Is the Mainstream Winning?

Here is the latest in my ongoing essay series about reinventing local media:

Is the Mainstream Winning?

News last week that Yahoo was shuttering GeoCities got a lot of people thinking about what’s happened with the Web’s “top performers” over the last ten years. GeoCities was a top ten performer in 1999. A surface view suggests that mainstream media companies are beginning to win, because these companies now occupy many of the Web’s “top 25″ slots. Other evidence, including new data by Gordon Borrell (due out in the next few days), shows that traditional media companies are winning some of the battles in their competition with internet pureplay companies at the local level.

I look at all of this and concede that we’ve made big gains. I fear, however, that those gains are in the ad-supported content business, and I’m not sure that’s the real issue for traditional media companies. Hence, it may be a case of winning the battle but losing the war.

This day

Three years ago today. I pause to remember. A life. A love.

A Patch On My Soul (2006)

I face each morrow with a sense of great sorrow
That cannot be spoken away.
For no hope can I find any place in my mind
That will make this great loss seem okay.

From whence can I hide, or find words to describe
The emptiness that greets me each day.
When only I find a pillow next to mine,
The place where her head used to lay.

She’s gone and it’s perished, this thing that we cherished,
This love that we both knew would last.
For those lips I once kissed are now but a mist
In a place far outside of my grasp.

At the front of my mind, she’s there every time
Whether thinking of that thing or this.
With no wish to escape, I embrace this sad fate
’Cause at least in my mind she exists.

Like a moth on a screen, there’s something between
What I want and what I may possess.
The light beckons me, but I cannot break free,
No matter how hard that I press.

So when death sings its tune, be it later or soon,
To her arms I will run once again,
That thought I can seize, but explain to me, please,
How I live in this world until then.

They say time will heal this pain that I feel
That one day I’ll find myself whole.
And that may be true, but between me and you
It’ll be with a patch on my soul.

Local web revenue begins to favor local media

Borrell shocks the industryFor the first time, there’s evidence that local media companies who are “doing it right” in the online space are actually showing revenue growth exceeding that of the pureplay Web companies in the same markets. These are companies who view the Web as an opportunity for business development, and demonstrate it by dedicating resources and personnel to the task of growing online revenue, instead of placing the responsibility on existing employees.

This remarkable finding comes from new Borrell Associates data and should bolster the hopes of local media companies to seize the moment.

In crunching the preliminary numbers, Borrell looked at 15 legacy media companies and found each generating anywhere from $10m to $311 million in revenue from local online advertising. According to the data, the average growth comes to about 19%, while the pureplay companies are averaging about 9% growth. There’s a caveat, however: “If you add Google and Yahoo’s advertising programs to it, which admittedly aren’t purely ‘local,’” Borrell notes, “it drives the percentages up to about 20%, so they’re even. That’s not exactly a fair comparison, though.”

Perhaps even more importantly, this discovery could also encourage pureplays like Google, Yahoo, Local.com, Reach Local, Yodle and others to reach out and form partnerships with local media companies instead of competing for local dollars.

The pureplays need feet on the street, which is too costly for them to obtain,” according to Gordon Borrell. “In the end, they’ll probably fall back on being platform and product suppliers, leaving the local media guys as the promoters, content providers, and sales force.”

That would be an extraordinary turn of events, for the pureplay companies have been eating the local media companies’ lunch when it comes to local online revenue. The image below looks at lot like a familiar game from the 1980s.

Share of online revenue by media types

Borrell also notes that:

  • These 15 companies collected a total of $1.03b in online advertising in 2008.
  • And these 15 companies lost a whopping $1.9b in legacy media advertising in 2008.

These are the local media companies that are outperforming their contemporaries in the online space. They are executing parallel path strategies, one dedicated to brand extension and the other to business development.

Doing it right,” according to Borrell, “is seeing the Internet as a SEPARATE entity deserving of considerable resources, not trying to use your existing sales and content staff.” That doesn’t mean

Creating news content for local media companies is the role of the news department, whether that’s for the legacy property, the Web or mobile. This is where many companies get it wrong in viewing the opportunity strategically. Borrell — and those of us at AR&D — strongly feel that business possibilities for local media go way beyond the content created for news, and these types of businesses require separate content and sales people.

Borrell likens what’s happening today to that which has happened before.

Through time,” he told me, “local media companies were the ones who seized any ‘new medium’ — whether it was newspapers starting radio stations or the radio and newspaper guys starting TV stations, or the newspaper and TV guys getting into cable back in the 1970s.”

It’s probably a bit early to declare newspaper and TV companies the probable winners in the ‘local online’ space, but I’m seeing a lot of the right moves being made. And history causes me to believe it’s actually going to happen.”

I think that’s a pretty big leap, although I would certainly rejoice if that were to take place. Wherever I go, I run into disbelief about the size of the local online market and also questions about who these “pureplay” companies are. Weddings.com is an excellent example, and Borrell says the local the local Weddings.com site typically has more revenue than the average TV station website.

This data reveals that some media companies are finally understanding the Web. Borrell thinks only 20 to 30 percent will “get it,” and the others will just be newspapers and TV stations with brand extension sites. Which category describes your company?

The new data should be available in report form via the Borrell website next week.

To each medium, its own

Print: Advertising is adjacent to content
Broadcast: Advertising interrupts content
Movies: Advertising is within content
The Web: Advertising IS content

Just thought you’d like to know.

It’s all in your perception

Jerry Gumbert at RTNDAA young woman — a college student exploring the RTNDA conference likely for the first time — asked the question of the whole convention yesterday. It came during a session in which Jerry Gumbert, president and CEO of AR&D, was discussing our new book and the details of re-engineering local TV. Grip the arm rests of your chair and get ready. Here it comes:

Why wouldn’t anybody want to shoot their own video?”

The issue was the roles and expectations of the multimedia journalist. Jerry was talking about how veteran TV news reporters sincerely believe they’ve “earned” the right to “just” report but that the industry simply must move beyond that and embrace the necessity of putting more feet on the street. Readers here have been down this road with me many times. The industry vilification of Michael Rosenblum, the outlier “father of the VJ (video journalist) movement,” has been well-documented here, and it’s common knowledge that the pejorative term “one-man-band” is used with condescension among the rank and file in TV newsrooms.

But the reality is that a whole new generation of multimedia journalist is coming up through our institutions of higher learning, and they feel like this young woman in that room at the RTNDA yesterday. When she made that statement, the other students in the room announced their agreement. Wake up, you intransigent old-timers.

I wish Michael could have been there to hear this young lady make that unsolicited statement. I’m sure he hears it elsewhere, but in this context, in this place, in that room, it was very special.

The skewed view from the inside

Science refers to the embracing of one point-of-view in an objective study as “going native,” and it can ruin sincere attempts to observe. This is the risk of any observer at the annual conference of the business of broadcasting and broadcast news. It’s the business of broadcasting talking to itself about things relating to the business, and this produces an odd (for me) perspective on the disruptive innovations about which I write.

This was evident during last night’s opening supersession panel. I had the honor of being a part of the discussion. The show opened with Bob Papper, an old friend and professor at Hofstra University, revealing a new study showing that employment in TV news fell by 4.3 percent (1,200 jobs) last year, while the typical station added one newscast. This is called doing more with less, which is — in the Clayton Christensen view — a textbook response to a business disruption. There was agreement on the panel that we can no longer do things the old way, but I was taken aback that much of the rest of the conversation spoke of exactly that.

RTNDA panel

The view from inside the business of broadcast news is very different than the view from the outside. Inside, it’s about content, how to get more people producing content for multiple platforms, the tools to create the content, and the presentation of the content. There exists the (nearly) absolute conviction that “quality” content is the key to the future, and that we’ve cut back on investigative reporting, so audiences are turning away. In this view, one only needs to fix the content, make more of it, distribute it everywhere, and in so doing, fix the audience problem.

This is not only naïve, but it completely misses the bigger picture of what’s taking place in media — that the “mass” in mass media is being scattered and that the people formerly known as our advertisers are finding better and cheaper ways to find scattered eyeballs. This is the view from the outside, and absent serious and immediate efforts by local media companies to attack this problem, the “quality” of our content output won’t matter one bit.

Russ MitchellThe view from the inside interprets my position on this as too much doom and gloom, but regular readers here will know that I’m still quite bullish on broadcasting. I think it will be around for a long time, but I don’t believe it will ever sustain the kinds of business growth necessary to satisfy Wall Street through any form of multiple platform delivery of news “content.” People may want their news in a variety of forms, but the belief that we can support that with advertising sufficient to produce growth is not a safe assumption.

Another one of Bob Papper’s findings was that TV is still the dominant media form — and by a wide margin. This led him to say that TV and TV news, while needing to change, won’t face the same kinds of audience drop-off numbers that have crippled the newspaper industry for at least ten years. This is the view from the inside, for the revenue pressures on all media companies aren’t going to stop just because the recession (or whatever we’re calling it) ends.

The panel was a fun gathering. Russ Mitchell of CBS News did an excellent job as moderator, and I was proud to share the stage with Kevin Roach of The AP, Lane Michaelsen of WUSA-TV, Susana Schuler of Raycom Media, and Bob Papper. You can follow Jill Geisler (another dear old friend) and her live blogging via Cover It Live here. I’m told the RTNDA site will also offer a stream of the session via its website later today.

(NOTE, I interviewed both Jill and Bob for our book, “Live. Local. BROKEN News.