Hope isn’t exactly “busting out all over,” but two examples of at least guarded optimism for the business model of mainstream media came to my attention in as many days.
In an article in Columbia Journalism Review, “A Second Chance,” Curtis Brainard says that mobile devices might just be the key. He writes:
… Media outlets are still having a tough time seeing beyond their own dwindling print runs, and it was only three years ago that electronic paper helped incite what has been called the “e-reading revolution.” It’s not much of a revolution yet, but what is increasingly apparent is that mobile devices have the potential to offer the journalism business that rare and beautiful thing: a second chance—another shot at monetizing digital content and ensuring future profitability that was missed during the advent of Web 1.0. ¶ I use the word “potential” because there are many ifs and unknowns undergirding this notion of a second chance. But I use it also because so much of the hype about how e-readers could save journalism that has poured forth since the release of the iPad in April (actually, such articles have been appearing since the launch of the Kindle in 2007), ignores—or fails to grasp—what’s really going on. …
Then I got a link to an On The Media [WNYC for NPR] program on newspaper economics from 15 July that I’d missed. It had a variety of opinions about the economic future of newspapers, some of them unfashionably optimistic. I liked their approach to the topic. Toward the end, though, they quote from Clay Shirky’s March 2009 essay, Newspapers and Thinking the Unthinkable:
… Ancient social bargains, once disrupted, can neither be mended nor quickly replaced, since any such bargain takes decades to solidify. ¶ And so it is today. When someone demands to know how we are going to replace newspapers, they are really demanding to be told that we are not living through a revolution. They are demanding to be told that old systems won’t break before new systems are in place. They are demanding to be told that ancient social bargains aren’t in peril, that core institutions will be spared, that new methods of spreading information will improve previous practice rather than upending it. They are demanding to be lied to. ¶ There are fewer and fewer people who can convincingly tell such a lie.
In previous posts here and presentations I’ve given, I’ve stated that my own view is pretty close to that of Kevin Kelly, who asks in his by now classic “Better Than Free” essay, if content can generally be freely copied on the internet, what is it for which we can charge? You sell things which cannot be copied, which he calls “generatives” and lists eight of them in the essay. He writes:
… A generative value is a quality or attribute that must be generated, grown, cultivated, nurtured. A generative thing cannot be copied, cloned, faked, replicated, counterfe3ited, or reproduced. It is generated uniquely, in place, over time. In the digital arena, generative qualities add value to free copies, and therefore are something that can be sold. …
I’ve spent my whole professional life in public media and his generatives resonate particularly well, but they would seem to for other mainstream media as well. That’s not to say that some forms of paid content won’t be successful. I’m a happy Netflix subscriber, for example. But smart people need to apply as much thought to those eight and other “generatives” as they do to resuscitating the legacy business model of their medium.
Thanks to Steve Rathe for the CJR link and to David Liroff for the OTM link. --Dennis
Frédéric Filloux reports on a French study of the media usage habits of about 100 18-to-24 year olds, “Digital Natives.” He opens:
They see life as a game. They enjoy nothing more than outsmarting the system. They don’t trust politicians, medias, nor brands. They see corporations as inefficient and plagued by an outmoded hierarchy. Even if they harbor little hope of doing better than their parents, they don’t see themselves as unhappy. They belong to a group — several, actually — they trust and rely upon.
Link: Monday Note. The results aren’t directionally surprising, but the intensity is. Fascinating reading. --Dennis
Antony Bruno has a good article outlining Pandora’s economics and economic strategies. Of note to radio broadcasters is Pandora’s support of the Performance Royalty Act. Bruno writes:
The $30 million in performance royalties paid by Pandora last year represents 60 percent of its revenue. Compare that with satellite radio, which pays 15 percent of royalties for the same content, and terrestrial radio, which pays nothing. …¶… [the RPA] would force terrestrial radio broadcasters to pay performance royalties for the first time. While beneficial for labels and artists, such a requirement would also help put Pandora and traditional radio on more equal footing. ¶ To achieve the kind of scale that [Pandora founder] Westergren envisions would require expansion to new platforms, particularly to TV and the automobile. Most of Pandora's daily traffic -- about 60 percent -- still comes from computers, …
Link: Reuters. Thanks to tweet from @markramseymedia. --Dennis
... In the news business, we have a rule of thumb: an electronic
reader brings 15 to 20 times less in advertising revenue than a print
reader does. I’ll stop short of saying this dire state of affairs is
only attributable to advertising. Between inadequate interfaces, poor
marketing, and the certainty that, just by itself, intellectual
superiority entitles to success, medias carry their share of
responsibility in this situation. But, for the most part, it is the
advertising community who missed the digital target. ...
But wait, you say, there's Google. True, though as usual, Filloux is compelling.
Frédéric Filloux shares some fascinating data in a Monday Note post from awhile back (just discovered it in my blogging tool’s open drafts area). Look at the scary paragraph on the shifts in advertising spending. He writes:
Forget Joe Average, he’s dead. Ten or twenty years ago, analyzing audiences was much easier. Medias enjoyed well-defined and relatively unchanging target groups. For television, networks had a precise idea on who was watching what, and specialized cable outlets knew their viewers pretty well. Newspapers had their content structure sliced to fit various audiences by center of interests, age groups and opinions. At the time, contents were bundled together, delivered on a unique platform for a flat fee, on a per copy or subscription basis: the popular sport section, or classifieds did subsidize the expensive but more elitist foreign section, all for a dollar or the equivalent of a euro. ¶ In today’s marketplace, every single piece of information lies the open, naked, stripped of a set value. People don’t buy contents by the bulk, they peck at it, leaving to a third party (the unstable advertising market), the burden of financing it. As the content scatters on the internet, so does the audience. … ¶ … Coming back to the title of this column, analyzing trends has become more complicated: audiences are no longer monolithic, their breakdowns are hard to ascertain. This uncertainty makes an average a less and less relevant notion. For an online newspaper, what is an average reader? Consider two readers and focus on their different level of engagement. One is glued to the New York Times, Le Monde or Aftonbladet on his/her iPhone during a 30 minutes daily commute. The other, at 7 pm, casually glances at headlines while sipping a glass of chardonnay with TV providing the ambient noise. In this particular example, the level of engagement makes a crucial difference to the value of a reader. …
So says an IDG News Service article by Joab Jackson in Computerworld:
While text-based search services such as Google's and Microsoft Bing now come pretty close to consistently serving up what users seek, video search services remain inexact at best, said video archiving experts who spoke on a panel at last week's WWW2010 conference. ¶ Yet the panelists agreed that video searching techniques must improve exponentially if people are to use the growing amount of video footage now stored on the Internet and elsewhere. …
A new study, Wireless Broadband and the Redlining of Rural America [pdf], by Gregory Rose for the New America Foundation,
…suggests that 8-to-10 percent of rural America is likely to be permanently redlined by the incumbent wireless broadband providers because in those areas population density, median household income, and levels of commercial activity are too small to permit efficient aggregation of demand and too much of its geographic area is too remote from primary infrastructure (Internet backbone, internet highways) to permit cost-effective deployment….
I rarely post work related material (I'm an SVP at NPR, where member services is in my current portfolio but digital media is not), but readers of this blog for the last 6½ years know of my long-time interest in how public media meet the challenges of disruptive developments and investments. So, with permission of all, I'm posting here a file containing an important email discussion initiated by Jon Schwartz. GM of Wyoming Public Radio, on the NPR "authorized representatives" email list. It's nine pages -- an original and addendum from Jon, a reply from NPR President/CEO Vivian Schiller and NPR SVP/GM Digital Media Kinsey Wilson, and a further reply from Jon. PDF Link.