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May 29 2013

21:39

The scariest chart in Mary Meeker’s slide deck for newspapers

I linked earlier to Mary Meeker’s new slide deck. For those who don’t know it, Meeker — formerly of Morgan Stanley, at VC firm Kleiner Perkins since late 2010 — each year produces a curated set of data reflecting what she sees as the major trends in Internet usage and growth. It may be the only slide deck that qualifies as an event unto itself.

Last year’s deck had one slide that I liked to cite when talking about the print advertising prospects for newspapers going forward. It’s this one:

mary-meeker-adshare-2011

The basic idea here is to compare the share of attention in various media to the share of ad spend. (This is U.S. data.) In other words: 43 percent of the time Americans spend consuming media is spent watching television. And 42 percent of the advertising dollars spent in America go towards television advertising. It’s a pretty good balance.

While there’s no ironclad law that ad dollars will always perfectly follow attention, it seems like a pretty good working assumption. And the main takeaways from that slide are (a) that print still gets a wildly disproportionate share of ad spend (25 percent) when compared with time spent (7 percent), and that (b) mobile is in the opposite situation — lots of attention (10 percent) but not many dollars (1 percent).

If you think that, all else equal, ad dollars will tend toward equilibrium with attention, that’s (a) a really scary thought for print — newspapers and magazines both — and (b) a sign that news organizations had better be putting a lot of effort into monetizing mobile.

That was last year’s slide. This is this year’s:

mary-meeker-adshare-2012

This picture isn’t any prettier. Print attention is down one percentage point; print advertising is down two. But the gap between them still yawns. Any time you hear someone be optimistic about the return of print advertising dollars, think about this slide and realize print ad dollars still have a long way to go down.

Meanwhile, mobile is continuing its move in the opposite direction: up 2 percentage points in time spent, and up the same in dollars. Mobile advertising went from a $1.6 billion business to a $4 billion business in a single year. Not much of that went to newspapers.

April 03 2013

10:33

What's Holding Back Responsive Web Design? Advertising

Responsive web design -- where "one design fits all devices" -- continues to gain momentum. Dozens of responsive sites have popped up, and a recent post on Idea Lab from Journalism Accelerator outlined how and why media sites should go responsive.

onlineadsevolved_seriesimage_sm.jpg

But hold your horses. Despite the mounting hype, responsive websites are still far from becoming ubiquitous, and for good reason.

As much as responsive web design improves user experience and makes it easier for publishers to go cross-platform, the industry's struggle with delivering profitable ads during the first big shift from print to web is still happening. And in this second big shift to a responsive web, that struggle is magnified.

It Has To Look Different

The surface-level problem that a responsive-designed website poses for advertising is that ads are typically delivered in fixed dimensions (not proportional to the size of their container) and typically sold based on exact position. Initial solutions to this issue largely focus on making ads as flexible as the web page, i.e., selling ads in packages that include different sizes to fit all sorts of devices, rather than the traditional fixed-width slots, or making ads that are themselves responsive. Ad firm ResponsiveAds, for example, has come up with various strategies for making ads adjust to different screen sizes.

rwd2.jpg

These diagrams from ResponsiveAds show how display ads themselves can respond to different screen sizes.

But these approaches are not yet ideal. For example, when the Boston Globe went responsive in 2011, the site used just a few fixed-sized ads, placed in highly controlled positions that could then move around the page.

max.jpeg

Andrés Max, a software engineer and user experience designer at Mashable, told me via email: "In the end technology (and screen resolutions) will keep evolving, so we must create ads and websites that are more adaptive than responsive."

Here, he means that ads should adapt to the medium and device instead of just responding to set resolution break-points. After all, we might also need to scale up ads for websites accessed on smart TVs.

Miranda Mulligan, the executive director of the Knight Lab at Northwestern University and part of the team that helped the Globe transition to responsive, agrees. She told me via email, "We need a smarter ad serving system that can detect viewport sizes, device capability, and they should be set up to be highly structured, with tons of associated metadata to maximize flexibility for display."

rwd3.jpg

Moreover, many web ads today are rich media ads -- i.e., takeovers, video, pop-overs, etc. -- so incorporating these interactive rich ads goes beyond a flexibility in sizes. A lot of pressure is resting on designers and developers to innovate ad experiences for the future, but evolving tech tools can help clear a path for making interactive ads flexible and fluid. The arrival of HTML5 brought many helpful additions that aid in creating responsive sites in general.

"HTML5 does provide lots of room for innovation not only for responsive but for richer websites and online experiences," Max said. "For example, we will see a lot of use of the canvas concept for creating great online games and interactions."

Display Advertising Is Still Broken

In the iceberg of web advertising problems, what ads will look like on responsive sites is just the tip. According to Mulligan, a major underlying problem is still the lack of communication between publishing and advertising. The ad creation and delivery environment is infinitely complex. Publishers range from small to very large, and much of the web development code and creative visuals are made outside of the core web publishing team.

One of the problems is that there are so many moving parts and parties involved: ad networks that publishers subscribe to; ad servers that publishers own themselves; ad servers that publishers license from other companies; sales teams within large publishers; the Interactive Advertising Bureau (IAB); and more. The obligatory silos make it very hard for good communication and flexible results to transpire.

mulligan-headshot.jpg

The challenge of mobile advertising on responsive sites, Mulligan later said via phone, "has very little to do with the web design technique and has a lot to do with the fact that we have really complicated ways of getting revenue attached to our websites."

In other words, the display ad system is still broken. And now, the same old problem is more pronounced in responsive mobile sites, where another layer of complication is introduced.

"We have to go and talk to seven different places and say, 'you know how you used to give us creative that would've been fixed-width? What we need from you now is flexible-width,'" Mulligan said.

While responsive web design inherently may not be the source of advertising difficulties, the fact that it amplifies the existing problems is a good reason for web publishers to be cautious about going responsive. In the meantime, a paradigm shift in how web content generates revenue is still desperately needed. Instead of plunging into using responsive ads for responsive sites, perhaps everyone can get in the same room and prototype alternatives to display ads altogether.

The Boston Globe screenshots above were captured by the BuySellAds blog.

Jenny Xie is the PBS MediaShift editorial intern. Jenny is a senior at Massachusetts Institute of Technology studying architecture and management. She is a digital-media junkie fascinated by the intersection of media, design, and technology. Jenny can be found blogging for MIT Admissions, tweeting @canonind, and sharing her latest work and interests here.

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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%.

October 15 2010

15:00

This Week in Review: The iPad’s pay potential, Chile miner over-coverage, and another Murdoch paywall

[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]

Advances for paid content on the iPad: We start this week with a whole bunch of data points regarding journalism and mobile devices; I’ll try to tie them together for you the best I can. Conde Nast, one of the world’s largest magazine publishers, has done the most thorough iPad research we’ve seen so far, with more than 100 hours of in-person interviews and in-app surveys with more than 5,000 respondents. Conde Nast released some of its findings this week, which included five pieces of advice for mobile advertisers that were heavy on interactivity and clear navigation. They also discovered some good news for mobile advertisers: The iPad’s early users aren’t simply the typical tech-geek early adopter set, and about four-fifths of them were happy with their experiences with Conde Nast’s apps.

MocoNews had the most detailed look at Conde Nast’s study, arguing that the fact that iPads are shared extensively means they’re not being treated as a mobile device. Users also seemed to spend much more time with the mobile versions of the magazines than the print versions, though that data’s a little cloudy. NPR has also done some research on its users via Twitter and Facebook, and the Lab’s Justin Ellis reported that they’ve found that those listeners are generally younger, hardcore listeners. Together, Facebook and Twitter account for 7 to 8 percent of NPR’s web traffic, though Facebook generates six times as much as Twitter.

There were also a few items on newspapers and the iPad: Forbes’ Jeff Bercovici reported that the New York Post will become the first newspaper without a paid website to start selling an iPad app subscription. The subscription is only sold inside the app, a strategy that The Next Web’s Martin Bryant called a psychological trick that ”makes users feel less like they’re paying for news and more like they’re ‘Just buying another app.’” The British newspaper The Financial Times said its iPad app has made about £1 million in advertising revenue since it was launched in May, but as Poynter’s Damon Kiesow noted, local papers have been slow to jump on the iPad train, with only a dozen of launching apps so far.

Meanwhile, GigaOM’s Mathew Ingram ripped most magazine iPad apps for a lack of interactivity, openness or user control, saying, “the biggest flaw for me is the total lack of acknowledgment that the device this content appears on is part of the Internet, and therefore it is possible to connect the content to other places with more information about a topic.” But some news organizations are already busy preparing for the next big thing: According to The Wall Street Journal, some national news orgs have begun developing content for Samsung’s new tablet, the Galaxy, which is scheduled to be released later this year.

Too much of a good story?: Regardless of where you were this week, the huge story was the rescue of 33 Chilean miners who had been trapped underground for more than two months. The fact that it was such an all-encompassing story is, of course, a media story in itself: TV broadcasters planned wall-to-wall coverage beforehand, and that coverage garnered massive ratings in the U.S. and elsewhere. (We followed on the web, too.) With 2,000 journalists at the site, the event became a global media spectacle the likes of which we haven’t seen in a while.

The coverage had plenty of critics, many of them upset about the excessive amount of resources devoted to a story with little long-term impact by news organizations that are making significant cuts to coverage elsewhere. The point couldn’t have been finer in the case of the BBC, which spent more than £100,000 on its rescue coverage, leading it to slash the budget for upcoming stories like the Cancun climate change meetings and Lisbon NATO summit.

The sharpest barbs belonged to NYU prof Jay Rosen and Lehigh prof Jeremy Littau. “The proportion of response to story impact is perhaps the best illustration of the insanity we seen in media business choices today,” Littau wrote, adding, “I see an industry chasing hits and page views by wasting valuable economic and human capital.” Lost Remote’s Steve Safran pointed out that the degree of coverage had much more to do with the fact that coverage could be planned than with its newsworthiness.

Rupert keeps pushing into paywalls: After his Times and Sunday Times went behind a paywall this summer, Rupert Murdoch added another newspaper to his online paid-content empire this week: The British tabloid News of the World. Access to the paper’s site will cost a pound a day or £1.99 for four weeks, and will include some web exclusives, including a new video section. PaidContent gave the new site itself a good review, saying it’s an improvement over the old one.

The business plan behind the paywall didn’t get such kind reviews. As with The Times’ paywall, News of the World’s content will be hidden from Google and other search engines, and while paidContent reported that its videos had been reposted on YouTube before the site even launched, the paper’s digital editor told Journalism.co.uk that it’s working aggressively to keep its content within the site, including calling in the lawyers if need be. The Press Gazette’s Dominic Ponsford argued that the new site formally marks Murdoch’s retreat from the web: “Without any inbound or outbound links, and invisible to Google and other search engines, the NotW, Times and Sunday Times don’t really have internet sites – but digitally delivered editions.” British journalist Kevin Anderson was a little more charitable, saying the strategy just might be an early step toward a frictionless all-app approach to digital news.

As for Murdoch’s other paywall experiment at The Times, two editors gave a recent talk (reported by Editors Weblog) that juxtaposed two interesting ideas: The editors claimed that a subscription-based website makes them more focused on the user, then touted this as an advantage of the iPad: “People consume how you want them to consume.”

News orgs’ kibosh on political expression: NPR created a bit of buzz this week when it sent a memo to employees explaining that they were not allowed to attend the upcoming rallies by comedians Jon Stewart and Stephen Colbert (unless they were covering the events), as they constitute unethical participation in a political rally. The rule forbidding journalists to participate in political rallies is an old one in newsrooms, and at least eight of the U.S.’ largest news organizations told The Huffington Post their journalists also wouldn’t be attending the rallies outside of work.

NPR senior VP Dana Davis Rehm explained in a post on its site that NPR issued the memo to clear up any confusion about whether the rallies, which are at least partly satirical in nature, were in fact political. NPR’s fresh implementation prompted a new round of criticism of the longstanding rule, especially from those skeptical of efforts at “objective” journalism: The Wrap’s Dylan Stableford called it “insane,” Northeastern j-prof Dan Kennedy said the prohibition keeps journalists from observing and learning, and CUNY j-prof Jeff Jarvis made a similar point, arguing that “NPR is forbidding its employees to be curious.”

A closer look at Denton and Huffington: In the past week, we’ve gotten long profiles of two new media magnates in a New Yorker piece on Gawker chief Nick Denton and a Forbes story on Arianna Huffington and her Huffington Post. (Huffington also gave a good Q&A to Investor’s Business Daily.) Reaction to the Denton articles was pretty subdued, but former Gawker editor Elizabeth Spiers (who wrote the Huffington piece) had some interesting thoughts about how Gawker has become part of the mainstream, though not everyone agrees whether its success is replicable.

Figures in the pieces prompted Reuters’ Felix Salmon and Forbes’ Jeff Bercovici to break down the sites’ valuation. (Salmon only looks at Gawker, though Bercovici compares the two in traffic value and in their owners’ roles.) The two networks have long been rivals, and Denton noted that thanks to a couple of big sports-related scandals, Gawker’s traffic beat the Post’s for the first time ever this week. Also this week, Huffington announced she’d pay $250,000 to send buses to Jon Stewart’s rally later this month, an idea the Wrap said some of her employees weren’t crazy about.

Reading roundup: Busy, busy week this week. We’ll see how much good stuff I can point you toward before your eyes start glazing over.

— A few follow-ups to last week’s discussion of Howard Kurtz’s move from The Washington Post to The Daily Beast: The New York Times’ David Carr wrote a lyrical column comparing writing for print and for the web, PBS MediaShift’s Mark Glaser interviewed Kurtz on Twitter, and former ESPN.com writer Dan Shanoff pointed out that the move from mainstream media to the web began in the sports world.

— An update on the debate over content farms: MediaWeek ran an article explaining why advertisers like them so much; one of those content farms, Demand Media said in an SEC filing that it plans to spend $50 million to $75 million on investments in content next year; and one hyperlocal operation accused of running on a content-farm model, AOL’s Patch, responded to its critics’ allegations.

— Two interesting discussions between The Guardian and Jeff Jarvis: Guardian editor Alan Rusbridger posted some thoughts about his concept of the Fourth Estate — the traditional press, public media, and the web’s public sphere — and Jarvis responded by calling the classification “correct but temporary.” The Guardian’s Roy Greenslade also wrote about his concern for the news/advertising divide as journalists become entrepreneurs, and Jarvis, an entrepreneurial journalism advocate, defended his cause.

— Three other good reads before we’re done:

GigaOM’s Mathew Ingram told newspapers it’s better to join Groupon than to fight it.

Newspaper analyst Alan Mutter laid out French research that illuminates just how far digital natives’ values are from those of the newspaper industry — and what a hurdle those newspapers have in reaching those consumers.

Scott Rosenberg looked at the closed systems encroaching on the web and asked a thought-provoking question: Is the openness that has defined the web destined to be just a parenthesis in a longer history of control? It’s a big question and, as Rosenberg reminds us, a critical one for the future of news.

August 20 2010

14:00

This Week in Review: Patch’s local news play, Facebook takes location mainstream, and the undead web

[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]

Patch blows up the hyperlocal model: AOL’s hyperlocal news project, Patch, launched a site in Morristown, New Jersey, this week — not a big story by itself, but Morristown’s site was also the 100th in Patch’s network, part of the Internet giant’s plan to expand to 500 hyperlocal news sites by the end of the year. Newark’s Star-Ledger and NPR both profiled AOL’s hyperlocal efforts, with The Star-Ledger focusing on its extensive New Jersey experiment and NPR looking more at the broader picture of hyperlocal news.

PaidContent added some fascinating details from Patch president Warren Webster, such as the tidbit that Patch determines what communities to enter by using a 59-variable algorithm that takes into account factors like income, voter turnout, and local school rankings. And Advertising Age’s Edmund Lee compared Patch with several of its large-scale-content rivals, finding it most closely comparable to Philip Anschutz’s Examiner.com.

patchAs Steve Safran of the local-news blog Lost Remote noted, Patch is hiring 500 journalists to run those sites and is touting itself as the nation’s largest hirer of journalists right now. That, of course, is good news for people who care about journalism, but the far bigger issue is whether Patch will be financially sustainable. Safran was skeptical, arguing that Patch needs relevant local advertising, which requires not just reach but relationships. The Boston Phoenix found several other people who also wonder about Patch’s long-term prospects. Ken Doctor asked some good questions about Patch’s implications for local news, including whether it will disrupt the handcrafted local ad networks that have been the domain of non-templated startup local news blogs.

Facebook is going Places: Facebook made a long-anticipated announcement Wednesday, rolling out its new location-based service, Facebook Places. It’s all the tech blogs have been talking about since then, so there’s plenty to wade through if you’re interested in all the details, but Search Engine Land did a good job of discussing the basics of the service and its implications. It made one particularly salient point, given that Facebook has partnered with all of the leading location-based services (FoursquareGowallaBooyah, and Yelp): Location check-ins have officially become a commodity, and location services need to expand beyond it. (It also means, to borrow Clay Shirky’s point, that location-based technology is about to get socially interesting, since it’s quickly becoming technologically boring.)

Facebook isn’t yet doing anything to drive revenue from Places, but Lost Remote’s Cory Bergman noted that Places’ inevitable widespread acceptance could “usher in a new era of local advertising” when Facebook incorporates proximity-based advertising. Facebook is already paving the way for that shift, asking advertisers to help fill out its directory of places. Fast Company’s Kit Eaton took a deeper look at how Facebook Places will change location-based advertising, though Terry Heaton called Facebook Places’ revenue potential a missed opportunity for local news organizations.

Despite Facebook’s preemptive privacy defense with Places — by default, check-ins are visible only to friends and can be limited further than that — it still faced some privacy pushback. Several privacy advocates argued that people are going to have a difficult time finding ways to control their privacy on sharing locations, and the ACLU said that, once again, Facebook is making it much easier to say “yes” to Places than “no.” One of those advocates, dotRights, provided a guide to Facebook Places’ privacy settings.

Is the web really dead?: In its most recent cover story, Wired magazine declared the web dead, with its editor, Chris Anderson, arguing that in our quest for portability and ease of use, we’ve moved into an app-centered world led by Apple, Facebook, Twitter, RSS, Netflix, and Pandora. The result, Anderson said, is that we now prefer “semiclosed platforms that use the Internet for transport but not the browser for display,” a universe not ruled by Google or HTML.

Not surprisingly, such a sweeping statement was met with quite a bit of resistance. Web luminaries Tim O’Reilly and John Battelle dived into the arcane in their lengthy debate with Anderson, while plenty of others across the web also had problems with his decree of death. Boing Boing’s Rob Beschizza provided the most cogent statistical argument, showing that while Anderson depicts the web as decreasing in the percentage of Internet use, its total use is still exploding. Terry Heaton and TechCrunch’s Michael Arrington argued that the web still functions well and serves as the basis for many of the “apps” Anderson makes his argument from, with Heaton positing that Wired (and Apple) are still operating on a set of scarcity-based presumptions in a world now defined by abundance. Gawker’s Ryan Tate noted that Wired first released its article on its profitable website, while sales of its iPad app are down.

Quite a few others took issue with the idea of declaring things dead in the first place. ReadWriteWeb and Technologizer tallied lists of very-much-alive things that were long ago declared dead, and The Atlantic’s Alexis Madrigal criticized Anderson’s view that tech is “just a series of increasingly awesomer things that successively displace each other” as long ago proven wrong. Here at the Lab, Jason Fry made a similar point, writng that “the web isn’t dying but being joined by a lot of other contact points between the user and the sea of digital information, with points emerging for different settings, situations, and times of day.”

Murdoch’s tablet newspaper plan: The Los Angeles Times reported late last week that Rupert Murdoch’s News Corp. is developing a new national U.S. “digital newspaper” to be distributed solely as a paid app on tablets like the iPad. The publication would feature short, easily digestible stories for a general audience, and would compete with papers like USA Today and The New York Times. Its newsroom would be run under the New York Post. Murdoch said he sees this as a “game changer” in the news industry’s efforts to reach younger audiences, but news industry vet Alan Mutter was skeptical: “Newspaper content tends to attract — whether on print or on an iPad or however — mostly the same kind of readers,” Mutter told the Times. “Not necessarily younger readers.”

Mutter wasn’t the only dubious one. Murdoch biographer/gadfly Michael Wolff ripped the idea, and TechCrunch’s Paul Carr noted that News Corp. tried a similar idea in Britain in 2006 for free, which bombed. The idea this time around, Carr argued, “reflects less a bold strategy to convince a new generation of readers that good journalism is worth paying for and more the 79-year News Corp proprietor’s desperation to keep the cash flow coming until the company’s profitability becomes someone else’s problem.”

Drawing on a survey of iPad users, Mario Garcia said that Murdoch’s plan for quick, snappy stories doesn’t fit well with the iPad’s primary role as a relaxing device. At least one person was encouraged by Murdoch’s idea, though: Missouri j-prof Clyde Bentley called it the cannon shot that will scare the herd of newspaper executives into seriously pursuing mobile media.

News Corp. also made news by donating $1 million to the Republican Governors Association. I’ll leave most of the analysis of that move to the politically oriented media critics, though media consultant Ken Doctor outlined a good case for the gift’s importance in the journalism world. We also got a report that Murdoch’s British tabloid, News of the World, will go paid online by October. The Guardian’s Roy Greenslade wasn’t impressed by that initiative’s prospects for success.

Reading roundup: Lots and lots to get to this week. In the spirit of Rupert Murdoch, I’ll keep it short and snappy:

— The fallout from last week’s Google-Verizon proposal continued into the weekend, with both watchdogs and Google allies raising concerns about the future of net neutrality. Harvard Internet law professor Jonathan Zittrain had plenty more thoughtful things to say about the flap, and The Wall Street Journal had a lengthy interview with Google CEO Eric Schmidt about that issue and several others.

— We got some discouraging news from a couple of surveys released this week: Gallup found that Americans’ trust in traditional news organizations remains historically low, while a comScore study found that (surprise!) even young news junkies don’t read newspapers. Each study had a silver lining, though — Gallup found that young people’s trust in newspapers is far higher than any other age group, and comScore showed that many young non-print readers are still consuming lots of news online. Here at the Lab, Christopher Sopher wrote a sharp two-part series on attracting young would-be news consumers.

— Google’s Lyn Headley is continuing his series of articles explaining the new Rapid News Awards, and each one is a smart analysis of the nature of aggregation and authority. They’ve all been worth checking out.

— Two great resources on interesting trends within journalism: the Lab’s series of videos, via the Knight Foundation, of a recent discussion among a who’s-who of nonprofit journalism leaders; and Poynter’s Mallary Jean Tenore’s article on the encouraging resurgence of long-form journalism in its online form.

— Finally, Florida j-prof Mindy McAdams sparked a great discussion about what skills are necessary for today’s reporter. If you’re a college student or a budding reporter (or even a veteran one), give this conversation a close read.

August 10 2010

18:00

To click or not to click: Could tiered data plans water down advertising possibilities for news publishers?

In the good old days (of three months ago) you could surf the web on your iPhone with abandon. Do I want to watch this video? Sure! Do I want to download this huge attachment? Why not? Data plans were unlimited; there was no need to think twice, at least not about cost. And that offered news organizations hope, especially when the iPad came along. Maybe slick smart phones and tablet devices would usher in a new advertising revenue stream more akin to print advertising rates than the standard, abysmal web rates.

But now AT&T has nixed the all-you-can-eat data plans for users of the new iPhone 4 and the iPad. (Some lucky folks have been grandfathered in.) And rumor has it that Verizon will soon follow suit with their smartphone plans. It sounds like the Internet’s trajectory from dial-up pay-by-the-minute plans to unlimited — only in reverse. I can picture my mother now: It’s 1995 and she’s waiving the AOL bill frantically, exasperated. What are you spending all this time online doing? Back then, the Internet was like the worst big box store you can imagine: get in, get what you need, and get out. Quickly. When the billing structure for Internet usage went unlimited, Internet use exploded in our house — and everywhere. It’s a version of Chris Anderson’s “mental transaction costs” — even “very cheap” forces a thought process that “free” does not.

So what happens when we move back to a world where data is scarce? Will we act like I did in the days of my 300-minute cell phone plan? (Wherearewemeeting? OKbye!) With consumers facing an extra $15 per extra 200 MB used (depending on your plan), will news sites — particularly those heavy on video — suffer from user indecision? This New York Times video on New Orleans bounce weighs in at 32.9 MB; our latest video is 216 MB. Mobile versions are smaller when available, but even then, a few videos can send users of the cheapest iPhone plan down the toll road. (AT&T estimates that someone on that plan could watch only 20 minutes of streaming video a month before hitting the cap.)

I spoke with Jeff Whatcott, senior vice president of marketing for the online video platform Brightcove, which provides the video back end for lots of news sites. He said that while the shift may cause some changes in user behavior at the margins, he doesn’t predict a shift away from mobile video. If anything, he says, Brightcove has seen the opposite: The iPad has triggered immense interest among advertisers, who want to get rich media like video ready for mobile.

Whatcott suspects that AT&T wouldn’t set prices in such a way that they’d “kill the golden goose.” If users started seeing their monthly bill skyrocket, they might abandon their devices. But going over, say, ten bucks a month? Abandonment seems less likely. “The people that are buying [mobile devices] have disposable income and unless the cost of these new data plans are just exorbitant, where people are getting bills for hundreds or thousands of dollars, I think the costs are going to be in that reasonable range.” No one likes paying the cable bill, he points out, but most of us do anyway.

But what about just the threat of a higher bill? Could fear water down use? Whatcott says he can imagine that sentiment, it being somewhat like using a costly international data plan, which he does traveling. “I think it’s a real world concern,” he says, “but it hasn’t been an acute thing that has bubbled up to us as a crisis.”

I also reached out to Adobe, which helped Wired build its successful iPad app, which weighs in at a whopping 500 MB. Dave Dickson, product marketing manager for digital publishing at Adobe, said he didn’t think the move away from unlimited data would have a big impact on apps like Wired’s. AT&T already limits the downloading of large (over 20 MB) apps to wifi or desktop connections only, and downloading an entire magazine issue at once eliminates the slow dribble of data that its web equivalent would involve.

Indeed, a shift to wifi is a common prediction for how consumers would react to capped data plans. AT&T has in the past pushed iPhone owners to shift to wifi whenever possible.

Still, smartphones are designed to be mobile devices, and it’s not realistic to expect users to have wifi available anywhere they’d like to consume content. “Should smartphones emerge as the device class of choice,” Dickson emailed, “publishers may need to tailor their content package to the capabilities of the device (for example, streaming video instead of embedding it) so that users can more easily download and view content applications under bandwidth-restricted conditions.”

Mobile Marketer Daily explored this topic when the new data plans were announced, and analysts for the mobile ad industry agreed that the new structure is unlikely to reverse a trend toward an explosion in mobile devices. “I don’t think this move by AT&T will slow the adoption of smartphones and connected devices like the iPad, as enough consumers have experienced first-hand the benefits of how these devices enrich their daily life,” Paul Kultgen, director of mobile media and advertising at Nielsen Online, Chicago told Mobile Marketer Daily.

In any event, we’ll find out in the coming months whether there’s any real impact for mobile video. If you’re on a newly tiered plan and watching your KBs the way you once watched your minutes, has it affected how you surf the web?

April 12 2010

12:28

The future is mobile, and other thoughts from Google CEO Eric Schmidt’s speech at ASNE

Yes, he got the inevitable “shouldn’t you pay content providers?” question from an audience member. And, yes, he gave the inevitable “most news organizations actually want the traffic we provide” answer. But for the most part, though it tread familiar territory, Google CEO Eric Schmidt’s speech last night — delivered to a packed half-ballroom at the American Society of News Editors conference in DC — was an impressive feat of rhetorical tight-rope-walking. (Text: You, news editors, are guardians of democracy. Subtext: You, news editors, should probably rethink your patrol systems.)

So was the speech well-received? My read: the crowd reception to the uber-exec and his thoughts was cordial, but — despite the many, many compliments Schmidt paid to journalism and journalists during the course of the talk — not overly friendly. (Usually, at a speech like this, there’d be a vibrant back-channel conversation, via Twitter, that would allow a more nuanced assessment. Last night’s speech didn’t have that back-talk; relatively few people were tweeting it, though many were taking notes on reporters’ pads.)

Below, I’ve excerpted the sections of the talk that I found most interesting; they’re listed in chronological order to give you an idea of the arc of the speech.

On newspapers and discovery:
I love newspapers. I love of reading them — that when you’re finished, you’re done, and you know what’s going on. I love the notion of discovery that newspapers represent…. Newspapers are fundamental, not just in America, but around the world.

On information and democracy:
We have goals in common. Google believes in the power of information. We believe that it’s better to have more information than less. We also understand that information can annoy governments and annoy people…but that ultimately the world is a better place with more information available to more and more people. And the flow of accurate information, of the diverse views and debate that we’re so used to, is really, really fundamental to a functioning democracy.

On criticism (and sympathy):
You all get criticized all the time. On the left, you get criticized for being too liberal. On the right, you get criticized for being too conservative. In our case, we just get kicked out of China. Same thought.

On journalism as an art form:
We’re not in the news business, and I’m not here to tell you how to run a newspaper. We are computer scientists. And trust me, if we were in charge of the news, it would be incredibly accurate, incredibly organized, and incredibly boring. There is an art to what you do. And if you’re ever confused as to the value of newspaper editors, look at the blog world. That’s all you need to see. So we understand how fundamental tradition and the things you care about are.

On the best of times, the worst of times:
You have more readers than ever; you have more sources than ever, for sure; you have more ways to report. And new forms of making money will develop. And they’re underway now…. So we have a business model problem. We don’t have a news problem. That’s ultimately my view.

On our new emphasis on now-ness:
What do our children know now that our parents did not know when they were the age of our children? They know about now. They know about precisely now, in a way that our parents’ generation did not. That this now-ness drives everything…and what happens is, you experience the reality of the moment in a way that’s much, much more intense.

On the implications of now-ness:
It’s creating a problem which I’m going to call “the ersatz experience problem.” On the one hand, you have a sense of connectedness to everything — literally, every event globally…but you also have a false sense of actual experience, since you’re not really there. So the trade-off is that you know everything, but you’re not physically in any one place. And that shift is actually a pretty profound one in the way society’s going to consume media and news and so forth. And all of us are part of it. And Google is obviously moving it forward.

On Google’s “mobile-first” focus:
It’s important to understand that three things are coming together: the powerful mobile devices that …are paired with the tremendous performance that we can now get on computers…it is the sum of that, and the capabilities and the technologies that will exploit the sum of that, that will define the next ten or twenty years for all of us. So when I say “Internet first,” I mean “mobile first.”

Now, some of the most clever engineers are working on mobile applications ahead of personal computer applications. People are literally moving to that because that’s where the action is, that’s where the growth is, there’s a completely unwashed landscape, you have no idea where folks are going to go.

On news’ mobile/personal/multi-platform future:
Google is making the Android phone, we have the Kindle, of course, and we have the iPad. Each of these form factors with the tablet represent in many ways your future….: they’re personal. They’re personal in a really fundamental way. They know who you are. So imagine that the next version of a news reader will not only know who you are, but it’ll know what you’ve read…and it’ll be more interactive. And it’ll have more video. And it’ll be more real-time. Because of this principle of “now.”

When I go to a news site, I want that site to know me, to know about me: what I care about, and so forth. I don’t want to be treated as a stranger, which is what happens today. So, remember me. Show me what I like. But I also want you to challenge me. I want you to say, “Here’s something new. Here’s something you didn’t know.”

On the sheer volume of information out there today:
The Internet is about scale. I was studying this, because I was trying to figure out how big this thing is. Between the dawn of humanity and 2003, roughly 5 Exabytes of information were created. (An Exabyte is roughly a million gigabytes.) We generate that amount in every two days now…. So there is a data explosion. And the data explosion is overwhelming all of us. Of course, this is good business for Google and others who try to sort all this out.

On the future of display ads:
If you think about it in this context — you have this explosion of mobile devices, you have this connection, and so forth — what does this mean for the business world? Well, it’s obvious that advertising, which is the business Google is in, is going to do very well in this space. Because advertising works well when it’s very targeted. Well, these devices are very targeted. So we can give a personalized ad.

Furthermore, Google — and others — are busy building vertical display ads that look an awful lot like the ads that look an awful lot like the ads that are in traditional newspapers…. In the next few years, you should be able to do very, very successful display advertising against this kind of content. You may not be able to do it against murders, because it’s very difficult to get the right targeted ad in that case — what, are you going to advertise a knife? It’s obviously terrible. I’m not trying to make a joke about it; it’s a real business problem.

On the future of subscriptions:
We and others are working on ubiquitous ways in which subscriptions can be bundled, packaged, and delivered. We’re seeing this today with both the Kindle and the iPad. Both of which have this subscription model which you can test. You can actually find out, “What will people pay for this?” And eventually that model should have higher profitability. Because it has a low cost of goods, right, because you don’t have the newspaper and the printing and distribution costs. So there’s every reason to believe that eventually we’ll solve this and ultimately bring some significant money into this thing.

On the need for experimentation:
A Ralph Waldo Emerson quote is, “Don’t be too timid and squeamish about your actions; life is an experiment.” On the Internet, there is never a single solution…. The fact of the matter is there are no simple solutions to these complex problems. And in order to really find them, we’re going to have to run lots of experiments.

April 08 2010

18:30

Three ways Apple’s iAd might impact the news industry’s continued advertising woes

Apple’s Steve Jobs just unveiled iAd, the company’s new advertising platform for the iPhone and iPad. It’s an ad platform designed for apps, like the news apps that many news organizations make, and Jobs promises to use the app framework to provide a more interactive, engaging, and rich-media experience to users. Here’s his pitch. (Quotes are taken from Engadget’s live coverage of today’s Apple event and thus may be off by a few words here and there.)

We have a lot of free or reasonably priced apps…we like that, but our [developers] have to find ways to make money. So our devs are putting ads into apps, and for lack of a better way to say it, we think most of this kind of advertising sucks.

When you look at ads on a phone, it’s not like a desktop. On a desktop, search is where it’s at. But on mobile devices, that hasn’t happened. Search is not happening on phones; people are using apps. And this is where the opportunity is to deliver advertising is.

The average user spends over 30 minutes every day using apps on their phone. If we said we wanted to put an ad up every 3 minutes, that’s 10 ads per device per day. That would be 1 billion ad opportunities per day. This is a pretty serious opportunity, and it’s an incredible demographic. But we want to do more than that. We want to change the quality of the ads too.

You know the ads on the web — they’re eye catching and interactive, but they don’t deliver emotion. What we want to do with iAds is deliver interaction and emotion. So that’s what iAd is all about. It’s about emotion plus interactivity. The ads keep you in your app. Today when you click on a banner ad, it yanks you out of your app and throws you onto the advertiser’s web page. So people don’t click on the ads. Because iAd is in the iPhone OS itself, we have figured out how to do interactive and video content without ever taking you out of the app.

For devs to add this to their apps is really simple. They can do it in an afternoon. Apple is going to sell and host the ads, and we’re going to do a 60/40 split [Apple keeping 40 percent of revenue].

Jobs then went on to show a number of in-app ads that served as immersive experiences: launching mini-apps within the app, showing videos, games, and more. They did look impressive (although calling them “emotional” might be pushing it). This sort of rich-media advertising feels like the next wave, at least, now that devices are starting to have the horsepower necessary to stream these kinds of experiences.

And here’s how Apple’s pitching iAd on their site:

iAd is a breakthrough mobile advertising platform from Apple. With it, apps can feature rich media ads that combine the emotion of TV with the interactivity of the web. For developers, it means a new, easy-to-implement source of revenue. For advertisers, it creates a new media outlet that offers consumers highly targeted information.

So what might iAd mean for news companies? It’s waaaaay too early to tell, but here are three quick thoughts:

Smaller newspapers have an extra incentive to build iPhone apps. The nationals (NYT, WSJ, WP, etc.) all already have iPhone apps, and they would be hesitant to hand over a significant part of their advertising franchise to Apple anyway. (Hesitant to hand over 40 percent of revenue, too.) But for smaller news outlets that haven’t been able to see a return on an app-development investment — and without the sales-force resources that might be necessary to educate local advertisers about mobile advertising — iAds promises an easy reason to get on board. With the cost of basic content-app development dropping — you can get a decent app built with under $1,000 and a few days of a staff nerd’s time these days — the CBA equation gets simpler.

A shift away from search and toward content could really help news companies. iAd argues that while search advertising is justly dominant on desktops and laptops, the app experience is the right target for ads on mobile devices, because people spend less time searching and more time in their favorite apps. If that turns out to be true, that’s a huge boon for content companies like news orgs. Search is a field that news companies have no business competing in; local search efforts have flopped, and Google is an unscalable mountain.

But building apps that sustain people’s interest for extended periods of time? That’s at least a game that news orgs can compete in. As we’ve seen, news apps aren’t as engaging as they could be, and news content still isn’t a perfect match for mobile in a lot of ways. But I’d be a lot more optimistic about news companies figuring out ways to make their apps better and more engaging than I’d be about news companies stealing a slice of search advertising revenue from Google.

Could there be room for a Yahoo-style newspaper partnership? The Yahoo deal with newspapers comes down to a simple equation: Yahoo gets a ton of eyeballs, but doesn’t have the ad sales force to reach local companies. So newspapers provide the sales force and Yahoo provides the eyeballs.

I have no doubt that the Nikes, Disneys, and Targets of the world will be happy to deal with Apple directly. But will your local furniture store? Or your neighborhood Korean restaurant? We’ve already seen indications that Apple wants to keep location-based advertising to itself, but who’s going to sell those ads? Maybe a future some predicted years ago — newspaper sales teams serving as a one-stop shop for advertisers seeking placement in a variety of online and print locations, some newspaper-owned, some not — could finally come to be.

There’s lots we still don’t know about iAd — like whether apps that use the platform will still be able to use other ad platforms, say, to deliver developer-sold advertising alongside Apple-sold messages. iAd won’t arrive in apps for several months, and it’s unclear how many companies will want to invest in building the kind of immersive experiences Jobs showed off today. But at first glance, I’d guess that Apple’s entry into the Google-dominated online advertising world might not be a bad thing for news companies seeking a digital lifeline.

March 04 2010

17:16

Washington Post gauging readers’ willingness on paid content, both on new iPhone app and on the website

The Washington Post caused a bit of a stir yesterday when it announced a $1.99-a-year iPhone app. The choice was interesting both because it offered time-limited access to content and because of the low price point — at a time when other newspaper execs are apparently debating prices more than 100 times greater. As our friend Mac Slocum put it: “$1.99 for 12 months of Washington Post content — is that *too* reasonable?”

This morning I spoke with Goli Sheikholeslami, the vice president and general manager of digital operations for The Washington Post/ She said that the Post isn’t thinking about the $1.99 a year as a moneymaker in itself.

“It’s not really so much about this from the point of view of a large revenue stream, but trying to gauge how our readers react to paying for content,” she explained. “It really provides us with a platform for experimentation.”

Why $1.99? The Post considered it a price iPhone users are accustomed to paying, so they’d start there. I asked Sheikholeslami if, beyond the annual subscription fee, there might be other premium content available for in-app purchase. Sports Illustrated’s free swimsuit app has generated a lot of $1.99 purchases inside the app for more bikinis. And Rodale has had success selling additional content within its workout apps; one in three users buys additional content within an app.

“That model does sound like a sound one,” Sheikholeslami said. “Offering a product for free and then a premium product inside of it might be something we’d consider. We might want to test around and see if that model works.”

What about online? Is the Post priming customers to pay for the Post’s online content?

“Right now we don’t have any sort of immediate plans [to charge for web content], but we’re definitely thinking about what new products we can create, including on the web,” Sheikholeslami told me. “If it makes sense to charge for it, we would.”

In addition to the subscription fee, the Post’s new app includes a prominent splash-page ad and display ads throughout the app. Some have argued that advertisers might find an audience that’s paid for digital content more attractive to advertisers than one that is surfing freely. But Sheikholeslami told me the ad strategy isn’t connected to the subscription model.

“I wouldn’t say it’s more or less attractive. From an advertising perspective we do think we can attract a sizeable audience, even with a paid iPhone app,” she said.

January 28 2010

14:06

So it’s called the iPad: Five thoughts on how it will (and won’t) change the game for news organizations

So, it’s official: There is an Apple tablet, and it’s called the iPad. And, at least to these Apple-friendly eyes, it looks really, really nice. I can feel my credit card getting warm already.

But for future-of-journalism junkies, the question was never whether or not Apple could come up with a sexy new device. The question was whether it could have an impact on the news business. Phrases like “save the news business” and “alter the economics and consumer attitudes of the digital era” have been tossed around an awful lot in the last few months.

So what did we learn today about how the iPad will impact journalism? Here are my first thoughts:

It will have a real impact on consumer behavior. This thing’s going to be popular — I suspect it’ll sell at multiples of the Kindle (assuming Amazon ever decides to tell us how many Kindles they sell). And the form factor will be attractive in a lot of contexts, and that’ll likely increase the amount of news and information that people consume. Anyone who loved the Kindle will love this (unless they’re e-Ink junkies), and the iPad will also appeal to big crowds who would have never thought of a Kindle — gamers, mobile workers, YouTube addicts, and more.

I don’t think the iPad changes the paid-content equation. The dream of the news business is that a device will come along that will convince people to pay for digital news. That was the dream of the Kindle — people will pay $10 a month to “subscribe” to all the news we give away for free on the web! And while that dream has dimmed on the Kindle, the same ideas kept popping up on the road to the iPad. As Brad Stone and Stephanie Clifford wrote in the Times:

People who have seen the tablet say Apple will market it not just as a way to read news, books and other material, but also a way for companies to charge for all that content. By marrying its famously slick software and slender designs with the iTunes payment system, Apple could help create a way for media companies to alter the economics and consumer attitudes of the digital era.

Or as a Wired headline writer put it: “Apple Event to Focus on Reinventing Content, Not Tablets.”

But the iPad, as we know it today, doesn’t change any of the fundamental economics of news commerce. On the iPhone, you can sell news apps through the App Store; you can upsell specific pieces of content to people within your apps; and you can sell advertising within those applications. (Apple takes chunks of the revenue from those first two options.)

On the iPad, you can…do those same three things. The only thing that has changed is the size, and that big beautiful screen. Will people who weren’t willing to buy news on an iPhone be sold on the idea just because the text is bigger and the photos are prettier? I’d be surprised. The commerce proposition hasn’t changed.

It was telling that the first website Steve Jobs used to show off the iPad’s web browser was The New York Times. (Apple and the Times have a longstanding mutual appreciation.) Showing nytimes.com before showing off the Times’ iPad app illustrated the big problem device-as-savior advocates face: As long as a device is a great web browsing machine, and websites remain free, it’ll be difficult to push people into the walled garden of an application. Not impossible — difficult. And If you’re willing to put up a paywall on your website, then you have issues to consider much larger than the iPad.

I didn’t see anything today that made me change my opinion that device-based dreams of a news deus ex machina are wishful thinking, and that the difficult revenue decisions will have to be made pan-platform.

The iPhone app ecosystem isn’t changing radically. There are a lot of news organizations that have invested in building nice iPhone apps. That investment will also have value on the iPad, because native iPhone apps should work fine on the iPad — particularly relatively simple ones like news apps. And revising apps to be sized to the iPad’s screen likely won’t be difficult, given how previous changes to the SDK have gone.

One thing that the iPad does do is give user-interface designers many more pixels to deal with, and among newspapers’ core skills remains the ability to display organized text and information in a pleasing and useful way. On the iPhone, the limited real estate meant you were stuck with a rigid world of user-interface possibilities, which is why nearly every newspaper iPhone app looks roughly interchangeable with another. But as the New York Times iPad app showed, with its Times Reader-esque interface, there’ll be a lot more room for experimentation, and that should be fruitful.

One big winner: advertising. Mobile advertising has been deemed the next big thing for a long time now, and while it’s seen plenty of growth, it’s been living a confined existence. Ads in iPhone apps have mostly been locked into small banner ads secured to the bottom of articles and lists of articles. And the web has shown that banner ads stuck in the same place over time are extraordinarily easy for consumers to ignore. Nobody makes much money in that scenario.

But the iPad’s screen opens up a world of new possibilities — from sensible text ads to site takeovers (app takeovers?) to interstitials to more. Will consumers love all of those? No, probably not. (I won’t.) But they sell for a good deal more than banner ads, and that could generate additional revenue for news organizations.

Surprisingly little on magazines. A lot of the talk in tablet land focused on magazines — several mag companies have been working on their own tablet concepts, and the design flexibility of the magazine page seems like a natural match for a bigger-than-a-phone screen and form factor. The magazine subscription model even seems like a natural match for something like the Season Pass you can buy for TV shows in iTunes. But magazines weren’t mentioned at all. Several magazines have moved in the one-iPhone-app-per-issue direction, and those apps will be much more impressive on the big screen, but magazines are in the same boat as newspapers: waiting for the iPad ecommerce revolution to arrive.

It’s important to remember we’re seeing the first iteration of the iPad, which won’t even ship for two months. It took a year for the iPhone to get its App Store; when the phone debuted in 2007, everyone thought it was awfully nice, but it wasn’t sending news organization scurrying to hire Cocoa Touch developers. It took two years for the iPod to get its iTunes Store; the iPod’s impact on the music business only took off when the store arrived in 2003. So there could easily be an announcement in six months or a year that makes the iPad’s impact real.

But until then, the iPad looks like a great product that will please consumers more than it’ll change the game for news organizations.

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.

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