newspaper apocalypse

Monday morning’s paper told me the world is gonna end
I don’t need time to gather up my friends cause I haven’t any
Things I read the things I hear, it all seems so incredible
You’d think by now I’d learn my lesson

If you read the press, online or print, you already believe that newspaper and print publishing is all but dead. Is this industry self-fulfilling itself into oblivion?

According to the World Association of Newspapers and News Publishers in its annual world press trends update, at no time in the foreseeable future will digital advertising revenues replace those lost to print, making the search for new business models, including paid-for online access for news, a pressing concern for the news publishing industry.

So where is the money, that was originally spent on print, now going?

The circulation drop in Europe, for example, is less than 3% over five years. In fact, according to Timothy Balding, co-CEO of WAN-IFRA, “The survey showed that newspaper circulation grew, on a global scale, by 1.3% in 2008, the last full year for which data exists, and almost 9% over five years. The data shows consistent newspaper growth in Africa, Asia and South America, a long-term slowdown in the US and European markets. Over five years, according to our survey, newspaper circulation increased in 100 of the 182 nations for which we have reliable data.” And, “…newspaper companies in the ‘old’ markets have embraced digital platforms and new forms of print publishing and, in doing so, have actually grown their audience reach and revenues, even while their print circulations have come under pressure,” Mr Balding observed.

So where is the money, that was originally spent on print, now going?

Some of the highlights from the update:

  • Globally, 1.9 billion people choose to read a newspaper every day, or 34% of the world population, while 24% use the internet.
  • The biggest newspaper market in the world is India, with 107 million daily sales. India, China and Japan account for more than 60% of the world’s newspaper sales, with the USA taking 14%.
  • In terms of sales per 1,000 adult population, Japan leads the world with 612, followed by Norway with 576, and Finland with 482. In terms of reach, 91% of Japanese continue to read a newspaper daily, remarkable in such a technologically advanced and wired society.
  • Advertising revenues fell an estimated 20% in North America, 19% in eastern Europe, 16% in western Europe, and 11% in the Asia-Pacific in 2009, according to PwC.
  • The US market has been hardest hit, with advertising revenues in the third quarter of 2009 falling nearly 29% in print and nearly 17% on digital platforms over the same quarter in 2008. But revenue declines mirror declines in other industries. Take a look at this map which charts US press layoffs in 2009.

So where is the money, that was originally spent on print, now going?

Why has the US been hardest hit? Why the difference? Have we over-embraced digital gadgetry while the rest of the world still believes that newspaper is the best medium for wrapping physical content? Or, is it simply that internationally, content is not re-purposed to the degree that it is in these newer economies?

I think it is the latter. One of the promises of digital content was the dream of re-purposing. Of re-using and re-monetizing already created content, about making more money. If I have a selection of news feeds, then do I need as many journalists? But if those news feeds are also aggregated by other sources, websites and search engines, then how competitive is my print version? If news generation is trustworthy, sourced and verified, and adds value to a reader’s daily experience of life, then it has value, and it will be compensated. If that information is ‘commonplace’ and can be sourced anywhere, then why would a reader pay?

I think that’s what the US newspaper industry has forgotten. They have come under the spell of economic rationalists, and have handed their golden goose over to the bean counters who obey only the Golden Rule*. And those bean counters are now trying their hand at growing the beans instead of counting them…

Find your readers, listen to them, create relevant content and remember that not everybody has e-ink yet.

There is a place for incisive relevant analysis… I believe. Or, perhaps as a society gets more affluent it necessarily evolves into a faster paced era of 30s news bites, headlines and tweets. Perhaps understanding detail is too much work, work which affluence abhors. Maybe we’re just glimpsing humanity’s new gestalt and this trend is simply reflecting emerging cultural expectations and communications patterns.

Tell me it isn’t so… I’m listening.

*The Golden Rule in accounting speak is “He who controls the gold, makes the rules”.

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December 17, 2009 at 1:00 am Leave a comment

computing utilities cometh

It’s quick. It’s clean. It’s pure.
It could change your life, rest assured.
It’s the 21st century cure,
And it’s my job to steal and rob GRAVES!

Computing and IT is entering a new phase. Think of it as the industrialization of information processing. The glory of having the fastest chip, or the fastest router, or the fastest drive, in fact any fastest computing component is quickly becoming Pyrrhic in nature. It’s all about the computing ecosystem.

Some call it cloud computing, others call it scalability – in fact it is something very different. It is the computing utility. Think of it this way…

When technology companies created systems or solutions, they were focused upon a very horizontal marketplace i.e. all things to the most people, or a vertical i.e. specialized systems for specific applications. But when you think beyond systems and focus on absolute efficiencies of the individual components, and then configure those components to interact as an eco-system, rather than just a system… well, it’s like designing communities instead of architecting houses. Heat, power, traffic, serviceability, security etc. all take on different meanings. It is more than just how powerful an individual component performs.

And so it is with the new data centers. Reliability is not about five 9’s – it is about 100% up-time. It demands new engineering approaches. It is about questioning everything – even down to whether an LED is essential on a device, whether the rack is designed for maximum airflow, whether the air-conditioning leverages real thermodynamic principles, whether power is properly conditioned, whether the cost per computing unit is the lowest and most economical so that your users can build viable business models.

These new data centers are not only providing the compute utilities of the future, they are inventing new technologies, IT components and processes. Most importantly, they eat their own dog-food instead of extolling the virtues of their design with clever marketing paradigms as do technology purveyors.  They are their own reference. They can provide real performance and reliability metrics, and many are making their approaches truly ‘open’ by showing you how to do it. This is a very disruptive trend, because if these companies start doing it themselves, because the traditional companies cannot solve these engineering problems, then they will become the technology companies of the future… much like power utilities. At some point, what will be the incentive to compete and innovate? For an even lower cost per compute cycle…?

Edison may have been a visionary, but it was Tesla that pioneered the concept of utility electricity. Edison wanted everyone to buy their own generator, and keep buying services, wiring and light bulbs… from Edison.

I think we’ve reached a new tipping point in IT.

Tell me it isn’t so… I’m listening.

December 10, 2009 at 1:00 am Leave a comment

information density

Food, glorious food!
Eat right through the menu.
Just loosen your belt
Two inches and then you
Work up a new appetite.
In this interlude —
The food,
Once again, food
Fabulous food,
Glorious food.

Back in generational differences I wrote

“Even though I am not a fan of monkeying around with food, it did on average increase life expectancies from the baseline of old. So it is with information. Let us just hope that we’ll be smart enough to not allow information to become too fast, over processed and too preserved. Imagine suffering information obesity in the coming days!”

I was discussing early American History with a colleague and good friend of mine and we fast forwarded to the present-day political landscape. What struck us both was the parallel between fast food and availability of information. Perhaps its a glib and tenuous connection, but maybe there is something to this on a few different levels.

Nutritional Density in the context of information intersects quite readily with the current trend toward huge data-centers, their efficiency and management. If we were to parallel the increasing density of information that can be stored and processed in these facilities, there is an obvious parallel to the amount of nutrition produced per parcel of land and mono-cultures in general.  But are we talking nutritionally dense data, or energy dense data? As we look across the broad expanse of processing, it is easy to see that digital media, especially video, consumes vast amounts of storage. It is  visually rich to a consumer, but is the content itself valuable? In other words, we know it is energy dense, but is it nutritionally dense? Is the information we store and process in these data-centers useful for anything else other than to generate media revenues? How much actually feeds positively useful information for our society with factually relevant information? Or has it been processed, and subsequently prepared and packaged by a franchise for quick consumption? Has information really become a fast-food, ready for snacking with twitter or an on-the-go handheld? Has information crossed into entertainment along with the likes of toy laden packaged happy meals? Clearly discussions such as these counter the concept of a free-market information economy and tread dangerously closely to subjective evaluations and censorship. I am not advocating either. However, I do miss the days of relevant insightful journalism, slower yes, but based upon fact. The day that the newsroom became a profit center and not a cost center, was the day that media organizations started their downward spirals into irrelevancy and created opportunities for new technologies to fragment audiences and break the current business models. ‘Slow food’, what about a ‘slow information’ movement?

Information Overload, a term coined by Alvin Toffler refers to an excess amount of information being provided, which makes processing and absorbing tasks very difficult for the individual because sometimes we cannot see the validity behind the information. Consider this in the same context as willingly going to the buffet we call the internet, and loading ourselves with the excess calories of knowledge because it is available on an all you can consume basis. Have we willingly become gluttons of information? Just as food without exercise, have we stopped turning information into useful actionable knowledge?

Perhaps it was all best summarized in the following “As long as the centuries continue to unfold, the number of books will grow continually, and one can predict that a time will come when it will be almost as difficult to learn anything from books as from the direct study of the whole universe. It will be almost as convenient to search for some bit of truth concealed in nature as it will be to find it hidden away in an immense multitude of bound volumes.” –Denis Diderot, “Encyclopédie” (1755)

The paradox of choice provides a good counterweight to the freedom of choice. As technology makes media more accessible, we have a responsibility to ensure that our energy and resources are not wasted on junk. Food or information alike. Working out how will be our greatest challenge.

Tell me it isn’t so… I’m listening.

December 3, 2009 at 1:00 am Leave a comment

eyeballs

Happy Thanksgiving to all of my US readers.

Look into the eyeball my friend
Precious man can’t you understand
Look into the eyeball
Tell me what can you see
What can’t you see
You keep it going on
You keep it going on

It’s all about eyeballs. But not in the way we think.

We have become accustomed to thinking in advertising that more eyeballs equates to more money. That for any given CPM, more ‘M’ = more $. That was, and is true for broadcasting. One could extrapolate the same thinking to the evolving unicast world, and that would be a reasonable assumption except that it doesn’t work that way.

But there is one other really big thing. Distribution costs.

  • RF transmission –  Once you have the transmitter, licenses, business infrastructure in place, the cost of distribution is essentially fixed.
  • Print – Production costs are fixed, as may well be distribution costs for certain types, but essentially, more subscribers = more paper & ink and more delivery/postage. Therefore the cost of distribution is baseline plus cost per subscriber per content delivery instance.
  • Cable & Satellite – Fixed base cost (satellite & cables), but then a smaller cost per subscriber to get the Set Top Box and connection established. Not a recurring charge.
  • Web Pages – Fixed cost per quantum of users for servers and infrastructure, after that the bandwidth paid by the subscriber.
  • Web/Mobile Video – As per web pages, except when they all have the audacity to get ‘what they want, when they want it, where they want it’ and then you have to unicast-stream the bandwidth intense content. At that point, your cost per subscriber goes way up.

So. Is having lots of eyeballs really more important than having the right eyeballs? Depends upon who you are. As a broadcaster, it just gets cheaper and generally the advertising becomes proportionately more lucrative. If you cannot attract the right ‘CPMs’ (and who does?*) you lose huge economies of scale in a unicast world, and the costs of providing the service far outweighs the advertising revenue that those eyeballs generate. What’s more, not all traffic is equal. For example, surfers who arrive via search are predominantly “one-and-done” visitors, not necessarily the reliable well defined demographic that most content owners seek.

Perhaps Murdoch is right in moving away from Google and leveraging Bing instead. This is akin to moving out of the expensive shopping mall rental when you have a known brand… the theory being that shoppers will follow, they are qualified buyers and you get to keep more of your own money.

“What’s the point of having someone come [to us] occasionally who likes a headline they see in Google?” Mr. Murdoch asked in his recent Sky News interview. “Sure we go out and say ‘We’ve got so many millions of visitors, you had better advertise’ and so on. The fact is, there’s not enough advertising in the world to go around to make all the websites profitable.”

Unique IP distribution is expensive.

Be careful of eyeballs. Yes you need them to validate viability, but too many eyes watching your every move may be bad for business.

Tell me it isn’t so… I’m listening.

*Ad networks incrementally deliver pennies for every thousand more visitors that publishers attract. Most ad networks deliver between 16 cents and $1 for a thousand and have large unsold inventories.

November 26, 2009 at 1:00 am Leave a comment

simplify and go back to paper

I won’t tell your secrets
Your secrets are safe with me
I will keep your secrets
Just think of me as the pages in your diary

Everyone has a Luddite moment. Be honest with yourself, even you.

How many business plans have been sketched out on a napkin? Have not some of the most powerful and personal presentations you’ve ever witnessed been done on a whiteboard?

Why is that?

With all of the rumors about a new mac iTablet, the releases of Kindles, new Nooks etc. one would naturally expect that we’ll all soon be sporting communications tablets that have all of our media, our documents, our communications in one simple form factor. As long as we keep them charged up, we’ll have access to our data. As long as we back them up, and keep those backups up-to-date, we’ll have access to that ever-growing personally duplicated library of stuff forever.

Yet somehow paper and pens do not seem to go away.

Surely everyone has an electronic diary? …and surely all our diaries talk to each other and help schedules our daily lives in perfect digital harmony and sync with our other devices and personal variables and variabilities?

PIC-0012How many of you still jot stuff down on good old-fashioned, environmentally unfriendly paper pulp? You know, the kind that uses less power and employs the most humanly evolved stream of consciousness indexing system? The kind that if stored reasonably well, will last hundreds of years without power, and will retain that memory as it was produced and laid-out by the original author cum publisher?

How many hard drives, flash drives, CDs and DVDs will last that long? How many software packages will last that long? And more importantly, how many will be compatible with future technologies? To be a little more specific, how many of you can still read your original WordStar documents? Or those original MSMail messages? Or…? My guess is that most has been tossed away (or lost) years ago. At some point we inevitably, intentionally or accidentally, de-clutter our lives. Much like an evolutionary process for information brought about by external environmental factors.

The digital archiving dilemma ensures that we’ll be forced to keep converting our ever-increasing digital content to constantly changing new technologies. Each iteration of such new technology will consume new resources and energy to be manufactured, but to also to convert bits to new formats, only to repeat the cycle again and again. Brings a whole new meaning to recycling doesn’t it? Meanwhile, paper and film still stay the same, in the same underground limestone vaults, stored without laying claim to increased resource utilization.

Are old analog formats less convenient? Usually, they take more time to handle and search. Are they less accessible? Generally. Are they more personal or authentic? Always. Are they more secure? Generally so, because it takes more work to copy millions until they’re digitized.

And the quality, generational loss etc… perhaps it’s not worth saving giving the resources it will waste over its lifetime?

I think I’ll start investigating the comparison of archival costs for documents on paper vs. electronic for say the next 250 years. No, I do not hope to live that long…! My guess is that paper (and its analog cohorts) will still win.

Oh, and by the way, I don’t need a touch tablet to draw and write freehand. Paper works for that too.

Tell me it isn’t so… I’m listening!

November 19, 2009 at 1:00 am Leave a comment

who killed the radio star?

So, Radio, Radio
Tell me what i wanna know, wanna know
I’ve been wide awake, staying up all night
Waiting for a song that will make me feel alright.

According to a Nielsen analysis of a media study conducted by the Council for Research Excellence, 77% of adults are reached by broadcast radio on a daily basis, second only to television at 95%. The study found that Web/Internet (excluding email) reached 64%, newspaper 35%, and magazines 27%.

And, in a deeper analysis of audio media titled “How U.S. Adults Use Radio and Other Forms of Audio,” Nielsen found that:

  • 90% of consumers listen to some form of audio media per day
  • The 77% who listen to broadcast radio surpass the 37% who listen to CDs and tapes and the 12% who listen to portable audio devices.
  • Almost 80% of those aged 18 to 34 listening to broadcast radio in an average day.

In an earlier post, technology creates media businesses, I made the point that new technologies create new businesses. And they do. It does not mean that they always create them at the expense of other businesses. Although they eventually do. What it does mean, is that the money within an industry gets redistributed. And that is the current problem with media.

The iPod has not seemingly killed radio, but it has impact even in this demographic. As I have intimated in generational differences and graphed in technology creates media businesses there are probably more significant changes yet to occur. These differences cannot be measured (or readily considered) by surveys, such as those that introduced this blog.

We are seeing less money per listener in radio. Just as we are seeing less money per subscriber in newspapers. These were early forms of mass media. Is this because the nature of society is changing? That the mediums are becoming more efficient? That new forms of media are competing for the same dollar? Or, all of the above?

I say it is all of the above. Media is evolving. The problem is that we don’t know the end-state. If we did, we’d know what business model to develop. Until we do, enjoy the book and stop trying to flip to the last page. There is no last page. Never has been in media, and likely never will be.

Tell me it isn’t so… I’m listening.

November 12, 2009 at 1:00 am Leave a comment

a shot in the arm?

I can still remember
It wasn’t long ago.
Things you used to tell me,
You said I had to know.

On October 28th, 2009 the Wall Street Journal featured an article in the business section titled FCC Considers Shifting Some TV Airwaves to Broadband. In it, the author Amy Schatz, reported that “Federal regulators are considering taking back some airwaves from television broadcasters and auctioning them off to wireless companies to increase the availability of wireless broadband services.”

The proposal suggests that some of the bandwidth allocated to broadcasters may be rescinded in order to sustain the presumably rapid growth of mobile bandwidth demands.

Where does that leave the interested parties?

As a broadcaster, how would I justify the very recent investment of capital into infrastructure to deliver DTV (both HD and SD). It has cost money in an environment where the value of broadcast advertising is being seriously questioned. As a cable or satellite service provider it may mean more customers, but who’s going to pay for local content acquisition and long haul/uplink?

As a consumer, I have in some cases reluctantly acquired a new expensive TV or have been provided with a subsidized converter box in order to receive the free to air signals mandated and administered by the authorities.

So, where would the audience go? Would it migrate to broadband and pay for what used to be free-to-air? In a paid broadband environment, what would be the role of government authorities like the FCC? Would different standards apply to what used to be free-to-air and paid channels? Who would subsidize the connection costs? What does it do to the concept of the public commons?

Clearly, this would add even more confusion to the already vague business models. Many, many more questions come to mind.

Whatever happens, you can be sure that regardless of the transport layer, digital content will be delivered via IP. Even content that would be sent over the reclaimed spectrum will eventually be delivered via IP (think 4G). Seems like regardless of the decision, IP delivery of content marches inexorably onwards… A shot in the arm for IPTV?

Tell me it isn’t so… I’m listening.

November 5, 2009 at 1:00 am Leave a comment

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