Chisholm States Why Charging For Newspaper Websites Is Self-Destructive

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

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

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

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

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

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

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

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

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

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

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

The Epochal Change That The Rise of Social Media Demarcates

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Citizen Journalism Absent in the Arab Press

My thanks to Dr. Khalid Mohammed Ghazi, editor of the Cairo-based Arab Press Agency, for citing some of my work in his editorial, صحافة المواطن.. غائبة عن الصحافة العربية (Citizen Journalism…Absent from the Arab Press), published on Wednesday in, among other newspapers, Al Shabiba of Oman. [Click the English title of his essay to read a Google machine translation of the Arabic original].

As Dr. Ghazi writes, Citizen Journalism is hugely missing from the Arabic speaking world! He notes Al Jazzera’s efforts to introduce it, using online and cable television broadcasts (the latter similar to CNN’s i-Report project), but that Arabic printed media lags far behind, even in Arabic countries where government regulation of media isn’t that big a problem. He writes:

“We believe that citizen journalism may have added a new dimension to the news process, allowing the average citizen a sense of the journalist and the curiosity and motivation to become a participant and an architect and not just the quest for truth only; but that citizen journalism in the world still faces some criticism in relation to the accuracy of news put forward through it.”

Arabic is the first language of nearly a quarter billion people and the official language of 22 countries in the Middle East and North Africa. Perhaps one reason for the low adoption of citizen journalism there is that Internet penetration is still relatively low, estimated at 29% (3.3% of the world’s Internet users). However, those percentages should rise this decade, and I hope that citizen journalism will become a staple of many Arabic countries’ media.

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.

The End of Newspapers and The Future of Information

La Fin des Journaux, by Bernard Poulet

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

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

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

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

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

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

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

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

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

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

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

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

Why Americans Who Don’t Use The Internet Don’t Use It

What am I supposed to do with an ethernet cable this short?
(Photo by Hyku / Josh Hallet, Flickr.com)

The Pew Research Center’s Internet & American Life Project just released an interesting report about, among other things,

The report, Home Broadband 2010, is nominally about how broadband adoption in the U.S. has slowed dramatically and if Americans think that affordable broadband should be a major U.S. government priority.

However, the survey results from the 21 percent of Americans who don’t use is the Internet is illuminating:

  • Approximately half of them don’t find online content relevant to their lives, so they do not go online.
  • Most aren’t interested in going online. Only one in ten say would like to start using the internet in the future.
  • Most aren’t comfortable using computers or the internet. Six in ten say they would need assistance getting. Only one in five know enough to start using the internet on their own.
  • Non-users of the Internet are actually less likely to use it if the government placed a high priority on the spread of broadband connections.

I won’t go into too many details here because you should go the Pew website and download the report (PDF).

Overall, broadband adoption has slowed dramatically in the U.S., except for  growth among African-Americans, which was especially high last year.

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.

Verizon and Google Connive To Control Internet Traffic

The Social Media version of Monopoly

The Internet Protocol hit the fan today, when Verizon, one of the largest Internet Service Providers in the U.S. and that nation’s largest mobile phone network, and Google, the largest Internet company in the world, released a joint proposal about how the Federal Communications  Commission should regulate Internet traffic.

Although this Verizon-Google Pact wasn’t signed on September 27, 1940, in Berlin by Chancellor Hitler, Italian Foreign Minister Ciano, and Japanese Ambassador Kurusu, if it is implemented, it could soon be as catastrophic to worldwide neutral use of the Internet as the simultaneous attacks on Singapore, Hong Kong, and Pearl Harbor were worldwide to commerce and to consumers in 1941.

The proposal has an Orwellian ring to it. It says that Internet service providers should treat all creators of Internet content the same, and should not be able to block them or offer any of them preferential treatment (i.e., a paid ‘fast lane’ on the Internet), but it makes exceptions with wireless Internet access and for potential new services that broadband providers could offer. According to The New York Times story about the proposal, news services such as “advanced educational services, or new entertainment and gaming options.” In other words, all Internet animals are equal, but some animals are more equal than others.

The decade we’re now in will see mobile phone wireless access become the primary way by which people worldwide access the Internet (i.e., all the world’s news, entertainment and information). All the world’s mobile phone handset manufacturers are now building the majority of products on the Apple iPhone or Google Android designs, equipped with the same Web browsing, email, and video downloading capabilities as desktop or laptop computers. More than four billion people worldwide now use mobile phones, meaning phones that now or soon will have full Internet access and be as powerful as today’s laptop computers.

If implemented, the wireless Internet access exception to the Verizon-Google Pact would allow Verizon and every other U.S. mobile phone network operator to delay or block content from any content creator 0r competitor and provide preferential treatment (a ‘fast lane’) to their own content or any content creator who pays them.

Likewise, the ‘advanced educational services, or new entertainment and gaming options’ exception would allow any broadband wire Internet Service Provider to to delay or block content from any content creator 0r competitor and provide preferential treatment (a ‘fast lane’) to their own content or any content creator who pays them.

Those exceptions are commercial loopholes the size of the Atlantic and Pacific oceans respectively.

Writing at GigaOm, Stacey Higginbotham notes that the proposal would also emasculate the Federal Communications Commission’s ability to ensure overall neutrality of any remaining Internet traffic, replacing it with a proposed “case-by-case enforcement” of violations.

You can be sure that whatever decision the FCC takes, its policy will be imitated by government communications agencies in many, if not most, other countries, worldwide.

Last week, the Cable News Network’s website published an opinion essay by the junior of the two United States Senators Minnesota, a long-time content creator named Al Franken. Under the headline Net neutrality is the foremost free speech issue of our time, Franken wrote:

“Net neutrality” sounds arcane, but it’s fundamental to free speech. The internet today is an open marketplace. If you have a product, you can sell it. If you have an opinion, you can blog about it. If you have an idea, you can share it with the world.

And no matter who you are — a corporation selling a new widget, a senator making a political argument or just a Minnesotan sharing a funny cat video — you have equal access to that marketplace.

An e-mail from your mom comes in just as fast as a bill notification from your bank. You’re reading this op-ed online; it’ll load just as fast as a blog post criticizing it. That’s what we mean by net neutrality.

But telecommunications companies want to be able to set up a special high-speed lane just for the corporations that can pay for it. You won’t know why the internet retail behemoth loads faster than the mom-and-pop shop, but after a while you may get frustrated and do all of your shopping at the faster site. Maybe the gatekeepers will discriminate based on who pays them more. Maybe they will discriminate based on whose political point of view conforms to their bottom line.

We don’t have to speculate. We can look to the history of the media gatekeepers for examples….

And it isn’t even strictly a political issue. The internet’s freedom and openness has made it a hotbed for innovations that change our lives. It’s been an incredible engine of job creation.

The internet was developed at taxpayer expense to benefit the public interest. If we let corporations prioritize some content over others, we’ll lose what makes it so valuable to our economy, our democracy and our daily lives.

My hope is that the Obama Administration’s FCC will resist the Verizon-Google proposal, and resist other major media or telecommunications companies’ attempts to paint the proposal as a compromise between public and corporate interests. It’s not a compromise, but a connivance to control what you get when on the Internet.

Meanwhile, the ironic synchronicity of someone inventing an Internet version (above) the capitalism board game Monopoly must be noted. Timing indeed.

Regarding Academic Research and Fatuous Reporting About Trouble Media Industries

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

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

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

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

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

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

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

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

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

What a splendid example of fatuous retorting of fatuous reporting!

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

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

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

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

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

OECDnewspapers
2007-2009 declines, by percent

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

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

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

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

The Media Academic Research Treadmill

Several hundred media professors will converge on Denver, Colorado, this week for the annual conference of the Association for Education in Journalism and Mass Communication. I won’t be among them (I’ll be at the Mayo Clinic in Minnesota, where my fiancé is undergoing treatment).

I teach New Media at a leading school, so probably should (were not my fiancé ill) go to the AEJMC conference. I’d learn more about my profession, meet my peers, and probably learn how to teach better.

However, I’ve no interest in attending AEJMC. The reason was best described by Earl Wilkinson, executive director of the International Newspaper Marketing Association (now the International News Marketing Association) who attended the 2002 and 2003 AEJMC conferences. One of his motives for attending was to tap “into the academic research that is largely unknown by newspapers executives. I was a very strong motive.” While attending, Wilkinson found AEJMC to be an organization of academics with passion for what they teach, with a sense of fraternity that he wished newspaper executives could emulate.

“Yet my original selfish motive missed the target. What I found in the piles of academic papers laid out … was a lot of well-intentioned research that had little applicability to the realities of the newspaper industry. During the past year, we have gone through literally thousands of AEJMC abstracts at the Michigan State University archive and found a similar result.

“What we found, to put it bluntly, is academics talking to other academics — which is a noble form of communications, unless division after division, committee after committee didn’t also express to me their profound desire to help the realities of the newspaper industry. As I reported to the INMA Board of Directors last year, about 2 percent of of the research being done is applicable to the business of newspapers and you must have incredible patiences finding “leads” to the stories in that 2 percent.”

The words I quoted Wilkinson spoke in a presentation to the 2003 AEJMC conference. In that presentation, he mentioned the newspaper industry had just survived the toughest recession since the Great Depression and greatly needed practical research.

Seven years later, the news industries have just survived an even greater recession and greater declines and challenges. The media industries are screaming for practical research. Yet I’ve found nothing has changed from what Wilkinson found in 2002 and 2003. The vast majority of academic research has no value to the media industries.

Some academics might reply that much of their research is aimed at better teaching students to work in media, not helping the media industries themselves. My retort is that those students might not have industries to work in unless someone performs practical research to solve those industries’ problems. No one is more able than academics to do that research.

Medical schools, engineering schools, and law schools do research that solves their industries’ problems and advances the practices of those industries. If not 98 percent of media schools’ research should do that, then at least the majority of the research should. Not a mere 2 percent.

Singaporean TV News Coverage


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

The Placebo Called Convergence

Part One

Crosbie’s Manifesto – Part Two

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Part Three

An ‘Unnatural’ Conference About Online Media Business Models

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

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

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

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

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

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

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

Here is the program:

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

The Greatest Change in the History of Media

by Vin Crosbie

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

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

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

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

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

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

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

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

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

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

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

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

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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The Experts about Individuated Media