media | Paul Wallbank - Communications Professional

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

Depending on cheap or free labour is a doomed business model and this is a problem for online publishers

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.

The Future of Journalism

Many occupations are faced with free or cheap labour swamping their marketplace. Journalism is one of those trades. Media140 met in Sydney to discuss exactly where the future of journalism lies.

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.

ABC Weekend computers

The next ABC spot is this Sunday at 10am on 702 Sydney.

Join Paul Wallbank and Simon Marnie to discuss what you should be looking for in new computers and end of financial year technology shopping.

Your comments and questions are welcome so call in on 1300 222 702 or SMS on 19922702.

If you aren’t in the 702 Sydney area, you can listen online through the 702 website.

Weekend computers on LinkedIn events
Weekend Computers on Facebook events

Dangerous Game

Associated Press have warned they will start taking action against news aggregrators like Google. Rupert Murdoch made similar noises last week.

As Fred Wilson has pointed out, the problem for AP and News is the web is now the newstand and taking publications off the shelves is not good business sense.

We see that with the Australian Financial Review. Its position as an Australian journal of record has been diminished by Fairfax’s incompetent obsession with protecting content.

As result, other channels such as The Australian, Business Spectator and blogs have stepped into the vaccuum and eroded the AFR’s online authority.

Following the RIAA path and suing Google, the Huffington Post and any blog that dares link to their sites will backfire on the news industry just as it did on the record industry.

In many ways newspapers are even more vulnerable as journalists employed by organisations like News and AP are quick to rip stories off from blogs, web forums or MySpace and Facebook pages with little regard for permission or attribution.

I suspect it’s one legal quagmire Associated Press or Rupert Murdoch might rue becoming bogged down in at the very time their business models are challenged by both economic and technological change.

Survey Reveals Almost 50% Of Aussies Use Mobile Phone In Bathroom

Is the title of this Microsoft press release not the dumbest one so far this year?

The release itself is full of pointless and silly factoids which I’m not going to even bother repeating.

What will be interesting is which media outlets will pick this up and run it as “news”.

Should you drop the Yellow Pages?

yellow-pages Today’s Australian reports Sensis’ Yellow Pages revenue is up 5% and White Pages over 11%. That’s an interesting result as it bucks the evidence that online advertising is hurting them.

At business events I’m finding many owners and managers are telling me they are dropping their Yellow Pages ads as they find they aren’t getting the returns they were hoping for and think online offers more return for their advertising dollar.

There’s a lot of people who agree with that idea and even Sensis’ e-business report showed 89% of consumers are using the net to research purchases.

So there is a pretty good argument for businesses to move their advertising online, but before doing so you need to look at what channels your market is using to find you.

For some businesses the Yellow Pages is still an important channel. For instance, the local plumber cannot afford to be without a Yellow listing.

But other businesses, say an online auction site, don’t need to worry about an expensive Yellow Pages display ad although a listing in the White Pages would probably help their credibility with some customers.

In the end, it depends upon your business and the customers you want to reach. If your business is a service business that generates work from emergency calls, such as the plumber, dentist, vet or a computer technician, then you will need some presence.

Even if your business doesn’t cater to those markets, the online Sensis listings are still useful as this plugs your business into the directory enquiries, 1234 and web based services, although these may not be as useful as Google or Yahoo!.

Marketing’s all about telling your story to the right people. While many of those people are now surfing the web, it may suit your business to still spend something for those people who insist on using the Yellow Pages.

Social networking and old media

I’m currently attending the Online Social Networking and Business Collaboration World Conference.

There’s some interesting perspectives on where social networking is going and how people are going to make money from it.

Personally, I think too many of the big players like Bebo and MySpace are too fixated on the old broadcast media model of top down content where they control everything.

Particularly fascinating is how dismissive many of the attendees are of YouTube and Facebook. The funny thing is there were five people around me with laptops on and all of them visited their Facebook pages during the morning seminar.

The icing on the cake was on the bus home. The girl in front of me had her MacBook open and she was editing her Facebook page.

It seems to me the big established media companies are struggling with their investments in the social media space.

TIO annual report

The Telecommunication Industry Ombudsman’s 2007 annual report is a less than proud moment for the Internet industry.

The headline is an 84% increase in complaints about ISP behaviour. But this is only part of the story, the details are even more disturbing.

The most notable jump was in complaints about excess data charges. This is only going to get worse as more people start using VoIP and downloading videos. It’s exacerbated by the swing towards ISPs counting uploads and downloads towards their download limits.

One item that jumps out of the report is the confirmation ISPs don’t keep proper records of conversations with customers. While the TIO points at smaller providers our experience is the bigger providers are not better.

The biggest increase was complaints about debt collection procedures where customers have been listed as defaulting on an Internet bill without any notice from the ISP. This probably relates to a couple of sizable and incompetent ISPs going broke late last year.

As we saw with the One.Tel liquidation, the record keeping of these companies is disgraceful and it’s highly unlikely they can prove any debt when challenged. Not that this stops them trying to recover what they claim is owed.

In the category of customer service, ISPs were by far the worst performer. The biggest category of complaint was inadequate or incorrect advice. This is barely surprising

Direct debit problems continue. Part of the problem here is with the banks who consider direct debit requests to be more important than their customers. The TIO points out this a breach of banking code of conduct.

Given ISPs can’t get their billing right and don’t give records it does appear that giving a direct debit authorisation to them is a risky thing to do.

This report is a wake up call to ISP and the entire IT industry. Things have to improve. Some of the areas we need to look at are;

better training
improved record keeping
proper QA and procedures, especially for escalating customer complaints
clearer and more concise bills

The silly thing is all of these would have positive return for ISPs. By providing better information to customers and staff, they will reduce costs and probably improve sales.

Why you should be careful of IT articles.

Trevor Cook raises an interesting point about IT journalism in his Corporate Engagement blog.

While he’s been a bit provocative with his description of the IT media being “low end” he does flag an important issue that Australian IT users should be aware of; that many reviews and articles are barely warmed over press releases.

In fact some technology journalists and publications are notorious for going the next step and just slightly rewriting overseas articles.

When you are reading an article on the latest and greatest IT products keep this in mind. If it appears the writer hasn’t used the product and is merely parroting some media release then you should be careful. Many of the articles have been ripped straight off the wire.

It should be emphasised that this isn’t usually the journalists fault, it’s usually because the publication is under resourced and simply can’t generate original content. Reprinting press releases is an easy and cheap way to pad out content.

Personally, I like publications like Australian Personal Computer that does take the time to properly review products and cast a skeptical eye over the often inflated claims of IT vendors.

When making decisions on buying technology, don’t just rely on what you read in the paper.

Fourth Estate Domain, 2 October 2007

This month’s Sydney FED featured Richard Webb, CEO of Blue Freeway. As usual it was well attended night and we should thank Sally Mills for organising these valuable events.

Blue Freeway’s an interesting beast. They have pulled together a number of disparate companies with the aim of offering a “one stop shop” for interactive and digital marketing.

It’s certainly an attractive model and a number of others are looking doing likewise.

The problem I see with this model is that it becomes a jack of all trades and struggles to do any of them well. The alternative is you end up with the dreaded “siloing” where each business unit doesn’t communicate with the others.

Richard addressed this in his discussion. His solution is strong branding, my suspicion is that it will need some very strong management as well.

There were many other issues raised but I’ll have to wait for the podcast as I didn’t take notes and things started getting hazy later (thanks to Sally and Hazel for the drinks).