Archive for the “Media Business” 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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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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Over at the Economist magazine, I’m contributing to a discussion about where journalism is heading.

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I’m writing an occasional online column for the Guardian, one of the great English-language media organizations. The latest piece, “The Web’s Weakest Links,” implores creators of online content to link to original material, not the rewrites that have become so common by so-called “aggregators” that (in my view) do a disservice to everyone but themselves. Quoting myself (very briefly):

So, the next time you link to something, check it out a bit more. If it’s just a summary of someone else’s original reporting or analysis, take the extra few seconds to link to the original. Let’s all raise our linking standards, and give credit where it’s genuinely due.

 

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This post is part of the Carnival of Journalism, a monthly collection of blog posts on a related topic curated by David Cohn. Our assignment this month was to talk about a failure, in our personal or professional lives, for which we are responsible and from which we learned lessons.

Only one? There have been so many…

However, in this context — the emergence of a 21st Century journalism culture — this is a pretty easy call. I’m resurrecting a 2006 letter I wrote to an online community that didn’t work out. It was called Bayosphere, and its demise was a fairly high profile event at the time, for all kinds of reasons. (The site is off the air, though a friend and I are working to resurrect at least part of it, so that it exists for anyone who might want to see it even now.)

It was a difficult letter to write, but it had to be written. The main reason was that the people who’d been part of that project — almost all volunteers — deserved to know what had happened. The other main reason was the recognition that entrepreneurship is about many things, but above all, as my friend and colleague CJ Cornell says, it’s about owning the process and the outcome.

Here’s that letter, dated January 24, 2006 (with updates at the end):

A little over a year ago, I left the San Jose Mercury News to pursue my passion for what we’ve come to call “citizen media” — the idea that anyone with something to say could use increasingly powerful and decreasingly expensive tools to say it, potentially for a global audience.

I left what I considered one of the two or three best gigs in the entire newspaper industry. But having published We the Media — and seeing first-hand the application of bottom-up communications in all kinds of arenas, especially journalism — I knew it was time to devote my full energies to this emergent phenomenon.

I learned some things last year, about media, about citizens, about myself. Although citizen media, broadly defined, was taking the world by storm, the experiment with Bayosphere didn’t turn out the way I had hoped. Many fewer citizens participated, they were less interested in collaborating with one another, and the response to our initiatives was underwhelming. I would do things differently if I was starting over.

I erred, in retrospect, by taking the standard Silicon Valley route. I was trying to figure out how to make this new phenomenon pay its own way out of the gate, just as the traditional, still deep-pocketed media, super-energized entrepreneurs and legions of talented “amateurs” — a word I use in the most positive sense here — were starting to jump seriously into the fray.

In February, Michael Goff joined Grassroots Media as my business partner. Michael is smart, energetic and creative, and had a long track record in the media business including founding Out magazine, launching Microsoft’s Sidewalk city guides, leading MSN as general manager, and as CEO of a tech investment partnership and a wireless company. He’d just finished leading the volunteer team in Haiti for Bill Clinton’s AIDS Initiative.

We talked constantly about what might work with all the changes in the media sphere, and within the company’s specific mission to support citizen journalism as a viable business while providing for its investors and employees. We blocked out the options and considered, among other things:

  • Consulting for newspapers and media entities;
  • Trade publishing for journalists and editors making the transition;
  • Publishing our own citizen media-driven sites;
  • Running conferences and education programs;
  • Creating an advertising network;
  • Creating an affiliated network of blogs and bloggers;
  • Selling “picks and shovels” — a platform of tools for citizen journalist collaboration;
  • Creating a self-tagging system for bloggers to use in disclosing bias and tracking stories.

In the end, we opted for publishing. One reason was that I was keenest on the basic journalism mission. Another was that we figured we could best leverage our strengths, including my already successful blog. We decided to put up a site that would serve effectively as a test bed, to see if it would work and, perhaps, become a model for other things of its kind.

We envisioned Bayosphere as a place where people in the San Francisco Bay Area community could learn about and discuss the regional scene, with a focus on technology, the main economic driver. My tech and policy blogging would be an anchor, hopefully attracting some readers and, crucially, some self-selected citizen journalists who’d join a wider conversation.

The evidence strongly suggested early on that this was not likely to be a viable publishing venture for some considerable period without partnerships to bring in both readers and contributors. But long discussions with potential partners — including several whose participation would have been game-changing in a journalistic and business-model sense — didn’t pan out. (It will be an exciting day when one or more of those folks tries a citizen-driven media venture.)

Even so, Bayosphere attracted quite a bit of traffic, and some heartening effort on the part of some citizen journalists. I’m grateful to them for trying. But as is obvious to anyone who’s paid attention, the site didn’t take off — in large part, no question about it, because of my own miscues and shortcomings. My friend Esther Dyson says, wisely, “Always make new mistakes.” Did I ever. But I learned from them, and from what did work. Here are some of the lessons:

  • Citizen journalism is, in a significant way, about owning your own words. That implies responsibilities as well as freedom. We asked people to read and agree to a “pledge” that briefly explained what we believed it meant to be a citizen journalist — including principles such as thoroughness, fairness, accuracy and transparency. Although some cynics hooted that this was at best naive, we’re convinced it was at least useful.
  • Limiting participation is not necessarily a bad idea. By asking for a valid e-mail address simply in order to post comments, you reduce the pool of commenters considerably, but you increase the quality of the postings. And by asking for real names and contact information, as we did with the citizen journalists, you reduce the pool by several orders of magnitude. Again, however, there appears to be a correlation between willingness to stand behind one’s own words and the overall quality of what’s said.
  • Citizen journalists need and deserve active collaboration and assistance. They want some direction and a framework, including a clear understanding of what the site’s purpose is and what tasks are required. (I didn’t do nearly a good enough job in this area.)
  • A framework doesn’t mean a rigid structure, where the citizen journalist is only doing rote work such as filling in boxes.
  • The tools available today are interesting and surprisingly robust. But they remain largely aimed at people with serious technical skills — which means too ornate and frequently incomprehensible to almost everyone else. Our tech expert, Jay Campbell, did a heroic job of trying to wrestle the software into submission to our goals. We still felt frustrated by the missing links.
  • Tools matter, but they’re no substitute for community building. (This is a special skill that I’m only beginning to understand even now.)
  • Though not so much a lesson — we were very clear on this going in — it bears repeating that a business model can’t say, “You do all the work and we’ll take all the money, thank you very much.” There must be clear incentives for participation, and genuine incentives require resources.
  • On several occasions, PR people offered to brief me on upcoming products or events that they hoped I’d cover in my capacity as a tech journalist, but were happy to give the slot to our citizen journalists. This testifies to a growing recognition among more clued-in PR folks that citizen journalism is here to stay.
  • Although the participants — citizen journalists and commenters — are essential, it’s even more important to remember that publishing is about the audience in the end. Most people who come to the site are not participants. They’re looking for the proverbial “clean, well-lighted place” where they can learn or be entertained, or both.
  • If you don’t already have a thick skin, grow one.

A more personal lesson also emerged: As an entrepreneur, let’s just say I wasn’t in my element. The relentless focus on a single, limited project for long periods of time, combined with the inevitable compromises inherent in for-profit decision-making, turned out not to be my best skills. For almost 25 years I’d thrived on the constant deadlines and competition of journalism. So I assumed I’d easily handle the pressures of trying to create a business from scratch while also keeping my reporting and writing skills intact and helping other people join in. In reality, I was unprepared for what proved to be an entirely different kind of pressure, and didn’t handle it nearly as well as I’d expected. I allowed myself to get distracted, moreover, by matters that were not directly relevant to the project.

During the summer, Michael and I realized that it was unlikely that we would land a key distribution deal in the immediate future, and without that we weren’t finding the kind of business model for Bayosphere that justified raising more money beyond the seed financing. We had business ideas that might well have been funded, but they were not first and foremost aimed at boosting the citizen-journalism field, which was and remains my overriding goal. In September, we stopped spending our investors’ money, and sustained Bayosphere ourselves on a relatively bare-bones budget from our own funds, putting in our own time.

We’ve never lost sight of this, however: A more democratized media is crucial our common future — grassroots ideas, energy and talent. I believe this more than ever, as do Mitch Kapor and the folks at the Omidyar Network, who provided seed funding for the project. Their work is changing the world for the better, and I admire them.

As the Bayosphere project was playing out last fall, I concluded that I could do more for the citizen journalism movement by forming a nonprofit enterprise, a “Center for Citizen Media” where I could put my skills and passion for the genre to better use — looking at lots of disparate elements and connecting the dots. (And as a friend accurately remarked when I told him not long ago about my planned shift toward the nonprofit arena, “Well, you’ve always struck me a more of a dot-org kind of guy than the dot-com kind.”)

As mentioned, the dots I’m connecting include Bayosphere. We are talking with several folks who are interested in bringing the site under their own wings, as part of operations whose proprietors Michael and I respect. No promises here: But if we can keep Bayosphere going in a good way we’ll work hard to make that happen.

I share the disappointment of some of our citizen journalists. And I respect their skepticism; we encouraged it, after all. It’s definitely no fun to have disappointed folks (starting with Michael and our investors, and myself). Still, I owe those of you who participated and visited my thanks for being part of the experiment.

The shift in how we communicate and collaborate, how we learn what’s going on in our world, has barely begun. Predicting the future is for other people, but I’m optimistic that we’ll collectively figure this out. So now it’s back to work, with the help of old and new friends and colleagues. What could be better than that?

Looking back at this letter, I have several updates. First, the Center for Citizen Media existed primarily during my three-plus year fellowship at the Harvard Berkman Center for Internet & Society. While I was there, and also teaching part-time at UC-Berkeley’s Graduate School of Journalism, I understood that the citizen-media phenomenon was racing ahead in fabulous ways and that the real leaders of that movement should be the people doing it day to day.

Second, the tools are getting vastly better and easier to use. A startup in this arena is no longer as much as hostage to opaque software and technical skills; with many projects, you can do 90 percent of what you need with off-the-shelf tools. Still, even though you don’t need to be a programmer to work on a digital media startup, you absolutely need to know how to have a conversation with a programmer, because that last 10 percent can be the difference between things working or flopping.

Third, the value of community is even clearer now — and community building skills are one of the least common and most valuable assets for any startup in this space.

Most important in a personal sense, I didn’t end up forsaking entrepreneurship, after all. I’ve invested in and advised a number of new-media startups. I was a fortunate co-founder of another, Dopplr, which Nokia acquired several years ago. (Of course, the startup that failed is the one where I had direct operational responsibility, and the one that didn’t fail was run brilliantly by other co-founders; there may be, ahem, a correlation.) And, of course, I’ve been working to seed entrepreneurship into the academic world in an experiment at Arizona State University.

I count the failure of Bayosphere as one of the most important learning experiences in my life — so far, at any rate. It was not fun. But things turned out for the best, in all kinds of ways.

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Updated

I have a request for anyone who’s tempted to quote me about the no-pay-for-bloggers situation at the Huffington Post. Please don’t use my words as support for the notion that Arianna Huffington — or her investors or AOL, the new owner of this online media organization — has any legal obligation to pay the site’s op-ed bloggers even a thin dime.

Again and again, unfortunately, journalists and others discussing the matter have used what I wrote back in February, when AOL said it was buying HuffPost for more than $300 million, in ways that do not reflect what I actually believe. The latest example comes from the Miami Herald, where Edward Wasserman has a piece about an anti-Huffington lawsuit that demands payment for the bloggers who, by all accounts, helped bring the site to prominence but were never promised any payment for their work. Wasserman writes of the lawsuit’s lead plaintiff Jonathan Tasini:

He says HuffPost owes its success to the creative work of the unpaid and the unsung, an estimated 9,000 writers in all, and now that Arianna is putting an estimated $100 million of AOL’s money into her own pocketbook, they’re entitled to a little something in the tip jar.

Tasini has drawn some support. The Newspaper Guild, the journalists’ union, called on its 26,000 members not to perform any more free work for HuffPost. Los Angeles Times columnist Tim Rutten likened HuffPost to “a galley rowed by slaves and commanded by pirates.” Dan Gillmor, journalist and Internet theorist, said Huffington should “cut a bunch of checks to a bunch of the most productive contributors on whose work she’s built a significant part of her new fortune.”

The quote, taken from my instant-analysis reaction to the deal, is accurate. I strongly believed then, and still do, that Huffington should be wise and ethical enough to send a small percentage of her (and her investors’) big score to the people who helped her so much in the site’s early days.

But must she be required to do so? Absolutely not.

I do not support Tasini’s lawsuit. In fact, if this case doesn’t get laughed out of court by the first judge who hears it, I’ll be amazed. I’ll also be willing to testify on Huffington’s behalf. Her lawyers are surely smart enough not to call me, of course, because I’d hold my nose as I defended their client, and would explain why to anyone who asked. (I’m not sure whether the hapless Newspaper Guild backs the lawsuit, but as of Sunday, April 24, Wasserman’s column is prominently displayed on the Guild’s website.)

Note: I’m working on piece discussing networked-media creation and compensation. Look for that soon.

Update: Another analysis of the Tasini lawsuit, written by a law student, says I “demanded that Ms. Huffington share the wealth with the unpaid bloggers who helped create it.” That characterization is incorrect (in addition to misspelling my name), as even a casual reading of my original piece makes clear. For a site that says it “reports on the state of legal journalism and encourages conversation about the accuracy and felicity of reporting on law,” perhaps a conversation about accuracy would be useful.

 

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No one who has followed media giant Gannett will be surprised by David Carr’s New York Times column this week, in which he makes clear that Gannett is just another big American company that overpays its top people while treating the workers as throwaway material. The piece explains how workers are pushed into furloughs while the bosses rake in millions for managing the shrinkage of a company that — despite some worthwhile digital initiatives — has poorly navigated the changing realities.

The piece should make your blood boil, given its portrayal of the greedy executives. Carr says he’s not talking about “incompetents feeding at the trough,” which is correct. The top people at Gannett are quite competent at what they do, namely guiding the decline with little creative response.

I can’t tell, at the end of the piece, whether he’s being ironic. He writes:

Jim Hopkins has been editing the Gannett Blog since he took a buyout from USA Today where he was a business reporter in 2008.

“It has become a case study in how a mature company facing sudden and tremendous pressure tries to save itself,” he said. “It’s been fascinating to watch in real time, but I think there have been terrible consequences. Gannett has a big footprint in 100 communities, and those places have less and less information.”

“I wouldn’t want their jobs,” he concedes. “But there is so little empathy for the employees and so little understanding of how these packages are perceived. I think they don’t realize how this looks.”

Obviously.

What’s much more likely — hence my uncertainty about whether he’s being ironic — is the opposite. What’s obvious to me is that these executives are cookie-cutter versions of so many of corporate America’s top dogs, whose pay has soared to new heights while almost 10 percent of the workforce remains idle.

Surely they know how it looks. They just don’t care.

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The announcement Sunday that the company calling itself AT&T has reached a deal to buy T-Mobile’s US arm was a no-brainer. Rather than building out its own network, it covets the network — and more — of a competitor that offers lower prices and better customer service. It’s a great deal for AT&T, and barring a sudden awakening of the Obama administration to the benefits of competition in telecommunications, this buyout will go forward — to the huge benefit of two telecom giants and the detriment of everyone else.

Let’s be clear. If the Obama administration fails to block this deal, it will be setting the lowest possible bar in approving mergers and buyouts. This buyout could not be more obviously bad for competition — and therefore bad for customers — and antitrust enforcement is designed precisely for protecting competition.

When I said there would be two major winners in this deal, I was referring to Verizon, the largest mobile carrier in the nation, as the other one. AT&T is currently second largest, with Sprint and T-Mobile trailing among what we might call the Big 4 carriers. A combined AT&T and T-Mobile would be a bit larger than Verizon, with Sprint in a very distant third place.

We’re talking about creating an effective duopoly, or something not too short of that. Business history shows no case in which a duopoly proved beneficial to competition, or to customers.

AT&T wants us to believe there’s plenty of competition. This is sophistry. A few regional and tertiary players do exist, but they have none of the reach, and not nearly the same level of capabilities and service, that you can get from today’s Big 4. They would be utterly dwarfed by the Big 2 plus Sprint in the new world.

Consider the airline business. Today, we have three major carriers left: Delta, American and United-plus-Continental (the latter two are in a merger). A host of smaller carriers, including the increasingly beefy Southwest, keep the big ones mostly in line on price on most routes. But does anyone believe we’d be better off with just two mega-airlines, other than some industry executives and shareholders? This is plainly not a perfect analogy, but it gives you a sense of what’s at stake.

More important, T-Mobile has offered competitive service plans including my ability to bring my own phone and get a discounted monthly rate. All of the other carriers force customers to pay the same rate whether they buy a supposedly subsidized phone or bring their own — an outrageous policy that, if we had actual regulation to ensure consumer fairness, would not be permitted. (We have no serious regulation in America, of course.)

T-Mobile’s customer service people are unfailingly polite and knowledgable. That’s unique among US carriers. It has by far the best privacy protection of any mobile data provider.

T-Mobile puts as much crapware — unwanted applications that are difficult to remove — on the phones it subsidizes as anyone else. But unlike AT&T (and the rest), it cheerfully unlocks its phones after a reasonable period. This is important mainly for people who travel abroad; we can buy local SIM cards (only works for GSM phones, and AT&T blocks this anyway by refusing to unlock the phones its customers have paid for) for lower-cost service in other countries.

AT&T is widely loathed by its customers. It’s lagged in deploying 3G bandwidth on its wireless network and has a history of collaborating with illegal government spying on its customers.

Om Malik makes a persuasive case that Google is a major loser in this deal. He writes:

In T-Mobile, it has a great partner for its Android OS-based devices. Now the company will be beholden to two massive phone companies — Verizon and AT&T — who are going to try to hijack Android to serve their own ends.

Don’t be surprised if you see AT&T impose its own will on what apps and service are put on its Android smartphones. I wouldn’t be surprised to see the worst phone company in the U.S. (according to Consumer Reports) tries to create its own app store and force everyone to buy apps through it.

The biggest losers, of course, are all of us who want to see actual competition in an increasingly restrictive marketplace. This is not a good deal for anyone but AT&T and its shareholders, and it should be stopped in its tracks.

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We already know that Arianna Huffington is smart. She and her small team have built a media company from nothing in just a few years, and now they’re flipping it to AOL, where she’ll be content editor in chief. The price sounds bizarrely high to me at $315 million, but so do lots of prices these days in what looks like a new Internet bubble.

Others have commented at length on the synergy of the deal. If AOL is going after a link-driven community, the blend could work in the long run. The Huffington Post has been evolving from its origins, as the left-wing op-ed page of the Internet, into a blend of aggregation, curation, pandering — all of which have been done with some genuinely intriguing if not innovative technology initiatives — and some home-grown content. The first three of those are likely to be, in the end, much more important for the business than the original content.

AOL has been rolling the dice at an ever-more-frantic rate lately on digital content. The reported $25 million it paid for TechCrunch made sense to me, and I think it’s way too early to say, as many are doing, that the Patch local-news service is failing. But there’s a common thread in many of the content initiatives: paying low (or no) money to the people providing the content, and having lots and lots of it.

Indeed, the Huffington Post’s home-grown content, for the most part, has been especially notable for its low cost to Huffington: low as in free. Although some actual paid journalists work for the organization, her blogger network is an amazing achievement; she’s persuaded untold numbers of people to write for nothing, to have their names on the page as compensation for their labor. Exploitive? Sure, in a way, but let’s also recognize the fact that people want to put their stuff on the site. No one writes for the New York Times op-ed page for the money; it’s for the platform to spread ideas.

And, based on the email Huffington sent to her bloggers, that’s the model she plans to continue. Here’s part of that email:

Together, our companies will have a combined base of 117 million unique U.S. visitors a month — and 250 million around the world — so your posts will have an even bigger impact on the national and global conversation. That’s the only real change you’ll notice — more people reading what you wrote.

It’s hard to imagine something that sends a more dismissive message. Which is why I’m hoping that Huffington will recognize how this looks and then do the right thing: namely, cut a bunch of checks to a bunch of the most productive contributors on whose work she’s built a significant part of her new fortune. They’ve earned some of the spoils. I think Huffington is smart enough to know not just the PR value of doing this. And, and feel free to call me naive for saying this, I also think she’s wise enough to know why she should do it on more ethical grounds, too.

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