Content Bridges

NYT Local Experiments Grow with FWIX

kdoctor — Thu, 18 Mar 2010 09:12:50 -0700

Breakfast cereal with fruit? Ammunition for the argument that all the good urls are gone? FWIX is partnering with the New York Times, a statement that would have seemed like a punchline a decade ago. Now the FWIX partnership is part of the expanding local experimentation of the Times and tells us lots about the Times' strategic direction, its multi-front competition with Dow Jones and a more nuanced recognition of what putting content under your brand means these digital days.

Further, it tells us that national papers increasingly are becoming more competitive with local ones.

FWIX is run by Darian Shirazi, a 23-year-old former software engineer, already experienced at Facebook and Ebay. Its main funder, BlueRun Ventures, has put $2.5 million into the company. The goal: tapping into the bonanza of local ad dollars to come, and doing it on the sweat of smarter and smarter filtering technology. That market: $15 billion in local online ad dollars in 2010, as forecast by Borrell Associates; $36.7 billion by 2014 according to Kelsey.

FWIX sounds a lot like Outside.in, which incidentally signed up Dow Jones' local newspaper group last fall, as the two national giants, the Times and the Journal/Dow Jones seem to be butting heads in every conceivable way and location, from Midtown to Middle America.

The idea of the FWIX's and Outside.ins: provide a round-up of the best local news, by aggregating local news sources, big-time and small, blog, story and broadcast, professional and user-gen, applying some hierarchy of quality to it. Both efforts race for the same audiences and related advertising as the original content-creators, AOL's newly expanding Patch and Examiner.com. In addition to those of course, the number of hyperlocal efforts increases by the day (and some of them are being rounded up by local dailies, witness the Seattle Times aggregation, for instance).

For newspaper companies, it's a smart move. It's the end of an era, and the Times is clearly moving on a new philosophy: gather as much higher-quality content under its brands, national and regional, on as low a cost basis as possible. In fact, that's become a driving principle NYT Editor Bill Keller's been talking up. So we see the new partnerships in the Bay Area and Chicago with professionally run non-profits, and we see the hyperlocal experimentation with The Locals, in New Jersey, Brooklyn and soon, with Jay Rosen, in the East Village (for the substance and spirit behind the push, read Jay's post enthusiastic post). With FWIX, the Times will experiment at its regional newspaper properties first, rather than NYTimes.com, with Santa Rosa apparently up first.

The new-fangled word for it is curation, rounding up lots of content, providing some hierarchy of value. Of course, it's just good editing, bolstered by intelligent technology, and a growing flexibility to accept and work with a wider world of voices, styles and views.

Importantly, it also asserts that readers are smart: they can tell the difference between a New York Times (or Sarasota Herald) byline and that of a community contributor. That assertion is a Pro-Am gamble for the Times and all proud brands, but it's one that should be made -- and backed up with clear, prominent and never-ending disclosure. Grab the future, but keep explaining it to readers whose understanding of the changes will always be uneven. (Last fall, Times Digital Initiative Editor Jim Schachter, who is behind many of the local forays, did a Q and A on the Times site, which tells you a lot about the company's evolving philosophy.)

Put the Locals, the FWIX experimentation and the Chicago/Bay Area partnerships (though the latter is most intended to retain/increase print circulation), and you have the makings of the remaking of the U.S. news landscape.

It used to be that 1500 daily local papers brought their readers the whole world -- from city to state to nation to globe, with business, sports, lifestyle and entertainment tossed in. The Times, the Journal and USA Today were the three national reads, supplements to the local dailies, with local single-digit penetration in any metro market.

Now those roles are getting reversed. The local dailies are increasingly becoming purely local, and the national papers are getting local, adding local print editions, getting hyperlocal, finding ways to serve their readers' (and advertisers') needs beyond national/global. It's mainly a Times/Journal fight, but just this week, USA Today set up a big new local distribution play, joining the Times at Starbucks stores across the country.

It's a confusing landscape. What's local? What's national? What's digital? What's print? It's a patchwork age, and nobody's got the answers, but as home turfs have shrunken everywhere, everyone's looking for new lands to conquer.

Do Marketers Still Need News Brands?

kdoctor — Tue, 16 Mar 2010 09:09:00 -0700

First published at AdAge.com, March 11, 2010

Let's take a quick, one-question quiz together.

Marketers need news brands:

A. less than before
B. about the same
C. more than before

First, bonus points to anyone who answered D: "Who the heck knows?"

I'm a news industry analyst and veteran of the newspaper industry, a witness to its slow and now rapid decline, which is now shared by all legacy news media, including broadcast. All the metrics are headed in the same direction: less revenue, far fewer reporters and editors, small profits that prevent much cash to be reinvested in the business and less community clout.

The U.S. print newspaper industry long received about 80% of its revenue from advertising, with circulation making up the rest. As ad revenue has declined 20%-25% since the recession, ad revenue now contributes close to 75% of total income. Publishers facing the heavy fog of uncertainty are budgeting largely flat in a recovery year, a sign they see permanent downturn in their fortunes.

Circulation revenue looks like it will stay flat for a while, as daily newspaper publishers mark up subscription and single-copy prices by 20% and more, making the old mass newspaper a niche for older, monied readers as the web becomes mass.

What they hope they see: stability. What may seem like a plateau, however, may be a ledge.

That stability, of course, assumes an ad world that's stabilizing as well. In fact, publishers now must acknowledge a lot of hard truths while they hold out hope for a platform-switch rebound.

Let's go back to the quiz and look at answer A: "less than before."

If the recent past is a prologue, this seems like the right answer. News publishers have seen their print editions slide in circulation and readership. Where once -- back just to 1998 -- 45% of U.S. households received a daily paper, now print penetration approaches 30% in many cities. Publishers have seen their digital businesses grow slowly -- contributing no more than 15% of their total revenues.

They've found themselves disconnected from brand-oriented readers and their content is aggregated on the web. Against what is now clearly infinite digital inventory, they've tried to position their products as "premium" yet still find themselves chasing lower and lower ad rates. Meanwhile, web users have made Facebook and Twitter their hangouts, spending hours there monthly, while spending no more than 10 to 15 minutes monthly on news sites.

"Less than before" acknowledges that, in at least the first round of web news, it's the big four of Google, Yahoo, MSN and AOL that have won, while news brands pick up the crumbs. The old argument that paid circulation is better than free circulation (or controlled circulation) has lost out against digital targeting and measurability that seems to improve daily.

"Less than before" plainly recognizes that marketers are spending much money outside of traditional ad channels. For instance, according to recent Outsell research, marketers are now spending $65 billion a year on their own direct digital marketing, a sum that has tripled in three years.

In this world, news brands have waned in their reach, their meaning and their importance in assembling audiences.

Let's jump to answer C: "more than before." News publishers make one old and one new argument here. The old one: In the "blooming, buzzing confusion" of the digital world, as philosopher William James put it a century ago, marketers and their buyers need the reliability, the cachet and the known-quantity audience that brands like newspapers and magazines offer. Against digital tools, that appears to be more wishful thinking than strategy.

The new one, and one that we should now watch carefully: Forget the first-generation web news-reading experience (who really liked it anyhow?); get ready for mass tabletized, mobile reading.

Already, the Sports Illustrated tablet demo on YouTube has drawn more than 800,000 views. Note that all the tablet talk so far is around single titles, not aggregations of news content. Talk to publishers, and here's what you hear: This is our chance to take back the web. This is our chance to offer marketers unprecedented ways to reach our readers, with new immersive, multi-touch, trackable capabilities.

So C is the best answer for those who believe that Humpty Dumpty can be put back on that wall.

Of course, the tablet -- if it can hold such near-Biblical powers of resurrection -- is at least a year away from becoming a mass platform with advertising infrastructure in place to use it.

Then B, "about the same," is really a non-answer. Clearly, we've seen an unprecedented rupture in the decades-long partnership of advertising and news brands. Our only question now, as we sit a month away from the iPad launch, is whether the Apple device and its brethren will really be a next-generation game-changer, possibly renewing back-to-the-future advertising/news brands partnerships.

Further, to the complicating question of major platform change, what will be the roles of the device makers and the package assemblers, from Apple and Amazon to Comcast and AT&T? Everyone wants to "own" the customers, as marketers have to find the right landlords to rent them.

We'll soon get to answer the quiz in real-time.

David Link, founder and creative director of Wonderfactory, which produced the SI demo and is working with Time Inc. on a couple of rollouts, says his company will have three or four apps ready for the iPad launch, all for media companies. He says that the company is in discussion with a half dozen newspaper companies, about half in the U.S. and half in Europe. Mr. Link is demoing tablet ad products for "cable, package good and auto" companies, including such nifty features as letting readers test-drive cars -- with their fingers. Consider the rollouts as demos of small and large principles -- and new tests of what marketer/news brand relationships mean in the second (mostly) digital decade of the century.

Why We Have a Hard Time Thinking of Yahoo as a News Company

kdoctor — Wed, 03 Mar 2010 22:29:08 -0800

Carol Bartz runs one of the top three news sites on the web....and doesn't, well, like the news.

In a rambunctious interview with CNBC on Tuesday, Bartz celebrated Yahoo's 15th anniversary and found herself asked a lot of tough questions by CNBC's Lunch Break team. Through that questioning -- which got the most press for her statement that she would have sold Yahoo to Microsoft had she been CEO at the time -- she hardly seemed like the proud captain of a news enterprise. You know, the news, it's just so negative, so ungainly, just too darn hard to understand.

On how to get the economy moving: "I think... if Washington would shut up occasionally, and let the consumer get his confidence back. It's a lot of negative news. People don't like negative news all the time."

On health care news: "You turn on the news every day, and there's another program. It's health care this and that. Who's fighting."

On her view of the health care legislation: "I don't even know what they're trying to pass. I'm well-educated. I read a lot. I'm on Yahoo all the time. I can't figure it out. How is my family in Minnesota going to figure it out. It's not that Minnesota families aren't smart....what's going on is too hard to figure it out. It just makes people think other bad things are going to happen."

Adolph Ochs, she's not, Jim Batten, she's not. Katharine Graham, she's not.

Ack, bad news. It's too icky to hear about all the time. And it doesn't monetize too well, either.

Bartz was glad to help the CNBC help understand what in fact defines Yahoo today. Among her replies, "We have the content, we have editorial presence, we're number in finance, sports, front page."

So this is where we've come to. Yahoo is a quasi-editorial company, glad to be atop the digital news heap, glad to be a partner to the newspaper industry. But that news stuff, it's awkward. And the CEO of this $6.5 billion company, who is "on Yahoo all day", is just another one of those Americans who just can't through the Tea Party haze, and read all the intelligent prose written out there that tells us all very clearly what's in the health care legislation, whatever we may think about it.

I sympathize with Bartz. She was brought in to play principal to a bunch of above-average-smart, but undisciplined students. It's frustrating. But, Carol don't claim to run one of the biggest digital news companies, say you're a media company, unlike those single-thought-paid-search techies down the road in Mountain View, and then tell us you don't like bad news and can't make heads or tails out of health care. We expect our corporate titans, especially our media corporate titans, most especially our news corporate titans to be a little brighter and savvier than that.

Bartz's comments came on the heels of her deputy Hilary Schneider's new street corner positioning for Yahoo, and its local newspaper partnerships. "Local is digital crack," she told PaidContent's Staci Kramer, out of the box in her recent interview. Insert your own joke, here. I just wished that this big media company with a growing editorial presence could be taking something that would make it more news-worthy.

Attributor's Anti-Piracy "Guardian" Trial Begins

kdoctor — Tue, 23 Feb 2010 23:20:53 -0800

Attributor's "Fair Share Consortium" got a fair amount of pub (Attributor's "Fair Share Consortium Completes Newspaper Trifecta") last year with a blindingly simple idea: monetize illegal use of copyrighted news content. That's otherwise known as anti-piracy as business development, one of favorite web jujitsu strategies.

Rather than huff and puff about taking down unauthorized usage, threatening uncertain court action, just make money on it. The notion: go to the ad servers providing the ads against the unauthorized content, and get them to share a piece of any ad money with original publishers, taking it from the distributor's share. That was last year, and little progress has been made on that point. Two reasons, at least. First and foremost, Google and Yahoo -- the two major ad servers here -- haven't embraced the notion. Sure, they say, we want to help out those beleaguered publishers, but, hey, it's complicated, so let's take another meeting, and another, and another. Secondly, for publishers, "anti-piracy" isn't the first thing on their to-do lists; avoiding (or emerging from) bankruptcy is. Further, they've cut back staff, so even if they signed on with Attributor as many did, their use of the Attributor system has been haphazard.

So the Redwood City-based start-up is trying a different approach. They've dubbed their new service "FairShare Guardian." In the next 90 days, they'll be in their trial phase of it. What's the same: Attributor will still monitor editorial content use, comparing publishers' content to its usage on the web, determining and reporting what's licensed and what's not. Now, though, publishers can "outsource" (for a monthly subscription fee, based on how much content Attributor is monitoring) to Attributor the follow-through. If Attributor finds illegal use -- and that's not "fair use" by a longshot, meaning at least 80% of an article is used without authorization -- it will pursue the matter. First, one notice letter to the offending website, then, a second, and then, notice to both the ad servers serving ads onto those pages hosting the content and search engines pointing to it. It's a roundabout way of saying: pay up.

Google and Yahoo routinely get such notices under the DMCA, and word is they respond well. Here's the 90-day question to watch: If Attributor's numbers are close to right, pointing to "112,000 near-exact copies of unlicensed articles by more than 75,000 unlicensed sites" in a recent 30-day period, how will Google and Yahoo respond to a flood of thousands of notices? Google will only say it responds to DMCA notices, but won't say how many it processes regularly.

It's essential to see this new initiative in a broader context: most news publishers are trying to re-gain mastery of their content, digital mastery. They had total control of it in the print world, being among the most vertically integrated industries, from in-house reporting and ad selling to printing and delivery. On the web, though, they early cast their content out there, hoping to increase the catch of advertisers and readers. As their sophistication about the digital ecosystem has evolved, they are trying to regain mastery. You can see them applying some basic journalistic principles - 4 Ws and an H -- here. About their content, they want to know: who is using, where they're using, when they're using, why (a tougher question) they're using and how they're using. Answering those questions means better content management systems and better tagging and tracking systems.

Attributor is part of that puzzle, aimed at monetizing only the most egregious taking of intellectual property -- whole or nearly whole stories or posts.

More broadly, we can see the AP Registry initiative and the Europe-based ACAP project aimed at the same mastery goals. We can see the same principle in how Hearst is using Nstein. In New York, Dow Jones President Todd Larsen recently told me the company would continue to expand its use of the Eidos content management system across content groups, with the same notion in mind. Finally, the New York Times announced it has partnered with Denver-based Thought Equity Motion to gain some sense of mastery over its burgeoning video.

Mastery doesn't mean locking up the content for most of these companies, though some blogosphere reaction to any Attributor or Registry plans would lead you to believe otherwise. Knowing more about your content, and its usage, is a tool -- a vital one -- as these companies try to take a nuanced view of how to play in the next stages of the web, especially the potential of the mobile, tablet-enabled web. “We are not trying to take ourselves out of the digital ecosystem," NYT Publisher Arthur Sulzberger took pains to point out at the paidContent2010 conference.

What the Attributor system does offer publishers is one look into content usage. A few more than a dozen publishers, including Reuters, are signed on for the 90-day trial, Attributor CEO Jim Pitkow told me. If the 90-day trial works -- let's see how Google and Yahoo respond -- the idea could expand from there.

Hey, Who You Calling White Space?

kdoctor — Wed, 17 Feb 2010 11:55:22 -0800

You got to love it.

Patch, AOL's new push to provide local news is expanding -- rapidly, according to a memo that Silicon Alley Insider's Nicholas Carlson says he got from inside the reborn content-is-king AOL. Among the revelations:

Patch will move beyond its 30 or so local sites to hundreds. From its roots in contentiously hyperlocal Maplewood, New Jersey and other communities in New Jersey and Connecticut, it is planning on hundreds of Patch local news sites by the end of this year.
Hiring is apace, at at least one J-School, NYU's.
The goal: "To be leaders in one of the most promising 'white spaces' on the Internet."

There you have it, newsies. Local -- not long ago the domain of newspaper, TV and radio behemoths so dominant that barriers to entry made competition seem unthinkable -- is now open territory, a vacuum to be filled by a combination of youthful journalistic energy and state-of-the-art technology.

In hyperlocal, where others see too much cost and too little revenue, AOL believes that Patch can be a real business. Take a look at Patch, and you see lots of meat-and-potatoes coverage, on a par with community weeklies, though not much advertising.

Read through the comments on the short Business Insider post and you pretty much see the usual arguments -- some well-made, others less so -- trotted out about these new forays (Examiner, Demand) into content-farmed "journalism".

We see the complaints of writers about difficulty being paid, even for pieces accepted; a reminder of fast and far we're moving from arguments about Guild business rules in daily newsrooms to basic labor practices of, well, getting paid for the work you do, even if it is a pittance. We see debates on the quality of the work. And, of course, on how much of a business model is there, given a decade of failed efforts to tap revenue from local user-gen.

I come away believing there are three points for us to remember as this new phase of testing web content creation models goes forward:

It's not young vs. old (or experienced). Among the raging comments are those about the relative youth of the Patch staff. Let's not blame young people for trying to get into, and make, a new business. They're playing the hand they're dealt. Mixing valuable experience with youthful, trained passion should be a plus, witness the UC Berkeley Graduate School of Journalism's push with MissionLocal and now with the Bay Area News Project, for instance.
It's not about editors or technology. AOL, Demand, Examiner and others are smart to use technology to fundamentally know what readers and advertisers want and use that data to guide decision-making. For those of us who care about journalism, it's not a question of using such data or not, it's how we use the data. Data-driven journalism isn't journalism; the element of judgment and public service must always be part of the equation. As non-journalism companies increasingly create more content, their practices deserve lots of scrutiny. Similarly, traditional editors and reporters can't bury their heads in the sand; it's not 1990 anymore.
It's not about news or features. It's easy to decry all the "feature stuff" new sites and companies are creating, saying it's not news. Newspapers, though, have always been a compendium of news and features. Let the features -- family life, personal finance, health, sports and hobbies -- go and the related ad revenue (those topics are what people spend money on, not on City Hall) goes with them.

So that's the throw-down challenge in a nutshell: After being called "white space," respond with what you can do best, learning from the competition, and beating it to the punch.

For more on the fast-evolving world of digital news, check out my new site: Newsonomics.com

Arthur and the Blue People

kdoctor — Wed, 03 Feb 2010 23:59:00 -0800

For more on the fast-evolving world of digital news, check out my new site: Newsonomics.com

As if the New York Times' Arthur Sulzberger and Janet Robinson didn't have enough headaches, trying to figure out how to fend off that other daily beast known as the Wall Street Journal.

Until December, 2007, when Rupert Murdoch pulled off the coup of his lifetime, cajoling, wheedling and finally hard-lining just enough of the Bancroft family into selling the prize Journal to him, the Journal had been a national business daily -- not the Times' direct competition. As the ink barely dried on the purchase agreement, Murdoch made plainer his disdain for the Times, its product, ownership and political leanings. He's also made increasingly clear -- as much in product change as in words -- his plans to drive the Times into the ground.

Now, as 2010 dawns, he's got a new weapon to use in the battle, and it has nothing to do with newsprint. It's Avatar, the stupendous, box-office-busting sensation, produced and distributed by Wall Street Journal's cousin, News Corp's Twentieth Century Fox. Avatar is smashing revenue records, going past the third dimension, pulling in more $2 billion or more so far. That's compared to about $500 million in production and marketing costs. News Corp's big and smart bet will be paid off magnificently.

Consider: $1.5 billion or more in profit from one News Corp movie alone. That compares to Times' total revenue of less than $2.5 billion in 2009, and probably a small operating loss (the company reports its full 2009 on Feb. 10.)

Sure, the Journal itself has seen its own P and L struggles, along with the rest of the industry, though its last-quarter results turned positive, contributing to a $259 million profit for News Corp's news and information division. Yes, it's better positioned -- business-oriented national newspaper, online subscription revenue stream -- than most dailies, but it's struggling for advertising along with everyone else.

If you're Rupert Murdoch though, you just have to say, "Take some of that blue people money and invest it in the Journal. Remember I said I wanted to kill the Times." Maybe send them flying into the infinity of the flux vortex.

So, as the Times reorganizes its digital business operations, add something new to the Times woes' of downsized ad spend, too great a cost structure and little way to gain other than ad revenues digitally until at least 2011, given its go-slower approach to metering. Add the forest people, the Navi. Yes, the blue people, too, are on Arthur's back.

As Michael Wolff laid out in his Murdoch bio, "The Man Who Owned the News," Murdoch may run a global, entertainment-news conglomerate, but he's a newspaperman in his blood. Yes, top execs at far-flung News Corp ops and his own children understand that newspapers are the company's past -- in terms of revenues and growth -- but that makes little difference as long as Rupert is in charge. It also will make little difference as long as profits flow like a golden river.

How much sense does it make to pull money from high-margin areas of News Corp to subsidize another? Call it transfer tithing, call it intra-corporate welfare, but expect to happen as necessary, Take just 10% of $1.5 billion, and you've got quite a war chest.

The Times' dilemma is not one that is unshared by other news media. In my new book, Newsonomics, I outline what I call the Digital Dozen. These are the world's largest news companies from ABC to the Washington Post. All are fighting to reach the potential, English-speaking audience of almost a billion. Each can find huge reach, at low cost, given cheap Internet distribution. All, though, face the equally huge challenge of managing and reducing high cost structures in the shorter term.

Consequently, those Digital Dozen news companies that are part of larger companies derive lots of revenue from non-news operations -- and they have a great shorter-term advantage. Think News Corp, which relies on its three-continent news operations for only about 20% of its revenues. Think Thomson Reuters, which depends on news for less than 10% of its income. Think Bloomberg, whose 280,000 licensed terminals drive the business, as it experiments with Business Week, TV and radio. As Andy Lack, Bloomberg's CEO of multimedia, put it picturesquely last week at the Software Information Industry Association conference in New York City, "The reporters are a value-added service for the data. If you're a journalist, being associated with an enterprise that has that structure is a beautiful thing."

For the standalone news companies -- think New York Times, NPR, the Telegraph, AP in some ways -- it's a tougher slog. They have little cushion, little safety net. Maybe standalone news companies are obsolescent, profit or non-profit, or maybe the many efforts at diversifying business models will work to provide them cushions of a different sort.

Yet, today, beware the new blue man group that's on the offensive, simultaneously buoying the Journal and trying to sink the Times.

Newsonomics: The Book and The Site

kdoctor — Wed, 03 Feb 2010 23:19:00 -0800

"Newsonomics: Twelve New Trends That Will Shape the News You Get" (St. Martin's) is now up on Amazon. It's my step-back take -- in 12 digestible laws -- on the print-to-digital transformation we've in the midst of. Order now; order many. Available from Amazon and all your favorite booksellers. If you'd like to see it on the Kindle, please use the "Tell the Publisher! I'd like to read this book on Kindle link, left nav, on the Newsonomics page".

And, if you haven't check out the new, updated daily, Newsonomics.com.

The iPad: Quick Publisher Scorecard

kdoctor — Wed, 27 Jan 2010 11:09:13 -0800

For more on the fast-evolving world of digital news, check out my new site: Newsonomics.com

I've well used the Moses metaphors; others prefer the Jesus Tablet. But the dramedy around The Apple Launch has been as much Mel Brooks as Biblical. It's just more interim technology after all. In fact, it's become a tabula rasa for all our digital hopes and dreams, with the silliness merging with the real import. (And will we remember where we were when the announcement was made?)

That said, I'm enthusiastic about what tablets can do in the mid-term for news companies, old, new and still being born.

It was nice visit to Mr. Jobs' Neighborhood, and see, finally, the iPad, a tablet device "thinner and lighter than an e-book." What's it mean for the news world? He highlighted the New York Times and Time Magazine, but we don't yet know the kind or extent of business relationships here. Off the Apple announcement, here are quick pluses and minuses for newsies:

PLUSSES

New marketing dollars, new marketing dollars, new marketing dollars. Yes, three plusses. I believe that the biggest impact of the tablet, in whatever six- to 11-inch forms stick will be in being a magnet for marketing dollars. I'm not saying advertising dollars. We're seeing a huge shift in money -- $66 billion a year in the budgets companies are spending on their own marketing, according to an ongoing Outsell study. The number in 2006: $22 billion. Marketers are going direct to consumers, courtesy of multiplying Internet technology. One example: Honda's Power of Dreams. Marketers are looking at the tablet this way: It's part of the new "multi-touch" marketing landscape. Multi-touch, as in smartphone-plus, let your fingers lead you in the emerging digital world. For marketing that means experiential marketing -- social sites, games and more. The news publishing connection: marketers want the right content to find customers, and news audiences are part of that mix. How, when, what and where: all to be figured out. Remember, no IAB standards for tablet advertising yet; this is a 2011 revenue source -- if all goes right.
The birth of long-form digital reading: The first-generation news web has been notoriously short-form, read a snippet and run. We don't like reading long stories on a work device, like a laptop or desktop -- both with legacy to-do burdens -- or really on the smartphones. We do like to nibble, a nibbling that's produced relatively little engagement with customers online, and too few ad dollars. On a cross-country flight last week, I looked over at my two seatmates, and both were absorbed in their Kindles. (Yes, I was reading a newspaper!) The hope here: the tablets will be a consumer device, not a work device, and that readers might enjoy reading news, as they have long done in print.
New revenue streams for content licensing: If Apple wants to end-around other established players -- like Comcast in the cable world and the wireless giants, Verizon and ATT -- it might well pay publishers for some kinds of content. Already, it is offering to pay Disney and CBS for their content. Certainly, not commodity news content, but we can see advantages to Apple in lining up the New York Times, high-quality business content and more. Ultimately, the tablet can become a great local device: think local news and info + Yelp + Angies List + entertainment guides + real community social interaction and next-gen business directories. We're far away from that product model yet; but someone -- why not a news company? -- will invent it.

MINUSES

Slow adoption. If the iPad 's initial price point is high -- though inevitable price drops will follow -- we could be waiting until 2012 to see meaningful adoption rates. [Add: With 3G pricing of $699 and up, this product may not be mass in 2010, but as price drops kick in, expect it, and its brethren, to become mass products by 2011.]
The familiar news bypass: You know what I mean. Tech product companies have long devalued news, considering it like air, something you get cheaply from somewhere, but not worth paying for, like video. News companies are not immediate players in the Apple launch, so we may be seeing history repeat itself.
It's a visual medium. That's why magazine publishers, through the Next Issue Media nascent consortium got out ahead of news publishers first on this. When we think tablet, think this new trifecta: Mobile, Video, Social. Those are the new connection points in our evolving digital lives, and news publishers are generally behind the curve in all of them.
Woeful technology integration: If news publishers want to offer across-the-board -- newsprint, desktop/laptop, smartphone, tablet -- access to their products at good price points, they need to recognize those customers across platforms. Some like the Wall Street Journal are ahead on this curve; others, like the New York Times, are behind -- which is one reason the Times won't go metered until 2011. You have to be ready for prime time to play in prime time.

The Times Meter: Why 2011?

kdoctor — Wed, 20 Jan 2010 22:35:19 -0800

Why 2011?

That’s a compelling question about the New York Times’ metering announcement, one that I somehow missed in my list of nine (“Nine Questions: New York Times Goes Metered” ).

It’s a good one, given that making a mid-January announcement of a 2011 business move is highly unusual in any trade. And a year in Internet is something like 11 in real life.

So why did the Times do it?

We could say that’s a fast-track, comparing it to the health plan’s 2014 (?) implementation, but that wouldn’t be fair, would it?

So let me offer a mix-and-match of three likely reasons for the announcement:

It’s a Signal to Wider News Industry: Recall how nervous U.S. daily publishers were when NAA sponsored “paid content” get-togethers in mid-2009. Everything was out in the public, with vendors uncomfortably presenting panel-style. The word whispered: "anti-trust." So publishers can hardly convene a meeting in midtown to plan a next-decade paid content world.

In fact, the Times’ move follows the many Rupert Murdoch statements of 2009, saying News Corp publications, most not in the US, would be finding some way to charge readers. In addition, Hearst is busy working on pay wall plans, Skiff-enabled and otherwise, while numerous companies are working with Journalism Online, strategizing how to launch their own metered and/or niche content plans.

So the Times sends a signal to others: we’re going paid, too. If many publishers follow the paid path, that’s good for the Times – less threat of free content competition for readers.

It’ll Take Time to Lay the Foundation and Infrastructure for the Moves: It has the taken the Financial Times several years to develop the sophisticated analytics and tracking technologies to optimize its metered system. While in consideration by the Times for awhile, it will take the company time to get the technology rolling.

Further, the Times made it clear that it wants paying subscribers to enjoy a seamless experience across digital products, products that will soon include desktop/laptop access, smartphones and tablets. That’s easily said, but requires all kinds of technology integrations and customer relationship coordination and service. In this scenario, the Times wants to make sure to get the new program right.

It Gives the Times Time to Change Its Mind or Tweak the Plan: Let’s say it’s the best plan the Times can come up with today, in early, 2010. Let’s also say we – and the Times – have no idea what 2010 has in store. Will tablets revolutionize digital news reading and provide powerful new ad streams? Will Google decide it’s in its best long-term interest to share revenue with news providers who supply it the free raw fuel to feed its ad engine? Will Apple and/or Comcast decide to pay the Times a hefty sum to include its content in their new digital products, as they pay TV/video content providers?

Let’s say some things just come out of complete blue. The Times can plan its new metering system, adjust accordingly and see how the uncertain, post-recovery digital landscape plays out.

So there are three possibilities. We can mix and match them, giving us something to speculate on until Apple’s Second Coming announcement in a week.

Nine Questions: New York Times Goes Metered

kdoctor — Wed, 20 Jan 2010 08:06:11 -0800

It's a big bet. The New York Times, which has been thrashing about every possible kind of business model in the last six months, is making the bet on metering, meaning readers will get some number of free articles per month, then be told to pay up to get more. Nine quick questions as we digest the news:

Why now? The Times is making one, maybe penultimate, bid to save its cost structure. It still employs something more than 1100 journalists, at high wages. Those wages have been well-earned by dint of skill and accomplishment in most cases, the the internet economy and the advance of low-cost, "good-enough" content (make sure to read James Rainey's great piece, "Freelance Writing's Unfortunate New Model") is doing further damage to professional journalism economics. The Times metering plan is intended to provide a strong second leg, after advertising, to support that plan.
Won't metering kill the golden goose of mass advertising? First, let's note that Denise Warren, who runs advertising at the Times generally, is in charge of NYTimes.com. That provides a keen tie between the new experiment and the Times' main source of funding. As Warren has recently said, "If we move in this direction, we want to make sure that we're not dipping into the advertising bucket to get money out of the subscriber bucket." Of course, that's easier said than done; the Times thought TimesSelect would be more controllable than it was. One curious potential upside here: those who do subscribe via metering may become among the most lucrative ad targets. Look at it this way: the Times will know the most about these customers -- more frequency of usage; more clickstream data; more declared preference data -- and that's highly useful in targeting advertising.
Where else might the Times find new revenue soon? Think the other Big Apple. As Apple releases the tablet, it needs content friends. It can "pay" the Times in prominence; the two could also figure all manner of interesting revenue shares. Apple is already offering payments to companies like Disney and CBS, as its next-gen Apple TV plans take on the cable giants. Why not pay for premium news content?
What does "frictionless experience across multiple platforms," in the Times release this morning, mean? I think this is one major move, if the Times can pull it off well and quickly. In the age of the smartphone, the coming tablet, and (coming a bit after that) the Internet-mediated livingroom TV monitor, readers are already coming to expect easy, and smart, access to the their content wherever, whenever. They also will come to expect -- we're seeing it in some iPhone apps already -- the stories they save on one device to be known by another; ditto email sharing lists, stock portfolios, favorite sports team preferenes. If the Times can provide such synchronicity, then readers who are asked to pay can understand the charge as, in part, an access charge. We, Americans, love to pay for access -- think massive cable and wireless bills -- we just have thought digital news content should be free. At a panel I moderated yesterday in New York, Dow Jones consumer chief Todd Larsen, indicated a similar philosophy about universal access. One rub here to watch: who owns the customer relationship with the emerging tablet. Amazon has stubbornly clung to the position that it will "own" the customer (hey, wait a minute, that's me), while news companies -- getting a glimmer of an all-device-access future -- have pushed back, and are negotiating with Amazon's Kindle competitors, to keep their customer touch.
Isn't it suicide to charge your best digital customers for content, while allowing others to get some for free? Not really. In fact, that's what the Wall Street Journal has been doing for years. Remember the numbers: about a million paying online subscribers.....and another 19 million uniques, who get to Journal content through search engines and all manner of side doors for free.
What can we learn from the FT experience? It's all about propensity modeling -- learning patterns of user behavior, how many articles of what kind readers read within certain periods of time. It's about tweaking the dials, up and down, to capture the payments of truly loyal readers who find continuing value in the brand, while not losing a critical number of occasional visitors. It's about learning how to convert key parts of miscellaneous search engine traffic -- and understanding that most of it will never be converted. The FT offers several tiers of access: a few free articles without registration, 10 with registration and then access through subscription. The big eye-catching FT recent announcement: Content revenues are surpassing its print advertising take.
Is the FT experience relevant to the Times? Yes, no and we don't know. That's in part, what makes it a fascinating experiment to watch. FT.com managing director Rob Grimshaw has told me how much the company continues to learn about customers, based on its work. One major key: getting real smart about data. The FT has hired data whizzes, gotten outside news industry thinking working with the ideas of companies like eLoyalty and people like Jonathan Mendez, to expand its knowledge base -- and then has worked the knowledge. Yes, we know business/financial content has been the leading edge of paid content, so far, but the modeling under the FT model may be the most instructive here.
What's the downside? Other than major blogosphere blowback -- winds developing tweet by tweet -- the Times runs the risk of TimesSelect 2. If readers, and lots of them run into paywalls and decide to quickly move on to still-free sources -- sources as top-notch as the BBC, Reuters, NBC, NPR and many more -- then the model could fall apart: the Times would lose its mojo as top digital (non-aggregator) news site and retard its digital ad potential. That's what makes it a big bet.
What happened to the membership scenario? One strategy the Times considered and is now apparently letting go of is membership. That would have been staying all free, but, NPR-like, asking those readers who really value "the service" to pay up. MinnPost has surpassed 1500 members in the Twin Cities, while GlobalPost has signed up about 500. Membership is promising, but tough, and ultimately, it appears the Times believes metering will pull in far more money.