Posts about newbiznews

Mobile’s not the next big thing, just a path to it

The Knight Foundation’s News Challenge just announced its next theme: mobile. And that’s a good thing because news organizations have been all-too pokey in figuring out how to serve people in this venue.

When Arthur Sulzberger announced his hiring of a new CEO, the BBC’s Mark Thompson, he said, “Our future is on to video, to social, to mobile.”

With respect, I’m not so sure. Saying that mobile is what comes next means, I fear, that we’re going to take what we do in media — making content, selling audiences — and figure out how to keep doing it on video, in social, and in mobile.

But that’s not what we really do.

Is Google just doing mobile next? Google has a mobile operating system. It has a Google-branded phone and tablet. It bought a phone manufacturer. It made apps for all its services for mobile. Even so, I don’t think Google is becoming a mobile company. For Google, mobile is a tool, a path to improve its real business.

What is its real business? The same as media’s business should be: Relationships — knowing people and serving them better because of what it knows about them.

With newspaper companies, I’ve been arguing that they should abandon page views as a metric because it has been a corrupting influence that carried on the old-media myth that the more “audience” you have the more you can charge advertisers and the more money you’ll make. The pursuit of page views has led news organizations to draw traffic — people — they cannot monetize (because they come from outside the market or come just once from search or Drudge). And the insistence that they remain in the content business has led news organizations to believe they must still sell that content; thus, pay walls.

Google views content — our content — as a tool that generates signals about their users, building relationships, data, and value. Google views mobile as a tool that also generates signals and provides opportunities to target content and services to the individual, where she is, and what she’s doing now (thus Android’s Google Now).

We in news and media should bring those strands together to knit a mobile strategy around learning about people and serving them better as a result — not just serving content on smaller screens. Mobile=local=me now. We should build a strategy on people over content, on relationships.

That’s what mobile means to me: a path to get us to the real value in our business. For you folks cooking up ideas for the Knight News Challenge (and for you, my new neighbor, Mr. Thompson) I suggest starting there.

P.S. When I tweeted a link to this post, I said the lesson is, “Mobile is a path not a destination.” Felix Salmon thought a fake me — or Deepak Chopra — had taken over my account. No, I just want that on a bumpersticker. I’ll license rights to T-shirts and hats.

#nbcfail economics

Reading the #nbcfail hashtag has been at least as entertaining as much of NBC’s coverage of the Olympics. It’s also enlightening — economically enlightening.

There’s the obvious:
* The people formerly known as the audience have a voice and boy are they using it to complain about NBC’s tape delays of races and the opening ceremonies, about its tasteless decision to block the UK tribute to its 7/7 victims, and about its commentators’ idiocies (led by Meredith Vieira’s ignorance of the inventor of the web; they could have used their extra three hours to enlighten her).
* Twitter is a gigantic spoiler machine. It would be nearly impossible to isolate oneself from news of results because even if you don’t read Twitter or Facebook or go to the net, someone you know, someone you run into will. Information can’t be controlled. Amen.
* We in the U.S. are being robbed of the opportunity to share a common experience with the world in a way that was never before possible.
Those arguments have all been made well and wittily on #nbcfail.

The counterargument has been an economic one: NBC has to maximize commercial revenue, which means maximizing prime time viewership, to recoup the billions paid for the rights to broadcast, billions that pay for the stadiums and security and ceremony. The argument is also made that NBC’s strategy is working because it is getting record ratings.

But there’s no way to know whether airing the Phelps race or the opening ceremonies live on TV would have decreased or increased prime-time viewing. Indeed, with spoilers everywhere, viewing is up. I can easily imagine people watching the Phelps defeat live tweeting their heads off telling friends to watch it in prime time. I can imagine people thanking NBC for curating the best of the day at night and giving folks a chance to watch the highlights. I tweeted: “I’m waiting for NBC to take credit for idea Twitter helps build buzz & ratings for tape-delayed events.” (Which led Piers Morgan’s producer, Jonathan Wald, to take joking credit and then the executive producer of the NBC Olympics, Jim Bell, to offer it. To his credit, Bell has engaged with at least one tweeted suggestion.)

If NBC superserved its viewers, the fans, wouldn’t that be strategy for maximum audience? The BBC is superserving its viewers. I went to TunnelBear so I could sample what the BBC is offering on the air and in its iPlayer — which, of course, we can’t use in the U.S. — and it’s awesome. But, of course, the BBC is supported by its viewers’ fees. So the argument is that the BBC serves viewers because they’re the boss while NBC serves advertisers because they pay the bills.

I still don’t buy it. I don’t want to buy it, for that pushes media companies to put all they do behind walls, to make us pay for what we want. I still see a future for advertising support and free content. I still believe that if NBC gave the fans what they wanted rather than trying to make them do what NBC thinks it wants, NBC could win by growing audience and engagement and thus better serving sponsors. I ask you to imagine what Olympics coverage would look like if Google had acquired the rights. It would give us what we want and make billions, I’ll bet.

The problem for NBC as for other media is that it is trying to preserve old business models in a new reality. To experiment with alternatives when billions are at stake is risky. But so is not experimenting and not learning when millions of your viewers can complain about you on Twitter.

The bottom-line lesson for all media is that business models built on imprisonment, on making us do what you want us to do because you give us no choice, is no strategy for the future. And there’s only so long you can hold off the future.

The bottom line for Olympics fans is that, as Bill Gross pointed out, much of the blame for what we’re seeing — and not seeing — falls to the IOC and the overblown economics of the games. There is the root of greed that leads to brand police who violate free speech rights in the UK by chilling use of the innocent words “2012″ and “games”, and tape delays, and branded athletes. This is the spirit of the Olympics Games? It is now.

The trouble with content

Yesterday, I got to speak about speaking with the speakers of the National Speakers Association in Indianapolis. How meta.

I was more controversial than I thought I’d be. For I suggested — and demonstrated — that speakers would do well to have conversations with the people in the room and not just lecture them. I said I’ve learned as a speaker that there is an opportunity to become both a catalyst and a platform for sharing. I talked about my wish to do a project built around events and conversation — process as product — with a book perhaps as an afterthought, a result. And I talked about testing a business model with Kickstarter that could help speakers and the people formerly known as the audience wrest back control of events from conference organizers and speakers’ agents.

Some liked what I said. Some didn’t. And even those who liked it said on Twitter and in the hall that it was disruptive and controversial.

When I went into the room to have a conversation with these speakers — Oprahing — I heard this from some of them: We create content. That content has value. Implicit in this: We don’t want to share the stage with the audience. And I would ask whether that means they don’t sufficiently value the audience and the wisdom it brings.

That is precisely what I have heard over the years from newspapers, magazine, and media people: We create content. We control content. It’s ours. Pay us for it. We don’t want to lose control of it by opening up.

This made me see this content worldview as a problem, a seduction.

If you think that all you do is create and sell content, then you box yourself in and cut yourself off from other opportunities, including acting as a platform for sharing knowledge. That’s the problem news organizations have had. Apparently, so do some speakers.

Now, of course, content can have value. But that’s a high bar to jump. It’s proving to be more and more difficult to extract that value. If you make a great movie or write a great novel or sing a great song, then that’s unique and I’ll agree that it has value (though, of course, it’s getting harder to get paid as much as you used to for those creations). Still, if what you do is unique and great, it’s possible. Hard, but possible.

News is not unique. That’s why my industry has gotten in such trouble holding onto the idea that it creates content. Period. The attention they used to hold captive is now free to roam anywhere, including to an abundance of free competitors. I’d warn speakers, too, that some of them could be replaced by a YouTube video or a Google+ Hangout, unless they embrace these threats as opportunities.

Oh, yes, there’s still a business in content. But it’s an increasingly difficult business to survive in. It’s a limiting business. It’s an expensive business. It’s a business with more and more competitors and more and more price pressure. It’s a business that still requires blockbusters but they are harder to come by. It’s a business in which the bar to success is constantly rising.

Are you *sure* you want to be in the content business?

Big news in Hyperlocaland

Debbie Galant, co-founder of Baristanet and the Queen of Hyperlocal, is moving to a new gig at Montclair State University, where she will share her experience and help nurture and grow the local news ecosystem of New Jersey. In short, she will spread her hyperlocal fairy dust over the Garden State. Baristanet continues under the strong and loyal local leadership of Liz George, who has been there almost from the start. The queen has left the building. Long live the queens.

I am personally delighted that Debbie is helping to spearhead this effort. I’ve been helping MSU and the Geraldine R. Dodge Foundation on the project since the foundation’s head (and my neighbor), Chris Daggett, and a group of other funders called a meeting of public and private media people, bloggers, funders, and other concerned parties two years ago in Newark to address the crisis in the state’s media. At that meeting, it was Debbie who suggested the structure of a co-op to serve the independent members of the state’s media ecosystem. It is fitting that she will now be working to build it.

What exactly this venture will do will take shape after Debbie embarks on what she calls a listening tour, talking to the members of the media ecosystem to see what they need and listening to others to see what it would take to make it grow and improve. Opportunities could include training (in media, journalism, and business); sharing content; collaborative projects; and services (technology? insurance?). What else?

MSU is a wonderful home for this effort. The university is starting a School of Communication and Media. Under President Susan Cole, working with Matthew Frankel and Jack Shannon there, MSU has already invited in NJTV to base its operations at the school. WNYC’s New Jersey arm, NJ Public Radio, will work out of there, as will other media organizations. As all these newsies — and students and faculty — work under one roof, it’s hoped that collaboration will blossom and New Jersey will benefit.

I see New Jersey as a magnificent opportunity to rethink and rebuild local news. I like to think of it as a blank slate: a huge and underserved market that can finally get the media it deserves. The Dodge Foundation, MSU, and WNYC have raised some funds for their endeavors. There’s more to be raised and much to be done. This is just the beginning.

I remember Baristanet’s beginning as one model for what can be done to improve news locally. More than eight years ago, when I still ran NJ.com, I held a meetup in a New Jersey coffeehouse to try to get folks to blog about their towns on our service. Debbie Galant, who’d been writing about blogs before she wrote them, was there. She thought blogging about a town was a great idea. “But why would I do it for you, Jeff?” she said. She was, as usual, right. So she started her own, Baristanet.

That blog has been an amazing success, covering Montclair and Maplewood with a strong local voice (and having fun while they’re at it) while innovating ways to serve local advertisers and earning enough to support the endeavor. Success became Baristanet’s burden as many others jumped in to compete in its not-at-all-metaphorical backyard: Aol’s Patch, for a time The New York Times’ The Local, not to mention the long-established weekly paper. Meanwhile, too many towns in New Jersey are still starved for coverage. Feast/famine. Now, I hope, Debbie can help spread the wealth to other towns and help others (like my entrepreneurial graduate, founder of ElizabethInsideout).

Success became a burden in another sense as many came knocking at Baristanet’s door for advice. I was frequently among them, asking Debbie to come speak to students and join conferences and help with the research we have done at CUNY on new business models for local news. Debbie would sigh because she was plenty busy serving Baristanet. But she was also plenty generous, always bringing her knowledge and experience to help others. Now that will be her job. Perfect.

I know that hyperlocal is a challenging model. There are questions about whether it scales (that’s the suspense of Patch). We need to do much more work on how to best serve local advertisers in effective and profitable ways (that’s our next wave of research at CUNY; more on that later this week). There’s no one more realistic about the challenges and opportunities than Debbie. So I salute her on her new endeavor. God’s work.

(Disclosures are in order: I worked for the parent company of NJ.com for almost a dozen years and I’m back now helping with its development. In the past, I was listed as an adviser to Patch, but that has always been informal. And I have a vested interest in improving New Jersey media. I live there.)

The (not so) daily news

I have more conflicts than a Louisiana politician when it comes to the news of the New Orleans Times-Picayune reducing its frequency from seven to three days a week: I was in charge of digital content in the parent-company division that started its sister site, NOLA.com; I worked on Advance’s Ann Arbor project; I was involved in the early stage of its Michigan project; and I’m working with Advance on another effort — though I am privy to nothing about New Orleans today. So take anything I say with a grain of salt the size of the Gulf of Mexico…. Still, I can’t not comment on the news.

Mathew Ingram and Ken Doctor will take you through the economic reality at work in New Orleans and Advance’s Alabama and Michigan markets: The cost of printing seven days a week is becoming unsustainable. It’s still profitable to print two or three days a week, not because those are the only days when news happens but because newspapers are still in the distribution business and those are the most lucrative — still-lucrative — days to distribute inserted and printed ads.

That could change again when and if (a) newspaper circulation falls below the critical mass needed to distribute coupons and circulars and (b) local advertisers become more savvy and finally move online themselves. Then printing and distributing paper will become even less profitable, even less sustainable. That’s when print could — mind you, I didn’t say “will” as I’m not predicting the form’s demise; I repeat, “could” — disappear.

By then, newspapers had better be ready. That is, they had better have become digital companies. That is the essence of the digital first strategy: become sustainable, successful online companies that can survive without (or with) print. And grow again from there.

That’s the process we’re witnessing here — that and a continuing cutback brought on by falling circulation and advertising revenue; not a new story, of course. This is a most difficult transition.

Guardian editor-in-chief Alan Rusbridger has been talking about this transition for years. Back in 2005, he talked about buying the last presses. Later, he talked about trying to move his newspaper over what he called the green blob — the great unknown that stands between declining print and ascending digital. That is the job of the editor and publisher today: to make that transition. Shifting content, staff, readers, and advertisers from print to digital is necessary. Improving digital is necessary. And rethinking print is necessary.

If profitable, I think there could continue to be a role for print. In the Guardian’s case, I’d propose that it follow the very successful model of Die Zeit in Germany and publish once a week as the Weekend Observer, turning the Guardian into an online-only, worldwide brand, which it pretty much already is. See, I’m not against print.

But we have to make print beside the point. Of course, it’s not the manufacturing and distribution we should care about preserving and advancing. It’s the journalism and service. It’s not the past we want to protect. It’s the future.

You can argue with the strategy undertaken by any newspaper company undergoing this difficult transition. But better a transition than the alternative.

LATER: Postmedia in Canada just announced that it, too, is cutting frequency, ending Sunday papers (which are thin like Saturday papers in the U.S.) in Calgary, Edmonton, and Ottawa. The National Post is suspending Mondays in the summer and looking at its schedule. The company is moving page production to a shared facility in Hamilton, Ont. Disclosure: I’m on the digital advisory board for Postmedia.

Mapping new opportunities in technology and news

At CUNY’s Tow-Knight Center for Entrepreneurial Journalism, we believe technology provides many still-untapped opportunities for news. So we commissioned Dr. Nicholas Diakopoulos to research and map that territory. He came back with a very good and readable paper and with an exercise/game to help media folks find that opportunity. We’re offering that game to journalism schools and media companies.

Here is Andrew Phelps’ report on the research at Niemanlab. See my longer post about the effort here; see Nick’s paper here as PDF, here on Scribd.

Online News Association members: Nick and my CUNY colleague Jeremy Caplan have volunteered to run brainstorming sessions at this year’s conference. So please vote for their session here. We’ll bring lots of games to give to participants. You can also email us to ask for them here (but — as with anything free — supplies are limited!).

Says Phelps: “The paper is high-concept but short, and everyone who wants to reinvent journalism should read it…. Breaking down the problems makes solutions a lot more attainable.” That’s the idea.

The importance of JOBS

The JOBS bill being signed by President Obama today is critical to the emergence and growth of the next generation of industries as ecosystems.

Those ecosystems are made up of three layers: Platforms (Google, Amazon, Salesforce, Facebook, Kickstarter, Federal Express, Foxconn), which make it possible for entrepreneurial ventures to be built at lower cost with less capital and reduced risk at greater speed. To provide the critical mass that large corporations used to provide — to, for example, sell advertising at scale or acquire distribution or acquire goods or services at volume — sometimes these ventures need to band together in networks (Glam, YouTube, Etsy, eBay). This is how I simplistically draw it in a whiteboard:

Our economy — equity markets, regulation, taxation — has been built to support The Firm: large companies that controlled the entire chain from design to manufacturing to marketing to distribution, gaining efficiency and control as they gained size. The new ecosystem still benefits large companies if they are platforms, as today much — perhaps most — of the value created via the net falls to new corporate behemoths: Google, Amazon, Facebook….

But it’s at the entrepreneurial layer that the real work is being done, the real efficiency is being found, and the real value is being built. But they need capital — not much, but they need it. And they need to be able to recognize the value they create. That’s what I hope Steve Case and others worked toward with the JOBS bill. Andrew Ross Sorkin is worries that the new law’s loosened regulation for some companies will mean that more will lose money. But Henry Blodget counters that it’s not the SEC’s job to save you if you’re stupid enough to invest in Groupon (told ya!). The lighter regulation certainly bears watching.

But the part of the bill that encourages me is the ability of small companies to raise small amounts from small investors. I see this as economically democratizing on both sides of the transaction: more small companies disrupting large firms and more real investors able to get in on the opportunities (and risks) of a platform-enabled entrepreneurial economy.

Such small-scale investment has already been possible in the U.K. — not just possible but encouraged through 30% tax break on investments. Recently I got email from a company set to benefit, Escape the City (soon to be renamed escape.co), which helps would-be refugees from London’s financial district build new and one hopes better lives outside it. Cofounder Mikey Howe kindly wrote to me because he’d read What Would Google Do? and said it helped him think in new ways. (Thank you, Mikey.)

Howe wrote on the occasion of the company sending a letter to its 57,000 members inviting them to pledge to invest in the venture. Within one hour, $6.6 million was pledged. I checked back with him three weeks later and 2,200 members had pledged $15 million (more than they will end up raising). What’s exciting is not just that a small company can more easily raise investment funds but that this small company knows its potential investors. They are members of the service already: a community of customers and investors. Imagine what that relationship could do to help a startup, when your users, your customers have a stake in your success. (I also enjoy the notion that their venture attempts to disrupt the financial district they left.)

Start Something You Love: Escape the City…1 year on from Escape the City on Vimeo.

Until the JOBS bill, about the closest thing we had in America was Kickstarter. My entrepreneurial journalism students are eager to try to use it to raise funds — perhaps a bit too eager, I caution them, for funding a single product or project does not a sustainable strategy make (any more than begging for grants from foundations). But properly used, Kickstarter reduces risk by performing the best possible market research (pre-orders) and allowing an entrepreneur to use her customers’ capital to start her venture while also turning customers into marketers. Kickstarter could not sell equity. Should it? I think that’s an entirely different proposition. In any case, now we can see Kickstarters of a new sort help more new companies. See also the U.K.’s Funding Circle, which loans capital to startups (and which just got an investment from New York’s Union Square Ventures).

The irony of the JOBS bill’s title (it stands for Jumpstart Our Business Startups) is that it may end up killing more jobs than it creates as it funds highly disruptive and highly efficient new ventures that will try to replace large and now inefficient companies in old vertical industries. (See my post, the jobless future.)

But if the disruption is inevitable — and I believe it is, across many industries from media to retail, banking to travel and even manufacturing — then the only sane response is to find the opportunity in the change. The JOBS act helps more people, entrepreneurs and investors, find more opportunity. That, more than bailouts, is the wise role for government to play in the shift from an industrial to a digital economy.

Piracy v. do not track

Consider the similarities between piracy and do not track. They’re greater than you think, for both reduce value for content creators. And both are excuses for internet regulation.

In piracy, a content company sets business rules: You must pay for my product; if you take it without paying for it, you are robbing me of value.

With do not track, an advertising-supported content company sets business rules: You will get my content for free because I will serve you ads and I will increase their efficiency, performance, and value by targeting them to your interests and behavior; if you block the cookies that make that possible, you are robbing me of value.

The difference between the two is that there is a furor over piracy as theft but, quite to the contrary, there is a rush to enable the blocking of ad tracking as a virtue.

If you listen to The Wall Street Journal, Apple was a good guy for blocking by default third-party cookies (ask what Apple gets out of that). And it’s good news that technology companies just agreed to implement a do-not-track button on browsers.

There is nothing sinister about third-party ad tracking cookies. They’ve been used since very early in the history of the web when General Motors, for example, insisted in serving its own ads on content sites so it could verify what was bought and optimize its targeting. Without that ability, many large advertisers will refuse to buy ads and the value of ad-supported media could plummet — just at a time when we are concerned about how we will support news media.

Odd that a media company wouldn’t be crying foul. The Journal’s owner, Rupert Murdoch, cries bloody murder over piracy — going so far as to accuse Google of theft — but his paper crusades for blocking tracking, claiming it is a violation of privacy (though in most cases, the cookies have no personally identifiable information and so it’s hard to justify a moral panic based on their use).

Murdoch’s News Corp is, at its core, an entertainment company, thus a paid-content company. The ad-supported portion of his P&L is not only small but is causing him much agita as his journalists in the U.K. are accused of violating laws of the nation and the profession.

I’m not building a conspiracy theory. I’m just pointing to the priorities that emerge when one follows the money.

So what about the rest of the industry — the media, advertising, and technology industries, that is? Oh, they blew it. They were never transparent enough about what technology they were using, what data they were gathering, and why — not to mention the benefits that accrued to their users (i.e., free content). That opened the door for other parties — privacy scare-mongers, competitors for our media attention, and government regulators — to demonize the mysterious cookie and stir up this moral panic and paranoia. The M.A.T. industries have only themselves to blame.

In the EU, government regulators have decreed that sites must obtain opt-in permission to set cookies. In the US, the industry agreement today announced is an attempt to forestall government regulation with self-regulation.

But don’t be too quick to celebrate as if these are consumer victories. I believe the EU dictum could lead to (a) a much poorer web experience as we are bombarded with boxes to tick and (b) poorer media companies and thus (c) the possibility of less free media and more pay walls. And in the U.S., it has been shown that one can whip up an anti-net hysteria and bring even giant technology companies to expose their soft underbellies. Each leads to more threats of regulation of the net. That’s what I fear.

It is time for technology companies especially to adopt radical transparency of how they operate so they can’t find themselves in gotcha moments when the hysterical “discover” something they’ve been doing all along. Under such openness, it is also time for them to learn that doing sneaky things will not benefit them. And it is also time for the media, advertising, and technology companies to start fighting back against accusers’ misinformation and explain the truth of what they are doing and how we benefit. That is transparency’s dividend.

LATER: By the way, this post was inspired and informed by a discussion last night on This Week in Google, in which Leo Laporte said he was grateful that I was going so far that I was making him look moderate.

One more point from that discussion: We all practice blocking ads when we fast-forward through commercials on our DVRs. And the industry adapted and still prospers (for now). That’s what may happen here. But one should still recognize the impact of one’s actions — whether skipping or blocking — on the economics of what is provided. And one difference is that we have to skip each commercial manually (especially since, as Leo pointed out, a company that provided easy 30-second skipping was hounded out of business as a result). In the case of do not track, especially government-mandated opt-in — that is wholesale devaluing of advertising in a medium.