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August 02 2011
Crazy move? - Bloomberg Businessweek increases paid circulation +10pc
Act of desperation or smart strategic move?
AdAge :: Magazines once pumped up paid circulation as far as they could, even if customer acquisition, paper, printing and distribution costs overwhelmed any circulation revenue they got, because advertisers seeking big audiences made it worthwhile. In a rather unusual move for the magazine business these days, Bloomberg Businessweek is increasing the paid circulation it promises advertisers to 980,000 early next year from 900,000 now, more than undoing the prior owner's rate base cut in 2006.
Continue to read Nat Ives, adage.com
January 10 2011
Applying analytics to magazine sales at Hearst
It’s safe to say that analytics are no longer online news’ equivalent of fantasy baseball circa 1998: relegated only to the geekiest corners of the operation. News editors and executives not only know what kind of hourly, daily, and monthly traffic their sites get, but they can tell you who’s their best referrer and what stories will predictably provide a pageview explosion. (Of course there’s still a debate on what role those metrics should play for news organizations.)
But what about on the print side? Specifically magazines: When it comes to newsstand distribution, the numbers are largely a guessing game. And when you’re spending millions on printing and delivering magazines, that’s an expensive guessing game.
“There’s a lot of waste, in a sense,” said Charlie Swift, vice president of database strategy and marketing for Hearst Magazines. “You may put out 10 copies, sell 4 and 6 get tossed.” The flip side, of course, being when you don’t stock enough magazines at locations where they sell out. Distribution has largely been based off previous sales at given locations, but variables can come into play, such as where magazines are placed (near the checkout vs. on a newsstand) and demographics in an area (or as Swift told me: “If you’re selling Cosmopolitan in a retirement community, that’s probably not a good idea.”).
“We believe there’s a way to make [distribution] more efficient by putting analytics behind it,” Swift told me.
All of this is why Hearst held a competition to see who could build a better analytics model to predict newsstand sales for magazines. It’s a Netflix Prize-like approach to figuring out how well a magazine will sell at a given location, based off historical sales data. There were more than 700 participants in the competition, and last month Hearst and the Direct Marketing Association awarded a team $25,000 for their formula, which generated magazine sales estimates that were nearest to actual newsstand figures. Swift said they’re looking at how they can adapt the model to distributing different titles.
They’re hoping analytics can be a way of becoming more efficient and saving money — starting by wasting less paper. According to figures provided for the competition by the National Center for Database Marketing, less than 40 percent of all copies are sold, and the magazine industry saw close to a six percent drop in newsstand sales between 2009 and 2010. Swift said using analytics benefits readers “if we can be more efficient as an industry and take costs out that are not adding to the customer.”
What’s almost ironic about magazines getting turned on to analytics is that they’re historically known for holding on to information about readers from home subscriptions, direct mail, and surveys. Swift knows this better than most; his job is a relatively new position created at Hearst specifically to look at metrics. Like many organizations, Hearst’s magazine division is in the process of building a unified customer database that ties together information like bill payments, web visits, and promotions received.
Aside from the economic benefits of getting better data, Swift said he thinks magazine publishers realize the cost of storing and managing information has gone down. They’re also taking notice of how analytics are used in making decision for news sites. “The web changes the culture too,” he said. “There’s too much information to absorb — you have to process it, have to let analytics drive it in ways.”
Photo by YoungDoo Moon used under a Creative Commons license.
December 22 2010
Martin Langeveld: Predicting more digital convergence and an AP clearinghouse, coming in 2011
Editor’s Note: We’re wrapping up 2010 by asking some of the smartest people in journalism what the new year will bring.
As we draw to a close, it’s time for this year’s predictions from Martin Langeveld, which are the closest thing we have to a tradition around here. We just posted a look back at Martin’s predictions for 2010, a year ago. Here’s what he foresees for 2011; check back next year to see how he did.
Digital convergence: News, mobile, tablets, social couponing, location-based services, RFID tags, gaming. My geezer head spins just thinking about all this, but look: All these things will not stay in separate silos. Why do you think AOL invested $50 million or more launching Patch in 500 markets, without a business model that makes sense to anyone? What’s coming down the pike is new intersections between all of these digital developments, and somehow, news is always in the picture because it’s at the top of people’s lists of content needs, right after email and search. There are business opportunities in tying all of these things together, so there are opportunities for news enterprises to be part of the action. Some attempts to find synergies will work, and some won’t.
But imagine for a moment: personalized news delivered to me on my tablet or smartphone, tailored to my demographics, preferences, and location; coupon offers and input from my social network, delivered on the same basis; the ability to interact with RFID tags on merchandise (and on just about anything else); more and more ability not only to view ads but to do transactions on tablets and phones — all of these delivered in a entertaining interfaces with gaming features (if I like games) or not (if I don’t). In other words: news delivered to me as part of a total environment aware of my location, my friends, my interests and preferences, essentially in a completely new online medium — not a web composed of sites I can browse at my leisure, but a medium delivered via a device or devices that understand me and understand what I want to know, including the news, information and commercial offers that are right for me. All of this is way too much to expect in 2011, but as a prediction, I think we’ll start to see some of the elements begin to come together, especially on the iPad.
The Associated Press clearinghouse for news. Lots of questions here: Will be it nonprofit or for-profit? Who will put up the money? Who will be in charge of it? What will it actually do? It will probably take all year to get the operation organized and launched, but I’m going to stick with the listing of opportunities I outlined when news of the clearinghouse broke. I continue to believe that the clearinghouse concept has the potential to transform the way that news content is generated, distributed and consumed. (Disclosure: I’m working on a project with the University of Missouri to explore potential business models enabled by news clearinghouses.)
Embracing real digital strategies. Among newspaper companies, Journal Register will continue to point the way: CEO John Paton ardently evangelizes for digital-first thinking — read his presentation to the recent (Nieman-cosponsored) INMA Transformation of News Summit, if you haven’t seen it. Is there another newspaper company CEO who agrees with Paton’s mantra, “Be Digital First and Print Last”? I doubt it, because what it means, in Patton’s words, is that you “put the digital people in charge, and stop listening to the newspaper people.” Most newspaper groups pay lip service to “digital first,” but in reality they’re focused on the daily print edition. And that’s why audience attention will continue to go to new media unencumbered by print, like Huffington Post, the Daily Beast, Patch, Gawker Media, and hosts of others. So for a prediction: Journal Register will outsource most of its printing, sell most of its real estate, bring the audience into its newsrooms with more news cafes like their first one in Torrington, Conn. It will announce by year end that 25 percent of its revenue is from digital sources. It will also launch online-only startups in cities and towns near its existing markets, perhaps with niche print spinoffs. And finally, toward the end of 2011, we’ll see some reluctant and tentative emulation of Paton’s strategies among a few other newspaper groups.
Newspaper advertising revenue. An extrapolation of the 2010 trend (see my 2010 scorecard) would mean 2011 quarters of, say gains of 2 percent, 4 percent, 6 percent and 8 percent. But for that to happen, marketers would have to decide, during Q4 of 2011, to direct 8 percent more money into advertising in a medium that continues to report “strategic” cuts in press runs and paid print circulation, that is not finding fresh eyeballs online, that has an audience profile getting older every year, and that has done little R&D or innovation to discover a digital future for itself. With sexy new opportunities to advertise on tablets and smartphones coming along daily, why would any brand, retailer, or advertising agency be looking to spend more in print? My prediction is for a very flat year, with the quarterly totals (for print plus online revenue) coming in at Q1: +1.5%, Q2: +2.0%, Q3: no change and Q4: -3%. That final quarter will revert to negative territory primarily because of major shifts in retail budgets to tablet and smartphone platforms and to digital competitors like Groupon.
Newspaper online ad revenue. This has been a bright spot in 2010, with gains of 4.9 percent, 13.9 percent, and 10.7 percent so far. Assume another gain in Q4. But there are several problems. First, at most newspapers a big fraction of so-called online revenue is hitched to print programs with online components, upsells, added values, or bonuses. So there’s no way to tell whether the reported numbers are real, representing actual gains purely in ads purchased on web sites, whether there’s a lot of creative accounting going on to make the online category look better than it actually is, or whether it would even exist without the print component. Secondly, there’s a lot of new competition at the local level for dollars that retailers earmark for web marketing. Groupon, alone, will do close to $1 billion in revenue this year, compared with about $3 billion total online revenue for all newspapers combined. Add the “Groupon clones” like LivingSocial, and the social couponing business is probably already at about 50 percent of newspaper online revenue, and could well pass it in 2011, very much at newspapers’ expense. That’s why I predict newspaper online revenue will be: Q1: +5.0 percent, Q2: +3.0 percent, Q3: no change and Q4: no change.
Newspaper circulation. The trendline here has been down, down, down, every six-month reporting period ending March 31 and September 30. Complicating the picture: newspapers have been selling combo packages, ABC-qualified, where a single subscriber counts for two because they are buying (sometimes on a forced basis) both a 7-day print subscription and a facsimile digital edition. Lots of inflated and un-real circulation will show up in the 2011 numbers. But if we look at print circulation alone, which ABC will continue to break out, demographics alone dictate a continuation of the negative trend. My prediction: down 5 percent in each of the spring and fall six-month ABC reporting periods. That will mean that by year’s end, print newspaper penetration will fall to about one in three households (a long way down from its postwar peak of 134 newspapers sold per 100 households in 1946).
Online news readership. There are a couple of ways to look at this. For newspaper websites, NAA recently switched from Nielsen to Comscore because they liked Comscore’s numbers better. As a base measure, Comscore is showing about 105 million monthly unique visitors and 4 billion pageviews to newspaper sites, with the average visitor spending 3.5 minutes per visit. Prediction: all three of those metrics will stay flat (plus or minus 10 percent) during 2011. The other way to look at it is: Where are Americans getting their news? The Pew Research Center looks at this on an annual basis, and in 2010 showed online, radio, and newspapers more or less tied as news sources for Americans. Is there any doubt where this is going? In 2011, Pew might add mobile as a distinct source, but it will show online clearly ahead of newspapers and radio, with mobile ascendant.
Newspaper chains. Nobody can afford to buy anybody else, and no non-newspaper companies want to buy newspapers. There might be some mergers, but really, there are no strategic opportunities for consolidation in this industry, because there are no major efficiencies or revenue opportunities to be gained. Everybody will just muddle along in 2011, with the exception of Journal Register, which as noted above will move into adjacent markets with digital products and generally show the way the rest should follow.
Stocks. The major indices will be up 15 to 20 percent by September, but they’ll drop back to a break-even position by the end of 2011. Newspaper stocks will not beat the market. Others: AOL and Google will beat the market; Yahoo and Microsoft will not.
Keeping Martin honest: Checking on Langeveld’s predictions for 2010
Editor’s Note: This year, we’re running lots of predictions of what 2011 will bring for journalism. But our friend Martin Langeveld has been sharing his predictions for the new-media world for a couple of years now.
In the spirit of accountability, we think it’s important to check back and see how those predictions fared. We did it last year, checking in on his 2009 predictions. And now we’ll check in on 2010.
Check in next year around this time as we look back at all the predictions for 2011 and how they turned out.
Newspaper ad revenue
PREDICTION: At least technically, the recession is over, with GDP growth measured at 2.8 percent in Q3 of 2009 and widely forecast in Q4 to exceed that rate. But newspaper revenue has not followed suit, dropping 28 percent in Q3. McClatchy and the New York Times Company (which both came in at about that level in Q3) hinted last week that Q4 would be better, in the negative low-to-mid 20 percent range. This is not unexpected — in the last few recessions with actual GDP contraction (1990-91 and 2001), newspaper revenue remained in negative territory for at least two quarters after the GDP returned to growth. But the newspaper dip has been bigger each time, and the current slide started (without precedent) a year and a half before the recession did, with a cumulative revenue loss of nearly 50 percent. Newspaper revenue has never grown by much more than 10 percent (year over year) in any one quarter, so no real recovery is likely. This is a permanently downsized industry. My call for revenue by quarter (including online revenue) during 2010 is: -11%, -10%, -6%, -2%.
REALITY: CLOSE, ONE CIGAR. Actuals for Q1, 2, and 3: -9.70%, -5.55%, – 5.39%. And Q4, while not a winner, will probably be “better” than Q3 (that is, another quarter of “moderating declines” in news chain boardroom-speak). So, a win on the trendline, and pretty close on the numbers.
Newspaper online revenue
PREDICTION: Newspaper online revenue will be the only bright spot, breaking even in Q1 and ramping up to 15% growth by Q4.
REALITY: CLOSE, ONE CIGAR. Actuals for Q1, 2, and 3: +4.90%, +13.90%, and +10.7%. Since Q1 beat my prediction and was the first positive result in eight quarters, I’d say that’s a win, and pretty close on the ramp-up, so far. Q4 might hit that 15%.
Newspaper circulation revenue
PREDICTION: Newspaper circulation revenue will grow, because publishers are realizing that print is now a niche they can and should charge for, rather than trying to keep marginal subscribers with non-stop discounting. But this means circulation will continue to drop. In 2009, we saw a drop of 7.1% in the 6-month period ending March 31, and a drop of 10.6 percent for the period ending Sept. 30. In 2010, we’ll see a losses of at lest 7.5% in each period.
REALITY: HALF A CIGAR. Actual drop in the March 31 period was 8.7%; actual drop in the Sept. 30 period was 5.0%. So, half a win here.
Newspaper bankruptcies
PREDICTION: I don’t think we’re out of the woods, or off the courthouse steps, although the newspaper bankruptcy flurry in 2009 was in the first half of the year. The trouble is the above-mentioned revenue decline. If it continues at double-digit rates, several companies will hit the wall, where they have no capital or credit resources left and where a “restructuring” is preferable and probably more strategic than continuing to slash expenses to match revenue losses. So I will predict at least one bankruptcy of a major newspaper company. In fact, let’s make that at least two.
REALITY: CORRECT — TWO CIGARS. Well, MediaNews Group filed its strategic bankruptcy in January, as did Morris Publishing. So this was a quick win. Canwest Ltd. Partnership, publisher of 12 Canadian papers, filed in January as well.
Newspaper closings and publishing frequency reductions
PREDICTION: Yup, there will be closings and frequency reductions. Those revenue and circulation declines will hit harder in some places than others, forcing more extinction than we saw in 2009.
REALITY: WRONG. Nope, everybody managed to hang on, nobody of any size closed.
Mergers
PREDICTION: It’s interesting that we saw very little M&A activity in 2009 — none of the players saw much opportunity to gain by consolidation. They all just hunkered down waiting for the recession to end. It has ended, but if my prediction is right and revenue doesn’t turn up or at least flatten by Q2, the urge to merge or otherwise restructure will set in. Expect to see at least a few fairly big newspaper firms merge or be acquired by other media outfits. (But, as in 2009, don’t expect Google to buy the New York Times or any other print media.)
REALITY: WRONG. Google didn’t buy the Times or any other newspaper, but by the same token, there were no significant mergers or acquisitions all year. So much for Dean Singleton’s promise of “consolidation” in the industry after MediaNews emerged from its quick bankruptcy.
Shakeups
PREDICTION: Given the fact that newspaper stocks generally outperformed the market (see my previous post), it’s not surprising that there were few changes in the executive suites. But if the industry continues to contract, those stock prices will head back down. Don’t be surprised to see some boards turn to new talent. If they do, they’ll bring in specialists from outside the industry good at creative downsizing and reinvention of business models. Sooner would be better than later, in some cases.
REALITY: NOT FLAT WRONG, BUT NOT CLOSE. Perhaps the closest any company came to truly shaking things up was Journal Register Company, which in January appointed as its CEO John Paton, an executive with experience in Hispanic media. He’s not an outsider, but he’s preaching a very different gospel that includes a clear vision for a web-based future for news. Elsewhere, Tribune, still dealing with bankruptcy, tossed CEO Randy Michaels, not for strategic reasons but because accusations of sexism and other dumb behavior were “tarnishing” the company’s name.
Hyperlocal
PREDICTION: There will be more and more launches of online and online/print combos focused on covering towns, neighborhoods, cities and regions, with both for-profit and nonprofit bizmods. Startups and major media firms looking to enter this “space” with standardized and mechanized approaches won’t do nearly as well as one-off ventures where real people take a risk, start a site, cover their market like a blanket, create a brand and sell themselves to local advertisers.
REALITY: CORRECT. This is happening in spades. AOL’s Patch launched hundreds of sites. It may be a “standardized” approach, but it’s not “mechanized,” and hired more journalists than any company has in decades. At the same time, one-off ventures continue to sprout in towns and cities everywhere.
Paid content
PREDICTION: At the end of 2008, this wasn’t yet much of a discussion topic. It became the obsession of 2009, but the year is ending with few actual moves toward full paywalls or more nuanced models. Steve Brill’s Journalism Online promises a beta rollout soon and claims a client list numbering well over 1000 publications. Those are not commitments to use JO’s system — rather, they’re signatories to a non-binding letter of intent that gives them access to some of the findings from JO’s beta test. Many publishers, including many who have signed that letter, remain firmly on the sidelines, realizing that they have little content that’s unique or valuable enough to readers to charge for. JO itself has not speculated what kind of content might garner reader revenue, although its founders have been clear that they’re not recommending across-the-board paywalls. So where are we heading in 2010? My predictions are that by the end of the year, most daily papers will still be publishing the vast majority of their content free on the Web; that most of those experimenting with pay systems will be disappointed; and that the few broad paywalls in place now at local and regional dailies will prove of no value in stemming print circulation declines.
REALITY: CORRECT. Most papers are still publishing the vast majority of their content free on the web. ALSO CORRECT: Broad paywalls have done little to stem the decline in print. JURY STILL OUT: But it’s too soon to tell whether those experimenting with paywalls are disappointed. All eyes are on the impending paywall start at the New York Times.
Gadgets
PREDICTION: The recently announced consortium led by Time Inc. to publish magazine and (eventually) newspaper content on tablets and other platforms will see the first fruits of its efforts late in the year as Apple and several others unveil tablet devices — essentially oversized iPhones that don’t make phone calls but have 10-inch screens and make great color readers. Expect pricing in the $500 ballpark plus a data plan, which could include a selection of magazine subscriptions (sort of like channels in cable packages, but with more a la carte choice). If newspapers are on the ball, they can join Time’s consortium and be part of the plan. Tablet sales will put a pretty good dent in Kindle sales. One wish/hope for the (as yet un-named) publisher consortium: atomize the content and let me pick individual articles — don’t force me to subscribe to a magazine or buy a whole copy. In other words, don’t attempt to replicate the print model on a tablet.
REALITY: CORRECT, MORE CIGARS. My iPad description and data plan price point were right on the mark. It’s hard to say for sure whether iPad sales have put much of a dent in Kindle sales, since Amazon doesn’t release numbers, but Kindle sales are way up after a price cut. The magazine consortium, now called Next Issue Media, still has no retail product, but it does look like it intends to “replicate the print model on a tablet” rather than recognizing atomization. Meanwhile, the Associated Press is recognizing atomization with its plan for a rights clearinghouse for news content.
Social networks
PREDICTION: Twitter usage will continue to be flat (it has lost traffic slowly but steadily since summer). Facebook will continue to grow internationally but is probably close to maxing out in the U.S. With Facebook now cash-flow positive, and Twitter still essentially revenue-less, could Zuckerberg and Evan Williams be holding deal talks sometime during the year? It wouldn’t surprise me.
REALITY: WRONG, MOSTLY. Twitter is still fairly flat in web traffic, but it’s growing via mobile and Twitter clients, so its real traffic is hard to gauge. No talks between Twitter and Facebook, though.
Privacy
PREDICTION: The Federal Trade Commission will recommend to Congress a new set of online privacy initiatives requiring clearer “opt-in” provisions governing how personal information of Web users may be used for things like targeting ads and content. Anticipating this, Facebook, Google and others will continue to maneuver to lock consumers into opt-in settings that allow broad use of personal data without having to ask consumers to reset their preferences in response to the legislation. In the end, Congress will dither but not pass a major overhaul of privacy regs.
REALITY: CORRECT. Indeed, we don’t have any major overhaul by Congress, but we’re actually seeing more responsible behavior from all of the big players with regard to privacy, including better user controls on privacy just announced by Microsoft.
Mobile
PREDICTION (with thanks to Art Howe of Verve Wireless): By the end of 2010 a huge shift toward mobile consumption of news will be evident. In 2009, mobile news was just getting on the radar screen, but during the year several million people downloaded the AP’s mobile app to their iPhones, and several million more adopted apps from individual publishers. By the end of 2010, with many more smartphone users, news apps will find tens of millions of new users (Art might project 100 million), and that’s with tablets just appearing on the playing field. During 2009, Web readership of news (though not of newspaper content) overtook news in printed newspapers. Looking out to sometime in 2011 or 2012, more people will get their news from a mobile device than from a desktop or laptop, and news in print will be left completely in the dust.
REALITY: JURY STILL OUT, BUT LOOKING CORRECT. To my knowledge, nobody has a handle on how many news apps have been sold or downloaded, but certainly it’s in the tens of millions, counting both smartphone and tablet apps. One the other hand, a lot of people with apps on their phones don’t use them. As to where mobile ranks among news delivery media, the surveys haven’t picked up the trends yet, but wait till next year.
Stocks
PREDICTION: I accurately predicted the Dow’s rise during 2009 and that newspaper stocks would beat the market (see previous post), but neglected to place a bet on the market for 2010, so here goes: The Dow will rise by 8% (from its Dec. 31 close), but newspaper stocks will sink as revenue fails to rebound quarter after quarter.
REALITY: ON THE MONEY. As of mid-afternoon December 15, the Dow is up 10.19% for the year, so I claim a win on that score. The S&P 500 is up 11.11%, and the NASDAQ is up 15.63%. Among newspaper groups, McClatchy (up 33%), Journal Communications (up 26%) and E.W. Scripps (up 44%) handily beat the market, but all the other players indeed sank or underperformed the market: New York Times Company is down 23%, News Corp. is up 5%, Lee Enterprises is down 30 percent, Media General is down 30% and Gannett is up 4%.
December 15 2010
Case Study – Two political blog articles which went viral
One of the areas which interests me is how independent publishers can cut through to build an audience, or drive a story into the wider public arena. This is a cross-post from the Wardman Wire.
Two articles from the last month by the Heresiarch and Anna Raccoon form an interesting study in articles by political bloggers which gained widespread attention. Both of these pieces went viral via Twitter, rather than Facebook or any other social network.
Firstly, a piece, which caught the moment when the conviction of “Twitter Terrorist” Paul Chambers was confirmed. This piece achieved almost 1000 retweets.
This is the headline and abstract:
Heresy Corner: With the Conviction of Paul Chambers, it is now illegal to be English.
There is something deeply and shockingly offensive about the conviction of Paul Chambers for his Twitter joke, almost unbelievably reaffirmed today at the Crown Court in Doncaster. It goes beyond the normal anger anyone would feel at a blatant injustice, at a piece of prosecutorial and judicial overkill that sees the might of the state pitted against a harmless, unthreatening individual for no good reason.
Secondly, a piece from Anna Raccoon last week, about the case of Stephen Neary, who seems to have been caught up in a bureaucratic whirlpool through his autism:
The Orwellian Present – Never Mind the Future.
Steven Neary, Deprivation of Liberty Safeguards, Welfare Deputyships and The Court of Protection
These numbers of tweets are 50-100 times more than will be achieved by a reasonably well-received article. As a comparison the last 6 articles on the Heresy Corner homepage this morning are showing 3, 5, 4, 9, 40 and 2 retweets.
My observations:
1 – Both are non party-aligned writers embedded in the political blog niche, but also cover political questions from a position of non-political knowledge, with a degree of authority/respect which has come from their own work over two years or more.
2 – In these instances, both are amateur or professional subject specialists in the areas they cover here, and have an established readership who are able to give a boost to a piece in the social media nexus. As a comparison, in the world of Internet Consultancy much time (and money) is spent trying to build initial traction for articles and websites to give them a boost into wider internet prominence.
3 – The importance of “connectors”. Anna Raccoon’s piece received a significant boost from Charon QC, who provides an important hub-site in the legal niche – which of course is one place where a real difference can be made to Stephen Neary’s situation.
4 – The “edge of the political blogosphere” has become very important – both for specialist sites writing about political questions, and political blogs who “do more than politics”.
5 – These are two different types of article. The Heresy Corner summarised the online reaction to the “I’l blow you’re airport sky high” Twitter Joke Trial case at the right time to catch the Zeitgeist, while Anna Raccoon’s piece is a campaigning piece trying to direct attention to a particular case, in an area of society she has written about on perhaps a dozen occasions.
6 – Several legal commentators (eg Jack of Kent in addition to Charon) have pointed out (correctly) that for campaigning piece to convert attention into action, there needs to be more complete information about both sides of the story. A spotlight can be directed onto a perceived abuse, but there needs to be objective investigation afterwards.
That is a good distinction; but the rub is that officialdom can prevent both sides of the story being available to the public, and often only react to media spotlights – not to problems which they have not been embarrassed about.
7 – Neither of these bloggers are deeply embedded in the Facebook ecosystem, which is a distinct difference from some other mainly political sites, which report Facebook as a major source of traffic (example). I’ll write more on this another time, because I think it is important.
8 – During November, when the Paul Chambers piece was published, Heresy Corner jumped from 134 in the Wikio blog ranks to number 15 (illustrated). This was after changes which introduced a “Twitter” factor into the Wikio rankings. I’d suggest that this level of volatility may illustrate that they’ve overdone it.
Wrapping Up
The missing link for independent publishers is the ability to translate incisive observation or reporting into an effective influence.
I’ll return to that subject soon.
Can I ask a favour from brave souls who’ve reached the end of this article. I need a couple of dozen Facebook “Likes” for my own site’s new Facebook page to gain access to all features. You can “Like” me at the bottom of the rh sidebar here.
November 22 2010
How much can we trust e-edition numbers? Depends on the paper
The latest numbers from the Audit Bureau of Circulations, tracking from March 2009 to September 2010, show a major proliferation in the number of e-editions reported by newspapers. Nearly 450 papers currently have weekday e-editions, which tallies to over 2 million subscribers and a 47-percent increase since this time last year.
As print circulation falls, e-editions swell in numbers. Not so startling. But the data can be misleading: Ballooning e-edition numbers don’t necessarily point to wholesale reader rejection of print, or even widespread usage of e-editions. For some local newspapers, if you want a print subscription, newspapers make it very financially agreeable — and in some cases give you no choice — to throw on an e-edition subscription as well.
Look no further than some of the smaller-market papers that cracked paidContent’s top-25 chart of newspaper e-edition subscriptions. Like, say, number 18, The Bend Bulletin, which grew from 1,108 e-edition subscriptions to 24,611 between Sept. 2009 and Sept. 2010. That’s an increase of over 2,000 percent (!) for a company that doesn’t circulate more than 35,000 weekday papers. But local Bulletin readers don’t even have the option of a print-only subscription, according to the paper’s website: It’s an e-edition or bust.
Or take number 25, The Schenectady Gazette. After launching a free site three years ago, the paper put up a paywall 18 months later and began offering a weekly print-plus-e-edition subscription package for one penny more per day than the print-only option — $3.99 versus $4.00 a week. You’d be hard pressed to find a better way to spend 52 cents a year.
Around the time the Gazette changed its subscription offering, weekly paid print circulation sat at 45,421. By September 2010, that number jumped by 16,052, nearly 35 percent. In roughly that same period, Gazette e-edition circulation increased by 17,796. The paper’s e-edition actually generates ad revenue by proving to potential advertisers that readers are local, Gazette general manager Dan Beck told me. “We have created, in an odd way, a more valuable reader to our advertisers,” Beck said. “We know they are our readers and they are local, they’re from here.”
“My overall sense is that this is more about marketing and new, more favorable metrics for newspaper companies than any kind of dramatic change in reading habits,” says Newsonomics author and Lab contributor Ken Doctor. Indeed, it’s difficult to tell whether e-edition subscriptions equate in any way to usage. Doctor cites “the snowbird reader of a northern paper” as one possible explanation.
The traditional e-edition essentially replicates the print product in digital format; ABC numbers cover these replicas, plus non-replica e-editions, like The Wall Street Journal and the soon-to-be-paywalled New York Times. ABC tracking includes online-only and Kindle subscriptions, which exist on a different account than print subscriptions, and products like TimesReader or GlobeReader as well.
All but two of the top 25 saw percentage increases in that September-to-September period, a phenomenon Doctor partly attributes to the slew of subscription bundles that surfaced over past year. He suggests the conventional e-edition isn’t attractive enough to compete with tablet versions as they continue to improve: “It’s a small, niche product, useful to those who like the newspaper in the format of the print paper. As tablets offer greater choice as digital news reading devices, e-editions will probably wither.”
We’ll see in March 2011, when ABC begins itemizing its e-edition circulation report by weekly subscription versus single-issue purchases, university subscriptions, and mobile readership.
September 23 2010
The Newsonomics of Apple’s “digital circulation” share
[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.]
So the newspaper business is now figuring out how to deal with a new middleman, Apple. The last decade has been about moaning and groaning about The Google, how it has become the mass medium, leaving newspapers in the niche, and how it has gotten the big share of digital ad revenue as an aggregator while news creators have gotten the short end of the hockey stick. The new decade looks like it’s bringing up a suite of similar questions, with Apple first in focus (and maybe Facebook coming next).
Just when newspaper companies thought they’d seen a big, new opportunity to establish strong new reader revenue lines on the tablet, their dreams have hit the pause button. Apple says it wants 30 percent of that emerging reader revenue — including ongoing digital subscription streams — telling publishers that they, like everyone else, have to go through the App Store to do the transaction, giving Apple its due cut. Publishers are now figuring outhow to respond, and as they do, let’s look, briefly, at four sets of numbers that tell us why this Apple/newspaper company tiff matters so much. Within those four sets, we can see the emerging newsonomics of tablet reader revenue.
- Let’s start with a global number: $34 billion. That’s the amount of circulation revenue — almost all of it print-based — that newspaper companies around the world took in last year, according to research I do annually for Outsell. That number is about 34 percent of total newspaper company revenue, which came in at $99.8 billion. So if it is newspapers’ strategy to transition paying readers to digital devices, charging them along the way, some part of that $34 billion will move to tablets, ereaders, iPads, Streaks, and whatever the next generation of devices are called. If Apple snapped its fingers and transformed the print industry tomorrow, its 30-percent take would be $10.2 billion. That’s a fantastical number, of course: No fingers can be snapped, not all print readers will transition, pricing will change, and so on. But we can see globally how much money may be in play over time.
- Let’s move to a real-life example, The Wall Street Journal’s $17.29 monthly iPad subscription rate. It’s reportedly sold well, though we don’t have good numbers on it. It’s the major standalone, separately priced news app, and that got it a lot of attention when it was announced. While we can debate the merits of standalone iPad pricing vs. bundling the price with print/web/smartphone access, the pricing itself is of interest. The Journal understands that some readers will abandon print for the iPad. When they do, the Journal doesn’t want to exchange print circulation dollars for iPad pennies. An annual iPad subscription costs $207.48. That compares to $249 for the print edition, although the Journal’s been doing a lot of heavy discounting of its flagship paper. The Journal’s iPad pricing, which itself can be discounted over time as print is, is intended to ease that circulation revenue transition. At $208 a year, Apple would presumably take $62. Overall, the Journal counts more than 2 million in circulation, with more than 400,000 of those online-only and Kindle subs. Pricing will change over time, but just take those 400,000. If they all wanted tablet access, that could amount to $24.8 million a year for Apple.
- Let’s move on to the New York Times, the company that is going “paid” early next year, and has the best chance of any U.S. general (non-financial) newspaper to pull it off. For the first six months of the year, the Times itself (not the other newspapers the company owns) took in $346 million in circulation revenue. Currently, its web content is free. Let’s say that it prices in a similar fashion to the Journal, keeping about the same amount of revenue as it goes digital and that 10 percent of its sales are on an Apple tablet a couple of years from now. That would mean about $35 million in iPad circulation revenue for a half a year, or $70 million for a full year. Apple’s take of that: $21 million.
- Finally, let’s look at Apple and the music industry. Today, Apple’s iTunes pulls in about 28 percent of all music sales in the U.S., or seven-tenths of the total 40 percent of U.S. music sales that are now digital. It took Apple seven years to get there, from a dead start. Of course, the music and news businesses are completely different, right? We can name the differences, but let’s concentrate on the main thing they have in common: Many consumers love digital delivery. So that migration — from analog medium (CD, newspaper) to a suitable, finally-it’s-arrived digital device (iPod, iPhone, tablet) — may be another guide that’s useful.
Those 40 percent (of total U.S. music sales) and 28 percent (Apple’s share of overall music sales) numbers are ones to note. If they held true for news reading, then by 2017, we can be assured of one thing: Apple’s share of news “circulation” revenue would be mind-bending.
August 05 2010
The Newsonomics of the fading 80/20 rule
[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.]
Jim Moroney thinks he may be on to a new formula. It’s not as great — not nearly as profitable — as that old newspaper formula, but it’s one that may sustain his company into the future.
“The Dallas Morning News now gets 38 percent of its revenue from circulation, 54 percent from advertising, and 8 percent from contract printing plus,” the Morning News’ publisher tells me.
Those numbers are a far cry from the way it used to be for newspaper companies. They long used one of the many 80/20 rules out there: 80 percent of their revenue came from advertising, and 20% came from circulation.
Now, as ad revenue has been on a precipitous decline — down from almost $50 billion in 2000 to $24 billion in 2009, and still sliding a bit more — that old formula is out the window.
While the digital news world seems consumed with conversations about paywalls and memberships, it is old-fashioned print circulation revenue that is the gainer in the post-80/20 formulas. Sure, advertising’s ski slope decline has greatly altered the 80/20. So has, though, the significant up-pricing of both subscriptions and single copies over the past three years.
At the Morning News, Moroney — aided by research from consumer products company The Modellers — took monthly subscriptions from $18 to $30, in one fell swoop. Many other publishers have upped prices, though most have done it more gradually. Pick up a slim copy anywhere in your travels, and you see it now costs 75 cents or a buck; it used to be the “25-cent or 35-cent?” discussion that consumed executive committees.
The impact of the pricing moves is still uncertain. Short-term, they seemed to work. Though circulation continued to decline, circulation revenue was mildly up. The central notion: Get those with the newspaper habit to pay more of the freight, figuring that few would drop the newspaper because it cost two Grande Mochas more.
As we look at last quarter’s financial reports, we have to wonder how the up-pricing of circulation will work. As many companies showed a decline in circulation revenue in the second quarter as showed an increase.
A few of the numbers:
- McClatchy: down 2.5%
- Lee: down 4.4%
- Gatehouse: down 2.5%
Moroney’s own company, A.H. Belo, of which he is an executive vice-president, reported a 6.6-percent increase. Additionally, The New York Times Company reported a 3.2-percent increase and Scripps a 4.5-percent increase (from 1st quarter data; 2nd not out until Aug. 9). Significantly, I think, each of those companies may have done a better job of minimizing newsroom cuts and reinvesting — at least a little — in that now higher-priced product.
While the jury is out on the stickiness of price increases, it’s clear the old 80/20 rule is gone.
Broadly, in research I conduct annually for Outsell, we track the global moves in ad, circulation and digital revenue. In 2009, circulation revenue was up more than a point over 2008 to 41 percent. Significantly, Japanese publishers continue to get a majority of their revenue from circulation, while much of Europe and UK see their percentages in 35-45 percent range.
ln the U.S., let’s just pull some data from the second-quarter reports. They show:
- New York Times: Circ: 40%, Ads: 53%, Other: 7%
- Scripps: Circ: 28%; Ads: 67%; Other: 5%
- Gatehouse: Circ: 27% , Ads: 71%, Other 2%
- Lee: Circ: 24%, Ads: 70%, Other: 6%
- McClatchy: Circ: 20%; Ads: 76%, Other: 4%
Several factors will continue to push and pull the new ad/circ breakdown.
For one thing, we’re moving into an era of “reader revenue,” one that will roll up print subscriptions, single print copies, digital pay per view, digital subscriptions, all-access (across platform) subscriptions, memberships and more. For a next generation of reader revenue, tablet access is the big prize in the sights of publishers; witness, for instance, the likelihood of a News Corp. “iPad division.” Further, advertising will continue morph greatly, as digital marketing replaces some of that spend, enlarging and changing definitions.
Finally, don’t forget “other.” For A.H. Belo, it’s 8 percent now, but growing at at 35-percent clip. As news companies find “other” ways to make “other” revenue, we’ll see new formulas begin to make sense.
July 23 2010
NYT second-quarter operating profit more than twice 2009 figure
The New York Times Company has reported operating profit for the second-quarter rose to $60.8 million from $23.5 million in the same period the previous year, excluding some special items. The figures show the first increase in quarterly revenue since 2007, as a growth in digital advertising halted decline in print advertising.
The company NYT statement also showed that second-quarter revenue had risen to $589.6 million from $584.5 million one year ago. However, net income dropped to $32 million from $39 million year-over-year.
Digital advertising revenue rose 21 per cent, making up 26 per cent of total ad revenue compared to 22 per cent the year before. They also reported that print advertising has improved, from a 12.3 per cent downturn in the previous quarter, to six per cent.
The company also gained a 3.2 per cent rise in circulation revenue, put down to higher subscription and newsstand prices for both the Times and the Globe.Similar Posts:
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May 04 2010
Moderating declines: Parsing the NAA’s spin on newspaper circ data
Newspapers could borrow a line from a recent Dilbert comic strip: “We’ve been doing great since we redefined success as a slowing of failure.” Or perhaps it was the other way around, and Dilbert creator Scott Adams was inspired to write that line in a recent strip by the inventive terminology of newspaper executives describing “sequential improvement” and “moderating declines” in their revenue trends despite continuing losses in the double digit range.
Currently, the industry is reporting first-quarter earnings, and last week the Audit Bureau of Circulations released unaudited “publisher’s statements” reporting paid circulation for the six months ending March 31. The numbers are down, but the spin is up.
On the circulation front, the Audit Bureau of Circulations reported that circulation fell 8.7 percent on weekdays and 6.5 percent on Sundays, among newspapers filing publisher’s statements. This compares with drops of 10.6 percent weekdays and 7.6 percent Sundays for the prior six-month period, enough of an improvement for Newspaper Association of America CEO John Sturm to declare that “the data indicates the declines are moderating.”
Actually, it’s hard to discern real moderation in the rate of decline. The losses in the most recent period are indeed a bit less severe than those in the prior (Sept. 30) period, but they are worse than the drop in the period before that, or in any previous period. If we ignore the Sept. 30 data as an outlier, we actually have a trend that’s been worsening steadily for the last six years:
Nothing about that final uptick indicates that it’s a reversal of the trend — it would take two or three periods of “improvement” in the form of “moderating declines” to make that a valid conclusion. In fact, both of the upticks in the trendline disappear if we take the statistically reasonable step of averaging spring and fall six-month circulation changes into annual figures and graphing those:
Moreover, viewed in long-term context, this latest minor slowdown in the rate of decline disappears entirely when newspaper circulation is viewed in the context of population: Since 1945, the number of papers sold per 100 households has dropped steadily, declining in 61 of the last 64 years.
(The circulation numbers on which this chart is based come from Editor & Publisher via NAA; E&P hasn’t released its Yearbook with a 2009 figure, so 2009 is my estimate based on the last two ABC cycles and estimated census households.)
It’s also quite possible that the uptick is entirely the result of some of the new options newspapers have in counting their circulation. Some of the declines of the past few years have come from ditching distribution in unprofitable outlying areas, and cutting back on “third-party” programs in which advertisers were persuaded to pay for bulk distribution, free to recipients, at community events or door-to-door in targeted areas. The value of this circulation was always questionable, but now ABC rules are permitting substitution of new forms of questionable circulation.
Take, for instance, the Bend (Ore.) Bulletin, where weekday circulation grew 34.3 percent. How? Since Jan. 1, with ABC approval, the paper has been counting e-subscriptions sold to current print subscribers for an extra 50 cents per month. As long as the subscriber can choose to opt in or out of the added digital subscription, the e-subscription counts as one paid subscription in addition to the printed one, even if the customer never accesses it. Applying this stratagem for only three months of six-month reporting period, the Bulletin tacked 12,462 weekday e-subs to its “core” print circulation of 29,072 (which is actually down by more than 1,000 from 30,155 a year ago). And next time around, counting the e-subs for six full months, it expects to report circulation of about 54,000.
How much of that is going on, and to what extent is it responsible for that uptick? I haven’t delved into the data, but Paid Content did, and reported that e-edition circulation was up significantly: the digital editions of the top 25 newspaper e-editions rose 40 percent, from to 1,363,212, versus 973,721 a year earlier.
There’s are other questionable figures being circulated, as well. In his statement on the ABC data, Sturm also cited readers-per-copy data that appears, at first glance, to mitigate the downward trend in copies sold: “Newspaper print products are also finding their way into more people’s hands, with readers-per-copy increasing by 7.5 percent in just the last three years to 3.3 adults on average, according to a recent analysis from Scarborough Research and Newspaper National Network LLP.” Here’s the graph:
Missing from this statement is the important qualifying statement that the Scarborough study applies to 25 selected “top markets,” not to all newspapers.
For its report (PDF download), Scarborough chose the 25 largest newspapers omitting “national” newspapers (New York Times, Wall Street Journal, and USA Today), as well as omitting papers in the midst of major circulation pattern transitions (Denver Post, Detroit Free Press, Philadelphia Inquirer, San Jose Mercury-News, Seattle Times and Seattle Post-Intelligencer).
In response to email inquiries, NAA’s research director Jim Conaghan and communications chief Jeff Sigmund defended Sturm’s statement. “He correctly cites the Scarborough research,” Conaghan wrote. “John Sturm’s statement references research conducted by Scarborough which was based on an analysis of the top 25 markets,” Sigmund wrote. But Sturm’s statement leaves out the important qualifier of the 25 markets. Conaghan also wrote to me: “You need to carefully read what is contained in the Scarborough report. Large markets/papers, survey data. The old NAA estimates were derived by a different method, and would represent total U.S.” By “old NAA estimates” he meant a 2007 report available at the NAA site that found 2.128 readers per copy weekdays and 2.477 on Sunday. (That study, in a footnote, discounts the validity of the Sunday number, stating: “Projection relatively unstable for Sunday RPC. Use with caution.”
Now, as that quote suggests, readers-per-copy (a.k.a. the “pass-along rate”) is a notoriously difficult thing to measure. But it has been tracked by Scarborough and others for a very long time and has been pretty consistently cited (and drilled into the heads of newspaper advertising representatives) as being around 2.3, plus or minus a point or two. This allowed salespeople for a 30,000-circulation newspaper to tell retailers that readership was actually about 75,000. The readers-per-copy factoid was included for years in NAA’s own “Facts About Newspapers,” a vest-pocket sized booklet of data distributed annually to advertisers and publishers. In 2000, Facts About Newspapers claimed 2.1 readers per copy, and 2.2 on Sundays. In 2004, it was 2.3 on weekdays, 2.4 on Sundays. In 2007, as cited above, it was 2.1 weekdays and (with a grain of salt in the NAA footnote) 2.5 on Sundays. When I started in the business, in the late 1970s, I recall that it was 2.6. In 1983, Scarborough and Simmons both came up with about 2.7, but that was noted as seeming to be on the high side. The average U.S. household is about 2.57 people, another reason why any reader-per-copy finding above that level is questionable. I think Conaghan is right on the money to say that Sturm’s claim of 3.3 can not be applied to any markets outside the those selected 25 and that reality is still in range of 2.2 to 2.5 as it has been for 50 years.
Sturm also pointed to the online newspaper audience, stating: “The latest Nielsen Online data found that newspaper websites attracted a record 74.4 million unique visitors per month on average in the first quarter of 2010 — more than one-third (37 percent) of all Internet users.” Left unsaid: the monthly UV average for this quarter was probably boosted in February by traffic related to the Olympics. The February UV count was 76.1 million, an all-time high. In March, with 10 percent more days than February, UV’s were 5 percent lower at 72.1 million.
But everyone knows by now that UVs are not a very good indicator, and “time spent on site” is what counts, at least if you’re trying to sell advertising. By that score, Q1 did not shape up very well for newspapers: in January, the average visitor spent 33:09 minutes at newspaper sites, in February, 29:06 minutes, and in March 32.21 minutes. These are three of the four shortest attention spans recorded by Nielsen Online for NAA since January 2004 (with the caveat that data before June 2009, which showed significantly higher times spent, was based on a different survey sample and can’t be compared with later stats).
Here’s the trend line for attention, or time spent, at newspaper websites since the June 2009 methodology change.
When that trend starts to demonstrate clear and strong “sequential improvement,” newspapers will have something to shout from the rooftops.
May 03 2010
The Newsonomics of reborn newspaper profit
[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.]
The first quarter newspaper numbers are in. They paint a consistent picture.
Across the board, the reporting of public news companies reflects a new, if unsteady reality. In short, that reality is one of profit. Not the big profit of 20-percent-plus profit margins — the envy of many other industries — that were a truism as recently as five years ago. Now, the profit’s more tepid, mostly in single digits: The New York Times, 8 percent; Gannett, 8 percent, McClatchy, 1.5 percent. Expectations run that news companies will show a five to 10 percent profit for the year, absent unforeseen calamity.
But that mild profit is good news. Recall that a year ago, much of the industry was in freefall. A number of companies — stunned by the quick near-Depression downturn of ad revenues — went operationally into the red. They responded with draconian cuts in staff and newsprint, and as the recovery has emerged, they’ve positioned themselves as smaller but profitable companies, though their first-quarter revenues still largely lagged the first quarter of the horrific Q1 2009. Wall Street has rewarded them with improved credit ratings and advanced share prices. There seems to be, say investors, some future here. This week’s tenacious auction in Philadelphia with lenders led by the Angelo Gordon private equity company — now a big player in the U.S. daily business — winning the papers with a $135 million bid only reinforces the notion that newspaper valuation may have been trashed too much.
It’s a fragile stability. One big question for all publishers: where do we go from here?
Here the newsonomics are constrained. While Google is off buying a company a month and Apple charts its own strong growth path, most newspaper companies have little room to maneuver. Sure, the private Hearsts — a diversified media company with newspaper interests — can invest in new companies and technologies, but for publicly owned newspaper companies, it’s a different story.
First off, their meager profits are uncertain. They then face three ways to use those profits. The three:
- Debt reduction: Debt has been the anchor around many newspaper companies’ necks, as those that borrowed to complete acquisitions reeled as the business changed and then the economy tanked. Thirteen newspaper companies have declared bankruptcy, with that clean-up continuing. Yes, they’ve discharged a lot of debt (Alan Mutter tracks the $1.9 billion discharged in just four of the bankruptcies), but almost everyone — those now out of bankruptcy and those that avoided it — still has debt service to bear. In most cases, it is reduced, given either bankruptcy or workouts with lenders, which extended payments. Debt reduction remains not only a necessity, but a strategic goal. In most quarterly reports, news company CEOs trumpet their abilities to reduce debt, a sign of their revitalization — and an indication they hope to have more maneuvering room in the future. New York Times Co. on its 1Q debt picture: “The Company continues to improve its liquidity, reducing its debt, net of cash and cash equivalents by approximately one third to $671 million from its balance at the beginning of 2009. The majority of the Company’s debt matures in 2015 or later.” Over at Gannett, CEO Craig Dubow made a prominent point of his company’s recent $260 million quarterly debt reduction. Much of McClatchy’s first quarter statement focused on debt reduction and its refinancing.
- Product investment: Publishers don’t have to look much beyond their own recent FAS-FAX circulation numbers — another 8.7-percent daily decline — or their talks with community members. They realize their major cuts in staff and product has diminished their business prospects; they’ve cut into bone, in parlance you often hear. A few companies, including Belo and MediaNews, have cautiously added back a little staff here, a little newshole there. They’d like to invest more in product, but agreements with lenders and their own sense of how fragile the newspaper recovery is holds them back.
- Profit improvement: These are, after all, public, for-profit companies. Investors of all kinds expect them to grow their profits, after re-establishing the stability of them.
To put it simply, at this point, there’s not enough profit to satisfy all three goals. So, in 2010 — a year crying out for investment in innovative mobile media product creation and marketing services/advertising infrastructure build-out — news companies have far fewer resources than they’d like and they need. While once they were the big guys, looking at buying startups, for now, they’re largely on the sidelines, marveling at the mojo, the profits, and the acquisitions of the Googles and the Apples.
March 15 2010
Globe and Mail: Misunderstanding web metrics can cause lazy journalism
Interesting column from Roy MacGregor for Canada’s Globe and Mail on the damage that chasing ‘hits’ online can do to journalism and why circulation and web traffic should not be confused with circulation:
Why be a storyteller when a ranter will have far more traffic? Why be investigative when instigative is a far quicker route to success on the web?
(…) It is a terrible vision of what journalism could evolve into as it enters a world it so desperately wishes to own, but has little idea of what the available measures in this digital world actually mean.
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February 05 2010
This Week in Review: Google’s new features, what to do with the iPad, and Facebook’s rise as a news reader
[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 gaggle of Google news items: Unlike the past several weeks with their paywall and iPad revelations, this week wasn’t dominated by one giant future-of-media story. But there were quite a few incremental happenings that proved to be interesting, and several of them involved Google. We’ll start with those.
— The Google story that could prove to be the biggest over the long term actually happened last week, in the midst of our iPad euphoria: Google unveiled a beta form of Social Search, which allows you to search your “social circle” in addition to the standard results served up for you by Google’s magic algorithm. (CNN has some more details.) I’m a bit surprised at how little chatter this rollout is getting (then again, given the timing, probably not), but tech pioneer Dave Winer loves the idea — not so much for its sociality but because it “puts all social services on the same open playing field”; you decide how important your contacts from Twitter or Facebook are, not Google’s algorithm.
— Also late last week, several media folks got some extended time with Google execs at Davos. Guardian editor Alan Rusbridger posted his summary, focusing largely on Google’s faceoff with China. “What Would Google Do?” author Jeff Jarvis posted his summary, with lots of Google minutiae. (Jeff Sonderman also further summarized Jarvis’ summary.) Among the notable points from Jarvis: Google is “working on making news as compelling as possible” and CEO Eric Schmidt gets in a slam on the iPad in passing.
— Another Google feature was launched this week: Starring on Google News stories. The stars let you highlight stories (that’s story clusters, not individual articles) to save and return to them later. Two major tech blogs, ReadWriteWeb and TechCrunch, gave the feature their seal of approval, with ReadWriteWeb pointing to this development as the first of many ways Google can personalize its algorithm when it comes to news. It’s an intriguing concept, though woefully lacking in functionality at this point, as TechCrunch notes: I can’t even star individual stories to highlight or organize coverage of a particular issue. I sure hope at least that feature is coming.
Also in the Google-and-news department: Google economist Hal Varian expressed skepticism about news paywalls, arguing that reading news for many is a worktime distraction. And two Google folks, including Google News creator Krishna Bharat, give bunches of interesting details about Google News in a MediaShift interview, including some conciliatory words for publishers.
— Meanwhile billionaire tech entrepreneur Mark Cuban officially jumped on the Google-News-is-evil train, calling Google a “vampire” and urging news organizations not to index their content there. Not surprisingly, this wasn’t well-received in media-futurist circles: GigaOM’s Mathew Ingram, a former newspaperman himself, said Cuban and his anti-Google comrade, Rupert Murdoch, ignore the growing search traffic at news sites. Several other bloggers noted that Cuban has expressed a desire in the past to invest in other news aggregators and currently invests in Mahalo, which does some Google News-esque “sucking” of its own.
— Finally, after not carrying AP stories since December, Google struck some sort of quasi-deal that allows it to host AP content — but it’s still choosing not to do so. Search engine guru Danny Sullivan wonders what it might mean, given the AP and Google’s icy relations. Oh yeah, and Google demoed some ideas of what a Chrome OS tablet — read: iPad competitor — might look like.
—
What the iPad will do (and what to do with it): Commentary continued to trickle out this week about Apple’s newly announced iPad, with much of talk shifting from the device’s particulars to its implications on technology and how news organizations should develop for it.
Three most essential pieces all make similar points: Former McClatchy exec Howard Weaver likens the iPad to the newspaper in its physical simplicity and thinks it “will enrich human beings by removing technological barriers.” In incredibly thoughtful posts, software developers Steven Frank and Fraser Speirs take a programming-oriented tack, arguing that the iPad simplifies computing, bringing it home for normal (non-geek) people.
Frank compares it to an automatic transmission vs. the traditional manual one, and Speirs says it frees people from tedious tasks like “formatting the margins, installing the printer driver, uploading the document, finishing the PowerPoint slides, running the software update or reinstalling the OS” to do the real work of living life. In another interesting debate, interaction designer Sarah G. Mitchell argues that without multitasking or a camera (maybe?), the iPad is an antisocial device, and developer Edd Dumbill counters that it’s “real-life social” — made for passing around with friends and family.
Plenty of folks have ideas about what news organizations should do with the iPad: Poynter’s Bill Mitchell and news designer Joe Zeff both propose that newspapers and magazines could partially or totally subsidize iPads with subscriptions. Fortune’s Philip Elmer-DeWitt says that wouldn’t work, and Zeff gives a rebuttal. Publish2’s Ryan Sholin has an idea for a newsstand app for the iPad, and Frederic Filloux at The Monday Note has a great picture of what the iPad experience could look like by next year if news orgs act quickly.
And of course, Robert Niles of The Online Journalism Review and BusinessWeek’s Rich Jaroslovsky remind us what several others said (rightly, I think) last week: The iPad is what content producers make of it.
—
Facebook as a news reader: Last Friday, Facebook encouraged its users to make their own personalized news channel by creating a list of all the news outlets of which they’ve become a fan. The tech blog ReadWriteWeb — which has been remarkably perceptive on the implications of Facebook’s statements lately — noted that while a Facebook news feed couldn’t hold up to a news junkie’s RSS feed, it has the potential to become a “world-changing subscription platform” for mainstream users because of its ubiquity, sociality and accessibility. (He makes a pretty compelling case.)
Then came the numbers from Hitwise to back ReadWriteWeb up: Facebook was the No. 4 source of visits to news sites last week, behind only Google, Yahoo and MSN. It also accounts for more than double the amount of news media traffic as Google News and more than 300 times that of the web’s largest RSS program, Google Reader. ReadWriteWeb’s Marshall Kirkpatrick responded with a note that most news-site traffic still comes through search, and offered a challenge to Facebook to “encourage its giant nation of users to add subscriptions to diverse news sources to their news feeds of updates from friends and family.”
—
This week in (somewhat) depressing journalism statistics: Starting with the most cringe-inducing: Rick Edmonds of Poynter calculates that newspaper classified revenue is down 70 percent in the last decade. He does see one bright spot, though: Revenue from paid obituaries remains strong. Yup, people are still dying, and their families are still using the newspaper to tell people about it. In the magazine world, Advertising Age found that publishers are still reporting further declines in newsstand sales, though not as steep as last year.
In the world of web statistics, a Pew study found that blogging is steady among adults and significantly down among teens. In other words, “Blogging is for old people.” Of course, social media use was way up for both teens and adults.
—
A paywall step, and some suggestions: Steven Brill’s new Journalism Online paid-content service has its first newspaper, The Intelligencer Journal-Lancaster New Era in Pennsylvania. In reporting the news, The New York Times noted that the folks behind both groups were trying to lower expectations for the service. The news business expert Alan Mutter didn’t interpret the news well, concluding that “newspapers lost their last chance to hang together when it became clear yesterday that the wheels seemingly have come off Journalism Online.”
In a comically profane post, Silicon Valley veteran Dave McClure makes the strangely persuasive argument that the fundamental business model of the web is about to switch from cost-per-click ads to subscriptions and transactions, and that because people have trouble remembering passwords, they’ll login and pay through Gmail, iTunes or Facebook. (Mathew Ingram says McClure’s got a point.) Crowdfunding advocate David Cohn proposes a crowdfunded twist on micropayments at news sites.
—
Reading roundup: Two interesting discussions, and then three quick thought-provoking pieces. First, here at the Lab, future Minnesota j-prof Seth Lewis asks for input about what the journalism school of the future should look like, adding that he believes its core value should be adaptability. Citizen journalism pioneer Dan Gillmor gave a remarkably thorough, well-thought-out picture of his ideal j-school. His piece and Steve Buttry’s proposal in November are must-reads if you’re thinking about media education or involved in j-school.
Second, the discussion about objectivity in journalism continues to smolder several weeks after it was triggered by journalists’ behavior in Haiti. This week, two broadsides against objectivity — one by Publish2’s Paul Korr calling it pathological, and another by former foreign correspondent Chris Hedges saying it “killed the news.” Both arguments are certainly strident ones, but thoughtful and worth considering.
Finally, two interesting concepts: At the Huffington Post, MTV’s Maya Baratz calls for newspapers to think of themselves as apps, commanding them to “Be fruitful and multiply. Elsewhere.” And at the National Sports Journalism Center, former Wall Street Journal journalist Jason Fry has a sharp piece on long-form journalism, including a dirty little secret (“most of it doesn’t work in any medium”) and giving some tips to make it work anyway.
January 08 2010
What 2010 will bring newspapers: Bad revenue news, bad bankruptcy news, and maybe a nice tablet
[Yesterday, we showed how our Martin Langeveld's predictions for 2009 turned out. A few hits, a few misses, but lots of thoughts provoked. Here's his list of what we can expect in 2010. —Josh]
Newspaper ad revenue: At least technically, the recession is over, with GDP growth measured at 2.2 percent in Q3 of 2009 and widely forecast in Q4 to exceed that rate. But newspaper revenue has not followed suit, dropping 28 percent in Q3. McClatchy and the New York Times Company (which both came in at about that level in Q3) hinted recently that Q4 would be better, in the negative low-to-mid 20 percent range. This is not unexpected — in the last few recessions with actual GDP contraction (1990-91 and 2001), newspaper revenue remained in negative territory for at least two quarters after the GDP returned to growth. But the newspaper dip has been bigger each time, and the current slide started (without precedent) a year and a half before the recession did, with a cumulative revenue loss of nearly 50 percent. Newspaper revenue has never grown by much more than 10 percent (year over year) in any one quarter, so no real recovery is likely; this is a permanently downsized industry. My call for revenue by quarter during 2010 is: -11%, -10%, -6%, -2%.
Newspaper online revenue (included in the overall prediction above) will be the only bright spot, breaking even in Q1 and ramping up to 15% growth by Q4.
Newspaper circulation revenue will grow, because publishers are realizing that print is now a niche they can and should charge for, rather than trying to keep marginal subscribers with non-stop discounting. But this means circulation will continue to drop. In 2009, we saw drops of 7.1 percent in the six-month period ending March 31 and 10.6 percent for the period ending Sept. 30. In 2010, we’ll see a losses of at least 7.5% in each period.
Newspaper bankruptcies: I don’t think we’re out of the woods, or off the courthouse steps, although the newspaper bankruptcy flurry in 2009 was in the first half of the year. The trouble is the above-mentioned revenue decline. If it continues at double-digit rates, several companies will hit the wall, where they have no capital or credit resources left and where a “restructuring” is preferable and probably more strategic than continuing to slash expenses to match revenue losses. So I will predict at least one bankruptcy of a major newspaper company. In fact, let’s make that at least two.
Newspaper closings and publishing-frequency reductions: Yup, there will be closing and frequency reductions. Those revenue and circulation declines will hit harder in some places than others, forcing more extinction than we saw in 2009.
Mergers: It’s interesting that we saw very little M&A activity in 2009 — none of the players saw much opportunity to gain by consolidation. They all just hunkered down waiting for the recession to end. It has ended, but if my prediction is right and revenue doesn’t turn up or at least flatten by Q2, the urge to merge or otherwise restructure will set in. Expect to see at least a few fairly big newspaper firms merge or be acquired by other media outfits. (But, as in 2009, don’t expect Google to buy the New York Times or any other print media.)
Shakeups: Given the fact that newspaper stocks generally outperformed the market, it’s not surprising that there were few changes in the executive suites. But if the industry continues to contract, those stock prices will head back down. Don’t be surprised to see some boards turn to new talent. If they do, they’ll bring in specialists from outside the industry good at creative downsizing and reinvention of business models. Sooner would be better than later, in some cases.
Hyperlocal: There will be more and more launches of online and online/print combos focused on covering towns, neighborhoods, cities and regions, with both for-profit and nonprofit business models. Startups and major media firms looking to enter this space with standardized and mechanized approaches won’t do nearly as well as one-off ventures where real people take a risk, start a site, cover their market like a blanket, create a brand and sell themselves to local advertisers.
Paid content: At the end of 2008, this wasn’t yet much of a discussion topic. It became the obsession of 2009, but the year is ending with few actual moves toward full paywalls or more nuanced models. Steve Brill’s Journalism Online promises a beta rollout soon and claims a client list numbering well over 1,000 publications. Those are not commitments to use JO’s system — rather, they’re signatories to a non-binding letter of intent that gives them access to some of the findings from JO’s beta test. Many publishers, including many who have signed that letter, remain firmly on the sidelines, realizing that they have little content that’s unique or valuable enough to readers to charge for. JO itself has not speculated what kind of content might garner reader revenue, although its founders have been clear that they’re not recommending across-the-board paywalls.
So where are we heading in 2010? My predictions are that by the end of the year, most daily papers will still be publishing the vast majority of their content free on the web; that most of those experimenting with pay systems will be disappointed; and that the few broad paywalls in place now at local and regional dailies will prove of no value in stemming print circulation declines.
Gadgets: The recently announced consortium led by Time Inc. to publish magazine and (eventually) newspaper content on tablets and other platforms will see the first fruits of its efforts late in the year as Apple and several others unveil tablet devices — essentially oversized iPhones that don’t make phone calls but have 10-inch screens and make great color readers. Expect pricing in the $500 ballpark plus a data plan, which could include a selection of magazine subscriptions (sort of like channels in cable packages, but with more à la carte choice). If newspapers are on the ball, they can join Time’s consortium and be part of the plan. Tablet sales will put a pretty good dent in Kindle sales. One wish/hope for the (as yet unnamed) publisher consortium: Atomize the content and let me pick individual articles — don’t force me to subscribe to a magazine or buy a whole copy. In other words, don’t attempt to replicate the print model on a tablet.
Social networks: Twitter’s own site usage will continue to be flat (it has actually lost traffic slowly but steadily since summer), but that probably means more people are accessing Twitter through various apps on computers and smartphones, so actual engagement is hard to gauge. Facebook will continue to grow internationally but is probably close to maxing out in the U.S. With Facebook now cash-flow positive, and Twitter still essentially revenue-less except for lucrative search deals with Google and Bing, could Mark Zuckerberg and Evan Williams be holding deal talks sometime during the year? It wouldn’t surprise me.
Privacy: The Federal Trade Commission will recommend to Congress a new set of online privacy initiatives requiring clearer “opt-in” provisions governing how personal information of web users may be used for things like targeting ads and content. Anticipating this, Facebook, Google and others will continue to maneuver to lock consumers into opt-in settings that allow broad use of personal data without having to ask consumers to reset their preferences in response to the legislation. In the end, Congress will dither but not pass a major overhaul of privacy regs.
Mobile (with thanks to Art Howe of Verve Wireless): By the end of 2010 a huge shift toward mobile consumption of news will be evident. In 2009, mobile news was just getting on the radar screen, but during the year several million people downloaded the AP’s mobile app to their iPhones, and several million more adopted apps from individual publishers. By the end of 2010, with many more smartphone users, news apps will find tens of millions of new users (Art might project 100 million), and that’s with tablets just appearing on the playing field. During 2009, web readership of news (though not of newspaper content) overtook news in printed newspapers. Looking out to sometime in 2011 or 2012, more people will get their news from a mobile device than from a desktop or laptop, and news in print will be left completely in the dust.
Stocks: I accurately predicted the Dow’s rise during 2009 and that newspaper stocks would beat the market. The Dow will rise by 8% (from its Dec. 31 close), but newspaper stocks will sink as revenue fails to rebound quarter after quarter.
January 07 2010
Keeping Martin honest: Checking on Langeveld’s predictions for 2009
[A little over one year ago, our friend Martin Langeveld made a series of predictions about what 2009 would bring for the news business — in particular the newspaper business. I even wrote about them at the time and offered up a few counter-predictions. Here's Martin's rundown of how he fared. Up next, we'll post his predictions for 2010. —Josh]
PREDICTION: No other newspaper companies will file for bankruptcy.
WRONG. By the end of 2008, only Tribune had declared. Since then, the Star-Tribune, the Chicago Sun-Times, Journal Register Company, and the Philadelphia newspapers made trips to the courthouse, most of them right after the first of the year.
PREDICTION: Several cities, besides Denver, that today still have multiple daily newspapers will become single-newspaper towns.
RIGHT: Hearst closed the Seattle Post-Intelligencer (in print, at least), Gannett closed the Tucson Citizen, making those cities one-paper towns. In February, Clarity Media Group closed the Baltimore Examiner, a free daily, leaving the field to the Sun. And Freedom is closing the East Valley Tribune in Mesa, which cuts out a nearby competitor in the Phoenix metro area.
PREDICTION: Whatever gets announced by the Detroit Newspaper Partnership in terms of frequency reduction will be emulated in several more cities (including both single and multiple newspaper markets) within the first half of the year.
WRONG: Nothing similar to the Detroit arrangement has been tried elsewhere.
PREDICTION: Even if both papers in Detroit somehow maintain a seven-day schedule, we’ll see several other major cities and a dozen or more smaller markets cut back from six or seven days to one to four days per week.
WRONG, mostly: We did see a few other outright closings including the Ann Arbor News (with a replacement paper published twice a week), and some eliminations of one or two publishing days. But only the Register-Pajaronian of Watsonville, Calif. announced it will go from six days to three, back in January.
PREDICTION: As part of that shift, some major dailies will switch their Sunday package fully to Saturday and drop Sunday publication entirely. They will see this step as saving production cost, increasing sales via longer shelf life in stores, improving results for advertisers, and driving more weekend website traffic. The “weekend edition” will be more feature-y, less news-y.
WRONG: This really falls in the department of wishful thinking; it’s a strategy I’ve been advocating for the last year or so to follow the audience to the web, jettison the overhead of printing and delivery, but retain the most profitable portion of the print product.
PREDICTION: There will be at least one, and probably several, mergers between some of the top newspaper chains in the country. Top candidate: Media News merges with Hearst. Dow Jones will finally shed Ottaway in a deal engineered by Boston Herald owner (and recently-appointed Ottaway chief) Pat Purcell.
WRONG AGAIN, but this one is going back into the 2010 hopper. Lack of capital by most of the players, and the perception or hope that values may improve, put a big damper on mergers and acquisitions, but there should be renewed interest ahead.
PREDICTION: Google will not buy the New York Times Co., or any other media property. Google is smart enough to stick with its business, which is organizing information, not generating content. On the other hand, Amazon may decide that they are in the content business…And then there’s the long shot possibility that Michael Bloomberg loses his re-election bid next fall, which might generate a 2010 prediction, if NYT is still independent at that point.
RIGHT about Google, and NOT APPLICABLE about Bloomberg (but Bloomberg did acquire BusinessWeek). The Google-NYT pipe dream still gets mentioned on occasion, but it won’t happen.
PREDICTION: There will be a mini-dotcom bust, featuring closings or fire sales of numerous web enterprises launched on the model of “generate traffic now, monetize later.”
WRONG, at least on the mini-bust scenario. Certainly there were closings of various digital enterprises, but it didn’t look like a tidal wave.
PREDICTION: The fifty newspaper execs who gathered at API’s November Summit for an Industry in Crisis will not bother to reconvene six months later (which would be April) as they agreed to do.
RIGHT. There was a very low-key round two with fewer participants in January, without any announced outcomes, and that was it. [Although there was also the May summit in Chicago, which featured many of the same players. —Ed.]
PREDICTION: Newspaper advertising revenue will decline year-over-year 10 percent in the first quarter and 5 percent in the second. It will stabilize, or nearly so, in the second half, but will have a loss for the year. For the year, newspapers will slip below 12 percent of total advertising revenue (from 15 percent in 2007 and around 13.5 percent in 2008). But online advertising at newspaper sites will resume strong upward growth.
WRONG, and way too optimistic. Full-year results won’t be known for months, but the first three quarters have seen losses in the 30 percent ballpark. Gannett and New York Times have suggested Q4 will come in “better” at “only” about 25 percent down. My 12 percent reference was to newspaper share of the total ad market, a metric that has become harder to track this year due to changes in methodology at McCann, but the actual for 2009 ultimately will sugar out at about 10 percent.
PREDICTION: Newspaper circulation, aggregated, will be steady (up or down no more than 1 percent) in each of the 6-month ABC reporting periods ending March 31 and September 30. Losses in print circulation will be offset by gains in ABC-countable paid digital subscriptions, including facsimile editions and e-reader editions.
WRONG, and also way too optimistic. The March period drop was 7.1 percent, the September drop was 10.6 percent, and digital subscription didn’t have much impact.
PREDICTION: At least 25 daily newspapers will close outright. This includes the Rocky Mountain News, and it will include other papers in multi-newspaper markets. But most closings will be in smaller markets.
WRONG, and too pessimistic. About half a dozen daily papers closed for good during the year.
PREDICTION: One hundred or more independent local startup sites focused on local news will be launched. A number of them will launch weekly newspapers, as well, repurposing the content they’ve already published online. Some of these enterprises are for-profit, some are nonprofit. There will be some steps toward formation of a national association of local online news publishers, perhaps initiated by one of the journalism schools.
Hard to tell, but probably RIGHT. Nobody is really keeping track of how many hyperlocals are active, or their comings and goings. An authoritative central database would be a Good Thing.
PREDICTION: The Dow Industrials will be up 15 percent for the year. The stocks of newspaper firms will beat the market.
RIGHT. The Dow finished the year up 18.8 percent. (This prediction is the one that got the most “you must be dreaming” reactions last year.
And RIGHT about newspapers beating the market (as measured by the Dow Industrials), which got even bigger laughs from the skeptics. There is no index of newspaper stocks, but on the whole, they’ve done well. It helps to have started in the sub-basement at year-end 2008, of course, which was the basis of my prediction. Among those beating the Dow, based on numbers gathered by Poynter’s Rick Edmonds, were New York Times (+69%), AH Belo (+164%), Lee Enterprises (+746%), McClatchy (+343%), Journal Communications (+59%), EW Scripps (+215%), Media General (+348%), and Gannett (+86%). Only Washington Post Co. (+13%) lagged the market. Not listed, of course, are those still in bankruptcy.
PREDICTION: At least one publicly-owned newspaper chain will go private.
NOPE.
PREDICTION: A survey will show that the median age of people reading a printed newspaper at least 5 days per week is is now over 60.
UNKNOWN: I’m not aware of a 2009 survey of this metric, but I’ll wager that the median age figure is correct.
PREDICTION: Reading news on a Kindle or other e-reader will grow by leaps and bounds. E-readers will be the hot gadget of the year. The New York Times, which currently has over 10,000 subscribers on Kindle, will push that number to 75,000. The Times will report that 75 percent of these subscribers were not previously readers of the print edition, and half of them are under 40. The Wall Street Journal and Washington Post will not be far behind in e-reader subscriptions.
UNKNOWN, as far as the subscription counts go: newspapers and Kindle have not announced e-reader subscription levels during the year. The Times now has at least 30,000, as does the Wall Street Journal (according to a post by Staci Kramer in November; see my comment there as well). There have been a number of new e-reader introductions, but none of them look much better than their predecessors as news readers. My guess would be that by year end, the Times will have closer to 40,000 Kindle readers and the Journal 35,000. During 2010, 75,000 should be attainable for the Times, especially counting all e-editions (which include the Times Reader and 53,353 weekdays and 34,435 Sundays for the six months ending Sept. 30.
PREDICTION: The advent of a color Kindle (or other brand color e-reader) will be rumored in November 2009, but won’t be introduced before the end of the year.
RIGHT: plenty of rumors, but no color e-reader, except Fujitsu’s Flepia, which is expensive, experimental, and only for sale in Japan.
PREDICTION: Some newspaper companies will buy or launch news aggregation sites. Others will find ways to collaborate with aggregators.
RIGHT: Hearst launched its topic pages site LMK.com. And various companies are working with EVRI, Daylife and others to bring aggregated feeds to their sites.
PREDICTION: As newsrooms, with or without corporate direction, begin to truly embrace an online-first culture, outbound links embedded in news copy, blog-style, as well as standalone outbound linking, will proliferate on newspaper sites. A reporter without an active blog will start to be seen as a dinosaur.
MORE WISHFUL THINKING, although there’s progress. Many reporters still don’t blog, still don’t tweet, and many papers are still on content management systems that inhibit embedded links.
PREDICTION: The Reuters-Politico deal will inspire other networking arrangements whereby one content generator shares content with others, in return for right to place ads on the participating web sites on a revenue-sharing basis.
YES, we’re seeing more sharing of content, with various financial arrangements.
PREDICTION: The Obama administration will launch a White House wiki to help citizens follow the Changes, and in time will add staff blogs, public commenting, and other public interaction.
NOT SO FAR, although a new Open Government Initiative was recently announced by the White House. This grew out of some wiki-like public input earlier in the year.
PREDICTION: The Washington Post will launch a news wiki with pages on current news topics that will be updated with new developments.
YES — kicked off in January, it’s called WhoRunsGov.com.
PREDICTION: The New York Times will launch a sophisticated new Facebook application built around news content. The basic idea will be that the content of the news (and advertising) package you get by being a Times fan on Facebook will be influenced by the interests and social connections you have established on Facebook. There will be discussion of, if not experimentation with, applying a personal CPM based on social connections, which could result in a rewards system for participating individuals.
NO. Although the Times has continued to come out with innovative online experiments, this was not one of them.
PREDICTION: Craigslist will partner with a newspaper consortium in a project to generate and deliver classified advertising. There will be no new revenue in the model, but the goal will be to get more people to go to newspaper web sites to find classified ads. There will be talk of expanding this collaboration to include eBay.
NO. This still seems like a good idea, but probably it should have happened in 2006 and the opportunity has passed.
PREDICTION: Look for some big deals among the social networks. In particular, Twitter will begin to falter as it proves to be unable to identify a clearly attainable revenue stream. By year-end, it will either be acquired or will be seeking to merge or be acquired. The most likely buyer remains Facebook, but interest will come from others as well and Twitter will work hard to generate an auction that produces a high valuation for the company.
NO DEAL, so far. But RIGHT about Twitter beginning to falter and still having no “clearly attainable” revenue stream in sight. Twitter’s unique visitors and site visits, as measured by Compete.com, peaked last summer and have been declining, slowly, ever since. Quantcast agrees. [But note that neither of those traffic stats count people interacting with Twitter via the API, through Twitter apps, or by texting. —Ed.]
PREDICTION: Some innovative new approaches to journalism will emanate from Cedar Rapids, Iowa.
YES, as described in this post and this post. See also the blogs of Steve Buttry and Chuck Peters. The Cedar Rapids Gazette and its affiliated TV station and web site are in the process of reinventing and reconstructing their entire workflow for news gathering and distribution.
PREDICTION: A major motion picture or HBO series featuring a journalism theme (perhaps a blogger involved in saving the world from nefarious schemes) will generate renewed interest in journalism as a career.
RIGHT. Well, I’m not sure if it has generated renewed interest in journalism as a career, but the movie State of Play featured both print reporters and bloggers. And Julie of Julie & Julia was a blogger, as well. [Bit of a reach there, Martin. —Ed.]
—
[ADDENDUM: I posted about Martin's predictions when he made them and wrote this:
I’d agree with most, although (a) I think there will be at least one other newspaper company bankruptcy, (b) I think Q3/Q4 revenue numbers will be down from 2008, not flat, (c) circ will be down, not stable, (d) newspaper stocks won’t beat the market, (e) the Kindle boom won’t be as big as he thinks for newspapers, and (f) Twitter won’t be in major trouble in [2009] — Facebook is more likely to feel the pinch with its high server-farm costs.
I was right on (a), (b), and (c) and wrong on (d). Gimme half credit for (f), since Twitter is now profitable and Facebook didn’t seem too affected by server expenses. Uncertain on (e), but I’ll eat my hat if “75 percent of [NYT Kindle] subscribers were not previously readers of the print edition, and half of them are under 40.” —Josh]
Photo of fortune-teller postcard by Cheryl Hicks used under a Creative Commons license.
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