Unlike its competitors, Google does math first, then builds solutions. The
word predator describes the approach taken by Google's management team to 'watch and wait' for business opportunities. This approach is different from the
aggressive marketing and in-your-face sales practices used by many companies
NOTE: This post has been updated to correct "worth" to "revenue".
At an Advertising Week event sponsored by Yahoo! today at the Time/Life building in midtown Manhattan, Yahoo execs talked about a new breed of "Passionistas" who seize on a topic and want to be the first with information, and the first to share information. That mindset reminded me of the way the classic breaking news journalist is: get the info first, report it, share it, beat others to it, constantly, obsessively, scour any and all sources for scraps. Never want to be second with something.
A difference, though, is the passion the people have for their topic. What wire service journalist, for example, is going to devote himself to a niche area of health in the same way that someone desperately interested in it will? For health, the number of Passionistas is 1.8 million, Yahoo's folks said. And marketers want to go to them, directly, because of the passion they have and inspire in their readers.
Now, I know, they may not be professional journalists. But on a blog, they'll be called out by the community for inaccuracy. If they're not objective that's usually, over time, pretty obvious. Many countries' –first-world countries – journalists practice journalism on their front pages with a bias (
I know what I'm writing here is heretical to a lot of people who consider themselves journalists. But those in the managerial ranks had better acknowledge the threat to not just their classified ads from Craigslist, their display and brand advertising from Google and YouTube, but also to their marketing dollars from people with a journalistic ethos and an incredible passion for a topic that may jibe well with a marketer's interests. Which is a commercial rationale – and perhaps a journalistic one – to do something Jeff Jarvis and others have suggested: bringing those bloggers into the fold, letting them tap into their communities through the portal provided by the mainstream news organization.
Google, unhappy with what it calls a patchwork of conflicting privacy rules in some countries and a complete lack in many others, is pressing for action amid criticism about the enormous access to personal information on the Web.Google has, as the article notes, had its own privacy issues. A cynic could say the company's call for uniform rules over the next five years is just a way to get five years of breathing room. But it also could be a smart way to get out in front of the issue.
Imagine knowing how many people are doing any given activity at a certain time, with what brands or people or instruments ... that's powerful, and potentially commercially valuable information. Add the information overlay of Semantic Web (or Web 3.0), and you could have an even more powerful cloud.
I became more convinced than ever that companies are going direct to their constituents, using media techniques, and that the more media savvy consumer and worker will be more empowered this century. FWI founder Margaret Regan, and old and dear friend, raised some fascinating questions about media consumption according to generation, culture and nationality, and how to handle information gaps. But that'll have to wait -- I'm tired and it's late. Stay tuned.
Turns out that Fox has the rights to Pac 10 games, and instead of -- as is common practice -- letting the rights revert to the school or conference if the network chooses not to pick up the game for its TV network, they hold them regardless. Seems short-sited of Stanford/Pac-10 to have let that happen, and of Fox to demand that (though I can't fault them in a hard-nosed business sense for doing so. "If they wanna watch football, they should watch something on Fox.")
At the OMMA conference today e-Marketer CEO Geoff Ramsey made a good point: user-generated content is scary, unless ads can be targeted really well. So, you can avoid anything you want to avoid, and hit users you really want to hit.
He also noted that to get in on the social networking boom you'll have to let go a bit of the anal-retentive need to control everything if you really want to get a discussion going that lifts your brand, creates content. "There is going to be some negative stuff and you ahve to be wi9lling to deal with that," he said. People in a discussion just might slam a product you allow them to comment on. (He didn't say it but I'll note that consistent comments about a product flaw -- a la the complaints about Comcast -- can be excellent market survey grist.) Transparency = Trust, Ramsey wrote on one presentation slide, and said that a typical marketer who allows ALL content to blossom saw orders go up 40%. "People trust other consumers more than marketers."
Paid Content (whom I'm helping put together put a conference and have contributed to) today launched a Media Index of public companies in the media industry. Much different and with fewer companies than the Dow Jones Media Index often cited in The New York Time. Times' considers "media" in the much more global sense -- everything from TV and Radio to newspaper distribution and even some e-commerce. 9I see the index on the Times' page, but there's no chart on Marketwatch when I click through.) Paid Content's parent, ContentNext, has a much more honed list of digital media companies and those that serve them, such as Adobe (makers of Flash and other nifty software and applications).
Indices are useful as an indicator, but I discovered in biz school that it can actually be difficult as an individual investor to buy according to an industry index, because a fund with an appropriately weighted average of shares in each company may not have been created and made available.
"We have a big interest in seeing a system of rules develop," he said, adding that Viacom is "not a company that would like to see every kind of right locked up tight," instead needing a "robust media culture." Viacom, he said, doesn't go after people who have made a "transformative use" (a phrase from fair use law) of their content, but rather folks who simply, say, put a TV episode or movie up online. He made the point that YouTube and others had moved quickly to keep porn off their servers, so they could, he said, do the same for copyrighted content.
But in implying he really would rather have cooperation than sue, isn't he kind of like a guy pointing a gun who says he'd rather not have to use it?
With capital cheap and money chasing deals, "private equity was consistently beating companies that had synergies" in purchasing media and entertainment companies that were for sale, according to Steven Price of private equity investment firm Centerbridge Partners, Monday's Convergence 2.0 conference from The Deal.
But with the credit crunch well in swing, buyouts are getting harder. "Sellers are unlikely to put their assets on the blocks, even if there are synergies. They want private equity to drive up the price," he continued. If the seller does put together a deal, the financing for private equity that's available is at a pretty unattractive price, he said.
He also said the market was more "bifurcated" than he's seen in the 20 years since he started doing this kind of work. Corporate America thinks things are going fine, but banks are in trouble, and credit is very tight. "It's not clear if the liquidity problems are going to turn into operating problems." Maybe it's just a matter of time.
Here's the NY Times' explanation for getting rid of the TimesSelect wall (with my thoughts, in a sec.), emailed to print subscribers:
"Since we launched TimesSelect, the Web has evolved into an increasingly open environment. Readers find more news in a greater number of places and interact with it in more meaningful ways. This decision enhances the free flow of New York Times reporting and analysis around the world. It will enable everyone, everywhere to read our news and opinion - as well as to share it, link to it and comment on it."
This means, obviously, that ad dollars seem a better revenue stream over time than subscription. TimesSelect was, after all, a commercial, not editorial initiative. Publisher Arthur Sulzberger confirmed to me about a year ago that the opinion pieces had gone behind the wall because they couldn't attract enough quality advertising on their own -- unlike, say, the business or tech sections. (What top marketer wants its ad next to commentary that could alienate a good part of its consumer base?)
It probably also means the Times is buying into the idea of distributed content, that the best way to get exponential growth in audience is to let content out. Subscription growth is very limited. Not so ad growth in digital media. And one of the best ways to get that growth today is through not only inbound links from blogs, but also outbound content posting through widgets and Flash video and so on.. Don't be surprised if we eventually start to see some ad-supported Times widgets and the like, letting its journalism appear, branded, in other venues.
The Times' choice to get rid of subscription for its archives seems to show they believe the economics of the long tail. No individual piece gets tons of traffic, but over time, in aggregate, it's a business, even if ad-supported. "Our projections for growth on that paid subscriber base were low, compared to the growth of online advertising,” Vivian L. Schiller, senior vice president and general manager of NYTimes.com, told the newspaper. Maybe the Times will move to the model others suggested earlier this week at Convergence 2.0 of providing everything anyone would want to know about whatever topic the Times has covered. Of course, no matter how much that is, Google will have more available just a click away.
The move also means folks who've paid a pretty penny for Times archives, such as Factiva and Lexis-Nexis, are increasingly having to move their model to added value for commodified news products. Can they sell their subscribers on the idea that there's more search, more relational databases, more tools and tricks and so on? That's the sell, essentially, of the financial information firm Edgar, its chief told me, because the info is by and large available for free from the SEC.
It also, of course, comes in the context of The Wall Street Journal's impending decision of whether to go completely free online – something new owner to-be Rupert Murdoch is hinting will happen. (It may mean a short-term loss, but over time a bigger gain if, as expected, the ad market continues ballooning.) It's also intriguing that Rupe said he'd use the WSJ on his new Fox business channel primarily for mainstream, not business, news like international and political. While the Journal's unique users, according recent rating service figures, are much lower than the Times, that may not matter because 1. It's achieved those numbers with much of its site walled off and 2. advertisers and others believe the Journal's audience is higher income than the Times', whose forte is regular old news – albeit of some of the highest journalistic quality anywhere -- not the burgeoning and high-revenue niche of business news.
This, obviously, is a picture of Chris Anderson's book, The Long Tail (sitting atop the box for my new business card scanner). What's less obvious is that this book was custom-printed for me, very long-tail fashion, at the public library near me. I stopped by to see the massive machine chugging out custom-printed books for people, and the nice woman running the gizmo -- about the size of five large copy machines, and taller than a short basketball player -- told me Chris had awarded them the right to print 100 copies of his book, because the idea of printing books on demand fits his long-tail concept. (Most of the books were classics that are no longer under copyright.)
I've been thinking about the Long Tail today because of a breakfast I went to hosted by Jack Myers, for whom I do some work, called "Monetizing the Video Long Tail." I came away convinced that it will be possible to make money off of user-generated content and all the other niche-y stuff that's going online in video today. I wrote a more in-depth explanation for Jack in a column that goes up tomorrow on JackMyers.com.
Speaking at the Convergence 2.0 conference put on by The Deal, Hindery, managing partner at InterMedia Partners, talked about the power of enthusiast media, how hunters and fisherman pore over their magazines and all other media, how they defined "engagement" – a "dedicated, committed audience." That kind of audience, he said, is key when looking for media investments. Look for a dedicated audience – Yankee fans, Christians, Hispanics (noting that all Hispanics are not alike), outdoorsmen – some group that will avidly consume what you give them, if you give it to them in their sweet spot.
The other thing you need, he said, to really have a lasting investment over time is barriers to competition, lamenting the way cable TV had screwed up its customer service, for example niggling people over $20 worth of charges when their lifetime value was, perhaps, $2,000. "There was no reason for the satellite industry to get going except for our ineptitude in cable," he said.
Price went on to talk about what his firm would do if they'd bought the Wall Street Journal: "go deep on the Internet" for their passionate, C-level (meaning top executive) audience, giving everything they could want about any of various subjects they're interested in, be it credit markets, insurance, or whatever. He called it an "octopus" strategy. Unfortunately, Price said, newspapers haven't figured out how to "monetize" their good content. Leo Hindery of InterMedia Partners in a keynote Q&A said the New York Times should follow a similar strategy, out-Googling Google by, for example, giving someone searching for news on Alan Greenspan everything they could possibly imagine. Instead, he said, they're putting their newspaper content online, but in a much more fragile ad banner market.
Jeffrey Sine of UBS Securities said that while the Journal is held up as a huge success for subscriptions on the Internet, it "really is not that successful in the larger sense," which I take to mean $70 million (1 million people paying $70 per year) isn't tons of money in this realm. He added on Price's remarks saying the Journal needed to "upsell" folks on their "tiered" interest levels by selling them more on the value chain. Sine said his firm had sold Marketwatch to Dow Jones a few years back (for nearly $500 million, if you remember), which I guess gave him Street cred.
Later, Price said that that Dow Jones and Reuters have been "crushed" by Bloomberg. Another panelist – Dennis Miller of Spark Capital -- pointed out how CNN ended its 27-year relationship with Reuters, probably because Reuters was directly competing by running its material directly, with its own ads. Hindery said the folks at Bloomberg "are not unapprehensive" about the lack of a print partner.
"With all due respect to former management, they had a great run of it, and they were no longer doing the basic things with respect to blocking and tackling perspective," Steiner said, referring – for those of you who may not know American football – to the basics of playing the game.
- NFL.com wants the inbound traffic, and there's tons of stuff for fans there. They don't want the traffic dispersed on a million other blogs and sites that haven't paid for rights.
- Fox and others paid many millions (altogether more than a billion, I believe) for rights, and it wouldn't be right to let just anyone get clips and use them at will. Adamo referred at one point to clearing the sidelines of the 35-40 camera crews who amassed for some games for local news and other broadcasts, because it was getting out of hand..
- They don't want to show too much – especially live – because they don’t want to sway the game.
Interesting point, considering a day later we had the New England Patriots paying a big price for videotaping signals from opponents during a game. Adamo also talked about a former Jets coach who complained mightily about an NFL broadcast that replayed a mic'd coach talking about a play by its code ("XYZ 123" or somesuch) and then showing the play being run for a touchdown. The coach complained, Adamo said, that he now had to change the play because everyone in the NFL now knew what it was.
But is restricting the flow really the best technique in an omnipresent media age? Think of the hassle of policing every possible shot, all the different ways someone can gather and disseminate video and audio. If the Patriots got caught, how many others are doing similar things but being more crafty?
Why not let media be part of the game? If you know your opponents are going to try to steal signals, you might fake them out with fake ones. In baseball, catchers change their hand signals when there's a runner behind the pitcher on second base, and coaches consistently throw in fake instructions to batters with hand signals. Why not let the fans get more involved, let more video flow, generate more excitement, strategy, fantasy football, games and the like? Imagine all the moves that could be made. And with that involvement would come, potentially, more audience and more advertising dollars, more promotional opportunities. I realize I may be out of my league, here, and intend to talk to Adamo and others about this for a column I'm writing for Jack Myers Media Business report. But it's a thought.
"It's not all about the technology. It's about people coming together around common themes, and interests."
Yep, that's pretty much the definition of social networking -- but with technology as a huge enabler, making possible connections that aren't possible without it. Technology filling what Alex called an "innate human need." ('Course, we could also say Google isn't about the technology, but about the need for people to find stuff. But that's a whole 'nother issue.)
The FeedRoom awhile back decided awhile back to go the enterprise route -- looking for corporate clients, rather than just media companies. The rub, FeedRoom execs told me, was that once media companies gained enough expertise and knowledge, they would bring their hosting and video file and asset management in house, and would no longer need FeedRoom. Very hard to grow the business with that kind of churn. (Of course, the same could eventually happen to corporate clients -- they could bring their media in house -- but so far, FeedRoom says it's doing very well for them.)
UPDATE: Google Plants Itself Behind International Privacy Framework
Here's a video interview of Bruce about the book, under the auspice of NY:MIEG's Bill Sobel. I was the interviewer. Video is via TVMainstream.com.
SAI's analysis may be true -- for now. But I remember only too well how much more costly video was before we had all the distributed capabilities of Akamai or Limelight, all the shared hosting of YouTube or Brightcove, all the targeted ad solutions like the ones Google's developing or ScanScout (invested in by Time Warner) or DigitalSmiths promise. So, while today the economics might not make sense in the aggregate: 1. they will continue to get better (following Arthur C. Clarke's "smaller, faster, cheaper" rule), and 2. they might make sense in the specific case if not in aggregate -- for example for tech review sites like CNET's or Ziff Davis', where there are high-revenue ads, a dedicated audience, and lots of server space available with low production costs.
I don't know how to completely solve the problem -- other than to do due diligence in trying to protect stuff, expect that some will be "stolen," and do things to "monetize" from those thieves. If folks care enough about the content to hack and crack and get it for free, rather thn paying your price point, they're interested enough in something you do to pay for it, probably. Do go after any major criminals. But for the chump change, see it as a marketing opportunity. This idea works for both B2B and mass consumer models, as well as any part of the long tail.
Sorry to go a touch off-topic, but I can't resist. Yesterday, Curbed.com managing editor Lockhart Steele was on the Brian Lehrer show, taking with less speed than he often does. He mentioned how sites "like Gawker" helped send his site get the traffic it needed to gain traction – not mentioning that he had been managing editor of Gawker until just before the summer. Toward the end of the interview, Brian responds to Locke's assertion that blogs often traffic in unsubstantiated rumor or gossip: "You did work at Gawker." "That's true, I did come from Gawker," Locke replies.
He did make a good point about blogging that's often missed by "the media" in the same discussion: Each and every individual post may not be accurate, but "If we get something wrong, we have the ability to tell you we got it wrong pretty damn quickly." So, over time, blogs are self-correcting and can be just as if not more accurate (at least if you catch the most recent post on a topic – and there's a big rub) than the
Here's the stock picture. And a story, titled "Apple iPhone: 60 days old, 33% off."
Here's the ad today on BuzzMachine.com. Oh, and while you're there, read Jarvis' essay on the future of the "newspaper" (in quotes because there will be some other term in 2020). He makes his usual convincing case for distributed media coming to us. He also links to this piece from Dave Morgan exploring the same topic. Neither talks about the business model ... let me think on that, and ask publicly.
It also gets down to believing that advertising can be made more of an effective, ROI business than the more traditional "relationship" business it's been in the halls of Hollywood and New York (for publishers as well as broadcasters).
The feedback I got, from someone identifying himself as Mark Durbin of the NY Times:
| I have worked for a print company before and let me tell you, its no fun working for a shrinking business. Most of the people on the job arent working anyway, eveyone is sending out their resumes and thinking about jumping ship. Its depressing.|
And hence the downward spiral goes.