Home Again

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Ebb Tide, Greenwich, Connecticut  (click to enlarge)  – © Vin Crosbie

What makes September and October major months for travel? Projects conceived during summer vacations are launched then. My travels for clients always spikes during those months. Nevertheless, I’m now home for most of the remainder of the year!

My thanks to Aer Lingus, American Airlines; British Airways; the staffs of the Fitzwilliam Hotel in Dublin; Kempinski Hotel Airport Munich; MAN Roland in Westmont, Illinois; Ritz Carlton Seoul; the Korean Broadcasting System’s wonderful online language lessons; and a few other people who can’t be mentioned due to non-disclosure agreements.

Unless clients warrant, my only travel plans during the remainder of 2005 will be to attemd the Online News Association‘s annual conference October 28-29 in New York City and to speak about the topic of Signing the copyright transfer form… What has changed since the introduction of Open Access journals? at the Society for Scholarly Publishing‘s Current Topics in Copyright seminar on November 8th at the American Geophysical Union’s headquarters in Washington, D.C.

During the past two months, I’ve collected a 5 centimeter-thick stack of periodical clippings and an even thicker online queue of stories about online publishing and broadcasting, digital editions, paid/premium content endeavors, periodical publishing to mobile device, and other topics. I’ve now time to write about those topics, and to shift Corante’s Rebuilding Media group weblog into a higher gear. I’ll also be making changes in this Digital Deliverance blog (such as restoring the Comments function).

An immediate one will involve how I blog. For years, I’ve been blogging in the form of mainly short (200 to 500 word) essays. I’ve used the essay format because I’d rather provide analysis and context than simple report events; there are plenty of other sites that report. However, the more client work and travel I do, the less time I have for pro bono blogging. Plus, the more behind my draft essays become; I’ve currently got nearly two dozen in various states of draft (likewise, many trade journal article drafts). That’s why I’m going to switch to using the quick-mention blog format — pointing to events as they occur, so not to get behind, then later writing any analysis as warranted and time permits.

Here’s a few things I was noting last week:

    Announcing their Third Quarter 2005 financial results, many American media companies noted surges in online advertising revenues. For example, Tribune Company noted, “Interactive revenues, which are included in the [Publishing] category above, were up 46 percent to $47 million mainly due to strength in help wanted revenues.” Two things piqued my interest about such announcements:

    First, how interesting that the most vulnerable source of newspaper revenues is surging! I think classified advertising revenues are surging online because all forms of classified advertising migrating online. Newspaper classified ads are migrating from print to online, to newspapers’ own website and to newspaper competitors such as CraigsList.

    How much of the surge in newspaper websites’ classified advertising revenues is cannibalization from those newspapers’ own print editions? If you look just at the figures in the Third Quarter 2005 financial results, you might think there’s no cannibalization. For instance, the Tribune Company announcement says that print classified revenues were up 7 percent.

    However, Revenue annoouncement don’t always provide true pictures. Tthat glimpse doesn’t factor in print classified advertising rate increases. Newspapers have been shoring up print classified revenues by raising rates year after year. And if online classified are being sold as ‘sell throughs’ by newspapers’ print classified sales staffs, then those rate increases also boost online classified revenues. I’d be curious to see a comparison of newspapers’ classified lineage (or wordage) between print and online editions, which would truly tell if print-to-online cannibalization of classified within newspapers is underway.

    The other reason I found newspapers’ Third Quarter 2005 financial results interesting is that almost all no longer report their online subsidiaries’ revenues as separate items. They instead add their online subsidiaries’ revenues to their print operations’ numbers.

    That started a few years ago. Rumor said that the reason why media companies stopped separate reporting their online subsidiaries’ financial results were the Enron and WorldCom accounting scandals. Enron and WorldCom each had a variety of subsidiaries that were losing money, but their parent corporations hid those loses by attributing some of other subsidiaries’ revenues to the money-losing subsidiaries. So, if subsidiary ‘Y’ was losing money, they’d attribute a percentage of subsidiary ‘X’s revenues to it, thereby adding those revenues to subsidiary ‘Y’s revenues.

    That accounting scam is illegal for U.S. public companies. But it sounds suspiciously like the accounting that had been used by American media companies who helped their online subsidiaries revenue figures by attributing a percentage of their print editions’ classified ad revenues to it, the ‘upsell’ technique. Indeed, most of the classified advertising that appears in newspapers’ online editions was sold by their print editions’ sales staffs, who mainly sold that advertising for the print editions but attributed a percentage of the revenues for online edition use.

    This type of accounting might have made separate statements of the online subsidiaries’ purported revenues perhaps worthy of further scrutiny by the U.S. Securities & Exchange commission. So, publishers supposedly ordered their accounting departments to stop separately reporting the online subsidiaries’ revenues and to add those revenues to the print subsidiaries.

    When I first heard those rumors a few years ago, I thought about investigating and writing a story about it, but getting anyone to comment about it proved too difficult.

    Maybe melding the online revenues & expenses into the print operations’ figures makes sense. After all, unlike broadcast subsidiaries, online subsidiaries are dependent upon the print subsidiaries for content. Their online operations aren’t really free-standing at all.

    Speaking of classified advertising, a report by the University of Missouri’s graduate school of journalism indicates that newspapers, particularly smaller and medium-sized ones, aren’t ably using the potential of online classified ad technologies.

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    Siemens demonstrated its electronic-paper prototypes at the Plastics Electronics trade fair in Frankfurt. The Guardian has a story about it and PhysOrg.com offers more details. Phillips demonstrated similar prototypes two years ago. Seimans says the technology should be in consumers’ hands by 2007. My Rebuilding Media compatriot Bob Cauthorn is optomistic but Edward Vielmetti, who’s also tracks e-paper technologies, is pessimistic about that date.

    E-paper technology is already being used in the signage industry, but I know it won’t be in consumers hands during 2006. However, its first consumer usage will be in 2007, but not as a replacement for paper. What’s driving the development of e-paper isn’t newspapers or magazines but the constraints of contemporary battery technologies. E-paper is still monochromatic, but it happens to use one-fiftieth to one-hundredth the battery power of LCD displays.

    So, the first consumer usages of e-paper will be as replacement for black & white LCD displays in some simple, battery-operated handheld devices (such cordless home phones) and other appliances (such as alarm clocks, digital thermometers, etc.) I don’t expect to see sheets of e-paper become used for reading multi-line texts until 2008, and that will likely be for e-books.

    Until color versions of e-paper can be developed (my estimate is by 2009), I don’t expect e-paper sheets to be used for periodical reading usage until a year or two later, but magazines and newspapers (as well as business reports, love notes, and everything else) will require color displays.

    Still, that’s just 60 to 72 months away. Only as far forward as 1999 or 2000 was back. What technologies were you using then?

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