Tow-Knight just released a new survey of the state of business at hyperlocal sites, conducted by Michele McLellan, creator of the authoritative Michele’s List.
The bottom line remains: This is a tough business. A third of them bring in more than $100,000 a year; the rest under. Almost half are profitable and another quarter have a steady flow of income. Most are heavily dependent on advertising. The good news, as far as I’m concerned: Many have hired business and sales help.
This is important work, for as I wrote in Geeks Bearing Gifts, I believe that beat businesses can be a building block of broad new news ecosystems in communities. This is why we now support Michele’s List at Tow-Knight. This is why we just held training for new beat businesses here. This is why I work with the Dodge Foundation in New Jersey on helping to support and build the news ecosystem in my home state. We need more training in business to bring these journalists running beat businesses to sustainability. But as Michele shows, this is also hard work, damned hard work.
Michele suggests possible areas for further research. I will argue to foundations that care about healthy news ecosystems that they should help support their growth by giving seed grants and funding training for new beat businesses. I hope other journalism and business schools will help train these brave entrepreneurs who care about their communities.
First Google made its friendship pact with eight old, European publishers, vowing to innovate together. Then Facebook leapfrogged Google — by a considerable distance — launching its Instant Articles with nine publishers, old world and new, inviting them into its mobile News Feed and helping them make money to boot. Now it’s Google’s turn to leapfrog Facebook. We like this game.
That opportunity for publishers — to build upon these positive steps — is what I, for one, emphasized this weekend in more than one session at Google’s excellent gathering in Helsinki, Newsgeist Europe, an unconference where we the participants chose what to talk about. Among other topics, we chose to talk about what Google could do for news, about Facebook as the new distributor — and sometimes editor — of the news, and about at least one idea to take advantage of that new reality.
That idea is something Google News chief Richard Gingras and I advocated at the last Newsgeist in the U.S., something I’ve been working on foryears: the containerized, embeddable article that travels to any site with brand, revenue, analytics, and links attached. In other words, let’s take what Facebook has done with Instant Articles and open it up to any creator and any embedder. I was delighted to hear serious discussion of the notion at this Newsgeist, opening the door to reimagining the distribution of news so that instead of always requiring and depending on our users to come to us, we can now take our news to them.
Now there are many many issues and questions around this model, and you can count on a circleful of journalists to raise them all: how distributed news affects the business of journalism and how both creators and distributors can share in the value they make; the power and responsibility our new distributors hold over the dissemination of information and whether they will act as protectors of news or as censors or catalysts for cat lists; whether creators will get the specific user data they need to build relationships of relevance and value with the people they serve (that is the key issue, I think).
But if we’re honest with ourselves, we will recognize that the horse — and the article — have left the barn. Facebook was already a primary source of audience — links and clicks — for news. Now it will be a key distributor of complete content. You can bet that others will follow, taking what they already have — Twitter with its cards; Snapchat with Discover; Amazon with the Washington Post on its Kindle; Google and Apple with their newsstands — and finding ways to embed content with business model attached into the streams they deliver. Note also that we could find ourselves in a nightmare of publishing content 20 ways on 20 platforms using 20 CMSes in 20 business deals that we don’t control, struggling to make sense of too little data from each.
Publishers could take the lead and create open-source standards and structure for distributed news. But news publishers have proven to be awful at collaborative consortia (see: NCN) and worse — much worse — at technology. And this is no trivial task, as Repost.US learned when it couldn’t sustain its wonderful rendition of the embeddable article (for reasons I explore in Geeks Bearing Gifts). If we’re going to do this, we need help.
Who will help? I suggested Google, which could build the structure openly, adding its own services — ad sales, ad serving, hosting — as options. In the discussion, some feared that Google’s direct involvement beyond funding the project out of its European bribery — er, I mean innovation — fund would give the service cooties. Gift horse: mouth. Well, then Facebook could open up its lovely platform and CMS and make it possible to embed Instant Articles anywhere.
Note well the position that news publishers are in now. And a fine position it is: Google, Facebook, and potentially other powerhouses are finally competing for our affection to keep the wolves — that is, European regulators — at bay.
It’s metaphorically convenient that the favorite recreational activity at Newsgeists is a game called werewolf, which is all about mistrust. Suspicion has been the basis of the relationship between publishers and platforms. That atmosphere of wariness and warring was brought on by a campaign waged against Google by German publishers Axel Springer and Burda, using their considerable political clout to enlist politicians to pass laws and launch antitrust investigations disadvantaging the American technology giant. Google’s peers — Facebook, Amazon, Apple — are well aware that Old Europe’s pitchforks could be launched at them next. So though I did not like the tactic — because it is leading to dangerous if unintended consequences that could imperil an open net as well as European innovation — I must give credit where credit is due, to Springer and Burda, for bringing Silicon Valley to the table if not to its knees. Credit to Google and Twitter for talking. Credit to the publishers that are working with each, seeking peace in the kingdom. Group hug.
Now the game shifts from werewolf to leapfrog. Now we in journalism get to stand back and see technology titans jump over each other to bring benefits to news. But we’d best not stand back too far. We journalists and publishers must collaborate with the platforms as we demand that they collaborate with us. And as they teach us about technology, we must teach them about journalism.
By that, I mean that as platforms take on the role of distributor and (I lament this word) gatekeeper for news, we must help them understand the responsibility they are assuming. Mark Zuckerberg cares about a connected society. Does he also care about an informed society? I believe he does — witness his proper pride at seeing his platform being used by freedom fighters. Now Facebook must find the courage to publish and protect uncomfortable news, for real news, impactful news is almost always difficult news. It must fight to be open to diverse and often dissenting voices and viewpoints in the face of pressure from censors and tyrants, which will surely grow now that Facebook is carrying more news that matters. And as Facebook benefits from the content — the journalism and service — that publishers provide, then it does bear some responsibility to consider their business needs (and I’m delighted that Facebook did just that, offering publishers revenue with distribution via Instant Articles).
My friends Emily Bell, Jay Rosen, and George Brock have written about these concerns, as have I. I don’t think any of us would expect Facebook to produce all the answers overnight; indeed, we should not want them to make these decisions alone. What we do expect of Facebook, Google, and the other platforms is an open and substantive conversation about these principles. And they should expect from us a spirit of generosity and collaboration. We all now recognize that we live together in an ecosystem of information, technology, and service. We must build and maintain it together.
Unconferences, innovation funds, education, and especially new products like Instant Articles will help do that. But group hugs aren’t enough. We don’t just need to embed articles. We need to embed and educate people on both sides of this cultural divide who can understand and translate the differences and, more important, find opportunities of mutual benefit. These are not merely ambassadors doing biz dev and PR. They don’t just make each side smarter. They must make shit happen. They must build things. That means having technologists in the management of news companies and journalists in the product stream of technology companies.
I can imagine countless ways in which collaborative technologists and journalists can build great services for the public we serve. Traveling articles are just one example, a starting point. There were others raised at Newsgeist.
At this point, I know what many will say in the comments wherever links to these thoughts appear: “Well, I just don’t trust Facebook/Google/etc.” “They will pull the rug out from under us.” “They will never do what we want.” “They will serve their own interests.” Well, of course, they will serve their interests. They are businesses. But it’s no longer accurate to say that they cannot also benefit us or that they will not listen. Who’d have imagined — many at Newsgeist confessed they couldn’t — that Facebook would not only invite publishers into its precious stream but also let them keep 100% of the ads they sell for the privilege. Who’d have imagined that even Springer’s Bild would sign up for the deal? Who could have pictured the warm and substantive interaction of journalists, publishers, and Googlers this weekend in Europe?
The sensible, mature, productive way to enter negotiations is not to stomp away. The smart thing to do is to craft business terms. That’s what I teach my students. What would make you do a deal with the titans now that they are willing to talk? What would protect you against your concerns? What do you have that they want and what do they have that you want? Where is their mutual benefit for your businesses and — here’s the only thing that matters in the end — for the people we all serve?
This last chapter is about the impatient innovation but patient capital we will need to reinvent news and find new, sustainable business models. Here’s a sample:
In the development of the internet and of news in its age, we are — as I write this — only two decades past the introduction of the commercial browser and web in 1994. In Gutenberg years, this is 1470. I doubt we can yet imagine how society will inform itself. We have been too busy trying to save the news we knew to invent what news will be. As far as the newspaper was from the town crier and the balladeer, so will news of the future likely look unrecognizable to us today. There is much innovation, invention, development, risk, and failure yet to come. I am more concerned about funding that work than keeping afloat the ongoing operations of legacy news organizations, for it’s that investment that will build the future. . . .
News’ rebirth requires investment at every level: to get beat businesses off the ground and multiplying to scale (tens of thousands of dollars each); to build new and larger-scale news enterprises (low millions of dollars); to innovate and experiment in and rebuild the legacy news companies that survive (tens of millions of dollars each); and to build the technologies that will facilitate the development of new forms of news (anywhere from from a few thousand dollars in a Kickstarter campaign to hundreds of millions for the next Twitter or Google). Where will this money come from? We don’t have enough friends-and-family money and enough charitable and philanthropic dollars to support all that needs to be done. Private equity and hedge funds will not have the long-term perspective needed for this work and the stock market certainly does not. Venture capital? When I visit VCs in Silicon Valley or Alley and argue that there are opportunities in the future of news and journalism, I am often met with polite, sad smiles. Yes, some say, you have opportunities, but not as worthy as those from technology companies. We don’t invest in content, they say. Venture capital is predicated on earning huge returns building disruptive technological platforms that scale. Journalism — content — doesn’t scale. They’re right. This is one reason why I think we must get out of the business of primarily making content and get into the business of building, adapting, or distributing platforms that enable people to share their own information, adding journalistic value to that process (sometimes with content). This is the relationship strategy. I also believe that in many areas — especially local news — scale will come not from the top-down (à la Patch) but instead from the bottom up with the messy, disorganized proliferation of beat businesses: free-agent-nation, mom-or-pop news bakeries. I do not imagine — and do not want — to think that a single behemoth, a Google or Facebook or (heaven help us) a Comcast or Verizon of news, will suddenly rise up to meet all our journalistic and information needs. Venture capital has indeed funded some media ventures, like BuzzFeed, Business Insider, Vox Media, and Vice. Some of these are transitional companies that cleverly exploit opportunities and vulnerabilities in the present marketplace — search-engine optimization or social optimization, for example — but still largely operate under the old, mass-media economics of volume.
And a snippet from the afterword on journalism education:
We face the challenges every journalism school faces today: how to teach change; how to teach enough tools so students leave proficient in them without letting that rob vital time from the teaching of the basic skills and verities of journalism; how to stay ahead of change in the field while still preparing students for the jobs that exist today. It’s not easy. But there is no better time to teach journalism and no better time to become a journalist. Youth, I tell my students, used to be something to get over. Now youth is an asset. Our students today are not only more technically skilled than we could be, they see the world in new ways. I urge them to guard that fresh perspective and to use it to question and challenge all of our assumptions so they can imagine and build a new future for journalism.
I hope you’re finding value in the book. Please pass it around.
Facebook just gave publishers almost what I was wishing for. It is enabling news companies to go to readers where they are (we used to call that home delivery), embedding their articles, photos, videos — and ads — in users’ streams of attention and keeping all the revenue they sell or a share of the ad revenue Facebook sells. They call it Instant Articles because it saves users the time of clicking on links and waiting for web pages to load. It’s a start, a good start.
I wish that Facebook would also work to share data about users at their option so news companies could serve those users with greater relevance and value and learn to build relationships with the public as individuals and communities rather than as a mass. Here, I suggest how that could happen. For now, Facebook is allowing publishers to track some usage data. One thing at a time.
In Facebook’s blog post announcing the deal, its chief product officer, Chris Cox, says: “Fundamentally, this is a tool that enables publishers to provide a better experience for their readers on Facebook. Instant Articles lets them deliver fast, interactive articles while maintaining control of their content and business models.”
The post continues: “Along with a faster experience, Instant Articles introduces a suite of interactive features that allow publishers to bring their stories to life in new ways. Zoom in and explore high-resolution photos by tilting your phone. Watch auto-play videos come alive as you scroll through stories. Explore interactive maps, listen to audio captions, and even like and comment on individual parts of an article in-line.”
I await much gnashing of teeth over the deal. Actually, I don’t have to wait. My Twitter feed was peppered yesterday with fretting over Facebook and news, for example:
@mathewi@jeffjarvis We decided to not use Facebook or Google as our dominant way to get traffic for a single reason: they cannot be trusted
Sigh. What are we supposed to do: ignore the audience on Facebook, stomp our little feet, and take our balls and go home, expecting users to always follow us to our home pages? Last week, I had this discussion with my students, trying to get them to focus on the business terms of a negotiation with Facebook over embedded content. It was hard to get some of them past typical media emotions: not liking or trusting Facebook, worrying about rugs being pulled out in the future. These are deal points that can be negotiated. And at least Facebook wants to negotiate.
Indeed, at last, both Google and Facebook are ready to talk. Two weeks ago, Google signed a friendship pact with eight European publishers. Now Facebook has made its deal with nine — take that, Google! — publishers, not just in squeaky-wheel Europe but also in America: The New York Times, National Geographic, BuzzFeed, NBC, The Atlantic, The Guardian, BBC, Spiegel, and Bild. Note that the last one, Bild, is owned by Axel Springer, which has led the European war against Google, forcing it — and by extension, Facebook — to come to the table.
This is good news for news. At Facebook, the head of product — which is the center of power at a technology company — has made it clear that news matters to the company. Late last year, Facebook released new products for news media. Meanwhile, Google is promising to develop products with publishers and give grants for innovation and this weekend, it is holding its second Newsgeist summit in Europe (I will be there).
This is only a start. Further negotiation is needed to assure trust and more strategic benefit to news companies. And there is much serious discussion that must be held with these technology companies about their responsibility not to publishers but to society. For now these platforms are taking on the role of not only distributing but even editing the news the public sees. These are not easy questions with easy answers.
If news and technology can come to terms, we can begin to reinvent journalism in a distributed world with new business models. I’ve been suggesting that publishers consider starting new services — and new businesses — inside Facebook if the company will make that feasible. We in media can’t do it all by ourselves anymore. We are no longer monopolies in control of content and distribution from top to bottom. We now live in ecosystems where we must work with others. Get used to it. Find the opportunity in it.
LATER: On Facebook, appropriately, my friend Emily Bell asks five questions about the Facebook deal. OK, I’ll take the quiz:
1. How much revenue will this return to NYT vs its other distribution strategies?
First, given that Facebook allows publishers to place their own ads on their content and keep 100% of that revenue, then on an article-by-article basis, the revenue should be a wash. Except that if the paper recognizes a big bump in incremental circulation, then this is additional revenue. If the paper chooses to let Facebook sell the ad and take a revenue share, then I assume it does so because Facebook can get higher revenue and thus it’s a revenue increase.
But, of course, the value isn’t only in the direct ad sales. It is also in the potential to start a relationship with a new customer leading to other revenue: traffic to and ad revenue from visits to the publisher’s site and, in The Times’ case, subscriptions. This is more unknown. I recently spoke with a publisher who started putting videos on Facebook — no revenue yet — but found that they drastically increase the number of people who follow the publisher there, which, it’s hoped, leads to more business in the long run. We shall see.
All this is why I think it’s vital that we begin calculating the lifetime value of individual users and relationships, so we can calculate all this.
2. Who bears the publishing risk for the pieces FaceBook publishes?
That’s a different question in the U.S. than elsewhere. In the U.S., we are blessed with a First Amendment for digital, Section 230, which gives Facebook safe harbor.
Legalities aside, we know that Facebook does take responsibility for policing content, including that from publishers, according to its community standards [as if there could be one standard for one community in the world — but that’s another discussion]. At the International Journalism Festival in Perugia, there was much discussion of Facebook penalizing the respected Scandinavian paper Berlinkse for photos with nudity appropriate both to its journalism and its culture. This, of course, is disturbing: Facebook as editor; Facebook as censor. This is why, as I suggest above, it is urgent that we have a substantive discussion with and about Facebook — and Google and Twitter — in regard to their roles potentially as gatekeepers. That is why they need to have more sophisticated voices inside their organizations to grapple with these significant issues.
3. How will it change the NYT’s digital journalism given that richer interactive presentations won’t work in this format?
But then again, Facebook is providing new functions appropriate to its platform. We must learn to present news appropriate to platforms, use cases, and user contexts. Katie Couric doesn’t do a thirty-minute show on Snapchat Discover; she delivers what is appropriate there. Same goes for this. The Times and these other publishers should find ways to present news in new ways for new uses.
4. How much data does the NYT get access to from FB?
This is *the* key question. As I made clear above and in earlierposts, I believe we in news *must* get information about our users that enables us to serve them with greater relevance and value and thus to extract greater economic value in return. Now I have heard people from *many* technology companies say in response to this idea that publishers wouldn’t know what to do with that data if they had it. True, tragically true. But therein lies an opportunity for these technologists: teach us in media how to build and serve and extract value from relationships with known individuals; cure us of our mass-media ways … please.
5. How much further is FB likely to go in turning itself from a platform to a publisher? Will it hire editors, other journalists etc?
Facebook, Google, Twitter, et should not and should not want to become publishers, in my view. It creates tremendous channel conflict. It invites antitrust scrutiny. It limits the scope of the content they can present.
That said, I do think that these companies need to import editorial sensibilities — particularly about professional standards and ethics and the issues outlined above. So far, that hasn’t worked terribly well. I do not think that editors should be imported as news cops or consultants. I think they should be integrated into the process of product development, where relevant, to bring a better sense of both the opportunities and the responsibilities.
And while I’m involved in a seminar with my friend, the good Prof. Bell, let me add this from her on Twitter:
Main problem for publishers + FB remains theoretical: can you both be journalistic + be part of a commercial power structure?
Last weekend in the German magazine Focus, a guest commentator argued that publishers in Google’s friendship pact had made a Faustian deal with the devil. (I’d link to the article but I can’t because, like an riddle in an enigma, it’s trapped inside a paywall inside a PDF.) This professor is essentially urging journalists and publishers to become digital isolationists. I say that is both impossible and irresponsible. The means of production and distribution in media made a small oligopoly of rich and sometimes monopolistic owners sole proprietors of the entire chain of value, from reporting to presentation to production to distribution to sales. Well, my friends, those days are over. Over. Once again, we have no choice but to operate inside the new ecosystem of users’ choice and we have no choice but to find new ways to sustain our work. Somebody I know wrote a book about that.
ONE MORE THING: So Facebook’s Instant Articles are available only in iOS? Really, Facebook? Really? So what are the more than half of us using Android phones? Chopped liver? Shit. Here I defend the new product and I can’t even see it. Garg.
The New York Times’ investigation into the dangers and abuses nail parlor workers are subjected to just led to Gov. Andrew Cuomo ordering inspections and, where necessary, closure of offending salons. That is media impact: improving people’s lives. Media impact is not what we measure now: pageviews, unique users, likes, shares, and all that. In the latest (and next-to-last) free chapter of Geeks Bearing Gifts, I offer my view of the metrics we should be using. Here’s a snippet; read the rest here. (And here’s a related post I wrote after the book about internally vs. externally focused journalism.)
There is a richer set of metrics that matter to the mission of journalism — metrics around impact and accomplishment. These metrics must start not with us but with the people we serve. They must measure whether they meet their needs and accomplish their goals. Thus journalism built around impact doesn’t start with producing media’s content; it starts with listening to the public’s wants, needs, and goals so we can measure our success ultimately against whether those goals are achieved. (Therein lies the heart of our rationale for starting a new degree at CUNY in social journalism, a journalism built first on listening to and understanding and then serving a community; more on that in the afterword.)
Impact is terribly difficult to measure. It cannot easily be reduced to a number in a chart. But that is precisely why we should pursue these measures, because they force us to see people as individuals again; they force us to listen. Columbia University scholar James Carey argued that media were corrupted by the desire to reduce people to mere numbers — pro vs. anti, red vs. blue — as exemplified by the public-opinion poll. Polling, he said, “was an attempt to simulate public opinion in order to prevent an authentic public opinion from forming.” His alternative: conversation with the public. “I believe we must begin with the primacy of conversation,” Carey wrote. “It implies social arrangements less hierarchical and more egalitarian than its alternatives.” Yes, we have conversations online now, plenty of conversation in bottomless comments sections under our articles. But those comments are still mediacentric, reacting to the content we produce. No, the proper conversation journalists should have must start with the public. These conversations must start not with us speaking but with us listening. Thus I come to better understand my friend Jay Rosen’s interpretation of Carey’s admonitions to journalists: “The press does not ‘inform’ the public,” Rosen said. “It is ‘the public’ that ought to inform the press. The true subject matter of journalism is the conversation the public is having with itself.”
Now I return to amend the relationship metrics I proposed above: How many people have we met — where possible, face-to-face? How rich and informative were our conversations with them? How well do we understand them and their communities? How well have we heard or discerned their needs and goals? That is the starting point.
Only then, only when we have listened well, can we ask the next questions: What does an individual or a community need to accomplish its goals? How can we help? Is it information you need? How can we help you share what you already know? If what you need is not known, then how can we bring reporting to the task? Is it understanding you need? Then how can we bring explanation and context or education? Is it functionality you need? Do we have the skills to implement or build that? Is it organization you need? Can we help convene a community to deliberate and accomplish its goals?
Only after we have contributed to a community’s efforts to reach its own goals can we begin to think of measuring success — that is, impact….