I attended a Medill lunch lecture today that featured speaker Nazila Fathi, a female Iranian journalist who fled her home country in 2009 due to threats on her life by the government. She had spent years reporting from the streets of Tehran, often working with foreign press, such as AFP. There were many inspirational stories of being a journalist and amazing views into a life and work within Iran, which is, frankly, a very unknown and foreign culture and situation to those of us U.S.
But a few small comments she made caught my attention in relation to the on going debate here on the potential role of citizen journalists.
There is a lot of debate here over the potential of citizen journalists given the new accessibility of information and communication platforms. I will not get into the debate here now, but roughly the two extreme camps are either (A) we are in a new golden age of journalism, where digital tools allow anyone to contribute to news and conversations, not just the privileged few journalists or (B) we are entering a dark ages of journalism as the traditional mainstream media shrinks and there are fewer professional journalists with the knowledge and skills to report responsibly and thoroughly.
I have always agreed more with the former, or at least with its potential. Traditional media has always been behind the curve at understanding the potential of new communication technology, only adopting it when it makes sense to extend, or at least not disrupt, their existing business models. And really, isn't giving citizens a voice and a platform to report and broadcast the truest form of freedom of the press and free speech?
Admittedly many "Citizen Journalist" initiatives that get attention are not sources of promise for a future world of news. Are bloggers on the Huffington Post or contributors to CNN's iReport really exciting you? Twitter and Facebook are nice platforms and I get a lot more content that is relevant to me, but I also have a lot of traditional media streaming in as original source material for the discussions.
I have always been most intrigued with the potential for enhancing community-level news. Maybe it was growing up with a small town newspaper that covered every little aspect of life in the community and was read by everyone one and then moving to larger communities with very weak or non-existent neighborhood or suburban newspapers. But now I have a feeling initiatives like Patch and newspapers inviting citizens to contribute are not really going to get much. The editors at those sites are doing yeoman's work. But what incentives to average joes have to contribute something to the site? A sense of contribution to their community? Maybe. An opportunity to publicize an event at their church or club? Most probably.
So how did comments about repressing journalists in Iran get my thinking to publicizing bake sales in suburban Illinois?
For the most part the level of "news" in most American communities is quite tame compared to concerns in Iran. A bake sale or new Subway opening up is in fact news. And there is no need for a highly trained, and paid, journalist to investigate and cover. School boards, local governments, and congressional delegation definitely do need watchdog reporting. Who will do that? At the moment there are still news outlets with reporters, although their numbers are quickly dwindling for these beats. Can citizens volunteer to fill that role? Maybe, but probably not as a long term solution. The fact is that this is a lot of work and requires commitment, even if you ignore the skills and resources questions.
In 2009 when Ms. Fathi fled Iran along with many other professional journalists, she relied on the increase of citizen journalists as sources. She mentioned nurses and government workers who stepped up to gather and report on facts that could be further broadcast by external media platforms. But after awhile their contribution declined and ceased. And it wasn't because of government pressure. She said they simply had other jobs to focus on. Being a nurse or government worker. They were not being paid to spend the time reporting, even if it was contributing to the greater good of their country.
So if citizens of Iran were not able to add a long term volunteer army of reporters where the criticality of the news stories is very high and the vacuum of professional journalists is large, what does this say for the long term capacity of citizen journalists in this country to offset a decline in professional journalists?
It definitely raises a concern. I am not suddenly in the doom and gloom camp. I still believe we are just entering a new, great age of communication, story telling, and information consumption. But it won't be a smooth transition. Some things are still important to be investigated and reported by someone where there is more benefit for the community as a whole than their own personal interest. So now we do need to find ways to subsidize this work. But I've said that before.
Friday, December 9, 2011
Thursday, November 3, 2011
Journalist Profiles as Meta Data?
Another pair of interesting stories in the news may be pointing to a new trend.
First, a new startup is attempting to create a platform to maintain profiles of journalists.
A few days later, news broke that Google is integrating Google Plus profiles of journalists along with articles in Google News.
While knee jerk reactions that Google is simply trying to find a way to incentivize people to use G+ are probably not wrong, the idea of journalist profiles as meta data is very interesting. Historically bylines consisted of names and organizations, if at all. Over the past dozen years or so email addresses have become very common additions to stories, but that is about all that can be done in print. On news websites emails became live links and publication sites could create static profile pages for writers. Eventually they began adding a search of other stories from the writer or links to writers' various social media profiles. But everything is left up to individual publishers. And if a writer contributes to multiple publications, or changes employers over time, profiles would not link.
So this leads me to two questions:
For the first question, I believe it is a strong yes. The News Transparency website claims a goal to improve "transparency of journalism by making it easier to find out about the individual human beings who produce the news". I think it also is a question of credibility. Again historically journalists were seen to be the most credible source of news and information. Content published in respected newspapers, magazines, and television stations was known to have been created by journalists who had education, training, and experience to fully investigate stories, print facts that were true, not be libelous, and avoid a biased agenda. (How true this actually was may be another question.) Since the internet has lowered the barrier of entry of publishing to nothing so that anyone and their grandmothers can instantly become bloggers (like me!), there is a value in identify the credibility of individual writers so that readers can judge the source of the material.
This actually gets into the question of what is a journalist? I have a degree from a supposedly top journalism school, but I do not believe that this gives me a special privilege or guaranteed quality level. Certain skills and knowledge are more important in different situations. I want someone with experience in deep investigations and thorough analysis reporting on political corruption. But for analysis of the national economy, level of knowledge of economics and good writing skills are arguably more important than any degree. My point is that we don't need to separate into two camps: journalists and others, such as bloggers. Both can be great or lousy sources. But readers would benefit from transparency to understand who they are reading. Some bloggers are doing a good job with disclosure. Whereas most journalists are still forced to rely on a masthead for credibility. (Try finding in-depth bios of NY Times reporters on their website...)
So now to the hard part. How could this be done?
None of these options seem satisfactory. I think in the near term we will see all of these options pursued in parallel but none become dominant.
The final factor in this is revenue. Google's other goal to begin tagging articles with profiles may be to better identify original sources for news. If this helps drive revenue streams (traffic, ads, etc) to publishers or writers and away from aggregators, it may be the one incentive to get publishers to hand over control of profile data to a third party.
(Note that I recognize the irony that I have very little profile information available at the moment. I am in the process of determining what to add and where.)
First, a new startup is attempting to create a platform to maintain profiles of journalists.
A few days later, news broke that Google is integrating Google Plus profiles of journalists along with articles in Google News.
While knee jerk reactions that Google is simply trying to find a way to incentivize people to use G+ are probably not wrong, the idea of journalist profiles as meta data is very interesting. Historically bylines consisted of names and organizations, if at all. Over the past dozen years or so email addresses have become very common additions to stories, but that is about all that can be done in print. On news websites emails became live links and publication sites could create static profile pages for writers. Eventually they began adding a search of other stories from the writer or links to writers' various social media profiles. But everything is left up to individual publishers. And if a writer contributes to multiple publications, or changes employers over time, profiles would not link.
So this leads me to two questions:
- Is there value is good journalist profile information?
- Where should this information reside?
For the first question, I believe it is a strong yes. The News Transparency website claims a goal to improve "transparency of journalism by making it easier to find out about the individual human beings who produce the news". I think it also is a question of credibility. Again historically journalists were seen to be the most credible source of news and information. Content published in respected newspapers, magazines, and television stations was known to have been created by journalists who had education, training, and experience to fully investigate stories, print facts that were true, not be libelous, and avoid a biased agenda. (How true this actually was may be another question.) Since the internet has lowered the barrier of entry of publishing to nothing so that anyone and their grandmothers can instantly become bloggers (like me!), there is a value in identify the credibility of individual writers so that readers can judge the source of the material.
This actually gets into the question of what is a journalist? I have a degree from a supposedly top journalism school, but I do not believe that this gives me a special privilege or guaranteed quality level. Certain skills and knowledge are more important in different situations. I want someone with experience in deep investigations and thorough analysis reporting on political corruption. But for analysis of the national economy, level of knowledge of economics and good writing skills are arguably more important than any degree. My point is that we don't need to separate into two camps: journalists and others, such as bloggers. Both can be great or lousy sources. But readers would benefit from transparency to understand who they are reading. Some bloggers are doing a good job with disclosure. Whereas most journalists are still forced to rely on a masthead for credibility. (Try finding in-depth bios of NY Times reporters on their website...)
So now to the hard part. How could this be done?
- Should profiles remain the responsibility of individual publications? This has severe limitations as content moves across platforms and writers move between publications. And publications have incentive to promote their brands, not individual contributors.
- Should a single company create a data base of information to be updated by individual writers (a la Google Plus) or via the public (a la News Transparency)? That gives a lot of power and responsibility to one company.
- Should we just wait for a single online profile to become the default and expect everyone to link to it? Facebook? LinkedIn? Twitter? These are not focused on necessarily providing information on a person to judge his ability to report or write about a specific topic. Will there become a dominant owner of the professional content social graph?
None of these options seem satisfactory. I think in the near term we will see all of these options pursued in parallel but none become dominant.
The final factor in this is revenue. Google's other goal to begin tagging articles with profiles may be to better identify original sources for news. If this helps drive revenue streams (traffic, ads, etc) to publishers or writers and away from aggregators, it may be the one incentive to get publishers to hand over control of profile data to a third party.
(Note that I recognize the irony that I have very little profile information available at the moment. I am in the process of determining what to add and where.)
Saturday, October 29, 2011
iPad: Killer of Newspapers
Two articles about tablet surveys were in my rss feeds yesterday that are perfect points for a post I have been wanting to make: Tablets are actually more a threat than a potential savior for newspapers. Or any other traditional publication or program for that matter.
Article 1: AdAge reported that a survey of magazine newspaper apps found that quality had strongest correlation to revenue.
Article 2: Per Nielsen, people use tablets while watching TV.
While both surveys discovered seemingly obvious results, the larger trend is both interesting and up for interpretation. As an iPad owner for almost a year, I have observed the same behavior. In other words, I do like to plop down on the couch and email, read, or play games while watching something on television. There is starting to be a lot of discussion about the emerging second screen market, but at the moment I am consuming different content on the device than is playing on the television. (I guess my demand is elastic afterall.)
The first survey that quality is important is both obvious and true. The device in my hands contains almost infinite choices of content, it's almost a perfect market in itself. While I have found myself trying more magazines and news apps on the iPad than I had been reading in print, my patience with them is very low. If the content and experience is not good, unique, or providing any relevant value to me I move on to another place with the slightest flick of a finger.
So this is why newspapers or any publication is at risk. I used to sit down on the couch with a periodical and as I was a momentary captive audience I would look at most of the different stories in each edition. But now I will only read (or watch) the components that are relevant to me, and the best among all of the options.
Case in point: I have my local newspaper app on my iPad. I look at it regularly as well as the website, which has more content. But I only look for local news. Maybe I scan headlines for breaking national news, but I reserve my attention on those topics for other national publications that I prefer that I can now easily read. I did not have many print magazine subscriptions before, I would never read enough to justify. But now I can read in a single sitting individual articles from The New York Times, Bloomberg, The Economist, The Atlantic, The New Yorker, ESPN publications, as well as lots of blogs and other new sources when I would have previously focused on a single publication. It is pigeonholing each publication to only its most unique and valuable content.
A related activity to this story is the role of content discovery. How do I choose to read those individual articles from different sources?
It used to be we relied on editors at our chosen publications to pick out topics and articles for us to read. Like many, I used to love sitting at a coffee shop with the Sunday New York Times and discovering great, interesting, and important stories all contained in one place. Now that discovery process is being replaced by various feeds from aggregators, social networks, and so-called "curators." There is a lot of creative innovation in this area right now. One particularly interesting experience is the custom magazines, of which there are several on the market. I have been using Zite (recently purchased by CNN) for a few months now, allowing it to learn about my reading habits and interests by feeding my rss and social streams and then manually telling it which topics and sources I like, while it presumably keeps track and learns from which stories I click on and if I stay long enough to read the entire article. Ignoring the privacy implications for the moment, I have to admit that this has been a rewarding experience as I the percentage of valuable content from a variety of new sources is very high. I have found new magazines, blogs, and writers that I enjoy as well as new topics of interest.
Privacy implications and the question of seeking self-reinforcing ideas are critical questions that need to be addressed here.
Side note: As I was finishing this post I found this article in the LA Times about newspapers looking to tablets as a new business model, but from an integrated hardware opportunity. My argument above has been that the tablet user experience will further pigeonhole newspapers as local content sources, and I don't think that will change even if they distribute hardware as the Philadelphia tablet has been described. (I have tried the Philly device.) The hardware opportunity is an entirely different question, but it starts with competitive positioning against all other hardware providers. More to say on that later.
Article 1: AdAge reported that a survey of magazine newspaper apps found that quality had strongest correlation to revenue.
Article 2: Per Nielsen, people use tablets while watching TV.
While both surveys discovered seemingly obvious results, the larger trend is both interesting and up for interpretation. As an iPad owner for almost a year, I have observed the same behavior. In other words, I do like to plop down on the couch and email, read, or play games while watching something on television. There is starting to be a lot of discussion about the emerging second screen market, but at the moment I am consuming different content on the device than is playing on the television. (I guess my demand is elastic afterall.)
The first survey that quality is important is both obvious and true. The device in my hands contains almost infinite choices of content, it's almost a perfect market in itself. While I have found myself trying more magazines and news apps on the iPad than I had been reading in print, my patience with them is very low. If the content and experience is not good, unique, or providing any relevant value to me I move on to another place with the slightest flick of a finger.
So this is why newspapers or any publication is at risk. I used to sit down on the couch with a periodical and as I was a momentary captive audience I would look at most of the different stories in each edition. But now I will only read (or watch) the components that are relevant to me, and the best among all of the options.
Case in point: I have my local newspaper app on my iPad. I look at it regularly as well as the website, which has more content. But I only look for local news. Maybe I scan headlines for breaking national news, but I reserve my attention on those topics for other national publications that I prefer that I can now easily read. I did not have many print magazine subscriptions before, I would never read enough to justify. But now I can read in a single sitting individual articles from The New York Times, Bloomberg, The Economist, The Atlantic, The New Yorker, ESPN publications, as well as lots of blogs and other new sources when I would have previously focused on a single publication. It is pigeonholing each publication to only its most unique and valuable content.
A related activity to this story is the role of content discovery. How do I choose to read those individual articles from different sources?
It used to be we relied on editors at our chosen publications to pick out topics and articles for us to read. Like many, I used to love sitting at a coffee shop with the Sunday New York Times and discovering great, interesting, and important stories all contained in one place. Now that discovery process is being replaced by various feeds from aggregators, social networks, and so-called "curators." There is a lot of creative innovation in this area right now. One particularly interesting experience is the custom magazines, of which there are several on the market. I have been using Zite (recently purchased by CNN) for a few months now, allowing it to learn about my reading habits and interests by feeding my rss and social streams and then manually telling it which topics and sources I like, while it presumably keeps track and learns from which stories I click on and if I stay long enough to read the entire article. Ignoring the privacy implications for the moment, I have to admit that this has been a rewarding experience as I the percentage of valuable content from a variety of new sources is very high. I have found new magazines, blogs, and writers that I enjoy as well as new topics of interest.
Privacy implications and the question of seeking self-reinforcing ideas are critical questions that need to be addressed here.
Side note: As I was finishing this post I found this article in the LA Times about newspapers looking to tablets as a new business model, but from an integrated hardware opportunity. My argument above has been that the tablet user experience will further pigeonhole newspapers as local content sources, and I don't think that will change even if they distribute hardware as the Philadelphia tablet has been described. (I have tried the Philly device.) The hardware opportunity is an entirely different question, but it starts with competitive positioning against all other hardware providers. More to say on that later.
Wednesday, October 26, 2011
Paying for Content Part 2: Wallet Share
Continuing the question of whether I will ever pay for a newspaper online, or actually any content anywhere, the answer is a combination of how valuable the content is to me, the scarcity of the content in question, and how much it costs.
As for how do I define personal value of content, that gets into personal tastes and preferences, need and demand for specific information, and awareness of content. I will look at some of these in later posts.
As I discussed in Part 1 of this post, the price per individual piece of content is dropping due to the internet. The massive increase in the supply of all types of content that is good enough substitutes for content previously consumed has shifted the supply curve far to the right. This means that the intersection with the demand curve is at both a higher quantity of content produced and consumed, and at a lower price.
Here is the same chart again.
The distance between the two supply curves really depends on the time frames we are comparing. To look at 1991 to 2011 would reveal and almost infintesimal shift. (Although I want to explore in a separate post the upper limits of supply for any individual consumer, the observed supply is obviously a subset of the entire available internet.) Comparing 2010 to 2011 would still show a noticeable shift to the right as more and more content is produced and becomes available to consumers.
But coming back to demand, I will argue that the demand curve is steeper, or more inelastic, than most may assume. What does this mean? It means that there is a limit on the appetite for consuming additional content, even at low or near zero incremental prices. Demand is not perfectly inelastic. People surely consume more content and media today than they did 5 years ago, which was more than they did 10 years before that. Each day has only 24 hours, but the increase in recent years has often come for the ability to easily consume content during times that were previously underutilized. First was internet access on every work and home computer that facilitated surfing during every moment of down time. Now we have the mobile explosion, which enables content consumption in almost every remaining nook and cranny of previously inaccessible times. I can now read any book, news source, or watch a movie or listen to a podcast while taking a walk, sitting in a waiting room, riding a bus, and to some extent, even driving. I guess we still have certain subways with no cell phone access, some rural areas, and the few minutes of an airplane's take off and landing that we are limited to our own thoughts. (Optional detour: Scott Adams has an interesting hypothesis on the loss of boredom.) This reminds me of the story of the professor who puts stones in a jar and asks if it is full, then adds sand, then water, each filling in smaller and smaller voids. It is amazing how much content I will have to consume on an upcoming flight from Chicago to Hong Kong from inflight entertainment and stored on an ipad.
I am going to argue that we have hit a saturation point of content consumption. Out of our 24 hour day, we are consuming as much content as we can amidst our other activities. Sure, this is going to make me look silly in a few years when I'm proven wrong in a big way, but let's work with that assumption for now.
The other fixed resource is money, especially in an economy such as today with stagnant personal income, less credit, and low inflation. People only have so much discretionary budget to spend on information and entertainment content.
So now we can talk about tradeoffs.
Along the inelastic portion of the demand curve, people will not consume an additional amount of content, no matter how much more is produced, or how it is priced. Even if it is free. That does not mean that someone will not choose to consume something new, just that they will do add it at the expense of something else.
Let's look at some examples and see how it works with a personal budget.
At the beginning of 2010 my family was paying roughly $150 to $200 per month for access to content. This included in round numbers:
Since then we have changed our sources of content, but we are paying about about the same each month out of pocket.
The total content available for consumption is higher. Netflix has thousands of movie and television show titles that I can access. Mobile apps (we have an ipad and recently added an iphone) and ebooks provide significantly more hours of content for $10-$20 than a single hardcover book. And we will probably keep changing this mix. At some point we will probably end or reduce our newspaper subscription because we don't actually read the print product any more, instead getting our news from a variety of sources online that are for the most part fine substitutes. (Disclosure: I work for a newspaper company so I am clinging on more than I would be rationally.) We would use that budget savings to purchase access to something new, or just pocket the savings.
I still read content from my newspaper, occasionally in print, and almost daily online. But of all of the content I consume, it represents a lower portion than before. I glance at local and regional news, see what is the business section, and scan the sports columnists. That's it. I have different sources for national news, features, and even comics.
So... if the newspaper's share of content that I consume across all channels is decreasing... and I have more sources available... and my total budget on content is fixed... then it should follow that the share of my budget spent on the newspaper is less.
Then is it possible that I would ever pay for a newspaper online? Yes, it is possible. But not as much as I ever paid for a print subscription. It would have to be a small fraction of my budget, probably replacing a small portion of my print subscription, just as much as covers the value I get from those truly unique stories and analysis that I can't get anywhere else, mostly likely on local topics, priced competitively with similar online content.
Notice that I did not distinguish between platforms. It doesn't matter if the news will be available on a website, in an app, embedded in a tablet, or even printed on a piece of paper. I won't pay extra for access to any particular channel, but I will pay for valuable, unique content. Just not very much.
As for how do I define personal value of content, that gets into personal tastes and preferences, need and demand for specific information, and awareness of content. I will look at some of these in later posts.
As I discussed in Part 1 of this post, the price per individual piece of content is dropping due to the internet. The massive increase in the supply of all types of content that is good enough substitutes for content previously consumed has shifted the supply curve far to the right. This means that the intersection with the demand curve is at both a higher quantity of content produced and consumed, and at a lower price.
Here is the same chart again.
The distance between the two supply curves really depends on the time frames we are comparing. To look at 1991 to 2011 would reveal and almost infintesimal shift. (Although I want to explore in a separate post the upper limits of supply for any individual consumer, the observed supply is obviously a subset of the entire available internet.) Comparing 2010 to 2011 would still show a noticeable shift to the right as more and more content is produced and becomes available to consumers.
But coming back to demand, I will argue that the demand curve is steeper, or more inelastic, than most may assume. What does this mean? It means that there is a limit on the appetite for consuming additional content, even at low or near zero incremental prices. Demand is not perfectly inelastic. People surely consume more content and media today than they did 5 years ago, which was more than they did 10 years before that. Each day has only 24 hours, but the increase in recent years has often come for the ability to easily consume content during times that were previously underutilized. First was internet access on every work and home computer that facilitated surfing during every moment of down time. Now we have the mobile explosion, which enables content consumption in almost every remaining nook and cranny of previously inaccessible times. I can now read any book, news source, or watch a movie or listen to a podcast while taking a walk, sitting in a waiting room, riding a bus, and to some extent, even driving. I guess we still have certain subways with no cell phone access, some rural areas, and the few minutes of an airplane's take off and landing that we are limited to our own thoughts. (Optional detour: Scott Adams has an interesting hypothesis on the loss of boredom.) This reminds me of the story of the professor who puts stones in a jar and asks if it is full, then adds sand, then water, each filling in smaller and smaller voids. It is amazing how much content I will have to consume on an upcoming flight from Chicago to Hong Kong from inflight entertainment and stored on an ipad.
 |
| The demand curve was elastic, having a slope, as people were able to increase the amount of content as the supply increased and the price dropped. But at the saturation point, arguably about where we are now, the curve becomes steep, showing that no more total content will be consumed regardless of how much is produced or how low the price goes. |
I am going to argue that we have hit a saturation point of content consumption. Out of our 24 hour day, we are consuming as much content as we can amidst our other activities. Sure, this is going to make me look silly in a few years when I'm proven wrong in a big way, but let's work with that assumption for now.
The other fixed resource is money, especially in an economy such as today with stagnant personal income, less credit, and low inflation. People only have so much discretionary budget to spend on information and entertainment content.
So now we can talk about tradeoffs.
Along the inelastic portion of the demand curve, people will not consume an additional amount of content, no matter how much more is produced, or how it is priced. Even if it is free. That does not mean that someone will not choose to consume something new, just that they will do add it at the expense of something else.
Let's look at some examples and see how it works with a personal budget.
At the beginning of 2010 my family was paying roughly $150 to $200 per month for access to content. This included in round numbers:
- $130 for cable bundle, with 100+ television channels, internet access, and phone
- $15 for daily newspaper subscription
- $10-50 average spending between books (physical), music (a la carte, iTunes), Redbox movie rentals and the occasional trip the movie theater.
Since then we have changed our sources of content, but we are paying about about the same each month out of pocket.
- $100 for cable bundle with 50 television channels, and internet access
- $10 for Netflix streaming
- $15 for daily newspaper subscription (still)
- $10-$50 average spending between books (digital), music (a la carte, iTunes), apps and other mobile content, and still the occasional trip the movie theater.
The total content available for consumption is higher. Netflix has thousands of movie and television show titles that I can access. Mobile apps (we have an ipad and recently added an iphone) and ebooks provide significantly more hours of content for $10-$20 than a single hardcover book. And we will probably keep changing this mix. At some point we will probably end or reduce our newspaper subscription because we don't actually read the print product any more, instead getting our news from a variety of sources online that are for the most part fine substitutes. (Disclosure: I work for a newspaper company so I am clinging on more than I would be rationally.) We would use that budget savings to purchase access to something new, or just pocket the savings.
I still read content from my newspaper, occasionally in print, and almost daily online. But of all of the content I consume, it represents a lower portion than before. I glance at local and regional news, see what is the business section, and scan the sports columnists. That's it. I have different sources for national news, features, and even comics.
So... if the newspaper's share of content that I consume across all channels is decreasing... and I have more sources available... and my total budget on content is fixed... then it should follow that the share of my budget spent on the newspaper is less.
Then is it possible that I would ever pay for a newspaper online? Yes, it is possible. But not as much as I ever paid for a print subscription. It would have to be a small fraction of my budget, probably replacing a small portion of my print subscription, just as much as covers the value I get from those truly unique stories and analysis that I can't get anywhere else, mostly likely on local topics, priced competitively with similar online content.
Notice that I did not distinguish between platforms. It doesn't matter if the news will be available on a website, in an app, embedded in a tablet, or even printed on a piece of paper. I won't pay extra for access to any particular channel, but I will pay for valuable, unique content. Just not very much.
Thursday, October 20, 2011
Paying for Content Part 1: No Scarcity
So will I ever pay to read the newspaper online?
Many in the news industry believed they committed the digital sin over the past 15 years by putting free content online. Now they want to try and correct what they did and avoid committing that sin again in new channels, such as mobile.
The current trend toward paywalls is not new. We have seen several cycles of hope that readers can be charged directly for reading content. These are followed by periods of disappointment, believing that in fact readers never will pay online. The Wall Street Journal is always held up as the anecdote in both cycles. "It works for the WSJ!" or "It will only work for the WSJ."
The promise of enabling technology has been part of each cycle. We had hope in the micropayment systems. (Remember the W3C plans?) Then the promise of paywall solutions, which have been talked about since the 1990s (remember when Slate and Salon were subscription sites?), but we are only now seeing broad implementation? Recently apps and tablets were the new-found saviors. Tomorrow it will be something else. But at the end of the day they are all trying to get someone to pay for the same content that they have been reluctant to pay for in other delivery packages. But people paid for the print content,didn't they? Hold that thought for a moment.
First of all, this is not about technology providing a solution to the long-time problem, it is an economic issue.
There are two fundamental factors in whether I as a consumer will pay for any specific content--online or off. The first is scarcity and uniqueness and the second is wallet share. This post looks at the economic changes removing scarcity from content markets. My next post will discuss paying for all content from a consolidated personal budget perspective.
Several people have written about looking at online content from a scarcity perspective. (Jarvis, Shirky) The economics are simple to see if you compare available media sources today versus the early 1990s. Before the wide adoption of the web, the amount of sources available to a consumer was limited by geography.
- Each city's newspaper held almost a monopoly of news communication. Although television news, especially cable, was already adding direct competition for the consumer's attention as they could be providing the same information.We did pay for printed content, because that was one of the few choices.
- Books appeared to be abundantly available, but choices were actually limited by what was carried in local stores or libraries.
- Music was similar to books, limited by albums carried by the local music store.
- Movies were already changing from very scarce to less so. A local theater might be showing a few new releases while network and cable television broadcast a slightly wider selection of shows. However with VCRs and DVDs movie rental stores significantly decreased the limitation of movies to watch at any one moment. Although anyone like me who remembers being disappointed because all desired movies were already checked out from the video store and then still paying several dollars for an old movie I had already seen because it was that was available recognizes even Blockbuster priced based on scarcity.
Compare this with today. There is almost an endless supply of each of these types of content available at anytime anywhere because of the internet. Plus there are millions and millions of new websites, blogs, podcasts, videos, and various types of content instantly available at anyone's fingertips. Today, we create as much content every two days as was previously created over centuries. Content is no longer scarce, therefore it cannot be priced and sold based on scarcity.
I am not saying content doesn't have value and cannot be sold, only that the models are different. Other factors still give content value, the most obvious one being quality. So what is quality? That is the multi-billion dollar question that industries are betting on.
In this context I am going to argue that quality is relevance, uniqueness, and some mix of reliability, thoroughness, composition, etc. Most discussions of quality content focus on the latter mix of those qualities. Those are traits that can be learned, or can come easily with talent. Good research. Good writing. Good reporting. Good directing. Good editing. Those are all important, but I see them more as a barrier to entry to be marketable content. In a lot of cases, more than most will admit, that barrier to entry is low. While the vast majority of what is produced today is almost-zero value user generated content, there are a lot of competitors with similar quality content to traditional media that are perfectly acceptable substitutes from the consumer's perspective.
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| The internet has increased the supply of content available to consumers, which effectively shifts the supply curve to the right, thus increasing the amount of content consumed, but also lowering the price of content. This assumes the new entrants to the content market are substitutes for content supplied previously. A following post will argue that the demand curve is steeply sloped, even more dramatically lowering the price closer to zero. |
This is where decades of geography-constrained scarcity has put blinders on content publishers. Something that was the only source of one type of content to a consumer was perceived as quality back then, but now is just one of countless substitutable sources. A favorite example is recipes printed in a newspaper or magazine. They were great selling points as there were no other sources of recently published recipes available to readers other than cookbooks. Today those same recipes have been commoditized by databases of recipes online and endless cooking shows on cable food channels. The incremental value to readers of a recipe published in a local newspaper is now very low compared to what it was 10-15 years ago.
Some news reporting also fits this pattern. In the past several reporters representing different publications would cover the same event to create here-are-the-facts news articles. This was justified because each was reporting for a different market that did not overlap with the others. Newswires like the Associated Press simplified this to an extent so that every little newspaper did not have to have reporters all across the state, country, and world. But there was still a lot of overlapping reporting. For a visual, just imagine media day at the Super Bowl. Each reporter does not bring something unique to the story. Now that a reader in any one market can access many of these news articles, the incremental value of any single report is negligible.
Some news reporting also fits this pattern. In the past several reporters representing different publications would cover the same event to create here-are-the-facts news articles. This was justified because each was reporting for a different market that did not overlap with the others. Newswires like the Associated Press simplified this to an extent so that every little newspaper did not have to have reporters all across the state, country, and world. But there was still a lot of overlapping reporting. For a visual, just imagine media day at the Super Bowl. Each reporter does not bring something unique to the story. Now that a reader in any one market can access many of these news articles, the incremental value of any single report is negligible.
Of course there still is some content that stands above the crowd. This is due to uniqueness and relevance. The truly premium brands that have survived usually do represent a quality that is in fact scarce. The New York Times, Wall Street Journal, leading book authors, top film directors, award-winning musicians all bring talent, skill, and resources together to create content that has unique value. I will gladly pay for a new book by Michael Chabon or to read an issue of the New Yorker because the millions of other books and articles available at lower prices or for free are not equal substitutes. And my local newspaper still can report on news that is local and relevant to me about my home town with a breadth of coverage and a quality from credible investigation and reporting not easily replicated by other media.
So content scarcity does still exist, but it in itself is scarce. The risk for media is not recognizing when their content has been commoditized by the deluge of good-enough substitutes from the consumer's perspective. And that takes a very honest conversation, putting away egos, and trusting consumers' choices.
So will I pay to read a newspaper online? If it is for truly scarce, quality, relevant information....maybe. And it depends how much it costs.
Thursday, October 13, 2011
The Subsidization Model is Dead
In the 19th Century news journalism was supported by government patronage of printing contracts.
In the 20th Century news journalism was supported by mass advertising and classified advertising.
Both existed because local media had an information distribution monopoly over a geographic population. Radio and television didn't really change things as local oligopolies continued to exist with a limited number of channels available to readers as alternatives. Now that that monopoly has been eliminated by the internet, those revenue models, which really had nothing to do with the editorial product, have disappeared. The first transition resulted in the reduction of many smaller newspapers and outright political publications and eventually helped gave rise to the larger media enterprises and the goal of unbiased journalism.
We are now in the next transition needing a new subsidy. The same societal and human need for news and journalism exits, and the cost of employing professional journalists and investing in reporting still exists. But the cost structure is out of balance.
We are currently at the beginning of an era of entreprenurial journalism. What does that mean? With the physical and cost barriers to entry for publishing reduced to almost zero, and new technology and distribution channels popping up almost daily, there are opportunities to try to do "journalism" as a business. Many will try to get individual consumers to pay for their share of the societal benefit.
It's not going to work.
Some types of content and information will convert to new businesses. Feature content--food recipes, travel advice, health tips may be monetized at a sustainable level. News will not. In economic terms, news is a public good, displaying the qualities of having a beneficial externality, where the private marginal benefit is less than the societal marginal benefit, so the equilibrium supply determined by the market will be less than optimal amount, or at prices not sustainable by consumers. For example, the marginal benefit to me (and the sum of marginal benefits to each individual reader) of reading a lengthy investigation of state house corruption is not as high as the total benefit of the investigation being done and published for everyone to read.
This is what we are beginning to witness as newspapers have to rely increasingly on revenues generated by consumers, whether it be from print subscriptions, website paywalls, or paid apps. These will not command high enough prices to pay for the quantity of reporting that was previously done (presumably because it was beneficial for society), and that is why we are seeing layoffs, bureaus closed down, beats eliminated, and the overall amount of news reported reduced. It explains part of the paradox that overall readership of some publications is up when you tally all of the print and digital readers, yet cost cutting continues.
In such cases of positive externalities, the government may intervene in the market to subsidize the industry or to legally require consumption levels. That's the tricky part for journalism. Due to the Press' unique call out in the Constitution and the fact that much of the societal benefit derives from its role as the Fourth Estate, it cannot look to the government for a solution.
At the end of the day, this is the problem that must be solved. There is not a satisfactory market equilibrium for journalism. It needs a subsidy that cannot come from the government. It used to be mass advertising, which has been disrupted. So what can be the next subsidy?
In the 20th Century news journalism was supported by mass advertising and classified advertising.
Both existed because local media had an information distribution monopoly over a geographic population. Radio and television didn't really change things as local oligopolies continued to exist with a limited number of channels available to readers as alternatives. Now that that monopoly has been eliminated by the internet, those revenue models, which really had nothing to do with the editorial product, have disappeared. The first transition resulted in the reduction of many smaller newspapers and outright political publications and eventually helped gave rise to the larger media enterprises and the goal of unbiased journalism.
We are now in the next transition needing a new subsidy. The same societal and human need for news and journalism exits, and the cost of employing professional journalists and investing in reporting still exists. But the cost structure is out of balance.
We are currently at the beginning of an era of entreprenurial journalism. What does that mean? With the physical and cost barriers to entry for publishing reduced to almost zero, and new technology and distribution channels popping up almost daily, there are opportunities to try to do "journalism" as a business. Many will try to get individual consumers to pay for their share of the societal benefit.
It's not going to work.
Some types of content and information will convert to new businesses. Feature content--food recipes, travel advice, health tips may be monetized at a sustainable level. News will not. In economic terms, news is a public good, displaying the qualities of having a beneficial externality, where the private marginal benefit is less than the societal marginal benefit, so the equilibrium supply determined by the market will be less than optimal amount, or at prices not sustainable by consumers. For example, the marginal benefit to me (and the sum of marginal benefits to each individual reader) of reading a lengthy investigation of state house corruption is not as high as the total benefit of the investigation being done and published for everyone to read.
 |
| In this graph, personal demand for news would result in the yellow star equilibrium, which is less news produced than is optimal for society, which would be the red star. The price willingly paid by private consumers (P1) is not enough to cover the optimal amount of news reporting for society (Q2). |
This is what we are beginning to witness as newspapers have to rely increasingly on revenues generated by consumers, whether it be from print subscriptions, website paywalls, or paid apps. These will not command high enough prices to pay for the quantity of reporting that was previously done (presumably because it was beneficial for society), and that is why we are seeing layoffs, bureaus closed down, beats eliminated, and the overall amount of news reported reduced. It explains part of the paradox that overall readership of some publications is up when you tally all of the print and digital readers, yet cost cutting continues.
In such cases of positive externalities, the government may intervene in the market to subsidize the industry or to legally require consumption levels. That's the tricky part for journalism. Due to the Press' unique call out in the Constitution and the fact that much of the societal benefit derives from its role as the Fourth Estate, it cannot look to the government for a solution.
At the end of the day, this is the problem that must be solved. There is not a satisfactory market equilibrium for journalism. It needs a subsidy that cannot come from the government. It used to be mass advertising, which has been disrupted. So what can be the next subsidy?
Thursday, July 21, 2011
McLuhan's Legacy
Today would be the 100th birthday of Marshall McLuhan, the literary and later technology professor who in the early 1960s famously wrote prophetically, albeit almost chillingly, about the evolution of media. Coining phrases such as "the medium is the message" and "the global village" he established lenses that were interesting for viewing the adoption of television at the time, and maybe even more poignantly, the recent impacts of the internet.
I first read McLuhan as an undergrad in journalism school in the very first days of the Web, so early that the reading was for a class that did not cover any online or digital media. But as an early student of what the internet could mean for journalism his way of looking at the large trends in media consumption and the role of technology forever changed my perspective on the potential of the industry.
I purchased a copy of McLuhan's Understanding Media as the my first book after graduation. It was to be the start of an eventual library and as a reminder to keep focus on the larger trends in media evolution and not get too caught up in the daily incremental fad that is touted as changing the world. I keep a copy at my desk to this day.
It is now twelve years later and I have seen a lot of change in the media--both as an avid consumer, and as a professional working in various aspects. It's time for me to formally join discussions online. I continually share thoughts, have discussions, and seek to learn new perspectives, but I have not formally collected or shared them in one place yet, such as this blog. So please join in the discussions and let's see where this goes, and how the message changes with the medium.
I first read McLuhan as an undergrad in journalism school in the very first days of the Web, so early that the reading was for a class that did not cover any online or digital media. But as an early student of what the internet could mean for journalism his way of looking at the large trends in media consumption and the role of technology forever changed my perspective on the potential of the industry.
I purchased a copy of McLuhan's Understanding Media as the my first book after graduation. It was to be the start of an eventual library and as a reminder to keep focus on the larger trends in media evolution and not get too caught up in the daily incremental fad that is touted as changing the world. I keep a copy at my desk to this day.
It is now twelve years later and I have seen a lot of change in the media--both as an avid consumer, and as a professional working in various aspects. It's time for me to formally join discussions online. I continually share thoughts, have discussions, and seek to learn new perspectives, but I have not formally collected or shared them in one place yet, such as this blog. So please join in the discussions and let's see where this goes, and how the message changes with the medium.
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