Posts about newspapers

Digital First

November 3, 2011 by Jeff Jarvis
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At CUNY’s Tow-Knight Center for Entrepreneurial Journalism, we invited John Paton, CEO of Digital First Media, Journal Register, and Media News, and Justin Smith, CEO of Atlantic Media, to answer questions about how they are executing their digital first strategies. I interviewed them, digging down into revenue, costs, transition for staff, audience, and advertisers, and more. Here’s the full video:

Digital First and the Future of News from CUNY Grad School of Journalism on Vimeo.

Paton made it clear that digital first is a transitional strategy, not an end game. He said that at companies like Paid Content, he cannot ever imagine them having a digital first discussion because they obviously are already digital. But he has to transform his companies into digital companies. He talked about cost-cutting and efficiency; about how he is multiplying digital revenue; how he motivates sales people to sell digital; about digital journalism; and about the size of a digital company versus a print monopoly.

Smith — who also launched The Week magazine in the U.S. with a unique and successful strategy — came at many of these questions from the perspective a magazine that sells high value. So he is not only multiplying audience through digital. He is making Atlantic, more and more, into a digital marketing agency for his clients. On the one hand, he says, costs decline from paper to screen, but costs also increase as advertisers need and will pay for greater services. (I think we’ll find that even down to the local level, media companies will have to act like agencies, helping advertisers execute their own digital strategies …. more on that another day.)

In a time when much of the rest of the newspaper and magazine industries are moaning and mourning about their fate, these two executives are building a new future. They are optimists, as are we at Tow-Knight. They have reason to be as they begin to find successes on this difficult path.

The disintegrating economics of newspaper circulation

August 25, 2011 by Jeff Jarvis
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Anna Tarkov calculates that the Chicago Tribune’s Groupon deal — two years of the Sunday ‘bune for $20 — works out to 19 cents an issue.

What’s at work here is the myth of legacy media, that every reader sees every ad thus every advertiser pays for every reader … thus every reader is equally valuable and it’s worth losing money holding onto any reader.

Those aren’t the economics of online, where advertisers pay only for the readers who see (or click on) their ads, and where abundance robs publishers of pricing power over their once-scarce inventory.

My favorite illustration of this is the Star Ledger killing its stock tables in 2001, shaving $1 million of costs and losting only 12 subscribers.That means that prior to this, the paper was spending $83,000 per reader to hold onto them. Papers had been scared of losing one reader because, in their economics, every reader was equally valuable. But no longer. I keep urging papers to calculate the net future value of readers and decide who’s worth keeping and serving and who’s not, economically speaking.

The Tribune is losing much money on every one of those Groupon readers — not only the lost retail value of every discounted sale but also the fact that the paper no doubt was already published at a loss — that is, it costs more to produce a copy than its sold for because each reader is valuable to advertisers. But is she?

What the Tribune is also trying to do here is hold onto its critical mass. When its Sunday circulation falls below a certain level, certain lucrative advertisers — coupon and circular advertisers — will stop using papers as their means of distribution. That will be a kick in the kidneys almost equal to the creation of craigslist and it’s coming any day. In fact, it’s already starting … that, surely, is why the Tribune is so desperately trying to hold onto every reader.

But those economics will quickly disintegrate. Watch it happen….

The orthodoxy of the article, part II

June 12, 2011 by Jeff Jarvis
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Frédéric Filoux willfully misrepresents me so that he may uphold the orthodoxy of the article. He will be disappointed to learn that we agree more than he wishes. Here is what I am really saying about the article.

First, far from denigrating the article, I want to elevate it. When I say the article is a luxury, I argue that using ever-more-precious resources to create an article should be taken seriously and before writing and editing a story we must assure that it will add value. Do most articles do that today? No. Go through your paper in the morning and tell me how much real value is added and how much ink is spilled to tell you what you already know (whether that is facts you learned through Twitter, the web, TV, radio, et al or background that is reheated more often than a stale slice in a bad New York pizzeria).

How many articles are rewritten from others’ work just so a paper and a reporter can have a byline? How many predict the obvious (every story about an upcoming storm, holiday, press conference, or horse race election)? How often do you see a local TV story with any real reporting and value instead of just someone standing where the news happened 12 hours ago telling you what you and he both read online already? Too many articles passing themselves off as professional journalism are crap and I say we can’t afford to do that anymore. I say we should treat articles with veneration as a luxury.

Second, I am also promoting rather than devaluing background when I say it is best linked to. The background paragraphs in an ongoing story generally do one of two things: they bore and waste the time of people who have followed the story or they underinform the people who have not been following the story. Background graphs were a necessity of print but online we can improve background immensely, investing the effort in truly valuable and long-lasting content assets that give richer and more helpful background on a story. I’ve worked with smart folks at news companies imagining how we could provide multiple paths through background: here’s the path to take if you’re coming to the story as a virgin; here’s a track to take if you’ve missed a week; here’s a track from one perspective; here’s one from another. If someone else did a great job explaining the story or elements of it, we should link to them. Filoux calls that oursourcing. I call that linking. We do that nowadays. This is why I’m eagerly watching Jay Rosen’s project in creating explainers, which is an even richer form of background.

Third, in this entire discussion of the article, I am valuing reporting higher than repetitive retyping. As our resources become ever-scarcer, I say that we must devote more of them to reporting than to articles that add little: asking the questions that haven’t been asked and answered, finding people who can add information and perspective, fact-checking.

But I have angered the gods, first Mathew Ingram, now Filoux, who also misquotes me when he says I say that: “Tweeting and retweeting events as they unfold is a far more superior way of reporting than painstakingly gathering the facts and going through a tedious writing and editing process.” I say no such thing and dare him to show me where he thinks I say that with a direct quote. That sentence could stand a little painstaking editing itself. I do say that while an event is underway, tweeting is an amazing new tool to hear directly from witnesses, to question them, to debunk rumors, to manage collaborative reporting (that’s what Andy Carvin does in the Arab Spring). It is part of the reporting process. It contributes to articles later in the process (that’s what Brian Stelter was asking his desk to do when he covered a tornado).

The point is that there are many new ways to accomplish journalistic goals to cover news and gather and share information: Twitter, blogs, data, visualization, multimedia…. Jonathan Glick wrote a much more constructive answer to the question I raised about articles, saying that now that they are freed from the drudgery of reporting infobits of news — the things we have already been told sooner and by other means — then the article can concentrate on adding true value: context, explanation, education, commentary, further reporting, fact-checking….

That is the sense in which I say that the article is or often should be a byproduct of the news process. Once the public is informed of the facts through faster means, once we put digital first and print last (© John Paton), then we also no longer need to build the infrastructure and process of news around writing articles. We have to break out of that expensive, inefficient, archaic stricture. We can instead architect news around helping communities organize their information and themselves (that is my definition of journalism) and we have new ways to do that, including new ways to report news and write articles.

I dare to question the assumptions about the forms of news and journalism. That’s my job. Some — including apparently Filoux — might argue that it is the job of a university to impart orthodoxy: This is the way we have always done it, thus that’s the right way to do it, and that’s the way you will do it, students. I abhor that view.

I believe it is my job, especially in a university, to challenge assumptions and to free students to invent new forms. That is one of my hidden agendas behind teaching entrepreneurial journalism: to encourage and support students (and the industry) to break assumptions and invent new forms, because they can, because we must.

I fear Filoux’s still upset with me because I could not bear and dared criticize the discussion on a panel he ran at the e-G8 in Paris. It wasn’t him I was criticizing. It was hearing the same old stuff from the same old people. At a conference on the internet and the future, the past was rehashed once more. I can bear that no more than he apparently can bear my temerity to challenge the holy article.

But in the end, we almost agree. Filoux argues that newspapers should become, say, “biweeklies offering strong value-added reporting and perspectives, and using electronic media for the rest.” Hmmm. He’s saying, just as I am, that articles should be richer and more valuable and that reporting news bits can be accomplished by other means. So where do we disagree?

Hard economic lessons for news

April 25, 2011 by Jeff Jarvis
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I’m working on a talk that I hope will become the canonical link to my essential message about the business rules and realities of news. I continue to be astonished at the economic naiveté I hear in discussions of the business of news. (Look at this comment thread and and this one.) Here is my answer, the basis of a talk — to be delivered in tweets, in the model of John Paton — and a lesson for my classes. Work in progress. Thoughts so far; please join in….

RULES FOR BUSINESS MODELS

* Tradition is not a business model. The past is no longer a reliable guide to future success.

* “Should” is not a business model. You can say that people “should” pay for your product but they will only if they find value in it.

* “I want to” is not a business model. My entrepreneurial students often start with what they want to do. I tell them, no one — except possibly their mothers — gives a damn what they *want* to do.

* Virtue is not a business model. Just because you do good does not mean you deserve to be paid for it.

* Business models are not made of entitlements and emotions. They are made of hard economics. Money has no heart.

* Begging is not a business model. It’s lazy to think that foundations and contributions can solve news’ problems. There isn’t enough money there. (Foundation friend to provide figures here.)

* There is no free lunch. Government money comes with strings.

* No one cares what you spent. Arguing that news costs a lot is irrelevant to the market.

* The only thing that matters to the market is value. What is your service worth to the public?

* Value is determined by need. What problem do you solve?

* Disruption is the law of the jungle and the internet. If someone can do what you do cheaper, better, faster, they will.

* Disrupt thyself. So find your weak underbelly before someone else discovers it. Or find someone else’s.

* The bottom line matters more than the top line. Plan for profitability over revenue, sustainability over size.

REALITY CHECKS FOR NEWSPAPERS

* Circulation will continue to decline. There can be no doubt.

* Cutting costs will reduce product quality and value, which will further reduce circulation, which will further reduce ad revenue. A vicious, unstoppable cycle.

* Low-cost competitors and abundance will continue to reduce the price of advertising.

* Local retail will continue to consolidate, further reducing ad revenue. Blame Amazon.

* Classified categories—real estate, auto, jobs, merchandise—will continue to become more self-sufficient. They will need market mediators less and less.

* There’s a cliff coming: the end of a critical-mass of circulation needed to maintain inserts. That will have a big impact on newspapers’ P&Ls and will take away a primary justification for still printing and distributing paper.

* Some readers are not worth saving. One newspaper killed its stock tables, saved $1 million, and lost 12 subs. That means it had been paying $83k/year to maintain those readers. In creating business plans, the net future value of readers should be calculated and maximized.

* Once fixed costs are sliced to the bone, they will rise again. Cutting alone does not a business strategy make.

* “The newspaper model is broken and can’t be fixed.” Says John Paton.

DIGITAL RULES

* Scaling local sales is the key challenge. Google will pick low-hanging fruit from the 6 million businesses that have claimed their Places pages. Facebook’s fruit will be businesses that use its free Deals. Each will use distant sales. Groupon and Patch will attack the challenge with the brute force of local sales staff.

* There will always be new competitors. For content, attention, advertising, and advertising sales.

* You no longer control the market. You are a member of an ecosystem. Play well with others.

* Abundance will drive down prices in digital even more than in print. That’s the lesson Google tries to teach media (and government).

* The question about pay walls is whether they are the *best* way to make the *most* money. It’s not a religious matter. It’s a practical question of whether circulation revenue will net more than equivalent advertising, whether one can afford to give up audience and growth, what the costs are to support pay.

OPPORTUNITIES

* Scaling local sales is the key opportunity. I think the answer will lie in productizing services for local merchants (across all these platforms — not just selling them space in a media site but also helping them with Google Place pages and Foursquare and Facebook deals and Twitter specials) and establishing new, independent, entrepreneurial sales forces. The key challenge then will be holding down the cost of sale and production.

* There is huge growth potential in increasing engagement. Facebook gets roughly 30 times the engagement of newspaper sites, Huffington Post’s engagement is also a multiple of newspapers’. If we are truly community services, then we must rethink our relationship with the public, becoming more a platform for our communities, and that will multiply engagement and, with it, audience, traffic, and data. We have not begun to extend and exploit the full potential of the value news organizations can have in relationships with their communities: more people, more value, more engagement equals more value to extract.

* There are still efficiences to be found in infrastructure. If the presses and the distribution and sales arms of papers are not in and of themselves profit centers, they should be jettisoned and their tasks outsourced. If other tasks — including editorial tasks — can be consolidated, they should be.

* Journalists should do only that which adds maximum value. That’s not telling the public what it already knows. It’s not exercising ego. It’s not production. It is reporting, vetting, curating, explaining, organizing, teaching…. Do what you do best and link to the rest.

* There is growth to be found in networks. The more members there are in the ecosystem, the more content there is to link to (without having to go to the cost of creating it), the more opportunities there are for free promotion (links in), the more opportunities there are in aggregated and joint sales. See our work on new business models for news in the local ecosystem at CUNY.

* There are efficiencies to be found in collaboration. Working with the community and with other members of the ecosystem enables a news organization to specialize and increase value and to do more with less.

* There are other revenue streams worth exploring. Local bloggers are making considerable shares of their revenue in events. Newspapers are going into the real estate business and are also selling merchandise.

* We have not begun to explore new definitions of news.

: Note: I rearranged a few of the rules and combined two into one for better organization.

: Was mit Medien translates these rules into German. And translated again.

New molecules

October 11, 2010 by Jeff Jarvis
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Guardian editor-in-chief Alan Rusbridger asked for help with his view of the fourth estate’s separation (outside the U.S.) into three sub-estates: legacy media, public media, our media (my wording). My response:

Pardon my metaphors:

I had a bunch of public broadcasters from Sweden at my school last week. They’re quite successful—audience is up; marketshare is up—and so it may be difficult for them to feel the urgency of the winds of change and move with them. I suggested that we are only beginning to feel the storm (/metaphor) and I argued that if we are coming out the other side of what some Danish researchers call (metaphor) the Gutenberg Parenthesis then our concepts of media and our consequent cognition of society will change profoundly over years yet to come.

In her amazing history of Gutenberg’s influence, Elizabeth Einstenstein argues that it took 50 years for books to come into their own and not merely copy the scribes and another 50 years or so for the impact of the press to become clear. The Gutenberg Parenthesis team argues that we are entering a period of confusion as great as the one Gutenberg caused. Granted, we are operating in internet years, not Gutenberg years. Still, we’ve only seen the beginning. And so I asked the Swedes to pull back and consider their role more broadly.

So I urged the Swedes to think of media as the essential tool of publicness and one that is no longer mediated. And so in their role of being publicly supported (but not — I’ll grant to them and to the BBC their fig leaves — tax-supported) then I suggested the best thing they could do is to enable and protect the voice of the public. They could curate, train, promote, and collaborate with new people using new tools in new ways, for example. They could establish platforms that make that possible and networks that help make it sustainable. They could see it as their role to support a lively, healthy ecosystem and all of its members, including not only the new kids but also the struggling legacy media (by that view, I’ve long argued that the BBC should make it its mission to use its powerful megaphone to promote and support the best of journalism and media in the UK, no matter who makes it; that is a public good).

All of which is to say that I think your trilogy-view of media today is correct but temporary. We are still in the phase when the printers are copying the scribes’ fonts and content. New wine, old skins. We are also still in a phase of separating the old-media folks from the new-media folks, the public from the private, and for that matter, the media (the journalists) from the public. I think those distinctions must melt away when we move past the stage of copying the copyists and invent entirely new forms.

We see content as that which we make. Google sees content everywhere. Twitter creates content even Twitter doesn’t understand yet (our useless chatter has real value as a predictor of movies’ success). Blippy creates a transparent marketplace for stuff. Google Goggles with Foursquare and Yelp and Facebook and Google Maps and the devices we carry that are always connected and location-aware and us-aware force us to rethink our definitions of both local and news. The Guardian turns data into news by collaborating with the people formerly known as its audience. We ain’t seen nothin’ yet.

So I don’t think we’re yet at a stage of stasis where we can find three estates out of the fourth estate and count on the tensions among them to support a new dynamic of media.

Overlaying this view, I think we are entering a phase in the economy in which industries — filled with closed, centralized corporations that own their means of production or distribution — are replaced by ecosystems — filled with entities that must collaborate and cooperate and complement each other to find efficiencies and through those efficiencies profitability and sustainability. So the idea that your three sub-estates will compete won’t be sustainable; they will have to specialize and then collaborate and as that occurs there may still be separations of roles — e.g., creator v. curator, platform v. network, local v. national — but they are new separations.

What you are identifying is the start of an atomization of media. But I see those atoms reforming into new molecules. (/metalphor)