Archives for March 2010

The matter of serendipity

Ah, serendipity. It’s one of my favorite words, having been introduced to it in the 60’s music scene with “The Serendipity Singers,” a folk group on the hootenanny circuit. It’s getting a lot of attention today in the media discussion world, where some are lamenting that it will be lost with the eventual disappearance of newspapers. Here’s Jeff Jarvis, who smartly defines serendipity as “unexpected relevance:”

What is serendipity? It’s not a story from left field. It’s not, I think, “the opposite of what you normally consumed.” There’s a reason we find value in the supposedly serendipitous. When I started Entertainment Weekly, I said that our features had to satisfy a curiosity you didn’t know you had — but you end up having it. When we read a paper and find a good story that we couldn’t have predicted we’d have liked, we think that is serendipity. But there’s some reason we like it, that we find it relevant to us. Maybe that relevance is the unknown but now fed curiosity, maybe it’s enjoyment of good writing or a certain kind of tale, maybe the gift of some interesting fact we want to share and gain social equity for, maybe it’s a challenge to our ideas, maybe an answer to a question that has bugged us. In the end, it has value to us; it’s relevant.

Jeff thinks that we find serendipity today mostly through Twitter and Facebook, but I disagree. What I’m finding increasingly difficult to support with these two giants of social media is the time-consuming nature of following the links recommended by my friends, colleagues and those who I follow. This is the opposite of serendipity to me; it’s called work.

Where I find the most “unexpected relevance” today is through my RSS reader, which gives me plenty. In addition to the links, I also get enough to determine – for myself – if it’s relevant for me or not, and that’s what’s missing for me with Twitter and Facebook. It’s also why I absolutely love full-feed RSS. One of my favorite RSS feeds is The Inquisitr from Australia. Duncan Riley’s team always manage to float lots of interesting – and often off-topic – content that makes me smile and informs (and satisfies) my little serendipity brain cells.

So, for me, serendipity hasn’t been lost at all. I get more of it today than ever, and it’ll be fun to watch efforts to create “serendipity machines” through various algorithms. My only problem with that is if it’s a button I must push, it’s not serendipity.

And so it goes.

That troublesome Tea Party

You’re the weekend reporter for a small market, and the Tea Partiers have come to town for a rally. What do you do? You know squat about the group. They’re an oddball mix with misspelled signs, and they seem to drag along an illiterate and, well, ignorant crowd with them. Is that the story? Is the combination of religious zealots and gun-toters a threat to America? Is that the story? They talk like right wing GOPers. Is that the story? They say they’re a serious political movement in the country. Is that the story?

Let’s begin by saying that political animals know that you don’t know anything about them and their cause, so they use weekends to get their point-of-view across. So take the press release, but ask smart questions. What questions, you ask? Here’s a great interview with a guy who’s been covering the Tea Party for the Washington Independent since its inception.

David Weigel offers two wrong ways to look at the events:

“The only thing I try not to do is what I call “point and laugh” coverage,” Weigel tells Bob Garfield, “where you find a tea party group doing something kind of crazy and make fun of that and move on.” The second way reporters mischaracterize the movement, according to Weigel, is “taking a press release from one of these tea party groups and reporting that this was an authentic American uprising that informs our understanding of why Barack Obama’s not very popular right now.”

The simple answer is that the economy’s bad. It’s not that the self-selected conservative protestor showing up somewhere is the voice of the independents. They’re neither freaks nor Norman Rockwell representations of every American.

This is a tough assignment for any reporter, but for the green weekender, it poses lots of problems. Better to bone up on it now, because we’re going to be hearing a lot from this group in the months ahead.

10 Questions for Robert Niles

I’m diverting from my essay format a bit in going back to something I used to do regularly, interview somebody I believe is important in the world of new media. Today, it’s Online Journalism Review’s Robert Niles. Robert’s one of those great minds who goes quietly about his job of dissecting complex issues relating to journalism and the Web and turning them around, so that each of us can understand them better. I’ve been a fan of his for a long time.

So take a few minutes this morning and enjoy 10 Questions for Robert Niles.

Return of the six penny press

Everybody will be watching Rupert Murdoch’s risky move to put his media properties behind a pay wall, with newspaper groups paying the most attention. The whole multi-faceted revenue model of the industry is collapsing, and many think directly charging for content – the subscription model – is the only way out.

But this is producing some interesting discussion among observers, including Chris Lynch, who argues that the demise of the traditional press will lead to what he calls a “Reader Elite.” Lynch sees this group as “a small group whose influence and effect on the future of content will be far more significant and long-lasting on media and democracy.”

Because while the Web itself democratizes information by providing the ability to easily access, publish and share information, it’s also contributing to a disparity in the quality of content that will lead to a “have and have-not” gap, much like we see today with our education system and health care policy. As free ad-based models fail online, those who wish to consume information produced by people whose sole job it is to gather and compile content will be a select few. Those people willing to subsidize content creators will dictate the future of truly investigative journalism as we know it.

I like what he’s saying, but I see it as a throwback to the days before advertising became the real revenue model of the newspaper industry, back to the mid 19th century and the dawn of the penny press. Until that time, the standard rate for a newspaper was around six pennies, hence, the six penny press. Here’s what happened, according to “A Brief History of Newspapers in the U.S.“:

The labor and lower classes were able to purchase a paper and read the news. As more people began buying papers throughout the country, news and journalism became more important overall.

Newspapers also began paying more attention to the public it served. They were quick to realize that the same information and news that interested the six cent public, did not interest the penny public. Newspapers used information from police stations, criminal courts and divorce courts to fill their paper and make it more appealing to their new public.

The heavy dependence on advertising as a major source of revenue was a main reason that the Penny Press was able to sell papers for a lower price than anyone else. Other papers relied heavily on subscriptions and daily sales. The price of paper and materials used to produce the newspapers also decreased making the production of the newspaper itself less expensive.

If this sounds vaguely familiar, it’s because the penny press describes the tabloidy extent to which all media has fallen in the name of recruiting large audiences for advertising.  If it bleeds, it leads. Welcome to the penny press.

If major media companies put their products behind pay walls, surely they will cater to the haves of our world, a different sort of news that caters to keeping the haves in their position. That’s Chris Lynch’s “Reader Elite.” Advertising? Who cares? Let’s leave that for the trash that recruits the largest audience.

This is going to be interesting.

The conflict between managers and engineers

Before I became a consultant about all things Media 2.0, I ran a Web company specializing in personality assessment. One of our value props was the ability to help companies hire just the right kind of person for the job. We knew that personality — the essential motivations that drive each of us — were critical in getting the various jobs done that make our business world function. Emotional people, for example, while necessary in social or some personnel relations functions, have great difficulty at the top, because their emotions can interfere with making tough decisions.

Analytical minds have different types of issues, because they’re always looking for the right process to handle various tasks and problems. This interferes with some forms of creativity, but these people can perform seemingly emotionless jobs. An executioner, for example, could rationalize his job, but an emotional person could not. It’s simply impossible.

The right kind of person to run a start-up Web company needs a combination of creative and analytical skills, but all too often they’re run by one or the other. In the end, however, it’s about risk-taking, vision and cash, and that job is best left to those with a deep personal drive and leadership and motivational skills.

This is important in today’s media world, because we’ve shifted from a management paradigm to one that is much more entrepreneurial. As New York Times Regional News Group exec David Knight told me recently, “It’s not about revenue anymore; it’s about making money.” He’s so right.

So who calls the shots with your entrepreneurial digital strategy? Do the people at the top make the decisions — the managers and leaders who came up through the news, sales or marketing ranks — or does that task fall to a person or people who came up through the tech side of things? All too often, in my experience, they come from the tech side, because media executives generally don’t have the knowledge to drive strategy. While this has certainly been understandable, it has produced less than stellar results for media companies in the grip of disruption, and maybe it’s time we took a really hard look at that.

Broadcast companies have been through it before.

I worked for WTMJ-TV in the early 70s and was running the Assignment Desk when the station manager had the idea to create a “Who’s Who at WTMJ” booklet, complete with pictures of everybody. TMJ was a combination television, AM and FM powerhouse, and we had a ton of employees. I’ve kept that old book (dated 1974) and while looking at it a couple of years ago, made a pretty interesting discovery. The largest employee department was Engineering. Over 70 engineers worked there then, dwarfing the news department. General Managers of broadcast stations often came up through the engineering ranks, because, frankly, they were the people who understood the technology necessary to keep the signal on-the-air. Back then, you accomplished nothing — nothing — without the assistance of an engineer.

All of that changed during the 80s, when corporate mandates drove the bottom line to top priority status, and that required somebody other than an engineer to run the place. GM’s rose up from the sales, marketing and, occasionally, the news ranks, because they could best move the revenue rock. Technological advancements made it easier to handle the engineering side, and TV stations became massive money-making machines.

I’ve often written that Ted Turner should go down in media history, not as the man who built CNN and was an early driver of the cable industry, but because he took graphics production out of the hands of engineers and put it in the hands of artists. Until that happened, it was a major project in newscast development to make simple graphics. Turner changed that with his non-union CNN, where artists were equipped with a camera pointed downward, a character generator, and access to images that were either self-created or from a library. Contemporary newscast production owes a lot to that innovation, and it was yet another case of moving technical people away from tasks that formerly they were the only ones able to execute.

Fast forward to today.

We’ve arrived at that point in the execution of digital strategies, too, and, with deep respect to my geek friends (and my own inner geek), it’s time for those who drive cash flow to take over. Why? Because as long as our strategic decisions are made by those in charge of maintaining technology, we’ll always default to things least likely to go wrong — the most provable, the most reliable, that which is known — and in today’s environment, we need to take chances. The last people in the world to take risks are those whose principal responsibility is to keep things from going wrong.

It’s not that engineers aren’t capable of risk-taking; it’s just that they’d rather not, because their world is bound to that which is known and proven, black and white, and right and wrong. Engineers are highly process-oriented and follow that which is known. Every good entrepreneur has a great engineer on the team, but even where engineers originate some great innovation, the smart ones find a different kind of personality to bring it to market. This pattern has been repeated over and over and over again in Silicon Valley, home of the Web start-up and the largest gathering of techies in the world.

The problem with what I’m suggesting is that the people running media properties — including those that work at the highest levels — lack the knowledge to be able to handle the task of strategy. There are only two solutions to that: acquire the knowledge or hire visionary people who already have it and have run Web businesses themselves. That’s problematic, of course, because the people who would hire them are the people who would have to step aside in so doing. Not gonna happen.

That means that the only alternative is a serious commitment to study, something that’s especially scary for executives who’ve worked hard to gain their positions on experience in the old world and would like nothing more than to just manage that until retirement. But study we must, and if it has to be one-on-one, then so be it. The alternative — unless you have a real visionary running the digital side — is to keep letting the engineers call the shots, whether that’s operational or strategic.

Originally published in AR&D’s Media 2.0 Intel newsletter.

We have met the enemy, and he is "pureplays"

Walt Kelly's famous quote from Pogo2010 is starting out to look like a fairly good year for some media companies, especially those with television station groups. In addition to a booming political year, there are signs pointing to a rebound in radio and TV advertising. According to a report in Media Daily News last week, we’re looking at three years of growth.

Media forecaster BIA/Kelsey says local advertising revenues for television and radio will reach $34.3 billion in 2014, up from $29.9 billion in 2009. That’s a 2.8% compound annual growth rate. Digital revenues for local TV and radio are expected to soar nearly 18% over the same period.

The same report shows that, by 2014, local TV digital ad revenue (mobile and Web) will reach $1.2 billion and represent 6.5 percent of the segment’s total $18.3 billion in revenue, up from 3.1 percent in 2009. Wow, sounds great, huh?

The problem with reports like these is always the assumptions behind the numbers. Here BIA/Kelsey has defined the market for local TV digital ad revenue as that which is produced and maintained by local TV stations. In this world, the competition for that $1.2 billion is the other TV stations in town. This is a myth, folks, because the real market is actually much bigger, and unless we wise up, our failure to act is going to hurt more than just local media. Local economies will suffer, as real local dollars quietly slide away to people who realize that — at least online — “local” is nothing more than a cash register for them. They don’t have to worry about employees, their families, and the many services that cater to them.

In the real Web world, for example, the pureplay Web companies are our enemy (competition), not the other media companies in town. Our barometer for success is measured against them, not the poor guy down the street with his own antenna, although those pureplays are very happy to have us think otherwise. Champagne corks pop when Google executives read a report like this the one from BIA/Kelsey, because it’s the distraction they need to not only pick our pockets but the local communities in which we live and work.

I’m increasingly coming to believe that this is a problem for the same local business communities that are using the tools of these pureplays to enable commerce. How?

Below is the latest graph from Borrell Associates depicting the market change between 2008 and 2009 in money that originated in the local marketplace and was spent on local online advertising. Note that the pureplays share of the market — a $13.2 BILLION dollar market — is now 51.7%.

Share of local money spent online

The market is growing. Borrell projects it’ll be very close to $15 billion in 2010.

What is the impact to your community’s advertising economy as a growing chunk of cash disappears? What impact does that have on the whole economy of your region? Local media companies employ real people and provide real dollars to the community, but that’s not the case with the pureplays. They are parasites, draining sustenance from markets in the name of enabling commerce. To whom will local merchants sell, if their money ultimately goes to Mountain View, California or hundreds of other places where these companies employ real people?

It’s not their fault; they’re just trying to do business. It is the fault of the local advertising economy — including all of the local media companies — who think they’re playing soccer when the game is really basketball.

Here’s the first line of a chilling article from Forbes:

National advertisers spend more than $120 billion on advertising in local markets and Yahoo wants it.

Of course they do. Local is THE target for the big boys now, because local is where online advertising is growing.

Can any local media company beat the pureplays like Yahoo and Google on its own? I don’t think so. And let’s be clear about one thing: companies like Reach Local and Yodle are Google in disguise, but Google just the same. They’ve found creative ways to use the tools of Google to make it easy for local merchants, and they’re very good at it. But every dollar that goes to them leaves the market. Let’s not forget that.

Here’s another Borrell chart that shows how the pureplays are making their money. The bar on the right hand side has Google written all over it.

pureplays use search listings

So perhaps we can’t beat Google on our own, but we can beat them by working together. That concept is becoming more rational with each passing day. I’m not suggesting it will be easy, but we all have a much bigger enemy that each other. Who will step forward and lead the way? If you want to know how I would do it, just drop me a line.

Originally published in AR&D’s Media 2.0 Intel newsletter.