Is this the future of the news business? Or has it always been this way, and we’ve been deluding ourselves to think otherwise? Gallup’s analysis in 1928 basically says, “Yup. Nobody has ever read those long investigative pieces.”
Back then, they had tried various methods to track what people actually pay attention to, down to gathering the used newspapers off the floors of trolley cars and seeing what page they were left open to (and aren’t you glad you don’t have that job, back when people routinely chewed tobacco and spat?). Gallup came up with the novel idea of sending his researchers into people’s houses in Iowa and watching them read the paper (call it ur-Google Analytics).
People are liars. “The person who believes he has read all of the front page may not have read a fourth of it,” he wrote.
Nobody likes serious news nearly as much as they report on questionnaires. Gallup’s interviews reported that front-page stories were actually no more popular than small features in the back of the paper.
The most-read thing in the newspaper wasn’t news at all: It was the front-page cartoon by J. H. Darling, read by 90 percent of men compared with just 12 percent reading the day’s local government news.
For women, the most-read parts of the newspaper were “style and beauty pictures.”
This is very timely, as Wednesday’s class is going to be about using SEO and analytics to track what readers actually read – and the advisability of just giving them “fast food news”.
It’s led to the rise of what we in the biz are calling “hamster wheel” journalism. I talked last week to the editor of Metropolitan magazine, who said that he gets staffers from fairly reputable outlets, like Fast Company, where the reporters have an Excel spreadsheet with 200 stories that they are REQUIRED to do each month. These story “ideas” are generated by having bots track Google Trends to see what the target audience is clicking on, and then backwards-engineering that to have stories that will then fit those audience interests.
On the one hand: it makes sense to give your customers what they want. On the other hand: aren’t we supposed to be serving a slightly higher calling than the fry cook down at Mickey D’s? What does it mean when the news isn’t what you need to know to function in an increasingly complex and demanding world — but just the lowest-common-denominator pap that can be quickly shoveled out and morticed around the ads.
Mediapart in France is profitable because it gives readers what they are willing to pay for. Imagine that. Quick hit here for my students, who are increasingly upset about their job prospects after graduation. I shared an article from Neiman about the upheaval in the newspaper business in France. Apparently, the same problems that plague […] [...more]
Mediapart in France is profitable because it gives readers what they are willing to pay for.
The Mediapart organization makes its living by doing hard-hitting investigative journalism that its audience is willing to support. They also make a point of including lots of video on their pages.
Quick hit here for my students, who are increasingly upset about their job prospects after graduation.
I shared an article from Neiman about the upheaval in the newspaper business in France. Apparently, the same problems that plague the French economy at large are at work, writ small & exceedingly acerbic, at the major newspapers. They are tech-phobic, rely on business models that no longer fully function, and react angrily to anyone threatening the promise of a cushy work situation with guaranteed employment and 1/4 of the year spent on vacation.
But about 2/3 of the way down the article, there appeared these grafs, which I am going to excerpt here, although I do urge you to go to the Neiman site & give them some traffic-love, ’cause @petergumbel did a damn good job with this write-up:
Edwy Plenel, for one, is incensed by the conflicts of interest inherent in the French press. But then that’s not entirely surprising, since outrage is Plenel’s mojo.
He has come a long way since his revolutionary youth, which he wrote about in a 2001 memoir. He made his mark as an investigative journalist at Le Monde; one of his most celebrated scoops was uncovering the role of French intelligence in the 1985 sinking in New Zealand of the Greenpeace boat Rainbow Warrior. He made the Elysée so nervous that it illegally bugged his phone during the presidency of François Mitterrand. He spent a total of 25 years at Le Monde, including a stint as editor in chief, but he left in 2005 during one of its sporadic crises, after attacks on his management style.
He launched Mediapart as a subscription site in December 2007. Three years later it was at break-even. Today, it’s racing toward 100,000 subscribers, each paying the equivalent of about $12 per month. This year he expects the site to make about $2 million net proﬁt on just over $10 million in revenue. It has a staff of 50, 33 of whom are journalists. It now outsells Libération, which has almost six times as many staff members. [Emphasis mine – dlf]
The secret: a laser focus on exclusive news, especially revelations of high-level political and ﬁnancial skullduggery. Mediapart’s subscriptions soared in 2010, the year it broke the story about a convoluted political and ﬁnancial scandal involving France’s richest woman, Liliane Bettencourt. They leaped again in 2013, after it revealed that the then-budget minister Jérôme Cahuzac, whose job included ﬁghting tax evasion, himself had an undeclared Swiss bank account and had transferred funds to Singapore. After denying the allegations for months, Cahuzac eventually resigned, acknowledging that he had lied to parliament and to President François Hollande.
Work the numbers, folks. $10 mill in revenue-$2M profil = $8M in expenses. $8M/50 employees = $160K/yr per employee. Figure about 40% of that per-employee allocation is insurance, pension, and building/maintaining the site & gathering news costs, and you still get a salary of $64K/yr on average. For a journalist, that ain’t bad. Plus you’ve got a warchest of $2M that you can throw at a big story, should one come up, and to use to build out the site & extend its reach.
So. There’s a lot going on here. I’ve written in the past about how I disagree with the authors of The Death and Life of American Journalism, who called for exactly the kinds of government subsidies for newspapers that are allowing them to continue to try to deny reality, and live in a fantasy-bubble. At the time, I was reacting to what I’ve seen in Latin America, Georgia, Kazakhstan and other places where allowing the government to get its hands on the revenue stream is akin to letting criminals loop a choke-chain around your throat. They can lead you around by it, and if you start getting out of line, all they need to do is give it a quick, sharp yank, and you fall back in line, suitably docile.
I’ve seen that happen. First-hand. In Venezuela, when I was a very young editor.
Government subsidies are kinda like this. Nothing really sticks until you try to do something that the person holding the leash doesn’t like.
The solution that Mediapart has come up with here may not last. It may not work everywhere. But it’s something that makes a lot more sense to me than journalism that exists as a kind of state-supported performance art piece. Because I’ve seen that as well: journalists who are completely disconnected from the concerns of their audience, sporting paternalistic, condescending attitudes, producing self-indulgent “investigations” that nobody really reads, and that don’t really threaten the people who give them checks each month.
Look, I am not hooting and hanging on the rim here, delighting in the travails of people still stuck in jobs at tottering media empires, hanging on for dear life through ownership changes, strategy changes, and promises that melt away like morning dew.
Long-term, market forces are going to prevail. If journalists produce a product that people want, and give them a means by which to support/purchase/share it, then that audience will fight to ensure that this important part of their lives is still there. The very first case study I ever did was centered around that fact. It makes me sad to see so many journalists, who base their entire journalistic ethos on pushing people and institutions to change, to adapt to the times, to leave behind (even if painful) the habits & traditions of the past … ignoring their own best advice.
Liberation may not be a cafe. But it may also not be an outlet for journalism much longer either.
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.
Unemployment over 50% – banking system collapse – political instability – newspapers run out of options When asked what are the enduring lessons of the last five years for newspapers, various pundits have opined “Don’t enter an economic recession massively over-leveraged and dependent on fragile business models.” In Spain, the problems that we are experiencing […] [...more]
Unemployment over 50% – banking system collapse – political instability – newspapers run out of options
When asked what are the enduring lessons of the last five years for newspapers, various pundits have opined “Don’t enter an economic recession massively over-leveraged and dependent on fragile business models.”
One by one, newspapers are falling behind.
In Spain, the problems that we are experiencing in the U.S. are even more severe. The advertising base was even more reliant on crazy real-estate bubble advertising than it was here. Anyone who has flown into, say, Barcelona, and seen 20 MILES of empty housing developments, half-built apartment blocks, and gradually eroding graded hillsides, can quite easily judge what kind of devastation was left behind when that bubble burst.
There is some disagreement over just how many digital news outlets have sprung up in the past couple years:
Ahora desde la AEEPP (Asociación Española de Editoriales de Publicaciones Periódicas) reconocen que tienen 763 publicaciones digitales asociadas aunque, Carlos Astiz, secretario general de la Asociación, estima que puede haber 3.000 medios digitales.
…and exactly what constitutes a regular news publication (such as when its edition are funded via crowdfunding:
En medio de la crisis que afecta a los medios tradicionales, han surgido en los últimos meses un gran número de medios digitales con fórmulas diferentes para conseguir la rentabilidad. Desde la existencia de socios que por un módico precio acceden antes a los contenidos como en diario.es o infolibre.es a proyectos financiados por crowdfunding como la revista FronteraD.
But the trend seems to be that digital-only publications have been designed from the ground-up to be profitable on this new platform. The publishers, operating on a shoestring, find an audience, find ways to monetize that audience, and then start to methodically try to scale up.
The opposite is in action with the traditional media. They have their audience – but it is shrinking.
They have their revenue streams – but they are evaporating.
Soon to run back behind the paywall. Maybe it will work this time. Then again, with so much new competition in the digital marketplace, and with the brand discredited & distrusted by younger readers … maybe it won’t.
Meanwhile, over in the digital-only world, site owners are waking up to the trend of “native advertising” – i.e. putting posts into the middle of the flow that look a lot LIKE the news stories that readers are there to check out … but that contain sponsored content, written in a way that doesn’t conflict with the rest of the content on the site.
The reason native works is because the advertising is treated as a unit of content on the platform where it lives. That may seem obvious, but it’s an important observation. When a brands’s content competes on equal footing alongside a publisher’s content, everyone wins. Those search ads – they win if they are contextually relevant and add value to the consumer’s search results. Those promoted tweets only get promoted if people respond to them – a signal of relevance and value. The same is true for all truly “native” ad products. If the native ad content is good, it will get engagement. The industry is evolving toward rewarding advertising that doesn’t interrupt and is relevant and value additive. That’s a good thing.
Spin magazine is killing its print edition-tell me how paywalls would help this situation? I keep hearing over and over again that the demise of Murdoch’s The Daily means that digital magazines don’t work, the real solution to the revenue problems is to “fix the original sin” and put all content behind a paywall. The […] [...more]
Spin magazine is killing its print edition-tell me how paywalls would help this situation?
I keep hearing over and over again that the demise of Murdoch’s The Daily means that digital magazines don’t work, the real solution to the revenue problems is to “fix the original sin” and put all content behind a paywall.
The thinking seems to be that since the New York Times has said that circulation revenues are equal to ad revenues, that must mean that paywalls are the long-awaited saviour for the news business.
Comes now the case of Spin magazine, the venerable Rolling Stone also-ran. Can’t spin these numbers as anything other than a full blown collapse of the underlying ad market:
Over the course of the last decade, ad pages gradually declined from 661 in 2003 to 378 in 2011, a 43% drop, according to the Publishers Information Bureau. More recently, ad pages plunged another 40% from 287 in the first nine months of 2011 to 171 in the first nine months of 2012.
On the circulation front, in the six months ending December 2011 (the most recent period for which data is available) Spin had a total circulation of nearly 460,000 down 15% from 540,901 in the same period of 2005, according to the Alliance of Audited Media, formerly the Audit Bureau of Circulations.
OK, so take a second and mull over those numbers. When your ad revenues diminish by 75% while your circulation is only down 15%, what does that really mean? Does it mean that the audience has abandoned your product?
Or does it mean that advertisers have abandoned your product?
Of course, it means the latter. The young, hip audience that buys music (and all the related lifestyle accoutrements you see in music mags, such as t-shirts, DeVry University classes on how to be a music producer, black light posters & urine-cleansing supplements), is now getting their music online, not from the no-longer-existent music stores.
Why buy an ad in a print product that doesn’t offer a quick and easy way for the now-engaged audience to seamlessly buy what you’re selling? It’s more effective than print, and (due to continuing wrongheaded ad sales policies) cheaper too.
The challenge here, once you make the shift to all-digital, is going to be offering some kind of as product or experience that differentiates your music mag from all the music blogs out there that have much lower cost overheads.
I’ve always said that the places to watch for innovation are music and video games. Keep an eye on this space. If there are going to be innovations, they are likely to show up here first.
27 Print Dollars for $1 Digital; Social News; Papers in Trouble; Kodak v. Fuji I posted this picture via Twitpic earlier today, and my digital brethren quickly chimed in on how much they felt like this in their daily lives. And I get it. Working in the media industry these days is far, far different […] [...more]
27 Print Dollars for $1 Digital; Social News; Papers in Trouble; Kodak v. Fuji
I posted this picture via Twitpic earlier today, and my digital brethren quickly chimed in on how much they felt like this in their daily lives. And I get it. Working in the media industry these days is far, far different from the way it was when the journalists of my generation got into the biz. Looking back at recordings from the early 90s, I am struck by how much free time we all seem to have had back then – these days, you feel like you can’t take your eyes off your Twitter feed for even a second, lest you miss the Next Big Meme and are thus branded as a digital troglodyte who “just doesn’t get it.”
Strung out and exhausted, journalists are wondering when this migration ends, or even when they might run across a handy signpost telling them which way to go. (click to embiggen)
So yeah, if you feel like you’re lost in the desert and that the only future involves your bones bleaching in the sun next to a steer skull … well, maybe it’s because most newsrooms these days evoke the feeling you get when wandering through any of the weathered ghost towns that dot the arid landscape in Arizona and Nevada, left behind when the seams of gold and silver petered out.
This is painted on the ceiling of the Rila Monastery in the mountains of Bulgaria, one of UNESCO’s World Heritage Sites. I can’t help but wonder whose eye this ancient artist used as the model for the Eye of God. The history and beauty of this complex makes me feel like I’m about to embark […] [...more]
I can’t help but wonder whose eye this ancient artist used as the model for the Eye of God. The history and beauty of this complex makes me feel like I’m about to embark on some sort of DaVinci Code-like adventure, only this one will involve online business models and the mysteries of HTML5. Heh. Hopefully, I won’t be pursued by some self-flagellating Newsroom Curmudgeon, bent on undermining my message about how there is actually hope for the future, that journalism will survive, even if it does take a form that is strange and possibly abhorrent to the practitioners steeped in The Old Ways.
The point is that the problems with the news business bear surprising resemblance to the problems of society as a whole. We've tied our fate to the unfettered free-market economic forces, without really taking notice of the fact that there are a few industries, at least, that are not prepackaged Cheetos. Where diluting quality and streamlining production schedules and all the other tricks of modern corporate management may work in the short term ... but in the long term are not only killing the industry, but harming ... well, basically Western Civilization. [...more]
The good folks at CNN asked me to appear on Backstory” to talk about the News of the World’s phone-hacking scandal.
I tried to oblige them with some insights onto why this kind of scandal keeps happening, and why. You can see the results of the interview in the segment below:
More on why the news business keeps getting hit with privacy scandals like this, and why it won’t stop after the jump…
The clash of ancient and modern is never more stark than in these developing nations I’ve been in Addis Ababa, Ethiopia, for the last week, training the local journalists and government information officers (aka PR flacks) on how best to take advantage of the way that “New Media” is creating new ways of connecting with […] [...more]
The clash of ancient and modern is never more stark than in these developing nations
I’ve been in Addis Ababa, Ethiopia, for the last week, training the local journalists and government information officers (aka PR flacks) on how best to take advantage of the way that “New Media” is creating new ways of connecting with each other, and the world at large. I’m here as part of the same US Embassy program that has sent me to places like Chile, Kazakhstan, Georgia, Costa Rica, etc., to try to bring people the benefits of experience (aka the way newspapers & TV news has imploded in the U.S.), so they can start planning for the Great Digital Migration.
This is my class of TV journalists at Addis Ababa University (AAU). I tried to cram as much about online video and sharing into my short sessions as I could. Here, I'm showing how to use both professional tools like Adobe Premiere Pro CS5, as well as free alternatives like Windows Movie Maker.
The one thing that everyone here agrees on is that Ethiopia desperately wants to change its international image – c’mon, admit it. When you think of Ethiopia, what images come to mind? Deserts, starving people, vultures, Live Aid, right?
Well, it’s not like that any more. In fact, if you look around at the Addis Ababa skyline, you’ll mostly see cranes and highrise towers under construction. The real-estate bubble that burst and devastated the rest of the world never took hold here.
There are still many reminders that the ancient ways of living are still very much in existence here in Addis, but please also note all the other markers of modernity in this shot.
However, they are facing many of the same challenges as the rest of the world, at least when it comes to the emergence of the internet, and the struggles of newspapers, radio and TV stations to come to grips with social media, and the ability of anyone to become a publisher/broadcaster/internet troll.
The very first place I visited was Sheger FM, the one independent radio station in Ethiopia. This is the courageous owner, who is really struggling to walk the razor's edge here in Addis.
I’ve found many of the same behaviors and attitudes I’ve encountered in the other places that I’ve done web/online video/social media training sessions – stubborn insistence that things will never change, toxic skepticism, and even outright hostility.
After a bit of a rocky start, these guys really came around and appreciated the hands-on lessons I gave them on how to do live video stand-up reports and how to compress video into the best codec to upload to YouTube. The Nelson Mandela building is a challenge, though; between the thin air at this 8000-foot altitude, and having to haul my big carcass up 5 (five) steep flights of stairs, the first few minutes of every class were mostly spent huffing and puffing, and hoping that someone in the class had a particularly insightful comment.
Dave LaFontaine and his tv production class in front of the Nelson Mandela building at Addis Ababa university in Ethiopia.
First in a series of videos taken during a panel discussion for PR Newswire at the LA Times building. On the panel with me, the delightfully funny and plainspoken Serena Ehrlich, who knows more about how to handle media in the digital age than the last three Presidential Press Secretaries put together. Although there […] [...more]
First in a series of videos taken during a panel discussion for PR Newswire at the LA Times building.
On the panel with me, the delightfully funny and plainspoken Serena Ehrlich, who knows more about how to handle media in the digital age than the last three Presidential Press Secretaries put together. Although there is a marked resemblance there to C.J Craig of the late, lamented Bartlett administration.
Anyway, this is a bit of an intro to what the conditions are like for the media, and what the big forces shaping the future are going to look like.