Category Archives: Business

06.08.11
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Ken Doctor digs into the economics of HTML5

Ken Doctor who writes the excellent Newsonomics blog says of the FT’s HTML5 web app:

We first heard of HTML5 as an alternative to Adobe’s Flash as Apple excluded Flash from its products. HTML 5, though, has proven to be a strong foundation for next-generation digital product development (“The Newsonomics of Apps and HTML5?). HTML5 is also the basis for web apps, and it is web apps — those browser-based apps the FT is trumpeting today — that are now providing tech and business competition to native apps.

via FT Declares Independence (from Apple) Day | Newsonomics.

Ken continues on to dig into the FT’s digital business and why they might be in a unique position with respect to other publishes due to their decade-long strategic development of their digital business.

When people and clients ask to me about good models for digital news operations, I first point out that having good digital content offerings isn’t enough. You can have amazing, world-beating editorial, but if it isn’t supported by a sustainable digital business, that’s not a model to emulate.

03.09.11
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Journalism: Winning the battle for attention

Rebuilding Journalism: Winning the battle for attention

View more documents from Kevin Anderson

Last week, I had the honour to return to Sydney Australia for Digital Directions 11, a digital media conference sponsored by Fairfax Media and organised by the ever-wonderful XMediaLab team. I focused on the theme of the attention economy. It’s not a new idea. Umair Haque was talking about it in 2005, but if anything, the issue is more acute now than 6 years ago. Most media business models are based on scarcity. Across the English-speaking world, all but the largest cities are served by only one newspaper. Until cable and satellite, we had the choice of only a few television channels, and in those businesses, high capital costs usually led to monopolies. Digital media of all kinds has ended scarcity, and as Clay Shirky says:

Abundance breaks more things than scarcity does

One of the troubling things has been is that news organisations have responded by creating ever more content. The thinking has been in digital media to create more content to hopefully attract a larger audience and have more content to put ads against. It hasn’t led to increased revenue. If anything, the excess inventory actually depressed digital returns during the recession.

The Associated Press also found in a study (A New Model for News PDF) that young audiences were turning off to news because they were overwhelmed with incremental updates:

The subjects were overloaded with facts and updates and were having trouble moving more deeply into the background and resolution of news stories.

Yet the response by news organisations has been to produce more content even as they have had to reduce staffing due to their economic problems. It’s like trying to save a drowning man by giving him a glass of water.

I argued that relationship and relevance are key to news organisations winning the battle for attention. Engaging audiences directly through social media journalism is one way that news organisations can increase loyalty. I also think that helping audiences discover content that is relevant and interesting to them is key to the future success of news organisations, and I think that they can do this both with semantic and location-based technologies. Success will come with smart, sharp content and real engagement by journalists.

03.02.11
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Digital Directions 11: Fairfax’s digital business

I’m in Sydney to speak at Digital Directions 11. I’ll post my talk to Slide Share in a bit. The conference is hosted by Fairfax, and yesterday, we got a look at their digital business. There are a lot of news and media organisations that have built credible digital offerings over the last decade without building sustainable digital businesses. Fairfax is one of the exceptions. Fairfax CEO Greg Hywood said that digital is its third largest division by revenue and soon to take over the number two spot. Yesterday, we were told that transactions were 60% of digital revenue. Transactions? They have businesses such as a dating service called RSVP and a holiday home rental service, Stayz.com. They are seeing phenomenal growth in that business. Many of these businesses have been acquisitions, not businesses built in house.

Moreover, the revenue being generated by digital is now driving the ascendancy of digital in the organisation. Recently, Jack Matthews, who had been the CEO of digital, was made the CEO of their metro division overseeing both print and digital. He will drive integration. They are going to integrate their print and digital editorial operations, but the current thinking (and this might change) is that while journalism resources will become a common pool, digital will retain its own editorial independence, Matthews told me. Fairfax has found that print and digital offerings don’t share the same audience. Market research has found that their digital audience is slightly more upmarket than their print audience, and they have decided that they need to maintain digital and print independence to best serve those audiences.

They were ready to admit that integration has often meant print divisions taking over digital. If digital didn’t have such a strong revenue position, I doubt, actually, I’m almost certain, that digital wouldn’t be driving integration at Fairfax. That is not to say that it hasn’t been a battle at Fairfax. I know there has been a battle, and Matthews admitted as much. It’s not to say that the battle is over. However, when digital brings revenue, instead of being pushed aside during print and digital integration, they can actually be in the driver’s seat.

02.04.11
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Digital journalists and the battle over newsroom integration

I’ve been meaning to write about newsroom integration for quite a while and so I’ve written about it for journalism.co.uk. The article is based on conversations that I’ve had with journalists in newsrooms around the world and also from some of the well known examples in the industry, including the experience at the Washington Post. A lot of the quotes are unattributed, but I can say that there is a remarkable consistency to the comments I’ve heard.

Last summer, I was speaking to an award-winning digital journalist, and in terms of the fight for integration at his organisation, he asked: “Was there a battle that we lost?”

I want to say up front that I’m not opposed to newsroom integration. In many ways, I am a big booster of bringing digital newsrooms and traditional print or broadcast newsrooms together. I have worked at organisations where the newsrooms have been physically and organisationally separate, and it’s never been productive. I started working in an integrated newsroom in 1998 when I joined the BBC working in their Washington bureau. Not only did I work closely with radio and television correspondents and producers, but I also covered stories for radio and television. Working together was really positive for me and the broadcast staff. My esteemed former colleague Paul Reynolds used to tell me on a regular basis that I was the future of journalism, and I had all the support that I needed and more from bureau chiefs Andrew Roy and Martin Turner. It was a collaboration of mutual respect.

I think that Jim Brady has it spot on when he said that digital editors still need the autonomy to push news organisations in directions that they might not naturally head. Digital innovations are still often counter-intuitive to leaders in legacy media. We still need people who think different at the table.

However, based on conversations with fellow digital journalists and editors, newsroom integration has been very difficult for them, especially for those organisations that have tried to integrate organisationally as well as at the platform level. Many digital editors and sadly far too many digital journalists have been pushed aside or in some cases completely pushed out. From a business standpoint, especially for those news groups suffering financially, the motivation has been efficiency. As Francois Nel said in the piece, integration has to be about efficiency and effectiveness. Francois is the director of the Journalism Leaders Programme at the University of Central Lancashire, and he’s worked with WAN-IFRA to help newspapers groups including the Johnston Press in the UK with their integration efforts.

I’m surprised that news groups continue to pursue the ‘pure’ integration model because for those organisations that moved early in that direction, such as the FT, many have since pulled back. There is a realisation that print and digital often serve difference audiences, and I think this is especially true as digital has continued to develop. Editors now understand (what I’ve known for years) digital journalism is a practice with its own skills and proficiencies just as print reporting or broadcasting. The dream of the super journalist equally proficient at everything was always more myth rather than reality. Few journalists excel at all roles, and even if they did, the demands of any one role, especially in the age of shrinking staffs, would cause sacrifices to be made, corners to be cut.

One area I only touched on briefly in the piece for journalism.co.uk was the role of middle managers. Francois said, in a quote that didn’t make it in the final piece:

The most critical person in the any individual’s daily work life is his or her line manager. And, as such, the best examples of change management are those where courageous and visionary leaders empower and equip middle management to handle the fallout.

Right now, middle management is one of the key issues in terms of integration. The subject comes up again and again in the conversations that I have with digital staffs. Even at organisations with strong digital leaders at the top and willing staff, middle management can still stop change dead in tracks, and often this where the energy comes in terms of marginalising digital leaders. They have the most invested in the status quo and least motivation to change. Middle management can and should lead the charge ahead and create a constructive environment for collaboration. However, in a lot of organisations, this is where change lives or too often dies.

01.31.11
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Lesson from MySpace: “Never Stand Still”

MySpace has gone from fast rising social network to a fast falling has been, waiting to be sold by News Corp. In terms of mindshare, it’s already joined the deadpool. Chris Thorpe flagged up this great blog post this morning:

[blackbirdpie url=”http://twitter.com/jaggeree/status/32066764669980672″]

The blogger, John Willshire, is also a member of a band, and he managed to cobble together a new presence for his band, Gamages Model Train Club, by pasting together a number of other services: Tumblr, Soundcloud, iTunes, Facebook, Google Analytics and Feedburner.

Most articles written about the fall of MySpace focus on the lack of focus after News Corp acquired the social network. Rupert Murdoch turned his attention to other areas of his empire, and MySpace simply failed to keep pace with Facebook.

John’s big lesson from MySpace is that digital businesses must never stand still. As he says, MySpcace was never easy to use, which left open the huge opportunity that Facebook exploited. More than that, while MySpace had been improving incrementally before News Corp acquired it, those improvements stopped after it was bought by the Beast.

Don’t launch things small and often, let’s launch things infrequently, but talk about all the changes we make at once.  So don’t talk about anything in between that spoils this, please.  Oh, and we need a major review of what we’re doing with the site, platform, tech, so don’t do anything till that’s complete….

…and so and and so forth.  By trying to sort everything all at once, as old, established companies want to, and as you’d have to do with a newspaper redesign, Myspace stopped evolving.

Lessons for news organisations

When I started in digital journalism, I worked for small organisations, and we ran on shoestring budgets. It wasn’t until I joined the BBC that I worked for a well-resourced operation, and even then the BBC News website had (and still has) a tiny budget compared to BBC TV (but then my former colleagues in radio will say the same thing, and be right).

However, with integration, bringing together the print and digital or broadcast and digital newsrooms, resourcing is improving, but those digital organisations are now being brought into larger, sometimes less nimble, organisational structures. It’s a challenge that only a few news organisations have successfully met.

01.12.11
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Prioritisation: How do news organisations decide what they must do?

Since leaving The Guardian last April and striking out on my own, I joke that I’ve become an occupational therapist. I’ve had the chance to speak to journalists, editors and media executives around the world and hear the issues and challenges facing them. Most of them are instantly familiar, but one issue that I first heard about in Norway in 2009 and heard with increasing frequency in 2010 was prioritisation. In digital, there are a myriad of things we could do, but in this era of transition and scarce resources, the real question is what we must do.

In the comments on my last post covering the opportunities for news organisation in location services and technologies, Reg Chua, the Editor-in-Chief of the South China Morning Post, had this insight:

Kevin’s point on prioritization is a critical one. We can’t do everything well; in fact, we can’t do everything, period. I’d argue that we should think about the product we want to come out with first – and then figure out what data is needed to make it work. I realize that leaves some value on the table, but I suspect we all need to specialize more if we’re to really create products that have real value.

For the news organisations that I’m working with now in developing their digital strategies, one of the things that I look at is where they have the most opportunity. I agree with Reg that there are a number of opportunities in terms of creating products using data, and I also think that data is important in determining which products to develop. News organisations need to get serious about looking at what their audiences find valuable, digging into their own metrics. Right now, we’ve got a lot of faith-based decision making in media. It’s critical that we begin to look at the data to help determine what new products we should deliver and how we can improve our existing offering.

For a good start on this kind of thinking, Jonathan Stray wrote an excellent post last year, Designing journalism to be used. He wrote:

Digital news product design has so far mostly been about emulation of previous media. Newspaper web sites and apps look like newspapers. “Multimedia” journalism has mostly been about clicking somewhere to get slideshows and videos. This is a little like the dawn of TV news, when anchors read wire copy on air. Digital media gives us an explosion of product design possibilities, but the envisioned interaction modes have so far stayed mostly the same.

This is not to say that the stories themselves don’t need to change. In fact, I think they do. But the question can’t be “how can we make better stories?” It must be “who are our users, what would we like to help them to do, and how can we build a system that helps them with that?”

Josh Benton of the Nieman Lab says that we have an opportunity to rethink the grammar of journalism during this period of transition in the business. Jonathan and Reg are definitely thinking about rethinking the grammar and rethinking the products that we create. Digital journalism is different, and the real opportunity is in thinking about how its different and how that creates new opportunities both to present journalism and support it financially.

12.29.10
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iPad magazine sales continue dropping

After some initial very positive sales figures for magazines on the iPad, sales continued to drop for US titles as the end of 2010 approaches, according to a post by John Koblin in WWDMedia.

Vanity Fair sold 8,700 digital editions of its November issue, down from its average of about 10,500 for the August, September and October issues. Glamour sold 4,301 digital editions in September, but sales dropped 20 percent in October and then another 20 percent, to 2,775

iPad sales for Wired, which outsold print copies with the iPad edition in its first month, have seriously tailed off. We now have several months of declining sales for the iPad edition. The iPad as ‘print’ saviour now looks less and less likely. Would a better subscription model help? Would less print-centric thinking help? At this point, the sales figures don’t look to justify the premium ad rates some magazines are charging for the iPad.

Dorian Benkoil writing on PBS MediaShift quoted John Loughlin, executive vice president and general manager of Hearst Magazines:

As Loughlin noted, this is an experimental period, when magazines are learning what they can offer and how much they can charge. Some apps will be breakout hits. A combination of web, apps, mobile and print sales may bolster magazines and give them new life and sustained profitability.

But the excitement over apps has some difficult realities to confront until that day is reached.

I’ve said it once, and I’ll say it again. There are no silver bullets, no single solution that will save publishing. It’s going to take strategic thinking that focuses on building compelling print and digital products and building a multi-revenue stream business or businesses to support them.

11.17.10
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TBD: Hunting for a new business model for regional news

TBD.com team speaking at ONA10
From right to left, Steve Buttry, Erik Wemple and Jim Brady of TBD at the recent Online News Association Conference in Washington

One of the areas that I’ve been watching closely has been the effort to rebuild the business model to support local and regional and regional journalism, and this week I wrote a brief profile for the Media Guardian of a new regional website in the US, TBD. I wanted to go into a little more depth about the business model and also answer some questions from Twitter.

While there has been a lot of hand-wringing about a decline in investigative journalism, local and regional journalism has suffered even more during the recession than high-end investigations*. Local and regional has really been hollowed out in the US and the UK. Circulation declines and an over-reliance on advertising revenue has led to massive job losses in local and regional press. According to an OECD report:

The regional and local press are particularly affected and 2009 is the worst year for OECD newspapers, with the largest declines in the United States, the United Kingdom, Greece, Italy, Canada, and Spain

The OECD also found: “Employment losses in the newspaper industry have intensified since 2008 particularly in countries such as the United States, the United Kingdom, the Netherlands and Spain.” Erica Smith, who runs the site Paper Cuts, counted 15,992 job losses in 2008, 14,783 in 2009 and 2761 job cuts in 2010 in the US newspaper industry. 166 newspapers have closed their doors. In the UK, Francois Nel of the University of Central Lancashire did a study of journalism job losses in the UK this past summer. Hedging a bit, Francois “guesstimates” that since 2001, the UK journalism corps has shrunk between a quarter and a third.

In Washington where TBD launched in August,  the iconic Washington Post, the newspaper that broke the Watergate scandal, saw its circulation fall 6.4%, according to the latest figures.

While there has been no shortage of attempts to build a new local news business model, there have been more failures than successes: Backfence, Bayosphere, Sidewalk and others.

TBD, a Washington metro area web and TV news service launched by Robert Allbritton’s Allbritton Communications in August, is the latest to try to create a new model for local news. Industry watchers are keeping a close eye on it. Allbritton has already found success where others saw no opportunity in launching Politico, and now I wonder if he can create a new local news business model.

The editorial strategy

Unlike Politico, TBD is not a pure start-up and a hybrid operation on many levels. It is joined to two established TV stations, a 24-hour local news channel formerly called News Channel 8 but now re-branded TBD TV, and another traditional local TV station, WJLA.

TBD.com has taken to heart Jeff Jarvis’ advice to “Do what you do best and aggregate the rest”. Its editorial strategy is focused on aggregating existing content while searching for new opportunities in covering traditional subjects including entertainment, traffic, weather, sport and local politics. It has a staff of 12 to 13 reporters and bloggers, supplemented by the news staff at the TV stations.

“We tried to focus on things other people weren’t doing,” said Steve Buttry, director of community engagement for the site. For instance, they view local political coverage as essential, Buttry said, but “rather than covering the horse race of the day-to-day campaign, Kevin Robillard, our [politics] reporter is fact-checking.”

Much has been made of hyperlocal strategies with content delivered at a postcode level, but the management of TBD describes it as a regional site with hyperlocal elements. Buttry has 190 bloggers across the area who provide hyperlocal content, and a team of four community hosts that highlight the best posts from the blog network and are also responsible for community outreach.

The commercial strategy

The real challenge for local journalism is to rebuild or create a sustainable business model.

“When people say there’s no money in local, I just don’t buy that,” said Jim Brady, general manager of TBD. He recognises, however, that a new local news business model needs multiple revenue streams. “There are no silver bullets,” he says. “Only shrapnel.”

TBD has one advantage that most start-ups only dream of: an ad sales team of 22 with contacts and contracts with major advertisers in the region. When the story was published on the Guardian, Jonathan Lloyd made this comment on Twitter:

“TBD has one advantage that most startups only dream of: an ad sales team of 22” < woah, that's one hefty payroll though @kevglobal #salesless than a minute ago via webJonathan Lloyd
JonathanLloyd

He has his own hyperlocal start-up, King’s Road, in London. To clarify from the piece in The Guardian, TBD the website doesn’t have to support that sales staff on its own. Will the TV-web sales team succeed in selling digital as well as they succeed in selling broadcast? Time will tell, but it is a competitive advantage over other hyperlocal start-ups who have to start from scratch. 

TBD also has a commercial relationship with about a third of its bloggers, something that Brady sees as a competitive advantage, giving advertisers additional reach.

The site adds location information to all of its content, including network blog posts, so that people can find content related to where they work, live or play. This could open the door to future geo-targeted ads as the site develops.

Buttry is bullish on local, mobile advertising, and based on the expertise they are developing in building mobile applications, TBD might also launch a business to develop mobile apps for its advertisers and others.

Growing pains

As I was writing the feature, TBD had a management shake-up. Less than three months after its launch Roger Allbritton announced that Brady was stepping down as general manager of TBD due to “some stylistic differences”. Editor Erik Wemple is stepping in to take his place.

Reports said that Allbritton wanted someone with more of a focus on original content instead of Brady’s expertise with technology and aggregation.

Staci D Kramer, editor of paidContent, dismissed this characterisation of Brady: “The idea that Jim Brady is too much tech and not enough content doesn’t match anything I’ve known about him over years of coverage.”

Comments from Brady reported by Steve Myers at the Poynter Institute indicate possible friction between the website and the TV stations. When asked if Allbritton could succeed digitally, Brady was quoted as saying: “TBD is digitally forward enough … Time will tell in terms of the rest of the organization.”

TBD is not alone in having friction between digital and legacy operations, whether that is print or broadcast. In fact, I don’t know of a single organisation that hasn’t had some pretty major issues with integration or cooperation. Whether this be a minor bump or the signs of bigger issues down the road, I guess that is TBD.

* Footnote At the risk of sounding like a heretic, I believe some of the focus on investigations in terms of saving journalism is misplaced. Trying to save journalism by focusing on investigations is like trying to save the auto industry by saving Porsche. The point where the analogy falls down is that Porsche is the most profitable car company in the world, and one could argue that investigations have always been subsidised by general interest journalism such as sport and other revenue streams. It’s difficult to make a business built on investigations. Accountability journalism is important, but let’s be honest, investigations have always been an expensive and relatively small part of what we do. I think there has also been a conflation of investigations and the broader category of original content and original reporting.

 

10.29.10
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News business models: ‘No silver bullets, just shrapnel’

I’m at the Online News Association conference in Washington. The first panel was of editors from a new regional news website in Washington,TBD.com. Jim Brady, general manager for TBD.com, had an excellent response to the question of how the site would make money. He said:

There are no silver bullets, just shrapnel.

What he meant by that was that they were pursuing multiple revenue models to build a sustainable business. They have launched with a traditional ad-supported model with a few twists including selling advertising through a network of local blogs. In the future, they are considering a range of products and services including mobile ads and a mobile apps development service.

10.15.10
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News of the World: 1995 is calling, it wants its digital strategy back

Not to beat a dying horse, but the News of the World doesn’t have a digital strategy for 2010. As I said yesterday, sometimes I’m willing to be generous about News International’s paid content strategy. The Times had to do something. They were losing £240,000 a day last year, and by their own admission, those losses were unsustainable. However, when you hear things like this from News of the World’s Digital analogue editor Rachel Richardson:

The majority of our content will be published on a Sunday. We will update our exclusive stories as they develop through the week. We also offer a comprehensive sport service and update match reports etc frequently. A lot of our content is timeless. Fabulous [celebrity magazine] is a great example of this, so we’re confident our site will be appealing mid-week without constant updates.

You have to wonder what planet she is on. Seriously. Now, it would be interesting to unpack what she means by ‘constant updates’, but this seems like a strategy from another age. The type of gossip that News of the World peddles is a constant stream of whispers coursing through the internet. It’s not something that pauses politely for a print driven publishing cycle. Yes, the News of the World thinks it has exclusives, and too many people living in the silos of newspapers believe it’s not old until it’s told by them. In terms of exclusives, with a few notable exceptions (the Telegraph’s MP expenses reporting being one of them), an exclusive in the online era has a shelf-life shorter than a Z-list reality TV star, possibly shorter. I don’t read celebrity gossip, but I actually don’t feel the need to. It’s so utterly ubiquitous that I absorb it through osmosis. There are so many choices. It’s everywhere. Are they really going to be able to charge to catch up on Sunday’s shock headlines by Wednesday? They already will seem tired by 5pm Sunday night.

Reading excerpts from the transcript of an interview with Richardson what comes through is that this isn’t a business strategy, it’s a sense of entitlement. Yes, it costs you something to make the News of the World, and you think that it has a value that should cost a set price. If everyone was able to price their products at what they thought they should be paid for instead of what people are willing to pay for them, we’d have a much different world.

Bravo for having a launch partner, but their other ads are supplied by ad networks?!? If your content is as exclusive as you say it is, surely there has to be value in building up your own premium ad services. Of course, no one will know whether it is successful because we won’t know the traffic. Murdoch has pulled out of the ABCes, leaving others to speculate. News International isn’t even being forthcoming with their advertisers about their numbers, and their advertisers are punishing them. That’s not strategic. It’s arrogant, or fearful.

There are times when I wonder if News International’s digital strategy is actually designed to fail. I often wonder if Murdoch in a fit of pique will actually just shut down the digital offerings once they have failed to meet his targets. It seems outlandish, but no less so than some of the non-strategic nonsense coming out of News International wrapped in PR assertions as being bold visionary thinking.