Category Archives: Business Models

Outernet

One of the most audacious New Media projects I’ve been involved with as a viability consultant is Outernet, my friend Syed Karim‘s project to bring free Internet access to more than four billion people. He plans to do this by piggybacking a fleet of mini-satellites onto commercial satellite launches. These mini-satellites, known as cubesats (each a 10 cm cube weighing no more than 1.33 kg), will provide Internet access (albeit mainly text access) to the majority of the world’s people, who don’t live in regions where Internet access is affordable or even receivable, which is a surprisingly large portion of the planet’s inhabited landmasses. Hundreds of cubesats have been launched for other non-profit purposes during the past 11 even years. Karim and his Outernet team have already raised the US$10 million necessary to build and launched their network of cubesats. CNN recently featured a story about him. Prior to his heading the Outernet project, I’ve known him as Director of Innovation at the Media Investment Loan Fund, a position he still holds. I’ve been an adviser to MDIF for the past seven years.

 Spain recently passed a law that would require online news abstractors and aggregaters, such as Google News, to pay royalties to Spain’s periodical publishers. It’s a bone-headed law, but not surprising that at least one developed country would pass such a law, pressured by the publishers’ lobbying. Those publishers haven’t adjusted to individuation of their contents – the fact that each person online wants to be able to search (or otherwise find or be delivered) only for the stories that match that person’s own unique mix of needs, interests, and tastes, and to be able to receive such stories from all vendors and publications without having to purchase all those publications. The news law is a desperation move at the behest of those publishers. Google announced that Google News will shutdown in Spain on Tuesday. Similar machinations have been underway in Germany. Subsequent stories about the Spanish law – as well as my own talks with Spanish friends (disclosure: my wife is a Spaniard) – indicate that the new law is immediately unpopular among Spain’s online consumers. Rumors have begun that AEDE (the Spanish daily newspaper publishers association) may be having second thoughts about the law. However, I should note that Google’s policies about recording its users actions have often, and probably still do, violate the European Union’s 1995 Consumer Data Privacy regulations, something that few American commentators deign to mention. I only regret that this particular case occurred three weeks too late for me to feature it in the the week’s class on Internet Law that I teach in my postgraduate New Media Business course at Syracuse University’s S.I. Newhouse School of Public Communications. It’ll be part of the syllabus there next year.

Forget what’s being called Wearable Computing technologies.  The BBC this week reports from Sweden about Implantable Computing technologies.

 

 

 

 

Proximate Remarks & Ultimate Causations

Previous webpage: The Greatest Change in the History of Media

Let’s be frank about the media industries. Most of its executives don’t care a hoot about exactly what is causing the tumultuous changes in their business environment. What they want, almost regardless of the problems, are solutions that can propel their careers and businesses into profits. They’re like recreational surfers: they just want someone to tell them where the good waves are rather than them spending time learning ocean hydrodynamics. Indeed, if the majority of media executives care at all about what’s causing the gargantuan changes in their business environment, they’ll look at the proximate, not the ultimate, causes of those changes.

Yet champion surfers know to look beyond the proximate and understand the ultimate causes of waves. Although they know that finding great waves is the most practical and proximate of their needs, they can reliably find those waves only if they understand the ultimate causation. I’ll thus detail some webpages from here the proximate and practical causes of the gargantuan change underway in the media environment, but first let’s examine what ultimately are causing all of it to happen.

When differentiating between the proximate and ultimate, I ask my graduate students what caused the destruction during the 2004 Indian Ocean tsunami or the 2010 Japanese tsunami. Most answer a great wave of water. That indeed is the proximate causation of the destruction. However, the ultimate causation was the undersea earthquake that causes the great wave.

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At various times in human history, scientific or technological breakthroughs have caused seismic changes in civilizations and humans’ lives. Discovery of how to make fire was the first. Discovery of agriculture was the second. A third discovery, metallurgy, immeasurably increased the power of humanity’s tools and weapons. The invention of writing allowed knowledge to be recorded beyond what could be passed down through oral history. The invention of the telescope 400 years ago led to knowledge that humanity isn’t the center of the universe, a discovery which had huge repercussions on religion, philosophy, and polity. In 1776, mechanical engineer James Watt’s invention of the motor fomented the Industrial Revolution, transforming civilization in ways still occurring. Most people today know that an invention several decades ago is now reshaping people’s lives, livelihoods, societies, politics, knowledge, and all else that preceded it. During the late 1950s, electrical engineers Jack Kilby and Philip Noyce invented the integrated circuit (commonly known now as the ‘semiconductor’ or ‘microchip’) upon which technology all of today’s computers and microelectronics is based.

Hardly anyone who works in media today doesn’t know that offices, homes, vehicles, phones, and myriad other devices and even appliances are being revolutionized or ‘disrupted’ by computerization. Many have notice or heard that these changes are accelerating. Some hope it will stop. Yet few truly understand that whatever they might have so far seen will pale by comparison to what are going to occur or just how quickly.

This chapter is a primer about that, aimed at people who work in the media industries. The chapter outlines the three dynamics whose combined effects are ‘disrupting’, revolutionizing, and transforming the media environment in ways that are only starting to show. It looks at each of those three ultimate causes of the changes underway and briefly examines the three causes’ combined effects.

The ultimate formulation is simple: the ever-accelerating interactions of Moore’s Law, Cooper’s Law, and Butters’ Law ultimately cause the gargantuan changes underway in the media environment. Moreover, changes in the media environment are merely side effects of those principles’ more comprehensive effects on the world.

Despite their nomenclature, Moore’s, Cooper’s, and Butters’ laws aren’t llegislations but principles based upon empirical observations about advanced technologies.  Moore’s Law concerns the advancements and expense of computer processing power; Cooper’s Law describes the advancements and capabilities of wireless communications; and Butter’s Law focuses on photonics, the communication of information through optical fiber cables.  These three principles are similar (indeed, the latter two were prompted by the first). The laws’ rippling interactions are transfiguring most of the world’s other industries, and even governments, societies, and civilization itself.

Next webpage: Moore’s Law Acting on Media

Index of the Rise of Individuated Media webpages

 © 2014

The First Innovative Thing I’ve Posted in Seven Years

agaete

My reputation as a New Media consultant to the news industry, including my appointment since 2007 to teach postgraduate New Media Business at Syracuse’s Newhouse School, largely result from work I did long ago.

For ten years beginning in 1993, I helped guide the strategies of major news organizations’ websites and their other online services. But by the turn of the century I realized that those strategies (known as ‘convergence’, ‘analog-to-digital’, and ‘digital first’, etc.) would ultimately fail and those news organizations’ websites, as well as their traditional products, would unavoidably become irrelevant and unsustainable in the near future. I then spent seven years sounding probably like the prophet of doom to the traditional media industries in post-industrial countries. The doom I predicted has since become apparent.

Since 2007, I haven’t done any innovative work—except that which is done in a room filled with some of the best postgraduate students and doctoral candidates from America, Europe, and Asia, who study the media business. They’ve an advantage over the middle-aged white executives who run most traditional media companies; they’ve grown up online, know New Media as natives, and so aren’t mired in media theories, doctrines, and practices that might have been valid in the 1960’s or 1980’s or even early 1990’s, ideas and concepts that are already obsolete.

Good teaching is a continuous experiment.  Bad teachers teach the same way every semester; like bad actors, they perform by rote. By contrast, good teachers use their classrooms not only to teach established concepts, but to teach themselves when and how established concepts have changed and are no longer relevant or true. In other words, the classroom is where good teachers refine their own understandings of what to teach. If a teacher’s own understanding of what he teaches doesn’t withstand the questionings and skepticism of hundred postgraduate students and doctoral candidates, then his understanding is merely an illusion.

I’ve been luckier than that. The academic freedom to teach what I think is true, no matter how unwanted those truths may be among hidebound executives or how heretical the truths are to traditional media academics, has been a godsend to my thinking. The easiest environment in which to shuck the encrusted dogma of 20th Century media thinking is to be surrounded at any time by dozens of smart young scholars who owe nothing to such dogma except that after their graduations they as media executives will inter it once and for all.

Ten years ago, after realizing that traditional media industries’ strategies of ‘convergence’, ‘analog-to-digital’, and ‘digital first’ will ineluctably fail and will never generate enough revenues to compensate for the revenue declines from the evaporation of those industries’ traditional products (printed periodicals, over-the-air and cable broadcasts, etc.), I turned my attention and that of my students to solving the problem of why. Why won’t ‘convergence’, ‘analog-to-digital’, and ‘digital first’ ever generate enough revenues to compensate for the revenue declines from the evaporation of media industries’ traditional products? Why are indeed those industries’ traditional products evaporating? The solution necessarily involves both questions.

My purpose in asking isn’t to save those industries’ traditional products or websites, but to establish what those industries should have done instead and what the successful new media of the 21st Century will do or are doing now. It’s now too late for most of those industries in the post-industrial countries, but there may still be time for media companies in developing or industrial countries to learn and adapt.

This then is a hyperlink to the first innovative work I’ve posted in nearly a decade, the result of my work with students at Syracuse’s Newhouse School, at South Africa’s Sol Plaatje Institute for Media Leadership, and at several other institutes where I’ve taught or co-taught seminars. It encompasses my thinking about media for the 21st Century.

It starts by examining the misguided beliefs by most media executives and most media academicians today that the greatest change underway in the media environment is simply that consumers have changed their consumption habits from ‘analog’ to ‘digital’ or have mere become ‘wired’ or ‘hooked up’ to electronic devices; that websites or streaming media are electronic multimedia (‘converged’) versions of printed periodicals or broadcasts; and that the future of Mass Media domination will be in online and mobile platforms.

It then describes what is obvious about the changes actually underway in the media environment, which are far different than what the executives and academicians who are trained in the theories, doctrines, and practices of Industrial Era media, namely Mass Media, hope. It categorically states how and why Mass Media are artifacts of that waning era and already are no longer the predominant ways in which most the world’s people now obtain news and information and soon entertainment.  It is about Individuated Media, the new media engendered by the Informational Era, which we can see across the panorama of the media environment once we remove the blinders of Mass Media theory.

I had planned to publish this work online early in 2015, after my classes this semester end.  When seven years ago I’d conceived the core of this work and established its syllabus, I had hoped that what it states would now be obvious. It’s indeed obvious now not only to my students but to those of other media schools who I’ve queried. Nevertheless, dust and debris from the collapse of traditional Mass Media still obscures the sight of far too many media company executives and academicians who, trained in Mass Media, attempt to sustain those Industrial Era forms of media. So, even though I’m still writing the final sections of this work from drafts, I’m going to begin publishing it online now, in hope of guide some of their ways.

I call it The Rise of Individuated Media. Thirty short (three to eight typewritten pages) chapters of this work are now online (starting with a version of this posting). A further 40 are in final draft stages and will go online at a pace of one chapter every two or three days (an easy pace for me to post.) I welcome comments or corrections to this work. Because an aggregate of its many chapters is hard to read solely online, an electronic book version of the whole will in follow sometime in January.

Those chapters already online deal with:

  • Identifying what is the greatest change underway. The answer isn’t consumers switching their media consumption from ‘analog’ to ‘digital’. Or ‘multimedia’ or media industry ‘convergence’. Or ‘smartphones’, tablet computers, or even the Internet.
  • Focusing on what are the ultimate, not proximate, causes of all the changes underway. Knowing what ultimately causes the changes allows a person to identify and rather accurately predict what and how fast future changes will be, an invaluable skill for anyone formulating media company strategies or designing media products and services.
  • Seeing the complete spectrum of changes underway and not being blinded by just those glaringly obvious. There is an ideal ‘prism’ through which to view the entire spectrum. And in this work I divide the spectrum of change into three ‘color’ categories, each of which has its own hues:
    • The ‘greens’ which affect how people gravitate towards and around media contents.
    • The ‘reds’ which affect how media contents are transacted (and even when no monies are exchanged).
    • The ‘blues’ which affect how the very definitions of media contents, as well as production and delivery of those contents, have changed.
  • Why and when traditional Mass Media companies failed to foresee the real changes underway. And what the few traditional media companies that do survive will need to do to adapt, which also means what ‘pure-play’ media start-up companies in the 21st Century should already be doing.

Media academies that have excelled at Mass Media have been flummoxed by the changes underway, few of which conform to their theories and doctrines. These academies have reacted in either or both of two ways. They’ve created institutes or centers of ‘innovation’ in which Mass Media practices are simply continued in whatever is the latest devices. Or else they’ve created ‘entrepreneurial’ programs that involve students learning how to operate without corporate support or to start-up their own corporations.

However, true innovation isn’t the usage of new devices or new technologies, but how theories and doctrines change due to new technologies and new devices; it is the difference between carpentry and architecture. Moreover, planting entrepreneurial seeds in hopes that some might bloom is hardly a sound practice of agriculture.  As the innovative genius Nikolai Tesla said about his fellow inventor Thomas Edison, “I was almost a sorry witness of such doings, knowing that a little theory and calculation would have saved him ninety per cent of his labor.” I herein offer a bit of theory about the New Media.

New Media Business Course Syllabi

For the past four years, I’ve been teaching a New Media Business for media course at Syracuse University’s S.I. Newhouse School of Public Communications. It was originally open just to postgraduate students, but a few years ago we opened it to select upperclassmen, too.

Some 250 students have taken the course. Approximately half were from the Newhouse School’s Media Management masters degree program, in which taking the course is a requirement. However the rest of the students have been from the school’s Arts Journalism, Broadcast Journalism, Communications, Graphic Design, Magazine, Newspaper, Photography, Public Diplomacy, Public Relations, and Television/Radio/Film departments. Students and staff from the university’s Whitman School of Business, Maxwell School of Citizenship and Public Affairs, School of Information Studies, University College, and the College of Law also have taken the course. In any semester, between a quarter and a third of the students who take the course are foreign, mainly from China, India, the Middle East, or European Union.

Because New Media technologies, business models, and practices are continually changing, I have to update the course syllabus every semester. Here is the current version, minus university boilerplate:

New Media Business syllabus

ICC625-M001 (55764) & ICC300-M001 (60544)

Spring 2012

Course Goals: Learn the dynamics, economics, and technologies that are reshaping the media industries worldwide during the 21st Century. Learn how these differ from those of 20th Century media. Learn how to adapt to these changing times.

Disclosures: There aren’t sufficient hours in this single course to provide in-depth assessments of all New Media technologies which are constantly evolving.

Moreover, the syllabus you’re reading is subject to change. Each semester a different mix of students from Newhouse departments attends this course. For example, last semester’s course was taken by 18 Media Management, two Broadcast Journalism, one Public Relations, one Advertising, one Newspaper student, and a Whitman staffer. In contrast, this semester’s course currently has five Advertising, one Broadcast Journalism, and one Newspaper student enrolled. So, after the first week of classes each semester, the instructor revises this syllabus to focus on the specific needs of the students in that semester.
Dates, Hours, and Location: Twenty-nine (29) eighty-minute classes will be held between 11:00 a.m. and 12:20 p.m. on Tuesdays and Thursdays from January 17 to May 1, 2012, in the Larry Kramer War Room (#252 in Newhouse 3, geo-coordinates on request).

Agenda & Topics: The following agenda of class topics is tentative. The actual agenda may vary due to availability of speakers or additional topics added during the semester either by the instructor or the requests of students.

The first four weeks of the course surveys the current state of the world’s media; how that situation cannot be explained by classical Mass Media theory, and examines the new theories which fit that situation.

January 17 – Ritual Reading of the Syllabus. Plus, discussion of class goals and policies. Handout: Student questionnaire.

January 19 – Embracing Change. The elasticity of time. The Confederate widow and the World War One Flying Ace anachronisms. How long do you plan to live? People you’ll meet who will in the the 22nd Century. How to adapt to change, and why knowing how to embrace change and adapt to is the paramount skill for 21st Century media people to have.

January 31 and February 2 – Apocalypse. What challenges do the advertising, newspaper, magazine, radio, television, cinema, public relations, photography industries now face? How the ancient Greek word apokálypsis actually means ‘lifting of the veil’, ‘revelation’, and ‘disclosing something hidden in an era dominated by falsehood and misconception’ and not (contrary to popular belief) ‘chaos’ or ‘end of the world’.

February 2 – Creative Disruption. How an Austrian economist strove to become the greatest economist in the world, the best horseman in his nation, and the greatest lover in all of Vienna. How his work in one of those endeavors helps us understand the situation the media industries face.

February 7 – What Ultimately Are Causing the Media Change? Meet Gordon Moore, Martin Cooper, and Gerald Butters. The interactions of what they observed. Will change stop in your lifetime? The clockwork towards technological singularity.

February 9 – What Has Been the Greatest Change in Media History? Are New Media merely traditional forms of media put online or manifestations of something much larger underway? What has been the greatest change in media to occur in human history?

February 14 – Across the Spectrum of Change. How the greatest change in media history affects the practices and businesses models of journalism, entertainment, and information, and even the content of those fields. Why Social Media are manifestations of this change and the ‘tidal shift’ resulting.

February 16 – The Economics of Content and the Contents of Surplus. Why traditional media business models are failing. How supply & demand specifically affects value and attention and value. Why fewer and fewer people will pay for traditional content, and use it less frequently and less thoroughly—no matter if the content is delivered via traditional forms or online. How content must change. How, where, and when to charge for what content?

The next five weeks provide practical information about how to prosper and adapt to changes in various fields and formats of media during the 21st Century.

February 21 – Web 1.0, 2.0, 3.0, and the Internet Timeline. How you only have to remember two things about the geologic timescale of New Media. How a host of people, almost all of them in their twenties, had the courage of their ideas and have changed the world.

February 23 – How Does Digital Work? What Does Interactive Actually Mean? Do TurboTax® or the Intel Turbo Boost® really use turbochargers? Do the words digital and interactive actually have real meanings? Why knowing these meanings can lead media to success.

February 28 –Alphabet Soup: HTTP, CSS, SEO, SEM, XML, and ROI. How the Worldwide Web works. How to measure and improve your use of the Web and other interactive technologies. And why the refrigerator you buy five years after your graduation will know some good recipe for what it contains.

March 1 – What are Individuated Media? Should You Be Permissive or Intrusive? Will Mass Media continue to be the primary way people obtain news, entertainment, and information or will something else replace it?

March 6 & 8 – The Practices and Effectiveness of Online Advertising. Why something with such relatively small response rates is becoming the world’s primary form of advertising. Practices and problems.

March 14 & 16 – Spring Break Week.

 March 20 – How New Media Differs Legally from Traditional Media. Technology outrunning the law and governments. COPA, CAN-SPAM, Safe Harbors, Personal Jurisdiction, SOPA, and Net Neutrality

March 22 – The Blogosphere. Does anyone actually earn money blogging? Should you or your company blog? What if everyone else is doing it? The revenge of ‘the people formerly known as the audience.’

March 27 – Going Mobile. Will mobile really change the media industries? What are the ‘G’s, Geolocation, Augmented Reality, and Goggling?

March 29 – Tweets, Check-Ins, Virtual Realities, and Loquacious Devices. The incipient deaths of keyboarding and handwriting. Meet the new intermediaries: Dragons, Siris, and HALs.

The final month of course examines the futures of various industries and provides practical information about how to prosper and adapt to changes in various fields and formats of media during the 21st Century.

April 3 – The Revenge of Paper. How tablet devices are just one of many primordial steps to something that replaces paper. A dress of OLED. Everything becomes a display. What will the book in the future do?

April 5 – The Revenge of Radio. How a medium once thought to be dying has become one of the most popular mobile app. Have you seen the radio station’s video? Individuation in radio. How Pandora teach Individuation, not Mass Media.

April 10 – The Future of Television. Brought to you by Ethernet television and a host of pretenders. The coming implosion of the U.S. television affiliate model. Can your local station survive? No borders except language and culture. Rights, Royalties, and Revanchism.

April 12 – The Future of Cinema. Digital projection to the home big screen versus the bigger screen with strangers at the mall? Had 3D gone flat? A holographic shell game: which of the ‘Peas’ is really there?

April 17 – A Tale of Two Parochial Countries. Who are the largest groups of nationals online? Why you should go abroad virtually before seeing all of the 50 United States. How a country that once led the world in interactive is now ranked in the teens. What you can learn from other nation’s New Media.

April 19 –Business Formation, Partners, and Practices. A primer about how to form a business legally and to deal with partners, investors, co-workers, or employees. How new technologies affect ownership.

April 24 & 26 – A Week of Best Practices from Worldwide. Who said, “Good artists copy, great artists steal”?

May 1 – Course Summary & Evaluations.

Textbooks: There are no required textbooks for this course. No printed textbook is able to keep current with the changes radical underway in the media industry. Besides, this is a New Media course, so the instructor will assign online readings. The instructor can recommend specific books about New Media which students in those specific majors should read.

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Personalize Media 2011 Keynote Speech

[34-minute PowerPoint video of keynote speech opening the fifth annual Personalize MEdia Conference (formerly Individuated Media conferences), Boulder, Colorado. June 20, 2011. How traditional media companies have gone astray by misperceiving consumers’ switch from analog to digital formats to be the greatest trend underway; why the abundance of content instead makes personalization (i.e., individuation) the greatest trend of 21st Century media; and what the media industries need do about it.  All images public domain. If otherwise, please contact vin@digitaldeliverance.com.]

••• ••• ••• •••

Welcome. My name is Crosbie.  Vin, as in Vincent, Crosbie. Welcome to Boulder! And Welcome to Personalize Media 2011! Welcome to the Chautauqua Center.

I’m glad the conference organizers decided to hold this meeting here at Chautuaqua. It’s is a wonderfully symbolic location for this conference. Behind the projection screen, on the wall of this hall, is a photo showing the first Chautauqua meetings ever held here. The year was in 1898. Everyone here was living in tents. Canvas tents. Back then, it wasn’t the high-tech Boulder you see outside the windows today, but a pioneering group, meeting to discuss what would become.

We’re figuratively those pioneers today. Thanks for asking me to keynote the conference. I’m going to start this conference with a very bold statement. A bold statement I’ll then justify. Personalization (individuation) is the major media trend of the 21st Century.

Some executives think these are dark times for media. Well, in case there are any historians in the audience: that’s like saying the Enlightenment was a dark time for the Feudal system.

If your business today dates from the Industrial Era – in other words, if your business is Mass Media—media based upon the practices that arose from the technological limitations of the analog press or analog transmitter—media in which all readers receives the same edition at once or all listeners or viewers see the same broadcast at once – then these are dark times indeed. The era of Mass Media’s feudal primacy is over. Something new and enlightened has replaced it.

Most media executives, schooled in Mass Media, don’t really understand what has happened

I’ll start explaining what’s happened by telling you about my own industry: the daily newspaper industry. The daily newspaper industry is among the oldest and most hallowed of media industries.

I’m here to tell you how lack of personalization, the lack of individuation, is destroying that industry in every one of the world’s post-industrial countries. In every country where people’s access and choice of media is no longer relatively scarce, but abundant.

Here in the U.S., the daily newspaper industry earned revenues of nearly $49 billion in Year 2000…. Ten years later, last year, that same industry earned only $25.2 billion. The U.S. daily newspaper industry has lost almost 50 percent of its revenues during the past ten years.

Some newspaper executives like to blame the 2007 recession for the loss. However, the facts are that less than half of that loss occurred during the recession. Most of that loss happened during the non-recession years, the years before and after the recession. An industry over 200 years old in this country has lost approximately half of its revenues during the past ten years.  Why?

I’ll tell you why: The reason is that newspapers and other media industries got caught in a conceptual trap—a conceptual trap into which most media executives fell as they tried to understand the greatest change in media history.

Most major languages have an adage about the conceptual trap into which most media executives have fallen: L’arbre qui cache la forêt. Los árboles no dejan ver el bosque. Er sieht den Wald vor lauter Bäumen nicht. ИЗ-ЗА ДЕРЕВЬЕВ ЛЕСА НЕ ВИДНО. Μπορεί να δει το δέντρο και όχι το δάσος. 见树不见林. 木を見て森を見ず. Because I speak English, the version I use is, they don’t see the forest for the trees.

Most media executives today mistakenly believe that the greatest change underway is that people are simply switching media consumption from analog to digital formats. These executive misperceive a trait or characteristic as the change itself.

They see the trees, but not the larger perspective. And their myopia has led of them to formulate the wrong strategies for adapting to the gargantuan changes underway in media.

Because most media executives misperceive the change underway to be that consumers are simply switching from analog to digital, these executives believe that what their companies must do to adapt is simply do in digital what they’ve always done in analog.

The executives believe that all their companies need to to is use the same business models, the same production practices, the same packaging, the same products, and the same content in digital as they’ve always used in analog — albeit with the addition of some hyperlinks, audio, video, and animation, and publicized via Social Media.

That’s the root of their not seeing the forest for the trees problem. (It’s about as apt a strategy as putting the Olsen Twins in the deep woods.)

Unfortunately, any strategy based upon a misperception will not only fail to yield successful results but will fail to explain why successful results aren’t yielded.

So, it’s not surprising that these media executives are mystified why the digital versions of their traditional newspaper and magazine editions and traditional broadcast programs aren’t earning anywhere near as much revenue online than those traditional products did in print—even in the cases when the digital products have more monthly users.

Moreover, these executives can’t explain why the average user of the digital version uses it much less frequently and less thoroughly than the average user of the analog version does.

Such are the captains of most media companies today: mis-navigating their companies through stormy times; captains of business who, misperceiving the great change in the media environment to be that consumers are simply switching consumption from analog to digital, hold true to the wrong course. They are myopic navigators leading media industries into financial ruin, layoffs, and catastrophe.

While they’re fishing for answers, wondering why their business as usual doesn’t work in digital – or New Media at all – we’re here. We know the answers. That’s why we are attending the fifth annual international Personalize MEdia Conference because we understand what’s really happening. We can see the forest for the trees.

We understand the greatest change in the history of media. We know that it’s not merely a change from analog to digital. We know that the greatest change is really that within only a generation people’s access and choice of news, entertainment, and information has changed from relative scarcity to surplus, even to surfeit or overload.

Look at how things were 40, 30, 20, or even ten years ago in post-industrial countries. News, entertainment, and information used to be relatively scarce. For examples, billions of people worldwide who wanted access to daily changing information had perhaps just one or two or three locally-distributed printed newspapers, plus one, two, or three television channels and a dozen or two radio stations within antenna range.

But all that has changed. Today, we’ve certainly a surplus of news, entertainment, and information. In fact, the main problem nowadays is overload. We’ve got a vast buffet or cornucopia. The problem is picking the exact items we want. And that’s the beauty of it. The exact items we want.

Yes, it’s true that people are switching consumption from analog to digital formats. But that’s not for format’s sake. They’re switching because digital technologies provide them with more choices and access to the news, entertainment, and information that specifically fits their individual mix of needs & interests. It isn’t the format they’re after, but its greater access and enormous choice of specific content.

The fact is that each of us is different. Each of us is an individual. Sure, we might share a few common interests: the weather, for instance. But that’s about it for common general-interests. Each of us, each of you, have dozens, hundreds, of specific interests. Each of us is a unique mix of those interests. And each of us gravitates to whatever content satisfies our own unique mix of individual interests.

Let me put it this way to you: Imagine that during most of your life you had no choice of what you ate. It varied daily, but it was exactly the same meal that everyone else in town ate that day.  What would you do if that situation changed and you instead had your choice of specific items from a gargantuan buffet? Would you continue to eat the communal, general-interest meal each day? No! You’d use the gargantuan buffet and satisfy your individual interests.

Indeed, that’s exactly why billions of people now use search engines daily. Nowadays, billions of people are manually personalizing, customizing, or individuating. They are finding the stories, videos, or other items of content that specifically match their own individual interests. They’re hunting and gathering all that themselves.

As Peter Horrocks, director of World Services for the British Broadcasting Corporation, recently said: “The consequence of this change in users’ consumption has only dimly been understood by the majority of journalists. Most of the major news organizations had the assumption that their news product provided the complete set of news requirements for their users. But in an internet world, users see the total information set available on the web as their ‘news universe’. I might like BBC for video news, the Telegraph or Daily Mail for sports results and The New York Times for international news…”.

People no longer consume generic packages. For example, take a look at these data from Nielsen about U.S. newspaper websites. The first assignment I give my graduate students is to tell me what remarkable about it. Students trained in traditional media, in Mass Media, tell me the answer is the huge number of people who use these websites.

However, the smart students point to the other data. For example, did you know that the average user of the The New York Times’ website visits it only 4.05 times per month; sees less than 27 webpages (which probably means less than 20 stories, because that site stretches most stories over more than one webpage); and spend an aggregate total of less than 20 minutes on the site all month. That‘s a visit only about once per week!

Unpersonalized, uncustomized, unindividuated content is used far less frequently and far less thoroughly online. People use New Media radically differently than they used traditional media.

And that radical difference is personalization, customization, individuation.

Another example, at the National Association of Broadcasters conference this April, Edison Research and Arbitron released a survey of American adults who use online radio. Fifty-three percent of those people knew of Pandora radio, which broadcasts personalized music. A quarter of all online radio listeners had used Pandora. One sixth had used it that month. One in ten people had listened to Pandora that week.

There are more than 6,000 radio stations webcasting in the United States, but one sixth of all online radio listeners listen to Pandora. I dare you to show me a traditional broadcaster or traditional print media site that one in ten of all people online use monthly. The most spectacular success in online broadcasting is personalized, customized, individuated. Pandora also is one of the most successful apps on smartphones and tablets.  And personalized, customized, individuated broadcasts such as Pandora and Last.fm are now having a radical effect on the radio industry.

This year, Clear Channel Communications, which owns more than 1,000 radio stations in the United States, more than any other company, announced that it will launched personalized, customized, individuated versions of its stations online.

Movies watched at home provide another example. Netflix is now the world’s largest distributor of videos. Is that because it has no stores? Is it because Netflix lets you rent a video for as much time as you want? No! It’s because of choice and personalization. Netflix gives each of its customer choice and access to tens of thousands of movies, enough to satisfy anybody’s unique mix of individual interests and tastes. Netflix wouldn’t be the world’s leader if it offered only the number of videos titles you could fit into a storefront.

Neither would Amazon be the leading bookseller.

In traditional media, Mass Media — in other words, Industrial Era media – every users sees exactly the same things at the same time as every other users. So, Is Facebook a Mass Medium? With more than 560 million users, it certainly has mass scale. Yet every user of Facebook sees something different than every other user of Facebook. What they see depends upon the user’s own individual mix of friends and interests. It’s not Mass Media, it is Individuated Media.

And that’s the point of my keynote today. We are right. People want Individuated media. Not Mass Media. Mass Media, and the practices and business models associated with it, were based upon scarcity, not surplus or abundance. Nothing wrong with that during its era. But that era ended at the end of the past century. What we’re clearly seeing nowadays, in the 21st Century, is the rise of Individuated Media (what we’re at this conference calling Personalized Media)

We know that the ramifications of billions of people having virtually instant access to all the world’s information are gargantuan, far greater than Gutenberg’s invention of moveable printing type or Marconi ’s and Tesla’s invention of broadcasting, and will affect not only the media industries, but every other realm of commerce, culture, politics, society, and civilization. But the fact that billions of people want a personalized, customized, individualized selection of content has gargantuan ramifications for the media industries.

First, hunting & gathering are primitive ways to acquire things–be those things food and shelter or news, entertainment, and information. There are huge business opportunities for media companies here. Facebook knows that, which is why it allows its users to automate feeds of news, entertainment, and information into users’ Facebook experiences.

The media industries need to adopt production practices and technologies that deliver to each individual the personalized, customized, individuated news, entertainment, and other information (including advertising and other product & service information) that that the person wants.

All sectors of all media industries need to work together, something unprecedented. People don’t consume just newspapers or just magazines or just broadcasts or just pure-play Internet content. They consume the mix, and won’t deal with different business models per media industry. Walls between traditional media must fall.

Nor will people consume just their own nation’s media. The world’s media industries need to globalize. There are no borders online except language.

All this will require huge changes in the practices and business models of media. Likewise, huge changes in the production and delivery technologies. Yet all of the technologies necessary exist today. These technologies and their successors are necessary for media companies to survive during the 21st Century. We are the pioneers of these discoveries.

During the next two days, we’ll examine personalized books, personalized magazines, personalized newspapers, personalized advertising, personalized greeting cards, personalized home printing, and other related subjects.

We’ll look at the technologies, the products, and the business models.

Like the early automobiles, early aircraft, and early computers, some of these might be embryonic or have gaps in their production or business models. But they are the future.

We are the future. The future of media is here with you now.

Thank You!

Chisholm States Why Charging For Newspaper Websites Is Self-Destructive

Nobody in the world knows more about newspaper operations than Jim Chisholm. That is a declarative sentence.

The former senior strategy advisor to the World Association of Newspapers (WAN) and former director of its Shaping the Future of the Newspaper project, as well as the former managing director of daily newspaper, Chisholm nowadays is a principal of iMedia, WAN-Ifra’s joint venture advisory service.

I declare his expertise and mention his credentials because no less than he has now declared daily newspapers’ attempts to begin for access to their websites. For example, The Times of London now charges online for access. Chisholm says that doing this simply “can’t work because the amount of money they will lose through lost advertising is far greater than the amount made up for with their paywall…If the Times are going to charge and the Guardian and Telegraph aren’t, readers are just going to move somewhere else because they [UK online consumers] are reading on average four newspapers a day online.”

So don’t take it from me, a graduate school professor of news industry New Media and newspaper consultant, that newspapers’ charging for online access is self-destructive. Accept the words of  Chisholm.

Advocates of newspapers charging for online access, people such as Rupert and James Murdoch, Steven Brill and L. Gordon Crovitz, or Walter Hussman, use superficial or specious logic to back their aim.

For instance, they say that because newspaper content is expensive to produce it shouldn’t be given away for free. Or that people have paid for that content in print, so that they should be willing to pay for it online. Or that people who’ve grown used to free access to newspaper websites simply must be ‘educated’ to pay. Or that the why fewer and fewer people are paying for printed newspaper is because those people can instead  get access to those newspapers’ content for free.

That’s unfortunate for them because Chisholm (and I also), people who say it won’t work, base our knowledge on not upon specious or superficial logic or wishes, but upon the newspaper industry’s own data and case studies from newspaper’s attempts to charge for online access during the past 19 years since the Internet opened to public use.

For example, download and look at the data in Chisholm’s PowerPoint slides from his speech Monday at the UK Society of Editors Conference. His slides prove why newspapers that charge for online access to their websites’ are shooting themselves in their guts.  Read Chisholm’s 12 slides (two of which are simply title slides). The folly of charging isn’t hard to understand.

Moreover, Chisholm addresses the real problem which newspaper people who advocate charging intentionally ignore:

“There’s no statistical evidence that the internet has damaged circulation any more than a whole range of other factors. I’ve not been able to find any evidence of this anywhere, and I’ve studied this in a dozen different [international] markets.”

Publishing a newspaper’s content online for free isn’t really why newspaper printed circulation is declining. Likewise, publishing a newspaper’s content online — whether for free access or paid access — won’t stop those declines.

The Epochal Change That The Rise of Social Media Demarcates

Whenever anyone from the traditional media industries writes, blogs, or tweets about Social Media, they miss the point. I find this so exasperating that I want to stab them with the point. Here is my thrust:

When newspaper, magazine, radio, and television folks write or speak about Social Media, they consider Social Media as sideshows or separate from traditional media. They liken Social Media to bulletin boards, chat rooms, or online forums purely for social interactions (hence the name they’ve given it). This misconception is prevalent even in academia. The media school where I teach has created a new position, professor of Social Media, as if Social Media are separate from traditional media.

What they all don’t understand is that Social Media are not separate from Traditional Media. Social Media are the successors to Traditional Media.

The difference between Traditional and Social Media is that the tide has turned. People will no longer go to media sites to find what interests them; they now want what interests them to be delivered to their site. A person’s Social Media page is the edition he will read, the channel he will watch. He will no longer consume traditional media editions or traditional media channels.

For centuries, if a person wanted news, information, or entertainment, the person had to go to the sites of traditional media and hunt & gather there for what might interest him.

  • Beginning in the 1600s, if he wanted news, he had to go read a newspaper posted on or near the public notices board of his town square or buy a copy of that newspaper or, at best, go pay to have that entire newspaper delivered to him. Only a handful of the many stories published in that newspaper edition might truly interest him, but he would nevertheless have to go through the entire edition just to find the few stories which might truly interest him. And starting in the 1700s, he could add magazines to that chore.
  • Starting in the early 20th century, he could receive radio and later television, both of which were automatically delivered to him if he had receivers. Nevertheless, he would wait during the entire programming schedule for the few programs that might truly interest him.
  • And beginning in 1991 (actually 1996 with traditional media), he could go to the web sites of those newspapers, magazines, and radio and television stations or networks, where among all the packages of printed stories and broadcast program schedules he might find the few stories or programs that truly interested him.

Thus for centuries people had to go to and through traditional media’s editions and program schedules, and hunt and gather among all the stories and programs for the specific stories and programs matched the person’s individual’s interests. That era is ending.

The rise of Social Media demarcates an epochal reversal in the flow between people and news, entertainment, and information.

The people now want whatever news, entertainment, and information individually interests them to come to their own personal site (i.e., their microsite on Facebook, MySpace, Tencent, Twitter, Qzone, etc.) Less and less will people visit traditional media sites where they must hunt and gather for the stories or programs that interest them. They instead want those individually categorized things delivered automatically to them into their Social Media pages or future equivalents (their Daily Me‘s?)

Rather than hunt and gather, people want to cultivate. They no longer want to go and find at media sites. They now expect the media to come deliver at their sites. It’s an historic change in how they acquire news, information, and entertainment. Indeed, an epochal tidal change: No longer will the people flow to media sites, they now want individually relevant parts of those media sites to flow to them.

This change is one of many ramifications from people’s access and supply of news, entertainment, and information changing from relative scarcity to surplus.

When the supply of something changes from scarcity to surplus, the buyers gain more power than the sellers.  For centuries (no, millennia!), people had scarce access to news, entertainment, and information, so publishers and later broadcasters had the power to compel the people to visit media companies’ sites. Rather than supply each person individually, according to that individual unique interests, publishers and broadcasters were able to insist that the people be a mass and consume aggregated packages, even if not everything in an aggregated edition or channel or program schedule would satisfy each person.

Yet now that people have surplus supply and access to news, entertainment, and information, the people have the power and no longer have to consume aggregated editions, channels, or program schedules. They no longer have to consume as a mass. Each person can compel publishers and broadcasters to deliver only the stories and programs that interest them, regardless of what else might have been in the traditional editions, channels, program schedules, or web sites.

Media sites will still exist, though primarily as repositories of content, and some people will still visit those sites. Yet the vast majority of people will expect the elements they want from those repositories to go to them

Media companies need to learn that the stories in their traditional editions or the programs in their own traditional program schedules are now more valuable separately than as produced as editions or program schedules. Stop concentrating on the producing and selling the editions or the programming lineup schedules. Concentrate instead on producing, syndicating, and selling each individual stories and individual program. Go with the flow. The tide has changed.

The End of Newspapers and The Future of Information

La Fin des Journaux, by Bernard Poulet

For some time, I’ve been meaning to promote Bernard Poulet‘s excellent La Fin des Journaux et l’avenir de l’information (The End of Newspapers and the Future of Information) to my francophone friends. It’s available from Amazon.fr in Europe and in North America from Amazon.ca, but not yet in an English-language version.

Poulet is editor in chief of the French business magazine l’Expansion, and his 217-page book caused a bit of a sensation even before it was published by Gallimard last year, when parts of it were excerpted in the magazine Le Debat.

France has seen the number of daily newspapers sold each day halve from 3.8 million in 1977 to 1.9 million in 2007 and national dailies such as Le Monde and Liberation totter on the verge of bankruptcy (despite French government subsidies to daily newspapers, ranging up to 15 percent of their gross revenues.) As in most other post-industrial countries, young people don’t regularly read newspapers anymore.

‘Maybe it’s time to panic’, is the title of Poulet’s first chapter. He sees multiple erosions of the traditional business model for publishing (and broadcasting) news:

The business has been based upon advertising being wrapped around the news, but now via the Internet advertisers have a more direct way to reach consumers.

Likewise, the consumers themselves are directly able via the Internet to consume the specific news they want more directly than purchasing entire packages of information (such as an entire newspaper or news magazine edition).

Plus, the ‘quality’ journalism model has lost touch with consumers and become so didactic that consumers reject and resent it.

Bernard Poulet, Sanja Pecenovic, and Vin Crosbie, Montenegro, 2008
Bernard Poulet, Sanja Pecenovic, and Vin Crosbie, Montenegro, 2008

Poulet says that journalists and publishers in France and other countries are in a psychological state of denial about these profound changes. Moreover, consumers are fleeing traditional journalists who are trying to exercise a moral authority over them and instead are seeking the ‘egalitarian ideology’ of the Internet, which gives them the ability to talk back to journalists, to talk to each other, and even to contribute their own stories via ‘citizen journalism’ and blogs.

He foresees the disappearance of daily newspapers in France in 20 to 30 years and the emergence of a two-tiered information system. There will be a wealth of deep and detailed information for the rich who can pay for it and there will be a superficial information for those who cannot pay or who don’t want to keep be kept informed.

If you can read French, I highly recommend this book. I hope an English-language version will be published. —Vin Crosbie

[Disclaimer: Poulet also is chairman of the Media Development Loan Fund, which helps finance and develop independent news outlets in countries with a history of media oppression. I’ve done unpaid, pro bono consulting to MDLF. I also am quoted in Poulet’s book.]

Regarding Academic Research and Fatuous Reporting About Trouble Media Industries

Many of the media industries for which journalism and media professors prepare students are, if not yet dying, seriously ill, stumbling if not yet in collapse due to titanic changes underway.

Ten days ago, I published here a call for American journalism and media professors to conduct more practical research because too much of their research is too esoteric to help those industries. Rather than write this call all by myself, I heavily quoted Earl Wilkinson, the executive director of the International Newspaper Marketing Association (now the International News Marketing Association). I timed it for the Association for Education in Journalism and Mass Communication‘s (AEJMC) annual conference, the largest convention of American and Canadian journalism and media professors, held last week in Denver. Wilkinson had attended AEJMC in 2002 and spoken at the AEJMC 2003 conference.

My call provoked a dozen remarkable comments, from professors and from industry change analysts, about if they should be solving the industry’s problems, if those problems are caused by business people or the people who create the industries’ content, and if whatever problems exists just in US academia. On the AEJMC Newspaper Division’s blog, it prompted blogmaster Bob Stepno,  a journalism and media professor of Radford University, to retrieve Wilkinson’s correspondence with AEJMC and  the AEJMC’s own qualitative and quantitative surveys about the focuses of its research. All worth reading if you’re a media academic, student, or someone who’s looking for answers for the media industry’s problems.

According to their tweets, many professor at AEJMC10 were disappointed that the venue (the Denver Sheraton) didn’t always have a WiFi field available in the conference hall. Some of the professors are now tweeting that a working WiFi field should be requirement for the AEJMC11 venue.

Fine idea. However, the problem says more about the professors than the venue. Most of those professors should be teaching their students how to get online when WiFi isn’t available—such as when filing a news story from the scene to their newsroom. You’d think they’d know how to do that themselves. Never rely on there being WiFi. Real world practitioners don’t. When I don’t find WiFi where I am, I plug an inexpensive USB cell modem stick into my computer. It’s gotten me online in Malaysian jungles, atop alps, and in hotels that don’t have WiFi.

Southern Methodist University Professor Jake Batsell rightly told me that there wasn’t a solid cell signal deep inside the Denver Sheraton, so this method probably wouldn’t have worked there anyway. I was just surprised how dependent professors are on free WiFi, upon which the journalists they train shouldn’t be.

Did I say that many of the media industries  are, if not yet dying, seriously ill, stumbling if not yet in collapse due to titanic changes underway? I’m sure that some professors and some media industry executives (what’s Gavin O’Reilly up to these days? He’s being uncharacteristically quiet) will still disagree with me about that, despite all the data evidence.

Speaking of which, I had to chuckle at former Guardian editor Peter Preston‘s column in The Observer on Sunday in London. Triumphantly entitled Newspapers beat the doomsayers’ final deadline, it states:

Not long ago, the experts predicted 10 US papers would be gone in 18 months. They were wrong. And prospects for print are looking better, not worse, than they did in the depths of the crunch…. In America, where the direst predictions flourished,Time ran a March 2009 article on the nation’s “10 most endangered newspapers” and forecast that ‘eight would cease publication in the next 18 months’. Well, that was 17 months ago, and all 10, from the Miami Herald to the San Francisco Chronicle, are still publishing.

What a splendid example of fatuous retorting of fatuous reporting!

First and foremost, what “experts predicted 10 US papers would be gone in 18 months”? Not any newspaper industry analysts I’ve ever heard or read, and my profession has been as a newspaper analyst for the past 17 years. No, the “experts” Preston cite is Time magazine itself, that fading and ever-more People magazine shadow of what had been a decent news magazine 30 years ago.

And what “experts” did Time itself quote in the 10 most endangered newspapers story that Preston quotes? A website in New Rochelle, New York, called 24/7 Wall St. whose six-person news staff writes stories and opinionson the subject of:

For several decades most business journalism was dominated by Business Week, Forbes, Fortune, and The Wall Street Journal. While all of them have online editions, new web operations from Marketwatch, TheStreet.com, Bloomberg.com, Reuters.com, The Fool, and a dozen blogs and commentary sites have begun to take the place of print. Revenue is also flowing out of print to the web allowing financial websites to spend more on writers and content.

In other words, Time based its 10 most endangered newspapers story on a single source which has a vested business interest in seeing printed editions fail and being replaced by companies like that single source. In fact, if you’re planning a conference and a speaker on that subject, the 24/7 Wall St. website says they’re the speakers you want about how companies like theirs are replacing printed news publications. Moreover, 24/7 Wall St. is hardly an expert about the newspaper business. Ask people, either pro or con the future of newspapers, within the newspaper industry or any academic who follows that industry. There are plenty of experts about the newspaper industry, but 24/7 Wall St. isn’t one. Go to its site, particularly its About page, and judge for yourself.

Indeed, no real or credible “experts” about the newspaper industry has ever said that eight out of the ten newspapers on the list that Time got from 24/7 Wall St. will fail in 18 months. Or even 36 or 72 months. But Time‘s fatuous reporting provide a London columnist and former newspaper editor a chance to say the talk about newspapers being in jeopardy or dying was much ado about almost nothing.

OECDnewspapers
2007-2009 declines, by percent

Here’s that almost nothing, according to the Organization for Economic Cooperation and Development. In the US, combined print and online newspaper ad revenues dropped 27.2 percent just in 2009. That’s a plunge from $37.8 billion to $27.5 billion. US newspapers’ online revenues, which were already less than a tenth of those newspapers’ revenues, dropped 11.8 percent.

Most real experts about newspapers have talked about the real possibility that half of the 1,408 daily newspapers in the US could fail during this coming decade. Just because 8 of a fatuously cited endangered 10 didn’t fail within 18 months doesn’t mean their danger is over.

Hundreds of thousands of people in the UK might have read Preston’s column in print Sunday, but people wanting to read the Montreal Gazette could do so only online that day and future Sundays. After 22 years, the Gazette ceased print publication on Sundays, Publisher and Editor-in-Chief Alan Allnut announced.

At the end of this month, Jornal do Brasil, one of the oldest newspapers in South America’s largest  country, will stop publishing its print edition and will be only available online. in 1995, Jornal do Brasil was one of the first South American dailies to launch a website.

Singaporean TV News Coverage


The Singapore Press Holdings Foundation each year hosts a media lecture in the Drama Centre of the National Library. This year’s theme was Media in Transition: Social & Economic Impact. I gave the lecture. Here is TV news coverage of that speech, delivered on July 14, 2010. To see the entire lecture.

The Placebo Called Convergence

Part One

Crosbie’s Manifesto – Part Two

It doesn’t matter whether executives, housewives, politicians, or plumbers. Most people’s ability to perceive change is inversely proportional to its scale. They hail superficial changes as transformative, dismiss moderate changes as inconsequential, and fail to perceive gargantuan changes.

Moreover, when they can’t see the forest for all the trees, people tend to use Occam’s Razor to analyze the bark. It is a commonly-held belief that the simplest solution, even the most simplistic, must be true. Physicists, physicians, economists, and foreign affairs experts have spent centuries realizing just how complex reality actually is, but most people still accept only simplistic notions. This is why marketers, propagandists, politicians, and pundits love simple catchphrases, sound bites, and fabrications.

Thus when faced with a colossal change, simplistic myopia becomes people’s panoptic perspective. Superficial characteristics are mistaken for substance. Purported pundits proffer simplistic notions as solutions. Any complexities and other realities that refute the oversimplifications are dismissed or ignored. The Earth is asserted to be flat. The sun is declared to revolve around the Earth. Many people nowadays still believe that human behavior derives from the individual’s astrological signs or the shape and protuberances of that person’s skull.

So it shouldn’t be surprising that the media industries are myopic about the greatest change ever to effect them. Or that their journalistic sectors – whose weakness has always been oversimplification of complex issues – are the most nearsighted. They mistake the characteristics and traits of the change as the change itself. They ignore or dismiss obvious and recurring data about online usage of media that don’t fit their Mass Media orthodoxies. Their internal pundits, who have little true clue what the change actually is, proffer simplistic explanations such as ‘Trust is the New Black,’ ‘Transparency is the New Objectivity,’ ‘Everything is Hyperlocal,’ ‘The Transformative iPad’, or else concoct phrenologies such as a new economy based upon hyperlinks.

Meanwhile, the media industries’ self-styled ‘visionary’ chief executives impatiently wait to be told what variation of their old business model is the new business model—as if adaptation to a remarkably complex, profound, and fundamental change can be simplified into a mere variation or simple course correction.

In post-industrial countries, these pundits’ and executives’ stunning conceptual myopia has been leading their media industries into catastrophe for more than a decade. This myopia likewise exists in developing countries, where, if not dispelled, it will lead their media industries into disaster by the end of this coming decade.

The simplistic notion underlying this misperception is the colossal change underway in media is simply that consumers are switching media consumption from analog to digital.  This misperception causes traditional media companies to believe that all they need to do to succeed in digital is transplant their analog (i.e., Mass Media) business models, analog content packaging, and analog content into digital albeit with some variations or tweaks such as adding hyperlinks, audio, and video, creating applications that distribute that content to mobile phones, e-books, or onto Social Media, having their editors or CEOs blog, focusing on ‘hyperlocal’ coverage, or all of those tweaks and variations at once.

Almost all traditional media companies erroneously believe that digital is a converged form of Mass Media. They believe digital is a new form of Mass Media in which media companies converge text, photos, graphics, audio, video, and animation to compete against one another, rather than newspapers and magazines using only text and photos, or television channels using only graphics and video, or radio channels using only audio. They believe that digital is a new form of Mass Media in which newspapers, magazines, radio stations and radio networks, and television stations and television networks converge to compete directly against each other, rather than newspapers competing only against other newspapers, magazines only against other magazines, etc.

Using digital to replicate Mass Media seems natural to traditional media companies, traditional media industries, and those industries’ internal pundits and academics. Almost all of them see digital as mainly a way to repurpose Mass Media’s traditional content, traditional products, traditional practices, and traditional business models. Most see digital as merely an electronic extension of Mass Media.  Indeed, some see digital as an evolutionary step in Mass Media. That there can be a way other than Mass Media for mass numbers of people in advanced societies to consume news, information, and entertainment is inconceivable to most traditional media companies’ executives, pundits, and professors. They almost axiomatically believe that the term media means Mass Media.

So the placebo of convergence has been willingly swallowed by most media companies and the media industries. It causes them to believe they are doing something about digital, that they are seizing the gargantuan opportunities of digital, and that they are solving the titanic problems that the greatest change in media history causes for them. Furthermore, because immense numbers of media companies have ingested the convergence placebo, peer pressure and stuporous groupthink discourage critical examination of the convergence strategy’s effectiveness. They are meanwhile appeased by superficial appearances that the strategy might be working—in the case of major media companies, more digital users than analog users nowadays. Appeased and lulled by the placebo of convergence, the companies and industries nonetheless cannot fathom are flummoxed why their Mass Media products, packages, practices, and business models that they’ve spent more than a decade transplanting into digital aren’t earning revenues anywhere nearly as lucrative as those same products, practices, packages, and business models earn from print or broadcast.

This is how the placebo of convergence caused media companies and media industries in the world’s most advanced post‑industrial countries to waste more than a decade of time vital to make the fundamental adaptation to the greatest change in media history.  Pursuing convergence all that while has caused those industries and companies to stray much farther away from the course they should have taken. They’ve now lost so many regular users, so much advertising revenue, and terminated so much staff that many of these companies and some of these industries are now beyond salvation. The soothing but soporific affect of the convergence strategy hastened their doom.

The greatest change underway in media isn’t that consumers are switching their consumption from analog to digital formats (in other words, convergence). The greatest change underway is that, within the span of a single human generation, people’s access to information has shifted from relative scarcity to surplus. The primary reason why people are switching their media consumption is because digital formats offer them an extraordinarily larger and incomparably more articulate selection of content to match their needs and interests than they can get from any Mass Medium vehicle (from any one newspaper, any one magazine, any one radio station or network, and any one television channel or station or network), even when those Mass Media packages are offered in digital format to them. They aren’t switching to digital primarily to read a newspaper or a magazine or via mobile devices. Nor are they switching to digital primarily to hear radio or television channels online or via mobile devices. Although digital can be used for Mass Media purposes, most of the 1.8 billion people worldwide who are use digital aren’t consuming it as Mass Media. They use and consume it in entirely new ways and new modalities that transcend and are superseding the Mass Media.

Look at the data. If it were true that most people use digital to consume Mass Media, why does the average user of almost any Mass Media company’s Web site use it far less frequently and far less thoroughly per day, per week, per month, or per year than does the average user of that same Mass Media company’s printed editions or broadcasts containing the same content? Even though many media companies’ Web sites nowadays have far more users than those companies’ printed or broadcast products do, the digital consumers on average use the sites far less frequently and far less thoroughly than consumers of the analog products do. The data from Nielsen or ComScore has shown that throughout the more than 18 years since the Web was opened for public use.

A sterling example is The New York Times. NYTimes.com has more than 17 times as many users as that newspapers’ printed edition has readers, yet the site’s average user visits only 4 to 5 times per month (in other words approximately once per week). Its average user looks at fewer than 32 NYTimes.com Web pages all month long (meaning less than 32 stories by The New York Times, because that newspaper spreads most stories over more than one Web page to maximize banner advertising). Their average user spends an aggregate of less than 25 minutes using the site during the entire month.

By contrast, the average reader of that newspaper’s printed edition reads it 20 to 25 times per month; sees several hundred pages during that time; and often spends more time reading it daily than the Web site’s user spends all month. The disparities between digital and analog usage are even greater for medium-sized and small newspapers. Similar disparities are the norm for broadcast media, too.

Yet digital users aren’t consuming less media than their analog brethren. For example, the average American online during December 2009 visited 83 Web sites, saw 2,614 Web pages, and spent more than 69 hours online, according to Nielsen. Although the average American consumed that many sites and pages online, he consumed far less of any single Mass Media companies’ package of content than he used to in printed or broadcast forms.  Instead of frequently and thoroughly consuming few locally available Mass Media companies’ packages of content, digital users are hunting and gathering from all Web sites and other forms of digital media whatever items of content best fit their own individual needs and interests. (It is why they use search engines so much).

As Peter Horrocks, director of World Services for the British Broadcasting Corporation, noted last year.

“The consequence of this change in users’ consumption has only dimly been understood by the majority of journalists. Most of the major news organisations had the assumption that their news product provided the complete set of news requirements for their users. But in an internet world, users see the total information set available on the web as their ‘news universe’. I might like BBC for video news, the Telegraph or Daily Mail for sports results and the New York Times for international news….

“The ability of audiences to pull together their preferred news is bringing the walls of the fortresses tumbling down. In effect, the users see a single unified news universe and uses technology (e.g.Google, Digg etc) to get that content to come together.”

Thus, if media companies simply transplant into digital their traditional packages of content – even with the converged additions of hyperlinks, multimedia, editors’ or CEO’s blogs, and ‘hyperlocal’ coverage –and offer these enhanced traditional packages content via Web sites, mobile phones, and e-book devices, the companies will fail. They haven’t adapted to people’s access to information becoming surplus rather than relatively scarce.

Moreover, those companies will fail quickly if they attempt to charge digital users for traditional packages of content.  If people are using these packages far less frequently and far less thoroughly in digital when offered for free, those people are highly unlikely to start paying to do so.  Most traditional media companies that have are trying or have tried to charge online for access to traditional packages of content woefully misunderstand people’s usage of digital. It’s a pyrrhic strategy, an overdose of the convergence placebo.

If media companies and media industries want to survive in the future, then they need to understand the reason for this change and its effects. The companies and industries must produce and distribute content and products that are rooted in the change and its effects. They need to stop relying on Mass Media practices and business models as their primary or even sole methods. They need to begin adapting to their methods, models, and infrastructures to great change underway.

Most of the companies that swallowed the convergence placebo thought they knew what the new media business really was. Many others think that model has yet to be discovered. Nearly two billion people worldwide use digital to hunt and gather content that best fit each of their own individual needs and interests. Providing each of them with that content but eliminating the need for each of them to hunt and gather is a gargantuan business opportunity that can be satisfied by media companies, but only if those companies and their industries adapt their operations and infrastructure to the effects of people’s access to information having changed from relative scarcity to surplus.

In the previous section of this essay, I explained in somewhat more detail the greatest change in media history, which is now underway. In the  section of this essay that I’ll begin posting Thursday, I’ll detail the effects of that change and use the Principle of Supply & Demand as a prism to see the entire spectrum of its effect.

Subsequent sections will outline specifically what media companies and the media industries must do.

Part Three

An ‘Unnatural’ Conference About Online Media Business Models

The natural way in which media conferences about online business models have been organized is either to invite company chief executives and online media pundits to speak or else to collect workers from a rank (such as journalist) of the media industries to compare notes. The hope in either case is that the speakers or workers will collectively discover why traditional media business models are failing and what the new media business models are.

Unfortunately, the latent flaw in these conference organizational methods is that these speakers and workers should long ago have discovered why the traditional media business models are failing and what the new media business models are. In other words, the organizers are asking the very same people who led the media industries into the predicament to identify the problem those same people caused and to lead the industries out of it. As Einstein reputedly said, “We cannot solve our problems with the same thinking we used when we created them.”

It is highly unlikely that media company chief executives are going to say that the business models they’ve implemented at their companies during the past many years, the business models upon which they’ve based their careers, are now impractical, obsolete, or wrong. Moreover, it is very highly unlikely that any chief executive of a publicly-held media company will do that. If they already knew and had implemented the answers, it would be fine. But the fact is that they don’t, and their companies’ their readership, listenership, viewership, and gross revenues (compared with their pre-recession revenues) aren’t increasing. Many of these executives don’t even have a clue. They are invited to speak simply because they are chief executives of media companies.

As for the online business models conferences that involve just a single rank within the media industries, little more than this needs to be said: any newspaper, magazines, radio or television program, channel, or network, or even pure-play New Media website are organizations that involve multiple ranks. Without the other ranks, no single rank can formulate the solution.

Media conferences in which company chief executives and online media pundits speak or workers from a single rank of media companies collectively meet almost always tend to reinforce traditional orthodoxies. Groupthink and peer pressure discourages critical examination of the new media business model problem. This dynamic is one of the reasons there has been a conference held somewhere about this problem approximately once a month for the past several years.

Thus, Syracuse University’s Newhouse School of Public Communications and I have organized a new media business models conference in an ‘unnatural’ way. We’re inviting only speakers who we think have the answer—regardless where they are from or what they’re rank. We believe these are the people who together have all the facets of the solution. Moreover, they’ll be working in coordination with each other at the conference.

We call this event the M.O.B. Conference, for Monetizing Online Business [I tip my hat to Tom Showalter for coining the acronym]. The day and one-half conference will be held at the HBO Theatre overlooking Manhattan’s Bryant Park on Thursday, June 24 and Friday, June 25. Admission to it, including Thursday lunch and afternoon cocktails, is $250 (registration). Approximately 50 seats are left.

Here is the program:

Continue reading An ‘Unnatural’ Conference About Online Media Business Models

The Greatest Change in the History of Media

by Vin Crosbie

We live amid the greatest change in the history of media. Its speed, intensity, and magnitude are so enormous that most media executives and media scholars fail – and some even refuse – to recognize the change’s epochal nature. Of those who fail or refuse to see it, most do so because so many of its major aspects contradict the theories or contravene the beliefs upon which they’ve built their careers.

However, as the pace of the change of accelerates, an increasing number of those media executives and scholars have begun to claim that they now do perceive the greatest change. Yet the reality is they don’t. They are instead joining a growing movement of executives and scholars who mistake the traits or characteristics of the greatest change as the change itself.

This movement erroneously believes the greatest change underway in media is that consumers are simply switching media consumption from ‘analog’ to ‘digital’. [Or a more recent but parallel misperception: that the greatest change underway is that consumers are simply switching their media consumption from ‘desktop’ to ‘mobile’]. In other words, these executives and scholars believe the greatest change is that people who used to consume news, entertainment, and other information via printed periodicals, television sets, and radio sets, instead are now consuming the same packages of news, entertainment, and information via personal computers, tablet computers, and ‘smartphones’. This myopic misperception has led these executives and scholars to believe that all the media industries need to do to survive and prosper is to transplant the traditional business models, the traditional content packaging, and the traditional content (albeit with the addition of hyperlinks, audio, video, animation, and other multimedia) into online media accessible by personal computers, tablet computers, and ‘smartphones’.

This pernicious strategy, based upon a misperception of the change underway, has become responsible for the continuing failure of the world’s media industries to adapt successfully to the epochal change underway. Despite more than ten years of its implementation in post-industrial nations, this strategy, called convergence or ‘digital first’ by its proponents and shovelware by its critics, has demonstrably failed to generate revenue from online that are anywhere equal to those the same companies and industries earned from providing the same contents via traditional forms of media such as printed periodicals and terrestrial or cable broadcasting. Nor has implementation of the strategy created usage of the contents online that has been as frequent or thorough as the contents have in those traditional forms. The results of  ‘convergence’ or ‘digital first’ strategy are new media that are less frequently and less thoroughly used and are less profitable than the old media, despite having more users than the old media, are that are cannibalizing old media as more and more users switch to it.

The strategy’s failure flummoxes the executives and the scholars who believe its central assumption that the greatest change underway is people are simply switching media consumption from ‘analog’ to ‘digital’. Nevertheless, rather than question that core assumption, these executives and scholars doggedly continue to pursue implementing the strategy, for lack of any other ideas. They are leading most media industries into catastrophe. They have wasted more than 15 crucial years that could instead have been used to adapt the media industries properly to the epochal change underway. During that lost time, many formerly robust media industries in post-industrial countries have withered, losing significant portions of their audiences (including most of a new generation) and having had to discharge hundreds of thousands of trained media workers (including many tens of thousands of journalists whose investigative and expository reporting is necessary for their nation’s democracies to function properly). The aggregate damages to these industries in some of the post-industrial nations are grave, as well as warnings to the media industries of industrial nations in which the epochal change underway is only now beginning.

The media executives and media scholars who believe that the greatest change underway in media is that consumers are simply switching media consumption from ‘analog’ to ‘digital’ figuratively can’t see the forest for the trees. They mistake one of the change’s traits or characteristics as the change itself. It is the stunning conceptual myopia of ‘convergence’ or ‘digital first’ strategy that I address and remedy.

People are indeed switching their media consumption from ‘analog’ to ‘digital’, but not because they find that reading texts, listening to audio, and watching video is easier and more pleasurable via personal computers, tablet computers, and ‘smartphones’ than via printed periodicals or radio receivers or television sets. That’s certainly not why they do it or the greatest change in media.  Instead, as I’ve been writing since 2004, the greatest change in the history of media is that, within the span of a single human generation, people’s access to information has shifted from relative scarcity to surplus, even surfeit.

Billions of people whose access a generation ago to daily changing information was at most one, two, or three locally-distributed printed newspapers, one, two, three, or four television channels, and one or two dozen radio stations, can now access virtually all of the world’s news and information instantly at home, office, or wherever they go. The economic, historical, and societal ramifications of this epochal change in media will be far more profound than Johannes Gutenberg’s invention of moveable type, Nikola Tesla’s and Guglielmo Marconi’s invention of broadcasting, or any other past development in the history of media.

This epochal change occurred over several waves during a 20 to 40-year period:

  • The 1970s brought the first wave: cable television(CATV) followed decades later by satellite television (SATV). People in post-industrial countries who used to have access to no more than three or four television channels gained access to dozens and then hundreds. The defining characteristic of this, as well as the subsequent waves of the change, was not only that it gave those people more choices within a format of media but more specific choices. Almost all of the new channels weren’t general interest or foreign-language but instead topical. If you’re a tennis fan, you no longer have to be satisfied with an occasional report during the one, two, or three original channels’ newscasts or hope that those channels’ weekend sport programs might feature a tennis match. You can now watch entire networks devoted only to sports, including one network entirely devoted to tennis. If you love to cook, you no longer have to wait for a weekend cooking show aired by those few original channels, but you can instead watch four or five new networks each devoted to cooking. Likewise, there are entire television networks each devoted to a specific category such as news, sports, history, biography, cartoons, science, comedy, animals, fashion, science fiction, shopping, etc.
  • The 1980s brought the next wave: advances in offset lithographythat made publication of topical (‘niche content’) magazines economical. Newsstands that previously sold 20 to 30 magazine titles now sell hundreds, almost all of which are about specific categories or topics. A reader specifically interested in that topic now no longer must wait for the occasional story about that topic in a newspaper or general-interest magazine.
  • The 1990’s brought Internet access to the public. More than 3 billion people worldwide have since gained access to more than 857 million active Web sites. These include virtually all the worlds’ newspapers, magazines, trade journals, broadcast networks and stations, plus social networks, some than 100 million blogs, and innumerable sites about specific topics and topical categories.
  • The first decade of the 21st Century brought the next wave: broadbandaccess to consumers in post-industrial countries. The hallmark of this wave of change is instant, ‘always-on’ Internet access. The first decade of the 21st Century brought the majority of Internet users in post-industrial countries broadband speeds, plus mobile access. The hallmark of broadband is instant, ‘always-on’ Internet access, eliminating the need to dialup a telephone line for online access. Although some experts claim the wave which brought the Internet to the public was the most powerful, the broadband wave was deeper and more powerful because it markedly changed how and from whom consumers access news and information. It markedly increased the ease by which those people consume their newfound cornucopia of media, and so reshaped how and from whom they consumed information. It also provided them with ready access to 3,700 TV stations broadcasting online, plus tens of thousands of downloadable movies, and hundreds of millions of professional and amateur video clips.
  • Our current (2010s) decade’s wave will provide all that information to people not just through desktop and laptop computers but via all mobile devices, vehicles, the electronic equivalents of flexible paper, and even television sets. Almost all the new mobile phone handsets are being designed as ‘all-screen’ models with full Internet access. Many top-of-the-line handsets are also being designed to receive streaming video signals (even if only through arrangement between the cellular carrier and television networks). Because most people replace their mobile phone handsets every two to three years, these new handsets mean that probably by the end of 2015 the number of people who have Internet access will increase to 3 billion (and sooner or not very later than that the number of Internet-equipped ‘smartphones’ in existence will be more than the human population!). Moreover, many of the world’s major manufacturers of television sets, companies such as Sony, Samsung, and LG, have announced that most of their products will be connected directly to the Internet. People will be able to view YouTube, Hulu, any other video streaming sites, as well as all Web sites via their television sets. Television sets with Internet access will also be able to circumvent the limited number of television networks and channels available terrestrially or from local cable television service providers. Software programs already allows users of personal computer, iPhone, or Android mobile phone handset to access more than 4,000 live television stations’ broadcasts from all over the world, and television sets connected to the Internet will have a similar capability. People with Internet-connected television will be able to access any of the thousands of television stations in the world that happens to stream their broadcasts online. Many television networks have already begun streaming high definition broadcasts into the Internet in anticipation of this trend. The result of this coming decade’s wave will be that all information in text, audio, and video formats will be instantly available to the majority of the world’s population wherever they are.

Thus during the past 30 to 40 years the cumulative effect of these waves of technological change is that the majority of humanity access to news and information is changing from scarcity to surfeit. As examples, a Xhosa tribesman in South Africa with a Vodacom HTC Magic mobile handset has instant access to more information than the President of the United States did at the time of the tribesman’s birth; so does a Bolivian girl to whose school has been donated refurbished Macintosh computers; so does a Mongolian plumber who bought a Lenovo netbook for his son’s education. Today, between 1.7 billions of and 4.1 billion people can instantly obtain more information than could be contained in the ancient library of Alexandria, the Renaissance Era library of the Vatican, and the modern Library of Congress combined.

Gutenberg’s invention of the movable type printing press some 570 years ago had profound effects upon civilization. Within 50 years of that invention, ten million books had been printed and distributed throughout Europe. However, the historical and societal effects of Gutenberg’s invention pall when compared to what has happened during the past 50 years: the majority of the world’s population has had their access to information change from relative scarcity to instant and pervasive surplus. This is not only the greatest development in media since Gutenberg’s press, it is the greatest media development in history.