I promised to post the spreadhsheet of media company tech deals from yesterday. There is more to add so I’ll post the spreadsheet and allow people to edit it. Just go to this link. The data as it stands is below. I will probably close this to editing after a time and simply post a sheet that you can download once that’s done. Thanks for the help.
CNN and Zite: What other tech companies have been bought by Big Media?
With the news that CNN has bought iPad news app Zite, I started thinking about what tech companies have been bought by media organisations. I could think of a couple off the top of my head including Newsvine and Everyblock by MSNBC, Reddit by Condé Nast and Blogrunner by the New York Times. If you think of any others, feel free to pop them in the form below. I’ll publish the list as soon as we get it into some shape.
Tottenham riots: Data journalists and social scientists should join forces
In the wake of some of the worst riots in London in more than a decade, Ben Goldacre has said on Twitter:
[blackbirdpie id=”100156268534181888″]
Yes, we’re now going to have to suffer through lots of ill-informed speculation from columnists. Brace yourself yet again as they take out their favourite axe from the kitchen cupboard and grind away on it just a bit more until the head is gone and they’re whittling the handle into a toothpick. It will enrage more than enlighten.
I have a better suggestion. With the current interest in data journalism, this would be a great time to revisit one of the seminal moments of data journalism carried out by Philip Meyer in the wake of the 1967 riots in Detroit. As a Nieman fellow at Harvard, Meyer studied not only how social science could be applied to journalism, but he also explored how main frame computers could be used to quickly analyse data. (For data journalists, if you don´t already own it, you should buy a copy of Meyer´s book, Precision Journalism, first published in 1973 and since updated.) As a national correspondent for Knight-Ridder newspapers, Meyer was sent to Detroit to help cover the riots.
The 1967 Detroit riots stand as the third worst in the history of the US, only eclipsed by the 1992 riots in the wake of the acquittal of police officers in the beating of Rodney King and draft riots in New York during the US Civil War. As the Institute of Social Research at the University of Michigan said:
The Detroit Free Press and the Detroit News threw every resource they had into covering the uprising. And as the disturbance died down, journalists and commentators, most of them white, struggled to understand who the rioters were and why they had taken to the streets. One theory was that those who looted and burned buildings were on the bottom rung of society—riff raff with no money and no education. A second theory speculated that rioters were recent arrivals from the South who had failed to assimilate and were venting their frustrations on the city.
But for many, those theories rang false.
A survey had been done following the 1965 Watts riots. Meyer approached Nathan Caplan, a friend from graduate school at the University of Michigan in Ann Arbor. They both had a similar idea to see if a survey similar to the one done after Watts could be done in Detroit. One challenge was that the Watts study took two years, but Meyer wanted it done in three weeks. The ISR has an article that looks at the process in great depth, and what is clear is that the study of the 1967 Detroit riots and the journalism that followed had a lot of support not only from the newspapers but from the university, government and local foundations. They recruited and trained 30 teachers to conduct the surveys, drew up a random sample and interviewed 437 black residents.
The survey debunked a number of theories put forward to explain the violence.
- One theory was that the rioters were poor and uneducated. No, the survey found otherwise. ¨There was no correlation between economic status and participation in the disturbance. College-educated residents were as likely as high school dropouts to have taken part.¨
- Another theory laid the blame at recent arrivals from the south who had little connections to the community. That theory was also wrong. ¨Recent immigrants from the South had not played a major role; in fact, Northerners were three times as likely to have rioted.¨
Like Ben, I´m sure that we´ll see hours of speculation on television and acres of newsprint positing theories. However, theories need to be tested. The Detroit riots showed that a partnership amongst social scientists, foundations, the local community and journalists can prove or disprove these theories and hopefully provide solutions rather than recriminations.
The Daily: Digital publishing at the speed of a slow-motion car crash
The Observer has an entertainingly scathing report about The Daily, News Corp’s iPad “newspaper”. Murdoch-haters will probably enjoy the reference to the family patriarch as a “cuddly Emperor Palpatine”. For long-time Murdoch watchers, the key thing to watch for in reports of any digital project at News Corp is the attention and focus given it by Rupert Murdoch. Once he bores of a bauble, you can put the project on watch for the dead pool. (*See MySpace)
I read The Daily for a few days, when I could be bothered to wait for it to download. Initially it was slower than a download of photographs of an issue of Wired, known to some as an iPad magazine. More than its early clunkiness, even as an American, I found the content uninteresting, which surprised me. The Observer said that it’s aiming to be middle of the road populist. You can accuse Murdoch of a number of things (queue begins to the left these days), but one thing you can’t accuse him of is boring content. The Daily is boring.
The Daily also lives up to its name. It’s a daily newspaper with some tablet navigation, and The Observer explains why it seems so slow and clunky.
But the sleekness of The Daily’s presentation belies a “devilish” production routine for those inside, according to one source. Attempts to perfect the content management system were abandoned in order to launch closer to the announced date. After copy is filed, coders work a night shift to build the pages, each of which must be laid out both vertically and horizontally. Those familiar with the operations report long, frustrating nights.
Ouch. On one level, I’m willing to cut them some slack. The iPad is a new platform, and the tools are still emerging. However, when you’re creating a new product, it hardly seems wise to make life so difficult. I wonder what requirements were made editorially in an attempt to justify such a painful production process. This is often the source of a lot of bad production, editorial requirements that actually ‘cost’ more than they are worth.
Digital can and should work at the speed of news. Just look at the rise of live blogging. Tablets and e-readers can take digital backwards. If they slow down the production of news, it’s an unnecessary speed bump that can’t (or at least shouldn’t) be justified with their small use compared to the web (at least until the revenue picture improves). Fortunately, we’re getting through the teething process with tablets. HTML5 is maturing much faster than anyone expected, and soon, we’ll get past these very first generation efforts. It will be interesting to see if The Daily survives to see that day.
Unbalanced coverage in the US balanced budget debate
I almost never, ever write about politics. I steer well clear of it. However, I’m going to risk it because I’m not sleeping well right now because it looks like my country, the once United States of America, is about to drive itself off a cliff.
When I say the coverage of the almost entirely self-inflicted US debt crisis is unbalanced, I don’t mean lacking objectivity or prejudiced, I mean insane. Balanced coverage would quote Tea Party darling Michele Bachman saying that there isn’t anything to worry about and Tea Party darling Jim Demint saying this is “manufactured crisis” on one side and then queuing up economist after economist, the ratings agencies, major financial companies, Fed chief Ben Bernanke, Treasury Secretary Tim Geithner and just about every other credible economic and business voice on the other side. As Dana Milbank of the Washington Post wrote in referring to 20 Tea Party Republicans as the Default Caucus:
So far, the Default Caucus is disregarding the advice of the Wall Street Journal editorial board, warnings from Standard & Poor’s, the record of Ronald Reagan and even the permission of Grover Norquist, the conservative loyalty enforcer who said that ending the Bush-era tax cuts would not violate lawmakers’ anti-tax pledges.
Not to quote too liberally from Milbank’s column, but this is the problem:
A Pew Research Center poll last week found that 53 percent of Republicans, and 65 percent of Tea Party faithful, believe that the Aug. 2 default deadline can be ignored without major problems.
A responsible press would be driving home the point to all who cared to listen that this will have consequences. Dire ones. It’s not just another government shutdown like 1994. No, even if a default doesn’t happen immediately because the US can’t meet its obligations, the ratings agencies will downgrade the US debt rating almost immediately. That may be abstract to most Americans, but it will have real and immediate consequences. Doing nothing is not an option, and it may already be too late to convince the ratings agencies that the US government isn’t broken.
I couldn’t agree more with US National Public Radio’s On the Media, when they criticised the US media for covering the political drama while almost entirely missing the point. They interviewed Rick Newman of US News and World Republic, not exactly a liberal publication, who said:
the Republicans are digging in their heels and saying no tax increases. And President Obama has basically said he will accept something that is about 75 percent spending cuts and 25 percent tax increases. That is a moderate position, based on the whole range of recommendations we’ve seen, but the media is struggling with how to re – relate to that. So they have to say Obama, on one hand, and these Republicans, on the other hand. And that’s where I think people get pretty confused.
As an American journalist, I was trained in objectivity. It is not a violation of objectivity to accurately portray what is at stake here. With a downgrade, borrowing costs will be higher. Overnight, the cost of serving the US debt will rise because it will be more expensive our basket-case government to borrow money. Recovery? Buh bye! Some economists estimate that for every 50 basis points (half a point of interest) rise in borrowing costs, you can kiss 600,000 US jobs goodbye. (A post by Ezra Klein at the Washington which will be quickly dismissed by conservatives as from a liberal rag.) Interest rates will rise making borrowing for average Americans higher. Americans, who like me, want to buy a house, will find it harder to finance. The already fragile housing market will take another knock. These are on the mild end of predictions. It goes rapidly downhill from there.
A few years ago, I chaired a panel about journalism and the financial crisis. A good friend, Kate Mackenzie from the FT, expressed some justified frustration when time and again the audience asked why journalists didn’t warn them of the coming debt-fuelled financial crisis. The general press mostly missed it apart from a few. However, Kate was right in pointing out that the business press had been covering this for at least two to three years before the crisis hit. I remember reading a Bloomberg magazine cover story titled Toxic Debt, all about CDOs and how they hid ridiculously risky assets including sub-prime mortgages. I read that in the summer of 2007, and I came home telling Suw that this could be 1929 all over again. It nearly was, and now, this crisis is entirely created by childish leaders who want it all and won’t compromise. As for the anti-compromise brigade, I hold Huffington Post liberals almost almost as responsible as the Tea Partiers. Both have made compromise a dirty word in Washington. Compromise is a sign of maturity. You never get everything you want. Most of us learned that on the playground as children.
With this balanced budget debt debacle, we can see this one coming. We can do something about it. We will have no one to blame but ourselves.
As a journalist, I’m paid to pay attention, and I’ve been paying attention from the start. This is serious. The clock is ticking on the US. There wasn’t any time to waste a month ago, and the political posturing has to stop. The Republicans are now accusing Barack Obama of playing politics and looking to his re-election. As if they aren’t. As if the half of the Republican Party queuing up to take his job isn’t looking to 2012. Don’t be silly.
The US is about to face a debt downgrade and possibly a default. It could take us back to the stomach-churning autumn of 2008 when the global economy hung in the balance. This is serious, and it needs some maturity and some compromise. I’d really like to come home, but I won’t be able to move back to the US if the Tea Party wrecks the economy. Man up both Republicans and Democrats. Too much is at stake to pander to those who won’t accept reality. My fellow Americans, get on that phone now. Call your Senator. Call your member of Congress. Your future, our future is at stake.
The Huffington Post, ‘over-aggregation’ and the attention economy
When does aggregation become appropriation? The question needs to be asked.
A writer for the Huffington Post has been suspended for “over-aggregation”. The suspended writer had linked to and paraphrased an article by Simon Dumenco of AdAge, who writes about it.
I aggregate a lot of content here on Strange Attractor, via Delicious and also through the social networks I use. Whether it’s here on the blog or for the journalism organisations I work for, I view it as sharing my attention with others, which they in return share with me. There are quite a few posts that I have written here that draw heavily on other sites. Sometimes, they draw from a single story on another site. However, I always take great pains to not only link to and identify the source, but I also try to give readers a reason to click and see the original source. That’s part of the value exchange. For the value that I get from that article and excerpting that article, I try to pay it back with traffic. That’s part of the attention economy for me.
It’s an issue I have with the Huffington Post. For me, too often they aren’t playing fair with fair use. They have built a video business off of aggregating and embedding lots and lots of video. For smart video producers, their ads travel with their embeds, and a click on the Huffington Post is as good as a click on their site. For other video producers, it’s a lost impression. Cynically, one could lay all of the blame on those not so smart video producers. That side steps other issues though. Hopefully, those video producers have related content in their embeds so that once the clip stops playing, they capture a little more of the viewers attention, but that’s a couple of related videos drowning in a sea of Huffington Post links.
Then there is the aggregation that the Huffington Post does. Sure, they paraphrase longer pieces into attention-deficit friendly shorter pieces. Yes, there is some value in that, but again, ramp this up to an industrial scale and we’re back to a pretty cynical strategy overall.
Of course, the standard defence is that the Huffington Post returns the value of its aggregation with traffic. Simon Dumenco challenges that, and he also draws a helpful distinction between the HuffPo and TechMeme, which he describes as a “an aggregator that takes a minimalistic approach (usually just presenting a headline and a one- or two-sentence snippet)”. In terms of traffic?
So what does Google Analytics for AdAge.com tell us? Techmeme drove 746 page views to our original item. HuffPo — which of course is vastly bigger than Techmeme — drove 57 page views.
I love the link economy, and I link to give my readers more detail if they want it. However, I try to tell them what is behind the click so that they not only have the opportunity to explore but are encouraged. If the reader has no reason to click on the link, what purpose does it serve other than to try get a bit more link authority?
I know that I’m running the risk of being called a curmudgeon so be it. The Huffington Post’s practices make me feel uncomfortable as a digital journalist. There I’ve said it. I expect the shock troops of digital puritanism to descend. I believe that digital journalism needs to have standards, and at this point, I feel comfortable saying what I’ve long believed: The Huffington Post makes a mockery of fair use. We will lose the great value that fair use delivers if we continue to allow it to be treated unfairly.
Huffington Post UK: What does it add?
The head of AOL Europe, Kate Burns, says that the newly launched Huffington Post UK has no competitor. Really? Let’s ignore the over-served national newspaper market here in the UK for a minute and focus on the aggregation plus blogger network model of the Huffington Post. While Burns points out Rue89 as one of the European competitor, she conveniently overlooks the Guardian’s Comment is Free here in the UK. Both sites were inspired by Huffington’s success in the US and roughly follow the same model although adapted for their markets. Beyond that, the Telegraph has a blogger network, MyTelegraph, that allows anyone who wants some space to air their views.
It is interesting to see that HuffPo UK is going a bit up-market compared to its US model. For a US transplant in the UK like me, the US HuffPo always has felt like the bastard offspring of the Indy’s opinion page crossed with the Mail’s skin-tastic, pap-driven parade of c’lebs. Plenty of American friends have taken to complaining that it’s the skin that wins when it comes to HuffPo’s page views. It has toned down the celebrity sidebar for the UK homepage, probably in no small measure that the UK is not only over-served in quality national dailies but has a veritable smorgasbord of ethically challenged tabloids. One tab recently criticised Pippa Middleton for allowing its dwarf photographer to take an upskirt shot. (No, I’m not going to link to it even if I could find it. Yes. I’m being completely serious.)
I’m still wondering just what HuffPo adds to the UK market apart from a new outpost in its namesake’s global ambitions. AOL’s display ad sales are starting to rebound, but it’s pouring money into its local project, Patch, with growing evidence that it’s a money pit with no prospect of becoming a money maker. It’s on a high-salary hiring spree in the US as Arianna has opened a second front to Rupert Murdoch’s first against the New York Times. One thing is certain, with the BBC, The Daily Mail and The Guardian launching in the US and the HuffingtonPost launching here in the UK, cross Atlantic competition is definitely heating up. The big question is whether the ad dollars will follow or be spread thinner than ever.
Advice to a younger self
The Media Briefing is using LinkedIn very effectively, and on one of their discussions, they have the following question:
Q: If you could go back in time and talk to yourself as a fresh-faced young entrant to the media industry what advice would you give?
I thought about this for a while, and to be honest, some of this advice I’d give to myself just a few years ago, not in the distant past of my career. One criticism that I would have of myself is that I’m absolutely horrible at office politics, well I used to be horrible. Being independent, I can observe politics without being threatened by it and without threatening those I work with. In the respect, striking out on my own has been wonderfully liberating.
With that bit of self-criticism in mind, I have to be fair to myself. Office politics is challenging enough on one’s own culture. I’ve had to learn not only British office politics but also some of the very subtle cultural cues of British society. That notwithstanding, I’d give myself this one bit of sage advice:
…take time to figure out the invisible org chart when you start a new job. Those invisible walls you run into are just border crossings between one fiefdom and another.
Like most journalists, I know how to work in a newsroom. I know what’s expected of me and how to tick the necessary boxes. When you become an editor, you enter an entirely other world, especially in an industry in crisis.
Google Plus as Google’s glue
Suw and I have been using Google Plus for the last day. The company’s latest effort to try to get social definitely learns a lot from it’s previous failed attempts to inject some social into its ever growing collection of services. More than learning from past failures such as Buzz and Wave, Google does something that it had to do, it started to knit together that sprawling collection.
Google was running the risk of pulling a Yahoo. With the rise of web 2.0, Yahoo not only developed its own services but also went on a shopping spree, buying up Flickr, Delicious and other services. One of Yahoo’s issues is that it has never been able to tie those services, as excellent as they are on their own, into any kind of meaningful coherent network or business plan. On one hand, it’s probably down to leftover 1990s portal thinking for Yahoo, and on the other hand, Yahoo spent a lot of time over the last decade pursuing Terry Semel’s dreams of becoming a major content player. (A strategy that AOL’s Tim Armstrong seems intent on giving another go, possibly with similar results.)
For a while, Google seemed to struggle with its quest for another growth driver apart from search advertising and Android. They seemed to launch and acquire service after service without much overarching strategy. The services seemed isolated and often poorly integrated. That has started to change with some very subtle navigation changes, but Google Plus really starts to knit them all together, including Gmail, GTalk or Picassa. It’s a good start, although I’m a little baffled why Google Reader is not integrated into Plus. I’d guess that is because Google Readers is a minority sport, but it seems like a logical addition, even if they had only added a tool that easily allows you to share from inside of Reader as you can already with Twitter, Facebook, Blogger and a range of other blogging platforms, bookmarking services and social networks.
They also seem to have learned some lessons about privacy from the Buzz debacle and also Facebook’s issues. Privacy controls are woven throughout Google Plus, and I think that’s a welcome addition to social tools. While folks who live in public like Jeff Jarvis believe that “social is for sharing, not hiding“, most people want to be able to exercise some choices with their online privacy.
As a journalist, I’m going to be keeping an eye on Sparks, which is a social content discovery system built into Plus. It’s not quite there, and it feels much more of a search product than the solid type of social recommendation service that I’ve come to love with services and apps such as Zite on the iPad. Sparks are supposed to be driven by Google’s +1 service, and maybe it’s an indication of a lack of uptake on that. At the moment, the recommendation is weak. Jeff Sonderman at Poynter has some excellent suggestions on how Google could improve Sparks. It’s well worth reading.
Google has dealt itself back into social and managed to start to integrate its offerings into a cohesive whole. Even if the social aspects weren’t all that compelling, bringing some order to what had seemed a bit of a haphazard collection of web services is crucial for Google’s ongoing success.
Some services I explore because I feel I have to. Others I start using because they offer me something. Google Plus definitely piqued my interest enough to take a proper tour and explore more in the past day. I like the ability to group people as I see them in my life and share things with the appropriate group. I’m sure my Mom won’t use Google Plus, but I’m not sure I agree with Scoble that this is early adopter only service. If you’re a Google or Android user, Google Plus makes a lot of sense. I’ve watched a lot of my friends in media and tech flood into Google Plus. It already feels quite a friendly, busy place. For Facebook diehards, those people for which Facebook is the internet, I doubt that Google Plus will have much pull. Google also is facing increasing anti-trust (anti-competition in the EU) scrutiny, and integrating its services will seem to its detractors as another attempt to seize new territory. Despite that, Google has shown that it can learn from its mistakes. It showed that it can do social, including some innovation in what is a very crowded space. It will be interested if the early adopters who flooded into Plus over the last 36 hours will stay around and what happens when the doors are opened to the wider public.
The Guardian: Burning platform is burning
After The Guardian and The Observer announced its ‘digital-first’ strategy the other week, which I, like Kevin, see as a burning platform admission, Alan Rusbridger went on Radio 4’s Media Show (MP3) to talk about the situation. Listening to the interview with half an ear open, one would hear a very calm, measured response from Rusbridger that would seem to make an awful lot of sense. But listening more closely, I heard a lot of statements that worry me, because they don’t seem to jibe with reality at all.
The Media Show’s Steve Hewlett started off by asking whether there really is a cash crisis at the Guardian, and Rusbridger replied:
It was a kind of, sort of, pre-crisis moment so we don’t want to get to that crisis. We were saying that if we did nothing and continued as we were, it wouldn’t look too good. We actually wouldn’t run out of money because we’ve got lots of investments in other things, but we would run out of the cash reserves that we have.
For a long time, The Guardian Media Group’s cash cow was actually Autotrader, of which they sold 49.9% in 2007 for £674m. At the time, the Independent reported:
Carolyn McCall, the chief executive of GMG, said: “The basis of all our investment is creating a sound financial basis for The Guardian. It’s all about the long-term security and independence of The Guardian. It’s a great position to be in.”
GMG is owned by the Scott Trust, a not-for-profit organisation set up to safeguard The Guardian “in perpetuity”.
Ms McCall said the money would be spent “very wisely and carefully over a very long period of time”, suggesting perhaps 50 or 60 years.
But “wise” and “careful” are not words that one could use to describe the next big deal GMG did, which was to buy the debt-laden Emap in 2008 with private equity firm Apax re-valuing the deal less than two years later:
GMG and Apax bought Emap for £1bn in 2008 but the business has been squeezed by the recession and weakened by a high debt burden which costs £50m a year in interest payments.
[…]
Apax has written its investment in Emap down to zero and, while GMG has not yet followed suit, it is expected to review its valuation in the next few months.
Emap has £700m of borrowings and GMG had to inject “an undisclosed amount of new cash” in Jan 2010. GMG has now written off about half of its investment in Emap, but they can’t write off the whole lot like Apex did because that would blow a hole in its balance sheet and no one wants to torpedo their own ship.
Furthermore, from Oct 2010:
Emap, the magazine, data and exhibitions business, has reported a 4% year-on-year fall in operating profit to £52m in the first half of 2010.
The company, which also reported a 4% fall in revenue to £135.5m in the first six months, said the results were “primarily due to uncertainty in the UK public sector”.
Emap’s profits continue to fall:
Emap has reported a significant fall in pre-tax profits in 2010, as government spending cuts hit revenues in its magazine publishing and conferences division.
The business-to-business publisher, which owns titles including Retail Week and events such as Cannes Lions, reported pre-tax profits of £27m for the 12 months to 31 December, according to accounts made available on Friday.
This is not a recipe for success: Emap will now struggle to cover the interest payments on its debt, and any profits from Autotrader are “ring-fenced to repay debts“. Whilst GMG has money in other investments, it’s not clear whether they have already had to raid those funds to keep going, or even whether there’s enough liquidity there for those investments to be useful.
So whilst Rusbridger is right that GMG has investments in other things, that’s not necessarily a reason to be relaxed about its finances. In 2009, The Guardian was burning £100,000 a day and reported an operating loss of £36.8m. In June’s announcement, their operating loss is stated at £33m, a reduction of just £3.8m.
“So it’s not a crisis,” Rusbridger continued, “but the point of the talk was to say that we have to do things before we get to a crisis.”
If the above doesn’t look like a crisis, then I don’t know what does. I have a lot of friends still at The Guardian, and the mood on the ground amongst many of them is that the sense of urgency one might expect to feel internally is entirely missing.
Hewlett later brought up the decline in advertising revenue, the fact that circulation is down 12% year on year, and the above mentioned cash losses of £33m. Rusbridger responded:
The big picture for the whole of the press, the whole of the market is going away at about 8%, and the Guardian is completely in line. Classified advertising has largely gone, and I don’t think that will come back and as circulations decline across the market, of course advertisers say, “Well, we want to pay you less,” and you just don’t want to get into that spiral of decline that we’ve seen in a lot of American newspapers where they then respond by viciously cutting back editorial costs, and then you have something that’s less readable and you’re in some sort of death spiral.
Everyone knows that classified have tanked, but during a recession recruitment advertising also tanks. The problem is, many of The Guardian’s pull-out sections, such as media, tech or public sector, are/were reliant on recruitment ads. Now, you’d think that with a subject like tech, where The Guardian had an excellent reputation and a great editorial team (and I say that not just because I used to freelance for the tech section), there would be plenty of opportunity to widen out the advertising from recruitment to display ads, sponsorships, events, etc. But that’s not what happened.
In 2009, The Guardian wiped out the tech section’s freelance budget and in December of that year they stopped printing tech as a standalone section. Commercial seemed to have no Plan B for the collapse of the recruitment ad market and instead of looking for one, the tech section was radically reduced. Towards the end of 2009 and through the first few months of 2010, The Guardian offered some very attractive voluntary redundancy packages and the majority of the tech section staff applied and were granted redundancy. (Disclosure: Kevin accepted voluntary redundancy from the Guardian at the end of March 2010.)
We know that focused verticals do work in digital — just look at GigaOm, TalkingPointsMemo, Engadget or AllThingsD (a sub-brand of the Wall Street Journal). They’re are doing pretty well, because they are developing key niches and are able to aggregate focused audiences who are primed for ads, but those ads have to be the right sort. General ads aren’t going to fund specialised sections, but if commercial won’t get their heads round what the right sort of ads are and then go out and get them, there’s no hope. Ads are, of course, only part of the revenue equation, but the same holds true for events, sponsorship and premium content.
This is exactly the same discussion I had with Computer Weekly, and it’s a fundamental problem that news outlets need to deal with.
The story is much the same as the Media Guardian, where arguably they had an even more bankable brand. And even with new ventures like Guardian Local, where they created great new products in three different cities and yet couldn’t capitalise on the skill of their journalists or the audiences they built.
In short, this is exactly the sort of editorial self-immolation that Rusbridger says he wants to avoid. But if you can’t capitalise on smart editorial staff and a passionate audience, what are you going to capitalise on?
Hewlett went on to ask Rusbridger about the announcement that sparked all this off: “How is digital first different to what you do now?”
Print is tremendously consuming of resource and time and energy and also the way that you think about things. So if you come in on the morning and your main concentration is on this huge thing that you’ve got to produce at the end of the day then that is going to dominate your thinking. The thing where all papers are exposed is in the innovation and the resources that we need for digital and the blunt truth is that we don’t have enough developers, we don’t have enough people who know about mobile, who know about Flash and data and multimeida so we need to get more of those and we need to spend more of our day thinking about those forms of our journalism.
Two points to make about this: Firstly, the attitude amongst some printies at The Guardian still leaves a lot to be desired. I saw in response to Kevin’s previous post a comment on a non-journalism forum somewhere on the internet from someone who said they worked as a print journalist on The Guardian. I’m not interested in pointing out who this person is, but I am going to paraphrase their stated position:
The website isn’t the newspaper. The website might be popular but it’s about being fast, about being the first to get a story up, and the standard of writing is pretty poor. In the newspaper, though, the writing is much better, probably the best in the industry.
Rusbridger needs to address the print-first attitudes, because print-first thinking results in print-first doing. He had an opportunity to shift towards digital thinking when The Guardian reworked its CMS, but instead of a digital-first system the one they ended up spending £18m on a new web CMS but with a workflow that is still print-first. Even now, even with The Guardian’s great web presence, they still have problems doing basic things like adding URLs to stories.
As for stocking up on developers and journalists with digital skills, well, The Guardian used to have some great digital journalists, but many of them have now gone. The former desk editors of Guardian.co.uk like Deborah Summers (politics), the people who either did digital journalism on the ground, like Kevin, or the people higher up the food chain who had a pretty good handle on how digital was affecting the news landscape, like Emily Bell, have moved on. From top to bottom, the digital folk have either taken redundancy, been pushed out or edged aside.
Furthermore, with lots of the digital talent and the experience they had developed gone and a culture that is still defined by print, the chances for those who remain, and those who have yet to join, to progress into senior managerial positions decreases. The Guardian, as all other news organisations, needs people who truly understand digital in senior positions, but without a pool of talent to promote, they just aren’t going to get that. Indeed, I’d say The Guardian has suffered a significant digital brain-drain and it’s going to take 10 to 15 years for digital folk now to penetrate the higher levels of management.
Rusbridger continued:
We need to get more developers in, so we need all of these people with digital skills, and we’re losing money so we need to reduce the cost base, so yes, we will need to lose some people and we’ll try and do it in a voluntary way, but we need to end up employing fewer people than we have at the moment.
At this point, it’s worth noting that The Guardian has had at least three waves of cuts over the last four years. This will be its fourth round, with more than 300 positions cut, and yet it still only managed to reduce its losses by £3.6m a year?
The final part of this interview I want to address is The Guardian’s new foray into American waters. This is their third attempt to crack America and I find the reasoning quite bizarre. Rusbridger once more:
The UK market is too small, really, we can’t grow very much more here, it’s a fairly mature market. Meanwhile, there is a huge appetite for what we’re doing in America, where now a third of our readers are, and so far we’ve done it with virtually no marketing and a tiny staff, so we think it’s not a ‘nice to have’ but essential that we cater for that market.
Firstly, the idea that the UK market is saturated is strange. We know that general news is hard to monetise, but niche markets can do pretty well, yet in terms of products produced by The Guardian’s key editorial teams, they have barely scratched the surface. As I mentioned earlier, there’s no paid tech product of which I am aware, despite the fact that this is an area where The Guardian could do really well.
Common news business models fall into some pretty discrete categories:
- Eyeballs: You aggregate an audience and sell access to that audience to advertisers and sponsors.
- Information: You provide information that people can use to make money or make decisions.
- Access: You provide access to data, people, networks, etc. which allow people to make money or make decisions.
The tech industry is really very good at exploiting all three of those basic business models but with much of the activity focused on the US, The Guardian could have used its brand to prise that UK market wide open. It didn’t. Media markets are also quite geographically specific, and again, the Guardian could have dominated that market, but didn’t. So the idea that the UK market is so mature that there’s no room for expansion here is a nonsense.
Secondly, the idea that the US market is easier because it is bigger would be a terrible premise for an expensive expansion. There may be a market there, but the monetisation should come first, before the new office and staff. As it is, by opening an office and moving a few people across the Atlantic and hiring 20 to 30 reporters and editors, The Guardian pushes its break-even point much further away than it needs to. The stakes will be high in an endeavour not well augured by its forebears.
The Guardian already tried Guardian America, with a site focused on American content with American ads, and that closed in October 2009 due to “continuing changes in the distribution patterns of web content”. Why will this new venture be more successful? And what will the business model be? As American news outlets know, making money of general news over there is just as hard, if not harder, than it is here, so The Guardian will need an innovative niche strategy. ‘America’ is not a niche, not over there, anyway. And ‘Europe for Americans’ is likely to be equally tough thing to turn into a product. They are also launching the project in New York, already at the centre of a New York Times, Wall Street Journal and Huffington Post battle. Do they have the resources, much less the stomach, for such an epic media battle?
I have fond memories of The Guardian as the paper I always wanted to read, the paper I always wanted to write for, not to mention the paper that got me my first ever job. Indeed, The Guardian also gave me my first major freelance commission outside of the music press and I would have been happy to write a lot more for them had circumstances allowed. I don’t want to see it fail, and I don’t want to poke it with sharp sticks for the sake of it. But I am worried that Rusbridger is a visionary lacking in business sense, clarity and a firm grip on reality. If The Guardian is to survive, it needs someone who can lead it with a clear, commercial head. I’m not convinced Rusbridger is that person.