Internet Privacy Legislation Still in Offing

If you think that legislation to protect consumer privacy (PDF) on the Internet is dead now that its author, Rick Boucher, has been defeated in Congress, think again.

A key member of the Interactive Advertising Bureau's privacy committee noted to me at the Ad:Tech conference in New York yesterday that the desire to protect consumers is bipartisan, a sentiment the Washington post notes: "A key Republican lawmaker indicated Wednesday that Internet privacy could be a legislative priority in the next Congress, as a growing number of data breaches draw increased attention from federal regulators." Technology site Nextgov concurred that Republicans plan to deal with privacy.

The legislative language, I was told, can pretty much be copied by another lawmaker, who will put his/her name on it. It's also hard to ignore the FTC's moves to explore privacy issues such as behavioral targeting (sending ads to consumers based on their previous Web surfing) and other uses of cookies and identified databases. A salesman from Casale media today proudly told me at Ad:Tech that his ad network had just closed deals with Nielsen and MRI Research, and that they could now send ads to their database (of 65 million, I believe), targeting ads down to the household level.

At the IAB's Ad Ops conference earlier this week, the IAB’s Vice President of Public Policy, Mike Zaneis, and Chuck Curran, Executive Director of the Network Advertising Initiative, talked of how they industry was working to regulate itself. (Here are their proposed principles for behavioral advertising.) But as I've written before, and any scholar of Corporate Social Responsibility knows, to get ahead of a curve once the legislative process has begun requires an industry to take bold steps that leapfrog the efforts underway to place limits.

Notice how Google CEO Eric Schmidt is very cautious to specify all the services Google can give you if you share information while also being very careful to specify user permission in this recent Charlie Rose interview (at 1:47, and again at 20:21).

More Coverage:

Dorian's Delicious.com Links on Privacy (added to periodically)
Privacy Likely To Remain On Congress' Radar Despite Boucher Defeat (MediaPost)

Online Privacy Bill Dead? (MediaWeek)

Ethics in Journalism

The @TerryHeaton blog essay "New media ethics: TechCrunch, a case study" raises issues of journalistic ethics today, asking (then answering) the frequently asked question of whether someone like TechCrunch founder Michael Arrington can be a journalist in good conscience.

Yes, Heaton says, because he discloses his interests, and it's no secret he's a player, not just a coverer. It's a good read, and worthy of discussion. It's nearly impossible to be ethically pure. Those who cover the news are also human beings. Reporters have opinions, families, interests. They shop, vote, invest, buy homes and cars. Yes, it's easy to avoid the obvious ethical lapses, such as buying a stock of a company you're covering directly, but what about the more subtle ones? If you're covering environmental issues, do you buy recyclable products, bring your own bags to the supermarket, shop "green"? Or do you not care and use packaging as it's provided with pleasured abandon?

I'm serious. Disclosure is not only the best disinfectant, it also helps those reading, watching, participating in the journalism decide for themselves how and whether to weight what they're reading. The Wall Street Journal reporters try extremely hard to not be biased. But they are. In favor of growth, capitalism, SEC-style oversight and regulation. Not to say any of that is wrong. But it's impossible to be truly objective, to give equal weight to all sides and concerns.

Fairness, yes. But objectivity?

During my Fulbright fellowship in Japan, I compared Japanese vs. American coverage of specific news events, during an era when US-Japan frictions and fears were making the front pages, covers and lead stories of newspapers, news magazines and evening news shows. I came away thinking that there is no objectivity. Even a photograph or video is not an objective portrayal. The camera person decides how to frame the shot, how tightly to zoom in, and makes other decisions that can affect the way the images are perceived. (One famous example was supposed riotous anti-US protests in Tehran for which one cameraman zoomed out and showed a nearly empty plaza, rather than the more popular shot of some 300 screaming protestors.)

Redesign as Psychotherapy

I like this post from @Jason_Pontin, editor and publisher of Technology Review on their print, Web and other interface redesign, led by @rogerblack. He's right: a redesign is a chance to think through your whole strategy, and should flow from there. Everything should. (Not that it's easy!)

"It's more interesting to think about our redesign as a form of institutional psychotherapy: it provided us with the opportunity to re-examine how we publish our journalism. The new designs are the formalization of a strategy I announced in a column (and elaborated upon in a blog posting), 'How to Save Media,' in May 2009. Part of that strategy was to expand our number of publishing platforms to include tablets and smart phones. If you've not tried reading Technology Review on one of these electronic devices, do: I am sure you'll like it."

http://www.technologyreview.com/blog/pontin/23489/

GigaOm Confirms NY's Tech Renaissance

There's often talk in NY (@FredWilson is for one) about how NY is growing quickly in tech (@Betaworks a great example). It's nice to see the quintessential left coast media outlet, @GigaOm, weigh in positively as well:

"In order to keeping our content top notch, we keep bringing top-notch people. The latest to join us is Ryan Kim, who, until recently, was a reporter for San Francisco Chronicle. He’s joined us to be our New York correspondent, and has moved to the Big Apple to cover what’s turning out to be an incredible technology renaissance in my spiritual hometown. Needless to say, we have plans for New York."

Okay, We Got More Money: Tech News

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:

Netflix:

- 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?)

Blockbuster

- 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, http://www.reuters.com/article/idUSTRE68L32K20100922

Blockbuster itself was highly disruptive when it started -- studios tried to block use of VCRs in the home.

Some readings:

Blockbuster Reel Nears End On Its Bankruptcy Filing

30% Of Young Netflix Subscribers Are Skipping Cable

Netflix Signs Deal With EPIX To Stream Paramount, MGM, And Lionsgate Movies

Third of Young Netflix Users Cut Cable

Is Hollywood Going Down with the Blockbuster Ship? ( I find this WSJ blog post a bit absurd.)