Category Archives: Journalism

06.19.17
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The dis-economies of scale for small town newspapers (and the rise of local indie players)

This post originally appeared on The Media Briefing. It was announced on 16 June, 2017, that The Media Briefing would be shutting down after the purchase of its parent’s company media events business, which did not include the content side of the business.  I wish the excellent staff there the best. If you’re in the UK looking for some great journalists, editors and analysts, let me know. 

In the last 15 years, more than half of the jobs at newspapers have disappeared, down from 412,000 to 174,000, according to the Bureau of Labor Statistics. While I don’t want to reflexively equate newspapers with local journalism, there is no way to ignore such a tremendous loss in local media capacity, especially in small towns and cities.

Three years ago, the Sheboygan Press, where I was Executive Editor,had three full-time reporters, two sports reporters, a photographer, a local news editor, a night editor and a digital editor to cover a city of 50,000. We shared an opinion editor, a features editor and a sports editor with one other site, and they were player-managers who helped provide local reporting and content. Now locally, there is only a news editor, two reporters and a photographer. That’s it. That’s the decline in only three years. Yes, there are shared resources across an 11-newspaper group, but it is rare for those staff to provide truly local coverage.

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Major metros, second- and even some third-tier cities often have three or four TV stations to provide local coverage, but thousands of smaller communities and millions of Americans have lost local news coverage, sometimes entirely. The Columbia Journalism Review focused on these local journalism losses this month and said cuts and newspaper closures are creating “news deserts”.

This crisis is just starting to get the attention that it deserves, but a lot of the conversation is still focused on major metros or cities with more than 100,000 people. Yet in thousands of smaller communities, the crisis looks very different, and the strategies and the business models needed to save these local news sources are very different. The industry is consolidating, but large newspaper groups are treating all markets as if they are the same. Instead of saving papers like the ones I used to manage, the chains’ strategies are creating dis-economies of scale that threaten to wipe out small community newspapers.

Strategies that don’t scale down

In its coverage of the local journalism crisis, CJR called Gannett the “last great local hope”. I disagree. Large groups like Gannett are now running regional strategies that don’t deliver dramatic cost savings at smaller sites and damage their ability to deliver truly local content. Indeed, strategies designed for the metros caught us coming and going: the cost efficiencies didn’t really amount to much for us, while the ad strategies often priced us out of the local market. So any savings were quickly offset by declines in revenue because we had fewer sales staff selling less ad space, and new digital strategies didn’t scale down to our communities.

For example, Gannett, like many other publishers, has centralised newspaper design in a handful of centres. Gatehouse has taken the model to the an extreme with a single centralised design centre for all of its 125 daily newspapers and hundreds of “community newspapers”.Gatehouse newspapers big front page illustration

 

While I appreciate the need to make the print production process as efficient as possible, this kind of streamlining has to be done only when it makes sense, especially economic sense.

 

Our contribution to the design studio budget would have hired two designers locally so not only were our cost savings minimal to non-existent, a lack of local market knowledge sometimes led to poor design decisions. For example, the designer usually used huge front page illustrations, like this one from a Gatehouse newspaper but our readers interpreted to mean that we didn’t have content to fill the page. It sent entirely the wrong message.

Ad strategies that didn’t work for smaller sites

Gannett’s centralised digital marketing services didn’t work for smaller sites either. The floor to engage the service was a $5000 monthly spend and, in smaller markets like mine, that was the annual spend for a lot of our advertisers. Fortunately, I worked with amazing local commercial staff and managers, and we came up with our own digital ad solutions.

Research by the Center for Cooperative Media at Montclair State University in New Jersey found a decline in ad blocks of 34 to 40 percent across the four newspapers they reviewed in that state after they were acquired by Gannett. The researchers said:

“This could indicate a variety of things; there could be fewer resources committed to garnering ads from local businesses, local businesses may have decided to pull their advertising for some reason, or it could be some kind of strategic decision on the company’s part.”

Needless to say, fewer ads means less revenue. Less revenue has meant a download spiral that Gannett is struggling to check.

‘Wistful self-delusion’

Gannett says that it is a “local-to-national network”. While that acknowledges the nationalisation of vast parts of the US ad network, it actually doesn’t make either economic sense or often journalistic sense for small-town news services unless they are little more than one reporter bureaux that feed a regional product. With two reporters left in the sites that I used to manage, in reality they aren’t far from this. Once they are reduced to bureaux, Gannett’s 50 or so small sites will have ceased to be local in a way that my communities define it.

The upside is that Gannett now has retreated from these small towns to such an extent that local competitors are rising to take their place. Sadly for the staff still at those sites, this is putting additional pressure on small Gannett properties.

There is no silver bullet solution to the crisis in local journalism, but as for hope, I don’t look to the large chains in the US. Their consolidation and cost-cutting strategies have run their course.

Rather, I look to local journalism entrepreneurs to create a range of truly local experiments that explore new ways to serve their communities and new ways to generate revenue. I think for local journalism, the days of mass print are over. We are returning to a much more distributed model as we enter the local digital era.

04.04.17
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WAN-IFRA Webinar: Here come the chatbots and more strategic insights

Last Thursday, I hosted a webinar focusing on the chatbots and conversational interfaces section of the report that I did for the Reuters Institute for the Study of Journalism at Oxford, Beyond the Article: Frontiers of Editorial and Commercial Innovation.

In the webinar, I gave an overview of the strategic motivations that publishers – including Rappler of the Philippines, Nyt, the youth section of Helsingin Sanomat of Finland, and Quartz of the US – had for launching chatbots and developing conversational apps. I also looked at how they developed these projects and what business models they were using to support their journalism.

I’ll just review their strategic motivations briefly here:

    • Rappler launched a Facebook chatbot for three reasons: One, audiences had shifted rapidly from Twitter to Facebook over the last year in the Philippines. Two, they wanted to use the chatbot to both increase discovery of their content for Facebook audiences, and three, they also wanted to better communicate their editorial features – straight news, analysis and comment – to readers.
    • Helsingin Sanomat’s youth-focused Nyt noticed in 2014 that Facebook was no longer helping them reach teens and, based on research that showed that 80 percent of their target audience used WhatsApp, they launched an experiment on the messaging platform. The experiment was successful but unsustainable, so they developed their own conversational app.
    • When Quartz launched four years ago, the mobile-focused news service did not launch with an app because they found that app usage fell off quickly. However, with the rising importance of notifications, they wanted to get onto the lockscreen of their users. Inspired by Lark, a conversational fitness coaching app, they launched a conversational news app.

Is WhatsApp going to develop tools for news companies?

One of the questions that came up during the webinar is whether WhatsApp was developing editorial tools to make its service manageable for news groups using the service to broadcast updates to users. I had heard rumours, but nothing firm. After the webinar, I did a quick search, and I found a Reuters report in early March that said that WhatsApp was trialling tools for businesses, and had launched a pilot with Y Combinator. Neither WhatsApp nor Y Combinator confirmed the trial, but one of Y Combinator’s companies provided details.

However, this trial was couched in terms of WhatsApp going in search of a business model, rather than helping news organisations. (I was in Asia in March, and Chinese messaging platform WeChat does have editorial tools. It’s really worth looking at what the Chinese messaging and weibo, Twitter-esque platforms, are doing. They have developed a far richer experience than Twitter or WhatsApp.) In the end, WhatsApp’s trial seems much more focused on helping businesses connect with their customers, rather than serving the needs of editorial organisations. Moreover, as a paid service, it doesn’t really address one of Nyt’s primary issues with WhatsApp: they couldn’t drive users from WhatsApp to their site, felt unsure about advertising on the platform, and so couldn’t really monetise that attention.

Moreover, Facebook, WhatsApp’s owner, seems much more focused on Messenger as a platform for editorial organisations. I do wonder how long Facebook will see value in having two messaging platforms.

Strategic insights beyond the report

Apart from the webinar, my good friend Damian Radcliffe summarised not only some questions he asked me about the report but also comments that I made to The Media Briefing in a podcast last month.

I’ll highlight some of the top level observations from Damian. What really struck me in the research for the report is that media companies are starting to embrace product thinking. Bar one of the examples, every case study in the report highlighted a strategic challenge or opportunity as the basis for these projects.

I want to emphasise a point that Damian highlighted from my conversation with Chris Sutcliffe and Esther Kezia of The Media Briefing for the podcast: Innovation requires rationalisation. The most successful media groups I work with are working hard to figure out what they do and, just as importantly, what they stop doing. Focus is critical to successful execution. I told Chris and Esther:

Often the resources of an organisation are fully committed, and this is especially true for news organisations going through cuts. To free up resources for innovation, those groups must figure out what they stop doing.

Quartz exemplifies this. Last year, they decided to quit producing a high-end tech conference, not because it wasn’t successful but because it wasn’t successful enough. They are a start-up operating as part of a legacy media company, Atlantic Media, and as a start-up, they are focused on their highest growth areas. This is a critical lesson for media companies. They have to focus on areas where they can find growth, and they need to be fully focused on those areas.

If you haven’t read it already, you can download the report from the Reuters Institute. And if you have any questions including enquiries about speaking opportunities or consulting engagements, feel free to get in touch in the comments below, or via Twitter, LinkedIn or email.

03.23.17
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Join me for a webinar about my recent Reuters Institute report on news innovation

Since I first said it at Hacks/Hackers London last summer, I’ve become fond of saying, “If you don’t have revenue, then you don’t have a product.”

When Dr. Rasmus Kleis Nielsen, the research director at the Reuters Institute for the Study of Journalism at Oxford, started to talking to me about writing a report about journalism innovation, I mentioned my comment about revenue and products, and he asked, “Can we put that on the front page?”

Rasmus wanted to look at digitally native innovation at news organisations, and we used projects that went “Beyond the Article” as a lens to focus the project. Rasmus and I also wanted to focus not just on the coolness of innovation but also the business: How were companies managing it, and more importantly how were they monetising it.

We eventually settled on three areas to focus on:

  • Radically distributed publishing.
  • Chatbots and conversational interfaces.
  • Visual journalism and VR.

The report was supposed to be 5,000 words, and it topped out at about 11,400. To be honest, I could have written a book. There is a lot of innovation going on right now in journalism. But I think we’ve given a good sample of projects and innovation.

If you want to read a brief introduction focusing on the chabots and conversational interfaces and apps section, here is post I wrote for WAN-IFRA. For a broader overview, here is a summary that I wrote for the Nieman Lab at Harvard. If listening is more your style, I also did a podcast on the report with Chris and Esther at the Media Briefing.

Next week, 30 March at 3-4 p.m. CEST, 2-3 p.m. BST or 9-10 a.m. EDT, I’ll be doing a webinar for WAN-IFRA focusing on the chatbots and conversational interfaces section. Register here to join. I’ll do a presentation, but we’ll have plenty of time for you to ask questions. See you there!

01.24.17
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Direct to consumer reason for collapse in national print ads in US and UK

Newspapers came under renewed pressure in 2016 as print advertising dropped by double digits, often in a quarter. Gannett saw a drop in national print advertising by 35.1 percent in the third quarter of 2016, but still managed overall to eke out only a 14.8 percent drop in overall print advertising. Ouch. I worked at Gannett, and I was lucky to have great commercial managers. Why did this happen? The trends in the US and the UK are the same, and Roy Greenslade of The Guardian has just published an excerpt from a former MD of the Mail newspapers about why this collapse is happening.

Turning to display, the category which traditionally held up well was retail, which is still the largest category. The reason was simple. It worked to the extent it was measureable.

But this model is under pressure because of the growth of databases which enable advertisers to target audiences and email their offers directly to them.

Zitter looks at the market from the national level in the UK and says that to win back advertisers, they need to maintain a direct relationship with them to the largest extent possible and not simply rely on programmatic exchanges. That makes sense, but with the sharp decline in revenue, newspaper groups are not just losing editorial headcount but sales staff as well. Rough seas ahead.

11.03.16
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Unsolicited advice to Gannett, from a shareholder

Shark

Shark by Brian Shamblen from Flickr

Before offering this advice, I should disclose that I am a Gannett shareholder as a result of being a former Gannett employee. My position with Gannett as an executive editor over a few of its small papers in Wisconsin was eliminated a little more than a year ago in a round of budget cuts. I’ve actually come out of that really well despite the position disappearing sooner than I anticipated, but as a shareholder by default of their 401K plan, I have legitimate concerns about Gannett’s expansion strategy.

Here is my advice not only as a shareholder but as someone who makes pretty good money giving such advice to media companies:

  1. Your USA Today Network strategy makes sense. Your local-to-national strategy does not. Your acquisition strategy makes less than no sense. Your Q3 results show that while you’re buying scale and adding revenue, you’re also adding costs at an unsustainable rate, especially with the double-digit quarterly decline in print advertising. If Wolfgang Blau of Conde Nast says the “war for scale” is over, why do you think your business is different?
  2. Look at your advertising base. You leave a lot of money on the table locally because you can’t afford to chase it on your cost base. The cost of acquisition for small local businesses’ ads in many small markets is too high for you. Your ad base is regional and national, not local in any meaningful way below a certain floor. That’s your business, and you need to build your content strategy off of that. (It’s also the reality of much of the media market in 2016.)
  3. On that assumption that you have a regional-to-national business rather than a local-to-national business, you should sell off the vast majority of what I’d call your hyperlocal properties, small sites like those I used to manage. Believing that the number of print properties you have translates into reach in 2016 is outdated print thinking that you need to jettison. You’re looking at consolidation through the wrong lens: Lots of properties != profit. If newspaper scale based on property count was the solution, it would have worked long ago. It hasn’t. Moreover, as Ken Doctor points out, the Street doesn’t believe you can wring out as much as savings as you think you can. Keep some local staff around the state, but be strategic about it. Look at your numbers, how often is there a story from these small sites that grabs national attention?
  4. Use the proceeds of these sales to buy a tent-pole property in as many states as makes sense. That’s the basis of a regional-to-national strategy, one that is built on  sensible cost basis. It gives you scale without the costs, tightly focused execution and dramatically fewer print properties to try to manage. You have been so focused on cost cutting at a ridiculous number of properties that the product and your focus on execution have suffered. Regional products will be stronger and more sustainable than local or hyperlocal.
  5. In states where you don’t have a property or it’s uneconomic to buy one, launch digital regional properties. It’s more cost effective, and it gives you a good place to experiment without print legacy costs or thinking. Or partner and invest in properties like the Texas Tribune. A national expansion strategy will have to be creative and use different tactics based on the realities of different markets and regions across the country. This is guerrilla warfare for your future. Be creative and nimble, not corporatist and monolithic in your approach.
  6. Get deadly serious about your customer data. I know that is part of your strategy, but if you want respect from the Street again, you need to put that front and centre. You’re still drowning in the red ocean of print and struggling in the red ocean of digital advertising where Google and Facebook, with their superior ad tech and mountains of data, are the Great White Sharks gobbling up the market and leaving little but scraps for the rest. The media companies that come out the end of this Great Disruption will be focused on their content and commercial customers. This is the Bletchley Park Project for media. Crack the code of data or resign yourself to annihilation.

Let me end with this question: Did a Last Dead Man Walking strategy in print ever make any sense considering the swoon in print advertising over the past decade? Do you want to be a consolidator in a business sector in decline or a disruptor of your own business and others so you might have a future?*

* My day rates are well within your budget.

09.01.16
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The Olympic medal for media innovation goes to…

New York Times Fine Line Simone Biles

A version of this post first appeared on The Media Briefing, where I write about the media developments in North America, especially as they pertain to the search for new media business models. 

The Olympics are over, and the medals have all been handed out. But for me, the Games are not just an opportunity to see the best athletes in the world but also to see some of the most cutting edge digital media innovation. The 2016 Rio games also showed some of the tectonic shifts in media with viewership dipping on traditional TV platforms and up on on-demand and mobile platforms.

These are not simply vanity projects. As we saw recently with Politico’s Apple Wallet-powered EU Tracker project in the lead-up to the Brexit vote, a smart strategy executed well during major events can help you reach new audiences and power your growth to the next level.

Not to mention, that just like gold medal athletes hoping for lucrative endorsement deals after the games, media organisations are hoping to cash in, and this Olympics also showed how organisations are seeking new sources of revenue through digital commercial innovation.

New York Times’ The Fine Line

The Olympics are one of those big set piece events when top news groups, start-ups and the digital platform giants have time to plan and create trail-breaking digital media experiences.

Amongst the legacy media groups, the New York Times has once again made as much of a splash with digital media watchers as Michael Phelps and Katie Ledecky have made in the pool.

One of the most talked about and ground-breaking Olympics features by the Times were a series of visually-led features called, The Fine Line. In addition to the Fine Line features, the Times also created incredibly simple but effective animations to show how the swimming races played out, for instance how teen phenom Katie Ledecky dominated in the pool.

New York Times Olympics Bodies Rio Olympics 2016 featureBut that wasn’t all the Times did. Another feature effectively gave a game-like feel to the content with a visual quiz in which the audience was asked to guess what sport the athlete or para-athlete was involved in by their body characteristics. Did they have muscular legs and or arms? Were they tall or short and powerful? It was really nicely done, and the Times made a point to say that the athletes and para-athletes wore as many or as few clothes as they felt comfortable with.

Commercial innovation to drive digital revenue growth

But, as we’ve seen so often in 2016, the best editorial innovation isn’t enough to guarantee a sustainable business. Fortunately, the New York Times also displayed some incredible commercial innovation as well.

In the middle of the Fine Line features is a native advertising feature for Infiniti’s Q60 that seems right at home in the format. In addition to flowing the Infiniti ad into the middle of the stories, it is peppered throughout them, appearing both in the navigation and on the front of every Fine Line segment. The ad even fits thematically with the content: The “Making an Ironman” native advertising video shows a man training for the triathlon world championships with product placement of the Infiniti Q60.

Infiniti’s content also appears in various New York Times’ social channels, including Youtube and the NYTVR app.

VR, mobile, programmatic and native advertising are all part of the New York Times’ strategy to dramatically increase non-display digital ad revenue because display has shown lingering softness for many legacy print publishers in the face of the dominance of Google and Facebook.

The New York Times has not been immune, and it reported in its most recent quarterly results that digital ad revenue dropped 6.8 percent, which looks bad but not when compared with the 14.1 percent swoon in print adrevenue.

The Infiniti native advertising package across multiple digital channels looks like the kind of bigger deal that New York Times CEO Mark Thompson talked about recently when he predicted dramatic digital ad growth in the third quarter.

Thompson and Chief Revenue Officer Meredith Kopit Levien told Ad Age that these bigger, multifaceted packages were taking longer to close, slowing the pace of ad deals in the short term, but dramatically increasing revenue in the longer term.

Thompson said that these bigger deals were in the “million-plus range”, and they both said that the revenue would start to be reflected in the NYT’s second half results. It gave Thompson the confidence to predict that the NYT would deliver double-digit growth in digital ad revenue in the third quarter.

Power to the platforms

Rio Olympics media innovation

In its recent results, The New York Times pointed out that mobile was powering a lot of their growth, and Thompson said mobile is “growing at rates that even Mr. Zuckerberg’s little firm would recognise”.

Mobile content took centre stage at Rio 2016, and Facebook and other major  digital platforms were seen as key to helping Olympic broadcaster NBC to make sure that its content reaches younger, more mobile audiences.

Before the games, NBC’s deal with Buzzfeed and mobile messaging darling Snapchat grabbed a lot of coverage. Buzzfeed is curating content from Snapchat, and Snaps from Rio appear prominently in its Discover section. Buzzfeed’s involvement makes sense in light of NBCUniversal’s $200 m investment in the company.

This kind of distribution is officially a very big deal as it was was the first time that Olympics content would appear on a non-NBC platform, according to Gerry Smith of Bloomberg News. More than that, NBC isn’t requiring Snapchat to pay anything for the privilege, but the broadcaster, which paid $1.23 B for the broadcast rights, negotiated an ad revenue share with the mobile messaging and content platform.

Facebook’s ambitions in Rio were much more global, and it struck a deal with the IOC and 20 official Olympics broadcasters to offer content on Facebook Live and recap content on both Facebook and Instagram, according to L&F Capital Management on the investment blog Seeking Alpha. Facebook also reportedly paid some athletes, including Michael Phelps, to provide exclusive live interviews.

Looking to make live events and sports a bigger part of its offering, Twitter announced content across Moments, Vine and Periscope in its coverage before the games. Twitter also announced a pivot in the Moments product as well, as it said that Olympic Moments would stick around in users’ timelines for weeks rather than days.

When I wrote the piece for the Media Briefing, we really didn’t have a full picture of viewership on traditional linear TV and also how audiences were turning to consuming video on mobile platforms. But we quickly got a sense, and for NBC, it wasn’t entirely good.

Bloomberg noted that ratings were down 17 percent overall in primetime and down by 25 percent in the 18-49 demographic. Gerry Smith of Bloomberg questioned whether NBC Universal had got its money’s worth in terms of their $12 bn investment in the Olympics. Smith went on to say:

The Summer Olympics ratings slip, the first since 2000, raises fresh doubts about what used to be a sure thing: live sports would be a huge and growing draw no matter what.

But while traditional TV viewership was down, online viewership was up by 25 percent. Regardless of the obvious switch from linear TV to on-demand formats, NBC still ended up having to give away some air time to advertisers to make up for the viewership shortfall on traditional TV.

Of course, if you want a stinging rebuttal of Bloomberg’s thesis, read this Medium post on how terrible the NBC streaming experience was by Brenton Henry. The real issue for Henry seemed was that the streaming options were really only available for cable subscribers.

I was tempted to shorten this article, but then the lengths of measure I had to take to view something that is available for free over the airwaves show there is clearly a problem. I’m sure NBC were patting themselves on the backs for how easy it would be to watch online this year, but that’s only true for cable subscribers, a slowly shrinking percentage of the US population, especially for Millennials.

As we’ve seen with ESPN’s woes, pay TV use is starting to decline as more people rebel against the ever rising costs of a bundle of channels and services they simply don’t want. The business model for paid TV is going to come under increasing pressure. The Olympics and NBC’s model only highlights that.

04.30.16
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Journalism and innovation: “Never outsource your future”

 Piechota quotes Clayton Christensen, the esteemed chronicler of corporate change, saying: “Never outsource the future.”

Ken Doctor does a great summary of a report by Grzegorz Piechota for the INMA. I met Grzegorz Piechota in Prague years ago now, probably 2007. We were both presenting at a small workshop for journalists hosted by the Transitions Online.

Rather than doing a full-blown summary of a summary, I’ll just highlight this because it is so relevant and important.

Greg doesn’t pull punches, and he is saying something that needs to be said but that almost no staffer or senior manager who wants to keep their job can say:

Today we pay the price for the sins of the past. Users are destroying publishers’ revenues with adblockers. Internet giants have sniffed the opportunity to drag us into their walled gardens and eat us alive. It’s high time for news publishers to give strategic priority to mobile and improve the user experience…Can we stop discussing in our newsrooms whether every reporter should be on Facebook or Twitter and move the debate on social media to the boardroom?

I know of a major news company in which the staff have to use ad blockers so that they can simply do their jobs and manage their sites. If your staff cannot use your own site without destroying your business model, does that take anyone even a second to realise how ridiculously broken your user experience and ultimately your business is?

The time for half measures is long past. This is a senior board level discussion, and the leadership and managers need to start listening to people on staff who are saying these uncomfortable things. I’m making quite a tidy living at the moment telling companies things they need to hear, that many of their staffs are telling but that they wouldn’t countenance from a staff member or members of their management team.

We didn’t need to get to this moment a moment when major companies are going to go to the wall because they couldn’t deal with the reality that was so clearly before them. Instead, they chose to listen to the people who whispered that it would all be OK in their ears. To steal one more line from Greg. He quotes a Polish proverb:

When someone tells you that you’re drunk, she might be wrong. When three different people tell you, you’d better shut up and go to bed.

The industry is drunk. It needs to wake up and come back with a plan to deal with 21st Century realities. Build a digital business or get ready for the deadpool.

04.22.16
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Noted: UK print headwinds and growth v. revenue

As a media consultant, I am asked all of the time to point out models that actually work. I have almost always included the Financial Times in that list because they set the trend that others are trying to follow — building a reader-revenue driven digital business model. The FT was one of the early pioneers of the metered paid content model, and they have hundreds of thousands of digital subscribers. 

Now, Politico is reporting is that not even the mighty FT is immune from what most likely is the beginning of the end of print newspapers as a premium advertising platform. It might be, or it might just be a sign of Brexit uncertainty. We’ll know a lot more after 23 June. 

More worrying for the publishers in the long term is that some of the downturn is because companies are pulling out of newspapers altogether, putting their money into other formats such as the Internet and TV. The fear is: Many of those companies won’t come back.

I think in some sectors of print, they won’t come back. If they don’t come back to the FT, that would be a much darker turn for the industry and herald the beginning of final collapse of news-“papers”, at least in the Anglo-sphere.

I’m going to go out on a limb: Over the next two years, across large swathes of the English-language newspaper business, we will see widespread adoption of lower frequency printing — two or three days a week. Print will quickly become uneconomic as a platform.

Print represents the majority of the revenue for newspapers, yes, but also the majority of the cost. The economics will get ugly rapidly. The FT is lucky. It has digital revenue to fall back on, but for those newspapers that haven’t built digital businesses or other sources of revenue, the future will be bleak.

Growth v. revenue: The tension of the VC-backed model

I have to admit that I had never heard of live-streaming service Katch before Medium flagged up that a friend, Sue Llewellyn, like this post on Medium. For those of you like me, it looks like they came in second to Periscope, and I say that with no disrespect to what is obviously a small, passionate team. I do not mean to rub salt in their wounds.

In their post-mortem, something leapt out at me:

With a team as small as ours, taking the time to build out the revenue features for Katch would take away from building the growth features. When we got down to brass tacks, no matter how we ran the numbers, a premium version of Katch didn’t represent a venture-backed opportunity. 

With funding becoming more scarce, we’re entering a time where start-ups will rely much more heavily on founder, angel and seed funding. The VC’s are going to be suffering from a case of self-inflicted unicorn impalement for a while — taking the time machine back to 2002. Lots of innovation happened, but the dot.com crash was painful for a lot of people. Anyone got a fund shorting Silicon Valley real estate that they can recommend? 

01.20.16
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Every journalist needs a Plan B

"The key to life is how well you deal with plan B."

Photo: “The key to life is how well you deal with plan B.” by Betsy Weber, Some Rights Reserved from Flickr

Last summer, I noticed that a college classmate had joined a Facebook group called Plan B, a group for “former and current newspaper and video journalism people” looking for a second act, a job match for their transferable skills, a support group or simply a hedge against the instability in the industry. I joined because I sensed that my job as a regional executive editor wasn’t going to be around much longer, and I knew that I needed to start coming up with my Plan B. I would need my Plan B much sooner than expected.

It was clear that more cuts were to come last summer. In the almost two years that I held the job, there had been a straight-forward budget cut and a major reorganisation that was supposed to see us lose 15 percent of our payroll and 20 percent of our headcount. For a time due to existing staff getting promoted or deciding to part ways with the company, at one point last spring, we were almost 50 percent below our pre-reorganisation staffing. The budget was cut again before we filled any of the open positions due a miscalculation during the reorganisation planning. After months of recruiting and before we filled all of the open roles, a hiring freeze was implemented and an early retirement programme rolled out soon after. And then, last October, my role and another were eliminated.

Fortunately, the very next week I had two gigs, which had been in the works for months, and shortly after that, I set up my own consultancy, which is a continuation of work that I did before the job. I’m thrilled to have some very exciting projects in the coming months (although I still have time for more so feel free to get in touch). Ultimately, I want a full-time role, but this work means that I have the breathing room and space to find the best job and the best fit.

That space has been an incredible gift. It has allowed me to talk to a number of mentors and friends and think about all of my options. Compared to 2013, the last time I was looking for a full-time role, I’m actually more optimistic that I’ll be able to find the right role in journalism, but this is as good as time as any to think broadly. And this time like last, I’m thinking not just about the job but also about quality of life, closeness to friends and family and work-life balance.

Apart from the value of having a Plan B, here’s a few things I’ve learned already during this search:

  • Reach out to your network –  Last summer, I began reaching out to mentors and friends in the industry. It helped me get a head start on my job search, and if my friends aren’t in a position to hire me full-time, they still might be looking for a consultant with my skills and experience. But even if work isn’t in the offing, your friends will be a great source of support. I’ve been humbled at how much help friends have been in terms of brokering connections and helping me find new opportunities.
  • Take a passion inventory – One person on the Plan B group worried that she would never find a job as noble as journalism. Many of us got into this business because of the mission, the public service mission. But there are a lot of ways to serve the public. What other passions do you have? Journalism may be a noble mission, but it’s an industry in crisis. At times, I have asked myself if it has become the professional equivalent of an abusive relationship. If your current job in journalism robs you of your life through endless hours of toil while still not providing you a livelihood, there is nothing noble in it. I have seen too many journalists grow bitter after years of sacrifice. This is a chance to write your own story.
  • Think about skills, rather than a specific job – I just came across this today on Editor & Publisher by Tim Gallagher who left newspapers and now has his own small business. He spoke with a careers coach who told him, “We are going to talk about who you are. What your skills are. Not the jobs you’ve had.” He added, “And for the first time in nearly 30 years I began to think that there were jobs out there that did not start with journalism.”
  • Have a FoF – Call it a rainy day fund, an emergency fund or something more colourful, but if at all possible, bank some money so when the axeman cometh, it isn’t an immediate sentence for financial ruin. Before you rush to the keyboard to protest, trust me, I know how hard this on a journalist’s salary, especially when you’re just starting out. When I landed my first journalism job at the Hay’s Daily News in Hays Kansas in the mid-90s, I was making $2000 less than a first year teacher – $16,900 if you must ask. That said, I’ll own my own advantage or privilege, I got my bachelor’s degree debt-free, but only because my parents started saving for college almost the day I was born. They had to start saving early because they were both teachers, so not the demographic definition of high net worth individuals. I learned to save from my parents.

In an ideal world, I would have loved to have made the move on my own terms, but with the cushion my consulting has given me, I’m actually viewing this transition as a gift. I have recharged my batteries and am looking on my future as one of exciting opportunity.

Without my Plan B, I would be consumed with stress and overcome with fear, and I would leap at the first opportunity whether it was the right one or not. Certainly, I’ll be happy when I’ve filled in some more blanks, but I’m doing the heavy lifting now to answer those questions.

Ultimately, having a Plan B is about being prepared. With the industry in such turmoil, that doesn’t mean you’ll be able to control the outcome, but the outcome isn’t the loss of a job, it’s what happens next.

Featured photo by Betsy Weber from Flickr.

 

01.13.16
by

Peak Content: When the Attention Economy bubble bursts

This is a follow-on to an analysis that I wrote for The Media Briefing, published on 4 January. Simply put, I think a shake-out in the media business is coming due to a glut of content and advertising. I am not alone, and it would seem that 2016 begins with a lot of concerns about the sustainability of the current path in terms of media businesses. I’ve seen a raft of reports over the last week that sound like the beginning of this shake-out, both between legacy players but also amongst digital media pure plays. 

Never have we had so much choice in terms of news, information, music and entertainment. The democratisation of production brought by digital technology has made it easier than ever for people to create content, but it has also made it more difficult than ever to get paid to create it, both for individual creators and many companies. This cannot last.

The bottom line is this: Pressure on legacy media businesses and the current state of digital advertising means that you either go premium and paid – think The Economist, The New York Times, pay television, business intelligence – or you go mass and scale, trying to reach as many people as possible as cheaply as possible. There is a limit to scale, and a limit to the model of producing as much as possible as cheaply as possible, especially as the digital ad space is as super-saturated as the world of digital content.

As I said over on The Media Briefing:

For a long time, we’ve been creating too much content, so much so that I think that we’ve already reached Peak Content, the point at which this glut of things to read, watch and listen to becomes completely unsustainable. There hasn’t been enough ad revenue to sustain it for years and, with 2015 ending with a rush of acquisitions, consolidations and funding rounds with eye-watering valuations, 2016 will mark the beginning of a shake out.

Market crashes are the tsunamis that sink, if not all, then a lot of boats, and it’s time to take strategic action.

And although I’ve spent most of my career working in journalism, I’m not just talking about journalists and the commentariat, I’m talking about every kind of content. We’re producing too many podcasts, too many TV shows, video games, status updates and images than we could consume in a million lifetimes. Social updates are as much about communication as they are publishing or broadcasting, but they still eat up that scarce resource of attention. As a data journalist, I like hard numbers, and streaming music service Pandora gave us one on just how scarce attention is.

Attention is such an important topic for marketers this year because living in a connected world means our attention spans are at an all-time low (8 seconds1, to be exact), turning people into master jugglers of devices and content.

As my piece went live on the Media Briefing, it coincided with a number of articles indicating that a shake-out is already in progress. Ricardo Bilton at Digiday predicted a “winter of discontent” for digital publishers as many high-profile sites saw their traffic plateau, including Buzzfeed. Some of this is to be expected. It’s nearly impossible to maintain triple digit growth. He writes:

The challenges on the business side are fueled by the overabundance of publishers on the Web. Ad buyers are looking for deeper deals with a handful of partnerships, which is bad news for the sites that don’t make the cut.

This year will begin as 2015 ended, with a rush for digital publishers pivoting or looking for buyers. Bilton wrote that Mashable is shopping itself around, and it wasn’t too long ago that we heard that The Atlantic was exploring a sale of Quartz. For those not seeing the growth that they need to sell at a valuation that will sate their funders, we are seeing retrenching and pivots, or both in the case of Upworthy. Even seemingly safe and stable digital media players such as the Huffington Post are announcing layoffs in one area that had seen a lot of growth over the past 18 months, video.

This is all to say that those people commenting on my original piece who focused on the disruption in the legacy media business are missing the main point: This glut of content is hitting everyone who operates in the digital media space, apart from the only true unicorns of Google and Facebook.

We are fast approaching the end of this cycle though that has prioritised cheap scale above all else. As I wrote for The Media Briefing:

…flooding a glutted market only leads to a deflationary spiral until it becomes completely uneconomic to produce that commodity. It is a simple matter of economics, and it doesn’t matter whether that commodity is maize or media.

Tom Mullaly said in a comment on the post: “The market does not ‘abhor super-abundance’. Businesses trading in a super-abundant commodity abhor its abundance, and that’s an entirely different thing. Consumers of it revel in it, and that means you can monetize it, even if it’s not quite the news you knew.” Sure, for lovers of high quality content, it’s a golden age of choice in terms of incredible TV, international journalism and audio content, but it cannot last if it cannot be paid for. As Clay Shirky said years ago, “Abundance breaks more things than scarcity does.”

What happens now? 

For years now, one of my conference presentations begins by laying out this issue of overabundance and different ways to try to deal with it. As Peak Content becomes more well-known as an issue, we’re seeing a number of different prescriptions.

Tom Goodwin of Havas has written that in this flood of content, attention shouldn’t be our focus but rather clarity.

And I’m far from the first person to use the term Peak Content. It’s been circulating in marketing circles for a while now, and Erica Berger used the term in a Medium post in early December. She wrote:

To sum this up, the ecosystem we’re in right now is at highest editorial capacity for content, coupled with a shifting revenue stream away from publishers and to networks and large tech companies. There’s no hack that I or many smart people can see. That’s why we’ve reached “Peak Content.”

That said, she is optimistic about the passing of Peak Content seeing it as “an opportunity of a generation” to remake media.

But having survived both the dot.com crash, when an early generation of digital content companies were wiped out, and the Great Recession, which I survived by building my own global media consultancy, I know that when a bubble bursts it wipes as many good companies as bad. Yes, there is an opportunity here, as there always is, but it will also get messy. I absolutely agree with Tom and Erica that it’s a time for clarity and an opportunity to make something better than what came before.

But how?

I’m not going to rewrite my Media Briefing piece, but I think media companies, and this goes for you whether you’re a seed-funded start-up or a legacy media business trying to ride out what seems like the perfect storm, need to as a minimum:

  • Sharpen your strategic focus – If you’re not going to play the volume game, ask yourself what audience you serve and how will you monetise that attention. Get creative and think of things beyond the ad/subscriber dichotomy.
  • Iterative agility – Screw fail fast; instead learn quickly. Yes, failing fast is about the willingness to experiment and take risks, but the major challenge that I have seen in a lot of companies is that they fail to funnel the lessons, good and bad, back into the business.
  • Decide what you stop doing – When I worked for the Media Development Investment Fund, one of the key lessons we realised that digital start-ups had to learn was when to let go, when to stop doing something because it wasn’t supporting their success. The same goes for legacy media companies. As I wrote at Media Briefing, “one of the biggest challenges I had as an executive editor, (was) figuring out what we could stop doing that would free up enough staff time to innovate in a way that could really move the dial.”
  • Invest in revenue innovation – Never launch anything without revenue streams in mind. For every editorial innovation, I’d invest in two on the commercial side.

I want to amplify that last point because the biggest issue we have right now is that, in terms of unique users, we can reach a larger audience than ever, but no one can monetise millions of single unique users who spend 30 seconds or less with you each month.

Of all of the predictions and forecasts that I saw at the end of 2015, Amanda Hale’s, of Talking Points Memo, struck me as the clearest. She wrote for Nieman Lab:

We’ve reinvented journalism school time and time again and have nobly funded countless entrepreneurial journalism fellowships aimed at equipping journalists with basic tech and business skills (“entrepreneurial journalism,” while adjacent, is a different discipline — email me and I’ll explain), but as an industry, we have done very little to identify, pipeline, and train the publishing talent that will be responsible for securing the financial future of news.

Amen. She notes that her Twitter bio says, “Without a business plan, there is no freedom of the press.” Yup. That. As this shake-out gathers pace, scale at all costs will fade as the goal. To quote my Media Briefing piece a final time, “huge audiences don’t matter in the absence of a business model”.

If you want to hire me to work with your media, advertising or marketing company or start-up, I have just launched a consultancy, Ship’s Wheel Media, to provide digital product development, content strategy (especially social, mobile, data and visual) and content services. I am also open to discussing full-time roles. If interested, send me an email – kevin AT charman-anderson.com – or connect with me on LinkedIn.