THURSDAY, JUNE 5, 2008

IN THIS ISSUE:

RTNDASUMMITPRODUCES HEALTHY DISCUSSION
CUTS DON’T DO IT: THE ONLY WAY TO WIN IS REINVENTION
ONLINE AD REVENUE GROWTH EXPLODING. WHO KNEW?
THREE SIX FOR YOUR READER: RSS-WORTHY SITES
ANOTHER REASON TO LOVE ANDREA MITCHELL

RTNDASUMMITPRODUCES HEALTHY DISCUSSION (Terry)
RTNDA logoThe Radio and Television News Directors Association quietly demonstrated much-needed leadership this week by bringing together broadcast news executives and journalists for a “background only” session to discuss the serious challenges facing the news business. It wasn’t a meeting of CEOs or business types; it was news people talking about what they can do to help themselves and each other in the wake of relentless expense reductions and layoffs.

With the war museum of the McCormick Foundation in Wheaton Illinois as a backdrop and the occasion of the 50th anniversary of Edward R. Murrow’s famous “wires and lights in a boxRTNDA speech as inspiration, attendees spoke of challenges and brainstormed ideas to overcome them.

First Division Museum at Cantigny

The off-the-record nature of the event prohibits me from identifying conference participants or attributing quotes to anyone at this time. The RTNDA hasn’t fully decided how the information will be disseminated, but watch for something from them perhaps this fall. The idea is to create a plan exploring general principles that need to be preserved. That plan will go to the RTNDA board and then to general membership.

Everyone, I’m sure, came away with their own thoughts, for we tend to “hear” only what we’re capable of hearing, based on our own background and experience. For me, the gathering was a fascinating demonstration of the deep longing to hang onto the past, while reluctantly acknowledging that such clinging may not be possible. The clash of the old and the new was visibly present in the room, although the new was represented more by pain of the old than a physical presence. This clearing of the air I view as significant and healthy.

This “summit” was in many ways a visible demonstration of a modern, colonialist (I’m smart…you need me) institution trying to stay relevant in an increasingly participatory, postmodern culture. That was evident in attempts to maintain the status quo, while admitting that the quo may have lost its status.

After several scripted sessions, we broke into groups to tackle specific issues and make recommendations.

We admitted we have an audience problem and that we may have actually fed that problem. There is nothing new about our news programs, and many employees don’t even watch. Yet, we continue to do the same thing, and this we agreed makes no sense. We agreed that we need to go where people are today and not try and make them come to us. There was a sense that we’ve gotten away from “real” journalism and are morphing into a utility that may not be relevant to the people in our communities. At the same time, there was an acknowledgement that there is a great deal of really good work being done in the industry, especially during times of crisis or breaking news. We need to research the people formerly known as the audience (TPFKATA), because we’re just not smart about how people are consuming media these days.

While conceding that our product has strengths, we agreed that it needs experimentation on-the-air and that the repurposing of that for other media forms is self-destructive. We talked about presenting news in a raw form during working hours (Continuous News) and how well that serves the audience at work. As such, we felt that formats other than the “finished product” concept of a newscast might better serve the information needs of the community. We asked if personalities will drive the news presentation of tomorrow and discussed the role of “citizen contributors” to the professional news organization.

We agreed that news departments must get involved in the business side of television stations, and I found this to be the most refreshing discussion of the entire summit. We’re smart people and while it’s necessary that sales not dictate what happens on-air, there was a strong sense that we may be able to make valuable contributions in how our product is sold in the community. At several points, there was discussion about lowering the wall of separation between news and sales while maintaining the integrity of newscasts. We’re comfortable with news-as-a-profit-center, but we felt that news people could help profits, if we actually had a more direct role in it.

One of the recommendations that bears repeating is that we need to prepare for the day when we don’t have a network affiliation any more.

In discussing our future approach to journalism, there was much talk about definitions and that perhaps we need a new definition of “news” itself. The terms “objective,” “fairness” and “balance” all need clear definitions. The team assigned to this area felt that anything not “objective” should be clearly labeled as such, but that “analysis” and “opinion” have their place. We need to get out of the pack mentality that seems to be driven by a “punditocracy” and begin to think for ourselves.

There was a great deal of discussion about the need for training and an acknowledgement that our industry has historically been very bad at this. I heard the term “culture change” many times and that everyone — from employees to executives — needs an immediate education in how other forms of media work. This is something the RTNDA will take an active role in implementing, I’m sure.

Like everybody else in media, the associations that represent them are struggling. The RTNDA is dealing with a shrinking membership and declines in convention attendance and magazine advertising, so they are as eager to figure this stuff out as the next guy. Look for a name change for them in the near future, as they come to grips with the reality that an organization named “Radio and Television News Directors Association” might be too narrow to represent the paradigm changes before us.

My hat’s off to the RTNDA and the McCormick Foundation for arranging this event. That we are in the midst of a new “Gutenberg moment” is becoming more evident every day, and it was truly encouraging to hear those directly involved in the broadcast news business honestly talk about it and what to do about it.

Murrow would’ve been proud.   Link>

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CUTS DON’T DO IT: THE ONLY WAY TO WIN IS REINVENTION (Steve)
There are plenty of stories right now of newsrooms cutting costs. TV newsrooms are letting go of veteran journalists. In many cases, it’s time. The economics of news no longer support high six-figure paychecks. Anyone who has spent any time in a major news operation has seen inefficiencies. And if you’ve been fortunate enough to be on the receiving end of a TV station’s largesse all these years, you have to admit it — you’ve done well.

So no tears for those who have done well.

But don’t confuse cuts with strategy. Cutting costs only helps the short-term spreadsheet. It’s a quick fix. But it is not a long-term solution. Simply look to the seemingly never-ending announcements from Detroit. Every year, we hear about thousands of job cuts from the auto industry. Has this turned things around? No. Only real reinvention would. And sadly, that has seemed beyond Detroit’s grasp.

Cuts make shareholders happy for a quarter or two. They may make station sales a little easier. But things will not get better. The marketplace will continue to get worse, and eventually the numbers will catch up to the stations again, and more cuts will be inevitable.

Deborah Potter writes for the American Journalism Review:

“… the local TV news formula of using star anchors to attract viewers may be headed for the ash heap. It’s expensive and apparently not that efficient if you consider the recent downturn in both audience and advertising.”

Potter’s column (in which she interviews AR&D President and CEO Jerry Gumbert), echoes our conclusion about the only solution:

“The lesson for TV news seems obvious. Cutting jobs won’t solve the problem. It’s reinvention time. Anyone listening?”

Fortunately, some are. Some stations are going “beyond the cut,” and are reinvesting in the areas of their operations that show promise. There are group heads and station presidents who are putting money into their Web budgets for 2009, even as they cut their TV budgets. And they have to. The Web is where the growth is. You can’t grow a business through cuts. You can grow it by cutting the areas that are failing and growing the areas that show the most promise.

There is plenty of precedent for companies that have succeeded by reinventing themselves. There isn’t much promise for companies that hold to old models, keep cutting, and hope for the best.

Join the reinvention. It’s more fun — and you’ll be creating jobs instead of just cutting them. Which is more rewarding?   Link>

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ONLINE AD REVENUE GROWTH EXPLODING. WHO KNEW? (Terry)
I don’t write much about web growth anymore. I even gave up on web advertising growth stories a couple of years ago, because it seemed kind of foolish to keep saying the same thing. Anybody even remotely interested in the Web could tell that everything about it was moving northward (still is).

But a new report from Borrell Associates and a new study from market research firm IDC are too much to resist. According to the IDC report, overall Internet advertising revenue in the U.S. will double from $25.5 billion in 2007 to $51.1 billion in 2012. That’s right: double! Borrell reveals that local online revenues are growing “at a phenomenal rate of 50 percent this year” and that double digit growth will continue for at least another 18 months. His prediction that 2008 will be a $13.1 billion year for local online spending is in line with the IDC numbers.

A little context is in order. Television advertising in the U.S. is a $70 billion industry. While there have been a lot of doomsday predictions about broadcast revenues, I think that number is going to be around for awhile. But at $51.1 billion in 2012, web advertising revenue will be pushing TV. IDG actually predicts that by 2012, internet advertising will displace TV and be second behind only direct marketing.

Think about that for a minute.

The Borrell report offers a chilling graphic, however. It shows estimated market share by media for 2007 in a typical market.

Local Online Ad Spending by Media, 2007 estimated

What this shows is that internet pureplay companies now take nearly six of every ten dollars spent online in a typical market. In other words, companies like Google, Yahoo, AOL and MSN are our real competition for LOCAL online ad dollars. While newspapers struggle for a decreasing share (they got 44% in 2004) and TV stations feel good about an increasing share (they got 1.9% in 2004), the pureplays march along dictating everything. To repeat something I’ve said ad nauseam from my friend Bob Papper, “Television didn’t hurt magazines by taking away their readers; they hurt magazines by taking away their money.” This is what’s happening to us circa 2008.

Meanwhile, the IDG report offers promise for those who already live in the world of video (can you say TV?):

Video advertising will be the principal disruptor of Internet advertising over the next five years by attracting the most new marketing dollars. Its revenue will grow sevenfold from $0.5 billion in 2007 to $3.8 billion in 2012 at a compound annual growth rate (CAGR) of 49.4%. This growth will take place because brand advertisers will shift significant amounts of money into these video commercials, primarily from broadcast television and to a lesser extent from cable television.

And these kinds of predictions are always based on current models. What happens if the Web finally figures out how to advertise for real? It is a very long time (in web years) between now and 2012.

The point is the Web is where it’s at, and the size of those numbers mean disruptions will continue to relentlessly pound the status quo, even if that status quo was only created yesterday. we’re in an incredible season of change, and nobody knows how its all going to play out, if it ever really does.

But you already knew that, right?   Link>

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THREE FOR YOUR READER: RSS-WORTHY SITES (Steve)
Terry and I have talked a lot about RSS and why you should set up an RSS reader. From time to time, I’ll recommend some feeds I think you should have in you reader. Here are three to add right now:

All Things Digital1. All Things Digital. This is the Wall Street Journal’s blog on — yep — all things digital. Writers Walt Mossberg, Kara Swisher and more keep us up to date on the trends with news and excellent reviews on new technology. Proof that great reporters can — and should — be great bloggers. A must read.

TED talks2. TED talks. This is the blog for the once-a-year TED Conference. (TED stands for Technology. Entertainment. Design.) The conference “brings together the world’s most fascinating thinkers and doers, who are challenged to give the talk of their lives (in 18 minutes).” And they do it. While the conference is only once a year, the blog releases videos of each of the talks throughout the year like little presents. You’ll find yourself engrossed by topics you never would have imagined. (And you’ll have your notion challenged that “nobody will watch online video of a person talking for more than 3 minutes.) Watch TED, get smarter.

Mashable3. Mashable — This is blog about social networking, and you’ll find all the latest developments in the constantly changing field right here. It’s in my reader, and with good reason. I wouldn’t be able to keep up with the daily changes in social media without Mashable.

Go to these sites, get the RSS, and put ’em in your reader. You’ll be glad you did.

THREE MORE FOR YOUR READER (Terry)
Here are my recommendations to help everybody be smarter:

Umair Haque Edge Economy1. Umair Haque Edge Economy. This Harvard Business School site for the Havas Media Lab is written by Umair Haque, one of the most “out there” minds in the world today. He’s got an edge to him, but the guy is brilliant, and studying what he says is eye-opening. He’ll only drop something in your reader once or twice a week, but it’s always thoughtful stuff.

GigaOm2. GigaOm. This is the blog of Om Malik, another one of the great minds in technology and media today. If you want to be ahead of the game, you need to have Om’s feed in your reader.

The Long Tail3. The Long Tail. This is Chris Anderson’s blog. He doesn’t update it as often as I’d like, but when he does, it’s always worth reading. Anderson, editor of Wired is the guy who wrote the book on Long Tail economics, so you can count on this feed to give you fresh thinking.

   Link>

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ANOTHER REASON TO LOVE ANDREA MITCHELL (Steve)
Andrea MitchellA note here on why NBC’s Andrea Mitchell continues to be one of my favorite reporters of all time.

On MSNBC Tuesday night, during the whole primary hoo-hah, Keith Olbermann and Chris Matthews kept asking Mitchell about reports that varied with her own, regarding a scoop she had about a potential upcoming meeting between Sens. Obama and Clinton.

First, Matthews asked her why her report was different from what they were hearing. “Because it’s not a press release,” Mitchell retorted. They should have left it there.

But then Olbermann asked her why her report differed from that of Newsweek’s Howard Fineman.

“I didn’t hear Howard’s reporting, I was doing my own reporting here,” Mitchell said firmly, but with a sly smile.

Love that.   Link>