Chasing Revenue: Dreams into Dollars Redux
January 30, 2012
More than 20 years ago, I wrote an essay for Online Magazine, published at the time by Jeff Pemberton, a former New York Times executive. The title of the write up was “Dreams into Dollars.” The main point was that anyone involved in electronic information could see that eliminating the middle men (disintermediation) and near real time information dissemination (gravity free processes) could make a lot of money. My interest in search has been informed by my wrestling with the problems of finding digital information. Once produced, if one cannot fit a document, that document for most purposes does not exist. The more time between content creation and one’s looking for that information object, the greater the likelihood is that the content is gone forever. Now a Babylonian clay tablet does not share this characteristic.
The problem, I pointed out, was that most online products and services lost money. Only a few would turn a profit because the business models from pre-digital businesses looked as if they were congruent. Flash forward to 2012 and the lessons of the past are being relearned and presented as new ideas.
I don’t pay much, if any, attention to the azure chip consulting firms. I did note that a popular commentator does and thinks about their implications. Navigate to “Reconsidering Gartner’s Cycle of Hype.” The article points out that the middle of the pack consulting firm’s chart which purports to explain how hyperbole rises and falls around a technology product is wrong, off base, and out to lunch. To support this assertion, the article offers:
In fact, just about every innovation I know of has to make it through the wilderness before it gets anywhere close to a hype cycle. The wilderness is the term for the years (or decades) that a founder/entrepreneur/artist/technology must spend being ignored and unfunded before the breakthrough of overnight success occurs.
I agree.
What I found interesting was an article in the allegedly new media savvy Guardian, one of the UK’s “real” newspapers. The article is “The Self-Epublishing Bubble.” [The link was flakey, sometimes rendering and sometimes not. You are on your own, pilgrim.] The long article, which helpfully cites an economics essay “Financial Instability Hypothesis,” a working paper published as gray literature in 1992. If you overlooked this analysis by Hyman P. Minsky, snag it at this link.
“The Self Epublishing Bubble” summarizes what looks to me like a variant of the Gartner hype cycle debunked by “Reconsidering Gartner’s Cycle of Hype.” The Guardian article makes a compelling case that self publishing (probably like this blog) is a dead end. The implication is that once the self epublishing bubble explodes, there will be opportunities for traditional publishers to get back in the game.
Here’s a snippet I jotted in my Dollar General ruled notebook:
The “Lender in the Last Resort” cannot really step in to save the “investors”, as these are the hundreds of thousands of hopeful and now-disappointed first-time epublishers. Instead, the government (if we’re lucky) steps in to bail out the publishing industry, and to regulate the digital companies that created the bubble in the first place. Or the government could continue to subsidise these companies, as it does just now, and in so doing create the next bubble.
Now that is a fascinating hypothesis. The only hitch is that the few publishing outfits for which I have current information facing stagnant or declining revenues and razor blade thin profits. My hunch is that the hype cycle and the self epublishing analysis are roughly equal in long term value.
Oh, try and search for the article “The Self Epublishing Bubble” and the Guardian’s Web site times out. Your mileage may vary. That search function may be a commodity, but at least corn in a can sort of works.
Stephen E Arnold, January 30, 2012
Sponsored by Pandia.com
Elsevier Snapped by Price Elasticity
January 29, 2012
Interesting page about smart folks boycotting Elsevier. You don’t know Elsevier? Well, check out the company’s subscription prices to scientific, technical and medical journals. Now navigate to The Cost of Knowledge and see what an online push back looks like. The idea is that some smart folks will no longer do editorial work, review articles, and other tasks routinely expected of knowledge farmers who want to sell information nuggets to the Elsevier combine. Publishers have a number of challenges, including prayers for Barnes & Noble assault on Amazon. Good luck with that, publishers.
I don’t have a dog in this fight. I learned after publishing a number of books that it is better to output information in this free Web log than server as a knowledge farmer on subsistence income. I suppose Elsevier could try the Web censorship thing, but smart folks may be able to work around the technical efforts of print publishers trying to figure out the digital world. That price elasticity hurts when it snaps back in one’s face, doesn’t it?
Stephen E Arnold, January 29, 2012
Sponsored by Pandia.com, my current and friendly publisher in Oslo, Norway, where the water is generally safe to drink and the publishers quite civil.
Enough Already with the Books
January 29, 2012
The fire continues to burn. According to the IT World article “Google Wants Groups Removed From Books Lawsuits,” Google asked a federal court to dismiss copyright claims against its Google Books project by The Authors Guild and The American Society Of Media Photographers (ASMP). Google argues:
The associations are not proper parties to this copyright infringement case because they themselves do not claim to own any copyright at issue.
In 2005 The Authors Guild and The American Association of Publishers brought a lawsuit against Google in order to block them from scanning books and making the digital content available in libraries and online. They argue Google did not get permission to scan the books and by doing so they are violating copyright laws. ASMP filed their own lawsuit against Google in 2010 and the two lawsuits are being considered together. Interesting enough, Google did not file a dismissal motion against the Association of Publishers and it is believed that a settlement is in the works between the two.
Enough is enough, get on with it already. Hopefully an end is in sight because this fire fizzled ages go.
April Holmes, Janaury 29, 2012
Sponsored by Pandia.com
Reuters about Google Complexity
January 27, 2012
If a company knows about complicated corporate set ups, it is Thomson Reuters. I found the write up “Analysis: Wall Street Puzzles over Google’s New Direction” interesting because it shows what Thomson Reuters thinks about a company which is less complicated that Thomson Reuters. In fact, both Thomson Reuters and Google may share more characteristics than some imagine. For example, Thomson Reuters is a YouTube partner. And Thomson Reuters’ latest innovation is a print magazine for “consumers” at the World Economic Forum. Google has a magazine as well. It is Think Quarterly. At least Google does not describe the magazine as a consumer product, preferring to tackle themes such as speed, people, innovation, and data. which is a plus. I must admit I never thought of George Soros as a consumer, but I live in rural Kentucky. What do I know?
Thomson Reuters has a very complicated organizational set up and very confusing product and service names. You can check out both of these facets of the shot gun marriage of professional information and “real” journalism at http://thomsonreuters.com/products_services/.
So what does Reuters say about Google? Google “has become an increasingly tricky business to grasp.” Here’s the passage which caught my attention:
If Page’s bets pay off, search could represent just one of several large and thriving businesses as Google recasts itself as a full-fledged “media and services” company.
Since replacing Eric Schmidt last April as CEO, the Google co-founder has aggressively tossed out underperforming and non-essential projects and products. The idea is to put “more wood” behind the company’s most important arrows, he has said.
Among those arrows are Google+, the eight-month old social network; Android, the smartphone operating system; and YouTube, the video Website it bought six years ago for $1.65 billion.
Clearly, these have been very successful ventures. Android has become the world’s No. 1 smarpthone operating system, surging past Apple Inc’s iOS, the software that powers the popular iPhone. YouTube is delivering 4 billion video views per day. And 90 million users have signed up for Google+.
What is less clear is how much money Google can eventually generate from these largely free services, such as from advertising sales.
For Google to keep growing, it needs access to a wider range of content on which it can place ads and make money, particularly as the tech landscape shifts and consumers’ Internet habits evolve.
What I find interesting is that this analysis applies directly to Thomson Reuters. One can argue that Elektron, Eikon, and the Thomson Reuters health care business are equally big bets.
Fascinating how one troubled company can write about another troubled company. Which outfit is in better shape: Google or Thomson Reuters? My view: Google. One way to solve that content problem may be for Google to buy an outfit like Thomson Reuters.
Stephen E Arnold, sponsored by Pandia.com
Al Jazeera and Its US Reach
January 24, 2012
We were surprised, then resigned. Has the US slipped lower on yet another yardstick of achievement?
Al Jazeera English, an international 24 hour English-Language news and current affairs TV channel headquartered in Doha, Qatar, has now reached 250 million homes — 5 million of those being in the U.S.
The Los Angeles Times reported on this startling milestone in the article “Al Jazeera English Now Reaches 250 Million Households.”
We learned:
Five years after its launch, there are 130 countries that carry Al Jazeera English, but in the U.S., the channel has limited availability; it can be found on cable systems in Washington, D.C.; New York; Burlington, Vt.; Toledo, Ohio; and, recently, Chicago and in Los Angeles on KCET. And while the U.S. makes up a fraction of the quarter-billion households, it is a major source of AJE’s Web traffic, totaling 40 percent, according to the network.
The fact that Al Jazeera English has such a large web following in the United States despite its limited availability, leads me to think that a significant shift has taken place.
Jasmine Ashton, January 24, 2012
Sponsored by Pandia.com
For You Library Lovers: eBook Loan Problem
January 23, 2012
E-reader sales have skyrocketed this holiday season and so too have e-book rentals from public libraries. The New York Times reported on the ongoing battle between e-readers and paper books in the article “For Libraries vs. Publishers: An E-Book Tug of War.”
According to the article, due to a fear of loss of revenue, most publishers in the United States now block libraries’ access to the e-book form of either all of their titles or their most recently published ones.
Despite the fact that only one e-book can be checked out at a time, just like paper books, publishers say that the difference lies in the convenience of e-book rentals.
Elinor Hirschorn, executive vice president and chief digital officer of Simon & Schuster said:
The reason publishers didn’t worry about lost sales from library lending of print books is that buying a book is easier — no return trip is needed to the bookstore — and the buyer has a physical collectible after reading it.
While the rapid technological advancement over the last decade has been very lucrative for some industries, in it has lead to the demise of others. In order to keep their overall revenue from taking a dramatic hit, publishers need to find a way to remain cost effective and convenient without putting themselves out of business.
Great idea: encourage people to avoid libraries for content.
Jasmine Ashton, January 23, 2012
Sponsored by Pandia.com
Thomson Reuters Innovates via Print!
January 22, 2012
From the “beavers do what beavers do” file.
With musical chairs in the senior executive ranks, flat earnings, a drubbing by Bloomberg and a Hail, Mary! attempt to gin up excitement via YouTube, Thomson Reuters is giving me a headache. I can’t imagine what David Thomson and the other stakeholders think about the tie up of a professional publishing company with a global news outfit.
What I did not expect was the Wall Street Journal story “Thomson Reuters Considers a Magazine Launch” in the Saturday hard copy edition delivered to my goose pond. The interesting passage in the news story, which does not seem to be of much interest to other news outfits, is:
Still executives don’t rule out the possibility of a regularly produced publication. “We’re all sitting around thinking about what we do next,” said Jim Impoco, executive editor of Thomson Reuters Digital and managing editor of the Davos magazine. He said the magazine was “part of an arsenal to embellish our consumer profile.”
Yowza!
I don’t think of the Davos crowd as average Harrod’s Creek consumers. I also am not sure if “arsenal” is the word I would choose to describe the hundreds of impossible to differentiate products and services which Thomson Reuters now offers. Have you thought much about eMAXX or EcoWin Pro? I did not think so. In case you know these two products, you will make sense of these offerings as well:
- Puntolex
- Round Hall
- Serengeti.
Yep, highly consumer oriented.
My view of Thomson Reuters is that it is a “beaver”, an animal which no matter where it finds itself, tries to build a dam. This means that Thomson Reuters is going to do products it understands; for example, a print magazine for the wealthy, well connected professional.
Is this a consumer play? Not in my dreams.
Thomson Reuters has to find a way to generate growth, pay dividends, service its debt, and compete with outfits like Factset. Until then, beavers do what beavers do and there is not much of a market for displaced beavers who are trying to build dams in a world far from forests, rivers, and glens.
And search! Yep, WestlawNext is working. The other implementations? Beavers do the beaver thing.
Stephen E Arnold, January 22, 2012
Sponsored by Pandia.com
Cheap Textbooks? Baloney, Baloney, Baloney
January 20, 2012
Did I mention “baloney”? I read “Publisher Terry McGraw on Steve Jobs and Digital Textbooks: “This Was His Vision” and stopped what I was doing to capture my personal views on this topic. Here’s the passage that spiked my blood pressure:
After Apple’s big education presentation yesterday, McGraw-Hill CEO Terry McGraw chatted with a gaggle of reporters, and explained things like the logic behind $15 digital textbooks.
Sure, there may a few $15 textbooks. There are even some free textbooks floating around if you are teaching a class in introductory perl. But where the rubber meets the road in Texas or Florida, the textbooks are going to remain expensive and only get more expensive. It does not matter what a senior publishing executive thinks at this point in time. The big textbook outfits are like a government agency. The president exerts precious little control over what these bureaucracies crank out. For what it is worth, here are the points I jotted down:
- Publishers have to maximize their revenue. It is the American way. Look at the cost of electronic books on Amazon over the last three years. Prices are going up. The prices will keep going up. Beavers do what beavers do.
- The digital textbooks will cost more to create than their print counterparts. Publishers have to spend a lot of dough to be decent video, entice programmers to make a multimedia thing work, and hire expensive specialists who have more than an a BA in art history from an Ivy League school. Publishers are not good at making games and movies which is the direction digital content is heading.
- As the method of teaching shifts from the prison model to an online framework, alternative content types will start getting traction. Publishers will buy these outfits and try to recreate the glory days of state wide text book adoption or the wild and crazy personalization required to sell textbooks in Saskatchewan.
Beavers do what beavers do; that is, charge as much money as possible for content intermediated by outfits like McGraw Hill, Cengage, and others. The gnawing is not nibbling away at prices. The gnawing means the prices are going up. And make this content searchable? Not likely in my life time.
Stephen E Arnold, January 20, 2012
Sponsored by Pandia.com
What Real Journalists Do
January 20, 2012
I am not a journalist. I am not a computer guy. I am not much more than an indexer of Latin sermons so I am baffled by the baloney from MBAs, self appointed experts, and failed Webmasters who are “real” somethings or other.
I did learn one thing today when I read “News Corp Pays Out over Hacking Claims, Said to Admit Coverup.” I learned something about being a real publisher, journalist, informationist, or whatever term applies to a sprawling media empire which includes that font of wisdom, Fox News.
The passage which jumped off the page for me was:
“News Group has agreed to compensation being assessed on the basis that senior employees and directors of NGN knew about the wrongdoing and sought to conceal it by deliberately deceiving investigators and destroying evidence,” the statement said.
I think Mr. Murdoch owns the Wall Street Journal, does he not? That newspaper is starting to be a bit more tabloidy in my opinion. In my little goose pond, the use of News Corp. type methods is not part of my modus operandi. Real journalists, of course, are not 67 year old addled geese. Oh, no. The people who are “real” operate in a far more sophisticated manner than Beyond Search which anchors our viewpoint to Web open sources, accepts advertising, and runs articles which are sponsored by companies like Pandia.com.
I am learning about the “real” journalism thing from a master like Mr. Murdoch. I am not a good student and I know I will fail the class. I am not a real anything. Well, I am real old.
Stephen E Arnold, January 20, 2012
Sponsored by Pandia.com
Apple and Hypothetical Text Book Killing
January 18, 2012
000Have you ever tried to search a text book? Doesn’t compute. The books are either not online, online but in a different edition from the one in my possession, or the content is partially represented so precision and recall are a joke.
I read “An Industry Insider Explains Why Apple Is Going To Have A Hard Time Revolutionizing The Textbook Business”, assuming that I was on board with the analysis from a digital textbook company guru.
Wrong.
The key point in the article in my opinion is expressed in this passage:
Historically, textbook companies dabble, before they jump in with both feet.
I generally agree with the notion that Apple does not support multiple formats and that the iPad is going to be the go-to device. Android, not so much.
My view is that there are three factors which are likely to conspire to create challenges for both Apple and text book publishers.
First, online courses are proliferating. The course material is a mess, but it is available to students. Professors and curriculum creators have to get in gear to fix up or migrate their existing online resources to Apple’s new tool. My view is that the baloney that is now available is going to remain pretty much as it is. Change is not the problem of publishers. Education from top to bottom resist change.
Second, one can talk about ease of use, but for a person without knowledge about text books and text material creation, no tool is going to be slam dunk easy. In order to dunk, one has to reach the rim, and I think that most content creators who wish to be text book publishers are going to shoot two handed set shots. Not the stuff of championship rings.
Third, the idea that a text book an be a multi media experience is an interesting one. The problem is that it is expensive to create a plain Jane text book. Toss in some nifty graphics for math or physics, dig up snappy illustrations for the course on the 19th Century English Novel, or just make geography come alive. Guess what happens to costs. Those costs make a plain Jane text book look like a real bargain.
I look forward to the Apple tools. A revolution is coming, but I don’t think Apple, specialty publishers, or the Titantics of the text book world will man the barricades. And search. Not on the radar.
Stephen E Arnold, January 18, 2012
Sponsored by Pandia.com
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