Tuesday, April 28, 2009

A tale of two very different journalism start-ups

One journalism start-up tries to restore things to the way they were. The other is looking to a different future. Bill Grueskin, academic dean at Columbia University’s Journalism School and a former managing editor of WSJ.Com, compares them in this guest post.

By Bill Grueskin

You can learn a lot about where journalism is headed by looking under the hoods of two new startups.

The companies – Journalism Online and Publish2 – share a common goal, to help save journalism. But they couldn’t be more different in they ways they’re organized, the backgrounds of the executives or the solutions they offer.

Journalism Online is a weeks-old venture founded by Steven Brill (founder of American Lawyer), Leo Hindery (former telecom chieftain who was the partner of Newsosaur Alan Mutter back in their cable-TV days) and Gordon Crovitz (ex-publisher of The Wall Street Journal, where he was my boss when I was managing editor of WSJ.Com.) Their group vows to provide streamlined ways for publishers to generate online circulation revenue.

In the other corner is Publish2, run by two young guys you may never have heard of, Scott Karp and Josh Korr. Karp ran digital strategy at The Atlantic, and Korr helped develop a Web site for the St. Petersburg Times, but their combined experience is a pittance compared to what the Brill/Crovitz/Hindery team can muster. Still, their company has raised $2.75 million in Series A venture funding and $1 million in venture debt.

The two likely don’t see each other as competitors; indeed, they’re rarely cited in the same article or blog post. But I happened to interview Crovitz and Karp separately one day last week, and was struck by their widely different visions of journalism’s future.

Crovitz is a thoughtful (as in Rhodes Scholar-thoughtful) gentleman who oversaw much of the growth of the Online Journal. In our interview, he outlined a four-pronged strategy, ranging from providing a commerce system for publishers to devising aggressive marketing plans to sell subscriptions across the board for multiple outlets. His group also wants to help negotiate licensing and royalty deals with aggregators, which may explain why they brought attorneys David Boies and Theodore Olson to the company’s board.

Crovitz believes a coordinated effort to build subscriptions could bring scale and lower costs. In the late 1990s, when a one-year WSJ.com subscription cost $49, the incremental cost to serve a new subscriber was $8, Crovitz said. By 2006, the price of that subscription was $99 while the cost of serving the subscriber had dropped to 85 cents.

Brill, who is Crovitz’s co-founder, told Paid Content recently that the technical side of this venture hasn’t been hashed out. “We’re talking to a whole variety of developers,” Brill said, adding that launching an e-commerce site “isn’t rocket science.” (Actually, having seen the pitfalls of an online commerce system, I’d say rocket science is pretty close to what they’ll need, especially if this is going to work across multiple content-management systems.)

Toward the end of our interview, Crovitz brought up an interesting insight. He said his firm would also try to address the “more complex issue” of how publishers long enjoyed “a direct relationship with readers. Now we’re entering an era of multiple devices, and it’s not clear publishers can maintain their relationships with readers online. The device sometimes has the relationship, not the publisher.”

Which gets us to Publish2.

Karp, the venture’s CEO, agrees newsrooms are in a terrible fix, and identifies similar issues about publishers and readers. In the media business, he says, “it’s the package that’s valuable, not the individual article. … Newspapers used to own the distribution channel; they used to be at the front end.” But now, “Google and others have taken over distribution. And newspapers are at the tail end, which is the least profitable.”

Karp wants news organizations to get back to the distribution business by sharing their own content broadly and surfacing others’ content aggressively. That goes against the instincts of many journalists, but even when reporters buy into it, the process in most newsrooms is clunky (lots of cutting and pasting, with links often stuck under the ads). So Karp offers a platform to make that process as seamless as possible.

To see this in action, Karp cites coverage of floods last January in Washington State. As high waters inundated highways and breached levees, editors who ordinarily would compete with each other used Publish2 to learn what other news organizations were reporting and to sharing that content as part of their overall reports. A fuller explanation of that effort appears here, and an example of how this looked on one of the sites appears here.

The idea of journalists surfacing links from other sites isn’t new. What is different is that Publish2 enables sites to fuse content sharing with the reporting process, and it also provides ways for journalists to surface the links they gathered in the reporting process. “Collecting links should be a work product,’’ Karp says. “Newsrooms can use and publish those links instead of throwing away that research.”

Karp is rolling out an ambitious project to track spending in the federal stimulus plan, marrying reporters’ content and citizens’ tips, but – and this is important – always through the lenses of journalists. He calls this as a “new ecosystem” of news, that is, a way of understanding that the Web empowers sharing of information, and that journalists have a special role to play in identifying worthy content and evaluating the quality and credibility of others’ reporting.

To participate in Publish2, you go through a short approval process that includes adherence to an ethics code with standards designed to “separate journalism from marketing, PR, paid advocacy or personal expression, which on the web are increasingly difficult to differentiate.”

So, which vision will succeed?

As Crovitz demonstrated at Dow Jones, a subscription strategy can generate substantial revenue and define a uniquely valuable audience.

But as I wrote a few weeks ago here, it’s very hard to ask readers to pay for a publication you’ve trained them for more than a decade to expect to be free. Is there a single example of this having worked in the media business – or any business? (Readers, feel free to cite examples in the comments section.)

Too often, this strategy is portrayed not as a business case, but as a moral argument, viz., good journalism costs a lot of money, and so readers ought to pay for it. That entails its own risks. Or as Jonathan Landman, deputy managing editor of the New York Times, told alumni of Columbia’s journalism school Saturday, "Imposing a pay wall could be risky without being bold."

Karp’s business model is also uncertain. He foresees paid, commercial applications of his platform, as well as building a broader advertising network among news organizations.

But what Publish2 also represents is a vision of how journalists can take advantage of each other’s strengths and readers’ knowledge, creating content that transcends what any one newsroom can do.

Right before Karp came to my office last week, he visited the New York Times’ newsroom and made a quick convert in Michael Moss, an investigative reporter. Moss has been writing about food safety, and he asked Karp for ways to maximize reader attention to his investigative work.

Karp turned the tables and “suggested reframing the issue by thinking of ways to generate interest before the stories run,” Moss said. So Moss put out a direct appeal to readers for tips.

While Moss says he got at least a dozen “substantial” leads, what was more important is that he is creating “a community of people who are interested in food safety. … They like that they are participating in the creation of investigative stories.”

So there you have it: One new firm seeks to generate much-needed revenue by building a platform for subscription services, another seeks to generate new forms of journalism with a platform to share and distribute content. It’s hard to reconcile those two visions of journalism’s future.

* * *

Here’s an addendum to the points by Crovitz and Karp on news organizations losing their preeminence in the distribution channel. According to Sharon Waxman, Google CEO Eric Schmidt is saying his company will launch an algorithmically based filtering system in six months to surface news “the reader is looking for without knowing they’re looking for it.” That sounds like a turbocharged Google News, personalized without all the muss and fuss of setting it up.

Both the New York Times and Washington Post will “get this treatment,” Waxman writes ominously, and “Google believes it will be able to sell premium ads against premium content.” Will the news organizations make more money? Not directly, said Schmidt, adding only they might get more traffic from Google, which they can monetize on their own.

Monday, April 27, 2009

Diving circulation? Raise newspaper prices

Instead of fretting about the all-time record dive in newspaper circulation the last six months, publishers should focus as never before on the quality, not the quantity, of their audience.

That means, among other things, proving the passion and loyalty of their readers by raising the single-copy and home-delivery prices of their daily papers to at least the cost of a venti, double-shot, half-caf soy latte. They go for $3.90 apiece at the local Starbuck’s.

Serious newspaper readers will be glad to pay the price, especially now that nearly all of them have gotten the message that the industry needs their support to continue producing the product they value.

And advertisers of many premium products and services will gain new respect for a medium capable of attracting affluent, well-informed and passionate individuals willing to spare the price of a venti latte for a newspaper.

As proof that premium circulation pricing works, look no further than The Economist, whose single copies sell for the cost of the approximately 1½ venti lattes. Named the top-performing magazine of the year for the last two years by AdWeek, the Economist in 2008 grew ad revenue by 25.5% last year to $131.5 million and boosted its circulation by 9.2% to 786,977.

The Economist’s success in 2008 compares with the average drop of 7.09% in daily newspaper circulation and an average decline of 5.4% in Sunday sales in the six months ended on March 30 that was reported today by the Audit Bureau of Circulations, the industry-funded body. The record 7.09% decrease in daily circulation in the last six months rivals the 8.1% fall in daily circulation in the prior 12 months.

The decline in circulation is long running, accelerating and seemingly irreversible.

The last time daily newspaper circulation increased was in 1984, when it peaked at an average of 63.3 million papers per day. Using ABC numbers and historic data provided by the Newspaper Association of America, it is possible to estimate that daily newspaper circulation today has fallen to 43.8 million copies. Sunday sales now are 44.3 million vs. an all-time high of 62.6 million in 1990.

The last time newspaper circulation was this low was in the mid-1940s, when the population of the United States was half the size that it is today. Today, only 18 out of every 100 adult Americans buys a newspaper. That is less than half the penetration the industry enjoyed in 1945.

Not surprisingly, metro newspapers suffered the steepest declines in the latest circulation reports. Leading the carnage was the New York Post, whose daily sale plummeted a staggering 20.6%. As you can see from the table below (click to enlarge), the Post was followed closely by the Atlanta Journal-Constitution, Newark Star-Ledger, San Francisco Chronicle and several other double-digit losers.

Many of the drops were self-inflicted, as publishers reined in their distribution areas to reduce the high costs of shipping comparatively small numbers of newspapers to distant counties.

Significantly, the Wall Street Journal, which pursues a premium subscription and advertising strategy was the only one of the top 25 papers to show a circulation gain. Comparatively modest circulation declines were reported by New York Times, which sells in my neighborhood for $1.50 (plus tax) during the week and $5 (plus tax) on Sunday.

After years of increasingly accelerating circulation declines, there can be no denying that print newspapers have become niche, not mass, products. This means publishers need to begin marketing them in a different way.

When the traditional newspaper model was to maximize reach by maximizing audience size, it made sense to keep subscription prices as low as possible to be able to charge advertisers the highest possible rate for the largest number of readers.

“I sell bellybuttons,” said my friend Bob McCormick back in the 1980s. He was an ace ad salesman who at one point headed the agency that published the San Francisco newspapers.

But mass quantities of bellybuttons don’t cut it for most advertisers in an age when they can connect rapidly and oh-so-cost-effectively with a prospect on the Internet by offering an ad that appears only when a customer Googles whatever magic words the advertiser has selected.

Best of all, the advertiser pays only when a prospect clicks on a Google keyword ad; the rest of the dozens of times the ad appears, the advertiser doesn’t pay at all.

Printed newspapers can’t compete with Google, of course, because they are unable to offer targeted, interactive advertising. But they can take a cue from successful magazines by targeting their customers geographically, demographically and in other ways.

By charging premium prices to carefully targeted groups for single copies and subscriptions, newspapers will reinforce the value of the product to their customers and re-establish their value to advertisers.

In so doing, the demoralized practitioners struggling with the challenges of the industry also may end up proving the value of the product to themselves.

Thursday, April 23, 2009

Content cops or Keystone Kops?

Beleaguered newspaper and magazine publishers may gain a certain amount of emotional satisfaction from mounting elaborate efforts to chase down online content poachers, but the payback may be more psychic than economic.

While print publishers are well within their rights to crack down on web publishers who violate their copyrights through the unauthorized use of articles and visual media, the simple facts are:

:: There is no efficient way to identify and extract payment from the vast array of web publishers who may be ripping off content.

:: There is a limited population of publishers generating enough money to make the effort worthwhile.

Accordingly, there is a danger that the emerging initiatives among newspaper and other publishers to police content poachers may come to look more like an episode from the Keystone Kops than an effective and profitable business strategy.

If everything were hunky-dory in the publishing business, this exercise in enforcing the value of copyright might worth a shot. It should be noted, however, that the music industry, which has been aggressively trying to battle pirates for 15 years, admits that 10 free songs are downloaded for every one that is purchased.

But things are far from hunky or dory for publishers, as the latest dismal earnings reports attest.
A content crackdown could prove to be a costly and unnecessary distraction at a time that publishers ought to be focusing on controlling the most important thing they can control: Monetizing the visitors and page views at their own sites, an objective that has become increasingly elusive for many of them.

The above conclusions result in part from an effort to gauge the potential effectiveness of tracking down copyright violators by using a service called Attributor, which at the moment represents the industry standard in poacher-nabbing technology.

As you can see from the results of the test-drive here, the state of the art at this writing suggests that a considerable amount of human judgment/capital would be necessary to actually DO something about unauthorized content poachers.

It is not the least bit clear that the cost of pursuing violators ever would be equal to the additional revenue it might bring in. Here’s an example from the test-drive:

I discovered that 99% of one of my posts had been grabbed and republished by a site called Newspapers Watch, which describes itself as written by “Musomar” a "journalist with 25 years of experience" in Malaysia.

This particular site does not seem to carry advertising, so there would be no commercial reason to pursue the author. Even if the site did have ads, the sales would be so trivial – and the hassles of tracking down a copyright violator in Malaysia to complicated – that no one would bother to do so.

This case was not an extreme example. In reviewing all the instances identified by Attributor, I found no violations by a site whose profile or advertising sales were so significant that I would dream of seeking payment.

Based on this admittedly limited test, it appears that it would make sense only to go after only the relatively small number of sites what both use (a) lots of unauthorized content and (b) generate significant advertising revenues.

How many of them are there? Honestly, I don’t know. But, judging from the sampling turned up by Attributor, probably fewer than you would think.

Sites sophisticated enough to generate lots of traffic and advertising revenue generally will be smart enough to avoid copyright violations.

They either will subscribe to syndication services or try to position excerpts from copyrighted articles – see this example from Huffington Post– as fair use. Fair use is the provision of the copyright law that allows snippets of protected content to be used in news stories and reviews.

In other words, online publishers with something to lose either will pay print publishers or figure out ways to continue using copyrighted content for free.

The ones who have little or nothing to lose may well continue to use copyrighted material brazenly. Does it make sense for publishers to hire David Boise and Theodore B. Olson to pursue them?

If the time, trouble and cost of policing content are likely to net only limited amounts of new revenue for print publishers, don’t they have more important things to do?

Attributor test delivers so-so results

Attributor pretty much represents the state of the art these days in tracking down copyright violators. To see how well it works, I took a test drive of the free version it offers to bloggers. The results are fair to middling.

Attributor works by gathering all the content on a publisher's website and then crawling the web to see if it finds sites that have picked up some or all of an article. When it finds a match, Attributor tells you what percentage of the article was used and links back to the site that used the article. In some cases, the quote is highlighted in yellow on the site that used it.

In a test of the free version offered to bloggers, which presumably is less robust than the version sold to major publishers, I discovered many new places where Newsosaur had been quoted that I had not known about before.

Most of the web publishers using Newsosaur content used limited snips from this blog and properly linked back to me. Many of the sites carried no advertising and none of them appeared to be large enough to generate sufficient advertising revenue to make me want to get on the phone to demand my fair share.

As useful as Attributor was, it also missed a number of places where my articles had not only been cited but largely reprinted intact. I knew about the prior instances in two ways: By tracking back inbound links to my blog and through Google agents that alert me when “Alan Mutter” or “Newsosaur” is discovered by Google as it trolls the web.

Attributor also reported a few false positives, including stating that some of my blog had been reprinted – which it had not – on the site of the consulting and investing firm where I am a partner.

Verdict: This is a workable but not foolproof solution. As Attributor grows and indexes more of the web, its hit rate presumably will get better. The product today will require a good deal of human intervention to be useful to any publisher.

Monday, April 20, 2009

3 jailed journalists, 2 very different reactions

Three American female journalists are being held on charges of spying in two of the scariest countries in the world but their news organizations couldn’t be treating the matters any more differently.

Everyone knows that Roxana Saberi, a contributor to National Public Radio in Iran who has been in custody since January, was convicted last week of spying after an evidently coerced confession. You know that, because NPR and other media have been covering the story heavily.

But you may have forgotten that Laura Ling and Euna Lee, two correspondents for Current TV, have been held on similar charges in North Korea since mid-March. That’s because their employer has been maintaining absolute silence about the case.

While you can find 60 mentions of the Saberi case at the NPR website and 16 mentions of her case at Current TV’s site, there is not a word about the plight of Ling and Lee at Current TV. Even NPR has mentioned the Ling-Lee case nine times.

“The most effective thing we can be doing [to help Saberi] is constantly and consistently shining a light on the story,” said Vivian Schiller, the chief executive of NPR, speaking tonight on the PBS News Hour. “It’s the best thing we can do for her.”

In the effort to keep Saberi’s case at the forefront, the network even drew strong support Sunday for the jailed journalist from President Obama.

At Current TV, however, “no comment” is exactly all that chief operating officer Joann Drake Earl had to say today about the case of her two journalists, who were seized at the border between China and North Korea. They had traveled to China to interview North Korean defectors but apparently crossed the frozen Tumen River into North Korea.

It’s not likely that Current TV is any more indifferent to the welfare of its journalists than NPR, but Current TV apparently has been advised to keep a tight lip and low profile in the case so as not to endanger negotiations with the totalitarian and dangerously eccentric North Korean government.

Current TV has been relying on the help of Swedish diplomats, because the United States does not have diplomatic relations with North Korea. Current TV doubtless also benefits from the political clout of former Vice President Al Gore, who is the founder and chairman of the channel.

Even if Current TV feels obliged to hold its peace, there’s no reason for the rest of us to forget about Laura Ling and Euna Lee.

Sunday, April 19, 2009

He makes $1 million crowdsourcing sources

Peter Shankman, who describes himself as a marathon-running, sky-diving, cat-loving PR guy, says he is grossing nearly $1 million a year by using the web to help reporters find sources for stories.

He crowdsources sources with a nifty and thoroughly modern service called Help a Reporter Out, or HARO. It works like this:

A reporter who needs to interview someone for a story sends Shankman a request, which he adds at no charge to a three-times-a-day email he sends to some 75,000 recipients who are looking for publicity. The recipients include individuals and fellow flacks.

When a source spots a story where she thinks she can help, she contacts the writer and the connection is made. Shankman says 25,000 reporters have used his service and he reckons that nearly all of them have successfully sourced sources in the “12½ months” he has been in business.

For those too rushed to wait for an email, Shankman also posts urgent requests at his perch on Twitter, which had 37,214 followers at this writing.

The subjects requiring experts in one recent email ran from “spirituality during pregnancy” to families facing mortgage foreclosure to “whoopie pies,” which evidently are a Pennsylvania Dutch confection.

Recent urgent tweets sought “people leaving/ready to leave NYC b/c high taxes,” “bosses w/employees afraid they're going to get laid off so they're sucking up” and “therapists: is facebook coming up more in therapy sessions with clients?”

Reporters seeking sources range from freelancers and aspiring book authors to name-brand news organizations like the Atlanta Journal-Constitution, Fox News, Ladies Home Journal, Christian Science Monitor, Motley Fool and the PBS Nightly Business Report.

Shankman makes money by charging between $1,500 and $2,000 for a short, chatty text ad he runs at the top of each email. Recent sponsors have included a service that helps you contact celebrities, a company that sells computer-security software and the makers of the Dot Girl's First Period Kit.

Shankman says the number of email subscribers and source requests has climbed by the week since he launched the service. The rollout has been entirely viral, with one HARO user telling another, telling another, telling another…and so forth.

To keep up with the demand, Shankman said he has hired one editor and one assistant. That would seem to leave a tidy profit for Shankman to share with his sofa-hogging cats, Karma and NASA.

Shankman says he is an early AOL veteran who then operated a New York-based marketing boutique that once served such clients as Disney and American Express. He also wrote a book explaining why companies should stage “outrageous PR stunts.”

Far from being outrageous, the sources who offer themselves up on HARO seem to be legitimate and useful to the journalists, said Shankman in an all-email interview. He admitted, however, that there have been a few “oops” moments.

One case was a family featured in the Wall Street Journal whose business was “being killed” by the economy, said Shankman. “They’re now doing much, much better,” said Shankman. But even that’s “heartwarming,” he adds, ever the flack.

Thursday, April 16, 2009

Don’t blame Google for newspaper woes

Newspaper people are wasting time and wasting their breath in blaming Google for the failure of their products to thrive in the digital universe.

They need to look to themselves – not Google, Yahoo or some other third-party savior – to begin strengthening their franchises and building up their businesses on the Internet.

The airwaves have been clogged in the last couple of weeks with newspaper people alternatively blaming Google for the industry’s problems or begging Google to come to their aid.

Google isn’t responsible for saving the newspaper industry or journalism. Publishers and editors are.

As a rationally managed corporation, Google will do only the things that advance its best interests. The company isn’t going to start paying for newspaper content or sharing its revenues with publishers unless it is required to do so to grow its business, defend its franchise or comply with some as-yet-unenacted law.

For the record, newspapers actually had a head start over Google. But Google “got” the web. And newspapers didn’t. That’s not Google’s fault.

Before you blame Google, consider:

:: Several newspapers launched their first websites by the time Larry Page and Sergey Brin met at Stanford University in 1995 and started noodling on a research project called BackRub.

:: Two or three years before the first public peek of the still-nascent Google in 1998, the ill-fated and short-lived New Century Network had a plan to aggregate the content from 140 newspapers in searchable format for the web. The plan, which included the idea of inserting ads in selected markets at the push of a button, died when NCN succumbed to industry infighting.

:: It was not until October, 2000 – a good five years after most newspapers were up and running on the web – that Google figured out how to make money off its spectacularly growing traffic by selling keyword advertising.

As Google and many other savvy online publishers learned how to capitalize on the openness and interactivity of the Internet, newspaper publishers stubbornly spent the last 1½ decades trying to sustain their once-enviable print business model in the face of overwhelming evidence that everything was changing: technology, consumer patterns and advertiser behavior.

For an excellent example of the sort of opportunities missed by the industry, look no further than this tale of how the Boston Globe blew the chance in 1995 to buy a significant share of Monster.Com for a comparatively modest $1 million.

Or, ask yourself why Dow Jones, the publisher of the Wall Street Journal, never started its own online stock site. Instead, Dow Jones waited until 2004 and spent $520 million to buy MarketWatch, faithfully printing stock listings in the newspaper all the while.

Today, print advertising has fallen off a cliff because consumers find it faster, easier, more timely and more fun to get their news online. Advertisers increasingly are gravitating to online media instead of print, because it is cheaper, highly targetable and the results can be readily measured and analyzed.

None of this is Google’s fault. Blaming Google won’t help.

Monday, April 13, 2009

Newspaper web sales lag by every measure

By every measure, online advertising sales at newspapers seriously trail the growth of the rest of the interactive market in the United States. And the industry is falling farther and farther behind.

The inability of newspapers to capture and retain their fair share of digital advertising likely is one of the reasons that a growing number of publishers are thinking about charging for access to their websites.

Frustration over fast-shrinking online market share also may be why some publishers were so outspoken at their annual convention last week about the revenues they believe they are losing to online aggregators and to web publishers who violate newspaper copyrights by running unauthorized stories on their sites.

Several indicators illustrate the failure of the newspaper industry to thrive online. The following facts emerge from an analysis of sales data reported by two trade groups, the Newspaper Association of America and the Interactive Advertising Bureau:

:: Interactive revenues for newspapers dropped by 1.8% in 2008 to $3.1 billion at the same time over-all online ad sales in the United States surged 10.4% to a record $23.4 billion. See Sales Growth graph below.

:: Where there was only a $6.1 billion spread between annual newspaper sales and total online revenues in the United States in 2003, the gap widened to $20.3 billion in 2008. See Annual Revenue graph below.

:: The newspaper share of online revenues, which peaked at 16.2% in 2005, has declined annually ever since, dropping to an all-time low of 13.3% in 2008. See Market Share graph below.

Although it is reasonable to expect that newspaper market share would shrink in light of the explosive rise of online competitors ranging from YouTube to teeny blogs earning a few bucks a month from a handful of keyword-ad clicks, this argument seems insufficient to explain why online newspaper advertising declined last year when the sales of the over-all industry rose by more than 10%.

One of the reason newspapers trail the over-all online industry is that they offer no search advertising, the largest and fastest-growing category of online advertising. Those are the keyword-driven ads that appear next to searches at Google, Yahoo and Microsoft and other search sites.

Another reason for the under-performance of the industry is that newspapers are inordinately dependent (discussed previously here) on generating online sales from their traditional print advertisers, a business that is in both secular and cyclical decline.

As of the end of 2008, print advertising sales had dropped 23% from a record high of $49.4 billion as recently as 2005. Deep print sales declines likely occurred in the first quarter of this year, too.

The worst part about the print-to-web “upsell” strategy is that a substantial portion of online newspaper revenues historically came from classified ads sold to three verticals suffering mightily in the economic downturn: recruitment, automotive and real estate.

Even before the collapse of the economy battered each of these categories, advertisers increasingly had been shunning high-priced newspaper advertising in favor of sites like Craig’s List, sites targeted to job seekers in particular professions and sites optimized for selling houses or cars.

The only way newspapers can turn around their lagging digital sales performance – assuming it can be turned around – is for them to develop web and mobile venues that are less like newspapers and more like the interactive, viral and fun environments operated by their competitors. (More tips here.)

Newspapers also will need to develop more sophisticated online revenue solutions than selling the dollar-a-holler, backfill ads they use to fill the substantial banner inventory that many of them seem unable to sell on their own.

Sunday, April 12, 2009

Why Strib lets print scoop its website

Although most newspapers rush to publish their scoops on the web as rapidly as they can, the Minneapolis Star Tribune has decided to break certain major stories and projects in print and not publish them on its website until a few days have passed. Editor Nancy Barnes tells why she is doing this – and how it’s working – in this guest commentary.

By Nancy Barnes

I’ve gotten more response from readers on my print-first announcement than anything I’ve written in two years.

Most of the comments are very positive, thanking me for rewarding paying customers with exclusive content. A few have called me an idiot and one told my publisher he should fire me and publish it as a print exclusive.

Overall, though, I’ve been pleasantly surprised by the response.

For now, we are holding out the best of the Sunday content, and putting it online on Wednesday. But breaking news, of course, still goes up on our website immediately.

What types of stories are we holding out?

Exclusive investigative pieces, most projects (except those that cannot succeed without the online pieces), deep profiles, mid-range enterprise, etc. In the Sunday paper, we label this as content that is only available in print and we are trying to make sure there is at least one piece in every section.

Why are we doing this?

We’ve been creating so much content just for the web and have had great success in driving traffic to the web that I just wanted to do something for our paying customers.

We don’t believe we will see a significant decrease in web traffic, since so much of that is driven by spot news. But we’re watching. We may expand this model in the future if it turns out to be successful for us.

You can see what stories we are holding out on the web on Sunday, because we promo them as print exclusives on the website. Some of these promos have been getting a lot of traffic, particularly if it is on a topic of great interest.

Last Sunday, for example, we had a story on the collapse of a well-known auto dealer’s empire that we held out only for print. That promo got tremendous traffic.

Some subscribers who read both online and in print have asked me to make the print-first content available to them online in a more timely manner, so they can read any way they want to. This is probably a next step for us.

We’ve only been doing this about two weeks, so I don’t think it’s possible to point to any impact on circulation.

This is an experiment. It might fail.

But I think all of us have to try to do things differently, to challenge the status quo and the groupthink, to find some new ways of doing business. If it doesn’t work, we haven’t lost a thing.

Wednesday, April 08, 2009

Publishers seek ad block on copyright abusers

Alarmed by what they believe to be widespread piracy of their copyrighted material on the web, some publishers want to force companies like Google, Yahoo and Microsoft to stop serving ads at sites carrying unauthorized newspaper content.

The movement to target the pocketbooks of content poachers emerged this week at a private meeting of top industry executives that coincided with the annual convention of the Newspaper Association of America in San Diego.

The private meeting, which originally was revealed here, was called to address the ways the newspaper industry might respond to the increasingly fierce online competition that has contributed to the 23% decline in advertising sales since the industry booked a record $49.4 billion in revenues in 2005.

While many of the senior executives attending the meeting increasingly are focused on ways to charge for the expensively produced content most of them give away for free on their websites, another top concern galvanizing the participants is what they see as the unfettered use of copyright-protected newspaper stories on websites, blogs and other online venues.

“If a newspaper runs a 26-paragraph investigation and a blogger publishes the entire story on his site, that is not fair use,” said one publisher who participated in the meeting. “Although Google will not argue that publishing all 26 paragraphs is fair use, Google and the other online ad services benefit by selling ads on that blog. The ad services are profiting from the improper use of our copyrighted material. We’ve got to put a stop to this.”

Fair use refers to the exception to the copyright law that permits someone to publish an excerpt of protected content in such cases as a quote in a news story or a video clip accompanying a movie review. The problem with fair use is that publishers and fair users often differ on how much content is fair to use.

The issued was summed up succintly by Eric Schmidt, the chief executive of Google, in a speech to publishers on Tuesday. “Lawyers go to different schools,” said Schmidt. “If you went to School A, you were told one thing [about fair use]. If you went to School B, you were told something else. All the lawyers who work at Google went to School B. All those on the other side went to School A.”

What this means in practice is that allegations of fair-use violations can only be resolved in court on an after-the-fact, case-by-case basis – and only when a publisher is sufficiently aggrieved to devote the time and expense necessary to sue the party accused of publishing the disputed content.

But publishers don’t want to expend their increasingly precious resources scouring the web for content poachers and then hauling them into court.

Instead, a number of them want to begin adding a bit of computer code to every copyrighted story and telling such online ad services as Google, Yahoo, Microsoft and Value Click not to serve ads to any page containing a story carrying a copyright tag. After putting the ad services on notice, the publishers presumably would watch for infractions and, if necessary, challenge the deep-pocketed companies in court.

Tagging technology already is used to track Associated Press stories to see where they go on the web. Evidence of the widespread misappropriation of AP stories is why publishers have become sufficiently alarmed to consider seeking similar protections for their own articles, images and videos.

In addition to the technology solution, the publishers also discussed a separate but parallel initiative to lobby Congress for changes to strengthen copyright protections in the Digital Millennium Copyright Act of 1998. “The law was passed in the days of Prodigy and CompuServe,” said a publisher. “It’s way out of date today.”

The other hot topic among newspaper publishers this week was whether and how to begin charging for at least some of the content on their websites.

Participants in the private meeting, which was attended by an attorney to ensure the talks didn’t stray into inappropriate territory, said that publishers do not appear to be inclined to adopt a common, industry-wide protocol for charging for content. “There is a general feeling that newspapers cannot get together” on charging for content, said the participant, citing the group’s fear of being accused of engaging in anti-competitive conduct.

“There also is still a lot of confusion and trepidation about charging for content,” said the publisher. “If you take a 180-degree turn in the road, it is not easy.”

Monday, April 06, 2009

The last rant: Failing papers ‘bring me joy’

The more the problems of the media mount, the more that newspaper-bashing comments are flowing to this blog. As of today, the media bashers can save themselves the trouble, because I will reject them, one and all.

Before I turn off the spigot, I want to share the mother of all anti-MSM rants to illustrate the virulent hostility that many feel toward the press. Journalists and publishers ought to know what they are up against. After taking note, they should move on to more constructive pursuits.

The following 1,181-word broadside scourges journalists, publishers and even journalism educators, whose ranks I joined earlier this year as a member of the adjunct faculty at the Graduate School of Journalism at the University of California at Berkeley.

Like the authors of most such efforts, the writer is anonymous. (UPDATE: The ever-vigilant Mark Potts notes that, unbeknownst to me until now, a similar version of this post appeared at AngryJournalist.Com.)
And now, here’s the last anti-media rant you’ll see on this blog:

By Anonymous

Seeing newspapers fall apart brings me joy. Not for those suffering loss of income of course, but rather I see a tremendous opportunity for entrepreneurs to serve customers for social gain and profit.

In their present incarnation, newspapers are regional monopolies of sales and distribution of display advertising. As such, they charge exorbitant fees for their advertisements to support and protect their monopolies – leaving few resources actually to gather news. I left that business after I witnessed the way the monopolists practiced it.

Entrepreneurs exist to slay bloated, mismanaged so-called businesses just like these. And monopolist newspaper owners know this. That is why they have developed – for decades, at every deliberate step – a program of undermining competitive business practices.

For this reason, we all want to see them fail, no matter the cost or collateral damage.

Joint operating agreements demonstrate the most obvious example. Natural monopolies define the business. High barriers of entry: fancy offset web color printing presses, wide geographic house-to-house distribution and big staffs.

The way the business was originally established, it was very difficult to gain a foothold. Only the most daring would spend the amounts of money required to compete.

To punish them, media owners with political influence convinced lawmakers to permit the ultimate competitive abomination, the joint operating agreement. A JOA allows a single capitalist to take control of two separate, supposedly competitive media entities to extract the profit from both.

The solution to the economic equation admits two variables: capital and labor. The JOA allowed a constraint against competitive capitalists, but what about competitive laborers?

This was the only business that was allowed to hire child labor into the 1980s. I know: I was a legally employed child laborer employed by a monopolist newspaper corporation operating under a JOA in the 1980s. I woke up at 6 a.m. to throw papers on doorsteps at $0.15 apiece plus tips.

The only reason newspapers stopped hiring children was because eventually they realized they could hire ex-cons with driver’s licenses and $800, gas-guzzling, 15-year-old clunkers – and pay fewer of them the same rate as the children they once employed!

But it’s worse than that.

I am convinced these monopolists loaded up journalism schools with operatives to teach students one thing: that journalists should not expect high wages. Then, drape the profession in the flag and a noble patina and inculcate students with the expectation of low pay.

The monopolists installed these operatives at places like Columbia and Northwestern who charge how much for a degree? What other profession trains their workers never to expect to be successful? Why should any worker providing a valuable service to millions of customers not expect to become wealthy? Was it this way in the days before large monopolies took over?

I expect when there was competition among producers – a time when being a journalist was not defined by possessing a qualified university liberal arts degree – a journalist would expect her superior talents would allow her to rise up the income ladder, as with other industries.

The journalist laborer’s expectation of low wages – repeated from the first j-school professor to the last suburban line editor – comes from the top, BY DESIGN, as a cost of protecting the monopolist profit.

Who endows and supports these positions politically within the university system? What sort of academic credentials does a typical journalism professor possess, compared to, say, a physics or law professor?

A guy with a J-school degree and 20 years experience as a mid-level night city editor is damn happy to get a square 9-to-5 teaching gig with benefits. And he owes a debt of gratitude to his benefactors. This is a perverse way to train professionals but a great way to ensure cheap labor.

What is happening to all these journalism degree holders now after being laid off and forced to compete in other fields? What is the value of that credential, training and newspaper experience? I believe the monopolist extracted it.

The monopolists also get away with providing an inferior product: day old news wrapped in layers of plastic weighing five pounds. The informational, or “news,” yield of news versus total ink content is probably less than 30%. The commercial yield is, let’s say, 20% of coupons and information about other commerce.

The rest is literally garbage. This thing is dumped off at your doorstep (if you’re lucky) by someone possibly an ex-con (which is not to say that describes ALL delivery people, but such people find it easier gaining employment as newspaper deliverers than fast-food cashiers. And excellent fast food cashiers probably expect raises or they work somewhere else).

The opinions are usually unhinged screeds rather than sustained appeals to reason. If someone made arguments like these in another professional context, how long could they keep their jobs? Maureen Dowd calls George Bush ignorant names. Pulitzer-Prize opinion maker Cynthia Tucker calls white conservatives racists because they’re white conservatives.

These are not arguments. And at their worst they are dangerous incitements. Karl Marx at least presented an argument, even if it was against monopolist behaviors exemplified by the employers of Maureen Dowd and Cynthia Tucker.

And the reporting. Of the news-ink to total-ink content described above, celebrity and sports coverage is probably close to 50%. Wire coverage from distant areas, say, another 20%, leaving about 30% for local news. Obviously the monopolist knows the cost of celebrity and wire news compared to local original reporting.

As a former reporter myself, I realized that the newspaper was a ridiculously inefficient means of getting valuable local information to people in the community compared to what is technically and economically feasible.

The newspaper paid me a wage to collect information about a local area. I went out and conducted interviews with important officials lasting many hours. I collected data on important meetings, reviewed legal proceedings, observed political processes, etc. I collected thousands of documents, maps, spreadsheets, court filings and pages and pages of interview notes. Now reporters collect other images, audio and video.

One day of solid reporting could literally return many, many megabytes of valuable data about a community. The result – a two paragraph brief that runs on page D-16 usually presented outside of any useful context.

Other than the low pay, this to me was the most dispiriting aspect of reporting. Most of it was literally a waste of time. Under this scenario, how does one worker stand out from another when it’s so difficult to publish the reporting? By kissing a lot of ass, that’s how.

Consequently, ignorant incompetents abound at high levels and quality and working conditions suffer. But the monopolist does quite well, thank you.

I guess my point here is that there is nothing about the practice of daily journalism (and perhaps journalist training) that could not be improved by eliminating these toxic monopolist practices that pervert newsgathering and presentation.

Going from natural monopolist perverse newsgathering to competitive market newsgathering requires one first crucial step: That the monopolists fail.

It will be difficult for any lean, focused newsgathering operation to gain a commercial identity in the shadow of these monsters.

Berkeley sets media-tech leadership summit

A unique, invitation-only conference for senior leaders of technology and media companies will be convened at the Googleplex this the fall by the University of California at Berkeley.

The UCBerkeley Media Technology Summit, which is being sponsored jointly by the Graduate School of Journalism and Haas School of Business, will be held from Sept. 29 to Oct. 1 at the Google campus in the heart of Silicon Valley.

In addition to my teaching duties as a member of the adjunct faculty of the journalism school, I also have been organizing the conference with the guidance and support of Dean Neil Henry and Assistant Deans Gina Rieger and Paul Grabowicz.

The conference is intended to provide the leaders of traditional media companies with new insights into the technologies, consumer behavior and advertising systems that will affect their businesses at a time of momentous change.

At the same time, we aim to memorably underscore the value – and values – of journalism for the participants attending from the technology companies. Those values, of course, are objective inquiry, balanced reporting and effective storytelling.

The intimate nature of the event, which will include a number of opportunities for participants to mingle socially, is designed to provide maximum networking opportunities for some 70 invited leaders from two industries who do not often have the opportunity to interact with one another.

More details are here. To get further information about the conference in the future, please add your name to the mailing list here.

Sunday, April 05, 2009

Publishers zero in on charging for online news

The way to charge for digitally delivered content is a prime topic on the minds of the newspaper publishers meeting in San Diego this week to contemplate the future of their badly battered industry.

Even if charging for online or mobile content is not publicly discussed at the annual meeting of the Newspaper Association of America, participants have confirmed that significant private talks on the subject are taking place among several of the chief executives convened at the Manchester Grand Hyatt Hotel.

The under-the-radar discussions include a sit-down among several CEOs – held quite separately from the convention under the guidance of a lawyer to ensure the talks don’t stray into inappropriate territory – that would be similar to a confab where many of the same leaders discussed the industry’s challenges in January, 2007. Despite the deterioration of the newspaper business in the intervening time, no similar session has been held since then.

In addition to discussing whether and how to charge for the expensively produced content that today is available for free at most newspaper websites, publishers familiar with the agenda for the private session said other topics were:

:: How to recover some of the classified advertising business that has been usurped by Craig’s List and others.

:: Whether to demand payment from aggregators who now freely link to content from their sites.

:: How newspapers might get a greater share of the $10.8 billion in search revenues that represented 46% of all U.S. online advertising revenues in 2008.

Publishers are focusing on charging for at least some of their now-free interactive content because they are desperate for new revenues to replace some of the $11.6 billion in ad sales that have vanished since 2005.

Advertising sales, which produce the vast majority of industry revenues, plunged 16.7% in 2008 to $37.8 billion. That is a 23% drop from the record $49.4 billion in sales achieved by the industry as recently as 2005. The deterioration this year appears to be continuing, if not accelerating, in the scariest economic environment since the 1930s.

Publishers also seem to be recognizing, albeit perhaps belatedly, that further cost-cutting in their newsrooms will degrade the thing that differentiates them the most from all other web competitors: Authoritative and original local content.

At the same time, drastically slumping banner ad rates – they fell by some 50% in the last year – have made it clear that there is no point in generating traffic by giving away free content if you are filling a substantial portion of your online inventory with ads netting as little as $1 per thousand views.

Although publishers may not rush home from San Diego to declare that they are going to start charging for online content, there are few among them who already have not ordered intensive internal studies of the business models and implications associated with implementing a pay strategy.

After comparing notes in San Diego, the executives may come to recognize that the number of publishers willing to charge for at least a portion of their online content is approaching sufficient critical mass that they may be able to pull it off.

Saturday, April 04, 2009

Boston Globe to shut down? Get a grip

The shocking banner headline today reporting the potential demise of the Boston Globe is greatly exaggerated.

The story not only was vastly overplayed but also may serve to unnecessarily damage the newspaper’s already weakened business. The editors, who evidently let emotion overcome their news judgment, should have known better.

While it is unfortunate that the continuing deterioration of the newspaper business is forcing publishers to take previously unthinkable measures to reduce operating costs, it is not the least bit unusual in this toxic economy for the management at a newspaper – or an automaker or any of dozens of other businesses – to ask for concessions from its employees.

The only shock in the news from the Globe is that the New York Times Co. wants only $20 million in concessions from its unions to help offset an expected $85 million operating loss. Given the magnitude of the projected deficit for 2009, the target is surprisingly low.

The givebacks were demanded at a meeting with union leaders on Thursday morning, where NYT Co. threatened to close the paper unless it the cuts are rapidly approved.

Addressing more modest budget shortfalls at the Newark Star-Ledger and San Francisco Chronicle, the respective publishers of each paper extracted concessions of approximately $40 million and $50 million from their unions.

Tough as this will be for employees whose pay, benefits or retirement are cut – not to mention those who lose their jobs altogether – the concessions being sought at the Globe appear to be relatively moderate as these things go.

The Globe’s editors should have recognized this. They would have been well within their rights to publish a story about the management demands and the union response, but they went off the deep end in deciding to top today’s front page with a fat, two-line banner.

Not only are they unnecessarily alarming readers and Globe employees but they also may have harmed the newspaper’s business prospects.

The headline is almost sure to be used by salespeople for competing media to encourage merchants to diversify their advertising spend so they are not over-dependent on the Globe in the event the paper were to succumb.

While few of us dare predict what will happen next in the ongoing drama of the newspaper industry, it seems highly unlikely that NYT Co. would walk away from its $1.1 billion investment in the Globe without trying a few more tricks to save the business.

The Globe may stop spinning some day. But not yet.

Wednesday, April 01, 2009

Five things to do on your furlough

With furloughs becoming increasingly common in newsrooms, here are some thoughts on how to make the best of these potentially stressful situations.

Get physical.

Clean the closets. Paint the bathroom. Trim the rose bushes. Do something completely different from your normal routine that will clear your head and make your muscles ache. Do this first. It is the most important.

Get fresh perspective.

Now that you have your mind off your regular work, you can read the papers and watch the news like a normal person, not like a news person. If the project is painting the bathroom, you have to cover the fixtures with newspapers, patch the cracks, prime the walls and apply two finish coats. To get this done in a day or two means getting up early, working steadily and being physically tired at night. Notice how little time you have to skim the headlines, much less read the jump on sprawling newspaper stories? Now that you have a fresh perspective on the press, you can begin to understand how your audience feels.

Get technical.

Start a blog. Make a video. Learn Flash. Figure out Twitter (if you do, clue me in). This is not so much to build your technical competence as to demonstrate that, yes, you can learn new things, overcome unanticipated challenges and adapt to the inevitable changes that lie ahead in the news business.

Get ready.

Polish your resume. Line up some freelance pieces. Update your network. Having a properly packed parachute doesn’t mean you will use it. But you will feel better knowing it’s there.

Take naps.

Scientific studies have shown that naps reduce burnout, which is defined as “irritation, frustration and poorer performance on a mental task.” Sound familiar? Although your normal routine probably doesn’t allow time for a mid-day siesta, it does now. Take advantage of the gift of time to recharge your batteries. But finish painting the bathroom first.