Patches

Tim Armstrong says he will close, sell, or find partners for 300 local Patch sites to reach profitability.

I have a fourth option, Tim: Invest. Set up independent entrepreneurs — your employees, my entrepreneurial graduates, unemployed newspaper folks — to take over the sites. Offer them the benefit of continued network ad sales — that’s enlightened self-interest for Patch and Aol. Offer them training. Offer them technology. And even offer them some startup capital.

You could end up better off than you ever were by being a member of an ecosystem instead of trying to own it. It can grow faster — just look at how Glam became gigantic: by supporting a network.

I still believe in hyperlocal. You’ve always believed in hyperlocal. I don’t want to see retrenchment of Patch give the naysayers as chance to nya-nya us.

So please consider another path: shrink the company but grow the network.

Der Spiegel & the fate of newspapers

Spiegel Online asked me to join a conversation about the fate of newspapers, prompted by Axel Springer’s sale of its local publications. The German translation is here. And here is the English text:

dertagGutenberg’s magnificent machine industrialized information and communication. That has lasted almost 600 years. Now the internet forces us to question every industrial-age assumption about every business, including news.

Journalists have been gatekeepers and lecturers who synthesized information into narratives that they controlled, their work subsidized by bundling news into publications that also delivered nonnews — entertainment, sport, lifestyle — which drew audience and advertising. It was a lovely oligopoly while it lasted. But it is over. The Onion has written print’s obituary.

Now who says that news must come on paper, in articles, once a day, the same for all, and from a newsroom, let alone from a journalist? Are we in the content business, producing and protecting a scarce commodity? Or shouldn’t we come to see news as a service whose outcome is not products on paper or pages on screens but instead informed people and communities?

The internet gives journalists unprecedented opportunities to reimagine our relationships with the public we serve; the forms that news can take; and the business models that can support it.

Relationships: Using the net and its services — Google, Facebook, Twitter, YouTube, Instagram — as platforms, the public can now share what they know and what they witness on their own, without mediators — that is, without media. But there is still a need for journalists, perhaps greater than ever. Journalists must add value to that flow of information, confirming facts, debunking rumors, finding sources, adding context and explanation, and, most importantly, asking the questions and getting the answers that are not in the flow — that is: reporting.

News organizations can also act as platforms for communities to share information. Take, for example, Waze, the app Google is trying to buy that enables countless commuters to automatically and inexpensively share traffic anywhere, serving individuals better than mass media — radio reports — ever could. Waze also learns where we live and work. Does your newspaper know that about you?

Forms: Just as news publications are being unbundled, so are news articles. The single narrative is being broken up into separate assets: what’s new may come from Twitter; background from Wikipedia; details from a database; quotes from YouTube; explanation from a graphic. This allows each of us to traverse a news event in our own way. Are journalists still storytellers? Only when that’s the best way to impart information.

Our business models: Ah, here’s the hard one. We cannot preserve old models in a new reality. Just because we used to sell access to content and had pricing power over advertising, there is nothing to say that is our right to continue.

In our new balance sheet, the net brings greater efficiency and considerable cost savings, eliminating manufacturing and distribution costs and enabling specialization and collaboration: Do what you do best and link to the rest, I always say.

Our value, I believe, will come from building relationships with people as individuals, no longer as a mass. That is the core of Google’s business model: delivering relevance and recognizing value because it knows what each of us is looking for, where we are, and what we want. Those are signals Google is equipped to gather, analyze, and act upon. Media’s content generates signals about interests and needs. So we in media must learn to use that as the basis of building new relationships and extracting greater value from them.

It is my fondest hope that Amazon founder Jeff Bezos will bring his expertise in building relationships and relevance to his purchase of The Washington Post, turning it from a content factory into a platform and information service for a wiser Washington.

I loved newspapers. My basement is filled with clips from them, so proud am I still of my bylines in print. I loved magazines. I started one and every week bought them by the pound. Whenever I’ve foretold the death of print, someone will say, “But people like paper.” Yes, I respond, and people used to like horses. But horses were economically (and environmentally) unsustainable and we moved on.

So move on. What matters isn’t newspapers. What matters is news and journalism and how they can help communities organize their knowledge to better organize themselves. That is my definition of journalism.

Jeff’s Post problem

One issue I’m surprised I haven’t seen discussed regarding Jeff Bezos’ acquisition of The Washington Post is what his tenure will mean to local advertisers.

They don’t like him. He’s helping putting them out of business.

Haven’t you seen: retail is in the tank. Stores have become showrooms for Amazon’s sales. Looking at the golf club? Go to the pro shop and try it out and learn about it and get advice about it, then go to Amazon and buy it for a better price.

Amazon is going into local markets with experiments in same-day delivery. He will do that in competition with local merchants.

eBay, on the other hand, says it will serve local merchants and help them with same-day delivery and online sales. Google is looking to test same-day local delivery and I would imagine it, too, would work with local businesses, who are its advertisers as well.

The New Republic wondered whether Bezos wants The Washington Post’s delivery trucks. I doubt that. Though as I remember, the Post was one of the first papers in the country to shift from large-scale delivery to small-scale (trucks to station wagons), the system is still not set up to do what a UPS truck does.

So how will Bezos finesse this? He’s not big on finesse, Jeff. He could come and find ways to reassure local advertisers. He could involve them in his local delivery scheme, just as he handed over his sales and technology platforms to more merchants. He could shrug and not worry about retail advertising since he’s killing retail anyway.

As with all speculation about the Bezos era in journalism, we’ll just have to wait and wonder.

Hot off the presses

Screenshot 2013-08-05 at 6.25.08 PM

Some quick thoughts on Jeff Bezos’ purchase of the Washington Post:

A reporter asked me whether this was “an act of philanthropy.” Probably yes, but I hope it is much more than that. I am glad Bezos is using his wealth to save a great and necessary American institution. But I hope and pray the real value he brings is his entrepreneurship, his innovation, his experience, and his fresh perspective, enabling him to reimagine news as an enterprise.

I’m ready for folks to cry for joy that Bezos knows how to sell content. He’ll know how to build pay walls, damnit! But I don’t think that’s his key value here. He knows how to sell and deliver unique not commodity content: entertainment mostly.

No, Bezos’ key competence is in building relationships. This is wishful thinking on my part, as I have been arguing that we in journalism need to stop thinking of ourselves as manufacturers of a mass commodity called content and start understanding that we are in a service business whose real outcome is informed individuals and communities. Thus we must be in the relationship business.

I have been arguing with newspapers lately that they must gather small data about their individual users — where they live, where they work, what their key interests are — so they can serve people with greater relevance and value. I hope that skill — building profiles and using them to improve relevance — is the first that Bezos brings to the Post.

I have one fear of Bezos: his secrecy. A news organization must be open (there I’m a disciple of the Guardian’s Alan Rusbridger). I also want to see innovation and experimentation at the Post done in the open so the rest of the industry can benefit from it. Then perhaps Bezos can save more than one newspaper.

I do trust the Bezos understands the value of the Post and the necessity of — using my CUNY dean’s phrase — journalism’s eternal verities. I also trust that Don Graham would not have sold his family’s jewel to anyone who did not understand that.

Now mind you, Bezos also invested in Henry Blodget’s Business Insider. I’m a fan of Henry and what he has done there, but he is controversial in the halls of journalism schools. Bezos praises the Post for waiting to get things right. Henry is rather quicker on the trigger. I’m glad Bezos has an interest in both models; I think each can learn from the other.

Bottom line: I’m hopeful.

I am left with tremendous admiration for Don Graham, whose family not only built the Washington Post into its glory and protected it from political pressure to serve the people. Today, Don Graham made no doubt the toughest and bravest decision of his life: He admitted that he did not have the strategy to save his newspaper so he found someone he believes will. That takes courage.

Media, left out of the relationship

Note who’s missing in Tanzina Vega’s New York Times story today about the monster merger of ad agencies Publicis and Omnicom.

Media — TV, radio, magazines, newspapers, online — are nowhere to be seen. This merger, they all say, is about the ad agencies joining together to defend at the 11th hours against the real behemoth in the business, Google, as well as Facebook and Twitter. And the battleground is Big Data (when did that become a proper noun?) — that is, knowing about people, or having a relationship with them.

I’ve been arguing that media should stop thinking they’re in the content business and start believing they are in — or should be in — the relationship business. But we don’t know jack about people. We see people as a mass. We lived for a glorious century by the myth of mass media: that all readers see all ads so we can charge all advertisers for all readers. Thus we simply wanted *more* readers (or unique users, whatever you prefer to call us). Media companies are proud when they learn our email addresses but, of course, that is nothing but an excuse to spam us. My email address says *nothing* about me.

Media companies could know a great deal about us as individuals. Our content interests are a good signal — Google understands that and so does the NSA (says prior whistleblower Thomas Drake, “content is gold for determining intent”). But we in media have no good means to gather, analyze, act on, and exploit that signal beyond simple behavioral targeting.

I argue that media companies should be able to get people to build the trust to reveal themselves because media companies can give them value in return. Provide me traffic help and you’ll learn where I live and work and then you can target your content and advertising to my locale, delivering greater relevance and value. Right?

No. Google, Facebook, and Twitter listen to our signals. Omnicom and Publicis realize the value of those signals. They all understand the worth of relationships. And what do we do in media? We put up paywalls and scream about copyright. Garg.

LATER: Here’s Om Malik’s take on the merger. I agree that the net deflates.

Since 1920, US advertising industry revenues have hovered between 1 percent to 3 percent of the US gross domestic product. This pie is now shared between television, newspapers, magazines, radio, cable with Google, Facebook, Twitter, Yahoo and thousands of other digital outlets. Of course, Internet often brings measurability, targeting and interactivity — which leads to a sort of deflationary pressure on industries that have traditionally benefited from ambiguity. Stock brokerages and travel industry were the first two industry to be baffled by this new reality.

All hail Justin Smith

When people ask me for someone smart who’s doing innovative and successful things in magazines, I scan the known world and always end up at the same place: Justin Smith, who just announced that he is leaving Atlantic Media to become CEO of Bloomberg’s media group.

I’ve known Justin since he launched The Week in the U.S. and I’ve admired his work nonstop. He is rather unsung so it’s worth recounting some of his successes thus far:

* At The Week, he launched a *weekly* magazine with a *total* staff of 24 — which is fewer than the old butler staff at Time. The concept for The Week came from the U.K. It was the original news curator, taking advantage of the oversupply of news we still have. That wasn’t his. But his method for launching the magazine was new: He created an ad scarcity with limited pages to sell. He refused to waste a fortune on fees and returned copies on newsstands, selling it only in some bookstores. He launched essentially a subscription-only magazine and he let that grow organically, by demand, rather than bribing people to subscribe with costly sneakerphones. He thus didn’t spend a fortune on marketing.

* At Atlantic, Justin took a dying brand and rather than milking it and devaluing it with cheap stunts as others are, he increased its value by turning it into an online brand that happened to have a magazine (how cool). He understood that what appeared under the brand online would have little to do with the magazine and so he invested in new content. That included investing in writers as brands, for he recognized the attention and audience they could bring — thus Andrew Sullivan’s sojourn there on his Paul Theroux-like train tour of the internet.

* He had the guts to create new brands, starting with Quartz, relying on his experience starting a blog company outside of his job. He had the vision to invest in smart editorial talent and the patience to let them build.

* Like a few other publishers — Condé Nast included — he saw that he had to take on the role of an advertising agency, no longer just selling space on a page, print or digital, but offering creative and marketing services to advertisers. Yes, there was that stumble with Scientology, an important object lesson and warning for everyone dancing with the devil in mixing selling and informing under one brand. But all in all, his real lesson to the industry is to change the relationship of media to marketer. You can see him talking about this in a discussion he, John Paton, and I had at CUNY sometime ago — the video is below.

* LATER: Oh, yeah, I forgot: He also made a strategy at both companies at using events wisely as a way to brand the publications as a convener of important conversations and as a way to bring in sponsorship revenue — a model other media properties are just beginning to mimic.

* AND ONE MORE THING: He made Atlantic Media profitable.

Bloomberg can use him. It is a powerhouse, the one journalistic organization that is hiring — often our CUNY students, I’m happy to report — like no one else. It has a pay wall that really works with its truly valuable terminals (that don’t offer commodity information; they sell speed). It rescued BusinessWeek to own a consumer brand. It started an opinion site. It dabbles in TV.

What Justin can bring, I think, is much more consumer attention to the company. There are lots of very smart opinion makers writing for Bloomberg but I don’t see them in the conversation. There’s a considerable investment in video but I don’t see it embedded or talked about enough. There is much good journalism but to reach consumers it could stand to have a voice. And with a stronger brand and much technological muscle, I’m confident that Justin can bring a torrent of new advertising attention and revenue to the company.

It is a brilliant hire. I’m glad to see him be able to show off his stuff on a more visible stage.

Digital First and the Future of News from CUNY Grad School of Journalism on Vimeo.

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Google’s TV

chromecast

Google just demoted your television set into a second screen, a slave to your phone or tablet or laptop. With the $35 Chromecast you can with one click move anything you find on your internet-connected device — YouTube video, Netflix, a web page as well as music and pictures and soon, I’d imagine, games — onto your big TV screen, bypassing your cable box and all its ridiculous and expensive limitations.

Unlike Apple TV and Airplay, this does not stream from your laptop to the TV; this streams directly to your TV — it’s plugged into an HDMI port — over wi-fi via the cloud … er, via Google, that is. Oh, and it works with Apple iOS devices, too.

I’m just beginning to get a grasp on all the implications. Here are some I see.

* Simply put, I’ll end up watching more internet content because it’s so easy now. According to today’s demonstration, as soon as I tell Chrome to move something to my TV, the Chromecast device will sense the command and take over the TV. Nevermind smart TVs and cable boxes; the net is now in charge. There’s no more awkward searching using the world’s slowest typing via my cable box or a web-connected TV. There’s no more switching manually from one box to another. If it’s as advertised, I’ll just click on my browser and up it comes on my TV. Voila.

* Because Google issued an API, every company with web video — my beloved TWiT, for example — is motivated to add a Chromecast button to its content.

* Thus Google knows more about what you’re watching, which will allow it to make recommendations to you. Google becomes a more effective search engine for entertainment: TV Guide reborn at last.

* Google gets more opportunities to sell higher-priced video advertising on its content, which is will surely promote.

* Google gets more opportunities to sell you shows and movies from its Play Store, competing with both Apple and Amazon.

* YouTube gets a big boost in creating channels and building a new revenue stream: subscriptions. This is a paywall that will work simply because entertainment is a unique product, unlike news, which is — sorry to break the news to you — a commodity. I also wonder whether Google is getting a reward for all the Netflix subscriptions it will sell.

* TV is no longer device-dependant but viewer-dependant. I can start watching a show in one room then watch it another and then take it with me and watch on my tablet from where I left off.

* I can throw out the device with the worst user interface on earth: the cable remote. Now I can control video via my phone and probably do much more with it (again, I’m imagining new game interfaces).

* I can take a Chromecast with me on the road and use it in hotel rooms or in conference rooms to give presentations.

Those are implications for me as a user or viewer or whatever the hell I am now. That’s why I quickly bought three Chromecasts: one for the family room, one for my office, one for the briefcase and the road. What the hell, they’re cheap.

Harder to fully catalog are the implications for the industry — make that industries — affected. Too often, TV and the oligopolies that control it have been declared dead yet they keep going. One of these days, one of the bullets shot at them will hit the heart. Is this it?

* Cable is hearing a loud, growing snipping sound on the horizon. This makes it yet easier for us all to cut the cord. This unravels their bundling of channels. I’ll never count these sharks out. But it looks like it could be Sharknado for them. I also anticipate them trying to screw up our internet bandwidth every way they can: limiting speeds and downloading or charging us through the nose for decent service if we use Chromecast — from their greedy perspective — “too much.”

* Networks should also start feeling sweaty, for there is even less need for their bundling when we can find the shows and stars we want without them. The broadcast networks will descend even deeper into the slough of crappy reality TV. Cable networks will find their subsidies via cable operators’ bundles threatened. TV — like music and news — may finally come unbundled. But then again, TV networks are the first to run for the lifeboats and steal the oars. I remember well the day when ABC decided to stream Desperate Housewives on the net the morning after it aired on broadcast, screwing its broadcast affiliates. They’d love to do the same to cable MSOs. Will this give them their excuse?

* Content creators have yet another huge opportunity to cut out two layers of middlemen and have direct relationships with fans, selling them their content or serving them more targeted and valuable ads. Creators can be discovered directly. But we know how difficult it is to be discovered. Who can help? Oh, yeah, Google.

* Apple? I’ll quote a tweet:

Yes, Apple could throw out its Apple TV and shift to this model. But it’s disadvantaged against Google because it doesn’t offer the same gateway to the entire wonderful world of web video; it offers things it makes deals for, things it wants to sell us.

* Amazon? Hmmm. On the one hand, if I can more easily shift things I buy at Amazon onto my TV screen — just as I read Kindle books on my Google Nexus 7 table, not on an Amazon Kindle. But Amazon is as much a control freak as Apple and I can’t imagine Jeff Bezos is laughing that laugh of his right now.

* Advertisers will see the opportunity to directly subsidize content and learn more about consumers through direct relationships, no longer mediated by both channels and cable companies. (That presumes that advertisers and their agencies are smart enough to build audiences rather than just buying mass; so far, too many of them haven’t been.) Though there will be more entertainment behind pay walls, I think, there’ll still be plenty of free entertainment to piggyback on.

* Kids in garages with cameras will find path to the big screen is now direct if anybody wants to watch their stuff.

What other implications do you see?

Demonstrating Google Glass

At the Guardian’s Activate conference in London, which I emceed, I brought mirth with a demonstration of Google Glass. Thank goodness they edited out my many unsuccessful attempts to get the camera to take a picture of a QR code on my phone so I could pair Glass with it and show the audience what I was seeing on the big screen. Much whiplash was involved. But then I show a few functions and let someone in the audience try them out and come to a few conclusions:

First, Glass really brings three things:
1. The ability to capture what you see easily.
2. The ability to get instructions, including directions.
3. The ability to get updates and alerts.

I’m not sure all those things will need to be offered in the same device. The latter two may be better delivered as audio. We’ll see.

I also raised the spectre of a post-page media device to a room of people who devote themselves to making pages of content.

Bottom line so far: Yes, it’s awkward. I’m not sure how useful it is today. But it’s a Newton. It’s the germ of something better that will come… I think.