<!-- Content Here -->

Where content meets technology

Mar 11, 2010

Google's Take on the Newspaper Business

Chief Google Economist, Hal Varian, has an interesting post about online and offline newspaper economics on the Google Public Policy blog. Most of the ideas will be familiar if you read Clay Shirky: cross-subsidization of the news; specialized sites drawing away ad revenue; relative cost of production.

One point that I have been hearing less about was that online news consumption tends to be mostly from work while offline newspapers are read at home on leisure time. In itself, this is not a huge insight; all of my news clients know that they get most of their traffic during the workday. What I had not thought about was that reading time at work is significantly more compressed than at home. The article gives statistics of 70 seconds per day online vs. 25 minutes offline — and advertisers pay for a premium for that longer attention span. The article predicts some good news for newspaper publishers: tablets (like the iPad) and other mobile devices (like the Kindle) will increase the at home consumption of the news and lengthen time spent reading. This should even out the disparity between online and offline advertising revenue. I think the accuracy of this prediction will depend on a) whether advertising formats can effectively adapt to and leverage the strengths of mobile devices and b) the advertisers opinion of the value of online advertising changes. As for the latter, advertisers seem to illogically value the immeasurable benefit of print advertising over the more measurable benefit of online advertising. That is, they probably assume print advertising is more effective than it actually is because there are no statistics to limit the perceived value. There are some great posts about how online advertising is undervalued.. Until this attitude changes, it will be difficult for newspapers to burn their boats.

Jan 07, 2010

The biggest thing since wood pulp

One of my favorite podcasts, Planet Money, recently did a segment on bias in journalism. Apparently, back in the 1870's, most newspapers were blatantly affiliated with a political party. In fact, their bias was openly stated in their mission statement and it was part of the newspaper industry business model. In return for political support, a newspaper publisher would get lucrative contracts for printing government documents and cushy government posts like postmaster. You historians will remember that Ben Franklin, himself a publisher, was the first postmaster general. The newspaper publishers didn't do this because they were greedy or unscrupulous; it was hard to make a living publishing a paper any other way. The cost of printing and distributing a paper was more than the audience could afford. Given the options of the low return of serving an audience that can't afford your product or the high return of serving a political party, the choice was easy.

But then a big technology disruption happened that drastically cut the cost of publishing a newspaper and all of the sudden made the business more profitable. It wasn't the Internet, it was cheap paper made from wood pulp. Up until that point, the news was printed on rag paper like what our dollars bills are made of. With cheaper paper, a publisher could lower the price and get a higher volume of sales. You could sell even more papers if you had higher quality news. More newspapers entered the market but there were still barriers to entry to preserve profits. Even though the variable cost of the papers was low, the up front fixed costs of the presses and distribution channels kept competition manageable.

Like wood pulp, the Internet also disrupted the news business but in a different ways. While the Internet has reduced the cost of distributing the news (especially over large geographic areas), it has also driven the revenues down. Most importantly, the classifieds business has been eaten up by sites like Craigslist. Advertisers have other options to reach a more targeted audience than general news can. And, of course, there are no barriers to entry. Even an schmo like me can have a blog.

Will the decline of profitability push publishers back to bias? There are some concerning signs. Not so much with the big media brands (although you could definitely make the argument that all publications have their leanings), but there are plenty of examples in blogosphere (and Twitter) where bloggers are paid to promote a product or political agenda. The distinction between professional and amateur media is blurring. We tend to follow people (professionals and amateurs) who share our passion (usually on very narrow topics) and we unsubscribe when they lose our interest or confidence. But very few people are getting rich on having us as an audience — not until they sell out and exploit our trust. Then we will leave as quickly as we came because there is bound to be a fresh new voice that values our attention as unprofitable as it may be.

As an audience that wants to be informed, we need to do two things.... First, we need to figure out a way to compensate for the value that we enjoy. There have been some interesting ideas of establishing non-profits and public-media style structures. Second, we need to become very good critical thinkers. We need to be able to filter and verify the information that is bombarding us. We need to become our own editors if we can't immediately trust anything in print. I am sure that is what people did back in the 1860's did too.

Sep 22, 2009

Paul Graham on Post Medium Publishing

Paul Graham, has an interesting essay on Post Medium Publishing. The general gist of is that publishers have never really been in the "content business." They have been in the business of selling paper (the embodiment of the content). Digital publishing, with its ease of replication, devalues paper as the embodiment of content and exposes the weakness of a pure content business. Publishers can either give content away and look for ad revenues or they can come up with some new embodiment that is both desirable and defensible. Personally, I think that publishers are in the audience business. They command an audience that advertisers are willing to reach. But the audience business has become more difficult with the increased competition from all sorts of information sources. Many people, like Graham, are looking for that new embodiment or channel that will bring back the exclusive audience attention that was so profitable back in the golden years of publishing.

Graham also invalidates some of the successful content market examples publishers are looking to emulate. For example, Graham says that iTunes (held as the gold standard for a successful content business) is not really a content store. Rather, it is a "toll-booth" that charges people to access the most direct path to their listening devices. Apple controls the path, it gets to charge a fee. If you don't control the device or the channel, you are back in the unprofitable content business. It appears that Time, Inc. has a strategy here but who knows if they will be able to create that market.

Jul 17, 2009

Drupal for Newspapers

Readers of Drupal for Publishers know that Drupal has been very successful in the small to medium newspaper market. In fact, the Newspapers on Drupal group is assembling a list of modules commonly used by newspapers. This effort has been going on for some time but there has been renewed energy because the older list was oriented around the outdated 5.x series of Drupal.

There is also a Drupal distribution for newspapers called ProsePoint that bundles Drupal, many of the modules listed by the Newspapers on Drupal Group, and some other third party code. I think that creating vertical specific distributions of software is a neat idea and there are lots of great examples. Gartner has been talking about CEVAs (Content Enabled Vertical Applications) for years but it is unlikely that their commercial software vendor audience will be as quick to capitalize on the idea as open source communities.

From an open source community perspective, vertical distros introduces interesting dynamics. On the one hand, these groups definitely strengthen the bond within segments of the community who can benefit greatly by collaborating with peers with very similar needs. On the other hand, specialization of community segments requires strong central leadership to maintain common ground and prevent the different groups from becoming too self absorbed and self interested. I don't think this is a problem in the Drupal world because leaders in the Newspapers on Drupal community seem to have a very strong belief in and commitment to the Drupal project as a whole. For now, at least, this very active constituency seems to be nothing but a positive force in the greater Drupal movement.

Apr 21, 2009

New Report: Drupal for Publishers

Note: because this report no longer covers the current version of Drupal, it is available for free on Scribd: Drupal for Publishers

Florence, MA (April 21, 2009) -- Content Here is pleased to announce the availability of a new report. Drupal for Publishers, is the first of a new report series called Web Technologies for Publishers. Written for a cross-functional technology selection committee, each report evaluates a technology against the specific requirements of a newspaper, magazine, or broadcast news website. All Content Here reports are written with the customer in mind — distilling a wealth of information from a wide range of sources into a concise, easy to read narrative. Drupal for Publishers has case studies describing Drupal implementations at Fast Company, Lifetime TV, Morris Publishing, Now Public, and The Onion.

The 24 page report is broken down into sections that explain what the different stakeholders (the publisher, the editor, and the developer) need to know about Drupal. The publisher's section contains information about the time to market, availability of talent, cost, and the future of Drupal. the editor's section covers functional aspects such as content entry, workflow, editorial control and general usability. The developer's section discusses extensibility, security, performance, and developer resources.

Drupal for Publishers is priced at $100 for a workgroup license and can be purchased from the Content Here reports store.

About Content Here: Content Here provides professional services and analysis of content technologies, with a deep technology focus. Drawing on real-world implementation experience, Content Here analysts evaluate software from an implementer's point of view to provide technology decision makers with information assets needed to achieve success, save money, and reduce risk.

Seth Gottlieb, Content Here
Tel: 857.488.4386
E-Mail: info@contenthere.net