Content Bridges

Last Man Standing? NYT and WSJ Move on Metro Markets

kdoctor — Thu, 12 Nov 2009 13:37:16 -0800

It's hard to gauge the impact of New York Times and Wall Street Journal moves into metro markets. They could be simple, print retention strategies aimed, at holding on to valuable print readers -- the magnets for still-lucrative print advertising -- for as long as possible.

Longer-term, it could be a Last Man Standing strategy, figuring that newspaper readers may well scale back their daily reading to a single paper, as they increasingly go digital. Or, it could be toehold, for an expanded digital strategy, adding local options to their national and global products.

So far, all indications are that the simplest explanation -- print retention, small amount of growth -- is the driving purpose. That makes sense: 85% of the overall revenues of these companies is still tied up in print. Give the readers another reason to pay a lot of money for the print sub, and you can hold on to more of them. The regional editions -- the Times in the Bay Area and Chicago and the Journal's announced one in San Francisco (and L.A. and Chicago, perhaps, as well) -- also give the papers better regional ad targeting, especially in categories like finance, technology and luxury.

So far, my reading of the Times' new coverage -- a couple of extra pages in the Friday and Sunday editions -- is that's it not any kind of game-changer. It's good, Times-like coverage, but I doubt that a half dozen stories each of those days (though trumpeted with a Page One "local" sticker) is going to make much of a difference in a buy/don't buy, renew/let it go decision.

Of course, both papers have been in metro markets for a long time. Yet, they've been a supplemental read for newsies, people whose daily education hasn't been complete 'til they've trawled the local metro paper, the Times and/or the Journal.

By definition, that's an older crowd, an elite that has given each of the two papers a few percentage points of household penetration in the cities. The Times hasn't gotten above five percent outside its home market. For examples (from data gained earlier this year):

Boston: 2.3% Sunday & 1.6% Daily
Fort Myers/Naples: 2.2% Sunday & 1.5% Daily
Hartford/New Haven: 3.0% Sunday & 1.9% Daily
San Francisco: 2.3% Sunday & 1.6% Daily
Washington DC: 2.2% Sunday & 1.5% Daily
West Palm Beach: 3.2% Sunday & 2.4% Daily

Given that the Journal's print circulation is now about double the Times -- 2 million to 927,000 -- we'd surmise that the Journal would be two to three times those numbers. That's partly because of the number of its readers and partly because the business-oriented Journal's penetration in New York should be considerably less than the Times, still in part a hometown, general interest paper for New York. The Times home market has been accounting for about 40% of its Sunday sales and about 45% of its daily sales.

So if that's today, let's look at tomorrow.

The Times and Journal aren't entering these markets in a vacuum. We've never seen such activity in local markets as we're now seeing. From public radio stations getting newly news-aggressive to Politico's big DC move to growing start-ups to metro and state investigative watchdogs to the Examiners expanding, we've never seen such ferment around local news. My sense: as metro dailies have cut staff and space, they've left their flanks open, newly emboldening would-be competitors for readers and advertisers.

In fact, the potential connections between and among new and old players -- as just one example, the Times, for instance, has been having continuing talks with KQED, the strong Bay Area public radio station -- are being weighed.

The key here is aggregating as much high-quality content under your own brand -- Journal, Times, whoever -- as cheaply as possible. In the Bay Area, the Times is adding coverage without adding full-time staff; in Chicago, it has partnered with the new, and intriguing, Chicago news coop. In general, neither the Times nor the Journal can afford to add much high-salaried staff to fuel these editions. So partnering is key, though dicey in execution, with logistics, standards, immediacy and other issues always to be worked out between editors traditonally internally focused.

The one exception: the Journal looks like it is adding 12 reporters to a NYC edition. That makes more sense. It's in line with the Journal's head-to-head competition with the Times as it targets the Times' readers and advertisers -- medium-hanging fruit for the Journal. Further, it's personal for Murdoch. Plus, it's worth sending the message of "we're hiring," as the Times cuts back another 100 people in the newsroom. Psychological warfare.

I'm still expecting outside/in, inside/out web national/local products, maybe later in 2010. Why not a Journal or Times module or two on WBUR.org or KQED or MPR News? Why not a Bay Area module on NYTimes.com or WSJ.com. Why not more NPR modules on non-public radio sites? Toggle on, toggle off, depending on your local preferences. The target: increase time on site for both parties, as much as possible.

Nine Questions: Glossy Chron, the Dow Jones Upsell, Chic in Chico and a Week Without the Tribune?

kdoctor — Thu, 05 Nov 2009 21:55:45 -0800

So the newspaper industry is taking a page from indie film ("A Day Without a Mexican"), dailies are hiring execs from the alternative press, and we're seeing new, almost-daily, mating rituals between older and newer news media.

What's going on? Nine questions to start:

How about a week without the Chicago Tribune? Yes, I know the idea is a week without the AP, but isn't the idea a bit behind the public's curve? The latest circ numbers showed that more than 40,000 readers have recently decided to go a week without the paper , down -9.72% to 465,892. It's telling that the Tribune company papers are going AP-less, but their websites aren't. That tells us that precious, and costly, newsprint will be used mainly for local news, but pixel-based newsreading will include the wider world. Which, of course, makes the formerly mass market newspaper a niche -- what happened locally yesterday -- and the web mass. Sam Zell's still on the AP board, which got some good news this week as 50 papers withdrew their "cancellations". (Back in my newsroom days, I always loved "advisory cancellations.") Here's guessing AP will be around in the news business lots longer than Sam Zell.

How do you put a new gloss on the Chron? It seems counterintuitive, but you improve the paper stock here and there, moving in some semi-gloss super-calendared paper. Sure, monthly high-gloss magazines are the only pubs failing faster than the daily press, but the San Francisco Chronicle's move seems a simple, and hardly earth-shaking, one. Christmas, I have on good authority, is still coming. Get some higher-profile advertisers, charge them a bit more than the cost of the better paper, and you have a few more profits. Pre-recession, both the New York Times and the Wall Street Journal -- now both new entrants for targeted Bay Area advertising, competing against the Chronicle -- were doing quite well with luxury ads. Luxe ads will make a comeback, and maybe the Chronicle's new offering will help. Besides, with daily circ down 25.8%, to 251,782, a little better paper costs a lot less than cheaper paper the Chronicle used when it had 525,00 daily circulation, back not long ago, in 2002.

Will alternative weeklies become yet another local competitor to the dailies? The alternatives have survived the recession better than the dailies, but curiously, they've not become big online players. Instead, the Yelps, Craigslists, AngiesLists and OpenTables -- among many others -- have moved into city markets. Now Village Voice Media -- the biggest chain in the country, with 10 bigger-city weeklies -- has launched the Voice Media Group, aggregating its own and other sites. As worlds blend together, the head of the alternatives' trade group, AAN, has just succeeded Scott Bosley as the head of the American Society of News Editors. Rich Karpel starts Dec. 1.

You think Pox News is bad, have you tried Headline News? So Sesame Street is taking a hit for taking on grouchy cable news. But Fox seems high like opera compared to the bad melodrama of CNN's Headline News (HLN). It's hard to believe anyone would pick the station, but many of us are subjected to it, me at the gym. Soundless, I watch its crawls with mouth agape. Yesterday, in just a few minutes: "Pregnant Woman Found Dead," and "This Just In -- Body at Rapist's Home Identified," repeated countless times. It ran with the Garrido case (kidnapper/child molester in Northern California) for weeks, with a headline about bones on adjacent property being checked to see whether they were animal or human, and whose. (Animal, of course.) Macabre, ghoulish, and I think far more hurtful to the watching psyche than the freak shows that talk cable has become. Recall that HLN (Headless News?) surpassed its big sister -- CNN -- in the last ratings cycle, where CNN , the nicest if least watched cable net, finished last.

How well will Dow Jones do with the upsell dance? Much "paid content" strategy at Dow Jones seems to smartly understand that it's easiest -- and cheapest -- to sell new stuff to the customers you already have, especially when many of those can charge it to the company store. So we have the upsell on WSJ Mobile, just launched, and now WSJ Pro. Pro is first being sold to enterprise users -- a new mix of two Dow Jones products, the WSJ.com and Factiva, a rich aggregation of news sources -- and in January, it will begin be offered to individuals.

Aren't we seeing new digital news versions of The Dating Game? You can't turn around without hearing about new combos. ProPublica and Marketplace on an investigation into University of Phoenix. The Center for Investigative Reporting and Frontline on a Carbon Watch initiative, led by the well-decorated Mark Schapiro. CBS and Global Post, tying up around global coverage generally. As the old arteries of high-quality content creation and distribution shrivel, new ones are being forged seemingly every day.

Will public radio grab the regional aggregation opportunity? Readers love aggregation -- from journos' daily check-in of Romenesko to everyone's use of the big news collections of Yahoo, AOL, MSN and Google. Newspaper and local broadcast companies, though, have been slow to make themselves regional aggregators. Now Minnesota Public Radio, beginning to make a move to assert itself as a major online news players, has picked up NewsBobber. Bob Ingrassia, a 15-year veteran of newspapers who is now leaving Internet Broadcasting as he takes NewsBobber to MPR, says it's a quite simple proposition: "How do people sort through it all?" He tells me he manages the impressive, month-old site in the morning and evening and has harnessed all kinds of cool, free tools to rank Minnesota sites and blogs. So think about it: once again, a guy does in his spare time what better-staffed media can't figure out.

Will the Chico experiment be the new chic? It makes a lot more sense to try charging people in a non-metropolitan market with far less competitive news media. So MediaNews' announced pay walls in Chico and York, Pa will be worth watching. MediaNews' Howard Saltz makes this point: "But we are not giving away our premium content for free." The big question for the Chicos, the Yorks and others: What will readers in fact consider premium, and worth paying for? I've long thought that the smaller the paper -- think weekly out in the hinterlands -- the greater chance to get readers to kick in a few bucks extra for online access.

Is that Awl the news that's left to print? Sometimes a spreadsheet's worth more than a thousand words. Check out The Awl's circ charting, something that you won't see coming out of an industry association. But, take your vertigo pills first. Check out top newspapers -- from the Journal and Times to L.A. Times and Washington Post, and see what conclusions you draw.

Circ Math 101: Less is Less

kdoctor — Mon, 26 Oct 2009 09:16:03 -0700

We knew that USA Today's early word of a circulation plunge -- 17%, announced by Gannett two weeks ago -- would probably be a sick canary in a dark coal mine.

Today's semi-annual circulation FAS-FAX numbers for U.S. dailies, though, are still breathtaking. On average, 10.6% down daily and 7.4% Sunday. That's on average, and largely twice as bad as the declines have been over the past four-plus years. Look at some of the individual results, and you understand why the New York Times just announced that it is taking another 100 jobs out of its newsroom and why other newsroom (and, of course, wider) cuts may increase -- not decrease -- as Wall Street indicates that an overall economic recovery will be a 2010 reality.

Daily, these losses, as examples:

L.A. Times: 11%
Houston Chronicle: 14%
Boston Globe: 18%
Star-Ledger, Newark: 22%
San Francisco Chronicle: 26%

The Sunday losses, same papers:

L.A. Times: 6%
Houston Chronicle: 6%
Boston Globe: 17%
Star-Ledger: 18%
San Francisco Chronicle: 22%

So what's happening?

More of the same, though now with evidence of a tipping point. Inevitably, for the print product, less is less.

Newspaper readers have hung with their local papers through thick and through increasing thin. The value proposition they now see, though, is a lesser one: Smaller product, less news, fewer ads of all kinds, more e-reading choices -- and higher prices.

Yes, most newspaper companies have embarked on a premium print pricing strategy, in some cases doubling single-copy prices and upping home delivery significantly. And, yes, these increases have provided a circ revenue bump just as ad revenue tanked (both McClatchy (6.7%) and Media General (11%) recently reported quarterly circ revenue gains). Yet, they've made the value proposition for print harder to justify. Now, add the recession-induced pocketbook concern to all the greater changes in the news world, and publishers may have shone a spotlight on the print newspaper product.

They have moved it from being a necessity, a habit, to a discretionary buy. (More on the history of the ebbing habit, from Alan Mutter.)

It's been a tough formula, but one that did make a kind of sense. Acknowledge that newspapers are a niche buy (while Google, Yahoo, AOL and MSN have become the mass daily stop), and price accordingly. Take a hit in volume, but make it up in pricing. It looked like that strategy was working for the past couple of years, as circ revenue's been flat to slightly up at most companies.

The risk: Too many readers would opt out. One ABC survey isn't enough to tell us whether we've reached that point definitively, but it's a huge warning sign.

Put yourself in publishers' shoes, planning for 2010. Today's numbers tell them a couple of things, at least:

If fewer readers won't pay for print, can they get them to pay for new e-reading choices? They'll watch the Wall Street Journal's test of mobile pricing. They'll work with Journalism Online to see which digital value propositions have a prayer of working. They'll think hard about the Kindles, Nooks (good comparison with the Kindle by Gizmodo's Matt Buchanan on NPR), Ques and Readers, and how they can get news readers to pay for delivery through that new platform.
It's going to be harder to get a thick slice of the ad spending returning to the marketplace, as the economy normalizes. Publishers' mass market proposition, already weakened, is now further in question (more on cycle of decline, from Rick Edmonds). Their pricing, always a sore point among advertisers, is now even harder to justify among the proliferation of pay-for-performance ad choices. (Good piece by NYT's Stephanie Clifford on that.) As they look anew at their ad sales propositions, they'll need to double down on the notion of premium content, premium audience and superior targeting -- and give often skeptical ad buyers reasons to believe.

N.Y. Times' SF Edition Plays Inside-Out Game

kdoctor — Fri, 16 Oct 2009 03:07:34 -0700

Tired of playing defense and readying itself for offense, the New York Times’ formal announcement of its San Francisco “edition” this week shows us how a world is moving and how the Times and Wall Street Journal (which also will offer an SF edition soon) are taking their battle to a city near you.

In this case, it’s a new inside-out world.

Forever it seems, the U.S. has press has been dominated by metros. This vast country of 300 million only supports three national dailies, and one of those, USA Today, is largely supported by the hospitality industry and business travel.

The New York Times and the Wall Street Journal built national (and budding global) franchises, but make minor inroads in any single city, five percent or less of print market share in most places. They’ve served an intelligentsia.

It was the metro daily that brought us our worlds. Yes, local, but also heavily national and international news, all sports news, business news, movies, TV and entertainment. They picked and chose what we needed to know about the world and we bought the package for decades.

The metros picked out a few Times and/or Journal stories, among other “wires” and put them in the package.

What we see in the Times’ regional push is now inside out. We bring you the world, the Times is saying, and now, we’ll bring you some local, too. After, all, local is important, but it’s just a (small) part of what you want to know about the world everyday.It’s a smart strategy, one born out of the Times’ new understanding of potential unlocked by the web and one born out of the cratering of the metro press. Why and why now?

The metro press seemed like an impregnable castle. It assembled a mass audience, a mass market, and the barriers to compete against – those castle walls of printing presses, distribution systems, ad sales forces and huge newsrooms – told competitors: “Don’t even try.” Internet competition exposed cracks. The recession is forcing a downsizing of the industry by a third or more has now left the castles’ flanks open. In the Bay Area, the Mercury News flank is wide open, having seen a newsroom of 400 in 2000 now cut to 125. The Chronicle's loss in staff are similarly dramatic. Why not start with the Bay Area, a highly educated, affluent, now under-served market?

Web economics provided a new path to start-ups and get-biggers. Into the openings are rushing a variety of competitors. In the San Francisco Bay Area, that means such forces as KQED public radio, Warren Hellman’s new start-up (both we believe to allied with the new New York Times’ push), emerging broadcast-based websites and others. Across the country, we see dozens of start-ups, awakening public radio stations, and TV broadcasters seeing that assembling a half-dozen to a dozen to a few dozen people and creating a digitally-based news organization is now possible. Foundations have become enablers, as they see civic conversation drained of its fundamental food, news.

The Times’ new edition now gives something more to print subscribers – more regional pages on Friday and Sunday to start. That’s as part a retention strategy – remind me why I should keep paying more and more for this print edition, when I can get the Times free online? – as it is a new print customer one. Hold onto to those print customers as long as you can, and each year the ad revenue helps you make that digital transformation.

The Times’ can now play with a more complete inside-out idea – bringing its online customers the whole world. It can deliver reports from Afghanistan, Jerusalem and Belfast and your local and hyper-local news. It just needs good local editors and good local partnerships to do the latter. Imagine the Times’ Global Edition toggle button getting a new buddy: Local Edition, tuned to a mix of national and your local news.

One question the Times (and the Journal) will have to answer: How much do we do ourselves? NYT Publisher Scott Heekin-Canedy has The Times will offer "local stories as only the Times can report them." Yes, it's 10-person bureau will be a big asset toward that, but they are still only 10 -- and oriented to finding stories all Times' readers are interested in. Adding staffers is highly expensive. Finding the right local partners is key.

Overall, this a is new level of competition, and competition’s good, right? That’s what we believe in U.S., we keep telling ourselves.

For the metro dailies, this new competition is another reminder that coming out of the recession won’t bring them back to the challenging, but still profitable, times of 2006-2007. These are new times with new competitors. Recovery will brings lots of competitors out of the woodwork. As the Detroit papers retrenched in home delivery, the Journal made noises about expanding its Detroit presence and doing what the Times has announced in the Bay Area. So expect these two increasingly head-to-head competitors, the Times and the Journal, to map the U.S. and decide where to go when. In addition, in the recent Bloomberg/Washington Post announcement, we see the further re-writing of the national/local rules. Bloomberg says to daily newspapers, which have rapidly retreated from business news coverage, we'll be your business section online. (And, of course, in beefing up with Business Week, it adds more heft.)

What we're seeing is the onset of a new set of re-knitting edited packages of news. News publishers, and editors, are trying to find new formulas to bring readers back from the ping-ponging effect of Yahoo News, Google News and the like, saying, stay on our site, we'll bring you a better package of news, drawn from the best sources. Expect to see lots of combos and re-combinations as experiments multiply in 2010.

For metros, the gauntlet is thrown down: You say you’re local, prove it.

Metros have cut back on their nation/world reports in print, and often online, re-orienting their diminished staffs more toward local. Yet, to readers, it seems like they keep losing things and gain little new in return. Now, we see the Dallas Morning News setting out in a new direction as publisher Jim Moroney has signaled an aggressive strategy and doing local with more gusto. In Seattle, Miami and Charlotte, aided by Knight Foundation match-making and money, metros are figuring out how to partner with good local, reporting-oriented blogs as well. All metros will have to move aggressively, figuring out the formulas that cause readers to pause and see their brands in new light.

Otherwise, this new unexpected competition of the global (Times, Journal) re-combining with the other local (public radio, start-ups, broadcasters) will pull away readers and advertisers just as metros have re-gaining some small optimism for the coming year. Curiously, I wonder about the Times' holding onto the Boston Globe (at least for now) in this light. Yes, the cuts and givebacks, combined with the bottoming of the recession, has convinced the Times that it can operate the Globe at least at break-even+ for the coming year. Given, though, this new strain on metros (wouldn't we expect Rupert Murdoch to make the Boston a target for WSJ metro strategy, just to spite the Times?), how stable is the Globe? Or maybe, the Times will pick a page or two from the Dallas or Seattle+ experiments?

Curious times as we enter the next decade. When you turn the world, inside out, on its head, who knows what will fall out?

Bay Area Online News Renaissance: 7 Pointers Forward

kdoctor — Sun, 27 Sep 2009 19:32:20 -0700

The Bay Area's online news scene is now popping, waking up from a prolonged period of somnolence, and pointing a way toward an online news renaissance across the country.

Friday, we got the official news that financier Warren Hellman's long-planned independent online news operation would get off the ground soon, with $5 million in initial funding, and partnerships with local public radio powerhouse KQED and the New York Times. Hellman says he'll be hiring "dozens of journalists." That news followed the huge success of California Watch's maiden voyage. California Watch, an initiative of the Oakland-based Center for Investigative Reporting. It saw more than two dozen news outlets -- including the state's top papers -- pick up its first big story on dubious homeland security spending, reaching almost two million readers in print and many more online.

Such activities mark a wakening of online journalism in the Bay Area, and I think hold many portents for what we will see in 2010. Certainly, what's happening here has parallels in other cities, but the rapidity of the announcements suggests that we're moving into a serious shift in who produces the news and how it gets to readers. Too early, to re-hang the News 2.0 shingle out -- that's been tried numerous times, but failed to stick -- but clearly something's happening here, and what it is is increasingly clear.

Before we look at seven pointers coming out of the announcements, let's recall the Bay Area context.

The San Francisco Bay Area's short online news history has been an odd one. We out here near the capital of the Left Coast like our reading and like our news. It's a highly educated place, and one that's a traditional great newspaper market, with income levels leading other metro areas. At one point, the San Jose Mercury News boasted the fattest classifieds sections in the country, and those profits helped launched Mercury Center, the first online news site in 1993.

Now more than 15 years later, the online news landscape in the Bay Area is a strange place.

Mercury Center, once a pioneer in the online technology coverage and other areas, is a humdrum newspaper site, with numbers to match. In September, 2009, users averaged 4 minutes, 42 seconds a month on the MercuryNews.com site.

SFGate, too, one was early out of the gate. Long independent of the paper San Francisco Chronicle, its found an audience, too, but not a huge one. In September, it averaged 7 minutes, 1 second per user.

Craigslist, Yelp, Yahoo, Google, Open Table and a host of others have gotten earlier and deeper traction in the Bay Area, inflicting deeper pain on those two newspapers' print editions and their websites than that experienced by peers across the nation. Meanwhile, their parent companies have been scrambling. Hearst has lost more than a quarter of a billion dollars on the Chronicle since it bought it in 2000, and MediaNews, which bought the Merc and put together the expanded Bay Area Newspaper Group in 2006, has narrowly averted default on the financing it used to grow the company.

Both companies have shed lots of expenses -- including hundreds of newsroom staffers -- over the last several years. In a recent Sunday front-page plea to readers for ideas on how to save the Merc, columnist Mike Cassidy reminded readers that the once-proud Merc had housed 400 journalists as recently as 2000, but is humbled to a staff of 125.

Twin the backdrop of failing metro dailies and these two start-ups, and we can see many strands of the soon-unfolding news tapestry. Here are seven for starters:

Reporters are their own brands and can win jobs and audiences quickly, given new umbrella organizations. CIR received more than 600 applications for its 11-person staff. The Chronicle's Lance Williams, who co-authored the award-winning Balco steroids scandal series, was one of those hired. Others staffers came from the Des Moines Register, the L.A. Times, the San Diego Union-Tribune and Milwaukee Journal Sentinel. A lesson for daily newspaper: yes, you can cut costs by letting go of lots of experienced and young talent, but that talent may come back and compete with you.

It's astounding how quickly the California Watch journalism attained legitimacy.

Public radio is a logical successor to daily newspapers, as they give up much of their traditional reporting. With fewer bodies able to cover fewer stories, many stories and beats are no longer being covered. Think about it: which other locally and regionally focused news organizations hold similar values to print journos? I'd say public radio news people are the closest, preferring more depth than their commercial broadcast peers. KQED's website is starting to look more news-like and less programming-oriented. That's a trend we're seeing take root nationally, as the Twin Cities MPRNews.org and WBUR now read increasingly like newspaper sites, with more multimedia tossed in.
Foundations solve the one fundamental problem that's needed solving: M-O-N-E-Y. Yes, the Internet ad and reading revolutions have changed everything and caused a press emergency. As many have pointed out, though, it's not news-reading that audiences are forsaking; they're just abruptly changing a business model that long seemed stable. Sure, journalism can be better done (and web innovations like user-gen content, blog tools, multimedia, commenting, etc. are part of that improvement), but we've not seen a thumbs-down vote on journalism. Plain and simple, when the business models shifted, and then the recession took a hammer to what remained, the 50,000 U.S. newsroom jobs could no longer be justified. The result: more than 10,000 jobs lost in the last two-plus years alone. The readers want to read the stories, and publishers and aggregators would like to run the stories, but someone has to pay journalists to report and write them. So when foundations (and angels) move to bridge the gap, they get the supply system back going. The Knight, Irvine and the Hewlett foundations, among a growing list of others, are re-energizing the supply.

It's as if the journalism system that we knew has had a heart attack. It survives, but we're seeing new distribution vessels forming to replace those that withered.

For daily newspapers, the growth of alternative journalisms is both a promise and a threat. It's a promise of getting high-quality, low-cost (California Watch charged large metros just a few hundred dollars, though it is reviewing its business models going forward), without having to pay all the high-salaried, troublesome reporters. It's a threat that some outlets like Hellman's, MinnPost, Voice of San Diego, etc., will simply bypass local newspapers and find ways to reach readers directly, and through other partners. Put another way: Downsized dailies have left themselves newly vulnerable, exposing their flanks. Their dominance, built in part on sheer size, is waning.

The old fraternities are fraying. Not long ago, we though of the New York Times as the same kind of company as the Mercury News or the San Francisco Chronicle. No longer. It's a global media play, and of course, it needs to seek new markets and audiences and low-cost content -- all to better amortize the high, basic costs of doing business. So, look for the Times and the Wall Street Journal -- each of which get no more than 5% of large metro markets in print -- to see the shaken regional news marketplace as a huge opportunity. In Detroit, for instance, as the Free Press and News have cut positions and coverage, they've opened greater opportunity for the Journal to expand its auto industry-centric coverage.

Similarly, look, finally, for rapid change in the traditional wire services over the next couple of years. Parsing the value of the New York Times News Service in this shaken and stirring news marketplace, for instance, is a lot harder than it used to be.

It's a back-to-the-future revolution, in part. It's got fancy, digital clothes, but this revolution may bring us back to the time when cities like San Francisco had a half-dozen papers -- not just monopoly dailies. Our post-heart-attack digital distribution system opens up lots of routes for new aggregation and aggregators, to knit together all these multiple inputs, and deliver them to our iPhones, laptops, plastic newspapers and probably even niche print.
Though the elders may be flummoxed, youth will do the serving. Hellman's project also includes a partnership with the University of California, Berkeley Grad School of Journalism, tapping the labor of as many as 120 students. If you remember internships and your first jobs, you'll recall how eager and passionate new talent can be. The school has already done some impressive experimenting with such sites as MissionLocal.org.

There are tens of thousands of journalism students across the country. Appropriately paired with experienced journalists, think what they may be able to produce.

Nine Questions: Rupert's Dollar Sale, Self-Service Ad Revolution, the California Watch Model and JO's Tech Friends

kdoctor — Thu, 17 Sep 2009 00:05:11 -0700

The sails are up, and news companies feel a little recovery wind at their backs. With the worst of cost-cutting over, they're looking for growth. Here's nine questions as they chart that new path.

1. Is one foot better than two? Newspaper companies are feeling a new vim and vigor, and their share prices reflect that. The last 12 months have felt as if someone was standing on their chests with both legs, one leg's is the challenge of the web for readers and advertisers. The other's been the recession. Now the recession leg is applying less pressure, and may be removed completely soon. In other words: Back to the challenges of 2007.

2. Doesn't Mediaspectrum's announced partnership with Tribune offer significant potential to the news industry? Saving money on ad pre-press (ad order-taking, ad design, etc.) is hardly sexy stuff, but Mediaspectrum's customers report savings of 25-50% in ad pre-press costs. That's huge, especially applied over an industry still beleaguered by cost structure issues. (We can see that news companies have cut 25-40% of their costs over the last three years in staff, paper and everything else, but more is needed as online-only rivals come at them.)

A little sexier -- and to the point of where news companies can find growth going forward -- is Mediaspectrum's self-service ad platform. I wrote recently about Advance's partnership with Microsoft around local sales, further ratification of the Yahoo Newspaper Consortium notion that it's all about enlarging local sales going forward.

"How you get more of your local businesses that we haven't gotten to before," is the big goal of the self-service platform, says vp/operations Mike Sacks. Sacks tells me that Tribune has gone live with the self-service ad platform in six of eight Tribune markets and has already brought in hundreds of new, smaller advertisers, ones that could never afford print and may not have been touched by the company previously.

So where does self-service fit for Tribune. "We're not firing salespeople; we're redeploying them to [sell] larger businesses." The system may allow the company to re-allocate as many as a fifth of its sales staff.

Now Tribune and Mediaspectrum, which also has made a believer of UK-based Trinity Mirror, are teaming up to sell the newspaper industry on ad self-service, launching a joint initiative today.

3. If Journalism Online takes off, will we see a pitched battle between Paypal and Google Checkout in the news world? Google has recently renewed its pitch to publishers, urging them to use Checkout to power their paid content strategies. Checkout has been aimed at micropayment initiatives, but it hasn't caught fire.

On the other hand, Journalism Online, which this week announced 1000 "affiliates" willing to keep talking -- and provide some potentially highly useful reader data -- about paid content, will probably focus on Financial Times-like "metering" approaches. That means subscriptions, rather than micropayments. And don't be surprised if you hear that JO's partners, as it goes operational with pay offers, will include Paypal and Zuora. Paypal, owned by eBay, of course has become an online payment standard. Zuora is a Paypal-partnered start-up with a good lineage (funded by Benchmark Capital and by Salesforce.com's Marc Benioff). It focuses on subscription marketing. Zuora's role: working with JO and news publishers to craft subscription products that readers might actually pay for. (Thoughts from Zuora founder K. V. Rao on subscriptions and the web, here.)

4. Isn't California Watch one of the models to really watch? The model is simple, fits the economics of the day and produces.....above-average journalism. What's not to like and apply? The 11-person California Watch unit -- funded by foundations and run by the OaklandBerkeley-based Center for Investigative Reporting -- hit a home run with its first project. That project focused on wasteful Homeland Security spending. It ran in 25 papers across California, from big metros to the small dailies, on indie VoiceofSanDiego.com and caught play on KGO-TV in San Francisco.

So: an independent, non-profit news operation produced well-done enterprise journalism and found a ready and eager audience of editors and readers. How tough was it to get daily editors to accept this journalism?

"It was incredibly uncomplicated," says CIR's Exec Director Robert Rosenthal, the prime driver behind California Watch. Learnings: "Our customers were the publishers. The easier you can make it for the publisher, the better." California Watch charged fees in the low hundreds and has found publishers and TV outlets asking, "What's next?"

That's the good question Rosenthal and his new merry band now get to answer, as they think through the kinds of reporting, the amount of cooperation and customizaton useful and the business models that will work as this new form of distributed journalism.

Among the principles being proven out: When established daily journalists leave big metro dailies, they take their cred with them -- and it looks like it is instantly transferred to their new enterprises.

5. Is Rupert Murdoch replacing Henny Youngman? Is it the one-liners he is tossing out or is the press just starved for received wisdom. Now Rupert, leader of the Free World's News Media, says he is going to charge a buck a month for WSJ mobile to subscribers and two bucks for non-subscribers. I think that's a step in the right direction.

Charging for non-desktop/laptop access should be a new revenue stream for news publishers. The math, though, isn't huge. Who is most likely to pay for Journal mobile? Presumably it's online subscribers, of whom there are about a million. So $12 a year, if all of them signed up, would be $12 million. Not bad, but only about an 8% increase in reader revenue. I can't see lots of non-subscribers shelling out $24 a year, but I may be wrong.

So $52 a year (my mistake: Murdoch is proposing a weekly charge of $2, not a monthly charge of $2), if all of them signed up. So, yes, if all of them went for the deal, that's a 50% increase in reader revenues. If News Corp gets half of them, that's $25 million or so a year, a 25% increase in reader revenues. I can't see many non-subscribers shelling out for the app.

Better than charging just for mobile, I still think All-Access is the way to go: Get the Journal (or the Times or Guardian or ?) anyway we produce it, print, desktop, laptop, phone, e-reader, e-edition. And add a $5.95 per month charge for that. All-you-can-eat model that Americans seem to love, even if they don't often sample the whole buffet.

6. Is News Core the right bite of the apple? Lost in the flurry of news was News Corp's News Core announcement. Another unsexy one about bringing together all the company's news content -- think Journal, Barrons, Marketwatch, Times of London, Australian, Fox, etc. -- in one place. That's essential (core) to taking advantage of the scale News Corp has built. In digital publishing, it's all about content management, control and measurement.

If News Core can successfully harness its internal content, to multiply value of its individual content units (yes, new language for new times), it's got a leg up for its own destination sites, and for syndication out. This is one answer to the two-year-old question of how much Murdoch "overpaid" for Dow Jones in December, 2007. Yes, he "overpaid," but multiplying the value of those DJ assets through News Corp's worldwide pipes of distribution -- satellite, cable + print and web -- helps us all to see the value that can be unlocked.

In concept, News Core parallels Gannett's ContentOne, that company's attempt to reinvent an internal wire for the digital age.

Big question for these companies: How much of this activity is truly integrating content management on single platforms (Dow Jones is moving that way with Eidos Media) and how much is simply better sharing of old-fashioned budgets. It's the former that will pay huge dividends.

7. How much will the New York Times digital news operation miss Jon Landman? Landman gets it, a Timesman with commonsense. I've talked with him about staff blogging, for instance, and he is one of the too few people at the top of journalism who get that blogging is just another useful new tool in the journalist's bag. We can see that in the Times' growing comfort with blogging and multimedia, done to Times standards. Yes, it still seems too slow sometimes to many of us, but it's been directionally right. That said, let's see what he can do as Culture Editor online, where such innovations as NPR's Culturetopia podcast (often helmed by the capable Neda Ulaby) and Linda Holmes' MonkeySee blog are bringing the right sensibilities and selectivities to online culture journalism.

8. Is the NYT about to make a pay content decision? The ghosts of Times Select roam the new hallways. Membership notions abound. An ad rebound gives punch to those who say keep it free. Rupert's mobile upcharge offers another path. Word is that the Times may soon decide what it will -- and won't do -- with paid content in 2010.

9. Couldn't Walter Hussman have chosen better words? The Arkansas Democrat owner has proclaimed that his merger with Stephens Media would create "a permanent solution" to both companies' cost issues in northwest Arkansas operations.. The phrase gives some of us the willies, in its finality. Besides, isn't it quite clear that given the fast-changing landscape, there is little permanence and everything is in long-term transition?

Google's Fast Flip Dips Publishers' Toes in Google's Own Ad Revenues

kdoctor — Mon, 14 Sep 2009 16:10:53 -0700

Fast Flip, Google's hardly secret visual news search product, just made its debut today. It's a premiere that tells us lots about the swirling winds in which the company now finds itself. It also marks two important milestones, one about the slow replacement of news search 1.0 and one about Google's willingness to share its ad revenues with news publishers.

First off, Google search, web search and news search, has been good enough to become and remain the standard for almost a decade. That decade's almost over, though, and we can see news search 1.0 about to fade into history. Cooler than cool was the ability to bring together 4300 or so global news sources into a single interface, with reasonable relevance. The 1.0 experience though has been so list-like, so redundant and duplicative and so lacking clarity as to original source. It's ready to pass on, but needs a few pushes. Bing with its mouse-over capabilities provides on push. The news visualization of Newser provides another. Politico's mobile app operates smartly on the same principle. Overall, give credit to Apple's cover-flow presentation, which is now flowing from music to the rest of the online world, as Apple itself made it part of the new Safari.

We're visual creatures and we like to use the web to scan, not just read lists, and text.

So Fast Flip as a product, as an experience, does that. As Google will tell you, Sergey Brin has long complained about how long it takes news pages too load. Fast Flip -- on a reader level -- is one attempt to deal with that issue. The news reading experience online, we've all known, isn't what it could be.

What Fast Flip does then is give us a quick view of the news -- by individual title, by topics, by recommendations -- so that we can scan and zone in on what we want, then click off to it. That's very Google News search-like, but with pictures. So far, more than three dozen publishers are signed up. Google went to top newspapers (the New York Times, the Washington Post), top magazines (Business Week, Elle, Popular Mechanics), top broadcasters (BBC News, Frontline), top web-only sites (Techcrunch, Slate, Salon, Daily Beast) and intriguingly three of top independent investigative sites (Center for Investigative Reporting, Pro Publica, Center for Public Integrity). All the companies represented have opted to be part of the program -- they are essentially licensing content to Google.

For publishers, it's a test, one of many at this point.

"We're trying to find out how users relate to a visual interface," Martin Nisenholtz, senior vice president of digital operations at the New York Times told me, when I asked what was most important about the Fast Flip. "It's purely a research project." Maybe, just maybe, visual search can take readers beyond the news search 1.0 world that Martin describes, "where everything seems to be generic and the algorithm rules." Visual search allows for a "brand presence," something that high-quality news producers have been seeking to reclaim in the digital wilderness.

The company plans to add more, but within the bounds of "keeping it manageable."

It's a smart list, a good mix of older and newer media.

Scan the screenshots, which Google picks up both by RSS feeds and by the use of its crawler, and you can see pages or parts of then. You can't click on any "link" within the screenshot, of course; clicking takes you to that publisher's page, their own url. It's just another way to browse/search, accessed through Google Labs to search with a link planned from Google News itself, but not yet in place. Fast Flip is available for mobile as well, but only for the iPhone and Android-powered phones. No app through any store; access it through the mobile browser.

Coming, if Fast Flip is a hit: Google will license the technology for use by publishers on their own websites.

What the visual test may be cool, it is the business model that may have greater impact.

Google is providing participating publishers with majority of ad revenues earned on the Fast Flip pages. Those are pages hosted on Google.com. Sure, we may say, Google had to do that. In using screenshots of the pages, it is using the intellectual property of the publishers, beyond any reasonable "fair use" argument. That's true, but it's also the first time in a current news product (News Archive possibly) that I can think of that individual publishers -- unlike the wires of AP, AFP, CP and PA -- got ad revenue shares from the use of their content on Google itself. (It's worth noting that because of those pre-existing wire licensing relationships, Google users clicking on AP and AFP screenshots will land on a Google.com hosted page with that content).

Some of us have been making the argument (Content Bridges: Google and Newspapers: Fairplay, Fair Share and "Fair Use") that a "Fair Share" rationalizing of the Google/newspaper relationship is needed. That new deal would involve Google sharing ad revenue -- earned on Google News and Google.com more generally -- when news content spurred Google usage.

My sense: Though this is an experiment -- a six-month one, according to Nisenholtz -- in visual news search, it's also a step forward in Google and the news industry coming to a new financial relationship on text as well.

The financial impact of Fast Flip won't be great -- remember it is still in Labs and much of the public may not happen on it for awhile. Still, the principle is one worth marking.

Back, lastly, to Google in the larger landscape.

Take the business landscape. With half the newspaper industry allied with Yahoo (and thus arch-enemy, Microsoft) through the Newspaper Consortium, it needs to redouble efforts to play well and become a better partner with news companies.

Further, it needs to find the kind of success it has found with search and paid search -- dominant #1 player in both -- in news search. Check out the latest Nielsen news numbers for August, and we find Google able to say, "We're #9!" Hardly a grade it is used to getting. In uniques, Google has moved up 22% year over year. That has plugged it into the ninth spot, moving up from the teens.

Still it is way behind Yahoo News, MSNBC, and AOL. It needs a better news mousetrap.

On the political landscape, it needs to continue making nice. Christine Varney has revitalized the Justice Department's Anti-Trust Division. Google's books deal and general search/paid search dominance have put a big target on its back. At times like these, it is good to have friends, and who could ask for better friends than those with printing presses?

9 Questions: EveryBlock's New Location, Do-Over Strategies, Sly Sports Moves and Madeleine Brand

kdoctor — Wed, 19 Aug 2009 22:11:34 -0700

Late midsummer brings hugely cautious optimism, and lots of identity guessing games -- who has Journalism Online signed?; what's Rupert really up to? -- worthy of William Shakespeare. Here's nine questions for the time:

1) Who are the 330 non-dailies in the Journalism Online semi-announcement? That's a big part of the guessing game, as reporters find out that McClatchy, Dow Jones and Tribune are all saying they're not participating. Speculation focuses on Gannett with its 850 non-daily (weekly, niche+) publications in the US and its increasing online niche orientation, using its Ripple6 engine. Or on Gatehouse, with its several hundred weeklies. Even MediaNews counts about a hundred weeklies. Or maybe the only announced partner -- marketing-oriented Itz Publishing of Portland -- is bringing some companies into the action. Far easier to get to "330" through a couple of bigger companies than by one-offs.

Of course, the JO release was more of a tease than an announcement. The numbers seem to be based on non-binding letters of intent, which is kind of like asking publishers in a paid content town hall discussion to raise their hands if they'd like new reader revenue. Attributor, another player in this summer's intense round of "paid" talks, also moved forward with many media companies, but did it without contracts or even loi's. (Content Bridges: "Attributor "Fair Share Consortium" Completes Newspaper Trifecta"). It has obtained feeds from "50% of the top 25 U.S. papers" to test its ad-monetization-of-piracy initiative. The key word here, for both: test.

If it fact, the ability to charge -- and get paid -- is based on having a good degree of proprietary content, then maybe it is the weeklies who have a better chance of bundling print and online than city dailies. Those that have websites or e-editions have seen them mainly as print retention tools, or bonuses for snowbird customers, Brian Steffens, exec director of the National Newspaper Association (2300 largely weekly members), tells me. He says that the about 42% of his members' papers are paid, 6% free and and the rest some combo of the two. I wonder if these paid papers -- which take in $20-50 in annual subs -- could tack on an online fee of 20% or so, and have it stick far better than their daily counterparts.

2) Sure, Everyblock's code is still open-source (courtesy of the Knight Foundation), but doesn't its new owner MSNBC.com remind us it's still about location, location, location? The blinding simplificity of the Everyblock idea -- local city data routinized and made easy to use -- should have been one grabbed by newspaper companies. Local, local, local, right? While some operations, like the Sacramento Bee's Investigations Center and Mike Orren's Dallas start-up PegasusNews.com have gotten -- and acted on -- the value of local data, most newspaper companies still haven't. Yes, they can still use the open-source code, but with Everyblock innovator Adrian Holovaty working with MSNBC.com, does that give a non-newspaper company two legs up? At the same time, kudos to MSNBC's Charlie Tillinghast and Cory Bergman (himself a local online pioneer through Seattle's Next Door Media and more) for winning the prize. Now, let's see what they do with it.

3) Will GM's deal with car buyers mean that even more traditional market dollars -- including newspaper print -- go away, as buyers and sellers blissfully meet on eBay, cutting out a lot of middlemen? What kind of dent would that make in newspaper auto sector recovery expectations?

4) Hasn't Madeleine Brand, guest summer host for NPR's All Things Considered, been a breath of Left Coast (non-humid) air? Robert Siegel, Melissa Block and Michelle Norris are stalwarts, but it's been refreshing to have the easy-peezy feel she brings (for instance, "America: Prepare To Be Mightily Booshed,") even if her inclusion has been day-to-day.

5) Is "Do-Over" the coming strategy for newspaper companies? For the half-dozen US newspaper companies in bankruptcy, it's an official, court-approved do-over they are looking for, witness Brian Tierney's effort to shed some $300 million in debt in Philly as the papers seek to emerge from court supervision. He can make the case for a fresh start, building on the pride of downsizing: "Our performance has been incredible. We have carved $95 million out of the cost structure of the paper in the past three years." Meanwhile the Star-Tribune is about to jettison some $400 million of its half-billion-dollar debt as it emerges from bankruptcy. The bet in Minneapolis and Philly: recovering revenues may be sufficient to pay operating expenses, greatly reduced debt service and a bit of profit. It's a strategy that that McClatchy, MediaNews and the New York Times would love to follow as well, but they've all stayed out of the courts. The strategy, though, may be parallel: find some way -- property sales, long-term debt restructuring, new capital -- to segregate the large debt service that the business no longer will support.

6). Hasn't the Daily Mirror beaten Rupert to a punch? Murdoch's won great attention with his intention, his nod to a paid content future, and apparently is readying a new Sunday Times paid online product for November. In the meantime, Trinity Mirror, the third-largest newspaper group in the UK, has debuted Mirror Football. Take a look: it seems like the kind of full-featured (video, columns, blogs, visuals, data, and great use of archives) product that consumers might just pay a bit extra for, a newspaper version of a MLB or ESPN-like product. Says Sly Bailey, Trinity Mirror CEO: "The important thing for us is to develop the brand with the right content that engages a passionate audience, and therefore to have a diversified model that isn’t just about advertising. We think that is the next stage, and whether over time that gives you the opportunity to think about whether there are areas you can charge for, that's an open discussion -- but you have to create that content overall in order to have that option.” Exactly. Value first, then charge.

7). How many business news sites does the Wall Street Journal need? We got word Friday that the "The WSJ has placed at least three different ads seeking executive-level editors for a new business Web site." My guess is that Dow Jones, with the Journal, Barron's and Marketwatch, has sufficient brands deployed in the marketplace; in fact, I'd expected they would have niched and nested them better by now, almost two years into News Corp ownership. So my guess: new talent may be hired for niche sites, branded under some existing label, not a new one. WSJ's Alan Murray has already hinted at energy and CFO niches, no-brainers for a parent company skilled (through Factiva+) at B2B niching. The next logical move: greater regional business coverage in big business markets like Detroit, the Bay Area and Philly, which have all seen their own dailies cut back on business coverage.

8) How long will Legal Ads stay legal? The news reader in me wants them to keep being published, and the taxpayer in me cries foul. The Mercury News ran two pages of Legal ads in microscopic text last week, btw too small for aging baby boomers to read. Reading them is besides the point, though, anyway, right? It was probably old English law that required a public display of legal announcements, and that's carried over as a nice, little subsidy for newspapering. How long will it be though until law catches up with reality; instead of must-publish, must-Tweet?

9) Been down so long, looks like up to me? With apologies to Richard Farina, that's how I read Randy Dotinga's good report on new owner Platinum Equity's meeting with the staff. Revenues down more than 50% in three years. Coming: shorter stories and a move beyond Stone Age page assembly! One staffer's comment reminds me of staffers' optimism as Zell replaced Old Tribune and Tierney replaced Knight Ridder: [The new bosses seem decisive seem] "determined to not sit around a table and wring their hands and debate endlessly whether to proceed with one initiative or another." Alas, be careful what you wish for.

Advance Partnership Signals Greater Microsoft/Newspaper Connection

kdoctor — Sun, 16 Aug 2009 22:00:00 -0700

Update: MSNBC.com just paid several million to buy Everyblock, the much-watched Adrian Holovaty start-up, around local city data. Smart local interactive data should be a strong core of every local news(paper) site; it drives traffic and screams utility. The fact that MSNBC.com -- co-owned by Microsoft and NBC -- understands that opportunity better than newspaper companies speaks volumes. The deal also reinforces the notion, noted in the post below, that Microsoft will once again become a more dominant local, news-oriented player in the years ahead.

On Monday, Advance Internet is announcing its new partnership with Microsoft, an agreement that tells us a few things about the emerging, post-recession marketplace.

Advance Publications, Inc., isn't a well-known name outside the industry. Yet, it's one of the major media companies in the country, encompassing through Conde Nast more than 20 top-drawer magazines (The New Yorker, Wired, Vanity Fair, Gourmet+), the apparently immortal Sunday Parade, the 42-city strong American City Business Journals group and cable interests, in addition to its 30 newspapers. A very private company, Advanced is ranked 41st, by Forbes, among private companies in the country, taking in more than $7.5 billion.

So when Advance partners its online newspaper ad business with Microsoft -- when it zags when many of its peers are zigging -- it's worth taking note. The new partnership covers all the Advance newspaper properties, from Newark and Jersey City to Cleveland to Michigan to Portland, Oregon, with many in between. Advance Internet operates as a division, separate from the company's newspapers, but is set up to leverage all those papers' content and sales forces.

The new partnership -- already launched in part -- parallels the Yahoo Newspaper Consortium, but differs from it in one important respect.

What's the same:

Advance Internet's own salespeople, and then the vanguard of its newspaper sales reps, will sell into the Microsoft Media Network, encompassing all the Microsoft sites. So, in essence, Advance will greatly expand what its sales teams can offer local advertisers. The idea and the centerpiece of the deal for Advance: the ability to offer local businesses additional marketing solutions, multiplying Advance's sales.
Advance Internet will use the capabilities of the Microsoft ad technologies -- among them behavioral targeting (BT) and re-messaging (following would-be customers as they move about the web)
The deal connects Advance and Microsoft directly on paid search products. Microsoft will deliver its text ads both through its paid search and contextual-reading ad products. Microsoft paid search ads will replace Google paid search on Advance sites.

The main difference: Advance Internet is maintaining its own ad platform, currently powered by 24/7 RealMedia, and integrating with Microsoft. Yahoo Newspaper Consortium members have fully adopted the Yahoo APT platform for their ad serving businesses, creating a closer, more exclusive relationship. "We wanted flexibility," Peter Weinberger, president of Advance Internet, tells me. Weinberger won't specify what parts of the deal involve exclusivity or the duration of the contract.

So, we can read the move in several ways:

First, Microsoft is really coming back -- to the newspaper world. After Sidewalk, after all kinds of attempted relationships, Microsoft -- soon to be half of the Google/Microsoft search duopoly -- is once again seeing the benefits of the newspaper company local connection. Advance Internet is the first major local news company reselling display ads into the Microsoft Media Network, Peter MacDonald, who is Microsoft's PubCenter Director of Business Development, Advertiser and Publisher solutions, told me. Haven't heard of the Microsoft Media Network? It was formed in February, rolled up from various Microsoft businesses, well-described here by ClickZ. Among the other big media companies named as collaborating on the new underlying PubCenter platform are IAC, Dow Jones Online, The New York Times Co., Time Inc., and Viacom.

With the Advance deal, it gets good local sales potential -- those feet-on-the-street that are the envy of companies that are cubicle-bound and technology-centered. Recall that in the Microsoft/Yahoo deal, Microsoft's Bing and paid search businesses will power not only Yahoo, but apparently all the newspapers sites in the consortium. That will mean that the majority of newspaper sites (with the big exceptions of Gannett, Tribune, the New York Times and the Washington Post, among others) will see critical parts of their business powered by Microsoft. (Peter Krasilovsky notes that this deal, in the works before the MSFT/YHOO deal was done, may raise some political issues between the would-be partners.)

We all see the shape of the new battle for local ad dollars. Face it, online newspaper growth has slowed dramatically. We're seeing reading patterns harden in the marketplace, and it's leaving newspaper sites underwhelmed. Yes, they can claim as Advance does -- "according to Media Audit, five of our sites rank in the top 10 of newspaper affiliated sites based on local penetration of adults 18+" -- to be strong locally. But time on site across the news industry is paltry, less than 12 minutes a month in most cities, according to Nielsen data. That means they must sell much more than tired old banners on their own sites. The solutions, here and in the Yahoo consortium: 1) sell more products, in addition to display; and 2) sell Other People's Inventory and networks; in Advance's case, Microsoft's.

As I've noted, this new math is compelling -- many smaller advertisers never could afford print. They can afford online, and that means the potential of hundreds and thousands of new customers in every metro marketplace.

Further, this is a market newspaper companies must win if they have any hope of maintaining their already-downsized newsrooms. They're not winning it now. According to Borrell Associates, roughly half of the $14 billion local online ad market is going to the pure plays -- Google, Yahoo, Microsoft, AOL and smaller sites without legacy media businesses. Only a quarter of it is going to newspaper companies. Newspapers' strength is in non-targeted display advertising; they're minor players in the fastest-growing online ad segments of paid search and direct marketing.

If Advance and other newspaper chains see the local opportunity, they aren't alone. Yellow Pages companies, with their own veteran feet, see it, as witnessed by the recent ATT/Yahoo tie-up. (Content Bridges" "5000 New Competitors Just Landed in News Markets." Broadcasters see the new markets opening as well -- all those small businesses that used to be "too small to sell", businesses that have gotten a taste of self-service keyword advertising, but would like some help in putting together better, smarter campaigns. Both YP and broadcast companies are part of the Microsoft reseller program that Advance just joined, in fact. Conversely, Weinberger notes that with the new programs "we can go after broadcast dollars."

It's a coming free-for-all.

So it's a race, a "consultative" sales race. As I talk to newspaper publishers, broadcast execs, YP honchos, all will tell war stories of how hard it is to transform their legacy sales forces. How do you re-train "order-takers" for the new world order of selling targeting, networks and re-messaging? It's a race of turtles to some degree, but it is to those competing turtles that the Yahoo and Microsoft have turned, as ironic as that is in lots of ways.

The new world order of hyper-targeted, sold and serviced both by (self-serve) computers and flexible, innovative human salespeople is certainly not here yet. Whoever gets there first stands to build sizable new businesses. For those of us who care about the news world, we'd hope that these new business builders are somehow connected to local news enterprises, but there is no reason they need to be. Yes, the buy-our-site-plus approach makes sense, and may offer initial advantage, but ultimately, whoever can bring results by best harnessing the diverse marketing environment wins.

What do we make of Advance's zag? Well, as the lone newspaper play for Microsoft, it stands to get some attention, which may help in a business that requires really good execution all around.

Microsoft is though the #3 player in many online ad categories, and that might mean lower pricing, and maybe lower yield, at least for now. In addition, it's always been challenged by ad-based business execution, itself, and still seems plagued by an alphabet soup of names for its ad-related product set. Currently, Microsoft's adCenter counts 90,000 advertisers in the US and elsewhere.

What makes sense to me, conceptually at least, is that Advance is trying to remain at the solid center of its business. Here, it is leveraging Microsoft technology and network assets, but is not bound to its platform.

In a related local sales expansion that began in spring, Advance has been working with four different SEM (search engine marketing) re-sellers, testing out which (WebVisible, Yodle, among them) may optimize results and pricing best. "Paid search is the inroads," says Peter Weinberger. "It's a huge product for us."

Selling local merchants -- that consultative selling, again -- SEM services as well as direct advertising enlarges local media's role in the marketplace. Here, too, numerous newspaper, broadcast and YP companies are re-selling SEM services as well, so the competition grows and becomes more head-to-head.

The Advance principle here -- test partners, partner strongly, maintain the flexibility to change partners -- makes sense in what will continue to be a hyper-changing landscape. As we move into 2010, and look at (public) company earnings, we'll be able to separate out the companies that are truly transforming themselves into digital content-and-sales leaders from the also-rans.

Oracular Vernacular? Murdoch, Paid Content and the Emergence of All-Access Pricing

kdoctor — Thu, 06 Aug 2009 10:54:02 -0700

Face it. We're in a time that seriously lacks oracles. So, apparently, Rupert Murdoch passes for one, given his well-chiseled mien and occasional wont to make pronouncements.

Now he's making a bit of midsummer news, with still another comment on charging for news:

"Quality journalism is not cheap. The digital revolution has opened many new and inexpensive distribution channels, but it has not made content free. We intend to charge for all our news websites....We're hopeful we can build significant revenues from the sale of digital delivery of newspapers, news content".

It recalls one of Rupe's early pronouncements, declarations often requiring translation, as he pursued the Wall Street Journal: "The value of financial journalism, high-quality financial journalism, is you can charge for it."

Yes, you can. Rupe didn't prove that. The crews at the Journal and Dow Jones, and at the Financial Times, did. As Staci Kramer has pointed out, WSJ indeed charges for it, and well, and well, confusedly, employing the many sleight-of-hand circulation marketing tricks long employed in the industry. Indeed, business and finance journalism can be charged for; that's not news.

It's been a simple truism: where money changes hands -- investing, buying, selling -- people are more willing to pay for related news and information. Business and finance are the easiest to see, as is Consumer Reports' successful model. We should be seeing similar success in world-beating travel and health sites -- lots of money in both -- but we haven't seen products that will get many of us to yet open our wallets.

But, news, good old "general" news or the "scoop journalism" that Murdoch has long extolled? There's little evidence that people will pay for news in a burgeoning news environment, where the amount of "good-enough" news grows daily. Think start-up sites from the Politicos to the Voices of San Diego, public radio (newly ascendant nationally and increasingly locally), commercial broadcasters finally getting the value of online "text".

Murdoch started his comments yesterday with the notion that classifieds will never come back to their previous levels. You can draw the line between that comment and his -- and his industry's -- wish to charge for content. The problem: just because one huge revenue source is finally acknowledged to be beyond repair, that doesn't mean the marketplace will let you open a new cash spigot. The marketplace, in fact, shows little sign of supporting "paid content."

Will NewsCorp put up a pay wall stretching from the Manhattan's New York Post to London's Times to Sydney's Australian to Suva's Fiji Times and back to Bill O'Reilly Central? I doubt it.

If there's a better realpolitiks player in the news industry than Murdoch, please stand up. If not, Murdoch knows that News Corp putting up a pay wall would be akin to unilateral disarmament -- and that's something only pinkos do. Put up a pay wall when many others (including Reuters, as Chris Ahearn explains in a to-the-point post) improve their superhighways, better to take advantage of the link economy, and you'll find yourself with a lonely citadel, a citadel no longer a crossroads in the biggest emerging marketplace of the day, online advertising.

That's not to say News Corp -- and others -- won't charge.

Steve Brill is offering 16 ways to charge, through Journalism Online, the would-be Paypal for news. Some of the 16 will work, though how much new revenue they will generate is the big question, as some publishers sign on.

One approach I find likely for News Corp, for the New York Times and other national brands on this side of the Atlantic and the other, is the All-Access Pass. When you hear Murdoch and other publishers justifiably scream about Jeff Bezos' hard bargain -- he keeps customer relationships and 70% of the revenue -- you understand that they see the multi-platform future becoming real and want to be in the center of it.

We know that most readers expect news and information to be free. That's annoying, but apparently the case. We also know that most of us are quite willing to pay out hundreds of dollars a month in "access" charges, for broadband Internet access, for "data plan" on our smart-as-heck phones, for cable TV.

So expect a few companies to go all-access. As in, you can get all the Dow Jones content -- WSJ, Marketwatch, Barrons+ -- on any platform anytime, formatted for you, with all your preferences remembered, your stories saved, your shared e-mail lists available seamlessly. For a charge of maybe $5.99 to $9.99 a month. It's not a charge for content. It's a charge for convenience, for access. Sure, sign me up.

My sense is that such an approach will find appeal among 5-15% of readers, as we rely increasingly on smartphones and play with the new e-readers over the next couple of years.

Such an approach wouldn't put up a pay wall -- foreclosing web growth -- but could supply a new revenue stream that's badly needed.