Quote to Note: Traditional Media Companies Identify Change as an Issue
January 23, 2010
Last week a friend in the UK sent me a link to a Harvard Business Review comment about leadership and management. The addled goose is not much of a leader nor can he manage the goslings. The gist of this HBR write up is that certain skills are important; for example, pattern recognition.
I read that the outfit operating newspapers in San Jose and Denver was involved in one of those unpleasant financial dust ups. Sigh.
This morning I saw a great quote in today’s edition of the New York Times (January 18, 2010, page B 3). The quote—a headline as well:
It’s Not Jay and Conan Who Changed. We Did.
Right. Now click to the Wall Street Journal’s somewhat difficult to find table of newspapers with various financial challenges. You can find this “Pressure on the Presses” table and graphic that makes it easy to spot a pattern. (Validated at 9 30 am on January 18, 2010.)
Several observations:
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The pattern of demographic change is clear at least to the headline writer at the NYT
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The casual eye can discern the trend in the WSJ’s table “Pressure on the Presses”
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Traditional media has a voice saying to me, “Houston, we have a problem.”
More accurately, the children of the people who work in traditional media are among the reasons certain media are no longer getting traction. Heck, I am part of the problem because I am going to drop two of my four hard copy newspaper subscriptions. The news is old and an increasing number of stories come from third parties who write blogs or outfits set up to produce basic content chaff.
Stephen E Arnold, January 23, 2010
A freebie. I even threw away the bottle of shampoo that came in one of my newspapers the other day. I will report this to Health and Human Services. Clean readers are good readers I assume.
Magnetism and Online
January 19, 2010
I found the write up “Denver Post Owner Plans Bankruptcy Filing” somewhat sad. With middle tier newspapers struggling, I don’t think there will be an easy or quick fix to the collapse of [a] readership, [b] original news reporting, and [c] ad revenue. For me, the most interesting segment of the Washington Times’s story was:
It would be at least the 13th bankruptcy filing by a U.S. newspaper publisher in the past 13 months. The owners of dozens of newspapers have been pushed into bankruptcy protection as the recession and competition from the Internet have sapped advertising revenue. Affiliated Media’s Chapter 11 bankruptcy filing illustrates the uncertainty facing major newspapers publishers as their main source of income — print advertising — has plunged during the past four years. Since 2005, the industry’s annual ad sales have dropped by more than $20 billion, a decline of about 40 percent, based on figures from the Newspaper Association of America.
I also scanned the pride of stories about a big lion (New York Times) getting ready to charge for its content. You can read a summary of this likely step in New York Magazine’s “New York Times Ready to Charge Online Readers”. The write up suggests that NYT execs were not sure about this bold step into charging for access. The passage that struck me as interesting was this one:
The Times has considered three types of pay strategies. One option was a more traditional pay wall along the lines of The Wall Street Journal, in which some parts of the site are free and some subscription-only. For example, editors and business-side executives discussed a premium version of Andrew Ross Sorkin’s DealBook section. Another option was the metered system. The third choice, an NPR-style membership model, was abandoned last fall, two sources explained. The thinking was that it would be too expensive and cumbersome to maintain because subscribers would have to receive privileges (think WNYC tote bags and travel mugs, access to Times events and seminars).
I can see that the thinking about options follows well worn ruts in the online world. The problem is that none of these models will work for a first tier newspaper.
I have written extensively about online for this blog in my Mysteries of Online series. I won’t repeat that information here. Instead I will make a couple of fresh observations and move today’s Sunday New York Times to the recycle bin. I have looked at it already, but I did not find too much to engage me.
Here’s why:
- Take a look at the Financial Times online site at www.ft.com. Now jump to Newssift, the next generation Financial Times’s site. Now navigate to Compete.com and get the usage data for each site. The FT.com site is going nowhere, and it has great content. The Newssift.com site is flat lined. It is not going anywhere ever. Run a query on Newssift and you will see why. I want news, not a logic puzzle. The NYT will be in the same pickle.
- A single title has a very tough time attracting enough traffic and pay the bills. The reason is that mass is needed. The online “mass” has two components. You need lots of content that people really want. And you need eyeballs. I don’t think the NYT can deliver on the “mass”.
- News is one of those information types that has one meaning in the print world and another in the online world. Traditional publishers are not in the real time business. Users of Facebook and Twitter, among other services, are. Governments generate news and don’t charge for it. Some individuals generate news and don’t charge for it. Some trade associations generate news and don’t charge for it. You get the idea. Why pay for the NYT value add which consists of opinions, less than real time turnaround, and the notion that an “editor” knows better than an algorithm? In today’s fast paced world, I trust the algorithm, not traditional newspaper methods.
The NYT demonstrated that it did not understand online when it broke its exclusive with LexisNexis decades ago. The NYT provided it could not sustain a for fee online business when it started on run by my friend and former NYT big wig Jeffrey Pemberton. It provided it could not think like a Web company with its dithering about how too leverage the NYT content over the last decade. Now you want me to believe the NYT has it figured out? The goose is addled, not stupid.
What happens when there is no magnetism? Nothing sticks. That is, quite to my dismay, what is happening to newspapers in general and what will happen to the NYT in particular.
Stephen E Arnold, January 18, 2010
Darn, a freebie. I will report this to the Government Printing Office, an outfit familiar with publishing.
Google and the Real Estate Squish
January 18, 2010
When I was putting the finishing touches on Google: The Digital Gutenberg, I did some testing of the “old” Google Base. That service, before it underwent a major overhaul, included job listings and real estate listing. You may have stumbled upon real estate information when you were searching Google Local. I found that for certain areas, the system would provide pictures of houses for sale and in some cases backlinks to more detailed listings. If you navigate to Google Local and run the query “condominium Baltimore Maryland” you could (at 9 24 am, January 17, 2009, see this result set:
I have written extensively about various Google technologies that make this type of service possible. These include the programmable search engine invention and the work of the dataspace team, among others.
I read in “Google to Scoop Up Real Estate Sites” that some talk about Google purchasing real estate services. My research indicates that acquisitions are an easy way for Google to acquire expertise. The potential of Google’s providing a meta service to organize and make coherent the patchwork of services related to real property has been on the Google radar for years. My recollection is that Google patent documents from the early 2000s reference these types of applications.
When thinking about real estate, it may be helpful to keep in mind the range of services that a real estate transaction requires. My hunch is that real estate is one exemplary application of Google’s approach to online services.
To sum up, if the publishing and telco sector thought that Google was disruptive, wait until the real estate food chain figures out what’s about to happen. Once again: when you see overt instances of a Google application, it is too late. This is the gap problem that befuddles a number of companies affected by the Google’s expanding technical domain. Visualize a hard copy publication containing houses for sale and rent. Visualize a Google real estate service on a mobile device. Yikes, bad news for the directory crowd do you think?
Stephen E Arnold, January 18, 2010
Ah, gentle reader, no one paid me to put this shameless plug for my Google monographs in this blog. I will report this to the US Department of Housing & Urban Development.
Amazon and Traditional Publishers Anger Some eBook Buyers
January 17, 2010
Let me point out that the hype about eBook readers is entertaining. But the existence of eBook readers will not create overnight more people who buy and read lots of books. I use an eBook reader because I don’t have to carry a bunch of books on a long international flight. I read most of the way, so eBook readers allow me to carry one printed book (usually a small one about math) and a Kindle jammed with many different things. The book stores used to love me. Now I don’t bother. I order traditional books online and steer clear of the gift card and book light shops that book stores have become.
The article “Kindle Fans Punish Publisher For Delaying Ebook Releases By Giving Books One-Star Reviews” points out one of those delicious unexpected consequences type anecdotes. Publishers want to put out a new book like I, Sniper in hard copy and then later release an eBook version. This is one of those great ideas the folks who don’t understand the excitement that online often triggers. Annoyed book buyers have been giving books lousy reviews on Amazon.
To me the most interesting comment in the article was:
HarperCollins — one of the leading supporters of these silly “windowed” releases — is discovering that its well-hyped book Game Change is filling up with one-star reviews. Going against what your consumers want is almost never a good idea.
Too bad I will be in Europe Monday. I will have to check and see what the traditional publishers and that fine outfit Amazon will do to get book buyers to lay on their side and pant. Is this a job for the Dog Whisperer? Probably.
Stephen E Arnold, January 17, 2010
A freebie. Because this is about publishing, I must report non payment to the GPO.
Paywalls and the Unthinkable
January 16, 2010
If you like surveys, you may find “Pay Walls Will Fail: Nobody Wants to Pay for Online Newspapers” interesting. If you work at a newspaper planning on making big bucks from for fee electronic editions, you may want to skip this blog post. The survey presents data that alleges lots of people will not pay for newspaper content offered on a for fee basis via the Web. Big surprise? Nope. Not many publications have sufficient content to pull enough online revenue to pay the bills. There were a couple of points in the write up of the survey data that I found notable.
First 10 percent of those in the sample of 2,000 people don’t read a newspaper. Yowza. I think that percentage will grow as oldster like me head to the big computer store in the sky. Second, a surprising 23 percent are willing to pay. That percentage struck me as high. In my experience, the pull of electronic content is a fraction of the audience for a traditional printed publication. The reason is that those who like paper and ink are not too keen on the online or electronic experience.
The unthinkable for newspapers and magazines spending big money on electronic publishing systems is that paywalls won’t work. So what’s plan B?
Stephen E Arnold, January 15, 2010
A freebie. I will report this to the Coast Guard. You know that is the outfit partially on call when ships and other constructs sink.
Search Merging with CMS
January 13, 2010
When you have a CMS “hammer”, you have the opportunity to see an information problem as something that can be pounded with CMS. Let me be upfront. Most organizations are not in the information business. The idea that Big O’s tires in Kentucky is an information company is not just silly; it’s a financially imprudent assertion. Big O’s is a retail operation that sells tires and services. The company’s Web site is a marketing is a marketing effort, but when you need tires for your Hummer with a gun mount, you have to haul on over to the closest Big O’s, pony up cash, and get your tires mounted, balanced, and bolted on. Sure, information is important to the Big O operation, but like many other businesses, Big O’s moves tires. Information is an enabler, sort of a digital lubricant. A person dressed up in a Daniel Boone outfit holding a sign that says, “50% off Tires. Today only.” is information. But the pointy end of the business is selling tires.
Just hop right into the CMS tanning bed. It will make you look and feel great. Oh, there may be some risks, but what’s more important? Looking great or becoming a human Blutwurst.
When I read CMS Wire’s short article “MySource Matrix” I was surprised that search is becoming part of CMS. Yikes. CMS, content management systems, refers to a bunch of software components that perform integrated content operations for Web sites. There are document management systems that help nuclear power plants keep track of engineering change orders. And there are really expensive enterprise publishing systems from Hewlett Packard and StreamServe that manage and output certain types of enterprise information. I grant that when you can’t find a document, you can’t do much with any of these systems. So, search is a utility. Search in any of these three types of content systems often is not particularly good. Vendors license “stubs” stick them in CMS and related systems so when more features are needed, the vendors can turn on the taxi meter. Software cannot put an editorial sense into an organization. Humans have to do that, and humans often are not able to perceive the problem or its optimal solution when basking in the vendor’s tanning salon.
Here’s the passage from Squiz that caught my attention:
They’ve [Squiz, Funnelback, and MySource Matrix] chosen this direction because they see the lines between CMS and search blurring, where some projects may need search-based vertical applications rather than starting with a separate CMS and search library. According to Morgan [Squiz executive], this approach will reduce integration costs and increase access to data across an organization.
Note: Squiz owns the Funnelback search system. You can see this in action on the Australian Resource Centre for Healthcare Innovation or ARCHI.
Most CMS, DMS, and enterprise publishing systems are complicated beasties, and each has a contribution to make to certain organizations, the path to a functioning, easy to maintain content system can be a long, difficult one. In my experience, CMS means managing a Web site. CMS has been stretched into DMS territory, and some of the vendors with the biggest marketing horn have floundered and ended up chum for the M&A crowd. The document management systems that focus on a specific content purpose like the aforementioned ECOs work well, but one needs to have an records management specialist handy. The enterprise publishing systems are not widely known outside of certain market sectors. These cost a lot of money and suffer from one fatal flaw in my opinion. Most lack an information infrastructure service or foundation. No foundation, the structure built on it is dicey.
This notion of having everything in one place so anyone can edit, repurpose, and search is a great idea. Today, the cost of achieving that utopia can be high, both in time and money.
I can see the direction this marketing angle will lead. Thank goodness I am old and won’t have to deal with the wackiness these big marketing ideas unleash on cash strapped organizations struggling to keep their systems from breaking the bank each time those systems crash. There’s a lot of opportunity in content, but fuzzy thinking may not be what Boards of Directors and CFOs want.
Stephen E Arnold, January 13, 2010
I want to disclose to the Office of Management and Budget that I was not paid to point out the financial issues of fuzzy thinking. I bet this article was a surprise to them. Don’t Federal content and document managements systems work like spinning tops?
Free Complex Products: Sign of Revenue Starvation?
January 12, 2010
Here is a hypothetical. You are sitting in the airport. A young woman sits next to you and examines the engineering diagram for a CPU with 1,000 cores. You ask her, “What’s that?” She says, “The basic building block of Google’s hyper grid architecture.” You look at her, glance at the diagram, and wonder what the heck she just explained to you.
That’s information without context. You don’t know what you looked at. You don’t know what a hyper grid is. You don’t know why Google needs an architecture. In short, you get a peek in Messrs Brin and Pages techno-think and its worth bupkis.
I learned from one of my two or three readers that Dialog Information Services, was giving away free online searching for a couple of months. That is big news to me. ProQuest, a commercial database publisher, bought Dialog from Thomson Reuters and aims to make it pay off big time.
The story “Dialog Offers Free Searching of Selected Cengage Files Through March 30th” appeared in a publication called the Resource Shelf. Aimed at info pros, the Resource Shelf covers some of the machinations in the world of former online superstars like LexisNexis and the aforementioned Dialog Information Services. (If you resonate with ss cc=7600 AND ESOP AND UD=9999, you know this service is not what it once was. Today’s online searcher has little interest in where data originates, editorial policies, and command line searching on systems written in part in PL/1 and running on big honking machines.
The reference to “Cengage” refers to a spin out of Thomson Reuters. Yep, the same Thomson Reuters that sold Dialog to Pro/Quest. If you are like me, it seems that Thomson Reuters got out of the commercial online business and now its former kissing cousins are teaming up to pump up usage of these commercial databases.
Most online users today don’t think too much about paying $0.25 to print a title while paying connect time to outfits like Tymnet. Lawyers, at least some lawyers, still do this. Patent researchers still fork over big money to look at special databases containing publicly accessible patent data. Certain chemists love—absolutely love—searching for chemical structures using the Chem Abs super service.
The key point in the Resource Shelf’s write up was, in my opinion, this segment:
“During this time all DialUnits, Connect Time, and Alert Profile charges will be waived to allow customers to search these files and create and run Alerts profiles at no charge. Output pricing such as full formats and Alert prints will be charged at current rates.”
What this means is that “free” applies to the part of the service that does not generate the big bucks. What makes money for commercial online services? Online types (looking at a record in electronic form) and offline prints (getting a hard copy of the search results). Note that if your query returns zero useful results, the traditional customer friendly approach is to charge for the privilege of finding out that there was no useful information in the database you query. Lawyers love this sort of zero results is good information. Most people don’t.
In fact, the commercial online services have to get out of their historical approach to online and find a way to attract new users and generate meaningful new revenue. Here’s why:
- Google is good enough and free.
- Commercial database publishers are in a market squeeze arguably more problematic than the mostly inept content management system vendors find themselves. (CMS doesn’t work too well either in my opinion.)
- Enterprise software vendors are putting code shims in place to provide certain high value information within other enterprise applications. Data.gov might be immature, but it sure suggestive.
- The costs of running an outdated infrastructure with data that change less frequently than I paint the log cabin in which I live don’t match the real time demands of 20 somethings
- The expense of creating a commercial database is creeping up. The mom and pop shops cannot compete with the more sophisticated operators like Ebsco, one of the big dogs in the high value information business.
Add this up and what do you get? Not too much. I think it is a marketing play that communicates that both Dialog and Cengage may be grasping at straws. Why? Go back to the hypothetical with which I started this write up. Most people won’t know what they are looking at when they run queries against these databases:
80 Aerospace/Defense Markets & Technology
13 Business & Management Practices
88 Business A.R.T.S.SM
479 Company Intelligence
275 Computer Database
18 F&S Index
583 Globalbase
149 Health & Wellness Database
150 Legal Resource Index™
47 Magazine Database
75 Management Contents
570 Marketing & Advertising Reference Service
111 National Newspaper Index
211 Newsearch
649 Newswire ASAP
160 PROMT (1972-1989)
148 Trade & Industry Database
93 TableBase
So what’s the number. That’s the Dialog number which you enter with the command “b 160”. See what I mean. Giving away free information without context means zero, maybe less than zero because a potential customer may be turned off when paying for outputs.
I don’t go to the real “library” any more. I use my own online files and free online resources. That’s the problem. When someone from the commercial database world does not use his own products, something has changed. Free won’t bring back the bad old days of traditional online services.
The field of battle has shifted. The free offer underscores how much of a gap exists between the former giants of online and the new services from other vendors. There’s no 1,000 processor architecture available that can alter a business model that worked 30 years ago.
Stephen E Arnold, January 12, 2010
I state that I was not paid to point out that free with a tiny footnote that explains the not free part of this Dialog offer. I shall report this pitiable excuse for a non-compensated write up to the US Postal Service, another traditional institution hit by new technology and changing user behavior. Where has all the junk mail gone?
Copyright and the Generation Angle
January 12, 2010
Short honk: If you are into the copyright battles now underway, you may find “The Copyright Bubble” interesting. At a minimum, it makes clear that a demographic blip is part of the problem. The thought I had was that parents of copyright ignorers may want to take another run at changing their children’s behaviors. If a child—now 25 –embraces the copyright bad mentality, perhaps more aggressive parental action is needed. The implication of the write up is that when old folks head to the traditional heaven where the Internet does not work, copyright will be okay. Failing that, the author of the Copyright Bubble may be correct.
Stephen E Arnold, January 12, 2010
I know the disclosure ruling became effective on December 1, 2010. It is the new year and I still am writing this baloney for no money. I think I will reveal this fact to the Marine Mammal Commission.
Demand Media in the Hot Seat
January 12, 2010
Bulk content producers are the latest next generation content business that irritates the poobahs in “real” publishing companies. The DNA of Demand Media marries MySpace.com with writers hungry to get their name in the Google index and earn some cash achieving this goal. That’s a potent combination. I must admit I don’t see much to raise my feathers. The database business is built along similar lines. Demand Media adds one or two twists; namely:
- Writers create content, post it to the Demand Media’s Pluck system, index the story, and get paid. No annoying human editors slow down the process.
- Media companies buy these stories, slap their label on them, and sell them in other publishing entities. Demand Media lists some of the media superstars who find a cheap source of good enough content ideal for their readers and the CFO’s blood pressure.
- New investors include some media savvy outfits; that is, smart money from Goldman Sachs, 3i Group, Generation Partners, Oak Investment Partners and Spectrum Equity Investors.
You can see a list of some of the Demand Media customers in the graphics on the Demand Media Web site that USA Today seems to be a customer of some Demand Media services.
When I read “Demand Media May Be Bad for Social Media but Not for Journalism”, I was surprised that the criticism of a company producing content would extend to social media. Here’s the passage that caught my attention:
I believe Demand Media is more of a threat to social media communications than it is to journalism and journalistic standards because of the kind of content it provides and what it does by providing search optimized content for corporate sites and evergreen content for the news industry.
With SEO undergoing seismic shocks, content has become a hot commodity for some Webmasters. Most companies can’t write too well or quickly. Demand Media has a method that generates several thousand stories a day. The company allegedly optimized the content, although I think this type of numerical recipe is like Macbeth witches’ brew. A great stage effect. A site with zero content can obtain Demand Media content. The inclusion of content might be just what the PageRank doctor ordered. Who knows?
Demand Media is not a “real” publisher. The coinage of the term “content farm” was a stroke of genius because it made it possible to discuss blogs, semi real publishing, and real publishing in a more interesting way. The idea is that a blog may be written by a few people but we know that blogs are not “real journalism”, according to some experts. The “real publishing company” engages in a centuries old tradition of picking content, paying a writer to write to the needs of the market as the publishing company sees them. This top down approach is where the notion of “knowing best” and “quality writing” emanates. The “content farm” is some weird beast that is worse than a blog and concerned less about “quality” than a traditional publishing company.
Baloney. The “content farm” is an information factory just like units of the Bureau of National Affairs, LexisNexis, West Publishing, and most commercial database companies. But “content farm” is way more suggestive than an “information factory”. What’s happening is that a phrase is making it possible to have a discussion about a business method that has been around a long, long time.
What’s happening is that certain high volume content production methods are being applied to different markets and at a price point that is appealing to some customers and to Webmasters who need a way to get traffic to a Web site.
Lots of talk over a business method that has been around for decades in electronic information. This is one more example of folks not knowing what they don’t know. In this case, the chatter is interesting but unlikely to halt the shift from top down content generation methods to alternatives.
The question I am considering: What happens when Google deploys its automated content generation technologies? I am looking forward to another big argument because when Google moves it will be too late to do anything about smart software that can write news and other types of documents with zero humans. None. How about that for low cost production. Demand Media pays humans and Google won’t have to. That will be something to see unfold.
Stephen E Arnold, January 12, 2010
A freebie. Thank goodness there seems to be an endless supply of regulatory authorities concerned about who pays me to write a blog article. Today my boss is the Department of Agriculture, a fine group.
The Skiff May Not Be a Magazine Industry Life Preserver
January 11, 2010
TechCrunch’s “Can the Skiff Save the Magazine Industry?” strikes a good balance between hope and reality. Media giant Hearst, like other publishing outfits, are looking for a digital alternative to paper. If you are going to float an industry, you need one heck of a life preserver. TechCrunch said:
Skiff isn’t in this game to make hardware. They’re in it to save their industry from imminent demise. Magazines, as they exist now, are expensive artifacts of an industrial process that has been refined over the past century. They are eye-catching pieces of typographic art and they contain some of the best writing of any generation in a package that appears on a monthly basis and is sold or mailed to readers in paper format. But – and here’s where Skiff comes in – there is no perceived value in print magazines anymore. They are expensive to produce and circulation is falling drastically, resulting in a panic in the industry. The solution? Subsidized ereaders and reading services that will keep the subscription model from failing. The Skiff is the first of these efforts and, if first mover advantage remains true, they may be the winner.
Maybe. But the problems of the magazine industry were evident when Bill Ziff, a pretty sharp magazine guy, decided that magazines were not a good business in the early 1990s, an e reader is not going to reverse what seems to be an irreversible decline. TechCrunch identifies the obvious problems: the environmental costs of paper, declining circulation, and advertisers who want more than a 32 page publication mailed to a person like me who rarely looks at magazines any more.
I would add to the TechCrunch comments one point that few like to talk about; namely, the killers of the magazine industry are the children of publishers, lawyers, and other white collar types. Magazines fail to enchant the teens in my dentist’s waiting room. Last visit, the three teens waiting for a check up ignored the pile of magazines with big names like National Geographic and Motor Trend. The teens were thumbing and finger tapping in tune with a digital world that has little interest in magazines.
My hunch is that a magazine on a dedicated reading device won’t create too many new magazine readers. A percentage of the upper income, 40 somethings will buy a reading device. What the magazine needs is readers, not gizmos. The problem is that the children of upper class, white collar workers are not following in their parents’ footsteps. My son (University of Virginia) and wife (Duke Law) subscribe to the New Yorker. I do too. I like the cartoons and some of the essays but not as many as I did when I was younger. I can’t figure out some of the ads either. The last time my son and I were in an airport together we skipped the news stand. Neither of us buy magazines while traveling. The offerings are expensive, out of date, and an extra thing to carry.
When I commuted from Louisville to New York and San Francisco, I used to load up on the magazines that looked interesting. Now the cover stories don’t have much magnetic appeal.
Maybe government subsidies will work? Maybe magazines can be operated by a charity? Maybe magazines can be owned by Warren Buffet who funds them out of a sense of social significance? Maybe governments will tax Google and use the money to keep ink-on-paper publishing afloat.
The Kindle clones won’t have the buoyancy the magazine industry needs and needs quickly.
Stephen E Arnold, January 11, 2010
Yep, another freebie. I suppose I need to report this to the US Department of Navy, an outfit with some skill in keeping giant things afloat.
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