Henry Blodget’s re-emergence (and at least partial redemption from his role in the previous era of Wall Street scandals) as co-founder, CEO and editor-in-chief of Silicon Alley Insider, and specifically his second-day keynote, provided a reasonably compelling vision of where business models for online news are really headed. He began by describing the characteristics of the new model of online journalism: aggregation of many other, primary news sources; high velocity production (e.g. broadcast text to Blackberries); a conversational, interactive approach; “snackable” editorial packaging; and omni-media formats (e.g. Gawker.com runs 8 Tivos constantly to capture any video that may prove useful).
As examples of “who is doing well” he included his own enterprise (whose flagship is in the process of being re-branded as “Business Insider”), claimed to be the fastest growing business site on the Web, currently with 2 million monthly visitors; the Huffington Post, now bigger online than bostonpost.com with almost 5 million visitors monthly; and Gawker.com, driving twice the online traffic of the LA Times, using 80 editorial staff in comparison to 700. He also praised the Wall Street Journal’s hybrid subscription / free model (similar to the FT’s) and its diversification into ad-supported business news with the successful Marketwatch.com acquisition of a few years ago.
Blodget’s formula for saving the New York Times: cut costs 40% (no matter what, online revenues won’t cover the print cost structure, and print revenues are disappearing fast); raise the print price; charge online subscription fees; and, in so doing, buy time for the transition to online-only. Calling the journalism-is-dying meme “self-serving nonsense,” he noted that the Internet has created more journalists, and that “1 billion online readers = 1 billion fact checkers.” Predictions: more newspapers will be sold, folded, and bankrupted [a pretty safe call]; online journalism will become more professionalized; some “old media” journalists will adapt successfully [others clearly not]; “creative destruction” leads to a new and better future.
In response to an audience question from former WSJ publisher (and Blodget investor) Gordon Crovitz, Blodget noted that Business Insider was already starting to achieve the market-moving “scoops” that print brands have long dominated: “as people understand that we will treat them fairly, we are getting more and more contacts from people who want to talk.”
How to make money from news, in all its formats, was another theme running throughout the sessions, with implications for many categories of traditionally user-paid content business models represented among the Information Industry Summit registrants. The first day set up a sort of thesis-antithesis: as previously noted, Michael Wolff reliably staked out a position at one end of the spectrum – “the primary strategic question is how we can pay less or nothing for content.” Google has established an absolutely new model. Not only that, but: traditional news organizations, he asserted, are “finished,” whether in a year or 18 months “at the outside.”
Not surprisingly, Vivek Shah, who heads Time Inc.’s digital news business, took a contrary view. Acknowledging that “newsgathering as a way of driving revenue is being undermined,” he argued that the result is a greater emphasis on voice, personality, and point of view, and asserted that the original Time was “a version of the Internet” – that is, a way to digest the information plethora of a different era (“28 daily newspapers in Chicago”). Scale matters, he said, in the ability to address specific audiences. As evidence, he stated that [according to at least some measurements] the top 10 news sites on the Web are all traditional brands, including Time, Inc. properties with a combined 26 million monthly visitors.
From the “high end” of the news business, Dow Jones Newswires SVP and managing editor Neal Lipshutz insisted on the endurance of a paid model for high-value content, including news, and argued for a return to subscription pricing by the leading daily newspapers [other than the WSJ and FT, whose business/financial focus adds another dimension to the perceived conversion value of their information]: “You have to put the genie back in the bottle.” Steve Lohr of the New York Times mused about the notion of the “top 5 papers” jointly agreeing to charge for online subscriptions, and later noted that for the online-print advertising revenue crossover model to work, “you need a lot more numbers” in the audience.
Robert Merry, president and editor-in-chief of Congressional Quarterly, also insisted that newspapers had “missed the boat” by ceding the circulation fight to their readers. But he cast a skeptical eye on lamentations about end of professional journalism, noting that the familiar model of “objective” journalistic brands has been a relatively short-lived phenomenon. We may be returning to the kind of environment he saw from his recent writing about the 1840s, when all US newspapers were clearly – and usually fiercely – partisan; and readers were, as today, free to form their opinions from multiple sources, or have them confirmed by particular, reliably partisan, voices.
The emergence of legitimate social media business models in the professional and b2b markets has been rather halting, especially if excluding pure plays like LinkedIn or “mere” extensions of online advertising inventory in B2B media. (This was brought home to me in the process of organizing last year’s social networking panel at this conference.) So another theme deserving note emerged in signs of more fundamental integration of user generated content and social networking with high value information services.
Robert Barber, CEO of Environmental Data Resources, described how that company is using social media to add “an asset with defensive value and monetization potential.” EDR’s core user group, environmental professionals hired by banks and real estate investors to assess potential environmental hazards, can now comment on what they found – enhancing “official” (and publicly) available data with current, expert intelligence that (assuming its lead benefits from typical “network effects”) current and future (e.g. Google) competitors will find difficult to match.
In a more purely defensive vein, McGraw-Hill’s Glenn Goldberg noted how his division’s J.D. Power & Associates business unit had acquired Umbria Inc., a social media-specialized marketing intelligence provider, to buttress J.D. Powers’ annual syndicated surveys in an era of vastly-more democratized product ratings and real-time brand management. Similarly, Jon Gibbs, VP of media analytics for Nielsen online, described how Nielsen is integrating its early acquisition of social-media-mining pioneer BuzzMetrics into “’on the fly’ customer projects combining BuzzMetrics, surveys, and traffic measure to help define the most relevant answers to advertisers’ needs for better insights into audiences and markets.
A goal this year is to achieve a better balance of paid and unpaid thinking and writing, work and play, business and (other forms of) self-expression. The focus here will continue to be, as described in my first (2007) post, on the industry comprised of “organizations large and small who source, package, distribute, and/or apply information content products and services that are specially valued by particular groups of users and their sponsors, whether business and professional enterprises, advertisers (esp. B2B), academic and research institutions, or individual users.”
More specifically, some of the themes likely to be of special interest to me in the coming year include: The increasingly “real-time” web and its implications;Thematic and functional content (and other) strategies for the “downturn”; Social media business models; Google’s evolving relationship with the rest of the information industry, and the latter’s responses; “Post-print” tactics and strategies of traditional publishers more generally; the next stages in the evolution of information content user empowerment (from disintermediation to self-publishing to…?)
In the meantime, one of the blogger’s best friends is a substantive conference program (the content comes to you, packaged and ready for comment!). Even better when one has participated in the program planning, and that’s the case with two upcoming events: the SIIA’s Information Industry Summit, and the NFAIS Annual Conference (where I’ll be a moderating one of the panels). Thanks for your attention; stay tuned.