10 Questions with Rafat Ali

PaidContent.org LogoPaidContent.org is the premier aggregator of news about where the money’s going in media. If media is your business, you really need to be reading PaidContent.org, because more than any other observer of trends in media, this site follows the money. The subscriber list of its newsletter is likely a who’s who of all media.

Rafat AliPaidContent is flagship of the ContentNext network, founded by journalist Rafat Ali in 2002. ContentNext’s news sites chronicle the economic evolution of digital content that is shaping the future of the media, information and entertainment industries. It is based in Santa Monica, California.

Prior to developing his company, Rafat was managing editor of Manhattan-based Silicon Alley Reporter,” where he covered the Internet and tech sectors.

In 2003, Editor & Publisher referred to Ali as, “journalism’s poster boy for career independence from news companies,” and CBS MarketWatch called him “a pioneer in using the Web for an almost real-time business news feed.”

I’ve known Rafat for several years. We’ve both sort of evolved together as the disruptive innovations spawned by the personal media revolution and the internet have relentlessly hammered at the business model of contemporary media. He’s one very smart cookie, and I’m proud to call him a friend. He graciously agreed to answer 10 questions via email, and I think you’ll find his answers insightful and provocative.

TERRY: How has the mission of PaidContent.org changed since you first began the site?

RAFAT: Well, there wasn’t a mission. I started the site in 2002, in the middle of the recession, as a way to raise my own profile as a journalist, an interactive resume of sorts to get a job. I wasn’t out of a job, but the Internet news media company I was at was about to close down. And now, we’re a trade media company with about 20 people…so the mission, if there was one to start with, has completely changed. Thats on a personal level.

On a coverage/focus level, the site started covering the (then) trend of online sites charging for content (hence the name “paidContent”)…at that time WSJ, Salon, TheStreet.com, NYT (for crosswords) and others started a trend. It didn’t last as the economy and online advertising made a comeback. So since then, our coverage/focus is now reporting and analyzing all the ways in which content gets paid for, whether premium or ad-supported, or any other hybrid. That’s how we’ve kept ourselves relevant.

TERRY: The very name of your company seems to suggest that content and money are forever linked. Have you ever had second thoughts about that given the commoditization of news and information that’s taken place in the last few years?

RAFAT: No, as commoditization happens, companies need to try more and different ways of monetizing their content. In all this fear and confusion, we become even more pertinent, as the premier chronicler of all the efforts happening out there, the ones working, and the ones not working. Also, the definition of what’s content, news and information has broadened, and media and news companies are taking note and trying everything. Commoditization begets innovation, or at least begs innovation.

TERRY: You’ve been following the money for a long time, Rafat. Where was it headed when you first started PaidContent.org, and where is it headed today?

RAFAT: I think the first answer touches on this…when I started, it was about getting money directly from consumers…now it more advertising driven, and in pockets where it is not yet, it will. For instance, on mobile content sites, the first wave until recently was about consumers paying for everything. Now, ads are beginning to creep in, some good and some bad, but at least moving the debate forward. The other thing that’s happening is that money is heading online, and then online, trickling down the tail. The top portals still command a huge majority, but newer and smaller sites or blogs are also getting ad revenues. The money spend will continue to get diffused, and that creates all kinds of opportunities, both for media companies to start new efforts, and also for aggregators and filters to come in and sort all this diffusion out.

TERRY: You do a very good job of keeping your opinions to a minimum, but for the next few questions, please feel free to express. You’ve been a professional observer of media trends from a unique perch. First, do you think mainstream media companies can maintain growth without diversifying?

RAFAT: No. The cost of diversifying is dropping, so the excuses for not doing anything because of prohibitive costs are gone now. Some companies consider M&A as their diversification strategy, but once you “buy” diversification and innovation, then what? If that isn’t bringing in a thread that goes across the whole company, and instead is in a “new media” ghetto on its own, that doesn’t serve the purpose. Synergy, an oft-beaten word, doesn’t just have to be a business jargon…it can be innovation and ideas as well.

TERRY: Who’s the prototypical new “media company” and why?

RAFAT: I am answering the “what”, not the “who”. Where it comes from the top. Really. A CEO who believes and understands the fundamental shift in media consumption patterns is the one who then brings in the new media ethos to the rest of the company. New media isn’t about the medium, it is about the people taking advantage and building on top of that new medium…that is why we obsess over people and executive movement within companies.

Now to the who: Five years ago you would have said CNET Networks. Now, there isn’t any definitive one…Facebook, maybe, but is too early to judge. Reuters, maybe, but with Thomson-Reuters merger, it would be a very tough integration of cultures after the merger gets approved. Some could argue some Murdoch has it all in his head, but it could all unravel if the Dow Jones buyout doesn’t go well.

TERRY: What’s the smartest move by a mainstream media company that you’ve witnessed in the last few years?

RAFAT: News Corp buying MySpace….not for that move itself, but for what it meant for the rest of the media industry, as everyone else woke up from the slumber and kick-started their own “social media” efforts. Irrespective of whether any of this will create long term business value on a company level, it will certainly raise level of efforts and debate.

TERRY: Media company investors, who want a return NOW, are different from tech company investors, who seem more willing to ride with a longer runway. What’s your view of this, and do you ever see a time when the two become one?

RAFAT: The two already are converging…media companies are opening up new media R&D labs or divisions. NYT & Co has one, Dow Jones has one, NBCU just opened one. Then the strategic venture arms of media companies are ramping up again, though one would have thought tighter integration with the main companies.

These new efforts are lower cost than anytime previously in history, but even then, they need a longer time frame. Media companies that are private have a longer leash…for public companies the scrutiny becomes too bottomline driven.

TERRY: Follow the money shifts and paint your vision for 2012 for media companies.

RAFAT: A media company is increasingly user and data driven. On one hand, consumers want more customization and data (for say a business media company). On the other hand, advertisers want more data in return for their money spend. The money will shift to the point of consumption, as it becomes more diffused. If companies can reach users where they are, manage the diffused chaos, and balance these tricky divergent issues, they will survive.

By 2012, we will see some of the news services companies survive…newspapers may not. You’ll see a lot more entrepreneurial journalism coming out from individual journalists. Smart media companies will work with them, or buy them out. There wouldn’t be separate sections for text, audio and video on websites…it would all be one stream, with multiple elements in each story.

TERRY: You write a lot about major media companies, but what about the television station in Abilene? What do you see for them?

RAFAT: If they can rise above the sweeps-journalism, maybe. Would any of the TV stations ever be able to cover the issues like say the way HBO show “The Wire” portrays urban decay and life on the street? For the local stations, it is and will always be about the issues, and driven by editorial focus. This is me as a journalist and community member speaking. On a business level, I don’t have an answer. Really, I don’t. It is tough as hell.

TERRY: What segment of the whole media industry is in for the roughest ride in the years ahead?

RAFAT: News media, and the journalists producing that news. No doubt.

Comments

  1. invitedmedia says:

    wow! two great guys on the same page!!!

    unless (of course) safran is also on this page because of the newsletter.

    then that would bring the number up to TWO.

  2. invitedmedia says:

    (just kidding guys!)

    keep up the great work!

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  1. […] 10 Questions with Rafat Ali (thepomoblog.com, Terry Heaton) Ein E-Mail-Interview mit Rafat Ali, dem Betreiber von paidcontent.org. “PaidContent.org is the premier aggregator of news about where the money’s going in media.” […]

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