Media Industry

Not long ago, nor so far away, there once existed a very different media world. Editors and producers trusted their instincts about content decisions; advertisers trusted their instincts as to where to place their ads.

Needless to say, that world has passed away, in favor of a new one where all sorts of data is available to help us do our jobs. Trouble is, too many people in the industry remain old-school, and continue to ignore the evidence of how to better serve their users.

In an article on O’Reilly Media’s site today, called “The Importance of Viewing the World as Readers Do,” Andrew Savikas has this to say:  “Publishers will soon have much more data to deal with as reading becomes more digital and more social. Publishers who see the world the way readers do and turn that data into something readers find truly useful stand a much better chance of success.”

One example of that kind of data we all have to become more familiar with is the usage patterns available via  Compete.com.

Take today’s news that CNET (owner of BNET) is being acquired by CBS. Out of curiosity, I ran the numbers and was mildly surprised to learn that in terms of Internet presence, the smaller of the two companies — CBS, with under 3.9 million monthly users — is buying the larger company, CNET, which has over 6.4 million. (Click on the image at left for a larger version of this graph.)

According to Compete, BNET has roughly 1.4 million visitors per month, or roughly 19 percent of CNET’s total. Now, none of  this data is granular enough for any of us to consider it anything other than mildly interesting.

But, once you cut any such data by demographics, geography, and behavior metrics (time on site, engagement, etc.), you begin to discern the patterns that can help guide future site design and content decisions. That’s the way our new media world works.

First, bloggers ended mainstream media’s monopoly over content. Now, innovative ad networks are moving to loosen Google’s domination of the blogger-ad market.

But, as every blogger knows, monetizing your blog is a challenge. Last month, Six Apart announced a new set of advertising tools for bloggers that look especially promising.

Their idea is to give more bloggers an option to Google AdSense. Bloggers using Six Apart’s ad network will be able to choose which campaigns they run on their site.

Other companies building alternative blog ad networks include Federated Media, BlogAds and Technorati.

A few years ago, it seemed like AdSense held out some promise. Like many small-time bloggers, I happily cashed my first $100 check from Google rather quickly ( several months) after adding AdSense to one of my personal blogs. Not too much longer, maybe five months this time, the second $100 check arrived.

Over this period, that particular blog started taking off, relatively speaking, from an initial 10-20 visits a day, to 40-50, and some days, well over 100. Yet, my ad revenue plummeted. It’s now been a year and, if you can bear to, look over these paltry figures from my AdSense account:

Visits Clicks CTR* CPM Revenue
15,737 76 0.48 $1.39 $21.87

With a *click-through-rate of less than one half of one percent, it may take another four years for that next check from Google to arrive.

It’s that frustration that is driving bloggers not only to check out the alternative ad networks, but also to take advantage of a wave of new services, widgets, and gadgets. Many of these attempt to leverage Web 2.0 distribution strategies, i.e., placing a button or dynamic field into your blog or social networking site in order to cross-promote products and build new audiences.One of many that data-heads like me enjoy is the embedded link offered by Technorati of the real-time searches on its site. It’s one way to help your readers keep tabs on the topics surging through the blogosphere.

Another is the usage data service, Compete.com, which provides “fast and easy usage data on various sites… particularly good for comparing sites,” in the words of one of my industry insider friends. He’s right. I compared three of the sites mentioned in this post –Six Apart, Technorati, and BlogAds — and the results seemed more robust than what’s available from the disappointing Alexa; and quite competitive with anything at Google Analytics.

It’s always been one of those trick questions that kids of a certain age love: “What’s black and white and read all over?” The answer, of course, is “a newspaper,” but nowadays we could drop the letter “a” from the word “read” and the joke would still make a grim kind of sense.

That newspapers are failing is no longer news, but spend a moment looking over the latest advertising page data for U.S. magazines, and ask yourself a new question: “What’s four-color, glossy, and red all over?” (There’s also a natural followup for, of all places, the BBC. More on that below.)

Let’s just parse the industry into the segments MediaWeek analyst Will Levith uses, and look at how advertising pages in magazines’ current issues compare to the same period last year:

• Bridal Magazines (5 titles): -7.88 percent
• Business/Finance (15): +2.68 percent
• Entertainment/Celebrity (13): -16.02 percent
• Enthusiast/Sports (30): -11.53 percent
• Fashion/Beauty (13): -18.33 percent
• Food/Epicurean (8): -18.34 percent
• General Interest (12): -14.88 percent
• Men’s (18): +3.96 percent
• Newsweeklies (5): -40.32 percent
• Parenting (11): -0.09 percent
• Regional (3): -5.98 percent
• Science & Tech (8): -3.58 percent
• Shelter (23): -6.75 percent
• Teen (6): -10.78 percent
• Travel (6): +2.08 percent
• Wealth (2): + 10.31 percent
• Weekend (3): -24.92 percent
• Women’s (15): -16.38 percent

Just in case you don’t happen to have your calculator handy, the bottom line for 196 magazines across 18 categories is a 9.14 percent drop.

We don’t want to leave you on a down note, so this, too, is just in: The BBC now plans to launch a new U.S. magazine for readers who have “a curious mind.” As part of the launch, it intends to mail out 1.5 million “promotional items,” according to the Guardian.

Dear BBC: So, I have a curious mind. My question for you is, “Why now?”

Image by Flickr user CarbonNYC, CC 2.0

There’s some interesting new evidence to buttress our argument that Jon Stewart’s “The Daily Show” has a superior content strategy underlying its successful business model — specifically, in terms of its news programming decisions.

In television and radio, and in certain types of online environments, the art and craft of programming has always been critical to success. Yet, outside the media industry, the programmer is far less familiar figure than is the producer.

Nevertheless, the decisions of which programs to broadcast when, in what order, and how they are juxtaposed, traditionally have had almost as much to do with ratings as does the content of those programs — although this, too, is now changing.

Over the past year alone, the broadcast television networks lost a whopping 13.6 percent (6 million) prime-time viewers, which of course reduced their advertising rates proportionately. Hidden behind those numbers, however, is the confusing data-point that there has been no fall-off in overall TV viewing at all!

What’s going on here? Call it the TiVo affect. In the digital age, savvy consumers have taken the programming function over for themselves, by taping and viewing their favorite shows whenever they want to, as opposed to when the linear-thinking advertisers would like them to.

This places new pressure on content execs to make the right news decisions, which brings me back to Comedy Central maestro Jon Stewart.

The Pew Research Center’s Project for Excellence in Journalism studied the content of “The Daily Show” for an entire year (2007), compared its news agenda with that of the more traditional news media, in an attempt to place the program into some kind of media context.

Among the study’s findings:

• The program’s focus is on U.S. politics and foreign affairs, especially the war in Iraq. This governmental and political programming accounted for almost half (47 percent) of the time spent on the program. This proportion tracks closely with that of the “serious” cable news talk shows.
• “The Daily Show” presents more than twice as much coverage of the media industry (8 percent of its programming) than that in the mainstream press.
• A good deal of sensational news is ignored by “The Daily Show,” including tragedies such as the Minneapolis bridge collapse or the Virginia Tech shootings.

“In its choice of topics, its use of news footage to deconstruct the manipulations by public figures, and its tendency toward pointed satire over playing just for laughs, “The Daily Show” performs a function that is close to journalistic in nature—getting people to think critically about the public square,” states the report.

“In that sense, it is a variation of the tradition of Russell Baker, Art Hoppe, Art Buchwald, H.L. Mencken and other satirists who once graced the pages of American newspapers.”

Furthermore, the survey found that Stewart’s viewers are extremely well-informed, scoring in the highest percentile for their knowledge of current affairs.

In the end, the audience data tells the story best. “The Daily Show” now has an average audience of about 1.8 million. That’s 50 percent greater than CNN’s highest-rated (and most pretentious) news show, “Election Center,” which captures an average of only 1.2 million viewers.

Facebook has countered News Corp.-owned MySpace’s announcement of its data availability initiative yesterday with, well, an announcement today revealing the exact same thing for Facebook.

This newest product, pushing both social networks toward an increasingly homogeneous end, allows users to carry public profile info, photos, and friends to other websites, turning a MySpace or Facebook profile into a portable Internet identity.

TechCrunch’s Michael Arrington got the scoop on Facebook’s service, called Facebook Connect, and revealed that social content news site Digg would be a partner when Connect rolls out in the coming weeks. MySpace already announced partnerships with several Internet giants: Yahoo!, eBay, Photobucket, and microblogging service Twitter.

But AllThingsD.com blogger John Paczkowski is skeptical that the services will bring in real revenue by themselves unless paired with an advertising deal, following News Corp.’s announcement that MySpace missed its revenue target of $1 billion by 10 percent. But the convenience alone should allow both social networks to grow and keep existing users, driving them to the services’ main sites where revenue-generating ads await. And regarding MySpace’s missed revenue target, SeekingAlpha’s Ashkan Karbasfrooshan thinks News Corp.’s best quarter is yet to come, and an announcement like this certainly can’t hurt.

Last month, we covered the deal between Hearst Corp. and Spleak Media Network, the San Francisco-based hybrid publishing startup, whose CelebSpleak attracts a reported 100,000 visitors per day, mostly teen and twenty-something females.

Now, Spleak is launching two new offerings — SportSpleak and VoteSpleak. These two content distribution platforms will provide interactive content hubs for sports fans and political enthusiasts to gather and share opinions about their favorite teams and players as well as issues and political figures.

Users can both read and publish short-form content across a variety of platforms, including AIM, Facebook, Google Talk, MSN Messenger, MySpace, and mobile phones via SMS.

“What we’re hoping is that our teen girl users will tell their boyfriends to try SportsSpleak,” says Spleak CEO Morrie Eisenberg. He noted that the Olympics coming up this summer, combined with the steady stream of seasonal sports, make him hopeful the timing is perfect for establishing a “sports community where young people share their voices online.”

Eisenberg said roughly a thousand users tried both of the new products yesterday, the first day they went “live.”

In order to test the service myself, I downloaded two sports widgets onto a test blog site. The one for the San Francisco Giants seems fairly robust.

On the other hand, a widget I tested for the Detroit Pistons only had one comment so far. “Of course, it will take time to build up each team’s community,” noted Eisenberg, “but if what happened with CelebSpleak (launched in November last year) is any indication, they will fill up soon.” I also downloaded the widget for Barack Obama from the VoteSpleak, and it seems to be gaining traction already.

Spleak’s content strategy is interesting. It juxtaposes user-generated content (UGC) with professional media content, plus a dash of its own original content generated internally. “We have a full-time sports writer,” explains Eisenberg, “He helps seed the community.”

Some of us have long argued that for any content service to succeed, at least a small dose of original content creation must be part of the business plan, and Spleak is one of the new breed of startups currently testing this thesis.

Meanwhile, among some of the early UGC on VoteSpleak the past 24 hours were these:

“Going Green: A wise man (I think it was Edmund Burke) once said, all that is needed for evil to succeed is that good men do nothing. I’m not saying that global warming or the destruction of the environment is evil, but it negligent. ” (by: scary kid - 1 Star)

“Whaling Problem: Ok so people are complaining about the whaling problem in Japan ( Princess of Darkness) but we are just as bad. We don’t kill whales for research.. We kill them for lipstick and other products.” (by: Zashley<3 - 1 Star)

Early posters on SportSpleak included these:

“Boston Celtics: Boston Celtics are the team to beat this season’s playoffs! Big 3 KG, Paul Pierce and Ray Allen, are not Celtics lifelines but this is a real team effort! Celtics for the NBA championship!“(by: Mayur - 1 Star)

“Wayne Rooney: Best player in the world. Soccer needs him. He won’t complain when he goes down, he won’t waves his hands at the ref when he dosen’t get a call. He is proof that all soccer players don’t dive and cry. A true English footballer, with a mug to show it.” (by: oakland yankee - 1 Star)

Another element that sets Spleak apart from potential competitors is its major focus on IM, not websites, as the main delivery vehicle for its content. The majority of its users access and generate Spleak content via AIM, MSN Messenger, and Google Chat.

One glaring omission from this list is Yahoo Messenger. “If you know anybody at Yahoo I can talk to,” says Eisenberg, earnestly, “Please let me know.

Privately-held Spleak Media Network backed by venture capitalists Draper Fisher Jurvetson (DFJ) and Sunstone Capital.

(Update: Over the weekend, Murdoch’s News Corp. abruptly withdrew its offer and Cablevision was reportedly closing in on its deal to acquire Newsday.  So much for the smart money!)

The Clash of the Titans for control of Long Island-based daily Newsday has gotten even more complicated in the past week as Cablevision Systems Corp. upped the ante from the competing $580 million offers by moguls Rubert Murdoch and Mortimer Zuckerman by almost 13 percent to $650 million.

But, insiders including Murdoch himself insist that his News Corp. will soon prevail. During his conference call with analysts Wednesday, Murdoch predicted he’ll wrap up the deal within a week.

“This is a great market and this will give us a very powerful position,” the owner of the New York Post and The Wall Street Journal stated. Murdoch predicted that Newsday will add around $100 million to News Corp.’s annual revenue.

Asked about Cablevision’s offer , Murdoch answered: “No, I don’t think Cablevision will prevail. Just be patient a couple of days.”

The other Newsday suitor, New York Daily News owner Zuckerman, may still be in the running, but it is widely believed inside the industry that Newsday’s current owner, embattled Tribune Co. CEO Sam Zell, prefers to do business with Murdoch.

For one thing, the Australian-born magnate has offered a creative financial package that will help Zell avoid burdensome tax consequences once the sale goes through. (Zuckerman offered to match Murdoch’s terms, and is currently rumored to be considering upping his offer, in wake of Cablevision’s entry in the bidding.)

Meanwhile, industry analysts have not been receptive to the decision by the cable TV giant to enter the bidding for a daily newspaper. In his two reports to investors, for example, Craig Moffett questions why Cablevision would enter what he calls “a failing industry.” He continues: “Put simply, the economic model of news gathering — of maintaining costly overseas correspondents and news bureaus, of investigative journalists — is being eviscerated. And it is being eviscerated by the Internet.”

A new global survey of editors reveals that the majority believe newspapers will be free in the future. By a large majority — 86 percent — of the 704 editors from the U.S., Western Europe, South America, Eastern Europe, Russia, the Middle East and Asia, these execs also expect their newsrooms to become more tightly integrated with their online, digital products in the years ahead.

The editors also identified the two greatest threats facing their industry as the declining number of young people who read newspapers (Duh!); and the growth of the Internet (Double Duh!). Two-thirds believe the most common form of news distribution will be electronic (online or mobile) within a decade.

Somewhat more surprising, nearly two-thirds also believe that some traditional editorial functions will be outsourced in the future.

Meanwhile, analyst Peter Osnos of The Century Foundation, has issued a report about “The Myth of Free News.”

“There is a great deal of money being generated by the transmission of news, but very little of it is going to the providers of that news,” he writes. “News is no more free these days than the ‘complementary’ bag of pretzels you get on a plane, after you’ve paid for the ticket.”

He goes on to add up the average costs consumers are paying for broadband, cell phone service, and satellites, plus the cost of the lap-tops, PDAs, televisions, and iPods — all of which deliver news to their audiences. Then he identifies Google, which makes money from advertising on news, Verizon, getting rich off transmission of news, and Apple, fat with cash from its hardware sales that display news, as among the main winners under the current model.

You know where this is going. In contrast to the hundreds of dollars a month the above services and products cost consumers, a New York Times subscription requires a paltry $5.10 per week.

The solution? Osnos believes the companies redistributing the news should be paying fees to those who create it, a la the cable TV subscription model.

For now, he has this parting advice for editors: “[L]et readers know that they are paying, handsomely, for the news they get on the Web. It’s just not going to the people who gather it.”

Amen!

I’m having trouble thinking of any industry that has faced more tumult since the arrival of the Internet than the music business.

From Napster to the iPod to Zune, and downloads of singles to cellphones, the music labels have had to try to constantly adapt to an ever-changing consumer landscape.

It’s no surprise, then, that three of the four major U.S. music magazines saw a sharp drop in advertising revenue in Q-1 this year. The granddaddy of them all, Rolling Stone, took the biggest hit of all — a whopping 33 percent drop in ad pages plus a 27 percent loss in revenue, according to the Publishers Information Bureau.

Advertisers are increasingly seeking new markets beyond print magazines to reach their customers. “We’re putting money in Pandora and other music [sites] that in the olden days would probably all have gone to Rolling Stone,” Scott Daly, executive media director at advertising agency Dentsu America, told analyst Matthew Flamm at Crain’s. “We’re trying to reach young, early adopters…”

So, can Rolling Stone adapt to the new landscape? After all, it’s defined music publishing for 40 years; Jann Wenner, it’s founder, editor, and (along with his ex-wife Jane) owner, turned 62 in January, and thus is among the first wave of Baby Boomers expected to slow down, at least, if not retire in the coming decade.

Insiders say Wenner almost sold the magazine in the past, when the business was sliding, but if there are any rumors of that sort lately, they haven’t reached us yet. The property still is huge for a niche magazine, with over $31 million in ad revenue in Q-1, but… compare that with over $42 million in Q-1 ‘07, and you see dangers facing Wenner as he captains his flagship into its fifth decade.

It has been a long, strange trip, indeed, but it’s likely to get a lot stranger in the Digital Decade to come.

(Note: I wrote and edited for Rolling Stone from 1974-’77, and have been working on a memoir of that period)

So, there’s the usual Monday morning bad news in the news business (layoffs and buyouts  at the McClatchy chain’s Charlotte Observer); but there this also a novel idea from The Chronicle of Higher Education.

“The time has come for the nation’s wealthiest colleges and universities to rescue its leading newspapers — resources almost as vital to higher education’s purpose as libraries, laboratories, classrooms, and concert halls,” suggests retired Fortune writer Lee Smith. “The plan I have in mind would call upon the richest institutions to set aside 3 percent of their endowments to buy The New York Times. That’s for a start. Additional purchases of other newspapers by other endowments should follow.”

As for the economics of Smith’s idea, it’s easy to imagine the likes of Stanford and Harvard, with their embarrassing surpluses of endowment funds, forking over the money. It would be good P.R.

As for the chance this will happen, don’t hold your breath. One huge problem for all owners of news media companies is the conflict-of-interest issue. Let’s posit that Harvard owns a chunk of the Times, and Columbia doesn’t. How can the public trust the newspaper will hold Harvard just as accountable as Columbia?

It can’t, and perception is reality for all media.

Still, this is the first time I’ve seen this particular ownership model floated. “What must be preserved is the complex and expensive enterprise of collection that underlies a newspaper,” Smith argues, “— the labor and brain-intensive work of reporting, writing, and editing the millions of fragments of information scattered across the planet every day.”

He’s describing the intellectual process of creating a great news source, which simply cannot be duplicated by any known algorithm. This is why online taxonomies don’t work very well, why aggregator sites lack “voice,” and why Web 3.0 will feature renewed interest in original content creation.

You read it here first.

Meanwhile, since Apple now has a whopping $19.5 billion in cash reserves, maybe it should buy the Times. Then Steve Jobs could redesign the Gray Lady into a sleek, sexy, digital babe!