Fernando Samaniego - International New Media Consulting

38 Tips for a Chief Digital Officer (Part 3, HR)

2013-06-02T21:16:00-04:00

22. Hire well. Invest your time

Hiring is the most important task managers perform, the one that creates the most long lasting effect in the company. Therefore, don’t just delegate it to the HR team; take ownership. My advice is not to rush but to establish a method and to devote time to follow that ideal process you have defined. Use any possible tricks in your arsenal to determine the best candidate. Check grades, background, references; perform whatever psychological tests give you a sense of certainty. Some of the approaches used by your print colleagues may not be adequate for identifying digital talent.

Select thoroughly and when the process is over, invest time in following up with the selected person for the first weeks and months. Your chosen candidate said goodbye to a job just to work for you, which means you are committed to that human being. I’m proud to say that with one exception I have never fired a person I have hired. In some cases it took me extra time and personal stress, but I’m mighty proud of those cases in which firing were the obvious option and I didn’t travel the easy road. If somebody has real talent I am ready to invest myself in getting to know what the issues and fixes may be. Of course it takes two to tango, but in my experience the other person has always danced, after some conversation time. You may have to be very direct for a person to realize what’s wrong with his/her performance and/or interactions. Growing is always painful and when they affect our ego we feel touchy and protective. At times, the help of a third person may come handy (the psychologist who interviewed the person for admission, an external advisor…). If the other party feels you are honestly trying to help, the catharsis will be beneficial for both parties.

23. By hybrid: hire for diversity

The world is too complex to be understood from a single viewpoint. We constantly need different ones, complementary backgrounds, challenging perspectives, examples from other countries, the right contact for a precise piece of knowledge, or a reference in another part of the globe…etc. All of that can only be satisfied by hiring diversity. We need some balance of sexes at every level (including the predominantly masculine technical workforce). We need people who come from other industries, who lived and worked far away, who have a different ethnic origin to the predominant one, who majored in music, philosophy, physics (I am just recalling outstanding individuals I hired)…etc, who have had their own company and sold it or failed, who were in the army, who were professional sports people…in sum who are not just like everyone else. Sometimes they will join ranks via hiring, or will come as managers from the companies we acquire, or thanks to small vendors that we “adopt” in our strategy. If you look for diversity, opportunities will come to you. Just a caveat: once they are on board do not expect them to conform 100% to the dominant culture. Instead, give them some leeway because the new media corporate culture needs numerous small contributions to rebuild its DNA.

24. Choose open space as the proper office setting

Walls are a thing of the past for they contain ideas within boundaries. Open space, in exchange, facilitates the dissemination of concepts and ideas much faster. Let me remember my literary years as a professor and quote Coleridge in a sentence in which I will substitute ‘poetry’ by ‘open space’: “the power of open space is, by a single word perhaps, to instill energy into the mind”. Among its advantages let me mention the role of serendipity (again, a literary reference; it means, making fortunate discoveries by accident), caused by the frequent unplanned interaction of persons beyond their own section or working group who make positive unexpected discoveries. The walled office is both boring and slower. Of course, open spaces have to adapt to the different groups, such as less light for designers, quieter area for developers working on longer-term projects…etc., but its intrinsic value, to me, is beyond any doubt. On the other hand, when open space is a poor excuse to cram more people in less space, disrupting noise and frictions will develop.

In a time when companies are spending billions to locate their employees in the most dynamic cities of the world to interact and produce better results, we cannot dare to create separation. In a previous post I argued in favor of open space: “Beware of complaints of your operating model which are nothing more than status considerations. Create meeting rooms for people to have privacy when they need it, for work or just to make a personal call. Design a place where members of your teams can congregate and interact informally, such as a modern type of cafeteria. Last, one technical detail that is often overlooked when creating open spaces: many people gathered together tend to produce noise which can be disruptive beyond a certain level. Flooring and ceiling should address the problem and contribute to noise reduction.” Nothing to add except that my experience in moving projects from walled settings to open space have always been highly positive. Productivity has always increased a lot.

25. Some of your best team members are outside

As the business environment becomes more complex and the arsenal of skills needed to compete become more sophisticated, it’s unrealistic to think that we possess all the necessary knowledge in-house. No matter how well you hire and how diversified your workforce is, the average media company is far from being self-sufficient, and this realization makes external connections & networks more important than before. The value of smart specialized individuals and consultants working in our market or far away has become a competitive consideration. The perspective of someone who has traveled the same road before can save us plenty of money and time. In other cases, while planning a new business we may feel like pioneers when in fact similar projects have been successfully put in practice elsewhere on this planet. In either case, a fresh view from an expert you trust is a plus. Cultivate those contacts, don’t make them feel exploited. You will run faster and safer. Your team will appreciate the learning.

26. Choose the best, even if managing the team is a challenge.

As a younger manager I may have feared hiring great people who could expose my shortcomings, but nowadays I feel absolutely the opposite. Choose the best rowers if you want to move swiftly and leave your competitors behind.

Be thorough when hiring and then devote time to consider how to retain your staff because some profiles will be easy prey. If your project really takes off, competitors and digital companies in general will fish in your pond. Be ready for that.

It doesn't suffice to pay fairly: you need to create the right work environment. Remember that many digital people place more importance on ”simply making progress in meaningful work”. If your teams are involved in decision-making & product definition, and if they feel that the projects include a fragment of their DNA, then you will be on the path to creating the right environment and momentum.

27. Make sure all key skills are duplicated

Having only one person who understands a critical piece of technology or a business is a dangerous situation since it would create a harmful vacuum should that person depart. As said before, all documentation should be written before launching a project; no fewer than two people should work on any key project. If that is not possible, can you count on any reliable supplier to train your new hire? Unpleasant situations happen and your role is to plan for them. The day after, you will be sorry you didn’t.

28. Help HR to help you

The human dimension of the previously mentioned tasks can overwhelm your HR department, no matter how well intentioned they are. They have been helping the company for decades and probably very competently but the HR department may need new skills to deal with the new importance and profiles of the Digital teams. HR will probably benefit from hiring a digitally-savvy HR professional who has worked with digital personnel before. That person should use social media to scout the best talent: Facebook and LinkedIn are just two obvious options being increasingly used. Regardless of the general approach to Digital, integration or separation from print, that HR reinforcement is a must.

The HR person should also: attend digital seminars and conferences (networking and scouting for talent), maintain good relationships with key professors at top institutions to detect talent, prepare Job Descriptions, interact with headhunters, take care of preliminary interviews preselecting candidates, communicate offers to selected candidates while portraying a positive image of the digital department (media companies are not the obvious choice for most candidates), talk to the workforce on daily HR issues, detect issues and problems and propose solutions, perform follow up of achievement of goals, propose compensation modifications, take care of all the paperwork involved with hiring or HR management, help you in identify opportunities to increase morale and productivity…etc. Ideally this person should sit among the Digital team but to avoid stepping on toes could report to HR. If you are only as good as your team, this person is key. The general HR department will benefit from having such a role.

29. Offer support to the legacy business

You do not live on an island. Your company’s legacy revenues are most likely decreasing but they still represent the larger part of the pie. If they decrease too fast your digital project will suffer. It is in your best interest to help the legacy businesses to maintain their numbers.

Print subscribers are paramount to sustain the audience and cash flow: offer them additional benefits from the businesses you manage (ideally, the annual subscription fee should be perceived as free), offer the gold subscribers (full year, prepaid, 7 times a week) membership and VIP status in one of the activities you manage, send them your deals hours in advance, give them advantages and make sure marketing takes them into consideration, to decrease churn and to drive acquisition. Beyond subscribers, there are other areas in which the digital activity can take print into consideration, be it the digital capture of print ads or just the possibility of offering the legacy part of the business ways of doing more with less…etc. It’s in your best interest.

You are free to use this article in your publication as long as you credit the author Fernando Samaniego

38 Tips for a Chief Digital Officer (Part 2, Revenues)

2013-05-27T16:13:18-04:00

14. Move beyond advertising revenues
While working in Argentina we analyzed a leading newspaper and found that a 1% change in GNP (Gross National Product) resulted in a corresponding 2.7% change in advertising revenues. When the economy was buoyant revenues flourished; when the economy went south (and the Argentinean economy is volatile), revenues diminished at almost three times the rate as the GNP, creating dire challenges for the company. My personal take away from that study was the need to create non-advertising revenues. Gaining transactional revenues places the proverbial eggs in different baskets to diminish the effects of possible economic downturns since transactional revenues take longer to reflect them. A Board would do well to establish annual non-advertising objectives and to review the transactional vs. digital ad revenues monthly.

It has surprised me for many years that great media groups which I respect (I follow Dale Carnegie’s principle of not speaking of companies or people unless it’s something positive) narrow their efforts to advertising revenues (to be fair, some of those companies have established a type of pay wall). By launching new projects based again on advertising they put their hands in the pockets of the same clients and they place more eggs in the same basket. Conversely, some media groups have evolved and now generate substantial non-ad revenues, such as Schibsted which is a good example of transactional revenues almost surpassing advertising. In that case it’s mainly thanks to its classifieds operations. Axel Springer is another successful example of a media group increasingly gaining access to income from sources traditionally foreign to newspapers. In both cases, acquisitions have played a relevant role.

15. Reach for transactions and services
It’s by now quite obvious that a media company cannot propel itself into the future solely by improving its news sites operations. It’s also evident for many companies that creating vertical (specialized) sites is not enough either. The objective should be to strike a balance between what we know best (news related revenue) and the generation of powerful new sources of income, from both transactions and services.

Transactional services include any invoicing done to companies for jobs we do for them which are related to their direct commercial objectives, such as the monthly flow coming to many classifieds players from car dealers, real estate agencies, ecommerce, promotion and booking services...and the array of subsequent activities around any of those. The recent launch by media groups around the globe of daily deals platforms is also a good illustration. Media groups can create transactional income by selling goods themselves (e.g. ecommerce) or by helping clients to achieve transactions. Services would include tasks a media company can perform for local companies, in general related to the complexity of the new technologies.

Please forgive the fact that my description and examples are insufficient but since this topic falls within the realm of our current strategy, I prefer to delay for the time being a better definition and examples. Media companies should aim at obtaining over 50% of revenues from digital, and that 50% should include transactional and service revenues in a short period of time. After all, as Taras Bugir, World Wide Managing Director for Media & Cable at Microsoft, told us recently we are in the retail business, whether we want it or not.

16. If your Sales Department is integrated, you still need to go hybrid
Whether digital sales should be integrated with print (newspaper) or independent is a discussion related to a larger one: if digital should be integrated with print or if they both should run apart, each one trying to achieve its own transformation, to maximize its own capabilities and investments. Most media companies have decided for integration, while others, and not the least successful ones, have opted for separate paths for legacy and digital businesses, at most sharing some services. Since this is a large topic that deserves a post by its own I will not address it at this point, while referring to Sales. For the time being, let’s say that integration has been the answer for many media companies and integrated Sales has been a consequence of that philosophy.

That said, it’s also clear that there are situations in which is best to be hybrid. If you have a powerful online classifieds operation, your sales force has to be managed by the business owner/s of those businesses. Once I had to live with a situation in which the digital classifieds sales force was managed by the Sales Department, and we only realized what a bad decision it had been when we finally reversed it. In fact, I believe that almost all digital transactional and service businesses should be managed by specific sales personnel reporting directly to the leaders of those businesses, since they are very vertical (i.e. specialized, serving an industry niche or specific area of interest) and work best with extreme proximity to the digital operation.

There will be cases in which the client is approached by both the ad sales team and the services or transactional team and the question will be if it wouldn’t be better to unify visits. Any answer to this question is bound to be complex and incomplete. As a generalization, ad selling and transaction and services selling require very different skills and the interest of both companies are usually best served by going separate, but without ignoring the great ability of multimedia/print teams to open doors in a world in which clients get multiple calls. Again, this is a multiple answer territory, but always based on a one by one case.

17. Track Digital objectives among legacy customers
In the case of an integrated Sales department it’s fundamental to verify that month after month reps are reaching digital objectives from existing legacy customers. Reps should be clearly aware that the company expects them to obtain a certain percentage of digital revenues from their existing portfolio of clients. If a media company gets 15% revenues from digital, the pressure should be on for reps to get 15% digital revenue from their clients. If a rep doesn’t get digital dollars from legacy clients, s/he shouldn’t be doing that job since it is negatively affecting the strategic evolution of the company. Simple as that. If we are not getting digital dollars from legacy clients it just means someone else is getting them.

18. Let digital buyers interact with digital sellers
Even in integrated companies, the head of Sales should ensure that for every digital buyer there is a digital seller making that call. More and more agencies and clients have been hiring digital savvy personnel and these new breed of professionals prefer to interact with people similar to them, who can answer their questions intelligently and argue with the right professional skillset which allows them to do business with assurance and credibility. Ignoring this reality will represent a costly mistake for a media company. Along these lines, the integrated media company should see that its Sales personnel transition at a good pace towards more tech savvy sales force, including middle and top managers.

19. Ask your team to accompany sales reps on occasion
If you are a CDO, get to know the VP of Sales well. If you are a shareholder, make sure they both get along and interact, since it will foster cooperation among their teams (I continue referring to an integrated operation). Because it has been proven that cooperation yields significant revenues, this interaction is not an option and it should be extended to the clients. If the bonus of your digital business owners is clearly established towards generation of new revenues (don’t worry, you control the costs), they will be happy to accompany sales people on commercial visits since they both profit from the same outcome. The truth is that an average digital media operation offers many brand creating alternatives only partially known by the Sales team. Even if the seller is fully digital s/he will benefit from listening to the arguments of a business owner who knows intimately the product.

Some companies have created a bridge between Sales and Digital, in the figure of a senior digital person who shares the revenue objectives of the Digital area. Ideally, that person attends the Management Committee of Digital to have a better visibility of projects going on and to bring to the table market suggestions which can help monetization.

Do not expect changes in the Sales Dept to happen automatically and instead humbly commit yourself to contribute to the necessary evolution. Some years ago, and after many months of frustration, I convinced the Head of Sales to hire a person coming from digital, actually from Yahoo, and our digital operation took a new twist and moved into fast growth (thank you, Yago Castillo!)

20. Social Media (SM) as revenue generator
Proactive media groups may attract one third of traffic from social media, which is obviously positive since it increases the page inventory and exposes ads to a larger user base. The more ‘transactionally’ savvy companies have discovered that they can translate SM traffic into actual dollars and they have become experts at measuring it in dollars and cents. Daily deals sites like Groupon discovered it some time ago. For it to work well the audience has to be large and the social media person has to do a great job (I refuse to offer tentative numbers because it depends on your market). I do not know so far of any transactional business which cannot extract great benefit from SM to sell to more people or to sell more dollars to them.

The day to day operation gives media companies a great deal of expertise with SM and subsequently they excel when compared to most companies around them. Some large clients will comment with your reps their inability to keep up with the new media and SM evolution or their frustration at being incapable to derive any real benefits from it. My suggestion would be to transform those grumbles into offers to manage their SM operations for a fee and with a bonus if objectives are met. Little by little, and in conjunction with the Sales Area you may be able to package more and more complex solutions for your clients to help them achieve their goals. This is just another example of revenues a media company should pursuit in regard to services based on its own DNA. In the process, your expertise in regard to the tools being offered will help the evolution of your own media assets.

21. While you learn to target audiences let others show you the money
Not so many media groups are able to sell audiences. Even if the objective has been established high up in the company, many hurdles remain along the way. Although I always say that psychological obstacles are the hardest ones to remove, in this case there are initial technical challenges to overcome.

It was John Wanamaker, considered by some the father of modern advertising, who condensed the frustration of advertisers in his sentence "half the money I spend on advertising is wasted; the trouble is I don't know which half". Advertising addressed more or less indiscriminately to the general user is still the standard mode for many media companies, although during the last year one can see efforts to move beyond and into the more targeted forms. Until precise solutions are decided and implemented by your company, I recommend established recommendation engines put in place by companies like Outbrain or Adblade. In the case of Outbrain, its widget can be placed on your website to suggest related content for further reading, both from the site itself, and from other places, of course in exchange of revenue in favor of your website. Installing the widget is very simple and, revenues apart, it will show editors the profitable possibilities of targeted content, based on an algorithm which learns from users to best serve them content or ads.

21 Sell audiences, not CPM
A more advanced step in the direction of aiming at individual users is ‘targeted advertising’, by which ads are served to users based on behavioral attributes obtained by capturing data generated while users move into, through and out of the website thus creating their own profile which can be used to target more relevant advertising. All of that can be achieved with registration or without it. Be careful since that data capture has become illegal in some countries unless users authorize it. On the positive side, your audience will prefer profiled advertising as users feel less considered a consumer than an individual. Given that those ads tend to be more effective they end up being more profitable for both the advertiser and the editor. John Wanamaker would have loved it. Media companies are beginning to sell audiences instead of just CPMs, which is more relevant to advertisers and also to users.

Because registration is becoming more standard in news sites (thanks, pay walls!), it has become easier to get to know users and to address them with the proper mix of advertising and content. Besides registration and the data which can be obtained from it, the users’ journey along sites can provide a bounty of information to really foster their satisfaction and loyalty, as well as your profitability. As a last piece of advice, do not try to ask for too much info at first. Instead, keep the act of registration simple and plan to get additional data later with the help of rewards, gamification and the expanding possibilities of the new registration tools in the market.

Remember, more pages is not the (only) response. Adding business intelligence to your traffic is. As CPM is probably a sizeable part of your total ad revenues, remember that targeted ads get more dollars than untargeted ones.

You are free to use this article in your publication as long as you credit the author Fernando Samaniego

38 Tips for a Chief Digital Officer (Part 1, technology)

2013-05-18T17:23:13-04:00

For the last 20 years I have been in charge of diverse media businesses in different countries. All along, digital was always a part of my responsibilities, and lately it has become my main focus. In appreciation for the generosity of so many people during my career, I want to share the mental blueprint I use when managing a digital operation. The following doesn’t mean, though, that I am doing well at every step I describe. Rather, I’m just a challenged beginner trying to plot my company’s roadmap to a profitable and fast growing digital operation. I can boast, nonetheless, that it represents a useful guide to leaders trying to manage rather complex digital media operations.

1. Choose who do you work for

If you are senior enough, choose who you work for. Transforming the dominant culture of a company involves, among other things, razor-sharp strategic vision, determination, stamina and serious backing to achieve the expected goals. Taking that journey with shareholders who have a track record of mistreating executives (excessive churn, unfulfilled promises, poor HR reputation…) is adding extra liabilities to an already difficult task. On the other hand, if you select a company with a good public image that goodwill will significantly help the products you launch. If the company has a good brand image albeit with a history of failed digital projects, the situation can be reversed. A poor digital track record will pose extra difficulties when attracting talent at the outset, but that can be overcome. Changing the mind of the market is much harder. Do yourself a favor and avoid conflicting companies and Boards.

2. Obtain real and perceptible support from the top

Moving a traditional media company along the digital path is a herculean task which involves most areas of the business, with the exception of printing. The successful transformation of the dominant culture and its processes requires strong support from shareholders and from the COO. This top-down support should be felt throughout the organization, should be well thought out and should include clear messages to the organization. Should hesitation or doubts arise along the way, shareholders should be careful not to express it outside the walls of their boardroom. In absence of explicit support, the inertia of the company will automatically act against the disruptive noise of the emerging culture.

3. Be “hybrid”: our digital world is a fast changing one and rigid schools of thought do not fit well with that.

Digital media is so dynamic that truths have a limited shelf-life. Requirements for success are diverse and involve many areas of human knowledge. Yes, somehow this is also true in other areas of business, but in digital we live ‘dog years’, compressed time. To be successful, one has to adopt a very pragmatic all inclusive approach. The argument in favor or against proprietary platforms versus open source is irrelevant; the answer is that both may be required. The same applies to investing in one’s own server farm versus cloud services, advertising versus transactional revenues, internal growth versus hiring from outside, agency revenues versus direct sales…etc. Be hybrid, be all inclusive and open minded in all areas of the operation, be they technical, commercial or personnel-related. When possible, perform constant A/B testing to monitor the effectiveness of each possible solution before you take a definitive decision.

TECHNOLOGY

4. Always think architecture first

Don’t fall in love with the variety of sexy software and technology tools to choose from! It’s easy to get carried away with a new platform which has been recommended by someone we trust and which moreover gets the best trade reviews. The problem, not uncommon to media companies with low revenue-contribution from digital, is that their architecture has become a series of technology layers which can be traced back to previous managers, or even to decisions fostered by attending seminars or visiting respected media groups. My personal advice is that you should chart your existing architecture while being honest and unforgiving with the situation and its ability to deliver. Then, share it with top tech guys you respect and find out if the current technology set up really makes sense or if some modifications would better suit your needs. Some elements will be valid; others are probably bound for change or obsolescence. This process, more often than not, will result in cost reduction. Whenever you need to progress, ask your people how any small change, new tool or platform fits with the architecture. This is my first point regarding technology simply because it’s the most important.

5. Digital technology and businesses should be intertwined

I have worked under two different circumstances: with authority over the technology team and without. Believe me that the speed of change is much greater with the former. Some media companies prefer that the IT people have control of the Digital technology, because of habit or simply because their IT managers are highly reliable. In this scenario the Digital business managers may feel insufficiently supported or dragged down. The Data Center is often a good example. IT gives support to hosting and maintenance of servers, at times without the proper knowledge of web tools and systems and more frequently following policies designed rather for traditional businesses, for which they have the knowledge. The Data Center example (let it be clear, no team is better than the other, they just have different skill sets) may shed light on the need for the digital area to have control of its own technology. Good understanding between both heads, and among team members, is a must. Whether you are the shareholder, CEO or Chief Digital Officer (CDO), the thinking should be the same, since this is not a matter of a person accumulating power, but of a professional being able to move the company forward by having control of two interdependent levers.

6. Sit digital technology personnel next to the business managers

It’s not uncommon to find that technology and businesses work in separate locations, perhaps in the same building. Twice I have experienced the tremendous energy created by just sitting the technical guys among the business teams. It’s hard to believe how dramatic the change can be. For close to zero cost, this is by far the best move a media company can make to accelerate its digital operations.

7. Have tech and business teams interact

Along the lines of the previous point, mix technology and business team members when analyzing a new business or the next release, and also when brainstorming. Recently one of my tech team members came up with the key to a very challenging strategic question we were posing ourselves (in a database project, how to persuade unsubscribed merchants to subscribe while not affecting users negatively). Such interactions are very positive for the company and for the professional development of both teams: tech people realize how important their job is and business people learn more about the basic principles of technology. Moreover, both sets of professionals appreciate the learning and growth; they also appreciate their interdependency.

8. Be hybrid with your architecture: use open source and proprietary software

Media groups have a tendency to perpetuate their legacy habit of acquiring proprietary technology and platforms into Digital Media. They perceive a sense of security from after-sales support, vendor expertise, stability, vendor trust…etc. Adding to that, open source technicians have been absent in media groups until recently, and at the beginning they were more expensive. It was Rob Curley who showed me the open source potential back in his times in Kansas. Since then, I have tried to move to open source when possible, but not obsessively. Experts talk about the zero cost of open source as the main advantage, but that ignores the fact that a good part of innovation is being driven by companies which aren’t in the business of selling software. Open source solutions are increasingly excellent at solving specific problems. Another overlooked element in regard to proprietary software is its cost in terms of the negotiation process, including subsequent time delays. For some well-defined jobs, a proprietary solution may be the right one. For projects which can evolve in unexpected ways, open source can give you the flexibility to adapt to the possible scenarios of a project. In any of those two scenarios, make sure you have in-house experts who understand the technology and inspect new patches or adaptations. It will avoid complications, downtime and in the long run it will give you some protection against unexpected turns in your business or the vendor’s.

9. Use Project Management

I have managed digital operations with and without a Project Management discipline and the difference is notorious. I wouldn’t do it again without. All media companies are trying to grow digital revenues fast. As shareholders look at the inevitable chart in which analogue income dwindles over the years whilst digital’s goes up trying to make up for it, it’s clear that this is a race against the clock. If proper management of time and budget is important, PM is crucial. Initial project estimates will vary and without PM it’s hard to ascertain where one stands. PM optimizes internal resources and suppliers to ensure that there is no wastage of time or money, nor further complications when the problems of one project start affecting others and threaten to disturb the morale of the team and its credibility. Beyond reducing time and costs while helping quality, reaching an agreement for PM workflow is an excellent tool to negotiate and obtain buy-in from the different teams working on a project. It’s a management aphorism that “you can’t manage what you don’t measure” and indeed any project extending beyond two weeks needs to be accounted for in order to be managed. The opposite is a recipe for disaster. A PM workflow is the result of team compromise and it represents commitment from each party to achieve an objective regardless of other commitments. It allows the project management officer to follow up and take corrective measures on time and on budget. With the years I have become more PM aware. I currently include in the PM workflow elements having to do with the business, not just the technology: contracts that have to be ready by a certain time, key revenue agreements to be signed...etc. Finally, I recommend that the flowchart includes quality and stress tests, technical documentation before launch as well as budget and time buffers (these last two could be hidden from the team).

10. Be hybrid: do in-house programming and also farm out

In principle, an in-house group of developers will react quicker to your company needs and will take into consideration more of the complexity of integration. Nothing beats face to face interaction and the speed and creativity generated when the holders of technical and business skills interact. When exposed to the business objectives of a project, internal developers will come up with unrequested ideas. Maintenance will be easier for them because they know the project from inception. It seems that I’m making the case for not outsourcing, but in fact there are many cases in which farming out is better and/or cheaper; each decision should be made on a per case basis, with pragmatism. An external company may be approached for a development job which requires a specialization not found in-house or because the team has its hand full or because you may want to get fresh air from outside to challenge your team or because you think that some repetitive tasks are better done elsewhere. Search was an abstruse set of skills for most of us some years ago, but now it’s a skill most media companies possess internally. For many companies outsourcing was the way to acquire them. The same applied to mobile skills some time ago. What is imperative is that at the end of the day your company has to possess the core skills. Whether farming out or doing it in-house, it has to do with the history and beliefs of your company, but as a rule of thumb, reinforce your core, reinforce your technical team but outsource routine and commodity. Lastly, one should not forget that our technical teams want to learn and grow; they are ready to move out of their comfort zone to acquire new skills in order to remain “hirable”. Am I being too candid? Honestly, in my life the most heard of complain of technicians has to do with lack of training, not with having to learn new things.

11. Offer incentives to your developers

I firmly believe that in a digital media operation, and for that matter in all companies, all individuals should look in the same direction and have the same goals. Since accomplishing it is more art than science, let me share ways I have been trying to achieve it: first, absolutely every single person in a digital operation (including a personal assistant, or the tea person who exists in many Asian companies) should have a bonus or variable compensation at the end of a period (year, semester, quarter, month) to incentivize performance. Not only personal performance but also group results should be taken into account to foster cooperation and to stimulate the group dynamics which will expel the laggards who penalize the rest. Another non-economic way to incentivize people was influenced by my previous life as a university professor when I cherished some of the teachings of the behavioral psychologist Burrhus Frederic ‘Skinner’ regarding human motivation: I have often applied the sentence “positive reinforcement of desired behavior” in my professional life, as opposed to threats or punishments, and I seriously believe it works with most people. One question often asked in regard to rewarding developers is how to measure their performance. I have tried different ways, not all them successful. Currently our developers report to their technical head but they are organized along business lines (e.g., the video platform developers have a dotted line to the Business Manager of video so that they identify with the objectives of that line of business). Their bonus is therefore dependent upon the total digital revenues as well as the revenues generated by the video business. I know this system is not perfect but I have tried others and this one suits us best. The purpose is that developers identify with their digital peers and with the success of the businesses they work for.

12. Document all development

The pressure to meet deadlines is often responsible for neglecting the preparation of software documentation, which frequently includes a description of the software, its function, relationships to its environment, construction principles…etc., as well as record of code, interfaces, algorithms and APIs. Ideally, it also includes manuals for the administrators, end users and support personnel. Unless the piece of software is going to have a short life span (e.g. a mobile app for a client’s campaign), documentation is critical. When ignored, any future versions or updates will become time consuming and more prone to error since any changes may negatively affect the software. This becomes especially important in the case of complex platforms which are created to last for several years and which will experience upgrades and intensive interaction with other pieces of the architecture. Who determines the scope of the documentation required and gives the seal of approval is important since it will affect its quality. In principle, the developer or developers, internal or external, should get the approval from the person in charge of QA (quality assurance) or a similar position. The following may seem tough to many, but in the case of more complex SW it is good to have the documentation ready before launching. The very same pressure to implement the SW will be felt by the engineers in charge of documentation. Someone told me not too long ago that the original WCMS (web content management system) of his company had been left undocumented by previous managers and that had been one of the main reasons to move on to a new one.

13. More on the technical area

Other recommendations are just common sense. Have your tech people listen to the business owners to grasp the basic concepts that matter, let them exchange examples of what the project tries to achieve. For more complex developments ask your tech personnel to offer business owners a RFP (request for proposal) and to help them go through it. Have the business support in delaying some complex functions to Phase II, if it makes technical sense. Include tech people in some of your work and planning meetings to make sure that there are no misunderstandings. After a business owner has defined a new project, ask her to share it with her tech peers to look for complementary ideas. At key milestones of the product development by your tech people, get together with your internal clients and share what has been achieved. This type of approach is always important but more so in the case of Newsrooms. News sites have matured by now and while competition from pure plays is flourishing, our newsrooms have to work frequently with a straitjacket which prevents them from thriving. With the proper open architecture, WCMS and a good array of modern tools they can develop the flexibility they need to show what they are capable of. If they are part of the building process, misunderstanding will be reduced, later implementations will be faster. Before any major technical development obtain the proper business data to verify that you are taking the right decisions; verify that the proposed step is not the consequence of just established assumptions. Data should be the beginning of things. When creativity or hunches come first, data has to follow. Beyond that, make sure you test every single component of the architecture of a new project, the more so the larger the traffic expected. Have it done by someone who did not work on the project.

You are free to use this article in your publication as long as you credit the author Fernando Samaniego

My Interview by the International Press Institute

2011-11-14T18:56:53-04:00

As a permanent new Member to the Advisory Board of the International Press Institute, I was recently interviewed on their website. Here is a copy of it, and a link.

Why should traditional media invest in innovation?

Let me start by stressing an old truth: good storytelling is the key to our success. Good storytellers are the protagonists in our own future success, the protagonists who unfortunately have too often been sidelined by the antagonists (‘bad guys’): bad journalists and unprepared bosses in the newsroom.

The newsroom needs to be reinvented: it needs to become dynamic, to become the platform where content merges from multiple sources, including external contributors, professional and amateurs. For this to work, contributors need to be compensated for their work in new ways because the some of the previous models are unsustainable. And our content platform absolutely needs to produce original content - paywalls are not possible without it.

We old dogs need to learn new tricks to engage audiences. For media companies to interact more closely with readers, they need to further explore the relationships between content and users; and between content and content, uncovering patterns which will allow us to automatically anticipate the intentions of users and create related services and functions.

In short, innovation is key to the future of the news – from the technology, content and business perspectives.

How can an innovative online media project become economically sustainable?

1. Leverage our key assets and branch out into adjacent businesses
News sites are heavily trafficked, but they are costly and unprofitable if we fully allocate real costs. While we need to grow and master that business, we also need to discover other activities we should explore for potential profitability. If we grab a newspaper printed 20 years ago, its index will show some of the businesses it aggregated: obituaries, cinema, economy, classifieds, professional ads...etc. Hard news was one part of the picture, albeit, the main one. In our digital papers, it should be the same; we should explore adjacent territories in order for us to become the local connector. Our advantages are our brand, our editorial and commercial teams. Thanks to them we can continue grabbing audiences and smartly creating new activities in the hope of creating new businesses.

2. Don’t be precious about our homepages - take our content to where the readers are
Too often our guests don’t go beyond the hall of our costly hotels – the homepage. Users peep at the breaking news and leave. Some players are exploring means to present the user with related content or tailor made proposals, but in fact more and more of our readers’ activity takes place outside our properties. Of course we have to follow them wherever they go, but we need to continue engaging users in our properties. We should think of ourselves as the owners of a network of FREE heavy trafficked highways who need to recoup our investment. Since drivers do not pay a toll, we have to be smart at populating our highways with billboards and road signs to direct vehicles to the new stores we need to create in the infinite land along our roads.

3. Be agile & flexible in embracing technology
Media companies need to avoid the “asphyxia by technology” syndrome. Too many companies fight daily with their existing vendors and platforms, which often walk at different speeds and with divergent goals. I use the “energy”¨comparison to describe the use of technology in the newsroom: you can depend on foreign oil and “export” lots of money, or you can increasingly rely on new sources of energy, invest in research, create jobs, manufacture locally...etc. An approach based on reducing costs, risks and rigidity while keeping inside a series of core competencies will facilitate our playing with content as if it were dough.
We need them to take strides in our understanding of the relationships of content with other content and with users, (semantic web), to second guess behaviors or to ascertain the desired content to be consumed at each precise moment, including categories of data or services the user is in need or in the mood to consume. Nowadays content is technology dependent and good journalism needs good platforms to thrive.

4. Understand that data is the new oil
If we could gather and harness data left voluntarily by the user on our sites (think gamification techniques) and if we could add to all of that some of the personal information available via other channels (e.g. Twitter or Facebook, including past “likes”, friends, groups), we could offer readers a much richer experience.
For example, we could surprise them with the best Groupon-type offers or services or a Daily Me for non- hard news. In a hypothetical ‘personal control board’ where the user could see its own ‘shadow’, any affinity proposal would be possible (better targeting of ads is just the obvious benefit coming to our minds). If media companies are able to achieve such goals, their role in the community would be assured.

5. Change the culture:
As is the case in industries in which innovation is key, media companies need to be better at understanding the rhythm of change in society and at using the latest technologies to keep pace with it. We tend to go slowly and timidly about it. Often, the best technical people do not want to work for us because we have not created the right environments for them to bloom. Often we force those tech people to adapt to our corporate culture and we show our surprise when they suffocate or lose their initial enthusiasm.
This all said, let’s not lose track of what is really important: our future requires original, real story telling. Without that, no competitive advantage will be left for us.

In your opinion, how do initiatives like the IPI News Innovation Contest promote the development of new media and strengthening of journalism?

IPI plays an important role in making innovation happen by funding a number of interesting projects. This year we were forced to choose among a vast array of proposals from many countries. In some cases, the projects were presented by people not coming from media and I’m sure they will shine new light onto our old problems. In the case of developing countries, IPI’s funding will undoubtedly help strengthening those new democracies. By putting money behind good intentions, IPI fosters innovation and good journalism.

You are free to use this article in your publication as long as you credit the author Fernando Samaniego

The Easiest Way to Motivate our Digital Teams, According to Teresa Amabile

2011-09-05T11:34:23-04:00

Today, Labor Day, I got an email from a former member of a team I led some years ago. She found in the New York Times an article which summarizes the philosophy our team tried to implement and which may have been responsible for our share of accomplishments along that creative stage of our lives.

Now that media companies are beset by a never ending crisis in the Western World, as well as by their own special circumstances, we are losing sight of how to move forward with our projects and how to keep our teams really motivated. The old guard assumes people will always remain motivated because they want to keep their jobs. Wrong! Good digital professionals can move to other projects almost as freely as they wish. “Generation Y” professionals fear boredom and actively look for more feedback from their work environment while at the same time demand to be part of the decision making process. They are independent, tech savvy, competitive and challenge the “just do it” type of management. In case of boredom they vote with their feet and that explains their high mobility.

In spite of the obvious reasons, media companies very often do not get it right; they do not manage employees properly. What do our digital people want, generation Y or older? Teresa Amabile, a professor at Harvard Business School, and Steven Kramer, an independent researcher, are the authors of “The Progress Principle.”, which is summarized in the Times. Let me just offer a few enlightening sentences as well as a link for the complete article (bold is mine):

“Managers can help ensure that people are happily engaged at work. Doing so isn’t expensive. Workers’ well-being depends, in large part, on managers’ ability and willingness to facilitate workers’ accomplishments — by removing obstacles, providing help and acknowledging strong effort. Employees are far more likely to have new ideas on days when they feel happier. Conventional wisdom suggests that pressure enhances performance; our real-time data, however, shows that workers perform better when they are happily engaged in what they do.A clear pattern emerged when we analyzed the 64,000 specific workday events reported in the diaries: of all the events that engage people at work, the single most important — by far — is simply making progress in meaningful work.

As long as workers experience their labor as meaningful, progress is often followed by joy and excitement about the work. “This time it looks good! I feel more positive about this project and my work than I’ve felt in a long time,” one programmer wrote after she’d completed a small but difficult task. This kind of rich inner work life improves performance, which further supports inner work life — a positive spiral.

When we asked 669 managers from companies around the world to rank five employee motivators in terms of importance, they ranked “supporting progress” dead last. Fully 95 percent of these managers failed to recognize that progress in meaningful work is the primary motivator, well ahead of traditional incentives like raises and bonuses.”

The Future of Media; Part 4, Revenues

2011-03-19T08:54:00-04:00

The fourth and last post of the presentation The Future of Media Companies focuses on the generation of revenues. The revenue model a media company envisages is intimately related to the vision of its role in the market.

Banners and similar formats have a serious growth limitation and a project based on them will see revenues dip. Unless a media company adopts a more updated vision of content, brand and portfolio the sales department will not succeed in bringing home the necessary resources to keep the project humming. While it is true that we will lose analog dollars to digital pennies, there are other activities as well as other revenue and advertising formats which can start bringing money from different sources in a rather immediate way.

You can click Download Part 4 Future of Media to gain access to the Power Point presentation. Alternatively, you can click here to see it here, in Slideshare.

You are free to use this article in your publication as long as you credit the author Fernando Samaniego

The Future of Media; Part 3, Brand and Portfolio

2011-03-12T08:42:00-04:00

This third post on The Future of Media Companies deals with Brand and Portfolio. Content and brand are the only two things that really matter when looking at the future of media companies. All other things, important as they are, are just means. Marketing will have to ask many questions and offer many answers before the media company can seriously embark on its transformation.The new media company, especially if addressing a local market, will compensate for the shrinking of its flagship, the newspaper, with the generation of new businesses. A larger portfolio of activities around core competencies will ensure relevancy for audiences and advertisers.

You can click Download Part 3 Future of Media to gain access to the Power Point presentation. Alternatively, you can click here to see it here, in Slideshare.

You are free to use this article in your publication as long as you credit the author Fernando Samaniego

The Future of Media; Part 2, Content

2011-03-08T22:50:04-04:00

The second part of my presentation The Future of Media Groups deals with Content in media.

Again, very few slides in which I try to offer basic references when looking into the future, in this case into content. My objective, as one would expect from somebody who has been actually managing media companies for the last 20 years, is to suggest practical guidelines being followed by media companies, regardless of their size, when trying to build the news content they need.

You can click Download Part 2 Future of Media to gain access to the Power Point presentation. Alternatively, you can click here to see it here, in Slideshare.

You are free to use this article in your publication as long as you credit the author Fernando Samaniego

The Future of Media; Part 1, New Paradigm

2010-12-07T09:08:37-04:00

An important function of the top management of media companies is to try to ascertain the direction in which their companies should move. Some owners and managers believe that the fog has to clear before they can take any steps forward; they argue that there is so much confusion that they risk taking their company off a cliff if they act too early. They add that we risk embarking into cul-de-sac projects which will deprive us of the cash we will need later on.

From my own experience, that is just a poor excuse for inaction and avoiding necessary risk-taking. Reality is more similar to a ladder: if we are in step 2 and later on we realize that our company needs to operate from level 17 to remain relevant to audiences and to continue squeezing revenues from our market…we will be game. No time to react, no internal skills, no culture…etc. Although everything may not be clear, one thing is: companies will be different, less corporate, more entrepreneurial and digital. They will be better at capturing and packaging news from their markets and they will rely more on local external sources and users.

Good content will remain key but devices and formats will evolve as also should our ability to squeeze more digital pennies. The sooner we start the learning process, the more chances we will have. There is no option but to use good judgment and start the walking.

This post has been divided into four sections to make it easier to visit or download. I’d feel rewarded if any, or all, of these slides would be used by media companies to facilitate the internal debate which is going on within many of them.The first part is a brief general introduction which presents what in my opinion is really relevant in a media company.

You can click Download Post 1 Future of Media to gain access to the Power Point presentation. Alternatively you can click here to see it here, in Slideshare.

You are free to use this article in your publication as long as you credit the author Fernando Samaniego

Article Published in IPI Report

2010-09-28T03:39:58-04:00

To celebrate its 60th anniversary, the International Press Institute is teaming up with the Poynter Institute, one of the premier journalism training centers in the world, to answer a set of questions including “Is the future really so bleak? Is the decline a global phenomenon? Are we moving into a new ‘golden age’? And what does it mean for press freedom? For that purpose, they set out on “a global investigation assembling an international group of editors, journalists, visionaries and skeptics to discover how the future of the news is developing around the world.”

I was honored to be asked to write an article,” Media Face Different Difficulties in Less Mature Markets”, in which I expose my experience in working with emerging markets, which face their own sets of problems. I recommend the IPI Report in its integrity which includes many respectable names we all know in this industry, such as Jeff Jarvis, Dan Gillmor, Grzegorz Piechota, Alan Rusbridger, Mario Garcia, Turi Munthe and many others. You can find my contribution on page 106.

The Chronology of News Creation & Distribution

2010-07-24T12:48:05-04:00

One of the hardest nuts to crack when dealing with newspapers is the general mistrust of chief editors to share their stories with other media within the same company. Convincing them to do so or asking the newsroom to get involved in the online work is a conversation that doesn’t belong to 2010. I refuse to reopen it. We shouldn’t talk anymore about sharing and repackaging content. That’s not the way to solve our ills.
It was almost a decade ago that I covered those topics with the chief editors whom I had the privilege to work with. All of them were proactive and some of them, let me pay homage to Carlos Jornet, have had the intellectual ability and charisma to convince their troops, as well as the organizational skills to do it. But I know other chief editors who are quite different, and this short post (compared to my usual long ones) is addressed to them.
Printing is not the center of our activity. Actually it should be the last step of the process. Yes, I said the “last” step. The very nature of the product means that a newspaper has to include complete information and analysis, which can only happen after the fact (i.e. after the news has occurred). Instead, our users/readers frequently want the information ASAP, even if still incomplete.
Satisfying that need requires a strategy beyond sharing and good will from journalists. It goes further than the convergent or multimedia newsroom. It focuses on our vision of how things happen and how readers find out about them in the real world. Then, we just act accordingly and repurposing and repackaging will come naturally.
One important way of doing it right is understanding the time sequence of news. At the end of July I’ll be in North America talking to a proactive media player about, among other things, this topic. I have prepared for the occasion a slide that I want to share with my readers.

View this photo
I hope it can convey in a synoptic way the importance of having the time sequence right for media groups. I will not dwell on it since it is self explanatory. The reality cannot be apprehended in one slide and the casuistic nature of content formats and timing can be infinite. Still, it tries to offer in a simplified and visual way the importance of delivering news in the right media order. Band aids, as I mentioned in my first paragraph will not make it. Play by the customers’ rules.

Facebook's Future

2010-06-15T13:25:47-04:00

Yes, Facebook is an amazing phenomenon that has shown a remarkable ability to manage its growth up to date. Developments taking place in the online world have been adopted and adapted by this social site, and over a million developers responsible for churning out over half a million applications are a tremendous force ready to take on new challenges. Which challenges are there in Facebook’s future? This is a question I intend to answer, albeit in a partial way in this post.

When you blend together over 400 million very active users (each with 130 friends and creating 70 pieces of content per month) plus 1 million eager developers, plus the market pressure to move forward or to the sidelines, I believe we are bound to see big changes in Facebook. Let me elaborate, or fantasize.

The experience of Second Life and Facebook

Users are meeting in Facebook in the old way (rendered just a little more attractive). Although communicating using black characters on white background (and many variables) is not very innovative, Facebook’s innovation doesn’t lie there but in other aspects which are explained in many posts and articles. Although the current user experience when interacting with friends is a great one, in our modern world everything has a tendency to wear out fast and become monotonous, even boring. Perhaps Facebook could adopt other formulas of interaction already being used on the Internet in order to offer users a new setting to mingle, while maintaining the existing one. I am referring to the possibility of Facebook to put people together, almost physically together, no matter how far apart they really are via virtual worlds.
Second Life was launched by Linden Lab in 2003, when the processing speed of servers and PCs was barely enough and when broadband was slower and less extended. It gained notoriety fast but at some moment it began to lose traction. Some people say that moving around in Second Life was a little too complicated and that Linden Lab failed to benefit from legions of third party developers by keeping its software proprietary & failing to open it up to external parties always willing to make a buck in exchange for their input, creativity, freshness and multiplying effect. In my opinion, besides the above arguments, Second Life lacked some indispensable ingredients for an adult virtual world to work. First, there was not much to do. I mean, the environment was not engaging. Flying and watching things was fine for a while. Just for a while. In addition, the environment was not really meant for users to interact with friends from the real world, as it happens in Facebook. You could not bring your old world to the new one: too many new things at once while lacking personal references and simple interaction abilities.

If your question is “Whatever happened to Second Life?” you can read this article by Barry Collins on PC PRO and find out. Just a paragraph: “Three years on, and Second Life seems no closer to finding a respectable reason for being than it did in 2006. It might try and shuffle sex into a corner, and pretend that it’s a melting pot of creativity, business and academia, but it ultimately serves no purpose.” Sex has been limited to Zindra, a Second Life’s island, which is the most visited piece of real estate.

Strong Growth of Virtual Worlds

The virtual world craze did not stop with the fading of Second Life into quasi oblivion since other virtual worlds have prospered during these years. Perhaps the most successful one is World of Warcraft, but The Sims 3, IMVU, with customizable 3D chat rooms and avatars are other examples. Click here for a time-line chart on virtual worlds. The Association of Virtual Worlds published a downloadable book on 2008 containing references to 250 examples.

Undoubtedly, the use of virtual worlds will extend into other areas of society and some years from now they will be part of our regular experience as citizens, even if we are not advanced computer users. The education industry is looking into it since the virtual environment is well suited to immerse learners into a discipline. In the meantime, naïve examples are coming to surface. Whyville is a virtual world “geared for teen and pre-teen girls and boys. Its millions of registered "citizens" come from all over to learn, create, and have fun together. Whyville has places to go, things to do, and of course, people to see. Whyville has its own newspaper, its own Senators…its own suburbia, and even its own economy - citizens earn "clams" by playing educational games.“

Is there money for Facebook to go that way?

Are virtual worlds completely foreign to Facebook? If we consider a virtual world to be a type of online community operating in a computer-simulated environment in which users take the form of avatars to be graphically visible to others, the answer is that: (1) Facebook is already offering some (minor) degree of virtual world experience, (2) users are showing good response, (3) there seems to be some money there or developers would stop writing code. Farmville boasts over 80M users which are given virtual land to grow crops on. Then, in Restaurant City they can “decorate the facilities with an ever increasing inventory of items which expands as the user levels increase. Avatar creation is minimal, but the user can hire his/her friends to staff the restaurant, with the ability to give the staff uniforms. Money and experience are earned by serving customers”. Other examples are Yoville, MiniPlanet, SmallWorlds, Café World…etc. So far, these worlds are just simple applications developed by external developers to make some money but they do not play a core role in the Facebook experience, since they are just “games” for distraction which could one day disappear without having a significant effect on the ability of Facebook to engage its users.

Developing a virtual world as one would expect from Facebook would cost a lot of money, since before it can open ‘construction to external contractors’ it would have to do a lot of ground work. Where would the money come from? If only from users, the current goodwill may be put at stake since users may resent that the Facebook environment is becoming too commercial and may start looking for alternatives. Money would have to come, at least at the beginning, from other constituents.

Any business owner willing to show their real facilities would be more than happy to “build” a virtual replica where virtual products could be sold. For that to work in a social medium, the business would have to create virtual events to be visible. In their desire to attract more real tourists, some cities may decide to create environments where users may interact, play, have fun, gain prizes…etc, while getting acquainted with the highlights of the touristic offer. Do you want to have a chat with your friend in a nice place? Take her to the observatory of the Burj Khalifa tower in Dubai (tallest building in the world). You want to show your friend the highlights of your last trip to Tibet? Take her to the Potala Palace. Moving and looking for a kindergarten for your 2 year old? Visit it online first before you talk to them. Experience it. Or perhaps you are hesitating between two restaurants for your anniversary? Visit them both. Go through the menus, see comments from other users… and make up your mind (any reference to Yelp.com type of products is not accidental since Facebook will have to find ways to host existing online properties to become the world of worlds).
I believe there will be several forces pushing for this digital world to happen in Facebook. First and most important, users have shown interest in exploring these digital new worlds when some basic conditions are met. Second, private businesses and professionals are keen on the development of social media since it allows the savviest of them to, at least partially, bypass the need of traditional advertising, and to create closer interaction and engagement with their clients. Third, millions of smart programmers (the first million is there!) would be ready to put their talents to work as the ‘construction workers’. Last, I’d think that Facebook shareholders would be very happy to build this new “Matrix” layer on their existing platform given the vast array of potential types of revenue.

Yes, there is money to be made in the virtual worlds. The newspaper USA Today mentions a study by Frank N. Magid Associates which shows a fast growth in virtual products acquisition. “Biggest spenders? iPhone owners, with 43% of them saying they made virtual goods purchases (up from 28% last year). Next came virtual worlds visitors, 41% of whom say they have bought digital goods."

The real and the digital world have been getting closer

I first had the impression the real and the digital world were getting closer three years ago when I was giving a ride to my youngest son, 11 at the time, and his friend. During the 30 minutes trip they had been talking about digital characters and situations as if they were real. Real names and fictional characters were intertwined.

First it was our music. Then, almost everything became digital. We increasingly interact with our governments in a digital way, as if they were a digital entity. Some people have fallen in love with digital representations of real persons and had real world babies, while others make digital money which they later exchange for real cash. Recently, thieves have stolen digital furniture to obtain real money and the real Finnish police have entered the digital case to find the real life thieves.

Real and virtual worlds have been getting closer and as users and online companies get more acquainted with the possibilities, the convergence of the two worlds will accelerate. On top of the real world Google Earth has built a digital interface to relate to it. Similarly, on top of the real world a layer of digital places will be built to interact with it. Those digital places can be exact replicas when the objective is to show the real world place. In other cases, they will be adaptations or absolutely new realities. Brand new cities like Brasilia, have been at some moment ghost towns waiting to be populated. Similarly, virtual worlds will need to be populated by millions of avatars. Whether for leisure, commercial use, educational purposes, training, pre visualization of real places…etc, they will continue growing until a full blown explosion will come.

Some brands have already created their own worlds, although in a very simplistic way. One can see commercial embryos like MTV’s which have a tendency to languish unable to gain visibility in the real world, the great asset of Facebook. It’s very much like when newspapers only advertise their products in their pages and they only impact their existing readers; the effect is limited. Instead, Facebook’s millions of users could be given the opportunity to interact where they choose, with text, voice and movement. One can only start to imagine the e-commerce possibilities of such a world!

Is the technology ready?

The technology is quite ready to start a new phase of virtual worlds; rather, it is a proper understanding of the users which is needed for the massive development and colonization of these new worlds. A video presented by Blaise Aguera y Arcas in 2007 shows how Seadragon, a company acquired by Microsoft, produces digital renderings based on photos. “Photosynth [the product] itself is a vastly powerful piece of software capable of taking a wide variety of images, analyzing them for similarities, and grafting them together into an interactive three-dimensional space. This seamless patchwork of images can be viewed via multiple angles and magnifications, allowing us to look around corners or "fly" in for a (much) closer look.” I recommend that you see this video to see how ready the technology ‘was’ even three years ago.

Some companies like EveryScape (see image) have been trying to build “engaging, immersive relationships with consumers through three-dimensional, photo-realistic experiences of cities & towns, streets & sidewalks, and building exteriors & interiors…gathering and sharing information on businesses and attractions, entering a store and shopping, checking the menu and reviews of a restaurant”. These types of projects usually represent the courageous input of a visionary founder and the money of the angel investors he convinced, but they lack the serious investment and marketing requirements to create a world. These digital replicas are impressive but once you’ve wandered around and see them, what else is there to do?

For technological prowess one can also mention Google’s Streetview.   You can merge it with Google Maps to walk along any of the multiple cities offered in North America, Western Europe, Japan, Australia…etc. In short, there are many pieces of technology ready to be used (I am purposely ignoring the issue of patents) with a Social Media-Commercial purpose. Actually, the different technologies have been ready for some time but no single relevant project has been the catalyst for them to start building a new world. Yes, the technology is there waiting to recreate the experience.

Will Facebook go Virtual or we will see Virtual Worlds Going Social?

It is possible that Facebook will not be the player to create this new world and that another company will do it. There is a history of corporations being well positioned to achieve something important yet failing to do so. Microsoft has failed at creating a relevant online presence, or a leading mobile platform. Google seems to have some difficulty in generating serious revenues beyond search. YouTube is taking too long to become the movie platform of the world…etc.

Still, Facebook’s core business lies in facilitating interaction among users and the virtual worlds’ objective is somehow aligned with that. Also on the positive side, Facebook is still looking around for real monetization which probably implies that its culture is more flexible and eager than, say, Google’s (Google started an experiment called Lively which had to close when the current financial crisis started).

My Advice to Facebook on Virtual Worlds

From all the past failures, we can extract some initial takeaways:

First, and this is now very obvious, virtual worlds have to focus less on the technical issues and more on the needs of the users. Technology is relevant and should offer a seamless experience, but it is only second to the user experience. Technical people should not be in the driving seat.

People want to communicate and early virtual environments introduced complexity to achieve that basic need. The world became more important than the person, and it somehow interfered with the act of interacting. The next generation of virtual worlds should study every single aspect of the user experience to greatly simplify it. Unless the right interactive experience and tools are supplied, a massive virtual world will not be possible. It has to be made simple, even if the solutions are not very ‘virtual-worldish’. At times a task can be done faster by offering a list than by sending the avatar to look for something in a drawer.

The virtual reality experience in Facebook should include elements of Augmented Reality to get a faster grasp of a situation or a place. AR will become very important for Facebook when trying to facilitate access to all sources of information and data  in the virtual world. Because, let’s be honest, a virtual world can be very boring. Our current real world involves interaction with the physical environment as well as digital experiences. A virtual world should go beyond that, and AR is key to enhancing the virtual experience and infusing it with dynamism.

For a wide user base, anonymity may not be the way to go. Extreme anonymity seems to only attract limited subsets of people. Users want to interact with their online contacts, their existing “friends” on the Net. Otherwise, the experience of entering a new world plus having to do it on your own may be not very compelling; too many unknowns in the equation, at least for the average individual. That said, Facebook may also have to find ways for people to play in an anonymous way. A user may want to be somewhere or to play a game without being seen by others.

It seems that socialization alone may not be enough reason for people to come again and again to a virtual world. Those new citizens have to be kept busy. Boredom is not allowed since killing boredom is one of the reasons to log on to Facebook. The platform not only has to facilitate interaction, but to create new formulas to foster personal exchanges in the new environment.

As a development of the previous point, and as opposed to the current Facebook platform, the role of gaming in a virtual world seems to play a more important role. In fact, Facebook is behaving as if they agree with this point since the only virtual worlds they offer are exclusively for gaming.

Money’s role seems to become more relevant as virtual worlds evolve and increase in complexity. Human interaction involves exchanges and some kind of currency comes in handy at first, and becomes indispensable later. Money will develop a full economy with all its complexities and for it to prosper, Facebook should allow the prices of in-game items to be established according to supply and demand and not based on educated estimates. Money will also add depth and real-ness to the virtual experience, because when digital money is exchanged for real cash and the user can buy a real sandwich, both our physical world and the virtual merge.

Needless to say, users should continue living in a world where living and going about their basic tasks is as free as today.

Seamless integration between the current user experience and a virtual world is a must. Users should feel the experience is not radically different. For instance, the “I like” endorsement should exist in all cases, offering great feedback to businesses. A single landing point would offer friends’ updates in both the traditional and the virtual world. Finding and “teleporting” to meet friends should be made simple.

Creating a new world is a godlike task, a herculean job full of complexities, which should be approached slowly, with a pragmatic spirit. The difficult thing was to create the platform of almost 500-million users. Now there are many interests in our world for Facebook to start creating a new virtual layer. As opposed to other experiences, it has to be very open, facilitating integration with other platforms which will push Facebook forward. As in our real world, there are thousands of ways to create businesses and generate revenue. Facebook should not be too greedy but allow workers and businesses to make a living, because taxes of any kind tend to slow growth.

I have had this desire of imagining the future of Facebook for some time. There are many aspects I have not cove red, but the main body of thought is here. I’d be very pleased if Facebook called me to elaborate a little more on it.

Are Arab Newspapers Doing Enough to Push Their Online Offerings?

2010-05-09T14:04:00-04:00

To answer that question, let us start by saying that not all Arab newspapers exploit an online platform. Some 15% of them just don’t. If we take the Arab countries as a whole, the percentage of revenue coming from online is about 2% (source: Arab Media Outlook, by Dubai Press Club) as opposed to some 13% for US papers and even more for UK papers. The bravest companies in the West have gone even further, like the Scandinavian group Schibsted which claims to have crossed the 50% threshold, mostly due to online classifieds. McClatchy has gone from 11.6% to 16.2% in just one year and the most innovative groups will be approaching the 20% mark in 2010 and 2011.

One could argue that the lack of broadband explains the very low percentage of digital revenues generated by Arab newspapers. In fact, given that domestic broadband penetration in Western Europe and the USA is in the 60-70% range (with the States ranking highest), whilst in Arab countries it is 12% (according to Informa TM), perhaps the 2% share of digital revenues is acceptable. The surprising part is that Qatar, UAE and Bahrain can boast broadband penetration rates above USA and the EU yet still a meager 2% of advertising revenues come from online.
Is it because people in the Arab countries are accustomed to getting news from newspapers and online is just an option for social purposes and entertainment? Not really, since users in Egypt, Lebanon, KSA and UAE use the Internet as much as newspapers as their news source. The reason is probably more complex. First, it has to do with the inertia of advertisers and agencies. Beyond that, the situation is also conditioned by the very products being delivered by editors.

In my conversations with different players in the Arab world, some individuals seem too relaxed because the language barrier plays in their favor and therefore “we have more time”. I have worked in mature and in developing markets with different languages and I am convinced that that reasoning has a certain degree of wishful thinking. The average Arab user has shown during the last few years an incredible ability to surf as the Western one. Many Arab users are constantly exposed to quality products and they expect the same from local brands.

As for the language barrier, in my opinion it provides less protection than generally thought. Some 65% of Arabic speakers prefer to read in Arabic and the figure goes down slightly to 62% in the case of Internet browsing (Nielsen). This means that users feel more and more comfortable surfing in English. Local news brands have to take note and be decisive in pushing their online projects since users may be already getting part of the newspaper content elsewhere.

Newspapers, in any physical form, have a role to fulfill in our societies. The community needs (the best of) them. We all share a responsibility in making sure that they build bridges to their future, and the digital world is part of it. For newspapers to make a successful transition, digital revenues have to increase fast. Moving from 2% to 5% is feasible, because broadband penetration will grow at 38% for the next few years (Value Partners). Reaching 10% and beyond gets harder and requires innovation to reach users who are becoming banner blind. Other formulas have to be used, but that is another topic I will cover in the future.

You are free to use this article in your publication as long as you credit the author Fernando Samaniego

Radical New Live TV Content Needed

2010-04-19T15:08:00-04:00

TV is evolving fast. Is programming following?
While most TV content can be time-shifted, some programs lose their interest when not viewed live. News and sports are obvious examples, as opposed to Titanic or Friends which can be watched years afterwards. The Olympics, the Super Bowl, the FIFA World Cup and the Cricket World Cup are but some good examples of events coveted by TV networks, but they are scarce and expensive. Besides, successful as they are, there is still a part of the population who doesn’t watch them.
The TV industry desperately needs programs to be watched live in order to remain relevant to audiences and advertisers, and that explains why it shells out large amounts of money to third parties for broadcast rights. But despite that, the broadcasting industry doesn’t always control the characteristics of the final product which in some cases do not favor its audience and revenue goals. The alternative to producing its own content to obtain equivalent ratings is way beyond its means. Producing and marketing such a new program would be too costly for any single network.
The very essence of TV
As the medium has become more mature and as other media are eroding into the TV business, broadcasters understand that the very essence of TV, that which makes it excel over all other media, is the ability to generate very large audiences around live events.
If measured by percent of households watching a program, from 2000 the first 12 positions in the US are occupied by sport events (100% football), and sports take 16 out of the first 20 slots. The finale of Friends (2004) and Survivor (2000) take 13th and 14th positions. Two Academy Awards (2000, 2004) are the other exceptions. But, truth be told, this clear dominance of sporting events was not so clear in the past, where series finales (M*A*S*H in 1983, Dallas in 1980, Roots in 1977) or even films (Gone with the Wind, twice in the list with parts I and II in 1976, The Day After, 1983) were high on the listings.
The previous information illustrates that live events have become the best possible weapon for the TV medium to claim its social and commercial role and all indicates that the future will follow suit.
The Super Bowl Event
The undisputed king of sporting events in the history of US television was able to attract 106 million viewers in 2010, forty three years after its first celebration. Since it goes beyond a football match and features serious entertainment, it is usually held in the southern states for better weather (first Sunday of February). It explodes into thousands of Super Bowl private parties where people get together to watch it and have fun. Quite an event! Still, even though some people talk about the Super Bowl ‘Week’, it lasts just one single day, usually the most important from the US audience viewpoint (share 68% in 2010). Just one day.
The Big Four (Fox included) have been alternating ownership of rights for the event, which means that it does not belong to any one broadcaster, that they cannot count on it to build their brands, to build loyalty. They just write a fat check and try to maximize the expensive event in a short time and with a series of inflexible limitations. To make things worse, the cost of rights is increasing.
Is there an Alternative?
Creating a new large event to obtain 50%-type share is not a light issue. In the case of the Super Bowl, it relies on decades of tradition, on the NFL league, and on the traction that the sport has in the United States thanks to high school, college and professional football. In other sporting events the situation is similar; a strong organization has put together a powerful show and the broadcasting rights are sold to the networks which struggle to recoup their investments.
What is the alternative, apart from ignoring those large events? To build one would not be a natural step since it’s not in the broadcasters‘ DNA to do it and because producing and launching a new large event could be prohibitively expensive. Still, the need to attract huge audiences to watch live programming is there and, if anything, its importance is increasing as other TV products lose relevance.
Sharing the Burden of New Live Events
Personally, I do not consider it impossible that a channel or an association of networks from different countries where one channel leads the project will try to put together a new product to replicate the effect of large sporting events. While the benefits could be huge, the risks are big too, but sharing them would help because owning a successful event and exploiting it in “a pure TV way” would represent tremendous traction for the winner, an almost insurmountable competitive advantage. Difficult as it may be, I estimate that international cooperation would be required, since it could spark interest in more than one single market. Beyond that, some kind of external financial involvement may also be required. As financial products are becoming more specialized, a tool for hedging this type of 'hit or miss' investment could be created.
Last, and in order to obtain some extra public recognition, the investment could be open to small private investors like you and I along the lines of ‘box office trading’ being approved by the Commodity Futures Trading Commission by which a market for trading on predicted box office receipts Trend Exchange. Perhaps that could be combined with a simple online investment tool by which the project is accessible to individuals who would never invest in something as complicated for them as a Futures Market. After all, the objective is to create notoriety through any possible means which makes the project known to possible audiences. Let’s be honest, who hasn’t dreamt of getting the free promotion Apple products receive?
Concepts about the Program
Such an event would probably extend over a series of weeks, during which the audience warms up and grows virally to gain the critical mass required for it to be an absolute ratings and revenue success. I am far from being an expert in TV programming but when I think about it I imagine an event based on proven patterns of war-like dynamics, as in sports: one person, or one team, against others, all in real-time and where the rewards are big. Well known/promoted players struggle to be the winners. Their effort would be brought closer to the audience thanks to lots of camera close-ups, and to new indicators up to now unavailable to sporting events: heart-rate monitoring, chemical stress markers as well as any other physical or psychological indicators, constantly compared to the adversaries’. But, to be honest, my vision of the program is irrelevant. What really counts here is that a radical new type of content may be on the verge of creation.
Conclusion
TV programming has to come up with radical new ideas: decreasing audiences, time-shifting, the desire of advertisers to reach large amounts of consumers simultaneously and perhaps in a more meaningful way...etc. Broadcasters have to go back to the very essence of the TV experience, the relationship with the viewers in real time (to keep it simple I have overlooked the mobile and online implications).
Something is going to happen, and it will not be 15 years from now, when the networks could be too small to do it. Big Brother or American Idol were great formats, but innovation has to go on. Mix the introspection of Big Brother with the passion of sports, add new technical features and we may have a brand new type of programs, involving a new financial architecture at the service of radically more ambitious goals. They will be shown live in several markets and the audience will be able to see the (outside) performance while almost getting inside the performer.
In the battle for viewers, one player may decide to up the ante and explore radical new ways of attracting large audiences.
You are free to use this article in your publication as long as you credit the author Fernando Samaniego

Monetization Via Content. Letter to an Editor.

2010-04-18T14:55:00-04:00

We each receive so many inputs regarding our businesses that we often fall prey to ‘paralysis by analysis'. We seem to forget that “the optimum is the enemy of the good”; and so we procrastinate in search of the perfect strategy, the silver bullet.
Those were at least my thoughts two weeks ago after visiting a client; I had been telling him countless times that he seriously needed to start extracting new revenues from his current news activity. I had sent him enough material to write a dissertation, and yet …still he was hesitant to act.
During my long flight home I thought that perhaps it was my fault since I could have been less sophisticated, less detailed; and in the plane I started to write a document which I sent him the next morning. It was a pleasant surprise when two days later he called and instead of asking for more information, said that the next time we meet his team is going to present me some initiatives to create and monetize content.
Here is the document to my client, free of sensitive references.

Dear Mr. X,
We both know that your news operation has entered into a vicious circle which is affecting your bottom line. Although the general population consumes more and more news, your company, as a news “manufacturer” is moving away from satisfying those needs by slashing editorial budgets to keep the company in the black. Those cuts are affecting your capability to publish original content (i.e. content which you obtain with your own team and for which you have exclusive rights) and subsequently advertisers seem to find your newspaper less appealing, less relevant to your readers, and to their clients. As we have seen, in the short term online will not solve your problem (“trading dollars for nickels”). What is worse, you will not be able to charge for content online in the near future, because your content is becoming a commodity which could be found for free in other sources.
Honestly, my friend, there isn’t a simple way out, a secret blueprint with all the answers. For the last two months we have seen many different strategies and examples, but now is the time to start taking little steps and exploring new ways for which I have put together an oversimplified road map. During my next visit we could work on specific actions and timelines to execute them.
Cost cutting
As seen before, you really have to execute serious cost cutting in non-sensitive areas. I know this is a very sensitive topic, but this point is an absolute must in order to move on to more strategic actions. If you don’t do it, you will choke your company. Your 10-15% cost savings lie in:
(I am saving my readers the details of cuts in that company; they have to do with administration, merging distribution outside the city, automating some tasks, moving some journalists away from working in international and magazine content…etc)
Create more locally relevant original content
I understand your reasons for wanting to charge for content on your website, but we have seen examples of failures. You can only charge for whatever content belongs to you (for now, let it be true). Audiences have been getting news for free for too long. Non-original news is a commodity and no one will pay for that type of merchandise.
You have to move resources away from the international section and from ‘general content’ (not directly related to your market) into content areas at which you can excel and become the reference to other media and to consumers. During these past weeks we have seen examples and formulas of positive reinforcement of your brand via creation of local value added content. Go over those cases with your team and choose a couple of them to start with ASAP. I will help you with the implementation, but the drive has to come from your team. Convince Scot since he’s the natural team leader.
Every time I travel to your city I hear complaints from your people, the taxi drivers, the hotel staff…that the river is polluted. You have a great topic right there. You could pay a national lab (for credibility) to analyze the water along its travel through the province. Six checkpoints may suffice. Present it in a double page, with good infographics. Include “human activities” along the river. That work will be the talk of the town and since you will use outside scientific analysis you will not end up dodging the unhappy readers’ bullets. This is just but one example of the “watchdog” attitude your daily always showed and that gave you the punch your advertisers miss. The population should know that your paper is there, as always, ready to serve them; and from original content you will reinforce your brand.
I will be very happy to go over your “original content” proposals since this is an issue so relevant to you (I am aware that the example above is rather dramatic, but at this point we need a quick win to move on to the next points of this road map).
Promote that content
You have many ways to promote your content. Your special agreements with the local radio network may come in handy now and that may be also beneficial to the radio station. You’ll be the talk of town. The next day the local free paper will have to mention your report. So will the local TV. You can even provide them with the special advantage of interviewing the journalists who led the report. In the sequence of events, first send an SMS as an appetizer, give some highlights online and then bring it to the cover of the paper the next morning. Generate reactions online and bring them to the paper the next day. Keep the topic alive for 3 days. By then, all media will have promoted your brand and most citizens will have been hearing about your work (good eternal journalism!). Now that your brand has been visible and associated to positive community involvement, it’s the time to promote your brand as an excellent advertising vehicle in order to monetize your efforts in the content area.
Personally visit three clients, after a couple of brand successes.
You have two objectives: First, show the media impact of your actions. Do it visually. Quantify as much as possible. Sell them brand credibility. It will motivate you, your Sales Manager and your sales force. Be open to new ad formats. Do not sell tariff, sell coverage, audiences. Second, among those three clients you should detect one that has a special need or is ready to try something different. Offer him a Comprehensive Advertising Solution involving the newspaper, the internet, your organization’s writing skills, and your call center. If the client is launching a new upscale car, offer him a multi-week campaign in both media, where potential customers can schedule a test drive. Add some meaningful way for two couples to each receive a free week-end break during which they will be testing the car along those beautiful mountain roads 100 km away from the city. Your company can offer a micro-site with photos of the trips, the car and the drivers, plus some more textual comments to make it more readable and warmer. After all, your newspaper is expert at creating content and if you put those skills at the service of the client, he will love it.
Take this as an example of a comprehensive campaign which brings together off and online, plus the story telling ability of your company. Be creative: if the client is pushing a drink, add a free magazine that you distribute freely in bars and pubs. Later, you can make it more complex and include mobile. For the time being, just commit yourself to do it once, even if you barely break even. Then, you will have a beautiful showcase to promote your services among other clients.
I know I am proposing simple steps which will not solve all of your problems, but we need to take incremental steps since from those new experiences your team will learn to take the next ones. Besides, cost cutting is a painful process and if you only cut trees and don’t plant new ones, the organization spirit will decay. (end of letter)

That was the letter I sent. It was the first time I addressed my client with something other than Excel pages and Power Point presentations, but it appears to have been effective. Those who take a new step get a better view of the following ones.
You are free to use this article in your publication as long as you credit the author Fernando Samaniego

Studios and Cable Operators Launch Joint Project

2010-03-29T15:18:07-04:00

"The Video Store Just Moved In," according to an advertising campaign launched in March by some 15 media companies, including studios and cable operators who are putting $30 million on the table as initial marketing investment. This is one of those pieces of news one can easily downplay, but the fact is that it constitutes a reference for content industries in general. To get there, many players had to agree on many issues in order to offer consumers a simple aggregated offer to watch videos from the comfort of their own living rooms.
For several years, studios had expanded video on demand (VOD) offerings without risking initiatives which could impact solid DVD retail partners like Best Buy and Wal-Mart, but the growth of VOD seemed unstoppable. The studios have learned from the music industry: as if to reinforce the new project, the same week Blockbuster announced that a “fall into bankruptcy could be inevitable”.
Learning from Music
Studios seem to have noticed what has happened to the music industry, plagued by piracy and one in which digital companies are imposing the rules, perhaps due to the larger, and increasing, fragmentation on the part of the music right owners.
Just as consumers of music display brand loyalty for their favorite artists, and not the music label, so it is for video: studios know that customers care about the films as opposed to the studios behind them. Brand, in this case, has to do more with the movies than with studios, which has facilitated the integration of rival players in one project. No less important, each movie is a differentiated entity, it’s unique, even if it’s a remake.
Mutatus mutandis, the Movies On Demand project highlights the current situation of the music industry where hundreds of digital stores and hundreds of song owners have been unable to offer a simple, aggregated offer to their customers. In this case it has been an outsider who has put all the pieces together and is now writing the rules: Apple through iTunes.
Lessons for Newspapers
Movies and cable operators have joined ranks while music right owners still have a long way to go to offer a comprehensive platform to customers, (the exception being Sony and Universal partnering with YouTube in Vevo, a project which still needs to take off). In the case of newspapers an aggregation a la Movies On Demand is unthinkable because of their territorial characteristics. Still, as almost any time something good happens in the content industries, some lessons can be learned.
News companies have to strive to create unique content, since it’s that uniqueness which best reinforces their differential market position. Agencies, press conferences, official communiqués add little or no value to the brand of a newspaper. Illustrating, explaining, relating events and data, charting, digesting the flows of agency information…etc, do add value. As JasonFried and David Heinemeier Hansson say in their book Rework, “decommoditize your product”.
Hiring good writers, planning the day and the week, filtering the flow of attention as expressed in social media, paying attention to technology but not getting distracted by it, focusing on the readers, excelling at using marketing tools to best reach audiences, deciding how to best express your community watchdog vocation, relating in your media to your audiences, keeping the whole operation fresh...is the only way to build a long lasting brand for the benefit of the audience, the shareholders, the workers and the advertisers.
You are free to use this article in your publication as long as you credit the author Fernando Samaniego

Newspapers and TVs Could Learn from the Music and Movie Industries (and Part 2)

2010-03-04T06:09:00-04:00

On free content
There is a similarity between the music industry and newspapers in regard to their content. Songs in their basic form are considered by many individuals as free merchandise, the purpose of which is to attract attention to the artist. This belief is reinforced by the artists themselves, by those who are generally less traditional and more innovative in their approach. Take Lil Wayne, ho received the Grammy’s Best Rap Album, for example. He built his fan base by freely giving hours and hours of his music away. The surprise is that, in spite of that, his ‘Tha Carter III’ album was the top-selling album of 2008. In this case, giving away content and being the top seller were not alternative strategies. I am sure his success will inspire others.
Similarly, I believe newspapers will have to attract their readers/users by giving away ‘good’ content while charging for other content that the audience perceives both costs the company and is useful for their lives or their small businesses. Basic news (at least the commodity part of it) will remain free despite all the buzz, while special reports and differential content/services will follow a different track. Fighting the perception of the users is always a risky mission. After all, as Tony Wadsworth, former head of EMI for a decade, says ‘The development of technology has meant music” (you can substitute by ‘news’) “is consumed in more places in more ways than ever before – that is a great thing...; the future business model of this industry might not be based on transactional music sales for much longer. In the space of a year, the proportion of income derived from other sources – live gigs, merchandising, advertising, digital licensing, broadcast – has grown from 11.4% of total revenues in 2007 to 18% in 2008”. To continue with the parallelism, newspapers may have to obtain new sources of income by fulfilling new tasks in their communities.
Cherry Picking
Another similarity between music and news lies in the fact that in the past you had to purchase the whole product even if you just wanted a single song in the CD or just the classifieds section of the newspaper. In the digital world you can choose to acquire a single song and not pay for the unsolicited merchandise. One study says that iTunes-like platforms have cost the music industry more than piracy! We may not like it, we can even say that the user is losing the opportunity to discover unexpected jewels in the package…but the fact is that unbundling is the increasingly preferred option and fighting it is useless. As music is consumed digitally, mixed bundles may be losing their appeal.
Likewise, newspapers may end up charging for specific pieces of content when it’s clearly justified in the eyes of the user. Deciding when to charge or not requires a lot of trial and error as well as sufficient internal expertise in analyzing that information.
“Publishers for the most part have already begun preparing as if this process [unbundling] is irreversible. They are implementing new ways to replace revenues that are lost when customers no longer buy the whole ‘package’. This new repackaging can take many forms. Subscriptions to popular online journals, such as the New England Journal of Medicine, increasingly offer unique features, including email alerts, user communities, access to unique data sets, and multimedia content designed to make the value proposition of buying the “whole package” greater than the sum of the parts.” Nothing to add.
Conclusion
The music industry has taken too long to learn new tricks and has lost big revenues in the process. Newspapers can learn from the ability of the most adapted labels how to diversify revenues, to relate differently with their environment and how to reach audiences less with recorded content and more with live gigs. Faced with a transformation of this magnitude, change has to affect all and every single area of the company (yes, even accounting) and the profile of the professionals has to evolve. Changes should not be done in one day, but on the other hand, wasting time with excuses is not an option. As I said in a previous blog, save money in legacy activities and invest in exploring new avenues of income.
From the movie studios, newspapers and conventional TV channels should imitate their ability to move (relatively) fast while not discarding any possible way of reaching clients. After all, all legacy content industries share the same basic challenges and the logic of any responses to them.
You are free to use this article in your publication as long as you credit the author Fernando Samaniego

Newspapers and TVs Could Learn from the Music and Movie Industries (Part 1)

2010-03-02T04:50:11-04:00

One decade at a time
One could argue that the perfect storm now affecting the Media and Entertainment industries started around 1982, when the first music CD was sold. But it was in 1985 that CD began to gain popularity in the larger popular and rock music markets (Dire Straits’ album Brothers in Arms was the first one to sell a million copies). At that moment, consumer content became digital. Later on, the compressing capabilities of MP3 and the extension of the internet greatly facilitated file sharing.
As I wrote in a previous post, it was some 10 years later that another digital birth took place that would soon affect the placid businesses of established newspapers. It was Craigslist and its ability to volatize classifieds’ revenue. Lastly, 10 years later, a pre Google YouTube was launched and the lives of incumbent TV channels first, and the film industry later, began simmering. For the last 20-30 years, usually during the middle of each new decade, a new phenomenon has been born, destined to uproot the functioning of complete industries. As a matter of curiosity, does anybody have an idea of what 2015 may bring to us?
First the music industry, then newspapers and magazines, and then finally TVs and movies, they all are struggling to cope with the radical changes. The slowest one to react was the music industry, perhaps because it was the first casualty (forgive me for using the incumbent’s terminology, not the customers’) and there were no examples of how deep, and redefining for the whole industry, the changes brought about by the new digital innovations would be. That the music industry has lost a full decade is evident since its response to these digital challenges has coincided in time with the newspapers’. TV and film industries, casualties of the third wave, may be reacting a little faster.
The Film Industry, the Last to Feel the Pinch

From observing the film industry, newspapers can learn the determination to reach audiences however the consumer wants it, in almost any possible format... Even though things are just starting, we can legally get films online, - rented, purchased or free with advertising, - via multiple devices. Hundreds of web sites offer movies (Netflix, iTunes, Hulu, Babelgum, Joos t, The Auteurs…and long etc). Other established players in the digital arena have also become digital retailers: Xbox Live and PlayStation Store, Amazon Video on Demand...etc. You can even watch a movie on your smart phone. Of course, you can still buy or rent DVDs and watch films thanks to the growing VOD offer of cable and digital platform operators. Lastly, you can enjoy a film in the most traditional outlet of the business, movie theaters.
Digital delivery has been growing SO FAST that film studios have identified 250 digital formats. Yes, two hundred and fifty! And now they are trying to reduce costs by agreeing on an interoperable digital master format (IMF) which will also help promote their digital business. Are studios moving fast enough? Perhaps the answer is no, but in any case they are moving faster than the music industry and newspapers did. Now, in how many formats are papers reaching their readers and delivering their content? Are they expanding their new media reach at a proper speed? Whatever the answer, newsrooms have to develop their own open technical architecture and be ready to deliver in more vehicles (unfortunately, sales departments are frequently the laggards and end up delaying the whole experiment, but this is another topic).
Lessons from the music industry
On one hand, any internet novice can download songs and bypass the incumbents’ structure to collect royalties. To add insult to injury, the record industry has had to face the stampede of brand-name artists moving away from them (remember Madonna leaving the Warner for Live Nation, a live-events and concert promotion company?) Many others have followed. In their quest for a proper set of business answers, labels are gathering experience with paid downloads, ad-supported streaming, subscription services, ad-supported and ad-integrated P2P download services…etc. But perhaps most relevant is the music industry’s fierce determination to redefine its role and its artists while at the same time creating links with audiences.
In the past, the record industry was strategically placed in between audiences and artists and supposedly had the talent and experience to decide in the name of the audience which songs/artists had the quality to be recorded. That paradigm has changed. Many artists are flying solo. Instead of focusing on getting the attention of the labels’ execs in order to be chosen to record songs and sell CDs, artists are now getting more focused on getting the attention of their potential fans in order to be able to sell tickets to their shows, to license songs…etc. Multiple companies and web sites have started to “provide online music business lessons, exclusive video interviews and advice, career and business planning tools and thousands of hand-picked resources designed to help you achieve success in the new music industry” (about us, Music Power Network).

Closer to the audience
The incumbents have understood that revenue from recorded music will continue decreasing and that their activity cannot be limited to seeking out the best singers and bands to sign. Instead, they have to learn new skills, such as mentoring artists to develop their performing style, and hone their public skills to better connect with their potential audiences. They are becoming business advisors, career planners as well as permanent managers of organized tours and all kinds of live performances, which represent the fastest growing source of income in the industry.
The exhibitionist and theatrical Lady Gaga has learned to be closer to her fan base and be coherent in all her public appearances. Her dominance in the charts has proven her right. When she received five Grammy Nominations she did not thank anyone other than her “Little Monsters”, aka her fan base. On the scenario, as in any digital format, she has established a solid link with her audience. To them, she offered her own DNA (some follicles) in her GaGa Fame Monster Bundle, as well as a collectible puzzle, pullout posters, a paper doll collection and a personal note for USD115.
Other artists are finding their own unorthodox methods of reaching audiences’ attention and pockets.
Newspapers need to address new ways of getting to their audiences and interacting with them. From the early formula of posting a comment to a piece of news, to the way the most advanced players are trying to harness the traffic and commercial potential of local bloggers, there is an array of possibilities.
As I have written before, the main strategic areas in a newspaper or a TV are brand/image and content. From each one of those two areas they have to persevere in reading the consumer’s interest. The old journalism days of waiting for agencies’ content is (partially) over. Now, the journalist’s network, his/her roots in the community and ability to scan what the community is interested in, are required skills to add value and differentiate the final product from other local players. Following readers’ interest, via marketing tools, as well as discovering what interests them via social web sites, is a new skill media companies have to turn into a habit.  (End of Part 1)
You are free to use this article in your publication as long as you credit the author Fernando Samaniego

Newspapers and Televisions should go the Low Cost Way

2010-02-23T02:49:40-04:00

One shouldn’t deceive oneself into thinking that we are simply in the middle of a crisis caused by the irrational behavior of our financial institutions since there may be other causes. Even though Asia has been bringing costs down for decades, many countries and industries have ignored the potential threat of these lower costs and have chose instead to maintain their cost structures. The generalizations of internet and broadband have extended the competitiveness of the new players (“the world is flat,” according to Thomas Friedman). Not to be mistaken, this financial crisis is a cause as well as a catalyst of the current turmoil brought about by this ‘Asian price’ and this new local and world competition facilitated by broadband.
Many companies have understood this new scenario. Airlines, for one, may offer extremely low ticket prices and absolutely no-frills, but at the same time they may charge for extras like food and drink, seat allocation, baggage...etc. The increasing penetration of low cost and no-frills products and services has carved a position in the mind of consumers and now marketers know very well that people frequently trade up and trade down; they can go for rock bottom prices (below the consumer’s standard of income and living) in order to afford small luxuries, which may appear beyond their reach. By shopping in discount supermarkets, a couple may afford a long haul vacation, no frills, in their dream destination.
One cannot downplay the significant effect that these economic and societal changes are having on our audiences (readers, spectators, users). The bad news is that they now expect basic merchandise to be free, but at the same time they are learning to pay, albeit minimally, for new content. Changes like these have permanent effects in our businesses.
Many newspapers and TV stations are taking too long to adapt their legacy cost structure to the new reality and to get rid of the unnecessary dead weight and the internal obstacles which prevent them from making their companies more nimble. The basic operation has to be a very lean one, enough to put forward the basic offer to the audience. Too many examples are showing us that if that effort is not made constantly and in an orderly way it will have to be done traumatically. Media incumbents should save lots of money on the repetitive tasks of their current operation in order to achieve three basic purposes:
First, to maintain profitability and operations while the company moves forward. Second, these legacy media need those savings to project themselves into the future, in order to explore and develop new media opportunities to further increase their reach. Lastly, parts of those savings have to be addressed at investing in those activities which create brand and differentiate them from the rest. I am referring to investigative journalism, special reports, event creation, exploiting local databases…etc. That is, developing their own content which equals the frills the airlines are able to charge and which makes the difference for audiences and advertisers. It also may open new avenues of profitability. After all, is there anything as vital for a medium as (differential) content and marketing (brand)?
There is no way to cross successfully into the future if cost cutting in legacy activities is not an active policy implemented constantly by newspapers and television companies. Proper cost cutting is not a reactive decision; it’s a fundamental part of our future building strategy. Do not be apologetic about it. (Just don’t cut corners in brand image and differential content creation).
Newspapers and TV stations are taking a long time to adapt to this new situation, as if time wasn’t an issue.”
You are free to use this article in your publication as long as you credit the author Fernando Samaniego.

Newspapers's Potential in Local Database Management (and 2)

2010-01-20T03:15:00-04:00

Following Rob Curley’s Trail
When offering communities results based on databases from the local market, I have always thought Rob Curley has led the way and has often been imitated by others. The following examples, taken from newspapers where he has worked, may have not been developed by him or his team directly, but I’m sure his vision has had a strong influence.
While working in Kansas for the Lawrence Journal he developed the Kusports site and reinforced the use of statistics as content but also as a complement to regular information. He always found the right way to place unexpected data in the middle of information, be it driving tickets, weather…etc. And the audience rewarded him with a big increase in traffic, and revenues. No local database was foreign to him: births, weddings, deaths, schedules of anything…etc. Sports and Arts and Entertainment info was always stored as elements of an ever growing local database to be permanently reused. Even though some years went by, the Ljworld.com site still retains some of that philosophy.
Later in Naples, Florida Rob addressed a more mature and affluent audience in the site Naplesnews by offering any info relevant to a community frequently interested in the weather and the water (Naples is on the West Florida coast): rainfall, air and water temperature, tides…etc. Current as well as historical data were offered directly by the site or by linking to the sources. Presented in a user friendly way, boating, golfing, fishing or just walking became a little easier. Naplesnews received an Eppy Award for Best Internet News Service in 2006. In that same year his new vision on covering high school sports in Bonitanews received a NAA Digital Edge award for "Most Innovative Multimedia Storytelling".
From Naples, Rob moved to a much larger organization, The Washington Post, and left two years later probably “because I wasn't the best fit with the organization”. I am sure his vision on local matters had an influence beyond the specific projects he managed.
The national and international roles of the Post may hide to many its local flavor. On one hand there is the local section of the paper which includes a plethora of information and some resources such as dog parks, farmers market… as well as links to full-fledged projects like the Going Out Guide which features an Events Calendar in which all the information, including text for reviews, has been databased for easier repurposing.
On the other hand, the Local Explorer is more than just a map. It also includes facts and figures, local news, classifieds and upcoming events that will help take the user further inside the community. In fact it’s one of those blueprint projects one should follow when dealing with local communities. A complete array of information is arranged in four categories (Places in the Area, Recent Home Sales, Schools, Crime) welcomes the users upon giving their exact location. As a complementary new way of exploiting its arsenal of data the Post has created products like this which organize business information in many different ways (e.g. revenues by sector, largest employers, new companies…frequently mapped for easier usability).
I guess the Post wants to take a definitive step in the local-hyperlocal direction and in spite of all the difficulties for a newspaper of its category, we may see new developments happening. Perhaps the final result will/should include more user participation. For comparative purposes I recommend the Cincinavigator by Cincinnati.com.

Databases, geocoded information, all enhanced with content from the editor and from the users seems to be the four legged formula some editors are finding appropriate to address their local challenges. I foresee that we will see more sophisticated developments within this same content architecture.
EveryBlock.com, Yelp, Google (yes, always Google)

“In dense, bustling cities like Chicago, New York and San Francisco, the number of daily media reports, government proceedings and local Internet conversations is staggering. Every day, a wealth of local information is created — officials inspect restaurants, journalists cover fires and Web users post photographs — but who has time to sort through all of that?” This is the spirit of local database management, and that sentence doesn’t belong to me but to EveryBlock, that aims at solving that problem. “We aim to collect all of the news and civic goings-on that have happened recently in your city, and make it simple for you to keep track of news in particular areas. We’re a geographic filter — a 'news feed' for your neighborhood, or, yes, even your block”.
I should add that they are only a team of six people working from Chicago led by Adrian Holovaty, a journalist and Web developer who worked previously as editor of editorial innovations at the Post and developed chicagocrime.org. Given the small size of the team and the tremendous task of covering 15 cities, it doesn’t come as a surprise that the info is a little “dry” or lacks the relevancy that a newspaper could add. But it’s a matter of time before the project gets sufficient funds (MSNBC has bought EveryBlock and additional funding and resources will be provided). Lastly, I find useful their definition of local data: “Civic information — building permits, crimes, restaurant inspections and more; News articles and blog entries — major newspapers, community weeklies, TV and radio news stations, local specialty publications and local blogs; Fun from across the Web — local photos posted to the Flickr photo-sharing site, user reviews of local businesses on Yelp, lost and found postings from Craigslist and more”.
The more a database is complemented and enhanced by users the better it is. In the case of Yelp (a contraction of Yellow Pages) the extensive database has been supposedly fully created by the users, which makes it a different animal to the former examples. What is relevant, though, is that that a business supported exclusively by local advertising was recently the acquisition object of Google at a price north of half a billion dollars. The local editors can breathe at ease because Yelp has rejected the offer, but the sole idea of giant Google having access to the local markets with a local platform like Yelp seems scary to me. By the way, The Weekly Yelp is available in 28 cities with the latest business openings & other happenings and constitutes a first (minor) step to creating a media on local events.
As a summary, in their alternatives for growth the most advanced local editors are learning to use databases to uncover local stories, to enhance news, to relate to their users, to attract new audiences and, not least, to have access to new sources of revenues.
You are free to use this article in your publication as long as you credit the author Fernando Samaniego.

Newspapers’ Potential in Local Database Management (Part 1)

2010-01-14T02:49:00-04:00

This post highlights the importance that managing data has for newspapers, and local broadcasters, as they struggle to extend their roots in the community. As local media need to maintain digital growth they will have to go beyond news delivery into satisfying further needs of the markets they serve if they want to reach new sources of traffic and revenues. In an environment more story-oriented and not so comfortable with computers, company execs need to plan on mastering the skills to extract useful content from information hidden in local databases.
Importance of managing data among top internet players
While newspaper editors and televisions rely basically on developing or acquiring good content, the Top Ten websites in the world have reached their position mostly by organizing data, i.e. other people’s work. Google, Facebook, YouTube, Blogger.com are websites which organize extremely well third parties’ content. Yahoo! (which appears twice in the list with its Japanese URL) receives big traffic from its search, both from email and from the many services it offers (news aggregator, maps, video sharing, social media web sites). Wikipedia is somehow the exception since it relies on contributions written expressly for the site by its users.
Two players, Baidu and MSN deserve special attention from the TV/papers viewpoint. The Chinese Baidu.com started in 2000 as a generic search engine and now is possibly the most comprehensive website in the world. It includes specialized search capabilities for government sources, postal codes, educational, legal, patent, country statistics, as well as services such as antivirus and safety, maps, dictionary, translation, online community…etc. It also provides links to news sources, a music service with links to top songs for easy downloading, an encyclopedia, an entertainment channel, a finance website in collaboration…etc. Finally, it even offers online shopping for businesses to sell their products and a TV/movies site to watch and download content.

Microsoft and its recently redesigned msn.com relies on plenty of links and content from other sources: MSNBC, of course, as well as Hearst, Fox sports, Hulu, PC World…etc, and is learning to open up to social connectivity giants like Twitter or Facebook. Msn.com does a remarkable job at aggregating content from different sources while pushing its own corporate interests, be it its operating system software, Bing, MSNBC, Xbox360…etc.
One could think that these players are following the steps of the likes of AOL, Terra, Lycos and other horizontal portals but the truth is that these giants (Google, Facebook, Yahoo…) want to retain users longer by offering more services while concentrating less on creating content and more on managing third parties’ content. My point is that local papers and broadcasters will be forced to master those same skills to extend their local influence. The sooner they do it and the more holistic their approach, the better.
Database editors
First they have to fight the widespread belief that because of Google, the researcher is no longer necessary. In reality, the opposite is true. Because of Google, researchers— a data base editor—will be of critical importance. Randy Covington, Head of IFRA-Newsplex, was talking to me the other day about Hyde Post, the editor of The Atlanta Journal-Constitution’s website who argues that a successful media website should be built on four pillars: -Speed , -Community, -Visual energy, -Utility. Utility is an obvious next step for media organizations in their web strategy and refers to a site that wants to be helpful and practical for its audience. Very often users look for sites in order to obtain information they need on some aspect of their lives,-- for example, how do test scores of their children’s school compare with those elsewhere—and a newspaper or broadcast website would be a logical place to find out.
As search engines have promised to organize the vast content on the internet, communities need to organize and make sense of the increasing sources of local information, and newspapers are well positioned to do that. They have local content, local businesses with local advertisers, local journalists and contributors, a local sales force, some local database information…and are in a privileged position to reap the benefits of that local connection. Managing local database content lies in the no man’s land between very large organizations and the small local agents such as bloggers and smaller websites. One may be unable to have access to many of the databases and/or extract their usefulness while the latter lacks the financial resources, at least for a certain time. It is easier for newspapers well rooted in their communities and with well connected organizations to have access to official and private databases.
The Chief Editor and his/her direct team may have to get involved in the first efforts to gain access to that information while the organization learns to do it. To facilitate this first step, the IRE, Investigative Reporters and Editors, trains journalists, even beyond the US, in “using spreadsheets and/or databases for better watchdog stories, obtaining data and public records and making sense of them, storyboarding, planning, and managing investigative stories and projects, building an effective intranet of public records to strengthen your newsroom’s reporting on deadline…etc”. It’s important to have examples to learn the tricks of the new activity.
In a newsroom environment rather experienced at building linear stories and which at the same time is not very computer savvy, getting the skills needed to use data content has to be a planned effort from top execs. Ideally a couple of journalists with that expertise could be brought on board. Alternatively a programmer can be hired and trained to search database content that could enhance regular newsroom output and be used as a new source of content. Some journals have done it and if the person has an open mind, the result can be enlightening. Diversity is hard to manage but very rewarding.
Examples of database usage
Chicagocrime was one of the best and earliest examples of data gathering and presentation (now it's contained in everyblock, recently acquired by MSNBC). Anybody interested in renting or buying a house, starting a business, choosing a school or just visiting the city, as well as the security officers and local politicians became instant users. There are many other examples the local newspaper can provide to answer the questions and needs of its audience. What new businesses have been started in the city, what new permits have been granted to build houses or buildings in general, what are the latest real estate deals, official house valuations, or general property values, home foreclosures, open houses…are clearly types of content that could attract attention immediately, especially if arranged by neighborhood. Later, if the newspaper allows free access to the information, local talent will come up with ideas to complement that information. By studying the trends, links, deviations from national or international patterns,we may shed light on our community in a unique and exclusive way.
Let me use a non local example on presenting a piece of news in a different way, starting from pure data. I refer to the article published by The New York Times on “Jackson’s Billboard Rankings Over Time”, which is just a series of interactive graphs which prove how the King of Pop had really died 20 years ago.

Other cases could attract more consumer attention, but databases are often accessible from the internet but hidden under non intuitive names, or it is hard to make sense out of them, or they are not conceived to be user friendly…etc. Rankings of hospitals and schools, student examination public records, education levels, driving tickets, air and noise pollution, police activity, accidents, fires, traffic incidences…etc, they all are useful. Lastly, there is the need for databases which do not currently exist but which audiences would appreciate if their newspaper put together. A map of gas prices in the region (see screen shot from gaspricewatch.com) or a ranking of supermarket prices based on a small basket of products may facilitate the lives of families on a tight budget who undoubtedly will appreciate the help of “their” newspaper (there may be local projects offering that content, often ready to establish an alliance). In these cases the information gathering may be in the form of a wiki, something the younger audience may appreciate. In any case, those price-maps have to be open to permanent inputs from users.

In all the above cases it’s important that the information is geolocated as precisely as possible if it is to unveil relevant information as well as trends and correlations between apparently unrelated series of data. The community will literally see how their neighborhood follows or deviates from national patterns, or how the official version fits their reality. Those trends and patterns may be discovered by the newsroom and/or by the users themselves. (End of Part 1)
You are free to use this article in your publication as long as you credit the author Fernando Samaniego.

Television Could Learn from Newspapers when Going Online (and 6)

2009-12-16T09:15:01-04:00

To conclude my series of posts on lessons broadcasters could learn from newspapers, I present some comments regarding the human factor.

Online TV skills from outside required
TV broadcasters need a new breed of execs, of content personnel, of technicians, of sales persons…etc. Training internal resources will only work as long as there is a critical mass of sharp online personnel aboard. This means that talent and skills will have to come from outside, especially during the early stages. Later on, the usual flow of TV hires will join the company with that ‘online module’ already built in. One cannot change the taste of a dish without adding some new ingredients. The new hires will also help to mold the TV culture to the new times and needs.
Hire online experts from the best online newspapers teams
Speaking of online skills, web journalists have dealt for many years with many of the issues now affecting broadcasters. They have experience with the problems of traditional media going online, with its cultural, technical and content challenges, plus they know the difficulty that legacy and new platforms have interacting with each other. Online journalists have a good understanding of video challenges and may have even experimented with the concept of online TV. Those managers boast years of practice in handling complex digital operations with massive traffic, especially when compared to the number of unique users of almost any broadcaster. They understand what drives user behavior and can integrate online trends, such as social media, into the content proposition. Lastly, their marketers are experts in using statistical, competitor analysis and general market intelligence tools to gain insight into their operation and that of their competitors. Among their weaknesses, few have relevant experience with DRM (Digital Rights Management). In sum, do not disregard their experience because, at least to a certain degree, they have done this trip before.
Do not try “to own” your online TV team during the early stages
Do not suffocate your team by imposing the dominant TV culture. The existing culture made your channel successful, but it has to be transformed to succeed in the new digital challenges. A top newspaper exec once told me he hired someone just because he wore a gold ring in his ear. This is just an anecdote to illustrate that things will be different in an online environment. Let them act, relate, meet and work as they please, without other preconceptions other than rigorous delivery. Once the team spirit is built, you will have to bring both cultures closer. That said, the new media manager should report to the top exec and, in my opinion, be a member of the Steering Committee ASAP.
Allow for active networkers
I apologize for copying and pasting this point from a previous post, but it fits here beautifully: “…pay attention to the networking that takes place within. The real success of your project will take place if the right networkers are able to operate freely across your established organization. They are the energetic people the organization trusts and relies on. Regardless of their titles, they move around irrespective of the organization chart connecting people and experience, transforming bits of information into added value. They are the energizers. Their enemies are the authority figures who dislike active networkers and hold too high a respect for established channels of communication. By making sure that loose pieces of information are transformed into solutions these employees will increase the possibilities of success of your project. Make sure they are not subdued by your “establishment.” Let there be a certain degree of noise. Total peace belongs in cemeteries.”
Be ready to partner as never before
Historically, the agenda of a newspaper executive did not include meeting a lot of outside companies. Newspaper managers had a simple and consistent work flow. That changed with the Internet and now their agendas are busy with meetings with vendors and interaction with competitors, players and interlocutors of all kinds. The company network is much denser. To offer an example, when newspapers started migrating the businesses included in their papers, they realized that in the case of online employment, they lacked critical mass. Currently, Gannett Co. shares its CareerBuilder web priority with Tribune Co., McClatchy Co. and Microsoft.
Managers need to become more open, more adept at interacting with many different players in a time efficient way. The TV set is not the only platform to keep in mind anymore and for every new device to carry the TV content there are agreements to be negotiated and implemented.
Lastly, newspapers did not have many persons working from the outside. Online changed that. I foresee that broadcasters will have to excel at streamlining their interaction skills to relate with a larger amount of external teams working for them, peers, vendors and clients in order to contribute to the faster and more complex delivery of the online/mobile.
You are free to use this article in your publication as long as you credit the author Fernando Samaniego.

Television Could Learn from Newspapers when Going Online (Part 5)

2009-11-26T16:28:00-04:00

Newspapers wouldn’t rely on movies to build brand
Could you imagine a leading newspaper in which all the content comes from press agencies? In spite of streamlining, papers have reinforced their core competencies.
For most, it has meant concentrating on anything local or close to the interests of their readers: sports, politics, social events, entertainment…etc. Some regional papers all but overlook international news on their websites because they know they are building their reputation and traffic on local affairs.
When I travel the world and watch TV, I am surprised by the importance movies have in their programming grids. Movies do not create a brand; they are not the pillars on which a leading TV channel can build its brand and future. Movies do not create loyalty, since they are one-off experiences. Instead, other stations are heavily dependent on programs like The Wire, The Sopranos, CSI, House…even The Simpsons, which seems like a smarter option to movies because the broadcaster has the time to build something around them.
Until a few years ago, TV watching was a social activity done with the family. Now it’s an individual activity and if a canned product like a movie can be offered VOD, it will. Leading news programs, live sports and other events may be expensive, but they show the way forward. Reality programs, contests, competitions…are cheaper formats. One can create a series by adapting scripts or formats that have worked in other markets. They will not be perceived as canned and you can create online layers around them. Plus they may allow for mobile participation, product placement and create the kind of loyalty you need at the magical moment the viewer picks up the remote.
The fate of free movie channels seems unpromising. Shrinking audiences, stable cost structure, increasing VOD offerings and decreasing digital costs of transmission will play against them. In the future, they will be less significant because they lack the ability to generate traffic or interaction. For outside content to be successful, it must integrate with the channel’s own programming.
Make live events live by creating ‘content around content’
Live events suit perfectly the new TV. They have to be seen live, advertisers love them, sponsorships are possible and product placement, if you own the event, can contribute to the bottom line. The bad thing is that it’s getting harder/more expensive to land international rights for major events, but there are national and local rights which can also fulfill the needs of some channels.
I cited two examples from the world of sports because sports excel at attracting a loyal crowd of followers. Gavin O'Malley comments that “among the key age segments of 18-24 years and 25-34 years, the Internet far outweighs both local and national TV coverage as the primary source of sports news and information”. Sports franchises are moving quickly into new media and their experiences could be good case studies for those seeking ways to leverage other live events.
Clearly, a TV organization should try to build on recurring events as much as possible. It’s a lot easier that one time only events. While securing the rights is hard, once we have them it is absolutely necessary to build content and interest around them. It is a waste of effort to broadcast an event life as if it is simply a parenthesis in the programming grid. Only the meticulous generation of a complete environment around the F1 allowed Telecinco to grow its audience. Likewise, that same “wrapping around the event” approach has to be developed in the online.
First personal note in my blog: I was born in Bilbao an industrial city in the north of Spain, same as Miguel de Unamuno, an essayist and novelist who said that “history could best be understood by looking at the small histories of anonymous people, rather than by focusing on major events such as wars…” The official history for which you pay for rights is the jewel in the crown, but events also need the “intrahistory” (he used that word), the making of, the interviews and smaller content that maintain the focus and anticipate and prolong the experience. Around traditional TV and around the website/mobile there has to be a microcosm all along the season, or the time’s length. Thanks to this multichannel approach. broadcasters and advertisers have the chance to better impact their target audience. There is a Nike ad, which takes full advantage of this “content around content.” Once again, this is something you cannot buy and which sets you apart from the rest.
Connected TV as a blender
Only a few posts ago, I described the effort of Samsung and Yahoo! to achieve the active coexistence of TV and online. The time when consumers will have internet-enabled TVs is not near, but experiments will abound to grasp the potential of the new sets. Just recently, Sony has announced its intention to offer a movie (Cloudy with a Change of Meatballs) for $24.95 available to consumers directly through internet-enabled TV sets. In the future when such sets are more common, Sony will try to bypass cable and satellite companies with its own VOD services.
Forrester estimates that Internet sets will be in more than one-third of European TV households by 2014 with more than 150 million potential European users in 2014. Advertisers and content providers will have to plan for the transformation of the TV experience to one that blends broadcast and broadband. There is time, but are most TV channels exploring the merger of traditional and Internet TV?
And now take a glimpse at the future
Three months ago, nobody imagined a search engine could offer videos from over a thousand sources in a properly categorized way, facilitating a consumer’s immediate access to hundreds of thousands of episodes, movies, web originals, music videos. Today, that dream can be accomplished via the net. Forget Google. The complete guide to the Internet is already available under the name Clicker.com, which does a superlative job of facilitating an infinite world of on-demand choices. “Thousands of episodes from thousands of shows are housed on thousands of different sites, mixed among billions of random clips and videos.”
Clicker doesn't actually host any of this content, but it provides links to the sources. Its service is free, but it intends to develop premium features as imdb did. It anticipates the future of convergence and though it poses hundreds of questions, one thing is certain: the time to watch online TV in the living room is constricting. Is your company ready for this? Are your shows properly described and categorized online, with complete cast and complementary info? Are they fully searchable under the right tags? Is your advertising well developed to take benefit from this? Is there a payment method in place? Do you have the right approach to SEO? Can you offer differential videos?
Of course, your programming can be seen on your website, but distribution, or the ability of getting traffic to your content through different doors, is something you have to explore. Clicker is one more door to your house; the largest social networks are other ones. As editors have learned, try them. I recommend that your new media team get acquainted with Clicker.com, “the complete guide to Internet Television”, as it is very relevant to your online video business. (End of Part 5)
You are free to use this article in your publication as long as you credit the author Fernando Samaniego

Television Could Learn from Newspapers when Going Online (Part 4)

2009-11-25T02:15:08-04:00

Downsizing and ratio of market shrinkage

Painful downsizing of TV incumbents is likely, as revenues will not rebound to pre crisis equivalents and online video watching becomes more prevalent. After decades of easy life, newspapers discovered that the percentage of costs spent in their news operations was a relatively small proportion of the total and for 10 years they have reduced other costs to keep alive. Eventually, the newsrooms have been affected by the cuts (too often beyond logic). Similarly, TV channels will have to zero in on all non-essential costs because they are doomed to do more with less. Revenues will be lower, so costs have to be reduced. The companies that streamline early will be in more control of their destiny, gaining time to focus on their core tasks.

Unfortunately at the end of the process, the size of the market will be reduced. The total money spent on digital classifieds is much smaller today than the amount previously collected by newspapers. Let’s not get deceived and think that the pie is just redistributed. It simply doesn’t work like that. A good part of the revenues will vanish, contributing, as with many industries in the past, to greater efficiency of the economic system, more precisely to the benefit of the users (I’m trying to see the bright side of things).

If we believe Laura Martin, video online is a $700 million market, while "The market cap of the television value chain is $330 billion." I have never read any reports on the ratio of market destruction in the case of newspapers, i.e. how many digital cents (plus whatever is left in print) are left in the market for every newspaper dollar there was there before it all started. As a pure unscientific and wild guess let me say, until better-documented reports say otherwise, that perhaps no less than one third of the market has vanished into thin air (some of my colleagues put it closer to 50%). If that same 1:3 ratio of reduction repeats itself in the case of broadcasting, the pain will be felt by many. For others it will be lethal. Be ready for that estimate to be right and rebuild your P&L with the new revenue estimate. Depressing? If it happens overnight, yes. If you have some time to react, just challenging.

Payment needed

Rupert Murdoch said that putting together good content and offering it for free is bad business. Jeff Zucker, CEO of NBC Universal, put it very simply: we are “exchanging analog dollars for digital pennies”. If online advertising cannot offset the damage caused by the Internet to print, we can only imagine the suffering broadcasters will go through in a few years. Their video content is more expensive and advertising will clearly not be enough, at least from today’s perspective.

Advertising will evolve, but simple forms of payment also need to be explored, something editors have been talking about for a long time. A patent application issued in April regarding micropayments suggests Google will soon be able to process small payments starting from a penny, a good complement to its Checkout payment system. This is one of those developments a broadcaster has to follow and play with as soon as it becomes available.

Murdoch declared “we’d rather have fewer people come to the website and pay. It costs us a lot of money to put together good newspapers and good content. No news websites anywhere in the world are making large amounts of money” but the truth is that we may not have to choose between the two, high traffic or charging for content. The fact that mass media need to remain massive is a tautology. Media have it built into their genetic code. In his WSJ, Murdoch delivers both free and premium content, but a proper micropayment system instead of a subscription fee may be the answer for many websites.

When a media exec talks about charging for content, don’t be too critical

Given that across time and media, audience has always being a powerful indicator of the potential of a product, it’s only natural that at the onset, new projects overlook the need for revenue. From what I understand, the iPlayer doesn’t require proof of license of payment. Likewise, Hulu is Hulu is doing exactly what Murdoch complained about, delivering good and expensive merchandise for free. Those projects are honing skills to learn how to deliver the right merchandise the right way. But at some time, those and other sites need to extract some economic benefits from their audiences. When someone experiments with charging for content, my recommendation is that the industry support those steps, because it will mean that a TV business is trying to find its future economic model. All will benefit. Even if the formula doesn’t work, criticism is not beneficial. This could be one more lesson from the newspaper industry.

The crusade led by some, Murdoch included, to charge for content is reaping some fruit. Ofcom published recently a report that “more UK adults than before believe that file sharing through downloading shared copies of copyright music and films should be illegal (42%) than believe it should not be illegal (33%), and 25% are unsure. Young people 16-24 are more likely to say that such content should not be illegal (55%)”.

If video content is not easily available and/or easily payable, users will pirate it. Broadcasters have to realize that the price users are willing to pay for an episode will be a low, I repeat, a small amount of money, something similar to a micropayment. Premium and live content, such as a football match, will be a different story. Since Hulu is one of the players exploring how to charge for content, it is one case to earmark for Google alerts. (End of Part 4)

You are free to use this article in your publication as long as you credit the author Fernando Samaniego

Television Could Learn from Newspapers when Going Online (Part 3)

2009-11-23T16:24:00-04:00

Video, mobile, social media, as advertising trends
There seems to be a consensus that there will be new winners in advertising revenue. Social media is beginning to get its share of the pie and it will likely increase. On the other hand, the fast evolution of smart phones since the arrival of the iPhone guarantees that mobiles will become a ubiquitous device and an excellent vehicle for advertisers. Finally, video, heralded for so many years, is starting to live up to its expectations.

If advertising gurus have it right, the wind seems to be blowing in the right direction for broadcasters because they can benefit from three trends. The first is video, where the strength of broadcasters is obvious. The second is mobile and there’s not much to say, since the medium is some time away from supporting streaming video. The third is social media. Broadcasters will have to work harder in this area and regardless, they are not likely to challenge Facebook. Still, they have the marketing power of their conventional channels. If used to promote good series, sports events or other appealing programs, broadcasters have the ability to assemble online content communities. In summary, broadcasters will need to keep these three key components of new media in mind if they wish to position themselves for the ad dollars other media players are fighting for.
Most newspapers were light years away from knowing anything about video, but in the last few years, they have adopted it and adapted to it. They have shown similar will to learn about mobiles and for some years now, their sites have been accessible on mobile phones. The list of examples to showcase how they are building communities around some types of content would be a long one (Nettby by the daily VG is half the size of Facebook in Norway). Broadcasters have been pushed later to the game, but they will need to move with haste to master the tricks of the trade.
Get ready for more technically intensive advertising
Keeping up with the fast evolution of advertising in video is an exciting task. Google has announced that it’s going to test a new formula to deliver skippable pre-roll ads with a high degree of acceptance from users and a very high CPM. “The model will be ‘Cost Per Engagement’, where advertisers would only pay for opt-in engaged views of the ads”. Once again, Google lifts the bar since few players have the know-how to build such a system. The automated process by which a platform actually acquires the insight to offer a certain ad to the most appropriate audience is a highly sophisticated one, which requires very high traffic and ultra intelligent analytical skills. Google satisfies both requirements. In the upcoming years, broadcasters will have to master these skills. While that may not seem possible now, the future will provide us with more analytical skills and technology, assuming companies have moved in that direction. You can ask the old Fast Search, now owned by Microsoft, how many editors have become experts at utilizing something formerly so foreign to them.
Database
A database is a collection of logically related records consolidated into a common container that provides data for one or multiple uses. Information can be retrieved, added to, updated or removed in an automatic fashion. For a long time, editors continued using basic text or even structured text in dealing with the storage of information, but soon databases proved to be much more flexible. Their main advantage is fast and efficient data retrieval while relational databases have the further advantage of allowing administrators to specify how different sets of data relate to each other.
All content can be stored automatically and retrieved for any established or new purpose. The possibilities for database content are endless, as opposed to content stored in the traditional way. Acquired video can be presented with or without comments or associated with any other layer. It can be personalized according to the needs of each user. Database elements can be combined to produce new content, enlarging inventory of pages.
Sophisticated data base management is becoming a necessity for broadcasters and you do not have to have the expertise of Google to do it. The challenge is not only about managing and creating new content from existing data, but also about squeezing all the possible information about our users as it regards their Internet usage and ad consumption. As in the example of Google’s skippable ads that I mentioned before, advertising will become highly sophisticated.
New media are not about technology but about reaching the consumer. That art of the communications equation has not changed, but the technological part has become much more important. (End of Part 3)
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