Posts about newbiznews

No silver bullets

July 18, 2014 by Jeff Jarvis
, , , ,

Lewis DVorkin performed a miracle with Forbes … almost. He almost rescued a dying brand, almost helped get it sold to a new owner, and almost rescued the Forbes family and its no-doubt-regretful investor Elevation Partners. I respect Lewis’ inventiveness and innovation. He has done the best he could with the brand he had.

But there’s only so much that can be done urgently with old media on the descent. As Steve Forbes himself said announcing the sale of a majority stake in his company to a group of Asian private-equity investors and cataloguing how his business used to be run: “The web has made this way of doing things obsolete.”

The Times, quoting unnamed sources, says the deal values Forbes at $475 million, but the Financial Times’ John Gapper properly asks:

Axel Springer, a leading European magazine publisher and digital company, was supposed to be interested in Forbes. But it and other media buyers dropped out early. Forbes had reportedly been hoping to sell the entire company for more than $400 million. That didn’t happen. Whatever the real valuation, given the buy-out of Elevation Partners — which had invested in Forbes in 2006 getting a reported 40% for $250-300 million, valuing the company then at under $750 million — and given the large chunk that Forbes is left with, I’d guess the family got something in the borderline nine figures. [I should add that as one commenter elsewhere points out, I’m not even trying to make a guess at such things as liquidation preferences for Elevation.] Not a deliriously happy ending for the Capitalist Tool, but — as people told me this week when I complained about turning 60 — it beats the alternative.

When DVorkin returned to Forbes in 2010, where he had been executive editor a decade before, with the purchase of his startup True/Slant, he brought with him what looked like a solution for a dying brand: He used that brand as candy to draw more than a thousand contributors to write mostly for free — the top few traffic attractors can make a decent buck — adding onto the work of a few score Forbes staff journalists. Thus he simultaneously exploded the quantity of content Forbes could serve while reducing the total cost of content to nearly nil. Now I’m all for media opening up to more voices, but let us acknowledge that not only the price but also the overall quality of Forbes content declined.

At the same time, the business side, headed by Mike Perlis, used that dying Forbes brand as candy for advertisers: Come appear on Forbes.com with your own pieces labeled “Brand Voice.”
Screenshot 2014-07-18 at 10.37.24 AM
I’ve long said that if you have to put a link next to a label saying “what’s this?” then the label clearly isn’t clear enough. This was a pioneering entry into the the so-called native advertising that is now overtaking media everywhere. Just as it was supposed to be the salvation of Forbes it is now supposed to save legacy media.

Beware the silver bullet. It can backfire.

The problem in the end for Forbes, I believe, is that the brand became even more devalued. I illustrate this very simply: Now, when I see a link to Forbes on Twitter, I don’t know whether it is going to take me to (1) the good work of a Forbes journalists, (2) the good work of a Forbes contributor, (3) the bad work of one of many Forbes contributors, or (4) the paid and wordy shilling of a Forbes advertiser, e.g.:

Thus, I hesitate three beats before clicking on a Forbes link. That is the definition of a devalued media brand. And that is precisely what other media companies should fear as they more and more try to fool their readers into thinking that what we used to call advertising is now something else that can comfortably live under brands, enigmatically labeled.

The real lesson of Forbes is that there are no easy answers and quick solutions for transforming legacy media companies. DVorkin became a key tourist attraction for media executives touring New York. I know because I took many of them to meet Lewis. He generously shared his means and methods. But I also told these executives that the path was not without the peril I just described.

Media executives are looking for quick fixes still.

Tablets were going to save them, returning to them the control of user experience and business model the link had taken from them. Hearst Magazines has had some success with tablets. But salvation does not this way lie.

Pay walls were going to save them, finally recognizing the value of their content online. But as Gannett has learned, after grabbing cash flow the first year, growth stops. No Moshiach there.

Ad marketplaces were going to save them — or at least let them compete with Google. But programmatic advertising — those ads that follow you all around the web telling you to buy that kayak you looked at once on Amazon — commodify media. They value direct data about a customer over the context media provides — that is, it’s better to show a kayak ad to a kayak buyer than to buy an ad next to a kayak story. This is why I argue in the start of a white paper I’m finishing now that we must shift to a business based on known relationships with people as individuals and communities rather than as a mass.

Shifting to a relationship and service strategy over a pure content strategy will take not only urgency but also time, with much experimentation and failure and a need for patient capital — likely not the Hong-Kong-based private-equity investors Forbes now has, not the hedge funds that Digital First Media has, not the public owners that Gannett and Time Inc. have. This won’t be easy.

I’m not saying that DVorkin and Perlis ever thought that what they were doing was easy. But others did. They hoped that Forbes would show the way to a solution for all their problems. Well, so much for that. That way lies the skin of your teeth.

The German war against the link

June 20, 2014 by Jeff Jarvis
, , , , , ,

German publishers are not just fighting Google. They are fighting the link and thus the essence of the internet.

Half the major publishers in Germany have started a process of arbitration — which, no doubt, will lead to suits — to demand that Google pay them for quoting from and thus linking to their content. And now we know how much they think they deserve: 11% of Google’s revenue related to their snippets. From their government filing, they want a cut of “gross sales, including foreign sales” that come “directly and indirectly from making excerpts from online newspapers and magazines public.” [All these links are in German.]

Their demands are as absurd as they are cynical and dangerous. First, of course, Google is sending the publishers plenty of value as well. That is, Google is sending the publishers us: readers, customers, the public these news organizations allegedly want to serve. So what are we, chopped liver? I’ll be posting an essay soon that argues that one reason media have a problem building new digital business models is that we still think value is intrinsic only in content; we have no marketplace and metrics for valuing the creation of an audience for it (now that those functions are unbundled). If the publishers really want a fair exchange of value, then they should also be paying Google for the links — the readers — it sends their way. But, of course, that would create a moral hazard and corrupt search; that Google does not charge for placement in search and Google News is precisely what set it apart from predecessors and built a valuable and trusted service.

Google is never going to pay for the right to quote and link to content. That would ruin not only its business but also the infrastructure of knowledge online. If we can find only the knowledge that pays to be found, then the net turns into … oh, I don’t know, a newsstand?

The publishers aren’t stupid. They realize these facts. That’s what makes their action so cynical. They are trying to blackmail net companies in hopes of getting some payoff from them. They’re not just going after Google but also Microsoft and Yahoo — though, interestingly, if a company has only a search engine, the publishers would charge them only a third of their tariff. That is to say, they want to go after the big net companies because they are big targets.

Earlier this month, I spoke at a Google Big Tent event in Berlin (Google paid my travel expenses; I do not accept other payment from Google) where a conservative member of parliament, Dorothee Bär, had the admirable guts to criticize these mostly conservative publishers for their efforts, telling them that she opposed passage of the law that is allowing this nonsense — a Leistungschutzrecht or ancillary copyright — and also warning them that a failing business model is no excuse to run to government begging for regulation. You’d think conservatives would agree about that. But that, again, is what makes the publishers’ campaign so cynical.

Note, by the way, that Google does not place advertising on Google News. Are the publishers seeking 11% of 0? Note as well that there is data to say that longer samples of content could end up sending *more* traffic to creators (more on that, too, in a later post). These are facts that will need to be discussed in any suits.

Add all this to other attacks on Google by German media and politics against Google: the Verpixelungsrecht — right to be pixelated — in Google Street View and calls by German politicians to break up Google. Add to that as well the recent European court decision upholding a right to be forgotten and requiring Google to take down links to content that subjects don’t like.

And I worry about the net. I worry about Europe and especially Germany about their efforts to protect the past. I’ll likely write more about that as well later.

But, of course, these warriors do not speak for all of Germany or all of Europe. The instigators of the war include Axel Springer, Burda, WAZ, the Müncher Merkur, and others. But other major publishers — Spiegel Online, Handelsblatt.com, FAZ.net, Stern.de, Sueddeutsche.de and [cough] the new German edition of Huffington Post — have not joined the war. And there are politicians such as Bär and outgoing vice president of the European Commission Neelie Kroes who have the courage to defend the future. Here is Kroes the other day responding to strikes across Europe protesting the arrival of Über:

The debate about taxi apps is really a debate about the wider sharing economy. That debate forces us to think about the disruptive effects of digital technology and the need for entrepreneurs in our society. . . .

Whether it is about cabs, accommodation, music, flights, the news or whatever. The fact is that digital technology is changing many aspects of our lives. We cannot address these challenges by ignoring them, by going on strike, or by trying to ban these innovations out of existence. . . .

I believe it is a fundamental truth that Europe needs more entrepreneurs: people who will shake and wake us and create jobs and growth in the process.

We also need services that are designed around consumers. The old way of creating services and regulations around producers doesn’t work anymore. They must have a voice, but if you design systems around producers it means more rules and laws (that people say they don’t want) and those laws become quickly out of date, and privilege the groups that were the best political lobbyists when the law was written.

That is old-fashioned compared to a system that helps all of us as consumers, and encourages entrepreneurs. We need both those elements in our economy; otherwise we will be outpaced to our East and our West. We’ll be known as the place that used to be the future, but instead has become the world’s tourism playground and nursing home. I don’t want Europe to have that future. . . .

More generally, the job of the law is not to lie to you and tell you that everything will always be comfortable or that tomorrow will be the same as today. It won’t. Not only that, it will be worse for you and your children if we pretend we don’t have to change. If we don’t think together about how to benefit from these changes and these new technologies, we will all suffer. . . .

Calling all entrepreneurial journalism profs

May 24, 2014 by Jeff Jarvis
, , , , ,

If you teach or soon plan to teach entrepreneurial journalism, the Tow-Knight Center for Entrepreneurial Journalism — my colleague Jeremy Caplan and I — invite you to attend a day-long summit at the CUNY Graduate School of Journalism in New York on July 10.

Our small, new field has grown like weeds. Dozens of journalism schools and foundations are now training and supporting the next generation of media leaders to report, edit, close sales, capture audiences, and run businesses. Our goal is to enable those of you who’ve pioneered these efforts — as well as those just getting into the field — to share best practices and common challenges.

We plan to invite an expert from entrepreneurial education in another field to speak, and ask some of our former students to discuss their experience starting up companies. But on the whole, the day is about your lessons learned, concerns, and needs — and to see whether and how we should collaborate as a group in the future.

Please register here if you plan to attend, or aren’t sure yet, but want to reserve a place. If you cannot attend, we will plan to stream the event and actively involve remote participants in the discussion. Watch this space.

The price of eggs

March 1, 2014 by Jeff Jarvis
, , , , , ,

Glenn Greenwald has responded to Pando Daily’s story about the Omidyar Network and Ukraine with the force and speed we have come to expect. Good. Now I also wish he and his colleagues would turn around, ignore Pando, and create a statement of principles, a compact with the public. Greenwald begins that in his last paragraph of the Pando post:

But what I do know is that I would never temper, limit, suppress or change my views for anyone’s benefits – as anyone I’ve worked with will be happy to tell you – and my views on such interference in other countries isn’t going to remotely change no matter the actual facts here. I also know that I’m free to express those views without the slightest fear. And I have zero doubt that that’s true of every other writer at The Intercept. That’s what journalistic independence means.

That is still reactive to Pando. I would like to see a positive statement of principles: What we stand for. What we guarantee you we will always do and never do. What we will disclose to you….

You could say that we already have journalistic principles, plenty of them, produced by no end of journalism practitioners, professors, and blatherers like me. Very true.

But as Greenwald and others reinvent journalism, it is good to rethink and reassert principles. It is a useful exercise for any journalistic organization: for a reimagined New York Times or a newly invented First Look or Pando or even Gawker. What do you stand for? What assurances to you give us, the public you serve, that we can and should trust you? What can we expect of you?

Greenwald’s principles would not match those of fusty old American journalistic institutions. Start with the obvious: He takes stands. He has a perspective. He measures his value by his impact. (And I endorse those principles.) That is his raison d’être. What is theirs?

Now Greenwald also says that the views and actions of his funder don’t matter because he promises he won’t let them matter (see: principles above) and besides, all rich people have views and entanglements and — to paraphrase a classic Woody Allen joke — we need the eggs. Well…..

There are limits. I pulled my last book, Public Parts, from Harper Collins because I was being critical of and did not want to be subject to the control of Rupert Murdoch. There are others I would not work for and some I am sure Greenwald would not work for (even if they would hire him). I worked for others I should have liked — like Time Inc. — but threatened to resign when I disapproved of what they did. I know my limits.

So there is another step needed here: We need to hear from the funders, the moguls, to give us first transparency and then assurances.

Now in Pierre Omidyar’s case, I pointed out yesterday as Greenwald did today that it took only .3 milliseconds in a Google search to find that the Omidyar Network had funded civil society groups in Ukraine; they sent out a press release about it in 2011. I’m not sure what Pando’s revelation was, except perhaps to make the connection with USAID, though that’s also discoverable. Given Omidyar’s and his network’s vast activities, it’s hard to say that they could create a single transparency document (like simple me). Instead, it is better that they operate under a principle of revealing their financial involvements and making them transparent to Google search.

But what we could have is assurances from both sides of a financial transaction: not only the journalists assure us of their independence, as Greenwald does, but also that the funders guarantee that independence. It would be good for Greenwald et al to write the statement of principles and for Omidyar to endorse it.

When I wrote a post about philanthropy’s relationship to news this week, I had a sixth guideline I should have left in: Charity brings strings. Journalists like to think that they can get manna from heaven to rescue them from the nasty commerce of marketing and advertising, of earning audience and revenue, of sustainability. But as the Guardian’s Alan Rusbridger has pointed out, it was advertising that freed journalism from the control of political entities and gave them independence.

Now journalists are seeking patronage once more. They need to take those checks with eyes wide open and they need to have a conversation with the public about the implications for them and the journalism they serve to us.

Philanthropy and the news

February 26, 2014 by Jeff Jarvis
, , , , , ,

1280px-Andrew_Carnegie's_statue,_Dunfermline (1)
On a trip to Silicon Valley with my new dean, Sarah Bartlett, I heard technology people express concern about the state of news. That is good of them, for they have had a role in the disruption of news — and I’m glad they have. Now they need to consider taking the fruits of their technology and the innovation, efficiency, productivity, profitability, and wealth it has created and turn some of it and their attention toward the good of society and perhaps, with it, journalism.

But not as philanthropists. That was my plea to them. We in journalism need them to bring their innovation and investment to news, to teach us how to see and exploit new opportunities to improve news and sustain it. More on the role of technologists another day.

Today, I want to talk about the role of philanthropy. As I was thinking about my trip to the Bay Area — and in the midst of a magnum opus Twitter conversation about the future of news sparked and stoked by Marc Andreessen — I tweeted this:

My good friend Jay Rosen got angry with me, accusing me of being hostile to nonprofit news.

Not true, I replied. I am expressing a preference. Given a source of capital and given the state of innovation in news and media — this is 1472 in Gutenberg years — I prefer to see that precious resource go first to sustainability. Don’t buy a hungry man a fish — or a news-starved community another article. Don’t just teach them to fish. Build the damned fishing boats.

A few months ago, I went to an event in Washington for nonprofit news organizations put on by the Knight Foundation and Pew. Again and again, we heard that the problem with too many of these good organizations is that they put no resource into development — whether fundraising or sponsorship or events. I often hear journalists say that every dollar they get should go straight into reporting; anything else feels practically immoral to them. But so is letting their good work die and disappear: no more fish, no fishing boats, just fishwrap.

I also hear journalists say that they don’t want to concern themselves with the business of journalism. Clearly, I disagree. That is precisely why I started the Tow-Knight Center in Entrepreneurial Journalism.

In New Jersey, I have been doing a lot of work alongside the Dodge Foundation, Montclair State, and others to try to build the foundation for a sustainable news ecosystem that can grow and improve. We are working with sites to make them profitable by improving the services they sell to local merchants, by experimenting with new revenue streams like events, by building a network to share content and audience and — soon, I hope — advertising. We just received $2 million from Knight and one of their wise conditions was that we not spend the money on operations — on buying more stories — but instead on building infrastructure. That is why we are hiring a sustainability director to manage just that. (Know anyone who’d be great at the job?)

So I do see a role for philanthropy in news, an important role. But I’ll caution journalists — as will every foundation I know — that there is not enough money in the endowments of all the foundations interested in supporting news to pay for the work that needs to be done. Similarly, charity and patronage from individuals and companies can do much, whether that is supporting the work of public radio or now crowdfunding a worthy project from a journalist. But neither can that do it all. Charity runs out. That resource is precious and should go where it is most needed.

So now I’ll have the temerity to propose not rules but suggested guidelines for the use and role of philanthropy in news:

1. Philanthropy should support that which the market will not support. And it should wait patiently to determine what that is. In other words, just because something is not being done now does not mean that philanthropy should swoop in and take it over if the market may find opportunity in it.

2. Philanthropy should not compete with the market. We heard this some years ago when a new non-for-profit news entity sprouted in San Francisco and an executive at the crippled Chronicle complained that it could kill the paper. Thank goodness for the paper, the charity was worse run than it and the paper outlasted it.

3. Philanthropy should help build the economic sustainability and independence of news. Here’s the most self-serving thing I will say from my perch in a university: This includes training the next generation of news innovators. It also includes investing in infrastructure and innovation, new methods and models. Innovation in news requires patient capital that will fund not losses but instead experiments and daring failures. Philanthropy can do that.

4. Philanthropy — and journalism , too — should measure its success by the outcomes it accomplishes. Journalists have something to learn from foundations here: It’s not enough to produce content and build audience. Journalism has to help communities better themselves. That starts with listening to the public and its needs.

5. Charity is finite. Yes, you can start a news organization on charity. Yes, we could support a great deal of the investigative reporting we have philanthropically. But I am more ambitious than that; the need is greater. The souce for investigative reporting is (1) whistleblowers and (2) beat reporting. We need to support beats at scale. That’s why I’m doing the work I’m doing in New Jersey and why I’m starting a new training program for beat businesses in a box. Charity doesn’t scale. Sustainability does.

Philanthropy is precious, important, useful. It is a gift to use well and wisely. It isn’t an excuse not do do our jobs. And our job is to rebuild journalism into a service that will last.

Cross-posted to Medium and HuffingtonPost.