The post below was submitted to us by Scott Talkov, Editor-in-Chief of ThingsToDoInlandEmpire.com, a guide to entertainment, events and discounts in southern California. If you want to see an impressive example of what people can do with a free copy of WordPress and free Facebook and Twitter accounts, check out this site.
The claims and statistics cited in this article are the author’s, and we don’t vouch for their validity.
The local blog ThingsToDoInlandEmpire.com, focusing on arts, entertainment and events in southern California, recently surpassed well-established print media outlets in Riverside and San Bernardino on several well-known metrics.
The site now averages twice the traffic of the region’s most widely distributed weekly print publication and four times the traffic of the region’s most widely distributed monthly magazine, both of which cover the same arts and entertainment focus, According to third party traffic verification firm Quantcast. Those estimates are mirroredby well-known Internet ratings website Alexa.com.
The site began with an idea from Adina Hemley, a non-profit director in the Inland Empire. “My fiance and I would search the Internet for fun events every weekend, and then it occurred to me, ‘I know I’m not the only looking for things to do in the Inland Empire,’” said Hemley.
Scott Talkov, a 30-year-old lawyer in Riverside and self-described techie, started the website with Hemley in early 2011 to aggregate their research on the hottest places to go in the Inland Empire. Since then, traffic has doubled every three months.
By working together with more than 20 authors, the site collects data and perspectives from dozens of cities throughout the inland Southern California region known as the Inland Empire. The region counts over four-million people and witnessed the fastest growth over the past decade among the nation’s top 25 metropolitan areas.
“While the economy and print media may be down, people are still having fun, they’re just turning to new sources to find out what to do,” said Kris Daams, a former newspaper reporter and author on the site.
Talkov says new technologies allow information to collected and distributed instantly at essentially no cost. The website is based on WordPress and communicates with followers through the social media tools Facebook and Twitter, all of which are free.
When asked what drives this site, author Nate Hutchinson insisted “We want to continue to prove people wrong who claim there is nothing to do in the Inland Empire.”
How bad is it in the magazine world? Two years ago we bought a subscription to ESPN magazine after finding a promotional offer of 26 issues for just $2. We subscribed simply for the experience of getting a fortnightly magazine for less than the cost of postage.
But it turns out we were getting a lot more than just ESPN. Around the time our subscription expired, we started getting Golf magazine every month in the mail. Golf’s promotional price is $10 a year, but we never paid for or requested a subscription. Then, about three months ago, Sports Illustrated began showing up in our mailbox each week. We like that because we’ve actually paid for Sports Illustrated in the past. However, we aren’t paying for this one. It appears to be another side=benefit of our $2 ESPN deal.
We’re not sure if this embarrassment of riches is at an end, but we do know that altogether we’re receiving about $70 worth of magazine subscriptions for $2. Why? Because the publishers are desperate. New Audit Bureau of Circulations rules have significantly relaxed the criteria for paid circulation. That means the publisher statements for Golf and Sports Illustrated now count us as subscribers despite the fact that we never requested or paid for either subscription. Any advertiser that thinks it’s getting an engaged audience through this accounting sleight-of-hand is fooling itself. Don’t get us wrong: We hope the SI subscription never runs out, but we are never, ever going to pay for it. Are we as valuable to an advertiser as a paying subscriber? Not so much. Is the print magazine industry in a crisis? We think so. BTW, we did not get the attractive tote bag that comes with a paid subscription..
Gannett Pounds 700 Nails in Print’s Coffin
If you need any further evidence that print has no future, look no further than Gannett’s announcement of 700 layoffs this week, says Poynter’s Rick Edmonds. Revenues at Gannett’s 81 community newspapers were down 7% overall and nearly 10% in print, even as most mainstream media are experiencing a modest recovery right now. Not so in print. Publishing operating margins fells four times as fast as revenues, and it’s been a decade since Gannett bought any print properties at all. Meanwhile, the company has reduced its stable of newspapers from 99 to 81. Its broadcast and online operations are actually doing just fine, but they’re not growing fast enough to make up for declines in print advertising. That’s the problem across the industry. Online revenues are growing, but the volume and margins are a tiny fraction of print revenue.
Gannett, which traditionally dances to the tune of Wall Street, is sending a message in aggressively cutting back on its already lean print businesses. In that respect, it’s ahead of the market. Edmonds points out that, ironically, “Metro papers like the Boston Globe and Dallas Morning News that have adopted a high price/high quality circulation strategy know readers will not be satisfied with skinny papers that have little worth reading. So those newsrooms are protected and, in a few cases, growing.” For a while, that is. Those papers are milking an aging but still profitable population that will dwindle sharply over the next decade. When the tipping point is reached and paid subscribers no longer justify a printed product, the closures will happen en masse.
Nonprofits Figuring It Out
We wrote recently about California Watch, a nonprofit investigative news operation that is breaking even by syndicating its content at low cost to dozens of news outlets to customize as they wish. California Watch and others like it understand the economics of multiple revenue streams. Few newspapers can afford to support large investigative reporting staffs, but a bunch of smaller publishers can collectively contribute enough to make an independent investigative team viable.
Co-director and veteran New England TV reporter Joe Bergantino (left) says, “To be successful you have to walk through the door and immediately think about how to make money.” And what’s wrong with that? For the last 50 years or so, journalists have had the luxury of having the bills paid by people they don’t even know. Very few businesses operate that way, so Bergantino and his tiny team are simply functioning by the same rules that small businesses have lived with for years. Does that make the quality of their work less reputable?
Got HTML5?
The Financial Times’ new mobile app racked up 100,000 users in its first week. The twist is that the FT decided to develop the app in the new HTML5 format instead of coding it for the iPad or Android platform. If you don’t know what HTML5 is, here’s a tutorial. It’s an important new technology that could make Flash animation and other plug-in-based multimedia obsolete.
HTML5 works entirely within the browser and gives the publisher considerably more control over display, organization and animation than earlier HTML versions did. Information can be stored and read offline, as well as updated automatically without user intervention (No more Adobe updates; how cool is that?) The trick is that most browsers don’t fully support it yet, but that’s just a matter of time. Apple’s Safari is one of the best browsers for HTML5 apps. That’s not surprising, given that Steve Jobs has engaged in a bitter public dispute with Adobe over Flash. The downside for Apple is that HTML5 enables publishers to deliver apps themselves without using the iTunes store as an intermediary. That’s why the FT is updating its content directly, without going through the iTunes store. HTML5 will also make it easier for publishers like Playboy, whose content wouldn’t make it past the Apple censors, has also gone the HTML5 route.
Miscellany
If you’ve ever wondered whether the image you’re about to publish has been Photoshopped, try out this new service from Google. Upload or type the URL of an image and Google will now scan its database for images just like it – including the exact same image. We’re not sure what it will find if given a photo of one of Lady Gaga’s dresses, but for those beautiful sunset landscapes that come in from “citizen journalists,” it might be worth a try, just to be safe.
John Locke has become the first self-published author to sell over 1 million books on Kindle. The 60-year-old Louisville, KY resident has written nine novels, mostly thrillers, and charges only 99 cents for the Kindle versions. He says he has no intention of raising his prices. Having brought in about a million dollars this way, Locke is making a decent income for a novelist, especially since he doesn’t have to pay publisher and distributor costs that typically leave the author with only about 10% of a book’s cover price.
In deference to Huffington Post, The New York Times plans to intermingle news and opinion in its “Week in Review” section, saying, “We thought readers would find it more useful to have the stories, photographs and charts offered in an integrated way.” Back in the day, op-ed sections themselves were controversial. Now they will be indistinguishable, although the Times says it will clearly label opinionated content.
And Finally…
This one is almost too bizarre to be believed. A couple weeks ago, it was revealed that a popular Syrian lesbian blogger who went by the name of “A Gay Girl in Damascus” is actually a 40-year-old married dude from Scotland. Despite the fact that gay activists in Syria believe this guy put their safety at risk, he continues to blog under the pseudonym, although he did post a profuse apology for the ruse.
The very same week, a guy in Ohio named Bill Graber admitted that he is Paula Brooks, an executive editor for lesbian site LezGetReal.com. Graber used his wife’s name in the hoax and even posed as the father of the fictitious blogger for media interviews, claiming Paula is deaf. Graber got away with hoax for three years because he was so believable, according to LezGetReal’s managing editor.
Months ago, Graber, posing as ”Paula Brooks,” reportedly encouraged “Amina Arraf” to start a blog, but neither Graber nor MacMaster knew the other was really a man posing as a lesbian woman online. According to the Washington Post, Arraf and Brooks “often flirted” with each other online as well.
This week, after both hoax identities unraveled, Graber described his interactions to the Washington Post with Arraf/MacMaster as a “major sock-puppet hoax crash into a major sock-puppet hoax.”
We can only hope neither sock puppet survived the collision.
We say “trust” because that is at the essence of Densmore’s argument in “From Paper to Persona:” the vast profusion of online information has created a trust crisis that represents a business opportunity. People have no incentive to pay for information any more, but they may be willing to pay for information they can believe. The risk is that the collaborative effort needed to solve this problem may be so massive that no one will attempt to undertake it.
Densmore’s “nut graph” is the following:
Free information is so devalued and so frequently untrustworthy that the public is now looking for alternatives that save time, promise reliability and are always available from multiple platforms.
Sound familiar? Have you recently sought medical advice online? The most common complaint we hear about the Web in general these days is that you can’t trust anything you read. While Wikipedia, Snopes and IMDB are pretty accurate, they aren’t going to tell you much about the possible negative effects of drug interactions or the real risks of radon in the average home.
Not to mention whether Osama bin Laden is alive or dead, a conspiracy theory topic that already shows signs of reaching Elvis Presleyan proportions. Not only has news become a commodity, it has also become so politically polarized that partisan echo chambers continually corrupt whatever the reliable channels of news may tell us.
Densmore proposes that this chaos may be quelled by consortia created – with or without public funding – that “uniformly exchange payments for the sharing of text, video, music, game plays, entertainment, advertising views, etc., across the Internet… Consumer users should have a choice of providers – agents – for accessing services, with one account and one ID providing simple access to multiple resources.” Sort of like iTunes, except a lot broader in scope.
This is going to be a tough pill for many conventional media veterans to swallow, however. It requires that they migrate from “the most-trusted information source” to and “information valet,” which Densmore describes as “a combination of curator, adviser, authenticator and retailer of personalized news, entertainment and service information from anywhere.”
The proposal makes sense, but the problem is that news people aren’t trained to be valets; they’re educated in the school of hard knocks and worn shoe leather, where scoops were trophies and one would no more cooperate with a competitor than evict one’s mother from her apartment. But as this blog has been arguing for three years – and Densmore argues much more eloquently – all that stuff has got to change.
Sustaining journalism requires rethinking the very notion of advertising, and of news as a service…Aggregate for advertisers and sponsors audience measurement and selected demographic data…track, aggregate, sort and share revenues, including payments to users for the use of their “persona.” The user should be in control of the data use and flow concerning them.
In other words, trade the two assets consumers have to offer – money and personal information – for a service they increasingly crave: truth. The answer isn’t all-or-nothing notions like paywalls; it’s creating something with perceived value and flexible options for paying for it.
Can Densmore’s vision work? It has to. The two billion people in the world who are now connected to the Internet have already moved beyond the notion that information is a scarce commodity, even if a lot of news publishers still haven’t. The information-consuming public understands that today’s problem is not lack of knowledge but lack of trust. News organizations are actually in a pretty good position to deliver on the trust equation, but they have to discard the notion of propriety and exclusivity.
In Densmore’s words:
The Next Newsroom could be a service organization — like a law or accounting firm — and it will be paid accordingly. For now, it will be extremely difficult to convince people to pay for such a service. But as the years go by, it will be seen as an absolutely indispensible way to get through the day. People will become as reliant on their “newshare” as on their doctor, lawyer, accountant, teacher or business colleague, or for 1their water, gas heating or phone service, all of which are services for which we pay on a project or metered basis.
California Watch’s “On Shaky Ground,” an account of the dangerous vulnerability of many California schools to collapse in the event of an earthquake, is “old-fashioned, shoe-leather, box-opening, follow-the-string journalism, and it is well done,” Doctor says. It also cost over a half million dollars to report, an amount that would have caused most newspaper publishers to gulp even before the industry entered its string of 21 consecutive quarterly revenue declines.
But a half million is a relative bargain when you consider the number of media organizations that benefited from it. Pieces of the series ran in six major dailies and were picked up statewide by ABC-affiliate broadcasters. Top public radio stations in the Bay Area and Los Angeles ran with it, and a number of ethnic and online outlets (including more than 125 Patch sites) also picked up the coverage. Many localized the content by snipping local maps or extracting information about their area from the voluminous database of school-by-school information that the project produced.
Doctor notes that California Watch is building a new kind of syndication business around investigative journalism, which is the branch of news that has been hardest hit by budget cuts over the last three years. This is not a reincarnation of the Associated Press model, which mainly delivered breaking news. Bloggers, citizen media and Twitter have diminished the value of that function considerably. What citizen journalism can’t do it spend 20 months developing a story, which is what California Watch did.
California Watch is still “feeling its way along,” in Doctor’s words. Syndication revenue won’t support its current $2.7 million annual budget, so donations are grants are still essential to its livelihood. But look at what donors get for their money: About 70% of that $2.7 million goes to support the project’s 14 journalists. By comparison, a typical daily newspaper’s editorial costs are about 20% of overall expenses. These nonprofit models are vastly more efficient than the newspaper investigative teams they’re replacing.
And when you spread those costs among a lot of subscribers who pay a few thousand bucks a year to get access to the reports, it’s really not that expensive. “An owner…can hardly reject the offer of paying one-hundredth of the cost for space-filling, audience-interesting content,” Doctor writes. Particularly when compared to the value of a single child’s life who might have been saved (hearings are already under way).
Doctor’s analysis raises an important point about the evolving economics of information. In a world in which raw data has become a nearly valueless commodity, value is derived from filtering and contextualizing information for specific audiences. The small California weekly that could never dream of spending a half million dollars on an investigative project can spend a few hundred dollars to buy the work of a dedicated investigative team and then extract the information that’s relevant to its readers.
This is a much more efficient way to deliver news, but taking advantage of it requires discarding treasured assumptions like the not-invented-here syndrome and the belief that scope and scale define importance. It’s good news for local publishers. In the traditional model, only a handful of California papers could have tackled a project the size of On Shaky Ground. Now nearly everyone can share the wealth.
The Long, Slow Bleed
Lest anyone think the lack of major metro daily closures over the last couple of years is a sign of strength in the newspaper industry, consider recent earnings reports. Ad revenues at Gannett, McClatchy, Media General and Journal Communications were all off between 6% and 11% in the first quarter, and there’s no sign of a turnaround. Alan Mutter’s analysis makes an important point about why newspaper advertising isn’t sharing in the sputtering recovery.
The more advertisers of all types experiment with Web, mobile and social advertising, the more they will come to appreciate the power of the digital media to tightly target qualified prospects while granularly measuring the costs and effectiveness of their campaigns.
In sales jargon, the buying process is a funnel, with a large number of uninformed prospects at the mouth and a few qualified buyers at the tip. As consumers increasingly research their purchase decisions online, the need for merchants to advertise their availability declines. They get more leverage from intercepting buyers during the decision-making process. The deeper into that process buyers get, the better the prospect of converting them to customers. And incidentally, vendors only have to pay for actions like clicks and leads, not vague measures like circulation.
The reason newspaper closures have largely stopped is that the industry’s near-death experience in 2008 – 2009 focused publishers on slashing costs, raising subscription prices and squeezing as much blood as possible out of the stone of an aging and shrinking circulation base. That is not a prescription for growth. We continue to stand by our 2006 prediction that major metro daily print newspapers will all but disappear by 2025. In fact, we think it’ll happen sooner than that. It’s just that death will come from cancer, not heart attack.
Miscellany
The Las Vegas Review-Journal is expanding its business model beyond pure advertising. according to a press release, a partnership with parent company Stephens Media LLC’s digital arm will enable the Review-Journal to launch a service to provide local businesses:
…full website, branding and logo design; hosting and customer support for websites and related digital services; email marketing; mobile marketing; training to provide local businesses easy tools to maintain and update their own sites and analyze web traffic; search engine optimization and search engine marketing; customer reputation management with daily reporting; social media presence and tracking tools for digital and traditional marketing efforts to ensure monitoring of ROI.
Desperation often drives innovation, and the miserable state of the Las Vegas economy no doubt played a role in this quest for new revenue sources. We think it’s a smart move; most small businesses have no idea how to market themselves online and a local newspaper is a trusted partner that’s in a great position to give them a hand.
AOL’s Patch network of hyperlocal news sites intends to recruit 8,000 bloggers over the next few days. It’s asking each of its 800 sites to sign up 10 community members to blog. No word on whether the contributors will be paid, but given that Arianna Huffington is now running the show, we think we know the answer to that one.
And Finally…
Reports emerged in the Twittersphere early this week that the world’s last manufacturer of mechanical typewriters was closing down its India production plant. A lot of people, including us, were taken in by this. But there’s good news for the old-timers who still appreciate the clatter of metal on paper. Atlantic Wire reports that several factories in China, Japan and Indonesia are still manufacturing typewriters. Even if production shuts down, there’s a pretty good used market. For old time’s sake, we bought an IBM Selectric, which used retail for $450 in the 1970s, for a buck at a yard sale a couple of years back. We’re still not sure what to do with it.
Respected journalist James Fallows (right) could be excused for scolding new media entities like Gawker for trivializing the news and playing to its audience’s most base instincts. He could also be forgiven for mourning the emergence of “truthiness” as a substitute for fact in an Internet-driven culture that has become more concerned with immediacy that accuracy. Yet Fallows does neither of these things in a thoughtful and well-sourced 8,000-word piece in this month’s Atlantic entitled Learning to Love the (Shallow, Divisive, Unreliable) New Media.
In fact, Fallows drops in on Gawker founder Nick Denton and spends time learning to appreciate a scene in which reporters compete to repost the most salacious and bizarre stories about celebrities and the weirdness around us. Their progress is tracked by big-screen TVs that display real-time traffic to the company’s properties, which include Gizmodo, Jezebel, Lifehacker, Deadspin, Gawker and others. Writers do almost no primary sourcing, but mainly dig around the Web for nuggets posted by others. They’re rewarded based upon the number of first-time visitors they attract.
Denton is unapologetic about his model, which has turned the art of story selection and headline writing into an analytical science. He’s giving people what they want, and if you have a problem with that, go elsewhere.
Which kind of sums up Fallows’ conclusions about the state of new media. Upon considering input from experts ranging from Tom Brokaw to Jeff Jarvis, his conclusions are basically that the world is what it is and we will have to figure this stuff out. On the one hand, we’re giving up the luxury of knowing that the news reaches us has been vetted by professional journalists. On the other, we are getting a whole lot more information than we used to get. That’s not necessarily a bad thing. We have to figure out how to do less of the bad stuff and more of the good stuff.
The piece bristles with great quotes. “Everything is documented, and little of it is edited. Editing is one of the great inventions of civilization,” says Jill Lepore, a professor of American history at Harvard and the author of the recent The Whites of Their Eyes.
Artificial intelligence pioneer Jaron Lanier, author of Digital Maoism, adds, “We have created a technology that has wonderful potential, but that enormously increases our ability to lie to ourselves and forget it is a lie. We are going to need to develop new conventions and formalities to cut through the lies.”
Fallows resists the urge to pass judgment on what is right and wrong about new media. He sees some merit to Gawker’s lowbrow model, praises Jon Stewart and Stephen Colbert for inventing a new approach to journalism and even gives Fox News a pass for at least being honest about what it is.
He also dips into historical analogy to make a case that the media world has never been very stable. For example, Time and Newsweek were Depression-era experiments that were given little hope of success in their early days. National Public Radio didn’t exist during the Johnson administration. Television trivialized news, but it also gives us great shared experiences like the Apollo moon landing. All of these institutions were ridiculed in their early days because they broke with the way information had traditionally been delivered.
We are breaking the mold again, Fallows sums up, and very little can be done about it. So let’s look for virtue in new models and try to minimize our losses.
“I am biased in favor of almost any new project, since it might prove to be the next New York Review of Books, Rolling Stone, NPR, or Wired that helps us understand our world,” he concludes. “Perhaps we have finally exhausted the viable possibilities for a journalism that offers a useful and accurate perspective.”
Miscellany
Alan Mutter asks “Will classified advertising come back?” The short answer: No. The people who used to buy real estate, automotive and recruitment advertising have found new and more-efficient channels and simply moved on, Mutter says. He has some interesting stats about newspaper classifieds:
Recruitment advertising is down 85% since 2005
Real estate advertising is off 76% in the same period
Automotive is down 73%
Not only has that business permanently migrated elsewhere, the Newsosaur writes, but the one bright spot in the newspaper classified picture – legal advertising – is likely to shrivel as the economy improves and foreclosure and bankruptcy notices disappear. You can’t win for losing.
The daily newspaper is the result of a finely tuned process in which each component must perform exactly as expected or else there’s hell to pay, Waite says. This process has been developed over the course of the last 150 years and is embedded into every aspect of the newspaper culture. Whatever you do, don’t mess with the production system.
This is why newspaper websites continue to be little more than digital versions of their print products. Process is so important that publishers can’t imagine doing things any other way. Waite notes that while innovative applications have emerged at many newspapers, they all exist on separate servers outside of the production system. These ideas won’t go mainstream – and news organizations won’t change what they do – until technologies like map mashups, real-time updates and crowdsourced fact-checking are integrated into the content management system. That will happen slowly, if it happens at all, he writes on Nieman Journalism Lab. A culture that is so hidebound by process is not one that sparks innovation.
Perhaps Mozilla can provide an answer. The organization that created the Firefox browser, among other things, has partnered with Knight Foundation on a fellowship program that will deliver 15 technologists to major newspapers to develop “new, adaptive tools for the future.” The idea is that these fellows won’t be simply hired hands, but will bring innovative ideas based upon open source concepts like sharing and assimilation of other applications. They will spend the next three years working with some major newspapers on projects that will be available to anyone.
With its $315 million sale to America Online, Huffington Post now has to be considered one of the U.S.’s most highly valued news operations, so it’s only natural that observers should begin to wonder when it’s going to start paying its contributors a meaningful wage.
The debate is fueled by HuffPo’s unusual content model, which is based upon a large volume of articles contributed free by unpaid bloggers, as well as syndication and aggregation services that effectively used other people’s content to sell advertising.
Arianna Huffington’s “blogger network is an amazing achievement; she’s persuaded untold numbers of people to write for nothing, to have their names on the page as compensation for their labor,” writes Dan Gillmor on MediaActive. That model fits perfectly with the one that’s emerging at AOL as it places new-media bets with sites like TechCrunch and the Patch constellation of local news sites. “There’s a common thread in many of the content initiatives: paying low (or no) money to the people providing the content,” Gillmor writes.
But is that wrong? After all, no one is forcing bloggers to write for HuffPo for free, and the site’s terms & conditions state that contributors aren’t entitled to any compensation. Writing on Columbia Journalism Review, Lauren Kirchner notes that unpaid labor can actually be illegal in some circumstances. People have even been forced to accept payment when they didn’t want it because their volunteer work was deemed to be an unfair competitive advantage for the organization that benefited from their labors.
Even arrangements similar to HuffPo’s have been successfully contested in the past. Kirchner points to a suit filed against AOL years ago by a group of unpaid community managers who alleged that their efforts contributed to the company’s bottom line. The suit never reached trial and AOL finally settled for a reported $15 million, denying the world a clear precedent.
It’s unlikely that Huffington will change the practices that have contributed to its meteoric rise any time soon. But pressure from prominent voices like Gillmor could make executives uneasy. “The Huffington Post’s business model is perfectly legal. But is it right?” Kirchner asks.
Maybe not, but right in what context? We believe the debate over Huffington’s pay scale is a straw man for the bigger issue of content devaluation brought on by the Internet. Nate Silver contributes a fascinating analysis in this respect. He dissects the Huffington Post’s revenue model and determines that free content generates just a tiny percentage of the business. “The median blog post, with several hundred views, was worth only $3 or $4,” he writes. Even blockbuster articles contribute less than $200 to the site’s revenues.
Silver’s analysis makes a number of assumptions, due to the lack of publicly available information, but the number that caught our eye was his estimate that HuffPo publishes about 100 articles per day. If you figure that nets out to 30,000 articles per year and revenues of $30 million, then the average article is worth about $1,000 to the site. Assuming that HuffPo pays a 20% royalty to the author, then the average writer would expect to receive no more than $200 per piece. Silver’s methodology, which is based on traffic, estimates the actual value at much less than that. Under any scenario, unsolicited content is worth no more than a few bucks.
Huffington Post is only the most visible example of the new economics of news in which writers can expect to receive much less payment for work than they did in the heyday of mainstream media. Forcing the business to pay more to its writers doesn’t change those economics. Operations like Demand Media are standing at the ready to pay a nickel a word. The market will continue to find its low-water mark.
The good news — if there is any — is that this dynamic isn’t new. Back in the pre-Internet days, The New York Times was able to get away with paying freelancers a pittance for their work because it was The New York Times. The value of the byline was enough to reward contributors, even if the actual paycheck was only beer money.
We believe that there is an explosion of demand about to come from corporations that are embracing the new tactics of “content marketing.” These businesses must increasingly compete on the value of their content rather than the size of their advertising budget, and they will need to hire professionals to help them. This may be small consolation to many journalists, but at least it offers the possibility of a living wage that enables them to practice independent journalism, if only in their spare time.
Second-half magazine circulation continued to tumble in 2010, with Hearst down 6% and Condé Nast off 10%. The biggest culprit is declining newsstand sales as consumers increasingly turn to their smart phones for information. Paid subscriptions were actually up 3.2%. Magazines continue to cut distribution and increase subscription prices in order to prop up profitability.
An interesting side note to this story is that Sports Illustrated will stop selling print-only subscriptions. Instead of paying $39 to receive the magazine, people will now have to pay $48 to get a bundled print, web and Android app edition . Why no iPad version? The publisher and Apple are still trying to work that out, but nothing is expected soon.
If you think “crowdsourcing” is destroying the economy, then don’t read this…
“Princecharming” will type up a poem about anything you want and send it to you, signed, in the mail.
“Nick0000″ will turn a black-and-white image into a color image (left).
“Berthold” will proofread 800 words of English or German.
“sugars68” will write a unique original article for any keyword, with delivery in 24 hours.
What do these stunts have in common? They’re all things people will do for $5. At Fiverr.com you can find people to provide products and services ranging from the ordinary (deliver parenting advice) to the bizarre (design your name from energy drink tabs) for a lousy sawbuck.
Fiverr is a real e-commerce site. If you want to take someone up on an offer, click a button, pay by PayPal or credit card and wait for the results. Buyers can rate the quality of the transaction and sellers can accumulate feedback scores, just like on eBay. You can even post a request for people who will fulfill your desire. All for five bucks. Amazing.
It’s disconcerting when the CEO of one of the emerging giants of online publishing is quoted referring to the acquisition of a news organization as “the future of the content space.” However, that’s how AOL CEO Tim Armstrong apparently sees the hundreds of millions of dollars in recent investments his company had made to acquire properties like TechCrunch, Patch.com and now Huffington Post. He’s filling a space.
He could do worse than to fill it with the staff at Huffington, however. The $315 million deal, which was announced late last night, puts HuffPo founder Arianna Huffington (right) in charge of all of AOL’s editorial properties, which include TechCrunch and the rapidly growing Patch.com network of local news sites. She also gets Mapquest and MovieFone thrown into the deal. This should be a dream come true for Huffington, who launched HuffPo as a blog six years ago and who has taken only $1 million in investment capital since then. The New York Times has all the facts.
Huffington has a chance to shape a new kind of media company as AOL struggles to recover from its disastrous merger with Time-Warner and its reputation for editorial superficiality. AOL has made some innovative strides in investing in Patch, and its earlier acquisitions of TechCrunch and Engadget demonstrate a willingness to invest in distinctive editorial models that challenge mainstream media. However, as The New Yorker noted in a recent critical profile of AOL and Armstrong (summarized on PaidContent.org), the company’s failure to hire an editor-in-chief has made it appear strategically aimless. The installation of Huffington in that job is a chance to fix that.
HuffPo is growing like a weed. The organization now has more than 200 employees and is on track to generate $60 million in advertising revenue this year. Paywall fans might want to note that HuffPo has no paid subscription model. In fact, as The New York Times points out, readers’ ability “to leave comments on Huffington Post news articles and blog posts and to share them on Twitter and Facebook has been a major reason the site attracts so many readers.”
AOL has been such a backwater of editorial mediocrity for so long that it’s hard to shake the assumption that the company will find a way to screw this up. However, Armstrong does appear willing to place bets on some properties that are breaking the mold of how journalism has traditionally been done. With Huffington at the helm, AOL has a strong leader in this “space.” Please just don’t call it that.
Shaky Daily
Have you downloaded your copy of Rupert Murdoch’s The Daily for the iPad yet? Don’t rush. A lot of early adopters are apparently still waiting for it to load. PaidContent.org says the app routinely takes a minute or more to start and that crashes and freezes are common. In ratings on the iTunes store, “even the positive reviews mention load problems and crashes,” writes Staci Kramer. Adds John Gruber, “My opinion of it has declined each day.”
Alan Mutter is a little more definitive, pronouncing The Daily “a dud” based upon its first issue. With “the barest possible news report back-filled by a bunch of vapid features,” the journal is “more like the Etch-A-Sketch edition of Us magazine than the ground-breaking news platform it purports to be,” he writes. Ouch.
To be fair, The Daily is in start-up mode, and anyone who has ever launched a new publication will tell you that the first issue is usually not portfolio material. Few people will remember these early negatives if the venture turns out to be a hit (remember Amazon’s frequent outages in the late 90s? Neither do we). One impressive achievement for the new publication is the stable of blue-chip advertisers it’s lined up. AdAge says they include Macy’s, Verizon Wireless, Land Rover, Pepsi Max and Virgin Atlantic. It also ran a 30-second ad on the Super Bowl, but that achievement is made less notable by the fact that its parent company owns Fox Broadcasting.
The Times They Are Delaying
It’s been nearly a year since The New York Timesannounced plans to charge for access to its online content starting in January. Now January has passed and we’re still waiting for what publishers hope will be a model for other subscription wannabes across the Internet.
Perhaps the Times is dallying because it doesn’t want the paywall to be another Daily. Times staffers are laboring to fix more than 200 bugs in the technology for charging readers, Bloomberg says. The difficulties apparently stem from the complexity of the app, which has several payment tiers and which must balance limited access with the offsetting needs to be visible to search engines and to enable readers to easily post links on Twitter and Facebook.
While the world waits for the time strategy to unfold, the paper has quietly launched an unrelated and useful recommendation engine. Neiman’s Megan Garber caught up with Marc Frons, the Times’ CTO for digital operations, and discovers that the engine does a lot more than simply spit back articles that share similar tags. Frons says the program also looks at “people’s patterns, and how they move around the site, and what sorts of different things they might look at.” It tries to figure out what you might like even if you haven’t read stories in that domain recently. On the back end, it gives the Times greater insight into what readers want, which probably has some value in determining what they will pay for.
And Finally…
We were so stunned by the ad for coupon broker Groupon that ran on the Super Bowl last night that we fished it out of YouTube to be sure we hadn’t heard it wrong. We hadn’t. Actor Timothy Hutton delivers a solemn soliloquy on the suffering of the people of Tibet under Chinese rule. “Their very culture is in jeopardy,” he says. But there’s a bright spot: “They still whip up an amazing fish curry,” and you can get it for half off with your GroupOn membership.
We hope this ad is a subtle joke. If so, it sets new standards for subtlety. In a posting on the Groupon blog, founder Andrew Mason explains that the ad is partly satirical. “What if we did a parody of a celebrity-narrated, PSA-style commercial that you think is about some noble cause (such as ‘Save the Whales’), but then it’s revealed to actually be a passionate call to action to help yourself (as in ‘Save the Money’)?”
Actually, we think it’s a terrible idea. Using the suffering of people and the peril of entire species to sell advertising is sort of baldly offensive on its face, don’t you think? If the ad is intended to raise money for Tibet, it would have been nice to offer diners the option of sending their savings directly to Tibetan relief. But the ad neglects that detail.
If you agree that this campaign is over the top, please tweet your thoughts to Andrew Mason. Better yet, give to The Tibet Fund, where Groupon is saving face by matching donations up to $100,000.
Singleton transformed MediaNews from an unknown regional holding company into the country’s sixth largest newspaper publisher, with weekday circulation of 2.4 million. His able sidekick was the company’s president, Joseph Lodovic, whose financial wizardry enabled much of MediaNews’s growth. When the company entered bankruptcy last year, Singleton and Lodovic engineered a debt-reduction plan that still left them with a significant stake in the company, a rare outcome in a Chapter 11 filing.
Both are now out. Singleton has been promoted into a powerless strategic role and Lodovic has retired. Martin Langeveld, who worked at MediaNews for 13 years, offers a shrewd analysis of the ownership picture of the U.S. newspaper industry. It is now dominated by bankers, hedge funds, investment bankers and others who could care less about public service or journalism. But that’s not necessarily bad.
Langeveld looks at the industry’s ownership map. The majority of newspaper holding companies in the U.S. have experienced one or more bankruptcies over the last five years, leaving control in the hands of creditors and shareholders. Langeveld presents a chart showing who is now in charge at companies like MediaNews, the Philadelphia Media Network, Journal Register Co., Freedom Communications, Tribune Co. and others. It turns out to be a small circle of friends, led by Alden Global Capital, which has stakes in no less than six media companies that are emerging or have emerged from bankruptcy.
Langeveld sees the possibility for a massive consolidation to take place now that so many interlocking directorates are mapping the future of these distressed companies. Which is a good news-bad news scenario. “Strategic geographic consolidations, if operationally led by someone of [Journal Register CDO John] Paton’s caliber, could be a potent force for the rejuvenation of the industry, including a renewed focus on…local journalism,” he writes. But there’s also the pessimistic view, which is that these firms simply get chopped up and sold off piecemeal.
The timing could be good for the dismemberment scenario. After crossing the Valley of Death in 2008 and 2009, most U.S. newspaper companies are once again on stable, if shaky footing and many are profitable again. The Los Angeles Times might even fetch a price of $1 billion, says Sharon Waxman of The Wrap, quoting industry analysts. That would be a shot in the arm to Tribune Co., which could barely even give away its newspaper properties when it was frantically bailing water in the days before it entered Chapter 11. It could also be good news for The New York Times Co., which couldn’t even get $25 million for its distressed New England properties two years ago, but which might be primed to take another run at selling off the Boston Globe.
So investors might choose to get while the getting is good, but they might also opt to stay in for the long haul. Ken Doctor sees the possibility of progress as investors consolidate control. “We’re seeing increasing impatience among the new owners with the old leadership,” he writes on PaidContent.org. “A growing conventional wisdom among them: Too many newspaper CEOs just aren’t moving fast enough to grasp the mostly digital, multi-platform future.” If investors do believe that media companies have a future – and the 2010 recovery in stock values provides at least a glimmer of hope – then they may bring in new management that has a clue about the new media world.
“At Freedom, the new owners brought in as CEO Michael Mitchell Stern, who came from DirecTV,” Doctor recounts. “In Philly, they brought in Greg Osberg as CEO and publisher; Osberg comes both from magazines and digital start-ups. The new Star Tribune owners brought in Mike Klingensmith, a Time Inc. alum. The new formula: out with the newspaper-only people and in with media people.”
Or, as John Paton recently said, “Stop listening to the newspaper people and start listening to the rest of the world.”
A Test for Tablets
The Daily for the iPad is set to launch any day now, and media watchers are abuzz over whether a tablet-only news product that is reportedly backed by $30 million of Rupert Murdoch’s money has a chance.
In case you missed it, The Daily is Murdoch’s bet that tablet owners will pay a buck a week to get a quality news service. He’s reportedly hired 100 journalists, including some well-recognized names, and set in for the long haul. It’s a bit retro, even while being progressive. For example, the text won’t have any hyperlinks and there will be no Web equivalent that readers can share. Apple is helping out by making The Daily a signature product on its new iTunes subscription service.
Ken Doctor hauls out the old spreadsheet and calculates the economics of the venture. He figures that if about .25% of tablet owners opt in for a yearly subscription, The Daily can clear $10 million in annual reader revenue. Can advertising make up the difference? That’s the question, and without any similar products to use for comparison, it’s anybody’s guess. Doctor’s view is that The Daily has a chance, but Murdoch is a risk-taker who has some history of spectacular failures. For Rupert, though, $30 million is pocket change. (Martin Langeveld also shares his thoughts on The Daily over on Quora).
Speaking of subscription fees, speculation over what The New York Times will charge for access to its web content is at a fever pitch. BusinessWeek says the fee will be less than the $19.99 a month the Times charges for its Kindle edition. This is a minor scoop at best, since a Times Co. executive said as much last month. We just wish the Times Co. would announce a pricing plan so we can get some sleep.
Big Pay for Big Names
Conventional wisdom in the journalism business is that new media ventures pay a lot less than the traditional outlets they replace. But that isn’t necessarily true, according to The Wire. The insider-y media site, citing unnamed sources, says that big-name journalists such as the Washington Post‘s Howard Kurtz are commanding six-figure salaries at some well-funded websites. Specifically, The Wire says Kurtz is getting a $600,000 salary at Daily Beast, while Tim O’Brien commands $400,000 a year at Huffington Post. “We may be entering a new golden age of journalism, in which the most-talented digital journalists can make way more than their print counterparts ever dreamed of,” writes Henry Blodget.
“Balderdash,” says the Beast. In a rejoinder to Blodget, Beast Executive Editor Edward Felsenthal says he was “flabbergasted to read the salary figures you tossed out for Howie Kurtz.” However, Felsenthal doesn’t provide any guidance on what the Beast is actually paying Kurtz, and HuffPo isn’t talking.
Meanwhile, Blodget takes the opportunity to add The Daily and Bloomberg LLC to the list of generous employers. Bloomberg, he notes, “has quietly become the second-richest and most powerful media organization in the world.”
Does this mean happy days are here again for journalist pay? Not likely. The majority of grunt-level former reporters still say they’re getting half of what they were making in mainstream media, or less. Demand Media, for example, reportedly pays about 10 cents a word for its articles, which are assigned based upon their performance in search results.
Just when you thought there was already enough social media in your life, here comes Quora. The startup founded by former Facebook executives raised $14 million last year and was valued at nearly $90 million before even releasing a product. Now Quora is live, and the journalism community is buzzing.
“As more journalists have joined the network over the last week there has been a surge in journalism related questions and discussions,” notes Journalism.co.uk. Writer Kristine Lowe says reporters can use Quora to drum up story ideas the same way they have been using Twitter. The difference is that Quora doesn’t have a 140-character length limit and lets you follow topics as well as people, which is a feature journalists should love. It also connects to members’ Facebook and Twitter accounts, enabling friends and followers to monitor their questions, answers and topics as part of their news feeds. Caroline McCarthy has a good summary of the perfect storm that’s created so much Quora buzz.
Quora describes itself as “a continually improving collection of questions and answers created, edited, and organized by everyone who uses it.” Topics are raised in a question-and-answer format and answers are updated in real-time. You can follow questions, topics and people. The crowdsourced organization scheme is quick and reasonably comprehensive. The “Newspapers” topic, for example, shows the most recent additions by default, with options to view open questions or “best questions,” which are those with the most favorable votes from members. There are also subtopics for individual newspapers. Anyone can curate a topic.
Search results on Quora continue the question-and-answer metaphor. For trivia nuts, it’s a gold mine, but it’s also a good way to stimulate story ideas and find sources. Want to know how the “often prickly relationship between PR people and journalists can be improved?” There’s a topic on that, and every respondent is a potential source.
Writing in the Globe & Mail, Amber MacArthur comments that “Unlike Twitter in its early days, Quora appears to have a base of members that stretch beyond early adopters. Even business executives, such as former AOL Chairman and CEO Steve Case, are answering dozens of questions.” In fact, Case recently used Quora to answer a question about how much it cost AOL to distribute millions of CDs in the 1990s, which is a topic AOL has never chosen to discuss.
Elias Bizannes suggests that Quora is the future of journalism. Chris Crum says it’s kind of like Twitter with quality control, and that can be both a good and a bad thing. We’re curious to hear your thoughts. Is this an evolution or journalism or just another tool journalists can use?
The Atlanta Journal-Constitution is profitable again, and “This ensures that we can continue to produce the quality journalism that you’ve told us is important to you,” crows Publisher Michael Joseph in a 1,000-word tribute to all that the paper is doing for its community. “Our improved financial picture is allowing us to again expand content offerings that are targeted toward what you’ve told us really matters in your lives.”
It will be interesting to see if area readers agree with this publisher’s optimism (comments are disabled on the essay), for the AJC has suffered some of the worst cutbacks of any major metro daily. In early 2009, the paper laid off 30% of its editorial staff, reducing its total size to less than half of what it was in 2006. Distribution to seven outlying counties was discontinued, coming on top of an earlier decision to cut all its regional editions. The AJC daily circulation fell 52% between 2002 and 2010, although some of that loss was self-inflicted due to distribution cutbacks.
The question is whether a newspaper with a staff of 230 journalists can produce the same quality of material as one with 500. We don’t want to dismiss out of hand the possibility that it can, but it won’t look anything like the paper it was a few years ago. In a desperate bid to survive amid its circulation free-fall, the AJC has completely upended its editorial model over the last five years, turning most of its attention to the suburbs and vacating its downtown offices in August in favor of cheaper space near the northern suburb of Dunwoody It has taken steps to address a perceived left-wing bias and chosen not to endorse candidates in recent elections. The AJC has partnered with local Cox TV and radio stations on tag-team reporting projects, attempted to partner with local weeklies to share content and even run occasional pieces from Demand Media, the crowdsourced editorial engine that assigns stories by keyword relevancy.
Can you cost cut your way back to success? The AJC will be on the leading edge of answering that question. There’s nothing like a near-death experience to focus the mind, and in slashing its costs, the paper has had to make some grueling decisions. Its experience is probably familiar to many in the industry, where the shift of the audience to the suburbs has challenged publishers to remain relevant at the local level its audience cares most about. It helps that the AJC has a near monopoly in its market, and that its website is the default destination for news about all things Atlanta. There’s nothing particularly special about its Web presence, but it was one of the first major dailies to release an iPad app.
Its free classifieds service is an acknowledgment that there is no more money in that business anymore. The question is where the revenues are going to come from? A lot of eyes in Atlanta will no doubt be on The New York Times as it attempts to launch a paid online subscription model in the first quarter. For a paper with the regional clout of the AJC, that may be just what the doctor ordered.
The New York Times asks if comedian Jon Stewart is the modern-day Edward R. Murrow, citing Stewart’s advocacy for legislation awarding health-care benefits to 9/11 responders that passed in the last hours of the 111th Congress. Stewart devoted his Dec. 16 show to the bill, which had received little coverage in mainstream media and was about to die with Congress’ adjournment. That show is widely credited with having resuscitated efforts to get the measure approved. Stewart says he isn’t a journalist, but the Times points to similar advocacy reporting by Murrow and Walter Cronkite that shifted public opinion about events in their time, and suggests that Stewart’s appeal to young audiences may kindle an interest in advocacy journalism by a new generation.
People passing by newsstands in Sacramento may do a double take when they hear the “talking news rack” deliver a 15 second recorded message each time a newspaper’s purchase. The news racks also have a scrolling LED that can display news, messages from the editor and even ads.
In the weeks before her death from the rare disorder of peripartum cardiomyopathy, Shana Swers documented her ordeal on Facebook. Reporter Ian Shapira was intrigued, and when the Washington Post assigned him to tell the story, he chose to anchor it in Swers’ own Facebook posts. The clips from Swers’ wall were annotated by Shapira, who did the traditional blocking and tackling of interviewing family members and medical experts, but the writer chose to sacrifice the journalist’s traditional privilege of owning the narrative. The piece is already being held up as one of the most innovative alternative news stories of the year. Mallary Jean Tenore provides more background on Poynter.
![](http://static.businessinsider.com/image/4cab5f7b7f8b9a0513f40300/howard-kurtz.png "The Washington Post's Howard Kurtz Is The Latest "Gray-Haired Dude ...")
