The situation bears a strong resemblance to the newspaper industry, and the reason papers are in the same place as the auto industry. Let's take a look at the places where the news industry and the auto industry screwed the pooch: [...more]
GM’s NUMMI plant in Fremont was the solution to their crisis. So why did they ignore its lessons?
They don't make 'em like this any more. Even so, the rear bumper had to be reattached.
It’s about how the U.S. auto industry could have saved itself by actually paying attention to the way its business was eroding, and listening to the people who came back from Japan and transformed the Fremont plant from a place that was “like a prison … with sex, drugs and alcohol freely indulged in during the working day … where the workers maliciously sabotaged cars, and the managers didn’t care, as long as they got their bonuses for churning out pure numbers…”
The situation bears a strong resemblance to the newspaper industry, and the reason papers are in the same place as the auto industry. Let’s take a look at the places where the news industry and the auto industry screwed the pooch:
1. Starting in the 80s and going through the 90s, sales declined, as customers were turned off by the shoddy quality of the product
In the auto industry: anyone who drove a U.S.-made car in the 80s knows what I’m talking about. Everything about the cars sucked. The seats were uncomfortable to sit in, the controls made no sense and were hard to deal with. I drove a lot of rental cars in that era, and I can’t tell you how many times the A/C control knob came off in my hand. Or the windshield wiper knob was installed upside-down. In one case, the bolt holding the steering column up on a Chevy Cavalier came loose and the steering wheel dropped into my lap. Which is minor, compared to the engines seizing and misfiring, the electrical system shorting out, the windows not rolling up (or down), the doors sagging on their hinges…
In the newspaper industry: the buyouts and mergers started by the relaxation of the cross-ownership rule, caused many papers to skeletonize their staffs, and run big colorful graphics in the papers. And lots more wire copy. I worked at the Arizona Republic during this era, and I saw what they were doing on “Zone Editions.” We had the same cruddy stories for Mesa, as we did Tempe, as we did Scottsdale. They were feature stories about things like a guy with a trained parrot that would whistle and dance. We’d run it one week in the Mesa zone, and then the next week, I’d see it in the queue again for Scottsdale. Mostly, the Zone Editions were there to snarf up the advertisers in those areas, and make sure that no competition sprang up to challenge the big paper. “It doesn’t pay NOT to advertise,” was the slogan, and it was true, because of the package deals the Republic was able to offer, sucking the oxygen out of the local markets. Most papers had a monopoly position in their markets, and could pretty much be assured of making a profit, no matter what they did. Meanwhile, the readers were starting to notice that their newspapers were lacking … how shall we say this … news.
2. The workers felt ignored and belittled, so they began to act out, and a “give a shit” attitude took over
In the auto industry: the line workers had no power to offer suggestions, and indeed, were punished for speaking up. All that mattered was churning out enough cars to meet the quotas, no matter how shitty the quality. Resentfulness led to workers intentionally sabotaging cars, which led to even greater expense down the line, when the shitty cars had to be fixed by workers who really didn’t understand what was wrong with them, and just used the “bigger hammer” method to make cross-threaded bolts hold, or quarterpanels stick onto the chassis.
The New Normal: Denial Since the first utterance of the phrase “green shoots,” there have been attempts to gaze into the crystal ball, to predict what things are going to be like once we get out of the recession/depression-lite. The most recent is a long Newsweek piece on how the psychological effects of being a [...] [...more]
The New Normal: Denial
Since the first utterance of the phrase “green shoots,” there have been attempts to gaze into the crystal ball, to predict what things are going to be like once we get out of the recession/depression-lite.
On behalf of all us Upper Midwestern kids who came of age during the early 80s, when Reaganomics was strangling the industrial sector to death, and open war was being made upon union jobs that paid livable wages, may I say the following:
No duh, Sherlock.
The behavior changes that are listed: increased saving, cynicism about institutions, depression and alienation from communities — hey, didn’t I useta know you guys by the moniker Generation X?
The Economist has a slightly more intellectual and facts-based analysis, as you might expect. Back in October, they devoted an issue to analyzing whether it’s safe to come out of the bomb shelters yet. Basically, they still rely on the predictable free-market capitalist ideas of the government handing huge sums of cash over to supposedly wise business leaders, who will then generously use said piles o’ cash to create jobs and tax revenues.
Cash-strapped companies are skimping on research and development. Emerging economies are having to rethink their reliance on exports for growth. Both rich and poor governments will be tempted to intervene. They should avoid cosseting specific industries with subsidies or protection. Allowing market signals to work will do more to boost productivity than cack-handed industrial policy.
This rather flies in the face of the behaviors (I almost stuck the veddy British “u” into that last word) of the last 20 years or so, where the whole “Greed is Good” and “Masters of the Universe” memes combined to raise a generation of bankers & industrialists who felt that no luxury was too absurd. $30,000 shower curtains? Sure, hang ‘em up! Blowing $400 million of shareholder money to fund your lavish lifestyle? Why not. Running a $50 billion Ponzi scheme that impoverishes just about every decent charity in the Western Hemisphere? Done deal.
So forgive me if I don’t buy into the notion that the same profligate, arrogant pricks that got us into this mess, and who are even now right back at their ugly, reckless behavior — are suddenly going to transform themselves into righteous, community-minded slow&steady engines of economic growth.
Barrons jumped the gun last June, with an article that tried to impose some kind of formula on what a recovery is going to look like. They figured that the biggest threats were higher oil prices, driven by a showdown between Israel and Iran over nukes (still a strong contender), and too much consumer saving driving down demand (mixed on that one). But here’s the nut graf:
What troubles me the most is that people lost faith in things that they really should believe in. This was an unprecedented financial crisis, but it has pretty much calmed down, and now we have a very severe but precedented recession. What disturbs me is the phrase, “It is different this time.”
And there we come to it.
All this analysis, to me, is an outgrowth from our desperate need to believe that what we did in the last 10 years was just a momentary blip, that things are going to go back to some sense of normalcy some time soon. Unfortunately, the things that I saw when I was traveling all over the world in 2006-8, working with some very high level bankers, proved to me that there was, indeed, something different this time around.
This wasn’t just the Thai monetary meltdown of 1997, or the oil price spikes of the 70s.
The real-estate madness was global. Everywhere I went, I heard the same thing: “You think house prices are crazy where you are. Well, HERE they’re REALLY out of whack!” Mexico. Chile. Argentina. Russia. Netherlands. Spain. England.
Everywhere I went, the same thing.
I am coming to believe that the only normalcy that we are going to have (for as long as we are able to keep our petroleum-based house of cards aloft) is that there is going to be constant chaos and upheaval. The big, buried financial instrument of Mass Destruction that Po Bronson so prophetically wrote about a decade ago in “Bombardiers” are going to keep going off, like the deep-buried IEDs that keep killing US soldiers in Afghanistan.
Commercial real-estate. Peak oil. Lack of investment in electrical or transportation infrastructure. Unwillingness to deal with absurd public employee pensions. An unbreakable military-industrial complex that insists on wasting hundreds of billions on weapons systems we don’t need and will never use.
If we are very, very lucky, what this means is that we are finally going to deal with all these problems. Because there simply is no alternative.
I had thought that Madonna and Michael Jackson were about as sophisticated as you could get when it came to figuring out ways to build up a juicy public image, and then squeeze it until rivers of cash started running out. Not so. Lady GaGa has rightly recognized that selling CDs if for chumps; anyone can pirate them, and pretty much does. [...more]
Her “Bad Romance” music video features prominent product placement for stuff she designs & sells – and has garnered 38 million views.
The song itself is kinda beside the point – it’s bubblegum synth-disco-pop, about as bland and processed as the stuff the taxi drivers in Moscow used to subject me to on the way back & forth from my gig there. Which may be why it’s getting so many views – this is the kind of stuff that works internationally, since the thumping beat and lyric structure make it sound pretty much interchangeable with everything else on the radio.
Can't wait until she starts marketing the exploding bustier shown here; Madonna's Wannabees all wore their undies over their shirts. Wonder if GaGaEttes are going to be lighting their smokes off their flaming boobs.
But the real action here is in the video to the song. Blew my mind. Didn’t think that people had budgets like this anymore. Costumes that would make Gaultier sick with envy — white latex with “Where the Wild Things Are” shiny plastic crowns, some kinda homage to LeeLoo’s orange strappy outfit in The Fifth Element and a Eastern European mobster/white sex-slave buyer with a steampunk-ish articulated brass chin. Looked to my eye like about a week in production, probably about $500K in total costs of models, locations, crews, lighting, post-production.
The plot seems to be that Lady GaGa wakes from her sleep the way normal people do – by sticking her hand out of a gleaming white Tylenol-shaped coffin – getting forced to drink high-end vodka and the gyrate for & be sold to a bunch of strange pervy dudes.I half expected to see Liam Neeson kicking someone’s ass in the backdrop and telling her, “Here’s the scary part. You’re going to be taken…”
Nobody does these kinds of elaborate music videos anymore, because there is no way to recoup that kinda cash from the moribund music industry.- at least, not until now.As Dan Neil points out in the LA Times
the “Bad Romance” video, which features placements for no less than 10 products: a black iPod; Philippe Starck Parrot wireless speakers; Nemiroff vodka; Gaga-designed Heartbeats earphones (via Dr. Dre); Carrera sunglasses; Nintendo Wii handsets; Hewlett-Packard Envy computers; a Burberry coat; those crazy, hobbling Alexander McQueen hyper-heels; and enough La Perla lingerie to choke an ox.
This isn’t a music video so much as the QVC Channel you can dance to.
I had thought that Madonna and Michael Jackson were about as sophisticated as you could get when it came to figuring out ways to build up a juicy public image, and then squeeze it until rivers of cash started running out. Not so. Lady GaGa has rightly recognized that selling CDs if for chumps; anyone can pirate them, and pretty much does.
No, you need to sell things that people can’t copy – or at least, if they do, it kinda defeats the purpose. So Lady GaGa’s come up with the list of high-end commercial goods to do “Hero Shots” of in the video and obviously done revenue deals with them.
As a business model, I have to say hats off to the Lady. She’s adapted to the draining of value from the content (i.e. nobody actually buys music anymore – at least, not like they used to), and migrated over to where the money still lies.
When advertising no longer works, when information is a commodity in which we all drown for free, then the only things that are left that have any value are physical objects that we can wear, eat, drive or plug in, as well as what cultural anthropologists call “fetish objects” that bestow special status because they signify that we hae enough disposable income so as to be able to waste a couple grand on some gaudy sunglasses.
I’m not sure if this is the way that all news & entertainment is going to have to go in the future. All of it sponsored, with big shout-outs to the guys footing the bills worked into the info-stream every 10 seconds or so. I do know that if this works, we’re going to see a lot more of these “branded videos” online.
It was a cinematic night, as event organizer Brad Nye looked like he was making an entrance in a James Bond film, and Jason Calacanis did a Q&A (thanks for taking my question first, BTW), and looked a little like Citizen Kane. It’s late and I’ve got a lot more post-processing to do on the [...] [...more]
It was a cinematic night, as event organizer Brad Nye looked like he was making an entrance in a James Bond film, and Jason Calacanis did a Q&A (thanks for taking my question first, BTW), and looked a little like Citizen Kane.
It’s late and I’ve got a lot more post-processing to do on the photos, so here’s just a couple of the images that I shot. The video of the discussions can be found at This Week in Startups.
Before the lights were adjusted, standing on the platform over the audience made the speakers look like they were either making a dramatic entrance - or having their identities concealed in some "60 Minutes" tell-all segment.
The energy of the old VIC was certainly present – a little too much, as techies on the make back at the bar made it a little hard to hear the speakers at the time. This, despite the overt threat by organizers to find the yapping networkers and toss them out.
Anyway, here’s Calacanis discussing what the future of social media sites is going to look like, and what smart companies should do in the next couple of years to try to adapt to the increasing pace of innovation.
As I said in an email to Nye, Jason would probably be secretly pleased at the whole Citizen Kane-esque imagery here. And then, of course, he'd feel conflicted about it and make a self-deprecating joke.
One of the more interesting areas of discussion – particularly since I just got back from Costa Rica – centered around virtual currency as being “the next big thing.” Certainly seems that way in places like Costa Rica, where you’re getting an increasingly large, tech-savvy and connected labor force. A lot of people either work in the internet gambling industry there – or have relatives/friends that do. The speed of internet connections in San Jose – and even out in the jungles on the Pacific side – stunned me. I’ve had much worse connections in the small town U.S.A.
One of the things that has stuck in my head the last week or so has been the stories coming out about how spammers are getting around the Captchas by simply hiring dirt-cheap human labor to fill in the blanks on the pages to stuff spam onto our hard-constructed sites. I’m not sure what the next step in trying to get rid of the spam is going to be – Calacanis lamented how from the very first days of blogs, spam started becoming a problem, and it has kept pace with our attempts to try to get rid of it. Now it’s starting to get into the social networking world (viz today’s Phishing attacks on Twitter), where the level of trust that we have for our social circle is going to make the impact of a malicious click that much heavier.
In which I get very "Meta" and write a blog post that aggregates other blog posts that were written about aggregation. The discussion in all cases gets heated very quickly. Insults are thrown around, fisking takes place in the comment threads, but a few actual new ideas & fact-based analyses sneak in here and there. The fact that some very smart entrepreneurs are actually interested enough to toss in some innovative thinking is rather heartening, actually. [...more]
In which I get very “Meta” and write a blog post that aggregates other blog posts that were written about aggregation.
I am also posting this over on the AIM Group blog, as part of what I think might become a regular feature, “This week in the paid content debate.” The best of the bunch is the back-and-forth between billionaire Mark Cuban, and the bete noire of many print publishers, Michael Wolff, who runs the Newser.com content-aggregation site. Cuban actually suggests something that shows that he’s put more thinking into the issue than the kneejerk “Up with the paywalls!” bunch. I note below the flaw in his plans – my ex-roommate used to describe for me in detail how impossible it was at Time-Warner-AOL to get the jealous VPs of Home Video, say, to play nice with the guys from HBO and pay-per-view. Why make someone else’s P&L sheets look good? That just means they are going to get the Exec VP slot faster than you…
This is an example of a newspaper that has developed multiple, reliable, alternative revenue streams. UOL in Brazil is doing quite well, thank you. They planned ahead, unlike so many complacent U.S. papers.(Click for larger)
Anyway, the discussion in all cases gets heated very quickly. Insults are thrown around, fisking takes place in the comment threads, but a few actual new ideas & fact-based analyses sneak in here and there. The fact that some very smart entrepreneurs are actually interested enough to toss in some innovative thinking is rather heartening, actually.
Mark Cuban gives some free advice to fellow billionaire media mogul Rupert Murdoch: http://blogmaverick.com/2009/08/08/my-advice-to-fox-myspace-on-selling-content-yes-you-can/ Basically, he advances the idea that to get consumers to pay for news, you have to bundle it up with other goods, services and content that exist within giant organizations such as Fox or Time-Warner. A “Newsjunkie” subscription would come with access to special sections of Fox News, a couple of books from HarperCollins, magazine subscriptions and DVDs of 20th Century Fox movies. Commenters point out that such “synergies” remain elusive in these big media conglomerates, as each of the divisions is still in its own silo, with its own P&L, jealously guarding its own turf. Cuban paid special attention to aggregators, suggesting that newspapers ban links from aggregators such as Michael Wolff’s Newser.com.
…leading to Mark Cuban responding with a schoolyard-taunt opus: I’m Rubber, You’re Glue http://blogmaverick.com/2009/08/12/to-michael-wolf-im-rubber-youre-glue/ Not sure what it means when the discussion over paywalls degenerates so quickly, even amongst intelligent and successful publishers. Apparently, Cuban takes umbrage to Wolff calling him a “big fat idiot,” and in turn, taunts Wolff by criticizing his “outdated model” of a site.
The fallacy of the Link economy: http://paidcontent.org/article/419-the-fallacy-of-the-link-economy/ This is another assault on the value of inbound links from Google and other news aggregation sites. Arnon Mishkin says that even sites that publish a headline and short description of a news story appearing on another site are destructive, because readers mostly skim stories, and therefore get the news content they need without having to click through. No word from him on what he thinks newspapers should do on newsstands – perhaps they should be like old-school porn magazines, in plain brown wrappers.
Ken Ellis responds on NP-Harder: http://npharder.wordpress.com/2009/08/14/the-fallacies-of-arnon-mishkin/He picks apart some of the assumptions as to what constitutes value from links, and concludes, “All that being said, I still agree in principle with his final three points. However reclaiming value from aggregators isn’t going to help publishers much. They need subscribers and a pay wall. Not an iron curtain, but a permeable pay wall along the lines of the Wall Street Journal. There’s no save-my-business-model pot of gold out there in the hands of aggregators to help you pay for all that good journalism.”
TechCrunch proclaims “The Media Bundle is Dead,” http://www.techcrunch.com/2009/08/16/the-media-bundle-is-dead-long-live-the-news-aggregators/ Erick Schonfeld addresses paid content by claiming that back when newspapers still enjoyed local monopolies on news, “80 percent of the stories in the paper sucked,” but that the audience was still forced to buy the paper because there was no alternative. Kind of like the argument that the music industry has failed because people are no longer willing to pay $15 for a CD that contains one song they like, and 9 others that are crummy.
Five Key Reasons Newspapers Are Failing: http://www.splicetoday.com/politics-and-media/five-key-reasons-why-newspapers-are-failingOnly the first point really addresses paid content, but the suggestions at the end of the piece on how to transform a newspaper into a web-based news operation that will produce the type of content that readers will actually reach into their wallets and pay for – is very instructive.
A post drawing an interesting parallel between Microsoft’s dilemma on how to compete with Google’s free Open Office product, while still maintaining its huge profits from its own MS Office suite http://www.pbs.org/idealab/2009/08/future-of-local-news-about-more-than-paid-content225.html
From “Scooping the News” a post entitled: Newspaper Access Fees Destined for Failure: http://www.scoopingthenews.com/2009/08/newspaper-access-fees-destined-for.html He compares the paywall solutions to pop-up ads. He lists five points that he claims explain why access fees will not generate that much revenue. Basically, the argument against boils down to the “internet readers are used to getting information for free, and they have lots of alternatives, so they’ll never pony up when newspapers start slamming down the paywalls.”
Another quick hit, this one courtesy of an article in AdAge about how the free-fall in the ad industry has at least stopped, but what’s emerging out of the wreckage is that things will never go back to the way they were. “This current economy has stimulated a new marketing consciousness,” said Laurence Boschetto, president-CEO, [...] [...more]
“This current economy has stimulated a new marketing consciousness,” said Laurence Boschetto, president-CEO, DraftFCB. “Clients are saying they want accountability for every dollar they spend, and they want cause and effect. Clients will continue to rally behind ideas that build business, and we as an industry have to accept that things will never revert back to the pre-recession mind-set that wasn’t totally focused on accountability.”
At every conference I’ve attended this year, especially OMMA and Digital Hollywood, I’ve sat in the room with media planners and ad buyers (AKA the guys in expensive suits who write the multi-million dollar checks to buy 30-second spots on American Idol), and listened to them piss & moan about their jobs.
“The goddam clients are calling me every day and screaming in my ear,” groused a Tums-chomping buyer for a major food company. “All they talk about is ‘The Board,’ and how everyone is shit-scared of winding up on the front page of the New York Times for blowing millions while we’re in a Depression.
“The orders have come down from on high that every nickel they spend has to be tracked, assessed, spreadsheeted and connected to a dollar in sales. Well, it all rolls downhill to me. I have to show results for everything, and when it comes to print and broadcast, that’s getting harder and harder to justify.
“Even if the scale and the reach aren’t there yet, when I’ve got a Google Analytics spreadsheet tracking the ad buy, at least I can walk into the client meeting with more than my dick in my hand.
“I’ve got a $300 million budget for the next year. Zero point zero zero is going to print. Nada. Nothing. I can’t justify it anymore. And broadcast TV is next.”
At the risk of having some tort-toting barrister slithering under my office door, here’s a link to a NY Times story about the latest salvo in the growing war between Traditional Media and online news aggregators/commenters. The Associated Press said Thursday that it would add software to each article that shows what limits apply to [...] [...more]
At the risk of having some tort-toting barrister slithering under my office door, here’s a link to a NY Times story about the latest salvo in the growing war between Traditional Media and online news aggregators/commenters.
The Associated Press said Thursday that it would add software to each article that shows what limits apply to the rights to use it, and that notifies The A.P. about how the article is used.
Tom Curley, The A.P.’s president and chief executive, said the company’s position was that even minimal use of a news article online required a licensing agreement with the news organization that produced it.
I hardly know where to begin here. If you’ve been following the war between Online & Traditional, as it’s reached the screeching desperate frenzy this year, the most-repeated shibboleth is that the news industry committed the “Original Sin” of making its content available online for free, and that everything would go back to the fat profit-margin salad days if only we could roll back the clock and stop the distribution of news & information via that damn intertubes thingy. If we can just track and control who uses what we produce, maybe we can choke off all the “freeloaders and leeches” who are competing for ad dollars without actually doing any work themselves.
So the newspapers, watching the traditional paper iceberg slowly melt around them, put the vise on the AP to Do Something. Anything. The problem is, we’re still short of solutions. I’ve been working in New Media for more than 12 years now, and I’ve done as much original research and case studies on the Economics of News, and I’m not sure. We’re fumbling towards something, though, and the last few months have actually made me cautiously optimistic that we’re going to be able to reinvent how news & information flows in our societies, in ways that actually benefit the average citizen. That is, the citizens are informed of stories about, say, how the subprime mortgage market is not such a good long-term idea, or that the aftermath of conquering Iraq might be messier than the bespectacled Secretary of Defense claims.
Yeah, I know, those stories did appear in the media and on the boob tube. But what’s attracted the biggest, heaviest coverage these last few weeks, as we’ve sought to retool our health care system, turn around a losing war in Afghanistan, and fact-check how trillions of bailout money was spent?
That’s right. Michael Jackson.
The Original Sin of journalism & newspapers was not to make its content available on the web. The Original Sin was when we looked the other way as our media outlets were snarfed up and transmogrified into revenue-producing subsidiaries. The consequences of that have had far greater import and impact than our little measly stunted careers (although on a personal level, I’m obviously less than thrilled & have taken quite a hit myself).
If I’m running a growing network of web-based local news producers, I’m ordering Dom Perignon by the Methuselah today. Why?
1. Every conference I’ve been at for the past two years, the big advertisers say that they’re shifting their budgets to digital/online 2. The AP and newspapers are walling themselves off, and will presumably soon be implementing a RIAA-type model of suing people who infringe on their content 3. The bloggers & aggregators will quickly link to whatever competition provides the same information without all the hassle (or just use the freshman book-report strategy of paraphrasing without linking) 4. Traffic will flow to the competition. Ad dollars will follow. 5. Oh yeah – and the one type of content that is original & can’t be remixed is video… where even if a blogger/aggregator embeds or downloads/transcodes, your logos and your advertiser’s messages will still appear…
I thought that the news and the music business were at about the same point on the evolutionary timescale. It appears that the news business is bound and determined to take a step backward.
This came to me via the Media Giraffe project at UMass (and a very special h/t to Janine Warner, currently filming a video for Microsoft up in Seattle), and I was inspired to write a long comment in response to it. Basically, Circulate is the creation of a team at the Donald Reynolds Journalism Institute [...] [...more]
This came to me via the Media Giraffe project at UMass (and a very special h/t to Janine Warner, currently filming a video for Microsoft up in Seattle), and I was inspired to write a long comment in response to it.
Basically, Circulate is the creation of a team at the Donald Reynolds Journalism Institute that includes Martin Langeveld, who blogs for the Nieman Journalism Lab. Langeveld made the announcement of its existence on the “News After Newspapers” blog, and I was initially somewhat blase about it, due to these early grafs:
Circulate is a holistic, user-centric solution aimed broadly at sustaining journalism in a digital world, with specific relevance to the ongoing exploration of paid-content models for newspaper Web sites. Circulate enables experimentation with subscription and per-item user charges, but as a user-centric content discovery tool, Circulate goes well beyond the announced features of other systems that have been proposed in that space.
Circulate will be rolled out in phases. Initially, it will be a browser add-on that you can have always handy as you move around the Web. Circulate will function on multiple platforms to allow full portability: a mobile application is planned, possibly first as an iPhone application, along with user start page and e-mail notification options.
DIGRESSION ALERT: When the subject comes up, and the cranky content publishers insist that charging for content is the only way to survive, my response is that yes, you can and probably should charge for content. But you can’t charge online for the same old stuff you’ve been selling offline. The audience doesn’t want it, won’t pay for it, and can find the same ol’-same ‘ol in a lot of different places. If you really want to change your news organization to charge people for content, that content has to be something that people perceive enough value in to be willing to type in the credit card numbers/click PayPal.
And – here’s the real core – producing, marketing, updating & charging for that kind of information is going to require just as wrenching a philosophical change as any of the other so-called “pie in the sky” digital triumphalist schemes that invoke the “information wants to be free” mantra. I’ve worked for publications – currently still do, as a matter of fact – that survive by charging for content, rather than via ad support. It’s a different way of thinking – far more intense, in some ways, than what newspapers have become acclimated to accepting as their regular content strategy.
END DIGRESSION.
What made me see this as more than a rehash was these three grafs:
As a Circulate user, you’ll be able to have an account with a home-base publisher, like the local paper, and optionally profile yourself. Then the Circulate system will go to work and discover and present to you information that’s really relevant to your interests. You’ll be able to set alerts if you want, but you don’t have to. Circulate won’t start out carrying advertising, but eventually when it does, you’ll see advertising that matters to you, not blindly-aimed mass-market ads. And it sets up the possibility that you could optionally subscribe, through your home-base publisher, to valuable information at hundreds and eventually thousands of news and other websites, all at a low monthly blanket rate.
Circulate will feature social functionality, so that you can share and discuss content (but its content recommendations are not sourced through “collaborative filtering”). Over time, you will be able to select additional features on Circulate as they are developed.
Importantly, a core, fundamental value at CircLabs is user privacy. While Circulate will work best when the user shares information, that will happen with the user’s explicit permission, not by virtue of obscure language buried in user agreements no one reads.
That’s the key: to successfully sell something, whatever that thing is, if it’s information, it has to be information that isn’t available anywhere else. If your audience is saying, “Aw, I heard/saw/know that already,” then you’re screwed.
The book “The Return of the Player” ends with the anti-hero making billions by making the concept of a “Find Engine” work; maybe I’ll excerpt a couple of grafs from the book to illustrate what the vision was of this as of 2004 or so. At the time, reading it, I thought it might have something of a core of value, but that the online marketplace was not ready for it yet. Maybe it is now.
Anyway – here’s what I wrote in response:
Interesting concept, guys – although I have to admit that reading through the first few graphs, my stomach sank when I read “charging for online content.” Way too many collective clock cycles are being devoted to coming up with arcane ways to try to extract some kind of revenue stream from online readers. Most tend to be veneers over the failed strategy of erecting paywalls over existing content, without really given a thought to how the core product has to be radically different for the consumer to be willing to yank out the wallet.
Reading further, it became evident that what you’re doing is a variation on the “Find Engine” concept – that is, that the app/site/widget/whatever will take over for the Almighty Google, and serve you up the information that you need, when, where & how you need it.
OK, that’s interesting.
You also addressed the core problem with a Find Engine – that is, if the app/whatever knows enough about you to be able to accurately (and if it isn’t accurate, what use would it be?) know what you want, then isn’t that a treasure trove of information about you that could be hacked/exploited/sold? Well, yeah. We all start to feel a bit creepy about the thought that something in the machine knows us & is ratting us out. Despite the fact that it happens all the time …
Well, to a certain extent, it does. Big online ad agencies get quiet & change the subject when people bring up the idea of a “Universal Cookie.” Which would be far easier to implement if Circulate takes off.
Anyway – one suggestion. You talk about mobile, and indicate that one of the first moves might be to develop an iPhone app. While I applaud your willingness to engage with this new platform, you might want to check the numbers. At a recent Online News Association event I helped organize, Nick Montes of Viva Vision laid out the numbers involved with selling content – I’m posting the video and a description in the next day or so.
Briefly: the iPhone has market penetration of 9M handsets in a US market of 250M+ handsets. Nice, but not staggering.
But the real eye-opener was that Verizon makes about $20 billion a year from selling/licensing/streaming content. The much-touted iPhone App Store is likely to make Apple about $300 million.
Basically, you’d be pouring sweat equity into constructing something for a platform that comprises about 1.5% of the money on the table…
Anyway – I look forward to seeing what Circulate looks & feels like. At least you’re trying.
Man, I didn’t think there was anyone left at the Chronicle to fire – and here I read that they just canned 151 more people? Delfin Vigil, a reporter at the Chron, took out an ad in the Examiner to decry the sorry state of the paper after all the cutbacks, layoffs, contractions, consolidations, downsizings [...] [...more]
Delfin Vigil, a reporter at the Chron, took out an ad in the Examiner to decry the sorry state of the paper after all the cutbacks, layoffs, contractions, consolidations, downsizings & general slow self-asphyxiation. Surprise! He just got canned in the latest round of layoffs, and has written an impassioned letter questioning what’s left of journalism these days.
In his letter, Vigil does raise a valid point, about how journalists are encouraged to criticize every other leader besides the guys in charge of the media companies that they work for.
Here’s my stupid question: Why is it that journalists are allowed (and even encouraged) to publicly challenge, question and criticize everyone else’s boss — except for their own?
(snip)
If we as newspaper journalists aren’t allowed to place the same kind of public pressure on our own authorities, who will? Does anyone truly believe that the leaders of The Chronicle and other dying newspapers across the country don’t deserve the same level of scrutiny?
It’s long been a truism in the industry that the story that the press covers the least (and the worst) is themselves. The fruits of that neglect are now becoming clear to all of us.
What would have happened if, back in the 80s, the industry had really done an in-depth investigation of what was plainly obvious to anyone working in & around papers that were being snapped up by chains like Gannett? Every journalist I knew then talked about how being bought by Gannett meant that the paper was stripped of everything that made it distinct, and the best talent was shipped off to toil at the USA Today, while the newly installed publishers were under tremendous pressure to “make their numbers,” and sought to do so by widening circulation by any means necessary. This model was quickly copied by other large & rapacious chains, who took advantage of the relaxation of media ownership rules to start a feeding frenzy on small papers and TV & radio stations.
Which meant that smaller staffs were whipped like dogs to produce copy that could be wrapped around the ads. That fat colorful graphic packages were produced to “engage” the readers and give them the sense that they were actually learning something from the paper, while longer investigative projects – and particularly those troublesome community-defending “crusades” were quietly taken out back and shot.
Yeah, I know, there are always exceptions to these broad generalizations. I am quite certain that a lot of the smaller papers that get consumed by the big chains continued to do the best they could with what they had. But the problems only accelerated in the 90s, and I recall very little mention of it at the time. Perhaps we had become inured to it by that point. It was the inexorable trend, so we might as well figure out how to exist under it.
Only…
What would have happened if, sometime in the 90s, reporters and editors had started making it as much of a priority to report about what was happening to the news business … maybe some fraction of the news hole that was allocated to oh, say, the O.J. Simpson case?
Again – I know – long analysis stories about the consolidation of news outlets hardly grabs the same numbers as the White Bronco freeway chase.
The prestigious stock-rating firm of Morningstar says that two big newspaper chains, McClatchy and Lee Enterprises, may be worth zero. “McClatchy stock could be worth nothing,” says Morningstar, adding that Lee Enterprises “shares could lose their entire value.” Fair value of each is listed at $0.00. Both are deep in debt.
And for the editors and reporters who fear that switching over to a reader-driven basis for content is going to lead to endless pages of bikini shots and [fill in the anatomical blank] slips ... well there are plenty of sites dedicated to that kind of content already.
The users have the power, you see, to go to wherever it is that we want to go to, to find the kind of pictures/video/stories that we want.
If all there were on the web was imitations of Maxim-meets-Ogrish, that would be unbelievably boring after a while. [...more]
Well, there are two schools of thought to this. The first is the one that was espoused there:
What exactly do these people think that newspaper execs will do with
data showing exactly how profitable every single article is? Just sit
on that information? Or will they use it to make business decisions
about which departments, types of articles and individual journalists
are delivering the most ROI? “Sorry, Woodward, we know you won the
Pulitzer last year, but your articles only generated $97.85 in revenue,
so we’re going to have to let you go.” Of course, it wouldn’t just
influence the executives. Journalists themselves would start shading
their stories to what sells, and the most successful would be the ones
who were the best salespeople (or who knew the most tricks). Get ready
for a lot less zoning-board recaps and a lot more “Top 10 Sexual
Positions.”
You can see one example of this over at the Santiago, Chile daily Las Ultimas Noticias, where the publisher started to let the tail wag the dog — that is, the stories that garnered the most clicks on the website would be the ones given the biggest play in the paper edition the next day.
Also, the stories that got lots of attention would lead to follow-ups. The upshot of this was that the coverage did start to resemble a deranged issue of Maxim magazine.
Business news? “Picture of Women Executives Working Out & Getting Sweaty”
Political news? “Vote on Whether Japanese Women Have Cute Butts.”
But before everyone starts jumping on the already-crowded “I Told You So” train, LUN was always a bit of a downmarket paper. They were #8 out of 8 daily newspapers in Santiago, Chile. So their core, and the people they attracted with their marketing blitz, were readers that were not already dedicated to the bigger papers, such as El Mercurio and La Tercera.
And yes, LUN did vault from last to first, and a big part of this was the aggressive strategy.
But since then, LUN has been branching out in its coverage; they no longer have T&A on every page. They have the core audience of what the British call “Lager Louts” or “Yobbos,” but they are branching out to include more technical content that appeals to the same young webheads that come for the biscuit shots.
And for the editors and reporters who fear that switching over to a reader-driven basis for content is going to lead to endless pages of bikini shots and [fill in the anatomical blank] slips … well there are plenty of sites dedicated to that kind of content already.
The users have the power, you see, to go to wherever it is that we want to go to, to find the kind of pictures/video/stories that we want.
If all there were on the web was imitations of Maxim-meets-Ogrish, that would be unbelievably boring after a while.
And as we’ve seen with OhMyNews, even when users are allowed to pick their perfect, tailored mix of stories and information, after a while, we kinda want someone (read: an editor/blogger/”curator”) to surprise us.
We want to see things from outside the bubble. Well, most of us do. Some people will gleefully sustain themselves on a steady diet of mental Twinkies, and never get tired of them. Never mind them. They were never your readers anyway.
I think that the recent political campaign and the economic meltdown have hammered home to a generation of news consumers that it’s kind of a good idea to pull our heads away from whatever dingbat thing Paris & Britney did this week, to see what it is that our elected officials are doing with our money … and how they’re funneling it to the equally dingbat financiers and bankers that bribe them.
So yeah, maybe there will be a bit of a blip when the micropayment model is implemented. But it will shake itself out.
If you believe that all your audience wants is cheezcake … well, aren’t you saying then that your audience is a bunch of pervert dimwits?
In terms of charging for content, both Jarvis and Edwards are wholly in agreement. Jarvis is of the opinion that it is now more valuable to build audience – “I think the odds of success in charging now are slim to none”. Edwards echoes his sentiments, with his belief that “if we charged for content on the internet our traffic would go down significantly… It’s abandoning the trust in the advertising as a financial model.”
Well, that trust has been strained recently, and it is only going to get worse, unfortunately. The continued soft economy is going to put some severe downward pressure on ad revenues, at least for the next nine months. The best news that I’ve seen today came out of the LA Times – a small article about how the bottom-feeders are out snarfing up low-priced houses in the Phoenix area (which was pretty much the most overinflated area in the U.S. when it came to the housing bubble). If this holds up over the next couple of months, that would mean that a lot of the “frustrated money” that’s been sitting on the sidelines is going to start getting back into the game.
Again: I do think that there is a place for charging for content online. But that model necessitates a radical change in how the news business does/would operate, one that makes shutting off the presses and moving only to web distribution look positively timid by comparison. I’ve worked at magazines that were almost all circulation supported. The key to survival is that you have to have something that the consumers can get nowhere else.
Because surfing the Internet is like drinking from a firehose, David LaFontaine braves the torrent to tell you what trends and technologies to gulp down, swirl in your mouth, or spit out.
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