Mudoch’s Vision Gets a Poke in the Eye
September 6, 2009
The International Business Times ran a story that poked Rupert Murdoch’s plan to charge for news square in the eye. The story you may want to read is “Charging for Web Content No Panacea for Newspapers” suggests that charging for content may not solve the woes of the traditional newspaper industry. The IBT writer marshals some interesting information. For me the most important comment was from a small consulting firm:
Ken Doctor, who leads Outsell’s news publishing research, says publishers need to be more imaginative about how to make money out of news. “The news industry has this myth … that there’s no money online,” he says. Doctor says online ads targeted at particular audiences, which offer better value to advertisers than traditional display ads, still have a long way to go in generating revenue. Better intelligence about consumers’ habits on the Web — while it can be controversial to gather — can lead to far more relevant and powerful advertising campaigns. And rather than asking readers to pay for content, publishers should consider extra-value services like membership schemes, something the Guardian is looking at, he says. “The smart play here is to go with human psychology and not against it, and that is convenience, access, sharing, better social networking connections,” he says. “And you’re forging a deeper relationship with your readers.” Doctor cites as examples of companies that learned early how to make money online Elsevier scientific publishing and Google – the bogeyman of the news industry.
Let’s think about several of these points.
First, the money online requires competencies that the newspaper has not evidenced recently; namely, technical capabilities and financial wizardry. Google’s magical recipe for online revenue leaves other online vendors in the dust. Newspapers have a different definition of technology than an outfit like Google. And Google’s money making method is based on traffic, math, and timing. The consulting firm’s expert is saying words that sound okay, but the gap between what a newspaper can do and making sufficient revenue to return the newspaper industry to its hay days is wide indeed.
Second, the idea of using information about readers is an interesting one. First, the newspaper has to collect useful, high value information. Circulation databases are described as “crown jewels” and the ones with which I am familiar are more like the cubic Zirconias for sale on Fisherman’s Wharf from a street vendor. The high value data requires the core competencies referenced in the preceding paragraph. Without these competencies, the likelihood of doing much beyond the status quo with subscribed data is going to be tough.
Finally, monetizing “convenience, access, sharing and better social networking” sounds great, almost like the silly McKinsey report I wrote about a few days ago. Here’s the problem. “Convenience, access, sharing and better social networking” are already available and becoming more convenient and better by the day. Companies with these types of systems – Murdoch’s own MySpace.com, Facebook.com, and Twitter.com to name three – have to find ways to generate big time revenue. No one has cracked revenue from certain types of online services that is demonstrably sustainable. Instead, social systems seem to wax and wane. Maybe the solution is a giant Microsoft of Google system. But if that takes place, will the newspapers be much more than marginal players? I don’t think they will be much of a player at all. In the area of local information, it sure looks to me as if Craigslist.org and Yelp.com have stomped the traditional newspaper into the dirt.
What I find amazing is that the baloney from blue chip and azure chip consultants never ends. The cherry on top the cupcake of baloney in the consultant’s comments was the reference to Elsevier. Perhaps Elsevier looks healthy because it is a private company and not required to disclose its financial details. A better example would have made this addled goose quack happily. As the consultant’s analysis stands, the addled goose says, “Honk.”
Stephen Arnold, September 5, 2009
Google, Prediction, and Privacy
September 6, 2009
Google is pretty good with predictive mathematics. When I read “Google Urges Support for Proposed Books Settlement,” I was confused. Then I remembered that some Google attorneys work in temporary trailers about a mile from the nerve center next to the employee car wash. The math and physics folks are in the Googleplex. The lawyers are around, just not sprinkled among the wizards. Not surprisingly, the firm’s predictive expertise flags when dealing with matters such as privacy. For example, consider this statement from the article cited in this blog post:
“As we noted in our letter to the FTC, because the settlement agreement has not yet been approved by the court, and the services authorized by the agreement have not been built or even designed yet, it’s not possible to draft a final privacy policy that covers details of the settlement’s anticipated services and features,” Horvath said. “Our privacy policies are usually based on detailed review of a final product — and on weeks, months or years of careful work engineering the product itself to protect privacy,” she said. “In this case, we’ve planned in advance for the protections that will later be built, and we’ve described some of those in the Google Books policy.”
I think I understand. No predictions and “usually”. Maybe the math folks should help out the law folks.
Stephen Arnold, September 6, 2009
Wall Street Journal Spam Campaign
September 2, 2009
Short honk: The Wall Street Journal’s desperate and confused marketing mavens have resumed their spam attack on me. I received another spam email urging me (already a subscriber) to sign up for two free weeks so I will become a double subscriber. As I have reported, the fragile publishing sector is struggling to find a way to generate enough revenue to pay for the 16th century business processes that abound in book, newspaper and magazine companies. Spam is the life preserver at hand. I wonder if the Wall Street Journal crowd has looked into the production companies cranking out the Viagra ads on late night television? Perhaps that is next?
In case you have not seen this bold spam message, here’s what I received this morning (September 1, 2009):
Lovely indeed. I am certain it is highly effective when sent to those who are already customers. I wonder what the WSJ sends to those who are * not * customers. The thought frightens me. I don’t see “red”. I see failure and I think of “red ink”. Publishing companies have quite a bit of that flowing through their books I suppose.
Well, for now I must report that my calls, my letters, and my emails have been ignored by the Wall Street Journal. If I were a real journalist, I suppose I could approach an executive at one of those upscale clubs and just ask to be spared the endless “Two weeks free” emails. Alas, the addled goose will have to document the plight of the publishing companies in this modest Web log.
Stephen Arnold, September 2, 2009
A French Publisher Now Understands the Disruptive Force of eBooks
September 2, 2009
This Web log does not do news. I have hinted that publishers are in a flow that leads over Niagara Falls. Happily a “real journalist” has published a “real” article on this situation. “Book Publisher: e-Books Will Be Our Downfall”. Jordan Golsan is recycling some information, but that is the way in which information moves around the datasphere. For me, the most interesting comment in the write up was:
Regardless, Nourry [French publishing executive] has a point. He claims that retailers like Amazon are paying more than $9.99 for each e-book, thus selling them at a loss. He goes on: “That cannot last…Amazon is not in the business of losing money. So, one day, they are going to come to the publishers and say: By the way, we are cutting the price we pay. If that happens, after paying the authors, there will be nothing left for the publishers.” It’s not clear if that is true or not, but we do know that Amazon takes 70 percent of newspaper and blog subscriptions on the Kindle, with only 30 percent going to the content maker. Further, is it really a bad thing if the publisher is left out in the cold? Reading the rejection letters of hit authors makes one wonder what need there is for publishing houses at all, in the age of the Internet. That’s what Mr. Nourry is so worried about. He is terrified that authors (and Amazon) will realize that they don’t really need his industry to get things done.
In my opinion, the river of red ink is rushing forward. I wonder what global company offers a full service “digital Gutenberg” for authors to use—no traditional publisher required, of course?
Stephen Arnold, September 2, 2009
Scripps Runs the Deckchairs on the Titanic Play
September 1, 2009
Short honk: BizJournals.com’s “Scripps Restructures Newspaper Division” reported a reorganization of the Scripps’s newspapers. I did not understand the distinction of regional and mid-sized newspapers. Now I get most of my information in electronic form. Upon reading the news item, I thought about the band playing as the Titanic’s passengers boarded life boats and the crew’s moving deck chairs around in the 1958 film “A Night to Remember.” Just my opinion.
Stephen Arnold, September 1, 2009
News Corp versus the BBC, Internecine War Brewing
August 31, 2009
Read the BBC news story “Murdoch Attack on ‘Dominant’ BBC. Note the following comment:
Mr Murdoch (the son, not the big dog) said free news on the web provided by the BBC made it “incredibly difficult” for private news organisations to ask people to pay for their news. “It is essential for the future of independent digital journalism that a fair price can be charged for news to people who value it,” he said. News Corporation has said it will start charging online customers for news content across all its websites.
In a high class mud slinging rejoinder,
Former BBC director general Greg Dyke said Mr Murdoch’s argument that the BBC was a “threat” to independent journalism was “fundamentally wrong”. He told BBC Radio 5 live: “Journalism is going through a very difficult time – not only in this country but every country in the world – because newspapers, radio and television in the commercial world are all having a very rough time.”
Quite an exchange. Both outfits find themselves in the headlights of users who are embracing different methods of getting information. The likely escalation? Knitted brows and hard stares at the country club.
Stephen Arnold, August 31, 2009
Google: Last Library
August 31, 2009
Cade Metz’s write up “Google Book Search. Is It the Last Library? Uh, Yes.” will cause some excitement among the anti Google Book contingent. Mr. Metz, like most Google watchers, is a bit like a Kentucky Derby horse when the gate opens. The stallions charge forward. The race is exciting, but it is tough to pick the winner until the first horse crosses the finish line. So, the race is on.
My thought is that Google and its book program is old news. I think that books are going to lose traction in the years ahead. I like books, but the costs and environmental impact suggests that books may become less a mass medium and more of a collectors’ sport.
I do not think Google is the “last library”, however. I think that Google’s focus is on the past. The future is in new types of content. I know the arguments for books. I have written eight or nine myself. Google’s vision for books is likely to distract some folks from watching other and, in my opinion, more important initiatives at the company.
Let me cite a couple of examples and then remind you, gentle reader, that this information appears in my Google studies which are for sale as PDFs from Infonortics.com. Here you go:
- Google’s push into education. This is a big deal and books are a contributory stream, not the Mississippi River that is being carved by the Google glacier.
- Google finances or what I call Google Global Bank. Check out Google’s array of money-related services. Big doings in that sector.
- Google and the motion picture sector. The teaming with Sony is one leaf on a fast growing evergreen.
Google Books is a hot topic, but like many Google tactics, the excitement makes it difficult to see other disruptions the Google is setting off. If Google quit scanning books tomorrows, how many authors would assign Google copyright so that Google could sell their books to Google search users? I know I would toss my four publishers overboard in a heartbeat. Google can sell. Getting rights directly from me eliminates a problem and snags the higher value current information to boot.
Stephen Arnold, August 31, 2009
What Annoys Europe about Google Books
August 31, 2009
Short honk: The Financial Times’s “Europe’s Digital Library Stuck in the Slow Lane” contains an interesting comment:
…what really annoys the European book industry about Google’s ambitious digital library project is that only US internet users will be allowed to browse in it.
Forces in the US are lining up to derail Google Books. Several observations:
- If the service is stopped, who in the US will pick up the ball? Libraries, the Library of Congress, outfits like Elsevier, Thomson Reuters, or Wolters Kluwer?
- What if Google stops, then shifts its focus to scanning books in more friendly climes? Looking forward, the knowledge value of the collection may put the US in the Europe pickle barrel. No access.
- What if Google builds a book data center and anchors it outside the three mile limit? With a partner in Europe, the legal eagles will have a fine time figuring out which book, what jurisdiction, what copyright, and where the digital instance “is”.
- What if students and researchers decide to publish their books using Google’s various “digital Gutenberg” systems? With “new” books flowing directly into the Google, what happens to publishers who need compliant authors to keep the pipeline filled?
I don’t have answers, but I raise the questions and provide examples in Google: The Digital Gutenberg?
Stephen Arnold, August 31, 2009
Why Magazine Mavens Are Not Likely to Create Googles
August 27, 2009
I did a double take when I read “Apples, Oranges And Journalism Revenue Print And Online.” I assumed that the publishers referenced in the TechDirt article were on to a fresh angle with regard to revenue. After a moment’s reflection, I realized that TechDirt was closer to right than publishers. I also had a nano epiphany. A publisher or a group of publishers are not likely to create a Google or a semi Google. TechDirt’s analysis nails it:
Rather than looking at revenue per user, the real goal should be looking at maximizing revenue, period. And to do that you look at the overall trends of where revenue is growing and where it’s shrinking — not on the average revenue per user. Focusing on ARPU simply makes you ripe for disintermediation from someone who focuses on where the market is heading, rather than how to squeeze the most out of each user.
A Google-like innovator figures out revenue without worrying if the money fits the “old” or largely discredited business school thinking. A secondary thought is that magazine publishers who don’t get the revenue idea are likely to have a tough time coping with some of the new information services coming down the information superhighway. Old term “road kill” but a candidate for currency once again.
Stephen Arnold, August 27, 2009
Is Search the Answer to Short Attention Spans
August 25, 2009
I thought about the essay I read that danced around the subject of Google making me more stupid. The current variation on this theme appeared in the UK Daily Mail. The story that caught my attention was “Digital Overload Is Making Us More Easily Distracted.” The premise struck me as odd. Someone digital plumbing is altering how a human concentrates. Hmmm. I thought humans made choices about concentration. For example, I decide to read a book. I decide to read and focus my concentration of the act of reading. Ask the goslings. When I concentrate, a person can walk up to me and touch my shoulder. I will jump and sometimes let out a yelp. I concentrate. Digital inputs don’t mean anything to me when I focus. I blot out distractions.
Not for the Daily Mail’s writer David Derbyshire. He wrote:
Some neuroscientists argue that the brain is geared to handle one thing at a time. When asked to juggle several things at once, it is forced to flick frantically between them, like a performer spinning plates. This puts the brain under stress and means it doesn’t perform as well, it is claimed.
Ah, the Daily Mail is not talking about individuals who can concentrate. The Daily Mail is talking about researchers who have studied a sample composed of people who cannot concentrate because these individuals ** choose ** to put themselves in situations where distractions are the norm.
I buy that. The young driver I saw run over a bicycle was not paying attention. I thought I saw a cell phone or an MP3 player. No one was hurt, but that bicycle cannot provides its side of the story. What’s the fix? None. If people ** choose ** to create an environment flush with distractions, those folks will have a tough time concentrating.
I don’t need a university researcher to “prove” that. Obviously the Daily Mail and its editors did.
I had hoped the article would talk about the role of search. It did not. At least the author of the Google-is-making-me-stupid essay challenged my thinking. The Daily Mail’s article did not in my opinion.
What can top this study? How about USA Today’s write up about social networks making students dip into self love?
Stephen Arnold, August 25, 2009
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