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A New Mission for Media

Facilitate the flow of information to the point of its highest value.

The media industry at large has lost its path. Most media companies are heavily tilted toward media as entertainment, rather than media as information. As a result, they are engaged in a digital race to the bottom, where falling ad CPM drives them to seek higher page view numbers on thinner margins, focusing on quantity rather than quality, on usage rather than utility. This has left a huge, blue ocean of market opportunities in focused information services open to software and technology companies, who are growing at exponential rates while traditional media companies struggle to slow the rate at which their business is shrinking. Media businesses can stop drowning and start growing again if they recognize and adopt the mission statement above, the mission that media organizations have always had.

As a media organization, your mission is to facilitate the flow of information to the point of its highest value.

That doesn’t just mean its highest value to you, the business, but the highest value over all to the community you serve. Journalism can be seen as a fulfillment of this mission, because information about corporate malfeasance or government activity has more value to society when it is in the hands of consumers or voters. But media organizations, and especially newspaper organizations, need to embrace the idea that news is more than just journalism, and media is more than just news.

A perfect example of an information service that should have been, but was not, created by a media company, is Waze. Waze is a mobile application that feeds its users real-time traffic information and turn-by-turn directions. Now, media companies have been providing their users with traffic information for decades, even going to the expense of paying for aerial observation helicopters to monitor traffic conditions. They knew there was a market need there. They thought they were filling it. Then Waze came along and stole their thunder, because Waze gives users exactly the information they need, at the exact time that they need it, and that makes the information much more valuable to the consumer. The fact that you publish the same information on your web site or broadcast it over the radio is irrelevant. Waze provides that information at the point of its highest value. Waze is doing the job of a media company.

Why didn’t a media company invent Waze? In fact, why didn’t every local media company across America re-invent it? It’s certainly not because they didn’t know about the market need. I think it’s because they lost sight of their mission. They were thinking about attracting audiences to their products, when they should have been thinking about how to serve their audiences better. Had they been focused on facilitating the flow of information (rather than merely the flow of advertising dollars), they might have recognized the opportunity.

The proliferation of personal, always-present, always-connected, location-aware mobile devices presents a huge growth opportunity for media businesses. More than ever before, it is now possible to deliver information to your audience at the exact time and place that it will have the most value.

You, as a media business, should be brainstorming every day to find new situations where a specific person needs some specific information at some specific time, and crafting new products for those situations. Some of these products will be so valuable that your audience will pay for them. Some will be better suited to an ad-supported model. Still others may be sponsored by a single business or organization. Some may lend themselves to in-app purchase opportunities. By addressing the timely information needs of your audience, you open the possibility of multiple revenue streams. If you perform this brainstorming exercise, you will come up with many, possibly hundreds of ideas.

It is your responsibility, media executives, to structure your business as a pipeline for testing and scaling these ideas. Train your audience development team in the latest (fastest and cheapest) user research methods. Train your product development team on the latest mobile and web technologies. Leverage the on-demand compute power of the cloud to reduce up-front capital outlays, quickly shut down experiments that don’t pan out, and rapidly scale the ones that take off. Use application templates to shrink your time to first prototype. All of these are ways to reduce the cost and risk of testing new products.

Get your assembly line running and don’t let it stop. Ship a new app every quarter, then every month, then every two weeks. If they don’t make a splash, no worries. It’s a small investment, easy to write off. If they do hit, scale them up and leverage the new revenue streams.

The key is to focus on the essential mission of the media, to facilitate the flow of information to the point of its highest value, and never stop asking how you can better serve your audience. Do this, and you will turn your foundering media business into a rapidly growing information services company.

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Journalism is too important to be locked behind a paywall

When I hear newspaper industry veterans talk about getting paid for content, it makes me want to cry. Case in point, this speech from Bill Monroe to the Midwest Newspaper Summit in Des Moines, Iowa, given Feb. 4, 2010.

What’s missing in today’s marketplace is a way to enable newspapers to protect that content and to profit when others reuse it. – Bill Monroe

I’m sorry Mr. Monroe, but I must disagree quite strongly. The reason journalism should be free is that journalism is extremely valuable. Sound counter-intuitive? Not at all.

The process of journalism boils down to this: it is discovering information that few people have, but lots of people need, and disseminating that information as broadly as possible to ensure that those who need it, have it.

In a democratic society, there is possibly no process more valuable than that of journalism, outside of the process of democracy itself. From the neighborhood association to the national government, the public need to be informed about what is being done in their name, so that they can make informed decisions about the who and how of government.

And here is the catch. The output of the journalistic process is only valuable when it is delivered in a timely manner to the widest audience. Journalism that is hidden and inaccessible is oxymoronic. Placing news behind a pay wall makes it less valuable.

If we are to take journalism seriously as a public service, then our goal must be to spread the information farther and faster. It is ironic that the Internet has made the process of journalism more efficient and more effective, yet has made the process of supporting a business around it more difficult. But this is the reality of the 21st century, and denying this by attempting to restrict access to the news is a recipe for failure.

If you are a big shot in the newspaper industry, I beg you, do not destroy journalism in the name of saving it. The nation needs you to be smarter and more innovative than that. Find new business opportunities in making markets more efficient, rather than creating artificial scarcity and friction. Please.

Journalism is just too important to be locked behind a pay wall.

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Content Is Not Your Product: Why Newspapers Fail

Your newspaper is Seth Godin’s Meatball Sundae — full of valuable stuff, but not a product anyone wants to buy.

I hear the same sentiment from executives all over the media industry, and especially from newspapers. “We deserve to get paid for our content.”

Dear Media Executives: You’re doing it wrong!

The reason so many newspapers are sinking, shrinking, or stinking is that they have totally forgotten what the source of value for their business really is. Somehow they got confused by the 20th century mass production model and deluded themselves into thinking of content as a product that they package and sell.

The business of media has never been about production of anything. Not newspapers. Not radio waves. Not content. The business of media is about connecting people. It’s about building relationships.

Content is just a tool we use to build relationships.

When you treat content as a product, your focus is placed on the transaction, and the relationship gets ignored. A transaction, in isolation, does nothing to establish a relationship, to build trust. That trust, that relationship, is what makes the attention of your readers (or viewers or listeners) so valuable to advertisers. Without it, you are just a commodity, and business will go to the lowest bidder. This is the reason that ads are becoming less effective and CPMs are dropping.

The reason we produce content is to establish that trusting relationship with our community by providing them with something valuable for free. I intentionally use the word “community” and not “audience” here, because audience implies that we talk and they listen. In the 21st century more than ever, the relationship we as media companies have with our community has to go both ways. We must also listen and help others be heard. These activities are essential to establish a trusting relationship.

Many newspaper executives are up in arms about falling subscription revenues, and want to replace that revenue by charging for content online. But they are missing the point. Subscription revenue was never an end in itself, it was a proxy for measuring the value of the relationships we had created. Newspapers don’t necessarily need to replace that revenue, but they do need a new way to measure the value of the relationships they maintain. I don’t think charging for access to web sites serves that goal.

The language we use around advertising is broken as well. We talk about selling inventory and picking up remnants, as if communication were a physical good. But what we are really doing is facilitating conversations between businesses in our community and their (potential) customers. The conversations we enable create value for the whole community, some of which we capture as revenue.

The mass market, mass media mindset has run rampant over our community institutions. Our local media (newspaper, TV, and radio alike), now seem to be more concerned with attracting eyeballs than with helping people. Eyeballs have very little value. People have uncountable value. And when people are being treated as a commodity, they notice. They don’t like it. They take their eyeballs elsewhere.

As media, we talk, we listen, and we facilitate conversations. These three activities taken together are the essence of a media business. Take heed, old media. Talking is not a product, no matter how valuable it is what you are saying. If all your business does is talk, you will fail. If you want to succeed, then establish trust and build relationships in your community.

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NYT’s Freemium Paywall Plan is (maybe) Good Business

Last week, the New York Times announced plans to start charging certain readers for access to their web site. Reaction was predictable: Jeff Jarvis complained, TechCrunch ran some numbers, and Mashable used it as an excuse to talk about a rumored but still unannounced Apple product (seriously Mashable? come on).

The proposed "pay wall" is actually one of the six kinds of Free! You only pay if you really value the content.

The first thing to understand about the announced pay model is that it is misnamed. The NYT press release refers to it as a “metered model” and most reporters are using that language. However, this phrase gives entirely the wrong impression. Most people think of “metered” as the power utility model: you pay for it all, and the more you use, the more you pay.

What the Times is actually proposing is a Freemium model: you get limited access for free, or you pay a fixed fee for unlimited access. The only thing they are “metering” (actually measuring) is how many free page views you have used. When you hit a certain number, they ask you to subscribe. (And if you already subscribe to the Times, even just the Sunday edition, you’re covered.)

The Times people have put some good thinking into this, and for once the business model does make some sense, despite what Jeff Jarvis says. The logic goes like this. People who use our product frequently are likely to think it is valuable, and are therefore more likely to be willing to pay for that value. Infrequent visitors, who value our product less, can be monetized with lower value ad impressions, but we don’t want to spend too much supplying these freeloaders, so we’ll cut them off at some point.

PaidContent said it best:

It’s about tweaking the dials, up and down, to capture the payments of truly loyal readers who find continuing value in the brand, while not losing a critical number of occasional visitors.

As TechCrunch pointed out, the key to making the model work is to have excellent audience analytics. The Times will have to find the sweet spot in both number of free views and cost of subscription to maximize subscription revenue without sacrificing display ad rates.

But more than that, the company needs to use the subscription as just one of many touch points to build a stronger relationship with loyal readers. It’s that relationship from which the real value of the business is derived.

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Why News Archived Behind Paywall Fails

One business model for online news that has been suggested, tried, and failed, is to make the news free for some short time, and then archive it behind a pay-wall. There is more than one reason why this doesn’t work as a business model, but the most obvious one is an old adage that should have been well known in the newspaper industry: yesterday’s news wraps today’s fish.

It should not come as a surprise that it is hard to find people willing to pay good money for yesterday’s news, especially in the age of 24 hour TV news and instant digital dissemination over the Internet. Old news does have value to historians and researchers, but only after it has faded from the collective memory, decades after the fact. In the space between breaking news and historical research, the value of that content becomes nearly impossible to extract.

Placing news articles behind the pay-wall also fails for another reason: it breaks the web. Rather, it is counter to the way the web works.

Web pages accumulate links, which are crawled by search engines, raising the relative “value” of that page in search algorithms. The more links you have to your content, the more likely that your content will get significant traffic from search results. Content hidden behind a pay-wall cannot easily accumulate links, and visitors from search engines may find only a barrier page demanding payment rather than the content they were actually searching for. The chance of that visitor reaching for his credit card is much lower than the chance that she will hit the Back button and move on to the next (free) site in the search results.

Certainly there are successful business models where people pay for access to information. Online news archives, however, are more valuable, both to their creators and their consumers, when they are visible to search engines and available at no charge.

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The Tablet Fallacy (or, Old Media is Screwed)

“Help me, Obi-wan Tablet. You’re my only hope!” says old media. But these are not the droids they are looking for.

There has been so much hand waving in the last month about 2010 being “the year of the tablet”, it boggles the mind. Much of the buzz has centered around the anticipated announcement of a tablet device by Apple, makers of the much-admired iPhone. However, media industry wonks are all abuzz about how the new platform will redefine newspapers, magazines, and other print products.

At the time of this writing, the so-called iSlate is merely speculation and rumor, with any real announcement still more than a week away. I’m not going to waste space talking about a theoretical device. What concerns me is the old media heralding this concept as its salvation.

For you old media geezers, here’s a hint: the problem with your business is not the form factor.

Setting aside whether it is sensible to put so much emphasis on a portable device that won’t fit in your pocket, especially one that is still only a theory, riddle me this: if people won’t pay for your content on the web, why would they pay for it on a specialty device? (And if they will pay for it on the web, why would they need a specialty device?)

I’ve been listening to lots of speculation about the revolution in content presentation that tablet devices enable. My response is two words: horse hockey! I have yet to hear a single thing about the slate that does not already apply to the web. All those capabilities for rich, interconnected content presentation? The web has had that for years, and you have largely ignored it or actively fought against it.

No, it isn’t the presentation that media companies are excited about. It’s the idea of creating a new, closed, expensive product to replace their flagging paper-based distribution. It will be like the old days, they think, when people bought newspapers every day and we commanded premium prices for display ads because we owned all the eyeballs.

Okay, one more time: the old days are over, media people. They are not coming back. “Like a newspaper, but digital” is not a (viable) product. If we wanted newspapers, we know where to get them. We’re sorry about your gravy train going off the tracks, but it is time for you to recognize that you have been disintermediated.

It is time to start thinking about new ways to serve your community, and new business models to go with them. There are plenty of real needs in the marketplace that could be filled by a savvy media company, one willing and able to truly innovate rather than just repainting a burning barn.

All this talk about tablets just underscores the fact that the media industry, and especially the newspaper industry, is stuck in twentieth century thinking (and as a result is stuck with their twentieth century business model). Tablets devices may or may not succeed as a form factor, but media businesses definitely will not succeed without some fresh thinking about what their customers need and how to provide it.

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The Three C’s of New Media: Creation, Curation, and Compilation

Every media business is built around at least one of three key content activities: creation of content, curation of content, and compilation of data into content. Many media businesses, especially the large ones, make all three of these activities core competencies. Which sounds most like your business?

Creation of Content

This is what most people think of when they think about media: writing articles or features, shooting video, recording audio. In the Internet world it also includes blogging, micro-blogging, and podcasting. The creation (and publication) of original content is often a major focus (and a major expense) for media businesses, both traditional and digital, but it’s only one piece of a larger value proposition.

Curation of Content

A curator’s job is to select, organize, and care for the items in a collection. The title has usually been applied to museum conservators and librarians. In the Information Age, we can all become librarians. In fact, in this age of information overload, the service of selecting and organizing collections of information is more valuable than it ever was.

Like creation, curation of content is not new to digital media. Newspapers have always filled their pages with articles acquired from other sources, and broadcasters likewise fill out their schedules with syndicated content. Complex business relationships have grown up around these practices, and that’s a big part of the disruption the Internet is causing. Digital media enables more efficient curation capabilities and new kinds of syndication relationships. The successful digital media business will use the Internet, software, and human ingenuity to become the best information filter for its audience.

Compilation of Data as Content

Before the Internet, compilation and publication of large data sets was the job of specialty publishers, and except for the once ubiquitous phone book and the ever useful roadmap, such publications were expensive and difficult to acquire. In the new digital media, compiling data sets into content and distributing access to the data has become relatively inexpensive. Google, Microsoft, and Yahoo now give away access to map data and satellite imagery (and see OpenStreetMap for a project that is making map data truly free).

One of the goals of journalists has been not just to deliver the data, but to help people make sense of data and statistics. New digital media tools enable you to collect, query, and visualize data in ways that would have been impossible, or at least prohibitively expensive, just a few years ago. This area represents perhaps the greatest opportunity for Internet-savvy entrepreneurs to leap-frog traditional media. Don’t know where to start? Take a look at Data.gov for a huge collection of public domain data waiting to be sifted and visualized.

How Does Your Digital Media Garden Grow?

Does your digital media business focus on one of these three areas, or dabble in all three? I would be interested to hear about (and share) what tools you are using in each of these areas. Personally, I’m dissatisfied with the curation tools I have tried so far, and for me compilation of data has meant custom programming (I’m a web developer by trade).

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The Real Value of Social Media is its Weakness

Many still doubt the utility of social media. I myself was among the doubters until I was forced onto Twitter and Facebook to test the social media integration for a web site I was developing. That’s when I discovered that, although Sturgeon’s Law applies to social media as much as anything else, the small percentage of “good stuff” is exceedingly valuable.

Case in point is this article: In a pinch, Twitter found a long shot source | By Daniel Victor. Stuck playing catch up on a story on a Sunday evening, with deadline looming, journalist Daniel Victor turned to Twitter in a last ditch search for sources. Long story short, Twitter came through for him.

The value of social networking tools like Twitter and Facebook is not immediately obvious to some (it wasn’t to me), and may even be counter intuitive. I’ve heard complaints that it’s difficult or impossible to form deep relationships through digital media, and Luddite sentiment that we should turn back to “face time” in our relationships. I disagree with the idea that deep relationships cannot be formed online, but the real value of social media is not in the deep relationships. It’s in the weak ties.

According to network theory, it’s the weak ties in a social network that transfer the most value (by social network here we are not talking about the online space, but connections between people however they are formed and maintained). Those to whom we are closely connected obviously are valuable to us for personal reasons, but when it comes to economic value, it’s the casual acquaintances who add the most value.

When you are looking for a job, a client, a customer, it is the people in the periphery of your network who can connect you to valuable resources you would not otherwise have found. A former co-worker has a cousin who is looking for someone with just your skills, that sort of thing. Malcolm Gladwell called these people connectors, because they move in and out of many circles, cross-pollinating them like a (forgive the phrase) social butterfly.

The power of social media technologies is that they grease the proverbial skids. Using these new tools, we can all become connectors. The technology enables us to manage a larger number of weak ties than Dunbar would otherwise permit, thereby increasing the size and theoretical value of our personal network. You might only “know” a hundred people in “real life”, but your network on Twitter and LinkedIn might contain 500 links or more. And while all those folks won’t come to your sister’s wedding, at least a few would be happy to connect you to a local political operator to help you with a story for your paper, as Daniel Victor discovered.

The true value of social media is not the strong connections it enables, but the weak ones.