Models, not Model

I've said that multiple incremental revenue streams are the way to build business for news (and other media), and in today's Poynter Online - NewsPay Bill Mitchell says that one newspaper has learned that "The most promising path to the future of newspaper business models begins with the 's' at the end of the word 'model.'"

The paper he's writing about, the Pittsburgh Post-Gazette, has set up a revenue stream by charging subscription rates for content "not previously found on the paper's website" and has found that it can make a profit by doing so. While the single stream isn't large, it is profitable. Multiple such streams would mean more profit -- and more ability to fund operations. (What streams, you ask: how about, in addition to ads an subscriptions, things like apps, events (something the P-G is doing), services (use those idle printers!), e-commerce, affiliate or distribution partnerships, digital-to-print and so on. Previously, newspapers have been able to sell for higher end versions of sports stats, or inside information on teams.

Curious that the company president says the paper will decide whether to continue the experiment. If it's profitable (and assuming it's not a huge distraction and fits w/ the larger strategy of the company) why not?

How Denton and Hearst Chief Are Alike

The standard wisdom in publishing is to hold onto the existing crowd while gaining new audience. But Gawker mogul (NY Mag this week says he is one) Nick Denton (that's @nicknotned to you) says he doesn't give the blog network's well-publicized bonuses to writers for just any old traffic. He is "encouraging writers to produce stories, entertainment, video, that will bring in new people." Going for new visitors is a curious strategy, but perhaps valid one.

Because if you concentrate on new visitors:
* You'll be going for more traffic spikes (and scoops like the iPhone prototype imbroglio -- which Denton said is 10 or 10,000 times more valuable than any old blog post)
* You can presume a certain number of the new visitors will stick around and become regulars (or retained or "loyal" as we say in industry parlance)
* You're getting some repeats, anyway -- a number of people log on from different computers or browsers or clear their "cookies" and so show up in analytics as new visitors.

It could be the spikes that he gets is just what he wants, and he figures that the spikes are the way to build the big traffic over time -- from the 1 million a month they used to have, he said Monday at the IAB MIXX conference, to the 20 million or so monthly Gawkers nine blogs get today.

In other words, do what works and don't worry about common wisdom. (A point he also made when he talked about Gawker Media not having the luxury of pursuing "important" journalism over what people are interested in.)

That's also, in a nutshell, what much older and more traditional media-experienced Hearst CEO Frank Benack Jr. said in an interview with IAB President and CEO Randall Rothenberg (that's @r2rothenberg to you) about an hour earlier. Asked what he recommended to a young executive he answered they should "be open minded." Do what works. "Don’t fall in love with any particular approach to delivery of content and media." Don't be wedded to any one idea. Someone in their early 30s looking to be a leader needs to be flexible in their thinking, know that the answer that works today may not be the one tomorrow -- and presumably, the one that works on one publication won't be the one that works on another.

I also believe that's just the right attitude. So many in digital media stalwarts come in with an answer, and it's often based on polemics or the desire to sell one particular product or idea or ideology, or at least what I'd call a "thought brand". Be open. Be closed. Be ad supported. Charge for subscription.

Bennack said Hearst would be looking for dual revenue streams (or, I would prefer, multiple -- even if they're incremental), along the lines of the cable TV model, which gets money from the cable operators and from ads.

Denton also said 75 percent of the company's ad buys include sponsored posts, that its nine sites now get about 20 million visitors per month, and his readers now are much more interested in Facebook founder Mark Zuckerberg than in Paris Hilton. The stars they're interested in today tend to be from reality TV, he said, citing the cast of Jersey Shore as a popular subject.

Blockbuster vs. Netflix: A Bullet Point Analysis

I was putting together discussion points for my e-business class this evening on why Blockbuster is filing for bankruptcy, and what has done them in. Blockbuster as a "click and mortar" business vs. Netflix' online business (and some competition from Cable TV and other distribution systems as well.) Thought I'd share those thoughts here:

- Convenience. Efficiency of the Netflix model. DVDs come quick and easy. (no need to go to store. Reaches all geographic regions. Keep as long as want).
- Statistical modeling on back end with efficient distribution systems/operations.
- No need for retail/physical plant
- Easy to understand and use pricing plans with flexibility. Convenience.
- High availability of all kinds of movies (long tail)
- Continual improvement and drive to keep pricing to low as possible with efficiency, algorithms, etc. (holding to theory that Web efficiency drives incremental costs, and therefore pricing, to zero)
- including the recommendation engine and reputation (aka customer reviews)
- Continual improvement of Netflix service
*ondemand to multiple devices (computer, Roku box, Wii, IPad/iTouch, etc.)
* improved recommendation engine
* customer interface online
* Back end statistical modeling

Ultimately, the success of Netflix stems from the fabulous execution as an online business in all aspects (user interface, back end, fulfillment), and systems operations. There is a Harvard Business School case on them from 2007 I have used in the past.

(side discussion: What other implications Netflix ? What other industries could it impact? What business challenges are there for Netflix?)
- Didn't match Netflix online in pricing, plans, availability
- Didn't keep easy to understand pricing and convenience
- Didn't user "bricks" advantage with high value-added services
- Didn't give enough incentive (or penalty) to keep customer base, convert them to online, etc.
- Moved slowly into online space.
- Competition from other sources for entertainment consumption/mindshare (cable TV on-demand, gaming, YouTube, etc.)
- Financials: high debt obligation,
Blockbuster itself was highly disruptive when it started -- studios tried to block use of VCRs in the home.

From DigiDay Mobile: Focus on the Consumer Not the Device

From my friend and colleague Brian Reich, who attended DigiDay Mobile on Teeming Media's behalf:

It seems obvious to me -- a digital communications strategist and heavy user of all-things digital -- that mobile devices are a game-changer in the context of marketing. The simple fact that consumers can now access information wherever and whenever they choose, means that brands, media, and anyone else with something to sell have a whole new set of opportunities to explore. And yet, as I listened to the discussion at last week's DigiDay Mobile conference, I couldn't help but get the feeling that most marketers haven't figured out how to fully leverage what smart phones, tablets and other similar screens make possible.

The organizers of DigiDay Mobile framed their day-long discussion saying: "As more and more people consume content on their mobile phones, media companies and marketers need to quickly determine how to best reach and engage with these audiences." I couldn't agree more. However, as the conversation unfolded, across a series of panel discussions and case study presentations, the focus was clearly on what advertisers and agencies needed and wanted, not what audiences value or have come to expect when seeking information about products and services.

Some observations:

1) There was significant focus on the technology and not the different kinds of experiences that new and emerging mobile devices make possible. Presenters routinely cited apps, ads and the challenges of 'discovery' but spent little time exploring what is required in a mobile-enable society when the goal is to establish a relationship or support a consumers interests beyond a single, basic transaction. In my experience, it is far easier to determine the best ways to use technology to engage consumers if the behaviors of the audience dictate the options as opposed to letting the features or functionality that different platforms and channels make possible drive the decision-making.

2) While there seemed to be agreement that handheld screens, regardless of size, are what is driving the change in consumer behavior, and thus the need to adapt marketing strategy, the focus in terms of where to focus execution was mostly on smaller screens and more basic ways that mobile phones can be used. That makes sense if you are basing your marketing choices on data about mobile usage -- the statistics show that consumers do a lot of text messaging, for example. But, when you consider how tablets are influencing the way consumers think and act (whether they own an iPad or not) this focus is unnecessarily limited. To realize the full potential that mobile devices offer, it will be necessary for marketers to think beyond how to measure an initial transaction and instead strive for deeper, more meaningful interactions that extend across multiple screens.

3) I would suggest brands and agencies focus their attention on creating new and compelling ways to market their products and services and not on hating Apple. Despite evidence to suggest that apps are popular with consumers, many of the presenters dismissed apps as a viable marketing tool in favor of mobile-web based options claiming that consumers were more interested in searching for information than establishing a direct connection with something that interests them. In reality, marketers hate apps because its hard work to create and support an app that a consumer will find valuable, and use every day, but far easier to dismiss the whole concept in favor of something that provides more options (even if they aren't as compelling to consumers). For similar reasons, there was a lot of anger directed at Apple and the iAd platform they have developed. I suspect that the control that Apple has over the market causes frustration because it means marketers no longer have as much control over how their products and services can be presented -- and that makes them uncomfortable.

Marketers and media companies absolutely need to determine how to best reach and engage mobile-enabled audiences... and fast. My suggestion, with the discussion from DigiDay Mobile still very fresh in my mind: focus more on the consumer interest and behavior than on the platform that delivers your message. Most adults in the U.S. now have cellphones and one in four are using smartphones. With their rich features and capabilities, these devices are driving more than just a mobile app economy, mobile web revolution, or marketing explosion. They are changing behavior.

It will always be challenging for consumers to navigate through the mass of marketing messages and options that are being pushed by brands and media companies. New platforms and formats will emerge and different standards and best practices will be uncovered. But what has always been true, and what mobile devices of all sizes and kinds will enable in ways that we haven't been able to imagine until recently, is that people will seek out what they find valuable, and expect to get access to what they want, when they want it, and on terms that they dictate. If brands and agencies focus on that as a starting point for their mobile marketing decision-making, many of the other challenges will seem far easier to address.

Ray Kurzweil: A university for the coming singularity | Video on

Again watching this video from Ray Kurzweil at TED last year, while prepping for my class Monday. All the ways in which we're ramping up, growing exponentially -- capacity, productivity, power per price, per space. As startling as the shrinkage in cost and condensation of power to a room to palm of a hand is, will be just as startling over next 20-40 years.

Ray Kurzweil: A university for the coming singularity | Video on

Journos Hack the Seating Plan

Pro PR Tips: "Tip #151: No�clumping
At a working dinner (like an awards banquet or evening panel discussion), don’t seat all the journalists together. You’ll get more coverage if you actually put us in proximity to the people we get paid to talk to.

That said, the good journalists will ignore or hack the seating plans anyway. So, never mind."

Twitter as a Media Company

."Twitter is a media company: It gives you cool stuff to look at, you pay attention to what it shows you, and it rents out some of your attention to advertisers." from Twitter COO Dick Costolo On Ad Sales and the New | Peter Kafka | MediaMemo | AllThingsD

True enough. But don't forget the way Twitter is defining "media" at least openly in their news conference today, included YouTube and Flickr. In other words, platforms that put forth media others have created.

For more on Twitter's new .com overhaul see previous post: Can Twitter Seize the Desktop?

Rafat Ali On News

"As for the larger news industry, I think the economic challenge is too high for both startups or even established companies. ... I think the macro-economic conditions in the news sector, all of which are obvious to us, are too difficult, in general."

Can Twitter Seize the Desktop?

Twitter is, I agree making a play for the desktop, but I'm not sure that Mashable’s Jennifer Van Grove is right when she contends the new interface “effectively makes Twitter desktop clients irrelevant in the long run.”

By making richer, for example adding the ability to view media like photos and video right on rather than going to the place the media live, Twitter wants to see more traffic to, see more people use it on the Web through a browser. The move has been characterized as a way to compete with Facebook. It would also, as Grove asserts, mean people use the browser instead of clients like Seismic or Hootsuite or Tweetdeck.
But is being more like Facebook the way to take it too Facebook? And will users give up their use of Seismic or Tweetdeck or Hootsuite?

Part of the brilliance of Twitter's launch and spread has been its open API, that it isn't a Web service that requires someone to even open a browser, but allows so many other applications and interfaces to attach to it. Each of the three interface applications above -- and a bevy of others -- provide special functionality and ways of using the service. Twitter has effectively crowdsourced product development, what businesspeople might call brand or line extensions of Twitter, coming up with new offshoots that enhance and update the product, and even (unlike a line extension, usually) make the original more valuable.

Many have already learned these clients, and come to rely on their functions. A Twitter exec, in making the announcement, noted that there is still not a way to manage multiple accounts with different logons from their interface, which is a significant business use of Twitter. My company often manages multiple accounts, and people working with us are in multiple locations. We sometimes want to cross-post, sometimes keep things separate. Services like Hootsuite and Co-Tweet also allow different kinds of permissioning, so someone can be allowed to Tweet from an account without having administrative access, can be centrally tracked, and also be de-permissioned.

OK, "the long run" pretty much gives an out. You can always say "we're not there yet." (I've done that myself, truth be told.) Maybe Twitter will incorporate the juiciest functionalities in its Web interface, or even buy some of the popular clients, and weave it all together. Maybe they'll somehow limit functionality of the API or take more control of it. Was it Biz Stone (I was listening, not watching) at the news conf yesterday who said that Twitter was also updating its back end functionality.

I don't doubt the validity of what Twitter is doing from their own business perspective. More people will use Twitter on, giving Twitter more access to their users, more ability to control the experience, and more ways to -- as others have noted -- serve them advertising. Twitter sees ads as being within the content stream, not separate from it, which is also smart from a business perspective. If I were a publisher or a marketer, I would pay attention, and make sure my material were showing up correctly on But I would also continue to keep my eye on the popular Twitter clients.

The "Serendipity Value" of Networks: Beyond Metcalfe's Law

Reviewing the syllabus and prepping my eBusiness course for MBA students at Baruch's Zicklin school of business, I again read the piece by Joe Weinman on GigaOm asking "What If Metcalfe’s Law Is Wrong?".

It, and a companion PDF linked from the piece, posit ways in which the network effect posited by Metcalfe -- that the value of a network goes up by the number of connections squared, or n(2), and the number of possible connections in one-to-one network is n(n-1)/2.

Weinman writes that while the theory of ever-expanding value may be theoretically true, there are real-world limits to humans' ability to capitalize on the network. We cannot all connect to all the hundreds of millions of people on Facebook, or the billions who have phones. Even with an average of 130 "friends" on Facebook, we tend to relate to only a few of them. We cannot possibly consume all the content offered; there's not enough time, not to mention interest or stimulation.

Yes, the true value of Metcalfe's law may be less than is sometimes supposed, and there are real-world limits. But something that seems to be ignored in the article is the value of what I might call "the serendipity factor".

Weinman assumes the value of connections is derived from the ability to communicate bi-directionally, or even consume information from that connection in one direction. But that abilty also begets new sources of information, and new connections to which one might not have been, likely would not have been, previously exposed. Just some examples:

- The Retweet on Twitter lets a user not only see something that someone else forwarded with minimal effort, but also something from a new source he might never have connected with or become aware of. That person can then connect with that new source. New value in two ways.

- Facebook walls allow similar kinds of serendipity. A friend of mine run content through her wall I never would have seen, or have a conversation with someone I never would have connected with.

- LinkedIn connections: You can reach into companies and organizations and to individuals through connections in a way that was not possible before -- you may not have even known that your "friend" was connected to this other person you were trying to reach, and via that connection you not only gain entree, but also authority. You skip boundaries.

- Mass sharing. There is surely value in the ability to let everyone on my network know at once that I have new photos to share, have an achievement, an article, etc. True, I may be actively connecting with only a few of them. But allowing more than those immediate connections to keep track of me, know something of me, gives both them and I more social currency should we choose to interact, need a favor, etc.

- Technological ease. Again, the network effect gives me the ability, combined with technology, to share content, information, sourcing, thoughts, etc, at a much broader rate and level than I could have otherwise. I benefit by gaining power from the power of network, a multiplier effect. I not only drop my content and ideas onto the network, but may gain new followers, have that content and ideas forwarded further, gain new inbound ideas and connections and inquiries, and further hone my thoughts and ideas.

More on Content Vs. Control

"Apple loves to maintain tight control of things. That’s been a hugely successful approach for its hardware business. It’s even a defensible position applied to software. But it’s a lousy model for a newsstand."

Social Media, Segments and Search

  • "Stories that appeal to the tech community go bananas on Twitter--and barely register on Facebook
  • Stories that appeal to the mass market do much better on Facebook than they do on Twitter.
  • Stories aimed at our Wall Street and finance readers have enormous readership--but much lower Twitter referrals than our tech stories do." Here's Twitter's Big Problem: It's Not Going Mainstream: by Henry Blodget

Well, yeah. Right. And that's part of the drill -- knowing your market segment, and figuring out how to reach them, specifically. You can't just get the right traffic by using Facebook, or Twitter or anything else. You have to use the right means to reach the right people. Sounds pretty obvious, but it's so often forgotten.

Thinking about it a bit, Google (and other search) is one place you can reach across the demographic, psychographic and other barriers. Everyone searches. And if they find what they like they click through, regardless of their social network or who's doing the referring. So, yes, social has taken a chunk out of search, but search can have validity and impact for referrals in different ways than social media.

The 2010 Web2 Summit Theme: Points of Control - John Battelle's Searchblog

"While the Web was once considered to be an open distribution platform, access to content is increasingly becoming a key point of control." - John Battelle