Jun 282014
 
newspapers are dying as the media business models move online

You know a product has problems when retailers start start moving it out of key retail positions. When the product was the retailers’ core business, you know the entire industry is in serious trouble.

Mark Fletcher describes in the Newsagency Blog how he’s moved his city’s number two selling paper off the main level of his newspaper display.

“Sales are not paying for the space,” Mark says bluntly.

Newsagents relegating newspaper fits nicely into Ross Dawson’s Newspaper Extinction Timeline, in the case of Mark Fletcher’s newsagency Dawson sees the Australian newspaper industry vanishing by 2022.

For newsagents the signals have been clear for some time that they have to adapt to a society where paper based products – newspapers, stationery and greeting cards – aren’t in demand.

The process of adapting isn’t easy or smooth – many experiments will fail and even the smartest business people will make expensive mistakes. That’s the nature of evolution.

Newsagents though are just one example of changing marketplaces, there’s few industries that aren’t being disrupted by the technology and economic changes of our times. All of us are going to have to adapt to a rapidly changing world.

 

Mar 202013
 
The BBC investment of Lonely Planet didn't succeed

The BBC yesterday sold Lonely Planet to US media company NC2 Media. Their £80 million loss on the venture puts them in good company as established media struggle to find new online channels and revenue streams.

While the losses aren’t trivial, they are not quite in the league of News Corporation $545 million loss on MySpace or Time Warner’s billion dollar adventure with AOL.

All three stories show how tough it is for ‘old media’ adapting to a new landscape.

The problem is there for ‘new media’ as well, most ventures struggle to make money and many of the success stories like Huffington Post rely on a combination of free content and a greater fool buying them.

No-one has really figured out what the new media revenue models are; not the established publishers or the online upstarts.

Lonely Planet’s online success was due to their forums which, like most web discussion boards, can feature discussions politely described as “robust”.

This was always going to a problem for the BBC’s public service management culture and it resulted in the shutdown of the Lonely Planet Thorn Tree forums over Christmas.

So it’s not surprising that the BBC has decided to end its experiment and now the corporation’s management is dealing with the criticism of those losses.

While it’s easy to criticise the BBC for the deal, at least the broadcaster was attempting something different online, doing nothing is probably a poorer strategy than buying MySpace or Lonely Planet.

Over time, we’re going to see a lot more experiments and many will be public embarrassments like those the BBC and News Corporation have suffered, but there will be successes.

Someone will crack the code and they will be the Randolph Hearsts of this century. It could one of the Murdoch heirs, it could be the owners of NC2 Media or it could be some young, hot shot developer working in a Rio favela or the slums of Kolkata.

But it will be someone.

It’s an exciting time to be in business.

Feb 222013
 
sensis-phone-print-phone-directory-dying-as-digital-takes-over

Yesterday Sensis announced it would restructure for digital growth by sacking staff, offshoring and “accelerate its transition to a digital media business”.

The directory division of Telstra has been in decline for years, a process that wasn’t helped by then CEO Sol Trujillo embarking on his expensive “Google Schmoogle” diversion.

A decade later, Managing Director John Allen has announced another 650 jobs to go from the remaining 3,500 workforce.

John’s comments are worth noting.

Until now we have been operating with an outdated print-based model – this is no longer sustainable for us. As we have made clear in the past, we will continue to produce Yellow and White Pages books to meet the needs of customers and advertisers who rely on the printed directories, but our future is online and mobile where the vast majority of search and directory business takes place.

Carol King put it best – it’s too late, Baby. These are words that should have been said a decade ago.

Feb 152013
 
Local village

One of the hoped for futures of publishing was cheap, hyperlocal websites that report news on individual suburbs or neighbourhoods and get advertising from local businesses.

Last week US TV network NBC abruptly closed down its Everyblock online service, leaving loyal users angry and bemused. Right now it appears though the hyperlocal concept isn’t working.

The failure of Everyblock

Founded five years ago, Everyblock had an interesting model of mashing up local data like Flickr pictures and government information with news so residents and visitors would have an accurate up-to-date picture of what was happening in their neighbourhood.

Everyblock’s failure follows AOL’s struggle to get their hyperlocal play Patch working, although AOL reported in 2012 that Patch’s revenues have doubled.

Whether that doubling is enough to save Patch remains to be seen, it’s quite clear that some question the sustainability of AOL’s growth in revenues and page views.

All of this raises the question of why hyperlocal isn’t working.

A game for amateurs

The main reason is that there’s not enough money it –anybody who is going to run a hyperlocal site is going to be doing it for love or because there’s a dumb corporation burning shareholders’ equity on the venture.

In most communities there simply aren’t enough advertisers interested to pay the bills and you can forget any paywalling.

Most critically for local publishing ventures, the local advertising market has been suffocated by the web. Twenty years ago, the local plumber or cafe would hit most of their market by spending $2,000 on their Yellow Pages listing and probably double that with a weekly ad in the classified section of the local newspaper.

Today, a web site with sufficient SEO smarts to come up on their first page of searches for their suburbs is enough, many can get away with a free Facebook or Google Plus for Business page, despite the dangers of using other people’s services to promote your business.

For the telephone directories this change has been catastrophic while local newspapers only survive thanks to their less than healthy relationship with real estate agents.

Local market failure

The interesting thing with the evolving local media market is just how poorly the web giants have performed.

Two years ago, Google appeared to have the sector sown up with the Google Places service but a combination of poor service, restrictive rules and an obsession with Google Plus have seen the company squander their advantage, leaving their local search service underused and irrelevant.

Similarly, Facebook looked like they could take that market off Google but they too haven’t executed well.

Which leaves local businesses reliant on their own websites and a hodge-potch of services like Yelp!, Tripadvisor and Urbanspoon.

This doesn’t serve the business or the customer well.

Where to for local news?

A bigger question though is where do people go to find local news?

Increasingly it looks like social media sites like Facebook and Twitter are the place as people see what their friends and neighbours post. It’s not great, but it’s better than the local newspapers increasingly stuffed with syndicated content with a few local stories from an overworked part-timer.

It’s not clear that hyperlocal news has failed, but right now it’s not looking good. Perhaps it needs somebody with a truly disruptive model to find what works in our communities.

image courtesy of davidlat on sxc.hu

Jan 132013
 
newspapers are dying as the media business models move online

The future of journalism is bleak if sales teams can’t figure out how to sell ads on news sites.

Eighteen months ago News Limited, the Australian print arm of News Corporation, put out the first indications that content was going behind a paywall.

This was always going to be controversial so a softening up process was put in place including the then head of News Digital Media, Richard Freudenstein, speaking at various conferences.

Inviting bloggers to a briefing on News Limited’s online future was another strategy which, predictably, resulted in varying views on the prospects from attendees like Laurel Papworth and Ross Dawson.

Another part of the process was Freudenstein penning the odd article for The Australian describing the rationale behind the paywall.

“And we will have completely solved how to sell advertising across print, tablet and digital.” Freudenstein said at both the end of his Australian article and a later Q&A at the Mumbrella 360 Conference.

Sadly this appears not to have been the case, a year later News was struggling with digital revenues.

This is not just a problem for News Limited or Australian publications, The Economist looked at the struggles of print media in 2012 and cited a graph from Reflections Of A Newsosaur showing how newspapers’ digital revenues have been flat lining for nearly a decade while their print revenues collapse.

digital advertising revenues have been flatlining for decades

One of the reasons for traditional media’s stagnation is their salespeople have been bought up selling newspaper display ads, are locked into antiquated KPI’s and have commission structures that reward print over digital.

This was bought home to me a few weeks after News Limited started its charm offensive at a presentation by Cumberland Press, News Limited’s suburban division, where the salesman told a room of small business owners about the range of print advertising products available in the local newspapers.

Not once was True Local, News Limited’s Google Places competitor, mentioned. When I asked about it, the salesman waved the idea away and said he’d throw in an annual sub if I took out a week’s worth of quarter page display ads in the Manly Daily.

Many of the small business owners in the room thought that was a good deal, which shows its not just newspaper managers who are having a digital steamroller running over their revenues – but that’s a post for another time.

As The Economist and Newsosuar shows, News Limited’s experience in selling digital advertising is the norm and it’s genuinely shocking that newspapers’ digital revenues have flatlined while the revenues of Google and other online advertisers soar.

When News Limited announced its new strategy they also announced a community site to discuss the issues of digital news gathering and online advertising. They called it The Future of Journalism.

Just over a year later The Future of Journalism site looks like this;

the future of journalism is gone according to News LimitedThat’s a dismal view of the future of journalism but it’s pretty accurate if somebody can’t figure out how to sell ads on news sites and break newspapers out of their online advertising stagnation.

Jan 012013
 
Journalism is changing as costs have been cut back

The New York Times’ wrap up of the year’s obituaries may give us an idea of one of the many futures for journalism.

It’s easy to fall into the trap of thinking that obituaries are just dry recantations of the lives of dead white men and they often are – particularly when about celebrities or undistinguished politicians and businessmen.

Good obituaries though are masterpieces and those of society’s genuine unsung heroes are moving and educational. A well written obit of an obscure but deserving person is usually a rewarding read.

As part of the their summation of 2012, The New York Times has taken their obituaries one step further by asking readers to submit photos and stories of their loved ones who’ve passed away during the year.

The Lives They Loved is the result, a wonderful collection of touching photographs and stories of parents, partners, children and friends who have passed away in the last year.

User Generated Content – UGC – is one of the foundation stones of new media. The idea is the audience themselves provide the content which frees services like Facebook, YouTube or I Can Haz Cheeseburger from the costs and irritations of actually creating things that people are interested in.

The New York Times project may well show that traditional news channels with their dedicated audiences and relevance to communities may do UGC as well as any hot new Silicon Valley startup.

While User Generated Content isn’t the future of journalism, it almost certainly will be one of the them. Whether it turns out that old media use it better than the newer upstarts remains to be seen.

Dec 182012
 
newspapers are dying as the media business models move online

Brother’s plea shows up online failings crows the Sydney Morning Herald over social media’s role in misidentifying the perpetrator of the Sandy Hook school shooting.

The problem for the SMH is that social media wasn’t responsible for the story. As the Washington Post reported, CNN and various other outlets misidentified the shooter as his brother who had to take to social media to correct the record.

For the mainstream media, the Sandy Hook shooting was not their finest hour; not only did they misidentify Ryan Lanza as the shooter, but they mistakenly reported his mother had worked at the school. When the Daily Mail does a better analysis of the story than many outlets, you know something is wrong.

Something is certainly wrong at Fairfax as the cutting of resources results in the Sydney Morning Herald being three days behind the story and factually wrong on key aspects – not to mention adding a smug headline that is embarrassingly incorrect.

While the writer of the SMH article should be held to account for sloppy work and poor research, the real responsibility for this embarrassment lies with the paper’s editors and management who should be ensuring what appears under the masthead is accurate and reliable.

Both The Age and Sydney Morning Herald are essential to the fabric of their respective cities, this story is a good example of the important role the SMH has in shining light on the arcane dealings of the city’s business community. Fairfax can, and should, do far better than a poor, badly researched story on social media.

Ironically, the mis-identification story quotes media academic Julie Posetti as saying “anyone with an internet connection could now contribute to and comment on the breaking news cycle without going through the filters of the traditional media.”

At Fairfax, those filters are broken with the breathing space from selling its New Zealand digital operation, the company’s management has an opportunity to fix their credibility problem and focus on its core business.