Archive for the “Business Models” Category

In a clear example of the asymmetry of power that now exists between Facebook and just about everyone else on the Web, check out the way The New York Times has handed a huge gift to the social networking giant: The Times is requiring that anyone who wants to be a “verified commenter” — and with that a higher form of commenting privileges — must a) have a Facebook account; and b) use that account for identity verification.

This is vastly, vastly better for Facebook than the Times. Given Facebook’s tendency to track what people do online whenever possible — something you can take for granted in this case, given the attractive (for marketers) demographics of Times readers — the company will gain deep insights into what these people read and buy.

What does the Times get? A bit of extra convenience, nothing more.

News organizations that use Facebook for login to comments and other features are unbelievably short-sighted. Which, of course, is absolutely nothing new.

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I published Mediactive a little over a year ago. The project, including the sale of publication rights in Japan, is in the black financially. And I’m ready to try some experiments as I move toward version 2 of the book and website.

Barry Eisler, who published his latest thriller, The Detachment (highly recommended) with Amazon, suggested I try this: Cut the price, temporarily, to 99 cents — and watch what happens. In his case, the book rocketed up to the top of the Kindle sales rankings.

So I’ve done that. For a limited time, the Kindle version of Mediactive is just $0.99. Obviously I’m not going to move to the top sales spot. But I’m looking forward to seeing what happens.


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My friend (and editor of Mediactive) Tom Stites has written a three-part series of postings for Nieman Lab, the increasingly excellent site that scopes out the latest in journalism thinking (and doing). These posts are about business models for our future sources of information. In order:

Part 1, a survey of the debris-strewn digital and print journalism landscape.

Part 2, news deserts as a frame to elevate the issue of how weakening journalism weakens democracy.

Part 3, why it’s time to test co-op business models.

The third installment is closest to Tom’s current work: the Banyan Project (I’m an advisor), a news cooperative that I believe is one of the most interesting models we’ve seen in a long time. When you finish reading his terrific pieces at Nieman Lab, take a look at the Banyan site, too. If you care about the future of community information, this is important stuff.

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As a diehard believer in the value of what good newspapers can bring to communities, I’m pleased that Warren Buffett’s Berkshire Hathaway has purchased its “hometown” newspaper. I very much doubt that this corporate owner, unlike many others, will manage the newspapers in ways mostly or solely designed to extract money from the community while providing the least amount of useful journalism.

Berkshire Hathaway already owns the Buffalo News, and is a major shareholder in the Washington Post Co. But Buffett has long been on the record as, to put it mildly, a newspaper-industry pessimist. He called this new purchase “a reasonable investment” — hardly the language he’s used with other deals.

So as a shareholder in Berkshire Hathaway, I’m a bit baffled. And for the first time since I bought this stock back in the 1980s, I have the feeling that Buffett — who has said again and again that he would treat his shareholders like the co-owners of the company that they are — has arranged for Berkshire to buy something for his own personal reasons, rather than his typically sterling business strategy for the parent company. 

I hope I’m wrong. Maybe we’ve reached a bottom for newspapers and there’s happier times ahead. But I’ve seen nothing to suggest a serious long-term value proposition for newspapers like the Omaha World-Herald, especially ones run in traditional ways.

I’m fairly sure this is more about Buffet’s belief that quality newspapers matter and that his hometown needs one — I applaud that sentiment — or, as a source in the Bloomberg article suggests, ensuring a positive first draft of history for Buffett and his family. If either or both of those motives is true, Buffett should have spent his own money, not Berkshire’s.

The World-Herald purchase is a rounding error on Berkshire Hathaway’s balance sheet. But it’s still real money.

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Terrific piece by Cory (a friend) about who’s cut out for self-publishing, and who may not be. Excerpt:

I firmly believe that there are writers out there today who have valuable insights and native talent that would make them natural successes at marketing their own work. If you are one of those writers – if you have a firm theory that fits available evidence about how to get people to love your work – then by all means, experiment! Provided, of course, that you are pleased and challenged by doing this commercial stuff that has almost nothing in common with imagining stories and writing them down. Provided that you find it rewarding and satisfying.

 

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Huffington Post learned a lot from the pushback after AOL bought the company — which rose to prominence in significant part due to blogging by people who were never paid — for more than $300 million. 

What did the management learn? Keep asking people to provide stuff for free. 

Now it’s a logo. Read the comments to see how this latest bit of “you do the work, we take the money” game-playing is going over — not well, to put it mildly. For all that, HuffPost will no doubt get what it wants in any case. 

I have a great deal of respect for some of the people working at the company. But this scheme is just another reminder of its fundamental shamelessness.

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That’s the name of a new book from O’Reilly. The title is absolutely true, as I can attest.

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Over at the Economist magazine, I’m contributing to a discussion about where journalism is heading.

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So many things are disappointing about the FCC’s just-released future of media report that it’s tempting to write it off entirely. That would be a mistake.

Shallowness in research isn’t one of the problems. No one can accuse the working group (PDF), headed by Steve Waldman and 18 months in the making, of not doing some serious homework, with interviews, hearings and data collection.

A few traditional news organizations were favored with embargoed copies of the report ahead of time (Exhibit A of the problem), though after reading their articles I’m not sure if they did much more than skim it. In any event, my quick comments here — I hope to do more later on — are based on a fast read-through of the report, which bizarrely appears to be available on the FCC website only as a collection of PDFs, with no HTML version (Exhibit B). Happily, lots of folks, including Josh Stearns from the media reform organization Free Press, have posted it as an embeddable a Scribd document.

My initial reaction, as suggested at the top, is puzzlement at the working group’s missed opportunities.

The report’s main takeaway, from what I can see, is that local news is declining. That’s true, in part. No one can dispute the massive disinvestment in journalism by local newspapers and broadcasters in recent years. The rise of hyperlocal news has helped fill some gaps, but there’s no question that fewer paid journalists — at least ones working for organizations that try to provide news to the general public — are paying attention to local and state governments than before.

The report largely stays away from what many observers, including me, had feared. It does not ask for major government intervention in news. Whew. At the hearing where I spoke, more than a few people wanted just that kind of recommendation.

But there’s a caveat: It suggests steering what could ultimately be more than $1 billion in annual federal advertising spending (for such things as military recruitment) away from big media organizations to smaller, local ones. The can of worms this will open is fairly large, not least the political favoritism that is certain to pick winners in such a process. I guarantee, if this goes anywhere, that the dollars will flow to the companies that have the most clout on K Street, not the new media organizations that are doing the hardest work now to fill the gaps.

The report’s subtitle, “The changing media landscape in a broadband age,” highlights my biggest disappointment — its lack of serious recommendations regarding the real and growing broadband problem in the U.S. The authors insist that “Universal broadband and an open Internet are essential prerequisites for ensuring that the new media landscape serves communities well,” but their recommendations are utterly vague on how we can get there.

In Mediactive, I wrote that only one major government intervention makes sense:

only one that wouldn’t put government meddling squarely into the practice of journalism—an inevitable result of the direct subsidies being pushed by well-meaning but misguided media thinkers. It’s a subsidy for bandwidth: getting true broadband Internet access to as many people as possible, as some other nations in Europe and Asia have done.

The precedent in this case is the right one. Taxpayer-assisted infrastructure—especially the postal system and low rates for sending publications—helped create the newspaper business, and enabled a lot of other commerce. Let’s bring that logic forward to the early 21st century, and enable high-speed Internet access for all Americans, and a communications infrastructure for all competitors.

I’m not surprised that this idea went nowhere, just disappointed.

From what I can tell, the report gives short shrift to network neutrality, or rules guaranteeing users’ rights to select the media they want, not the media to which the broadband providers and their commercial partners want to give priority. The suggestion that new wireless services will solve the problem by adding competition is at best wishful thinking.

Maybe the working group is just recognizing reality. America’s leaders have made it clear that they do not consider it a taxpayer issue to ensure broadband access; they’ve stood by while the U.S. slides dramatically in world rankings of the most-connected nations. And they’ve increasingly shown hostility to the vital need for rules to ensure that average citizens, not corporate America, can make their own decisions. The journalism ecosystem of the future utterly depends on connectivity and net neutrality. Paying lip service to these notions doesn’t help.

 

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I’ve just signed a site license with a journalism school for the e-book. We worked out a sliding scale of payments. The university will pay a discounted rate from the list price for the first 40 copies. For each copy beyond that, up to 250, the rate will be lower yet. And after 250, the license will be free for anyone else at the university who wants to download the book.

This is a good deal for both sides. The school gets a deeply discounted book. I get some cash. If more schools sign up for this kind of thing, I could end up making a non-trivial amount of money.

Why should the schools pay? Because they are engaged in a business arrangement in which they sell courses to students and assign this book as part of that arrangement. The Creative Commons license I’ve used to publish Mediactive allows copying at will for non-commercial purposes, but universities using the book in classroom settings are, in fact, engaged in a commercial activity even if the universities are not-for-profit entities themselves.

My agent, David Miller, says he’s heard of major publishers doing site licenses for books. He hasn’t heard of self-published authors doing it this way. That doesn’t mean it hasn’t happened, of course — but it’s definitely new to me! (I continue to learn new things about the publishing business with this project, which is one reason I’m doing it this way…)

If you are teaching journalism (or anything else) and are interested in using this book, please get in touch to discuss a site license. They book isn’t expensive even at its list price, but there are even better deals for bulk orders, especially e-book bulk orders.

By the way, I’m working with several colleagues on lesson plans for Mediactive. They’re coming along nicely and will be available, if all goes well, by mid-summer or so. We have a few nifty ideas in mind for this part of the project, so stay tuned.

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Creative Commons License
Mediactive by Dan Gillmor is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 United States License.
Permissions beyond the scope of this license may be available at http://mediactive.com/cc