Somewhere in the world today a printing press operation is preparing to go dark. Mind you, it's not a universal phenomenon; in markets such as India, where a burgeoning middle class is hungry for news and not yet equipped with an abundance of electronic media sources, print media is actually growing. Scholarly publishers are still doing well their premium journals and custom print for B2B and consumer markets is thriving. But in many developed media markets print operations are struggling to stay alive, with 2010 expected to be a year in which newsstands begin to display significantly fewer titles. Barnes and Noble, with its Nook ebook reader, offers free wireless in their stores as a bundled part of the service, trying to encourage both browsers and coffee-drinkers to make more use of their "big box" stores real estate. It's a Web-eat-paper world, and the publishing industry is wearing newsprint shorts.

Labels: aggregation, B2b media, consumer, Custom Printing, Google, media

Yes, there is a future for the content industry in media and enterprise markets, and the Software and Information Industry Association Content Division has been charting it for several years now at its Information Industry Summit events in New York City. This year's IIS is drawing more than 300 executives from leading content and technology companies, a good crowd in the middle of a dismal economy. No surprise, given the star-studded line-up of speakers that was assembled by the Content Division this year. You might say that these people are documenting a future that people have been talking about for many years and that finally arrived - a future in which the Web dominates the dialog on profits and products on a daily basis, even as high-value premium products punch through to define new opportunities for value in enterprise and media publishing. Key to that trend is the rise of technology companies that are driving change in major publishing organizations, which enable publishers to define new relationships with their clients. Are all of these publishers ready for this ever-present "future?" Let's see what these experts have to say. I will be posting on our events blog throughout the day and linking the posts to this entry. You may also find my conference Twitter messages (and retweets) here.

Labels: authors, books, conference, content, enterprise, events, First Research, information industry summit 2010, media, Publishing, SIIA, Social Media, speakers, Technology

What a year it's been.

Labels: AP, bing, Business Information, content, enterprise, Google, google wave, media, Microsoft, Murdoch, Social Media, Twitter, Windows 7

I had an interesting exchange on Twitter today with Rafat Ali, founder of paidContent.org and a person who I respect and admire greatly for his insights into the content industry (not to mention for having blown the socks off of many a trade pub over the past several years). Rafat had pointed out in a post on paidContent that The New York Times had started to use barrier ads on their iPhone applications, something that he found to be very intrusive. I couldn't agree more on this point; most media companies view mobile applications as little more than Compuserve-like kiosks from which they can serve slightly jazzed-up versions of their Web page content. With that in mind, it shouldn't surprise us that the NYT or any other media company will be intent on carrying over its ad strategies to these walled gardens.

Labels: Android, app store, applications, apps, Google, iPhone, media, mobile, rafat ali

In the beginning, there was the CPM - that enduring measurement of how many thousands of people were exposed to an advertisement as a benchmark for gauging its value. But with the rise of online advertising, CPM impression measurements began to compete with metrics such as Cost Per Click, the number of people who actually used a link on an ad to visit an advertiser's Web site. Here at last was a metric that proved that online advertising really worked - even though relatively few people actually clicked on these ads.

Labels: advertising, B2b media, comscore, consumers, display, enquiro, First Research, Google, media, opa, Social Media, Social Media Club

When Gordon Crovitz left Dow Jones several months ago, I knew that his experiences in helping to build the most successful premium online news brand would be likely to result in good things somewhere. Gordon’s insights into the value of traditional journalism and his online savvy are an unusual combination in the world of today’s content industry. So it was with some interest that I have been learning about Journalism Online, a new initiative captained by Crovitz, content industry veteran Steven Brill and former cable industry CEO Leo Hindery. In a detailed press release – more of a mini-business plan, actually – the Journalism Online (JOI) team has outlined a multi-pronged strategy to enable traditional journalism to reap new revenue streams from online sources.

As many of the elements of the JOI plan are in sync with what Shore has been advocating for many years to promote the health of premium content sales (I briefed Crovitz on the concepts of The New Aggregation about five years ago), I would be contradicting myself to say that his team’s plan doesn’t hold water. In fact, much of what Journalism Online advocates is sorely needed in the news industry and will be likely to offer professional journalists a chance to benefit from more sensible online business models in tune with how content is actually distributed and consumed online. However, there are some troubling aspects in both the details and the broad brush of this plan that should be considered carefully by publishers as they weigh its merits.

The first concept in the Journalism Online plan is really a no-brainer and long, long overdue. JOI would set up an online system that would enable anyone to sign up once for access to premium news content across the Web. Payment models via this system would vary, and would include subscriptions for individual premium publications, pay-per-view access and royalty-driven payments in a cross-source subscription model. This would enable any publisher participating in Journalism Online to share in common payment and billing infrastructure that would make a wide variety of premium business models possible. While JOI does not target mobile and television markets explicitly, clearly this is a system whose basic cross-source payment model based on open Web access can be easily extended to other content delivery networks.

So far, so good, most especially on the cross-source royalty model. In essence the Web is a broadcast medium that enables people to tune into multiple streams very easily, so tuning premium content delivery into a payment model more like radio’s royalty payment system for music producers is a strong plus. When specific content becomes very popular online, the spike in views of that content can result in direct revenues to its producers. In theory this helps to resolve the ongoing dilemma of having to expose content to search engines that’s monetized with ads that just don’t seem to take advantage of oftentimes brief spurts of interest in news items to the point of paying the bills for many publishers. If the QPass cross-platform payment system of ten years ago had not flopped by trying to control content distribution via their service we’d have had this type of payment management service in place years ago.

The next leg of Journalism Online’s plan is a little more shaky. JOI has put under its wings two of the most prominent legal talents in the U.S. – former Microsoft anti-trust attorney David Boies and former U.S. Solicitor General Ted Olson – to lead some strong-arm negotiations with search engines and online aggregators to pony up licensing and royalty fees for the right to link to JOI member content. While one has to respect the considerable judicial, political and corporate gravitas of these two legal heavies, I am concerned that their efforts seem to be misplaced. There is now a substantial body of law which makes it clear that indexing a link to a headline is not a crime and falls comfortably into the concept of fair use of copyrighted content. By the logic outlined in Journalism Online's stated focus they should be suing newsstands in cities across the world for exposing the headlines of newspapers to people walking by, or charging millions of dollars for copies of the venerable Periodicals Index on library reference shelves. I believe that this tactic is in large part a sop to news publishers who have been relying thus far on the Associated Press’ failing negotiations with Google and other search engines based on similar issues.

Strong-arm legal tactics for search engine licensing are also largely unnecessary, in large part, if the JOI system works as it ought to. Access policies could be enforced on all participating publisher sites, and terms of bulk access licensing could be managed for search engines and other corporate entities from the same system that services consumers. It’s more likely that the JOI legal team is a stick for the carrot of negotiating some meaningful price points for bulk indexing access – price points that are likely to disappoint many publishers, since the search engines know that news ad revenues would die without search engine links. What’s more promising is having legal and technology infrastructure in place that could facilitate bulk relicensing of content for reuse in new content aggregation schemes such as online mashups and in enterprise software applications.

The most concerning aspect of Journalism Online, though, is the sense that their team harbors a dogged determination to preserve the status quo at traditional news media outlets in the face of more than a decade of change fostered by online access to news. The following quote from Brill seems to set the tone for much of what JOI is trying to accomplish:

“We’re also convinced,” Brill added, “that readers, who have been paying billions of dollars a year for print journalism, will continue to support journalists by paying a modest, fair price for original, independent, professional work distributed online. They realize—as we do—that quality journalism is a vital component of a functioning democracy and free market.”

While I would agree that many people are willing to pay a premium for high-quality products and services, the implication in Brill’s statement is that they are out to support the journalists creating the news in a way that will sustain the traditions of print journalism. Given that many journalists caught up in newspaper cutbacks now have to accept wages that are getting closer to those offered for low-level services jobs while many media executives continue to do rather well by themselves, I think that it’s fair to say that the merits of the print journalism model's ability to support journalists are largely at question. This sales pitch for Journalism Online is not so much about preserving journalists as it is about preserving some portion of the lavish profits once enjoyed by a news publishing industry that no longer has near-exclusive access to publishing technologies. A “modest, fair price” doesn’t sound like the type of monies that will support glitzy skyscrapers that were paid for by those technologies. Promises and realiteis seem to be out of sync in this instance by a broad stretch.

In sum the Journalism Online initiative holds out a great deal of promise for the news media to revise its thinking on how to acquire revenues more realistically in an online environment, albeit with some sentimental froth around the edges of that promise for those not quite ready to accept the true value of news in today’s online publishing environment. In a world that has empowered over 1.6 billion people as publishers, it’s no longer realistic to think that only a handful of people who carry the official title of “journalist” are defining the supply of quality information and insights in the world. The key factor that Journalism Online really doesn’t address at all is that the news industry is surrounded by valuable sources of information that leave them struggling to define a fundamental value proposition, regardless of how it may be financed. News organizations are also surrounded by technology platforms that make it possible for consumers and enterprises to aggregate, filter and analyze news far more efficiently than via their own publishing platforms. The “let’s tame Google” approach to trying to control content linking and access belies the reality that the contexts in which news is most valuable are increasingly far away from publishers’ own Web sites. There's some tacit acknowledgment of this concept in the JOI positioning, but only time will tell if they can emphasize licensing of content for reuse efficiently enough to make a real difference for news producers who must compete with and complement new sources of engaging news and information.

The search for subscription and royalty payments fostered by Journalism Online also tends to gloss over the ad-driven culture of most of today’s news organizations that restricts fairly radically what topics and personalities gain their attention in their search for an increasingly limited “truth.” If JOI could help fund a broader approach to journalism that gave coverage to less ad-worthy topics, then truly it would be living up to its ideals. It’s far from clear, though, that the news organizations that Journalism Online intends to support are likely to maximize the funding of such “news for the sake of news” journalism any time soon, though. But as an alternative to AP’s trenchant response to online publishing, it at least offers some hope for the news industry as a whole as a means to overcome some of the challenges posed to it by online content distribution capabilities.

Labels: B2b media, brill, crovitz, Google, hindery, Journalism, journalism online, Licensing, media, Monetization, News, Newspaper, royalties, search engines, subscription

As CNET reports along with others the launch of voice over Internet Protocol (VoIP) phone services via an iPhone application from Skype the world does not seem to be shifting on its axis, yet it's a significant step towards a new era in mobile communications. Already the introduction of Web capabilities on Apple's iPhone became the cornerstone of the appliance's widespread appeal among mobile content enthusiasts, fueled by the iPhone's Web browser that works pretty much as any Web browser should and by the iPhone AppStore's content applications that make use of Web communications. Now that VoIP is available on the iPhone - presumably with Apple's tacit blessing - one wonders who is eating whose lunch in the battle for the future of mobile services.

Certainly in the U.S. you can give the opening round of mobile battles to AT&T, which inked an exclusive deal with Apple for the iPhone's launch similar to exclusives that Apple negotiated elsewhere in the world. But as part of that deal Apple got AT&T and other global carriers to subsidize a huge chunk of the iPhone's retail price, enabling it to spread like wildfire amongst the "gotta have" gadget crowd. Now that VoIP services are beginning to make their debut on the iPhone - followed soon by emerging voice services by Google via their Web sites and, quite soon, via their Android mobile platform - the question becomes, have the mobile phone carriers been subsidizing the emergence of cross-network voice communications that will break their voice and content pricing strategies?

If this is the case, then I can't say that I can offer them much sympathy. AT&T happens to be the carrier for my local telephone service, which still has me guessing virtually every time whether a call to the towns next to us will be a local or "long distance" call. If I didn't need a copper-wire circuit for my home's burglar alarm I'd be done with them altogether. While VoIP is hardly a perfect voice medium, for eighty percent of our communications is just fine. Moreover, for many younger people spending more time texting than speaking on their phones it may be more than enough most of the time. In the meantime we're stuck with voice and data plans on most mobile carriers based on the premise that voice is a doggone hard service to provide. Well, that's good for the tech players such as Apple who want someone to subsidize their push into mobile services, but it is at the expense of a broader iPhone-less marketplace that is in effect subsidizing the upper end of mobile content comsumption.

This is not a scenario that is likely to change gracefully for the communications carriers. Web and VoIP-based services are going to start dominating mobile communications far more quickly than many imagine, especially as Google Android's cross-platform mobile operating system offers struggling communications companies some alternative pricing and marketing strategies. In the U.S., for example, Sprint is moving to lease out some of its underutilized mobile bandwidth to device and services vendors other than smart phones. How long is it before a number three or number four mobile carrier begins to smell the coffee and begin to offer pricing that reserves traditional mobile voice communications as a "just in case" or high-quality backup to a predominantly Web-based communications plan? Not long, by my estimate.

Content companies should bear in mind this more-rapid-than-expected shift towards Web-biased mobile carrier pricing when contemplating their own mobile pricing and marketing strategies. Already with the iPhone AppStore publishers and other content suppliers see the outlines of a premium content strategy that emphasizes functionality as a key part of their services as much as information. But as the Web and VoIP push in at an accelerated rate to drive more competitive carrier pricing, it's likely that revenues from these applications are going to be the icing on a much bigger cake of content services for the greater marketplace that will resembe more the Web as it is today than any return to a Compuserve-like "walled garden" era of application-enabled services.

The iPhone AppStore is a model for the emerging electronic newsstand era, but the content that will power the most successful of those applications will not come from a particular branded content producer oftentimes. The subsidization of iPhones by the carriers makes the prospect of endless premium content revenues enticing, yet as those subsidies fall by the wayside and the broader marketplace turns to mobile Web content it's doubtful that the novelty of mobile content applications alone will be enough to power publishers' mobile revenues. In short, the mobile Web has arrived and is going to drive publishers to have to confront the same issues of commoditization and increased competition that it faces today via desktop and laptop content consumption. Most publishers may look at Skype's move as little more than a bird flying by, but for those that know it's the canary in the coal mine of old-era mobile communications content pricing.

Labels: Apple.mobile, iPhone, media, Skype, VoIP

A fundamental problem that the publishing industry faces in getting revenues from online content is that most of the value that can be created from their content lies beyond their own Web sites and portals. With billions of Web publications vying to get people's attention and a relative handful of professionally produced publications to compete for that attention it's no small wonder many media executives are humming the now-familiar "content in context" meme as they ponder how to make use of the Web's ocean of content to promote their own wares. The sad truth, though, is that most publishers are ill-equipped to get any money from their content beyond their own online publications. Most media organizations have tiny content licensing business development teams that typically trudge through protracted deals with a handful of publishing partners, leaving the lion's share of potential revenues from partners on the table.

Attributor Corporation has been hot on the trail of how to close the gap between potential revenues from content used across the Web and and the ability to extract those revenues. The Attributor system works by listening to feeds of content from participating publishers. Attributor captures what they've published and then compares it to content that's been published on the Web. When Attributor finds content that's a full or partial match it compiles content usage reports for clients who can then can use automated tools from Attributor or their own methods to pursue the reuse of their content from a business and legal perspective.

How big is the opportunity for monetizing reused content? Recently Attributor shared with me some research based on content from prominent publishers' Web sites fed into its system along with Compete.com usage data that surfaced some profound statistics. The key thought-provoker emerging from this research is that the audience for people viewing content on sites that were not active syndication or licensing partners was more than five times larger than the audience on the publishers' own sites. Almost half of these largely "passive syndicators" were copying 90 percent or more of the content from publishers' articles and more than 70 percent of the copied articles were using at least half of the available content from articles. Before the publishers reading this post slip on their hair shirts and moan in protest, please consider this first: what publisher wouldn't want to have a 5X increase in potentially monetizable content inventory with no additional overhead?

The research also indicated that two-thirds of the sites using content from these leading publishers were providing links back to the publisher's sites, indicating that they were at least nominally cooperative in building traffic to their sites. Armed with data from Attributor, publishers can pursue on a more highly automated basis Web sites that use their content and turn passive syndicators into active publishing partners - and in the process of doing so shift the balance of traffic back into sites that will feed revenues to the publisher. Attributor projects that using their technologies could help to reduce non-cooperative passive syndicators significantly, potentially doubling traffic captured at publishers' own sites and nearly tripling the traffic visiting cooperative syndication partners. No doubt it would also help content reusers pressing the boundaries of fair use policy to understand what individual publishers considered to be fair use more quickly and effectively.

Attributor sees its data gathering and analysis tools as a key to unlocking significant new online revenues for publishers. It sees at least two basic options that publishers using its data can undertake to establish revenue streams rapidly. Option one: Attributor helps publishers reclaim their fair share of ad revenues from ads served up by existing ad networks on sites using their content. This could in theory help for managing both active and passive syndication partners. Option two: enable Attributor to funnel ads from existing networks and publishers' own direct ad sales to syndication partners. Obviously there are other steps that publishers could take based on Attributor data, but either of these options suggested by Attributor help both to reclaim ad revenues for legitimate publishers and syndicators efficiently and to reduce the revenues fed out by ad networks to non-legitimate syndicators.

To make it easier for publishers large and small to get an idea of the potential for Attributor to help them monetize content they have launched FairShare, a no-fee service that enables people to get data on sites using their content from Attributor analytics provided in an RSS feed. FairShare will pump out stats on individual articles and how they've been reused on specific Web sites, including data on what percentage of an article has been used, whether the reuser is using ads on the page on which it appears and whethe there are linkbacks to their original content. As an option FairShare makes it easier for people using Creative Commons licensing to map their license terms to the patterns of use found in Attributor's Web site analysis. Although launched just a few days ago FairShare is already tracking more than 150,000 articles and has found more than 3.3 million shared copies of content. As seen in the example to the right, FairShare is finding sites that use just fair use snippets of ContentBlogger's content as well as sites that seem to take more than their fair share. If ContentBlogger were ad-supported and Attributor were funneling this data to the ad networks that support content clippers I could be seeing some automatic revenues from these sites. A nice thought in a slow ad economy, no?

Attributor technology has been launched recently as an underpinning for FreeWheel, a service that enables videos from YouTube and other outlets that are embedded on other Web sites to be served up with the ads that benefit the original video publisher the most. FreeWheel calls this concept "Monetization Rights Management," as opposed to the Digital Rights Management packaging that tries to keep others from distributing content themselves. FreeWheel notes - quite rightly, I believe - that legitimate viral distribution of content needs to be encouraged so that content can find its most valuable contexts. Once content is in a valuable context it can be monetized with ads and other marketing mechanisms that benefit both the creator of the content and the publisher that found a valuable context for their content.

As major publishers mull over the capabilities of Attributor technologies, hopefully they begin to see that it offers a key solution to the dilemmas of how to make money on content in an era in which controlling distribution is not only less feasible but also less desirable. To borrow from the language of my book Content Nation, the world is now a nation of publishers, a nation whose value cannot be ignored by traditional publishers as a source of monetizable contexts. Since most non-subscription Web content relies on search engines to maximize their ad revenues, Attributor's search-based technologies can enable publishers to understand who's using their content with the same tools that those publishers use to drive monetizable traffic to their sites. Using Attributor data and tools can enable a highly automated and efficient approach to revenue generation from viral distribution that would eliminate friction with those outlets that use a publisher's content fairly and that can allow publishers to keep on top of "bad apples" on a daily basis.

As major publishers such as The New York Times and The Guardian begin to set their content loose via sophisticated programming interfaces the Attributor concepts of using searching and content identification to establish commercial relationships automatically with publishers using their content can open up an era in which reused content is creating higher value and revenues rapidly for publishers with lower audience acquisition costs. With revenue acquistion schemes such as Attributor in place publishers can concentrate more on making their content as useful and as accurate as possible - and leave the inventiveness of where it's going to be most useful to the world at large.

Certainly publishers will continue to compete to make their own publications a destination of choice, but with only thousands of traditional publishers and billions of self-empowered Web and mobile publishers the time has come to use technology to harvest the value of content in as many publishing contexts as posssible as efficiently as possible. Most especially in the news industry, where getting people's attention in fleeting moments is increasingly difficult, the ability to harvest revenues from content reuse and linking more automatically is an absolute necessity.

This need to chase the contexts of content use in order to make money in online media does not mean that copyright is a dead concept. Far from it: copyright ensures that the creators of original works of authorship have the ability to claim ownership of the intellectual property that is rightfully theirs, especially when it is used in contexts where its use is harder to verify, such as in enterprises and in private communications such as emails, photocopying and reprints. But it's important to remember that the concepts of copyright were introduced into law when publishing was still a relatively fledgling industry, with few commercial outlets available and with the need to support getting information and ideas out to the public via a still-young technology a crying necessity. The "printing press" of today is not any particular Web site or service but the Web as a whole: every person has the potential to play a role in the mechanism of publishing. As such, copy rights, while still relevant, have become less important than context rights - the ability to say how participants in a global peer publishing and aggregation process should recognize the value of a creative work. Nearly three years ago I introduced this concept at a presentation at BookExpo in Washington, DC, using the above square logo as a symbol for context rights.

Today in the work of Attributor we see the beginnings of the effective monetization of context rights taking form. I am hopeful that publishers will finally begin to see the outlines of how to use technologies such as Attributor to forge more effective relationships with the global publishing mechanism of Content Nation to benefit the creative forces behind their content and to create new ways to define the value of their brands. It's a far different methodology than most publishers are used to, but in a world in which the fundamental nature of publishing has changed far more radically than most traditional publishers have dared to acknowledge, it is time for publishers to embrace context rights and to define their value propositions more effectively in a world whose very survival may depend upon the power of ubiquitous publishing to solve problems facing humanity rapidly.

(Full disclosure statement: I really have nothing to disclose, I have had no past or present commercial relationship with Attributor. I just believe that they are pursuing one of the most effective routes to content monetization available today and I hope that publishers pay close attention to their efforts.)

Labels: Attributor, Attributor Corporation, Creative Commons, Digital Rights Management, FairShare, media, Monetization, Money, Publishing, revenues, RSS, YouTube

For years major media companies have tried to finesse their transition into online markets. They've made investments in portals and ad-serving systems. They've built up online communities and search engine optimization schemes to maximize revenues from engaged audiences. In fact, publishers have done a lot of good things to make a stronger transition to online revenues. Yet in spite of these efforts, one thing that they haven't done is to prepare for the day when they'd have to rely on online media to carry their bottom lines.

It appears that this day has come. And most publishers aren't ready. By a long shot.

Where do we start? The highly leveraged newspaper deals of the past few years that were based on fantasy projections of "cash cow" revenues? As formerly solid mid-market papers such as the Seattle Post-Intelligencer are prepared for sale (and possibly going online only), as major papers such as the Chicago Tribune abandon broadsheet sales on newsstands in favor of a truncated tabloid edition, as television producers wrestle with online portals that threaten to take the steam out of broadcast and cable deals, as music companies stumble into another year of falling CD sales and wrestling matches with social media playlist aggregators, as...well, you get the picture, I assume. Nobody has a real clue as to how they are going to get robust revenues from online distribution and many old channels of distribution are drying up quickly in a slow economy. In trying to keep old cash cows alive, the potential growth markets for online content have been stunted from a lack of truly inventive approaches to revenue generation.

Online display ads? Spare inventory is running at half the rates of last year. Online subscription? It works for The Wall Street Journal and plenty of enterprise services, but few others have been willing to risk the lack of exposure to search engines and social media. In the meantime, media organizations eager to trim staffs after consolidation deals are left with less and less editorial staff to generate attention-getting content. The presumption that online revenues for traditional media properties would ramp up at a pace that would offset declines in revenues from traditional outlets is essentially false. Media companies have under-invested in online revenue generatiion and are now faced with the uncomfortable duty of trying to think their way out of both an ad recession and an idea recession.

This is not to say that there aren't bright exceptions to this rule - many great brands continue to thrive, albeit on a slimmer slice of revenues and market attention than before - but there is a fundamental revenue gap that is not going to close any time soon for many publishers. David Carr highlighted this in his recent New York Times article, mentioning with only part of his tongue in his cheek that publishers should take advantage of oversized iPods expected this fall to facilitate pay-as-you-go downloads of content. Carr is on to one essential point: ads on their own properties can't pull the full freight for most publishers in their traditional media, and neither should they pull the full freight in online media. The main problem, though, is that media producers seem to be searching continually for some magic-bullet device portal that will solve their problems and recreate, at one level or another, the "walled gardens" that they had relied upon for revenue generation in the past. These artificial scarcity plays, though, generally strike audiences as, well, artificial, and rarely float on their own without exceptional features and content from a broad spectrum of sources. Even then, the next great portal or platform comes along and the game is off.

Will the revenue gap ever close to the satisfaction of today's publishers and media producers? Probably not. Smart publishers know now much technology has passed their brands by and how much technology has enabled other brands to sweep into their audience's mindshare, but it's an uphill battle. They are up against billions of dollars invested in new publishing technologies that have not benefited their own products before benefiting the content produced by Content Nation and by any number of professionally-oriented startups that have their own take on content aggregation and production. Latest example: The Printed Blog, a startup that is launching a twice-daily free newspaper in Chicago based on content aggregated from popular local blogs. Even print itself is not a barrier for technology that can aggregate attractive content sourced from anywhere.

OK, enough of the doom and gloom, where's the good news? The good news is that there are business and payment model options for publishers to explore to make better use of their key publishing assets:

• Micropayments. Micropayments are not regarded highly in many circles, but they're a logical extension of existing business models such as newsstands (a quarter for the New York Post at the train station? Essentially a micropayment.) and can be implemented more effectively using technologies such as Attributor that track use but don't necessarily limit distribution. A widespread embeddable micropayment system would enable publishers to expose limited content through viral distribution and still enable direct revenues on a transparent "I'll try anything once" impulse buying system that monitors access passively. It may turn out to be only a few cents per view - something along the line of messaging units on mobile phones - but it could create a fundamental offset in revenues that could begin to build a bottom floor for revenues that keep the doors open.
• Agnostic aggregation. The most successful plays in online publishing are far more willing to treat anyone's content as potentially interesting content for their audiences. This may frustrate traditional journalists at times, but since there are fewer of them making a decent living these days to be aghast at the idea of their content being beside an independent blogger, perhaps it's not such an unthinkable thing in the long run (yes, there are probably guild/union issues, but realistically it will happen). Having spent years trying to define technology that would enable aggregation to be controlled along the lines of traditional media business development, perhaps media companies can invest a little more heavily in aggregation plays that do not require top-heavy approaches to aggregation.
• Focus on talent support. With all of the talented journalists and media producers out there, you would think that someone would decide to recognize that the trend is towards "the talent" powering publications as independents and focus more on getting their content in the best channels possible. If it's important for a journalist to be able to follow a particular story independent of daily publishing pressures, then why not make it easier for journalists to do so with high-visibility distribution on a wider variety of channels? Exclusive access to specific editorial teams no longer seems to pay the bills, anyway. I think that we're likely to see a content bidding system emerge not unlike that used for online ads which will allow independent journalists to sell off the rights to their work to key media outlets on an on-demand basis. If making money in publishing is about getting the right content in front of the audience at the right time, why not make it easier for both the content producers and the content distributors to optimize the content side as efficiently as they do the ad side?

Whatever way you look at it, today's publishing environment has put the spotlight on The New Aggregation that I presaged several years ago and has forced publishers to think about specific assets that they have and to use them more effectively as individual components that can serve markets in a variety of ways - not just through their traditional branded outlets in traditional ways. Be it news, databases, entertainment or any other form of media, the winners will be those that can meter out the value of their content production to facilitate on-demand aggregation far more efficiently than they have to date. The brand isn't the bundle - the brand is the ability to bundle what's most important today.

Labels: advertising, busines models, business media, economy, media, music, newspapers, subscription

Editor & Publisher notes along with many others the announcement by the Tribune Company that it has given its two-year notice to discontinue receiving content from the Associated Press. The E&P article cites the recent rate hikes from AP as a key factor in its decision, but other accounts also highlight concerns raised by other newspapers subscribing to the service regarding AP's cutting back on local coverage and its efforts to create a more competitive position for its own content through non-newspaper outlets that compete directly or indirectly with member outlets. Whatever the exact reasons in these instances, the pullout echoes sentiments surfacing in some of Shore's private research that indicates a growing dissatisfaction with AP as a source of content.

Although some of the growing rebellion against AP services no doubt is fired by cost, content and competition from the membership-driven service, there is another key factor that is driving newspapers to reconsider AP as a source of content: the marketplace. In local newspapers and media outlets there is a dwindling interest in national news as a revenue driver, as 24x7 online and broadcast sources diminish the need of local residents to turn to their hometown papers for this view of the world. There is more money to be had by many of these papers by building up deeper and more engaged local content and by building special interest sections for holidays and other event-driven interests that will attract local advertisers more effectively. Put simply, with dwindling budgets to cover world and national events many papers are making the choice to rally their limited resources around locally focused content and advertisers.

The other key factor in the challenge to AP, though, is that there is an increasing reservoir of options for media outlets that want high-quality editorial to insert into their publications. Link exchanges, content swaps and other cooperative online publishing options enable the online editions of local papers to insert content from other newspapers and media outlets into their own sites and to host their own content elsewhere at partner sites. In other words, when revenue isn't all about what happens on your own Web site but also about driving more traffic to inventory from relationships with online publishing partners there are more options for local publishers to drive up both page inventory and audience engagement. AP delivers content inventory, but not the kind of inventory that's most likely to engage the audiences that value a local newspaper brand in a way that will drive the highest revenues.

While some newspapers seem to question the refocusing of AP's content on more analysis and opinion pieces as an additional point of concern, in general the real issue for most publishers confronting their rising AP charges is that as good as AP news can be it's not what will drive their profits moving forward in most instances. While AP has spent a great deal of legal and marketing effort to shore up the value of the AP brand through copyright protection and brand positioning, it has in many ways failed to identify how a cooperative news distribution service can help its members to generate more revenues cost-effectively. With their members cutting their own collaborative content deals left and right, oftentimes with providers of unique online sources of content, the power of the Web to make these deals work without AP's infrastructure is the chief challenge to AP's future.

All of this argues for a selloff of AP in the next couple of years to an owner that can take advantage of its extensive network of reporters and stringers to package its core assets more effectively to a broader base of clients beyond dwindling newspaper properties. News Corp would be the most likely taker, in part because of Rupert Murdoch's designs already in place to provide better global marketing for Dow Jones resources (already aligned closely with AP in financial markets), though others such as Google continue to be bandied about. The missed opportunity in this, of course, is the opportunity to redefine AP as a new kind of distribution channel for high-quality content based on a new generation of news producers and to enable it to include a cross-platform network of news enthusiasts who will add value to its brand based on their enthusiasm for commenting on news content. If everyone wants to do content swaps and link exchanges, for example, why isn't AP positioned as a channel designed to make that easier?

On this note I think that one of the great missed opportunities for AP has been its failure to adopt a strategy for embracing social media more effectively. While an acquisition of a player such as Newsvine would not have stanched the bleeding based on its core asset issues it would have at least started to position AP as a service that could center communities around key news assets. If audience engagement is the key to online publishing profits, catchy headlines and great ledes are not necessarily going to help your members as much as giving people a good reason to stay on a page - something that good social media can help to do very effectively.

AP's pricing will help to define for its members what AP needs to do to cover costs for existing editorial operations, but that's little more than an opening argument when AP members are looking for concluding remarks as to how AP will help them to drive revenues more effectively. It's probably best at this time for AP to seek a parent aggressively that will help them to maintain their core editorial assets while enabling them to invest in a broader array of content assets and services that will bolster their value over time. By all indications current AP members will not be the ones to sponsor that investment, so it's most definitely time to go find buyers to make those investments while there's still a good opportunity to do so.

Labels: AP, associated press, distribution, media, Murdoch, News, tribune company

In years past one could visit the head office of Bloomberg, L.P. and peer into the newsroom right off of the main lobby. Mike Bloomberg's office was right off of that news floor, with a glass partition that segregated him about as much as a head of an investment bank trading floor is separated from his or her operations. This was a natural for someone whose career took off in the trading rooms of Merrill Lynch driven by traders responding to real-time news events, but it also underscored the importance to Bloomberg of making authoritative market-moving news a key component of its success.

Times change, and now Bloomberg has announced the appointment of Time Inc. and Wall Street Journal veteran Norm Pearlstine as their first Chief Content Officer, a move that one presumes will enable Bloomberg to leverage its news and data assets more effectively in rapidly changing professional and consumer business news markets. Certainly this will help Bloomberg to move its revenue base more heavily away from professional markets, where its ubiquitous content displays are encountering fewer seats in an increasingly automated and specialized securities trading industry.

As I've noted for several years the financial information industry, like many enterprise content sectors, is moving away from a "bell curve" market model, in which lots of money is made off of many people equipped with subscription content delivery, to a "U"-shaped market model, in which lots of money is made off of highly automated content services and highly analytical services for a small cadre of decision-makers, with your typical "seat" revenues being realized more profitably through a media model where delivery has been commoditized as a benefit. Bloomberg has been relatively slow to respond to these changes, sticking to its highly profitable professional products but only recently beginning to up investment in its media brand audiences.

That's a challenging formula for growth given the continuing evolution of both Thomson Reuters and Dow Jones in supporting media markets more aggressively. Bloomberg 's online operations have grown audence significantly in the past year, almost doubling its online portal audience, but still trails Reuters and Dow Jones significantly for global markets. Thomson Reuters reported 18 percent quarter-on-quarter growth in its media sales in its first combined reports, an indication of how its global presence in online news markets has helped to fuel profits. So while Bloomberg's online, television and licensed content is strong, there is room for growth, especially in overseas markets.

But undoubtedly the increasingly sophisticated presence of Dow Jones has to loom large in Bloomberg's radar as much as the newly combined forces of Thomson Reuters. News Corp has managed this acquisition very wisely so far, retaining an online subscription base that both Thomson Reuters and Bloomberg lack while beefing up its Enterprise Media Group with its Generate acquisition. As these kinds of products that create professional value out of media sources begin to be adopted to Dow Jones' online media offerings Bloomberg will be challenged to devise both more powerful media offerings and a subscription community willing to pay for them. This will be at least as tricky as building a global content brand out of its existing news operations. The real challenge for Bloomberg is to respond to both new opportunities for media revenues and new challenges to high-end content analytics and real-time sales intelligence services in its core markets from newly strengthened players such as Dow Jones.

Pearlstine brings a deep and impressive legacy in the content industry to Bloomberg, but more importantly he brings an outlook on the media business which recognizes that the days of a handful of news monopolies dominating news gathering and dissemination are drawing to a close. To succeed with an electronic news brand one must not only excel at traditional journalism but as well one must excel in making news valuable in whatever context an audience finds it to be valuable. While it's not clear that Pearlstine's insider view of the media industry will lead Bloomberg to new successes in adapting to this more contextual view of the content marketplace he is likely to help open doors for Bloomberg to build out a more competitive brand for both online markets and for print markets seeking out new sources of editorial content.

Labels: B2b media, Bloomberg, financial information, media, News, Norm Pearlstine

There's the usual spate of moans and groans about print profits coming out of the Argyle Executive Forum on Leadership in Media, according to Red Herring, which featured insights from many key figures in today's news media markets. This negative outlook is underscored by News Corp's withdrawal from bidding for New York area newspaper Newsday based on it being "uneconomical" and setting the stage for a potential takeover of the paper by Cablevision. While revenues continue to climb from online content at news outlets classified revenues are still highly vulnerable from online competitors, making it hard to translate growing online audiences into profiles that resemble print.

There's not much new in all of this, to be sure, but I was interested in the following comment from the Argyle conference:

Norman Pearlstine of the Carlyle Group told attendees that newspapers enjoyed a brief period of monopoly that attracted investors and convinced many families to take their businesses public. However, he said, for most of its history, the newspaper business did not enjoy the double-digit margins that characterized the 1980s and 1990s. “At the end of the 19th century there were 29 newspapers in Chicago,” he said.

In other words at the end of the day perhaps the consolidation in the print industry of the past fifty years or so, first in response to rising fixed labor costs and television competition and then from the Web, created an illusion that highly capitalized media operations would yield superior results in an industry that has historically favored diversity in lower-margin operations. By creating larger swaths of exclusivity for fewer brands in major markets, newspapers and other print outlets were able to attract advertisers for several decades and provide reach at the same level of television markets. But in doing so they never really addressed the lack of technologies that could deliver higher margins except through higher production volume. This created an artificial illusion of technology scarcity that helped to drive both margins and the expectations of people creating print content. As long as there was a steady stream of companies to acquire to build up the illusion of scarcity, this worked rather well. But we seem to have come to the end of the run of worthwhile mass market print acquisitions. Big will probably get bigger yet if government regulations allow it, but to far less avail.

By contrast, the Red Herring article highlights how Playboy Magazine was one of the very first to invest heavily in Web technologies and to learn how to make them both profitable and attractive to advertisers and audiences, including heavy investments in online video and multiplatform delivery. The result: a highly profitable and attractive operation that offers some unique appeal to online audiences based on both content and branding. Instead of focusing on acquisitions in a sea of abundant competitors to create more artificial scarcity, Playboy worked to create something more appealing what would create quality that would be hard to replace.

Another important contrast comes from a recent MediaPost article, in which Ken Doctor points out that local newspapers are still doing fairly well, in part because many local advertisers as well as audiences have yet to be able to leverage a confusing array of online options effectively. This creates a real scarcity of audiences focused on local online content that are easy for advertisers to attract with some scale. Online alternatives are catching up fairly quickly in terms of content quality, but until GPS-enabled advertising services grow more sophisticated local print will continue to offer a ray of hope for print.

The bottom line is that it's far from clear that major media outlets as we know them really need to exist as they have for the past fifty or so years much longer. If the historical state of content is a wide variety of focused outlets with relatively low revenues, low volumes and low margins, then maybe what online publishing is beginning to usher in is simply the return of publishing to its more normal state. The difference with current markets is that electronic content aggregation makes it relatively easy for a wide variety of publications to leverage common technology. For example, individual weblogs such as ours use a tiny fraction of the power found in Google's Blogger.com infrastructure. So by focusing their capital mostly on pure infrastructure, Google has created true scarcity of highly scalable publishing capabilities that can service both localized and broad audiences very effectively.

Notably even companies like Google go out and buy market share through acquisitions - online video outlet Blinkx is rumored to be on their short list of short-term possible acquistions -
but these tend to be acquisitions that bring in both unique technologies and unique audiences. Where major media companies look mostly at reducing costs through online and print publication consolidation, the Googles of the world stay focused on creating more unique product value through acquisitions. With such an insistence on sticking with old metrics for performance it's not clear that established media companies can commit their capital effectively to gain a market advantage as long as they continue to focus on creating more artificial scarcity for dated products and dated delivery technologies. In the meantime private equity abounds to fund technology platforms that will take away the best opportunities for a wide variety of producers content with higher margins on lower volume and advertisers pleased with more focused audiences.

In other words, it's very unclear where the news industry goes from this point if they don't want to invest far more heavily in new electronic product development for more focused audiences. With a sour economy making it all the more hard to raise more capital for investment, expect media titans to continue to wrestle with their place in a content market traditionally dominated by smaller, more agile and more innovative players.

Labels: media, Monetization, News, News Corp, newspapers, print

The new video format wars came to an abrupt end recently as Toshiba gave up on the HD DVD format and accepted that they would have to move to the new Blu-ray format. The question may be asked, though, will consumers really care who won? I've been accumulating hardware to install an HDTV recently and going through potential support for storing content. One item that caught my eye: a one-terabyte (1,000 gigabyte) file server than can park itself on a wireless home network or a direct network connection. This little puppy will set me back all of about USD 550 online. That's about the going price for a Blu-ray disc player for a device that can store hundreds of movies, though certainly the Blu-ray disc devices can be expected to fall in price.

Nevertheless, with home servers becoming more and more economical, why would the entertainment industry dicker around with discs when in-home servers, on-demand cable movies and other service channels can ensure far more rapid delivery of content to interested audiences? Yes, it will provide in-store sales and help to introduce technophobes to yet another new media format, but isn't that a little bit like telling a blacksmith to keep on selling those horseshoes because you never know when those automobile people might get a hankering for using their old horse-drawn carriage again?

It seems as if the movie industry, like many other sectors in the content industry, is a captive of its traditional metrics. Faced with a new technology - HDTV - the movie producers said "Hey, now we can make more money on in-store disc sales - this is great." This of course locks them into a form of sales that's chasing yesterday's audiences: in an on-demand world of content, it's better to develop an on-demand system that can enable more people to respond to systems such as search engines and profile-matchers that can feed people the movies that would most interest them in the moment. If you can get a movie easily on an on-demand basis and it is priced to make it competitive with theatres, store sales and rentals at different points in its "shelf life" why would you focus so much energy on a format that will inevitably be the focus of piracy? In an economy in which our ability to enjoy libraries of old content stacked on a shelf is dubious at best, the rationale for disc sales has grown appreciably thinner.

Producers of all traditional media need to get far better at making their content discoverable and accessible in the venues that users value most. If I am on my mobile phone, make it easly for me to click on an icon or link when a movie is mentioned and queue it up for my viewing for the next five days. If I am reading a book review at a Starbucks, make it easy for me to go download it into my iPhone or to order a print-on-demand copy that I can pick up at Kinko's. Print magazine publishers floundered for years with getting their online models to work because they were unwilling to embrace similar basic questions of how to service their audiences. When Hollywood gets around to recognizing more clearly that they're in the audience serving business and not the film and disc distribution business hopefully they'll follow the lead of publishers who have already started to learn how to service their audiences the way that they like to be served. In the meantime that terabyte server looks like a tasty option to reclaim my bookshelves for...books? I don't know, now...

Labels: blu-ray, hdtv, media, video