Business | The MarketFarm

If only print could be more like TV in trying to be more like the ‘Net

An interesting bit of information from the TV world:

The new Jay Leno Show is particularly successful in one area: reduction time-shifting – which is the practice of watching a show at a time other then when it airs – basically through TiVo or other recording devices.

Last year, according to a report in MediaBuyerPlanner, which cites TiVo as its source, 70 percent of viewers watched NBC’s 10 p.m. programming on a time-shifted basis; only 30 percent watched it live.

The good news is that’s improved to about 50 percent watching it live and 50 percent recording it to watch later. What’s amazing to me is that half the audience basically refuses to watch the show on the network’s terms. Given the technology, consumers are telling television insiders exactly what they want and how/when they want to watch it.

That’s not to say the networks are responding like champions. But I have to say, subjectively, that bumping even a couple reality shows in favor of a talk-entertainment show like Leno’s is a step in the right direction. And maybe that’s what the audience is responding to; perhaps the reduction in time-shifting basically means, “If you give me something worth watching it, I’m more likely to watch it when you air it.”

With a blog that’s so heavily dominated by print-to-internet trends, why do I think this is worth noting?

Because it points out a huge difference between what’s happening in print media vs. broadcast. Both are struggling to keep up with the change brought on by online technologies, they’re being impacted from opposite directions.

TV is losing its audience to other activities, and has had to fight and innovate to earn every viewer that it gets. Then it can turn around and sell its successes to advertisers. This is a healthy business model.

Print media, on the other hand, isn’t being pushed by its readers – who have largely made it clear that they prefer a print product. Otherwise, readers might pay for online content; and they would certainly ask for digital editions of their favorite magazines. And if that were the case, there wouldn’t be a problem. Readers would get the product they want, advertisers would know exactly how many people see and respond to their ads, and publishers would be able to cut the Three P’s that represent the largest cost of doing business: production, printing and postage.

The problem for print is that it’s being pushed by the other end: the advertisers, who demand better accountability for the impact of the money they spend. Because you can’t measure the impact of print media as simply or directly as online media, advertisers are draining their print spend in favor of an online spend. So magazines keep trying to come up with online products, and readers are yawning.

In the end, the trouble for print is that it’s not yet figured out how to give both the audience and advertisers what they want. And it’s responding to the advertisers first. And each time, readers yawn and the medium loses more credibility with advertisers.

That’s not a healthy business model.

Trouble with democracy: It doesn’t pay well

If there’s anything I write about or comment on that is sure to draw a hot and negative response, it’s the insistence that journalists start to get in tune with their true market value. It’s not that I don’t see a huge social value to the work they do. I credit journalists with keeping our democracy alive. But they’ve never been paid by democracy; they get paid by a business model.

My point is twofold:

Journalists have always been part of someone else’s business model. But it’s generally only in times like this, when the business models are under fire, that journalists are compelled to recognize it.
While traditional media models are under siege, journalists themselves are becoming part of the solution — developing new models and new approaches to paying the true cost for news. (For example, check out Spot.us and MedCityNews.)

Today’s e-mail brought an item from one of my favorite blogs, Seth Godin’s Blog. He usually has something insightful to say about the way the world works. But this is the first time I’ve ever seen his blog address the media world directly.

His message (you should read it yourself; it’s short) is simply this: Journalists can be measured for the interest their stories generate — as evidenced by a Washington Post columnist who was let go because his blog posts didn’t generate enough traffic. In every other industry, people’s performance is measured against specific objectives.

It’s happening now with journalists — bringing them into intimate business contact for whatever business model employs them.

Coming face to face with reality can be a painful experience, but in the working world there is really nothing more important.

In a world of SEO, does content matter?

Well, yes. If you have bad content then it doesn’t matter how many people come to see it. Consider this visual from Mark Smiciklas.

Wait, it’s worse than that. If you have bad content, then the more people who see it, the worse off you are. Because now you’re simply broadcasting the fact that you suck.

I would argue you’re better off with great content that only a few people see — because at least those few people will have good things to say about you.

About 10 years ago, I was involved in a magazine that was all about business-to-business commerce. Our readers were intently trying to build e-commerce platforms that would increase the velocity of their business; our advertisers were trying to sell them 7-figure solutions to do so. But the discipline was in its frontier days, and much of what they were doing was first-generation inadequate.

The problem wasn’t that the e-commerce systems failed. It’s that everything else was built for a slower world. Warehouses weren’t organized well enough to handle the high-speed demands of e-commerce. Inventory wasn’t well-enough planned to keep fast-moving items in stock. Shipping contracts didn’t include the kind of pick-up and delivery guarantees that e-commerce requires.

Companies could take the orders with lightning speed, but then the old, slow processes took over.

Which resulted in what became known (at least in my own head) as Rosenbaum’s Law: Enabling e-commerce at a company with bad processes merely makes those bad processes apparent at a much higher speed to a much larger number of people.

The point: Make sure you have something intelligent and/or compelling to say.

Then communicate it.

Then — and only then — promote the heck out of it.

Even low-cost social media campaigns need to be measured

There is an entire industry of consultants that didn’t exist three years ago, telling people how to collect thousands of followers on Twitter; how to gain friends and fans on Facebook; and how to leverage large networks on LinkedIn. These consultants are writing books, conducting web-seminars and selling services.

The thing that gets too little attention is what all this is worth? Sure, you can grab a small nation’s worth of Twitter followers, but will it make you any money if they aren’t paying attention to your Tweets?

So it was refreshing to stumble across a new series or articles in Computerworld on How to measure the ROI of social media.

It would be nice if there were a few key metrics and some nice neat formulas you could follow, but social media is evolving too quickly and the measurements aren’t that simple.

In the end, if you want to know whether your time with social media is well spent, you need to do the following:

Set a meaningful goal. Is the purpose of your social media outreach simply to gain followers? Then you’ll have an easy time measuring, and a hard time proving that the effort was worthwhile. Instead, set a more specific goal, like this: To generate sales of $XXX (or X number of sales transactions) from members of our social media network.

That way, you’ll not only have a pass/fail measurement, you’ll learn something important along the way: i.e., how many new connections it takes to achieve a sale.

Assign specific tasks. If more than one person is going to be involved in the social media effort, make sure that each person knows his or her specific role. For instance, one person might conduct the outbound communications while another works to convert inbound communications into leads, and still another works to close sales.

This way, the entire job will get done — not just the fun part of blogging and tweeting. Further, when things don’t go perfectly (they won’t), you’ll have a team of experts who can figure out what adjustments to make.

Track everything. Time is money. So while social media programs are astonishingly inexpensive in terms of hard cost, you’ll want to know how much of each day your team members are spending on social media vs. their other responsibilities.

If you do these three things, then measuring gets easy. If you have goals, an organized work effort and good data, determining whether your resources are well-spent will be easy. Just like the example of Reality Digital, also from Computerworld.

Wal-Mart redesign cuts magazine aisle in half

Last week I wrote about Wal-Mart’s next-generation store design (Magazines: kick ’em when they’re down), which moves the magazine rack to the back of the store near music, electronic games, DVD’s and books.

Wal-Mart’s pretty good at figuring out how to maximize the sales of every square foot of space, so while the move is a symbolic kick in the pants to an industry that is suffering from all sorts of afflictions — not the least of which is a big drop in newsstand sales — it was hard to know if the move would really have an impact on the media business.

Well, apparently it does. According to AudienceDevelopment.com, the new store layout will also reduce the length of the magazine rack by 20 feet — approximately 50 percent. That means something on the order of half the magazines you can buy at Wal-Mart today will be unavailable there after each store is remodeled.

Wal-Mart isn’t saying which magazines will get the boot, and according to AudienceDevelopment.com, that decision hasn’t yet been addressed. But, consistent with all of its in-store activities, Wal-Mart officials (not a talkative bunch in the first place) are blunt in saying they’ll keep only the magazines that sell the fastest. Because that’s what Wal-Mart is all about.

It’s good for earnings and it’s good for the publishers that make the cut. But shoppers looking for titles with slightly narrower focus will simply have to go elsewhere.

Because that’s the downside of Wal-Mart and the Big Boxification of retail: Only the most mainstream items in any category – from lumber to breakfast cereal to music to magazines – get shelf space. Wal-Mart is bad for variety.

And in this case, it’s bad for the magazine business. The likely in-store survivors — usual suspects like Cosmo, Maxim, Better Homes & Garden and, (going out on a limb) Guns & Ammo — may see an increase in sales due to the new location, improved merchandising and reduced category competition. But I can’t imagine that the bump will be enough to offset the 20 feet of shelf-space that’s being given to some other retail category.

Face the fact: At the world’s largest store, magazines have just been put within site of the back door.

Newspapers getting closer to a paid-content consensus

In his blog, Reflections of a Newsosaur, Alan Mutter — a Silicon Valley CEO and a former newspaper reporter, columnist and executive — says nearly half of newspaper publishers don’t believe they can succeed at charging consumers for content.

I think Mutter sounds like a smart guy, and his blog is great; just having stumbled across it I’ve put it on my blogroll. However, what he sees as the glass half-empty looks to me like it’s half-full. I’m pleased and impressed that just over half of newspaper publishers think they can charge for content.

As Seth Godin, another of my blogroll favorites, says: Success is mostly about your attitude. Which means the newspaper business is half-way home to figuring out how and why people are going to pay for their content. I’m not saying it’s an easy task, or that the tradeoff in revenue — advertising and classified for reader payments — is a neat-and-clean one-to-one swap. (It really doesn’t have to be; online content doesn’t come with huge printing and distribution costst, but that’s a digression). Like I said, I’m pleased to hear that half of the U.S. newspaper industry is giving itself a fighting chance at success.

As for the rest of Mutter’s blog, he’s smarter than I am, so you should just take a look at his more detailed analysis, and at the report that directed me to his blog in the first place.

http://www.mediabuyerplanner.com/entry/45119/half-of-newspaper-publishers-believe-online-pay-walls-will-work/?utm_source=mbp&utm_medium=email&utm_content=textlink&utm_campaign=newsletter

Magazines: Kick ’em when they’re down

A report at the end of August indicated that newsstand sales of magazines were down more than 12% in the first six months of 2009 compared to 2008.

I can only guess why that might be:

A sudden lack of spending money by the nearly 10 percent of people who are now unemployed;
A general feeling that, with so much news about magazines shutting down and facing financial ruin, they aren’t the attractive impulse buy they once were;
Have you seen the cover prices on magazines these days? With ad revenues down, many top-tier magazines now cost $7 or $8 at the newsstand.
I don’t have the foggiest idea what percentage of magazines are purchased at airports. It’s probably not that significant. But if air travel was down in the first half (it was) I suppose fewer people were buying magazines at airports.

With all that said, I’m not reading any more into this than it being one more bad metric for publishers in a year filled with bad metrics. I’m sure newsstand sales will rebound when the time is right.

But in the spirit of kicking them when they’re down, Wal-Mart has just announced that it’s implementing a new floor-plan that will put magazines in the back of the store, alongside music, video games and electronics.

At a level, it makes sense; consumer electronics aren’t near the back of the store because they don’t sell well. That department is usually one of the most crowded; it’s where all the wish-list shoppers loiter while the serious shoppers are boring us to tears in the throw-pillows and laundry-detergent aisles.

Further, the current newsstand location at Wal-Mart, wherever it is, can’t possibly be a great position, sandwiched in there somewhere between diet remedies and pet toys.

And finally, say what you will about the people who run Wal-Mart; they aren’t stupid when it comes to maximizing sales-per-square-foot. If they’ve done their research and they think magazines are going to sell better in the vicinity of music CDs and other entertainment goods, I can’t argue.

But I can say that, symbolically, for magazine publishers, it feels like just one more kick in the front of the pants.

Why the URL is less important every day

I remember reading, in the early days of the Web, how large companies were paying hundreds of thousands of dollars to purchase meaningful URLs. For instance, McDonald’s wasn’t the first owner of www.mcdonalds.com.

About 9 years, ago, I tried to sell a URL that I was abandoning. I found a broker who promised to auction it off, estimating that it might be worth $15-20 thousand. The bubble burst, the auction never happened, and the URL simply expired — sitting unused until sometime in the past year when another company started using it.

The URL remains a most important locator for online information. But the importance of branding a URL — or of obtaining a URL that perfectly matches your brand — is declining.

Jonathan Richman at iMedia Connection offers 4 technologies that are responsible for its declining importance.

They are:

Search engines: The power of search is well-known. More people find websites through search than by typing in the URL;

Browsers: New-generation browsers like Google Chrome and Firefox skip the need for going to a search engine; just type a search term in the address box and they deliver search results;

URL shortening: Sites like Twitter, with strict limitations on size, force URLs to be shortened dramatically. Tools like TinyURL and Bit.ly exist to do this. Which means the URL for this page, as an example goes from https://themarketfarm.com/themarketfarm/wordpress/2009/09/08/why-the-url-is-less-important-every-day/ to http://tinyurl.com/nq6d2y — which is pretty efficient, except any unique branding disappears.

The QR code: Popular in Asia and Europe, you take a picture of the QR code on your smart phone, and it will take you directly to the related website.

Overlooked in Richman’s blog, which is more detailed and well worth reading, is a fifth technology of social networking. More and more businesses are using Facebook, Twitter and other sites to attract audience; these work based on the names of companies and communities — not web addresses. So the brand of the company once again becomes more important than the brand of its URL.

The ultimate point, though, is that if you have a URL you like, don’t spend too much to brand it. And if you have a URL you don’t like, you can work around it.

What’s the economic value of a journalist?

Journalists are historically thick about the notion that they are part of a business model; that they are employed not so much for the public good but because somebody has figured out how to make more money from their work than it costs to produce. That thickness is part of what makes them good at what they do; good journalists tend to follow the trail of information regardless of how they fit into someone else’s profit motive. It’s also why the outsider complaint — “The reporter only wrote that story to sell papers” — never gets any traction.

But the business model under which most journalists have always worked is under attack right now, and that’s changing the very basics of the job: who wants to hire them, what the job requires, and how much it pays.

In recent good times, a newspaper would bring in about $1.35 in revenue for every $1 spent to run the place. That includes such inelastic expenses as distribution and printing. If you eliminate those expenses from the equation (which an economist wouldn’t do, but this is a journalist-centric view, in which the value of a newspaper to its readers and advertisers is directly proportional to the quality of its reportage) then the economic value of a journalist is at least 1.35 times salary and benefits.

But in times like this, newspaper profits are down — which means the economic value of journalists is down too. The work of the newsroom simply produces less profit so, therefore, the value of each person in that newsroom is less.

Media companies deal with this as any business would: When profits drop, you reduce costs. Most media start with manufacturing: production, printing and distribution. (Tips for reducing production costs; 34 tips for cutting costs; United Media cost-reduction strategy.)

But when profits continue to drop, people start to lose their jobs. And despite what journalists like to think about their value, cutting reporters and editors usually stops the bleeding pretty quickly. That’s because producing news isn’t the same as producing, say, cars or other manufactured goods.

If you cut people from the auto assembly line, you can’t make as many cars. Which means you can’t sell as many cars. In a recession, that’s OK because fewer people want to buy those cars anyway; jobs get cut because there’s an imbalance between supply and demand.

But in media, you can cut an untold number of reporters and editors without actually reducing output (Journalism jobs decrease 34% Jan 08-Jun 09). The quality of the reporting might suffer; graphics might not be as well thought-out; typos and errors may increase. But the audience still gets the same quantity of news, and the advertisers still get the same audience.

When a recession ends, a car manufacturer can’t sell more cars unless it hires back workers to increase production. But a newspaper can see advertising revenues increase at the end of a recession regardless of whether it puts more people back into the newsroom. That’s why financial and spreadsheet types like investing in media; the correlation between employment and profit is indirect enough that they can choose to ignore it.

This can go on for a long time, and it has. Eventually, people start saying things like, “That newspaper is just a shadow of its former self.” And any rational explanation about declining profitability should include the long-term effect of decreasing quality and comprehensiveness.

But that’s simply not the entire reason newspapers, magazines, radio and TV are struggling; I’d argue it’s not even a major factor — just a bad symptom.

The real reason is competition. Years ago, a major metropolitan morning newspaper’s only competition was the afternoon paper. (Remember, the competition isn’t for readers; it’s for advertising revenue). Then came radio, television, cable television, city magazines, alternative weeklies, etc. They may all serve readers differently, but their money comes from the same pot of regional advertisers. More recently, add Google Ad Words, online magazines such as Slate and Huffington Post, bloggers like Matt Drudge, social networking like Facebook and Twitter, and dozens of other business models I can’t even think of. The one thing all of these have in common is that they demand a piece of the same marketing budgets that are the financial foundation of newspapers.

Many of these newer organizations pay journalists — but none pay as much for as many journalists as did the old-line media. So not only do newspapers have more competition, journalists have more competition.

All of which is a roundabout way of saying I’m not patient enough to calculate the actual economic value of a journalist. But the following items seem clear:

Economic value and social value are separate issues.
Traditional media still seem to be experiencing declining economic value of their journalists. For example:
Effect of mass layoffs at newspapers
New news models
Bloodletting in the newsroom
Layoff tracker
Meanwhile, types of businesses that didn’t previously value journalists now seem to be the places where the value of journalists is growing. For example:
This is what you get when you pay for reporters
The growth of brand journalism
Best job in the world
Attention corporations: Hire a journalist
Winery hires lifestyle correspondent
Entire business models that do away with the cost of journalists are emerging — and starting to attract big money. For example:
Examiner.com buys NowPublic for $25 million
www.heightsobserver.org
www.printcasting.com
Old business models are trying to revive the value of journalists by finding other revenue streams to pay for them. For example:
How newspapers that charge for content are faring
Murdoch charges for content
Electronic newspaper update
Non-profit newspapers
AP battles with news aggregators
Old-line business models that see the industry’s decline as merely a function of journalism’s decline somehow seem angry and not very realistic.
Our Hometown News, Strongsville, OH
The decline in value is related to the recession; when recovery starts in earnest, the decline will flatten out.
Cox Enterprises hopes for positive earnings
But the decline in value wasn’t caused by the recession; it was caused by huge disruption of traditional business models that involve journalists. For example:

what-b2b-advertisers-really-want-from-media
are-magazines-really-that-important
Journalists may be unwilling participants in the dizzying changes taking place. But those who are determined to make themselves valuable will succeed — whether or not it’s through a traditional channel.
What journalism students need today
Listen up, old-school journalists
The future of news is scarcity
I’m pretty sure the economic value of journalists isn’t declining; it’s declined among media that follow traditional business models, but that’s being offset by new models and innovations that are only now starting to emerge.

Pandora radio: maybe the best thing the ‘net has ever offered

After hearing about Pandora.com for months, I just loaded it on my Blackberry. And then on my laptop.

Pandora is internet radio; you pick an artist or song that you like and it builds a station of music with similar qualities. If it plays a song you don’t like, a click on the thumbs-down icon helps Pandora refine what it plays for you.

I’ve never used an application that loaded any easier or was more intuitive to start up. Over the course of a 45-minute drive in which I was the passenger, I loaded it, got familiar with the controls and set up about 15 stations — all of which play music that I could listen to all day. When I got to my laptop, I loaded the application in less than a minute, then typed in my password, and got to precisely where I’d left off on the Blackberry.

With a $6 cable from Radio Shack, you can plug the Blackberry (or iPhone) into the utility port of a car radio or a set of powered speakers.

Which means that with no learning curve, and for the cost of my cell phone data plan — which I was already paying — I can have the best of all musical worlds (mental note: start a new Pandora station around Candide or Leonard Bernstein).

It’s better than my iPod, because I don’t have to select each song and be my own DJ.

It’s way better than Sirius/XM because the channels I create are better focused than anything satellite radio offers; and I don’t have to pay the $6.99-$12.99/month subscription fee.

I don’t think Pandora is going to hurt the sale of MP3 players; most of them do more now than simply play music files.

But Pandora is everything that Sirius/XM could hope to be — yet easier, better and cheaper. It is the ultimate disruptive technology; it delivers radio at no cost, using technology that lots of people already possess, and it strikes a magical balance between doing all the work and giving the user control.

Last I heard, Sirius/XM was losing more than 100,000 customers a month. I can’t imagine that pace has continued. But I’m guessing the downward trend has. And with its dependence on expensive space-based satellites and human-programmed channels, satellite radio is a precarious business model that has yet to make money.

In Greek mythology, Pandora carried a magical box that contained all things harmful to humans — disease, fear, unhappiness, etc. Zeus instructed her not to open it, but when her curiosity got the best of her, she spilled its contents into the world and upon mankind.

To most of us, this Pandora is a welcome innovation. But to Sirius/XM — and broadcast radio over time — Pandora and the others that will inevitably follow it must look like the thunder from Olympus itself.