Posts about newspapers

I, for one, welcome our new newsstand

newsstand

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:

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 earlier posts, 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:

My answer: Yes, or we are doomed.

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 decootification of media companies

LOCALADV DIGITAL PHOTO BY JUSTIN BEST Cooties for a Kristi column.

This pretty much completes the circle: Now Gannett is ready to spin-off its print properties, following Scripps in 2007, Belo in 2008, News Corp. in 2013, Tribune Company in 2014, and Time-Warner in 2014 — not to mention the Graham family putting the Washington Post up for adoption by Jeff Bezos.

Thus ends the decootification of media companies: entertainment here/print there; future here/past there; profitable here/screwed there. In corporate transactions, an unnamed venture is called a newco. In these media transactions, the abandoning parents might as well have called each progeny a crapco. They are not only set off on ice floes like elderly Eskimos awaiting a cold death, but some of their abusive parents — namely Time-Warner and Tribune — saddled them with horrendous debt. A few didn’t. Gannett’s spin-off is to be debt-free. Give considerable credit to Rupert Murdoch — who does love newspapers — leaving News Corp. with no debut and $2.6 billion in cash.

This is happening because the bad news for news isn’t over. The last best category of advertising in newspapers is the distribution of FSIs, free-standing inserts — circulars and coupons — which by one account adds up to 30-50 percent of newspapers’ retail advertising (though retail advertising continues to plummet). The last, best reason to keep printing and distributing a newspaper is FSIs. When you see papers cut frequency of printing or distribution to a few days a week, those are not hot news days; those are the days that bring FSIs and their revenue.

I’ve been saying here for some time that FSIs will go away. About two years ago, I asked a big-box retailer that makes much money from its circulars (from charging brands for presence in them) how long it would be before the circulation of print newspapers would fall below critical mass. The reply: 24-36 months. Note how long ago that was. FSIs are holding on for now but they are bound to start dropping off (a cliff) when (1) newspaper penetration — now running about a third of the country — continues to die off and as (2) consumer adoption of digital and especially mobile couponing rises and as (3) retail itself suffers in the face of Amazon and now Amazon, Google, and eBay all experimenting with same-day local delivery. Add (4): At the PostalVision2020 conference a year ago, the postmaster general described the entire business model of the United States Post Service as an advertising delivery medium; it will compete with newspapers for those last printed circulars and coupons and it is just as desperate for them.

I’ve also been saying here for some time that the real goal of newspaper publishers should be to become sustainable digital enterprises before the day when print becomes unsustainable. I’ve worked with two companies that are trying. Digital First started down the path but hasn’t arrived; it is a more digital and more viable company but still has a way to go to reach the promised land. Advance has consolidated digital and print in its markets, reducing print frequency in some and in all markets making digital the primary product for consumers and advertisers as well as staff and print a byproduct that still produces cash. Other companies have gone for short-term cash-flow fixes — namely, paywalls, whose growth has stalled both at Gannett (about 1 percent after a year) and now at The New York Times (in its latest quarterly report, the paper said growth of core digital subscriptions — apart from new digital products that themselves didn’t sell so well — stalled at just over 1 percent).

The job of turning a legacy news organization into a new digital organization is both wrenching and expensive. It requires urgency. It also requires patience and patient capital to fund reorganizations but especially innovation, which entails experimentation and thus failure — in a word, risk.

What these spin-offs signals is that media companies do not have the stomach, patience, capital, or guts to do the hard work that is still needed to finish turning around legacy media. So they spin them off. What used to be Gannett, Tribune, Scripps, and Belo are now TV companies. What used to be News Corp. and Time Warner are now entertainment companies — companies that might merge not, in my opinion, because that’s such a wonderful deal but because the best path they see to growth is not innovation there either but instead cutting costs and consolidating negotiating power to outmaneuver (with help from legacy telcos) the Netflixes of the future.

I see something else happening here: the end of the mass-media business model built on reach and frequency (unique users and pageviews) — in a word, volume. Google, Facebook, retargeting, programmatic advertising, all the companies and trends that are growing in advertising focus on individuals over masses, on data over mere exposure. If news companies do not figure out how to know people as individuals and find value there, reconstituting themselves as relationship rather than merely content companies, then they will find the ice floes under them melting sooner than later.

: LATER: Here I am on Bloomberg TV Market Makers on this story today.

Attention v. relationship economy

Oddly, Google chief economist Hal Varian analyzes newspapers‘ problems and prescribes solutions strictly from an old-media perspective — based on attention to marketing messages — rather than an internet (namely, Google) perspective of relevance and relationships.

In a speech to Italian journalists, Varian says that “the basic economic problem facing news is increased competition for attention” and that newspapers must use such tricks as tablets and dayparts to get people to spend more leisure time with news so they can show them more ads (ignoring, for one thing, the fact that advertising abundance — championed by Google — lowers advertising prices and takes from newspapers the pricing power they once had). “The fundamental challenge facing newspapers is to increase the time people spend on their content,” Varian says. “More time reading the newspaper online translates into more online ad revenue.”

I couldn’t disagree more. Pardon me for suggesting to a Googler that we would be better off asking, what would Google do?

Google reinvented the advertising model, moving past attention as a proxy for intent (“if they see my ad I can convince them to buy my product”) and placement as a substitute for relevance (“men read the sports section and men buy tires, ergo we will advertise our tires in the sports section”). Google also killed the beloved myth of mass media that supported it for a century: All readers see all ads so we charge all advertisers for all readers. Google understands that users have variable value that is increased the closer it can get to delivering relevance and intuiting intent through signals — search, location, context, behavior as well as consuming content — which come from having a relationship of mutual value with the user.

The last thing newspapers should do is continue to try to shovel their old relationships, forms, and models into a new reality. No, don’t just sell space for messages to advertisers (for they’ll soon wake up and realize the pointlessness of the exercise). Don’t try to recreate old forms in new devices like tablets. Don’t measure the value of relationship as page views or time spent. Don’t think your primary value is manufacturing content that you then try to sell.

Newspapers and other former media outlets should become — as Google is — services that still inform — that is their core value — but now can use their own signals to learn about and return relevance to people as individuals and communities rather than masses, thus deriving greater value in the transaction.

For example, through my use of its Maps, Google knows where I live and work. My local newspaper doesn’t. When I ask for “pizza” in search, Google doesn’t give me a hundred archived articles with the word “pizza” in them but gives me the nearest pizza (soon, I hope, the best pizza, the pizza I’d most likely enjoy, the pizza my friends like with ever crisper relevance … and crusts). If my newspaper knew where I lived and worked — if it gave me reason to reveal that — it could target content to me the way it already tries to target ads. Why does *every* newspaper site still treat its home page as a one-size-fits-all print page when it could prioritize news that might be more relevant to me?

The reason: because newspapers still believe in the myth of mass media; they want to hope that with enough time you will look at all the pages they make and all the ads on them. That is the old attention-based media model Varian still recommends. This is also why newspapers continue to sell advertisers space for messages when instead they should be helping those merchants build better relationships with customers. But first, newspapers have to learn how to build relationships themselves.

That is the lesson Google teaches us. That is the new media market Google, more than anyone, created.

Jeff’s Post problem

One issue I’m surprised I haven’t seen discussed regarding Jeff Bezos’ acquisition of The Washington Post is what his tenure will mean to local advertisers.

They don’t like him. He’s helping putting them out of business.

Haven’t you seen: retail is in the tank. Stores have become showrooms for Amazon’s sales. Looking at the golf club? Go to the pro shop and try it out and learn about it and get advice about it, then go to Amazon and buy it for a better price.

Amazon is going into local markets with experiments in same-day delivery. He will do that in competition with local merchants.

eBay, on the other hand, says it will serve local merchants and help them with same-day delivery and online sales. Google is looking to test same-day local delivery and I would imagine it, too, would work with local businesses, who are its advertisers as well.

The New Republic wondered whether Bezos wants The Washington Post’s delivery trucks. I doubt that. Though as I remember, the Post was one of the first papers in the country to shift from large-scale delivery to small-scale (trucks to station wagons), the system is still not set up to do what a UPS truck does.

So how will Bezos finesse this? He’s not big on finesse, Jeff. He could come and find ways to reassure local advertisers. He could involve them in his local delivery scheme, just as he handed over his sales and technology platforms to more merchants. He could shrug and not worry about retail advertising since he’s killing retail anyway.

As with all speculation about the Bezos era in journalism, we’ll just have to wait and wonder.

Lessons from Waze for media

Screenshot 2013-06-11 at 4.30.34 PMNow that I’ve written my commuter’s paean to Waze, allow me to get a bit journowonky now and examine some of the lessons newspapers should learn from the success of the service:

1. Waze built a platform that lets the public share what it knows without the need for gatekeepers or mediators — that is, media. That’s how it keeps content costs at a minimum and scales around the world.

2. Waze does that first by automatically using the technology in our pockets to — gasp! — track us live so it can tell how fast we are going and thus where the traffic jams are. And we happily allow that because of the return we get — freedom from traffic jams and faster routes to where we’re going.

3. Waze does that next by easily enabling commuters to share alerts — traffic, stalled car, traffic-light camera, police, hazard, etc — ahead. It also lets commuters edit each others’ alerts (“that stalled car is gone now”).

4. Waze rewards users who contribute more information to the community — note I said to the community, not to Waze — by giving them recognition and greater access to Waze staff, which only improves Waze’s service more quickly.

5. Waze lets users record their own frequent destinations — work, home, school, and so on — so they can easily navigate there.

6. This means that Google as Waze’s new owner will now reliably know where we live, work, and go to school, shop, and so on. We will happily tell Waze/Google this so we get all of Waze’s and Google’s services. Google will be able to give us more relevant content and advertising. We will in turn get less noise. Everybody happy now?

How could, say, a local newspaper company learn from this?

1. Use platforms that enable your communities to share what they know with each other and without you getting in the way.

2. Add value to that with functionality, help, effort (but not articles).

3. If you knew where users lived and worked and went to school — small data, not big data — you could start by giving them more relevant content from what you already have.

4. You could give them more relevant advertising — “going to the store again? here are some deals for you!” — increasing their value as a customer by leaps and dollars.

5. You could learn where you should spend your resources — “gee, we didn’t know we had a lot of people who worked up there, so perhaps we should start covering that town or even that company.”

When I say that news should be a service and that the news industry should be a relationship business and that we should act as platforms for our users and that small data about people can lead to more relevance and greater value … this is what I mean.

So now go ask Waze how to get there. Oops. Too late. Google got there first. Again.