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

May 22 2013

14:00

Jaron Lanier wants to build a new middle class on micropayments

jaron-lanier-cc

jaron-lanier-who-owns-the-future“We’re used to treating information as ‘free,’” writes Jaron Lanier in his latest book Who Owns the Future?, “but the price we pay for the illusion of ‘free’ is only workable so long as most of the overall economy isn’t about information.”

Lanier argues that a free-culture mindset is dismantling the middle-class economy. In his estimation, the idea “that mankind’s information should be free is idealistic, and understandably popular, but information wouldn’t need to be free it no one were impoverished.”

Who Owns the Future?, like his 2010 book You Are Not a Gadget, is another manifesto attempting to rebuff what he sees as the contemporary ethos of the web. But the followup also refreshingly attempts to pose solutions, one where all participants in this information-based world are paid for what they do and distribute on the web. Throughout, it places particular emphasis on the ways digital technology has unsettled the so-called “creative class” — journalists, musicians, photographers, and the like. As he sees it, the tribulations of those working in such fields may be a premonition for the middle class as a whole. It’s “urgent,” he writes, “to determine if the felling of creative-class careers was an anomaly or an early warning of what is to happen to immeasurably more middle-class jobs later in this century.”

I recently spoke with Lanier and we discussed the ways he sees digital networking disrupting the media, why he thinks advertising can no longer sustain paid journalism, and why he misses the future. Lightly edited and condensed, here’s a transcript of our conversation.

Eric Allen Been: You were one of the early advocates of the notion that “information wants to be free.” An idea most media companies initially embraced when it came to the web, and one that now some seem to regret. Could you talk a little bit about why you changed your mind on this line of thinking?
Jaron Lanier: Sure. It was based on empirical results. The idea sounded wonderful 30 years ago. It sounded wonderful in the way that perfect libertarianism or perfect socialism can. It sounds right, but with all these attempts to make a perfect system, it doesn’t work out so well. Empirically, what I’ve seen is the hollowing out of middle-class opportunities and that there is an absurdity to the way it’s going. I think we’re not getting the benefits that I initially anticipated.
Been: When it came to journalism, what were some of those benefits that you originally expected? I imagine you then thought it would be a largely positive thing.
Lanier: Yeah. To use the terminology of the time, we — that is, me and others who were behind a lot of the ideas behind the Web 2.0 ethos or whatever — wanted to “supplant” or “make obsolete” the existing channels of journalism and the existing types of jobs in journalism. But what would come instead would be better — more open and all of that — and less intermediated. What happened instead was a little bit of what we anticipated. In a sense, the vision came true. Yes, anybody can blog and all that — and I still like that stuff — but the bigger problem is that an incredible inequity developed where the people with big computers who were routing what journalists did were getting all the formal benefits. Mainly the money, the power. And the people who were doing the work were so often just getting informal benefits, like reputation and the ability to promote themselves. That isn’t enough. The thing that we missed was how much power would accrue to the people with the biggest computers. That was the thing we didn’t really think through.
Been: Historically, technological advances have caused disruptions to industries, but they’ve also tended to provide new jobs to replace the wiped-out ones. There seems to be some optimism in a lot of quarters that journalism can get eventually get on the right track, economically speaking, within the digital world. But you don’t think so.
Lanier: The system is slowly destroying itself. I’ll give you an example of how this might work out. Let’s suppose you say in the future, journalists will figure out how to attach themselves to advertising more directly so they’re not left out of the loop. Right now, a lot of journalism is aggregated in various services that create aggregate feeds of one kind or another and those things sell advertising for the final-stop aggregator. And the people doing the real work only get a pittance. A few journalists do well but it’s very few — it’s a winner-take-all world where only a minority does well. Yes, there are a few people, for instance, who have blogs with their own ads and that can bring in some money. You can say, “Well, isn’t that a good model and shouldn’t that be emulated”? The problem is that they’re dependent on the health of the ad servers that place ads. Very few people can handle that directly. And the problem with that is the whole business of using advertising to fund communication on the Internet is inherently self-destructive, because the only stuff that can be advertised on Google or Facebook is stuff that Google hasn’t already forced to be free.

As an example, you might have a company that makes toys and you advertise the toys on Google, and that might show up in journalism about toy safety or something. So journalists can eek some money from people who sell toys. That’s kind of like the traditional model of advertising-supported journalism.

But every type of business that might advertise on Google is gradually being automated and turning into more of an information business. In the case of toys, there’s a 3-D printer where people print out toys. At some point, that will become better and better and more common, and whenever that happens, what happened to music with Napster will happen to toys. It’ll be all about the files and the machines that actually print out the toys. If the files that print out the toys can be made free, the only big business will be the routing of those files, which might be Google or Facebook handling that, and there will be nobody left to advertise on Google.

That’ll happen with everything else — pharmaceuticals, transportation, natural resources — every single area will be subject to more and more automation, which doesn’t have to put people out of work. The only reason automation leads to unemployment is the idea of information being free. It’s a totally artificial problem, but if journalists are counting the Google model to live on, it won’t work. Google is undermining itself, and there will be no one left to buy advertisements.

Been: Speaking of advertising, I’m interested in hearing what you think about a lot of people currently lauding BuzzFeed and its use of native advertising. There’s a lot of talk about it solving “the problems of both journalism and advertising at once”, or it being some sort of guiding light for a “future of paid journalism.”
Lanier: Advertising, in whatever form, just can’t be the only possible business plan for information. It forces everybody to ultimately compete for the same small pool of advertisers. How much of the economy can advertising really be? It can’t be the whole market. Why on earth are Google and Facebook competing for the same customers when they actually do totally different things? It’s a peculiar problem. You’re saying that there’s only one business plan, one customer set, and everybody has to dive after that. It becomes a very narrow game — there’s not enough there for everybody. It could work out locally a little bit, but it’s not an overall solution.
Been: And your solution is what you call a “humanistic information economy.” Could you talk a little bit about how such a system would work?
Lanier: There are some theoretical reasons that lead me to believe that if you monetized a deeply connected open network, the distribution of benefits to people would look like a middle class. In other words, there would be a lot of wealth in a lot of people’s hands that could outspend any elite, which is critical for democracy and a market economy to survive. So one benefit is you could get a consistent middle class even when the economy gets really automated. It becomes a real information economy.

A humanistic economy would create a middle class in a new way, instead of through unions and other ad hoc mechanisms. It would create a middle class by compensating people for their value in terms of references to the network. It would create an expanding economy instead of a static one, which is also important. It’s built around the people instead of the machines. It would be a change in paradigm.

Been: In the book, you write: “If we demand that everyone turn into a freelancer, then we will all eventually pay an untenable price in heartbreak.” But a lot of what you’re proposing strikes me, in some senses, as a freelance economy.
Lanier: That’s right. What I’m proposing is actually a freelance economy, but it’s a freelance economy where freelancing earns you not just income but also wealth. That’s an important distinction to make. What I think should happen is as you start providing information to the network, it then will become a part of other services that grow over time.

So, for instance, let’s suppose you translate between languages, and some of your translations provide example phrase translations that are used in automatic translators. You would keep getting dribbles of royalties from having done that, and you start accumulating a lot of little ways that you’re getting royalties — not in the sense of contractual royalties, just little payments from people that are doing things that benefited from information you provided. If you look at people’s interest in social networking, you see a middle-class distribution of interest. A lot of people would get a lot of little dribs and drabs, and it would accumulate over a lifetime so you’d start to have more and more established information that had been referenced by you that people are using. What should happen is you should start accumulating wealth, some money that shows up because of your past as well as your present moment.

Been: So if I simply shared a link to a New York Times article on Twitter, for instance, would there be a payment exchange? If so, who would it go to?
Lanier: It would be person-to-person payments. Right now, we’re used to a system where you earn money in blocks, like a salary check, and you’re spending on little things like coffee of something. And in this system, you’d be earning lots of little micropayments all the time. But you would be spending less often. That terrifies people, but it’s a macroeconomic thing. I believe the economy would actually grow if information was monetized, and overall your chances will get a lot better than they are now.
Been: You say in the book that this person-to-person payment system is partly inspired by the early work of the sociologist and information technology pioneer, Ted Nelson. Particular, his thoughts about two-way linking over a network. Could you talk a little bit about why you think this is a better way to exchange information?
Lanier: The original concept of digital networking that predated the actual existence of digital networking is Ted Nelson’s work from the 1960s. It was different from the networks we know today in a few key ways. All the links were two-way, for one. You would always know who was linking at your website — there would always be backlinks. If you have universal backlinks, you have a basis for micropayments from somebody’s information that’s useful to somebody else. If the government camera on a corner catches you walking by, and it matches against you, you’d be owed some money because you contributed information. Every backlink would be monetized. Monetizing actually decentralizes power rather than centralizing it. Demonetizing a network actually concentrates power around anyone who has the biggest computer analyzing it.
Been: Let’s talk about that last point. This is an example of what you call in the book a “Siren Server.” That is, computers on a network that gather data without conceding that money is owed to those individuals mined for the information.
Lanier: That’s right. It’s my name for one of the biggest, best, most effective, connected computers on the network. A Siren Server is a big server farm — a remote unmarked building somewhere in the countryside near a river so it can get cooled. It has tons of computers that run as one. It gathers data from the world for free and does more processing of that data that normal computers can do. What it does with the processing is it calculates several moves that the owners can make that put them in an advantage based on a global perspective.

If you’re Amazon, it means you keep track of everybody else’s prices in the world, including little local independent stores, so you can never be outsold. If a store wants to give a book away, Amazon will also do that, so nobody gets a local advantage. If you’re Google, it gives advertisers a way to use a behavioral model of the world to predict which options in front of you are most likely to steer you. If you’re a finance company, it’s a way of bundling derivatives in such a way that somebody else is holding the risk. It’s almost a cryptographic effort. If you’re an insurance company, it’s a way of calculating how to divide populations so you insure the people who least need to be insured. In all these cases, a giant computer calculates an advantage for yourself and you get a global perspective that overwhelms the local advantage that participants in the market might have had before.

Been: In the book, you call Craigslist a Siren Server, one that “created a service that has greatly increased convenience for ordinary people, while causing a crisis in local journalism that once relied on paid classified adds.” You write that it “has a tragic quality, since it is as modest and ethical as it can be, eschewing available spying opportunities, and yet it still functions as a Siren Server despite that.” So a Siren Server, in your mind, isn’t necessarily always a malevolent construction.
Lanier: That’s true. I don’t think there’s much in the way of evil or competitive intent. It’s the power of having one of the biggest computers. When you suddenly get power by surprise, it’s a seduction. You don’t realize that other people are being hurt. But if it wasn’t Craigslist, it would have been something else. Some computer gets a global perspective on everything and the local advantage goes away. Craigslist calculated away the local advantage that newspapers used to have.
Been: So far, the reviews of Who Owns the Future? have been largely positive. But in The Washington Post, Evgeny Morozov criticized it by saying “Lanier’s proposal raises two questions that he never fully confronts.” One being whether a nanopayment system would actually help the middle class once automation hits its tipping point. He cites cab drivers being replaced by self-driving cars and says: “Unless cabdrivers have directly contributed to the making of maps used by self-driving cars, it’s hard to see how a royalty-like system can be justified.”
Lanier: This has to do with the value of information. In the book I ask this very question — in the future, in the case of self-driving cars, it’s certainly true that once you’ve been through the streets once, why do it again? The reason is that they’re changing. There might be potholes, or there might be changes to local traffic laws and traffic patterns. The world is dynamic. So over time, maps of streets that need cars to drive on them will need to be updated. The way self-driving cars work is big data. It’s not some brilliant artificial brain that knows how to drive a car. It’s that the streets are digitized in great detail.

So where does the data come from? To a degree, from automated cameras. But no matter where it comes from, at the bottom of the chain there will be someone operating it. It’s not really automated. Whoever that is — maybe somebody wearing Google Glass on their head that sees a new pothole, or somebody on their bike that sees it — only a few people will pick up that data. At that point, when the data becomes rarified, the value should go up. The updating of the input that is needed is more valuable, per bit, than we imagine it would be today. Cabbies themselves, that’s irrelevant. There won’t be cabbies. They’ll have to be doing other things.

Been: His other question is “how many [online] services would survive his proposed reforms?” Morozov brings up Wikipedia and says the “introduction of monetary incentives would probably affect authors’ motivation. Wikipedia the nonprofit attracts far more of them than would Wikipedia the startup.”
Lanier: But in what I’m proposing, Wikipedia would not pay you — it would be a person-to-person thing. I’m proposing that there’s no shop and people are paying each other when they create things like Wikipedia. Which is very different. If it’s going through a central hub, it creates a very narrow range of winners. If it’s not, it’s a whole different story.

The online services that would survive would be the ones that can add value to the data that people are providing anyway. Instagram could perhaps charge to do cool effects on your pictures, but the mere connections between you and other people would not be billable, it would just be normal. People would pay each other for that. The services would have to do more now than they are. A lot of services are just gatekeepers and would not survive and they shouldn’t. It would force people to up their game.

Been: Speaking of upping one’s game, you get a strong sense throughout the book that you think society is no longer future-minded. Towards the end, you write that you “miss the future.” What do you mean by that statement?
Lanier: It seems that there’s a loss of ambition or a lowering of standards for what we should expect from the future. We hyped up things like being able to network — and we understood it was a step on a path — but these days I call the open-source idea the MSG of journalism.

An example would be this: Take some story that would be totally boring, like garbage bags are being left on the street. But if you say, “open-source software is being used to track garbage bags on the street,” there’s something about it that it makes it seem interesting. And that makes it a low bar for what seems interesting. A very unambitious idea of what innovation can be.

Photo of Jaron Lanier by Dan Farber used under a Creative Commons license.

February 16 2011

18:36

How the Kindle Made Single-Story Sales a Reality for Magazines

I've never seen a "Not for Individual Sale" label on a magazine story. So why can't I buy most individual magazine articles in digital form just yet?

Selling stand-alone stories has seemed like a potential business model for magazines and other journalism organizations since the rise of iTunes. Observers hyped an incipient micropayment business model for journalism. But few companies have tried this model, instead offering complete digital editions and, whenever possible, digital subscriptions. The advantages of that approach are clear: packaging more into the product justifies a higher price, and loyal subscribers attract advertisers. Yet with the growth of e-reading on tablets and mobile devices, as well as new options for processing small payments for content (e.g., PayPal, Facebook, Apple's App Store), marketing individual stories may soon gain fresh appeal.

Magazines exploring this option would have to maintain their brand reputation and their editorial voice by carefully selecting stories to sell and ensuring that they respect their relationship with existing readers. Recent experiments with selling individual stories show, however, that it can be done successfully. The only cloud on the horizon could be Apple's new subscription service for iOS, which demands that the company gets 30% of all subscription sales.

Relying on Brand Strength

Well-known magazine The Atlantic ended its monthly publishing of short fiction in 2005, and now offers a single fiction issue yearly. However, the magazine, founded in 1857, wanted to explore other ways to continue its legacy of publishing fiction, and so recently finished a year-long experiment that made two short stories per month available exclusively on the Kindle. These were labeled on Amazon as Atlantic Fiction for Kindle.

atlantic_kindle final.jpg

"We wanted to recommit last year to being a purveyor of great fiction," said Scott Havens, Atlantic Media's vice president for digital strategy and operations. "It was an opportunistic play to further our entrance in the fiction market and to test out a new platform."

The Atlantic's access to established writers, such as Joyce Carol Oates and Paul Theroux, was a significant part of its success. Havens said the popularity of each individual story correlated to the prior popularity and "salability" of their writers. When Amazon customers searched for those authors' work, The Atlantic stories also came up in the results.

Overall, Havens said, Atlantic Kindle for Fiction "was a worthwhile effort, and it was a successful financial venture for us." The Atlantic is now working on new ventures for other digital platforms, and the complete magazine remains a top seller on the Kindle.

Success of 'One Story'

Clearly, The Atlantic's pre-existing brand strength and its ability to involve recognized authors factored into its achievement. However, smaller ventures can also establish a reputation for quality. One Story is a non-profit that publishes one story every three weeks in print format, and also publishes them on the Kindle, where One Story is ranked 19th among bestselling magazines.

one_story final.jpg

Maribeth Batcha, publisher and co-founder of One Story, said that after just a year of availability, readership on the Kindle was as high as the print edition's readership after four years of publication. Kindle and print readers receive a new story every three weeks, representing varied styles and genres.

"There is not a 'type' of story we publish," said Batcha. "We'll really publish anything, but it has to feel pretty meaty and hold its own. It needs to feel like you've gotten a whole artistic experience."

The magazine will only publish an author once, and yet it still has a recognizable character as a publication.

"Over time, people develop a relationship with a magazine....It's not between the reader and the individual story," Batcha said. "There has to be some way you define your curatorial voice. People want choice, but not too much choice."

For mainstream, established magazines, this may be a major challenge in attempting single-story sales. Can a lone story express enough of an editorial identity to appeal to readers on its own? Editors must select stories strong enough to stand alone not only for their quality and timelessness, but also for their ability to effectively communicate to readers the magazine's distinctive larger brand and "curatorial" identity.

Building a Passionate Audience

One Story also counts on the audience's passion for writing itself. The magazine's readers, Batcha said, are "serious." The non-profit magazine seeks donations and is partly grant-funded. It has also organized writing workshops and encourages educational uses of the magazine to promote the short story to young audiences.

A new project that sells individual stories is also hoping that readers' support for substantial, long-form writing and its writers will lead to success. The Atavist, which launched January 26, publishes stand-alone, in-depth non-fiction articles that are longer than most magazine pieces, especially given today's ever-shorter features. The articles, priced at $2.99, are available through the publication's iPad/iPhone apps, as well as on the Kindle and Nook e-readers. Income from the stories is shared between The Atavist and the authors.

atavist.PNG

"People don't think readers want [long stories]...but we thought there was an opportunity on the [smart]phone to give people this kind of story that they couldn't get anywhere else," said Evan Ratliff, editor of The Atavist and an award-winning magazine writer. "I do think there's a group of readers who'd like to support writers and creative people in general. If you say a lot of this money is going to the writers, [readers] know who made it and know where the money is going."

Ratliff describes The Atavist's approach as a "hybrid" between magazines and books. "We take some elements from one model and some from others. We're taking our editorial approach from magazines. We have fact-checkers just like at a major weekly or monthly magazine," he said. "We're taking a book approach in the way the story is told. It can have a nice arc to it, and it can have chapters more substantial than magazine sections."

The Atavist is not affiliated with a print magazine, though its founders are interested in partnering with both established and startup book and magazine publishers. There may also be advertising possibilities, though their style may depend on readers' preferences.

"Magazine readers are really amenable to advertising, but book readers are not. It's acceptable in one place, but not in the other," Ratliff said.

The Atavist is also part of a new Amazon venture called Kindle Singles, which Amazon says "allow a single killer idea -- well researched, well argued and well illustrated -- to be expressed at its natural length," generally from 5,000 to 30,000 words. In addition to the two non-fiction stories published as Singles by The Atavist, Amazon also has published short story collections and novellas as Singles, as well as non-fiction pieces based on TED talks. Amazon is taking submissions for Singles not just from the public, but also from publishers, making it possible that magazines and other established publications could sell individual long-form stories as Singles.

Choosing and Packaging Stories to Sell

One reason most journalism organizations haven't attempted a pay-per-story model, even in the form of micropayments, is that breaking news is available in so many places for free. However, these experiments show that readers may be willing to pay for timeless content that offers an immersive experience, as do long-form non-fiction storytelling and short fiction.

"You can't just take a type of article or a piece of work that is very similar to other things you can find for free on the web and ask people to pay for it," said Ratliff. "That's when people get mad. 'Why are you charging me $1.99 for this news?' We're offering a different proposition that offers something unique, that reads to you almost like fiction, except it's true."

The Atavist includes substantial multimedia in its stories -- such as photos, videos, maps, timelines, audio, and slideshows -- which smoothly integrate with the articles' text. One Story is also considering developing short videos -- such as author interviews -- to accompany its fiction. Right now, established print magazines have little incentive to create multimedia to supplement their stories, since most print readers won't go online to check out associated multimedia after they finish reading. However, adding multimedia enhancements for particular stories could make selling them singly more intriguing to readers and more profitable.

If magazine publishers can identify stories that provide rich, deep reading experiences, and then add engaging multimedia to develop that experience even further, they may be able to leverage their brands and editorial authority to market individual stories successfully. Other possibilities might include packaging stories on one topic together in one download, or combining stories from different magazines in a collaborative product. Individual stories or packages of stories can be sold through apps, websites, and vendors like Amazon or Barnes & Noble.

However, the iPad and iPhone might become more difficult platforms for single-serve content if Apple keeps a large percentage of the subscription price. It announced a 30% cut for all subscriptions sold in-app, which has brought an avalanche of bad press for Apple. We'll see if that deal holds, or whether competing subscription services, such as Google One Pass pressure Apple to loosen restrictions.

Given the relative ease of repurposing digital content and the limitless possibilities offered by multimedia, magazine publishers may have an opportunity to reach a bigger audience on multiple platforms. If these ventures flourish, it will be simply because readers love to lose themselves in a good story.

Susan Currie Sivek, Ph.D., is an assistant professor in the Mass Communication and Journalism Department at California State University, Fresno. Her research focuses on magazines and media communities. She also blogs at sivekmedia.com, and is the magazine correspondent for MediaShift.

This is a summary. Visit our site for the full post ».

16:15

Take that, Cupertino! Google undercuts Apple’s subscription plan with a cheaper one of its own

Back in 2009, we broke word that Google was working on an e-payment solution for publishers that would be based on its Google Checkout platform. Google’s proposal (pdf) to the Newspaper Association of America said that the company’s “vision of a premium content ecosystem includes”:

• Single sign-on capability for users to access content and manage subscriptions

• Ability for publishers to combine subscriptions from different titles together for one price

• Ability for publishers to create multiple payment options and easily include/exclude content behind a paywall

• Multiple tiers of access to search including 1) snippets only with “subscription” label, 2) access to preview pages and 3) “first click free” access

• Advertising systems that offer highly relevant ads for users, such as interest-based advertising

Google’s got plenty of targeted advertising options (#5), and First Click Free is old hat by now (#4). But Google took a big step toward fulfilling the rest of that vision (#1, #2, and #3) today with the announcement of Google One Pass, “a payment system that enables publishers to charge consumers for articles and other content.” And coming on the heels of Apple’s less-than-publisher-friendly subscription announcement yesterday, Google’s alternative may seem like a breath of fresh air.

First, Google is selling flexibility. No requirement to offer the same deal through a Google One Pass payment system as through other means — which means bundling with print subscriptions is a whole lot simpler than with Apple. Print customers can enter a coupon code to get free access to a website. Want to try a metered model, or experiment with putting more, less, or different content behind a paywall? No problem. It’s device-agnostic — so if you want to sell an all-access, all-platform subscription, no problem there either. (It’s also a micropayment platform, for the few still living who believe in per-article micropayments as a viable model.)

Second, as Lee Shirani writes in the announcing blog post: “With Google One Pass, publishers can maintain direct relationships with their customers and give readers access to digital content across websites and mobile apps.” That sentence isn’t detailed any further in the initial announcement or docs online, but it sure sounds like a nice way of saying, “We’ll let you keep all the customer data Apple isn’t letting you have.”

And, most key of all, Google isn’t demanding the 30 percent cut Apple does. The announcement doesn’t share cost details, but the FT is reporting Google will take 10 percent of any subscription revenue. So selling a $15/month subscription via Apple would net $10.50 versus $13.50 via Google.

The announcement’s a lot to digest, but three quick thoughts:

— With the timing, it’s easy to see One Pass primarily as a competitor to Apple’s subscription plans. But note that the focus is primarily on web access, not app access. (Note that the word “Android” — Google’s mobile platform — is mentioned nowhere.) While mobile apps get a shoutout in the announcement, Google notes that it’ll work only “in instances where the mobile OS terms permit transactions to take place outside of the app market,” which likely means it’ll only work in Android apps, which are still a secondary priority for most news orgs, for better or worse, and where getting users to pay anything for apps has been a challenge. At least for the moment, One Pass is more of a direct competitor to Journalism Online’s Press+ than it is to Apple. It’s an infrastructure play.

— Frankly, I’m a little surprised Google’s even taking 10 percent. The transaction costs themselves shouldn’t be any higher than what Google Checkout regularly charges, which is 2.9 percent plus 30 cents a transaction (plus volume discounts). Sure, building and maintaining the record-keeping system for subscribers and the tools for distinguishing free/paid content will cost something. But Google’s consistent model has been to undercut paid competitors by making good free offerings, and I’d have thought just keeping the Checkout fees would have been the play, to soak up as much of the market as possible.

— What Apple is selling publishers is not just an easy payment system — they’re selling the 160 million user accounts with active credit cards attached. That’s about 70 million more than PayPal. How many of you have a credit card on file with Google Checkout, which has struggled to gain relevance and market share?

December 22 2010

17:00

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%.

August 02 2010

20:35

Can Social Micro-Earnings Help Micropayments Work for News?

Would readers pay as little as a penny, or even less, for news? They would, if paying was combined with social sharing, micro-earning, virtual currency and a centralized banking system, according to doctoral students Geoffrey Graybeal and Jameson Hayes of the Grady College of Journalism and Mass Communication at the University of Georgia.

Graybeal and Hayes propose a "Modified News MicroPayment Model" as a way to implement micropayments for news. In this model, readers are not pushed to pay for content, but are instead given choices and incentives to nudge them to pay. The model consists of four key elements: Micro-earnings, socialization/sharing, local focus and a centralized banking system. The model is described in a detail in a paper [PDF] that the pair presented at the Annual International Symposium on Online Journalism in Austin, Texas, in April.

The pair determines the two-way interaction of the social web as a principle in the model.

"When you use people's social networks to share content, and get other people to pay for it, it should be a partnership between the media organization and the reader, not a one-way proposition," Hayes said in a phone interview. "People need to get paid back, and the social web allows that."

Micro-earn by Sharing

In the model, micro-earnings are combined with social sharing. For example, when a reader shares news articles with friends on Facebook or followers on Twitter, and a friend ends up purchasing the article, the reader earns points. The reader can exchange these points to pay for articles at a news outlet. Thus, the reader can transform their social capital into something with monetary value.

yupgrade.jpg

Micro-earning has already been experimented with on a small scale in journalism. For example, sharing platform YupGrade enables readers to earn points, credits or badges by sharing news stories related to a certain topic. Sharing can be combined with donating, as was the case when YupGrade partnered with the Hunger in America campaign for the SXSW Interactive conference. For every story about hunger, malnutrition, or obesity in the U.S. shared on YupGrade, a can of food was donated to the campaign.

Another example of micro-earning is crowdfunding platform Spot.Us, where community members can earn credits by filling out surveys or other activities. They can then use these credits to donate to pitches on Spot.Us. Thus, readers' time is given a monetary value that can be converted on the site.

According to Graybeal and Hayes, when a news outlet implements a micropayment system, they should also simultaneously implement a micro-earning system.

"Micro-earning would have taken away some of the shock when Time magazine recently implemented a pay wall," Hayes said.

Virtual News Currencies: Times Tender, WSJ Bucks

Evidence suggests consumers are more likely to spend more money when they use virtual currencies and credits, Hayes and Graybeal state in their paper. As a result, the pair believes media outlets should establish their own currency. The Wall Street Journal could offer "WSJ Bucks," the New York Times could have the "Times Tender," etc.

Earning 100 WSJ Bucks for sharing an article on Facebook is more appealing to the reader than paying one-tenth of a cent for an article, they argue. Readers could then cash out the micro-credits they have earned via a centralized banking system. The news outlets could also sell points to the readers.

How the Banking System Works

Hayes and Graybeal see a centralized banking system as being crucial when building a seamless user experience for paying for news. It is also needed to address the transaction costs that are associated with micropayments. The banking systems gives especially local news outlets more control over the pricing of the news, the pair says.

"If a big story breaks in Clayton, Georgia, and the local newspaper, the Clayton Tribune, is the only one who has the story on it, the newspaper should be able to leverage that for their business, and not have the price forced on them by the national news organizations," Hayes said. "The central banking systems allows you to maintain the local focus, have different prices on different products and different places, all that streamlined into one banking system."

Here is how the banking system could work, according to Hayes' and Graybeal's proposal. Let's say the New York Times' currency is called Times Tender, and the user pays $100 for 100 Tenders. With one Tender, the reader can get an access to 10 Times articles. The Times has partnered with a micropayment billing platform that enables the reader to purchase articles with one click.

The users' Times Tender profile is linked to their Facebook and Twitter accounts. When they share a news article on social media and somebody from their network purchases the article, the billing system recognizes this and gives the reader credit.

"The key is to have a seamless user experience," Hayes said. "It has to be easy to use so that it is appealing to the readers."

Micropayments as Part of a Revenue Ecosystem

Graybeal and Hayes emphasize the importance of local and hyper-local focus in journalism, and see their micropayment model that could work for local news.

"Local news has always been a bread and butter for newspapers, but often times when talking about business models we are talking only about big players such as the New York Times," Graybeal said. "But a large amount of newspapers don't fall into this category, and there is a big opportunity for journalism in the neighborhoods that nobody is really covering."

Graybeal and Hayes see micro-earning as one revenue model in the ecosystem of revenue streams that consists of advertising, subscriptions and micropayments.

"This is not the solution, but can be one of the solutions", Hayes said.

He said readers have to be given different options for how to pay for news, such as through subscriptions or one article at a time via micropayments.

"In a paid content environment, outlets will leave money on the table and do a disservice to readers if multiple options for payment are not offered," Graybeal said.

Tanja Aitamurto is a journalist and a Ph.D. student studying collective intelligence in journalism. She has studied innovation journalism at Stanford, and has degrees in journalism, social sciences, and linguistics. Tanja advises media companies and non-profit organizations about business models, reader engagement and community building. As a journalist, she specializes in business and technology. She contributes mainly to the Huffington Post and to the Helsingin Sanomat, the leading daily newspaper in Finland, as well as to the Finnish Broadcasting Company.

This is a summary. Visit our site for the full post ».

July 15 2010

18:21

Kachingle Hopes 'Social Payments' Can Help Fund Content

If advertising alone isn't going to support all the online journalism and content sites, and pay walls will just turn readers away, perhaps there's another solution, a third way: Social payments. More than just simple donations, social payment systems such as Kachingle and Flattr simplify giving money to sites you visit. Both services set up a monthly payment system, with a set amount each month, and the more sites you like, the more ways your payment is split.

While Flattr is still in a closed invite-only beta test, Kachingle launched in February and works a bit differently. Here's the basic run down for Kachingling (yes, it's also a verb):

1. Sign up at the site to pay $5 per month through a credit card or PayPal. No more, no less.

2. Go to sites that have Kachingle enabled and become a Kachingler for them by clicking on their Kachingle medallion. Big Kachingle sites include the Daily Camera in Boulder, Colo. and Carta.info in Germany.

3. Kachingle will pay out your money to the sites each month based on which ones you visit the most. They begin making a payment when the site gets at least $3.35.

4. Kachingle takes about 7% of your $5, PayPal takes 8%, and the sites get 85%.

So far, there are less than 300 sites that take Kachingle payments, but there's been a huge uptake in Germany. Ulrike Langer, who runs the German new media blog Medial Digital, told me that she was impressed by the new social payment services.

"I think it's a great opportunity for bloggers like me who would never make that much in advertising," she told me. "I realize that from the tiny amount of money I get from Google AdSense. As soon as I heard about Kachingle, I checked it out. The concept appealed to me because regular users of my site, who read the feed and come back regularly, would have a way to say 'thank you' that's more than just leaving a comment or clicking the 'Like' button for Facebook."

So far, Langer's best month of income from social payments was 40 Euros from Flattr, and about $15 to $20 on Kachingle. That's not exactly going to pay the rent, but she's still impressed to get that much as these services are in their infancy.

I got the chance to talk in-depth to Kachingle founder Cynthia Typaldos, who told me why she started the service, what the challenges are to get publishers on board, and how it's often more about creating a bond for users and sites rather than being all about money. The following is an edited transcript of our talk, with some video clips shot with my Flip cam.

Q&A

Tell me about social payments, explain to me what they are, and also tell me about your own background.

Cynthia Typaldos: My background is all high-tech. I have a degree in computer science, an MBA at MIT, and I've worked at a number of technology companies, including Sun Microsystems. I did my first startup called GolfWeb in 1995. I'm not a golfer, by the way, but it was a great place to learn about the social aspect of the Internet, because most of golf is about being social. Then I did another startup called Real Communities, which was an earlier form of Ning, but was too early. So this is my third startup.

As far as social payments, it's the name that's gelling now around people voluntarily paying for free content online. It sounds crazy, in a way, because you wonder why people would pay for free stuff. But we think it's a new movement that will be successful because people want to support great digital content and services they love, to make sure they'll be around. On Kachingle, they get credit for that and build a persona around what they're consuming and supporting.

What was your motivation for starting Kachingle?

Typaldos: I got the idea a few years ago. What happened was that my best friend got brain cancer -- it's a sad story. Her English wasn't very good and so she asked me to do brain cancer research on the Internet. So I did, I went around and got all this information, and at the end of the month I gave it to her. Afterwards I wanted to give $100 to all the sites that helped me out in my search, but it was all a blur. I couldn't remember all the sites, and didn't know how often I'd been there. It wasn't about a contribution to cure brain cancer, it was a contribution to support great information and show that I valued it.

How have you funded it?

Typaldos: [laughs] Believe it or not, I don't advise people to do this, but I sold my house and used the proceeds so I could work on this full-time and fund web hosting and things like that. I've also brought in some partners who have put in some money, and we have some angel funding.

How has your growth been so far? How many sites are using it and how many users do you have?

Typaldos: That's a good question. We have almost 300 sites ... and we have individual blogs. What's important is that we're getting the idea of social payments out there. The main thing that's important is how many times our medallion is served up. The medallion is our widget that runs on publishers' sites. And those views have peaked at more than 1 million medallion views per day.

Typaldos explains how they are trying to create a new social norm, and will be launching new Twitter and Facebook apps:

I'm curious what the excuse is from larger newspaper websites who won't use your service. What is their excuse? It seems like a simple enough thing to try.

Typaldos: What it takes is there needs to be a person at the company who is forward-thinking, is willing to experiment, and has the authority and power to implement the medallion on their website. It only takes like five minutes. There aren't any integration issues. When you are talking about pay walls, those systems take time to implement. [To get Kachingle on a site] takes a champion and it takes a champion with clout.

Tell me how it works. Does a publisher's site have to have PayPal to make it work? Can they take credit card payments?

Typaldos: It's really very simple. A publisher pulls the medallion from our site, and posts our medallion on their site -- and they could even have multiple medallions for various parts of the site. Each medallion can have its own PayPal account. So they could have the money go to the newspaper's finances or it could even go to one journalist. It's their choice. Yes, it does go into PayPal, so they need an account to retrieve it.

What's your cut in the equation and what's the cost with PayPal?

Typaldos: This is an interesting question. We wanted to make it incredibly simple. We manage all the financial transactions through PayPal. So we can tell people using our system that 85 percent of the money they put in will go to the publishers' hands. We manage all the transaction fees. We went to PayPal and did a deal with them for the pay-in when people buy the $5 subscription, and we told them we had to have a better price, and we did a deal on the pay-out too. We got those fees down to 15 percent, ours is about 7 percent and theirs is 8 percent. We got them down from 11 percent but think it should be even lower.

We're really happy with PayPal because they were willing to do this deal with us even though we're just a small startup. The reason they did the deal is that they really believe this will be a very big market, and they want to be part of that market. They improved their existing products for us, and they'll be coming out with new products to make it even better.

It seems like a perfect fit between what you do and what non-profit news sites might want.

Typaldos: We do think there are lots of great non-profits in the journalism field that don't have a regular source of revenues. So we're really pleased we have signed up a bunch of non-profits, including the Pulitzer Center for Crisis Reporting, the Center for Investigative Reporting and the Center for Public Integrity, and many more. We're excited about that, but we have plenty of good blog sites doing great journalism as well. It's really up to the users to decide what to reward and what the user values.

Typaldos talks about how Kachingle is trying to build up the user base by signing up more publishers:

How did you come up with $5 per month, and why are you so strict about people putting in no less and no more than that?

Typaldos: It's a really interesting question. Early adopters and bloggers love lots of choices, but our target audience is ordinary people and they don't like a lot of choices. I don't know if you've read The Paradox of Choice by Barry Schwartz, but it's one of my favorite books. He talks about how you go into a store and there are 25 types of peanut butter, and it doesn't make your life any easier. We want to send a signal to users -- they don't know how much to spend when they first sign up, they don't know what their friends are doing.

It's like tipping. If you didn't know the standard 15 percent to pay for tips, each time you went out to eat, it would be a stressful experience. We wanted it to be $5, no thinking, to reduce the barrier for getting people to sign up. We're also saying that $5 is enough, these are micropayments, and we're not expecting people to be putting in $100 or even $30. Over time, we will start sending some signals saying that their friends are giving $10 a month, and would they like to give more. But without social signals people don't really know what to choose ... Eventually we'd like to bring people up to $10 to $12 on average per month.

What's been your biggest compliment from people and your biggest complaint?

Typaldos: The compliments largely come from the more than 300 sites who have got more money -- but it's not always about money, it's often more about building a stronger bond with users. We even had users write to us saying, 'please I'd like to Kachingle a certain site but they don't have the medallion -- can you make them do it?' We're trying to figure out how to make that happen. The biggest compliment is from the sites and users saying they want to connect, and connect in a monetary way.

As far as the biggest complaint, the biggest difficulty, is in Germany -- we're big in Germany and the U.S. -- where they require a credit card just to use PayPal for a subscription, even if the credit card isn't being used. And credit cards aren't big in Germany so it's an issue for us. We're working with PayPal to fix that. It's been our biggest issue.

One other compliment we get is on being totally financially transparent. As a user, you can see exactly where your money goes. You can track every penny. I felt that this was incredibly important because users really want to know where their money is going. I call it 'crowdsource auditing.'

Typaldos tries to explain why Germany is such a popular place for Kachingle:

How do you differ from the online tipping services?

Typaldos: One of those companies, TipJoy, went out of business. A lot of these companies have way too many mental transaction costs. We're not a tipping system. A tipping system requires you to figure out how much to pay each time. For us, you just start at Kachingle and pay $5 a month, and choose the sites you want to pay once, and we do all the work in the background -- figuring out which sites you went to most, and splitting the money that way. It's a simple, fair algorithm. Most systems before required people to take action each time.

There's a new company in the space, Flattr, and a new French company too called Rue89, so soon there will be three companies. The more, the better, because we are trying to change social norms. There's dramatic differences between Flattr and us. They ask you to click a button like a Facebook "Like" button to give money. We're very much different than that, because you only have to turn on the medallion once for a site to give money to them.

*****

What do you think about social payment systems? Could it help with the business model of online news and journalism? What will it take for them to break through to a wider audience? Share your thoughts in the comments below.

This is a summary. Visit our site for the full post ».

July 12 2010

15:36

Journalism Online paid content system gets first user with obits paywall

Paid content system Journalism Online has its first user, reports Poynter. Lancaster Online, website for the Intelligencer Journal and Lancaster New Era titles in the US, will use the micropayments platform to paywall its obituaries from today.

Readers outside of Lancaster County will be free to view up to seven obits, after which they will have to pay $1.99 a month or $19.99 for an annual subscription.

Journalism Online was set up by former US newspaper executives Steve Brill, Gordon Crovitz and Leo Hindery in June last year and received investment from News Corp last month.

Lancaster Online’s obituary pay scheme would “not amount to enough to reverse the fortunes of our newsroom, in and of itself”, admits the site’s editor of content development Ernie Schreiber. “But it might be a model for the next steps in how we meter other content (…) And it might pay for a few reporters.”

Poynter’s Bill Mitchell criticises certain elements of the move, including the fact that Lancaster Online is simply moving established content behind a paywall and not offering anything new to incentivise would-be customers:

One area where Lancaster falls short: providing customers with significant new value to persuade them to spend money today for something they got yesterday for free. How many more obit subscriptions might LancasterOnline sell, in other words, if it were to bundle customized obit newsletters as part of its monthly or annual fee?

Research suggests however that there is a healthy market for obituaries within the Lancaster Online readership. According to Schreiber, more than five per cent of the 47.4 million pages viewed the previous year were obituaries, and 100,000 readers outside of the county accessed an obituary page over that year.

Journalism Online’s Adam Crovitz said Lancaster’s launch of the Journalism Online system will be followed by “many other launches over the summer”.

He claimed that the most popular “will be metered access to a website as a whole rather than a focus on a particular area of content”.

Full story at this link…Similar Posts:



June 17 2010

17:03

Spot.Us Case Study Shows Impact of Crowdfunding on Journalism

Platforms such as Spot.Us and Kickstarter have shown that crowdfunding can work as a financing mechanism for journalism. We will likely see more crowdfunded stories in the future, which means it's important study how crowdfunding impacts journalism and the role and work of a journalist.

I'm currently in the process of completing a Ph.D. project about collective intelligence in journalism, and my case study about Spot.Us attempts to address these issues. I interviewed 15 Spot.Us donors and reporters for the study, which I presented last week in the form of a research paper at IJ-7, the Seventh Conference on Innovation Journalism at Stanford.

This is the first of two blog posts based on my paper. In this post, I offer five observations on how the crowdfunded process impacts journalism from the reporter's and donor's point of view. The quotations below are taken from the interviews I conducted with Spot.Us reporters and donors.

The Reporter's Point of View

Donating bonds readers to reporters -- Donating is a significant act that bonds reporters to the community members (a.k.a. readers). Reporters said it's very motivating to see that the community is willing to support their work. This is how one Spot.Us reporter described the feeling: "It feels great. It feels gratifying ... And seeing somebody paying $20 for a story -- it is way more than 20 cents." Reporters described the act of donating as "heartening," "gratifying" and "personally motivating, beyond professionally motivating." They consider the donors as their supporters. For them, donating is an act that supports their work and the topics they are working on.

Strong sense of responsibility -- The connection created by donations develops a strong sense of responsibility within the reporters. Reporters described this as being different from the feeling of responsibility that comes with a traditional assignment. It goes beyond the usual feelings of "professional responsibility." A Spot.Us reporter explained how this additional level of responsibility felt to her: "It is more than having it written in a nice style and formatted properly, things you worry about for an editor. You worry more about the accuracy, really honest reporting and presenting the issues correctly, because these people have directly invested in you."

Direct connection to the readers -- Rather than writing for an editor, reporters said they feel as though they're writing for the community. They find it rewarding to have a direct connection to readers, and to know who the readers are. One reporter said: "When I started working on the story [for Spot.us] I already knew who the readers are, whereas when writing a usual story [in a traditional journalism model] sometimes it feels like writing for a black hole."


Discomfort with pitching -- Spot.Us reporters don't feel comfortable pitching in public. For example, they feel hesitant to reach out to their social networks to raise awareness of their pitch. "I'm a journalist, not a salesperson," said one reporter. "I can't make myself go out and promote my pitch." Another reporter compared pitch promotion to begging by saying it's like asking for spare change by shaking a tin can on the street. Traditionally, journalists pitch directly to editors rather than to the public. Reporters said they would feel more comfortable promoting their pitch in public if Spot.Us organized promotional events that they could participate in.

Freedom to experiment -- Reporters said Spot.Us is more than just a way to finance their work; they see it as an opportunity to experiment with new methods of journalism, and an opportunity to experiment with tools such as video and infographics. The platform gives the reporters freedom they have been longing for.

The Donor's Point of View

Donating doesn't bind donors -- Donating doesn't bind donors as strongly as it binds journalists. After donating to a story, donors often don't return to the Spot.Us site to read the final work. They are more likely to stay connected with the story process if they receive notifications from Spot.Us, but even then the connection remains loose. "I'm not actually engaged with what has happened on the site," one donor said. "I will wait to get the email [telling me] here's the story done, here you are, here's the output of it. A part of it is that I'm not incredibly close to these stories."
spotusdonor.jpg Not eager to leave comments, submit tips -- Donors are not eager to participate in ways other than donating. They usually said that they don't have enough knowledge to submit tips to a story. One donor put it this way: "I participated by donating. I don't have so much to say about the topic, and I'm not used to leaving comments on websites." The donors rarely interacted with the journalists, even though Spot.Us encourages readers to do so.



Donating to a good cause -- Donors tend to support stories that have relevancy or connection to their lives. However, the primary reason for donating seems to be that they want to support a healthy society, and they consider journalism to be an essential element of this. Donating is more about supporting a good cause or the common good, rather than supporting a specific story pitch. Donors do not expect a master journalistic piece for their donation, though they are happy if that happens. "I don't think I'm gonna get anything [for my donation]," said one donor. "I'll learn something out of the process ... I consider this as a donation for the common good, more than anything else, or any kind of personal gain."

Donating to change the world -- Donors hope the stories they support will make a difference in society. They see articles as a way to produce change for the better in society by revealing wrongdoings or inequalities.

Donating builds one's identity -- The act of donating to a pitch helps builds one's sense of personal identity. Donors who are on Twitter usually tweeted after they had donated. Some donors said the act of donation made them feel part of the community, even though they were unable to define what that community is.

In my next blog post, I will discuss and analyze what these observations mean for journalism. For more information about the study or for the full paper, please contact me at tanja.aitamurto at gmail.com or on Twitter as @tanjaaita.

Tanja Aitamurto is a journalist and a Ph.D. student studying collective intelligence in journalism. She has studied innovation journalism at Stanford, and has degrees in journalism, social sciences, and linguistics. Tanja advises media companies and non-profit organizations about the changes in the field of communication. As a journalist, she specializes in business and technology. She contributes mainly to the Huffington Post and to the Helsingin Sanomat, the leading daily newspaper in Finland, as well as to the Finnish Broadcasting Company. Tanja splits her time between San Francisco and Finland, her home country.

This is a summary. Visit our site for the full post ».

June 01 2010

14:00

Parsing Panera: Could a name-your-own-price model work for news?

The former CEO of Panera Bread recently announced an intriguing experiment: The chain’s store in Clayton, Missouri is doing away with prices. The Clayton franchise, now run as a nonprofit restaurant and renamed the “Saint Louis Bread Company Cares Cafe,” offers the same products as typical Panera stores, the same baked goods and soups and salads. Instead of assigning a monetary value to the products, though, the store leaves it to customers to decide what they’ll pay. “Take what you need, leave your fair share,” reads a sign above the store’s counter.

Name-your-own-price schemes like this aren’t new; often, they don’t work. (“If you use a PWYW scheme too liberally, you are courting financial disaster,” the economist Stephen Dubner points out. “Just imagine if Tiffany & Co. held a PWYW day on all diamond jewelry.”) But sometimes — under the right circumstances — the approach can be quite effective. At One World Everybody Eats, a community kitchen in Salt Lake City, Denise Cerreta runs an analog service to the Panera experiment: Instead of pricing the meals One World serves, she asks customers to pay what they can — and, she told me, “to pay it forward when they can.” She’s doing something right, it seems: One World’s been in business for seven years.

Which brings me to the question you’ve seen coming, but one I’ll come out and ask anyway, as a thought experiment if nothing more: Could the Panera payment model work for news?

Request, not demand

First of all, there’s plenty of evidence to suggest that it couldn’t. Carta, the German public-affairs publication, is currently the highest-grossing participant on the donation-facilitator site Kachingle. Carta’s current yield from Kachingler donations is $198.27 — from a total of 65 people. Oof. Membership drives both journalistic and otherwise tend to suggest specific notation amounts for a reason: We like prices. Or, more specifically, we’re conditioned to expect them.

But what if our expectations changed? What if news outlets built into their online interfaces a more structured, and systematic, request for content compensation? Take, again, One World. One of the reasons Cerreta’s effort works is that, at the cafe, consumer behavior is monitored: The kitchen has built into its physical layout what Cerreta calls a “point of accountability” — a point at which, moving through the consumption-to-satisfaction continuum, consumers know that this is the moment they’re expected to compensate the kitchen for what they’ve (literally) consumed. In One World’s case, the accountability point is a simple donation box. One that is situated — explicitly, purposely, unavoidably — in public.

And that makes a big — and perhaps all the — difference. (Recall the “Big Brother Eyes” experiment from a few years ago.) Which means that, when the accountability is negotiated in private — when there is only, as in the case of online news, the glare of the computer screen to cast light on our shoulders’ angels and devils — our willingness to drop dollars in the donation box certainly becomes a more open question. But, then, what if we took a looser approach to publicness — what if we translated Cerreta’s physical accountability point to the ephemeral interactions of the web? Even if we citizens need a little push to behave in private with as much civic sensibility as we would in public, there’s nothing to say that news outlets can’t provide — or, at least, experiment with providing — that push. It would simply be a matter of building the push into the structure, and patterns, of consumption. Of creating, to modify Cass Sunstein’s phrase, an architecture of accountability.

Step one would be re-framing the terms of the transaction when it comes to compensating news providers for the content they provide: from fee (obligatory, and therefore purely economic) to donation (optional, and therefore suggestive of social good). It’s a semantic shift, certainly; but it could be a psychological one, as well.

Take the work of Edward Deci. In a series of experiments in the 1970s, the social psychologist examined the behavior of two groups of subjects: One was asked to solve a puzzle; the other was told it would be paid for solving the same puzzle. Those who worked for what Deci called the “intrinsic” reward of solving the puzzle — the simple satisfaction of a job well done — were, he found, more successful in finding solutions than those who were paid. Payment functioned, ironically, as a disincentive.

Deci was studying the motivation to work, rather than the motivation to pay; still, his overall finding (officially, that “contingent monetary rewards actually reduced intrinsic task motivation”) is illustrative. Introducing the concreteness of payment into an otherwise more ephemeral exchange can sometimes discourage action, rather than encouraging it; assigning monetary value to goods and experiences has a way of confining — and even negating — their broader value. Pricing is practical, of course, and, for the most part, entirely necessary. Still, we prefer to think of ourselves as motivated by something other than — something more than — rote obligation. And price tags, general necessity notwithstanding, tend to rob us of our altruism.

Accountability and urgency

What Deci’s findings suggest for news is that, paradoxically, “It’d be nice if you paid” could actually be more incentivizing for consumers than the more blunt, and more transactional, “You have to pay.” Paywalls are one thing; pay doors, if you will — come on in! have a bite! pay what you think is fair! — are another. Permeability suggests trust; expectations of good behavior have a way of encouraging good behavior. Broken windows, in reverse.

Again, though, publicness (read: public accountability) is key; roughly the same number of people who want to be good citizens want to be recognized for being good citizens. Every year, I receive a series of emails from my college (usually featuring a slick little slideshow: “Campus in the Fall,” “Campus in the Spring,” “Campus in the Summer, with Children and Puppies and Rainbows”) asking for contributions to its Annual Giving drive. And it usually takes several of those emails before I actually make my donation. It’s not that I don’t want, or for that matter intend, to give back; it’s just that the give-back ask lacks urgency. The payment isn’t a demand; it’s a request. It doesn’t have to be paid now; it can be paid whenever. And that decelerates the dynamic of the transaction.

One of the most recent emails I received, though, tapped into something other than nostalgia: It featured a long list of donors from my class — ostensibly, as a way of thanking them for their contributions by way of public acknowledgment…but also, of course, as a way of highlighting those who hadn’t yet contributed. The loud, empty space between ‘Ganson’ and ‘Geannette,’ I have to say, made for an excellent disincentive against future dallying. Suddenly, the urgency was implicit.

The Alumni Giving staff, in other words, built into their donation request a point of accountability. Not a virtual cash register, a “pay now, or you won’t get the goods you want” approach — an impossibility for donation-seekers who sell not goods but potential good — but a more subtle (and, yet, just as impactful) message: “pay now, or everyone will know you haven’t paid.” Social capital is an economic good as much as a civic one; the AG donation-seekers wove that fact into their email so implicitly that their request suddenly bore the semblance of demand. By highlighting the social, rather than the monetary, aspect of their appeal, they conveyed the fact that they meant business. Literally.

Leveraging the social economy

When it comes to the problem of monetization, we sometimes to fall into the trap of equating “pay model” with “pay wall.” We assume that news is a straight commodity, and that the cash register model is therefore the only viable option for monetizing it. (“We’re not NPR, after all.”) But the commodity-focused approach ignores the social aspects of media economics. Particularly online, with the web’s built-in mechanisms of mutuality, news is a social good as much as (and perhaps even more than) a product to be bought and sold. It is also an experience good — something that needs to be consumed before its value can be accurately determined. A tip-based model — which combines reward for a job well done with the social prestige of being generous enough to leave a tip in the first place — actually makes more sense than a paywall, which is necessarily predictive in nature.

Cerreta’s name-your-own-price experiment, and my Alumni Giving’s public-accountability approach — not to mention the experience of, yes, many a public media membership drive — suggest the raw potential of a request-oriented, rather than a demand-oriented, approach to the pay-for-news problem. They hint at what might happen when we bring a little humanity to paid content’s practical, yet wholly impersonal, business proposition. Most of us, after all, are much happier to make donations than to pay bills. Even if the checks we write are for the same amount.

That’s not to say that reframing the terms of transaction is a broad answer to the seeping problem of content monetization; “no silver bullets” has become a common refrain for a good reason. (Plus, as Laura Walker, president and CEO of WNYC, told me in a conversation about PWYW’s scalability, “I think there is a much stronger pull toward supporting an organization that is not supported by advertising — that is not there to deliver an audience to advertisers — but is there because of a mission. I think that’s why people value us.”) It is to say, though, that it may be worth widening the scope of consideration when it comes to how we think about payment structures in the first place. The many experiments we’re seeing with social media right now — HuffPo’s implementation of recognition for committed community members, Gawker’s star commenter system, Spot.us’s and Kickstarter’s public donor lists, Foursquare’s merit-badge framework — leverage users’ cultural connection to the news — and their desire to be recognized for, essentially, good citizenship within the cultures news systems create.

What would happen if those same motivations were employed in the service of monetizing online news? What would happen if we shift our focus from transactions to exchanges? Kachingle may not have revolutionized online payment structures; then again, its digital tip jar is a rare presence on websites. But what if The New York Times — or The Washington Post, or The Huffington Post — had its own kind of Kachingle? What if it also had a badge-like way of praising, publicly, the people who had financially supported its services? What if, instead of erecting a paywall, it built its site on an architecture of altruism?

It’d be an experiment, certainly. An experiment that well might fail. Still, though: I’d love to see what would happen if we broaden our notion of what a viable pay model could be.

March 26 2010

17:43

PayPal Hopes to Lure Publishers to Its Micropayment System

With all the talk about paid content coming back into vogue (thanks, Rupert Murdoch!), it's a wonder that PayPal hasn't been part of the conversation. The tech startup that's now part of eBay has been dominant in handling online payment transactions and is projected to have $5 billion in sales by 2011, according to Bloomberg. But so far, a grand total of just one major newspaper publisher has shown interest in PayPal's offer to handle their online payments: FT.com.

Sam Shrauger, PayPal.JPG

Why the slow uptake for PayPal? I talked with Sam Shrauger, vice president of global product strategy for PayPal, who said the problem is that publishers are still unsure what their business model will be online. It turns out that FT.com is more aggressive than most at charging for online content. The site already has a "metered wall" that lets people read a certain number of free articles per month; a new trial test with PayPal might charge people for daily or weekly access to articles -- and perhaps micropayments down the road.

PayPal has had a micropayments product for a few years. It charges publishers a smaller fee per transaction that regular PayPal for merchants. But even that micropayment fee structure -- 5 cents per transaction plus 5 percent of the value -- is way too high for publishers who want to charge pennies per article. PayPal is now working on a new model for micropayments that will allow publishers to process transactions as a group in order to lower the overall charges.

"The challenge is how do you make a $1 transaction attractive to everyone from an economic standpoint," Francesco Rovetta, director of PayPal's mobile unit, told Bloomberg at SXSW. "We are finalizing the development of that business model."

Meanwhile, I spoke to Shrauger in-depth last month to get an update on where PayPal was going, and how it would woo content sites to use its payment services. The following is an edited transcript of our phone conversation.

Many publishers are looking for a payment system or micropayment system for their online content. Tell me more about what you offer them.

Sam Shrauger: We recognized the need back in 2005 for publishers of any kind of content to cost effectively process small transactions. We introduced about four years ago micropayment processing which are intended for people selling things in small dollar or sub-dollar increments. Pricing is probably the biggest issue that publishers run into, because the cost for processing is prohibitive for them. We've introduced a pricing mechanism that is a fixed fee of 5 cents plus 5 percent of the transaction value that's intended to be cost effective for publishers.

Our core offerings to all our merchants -- whether it's retail or content -- is to provide them safe, secure and cost-effective payment processing, and do it in a way that's fast, easy and safe for their consumers. So we've combined that pricing structure with all our publisher or merchant products to allow them to have a payment platform that works for their business.

So you are charging 5 cents plus 5 percent for whatever the micropayment is?

Shrauger: Right. Our typical pricing structure is anywhere from 1.9 percent to 2.9 percent of the transaction value plus a 30-cent fixed fee. That's obviously not something that works well for folks who are selling items or content that's under $10, so that's why we introduced the micropayment system.

So who are some of the publishers that are using your micropayment system?

Shrauger: We have a variety of folks who are using that. We've had iTunes as a merchant going back to at least 2005. We have SpareChange, which is one of the big social media processors, and I can give you some other names. Napster is another one.

How does your offering compare to those of competitors such as Journalism Online and others?

Shrauger: I won't comment specifically on any competitors, but we see two camps of people trying to support payment needs. We are a payment processing provider, and what we intend to do for publishers or online merchants is make their payment processing cost effective and safe and easy. There are a variety of folks springing up around the operational management of paid content, people who help build the pay walls and manage digital rights that goes on around that. We see those folks as partners with whom we can work with to provide the operational functions so publishers can manage paid content.

Shrauger talks about how he is less concerned with competitors than he is with publishers working out their business model for paid content:

As far as the payment part of the transaction, do you feel like you have a head start on any new players in the space because you've been doing it so long?

Shrauger: I think there are a lot of dimensions in payment of digital content that are somewhat unique. In any form of digital content -- whether it's music or downloadable games or paid content -- there are some unique characteristics and we have experience dealing with them. In particular, there's a fair amount of fraud in the digital goods space, probably more than in any retail/commerce vertical. Fraud management is something we've build our business on, and I think we have the deepest experience in managing that risk in online transaction.

The second thing is convenience, particularly when you're talking about smaller dollar transactions. When you're talking about folks who want to pay to read an article or download a piece of content, that's not a transaction that consumers want to spend a lot of time in the checkout process for. One of the things PayPal has done for consumers is make the payment process safe and efficient for them. The speed of checkout is another place where we've distinguished ourselves.

And lastly, the micropayment structure that we are offering is very compelling. People say that they typically have to pay pretty high costs per transaction, and the PayPal micropayment rates are very effective for people wanting that.

How would you break down the revenues you get from regular PayPal payments and micropayments?

Shrauger: We don't break out those numbers publicly, but I would say that if you look at the overall world of e-commerce, I think paid content, which includes all digital goods, is about a $49 billion market this year. Relative to overall e-commerce which is about $250 billion to $300 billion. So paid digital content is smaller relatively to the total e-commerce market -- about 15 percent to 20 percent. And within that, micropayments are a fairly small but growing percentage of that market. We think it's about 25 percent of all digital content sold. So the market itself is not that large, but it's something that's starting to grow, and will grow even more as cost effective payment options come into the market. That's been the barrier to folks effectively managing businesses on a micro-transaction level.

Shrauger explains why PayPal is a better fit for newspaper publishers than Google for processing payments:

What were your challenges to get micropayments to work? Was that the main challenge or were there others?

Shrauger: The other challenge that's always a driver in this space is that the process for a user to make a micropayment has to be very brief. Whereas consumers are used to checking out with a full shopping cart experience and filling out some payment pages for a typical payment process for $50 or $100, that's not something they are interested in doing for a $1 or $3 transaction. The focus for us has been to make the actual process of payment as fast and efficient as possible for the consumer.

For people who have PayPal accounts already it's a very fast and quick experience.

paypal logo.jpg

The other thing I would add is the point around fraud. The other thing in the digital space is that the fraud rates tend to be higher than in other verticals largely because the goods are delivered instantly, as opposed to physical goods, where the merchant has time to check an order or check a customer before shipping the product to them. In the digital goods context, you make your payment and your game currency or whatever you're buying is available instantly, so it's something that can be turned around and resold really easily by a fraudster.

So how does the micropayment system at PayPal differ from the regular PayPal transaction?

Shrauger: What a lot of these merchants will do is, after a first payment with PayPal, they will allow you to make purchases without having to log in every single time you want to make that purchase. We have a product that allows them to initiate another transaction against your account without you having to log in every time. What that allows you to do is one-click payments effectively with those merchants.

If someone is trying to sell a micropayment that's literally 5 or 10 cents, that would be hard to do with PayPal if you are charging 5 cents, right?

Shrauger: There's obviously a floor to where micropayments processing for anyone is tenable. What I would say there is we're always looking for ways to make those transactions more cost effective and get pricing structures that will work across the entire spectrum of transaction sizes.

Shrauger explains how some merchants aggregate their own micropayments before processing them, similar to what iTunes does:

Is there anything else that publishers would like to see other than fraud protection?

Shrauger: Everything I read about paid content makes it seem like it's so binary: either paid content is going to work or it's not going to work. My perspective and PayPal's perspective is that there will be models that work in this industry and they will be very dependent on a lot of things. It will depend on the content and the demographic of who consumes that content, and where it's distributed. Every one of those business models might take a different form. Some will be successful on a subscription basis, others on a micropayment basis, others might be successful with a hybrid of those things. Our perspective is that we can offer the publisher the ability to operate their business in whatever way makes sense for them and not have the cost of payment processing be an impediment to that.

What about internationally? Do you see publishers outside the U.S. showing interest in payment systems as well?

Shrauger: Absolutely. I think it was in the fourth quarter of 2008 that we made our micropayments processing available worldwide, and we support 24 currencies now, and it's something we're continuing to expand. If you look globally everyone's wrestling with the same set of issues. Will consumers pay, and if so, in what fashion and in what amount? How do we then process those transactions? Those are global needs.

*****

What do you think about PayPal as a possible vendor for publishers who want to charge for their content? Is it a viable option or too expensive as currently set up? Share your thoughts in the comments below.

PayPal logo photo by Lava via Flickr.

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

This is a summary. Visit our site for the full post ».

February 05 2010

15:00

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.

February 02 2010

15:00

Media’s next top business model: survey suggests hybrids

It’s not just newspapers struggling to find their way in the digital era. Many content companies — broadcasting, film, music, publishing, and gaming — are grappling with the same business model uncertainty.

In a recent survey (pdf), the consulting firm Accenture asked 102 content-industry leaders to pick the biggest hurdle they face. Overwhelmingly, executives pointed to the hunt for a viable business model. And since they’ve asked the same question (sort of — see below) for three years, we can look at how execs’ thoughts have shifted over time.

First, the data shows a clear decline in what Accenture calls the “pay-for-play” concept — something like what we in the news context would term micropayments or “the iTunes model.” In 2007, 23 percent of respondents were banking on micropayments as the next top business model. In 2008, that number dropped to 11 percent. In 2009, it fell to just 8 percent.

But beyond that, the changing nature of the options Accenture gave respondents muddies the waters a bit. In 2009, the survey included two new options: “freemium” (some content remains free, users can pay for extra content) and “hybrid” (a combination of different models, like ads plus a subscription). One could easily argue that freemium is a type of hybrid, and for the chart above, Accenture chose to combine the hybrid responses with advertising ones. (The 60 percent you see above is actually 39 percent advertising, 21 percent hybrid.)

I spoke with David Wolf from Accenture’s media division about what we should take away from the findings. He said that the clear takeaway here is that “hybrid” models are the next big thing. “The only thing we can discern as we get through our research and look at it is there is no business model clearly emerging as ‘the one,’” Wolf explained.

Going hand-in-hand with a hybrid business model is an aggressive transition to a multi-platform delivery strategy. “What we conclude [from the survey] is that the platforms and the growth need to be viewed as integrated,” Wolf explained. “How do we create offerings that span the screens?” About 65 percent of respondents said new platforms or method of delivery is where they’ll find business growth next year, compared to 25 percent by creating new content, and 10 percent by expanding to new geographic areas. Those are all roughly similar to previous years.

Another trend to watch is the media industry moving toward a more personalized use of data. Rather than thinking about audience in broad terms, Wolf predicts media companies will get better at tailoring to individuals the way a hotel chain attracts customers with loyalty programs. Where companies once went after a demographic group like tweens, Wolf mentioned, “we’re changing that mindset” to something much more individualized.

January 24 2010

13:10
12:56

January 08 2010

15:00

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.

November 20 2009

20:00

How Steve Brill has adjusted his pay-for-news pitch

Because it’s my job, I’ve followed pretty much everything Steve Brill has said in public about Journalism Online, the pay-for-news firm he launched in April with Gordon Crovitz and Leo Hindrey. From the start, they’ve been offering infrastructure and consulting for news organizations that want to charge for access to their websites. But as you’d expect with any new venture, the pitch has changed over time. Here are some tweaks I’ve noticed:

Ditching the term “paywall”

Brill has always been clear that he isn’t advocating a subscription-only approach for news sites. Some content will be free, some will be available only to those who pay. But whereas Brill used to use the term “wall” to describe subscription content, he’s now abandoned that language. “We’re not putting up any kind of a paywall,” he’s been saying, most recently in a heated interview on WBUR. “It’s not a paywall,” he said at a Yale conference last week.

That’s a semantic distinction but one that naturally raises the question: What type of stuff will be subscription-only? I posed that question to Brill at Yale, seeking specific examples, but he wouldn’t say much beyond “unique” and “premium” content. (Steve Outing recently prompted an interesting thread on what, exactly, premium content is.) I didn’t come away with a clearer idea of what his clients intend to charge for, just that I shouldn’t call it a paywall.

Embracing the metered model

Journalism Online will power any type of payment system that publishers choose, but Brill’s thinking has shifted on which strategy is best. Last year, he drafted a memo for The New York Times that championed micropayments and subscriptions for the newspaper’s entire website. In June, he told me, “We don’t think micropayments are going to be a huge part of this deal.” These days, he’s been talking up the metered model employed by The Financial Times, which offers 10 free articles a month before users are required to pay.

Brill’s firm claims trademarks on the names of six models — he calls them “dials” — that news publishers could employ:

— High Activity Pay Points (metered model)
— Selected Content Pay Points (partial paywall)
— Time-Based Pay Points (charge for new content)
— Enhanced Service Pay Points (charge for special features)
— Market Access Pay Points (charge based on user’s location)
— Preview Activity Pay Points (allow previewing of paid content)

Broadening the target audience

In the spring, Brill told me the goal was “to get the 5 or 10 percent of your most committed readers to pay.” This summer, he expanded that target in an interview with CNN: “The idea is that a newspaper probably has 10 or 15 percent of its audience who are the most engaged, who come to that Web site all the time. Those are the people who will be asked to pay a small portion.”

At Yale last week, he said “10 or 15 or 20 percent” of a news site’s unique monthly visitors might be willing to pay. I don’t presume to know what a realistic goal is, though that’s obviously crucial to the success or failure of paid-content plans. I do know that one study found “core loyalists,” who visit 2 to 3 times a day for 20 days a month, represent 25% of visitors to newspaper sites. So if you’re probing Brill’s estimates, there’s your starting point.

Exaggerating his firm’s success

“We now have over 1,200 affiliates,” Brill said on the radio yesterday, making it sound like 1,200 publications are ready to charge their readers for digital content. Asked to clarify, he said, “Companies representing or owning over 1,200 publications have all signed letters of intent.” We know that includes Guardian News and Media, which doesn’t appear likely to charge readers. Most of the other companies that have signed non-binding letters of intent remain a mystery, which makes the whole thing increasingly mysterious.

Brill is certainly under no obligation to disclose his clients, but the more he touts a dubious figure, the more skeptical I grow. Here’s a harder statistic, reported by Poynter: Between 5 and 15 publishers will start testing Journalism Online’s infrastructure “in the next month or so.” The firm’s own business model is dependent on at least some of its 1,200 affiliates pulling the trigger: Journalism Online is taking a 20% cut of subscription revenue.

November 05 2009

00:27

Google CEO Eric Schmidt envisions the news consumer of the future

For all the bluster about Google as an enemy of the news industry, you might be surprised to learn that Eric Schmidt, the company’s CEO, is kind of a triumphalist for mainstream media, big newspapers, and print.

He took questions from reporters this afternoon at Google’s offices in Cambridge, and I asked him, among other things, why Google News had recently begun attaching a “(blog)” label to some news sources — a move I criticized last month. Schmidt ended up bringing up bloggers’ moms:

Me: A very small question. Google News very recently added a label for blogs, to differentiate from non-blogs. It seemed weird in 2009 to make that distinction. I wondered, did you have any input on that or —?

Eric Schmidt: I was not directly involved in that. There seems to be a difference between blogs and traditional news. It’s sometimes hard to distinguish because many people in the traditional news are also bloggers.

Me: Or they use a blog platform.

Schmidt: Or they use a blog platform. So we’re trying to find that line. And it’s hard to articulate what that difference is.

Me: How would describe that line if it’s not based on the tech behind the publishing platform?

Schmidt: No, it’s not the technology. My guess is — again, I’m speculating, which is always a mistake — it has a lot to do with the infrastructure around the writer. So a blog that’s associated with a major, legitimate organization — of which, I think, the majority, if not everyone, in the room is associated with — would be, I think, treated differently than an individual blogger who’s using his or her right of free expression to say whatever he thinks. So the presence of an editor, as an example. You know, an editor that’s not your mom.

That is, for what it’s worth, not the distinction Google News is making: The “(blog)” label is supposed to be attached to any news published with blogging software. At the time, I thought Google might be throwing a bone to newspaper companies that don’t like being lumped with amateur news sources. And while I’m sure the new label was not important enough to reach Schmidt’s desk, his framing of that distinction — “the infrastructure around the writer” — is an interesting one.

I also asked Schmidt about the concept of a “hyperpersonalized news stream,” coined by Google VP Marissa Mayer to describe a customized flow of information from a broad range of news sources. Does Google have aspirations to build on that concept?

Schmidt: We have about ten news stream ideas, of which hyperpersonalization is one. And, again, I’d rather not talk about specific products or even prioritize them, but I would make the following observation: In five or ten years, what will the primary news reader look like?

Well, that person will be probably on a tablet or a mobile phone, probably the majority of the reading will presumably be online not offline, just because of the scale of it. It’ll be highly personalized, right? So you’ll know who the person is. There’ll be a lot of integration of media — so video, voice, what have you. It’ll be advertising-supported and subscription-supported, so you’ll probably have a mixture. Think of the Kindle as an example. The Kindle is a proto of what this thing could look like. People will carry these things around.

So if you start thinking about that, it becomes pretty obvious what the products need to be: more personalized, much deeper, capable of deeper navigation into a subject. Also, show me the differential. Since you know what you told me yesterday, just tell me what changed today. Don’t repeat everything.

As some news organizations begin charging for digital content, I wondered, how is Google positioned to aid or take advantage of those moves? I mentioned the company’s proposal to power micropayments for news sites with Google Checkout.

Schmidt: The first question: What percentage of news organizations will charge for content? And it’s entirely their decision. If they do so, then we want to make sure that we have products that they can use to help them charge. Right? Because we’re in the infrastructure business. We respond. But, to me, that’s a relatively straightforward infrastructure decision. Could we get them to use Google Checkout, other payment systems, and so forth? But I think it’s early to talk about that.

We also, for newspapers that are trying to solve the revenue gap problem, we’re working hard on stronger advertising products for newspapers. And we’ll see how well they do, but it remains an unsolved problem. That’s probably all I — everything else is tied up in discussions with specific —

David Beard, editor of Boston.com, asked about a remark Schmidt made last month regarding Google’s “moral responsibility” to aid the news industry. Schmidt’s reply:

Schmidt: We have a responsibility. We have not yet figured out how to exercise that responsibility…We’re looking for new ideas. It’s a hard problem because, as everybody knows, printed circulation has declined, and the online use of newspapers has exploded positively. So you’ve got a bridge problem between one and the other, and we want to help. We really do.

A few other tidbits outside our purview:

— Schmidt said invite-only Google Wave is “getting ready for a much broader distribution…very soon,” which he clarified to mean within weeks.

— Surveying the laptops of reporters in the room, he said, “We’ve got a couple Macs — always my favorite.”

— And asked about something Microsoft CEO Steve Ballmer said, Schmidt replied, “I’ve learned not to respond to quotes by Steve Ballmer.”

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

Don't be the product, buy the product!

Schweinderl