Tag Archive for 'mass media'

The Internet, Iran, and Ubiquity

P1040449What’s happening right now in Iran is absolutely remarkable. It validates the remarkable impact ubiquitous computing and ubiquitous connectivity to the Internet has and its potential to disrupt even the most tightly controlled police state in the world.

The rejection of the election by the public is creating public chaos, finally giving the people a reason to revolt against a regime they’ve detested for decades now. This situation has the potential to escalate to bigger things – or it likely will settle down – but regardless, it gives us a real insight into the future. That is, how these new technologies are transforming everything, and disgracing the mass media in the process.

What I saw in Iran
This blog of mine actually started as a travel blog, and one of the countries I wrote about was Iran. In my analysis of that beautiful country, I hypothesised a revolution was brewing based on societal discontent. What prevented this revolution from ever occurring, was a legitimate trigger – one that wasn’t shut down by the Islamic propaganda.
P1040208
A interesting thing I noted was that the official messaging of the country was anti-American and very over the top – no surprises there. But when you talked to people on a one-on-one level, you realised the Iranian’s actually respect the American’s – and it was the establishment they detested. It seemed the regime had a tight grip on society, using Islam as a way of controlling them in much the same way the Bush Administration use patriotism and the War on Terror, to do what it wanted and silence criticism. But by controlling the media (amongst other things), it essentially helped control society from revolting.

How ubiquity has changed that
In my previously linked article, I talk about the rising trend of a ubiquitous world – one where connectivity, computing, and data was omnipresent in our world. Separately, we are seeing a rising trend toward a “network” operating model for internet businesses, as demonstrated with Facebook’s CEO recently saying how he imagines Facebook’s future to not be a destination site.
denied
The implication is that people are now connected , can share information and communicate without restraint, but better yet, do so in a decentralised manner. The use of Twitter to share information to the world, isn’t reliant on visiting Twitter.com – it’s simply a text message away. It’s hard to censor something that’s not centralised. And it’s even harder to control and influence a population, where they no longer need the mass media for information, but can communicate directly with each other on a mass scale.

Take note
Social media is having a remarkable impact. Not only are we getting better quality reporting of events (with the mass media entirely failing us), but it’s enabling mass collaboration on a grand scale. One where even a government has the risk of being toppled. I’m still waiting to here from my Iranian friends to get their insight into the situation, but if it’s one lesson we should take note of, is that the Internet is transforming the world. Industries are not only being impacted, but society in the broadest sense. If a few picture-capable phones, a short-messaging communication service, and some patchy wireless Internet can rattle the most authoritarian state in the world, then all I can say is I’m gobsmacked at what else is on the horizon.

Thank you 2008, you finally gave New Media a name

Earlier this year Stephen Collins and Chris Saad had flown to Sydney for the Future of Media summit, and in front of me were having heated discussions on how come nobody invited them to the Social Media club in Australia. As they were yapping away, I thought to myself what the hell are they going on about. It turns out things I used to call "blogs", "comments" or "wikis" were now "social media". Flickr, Delicious, YouTube? No longer Web 2.0 innovations, but social media. Bulletin boards that you would dial up on your 14000 kbps modem? Social media. Online forums discussing fetishes? Social media. Everything was now bloody social media (or Social Media: tools are lower case, concept uppercase) and along with Dare Obasanjo I was asleep for the two hours when it suddenly happened.

social media bandwagon

However it turns out that this is a term that’s been around for a lot longer than we give it credit for. It hung low for a while and then as some significant events occurred this year the term became a perfect fit to describe what was happening. It’s a term that I’ve been waiting to emerge for years now, as I knew the term "new media" was going to mature one day.

Ladies and gentlemen, welcome to our new world and the way of defining it: 2008 is when the Information Age’s "social media" finally displaced the Industrial Era’s "mass media". Below I document how, when and why.

Origins of the term and its evolution
The executive producer of the Demo conference Chris Shipley is said to have coined the term during a key note at the Demofall 2005 conference on the 20th September 2005. As she said in her speech:

Ironically, perhaps, there is one other trend that would at first blush seem at odds with this movement toward individuality, and that is the counter movement toward sociability.

As one reporter pointed out to me the other day, the program book you have before you uses the term “social” a half-dozen times or more to describe software, computing, applications, networks and media.

I’m not surprised that as individuals are empowered by their communications and information environments, that we leverage that power to reach out to other people. In fact, blogs are as much about individual voice as they are about a community of readers.

The term gained greater currency over the next year, as Shipley would use the term in her work and various influencers like Steve Rubel would popularise the term. Brainjam which popularised unConferences first had the idea of a Social Media Club around the time of Shipley’s keynote and eventually formed it in July of the following year, which created more energy towards pushing for the term. Other people starting building awareness, like the Hotwire consultant Drew Benvie who from April 2006 has been writing the Social Media Report (and created the Social media Wikipedia page on 9 July 2006). Benvie said to me in some private correspondence: “When social media emerged as a category of the media landscape in 2005 / 2006 I noticed the PR and media industries looking for suitable names. The term social media came to be used at the same time of social networks becoming mainstream.” Back then it was more a marketing word to conceptualise online tools and strategies to deal with them, which is why there has been distaste for the term that prevented its adoption.

It was 2008 however when several news incidents, innovations, and an election entrenched this term into our consciousness. Later on, I will explain that, but first a lesson.

web2_logos

So what is Social Media?
A debate in August 2008 created the following definition: "social media are primarily Internet and mobile-based tools for sharing and discussing information among human beings. " I like that definition, but with it, you could arguably say "social media" existed when the first e-mail was sent in the 1970s. Perhaps it’s going to suffer the fate of the term “globalisation” where in the 1990s people didn’t know the term existed – but by 2001 in high school, I was told it had been around since the 1980s and by my final year of university in 2004 I was told "globalisation" started in the 1700s. Heaven forbid it turns into a term like "Web 2.0" where no one agrees but it somehow becomes a blanket term for everything that is post the Dot-Com bubble.

The definition is off-putting unless you have a fundamental understanding of what exactly media is. It might shock you to hear this, but a newspaper and a blog are not media. A television and a Twitter account, are not media either. So if you’ve had had trouble getting the term social media before, it’s probably because you’ve been looking at it in the wrong way. Understand what media really is and you will recognise the brilliance of the term "social media".

Vin Crosbie many years ago answered a question I had been searching half a decade ago on what was new media. Crosbie’s much cited work has moved around the Internet, so I can’t link to his original piece of work (update: found it on the Internet archive), but this is what he argued in summary.

  • Television, books and websites are wrongly classified as media. What they really are, are media outputs. We are defining our world on the technology, and not the process. Media is about communication of messages.
  • There are three types of media in the world: Interpersonal media, mass media, and new media.
  1. Interpersonal media, which he coined for lack of an established term, is a one-on-one communications process. A person talking directly to another person is interpersonal media. It’s one message distributed to one other person, from one person.
  2. Mass media is a one-to-many process. That means, one entity or person is communicating that one message to multiple people. So if you are standing in front of a crowd giving a speech, you are conducting a mass media act. Likewise, a book is mass media as it’s one message distributed to many
  3. New media, which is only possible due to the Internet, is many-to-many media.

I highly recommend you read his more recent analysis which is an update of his 1998 essay (can be seen here on the Internet archive ).

That’s a brilliant way of breaking it down but I still didn’t get what many-to-many meant. When the blogosphere tried to define social media it was a poor attempt (and as recently as November 2008, it still sucked). But hidden in the archives of the web, we can read Stowe Boyd who came up with the most accurate analysis I’ve seen yet.

  1. Social Media Is Not A Broadcast Medium: unlike traditional publishing — either online or off — social media are not organized around a one-to-many communications model.
  2. Social Media Is Many-To-Many: All social media experiments worthy of the name are conversational, and involve an open-ended discussion between author(s) and other participants, who may range from very active to relatively passive in their involvement. However, the sense of a discussion among a group of interested participants is quite distinct from the broadcast feel of the New York Times, CNN, or a corporate website circa 1995. Likewise, the cross linking that happens in the blogosphere is quite unlike what happens in conventional media.
  3. Social Media Is Open: The barriers to becoming a web publisher are amazingly low, and therefore anyone can become a publisher. And if you have something worth listening to, you can attract a large community of likeminded people who will join in the conversation you are having. [Although it is just as interesting in principle to converse with a small group of likeminded people. Social media doesn’t need to scale up to large communities to be viable or productive. The long tail is at work here.]
  4. Social Media Is Disruptive: The-people-formerly-known-as-the-audience (thank you, Jay Rosen!) are rapidly migrating away from the old-school mainstream media, away from the centrally controlled and managed model of broadcast media. They are crafting new connections between themselves, out at the edge, and are increasingly ignoring the metered and manipulated messages that centroid organizations — large media companies, multi national organizations, national governments — are pushing at them. We, the edglings, are having a conversation amongst ourselves, now; and if CNN, CEOs, or the presidential candidates want to participate they will have to put down the megaphone and sit down at the cracker barrel to have a chat. Now that millions are gathering their principal intelligence about the world and their place in it from the web, everything is going to change. And for the better.

So many-to-many is a whole lot of conversation? As it turns out, yes it is. Now you’re ready to find out how 2008 became the year Social Media came to maturity.

How 2008 gave the long overdue recognition that New Media is Social Media
The tools: enabling group conversations
MySpace’s legacy on the world is something that I think is under-recognised, that being the ability to post on peoples’ profiles. It gave people an insight into public communication amongst friends, as people used it more for open messaging rather than adding credentials like the feature originally intended when developed on Friendster. Yes, I recognise public discussions have occurred for years on things like forums and blogs, but this curious aspect of MySpace’s culture at its peak has a lot to answer for what is ultimately Social Media. Facebook picked up on this feature and more appropriately renamed it as "wall posts" and with the launch of the home screen that is essentially an activity stream of your friends, it created a new form of group communication.

The image below shows a wall-to-wall conversation with a friend of mine in February 2007 on Facebook. You can’t see it, but I wrote a cheeky response to Beata’s first message at the bottom about her being a Cabbage-eating Ukrainian communist whose vodka is radioactive from Chernobyl. She responds as you can see, but more interestingly, our mutual friend Rina saw the conversation on her homescreen and jumped in. This is a subtle example that shows how the mainstream non-technology community is using social media. I’m currently seeing how non-technology friends of mine will share links that appear on the activity stream and how they jump into a conversation about it right there. It’s like over-hearing a conversation around the water-cooler and joining in if you want.

Facebook | Elias, Beata, Rina

This is what made Twitter what it is. What started as a status update tool for friends, turned into a chat-room with your friends; you can see the messages posted by people you are mutually following, and you can join in on a conversation that you weren’t originally a part of. Again, simple but the impact we have seen it have on the technology community is unbelievable. Like for example, I noticed Gabe Rivera a few days ago had a discussion with people about how he still doesn’t get what social media is. I wasn’t involved in that discussion originally, but its resulted in me partially inspired to explore the issue with this blog post. These are subtle, anecdotal examples but in sum they point to this broader transformation occurring in our society due to these tools that allow us to mass collaborate and communicate. The open conversation culture of Web 2.0 has helped create this phenomenon.

Another Internet start-up company which I think has contributed immensely to the evolution of Social Media is Friendfeed. It essentially copied the Facebook activity screen, but made it better – and in the process, created the closest thing to a social media powerhouse. People share links there constantly and get into discussions in line. In the mass media, an editor would determine what you could read in a publication; in the Social Media world, you determine what you read based on the friends you want to receive information from. Collectively, we decimate information and inform each other: it’s decentralised media. Robert Scoble, a blogging and video super star, is the central node of the technology industry. He consumes and produces more information than anyone else in this world; and if he is spending seven days a week for seven hours a day on Friendfeed, that’s got to tell you something’s up.

The events: what made these tools come to life in 2008
We’ve often heard about citizen journalism with people posting pictures from their mobile phones to share with the broader Internet. Blogs have long been considered a mainstay in politics this last decade. But it was 2008 that saw two big events that validated Social Media’s impact and maturity.

  1. A new president: Barack Obama has been dubbed as the world’s first Social Media president. Thanks to an innovative use of technology (and the fact one of the co-founders of Facebook ran his technology team – 2008 is the year for Social Media due to cross pollination), we’ve seen the most powerful man in the world get elected thanks to the use of the Internet in a specific way. Obama would post on Twitter where he was speaking; used Facebook in a record way; posted videos on YouTube (and is doing a weekly video addresses now as president-elect) – and a dozen other things, including his own custom-built social networking site.
  2. A new view of the news: In November, we saw a revolting event occur which was the terrorist situation in India (and which has now put us on the path of a geopolitical nightmare in the region). However the tragic event at Mumbai, also gave tangible proof of the impact social media is having in the world .

What’s significant about the above two events is that Social Media has robbed the role played by the Mass Media in the last century and beyond. Presidents of the past courted newspapers, radio and television personalities to get positive press as Mass Media influenced public perception. Likewise, breaking news has been the domain of the internationally-resourced Mass Media. Social Media is a different but much better model.

What’s next?
It’s said we need bubbles as they fuel over-development that leave something behind forever. The last over-hyped Web 2.0 era has given us a positive externality that has laid the basis of the many-to-many communications required for New Media to occur. Arguably, the culture of public sharing that first became big with the social bookmarking site Del.icio.us sparked this cultural wave that has come to define the era. The social networking sites created an infrastructure for us to communicate with people en masse, and to recognise the value of public discussions. Tools like wikis both in the public and the enterprise have made us realise the power of group collaboration – indeed, the biggest impact a wiki has in a corporation from my own experience rolling out social media technologies at my firm, is encouraging this culture of "open".

It has taken a long time to get to this point. The technologies have taken time to evolve (ie, connectivity and a more interactive experience than the document web); our cultures and societies have also needed some time to catch up with this massive transformation in our society. Now that the infrastructure is there, we are busy concerning ourselves with refining the social model. Certainly, the DataPortability Project has a relevant role in ensuring the future of our media is safe, like for example the monitoring the Open Standards we use to allow people to resuse their data. If my social graph is what filters my world, then my ability to access and control that graph is the equivalent to the Mass Media’s cry of ensuring freedom of the press.

Elias Bizannes social graph
Over 700 people in my life – school friends, university contacts, workmates and the rest – are people I am willing to trust to filter my information consumption. It will be key for us to be able to control this graph

Newspapers may be going bankrupt thanks to the Internet, but finally in 2008, we now can confidently identify the prophecies of what the future of media looks like.

The makings of a media mogul: Michael Arrington of TechCrunch

After recognising in my previous post that Michael Arrington has successfully captured the dynamic of the mass media to pioneer new media, my mind asked how did this guy do it. With some time on my hands, I looked into what I think is one of the most remarkable stories to occur in the recent tech boom that was Web 2.0 (yep, that’s past tense – it’s an innovation era that now has closed). How "a nobody ‚Äî a former attorney and entrepreneur who, at 35, looked as if he might never hit it big " became one of Time’s 100 most influential people in the world. I’ve never interacted with Arrington, although I know plenty of people that know him well (through the Aussie mafia that grace the Valley). So this is coming from a completely objective but aware view. An outside view with purely the public record to track his success. Let’s see what the evidence tells us.

The accidental start-up
Reading through the archives of his main blog TechCrunch.com and his companion blog CrunchNotes.com, I came to realise his success could be identified as early as his first five months from the first post written. He launched TechCrunch.com on the 11th June 2005 with posts released daily if not multiple times per day. The blog averaged 5 posts every two days in its first year, with 879 posts (it was actually more, but a half dozen or so have since been removed).

TechCrunch posts per day (year one)

His first post, which has since been removed (God bless the Internet archive), gives an insight into motivations for starting the blog.

TechCrunch is edited by Michael Arrington and Keith Teare, with frequent input from guest editors. It is part of the Archimedes Ventures network of companies.

Archimedes Ventures was at the time a two partner firm that specialised in the "development of companies focused on Web 2.0 technologies and solutions." The fact the page listed Teare and is marked as part of Archimedes Ventures network of companies suggests this was a conscious business development effort on the part of Arrington. As he would later reveal, he was inspired by Dave Winer who said: ‚Äúif you are going to build a new company, go to the trouble of actually researching what other companies have already done." Several months later in October, he posted an announcement that his startup Edgeio would be live soon, validating that TechCrunch wasn’t so much a "hobby" but a need to understand your market. Indeed, it seems TechCrunch just became a more formalised affair as he had been posting research into potential competitors on his personal blog publicly from March 2005 – and by the time he launched TechCrunch there were already four employees at Edgeio. No doubt, exposure and networking like any smart businessman was part of his agenda as well, which perhaps is why we saw a transition from a personal site to a TechCrunch brand (more on community building later).

On October 2005, TechCrunch was ranked the 566th blog by Technorati based on the amount of links it received from other websites. In December of that year, its ranking had climbed to 96th. One year on, in June 2006, it became the 4th most linked-to blog and has subsequently maintained its status as number 2 (not being able to beat another new media mogul Arianna Huffington who dominates the table, but that’s a story for another time).

TechCrunch subscribers

The above graph shows an explosion, but it’s the first year that tells the story which forms the basis of this post:

Over that first year, 23,713 comments had been left, with around 1-2 million page views per month. However as the figures show, it was the first six months where this research turned into a prospective business ("help "), with subsequent months and years simply consolidating his growth: by year two, there were 2,000 more posts (double the output of the previous year); 115,608 comments and trackbacks in total (an average of 40 per post); and 435,000 RSS subscribers. Pages views in the month leading up to the 24th month in operation were 4.5 million, twice what it was the previous year. In September 2008, over a million people subscribed to the blog.

So how did he do it?
Compared to his peers/competitors, he joined the game quite late, and yet he is absolutely smashing them. Same software in some cases and same focus. The question is, what did Arrington do that others didn’t?

Whilst the metrics might track his growth, they don’t track how he did it, which has less to do with Search Engine Optimisation and more to do with hyping up a boom. Below I describe what I think are the Critical Success Factors that made TechCrunch what it is today.

1) Events.
TechCrunch wasn’t just a blog; it was a host. Early on, there were events hosted at Arrington’s house where people could network and mingle. It would be a mistake to think that TechCrunch later on got into the conference business as an alternative revenue stream, but the reality is, social networking was being organised in the real world in parallel to the online blog from as early as August 2005. To create a new blog and have 63 people subscribed to it within a week indicates a lot of offline activity to get those subscribers. The social meet ups reinforced his readership base.

2) Web2.0.
Arrington saw a tide building for a second tech boom and formed a loose group of allies promoting this tide. Add to the mix some existing high profile personal brands like Dave Winer and Robert Scoble – and in the process, you build your own personal brand. To use his words, he saw a parade and got in front of it.

When Tim O’Reily coined “Web 2.0”, it was a buzz-speak marketing word. What Arrington did was successfully exploit this dynamic by recognising the rising investment trend occurring. He built a community around Web 2.0 by being its tireless champion and channeling existing energies. And as the community grew, so did he. He realised that what goes down, goes back up again – and by tapping into this growth, he could grow with it. If this second boom was anything like the first, being at the front of it would be such a good career move that it probably didn’t even need to be said.

3) Excellent content.
Don’t underestimate the difference quality content has. Arrington has an analytical mind and is a clear communicator – he is a lawyer after all. Intelligence and an ability to communicate will beat even the most experienced journalist. I‚Äôve been told that Arrington doesn‚Äôt understand tech, or at least makes a convincing image of not getting it, which probably explains the why he writes in plain English – even in the conversational style of writing that blogging is associated with, good clear English is rare to find. More importantly, he understood what all publishers have long known: good content is not just about the words. As Scoble highlighted long ago, one of the reasons that made Arrington such a popular writer is the simple use of images to break up the text.

No doubt, Arrington’s previous staff writers, ones I am familiar with like Nik Cubrilovic, Duncan Riley and Marshall Kirkpatrick, made a big difference in TechCrunch’s growth: Kirkpatrick’s ground-breaking RSS and research skills to find news, Cubrilovic’s Arrington-style writing ability, and Riley’s industry relationships to often break news – is how they made compelling content. However, Arrington quite uniquely stands out and it‚Äôs why when he tried to take a break and to focus on the business side, he was pulled back in to raise the quality. TechCrunch is Mike Arrington: it’s been proven you can’t separate the two (at least, yet).

4) The media dynamic.
As I recently argued, the mass media at its core is about playing a game, but in the context of web 2.0 it is about understanding the dynamics of a market place. He had access to Venture Capitalists (VCs) as he was a corporate lawyer as well as an entrepreneur with experience to boot Рaccess that other entrepreneurs quite simply didn’t have.

He was able to successfully take advantage of the VC paranoia that they might miss the next Google or Facebook. They literally were desperate to hear about the next big thing. For them, Arrington was a deal-type lawyer who would review things in plain English and present it with pretty pictures. On the flip side, you had entrepreneurs dying to get in front of these VCs as well as general exposure for their start-up. When Arrington decided to put advertising on the blog, it was a natural progression: entrepreneurs wanted to get exposure to VCs, future employees, and buzz amongst their peers. People on the other hand, are willing to consume this content because it’s free market research for them – catering in the audience for both investor and the entrepreneur. Powerful stuff? God yeah – that’s the kind of captive audience that’s addicted to crack cocaine.

To give you an idea of impact, I was told by an entrepreneur whose company was profiled in that first six months, that they got something like 30 VC calls and e-mails over a holiday period. After less than three weeks, they had Kleiner Perkins Caufield & Byers email, say "Hi, just another VC here. Can we meet next Thursday?". They had a list of meetings that kept them going for weeks. My own personal experience this year through the DataPortability Project saw first hand what exposure and support from TechCrunch could do, and suffice to say, it’s impressive. We had VCs wanting to talk to us about data portability, even though we‚Äôre non-profit!

This offline social networking is key to what ultimately became an online social media business. What’s very telling is a comment left by Valley legend Dave Winer, a man Arrington repeatedly showed admiration for and I am sure his relationship is what gave him a boost at the start. It reflects several things, but foremost, Arrington had a lot of goodwill in the community as a leader of the industry by existing heavy weights. He connected the various participants in what ultimately is a marketplace. Forget about Edgeio – this was the making of a new media business that would show the dying mass media what the future looks like for their industry. TechCrunch became the channel of choice for so many people to get their voice heard for competitive, strategic and ego reasons.

Concluding thoughts
TechCrunch started as a hobby and research project to test a bunch of the stuff he’d been reading about in the Web2.0 space. After the crash, he pretty much dropped out and watched a lot of college football – he needed a way to get back into it. Arrington probably knew he could write well, but I don’t think he realised how much of an impact his ability could have. The use of images in content, and the frequency of his posts made TechCrunch in the first six months, combined with offline social networking, the positioning as a champion of the Web 2.0 community, and exploiting the dynamic of a marketplace is what made him what he is. By the end of 2006, I don’t think Edgeio got much of Arrington’s attention at all – he’d been hooked by the excitement of writing, leading opinion and eventually, the power that attracts people to positions of note and influence, whether it be media, celebrity, business or politics.

This post only touches on the surface, as the Critical Success Factors in that first year do not give a full picture. Arrington‚Äôs involvement with the presidential primaries process, his disruptive influence with DEMO through the TC40/50, the Crunchies and even the people who keep trying to take him down add a further dimension to the TechCrunch story. He’s a man with more haters than Murdoch, but that’s doesn’t make him any less brilliant.

Arrington can get right up the nose of people with massive vested interests, and he loves to stir the pot – like the traditional press practice, controversy sells. Living in a massive rented house with all but a big dog, he can pretty much operate without fear. If it all exploded tomorrow, he’d probably have a beer, and enjoy a good long holiday and another season of college football. That’s what makes a journalist fearless, and that, combined with his obvious passion for the sector and the power he wields makes for a pretty dynamic combo.

He’s made no secret of his desire to be bigger than C|Net (without having to cop the overheads of their business model). Take out download.com, and I think it safe to say he’s reached that: maybe it’s time he puts his eyes on something a bit bigger. Although I doubt he needs to be told that – he’s already making history along with another select few, who through raw talent are pioneering “new media”, ready to replace the financially bankrupt mass media as the influencers in our society.

The future of journalism and media

Last week, Deep Throat died. No, not the porn actress but the guy who was effectively in operational control of the FBI during the Nixon years. Mark Felt was a guy who was in line to run the FBI from his number three position, but was passed up by Nixon who brought in an outsider. Whilst people often remark that the Russian government is controlled by the intelligence services, it’s worth reflecting that the poster-child of the free world has its own domestic intelligence services yielding too much power over the presidents. Nixon broke tradition for the first time in 48 years, doing something other presidents couldn’t do: it was appointing an outsider to run the agency. And so lays the roots to his downfall, in one of the most dramatic episodes in the mass media’s history – a newspaper brought the downfall of one of the the most powerful men in the world.

Felt’s identity has been protected for decades, and was only made public three years ago, arguably because someone else was going to expose him and he beat them too it. In an interesting article by George Friedman at Stratfor:

Journalists have celebrated the Post’s role in bringing down the president for a generation. Even after the revelation of Deep Throat’s identity in 2005, there was no serious soul-searching on the omission from the historical record. Without understanding the role played by Felt and the FBI in bringing Nixon down, Watergate cannot be understood completely. Woodward, Bernstein and Bradlee were willingly used by Felt to destroy Nixon. The three acknowledged a secret source, but they did not reveal that the secret source was in operational control of the FBI. They did not reveal that the FBI was passing on the fruits of surveillance of the White House. They did not reveal the genesis of the fall of Nixon. They accepted the accolades while withholding an extraordinarily important fact, elevating their own role in the episode while distorting the actual dynamic of Nixon’s fall.

Absent any widespread reconsideration of the Post’s actions during Watergate in the three years since Felt’s identity became known, the press in Washington continues to serve as a conduit for leaks of secret information. They publish this information while protecting the leakers, and therefore the leakers’ motives. Rather than being a venue for the neutral reporting of events, journalism thus becomes the arena in which political power plays are executed. What appears to be enterprising journalism is in fact a symbiotic relationship between journalists and government factions. It may be the best path journalists have for acquiring secrets, but it creates a very partial record of events — especially since the origin of a leak frequently is much more important to the public than the leak itself.

Now consider my own experiences as an amateur journalist.

After several years of failed media experiments, my university enterprise (I did it as a society, not as a company, because I want to treat this as my "throw-away" startup to learn but not be tied down when I left) at changing student media suddenly hit the gold mine: we created an online weekly "news digest" that literally became the talk of the campus for those in the university administration and the people surrounding it. An elite audience (not the 40,000 University of Sydney crowd), but the several hundreds of people that theoretically represented the campus and ran the multi-million dollar student infrastructure. Of the 23 editions we created that year, we literally had people hanging off their seats for the next edition: trying to predict the new URL, and e-mails with quotes of it sent out within hours of publishing.

The News Digest, October 29th 2004.

It was interesting because of how the product evolved during its first year. I started it thinking it would be a cool thing to have a summary of the news, once a week, in a "digest" format. The news was split arbitrarily as student, Australian and international. However within a few editions, the student news segment was no longer just about the latest party but about confidential information and the core reason why people read it. In the second edition I wrote:

USYD UNION : Chris Farral has been hired as the Union 's new General Manager. Farral has a highly reputable background in the ABC and various community-based groups. It has been a decade since the Union 's last General Manager was appointed, and as such we hope Farral will bring a new flair and vitality to the position. Chris also happens to be the father of Honi Soit editor Sophie. Does this mean an end to critical analysis in Honi's reporting of the traditionally stale and bitter Union ? No. That would require there to have been critical analysis in the first place. (EB)

Cheekily written but an innocent attempt to report news. Someone saw that, realised we had an audience, and in edition three we revealed:

SYDNEY UNIVERSITY UNION: Last week we reported that Chris Farrell was appointed the new General Manager of Sydney University’s student union. This week we can reveal that close to $50,000 was spent on external recruitment agencies to find Mr Farrell. Where was he hiding? The selection panel was evenly split for two candidates: Paul McJamett, the current Facilities Manager and previously expected next-in-line for the job, was supported by Vice-President Penny Crossley, Ex-President Ani Satchithanada, and Human Resources Manager Sandra Hardie. Meanwhile Farrell was supported by current President Toby Brennan, and the two senate reps (one of whom is new this year to the Board). Crossley is rumoured to have crossed the floor, and made the casting vote for Farrell. (Elias Bizannes)

And then we go threatened with a law suit (the first of many in my life, it would turn out) because we exposed some dirty secrets of a very politicised group of people. The reason I wanted to share that story, was to have you see how we evolved from a “summary of the news” to a “tool for the politicians”. The rest of that year, I had people in all the different factions developing relationships with me and breaking news. Yes, I knew I was being played for their own reasons. However it was a two way using: I was getting access to confidential information from the insiders. Our little creation turned into a battleground for the local politicians – and so long as I could manage the players equally, I won just as much as they did, if not more.

Up until now, I never realised (or really thought) that my experience in student journalism was actually how the big players of the world operate. Forget the crap about what journalism is: at its core, it’s about creating relationships with insiders and being part of a game in politics, that as a by-product (not a function) also creates accountability and order in society.

On the future of journalism
For as long as we have politics, we will have “journalists”. In the tech industry for example, the major blogs have become a tool for companies. I recently saw an example where I e-mailed a CEO of a prominent startup about an issue, and within days, two major blogs posted some old news to get exposure to fixing the issue. This CEO used his media credits with the publishers of these blogs, to help him with the issue. It’s the same dynamic described above: people who create news and people with the audience. Heck – we have an entire industry created to manage those two groups: the Public Relations industry.

So the question about the future of journalism, needs a re-look. It’s a career path being disrupted by the Internet and breaking traditional business models, with the new innovations going to have their bubble burst one day. Where we will find answers to the future, is where we can see in play the dynamics of news creators and news distributors, as that is where journalism will evolve.

Personally, I’m still trying to work out if the captive audience has now left the building. But my 2004 experiment in student media – targeting the same Gen Y’s that don’t read newspapers – is recent enough experience to prove the Internet hasn’t broken this relationship yet. If you are looking to see what the future of journalism and especially the media is – you need to follow where the audience is. But a word of caution: don’t measure the audience by its size, but by its type. One million people may read the blog TechCrunch, but it’s the same one-million early adopters around the world that are asked by their Luddite families to fix the video recording machine. There is an indirect reader of a publication, but they are just as much influenced and can be reached out to, if determined by the direct reader. Even though Michael Arrington who started TechCrunch was a corporate lawyer, his successful blog has now done what the mass media used to do. That’s something worth recognising as the core to his success, I think. Certainly, it validates that the future is just like the past – just slightly tweaked in its delivery.

The broken business model of newspapers

About six weeks ago I took a week off work to catch up on life and do some research and testing of market opportunities. I had several hypotheses I wanted to test and sent content to a closed group of friends and colleagues. My goal was to watch how they reacted to it, to understand how time-poor people consume information…and it was an absolutely fascinating experience.

As part of this excercise, I took the task of reading all the major newspapers every day. It has literally been years since I’ve given that much attention to them – I used to read them daily, but my Gen-Y ways got the better of me, and I moved online. Unfortunately, I still can’t seem to manage my online rituals to efficiently consume information (hence the research I did – turns out other people are struggling as well). Something I realised in the course of my research, is that whilst newspapers are losing circulation due to the Internet – there is a lot they could do to really improve their competitiveness.

Too much detail
I tried reading the main newspapers word for word, and it took me hours. I don’t care how much people whine that they love the newspaper experience – the reality is, the people who read the news also work full-time. They barely have time to take out five minutes in their day; the reason people don’t read newspapers is because of the complexity of life. Personally I work through lunch; and if I don’t work, I am trying to do things in my life so as to make more time for myself after work. The weekend is literally the only time I have a chance to take a time out to read the newspaper – but given I neglect people in my personal life during the week and the myriad of other things I am involved in outside of work, means I don’t even get that chance. I rarely sit down – that’s why I read the news on my phone on the train.

Newspapers contain quality content, there is no doubt about that. However, if you are going to compete in the news business, you need to understand your audience: that’s all they want. If you read any news item in a newspaper, it will be flowered with extra facts, background information, and endless perspectives to colour the central issue. For example, an article about the Central Bank in Australia dropping its cash rate by 1% had several paragraphs talking about the exchange rate. Yes, it’s valid to talk about it – but there were another half dozen articles that did the same thing in the related coverage, and quite frankly, it’s a separate issue. Another article about the impact of the rate change on local business, makes mention that 50 million pizzas get sold through Dominoes Australia. Interesting stuff – but is it relevant to the news?

A newspaper should have a headline, and literally report just on that news. I’m not saying they shouldn’t report on the extra stuff – quite the contrary I love the extra stuff – but they fail to recognise that the problem with reading a newspaper is that it takes so long, and so people can only skim it. Report just the news, and let consumers follow up on the website with extra detail through special links provided.

Newspapers can’t compete in news any more
I was able to get copies of the major newspapers between 11pm and 12.40am – as in, the night before people usually buy it. Those newspapers had been delivered by a truck, after being printed in a factory far away, with thousands of copies being loaded and distributed earlier that evening. Of course, there is a staggered distribution with some newsagents getting them through the night and early morning (about 5am), but it’s still the same newspaper delivered at 12am as at the high profile newsagents.

The timeline for reporting news is a joke. The only hope a newspaper has in reporting news uniquely, is if it breaks it. By breaking news, it has a chance to take its time and frame the flow of information. But is this that common? Most newspapers use shared agencies to pool their resources with stories, like international news. Newspapers are being ignored by consumers, because they get news quicker on the Internet. Why must these media executives continue to ignore the reality that an online news organistaion is much more efficient in distributing breaking news. That’s why newspapers existed in the past, but they no longer fill that role in society – newspapers need to get out of that role (or become “news brand”, but no longer treating print as the prime distribution for that news).

The incentives and structures can’t compete with this new world
Journalists, especially freelancers, get paid by word count.
Readers, especially time poor ones, skim through the newspaper.

See a problem there? It’s called friction. In case you are a mass media executive, let me build on it for you: the economics of information have now changed. When your industry was created several hundred years ago, information was scarce and people had plenty of time. Today, it is people’s time (or “attention”) that is scarce, whereas information is abundant. Tradition through the “art” and skill of journalism seems to drive the industry more than its fundamental economic shifts. As I remarked at the Future of Media Summit several months back after hearing a mass media journalist rant on justifying her existence: “The skill of journalism? It’s just as relevant as the skill of sword makers. It’s nice, but I prefer a gun.”

A business that does not respond to its market, will die one day. The cost structures of the newspaper (and magazine industries) are sustaining a structure that no longer suits the market for which it supposedly caters for. Instead, it relies purely on generational factors of a Luddite population to sustain its circulation, trying to make money on a model that has now been broken.

What’s so exciting about this? The traditional media don’t get it, in the same way a bible-basher won’t accept there is no God despite presenting logic suggesting otherwise. I’ve heard this from friends in the industry, from people I’ve met at conferences, and from observing my own clients who are part of a broader media group.

Denial by a legacy industry can be a beautiful thing for an entrepreneur.

Online advertising – a bubble

I just recorded a podcast with Duncan Riley and Bronwen Clune – two New Media innovators I greatly admire, to discuss what the future of media was. Unfortunately, the podcast recording came out battered and my normal analytical mind wasn’t in gear to add fruitfully to the discussion.

So Dunc and Bron, here I go: why I think advertising on the Internet has a future that will repeat the property bubble that fueled the world’s economic expansion these last few decades. (Y’know -the one that just burst.)

Advertising has been broken by the Internet
Let’s think about this from a big picture first: why do people advertise? It’s to get an outcome. Ignoring elections and government campaigns, the regular market economy has advertising so companies can make money. Pure and simple. Whether it be "brand" advertising which is a way of shaping perceptions for future sales, or straight-off-the-bat advertising pushing a product – the incentive for companies is to get a response. That response, ultimately, is to take that cash out of your wallet.

Now’s lets jump into the time machine and think about companies in the 1970s and 1980s – before this "Internet" thing became mainstream. How could companies get exposure for their products? Through the media of course. The mass media had captured audiences, and they were able to monetise this powerful position they had in society by forcing people to consume advertising as they were dealt with servings of information they actually wanted.

It worked in the past, because that’s how the world worked. That is of course, until the Internet and the Web completely transformed our world.

Companies jumped on the web thinking this was simply an extension of the mass media but so much better. And they were right to some extent – it was much better. A bit too good actually, because it now exposed the weaknesses of the concept of advertising.

Take for example one of the undergraduate students that works at my firm. Apparently, this 19 year old never watches television – but he is on top of all the main shows. He does this through peer to peer technology, where he is able to download his favourite shows. I asked him why does he do that and he responded quickly: "because I can avoid the ads". What’s happening with the Internet is that consumers can control the experience they have when consuming information now, unlike the past where they marched in line according to the programming schedule. The audience is no longer captive.

The Internet did another thing: it made advertising more accountable. In the past, savvy agencies would ‘segment’ the population and associate various mass media outlets as better being able to connect with the ‘target market’. To measure, print used circulation and readership – working out how many people bought the publication, and some number out of some Actuary’s head of how many people read that same copy (through statistical techniques of assessing patients in doctors’ surgeries, no doubt). Broadcasters on the other hand, would randomly call households and using statistical methods, would estimate the number of people that tuned in.

Perhaps the fact I took statistics for my undergraduate degree, is why I am so skeptical. Even my stats lecturer admitted it was bullshit – albeit in an ‘educated’ way. In relation to the mass media, the bigger issue was the fact this educated bullshit was not disaggregated. What I mean, was that when a newspaper has a readership of 100,000 people – there is a massive assumption that if you advertise in that publication, you will actually reach them. You might have bought a newspaper to read this one article your friend mentioned – and yet, your act of purchase enables the newspaper to justify all the other pages to advertisers with a simplistic metric.

The Internet completely changed this because we no longer are relying on statistics, but actual data collected. In the past, advertisers would get a plane and fly over an Amazonian forest they picked and pay to drop one million pamphlets hoping that at least 50,000 of their target market would catch the pamphlets and respond. Of course, indirect sales activity could indicate the effectiveness of a campaign, but in reality it was all a guess. Now with the Internet, a lot of the guesswork is not required any more – and quite frankly, advertising on the Net looks bad but the reality is that the truth has now been set free.

This is looking at it from an accountability point of view, but looking at it from a practical view as well, there are issues. The holy grail of advertising, is targeting. The reason being, if you can target an ad better, you are more likely to get a conversion. However there is a natural friction with targeted advertising and it’s called privacy. As I’ve said before, privacy is the speed hump for the attention economy.

Advertising on the net technologically offers a great ability to target, with marketers licking their lips at the opportunity. However this is coming with a complete misunderstanding, that technology may be an enabler but culture and society will be a breaker. People do not want better targeting. The thought that some company profiles you scares the crap out of people. Yes, I’ve even convinced myself that when advertising is relevant, it’s useful – but this is looking at it after the fact. The problem with targeted advertising, is that whilst it may run a world record 100 metre dash, it might not get the chance to actually get off the starting blocks. Just ask Facebook if you don’t believe me.

The structural impact the Internet has had to ruin advertising
The Internet is great for measuring – but there are a few too many measures. The lack of a consistent measurement system creates several problems. More significant is the fact that different types of Internet services compete based on what model works best for them. For example, pay per action is something advertisers love because they are getting a better return on their investment by seeing a follow through. This works with contextual advertising like the kind Google uses – it’s actually in Google’s interest for you to click off their pages.

Contrast that with video sites where a person is engaged with the content for ten minutes. An advertiser can’t compare ten minutes of engagement on a video site easily with click-actions on contextual advertising sites. What this creates is a vacuum, where the ad dollars will bias those that offer a better likelihood of making a sale. After all, why would you care about capturing someone’s attention for ten minutes, when you can simply pay for someone clicking on a link which is directly linked with an e-commerce sale on your site.

This creates a real problem, because it’s not an equal playing field to compete for the advertising. Certain types of services do better under different models. Banner advertising will die, not just because people are realising the usability issues surrounding banner blindness , or the fact that banner advertising is simply a copy and paste model of the mass media days , but because competing advertising models that better link them better to final sales will become more popular. When we hear about the great growth rates in online advertising, don’t forget to dig a little deeper because the real growth comes from search advertising which makes up about half of that.

There’s another structural problem with the Internet: there’s too much competition. In the mass media days, the media had an established relationship as "the" information distribution outlets of society. With the Internet, anyone can create a blog and become their own publisher. Additionally, the Internet is seeing growth not just in New Media ventures, but utility and commerce ventures as well. Same advertising pie theoretically (ignoring the long tail effect for a second, where small advertisers can now participate), but a lot more "distributors". This creates a fragmentation, where advertising dollars are being worn thin. It’s for this reason the larger internet services tend to manage to get by . Just looking at the face of it though, you know there’s a problem in the longer term even for the bigger players when you operate in such an environment.

It’s not just other Internet services to worry about however: it’s the advertisers themselves. In a world of information, democratised by search engines judging quality content – you as a publisher are on the same foot as the company paying for the ads. Why would Nike want to advertise on your website, when it can just improve its own search engine ranking? Companies can now create a more direct relationship with their customers and future customers – and they no longer need an intermediary (like the media) to facilitate that relationship. That’s a Big Deal. It’s not just search though – the VRM Project is doing exactly that, creating a system that will facilitate those relationships.

Concluding thoughts
I could just as much put an argument in favour of online advertising, don’t get me wrong – there will be a lot of growth occuring still. But what I want to highlight, is that taking a step back at the facts, there is something seriously wrong with this model. If advertisers no longer need that intermediary to facilitate a relationship; if advertisers are chasing the industry down the tail of measureable ads that better link to a final sale; if the entire industry is not consistent and competing with each other both in inventory and in methods, in an infinite battle; and if consumers are no longer captive to the content distribution experience – it makes you question doesn’t it?

According to Nielsen over a year ago, about a third of all U.S. online advertising dollars spent in July came from the financial sector–with mortgage and credit reporting firms representing five of the top ten advertisers. Together, those companies spent nearly $200 million on search, display and other Web advertising, meaning that a slowdown would degrade fairly significant annual revenue streams. The writing was on the wall that long ago, what analysts are only now saying are troubled times for online advertising.

Just like we knew a year ago about the credit crunch, before a drastic turn of events turned it into the most dramatic economic shift in our world in our collective memories, so too will the advertising bubble burst. It will be years – perhaps decades – before this happens. However one thing is for sure – the Internet has not only ruined the newspaper, music and traditional software industries, but it’s also ruining the world of advertising. Like how newspapers, music and software are currently evolving into new models which we still are not sure where they will end up, so too will advertising be transformed.

Mr Online Advertising and Ms Media Company relying on it as a revenue model – you are growing on the basis of some very shaky foundations.

Information overload: we need a supply side solution

About a month ago, I went to a conference filled with journalists and I couldn’t help but ask them what they thought about blogs and its impact on their profession. Predictably, they weren’t too happy about it. Unpredictably however, were the reasons for it. It wasn’t just a rant, but a genuine care about journalism as a concept – and how the blogging “news industry” is digging a hole for everyone.

Bloggers and social media are replacing the newspaper industry as a source of breaking news. What they still lack, is quality – as there have been multiple examples of blogs breaking news that in the rush to publish it, turns out it was in fact fallacious . Personally, I think as blogging evolves (as a form of journalism) the checks and balances will be developed – such as big names blogs with their brands, effectively acting like a traditional masthead. And when a brand is developed, more care is put into quality.

Regardless, the infancy of blogging highlights the broader concern of “quality”. With the freedom for anyone to create, the Information Age has seen us overload with information despite our finite ability to take it all in. The relationship between the producer of news and consumer of news, not only is blurring – but it’s also radically transforming the dynamics that is impacting even the offline world.

Traditionally, the concept of “information overload” has been relegated as a simple analysis of lower costs to entry as a producer of content (anyone can create a blog on wordpress.com and away you go). However what I am starting to realise, is the issue isn’t so much the technological ability for anyone to create their own media empire, but instead, the incentive system we’ve inherited from the offline world.

Whilst there have been numerous companies trying to solve the problem from the demand side with “personalisation” of content (on the desktop , as an aggregator , and about another 1000 different spins), what we really need are attempts on the supply side, from the actual content creators themselves.

info overload

Too much signal, can make it all look like noise

Information overload: we need a supply side solution
Marshall Kirkpatrick , along with his boss Richard McManus , are some of the best thinkers in the industry. The fact they can write, makes them not journalists in the traditional sense, but analysts with the ability to clearly communicate their thoughts. Add to the mix Techcrunch don Michael Arrington , and his amazing team – they are analysts that give us amazing insight into the industry. I value what they write; but when they feel the stress of their industry to write more, they are not only doing a disservice to themselves, but also to the humble reader they write to. Quality is not something you can automate – there’s a fixed amount a writer can do not because of their typing skills but because quality is a factor of self-reflection and research.

The problem is that whilst they want, can and do write analysis – their incentive system is biased towards a numbers system driven by popularity. The more people that read and the more content created (which creates more potential to get readers) means more pageviews and therefore money in the bank as advertisers pay on number of impressions. The conflict of the leading blogs churning out content , is that their incentive system is based on a flawed system in the pre-digital world, which is known as circulation offline, and is now known as pageviews online.

A newspaper primarily makes money through their circulation: the amount of physical newspapers they sell, but also the audited figures of how many people read their newspaper (readership can have a factor of up to three times the physical circulation ). With the latter, a newspaper can sell space based on their proven circulation: the higher the readership, the higher the premium. The reason for this is that in the mass media world, the concept of advertising was about hitting as many people as possible. I liken it to the image of flying a plane over a piece of land, and dropping leaflets with the blind faith that of those 100,000 pamphlets, at least 1000 people catch them.

It sounds stupid why an advertiser would blindly drop pamphlets, but they had to: it was the only way they could effectively advertise. For them to make sales, they need the ability to target buyers and create exposure of the product. The only mechanism available for this was the mass media as it was a captured audience, and at best, an advertiser could places ads on specialist publications hoping to getter better return on their investment (dropping pamphlets about water bottles over a desert, makes more sense than over a group of people in a tropical rainforest). Nevertheless, this advertising was done on mass – the technology limited the ability to target.

catch the advert

Advertising in the mass media: dropping messages, hoping the right person catches them

On the Internet, it is a completely new way to publish. The technology enables a relationship with a consumer of content, a vendor, a producer of content unlike anything else previously in the world. The end goal of a vendor advertising is about sales and they no longer need to drop pamphlets – they can now build a one on one relationship with that consumer. They can now knock on your door (after you’ve flagged you want them to), sit down with you, and have a meaningful conversion on buying the product.

“Pageviews” are pamphlets being dropped – a flawed system that we used purely due to technological limitations. We now have the opportunity for a new way of doing advertising, but we fail to recognise it – and so our new media content creators are being driven by an old media revenue model.

It’s not technology that holds us back, but perception
Vendor Relationship Management or (VRM) is a fascinating new way of looking at advertising, where the above scenario is possible. A person can contain this bank of personal information about themselves, as well as flagging their intention of what products they want to buy – and vendors don’t need to resort to advertising to sell their product, but by building a relationship with these potential buyers one on one. If an advertiser knows you are a potential customer (by virtue of knowing your personal information – which might I add under VRM, is something the consumer controls), they can focus their efforts on you rather than blindly advertising on the other 80% of people that would never buy their product). In a world like this, advertising as we know it is dead because we know longer need it.

VRM requires a cultural change in our world of understanding a future like this. Key to this is the ability for companies to recognise the value of a user controlling their personal data is in fact allowing us new opportunities for advertising. Companies currently believe by accumulating data about a user, they are builder a richer profile of someone and therefore can better ‘target’ advertising. But companies succeeding technologically on this front, are being booed down in a big way from privacy advocates and the mainstream public. The cost of holding this rich data is too much. Privacy by obscurity is no longer possible, and people demand the right of privacy due to an electronic age where disparate pieces of their life can be linked online

One of the biggest things the DataPortability Project is doing, is transforming the notion that a company somehow has a competitive advantage by controlling a users data. The political pressure, education, and advocacy of this group is going to allow things like VRM. When I spoke to a room of Australia’s leading technologists at BarCamp Sydney about DataPortability, what I realised is that they failed to recognise what we are doing is not a technological transformation (we are advocating existing open standards that already exist, not new ones) but a cultural transformation of a users relationship with their data. We are changing perceptions, not building new technology.

money on the plate

To fix a problem, you need to look at the source that feeds the beast

How the content business will change with VRM
One day, when users control their data and have data portability, and we can have VRM – the content-generating business will find a light to the hole currently being dug. Advertising on a “hits” model will no longer be relevant. The page view will be dead.

Instead, what we may see is an evolution to a subscription model. Rather than content producers measuring success based on how many people viewed their content, they can now focus less on hits and more on quality as their incentive system will not be driven by the pageview. Instead, consumers can build up ‘credits’ under a VRM system for participating (my independent view, not a VRM idea), and can then use those credits to purchase access to content they come across online. Such a model allows content creators to be rewarded for quality, not numbers. They will need to focus on their brand managing their audiences expectations of what they create, and in return, a user can subscribe with regular payments of credits they earned in the VRM system.

Content producers can then follow whatever content strategy they want (news, analysis, entertainment ) and will no longer be held captive by the legacy world system that drives reward for number of people not types of people.

Will this happen any time soon? With DataPortability, yes – but once we all realise we need to work together towards a new future. But until we get that broad recognition, I’m just going to have to keep hitting “read all” in my feed reader because I can’t keep up with the amount of content being generated; whilst the poor content creators strain their lives, in the hope of working in a flawed system that doesn’t reward their brilliance.

A casual chat with a media industry insider

Today I had the chance of picking the mind of Achilles from the International Herald Tribune, who last year was appointed Vice-President, circulation and development. Achilles is a family friend and I took the opportunity to talk to him about the world of media and the challenges being faced.

The IHT is one of the three daily financial newspapers of the world, along with the Wall Street Journal and the Financial Times. It is currently owned by the New York Times, and has a global circulation of 240,000 people. I had a great chat on a lot of different themes which could have me blog about for a week straight, but here are some of the facts I picked up from our discussion, which I will summarise below as future talking points:

  • On Murdoch’s acquisition of the Wall Street Journal: “very interested to see if he will remove the paid wall”.
  • The IHT experiemented with a paid wall for it’s opinion content, but they will be removing that later this year
  • He says the Bancroft family sold it because they are emotionally detached from the product. It was just an asset to them.
  • A lot of the content is simply reedited content from the NYT and internationalising it. For example, replacing sentences like “Kazakhstan in the size of New York state” doesn’t work well for an international reader who has no idea how big New York state is.
  • On the threat of citizen journalism with traditional media: “they are a competitive threat because we are competing for the same scarce resource: the attention of readers”
  • The problem with citizen journalism and bloggers is the validity of their information – behind a newspapers brand, is trust from readers of the large amounts of research and factchecking that occur. They have no credibility.
  • A blog may develop credibility with an audience greater than the New York Times. But this poses problems for advertising as advertisers might only advertise because of its niche audience. Blogs are spreading the advertising dollars, which is hurting everyone – it’s become decentralised and that has implications which are problematic.
  • The IHT’s circulation is spread thinly across the world. For example, it has 30,000 readers in France and six in Mauritius.
  • Their target market is largely the business traveller, which has its own unique benefits and problems. For example, a business traveler will read it for two days but when they get back home, they will revert to their normal daily newspaper. It’s not a very loyal reader.
  • Readership is a more important concept than circulation as it tells advertisers how big the actual audience of a publication is. For example, the average newspaper has 2.7 readers per copy. However due to the nature of the IHT’s readers, despite having high circulation, they have low readership.
  • IHT is in a unique position of relying on circulation revenue more than advertising. For example, a normal daily relies on circulation revenue as 20% of its total revenue; the IHT counts on it for 50%.
  • It’s hard to get advertising because a readership of university professors is less desirable than fund managers that might read the WSJ. Advertisers prefer to target key decision makers.
  • It doesn’t rely on classifieds as a revenue source – a key thing hurting the newspaper industry currently.
  • Although they place more reliance on circulation revenue, they still get some good advertising opportunities as a lot of readers are politicians and government decision makers.
  • They get a lot of advertising for fashion
  • Psychographic data is more important to advertisers than circulation and it shows what type of readership a publication has.

Half the problem has been solved with time spent

On Thursday, I attended the internal launch of the Australian Entertainment & Media Outlook for 2007-2011. It was an hour packed with interesting analysis, trends, and statistics across a dozen industry segments. You can leave a comment on my blog if you are interested in purchasing the report and I’ll see if I can arrange it for you.

One valuable thing briefly mentioned, was the irony of online advertising.
Continue reading ‘Half the problem has been solved with time spent’