News Corp. – Nieman Lab

I have come to bury Knewz, not to praise it

Joshua Benton — Wed, 14 Jul 2021 16:00:22 +0000

Knewz is dead, and shame on anyone who bought even a sliver of the hype. It’s standard marketing practice to pump up your new product — revolutionary! transformative! — but Knewz set a new bar for empty boasts backed by product nonsense.

For those of you blessedly unfamiliar, this terribly titled site was a dull knewz, er, news aggregator from Knewz, um, News Corp, first teased in 2019 and launched 18 months ago. What was its angle? Here’s the press release from its launch, reduced and rendered as PR blank verse, the poetry of bad ideas.

The thing is, News Corp knows how to get “more leverage in its relationship with Google and other platforms.” It’s the oldest publisher m.o.: Gain enough power through your editorial page and news slant to convince politicians it’s easier to do your bidding than to cross you. Hey, it just worked out great in Australia! (Said News Corp CEO Robert Thomson: “Particular thanks are certainly due to the Australian Competition and Consumer Commission’s Rod Sims and his able team, along with the Australian Prime Minister, Scott Morrison, and Treasurer Josh Frydenberg, who have stood firm for their country and for journalism.”)

“News will be transformed by Knewz”

Eighteen months later, I think we know how this one turned out.

Look, if you want to make a mediocre conservative news aggregator, make a mediocre conservative news aggregator! If you want to make OnlyFans and teachers behaving badly your core beats, fine! But don’t cloak it in fairy tales about fighting the platforms and helping the little guy and battling clickbait and bias.

In the comments, please leave your own take on what Dow Jones CEO Robert Thomson is saying here. Is “nous” used here in the “term from classical philosophy for the faculty of the human mind necessary for understanding what is true or real” sense? Is it the French nous, meaning “we”? If, presumably, it’s the former: British pronunciation or American? Is “nous” supposed to rhyme with “Knewz”/”news” or “house“? Or has Knewz been pronounced “nowss” all this time? Thomson is Australian, if that helps.

Newsonomics: Will Facebook’s new news tab be a milestone or millstone?

Ken Doctor — Sat, 26 Oct 2019 19:26:24 +0000

Is Facebook a cesspool of bottom-feeding content? Or is it now the proud leader among platforms in featuring and rewarding high-quality journalism?

Or…both? We’ve got a new breakout of platformitis, as news companies try to figure out their complicated relationships with the dominant digital companies of our day.

As Mark Zuckerberg and News Corp CEO Robert Thomson finished up their conversation at New York City’s Paley Center Friday afternoon, announcing the new Facebook News tab, we can take five big points out of this week in Facebookology. For Zuckerberg, it was the culmination of a week from hell. Just within the past week, he had to juggle: (1) advancing its controversial cryptocurrency, (2) taking down “fake” editorial content, and (3) allowing politicians’ ads with falsehoods to remain. As Thomson said to him in what came across as a fairly softball on-stage talk, “It’s unusual when the amuse-bouche comes at the end of the meal.”

This is a milestone in publishers’ quest to get paid for content.

No doubt, the numbers in this deal get attention. News Corp, of course, most likely does the best (see “Rupert always rises to the top,” below), with millions in new revenue. These two- and three-year deals (guaranteed, I understand, even if Facebook nixes the program earlier) will send low millions to some national publishers, maybe half a million a year to a relative few local ones, but only the promise of traffic-generating links to many of the 200 or so other (almost all U.S.) publishers in the initial rollout.

Only the Facebook Live payments are at all comparable in terms of cash payments to publishers for content. And those required lots of original work by publishers; these deals don’t.

And that’s potentially a big milestone here. News publishers will now say that when it comes to paying for content, it’s no longer “whether” but “how much.” (Of course they’d like hundreds of millions or billions to soothe their advertising losses to digital disruption.) They also like doing deals where the dollar amounts are relatively transparent, in which the platforms don’t have to bet on revenue shares of subscriptions or ads sold. This is the big story to watch into the next couple of years.

Zuckerberg is already trying to get out ahead of that in multiple ways. “I don’t pretend that any of these steps will be enough,” he told Thomson, saying Facebook itself couldn’t solve publishers’ problem. But with more than $7 billion in profit, that may be a bit of an overstatement. “Can” may be the wrong verb here.

Curiously, though, Facebook isn’t actually “licensing content.” The experience, as we so far understand it, includes a headline and precis linking back to publishers’ sites, all presented in a stream in Facebook’s new News tab. Isn’t that fair use, what aggregators and platforms have been claiming for two decades?

It’s fairly clear that it’s the currency that motivates the publishers, but what’s the value here for Facebook? It may be more than meets the immediate eye. There’s an engagement value, to be sure; news comes from that simple root “new,” and it drives lots of eyeballs. That’s why Facebook and its platform peers all keep taking new tries at the news biz. Eyeballs are good and lead to monetization.

Then, there’s the softer, behind-the-scenes reasons. “It strikes me that they are front-running the European ‘snippet’ idea,” says one savvy newspaper insider. “We all know that most people are only going to consume the headlines and the snippets, and they’re buying the goodwill of the publishers to participate in the effort.”

Yes, the EU’s taking on of the platforms’ power is starting to inform U.S. behavior. That takes into the political dimension of this agreement, one that somehow got little mention in the Zuckerberg/Thomson conversation.

What looks like an oasis could be political quicksand for Facebook.

Call it a shotgun marriage of convenience, perhaps. The news industry needs money — badly. Facebook needs a better story.

It’s under the gun across the U.S. and in Europe. It just agreed to pay a $5 billion fine for its data privacy violations, and it’s just about impossible to even list all the other fronts of questions. And Elizabeth Warren’s break-them-up campaign has sent a new chill through Silicon Valley. All the big platforms, the GAFA (Google, Apple, Facebook, Amazon) named years ago, find themselves in the crosshairs. But given Facebook’s role in the 2016 election and its more complicated “social” nature, Zuckerberg’s company has gotten a greater share of attack.

So this is part PR. Don’t look at the cesspool over there, which we’re cleaning up, says Facebook. Look at all the high-quality news we now proudly pay for. Here’s the new shiny object.

Of course, there could also be this calculation: Publishers may be less inclined to focus on reporting Facebook’s bad side if they see its good one up close and personal. Editors and reporters, of course, would recoil at such a thought, but we can see how Facebook could see it that way — and how it might be right around the edges.

But does Facebook risk marching into new political quicksand Facebook? Remember just three years ago, when Facebook fired its editors who, guess what, curated the news, after Republican House members went ape on them in hearings?

“200 publishers” sounds good. But which 200? The inclusion of Breitbart as a partner (along with the much larger and Murdoch-owned Fox News) has already gotten some on the left fuming. What about preference and placement in the feed? Who decides? Human editors? Algos? Who trains the algos? Round and round we go. It’s a question that a Facebook or any other aggregator can’t answer — unless it’s a journalism company. Which it isn’t.

This is a battle for phone-centric news.

Swipe right? Tap the G icon? Find the new Facebook news tab and touch it? Launch a news app, scroll through Twitter, wait for a news alert? The options for news on our phones can be dizzying. Whose story is this again? How did I get here? Whatever, we think — let’s just read.

That’s the attention battle newly joined by Facebook. Google and Apple both have led with different flavors of news aggregation. While Facebook’s two major competitors here both own most of the hardware, they must still fight their way into readers’ attention. Will the News tab do it, or will it go the way of other Facebook news products, fading away slowly or quickly?

To the degree that any or all of the newest news aggregators — a practice that goes back to Yahoo at the end of the last century — succeed, to what degree are publishers trading their destination businesses for distribution businesses? That’s much more than a monetary question; it’s an existential one. If reader relationship is the gold into the 2020s, what does this new phone-centric aggregation world really portend?

Local remains a stepchild, but a taller one.

“I do think local news has been hit the hardest by these changes,” Zuckerberg said, acknowledging reality. A number of local providers — McClatchy and broadcaster Graham Holdings among them — are in the new News Tab program. Those are largely in Top 10 markets. “Working with the top 200 news organizations in the world” has been Facebook’s first priority. “Figuring out how to work with all the little ones is going to be critical.”

That’s been true for a while and is universally true among platforms. Executing many small agreements does take a lot of time; integrating more feeds of lesser volumes of content is less economical. Especially for companies who like to start their counting of anything — money, metrics — in the billions. Local content may be high value, but it’s low reach. An alert out of D.C. these days can catch everyone’s attention, but local stories are useful to far fewer. That’s where personalization will come in, hopefully.

Rupert always rises to the top.

Rupert Murdoch and Robert Thomson deserve credit for their early and continued drumbeat calling for platforms and aggregators to pay for the valuable journalistic content they use. And Murdoch, as always, manages to combine wider objectives — like helping lead the industry to get money out of those who have more of it than even he does — with enriching his own company. By most reckoning, his News Corp and Wall Street Journal are receiving the sweetest deal, the greatest payment, from Facebook for this news tab deal. (And the Journal secured one of two top spots in the earlier launched Apple News+.)

Who else are Rupert and Robert talking to, and what may those conversations yield — for them and the industry?

Facebook launches its “test” News tab in the U.S., but you may not see it yet

Laura Hazard Owen — Fri, 25 Oct 2019 10:00:27 +0000

It’s heeeee-ere: On Friday, the Facebook News tab we’ve been hearing about since the summer became reality, launching today to some users in the U.S. with “local original reporting by surfacing local publications from the largest major metro areas across the country, beginning with New York, Los Angeles, Chicago, Dallas-Fort Worth, Philadelphia, Houston, Washington DC, Miami, Atlanta and Boston.” Facebook is calling this a “test,” and you may not see the tab — which for now is only on mobile — yet; about 200,000 U.S. users can see it now.

Facebook isn’t offering a full list of the publishers it’s working with, but here’s a sample (from which Vox Media is notably missing): The Boston Globe, The Washington Post, The Los Angeles Times, The Dallas Morning News, The Chicago Tribune, Gannett, USA Today, McClatchy, BuzzFeed News, Business Insider, Bloomberg, The Atlantic, Forbes, National Review, The Washington Times, Condé Nast, NPR, CBS, ABC, NBC, Breitbart, and News Corp, including, yep, Fox News. (News Corp CEO Robert Thomson appeared Friday with Facebook CEO Mark Zuckerberg at an event with New York to announce the new product.) The Washington Post reported this week that 200 publishers are participating as of now. Facebook will honor publications’ paywalls; you’ll still need subscriptions to many of these outlets to read beyond a limited number of stories.

This is a huge moment for our relationship with the news industry. I know people have doubted us and our commitment to journalism but today should signal that we truly want to be a champion for great reporting. https://t.co/ygkltJHiXY

— Campbell Brown (@campbell_brown) October 25, 2019

Facebook’s new section of “trusted” news sources will include Breitbart, a website that featured a section on “black crime” and laundered white nationalist talking points https://t.co/TSxjca3IVG

— Judd Legum (@JuddLegum) October 25, 2019

It had been unclear whether The New York Times was in, but the Times itself seemed to confirm that it will be, at some point: “Facebook News will offer stories from a mix of publications, including The New York Times.”

Zuckerberg told the Times, “We feel acute responsibility because there’s obviously an awareness that the internet has disrupted the news industry business model.”

Facebook will pay publishers, including @nytimes

What’s more notable is this rare mea culpa from Zuckerberg:

“We feel acute responsibility because there’s obviously an awareness that the internet has disrupted the news industry business model,” https://t.co/n4Q82A4vHr

— Edmund Lee (@edmundlee) October 25, 2019

'When news is deeply-reported and well-sourced it gives people information they can rely on. When it’s not, we lose an essential tool for making good decisions.' It really is very hard to take this at face value in the context of the political ad policy https://t.co/wpxbfmb5P0

— Chris Moran (@chrismoranuk) October 25, 2019

Facebook stressed that it during this first test it will “showcase local original reporting by surfacing local publications from the largest major metro areas across the country, beginning with New York, Los Angeles, Chicago, Dallas-Fort Worth, Philadelphia, Houston, Washington DC, Miami, Atlanta and Boston” — it’s a little unclear where publications like Business Insider and BuzzFeed News fit into that although I guess they could be slotted into New York pubs.

Some, but not all, of the publishers are being paid licensing fees to participate, in amounts that reportedly range as high as $3 million a year for the large national publications to “several hundred thousand dollars a year for regional publications,” The Wall Street Journal reported this week — but most, including, presumably, the small local papers that might need it most, aren’t getting paid at all. (This morning, the Journal noted that Facebook was offering “substantially more [than a few million] for the very largest outlets, according to people familiar with those talks.” News Corp’s deal will bring in “double-digit millions of dollars annually.”)

Thompson puts Zuckerberg on the spot and asks whether FB can pay local papers. He touts the separate product they've been developing: Today In, a local tab. He says he hopes to have financial relations there. Then he touts FB's $300m commitment to news.

— Jeff Jarvis (@jeffjarvis) October 25, 2019

The tab has some human-curated news: The “Today’s Stories” section is chosen by a team of “seasoned journalists” — independently and “free from editorial intervention by anyone at the company,” Facebook says, but chosen according to the guidelines here — among those guidelines:

Facts: The stories and headlines should aim to represent the people and events that took place, with information-rich supporting material, including figures and quotes (when applicable).
Diverse voices: Stories should include a diversity of voices, where relevant and especially concerning topics with multiple perspectives. Stories should be sourced, with few exceptions, from publishers who meet our inclusion criteria. Publishers will rarely appear more than once at any given time in each Today’s Stories unit.
Original reporting: Wherever possible, the team will prioritize original reporting, whether that means breaking the original story, or building on it. (Original defined as: a publisher has published new information or media (ie, interviews, photos) that no other outlet has).
On-the-record sourcing: The team will aim to prioritize stories with on-the-record sources rather than unnamed ones when two stories are otherwise equivalent. Curators will aim to prioritize stories with original supporting documents.
Timeliness: The team will work to ensure the most recent version of a story appears.
Depth and context: Curators will prioritize stories that include the most depth and context, including quotes, research, historical context, maps and data-visualizations where relevant.
Fairness: For heavily debated topics, curators will aim to curate stories that represent multiple perspectives on the issue.
Local reporting: The team will aim to prioritize coverage from local news organizations, if the publisher covers the area impacted by the news and its coverage is accessible to a national audience.

Mostly, however, the content is chosen by algorithm, with a personalized section that should theoretically get better the more you use it. There’s a top stories carousel up top and news arranged by topic (business, entertainment, health, science and tech, and sports — notably, politics is missing), a “Your Subscriptions” section “for people who have linked their paid news subscriptions to their Facebook account,” and controls to let users customize what they see and hide publishers, topics, and articles they aren’t interested in.

One thing you won’t see here: Video. “Video will not be available in the launch version of the news tab,” Facebook says in its FAQ, “but we know the importance of video to our consumers and to publishers and will be working to add video capabilities in early 2020.”

This is an insanely cynical take, but it's not hard to see that the media extra-distrusts Facebook because Facebook forced a generation of media companies to pivot to video and Instant Articles without any revenue plan at all, and then walked away without any consequence

— nilay patel (@reckless) October 24, 2019

Reminder that

a) ~90% of Facebook users are outside the US
b) FB News so far US-only pilot, with few dozen partners
c) US is home to ~1,200 daily newspapers, 600+ TV networks, 15k+ radio stations, and many digital-born outlets

So let's see how this works out for everybody else https://t.co/OZRuHvF9LJ

— Rasmus Kleis Nielsen (@rasmus_kleis) October 25, 2019

Anyway, I understand why FB did this. They rightly realize that a lot of media coverage is explicitly (Murdoch) or implicitly (NY Times OpEd on ad revenue) driven by cash flow. But the blending of curated, paid news with UGC is going to lead to some really bad policy outcomes.

— Alex Stamos (@alexstamos) October 25, 2019

All in all, CNN would rather be the one who knocks

Joshua Benton — Wed, 23 Oct 2019 15:48:59 +0000

If you ever watched “Breaking Bad,” you probably remember the fictional fast-food chicken chain Los Pollos Hermanos, which served both as both a front for Gus Fring’s illegal activity and Metro Albuquerque’s top source of delicious curly fries. Taste the family!

With a new spinoff movie now out on Netflix, someone had the bright idea to change Los Pollos Hermanos from a plot detail into an actual chicken restaurant. Starting tomorrow, you’ll be able to open up the Uber Eats app on your phone and order real food from the once-fake restaurant: Pollos Tenders, Fring Fries, or the ABQ Hot Chicken Sandwich, which sounds delicious even before you get to the side of Slaw Goodman it comes with.

(Well, you’ll be able to do it in Los Angeles, with expansion coming to elsewhere in California, Nevada, and Illinois soon. No word on when it might be available in To’hajiilee, Abiquiu, or New Hampshire.)

The twist here, though, is that Los Pollos Hermanos won’t be a normal fast-food restaurant, the kind with locations at high-traffic intersections, a drive-thru, and plenty of parking. It’ll be a ghost kitchen — a delivery-only brand affectation that connects hungry people using an app to an anonymous kitchen frying chicken.

“Little did I realize this could be accomplished without building an actual brick-and-mortar restaurant,” show creator Vince Gilligan told The Hollywood Reporter or, more likely, whoever was typing the press release. “Yay, technology! Smart phones actually are good for something!”

I thought about Los Pollos Hermanos when I read this piece in The Information: “CNN to Launch Digital News Service to Compete With Facebook, Apple.”

First there was Knewz, now there is “NewsCo.” Media companies are ramping up their efforts to take on Facebook and Apple with digital news services.

Just a few months after Rupert Murdoch’s News Corp. announced it was developing Knewz.com, a news aggregation service offering articles from a wide range of outlets, CNN is jumping in with its own offering. Not yet named, but referred to internally as “NewsCo,” CNN is discussing paying news organizations to feature their content on the platform, which will likely be a mix of subscription-based and advertising-based content, according to CNN digital chief Andrew Morse.

In other words, CNN desperately wants to avoid becoming Los Pollos Hermanos — a valuable brand that, instead of engaging directly with consumers, gets reduced to being just a tiny icon in someone else’s app, the place where all the money gets made.

In the food business, the aggregators are apps like DoorDash, Uber Eats, Postmates, and Grubhub. In the news business, they’re Apple News, Google News, Facebook News (set to be unveiled Friday), and all the other tech giants’ efforts to package publishers’ stories for users.

Despite all the variation between them, each of those apps offers some version of a new front door for news: a bunch of different stories from a bunch of different outlets, assembled through some combination of human editing and algorithmic personalization, and optimized in whatever way most aligns with the company doing the optimizing. For each, the brand equity of the publisher — “Did you read that story on The New York Times?” “Did you see that on CNN?” — is sublimated to the brand of the tech company. And publishers don’t like that — switching from news outlets to wire services, from restaurants on every corner to anonymous kitchens in the warehouse district.

So why is the Los Pollos Hermanos scenario so bad for a CNN or a News Corp? After all, the potential benefits for chicken-slingers are clear: Finding land for and building out dozens or hundreds of restaurants is super expensive, and renting space in an industrial kitchen isn’t. Just as buying a giant printing press, hiring a newsroom, dealing with advertisers, and distributing tons of newsprint every morning was super expensive — and just as starting a news site isn’t.

Today, a wave of ghost kitchens and virtual restaurants are betting that keeping production costs low and riding on delivery apps’ distribution can build a great business. A few years ago, a wave of content mills, aggregators, and other digital-native publishers made the same bet, lowering the cost of output and counting on Facebook shares and Google searches to provide the distribution.

For an awful lot of them, that bet didn’t work out. Google could change its algorithms; Facebook could turn the traffic dial up or down as it pleased. Emphasis shifted from cheap scale to something smaller, higher quality, and more direct, as seen primarily through the wave of paywalls we’ve seen go up.

Into this situation walks CNN, or News Corp, or any other news company that has a high-cost model of production and fears becoming that icon in someone else’s app. They don’t want to become mere suppliers to the tech titans. They want to own the customer relationship. And hence NewsCo and Knewz. Check out this podcast interview with CNN’s Morse from just a month ago:

CNN is also proceeding cautiously in its partnerships with social media giants like Facebook, which Morse regards as competitors as much as they are collaborators.

“It’s pretty hard to look at them and not see a media company, and the same with Apple,” he said of Facebook. “And the reality is I don’t think we should cede the ground in the news business to Facebook or Apple. I think the stakes are too high. I think they’ve let down audiences, I think they’ve let down advertisers, I think they’ve let down journalism. And no matter how many task forces and how many reporters they hire, it doesn’t change the fact that’s not their core business.”

To get my prediction on the record: I don’t think NewsCo and Knewz are going to work. Dumb names aside — at least NewsCo is clearly a working title, can’t say the same for Knewz — it is going to be very hard to get large numbers of people to create new app habits for news on their phones without the cachet of a prominent news brand. Even the most prominent and premium of publishers have found that their app users are their superusers, the most dedicated consumers of their work. The people who specifically seek out news on phones — not the ones who let news occasionally bump into them via alerts or a random Facebook post — tend to be people who have preexisting opinions about where they want to get it from. Knews and NewsCo are much more about satisfying the strategic needs of their corporate owners than about satisfying the information needs of actual users. For them, the value proposition — “a bunch of news stories, but in a different app than the one that comes preinstalled on your phone or the one where you choose all the sources to follow or the one all your friends are on” — is pretty muddled. Maybe they’ll surprise us all with a brilliant angle; probably not.

But you can see the frustration that leads to attempts like this. As Walter White himself could have told you, it’s not just about having the best product — it’s also about controlling distribution. Your meth could be the best in the West, but you still need someone to get it to market and to your best, er, users.

Google’s news chief Richard Gingras: “We need to rethink journalism at every dimension”

David Skok — Thu, 10 May 2018 14:11:47 +0000

In the shadows of the Cambridge Analytica scandal, the public’s trust in news, and the platforms that distribute it, is at an all-time low. As big tech seemingly scrambles to restore users’ confidence in their platforms, Google is introducing new ways to streamline the subscription process for digital news-readers. I sat down last week with Richard Gingras, the longtime vice president of news at Google, to discuss the company’s new Subscribe with Google feature, the open web, data privacy, and the search giant’s role in the future of news. What follows is a lightly edited transcript of our conversation.

There’s an interesting publication in Bristol, England: The Bristol Cable. They don’t have marketers on staff, they have community organizers on staff and they go out and they arrange town halls and they’re trying to assess the needs and interests of their community, they’re trying to figure out how do they engage with their community. Because if you are going to get people to buy something you have to understand their value proposition and the value proposition [today] isn’t the value proposition of 40 years ago.

So how do you understand the community’s needs? How do you address those needs? How do you rethink what the very nature and form of journalism is in this day and age? How do the contracts evolve in an environment where we’re all snacking off our cellphones? To what extent do narrative styles have to change? To what extent is it more immersive, or less immersive, or whatever? To what extent can data journalism become a stronger part of what we do, so that we’re not just covering news through stories and anecdotes but providing additional context to help people understand why something is important or not important to them? As we deal with these challenges, all of us as institutions — including Google, including the press — have to really rethink what our roles are in this very different world.

One of my concerns when I look out there at what happens in the world of news is disproportionality. You’ve got the British Parliament attack in London and our cable news networks in the United States go wall to wall with it for three days. A sad event — four people died. [Five, plus the assailant. —Ed.]

On those same three days, there were mass murders of four or more people that didn’t get covered. We have people going to the polls living in a farming community in Iowa concerned about terrorism, not understanding what the real needs and interests of their communities are. Can we not use data journalism to rethink that?

What I’ve suggested metaphorically is we give people data every day in the weather report. Can we create a weather report for our communities? If I’ve got a membership-supported community news organization — where I’m not so concerned about every click, because they’re not paying for access, they’re paying because they believe in your mission. Why is it not that, where that “weather report” gives me a sense of my community beyond the meteorological? Does it give me a sense of the crime rate in my community and why it’s different from other parts of my world? The air quality index, graduation from schools, so that I can get a better sense of what’s real and what’s not. My own personal favorite definition of journalism is to give citizens the tools they need to be good citizens: to give them the information they need to when they go to the polls to make smart decisions about what’s important for their communities and that’s not what’s happening today.

These are hard, hard problems. And particularly in an environment where we’ve got increasing trends towards populism and we’ve got politicians who degrade everything that the people in this room are doing.

We have to address these things. And just to continue my rant one more time, yesterday was World [Press Freedom] Day and it was a fabulous event celebrating the value of journalism, celebrating the quality of journalism. Telling stories about how the stories were covered, interspersed with music, emotionally resonating the themes of what we do. That was so powerful, and I came to Canada from the States where two weeks ago we had this ludicrous event called the White House Correspondents’ Dinner.

I have no issue with Michelle Wolf as a comedian doing what she did, but why would we take that platform — an opportunity to guide people in the value and values of journalism — and not do tit for tat with politicians looking to tear you down? We really have to rethink these things, all of us, really, pushing forward. What are the models we want to see, including tech platforms like Google?

I was a founder of The Trust Project for pushing on the architecture of journalism. Can we be more transparent, can we give people a better sense of what they’re seeing? Media literacy training is important, but can you design a new site that actually doesn’t need a user manual to tell you what you’re seeing, tell you what’s fact-based coverage versus opinion? And I transfer that to Google today, to our experience, as well — how do we evolve our user experience so people understand what they’re seeing? If you can find anything that’s findable in the corpus of expression, I don’t want you believing that every result you see is truth just because we surfaced it for you.

Skok: I agree with everything you said, but one small asterisk that I’d put there is that part of that is driven by the incentive structure. From my experience, what happens in the newsroom is a direct result of what happens in the boardroom. For decades, but particularly in the last 10 to 15 years, the boardroom decisions have been driven by scale and they’ve been driven by reach and a lot of that is…not Google’s fault, but Google has provided a tool —

Gingras: Let’s be honest with ourselves. Because that’s not valid. I mean as in that didn’t start with the internet, right? Frankly, you can go back to tabloid journalism in that regard. I mean, you know, what bleeds leads. Give me a break. These are important issues for society, but when I hear people say “oh God, Facebook is causing your addiction,” I go wait a second — we’ve been driving addiction with media since the day we started producing it.

Skok: I’m not saying that you are responsible —

Gingras: No, I don’t say it with that intent. I have no problem with people criticizing us for what we do. I’m just saying let’s look at the questions on a larger scale and understand what’s really going on because it ain’t as simple as that.

David Skok is the CEO and editor-in-chief of The Logic, a new Canadian news publication providing in-depth reporting on the innovation economy.

Photo of Skok and Gingras speaking at the Canadian Association of Journalism’s annual conference May 4 by Nick Iwanyshyn.[/ednote]

Newsonomics: The New York Times’ Mark Thompson on regulating Facebook, global ambition, and when to stop the presses (forever)

Ken Doctor — Mon, 13 Nov 2017 16:24:07 +0000

Five years is a long time, especially in the media business.

It was five years ago this week that Mark Thompson took on the top job at The New York Times Company. It was an enterprise still wobbling from the effects of the Great Recession, its new paywall only a year old. The Huffington Post was trumpeting that it had surpassed the Times in digital traffic — a recognition of Google’s market power and of Facebook’s emergence.

The Times was a shrinking enterprise. It had shed revenues, profits, staff, and share price. It had also shed its previous CEO, Janet Robinson. Publisher Arthur Sulzberger’s pick of Thompson to replace her surprised many; despite having led the BBC’s ongoing transition to the increasingly digital world, Thompson had no publishing management experience. And he was a Brit, plucked out of London to head America’s flagship newspaper company.

Half a decade later, the Times is on surer footing, thanks in large part to its execution of Thompson’s mantra: subscriber-first. Most newspaper companies have now embraced revenue from readers (rather than advertisers) as a priority, but the Times is the global leader in that quest, with more than 2 million digital news subscribers. Still, the finish line for that transition is still some distance away.

Heading into 2018, Thompson can at least take a deep breath or two. After years of turning the Times’ business on its advertising/circulation head, he can now point to two words that have eluded its industry for a decade: revenue growth.

Year-to-date through September, the Times has managed to grow revenues 6.8 percent. Each of its three quarters has seen growth, at 5.1 percent, 9.2 percent and 6.1 percent. Repeating that feat in the fourth quarter may be more problematic, the company says, but even so, the Times will look back on 2017 as a turning point. It may not have built out a new business model for the 21st-century press, but it, along with the Financial Times, has served as the leading engineers. Consider these data points:

Print advertising — which used to make up 75 to 80 percent of all Times revenue — now accounts for only 17 percent of its total. Within the next year or two, he told me, it will likely be the Times’ fourth-largest revenue contributor, behind print subscription, digital subscription, and digital advertising.
The Times counts 2.1 million digital-only news subscribers, still growing post-Trump-bump at about 100,000 a quarter. Compare that to the Times’ still-strong (though declining at about 3 percent a year) Sunday print sales of 1.1 million, and we see a curious ratio. Digital payers now outnumber print payers about 2 to 1.

Reader revenue — both print and digital — now makes up 62 percent of all Times revenue, as compared to about 44 percent when Thompson took the job in 2012. That crossover number serves as its most important one. As print advertising continues its epochal decline — even the Times was down 20 percent in print ad revenue in the third quarter, in the general neighborhood of many other newspaper chains — nearly everyone in the news publishing business is turning back to readers as their likeliest source of future funding. But the Times (along with other advanced nationals like the FT, The Wall Street Journal, and probably the privately held Washington Post) is among the few publishers who now see more revenue from readers than advertisers. Meanwhile, much of the daily press can’t imagine achieving overall revenue growth, because its reliance on print advertising counterbalances whatever success it may have in the digital transition.

Thompson and other Times executives don’t want to disclose much about their own future modeling. But one thing we know: The company can envision a future without print.

As Thompson told me last week, the Times “may well be facing a future where you should set printed revenue at zero, because it will not be a profitable exercise to make it.”

In five years, Thompson has reshaped the Times’ executive leadership. In early 2017, he elevated Meredith Levien to COO, with both revenue and product responsibilities now centralized. Early next year, Thompson will replace the Times’ retiring longtime CFO, Jim Follo. That will offer Thompson another opportunity to reshape a top job, perhaps looking for both dealmaking and digital business skills.

Of course, all that the Times has accomplished financially owes enormously to its newsroom. That journalistic bedrock — its value unexpectedly enhanced in this weirdest of modern American times — has served as the foundation for all the digital smarts of marketing, messaging, presentation, and distribution that now build upon it.

As Thompson told me last week in an interview in his Times office, he believes that overall press economics may soon grow even more unkind. “I think over the next five years it’s possible the competitive landscape will actually get in some ways more attractive for The New York Times, because I’m afraid I see a lot of casualties over the next few years because of the economics of the industry,” he says. “And, actually, I think for a period we could enjoy — well, we won’t be alone in this — but the survivors could enjoy a kind of last-men-and-women-standing sort of benefit for a bit.”

Thompson and I covered a wide range of topics in our conversation. Is 10 million subscribers a real goal? What about the Times’ global expansion? In a time of legacy bundles, skinny bundles, and no bundles at all, what’s he thinking about how the Times might rebundle itself for fun and profit?

Our conversation is condensed and lightly edited for clarity.

But the idea that you need a new generation of media for younger generations of consumers, I’m not even sure that’s true. And what’s intriguing is we literally — I’m pointing at a place that’s literally about 50 feet away, The Daily [the podcast which draws a strong audience of millennials] is a room two doors down. It’s kind of a dungeon.

That was the room for a period where the Snowden laptop was. That’s sacred ground.

The Sunday paper and the future of print

Doctor: It seems like the next stage of the global initiative is very much focused on English-speaking countries.

Thompson: They’re simultaneous. These are simultaneous gestures. One of which is, essentially, try hard to go for low-hanging fruit, frankly — which makes it sound like this is easy. It’s not easy. But look hard at your most obvious customer, the English-language reader.

Doctor: So it’s the same language and it’s essentially the product as it is. What are you learning, as you go in Australia, Canada, the U.K., perhaps, about how much different content do you have to offer? Or is it mainly different presentation?

Thompson: Firstly, we’re probably about nine months in our Canada/Australia/U.K. thinking and experimentation. Each market is different. We don’t think there’s a package.

Doctor: And you said you’re doing pricing experiments in Canada more, right?

Thompson: I would say, essentially, we’re now testing pricing, principally, through offers. Testing price, continuously, everywhere.

Doctor: And more higher price or more lower price?

Thompson: Typically, higher price is in the context of can we encourage you to pay for a higher price bundle which might include other things like crossword and cooking, for example.

Creating new bundles of joy

Doctor: Let’s talk about bundles a little. Your first paid numbers on Cooking were pretty good. You just launched in July and had 23,000 subscriptions. With Cooking, you’re providing that free to subscribers. With Crosswords [at 26,000 new subscriptions in the last quarter, 332,000 in total], some subscribers have to pay 50 percent of the price for it. Why the difference in those two strategies as you build the bundling strategy? Do you have that figured out yet?

Thompson: The thing I’m most hungry for is for us to create pieces which the company’s revenue departments can play with in combination. I don’t really have a particular thesis about which piece should cost more…It seems to me that many of our competitors have essentially got one thing to price.

Doctor: That’s the nature of the whole industry, right? So you want more pieces, and Cooking gives you a new piece. You’ve got Watching. A health product has been talked about. What’s going to speed up the Times product pipeline?

Thompson: We’ve literally just appointed Alex MacCullum as the head of new products here, and my answer is Alex is going to do that. She’s one of our best executives. She was the brains behind Cooking, with Sam Sifton. When I arrived five years ago, I said — a very obvious question — what about verticals? What about cooking? I happen to be quite a cook.

Doctor: What’s your best dish?

Thompson: Italian.

Doctor: The best Italian dish?

Thompson: Risotto, I suppose. So, I said, what about cooking? “We tried that and it didn’t work.”

Doctor: You heard that on a few things.

Thompson: Yes. Well, let’s be fair. This is what life’s like. You know, actually, most successes are based on going back and trying something that looked like a failure.

Doctor: But why not charge subscribers for Cooking? How do you decide that?

Thompson: I don’t want to say much more than the way I think about what we’re trying to do is we’re trying to add value to the experience of a subscriber. Sometimes we’re going to use that as a way of retaining a subscriber. Sometimes we’re going to say, why don’t we give this to existing subscribers, but ask new subscribers to pay more for it? The key thing is to have the pieces. You can’t juggle without a number of different balls.

Doctor: So how many pieces do you want Alex to have, say, by the beginning of 2019. More pieces?

Thompson: More pieces, yeah.

Doctor: Two more pieces?

Thompson: I don’t know. It won’t be 10.

Doctor: Fewer than 10?

Thompson: Yeah.

Doctor: More than one?

Thompson: Probably more than one, yeah.

Doctor: You’re doing analysis behind it to say it’s better for us to charge individually for it or to bundle it. Or are you guessing?

Thompson: The truth is it’s a combination of the two. I think judgment actually plays a big part in this. I think my job is just to try and encourage the entire organization to build things of value beyond the news experience. Some of which we may use within the main news app, some which may be standalone. Things could migrate between the two.

The promise of Wirecutter

Doctor: What about the Times’ integration of e-commerce? David Perpich [the Times executive who took charge of the Wirecutter business earlier this year] is building that business, and I know you’ve been careful with how e-commerce is offered on the main Times website and connected to stories. You’ll have features like buying the right headphones at the right time, off some news. What kind of legs does e-commerce have, perhaps as part of the bundles you’re thinking about

Thompson: I think the affiliate-fees revenue stream out of Wirecutter is, potentially, highly extensible. I don’t think you’re going to see buy buttons littering, flashing all over the place. But is it extensible? Definitely. Is it possible there are resources or tools or archival content which could ultimately be behind a paywall either as a standalone or in a Times model? Yeah. Potentially yes.

We think Wirecutter has got immense potential in terms of building on different categories as a standalone. We’ve demonstrated, I think, very well that Wirecutter can be used for content which fits very nicely on the Times. The basis of that acquisition is that Wirecutter is worth more to us than it would be worth to someone else, because we could do more with it.

Doctor: Archival would be a Consumer Reports model?

Thompson: Yeah. It’s complicated. It’s not obvious what the value of archival is. In some ways, I think one of the very, very clever things about Wirecutter is if all you want is to know what you should buy now, that’s the first sentence you read. “Most people should buy X” — there’s a buy button. You’re done. So, if you want a five-second interaction with Wirecutter, to mutual advantage, that’s fine. If you want to see the workings. They got the workings. To me, that’s something, again, that’s something for us to explore and learn but we’re very, very pleased with the company.

There’s a couple of very interesting things about the company. First is the newsroom. They’re passionately enthusiastic about our buying the company. So, not just, you know, acquiescing: “Oh, if you must.” They were very, very excited about it. We’ve licensed Wirecutter content in the past. There was real admiration inside the Times newsroom for the journalistic standards of Wirecutter and the authenticity. It’s been a marriage made in heaven. It’s been good.

Thompson vs. Thomson

Doctor: Last question. You and Robert Thomson [the CEO of rival News Corp, appointed to that job a few months after Thompson joined the Times] both ascended at a similar of time.

Thompson: No P. He hasn’t got a P in his name.

Doctor: I know. Is that the only difference?

Thompson: I come from the aristocratic branch of the family. [laughing]

Doctor: How do you assess that competition? The Journal had taken dead aim at the Times just before you got here.

Thompson: Oh, that’s a slightly different thing there. I’ve known Robert for years. When he was running The Times [of London] and I was running the BBC and even before that. I’m a big fan of Robert’s.

Doctor: How often do you talk? Is there a secret Brit club here?

Thompson: I probably see him three or four times a year. Something like that. I’m a fan. A frightening number of people at News Corp say they worked for me. Like [Journal editor-in-chief] Gerry Baker — he once claimed he worked for me. Certainly, I knew him when he was probably 24 and I was some gray age like 27. The Wall Street Journal continues to compete with the Times for some categories of advertising. Sometimes we maybe do a better job, sometimes they do. It’s not obvious to me that we’re competing for subscribers. They have a thesis for a very tight paywall.

Doctor: It works for them, they say. It seems to work at the Times of London.

Thompson: I think the Times [of London] got stuck in that 200,000 [range for subscribers]. I don’t know — they need more scale to get that to really work. But I think they’re very serious about it, and they’ve thought about it, you know, and good luck to them. If the plan was The Wall Street Journal was going to transition into being a fully featured general-interest news organization, able to compete against a very broad spectrum of genre, I don’t see that.

Doctor: It’s really stepped back from that.

Thompson: I don’t see that happening. They have lots of good journalists. Some of them they’ve been kind enough to train and develop for us and we’re thankful.

But no, I want to say more broadly, The Wall Street Journal looks like less of a direct competitor than Rupert Murdoch seemed to think they were going to be a few years ago. The Washington Post is revived and is more of a competitor. You know, we want competition. No harm in that. But it’s our relationship with the digital platforms — when we think about the critical relationships, it’s going to be how all of us deal with them.

Doctor: Robert’s been the most outspoken of the two Thom[p]sons, right?

Thompson: Yeah. He keeps on telling me I ought to thank him for that, but I said I was going to hide behind the rock and see how he gets on.

Doctor: Both on “the duopoly” and first-click-free, he’s gone after them publicly.

Thompson: We think we have a good relationship with Google. We’ve been very frank with Google. We’re not grandstanding about it, but we took a similar view to News Corp about the fact that Google could do a better job in helping us with our subscription businesses. And they have, I think, listened and have been pretty responsive. You can debate whether the public campaign was necessary or not.

Doctor: It’s a good cop/bad cop thing, too. That’s what Mathias [Dopfner, CEO of Axel Springer and long-time Google antagonist] does in Germany right? I mean, Axel Springer goes out there and beats the drum. Then, the Google Digital News Initiative comes out of it and other stuff. So it makes some sense. You can’t say Google’s reeling, but they are nervous. They are very nervous given the populism on both sides of the Atlantic, which could be very threatening to them.

Thompson: But also, sooner or later, obviously, fundamental questions about regulation emerge. If you essentially have the power of a utility, sooner or later, politicians are going to say, “Well, we know about utilities. We know about the market risks for utilities.” In many countries, including my own, the phone companies went through a process of being confronted with this, the idea of a period of recalibration of regulation, very much like the story in the 1980’s and 90’s.

Doctor: Do you think we’re coming back to that? You can’t come back to that in this political atmosphere.

Thompson: And to be quite clear, we know from the story of regulation, it normally arrives several decades after — I mean, the Federal Trade Commission arrived 40 or 50 years after the malpractice of the railroads in the 1850s and 1860s. It’s a fool’s errand.

Doctor: So you’re forecasting regulation of Google and Facebook in the 2040s.

Thompson: I can’t tell you what’s going to happen, but I think in both cases, to be fair, I take their leaders at their word. They don’t actually want to be antisocial in their behavior. And when antisocial behavior is pointed out to them — Facebook essentially being paid to target anti-Semites and things like that — they’re aghast. So, there’s some feeling, even in the companies, that things can’t go on quite as they have been in recent years. So let’s see where we get to.

Photo of Mark Thompson, left, and Arthur Ochs Sulzberger Jr. at the ring the bell ceremony at the opening of Euronex quotations in Paris, Oct. 15, 2013, by AP/Remy de la Mauviniere.

The Times (of London) is expanding from digital to print (in Ireland)

Shan Wang — Wed, 24 May 2017 17:24:30 +0000

The Times of London is expanding its Irish edition from digital into print, a move that bucks against a continued trend of declining daily print sales in the country and elsewhere.

The Times launched its digital-only Ireland edition in September 2015 (after a failed legal challenge from the Irish Times to block News UK from using the name “The Times Irish Edition”). It has a substantial newsroom of around 30 reporters. Its new print edition will replace the international print version of The Times that’s currently available there; readers can pick up the first print copies June 3.

News Ireland has not disclosed pricing for the print edition; the current digital edition costs new subscribers €1 for a 30-day trial, and then €5 a week thereafter.

“We have built a loyal digital audience for the Ireland edition of The Times and we are now delighted to expand what we offer to include more Irish news, business, sport, opinion and analysis in print as well,” Richard Oakley, editor of the Ireland edition, said in a statement. “The Ireland edition of The Times is a quality Irish newspaper with a global outlook.”

(Not all of The Times’ experiments beyond the U.K.’s borders have worked out: The Times shuttered its paid international app, targeted at a global audience, back in September.)

The Times is *launching* a daily print newspaper edition in Ireland because apparently they've found a magic way to make print work in 2017.

— Jim Waterson (@jimwaterson) May 24, 2017

@ellenmcoyne Yes well I wouldn't want to suddenly have to worry about print deadlines and layouts but if you're really that mad, enjoy it!

— Jim Waterson (@jimwaterson) May 24, 2017

Newsonomics: Can a master blacklist choke off fake news’ money supply?

Ken Doctor — Tue, 02 May 2017 15:54:21 +0000

For the last few weeks, it’s looked like fake news has spawned its own opposition industry. Money to fight the now-apparent-to-all evil has poured out of foundation coffers faster than Sean Spicer clarifications.

In February, Craig Newmark made his big individual pledge to supporting trust in news, committing $6 million. Then we heard that five funders will create the News Integrity Initiative with $14 million, with Facebook itself participating. Then, just a day later, entrepreneur/journalism funder Pierre Omidyar publicly committed a cool $100 million to “to support investigative journalism, fight misinformation and counteract hate speech around the world.” (First up for that fund are a $4.5 million grant to International Consortium of Investigative Journalists, the Washington-based group behind last year’s Panama Papers investigation, and money for the Anti-Defamation League to fight hate speech.)

Just after the Omidyar largesse was hitting the press, I visited with digital pundit and CUNY professor Jeff Jarvis in his office, just a block away from The New York Times. CUNY had just been named the administrator of the $14 million, with lead money provided by Facebook, the Craig Newmark Philanthropic Fund, John S. and James L. Knight Foundation, the Tow Foundation, and the Democracy Fund. All totaled, 19 organizations had signed on to the initiative, including advertising exchange AppNexus and PR companies Edelman and Weber Shandwick.

I wanted to know how Jarvis and CUNY would fight the scourge that had become the media’s bête noire, even as the term “fake news” had spiraled out of all sense, the epithet of choice for anyone, including the White House’s current occupant, who may disagree with a news company’s reports.

I entered the conversation skeptically. I’ve believed, conservatively, that actually providing money to pay more experienced journalists to do journalism — as some of Omidyar’s and other funding has stepped up to do — may be the best tonic for what ails fact-challenged America in 2017. After all, it’s been The New York Times’ and The Washington Post’s reporting, mildly beefed up and abetted by the surge of digital subscriptions, that has ended several careers at Fox News and helped bring down the prevaricating Michael Flynn.

When I asked Jarvis (who directs CUNY’s Tow-Knight Center and has been focused on the trust issue) how he expects to use the money, he ticked off more than a half dozen ideas — “new metrics of impact,” news literacy, better “public listening,” and the more abstract “How do we rethink the informed conversation?” — and notes the unusual speed with which $14 million fell into CUNY’s lap.

It did seem a little squishy. Then, Jarvis turned to his first funded project — one that got formally announced this morning — and began to enthuse about its prospects.

That’s the Open Brand Safety (OBS) framework. If neither the words nor the acronym tell the story, it’s the companies behind this project and their theory of the marketplace that raises hopes that something positive and impactful could come out of it. The good news is that this first News Integrity Initiative funding — amount as yet undisclosed — is going to smart people who have a sensible, well connected plan to diminish fake news where it hurts most: in the pocketbook.

“The simplest way to describe it is we’re going to try and build the largest list, bringing together all of the lists of all of the fake news domains as well as extreme content,” Storyful CEO Rahul Chopra told me. Storyful is one of two key partners in OBS. “Not only are we finding them, but partners of ours, from First Draft to academia to NGOs to Jeff Jarvis’ team, are too. We’re going to bring together everybody’s lists and give those to the networks, the ad tech firms, the agencies, etc., to try in some ways to choke off money supply coming into these domains and sites.

“The best way to do that is to bring the various parties to the table to help solve it — whether that is the ad agencies, the ad tech firms, the publishers, or the platforms to help define what those signals are — and then work on how we can build technology to detect them faster. Again, use that human skill to consolidate and verify. What I’m after is how do we choke off money supply to this entire bracket.”

Storyful has the story to back up its words. After all, it’s Storyful’s fundamental business to tell what’s accurate from what’s fake, misattributed, made-up, or masquerading in one form or another. As I’ve talked to some of the nearly 200 companies (including The Wall Street Journal, the BBC, The New York Times, YouTube, U.K.’s ITN and Channel 4 News) that it serves as high-end video-plus fact-checker, I’ve only heard positive reviews. Both CEO Chopra and Mandy Jenkins, its head of news, are well respected in the craft. News Corp bought Storyful in December 2013 for about $25 million and brought in Chopra a year later to head it up.

If you remember back half a decade, as the Arab Spring and other uprisings occupied the news and filled social media with video, we heard a fair amount about inaccuracy. Some old footage of a demonstration might be touted as current; a slew of other concerns arose. As top news companies have turned to Storyful and its peers for professional, real-time vetting, we’ve heard far fewer of those issues. So it makes a lot of sense to turn to professional fact chasers to figure out a protocol that could work in this elusive world of misinformation.

Identifying faker — along with “extremist” sites, the ISISes of the world, Chopra says — is one thing. Curtailing their power is another.

That’s where Storyful’s partner Moat comes in. Moat focuses on ad analytics for top brand advertisers and “premium” publishers. Its founders — Jonah Goodhart, Noah Goodhart, and Michael Walrath — came out of Right Media (bought by Yahoo in 2007) and they are well connected in the industry.

So they can serve as the conduit getting Storyful’s blacklist of fake sites — which Chopra says will first be ready within months, and then added to over time — to ad buyers. Then, the idea goes, those ad buyers, in order to both protect their brands and do the right thing, can avoid placing buys on suspect sites. While direct buying is a part of the puzzle, it’s the application of this “Open Brand Safety framework” within programmatic, machine-driven buying that will make the difference in whether the plan succeeds.

At the outset, both ad/public relations giants GroupM (“the world’s leading media investment firm”) and Weber Shandwick are on board. Chopra says many conversations among advertisers and their agencies have already been had, and he expects good participation.

How about Google and Facebook? “We’ve had conversations and we’re continuing to have conversations on what role they play where it’s still to be defined,” Chopra told me. “Look, we’re a company that has very close relationships with both. We’ve always been able to figure out ways to partner and work with them. I’m hoping that this another example of one where we’ll figure it out as well.”

Since Google and Facebook aren’t doing the actual buying — instead acting as the greatest middlemen the ad industry has ever seen — their exact role in this initiative may not yet be clear. Chopra agrees: “I think that’s why we’re going to the programmatic shops in ad tech.”

Chopra considers the blacklist Phase One of the process. That may be gnarly enough, as the idea of such a list will no doubt draw plenty of contention. Storyful’s history of fair decision-making helps, but it could get bogged down in controversy.

What would Phase Two be about? “We really want to get to understanding the spread of information from closed networks to the open web. That’s the other [project] that we’re working on, that we’re going to start working on with Jeff. If you look at how content is spreading today, whether it be extreme content or fake news, very often it’s starting in subgroups on closed networks before it ever hits the social world or open web. We’re trying to understand that spread of information and that spread of content.”

In other words, coming to grips with the impacts, good and otherwise, of the Dark Social that Alexis Madrigal identified five years ago.

Chopra says Storyful has long had an interest in both better identifying fake news sites and understanding closed networks. Neither, though, is core to its business, so the funding allows it to put resources toward the tasks.

Anyone in the business knows that industry protocols and standards usually take years to develop and to be well accepted. In this case, the participants all feel the pressure of their fast-tracked approach, given the wider societal stakes in voters making their decisions more on facts than fictions. In early 2017, this may seem like an uphill battle, but it looks like the right combatants are on the field.

“When Jeff and us started talking about this initiative, we started to think, ‘Okay, what are the things that we can immediately greenlight or work together on? We are big fans of Jeff at Storyful, and of CUNY and the School of Journalism. We take interns from there and recruits from there, and it’s a phenomenal program. We do quite a bit with them.”

As part of the initiative, CUNY is establishing an internal journalism team dedicated to identifying web domains that knowingly present fiction as news.

Says Jarvis: “My long-term hope is Storyful and Moat will support a flight to quality, helping advertisers and platforms not only avoid fraudulent content but support credible and trustworthy media.”

Photo of safety matches by Amelia Wells used under a Creative Commons license.

Why The Wall Street Journal is cutting print sections and refocusing on its core coverage

Joseph Lichterman — Mon, 14 Nov 2016 11:00:19 +0000

If you’re a Wall Street Journal print subscriber, you might notice that Monday morning’s paper looked a bit different. As part of an effort to cut costs in response to plummeting ad revenue, the Journal debuted today a reformatted print edition that eliminates and combines some sections.

The Journal is introducing a “Business & Finance” section that combines its previously separate Business & Tech and Money & Investing sections. It’s also folded the Personal Journal and Arena sections into a Life & Arts pages that will be included in the A section. The Journal also eliminated its standalone Greater New York section, folding that into the A section as well.

“Both driven by the need to look at how we can reduce costs and keep the paper on a sustainable economic footing, but also by taking the opportunity to produce a more cohesive and logical structure to the paper — that’s what drove us to do this,” Journal editor-in-chief Gerard Baker told me in an interview last week.

The Journal’s advertising revenue fell 21 percent in its most recent quarter, the paper’s parent, News Corp., said last week. The company said that “digital” accounted for 55 percent of Dow Jones revenue in the quarter. (News Corp. posted a loss of $15 million in the quarter.)

As part of the restructuring, the Journal laid off the Greater New York Staff, which reportedly included at least 19 union employees. Last month, the paper also offered voluntary buyouts. Four hundred and fifty union-represented employees were offered the buyout, and 48 accepted the offer, according to the union.

Business & Finance, we already do that on Saturday. The Business & Finance section is a consolidation of both Business & Tech coverage and financial coverage — that is, Money & Investing — which are the current two sections Monday through Friday. I always thought there was a logic to having those two sections put together. There are some savings associated with that too — there are additional costs associated with printing separate sections. Putting those two together made absolute sense to have those topics covered in one section in a more coherent way. The back page of Business & Finance will be the lead page, if you like, for financial coverage, with the big market story with Heard on the Street. Inside on the back, all our financial coverage, and inside from the front, a mixture of business and financial coverage. I like the coherence of that, which brings those two together in a more naturally unified way.

Then, as we looked elsewhere, we looked at Personal Journal, which appears currently three days a week as a separate section, and Arena. So, again, looking to consolidate that — looking to make savings, frankly, some cost savings. We could bring those two together and put them in a unified section that we will call Life & Art, which will be four sections Monday through Friday in the A section of the paper. Again, it makes sense for that to be within the main body of the paper. There’s a logic to having it there. That was the overall thinking, that the paper would become a more concise, sharper paper, which will be two sections three days a week — that’s Tuesday, Wednesday, Thursday — three sections on Monday and Friday. Most Mondays, there will be a Journal Reports, which is a special topics section, and then on Friday the Mansion section will be the third section. Saturdays we leave as it is — the main news section, Business & Finance, Review, and Off Duty, as well as the magazine, of course.

Again, both driven by the need to look at how we can reduce costs and keep the paper on a sustainable economic footing, but also by taking the opportunity to produce a more cohesive and logical structure to the paper — that’s what drove us to do this.

Lichterman: In a column we published last month, Ken Doctor wrote that the Journal has about 2.5 million total subscribers and 1 million digital subscribers as well. When Will Lewis became publisher and CEO in 2014, he wrote that he wanted to reach a goal of 3 million subscribers. You’re obviously not there yet, and I’ve read that’s a goal for 2017, but how are you thinking about growing the subscriber base?

Baker: Just to unpick some of these numbers and just to clarify: The goal that Will Lewis laid down in 2014 was for 3 million subscribers for all Dow Jones products in three years, by the middle of 2017. That includes the Journal, Barrons, things like Financial News, which we publish in London, and some of our other products. We’re pretty well on course for that 3 million total. I think by the middle of next year, that’s the target.

The number we talk about in terms of actual people individually paying more or less full subscription rates, the combined print and digital total is a little over 2 million. We’re a little over a million in digital now. Digital hit the million mark and is poised to overtake print for the first time this year. We’re pleased with that. We’ve made great progress on digital. Print is down a little bit, not dramatically, but a little bit.

Our expectation is that our total Journal circulation will be closing in on two and a half million over the next couple of years, and we think that’s a very reasonable goal driven by digital circulation growth.

Lichterman: The Journal recently released its WSJ2020 plan, and it seems that digital — and mobile — will be a significant part of that. I’m curious about how digital, and mobile in particular, fit into that process.

Baker: Mobile, this is where we’ve put most of our efforts in the past few years in terms of transforming the newsroom and in terms of transforming the whole company to become more digital and, particularly, more mobile. We’ve made big changes in the newsroom: training journalists, first of all, to be more digital, changing the way we work, changing the way the desks work here, changing our publishing schedule so that we publish stories during the day digitally at a time when readers are engaged most.Many more things like that we’ve done to make us more digital and increasingly mobile.

We’ve introduced more visuals, made sure that the presentation of all our journalism is optimized for mobile devices. That’s clearly where all the growth is coming from. Digital circulation growth is up substantially, and we think it will continue to grow. Again, much of our effort is on making sure that mobile, where most of those people are going to be coming from, that that experience is absolutely optimal.

What Will announced a couple weeks ago, and I’ve followed up on in the newsroom, is this project 2020, which is largely designed with that in mind. It’s a project to look at all our operations across the company, the three main areas of our company. Particularly, for me in the newsroom, it’s to look at our operations here and how we can become more efficient digitally, how we can become more attuned to mobile needs, looking hard at our cost base and areas where we can make some savings. But at the same time, also, looking at those areas that we know are producing growth in terms of circulation for the paper and doubling down on those areas and investing there.

The overall answer is that we are very focused on digital growth, on improving the mobile experience, and making sure we are maximizing the available resources in those areas that are going to produce mobile and digital growth and making savings across the newsroom to improve the overall efficiency.

Lichterman: What are some of those areas, digitally and on mobile, that are producing growth, and how are you looking to grow those? What might we expect to see moving forward?

Baker: We are focused really hard on circulation growth. That’s not to say that we don’t want advertising — we want advertising. We’ve got a robust digital advertising base, and we think that’s going to grow over the next few years. Again, for the long-term future of the paper, we’ve staked our strategy for the paper — by the paper I mean the paper in the broadest sense of the term, The Wall Street Journal, including digital — on growth in digital circulation. For us, it’s all about circulation. So, what we’re doing, one of the beauties of the digital age, is that we have much more data available to us. We know, minute by minute, where the readers are, what they’re reading, how much engagement there is, how long they’re with stories.

The Journal is a subscription-based newspaper, so to read most of the content beyond the very simple stuff you get on Google and whatnot, you have to subscribe. We put the vast bulk of our journalism now behind the paywall — including, obviously, our best enterprise journalism. What we’re able to do is we’re able to trace each day the stories and types of stories that generate subscribers, that turn people in from just being people who casually come to the site for a story and then choose to subscribe by actually signing up. We look at that everyday and we get a strong indication from that as to what are the kinds of coverage that are driving subscriptions. That tends to be enterprise journalism in core areas of business, economics, national politics, big policy and political stories.

What we’re doing in the newsroom is matching the resources that we have in a 1,500-journalist newsroom to those areas that we know from the data that are going to be the best, most promising areas of circulation growth. Again, it’s business, finance, markets, technologies. It’s not to say we ignore other stories. We don’t at all. We obviously have robust coverage of general news; we have great culture, life, entertainment, arts, and sports coverage. But you know that’s not going to be where the opportunity for us to drive circulation growth. That will always be part of the package that’s available to subscribers, but it will be the core stuff — business, finance, and economics — that will drive circulation and that’s what we’re really focused on in terms of producing the best journalism.

Lichterman: Do you think that subscriber revenue can make up the difference in lost advertising revenue?

Baker: The numbers are fluid, right? Our circulation revenue is growing. It’s growing well. It’s growing robustly. I think that can absolutely continue. Advertising, it’s no secret, is down this year. Overall, it’s been steadily declining for some time.

The overall answer is yes. Exactly over what time frame this will occur, I don’t know. You have to adjust according to the way these numbers do flow back and forth. But I’m confident that the answer is yes. That’s not to say there won’t be advertising — I’m confident that we will always have significant advertising revenue, but I am also confident in the combination of that advertising revenue and the growth of revenue that we’re going to get from circulation.

The other thing I should talk about, which is our very important, is that we have professional products: Dow Jones newswires, we have WSJ Pro, which is a suite of products which are highly specialized news products for professionals. I think that we have a unique opportunity as the Journal to produce more of these, to produce more professional products, which are much smaller circulation than The Wall Street Journal, but people pay a very high premium for very high quality, very specialized information. That’s a huge source of potential revenue for us now and a huge source of potential revenue growth.

That all counts, obviously, in the general sense of subscription growth — people paying for the quality information and news that we provide. I think all of that together — Journal circulation growth, the growth of professional products, the growth in professional news and information we can provide — I’m confident that that will make up for the declines that we’ve seen in advertising and actually will enable us to grow significantly as a business because we’ll have that durable sustainable circulation revenue as well as having whatever advertising revenue we have.

Lichterman: Digital circulation is key to your strategy. That thinking, I imagine, is behind how you’re thinking about platforms such as Facebook and Snapchat Discover. How do you balance publishing on those platforms versus publishing on your own platforms?

Baker: Yeah, exactly. All news organizations are grappling with that. We’ve taken a very different approach from, say — the most extreme example would be, The Washington Post, which more or less publishes everything on Facebook. We know how much traffic comes to us from Facebook, we know how important Facebook is, we welcome that, but what we want Facebook to do is to be a channel for us to increase subscriptions to the Journal. We’re not going to make more than a very small amount of our journalism available to readers on Facebook or other channels for free. We’re going to work with Facebook and Facebook has worked with us.

That’s a little bit different than with Snapchat Discover, which obviously is not a subscription channel at the moment. It’s free. That’s supported by advertising. We’ve had great traffic numbers, I should say, on Snapchat.

Facebook is very important for us, but important for driving circulation rather than just driving traffic.

Baker: The core thing is to keep people focused on the job, which is produce the best journalism. There are lots of distractions, as you say, and sadly you do go through periods when you do lose people. We’ve just been through this big voluntary buyout exercise. A significant number of people have signed up to take voluntary buyouts. We’re going through this review process, we’re making changes, and it is difficult. But what most motivates people and what most improves morale is the sense that we’re doing the best journalism, unrivaled journalism. I try as hard as I can to keep the focus on that and to show that, whether in mobile, other digital platforms, or in print, we are doing the best around.

This week is a good example. Our coverage of the election on Tuesday night was outstanding, and reminding people of what we’re doing, how well we’re doing it, motivating them to do even better there, whether it’s big stories like the election, the markets, big corporate events, big investigations that we do. That’s what motivates people. When they really see our coverage of these events, when we break news, or do big investigations, it makes The Wall Street Journal indispensable. That’s what gives them, I think, the excitement to come to work every morning and to work for The Wall Street Journal.

They’re all really smart people. We’re a business news publication. Nobody is ignorant of the pressures that are on our business. They realize that. They see what’s happening to advertising. They know the digital world is transforming the way we work and putting additional pressure on the way we work. They’re all grownups, they’re all sensible, and they understand that. They understand that we need to make these changes like the one we are now.

I think, above all else, giving people a reason to really, passionately believe in what we do — journalism that’s accurate, reliable, and trustworthy — that’s the best way to keep people happy. I have to say, I’ve been a journalist for more than 30 years. I’ve worked in five different news organizations. The passion the staff here have for the Journal and what we do is not found anywhere else. We have the most committed, passionate, engaged journalists. They love what they do, they love the Journal, and they have a great, great dedication to it. I find that very inspiring. What I’ve got to do is make sure that the journalism we’re doing keeps them believing in that journalism and keeps them committed to it.

Photo of Gerard Baker by World Economic Forum/Benedikt von Loebell used under a Creative Commons license.

Newsonomics: What really ails Fox News, the leader in its shrinking category

Ken Doctor — Fri, 22 Jul 2016 12:17:15 +0000

If the ascendance of Donald Trump is showbiz, the descent of Roger Ailes can only be described as opera. Trump and Ailes should go down into history together, and July 21, 2016 will mark it.

Just hours before Trump formally accepted the Republican nomination for President, the Dr. Frankenstein who helped create the possibility of that acceptance is locked out of the billion-dollar Fox News empire he cooked up — albeit with a nice $40 million gold watch.

Frankenstein? Indeed. Roger Ailes deserves some kind of award for his genius in inventing Fox News. Certainly, he borrowed from his funder Rupert Murdoch’s combative, biased, and hot tabloids, importing those sensibilities into the U.S. — where cooler if muddled standards of ethics had kept things in (too often boring) check.

“Fair and balanced,” the Orwellian branding that Ailes attached to the Fox News brand brought a gale of laughs in the meeting at which it was introduced, one person in the room tells me. But it has long managed to throw some of its critics off their game. To be clear, Ailes and Fox didn’t pick Trump. But Trump picked up on all the groundwork Ailes laid for two decades, fertile soil for a master manipulator of media and of branding.

Roger Ailes brilliantly and happily made a deal with the devil to divide the country – pounding talking point after talking point, understanding pre-digital memes – as only a great political operative could. That deal twinned Fox News Channel’s ability to prosecute Rupert Murdoch’s views and churn huge profits, now estimated at about $1.5 billion a year.

Now, though, the sustainability of those profits, Fox’s take-no-prisoners programming, and its very role in Republican pantheon has been thrown into question. It was only two weeks ago that former Fox News anchor Gretchen Carlson went public with her sexual harassment claims against Ailes. As the Republican convention closes and the Democrats’ is set to open, the grand proprietor himself, Rupert Murdoch, has become interim CEO and chairman of Fox News, a job he likely never imagined taking on.

Rupert will soon turn that post over to a likely interim Fox News leader, who will shepherd FNC through the next half year of the election and its immediate aftermath. Then, though, the issues before FNC – ones that Murdoch sons James and Lachlan, in charge of parent 21st Century Fox for the past year, now confront – become more gnarly. The big one: How it will move a 1996 creation profitably into a much more competitive, strongly digital media landscape?

What really ails Fox?

Looking from the outside, Fox News appears to boast an incredible business. Fox rings up about $1.5 billion in profit a year on $2.3 billion in total revenue, running circles around both CNN and MSNBC in both money and audience. Fox News throws off about 20 percent of 21st Century Fox’s profits. That’s no small number, especially as the world’s legacy TV/movie businesses, including both Disney and Time Warner, find themselves buffeted by new, profit-sapping competition on all sides.

But plot out the company’s future, and one number stands out above all. The median age of Fox News primetime watcher is 68, and by some accounts is going up by one year every year. (CNN, at 61, and MSNBC, at 63, face parallel problems.)

Fox News even skews significantly older online, as we see in the June 2016 comScore U.S. multiplatform data below. Thirty-two percent of its digital audience is 55 or older, about 10 percentage points higher than either CNN or MSNBC. Fifty-one percent are 45-plus, 11 points higher than CNN and 6 points higher than MSNBC.

CNN
	Unique visitors (000)	% total uniques	Index of share
Total audience	136,147	100.0%	100
18-24	21,094	15.5	117
25-34	31,703	23.3	148
35-44	26,631	19.6	131
45-54	22,432	16.5	108
55-64	21,794	16.0	114
65+	10,459	7.7	69

Fox News
	Unique visitors (000)	% total uniques	Index of share
Total audience	62,953	100.0%	100
18-24	5,664	9.0	68
25-34	12,143	19.3	123
35-44	12,379	19.7	132
45-54	12,176	19.3	126
55-64	11,538	18.3	131
65+	8,562	13.6	122

MSNBC
	Unique visitors (000)	% total uniques	Index of share
Total audience	17,621	100.0%	100
18-24	3,308	18.8	141
25-34	1,763	10.0	64
35-44	4,506	25.6	171
45-54	3,154	17.9	117
55-64	2,699	15.3	109
65+	2,092	11.9	106

That aging out of its core audience is its longer-term problem. It’s been masked for cable news in this Trumpinated election cycle that has sent ratings way up for everyone. CNN showed an audience increase of 38 percent from 2014 to 2015, but Fox has benefited as well. Similarly, comScore reports each of three cable news channels is up more than 20 percent year over year in digital audience.

But everybody expects the audiences to decline — maybe nosedive — in 2017, after this hyperkinetic election year. That election year/non-election cycle is a fixture of the environment.

More deeply, Ailes’ successor must face two fundamental features of cable news’ competition.

The Big Three — Fox News, CNN, and MSNBC — are in some ways artifacts of the end of the 20th century. Dating back to Ted Turner’s original 1980 vision for CNN, cable TV has changed our behavior. From the Challenger disaster through to this sad summer from St. Paul to Istanbul to Dallas, cable TV — today — still acts as a gathering point for times of big news. To see the latest horror, many of us still turn to the TV set. As Jeff Zucker reminded his staff when the took over CNN in 2013, it’s breaking news that makes or breaks cable news.

While that’s still true today, it won’t be in 2020, or probably not even 2018. This was the first convention to be livestreamed on Twitter. We’re just a bit ahead of the technology that will allow media — from Vox Media to the Times, The Atlantic to Breitbart — to do their own livestreaming of the big events, licensed from others but adding their own commentary. Why limit NPR to audio interpretation? Why resort to live blogs from The Guardian to put the words with the pictures? If news consumers can combine their watching of news — on their phones and via over-the-top devices — with the authority of the news brands they trust, why won’t they? Brian Williams, Don Lemon, and Shepard Smith won’t have the monopolies they now enjoy.

That will be real, new competition for what is been the protected island of cable TV news.

Further, there’s the business model. Sixty percent of Fox’s fat revenue pie comes from fees paid it — approaching $1 per customer — by the cable or satellite companies, the rest coming from ad sales. But this model is threatened in the era of unbundling. In the Netflix age, the 250-channel bundles that built cable and satellite are quickly slimming down. The rage of today (more so tomorrow) is the skinny bundle. We’ll see lots of experimentation with these and their pricing.

What’s the likelihood of a highly successful company like Fox News making a smooth, retain-the-revenue transition to this new era? We’d have to say, based on the travails of legacy media overall: Fat chance.

Put together the aging of the audience, the arrival of skinny bundles, and the advance of disintermediating technology, and we can see the new headache James and Lachlan Murdoch now have before them.

Tweak or transform?

Today, the day after Ailes’ leave-taking and Trump’s official ascent, it is curiously Rupert Murdoch’s name at the top of the Fox News org chart. It won’t be there long, but even its placement tells us both how fast Gretchen Carlson’s charges of a hostile workplace spread (as cataloged by the company’s own internal investigation) and that the Murdochs are still looking for the right replacement.

Draw up the job description and it would focus on three major qualities:

A leader able to calm the roiled emotions rubbed raw over the past two weeks, and to address the frat-boy atmosphere Ailes built, with Rupert’s tacit agreement
A proven TV operator, deeply grounded in the business
A strategic thinker, able to navigate Fox News through the election and then to tackle those bigger questions of age, technology, and business model

Is there such a person? If there were a list, it would be a short one. Figure that the Murdochs — presented both with crisis but also a longer-term opportunity — may have to settle for two out of three, and then try to fill out a new top team from there. Long on loyalty, a hallmark of Rupert Murdoch’s career, but short on a bench of executive talent, both 21st Century Fox and Murdoch newspaper company News Corp have struggled to find new top-notch talent. At Dow Jones, Rupert Murdoch finally turned to Will Lewis to soothe the many organizations bruises left by the two-year-tumultuous reign of strongman (Rupert does like alpha males) Lex Fenwick, and that organization is still in rehab, though pointed in a much better direction. Is there a single Fox exec who can now fill Ailes’ shoes?

I’d expect the Murdochs to settle on an interim leader, and then to aim for a big strategic re-evaluation — and new hire — come early 2017.

The big questions before them, ones they thought were unapproachable given Ailes’ near-total power: Does Fox News need a tweak or a transformation? As NPR’s David Folkenflik, a longtime Murdoch watcher, has resurfaced: “James Murdoch, in particular, is known to favor a model more like the Murdochs’ Sky News in Britain, which is lively but less openly political. And the Murdoch sons would like the company to reflect what they believe are more 21st century values.”

What might that mean? It’s easy to imagine a new Fox personified by Megyn Kelly. Twenty-one years Bill O’Reilly’s junior, the right-leaning, feminist-seeming, feisty Kelly could become — lots of contract negotiations ahead! — the face of a new Fox News.

Of course, the big question is how far James and Lachlan want to go, in what could be a reboot. Would it be change in presentation, in tone, or in the actual product? Given Fox News’ outsized impact on U.S. politics, those are questions that go well beyond one cable news company’s fate.

2006 photo of Roger Ailes by AP/Jim Cooper.

Newsonomics: With new roadblocks for digital news sites, what happens next?

Ken Doctor — Wed, 13 Apr 2016 19:45:54 +0000

At BuzzFeed, a 32 percent miss in 2015 revenue and a halving of its 2016 revenue target, according to the Financial Times.

At Mashable, a massive layoff after the company failed to sell itself.

At Yahoo, an upcoming sale of its news-producing assets, portending great uncertainty for journalists employed there.

At Medium, a new way forward focused more on curation and licensing its platform for publishers and less on original content creation.

The list of cutbacks — at The Huffington Post, at Gawker, at Al Jazeera, at International Business Times, and at Salon among others — keeps growing. And each round poses new questions for a news business struggling to find a way forward in this millennium. After all, even if the old world of news faded (like its readers) into older age, at least we could point to the cohort of digital-native outlets with a bit of optimism.

I feared this day would come — the new digital news companies bumping into a wall. Remember the Pew study that found that more than 5,000 new, fairly decently paying journalism jobs had been created by digital news startups?

I often contrasted that increase with the great losses suffered by the local and regional newspaper industry. Those losses now stand at more than 25,000 across the country, with more jobs lost (though unreported by parent companies due to publisher edict and editorial fear) every week.

Now, if the new news companies join their legacy peers in searching for sustainable business models — just as would-be Yahoo suitors talk about the company as “legacy digital media turnaround” — we’re entering new territory.

Is this the apex of the new news? It may be — at least for a while.

Is what we’re seeing a real cratering? No. BuzzFeed investor Ken Lerer is correct on this; all the whispered schadenfreude reflects BuzzFeed envy as much as anything. (BuzzFeed has disputed the FT’s 2016 reporting, while its 2015 miss has been confirmed by Recode’s Peter Kafka.)

It is, though, a significant recalibration. If people expect these companies to have figured out how to replace the legacy news companies and navigate this new world, they’ve got to think again. There is no secret sauce in news publishing.

What we have gained: a wealth of new national news and analysis, often spirited, occasionally groundbreaking, and instructive to a news craft that needs shaking up. Most of that remains in place, and we can hope it will continue to do so.

But overall, we’re seeing the economics of text-based (not print, but text) content turning more generally dismal. Well-funded startups like Vox Media and Mic have all been talking up video, or even TV itself.

Vox has said it wants its eight brands to be thought of as eight networks, in part spurred by Facebook’s big video distribution push. The big prize here, described today by Lindsay Nelson, Vox Media’s global head of brand strategy, at London’s FT Digital Media 2016 conference is mobile video. She made a major point: The ad rates for mobile video are now matching those for desktop video.

Mic CEO Chris Altchek told me that he believes more than half of its content would be in video form by mid-2016. The newly reconfigured, slimmed-down Mashable will focus on — guess what — video. In its case, CEO Pete Cashmore’s “pivot” is to commercial video more than editorial video, but it’s still the pictures business that seems the new shiny object.

Why? It’s not primarily that customers are demanding more video. It’s that video ad rates continue to hold up far better than for ads placed alongside all those tiresome words. If the advertisers demand more video inventory, then the content side must produce more video.

Certainly, this age of almost-convergence is a wonderful one for consumers. We get to have our useful video packaged with our useful stories, and toggle back and forth. But in the world being born, video content trumps text, and more mere scribes, of all ages and of all digital skill levels, are finding themselves unwanted. The ad tail is wagging the new digital news dog, at a quickening pace.

Take the trend to a logical progression. If VR moves into the mainstream of news delivery, how many digital news companies will dial down the text and the video and make VR a format of choice for delivering the news?

The big point: While convergence should allow journalists the luxury of using the best tool — words, video, audio, interactives — for the right storytelling job, it’s video driving the business and the jobs, more and more.

Now, let’s put this turndown in digital news startups in perspective. The new U.S. digital news economy, looked at with some envy by Europeans who care about the news business, is now mature. It happened quickly; less than two handfuls of companies have followed the digital dictum of “Get Big Fast,” fueled by enthusiastic venture funding. Now those funders are newly cautious.

“It’s definitely a trend, claims taken” one major new media investor told me this week. “Next phase: consolidation.”

Axel Springer has been a big player globally, and especially in the U.S., where it can count investments in 15 digital media companies (including Mic and Ozy) in addition to its $400 million buy of Business Insider last year. That consolidation is taking many forms. I noted it last summer when Vox Media added Recode to its stable. Further, NBC Universal’s investment of $200 million each in BuzzFeed and Vox signaled maturity. The old guys hedged, buying into the new guys.

Now, all that audience growth must turn into money, into some kind of sustainable profit over time. Almost universally, those running these newer companies say, when asked about their profitability: “We could be profitable if we wanted to be.” That sounds silly, but it offers the ring of truth. Translation: If we stopped plowing all this money into international expansion or video build-out, we could turn nicely into the black.

But there are now other factors at work.

Big is relative. Yes, the digital startups have gotten big by publisher standards — but they’re small compared to Google and Facebook. Those companies have formed an effective duopoly, taking in more than 40 percent of the still-fast-growing digital ad business in the U.S. (and probably more in Europe). The two companies are built for mass, and their size means that even ad rates driven down by programmatic buying can be made up by sheer scale.

Against that scale (and against their targeting technology that moves farther ahead of the competition day by day), all original content publishers — legacy and newer — suffer. That’s part of what we’re seeing in the BuzzFeed slowing and general worries about how much ad monetization can be wrung out of the big newer media audiences.

Let’s note two other factors. First, this slowdown in new digital news media comes amid the best American economy in a long time. These companies have been built for growth in good times; what further happens when the next recession inevitably comes?

Secondly, this year’s three-ring American political circus has greatly benefited all these sites that have paid hyper-attention to all things Trump. As Politico’s Joe Pompeo laid out in February, the new media players have made the most of their opportunity.

Reader data supports that 2016 boom. While the size of the U.S. digital audience is essentially static (up two points year over year) the amount of time spent on political news has ballooned.

Three years ago, political news accounted for 816 million monthly minutes of usage, according to Comscore. In February, it accounted for 2.36 billion minutes — almost a tripling. February was a high-water mark, but political news hit one billion minutes in June 2015 and has grown steadily since.

Over that time period, total minutes spent on digital — thanks to smartphones — increased markedly, but political news minutes greatly exceeded even that growth.

Let’s face it. This extraordinary political news year won’t last, likely replaced by a relatively boring second Clinton administration. News fatigue, anyone? As that political time spent shrinks, who and what will replace it?

Which brings us back to legacy media. Watching the new guys’ growth had left me wondering how they would fare when the world got tougher. We’re now seeing that play out in real time.

I have hoped that legacy news media DNA — newspaper companies understanding their long-term role in supplying the democracy’s news, even in hard times — would act as a counterweight to the whims of venture-backed news companies.

On a national/global level, if not a regional one, that seems to be the case. The Digital Dozen — those national/global companies I’ve identified, like The New York Times, The Wall Street Journal, The Washington Post, Bloomberg, AP, Reuters, The Guardian, Axel Springer, the BBC, and more — are most mindful and respecting of that heritage and mission, even as they struggle mightily. They, too, are testing more video, but they try not to let the new overwhelm their essential reasons for being. It’s a slog — a tough one to work through and a tough one to report on. The news mission touchstone looms larger in importance, as we see digital news companies retrench.

In part, we’ll see what kind of next mating of old and new media now moves forward. Is Business Insider now better positioned as a part of deep-pocketed, longterm-looking Axel Springer, than it would have been as independent? Will BuzzFeed and Vox Media (which recently merged some ad sales with investor NBCU under the rubric of Concert) be buffered by their old media partners?

It’s impossible to say exactly what’s next in news. These big “startups” have lots of life in them, and we’ll see how they reckon with difficulty. In the meantime, what’s new is old, in part, and that’s a fresh revelation in these digital times.

Photo of a different kind of roadblock by Ian Rees used under a Creative Commons license.

The sun never sets on The Times: How and why the British paper built its new weekly international app

Joseph Lichterman — Mon, 01 Feb 2016 17:01:52 +0000

Most Thursday mornings start the same way for Seth Jacobson, the editor in charge of The Times of London Weekly, a new app aimed at readers outside the U.K.

The app is released each Thursday, so that morning Jacobson begins reading through everything that’s published in that day’s paper and emails himself the most interesting stories. That begins the process of choosing the 90 or so stories from The Times and Sunday Times that will populate the next issue.

“We’re trying to think about what we offer that you don’t get in other publications,” said Nick Petrie, The Times’ deputy head of digital. “What stories have we covered particularly well? What stories have a London or U.K. angle and provide something you might not have gotten from your go-to, day-to-day publication?”

The app debuted last month in 46 countries. It’s only available on iOS for now but will eventually expand to Android as well. A subscription is $3.99 per month after a month-long free trial.

The weekly app is an interesting addition to The Times’ core business model, and the paper’s digital staff plans to use some of the back-end tools it’s developing for the app for other projects down the line.

The Times of London, which is owned by Rupert Murdoch’s News Corp, has a hard paywall. The Times makes it practically impossible to read its journalism for free. Readers have to sign in if they want to access stories from the papers’ homepage or social media feeds.

The Times has 170,000 digital-only subscribers, and in 2014 it posted its first profit in more than a decade.

Petrie wouldn’t share how many people have subscribed to the weekly international edition, but The Times expects business and sports stories to be especially popular since London is a global financial center and the Premier League has a worldwide following.

The app fits in with The Times’ strategy of focusing on finite, finish-able products, from a daily tablet app to its website.

“We’re pursuing the idea of editions everywhere,” Petrie said. “An edition is something that can be finished. When you’ve read it, you feel up-to-date; you’ve been told what you need to know for the day or the week. The weekly app takes that idea as well. This idea will appear in more and more of our products as time goes on because it’s resonated so well with our readership.”

It’s a challenge to pick stories that will remain relevant up to a week after they were first published. It’s also potentially difficult to keep up with the news cycle: When David Bowie died last month on a Monday, much of The Times’ more in-depth coverage was published in the following Sunday’s paper, which was too late to make that week’s Weekly edition.

The Times might eventually write original stories for the weekly app. For fast-moving stories, like the presidential primaries, it might do a write-through that ties multiple stories together. It’s planning to add video and other visual elements, too.

For now, though, the process begins with those emails that Jacobson begins sending himself on Thursday mornings. The stories then have to be copied and pasted into the editor that The Times built for the app.

The editor was built on WordPress and has two main sections. The first is a dashboard that shows how many stories have been added and the time until the app’s deadline. The other half of the tool is where each edition of the app is actually built. When editors add headlines, body text, and photos, the software mimics what users will ultimately see in the app or on the web, where users can share stories that can be accessed for free.

“We’ve attempted to model this visually as close to the app as possible, so you literally feel like you’re building the real edition,” Chris Hutchinson, The Times developer who built the editor said.

Within the next few weeks, The Times plans to introduce a more automated system that will pull from the paper’s recently launched content API and autofill everything into the editor, Hutchinson said. He plans to create a Google Chrome extension that will let editors automatically import a story’s details into the editor, along with notes about why they picked a story, and changes they’d like to make.

The Times also publishes on Apple News (it’s actually one of the few places where you can read its stories for free). Hutchinson said that as the weekly app’s processes are automated, he plans to merge the feed used to power Apple News with the one that provides stories for the app.

Editors will still be able to alter headlines, add in new images, or change any other details to suit the articles for the app. The Times also plans to use the editor for other projects, and it wants to maintain the ability to create articles from scratch if necessary. “It’s really important for us to be able to tailor the article to the particular platform,” Hutchinson said.

The Times’ developers also think about ease of use for staff. Last year, for example, they developed a series of tools to make it easier for journalists to create things such as newsletters, charts, and social media cards. That’s the approach The Times took with the editor tool for the weekly app as well.

As the paper continues to experiment with new formats — new proprietary apps, Apple News, Facebook Instant Articles, or whatever social platform is next — the developers want the paper’s decisions to be made on the merits of the journalism itself and whether it’s the right way to reach readers.

“Having good, stable bases like this will mean that we can make better decisions about how we choose to publish editions in the future,” Hutchinson said, “and where we choose to publish them.”

Photo of clocks in the Times newsroom by Joseph Lichterman/Nieman Lab.

British tabloid The Sun is dropping its paywall and ditching its tablet app

Laura Hazard Owen — Fri, 30 Oct 2015 15:52:49 +0000

Add another one to the list of news organizations pulling down paywalls and dropping tablet apps. The Sun, the British tabloid owned by News UK, is dropping its paywall and also killing off its tablet app as of November 30.

Sun+, which cost £7.99 per month, had 225,000 subscribers as of December 2014, the last time it released a number. The paywall covered The Sun’s websites (including the Irish and Scottish versions), its mobile app, and the “Sun Goals” soccer-related smartphone and tablet app.

All of those will now be free. In addition, The Sun noted in an FAQ Friday that it’s getting rid of one of its tablet apps, while keeping — and continuing to charge for — another iPad app. “The Sun is moving to having a uniform digital presence across smartphone, tablet and online,” a spokesman told me.

The Sun Tablet app

We are discontinuing this app and it will no longer be available to access or purchase from any app store. If you would like to view The Sun content on your iPad or Android tablet you can download the Sun Classic App. See below for details.

If you took out an Apple subscription to the Sun Tablet, you will not be charged after October 30, 2015 and you will no longer be able to access the app from November 30, 2015.

The Sun Classic App for tablet:

You will be able to purchase a subscription to the Sun Classic app from The Sun website from November 30 for £4.99 a month. This will give you access on your iPad or Android tablet devices.

Alternatively, you will still be able to purchase access to the iPad version of the app directly through Apple’s App Store for £4.99 a month.

(Confused? Sun Classic is an app that simply provides a digital replica of the daily print edition.)

Sun+ had launched in August 2013. Mike Darcey, then CEO of News UK, told The Guardian at the time: “This decision comes from a deep-seated belief that it is just untenable to have 2.4 million paying 40p for the Sun at the same time as a bunch of other people are getting it for free.”

Darcey was recently replaced by Rebekah Brooks, who sent a memo to staff announcing the changes. Here’s her email:

I recently shared with you the future priorities for the company and am excited today to tell you more about our plans for the first of these: growing The Sun’s audience. This will mean setting The Sun predominantly free in the digital world from November 30. By happy coincidence, this is also Cyber Monday, one of the best-performing days of the year for online retail.

Recent months have been filled with experimentation at The Sun. The standalone political site SunNation won plaudits at election time, we increased the number of shareable stories on social media, we entered platform partnerships with Apple News and we will be a major player in Facebook Instant Articles.

The biggest recent success story has been Dream Team. We have a record 1.25m customers signing up to be managers and our content has reached 276m people on social media. Normally, we see interest drop off as the season progresses. This year, it’s going the other way thanks to Harry Burt and Harry Haydon’s clever use of engaging editorial content.

Entering this new chapter for The Sun, we are in a strong position thanks to the many learnings we bring from the paid-for era. We know more about our readers than ever before. Our recent acquisition of Unruly, and our ongoing collaboration with colleagues at Storyful, further bolsters our position and will play a big role in how we supercharge our digital advertising capabilities.

When all of this is added to our new blended revenue model of advertising, premium content and revenue streams such as Dream Team and other exciting opportunities on the horizon, I have every confidence that this digital evolution will ensure that the unique space The Sun occupies in British culture will be preserved – and enhanced.

We believe taking this step will further our prospects for long-term growth, drive larger audiences for our valuable content in the UK and Ireland, and help preserve our ability to create great journalism for our readers for years to come.

As of November 1, Sun+ customers will no longer be billed for reading The Sun’s digital content and we will be transitioning to a largely free world by the end of the month. Successful paid-for products such as Club Dream Team and the pdf tablet app will be retained.

The Sun faced steep competition from Daily Mail Online, which is free. The Guardian reported that The Sun has also hired Keith Poole, who was the managing editor of Mail Online in the U.S., “as digital editor to bolster its team in the transition to a free site.”

Google and Storyful are launching YouTube Newswire, a feed of verified user-generated videos

Joseph Lichterman — Thu, 18 Jun 2015 12:54:59 +0000

Storyful and Google News Lab today are launching YouTube Newswire, a dedicated YouTube channel meant to serve as a resource for journalists looking for user-generated videos from around the world by highlighting newsworthy videos uploaded to YouTube that have been verified by Storyful.

The social news agency’s expanded relationship with Google is just the latest area of growth since it was acquired by News Corp in December 2013. Beyond its core business of working with paying news clients, Storyful has begun working with brands and ad agencies, developed a creative desk to focus on viral videos, and built out its product team.

Part of Storyful’s growth plan has also been to enter public-facing partnerships like the one it’s announcing today with Google. In 2014, it began working with Facebook by creating FB Newswire, a feed of user-generated content originally posted on the social network. Its presence on Facebook has since grown to include FB Techwire, which covers tech news. Earlier this year, Storyful also partnered with Youku, the popular Chinese video-sharing platform.

Storyful’s deals with the various social platforms present an opportunity for the company to showcase the type of work it does and potentially attract new clients for its paid services. “The platforms for Storyful are both the source and the destination for great content and powerful storytelling,” Storyful managing editor Áine Kerr told me via email. “But those platforms are getting noisier and it’s our job to find the stories worth telling and help journalists do great journalism using the power of eyewitness media.”

YouTube Newswire is free for journalists to use, and links to the videos will be tweeted from a dedicated Twitter account and also featured in a daily newsletter. There are global and regional feeds on YouTube Newswire with videos covering news, weather, and politics.

YouTube has always been key to Storyful’s work of verifying social content — since its founding, Storyful has verified more than 100,000 different videos on the platform — and the two have partnered in various capacities since 2011. Together they’ve worked on projects such as CitizenTube and the Human Rights Channel. It’s also worked with YouTube to cover breaking news and elections around the world through dedicated channels. Storyful maintains an Open Newsroom group on Google+ where a group of several hundred journalists discuss verification and share tips and techniques.

Storyful is also a YouTube partner, which lets it help users it works with monetize their videos. In the two years since the company began managing videos for YouTubers, Storyful-managed videos have accumulated more than 2 billion views.

Google today is also announcing two other programs in which its partnering with Storyful: the First Draft Coalition and the Witness Media Lab. The First Draft Coalition is an education-focused effort that brings together experts in social media to develop resources explaining how to best verify user-generated content. The Witness Media Lab builds upon the already existing Human Rights Channel and will feature videos on issues of human rights around the world.

Why Storyful is expanding its business to work with brands

Joseph Lichterman — Tue, 31 Mar 2015 14:17:24 +0000

DUBLIN — During halftime of a February 2013 basketball game at Mississippi’s William Carey University, cheerleader Ashlee Arnau ran toward the center circle, did a front flip, grabbed a basketball, and flung it into the basket from half court.

The video went viral. An original video of the shot has nearly 1 million views on YouTube, the highlight was shown on ESPN’s SportsCenter, and Arnau appeared on the Today Show.

But in January, nearly two years after it was filmed, the video turned up in another place, alongside videos of a jet skier doing a backflip, a horse rolling around in dirt, and a series of other Internet videos: an AT&T commercial.

For the campaign, AT&T worked with Storyful, the social news agency, which in recent months has expanded its reach beyond news organizations to focus on working with brands.

Storyful, founded in 2009, built its reputation around finding, verifying, and licensing videos and other social media content around news stories, from big news events like the Arab Spring protests and the war in Syria to smaller viral moments. The Dublin startup was acquired by News Corp in December 2013, and its focus on expanding its business to commercial and creative work is just one of a series of changes that have been implemented since the sale.

In December, Storyful’s chief revenue officer Rahul Chopra took over the role of CEO from founder Mark Little. Little took on a new role, director of editorial innovation, as a number of other high-level hires were also made last year. It’s also been reported that Rebekah Brooks, the former News of the World editor ousted as part of the paper’s phone-hacking scandal, was set to be rehired by News Corp and would be involved with Storyful — though Little said recently “we’ve had conversations” but “she’s not taking over control.”

Storyful has built out a creative desk, grown its product team to work on new tools to detect trends on the social web, and also launched public partnerships with Facebook.

“We’re in the business of diversifying what Storyful does at the moment,” Little told me. “We built a business model around news, and part of the reason why I sold the company to News Corp was to allow us to build out the business model that supports the journalism that we do.”

Over the past seven months, brand marketing has grown to make up 10 percent of Storyful’s business, chief revenue officer Michael Sadicario said, estimating that the company has worked with up to 2,000 clients in that area.

In March, Storyful announced partnerships with public relations firm FleishmanHillard and Youku, a popular Chinese video-sharing platform. The company also worked with Pepsi at SXSW in Austin to produce interactive social media displays showcasing user-generated content in multiple locations around the conference. As audiences continue to become more fractured, brands are looking to different areas to reach customers, and Storyful is pitching itself as a way to help them “identify with real people and real things that are happening in the world,” Sadicario said.

“There’s no video of someone saying, ‘Oh my God, I can’t get wifi right now. AT&T to the rescue!’ But there are stories that help them engage on social media and other distribution channels,” he said.

A demand for viral content

Though hard news is still Storyful’s bread and butter, it’s seen increased demand for viral content, like weather videos and memes, from both brands and newsrooms. As a result, Storyful created a dedicated creative newsroom. Historically, its newsroom had covered big events like the Super Bowl or the Oscars, but that duty has been passed onto the creative team, Storyful news director Mandy Jenkins said in an interview at Storyful’s Dublin headquarters. “Now we can have a team that really can focus in on that stuff,” she said. “Because in that case, you’re not necessarily caring about getting a video from a bystander. It’s the conversation element, so getting those tweets and vines and memes.”

To accompany the launch of the creative team, Storyful built Trendswire, a tool it developed to better detect and track what’s trending on the social web. Storyful’s goal with this is to help its staffers find better second-day stories surrounding the reaction to whatever is trending, chief product officer Adam Thomas told me.

“What’s all of the crucial social media reaction to it? How can I understand this in a better way? Where are the key contacts and key players in this story? Do they have other social accounts that may play into the story? That kind of context and background allows us to do more than regurgitate the story and actually take an original angle on it,” Thomas said.

As part of this effort, Storyful is continuing to look toward other areas of the Internet to mine for trends, as well as places where it can gather news; Little emphasized that the company needs to focus on multiple social platforms. Last week, Storyful announced a partnership with the messaging service Firechat. Little said Firechat could become a “mobile newsroom” to help reach sources and gather communities in locations where it’s currently difficult to do so. For distribution, however, he said he’d focus more on WhatsApp or Snapchat as means of broadcasting to an audience.

“People should be choosing the way they expand with a real consideration of the fact that nothing will be the same in two years,” Little said. “Probably the dominant network on the social web in five years’ time is being tinkered with by a 17-year-old in some basement in Rangoon rather than coming out of some major international social brand in Palo Alto or San Francisco or Mountain View.”

Rapid growth

Storyful has seen significant growth on the technology side in the past year — growing from four staffers to more than 20, according to Thomas — as it continues to expand. In November, it announced the creation of an R&D center in its Dublin office to upgrade the company’s core technology.

Since it’s grown so rapidly, Storyful has split its technology staffers into three distinct teams: One group is focused on improving its internal workflow tools, another on bettering how Storyful content is delivered to its clients, and the third on social discovery and working on algorithms to better find trending topics — “the slightly more top-secret stuff,” as Thomas put it.

The product team works in two-week product cycles, and when I visited the Dublin newsroom earlier this month, they’d just finished developing a new feature in the Storyful Newswire called Collections, which is meant to be a more effective way of tagging and organizing content.

“Right now, the newswire basically gives these what we call Storylines, which are basically primary tags for collecting content,” Thomas said. “But they’re just a little bit too rough and ready for our editorial team, and we wanted to approach a more holistic sense of pulling in a bunch of content.”

He gave the Charlie Hebdo attack as an example of a story that would be suited for the new collection system, with the angle changing so rapidly from the specific events in Paris, to the larger reaction and manhunt in France, and then to the global response.

“There’s sort of no way to do that under a tagging system,” Thomas said. “You really want to bring that into a collection.”

So after the developers build something like Collections, they hand it off to Storyful’s editorial team, who then try to “break it as much as possible,” Thomas said. They then give feedback to the developers who will continue to build and iterate.

The relationship between the editorial and product teams has gotten much closer in the past six months or so as the waves of new staffers on both sides have gotten accustomed to their new roles. But over time, that relationship has become more effective and beneficial for everyone, Jenkins said, because “we want to avoid having them make us a tool we don’t want to use.”

“We’re eating our own dog food and everything here by using the tools that they’re making — not only for us to use, but externally too,” she said.

From silos to aggregators: On mobile, apps that cross news org boundaries continue to have a pull

Simon Owens — Wed, 10 Dec 2014 14:30:54 +0000

For a brief time, starting in 2010, the news industry convinced itself that it could put the toothpaste back in the tube, and Josh Quittner counted himself among the most optimistic. In April of that year, Apple began shipping the first model of the iPad, and before even the first unit sold it was already being hailed by some as print media’s savior. With the iPad’s high-quality screen and app-based ecosystem, publishers were actually going to have a platform on which to charge for content — and readers, unaccustomed to this new device, could be retrained to pay for their news. The consensus on this was so strong that Rupert Murdoch announced that his News Corp. would invest millions in launching an iPad-only publication called The Daily. Public relation flaks for magazine companies, after years with little good news to promulgate, furiously launched press releases announcing shiny new magazine apps that readers could soon purchase and download.

At the time, Quittner was director of digital editorial development for news, sports, and business at Time Inc., and he was placed in charge of leading the stable of magazines into this new digital frontier. “The first iPad magazines were Time magazines,” he told me recently. “I’m very much one of those people who believed that apps would give us another bite at the apple, that we could control the user experience to a far greater degree than we could on the web and that we could bring high quality advertising back.”

But even before the first issues arrived on the app store, he began to grow worried. Within Time Inc., there was a heated debate between the editorial product team and the business side over how to price the app. The business side, which ultimately won the argument, wanted to charge $4.99 per download, the newsstand price for the print issue. “What I believed was that we should totally charge for it, but we should charge the smallest amount possible,” he said. “Because this wasn’t even a beta technology — it was an alpha technology. We didn’t know which ways pages should turn, whether there should be a scroll or pagination. There were so many questions we didn’t know the answer to, and they were compounded by the fact that the download sizes were huge.”

Readers, Quittner believed, would treat these news apps as a novelty, and though Time could probably sell a fair number of $4.99 issues early on, that novelty would soon wear off and normal market forces would apply. It would then have to compete with every other available app, magazine or otherwise. “We were also competing against Angry Birds, which was popular at the time. Angry Birds was hours of entertainment, and a magazine, even a great magazine, offers maybe a half hour of entertainment. It just didn’t seem like the math worked out.”

The iPad wouldn’t just allow publishers to charge for content — it also offered an opportunity for more ambitious design, something that the web, where the focus was geared toward generating clicks on more content, had denigrated. At first, magazine designers were delighted that they could work on a print-like product. “Initially what happened was that the magazine would put in the extra hours to conform Time to the iPad,” Quittner recalled. “It was just another 15 percent effort — 15 percent more time to make an iPad version.” But then they decided to launch a version for the iPhone, and then device makers launched the first Android tablets, and soon they were having to adapt each issue to multiple screen sizes and operating systems. Eventually, Time needed to hire more designers to meet the demand, which then placed more pressure on the apps to generate revenue.

In 2011, Quittner took a job as editorial director for Flipboard, the news aggregation app that pulls in content from hundreds of media partners, and it was then that he came to the conclusion that Time’s attempts to build and maintain its own mobile app was futile. “It was like a lightbulb went off in my head,” he said. “Why are we in the publishing business spending so much time doing technology when what we should be doing is what we’re great at, which is finding and packaging truth.” A news company attempting to innovate within tech, he analogized, was akin to CNN deciding to build HD televisions just because it happened to be a television network. “This stuff is just moving too fast, and it’s really hard to do…My god, I work at a company with the smartest technology people in the world, and it takes every bit of intelligence and skills on their part to keep up” with the fast-moving mobile ecosystem.

It would seem that much of the news industry has evolved to agree with Quittner’s assessment. Though it’s not uncommon for a news company to produce and maintain a mobile app, there’s certainly been less emphasis on these individualized products in recent years. (I remember a few years ago attending the New Yorker Festival, which constantly broadcast a commercial starring Jason Schwartzman that promoted the magazine’s iPad app.) According to the Alliance for Audited Media, digital replicas of magazines made up just 3.8 percent of paid circulation in 2014, up only slightly from 3.3 percent in 2013 — not exactly exponential growth. And in December 2012, less than a year after the launch of The Daily, News Corp announced its shutdown, citing lackluster sales.

Meanwhile, news companies are consistently inking deals with aggregation apps like Flipboard, agreeing to allow their (expensively produced) news content to live within its app in exchange for a cut of ad revenue. Last year, Flipboard announced it surpassed 100 million users, and even The Wall Street Journal, which maintains one of the most successful newspaper paywalls, has inked a deal to appear on the app.

Traditional publishers have always leveled a skeptical eye at aggregation outlets, and many within the industry openly balked at the news that Facebook hopes to host news content on its mobile app for a share of advertising revenue. So why are they risking control of their content — and brand — by appearing on these outside apps?

“I think that publisher after publisher is seeing that the user does not want to go to one single source for all their information needs,” said Rich Jaroslovsky, the VP of content at SmartNews. “They want to take advantage of the greatest diversity of voices available.” Mobile apps, unlike the open web, do not allow for frictionless discovery, and therefore publishers are forced to place their content where the users already are. And in 2014, many of those news consumers are opening up aggregation apps, not individual mobile versions of magazines and newspapers.

SmartNews, which only recently launched in the U.S., originated in Japan and has built up a base of 5 million active users. As detailed in a recent Fast Company article, its cofounder Ken Suzuki noticed while riding the subway that his fellow passengers were glued to the mobile games on their phones. Because Internet access is near impossible underground, these passengers didn’t bother trying to access the news. SmartNews tried to tackle this problem.

Jaroslovsky, a longtime managing editor of the Wall Street Journal’s website, was hired to forge agreements and partnerships with U.S. publishers. The draw for users and publishers, he argued, is SmartNews’s selection algorithm, which sorts through 10 million URLs a day and chooses about a thousand stories, based on a number of social and other algorithmic cues, to be displayed. Smart personalization and the ability to tailor what’s seen to the user’s interests is a prized feature on many of these aggregation apps.

Roman Karachinsky, the CEO of News360, told me that his company conducted research a few years ago, prior to launching its app, on user news consumption. “They spend half the time filtering and half the time reading and consuming,” he said. “And we thought that was completely lopsided. People don’t want to spend half their time looking at headlines and deciding, ‘Do I want to read this or not?’ They want to see headlines that are all interesting. The research showed that only about 20 percent of the headlines in your feed during the day are something you’re interested in, while 80 percent was stuff that you needed to filter out.”

Allowing the user to pick what topics she’s interested in is only half the battle, he said, because users are notoriously bad at articulating their preferences. With News360, every action you take — whether it’s more passive signals like opening and scrolling through a story, or more active indications like giving an article a thumbs up or thumbs down — affects what content you see. And it’s the ability to serve up the most relevant content to an individual user, Karachinsky believes, that will differentiate one aggregation app from the other: “Once you get past the initial hurdles of having a great UI, having enough content partners — those are not super difficult to achieve — the thing that’s going to set each of us apart is the algorithm.”

Karachinsky may have been underestimating the role of which content these apps have access to and how that content is displayed in determining how valuable the app truly is. Because most of these companies are only a few years old, there’s still no standard approach to how a news aggregation app handles content and how it pays for it. Some host nearly all their content within the app itself, while others just produce headlines and summaries and link directly to the news website. Others straddle the line between copyright infringement and fair use by allowing the user to choose a stripped-down version of an article within the app.

Nearly all the apps I researched for this article offer some kind of revenue share to their partners, rather than paying a set fee to license it. SmartNews, for instance, turns over 100 percent of ad revenue that appears on article pages to the publisher and plans to make money for itself by placing ads on the channel sections (where the headlines are displayed) of the app. News Republic, a France-based company, offers a 50 percent cut of ad revenue to publishers.

Sasha Pave, vice president of marketing at News Republic, told me that, because the user experience is better in these mobile aggregation apps, they can offer higher engagement numbers than a publisher can achieve in its own standalone app. News Republic has about 3 million monthly users — a relatively small number compared to the desktop audiences of many major news outlets, but these users consume over 300 million pages a month and flip through an average of 15 to 30 pages per session. Most publishers consider themselves lucky if they can get their website bounce rate below 80 percent.

Pave explained how working within the app stores — where every change, no matter how minor, must be approved — makes it difficult to iterate and test out new ideas. The Huffington Post, in its early days, was famous for rolling out new features the same week they were thought up. A site built on WordPress is extremely easy to modify and test out new features on the fly. Not so for mobile apps. “The app market is really unique,” he said. “There are a million apps on iTunes and many more on Google Play. It’s a tough, tough environment. You can have a huge outlet like TechCrunch develop a mobile app, and it just gets buried. They can be the top of the world on the web, but on Google Play and iTunes, it’s hard to get visibility, and it’s hard to retain users. It involves a lot of coming back to very iterative development where you have to publish and deploy QA” — quality assurance testing — “whereas on the web you can do things much more quickly.”

But for those that have managed to develop that audience, it doesn’t take much arm twisting to make publishers understand the value of it. “Let’s put it this way,” said Quittner. “I don’t have to do very much convincing in my job. I can’t remember the last time I had to actually convince someone to come on to Flipboard.”

To be sure, publishers haven’t completely given up on developing their own apps, as evidenced by The Washington Post’s big announcement that, under the encouragement of owner Jeff Bezos, it had developed an app that will appear preinstalled on new Kindle Fires. But even in cases where outlets are developing new apps, they’re doing so with aggregation in mind. In an interview with Nieman Lab, Stacy-Marie Ishmael confirmed that BuzzFeed’s future app will link to outside sources. But even BuzzFeed, which has mastered the art of viral news, is a content partner on Flipboard. It seems the king of listicles can’t resist Flipboard’s massive audience. As Jaroslovsky put it to me, “You can’t sit back and say ‘The world will beat a path to my site.’ I think those days are gone and I don’t think they’re coming back.”

This Week in Review: Ferguson and press freedom, and BuzzFeed’s $50 million boost

Mark Coddington — Fri, 15 Aug 2014 14:38:52 +0000

A $50 million infusion for BuzzFeed: BuzzFeed took a big step forward beyond listicles this week, getting a $50 million investment from venture capital firm Andreessen Horowitz that will fund a major expansion that includes new content sections, a technology incubator, and more funds for its video division BuzzFeed Motion Pictures. Chris Dixon, an Andreessen Horowitz partner who will join BuzzFeed’s board, explained why the firm is making the investment, and The New York Times’ Mike Isaac laid out what BuzzFeed will do with the money, while the Lab’s Caroline O’Donovan went into more detail about its new, more autonomous divisions: Buzz, BuzzFeed News, and BuzzFeed Life.

One aspect of the announcement that caught quite a bit of attention was Dixon’s statement that his firm views BuzzFeed as more of a tech company than a media company. Gawker and New York Observer alum Elizabeth Spiers objected to that description, and tech writer Ben Thompson sifted through the claim, concluding that while BuzzFeed is still primarily a media company, it has a disconnect from traditional media logic and an ability to cheaply scale that make it uniquely valuable.

Recode’s Peter Kafka looked at BuzzFeed’s $850 million valuation and said that if BuzzFeed is a media company, then that number is a huge overvaluation, but if it’s a tech company, it’s a steal. And for everyone saying “$850 million for a bunch of listicles and cat GIFs?!” Fusion’s Felix Salmon argued that BuzzFeed is different from other media companies in that it doesn’t sell audiences to advertisers, but instead sells its expertise in creating content that young, mobile audiences love. “The best way to think of BuzzFeed’s various products, then, is probably as a proof of concept: it’s a way to show advertisers that the company is able to reach a large, young, mobile, social audience in a multitude of different ways,” Salmon wrote.

Wired’s Marcus Wohlsen examined what it means for BuzzFeed to be, as Dixon called it, a “full-stack” startup, and investor Om Malik looked at the potential hazards for BuzzFeed, specifically its reliance on Facebook and the continued success of native advertising. The Awl’s Matt Buchanan noted that BuzzFeed is moving even deeper into Facebook and other social networks, creating content that only exists there, rather than on BuzzFeed’s site. And TechCrunch’s Josh Constine said the native ads on which BuzzFeed depends may be a fickle form.

As Gigaom’s Mathew Ingram pointed out, BuzzFeed’s investors are betting that it can scale into a massive media company without losing the agility it has so prized, and Bloomberg Businessweek’s Felix Gillette noted that its cost of production and scale of competition are about to increase just as dramatically as its cash on hand. The New York Times’ Claire Cain Miller explored BuzzFeed’s move toward higher-quality content and the larger accompanying shift online from search to social.

Elsewhere, Mike Shields of The Wall Street Journal looked at the deal’s implications for one of BuzzFeed’s biggest competitors, The Huffington Post, and Forbes’ Eric Jackson made the case that Yahoo should have bought BuzzFeed. Gawker’s J.K. Trotter noticed that BuzzFeed has removed more than 4,000 posts this year, and Slate’s Will Oremus talked to BuzzFeed’s Jonah Peretti about why: The posts didn’t meet its editorial standards for a variety of reasons, and they were created before BuzzFeed saw itself as journalistic. Poynter’s Kelly McBride looked at the ethics of unpublishing in light of the situation.

Gannett’s spinoff and future of print: Gannett became the latest media company to spin its print properties off from its broadcast properties into a separate company last week, announcing a split set to take place next year with the broadcasting unit assuming all of the company’s debt. The Lab’s Ken Doctor, who had suggested just a day before the announcement that Gannett could use such a split, gave several observations on the current wave of breakups, arguing that despite the initial cash infusion for newspaper units, they’ll ultimately result in less of a financial cushion for those properties.

Journalism professor Jeff Jarvis argued that these newspaper companies are being spun off because the business is going to continue to get worse and they’re punting on the work of transforming it. “What these spin-offs signals is that media companies do not have the stomach, patience, capital, or guts to do the hard work that is still needed to finish turning around legacy media,” he wrote. The New York Times’ David Carr painted a similarly depressing picture of the spun-off newspaper industry, but concluded that its decline is no one’s fault in particular. Jarvis countered that the decline of newspapers has indeed been journalists’ fault, and it should prompt not fatalism but renewed action and innovation.

At USA Today, Michael Wolff was more optimistic, seeing some potential for newspapers to rethink what business they’re in and reinvent themselves. And Poynter’s Rick Edmonds said there’s no reason to declare these newspaper spinoffs failures before they even occur, and USA Today’s Rem Rieder said there’s a way forward for newspapers despite print’s decline: Find enough in digital subscriptions and advertising to keep revenue flat after years of declines. The Atlantic’s Derek Thompson added that while there’s no certain model for making money off of news, there are several promising avenues, many of them in digital-native outfits or organizations with substantial private funds behind them.

Gannett also announced it’s restructuring the newsrooms at five of its papers to cut down on resources for editing and design while increasing the emphasis on analytics, as Poynter’s Sam Kirkland reported. Columbia Journalism Review’s Corey Hutchins talked to an editor of one of the papers about what the changes will mean, and Jim Romenesko rounded up details of the news that journalists have to re-apply for their jobs, as well as the new job descriptions.

Gawker responded by first disabling all images in comments as a temporary solution, then bringing back its old pending comment system, in which only comments from approved users are immediately visible, and the rest are put in a separate “pending” queue that’s visible only with an extra click. As both Business Insider’s Caroline Moss and the Lab’s Justin Ellis pointed out, the tension here is between Gawker founder Nick Denton’s vision of its commenting platform, Kinja, as an open, collaborative, and anonymous environment and the practicalities of allowing that kind of freedom to Gawker users.

BuzzFeed’s Myles Tanzer talked to Gawker staffers who expressed frustration at the disconnect between Denton’s vision for Kinja and the difficult, time-consuming reality of wading through comments looking for quality material. And PandoDaily’s Paul Carr pointed out the inconsistency between its handling of abusive content that affects its staffers and the content it posts about others.

Reading roundup: A few other stories and discussions that have emerged in the busy last couple of weeks:

— After making a bid for Time Warner earlier this summer, Rupert Murdoch announced his entertainment media company 21st Century Fox was walking away from negotiations with Time Warner, which had been taking a hard line and refusing to negotiate. As CNN’s Brian Stelter reported, media watchers still see the deal as in play eventually, even if it’s no longer seen as inevitable. The Guardian’s Heidi Moore wondered whether we’re seeing the decline of the great media moguls, without anyone to take their place. Meanwhile, News Corp’s profits dropped, but Murdoch continued to express his bullishness on print.

— The New York Times announced that it would now refer to torture by that name, rather than the term “harsh” or “brutal” interrogation techniques. The Freedom of the Press Foundation’s Barry Eisler criticized the paper’s reasoning for finally using the term, and journalism professor Dan Gillmor called for the Times to apologize for referring to it incorrectly for years. NYU’s Jay Rosen analyzed the factors behind the Times’ refusal to use the term for so long and its change of mind.

— In the ongoing battle between Amazon and the book publisher Hachette, more than 900 writers paid for ad in The New York Times siding with Hachette and urging readers to complain to Amazon. Amazon responded with a letter to readers of its own, urging them instead to complain to Hachette. TechCrunch’s John Biggs and the Times’ David Streitfeld criticized Amazon for its misuse of a quote from George Orwell, and writers John Scalzi (two posts), Chuck Wendig, and Matt Wallace picked apart Amazon’s argument. Writer Christopher Wright and Slashgear’s Nate Swanner gave more “a pox on both their houses” analysis.

— Two potentially useful posts: The American Press Institute’s Kevin Loker on the best strategies for using events to generate revenue for news organizations, and journalism professor Dan Kennedy with a guide to blogging like a journalist.

— Finally, two thought-provoking pieces: Mat Honan of Wired on what happened when he liked everything on Facebook for two days, and Ethan Zuckerman in The Atlantic on the ad-based model as the Internet’s original sin (along with Jeff Jarvis’ response).

Photo of Wisconsin protest in support of Michael Brown by Overpass Light Brigade used under a Creative Commons license.

The newsonomics of life after newspapers go solo — and new intrigue in L.A.

Ken Doctor — Wed, 13 Aug 2014 17:49:15 +0000

We’ll remember summer 2014 as Splitsville in the U.S. newspaper industry. We’ve seen both the expected (Tribune) and the unexpected (Gannett, Scripps/Journal Media). The final orphaning of newspaper properties in the U.S. is nearly complete.

But we’re just beginning to see the impact of that orphanage, as the quarter-by-quarter results of the standalone newspaper-only companies roll out (“10 takeaways from Gannett’s blockbuster announcements”). New rounds of troublesome numbers could precipitate still more sales and combinations of properties. Southern California — ground zero for daily newspaper bankruptcy and turmoil — remains Exhibit A.

This week’s Tribune Publishing results are instructive. Tribune’s eight papers, led by the Los Angeles Times and Chicago Tribune, were down 3.8 percent in revenue. The usual culprit: print advertising. Overall advertising is down 7.1 percent, with detail on print vs. digital performance unavailable until next week. Circulation revenues helped offset that drop; they were up 2.3 percent, due to higher subscription pricing. The thinness of margin is all-too-apparent: The company made just $15.2 million in net income, down from $21.9 million a year ago. (The first six months’ net income comes in about $27 million, down from $43 million a year ago.) The Q2 profit is small in dollars, and represents a razor-thin 6 percent margin.

Though the stated results are somewhat clouded by the second quarter being the newspapers’ final reporting as part of the combined Tribune Company, it’s the expense side that will probably see more split-related change than the revenue side going forward.

The Tribune’s revenue performance mirrors that of two other newly split companies. Time Inc’s first standalone report, too, showed it staring into a small but nasty revenue hole. Time Inc. was down 2 percent year over year, attributable to 5 percent decline in circulation revenue; optimistically, its 12 percent digital ad increase helped swing advertising to a 3 percent positive. News Corp, which split last summer, has been similarly challenged. It reported a (currency-adjusted) 5 percent decline in news publishing revenues, largely due to ad dropoffs.

(Meanwhile, even those more highly valued broadcast-centric companies emerging from the split are showing they’re not necessarily high fliers — they’re just in much better relative shape than distressed newspapers. For instance, Tribune’s broadcasting operations showed a small $3.8 million decline in advertising, although that was more than made up by increased retransmission revenues. Gannett’s recent broadcast ad results showed similar weakness. Both companies’ acquisitions provide them good banner headline increases in revenue, but the underlying digital disruption of their core advertising businesses will become more noteworthy over time.)

The splits offer the choice of your favorite pop tune — “Breaking Up is Hard to Do,” or “One (Is the Loneliest Number),” perhaps. With an inflation rate of 2 percent, and revenues dipping 2-5 percent, news publishers will need a big shovel to dig out. They’re at least a handful of digits away from just staying even, despite all the many publisher efforts at diversification or developing alternative revenue streams.

At the L.A. Times, a surprising new publisher joined this struggling crowd. Tribune Publishing CEO Jack Griffin’s first big appointment is a little bolt out of the blue: Austin Beutner. Beutner is hardly a household name, but he’s a player in L.A. A venture capitalist turned one-dollar-a-year salaried L.A. Deputy Mayor for “jobs,” the appointment of the 54-year-old Beutner signals an effort to shake things up — and maybe set things up for the future.

First, he’s not a newspaper guy by trade, a member of the brotherhood of usual publisher suspects. Second, he’s a Los Angeleno (since 2000), glad to call himself a civic booster. Ever since 2000, when the Tribune Company bought Times Mirror and the Times, the civil war between Chicago and L.A. has simmered and occasionally boiled. Times leadership has bristled at corporate and Chicago authority, all of that exacerbated by the nonsense of the Sam Zell ownership years and the ceaseless wielding of the budget-cutting knife. Now Beutner, a guy who doesn’t need a job, is poised to try to break barriers of past rivalries and past strategic thinking.

He, along with his new boss, Jack Griffin, will need help. Griffin lays out the right playbook. It includes modest increases in reader revenue (with a smarter, company-wide digital/all-access system finally rolling out within six months among all eight newspapers, which have haphazardly applied the wider lessons of paywalls) and marketing services (growing, but still small in revenue). But the issue for Beutner and Griffin, and for leaders of all the newly standalone companies remains time. Without those new revenues, only more cost-cutting — further weakening products — can maintain even those meager profits.

The naming of Beutner fuels a familiar parlor game: guessing who may be Tribune Publishing’s next owner.

Oaktree Capital Management, Angelo, Gordon & Co., and JPMorgan Chase currently own 40 percent of the company and control it. We’ve chronicled the will they/won’t they sales odyssey of the past year or two (“The newsonomics of the Kochs: The impact on the L.A. news landscape”).

Austin Beutner occupied a role in those dramas, expressing interest in buying the Times (or possibly all of Tribune) when it looked like the company would be sold, before it decided to first split its newspapers from TV assets last year. He’s a smart guy, and now he’s in the driver’s seat at the Times. That’s a perfect starting point for what could be a “management buyout” of the Times — and maybe more properties — as Tribune Publishing’s tax spinoff clock winds down over the next couple of years.

By then — or sooner — we may see rollups, or maybe rolldowns, in the 20 million-person population area ranging from Simi Valley to the Mexico border.

Look to Orange County, to start. The news keeps coming out of Aaron Kushner’s always shape-shifting family of Registers.

It now looks like owner/publisher Kushner is getting closer to closing on the sale of the Register’s headquarters building, at a sales price of about $27 million, as reported by the Orange County Business Journal. (The Register would then likely lease back space in the building. That would mean that none of the major dailies in southern California any longer owned its own building — another a sign of Splitsville: Real estate is being divorced from newspapers just as surely as broadcast is.)

Further, Kushner’s Freedom Communications finally settled one of three claims/suits against it. On July 31, the L.A. Superior Court approved a $4 million arbitration award to former Freedom execs Mitch Stern and Mark McEachen. That case, over contracted severance payments, gives the execs a lien on real estate parcels that Freedom owns — and which are also for sale.

In this case and in another, Aaron Kushner has countered claims in part by blaming the “misrepresentations” of others. In an April 23 judgment, Judge Luis Lavin failed to find those claims credible. The misrepresentation defense could take on its own irony, as Kushner’s own representations to those with whom he had financial dealings have come under fire.

In that April 23 decision, the judge also considered the necessity of providing Stern and McEachen an attachment: “Petitioners’ contend that Freedom will likely not be able to satisfy its severance payment obligations due to its perilous and continually worsening financing condition. The Court agrees.”

What is that financial condition? Freedom is a privately held company, so we can only judge from fragments. In June, its seemingly rushed buyouts of about 70 employees and furloughs (forcing two-week unpaid leaves that all employees had to take within the following six weeks) screamed panic to many. While word of slow-paying key Register vendors is rampant, Kushner, characteristically, described the payment practices to me Tuesday as business as usual: “We’re running our game.” Further, he notes the company’s “clean balance sheet.”

Freedom does have an obligation to the lenders who replaced previous financing, in December of last year. Silver Point Finance is owed $24,688,391.53, accordingly to July 31 Superior Court documents. It presumably has first call on real estate sales proceeds, given the language in the court ruling.

Related to the Silver Point financing, the July 31 court ruling also indicates “The Freedom Parties acknowledge, for the benefit of the Agents and the Lenders, that (i) there exists one or more “Events of Default” under the Senior Lender Agreement, and that the Agent and the Lenders are entitled to exercise all rights and remedies in respect of such Events of Default……and (ii) the application of the sales proceeds of property constituting Claimants’ Collateral as set forth with the exercise of such rights and remedies….”

Then there’s the heavy burden of pension obligations, which Freedom took on as it bought the Register and other properties out of bankruptcy proceedings two years. Freedom maintains certain early obligations to the federal Pension Benefits Guaranty Corporation and retains responsibility for funding the plan going forward. I asked Kushner if the company had missed a summer payment obligation, and he only offered, “I’m not going to get into it. I’m not commenting on our pension fund.”

I also asked him to verify whether the pension fund, which he controls, had purchased shares of Freedom Communication stock last year, to help fund his fall acquisition of the Riverside Press-Enterprise. He acknowledged that the pension fund had indeed bought Freedom shares, but says that purchase was “unrelated” to the Riverside purchase.

Finally, there are two other lawsuits. Each, notably, includes litigants now involved with Tribune and its Los Angeles Times — the Times being both a head-to-head competitor (especially since Freedom launched the Los Angeles Register in April) and a key vendor, delivering Register subscriptions in its home Orange County. One lawsuit involves Angelo Gordon, which is suing Aaron Kushner for $17.45 million related to money he held back when he purchased Freedom in 2012; Angelo Gordon is one of those three major owners of Tribune Publishing.

Finally, there is curious suit of Jack Griffin. Griffin, who formally became Tribune Publishing CEO last week, served as an advisor to Kushner when he tried to buy The Boston Globe and, he says, when Kushner’s 2100 Trust bought Freedom two years. He is seeking up to $13 million, for related fees he says are owed.

Griffin’s suit now takes on a new color. After all, Griffin and Kushner are now the CEOs of the two largest newspaper companies operating in southern California. While a financial falling out may have torn them asunder, their current posts bring them back together, geographically at least. To be clear, Griffin’s suit is a private matter, unrelated to his new tenure at Tribune. But the bad blood between the two brings a new edge to head-to-head newspaper competition in greater L.A.

Which brings us back to the question of where all of this may lead.

The new Tribune Publishing has already made the point that it’s got an eye out to buy more print properties in its core eight markets. It says its recent acquisition of Annapolis-area papers (close to its Baltimore Sun) will increase earnings later this year. So it makes sense to see Tribune as a potential buyer for adjacent Southern California news properties.

The opportunities are certainly within reach. Let’s also remember that most of the daily press can be bought in this greater region. There’s not only Freedom Communications, with its ever-changing strategies and questionable finances. In San Diego, owner Doug Manchester hasn’t hung a “For Sale” sign on the Union-Tribune he bought three years ago, but he’ll take calls. Digital First Media’s Los Angeles News Group is all but for sale, as DFM’s owners prepare their own auctions more widely.

Tuesday, in fact, a rumor made the rounds in the Orange County Register newsroom: Freedom and the Los Angeles News Group could merge. I asked Aaron Kushner about it. He laughed and said, “We don’t comment on rumors…It’s a fluid market.” In that flux, I asked, “Are you a buyer or a seller?”

“We have a proven track record of being acquisitive,” he said.

On one hand, given tight money all around, deals seem tough to pull off. On the other hand, they seem inevitable.

If somehow the new Tribune — constrained somewhat, by debt, lack of cash, and tight cash flow — could finance a deal, its path to doing so seems to be clearing by the month.

Who better to put together that deal than its new publisher, Austin Beutner? A founding principal in the Evercore investment banking advisory firm, he knows M&A inside out. He also knows the financial straits of the newspaper industry, and believes that intelligent, well-funded consolidation could be a route forward to successful, high-quality daily journalism.

It all seems like a lot to consider for a one-week-old Tribune Publishing company and a neophyte publisher newly named. But then again, change in America’s newspaper industry seems to picking up rapidly this year.

Photo of the 2014 L.A. Marathon passing in front of an In-N-Out Burger by Krocky Meshkin used under a Creative Commons license.

Ken Doctor: 10 takeaways from Gannett’s blockbuster announcements

Ken Doctor — Wed, 06 Aug 2014 03:17:16 +0000

Gannett has long been one of the most market-savvy American newspaper chains. It showed those smarts again today, with its twin announcements.

Had it only announced the spinoff of its distressed newspaper properties, it could have been seen as a me-too response to the split-’em-up business model du jour (Monday’s post: “The newsonomics of splitting up media companies, with Gannett maybe next”). Or, had it only announced its acquisition of Cars.com, buying out its partners for $1.8 billion, that might have be seen as expected, and perhaps even at the lower end of the anticipated price (“The newsonomics of Cars.com”).

Combine the two announcements, though, and you can position it as a digitally propelled company of the future being born along with a newspaper company that can chart its own future. That’s blockbuster spin, and it even contains some truth. Curiously, the timing of the combined announcement looks like it was done on the fly. The new “Gannett” is unnamed at birth, and may have been premature.

Let’s do a quick assessment of what we can see in Tuesday’s moves, especially in light of the other recent action, as Tribune Publishing takes on official life this week, and E.W. Scripps and Journal Communications merge and split at the same time.

1. This isn’t a matter of “focus.”

These splits are about financial engineering. As public companies, their primary duty is indeed to maximize shareholder value. Newspaper properties are depressed and distressed, and the public markets have less and less interest in them. So sequestering the print assets to “unlock the value” of broadcast and digital just makes financial sense.

That said, if you are the new Tribune Publishing’s Jack Griffin, or the new Gannett’s Bob Dickey, or the new News Corp’s Robert Thomson, or the new Journal Media’s Tim Stautberg, you can use the shiny newness of your company as a motivator. It’s the Rocky underdog speech to the troops. That — combined with smart strategies — might provide a better future.

2. But there’s a wild card.

Though the driving purpose of the split is financial, an unintended (or maybe, in some cases, secondarily intended) consequence of them is that the new CEOs leading these companies can indeed “focus.” After all, they don’t have their sights obscured by profits rolling in from non-newspaper concerns. They can stare down the future of news publishing, digital and in print. That will be a good thing. It’s hard to call, in mid 2014, which of the new CEOs will rise to the occasion and best innovate within the constraints of the day — but new thinking is welcome.

3. The numbers tell the story of why.

For Gannett, we’re seeing 60 percent of its profits driven by broadcast — and that’s before full consolidation-with-Belo synergies kick in — even though broadcast contributes just 30 percent of overall revenues. The mismatch in revenues and profits is the simplest way to understand why, financially, the splits had to happen. Then there’s this simple fact: Gannett Publishing hasn’t grown publishing revenues in any year since 2006. It’s not much different from its peers in that regard. But that failure to grow — combined with the inability to name the future year when it would grow — is the driver of these splits.

4. This isn’t just about public splits. It’s also about privatization.

Publishers have recognized clearly over the last decade that running a publicly owned newspaper company didn’t track with the times. Shareholders want returns, and those are meager. The newspaper/digital transition still has another good five to 10 years; it’s no easy place for those having to report quarterly earnings.

Consequently, running directly parallel to all the splitting of news companies has been the privatization of some the largest and best newspaper companies in the U.S. Jeff Bezos bought The Washington Post, John Henry The Boston Globe, and Glen Taylor the Star Tribune. The new owners offer capital — and time to transition. They don’t have to answer to shareholders and next quarter’s returns. Both trends — splits and privatization — chart the future, with the best private owners seeming to offer a better resourced lifeline.

5. The Cars.com glide looks sensible.

We know that Cars.com, owned by a single company, the new as-yet-unnamed digital/broadcast Gannett, will drive more and more of its sales nationally. It will rely, as the digital classifieds companies have done, less and less on newspaper affiliates to sell its products; national sales produce better margins. So both Tribune (selling its 27.8 percent), McClatchy (selling its 25.5 percent) and Belo (selling its 3.3 percent) took Gannett’s money, but they also negotiated a five-year glide, being able to sell digital ad packages to local dealers (though at what will be higher “wholesale” cost). That tempers a potential loss of digital auto ad revenue in the next few years — an absolute key to trying to keep their heads above water. Without the glide, their digital ad revenue could easily go negative, and they need no more negatives.

Can McClatchy claim to be a digitally focused company and still sell its Cars.com share? Sure, it can. It’s moving forward in precarious balance, and the $406 million after taxes it will get will relieve a major debt burden. It won’t erase McClatchy’s debt, but makes a big dent in it. It can reduce annual debt service payments, have a little room to make digital acquisitions, and just breathe a little easier. That’s a trade-off that makes a good deal of sense.

6. Where did I leave my cushion?

You couldn’t draw a direct line between old News Corp’s Avatar success and its middle-of-the-recession investment in The Wall Street Journal, but the connection was clear. Broadcast and digital assets — now separated at almost all the companies (private Hearst owns both, as does smaller chain Schurz) — allowed newspaper companies to be squeezed a little less than they could have been.

Yes, even with the loss of 30 percent of U.S. newsroom jobs in seven years, it could have been worse — and unfortunately could still be going forward. All the newspaper companies have cut, but some more than others, and one reason has been profits from other businesses could prop up, subsidize, or make up for print shortfalls. That cushion is now deflated.

7. What’s the fresh start look like?

Indeed, these are meaningful new starts. For the most part (Time Inc. and Tribune the notable exceptions), these companies are getting debt-free, or close to debt-free starts. Pension obligations, at least for Journal Media and Tribune, are staying with broadcast company; that’s a big positive. Cash is the big differentiator. The new News Corp got a big cushion, $2 billion. Tribune got $50 million and Journal Media is getting $10 million. Billions go a lot farther than millions. Millions buy months of transition; billions buy years.

8. What’s the test of the new companies?

That’s two-fold. First, how can they continue to manage the ongoing print ad decline as gracefully as possible? Fact: The main driver of profits (still in the 5 to 10 percent range) for news companies has been cost-cutting. That can be done for years, but not decades. At some point, you cut so much that your products lose their commercial viability for advertisers and readers.

Second, how can they turn around two revenue streams? Reader revenue — flagging at Gannett and the Milwaukee Journal-Sentinel, for instance — needs to be put on a steady growth trajectory. That’s about the magic formulas of product and pricing, and the wizardry out there is uneven. Then in ad revenue, the push for marketing services and content marketing needs to move from experimental to full throttle. Easy to say, hard to do.

9. What’s the next company shoe to drop?

With Gannett’s announcement, there aren’t many newspaper/broadcast assets left to split apart. But the newspaper landscape is so unsettled that we could see unorthodox new combinations.

It’s hard to believe we’ll see any kind of national scale rollup of local dailies — there’s little rationale to do in an industry still spiraling downward — but we will see more regional clustering and unexpected buys. New Media Investment Group/GateHouse, Halifax Media, and Berkshire Hathaway have all been buying here and there, but largely staying away from metros, the most troubled of all dailies. Then, there’s the 2015-16 sales scenario for Tribune newspapers. And on any given day, plenty of publishers are willing to take a buyer’s call.

10. Is it 1995 again?

As a friend emailed me today, “Where is this ‘back to the future’ set of publicly traded newspaper companies headed? Roll up by a digital company? Bankruptcy and die? Consolidation to further cut costs? Seriously, is this 2014, because if I check the stock tables I’d swear it’s 1995!”

It’s true that public newspaper share prices had recovered from their post-recession bottoms, and largely risen with, or even ahead of the overall stock market’s growth. Gannett hit a high of $90.42 on April 8, 2004, a bottom of $2.14 on March 20, 2010. Tuesday, it closed at $33.87, down 1.3 percent (presumably attributable more to the cash it expended buying out its Cars.com partners than to the split itself).

To my friend’s point, the newspaper world seems caught in an unending cycle of woe. That may tell us that, as important as intelligence is in finding a way forward, stamina might be the most important commodity.

Photo of Gannett logo on the floor of the New York Stock Exchange by AP/Richard Drew.

The newsonomics of splitting up media companies, with Gannett maybe next

Ken Doctor — Mon, 04 Aug 2014 17:44:54 +0000

The Journal Communications/E.W. Scripps merger and split last week may have seemed like a bolt out of the blue, but it’s a bolt that makes sense in the new cosmic order of local media (“Diversified media companies are hurrying to undiversify”).

In fact, this game of Local Media Split ‘Em is all but done — with one big U.S. exception, its largest daily publisher, Gannett.

Scripps and Journal Communications were two of the last newspaper companies with broadcast assets. For many years, it was the newspapers of such “diversified” companies that served as the cash cows, with broadcast a good but less profitable business. But a look at the financials of any of the diversified companies shows that it’s broadcast supplying most of the profit today, even if the newspapers often produce higher revenues. That’s why we’ve seen the parade of “newspaper” companies, or “magazine” in the case of Time Warner/Time Inc., dividing their print assets from their broadcast, cable, and/or digital ones.

Today, Tribune joins the crowd, becoming a standalone newspaper-based company, Tribune Publishing. Add Tribune to the list of companies that once had both print and broadcast under a single ownership: News Corp, The New York Times Co., the Washington Post Co., Media General, Belo, Time Warner, Scripps, and Journal Communications, among others.

Gannett is now alone among the big newspaper companies; there are a few smaller chains still owning both newspapers and TV, like Schurz Communications. Even with all the growth of its broadcast business (most recently through the acquisition of Belo’s stations), it’s still a company that is defined, at least in part, by its newspaper roots. Investors have had a long love affair with the stock, at least compared to its newspaper company peers. But Gannett’s newspapers are a drag on its earnings. Its Q2 publishing results affirm that things aren’t getting much better — down 3.7 percent year-over-year in revenues overall, 5.1 percent in print ad revenues — and that fueled a little speculation that Gannett may be preparing to sell some of its 81 daily newspapers, a speculation fueled by CEO Gracia Martore’s reply to an analyst.

Those words may now seem even more minor in the wake of the Scripps/Journal deal. Martore will increasingly be faced with the question: Why wouldn’t you split off the broadcast and digital businesses from flagging print?

Newspapers now produce 70 percent of Gannett revenues, but broadcast produces 60 percent of the profits. Those lines continue to diverge, making the mismatch clear from a financial point of view.

The standard three-word explanation for all these splits is the desire to “maximize shareholder value.” Media company CEOs split companies because it usually works. The newly established TV-plus businesses often assume the entire value, or close to it, of the old “combined” company. The standalone newspaper company value may be relatively small, but now it’s icing on the re-frosted cake. Investors like the clarity; in part, it’s optics. More importantly, it’s the projectability of future cash flow. Broadcast, struggling as it may be with digital disruption, offers a more reliably forecastable future than print.

Supreme Court decisions have helped to do that. The Supreme Court’s Aereo decision removed a threat to its growing retransmission fees boon. And the Court’s steady peel-back of campaign finance limits promises increasing political advertising — and that advertising has always fallen disproportionately to broadcast. In a release on the merger/split, Scripps made the point that its TV group, now the country’s fifth largest, will have a presence in eight key election battlegrounds: Arizona, Colorado, Florida, Michigan, Missouri, Nevada, Ohio, and Wisconsin. (Story/video with the two companies’ leaders speaking to the deal, here.)

The new broadcast-centric E.W. Scripps and new print-centric Journal Media offer our latest case. Scripps’ history is worth knowing. It wasn’t a Johnny-come-lately into the TV business, as many newspaper companies were. It bought it first TV station — WEWS, as in E.W. Scripps — back in black-and-white 1947. It then smartly invested in the nascent cable business in 1993.

Then, in 2008, the split began. Scripps Networks Interactive — now HGTV, Food Network, DIY Network, Cooking Channel, Travel Channel, Great American Country — took life as a separate company, with the company’s highest-flying assets. That left both local newspaper and local TV together in one company, at just about the same time that A.H. Belo split its own broadcast assets from its newspaper ones. (Belo’s own trajectory is likewise instructive. It sold Belo TV to Gannett last year for $1.5 billion, and it has sold its non-Texas papers in Providence and Riverside over the past year. It’s back to being a local newspaper company.)

Now, in 2014, the splits are complete, with broadcast going standalone — and retaining the E.W. Scripps name.

Is it a matter of focus? Scripps observers will tell you that pre-split, much executive time was focused on those fast-growing cable properties, giving less attention to newspapers and TV. Then after Scripps Networks Interactive went off on its own, TV seemed to be getting more attention than the struggling newspapers.

There’s a lot to learn in that seeming allocation of attention.

E.W. Scripps CEO Rich Boehne is a former newspaper reporter, but he believes that local TV is best positioned to be the last man standing in local news. Why? Big reach, a big marketing bullhorn, and a more solid legacy cash flow. So Boehne’s been investing in local broadcast. Significantly, part of that is in news and journalism. At year’s end, I wrote about his contrarian digital/TV news play in Cincinnati (“The newsonomics of Scripps’ TV paywall and the Last Man Standing Theory of local media”). WCPO now sports more than 30 new news staffers, bringing its total to more than 100.

“There has been this idea that newspapers ought to play hard and heavy in digital, and we have always subscribed to the belief that it didn’t matter what your traditional platform, newspaper or TV, that the future of local media will be in digital,” Adam Symson, Scripps chief digital officer, told me in the wake of the deal. Symson, a TV veteran, is staying with the new broadcast Scripps. “We weren’t resigned to let newspapers own the B2C relationships with the consumer. Television has the opportunity to play offense while newspapers are still playing defense.”

In its half-year of Cincinnati experimentation, WCPO is doing a lot of testing and learning. Its pay plans are membership-oriented, running $79.99 a year or $7.99 a month, with a penny for the first month. The company isn’t releasing any subscriber numbers, but Symson says it is “on plan.” That “insiders” membership proposition is being fleshed out with unique-to-Cincinnati commercial offers to the high-minded goal of helping locals “lead a much more fulfilled life here in Cincinnati, with a passion and sense of play.” WCPO’s coverage of the local craft-brewing boom is one example of that.

Connection is the key — and that goes beyond the traditional local media relationship: “Journalism content is the center of this relationship, but we never expected or wanted to leave consumers with the sense that this was a retail transaction. You give us money, and we give you journalistic content.” That means efforts at community connections of several kinds, including physical events, as well as more knowing coverage, some of which is provided by local bloggers. It further incorporates the innovative Newsy video news service, which it bought last year (“Newsy’s Mobile + Video + Social + Curation Model Stands Out”).

Symson is looking at the “hard marketing launch” of WCPO this fall, after taking in many data-driven lessons from its first half-year. We can then see the direct connection to what the new expanded Scripps can apply — and not apply — to all its TV markets out of the WCPO experiment.

Can Boehne prove out a model of a paywalled local broadcaster as the ultimate survivor in the local media wars? His canvas just got bigger, post merger: The new Scripps will reach about 18 percent of U.S. television households in 27 markets. Further, it won’t have to concern itself with FCC cross-ownership rules that limit newspaper/TV combinations in cities. Also, significantly, the new broadcast company remains Scripps family-controlled.

The new newspaper company Journal Media, which will be headquartered in the city of its biggest property, the Milwaukee Journal Sentinel, won’t be family controlled. (From the release: Scripps shareholders will own 69 percent of the combined broadcasting company and 59 percent of the newly formed Journal Media Group. Journal Communications shareholders will own 31 percent and 41 percent, respectively, of Scripps and Journal Media Group. Scripps shareholders also will receive a $60 million special cash dividend as part of the deal.)

The company starts clean. No debt and the newspaper pension obligations are staying with Scripps. At split, it even gets $10 million. That’s a nice chunk, but a rounding error of a rounding error if compared to the dowry afforded by Rupert Murdoch when he separated out News Corp from 21st Century Fox last summer: $2 billion. New Journal Media CEO Tim Stautberg comes into the job from his post as Scripps’ senior vice president for newspapers. He led the consolidation and centralization of Scripps’ systems and processes.

His challenge is like that of Jack Griffin, as he formally takes over the new Tribune today, and the head of every other newspaper-based company: How to grow revenues. At its last report, for Q1, Scripps was down “only” 1 percent in publishing, largely on the circulation revenue increase of 6 percent. Ad revenues were down 5.4 percent; digital ads were down 5.6 percent. The Journal publishing results Stautberg inherits (the deal should close in early 2015) were worse: revenue down 2.7 percent, with circulation revenue down a troubling 5.7 percent.

The separation of these newspaper assets — and their future fortunes — gives new meaning to the word standalone. Standing alone means operating without a safety net that steadier broadcast revenues have recently provided.

One thing that Tim Stautberg won’t be talking a lot about is “synergy.” Like all the CEOs of the new standalone print-based companies, the age of talking up the value of owning TV and newspaper assets in the same company is all but over. CEOs loved to talk about those synergies, but in two decades, we have seen few examples of synergistic working together between the pictures people and the ink-stained wretches. “Video” is on everyone’s lips — there’s still more ad demand than supply, and that supply can fetch as $30 CPM rates for local companies. But video, like all else, will be pursued separately.

Photo by Ian Sane used under a Creative Commons license.

This Week in Review: Questions on Facebook’s experiment, and a knockout blow to Aereo

Mark Coddington — Thu, 03 Jul 2014 15:50:29 +0000

This week’s essential reads: The key pieces from the past couple of weeks are Sebastian Deterding on the ethics of Facebook’s experiment, the Columbia Journalism Review’s Michael Meyer on Jeff Bezos’ plan for The Washington Post, and Nick Davies’ sweeping review of News Corp.’s phone hacking scandal and British tabloid journalism culture.

The review has been off the last two weeks, so this week’s review covers the past couple of weeks.

Facebook’s ethically dubious experiment: Facebook was under fire again this week for collecting data from its users without their knowledge, this time in conjunction with Cornell University professors for an experiment on the influence of Facebook’s News Feed on its users’ emotions. The study, which was published in May, involved skewing what nearly 700,000 users saw for a week in their News Feeds with more positive or negative words and then measuring the positivity and negativity in their own posts.

The Atlantic’s Robinson Meyer has a good explanation of the procedural and ethical details behind the study: Cornell’s institutional review board, which reviews all research the university does involving human subjects, wasn’t involved until after the experiment was finished. And as Forbes’ Kashmir Hill reported, the statement in Facebook’s terms of service that it can use its users’ data for research wasn’t added until after the study was conducted. It’s not clear what review the study did get — in another Hill article, Facebook said it conducted an “internal review” of the study. The Atlantic’s Adrienne LaFrance also reported on the misgivings of the study’s editor as well as her reasons for approving it.

Gigaom’s Mathew Ingram put together a good summary of the criticism and defenses of the study’s ethics from people within and outside Facebook. British regulators said they’re investigating Facebook on the study, and Facebook executive Sheryl Sandberg apologized on the company’s behalf — not for the study itself, but for communicating it poorly. One of the study’s authors, Facebook data scientist Adam Kramer, defended the study’s design while apologizing for “any anxiety it caused” and noting that Facebook’s internal review processes have improved since the study was conducted.

Numerous writers condemned Facebook’s callousness in running the study, including Mike Masnick of Techdirt, James Poniewozik of Time, Jordan Ellenberg of Slate, and Alex Wilhelm of Techcrunch. Wired’s Katie Collins argued that the study reminds us that “Facebook as a company trades in information, not people,” and both Charles Arthur of The Guardian and David Holmes of PandoDaily warned that the study indicates Facebook’s immense power and its willingness to use that power for ignoble ends.

Several researchers published defenses of Facebook: The University of Texas’ Tal Yarkoni argued that concerns about Facebook manipulating its users’ experience are overblown because the News Feed is an entirely artificial environment, the site of constant manipulation. Northeastern’s Brian Keegan argued that “every A/B test is a psych experiment.” And in a more measured post, Microsoft researcher danah boyd said that too much of the criticism has narrowly focused on Facebook because it provided a concrete point on which to focus their anxiety about big data.

Sociologist Zeynep Tufekci pushed back against those defenses, arguing that the concern about manipulation is a legitimate one: “it is clear that the powerful have increasingly more ways to engineer the public,” she wrote. “That, to me, is a scarier and more important question than whether or not such research gets published.” Design researcher Sebastian Deterding had the most thorough ethical breakdown of the study, explaining the clash of opinions as a collision between understandings of the study as academic research and as social media A/B testing. At The Atlantic, Sara Watson said the controversy centers on the question of whether data science can consider itself a science.

Sociologist Janet Vertesi said this study points up the larger issue of increasing corporate funding of academic research. Microsoft researcher Kate Crawford called for future experimental studies to be made opt-in, and at Wired, Evan Selinger and Woodrow Hertzog urged the development of a “People’s Terms of Service Agreement.”

A big court win for broadcast: Aereo, a startup that allowed users to pay to stream over-the-air television by renting tiny antennas, lost its case in the U.S. Supreme Court last week in a big victory for broadcasters. In its majority decision, the court stated that Aereo was not so much an equipment provider (as the company claimed) as a cable system that transmitted copyrighted content. Cable carriers have to pay retransmission fees for the over-the-air networks they broadcast, which Aereo was trying to avoid. Aereo suspended its service in the wake of the decision while it determines if it can find a way to continue, while its streaming-TV competitors began to move in on its spot in the market.

Techdirt’s Mike Masnick, Public Knowledge attorney John Bergmayer, and Notre Dame law professor Mark McKenna all critiqued the legal foundations of the decision, concluding that its vague definition of why Aereo was substantially like a cable system provides little guidance for future cases and leaves the door open for a raft of legal challenges and differing conclusions. At The Guardian, Julian Sanchez argued that if future courts don’t care much about technological differences between Aereo and cable systems, the ruling’s precedent could endanger a whole range of cloud-based services, and Vox’s Timothy B. Lee made a similar point about the perilous future of cloud storage. Gigaom’s Derrick Harris said the impact on cloud services won’t be as severe as feared, but DVR could be challenged.

Fox has already used the Aereo decision to support its case against a streaming-TV service by Dish, and Variety’s Ted Johnson looked more closely at several possible outcomes from the ruling: rising TV bills and retransmission fees, more timidity among startups, and a broader legal definition of what constitutes a “public performance.” Forbes’ Sarah Jeong said we’ll never know the innovative startups we’ve lost as a result of this ruling.

Recode’s Peter Kafka said that while the decision helps the TV industry in the short run, it could hamper its development in the long run, since a legal Aereo would have pushed it to innovate more aggressively in light of its inevitable disruption. Instead, he said, “they’ll be sticking with lucrative business as usual for now. Pretty sure we’ve seen this show before.” Michael Learmonth of the International Business Times made a similar point. At the Columbia Journalism Review, Sarah Laskow said local TV news may have avoided catastrophe with the ruling, since a decision in Aereo’s favor may have eventually meant reduced retransmission fee revenue or even a move by the networks to pay TV.

Resolution and continued questions in hacking case: After at least three years at the center of the British media spotlight, News Corp’s phone hacking scandal reached something resembling a denouement last week, when the trial of two of its principal figures concluded with the acquittal of Rebekah Brooks and the conviction of her deputy, Andy Coulson, on a conspiracy charge. Brooks, the former head of Rupert Murdoch’s British newspaper holdings, proclaimed herself “vindicated” by her acquittal amid speculation News Corp might deploy her to Australia. Coulson, the former editor of the now-defunct News Corp tabloid News of the World, was hired as Prime Minister David Cameron’s spokesman in 2010, a move for which Cameron apologized last week.

News Corp’s trouble is certainly not over, though. Scotland Yard informed Murdoch it wants to interview him in their investigation into the phone-hacking case, and in the U.S., the FBI is still investigating whether anyone from the company may have broken American law. The Daily Beast’s Peter Jukes reported that the FBI has 80,000 emails from News Corp’s New York servers, and the Columbia Journalism Review’s Ryan Chittum said that while it will take quite a bit of firepower to go after Murdoch, his potential influence is being substantially diminished.

At USA Today, Michael Wolff noted how Murdoch was distanced from Brooks’ and Coulson’s trial, and The New Yorker’s Ken Auletta wondered whether the British tabloid press will be chastened by the embarrassment that the trial was for their industry. At The Guardian, Suzanne Moore said the scandal exposed the coziness between British journalists and politicians, and The Economist said it diminished the political importance of the British press.

The Telegraph argued that the trial was an underwhelming spectacle that ultimately showed there isn’t a conspiracy among the press against the public, but in a scathing review of the scandal and the trial, The Guardian’s Nick Davies said that despite the not-guilty verdicts, the News Corp newspaper empire’s corruption and coarsening of British public culture was on full display. The Independent’s Cahal Milmo and James Musick also reviewed News of the World’s behavior in the scandal, emphasizing its willingness to cut ethical corners in order to land scoops.

The Guardian also expressed its hope that the era in which the British tabloid insisted that there was no right to privacy had ended. “In its place should come respect for the universal right to privacy, honoured by all those who wield power – a mighty news company no less than the state itself,” the editorial stated. The Guardian’s media columnist, Roy Greenslade, criticized the British press for its shoddy coverage of the case.

Egypt jails three journalists: Three Al Jazeera English journalists who had been arrested in Egypt in December were sentenced last week to seven to 10 years in prison on dubious terrorism-related charges after a surreal and chaotic trial. The Guardian had a vivid account of the verdict, while The New York Times focused on the response by the U.S. government.

Journalists around the world rallied to the jailed trio’s cause, including protests by hundreds of journalists in London. The Committee to Protect Journalists condemned the verdict as a politicized result with no connection to the law, asserting that “Egypt cannot be allowed to normalize its international relationships so long as it continues to jail journalists.” Despite the pressure from numerous Western governments, Egyptian president Abdel Fattah el-Sisi said he wouldn’t interfere with the court’s decision.

Reading roundup: A few of the other stories and discussions that have merited some attention over the past couple of weeks:

— Poynter’s Andrew Beaujon reported that The New York Times will close more than half of its blogs, including its aggregative news blog The Lede, as part of a long move away from blogs at the paper. Gigaom’s Mathew Ingram expressed concern that The Times will lose some of the innovative drive that came with the blogs, though Times public editor Margaret Sullivan said moving away from blogs could be a good thing for The Times to encourage continual experimentation, as long as its journalists can integrate what they’ve learned from them into the rest of their work. Blogging pioneer Dave Winer said The Times’ blogs were never truly blogs because they were edited and impersonal, while PandoDaily’s David Holmes countered that we shouldn’t worry about what’s blogging and what’s not.

— SCOTUSblog, one of the top sources of U.S. Supreme Court news and analysis, had its appeal for a congressional press pass from the Senate Daily Press Gallery denied last week based on concerns about it independence from the law practice of its publisher, Tom Goldstein. Goldstein wrote a defense of his site’s credentialing case, one echoed by Talking Points Memo’s Josh Marshall and Techdirt’s Mike Masnick. The Columbia Journalism Review reviewed the history of SCOTUSblog’s application to the Senate press gallery to critique the gallery’s decision. SCOTUSblog also got support from the Newspaper Guild-CWA.

— Upworthy released the source code for its preferred metric, attention minutes, which focuses on time spent on a site rather than number of visits or shares. BuzzFeed explained what’s in it for Upworthy, and Digiday’s Ricardo Bilton, the Columbia Journalism Review’s Fiona Lowenstein, and Gigaom’s Mathew Ingram all looked at what other publishers think of using attention as a primary metric.

— Finally, the Columbia Journalism Review went deep into Jeff Bezos’ efforts to restore The Washington Post’s global ambition. It’s a lengthy, well-reported look at some important changes underway there.

Photo of Facebook dislike by Owen W Brown used under a Creative Commons license. Photo of Al-Jazeera English producer Baher Mohamed, acting Cairo bureau chief Mohammed Fahmy, and correspondent Peter Greste by AP/Heba Elkholy.

The newsonomics of spring cleaning

Ken Doctor — Thu, 15 May 2014 16:13:30 +0000

The tensions of change in the news business are intense but often subterranean. One way they pop into public view is through top leadership changes, something that seems to be happening more frequently today than in the past. In the span of a few hours yesterday, we saw both Jill Abramson’s ouster at The New York Times and the resignation of Le Monde’s top editor. It wasn’t that long ago that Daily Telegraph editor Tony Gallagher was shown the door. These events are always about a mix of leadership, personality, change management, and big questions about how authentic editorial values will be maintained in an era of roiling business challenge. But despite the attention they grab, they’re only a tip of the iceberg.

As we look forward to the second half of the year, we already know some of the big stories to watch, and leadership will be key to those. How will the spun-off Tribune and Time Inc. companies do, and how will they be led? As Jeff Bezos’ ownership of The Washington Post reaches the one-year mark, will the revolutionary disruptor announce any shape-shifting moves for the Post — moves which might serve as models for his besieged new brethren? Who will buy the dozens of former MediaNews and Journal Register properties that Digital First Media will be putting on the block?

But let’s focus on the major changes we’re seeing now instead of looking ahead. It’s been a season of positioning, movements less seismic than slowly shifting. It’s a season that is seeing a lot of housecleaning and — barely noticed — the crumbling of some of the newspaper industry’s vestigial structures. Let’s start there, with one announced dissolution, and then check in on three other storylines involving many of the long-established players in the U.S. daily industry.

The wires business recedes farther into the 20th century.

Once there was a flourishing “supplemental” wires business — all those wires that complemented the Associated Press (and, long ago, United Press International). The epoch spoke to the robustness of the news business. Many newspaper companies invested in content, both using it themselves and finding buyers among their newspaper peers. It wasn’t unusual for a half a dozen wires to flow into news desks every day. Back in the ’90s, we counted how much content flowed into the St. Paul Pioneer Press each day and how much of it we used. We printed just 5 percent of what we received.

Retired Scripps Howard News Service editor Peter Copeland neatly recounts a two-decade tale of consolidation and loss.

In the 1990s, McClatchy had a news service that was mostly in the West. They didn’t want to operate it anymore, so Scripps Howard set up a deal to start a Scripps-McClatchy Western Wire run out of the Scripps Howard News Service office. When I took over SHNS, the Western Wire was not doing well, so I folded it into SHNS. In 2006, McClatchy bought Knight Ridder and the old KRT [Knight Ridder Tribune] became MCT, and McClatchy was back in the wire business. LAT-WP [Los Angeles Times-Washington Post] broke up, and LAT went to MCT. WP joined up with Bloomberg. Along the way the Cox News Service disappeared; so did the Hearst News Service, Christian Science Monitor and the Newhouse News Service. Then, SHNS sold out to MCT. Then, McClatchy sold out to Tribune. I didn’t think that Tribune would be the last one standing.

Whew.

Tribune and McClatchy announced that latest move last week, with McClatchy selling its half share.

We know that Tribune — which has long run the business side of the wire but will now take over editorial operations as well – is consolidating the wire in Chicago. Layoffs of the D.C.-based editing staff are in progress, though it’s important to point out that both McClatchy and Tribune will maintain their D.C. reporting bureaus.

We can expect that the Chicago Tribune will leverage its position as a central hub for the current Tribune chain in reorganizing what will become a Tribune wire. Tribune has already said it would meld the operation into the Tribune Content Agency. So what has been a roughly break-even venture will become part of a profit center. Expect new packaged products, something the Chicago Tribune has gained in proficiency in over the past several years.

How will the hundreds of newspaper clients of the wire react? Will the fact that it will soon be more a Tribune company than a quasi-coop (some newspapers contribute content to the wire as well as receive it) make any difference to them?

The move tells us a lot about newspapers and content. The supplemental wires have remained largely print-oriented, and as newspapers have finally gone more local in print and cut newsprint overall, there’s less space for wire copy. In addition, relatively few newspapers have made effective use of this niche-y content — the McClatchy Tribune wire has distinguished itself with strong features across a variety of topics — in their digital products, one of the failures of imagination evidenced over the years. Now new syndicators like NewsCred bring new models of audience-targeting content licensing to the marketplace. Wires fade into the history books.

Gannett is now an advertising company.

Last June, when the largest U.S. newspaper publisher bought Belo TV stations, I said that Gannett had become a TV company. Now, with the latest likely move — buying Cars.com outright from its newspaper partners — we’ll have to adjust that description (“The Newsonomics of selling Cars.com”).

The best new description may be this: Gannett is an advertising company. Of course, it’s always been a major ad seller, but as its newspaper ad revenue has cratered along with the rest of the industry’s — down more 50 percent over the last seven years — the company has looked for new ways to generate replacement profit.

Adding the Belo TV stations to longstanding Gannett Broadcasting made it one of the top four broadcast players in the country. Just yesterday, it bought six more Texas stations to add to its standing. The logic: Broadcast may be maturing, but it’s not gasping for its breath like newspapers are.

The Belo deal meant that Gannett would plan to see two-thirds of its operating income come from broadcast, a dramatic turnaround once for what was once the plumpest of cash newspaper cows.

That broadcast money is mostly advertising, bolstered by a healthy stream of retransmission fees paid by cable and satellite companies — though those fees are increasingly under legal and competitive pressure.

Now if it completes the Cars.com deal, it will add as much as $350 million in additional advertising revenue to its mix. (I expect Gannett will partner with private equity to buy Cars.com, which may complicate the accounting.)

Add it up, and we get to the ad company definition. We can figure that at least 75 percent of Gannett’s revenues will be ad dependent. While that’s better than being an ad-dependent newspaper company, such a reliance could be problematic. Digital disruption is slowly eroding the broadcast ad business. While Cars.com has an enviable No. 2 position in its sector, its new competition will come from all sides, known and unknown. The question for Gannett’s shareholders, and employees: Has the company charted a strategically defensible future, or just bought a few years of time?

As Gannett finalizes its Cars.com buy, exiting the business ownership will be McClatchy, along with Tribune, A.H. Belo, and Graham Holdings. All those companies exited Apartments.com earlier in the year, selling to private equity. Group the three transactions — Cars.com, Apartments.com, and the McT wire dissolution — and we see the partnership culture of an earlier generation fading fast.

New national news networks are forming.

Look back in time 20 years and you’ll find plenty of ideas for creating a reader-accessible site for most newspaper-produced content: a portal for all the news from the country’s 1,350 or so dailies. Start with New Century Network, one such mid-’90s effort that hardly left the gate. Knight Ridder’s Real Cities was a pretender as well. At various times, Yahoo News has aggregated lots of newspaper content.

Still, in 2014, there’s no simple-to-use, single place to go for to tap into newspaper content overall. This year, we see new stirrings.

Expect to see the next upgrade of the Associated Press’ AP Mobile app soon. Since its launch in 2008, it’s been an intriguing product, embracing that broad expansive network notion. AP identified the green fields of mobile early and convinced hundreds of newspapers to contribute to the mobile-only product. AP Mobile gets impressive traffic, but mainly to its own national and global content; local content drives less than 20 percent of its traffic. The key going forward will be the user experience: How do you present many firehoses of reader-relevant national and local daily content in a way that makes sense, especially on a tiny smartphone screen?

Consider, also, the new Washington Post network plan. The idea: Allow newspaper partners to show Washington Post content to their own subscribers. Certainly, it’s small today, and nothing like an all-inclusive network; a half-dozen newspapers — The Dallas Morning News, the Honolulu Star-Advertiser, The Toledo Blade, the Minneapolis Star Tribune, the Pittsburgh Post-Gazette, and the Milwaukee Journal Sentinel — have signed on. The business deal: Affiliates offer up otherwise paywalled Post access (without additional cost), increasing their own reader value propositions. The Post gains more ad inventory. No money changes hands.

Post president Steve Hills tells me that the program will expand rapidly, intending to serve “multiple millions” of the roughly 30 million U.S. newspaper subscriber population. Although Hills says there are no plans to create a single authenticated user experience, we can see how the Post network could grow into such a product – and do so within paid digital circulation strategies. If we expect new Post owner Jeff Bezos to break some traditional business molds at some point, wouldn’t such a networked approach be a logical one? The potential of an integrated iTunes for News experience may be in the back of the Bezos brain.

Then, there’s the newly launched Dutch Blendle model. It’s innovative, and it pushes into the one area that the Netherlands dailies would allow for aggregation: pay per article. Blendle is aiming at other markets, though don’t expect it to land on American shores soon.

The obstacles to creating a state-of-the-art network experience are formidable. How do you avoid cannibalizing reader revenue in an age of individual paywalls? How do you share new revenue, and how do you give readers what they really want? They may be insurmountable. Further, the growth of compelling news content well beyond newspapers is so great that it’s possible a newspaper-only product no longer makes sense. Still, expect the dream to be pursued.

The new News Corp’s colicky infancy

Last week’s News Corp’s financials told us the company hasn’t yet figured out its post-spin-out way forward. The big number: Down 9 percent in its news and information segments, with both ad revenue and reader revenue down. Even with some allowance for currency impacts, the results lag its peers.

While the problems of News Corp can be found on three continents (Australia, U.K., and U.S.), it’s the American face-off with The New York Times that must grate Rupert the most. So far, the Thompson vs. Thomson face-off I described as both companies hired new CEOs has gone in favor of BBC transplant, NYT CEO Mark Thompson. Compare The New York Times’ recent growth (“New numbers from the New York Times”), in both ad and reader revenue, to News Corp and you see one company in modest turnaround, the other still looking for it.

There are a couple of reasons to believe this battle is still in the very early stages.

As it released its problematic numbers, News Corp announced the expected appointment of Will Lewis as CEO of Dow Jones, removing his “interim” title. The early reports on Lewis’s DJ/Wall Street Journal are good ones. The damage done by Lewis’ predecessor as CEO, Lex Fenwick, though, will take at least a few quarters to repair, even as the wider competitive marketplace around Dow Jones moves on rapidly. Lewis’ listening tour is now over, and the painful reconstruction of the company’s Factiva/B2B business has begun.

How painful? News Corp CEO Robert Thomson described the B2B do-over this way on the financials call: “At Dow Jones, where we had obvious difficulties with our business-to-business offering, the team has started to stabilize the institutional revenue and refined our product and pitch.” That’s painfully honest, with a tad of spin. Product and pitch cover the whole business.

Meanwhile, Lewis must get the consumer side of Dow Jones — largely the Journal — reenergized as well, just as energetic turnaround tests are in midstream at News Corp properties in Sydney and London.

The current shakiness of the company is buoyed by two hard realities: Rupert Murdoch and money. Just this year, Rupert bulled through his family succession plan and this week moved forward with a long-planned effort to create a consolidated Europe-dominating Sky TV company through his other company, 21st Century Fox. The man lies in wait for opportunities, showing the doughtiness of a man a third his age. Then, there’s the cash. News Corp’s the best-funded news company on the planet, and that can make the recent Dow Jones chaos and current financial woes mere speed bumps on the long Murdochian road ahead.

Photo of Lego cleaning by Bas Van Uyen used under a Creative Commons license.[/ednote]

A lesson from the disruption of the news business? Don’t wait until your backs are against the wall to innovate

Joseph Lichterman — Wed, 07 May 2014 17:29:17 +0000

Let’s say you’re in an industry that’s facing the prospect of technological disruption. What could you learn from the news business, which has — maybe you noticed — had a rough time of late?

That was a question posed to Raju Narisetti, the senior vice president for strategy at News Corp, and Margaret Sullivan, The New York Times public editor, in an interview with Reuters TV at the recent International Journalism Festival in bucolic Perugia, Italy.

While Sullivan noted that “desperation has been the mother of invention for the newspaper business and the media business in general,” Narisetti said that other industries should not make the same mistakes and only wait to innovate until they’re pushed to the brink:

Hopefully, they won’t make the same mistake the news industry has made, which is to wait until you’re pushed to the wall before you start to innovate. I think the ability to innovate in advance of changes is important for these industries. The other thing is that as an industry, newspapers were never able to attract good business talent. We attracted the best journalism talent. And I think that’s been a big shortcoming as we’ve needed to adapt to business models, and hopefully some of the other industries are learning from that and are gathering their talent in all aspects of their business.

Narisetti also notes, tongue slightly in cheek, what’s stopping something like Blendle to unite all the newspapers in the U.S.: “Unfortunately or fortunately in the U.S., there’s this thing called the Sherman Act which prevents us all from grouping up together and launching one single product.”

Watch the full interview above; Narisetti and Sullivan touch on a few other topics, including paywalls, increased segmentation in the media, and more.

We need to talk: 26 awkward questions to ask news organizations about the move to digital

Raju Narisetti — Mon, 07 Apr 2014 15:30:05 +0000

Here are 25 awkward questions (and one counter-question) that I wish media reporters/critics would routinely ask of editors and mainstream news organizations, each year. These might be uncomfortable, if truthfully and publicly answered, but even if you “no comment” your way out of that query, the questions might actually help spur newsroom leadership to focus on what really matters. In no particular order of importance, here is a starter kit of questions:

1 What percentage of your digital audience is accessing your brand/journalism only on mobile phones? (Not to be confused with tablets — and don’t settle for a “We have so many millions of digital visitors each month” answer.) What was that number a year ago?

2 Approximately how many journalists are there in your newsroom globally, from the top editor to the full-time-equivalent temp? Of those, how many are part of a dedicated mobile team? And, in that mobile team, how many are focused on phone products and not the tablet?

3 Approximately how many developers (front-end and back-end) does your news organization have? Of those, how many are dedicated to mobile? Can you break down that developer number by phone vs. tablet?

4 For newsrooms with pay models (hard walls, subscriptions, or meters), what percentage of your total unique visitors last month were paying customers?

5 For newsrooms that bundle print+digital subscriptions (almost all mainstream newsrooms these days), can you tell what percentage of your print subscribers have even registered on your website or mobile app so they can access digital content for free as part of their print subscription?

6 How many paying subscribers (digital-only or print-bundled) actually visit your site or mobile products each day? What do they represent of your daily average digital readers?

7 Who formally owns the goal of increasing the number of visits from readers who already pay but don’t come to your digital offerings more than once or twice a month?

8 What has been the change in pageviews per visit on your website year-over-year? What is that number now?

9 What percentage of your total advertising revenue is now digital? Of that, what percentage is coming from phones (again, not tablets)? If you can answer this, then compare that percentage against your answer to No. 1.

10 When was the last time your news organization came up with an advertising innovation that has been sold more than five times to customers in the past 12 months? What was it and can you point to specific use cases?

11 Is there an advertising innovation team in your news organization? Who are its members and how does it work?

12 What is your average advertising sell-through of ads that you sell directly for your website? What is that sell-through for your mobile phone offering? (Particularly for those that have just started digital paywalls.)

13 What percentage of your print ad sizes are also available in your tablet edition?

14 What is your digital subscriber churn rate? Is your new acquisition of paying customers ahead of the churn? And by approximately how much?

15 Can you list the five most important, written, newsroom-wide performance measures on which news staff is evaluated annually?

16 How is the performance of your standards/public editor/ombudsman, if you have one, actually measured?

17 How many people from the newsroom are listed on the publication’s masthead, especially at print publications? Of those, how many are women? How many are non-white?

18 Assuming most of your masthead people are likely to have been journalists for at least 15 to 20 years, if not more, how many of them have spent at least three to five years in pure digital roles, either in your newsroom or outside it?

19 Of the top operational newsroom editors and managers of your homepage, mobile, video, graphics, and visuals teams, how many are on your masthead?

20 What percentage of your total monthly digital audiences (unique visitors) are from outside your primary home country/market?

21 What percentage of your total paying customers in digital are from outside your primary home country/market?

22 Who owns the daily decisions on what content is free or behind the wall on your products? (This applies even for so-called “hard” walls.) Do these owners have any goals for paid customer acquisition?

23 Where did your last five U.S. newsroom departures go? Where did your last five U.S. newsroom hires come from?

24 Of your masthead editors, how many have accompanied your ad team on a sales/ad relationship building call in the past six months?

25 What percentage of your digital audience comes — and goes away — between 5 a.m. and 10 a.m.? What time is your first major morning news meeting?

Happy answering. Unless, of course, you want to pose your own question: Isn’t it time Corporate stops asking such awkward questions in the first place?

Raju Narisetti is senior vice president of strategy at News Corp. He has previously served as managing editor of The Wall Street Digital Network, deputy managing editor of the Journal, editor of WSJ Europe, managing editor of The Washington Post; and founding editor of India’s Mint newspaper.

Move over, wine club: The Times of London will now manage your wealth for you

Joshua Benton — Thu, 13 Mar 2014 13:30:03 +0000

Perhaps the ultimate symbol of newspapers’ move from mass to elite: The Times (of London) is launching a wealth management service for its readers.

This week The Times and Sunday Times launches a new wealth management service — offering readers the opportunity to invest in a range of products such as ISAs, SIPPs, funds and Investment Trusts, together with access to expert advice and all at competitive rates.

Times Wealth Management offers a clear, trustworthy and personalised service whether readers are planning for retirement, looking to save for university fees, build a nest egg as first time investors or if they are existing investors who are seeking to improve the way their portfolio is managed.

[…]

Neil Martin, Business Development Director at News UK, said: “The launch of Times Wealth Management Services is an exciting milestone for The Times and Sunday Times. When it comes to money, trust is crucial and The Times and Sunday Times have been the papers of record for the latest money, investment and business news and advice for more than two hundred years, thus the titles are well placed to offer a competitive service that our readers are hugely interested in.”

It’s a bit of a cheat, since News Corp’s Times has long been an upmarket paper attracting a disproportionately monied readership, but nonetheless, this may push ahead of the Telegraph’s (significant-revenue-driving) wine store or The Times’ own Whisky Club as a U.K. upmarket marker.

The newsonomics of the print orphanage — Tribune’s and Time Inc.’s

Ken Doctor — Thu, 27 Feb 2014 16:21:23 +0000

Talk about spin. Two of America’s once-iconic publishers are about to be spun. Spun off, that is, from parent companies that have fallen out of love with print and in love with moving pictures. The names of the Chicago Tribune and Time magazine may invoke the publishing golden age birthed by the Colonel McCormicks and Henry Luces, but these publishing divisions today are more than tarnished. They’ve become liabilities, weights on future enterprise,and anchors of low profitability as advertising revenues continue to be eaten away by the Googles and Facebooks of this era. Tribune Company and Time Warner will move on without their namesakes, a plaque or two in the lobby remaining behind to commemorate their illustrious histories.

What we’re seeing unfold this year is an orphaning of distressed publishing assets: setting them adrift in an inhospitable business climate, thinly clothed and with a heavy bag. Call it publishing orphanage. It’s a noteworthy moment in an almost decade-long reckoning with the long slide in both the newspaper and magazine industries.

Both Time Warner and Tribune are working through all the financial and legal issues en route to hiving off their publishing assets from their core TV/movies/digital businesses. Both should have the process completed by the middle of the year, probably a little earlier. Both are following in the footsteps of other media splits, including 2013’s News Corp. and 2007’s Belo and Scripps. But both are planning on putting more of a burden on their publishing businesses than we’ve seen in previous splits, with Tribune’s approach standing out as particularly Dickensian.

In essence, it’s a newer, harsher reality for legacy news operations forced to live on their own. In part, that’s a reflection of the challenges that the non-print sides of Time Warner and Tribune face. Adjusted operating income was down in 2013 for Time Warner’s HBO and Turner divisions and at Tribune’s broadcast operations. Yes, publishing may be distressed — but the TV/video path forward is chockful of competitors too, taking money and customers away at every opportunity.

Both Time Warner and Tribune are assigning significant debt to their split-off companies. But debt is only part of the story. The burdens being placed on standalone Time Inc. and Tribune Publishing are several-fold:

Dividend. The new Tribune Publishing will have to pay the bigger Tribune Company a one-time dividend of about $325 million immediately after the split, as the Chicago Tribune’s Robert Channick revealed last week. The money will be borrowed by the new company.
Debt. Time Warner is sending off Time Inc. with about $1.3 billion of it. And we know that Tribune Publishing will have to borrow that $325 million to pay the dividend and take on so-far unspecified additional debt to finance its operations.
Lease-back. Tribune has already separated out the real estate under and around its publishing operations from its eight newspapers, having figured out that lots of the value of those publishing assets is in dirt. Consequently, when the spinoff happens, the newspapers will have to pay an estimated $30 million in rental costs, through 2017, back to Tribune. Newspaper leases run five years; production facility leases run 10 years. Time Inc. is looking for new cheaper downtown Manhattan office space, although it has paid significant lease costs as an occupant of the Time-Life Building. Neither of the new publishing companies will have solid real estate assets to bank on going forward.
Stripping out digital businesses. While Tribune’s newspapers have struggled mightily, along with their peers, Tribune’s CareerBuilder and Classified Ventures digital classified businesses have helped offset ad loss. Those businesses, and their significant cash flow, stay with Tribune.

To be fair, Tribune has noted in its filings that parent “Tribune is also expected to retain most of its pension assets and liabilities.” We’ll have to wait and see what “most” means.

So, to the question of the day: What difference will the split arrangements have on the journalism that the Los Angeles Times, Chicago Tribune, and Tribune’s six other metro dailies produce? What are the chances that Time Inc.’s Time, Fortune, Sports Illustrated, and Entertainment Weekly, among others, will be able to find a high-quality print/digital way forward?

Will the readers of those publications be affected by the new financial obligations of the publishers? The answer is painfully simple: Yes.

By one measure, the new debt put on the publishing companies is reasonable. Time Warner’s overall debt is $18.3 billion; it is assigning 7 percent of it to Time Inc. Tribune’s overall debt is $4.1 billion, most of which was incurred in its purchase of Local TV stations last fall; it is assigning 8 percent of it to Tribune Publishing. Both new companies, as others have argued, have sufficient cash flow to make the debt service. We can also add to the justification that as divisions of larger media companies, both publishing divisions contributed to debt service all along.

But that argument ignores the reality of 2014. Both publishers have only remained profitable by significant staff cutting. Given that revenues will continue to be down this year for both, somewhere in the mid single digit range, they’ll have to continue cutting costs and staff to maintain profitability. The new debt service and lease obligations won’t break their backs, but they’ll be added new weight on backs already bent. That’s in contrast to those other recent publishing splits which were more friendly to the print half.

The most recent and instructive parallel is last year’s News Corp. split. Pushed by shareholders and Hackgate fallout to split his baby, Rupert Murdoch steered $2.6 billion in cash to the newspaper-heavy company and freed 21st Century Fox to head off into its future. The new News Corp wasn’t assigned any debt, didn’t have to pay a dividend, and kept all the real estate underneath its newspapers. Further, Murdoch threw Fox Sports Australia and digital real estate services into the new “newspaper” company, giving it a couple of growth drivers.

Seven years ago, when Belo split off its newspapers as A.H. Belo, it assigned no debt to the newspaper split. Also in 2007, Scripps separated out its newspaper and broadcast properties from its high-flying cable ones. In that case, the new cable business, Scripps Network Interactive, got $325 million of the debt and E.W. Scripps, the new newspaper/broadcast entity, got $50 million of it. Neither Scripps nor Belo separated the real estate from the legacy operations.

Why? All three companies realized that the standalone newspaper entities needed every dollar possible to find a future. Arguably, the editorial operations of The Wall Street Journal, The Dallas Morning News, and Naples Daily News are better off for it today. Will we be able to say the same when the Chicago Tribune, L.A. Times, Baltimore Sun, and Orlando Sentinel are set adrift?

A few inquiring minds want to know. One of those is Henry Waxman, the Democratic ranking member on the House Energy and Commerce Committee. Waxman raised an alarm about the Tribune’s assignment of debt and dividend to its spinoff back in December. While newspaper business matters generally fall outside the purview of Congress and regulators, the committee does provide oversight of the Federal Communications Commission. Waxman’s interest, though, is more local: The long time L.A. congressman worries about the future of the local L.A. Times. So Waxman has met with Tribune CEO Peter Liguori, and formally requested documents related to many of the burdens I listed above. There have likely been other staff interactions, and there may be more to come.

Waxman is trying to bring a political moral suasion to the Trib spinoff, asking what indeed will be the impact of the Tribune Company’s stripping assets of every kind — terrestrial, digital, and financial — from the newspapers.

But common sense here is paramount. Almost all legacy publishing companies are, to use the polite term, mature enterprises. More precisely, year after year, they take in less money than they did the year before and the year before that. There’s no extra cash lying around. The meager cash flows of these companies goes to:

Keeping things operating. With less money coming in, staff — the largest expense — has been steadily excised for five to six years. Operating expenses consume most of the revenue.
Profit. Almost all legacy publishing companies are profitable. Other than some going into the red in the worst months of The Great Recession, they’ve kept themselves marginally profitable to satisfy shareholders. Many of those shareholders (buyers of cheap debt or shares, or converters of debt to equity out of bankruptcy) have put stringent workout plans into effect to make sure that profits are paid, even as the workforces and product quality has declined.
Investment. Capital expenditures are low and the buying of other companies, to augment skills or technology, is now unusual. Yet the best publishers have prudently invested in a product improvement here and a digital platform there in efforts to drive their companies into the digital age. It’s the kind of investment that News Corp was able to make in buying Storyful in December for $25 million to aid its reporting, or the kind of buy parent Tribune completed in December when it added Gracenote to its portfolio for $170 million. Innovation requires money.
Debt. Then, there’s debt service, with many companies still paying for ill-advised acquisitions at peak market values.

Think of these four as mouths to feed. Publishers must ration food among them, and there’s not enough. So the short answer to the question: Yes, imposing new costs — debt service, dividend payments, or lease costs — on these spinoffs will make life harder. While life gets harder, more staff — including more journalists — get cut. The road ahead for Tribune Publishing and Time Inc. will be harder if the proposed debt and dividend plans proceed. The journalistic output is likely to suffer. Readers and communities will get less and less experienced reporting.

Let’s do some math, first looking at the Tribune context and its numbers. First, there’s Tribune’s heavy cutting pre-split. In late 2013, the company announced a $100 million cost-cutting plan in its publishing division. That resulted in the elimination of 700 jobs across the eight newspapers, on top of 800 job cuts in 2012. The company made a point of saying that newsroom cuts were a small part of those layoffs, but we know there were at least dozens of them, all on top of cuts that have greatly reduced newsrooms from Hartford to Fort Lauderdale through the Sam Zell era (“The newsonomics of the Tribune’s metro agony”). Just as one example, the Baltimore Sun has dropped to fewer than 140 journalists from a peak of more than 400.

Tribune has some cash, but it’s not expected to give any of it to the publishing entity. The most recent financials we have for Tribune show that the company has about $700 million in cash and cash equivalents.

Now let’s look at the percentage of profits that may need to go to servicing debt and how much debt service could equal in terms of jobs. Overall, Tribune Publishing generated $150 million in operating profit for the first three quarters of the year, so we can extrapolate $200 million for the full year 2013. Or course, what generated those profits is cost-cutting. To get to that level of profit, it reduced expenses 13 percent — including 230 positions. The new Tribune Publishing can continue to cut — but a further 13 percent would simply continue the hollowing-out process of the company and its newsrooms. Importantly, Tribune’s newspapers aren’t steady state: Revenues continue to fall.

Now the new debt service. Let’s say that Tribune Publishing will need to borrow $650 million overall, with half of that borrowing going immediately to Tribune Company as that “special dividend.” What might it pay for that money? Lee Enterprises, considered a large well-managed newspaper company, recently refinanced its own debt at 12 percent. (That was actually lowered from 15 percent.) Tribune may have access to cheaper money; let’s say it wrangles a 10 percent rate for the new, market-challenged newspaper company. That’s a payment of $65 million a year — or a full third of those 2013 profits. That’s more weight on Tribune newspapers back.

Now let’s consider individual backs and calculate that number in terms of jobs. At an average of, say, $75,000 a year, that’s 866 jobs. That’s out of total of more than 8,000 full-time publishing division jobs. The arithmetic is fairly straightforward. The obligatory debt service could be paid for by having 900 or so fewer employees. Let’s say it can limit its new initial debt to $500 million. That would still mean more than 650 jobs.

In striving to make the point that it is trying to preserve journalist jobs, the company has pointed out that many of its cuts were in marketing and technology. That may be good for the journalists who would otherwise have been pink-slipped — but those are also two areas where news organizations of the future need more smart investment, not less. In addition, journalist jobs continue to be cut back, even if they are a smaller proportion of the total cuts.

Now let’s look at Time Inc.’s numbers. Time Warner just announced its full-year earnings. To get an apples-to-apples comparison, we take out the new revenues driven by its fall acquisition of American Express Publishing. For the year, revenue was down about 5 percent, and 8 percent for Q4. Both ad and circulation revenues are tumbling. Time Inc., under new CEO Joe Ripp, has also been cutting in anticipation of going solo. Recently, layoffs of 500 employees, or 6 percent of Time Inc.’s staff, were announced.

Ripp has also greatly reorganized the leadership team, putting some impressive new talent in place in key exec and product roles. Just today, we see the poaching of Scott Havens, a highly regarded architect of The Atlantic’s renaissance, who becomes senior vice president for digital.

What effect might that $1.3 billion in debt have on the ability of that new team to transform Time Inc. into a growth company? Time Warner may well get a better interest rate for its orphan than Tribune, according to knowledgeable observers. Let’s peg it at 7.5 percent. That would create an annual debt service of $97.5 million. That’s the equivalent of 1,300 jobs — or another 12 percent or so — of Time Inc.’s workforce, if and as revenues continue to decline.

There are lots of moving numbers here, but the point is clear: As standalone companies with ever-falling revenue, each will have a more direct responsibility for paying off debt, and the likeliest place to pay for it may well be more aggressive staff cuts.

Both Time Warner and the Tribune Company have legal obligations is to maximize shareholder benefit; as recently as this week, a hedge fund began pushing Tribune CEO Peter Ligouri to sell any Tribune asset he can. In these splits, though, we have current shareholders who will have their shares divided. Presumably, from a shareholder point of view, both TW and TRB would want to maximize the chances of both new companies prospering and rewarding shareholders. Is the burden being placed on the spun newspaper assets prudent, given their marketplace and transformation challenges?

For Tribune, it’s clear that it is going to the spinoff route as a way to save on capital gains taxes when the newspapers are sold. (There are complicated tax issues involved in the spin, which you’ll recall came after the Koch Brothers summer spectacular of 2013 — but observers point to a likely sale of the newspapers not long after the spinoff.)

For the current Tribune Company and board, the newspapers appear to be a soon-top-be-dispatched afterthought — one they don’t want to shine much of a light on. Just on Monday, at the J.P. Morgan Global High Yield and Leveraged Finance Conference in Miami, Tribune made its presentation. Given that the company is going mainly TV, most of the PowerPoint’s 25 slides were devoted to broadcast, with real estate, digital properties, and syndication businesses highlighted as well.

In the three slides it devoted to publishing, it highlighted but three fairly broad numbers, with two speaking to a 20th-century audience — and none speaking of dollars and cents.

1 billion newspapers distributed annually
10 billion preprints distributed annually
70 million unique online visitors monthly

The new Tribune is ready to be done with the old Tribune, just as Time Warner can hardly wait to jettison Time Inc. — showing its Q4 and full-year financials both with and without the publishing assets. The divorces are about to be decreed, and terms of disendearment betray a lost love.

The newsonomics of Spotified news subscriptions

Ken Doctor — Thu, 20 Feb 2014 14:30:24 +0000

Can you make digital subscriptions sing?

In a first-of-its-kind partnership with streaming music leader Spotify, The Times of London has brought a whole new meaning to the subscription bundle — even as the wider media world dissects the mega Comcast buy of Time Warner Cable and the impact of that on cord-cutting, bundling, and unbundling (“The newsonomics of Comcast’s deal and our digital wallets”).

In that leap, we see pioneering thinking about a news company’s relationship with its readers, one that tries to blow life into the much-talked-about notion of membership in the digital age.

It’s a straightforward offer, launched February 9. Pay £6 a week (or $10) for The Times/Sunday Times “Digital Pack,” commit to a year, and you get full across-all-platform access to The Times — plus a full year of Spotify Premium. Spotify, the Europe-dominating streaming-music giant (as U.S.-based Pandora now stretches itself into Australia and New Zealand), just revised its own pricing at year’s end. Its premium offer now provides customers ad-free listening and the abilities to download music and listen offline at a price of £9.99/$9.99.

The Times made the partnership move as it moved forward with price parity. While you can still subscribe to its “Web Pack”, or desktop access, for £2 a week, its all-access “Digital Pack” price of £6 is the same as for seven-day print. While most publishers price digital under print (with a notable exception at the Orange County Register, which launched with price parity), The Times has arrived at the point of saying: Have it either way — same price. Want both seven-day print and all-access? Get the “Ultimate Pack” at a price of £8 a week.

The strategy: Push forward strongly into membership-based digital relationships, giving the customers more — and expecting more in payment.

“It’s a unique relationship,” says News UK chief marketing officer Katie Vanneck-Smith, speaking of the reader/news connection with her Times (and tabloid Sun) newspapers. “We’re now getting closer to the things you love, like the journalism of The Times. Spotify is a perfect partner; it offers another passion with our readers.” Vanneck-Smith, a 20-year veteran of The Times (with a little time off spent at the Telegraph and searching for life’s non-financial returns in India) likes to talk about the “heart of the relationship” between readers and their favorite news medium. In this case, it’s The Times, published since 1785.

“Back in 2000, you could see you had to make a choice,” she says. “There’s room for free journalism. Yet you have to have [reader] payment at the heart of what you do if you want to enhance your journalism, invest in it, and invest in the relationship beyond it into more products and services.”

The Times of London famously went paywall early, in summer 2010, nine months before The New York Times. Its hard paywall (offering only tops of stories to non-payers) drew much criticism. Now critics both in the U.S. and the U.K. have acknowledged that The Times’ tough-love approach has borne some fruit.

Its subscription numbers are impressive: 153,000 digital subscribers and 207,000 print subscribers. Most importantly, the combined total of paying readers now exceeds the number that The Times had when it put its paywall in place. London is still a single-copy city, unlike most of America. Consequently, even with a significant loss in single-copy sales, a trend shared by its peers, its print-plus-digital subscription strategy is making up for it. Those are the big numbers, and ones that News UK CEO Mike Darcey has highlighted as he derides competitor Mail Online’s free, ad-based model and speaks of the reader-revenue imperative.

Under the big numbers are the smaller, more telling ones, and that’s in part where the Spotify strategy fits.

Five years ago, The Times had a subscription relationship with only 15 percent of its readers. Now, says Vanneck-Smith, that extends to 55 to 60 percent of its readers, print and digital. In that quest, its philosophy parallels the smarter news companies, like The New York Times, which is well along on the journey of turning faceless readers into customers, and newbies like The Guardian (“The newsonomics of The Guardian’s new Known strategy”).

In the cold world of brutal ad competition with the likes of Facebook and Google, The Times’ relationship to its ever-higher-paying readers is a key path to its future. That path is credited with reducing The Times’ annual loss to the neighborhood of £6 million, down from £72 million in a five-year span.

Why was Spotify added as an inducement to subscribe or upgrade a subscription? The reasons are several:

The audience: Both The Times and Spotify enjoy upscale audiences. But of course The Times skews older and Spotify younger, by a generation — or two. Each has access to an audience the other wants. The mechanics of the deal provides a wholesale Times payment to Spotify for each sub sold. After one year, the Times/Spotify subscriber can buy Spotify on its own — with The Times maintaining the billing relationship, and gaining a commission. This is a digital partnership, something traditionally many publishers aren’t that good at. They like to buy.
Passion: Yes, Times readers care deeply about the news, but they also really like music; Times data reinforces that belief. That’s data that The Times couldn’t get at well five years ago, when it had direct relationships with only a sixth or a seventh of its readers — but it can now. Spotify is, in this sense, part two of a passion play. Last year, The Times (and sister Sun) led the way in offering football video to its subscribers. That live, near-live, and next-day highlight video bundling strategy helped build subscribers over the last year. (Axel Springer’s Bild, the largest daily in Germany, is testing a similar football-highlights bundling, and tells me its performance is “on expectation.”
Editorial and marketing extensions: Spotify is built largely around playlists, and now The Times is enlisting its own personalities to share their own, like columnist Danny Finkelstein’s, and asking profiled figures like Kylie Minogue to offer theirs as well.

Will The Times be regularly signing up more of these passion partners? Vanneck-Smith laughs, noting that the workload involved is extensive and that only true, meaningful mutual value can drive successful relationships. But clearly there’s more in the works.

Bill Adee says The Times’ Spotify deal “gets at what we are aspiring to do.” (How did he hear about it? Via a Rupert Murdoch tweet.) Adee, long a Chicago Tribune digital leader, was recently named to head the new Tribune news spinoff company’s efforts in digital business, product, and partnership.

The Chicago Tribune doesn’t release its digital-only subscription numbers, but figure it’s in the 30,000–40,000 range of other metro leaders like the Star Tribune and The Boston Globe. The Tribune has stood out, if quietly, as a leader in trying to figure out the membership future. It hasn’t cracked the code, but it’s probably doing more wide-ranging innovation around membership than any other daily I’ve seen. As seen on its Tribune Nation page, events, book clubs, products, classes, and commercial offers all try to make new connections with readers.

The Tribune has also offered non-Tribune content as a subscription inducement. Not as sexy as Spotify, perhaps, but the Trib’s seen a little traction in providing wider business content. It has licensed Financial Times, Economist, and Forbes content and plans a wider foray into subscriber-pleasing business content.

Perhaps most worth watching is the Tribune’s Blue Sky Innovation initiative. Aimed to be a digital (and event-based) hub for Chicago’s growing tech community, Blue Sky encompasses content, community, and potential revenue. Its March 9 Mark Cuban event is sold out.

Right now, Blue Sky overall is free, but it may be folded into overall Tribune membership, or niched into a separate paid subscription/membership later this year. Blue Sky positions the Tribune as a convener, a role I think is hugely important in any serious news company’s next-stage strategy.

Overall, this Spotify model speaks to a much larger opportunity, and one that is playing out in an ungainly way across entertainment and news media generally.

Look no further than the announced Comcast acquisition of Time Warner Cable last week. As Comcast prepares to match money and wits with the big boys and girls of digital media selling — Apple, Amazon, Google, Netflix, Facebook — it is trying to figure out what its bundle(s) will look like in 2015, 2018, and 2021. Certainly, it would like to hold on to all those multi-hundred cable channel, $100-plus monthly subscriptions — but it also knows that world is ebbing away; it eked out its first gain in cable subscribers in the last quarter after six years of loss. When did it last gain before then? 2007. It’s no accident of history that that’s also the last year that U.S. newspapers showed a revenue gain year over year. The moneyed legacy world is doing a slow but parallel disappearing act across formats, from cable to broadcast TV to newspapers to magazines.

So last year, Comcast quietly unbundled a bit. Knowing a lot of people just want HBO and local channels, it put together a $40 monthly package for those and Internet access. In a world of $7.99 here (Netflix), $14.99 there (SiriusXM Radio), and $3.46 a week (Atlanta Journal Constitution all-digital), marketers and would-be members may soon be doing all kinds of mix-and-match games.

Media is media. Newspaper business models are far closer to entertainment ones than they used to be. The near-universal all-access pitch demonstrates that. Now, with all-access proven, we move to the nuance of what else to bundle — even as some bundles become undone.

If Spotify can make enough passionate sense to some Times of London subscribers, the same approach may work elsewhere in Europe or in the U.S. (In the U.K., The Times has worked out an exclusive, as it did with football highlights.) If music works, how about Netflix or Hulu deals around movies and TV? With Jeff Bezos standing supreme, with one leg in Amazon’s media-selling business and another in The Washington Post’s news business, isn’t a new D.C. bundle inevitable and logical?

What about membership bundles that may tie together public radio basic memberships, at about $40 a year, and newspaper ones? Overlapping audiences, we’d assume.

In sports, the Orange County Register rolled out a model Register/Los Angeles Angels (of Anaheim!) bundle last year. Many publishers have told me they admired the innovation, though follow-on adoption or adaptation has been scant.

For newspapers and magazines used to self-referential subscription offers, a mindset change is required — and the addition of serious marketer talent, drawn mostly from outside the world of traditional publishing. But the possibilities are near-endless.

The newsonomics of The Guardian’s new “Known” strategy

Ken Doctor — Thu, 06 Feb 2014 15:00:27 +0000

LONDON — The Guardian is an enigma.

Long a storied editorial brand, it’s been propelled toward the top of global news audience, both by its open strategy and its hard-nosed journalism. In the past year, it’s broken story after story on NSA spying as the primary recipient of the Edward Snowden files. It’s also expanded its efforts in both the U.S. and Australia, enlarging its global readership. With “open” as its watchword, The Guardian has pushed into every nook and cranny of the social sphere, as cataloged here at the Lab.

But it’s also the Rodney Dangerfield of commercial journalism: It gets no respect. That contradiction — between a worldwide reach and respect and a business strategy that has seemed unstrategic — may be passing into history.

Consider its Known Strategy. Laid out for me by Guardian News & Media’s David Pemsel, it’s aimed at closing that wide chasm between The Guardian’s two faces. Smartly, it intends to leverage the great “open” position of The Guardian rather than fight it.

In brief, it’s intended to make business sense of that great Guardian global reach of nearly 40 million monthly unique visitors, shaking off their anonymity (within The Guardian’s own code of privacy and ethics, course) and making them “known” to The Guardian. Let’s look at the mechanics of the Known Strategy — but first, let’s consider its context.

Start with Pemsel, a fast riser in the organization. Hired as chief marketing officer in 2011, he became first chief commercial officer and then, in December, deputy chief executive to CEO Andrew Miller. His twin backgrounds: television (ITV) and marketing. Pemsel grew up with the paper; his father, who worked at the BBC, identified with The Guardian’s rebellious streak. That’s characteristic of even the people on The Guardian’s commercial side: They identify with the company as a cause as much as a place to draw a paycheck. “The world’s leading liberal voice,” as it still proudly calls itself, remains a company unlike its news brethren.

Pemsel’s big push: link the passion of the brand with making money.

Wait a minute: You thought The Guardian wasn’t supposed to make money? That’s the sometimes bizarre atmosphere Pemsel says he walked into when he joined up. The ambivalence about making money surprised him and more: “aghast, horrified, and shocked” were the words he used. Somehow, The Guardian’s penetrating, crusading journalism and the “open” editorial strategy espoused by editor Alan Rusbridger had overwhelmed the rest of the business in how it was perceived, and sometimes in how it operated.

Pemsel says he’s been at pains to correct his biggest advertisers and agency clients: The Guardian isn’t a nonprofit. (Legally, it’s a for-profit, with a single shareholder: the Scott Trust Limited, which is legally charged to reinvest profits to “sustain journalism that is free from commercial or political interference.”) The problem Pemsel found in the ad community wasn’t a matter of legal definitions. Rather, it was: If you’re going to sell million-pound campaigns, you’d better be seen as a business.

“We had to scrap our way to commercial credibility,” Pemsel says. Some numbers say The Guardian is headed in the right direction. It reports its results only annually. Through last March, it showed a 29 percent increase in digital revenues to £55.9 million (or $91 million), growing at twice the rate of the digital ad market. Look for similar results when it reports again in June. The reasons: unprecedented high-level engagement with top brands and agencies, like telco EE and Unilever, and a new generation of revenue out of native ad-oriented Guardian Labs. Like its peers, The Guardian has moved to an audience-based sales approach that is pulling in bigger campaigns at good rates.

But that digital ad growth is just offsetting print declines. Even though The Guardian managed to gain print readers recently, it is of course seeing the same kind of print ad drop as the rest of the industry. Significantly, it doesn’t have an overarching paywall strategy (though it charges for some tablet and smartphone app access). So it’s been the digital ad increase that has been responsible for helping get the company to flat revenue — unlike, for instance, The New York Times, The Wall Street Journal, and the Financial Times, which have used digital and all-access subscriptions to make up for print losses. As a whole, The Guardian stands at roughly that magic number of zero revenue growth (“The newsonomics of zero and The New York Times”), looking to shift into growth mode.

In survival mode not long after taking his post in mid-2010, CEO Andrew Miller laid out a five-year plan for turning the company’s losses around. Even with the Scott Trust structure, Miller said that The Guardian could run out of money in five years if it didn’t change its ways. Since then, much has changed, though there’s lots more to be done. Staff is The Guardian’s No. 1 cost, of course, and there have been layoffs, right-sizing, and other cuts. One goal of the five-year plan: cut £25 million out of the newspaper cost base by the end of the 2015-16 fiscal year.

Most significantly, last month Miller pulled off his long-awaited coup. He sold The Guardian’s 50.1 percent stake in the auto-dominated Trader Media Group to minority owner Apax, for £600 million ($985 million). Miller, who had headed TMG before moving over to The Guardian, has one big asset left to sell, the TRG group, in which it owns a 33 percent share. (David Worlock provides a good backstory on these investments.) The Guardian — just like The New York Times Company — is slimming down to its core asset, having sold off radio, a property services group, the legacy Manchester Evening News, and more over the past several years. For both the Times and The Guardian, the game is simple: A singular, global news strategy. One big bet on the future.

When the Trader deal closes, likely by month’s end, it won’t just provide The Guardian money — it’ll buy time. Time, in this era of rapid transformation, is the key. How much time and how the proceeds will be invested are still open questions. While The Guardian gains a big nest egg, it loses Trader’s contribution to profit and revenue, and will do the same when it sells its TRG stake.

Without those contributions, The Guardian continues to lose money. Under Miller, it has cut those losses, but the news group itself — Guardian News and Media, made up of the daily Guardian and the Sunday Observer — lost £30.9 million last year.

Consequently, for Miller and for Pemsel, the five-year march is still on, now in Year 3.

Therein lies the Known Strategy. On one hand, we have the fruits of The Guardian’s journalism and its strategy of ubiquity. “Open journalism,” available free on many platforms, feeds traffic. The new country-specific sites in the U.S. and Australia multiply traffic. The Snowden scoops pour in lots of new readers. All together, The Guardian draws in about 40 million unique visitors a month, about two-thirds of them outside the U.K., though, of course its U.K. readership is the most engaged. In traffic, it’s competitive with the global reach of The New York Times and Mail Online.

Registration is the glue in the middle: getting readers to reveal something of themselves, then more over time. To the extent they do that, they move from being unknown hordes to potential buyers of…something.

Then there are all the ways The Guardian could — and might — monetize an increasing percentage of those 40 million. We start with the 180,000 or so who pay The Guardian for something other than advertising. We get to the 180,000 number by adding The Guardian’s print subscribers (not counting its heavily single-copy buying readership) to those paying for its individual mobile apps, sold at differing price points on different continents. In my mind, that’s still the best way for publishers (and journalists) to get paid. Beyond that, there are these current Guardian businesses:

Guardian Masterclasses, in which Guardian staffers teach storytelling, photo, and other skills;
Soulmates, the long-standing Guardian dating site for lonely liberals;
Products, all manner of them, from gardening to stationery, provided on a white-label basis to Guardian readers by retailers — a source of revenue more common in the U.K. than the U.S., interestingly.

That’s today. The big open opportunity is membership.

Pemsel has hired David Magliano to be managing director for membership strategies. A Guardian membership program, one that contains some audacious elements, is in the planning stage, but details are still confidential. It’s got to be audacious: Without a paywall — the way the FT, the Times, the Journal, and now hundreds of local dailies have turned digital readers into known quantities — The Guardian has unprecedented outing-of-the-anonymous-masses work ahead of itself.

Paywalls have been effectively used in two ways by publishers to get to know more about once fairly unknown readers: (1) incentivizing and cajoling print subscribers to register/authenticate themselves online, and (2) earning registration as an interim step toward subscribing — a practice the FT, in particular, has perfected. Without the paywall, The Guardian’s membership pitch will have to be especially meaningful.

But if The Guardian can get one or two or five percent of unique visitors registering for some level of free or paid membership, then it can multiply its revenue from services and products.

“Known,” then, isn’t a blindingly new strategy — but in a single syllable, it brings a bracing clarity to what news publishers must do to compete in a world of data, analytics, and programmatic ad selling, led by Google and Facebook. Only by winning over, serving, and deeply knowing their customers, will publishers find the business models to sustain themselves.

Like most publishers, The Guardian is reliant on advertising for a majority of its revenue. And like most execs, David Pemsel knows that even with all he’s doing to win the digital ad game, consumer direct revenues must be a big part of The Guardian’s five-year-and-beyond plan.

Unique to the challenge of The Guardian, with its open philosophy and paywall-eschewing strategy, is a way to leverage The Guardian’s “open” vision into a differentiating commercial strategy. The Guardian can hope that in Pemsel, it has found the right partner for Alan Rusbridger — one who can turn openness into commercial success.

At this point, Known is at its beginning, and playing catchup to some of its peers whose strategies have already netted them hundreds of thousands of known customers. It’s a parcel of good ideas in search of substantial reader revenue. It seems directionally correct, and that’s an achievement for a company whose editorial excellence has thus far surpassed its business savvy. Membership does offer vast potential, but it’s unproven; no news publisher has yet cracked that egg.

It would be great if The Guardian could directly get its digital readers to pay up more directly. But it remains unconvinced in the value of paywalls; its paid apps still seem to me to be a scattershot approach. Andrew Miller and David Pemsel, though, could be right: Membership — if smartly executed — could produce even bigger dividends than current paywalls.

The newsonomics of momentum in the WSJ/NYT battle

Ken Doctor — Fri, 10 Jan 2014 16:44:48 +0000

What a difference a year makes in America’s national newspaper war.

As we look back at 2013 — and forward to 2014 — we see that The Wall Street Journal, an innovative leader in the digital news business, seems to have lost momentum in its titanic battle with The New York Times. TWEET

When Rupert Murdoch bought the Journal and its parent Dow Jones six years ago, he declared that war, aiming to blur the historic line between a business newspaper and a general interest one. The declaration was pure Rupert: part real animus, part envy, part bluff, and wholly aimed at winner-take-all. Even as the deep recession wounded all publishers, Murdoch invested in the conflict, establishing The Wall Street Journal as a pioneer in news video, tablet innovation, and global growth, while also investing in old-fashioned reporting resources, launching expansions both in general news and in coverage of New York City. His moves on offense contrasted with the strategic retreats of the Times. The proud company was forced to sell its new headquarters space, take on onerous loans, and live perilously on the edge.

For much of the past half decade of hand-to-hand combat, the Times appeared uneasy in its footing. Through tough times, it managed to hold together its core asset — the 1,100-or-so–strong newsroom. But for much of 2012, the eight-month search for a new CEO emphasized the Times’ double vacuum of leadership and strategy. The media’s whispering classes conjectured that the Times was taking so long to find a CEO because the choice could be the one that would make or break the Times’ ability to survive as a standalone, Sulzberger-family–directed institution. Then, enter new CEO Mark Thompson, immediately dogged by various BBC messes, as he worked to establish credibility for himself on this side of the Atlantic.

Today, the tables have turned a bit. At the Times, the reader revenue strategy — exemplified by its digital paywall — has offered a greater sense of stability, a modicum of hope, and a budding confidence. It has completed a multi-year strategy to place all its chips on the flagship New York Times brand, selling off The Boston Globe and rebranding the storied International Herald Tribune as the International New York Times. Thompson looks like he has survived the North Atlantic winds of controversy. Though execution remains a big question, its areas of focus are the clearest they’ve been in a long time — innovating the second phase of reader revenue (“The newsonomics of The New York Times’ Paywalls 2.0”), finding new growth in digital advertising, and redoubling efforts and staffing in video and mobile. The Times organization is moving in a more unified direction than it had in previous years. Further, it is basking, even if just for a digital moment, in the glow of being the global pioneer in paid digital reader revenue models.

The year’s final financial performance (to be reported Feb. 6) will show a year similar to 2013, with maybe a little growth in revenue. It’s not out of the woods yet, but a clearing is visible.

The Journal is another story. At best reading, it’s been a year of reorganization, shuffling just about everything that could be shuffled, above and within the Journal’s reach. Its parent company spun off all its newspapers (and a couple of other balance sheet-improving ventures) into the new News Corp, complete with lyrical Murdoch-written logo, as the now-separate 21st Century Fox moves forward into the more profitable world of TV, film, and digital video. Lex Fenwick, the CEO of immediate WSJ parent Dow Jones, has brought Bloombergian B2B zeal to the remaking of the company.

Fenwick’s moves to radically rationalize and reshape Dow Jones B2B products have gained most of the attention, but a careful view shows that the same one-product, one-price strategy has fundamentally altered the Journal’s direction. Further, we’ve seen a profound exodus of top Wall Street Journal execs and much change in management overall — and limited new product development. Though fewer financial performance numbers are released about the Journal than the Times, a set of them affirms that the Journal’s assumed ascendancy in its head-to-head war with The New York Times is no longer true.

In previous years, I’d written much about the Journal’s innovations in video, mobile advertising, and other areas, more than I’d noted the Times’ product innovations. What happened in 2013 to turn the innovation tables? Though Dow Jones declined to comment on the company’s overall performance and strategic focus, I talked to numerous people in and around the war to get a sense of the wider newsonomics of the competition. Here we focus on their businesses, not their journalism — which continues to be distinguished in both shops. The success of those businesses, inevitably, will shape available newsroom resources for both companies in the years ahead.

Unexpectedly, this battle has between much more of a newspaper-to-newspaper competition. Six years ago, the Times still owned a variety of businesses from which it has now exited. Now it’s the Times alone. The corporate change in and around the Journal is more profound: While the Journal is part of a larger company, it is now a part of a newspaper company. Until the mid-2013 News Corp split, its performance could be subsidized by an Avatar blockbuster or healthy Fox News profits. Now it’s looked to as a profit center.

With News Corp’s London-based Times papers and New York Post being money losers, the Journal stands after the U.K. tabloid Sun (the best-selling paper in Britain) and its Australian newspapers in financial performance. Though new News Corp CEO Robert Thomson inherited a comfortable $2 billion cash cushion and no debt (in contrast to the planned Tribune spinoff), the cratering of the print ad business means that News Corp shares the financial pressures of its peers. The Journal must begin to stand on its own.

With that landscape in mind, let’s look at where the Journal now stands, in its management, its business performance, and its product innovation.

Management

Fenwick took command of Dow Jones two years ago. Long-time Murdoch loyalist Les Hinton stepped aside, as the collateral damage of Murdoch’s U.K. Hackgate threatened to impact the Journal.

Fenwick seemed like an odd choice at the time. A veteran business-to-business executive, he brought the legacy of his long-time Bloomberg tenure to what had long been mainly a business-to-consumer company. Though Bloomberg’s B2B terminal-based model has been wildly successful, its multiple attempts to grow consumer businesses in TV, radio, and magazines have far less so.

Public attention on Fenwick has focused on two things. One is his management style. Fenwick is universally described as a man who likes to be the decider, a top-down exec in an age where at least the hint of collaboration is nearly universally espoused. Secondly, the information world has been astounded at his remaking of the B2B side of Dow Jones.

Launched after lots of internal integration at year’s end, DJX has become Dow Jones’ Bloomberg. It’s one product, largely at one price, bringing together its Factiva enterprise information services, the Dow Jones Newswires, and much more. The early reaction to the higher pricing (with some customers being asked to pay three times or more what they previously did) and to the lack of separate product choice has been noteworthy. Cancellations have been reported, but it’s too early to know the overall business impact of the major change.

What’s important for Journal watchers to know is that the same single-product, single-price strategy now being tested in the B2B marketplace has been applied to the Journal.

As the application became clear, the exodus began. The Journal has seen dozens of managers leave. Alumni talk about the exodus of summer 2012 and summer 2013. Within six months of Fenwick’s arrival in February 2012, the departures had begun, concentrated early on in and around the Factiva business. Some were forced; many were voluntary. The summer timing wasn’t coincidental: News Corp’s fiscal year ends June 30, and annual bonuses are paid in August. Consequently, it is the last 18 months of the Journal that have seen the greatest change.

Across the Journal, top management change has been sweeping. A very partial list of the departed:

Todd Larsen, president
Alisa Bowen, head of the digital business
Michael Rooney, chief revenue officer and ad head
Beth Buehler, head of business management and business development
Laura Evans, head of audience insights/analytics
Jennifer Jehn, head of consumer sales
Daniel Bernard, chief product officer
Dean Delvecchio, chief information officer
Bethany Sherman, chief communications officer of Dow Jones
Christine Brendle, publisher at Wall Street Journal Asia

All but Bowen — who now heads the challenged-but-cash-flow-vital digital business for News Corp’s Australian papers — left News Corp.

Why did they go? While Fenwick’s management style is part of it, the reasons go directly to the nature of what they were able to do to move the Journal’s business forward. As Fenwick moved toward single-product, single-price, the execs found:

they had less latitude to experiment and innovate in their groups;
that if they could justify innovation, necessary resources — tech and otherwise — had been diverted to the massive DJX changeover; and
that the B2C business had switched places in Dow Jones thinking, becoming the less-favored child.

Some weighed a personal strategy of waiting out the new regime. Most decided that even if top management were to change again, the unwinding of this single-product, single-price change would take a couple of painful years to happen.

The shock of the change — close to a 180-degree reversal — permeated all parts of the Journal’s consumer operation. It’s meant that the Journal — which put its model-breaking WSJ Live on more than two dozen non-WSJ video platforms (“The newsonomics of WSJ Live”) and did an early test with Pulse to determine the pros and cons of third-party distribution — cut back on its partnership and third-party platform testing. While the Times and the Financial Times are testing subscriber-authenticated reading on Flipboard, the Journal is absent.

The 2011 “WSJ Everywhere” strategy seemed an artifact of the past. Many of the business partnership plans and tests — all designed to pour new would-be paying customers into the top end of the customer flow via sampling — ebbed away. The issue: If you don’t throw out more fishing lures, through introductory pricing and wider sampling across platforms, paid subscriptions inevitably will flatten — which they have.

Further, the strategic change meant that new segmented, separately priced digital news products, like CFO Journal and CIO Journal, would be folded into the single subscriber proposition. Ironically, that comes at a time when separate niche products like Politico Pro is the new industry model — at the arch-foe Times too, where executives plan to test three such products in the spring.

That’s not to say that the Fenwick pricing philosophy doesn’t get credit. Even his critics say he has rationalized pricing that was too loose. The problem, they say, is that in swinging the pendulum over to stronger pricing, he hasn’t allowed that cheaper, introductory-offer sampling that the business today requires.

Among many of the exec replacements is a common career stop: Bloomberg. For instance, Trevor Fellows, who replaced ad leader Michael Rooney, is one of the many Bloomberg vets to have replaced the old guard. Beyond the question of clubbiness is that B2B background and how well it applies to the Journal’s consumer business.

To be clear, Fenwick had done with the B2B business what he was hired to do. Robert Thomson had longed talked about the B2P (professional) market, and how a company with Dow Jones’ vast resources should more smartly serve it. He’d been frustrated about the pace of that rethinking and reorganization. Thus he had a strong hand in selecting Fenwick. The goal: Make more out of the B2B businesses that may have contributed only about 30 percent of Dow Jones’ revenues — but a higher proportion of its profit.

The consumer impact of the Fenwick appointment may have been unanticipated.

When Robert Thomson leapt from his position as top editor of the Journal to CEO of the new split-off News Corp, the balance of power at the Journal shifted. Though Thomson had been the editor in title, he wielded much wider business influence. His successor, Gerry Baker, is much more a traditional newsroom leader. The business savvy that Thomson had brought to his job is no longer in place to balance Fenwick’s B2B proclivities, as the new CEO faces the big task of managing the new three-continent News Corp, the largest news company by revenues globally.

Financial performance

The Journal and Dow Jones financial performance is somewhere in the middle of the new News Corp pack. News Corp doesn’t break out the results of its individual companies. Overall, the company’s first quarterly report as a spin-off, issued in November, was subpar, down 5 percent in EBITDA and 4.3 percent in adjusted revenues.

Its majority News and Information segment was worse, off 6 percent in adjusted revenues year over over year. We do know that circulation revenues were down 6 percent overall at Dow Jones for the last quarter, or $11 million, though we attribute that decline to the company’s struggling B2B sales, not its Journal print and digital subscriptions.

Advertising still represents a majority of revenues for the Journal, sources say, in the mid-50s percentagewise, with circulation in the mid-40s. That’s the inverse of the Times, which recently reported that 56 percent of its revenues now come from readers. Given that reader revenue is now growing as paywalls have gone up, and that print ads remain in sharp decline, majority reader revenue seems to be the preferable market position.

Sources say that the Journal failed to make its advertising budget for 2013. Like all dailies, it is struggling with print, likely with a low-to-mid single-digit decline and a mild drop in digital advertising as well. That performance would be quite similar to the Times.

We can estimate the Journal’s current profit in the 5-8 percent range.

Readers

If we measure Lex Fenwick’s application of single-product, single-price to Journal subscription pricing, we can see where he’s had success. The Journal has long lagged the Times in pricing, and even his critics credit him with rationalizing print and digital pricing. While that has meant less sampling, it’s also meant more immediate revenue, with double-digit price increases in print and digital. How much more circulation revenue we don’t know, nor do we know how it compares to the Times’ year-over-year increase of 4.8 percent there.

The overall readership numbers for the Journal, though, appear flat. Total average circulation, as measured by the Alliance for Audited Media (the industry’s successor to the Audit Bureau of Circulation) is down 1 percent, 2013 compared to 2012, as we can see in the chart below. The Times is up 15 percent, as we see below.

Both papers have lost print readers, of course, but the Journal lost more last year: 9.5 percent of its daily (six days a week) print circulation, compared to a 5.7 percent comparable weekday loss for the Times. Over the last two years, the Journal has lost 13 percent of print circulation; the Times has lost 12 percent.

Over the last year, the Times posted a 31 percent gain in paid digital products; the Journal was up 15 percent. Over the last two, the Times posted a 265 percent gain in paid digital products; the Journal was up 55 percent. (Observers may note that The New York Times’ “total non-replica” number through September 2013 — 1,206,214 — is substantially higher than the paid digital-only subscriptions it announced at about the same time, 727,000. That’s because the AAM number counts digital usage as well as individual paid subscriptions. Constructively, that’s a double or triple accounting of some paid customers, a metric whose value is uncertain. For our purposes, the AAM numbers, though, offer apples-to-apples comparison between the Journal and the Times.)

Consequently, in all the available public reader data, the Times is faring better than the Journal of late.

To be fair, the Journal was a turn-of-the-century pioneer in paid digital strategy, and one might imagine a plateau would come given that 10-year lead. Acknowledging that, the questions become: What has the Journal recently done to build on that lead? And how come it let its foe catch up?

In digital traffic, October Nielsen data below shows the Times with far greater reach than the Journal in their home country. Its U.S.-based audience is more than double the Journal’s. The Times manages 36 percent more time per person than the Journal and a page more per month, a 9 percent advantage there. The Times’ new redesign, launched Wednesday, is intended to further that engagement lead, even as the Journal gets ready to launch its own digital redesigns later in the quarter.

Looking forward both on reader revenue and engagement, a critical question facing the Journal is whether to stick with its freemium model. That model, more commonly used in Europe, puts up a hard wall in front of many articles, especially the Journal’s unique stories, while allowing others to be freely read. Developed before the meter — which allows readers a free sampling of from 5 to 25 stories a month — the freemium model may be less flexible and consequently less successful in converting occasional readers into paying subscribers.

Products

New product development is a reach for new subscribers and readers, for advertising — and for buzz. Both the Journal and the Times have learned from digital startups the value of launch announcements.

Both have emphasized video. Late last year, The New York Times Minute won lots of notice as an attempt to satisfy news customers with quick three-subject reports several times a day. Its year-earlier Snow Fall project had redefined integration of multimedia into traditional storytelling. The Journal’s WSJ WorldStream, a first-of-its-kind video blog, launched in mid 2012, but has received less attention. Alan Murray, the Journal’s then deputy managing editor and a key part of much of the pre-Fenwick consumer innovation, is another of the execs who’ve left, becoming head of the Pew Research Center in November 2012.

Video is a key battle area between the Journal, which once had a substantial lead, and the Times. Chris Cramer, named head of video last March, is one of those trying to restart the innovation engines at the Journal. A BBC/CNN veteran, he has been joined by Edward Roussel as head of product and Michael Rolnick as chief digital officer.

Cramer points to growth in the video business, citing:

expanded WSJ Live coverage in Asia and Europe;
a 200 percent growth in WSJ Live pageviews since the September 2011 launch; and
plans for a bigger focus on global technology coverage and U.S. political coverage in Washington.

Further, the December News Corp purchase of video aggregator Storyful should help video strategies — and indicates the potential of greater strategic alignment across News Corp news properties.

For all who’ve moved into new roles at the Journal, the tasks are straightforward and parallel the goals that Mark Thompson has set out at the Times. They are all around the familiar: more reader revenue, support of digital advertising, mobile expansion, video exploitation. That requires building on innovation, marketing it well, and being perceived as a leader. This is a game both about leading change — and grabbing attention for it. Here, too, the Times seems to have gained an edge on the Journal.

We’d have to believe that a comparison of the Journal’s and the Times’ recent trajectories would make Rupert cringe. He believed he had the Times on the ropes, and now he finds his prized Journal playing catch-up. at least in the game of media perception and in a number of key metrics. In trying to fix the B2B side of Dow Jones, the company looks like it took its eye off of the Times competition, allowing the Times to catch up after Murdoch and Robert Thomson had invested so much in the new Journal.

Thomson, himself, has got to be casting a more direct eye on the paper’s fortunes as Lex Fenwick enters his third year of reorganization with quite uncertain results in both B2B and B2C. We may see the News Corp culture — pick a top leader and give him room to make the changes he sees fit — tested strongly by the time 2015 comes around. Commanders have their place, but changing out the officer corps in mid-battle takes its toll.

In the Journal/Times faceoff, the competition is far from over — but the battle lines have changed.

Photo by Jonathan Seitz.

Vice News wants to take documentary-style storytelling to hot spots around the globe

Justin Ellis — Tue, 07 Jan 2014 15:56:03 +0000

If there’s a mantra for the team behind Vice News, it might be: Go where the story takes you. The soon-to-launch news channel from Vice is designed for the type of journalist who wants to strap a camera to her back and jump head first into a conflict zone. That’s already taken Vice reporters to places like Sudan, Syria, and the Central African Republic, to report on violence inside the country’s borders. When Vice News goes live later this winter, look for a lot more of that.

“We’re basically going to play to our strengths, which has been that longer-form documentary video,” said Vice News editor-in-chief Jason Mojica. “We’re going to be increasing the volume of that significantly.”

Over the past few months, Vice has expanded its editorial staff to more than 100, with people working in 34 offices around the world as well as other remote locations. The plan is to officially launch a mobile-friendly Vice News site to compliment the Vice News channel on YouTube. “This is the next logical place to play and space to create,” said Eddy Moretti, Vice’s chief creative officer. “It’s this organic thing. We didn’t start thinking we would launch a news channel one day.”

Vice — which started 20 years ago as a Montreal magazine — has made a name for itself in recent years through its documentary-style videos that take viewers into stories and parts of the world they may not know well. With the expansion of Vice News, the company plans to build on the existing work they’ve done in video and, well, go bigger.

The operation was the beneficiary of a warm glow of journalism enthusiasm this fall after word got out the company planned to beef up its journalism, expanding into new areas of coverage and hiring new people. It’s a familiar storyline in the world of media: Upstart company (Al Jazeera America, BuzzFeed, the list goes on) has money to invest in news, which attracts the attention of journalists like a school of fish after the next meal. Like the companies that preceded them, Vice promises an approach to journalism that is outside the norm. The trailer for the forthcoming news channel gives a clear look at what Vice is interested in: unrest, conflict, revolution, persecution.

Vice isn’t building entirely from scratch. From its magazine roots, Vice has branched out over the years in writing and video to build blogs around music, fashion, and technology. In a way, news is just another vertical in the mix. The ambitions for news are big, Mojica tells me: They want people to come to Vice for deep reporting on topics like the environment, national security, health, and money. “I think where we want to live is in a part of the healthy news diet, the food pyramid of news,” he said. “Read The New York Times and come to our site, or vice versa.”

It’s news with a voice, but also news that spends time on a subject. One thing they’ve learned from the videos produced so far, is that audiences will take time on a subject if you find the right connection, Mojica said. “It’s important for the site to be a place where you can come everyday to find out what’s happening in the world that affects your life,” he said. That said, don’t expect Vice to chase the general interest stories you might see elsewhere. The goal, he said, is to focus on the storytelling they do better than anyone else: “I don’t think we’re going to serve ourselves or our audience if we try to be all things to all people.”

Vice grabbed headlines with its look into life in North Korea (with the help of Dennis Rodman, last seem screaming on CNN this morning) and its chase (and ensuing fiasco) through Central America with fugitive millionaire John McAfee.

The Vice editorial plan is big on video, the revenue whale nearly every major online news organization is chasing — either documentary-style stories or live coverage from events as they happen. It’s a mix of of-the-moment and delayed. That’s part of the reason Vice is staffing up, bringing on editors, reporters, videographers to help shape the areas that will be covered, as well as figuring out the right metabolism for the operation.

Mojica told me they’re looking for people with skills on both sides of the camera, from backgrounds that could be professional or YouTube-honed. The key, he said, is that they are driven: “Vice is not a place for people who need to be told what to do,” he said. “It’s for people with big things they want to achieve. We can empower them and make that happen.”

Vice raised $70 million this year by selling a 5 percent equity stake to 21st Century Fox. That investment earned it some notice for valuing the company at $1.4 billion — less than two weeks after The Washington Post had been sold to Jeff Bezos for a mere $250 million. (Interesting that Vice falls on the entertainment side, not the news side, of the News Corp split.) The company also struck deals with CNN, to feature Vice content on CNN.com, and HBO, which airs a half-hour show produced by the company.

Part of the interest in the company comes from its appeal to younger audiences. Mojica said Vice’s internal metrics show its audience is indeed young. Part of the appeal of Vice is because many of those telling stories are young themselves, he said. But identifying with Vice is also about the voice and tone of the work, Moretti told me. Vice approaches stories at a ground level, and reporters often inject plenty of their personality into the work. What really connects with audiences, Moretti said, is taking a story beyond the length and depth of typical TV or newspaper stories. “In a weird way, what they’re looking for is a level of empathy within the reporting, so that it’s not just a series of metrics,” Moretti said.

What works, Moretti said, is going beyond the clip and soundbite-centric storytelling found on most broadcast news. Despite what conventional wisdom might say, Moretti says young viewers want more than 60-second clips. It’s video’s ability to be immersive and narrative that lets Vice connect with audiences, he said: “It’s slowing down the flow, the speed at which the news comes now,” he said.

Vice now spans print, digital, and TV, not to mention advertising, with Virtue, the company’s in-house creative agency. That’s a lot of tentacles operating at the same time. Mojica said that also offers plenty of lessons for the new news division to learn from. While they plan to build a mobile-friendly site for Vice News, Mojica said the aim is to offer video and other reporting in as many venues as possible. While some people watch on their laptops or phones, others, like Mojica, are fans of streaming video over connected devices like Apple TV. “I think our general attitude towards method of delivery has helped us, in that we’ve always been agnostic and focused on content rather than get hung up on platform,” Mojica said.

Mojica, who has had stints working for Al Jazeera and 60 Minutes, thinks the appetite for news and information has never been stronger. The channels for getting news, and the way people consume them, are what’s changing, he said. “All of us love to complain on the state of journalism. And now it’s time to put up or shut up,” Mojica said. “I consider it the biggest challenge of my life, and one that I’m really looking forward to.”