Category Archives: Internet

Hello?

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Mr. Watson, come here… I need you…

Sometimes when new technologies come along, they overturn the world of conventional thinking – particularly when it comes to valuation.

Take a look at the telephone.

Before Alexander Graham Bell invented the telephone, value was directly married to rarity.  The more rare an object, the more it was worth.  Gold had great value because there was not a lot of it. Make gold as common as lead, and its value would plummet.  So people horded gold and nations went to war over gold. Only kings and very rich people had gold. That was how they liked it.  Open the treasury in the middle of the night and luxuriate in your wealth.

Comes the telephone.

What is the value of a telephone if only one person has it?

Nothing.

Who are you going to call?

If only a few kings and a few rich people have phones, the value increases, but only marginally. Now you can call a few friends,but that’s about it.

However, if everyone has a phone, right down to the local plumber, suddenly a phone is so valuable that you can not afford not to have one.

Now that’s value, but an inverse value from that which had been true through almost all of human experience. It is no longer rarity that gives value, but rather commonality.

What does this have to do with the current crisis in newspapers?

A lot, I think.

Because the crisis we are facing in newspapers and journalism in general is also a moment in which conventional thinking about valuation is being turned on its head, although we are slow to see that , as usual.

Up until now, we have thought that the primary asset of a paper or a TV station was, in fact, the station or the newspaper itself.  It was The New York Times that had the value, or CBS News. The rest, the people who worked there, were in a sense fungible.

In other words, the institution lived on and on, and readers or viewers were attracted to the institution, while the people who created the content for the institution were fundamentally replaceable or interchangeable.

This we sometimes referred to as ‘branding’.

This remained true so long as the technology of the day meant that there were a limited number of pipelines or platforms for delivery of information or content (and the advertising that went along with them).  In the words of AJ Liebling “freedom of the press is limited to those who own one”.

Because it was ridiculously expensive to even entertain the idea of having your own press.  The very cost of a press and the attendant mechanisms of distribution were a barrier to entry for competitors.  Thus, the perceived value of an institution like The New York Times was vested in that barrier to entry.  The reporters might go from paper to paper, from The Times to The Herald to The Daily News, but the paper, the institution would survive.

The reporters were marginal.

The same was true for television.

When it surfaced in the 1950s, the signal was pushed through the air.  There was limited space on the electromagnetic spectrum, so the FCC licensed the limited space to three networks, ABC, NBC and CBS and they held a virtual monopoly over access to people’s homes.

Shows might come and go, but the platform, the pipeline was in the frequency (and in all the expensive investment in infrastructure to push pictures and sound into the air).  The value was in the network, not in the content, per se.  The content was simply the filler, which was changeable depending upon taste.

When cable arrived, it as the same model, simply fractionalized over more players.

The web, however, like the invention of the telephone, changed everything.

At first, newspapers and later television stations saw the web as yet another platform for distribution – a kind of super cable, that would carry The New York Times or CBS shows into everyone’s home.

But that was not the case.

What the web did was to rewrite the fundamentals of valuation.

And like medieval kings, it was and is hard for those who once had the most precious things in the world to grasp that the very definition of value has now changed forever.

What the web did was to take away the barriers to entry. To make the ‘gold’  of the NY Times or NBC’s FCC license as common as lead.

Now, anyone, any time, and for no cost, could get into 2 billion homes. For free.

So where does value suddenly reside?

In the content.

People online are seeking content.

Quality content.

And they do not care where it resides.

iTunes is a classic indicator of what is coming.

In webworld, music is often a harbinger of where the future lies.

When I go to iTunes to download a song, I don’t care if the recording artist is signed with Arista or RCA or Decca or whomever. It does not matter a bit to me.  It is the music I am after.  The ‘studio’ goes away. It is the content that is king.

Each day I go to NYTimes.com to read the paper, but in truth, if Frank Rich, Maureen Dowd, Tom Friedman and a handfull of others were to suddenly break away from the paper and set up their own website (and like Drudge, they might aggregate headlines), I would go there instead.

Now, the NY Times might be in financial trouble, and perhaps their website does not generate enough revenue to support their building, the presses, their trucks, their vast management and HR teams and so on. But my guess is that online revenues from The New New York Times  (aka Rich, Dowd, Friedman and Co.) would more than satisfy the writers.

That’s all that counts.

The content.

So it strikes me as more than a bit odd that when budget cuts come, which is inevitable, the first places to be cut are those who actually create the content.

It does not make sense.

It is like eating the seed corn.

Sell the building.

Fire the management.

Close down HR.

Do anything, but save and nurture the talent.

Or maybe the talent will simply leave and set up their own online ‘paper’. I mean, why do they really need management anyway?

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A House of Cards

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The answer, my friend, is blowing in the wind…

Drudgereport.com, one of the top websites in the country is an aggregator of other people’s work.

My friend Jeff Jarvis calls on websites to be ‘curators’.

All of this is great…. but…

But at the end of the day, someone has to make the original content and be paid for it.

Until now, that someone has been newspapers.

But I think we are looking at the end of newspapers, and that is a sobering moment for all of is.

Again, I am going to pimp for Jay Yarrow’s outstanding analysis in the BER, which is, I learn to my amazement, the Business and Economic Reporting program for NYU! So congrats Jay Rosen for doing such an incredible job over there.

The entire newspaper business, now no longer a surprise to anyone, is on life support.

Henry Blodget at Silicon Alley Insider recently did an analysis of The New York Times and found that the company has a negative net worth!

They have $46 million in cash and are owed $366 million from advertisers, giving them $412 million. They owe $398 million in short-term debt, which comes due May 2009, in addition to a projected $470 million in operational costs like salaries and newsprint, giving them a total of $865 million in near-term obligations — $453 more than they have.

This is not a problem they are going to fix by mortgaging their new building.

And this collapse is not limited to The NY Times.  The bankruptcy of the entire Tribune group, which include The LA Times, The Baltimore Sun, the Chicago Tribune is almost incomprehensible, yet true.

The newspaper business is not what it was.  It is a mess.

The Washington Post is actually supported by that company’s educational division (including the Stanley Kaplan SAT review course).  The company’s annual report last year stated that the company took in $2.93 billion in revenue (of a total 4.18 billion) from the educational branch. The paper delivered only $889 million. The paper’s revenue declined 7% while the educational division grew 13%.  Without the educational division, I think it is fair to say that the paper would be in the same straits as The NY Times is now.

So the conventional newspaper business model is in deep deep trouble. And if the papers go belly up, who is going to provide the content for Mr. Drudge and countless others to curate?

That’s a good question.

Is news of any value?

I think so.

But perhaps not on paper and ink.

Michael Bloomberg made a fortune with news, but by not putting it on paper and ink. He could have. But he opted instead to lease dedicated terminals that delivered the same information that a paper (or a website!!) might have.  Bloomberg understood the value of the news information and a way to package it very very profitably.

In yesterday’s blog, Paul commented:

Business models are thin on the ground. Sure, loads of newpapers are crossing to the internet – it’s a cheap transition to make – but how many are making money from it? Name them.

Well, here’s one.  The Wall Street Journal. Since taking over the paper, Rupert Murdoch has started charging for the online service, and now you have to pay $104 a year for the full online service.  In the past year, Murdoch has earned $100 million in online ad revenue and another $100 million in subscription fees.  That’s almost as much as The New York Times is going to get for mortgaging its building.

Dorothy Rodham and Me

Clinton 2008

My newest friend….

Yesterday, I got an email from Dorothy Rodham, Hillary Clinton’s mother.

I don’t know Dorothy.

Never met her.

But the Internet creates all kinds of instant intimacies.  You meet people you never thought you would meet.

Here is what she wrote me:

Dear Michael,

I’m so proud of everything my daughter has accomplished and excited about what her future holds.

Her life is full of amazing achievements, and her story has inspired millions of people, especially young girls, to achieve their dreams, no matter what they are.

There’s a wonderful book about her life I’d like to share with you. It’s called Hillary Clinton: Dreams Taking Flight, and it is the perfect way to share my daughter’s story with a child you want to inspire.

As you know, Hillary is still working hard to pay down the debt from her campaign, and I hope you’ll take this opportunity to help her out. With your contribution of $50, you will receive a copy of Dreams Taking Flight with a specially designed Hillary Clinton bookplate.

And for that special person in your life, with a contribution of $250 or more, you will receive a book that’s personally signed by Hillary to him or her by name.

Contribute to help pay down Hillary’s debt, and we’ll send you a copy of Hillary Clinton: Dreams Taking Flight.

I know you’re just as proud as I am of everything my daughter has achieved, and I want to thank you for everything you’ve done to support her!

Thanks,

Dorothy

Soooo…..

Here is what I wrote back:

Dear Dorothy,

My mother is so proud of everything I have accomplished.

Unfortunately, all that accomplishment has left me with about $20,000 in debt on my credit cards.

So I am writing to you, Dorothy, to ask you to write a check to me to help me Pay Down My Debt…
you know, like you are asking me to do for HIllary,

Now, the funny thing Dorothy, is that I already sent your daughter $10,000 when she was running for President.
And you know what? I didn’t even get a thank you note… let alone an offer to repay me.
And, not to put too fine a point on it Dorothy, but even though I sent your daughter ten grand, you never sent me a dime…
yet. And neither did you daughter

But now you can!

You can help me pay down my debt… just like you are asking me do do for your daughter.

What do you say Dorothy?  Send $250 and I will send you an autographed copy of my book.

And my mother won’t bother you at all… like you are bothering me.
Whaddya say?

Thanks

Michael

So far, the only response I have gotten is one that says that they are apparently so inundated with mail, they can’t answer any of them.

hmmmm….

If You Bild It….. will they come?

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Email this morning from Pat Younge, President of the Travel Channel.*

He sends me a link from The Guardian, that BILD, the German newspaper has partnered with a German supermarket to sell small cameras and field an army of citizen journalists to feed the paper’s website.

Sounds good to me, but I think they need a training course!

Germany’s bestselling newspaper is looking to expand without the expense of actually hiring new reporters.

Bild has joined up with discount supermarket chain Lidl to sell a basic digital camera to a legion of citizen journalists, who the tabloid hopes will contribute images to its coverage.

“We can’t cover everything,” said Michael Paustian, a Bild managing editor. “We think it is an advance for journalism.”

The pocket-sized camera has 2GB of memory, can shoot still pictures and video, and costs €69.99 (£60). It comes with software and a USB port that allows “reader-reporters” to upload content directly to editors who will be assigned to review it for publication.

Bild spokesman Tobias Fröhlich said the goal was to encourage camera owners to seek the widest exposure for their work. “It’s not about exclusivity,” he said.

The move fits in with a broader trend for traditional media to turn their increasingly interactive readers into news providers.

Vancouver-based NowPublic.com gathers photographs, video clips and news tips from the public and distributes them to news organisations. The trend is likely to continue as traditional news providers scramble to match the migration of readers and advertisers to the internet.

Bild, known for breaking major political stories as well as front-page splashes on zoo animals and celebrities, will use the new cameras to streamline an existing scheme that brings in thousands of photos each day by email and text message, Fröhlich said. The paper has published 9,000 of those images since 2006.

He said Bild may pay for the best ones it uses or establish a contest for the best content submitted each week; details would be worked out after gauging demand for the cameras that go on sale today.

Some worry that Bild’s new media experiment will lower standards and interfere with professional reporting.

“It poses a threat to quality journalism, the more images from non-professionals that are pushed on to the market even though professional images are available,” said Eva Werner, a spokeswoman for the German Journalists’ Association

But Paustian thought the opposite was true. “We’re not YouTube,” he said. “Every contribution will be viewed, reviewed and journalistically evaluated.”

*and this just in from NZ correspondent Alan Morrison

The Repository of All Human Knowledge

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what would you like to know….

OK

It’s one of those late night Science Fiction movies in which a time traveller goes into the future and discovers that the whole world has become a land in which learning and reading and knowledge are forgotten.

Then, our hero discovers a secret cult, buried far away, which has committed to memory all of human knowledge and struggles to keep the flame burning.

You have seen this plot a thousand times, in a thousand different iterations, from Matrix to The Time Machine or Fahrenheit 451.

It resonates so well with us because it is based on history experience.  During the Dark Ages, the vast reservoir of human knowledge was indeed reduced to a few monestaries across Europe where monks kept the flame of learning and reading and writing alive while the rest of the world was plunged into darkness and ignorance.

Today, these nodes of knowledge are not monestaries, but newspaper newsrooms.

There, compressed within a few thousand square feet you have the combined residual knowledge of an entire community. People who have, quite literally, spent their lives learning about and studying the arcania of the city council meetings, the local schools, the local public services, the local water works, the bond issues, even the local restaurants or high school football teams.  It’s pretty amazing when you think about it, and a resource of unimaginable value.

Unimaginable value if you know how to mine it.

Taking their knowledge and printing it on paper with ink is probably not the best way to exploit this asset in a digital age.

We are facing a curious reversal of valuations, and it is a relatively new phenomenon.

Not so long ago, the machinery to print and distribute this information was the rare and expensive part of the news business.  AJ Liebling said, “freedom of the press is guaranteed only to those who own one”.

Liebling, who wrote for The New Yorker, and who died in 1963 lived in an era in which presses were notoriously expensive.  The Sulzbergers could afford one. The rest of us could not. And this had been the case since Gutenberg first put paper to inked letters five hundred years ago.

Ironically, at the same time, information was considered to have marginal value, at best.

The basis of the newspaper’s economy was founded in the value of the presses.  Again, Leibling:

“People everywhere confuse what they read in newspapers with news.”

Now we are suddenly in an era in which anyone can publish globally any time (like this blog), for free.

The value of the press is next to nothing. But the value of the information?  Priceless. What, after all, is Google, but a residual font of information?  Information that people want.

The newspaper newsroom is a goldmine of local information, and it is information that people want and are willing to pay for.  But it has to be organized.  The way it is organized now, on paper and ink, and sold once a day on the streetcorner does not work. It is archaic in a web world.  But that does not mean that the information that is there, and the knowledge that is there has no value.

On the contrary.

It is not the staff in the newsroom that needs to be chopped away.

It is the press and the paper.

Hello Bolly

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She’s the little old lady from Utta Pradesh now…

James MacPherson is the publisher of an online website called Pasadena Now.

Pasadenanow.com is causing a lot of buzz in the journalism community. Not because it’s hyperlocal news. that’s old stuff.  But because MacPherson has announced he is going to outsource the reporting jobs to India.

India.

MacPherson believes that since City Council meetings are streamed on the web already, there is no need for a reporter’s physical presence in the room, and the goings on can be covered just as easily from Bangalore.

Well, maybe

His move has caused such as stir that New York Times columnist Maureen Dowd has already picked up on the story.

MacPherson’s idea may or may not work, but it gave me a moment to think about the whole notion of outsourcing video production in general.

I am on the board of a wonderful organization called Video Volunteers.

It was founded a few years ago by a graduate of one of my seminars, Jessica Mayberry, and today it is a world leader in empowering people in India with video cameras, laptop edits and the skill sets to tell their own stories in video.

Some of our trainees have now been making video for several years, and are quite good at it. So good, in fact that I think perhaps it is time for them to break out onto the world stage.

It is fine to give out video cameras and teach people to ‘tell their own stories’, but after a while, perhaps it is time for them to start and tell other people’s stories as well. After all, that’s what happens when a crew from Atlanta or New York flies half way around the world to shoot stories in Thailand or Rwanda for ITN or CBS or the BBC.

Well, maybe it is time for our Indian camera crews to get into that business as well.

Of course, in India the median income is an astonishing $115 a month.  That’s one hundred fifteen dollars a month (just in case you thought that was a typo).  So my guess is that our Indian camera crews will be pretty competitive… and quite happy to work long and hard hours and produce a superior product.

At those rates it might just be worth it to fly the crews into the US for work here, in fact.

Bollywood indeed.


Oh wiki wiki world…

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The Whole Earth Cataloge for the digital age….kind of…

About two years ago, someone gave me a heads up that I had an entry in the Wikipedia under my name.

Well that was nice, and a certain sign of recognition in the digital age. The entry had been posted by someone in Europe, which was a kind gesture.  Over time, there were a few additions to it, and I had pretty much forgotten it was there.

Then, about three or four months ago, I was doing an interview with an American magazine, and asked if it was true that I called myself ‘the VJ idiot’.  I asked where they had gotten that from, and they told me it was in my entry in Wikipedia.

I went to Wikipedia, and I was astonished to read that I was listed at “the Jewish TV producer” and “Obama supporter”, among other things.  Well, these are both true, but not particularly germane to what I do. There were other perjoratives as well.

I went in and corrected the entry, and no sooner had I done this than other changes, far worse, were place on the site.

Look, anti Semitic comments and email are nothing new for me. Not since I was listed on jewwatch.com years ago.  Here’s an example of what comes in the mail. This from some mental case in Chicago:

Mike Sponza
mike.spon65@yahoo.com | 75.91.74.189

Your rabbi? It’s bad enough you’re a jew, now you want to throw your dirty religion down our throats by posting this crap all over your front page?

Shouldn’t you be out somewhere teaching companies how to slash their operating costs by firing the Cameraman, Editors, FP’s and the like? I mean come on, any copywriter can shoot and edit amazing stories with just 4 days of your shitty schooling. What is happening at KRON? What about DC? Hummm, the BBC isn’t too pleased either from what I hear. And now we hear rumors that the GAO is starting another investigation.

When will you stop?

When it comes to my own emails or blog, I could care less, but when it comes to Wikipedia, its vandalism.

And it was becoming a daily event.

That’s where someone named Andy Mabbett comes in.

He is one of a small corps of highly dedicated yet unpaid web professionals who spend their time making sure that places like Wikipedia are kept in shape.

Now I don’t know Andy Mabbett, and I have never spoken to him, but he found the vandalism and cleaned it up, time after time after time.

Other people came in an peeled away paragraph after paragraph as they were vandalized.  I am not supposed to deal with my own entry, and things I put in were removed as well.

Today, my entry is reduced to a line or two, but at least it’s accurate, and as I understand, protected from vandalism – at least for a while.

The world is filled with sick f***ers, and there is nothing I can do about that.  But at least people like Andy Mabbett are there as well.

Thanks, Andy.