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January 13 2012

16:30

April 01 2011

14:38

This Week in Review: Navigating the Times’ pay-plan loopholes, +1 for social search, and innovation ideas

Every Friday, Mark Coddington sums up the week’s top stories about the future of news.

Putting the Times’ pay plan in place: If you read last week’s review, the first half of this week’s should feel like déjà vu — lots of back-and-forth about the wisdom of The New York Times’ new online pay plan, and some more hand-wringing about getting around that plan. If you want to skip that and get to the best stuff, I recommend Staci Kramer, David Cohn, and Megan Garber.

The Times launched its pay system Monday with a letter to its readers (snarkier version courtesy of Danny Sullivan), along with a 99-cent trial offer for the first four weeks and free access for people who subscribe to the Times on Kindle. Times digital chief Martin Nisenholtz gave a launch-day talk to newspaper execs, highlighted by his assertion that the link economy is not a win-win for content producers and aggregators.

Meanwhile, the discussion about the paywall’s worth rolled on. You can find a good cross-section of opinions in this On Point conversation with Ken Doctor, the Journal Register’s John Paton, The Times’ David Carr, and NYTClean creator David Hayes. The plan continues to draw support from some corners, including The Onion (in its typically ironic style, of course) and PC Magazine’s Lance Ulanoff. Former Financial Times reporter Tom Foremski and Advertising Age columnist Simon Dumenco both made similar arguments about the value of the plan, with Foremski urging us to support the Times as a moral duty to quality journalism and Dumenco ripping the blogosphere’s paywall-bashers for not doing original reporting like the Times.

And though the opposition was expressed much more strongly the past two weeks, there was a smattering of dissent about the plan this week, too — some from the Times’ mobile users. One theme among the criticism was the cost of developing the plan: Philip Greenspun wondered how the heck the Times spent $40 million on planning and implementation, and former Guardian digital head Emily Bell wrote about the opportunity cost of that kind of investment. BNET’s Erik Sherman proposed that the Times should have invested the money in innovation instead.

A few other interesting thoughts about the Times’ pay plan before we get to the wall-jumping debate: Media consultant Judy Sims said the plan might actually make the Times more social by providing an incentive for subscribers to share articles on social networks to their non-subscribing friends. Spot.Us’ David Cohn argued that the plan is much closer to a donation model than a paywall and argued for the Times to offer membership incentives. And Reuters’ Felix Salmon talked about how the proposal is changing blogging at the Times.

PaidContent’s Staci Kramer said the Times is fighting an uphill battle in the realm of public perception, but that struggle is the Times’ own fault, created by its way-too-complicated pay system.

The ethics of paywall jumping: With the Times’ “pay fence” going into effect, all the talk about ways to get around that fence turned into a practical reality. Business Insider compiled seven of the methods that have been suggested: A browser extension, Twitter feeds, using different computers, NYTClean and a User Script’s coding magic, Google (for five articles a day), and browser-switching or cookie-deleting. Mashable came up with an even simpler one: delete “?gwh=numbers” from the Times page’s URL.

Despite such easy workarounds, the Times is still cracking down in other areas: As Search Engine Land’s Danny Sullivan noted, it blocks links from all Google sites after the five-articles-per-day limit is reached. The Times also quickly (and successfully) requested a shutdown of one of the more brazen free-riding schemes yet concocted — NYT for a Nickel, which charged to access Times articles without paywall restrictions. (It also established a pattern for unauthorized Twitter aggregators and bookmarklets: You’re fine, as long as you don’t use the Times’ name.)

So we all obviously can crawl through the Times’ loopholes, but should we? A few folks made efforts to hack through the ethical thicket of the Times’ intentional and unintentional loopholes: Times media critic James Poniewozik didn’t come down anywhere solid, but said the Times’ leaky strategy “makes the paywall something like a glorified tip jar, on a massive scale—something you choose to contribute to without compulsion because it is the right thing” — except unlike those enterprises, it’s for-profit. In a more philosophical take, the Lab’s Megan Garber said the ethical conundrum shows the difficulty of trying to graft the physical world’s ethical assumptions onto the digital world.

A possible +1 for publishers: Google made a big step in the direction of socially driven search this week with the introduction of +1, a new feature that allows users to vote up certain search results in actions that are visible to their social network. Here are two good explainers of the feature from TechCrunch and Search Engine Land, both of whom note that +1′s gold mine is in allowing Google to personalize ads more closely, and that it’s starting on search results and eventually moving to sites across the web.

The feature was immediately compared to Facebook’s “Like” and Twitter’s retweets, though it functions a bit differently from either. As GigaOM’s Mathew Ingram noted, because it’s Google, it’s intrinsically tied to search, which is both an advantage and a disadvantage. As Ingram said, it’s smart to add more of a social component to search, but Google’s search-centricity makes the “social network” aspect of +1 awkward, just as Buzz and Wave were. To paraphrase the argument of Frederic Lardinois of NewsGrange: if your +1′s go into your Google Profile and no one sees them, do they really make a sound?

All this seems to be good news for media sites. Lost Remote’s Cory Bergman said that if they essentially become “improve the SEO of this site” buttons, media companies will be pretty motivated to add them to their sites. Likewise, Poynter’s Damon Kiesow reasoned that +1 could be a great way for media sites to more deeply involve visitors who arrive via Google, who have typically been less engaged than visitors from Facebook and Twitter.

Shrinking innovation to spur it: This month’s Carnival of Journalism focuses on how to drive innovation, specifically through the Knight News Challenge and Reynolds Journalism Institute. Most of the posts rolled in yesterday, and they contain a litany of quick, smart ideas of new directions for news innovation and how to encourage it.

A quick sampling: City University London and Birmingham City University j-prof Paul Bradshaw proposed a much broader, smaller-scale News Challenge fund, with a second fund aimed at making those initiatives scale. J-Lab Jan Schaffer said we need to quit looking at innovation so much solely in terms of tools and more in terms of processes and relationships. British journalist Mary Hamilton and Drury j-prof Jonathan Groves both focused on innovation in training, with Groves proposing “innovation change agents” funded by groups like Knight and the RJI to train and transform newsrooms.

Also, University of British Columbia j-prof Alfred Hermida opined on the role of theory in innovation, Lisa Williams of Placeblogger advocated a small-scale approach to innovation, and the University of Colorado’s Steve Outing had some suggestions for the RJI fellowship program.

The mechanics of Twitter’s information flow: Four researchers from Yahoo and Cornell released a study this week analyzing, as they called it, “who says what to whom on Twitter.” One of their major findings was that half the information consumed on Twitter comes from a group of 20,000 “elite” users — media companies, celebrities, organizations, and bloggers. As Mathew Ingram of GigaOM observed, that indicates that the power law that governs the blogosphere is also in effect on Twitter, and big brands are still important even on a user-directed platform.

The Lab’s Megan Garber noted a few other interesting implications of the study, delving into Twitter’s two-step flow from media to a layer of influential sources to the masses, as well as the social media longevity of multimedia and list-oriented articles. A couple of other research-oriented items about Twitter: a Lab post on Dan Zarrella’s data regarding timing and Twitter posts, and Maryland prof Zeynep Tufekci more theoretical exploration of NPR’s Andy Carvin and the process of news production on Twitter.

Reading roundup: Plenty of other bits and pieces around the future-of-news world this week:

— New York Times editor Bill Keller wrote a second column, and like his anti-aggregation piece a couple of weeks ago, this piece — about the value of the Times’ impartiality and fact-based reporting — didn’t go over well. Reuters’ Felix Salmon called him intellectually dishonest, Scott Rosenberg called him defensive, and the Huffington Post’s Peter Goodman (a former Times reporter) said Keller misrepresented him.

— A few notes on The Daily: Forbes’ Jeff Bercovici said it was downloaded 500,000 times during its trial period and has 70,000 regular users, and a study was conducted finding that it’s more popular with less tech-savvy, less content-concerned users.

— Journal Register Co. CEO John Paton talked about transforming newspapers at the Newspaper Association of America convention; he summarized what he had to say in 10 tweets, and Alan Mutter wrote a post about the panel. The moderator, Ken Doctor, followed up with a Lab post looking at how long, exactly, newspapers have left.

— I’ll send you off with Jonathan Stray’s thoughtful post on rethinking journalism as a system for informing people, rather than just a series of stories. It’s a lot to chew on, but a key piece to add to the future-of-news puzzle.

Image of a fence-jumper by like oh so zen used under a Creative Commons license.

January 20 2011

18:30

The Newsonomics of Mr. Murdoch’s Daily

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

Let’s pause for a moment and reflect.

It’s a daily newspaper being taken to the web. And: It’s the sensation of the moment. After 15 years of decrying the re-purposing of print newspapers for “online,” we’re making quite a fuss about a product — Rupert Murdoch’s digital outlet, The Daily — that is proudly leveraging the newspaper metaphor, creating a mostly (we think) daily edition, with some updating.

At first blush, it seems like a 2001 idea, dressed in new 2011 clothes. But maybe it’s the clothes that make all the difference, and that make Mr. Murdoch The Man. The new outfit, after all, is the iPad, the hot device of our time — the one that seems to be playing havoc with what we thought we knew about digital news reading (“The Newsonomics of tablets replacing newspapers“).

It is impossible, of course, to make much sense of The Daily until we can actually read it. With iPad products, we’re often into that crazy first blush associated with any new digital device, confusing the device itself with the product.

We think The Daily will now launch in the next couple of weeks, as Apple finalizes its work around subscription offerings. Maybe Rupert won’t get his two-shot with Steve Jobs, given Jobs’ new leave of absence, but we know The Daily will greatly benefit from the great shelf placement Apple is bound to give it as it opens its subscription store. (And News Corp., of course, has plenty of its own owned properties to help in marketing, as well.)

So what might The Daily be?

It could be the USA Today of 2011, 30 years after that newspaper started its own category of national papers identified by nuggetized journalism and color-coded, easy-to-grasp presentation. As the first digital news native in the tablet space, The Daily certainly offers that possibility. Or it could be just New York Times lite, with its timing, by coincidence or purpose, blunting the Times’ own efforts to charge for digital content more generally and for the iPad specifically. Or it could be a next generation of “The National,” a white-hot star of a national sports daily, crammed with talent, that burned out within a year and a half in 1991. And it could read like either a newspaper or a magapaper, given its hiring of some magazine hands.

If you are the Huffington Post or the Daily Beast or Slate, you’ve got to be asking the question of why The Daily could charge and why it couldn’t. Is the value in its web (desktop/laptop access) lineage — or is portability just how we, readers and publishers, think about information now? As seems increasingly true, the tablet in general is upending lots of ways we think about digital news.

So let’s take a quick look at the Newsonomics of The Daily, tempered by our partial knowledge of it.

Budget

We’ve heard the $30 million number, which covers two-plus years of operation. (That’s close to the $31.5 million that Murdoch sunk into Alesia, as Jeff Bercovici has noted.)

The $30 million would be a big investment for many newspaper companies these days, but not for News Corp. Consider, just as an example, the $33 billion (in revenues) the company takes in through its 20th Century Fox division. Marmaduke, “a dog of a movie,” came in fourteenth on the company’s 2010 grossing list, at $33 million, behind Unstoppable, Knight and Day, and Vampires Suck. And Avatar (“The Avatar Advantage: Big and Bigger Media“), the top grosser, took in $408 million.

So the $30 million for The Daily is pocket change, at worst another big R&D project.

Costs

We’re hearing that about 150 staffers are assigned to the project, about 100 — or two-thirds of them — journalists. Let’s take $90,000 as an average FTE cost, a valid estimate given the New York (with L.A. as a bureau) siting of the product. That’s $13.5 million in annual staff costs. We don’t yet know how much News Corp. is leveraging its well-developed and ample advertising sales staff, its technologists, or its marketing people — or how the costs of “borrowed” News Corp. or Dow Jones resources are being allocated internally (echoes once again of USA Today). News Corp. could be devoting significant marketing dollars here, as well, to better leverage its Apple relationship and its first-in-format launch.

Figure a first-year run rate between $15 and $20 million, and maybe a tad less for a second year, and you’ve got $30 million.

Subscription revenue

On revenues, as well, the hypotheticals are intriguing. The Daily is a U.S.-centered, iPad-based product; its only web presence will be promotional. We think that Apple sold over 10 million iPads last year, mostly in the U.S., and — though numbers vary widely — forecasters estimate another 50 million in iPad sales between 2011 and 2012, and 70 million tablets overall (again in the U.S.). So let’s say, roundly, that by the end of 2012, there are around 80 million tablets extant in the U.S. Getting just 1 percent of their users to subscribe to The Daily (and, yes, some households will have multiple tablets, but let’s let that go for the moment) would mean 800,000 subscribers. And a quarter of those would be 200,000 subscribers.

Let’s say The Daily could get to 200,000 at $52 a year. (It’s priced at 99 cents a week, out of the chute.) That’s $10.4 million in subscription revenue. Apple, which presumably will be doing all the e-commerce for this tablet-only product, would take 30 percent of that, leaving $7 million in net annual returns.

There are a couple of early caveats here. First, The Daily, an old-fashioned news idea, will likely have to use old-fashioned selling approaches: lots of free sampling and discounts. (That’s one of the many issues Apple must work out as it decides what it means to be a subscription-offering company.) So the 200,000-multiplied-by-$52 math won’t be a straight line. (And, of course, if it’s successful, News Corp. can raise rates.)

Second, let’s fast-forward six months from The Daily’s launch. It is now challenged by a number of paid digital news products: those of the Times, the Journal, magazines, and regional newspapers. Those products, all with non-tablet roots, have lots of ways to promote both themselves and their digital/iPad subscriptions. The Daily, with no web presence — and so, presumably, little search engine optimization — may be at a significant disadvantage from that perspective. On the other hand, it can use News Corp. promotional assets (but those do have real costs) or continue to invest in marketing to keep awareness high. Of course, if The Daily is a great product and its social axis (Facebook, Twitter, Linked In) works, social search could offer a great deal of help there and cheaply.

Ad revenue

Early tablet revenue was off the charts, an effective cost-per-thousand rate of 10X website sales. Much of that early shine is wearing off, say some tablet news publishers, with some placements tossed into a print/online bundle in 2011. Does that mean that tablet rates will swoon to low website ones? Not necessarily, but we don’t yet have enough data to know. Sponsorship (given high brand value and lower traffic) will inevitably be joined by a full array of video pre- and mid-rolls, behavioral targeting and re-targeting, and still-ascendant pay-for-performance — all the modern tricks of the trade.

So if the cost run-rate is about $15 to $18 million a year, and subscription revenues net at $7 million, News Corp. would need $8 to $11 million a year in ad revenues to break even. Certainly possible, if that 200,000 number is hit and sustained, but that could be a tough proposition as tablet newbies sample widely and are confronted by a world of paid choices.

Bottom line: Yes, The Daily can work. But for Murdoch, whose moxie even the biggest detractor from Fox News can admire, The Daily represents another test, another foray. His success has been mixed. Alesia, his news portal, didn’t work, so he abandoned it. MySpace is being sold off, at a low point in its trajectory, while the Dow Jones/Wall Street Journal buy may indeed find significant new business success in the tablet age. And now there’s The Daily. It’s a grand lab for Murdoch. And the rest of us.

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.

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