Posts about distribution

Next to the gallows: Newspaper coupons

The best reason that some newspapers have to stay in print — at least a few days a week — is to distribute coupons and circulars (free-standing inserts, or FSIs, in the jargon). But as newspaper circulation declines below critical mass and as digital means of delivery of coupons and bargains catch on, the FSI line of business is the next to fall over the cliff for papers.

Rick Edmonds at Poynter writes about an NAA study that says the coupon business for newspapers is under siege. Meanwhile, Coupons.com brags that the growth of digital coupons is surging; printouts of deals at Coupons.com alone equaled $858 million last year. This comes as coupon use in America is growing overall for the first time in 17 years; we redeemed 3.3 billion last year, a 27% jump over 2008. Sunday coupons still account for the lion’s share of the business, but online is growing fast.

Newspapers defined themselves and their barrier to entry by their production — we already know what is happening to paper — and distribution — now we see what is to become of that.

It’s not just coupons that are affected. When I visited the very smart people at Best Buy a few months ago, I came to see that their circular is media as well; it provides value to manufacturers and consumers. Large retailers, like manufacturers, need effective distribution and as newspapers shrink, they will need to look at alternatives.

Is that the Postal Service? Well, they, too, are losing a fortune (more on that soon). Most of what the Post Office delivers today is advertising and I certainly don’t want to subsidize that with my stamps or taxes, so I’d expect advertising postal rates to rise, which will also put pressure on coupon and circular advertisers, motivating them even more to find ways to make digital work.

The problem with digital coupons and circulars has been portability: the extra and inconvenient step of printing out supresses use. But now enter the smart phone and the long-fabled day of the smart, mobile coupon may actually arrive. If I can check into a flight with a scan of my iPhone shouldn’t I be able to buy toilet paper with it? The value of that redemption is greater for the advertiser because (a) it may cost them nothing — no need to use media as a middleman if I receive deals directly and (b) the advertiser will know a lot more about me; that data itself is terribly valuable and (c) this allows the advertiser to target with far greater relevance, which (d) is better for us customers.

I think there’s a short-term opportunity here for someone to craigslist (as a verb) the newspaper distribution business, creating the means to deliver in key markets with greater reach and better Zip code targeting, drastically undercutting both newspapers and the Postal Service. As coupons do move to mobile and digital, this business will go away, too, but it won’t have much in the way of shut-down cost so there’s a way to disrupt the last dying ember of an industry and get some nice cash flow. If I were a coupon company — and News Corp. is — I’d do it myself.

The point: expect the coupon and FSI business to head over a cliff and with it, another important revenue stream for print papers, giving them more reason to abandon print.

ONE MORE THING: I’ve told this first part of this story before: When I was Sunday editor of the NY Daily News and we came back from a strike, we didn’t have coupons because Murdoch was feuding with our new owner, Robert Maxwell. When they did return, our circ went up 100k. Those people were buying coupons more than the paper.

Now the second part: I later proposed to a publisher starting a coupon magazine that would be sold at supermarket checkout. Yes, I said sold. I wasn’t going to charge readers for content. I was going to charge them for advertising. Didn’t happen, sadly. Still think it was a good idea.

Hyperdistribution

The newspaper industry should be sobered by Martin Langeveld’s calculations, based on the Newspaper Association of America’s misplaced bragging about Nielsen internet data, that only about a half one one percent of time spent online is spent on newspaper sites.

It is clear that if journalists want to be supported – let alone have impact and influence and find their days worthwhile – they need more people to spend more time with news. I believe they should be doing the opposite of what is being suggested in many quarters: clamping down controls to try to fight aggregators and search engines, threatening to build pay walls, consolidating content into destinations they’d have to work harder to get people to visit.

Right now, news organizations should be trying to reach more people and engage with them more deeply. They should seek hyperdistribution.

Since when did it become OK for media people to shrink their audiences? Since they gave up on the ad model, that’s when. But I am not ready to surrender to the idea that advertising, which has supported mass media since its creation, is over. Yes, ad rates are lower; welcome to competition. That’s all the more reason why publishers must attract larger audiences publics – make it up on volume – as well as more targeted and valuable communities.

In my presentation at the Aspen Institute on CUNY’s New Business Models for News Project, I listed some of these opportunities, even though we didn’t build them into our first models because we wanted a conservative base case. Next we are building blow-out models incorporating these means, many built on the principles of the link economy:

* Reverse-syndication. We suggest that the new news organization (NNO) we envision in our ecosystem can create highly targeted content that can be distributed on the sites of other members of the network. So, for example, a new news org could create voting guides for every state assembly member and all the hyperlocal bloggers in the state could offer them to their readers. This content could carry both metro and hyperlocal advertising sold by and benefiting both sites. It is in the NNO’s interest to help these bloggers succeed. Thus they should collaborate on creating and distributing everything from news to calendars to functionality.

In the link economy, value is created by he who creates content and she who delivers audience. So in this networked ecosystem, large players and small will find ways to mutually create and share in more value.

* The embeddable paper. Once you embrace hyperdistribution, then you’ll find new and simple ways to get readers to become distributors. In this post I suggested that we should enable any content to be placed in YouTube-like players that carry brand, advertising, states, and links.

Lo and behold, Silicon Alley Insider just made it possible to embed its stories on this blog or anywhere. In fact, you don’t need to follow that link above; you can read the story below (and I imagine it won’t be long before there’s an ad there, along with the Insider’s branding, links, and data collection).

* API The New York Times has an API (application programming interface) enabling developers to incorporate its headlines, driving traffic to NYTimes.com. NPR and the BBC have APIs that enable others to use more content; as public broadcasters, their goal is simply broader distribution. The Guardian’s API offers full content but requires developers to join its ad network. Thus the Guardian wants to get its journalism into the fabric of the web, as they put it, and support it at the same time. Fingers crossed that it works.

* Specialization. One-size-fits-all news was a product of our means of production and distribution and a very small number of topics aside, that just won’t cut it anymore. Whether by geography, interest, or community, news must become far more specialized. In the link economy, this is how content rises in search to be discovered and it is how value is added with advertising.

Specialization sounds like a way to decrease, not increase audience but with the efficiencies specialization enables, many more publics can be served more deeply and each is bound to be more engaged. In our New Business Models for News projections, we ended up – to our surprise – with an equivalent number of journalists working in our hypothetical ecosystem when compared with the legacy newsroom, but these journalists were all covering much more specialized topics in much greater depth, creating more journalism for more communities than before. Specialization becomes a way to grow.

* Social engagement. In our NewBizNews models, we projected 12 page views per user per month because this is in line with existing news sites and thus, a conservative assumption. But it’s also a shameful assumption.

Local news networks that are truly a part of communities – owned and operated by their communities – will surely have much higher engagement. The fact that Facebook – which brings communities elegant organization, just as newspapers endeavor to do – gets hundreds of pageviews per month per user should be a lesson and model for news networks.

If news organizations – pardon me – asked what Google, Facebook, Twitter, and craigslist would do, they would define themselves as platforms more than content creators and controllers. They would act as networks rather than destinations. Once again, this gives them not only distribution and engagement but efficiency.

I have stood in and before no end of conferences when I or someone else recalls what that student said in The New York Times said a year ago: “If the news is that important, it will find me.” Waiting for her to come to our site won’t work – and it especially won’t work if, once a peer links her to our site, she finds a wall. No, we have to take news to her.

At Aspen, Google’s Marissa Mayer told the assembled news machers that they have to find ways to insinuate their content and value into our own hyperpersonal news streams. In other words: This ain’t about getting people to come to your home pages anymore.

You can bet if Mayer is thinking this way, so is Google and so it will find ways to consolidate information about sources across these new means of distribution. It’s still in Google’s interest to tap the tree for Googlejuice. So I say we cannot waste a moment finding more ways to get more people to distribute and engage with news.

The audience network

CBS continues to extend its notion of the audience as the network, today announcing a bunch of deals with social services to enable and encourage embedding of their clips — among them WordPress, Ning, and Voxant. I’m not sure, for example, what a deal with WordPress means; I can already embed clips from a number of CBS’ distributors. But it’s the thought that counts. And that thought, to repeat the words of Quincy Smith, president of CBS Interactive: “We can’t expect consumers to come to us. It’s arrogant for any media company to assume that.”

The head of one of these distributors, Voxant, just emailed me with his success stories. Voxant enables embedding and pays the embedders. Jeff Crigler emailed (and note that as far as I’m concerned, he misuses the term ‘mash’ — which means to remake and manipulate — when he really means ‘embed’):

I know you have been following this long-tail syndication stuff. We’ve had an interesting couple of months at voxant. I think its kind of relevant to how ultimately new media gets its legs.

About a month ago we signed the NHL deal and got their hockey videos up in TheNewsRoom.com Three weeks ago we started blogging about it and sending very personalized emails to some of the top hockey blogs and small web sites. Then an amazing thing happened. One of the hockey blogs came to TNR and mashed [that is, embedded -ed] some clips. then a couple of others…. then a swarm of others. All of the sudden we are driving gobs of traffic to hockey sites who have grabbed our game highlights and “hockey fights” videos from the news room. The echo chamber actually started working. Before you turn around a third of our traffic was hockey stuff and we had bloggers and web sites coming back on a daily basis to get the latest game highlights.

So, for demonstration purposes, here’s a CBS clip via Voxant. This is one of those ridiculous you-could-write-them-before-you-see-them stories TV loves to do: Amercians are taking to the road this holiday weekend… gas prices are higher/lower… the triple-A says…. yadayadayada. Note that I just made fun of the segment and got paid for it. But that’s good: you want to be in the midst of the conversation, sometimes starting it.