By Paul Gillin | August 5, 2014 - 12:04 pm - Posted in Business News, Future of Journalism, Journalism, Layoffs, Newspapers

Robot

On one level we can understand the teeth-gnashing that follow the Associated Press’ announcement that it plans to start using robots to write the majority of U.S. corporate earnings stories. Robots seem to bring out the Luddite in all of us. What we can’t understand is why anyone outside of a few shop stewards should want to preserve the jobs that will invariably be lost to this new kind of automation.

Actually, the AP says no jobs will be eliminated. “This is about using technology to free journalists to do more journalism and less data processing, not about eliminating jobs,” wrote Lou Ferrara, vice president and managing editor, on the AP blog. You can bet that robots are going to eliminate reporting jobs in the future, though, just like linotype machines replaced human typesetters and computer pagination replaced paste-up jobs. It’s called efficiency, and job loss is one of the distasteful consequences.

We’d suggest that much of the labor impact will actually be felt overseas, which is where the menial jobs have already migrated. Robo-journalists in India and the Philippines will need to improve their skills to continue to get work from U.S. and European publishers, and journalists in home offices will need to up their games as well. That’s a good thing.

What isn’t good is preserving jobs that eat up time and editors’ attention. In one of our recent assignments we worked with a technology news site that employs a small staff of seasoned journalists but that gets most of its content from an offshore body shop that rewrites press releases and news from other websites. The reporters who write this chum make about five cents a word, and in our view they’re overpaid.

Stories come in full of grammatical and usage errors, and many are missing basic facts or explanations. Professional editors spend hours each day fixing these mistakes and trying to educate the writers, which is a fool’s errand because most of them don’t last more than a few months on the job anyway. These tasks can now be automated, and many of them will be. The result will be at a better quality of work for everyone involved.

Will the stories that robots produce be as good as those that humans could write? Probably not, but it’s the market’s job to judge that. The only thing that’s certain is that the quality of robotic journalism will only improve over time. The human journalists who embrace this trend will learn to use their silicon sidekicks as research associates and fact-checkers. Robotics should ultimately make journalism a much more rewarding profession, but it will cost jobs.

Take heart in the fact that newsrooms won’t be hit nearly as hard as many other workplaces. “The factory of the future will have only two employees: a man and a dog,” said Carl Bass, the CEO of Autodesk. “The man will be there to feed the dog. The dog will be there to keep the man from touching the equipment.”

English: A speech in The New York Times newsro...
A speech in The New York Times newsroom after the announcement of the 2009 Pulitzer Prize winners (Photo credit: Wikipedia)

We finally got a chance to read through the 96-page “Innovation” report commissioned by the management of The New York Times and leaked last week in the wake of the firing of Executive Editor Jill Abramson on Tuesday. Joshua Benton at Nieman Journalism Lab has already called the report “one of the most remarkable documents” he’s seen in his tenure, and detailed coverage has appeared on BuzzFeed, Mashable and numerous other outlets. We won’t go into detail on excerpts (Nieman’s coverage is the most exhaustive we saw) but thought it was worth sharing a few issues that stuck with us.

In a nutshell, the report makes a powerful case for a complete restructuring of the way the Times approaches its “paper of record” role. The extent of the criticisms contained therein will shock the many people who have come to believe that the Times is the standard-bearer for “digital-first” journalism among traditional media outlets, but there’s plenty of data and examples to support these conclusion.

Twenty years into the commercial Web, little has really changed about the culture at the Old Gray Lady, even as digital and print editorial operations have merged, the report says. Stories are filed late in the day in accordance with traditional print deadlines. Ambitious features are scheduled for Sundays, when print readership is largest but online readership dwindles. Mobile apps are organized by print sections. Traditional reporting skills dominate hiring and promotion decisions and a byline on Page One of the print edition is still considered the gold standard of success.

This is despite the fact that – as the report documents on page 81 – print readers are the smallest audience the Times has. Mobile and desktop readers together dwarf the print audience by a factor of 10. A dying medium still holds sway at the most prominent journalism institution in the U.S.

A few themes run throughout the document that we found noteworthy:

Audience Is Earned

One of the most compelling quotes we read was from Janine Gibson, editor-in-chief of The Guardian’s website. “For someone with a print background, you’re accustomed to the fact that if it… gets into the paper you’re going to find an audience,” she said. “It’s entirely the other way around as a digital journalist. The realization that [the audience is] not going to just come and read it has been transformative.”

This observation underlies some of the core recommendations of the report, which are that the newsroom needs to work much more collaboratively with design and promotion than it has traditionally. In most newsrooms, journalists work in a cocoon and throw finished products over the wall to designers and publicists for packaging and promotion. However, user experience has become critical to success. That’s because readers themselves are becoming the primary traffic-drivers. In other words, great journalism that isn’t easy to access and share doesn’t get very far.

The report has some internal traffic metrics that dramatize what most Web publishers have probably known for a while: Traffic to websites in general and homepages in particular is declining while content is increasingly being consumed through aggregators and mobile devices. The internal data also validates what has been speculated for a couple of years: Readers are now the dominant revenue source, making up 52% of 2013 sales compared to 43% from advertising.

With readers increasingly in control, the report recommends a step that still draws gasps from journalism veterans: Eliminate the wall between the newsroom and the business. “Increased collaboration, done right, does not present any threat to our values of journalistic independence,” the authors declare, recognizing what digital first publishers discovered a decade ago.

The Wall is still very much in place at The New York Times. Popular innovations like a searchable recipe database and the ability to follow stories of interest have come out of product and design groups rather than the editorial side. The Times does a good job of researching its audience, the authors say, but the newsroom has shown little interest in participating in surveys and focus groups. Designers complain that they are treated like second-class citizens. Editors who want to collaborate with colleagues outside the newsroom have to do so on the sly. Researchers said the vast majority of developers at the Times believe they aren’t even allowed to set foot in the newsroom.

Barriers between editorial and business functions are an expensive luxury that media organizations can no longer afford. What the Innovation report makes clear is that the business side contributes far more to the reader experience online than it ever did in print.

Platforms Matter More Than Packages

The Times enjoyed plenty of well-deserved praise for “Snow Fall,” a mesmerizing visual feature it published in late 2012. As beautiful as that package was, the fact that it hasn’t been repeated in 18 months points to the problem of putting resources behind what the report calls “labor-intensive one-offs”.

Snow Fall Intro screen

Snow Fall is cited repeatedly as an example of what the Times is capable of but fails to achieve in its daily operations because it fails to attend to the nuts and bolts of digital media. “Our competitors, particularly digital-native ones, treat platform innovation as a core function,” the authors write. They point in particular to BuzzFeed, which has equipped its editors with a wide palette of interactive storytelling tools, as a better model. While the results aren’t necessarily elegant, they are repeatable, and that’s more important.

In contrast, the Times has failed even to carry out a consistent approach to tagging, a well-established technique for categorizing content in a way that makes it easy to reuse. This has often-unforseen ripple effects. For example, the lack of tags has frustrated efforts to create a useful recipe database, hampered search engine visibility, prevented the paper from automating sale of its photos and limited its ability to target content by geography.

We Are All Publicists

Some of the report’s harshest criticism is aimed at the Times’ reluctance to promote its own work. The legacy of great journalism has become, in many ways, a handicap. Editors believe that journalism alone will carry the paper while competitors invest aggressively in promotion, data analysis and systems to move quickly and double down on success.

Publications like The Guardian, Huffington Post and The Atlantic expect staffers not only to promote their own work but to know how to write headlines that maximize sharing potential. Huffington Post won’t publish a story unless it has a photo, a search-optimized headline, a tweet and a Facebook post.

In contrast, the Times editors didn’t notify publicists of their acclaimed Invisible Child series on New York’s homeless children until it was too late to do any advance work. The reporter failed to even tweet about the feature for two days.

While the Times has millions of collective Twitter followers through its branded and individual accounts, the paper generates less than 10% of its digital traffic from social media. In contrast, BuzzFeed generates six times as much from those sources, the report notes. That’s because social promotion is considered an afterthought. For example, the Twitter feed run by the newsroom is used mainly for reporting rather than for audience development.

The report also criticizes Times management for doing too little to connect with readers. While competitors like Huffington Post and Medium have prospered by making their publishing brands a platform for anyone who wants to contribute, the Times still rejects dozens of op-ed submisions from thought leaders every day. The enormously popular TED Talks, which charge up to $7,500 per ticket, could have been a Times invention, but the paper has failed to market even its relatively modest Times Talks series. “One of our biggest concerns is that the Times will start a real conference program,” says a TED executive quoted in the report.

Gaping Hole on the Business Question

The most glaring shortcoming of the Innovation report is its lack of any creative ideas for solving the revenue problem. This may have been by design, since the team had no representatives from the business side. However, a small chart on page 81 shows the extent of this problem. Print still accounts for 75% of advertising revenues and 82% of circulation revenues. That adds up to $1.4 billion from the print side of the house compared to just $320 million online.

No one has figured out how to bring those numbers closer together, and in an environment of continually expanding inventory and declining CPMs, it’s unlikely anyone will. Marc Andreessen has proposed that publishers need to think differently about their businesses, seeking out much larger audiences with low-priced products. That sounds like a reasonable course, but the Times’ report makes it clear that BuzzFeed, Upworthy, Business Insider, and HuffPo are getting there much more quickly than the Old Gray Lady.

We’re impressed that the management of the Times was willing to commit resources to a project that was bound to return unflattering results and likely to be leaked. Now that the findings are there for all to see, it’s a question of whether management can follow through on them. Assuming that most newspapers are well behind the times in digital integration, it’s a fair bet that a lot of publishers will take cues from this research.

The Full New York Times Innovation Report by Amanda Wills, Mashable

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Marc Andreessen, internet pioneer and founder ...

Marc Andreessen, internet pioneer and founder of Netscape at Web 2.0 Expo in San Francisco, CA (Photo credit: TechShowNetwork)

Pretty much anything Marc Andreessen writes is worth reading, and his latest treatise on the future of the news business should be required reading for any publishing executive.

The man who arguably started all the trouble with the invention of the Mosaic browser in 1993 isn’t just an optimist on the future of the news business; he’s positively bullish about it. But the future he sees is much more like the newspaper market of the turn of the 20th century than the one that dominated the last 30 years of the 21st.

His 3,000-word prescription boils down to a few basic points, not all of which are new:

Run the news business like a business. Take advantage of the many new revenue sources that are emerging, in particular native advertising and subscriptions.

Take advantage of media democratization. Sure, anybody can be a publisher today, but that’s an opportunity as well as a problem. Universal media access creates noise, which presents opportunities for aggregators to simplify the cacophony. It also creates the possibility of much larger audiences than we have known the past. “The big opportunity for the news industry in the next five to 10 years is to increase its market size 100x AND drop prices 10X,” Andreessen writes. In other words, throw out the business model that relied upon scarcity and replace it with one that values abundance.

Stop playing defense. The good old days of news monopolies and oligopolies are gone forever, so get over it and focus on the future. The few organizations that have successfully crossed the chasm – he mentions The Guardian and The New York Times – began thinking digital-first years ago. What are the rest of you waiting for?

Find new revenue models. Bitcoin is going to make micro-payments feasible, so study up and start experimenting. And tear down that Chinese wall. It defeats too many new business ideas. Outlets like the Atlantic and the Times are finding ways to make blended advertising and editorial work and actually growing their influence in the process.

Andreessen provides numerous examples of new and traditional media enterprises that are succeeding and growing. They include several that we’ve talked about here previously as well as a few that we haven’t, including Anandtech, The Verge and Vice.

On the subject of investigative reporting, Andreessen is almost sanguine. “The total global expense budget of all investigative journalism is tiny —  in the neighborhood of tens of millions of dollars annually. That’s the good news; small money problems are easier to solve than big money nightmares.” He believes a combination of crowd funding and philanthropy can more than cover the costs of the necessary Baghdad bureaus and investigative teams.”

The future of news will see fewer large media empires and many more small, focused enterprises. These organizations will take advantage of improved economies that enable them to reach vastly larger audiences at much lower cost than in the past. The mainstream media survivors will be those that move the quickest to tear down old infrastructure and seize every opportunity to reinvent themselves.

Can Technology Save the News?

Pierre Omidyar

eBay founder and news investor Pierre Omidyar

A considerably less optimistic but more diverse perspective is contained in an article from the excellent Knowledge@Wharton service. Technology Can Save the News — If Readers Change How They Consume It consolidates the opinions of several Wharton faculty members about how mainstream media can be saved. They agree that standalone, for-profit news organizations are unsustainable but that that independent journalism is too valuable to sacrifice.

The professors see promise in the interest of billionaires like eBay founder Pierre Omidyar and Amazon.com founder Jeff Bezos in owning media companies. Omidyar recently committed $250 million to a startup media venture run by journalist Glenn Greenwald and Bezos ponied up the same amount to buy the Washington Post last summer.

No one believes these investors are buying traditional media properties for their growth potential. Rather, they think media companies are undervalued and they may see synergies with their other businesses. For example, targeted advertising delivered by Amazon’s impressive recommendation engine could yield immediate sales for advertisers and drive up Amazon revenues.

Many rich people also have an interest in advancing political agendas out of either self-interest or ideology, and media companies provide an ideal bully pulpit. The risk is that these media come to reflect the politics of their owners too closely and contribute to the “echo chamber” problem in which audiences choose to listen only to the outlets that reflect their beliefs.

On this question, Wharton marketing professor Pinar Yildirim is cautiously optimistic. She believes that the proliferation of slanted outlets like Fox News will create a backlash as consumers seek independent voices. “Technology can bring us perspectives other than our own, if the ones designing it build that into the architecture, and the ones consuming the news are open to it,” she says.

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We did a double-take when we saw this headline on Bloomberg last week: “BuzzFeed Said to Expect 2014 Sales of Up to $120 Million.” If you haven’t paid much attention to BuzzFeed, now is a good time to start, because this seven-year-old dark horse may have figured out the secret to making money in an environment of brutal competition and plummeting advertising prices.

The story relates some impressive statistics:

  • BuzzFeed expects to book $60 million in revenue this year, up from an initial budget of $40 million.
  • Year-over-year traffic is up fourfold.
  • The site attracted more than 130 million unique visitors in November.
  • BuzzFeed expects to field more than 600 ad campaigns this year.
  • It has raised $46 million.
  • It’s profitable.
Image representing Jonah Peretti as depicted i...

Image via CrunchBase

Casual visitors to BuzzFeed might be tempted to dismiss the site as just another collection of top-10 lists. That’s understandable, given that top stories bear names like, “The 28 Funniest Notes Written By Kids In 2013,” but there’s more to BuzzFeed than mouse candy.

The site was founded by Jonah Peretti (right), an MIT Media Lab alumnus who also co-founded Huffington Post. Peretti has made a career of figuring out how to make stuff that people want to share, and his latest venture appears to have cracked the code (For more on the new journalism discipline of writing for maximum share appeal, read this article).

Everything on BuzzFeed is optimized for sharing because that’s the secret to building traffic. BuzzFeed eschews traditional search engine optimization. “We don’t spend that much time thinking about search,” Peretti told Fortune in this interview. It focuses instead on the psychology of sharing: What content do people instinctively want to tell others about? In the long run, Peretti thanks sharing by humans will be a more important factor in online success than search results.

Unlike some other content farms, BuzzFeed has designs on serious journalism. Peretti has said he plans to hire 200 professional journalists, and the site’s news section is beginning to look more and more like what CNN used to. In essence, the cat videos and wet T-shirt slide shows bring in visitors s

o serious reporting can happen.

BuzzFeed is perhaps best known for its novel approach to native advertising. Sponsored content appears in line with staff material (it’s lightly labeled) and uses the same format as everything else on the site: lots of lists, photos and captions. Sponsors are encouraged to come up with creative ideas that will fit the look and feel of the site. Intel has 10 Pieces Of Vintage Technology We Couldn’t Wait To Have and Ruffles came up with 12 Reasons Dogs Really Are Man’s Best Friend. Peretti told Fortune:

We told brands, “You have to tell a story.” This is actually something the magazine industry has been great at over decades — making advertising that actually adds to the product. It’s something that websites have completely failed to do…If you take all of the ads out of a fashion magazine, you lose half the photography, you know? So we really took the approach of, “Well, why can’t the web be like that? Why can’t we make great branded content, advertising, that has its own page that people want to click on and engage in and share and interact with?”

This may sound like heresy to journalism traditionalists, but BuzzFeed is breaking a lot of molds in an attempt to find a model that works.

In fact, the site’s basic content model isn’t all that different from traditional newspapers’. The reason most newspapers carry horoscopes, crossword puzzles, comics and gossip columns is because large numbers of people read newspapers solely for those features. If BuzzFeed’s 21st-century version of Dear Abby can provide some serious journalists with gainful employment, then we all owe Jonah Peretti a debt of gratitude.

Media Boomlet

BuzzFeed isn’t the only new media entity that’s benefiting from the aggregation craze, but there are questions about how far this business can scale and whether there’s much money to be made.

Henry BlodgetUSA Today‘s Michael Wolff writes that Henry Blodget (left) is shopping Business Insider, reportedly asking a cool $100 million. Not bad for a site that’s less than five years old with just 62 editorial staff members listed on its masthead. Wolff runs the numbers, makes a couple of educated guesses and figures that Business Insider is probably getting a  CPM (cost per thousand) of between $1.50 and $3. That compares to $30-$40 CPMs that were common in the business magazine world just a few years ago.

Wolff sees the mass-market digital media landscape as being a race to the bottom, with publishers frantically searching for viewer eyeballs, regardless of their appeal to advertisers. “The digital traffic world, with techniques and sources and results that are ever-more dubious, is, as I’d guess the astute Henry Blodget has ascertained, not a sound long-term play,” he writes. Hence, it’s time to get out.

But the venture capital community, which is flush with stock market cash, apparently doesn’t agree – yet. CNN Money’s Dan Primack and Jessi Hempel say Flipboard is set to raise another $50 million, bringing to $160 million its total venture funding since 2010. Flipboard doesn’t even produce any original content. It’s a mobile platform that aggregates content produced by other media companies, and its licensing policies have raised some hackles.

The new high-volume aggregation model that’s attracting so much attention was outlined in The New York Times last year. It’s a caffeinated rush to get it first, and very little content comes from traditional journalistic shoe leather. Reporters are skilled at finding, assimilating and repackaging information in eye-catching packages. The assumption is that citizens are already doing a lot of the reporting on their Facebook timelines and Twitter feeds, and the media company that can be filter the noise adds significant value.

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Google has arguably been the worst enemy of working journalists for the last decade, but now the tide is turning and the search giant is trying to repair the damage it  has done. It deserves our patience and understanding as it continues on a course that hopefully will revitalize journalism as a career and rescue hundreds of thousands of freelancers who have seen their livelihoods damaged by the monster Google unwittingly created.

Early Lycos home pageA little historical background: Google changed human behavior, which is a pretty big deal when you think about it. Before it burst upon the scene in the latter days of the first dot-com bubble, people mostly browsed for information. Today we default to search because it’s a better way to find stuff. Thank Google for that.

But one of the weaknesses of all search engines going back to Lycos is their dependence upon keywords. Spammers have always used keyword tricks to game search engines, but Google’s enormous influence gave birth to large companies that do nothing but vomit forth keyword-laden text, the sole purpose of which was to drive traffic through Google search results. We’re looking at you, Demand Media.

The Ascendance of ‘Top 10′ Lists

The growing influence of keywords has diminished the importance of content quality. Why pay for professional writers when you can get the same or better results by employing interns or offshore body shops that write to formulas defined by keyword frequency? The reason you see so many “top 10″ lists and tip sheets online is because they perform well in search results, people click on the links a lot and they’re cheap to produce. We don’t think Google intended for this to happen; it just worked out that way.

Many capable writers have seen pay rates plummet by 75% or more over the last five years as publishers have pushed quantity over quality. The only way you can make a living at 25 cents a word is to churn out a lot of them. These journalism serfs are the real victims of the collapse of print media. They’re skilled professionals whose livelihoods have been stolen by publishers who make no distinction between writing and typing.

Serfs Up

google-hummingbird-algorithm-seo-tips1Now Google is throwing them a lifeline. With the release of its Panda search algorithm last year, Google made its first strong statements that it’s cracking down on keyword farms. Last month’s release of the Hummingbird algorithm continues a campaign to elevate the value of quality content in search results and penalize formulaic gamesmanship.

For example, officials sent the PR industry into tizzy by stating that press releases can no longer be used to juice search performance, calling them “link schemes” and “advertisements.” Executives have made it clear that their mission is to deliver search results that most closely match what the user is looking for, not just those that have the right  keyword combinations.

Writing on Forbes.com, Joshua Steimle summed up Hummingbird thusly:

If you’re the best at what you do, these updates Google has been rolling out are opportunities to separate yourself from your competition. [Your competitors] may have been engaging in spammy tactics to get good rankings, but if you’ve been focusing on creating content that provides real value to potential customers, their days are numbered.

People like Mike Moran, who really understand search engines, have said for years that the only true search optimization is quality content. Google is finally speaking the same language.

It’s Good

So what does this mean for journalists? We think it’s all good. Marketers, who are hiring increasing numbers of journalists to stoke their content marketing efforts, are going to have to step up their game. They’ll need better content, which means hiring better writers who charge higher rates. Publishers will also need to re-examine the merits of paying for quality content instead of publishing anything turned in by someone with a pulse.

Does Google’s strategy point to the rebirth of traditional news organizations? Sadly, that horse is already out of the barn. But it does indicate that the days of search engine gamesmanship are numbered and that quality is going to count for something again.

Google can’t change the way search has commoditized news and diminished the value of media brands, but that’s only partially its fault. In any case, it’s hard to feel sorry for the rich executives who have seen their bonuses cut amid falling profits.

The victims we feel sorry for are the career beat reporters who couldn’t anticipate the seismic shifts in their field and who were ill-equipped to adapt. Perhaps their fortunes are finally about to change.

 

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By Paul Gillin | August 6, 2013 - 11:51 am - Posted in Business News, BusinessModel, Journalism, Newspapers, Solutions
Image representing Jeff Bezos as depicted in C...

New media tycoon Jeff Bezos (Image via CrunchBase)

History may well mark the typically somnambulant first days of August as the week that forever changed the U.S. newspaper industry.

In a stunning sequence of events, two young billionaires with no media experience bought iconic East Coast newspapers and affirmed their commitment to helping to rejuvenate an industry that has been in freefall for the past seven years.

The Washington Post Co. announced yesterday that Amazon.com founder Jeff Bezos would buy the company’s namesake newspaper for $250 million, ending eight decades of stewardship by the Graham family. The news came just three days after billionaire commodities investor John Henry was announced as the new owner of the Boston Globe.
The news continues a trend toward deep-pocketed investors making substantial investments in news organizations, shoring up depleted reporting staffs and experimenting with new business models. Value-investing icon Warren Buffett has snapped up more than 60 dailies and says he plans to buy more. In Southern California, greeting card magnate Aaron Kushner and his partners at Freedom Communications are turning heads with an aggressive investment strategy at the Orange County Register that is showing early signs of bearing fruit.

This is the best news the newspaper industry has had in years, and we think the management styles of these investors symbolizes the kind of long-term view that the business badly needs.

Long-Term Vision

Why Billionaires Are Trying to Rescue the Newspaper Industry

Let’s look at the two newest arrivals on the media scene. We’ve watched both Henry and Bezos with interest for years, but for different reasons. Henry is the white knight who rescued our hometown Boston Red Sox from a tumultuous management struggle and brought the town its first World Series victory in 86 years. Bezos is an Internet pioneer who steered his company to greatness in a turbulent industry and forever changed retailing. The two men made their fortunes in very different industries but share a commitment to long-term vision and a belief in fundamental values.

Fenway Park, home of the Boston Red Sox, Bosto...

When Henry took over the Red Sox in 2002, the team was actively negotiating to abandon Fenway Park and build a new stadium in the suburbs. The new owner promptly scuttled the negotiations and redoubled his investments in the team’s home field, shoring up the infrastructure, adding seats and experimenting with new revenue sources that would keep the team competitive with other big-market players. The strategy has paid off. The 101-year-old stadium is a huge tourist draw, and high ticket prices combined with innovative promotions have enabled the team to support a payroll and farm system that consistently keeps it at the top of the American League East. Fans complain about ticket prices, but they can’t complain about the team’s performance on the field.

Bezos was one of hundreds of online booksellers that jumped on the early Internet. He successfully steered Amazon through the ravages of the dot-com crash and intense competition from brick-and-mortar retailers to make it a $61 billion powerhouse that has changed the way Americans shop. Bezos has kept his focus on core principles like personalizing the shopping experience and delighting customers. He has resisted the urge to chase short-term opportunities and focused instead on big picture problems like chipping away at the cost and frustration of shipping. See Michael Moritz’s profile for a financier’s account of Bezos’ brilliance.

Amazon made some early missteps, such as investments in busted Web 1.0 startups like Pets.com and Kozmo.com, but it has executed almost flawlessly since the end of the dot-com bubble. It has sacrificed profitability for growth, but that hasn’t stopped the stock from rising ninefold over the last five years. With Amazon still under-performing in international markets and just beginning to crack the business-to-business opportunity, there is reason to believe its best days are ahead of it.

Rule-Changers

Long-term thinking as exemplified by Henry and Bezos is exactly the tonic the newspaper industry needs. Its woes are rooted in a merger binge that started in the late 90s, fueled by an appetite for short-term profits. As online competition has eaten away the circulation and revenue base of the U.S. industry, most publishers have responded by cutting costs, raising prices and hoping for the best. But you don’t transform an industry by cutting costs. You do it by changing the rules. Bezos and Henry are rule-changers.

Editor & Publisher reported last week on newspapers that are successfully experimenting with new revenue sources. We have long maintained that growth opportunities exist  for publishers in local markets if they can break their advertising addiction and partner with businesses in new ways. Wouldn’t it be nice to see the Post and the Globe blazing these trails?

It’s tempting to dismiss these relatively small investments (the $250 million purchase price of the Post represents just one percent of Bezos’ net worth) as low-risk bets by people with money to burn, but we think there’s more to it than that. Wealthy entrepreneurs know that healthy, independent media are essential to democracy and to capitalism. Media watchdogs keep government and regulatory excesses in check and ensure that markets operate predictably. They also provide business intelligence that isn’t easily available elsewhere. Both Henry and Bezos are avid newspaper readers.

We have no reason to believe that either of these new media owners has any plans to try to wring cash out of a dying business. On the contrary, Henry was quick to issue a statement affirming his belief in the importance of a healthy Globe to the region. Bezos is leaving the current Post leadership in place and said no layoffs are planned. “The values of the Post do not need changing,” he said. “The duty of the paper is to the readers, not the owners.”

Some people have speculated in recent years that the salvation of the newspaper industry would be donations from foundations and wealthy investors. Perhaps there’s some truth in that, but donations are a backhanded way of saying that a cause can never support itself. Warren Buffett, John Henry and Jeff Bezos all have their own philanthropic interests, but we don’t believe they see these newspaper investments as charity. They see value, growth and ultimately something  that has eluded publishers for the last several years: profit.

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By Paul Gillin | August 2, 2013 - 8:10 am - Posted in Best/Worst, Education, Future of Journalism, Journalism

Journalism Degree.org  just posted a list of 100 Exemplary College Newspapers for Journalism Students. The ranking isn’t in any particular order and there’s no explanation of what methodology (if any) was used to assemble the list, but we clicked around to some of the candidates are were impressed to see that good journalism is being nurtured on college campuses around the country. If you or someone you know is considering journalism school, consider this list because campus newspapers are where you’ll be practicing a lot of your craft.

 

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How are the experiments in reduced frequency that began in Detroit more than four years ago and have since spread to Cleveland, Syracuse, New Orleans and now Portland working out? Not so well, says author and J-school professor John K. Hartman.

Writing on Editor & Publisher‘s website, Hartman says the most from seven-day to three-day home delivery has caused massive subscriber flight and forced publishers to quietly backtrack. Newhouse, which is cutting frequencies across its line of dailies, has already had to introduce a new tabloid to produce on the days the Times-Picayune doesn’t publish.

Hartman blames greed. He accuses Newhouse of sabotaging journalism at the papers it own in the name of maximizing profits for the Newhouse family.

Newhouse is saving big money by eliminating news staff, eliminating office staff, eliminating delivery staff, and eliminating delivery expenses. In other words, Newhouse is getting out of the daily newspaper business and into the tri-weekly advertising shopper business.

We didn’t know this, but Hartman says the Detroit Free Press and News have re-introduced daily delivery to about 15,000 homes. The experiment, which was positioned as a “bold transformation” in December, 2008,

lost so many readers they had to beef up their non-delivery-day newspapers and restore limited seven-day home delivery. The Free Press now offers home delivery to 15,000 households through independent contractors the other four days a week. Nonetheless, hundreds of thousands of readers of the print products were lost in Detroit, and the projected switch of readers and advertisers to digital sites has not taken place.

Continuing a newspaper industry tradition of burying bad news about its business, The Oregonian announced that it will scale back home-delivery frequency from seven to four days a week.

The news is tucked into the fourth paragraph of an otherwise effusive press release on Oregon Live that crows about the launch of a new company that will “expand news and information products in Oregon and Southwest Washington” and “introduce new and improved digital products.”

In reality, the main purpose of the new company over the next few months will be to hire survivors from Oregonian Publishing Co. which produces the state’s largest and longest continuously published newspaper. That company will close on Oct. 1. Oregonian write Brent Hunsberger provides balanced coverage – and leads with the real news.

Like newspapers in Detroit, the The Oregonian will continue to publish in print seven days a week but will limit distribution of Monday, Tuesday and Thursday editions to city newsstands. Its 170,000 home subscribers will see deliveries cut to Wednesday, Friday, and Sunday. In a baffling bit of doublespeak, the company also said home-delivery subscribers would get a Saturday edition “as a bonus.” It also stressed that the “Wednesday, Friday and Sunday editions will be enhanced with more content than current editions while the Saturday newspaper will have news and a strong emphasis on sports content, along with classified advertising.” In other words, a cut of 50% is an improvement.

The bigger story is that there will be unspecific but “significant” layoffs at The Oregonian, which currently employs 650 people. The paper, which has won seven Pulitzer Prizes and five since 1999, employs more than 90 journalists according to Hunsberger’s account. However, Ryan Chittum thinks the editorial cuts have been more severe. Writing on CJR.com, Chittum estimates that the newsroom staff has declined from about 315 in 2007 to 175 today. His assessment is blunt:

[Advance Publications'] new template for its newspapers is now depressingly familiar: End daily delivery; fire a third to a half of the veteran journalists, particularly the editors, particularly in news; replace some of them with young, inexperienced (and most important: cheap) labor; put them on the hamster wheel; toss around insipid buzzwords; spend a bunch of money on new offices; piss off readers; embolden competition.

Seems about right. Chittum also notes that Advance Publications’ cutbacks at the Times-Picayune in New Orleans backfired when a competitor from Baton Rouge moved in to take advantage of subscriber unrest. Advance has had to respond with a tabloid edition on days the Times-Picayune doesn’t publish, thereby negating many of its cost savings. Advance has said that it will make similar frequency cutbacks across its portfolio.

Oregon journalists are already rushing in to show their support. Former Oregonian reporter Ryan Frank has taken to social media to raise funds for a bar tab for laid-off staffers. He’s already raised more than $3,000. Follow the fund’s progress at #OregonianBarTab on Twitter. And give generously.

Thanks to Brian Parks for tipping us off to this news.

 

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By Paul Gillin | June 11, 2013 - 5:54 pm - Posted in Journalism

 

Infographic from InsideClimateNews series on the Dilbit oil spill

Infographic from InsideClimateNews series on the Dilbit oil spill

Editor & Publisher has details on InsideClimate News and the “ambitious, in-depth investigative series that began as a fluke,” winning the tiny nonprofit organization the 2013 Pulitzer Prize for National Reporting.

The online-only service, which publishes its work under a Creative Commons license, beat out some of the biggest U.S. newspapers to win the honor for its three-part investigative series “The Dilbit Disaster: Inside the Biggest Oil Spill You’ve Never Heard Of.” The series focused on a 2010 crisis caused by a ruptured oil pipeline that spilled at least 1 million gallons into Michigan’s Talmadge Creek and Kalamazoo River, forcing 150 families permanently from their home.

The watchdog organization has a staff of only seven full-timers who work virtually in offices and homes around the country. It’s funded entirely by donations, a similar model to ProPublica, the nonprofit investigative reporting service launched in 2007 that has won two Pulitzers.

The E&P also documents the resourcefulness and determination that enabled the service to bring this story home despite a tiny budget and far-flung staff. The visibility of its work was helped by the fact that media coverage of climate change has declined steadily since 2009, according to E&P.

 

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