Paul Wallbank – Brilliant Communications

Tag: media

Can Warren Buffett save local news?
Warren Buffett’s purchase of local newspaper chain General Media Publications last week raised eyebrows and the question about the future of local newspapers.

Local news has bucked the trend of the big four gatekeepers taking over – most of us expected Google and Facebook with their local business listings, search and community functions to take over the market just as the web has stolen the income streams of the bigger metropolitan mastheads.

What’s more, us digerati believed social media services like Facebook and Twitter would give us most of the information about what is happening in our communities and make the role of the local newspaper redundant.

This hasn’t happened and there’s several reasons for this – a key one is current web services are great at connecting disparate communities but don’t do a good job of connecting local groups.

A bigger failure is both Google and Facebook blew the opportunity to dominate local news.

Basically, local news isn’t sexy, it’s much more of an ego stroke to be treated like a rock star at a conference or to negotiate a billion dollar purchase of a social media application.

Late nights reporting goings on at the local council or chamber of commerce isn’t sexy. So Facebook and Google’s executive focused on the shiny things.

That failure to execute by the big players has largely left the market to the incumbents and their income is largely untouched – Media General’s income is largely static, unlike the declines being seen by big city mastheads.

A similar phenomenon is at work in other markets, in Australia Fairfax’s regional newspaper division is far more profitable than any other sector while competitor APN makes a good return from their publishing activities in smaller communities.

Interestingly almost all of the local news incumbents are saddled with debts or poorly thought out ventures that absorb the profits coming in from their core operations.

Part of the profitability is because local newspapers are established brands. Locals know they will get news about their community that is immediately relevant to them.

For local businesses, they still have to advertise in the local press as that’s where their market is. Local customers might be reading about Federal politics, Kim Kardashian or Occupy Wall Street on the web, but they are still turning to the district news to find out what’s going on in their immediate community.

How this pans out for Warren Buffett is going to be interesting, Berkshire Hathaway tends to run a lean management philosophy in its businesses and this might be one of the saving attributes for their local media investments.

Stripping out the million dollar men who infest the top levels of the newspaper industry and investing in content – both online and in print – may well be the key to success of the local news industry.

Key to the local news success will be energising the advertising sales teams – there’s little point in skilling up journalists in new technologies or getting editors to “think digital” if the salespeople are stuck in the mentality of display print ads being the only thing that matters. This is the same challenge metro newspapers face.

Strong local media matters in both country and suburban communities. It’s essential to the spirit of the local town and a healthy local media is always a feature of a prosperous community.

One of the promises of the Internet is that local groups could seize back the news about their towns and suburbs, this doesn’t appear to be happening. Maybe it’s going to take Warren Buffett to fix it.

Similar posts:
May 27, 2012
Links of the day 14 May 2012
Some great links over the weekend ranging from the future of media and big box stores to a great, quirky clip promoting Scandanavia as a place to do business.

22 Michaels on an amazing presentation on why you should do business in Stockholm. It’s a shame more government agencies can’t do shows like this.

MIT’s Center for Civic Media writes up a discussion by the boss of Google News. I give this more of a write up in Grappling with Online Media.

Scamworld. Not only is The Verge’s expose of the online get rich quick community a great read, it’s also shows one of the future media models.

Business Insider has the real story why the tale of LinkedIn buying employment site Monster was made up. This is great example of how merchant banks try to create a market for flogging client assets. The managers of Football players do exactly the same thing.

Is there money in Big Data? MIT’s Technology Review doesn’t seem to think so.

Ending the era of the megastore. The Fiscal Times on how Wal-Mart is re-inventing itself.

Tomorrow’s blog looks at phishing scams and how social media is helping the more targeted “spear phishing”.

Similar posts:
May 14, 2012
Grappling with the online news beast
The head of Google News, Richard Gingras, last week discussed how the news industry is evolving at Harvard University’s Nieman Foundation.

Much of Richard’s discussion centred around disruption – the newspaper industry was disrupted in the 1950s by television and by the 1980s most print markets had seen several mastheads reduced to one or two.

The remaining outlets were able to book fat profits from their monopoly or duopoly position in display and classified advertising.

By 2000, the web had killed that business model and the newspaper industry was in a decline that continues today as aggregator sites like Huffington Post steal page views and Google News further changes the distribution model.

One of the problems for the news industry is how different the online mediums are from print, radio or television broadcast. The struggles of media startup The Global Mail is a good example of this.

In the middle of last year news started trickling out that one of the Australian Broadcasting Corporations’s top journalists, Monica Attard, had left the broadcaster to set up The Global Mail, an online news site funded by Wotif founder Graeme Wood.

The site launched on schedule in February 2012 and underwhelmed readers with pedestrian content and a confusing layout. By May, Monica Attard announced she was leaving the organisation she’d founded.

Tim Burrowes of the media site Mumbrella examined why the Global Mail is struggling, his Nine problems stopping The Global Mail from getting an audience details how the site doesn’t use online media effectively.

At heart is a fundamental mismatch between the methods of journalists raised in the “glory days” of print and broadcast journalism against those of the online world, not least the much harsher financial imperatives of those publishing on the web.

One key problem it the TL;DR factor – Too Long; Didn’t Read. Where online readers tend to leave stories after around four hundred words.

Richard Gringas is quoted as encountering this problem when he worked at online magazine, Salon.

At Salon, articles were paginated, but only 27% of readers made it to the end of the four-page articles. Compared to competitors, Richard was told, this was a good benchmark. But with fresh eyes, he was astounded that a product was being produced with the knowledge that the vast majority of the audience would not consume the entire piece. Richard loves the long form, but if the objective is to convey information, we need to think about the right form for the right medium at the right time.

So “long form” journalism has to be written the right way and it has to be backed up with good visual components and have “short form” versions suited to the more impatient readers who make up the bulk of the web audience.

The New York Times made a step in this direction with their iEconomy series on how the US middle classes have been displaced with manufacturing’s move to China.

An even better example of journalists using the web well is The Verge’s Scamworld where an online expose of Internet get rich quick schemes and the conmen behind them.

Scamworld shows us what skilled journalists can do online. The amazing thing is the site’s new steam is tiny compared to those of established outlets like the New York Times, Guardian, Fairfax or those of News Corporation.

This failure to execute by incumbent news organisations isn’t because they are lacking talent – every young, and not so young, journalist has been required to have multimedia skills and the ability to file stories in multiple formats for at least a decade.

Old Media’s problems lies in the mindsets of senior journalists, editors and their managements who are locked into a 1950s way of thinking where fat advertising revenues funded the adventures and expense accounts of roving reporters who tough as nails editors occasionally bullied into filing stories.

That model started to die in the 1980s and the Internet gave it the last rites.

Richard Gringas’ discussion at Harvard shows news and journalism isn’t dead, but it is evolving. Just like many other disrupted industries, the news media has to adapt to a changed world.

Similar posts:
May 14, 2012
Consumer surplus?
Last week I came across the term “consumer surplus”, the Boston Consulting Group claimed the gap between the cost of producing media content and what customers are prepared to pay creates a “consumer surplus”.

That consumers of media want it but aren’t prepared to pay for it is a basic truth; the 20th Century media model is based upon advertising subsiding journalism and entertainment.

For all forms of media this was true; from TV and radio stations being fully funded by advertising to newspapers and magazines’ cover prices barely covering distribution costs.

Take out advertising and all these models are dead. The only alternative is government funding.

Losing the advertising rivers of gold to web services is what’s killing the established business model. It appears that TV and radio will hang on, for now, but newspapers and magazines are in serious difficulties.

Simply put, there has rarely been a market for journalism; readers and viewers aren’t prepared to pay. Journalism’s golden years of the 20th Century were based upon having a relatively captive market for advertisers; now advertisers can go elsewhere, they have.

Putting a sophisticated label on a basic concept is something consulting companies are very good at and Boston Consulting Group has done an excellent job with this report.

The fundamental truth is that it doesn’t matter how good your product is, if you can’t find a way to make someone pay you for it then you don’t have a market or a business.

Which is what the real challenge is for online content creators, finding the model that pays. The first person to do that becomes the 21st Century’s Randolph Hearst.

Similar posts:
April 1, 2012
So you call that journalism?
On the revelation his expose of Apple’s employment practice contains “significant fabrications”, Mike Daisy reached for the “I am not a journalist and “my work is entertainment” excuses.

This gutless and disingenuous defence is a common one used by those caught distorting facts or outright lying to advance their causes and enrich themselves.

Perhaps the Mike Daisy expose, along with the sad events around the Stop Kony campaign, should make us consider who is a journalist and what journalism is.

Is journalism reporting the facts as we seem them or describing the world around us? If so, does a “journalist” have to work for an established and recognised media outlet?

The modern idea of warrior, professional journalism was born in the 1930s with celebrity journalists like Ernest Hemingway or Evelyn Waugh reporting from Spain or Ethiopia.

In the 1960s we saw this idea become established through the Vietnam war and reached its peak in the early 1970s with the Watergate scandal.

Today, someone who is an actor by trade can be appointed as the technology correspondent by a newspaper and automatically become a credible journalist in their field.

At the same time someone with years of experience in their field — it could be food, travel, technology or anything else — is sneeringly derided as a “citizen journalist” by those who draw a cheque from the established, and dying, media should they decide to self publish.

The sad thing is much of what is published as “journalism” by the established media outlets is entertainment and many of the “facts” reported are self interested propaganda promoting the latest music star or pushing a political agenda.

All too often, those claiming to be credible journalists are being used to give the illusion of of credibility on things that simply aren’t true at all.

We need to re-evaluate what journalism is and how misleading and self-interested reporting distorts debate, markets and the democratic process.

A start would be in ditching the “journalism as entertainment” meme.

Similar posts:
March 17, 2012