Category Archives: Journalism

09.27.13
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Journalism transformation: Break down silos and innovate strategically

News organisations are still facing a lot of challenges in 2013. Tribune newspapers is reportedly looking for $100 m in savings, which will probably mean more staff cuts. Gannett recently eliminated 200 jobs at its local newspapers. Reuters has been the focus of a lot of rather unflattering coverage of how it blew through an estimated $20 m on a consumer website revamp that failed to deliver a working website.

I don’t mean to be a “prophet of doom” to borrow a line from Charlie Beckett of the London School of Economics, but times are still tough. However, Charlie looks at some recent research to find out management strategies of news organisations that are successfully navigating this disruptive period and transforming themselves into multi-platform news providers. In a recent piece in inPublishing, Charlie says:

Recent research on the most progressive newsrooms says that the successful ones are those that combine commercial, technological and editorial management most closely. This is not just a case of slavishly following the money by following the clicks. Instead it is more a case of linking editorial tactics to a clear plan for revenue growth.

This reminds me of a conversation I had this week with my former editor at the BBC, Nic Newman. In the past, we had editorial, commercial and technical silos in news organisations, and we need a lot better coordination. There is a lot of discomfort from journalists about breaking down the wall between editorial and commercial, but I believe Charlie has found the right way of putting it. We have to link editorial strategy to revenue growth if we want to have sustainable, independent news organisations, and I think that there are a lot of ways to build the business of journalism to support the mission of journalism. However, as Nic says, we’ve all got to work together, commercial, technical and editorial.

Joy Mayer, the director of community outreach for the Columbia Missourian, the newspaper run by the faculty of the University of Missouri and staffed by journalists there, wrote a great piece on how to create editorial tactics that work. Speaking specifically about social media strategies, she says that to create an effective strategy, you need to ask three questions:

1. Why am I doing this?
2. What do I hope to happen? (Is your answer measurable or trackable?)
3. How will I track what works and use that feedback to craft future strategies?

With print, broadcast and digital strategies, we need to ask why we are doing something, and I think that this is really important in terms of opportunity costs. What is the cost of doing this as opposed to something else? Let’s stay on the topic of social media. This week there was quite a hullabaloo about Popular Science shutting off comments on all but a handful of debate focused articles. PopSci associate editor Dan Nosowitz said in a radio interview: “we think that the current form we have for comments wasn’t doing our readers much of a service”, according to a post on Poynter.

Let’s step back and look at a different way. What is the opportunity cost for PopSci of comments in their current form? What would it cost in terms of staffing to improve the experience? Is that staff time better spent elsewhere? Of course, I skipped to question two on Joy’s list. Going back to her first question: Why do they have comments in the first place? Is there a better way for them to achieve their goal another way? What are the metrics for success of this new strategy? If you answer the why question, you’ll be able to communicate more effectively to staff what they’re trying to achieve, and as an employee, I can remember examples when editors or managers helped me be more effective by giving me clear guidance. Yes, we want to experiment a lot, but we also need focus to be effective.

This is what transformational management looks like: Clear goals that achieve the journalistic mission and help generate revenue to support that mission.

09.24.13
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NPR head of apps: Mobile media doesn’t mean on the move anymore

In the UK, nearly half of the population uses a smartphone – that’s 60 percent of all mobile phone users – according to data from eMarketer. In the US, two-thirds of mobile users access the internet on their phones, according to a recent Pew poll, and mobile has nearly doubled the amount of time spent online. Across large parts of Africa and South Asia, the mobile phone is the only way that many people access the internet, according to research from browser maker Opera.

Research in the US from comScore and Jumptap showed that while mobile has doubled time spent online, in the sport and general news categories, 62 percent of time is still on desktop or laptop computers with 31 percent on tablet and only 7 percent on mobile. Josh Benton at Nieman Lab said:

The high desktop/laptop number makes sense — an awful lot of online news is consumed by deskbound office workers — but the tablet share has to be disappointing to all the news execs who bet the iPad would revive their business models.

This is why some news leaders, such as Digital First Media’s Steve Buttry, have long been arguing for a mobile first strategy. In 2009, Buttry said:

News organizations are belatedly, reluctantly and often awkwardly pursuing “web-first” strategies. As we fight these web battles, I am increasingly coming to believe that “web first” is what the military would call fighting the last war. News organizations need a mobile-first strategy.

The digital world never stops moving, and Steve, who I count as a friend, is right. We need to keep pace with the rapid shift in consumer preference.

IJNet has a great overview of a talk that NPR news app editor Brian Boyer gave about ‘mobile first’ at a recent Hacks/Hackers events in Buenos Aires.

Since the iPhone, people expect the internet to just work on their mobile devices, and Boyer believes that it is his job to make sure that their apps work for their audience. That makes sense, but catering to mobile users isn’t just about user experience, although that it is important.

Mobile first is more than making sure your content fits the smaller screen of a smartphone, but just as importantly, the strategy is more than being mobile, being on the move. As Jessica Weiss pointed out in IJNet:

According to Business Insider, 77 percent of people in the U.S. use mobile phones while lying in bed, 70 percent while watching TV, 65 percent while waiting and 41 percent in the bathroom.

Boyer said that mobile news is about filling the “cracks in the day”, the “in between moments” people have. That might be “before they go to work, while they are commuting or ‘in bed after children are asleep”.

A number of sites are now seeing an evening mini-spike in traffic as people take their tablets to bed. How are we serving those consumers? How many news organisations are developing evening tablet editions for these consumers? Would this be an attractive edition that would add subscribers to a bundled print-digital paid content strategy? How can news organisations use mobile notifications more effectively? There is a lot of opportunity here, and news organisations need to be prepared to move quickly with this rapidly changing market.

09.22.13
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Listen to the dawn of data journalism: Univac, the first Nate Silver

In one of my data journalism presentations I look back at the history of data journalism, and one of the key dates is 4 November 1952: the first US election when a TV network, CBS, used a computer to analyse and predict the election results.

CBS used the room-sized, vacuum-tube powered Univac.  The idea came from Remington Rand, the makers of the Univac, because sales weren’t as strong as they wanted. In a creative bit of marketing, they approached CBS to use the computer to help analyse the election results. Of course, CBS also saw a marketing opportunity and mentioned Univac in their election coverage ads. Last night, in a lovely bit of luck, I heard one of those ads.

I often listen to old radio dramas while I’m making dinner and, much to my surprise, last night when I was listening to the 13 October 1952 episode of the western radio drama Gunsmoke on Old Valve Radio, I heard CBS run an advert touting how “Univac, the electric brain” would be assisting Edward Murrow and his team on election night coverage the following week. My jaw just dropped to hear this message announcing the dawn of computer-assisted reporting, as it was called in the US, 70 years before the term data journalism came into vogue. You can hear the ad yourself on Podbay.fm, and, if old western radio drama isn’t your cup of tea, fast forward to 13:43 to hear about how the CBS election team would be backed up by “Univac, the electric brain”.

For a lot of data journalists, the CBS-Univac partnership is a famous and well known bit of history, but if you aren’t familiar with the rest of the story, it is fascinating. Both Remington Rand, makers of the Univac, and CBS saw value in the arrangement, as Wired explained when they looked back at the day in 2010.

The eight-ton, walk-in computer was the size of a one-car garage and accessed by hinged metal doors. Univacs cost about $1 million apiece, the equivalent of more than $8 million in today’s money. The computer had thousands of vacuum tubes, which processed a then-astounding 10,000 operations per second. (Today’s top supercomputers are measured in petaflops, or quadrillions of operations per second.)

Remington Rand (now Unisys) approached CBS News in the summer of 1952 with the idea of using Univac to project the election returns. News chief Sig Mickelson and anchor Walter Cronkite were skeptical, but thought it might speed up the analysis somewhat and at least be entertaining to use an “electronic brain.”

They had no idea how quickly it would speed up analysis, and early on the evening with only about 5 percent, or 3.3 m of the total 61 m votes, counted Univac had a prediction. The Computer History Museum has the printout of a prediction the Univac team sent to CBS via teletype at 830 pm. “It’s awfully early, but I’ll go out on a limb.”

However, just as traditional political pundits heaped scorn on stats wizard Nate Silver in 2012, CBS’s editors were not willing to join the Univac team out on that limb. On air, CBS hedged:

In another story about the election by Ars Technica, we learn that the Univac team figured out that they had entered the New York results incorrectly, overstating Stevenson’s votes by a factor or 10. They ran the numbers again, but they got the same result. Univac predicted that Republican Dwight Eisenhower would win the Electoral College 438 to Stevenson’s 93 votes, and the computer set the odds of an Eisenhower win at 100-1.

As the night went on, Eisenhower gained momentum. The final vote was 442 to 89 to Eisenhower, and Univac’s early prediction was off by only one percent.

While I’ve known about this story for a while, it was great to hear the advert of CBS advertising how it was going to use an “electric brain”. I also learned something new about Univac. It was programmed by computer pioneer Grace Hopper. Her team fed the computer with statistics from previous elections, and she actually wrote the code that allowed Univac to make its prediction. Sadly, her contribution was not mentioned in reports at the time.

09.20.13
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NewsRewired 2013: Three things driving QZ.com’s journalism

Quartz, the newest member of The Atlantic Media network, launched in 2012, but by July, it already had 5 m users and said that it had already passed The Economist’s web traffic in the US and would soon pass the Financial Times, and Jay Lauf, the publisher of the site, kicked off Journalism.co.uk’s News Rewired 2013 talking about the strategy behind the site’s success.

Lauf started by saying that digital media need to ask: Where does your audience come from? Do they come to you directly, via search or social?

• Direct: 10 to 15 percent of traffic – While it is nice to think that people come straight to your homepage, he compared that to the fanciful idea that his young daughter comes to him every night as he eats dinner and asks for his advice, any nuggets of wisdom he might impart. It’s a nice idea, but as every parent knows, this isn’t reality. Similarly, journalists believe that their audience online are coming to them directly to learn the news of the day. Even on big sites like CNN and the New York Times, direct traffic is only 10 to 15 percent of traffic. That leaves 85 percent of your traffic off the table, Lauf said.

• Search: 25 percent and stalled – A couple of years ago, the focus on was on SEO. It was the search game, a game of trying to “trick the robots, writing for machines not audiences”. He said that some journalists were encouraged to misspell the names of celebrities so that these sites could capture the 50 percent of traffic from people who commonly misspelt those celebs’ names. “That leads to a lot of questions. What does this mean for the quality and intellectual honesty of journalism?” Lauf asked, adding that it was a “waning game”

From a business standpoint, he said that search traffic referrals have “flat-lined” at about 25 percent, so a focus on SEO still leaves a lot of traffic.

• Social – sharing and ‘dark social’ – However, the rest is coming via sharing, either through social and sharing networks – Twitter, Facebook, Google+, Pininterest – or through ‘dark social’, simply sending links via IM or email.*

He said that we could all debate the value of the audience from these sources, but Lauf said that if a news site wasn’t winning with SYBAWs – smart, young and bored at work readers – they were dead. He said that media consumption had moved from pull (with the image of US newspaper sales box) to push (social media and mobile notifications).

Lauf summed up the new news consumer with the quote:

If the news is that important it will find me.

For Quartz, the question is how they get into these streams, these social streams that will SYBAWs are using to monitor news. They focus on three things:

• Be visual “Embrace the fact that the web is a visual medium. Liberate content from the conventional constructions of the print world.”
• What’s the thing? – Lauf said, that every story has a nugget, a data point, a new angle that gets to heart of something new and interesting. We love to share nuggets. “That doesn’t mean that story can’t widen, but think of headline first. Think of headline as a tweet. Will people share this? Will it travel?”
• Radically simple, responsive design – They have created a radically simple site that looks clean on the desktop, the tablet and mobile. They don’t need separate tablet or mobile apps because the site looks good on all platforms, and it uses an infinite scroll. They didn’t clutter the site with a dizzying choice of 50 links when “people came to read only one story”, Lauf said.

They have also carried this radical simplicity to their ad strategy. Lauf said:

We rethought the way that we designed advertising. We wanted to avoid a Piccadilly Circus of drop-downs, pushovers and distractions.

The ads appear in Quartz’s news stream, much like ads now appear in the Facebook mobile news feed. They are labeled as sponsored content, and they are shaded subtly differently in the navigation.

They have 50 full-time staff, split almost evenly between business and administrative staff and editorial staff. Developers sit side-by-side with editors and journalists, he said.

In July, just ten months after launch, Quartz announced that it had 5 m users, and they claimed that they had already passed The Economist in terms of traffic in the US and was setting its sights on overtaking the Financial Times in the US. (A claim that the The Economist disputed saying that ComScore consistently under-reported their US traffic.) Quartz predicted just yesterday that it would be profitable by 2015.

Quartz might be based in the US, but it is obvious that it has global ambitions if for no other reason editor Kevin Delaney requires his journalists to speak fluently at least two languages. Of the site’s 50 or so full-time journalists and contributors, they speak 119 languages.

As the publisher, Lauf might be on the business side, but he ended on an inspirational vision for journalism. He said:

I started out as a journalist, a wide-eyed idealist, and I’m still a wide-eyed idealist. I still believe deeply what we’re doing on the business side is essential and important work. Intellectually, honest journalism is the underpinning for a democratic society. If we can figure out how to make this commercially valuable for hundreds of years to come, we all win.

Amen. With some of the long-standing tensions between the business and editorial sides of news organisations especially during this time of cuts and chaos in the industry, it is essential to hear business side leaders making the strong case that smart commercial thinking supports the mission of journalism. Business leaders in journalism are not all ‘bean counters’ obsessed with the short term. If we can solve the commercial problems and develop new revenue streams and rejuvenated business models, journalism, journalists, audiences and democracies all win.

* If you’re unfamiliar with the term dark social, Journalism.co.uk did a recent podcast on that. It’s called dark social because it is listed simply as ‘direct’ traffic from analytics services. This could be traffic from people directly typing in the URL, people sharing the link via IM or email or people using secure search.

09.05.13
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Journalism innovation: Asteroids and adaptation

This is a follow up to my piece or The Media Briefing looking at why integration might have been the wrong response to digital disruption. Like that piece, this originally appeared on The Media Briefing. 

After I challenged a lot of the conventional wisdomabout print-digital integration, Neil Thackraycompared digital disruption to “a sci-fi B-movie where Earth is threatened with destruction by an incoming asteroid”. I love the analogy.

He broke down the response of media managers to digital disruption like this:

  • Asteroid deniers, who don’t believe that digital is a threat.
  • Radio astronomers, who spot the asteroid at a distance and know the world is doomed but see the threat as so distant that they take no action.
  • Naked eye astronomers, who have only just spotted the asteroid and are making frantic but futile changes.
  • Rational scientists, who spot the asteroid early and invest in a rocket ship to carry them away to safety.

As Neil points out, being able to spot the asteroid doesn’t mean we’ll be able to save the planet. One of the major lessons of Clay Christensen’s Innovator’s Dilemma is that even once a disrupted industry sees the asteroid as a threat, they still too often fail to adapt successfully.

Kodak developed the first digital camera in 1975, but it couldn’t capitalise on that early innovation. It created an iconic, successful business based on its dominance in the film, chemical and paper business.  But as cheap digital products got better, Kodak was killed by its cash cow.

It has been much the same for print media. In a 2011 report, Christensen, working with Canadian journalist David Skok and Harvard Business review writer James Allworth explained how magazines and newspapers’ dominance in print became a weakness:

For many years, the systems and processes used to gather, distribute and sell the news worked well. And in most respects they still do. It is a marvellous sight to witness a newspaper brought to life or a newscast on air, 24 hours a day, seven days a week. Those systems were designed precisely for that process. But what was once an advantage has become an albatross.

The result is that much of print media finds itself stuck. Christensen, Skok and Allworth put the situation for news organisations like this:

Four years after the 2008 financial crisis, traditional news organizations continue to see their newsrooms shrink or close. Those that survive remain mired in the innovator’s dilemma: A false choice between today’s revenues and tomorrow’s digital promise.

At this point, if you’re a regional newspaper publisher in the UK or a print consumer magazine group, you know that your traditional audiences are declining, but you also know that your current digital revenue won’t pay the cost of supporting your traditional business. Yes, print media groups are all trying to grow their digital revenue as quickly as possible, but the big question still remains for most groups in this very different market: How to adapt?

The economist and writer Tim Harford has an entire book on the subject,Adapt: Why success always starts with failure. In the book, he lays out a three-part “recipe for successfully adapting”:

  • Try new things, in the expectation that some will fail.
  • To make failure survivable, because it will be common.
  • And to make sure that you know when you’ve failed”.

When I was digital research editor at The Guardian in 2009 and early 2010, my goal was to bring down the cost of experimentation down as close to zero as possible and try different things using low or no-cost third party services. It’s a rather simple strategy to increase experimentation.

These days if you want to try something editorially, there’s an app, a web service or a plucky start-up for that. To know whether I was successful or whether I had failed, I had a set of goals that ranged from higher user engagement, mining our own stories for data or a more efficient editorial process. In an ideal world, I would have worked with commercial teams to add revenue goals for some of the projects. Goals are important because if you don’t know where you’re going, you’ll never get there.

It is a model that increases experimentation, and for those projects that are successful, they can be deployed across the organisation.

Experimentation, especially editorial, is easier than ever, but organisational change is still really hard. In the next piece, I’ll look at how to scale innovation and create organisational change.

09.02.13
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My journalism job search: Patience grass hopper

The job search is starting to get interesting, and I am moving from conversations about opportunities to interviews. For that, I am very grateful especially to my friends in journalism who have provided me with the vast majority of solid job leads. I was speaking to a friend in the industry on Friday on sorting through the opportunities I currently, and he remarked, “You certainly do have a lazy Susan of options.” I’ve got options in journalism and in digital media both close to news and not so close to news.

First a few observations of the job market:

• There are jobs in journalism, especially digital jobs. Look at any journalism job listing site, and the number of online jobs dwarfs the number of traditional media jobs out there. (One piece of advice though is to look beyond the job listing sites to the listings for companies you are interested in working for.) The fact that there has been a steady stream of jobs to apply for has been a relief, but I will also say that there are not nearly as many for a mid-career journalist like myself as an entry-level journalist. And when I say digital jobs, I’m not just talking about web development or UX design (there are buckets of those jobs) but digital editorial jobs.
• Competition is fierce. I’m hearing that recruiters and HR departments are getting flooded with applications. Getting a human being to actually review your CV or resume is the first battle.
• LinkedIn has been very useful. I have now had two recruiters contact me with interesting positions via LinkedIn. Some employers now allow you to add your LinkedIn profile. If you aren’t on it, it might not be worth the effort with all of the other demands on your time during your job search, but polishing my LinkedIn profile has been a useful exercise for me.
• Contacts matter more than applications. At the moment, I’m getting most solid leads through contacts rather than applications. My gut tells me it is down to the level of competition out there. For those struggling with their job search, I’d recommend going to every networking event you can. Make contacts with people at the places where you would like to work, and I would also recommend that you keep your presence high on social media.
• Be patient. This is hard to hear, but, everyone I have talked to has said that the hiring process has slowed down. Employers are just taking longer to make decisions to fill positions. However, there are jobs out there, and everyone I’ve talked to has been bullish about my prospects while also preparing me to wait. I’m financially in a position to wait for the best position that I can find.

While Suw and I are financially prepared for this job search, I am starting to do some short-term digital media consulting and digital journalism training. If you’ve got a digital media or digital journalism project that needs to be done urgently, do drop me a line.

08.23.13
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Newspapers versus Netflix: Adventures in the attention economy

Newspaper circulation continues to decline at almost all of the national newspapers in the UK (with the notable exception of the ‘i’), with sales down 1.4 m over the past year, according to ABC. Pat Smith at The Media Briefing highlighted this and also drew attention that over the same year, Netflix added 1.5 subscriptions. Pat made this observation (emphasis his):

A coincidence? Maybe. On-demand TV and films are hardly substitutional for newspapers. But what this shows is there is a vast audience out there willing to pay for digital content. As desire for print media falls, enthusiasm for paid-for digital services grows.

It doesn’t matter to me whether people decided to drop their newspaper subscription and use that money to buy a Netflix sub instead. This isn’t about whether TV and films are a substitute for newspapers and journalism, but rather the staggering rise in choices for how people spend their time and where they spend their attention. In the digital era, content and entertainment choices are exploding, but the one finite resource is people’s time. My friend Mohamed Nanabhay, the former head of Al Jazeera English, put it this way:

My colleagues who work on the broadcast side of the business can easily say our competitors are CNNi and the BBC. But I don’t get that luxury, because we’re competing with everybody who puts up a webpage on the internet. And everybody who tweets, or posts on Facebook, or anything.

That might sound hyperbolic, but it isn’t at all. American journalist and digital pioneer Steve Yelvington broke down online attention when the news group he works for announced their “audience first” strategy a little more than a year ago. Look at the graph he created, and see the big slices of the pie that are Facebook and Google. Hell, Yahoo Mail even beats the local newspaper in the market he analysed.

I will take this one step further, which is why I think that Pat is right to compare sales decline in print with subscriber growth for Netflix; in the attention economy, journalism competes against everything that competes for people’s time and attention. What this means is that we’re moving from mass media to relevant media. Netflix created a model that killed the local video store by mailing DVDs without a hard return date and then pivoting to take advantage of digital delivery.

How does journalism compete against Netflix, XBox, Apple TV and YouTube? Mahendra Palsule said in looking at this shift that we should move from “information overload” to “filtered, relevant information”.

If you want this shift put more in a journalistic context, journalists need to add value. Journalists need to move away from thinking that it’s not old unless it’s told by me, to thinking about whether the story is relevant to their audiences and how they add value. In a world swimming in information, the who/what/where/when has become commoditised, Jim Moroney, the publisher and CEO of the Dallas Morning News, says. Now he adds that journalists need to provide PICA – Perspective, Interpretation, Context, Analysis. At the International Symposium of Online Journalism in Austin this spring, he said that the more relevant your content is the higher the value. Relevant, differentiated content is more valuable and more valued by audiences, he says, and people might just be willing to pay this content. (Special thanks to @cindyroyal for collecting Moroney’s comments on Storify).

It’s the editorial side of reach versus each, which Alan Mutter highlighted in terms of advertising earlier this year. Smart content sprinkled with a little technology can help deliver more valuable, more relevant content to audiences struggling to sift through all of the choices for news, information, entertainment and distraction.

I also believe that active social media strategies where journalists and editors engage their audiences help build loyalty. Relationship and relevance are key to rebuilding journalism’s relationship with the public. Competition is fierce in the attention economy, but I believe that journalism can compete and win.

Below is my full talk about how journalism can succeed in the battle for attention. I delivered this talk at Digital Directions in Sydney Australia in 2011.

08.21.13
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Clark Gilbert’s five business model ideas that are changing the news industry

After writing about how print-digital integration was absolutely the wrong response to digital disruption, I’ve been going back to more of the ideas of Clay Christensen and Clark Gilbert on how the news industry should respond to disruption. I would strongly encourage you to take an hour and a half of your time and watch Clark Gilbert speak at Harvard University’s Nieman Foundation. I had read his ideas, but he’s even more forceful and compelling in person (or via video).

http://vimeo.com/65150395

Clark Gilbert, Deseret News – April 25, 2013 from Nieman Foundation on Vimeo.

He quotes the president of an online newspaper division:

Overall, the newspaper industry’s involvement in the internet has been one where it had a lot to lose and it’s been trying not to lose it, as opposed to starting from scratch and having a lot to win.

Gilbert has created a disruptive division that is all about winning digital opportunities. About 47 minutes in, he lays out five business model ideas that are changing the news industry and are helping his digital division grow at 40 percent year-over-year.

  1. Digital revenue should a third of your business in 2012 and half of your business by 2015
  2. A digital buyer needs a digital seller
  3. New channels are the difference between Transformation A and Transformation B
  4. Digital marketplaces (Not Digital Publishing) will win
  5. Dual transformation requires new organisation

And he says that number 2 is non-negotiable, and watch the video at 51 minutes to see why Gilbert is even more adamant about that now. Your jaw will drop. Seriously, this is worth your time.

They have four digital advertising channels:

  1. Companies that want a legacy-digital bundle
  2. Large local digital only
  3. Small local digital only
  4. National advertisers that do a significant amount of targeting and re-targeting.

He said that he recently noticed that the legacy-digital bundle sales had plateaued, but one of his other channels (he didn’t say which one) is growing by 70 percent year-over-year, which is just one reason why they have 40 percent year-over-year digital revenue growth.

Number four will interest everyone who is in local media. He says that digital marketplaces are winning local.

Gilbert makes an even more forceful case than he did in Austin where I saw him in April that integration, especially on the business side, was absolutely the wrong idea. When the Washington Post integrated its print and digital, digital revenue growth stopped. When the Dallas Morning news integrated print and digital, digital revenue growth stopped, Gilbert said.

Contrast that with Gilbert’s company. In 2009, legacy revenue accounted for 90 percent of the business and digital came only from 10 percent. In 2012, he said that legacy revenue channels would account for only 33 percent of overall revenue. Digital revenue is now bigger than revenue at their TV station and their radio station, and it will soon pass print.

I’ll just finish with this comment from Gilbert:

News is not a business model. It’s a public good.

However, you can build a business around the brand that you create with this public good.

Fellow journalists, you should be fighting for this kind of thinking because Gilbert plows back a third of all the profit from the digital division to fund the newsroom.

08.19.13
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New Bloomberg Media CEO, Justin Smith, rouses the troops

Justin Smith has a great track record of repositioning great media brands for the digital era. His most recent media makeover, The Atlantic is only his latest success story. Jeff John Roberts at paidContent had a great interview and profile of Smith looking at some the secrets behind his success. Smith is a digital evangelist and more. Two-thirds of Atlantic Media’s advertising revenue is digital, and while other media companies have suffered over the last three years, Smith’s Atlantic has been in the black since 2010. 

if there is one thing I’ve learned over the last few years, building a solid media company isn’t just about growing digital as quickly as possible but building successful products regardless of the platform. Roberts puts it this way:

And this is what Smith understands so well about building a media company today: the challenge is not print vs digital or about paywalls, but about using brand power to grab revenue wherever you can. 

As Smith moves on to his next challenge, Bloomberg Media, Digiday has excerpts from an email to his new troops. Smith has always invested in talent, and that was key to his strategy at The Atlantic. As a matter of fact, if there was one thing that ties together a lot of disparate strategies, whether it is Smith’s Atlantic or the revitalised Orange Country Register, it is about about making smart investments to deliver a great product. 

I’ll highlight just a couple of other comments that Smith makes. He has called on the staff at Bloomberg to embrace change and entrepreneurship. In terms of change:

The media industry is bifurcated into two distinct worlds: the struggling traditional segment that longs for a simpler, more profitable past that will never return; and the vibrant, entrepreneurial segment that is reinventing the industry before our eyes. The simple act of choosing to live on the new, wide-open frontier is a powerful step toward success.

And his definition of entrepreneurship is about adaptation and speed:

One definition of entrepreneurship is the ability to evolve your product, business model, technology, or talent base to capture a changing market opportunity. Moving quickly is paramount: the faster you move, the more you learn, and the sooner you can optimize for success. 

Bloomberg was already a strong brand and a source of revenue that most media companies would kill for, the $24,000 annual subscription for its financial terminals. It will be fascinating to see how Smith supercharges Bloomberg. 

08.12.13
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Print-digital integration ‘sucked the life blood’ out of journalism’s future

This post originally appeared on The Media Briefing.

On both sides of the Atlantic, the newspaper business is experiencing its own episode of back to the future, reverting to a past when billionaire sugar daddies buy and prop up ailing titles.

The motivations sit on a continuum from a public service minded sense of noblesse oblige all the way to treating media as something akin to a US super-carrier, as the ultimate tool to project power. The new class of owners include former KGB agents, hotel developers, hedgies and, of course, this week, Jeff ‘Vishnu’ Bezos, the creator and destroyer of retail business models.  

Historians will simply say, twas ever thus, and point to the fact that we’re merely returning to an older model of ownership. But could newspapers have responded to the digital tsunami in any other way than they did?  

The newspaper industry had a clarion call on how to respond to disruption, but like most disrupted industries, the industry has failed to adopt these strategies.

Newspapers are only the latest in a long line of industries that have been rocked by technological change. Clayton Christensen has studied hundreds of companies across a number of industries that have faced disruptive innovations, and in 1997, he wrote the Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail.

Clark Gilbert is former professor of entrepreneurial management at Harvard Business School and began working with Christensen to apply the Innovator’s Dilemma to newspapers more than a decade ago in 2002. Unlike other industries, which simply did not see the disruption coming, newspapers recognised the threat posed by the internet, but Gilbert said, “Unfortunately, threat-induced response also leads to very rigid behavior.”

He added:

We found that despite recognizing the problem, most companies aggressively “crammed” the new business into the old business model and sales processes. For example, most newspapers tried to force their online sites to make money by selling the same types of advertising to their traditional print advertisers. The early online advertisers were different and the type of advertising they sought was much more focused around the interactive and direct targeting attributes of the new media.

Threat had motivated action, but it was resulting in an aggressive replication of the newspaper business. Newspapers had spent a ton of money, with little to show for it. In an effort to defend their core market from attack, newspaper companies were missing the new emerging market altogether.

More than a decade ago, Gilbert also had statistical evidence that should have been a warning to newspaper executives that digital-legacy integration was not the answer to their problems. In fact, it was exactly the wrong thing to do. He said:

In our large sample study, sites that separate their online organizations from the newspaper were more than twice as innovative than sites that remained integrated into the newspaper. More importantly, these sites gained 60 percent higher market penetration!

Fast forward to 2013. Three years ago, Gilbert left Harvard Business School to become the CEO of Deseret News. While on average US newspapers earn 17 percent of their revenue from digital, The Deseret News and Deseret Digital media earns 45 percent of their revenue from digital, according to the American Press Institute (API).

In April, I heard Gilbert speak at the International Symposium of Online Journalism in Austin about how he has applied the insights from the Innovator’s Dilemma to the Deseret News in Utah, and he laid out why integration was absolutely the wrong approach to disruption.

“In industries that are being disrupted, 9 percent of companies make it,” he said. Of the 9 percent that made it, 100 percent had set up a separate disruptive business unit.

Separate means:

  • A separate physical location.

  • Separate profit & loss.

  • Separate direct sales.

  • Separate content product and technology teams.

  • Separate management structure.

However, it is important to understand that while Gilbert says integration is a mistake, potentially a fatal one for your company, he is not simply advocating a digital first strategy. Key to his strategy is a dual transformation, creating a new disruptive digital company while also transforming the traditional print product.

In his transformation of the legacy print and broadcast business, he said that it is important to understand that in the age of digital media, generalists are not as  valuable as specialists. Local media should excel in this age, but instead they have suffered.

To help the newspaper find its USP, Gilbert used detailed market research to identify six core coverage areas. Yes, they slimmed down the legacy product, but they ploughed savings back into covering these six core areas that allowed them to create a differentiated product.

For the disruptive digital business, they are creating a company that looks beyond the twin revenue streams of advertising and paid content that dominate the income mix of most media companies.

“Its divisions include, but are not limited to, e-commerce, marketplace services, digital consulting and other emerging revenue streams in which tablets, mobile and social are integral parts,” the American Press Institute reported.  

Instead of one struggling company, Gilbert is trying to create two dynamic companies. They do meet, but he keeps the interaction at a minimum. Otherwise, the legacy business often “suck(s) the life out of” the digital disruptive business, he told the American Press Institute, adding, “You don’t get excellent from either if they’re integrated.”

Of course, the US isn’t alone in examples where splitting the legacy and digital business delivered better results. In fact, one of the pioneers is Scandinavia’s Schibsted. In 1999, it decided to split its digital divisions from its newspapers, and it has gone to build one of the most successful media companies in the world by building one of the most successful digital classified businesses in the world. With operations in 28 countries, US analyst Ken Doctor reported in February of last year that Schibsted earns 36 percent of its revenue from digital.

Looking at the recent newspaper buyouts by billionaires, the real question should be whether they will do the same thing as their previous owners, sinking millions into a disrupted business or whether they will heed Gilbert’s research and create a separate disruptive digital unit. Maybe that’s where Bezos will breath new life into the Post with a resurrected Post Digital.