Sips from the Firehose
A blog that seeks to filter the internet into a refreshing, easily-gulped beverage


May 19

Hulu and Delve Networks: We Still <3 Flash

Posted: under advertising, Digital Migration, Online Video, television.
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…HTML5? Not so much…

In a move certain to cause much gleeful cackling and dry-washing of hands at Adobe HQ, Hulu and Delve announced that they are sticking with Flash, rather than making the Jobs-mandated move to HTML5.

The money graf from Delve:

Adobe Flash provides: ability to secure content, adaptive bitrate streaming, comprehensive
analytics and monetization of video through a wide array of advertising
options.
Customers that are using our mobile delivery solution are
willing to experiment with video on these new devices to figure out what
works and to keep their existing customers happy. But they all expect
that eventually the mobile/tablet features match that of the Flash
player on the PC.

Hulu said:

When it comes to technology, our only guiding principle is to best serve
the needs of all of our key customers: our viewers, our content
partners who license programs to us, our advertisers, and each other. We
continue to monitor developments on HTML5, but as of now it doesn’t yet
meet all of our customers’ needs. Our player doesn’t just simply stream
video, it must also secure the content, handle reporting for our
advertisers, render the video using a high performance codec to ensure
premium visual quality, communicate back with the server to determine
how long to buffer and what bitrate to stream, and dozens of other
things that aren’t necessarily visible to the end user.
Not all video
sites have these needs, but for our business these are all important and
often contractual requirements.

Behind these two statements, back in the misty shadows, loom the outlines of the Hollywood studios and TV networks. I’m guessing the last couple of weeks have seen lots of closed-door meetings about what happens when we all start watching TV & movies on our iPad(-like) devices.

The problem with just abandoning responsibility letting the Apple empire do all the driving is that, as we have seen in the last couple of months, Apple’s hidden face is starting to emerge. And it ain’t pretty. Allowing Apple to control the flow of content through its ever-expaning iTunes store just means that you’ve given up the pricing and distribution power on your creative products.

Ask the music industry guys how that worked out for them.

If you can find any, that is.

So let’s take a look at the objection of the big video players to Apple’s vision of the future:

1. Content security. If you don’t think that the movie & TV guys have been sweating blood over the nightmare scenario of their business model going the way of CDs, think again. For the last five years, I’ve been going to tech conferences in and around LA, and at each and every one, the most popular booths are the ones touting various DRM/security features. Now, publishers such as O’Reilly may hold that “DRM is more costly than piracy”, but in the executive suites at the studios, that is a minority view.

You just can’t make a business out of producing $200 million movies like Iron Man 2, and then hope to recoup your costs by giving away the content, and hoping … ads will support it? Or that you will sell enough merch through wider audience? Nuh-uh.

Adobe and the Flash team have spent years banging on various content-security technologies, some of which tout NSA-level encryption schemes to try to mollify the big content creators. I’m guessing there’s not much love for Apple’s “blind faith” scenario with HTML5.

2. Adaptive bitrate streaming. Sounds like something a character played by Dan Aykroyd in his heyday would have spat out in staccato fashion. Basically, it means that when the web is congested (or your bus travels between a couple of skyscrapers as you watch video on your Droidphone), the video will momentarily de-res a bit until the signal is once again clear.  We’ve found that having a momentarily blurry(ier) video is far less disruptive to the viewer than having fits, starts, jumps and the little hourglass on the screen.

Not having this technology means that watching a video is going to become a throwback to the early days of the web … when you’d be downloading a GIF and watching the lines appear … and then hesitate … think about it … then another line appears … then it hangs for a minute … then ten lines appear all at once … then you start clicking in frustration, trying to get to another page that doesn’t so closely resemble a chamber of Hell.

If you really want to Geek Out, check out this excellent deconstruction of the (supposed) HTML5 video standard VP8 on the x264 blog. It explains far better than I can all the nitty-gritty issues behind the hype on “open source” video codecs. Again: not pretty.

3. Analytics. Apple is maintaining that firewall for content served through its store & technologies. You can get raw numbers, such as how many people downloaded the app/video. But nothing more than that. Which feeds into the next point, big time –

4. Advertising. The big selling point for online/mobile video over broadcast is that we’re better able to target the ads to the users, based on the data we collect from cookies, user agents, location, time, etc. If this is missing, so is the competitive advantage, and the dollars start flowing back to tried-and-true TV.

Also, HTML5 is not as robust an ad-serving technology. For Hulu, which is the bigtime play of the TV networks, if the ads can be skipped as easily as with a TiVo, or excised altogether, what then is the point of serving up all that content for free? If the advertisers aren’t getting any value for sponsoring the programs then they quite simply … won’t. And then where does that leave us with our fancy new tablets? Watching more dancing cat on piano keyboard videos?

Apple quite simply does not care about that. Their point is not to help content creators or advertisers. Their focus is on selling as many overpriced gadgets as possible, and then locking the users into having to pay thru the nose thru Apple’s store to actually get any content to watch/listen/read on that gadget.

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Mar 24

Laura Lang at OMMA Global: Humans Are Intrinsically Social

Posted: under advertising.
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The sessions on social media were all packed … I’d say cheek-by-jowl, but these were marketing and advertising types, after all, and jowls were in rather short supply.

It may have had something to do with the recent announcement that Facebook had surpassed Google in popularity … I’m not sure if that means that the ad budgets will be swinging Zuckerberg’s way from the Ever-Victorious Google Army, but it certainly had a lot of people buzzing. And hoping to find some magical formula for extracting value from people just, y’know, rapping. Dude.

Laura Lang to OMMA Global: Why Social Media is Important from Dave LaFontaine on Vimeo.

Laura Lang, CEO of the Digitas advertising agency, opens her keynote speech at OMMA Global with some examples of why social media is important.

The speech is titled: “People are expecting everything, everywhere, downloaded, uploaded, in their hands, in an instant – are marketers keeping pace?”

Best use of classic fiction and modern cross-platform multimedia: “What do Robinson Crusoe, Castaway and Lost all have in common? They all wanted off the island. Why? There weren’t enough people there to interact with. Or not the right kind of people.”

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Apr 15

John Battelle – Packaged Goods and $100 CPMs

Posted: under advertising, new media, Online Video, Video.
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This is part 3 of John’s keynote at OMMA 2009.

…and yes, I know, I don’t have the excerpts and such that made the other videos interesting to watch. But I figure if you’ve gotten this far, you’re probably already pretty interested in what this guy has to say.

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Apr 14

John Battelle’s keynote at OMMA 2009 – part 2

Posted: under advertising, Digital Migration.
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“So much cash sloshing around that we forgot that the interface is going to change completely.  Again.” – John Battelle

Excerpts to come…


mmm

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Apr 13

John Battelle About the Future of Webconomics – OMMA 2009

Posted: under advertising, New Marketing, new media.
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“We’re about to get another breakthrough, another interface leap.  If I knew what it was, I would start a company there.  But I don’t know what it is yet, but I have some ideas, and that’s what we’re going to talk about today.” – John Battelle

Battelle says he stayed up late one night (visions of the mythical college dorm room & heavy inhalation) to come up with this heavy information and interface theories, and worked up this speech to try to describe where he sees the future of the web going.

If what he said above is right, then there is about to be another evolutionary stage, and the current titans of search (i.e. Google, Yahoo, etc.) are going to be replaced by The New Hot Thing.  He seems to be hanging his hat on “conversations” which sounds pretty good to me – the human urge to connect & trade information is one of the strongest forces on the web.  I’m just not entirely convinced that the Facebook/MySpace paradigm is at all viable.  We’re been waiting a while now for anything remotely resembling a business model to emerge, and the latest news is that Google’s shareholders are starting to get a bit bent out of shape about subsidizing the world’s inconsequential home videos, and that Emperor’s Missing Wardrobe-type questions are starting to get asked about the 1/2 billion a year burn rate.

Money quote:

YouTube will manage to rake in about $240 million in ad revenue in 2009, against operating costs of roughly $711 million, leading to a shortfall of just over $470 million. This half-billion dollar loss comes after more than a year of feverish experimentation in various forms of advertising, cross-product embedding, licensing and partnership deals. YouTube is adamant that ultimately they’ll find an advertising solution that will enable the ungainly behemoth to reach profitability. Looking at the math, it doesn’t seem likely.

Battelle’s take on where all this is headed is pretty complex, and not all that out of line with things that you’ve probably heard before.  This is only the first part, so stick with it – it gets more rewarding as we go along.

Here’s some teaser quotes to get you to click over and watch the video – please excuse the camera movement, but Battelle kept pacing around on the stage, and I had to either go so wide that focus was a problem, or track him, making the camera movements a little jerky.

Every publisher is now a marketer … you have to engage the audience in a conversation … if you don’t know how to do that, you’ll die.  That’s it. It’s over.

I call this the conversation economy.  It’s kind of a sequel to the search.

The three-bump theory of how man interacts with technology … as Eric Schmidt is fond of saying ‘25% of GDP is fine with me.”

We all give Apple credit, but basically we know that Windows won.  I call this the “hunt and poke” interface … that’s way better than learning a foreign language like FORTRAN.  That’s also called the “I’m lost in a foreign country interface.”

We started having conversations at scale with our customers.  All of a sudden every customer could talk to every company, and nobody was ready for the conversation. But around the turn of the century, we started to develop that interface, and that interface, I argue is search.  This is the first time we have ever been able to have a conversation in our own natural language with a machine.  People don’t see search that way, but I do.

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Mar 10

New Online Ad Models

Posted: under advertising, Design, Digital Migration, New Marketing, Online Video.
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To quote Michael Corleone: “Everytime I think I’m out – they draaaaag me back in!”

I just got done with a Big Scary Article for the NAA about charging for online content.  I’ve marinated myself in all sorts of arcane data about how to make money from online content, whether or not publishers are being forced to charge for content or are doing it because they are angry and unwilling to make the fundamental changes to adapt to the New Media environment, etc. etc.  Basically, a whole bunch of business theory that makes me sound like a Web 2.0 dweeb, spouting buzzphrases like “Freemium is a viable long-term marketing strategy, but a short-term disaster if you need to make crushing debt-service payments,” and “Big Media brands must leverage their local trust networks to sign up small advertisers.”

I thought it was all behind me, but it turns out that the Online Publishers Association has been hard at work trying to solve the underlying problem with online advertising – that is, that the basic unit of banner ads, really don’t work all that well.  Here’s their proposal:

“As consumers and advertisers increasingly turn to digital media, we must create formats and programs that support and sustain the differentiating aspects of our businesses,” said Martin A. Nisenholtz, founding chairman of the OPA, and senior vice president, digital operations, The New York Times Company. “Agencies must be given the tools to build brands on the Web and publishers must provide the formats for their advertisers to thrive, while balancing the needs of their users.”

The proposed new advertising units are:

  • The Fixed Panel (recommended dimension is 336 wide x 860 tall), which looks naturally embedded into the page layout and scrolls to the top and bottom of the page as a user scrolls.
  • The XXL Box (recommended dimension is 468 wide x 648 tall), which has page-turn functionality with video capability.
  • The Pushdown (recommended dimension is 970 wide x 418 tall), which opens to display the advertisement and then rolls up to the top of the page.

I have mixed feelings towards these things.  As a web publisher myself, I am in favor of anything that delivers real value to advertisers, since if advertisers get value, then they’re much likelier to direct fat stacks in the general direction of indie weasels like me. 

However, as a web surfer, the idea that sites are going to have annoying “Fixed Panels” that follow me as I try to scroll through the page … well, have you ever gone to a MySpace page where the background is busy and annoying, and all the content scrolls across it, increasingly impossible to read?  It’ll be like that.  The Fixed Panel is going to judder and jerk as you use the scroll wheel, and if you’re a person who has multiple tabs open in your browser, well … hope you’ve upgraded your RAM and you have at least four cores going in your CPU to handle all the load.

The XXL Box is a bit more promising. If an ad is actually visually appealing, and it is delivering information about something that I’m interested in, then I would consider it to be part of the content of a page.  If it has page-turn capability, and can also display a short video clip, well, that might be amusing.

But the Pushdown – oh Christ. Where do I start.

This reminds me of the takeovers that most sane publishers did away with a couple of years ago. The one that sticks in my mind is the takeover on Yahoo for Batman Begins, where a crazy swarm of bats exploded out of the ad, covered the Yahoo page to turn it mostly black, and then the text advertising the movie then appeared. 

Hard to ignore, I’ll give you that.  But at the time, I was using Yahoo as my default email address.  The ad slowed things down so much that I switched over to Gmail.  This, despite the fact that I know that Google is scanning all my email messages and indexing everything I write, or that is written to me. 

aaa

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Feb 04

Facebook & Pajamas Media: the “Site Traffic” Monetization Myth

Posted: under advertising, Digital Migration, google, journalism, New Marketing, Newspaper Deathwatch, Newspapers.
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This is going to have to be quick – I haven’t had any spare time to blog, since I’ve been finishing up on editing the Great Big Scary Project, and I have to churn out my intros to said project, along with sprucing up my multimedia examples for my trip to Kiev.

But – two items this week converged (yeah, there’s that word) to illustrate one of the powerful, emerging lessons about New Media.  It’s one that I learned years ago, when I first rode a couple of dot-bombs all the way down into the crater.

Big site traffic numbers do not necessarily mean big money.
Read More

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Oct 29

Time, Inc. Reorganizes and (sigh) Lays Off 600

Posted: under advertising, Digital Migration, New Marketing, new media, Newspaper Deathwatch, Newspapers.
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Not a good week in journalism.  And this cover story was, unfortunately, quite prophetic for a lot of Time, Inc. staffers.

Of interest, amidst the “can you braid this into a noose for me please?”-type news, is the announcement by CEO Ann Moore that Time Inc. is cutting staff as part of a reorganization plan:

…effective tomorrow, we are going to implement a much more centralized management structure, organized into three business units that will group together titles that share similar audiences, advertisers, and the talents and skills of their staffs. The goal is to enable our company to move faster, go to market smarter, save significant costs, and employ our editorial resources more efficiently.

Well, that part sounds pretty good.  But this next bit kinda leaves me scratching my head.  They’re organizing the company into three “Business Units”:

* News: the existing print and digital properties in the TIME group, the Fortune|Money group, and the Sports Illustrated group, as well as Life.com and GEE. John Squires, EVP Time Inc. will manage the News Business Unit.
* Style and Entertainment: the existing print and digital properties in the PEOPLE group, InStyle, Entertainment Weekly, and Essence. I will act as the EVP for this group so the Style and Entertainment Business Unit will report to me.
* Lifestyle: the existing print and digital properties of Real Simple, This Old House, All You, Southern Living, Cooking Light, Sunset, Health, Cottage Living, Coastal Living, and Southern Accents, along with MyRecipes.com and MyHomeIdeas.com. Sylvia Auton, EVP Time Inc. will manage the Lifestyle Business Unit, while also retaining responsibility for IPC Media.

Apparently, this is to take advantage of one of the other key areas of the reorg, which is to set loose the Ad Sales staff on selling ads across a range of related properties.  Which, in theory, would make sense — but I’m not sure that any internal measures are going to change the dynamics hitting national mags.  When the Big Three automakers teeter on the brink of bankruptcy, offering them easier access to your ad pages because you can now sell them space in a dozen mags, rather than just a couple, is not really a game-changer.

Moore goes on to tout recent collaboration across Time Inc. properties, such as when Sports Illustrated shared photos to the TIME.com website, or the magazines sharing content, such as a Time cover piece on the economy that was written by a Fortune staff writer.

Why does this feel like making a virtue out of a necessity?  Of course the SI photogs are shipping their photos to the TIME sites. That’s because TIME can’t afford to send their own photogs to Beijing to cover the events.  And the fact that TIME has to rely on a writer from another magazine to provide the necessary perspective on THE GIGANTIC STORY OF THE MOMENT is evidence of the fact that TIME is getting so thin on staff that they have to reach out to magazines that still have core competency in economic issues to try to make sense of the global meltdown.  Once upon a TIME, such people already on hand, working in the newsroom on deep, insightful stories.

BTW – I’ve been noticing that TIME hardly even runs ads anymore.  Again, I remember the good ol’ days, when the mag was so crammed with ads that it was hard sometimes to read the stories, because they had to jump across so many pages.  I can’t remember the last time I saw a double-truck car, computer or tobacco ad in TIME.

Likewise, missing in all of this is any real description of where the money is going to come from.  Go ahead, click over and read the memo.  I can’t figure it out. There’s brave talk about how the company is still profitable and making money, doing good work, the website is growing, yada yada … but other than streamlining some internal business processes, I can’t quite make out where there’s a description of the new revenue streams or multimedia products that TIME is developing that will grow to offset the circulation and readership declines.

And philosophically, creating more silos in your business is not really a step forward when it comes to the web.  The mere fact of yanking a bunch of content from one arbitrarily created designation and sticking it under a newer, fancier title … really doesn’t mean all that much to the page traffic that’s coming in from Google.

Now then – if Time, Inc. had announced that it was going to be creating new topic verticals (retirement investment planning, children’s health, mobile electronics) as part of a wide-ranging web initiative … where the best writers, photographers, artists, etc., from ALL OF TIME’S PROPERTIES, clustered to create content for specific interest niches that would appeal to readers and advertisers alike … and that they were doing this as part of a long-term transition from a world where the branding on an ink-on-paper cover actually meant something … rather than a world where what matters is the SEO results that drive audience traffic to your content … and that Time, Inc, then went on to create these fascinating cross-property conversations between their writers … you know, something around which you also empower social clustering and affinity groups to comment on, add to, and repurpose your content …

…then that would have really blown me out of my chair.

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Oct 07

Barry Diller on Internet Advertising: “It makes my head hurt.”

Posted: under advertising, Digital Migration, new media.
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I know how you feel, Barry.

This quote from an excellent Wall St. Journal interview with one of the smarter (and more ruthless) guys in the media biz. He’s coming forward to explain why he busted up IAC.

“You really want to get a headache? Try to understand Internet advertising. Social-networking advertising is being discounted because there is so much inventory [of available ad spots], and because methods have not yet been found to make it very effective. Will that get figured out? I absolutely believe it will. What form will it take? Absolutely unknown.”

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Oct 06

Replacing Newspapers: A Cocktail Approach

Posted: under advertising, Blogs, Design, Digital Migration, journalism, new media, Newspaper Deathwatch, Newspapers, Online Video.
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I hate like hell to keep doing quick, off-the-cuff bites at such big topics, but maybe I should just resign myself to accepting the web ethos of not trying to do all things at once.  Yeah, yeah, I know – “Eat the elephant one bite at a time.”So here’s an interesting coinkydink: two items I bookmarked to read later – and actually got around to reading (pause here for an astonished gasp) – struck me as having a stronger relationship than was initially apparent.

First was this bit from the Economist, about how professionals are starting to really flock to online social networks:

On LinkedIn, the market leader, members have been updating their profiles in record numbers in recent weeks, apparently to position themselves in case they lose their jobs. The two most popular sites, LinkedIn and Xing, have been growing at breakneck speed and boast 29m and 6.5m members respectively. And, in contrast to mass-market social networks such as Facebook and MySpace, both firms have worked out how to make money.

The article goes on to raise two interesting points 1) if Facebook can start becoming friendlier to business users it might start actually making money, and 2) professionals are shit-scared about the economy and looking at social networks as great “Career Insurance” places to schmooze people you met once at a conference, snarfed their biz card and never had a use for.old friends.

Next to this was a piece from BusinessWeek, another in the seemingly endless series of kidney punches from the biz community about how newspapers are doomed, done for, goners, forks stuck into them and vultures already descending.

So who would profit from a disappearing newspaper? Local TV and cable, for starters. The city daily is still the biggest single media entity in virtually any market. Its main pitch to advertisers is brutally simple: We have more craniums to dent with your message than anyone else.

(snip)

Which brings me to a disquieting conclusion. The obvious venues for all this displaced journalistic energy are a gazillion new independent online endeavors, be they individual blogs or bigger efforts like MinnPost.com. They will make for fascinating media ecosystems within individual cities, and some will become hits. It is much less certain whether ad dollars will follow. Ultracheap classifieds site craigslist has simply “destroyed revenue,” [emph. mine – dlf] says Dave Morgan, a former newspaper executive who founded behavioral targeting firm Tacoda, and revenue that no longer exists won’t shift to new ventures. Others point out that key newspaper advertisers—local auto dealers and realtors, say—already have many outlets for ads online, not least of which are their own Web sites or national sites such as Cars.com that serve up targeted ads.

For those sensing untapped riches in ads from pizzerias and dry cleaners, well, good luck, says Borrell. “Local is a very unorganized and dirty business,” he says. “People look at local as this one-ton gorilla, but in fact it’s 2,000 one-pound monkeys.” And no publisher can afford to sit down with a city’s 2,000 small fry to sell each a $50 ad. The bitterest pill of all for newspaper denizens is that, while nature abhors a vacuum and all that, in this case there may not even be one left to fill.

Yowch. So newspapers will all just die, and by this point in time, they’ve become so irrelevant and useless that nobody will even really notice that they’re gone?  Sheesh.  Start passing out the pistols & hemlock in America’s newsrooms, eh?

El Tiempo's DIY interface. This is for their very profitable "Portafolio" spin-off site.

El Tiempo

I’m going to have to disagree with this nihilistic conclusion.  Yeah, I know the local online niche ad market is impossibly fragmented, and it would cost a publisher more to pay an ad sales rep than that person would produce in revenue.  Solution: don’t pay the ad rep.  Do what El Tiempo in Bogota calls “auto-pauta,” or DIY ads.  BTW, I really do recommend you click through on that link to El Tiempo.  They are one of the smartest operations out there, they are making piles of cash off internet ads, and they are constantly (ruthlessly, relentlessly) refining their approach.

Moreover. When you look at what the social networking sites are really selling their users, you start to come to the conclusion that what a local newspaper – correction: what the local newspaper of the future – offers can be a lot more compelling.

Think about what the users really want from these social net sites.  Chatting with friends, yeah sure. Blowing your own horn in a socially acceptable way, yessiree. Looking for the next step up on the ladder? Well, yeah … but the problem with a lot of the listings on the social net services is that they are from all over the place. Yeah, you can filter them. But we all know that most of the really good jobs are never spamadvertised like this.  We find them through referrals – which is where recruiters/headhunters come in. And local friends & business acquaintances.

One of the fastest-growing areas on LinkedIn is the “Question” section, where pros reach out to other pros in their groups, and ask something that’s on their mind.  They’re trying to have conversations.

That should be taking place at a newspaper site.  Sooner or later, it will.  Either the papers will replicate it and include it in their future selves, or they will do a Borg takeover.  The paper is a much more logical place for this kind of activity – it includes access to the reference materials from the past, a panel of trained experts to step in and help moderate the discussions, or kick new discussions off with provocative questions, and a huge archive of relevants facts and materials that can be used to make the conversations that much more valuable.

Example: One of the questions I’m participating in on LinkedIn is where to put your money now that the market is tanking so badly. There are some very smart market analysts chiming in here. But it would be nice to be able to have a window/panel open on the screen showing the various stock tables, and perhaps links to content locally that makes the point that some foreign markets are going to be able to ride out this storm, while others just get crushed.

The fact that biz users, those who have education & disposable income, have had to range far afield in search of information that they need to use in their careers, is an indictment of the lack of creative thinking at newspapers.   It will take time and effort to reverse the momentum … because the very users that papers covet most are abandoning papers.

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