NewBizNews Conference Videos: Community Engagement and Marketing

Posted on 24. Nov, 2009 by .


Mary Ann Giodano of the New York Times leads a panel that focuses on how local sites can grow an audience.

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NewBizNews Conference Videos: Understanding Business Models

Posted on 24. Nov, 2009 by .


Jennifer McFadden, business analyst for the project, and Jeff Mignon and Nancy Wang of Mignon Media drill down into the spreadsheets of the hyperlocal and new news organization business models.

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NewBizNews Conference Videos: Business Models and Q & A

Posted on 23. Nov, 2009 by .


At the New Business Models for (Local) News Conference on November 11, Jennifer McFadden (business analyst for the Knight Foundation-funded CUNY Project) and Jeff Mignon and Nancy Wang of Mignon Media present business models for hyperlocal sites and a new metro news organization.

CUNY Graduate School of Journalism Professor Jeff Jarvis, business analyst Jennifer McFadden, and Jeff Mignon and Nancy Wang of Mignon Media follow up their morning presentations at the New Business Models for (Local) News Conference with a Q & A session.

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NewBizNews Conference Videos: A New Ecosystem of News

Posted on 20. Nov, 2009 by .


Videos from the New Business Models for (Local) News Conference and HyperCamp will be posted over the next week. Here, Jeff Jarvis presents an overview of a new ecosystem of news.

The presentation: (Hat tip to Prezi for their great new tools.)

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On Murdoch & Google and news

Posted on 19. Nov, 2009 by .


I appeared on NPR’s On Point today to discuss Murdoch v. Google with Michael Wolff and Steve Brill and also got to talk about our New Business Models for News Project. You can listen here.

The show’s blog quoted me thusly:

But News Corp isn’t the only one making the mistake here. I think the mistake that Google has made in this – and I’m an admirer of Google, I wrote a book to that effect – but I think that Google thought that they could become friends with the newspaper industry. And the newspaper industry isn’t looking for friends. They’re looking for enemies they can blame for the problems that are actually their own from the last fifteen years of inaction in the face of this dying light. And so it’s impossible for Google to become friends with the newspaper industry.

(Our project was funded by the Knight Foundation, the MacArthur Foundation, and the McCormick Foundation.)

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The opportunity of bankruptcy

Posted on 19. Nov, 2009 by .


Tweet: How bankruptcy can help a newspaper get theah from heah. Don’t squander it. **

I fear that Tribune Company – and other newspaper companies – will come out of bankruptcy having squandered the opportunity it presents to rebuild from the ground up.

At the New Business Models for (Local) News Summit at CUNY last week, my friend and mentor Jim Willse, late of the Star-Ledger in New Jersey, asked us to create a model for an existing news organization to morph into what we proposed as the new structure. That’d be painful and thus controversial, I said, to which Willse – never one to mince words – responded, “No shit.”

Can they get theah from heah? I’m not sure. A company that employed more than a thousand workers may end up employing just a hundred as it gets rid of printing and distribution infrastructure – the barrier to entry that became a barrier to change. Those shut-down costs are tremendous (that’s where bankruptcy helps, though). The cultural shift for people who remain is huge (I have spoken with many newspaper and magazine folks lately who – like me – held out hope that it was possible … until they gave up and quit). The need to reinvent business methods and models is urgent. And in the end, if it all works, the new company will be much smaller, a fraction of its former size, which is hard for executives, analysts, and shareholders to swallow – but it’s profitable and thus sustainable and that has to be the ultimate goal.

To make this volcanic transformation, I say a newspaper must start by getting out of the printing business (as Dave Morgan argued at our CUNY conference last year). Oh, it may still print a product as long as enough advertisers and readers stick with it to make it profitable and as long as it is valuable to promote the the digital brand of the future. But print can no longer drive the business; it’s just not sustainable.

When the Ann Arbor News folded this summer and was replaced by its owners with an online, community-based site, they chose to continue publishing twice a week to continue distributing coupons, circulars, and ads; it is printed by another paper in the company. [Disclosure: I consulted on the project.] Similarly, in the UK, the Birmingham Post went online and went weekly in print. My reputation aside, I’m not religiously opposed to paper. But maintaining a printing business is no longer an advantage; it’s a burden. So I say get out of the business and outsource whatever printing you do.

What about distribution? Well, as the circulation of the paper dwindles to naught, its value as a delivery platform also falls – to the point that coupon companies and stores like Best Buy will have to find alternative means of distribution. I think there’s a nice, if transitional business there for someone. Should it still be the newspaper company? Well, I’d give the same advice that is given to every startup: concentrate on one thing and do it well, get rid of the rest. So I’d say the paper should – as many pretty much do today – outsource its distribution.

Ad sales? That’s perhaps the toughest transition. Classifieds aside (they’re permanently lost anyway), newspapers are built to sell mass metro audiences to large advertisers. Sales staffs don’t drum up new business so much as they manage existing lists. Those folks aren’t likely to be able to sell entirely new kinds of advertising highly targeted marketing help for whole new populations of smaller merchants who couldn’t afford the newspaper before. Beside, such a staff doesn’t scale when you have to sell to so many new customers in networks. Build-it-and-they-will-come automated platforms don’t work; advertising still must be sold. This is why, in our models, we projected new sales forces – citizen sales – arising to sell at a local level. So for our transforming paper, I’d build networks of local sites and local sales and keep just enough of the old people to sell the big, old accounts that remain – if they can be re-educated.

Marketing is all but gone. If this newly constituted service isn’t sold by its public – if that public doesn’t collaborate with it and feel an ownership stake – then it will fail.

Now for editorial: I’ve written often about the new roles journalists will take on. As the marginal cost of information in a community falls to zero – as the internet and its tool enable communities to share much or most of what they know and need to know – then the question for journalists is how they add value and fill in gaps with reporting at the core as well as curation, community organization, and training. In our models, we forecast almost as many journalists as worked in the old paper newsroom, but they work for – and often own – more than a hundred companies. The core of journalists working at the new news organization is smaller.

Bankruptcy enables a newspaper company to shed its past. It can get out of contracts and leases for paper, printing plants, delivery, trucks. It can also get out of labor contracts, reducing severance costs. That is terribly painful but I fear it is as inevitable as the end of the ITU (the typesetters’ union). It offers a one-time chance to rethink, reinvent, and rebuild the company for the future. Is it better to stretch out the pain and never get anywhere? And if tough decisions and actions are not made, the likelihood that the company will die and all will be lost only increases.

The Minneapolis Star-Tribune has already come out of bankruptcy but without such a radical transformation. It, like other news companies, is taking out bricks a few at a time rather than building a new kind of company. That’s the opportunity I fear other bankrupt newspapers – Tribune Company, the Philadelphia Inquirer, the Chicago Sun-Times – are squandering. The same can be said of other industries.

To take advantage of bankruptcy, a company has to have courage and bold visions of the future. Do newspaper companies? So far, we haven’t seen evidence of it. But it is possible.

** At Craig Newmark’s good suggestion, I am going to try to summarize posts – longer ones, at least – at the top. Old fart that I was, I at first thought of this as a UK-style subhed. But then I realize that the appropriate model is to put it in a tweet. So I’ll try that.

(Our work is funded by the Knight Foundation, the MacArthur Foundation, and the McCormick Foundation.)

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Next Steps: What We Heard, What We Need

Posted on 19. Nov, 2009 by .


At the end of our New Business Models for (Local) News Conference last week we asked a question we’ve been asking since our first go-round three years ago: What’s next? What do we, as practitioners of journalism, need to do to help sustain journalism in this new age?

It seems there is still a simple two-word answer: More training.

Sure, responses were all over the map (the full list is posted below the jump) and I’ll get to some of those in a moment. But, the most common request at root is for more help understanding our new media environment.

Some of the independent, hyperlocal startups (dare I call them bloggers?) in the audience said they could use help with everything from basic research and editing practices to selling and analyzing ads to understanding business finance. They also want to build a stronger indy-web community that, at a minimum, would be a forum to share best and worst practices.

The churched journalists in the room asked for some of the same instruction: editing for the web, learning the basics of graphics, and web literacy (tweeting, texting and blogging). But, like the indy’s, the guys inside established media organizations need help with the business side (see Jeff’s post on getting “theah from heah”).

Folks want to see programs for bringing business students into media management (much as we tried to do last summer). A few more suggestions:
– Future conferences organized around specific revenue opportunities – some people also want to have a conference organized around verticals and niche sites.
– Research into what kinds of advertising small businesses need.
– Strategies for making that advertising more valuable.
– Looking at what impact greater bandwidth and mobile devices will have on journalism and advertising.

One veteran journalist told me someone should create a not-for-profit, possibly based in a university, that offers free business consulting services to journalism startups. He said the consultancy could cultivate a thousand test cases for our business models – a much better approach, he says, than getting funding for a lab to test them out in one area (which was another suggestion from the panel).

Finally, here are two of my favorites: training for small communities that have lost their papers and a conference aimed at media in Africa and other parts of the world. It is important to keep these areas, so often left out of the conversation, in our minds.

As I said, there are a lot more topics below the fold. We’ll be doing more work on some or most of these suggestions in the coming weeks and months. Do you have more? Send them along!


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NewBizNews Conference Follow-up

Posted on 13. Nov, 2009 by .


Thanks to everyone who participated in the New Business Models for (Local) News Conference and HyperCamp on Wednesday, November 11. A lot of ground was covered in the numerous panels and we’ll keep the discussion going here on with upcoming posts and video clips. Shout out to Ted Mann of inJersey/Gannett and Jim Schachter of The New York Times for their help.

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Advice for German media

Posted on 13. Nov, 2009 by .


I have an op-ed in today’s Welt Kompakt newspaper in Germany giving my advice to a German mediasphere that I see becoming more protectionist. It’s not online (ironically) but so you can see the play, a PDF of it is here and here. This is my original English text:

* * *

At the Müncher Medientage, I spoke to 500 German executives from my home in New York and dared to give them some advice about their fate. I urged them to learn these lessons from watching American news companies shrivel and die: Protectionism is no strategy for the future. Every company in every industry (especially media) must be reinvented for the post-Guttenberg age—for the Google era. And the only sane response to change is to embrace it and find the opportunity in it.

I have been impressed with the innovation and openness to change I have seen in German media: Axel Springer shifted a large proportion of its revenue to digital; Bild equipped Germans with video cameras to report news; Burda invested in the networks and Science Blogs; Holtzbrinck innovated in its incubator; WAZ created a world pioneer in DerWesten.

But when the times got tough in the financial crisis, I suddenly saw German media looking for an enemy to blame for their problems. The head of the Deutscher Journalisten-Verband called for legislation to condemn Google as a monopoly, an enemy of the press. Dr. Hubert Burda, a digital visionary I greatly admire, urged that copyright law should be expanded to protect publishers, whom he said deserve a share of search engines’ revenue. Chancellor Merkel is considering such changes in copyright. A group of publishers issued the Hamburg Declaration saying that all online content need not be free (though that has always been completely in their control).

Schade. In these pronouncements, I hear echoes of American media’s funeral hymns. I see companies resisting the new reality of the internet age by trying to preserve the old rules of their old industry. Take, for example, Rupert Murdoch vowing to put all his news properties behind pay walls just because that’s how media used to operate—when that will only reduce audience, traffic, influence, and advertising just at the moment when growth is needed most. He is even threatened to block Google. That is simply suicidal.

Though I sympathize with media’s economic nostalgia, I must say that swimming upstream against the internet is futile. The better idea is to go with the flow of the internet, to see and exploit its opportunities.

Rather than fighting Google, learn lessons from it. Google understands the new economics of media. That is why it is successful—not because it exploits old media companies. Those old companies still operate in the content economy, begun 570 years by Guttenberg, in which the owner of content profited by selling multiple copies. Online, there needs to be only one copy of content and it is the links to it that bring it value. Content without links has no value. So when search engines, aggregators, bloggers, and Twitterers link to content, they are not stealing; they are giving the gift of attention and audience. Indeed, publishers should be grateful that Google does not charge them for the value of its links.

This link economy brings three imperatives for publishers. First, it requires them to make their content public if they want to be found. That is their choice, but if they retreat behind pay walls, hidden from search and links, they will not be discovered and they only create opportunities for new, free competitors. Second, the link economy demands specialization: Do what you do best and link to the rest. This specialization also brings a new efficiency that can make publishers more profitable. Third, in the link economy, it is the recipient of links who must exploit their value. That is still the publisher’s job.

Google has earned an estimated 30 percent of online ad revenue because it serves advertisers differently—and better. Here, too, Google understands a new economy, one based on abundance rather than scarcity. Publishers, even online, still sell scarcity as if the internet were print: only so many ad positions for so many eyeballs—what the market will bear. Google instead charges for clicks; it sells performance. Thus Google takes a share of the risk and that is what motivates it to place advertising all over the internet, to create more relevant positions for ads that will perform better for both the marketer and Google. That is why advertising has shifted to Google—not because it is enemy of the media but because advertisers prefer it. We call that competition.

The most important lesson to learn from Google is that it grew huge not by trying to acquire and control content on the internet, as publishers do. Google doesn’t want to own the internet, only to organize it. So Google created a platform that enables others to succeed with technology, content, promotion, and advertising revenue. That is Glam’s model, too, creating networks of hundreds of independent sites and then helping them succeed. I believe that platforms and networks will form the basis of the future of media—and much of the next economy.

At the City University of New York Graduate School of Journalism, where I teach, I am running the New Business Models for News Project [funded by the Knight Foundation], envisioning a profitable future for news if regional newspapers covering cities die. Though national news brands—whether this publication or the Guardian or The New York Times—have a future, regional newspapers across America and Europe are in trouble and some will die. Yet I am confident that journalism in those cities will not die, because there is a market demand for news, which we believe the market can meet.

We believe that news will emerge from ecosystems made up of many players—journalists, citizen journalists, citizen salespeople, volunteers, technologists—operating under different motives and means. Today, in America, we see hyperlocal bloggers earning $100-200,000 a year in advertising; these are real businesses. We see an opportunity to help them make more money by creating local, regional, and national advertising networks. We see the opportunity for a new newsroom to continue beat and investigative reporting and to work collaboratively with these networks. Without the cost of print and distribution, these new news organizations become smaller but profitable.

If you are trying to protect old jobs in old structures of old companies in old industries, then you might see my vision of the future as a threat. But if you embrace change and innovation, then you will see opportunities to reimagine and remake journalism, to find new ways to gather and share news collaboratively, supported by new revenue, reaching profitability thanks to new efficiencies.

Publishers will not get to that bright future by urging government to protect them from innovators and competitors. No, if we want anything from government, it should be universal broadband to encourage society’s migration to a digital economy, and a lack of regulation to assure a level playing field for innovation.

I hope that once the desperation of the current economic crisis subsides, my German media friends will not try to retreat to their old models but will instead continue to invent new ways and to again become leaders in innovation. That is the only sensible path to survival and success.

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The balance shifts

Posted on 12. Nov, 2009 by .


At yesterday’s New Business Models for (Local) News summit at CUNY, I ran what I called a reverse panel with big media folks – NY Times, Washington Post, Gannett, Star-Ledger, Impremedia, Politico – sitting up front but ordered to listen to the wishes and needs of the people in the room. I threatened to cover the big guys’ mouths with duct tape. (A few of them seemed to honestly fear I would do that. I do need to investigate this reputation I’ve garnered.)

The putative war between mainstream media and bloggers has been declared over again and again (myself, I reported a truce three and a half years ago… oh, well). So I won’t act as there aren’t still the lone snipers in the mountains. Bloggers from medium-sized cities had plenty of complaints about the disrespect they see from their local medium-sized media outlets.

But importantly, I did see a shift in the balance of power yesterday. The big media guys on this reverse panel made it crystal clear that they not only respect but need the work of the bloggers/citizens/little-media-guys/whatever you choose to call them. The big guys acknowledged openly that they are shrinking and can no longer even pretend that they can do it all themselves.

For their part, the bloggers also made it clear that they respect and thus want attention – promotion and credit – from the big guys.

Group hug.

We are at various fulcrum points. The big, old media outlets can no longer act as if they have no problems; it’s obvious, they do. The upstarts are beginning to catch a glimmer of critical mass; we see blogs starting up all over and there are lots of new news organizations – most of them not-for-profit – rising in San Diego, Minneapolis, San Francisco, Austin; now they are joined by the for-profit local Politico. Even if you disagree with me that the future of news is entrepreneurial, there’s now no denying there is a future there.

And so the room was filled with people who were, each in his or her own way, building that future and they all recognized that they have to work together to do so. The future of news is also an ecosystem. That’s what became apparent yesterday and that, for me, was the highlight of the event.

* * *

We’re doing our post-mortems on the event at CUNY to figure out what to do better next time – and it’s clear there is a need for more of these gatherings here in New York and, we hope, across the U.S. and elsewhere in the world, bringing together builders. We heard a lot from the room about what they want next: More best practices from the kind of real experience that fed our models…. More practical advice for making money…. More education…. I’ll come back with additional thoughts after my thorough-going exhaustion wears off.

My personal thanks to the team at CUNY – led by Peter Hauck, Jennifer McFadden, and Matt Sollars – for doing great work in the models and the event and to the funders who made it possible: The MacArthur Foundation funded the events (and the prior summit led directly to a request to do the work we presented at this one); the Knight Foundation funded the work on our models and presentation of them at the Aspen Institute; the McCormick Foundation is funding ongoing work on new business models; and the Carnegie Corporation is funding work on hyperlocal labs. We’re also grateful to Mignon Media – Nancy Wang and Jeff Mignon – for their incredible work on the models; David Cohn for his tireless efforts helping us organize the events; Borrell Associates for their data and advice; and all the companies and individuals who participated yesterday. And we want to thank Ted Mann of inJersey/Gannett and Jim Schachter of The New York Times and their colleagues for helping to organize the event. Thanks.

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