This Week in Review: Google’s content farm crackdown, Facebook’s new comments, more TBD lessons

Every Friday, Mark Coddington sums up the week’s top stories about the future of news.

Google’s surgical strike against content farms: Two weeks after launching its site-blocking Chrome extension, Google made the central move in its fight against content farms by changing its algorithm to de-emphasize them in search results. The New York Times put the change in context, explaining the content farm phenomenon and its connection to Google. Search Engine Land’s Danny Sullivan explained that Google is saying the changes only affect “scrapers” (sites that pull content from other sources), but that they’re actually aimed at content farms, too. And GigaOM’s Mathew Ingram talked about why Google may be reluctant to publicly target content farms — because they run a lot of Google advertising.

A few early returns were good: TechCrunch approved of the change, and The Atlantic’s Alexis Madrigal ran a test search comparing the old and new algorithms, finding that the information from the new one was “much, much better.” Demand Media, the most prominent of the content farms, said it wasn’t affected overall by the new formula, though, as Henry Blodget of Business Insider noted, it’s probably trying to wean itself off of Google reliance anyway.

In fact, it appears Demand Media is telling the truth: Aaron Hall of SEO Book used Sistrix’s data to point out that many of Demand Media’s competitors were among the sites hardest hit by the change, while one of Demand’s largest brands, eHow, actually got a boost. Hall implies that politics have played a role, and while there’s nothing concrete suggesting that, the way the changes spared eHow does seem…odd.

There’s also bound to be plenty of collateral damage from the algorithmic shift, and Wired looked at one Mac blog that’s been nailed by the new formula (its Googlejuice was restored after Wired talked to Google about it). Danny Sullivan reported that Google hasn’t made any significant changes to its new algorithm since rolling it out last week, though there are outlets to contact Google if you feel your site has been unfairly hurt.

Elsewhere in the conversation about search, Columbia Journalism Review’s Karen Stabiner gave an overview of the debate about search engine optimization: The anti-SEO crowd, led by the Washington Post’s Gene Weingarten, worries that the SEO mindset will privilege the powerful and eventually kill off creativity in favor of numbingly literal language. The SEO evangelists, on the other hand, say it’s just encouraging honesty and straightforwardness, something it’s difficult to object to.

Facebook extends comments’ reach: Facebook continued its integration with media content across the web this week with the launch of an updated comments system. Essentially, users can simultaneously post their comments on both a site and on Facebook, with subsequent comments under that thread posted to the site straight from Facebook. PBS MediaShift’s Mark Glaser talked to Facebook’s Justin Osofsky about the ins and outs of the new system, and ReadWriteWeb noted that it has fewer features than the commenting update Facebook previewed last fall.

TechCrunch’s Erick Schonfeld identified the two aspects of the updated system that will be most attractive to publishers. First, it requires commenters to use their real names, thus theoretically cutting down on trolls and spammers (this part, of course, has been available to publishers through Facebook commenting for a while). Second — and this is the new one — it extends the reach of a post, spreading into more Facebook news feeds and making it easier for more people to join in the conversation. This particularly excited Lehigh j-prof Jeremy Littau, who said it could create “a virtuous circle between community and content sharing.”

There are downsides as well, and while media analyst Alan Mutter was optimistic about the social potential of the new system, he also pointed out that it will give Facebook even more information about its users, which it won’t be sharing with publishers. As GigaOM’s Mathew Ingram noted, it’s the same tradeoff publishers have been dealing with regarding Facebook for several years now: Does the value of tapping into Facebook’s social potential outweigh the price of handing over commenting to a notoriously controlling company?

TBD’s lessons — more startup, less ad reliance: TBD in its original form may have died last week, but the six-month-old Washington local news site continued to stimulate conversation this week. Its station posted an ad for a new manager to head the site, and TBD’s former manager, Jim Brady, talked with Columbia Journalism Review about the site’s model, framing the conflict there as not TV vs. web, but startup vs. legacy: “I think if we could do TBD with a pure startup mentality, and if we could fund it more with a V.C. or an angel kind of way, and if we didn’t have the legacy side to work with, then I think it would actually have a better chance to succeed.”

Others posited similar reasons for TBD’s demise: Web journalist Jane Stevens talked about a few causes centered on a lack of corporate commitment, and in The Guardian Emily Bell pinpointed TBD’s inability to have its own ad sales team (an explanation with which Brady concurred).

The debate over hyperlocal journalism, stirred by Alan Mutter last week, continued to simmer, with Robert Washburn of The Canadian Journalism Project defending it and Paul Gillin of Newspaper Death Watch saying we need to look at non-advertising-based business models for it, a point media consultant Dan Conover also made in more in-depth form at Xark. Ohio j-prof Bill Reader, meanwhile, said TBD failed because it didn’t define its community well enough, but TBDer Steve Buttry objected to that argument.

Amid all the analyses of what went wrong at TBD, Mandy Jenkins, the social media producer there, took stock of what went right, noting four things other news orgs can take away from its tenure: organizational openness, self-promotion, opening info beyond the newsroom, and hiring for mindset over pedigree.

iPad, part deux: Apple made a few headlines by launching iPad 2, which is apparently kind of like the iPad, only it’s the second edition. I’ll entrust you to the care of Techmeme for all the details about the product itself and focus instead on what it means for publishers and the larger world of media. The Lab’s Joshua Benton pointed out two implications in particular — the mounting evidence of an e-book explosion and the iPad’s increasing usefulness for reporting.

Damon Kiesow of Poynter examined the latter point in some detail, looking at the iPad 2’s specs from a content creation perspective. And Cory Bergman of Lost Remote looked at the device’s increased video capability and predicted that it would help fuel a surge in multi-platform video consumption and production.

Elsewhere in mobile media, tech blogger John Gruber defended Apple’s app subscription program by breaking down the arguments against it one by one. The Lab’s Joshua Benton said that while Apple obviously isn’t a charity and the financial difficulties of publishers aren’t its problem, the arrangement still isn’t ideal. Both posts are among the sharpest takes on the issue I’ve read, so they’re worth taking time to read through.

Reading roundup: What to read this weekend while firming up South by Southwest plans:

— In non-commenting Facebook news, Mashable’s Vadim Lavrusik put together a great overview of the varied role of Facebook in journalism. And in non-Facebook commenting news, Los Angeles Times media reporter James Rainey made the case for requiring commenters to use their real names, while Mediaite’s Alex Alvarez defended anonymous commenting.

— Here at the Lab, Lois Beckett wrote two fascinating posts based on a talk by The New York Times’ Gerry Marzorati — one on the future of long-form journalism, and the other on the Times’ planned paywall. Two other thought-provoking pieces published here this week: One by Joshua Benton on language and viral content, and another by three data journalists on news organizations creating value out of the trust placed in them.

— Amy Gahran wrote three awesome primers on mobile media — one on mobile apps, another on the current mobile landscape,  and one on mobile media and PR.

— Knight fellow Jeremy Adam Smith shared results from a survey on how meaningful journalism is being funded. It’s a gold mine of statistics and information about the state of the journalism ecosystem.

— It’s a pretty well-worn discussion, but Frederic Filloux’s analysis of why incremental change isn’t enough to rescue the newspaper industry is as succinct a summary of the current situation as I’ve seen. Even if you’ve heard it all, his piece is a good refresher.

Baseless speculation! Frank Rich and the price of paywalls for writers

Jack Shafer summed up Frank Rich’s upcoming move from The New York Times to New York magazine like so: “Unless the deal came with Bloombergian bags of cash, it makes no sense.”

True. The star columnist, after all — who has ascribed the move, vaguely, to self-reinvention — is moving from a national newspaper (print circulation: 1.35 million; monthly uniques: 34.5 million) to a city magazine (405,000 in circulation, 8.5 million in monthly uniques). Money — or, barring that, Rich wanting to spend more time with his family, or, barring that, wanting to spend more time with co-bromancer Adam Moss — may well have factored into a move that, on the surface, seems to be quite a slope away from “lateral.”

There’s also been some speculation, however, that the move had to do with the Times’ soon-to-rise paywall. (Writer Ben Schwartz: “I think Frank Rich is just escaping the coming paywall/wasteland at NYT, like an East German jumping the Berlin Wall.”) And whether or not that’s true in Rich’s case — it’s worth remembering that, as barriers go, the TimesWall will likely be less “mighty fortress” and more “puny pile of pebbles” — the idea in general is worth a moment of consideration. Paywalls, after all, represent a potential cost not just to the consumers of news, but to the producers of it.

For writers, both professional and non-, both compensated and not, exposure is generally a paramount goal — not for themselves, necessarily, but for their work and their words. That’s why they’re “writers” and not “diarists.” And when it comes to exposure, nothing beats the wide-open web. A borderless, boundless ecosystem in which something you’ve created has the potential to be consumed by people around the world via an almost unfathomably rich network of social connections is both a) awesome and b) terrifying. For publishers, though, despite their obvious interest in maximizing their content’s exposure, a) tends to be subsumed by b), for all the familiar reasons. While outlets have tried to transform the web’s scale into revenues — sharing news content, maximizing eyeballs and click-throughs, etc. — it’s become increasingly clear that, given our current digital infrastructure, a business based on exposure alone will be ineffective for all but the most heavily trafficked of news sites.

So publishers are turning away from models that emphasize economies of abundance, and toward ones that impose economies of scarcity: apps. Paywalls. Subscriptions. Et cetera. By strategically isolating their content from the pulsing, prodding world of the open web, outlets are attempting to reclaim analog artifacts of containment for a digital world whose every impulse is expansion.

Whether that will work as a business model remains to be seen. But it leads, it’s worth noting, to a basic problem: Increasingly, the motivations of writers and the motivations of the businesses they work for are at odds with each other. Journalists, enabled by the web, are increasingly defining success according to exposure, and news organizations are increasingly defining success according to the limitation of exposure. That’s a huge generalization, sure, but one that will become increasingly valid, I think, in an ecosystem that imposes a tension between walled gardens and open fields. One of the reasons TimesSelect ended the way it did, after all, was that its writers didn’t want to limit their audience to the customers who had paid for their work. The large pores in the Times’ newest paywall will try to avoid that problem, leveraging loyalty while preserving writers’ reach — and it’s a compromise that could well prove effective.

But a wall is a wall, pores or no pores. And a wall will, almost inevitably, cut traffic to a site and its stories. “We understand that the aggregate large number [of viewers] will come down,” Gerry Marzorati, the Times’ Assistant Managing Editor for New Products and Strategies, put it this week. “That’s just the price you pay for asking people to pay the price.”

The question is whether writers will be paying a price, as well. Josh explained earlier this week how Facebook’s new standardization of its “like” button could affect not just the distribution, but the content of news; it’ll be interesting to see whether the standardization of a paywall will engender a similar dynamic. Did the Times’ wall have anything to do with this week’s Rich Switch? Who knows. (As a fan of his work, I hope those Bloombergian bags of cash had at least something to do with the deal.) But it’s worth remembering that pay models, as walls or any other form, aren’t just business-side structures. They’re both medium and message, and affect all aspects of the news — from the reader to the writer to everyone in between.

“The price you pay for asking people to pay the price”: Gerry Marzorati on class and the NYT paywall

Two years ago, when The New York Times’ Gerry Marzorati spoke at the Berkeley School of Journalism, “the newspaper was in free fall. I remember people volunteering to give you money,” Michael Pollan recalled.

Last night, when Marzorati, now the Times’ Assistant Managing Editor for New Products and Strategies, gave a talk at Berkeley about “Making the Online Times Pay,” the mood was much more optimistic. Marzorati told Pollan and Mark Danner, who jointly moderated the talk, that he was confident the Times’ new metered paywall system would be a success, and might even bring in enough revenue to enable the Times to expand.

But he was much less sanguine about the future of publications that cannot rely, as the Times and a few other publications do, on an elite readership.

“The audience for The New York Times — which is an affluent, well-educated audience — that audience will pay for premium information,” Marzorati said. (“Of course, advertisers want to reach that audience, too,” he noted later.)

“That has implications for other sections of society, other cohorts, that I think are going to increasingly get less clear, less concise, less thorough journalism.” It’s a national problem, he suggested. “We are living in a country where we are having inequality of all sorts, and one of the inequalities that is growing is the inequality between the really well informed and the not-well informed,” Marzorati said.

The print-and-ink news devices of the past served readers, rich or poor, with the same content in the same format. Not so with the iPad.

Asked at an event on Monday whether “the iPad is the solution” for the future of newspapers, Marzorati replied, “I think these devices are good for The New York Times and the Wall Street Journal and the Financial Times and The Economist and the New Yorker. Whether it’s actually going to mean we’re going to have a better-informed society because of these devices, I’m not at all sure.”

“The most affluent parts of the culture are better informed than they’ve ever been,” he noted. “They understand how to navigate the terrain, and they can get tremendous amounts of information. The public which used to get their nightly news from the nightly network broadcast and Time and Newsweek, are they better informed now? No. I think they’re misinformed to an extent that would have been unimaginable in the 60s.”

“Someone who used to watch the network news because that was available is now watching Glenn Beck, and that person is not informed.”

But the extent to which individual news outlets can affect that situation, he noted Tuesday, is questionable. “I think it is a problem for our civic culture,” he said. “It’s not one the Times itself can really change.”

Marzorati didn’t add many details on Tuesday about the Times’ planned implementation of its metered paywall — which is “is in the final testing phase” and expected to “launch shortly,” per Times Company CEO Janet Robinson — although he did say that the paper might charge an additional fee, even to print subscribers, for full access to the Times across multiple platforms.

“If you are someone who only uses the Times occasionally and comes through search, you’ll continue to do that. You’ll continue to go to the homepage as many times as you want,” he noted. But “for someone who is having an online equivalent of the deep, immersive experience of reading the print version, if you’re reading many stories beginning to end, day in and day out, you will eventually get a notice that if you want to continue the experience, you are going to have to pay.”

The idea is to leverage the loyalty — and goodwill — of dedicated Times readers. “This isn’t going to  be a panacea or a silver bullet,” Marzorati noted. “There’s a feeling that the people — what we know about those people — these people will be willing to pay to subscribe.”

Danner asked Marzorati about the Times’ paywall plan in light of polling statistics suggesting that only 18 percent of people who currently read a newspaper would be willing to pay to read it online.

“Obviously, we have seen the numbers,” Marzorati replied. “We just think the Times is different. We don’t think the Times is the Detroit Free Press, the Chicago Tribune. We think we have a connection with our readership which is different.”

The difference, he clarified, is that Freep and Trib readers may not be as willing or able as Times readers to pay a premium price for premium news. And that “is a gigantic problem, and the implications are going to play out in ways we don’t even know yet. I think, in particular, in state capitals, the falloff of covering state houses is going to be terrible.”

Marzorati also noted that one of the reasons the Times has been able to weather the news industry crisis as well as it has is that, instead of being dependent on local advertising dollars, it was able to get national advertising — including luxury advertising.

And the paywall, he said, shouldn’t hurt the paper’s advertising revenues. “We understand that the aggregate large number [of viewers] will come down. That’s just the price you pay for asking people to pay the price. Whether advertisers will care — I think not. I think a) there will be enough people who continue to use the website immersively, and b) there is also a propensity among advertisers to value someone paying for the product more than getting the product for free. They get information about users that they would not get otherwise, and they feel that that person has a deeper attachment to the product.”

Besides, he noted: “Remember the main place to advertise is the homepage, and the homepage will be available for free.”

The criterion for judging the success of the paywall, he said, is whether it will allow the Times to grow and expand its coverage. “We know we will survive, and that we will survive very much like we are now. But the challenge for us is how to grow as a business — which is to say, increasingly make profits the size of which we can then plow back and invest in the organization.”

“Obviously, if we were able to get a sizable percentage of the people who use the site in one way or another to pay for the site, that allows for all kinds of growth.”

And that growth will include global expansion. “We’re going to be building a kind of mini website for India,” Marzorati noted. India “is an enormous newspaper-reading culture that is only now beginning to transition online, and we want to be there and we want to have a product that not only appeals to Indians, but also Indians in the diaspora who might want information about India from a product that they are now using here.” So “we’re plowing money into that.”

For the Times, he said, “growth is about figuring out interesting ways to invest and do more different kinds of journalism.” And for now, the ability to grow is a goal along with growth itself. “We would just like to have that kind of mindset. “

Takeaways for journalists from today’s Apple announcement: Better reporting tools and an ebook boom

Apple’s Steve Jobs just left the stage after a surprise appearance to announce the new iPad 2. Check Engadget’s liveblog if you want to relive the whole event, but I noticed a few takeaways from it that I think will have an impact on the news business.

More evidence of an ebook boom

I’ve been trying to figure out if we hit an ebook tipping point at Christmas 2010, when Santa left lots of Kindles, iPads, and iPhones under a lot of different trees. You have the amazing numbers from indie author Amanda Hocking, who went from selling 164,000 books in 2010 (the vast majority ebooks) to selling 450,000 in January alone — almost all of them ebooks at 99-cent and $2.99 price points. You’ve got other evidence of big momentum in ebook sales, particularly among indie authors, a fair number of whom report selling 10,000 copies a month just for the Kindle.

To that we can add Jobs’ statement today that users of iBooks — at best the second biggest ebook platform, maybe even third behind the Nook — have downloaded 100 million books since launch in early April 2010.

It should be noted that downloads don’t equal sales — some portion of those 100 million were free books. But to put that total in context, in June, two months after launch, Jobs happily reported a total of 5 million downloads, which he said made for a 22 percent share of the ebook market. Going from 5 million in two months to 100 million in 11 is a pretty decent rate of increase. And that’s in a competitive environment where I suspect Apple is losing market share to the new cheaper Kindle and the well received Nook Color.

We’ve written about Kindle Singles and other models that allow news orgs to turn their journalism into longer-form content that can be sold — and take advantage of the purchasing platforms that Amazon and Apple have built so well into their devices. And the financial share isn’t that bad — 70/30 in most cases. Ebooks aren’t going to save journalism by any means, but I think by the end of this year, we’ll look back and see that for some companies it will be a small but welcome addition to the bottom line.

The iPad as an improved reporting tool

The iPad is a wonderful device for couches and beds. It’s been less great for getting work done — particularly the kind of app-hopping work that many journalists do. The primary reason is that the iPad 1 didn’t have enough RAM to consistently keep several web pages open at the same time. If you’re assembling writing a deadline story by shuffling between something in Gmail, four open webpages, plus the web entry of your CMS, the iPad’s memory would run out and force you to reload those pages — sometimes meaning you’d lose the work in progress on that CMS page.

The amount of RAM in iPad 2 wasn’t disclosed at today’s event, but the iPad’s competitors have generally been featuring 4x or more as iPad 1’s 256 MB. We’ll have to wait to see it on the actual device, but I’d wager that roadblock will go away.

Add in iMovie for iPad and the rear camera, and the iPad 2 also seems to be a pretty decent mobile multimedia center for reporters shooting on a scene somewhere, either stills or video. GarageBand might be nice for journos gathering audio in the field, too. Or at least killing time playing fake drums.

What wasn’t announced, unfortunately, were the four- and five-finger gestures for switching between apps that appeared in an earlier beta of iOS 4.3. Those, combined with the faster CPU of iPad 2, would make journalistic multitasking significantly faster and easier than the doubleclick-swipe-tap required now.

But in all, the iPad looks much closer to being a workable reporting setup than it was yesterday.

The continued power of Apple’s platform

Finally, while this iPad isn’t revolutionary, it answers its (generally more expensive) potential rivals quite well. Apple didn’t choose to hit a lower price point to really aim for market share, but nonetheless they’ll sell of a lot of these, and the iPad will still be the dominant tablet platform by a mile this fall (when rumors have a much improved iPad 3 of some sort coming out).

For news organizations, that means that, no matter how bummed you are by Apple’s 30-percent take on subscriptions, its App Store is going to remain the dominant way to reach your audience on a tablet form factor. Nothing today suggested reason to suspect weakness on Apple’s part. The prospects of rooting for an Android Honeycomb boom to counterbalance Apple’s market power took a hit today.

Dennis Mortensen: Are news orgs worrying too much about search and not enough about the front page?

Editor’s Note: This is a guest post from Dennis R. Mortensen, former director of data insights at Yahoo and founder of Visual Revenue, a New York firm that sells its predictive-analytics services to news organizations.

Dennis saw my talk at the Canadian Journalism Foundation in January and wanted to comment on the role of a news site’s front page in its success in assembling an audience. He argues that paying too much attention to SEO on current articles could backfire on news orgs.

In Josh’s talk in Toronto, he hypothesized that:

[The front page is] still an enormously powerful engine of traffic. I would say actually that for most American newspapers…it’s probably 70 percent in a lot of cases.

Josh is saying you should view the front page as a traffic channel unto itself, just as you’d think of Facebook or Google — something I wholeheartedly agree with. If you choose to view your front page as a traffic channel, you’ll also sign up for a different kind of data analysis — analysis that mixes external referrers with internal referrers. In other words, a link from the Drudge Report is no different than a link from your own front page, in the sense that they both should be viewed as channels to optimize.

I argue that the front page is the most important engine of traffic for news media publishers today. I would also argue that this whole notion of news media publishers being held hostage by Google — and the slightly suboptimal idea of optimizing your articles for search to begin with — is somewhat misguided. It certainly seems wrong when we look at the data.

In this analysis, it’s important to distinguish between two core segments: current article views and archived article views. To begin, I’ve chosen a set of very strict and non-favorable definitions to my conclusion. A current article is defined as an item of content that is directly being exposed on the front or section front page right now. Any other content not currently exposed on a front page or section front page is deemed to be an archived article.

We looked at a sample of about 10 billion article views, across a sample of Visual Revenue clients, and found that on any given day, 64 percent of views are on current articles, and 36 percent of views are on archived articles.

So on a typical day, for most if not all news media publishers, the largest portion of article views comes off of their current article segment — stories published today or perhaps yesterday and still being actively promoted. I find this analysis fascinating and almost empowering, for the simple reason that most current news events are initially non-searchable. If a revolution breaks out in Egypt, I won’t know until I’m told about it. Non-searchable translates into a need for the stories to be discoverable by the reader in a different way, such as on a front page, through RSS, or in their social stream — all channels the publisher either owns or can influence.

There is no doubt that search, as a channel, owns the archive. One can discuss the data of why that is and why it is or isn’t optimal — I’ll leave that for a later discussion. But today, let’s focus on the current article segment, by far the bigger of the two. Where do those views come from? Looking at the same dataset from our clients, we get a very clear indication of where one’s focus should lie:

Sources of current article views:

78 percent come from front pages
7 percent come from search
6 percent come from social media
5 percent come from news aggregators
3 percent come from news originators
1 percent come from RSS & email

(We’re defining “news originators” as sites where at least two-thirds of the stories excerpted and promoted on their front page are original pieces generated by the news organization — which includes most traditional media. “News aggregators” are sites where less than two-thirds are original, such as Google News, Techmeme, or Drudge.)

I doubt this front-page dominance is much of a surprise to most editors — but for some reason, it seems like we aren’t taking the appropriate action today. We have 78 percent of all views on current articles coming from the front page — that’s 49 percent of all your article views on any given day — and what do we do to optimize it? And why is it that so many news organizations think immediately of search when we write a new story, when search has minimal initial impact? Even worse, writing an SEO-optimized article excerpt title for your front page probably deoptimizes your results on current articles.

The front page is indeed still an enormously powerful engine of traffic. We now know that about half of your article views can be attributed to the primary front page or the section front pages — and with it a huge chunk of any news organization’s online revenue. The question, then, is what kind of processes and optimization methodologies have you applied to take advantage of this fact?

John Gruber on Apple’s 30% cut: To the victor goes the pricing power

John Gruber at Daring Fireball has an extended take on the justice or injustice of Apple’s 30-percent cut of all iPhone/iPad subscriptions. (He comes down on the side of justice. Or at least a kind of it’s-fair-because-we-can justice.) If you, like many publishers, are still cranky about Apple’s decision, give it a read to get a reasoned argument for the other side. (One that’ll probably still leave you cranky — but reasoned nonetheless.)

Here are a few thoughts on some of Gruber’s arguments:

Apple doesn’t give a damn about companies with business models that can’t afford a 70/30 split. Apple’s running a competitive business; competition is cold and hard. And who exactly can’t afford a 70/30 split? Middlemen. It’s not that Apple is opposed to middlemen — it’s that Apple wants to be the middleman. It’s difficult to expect them to be sympathetic to the plights of other middlemen.

To the broad category of “middlemen” I’d add “companies whose economics are built for other platforms.”

For all the developers who’ve built native apps for the iPhone or iPad from scratch — say, game developers or productivity app developers — they’ve been able to build their business strategy from a known cost base and a known revenue scheme. If you know that you’re going to be selling 99-cent apps, you can build a business around the expectation of revenue coming in 99-cent chunks. (Or, more accurately, 70-cent chunks, after Apple’s cut.)

But if you’re a business that already exists, with its own native pre-iOS economic basis, you’re laden with a bunch of preset economic variables. If you’re a newspaper, you’ve already got a newsroom with X number of reporters and Y number of photographers and Z number of editors. (Which were probably around 2X, 2Y, and 2Z ten years ago.) You’re coming to a new platform, but it’s not an entirely new product you’re creating — you were already paying those reporters. And when you’re calculating something like pricing, you’re doing that with an understanding that you’re also navigating the economic space between what you’re already charging for your website (likely $0 now, although you’re planning on changing that later this year) and what you’re already charging for a print subscription (whether that’s $12, $20, or $30 a month). You’re already scared to death about trying to convince people they should pay for your website — and then all of a sudden, the monthly number you’d been planning to charge for your iPhone app needs to go up 30 percent to make the math work.

Now, that’s not Apple’s problem. Gruber’s right: Apple doesn’t give a damn about newspapers. The financial difficulties of American newspapers are not Apple’s fault and they’re not Apple’s to solve. And unlike Google — which has put a lot of energy into making newspaper-friendly noises to try to repair a relationship that bottomed out a couple of years ago — Apple doesn’t throw the industry any bone bigger than showing off nytimes.com in product demos.

But regardless of whether you think newspapers deserve any sympathy for their plight (good arguments on both sides!), it’s not just middlemen who are disadvantaged by Apple’s large take.

Kindle, and e-book platforms in general, are a different case. For one thing, Kindle doesn’t use subscriptions. Kindle offers purchases.

The Kindle does actually offer subscriptions, both to newspapers and blogs, like Daring Fireball itself. (Given where DF ranks in the Kindle Store, he probably has about 5-8 people paying $1.99 a month to read the site on their Kindles. We have 16! That’s likely to be the only traffic-related number where we edge Gruber.)

I don’t think any publisher would consider Amazon’s Kindle subscription model an improvement over Apple’s, though, for a host of reasons — not least that it’s Amazon who controls pricing, not the publisher, not to mention Amazon takes an even steeper cut than Apple does.

Second, the problem facing traditional publishers today is that circulation is falling. Newsstand sales and subscriptions are falling, under pressure from free-of-charge websites and other forms of digital content. The idea with Apple’s 70-30 revenue split is that developers and publishers can make it up in volume — that people aren’t just somewhat more willing to pay for content through iTunes than other online content stores, they are far more willing. The idea is that that Apple has cracked a nut no one else has — they’ve created an ecosystem where hundreds of millions of people are willing to pay for digital content. Thus, potentially, publishers won’t just make more money keeping only 70 percent of subscription fees generated through iOS apps than they are now with 96 percent (or whatever they’re left with after payment processing fees) of subscription fees they’re selling on their own — they stand to make a lot more money.

There’s no doubt that Apple’s built a great payment system. Although I’d also point out that it benefits from the natural market segmentation that comes whenever you sell expensive devices. Does the iPad make people more likely to buy digital goods? Or does the fact that someone has paid $499 or $829 for an iPad serve as a pretty good marker that they’re already the kind of person more likely to pay for digital goods? I think there’s truth in both.

To look at it from another angle, any developer will tell you that there are many more Mac users who buy shareware apps than Windows users. (I’m speaking in terms of percentage; obviously there are many more Windows users than Mac users. But a larger percentage of Mac users will download and pay for a $15 app than will Windows users.) Now, pre-Mac App Store, Apple didn’t make paying for software any easier than Microsoft did. But Mac users are, by their self-selected nature, people who were willing to spend a little more to get a better computing experience — in other words, people who are predisposed toward paying.

The other factor here is the idea of who “deserves” credit for bringing a customer to a purchase. As Apple said in its announcement, “when Apple brings a new subscriber to the app, Apple earns a 30 percent share.” And if someone discovers Tiny Wings (great game!) in the App Store rankings and downloads it, I think Apple’s certainly earned its 30 percent.

But if someone searches for and downloads The New York Times app — after the Times has spent more than a century building up its brand, at the cost of billions of dollars — can it really be said that Apple has “brought” that subscriber to the app, and that they deserve 30 percent of the revenue the app generates, forever? (Gruber doesn’t address the eternal nature of Apple’s cut; it’s like paying a New York apartment broker his finder’s fee, every year for the rest of your Manhattan-dwelling life.) It certainly seems like a transaction different in kind from, say, a game that exists only on (and only because) the iPhone platform.

Again, it’s a case of being disadvantaged if you’re bringing over an economic model from outside the platform. There’s a reason Rupert Murdoch said he was fine giving Apple 30 percent of the revenues from The Daily — but why he’s no doubt less thrilled about having to give over 30 percent of the revenue generated by The Wall Street Journal’s app. The Daily’s economics are built around getting 70 cents a subscriber each week. The Wall Street Journal has a host of price points in other media it needs to fit an iPad price into. (Not to mention an annual cost 4x The Daily’s.)

Finally, also note that most App Store developers don’t have such a readily substitutable good available for free over in Safari, the web browser. If you don’t want to pay 99 cents for Angry Birds, you don’t have the option of going to Safari and playing it for free. Again, you can blame newspapers for that state of affairs, and you wouldn’t be wrong. But given the degree to which newspapers are having to balance free and paid in a variety of ways to make digital revenue work, it’s a tough moment to be pushed into a corner by Apple’s decision.

This is what galls some: Apple is doing this because they can, and no other company is in a position to do it. This is not a fear that in-app subscriptions will fail because Apple’s 30 percent slice is too high, but rather that in-app subscriptions will succeed despite Apple’s (in their minds) egregious profiteering. I.e. that charging what the market will bear is somehow unscrupulous. To the charge that Apple Inc. is a for-profit corporation run by staunch capitalists, I say, “Duh”.

Of course. Apple’s not a charity. It has no financial reason to help out any content industry. While those of us who wish the newspaper business well would love to see a different approach, in the end, it’s Apple’s choice and they can do what they please.

And iOS subscriptions won’t fail. I wager that most of the news publishers grumbling about the issue now will come around and give the cut to Apple. They might increase their investment in Android phone and tablet apps a little, but let’s be honest: Apple’s still the big dog here. (Android users have inherited Windows users’ disinterest in paying for software or digital content.)

It’s just galling that the incumbent players in the news business face so many economic disadvantages because of their background, and because of their investment in journalism, that it would have been nice for this to be different.

Yes, the financially sound thing for them to do would be to abandon the old cost structure and instead build a digital-native company that could happily turn over 30 percent of revenues to Apple and reap all the benefits (distribution, scale, payment platform) that Apple provides.

The only problem with that is that, with that model, you end up, well, with something like The Daily — something light and tabloidy, something in nugget form, something that looks for the oldest dog in America. (Actually, I suspect you end up with less than that, because I’m not optimistic that Murdoch will get the subscriber numbers he needs to be profitable. And I say that despite being a great admirer of many of the people working there.)

With all the great innovation that’s gone on in the news space, there are still no for-profit newsrooms with the scale and heft and journalistic weaponry of the nation’s biggest newspapers. They’re still important, and they’ve been looking to the app economy as a big part of their efforts to figure out a place in the digital economy. It would have been nice if Apple might have cut them some slack. Yeah, that’s not Steve Jobs’ problem — I get that. Apple’s earned their pricing power by being innovative and smart. But it still would have been nice.

A hive of long-form journalists: Gerry Marzorati and Mark Danner on a new model for long form

Yesterday at the Berkeley School of Journalism, former New York Times Magazine editor Gerald Marzorati and author and former New Yorker writer Mark Danner sat down to talk about the “the fate of long-form journalism in a new media age.”

Their conversation came on the heels of Virginia Heffernan’s paean to long-form journalism and the possibilities of the new Kindle Singles platform, designed for “Compelling Ideas Expressed at Their Natural Length.”

Marzorati argued that the Internet has not shortened readers’ attention spans, and that the audience for long-form journalism is large, enthusiastic, and happy to read long pieces that are actually long. And that’s a trend that’s been on the rise: During the tenure of Jack Rosenthal in the ’90s, Marzorati noted, cover stories at the Times Magazine actually grew from an average of 4,000 to 5,000 words to at least 8,000 words.* For him, the crisis of the form isn’t the audience, but the expense: Who is going to pay for  the necessary months of reporting, fact-checking, and editing — not to mention the legal protection that intensive pieces often require? (Marzorati has said previously that Times Magazine cover stories regularly cost upwards of $40,000.)

Marzorati’s comments reinforce a trend Megan highlighted this January: In a world where magazine editors are increasingly unwilling to invest in a big, intriguing story before it’s finished, long-form journalists are often turning to nonprofits to finance their reporting. Nonprofits are the “lifeboats,” as Megan put it. They keep important stories afloat until they’re close enough to publication that editors will take them on.

But the most intriguing part of yesterday’s conversation came when Danner asked Marzorati to imagine how he would build a long form-focused organization from scratch, if he had $10 or $12 million to do it.

The first step, Marzorati replied, would be to attract a lot of big-name writers who already have their own audiences. Then, he said, he would “surround, immerse each of these writers in social media tools. The writers would sort of be the hive, and the experience people would be coming for would be not only to read and encounter the writers, but also the community that this writer had created.”

Danner, liking this idea, said that approach might appeal to writers by providing “one-stop shopping” for editing, publishing, literary representation, and more, so that writers could spend less time managing their professional lives, and more time simply writing.

An edited partial transcript of the pair’s conversation is below.

Mark Danner: Are we right in worrying about the survival of long-form journalism? Is it really threatened?

Gerry Marzorati: I do think it is threatened. I don’t think it’s a technological problem, I don’t think it’s an audience problem. I think the conventional wisdom about long-form journalism — that people’s attention spans have lessened to such a degree that they no longer have the time, or they’re too distracted to read long form, or the medium itself is non-conducive to that sort of longer read (the 45-minute, hour-long read) — I think all of those things are not true.

We have metrics at The New York Times that show that people absolutely click the 23 clicks through to the end of the story. When I was at the magazine, the longest pieces in the magazine were the best-read, the most-read, the most-emailed. The pieces also tended to be, at the end of the year, the pieces that got the most pageviews of anything the Times ran…. People figured out their own sorts of behavior. They printed out the story — on the subway, you would see a printed-out version. Or Instapaper. People are reading these things, and they still become conversation pieces. I don’t know how many of you read Larry Wright’s [New Yorker] piece on Scientology, but a lot of people have read that piece…. [That] you can comment on them, you can blog about them, actually brings more readers to these long-form pieces.

The problem is who’s going to pay to have these pieces reported. That’s the problem. That’s really the crisis. You have  fewer and fewer news outlets, you have fewer and fewer magazines, willing to have a journalist report for five or six or eight months, or send them to the edge of the world — and then have the edifice in place to edit and fact-check these pieces. There is a feeling among these magazines that they don’t have to fund these pieces to create readership. It’s a really, really big problem.

At The New York Times Magazine, the number of magazines that were competing with us was just a handful, and none of them makes money. If you go back to the heyday of long-form journalism in the ’60s and ’70s, the publications were also making money —

MD: You’re talking about Esquire, Harper’s —

GM: There were city magazines, The Atlantic, Harper’s, the New Yorker. There were a lot of places that were making money publishing long-form journalism.

MD:  For many magazines, whose identities have been formed with the reputation of funding this kind of work, do they have an alternative? Are they having the possibility that “we can’t do this stuff anymore, we can just stop doing long form, period”?

GM: I think that’s what’s happened. I cannot believe that Rolling Stone’s newsstand sales, or what have you, that that’s being driven by whether they have long-form journalism or not. It’s a crisis of the expense of reporting.

MD: What does long form bring to a publication? [With Rolling Stone], the McChrystal piece earned them a great deal not only of attention, but also news chops. Is this Tina Brown’s notion of  “the mix”? Take a glossy magazine, give it credibility by inserting long-form journalism? What do you have left if you pull this stuff away? [Do they think], “I’m going to cut this stuff, but we’ll be fine without it”?

GM: In part, you’re seeing things like ProPublica rise up. When I was at the magazine, we won a Pulitzer Prize partnering with them on a long reported piece…and here’s an interesting story. [The author, Sheri Fink] had come to the magazine with this pitch years before. She had really no experience as a magazine writer, but it was a really interesting idea. We just weren’t in a position to fund what we knew was going to take a year or two of reporting — and we especially weren’t in a position to make the case to make the money available to someone who didn’t have that experience. Eventually ProPublica funded her reporting, and we got involved about a year before the piece was published, and began shaping the story, and getting our legal team involved, and that sort of thing.

MD: What was the economic model? Most of her travel and reporting was funded off-site?

GM: ProPublica funded most of her reporting, and did a lot of the initial editing. Steve Engelberg, who had been the Times’ investigative editor in the 1990s, is the managing editor at ProPublica. We knew each other and had a good working relationship. It wasn’t without a fair amount of back-ing and forth-ing. It’s very unusual to be involved in a project like that, where you have so many editors. It turned out to be a great experience in the end.

I suspect you’re going to see more of these kinds of organizations springing up, which is not without its own problems. ProPublica has its own best practices. I imagine there will be organizations in the future who have a specific message they want to get out, or a specific line of inquiry to pursue, and what’s the Times’ relationship with them going to be? You need to know the agenda of everyone before you leap into bed with these things.

MD: From the point of view of a young writer who is looking at long form and trying to make a life of it…is the landscape from that point of view worse? Are there fewer outlets at the end of the day? Fewer chances to make a living?

GM: I don’t think we know yet. We’re at a very early moment in web journalism. It changes year to year, so rapidly. Obviously the tablet is going to have a bigger impact than we can even imagine. I think there is something about reading on the tablet that is just more conducive to the practice. I also think Steve Jobs has figured out a way, brilliantly, to get people to pay through the iTunes store. Could you imagine paying 99 cents for a piece of journalism that you really want to read? Probably, yes. If you now have these sorts of models in place, through some startup money and foundation money, someone coming along and creating these kinds of pieces…yeah, I think it could happen, there’s a good chance it will happen. I don’t think we’ll know what it’s going to be until we have the first Harold Ross of Web 2.0.

MD:  Maybe Kindle Singles are an early sign. But there’s nothing in there about the editing method, nothing in there about if you have an idea for a story, how you end up published. It simply seems to be a place where writers who are already of some reputation can publish.

GM: There are a few other projects — Longreads, Longform.org — but I don’t know if they pay. A lot of them are just collecting pieces from various publications. The problem is discovery — search.

One of the things that’s really taken off in the last 10-15 years: The public has a hunger to actually encounter the writers who are writing these pieces. One of the ways nonfiction writers are able to make money — not all nonfiction writers, but a fair number of them — is on the lecture tour. A kind of 19th century idea, the book as a loss leader for actually going out and encountering people.

[On the web] there are costs that you do eliminate, physical paper costs, which are considerable. You could imagine that someone could pull together a cadre of writers, fund them through foundation money, raise some kind of venture capital money, have some combination of lecturing and writing. If I were in that position, one of the things I would be very interested in experimenting with is: Is there a way to make more transparent the work-in-progress, which you have the possibility of doing online? We’re experimenting somewhat with this in the Times. If you have Nick Kristof in the main square in Cairo and he’s tweeting, can you get people interested in the story through that, and the story comes later? And part of what he’s doing through tweeting is explaining how he’s gathering the story. You’ve got some added value, which you don’t have in print.

Maybe that’s one of the things that will make this work. You subscribe to this place, and you know you’re going to get a story in six months, from some war correspondent, that’s really going to be a big narrative — but along the way, that reporter is tweeting and posting about what he or she is doing.

MD: It’s really an amazing “back to the future” thing. Tolstoy did War and Peace by subscription, and finally, with publication in full, the earlier volumes were substantially changed. You signed up for the beginning and you basically saw it in progress.

If you were going to set something like this up — you had a few million dollars in venture capital — given the obstacles now and the advantages, how would you go about doing it? If I handed you $10 million, $12 million.

GM: You’d have to start by attracting some big-name authors. One of the things the Internet has reinforced is the individual brand of a writer, and it’s to those writers that people go. I was having this discussion with Michael Lewis. He publishes his pieces in Vanity Fair, but most of his readers don’t read Vanity Fair — they just read it because he’s attached the link to a tweet and sent it out.

MD: Most of his readers are not paying readers —

GM: Those writers in some ways have transcended the publication. I think it’s going to be harder online to set up this kind of “publication” feel, this kind of magazine, front of the book/back of the book/feature well, that was there to serve advertisers — to some extent, anyway. That sort of thing will disappear.

You will have to at least start by building the brand around a handful of these writers, and then, how I would go about it, would be just: Surround, immerse each of these writers in social media tools. The writers would sort of be the hive, and the experience people would be coming for would be not only to read and encounter the writer, but also the community that this writer had created.

MD: So are we talking to them, paying to get onto the community, or paying for a Kindle —

GM: You’d probably give them different options. You could subscribe to all the people, you could subscribe to one writers. I’d probably use social gaming mechanics to actually get people returning to the particular place, by which I mean: You become the most important commenter on Mark Danner, you are recognized, because your comments are the most read of all the comments. We badge you. We give you the title and you are now badged.

This has an enormous effect on keeping people coming back. It’s the same thing as in those shoot-em-up Mafia Wars: You work your way up, you kill more and more mobsters. You keep coming back. You have a place in the game. You become a super commenter, your comments are flagged in some way. Maybe you do it in color shades. The blue overlaid comment is the one that’s the most read. Or you get badged by bringing other commenters to the site, bringing 20 of your Facebook fans to the site.

[Marzorati is the Times' Assistant Managing Editor for New Products and Strategies, but when I asked him about comment incentives after the talk, he said the Times is not planning to implement a badge system any time soon — it's just something he finds interesting.]

MD: How would you attract writers? Editors attract writers by some combination of paying them the going rate or force of personality. What are you offering them as a lure?

GM: The promise of getting them more readers than they would otherwise have. You could work out deals with print magazines that you also reverse publish into, form partnerships with Amazon and other distributors…. Ultimately, what these writers want is the best readership they can have, and if you figure out a way to pull that off, the promise of the Internet is gigantic. The reach — The New York Times, on any given weekday, sells 800,000 copies, and you know, we have more than 60 million unique visitors a month. It’s gigantic. It’s international.

MD: There’s also an irony here. The Internet has made long form writers entrepreneurs. You have a website, you have speaking tours, you have a publisher and a literary agent…. It’s more time-consuming for the author. Maybe what you’re offering is one-stop shopping: We are your publisher, we are your editor, we are your literary agent.

During the Q&A session, Michael Pollan, who is also a professor at the journalism school, asked Marzorati:  “What should we teach these kids, especially as long form writers?

GM: I position myself on the more conservative side. I don’t think journalism school is a place to  learn how to write computer code. I think a lot of the tool kit you’ll need, you’ll get on the job. I think our job, if you want to be a long form journalist, is to read a lot of really great long-form journalism and learn how to write it…. Reading is my own particular hobby horse. I think in a lot of programs there isn’t a lot of time built in just to read, to read the people who did it really well.

*This sentence has been updated to reflect the fact that the rise in story length Marzorati referred to came during the ’90s, under Jack Rosenthal’s tenure as editor.

Mark Danner image by Dominique Nabakov.