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August 15 2012

20:28

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

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

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

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

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

Two letters: TV.

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

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

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

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

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

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

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

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

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

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

December 07 2011

17:57

Daily Must Reads, Dec. 7, 2011

The best stories across the web on media and technology


1. Nearly 80% of college students can't figure out QR codes (Digital Trends)

2. Verizon to take on Netflix with web video service (Reuters)

3. Oregon court deems blogger "not a journalist," imposes $2.5 million judgment (Seattle News)

4. iPhone could be used by police to take fingerprints in the field (Cult of Mac)

5. Interactive feature: predicting the future of computing (New York Times)

6. Amazon to publish children's e-books for Kindle Fire (paidContent)

7. The naked retweet dilemma (American Journalism Review)


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



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May 28 2011

16:08

Appointed - Twitter's Dick Costolo now member of President Obama's Advisory Committee

Business Insider | SAI :: President Obama has decided to appoint Twitter CEO Dick Costolo to his National Security Telecommunications Advisory Committee. Costolo will be joining executives from Microsoft and McAfee, as well as Dan Hesse of Sprint Nextel and Ivan Seidenberg of Verizon

Continue to read Alyson Shontell, www.businessinsider.com

January 14 2011

23:13

4 Minute Roundup: All Hail the Verizon iPhone!

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

Check it out!

4mrbareaudio11411.mp3

>>> Subscribe to 4MR <<<

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

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

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

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

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

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

Is Verizon IPhone Too Late For Apple? at MediaPost

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

Amazon Says No Plans to Carry Verizon iPhone at PC Mag

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

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




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

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

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17:00

Gizmodo taps illustrators to give stories more punch, pop, pow!

When Gizmodo editorial director Brian Lam was planning for this week’s coverage of the Verizon iPhone, he didn’t think in words. He visualized it entirely in images, daydreaming about how much more emotive pictures and sounds can be than straight-laced text: A Ken Burns-style montage of past newspaper stories predicting iPhone’s migration; a video of AT&T’s greatest failures; customers expressing frustration layered with soulful, gut-wrenching music.

On Tuesday, the editorial package still featured a lot of text — Gizmodo ran a series of traditional news and service pieces plus a one-minute rant — but Gizmodo did have some original art: a Verizon-red light dawning over the shiny iPhone (“At Last”) and a projectile phone crashing through the telecom’s Manhattan headquarters (“Will the iPhone Crush Verizon’s Network?”).

Most online journalism privileges text over all else. But to help Gizmodo differentiate itself from the countless other technology sites around, since early summer, contributing illustrators and guest artists have been whipping up hundreds of visual pieces for Gizmodo. And the response has only made Lam’s love of the visual grow stronger. “If I needed to, I would have napkin sketches done,” he says. Cartoons, illustrations, and drawings can add a nice touch in the Internet environment where text stories are aggregated, chopped up, syndicated or simply re-skinned and re-written without giving credit. Art, on the other hand, is treated as a more proprietary piece of intellectual property and can catch a reader’s eye, build a brand’s signature style, and help tell the story. Plus it can also be a cheaper, more flexible alternative to original photography.

At the recent Consumer Electronics Show, Gizmodo wrote about Lady Gaga’s Polaroid glasses, but there was no picture of her with them. “How much would [a photo shoot] cost? Thousands of dollars, weeks to set up?” Lam asks rhetorically. Perhaps, but Lam didn’t have to go that route. Instead, Sam Spratt, a 22-year-old contributing illustrator, drew the Gaga image above in half an hour.

Spratt has been working with Gawker since July and was onsite at CES, but he typically creates from a home studio, another advantage of hand-drawn art. Like journalists who can gather information, sources, and anecdotes with just a phone and computer, illustrators don’t always have to be on location to create original, entertaining, and informative content. Wendy MacNaughton, a San Francisco-based cartoonist who spent a month working with Gawker, drew the clever Fission vs. Fusion sidebar (left, click for the full image), which for many will be light years more engaging than a string of quotes from a CERN scientist. “They’re the shiny objects that hook people in enough to see the real meat of the package: the article,” Spratt says of his drawings. (Readers simply ignore stock images.)

Bang for the buck

Visuals are already a Gawker signature — its editorial teams mine the Web for colorful images to fill image-heavy layout. Still, Lam, who came to Gizmodo from Wired in 2006, pushed founder Nick Denton to fund original art. “Every year, we discuss budgets, and I said, ‘You really think another writer on top of a ten-person staff is going to make a difference?’” Lam recalls. In 2007, Gizmodo brought on Jesus Diaz, a writer and editor with a background in visual and graphic arts. He frequently built images in Photoshop, created unique infographics and timelines. “There was a lot of punch in those posts,” Lam says of Diaz’ work. “You just start to dream visually from that point on.”

To fulfill that dream, Gawker started adding creative personnel. MacNaughton came on for a month last summer, painting 15 water colors including a biting take on the iPhone 4 and the classic infographic for No Sleep ‘Til Fusion. Chris McVeigh, who worked with Gizmodo for a couple of months, built and photographer Lego dioramas. Both artists add beautiful visual originality to text, a complement that’ll only get more vital as we move toward tablets and Internet TV.

The difference between another writer and an illustrator is most apparent with Spratt, though, who has done more than 400 pieces since July. There’s pure editorial work (like Verizon and Gaga), but he also helps make Gawker Media’s community-engagement more robust. For a Halloween contest, he painted an eerie father-and-son piece, and last month, Spratt rewarded Facebook fans by painting 14 of their profile pictures. The recent Savannah College of Art & Design grad maintains his own Facebook page — 4,300+ fans — and a formspring that attracts aspiring artists, supporters, and a more than a handful of swooning women.

The takeaway: Illustration matters

As with Gawker Artists, the company’s use of visuals makes the site more vibrant, engaging, interesting, and unique. It also allows for more flexible editorial modeling and attracts a wider audience than, in the case of Gizmodo, gadget writing alone. There is nothing to fear by bringing on illustrators. If we’re wary of mixing cartoons with traditional journalism, we shouldn’t be — just look at The New Yorker’s fantastic work, their extensive lines of mugs, diaries, prints, umbrellas, postcards, and calendars. We already know our audience loves illustrations — Avatar is the highest-grossing film of all time, and The Simpsons is the longest-running show on TV. “The longer I work at Gawker, it really encourages you to go with your gut,” says Lam. “I think that everyone should try to do this.”

August 13 2010

14:00

This Week in Review: TBD takes off, Demand Media’s profit-less past, and Google’s open-web backlash

[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]

A high-profile entry into the local news scene: One of the most anticipated new news organizations in journalism’s recent history launched this week in the form of TBD, a site owned by Allbritton Communications (the folks behind Politico) covering local news in Washington, D.C. As The Huffington Post’s Jack Mirkinson wrote, TBD is “something of a canary in the coal mine” of the future of journalism, being the protoype of a locally focused, community-driven, online-only news model whose effectiveness everyone’s eager to gauge. For the basics of the project, here are two local profiles from DCist and the more skeptical Washington Post, a paidContent interview with Robert Allbritton, a Poynter chat with TBD’s Jim Brady and Steve Buttry, and an Online Journalism Review interview with Buttry.

After TBD gave its media preview last Friday, quite a few people listed plenty of reasons to keep an eye on the site: Ken Doctor liked the “out of the box” nature of TBD’s pro-am/social/mobile/multimedia efforts; Jeff Jarvis liked the collaborative, link-centric philosophy; the Lab’s Laura McGann called attention to TBD’s interactivity and collaboration through local blogs and social media; and Kevin Anderson was impressed by the project’s commitment to profitability.

Several TBD analyses focused particularly on TBD’s interactive and collaborative news efforts, with Journalism Lives, Mashable, and Poynter providing good area-by-area breakdowns. Mark Potts, who’s starting up a similar blog-network effort, Growthspur, wrote a thoughtful piece about the importance of TBD’s own network of local blogs: “TBD is without doubt the biggest, most ambitious effort yet to create a new paradigm for local news coverage of a major metropolitan area,” he wrote.

Poynter’s Steve Myers also touched on an distinct aspect of TBD’s operation — it also includes an Allbritton-owned all-news local cable channel that will be branded TBD TV. He examined how a web-TV converged newsroom operates, and Cory Bergman of Lost Remote (a local TV and hyperlocal news veteran himself) wondered if we might see more TV-local online news partnerships. Here at the Lab, Ken Doctor took a detailed look at the economics of TBD’s web-TV synergy, centering on its pioneering broadcast and online advertising hybrid. Meanwhile, David Rothman had some detailed advice for TBD’s competitors.

The site officially launched Monday, and the initial reviews were mostly positive. Rothman and Suzanne Yada had the most detailed ones; both were impressed by the site’s presentation and several of its features, though both were concerned about how much local news content the site would actually be able to produce. PaidContent’s Staci Kramer liked the smooth design, too, but wanted to see more out of the site’s locally personalized features. Jack Shafer of Slate loved the way the site was mobile, direct and useful, especially its focus on those local-TV staples of weather, traffic, and sports.

The New York Times’ David Carr (“extremely functional…kind of ugly”) and Mediaite’s Michael Triplett (“off to a good start,” despite “thin and D.C.-centric” content) also offered quicker reviews. The most thoughtful review belongs to Lost Remote’s Bergman, who noted that while many of the ideas are old, their implementation is new. “This is the first time that a local media group — especially in the TV space — has wrapped these ideas together and aggressively launched them with an investment to back it up,” he wrote.

Demand Media’s filings raise questionsDemand Media, the new-media lightning rod du jour, filed for an IPO last Friday, giving us the first detailed financial look inside the private company. Several sites took cracks at sifting through the numbers for significant bits, but two pieces stood out: One, Demand Media has yet to make a profit, losing $22 million this year; and two, 26 percent of its revenue comes from cost-per-click advertising deals with Yahoo.

That’s a pretty sizable chunk of Demand Media’s income, and GigaOM’s Mathew Ingram examined one of the company’s reported risk factors — that Google could use its own search expertise to create a search-driven content company to compete with Demand. Ingram pointed out that Google already has a patent for a process that identifies “underserved” search content. All Things Digital noted that Demand’s heavy reliance on Google “could torpedo the company” if Google changes its search formula or changes its contract with Demand, but it also countered that every web publisher is dependent on Google.

Then there’s the whole matter of profitability. The Wall Street Journal’s Scott Austin contrasted the numbers in Demand’s filing with its executives’ numerous past descriptions of the company as profitable, as a reminder that “no one outside the company can verify a start-up’s financial claims.” Slate’s James Ledbetter also noticed an inexplicably large and sudden drop in Quantcast traffic to Demand’s sites a few weeks ago and wondered what was behind it. Meanwhile, the Journal also profiled Demand Media’s efforts to court big-time advertisers on the web.

A proposal to carve up the open web: A week after reports emerged that Google and Verizon were near a deal that would more or less mark the end of net neutrality, the two companies came forward this week not with a deal, but with a policy proposal. As for whether that would mark the end of net neutrality, well, it depends on who you ask. Google and Verizon called their plan a “proposal for an open Internet,” and their CEOs co-authored a Washington Post op-ed arguing that their proposal “empowers an informed consumer, ensures the robust growth of the open Internet and provides incentives to strengthen the networks that carry Internet traffic.” The proposal has quite a few moving parts, but it essentially prohibits Internet service providers from discriminating against or prioritizing “lawful Internet content,” while excepting wireless networks and some unspecified future services from that regulation.

The tech blog Engadget broke down the proposal, noting that would set something close to the status quo into formal policy, rendering the U.S. Federal Communications Commission powerless to change policy as the Internet changes. Most of the web was quite a bit harsher in its  judgment, calling it an open attack on net neutrality by excluding its fastest growing part, wireless. CNET and The New York Times put together good summaries of the backlash, but here are some of the most to-the-point examples: Free Press’ Craig Aaron (“one massive loophole that sets the stage for the corporate takeover of the Internet”), the Electronic Freedom Foundation (it limits net neutrality to “lawful” content, leaving “lawful” to be defined) Siva Vaidhyanathan (it gives Verizon control of the most exciting parts of the web) Public Knowledge’s John Bergmayer (it divides the Internet into several public and non-public parts) Ars Technica (its rules “will become meaningless as 4G sweeps the country”) Salon’s Dan Gillmor (“a Trojan Horse for a modern age”) Susan Crawford (future services is “a giant, enormous, science-fiction-quality loophole”) and Harvard professor Jonathan Zittrain (makes way for “an impenetrable web of contracts and fees”).

Noted Google watcher Jeff Jarvis had the most colorful response, illustrating the proposal’s potential danger to the open web by presenting a future scenario with two Internets, the old “Internet” with everything pre-2010 and the new “Schminternet,” with everything mobile and post-2010. “Mobile is the internet,” he wrote. “Mobile will very soon become a meaningless word when — well, if telcos allow it, that is — we are connected everywhere all the time.” Meanwhile, Wired gets credit for the most fun phrase — “carrier-humping, net neutrality surrender monkey” — in its explanation of how Google got to that point.

Google issued a response to the criticism on Thursday, arguing that it’s not actually leaving wireless networks free from net neutrality oversight, though GigaOM’s Stacey Higginbotham picked apart that defense, too.

Reading Roundup: A few final items to send you off for the weekend:

— Mashable’s Vadim Lavrusik has a smart overview of the shift toward personalized, socially driven news distribution, with a suggestion for a credibility and trust index to help sort through it all.

— Facebook has launched a media page and is pushing for more collaboration with media companies. PBS MediaShift’s Mark Glaser has an informative Q&A with Justin Osofsky, head of Facebook’s media partnership team.

— Google engineering intern Lyn Headley has written the first of a series of posts explaining the rationale behind his new Rapid News Awards. It’s a short, thoughtful take on aggregation, accountability and transparency.

— Finally, some (possibly) positive news: Spot.Us’ David Cohn takes a look at the data and notes that the wave of job cuts at America’s newspapers has largely subsided. Cohn wonders if it means newspapers are bouncing back, or if they’ve just cut down to the bone. I fear it’s more of the latter.

August 06 2010

14:30

This Week in Review: Newsweek’s new owner, WikiLeaks and context, and Tumblr’s media trendiness

[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]

A newbie owner for Newsweek: This week was a big one for Newsweek: After being on the block since May, it was sold to Sidney Harman, a 92-year-old audio equipment mogul who’s married to a Democratic congresswoman and owns no other media properties. The price: $1, plus the responsibility for Newsweek’s liabilities, estimated at about $70 million. The magazine’s editor, Jon Meacham, is leaving with the sale, though he told Yahoo’s Michael Calderone that he had decided in June to leave when Newsweek was sold, no matter who the new owners were. Harman’s age and background and the low sale price made for quite a few biting jokes about the sale on Twitter, dutifully chronicled for us by Slate’s Jack Shafer.

Harman didn’t help himself out much by telling The New York Times he doesn’t have a plan for Newsweek. In a pair of sharp articles, The Daily Beast painted a grim picture of what exactly Harman’s getting himself into: The magazine’s revenue dropped 38 percent from 2007 to 2009, and it’s losing money in all of its core areas. The Beast noted that with no other media properties, Harman doesn’t have the synergy potential that the magazine’s previous owners, The Washington Post Co., said Newsweek would need. So why was he chosen? Apparently, he genuinely cares about the publication, and he’s planning the least number of layoffs. (That, and the other bidders weren’t too attractive, either.) PaidContent reported that his primary goal is to bring the magazine back to stability while he sets up a succession plan.

Everybody has ideas of what Harman should do with his newest plaything: Jack Shafer tells him to treat Newsweek as a magazine to be saved rather than a fun vanity project, and MarketWatch’s Jon Friedman wants to see Newsweek drop the opinion-and-analysis approach that it’s been aping from The Economist, as do several of the observers Politico talked to. (DailyFinance’s Jeff Bercovici just wants Harman to make it a little less excruciatingly dull to read.) Two other Politico sources — new media guru Jeff Jarvis and former Newsweek Tumblr wizard Mark Coatney — want to see Newsweek shift away from a print focus and figure out how to be vital on the web. Media consultant Ken Doctor proposes pushing forward on tablet editions, multimedia and interacting with readers online as the future of the magazine. Jarvis also has some pieces of advice for magazines in general, urging to them to resist the iPad’s siren song and get local, among other things.

Poynter’s Rick Edmonds has the most intriguing idea for a new Newsweek — going nonprofit. That would likely require refining its editorial mission to a narrower focus on national and international affairs, with the pop culture analysis getting cut out, Edmonds says, but he believes Harman might actually be considering a nonprofit approach. Ken Doctor suggests that with Harman’s statements about the relative unimportance of turning a profit from the magazine, he’s already blurring the lines between a for-profit and nonprofit organization.

Meanwhile, others were busy speculating about who might be the editor to lead Newsweek into its next incarnation. Names thrown out included Newsweek International editor Fareed Zakaria, Newsweek.com editor Mark Miller, Slate Group editor Jacob Weisberg, and former Time editor and CNN CEO Walter Isaacson, though Isaacson has taken himself out of consideration.

WikiLeaks and the need for context: WikiLeaks continued to see fallout from its unprecedented leak of 92,000 documents about the war in Afghanistan two weekends ago, with more cries for it to be shut down and its founder, Julian Assange, arrested, largely because its leak revealed the names of numerous Afghan informants to the U.S. Assange expressed regret for those disclosures, and WikiLeaks said it’s even asking for the Pentagon’s help in identifying and redacting names of informants in its next document dump, though the Pentagon said they haven’t heard from WikiLeaks yet. Not that the U.S. government hasn’t been trying to make contact — it demanded the documents be returned(!), and agents detained a WikiLeaks researcher at customs and then tried to talk with him again at a hacking conference this week. An Australian TV station gave a fascinating inside look at Assange’s life on the run, and Slate’s Jack Shafer contrasted Assange’s approach to leaking sensitive documents with the more government-friendly tack of traditional media outlets. WikiLeaks also had some news to report on the business-model side: It will begin collecting online micropayment donations through Flattr.

The ongoing discussion around WikiLeaks this week centered on what to do with the data it released. The Tyndall Report provided a thorough roundup of how TV news organizations responded to the leak, and several others pinned the rather ho-hum public reaction to the documents’ contents on a lack of context provided by news organizations. Former Salon editor Scott Rosenberg said the leak provides a new opportunity to shed an antiquated scoop-based definition of news and bring the reality of the war home to people. In a smart post musing on the structure of the modern news story, the Lab’s Megan Garber proposed an outlet dedicated solely to follow-up journalism, arguing that one of the biggest challenges in modern journalism is giving a sense of continuity to long-running stories. “What results is a flattening: the stories of our day, big and small, silly and significant, are leveled to the same plane, occupying the same space, essentially, in the wobbly little IKEA bookshelf that is the modular news bundle,” she wrote in a follow-up post.

Mashable also examined (in nifty infographic form!) how WikiLeaks changes the whistleblower-journalist relationship, while NPR wondered whether WikiLeaks is on the source or journalist side of equation. And PBS’ Idea Lab had something handy for news orgs: A guide to helping them think about how to handle large-scale document releases.

Tumblr trends upward: The social blogging service Tumblr got the New York Times profile treatment this week, as the paper focused on its growing popularity among news organizations who are trying to jump on it as the next big social media trend — a form of communication somewhere between Twitter and blogging. The article noted that several prominent media brands have Tumblr accounts, though many of them aren’t doing much with theirs. Over at Mediaite, Anthony De Rosa, who runs the Tumblr account for the sports blog network SB Nation, said we can expect to see still more media outlets jump on the Tumblr bandwagon, especially because it rewards smart media companies who have a distinctive voice.

New York’s Nitasha Tiku tried to douse the hype, arguing that Mark Coatney’s often-mentioned Tumblr success for Newsweek “wasn’t thanks to the distribution channel on Tumblr, it was his irreverent, conversational style — and that will be difficult for the fresh-faced interns that old-media publications don’t pay to run their Tumblrs.” And Gawker gave us a graded rundown of traditional news orgs’ Tumblr accounts.

Two Internet freedom scares: From The Wall Street Journal and The New York Times this week came two stories that have had many people concerned about issues of freedom and the web. First, the Journal ran a series on the alarming amount of your online data and behavior that companies track on behalf of advertisers. Cluetrain Manifesto co-author Doc Searls argued that while the long-held ideal of intensely personal advertising is getting closer to reality, “the advertising business is going to crash up against a harsh fact: ‘consumers’ are real people, and most real people are creeped out by this stuff.” Jeff Jarvis was much less moved by the Journal’s reporting, mocking it as scaremongering that tells us nothing new. Salon’s Dan Gillmor fell closer to Searls’ outrage than to Jarvis’ nonchalance, and media consultant Judy Sims said this series is a window into a complex future for display advertising, one that media executives need to become familiar with in a hurry.

Second, the Times unleashed an avalanche of commentary in the tech world with a report that Google and Verizon are moving toward an agreement that would allow companies to pay to get their content to web users more quickly, which would effectively end the passionately held open-Internet principle known as net neutrality. The FCC quickly suspended its closed-door net neutrality meetings, and despite denials from Google and Verizon (which Wired picked apart), a whole lot of whither-the-Internet concern ensued. I’m not going to dig too deeply into this story here (I’d rather wait until we have something concrete to opine about), but here are the best quick guides to what this might mean: J-prof Dan Kennedy, Salon’s Dan Gillmor and ProPublica’s Marian Wang.

Reading roundup: Just a couple of quick items this week:

— Thanks to Poynter, we got glimpses of a couple of softer paid-content options being tried out by GlobalPost and The Spokesman-Review of Spokane, Washington, that might be sprouting up soon elsewhere, too. The Lab’s Megan Garber profiled one of the new companies offering that type of porous paywall, MediaPass, and All Things Digital’s Peter Kafka sifted through survey results to try to divine what The New York Times’ paywall might look like.

— Google’s social media platform Google Wave officially died this week, a little more than a year after it was born. Tech pioneer Dave Winer looked at why it never took off and drew a few lessons, too.

— Finally, the Lab’s Jonathan Stray took a look at some very cool things that The Guardian is doing with data journalism using free web-based tools. It’s a great case study in a blossoming area of journalism.

July 16 2010

06:44

GOOD ADVICE: BUY APPLE SHARES

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A very interesting analysis about Apple shares from Mark Riddix.

In summary:

“Shares of Apple Inc. dropped to $250 today. Apple’s stock has been in a steady freefall over the past 3 weeks. Shares have fallen from the $270’s and the stock has trimmed over $15 billion dollars off of its market cap…

I think that the drop in Apple’s shares is not totally due to the glitch. Apple’s shares have followed a similar pattern after the introduction of the iPad, and previous generation iPhones. Investors bid the stock up ahead of the introduction of a new product and then dump the shares after the product launch. This strategy is creating a buying opportunity for smart investors.

While Apple may have to modify existing phones or give free bumper cases to iPhone users, the fundamental growth story at Apple still remains unchanged. Consumer demand is still extremely high for the iPhone 4G and the iPad. Apple is still on pace to earn over $16 per share next year. Apple is currently trading at a significantly discounted multiple to the company’s historical P/E of 32.

If the rumors are true about Verizon getting the iPhone, that would open up a whole new market for Apple. Analysts estimate that Apple could easily sell an additional 12 to 15 million iPhones in the first year alone…

Apple may be a $230 billion dollar company but the growth is alive and well. The P/E ratio at 15 is actually lower than the company’s projected growth rate of 16.5%. Apple deserves to trade at a premium valuation not a discounted one. Even if you attached the industry average P/E and multiply it by the average earnings estimate, Apple is worth at least $350 per share.

At $250 or below, Apple is definitely a buy.

Disclosure: I do not own shares of Apple.”

He is right.

(Picture by Andrew Harrer / Bloomberg)

July 08 2010

14:00

The newsonomics of replacing Larry King

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

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

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

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

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

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

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

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

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

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

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

What might that mean?

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

Can CNN find a digital upgrade to the analog King?

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

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

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

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

April 01 2010

18:16

The Newsonomics of iPads and tablets, floor by floor

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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