No silver bullets

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Lewis DVorkin performed a miracle with Forbes … almost. He almost rescued a dying brand, almost helped get it sold to a new owner, and almost rescued the Forbes family and its no-doubt-regretful investor Elevation Partners. I respect Lewis’ inventiveness and innovation. He has done the best he could with the brand he had.

But there’s only so much that can be done urgently with old media on the descent. As Steve Forbes himself said announcing the sale of a majority stake in his company to a group of Asian private-equity investors and cataloguing how his business used to be run: “The web has made this way of doing things obsolete.”

The Times, quoting unnamed sources, says the deal values Forbes at $475 million, but the Financial Times’ John Gapper properly asks:

Axel Springer, a leading European magazine publisher and digital company, was supposed to be interested in Forbes. But it and other media buyers dropped out early. Forbes had reportedly been hoping to sell the entire company for more than $400 million. That didn’t happen. Whatever the real valuation, given the buy-out of Elevation Partners — which had invested in Forbes in 2006 getting a reported 40% for $250-300 million, valuing the company then at under $750 million — and given the large chunk that Forbes is left with, I’d guess the family got something in the borderline nine figures. [I should add that as one commenter elsewhere points out, I’m not even trying to make a guess at such things as liquidation preferences for Elevation.] Not a deliriously happy ending for the Capitalist Tool, but — as people told me this week when I complained about turning 60 — it beats the alternative.

When DVorkin returned to Forbes in 2010, where he had been executive editor a decade before, with the purchase of his startup True/Slant, he brought with him what looked like a solution for a dying brand: He used that brand as candy to draw more than a thousand contributors to write mostly for free — the top few traffic attractors can make a decent buck — adding onto the work of a few score Forbes staff journalists. Thus he simultaneously exploded the quantity of content Forbes could serve while reducing the total cost of content to nearly nil. Now I’m all for media opening up to more voices, but let us acknowledge that not only the price but also the overall quality of Forbes content declined.

At the same time, the business side, headed by Mike Perlis, used that dying Forbes brand as candy for advertisers: Come appear on Forbes.com with your own pieces labeled “Brand Voice.”
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I’ve long said that if you have to put a link next to a label saying “what’s this?” then the label clearly isn’t clear enough. This was a pioneering entry into the the so-called native advertising that is now overtaking media everywhere. Just as it was supposed to be the salvation of Forbes it is now supposed to save legacy media.

Beware the silver bullet. It can backfire.

The problem in the end for Forbes, I believe, is that the brand became even more devalued. I illustrate this very simply: Now, when I see a link to Forbes on Twitter, I don’t know whether it is going to take me to (1) the good work of a Forbes journalists, (2) the good work of a Forbes contributor, (3) the bad work of one of many Forbes contributors, or (4) the paid and wordy shilling of a Forbes advertiser, e.g.:

Thus, I hesitate three beats before clicking on a Forbes link. That is the definition of a devalued media brand. And that is precisely what other media companies should fear as they more and more try to fool their readers into thinking that what we used to call advertising is now something else that can comfortably live under brands, enigmatically labeled.

The real lesson of Forbes is that there are no easy answers and quick solutions for transforming legacy media companies. DVorkin became a key tourist attraction for media executives touring New York. I know because I took many of them to meet Lewis. He generously shared his means and methods. But I also told these executives that the path was not without the peril I just described.

Media executives are looking for quick fixes still.

Tablets were going to save them, returning to them the control of user experience and business model the link had taken from them. Hearst Magazines has had some success with tablets. But salvation does not this way lie.

Pay walls were going to save them, finally recognizing the value of their content online. But as Gannett has learned, after grabbing cash flow the first year, growth stops. No Moshiach there.

Ad marketplaces were going to save them — or at least let them compete with Google. But programmatic advertising — those ads that follow you all around the web telling you to buy that kayak you looked at once on Amazon — commodify media. They value direct data about a customer over the context media provides — that is, it’s better to show a kayak ad to a kayak buyer than to buy an ad next to a kayak story. This is why I argue in the start of a white paper I’m finishing now that we must shift to a business based on known relationships with people as individuals and communities rather than as a mass.

Shifting to a relationship and service strategy over a pure content strategy will take not only urgency but also time, with much experimentation and failure and a need for patient capital — likely not the Hong-Kong-based private-equity investors Forbes now has, not the hedge funds that Digital First Media has, not the public owners that Gannett and Time Inc. have. This won’t be easy.

I’m not saying that DVorkin and Perlis ever thought that what they were doing was easy. But others did. They hoped that Forbes would show the way to a solution for all their problems. Well, so much for that. That way lies the skin of your teeth.

Send your comment to the FCC on net neutrality. Here’s mine.

I just filed my comments on net neutrality with the FCC, adding to the 647,000 already there. You should, too. It’s quick. It’s easy. It’s important. It’s democracy. Do it here. And do it by July 15, the deadline. [Note: The deadline was extended to July 18.] Here’s mine:

* * *

I am Jeff Jarvis, professor and director of the Tow-Knight Center for Entrepreneurial Journalism at the City University of New York and author of the books “Public Parts” and “What Would Google Do?” and the ebook “Gutenberg the Geek.”

I ask you to govern your decisions regarding net neutrality and broadband policy according to the principles of equality that have made the internet the powerful engine of freedom, speech, innovation, and economic development that it has already become.

As Sen. Al Franken said at the South by Southwest conference in 2011, we proponents of net neutrality are not asking you to change the internet; we are asking you to protect the net from change imposed by the companies trying to exploit their positions of control. “We have net neutrality right now,” Sen. Franken said. “And we don’t want to lose it. That’s all. The fight for net neutrality isn’t about improving the Internet. It’s not about changing the Internet at all. It’s about ensuring that it stays just the way it is.”

I put it this way in a question to then-President Nicolas Sarkozy at the eG-8 meeting he convened in Paris that same year: “First, do no harm.” I urge you to take that Hippocratic Oath for the net. Do not allow it to change. Preserve its equality.

The first principle upon which the net must be maintained is that all bits are created equal. If any bit is stopped on its way by a censor in China or Iran … if a bit is slowed by an ISP because it did not carry a premium toll … if a bit is detoured and substituted by that ISP to promote its service over a competitor’s … or indeed if a bit is spied upon by the government of China or Iran or the United States … then no bit can be presumed to be free. The net is built edge-to-edge so that anyone can speak with anyone without discrimination.

Another principle upon which the net must be maintained is that it is open and distributed and if any institution — government or corporate oligopoly — claims sovereignty over it, then it is no longer the net. Of course, I recognize the irony of asking a government agency for help but that is necessary when a few parties hold undue control over choke points in this architecture. The real answer is to ensure open and broad competition, for any provider in a competitive marketplace that offers throttled, incomplete, inferior service will lose; in an oligopoly, such providers use their control for profitability over service. Corporations by their nature exploit control. Government protects consumers from undue exercise of such control. That is your job.

Google Executive Chairman Eric Schmidt has offered another principle: the permissionless nature of the net. “Let’s give credit to the people who foresaw the internet, opened it up, designed it so it would not have significant choke points, and made it possible for random people including twenty-four-year-olds in a dorm to enter and create,” he said.

My entrepreneurial journalism students can barely afford to start the companies they are creating, the companies that I believe will be the salvation of journalism, scaling up from the bottom, not from the top. Innovation, we already know, will come from the entrepreneurs over the corporate incumbents. These entrepreneurs cannot afford to pay premiums to ISPs for access to their customers.

We know that corporate incumbents in this industry will abuse the control they have to disadvantage competitors. I filed a complaint with the Commission last year when Verizon refused to connect my Google Nexus 7 LTE tablet to its network as required by the Commission’s own rules governing that spectrum as “open.” The incumbent ISPs have demonstrated well that they choose not to understand the definition of “open.”

“Changes in the information age will be as dramatic as those in the Middle Ages,” James Dewar wrote in a 1998 Rand Corporation paper. “The printing press has been implicated in the Reformation, the Renaissance, and the Scientific Revolution, all of which had profound impacts on their eras; similarly profound changes may already be underway in the information age.” The internet is our Gutenberg press. Note well that it took 50 years after the invention of Gutenberg’s press for the book to take on the form we know today. It took 100 years, says Gutenberg scholar Elizabeth Eisenstein, for the impact of the book on society to be fully recognized. It took 150 years and the development of postal services before anyone thought of using the press to create a newspaper and 400 years — with the advent of steam technology and mass production — before newspapers were in the hands of the common man and woman.

We do not know what the internet is yet and what it will foster. It is too soon to limit it and to grant control over it to a few, powerful companies. I urge you to protect its freedoms by enforcing a principle of net neutrality and to nurture its growth and development with a broadband policy that fosters competition over control and — here is my best hope — I urge you to establish the principle of a human right to connect to the network with equality for all.

Thank you.

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Read the latest comments here. (Mine is not posted yet. I assume it will be after the weekend.)

Friendly skies

I was five hours late returning from San Francisco to home yesterday but I was remarkably calm and sanguine about the delay. Why? Because I was well-informed and well-cared-for. And that was the case because this year I joined the secret society of most-frequent travelers and ticket buyers on United: Global Services.

sfo screenshotWe were taxiing out to the runway at SFO for our agonizingly early 6:45 a.m. flight when the pilot said a gauge wasn’t acting properly. Back to the gate we went (and I was amused that my United app showed us arriving before we’d taken off). Much testing and back-and-forthing by mechanics ensued. It didn’t work. The plane was taken out of service. We were told to leave. Shit happens.

Then could have begun the customary hell of wrenches — literal and figurative — thrown into travel plans and planes. That was nearly the case. The entire planeload ran to a customer-service line seeking rescue. The person behind the counter said she couldn’t rebook us because our tickets were “used.” We were told United was, and I quote, “looking for” a plane. Pesky critters go hiding, apparently. Grumbling started to rumble.

But then two nice things happened. First, the lady behind the counter, named Rita, scolded operations at the airline for not giving passengers complete and accurate information. How nice — how rare — it was to have an ally fighting for us, the customers. That also preempted our need to fight for ourselves.

Then I got a phone call from Global Services. This, I quickly learned, is the real perk of being in the club (not just being the obnoxious guy who gets to get on the plane first). A very nice woman named Terry Norris told me that she had already rebooked me on three — yes, three — flights to afford choices based on time, airport, and seat assignment. Wow. I wasn’t sure what to do so I held onto one choice and Terry let me wait to decide while the airline went looking for its pesky plane. (Of course, when found, I imagine an employee shouting this:)

About an hour later, Terry called me back and informed me that a plane coming in from Raleigh-Durham had been assigned to us (which, of course, is what they mean then they say they “found” a plane). It would be arriving at 10:05 a.m. I’d still have my beloved first-class, aisle, bulkhead seat (I’d bought an upgrade with my miles). It so happens that I knew about the found plane before the gate agent did and filled him in.

I took to Twitter to thank and publicly praise these good people.

And then @ahalam had a suggestion:

Right. Why shouldn’t everyone get the kind of service I got yesterday? Well, the answer at first is obvious: It would be prohibitively expensive for airlines to have lots of Terrys to personally take care of and inform every customer. I get that service now because the airline made a lot of money off me last year, when I flew more than 100,000 miles. But if every customer could, indeed, get that level of service, wouldn’t the airline make even more money from even more satisfied and loyal customers? Call me an cockeyed optimist, but isn’t that a service ideal?

Well, @ahalam is right: A software agent could take personal care of customers. The new United Android app is good and it keeps me better-informed than I used to be because now I can look up where the plane I’m waiting to board is coming from and when it will arrive as well as the status of wait lists for seats and upgrades. That’s quite an advance.

Imagine if when I arrive at the airport neurotically early, as I tend to do (thanks, Mom), United would ping me and ask whether I wanted that empty seat on an earlier flight. Imagine if when there are problems, United’s software agent keeps me personally informed and, like Terry, gives me other options to get to my destination. Imagine if this automated agent knew I liked going to on pleasure rather than business and sent me a tempting deal to fill up a plane. Imagine if, knowing my preferences in hotels and local transit — Über? rental car? train? — the agent booked and billed me from door to door, giving me choices but not requiring me to go through scores of pages to get the job done. Imagine if the computer agent knew me so well it could preload my own shows on the entertainment system (you left off at episode 23 of House of Cards, Mr. Jarvis) and order me the food and wine I like and seat me next to interesting people who like to talk or people like me who prefer the silence? Imagine, as I suggested a few years ago, if the airline could gather the collective wisdom of its passengers about their favorite destinations or hometowns and share that with other passengers. Imagine if just one airline did all that for us instead of making its money by nickel-and-diming us charging for bags of nuts or bags on the plane.

All that is possible. It would mean that an airline would have to respect customers as individuals rather than as anonymous butts in seats, building trusted and rich relationships with each one of us and rewarding us with tangible benefits.

More important, it would mean that an airline would have to become a technology company (which just happens to own metal tubes that fly). Such an airline’s core competence would be in building systems to super-serve customers with information and solutions and relevant suggestions based on rich data.

As we landed in Newark more than four hours late, I was starting to think this could happen if just one brave airline invested in such a future.

Four hours late? Didn’t I say above we were five hours late? Well that’s because the airline’s computer system had broken down and so none of the flights getting ready to leave were allowed to depart their gates and thus no gates were free for us and so we sat on the runway and — “the hits just keep coming,” said the pilot — then there was no one to drive the jetway to us. Oh, well. And I was imagining the new airline as technology company.

Well, a passenger can dream, can’t he?

In any case, given how much abuse airlines take on Twitter, I thought I’d say thanks to United for making a bad day as bearable as it could be for me. And I’m glad I wasn’t traveling with the passenger whose plane always flies under a dark cloud. See…

Buttry’s travels

And a postscript from Mr. Buttry:

The German war against the link

German publishers are not just fighting Google. They are fighting the link and thus the essence of the internet.

Half the major publishers in Germany have started a process of arbitration — which, no doubt, will lead to suits — to demand that Google pay them for quoting from and thus linking to their content. And now we know how much they think they deserve: 11% of Google’s revenue related to their snippets. From their government filing, they want a cut of “gross sales, including foreign sales” that come “directly and indirectly from making excerpts from online newspapers and magazines public.” [All these links are in German.]

Their demands are as absurd as they are cynical and dangerous. First, of course, Google is sending the publishers plenty of value as well. That is, Google is sending the publishers us: readers, customers, the public these news organizations allegedly want to serve. So what are we, chopped liver? I’ll be posting an essay soon that argues that one reason media have a problem building new digital business models is that we still think value is intrinsic only in content; we have no marketplace and metrics for valuing the creation of an audience for it (now that those functions are unbundled). If the publishers really want a fair exchange of value, then they should also be paying Google for the links — the readers — it sends their way. But, of course, that would create a moral hazard and corrupt search; that Google does not charge for placement in search and Google News is precisely what set it apart from predecessors and built a valuable and trusted service.

Google is never going to pay for the right to quote and link to content. That would ruin not only its business but also the infrastructure of knowledge online. If we can find only the knowledge that pays to be found, then the net turns into … oh, I don’t know, a newsstand?

The publishers aren’t stupid. They realize these facts. That’s what makes their action so cynical. They are trying to blackmail net companies in hopes of getting some payoff from them. They’re not just going after Google but also Microsoft and Yahoo — though, interestingly, if a company has only a search engine, the publishers would charge them only a third of their tariff. That is to say, they want to go after the big net companies because they are big targets.

Earlier this month, I spoke at a Google Big Tent event in Berlin (Google paid my travel expenses; I do not accept other payment from Google) where a conservative member of parliament, Dorothee Bär, had the admirable guts to criticize these mostly conservative publishers for their efforts, telling them that she opposed passage of the law that is allowing this nonsense — a Leistungschutzrecht or ancillary copyright — and also warning them that a failing business model is no excuse to run to government begging for regulation. You’d think conservatives would agree about that. But that, again, is what makes the publishers’ campaign so cynical.

Note, by the way, that Google does not place advertising on Google News. Are the publishers seeking 11% of 0? Note as well that there is data to say that longer samples of content could end up sending *more* traffic to creators (more on that, too, in a later post). These are facts that will need to be discussed in any suits.

Add all this to other attacks on Google by German media and politics against Google: the Verpixelungsrecht — right to be pixelated — in Google Street View and calls by German politicians to break up Google. Add to that as well the recent European court decision upholding a right to be forgotten and requiring Google to take down links to content that subjects don’t like.

And I worry about the net. I worry about Europe and especially Germany about their efforts to protect the past. I’ll likely write more about that as well later.

But, of course, these warriors do not speak for all of Germany or all of Europe. The instigators of the war include Axel Springer, Burda, WAZ, the Müncher Merkur, and others. But other major publishers — Spiegel Online, Handelsblatt.com, FAZ.net, Stern.de, Sueddeutsche.de and [cough] the new German edition of Huffington Post — have not joined the war. And there are politicians such as Bär and outgoing vice president of the European Commission Neelie Kroes who have the courage to defend the future. Here is Kroes the other day responding to strikes across Europe protesting the arrival of Über:

The debate about taxi apps is really a debate about the wider sharing economy. That debate forces us to think about the disruptive effects of digital technology and the need for entrepreneurs in our society. . . .

Whether it is about cabs, accommodation, music, flights, the news or whatever. The fact is that digital technology is changing many aspects of our lives. We cannot address these challenges by ignoring them, by going on strike, or by trying to ban these innovations out of existence. . . .

I believe it is a fundamental truth that Europe needs more entrepreneurs: people who will shake and wake us and create jobs and growth in the process.

We also need services that are designed around consumers. The old way of creating services and regulations around producers doesn’t work anymore. They must have a voice, but if you design systems around producers it means more rules and laws (that people say they don’t want) and those laws become quickly out of date, and privilege the groups that were the best political lobbyists when the law was written.

That is old-fashioned compared to a system that helps all of us as consumers, and encourages entrepreneurs. We need both those elements in our economy; otherwise we will be outpaced to our East and our West. We’ll be known as the place that used to be the future, but instead has become the world’s tourism playground and nursing home. I don’t want Europe to have that future. . . .

More generally, the job of the law is not to lie to you and tell you that everything will always be comfortable or that tomorrow will be the same as today. It won’t. Not only that, it will be worse for you and your children if we pretend we don’t have to change. If we don’t think together about how to benefit from these changes and these new technologies, we will all suffer. . . .

If you teach entrepreneurial journalism….

Here’s the schedule for our July 10 summit of entrepreneurial journalism educators at CUNY’s Tow-Knight Center for same. Good news: We have a *limited* budget to help with travel for those who need it thanks to the Scripps Howard Foundation. If you teach (or plan to teach) entrepreneurial journalism, sign up now.

Entertainment Weekly, the genesis

EW prototype cover

EW prototype cover

Even with the cringes induced with a few maddening memories, I thoroughly enjoyed reading Anne Helen Petersen’s history of Entertainment Weekly‘s life — and torture — at Time Inc. Others involved might quibble about this or that. A successor said in a subsequent Facebook discussion that synergy wasn’t the problem — well, it wasn’t for him; I remember a top Time Inc. executive calculating the grade-point averages our critics gave (he said we were being too mean to the industry Time Inc. was about to enter: entertainment). Memories will serve us differently. But Petersen’s history is well-researched and well-analyzed.

This has inspired me to scan and post the genesis documents for Entertainment Weekly. Here is my original 1984 memo proposing the magazine (with a few updates for resubmission in 1986). Here, too, is the rejection from on high. The magazine finally started six years after I first proposed it.

I teach EW as a case most terms at the start of my entrepreneurial journalism class at CUNY, so I keep the documents around (I specifically got permission to keep the launch documents when I stormed out of EW). There’s more where these came from.

EW proposal

The right to remember, damnit

A reporter asked me for reaction to news that Google has put up a form to meet a European court’s insane and dangerous ruling and allow people to demand that links to content they don’t like about themselves be taken down. Here’s what I said:

This is a most troubling event for speech, the web, and Europe.

The court has trampled the free-speech rights not only of Google but of the sites — and speakers — to which it links.

The court has undertaken to control knowledge — to erase what is already known — which in concept is offensive to an open and modern society and in history is a device used by tyrannies; one would have hoped that European jurists of all people would have recognized the danger of that precedent.

The court has undermined the very structure of Sir Tim Berners-Lee’s invention, the link — the underpinning of the web itself — by making now Google (and next perhaps any of us) liable just for linking to information. Will newspapers be forced to erase what they link to or quote? Will libraries be forced to take metaphoric cards out of their catalogs?

The court has, ironically, made Google only more powerful, making it the adjudicator of what information should and should not be found. The court has also given Google ludicrous parameters — e.g., having to decide what is relevant to what; relevant to whom; relevant in what context?

We don’t know how this order will be implemented by the various search engines. One question is what right of notice and appeal a delinked site will have.

If this process is public, as it should be, then doesn’t that have the potential to bring even more attention to the information in dispute? Another question is whether content will be made invisible in Europe but will still be visible — as I hope it will be — in the rest of the world, where the European court has no authority. Will this then allow others to compare search results and make the banned information only more visible? In the end, has the court assured a Streisand effect — or, as the comedian John Oliver said on his HBO show, the one thing that is known about the Spaniard who brought this case is the thing that he does not want known.

Further, what of search engines and sites that have no European offices and thus the court has no authority over them? If they refuse to delink on demand will the court ban these sites for European view?

Finally, I am concerned about the additive effect of this ruling on Europe’s reputation as technophobic or anti-American. Add to this especially various actions in Germany — government officials demanding a “Verpixelungsrecht” (a right to be pixelated) in Google Street View despite the fact that these are images taken of public views in public places; German publishers ganging up on Google to strongarm politicians into passing a law limiting the quoting of snippets of content and now threatening to break up Google — in addition to similarly head-scratching moves in France, Italy, and elsewhere. Is Europe a place where any technology company or investor will choose to work?

You ask about Eric Schmidt and David Drummond cochairing the advisory committee. That is a clear indication of how profound and dangerous this situation is in Google’s view. It so happens I was in Mountain View two weeks ago speaking to the all-hands meeting of Google’s privacy teams and I can tell you they were shocked at the ruling. I also said much of what I’ve said to you there. I am appalled by this ruling. [As a matter of disclosure, Google paid my travel expenses but I have no business relationship with Google.]

Calling all entrepreneurial journalism profs

If you teach or soon plan to teach entrepreneurial journalism, the Tow-Knight Center for Entrepreneurial Journalism — my colleague Jeremy Caplan and I — invite you to attend a day-long summit at the CUNY Graduate School of Journalism in New York on July 10.

Our small, new field has grown like weeds. Dozens of journalism schools and foundations are now training and supporting the next generation of media leaders to report, edit, close sales, capture audiences, and run businesses. Our goal is to enable those of you who’ve pioneered these efforts — as well as those just getting into the field — to share best practices and common challenges.

We plan to invite an expert from entrepreneurial education in another field to speak, and ask some of our former students to discuss their experience starting up companies. But on the whole, the day is about your lessons learned, concerns, and needs — and to see whether and how we should collaborate as a group in the future.

Please register here if you plan to attend, or aren’t sure yet, but want to reserve a place. If you cannot attend, we will plan to stream the event and actively involve remote participants in the discussion. Watch this space.