By Paul Gillin | March 23, 2012 - 10:07 am - Posted in blogging, BusinessModel, Education, Future of Journalism, Journalism, NewMedia, Newspapers

Five years ago today I posted a 29-word squib on the question of whether bloggers are journalists. With that inauspicious beginning, Newspaper Death Watch was launched. Nearly 600 posts and about a half million words later, it’s still here, though its charter has changed over that time. In many ways this blog is a microcosm of the forces that have all but swept away the once-mighty US newspaper industry and replaced it with the seeds of something that I believe will ultimately be much richer and and more valuable.

This blog was launched out of our frustration at my failure to find a publisher for an op-ed piece I wrote in 2006 forecasting the collapse of daily newspapers. The Wall Street Journal and The New York Times were polite in their rejections. The Boston Globe‘s Joan Vennochi, displaying the arrogance that was typical of that newspaper in those days, didn’t respond to multiple phone calls and faxes. Op-ed editors’ lack of interest in my point of view was understandable; 2006 was the best revenue year the newspaper industry ever had and forecasts of catastrophe seemed ridiculous. I knew from many years following the technology industry, however, that businesses often enjoy their best years just before their collapse. I self-published a longer version of that essay and started this site to document the death spiral that I knew was about to begin.

Transformational Time

The five years since then have been pivotal years in the history of media. The turning point came in 2009 when two venerable dailies – the Rocky Mountain News and the Seattle Post-Intelligencer - shut down with little notice, and several big papers, including my beloved Globe, were threatened with the same fate. More background here. The industry came out of that experience with a sense of urgency about its own survival and made changes that will prolong its decline but not change its fate. As Pew recently reported, most publishers are moving toward a digital future slowly and reluctantly. This still doesn’t look good.

The death watch began to bore me after 2009, and I’ve spent the last two years focusing more on the experiments that are sprouting up to preserve and evolve the craft of journalism. The good news is that there is a lot of innovation out there. I’m impressed by Pro Publica, Politico, Minn Post, Voice of San Diego, AllVoices, Global Post, California Watch and Sacramento Press, to name just a few. These startups all proceed from the assumption that good journalism can be practiced without the overhead of presses, paper, delivery trucks and newsstands. In fact, when you remove the expense of printing and delivering a newspaper, the actual cost of the journalism is pretty low. Then you can do some innovative things on the business side to pay the bills and maybe even make a profit in the long run. I applaud their work and the work of many others like them.

Power of One

It’s been amazing to see how much attention one person can attract with a little perseverance and the right tools. I’ve been interviewed on Al-Jazeera and CNN, featured on Australia’s leading network news program and spotlighted in a documentary. Spain’s largest daily newspaper featured me in a center spread. I’ve been cited in the Journal, USA Today, The Economist, The New Yorker and many other well-known publications. You can find a complete list of media mentions here. I get e-mail inquiries from media outlets every couple of weeks and always help out as best I can.

More rewarding have been the opportunities I’ve had to work with journalists and students through fine organizations like Poynter Institute, USC Annenberg, the American Press Institute, Boston University, Emerson College, SUNY Stony Brook and Emmanuel College. My point of view hasn’t always been popular with the editors and teachers I’ve met, but I’ve found most of them to be open-minded. I try to emphasize what I’ve said many times: The problem with newspapers isn’t the quality of their journalism but the weakness of their business model. It’s ironic that readership of newspaper content in print and online is at an all-time high while the revenues of the US industry are at a 60-year low. We should be focused not on preserving newspapers but on preserving journalism.

Power of Free

I earlier called Newspaper Death Watch a microcosm of the changing media industry and here’s what I meant: This blog has annual expenses of $57 for website hosting. It is a labor of love and an outlet for passion.It has long been a top Google result for queries about the decline of newspapers, and a couple of years ago Google decided to make it one of the top search results for “newspaper industry.”

As a result, the site gets between 400 and 600 visitors on an average day and has more than 1,200 RSS subscribers. One day in February, 2009 it was visited more than 3,000 times. I get a steady stream of e-mails from students asking about journalism careers or seeking help with term papers. Fifteen years ago that kind of visibility would have cost tens of thousands of dollars to create and thousands annually to sustain. International reach was almost unthinkable. Today it’s basically free.

This is just one small example of many thousands of blogs that are making a difference because the bloggers have something to say.  The ability of one person to create conversation today is stunning. Last month a man in North Carolina pumped eight rounds from a .45 into his daughter’s laptop to protest her selfish behavior. He posted the video below on YouTube and within three days started a global conversation about parenting, generational conflict and the impact of social media on young people. These kinds of events are commonplace today. They represent a fundamental shift in power and influence from the media to the individual.

It used to be said that power resided in the hands of those who bought ink by the barrel. Today it resides in the hands of those who have something to say and the passion to find a way to say it. What could be wrong with that?

–Paul Gillin

Framingham, MA

Near the end of the overview section of the Pew Research Center’s exhaustive study of the business issues facing American newspapers, one unnamed executive sums up the industry’s dilemma:  ”There might be a 90% chance you’ll accelerate the decline if you gamble and a 10% chance you might find the new model. No one is willing to take that chance.”

That’s it in a nutshell. The newspaper industry is standing on a railroad ­trestle 100 feet above a rushing river while a locomotive bears down on it. The only thing worse than getting hit by the train is jumping out of the way. The study outlines in depressing detail how paralyzed the industry is in its search for new business models, although there are glimmers of hope in the successes of a few innovators.

Pew’s Project for Excellence in Journalism surveyed 38 US newspapers and conducted extensive on-site follow-up interviews to examine the industry’s search for new business models. The sample was representative of the composition of US newspapers as a whole, with a mix of geographies and a preponderance of smaller titles.

In general, small papers are faring better than the large ones, but all are facing the same specter off print advertising declines that far exceed growth of digital alternatives. In fact, researchers concluded that for every $1 gained in new digital revenue, newspapers are losing $7 of print revenue.

“There’s no doubt we’re going out of business right now,” said one executive.

No Names, Please

How Quickly Newspapers are Growing Digital RevenueOne of the project’s most frustrating characteristics is its anonymity. Researchers had to promise not to name names in order to get executives to let down their guard. The result is some memorable quotes but few actionable examples. We learn of one small paper that posted 63% growth in digital revenue in the last full year while also growing print sales 8%. Another major metro daily was said to have grown its digital business 50% in the last year. It would great if these outliers would come forth and tell everyone else how they did it, but we may never know their identities.

The Pew study is emphatic in identifying the industry’s core problems as more cultural than operational. “There’s a big difference between understanding the new media environment and comprehending what it takes to adapt,” says one executive.

Fifteen years after the arrival of the commercial Internet, the industry continues to rely on print advertising to an alarming degree and has made only halting progress in developing new revenue streams. That isn’t for lack of trying. Everyone is trying to find digitally savvy salespeople, most are paying premiums for online ad sales and all publishers are aware of the need to experiment with alternative revenue sources like daily deals and business services.

However, they’re mostly having meager results. Few papers studied in the report are taking advantage of the growth in targeted digital advertising. Most are still reliant upon low-margin display ads. Nearly half of the publications have experimented with alternative revenue streams like consulting services and digital shopping malls, but only one reported any significant revenue.

Culture Clash

Unfortunately, rapid sales declines in the profitable print business are creating a hair’s-on-fire hysteria that sabotages change. The kind of salespeople publishers need to hire don’t want to work in an industry that’s in crisis. The number of print-focused sales representatives outnumber digitally focused reps by about 3-1 at the newspapers surveyed and there continues to be debate at some companies about whether digital is event the future. That sounds incredible, but the study identifies entrenched resistance among many publishers to diverging from the business model that served them so well in the days of monopoly market share and 20% profit margins.

Officials at 10 of the 13 companies said their biggest challenge was the continuing tension between people in their organizations who are advocating a more aggressive digital approach and those more aligned with the legacy tradition. In essence, they described a conflict between going faster and going slower…”We haven’t needed innovative people,” explained one executive. “So you get what you need. The kind of people that came into this industry were more operationally focused, executors instead of innovator risk takers.”

The good news is that there is broad awareness at the highest levels of the companies surveyed that the industry’s problems aren’t going to heal themselves. In fact, no one quoted in the report suggests that the current downturn is temporary or cyclical. Where they differ is on what to do about it. “The data and interviews suggest companies are almost evenly divided between optimists and pessimists-evidence of a lack of consensus on how to proceed in developing the new business model,” the report says. Unfortunately, at a time like this the only certainty is that inaction is death.

By Paul Gillin | February 28, 2012 - 7:25 pm - Posted in Future of Journalism, Journalism, NewMedia, OnlineMedia

Latitude News logoIf you’re the type of person who skips past the international section in the newspaper because it just isn’t relevant to you, maybe you should have a look at Latitude News.

The fledgling operation, which was launched in November, doesn’t look particularly different from any news site on the Web at first glance. The intriguing philosophy that underlies it, however, says a lot about how the Internet has crafted a global village.

Latitude News’ focus is mainly on international events, but it approaches them with an eye toward the U.S. audience. A piece on the recovering business climate in Poland is framed in terms of the reverse diaspora it has sparked among Poles in the U.S., who are now returning home in droves. It was one of the few outlets to report on Brazilian aerospace company Embraer’s entry into the U.S. market for what has historically been an American stronghold: corporate jets.

These kinds of stories might have run in any U.S. newspaper, but Latitude news founder Maria Balinska wants them to be a staple of a new service that takes a novel look at international events.

“There are lots of people in the U.S. for whom it’s not a stretch to go to the BBC or The Guardian,” she said in an interview. “What’s missing is a bridge between their experiences and what those outlets are reporting on.”

In other words, one of the reasons most Americans care so little about overseas news is that they see no relevance to their own lives. The mission of Latitude News is to find those threads and draw them out so that Americans can understand how international events affect them. “People are put off by things that seem very far away,” she said. “Our view is that if there isn’t a local angle, we shouldn’t do it.”

Globe Trotter

Latitude News Founder Maria BalinskaThe idea for Latitude News sprang from Balinska’s multi-cultural childhood and peripatetic career as a journalist working in Europe. She had lived in five countries and attended 10 schools by the age of 18. As a journalist working on the European continent and for the BBC she became fascinated with the international stories that captured the attention of British readers. “People were very interested in individual storytelling and in comparisons,” she said. “They wanted to understand what they could learn from the French health system or what mountains of garbage in Germany meant to them.” She explains some of the research and thinking that led to Latitude News here.

Balinska returned to the U.S. on a Nieman Fellowship two years ago and took advantage of an International Women’s Media Foundation grant to get the venture off the ground. She’s been able to hire a small full-time staff and has some freelance dollars to spend. “We’re looking for people who have a global perspective but who can scratch the surface of American communities and find links and parallels,” she said.

Storytelling is a core feature of the service. In contrast to the often detached perspective readers see in international news coverage, Latitude News strives to find people whose experiences illustrate the local impact of faraway events.

For example, the staff is currently trying to reach victims of the Syrian diaspora who have fled to the U.S. to see if activists living here may later emerge as leaders back in Syria. A story on the Greek debt crisis  is told from the perspective of three Greek citizens who are learning to cope with an economy in a tailspin.

Balinska won’t say how much funding the venture has raised or when it will become self-sustaining. The site is still rough around the edges (clicking on one of the featured stories on the home page today returned a 404 error) and working on a unique voice, but it’s yet another example of how journalists are stepping in to fill the vacuum left by traditional news organizations with innovative experiments.

 

Tablet computers have been hailed as the salvation of the newspaper industry, but most publishers are squandering the opportunity, writes Newsosaur Alan Mutter in a searing sendup of newspaper tablet apps on Editor & Publisher.

“In contrast to the crisp, graphically engaging and highly interactive apps flooding the Apple store, the typical newspaper site is filled with gray, meandering columns of text requiring multiple swipes to get to the bottom of the page. That is to say: Newspapers don’t come close to leveraging the power of this new medium,” Mutter writes, pointing to products from the San Francisco Chronicle, Philadelphia Inquirer and even The New York Times as examples.

Many publishers are opting to use the native tablet browser to deliver content rather than customizing the experience for the device, and some are simply delivering PDF versions of their print products, Mutter says. This laziness is particularly alarming in light of the fact that people who consume information on tablets are among the most desirable prospects for paid circulation and advertising. The Newsosaur believes once they get a load of the visually rich and interactive offerings from magazine and broadcast competitors they’ll never come back to the digital broadsheets being offered by the dailies.

Although we own a tablet, we’ll admit we haven’t spent much time surveying the landscape of news apps. RSS feeds do the job just fine for us. However, if Mutter’s critique is on the mark, this is a head-slappingly stupid mistake on the part of publishers, who finally have a platform that at least some people are willing to pay for. Anyone who has worked in both print and digital media will tell you that the design and presentation skills that work in one format fail badly in the other. The worst mistake a print publisher can make is to put print designers in charge of online look and feel. It’s even worse on tablets, where apps offer a whole new level of interactivity. This is software, not ink on dead trees.

NYT Co. Takes Earnings Hit

New York Times Media Group revenue

Now the sobering news about The New York Times. Coming off a promising third quarter in which the company reported strong growth in subscriptions to its digital editions, parent New York Times Co. reported a $40 million loss in the fourth quarter on an 8% decline in print advertising. The paper’s paywall continues to thrive, and digital advertising revenue was up 5% in the quarter. However, the success online can’t make up for the continued free-fall in the much more profitable print advertising business.

The collapse of that revenue stream was dramatized by blogger Paul McMorrow, who came up with the chart at right. We can’t vouch for the accuracy of the numbers, but the choice of scale demonstrates clearly the industry’s dilemma. Digital revenue is nowhere close to making up for the decline in print.

The Times Co. was also hurt by a dramatic drop in the performance of About.com, the online encyclopedia/how-to engine it acquired for $410 million 2005. About.com was victimized by recent changes to Google’s search algorithms that penalized so-called “content farms” like Demand Media, which pay freelancers pennies to produce crap in the name of driving search traffic. About.com used to top Google search results for a lot of popular consumer queries, but no more. Profits at the site dropped 67% in the quarter on a 25% revenue decline.

 Miscellany

Social media is beginning to cover itself. Social blogging site Tumblr, which hosts more than 42 million blogs, will hire two professional editors to write about what’s going on on Tumblr. The thinking is that a community with that many members must generate a lot of content all by itself. Twitter and Facebook have both recently hired journalists to write about what’s hot in those communities.


Speaking of Facebook, if you’re trying to improve your presence there, take a few tips from Entrepreneur magazine. Starr Hall’s advice includes naming your page appropriately and greeting visitors with a “welcome” page rather than the Facebook wall. And have you heard about the new subscribe feature that lets people follow your public updates without friending you? Read more about that. We also recommend these tips for small businesses and these tips for slightly larger businesses, perhaps because we wrote them. The key to success on the world’s largest social network is engagement, not publishing. Ask questions, prompt response, provoke and amuse. Our vote for the most awesome Facebook page: Skittles. Unique voice and dripping with personality. “Skittles now has 20 million fans? If I had that many guinea pigs, I’d be unstoppable.”

By Paul Gillin | October 4, 2011 - 4:13 am - Posted in Citizen Journalism, Journalism, Local news, NewMedia

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 website also counts more Facebook likes than the region’s largest weekly or monthly print publications, as well as one of the region’s largest daily publications.

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.”

Contact Scott Talkov at scott@thingstodoinlandempire.com.
ESPN Magazine cover

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.

Joe BergantinoCalifornia Watch isn’t the only outlet breaking new ground in this area. Writing on Nieman Journalism Lab, Justin Ellis tells the story of New England Center for Investigative Reporting, another nonprofit operation that is surviving on a combination of grants and revenue from paid training workshops for aspiring journalists. The group has only two full-time staff and a corps of freelancers. It delivers its investigative work via a subscription service and republishes them on its website. The Center recently reached a milestone by matching its grant funds with revenue generated from subscriptions and training, meaning it’s on the road to self-sufficiency.

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?

Financial Times' Mobile AppThe 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.


Meredith is closing the hip, do-it-yourself magazine ReadyMade and eliminating 75 positions. Apparently an audited circulation of 335,000 wasn’t enough to attract advertisers.


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…

Tom MacMasterThis 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.

It gets even weirder. Quoting the account in StinkyJournalism.org:

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.

 

Bill DensmoreBill Densmore has drafted a 55-page white paper outlining some ideas for sustaining journalism in the free-mass-media age that should be of interest to anyone who worries about the future of trusted media.

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.

From Paper to PersonaSound 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.

Good point.

California Watch map mashup of schools on fault linesNieman Journalism Lab scored a coup in landing the eloquent and insightful Ken Doctor as a weekly columnist focusing on the economics of news. His analysis of the cost of journalism at California Watch is well worth reading if you want to understand why nonprofit investigative ventures are so popular right now (ProPublica just nabbed its second Pulitzer).

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

Newspaper ad revenue forecastLest 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.

Hmmm, why didn’t we think of that?

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…

Typewriter typebarsReports 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.


Matt WaiteMatt Waite (left), who was the primary developer behind the Pulitzer Prize-winning Politifact fact-checking application at the St. Petersburg Times, comments on the reluctance of news organizations to embrace meaningful change with extraordinary clarity.

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.

 

Comments Off

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.


More shenanigans in the Tribune Co.’s Chapter 11 mess. It just gets uglier and uglier.

And Finally…

Colorized photo at Fiverr.com

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.