Web-native companies strive to eliminate “transactional friction.” Newspapers? Not so much. I’ve been a subscriber to the LA Times for as long as I’ve lived in Los Angeles, and I’ve watched as the big beast evolved from a gray morass of 100-inch stories to the biggest (and most profitable) paper in the U.S. in the late 90s. […] [...more]
Web-native companies strive to eliminate “transactional friction.” Newspapers? Not so much.
I’ve been a subscriber to the LA Times for as long as I’ve lived in Los Angeles, and I’ve watched as the big beast evolved from a gray morass of 100-inch stories to the biggest (and most profitable) paper in the U.S. in the late 90s. Which has made the last decade and a half so very hard to watch. Still, I’ve stuck by Gray Lady West through some very tough times, and I have many friends who either work there now, or have in the recent past.
“Frictionless commerce” is what makes iTunes, Amazon, Google AdSense, Craigslist and so many other web titans so successful. It means that you make it as easy as possible for customers to actually buy something from you. (Image credit: Wikimedia Creative Commons)
First: a lesson in what “failure of the last mile” means: consider what goes into making a successful restaurant. You have to have a prime location. Decorate the exterior. Decorate the interior. Hire a great chef. Hire great kitchen assistant chefs. Come up with an innovative menu, with food that appeals to your core demographic. Procure the freshest ingredients. Ensure that the food prep space is clean and gets an “A” from the city inspectors. Advertise. Market. Give out coupons. Sweet-talk reviewers into coming and writing reviews. Have valet parking. And so much, much more that all leads up to the “last mile” – what the experience is like at the “touch point” where the customer actually engages with the product.
In a nutshell: all this effort in preparation to make a great restaurant counts for nothing if the waiter is snotty to the diners.
I’ve seen this in action again and again with the startups I’ve been involved with. Early on, we faced epic levels of “cart abandonment” when trying to coerce people into making a purchase, because (at the time) people were really, really reticent to type their credit card numbers, expiration dates and security codes into a browser window. Since then, we’ve obviously learned that data theft can pretty much happen anywhere. However, this hurdle was gradually overcome via the efforts of eBay, Amazon, iTunes and PayPal. All of which add layers of security, and money-back guarantees if your card gets hijacked and used to buy pallets of AK-47s in Cote d’Ivoire.
So here’s what trying to buy a subscription from the LA Times looks like. You dial a number. There’s a choppy, slow voicemail hell, with choices that really don’t seem to apply to what you want to do. There is no dedicated 800 number for renewing subscriptions – you just get dumped into the bin with people who want to report their paper getting stolen, or who want to turn it off while they go visit the grandkids. So that’s turnoff #1. Even as a dedicated subscriber, I wanted to hang up and just try the website to see if I could get a better experience. Still, I hung in there to see whether things would improve.
It took 3 steps and 2 minutes to get to a place where I could finally start to accomplish what I came for. Unfortunately, rather than talking with a human – I had to manually enter a credit card number over touch-tone. That’s Strike Two, folks. If you’re going to be giving up that kind of info, consumers kinda want to get rewarded with a human voice, particularly if they have any queries about what they’re buying and how much it costs. Which I did.
So I grimly stuck to it, even after entering my financial information, hoping to get someone on the phone to explain the rather complex choices on payment amounts and term of subscription that came on the paper bill I was mailed. Pressing the “0” button just kicked me back into the main menu. Somewhere along the line, as the frustration increased, I heard that I had to “Press 9 to Speak to a Representative.” Only, that kicked me back to the main menu as well.
Sure enough, there was a silent blip as the call was transferred to a call center. Not in India – the costs for call centers have gone up there. No, this one was to the new lowest-cost call center hub – in the Phillippines. The operator was friendly enough, but the problem started when I asked about the payment terms. Under the subscription plan they now offer, the LA Times gives me unlimited web access (which is mostly how I engage with their news product these days no surprise), and charges me about $12 every two months. But looking at the rate card I was mailed, it seemed as though they were trying to incentivize me to subscribe for 6 months or an entire year by offering price breaks for these longer-term commitments.
So sure. Maybe if you let me shave a few bucks off the bill, I’ll pay you the whole amount upfront and let you make some money off the “float” of having my entire wad of subscription money that you can earn interest on. It’s one of the ways that smart companies entice consumers into locking themselves into making a yearlong commitment.
Unfortunately, the call center operator had no earthly idea of the pricing structure for the product she was trying to sell.
After having to verify (for the 3rd time on this now 15-minute call) my phone number, address, name, credit card number, etc., just asking how much I was going to pay flummoxed this person. I was quoted three different prices for the subscription I now have. I corrected the operator a couple of times, and finally after teaching her about the product she was trying to sell, got to the bottom line.
I can pay $12 every two months for the next year. Or I can pay $83 up front to “lock in” the subscription price.
Let’s do the math here.
If I pay every two months, that’s six payments a year, right? Simple math: 6 payments x $12 = $72 a year.
And you want me to pay $83 upfront in one lump sum? How does that make financial sense? I’d be paying MORE for a yearlong subscription rather than saving a few bucks.
The operator stammered and then went back to the script of “locking in the subscription price.” Well, is the price going to go up then? No. I don’t know. Maybe.
By how much? I don’t know. When? I don’t know. But it might. Is there anyone else I can talk to about this? Not right now.
OK, at this point, I hung up. Deconstructing this entire experience, from a webconomics point of view, this is an absolute disaster. The LA Times has made it difficult and frustrating for existing subscribers to attempt to continue to be subscribers. They’ve cut costs in their circ department by outsourcing all the call center jobs to places where ill-trained people stumble over what should be easy points. And finally, their pricing structure makes no sense once you drill down and work the numbers for yourself. And the numbers are completely different on the web, in the mailers, according to the people on the phone. The price just keeps changing!
This makes it impossible for the end-user (i.e. subscriber) to trust the prices that we’re being given. Yeah, it’s only a few bucks, but come on, now. You guys know – or SHOULD KNOW – how consumers react when they start to suspect that someone else is getting a better deal.
I’ve written at length over the years about the migration from an ad-supported revenue model to a subscription-based model (AKA “paywalls”). The jury’s still out on how well this is going to work out for the newspaper industry; yes, the New York Times, Financial Times and Wall Street Journal are often cited as success stories (although detractors point to weaknesses in their underlying dynamics). News organizations across the board are looking to ways that they can support themselves by charging subscriptions to access their material.
This only works when that transaction is quick, easy and painless.
UPDATE: The first video below was erroneously a duplicate of video #3. I blame the shoddy connection I had – I am thrilled that the videos made it up to YouTube at all, frankly, and it took me an hour and several tried to get this post to publish, so I had some version-control issues. […] [...more]
UPDATE: The first video below was erroneously a duplicate of video #3. I blame the shoddy connection I had – I am thrilled that the videos made it up to YouTube at all, frankly, and it took me an hour and several tried to get this post to publish, so I had some version-control issues. Anyway, I’ve fixed it so that vid #1 is now the proper first part, in which we talk about the persistent power of radio.
The more I learn about how the media operates in East Africa, the more I think this is going to be a fascinating area to watch over the next few years. The conditions here are ripe for some really interesting changes – we are going to see in this microcosm what the effects are of empowering a population that is still stuck with only one-way information flow (largely via radio – please see video #1, below) to suddenly leapfrog into the ubiquitous mobile web-fueled connectivity that we see in places like Japan, Korea and (to an extent) China.
BACKGROUND: A couple of weeks ago, I had a meeting with the CEO of Fana Broadcasting. At that time, I was told that the plan was to install 4G mobile connectivity throughout the country. I have since learned that the contract looks like it is going to be awarded to a giant Chinese telecom company. This is not necessarily good news. The suspicion among the journalists is that the infrastructure contract has been given to the Chinese because they have pledged to include many of the down-and-dirty spyware and censorship features that are common to the internet behind the Great Firewall of China. Also: it is rumored that the Chinese outbid US and European companies for this huge contract, because the government of China is (illegally?) subsidizing the work, secretly funneling money under the table to the ostensibly private-sector telecom company, to allow it to do billions of dollars of work for 1/20th the price. Conspiracy theories abound here; in the absence of any hard facts or verification, people always assume the worst.
At any rate: the plan is to wire up all the major cities and towns with 4G wireless internet service. One of the big reasons expressed for that is that the Powers that Be have noticed that on just about every roof, you can see a satellite dish. Those dishes are bringing news, information and TV programs into households from TV providers outside of Ethiopia. They want to jump-start their own domestic news and entertainment industry, to start to produce high-quality content, to lure audience away from these international sources. Part of this is to foster a sense of national unity: to expose Ethiopians to news, movies and TV series that star Ethiopians, speaking Amharic, and referring to matters that are of concern to Ethiopians (and eventually, to citizens of the surrounding countries, none of which really has their own video/web content production infrastructure). Part of it is to start building up the kind of media-production capabilities that might allow Ethiopia to start exporting its culture to the international marketplace; from what I have seen here, there is certainly an opportunity for the kind of smart, dedicated artists here to start changing the international perception of this place, which is still stuck in the famine years.
Anyway, in the first part of the interviews I did with Samson Tesfaye, for his show “Movers and Shakers” on AfroFM, we talk about what things are like in the present day – where the vast majority of the rural populations in Ethiopia still rely on what they hear over the radio as their main (perhaps only) source of news and information.
The next part of the interview, we focus on the impact of social media in East Africa. At this time, Sami says that social media is not having the kind of disruptive effects we see in North Africa, where the Arab Spring is still very much alive and kicking, or to the south in Kenya, where the technology scene is vibrant and lively.
Been a while between posts here – I’ve had writing deadlines, presentation deadlines and a dauntingly ambitious editing task to try to manage. Anyway, despite this being the Christmas season, oft-assailed gadfly & jilted lover of newspapers Jeff Jarvis wrote yet another opinion piece about how the entire newspaper industry is screwed as though it […] [...more]
Been a while between posts here – I’ve had writing deadlines, presentation deadlines and a dauntingly ambitious editing task to try to manage.
* McClatchy shares hit 60 cents yesterday. As I write this, it’s up to a big 78 cents. Bubble! Gatehouse hit 4 cents (and I’d still short them given their current attitude); market cap: $2.3 million. See Alan Mutter’s excellent analysis of how debt did in papers. I’d say it’s more than that: It was misplaced optimism in the form and in the incumbents. If these papers had instead taken on debt to innovate and create or to buy innovates (a la the New York Times buying About), that might have been productive. Instead, they bought newspapers, which was only an indication of how snug their blinders were.
My retirement may be a little diminished by the lost value of those options, but I’m confident it will be enriched by watching McClatchy emerge successfully as the model of a new public service journalism company.
Thanks for participating — here and elsewhere.
Right on cue.
Now, I’m not entirely comfortable siding with Jarvis. He’s been criticized pretty heavily for his downbeat analysis, and for what a lot of people see as poorly disguised schadenfreude over newspaper crisis. Some of that criticism has elicited an angry response from Jarvis, and then later muttered apologies … which feels familiar to me, since I’ve been guilty of the “Burn, baby burn” attitude myself. It comes out of real feelings of frustration over opportunities that just keep sliding by.
BTW – really do take the time to click through to that last link – it encapsulates perfectly the Old Media thinking at the time that Web 1.0 cratered:
In the 1950s, it was TV that was going to kill the newspaper industry. Now, it’s the Internet. “We’ve heard it all before,” says Morton. “A newspaper is cheap, easy to use, portable, and a great way to get information out to the masses without straining eyes or a budget.” Right now, investors are thinking the worst. Perhaps they should think again.
Back when our startups were dying, I remember getting laughing calls from print colleagues, reading me the latest “Drillbit Stock” quotes. Was that piling on? Rubbing it in? Probably, although we were all so abashed at the way the bottom had fallen out, we weren’t in a position to protest.
What we did do was suck it up and learn from the disaster.
Now that we’re finally approaching the end of a presidential campaign season that started way back in May 2007 … and as an aside, allow me to observe that it used to be that declaring for the presidency the December before the Iowa caucuses/New Hampshire primaries was early … Let’s take a look back at […] [...more]
Now that we’re finally approaching the end of a presidential campaign season that started way back in May 2007 … and as an aside, allow me to observe that it used to be that declaring for the presidency the December before the Iowa caucuses/New Hampshire primaries was early …
Let’s take a look back at one of the emerging forces that has come out of nowhere these last fours years to impact the way that politics is conducted: viral videos.
The first indication that this was going to have a transformative effect on the electoral process was back in ’06, when Virginia Senator George Allen’s “Macaca Moment” kneecapped the GOP’s best hope for hanging onto the White House. This was not the first YouTube video about politics, but it was the first really big one. The scandal that erupted over this cost Allen his Senate seat, his shot at the White House, and was the signal that Virginia was now in play for the Democrats – one of the really big, under-reported shifts in electoral demographics of the last couple years.
Now they, you’ll notice that this video has only racked up 370,000 views or so. Good, but hardly awe-inspiring … not even in the category of kittens dancing around on piano keys.
So how is it that these videos have such an effect? Well, the mainstream media is still, for now at least, the ones setting the parameters and nature of the conversation. But the process by which the MSM frames the national discussion has undergone a sea change. And part of it is the GOP’s fault.
It started with Drudge and the Monica Lewinsky scandal (although many are finally acknowledging that the “Drudge Effect” is losing steam), continued on with the Swift Boat veterans, and this year, finds its truest expression in the vids of Fey-as-Palin.
See, reporters and editors are pretty much web addicts. We poke around on the internet all day long, trying to figure out what the Vox Populi is saying, so we can latch onto it and churn out a “trend” story. And then go drink.
Viral videos that make us laugh, make us stop, make us click to get the link and then e-mail it to our friends & colleagues … those get the “trend” prize, whether they are or not at the time. And, of course, once a critical mass of journalists bestows the “this is a growing trend” status on a meme (Soccer Mom, NASCAR Dad, Security Mom, Joe the Plumber, etc.), then said meme is going to get a serious working-over by the material-starved talking heads on the cable news programs.
We are moving closer and closer to a merging of the “underground” flow of significant memes and information on the internet, and what the MSM reports and pays attention to. This gallery of viral hits will take you through the history of the Presidential Campaign ’08, in a way that will have you remembering the conversations we were having only a few months ago, and how those memes have morphed into the Accepted Collective Wisdom.
Mission accomplished. Time for cocktails.
1. Yes We Can – Barack Obama Music Video
It started with this, back when the Iowa caucuses came back, and people started actually buying into the idea that maybe … maybe … there’s something to this guy Obama. Maybe we don’t have to pin our hopes on Hilary and another depressing go-round with Bill Clinton in the White House with a lot of free time on his hands. This has gotten 11 million views since it was put up, features will.i.am and hella good editing & soundtrack.
2. Dear Mr. Obama.
A hit for the McCain campaign, this Iraq war vet holds forth on his belief that the war was not a mistake. This has been made into a commercial for the Republican Majority Campaign PAC.
3. I’ve got a crush on Obama.
This one got more than 10 million views – which proves that hot chicks in tight clothing are certainly a spur to the success of a video. Lately, Amber Lee Ettinger has diversified and put on the Palin glasses & hair bun, and there are now more than 30 “Obama Girl” videos.
4. JibJab’s “It’s time for some campaignin’ ”
This one came along in mid-July, when we were starting to get really serious about this, and provided a nice preview of the emerging themes of the campaign. This wasn’t as big a hit as the videos back in 2004, when the images of Kerry sailing up the Mekong and Bush screwing up everything he touched really hit a nerve. This one does deliever, however, with Obama riding a rainbow unicorn. And seeing Hilary clonk Bill with a frying pan never gets old.
5. McCain’s YouTube problem just became a nightmare
This one has gotten upwards of 8 million hits, and is from provocateur Robert Greenwald and bravenewfilms (full disclosure: years ago, I worked on a project that was destined for Greenwald’s production company, until it got tied up in a very messy legal quagmire). This video, part of a “The Real McCain” effort to define the candidate, set a lot of the foundations for the stories that we’ve been seeing reported in the last couple of months. Another very telling point: it’s garnered upwards of 66,000 comments – a pretty good yardstick for something that “engages” the audience.
6. Obama, Paris Hilton & Britney Spears – the “Rock Star” Ad
This is another video that got more than 2 million view, and made a huge splash at the time. To many people, this marked the spot where the McCain campaign went off the rails … where it started to become less about what McCain was going to do, and more about going negative and trying to smear Obama, using whatever means necessary. Of course, this then led to one of the funniest responses of the campaign season …
7. Paris Hilton accepts McCain’s endorsement
“I’ll see you at the debates, bitches,” is one of the best one-liners of the campaign season. I blogged about this before, so go there for a fuller reaction to her actually rather insightful energy policy.
Remember back when the PUMAs were allegedly going to tear the Democratic Party apart? When this giant seething mass of resentful, fanatic feminist Hilary supporters were going to desert and vote for McCain because they were so pissed off about the treatment Hilary got in the primaries? This woman made her way into the media spotlight for a while. And then it turned out that she didn’t really represent any kind of significant voice in American politics. She was just old, ornery and slightly nuts. Kinda like McCain, some to think of it…
9. RNC Convention Protests
This footage of Democracy Now’s Amy Goodman being carted away made a lot of news at the time, as did the tear gas and other protests going on outside the convention hall. This was all quickly overshadowed by the next player to emerge on the national stage…
10. Is McCain Palin’s Bitch?
This one has gotten more than 2 million view, yet it hasn’t made it as big as some of the other viral hits. I just love it because they managed to find an actor who actually kinda looks like McCain. And it starts with the faux-Palin firing an AK-47. And ends with the line “Who wants to go polar bear huntin’?”
11. Couric-Palin interview – “I can see Russia from my window”
This has passed into the category of epochal political history. The moment that Palin said something so galactically stupid that people around the world stopped in their tracks to ask, “She said WHAT? What the hell was THAT?” Of course, that then opened the door to….
12. Tina Fey as Sarah Palin
This got more than 7 million views. And has spawned a whole cottage industry. I’m sure you have seen all of these. And if you haven’t in a while, go and check them out. They could populate an entire list by themselves…
13. Sarah Silverman’s “The Great Schlep”
This is not as genius as Tina Fey’s work above, but it’s still damn good, and more than that, has apparently inspired a whole bunch of young East Coast jews to bug their grandparents in Florida to vote Obama. We’ll have to wait ’til Tuesday to see how well that worked out, but in the meantime, the description of Obama’s barbecue skills is worth a peep.
14. Obama – McCain Dance-Off
If we are not to settle big issues through single combat, then the dance-off would seem to some observers (OK, me) to be an equally thrilling and relevant process. And it may reveal more about character and poise than those damn canned statements they just recite in front of the cameras in lieu of actually answering the questions asked by the moderators.
This is going to have to be another “quick hit” because I’m struggling with Premiere Pro’s shakiness on the Mac platform – and yeah, I know, I should be using Final Cut Pro, but I’m trying to once again use myself as a guinea pig to see what problems crop up when you try to […] [...more]
This is going to have to be another “quick hit” because I’m struggling with Premiere Pro’s shakiness on the Mac platform – and yeah, I know, I should be using Final Cut Pro, but I’m trying to once again use myself as a guinea pig to see what problems crop up when you try to migrate footage from one platform to another. Which is not without its little surprises.
Functionality: Auto execs pondering how to replicate the iPhone’s commercial and cultural success would be wise to note that the iPhone is not simply a marketing phenomenon. The iPhone is a breakthrough product. It revolutionized the mobile phone business through design, features and functionality.
One way for auto companies to create breakthrough products may be to begin thinking like a consumer-electronics brand. Technology brands are the new car. Throughout the last century, the automobile stood for freedom, mobility and joy. Cars represented modern life at its best. Today that role is served by each new smart phone, gaming system, wafer-thin laptop or home theater that joyfully proclaims that the present is better than the past. An automaker should commit to creating a truly modern car, a car that democratizes the latest technologies; a car that liberates us from tired compromises by proving that design and performance go hand in hand with safety and environmental responsibility; a car that is an extension of the personal technologies we use to make our lives more efficient, organized and entertaining. Create a car that joyfully proclaims that today is better than yesterday.
The article goes on to tout Apple’s limiting supply and thus creating demand – the way that the Xbox 360 and Nintendo Wii did – which really doesn’t apply to newspapers. But the bit on coming up with new distribution models … now THAT is a fat pitch right down the strike zone.
And I especially like the recognition that the iPhone is a product that looks towards the future; that rejects “tired compromises.” I think that a lot of the pessimism and anger in the newsrooms has leaked over and tainted the news coverage. One of the places where this might be happening is in the news about the economy. I’m not saying that everything is wine & roses out there – I’ll leave that to Phil Gramm – but perhaps when you look around the newsroom and see nothing but empty desks and sad, echoing offices full of junked-out computer equipment, it becomes easier to believe that the entire economy is in in rock-bottom shitsville.
Apple was in similar straits about 10 years ago. They had to take money from Microsoft (i.e. The Evil Empire) just to survive. They were irrelevant, except to a hard core of graphic designers and photographers, and their notebooks kept catching on fire. They came up with the iPod and the entire music business was changed forever.
There are proposals out there for what newspapers could do. What they could become.
The U.S. is not yet ready to adopt some of the things that I’ve seen working elsewhere. Things that could cause the kind of “buzz” and speculation here about what newspapers are doing. That would bring back that “give ’em hell” sense of daring that is sadly missing from Big Corporate America.
In about a year, after the election-year ad spike really bottoms out, newspapers may just be desperate enough to try these radical re-thinkings of their core products and business methods. I just hope by that time, it is still possible to turn this industry around.
Buried at the end of this Reuters piece about how there aren’t many analysts bothering to report on the newspaper industry, comes this jewel of a quote: As for the sell-side, the analysts who remain — such as Goldman Sachs analyst Peter Appert — often cover other sectors that command more investor attention. “If I […] [...more]
Buried at the end of this Reuters piece about how there aren’t many analysts bothering to report on the newspaper industry, comes this jewel of a quote:
As for the sell-side, the analysts who remain — such as Goldman Sachs analyst Peter Appert — often cover other sectors that command more investor attention.
“If I covered only the newspaper industry, first of all I would have been fired a long time ago; secondly, I would have had to kill myself,” Appert said.
Part of me wonders if this is sound strategery – if there is no demand for a product, why continue to produce it? But the other part keeps whispering that some of the smartest investors always take the contrarian view. When they see the mass of groupthinking lemmings all hurtling in one direction (say, away from newspapers), they bide their time and step in and snarf up the companies for rock-bottom prices. When things start to turn around, they are there on the ground floor, and see great returns (see: the real estate investors who bought in the early 90s, when the market was moribund, oil speculators who bought when the prices were around $20 a barrel, etc.)
Then again, the whole newspaper industry could be utterly and completely doomed, and anyone sinking money into it is just “catching a falling knife” in the investor parlance.
So yeah, lemmings – heed the words of the know-it-alls at Merrill Lynch, who think newspapers have no future whatsoever. (Hey, weren’t these the guys who said Enron and subprime mortgages were rock-solid?) Panic and dump your properties. You shouldn’t be trying to run them anyway.