Monday, January 26, 2009

Gatehouse and Reach Agreement

The New York Times Company and Gatehouse Media have reached an agreement on the tussle over whether violated fair use in how it links to Gatehouse stories. This is something that has had media watchers on edge for quite a while.

No word yet on what the agreement is, exactly. In fact, the story on the Wicked Local site right now comes from the AP.

Thursday, January 15, 2009

When News Breaks, Where do You Turn?

Back in my newsroom days we had a series of feeds coming in on a regular basis, most were TV screens. Of course, we also had the AP wire on our computer screens feeding us breaking news as it came in. For people in the newsrooms this was commonplace.

But in the working world people didn't have this constant feed. People only got the news when they turned on the radio, TV or were told about something from a friend. Back in 2001 I had just settled at my desk with a cup of coffee when a friend IM'd me that a plane had flown into the World Trade Center towers. I immediately ran to the TV to turn on CNN and for a good 10 minutes sat alone in our lounge. Over the next 30 minutes people filtered in to watch, as they had just heard the news.

Flash forward to today when a plane went down in the Hudson River. My first news came from Twitter, which feeds constantly onto my desktop from a program called Digsby. After seeing the news I jumped to to see if anyone else was posting, then hit the major news sites. Inside of 5 minutes I had video streaming from to my desktop.

The video was certainly compelling, but not nearly as compelling as a single picture that a bystander sent from his iPhone through Twitter.

This wasn't the first time today that I turned to Twitter and IM before the traditional news coverage. Earlier in the day I sat in traffic on Totten Pond Road and rather than turning on WBZ to hear that ther was an electrical fire, I turned to my BlackBerry to find out that Totten Pond Road was backed up all the way along my trip. 'BZ only tells me about the major highways, like 128. A quick IM to a friend told me of another open route and I shaved about an hour off my time to work.

That doesn't mean the traditional news venues are worthless, they're not. They give me the perspective and research I need to better understand an event. But for breaking news it's all about eyewitnesses and instant coverage.

It's no wonder, then, that today the Boston Globe announced it would cut 50 jobs from the newsroom. I know, I'm part of the problem.

I just don't know if there's a way to make money on this kind of information flow.

Wednesday, January 07, 2009

Eric Schmidt: Google Wants to Help Newspapers

Fortune Magazine's Adam Lashinsky has an interesting interview with Google CEO Eric Schmidt in which they discuss the future of the newspaper industry. The bottom line? Google would love to help, Schmidt wants newspapers to succeed, they just don't know how to do it. It happens that Dan Froomkin has some good ideas.

I agree entirely with Schmidt on this:

They don't have a problem of demand for their product, the news. People love the news. They love reading, discussing it, adding to it, annotating it. The Internet has made the news more accessible. There's a problem with advertising, classifieds and the cost itself of a newspaper: physical printing, delivery and so on. And so the business model gets squeezed.
Yes, that's exactly the point. People WANT information. They demand it. It's a strange industry in which demand is high, supply is strong, but it still can't figure out how to sustain itself.

For years the industry has been giving us the news for free while feeding us ads. Even when we subscribed to physical newspapers we never paid full value for the news. Those pages upon pages of classified ads, as well as the display ads paid for by the likes of Macy's, Filene's and Jordan Marsh managed to keep our news fully subsidized.

Those days are gone. The business model just doesn't work. We need something else.

Tuesday, January 06, 2009

Branded Journalism: It's already happening

Dave Chase has a great post on Reflections of a Newsosaur about the problems in online ad sales. He's right that news organizations need to make basic changes to their ad sales channels in order to maintain revenue in the short term. admitted as much during the launch meeting for in which the sales executive noted that many advertisers complained that ads on were too high. The solution for was to focus on a smaller geographical area in order to offer cheaper and more targeted advertising opportunities.

But as I mentioned, I still think the ad model is irrevocablly broken and the while Chase offers a short term solution, something else needs to happen over the long term.

I believe that long term news and information will be supported directly by brands. That is, thsoe brands will hire news people to work independently and they will start to offer information. While to the average consumer this information will appear to be the same as before, there will be a subtle bit of branding going on.

When I suggest this to friends the response is one of horror. The idea that a Coke could be supplying entertainment news sends a shudder through their system, leading them to use terms like "icky."

Of course, this move will happen slowly and will have to be handled carefully, but it's already going on.

Tonight while doing the dishes I turned on the MLB Channel to hear some Hot Stove chatter. The MLB Channel is, of course, owned by the Major League Baseball brand and there to promote MLB teams. Both the NFL and NHL have similar television networks, all look like copies of ESPN, often with former ESPN anchors and reporters doing the work, but focused just on one sport.

Sure, there is an advertising play here, but advertising is just one of the revenue opportunities, the rest are about attracting viewers to promote the MLB brand and that of its associated teams. This leads to other licensing opportunities and sales of MLB branded materials.

The "news" is the loss leader.

Sunday, January 04, 2009

The Win/Loss in Changing Media

The Ideas section of today's Boston Globe has a great piece on what's lost when we move from color film to color digital images. Unlike a lot of pieces on the topic, this one doesn't try to lament the loss of film, but take an even look at what we gain and what we lose with the change from film to digital.

I still shoot quite a bit of film along with my digital images. I'm even playing with my pinhole Polaroid, just to see what I can get. My local camera shop greatly appreciates my film habit.

Unfortunately, the thing people haven't yet learned, whether it's film or digital, is how to edit. At least with film people didn't snap indiscriminately hoping for one decent shot. They aimed, shot and then forgot about it for a few months until they bothered bringing them into the local CVS for developing.

The change actually started long before digital back when we went from having to focus and meter to what my wife calls PHD cameras, as in "Push Here Dummy." When I give my son my old manual focus AE-1p, he spends time framing his shot. Hand him a similar auto-focus camera and he snaps much quicker spending less time on framing. It gets worse with digital when people think "I can crop later."

A photo teacher told me that he tells his students to crop with their feet. He also says a major problem with digital, for him, is that he only sees what his students want to share, he can't get a full contact sheet to see what they did right and wrong. One of my great "ah-ha" moments in photography was seeing Diane Arbus' contact sheet and noticing that she had blank images and some lousy exposures.

Not long ago I went to a local camera club meeting where a woman showed off pictures of her trip to Italy. Some of the shots were quite good, but the 20 minute presentation that involved her dumping EVERY SINGLE IMAGE SHE TOOK into a slide show program, then just hitting "go" was painful to sit through. Had she bothered to look through her image, think about the story she wanted to tell and then used the images to tell it, she could have had a beautiful and strong presentation. Instead, she left a lot of us longing for the end of the interminable show.

So while it's easy to click "send" on a few hundred images, think about what you want to say with those pictures. One or two images that tell a story are much better than 25 that say nothing.

Saturday, January 03, 2009

Fundamentally, News Broke

During a recent podcast, Harvard Business Professor Clayton Christensen gave an overview of his recent HBR article on how companies need to change their business models to adapt to new threats. It's a very interesting concept and I plan to read the article as soon as I can get my hands on a copy.

The premise, as I understand it so far, is that traditional business models don't work when new threats arrive. As an example he pointed to IBM, which focused on mainframe computers, but when mini-computers hit the market IBM opened an entirely new division in a new location with new profit and loss models to combat this. It did the same thing when PCs hit the market, opening a different office utilizing different skillsets.

During the recent podcast interview Prof. Christensen praised the Boston Globe for taking steps to change its business model to combat the new reality. Not having spoken with Prof. Christensen yet I have to assume he is referring to and the digital arm of the publication.

The concept, as I currently understand it, lines up with something I've been thinking about for a while: the fundamental problem with the journalistic business model. Traditional journalism is built on the concept that it can be supported by advertising, but separate from it. The journalist reports on the news, the news brings readers, the advertisers then pay for access to those readers.

This model extends back to the penny newspapers of the 19th century. Why sell a newspaper for a penny when it cost more to produce? So you can get the readers and sell access to that distribution channel to advertisers. The more people who read the paper, the more you can charge for the ads. This concept has grown up over the years but it's fundamentally sound.

The New York Times, for example, earned $1,950,021,000 from advertising in 2007, compared with $889,882,000 from circulation revenue according to its financial statements. Advertising figures in 2006 and 2005 were certainly more robust, but the same calculation applies.

Today it's not just the number of people who read your publication, but the type of people. If you're the Boston Globe, for example, and have great penetration in the affluent suburbs, then you can charge more for access to those readers. Most news organizations regardless of medium use the same basic concept: gain an audience, charge for access to the audience.

A main reason this worked was the high barrier to entry for any new news organization. In order to start one you needed:

  • Capital for production;
  • Access to production equipment (printing press, TV cameras, etc.); and
  • A method of distribution (broadcast license, subsribers, newsstands sales, etc).
Each one of these factors made starting a new publication an uphill battle. Sure, there could be a "lonely pamphleteer," but the chances of that person gaining the reach and scope of a Washington Post were remote at best.

Now flash forward to the Internet. Today instead of a printing press you can use a free and publicly available blog, Facebook page or Twitter account. Instead of capital you can simply use the computer at the public library, or the $400 computer you bought for the house. As for distribution, any blog is technically available to anyone on the globe, you just need to tap into the right search terms to attract the audience from Google.

In other words, the news organizations no longer have the monopoply on the audience, so the advertisers no longer need them to reach an audience. The fundamentals are completly broken.

So what now? More on that later.