Paul Wallbank – Brilliant Communications

Category: economy

  • The elephant in the room; why online publishing is very sick

    The elephant in the room; why online publishing is very sick

    Media 140’s Sydney meetup last week attempted to discuss the future of journalism. While it wasn’t really successful, it did expose the fundamental flaw in the online publishing model and the other crowdsourcing business ideas that rely on cheap or free labour.

    All three panellists agreed that as publishers “The sustainability of our business is very much linked to the quality of content.”  because with several million online voices a site needs compelling and relevant content to attract and retain readers.

    Yet every panel participant agreed the cost of content is falling and in many cases is now free.

    There lies the paradox; if content is so valuable, why is it so cheap or even worthless?

    The model for online publishers is the same as it was in the days of every city having three evening newspapers or when the six o’clock TV news was the most watched show on television. Compelling content attracted readers and viewers which in turned attracted eager advertisers.

    In the days of metro evening newspapers and the six o’clock news there were substantial barriers to competition with printing presses, broadcast licenses and distribution networks required. Today anyone who can afford $10 a month for website hosting can be a publisher.

    Worse, the rates for online advertising are plummeting and with the site owners only making a few dollars there’s little for publishers, let alone the content creators.

    Which brings us back to the fundamental problem, if there isn’t any money for those who create the content then there’s little point in the middle men distributing it.

    Many of today’s online publishers are like the loom weavers of the early 18th Century who derived a short term benefit from the change that eventually destroyed them. The same forces that make journalists work for nothing are the same ones that will render the bulk of publishers insolvent.

    And that could be where the future of journalism, writing and publishing really lies — the bulk of the industry eking out an existance providing commoditised, generic pap and a few niche publications with readerships that attract  good incomes that in turn can pay a small number of  writers.

    That’s certainly the model the panel at Media 140 are betting on and I hope they all do well.

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  • The Future of Journalism

    The Future of Journalism

    Last week’s Media 140 meeting in Sydney looked at the future of journalism and how publishers are paying, or rather not paying, contributors to their online publications.

    The evening was well documented by Martin Cahill and the message was clear — publishers are not going to pay for content because even if they want to they can’t afford it.

    The prevailing view was journalists will have to learn how to multi task; but given YouTube is even more poorly rewarded than online journalism, it’s unlikely sites will be any more generous to video or audio contributions than they are to text contributors. Which only suggests a future of journalists doing more work for no money.

    Valerio Veo, Head of SBS News and Current Affairs Online pointed out SBS is paying a 19 year a $1000 per contribution for covering Obama’s visit to Indonesia.

    Ignoring this is pocket money in terms of sending a camera crew and traditional reporter, the fact SBS are one of the few Australian organisations paying online contributors suggests ABC Managing Director, Mark Scott’s, view at a previous Media140 that only government supported organisations will be able to afford to pay journalists is part of the future is correct.

    So what is the future of professional journalism? Will it be restricted to a few subsidised outlets? Is it the gifted amateur contributing for their love of the masthead? Or is it that of the professional pushing their own or their employer’s agenda?

    Maybe journalists will become editors cleaning up the shoddy contributions of not so gifted writers that have the only benefit of being free. Could it be that curating other people’s content will be the role of future journalists?

    Or perhaps journalists are the new poets, starving in garrets and working in desperate jobs while waiting for the phone call from the ABC, BBC or PBS, penning great works that will lie undiscovered on obscure blogs which will only be found after their passing?

    We didn’t really glimpse the answers at Media140 and this is an important discussion to have as the rise of the digital sharecropper isn’t confined to journalism.

    Many professional and white collar occupations are going the same way and we need to understand what this means for large parts of our economy. Even if we choose not to discuss it, it’s the reality we face.

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  • The real digital divide

    The real digital divide

    The real digital divide isn’t between the young and the old; it’s between those who are prepared to explore new technologies and those who hide from change.

    We’re often told that there’s a divide between the “digital natives”, those who grown up with computers, and the “digital immigrants”, those who’ve had to learn about computers.

    In reality this isn’t true, the real digital divide is about being prepared to learn and explore the possibilities being opened up every day by the Internet and computers.

    I was reminded of this shortly before Christmas when talking to a group of forty year old business owners who dismissed Internet tools like Twitter and LinkedIn out of hand – “a waste of time” “just for kids” and “I tried and received Chinese spam” being a few of the objections.

    The contrast is the Australian Seniors Computer Clubs Association who prove you’re only as young as the computers you tinker with. These seniors, some of whom were retired well before computers became commonplace, are prepared to explore and discover possibilities that change their lives and the lives those around them.

    The forty somethings all had successful businesses and they were the first to admit mobile phones, email and websites had changed the way they work. Yet nearly half of them didn’t have a website for their own business; a statistic consistent with business surveys that find almost 50% of small enterprises don’t have a website.

    In many respects these businesses and their owners are reminiscent of the handloom weavers of the early 19th Century. At first technology worked in their favour and pushed wages up but as industrialisation continued they found their skills redundant and incomes falling. Eventually their trades and businesses disappeared; which is what will happen to complacent companies and industries in today’s industrial revolution.

    A similar thing is happening to society and individuals. While you won’t disappear if you aren’t using the net, those who won’t will find it harder to do pay bills, communicate and simply get things done. Eventually they’ll find themselves marginalised as not being connected will make it harder for family and friends to keep in touch.

    All of this is unnecessary, it’s just a matter of being prepared to try and to give something a go. The real digital divide is between those who choose to give things a go and those who don’t.

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  • The new economy

    The final slide of Steve Jobs’ iPad launch shows how the tech and creative industries are coming together.  The results will be the great economic drivers of the 21st Century.

    Steve Jobs’ launch of the iPad was the classic  succesful Apple product launch before adoring fans however the bigger picture from the show is identifying where the world is heading as technology and arts come together.

    With Apple and Jobs this is nothing new. Apple’s great success has been from incorporating well designed and Engineered product in markets where their competitors have been more on price points and often poorly implemented features.

    Releasing products that work well with inuitive interfaces has allowed Apple to sell their products at a premium while their competitors in the computer and mobile phone markets have found themselves dealing with declining margins.

    Regardless of wether the iPad itself succeeds or fails it shows though is how powerful the combination of good design and clever Engineering are in the new economy.

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  • The Sleazy Carnival

    carnival clown stallSeth Godin set up a friends computer and found “the digital world, even the high end brands, has become a sleazy carnival” as he clicked his way through dozens of pop ups, offers and confirmation windows.

    The only real surprise is Seth can’t have set up a Windows computer for some time as crapware has been the bane of IT techs for years. At the 2007 Consumer Electronic Show Micheal Dell notoriously pointed out this crapware was worth $60 per computer.

    Dell’s point was valid in one respect; if you are selling at unsustainable price points then you have to do everything you can to improve your profit margins.

    At the beginning of 2010, Dell find itself locked in the low value, low margin end of the industry with a declining market share at a time when US consumers are banging shut their wallets. It’s fair to say Micheal has reaped what he sowed.

    It’s unfair to just single Dell out – cost cutting, upselling and downright double dealing is endemic in the IT and electronics industry and the vendors only have themselves to blame as they trained customers to fixate on price and then struggled to claw back a decent profit.

    The tech sector has betrayed its customers and only has itself to blame for the lack of trust and declining profits.

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