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Takeaways from paidContent Live: Paywalls, sponsored content and massive disruption

April 18, 2013 - 1:38pm

The world of media is being disrupted at an even faster rate than ever, it seems — both the content side and the advertising side — and our paidContent Live conference in New York on Wednesday was full of fascinating viewpoints and analysis from some of the writers, publishers, startups and investors who are playing key roles in that disruption. From the book industry to news and journalism to cable television, business models are being exploded by new entrants and new technologies, and while that causes destruction in some parts of the media industry, it also creates opportunity as well.

There was much talk about both aspects of this ongoing evolution at the conference, from people like star blogger Andrew Sullivan and Tumblr founder David Karp to investor Ken Lerer and Guardian editor-in-chief Alan Rusbridger. What follows are just some of the key lessons or moments that struck me as significant during the show (you can also read our live coverage of each session and watch livestreams of each panel as well).

Paywalls vs. open journalism:

During my interview with him, one of the key points that Guardian editor Alan Rusbridger made was that there is a very clear tension between the efforts by an increasing number of newspapers to erect paywalls — in order to bolster their revenue — and the philosophical approach to journalism that sees openness and interactivity with readers as a cornerstone of what journalism has become. As Rusbridger put it:

“It is journalism that wants a response. It is journalism that is itself responsive. It is journalism that doesn’t just sit on the web as though it has no connection with the web, that acknowledges that the web is the most extraordinary revolution in publishing where lots of people will be publishing extremely worthwhile and informative information. And so you can produce better things by not ignoring it or building a barrier between yourself and that but incorporating it and linking to it.”

The many different flavors of paywall:

Much of the discussion that took place on the monetization panel — which featured Dick Tofel of ProPublica, Justin Smith of Atlantic Media, Raju Narisetti of News Corp. and Bob Bowman of Major League Baseball — was about the myriad ways in which media companies can charge for their content. Bowman argued that every media company should be charging its users, even if it is through some kind of “pro” version, and Smith announced that The Atlantic will soon be launching a content offering related to the magazine that will be subscription only, although he didn’t say what kind of content it would be.

Narisetti also talked a bit about his vision of a “reverse paywall,” which focuses more on membership benefits that readers could accumulate based on their engagement with a site — although Bowman said he thought this would just encourage readers to click on ads or perform other tasks in order to get something for free, and that advertisers would quickly see through this gaming and not be interested in advertising around it. Smith also pointed out that The Atlantic‘s event business produces a lot of revenue for the company, and therefore decreases the need for a strict paywall.

No one can agree on sponsored content:

On the panel that focused on the increasingly blurry line between editorial content and advertising, Felix Salmon of Reuters challenged Jon Steinberg of BuzzFeed, Kyle Monson of Knock Twice and Forbes chief operating officer Lewis D’Vorkin to define their terms — but the panelists spent most of their time debating whether “native advertising” of all kinds is inherently unethical or duplicitous in some way (the view held by Andrew Sullivan, who has railed against the phenomenon).

Steinberg maintained that the conventional wisdom that says average readers are confused — and in some sense misled — by sponsored content is hogwash, and that this is essentially a lie perpetrated by traditional media entities who continue to rely on banner advertising for their revenue. According to the BuzzFeed president, banner ads are a dying medium, and some form of sponsored content is the only real alternative. Monson, however, argued that if native advertising becomes too ubiquitous, readers will begin to ignore it the same way they currently ignore every other form of advertising.

Independence is a doubled-edged sword:

paidContent Live 2013 Andrew Sullivan The Dish Andrew Ross Sorkin NYT Maria Popova Brain Pickings Tim Ferriss The 4-Hour Workweek

(L to R:) Andrew Sullivan, Editor, The Dish; Andrew Ross Sorkin, Columnist, NYT; Maria Popova, Writer, Brain Pickings; Tim Ferriss, Author, The 4-Hour Workweek paidContent Live 2013 Albert Chau / itsmebert.com

One of the highlights of the conference for many (including me) was a panel composed of superstar bloggers and authors Andrew Sullivan, Maria Popova, Andrew Ross Sorkin and Tim Ferris. Sullivan has famously bet his livelihood on going direct to his readers for financial support — although he maintained that he is not anti-advertising, as some have assumed. He said he is dedicated to that approach even to the point of not taking a salary until he can prove that the model works, and that he values his independence and his direct relationship with readers over the comfort of working for a large media entity.

Andrew Ross Sorkin, by contrast, has been able to build a fairly large team and business model for himself inside the New York Times — even though he could probably (or theoretically) have created something similar, and more independent, on his own. Sorkin said that his interest in remaining inside a large media entity stems in part from the resources it puts at his disposal, and partly from his commitment to the brand itself, since the paper took a large bet on him years ago when he created DealBook.

There was a lot more to the conference that I haven’t even touched on here — including a startup showcase featuring new platforms like Circa and Branch, a panel on the use of algorith-driven personalization with Mark Johnson of Zite and Aria Haghighi of Prismatic, a great look at the future of books with Dominique Raccah of Sourcebooks and Evan Ratliffe of Atavist, a discussion between Om and John Borthwick of Betaworks, and an interview with the architect of Aereo’s ongoing disruption of cable.

Thanks to all those who attended and to all of our speakers as well.

Post and thumbnail images courtesy of Albert Chau

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Podcast: How Joey Coleman crowdfunded his work as a hyper-local reporter

April 16, 2013 - 7:30am

We’ve written about projects like Matter, which used Kickstarter to fund the creation of a new magazine for science writing, and high-profile bloggers like Andrew Sullivan who go directly to readers for financial support — but could a relative unknown in a small town use crowdfunding to build a business covering city hall and other local news?

Joey Coleman says yes. He has done not one but two successful Indiegogo campaigns to raise money to cover his home town of Hamilton in Canada, where he writes about everything from the local elections to fires and other breaking news.

In a multi-part podcast series leading up to our paidContent Live conference on April 17 in New York, we’ve been talking to people who are doing innovative things in media, and Joey Coleman is definitely one of those. He doesn’t have a background as a journalist — he is just a tech-savvy resident of a town where he believes that not enough is being done to cover local stories. After starting a blog and having a number of readers offer to pay him for his reporting, he decided to do some crowdfunding.

In our podcast interview, Coleman told me that he hopes to turn his crowdfunding efforts into a regular subscription model, and potentially even hire other reporters and photographers to help with the job of covering the news, streaming local council meetings, etc. — but unlike some of those with paywalls (including the major media outlets in his home town), Coleman says his content will always be free to the public. For more on Joey and his project, please have a listen.

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Previous paidContent Podcasts:
Who’s afraid of podcasts? Not Earwolf

How Hugh Howey’s Wool became a self-published smash hit

How Indie Game stayed indie and became a hit

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Twitter shows how the news is made, and it’s not pretty — but it’s better that we see it

April 15, 2013 - 9:59pm

Not long after the Boston Marathon bombings occurred on Monday afternoon, several Twitter users noted that these kinds of real-time news events illustrate how incredible the service is as a source of breaking news, but at the same time how terrible it is.

Sure enough, there were plenty of fake news reports to go around on Monday, from reports of suspicious vehicles to the arrest of alleged perpetrators — just as there were during superstorm Sandy and the school shootings in Connecticut. But does that invalidate Twitter as a news source? And should the service try harder to filter out bad information and highlight verified news reports? I think the answer to both of these questions is the same: No.

Erik Wemple of the Washington Post noted that in some cases Twitter can act as a “news ombudsman,” pointing out that there were a number of people advising caution in the tweeting and re-tweeting of details about the blasts, although Wemple may also have been following more members of the media than the average person (ironically, some criticized Wemple himself for being too quick to post his thoughts about Twitter use during the aftermath of the bombings).

On days like this, Twitter shows its best & worst: loads of info at huge speed, but often false & sometimes deliberately so. #boston—
marc blank-settle (@MarcSettle) April 15, 2013

This in itself illustrates one of the problems with Twitter as a news-delivery vehicle, which is that no one can agree on the proper behavior during such events — or at least not enough people to make it worthwhile. When (if ever) is it too soon to speculate about the source of the attack or details like the number of wounded? Which sources are reliable and which aren’t when it comes to retweeting? Does everything have to be verified? Is it okay to retweet graphic videos and photos?

Journalism in real time, with all its flaws

These are all the same challenges that breaking-news outlets like CNN face, but they have teams of seasoned editors to make those decisions (and still often get them wrong — perhaps even as wrong as Twitter does). Twitter has nothing but a short attention span, a hair trigger and a couple of buttons that say “tweet” and “retweet,” and they are all too easy to push. Should more people think twice before they click them? Undoubtedly. Will they? Probably not.

Today reminds me how Twitter has become one of the greatest tools as well as one of greatest threats to true journalism.—
Geoff Grammer (@GeoffGrammer) April 15, 2013

That said, however, there’s no question that Twitter is one of the best tools for breaking-news delivery since the telegraph. Unfortunately, it is also a great tool for distributing lies, speculation, innuendo, hoaxes and every other form of inaccurate information. I’ve argued before that this is just the way the news works now — the news wire and police scanner are no longer available only to journalists, but to anyone who cares to listen. And so is the ability to republish.

Should Twitter do more to verify sources, or highlight accurate information, as some have suggested? It’s an appealing idea. The service could try to use geotagging to identify those who are close to the scene, or some other method to determine credibility — something third-party services like Sulia and Storyful also try to do through a variety of methods. But is that really Twitter’s place?

Leave verification to the journalists

Why don’t we get YouTube to verify the source of videos as well, like the ones that are posted from Syria or Egypt? Or get Google to sort the news it pulls in based on the likelihood of it being credible? The simplest answer is that this isn’t what those services are for — they are distribution engines, or pipes (a series of tubes, if you will). Asking them to become news entities is a little like asking AT&T to eavesdrop on phone calls in order to figure out who is a terrorist.

Rather than relying on Twitter to do this, I think it’s far better to accept the somewhat chaotic nature of the medium, and rely on journalists — and not just the professional kind, but the amateur kind as well — to filter that information in real time, the way Andy Carvin did during the Arab Spring (by using Twitter as a crowdsourced newsroom) and others did during Sandy and the Colorado shootings. Over time, I believe, Twitter becomes a kind of self-cleaning oven, as writer Sasha Frere-Jones put it.

Sure, it’s messy and erratic, but that’s because it is made of human beings. Traditional media is like that too, we just rarely see it happening out in the open. But I believe that having it happen out in the open is ultimately better than keeping it behind closed doors.

Post and thumbnail images courtesy of Flickr user Petteri Sulonen

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Don’t think of it as a newspaper — think of it as a platform for talent

April 12, 2013 - 4:37pm

Although they have since become a crucial element of modern society, in many ways newspapers were just the best packaging and delivery mechanism for information we had available at a certain point: a way of aggregating everything from local election coverage to foreign reporting. Now, of course, we have an almost unlimited ability to create, package and distribute our own content — and that means journalists and even those involved in news events can reach an audience directly. What if more media companies thought of themselves as platforms for helping that to occur?

That’s one of the ideas contained in a new book from Nicco Mele, a lecturer at the Harvard Kennedy School who acted as operations director for Howard Dean during his 2004 presidential race. In the book, entitled “The End of Big: How the Internet Makes David the New Goliath,” the author looks at how the social web and digital technology in general have altered the balance of power between the individual and the organization. And in a recent piece at the Nieman Journalism Lab, Mele argues the same thing is happening to the media:

“Some news personalities now play a strong role on Twitter and Facebook, but they often get little institutional support for this, and such participation and engagement remain merely part of a narrow web traffic strategy. But what if news outlets decided to flip their model, so that the editorial staff was not subservient to the brand, but the ‘brand’ became a platform for talent?”

Embrace the trend or be disrupted by it

Although Mele doesn’t explicitly say so in his Nieman piece, the flipping of this model is already occurring, whether media outlets want it to or not — as I tried to point out in a recent post about the shifting balance of power. Where platforms like the New York Times and Newsweek used to hold all the cards, and individual writers were forced to cut deals in order to find an audience, bloggers like Andrew Sullivan and Josh Marshall of Talking Points Memo have shown there is an alternate route (one we’ll be discussing with Sullivan and others at the paidContent Live conference on April 17).

While Sullivan’s experiment as a standalone media entity is far from complete, he has raised over $600,000 to fund his team, which means he is well on his way to being self-sustaining, instead of just being a part of the content at The Daily Beast and subject to their broad paywall. And a big part of what Sullivan (and pioneers in other fields, such as musician Amanda Palmer) see as the benefit of this approach isn’t just the money, but the personal connection with an audience.

As Mele suggests in his piece at the Nieman Lab, many traditional media organizations not only don’t help their journalists make use of social tools to connect with their readers, they actively discourage it with restrictive social-media policies. But what if they tried to enhance that connection and build on it — and perhaps even tried to share in the monetization of it? They could even experiment with allowing readers to subscribe to individual writers. Says Mele:

“On Election Day 2012, more than 20 percent of NYTimes.com traffic visited Nate Silver’s blog. At the same time, his book had just been released. The Times had little role in Silver’s book. But imagine it had a big one; imagine the way it would open revenue possibilities, taking advantage of the giant platform the Times provided Silver. Publishing books, hosting events, and public speaking are just the beginning.”

Why not a personal paywall for writers?

This is the essence of the “personal paywall” that I tried to describe in a recent post: the idea that individual writers are what increasing numbers of readers are connecting with and seeking out — not impersonal media brands or institutions. Why not provide Nate Silver or Nick Kristof with as many tools and resources as possible to make that easier? The New York Times is clearly thinking along those lines, according to new executive editor Jill Abramson, but it would be nice to see that idea expand and accelerate beyond just a chosen few at one newspaper.

Instead of thinking of the newspaper as the pre-eminent brand, why not think of it more like a talent agency or a record label: an entity that gets its value from helping to develop and promote a variety of voices — in whatever way it can, across whatever platforms. Newspapers have always promoted their star writers, but any value captured has gone solely to the larger brand, the assumption being that those journalists should consider themselves lucky to have been chosen. But as Mele notes:

“Talented people — their voices, personalities, tastes and ultimately news skills and judgement — are the filters that digital era consumers want, not archaic, anonymous news brand names. With the decline of trust and loyalty in large institutions, it is increasingly hard to imagine people in the coming decades subscribing because of loyalty to an institutional Big Media entity. Yet it’s easy to imagine them wanting to fund several people whom they trust to bring them information they care about.”

Post and thumbnail photos courtesy of Flickr user Christian Scholz, as well as Shutterstock / olyy and Shutterstock / Daniilantiq

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Two charts that tell you everything you need to know about the future of newspapers

April 11, 2013 - 5:58pm

There are a number of different aspects to the debate over the future of newspapers: the social impact of only printing several days a week, for example, or the impact of cutbacks on the public-policy role that newspapers play. But one of the most crucial elements of this debate is understanding the hard financial realities of the industry, since that is what ultimately determines how much newspaper owners will be able to do (if anything). On that score, two charts came out this week that make that point better than anything I’ve seen.

The first is a chart based on figures from the Newspaper Association of America, and it shows newspaper advertising revenue from 1950 — when the association first started keeping records — to 2012. As economics professor Mark Perry notes in a post at the Carpe Diem blog, the chart shows ad revenue falling off a cliff about a decade ago, hitting a brief plateau in the mid-2000s and then free-falling over the next several years (this is an updated version of a chart that appeared last year).

The speed with which billions of dollars in advertising revenue simply evaporated over the past decade is incredible: as Perry notes, after adjusting the figures for inflation, total print ad spending last year of about $19 billion was below the level set in 1950. It took 50 years — a generation, in other words — for ad revenue to go from $20 billion to a peak of $65 billion in 2000, but it only took 12 years for that progress to be erased. Print revenue dropped almost 50 percent in just four years.

Of course, all of that advertising revenue didn’t simply disappear overnight. So where did it go if it wasn’t going to newspapers? It went online, naturally — and the second chart shows the biggest beneficiary of that exodus: namely, Google. Media consultant and former newspaper editor Alan Mutter combined the latest revenue numbers from the newspaper association with the numbers disclosed by Google about its advertising income, and the resulting chart shows that Google now brings in twice as much as all the members of the U.S. newspaper industry combined.

According to Mutter’s graph, the crossover point — that is, the point at which Google’s growing advertising revenue eclipsed the newspaper industry’s rapidly declining print revenue — occurred in 2009 or so. Since then, Google’s revenue has soared to $46 billion (this is actually Google’s total revenue, but the vast majority is advertising) and the newspaper industry’s revenue has fallen to a little over $20 billion. While many newspapers seem to blame Google for their destruction, this is like blaming a hurricane for the loss of your house — it may have some truth to it, but it ultimately doesn’t help.

Obviously, this dramatic decline in the core of the industry’s business model — something Mark Perry calls “one of the most significant Schumpeterian gales of creative destruction in recent years” — helps explain why newspaper companies are going bankrupt, shutting down their print operations, engaging in successive rounds of layoffs and taking other measures to try and cut costs. But in many cases this is like trying to catch a falling knife.

A growing number of papers are also implementing subscription paywalls in an attempt to bolster what little print revenue they still have, with a majority of the large newspapers having some form of barrier. But while the NAA noted that revenue from subscriptions rose by 5 percent last year, that is a tiny drop in a rather large bucket. As Reuters writer Felix Salmon noted recently:

“In a dying industry, the sensible thing to do is to maximize your revenues before you die. Paywalls might well make money for newspapers. But that doesn’t mean that newspapers aren’t dying. Quite the opposite.”

Note: Some readers have pointed out that Mutter’s chart compares U.S. newspaper revenues to Google’s worldwide advertising sales, which is true. According to recent eMarketer estimates, Google brings in about $15 billion in ad revenue in the United States. So not quite as much as the newspaper industry, but close — and that figure is rising, while newspaper revenue is still falling.

Post and thumbnail photo courtesy of Zarko Drincic

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Foursquare closes $41M debt financing, ups the ante on a high-risk gamble to own local recommendations

April 11, 2013 - 11:06am

Foursquare announced on Thursday that it has raised $41 million in financing from a group of venture funds, but in an interesting twist the funding is convertible debt rather than equity. To some, that reinforces just how much pressure the company is under to show that it has an actual business, and that it can someday generate enough value to justify the financing it has already raised. In other words, the company and its investors have upped the ante on an ambitious bet.

BusinessWeek broke the news of the Series D funding round early on Thursday, an article that was quickly followed by a post from founder Dennis Crowley on the official Foursquare blog — entitled “Continuing Foursquare’s Growth” — and posts from two separate partners at one of the company’s main financial backers, New York-based Union Square Ventures.

Crowley compares the challenges to Google

In his post, Foursquare founder and CEO Crowley describes the challenges ahead — including some fairly dramatic technical challenges, such as the need to index and filter more than 3.5 billion check-ins and other location data in something approaching real time, in order to successfully recommend to users a restaurant or other business that fits their needs. Crowley compares it to the kind of data wrangling that Google has to do in order to provide search results:

“To us, this is like when Google came and revolutionized web search. Suddenly, you could find things on the internet. The real world is the same way. Four years ago when we started Foursquare, it was really hard to discover a new retro arcade that opened up on a side street, or to make sure you weren’t overlooking the best dish on the menu, or to know a good friend was just around the corner. Sometimes, we think of Foursquare as having the ability to give people superpowers for exploring the real world.”

In a post at the Union Square Ventures blog, Albert Wenger talked about the potential for Foursquare to capitalize on its new focus as a platform for discovering local businesses — something GigaOM’s Eliza Kern highlighted in her post on the newly redesigned Foursquare app, which launched on Wednesday. In effect, the company is going head-to-head with local recommendation services like Yelp, and giving up its earlier focus on “gamification” elements like mayorships and badges.

Debt instead of a lower valuation

Union Square Ventures partner Fred Wilson, meanwhile, wrote a post on his own blog about the fact that Foursquare chose to (or was forced to) use convertible debt rather than equity. As Wilson explains, this kind of late-stage debt issue is often used when a company doesn’t want to (or can’t) raise equity because doing so would involve a “down round” — in other words, raising money at a lower valuation than it was given in earlier rounds. As he described it:

“Both of our firms have been investors in Foursquare for several rounds and both of us own a meaningful stake in the company. Valuation is somewhat immaterial to us as our stake in the company is not going to increase much in this round of financing. But valuation is very material to the Foursquare management team because $41mm of capital is going to be dilutive at any valuation that would make sense here.”

As Foursquare has evolved from being a fresh young startup with the hot iPhone app — which it was in 2009, when it launched at the SxSW festival — into a four-year-old company that has raised a total of $70 million in three separate rounds, it has faced increasing pressure to prove that it has a real business, along with questions about whether it can ever justify its earlier valuation, which was in the $600 million range. In a report in January, private-company research firm PrivCo argued that Foursquare could go out of business by the end of the year unless it raised more money.

In a much-publicized spat on Twitter last month, investor Keith Rabois — a former PayPal founder who is a backer of Foursquare competitor Yelp — said Foursquare’s only option was to be acquired, because it had failed to back up its valuation with any real business success.

@dens @sriramk @hunterwalk great use of jargon. Maybe Hail Mary Bebo-style acquisition will bail you out.—
Keith Rabois (@rabois) March 16, 2013

Foursquare needs to prove it is a business

Foursquare’s biggest problem is that it hasn’t been able to generate any meaningful revenue from the millions of users and partnerships it has announced over the past couple of years — according to an anonymous source quoted in the BusinessWeek article, the company had revenue last year of just $2 million, which makes a $600-million valuation look almost ridiculous. According to Crowley, much of the new financing will be used to develop advertising products that can run next to Foursquare’s local recommendations.

Despite its inability to produce revenue, the company’s supporters remain optimistic about its chances of building a truly large-scale and profitable local recommendation service. Hunter Walk, a former YouTube staffer turned venture capitalist, said on Twitter “All I know is the financing allows them to continue building a product I love,” and Shai Goldman of the 500Startups angel fund said: “I hope they figure out how to monetize, I’m a fan.” Even John Lilly of Greylock Partners, which didn’t invest in the company, said on his blog that he thinks Foursquare has a chance to build a real business:

“What does matter is that they raised the money they need to give this a real go. I have high confidence in these guys that they’ll do well and build interesting products and a great business for a long time.”

Others, however, were less complimentary — and many seem to see Foursquare as a high-risk bet, much like email-offer flameout Groupon:

.@mdudas @jackgavigan @rabois @bijan I can only hope foursquare goes public. I didn't short Groupon nearly big enough.—
Rakesh Agrawal (@rakeshlobster) April 11, 2013

Post and thumbnail photo courtesy of Pinar Ozger

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Tumblr abruptly closes down its Storyboard project, lays off entire editorial team

April 9, 2013 - 11:55pm

A year ago, Tumblr launched an ambitious attempt to curate content from within the blog network — a unit known as Storyboard, with its own editorial staff who highlighted and aggregated posts from popular Tumblrs. Although the company seemed to have high hopes for the project, founder and CEO David Karp announced late Tuesday night on the official Tumblr blog that Storyboard has been shut down and the staff of the unit have been let go.

In his post, Karp (who will be joining us at our paidContent Live conference on April 17) said that the idea behind the project was to create an editorial team of “experienced journalists and editors assigned to cover Tumblr as a living, breathing community” and to “tell the stories of Tumblr creators in a truly thoughtful way.” The Tumblr founder went on to say that:

“After hundreds of stories and videos… we couldn’t be happier with our team’s effort. And as Tumblr continues to evolve, we’ll always be experimenting with new ways to shine light on our creators [but] what we’ve accomplished with Storyboard has run its course for now, and our editorial team will be closing up shop and moving on. I want to personally thank them for their great work.”

The Storyboard team included Sky Dylan-Robbins, executive editor and former Newsweek/Daiy Beast staffer Jess Bennett — who posted on her own Tumblr that the group had “redefined journalism” and that she was “drunk on a plane” — editor-in-chief Chris Mohney and Christopher Price. A number of outlets wrote about Tumblr’s ambitions with the unit, which did what Mohney called “marketing as journalism.”

Although Tumblr has posted some fairly large traffic numbers, with more than 140 million unique visitors and 20 billion pageviews, the company has struggled to generate revenue — only recently launching an advertising program for its mobile app, after a long period of rejecting such money-making measures — and has promised that the network would be profitable this year.

Post and thumbnail photo courtesy of Pinar Ozger

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This is about more than just advertorial — it’s about brands going direct

April 9, 2013 - 6:16pm

We’ve been writing a fair bit lately about “native” advertising or sponsored content, including a recent post about BuzzFeed’s challenges in relying on that as a business model. But as former Forbes.com founder David Churbuck points out in a recent essay, this phenomenon is about a lot more than just traditional publishers trying to adapt to what advertisers want in terms of content — it’s about brands and advertisers literally becoming publishers themselves.

Churbuck, who helped create Forbes.com and later went on to work with McKinsey, was responding to a piece in the New York Times about the increase in sponsored content, and how it is being used in different ways by publishers like BuzzFeed, The Atlantic, Mashable and Forbes — a piece that includes some pointed criticism of the trend from blogger Andrew Sullivan (Note: We’ll be discussing this and other issues around publishing at paidContent Live on April 17)

As Churbuck points out, this focus on how sponsored content is being used by existing publishers ignores a much more disruptive force, which is brands using the same tools to “go direct,” as blogging pioneer Dave Winer has described it — something we at GigaOM and paidContent have been writing about for some time now. Says Churbuck:

“The Times missed the bigger trend: marketers going direct to their prospective buyers by becoming their own publishers, producing their own media and using professional editorial placements only to rent names, just as marketers have been renting circulation lists for decades to drive their direct mail campaigns.”

Cheap tools and an oversupply of talent

The former Forbes executive goes on to detail some of the examples of this broader phenomenon that have been growing and evolving for some time, including brand “newsrooms” such as the ones that Intel and Cisco manage — which in many cases consist of unbranded content about technology that looks indistinguishable from any other tech blog. Churbuck also mentions:

Branded partner-produced content: These are sites that get produced in partnership with a media company, such as Intel’s “Creators Project,” which is a joint venture with Vice. Another brand that is producing its own Vice-style content is Red Bull.
Brand magazines: As Churbuck notes, in the past advertisers like IBM or the Four Seasons hotel chain would hire the “custom publishing” arm of media companies like Forbes or Fortune to produce an advertorial magazine, but now they can easily create their own.
The talent exodus: Senior writers and editors have been moving from traditional media to content-related positions at non-media companies — Churbuck mentions Fortune’s Rik Kirkland going to McKinsey to edit the McKinsey Quarterly and oversee the firm’s editorial strategy, Steve Hamm of Businessweek going to IBM, and Dan Lyons leaving Read/Write Web to join HubSpot.

Ignoring this phenomenon is not a strategy

As Churbuck notes, the driving force behind this trend is the desire to reach customers and potential customers directly and engage with them, and producing their own content allows them to “cut out the editorial middle-man.” It also allows them to be more agile and effective when crisis strikes, he says. And most importantly, he argues that trying to remain above the fray and not even experiment with sponsored content is a head-in-the-sand approach:

“They will either produce the content as a service to the corporate advertiser or see their former editors and reporters get hired away to do it under the more stable umbrella of a big organization with deep pockets. That the press is now selling the opportunity to publish corporate content next to their own reporting is a foregone conclusion. Hand wringing and saying one is ethically ‘aghast’ is the personification of the cliché, ‘pride goeth before the fall.’”

Post and thumbnail images courtesy of Shutterstock / Goodluz

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The Empire acquires the rebel alliance: Mendeley users revolt against Elsevier takeover

April 9, 2013 - 1:23pm

In a much-rumored deal announced on Tuesday, academic publisher Elsevier (please see disclosure below) is acquiring Mendeley — a widely-used open platform for collaboration and networking related to scientific research — for about $70 million. While the founders of the network maintain that they are committed to the “open access” movement, and argue that having Elsevier’s resources will allow them to expand their work and make it even more accessible, a number of high-profile users have said they aren’t convinced that Elsevier has changed its stripes, and they are taking their work elsewhere.

One of the most prominent, Microsoft researcher danah boyd (who spells her name without capital letters), said on Twitter that the takeover was “sad,” and that she doesn’t believe Mendeley can help Elsevier repair the reputation it has developed for being against open access to research — a reputation that is based on the publisher’s support of the failed anti-piracy legislation SOPA, among other things.

Another prominent critic of the acquisition is David Weinberger, a senior researcher at Harvard’s Berkman Center for Internet and Society and a co-director of the university’s Library Innovation Lab, which played a role in designing the new Digital Public Library of America project. Despite the assurances of executives at Mendeley that it would remain open — including its access API — Weinberger expressed scepticism that the company would be able to resist Elsevier’s attempts to make it more closed (he expanded on this on his blog).

Some of those who responded to the news of the acquisition seemed to see Mendeley’s acceptance of the takeover as a breach of faith, since the company had been such a vocal supporter of the open-access movement — a movement that many saw as directly opposed to the interests of companies like Elsevier. At least one observer compared it to “Haliburton buying Greenpeace,” and others made comparisons to the Empire in the Star Wars movie universe, or the Borg from Star Trek — both evil forces who eventually absorb or destroy the heroes of the story.

Mendeley’s director of academic outreach, William Gunn, responded to many of the critical comments about the acquisition, and said that the company plans to remain as open as possible following the deal:

Elsevier has been the target of a sustained attack from open-access advocates who organized a boycott of the company’s journals, galvanized by Fields Medal-winning mathematician Tim Gowers — arguing that its publications are too expensive and keep valuable research locked up in a virtual cartel. One commenter on a news story about the Mendeley acquisition said: “They spent their whole life as a company arguing they were the next big thing in open publishing only to sell out,” while a commenter on a thread at Hacker News about the deal said:

“Mendeley should be ashamed, and you personally should be ashamed for perpetuating this nonsense. Within a year your company will be effectively dismantled and anyone left over who actually cares about open access can start over from scratch. I wish them luck.”

News of the acquisition re-ignited interest in the “mendelete” hashtag on Twitter, which was devoted to criticisms of the deal and the exploration of alternatives such as Zotero. One commenter said: “Was Mendeley more about its values or its services? Some of its biggest supporters have become its shrillest critics #mendelete.” If nothing else, these kinds of responses show just how much work Elsevier has ahead of it when it comes to reassuring academics and others that their commitment to openness is real. As Emily Bell at Columbia University put it:

Disclosure: Reed Elsevier, the parent company of science publisher Elsevier, is an investor in GigaOmniMedia, the company that publishes GigaOM.

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Digital First Media’s John Paton on newspapers and paywalls

April 8, 2013 - 10:15pm

A company with the name Digital First Media has a reputation to uphold when it comes to thinking about the future of publishing, and CEO John Paton didn’t disappoint in a recent interview with a reporter for one of his chain’s newspapers. Among other things, he talked about paywalls, and also about where he plans to take the company in the future. Here are a few excerpts:

On paywalls: “I don’t think paywalls are the answer to anything. If we’re swapping out print dollars for digital dimes, I think paywalls are a stack of pennies. We might use the pennies in transition to get where we’re going.”
On the future of print: “Newspapers in print are clearly going away. I think you’re an idiot if you think that’s not happening. I don’t think that news organizations are dying but are newspapers going to stop running in print? Yeah. Absolutely.”
On print vs. digital: “We have $1.3 billion in revenue. And of $1.3 billion, $900 million is advertising and $165 million of the advertising is digital advertising. That $165 [million] is going to have to more than double in three years. To do that, we’re going to have to take some risks on the print side. That’s the one thing that scares the [expletive] out of everybody.”
On newspapers: “I love newspapers. I’m a newspaperman. My father was a printer. I started off as a copyboy. I love newspapers. But they don’t love me anymore.”

Paton also talked about the bankruptcy of one of Digital First Media’s subsidiaries, the Journal-Register Co., which filed for court protection last year for the second time — driven by what DFM said were massive commitments related to pensions and other costs taken on when the newspaper industry was better off financially. A group of funds managed by Digital First’s financial backer Alden Global eventually bought the company’s assets back. Said Paton:

“The process allowed the company to shed a bunch of legacy obligations it could never afford that it incurred when it was a much bigger company. The Journal Register incurred most of its long-term debt, most of its pension obligations, most of its lease obligations when it was nearly twice the size the company that it is today, which is kind of what’s happening to newspaper companies.”

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Why BuzzFeed’s attempt to reinvent online advertising is a lot harder than it looks

April 8, 2013 - 3:45pm

If there’s a poster child for the phenomenon of “native” advertising — also known by other names, including sponsored content — it is BuzzFeed, the digital-only publisher created by Huffington Post alumnus Jonah Peretti. Unlike some content companies that are just experimenting with these new forms of advertising, BuzzFeed has staked its future on the format, refusing to carry traditional ads. But as a recent profile of Peretti and his company in New York magazine makes clear, reinventing advertising is no walk in the park — and while BuzzFeed may have a head start, it is still far from that goal.

As the NY magazine piece points out, word of mouth is the holy grail for advertisers: customers talking about your product (or something related to your product) without you paying them to do so is the ultimate recommendation. Madison Avenue legend David Ogilvy said it was “like manna from heaven, but nobody knows how to do it on purpose.” In a nutshell, that’s what Jonah Peretti has been trying to do ever since he himself went viral in 2001, after a stunt he came up with involving a Nike shoe and some bad press for the company’s foreign manufacturing.

This is fundamentally the same reason advertisers are interested in social networks like Facebook and Twitter: because they are hoping to figure out how to both create “social” advertising messages and target them in such a way that they don’t really seem like advertising, thereby encouraging users to share them. The only problem is that no one really knows how to do that (Note: We’re going to be talking about sponsored content and other monetization methods with BuzzFeed president Jon Steinberg, among others, at paidContent Live on April 17).

How does virality work? No one really knows

Everyone can recognize a viral campaign when they see them after the fact, but no one quite knows how to produce them in any kind of scientific way. Microsoft researcher — and Peretti friend — Duncan Watts has studied this area more than just about anyone, and he and the BuzzFeed founder (who co-authored a paper in 2007 on the topic for Harvard Business Review) both have algorithms that try to describe the process. But Watts admits it is far more chaotic and difficult to predict than those algorithms suggest.

“We have this very Newtonian view of causality,” Watts, a square-jawed Australian, shouted over the din. “Like, billiard balls hitting each other, that’s the most complicated thing that we can wrap our heads around.” But his research suggests that the commonly understood, Gladwellian model of virality, with its linear progression through influencers and tipping points, doesn’t really reflect the way viral messages spread.

Even Peretti, who has gained a reputation for being able to engineer virality, seems to concede that it is harder than most people think. The New York magazine piece says the BuzzFeed founder became visibly irritated when told that some advertising industry critics don’t see the site’s sponsored content as being that valuable — with one ad agency executive arguing that showing readers “a bunch of cats” isn’t really helpful when it comes to doing actual marketing. “Could you make a list of cute animals that gets 5 million views? It’s actually really hard,” Peretti shot back.

Some advertisers are resistant to the idea

So one reason why BuzzFeed’s attempt to reinvent advertising is going to be a lot harder than it looks would be simple resistance from the ad industry itself: for all of Peretti’s talk about how sponsored content can bring back the creativity and storytelling aspect of advertising, many agencies and other players don’t seem convinced that putting their brand name on a piece about dogs who look unimpressed is going to help them move more product. The BuzzFeed founder may see this as short-sighted, but it is still a hurdle.

Another barrier is related to this one: namely, the fact that some of BuzzFeed’s sponsored content winds up doing the exact opposite of going viral. According to the NY magazine story, some of the content that Virgin America and other brands spent hours creating in collaboration with BuzzFeed — tinkering with it until they were convinced they had engineered it to be as viral as possible — more or less fell flat and disappeared without a trace. One post had just 350 shares on Facebook, which is the equivalent of a damp squib in social-networking land.

“Other campaigns running on the site… showed smaller results: Geico, 140,000 views; GE, 65,000 views; Pepsi Next, 44,000 views. These numbers don’t quite match the hype around native advertising, which might be why ad agencies sound much less enthusiastic about the medium’s transformative potential than publishers do.”

It’s also expensive — and potentially risky

A third hurdle to BuzzFeed’s ambitions is implied by both of the others, and that is the cost of producing the kind of content that the site wants to lure advertisers into sponsoring. All of the meetings that the NY magazine piece describes, in which a dozen or more editors work on posts and then decide which ones to market heavily (a process that somewhat ironically includes the use of ads on Facebook and elsewhere) makes for an expensive process.

And one final hurdle is the one highlighted by blogger Andrew Sullivan in a series of posts about the evils of sponsored content and of BuzzFeed’s approach in particular: namely, that the site will be unable to maintain the trust of its readers if it blurs the line between editorial and advertising too much. The NY magazine story describes several posts that could easily be mistaken for ads — even though they aren’t — and other posts that began as non-sponsored content and then were more or less recreated as advertising for specific brands.

BuzzFeed has $20 million in new financing, and New York magazine estimates that based on what it charges for a piece of sponsored content, the site could make as much as $40 million in advertising revenue this year. But building a profitable business based on the creativity of human beings in an area as unpredictable as online content — while retaining some credibility — is not an easy task. Just ask the traditional media industry.

Post and thumbnail images courtesy of Shutterstock / Everett Collection as well as Flickr users Nils Geylen and 401K, and Shutterstock / Eldorado3D

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Allen Stern, blogging pioneer and entrepreneur, passes away — we will miss you Allen

April 7, 2013 - 11:42am

Allen Stern, an early blogger as well as an entrepreneur and an all-around great human being, passed away last week, according to an update posted on his Facebook page by his sister Sari Rosenberger. The cause of death was not clear, but his loss triggered an outpouring of condolences from those who had known him — both in person and through his blog, Twitter and other social networks.

Before blogging became a big business, Stern created a tech blog called Center Networks, which became a go-to destination for many in the early Web 2.0 movement. Later, he sold that business and shifted focus to a new startup called CloudContacts — and more recently, he moved from his home town of New York to Austin, Texas to start a company called Let’s Talk Fitness.

My good friend @allenstern has passed. Founder of @centernetworks back in the day. The original blogger king, and a heart of gold. :(

—
Louis Gray (@louisgray) April 07, 2013

Having struggled with his weight for much of his life, Stern poured his energy into becoming more healthy, and had lost more than 125 pounds in the past year or so, according to his friend Louis Gray. His most recent business was aimed at helping others achieve similar results with the use of fruit and vegetable smoothies and other products, and he had built a large following for his newsletter.

Here’s what Om had to say about Allen:

“He was a stand-up guy and always spoke his mind. He never took to fools and as a result always found himself defending those who couldn’t defend themselves. I met him once, briefly at a Techcrunch 50 event, but we were internet friends and often exchanged Facebook and Twitter messages. He was always in good cheer, ready to share a moment of sadness and spread the happiness. As a fellow Yankees fan, he and I would often talk baseball during our exchanges.”

Tech and health blogging innovator Allen Stern has died. He was a kind man with a lot of integrity & hustle. facebook.com/allenstern/pos…

—
Marshall Kirkpatrick (@marshallk) April 07, 2013

Louis Gray, a startup advisor who now works at Google and wrote a remembrance of his friend on his blog, had this to say:

“I’ll miss Allen. I missed it when he stopped posting as regularly to CenterNetworks as he once did. But more, I’ll miss the fun email threads and fun phone cals that always left me laughing and feeling better. Death sucks and tonight, I’m sad. Bye, Allen.”

So terrible to hear that @AllenStern, a longtime NY tech fixture, passed away this week: bit.ly/14NHAq9 (via @DanDotLewis)

—
Caroline McCarthy (@caro) April 07, 2013

Others have also posted their memories of Stern, including Dan Lewis — who founded the site ArmchairGM and is now the director of new media for Sesame Workshop — and another early blogger named Duncan Riley, who said Allen would be sorely missed by friends who “came to appreciate a big guy with a huge heart who spoke as we all should: honestly and from the heart.” Author and entrepreneur Jesse Stay posted on his Google+ page:

“This is devastating news – even though we never met in person (but I sincerely hoped to, and have had numerous remote video conversations with him), I considered Allen Stern a dear friend of mine. He always knew how to lift people up and make them laugh. I sincerely enjoyed his health posts as of recent, and am very sad to hear of his death. This was way too soon, and many, I’m sure are mourning with me.”

Oh my. My friend @allenstern has passed. A big loss to our community. Very sad.

—
Micah Baldwin (@micah) April 07, 2013

As tech blogging became more and more of a cut-throat business, Allen remained a personal friend to most, and was always sincere in his openness to others. As Om put it: “The world just got a lot less nicer because of this one subtraction. Give heaven a taste of your heaven, Allen — you will be missed by me and thousands of others whose lives you touched.”

Post and thumbnail images courtesy of Flickr user Chris Tingom

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Publishing superstar Tim Ferriss joins us for paidContent Live in New York

April 5, 2013 - 5:51pm

We’ve been talking a fair bit lately about our paidContent Live conference in New York on April 17, because we are pretty excited about our speakers — from Guardian editor-in-chief and “open journalism” advocate Alan Rusbridger to Tumblr founder David Karp, and everything in between. The latest addition to the roster is Tim Ferriss, author of books like The 4-Hour Body, and someone who has also pushed the boundaries of publishing by doing distribution deals with everyone from Amazon to the file-sharing network BitTorrent.

Ferriss will be taking part in a panel looking at how some individual writers and media creators have become independent media entities in their own right, and have been able to carve out a healthy living for themselves outside of the traditional industry channels set up by the book, magazine or newspaper industries — and what the benefits and disadvantages of that approach are.

Unlike some of our panelists, Ferriss has always been an independent operator: he first appeared on the scene in 2007 with his book “The 4-Hour Workweek,” and then quickly followed that with other books applying the same approach to health and cooking. Ferriss has built his following on social media into a powerful publicity engine, and is also showing other authors some potential routes for success: according to Ferriss, BitTorrent — normally thought of as a source of pirated content — drove more clicks to Amazon than any traditional ad has.

Sullivan, Ross Sorkin and Maria Popova

Blogger Andrew Sullivan, who is also on our paidContent panel, is another poster boy for the independent media movement: Sullivan recently embarked on a closely-watched experiment by quitting the Daily Beast to launch his own standalone site, funded entirely by his readers. For Sullivan, this move is a return to his past in a sense — he was an independent blogger early in his career and tried the self-funding route before joining The New Republic, followed by The Atlantic and then the Beast.

Also on the panel is Andrew Ross Sorkin, a New York Times writer who also appears regularly on CNBC and other outlets, and has created a booming enterprise for himself within the NYT by building his DealBook blog into a multi-faceted entity with a conference and other elements. Hopefully Sorkin will tell us whether he has thought about taking the same route as Andrew Sullivan and becoming truly independent, and why he has so far decided not to do that.

And rounding out our panel is blogger/curator extraordinaire Maria Popova, who has built her blog Brain Pickings into a destination for hundreds of thousands of loyal readers, who help support her both through donations and by clicking on affiliate links to Amazon when she mentions a book. Although this approach caused some controversy recently, Popova has been able to make a living solely from blogging, without any help from traditional media channels.

Is this kind of approach viable for anyone, or are Sullivan and Ferriss and Popova exceptions? Are there benefits to remaining inside a traditional entity like the New York Times, the way Sorkin has, that outweigh the benefits of being independent? And will more writers and other creators choose to stay independent or become so in the future, thanks to the social web and platforms like Kickstarter? Those are some of the questions we hope to ask at paidContent Live. Please join us.

This post was revised on April 8 to clarify that Tim Ferriss has not self-published his books. Post and thumbnail images courtesy of Flickr user seanosh

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When cancer stole Roger Ebert’s voice, Twitter gave him a new one

April 4, 2013 - 6:58pm

After a long battle with cancer — which took away his vocal chords and eventually most of his lower jaw — veteran Chicago-based film critic Roger Ebert passed away on Thursday, leaving a host of passionate film buffs mourning his loss. Many of those fans likely formed an even closer connection to him after he could no longer speak without the aid of a computer, because of his enthusiastic use of Twitter and other social-media tools. He may have been just a movie reviewer to some, but mainstream journalists of all kinds could learn a lot from his example.

Twitter didn’t turn Ebert into a star, of course — he was already well known as half of the Siskel and Ebert movie-reviewing team long before he moved online, and his TV presence in turn came about because he was a popular film columnist with the Chicago Sun-Times. But after he was diagnosed with thyroid cancer in 2002, and had to have a series of operations that eventually left him unable to speak without a computer voice simulator, he poured much of his enthusiasm for life and the movies into Twitter and other social-media tools, including his personal blog.

I’m glad @ebertchicago got his voice back with Twitter.—
Burrito Justice (@burritojustice) April 04, 2013

In a piece he wrote in 2010 for his Chicago Sun-Times blog, Ebert celebrated the role that Twitter played in his life, something he said he never expected to say of the social network that he originally saw as an irrelevant distraction. As he put it:

“I vowed I would never become a Twit. Now I have Tweeted nearly 10,000 Tweets. I said Twitter represented the end of civilization. It now represents a part of the civilization I live in. I said it was impossible to think of great writing in terms of 140 characters. I have been humbled by a mother of three in New Delhi. I said I feared I would become addicted. I was correct.”

The part about being humbled by a mother of three in New Delhi says a lot about how Ebert used Twitter to connect with his readers — and critics. His passing was mourned by celebrities, but he was also more than willing to talk (and argue) with just about anyone who felt like engaging with him, and not just about movies but about plenty of other things as well. One follower who took part in a debate with him remembered how he and Ebert argued about the artistic value of video games.

A @rogerebert tweet is worth as much traffic as a small Digg or YCombinator hit. Crazy. That's some distribution power.

—
Alexis C. Madrigal (@alexismadrigal) August 05, 2012

In a sense, Ebert’s adoption of Twitter was somewhat ironic, since social media has helped to rob traditional movie reviewers of much of their authority — to the point where many newspapers don’t even employ a dedicated reviewer any more. But for Ebert, it became a lifeline, and one that only enhanced his popularity. He also came up with his own rules for how to use Twitter, which are good advice not just for journalists but for anyone:

“My rules for Twittering are few: I tweet in basic English. I avoid abbreviations and ChatSpell. I go for complete sentences. I try to make my links worth a click. I am not above snark, no matter what I may have written in the past. I tweet my interests, including science and politics, as well as the movies. I try to keep links to stuff on my own site down to around 5 or 10%. I try to think twice before posting.”

His interest in new-media tools extended beyond Twitter too: While many media outlets like The Atlantic are experimenting with “native advertising” and Gawker is trying out affiliate links, Roger Ebert started playing around with those kinds of monetization methods over two years ago — making a few of his daily tweets recommendations, with an Amazon affiliate link included. Although he got some criticism for doing so, most of his fans were happy for him to have the extra revenue.

The ultimate example of how being from “old media” doesn’t mean you can’t be great in “new media”: Roger Ebert.

—
Jason Snell (@jsnell) April 04, 2013

But it was Twitter that captured Ebert’s heart the most, because it said it was like having a running conversation — something he could never again have in real life — with thousands of people from all around the world, with all of the ups and downs that any conversation brings:

“When you think about it, Twitter is something like a casual conversation among friends over dinner: Jokes, gossip, idle chatter, despair, philosophy, snark, outrage, news bulletins, mourning the dead, passing the time, remembering favorite lines, revealing yourself.”

Ebert certainly did reveal himself — as human, and vulnerable, and funny, and smart. That made his fans love him and look forward to his reviews all the more. And that is the power of social media in a nutshell.

Post and thumbnail images courtesy of Shutterstock / FeatureFlash

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Why is it so hard for us to imagine that a site like BuzzFeed could do serious journalism?

April 4, 2013 - 11:22am

BuzzFeed may be known to most for its “viral” posts about dogs who look like Richard Nixon and other ephemera, but the site has been making some significant moves into more serious fare over the past year, a wave that began with the hiring of Ben Smith from Politico. In a recent post at the Poynter Institute, writer Kelly McBride took the pulse of those efforts and also talked with Smith about the site’s ambition to produce long-form journalism. Some members of the mainstream media will no doubt scoff at these goals — but why is BuzzFeed any less likely to produce serious content than a newspaper?

Since it hired Smith to broaden its editorial efforts, BuzzFeed has launched a British edition of the site — as well as new verticals aimed at sports and women — and introduced a business hub (which sparked some imaginative headlines) as well as made a move into longer-form content, such as a feature on the history and evolution of video games. As McBride notes, the site has also done serious investigative pieces about topics such as the failure of the new G.I. bill and the impact of Mitt Romney’s Mormonism on the election.

Serious and entertaining can co-exist

When McBride asks Smith about the dichotomy between the site’s serious journalism and its “viral” entertainment content, the BuzzFeed editor says he thinks drawing that kind of artificial distinction misses the point, since it doesn’t really explain posts like the one about the most inspirational photos of 2011 — which is one of the most-read pieces in the site’s history. Was that post serious journalism or entertaining ephemera? One could argue it was both (and it should be noted that BuzzFeed has been criticized for how it aggregated those photos).

In many ways, a realistic appraisal of BuzzFeed’s chances to become a home for “serious” journalism can only come when we stop thinking of BuzzFeed as a single media animal — the one that is hiring an “animals editor” and asks job applicants for another position to create an instruction manual for making a peanut-butter-and-jelly sandwich — and think of it as a media entity like any other. If the Huffington Post can win a Pulitzer Prize for investigative journalism, why couldn’t its offspring carve out a process for doing that as well?

We like to think of newspapers like the New York Times or the Washington Post as monolithic bastions of “serious” journalism, but the reality is that newspapers have always been a blend of the ephemeral and the important. In most cases, it’s the entertainment column or the fashion feature on a drug-addled celebrity that pays the bills, and allows newspapers to send reporters to Afganistan or undercover to investigate a health scandal. But we ignore those aspects of what they do because we have come to see them as primarily engaged in “serious” journalism.

Read some Sartre, pat a cute dog

BuzzFeed co-founder Jonah Peretti (who was also instrumental in the creation of the Huffington Post) has said that he thinks of what the site does as similar to someone reading a serious novel at a cafe, and then stopping to notice a cute dog — in other words, appealing to the full range of human emotions. And McBride makes a good comparison when she notes that BuzzFeed is a lot like ESPN, a blend of pure entertainment and hard-hitting journalism:

“BuzzFeed’s journalism model is a bit like ESPN’s, an organization I’m familiar with. They both produce a large volume of highly entertaining information, sprinkled with some regular journalism and some high-end stuff. BuzzReads reminds me of ESPN’s 30 for 30 film documentary series, not least because both are produced mostly by outsiders.”

The Poynter writer also points out some of the ways that BuzzFeed needs to improve, including better editing and getting the attention of those in positions of power so that it can actually effect change. If that’s the goal, BuzzFeed may be closer than McBride thinks: a post at National Journal notes that the Republican National Committee is launching a site redesign — and they are doing their best to imitate BuzzFeed. “BuzzFeed’s eating everyone’s lunch,” a spokesman said. “They’re making people want to read and be cognizant of politics in a different way.”

(Note: BuzzFeed president Jon Steinberg will be joining us to talk about the site’s business model at paidContent Live on April 17)

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Douglas Rushkoff is right — traditional media are caught between the stream and the reservoir

April 3, 2013 - 6:00pm

Media theorist Douglas Rushkoff has a new book out entitled “Present Shock,” which is about modern society’s obsession with what is happening now, and how that obsession is exacerbated by tools and technology such as social media. In a recent interview with the Nieman Journalism Lab, he talked about what that means for media outlets such as the New York Times, and how some of these entities are stuck between catering to what he calls “the flow” of the real-time news stream and their traditional status as gatekeepers or storehouses of knowledge.

Rushkoff argues that in a world of always-on, 24/7 news coverage from hundreds or even thousands of different sources, there is even more value in having a single entity like the 6 o’clock news that can pull things together and give people an overview of what happened — as opposed to the constant news crawl of something like CNN. That’s also an argument for newspapers, the author says, but some are caught between these two modes of information delivery:

“The Wall Street Journal has held onto a lot of what the nightly newscast provides… there’s a periodicity to what they’re doing, so they stay anchored in time. The New York Times, on the other hand, it’s so hard to even comment on them, because there are so many New York Timeses happening simultaneously. It’s schizophrenic. I don’t even know how to consume it anymore… I just feel like they haven’t distinguished between that which is fit to print and that which is part of the stream.”

Trapped between the stock and the flow

In his book, Rushkoff talks about the difference between “flowing information” — such as Twitter or Facebook or other stream-based sources — and “stored information,” of the kind that newspapers and books specialize in, where it is fixed in time and remains more or less unchanged. In a nutshell, the author says that newspapers are caught between trying to serve these two very different needs. And it’s not just those companies themselves, but news consumers as well:

“You just can’t use the newspaper to keep up in society any longer. And you can’t use live blogging to make sense of anything.”

Rushkoff isn’t the only one to notice this: for me, the tension between those two modes of information delivery — the real-time stream and the fixed-in-time reservoir — was best described by Robin Sloan, author and former Twitter staffer, in an essay about what he called “stock” and “flow.” Those terms come from the world of economics, where people are used to talking about stored value (such as cash and other monetary instruments, or physical resources) and the real-time fluctuation in the value of those things: i.e., the trading of currency or the sale of goods.

Sloan said at the time that the idea of stock and flow was “the master metaphor for media today,” and I think he was right. We are all caught between the stream and the reservoir — because we want to be part of the real-time flow, but we also want to capture the value that comes from taking the time to analyze that flow. Atlantic editor Alexis Madrigal wrote about this challenge in a recent piece on the life of a digital editor, but it is something we all struggle with, whether we are the New York Times or just someone trying to keep up with the news.

(Note: We’ll be talking with a bunch of smart media types about these and other challenges at our paidContent Live conference in New York on April 17)

Post and thumbnail images courtesy of Shutterstock / Fedorov Oleksiy

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Twitter plays its platform hand, and it is the one holding all the Cards

April 3, 2013 - 1:54pm

We’ve written before about the evolution that Twitter has been trying to engineer over the past year or so — transforming itself from a network with an open ecosystem into one that is much more controlled, a change that has led to much criticism and unease. The latest step in that process came Tuesday, with the launch of new features for Twitter’s “Cards,” which allow certain services to add extra content to expanded tweets. While many developers have greeted them with open arms, the future of Cards as a platform is one in which Twitter is firmly in control, and that comes with some obvious risks.

As my colleague Eliza Kern noted in her post on the new features, Twitter has given third-party apps the ability to add “deep links” to content inside a tweet, so that — for example — if a user includes a link to a photo from Path or Flickr and someone reading that tweet has the Path app or the Flickr app installed on their device, clicking the link launches that app and takes them directly to the content (a link to a download page for the app can also be included).

Twitter can help with app discovery

The benefits of these new features are clear, as Fred Wilson from Union Square Ventures (one of Twitter’s backers) and others have noted. For services like Path, one of the hardest problems is discovery — in other words, letting people know it exists, and also making it easy for users to find interesting content within the app. Twitter’s new Card features provide a potential solution for both of those problems, and since the social network has an active-user base of close to 250 million, it could give some services a substantial boost.

Really excited to integrate the new @twitter cards into @circa. This will be a game changer for app distribution.

—
Matt Galligan (@mg) April 03, 2013

The downside of this approach should also be obvious, however, especially if you notice that among Twitter’s partners for these new features there are names like Path and Flickr, but no Instagram. Why isn’t the largest photo-sharing service included? Because it is owned by Facebook, and Twitter cut off the app’s access to a key feature last year — namely, the ability for users to find Twitter friends who also use the service — and Instagram subsequently removed Card support. The company also cut off Tumblr’s access to the same feature, even though Tumblr was an early partner on the Cards rollout.

This is the fundamental difference between Twitter’s current approach to being a platform and its previous approach. In the early days of the service, up until mid-2011, Twitter seemed happy to be at the center of a more or less open ecosystem — one which allowed virtually anyone to make use of the company’s APIs to display or make use of tweets. Many services and apps (including Instagram) grew by piggy-backing on the network in this way.

Then came what one Twitter investor has called a “holy s*** moment”: Bill Gross — founder of what was then called Uber Media — started buying up Twitter clients (including an attempt to buy Tweetdeck, which Twitter ultimately acquired) and appeared to be preparing to launch his own network, one that would make use of tweets combined with a third-party advertising model.

Twitter’s control is a double-edged sword

These moves by Gross and others posed a clear threat to Twitter’s ability to monetize its growing user base — something that was becoming more and more crucial given the multibillion-dollar market value the company had developed after several rounds of financing. So the company started tightening the screws around its network: restricting access to the API, changing what were display “guidelines” into “requirements,” and generally exerting much more control over who got access to the company’s data.

Such decisions caused a firestorm of controversy in the third-party developer community, with some complaining that Twitter had “killed” their businesses. Now, the company is clearly trying to repair some of that damaged goodwill by offering third-party apps and services preferential access to the network, and features like Card deep links — replacing the open ecosystem approach with one that is more a velvet rope: only official partners allowed.

This approach makes sense for Twitter, since it needs to generate revenue from its network, and presumably intends (or theoretically could) collect fees from partners for the additional features they are getting with Twitter Cards, which can also include music links and other content. And as noted above, it makes sense for apps and services like Path to cut a deal in order to get more reach — but just like building integration into Facebook or Apple or any other controlled ecosystem, developers should be aware this is a double-edged sword.

In other words, such an arrangement will likely look like a win-win so long as Twitter thinks you are beneficial to its network. The minute it sees you as competition, it will suddenly become lose-lose — and whatever you have invested in that ecosystem will vanish.

Post and thumbnail images courtesy of Shutterstock / Ljupo Smokovski and Flickr user Rosauro Ochoa

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Why I admire the OC Register, even though I disagree with almost everything they are doing

April 2, 2013 - 6:34pm

In a post earlier today, I took a look at what the new owners of the Orange County Register have been doing to try and revive the newspaper, based on a long interview I had with co-owner Eric Spitz — a list that includes the hardest of all paywalls, killing off most of the paper’s blogs, and doubling down on print as a source of revenue. Even though I disagree with their approach in almost every case, Spitz and his partner Aaron Kushner deserve some credit for putting their money (a substantial amount of it) where their mouths are.

I confess I’ve been rather fascinated with the Register ever since Spitz and his partner Aaron Kushner acquired it last year and almost immediately started implementing some fairly dramatic changes. Unlike some newspaper owners, they didn’t just start cutting costs to try and save money — the way Advance Publications has with newspapers like the Times-Picayune in New Orleans, for example (media analyst Ken Doctor has called Kushner the “anti-Advance”).

Serve your readers — everything else is secondary

Instead, Kushner and Spitz started spending money on the newspaper, pouring tens of millions of dollars into the Register newsroom — which is now a staggering 50 percent larger than it used to be — hiring reporters and editors, and launching almost a dozen new sections.

However you look at it, that’s a substantial commitment to the principle Spitz and Kushner operate on, which is that serving subscribers is the only thing that matters — not advertisers, not free readers on the web, not the “social conversation” around their content. Just readers who pay. In a sense, it’s a more extreme version of the philosophy that led Andrew Sullivan to launch a subscription-based site with no advertising (although Sullivan, who will be at our paidContent Live conference on April 17, allows for casual web reading).

As a number of media observers — including me — have pointed out, if you are going to put up a paywall, your content had better be exceptionally good. Spitz says he and Kushner are trying to boost the value they are offering to readers by putting resources into the paper (although whether enough people see that value in the same way remains to be seen).

A strong commitment to a vision

If you think of the media industry’s approach to the web as a spectrum, the Daily Mail is at one end, with a totally web-native and non-paywalled strategy: like BuzzFeed or any number of other web properties, the Mail is going to live or die based on viral content, millions of readers and digital advertising. The Orange County Register is at the complete opposite end: no free content whatsoever, a hard paywall and no interest in viral content or social media (readers can always email Register writers if they have something to say, Spitz told me).

To be clear, I think the anti-social aspects of what the Register is doing are bad — not just for the newspaper, but for society as a whole, since discussion around news events has public value, and engaging with readers has journalistic value. And I’m not sure I buy the argument that print-advertising revenue will rebound and even grow if the Register puts more money into the paper. I think the advertising industry is being disrupted just like the media industry is, and I’m not convinced the genie will go back in the bottle quite so easily.

That said, however, at least the Register isn’t trying to suck and blow at the same time, the way so many other newspapers are. Spitz and Kushner aren’t trying a little bit of this and a little bit of that, and hoping that they can be both web-native and print-focused at the same time — they are unabashedly committed to their view, and they are pouring everything they have into it, and that deserves some respect.

Post and thumbnail images courtesy of Shutterstock / Voronin76 and Flickr users 401K and George Kelly

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The Orange County Register’s new owners want to reinvent newspapers from the ground up

April 2, 2013 - 11:39am

The new owners of the Orange County Register don’t have a background in newspapers or journalism: between them, Aaron Kushner and his partner Eric Spitz have built a number of online businesses, including a greeting-card company and one that sells used computer equipment. Despite that — or possibly because of it — they believe they have the solution to the industry’s financial woes. But it’s about more than just putting up a paywall like the one the Register launched on Tuesday, Spitz said in an interview: it’s about fundamentally rethinking the financial model that newspapers have been based on for much of their modern history.

A hard paywall is a cornerstone of that model, said Spitz — who along with Kushner acquired the Register and various associated local papers last year. While many publishers have put up walls that are somewhat “leaky,” in the sense that readers can get in via social-media links and also get a certain number of free articles per month, the Register‘s paywall will be about as hard as they get — non-paying readers get nothing (although they can pay $2 for a 24-hour pass if they don’t want to sign up for a full membership). Says Spitz:

“I fundamentally don’t agree that a newspaper should be in the business of giving away its content to everyone who wants it, regardless of whether they are paying for it — McDonald’s doesn’t give away its burgers, and Boeing doesn’t give away airplanes. When it comes to life and death matters (fires, floods, earthquakes) we have built a mechanism where we can unlock any article and any section, and we will do that as a public service. But do I believe as the owner of a newspaper company that I have a public duty to give my content away for free? I absolutely do not.”

Content is for paying customers only

As part of its commitment to charging for all of its content, the Register has also cut back dramatically on the number of blogs written by reporters or editors on various topics: according to Spitz, the paper used to have over 100 and it killed all but 10 of the most popular ones, a move that at least some of the paper’s writers don’t seem all that pleased with. But the Register executive said it is part of the fundamental focus the paper’s owners have — which is that the only thing that matters is the subscriber, not the advertiser or the larger social “conversation” around the news.

But doesn’t blogging and using social media to engage with readers have value apart from just driving traffic to the website? Doesn’t that have value for journalism and the media in general as well? Spitz says he isn’t convinced:

“If you’re asking me whether I’m a big fan of crowdsourcing and open interaction between the writer and the audience, I wouldn’t say it’s the best thing in the world. Journalists get their information from lots of different places, but do those conversations need to be out in the open through what we call social media? I’m not convinced… I don’t know that I get a whole lot of value from one of our reporters tweeting something so that someone can read our stuff who is not a subscriber.”

Investing in the product is crucial

Unlike a number of newspapers that seem to have thrown up paywalls more out of desperation than anything else, without investing much in the content, Spitz says he and Kushner believe that in order to justify charging for their content they have to make it worth paying for — so the pair have invested tens of millions of dollars in hiring new reporters and editors, launching over a dozen new sections for the paper (both online and print) and adding other features. Spitz says the head count at the Register has increased by more than 300 people — or close to 50 percent since the pair acquired the company last summer — and the number kf newsroom staff has increased by close to 60 percent.

“Our fundamental insight is that the business itself in the newspaper space has been operated for 75-plus years as an advertiser-first, subscriber-second business. We think that’s incorrect, and that they should be run as a subscriber-first, advertiser-second business — and when you make that shift, you see that a lot of other decisions fall from it. The last thing you want to do is cut off more eyeballs if you’re in an ad business. But if you change that foundation and say it is really a subscriber business, then the first thing and the second thing and the third thing you think about every morning is how do I deliver more value to subscribers.”

Spitz and Kushner have also launched a number of features aimed at making their subscribers — whether in print or online — feel special. So in December, every subscriber got an envelope containing a check for $100, which they could donate to whatever charity or interest group they wanted in exchange for free advertising in the paper. Spitz says that move alone cost the company $12.5 million.

If there is value, advertisers will see it

But doesn’t relying more and more on subscriber revenue mean that a newspaper like the Register is doomed to shrink, since advertising revenue — both in print and online — continues to decline? Not necessarily, says Spitz. Unlike the vast majority of industry insiders and observers, the Register‘s owners believe that not only can the decline in print advertising revenue be arrested but revenue from print ads can actually increase, provided advertisers see the kind of engagement they want from readers who are paying for the product.

“Fundamentally, we don’t agree that it is the natural course for print revenue to decline, in fact we think that is at the heart of the problems in the industry… we are modelling for significant increases in print revenue for 2013, and we’re on budget for that for January and February… we believe that as you have more and more engaged subscribers, advertising becomes more valuable.”

Spitz admits that to some extent the Register is unique, since it is one of the few large-scale regional newspapers that doesn’t have much competition from local TV networks and other sources. And he says the model that the paper is relying on also might not work for national newspapers and other outlets, since there are so many free sources of similar content such as CNN. “While I’m a hard paywall advocate, I think it’s smart for USA Today not to go to a paywall — their content is just not differentiated enough,” Spitz said.

It’s more than a little ironic that the two men who seem to be the biggest fans of print and the biggest proponents of making people pay for news aren’t even from the industry, and have never worked for nor run a newspaper. But can they fight the forces that have driven many of their newspaper-owning colleagues into despair, and in some cases financial ruin?

Post and thumbnail images courtesy of Flickr users Arvind Grover and Rosaura Ochoa and Shutterstock / Daniilantiq

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Henry Blodget says Business Insider is growing, but it’s still losing money

April 1, 2013 - 11:48am

When Business Insider founder Henry Blodget opened up about his website’s traffic and business model a few months ago, we noted that he didn’t reveal the most important thing about it — namely, whether it was profitable. And now we know why: a profile of the former Wall Street analyst by New Yorker writer Ken Auletta says the site lost $3 million in 2012, or about a quarter of the revenue it pulled in, most of which came from online advertising. So if there is a recipe for how to create a profitable online publisher, Blodget doesn’t seem to have discovered it yet.

Update: The Business Insider founder said on Twitter that the site turned a small profit in the first quarter, although he wouldn’t say how much.

@mathewi Don't have exact numbers yet (quarter just ended). More than we made in 2010 ($2k). Not enough to pay us like TV talent (sadly)

—
Henry Blodget (@hblodget) April 01, 2013

Much of what Blodget says about his business to the New Yorker also appeared in the slide presentation he published as part of his experiment in “opening the kimono,” as he described it. The site has about 24 million unique monthly visitors, according to Google Analytics, which puts it ahead of traditional outlets like the Financial Times and BusinessWeek — although comScore says it only has 9 million (Blodget says the discrepancy stems from BI’s large non-U.S. audience).

On Twitter, Blodget called the $3 million worth of red ink that Business Insider racked up in 2012 an “investment” rather than a loss. According to the New Yorker piece, the site has only spent about half of the $13 million it has raised in financing, which came from investors like Kevin Ryan (Business Insider’s chairman and co-founder of the Gilt Groupe) as well as IVP and Marc Andreessen. Ryan tells Auletta that for $7 million “we’ve created the new Wall Street Journal.”

Although Blodget mentioned in his recent presentation that programmatic ad buying and other forces are putting increasing pressure on advertising returns for publishers, the New Yorker piece says about 85 percent of Business Insider’s revenue still comes from ads, with the rest coming from conferences and its proprietary research arm. The site has also been experimenting with various forms of “sponsored content,” including sponsor-focused slideshows.

Not "lost!" Invested! And, yes, about to fill out AARP card RT @emilybell @pkafka... BI lost $3m last yr, HB is 47. allthingsd.com/20130331/henry…

—
Henry Blodget (@hblodget) April 01, 2013

Blodget describes the site’s approach — which focuses primarily on short, newsy pieces that often feature salacious details about and/or slideshows of celebrities — as being “halfway between broadcast and print,” and tells Auletta that it is designed to be “conversational.” He also argues that the model of aggregating content from other sites is sharing rather than stealing, although others have disagreed about that interpretation rather strongly.

And what does the future hold for Business Insider? An unidentified board member tells Auletta that he expects the site to be acquired, and Blodget says it “either will become part of a larger enterprise or become the larger enterprise.”

Bonus fact: Blodget, who played tennis while at the upscale Phillips Exeter Academy, plays doubles with his father — a successful banker — and the two were recently ranked nationally in the Super-Senior Father/Son Tournament.

Post and thumbnail image courtesy of Flickr user TechCrunch

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Museums and the web 2013

Giga.com [Matthew Ingram]

Takeaways from paidContent Live: Paywalls, sponsored content and massive disruption

Podcast: How Joey Coleman crowdfunded his work as a hyper-local reporter

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Douglas Rushkoff is right — traditional media are caught between the stream and the reservoir

Twitter plays its platform hand, and it is the one holding all the Cards

Why I admire the OC Register, even though I disagree with almost everything they are doing

The Orange County Register’s new owners want to reinvent newspapers from the ground up

Henry Blodget says Business Insider is growing, but it’s still losing money

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