Category: media

Delivering products

Focusing on delivery misses why we we are in business.

Once upon a time the local plumber got to work by bicycle, then he got a jalopy and now he shows up in a van or a hotted up ute. The plumber and his customers don’t care about the way his services are delivered.

A hundred years ago the retail industry was dominated by corner stores that customers could walk to, they received their deliveries by horse drawn carts and made deliveries on bicycles.

Then along came the motor car, which changed shopping habits and delivery methods.

Fifty years later the corner stores were a dying breed as they were replaced by supermarkets which customers could drive to and they took their deliveries by truck.

Today the retail industry is changing again, as the Internet changes shopping habits and society in ways similar to the motor car.

A similar pattern of change happened in the media sector; the evening paper died as commuters switched to cars and reading the Tribune on the tram or train home became less relevant.

Morning papers survived as people took deliveries to read over breakfast before driving to work.

At the same time radio and television became the dominant way most people got their news.

Even more the retail, the web has dramatically changed news distribution methods.

As the effects of Fairfax’s restructure sinks in, there are a group of people who don’t seem to want to accept reality – newsagents.

Mark Fletcher’s initial post about Fairfax’s restructure on his Australian Newsagency Blog attracted some harsh comments;

“Whilst the print media is arguably in decline I consider this post to be scare mongering……Fairfax will be here in print for years to come and to say or suggest that some days of the week will be or may be cut is pure conjecture at this point.”

” I am in semirural metropolitan Sydney. We have just added another 100 customers to our delivery run. Majority dont like reading their news online – old habits die hard. I hope that Fairfax dont abandon them. They like getting their newspapers in print.”

“Hi i will not pay to read online why it is all free, but will buy paper”

Focusing on print condemns those newsagents to the fate of the corner shop.

What is missed in the discussions about the future of the media is that medium is not message – people want relevant content delivered in the most convenient way.

This is true in every business. What we do is not really related to how we deliver the product, if we’re tied to one way of getting our services to a customer then we’re in trouble.

Fairfax of the Future

Can an iconic media company be saved?

The embattled board of Fairfax has announced major changes to the way they publish their newspapers. Is it too little, too late for this iconic media organisation?

As the board of Fairfax struggles with poor performance and angry demands from prominent shareholders, the company has announced a change of focus and a reduction in their printing capacity.

In a presentation given by the Chief Executive Greg Hywood, the company’s management goes through the scope and logic of their changes which are mainly around their distribution networks.

Rethinking print

The clearest message from the presentation is that readers have moved online with over three-quarters of readers now accessing the Age and Sydney Morning Herald digitally.

While there are still substantial print revenues in their metro division, around $500 million dollars a year right now, it’s clear Fairfax has to reduce printing and distribution costs.

Cutting the Chullora and Tullamarine printing plants makes sense given Fairfax has regional capacity just outside both Melbourne and Sydney.

Shrinking the SMH and Age to a “compact” size – tabloid being the word that dare not speak its name – will get shrieks of outrage from those wedded to the broadsheet concept, but really doesn’t make much difference to the online readership that represent the future.

Digital first

Fairfax’s “digital first” strategy where online publication take precedence over the print editions will be detailed in a few weeks, this tis a change that should have happened years ago.

Despite the wringing of ink stained hands by journalists who grew up in the era of hot metal printing presses, the news industry has been digital for over a quarter century. In fact the two printing plants now being closed were the digital successors to the old presses on Sydney’s Broadway and Melbourne’s Spencer Street.

That Fairfax’s management is only realising newspapers are just another distribution medium illustrates how late they are to understanding the changes which have happened in the last twenty years.

Using terms like “Digital First” only indicates an obsession with distribution methods rather than the product itself.

Content above all

Fairfax’s product is the news content which is still a valuable commodity – almost everything driving the Australian news cycle comes out of the metropolitan print media.

What appears in the Sydney Morning Herald, Age, Daily Telegraph or Herald Sun drives most of the day’s radio, television and social media coverage in their cities. It shouldn’t be under estimated how powerful both publications are and it is why Gina Rinehart wants a stake in Fairfax.

That value could see paywalls work for Fairfax, but content has to be worth paying for if readers are going to reluctantly open their wallets.

A product worth paying for?

Having a product worth paying for is where the real challenge lies for Fairfax.

Right now much of the content sucks – there’s too much syndication which can be sourced elsewhere, for instance most of the technology section has article that appeared two days earlier on Techmeme or Mashable.

In domestic sections like politics and property the bulk of the “journalism” is repeating other peoples’ agendas rather than reporting facts or driving debate. Much of what Fairfax’s Canberra correspondents report are anonymous briefings from “party figures” while the property section regurgitates the latest spin from real estate agents and property developers.

Over in travel and food, those sections now largely consist of barely rehashed media releases and it’s no accident readers are fleeing those sections to more relevant, and honest, food and travel blogs.

All of these sections have to be revamped if Fairfax is to survive. This will need new editors and probably wholesale staff changes.

A relevant future

The future for Fairfax is being relevant to the communities it serves. Already newspapers are irrelevant and increasingly 1970s style journalism is being ignored.

Late last week the Prime Minister met with a group a bloggers in an attempt to soften her image with key women’s groups.

Despite the sneering of the Fairfax Canberra correspondents, that meeting at Kirribilli House illustrates how media is changing – to politicians, readers and advertisers the old newspapers and their journalists are no longer relevant.

Hopefully Fairfax’s board can ensure the company stays relevant and survives – the Australian media sector is dominated by too few voices as it is and losing one of the biggest players would be a disaster.

Can Warren Buffett save local news?

Maybe an old billionaire could save the local newspaper industry

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.

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”.

Grappling with the online news beast

Old media organisations are struggling with the web. Is the news industry dead or evolving?

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.

Consumer surplus?

Inventing euphemisms for your dead business model

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.

So you call that journalism?

Is it time we drew a line between journalism and entertainment?

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.

Reinventing activism

The ghosts of Graham Greene and Vietnam resonate in the Stop Kony campaign

In the late 1960’s the Biafran War appeared on the front pages of the world’s media partly due to a well co-ordinated advertising campaign using the relatively new broadcast marketing techniques.

During the mid 1980s the Ethopian famine was bought to prominence by Live Aid and Bob Geldof using music videos and live television made possible by huge leaps in broadcasting technology.

Nearly thirty years later we see an African tragedy – this time the Lord’s Resistance Army in Central Africa – again bought to the West’s attention through new media and advances in video technology.

Each time there’s been an outpouring of outrage and determination by those of us in the West to ‘fix’ Africa’s problems. We demand our leaders do something so we march, we donate and these days we retweet or like an online video.

In many ways  we’re like Alden Pyle, the idealistic and well meaning anti-hero of Graham Greene’s The Quiet American who believed a ‘third force’ can fix the problems of Vietnam in the 1950s.

At the time Graham Green wrote The Quiet American in the late 1950s, the Eisenhower Administration had several hundred US military advisers in Vietnam, sent by President Truman at the beginning of the decade.

Today, at the time of the Stop Kony campaign in 2012, the Obama Administration has ‘about’ a hundred advisors in Central Africa.

Sometimes we don’t reinvent anything; we just use modern tools to repeat our grandparents’ mistakes.

The death of sport

Sports groups have always felt threatened by new technology.

In the 1960s, sports administrators refused TV replays of games because it would affect their revenue.

Sports broadcasting rights were invented.

In the 1970s, sports administrators resisted live TV coverage of games because it would affect their revenue.

Sports broadcasting rights became lucrative.

In the 1980s, sports administrators claimed TV viewers using video recorders would affect their revenue.

Sports broadcasting rights became more lucrative.

In the 1990s, sports administrators worried cable and satellite TV would affect their revenue.

Sports broadcasting rights soared.

In the 2000s, sports administrators warned the Internet would affect their revenue.

Sports broadcasting rights soared further.

In 2012, sports administrators shout that cloud computing services will affect their revenue…….

Photo courtesy of mzacha on SXC.hu

Exposure exposed

Giving away freebies in return for exposure rarely works

A few years back a client of mine was delighted to receive a phone call from a television producer offering exposure for his business on a national TV program.

The offer was Jeff, who is a builder, would donate his company’s work to a television home improvement show and in return Jeff’s business would get a mention in the credits as well as some coverage in the program.

Jeff agreed, had new t-shirts for his labourers printed and they did three days work helping celebrity gardeners refurbish a backyard.

The guys had a ball, the labourers chatted up the presenter and the pretty production assistants and for a day or so Jeff felt like he was in Hollywood.

A few weeks later the show went to air – there were a couple of glimpses of Jeff’s guys doing stuff and if you were quick with the freeze button you could pick out part of Jeff’s business name and phone number.

When the show finished, Jeff’s business appeared for a split second which was difficult to read if you were lightning fast with the remote control. Not a great return for several thousand dollars of labour and materials.

That was an expensive lesson for Jeff.

Recently I heard of a business that was asked to contribute some of products to a newspaper – they wanted an ongoing commitment that would cost the business quite a bit of money.

For the newspaper this is a great deal – they tie in a promotion for their readers that costs them nothing. The business is left out of pocket with little upside except for some “exposure” of dubious value.

We see this repeated every day by dozens of businesses being seduced into offering fat discounts for group buying sites. The salesman’s spiel is that a prominent offer will get exposure on their email that goes out to thousands of people.

Most of these promises are nonsense; giving away your time or work for free is the most expensive thing a business can do and if it’s going to work it has to be part of a strategic plan.

It’s been said all publicity is good publicity, but that’s not really true if there’s no return on a substantial effort.

Blindly giving things away in the hope of getting some free publicity isn’t a good business practice and those who urge you to do so aren’t acting your best interests as Jeff learned.

Why the Microsoft Faithful are wrong about Windows Phone

Is it too late for Microsoft beat Apple and Google in mobile phones?

Late last year an event organiser recounted how she’d been told to only approaching Microsoft for event sponsorship if the occasion was related to mobile telephony as “all of our marketing budgets are focused on Windows Phone.”

So it wasn’t a surprise to read at the beginning of this year that Microsoft were allocating $200 million for marketing Windows Phone in the US alone.*

The Consumer Electronics Show is the high temple of tech journalism with thousands flying in from around the world to breathlessly report on the latest wide screen gizmo or mobile device

At the 2010 show, 3D television was going to be the big consumer item while at the 2011 event it was going to be Android based tablets that were going to crush the Apple iPad.

Despite the millions of words written and spoken about these products, both flopped. So it was no surprise we were going to see plenty of coverage of Microsoft given the budgets available and it being the last time Microsoft’s CEO, Steve Ballmer, would give the CES keynote.

Microsoft’s CES publicity blitz kicked off with a rather strange profile of Microsoft’s CEO in BusinessWeek which if anything illustrated the isolation and other worldliness of the company’s senior management.

The PR blitz worked though with Microsoft tying for first place in online mentions during the show according to the analytics company Simply Measured.

After the show the PR love for Microsoft continues with Business Insider having a gorgeous piece about why Windows Phone will succeed and criticising tech blogger Robert Scoble’s view that the mobile market is all about the number of apps available.

Scoble replied on his Google+ page explaining why apps do matter and adding that most of the people he meets hate Windows Phones, the latter point not being the most compelling argument.

The most telling point of Scoble’s though is his quoting Skype’s CEO that they aren’t developing an app for Windows Phone as “the other platforms are more important, so he put his developers on those”.

Microsoft spent 8.5 billion dollars buying Skype and intends to lay out over $200 million promoting Windows Phone. Surely there’s a few bucks somewhere in those numbers to pay for a few developers to get Skype functionality on the new platform.

Since writing this, Robert Scoble has issued a correction from the Skype CEO stating a version is being built for the next version of Windows Phone

The fact Microsoft can’t organise this seems to indicate not all senior executives share the vision for Windows Phone. It’s difficult to image Google or Apple having this sort of public dissent on a key product.

Management issues aside, Microsoft’s real problem are they are late to the mobile party and don’t have anything to gain attention.

There’s nothing wrong about being late to the party – Apple were late to enter the MP3 player, smart phone and tablet markets – but in each case they bought something new that changed the sector and eventually gave them leadership of each sector.

With Windows Phone, there’s so far little evidence Microsoft are going to deliver anything radically new to the sector. With Apple’s iOS and Android dominating, it’s going to be a tough slog for Microsoft and they are going to have to have to carefully spend every cent of that big marketing budget.

At least Microsoft’s PR team is doing a great job, the challenge is for the rest of the organisation to sell it as well.

*As an aside, it’s interesting the author of that article about Microsoft’s marketing budgets boasts how he “been sitting on this information for weeks so that Microsoft can make its big announcement at CES this coming week”. It’s good to know where Paul Thurrott thinks his responsibilities lie – certainly not with his readers.

What’s a Twitterer worth?

How business can put a value on social media

$2.50 per month is what Phone Dog think a Twitter follower is worth in their lawsuit against a former employee.

As nebulous and ambiguous as Phone Dog’s claim seems to be it appears some price is being created on the business value of social media users.

To date we’ve seen services like Empire Avenue, Klout and Kred try to measure social media users’ real influence on the different web platforms which in turn allows businesses to allocate some sort of value.

As social media and the web mature, we’ll see businesses spend more time understand where the value lies online.

Each platform is going to have a different value to a business. Depending on the market, one person may be worth more on Twitter than on Facebook and similarly a business may put more value on members of a specific LinkedIn group or industry forum.

What we shouldn’t confuse “value” with is how the services themselves make money. For Facebook, the value comes from the marketing opportunities presented by people sharing their lives while for LinkedIn it’s largely coming from employment related advertising and search.

Other social media platforms are finding other ways to make money and each will have a different attraction to users, businesses and advertisers. All of which will affect their perceived value.

That perceived value is the most important part of social media. If users don’t think a site adds something to their lives, then that service has no value to anyone.

It’s tempting to think that people will object to having a “value” placed on their heads as users, but most folk understand the commercial TV and radio that does pretty much the same thing.

The real question of how much people are prepared to share online will come when they understand the value of the data they are giving the social media platforms. When users start to understand this, they may ask for more service from these companies.

What a Twitter user is worth right now is probably different to what they will be worth this time next year, but there’s no doubt we’ll all have a better idea.