Category: media

Times get tougher for journalists and the middle class

Business and sports reporting is increasingly being done by computers, many other middle class jobs are going the same way.

Journalists have had a tough time over the last twenty years and it’s about to get tougher.

Last July The Associated Press announced they will automate most of their business reporting. AP’s Business News Managing Editor, Lou Ferrara explained in a company blog how the service will pull information out of company announcements and format them into standard news reports.

instead of providing 300 stories manually, we can provide up to 4,400 automatically for companies throughout the United States each quarter

This isn’t the first time robots have replaced journalists, three years ago National Public Radio reported how algorighms were replacing sports reporters.

Ferrara admits AP has already automated much of its sports reporting;

Interestingly, we already have been automating a good chunk of AP’s sports agate report for several years. Data comes from STATS, the sports statistics company, and is automated and formatted into our systems for distribution. A majority of our agate is produced this way.

Reporting sports or financial results makes sense for computer programs; the reciting of facts within a flowing narrative is something basic – Manchester United led Arsenal 2-0  at half time, Exxon Mobil stock was up twenty cents in morning trading and the Japanese Yen was down three points at this afternoon’s close don’t take a super computer to write.

Cynics would say rewriting press releases, something many journalists are accused of doing, could be better done by a machine and increasingly this is exactly what happens.

The automation of commodity reporting isn’t just a threat to journeyman journalists though; any job, trade or profession that is based on regurgitating information already stored on a database can be processed the same way.

For lawyers, accountants and armies of form processing public servants the computers are already threatening jobs – like journalists things are about to get much worse in those fields.

It could well be that it’s managers who are the most vulnerable of all; when computers can monitor the workplace and prepare executive reports then there’s little reason for many middle management positions.

This is part of the reason why the middle classes are in trouble and the political forces this unleashes shouldn’t be underestimated.

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Is digital enough to save magazines and newspapers.

The 2014 PwC Global Media and Entertainment report says newspapers’ revenue decline is over but it’s not all good news.

“Globally the newspaper industry’s revenue decline will end in 2015” declares PwC in their 2104 Global Media and Entertainment report released earlier this week.

While PwC thinks the decline for print – both in newspapers and magazines – is over, however there’s little if any growth on the horizon with the company forecasting 0.1% growth per annum for newspapers and 0.2% for magazines over the next four years.

The reason for the stabilisation in revenues is the move to paid apps and paywalls, which means advertising is less important to the print industry’s revenues.

Circulation revenue will almost match advertising revenue by 2018. In 2013, while circulation revenue rose globally after years of decline, advertising revenue continued to fall. Circulation’s share of total revenue will rise from 47% in 2013 to 49% by 2018, meaning consumers may soon become publishers’ biggest source of revenue.

PwC’s view is consistent with the advertising trends flagged by Mary Meeker in her State Of The Internet report last week and, if the forecasts are correct, it will show the magazine and newspaper industries are making the transition to a new business model.

One of the strange points in the PwC report is the talk of ‘Digital First’.

‘Digital-first’ is becoming the norm for newspaper publishers. For many years, news publishers’ digital output was led by their print products. But increasingly, titles will be reorganised as ‘digital-first’ operations, publishing content that works best on connected devices.

This is true, but newspaper managements have been proclaiming their ‘Digital First’ strategies for close to a decade; any media company that doesn’t put its digital channels first is doomed to extinction anyway.

Which is one of the important points of the PwC survey; it’s about the global industry and while that might be flat-lining, individual outlets will still fail. That’s something which concentrate the minds of those managing some of the more poorly run media empires.

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Bridging the online advertising gap

Mary Meeker’s State of the Internet report reminds us that the online advertising model is yet to be found

At the Code Conference held outside Los Angeles last week, analyst Mary Meeker delivered her annual State of the Internet slideshow covering the trends and opportunities in the online world.

One of the most watched graphs is the time spent on media versus the advertising spend on that channel.

For years Meeker has shown print is receiving a higher share of advertising dollars for the amount of time consumers spend on it compared to online channels.

That implies print revenue is due for collapse and online advertising revenues will surge. Here’s the 2014 chart.

2014-advertising-spend-gap-mary-meeker-kpcb

If we track this over the last five years, here’s what we see with the ‘difference’ column being the sum of print’s over-representation and online’s (mobile and web) under-spending.

Year Print time Print share Online time Online share difference
2010 12 26 28 13 29
2011 7 25 36 23 31
2012 6 23 38 25 30
2013 5 19 45 26 35

The collapse in print’s share of consumer time, down 60% in five years, is stunning and the 2012-13 changes may indicate advertising spend may is now collapsing as marketers start to adapt to the changed marketplace.

It could be however that advertising as we know it has to change; one of the key reasons for online – particularly mobile’s – spending being under represented is because no-one is quite sure what works in the newer mediums.

Advertisers may know that consumers are moving from print channels, but at least they know what works in print. Online the experts’ guesses are still not much better than the amateurs’.

In short, we’re still watining for the digital era’s David Sarnoff. As Mary Meeker keeps reminding us, it’s a $20bn a year opportunity.

 

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Three business lessons from the New York Times

The New York Times Innovation study has important lessons for all business owners and managers.

“The New York Times is winning in journalism,” starts the newspaper’s much discussed internal Innovation Report. Then in great detail it goes on to describe how the audience is being lost to upstarts like the Huffington Post and Buzzfeed.

Given the number of digital forests that have been felled discussing the report in the last week, it’s not worthwhile giving an in depth analysis of the study – particularly given Nieman Labs’ comprehensive dissection of the document.

What does stand out though are a number of over-riding themes that apply to almost any business, not just struggling traditional media outlets.

Being digital first

A constant mantra in the NY Times report is about being ‘digital first’ – if you’re thinking about that today, then you’re probably too late in your industry.

Every industry is now digital: If you’re designing widgets, you’re doing it on CAD system; if you’re selling real estate, you’re listing online (one of the great killers of the old metropolitan newspaper model) and if you’re selling doughnuts, you’re placing your suppliers’ order electronically and maybe 3D printing your icing patterns in the near future.

There isn’t one industry that isn’t being radically changed by digital technology.

Breaking down silos

One of the areas that’s been most resistant to digital change, and yet is the most threatened, is management.

Silos within organisations are a triumph of management power and make it difficult for a business to be dynamic when it’s necessary to negotiate with different fiefdoms just to change the colour of paperclips.

Those silos are fine when industries are cosy and there’s little competition but when disruptors enter the market those management empires become a dangerous, and expensive, weakness.

The New York Times study spends a great deal of its pages discussing how to break down silos within its own organisation and this is something every business owner or manager should be exploring.

With modern communication, information management and workplace collaboration tools many management roles are no longer needed.

For smaller businesses, this is the greatest strength when competing against larger corporations as Huffington Post, Buzzfeed and Business Insider  have shown in stealing the market from the New York Times.

You need to be found

One of the toughest conclusions from the NY Times study is that the quality of content actually doesn’t matter in the marketplace; The Huffington Post and Buzzfeed do an excellent job of taking the NYT’s work, repackaging it and redistributing it in a way readers prefer.

That might be a transition effect – it’s hard not to think that should original content creators like the NY Times be driven out of business then Buzzfeed will have to start employing more journalists and Arianna paying her writers – however right now gloss beats quality.

Buzzfeed and the Huffington Post are attracting audiences because their stories are easy to find online and their headlines almost beg you to read them.

For non-media businesses, the lesson is you need to be found; you may be the best restaurant, electrician or accountant in town but if you’re on the fifteenth page of Google in search results for your industry and suburb then you’re doomed.

The New York Times faces its own unique set of challenges, as do the publishing and media industries, many of the lessons though from the NYT  Innovation paper though can be applied to many businesses.

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Keep it short and snappy

Charts as the thinking person’s cat video says Kevin Delaney, co-founder of news site Quartz, as he recommends keeping stories short and snappy

“Charts are our version of cat videos” says Kevin Delaney, co-founder of the Quartz news website, in an interview with Richard Edelman, president and CEO of the Edelman PR Agency.

Keep stories short and snappy or long and in-depth with Delany seeing 500 to 800 words as being a ‘dead zone’ for online stories. Interestingly, Edelman’s piece comes in at 760 words.

In future, I’ll be keeping blog posts either very short or extremely long on this site.

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Three screens, four screens, infinite screens

The three screens idea of media consumption that was cutting edge five years ago now seems rather quaint.

This morning I had the opportunity to interview designer of the Fitbit, Gadi Amit, ahead of his visit to Sydney next month.

I’ll have the full interview written up in the next couple of days, but Gadi made an interesting point about not being in a ‘four screen world’ anymore, but in one where there’s infinite screens ranging from wearable glasses and watches through to smartphones and intelligent signage.

A few years ago the concept of the ‘third screen’ came into use when we started talking about the smartphone supplementing the PC and the TV, it quickly morphed into four screens as the tablet computer appeared.

Now the five year old idea of limiting ourselves to three screens seems quaint when there doesn’t seem to be any limits in the way we can view information.

The end of the three screen theory is an interesting illustration on how quickly technology is moving, it also shows how rapidly business is changing.

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Peak Google and the limits of internet advertising

The warning that online advertising revenues may have hit their limits has huge consequences for the internet industry.

Last week, Google’s share price slumped on news of poorer than expected revenue results and website Asymco has a detailed examination of how the company’s growth might have reached its limits.

Asymco’s warning to the online advertising industry is clear with the warning that revenues might start to decline in 2016.

That online advertising may have reached its peak means even an even more uncertain future for businesses rely on those revenues, and times have been tough for those sites in recent years as returns have fallen.

At the same time online ad spending seems to be peaking, print advertising revenues in the United States dropped a further 8% last year with income at now at 1982 levels. It seems publishers can’t win either way.

So its now wonder that online services like Google and Facebook are looking to payment systems and other ways to generate revenue, for online publishers things are even more problematic.

What is clear is the advertising driven revenue methods that work so well for the broadcast industry aren’t working for online publishers and quite possibly other internet based businesses as well.

The online industries need a David Sarnoff to figure out a model that works.

 

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