Category Archives: Mobile Devices

How use of mobile devices affect the news, entertainment, and information industries.

The World’s Longest-Published Newspaper Successfully Transitions off Print

A Lloyd’s List edition from 1826.

The world’s longest-published newspaper will become a non-printed, totally online service nine weeks from now. On 20 December, Lloyd’s List, which has been continuously published since 1734, will no longer be available in print. It’s online edition for the Web have has been published for more than ten years and its edition for mobile phones has been published for several years.

Lloyd’s List, published by the  is considered by many experts to be one of the earliest English-language newspaper. Although it is primarily a shipping industry daily trade journal, that’s what the earliest English-language newspapers were: editions that not only published news of which ships were leaving or arriving port but what events were occurring in distant or foreign ports that might affect commerce. It was published weekly by by Edward Lloyd, the proprietor of Lloyd’s Coffee House in the City of London, who founded the insurance brokerage market named for him.

Now, 279 years later, the staff of Lloyd’s List has found that only two percent of the newspaper’s readers read the edition in print.

“The decision follows many years of customer research and preparation and is – first and foremost – designed to ensure that the service continues to evolve with customer demand. This is move supported by the overwhelming majority of our customers. Less than 2% of our readers currently use print-only and no other means to access Lloyd’s List. We have already undertaken years of investment in our digital and mobile platforms, but the move away from print will allow us more time and resource to build on that with innovative approaches to data and a more bespoke service that offers content tailored to individual customer needs,” said Editor Richard Meade.

We think the significance of Lloyd’s List ceasing print is that the world’s longest-published newspaper is among the world’s first successfully to no longer need to print.

 

Journalism Schools’ Myopia When ‘Testing’ Google Glasses

Google Glasses
Google Glasses

How will journalists could use Google Glasses ? It’s the wrong question.

The right question for journalists to ask is how and why will people who consume media use Google Glasses (or similarly wearable optic interfaces)?

Whenever I encounter media professors or media researchers testing how journalists could use Google Glasses, I ask them this simple question: what proportion of Google Goggles users will be consumer and what proportion will be journalists? My guess is the ratio 20,000 to one. Thus, which of the following two topics is more important for journalism schools to research:

  • How will and why people use Google Goggles to consume news, entertainment, and information?
  • How will and why journalists use Google Goggles to produce news?

The first question is clearly more important than the latter.

Journalists, particularly when they have a new toy, too often ‘put the cart in front of the horse’. When examining a new device or a new process, they think, ‘How can I use this to do what I do?’ rather than asking ,”How will people want to use this?” Imagine a chef who sees a new kitchen appliance and thinks, “Is there any way I can use this new device to make Chicken Marengo?” when his restaurant’s customers might instead be hungry for something other than that dish. Any industry that continues producing what it wants to produce when instead that product is not what people want or how people want to use that product, will fail. Ask the tens of thousands of newspaper reporters in the U.S. who’ve become unemployed during the past seven years before they and their bosses lost touch with what people want from them.

When journalism schools study what impact Google Glasses might have on their profession, the schools need to focus on: which topics, types, and modes of news will people want to consume while wearing such devices?

There are at least five possible topics of study about Google Glasses, and three of those also are what schools also need to study about the effects smartphones will have journalism:

1. Geolocation – What topics, types, and modes of news will people want to consume based upon their exact location as they roam?
2. Recognition – What topics, types, and modes of news will people want to consume based upon what they see as they roam?
3. Augmented-Reality – How best to provide, display, and explain news visually so that it overlays what they see?

Google Glasses add at least two more topics journalism schools need to study:

4. Hands-Free ContextWhat multimedia interfaces can be used so that people can interact hands-free with news provided in Augmented-Reality? (Unlike smartphones with touchpad interfaces, Google Glasses rely largely upon voice commands and simple scrolling motions; all of which somewhat restrict, compared to other computerized devices, how people interact with the device.)
5. Kinesthetic Context – Because Google Glasses are literally looking at whatever the wearer is looking at that moment (unlike a Smartphone or camera, which must be aimed), an unwavering gaze, how should the topics, types, mode, and displays of news or other information be automatically changed according to not only where the wearer is but what the wearing is doing? For example, a stationary person might want different news than someone who is moving at 30 kilometers per hour through the same spot and different than someone who is moving 150 kilometers per hour though that spot. Detailed texts might be fine for a stationary person, but not someone biking or driving past.

Google Goggles were invented as ways for people to access access information in the context of their lives, not the journalists’ lives.

Unfortunately, most of the research being done about Google Glasses in journalism school focuses on how journalists might use these devices for recording audio or video (most specifically, reporter’s point-of-view videos). Much of that research is well-meant but misguided. By almost all standards, Google Glasses are inferior to hand-held video cameras or even clip-on video recording devices. No surprises there. So, why research how to use an inferior device just because among the many things it can do is reproduce badly the capabilities of better usable devices?. The five research topics I’ve mentioned are more pertinent.

Google Glasses are novel to use, but many journalism schools are using the devices merely as new toys in the labs or excuses for ‘research’ which will likely be inconsequential. Journalism professors and instructors should remove their prototypes these spectacles and directly eyeball how consumers will use the devices. The answers to that are key.

Rupert Murdoch, the Convergence Placebo, and iPad Gellcaps

News Corp. Chairman Rupert Murdoch apparent announcement that his company will launch a new U.S. national newspaper to be distributed digitally (not printed) and exclusively as paid content for mobile phones tablet computers such as Apple Inc.’s iPad is not only a classic case of the Convergence Placebo but of how the iPad is making that placebo much easier to swallow for misguided executives of media companies.

According to the Las Angeles Times:

The initiative, which would directly compete with The New York Times, USA Today and other national publications, is the latest attempt by a major media organization to harness sexy new devices to reach readers who increasingly consume their news on the go. The development underscores how the iPad is transforming the reading habits of consumers much like the iPod changed how people listen to music.

“We’ll have young people reading newspapers,” the 79-year-old Murdoch said during the company’s Aug. 4 earnings call. “It’s a real game changer in the presentation of news.”

Two intertwined threads of thinking underlie the thinking of Murdoch and others who mistakenly believe that devices such as the Apple iPad will reverse the declines of daily newspapers in post-industrial countries:

  1. The belief that the reason why the circulations and readerships of daily newspapers in post-industrial countries have been declining for nearly 30 years and begun plunging during the past 5 is because people, particularly young people, want to read newspapers online rather that in print.
  2. The second thread is the belief that placing newspapers on tablet devices and on mobile phones will increase the numbers of people who read newspapers, simply because more people use mobile phones and might use tablet devices than now read printed newspapers.

That first thread is the thickest—by which I mean it is most favored by the thick-headed media executives who don’t understand why the circulations and readerships of daily newspapers in post-industrial countries have been declining for nearly 30 years. Readerships and circulations did not decline during the 1980s and 1990s because people were waiting to read daily newspapers on tablets devices or mobile phones. Circulations and readerships declined because those newspapers’ contents increasingly didn’t satisfy people.

‘It’s The Content, Stupid!’

To paraphrase political consultant James Carville‘s Democratic Party slogan during the 1992 U.S. presidential campaign, it’s the content, stupid! The reason why newspapers have declined is the content, not the device that content is on.

The newspapers’ contents increasingly didn’t satisfy people because people gained access to other media that could more articulately satisfy each newspaper reader’s individual needs and interests better than any traditionally produced daily newspaper could.

The fact is that the traditional daily newspaper is a common edition that is delivered to each of its readers; each reader gets the same edition that day.  The editor selects which stories all readers get, and because there space for only a limited number of stories in each day’s edition, the editor chooses those stories according to two broad criteria: the stories about which he thinks all readers should be informed and the stories that might have the greatest common interest to all readers.

The resulting selection of 30 to 100 stories per day (depending upon the circulation size of that newspaper) is therefore a limited choice that might satisfy a few of each reader’s individual interests but is highly unlikely to satisfy all of all readers’ interests. Surveys of newspaper readers half a century ago show that the average reader reads 6 to 8 of the 30 to 100 stories per day. Surveys of newspaper readers during the decades since show that the numbers of stories read have declined to approximately half that number.

During the 1980s and 1990s, as people gained access to cable television and satellite television, and offset lithography made publication of topical magazines economical, people began satisfying their individual interests by watching those new forms of television and reading those topical magazine more and more and reading daily newspapers less and less. Once people began to gain Internet access during the 1990s, and particularly when they got it on broadband during this past decade, they gained immediate access to a quarter billion websites, blogs, and social media networks that could satisfy their individual needs and interests incredibly better than any daily newspaper could. (Indeed, daily newspaper circulations in post-industrial countries began to plummet around 2004, approximately when the majority of the households in those countries acquired broadband Internet access.)

The Los Angeles Times story about Murdoch’s announcement notes, “The development underscores how the iPad is transforming the reading habits of consumers much like the iPod changed how people listen to music.” Yet if fails to note that the iPod changed music by letting people purchase the specific songs that fit a person’s specific interests rather than having to get an entire package (album) of other songs that might not.

So, if the reason why daily newspapers’ circulation and readership have plummeted is the newspaper’s generic package of content, why would putting that package of content on iPads, tablet devices, and mobile phones reverse those declines? It doesn’t makes sense.

Yet that generic package content of newspapers is that industry’s sacred cow. Despite lip service about change, there is huge denial that newspapers’ journalism, generic story selection practices, and delivery of a common edition to all is the problem. An industry whose idea of a major change is whether or not to permit an advertisement on page one, is unfit and unwilling to deal with fundamental changes.

‘It’s My Baby!

The newspaper industry instead desperately wants to find some way to continue its practices unchanged but online, or as they call it in ‘digital edition’ format. Flaws and all, the traditional newspaper is their baby and if they can find a way to parade it in the newest fashions, they feel hope that it will survive.

Behold their iPad edition! It looks like a newspaper, it contains the traditional newspaper’s content, but it’s digital and its from famously innovative Apple Inc. The 79 year-old Murdoch calls it a “game changer” that will “have young people reading newspapers.”

Which leads to the second thread upon which swallowers of the Convergence Placebo are hanging themselves: placing newspapers on tablet devices and on mobile phones will increase the numbers of people who read newspapers.

It will. It actually will. Some people who don’t read a newspaper edition on the Web might prefer reading one in the iPad format, in which a traditional newspaper looks like a traditional newspaper and not a webpage. It will because some people who prefer to read only when mobile (or only perhaps to kill time when stuck in transit) might do so on a mobile phone or tablet device.

However, the number of new readers who newspapers gain from iPad or mobile phone editions is very unlikely to compensate for the number of readers newspapers are losing in print. Nor would the revenues gained compensate for the much large revenues lost in print.

Like gellcap pills, iPad editions make the placebo of convergence easier to swallow, increasing an ill industry’s hope that it will survive, yet not bringing it the treatment it really needs for recovery.

Savvy Articles About Change or Its Lack in News Media

On July 31st here, I wrote about the need for Association for Education in Journalism and Mass Communication to produce more practical research to help media industries faced with radical changes and two days ago I reported about commentary my call produced. For reasons I mentioned on the 31st, I didn’t attend the AEJMC annual conference this year, instead following it last week via Twitter (unfortunately, AEJMC doesn’t webcast).

From what I understand from the tweets, the AEJMC conference didn’t produce any fruitful focus on research that might help the industries survive. Some academics respond that research about how to train journalists to write well and report objectively certainly helps those industries. That’s true, but I worry about if there will viable media industries and jobs for those well trained journalists unless those industries can reverse their declines. It’s fine to produce a fine tool, but it’s worthless unless anybody use it.

Nevertheless, from the tweets I saw, there was indeed a sea change at AEJMC this year–the growing primacy of New Media as people’s way to access news and information.  My Newhouse School colleague, Associate Dean Hub Brown described it well.

I’m glad academia is noticing a change that’s been underway for at least half a decade, when the majority of homes in post-industrial countries began using broadband Internet. A world way from AEJMC, Sky News and others in Australia are reporting that the board of directors at Fairfax Media, has ordered a strategic review of the company’s structure and management and a much more aggressive approach to the Internet side of its business because investors have criticized Fairfax’s Internet strategy. There is now talk of building website paywalls, combining print and online managements, and even ceasing to print and going fully digital. Fairfax publishes  The Sydney Morning Herald, The Age, The Australian Financial Review, and other newspaper in Australia and in New Zealand it publishes The Dominion Post, The Press, The Sunday Star-Times, and other newspapers.

Last week, Dave Morgan, CEO of Simulmedia, founder of TACODA and Real Media, and the former general counsel and director of New Media ventures at the Pennsylvania Newspaper Association warned that

I know the last thing that local media companies need is another Web-driven disruption in their markets, particularly one that could take a big chunk out of their revenues in the next few years. If local newspaper, yellow pages, radio or local TV companies thought that Google, Yahoo, eBay and craigslist were disruptive, they are now going to face down a competitor that will have an even bigger impact on their businesses than any one of those companies did.

I believe that location-based Web services will take 20% to 25% of the annual revenue out of local media’s current advertising base within four years. Yes, 20% to-25% of their revenue base will be lost by 2014. That spend will be displaced by promotion and marketing fees paid to these new location-based services or applications that run on top of them. To the incumbent companies, these new services will be like craigslist on steroids.

I think he’s right. Read the rest of his warning at MediaPost.

Another savvy article that cuts right through the fog is Robert Niles recent article, The only metric that matters, published in Online Journalism Review:

In the nearly 15 years that I’ve been working online, I’ve watched the most popular metric among Web publishers change from “hits,” to “page views,” to “unique visitors” to “time on site.”

But none of those metrics really matter. I’ve seen sites post phenomenal numbers for each of those categories, and fail. There’s one metric, and only one, that truly matters in determining your websites’s commercial success.

Revenue.

Your visitors can spend hours per month on your website, but a huge “time on site” value by itself won’t entitle you to a dime (see Twitter). I suspect that one reason why various Web metrics fall into and out of favor over the years is that managers talk up or down those metrics based on their website’s individual performance. Someone notices that people are spending more time, on average, on the website, then he or she gets on a panel at a news industry conference and – boom – “time on site” becomes the metric everyone needs to consider.

Like Robert, I’ve seen publishers chase ‘hits’, ‘page views’, ‘unique users’, ‘time on site’, and now ‘engagement’ as false metrics of success. None of those mean a damn unless the content is generating enough revenue to sustain the operation.

A third smart article is Can publishers learn from failure or should we just set the bar lower? written by Kylie Davis, the chief of staff for the Sun-Herald in Sydney, as well as an undergraduate in the Australian Graduate School of Management masters of business administration program at the University of New South Wales.

There is a lot of talk about how newspaper companies are slow to embrace change, that we are laggards when it comes to adopting to new business opportunities and suffer as a result.

But new research from the Australian School of Business takes it one step further, claiming that organisations will often embrace failure and rationalise it into success as a coping mechanism that justifies their behaviour.

Is this what newspapers have been doing?

Ms. Davis has been looking at a study by her university’s Gavin M. Schwarz entitled, the Logic of Deliberate Structural Inertia or, as its the online summary titles it, “Organisational Failure: How Lousy Results Become Optimal Outcomes”. She says that “some businesses suffer from ‘deliberate structural inertia’ where organisations prefer not to change their tried-and-true methods.”

Newspaper companies are full of enthusiastic proponents of new technology — staff who are hungry to embrace the new digital world and work on strategies to bring the dollars in and delight our readers and advertisers and who can see it’s potential. But the word from the top is to “wait”.

The research says “people are limited in their capacity to process information. Consequently they adopt spontaneous strategies to simplify complex problems and this allows failure to be rationally defended.”

Too many newspaper companies have done this over the past 10 years, claiming that the changes in mobile phone and online readers were niches that would never take off enough to justify us altering what and how we deliver content. They’ve preferred to wait until nimbler competitors proved that there really was a market there — and by the time we’ve tried to enter, the horse has bolted.

Savvy stuff for anyone trying to understand the failure to adapt by post-industrial countries’ daily newspaper industries. Whenever I hear a newspaper editor says, ‘Because other media can provide news to people more immediately than we can in print, newspapers’ future will be as a provider of analysis about the news rather than the news itself,’ I see someone who is redefining failure as success. There is no reason why newspapers online cannot provide news as immediately to people as other media can. But not if the editor is going to resist changing his traditional practices.

Ms. Davis article is freely available at the International News Marketing Association’s website.

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

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.

Nokia’s Life Tools and 175+ Countries

Last month elsewhere, I wrote about the importance of providing services to mobile phones as the basis for any newspaper’s future services. I’m involved in a project in a small South Africa city in which mobile will be the key (the story at that hyperlink describes it).

I’d written, rather bluntly, that I don’t particularly care what online business model saves The New York Times or The Daily Telegraph or National Post or Le Monde. Those national publications’ journalism certainly is worth saving, but national publications are atypical. What’s really needed is a business model that can save much smaller daily newspapers, those with less than 100,000 circulation. Those comprise more than 95 percent of the world’s newspapers.

I today spent quite a bit of the day examining Nokia’s Life Tools project. On Sunday, CIO magazine published a brief article outlining the project. It notes:

Life Tools includes a range of services aimed at rural mobile users in emerging markets, where agriculture remains a mainstay of local economies.

Agriculture-related offerings on Life Tools include local weather forecasts, information on crop prices at local markets, advice on growing crops, as well as pricing information for pesticides, seeds and fertilizer. Educational services include English lessons and advice on taking exams, while sports scores and music are available for entertainment.

While agriculture-related services might not be attractive to small newspapers in post-industrial countries, such services are very important in more than 170 other countries worldwide, countries where most of the world’s population lives.

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Moreover, what I’ve been discovering over the past several years is that newspapers need to develop their mobile phone services the opposite way that newspapers developed services in their printed editions.

Newspapers have been printed for more than 400 years. The original newspapers printed only news (hence the name newspapers), but over the centuries other information was added: advertising, scores calendars of events, cartoons, stock prices, dining & entertainment listings, horoscopes, etc.

Today, however, newspapers that use mobile phones only to offer news won’t gain very many mobile users. But if they instead offer mobile services providing dining & entertainment listings, horoscopes, calendars of events, services that match consumers and local merchants, etc., those newspapers’ mobile services will then have enough usage to be profitably able to provide news.

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Why Aren't Most Entertainment or Lifestyle Guides Accessible by Mobile Phone?

Speaking of mistaken ways in which media companies think when designing sites, how many of their executives have ever tried accesing one of their entertainment or lifestyle guide sites — sites that list events — from a mobile phone?

Almost all of those sites are designed to be read only on 800×600 or 1024×768 pixel personal computer screens. And many can’t be accessed without Adobe Macromedia Flash or other applicaitons incompatible with mobile phones. Dumb!

Think of your own life. When you’ve tried to decide what restaurant to visit, pub in which to drink, club to hear a band, or cinema to watch a movie, have you always been sitting in front of your personal computer? Or have you instead felt that need while driving, commuting, walking around town, or elsewhere away from your PC? Did you have your mobile phone with you?

FACT: More people today have mobile phones that can access the Internet than have personal computers that can. And most spend more of their lives away from personal computers than with.

If you are somebody whose company publishes an entertainment or lifestyle guide, try accessing it from your phone and see what happens.

People Contribute Record Number of Photos & Video to BBC After London Fire

People e-mailed the BBC with more than 6,500 photos or mobile phone video clips of the inferno at the Buncefield oil depot explosion yesterday.

According to MediaGuardian, this set a new record for emails sent to the BBC in the aftermath of an event. After the July 7th London Underground bombings, the BBC’s yourpics@bbc.co.uk site received around 1,000 images and mobile clips from the public.

MediaGuardian quoted Pete Clifton, the head of BBC News Interactive:

    “The range of material we received from our readers was absolutely extraordinary. Video, still pictures and emails poured in from the moment the blast happened, and it played a central part in the way we reported the unfolding events.”

Half a million unique users viewed clips and footage yesterday on the BBC’s online news video service, an audience second only to number of requests for clips on 7 July.

Today's Congratulations and Boos

Congratulations to Adrian Holovaty, editor of editorial innovations at Washingtonpost.Newsweek Interactive, and Matt Thompson, deputy editor of interactive media at the Minneapolis Star Tribune, for being named by the Boston Phoenix among the ‘Future 10’ list of journalists who could make a difference in the news industry. Each is only 24 years old.

Also in the news is the introduction of Neal Goldman and David Oddi‘s Inform Technologies, a startup venture attempt to offer consumers news customized from all online sources. The New York Times and ClickZ each have articles about it. The two Penn Statue alumni have very successful backgrounds: Neal launched Capital IQ in 2000, brought it up to 1,000 clients and 900 employees, and sold it to Standard & Poor’s last year for a handsome sum. David spent a decade as a partner in the mid-stage venture capital firm Saunders Karp & Megrue. Congratulations to them on the launch of Inform! [Disclosure: I consulted to them last year during the early stages on the project.]

Boos to the U.S. newspaper industry for blaming staff reductions on, among other things, newsprint price increases. “Newsprint costs are up significantly. Wages and health benefits are up. So you have the cost pressure on the one hand and the lack of revenue growth on the other. That’s really the problem, and everyone is having essentially the same problem,” Knight Ridder Chairman and Chief Executive P. Anthony Ridder told The New York Times.

Media General Corporation President and CEO Marshall N. Morton announced,”Publishing’s profit decline principally reflects higher expenses for newsprint, employee benefits and energy.”

The Wall Street Journal plans to shrink it’s size this year to, “achieve significant cost savings, mainly in reduced usage of newsprint, that will further improve Journal profitability,” Publisher Karen Elliott House told Reuters.

Yet Jack Shafer at Slate points out that newsprint prices, when adjusted for inflations, costs the same as it did in 1997 and that’s only 68 percent of its 20-year high, which came in early 1988. “Far from being victims of high newsprint costs, newspapers have been coasting on cheap newsprint for much of the past two decades.”

And boos to FIFA, the sport of soccer’s world governing body. It’s banning digital images of its next World Cup from appearing on newspaper websites and other electronic media until one hour after the matches finish.

“This is a severe curb on the freedom of editors to inform their readers,” said Timothy Balding, head of the Paris-based World Association of Newspapers (WAN), which represents 18,000 newspapers.

FIFA hasn’t given a reason for the ban, but many analysts are speculating that FIFA worries that digital images (which can include video) sent to video-equipped mobile phones or streamed from websites, might interfer with FIFA’s lucrative sale of traditional broadcast rights to its matches. The ban doesn’t effect mobile networks or online operations that have bought broadcast rights from FIFA. Soccer is the world’s most popular sport and more people on the planet now have mobile phones than have television sets.

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Hitachi to Sell Unrollable E-Paper in 2006

Hitachi.jpg
Hitachi plans to begin selling a color-capable electronic paper in 2006.

Rather than use organic light-emitting (OLED) diodes, the way that Philips’ e-paper does, Hitachi’s device will use a liquid crystal displays (LCD) 3-centimeters thick and equipped with a special panel that has doubles the noral light reflectivity of LCDs. Hitachi showed a 7-inch prototype, said the device is capable of showing an image bright enough for easy viewing without using a backlight, and can display a high-resolution image for several months on commercially available lithium ion battery cells. Unlike Philips e-paper, the Hitachi device can’t display video.

Nor can it be rolled up or bent. So, Hitachi believes its market for this e-paper will be used in shopping malls and trains for posters and ads, as well as at public facilities, offices and homes for information and message boards. Those are also the markets that currently use E -Ink’s black & white, lower resultion electronic paper.

3G version iPods; Satellite Radio vs. Webcasting

Speaking of 3G (below), BBC technology analyst Bill Thompson, at first skeptical of 3G, compares it against iPods and changes his mind. Among his comments:

    But just as the World Wide Web was the “killer application” that drove internet adoption, music videos are going to drive 3G adoption.

    With Vodafone now pushing its own 3G service, and 3 already established in the UK, video on the phone is clearly going to become a must-have for kids sitting on the school bus, adults waiting outside clubs and anyone who has time to kill and a group of friends to impress.

    3G phones and iPods can co-exist, at least for a while, but if I had to bet on the long term I would go for content on demand over carrying gigabytes in my pocket.

    This will please the network operators, who are looking for some revenue from their expensively acquired 3G licences.

    But it goes deeper than that: playing music videos on a phone marks the beginning of a move away from the ‘download and play’ model we have all accepted for our iPods and MP3 players.

    After all, why should I want to carry 60GB of music and pictures around with me in my pocket when I can simply listen to anything I want, whenever I want, streamed to my phone?

    Oh – and of course you can always use the phone to make voice calls and send texts, something which ensures that it is always in someone’s pocket or handbag, available for other uses too.

On a somewhat related note earlier this week, The Wall Street Journal (paid subscription access) compared U.S. satellite radio services (such as Sirius and SM) against an often overlooked but bigger distribution means for radio — webcasting.

    While just 3.4 million Americans subscribe to satellite radio, about 19 million listen to Internet radio each week, according to research firms Arbitron Inc. and Edison Media Research. That’s still tiny compared with the 277 million who listen to regular radio each week, but the number of Internet listeners has grown fast. Just three years ago, only 11 million listened to Internet radio each week.

    “There seems to be a sense that technology will replace what’s existing,” says John Hogan, head of the radio division at San Antonio-based Clear Channel, in reference to the threat the Internet poses to traditional broadcast radio. Instead, he believes, “technology will challenge what’s existing,” but broadcasters will meet that challenge.

    Mr. Hogan’s confidence stems in part from the toehold broadcasters already have on the Internet. The online simulcasts provided by hundreds of broadcast stations in the U.S., including 200 Clear Channel stations, make those programs available to listeners anywhere in the world, as well as to people who might not have a radio at work but do have a computer.

    “People use [Internet simulcasts] to sample stations they can’t get,” says Tom Webster, an analyst at Edison Media Research, of Somerville, N.J. That broadening of their potential audiences may help traditional radio stations offset any loss of listeners to Internet-only stations.

The Journal article mentions only webcasts from licensed broadcasters. There are also thousands of live webcasts available from unlicensed broadcasters, including individuals. Every chill out listening to Cryosleep (‘Zero beat guaranteed’)? As I write this, 179 people are, including me.