Category Archives: Newspapers

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.

The Greatest Change in Media Made Newspapers Obsolete

I’ve overwhelmingly tempted to quote words written for the Michael Corleone character by Mario Puzo and Francis Ford Coppola in their 1990 movie and novel The Godfather III:

“Just when I thought I was out… they pull me back in.”

Except that I’m no gangster, and I’ve somehow always expected to get back into blogging.

During 2008, however, I’d come to the conclusion that my time spent blogging, twittering, or interacting in other casual and small ways with people online was counterproductive to solving the serious and huge problems nowadays facing the news industries — the focus of my professional consulting and teaching work.  I reasoned that, like anyone else, my waking hours each day are limited, so blogging or twittering about la question de jour, and responding to blog comments, and getting involved in the casually chattering echosphere that much of Social Media has become, erodes my time to work on full solutions to the huge problems.

Many aficianados of blogging and twitter will assert that those practices are, are becoming, or will be, integral to solving the world’s great problems. Ask why, and most of those aficionados will be at a loss to tell you (except that it must be true because they do it?) More probative digerati will raise the premise of the Wisdom of Crowds. I’ve other friends who think that  major problems can be solved through Samoan Circles and other novel or New Age means. I understand all the threads of promise in those premises, but I think that in everyday practice they tend to unweave and distract more than they sew.

Whether online or in person, if people from the problemmed industry assemble and talk, they’ll almost certainly progress no further than the latent conventional wisdoms that led and keep their industry in the problems. I teach my university students that the Wisdom of Crowds can help reveal truth but it can just as easy sustain falsity ((go ask the bloggers who still maintain that Elvis lives, that extraterrestials live among us, or that Saddam Hussein’s regime in Iraq had something to do with the September 11 Attacks). The ball & chain of Groupthink is just as prevalent, if not more, in Samoan Circle exercises than in corporate boardrooms. History clearly shows that breakthrough solutions arise from one or— at most— a remarkably small number of people who aren’t in power delving very deeply into the problems, rather than any large groups of people throwing ideas onto their chalkboards and seeing which proposed solutions might stick (hint: what sticks most often isn’t a solution) or any assemblies of the people under whose managements the problems occurred.

What block formulation of solutions at industry and academic conferences, Samoan Circle exercises, and on most of the blogosphere and twittersphere, are latent conventional wisdoms. Conventional wisdoms are generally defined as concepts and ideas that are generally accepted as true by the public or by experts in a field. Conventional wisdoms are difficult enough obstacles to overcome, but even more intransigent are latent conventional wisdoms — concepts and ideas to which people don’t realize they adhere. (For example, ‘Newspapers aren’t working in print, so how can we create newspapers online?’ in which the concept that the package of information known as a newspaper must be transplanted and maintained is the latent convention wisdom. Likewise, many newspaper journalists fear that the demise of newspapers may mean the end of journalism. Their latent conventional wisdom is that newspapers — journalistic vehicles that have evolved over centuries — are the best of any possibly means for journalism.)  The solutions to any serious, huge problem requires thorough analyses that delve to any root of the problem and doesn’t become seduced by either la question du jour or latent conventional wisdoms.

Moreover, most of my waking hours nowadays are devoted to teaching. I believe that I can have more affect solving the news media industry’s problems if I teach tomorrow’s leaders, rather than spend time casually blogging, tweeting, and otherwise interacting with the industry’s current leaders (very many of who are contributors to the problems). Call me cynical but, based on my experiences, I place more hope in the future than the present. Provided that tomorrow’s leaders aren’t taught today’s leaders’ latent conventional wisdoms, hope abounds.

Thus in 2008 I largely quit blogging. (I say largely because I’d occasionally post something about the death of colleagues, or twice a year post the syllabi for the university courses that I teach, so that professors at other universities can see those.) Indeed, I stopped blogging despite having posted the first parts of a series of essays in which I proposed the real root of the problems in the newspaper industry and was about to propose the solutions.

Because the newspaper industry’s huge problems require full explanations and detailed solutions, I refrained from blogging but continued writing towards the solutions. I intended to refrain from publishing until I was finished in full and detail. At nearly 20,000 words, in several sections, my work isn’t yet finished. I hope it will be this summer (Northern Hemisphere). I plan to publish it not in the form of a printed book but as either its own Web site or the major part of this site.

Yet I now realize that though my premise that blogging, twittering, and otherwise engaging in small interactions are huge distractions from solving huge problems is correct, my avoiding those small interactions helps only to make those problems worse, if even in small ways. There are things from my unfinished writing that I should be contributing to my industry’s discussions, even if my contributions are only in the forms of blog posts, short essays, or tweets. I should be contribute to prevent, wherever possible, my industry’s errors or drift.

Hence, I resume.

My unfinished writings focus on the one root cause of the media industries problems nowadays and how that root cause also contains the materials from which comprehensive solutions can be constructed.  My larger work will detail that root cause, but my semimonthly Digital Publishing column at ClickZ.com on Friday briefly described it (I’d initially titled the column, The Greatest Change Made Newspapers Obsolete, but this root cause affects all media industries).

That ClickZ column begins:

Ask most people who think of themselves as new media experts what the greatest change in the media has been in the past 35 years, and you’ll hear such answers as ‘the Internet,’ ‘social media,’ ‘search engines,’ or ‘iPhones.’

They’re wrong.

The greatest change has been that people’s access to media has changed from scarcity to surfeit. It’s an even bigger change than Gutenberg’s invention of a practical printing press, the invention of writing, or even the first Neolithic cave paintings. It’s the greatest change in all of media history. And it occurred in only 35 years — half a human lifespan.

This unprecedented change (in effect, a reversal) in the balance of Supply & Demand for information is totally reshaping the media environment.  It’s why so many major daily newspapers in post-industrial countries are going out-of-business; why listenership and viewership of general-interest broadcast stations are eroding and their network affiliation structures are beginning to implode; why the numbers of sales of musical albums and of tickets at cinemas are declining; and why consumers, rather than publishers and broadcasters, are not only taking control of media but redefining how prices are set, what local and community mean, how news is packaged, and how advertising will be done.

None of that should create problems for industries that want to adapt to this change, and adapting to the change creates more efficient media for consumers and publishers and broadcasters and marketers. The problems arise because most components of the media industries don’t want to adapt. They don’t want to adapt because doing so requires systemic changes, rather than cosmetic changes (such as ‘convergence’ or repurposing of existing content), and also because these industries’ senior executives are either too myopic to see the change reshaping the media environment or else too fearful that their stockholders will begin to realize it was obviously these same senior executives’ lacks of foresight that led their companies into the problems (or, as Einstein once said, “We cannot solve our problems with the same thinking we used when we created them.”)

If the unprecedented change in the balance of Supply & Demand for information — from scarce supply to surfeit supply or even information overload — is the root cause of the problems that media industries now face, how does the root cause contain materials from which comprehensive solutions can be constructed?

The solutions lay in understanding how this change affects pricing, packaging, the power balance between content providers and consumers, and even subjects such as what is local or what is community.

For examples, anyone who’s ever shopped in a bazaar, a flea market, or a souk knows how Supply & Demand affects power balancepricing and packaging. When something is scarce but in demand, its seller has more power over the transaction than the buyer does. The seller controls the price and packaging (‘If you want that, you also have to accept this,’ etc.) of the transaction. But when something is in demand but is surplus, then the buyer has more power over the transaction than the seller does. The buyer controls the price and packaging. All this about Supply & Demand is just as true in the media industries’ markets as in souks, flea markets, and bazaars. Few executives in the media industries understand this. They fail to understand why consumers who online nowadays have access to the contents of every news organization in the world won’t pay for the package of information (much of which is international and national news) that those same consumers would pay in the past when its printed version was their only available source of that content.

Moreover, very few media executives understand how Supply & Demand affects the definition of local news. When daily changing information in text format was scarce, the sellers of that information — newspaper publishers and their editors — controlled how local was defined. For the convenience of their businesses and practices, they defined local to mean their town or city or metropolitan  or some similar single geo-demographic area. However, nowadays as consumers have gotten access to more sources of information — including local news via local bloggers and local news operations that are being started in those localities — the definition of local is beginning to shift out of the publishers’ and his editors’ hands and more into the hands of the consumers. (Control hasn’t passed the fulcrum point into primarily the consumers’ control, but it is becoming shared control rather than be unilaterally controlled by the publishers and editors.) Consumers have begun redefining local to mean something much more local than how the publishers and their editors defined the term. Consumers are refining local to mean something that those publishers and editors could understand by the terms hyperlocal or microlocal news.

I’ve compared usage logs from news sites that offer local news offered according to the publishers’ and editors’ definition and that being offered by hyperlocal/microlocal sites. The latter are much more popular among consumers than the wider geo-demographic definitions that the publishers and their editors had used. And why not? What occurs closest (i.e, on their street, in their neighborhood, along their commute)  to consumers’ life  is what interests them the most.

I’ll be blogging bits here and there about my larger thesis. I’m not resident at Syracuse or Rhodes universities (I’ve been teaching at Rhodes earlier this Spring and will again in late July and August, and teach at Syracuse the rest of the year).

Φ

Speaking of academia, during a faculty meeting last year at a media school I know, a question arose about whether or not to teach students a course in numeracy. Because media professors tend to possess more verbal than mathematical talents, it wasn’t surprising that the question was voted down. One veteran professor who teaches writing noted, “Our incoming freshmen already have high test scores for math, so we don’t need to teach them that.” I bit my tongue and decided not to respond by noting that those incoming freshmen also have high verbal test scores and thus, according to that professor’s logic, the school shouldn’t need to teach them to write. However, I showed the faculty a copy of John Allen Paulos’ 1997 book, A Mathematician Reads the Newspaperand mentioned that so many journalists are innumerate that there’s actually a book written about the problem.

I thought of that today when I today read an Editor & Publisher magazine story about how, despite salary freezes, the average salary at U.S. newspapers was actually rising and last week when I read a posting on the Newspaper Association of America’s Web site noting how subscription churn rates at those newspapers has markedly declined. Both those stories appear to be positive: salaries are rising at U.S. newspapers despite layoffs and salary freezes and subscription churn rates have declined a lot. However, do the math:

  1. As newspapers let go of their more marginal staffers and keep their more essential—presumably more veteran—staffers who are paid more than the marginal staffers, then mathematically the average wage at newspapers has to rise. The mathematical function is fairly obvious: as newspapers reduce all of their department staffs until only the most integral remain, the remaining staffers are likely to be those higher paid because they indeed were integral. Thus, staff reductions tend to increase the salary average. If the publisher were to let go of everyone but himself, you’d see a whopping increase in the average salary.
  2. Likewise, as newspapers’ circulations continue to decline, subscription churn will decline because those newspapers are losing so many marginal subscribers that only the most loyal are left

No surprises, except to the innumerate. Nevertheless, these types of stories get publicity because they superficially seem like good news amid all the bad. The industry associations’ public relations departments spin out press releases touting these ‘good’ things — one can’t blame the PR departments for that: it’s their jobs —and the journalists who report about the industry delve any further than that into what the numbers mean . Indeed, public relations departments often rely on overworked trade journalists not delving beyond and instead taking the ‘good’ spin verbatim.

PaidContent.org was where I first became aware of the story about the average wage rising at U.S. newspapers. It’s the site I use most to find news stories about the New Media business. It’s unusually competent because its staff of journalists most often does delve beyond the spin in press releases and reports issues by the public relations departments of media companies and trade associations.

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Speaking of competency or its lack, in a backhanded remark one year ago May, I disparaged the Newspaper Association of America’s annual Connections conference about New Media. I was incompetent doing so. I was commenting on one of PBS’s Web blogs about why I’ve largely stopped attending the annual New Media conference that Editor & Publisher and MEDIAWEEK magazines hold, and I made a remark about NAA’s Connections conferences (now know as MediaXchange) being even worse. I soon received an e-mail from Randy Bennett, the senior vice president of business development at NAA, who wrote:

I read your comment on the Mediashift blog about NAA’s interactive conferences being worse than E&P’s event, and, presumably others.  I was dismayed by your evaluation given that you have not been to the NAA event, as far as I can tell, in several years.  At minimum, a guy like you who champions the truth should have disclosed that, in fact, you had not attended an NAA interactive event recently and that your judgment was based on, perhaps, previous experience from several years ago or from hearsay.

I certainly don’t begrudge any criticism (although your comment was not particularly constructive), but in a public forum I would expect that you would have been more forthcoming about your perspective.

He is entirely correct. I hadn’t been to the Connections conference in several years and so shouldn’t have been judging whether it was better or worse than another. I didn’t respond to Randy, instead meaning to post a correction (what I’m writing now) here that day or the next. However, by happenstance that May was when I basically stopped blogging for the 19 months .

Now that I resume blogging, it’s only right that I post that correction now, albeit unconscionable a year late!

Moreover, Bennett is one of the most competent executives in the U.S. newspaper industry. For some reason, he and I never really quite got along (perhaps it was my strong personality or because since 1995 I’ve been very critical of the U.S. newspaper industry’s path). But make no mistake: he’s done phenomenal work over the years, despite the titanic forces of change that have gone against his industry. While working in Africa earlier this season, I was dismayed to hear about the NAA cutting almost half of its staff, but I was glad to hear that he was not among those cut.

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An American Daily Newspaper Commits Suicide

There really is no other way to headline this. I am watching a once great newspaper commit suicide.

The San Francisco Chronicle‘s weekday circulation recently dropped 16.4 percent. The Chronicle’s decided to cut 100 of its 400 remaining newsroom jobs.

When a product’s popularity drops that much in a single year, in what other industry would executives decide to continue producing the same product but with even less substance to it?

I’ve seen newspapers shoot themselves in the foot, but never before in the head.

[By the way, a few days ago I wrote about Jon Fine‘s speculation that The San Francisco Chronicle should stop printing and distribute news online only. I suggested that a much more likely cost-cutting measure would be for that newspaper to outsource its printing. What I didn’t know at the time (and I suspect Fine didn’t either) is that the Chronicle has already signed an agreement to outsource its production to a third-party printer. Alan Mutter‘s blog brought it to my attention. The outsourcing deal will cost the jobs of 230 unionized press operators when the new plant opens in 2009. When this outsourcing contract was signed, I wonder how large a newspaper the Chronicle‘s executives thought they’d be producing in 2009?]

Web 2.0? How about first Web 1.0?

Today in Ad Age, Steve Rubell of Edelman’s Me2Revolution public relations practice and Micropersuation, takes newspapers to task for not adopting ‘Web 2.0’ collaboratation techniques.

To thrive in the future, the newspaper will need to use the web to turn itself into a 2.0 platform where readers and advertisers working together (not journalists) create most of the value.

Well, I’m still waiting for newspapers to adopt ‘Web 1.0’ techniques such as using hyperlinks within news stories. If bloggers, teenagers on MySpace, scientists, sports fanatics, pornographers, hobbyists and others who publish websites can embed hyperlinks in what they write, why can’t journalists and professional publishers?

Shovelware from print is why. Despite a lot of corporate public relations blather about merging print and web newsrooms or about the future importance of interactive, most news media companies still have the newsprint mentality online. They don’t think in ‘Web 1.0’ terms, nonethless ‘Web 2.0′.

Not only don’t they embed their stories with hyperlinks to other companies’ or organizations’ stories, but they don’t even embed hyperlinks to their own reporters’ source information or their own previous stories about the topics. They should have learned to do that and more in the 1990s.



Almost a week has passed since the American Press Institute presented the second phase of its Newspaper Next project. Upon reflection, I’m even more disappointed with it than I’d earlier wrote. I am friends with many of the people involved, but, please, if that industry didn’t already know that it’s role is to solve consumers’ ‘jobs to be done,’ then there is something very wrong with that industry. Yes, it helps the industry understand that it produces a service for consumers, not a printed product. But I’d expected much from what API heralded as ‘An Historic Moment for Our Industry’ and a ‘Blueprint for Transformation.’



When I google the name of my friend Dick Satran, with whom I worked at Reuters, I was reminded of Satran’s Algorithm. Here is Wired‘s explanation of the algorithm, in an article about a designer’s work on the Reuter building in Manhattan:

Ed Schlossberg’s next big thing is the Reuters News Index, an addition to the sign that debuts in 2003. Roughly every hour, a 304-foot thermometer will appear onscreen measuring how “hot” the news day is on a scale of zero to ten. Schlossberg hopes it will inspire people on the street to turn to each other and say, “Did you see that? The News Index just shot up to 6 degrees — what have you heard?”

The Index is calculated using Satran’s Algorithm – developed by Reuters and R/GA, and named for veteran Reuters editor Dick Satran. Every 15 minutes, the formula crunches four data points: the total volume of stories filed from Reuters’ 200 offices in 97 countries; the number of priority one and priority two stories filed (editors assign a priority code to each report coming off the Reuters wires); and the total number of Reuters.com hits logged in the previous 15 minutes. At one early meeting with Reuters editors, ESI design manager Gideon D’Arcangelo recalls, “one of them said that if we really wanted to make the index true to life, we ought to factor in the blood pressure of Reuters editors, too.”



I live in Greenwich, but it’s the American town at 74.5°W not the English one at 0° longitude. I’m thus amused to find myself listed by the Press Gazette, the trade journal of U.K. journalism, as among the people…

“…who are the ‘ new establishment’ of online journalism in Britain? Who are the people shaping the latest developments in bringing journalism to new digital platforms?”

I’m not the only American on the roughly 40-person list: Neil Budde of Yahoo! News, Dan Gillmor, Matt Drudge, Jeff Jarvis, Craig Newmark of CraigsList, and the founders of MySpace are there, too. It’s been a very long time since anyone listed me as a member of the ‘establishment’ in my own country. Should I emigrate?

Today’s Watch List: 26.06.06

Among the items on our watch list today are:

  • Reuters reports that consumers will soon be able to buy songs as they listen to them on digital radio in the United Kingdom. UBC Media, which is the largest independent producer of radio programming for the BBC, will begin testing the technology on one of the Chrysalis Group’s digital radio stations in Birmingham at the end of July and that the service will also be available on digital-radio enabled mobile phones later this year. Consumers would pre-pay for songs using a similar credit plan to that commonly used for mobile phone calls.
  • The Internet’s market share of advertising in the U.K. reached 7.2 percent, according to the Advertising Association, as reported in the Guardian. Of the rest, newspapers accounted for 45.3 percent, television 25.4 percent, direct mail 12.5 percent, outdoor advertising 5.5 percent, radio 3.1 percent, and adverts in cinemas 1 percent. However, if you remove classified advertising and just count display ads and commercials, television had with largest share (35.2 percent), newspapers 31.8 percent, direct mail 17.3 percent, outdoor 7.6 percent, radio 4.2 percent, Internet 2.5 percent, and cinmea 1.4 percent.
  • Editor and Publisher today reports about a panel discussion held Monday in Manhattan on the topic of “Online Media and the Future of Journalism.” (A topic in vogue this month.) Its panelists were Slate founding and former Editor Michael Kinsley; Time Inc. former Editor in Chief and Wall Street Journal former Managing Editor Normal Pearlstine; Slate current Editor Jacob Weissberg; HuffingtonPost.com co-founder Adrianna Huffington; and author and New Yorker magazine writer Malcolm Gladwell. Gladwell likened the problems of the U.S. newspaper and airline industries:

    “The airline itself never makes any money, but everyone else connected with flying makes tons of money.… Airlines have got to be a bit better at pricing their services, and so should newspapers.”

    Gladwell generally is a competent researcher and incisive writer, but I think he missed some subtle differences between those two industries. Foremost among those differences is profit. The U.S. daily newspaper industry earned more than $45 billion in revenues last year; had a profit margin average of 18 percent; and generated more than $8 billion in overall profit. By comparison, the U.S. airline industry last year had $571 billion in revenues than newspapers and a net loss of $4 billion (a negative seven-tenths of a percent profit margin). Another difference is that U.S. airline ridership increased by about 4 percent last year, while U.S. newspaper readership declined by about that same percent. So, Gladwell’s point makes no sense; but how like a writer to think that pricing content higher would cure the newspaper industry’s problem!

  • Speaking of Slate, on Saturday its media columnist Jack Shafer wrote a column, entitled The Incredible Shrinking Newspaper, with which I entirely agree. I’ve little sympathy for newspaper executives who are suddenly shocked that there is their industry is in dire straits. I and others have been telling them for years that it would happen around now. As Philip Meyer, journalism professor at the University of North Carolina and author of The Vanishing Newspaper: Saving Journalism, recently told a Reuter reporter “They’re kind of frozen at the wheel because the money is still coming in.” I think the Rime of the Ancient Mariner is more like it. About time they finally noticed the albatross around their necks.
  • Spain’s El Pais becomes the second major European daily to launch an edition for Sony’s video-game device, Playstation Portable. Norway’s Dagbladet was the first back in September 2005.

Today’s Watch List: 9 May 2006

· I’m a former Reuter staffer who knows the possibilities of ‘citizen journalism.’, Nevertheless, I can’t understand Reuters jumping on the ‘citizen journalism’ bandwagon and its deal with Global Voices. Perhaps Reuters is doing it for the publicity? Reuters might get some story ideas from Global Voices and Global Voices might get objective source material from Reuters, but it all seems like log rolling (would blogrolling be a better term) for both parties. Mark Glaser of PBS MarketShift reports on the alliance. [By the way, lest anyone think that Reuter without the s is a typographical error, please note that Reuter company policy was that Reuters is the name of the company but that Reuter was its adjectival name. A former Reuter staffer is thus someone who had worked for Reuters in the Reuter Building. Go figure.]

· Speaking of Glaser, he published a good interview with I Want Media Publisher & Editor Patrick Phillips last week.

· Also last week, Brier Dudley of the Seattle Times coined an apt analogy:

But I wasn’t so sure after seeing Google and Microsoft address the newspaper industry’s top leaders last week at the American Society of Newspaper Editors conference in Seattle. It was like watching the Incas greet the Spanish conquistadors in 1528 — the leaders of a proud, ancient civilization were dazzled by the technology of newcomers, who were coming to haul off their gold and silver.

The galleons are coming for advertising that Internet companies are using to build their empires.

Google News product manager Nathan Stoll and Bill Gates played the part of priests who came along to enlighten the savages. “We’re trying to be technologists who help publishing online be a better business model,” Stoll said.

Display tools that Gates demonstrated may be key to newspapers’ future success. He also told editors that Microsoft technology can protect their content from unauthorized copying and distribution.

Not mentioned were Microsoft’s plans to scoop up a huge piece of the advertising pie. One floor down at the Seattle Westin, planning was under way for a far bigger conference this week, when Microsoft is bringing major advertisers to town to learn about its new advertising platform.

Newspaper baron Dean Singleton played the role of optimistic Incan nobleman, saying it will all work out if his people can get their hands on a musket. Or maybe cut a deal with the invaders.

· Not in Incan lands, but the northern reaches of what used to be Aztec territory, business-to-business magazine and trade journal publishers were having their own confrontation with new-media. the trade association American Business Media’s spring meeting was underway in Scottsdale, Arizona. Said incoming chairman of ABM and president-CEO of VNU Business Media Michael Marchesano said:

“We are truly at a crossroads. … As an industry, we can resist these changes and let our editors play the role of ‘parent knows best’ by dictating content. … Or we can empower them to think differently and to be part of the process of creating communities and building networks.”

· Finally, we’re glad to see that the Cellular Telecommunications & Internet Association, the trade association of U.S. wireless network carriers, has launched the Common Short Code Administration site. The CSCA site registers U.S. mobile phone short codes much as Network Solutions has for Internet domain registrations. If you’re a publisher or broadcaster who wants provide consumers with mobile phone short codes that work with all U.S. mobile carriers, get the codes from CSCA. It even has a nifty lookup function to see availability.

R.I.P: Gibran Tueni (1957-2005)

gibran.jpg

Gibran Tueni, 48, publisher of al-Nahar daily newspaper, member of the Lebanese parliament, and the World Association of Newspaper’s board member for Middle East Affairs, was assassinated this morning in Beirut.

An outspoken editorialist against Syrian involvement in his country, he had recently returned to Beirut after fleeing to Paris for his safety, along with a number of other anti-Syrian Lebanese, in August.

Mr. Tueni’s armoured automobile was travelling on a mountainous road through the Christian-dominated Mekallis area of eastern Beirut during this rush hour this monring when a bomb it off the road and sent it rolling down a hill, according to the BBC’s reports and photos.

In June, one of Tueni’s newspaper columnists, Samir Qasir, was killed by a car bomb in Beirut. Two other Lebanese journalist who had criticised Syrian influence in Lebanon have been killed since the February 2005 car bomb assassination of former Lebanese prime minister Rafik Hariri

Mr. Tueni was a WAN Board Member for 10 years. In the mid-1990s, he received that organization’s ‘Award for Publishing Achievement’ for his courage and perseverance in publishing his newspaper throughout the Lebanese civil war. He was for many years a leading member of the WAN Press Freedom Committee and participated in press freedom missions to China and Algeria, among others.

He leaves a wife and four daughters, including twins just a few months old.

How to Diminish Online Readership

Less isn’t more. Forcing people to register to read newspaper Web sites that simply shovel online generic content from printed editions will only diminish the number of people who will use those sites in an era when diminishing readership should be the last thing that any newspaper operation will do.

Those sites are using registration as Bandaids™ to cover their failed previous strategy of hoping that gross sales of banner ads would adequately subsidize their formerly gateless sites. Their thinking is that maybe advertisers will pay more for ads if given better demographic information about the sites’ users. That’s true in principle, but there nevertheless are two problems with this new strategy:

First, these sites’ core problem is infrequent use. Printed newspaper readership is steadily shrinking, but at least that readership reads long and frequently. A survey two years ago by the Readership Institute of the Media Management Center at Northwestern University reported that the average user of a printed newspaper in America reads the paper 3.4 times per week (14.7 times per month) and spend an average of 28.2 minutes doing so each time. By contrast, the average users of the average American newspaper’s Web site visits only 2 to 4 times per month and spends less than 35 minutes total there all month, according to Nielsen//Netratings and to ComScore Media Metrix.

The sites that are going force registration will ironically increase their average user statistics — but only by sifting out anyone who’s less than a fervent reader of the site. Imagine a newspaper company saying that it will only give a reader a printed copy if that user first identifies and provides some demographic information about himself!

The core problem is usage, not advertising demographic statistics. If usage were much more frequent and longer, advertisers would be attracted. According to the Forrester Reseach report News Destination Sites are Dead Ends, 49 percent of North American online consumers have never visited a newspaper Web site. If most newspaper sites force user registration, that percentage will grow worse.

Second, speaking of advertising demographics, is something that Jim Wilson recently noted in a response to a Poynter Institute E-Media Tidbits item about How to Appease Registration Opponents:

    Here’s why registration won’t ultimately work: because most newspaper websites won’t hire anyone to study the mounds of data that will be collected. If the data is not studied, parsed and then boiled down for use by salespeople to help make more money for the site, what GOOD does registration actually do? Very little. Some could argue it lets people get customized weather forecasts or movie showtimes. BIG DEAL. The reason we keep hearing for sites to do registration is to make money. How do you make more money with registration? You have sales people target specific advertisers based on user data. How do you figure out that data? You hire someone to analyze it. Someone please name me one newspaper site that has hired a full-time person (that is what it would take) to do this. PLEASE!!!

Our guess is that newspaper Web sites will at least use the gathered data to compile aggregate demographics about users, much as printed magazines and TV now do. Yet that’s a rather lame mass media advertising strategy for interactive media vehicles such as Web sites. The gathered data should be used individually to deliver to each user whatever stories and advertising fits that individual user (see above).