BuzzMachine

The media pundit's pundit. Written by NYC insider Jeff Jarvis, BuzzMachine covers news, media, journalism, and politics.

  • The model of the new media model

    41 comments on The model of the new media model
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    Leo Laporte, creator of This Week in Tech and the TWiT network of podcasts, spoke before the Online News Association this week and presented the very model of the new media company: small, highly targeted, serving a highly engaged public, and profitable. (Full disclosure: I am a panelist on TWiT’s This Week in Google show.)

    Laporte said he charges $70 CPMs for ads. Some questioned the $12 CPM we included in our New Business Models for News, though we went with a conservative middle-ground based on the experience of existing local businesses. If we had – as we will – instead forecast a new kind of local news business – highly targeted with a highly engaged public, like TWiT’s – the CPMs and bottom lines would have been exponentially higher. The companies are still small but they are profitable. Laporte said he has costs of $350,000 a year with seven employees now but revenue of $1.5 million and that revenue is doubling annually. It will increase more as he announces new means of distribution (to the TV; he believes that podcasting is too hard for the audience).

    Rather than nickel-and-diming current business assumptions, we need to have the ambition of a Laporte and build the new and better media enterprise.

    (I can’t figure out how to turn the Livestream auto-play off, so the video is after this link…)

    (more…)

  • Journalism as capitalism: Now that’s God’s work

    8 comments on Journalism as capitalism: Now that’s God’s work
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    The only way that journalism is going to be sustainable is if it is profitable – and out of that market relationship comes many other benefits: accountability to the public it serves; independence from funders’ agendas; growth; innovation. This is the future for journalism we envisioned in the New Business Models for News Project.

    Not-for-profit, publicly and charitably supported journalism has its place in the new ecosystem of news; that’s why we included it in our models at CUNY. I think it should fill in blanks the market doesn’t fill.

    But I agree with Jack Shafer at least in part that there are dangers to relying too much on not-for-profit news. He does an admirable job listing those dangers, chief among them influence by funders and their motives. Texas Tribune funder and founder John Thornton responds here. I’ll stand halfway between them: We can use and perhaps need funded journalism but we also need to be aware of the risks and must expect transparency about them.

    I see another danger, though: that not-for-profit ventures will delay or even choke off for-profit, sustainable entrepreneurship in news. I would prefer to see various of the many funders who gave funds to not-for-profit endeavors – note $5 million give to a new not-for-profit entity in the Bay area – instead had invested in for-profit companies that can build companies that support and sustain themselves rather than rely on hand-outs. That is God’s work.

    Mind you, I’m not coming at this from the perspective – as some might – that journalism has to be produced only by paid professionals. I have argued that we would be wise to account for the value of volunteerism and that we must find ways to reduce the marginal cost of news and new journalism to near-zero.

    But in terms of saving the functions reporters perform, I think we should find ways to support them and their work in profitable enterprises. So, in a rare moment, I disagree with Clay Shirky that we must rescue reporters as charities. This call continues the notion that journalism is in a crisis. No, its legacy owners are in a crisis because they could not and would not change; Clay’s right that their models and buildings are burning. But journalism is facing no end of opportunities (as the Knight Commission’s Ted Olson said at today’s Knight Foundation presentation of the group’s recommendations: never before in journalism has there been so much opportunity for innovation in journalism).

    So let’s not save those reporters and let’s certainly not save doomed companies that refused to change. Let’s invest in the future, in creating new means of gathering and sharing a community’s news that are better than old methods and that are more efficient and thus more easily sustainable. That’s what we present in the New Business Models for News. When we presented at the Aspen Institute this summer, I pointed to a blog post I wrote (but can’t find now) a year and a half ago arguing that when the Washington Post bought out reporters, it should invest in them, setting them up with blogs and businesses and promoting and selling ads for them. That resonated. And that is one step toward a new model built on networks, profitable networks. There are many more that need building.

  • Small c: The lab report

    39 comments on Small c: The lab report
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    My surgeon called with the results of the pathology report on my prostate cancer. “It’s all good news,” he said. The cancer was contained to the prostate and had not spread to the lymph nodes. “As far as I’m concerned,” he said, “you’re cured.”

    From the moment of my diagnosis, I knew I was lucky. This is a form of cancer for which it’s possible to say a beautiful sentence such as that, because it is slow-growing and can be contained and taken out. That’s why another doctor told me when he gave me my diagnosis that if you’re going to get cancer, this is the one to get. That doctor caught it early and enabled my surgeon to get it out. Lucky, indeed.

    Three months from now, I’ll get a PSA blood test again – the test that discovered my cancer. The hope – no prayer – is that the results will be nil to negligible, for if there are prostate cancer cells elsewhere in the body, they’ll be producing PSA. I’ll keep doing that for the rest of my life.

    So far, so good.

    : LATER: Here’s Richard Edelman a year after his surgery.

  • Googley philanthropy

    18 comments on Googley philanthropy
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    I’m getting ready for a talk this week at Philanthropy New York about giving and What Would Google Do? So I’d like your help on brainstorming what Googley philanthropy looks like. How would a transparent, networked, collaborative, even open-sourced, process-oriented, beta philanthropy as a platform operate?

    Not being wealthy, I don’t know a lot about how philanthropies operate, though I have begun begging seeking funds in my new life at CUNY and so I am eager to learn more. That’s why I’m looking forward to the conversation and brainstorming at the event and here. So let’s examine a few of these notions.

    A philanthropy is not about giving away money but about accomplishing goals and the internet and social connections give it new and more effective and efficient ways to do that. That’s why I think it makes sense for a charity to be transparent. In its challenge grants, the Knight Foundation urges applicants to open up their ideas to get more input. I’d think that even the MacArthur genius grants would benefit from open nominations. With transparency, givers open themselves up to getting more information, new ideas and suggestions, links to new and possibly better grantees from a public that will gather around them.

    Mind you, I’m not suggesting for a second that philanthropy should become democratic. The philanthropist or foundation is responsible for the optimal use of its always-scarce resources and so it must decide where its money goes to meet is own goals and conditions. But I do think that – as with journalism, marketing, government, and most any industry – more information from interested people can only help. That’s why I’d like to see philanthropies open up their goals and processes using the web and social media: blogs, Facebook, Twitter (where I see a fair number of philanthropists and foundations already).

    Once transparent, it’s a short step to becoming collaborative. The charity can ask the public for help in finding ways to meet a goal – and not just through seeking funding. It can use the internet to mobilize people to work together. Why will people go to the effort? For the same reason that the charities are giving money: because they care. Once more, I’ll call on the vision of hundreds of millions of dollars worth of time given to Wikipedia by people who care. This is what makes philanthropy ideal for online, I’d say.

    Collaboration can take the form of ideas and the form of effort. Of course, it can also take the form of money. Challenge grants are common: At CUNY, we’re working to meet a $3 million challenge grant from the Tow Foundation right now; Knight does likewise for community foundations to encourage them to invest in local journalism; on every NPR fundraiser, there’s a matching challenge used to motivate the public to give more. Challenges work in some cases better than others but online presents a new opportunity to have grantees raise money from their publics when that’s helpful.

    But even aside from challenges, there are advantages in collaborative fundraising online. A foundation can create an infrastructure that lets people piggyback onto its giving, structure, and management: ‘We gave $3 million to this effort and if you agree, you can give, too, and we’ll make sure your money is as well spent as ours.’ The charity becomes a mutual fund. In that sense, then, the foundation can extend its value not just with its money but with its expertise and structure. Except then, when the money comes from the public, the public becomes the boss and the charity merely helps organize and executes its desires.

    Openness and collaboration at the start of the process – seeking and giving funds – can also extend to the end: sharing lessons learned, good and bad, from giving. About a year ago, one foundation I know sent out a report detailing its mistakes. I thought it was gutsy (though potentially a bit embarrassing for the grantees – that’s the risk). But that kind of openness about lessons learned can be valuable to others. So why wait until the end? What about being transparent during the process of a project, so adjustments can be made? That becomes beta philanthropy.

    At the end, a foundation, charity, or philanthropy should act like a platform. They do now in the sense that they make good work possible with funding. But how else can they enable others to do the same good work and how can they thus extend their resources with knowledge, networking (from introductions to more formal structures), vetting, teaching, management, and more?

    How do you think philanthropy can work differently given the tools of our new age?

    : LATER: Here’s info on attending the talk Thursday morning. And here is Philanthropy New York’s blog.

  • The X Prizes for news (and media)

    19 comments on The X Prizes for news (and media)
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    A conversation with our Knight Foundation friends at Aspen inspired me to think through what an X Prize for news could accomplish. Then this week’s report in the New York Times about the awarding of the NetFlix X Prize – and the far greater value it created, not just for NetFlix, but for its participants and others – inspired me to buckle down and open that conversation here (and at the NewsInnovation site).

    I’m not asking idly. With the right structure, I’d seek funding to administer such a prize at CUNY and we can hope that smart companies, organizations, and patrons will see that an X Prize could be a way to innovate aggressively and openly. Or is it?

    We must start with a question: What is the core problem the prize is trying to solve? It can’t be just about getting more revenue for existing companies or thinking of another way to tell a story or, Lord knows, making something cool. The best expression of the problem will yield solutions that must be groundbreaking and new, quantum leaps undertaken on daring, hope, and hubris. Innovation won’t come from incremental changes to an existing structure. We know that too well.

    Another key question is how success is measured – tangibly, metrically, from a distance, not emotionally. In something as amorphous as news, that’s going to be hard.

    Next, we have to define news carefully – that is, broadly. News shouldn’t be defined as we do today, for the winners of the prize may create something we haven’t seen yet. Our definition of news is probably just about a community informing itself – better informed individuals and society (“better” as defined by them).

    Finally, we have to recognize that the problems to solve are centered more on business issues than product issues – on sustainability – but that is not to say that the product should not be radically rethought as part of this process.

    I see three key problems to solve for news (which I’ll make conveniently alliterative):

    1. Engagement. In our most recent phase of the New Business Models for News at CUNY (funded by Knight), we used the sinfully low industry standard for engagement with newspaper sites: 12 pageviews per user per month. Facebook users have that much interaction with the service every day. Time spent online in social sites and blogs accounted for 17% of time overall – vs. 0.5% for newspaper sites, according to separate estimates (and advertising on social sites doubled while it plummeted for newspapers). For God’s sake, if news services were truly of their communities, they would have many times more interaction with many times more people in those communities and interaction would go far beyond reading.

    Engagement is a core business problem. If you plug in higher numbers into our NewBizNews models – and we will, in our blow-out cases – you’d see much better businesses able to support much more news. You’d see news as a very profitable industry again.

    So let’s say the first challenge is to multiply a community’s engagement with news. How is that to be done? Surprise me. Shock me. Invent entirely new ways, new platforms, means, and media to gather and share news.

    How do we measure engagement? I would not measure by pageviews – in great part because I do not want contestants to just assume that it’s a site they’re inventing. See one more time Marissa Mayer on hyperpersonal news streams and me on hyperdistribution. News has to go where the community is and we no longer expect the community to come to it. It has to be of and among the community. Time is a slightly better measure of engagement but it, too, is shallow and can be manipulated with tricks.

    No, engagement is more about ownership: people believing that and acting as if they owned this thing. It’s theirs – as Wikipedia’s and craigslist’s communities believe they own those properties and as each of us believes we own our Facebook pages or Twitter feeds or blogs. But an opposite danger lies there as well. One shouldn’t measure engagement by contribution (as many of us did in the early days of the web). Go to Wikipedia’s 1 percent rule.

    So I’d say the measurement has to be made by a combination of metrics – say, time combined and attitudes: Take a baseline a survey of users of news sites today against certain beliefs – “My newspaper.com makes me part of the community of news”; “Newspaper.com is a member of my community of news just as I am”; “I feel a stake of ownership in newspaper.com”; “I feel a measure of control over newspaper.com”; “I feel a responsibility for newspaper.com”; “I am better informed with newspaper.com”. Then require that the new thing multiple some index of these factors by an impressive amount. If Facebook is 30 times more engaging than a newspaper site, then how about 10 times, even five times – that would make a huge difference in the business of news.

    2. Effectiveness. This is effectiveness for media’s other customers, its paying customers: advertisers, or perhaps we should say marketers (to include ecommerce and not limit the business relationship).

    News sites – like most media sites – are still selling what they used to sell in their old media: space, time, eyeballs, scarcity. Google won business away from them by selling something else: performance. Google thus takes on risk on behalf of advertisers – if Google doesn’t deliver relevance and you don’t click, it doesn’t get paid – and so its interests are now aligned with its advertisers’. And because Google created an auction marketplace that takes advantage of abundance – there is no scarcity on the internet – then prices are lower. For an advertiser, what’s not to love? That’s why I roll my eyes when old media people complain that Google stole their money. No, Google competed and saved advertisers their money.

    At the same time, I believe that news and media will be supported primarily by advertising and so they had best figure out new ways to serve advertisers – even as advertising shrinks. For purposes of sustaining news, I think it’s best to concentrate on local advertising, because – in the U.S., at least – most journalistic resource is expended locally, much of government is local, there is opportunity to grow there, and the crisis in the news industry is primarily local.

    The solution cannot be about increasing clickthroughs to banners. That merely extends the bullshit online media are selling. No, it has to be about much richer ways to measurably improve merchants’ businesses: to add value.

    Ah, but measuring it is the tough part for that itself sets the shape of the invention: Is it more people to a web site, more people to a door, more sales of particular merchandise, better brand awareness, better relationships? Help! What do you think?

    At CUNY, with additonal funding, we soon hope to do more research with local merchants for NewBizNews to get a better sense of their needs. But then again, they may not know it until they see it. I’ve spoken with advertisers who still don’t understand why a customer’s Google search matters to them.

    So for the sake of discussion, let’s say that one could take a test group of merchants and used the methods and means created by a contestant to utilize a relationship with online media of some form (that is, advertising) to improve their sales by N percent over N period with at least an N return on investment. In the end, it’s simply about improving their businesses, isn’t it?

    Any multiple of this effectiveness would also have a profound impact on the sustainability and profitability of news (so long as it’s a news entity that makes it possible). In our New Business Models for News, we used what we believed – though some disagree – was a conservative $12 CPM ad rate. It was also conservative to presume old ad models: i.e., banners. But then Google’s Marissa Mayer turned around and talked about hyperpersonal news streams, emphasizing the business potential: If you know that much about people to be hyperpersonal and if you are incredible good at targeting – at discerning intent and delivering relevance – then the efficiency, effectiveness, and value of marketing there would skyrocket. An X Prize winner would think this way.

    3. Efficiency. This is to say cost. What does it cost to produce news, to gather and share what a community knows? The closer that marginal cost can be brought to zero, the more news we can afford. That’s good for society.

    That may not sound good for professional journalists, I know. And employment of journalists has been the default measurement of the health of news. (This is why I have quibbled with BusinessWeek’s Michael Mandel’s analysis, here and here.) But I’m not suggesting that there are necessarily fewer reporters (there will be fewer production people). Indeed, in our New Business Models for News, we ended up with a equivalent number of people doing journalism in our hypothetical market, only they weren’t all in a single newsroom. Most worked in entrepreneurial ventures that many of them owned, and they as a group devoted far more of their time to reporting. The net result, we believe is more journalism because it is more efficient journalism.

    So I’m suggesting that journalists be made as efficient as possible and the way to do that is to make them highly collaborative and to take advantage of the work people are willing to do just because they care – the hundreds of millions of dollars people contribute to Wikipedia, adding value to it and making it both supremely efficient and incredibly valuable.

    So I suggest this prize start with the goal of maximizing the journalism, finding the best ways to get the most relevant news to the most people at the lowest cost: the best way to make the most people feel well-informed from a sustainable venture. Once again, we must be cautious about the definition of news, not limiting it to the broccoli served cold currently. What do people want to know and need to know and how can we get that? What is the news that isn’t shared that has to be reported and investigated and why and how do we get that? So I might start by finding communities and having them define news and what it means to be informed, what they need to run themselves. Of course, we also need to define quality. This needs to be reliable and useful information.

    How do you make a measurable contest out of that? I’m not sure. Perhaps we find a community and find out how many people want to know about, say, their school board and town board and tow events and then measure what they want to know now. Then the winners made their community better informed by the greatest margin at the lowest cost while still not losing money.

    In the end, if we can find new and daring solutions to these problems of engagement (formerly known as audience), effectiveness (advertising), and efficiency (operations), we can improve news as a product (and process), its relationship with its public, its value to its customers, and its sustainability. That’s the goal. It’s going to take new thinking and experimentation to get there. An X Prize is one way to get that.

    What do you think?