Speaker: Daniel Sullivan, Assistant Secretary, Bureau of Economic, Energy and Business Affairs, U.S. Dept. of State

Innovation in software and communications helps to drive U.S. economic growth, high-paying jobs. State department knows how important your work is, 30 people dedicated to information industry policy and helping to create market oppotunities and social improvement, and yes, political freedom. Finally we recognize the continuing development of U.S. information industry is in jeopardy. 200 billion counterfeit content sold overseas. What is the state department doing? Answer is, a lot, it's a big focus.

Millions spent on IP enforcement on developing nations, embassises active in advocacy and education, Canada criminalizing camcording in theatres. Need to upgrade legal infrastructure, working on an anti-counterfeiting trade agreement, working with E.U., Japan, Canada, spread it to other countries. OECD, get their leadership statements to reference IP protection. Almost always spearheaded by U.S. government. Also when necessary not adverse to bringing WTO action for IP, two WTO cases against China. Facilitating market entry through trade organizations.

Free trade agreement agenda, will level playing field, included chapters in all FTAs - over 12 since 2001 - that go beyond global rights protection. Australian FTA, combating Internet piracy, Singapore, number of FTA agreements exceed all previous administrations combined. Since 2000, sales to countries with FTA have grown as trade agreements with the rest of the world. Focusing now on passing three more FTAs, with Columbia, Panama, Korea, all of which have strong IP protection and transparency regulations that are important to U.S. companies.

Columbia FTA - will lead to significant benefits, huge tariff differential, ours 0.1 percent, theirs 13 percent, agriculture much higher. Going to zero on both sides will increase U.S. exports. To fail to do so will be false populism.

One of our broader goals is to work to integrate parts of the world that are disconnected from the world as a whole and with one another, FTAs help also national security interests. Secy Rice - half the world lives on the edge of survival, greatest threats come from poorly governed states not integrated into global economy. Post-9/11, threats now come often from countries that are weak and disconnected from the global economic system. Private sector is far from a bystander. Our best ambassadors are oftentimes not ambassadors but business people traveling abroad reflecting American values. Salute this sector, your impact domestically and globally is important.

QUICK TAKE: Notable that most FTAs that help IP are with developed nations where global media companies already have strong interests, there's a strong desire by many to extend U.S. copyright length to other nations by these companies, at the end of the day I believe that this will slow down countries most threatened by the growth of nations less particular about IP.

Labels: government, intellectual property, policy, SIIA Information Industry Summit 2008, State department

Moderator: Lisa Bodell, CEO, futurethink
Panelists:
Jim Brock,CEO and Co-founder, Attributor
Steve Goldstein, Chairman and CEO, Alacra
Darrell W. Gunter, Executive Vice President/CMO, Collexis Holdings, Inc.ein

[A little challenged with technology in the short transition to this panel, apologies to early speakers]
Brock: We harvest and help publishers to turn lemons into lemonade
Goldstein: We package and focus on customers
Gunter: Can show key concepts on a topic, shine a bright light on topics such as science, can show seconds who's the experts in your field. Also provide hypothesis generation. Make scientists happy, improve their critical path.

Bodell: How to make innovation happen.
Goldstein: Many publishing have enormous assets and they don't apply innovation to the raw materials. We have something that's worth x, how can we make it 2x or 3x.
Brock: Blogs and mashups are laboratories, you can understand how to do it in your own organization. We'll tell you which articles got the most play in the blogosphere.
Gunter: Researchers set up a coffee shop, we can show you in ten seconds who's really connecting with one another.

Bodell: How you can add value to content?
Brock: Thinks may be copied, if it's not linked to where you want it to go it doesn't have value [comment: key concept - hearkening back to Google presentation, copyright is really about controlling behavior].
Gunter: STM publishers have all this data, Elsevier putting reference works online, 10 billion industry, how do we extract value? A window of science, shows you what you know and what you don't know.

Bodell: How do you get aha moments?
Goldstein: We listen to customers, not necessarily an immediate thing, takes some synthesis.
Bodell: In our business it's a series of aha moments, with billions of things happening over and over again in algorithms, things can add up to a P&L, but engineers can see opportunities to reduce unit costs. A series of aha moments.
Gunter: When the customer confirms the aha moment is key. Some customers have great blogs, will let us know when we're on track.
Brock: Customers say "we did this with it," gives you great ideas.
Goldstein: Web 2.0 Summit useful, problem isn't ideas but how to make ideas real. Could be too much resource or a distraction.

Bodell: Which ideas to you execute upon?
Brock: We're a small company, usually it's a vetting and prioritizing and re-prioritizing process. Sometimes something interesting comes up you have to figure out how to slot it in. Have to trust your instinct and the instinct of the team.
Goldstein: Give summer interns an opportunity, industry wiki lead to internal wiki, site redesign, blog recaps. Trial and error with low investment.

Bodell: How do you do innovate?
Gunter: Simple things can be great things, deciding to do it could be the biggest step.
Goldstein: Know it when you see it, you see an opportunity for something marketable. How are you going to solve particular problems.
Brock: In team meeting saw that we need to recognize innovation, has to be a non-obvious way to do something new, could be a process, administrative.

Bodell: You get a great idea, how do you get it out the door?
Gunter: Need budget and stakes in the ground, set expectations, need design group to work with you to make sure that you're on track.
Brock: People and machines, leave facilities in the budget, leave unstructured time.

Bodell: Not easy to get people to be innovative, how do you get people to take risks?
Goldstein: Get as many employees out of the office to customers, trade shows and conferences.
Gunter: Main problem is to find which of the many ideas are the best ideas, opposite problem
Brock: Bring on people who have passion for the non-obvious problem
Goldstein: Be flexible, maybe Google's 20 percent rule is hard to emulate, don't look over shoulders too much, encourage people to learn on the job.

Bodell: Part of innovation is failure, what failures helped you?
Gunter: Early at Elsevier, tried to apply process from Wall Street to academic marketplace, fell on deaf ears, audience had other concerns on their minds. Had to understand traditional issues first and was successful afterwards, moving from one industry to another you have to adapt to new expectations.
Brock: Sometimes processes fail or are inefficient, learn from it. Hope that employees know that he's OK with failures, great employees always want to succeed the first time.

Bodell: Mindsets in innovators? How do you hire?
Brock: Ability to think of things in different ways.
Gunter: Someone well-read in the industry you're in.

Bodell: Emulative companies?
Goldstein: Twitter as smaller blogs, Facebook as MySpace for college kids.
Brock: LinkedIn, every few weeks there's some new ways to do things.
Gunter: Biomedexperts.com new site, life scientists are using it.

QUICK TAKE: Good panel, a great reminder that innovation can thrive in many publishing environments, it's not all about Silicon Valley but applying their lessons and the tried and true lessons - speak to your customers is Steve Goldstein's mantra, and it's an important one - is possible in any content company.

Labels: innovation, SIIA Information Industry Summit 2008

We may be asking too much for fair use. Any legal doctrine needs to be coherent to be practical. Once we say it's x then we know that it's not y. Fair use is incapable of definition in some ways. If Google scans a million books under copyright we really don't know what follows. If a judge says something is fair use each case is ad hoc in general. Once fair use or any other doctrine is stretched to fit many new issues it usefulness gets stretched as a doctrine. The issue is really far broader than fair use, one doesn't discuss it dispassionately. Distressing to see an inability to discuss these things constructively. Given that state of affairs, why? Epistomology of copyright, how did one come to believe in your view, what did you bring to it initially?

Moast people assume what we assume that copyright is about is what others think. But if people come out in different places, what then? One bill in Congress is a "pro-copyright" bill. We can agree that copyright is a good thing in someplaces, not in others. You wouldn't say you're pro-medicine or anti-medicine. How does one become pro-copyright or anti-copyright? People see videos on YouTube and it's my property, that's mine, well, that's one way of looking at this. If you see copyright as a mark of property you're in one camp, but you could look at it as a regulation enacted by Congress. The word "property" has certain connotations. Usually when we say copyright is property we say that it's intangible property. So what makes intangible property versus tangible property? What does it mean that I own property?

Generally ownership means that one has dominion over things and to exclude people from doing stuff with your things. You can just say no, it's your property, it's your right. All that matters is that it's yours, end of discussion. Valente: If you can't protect what you own, you don't own anything. Well, do you own it, and if so, what do you own. Unlike Valente, not being able to stop each and every use doesn't mean that you don't own it. 1898, writer Augstine Berell, Western culture venerates property. Rights were supposed to be outside law, natural rights, without which society would not be possible. He who interferes with it is a thief or a tresspasser.

To describe someone as a thief or tresspasser you need an owner. Robinson Crusoe, cannibals in a cave, do the cannibals really care if Crusoe care about his property, no, they see him as food. To say that copyright it property over things, is problematic. What I assert is that it's a system for ordering social relationships. If Rowling has copyright over Potter it means company A can make a book, company B make a movie, and so on. It means that we can say who can do what, it's not a right over the thing itself. It's a social judgment. Courts choose between conflicting interests.

How do you order these social relationships and why does it matter? If you think that copyright is a property right, than any use is offensive and any one who does it is a heathen. It's not healthy or accurate. If instead you see copyright as a social system set up for really good reasons, you start thinking of what the goal is of copyright - namely furthering learning. A social system designed to encourage learning, if it is, then it's a good thing. You will stop people from interfering with people learning things. Not productive to say that people who use copyrighted works without permission are bad, just not true.

If copyright is to help people learn, how to we implement this? Learning requires a generosity of spirit, you can't have it both ways, you can't say you want innovation but not for your business model. Has to work that way for everybody. However the copyright system works it has to encorage innovation, don't want tenth goose to cut off all other golden eggs.

Question: A cursory reading of copyright law asserts temporary rights. Intent was built at a time when the commons were a common concept. How do you see the law evolving when the mass no longer attends to the intent of the law.
Patry: The constitution is a living thing, has to be adopted to current needs. Any law should be adapted to where people are. I don't think that most people abhor laws that don't really apply. There's an awful lot in copyright law to abhor, the legal system has enabled rights extraordinary, many people have evolved to see copyright as oppressive, I believe in copyright and found that problematic. Original term of copyright was 14 years, with one renewal possible -28 maximum. Now since 1998 everything can be copyrighted up to 70 years (Disney). There's no way in the world that we needed that extra twenty years. No living author says life plus seventy or nothing. It was for old works. Every single use has to be with permission, like a male dog walking down the street, you think everything was yours. Was no performance rights until 1909. The way that people are using stuff is in a collective way, a fanstasic thing, could not have come about if one central person said we need this and this and this. A long way to say that we have evolved in unproductive ways.

Question: Has to be that way, but how do we protect and encorage the creators?
Patry: In DC, pro-copright bill, everyone believed that anyone harmed by infringement should get all they deserve. Existing law is extremely favorable to copyright law. I do worry about people not respecting copyright law because it's too strong, that's a complete rationalization. As a practical matter would like to see change in public perception that people respect it.
Follow-up: Contradictory?
Patry: Speaking of copyright as a property right isn't productive, saying everything else is theft is bad for them, they need certain rights. Fair use is given as unpaid use, they shouldn't have to stop all uses. trick is to find the balance.

Quick Take: A well-constructed argument overall, if with some potential gaps, the question is how the ability of publishers to help people learn via enabling valuable to reach people who need it has to be addressed more specifically. To some degree it's mostly a matter of publishers recognizing that protecting the creation of copies is not the real issue, it's the rights associated with that copy that are at issue. In this sense we really need to think of copyright as context rights and to accept that online technologies need to evolve for authors and publishers to express their desires more effectively. We're going to see strong innovation on these lines over the next few years, I expect copyright issues to diminish and publishers who can adapt their models to making the enforcement of context rights the priority more successful

Labels: fair use copyright, google, SIIA Information Industry Summit 2008

Moderator: Ken Doctor, Analyst, Outsell, Inc.

Panelists:
Ian Blaine, CEO, thePlatform, Inc.
Danny Fishman, President, Broadband Enterprises
Sean Morgan, Founder & CEO, Critical Mention
Shoba Purushothaman, CEO & Co-founder, The NewsMarket

Ken started off with a great compilation of videos seen by millions online that were cultural icons in 2007. Mainstream video still matters, obviously, but user-generated videos are creating their own cultural icons quickly, inexpensively and with a different kind of focus.

Ken: Tell us about your space.
Fishman: Started as a rep firm, struggled with scalability, built a pre-roll network, moving into brands and brand syndication. As opposed as to wanting to broadcast on a site or a channel advertisers wanted much more granularity. Started pushing out beyond sites like Warner, in syndication we're seeing people looking for specific programming and scale, need multiple distribution channels, have evolved syndication platform to provide contexutal syndication, mostly repurposed programming now, but now original online programming is hot, still a lot of iffy ideas being pitched, working with Hollywood production companies so that brands will enter. Long-form brand entterainment is now looking at online.

Shoba: On one side it's the news business, on the other side is the marketing industry, started knowing that text world was moving online and would need to integrate video content, created more effective distribution mechanism, free marketing videos available to media for free. Enabled news industry to buy and sell video content. Traditionally built around buying services from traditional video outlets like Reuters, news industry is searching for more efficient ways to get content. Also government, rollout of new 5-dollar bills. Launched 5 years ago, all of the news media were television stations then, over last 18 months 50 percent are print titles, niche trade publications, half of base but consuming 2/3 of content. Pfizer increased video for news by 80 percent. Still a lot of intimidation about technology, need to know what they need, do a lot of business in auto sector, all-time most popular ocntent was the launch of the world's cheapest car by Tata.

Blaine: There's a transition from this being a toy to a tool. Serve both media companies and B2B companies, one has a choice one doesn't consumer media has to do this, enterprise doesn't have to do this but it's a choice. On media side my 5-year-old has no idea about linear programming, that's a telling thing, its influence on television is huge. How to take the best of the Internet world and to make them both more available. Matching interests to inventory is key, as is the power of the crowd, people add value to content, cannot overestimate the importance of this. Some examples are things tagged as political debate but humorous, but advertisers will have a far different attitude towards humor clips. Working on learning more about the content, what it does when it goes places, info in the package makes it easier to put meaningful advertising in it.

Morgan: Two business lines, Critical Mention, focused on aggregating content for business intelligence, desktop subscription, Lexis/Nexis of TV, thousands of desktops licensed, infrastructure today is ingesting 13,000 hours of TV. Make it searchable by spoken word. B2B intelligence marketplace is very large but mostly driven by text. ClipSyndicate a but like ScreamingMedia, publishing tools, log into it, capture highly authoritative, respected news. ClipSyndicate does same for video, 300 providers, 240 network affiliates. Also emerging Web video brands, ExpertVillage, NYT, others providing online-only video. Video out to 20,000 URLs. Networks - McGraw-Hill, Penwell, Reed, Need a video news component. Close to 8,000 hours of broadcast news in U.S. alone every day. What is authoritative, what works in B2B, what provides value to end subscribers. Do we want to think about single search providing co-mingled text and video results, ClipSyndicate content is all licensed hours after it's been aired, newspaper industry was trained by Lexis/Nexis as to what a content royalty, video people say "what," video is not a revenue share business. ClipSyndicate brings in 50,000 discrete video assets from partners.

Ken: Basics, metrics are kind of a joke, what to we know about who's viewing videos, earlier viewing was younger and male, what kinds of programming, news vs. non-news, breaking news or orther verticals?

Shoba: Primary viewing is still happening with news video, in entertainment news video gets high marks, what is interesting is studies show that news video will continue to grow in influience, far from watching the evening news when we get home, most of the time my own news comes from the Web.

Fishman: So many types of news properties, has hit a critical mass, niche programming, news based audience is a very hungry audience. Lots of stats from research, my 100 year-old grandma knows how to do online video.

Ken: In terms of monetization it's mostly ads, little subscription.
Fishman: Has to be pretty niche for subscription to work.
Blaine: If you can access online for free you will, the more niche the more likely premium works. Subscription dwarfed by advertising. Belief is that studios are not going to go to an ad model ever.
Morgan: ClipSyndicate it's segmented into ad and subscription clearly, s..yndicating content into verticals with robust ad sales model. 80 dollar CPMs in niche sites, video changing ad dynamic, prosumer chosen video. Should be able to leverage video more effectively than banners deliver.

Ken: Half a billion dollars ads last year, what are CPMs this year, business high, 100 dollar CPMs, where's growth.
Fishman: Demand rising strongly, CPMs somewhat stable.
Blaine: Depends on the spectrum, known TV content will be high

Ken: Are we dealing with brands in a different way now?
Shoba: Brands more active earlieron, new model emerging, they have the ability to be a media company, Studio Dell enormous success, one of top ten sites, captivating content. Two years ago BudTV failed, but more brands are going to grow, setup costs are low and then they don't have to pay CPMs, this will eat into existing ad revenues.
Blaine: Works for a narrow range of brands.
Shoba: But if you're a niche B2B brand almost by definition you're a targeted audience, you're not trying to reach 50,000 people, you can drive people to you, a lot of trade publications have narrow topic areas,
Morgan: Real opportunity to take CPC advertisers and put them in flash panel players. When really relevant ad in players, click throughs can be in mid single digits.
Blaine: Not good for a tire ad next to why tires fail article.
Fishman: Banking future on contextualizaion, brands want to go to long format, too infomercially, let brand mangers work on this.
Morgan: Video's only in a browsable format, just text titles. A lot of focus needs to be not just browsable but via full-text services.
Shoba: Strong storytelling by may brands, Dell, many you can watch and feel that it's honest, will be blurring of lines, many stories will be told on their own Web site but more will be packaged for wider use in more conversational packaging.

Question: Video is passive, will it be more interactive?
Blaine: Not passive now, kids ineracts with friends while watching video, big cultural shift, for advertisers that's something that you can touch and learn something, yes, interactivity is coming.
Morgan: Lots of startup technology allows this now.
Fishman: We do overlays, hot-spotting on product placements, active integration, we're there now.

Question: Destination sites are they a dying business model, is it all about aggregation?
Blaine: For very few companies sites are enough, think about superdistribution, you're going to win if you meet them on the sites that they want to be in.
Fishman: Some organizations protective of content, in trouble, won't cannibalize their own brands, have to reach out.
Morgan: Learn from "walled gardens" of early online newspapers, will come a time that their content will go willy-nilly with some controls to protect it from shoing up on porn sites.

Ken: Age of multimedia is arriving!

Quick Take: Great panel, a lot more opportunity for brands to get conversational online, so sevices like TheNewsMarket will become more important as potential ad inventory once there's both long-form and teaser-form industrial footage.

Labels: SIIA Information Industry Summit 2008, video

Waves of change, sometimes continuous sometimes terrifying, sometimes they seem to die out altogether, but there are relentless and unavoidable. Reflecting on waves of change, comes from three key sources, new technologies, new business models driven by technologies, unpredictable change of pace.

First rule of technology's impact on consumer behavior: we always tend to overestimate impact in short term, underestimate in long run. When Queen Victoria in 1858 sent first trans-Atlantic cable telegram there were riots in U.S., people said "The Atlantic is dried up." Victorian novel "Wired Love" about two telegraph operators who fall in love. In 1850s Rothschild complained that everyone could get the news. Newspapers had to start filtering news. WSJ founded in 1889 to democratize access to financial news when there were only about 200,000 shareholders. Rothschild might be amused to know that Western Union is now a financial services company.

Digital media delivers great choice, consumers have fragmented, content commoditized. In my experience consumer behavior has changed more in B2C than B2B. Silicon Valley focused on consumer-focused products, leading to advanced interfaces. Many finance professionals use Yahoo! Finance along with professional services. As Tom Glocer noted yesterday, business models have been more impacted in B2C. The tsunami that's impacted broadcasters and other media channels, new media waste far less in advertising dollars. Google is of course the great disrupter in consumer, but TechTarget and paidContent.org disrupt in B2B media.

WSJ will retain hybrid model, works very well, unfortunate that others abandoned paid model. 10 million uniques each month, 1.2 million subs, now as many paying for online as for the print New York Times. Online journal's segmenting for different products at different prices not new to B2B, new to B2C. A time of fast change in a slow-changing industry can offer great opportunities. Many companies are still transferring their structure to adapt to these changes. DJ had a real crisis a few years ago, most leading properties were losing money in 2005, reorged, no longer organized around distribution, reorged to focus on markets. Results encouraging, subscription acquisition dropped by 40 percent, print subs grew. More aggressive price segmentation yielded more money from long-term subscribers. On the way to double-digit margins. Margins are better than in most industries. "Change is a lot easier to make when you have no choice."

So there are steps to be taken to respond to new consumer behavior, but any one approach is not sufficient. Software drives many changes, great waves of computing power, now content industry influences software industry, consumers now get the best of both approaches. Google's a software/technology company but delivers massive amounts of content and monetizes in a media model. Who knew that millions of people would blog if only they could.

Harder question, what comes next? Five trends. First, who's in charge? Which is king, content or distribution? Bad news is neither, consumers are in charge and unpredictable. Second, all media are new media or will be. Technology is low-cost for all information companies. Third, medium is not the message, oftentimes it blocks it. Newspapers grew up in an era reporting on what happened yesterday, now people knew about yesterday yesterday. Trade publishers miss an opportunity by focusing on just print. Fourth, content brands still matter. Decline in legacy brands can obscure the fact that many franchises as a whole remain valuable. Finally, software and information together are more valuable than either alone. Computers became easier to use, newer media platform like mobile designed with content built in.

Great reasons for optimism, what worked to great success in the past may not work in the future. but good reason for optimism. Having better information is key to success. Pioneering work on consumer content innovation can be embraced by B2B companies. Information companies can reach wider audiences and highly specialized segments more easily. Waves of change affect all consumers, your challenges are shared by everyone. Good luck in catching the next wave.

Question: Brands matter, certain brands will rise to the top, assuming that WSJ rises to the top, what do you do now?
Crovitz: Journal's responsibility now, will be well received by readers.

Question: You've been the advocate for hybrid model, does that confuse consumers, does segmenting audience for advertisers meet the real goal?
Crovitz: At this point there's a lot of free content available for readers and bloggers, evidence is that it's not confusing to have people pay for some content, on the other hand, WSJ has relationships with portals to get access to content. More confusing to analysts trying to understand the economics of the model.

Question: Hybrid model has worked for WSJ, may work for other national brands, if you were a CEO of a local market paper, losing money, recognizing that young people don't read papers, will by 2015 or 2020 will secondary markets disappear in print?
Crovitz: Up to editors to think about what the role of a newspaper really is. Old model is broken. Days can go by when I don't read the local paper. Young people are wired, print version has different value, wonderful value in print if designed right. Reasons for optimism if editors are willing to make fundamental changes.

Question: As newspaper person, you put out a broad message, as we're in a phase where people get the daily me with smaller slivers, people will not have the shared experiences, how will that play out in society when shared experiences like the SuperBowl aren't there as much?
Crovitz: Opporunity to define communities of interest, broader than current hypersegmentation model, room for broader agenda focus, in case of WSJ a large percentage of lawyers subscribe to journal, there is a legal version of WSJ with a law blog, different style, more intimate, more specialized. Days of mass media being dominant waning,

Question: Forbes.com now considered more valuable than Forbes magazine. What did they do right, wrong.
Crovitz: Never Coke and Pepsi, they did a good job of converting a print brand into 24/7 brand, DJ had print and DJ newswires. Hats off to them.

Question: We tend to think of career paths, if you were talking to someone who wanted to be an executive editor in chief, what would be the learnings that they need in their career?
Crovitz: When I speak at business schools or journalism school, people still eager to enter. Like a lot of people the best way to learn about something is to do it. In small orgs you learn a lot about a lot, but big can be good. Don't focus on theory of media, time to do that between jobs, focus on doing it. So may more media companies, so many more opportunities to contribute even if posting to one's own blog site, in long term will result in higher.

Question: Newsmasters in newsrooms?
Crovitz: Hard for journalists to acknowledge what others do well. WSJ all things "D" blog, lists top ten stories from others that will be of interest, I for one find it to be extremely useful, moderated, curated by very smart editors, brands can deliver filtering, falls more to publishes and senior editors, will inceasingly include drawing attention to news from other sources.

Question: You became Publisher in '06, you were streamlining, that progress got Murdoch's attention, if you look at DJ acquisitions, which ones were good or missed?
Crovitz: Couldn't acquire Pat Spain's company, without going into all companies like Marketwatch, were a lot of opportunities where the prices are reasonable now, this is going to be a very good year for transactions in spite of credit markets.

QUICK TAKE: Gordon is always a careful speaker, and in his new transition role he continues that tradition of highly considered wisdom, I appreciated his insights as always.

Labels: dow jones, gordon crovitz, SIIA Information Industry Summit 2008

Moderator: Jim G. Kollegger, CEO, Genesys Partners, Inc.
Panelists:
Ken Auletta, Author and Annals of Communications Columnist, The New Yorker
Michael Barrett, EVP and Chief Revenue Officer, Fox Interactive Media
Jim Kelly, Managing Editor, Time Inc.
Alan Patricof, Founder and Managing Director, Greycroft LLC

Jim: This is the seventh summit of the merged Software and Informaiton Industry Association, it's like surfing, the industry has to catch the wave, need to skate to where the puck is going to be. Last summer watched YouTube presidential debate, on Meet the Press Ariana Huffington is there as an equal because of Huffington Post. A tipping point is developing, there's a slow building up and then a dramatic increase. Newspapers are in free fall, magazines are getting thinner, new media doesn't kill old media but repositions things. [To Kelley] How do you position yourself in this era?

Kelly: Has 125 media properties, most are in Britain as a part of IPC, much different model over there, here it's the familiar brands, some of those titles make a considerable amount of money from print advertisers and subscribers. People magazine has 2 million people who are willing to subscribe for USD 109 per year. Another 1.5 million will buy it as the newsstand. Makes hundreds of millions a year. Each magazine has been tasked to find their own digital future, some have a bigger opportunity than others, Sports Illustrated doing well, acquired FanNation, Face of the Crowd (Greycroft company). People has StyleWatch online, we're an increasingly mobile society, using devices that are not friendly to a 2,000 word narrative. Advertisers are finding more effective ways to reach consumers, Johnson & Johnson's Baby Center is making parenting magazines ask what they can do to counter. The younger you are, the more likely you're likely to see everything on the Web as content, whether YouTube, an alert from WaPo, to define models around topics is harder as communities create their own power.

Barrett: Every challenge creates a business opportunity, allowing time-shifting, old distribution under assault, look at MySpace, 70,000 vidos posted every day, all this consumption and creation, none of this takes away the value of major TV shows. MySpace communities can create a place for media brands to build audience rather than erode it. If you stream video content you erode TV but if they're people who don't want to miss an episode you can keep them captured, will be a constructve model, not destructive. Haven't closed the gap in economics, but getting there.

Jim: Would you invest in a magazine property today?
Patricof: If just print, no, but now there are new channels from old media. Video to magazine Web sites, Tackle sports network for football, synergistic aspects of print publication that can help to power online content. Every has adapted to new media, we're in venture capital business, corporate investors come and go, now major media brands are the major investors, now right on the front line of making investments.

Jim: Why the investment in HuffPost, Ariana?
Patricof: Started as political blog, now entertainment, finance, unique visitors are climbing dramatically, have invested in blog site - paidContent.org, lot lower investment to get into that than to get into magazine industry. Huffington left a fund-raiser to be at blog conference.

Kelly: When willl HuffPost make money?
Patricof: Let me ask you about some of your publications. Took years to build many print titles.
Kelly: Sports Illustrated took at least a decade.

Jim: Are newspapers in free-fall?
Auletta: If you interview people who are in news you meet people who are terrified. Online newspapers are exciting, but how do you monetize is not the same as paper, haven't figured it out. FT is profitable, WSJ, but they are closed universe, limited shelf space for advertisers. Are they open to new media, are the open to breaking out of old patterns?

Jim: Tribune sold for about half a million, how do you make a small fortune in the news business? Start with a large fortune. Murdoch bought MySpace when daughter brought it to his attention.

Barrett: News Corp driven from the top, not a lot of analysis, not sophmoric but where other companies can spend months in analysis for boards, private companies can react quickly, deals done in 24-hour windows. They can afford to wait years to make investments pay off.

Jim: WSJ over-weekend advertiser, but makes sense.
Patricof: Flies in the face of terrified print.
Auletta:Synergy is an overused word, but Murdoch can move fast and create synergies.
Kelly: Murdoch making paper broader.
Patricof: What about books, Eisner putting out webisodes, book based on webisodes being released in their wake.

Jim: Behind every great media company is a mogul [comment: Brin and Paige as moguls? Close enough.].
Kelly: Luce sold Time mag twice over at first, was able to turn it into a real investment eventally.
Auletta: Old and new media, new media dominated by engineers, Google's had palpable success, engineering culture is driving these companies, represent different value systems, different cultures. If you said the engineer is no longer king at Google it wouldn't work, Terry Semel took over Yahoo, didn't work, don't understand half of the words that engineers were saying. John Scully didn't understand Apple.

Jim: What are your driver, what do you lose sleep over?
Kelly: Spend a lot of time with video, monetization is still a work in progress. Look at reviews on Amazon.com, look at all those reviews, why not sell them to NYTimes.com?
Auletta: It's a way of looking at things.
Barrett: Everything's going digital, mobile, whatever, we have a stake in all, what concerns us is the race to who has the most data on people. Google will be 10x as they learn more about end users. Advertisers are going to demand that information, won't settle for household demographics. Don't get disintermediated with your own consumers.

Jim: Yahoo in China?
Barrett: Have to play by the rules, privacy is a huge concern, however people get the fact that they're not paying for a social network, why send me ads for singles when you know that I am married? Have to stop somewhere, but would you rather have an ad that means something to yo or not?
Patricof: Relevance is part of it, localization is a bigger part. Down to zip codes, neighborhoods, addresses, television is moving in that direction.
Auletta: 4 billion cell phones, but do I want to be interrupted on the phone with an ad? Facebook related ads had to be pulled, users didn't want them.

QUICK TAKE: A really good panel, senior media players but people who really understand the issues. Long story short, old media is hosed in terms of the old platforms with old models but new platforms and old platforms with new models are going to do quite well. I think the largest issue that's lurking at the edges is the rise of video as a factor in devaluing the written word as monetizable content whilst at the same time we have a hard time monetizing video online. There are huge gaps in revenue development that aren't easy to address in the short term. But the good news is that major media companies are indeed begining to learn how to invest in new plays, hopefully with the patience that old "moguls" had. They are becoming the exit strategy for many plays, but there's only so many immature media plays that you can absorb before owners and shareholders get itchy. We're going to see an impatience gap soon enough: angel-level investors who are more content for the long haul hanging on, higher levels of equity providing mostly an acceleration path for spinoff to media holding companies. You can't innovate in media as a fully public company effectively - Google was wise to move cautiously into public shares. The economic models are not mature, but economies follow value. The economies may not look like old models, but they will come indeed.

Labels: CEOs, media, SIIA Information Industry Summit 2008

Moderator: Peter Jackson, Chief Scientist, Thomson Corporation
Panelists:
Tom Aley, President and CEO, Generate Inc.
Robin Johnson, CEO, Financial Times Search
Bruce Molloy, CEO, Connotate Technologies, Inc.
Patrick Spain, CEO, Highbeam Research, Inc.

Peter: Focus is going beyond the portal to applications that can allow alerts, summarization.

Johnson: Moving to contexts in workflow, in businesses but also in consumer markets. Some queries are impossible to do in Google, so we need to develop facets, disambiguate things like Ford Modeling Agency from Ford Motor Company. No summarizations of information on Internet, nothing that says on balance this much is positive and negative, just some high-end tools providing this for business. Have to focus consumer on the nature of the question, can't always be translated into keywords.

Patrick: Free reference site, subscription HighBeam site, Newser, graphic content highlighting. Started to figure out if Web 2.0 is applicable for our business. Concluded that most people aren't good writers but many are good collectors and recommenders, can vote for content and use search tools to find things elsewhere in product. In Newser we write all story summaries, now users will be able to write about stories that they're enthusiastic about.

Peter: How do you make sources of information more active?
Molloy: Intelligent software agents monitor a site for changes and create alert streams, can make these sources much more useful. Search can go only far, what do you do with the documents? You'll cut, paste and compile. Need a search component but also need an automation component to aggregate content more effectively.
Aley: I don't want to get out of an article to find related information, our tooolbar widget enables people to find rich data in contcxt. We've all been saying for years that users need content in their workflow, to be able to embed that information in any page is a way to turn any page into a contextual portal.

Peter: What are the real-world scenarios for workflow that these products help.

Johnson: Imagine a tool that can help a journalist to prepare for an interview, if you have a tool that you could use to rearrange content is difficult. You can't just do it with keyword search, experimenting with semantic navigation, keeping track of content relationships. We think that this is the way to make workflow come alive.

Peter: What's feasible right now?
Molloy: Our technology enables end-users to identify data elements in a page rapidly, in terms of workflow, AI mining technology combined with this end-user interface can empower the end-user and bypass I.T. to get their sophisticated needs met. They can go a step further and put their mining agents in a common library that other people in their organization can use and modify to create even more value.

Peter: The "m" word, metadata?
Aley: Technology has come so far in past 5-10 years, intelligent crawling of 70 million domains to extract unstructured content into a structured format. Many publishers and enterprises have terabytes of their own unstructured content, we can extract and integrate it all. "Keyword search is so yesterday." With robust metadata the query to be interpreted more effectively.
Johnson: You don't have metadata, you won't get there. "Customers like you asked these questions" can be created with metadata, hard to do without it.
Aley: More sophisticated, now seeing that an entity is an automotive ad agency instead of an automobile manufacturer.

Peter: What kinds of tools do you create to help users?
Spain: Looked at how we could use data exhaust to help user experience. All stories tagged on scale of hard or soft news, an interface control lets them choose ratio. Interesting - 10:1 people set the controls for hard news but 3:1 look at soft news. Looking at controls that will help people understand what other people are looking at.

Peter: Standards? [comment: have heard too many questions about standards today.]
Johnson: IBM's open standard may allow some data exchange, but not much adoption.
Molloy: Hard to get people to agree to metadata standards, but with that being said it's possible to impose metadata standards, but we don't believe that a grand taxonomy will emerge, we allow industries or companies to create their own standards or map to your consortium's standards.

Peter: What would you do in the future if the technology was there, how close are we?
Johnson: Annotate on the fly, managing copyright can make this tricky
Spain: Amazed at how different every Web site is, many different ways that archives are managed,
Aley: Looking at dynamic "version of you" and put it in the system, if I have a LinkedIn page, Facebook page, several Zoominfo profiles, can we integrate this. Being able to integrate on the fly, slamming together software and data has been the dream, as the Web world evolves we're seeing that it's achievable.
Molloy: See a move from search to business intelligence tools. [Slide of antique "computing division" with dozens of people entering data into mechanical calculators] we see agents extracting but also providing value add processing for alerts and other functions.

Question: How truly aspirational is this?
Aley: Many publishers have legacy platforms, can overlay infrastructure that they have, can work with Generate to free that informatoin without interrupting underlying operations. When we dynamically understand what's on the page we can match entities and match it with behind the firewall content.
Molloy: We see a real eagerness from publishers to understand this, see need to catch up with search engines, the idea of monitoring and aggregate components on the Web is one model, or create your own kind of an alerting system. Editorial awareness and situational awareness, being able to monitor everything and choose what needs to be seen. Not only a cost reduction factor but also for new revenue streams, new products, new inventory.
Johnson: All leveraging off of creating engagement, make things more sticky, have to invest in what will make them do this, this is what will make C-levels invest.

Question: Proprietary metadata as a competitive value?
Spain: At the end of the day all you may have is metadata.
Aley: Extremely valuable to our clients, DMOZ helps to accelerate.
Molloy: Metadata important, tagging and folksonomies may add value also.


Question: Copyright presents issues, to what extent does copyright and licensing agreements present barriers?
Aley: We process data that's either proprietary or public domain, very black and white in U.S., privacy laws overseas make it harder to expose this information. Big focus is to maintain copyright.

Peter: Publishers and vendors are cozy right now, but vendors are creating content and content value. Is it always going to be as cozy as this?
Johnson: Isn't always entirely cozy when there's intellectual property involved. Software companies survive on reselling ideas gained from working with clients. FT survives with technology, coopetition has required non-competes and to lay out how we dance when a new idea is discovered.
Molloy: A blurred line.
Aley: Reed Elsevier with scientific journals, owned market share for 80 years, Reuters buys ClearForest buys software companies, publishers thinking about whether they want to buy technology from a publishing competitor.
Spain: Web has changed fundamentally what fair use is. It's all about chunks of data, chunks are hard to protect with copyright. The smaller it is the more valuable it is oftentimes.

Great panel, search is transforming editorial operations radically, the database is now, the metadata and other contextual content features are key to proprietary advantage, own the context and you own the publishing relationship.

Labels: aggregators, SIIA Information Industry Summit 2008

Moderator: Steve Sieck, President, SKS Advisors, Inc.
Panelists:
Bob Carrigan, CEO, IDG Communications, Inc.
David Mather, President, Hoover's
Michael Dunn, VP , Hearst Interactive Media
Clara Shih, AppExchange Product Line Manager, Salesforce.com

[Technical difficulties at the beginning at this panel, apologies to early speakers]
Steve framed the discussion by referring to his research for the SIIA showing the gap between social media's payback versus focus.
Steve: Why focus on social media?

Carrigan: Have to focus on it, need more editorial impressionsy
Dunn: Focus on it intensely
Mather: Provide tools to make more actionable informaiton, how to give value when you're entering into conversations in your professional activities. Hoover's Connect, purchased technology from VisiblePath
Shih: AppExchange investment but also online community IdeaExchange, Salesforce to Salesforce, entity nodes can be your sales partners, exchange information. FaceForce integration, pull up contact info but also Facebook profile information real-time into SFDC.
Carrigan: TheHub, generates thousands of visits and page views, all comments from users, very high monetization. Direct advertising benefits.
Dunn: Small teams can do a lot, low-cost efforts can yield high benefits with a lot of feedback from the community.
Mather: People want to be tethered to their workflow, were making so many changes to incorporate privacy that they needed absolute control over platform to manage these issues.
Shih: Keeps people from having to log into multiple sites, keeps them productive.

Steve: Social media communities don't happen by themselves, what do you need to do?

Carrigan: Don't hold on too much, can't be too regulated. Didn't hire a community manager initially, hired a CIO. Need to put in people that community members will relate to.
Dunn: On the boards of several companies, including Internet Capital Group, if you're considering moving into social media technologies first you should be getting on B2C networks, people want to interact constantly. Lots of evil things out there but that's an educational issue. Facebook is a good platform, Twitter good group chat, Seesmic is video chat in alpha. Lots of people involved in these sites, bring this back into your work environment.
Mather: Once people have the sense that it's a secure environment they play a little bit and start to get confidence. People begin to tap into your own organization's knowledge network for business-like goals. People will use it in the right context.
Shih: Trust is key, openness also, engagement. The content and services have to provide ongoing value, or they won't log in again.

Steve: Google OpenSocial, implications?
Shih: A set of open standards that publishers can use to build applications on social networking platforms, implementers can implement once and have data shared on many sites, remains to be seen whether people will go for it and whether publishers will be implementing it on their end.
Mather: As a publisher of insight, need to provide a 360 view of the world, if you are learning about a person you may want to know that Hoover's says versus LinkedIn versus MySpace. Standards can help us to unleash the power of these platforms.
Carrigan: From a user point of view there's OpenID, too many logins for social media, OpenID can help.
Dunn: Blogosphere is the largest social network today, you control the data, you're responsible for comments and trackbacks. In a Facebook environment you can't eliminate yourself and put it elsewhere, that's a challenge, data portability can address that. Every environment requires a profile, redundant, quite a bit of fragmentation, everyone has a little different feature set, everyone should have an about page, not worry about companies managing that.
Shih: Standardization is good, but sometimes profiles need to be separate, what if you're a musician on the weekends and want a separate identity.
Mather: Standards are good, but need to be careful about having too many controls.

Steve: 99 percent of SM applications are amusement oriented so far, what are some of the business widgets that may turn out to be killer apps.

Carrigan: We're working on lots of widgets, now career widgets, content related to career events, review widgets, looking at many cool business widgets.

Question: To what extent are lawyers getting involved on specific terms for social media.
Dunn: On same floor as lawyers, go to lunch with them, get advised on absolutely everything that we do. Launched a magazine completely in a blog format, lawyers help a lot.
Mather: Attorneys needed for Web tool world, how reliable are we when a blogger that says something in detriment to another company, they want us to filter everything, but hard to do in a community environment. Lots of rules in place, but sometimes we have to push the envelope.

Question: Looking at demographics, are there are demographics that resonate most? Tech or other industry?
Carrigan: Skews to younger audience, try to get the same quality, don't qualify as much as we do for print format.
Shih: Two phenomena, grown from Silicon Valley, which is young, but the audience is aging, as college students. mature they become the business consumers of the next generation.
Dunn: If your B2B footprint is global, social media can help you to break down social and time barriers. China is a bit rougher, tech community is an early adopter.
Mather: Much older audience than typical internet company, C-Level exec at D&B, do you know anyone, not a Silicon Valley type, intuitively jumped to use the tool.

Question: ROI?
Shih: Can calculate spend for partners, can close the data when deal is done, SFDC needs to do that to maximize value.
Carrigan: Journey of buying behavior, score provided to marketers in reporting, so if signed up for a program they can see that not all of the leads are created equally, new program. Market Fusion site.
Mather: Hoover's Connect is a free network, ROI in value of relationships, can manage private networks and provide economic benefit. Add value, make product actionable.

QUICK TAKE: Excellent panel, I thought that it was a great mix of core B2B people, representing publishers, enterprise platforms and new models that are spanning the world outside of and inside of the corporate firewall. Clearly it's very early days for social media in B2B, many of these initiatives have emerged fully only in the past few months. But the trend is to empower people in business to harvest value from their core professional relationships as well as to pull in their more multidimensional selves from social media online portals to help relationships become deeper more quickly and more effectively. The next generation of applications is likely to start mining social media content more effectively to provide alerts, trends, behaviors and other key indicators that can effect both relationships and transactions. If there's anything that can refute the question of social media's value it's what's happening in business.

Labels: business information, SIIA Information Industry Summit 2008, social media

Andrew's view of the Internet and the media was changed by writing his book The Cult of the Amateur, still in favor of authority, likes standing on a podium above the crowd, this isn't the Internet.

Was a mid-90's Internet entrepreneur after being a music journalist, classic old-fashioned writers, paid them a lot of money to write about jazz and classical music, but were right in the middle of the Web action. Was greedy, founded his own company, was exciting then for media people to put high-quality content on the Web quickly and efficiently. Wasn't disintermediation of existing outlets or empowering individuals, was exciting to distribute as an entrepreneur. VideoCafe failed, but remained an evangelist, continued to drink the Kool-Aid. In 2004, in Sebastapol north of San Francisco, Tim O'Reilly was the leading evangelist of Web 2.0, "FooCamp," Friends of O'Reilly, FooCamp is an unconference, no heirarchy, no formal structure, everyone spends the weekend with sleeping bags and a vision of a new world. Represented a sneak preview of Web 2.0 anarchy. Went from being a digital believer to a digital skeptic.

We weren't just talking about the new media, we were the new media, everyone was simultaneously broadcasting themselves but nobody was listening. Digital Darwinism was dawning, no authority, everyone talking simultaneously. First book to attack Web 2.0, not a professional journalist, professional journalists say they're glad to hear it. Author wanted the subtitle "How Today's Internet is Killing our Culture," he doesn't think it now. But the more user-generated content there is, the less they read a paper and go to the movies. People invest less in high-quality and professional content. MySpace, YouTube, Wikipedia replacing high-quality professional content.

But the Internet can't kill anything, the Internet is not a person, doesn't have a mind of its own, it's just technology. Not surprising that you get a countercultural movement out of San Francisco via this technology, was an outgrowth of 1970s culture. More people think that they have something to say, it's an authority issue. It's a premonition of something more profound, the people are rising up, they want to be the author, they want to be the source, you can't blame the Internet for that, it was already in place, the Web simply unleashed it. Now traditional media has to cope with the rising of the people. Left and right bash The New York Times, it's actually the 1960s 2.0.

Put myself in the most dystopian mood possible, future could be both "Brave New World" and "1984". I think that I was wrong to be deeply dystopian, but it's just a moment, a moment that will pass away. People are already bored with this stuff, the Lessigs and other crazy people in Silicon Valley still talk but most people are realizing the dangers in user-generated content. People are coming to their senses, entrepreneurs are coming to their senses also. The Web 2.0 revolution has ended in Silicon Valley, met Jason Calacanis, he expressed same sentiment, said that Web 2.0 wasn't going anywhere, can't monetize, too much content with dark forces behind it, he founded Mahalo, a curated search engine, employees are real people putting good content into search engines. You need hierarchy, you need authority. Citizendium takes on Wikipedia, e.g.

The new, new thing is professionalism, no value economically in amateur content, it's a scam, Facebook's a scam, 15 billion valuation is a scam, this year is the year of the professional, the year in which authority will make a comeback. Don't get swept up by the Silicon Valley garbage, when the Lessigs come argue back. The probem in this country is that authority is afraid of the people's revolution. Professional media needs to unapologetically take charge. Colbert said he is an elitist, he said yeah. Without that media we're in the deepest s**t imaginable. Things may not be as bad as they may seem. Need to fight anonymity, the ability for old to become young, to deny our physicality.
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QUICK TAKE: Well...where to begin. I agree that the ability to curate user-generated content is a key growth area this year, but it's clear that user-generated content is becoming authoritative in more ways than we can imagine. Professional authors need to come to terms with this more deeply. The ability of content to collect an affirming and trusted community is as important in many instances as the ability for people in an hierarchical structure to declare content to be authoritative. Social media underscores the need for authority to flow from people who have to live with the consequences of authority - democracy, in other words. Democracies have designated, trusted representatives, administrators and leaders, and this will continue, but inherently it's the market's responsibility to seek out its own view of what is authoritative content if we are to have the efficiences to cope and thrive in a rapidly changing global economy. More at Content Nation and in my upcoming book. I am not saying that Andrew's view is all tosh, but I do find it interesting that he sidestepped all of the highly positive, high-quality and monetizable initiatives that publishers have taken on in social media. It's an appealing position for traditionalists, but the money is not in the traditionalists' models any more. They need to redeploy their editorial staffs to manage quality user-generated content more effectively.

Labels: books, SIIA Information Industry Summit 2008, social media

Interviewer: Hal Espo, President, Contextual Connections, LLC

Runs interactive division, both WaPo and Newsweek, Slate, The Root for African-Americans, Sprig. Most all sites are news and opinion, 250 million page views at WaPo, 9 million unique visitors/mo. Sites are very standalone from an editorial standpoint but back end is largely shared. Six years ago WaPo was distributed only in DC, discovered national and international audience via online. Slate online-only. Lots of content is shared in large part. On editorial side people recogninize advantages of Internet, Monica Lewinsky story was broken on WaPo.com, online paper is starting to look like a blog. Hard sometimes to focus on smaller businesses when larger businesses are changing so much.

Hal: What have you done to break down barriers between divisions and platforms.

Little: Lots of training, reporters on a beat know can do video, lots of time spent on helping management that fears shifting rewards. Sales feeds across print and online, content feeds both ways, content is also going back the other way, with online content making into print. Big challenges for local papers like WaPo is that there used to be little or no competition for ads or content, that doesn't transfer online, lots of sources for both content and ad placements for local markets. Not clear that newspapers will get same advantages as national brands. WaPo online audience bigger than paper, but already have 15 to 18 percent of revenues coming from online.

Hal: Locally you compete for advertising with Craigslist for online, are you competing with print for ads?

Little: We've seen people migrate already, top newspapers are Gazettes, Express operated by Post, people are going to pick what they want to pick, newspapers are not going to go away but the trend is towards less print reading, kids aren't picking it up, daughter sent a NYT article to her and apologized.

Hal: New site, why, why now?

Little: Have a high local audience for African-Americans, Skip Gates, professor, founded it with her boss, news, views and ancestry. Skip is involved in helping people trace their roots. One audience that's been underrepresented. Live three days, too early to tell overall, need to build audience organically, hard to do.

Hal: Where will consumer media look like three years from now?

Little: Disaggregation is taking off, not going to one place to get information. Google is taking market share away, but also partners, and a good partner, Google Maps are really good.

Hal: WaPo used to be a big player, not a big player anymore, what does that mean?

Little: Way more audience than ten years ago, story like issues at Walter Reed hospital matter nationally not just locally, but the hold on ad dollars isn't there.

Hal: Where do people really come from.

Little: Local audiences tend to use home page, check weather, national comes from blogger links and search, different proposition.

Hal: If you were in the midwest, how would you see things differently?

Little: Yahoo efforts helping local papers to build content, it's tough for them. As Craigslist grows we still have much larger auto and jobs listings, looking at Monster, career-building. Not going to outrun them overall, but we monitor effectiveness in selected verticals and go for it.

Hal: Facebook, friend or foe?

Little: Adults don't live on Facebook the way that kids do, have done a few widgets, tried to invest. Yields a fair amount of traffic, but did it a lot just to let people know that you're out there.

Hal: How do you exploit your natural advantages.

Little: Haven't really refined home pages, real redesign, looking at if you only had a local audience how did it look like, if you only had a national audience what would it look like. National audience really interested in opinions, so that will go "above the fold" in online edition.

Hal: What are your peers doing that you'd like to emulate?

Little: NYT does a great job with search engine optimization the past few months, Guardian.uk innovative, beta tests across site, opened up a lot to users.

Hal: WSJ - impact of subscription barriers changing?

Little: Murdoch says subscriptions stay, but NYT raised barriers successfully.

Hal: User-Generated Content?

Little: First site with comments, relationship with Pluck, in March you'll be able to upload photos, videos coming.

Hal: You're a lawyer, what's the state of IP law?

Little: Fair use is becoming broader than anyone anticipated, like to see proper attribution.

Question: Disaggregation of news, but RSS readers aggregate things again.

Little: More opportunity for news organizations to aggregate content from others, more ad networks.

Question: Licensing multimedia?

Little: More people watching multimedia, got a national Emmy award. Even with that said, we can't compete with a network [comment: But you don't have to, just choose the right channels].

Question: What is your financial model, will you be a Murdoch?

Little: Working for someone invested in the long haul, profitable for fourth year, biggest challenge is to keep investing in rapidly changing technology. Management breathes internet, the Kaplan group does a lot of online universities, they taught us about pay per lead and metrics, historically content has not been metrics driven. Inform is terrific, builds pages and topics on the fly, but needs to be more friendly for SEO purposes. Helps to drive people to site.

Good interview, Hal keeps the questions coming and coming and there were good audience questions. It's a good example of a strong local news organization with national impact that is still struggling to find growth in spite of being profitable. Caroline touched on one of the key issues when she mentioned the rise of ad networks. They have broken papers' lockhold on local ads and created far more competition for national and global ads. They are reluctant to move into virtual aggregation of local content and becoming ad networks in their own rights, yet that's where the money is going. Newsrooms are great resources, but I think that they'd do better to have those desks spend more time on virtual aggregation and focus in-depth on content that's most valuable in the moment.

Labels: news, SIIA Information Industry Summit 2008, washington post

Moderator: Lee Greenhouse, President, Greenhouse Associates, Inc.

Panelists:
Dr. Howard Lee Morgan, Partner, First Round Capital
Mike Tansey, CEO, Jobson Medical Information LLC
Tim Weller, Group Chief Executive, Incisive Media
John S. Suhler, Founding General Partner and President of Veronis Suhler Stevens

Greenhouse: Is there really a post-froth period?

Suhler: In last five non-consumer transaction amount of credit and cost of credit not so much different from January of last year, more covenants rather than covenant-free, more take-private deals than IPOs.

Tansey: John's right in that cost of debt is up a bit but availability of debt is not there, no syndication to speak of, more mezzanine financiing.

Weller: Lots of froth, bank syndicated our first tranch of debt, but harder for new tranches. Market goes through peaks and troughs, more points, more creative in how they're accessing capital.

Morgan: Raised a lot of capital last year for deals, did 36 acquisitions, smaller companies can be rolled up and acquired, fewer exit outlets so rollups are attractive. We did well.

Suhler: Two times in last 25 years where markets were stuck, we're not in that situation today, froth doesn't invite or stop deals, still a market to invest in great managers and great products, you'll ride right through that. Deal attractiveness is not a froth or lack of froth factor, buy companies through cycles. If you do it right management teams will blow right through trends. We don't buy based on froth coming or going, doesn't determine long-term investment value.

Greenhouse: What is it about information businesses that have made them attractive?

Suhler: Business information companies have growth rates aren't greatly accelerated or decelerated by consumer markets EBITDA tends to be at a premium to consumer media, high teens, low twenties, sometimes certain areas have had peak prices, but long term slightly better growth for their portfolio.

Greenhouse: Is it less expensive to start an information company today?

Morgan: Absolutely, some initial investments were 300K, some down to 200K, an enormous you can do with a lot less money.

Weller: Thirteen years needed half a million in capital, floated for 150 million a few years ago, spend far too much time at what we don't do well, we're a very creative industry, can adapt fast, have evolved a lot, monetizing effectively, little to no capex, lots of cash comes back.

Greenhouse: Differences between consumer and professional?

Tansey: Less expensive to create consumer products, but cost of acquiring audiences can be high, have to create both audience and community.

Morgan: You can use Google AdSense to create a business for your content overnight, then you can build a sales force to skim off the cream. Have to do more work on the ad side to create a business that's monetizable.

Greenhouse: Audiences want data in workflows, lots of individualized workflows, core technology may be cheaper but adapting it is a greater burden. Is there some counterbalancing effect?

Morgan: Not really, web services lowers costs, easy to adapt and implement, on Wall Street high-speed hedge funds use low-latency feeds, information is quickly repurposed.

Suhler: in 1980s you packaged information, sold it and you were done. Didn't hear about workflow integration. Glocer's presentation was combining information and services always. Costs money to build applications and services for users to interact with, cost of building audience doesn't change, building services that will keep renewal rates high is tough duty. In B2B trade world ads can float some of that cost, but harder to integrate advertising and sponsorship into workflow applications.

Weller: Our advantage is skillset for online piece, takes time and resources and intellectual capital, we've bought very good people at right rate. But we're not enough in the workflow [comment: B2B trade media is in big trouble, not sure that this is really the year that it will turn the corner but they're start]ing to get it].

Greenhouse: Changing technology, sometimes disruptive, is that a driver?

Morgan: In shrinking markets, can offer sustainable margins.

Weller: Content should drive strategy, not technology [comment: see our definition of content].

Tansey: The disruptive thing is understanding your customer better.

Suhler: Management teams that don't "get it" can be disruptive. Our greatest concerns have been where the management team get it right, didn't have the sensitivity to get the right technology in place at the right time.

Morgan: Companies like Google are disruptive as they surface information faster and oftentimes good enough free information. Knowing what customers need is very critical, have to think like customers, what would they find on Yahoo or Google.

Greenhouse: Thomsons and Reed Eleviers have built empires, where are the empire builders of the future?

Weller: Into making money for myself and management team. Google frightens, but startups that live and breathe their customers are a bigger threat. Apax have incredible aspirations to build a sizeable B2B company. Looking at Outsell numbers, we'll be number 3 B2B soon.

Suhler: Have added 300 acquisitions to our initial 50. Empire building is making sensible acquisitions that provide benefits through mergers, to use existing scale and presence and skillsets. "Empire building" is senseless in and of itself, it's about building margin and revenues. 25 percent of our return has come from add-on benefits of acquisitions.

This as a good session, seemed to run a little long on too few real topics, but the panelists had a lot of great insights. Investors are managing still to find good value in the marketplace that fits the best strategies and that will continue, especially as young companies listen carefully to their clients. Unaddressed: how to continue margins as older media revenue streams dry up and newer ones yield less on an ad/subscription model based on older methods. I am not sure that the investors have the 3-5 year models in place to predict basic benchmarks such as cash flow and earnings effectively as these transitions take place. I think that there were a lot of important points raised by John Suhler about emphasizing the quality of management teams, but I wonder whether those teams are always going to be able to turn these new corners quickly enough. There's enough "give" in these portfolios to weather the transition overall, and already a fair amount of revenue stream adaptation, but it's going to be an interesting 3-5 years for B2B media. I think that M&A will continue to have a pretty good year but it's going to get harder as the purchasing companies see their fundamentals impacted by slowing traditional revenues.

Labels: deals, mergers and acquisitions, SIIA Information Industry Summit 2008

How does a company founded in 1851 based on delivering stock ticker data by carrier pigeons stay relevant in the 21st century? By keeping in the thick of changes in content technology every step of the way. Bill Burger of Copyright Clearance Center noted in his introduction that Reuters CEO Tom Glocer's blog is insightful, genuine and pointing out that CEOs need to be very plugged into trends themselves rather than waiting for a Harvard Business Review article to catch up with them three years after publishers can make money with them.

Tom's chat: Last year he said that he as busy with the merger, but then he realized that the SIIA IIS was the perfect forum to get out his vision to the industry. Will focus in his chat on the media company of the 21st century. In his blog he pursues a conversation on topics that really interest him, this presentation is in a sense a summation of his posts. He talks about the two-way pipe, social networking, today he wants to move the debate forward.

Tom's "strawman" revolves around the new economics of publishing. Consumer media companies are ill-suited to be public companies, payback periods long, investments to transform significant. Traditional media companies replaced dollar-monetization of eyeballs with eyeballs that are going to be monetized in pennies. Newspapers in a negative arbitrage with online services, music companies also. BSkyB, the satellite TV service in the UK. almost sank NewsCorp but now is a dominant behemoth. Early days spent building audience and reach, investment dwarfs payback. Notably family-owned. Dow Jones/News Corp a deal with families on both sides, made it easier for Murdoch to manage the multiple. Bancrofts were no longer underwriting a long-term goal for Dow Jones, then the markets did their job.

The pressure of being publicly listed exerts a positive force on managers such as himself, but professionally-oriented publishers are more suited to be public companies. New consumer model works well for startups, but in professional publishing businesses are differe.nt. First, they provide must-have information to do your job. Seconly, your reputation and millions are at stake. Third, the business pays the bills or a third party, Fourth, delivers information in a format that fits your work flow. Imagine you're a lawyer preparing for a case, all precedents are available online, would you risk your professional reputation on not having the one in a hundred presedent that proves or disproves his case [Comment: Good example, professional services that can bill through have and advantage that ]way, but it doesn't necessarily point to how mining technologies can yield these kinds of inputs from virtually any source].

NewsScope - new product that senses sentiment on stories to provide new buy-sell signals. Not only human beings but machines are important consumers for decision-making functions. [Comment: fits our "inverted curve" model of the content marketplace]. Platform across verticals, mash up content from different fields to create new services. For example, investors in the pharma industry will get both financial and scientific information when merger starts in 2nd quarter.

Turns over the floor for comments: Question - what to do with merging consumer and professional markets. Tom: Depends on your strategy and customers. Need to be quite experimental, professional space needs to watch the canary in the coal mine in the consumer space, could happen to their industry as well.

Question - Your reputation is based on rich, well organized information, how to resolve with fast-moving markets. Tom - Reuters invented UGC in the 1970s with conversational dealing systems for foreign exchange, post your rates, they agggregated, sold it back to same institutions. used to charge them for giving content. Nothing new, consulting businesses work on that model. Reuters has 2,500 journalists doing news under Reuters brand, 2,000 stringers, the extension to citizen journalism is the next concentric ring of this content, the questions becomes do you apply to your brand to it or not, but not an excuse to crawl back and say "We're the professionals, your stuff is not."

Question from me: How do publishers respond to needs of institutions that need to get more value in individual transactions? Tom - Keep on top of the technology curve is the short answer. [Comment: Difficult to maintain eye contact and type at the same time, my take was that it's one of the softer spots in all of the financial information company's strategies, they're good at delivering information but they're lacking the ability to drive the understanding of potential transactions enough to help professionals build margins in their transactions. These services have to ramp up to a whole new level of analysis to make that happen as it happens in structured finance and hedge fund investments to some degree already.]

Question from Gordon Crovitz: How to manage the transformation through the transaction? Missed some of the answers, but in general the answer is that you have to give people concrete expectations about concrete plans and how they reflect the long-term interest of shareholders, but then investors are put off because they're measured by quarterly portfolio results using - ironically - benchmarks such as Reuters' Lipper averages.

Question: How to support non-profit journalism, does Reuters support ACAP initiative
Tom - Supporting ACAP, but not exclusively, will still provide feeds on a private basis. A place for ad-supported content, content from government-supported channels such as BBC lots of interesting watchdog groups, now everyone can have a voice.

Question: Like your perspective on building a global economy.
Tom - Reuters is"effortlessly global," bigger question is how to serve a market like the United States which is in some ways harder to crack. Thinking about it more purposefully, with Thomson the opportunity is to tap the growth of global markets instead of just U.S.-driven markets that drive Thomson revenues. Email may have English as the standard language, local meetings are in local languages, hard to start, glad it is.

Question: W here are the most unexpected opportunties and challenges in the merger?
Tom - Thought that I knew about Thomson from using WestLaw and other Thomson products that he knows from Reuters' competitive profile, but Thomson doesn't beat its chest about a lot of its assets and its opportunities. Trying to keep things simple, Reuters is more complex than it ever needed to be, getting out of businesses, reducing product lines. Priorities are around integration of Reuters and Thomson Financial, tempting to look at other standing units at Thomson but they're doing fine right now. The financial businesses were always highly complementary, don't overlook the size of the prize in terms of cost reduction and revenue opportunities. Internationalization of entire company is also key, fantastic time to have buy-side assets in Asia, keep a light touch on centralization, focus on central resources for data mining, reasearch, will keep it simple.

Question: What are some of the interesting verticals in paid content space?
Tom - Would you include financing, accounting, legal? [crowd chuckles - sometimes the West Coast folks just don't get it from this perspective.]. We'll see a lot more convergence, weather, commodities, water availability will become important. Plenty of runway, can build leadership positions in new verticals and strengthen ties.

Good session, Tom's on top of a lot of key trends, his ability to make Reuters more lean and responsive has been quite admirable, especially in his ability to reinvent the culture of a 150-year-old institution. I think that the merger will go fairly well, they're focusing on the financial integration short-term, obviously, but the hoped-for synergies with other sectors is bound to evolve fairly rapidly using Thomson's approach to cross-silo product development.

Labels: financial information, reuters, SIIA Information Industry Summit 2008, Thomson

Presenter: Ed Keating, VP, Content Division, SIIA

Survey of SIIA members

Social networking - only 20 percent don't have plans for it
Facebook ekes out LinkedIn for networking, most use "other" plaforms
Social networking: 81 percent doing to reach new audiences, 41 percent realizing that now

Open issues: Relevance, Control, Copyright/Privacy, Internal Issues, Strategy, Choosing a Platform, Technology Issues, ROI

User-Generated Content: Objectives - 93 percent expect to increase engagement and loyalty

UGC Challenges: Collection/Moderation/Review, Participation

Blogging: 65 percent see blogs having a mixed effect, 75 percent see impact as very critical or somewhat critical - "makes my I.T. staff and corporate staff very nervous"

I'll come back and review this later, Ed went through things very quickly, my first take is that the data reflects our own experiences in our research and consulting practice and in our own professional lives. Publishers are beginning to try to embrace social media with much of the same confusion, fear and skills gap that existed ten years ago when the Web first became a strong emerging factor for mainstream publishers. The difficult thing for publishers to accept is that social media takes them much further from their core editorial, marketing and technology strengths than ever before. They will continue to be relevant but with many of the gains moving towards those who were most aggressive in deploying social media technologies that enable content to reside wherever audiences want it there may be unfolding another chapter of disintermediation for publishers. Having been "Googled" for a decade they now must face being "Facebooked." But the good news is that quality content always rises to the top in time, so although publishers will be strongly challenged to keep up with social media trends they'll be an important part of its success for a long time.

Labels: Research, SIIA Information Industry Summit 2008