Drowning upstream

Here’s what I think is a pretty solid business tip: I wouldn’t back or bet on a company and industry that’s described this way in today’s New York Times (my emphasis):

Like newspaper owners, media moguls are looking for new ways to protect their investment from the ravages of the Internet. And, as with the newspaper industry, the answer remains elusive.

I’d rather invest in a company that will take advantage of the new opportunities of the internet, not seeing ravages in the future but instead growth and profit. I’ve said often that protection is no strategy for the future. An industry whose strategy for the future is built on trying to keep us from doing what we want to do and resist the flow of the internet is an industry that is merely biding time. That should be the lesson they learn from newspapers and music.

Yes, I think that the tactic described in that story, put forward by Time Warner’s Jeffrey Bewkes, of enabling us to watch shows we’ve already paid for online makes sense. Indeed, I refuse to use HBO on demand on cable today because they want to charge me extra to watch what I’ve already paid for. So I’ll rush to the chance to watch my shows without having to go through the bother of recording them or paying for them twice.

But the real future is an on-demand future, an unbundled future. Once freed from the forced march of cable bundles, I will buy only the content I want to buy online, no longer being bribed into supporting the 90 percent of cable channels I never watch so I can get the 10 percent I want.

For that matter, what’s a channel? I was an an event last week with entertainment moguls of various camps and one asked another whether the channel would die. The second exec didn’t think so. At first, I agreed, as I pictured myself on the couch watching one of the channels I do care about.

But then I pictured my kids on the couch. They’re not doing what I do. They never just watch channels (tennis matches excluded). They live on-demand. They watch programming only through the web, Hulu, the DVR, on-demand channels. Some look at that future, our kids’ future, and see “the ravages of the internet.” They’re not long for this world; they’re only trying to delay the inevitable. They’re trying to swim upstream against the internet. But they’re only going to drown there.

State coverage as a worthy charity

There’s nothing unsexier in journalism than covering state government. “Trenton bureau” just doesn’t have the same ring as “Paris bureau,” does it? Do you know the names of your statehouse reps? I’ll confess I don’t.

And so my biggest fear in the death of metro papers is the vacuum that will be left in coverage of state capitals. I don’t buy the dire predictions that journalism itself or investigative journalism will die with those papers. Washington will still be covered; one could say it’s over-covered (if often poorly covered) today. City government will be covered because it affects people’s lives directly and because there’ll always be somebody to catch the mayor red-handed.

But statehouses? Unless your governor is a former movie star or pro wrestler or client of prostitutes, they don’t get much – enough – attention. And even when it does get covered, there’s no obvious and endemic advertising support. Capital coverage was the gift of broccoli from news organizations and no one’s likely to bring that dish to the new news potluck.

That’s why I think that in the new ecosystem of news, state capital coverage may need to be publicly and charitably supported. Unsexy though it may be, it does affect our lives and purses. And witness the inanity in Albany lately, state government is populated too often with crooked fools who must be watched.

I’ve had a few email exchanges on the topic with John Thornton, a venture capitalist in Texas who’s worrying about state coverage. “It’s where the economics are the most up-side down,” he said:

Think about this: the total 08 Fed budget was $3.1 trillion. Subtract, national defense and entitlements, and it shrinks to $1.3 trillion. That’s the “discretionary spend” which is the dominion of Congress. Sure, there is always room for better coverage of Congress, but I’d submit that it’s pretty well covered as is.

On the other hand, the cumulative state budgets are $1.6 trillion, or 30% *more* than the discretionary spend of Congress. These taxpayer dollars are, of course, spread out into 50 byzantine and corrupt state capitols, the coverage of which has fallen dramatically and continues to do so.

So how will such coverage be funded? Thornton is counting on philanthropy. He said:

It’s certainly apropos to look at the public radio and tv numbers. Austin’s npr station, kut has 200k listeners and 17k contributors—the best conversion rate I know of. They raise $3m from individuals and $3m from contributors. . . .

Dance companies in Texas raise $20mm a year. . . . If journalism philanthropy, 10 years from now, were the size of dance, we’d put 150 reporters on statewide issues and could literally change the way state government operates. Think about that: an extra 20 at the capital; a couple each for all the agencies and the school board; 20 on the border. You almost can’t spend that much money responsibly. I don’t need opera. I don’t need visual arts. Don’t need symphony. Just give me dance, and I’ll change state government.

What this needs is people with the passion of a Thornton to sell the cause and raise the money. But as with NPR and Wikipedia and Spot.US, not everyone who benefits has to give to make the nut.

This is one of the areas we are investigating at the New Business Models for News Project. The question we are asking is how much potential charitable giving we can project for news in a market and what that will support.

We will also look at how the rest of the ecosystem can support this coverage. For example, wouldn’t it be wonderful if your town and city blogs and sites had at the ready charts to tell you who your state reps were and what they’ve been doing: their votes and expense accounts, too? Support will come not only with money – it has to start there – but also with the attention papers used to be able to give such coverage.

: LATER: In the comments, Bob Wyman argues that state capital coverage is actually a good entrepreneurial opportunity.

: Progress Illinois adds

Another disconcerting metric: The wide ratio of lobbyists to reporters. Here in Illinois, we have more than 3,000 registered state lobbyists. The number of working journalists in Springfield, by contrast, falls in the dozens. Indeed, a recent report found only 355 full-time state capitol reporters nationwide.

Oh, to be the Economist

When newspaper people in the U.S. aren’t wishing they were the Wall Street Journal – “well, they can charge” – they aspire to be The Economist.

Dream on.

I just got email announcing The Economist Group’s latest financials.

* Operating profit up 26% to £56m
* Revenue up 17% to £313m
* Full year dividend of 97.3p per share, an increase of 8%
* The Economist’s worldwide circulation grew 6.4% to 1,390,780 (July-December 2008 ABC). It was named Magazine of the Year by Advertising Age and topped Adweek’s Hot List for the second year running
* Economist.com’s performance has been strong, driven by a strategy to make it a place for intelligent debate; advertising revenue is up 29% and page views 53%

The good news is that quality still sells.

The Economist is to the rest of the news industry as Apple is to Google. In What Would Google Do?, I argue that Apple is the unGoogle. It violates practically every one of the 40 rules I set out. But it succeeds. Why? It’s that good, uniquely good. There’s room for one such company, probably, in any industry – and that spot isn’t always filled (name me the Apple or The Economist of phone companies, airlines, cable companies, or retail).

In news, the Economist is the exception that proves the rules. It doesn’t have the individual voices and brands that succeed elsewhere on the internet; it has a single, institutional voice (but a charming one). In a sense, it’s a general-interest publication in the age of specialization (and every other general-interest product, from Time to the metro daily is failing). It has built a strong online product but it’s still not known for that; it’s a magazine (pardon me, newspaper) that still relies on and succeeds in print.

The problem for the rest of the industry is that they can’t all break the rules as The Economist does because they’re just not that good. You have to be great to the The Economist or Apple and if you fall short, you fall all the way. And staying great is constant work.

I was at The Economist’s offices in New York last week for lunch with editors. Don’t think that they are resting on their laurels. They, too, are trying to understand The Economist’s role on the new media age (my advice: they have just about the smartest crowd anywhere and I hope the company asks how that crowd can be empowered to connect, share, and create). But it’s a nice perch from which to be wondering what to do next. While other publications are looking for a limb to grab onto as they fall, The Economist is looking for the next higher branch.

Defending public as a journalistic doctrine

In a few countries around the world, we’ve seen a backlash against Google’s Streetview as somehow an invasion of privacy, even though what Google captures is the very definition of public: what can be seen in the open.

I wish that journalists would defend Google and its definition of public, for it matters to journalism.

See Peter Cashmore’s report on Streetview’s capturing of a crack in a building that collapsed today in Ft. Greene, Brooklyn. Google captured what it thought was merely data but data turns out to be news.

When I was in Amsterdam for the Next09 conference, the Streetview controversy was in full bloom because Google’s oggling cars had just toured its streets (and canals?). Now I’d been told by German friends that Holland is different from the more closed societies in Europe, as folks leave their front windows and doors open, ashamed of and hiding nothing. Nonetheless the Dutch were hinky about Streetview, even journalists I met.

I argued with those Dutch journalists that if a city official were caught red-handed in the red-light district by a journalist’s camera – or a witness’ – there’s no difference if Google’s camera captures it. It’s public. It’s news. But if that politician is given the ability to quash Google’s photo, then it’s a short step to setting a precedent so a journalist’s photo could be quashed, on the basis that the private can occur in public.

No, public is public. We need that to be the case, for journalism and for society. We must protect the idea of public.

What is happening in Iran this week is public, no matter how much the despots try to make it private. See, too, this Guardian report in which a witness captured images of police allegedly roughing up and arresting citizens for demanding officers’ badge numbers and photographing them – for enforcing the doctrine of publicness with public officials.

Indeed, I’d say this doctrine should stretch to saying that everything a public official does is public – everything except matters of security. Thus Britain’s MPs would not be allowed to black out their spending of taxpayers’ money. Thus the default in American government would be transparency, making any official’s actions and information open and searchable. Thus anyone in Ft. Greene could scour Streetview to look for unsafe buildings.

What happens in public is the public’s – it’s ours.

Adding value in the new news ecosystem

How can and should news organizations and others add value to the new news ecosystem that is being used in the Iran story?

Or to put the question another way: The New York Times keeps talking about how expensive its Baghdad bureau is and what a fix we’d be in without it. Well, the essential truth in Iran is that no one has a Tehran bureau (or if they do, it has been rendered useless by government diktat). So we have no choice but to replace that bureau with the people, with witnesses empowered to share what they see.

The New York Times, the Guardian, and Andrew Sullivan, to name three, have been doing impressive work with their live blogs, sifting through Twitter, Facebook, YouTube, blogs, trying to add as much context and as many caveats as they can. The live blog is print’s equivalent of live TV; it is the way to cover a story such as this: process journalism over product journalism.

But clearly, in that coverage of and by the people, we are experiencing severe filter failure, to use Clay Shirky’s term. Look at the hundreds of tweets that emerge every minute and at the overuse of the word “confirmed” on them, which is meaningless if you don’t know who’s doing the confirming. There’s no way to tell who’s who, who’s there, who’s telling the truth, who’s not.

Note the repeated word: Who. The greatest value a news organization can add to this new news ecosystem is to identify, curate, vet, and train people. Ideally, that needs to happen before the big story breaks. But it can even be done outside the country, as I saw CNN do this morning, talking with a Columbia University student from Iran, who knew who was real and was there from her network of family and friends. Of course, even if you know the people you’re listening to, it’s impossible to know whether everything they say is true unless you can verify it yourself. But that’s the point: You can’t.

So you need to have the best head start you can have. The larger the network of people a news organization can organize, the better shape it will be in when news breaks, the better it can filter the reports that come – whether from people in that network or in the larger network of people those people know. The more people in the network, the more who can go to the scene of news or research closer to it – the more you can ask for help.

Global Voices is an example of this infrastructure: someone who knows someone who knows someone, each able to judge what the next in the chain is saying.

I’ve also been arguing that for journalists, saying what you don’t know is becoming as important as saying what you know. That is all the more critical as misinformation and rumor can spread at the speed of information online. So I imagine a news organization creating a kind of anti-wiki – a dynamic, collaborative Snopes: a list of what we don’t know so we can see what is unconfirmed and so these things can be confirmed – so journalists can add journalism.

On Twitter right now, for example, I’m seeing a great deal about people being taken to embassies instead of hospitals. It is possible for journalists to call their diplomatic sources and confirm at least that, check that off. We need structure around that process.

See also the post below about YouTube holding unique information about the provenance of video. YouTube should not reveal identifiable information about those sources. But news organizations should be able to contact YouTube to help sift through them and find out least which videos came from Iran.

News organizations could also equip their networks of witnesses. Alive in Baghdad distributed cameras to people there. Today, that can be done so much less expensively – think Flip cameras. Bild in Germany sold 21,000 of equivalent devices in five weeks. Michael Rosenblum is planning to distribute 100 Flips in Gaza.

How else can and should news organizations add value and structure to this very disorganized and live new world of news?

The responsibility of knowledge in news

I tweeted a few minutes that I wish YouTube itself would be curating and featuring video from Iran because only it is in the position to know whether the video came from Iran and whether it is a duplicate. I said that YouTube has a responsibility in the news ecosystem. Andy Scheurer questioned that: responsibility? Good question. Isn’t YouTube just a host? Can’t it be agnostic as to interests? No, I don’t think so, because YouTube has unique knowledge it can add to inform the discussion (e.g., this video isn’t from Iran or it’s a year old or this video is unique from Iran today) and to not add that knowledge becomes irresponsible, no? YouTube can’t just make the information transparent so we can figure it out because it also has a moral responsibility to protect the identity of those who are putting themselves in danger by uploading the videos to inform the world. That means they are the only ones who can verify at least some information about the videos for our benefit. So shouldn’t they?

New Business Models for News Project

The New Business Models for News Project is now well underway at the City University of New York Graduate School of Journalism. Here’s the blog and below is the post explaining our work:

We at the City University of New York Graduate School of Journalism believe that the discussion about the future of journalism — as newspapers and other news organizations find their business rapidly eroding around them — needs to be informed by facts, figures, and business specifics. That is why we created the New Business Models for News Project.

The project is researching best practices in the business of journalism online, gathering new ideas and experiments in revenue for news. We will build complete business models to share with the industry and with the journalists, communities, entrepreneurs, technologists, and investors who will create the future of news.

The project is funded by the Knight and McCormick Foundations. Two earlier conferences leading up to the work of the project were funded by the MacArthur Foundation. The work of the project’s first phase will be presented at the Aspen Institute in August and will be shared, publicly and in progress, on this site.

Our work begins with the assumption that there will be a market demand for quality journalism, watchdogging those in power, and that the market will find a way to meet that demand. The question so many are asking is how. We will attempt to answer that by projecting the future of news in a metropolitan area, concentrating on four perspectives — hyperlocal, the new news organization, publicly supported journalism, and the framework to support this new news economy as a whole.

We will use as our model market a hypothetical top 25 metro area in the U.S. where the sole daily newspaper has ceased publication. In short: We are asking what will fill the void. We posit that no single company or product will do that. Instead, an ecosystem made up of many players operating under many models and motives will emerge. In all cases, we are agnostic as to who owns and operates these entities: legacy or new companies, large or small. In that context, we will examine:

* The optimal hyperlocal (town or neighborhood) blog or site. We will look at how to maximize revenue to such sites, whether they are run by sole proprietors, larger startups, or established media companies. This will include helping sites provide the best and most valuable service to local advertisers; establishing local networks of fellow hyperlocal sites to increase sales and revenue opportunities; larger metro-wide networks; and exploring other revenue opportunities, such as paid models and commerce. We will look at what these sites need to succeed, such as networks, promotion by aggregators, and technology.

* The new news organization. Even after a market loses its daily paper, we believe there is an opportunity for a new news organization to be reconstituted around key journalistic roles serving the metro-area. We will project the scale of such an enterprise: its audience and revenue yielding its resources and functions: reporting, aggregation/curation, perhaps organizing the broader community and its news efforts. How many employees can a profitable, journalism-centered business support and what can and should they do? What is its relationship with other players in the ecosystem?

* Publicly supported journalism. We do not believe that any single savior– foundation, government, device, or massive public contribution — will rescue an existing news organization as it operates today from the crush of the market. But we do believe that publicly supported journalism — that is, from individuals, foundations, and perhaps companies — can play a role in this model city’s news ecosystem. This could take the form of a local Pro Publica or of crowdsourced funding through a platform such as Spot.US or of an expansion of public broadcasting’s role. The key question we will answer is what level of support will likely be available — projecting from current efforts locally — and what those resources could provide.

* The ecosystem’s framework. We will examine the supporting infrastructure this ecosystem will likely need, bringing together independent players to reach critical mass so they can recognize greater market value (in, for example, advertising networks and in mutual promotion) and greater efficiency (in, for example, technology platforms, the ability to create collaborative projects, training in journalism and sales, search-engine optimization…). Once again, we are agnostic to ownership: These functions could come from a single company (which is how we will present the model); they also could be provided by a legacy player or they could be offered by various players. To quote Mark Potts at one of our CUNY conferences, “You may want to be small, but to succeed at being small, you probably have to be part of something big.”

In addition, the project will gather and also propose a catalog of revenue models, working with those who are building systems to support paid content; interviewing local advertisers to learn more about their needs; talking with sites in the U.S. and elsewhere to learn what is working and not working for them; examining the possibilities for more unusual revenue streams such as e-commerce.

After this work is well underway and after the Aspen report in August, we plan to extend the project’s work to examine more business models, such as national and international content exchanges; interest-based sites and networks;

The project is headed at CUNY by Prof. Jeff Jarvis, head of the interactive program. Peter Hauck is project director, working with Jennifer McFadden, business analyst; business researchers Kate Albert, Gary Frangipane, Noah Xifr, Darshan Dedhia, Frank DiBartolo, and Senem Coskun of Baruch’s Lawrence N. Field Center for Entrepreneurship at the Zicklin School of Business; and reporters Matthew Sollars and Damian Ghigliotty, both graduates of the CUNY Graduate School of Journalism. We are grateful to the Field Center’s Edward Rogoff and Monica Dean for their support. We are also happy to tell you that Jeff Mignon and Nancy Wang of Mignon Media are also working with us.