the world of online news. It breaks down into five basic parts: 1) The news environment in America; 2) How people use and feel about news; 3) news and the Internet; 4) Wireless news access; and 5) Personal, social and participatory news.

I’d suggest taking some time to browse a few of those sections to see what tidbits interest you, but to whet your appetite, the Lab’s Laura McGann has a few that jumped out at her — few people exclusively rely on the Internet for news, only half prefer “objective” news, and so on.

Several of the sections spurred their own discussions, led by the one focusing on the social nature of online news. GigaOM’s Mathew Ingram has a good summary of the study’s social-news findings, and Micah Sifry of techPresident highlights the sociological angle of news participation. Tech startup guy Dave Pell calls us “Curation Nation” and notes that for all our sharing, we don’t do much of the things going on in our own backyards. And Steve Yelvington has a short but smart take, noting that the sociality of news online is actually a return to normalcy, and the broadcast age was the weird intermission: “The one-way flow that is characteristic of print and electronic broadcasting is at odds with our nature. The Internet ends that directional tyranny.”

The other section of the study to get significant attention was the one on mobile news. PBS’ Idea Lab has the summary, and Poynter’s Mobile Media blog notes that an FCC study found similar results not long ago. Finally, Jason Fry has some hints for news organizations based on the study (people love weather news, and curation and social media have some value), and Ed Cafasso has some implications for marketing and PR folks.

A web-first philosophy for magazine sites: The Columbia Journalism Review also released another comprehensive, if not quite so sprawling, study on magazines and the web. (Here’s the full report and the CJR feature based on it.) The feature is a great overview of the study’s findings on such subjects on magazines’ missions on the web, their decision-making, their business models, editing, and use of social media and blogs. It’s a long read, but quite engaging for an article on an academic survey.

One of the more surprising (and encouraging) findings of the study is that magazine execs have a truly web-centric view of their online operation. Instead of just using the Internet as an extension of their print product, many execs are seeing the web as a valuable arena in itself. As one respondent put it, “We migrated from a print publication supplemented with online articles to an online publication supplemented with print editions.” That’s a seriously seismic shift in philosophy.

CJR also put up another brief post highlighting the finding that magazine websites on which the print editor makes most of the decisions tend to be less profitable. The New York Times’ report on the study centers on the far lower editing standards that magazines exercise online, and the editing-and-corrections guru Craig Silverman gives a few thoughts on the study’s editing and fact-checking findings.

Facebook patents the news feed: One significant story left over from last week: Facebook was granted a patent for its news feed. All Facebook broke the news, and included the key parts of Facebook’s description of what about the feed it’s patenting. As the tech blog ReadWriteWeb notes, this news could be huge — the news feed is a central concept within the social web and particularly Twitter, which is a news feed. But both blogs came to the tentative conclusion that the patent covers a stream of user activity updates within a social network, not status updates, leaving Twitter unaffected. (ReadWriteWeb’s summary is the best description of the situation.)

The patent still wasn’t popular. NYU news entrepreneur Cody Brown cautioned that patents like this could move innovation overseas, and New York venture capitalist Fred Wilson called the patent “lunacy,” making the case that software patents almost always reward derivative work. Facebook, Wilson says, dominates the world of social news feeds “because they out executed everyone else. But not because they invented the idea.” Meanwhile, The Big Money’s Caitlin McDevitt points out an interesting fact: When Facebook rolled out its news feed in 2006, it was ripped by its users. Now, the feed is a big part of the foundation of the social web.

What’s j-schools’ role in local news?Last week’s conversation about the newly announced local news partnership between The New York Times and New York University spilled over into a broader discussion about j-schools’ role in preserving local journalism. NYU professor Jay Rosen chatted with the Lab’s Seth Lewis about what the project might mean for other j-schools, and made an interesting connection between journalism education and pragmatism, arguing that “our knowledge develops not when we have the most magnificent theory or the best data but when we have a really, really good problem,” which is where j-schools should start.

An Inside Higher Ed article outlines several of the issues in play in j-school local news partnerships like this one, and Memphis j-prof Carrie Brown-Smith pushes back against the idea that j-schools are exploiting students by keeping enrollment high while the industry contracts. She argues that the skills picked up in a journalism education — thinking critically about information, checking its accuracy, communicating ideas clearly, and so on — are applicable to a wide variety of fields, as well as good old active citizenship itself. News business expert Alan Mutter comes from a similar perspective on the exploitation question, saying that hands-on experience through projects like NYU’s new one is the best thing j-schools can do for their students.

This week in iPad tidbits: Not a heck of a lot happened in the world of the iPad this week, but there’ll be enough regular developments and opinions that I should probably include a short update every week to keep you up to speed. This week, the Associated Press announced plans to create a paid service on the iPad, and the book publisher Penguin gave us a sneak peek at their iPad app and strategy.

Wired editor-in-chief Chris Anderson and tech writer James Kendrick both opined on whether the iPad will save magazines: Anderson said yes, and Kendrick said no. John Battelle, one of Wired’s founders, told us why he doesn’t like the iPad: “It’s an old school, locked in distribution channel that doesn’t want to play by the new rules of search+social.”

Reading roundup: I’ve got an abnormally large amount of miscellaneous journalism reading for you this week. Let’s start with two conversations to keep an eye on: First, in the last month or so, we’ve been seeing a lot of discussion on science journalism, sparked in part by a couple of major science conferences. This is a robust conversation that’s been ongoing, and it’s worth diving into for anyone at the intersection of those two issues. NYU professor Ivan Oransky made his own splash last week by launching a blog about embargoes in science journalism.

Second, the Lab’s resident nonprofit guru Jim Barnett published a set of criteria for determining whether a nonprofit journalism outfit is legitimate. Jay Rosen objected to the professionalism requirement and created his own list. Some great nuts-and-bolts-of-journalism talk here.

Also at the Lab, Martin Langeveld came out with the second part of his analysis on newspapers’ quarterly filings, with info on the Washington Post Co., Scripps, Belo, and Journal Communications. The Columbia Journalism Review’s Ryan Chittum drills a bit deeper into the question of how much of online advertising comes from print “upsells.”

The Online Journalism Review’s Robert Niles has a provocative post contending that the distinction between creation and aggregation of news content is a false one — all journalism is aggregation, he says. I don’t necessarily agree with the assertion, but it’s a valid challenge to the anti-aggregation mentality of many newspaper execs. And I can certainly get behind Niles’ larger point, that news organization can learn a lot from online news aggregation.

Finally, two great guides to Twitter: One, a comprehensive list of Twitter resources for journalists from former newspaper exec Steve Buttry, and two, some great tips on using Twitter effectively even if you have nothing to say, courtesy of The New York Times. Enjoy.

January 29 2010

15:00

January 22 2010

15:06

This Week in Review: The New York Times’ paywall plans, and what’s behind MediaNews’ bankruptcy

[Every Friday, Mark Coddington sums up the week’s news about the future of news and the debates that grew up around them. —Josh]

The Times’ paywall proposal: No question about media and journalism’s biggest story this week: The New York Times announced it plans to begin charging readers for access to its website in 2011. Here’s how it’ll work: you can view an as-yet-unidentified number of articles for free each month before the Times requires you to pay a flat, unlimited-access fee to see more; this is known as a metered system. (If you subscribe to the print edition, it’ll be free.) Two Times execs answered questions about the plan, including whether you can still email and link to articles (you can) and why it’s different from TimesSelect, the abandoned paid-content experiment it tried from 2005-07. Gabriel Sherman of New York’s Daily Intel, who broke the rumor on Sunday, has some details of the paywall debate within the Times.

There’s been a ton of reaction to the Times’ plan online, so I’ll tackle it in three parts: First, the essential reading, then some other worthwhile opinions, and finally the interesting ephemera.

Four must-reads: It makes sense to start with New York Times media critic David Carr’s take on the plan, because it’s the most the thorough, cogent defense of the Times’ paywall you’ll find. He argues that Times execs “have installed a dial on the huge, heaving content machine of The New York Times,” giving the site another flexible revenue stream outside of advertising. If you’re up for a little algebra, Reuters’ Felix Salmon has a sharp economic analysis of the paywall, arguing that the value of each article will become much greater for subscribers than nonsubscribers. For the more theoretical-minded, CUNY prof C.W. Anderson has some fascinating thoughts here at the Lab on how the paywall turns the Times into a niche product and what it means for our concept of the “public.” And as usual, Ken Doctor thoughtfully answers many of the practical questions you’re asking right now.

Other thoughtful opinions: Poynter’s Bill Mitchell poses a lot of great business questions and wonders how the Times will handle putting the burden on its most loyal online-only users. Steve Yelvington reminds us that we’re not going to learn much here that we can apply to other papers, because “the Times is fundamentally in a different business than regional dailies” and “a single experiment with a single price point by a single newspaper is just a stab in the dark.” Before the announcement, former Editor & Publisher columnist Steve Outing, Forrester Research’s James McQuivey, and Reuters’ Felix Salmon gave the Times advice on constructing its paywall, almost none of which showed up in the Times’ plans. Two massive tech blogs, TechCrunch and Mashable, think the paywall won’t amount to much. Slate’s Jack Shafer says people will find ways to get around it, NYU’s Jay Rosen echoes C.W. Anderson’s thoughts on niche vs. public, and CUNY’s Jeff Jarvis doesn’t like the Times’ sense of entitlement.

The ephemera: The best stuff on Twitter about the announcement was collected at E&P In Exile and the new site MediaCritic. Steve Outing and Jason Fry don’t like the wait ’til 2011, and Cory Doctorow is skeptical that that’s even true. Former E&Pers Fitz & Jen interview a few newspaper execs and find that (surprise, surprise) the like the Times’ idea. So does Steven Brill of Journalism Online, who plans to roll out a few paywalls of his own soon. Dan Gillmor wants the Times to find out from readers what new features they’d pay for, and Jeff Sonderman makes two good points: “The major casualty of NYT paywall is sharing,” and “Knowing the ‘meter is running’ creates cautious viewing of the free articles.”

Apple’s tablet to go public: Apple announced that it will unveil its “latest creation” (read: its new tablet) next Wednesday. Since the announcement came a day after word of the Times’ paywall plans broke, it was only natural that the rumors would merge. The Daily Intel’s Gabriel Sherman, who broke the story of those Times plans, quoted Times officials putting the Times-tablet-deal rumors to rest. The Wall Street Journal detailed Apple’s plans for the tablet to do to newspapers, magazines and TV what the iPod did to music. Meanwhile, Columbia j-student Vadim Lavrusik and TechCrunch’s Paul Carr got tired of the tablet hype — Lavrusik for the print industry and Carr for tech geeks. (The Week also has a great timeline of the rumors.)

MediaNews goes bankrupt: Last Friday, MediaNews Group — a newspaper chain that publishes the Denver Post and San Jose Mercury-News, among others — announced it would file for bankruptcy protection. (A smaller chain, Morris Publishing Group, made the same announcement the day before.) For the facts and background of the filing, we’ve got a few sources: At the Lab, MediaNews veteran Martin Langeveld has a whole lot of history and insight on MediaNews chief Dean Singleton. News business analyst Alan Mutter tells us about the amazing fact that Singleton will come out of the filing unscathed but Hearst, which invested in MediaNews to save the San Francisco Chronicle, stands to lose $317 million in the deal. And MinnPost reports that the St. Paul Pioneer Press was the only MediaNews paper losing money.

Looking at the big picture, Ken Doctor says that bankruptcies like these are just a chance for newspapers to buy time while adjusting their strategy in “the fog of media war.” Steve Outing takes a glass-half-full approach, arguing that the downfall of old-media chains like MediaNews are a great opportunity for journalism startups to build a new news ecosystem.

How much do Google News users read?: An annual study by research firm Outsell and Ken Doctor on online and offline news preferences made waves by reporting that 44 percent of Google News users scan headlines without clicking through to the original articles. PaidContent noted that Outsell has a dog in this fight; it openly advocates that news organizations should get more money from Google. Search engine guru Danny Sullivan was not impressed, giving a thorough critique of the study and its perceived implications. Syracuse j-prof Vin Crosbie also wondered whether the same pattern might be true with print headlines.

In a similar vein, BNET’s David Weir used comScore numbers to argue that Google, Yahoo and Microsoft support big newspapers, and Jeff Jarvis made one of his favorite arguments — in defense of the link.

Heartbreak in Haiti: I’d be remiss if I didn’t mention the journalism and media connections to the largest news story in the world for the past two weeks — the devastating earthquake in Haiti. Several sites noted that Twitter led the way in breaking news of the quake and in raising money for relief. The money aspect is new, but as Columbia j-prof Sree Sreenivasan noted last June, Twitter came of age a long time ago as a medium for breaking global news. That’s what it does. The coverage also provided an opportunity for discussion about the ethics of giving aid while reporting.

Reading roundup: In addition to being out in front of the whole New York Times paywall story, Gabriel Sherman authored a nice, long think piece for The New Republic on the difficulties of one of America’s other great newspapers, The Washington Post. For what it’s worth, Post patriarch Donald Graham thought it was “not even a molehill.”

Over at Snarkmarket, Robin Sloan uses the economic concept of stock and flow to describe the delicate balance between timeliness and permanence the world of online media. It’s a brilliant idea — a must-read.

Finally, a promising new site named MediaCritic, run by Salon veteran Scott Rosenberg, citizen journalism advocate Dan Gillmor, and Lucasfilm’s Bill Gannon, had its soft launch this week. It looks like it’s going to include some nifty features, like Rosenberg’s regular curation of Twitter commentary on big media subjects.

Older posts are this way If this message doesn't go away, click anywhere on the page to continue loading posts.
Could not load more posts
Maybe Soup is currently being updated? I'll try again automatically in a few seconds...
Just a second, loading more posts...
You've reached the end.

Don't be the product, buy the product!

Schweinderl