Tuesday, September 22, 2009

Micropayments Vs. Leveraging the Backlist

We've been arguing about this for better than a decade -- editors, publishers, journalists, micropayment facilitation companies, media pundits, and so on.
Can micropayments save journalism as we know/knew it?
Here's a decent overview of the dust-up, by Matthew Ingram over at the Nieman Journalism Lab.
The basic gist is that people will pay for something they can keep (iTunes), versus something transitory they can consume.
Of course, people can keep a newspaper -- which has limited shelf-life by design: The paper is cheap (by design), the ink gets on your fingers, and clipping articles these days for archival purposes is largely a past-time of the elderly, the homeless, and the shut-ins. Also authors.
I've worked for a number of newspapers, and at one point, was sitting in a meeting of staffers who had been at the paper for decades.
I was relatively new to the town, and had relied upon the archives of the newspaper to steep myself in the history of the city, as well as past coverage that I could leverage to offer my articles perspective.
These, traditionally, are kept in a place called the morgue. Where old news copy goes to die.
What's fascinating is how much good stuff is in there.
And how much of it is non-digital. At this paper, the digital archives went back as far as five years, healthy for a paper of that time.
To whom, other than a journalist, is this stuff still useful? Anyone doing research, one might imagine. Genealogists. Families. Crime writers. Historians. People looking to move there, perhaps.
It occurred to me that archival content, to which the news organization -- local, regional, or metropolitan -- still holds rights is a major unleveraged asset.
If news is not scarce, then it's commodity, and it must be free.
But OLD news (while there's a lot of it), particularly that material written by the boots on the ground IN a city, versus AP commodity content, is still valuable. May be valuable. To someone. Someday.
In publishing, Bob Stein (of Voyager/Night Kitchen fame) once told me: "The model is to have a deep backlist." Stein was looking toward the future. You can never know what will be a hit, and when, so gamble on covering your niche (in his case, really smart people) well.
Newspapers are already sitting on a deep backlist of content, some of it more than a hundred years old. That you can't find anywhere, except on 'fiche.
I was really happy sitting in the morgue, looking at histories of families that stretched back six generations. Old comics. Old Op-ed columns that capture the essence of the changing community over time.
Had deadlines not loomed, I could have been quite content to spend my weekends there, reading.
But I'm just one geek on a planet of 6.7 billion people.
Surely there are a few hundred thousand like me out there.
And that's a market.
And the content is scarce.
That newspapers have not digitized all their archives is a crime against history, historians, detail-oriented people, researchers, family-tree documentarians, and probably many more niches than I can attractively list in a blog.
Newspapers are institutionally-inclined to reject this idea as a potential market, because we're born and bred to focus on the next story.
The same is true (although decreasingly so) of TV stations. Radio stations and personalities seem to get it. Fresh Air by Teri Gross is a great example -- she bags the celebs on tape, and when they die or have a new book out (whichever comes first) she repurposes the interview, maybe tops it off with current content, and boom, there's a broadcast.
My past advocacy on this matter has been consistently ignored by multiple news organizations, both print and broadcast. It's either too expensive, or too big picture.
But I saw all the past footage at CBS -- it fills warehouses in NYC and New Jersey. All that friable film, and that inconsistently-labeled magnetic tape.
The morgues at newspapers are made of paper, or sitting on reels of 'fiche that even libraries don't have access to.
It could all go away tomorrow.
The archives are gold. Digitizing it and making it available behind a paywall is an awesome way to start a new revenue stream. Newspapers, magazines (Rolling Stone in particular, which is well on its way), and broadcast organizations should all do it.
Or a company should do it for them. Because otherwise, Google will.
If they're not too late.

Tuesday, August 25, 2009

The Attention Economy

Michael Erard has a great post up entitled "A Short Manifesto on the Future of Attention," which deconstructs the advertising market and media saturation from an orthogonal perspective. It's particularly timely in light of recent news, namely:
A) Murdoch is serious about news content going behind a paywall. He's appointed a Chief Digital Officer to look into the matter.
B) The blogosphere is awash in commentary about newspaper paywall collusion.
C) The ad market remains soft (too many ads, not enough audience to sustain multiple media outlets.)

What I particularly like is his thinking about products and pricing organized around how much attention you care to spend on them:

A quote:

Imagine attention-based pricing, in which prices of information commodities are inversely adjusted to the cognitive investment of consuming them. All the candy for the human brain — haiku, ringtones, bumper stickers — would be priced like the luxuries that they are. Things requiring longer attention spans would be cheaper — they might even be free, and the higher fixed costs of producing them would be covered by the higher sales of the short attention span products. Single TV episodes would be more expensive to purchase than whole seasons, in the same way that a six-pack of Oreos at the gas station is more expensive, per cookie, than a whole tray at the grocery store.

Perhaps an idea whose time has come.

Thursday, August 06, 2009

Crazy Like Fox

As if the AP strangeness wasn't enough, now Rupert Murdoch wants to put all FOX content behind a paywall.
(blink. blink.)
I have two reactions to this:
a) Being a lifelong Democrat, I'm perfectly happy to watch all of FOX news disappear into walled-garden irrelevance. It hasn't enhanced the political dialog, much of it is wrong/jingoistic/wing-nutty, and frankly those who rely on Fox News for "news" are doing themselves a vast disservice.
b) My fear, however, is that others (CBS/CNN/NBC) will copy Murdoch out of desperation, or benightedness.
But again, this supports the theme of my last post: media companies tried paywalls in the late 90s. Only the WSJ was able to pull that one off successfully. Most others gave up.
So, this is how far we've come. In 2009, we're willing to try the SAME thing that DIDN'T WORK a decade a go.
Please, shareholders: It's time for executive regime change at the networks, and newspaper chains.

Wednesday, August 05, 2009

AP Idiocy

In July, the Associated Press announced they would create a system to track where their content ends up, with an idea of charging for it. It's been roundly criticized by the blogosphere (here's a good example from the Laboratorium, a blog run by James Grimmelmann) and now AP has released a statement noting how its relationship with iCopyright is not targeted at billing bloggers for using quotes.
The bigger issue is how AP can charge for content it doesn't own. The statement doesn't address it, and Mr. Grimmelmann calls them out on it. Tip of the hat to him.

What defines fair use and what is and is not public domain have been taking a beating lately. First, fair use was thrown out as a defense in a Boston music downloading trial -- although I suspect this will be looked at again on appeal. Now this silliness from the AP.

I understand that record companies are looking at a dying business model and are lashing out with lawyers rather than innovation. I understand that the AP wants to make sure it doesn't get gypped. But how record companies are measuring their losses doesn't pass the laugh-test. And how AP is defining fair use of their content doesn't pass the smell test.

What this boils down to has been true since Bubble 1.0. Media companies (and I've worked at a LOT of them) are not software companies. When they build software, or new media products outside of their traditional scope, they fail more often than not. They fail to anticipate what their new audience will want. They fail to experiment aggressively to see what works and what does not. They tend to try to shovel their old approaches onto the new platform (just like in the early days of television).

Furthermore, this defensive posture about content that lives in a walled garden just won't work on the Internet. The understanding must be that the global Internet audience (and its hockey-sticking mobile component) wants what they want when they want it. DRM just turns everyone off. And they've turned a blind eye to the possibilities of the new platform as a marketing opportunity for their other (just fine thank you) products. And after nearly 15 years, the mossbacks in the boardrooms are showing few signs of waking up. The only solution I can foresee is a shareholder revolt, and some new management talent as a result. There's plenty of folks in Seattle, Silicon Valley, and New York who would love to take on the manifold challenges of bringing record labels, newspapers, radio conglomerates, and broadcast networks into the 21st Century. Lord knows I've tried. But invariably one encounters resistance at the topmost levels, products and platforms get nerfed, and the failure begins anew.

Which is sad for me, and a lot of other media guys who've bled to save these institutions.

Monday, May 18, 2009

Really? It's The Business Model?

Sorry to momentarily feel prescient, but I was amused to read this morning so much crosstalk about the idea that newspapers, and other media, are starting to think about the ad model a little more seriously.
The FT has a nice article up relating to Rupert Murdoch's latest thinking about content, ads, and whether or not to make the Fox audience pay to receive.
The big idea, as always, has been to say, okay, the ad revenue isn't there (yet.) to go ad-only with respect to revenue, so what about subscriptions.
Content has always been a mix of sub vs. ads with respect to keeping reporters at the phones, so this is surprising.
What's struck me over the past 15 years has been the idea that micropayments haven't caught on.
We, who still buy papers from newsstands, have been well at the epicenter of the micropayment model, trotting out our silver in exchange for news, amusement, and other print-based delights. The ability to facilitate a $0.75 transaction through the Internet, however, doesn't seem to have caught on in the same way that AT&T's monopolistic relationship with Apple's iPhone. As a consequence, Internet news has suffered -- only to be supplanted or supplemented (depending on the vertical market) by the blogosphere.
So, now, Rupert's elected to test the micropayment sphere to address his empire's online revenue issues.
Well and good.
The pricepoint for online news is an area that has defied many analysts, thinktanks and whathaveyou.
I've long been an advocate for a living wage for journalists, since I think journalism is vital to a well-informed democracy.
I've blogged here about the notion that entertainment vs. information continues to be a struggle for major networks. I've also blogged here that local and regional journalism is more than a first draft of history -- it is also, when aggregated -- the rough draft of history, rich in footnotes, commentary, and primary sources. Also, I should say, that local and regional journalism OUGHT to be able to charge more for their archives than national journalism for the following reasons:
a) It's more granular.
b) And therefore richer in content and primary sources.
c) Obits, the first thing any serious journalist learns to write (because it teaches compassion and accuracy), are gold for avid audiences thirsty for genealogical information.
d) High school sports are so bloody important for people with skin (and bloodline) in the game.
e) Most people are regionally bound by blood, history, and the caretaking gene -- the one that says I should care about people, families, and events in my immediate contorno because that's what is immediate, accessible, and therefore important to my family, my friends, my contacts. Because for most people, still, geography is destiny, as well as community.
f) National journalism will always be ADD. Local and regional journalism is more OCD, and therefore inclined to follow stories. Local and regional offers depth. National will always cleave to those topics that are, with few variations, more surface-oriented. National captures the zeitgeist of the body politic, when they're right. But they're also more likely to aggregate around teapot-tempests that, ultimately, are silly, and manipulable (as in the recent Teabag party).
I don't, therefore, believe that national news markets should be able to charge as much as can local or regional newsproviders. I think the "give it away/freeware" model will benefit them much more than can micro-subscriptions (ie, pay per article). Whereas small news outlets can, and should, charge a premium.
Because local avidity should not be under-rated. It caters to an audience of enthusiasts that will show less price sensitivity, because they will always care more than "outsiders."
Hope this helps shape the debate.

Wednesday, May 13, 2009

It's the business model, stupid.

So, Al Giordano has a post up entitled Black and White and Dead All Over over at his website, and frankly, it's tiresome, and simple-minded, in the extreme.
The basic gist: Newspapers are folding, becoming online editions, and generally exhibiting acute signs of suffering. And what that means, per Giordano -- who is out on the speaking circuit -- is that a thousand flowers will bloom in the absence of dead-tree media.

First, to be kind, let's stipulate where he and I agree.
a) The fall and trouble associated with papers is widespread, rampant, destructive of contemporary journalism, and the informed public will suffer as a result.

Okay, that was a short list. Here's where he and I disagree.
a) That journalists had it coming because we were all of us in the pocket of corporate media. That's simply not true at the local level, or even at the regional level. Most of us -- as in 99% were trying to do a good job.

b) That the Internet has now flanked print media. Also untrue. Newspapers and magazines continue to offer sound journalism because -- drumroll -- they throw resources after trusted reporters who know they're onto something. The blogosphere is great for opinion, often deep insight, and when it comes to breaking news -- sadly late. There are exceptions, but they prove the rule. Josh Micah Marshall over at TalkingPointsMemo.com is the exception for his tenacity in following the State Attorney Scandal. Individual journalists like Walter Pincus, and his contemporaries are the exceptions because they have deep wells of contacts. Most of the Internet blogosphere have a small network of contacts that are useful, occasionally, for breaking news. But not consistently. Moreover, the blogosphere has few resources to do vital things like file FOIA requests, go to meetings, network on the payroll, etc. -- the typical things journalists do when in the field that waiting for AdSense bucks has not yet been able to duplicate.

c) That the sooner the traditional media are gone that it will create a vast wellspring for the blogger to pick up stories. Actually, here, he and I agree, but only partially. Yes, if traditional media die, this will create an opportunity for the blogger. But only if they die, which implies that while traditional media continues to limp onward, that the blogger is shut out. Surely, if traditional media die, those with something to say will have to come to the blogger, and then the tireless blogger will receive a well-deserved scoop. But until then, sources (especially whistleblowers) will continue to gravitate to the news outlets where their statements can have the widest impact.

All of this cuts to the twin issues of audience and revenue model. It stands to reason that audience=dollars/n, where n is a four to ten digit number. What is important to note is that AdSense is not a revenue model for the individual contributor, unless they have a trust fund, live with their parents, or have become independently wealthy.

Nor have any other revenue models appeared that supplant AdSense, and until Google collapses -- of which it shows few signs -- there likely won't be any models that can supplant AdSense.
AdSense will always favor the momentary attention spike versus the truly valuable -- ie, first draft of history -- journalism, because most people would rather be entertained than informed. Don't get me wrong: I'd rather be entertained than informed, but I'm informed because I know I must be in order to be remotely valuable to society. Being well-informed is always a sacrifice of pleasure, although, I will admit that being even moderately well-informed is its own, twisted reward.

The other thing is that the fate of over-leveraged national media outlets is not necessarily indicative of the overall state of journalism. It's indicative of being over-leveraged.

Bottom-line, until a business model is found for individual correspondents to live on more than the ramen diet, the thousand flowers Mr. Giordano proposes will never bloom.

They'll never even sprout.

Thursday, May 07, 2009

Don't Buy The Hype

This is my 15th year in journalism, and I haven't spent 15 years doing anything consistently, other than eating, breathing, and making music where possible.
Since 1995 or thereabouts, it was clear that the Web was going to change journalism, and it has, but the evolution from print/audio/video to Web remains incomplete.
Which is why I like noting the changes.

So today, three things grabbed my attention: First, Walter Pincus' superb article on the Columbia Journalism Review site, which essentially summarizes all of my views on journalism in the electronic age, and dives deeper, with more historical context. It's a must read, and am very pleased that Metafilter picked it up.

Second, this news over at Techdirt relating to newspapers crawling to Congress for bailout privileges.

And third, this post at Gawker.com on David Simon's testimony on the subject before Congress, and how he has it all wrong.

Pincus has it right. First, the problem for newspapers is debt, much as it is for other sectors of the country. Consolidation has messed things up. Over-leveraged consolidations has messed things up considerably. Second, Google is not the enemy. Third, journalism has lost its way, for a variety of reasons. Downsized newsrooms lack institutional memory, because freelancers are temps by another name, and spreading too few journalists too thin leads to bad coverage.

Techdirt backs up the financial issue, and a review of say, McClatchy (one former employer of mine which strapped itself to buy Knight-Ridder) versus Lee Enterprises (another former employer of mine) demonstrates clearly how Wall Street looks at stocks that are carrying too much debt-load.

Gawker in both the article and the comments upbraids Mr. Simon for a) not being a journalist, really, because he went off to write The Wire, and b) being a techno-Luddite -- both of which are, fundamentally, less-than-savvy arguments.

Newspapers and related, let's call them analog, media will not be saved by bailouts, nor by turning them all into non-profits. Analog media are going through a change period, wherein consolidation is not king, overwhelming debt is not a business model, and Web-based advertising for local and regional coverage is undervalued. On the Web, vertical models are rewarded because they can appeal to global interest groups. Horizontal (geographically-based models) are undervalued because the Web audience is global, and geography (at least for now) less important. This will ultimately, I believe, not stand, because geography remains important for everything that involves atoms, which are still harder to ship, see, and touch than digital items. The Web is maturing in this direction, but not swiftly enough to make up for the loss of classified advertising.

Not every merchant can afford to run a Fedex/catalogue/shipping-based business. Local businesses remain important to local people. Ditto with regional. As transportation becomes pricier, local and regional media will see an upswing in their importance. Ad values will rise accordingly. We're just not there yet, and this is an awkward economic transition for overly-leveraged businesses with loans to payoff.

It's the winter of journalism's discontent. How we manage this transition, and what recrudescence we are able to pull off with respect to journalism's core values will be important.
If you're a journalist like I am, this period of soul-searching and concentration on our core values will be important in the near-term.

Think of it as a mix between cognitive and shock therapy.
But we will get through this.