Bill Keller, the Executive Editor of the New York Times, made a speech to his staff last week, in which he addressed issues of concern – such as paid content. During this, he outlined the 7 digital priorites for the NYT.

They are the following:

1. the future role of Times Topics and other “living articles”
2. openness of Times content, integration of non-Times content, and social media
3. integration of print and digital operations, particularly for department heads
4. improved collaboration between technologists and the newsroom
5. thinking “web first”
6. a stronger strategy for cell phones and other mobile devices
7. redesigning Times article pages to create “an engine of engagement”

The points that jump out to me are 1, 2, and 7 (the others are mostly operational). It’s fantastic to see that the NYT is actively moving away from static articles towards those that live, grow and develop. Topic-based news is the future of news navigation and context-setting. Hand-in-hand with this, they are looking beyond their own content, to the integration of external sources and social media. These elements help work towards the final priority of creating news that is “an engine of engagement.” This tallies with the move from monetising content to monetising engagement, and helps move transitory traffic up the value chain.

These priorities provide a great guide for any publisher planning activity over the next quarters.

UPDATE: Also see “Is Wikipedia the future of news delivery” for more thoughts on “living articles.”

Last week I tweeted this:

wikipedia is the ultimate citizen journalism news source. near real-time, mass participation, citations, translations, & corrections.

Most people would agree that from a citizen journalism perspective it is a superb case study. Breaking news is added to Wikipedia breathtakingly fast, and some news stories are even broken there. But beyond the content creation elements, there are two lessons we at idio have learnt from Wikipedia.

1. News lives and breathes, and must be updated, or at least connected with the context of later news items.
2. Deep topic classification within news is vital for increasing its value, and improving news discovery.

News is worthless without its context.

As a perfect example of the first point, see this story by the UK’s Daily Telegraph – Balloon Boy Feared Dead. So, as anyone who turned on their TV during this incident will know, the “balloon boy” wasn’t in the balloon, and is very much alive and well. It might or might not have been a constructed hoax, but whatever happened, this news story is, with hindsight, incorrect. Yet there is NOTHING on the page to suggest that this story is now obselete. The “relevant articles” links don’t point to any of the many articles written after the event with the correct version of events. No update is made to the copy to let the reader know about the innaccuracy. And there is not even a commenting facility so that readers can respond. The Telegraph should absolutely still host this story – but it should provide context.

News is more valuable with its context.

An easily browsable context, whether held on the same page as the article, or linked closely, improves the value of a news story. It is valuable for the user because the story is kept current and factually accurate, and incorporates a wider variety of perspectives and related backstories. It is also valuable for the publisher because it becomes a destination page to which readers will return for updates, and it holds the reader’s engagement for longer, by guiding their journey to other related stories. Wikipedia is a perfect example of this. For those with an inquisitive mind, Wikipedia is a complete timesink (and the newspapers would give their right arm for this to be said of their sites!). It has an easy-to-follow topic-based navigation, which allows “serendipitous” browsing; where one can browse from topic to related topic, reading quality content about a broad range of subjects, and then easily digging into niche areas of interest with great depth. There is lots to learn here, but the fundamental element is that topic-based navigation works. More on that in another post…

Context should rely on external sources.

This is the most controversial point for traditional publishers. If the Telegraph had included any aggregation of related stories/blogs/tweets about the “balloon boy” incident, the facts would have been visible, even without the Telegraph editors doing any work. No publication will ever be able to have the full view of a single incident, so good aggregations of external sources always improve the content. And if external content is aggregated and included, why should the readers themselves not also be able to comment on the story – and even change the facts, building the story as it develops? Well… because then we would have another, smaller, less-edited Wikipedia. There is certainly an opportunity for editorially moderated crowdsourced updates, however.

Until then, lets learn to make news more browsable, valuable, and up-to-date.

The article is on page 10, titled”Nice Little Earner”, and it explores the revenue potential of iPhone applications.

Just building iPhone apps is like making magazine-branded T-shirts – but only in XXXL. It ignores a huge proportion of the market. Browser-based offerings serve more people. However, apps certainly have an advantage with a strong built-in revenue mechanism.

Many magazine publishers are seizing on the iPhone as being the saviour of their falling-circulation-and-advertising-revenue woe, but I am unconvinced that simply replicated print editorialin digital formats will sustain magazine publishing.

Print, web, and mobile serve different needs, and publishers need to research and understand the various functions they perform. Many publishers will be able to run the three in parallel – with the print as an infrequent premium product (although it is clearly going to be phased out by many), the web as the main destination for engagement and mobile for specific use cases (i.e. commuter reading, note-taking, quick data lookup etc).

Understanding the business process and possibilities will become easier – there are so many unknowns at the moment – but that doesn’t necessarily mean that making money will be easier. However, all publishers will benefit when there is a large enough pool of available app inventory (not just display adverts, but CPA (Cost Per Action) methods, retail opportunities etc) to attract the attention and budgets of major brands. Generally, I think making something good enough that some people will pay for it, is a wise move right now. Either that, or lock in revenue upfront by obtaining sponsorship/co-branding from a major advertiser.

The old model, where magazines, newspapers and TV channels provided a marketplace for brands to inform and persuade consumers is failing. It still has legs, because there is nothing that yet compares to the mass-market impact of buying a 30 second advert slot during a primetime TV show. However, the demise of mass media, caused by the move to online content consumption, audience fragmentation, and the cyclical downturn which has quickly exposed the structural issues in existing media business models, has created a huge opportunity for brands that are willing to engage their customers beyond their transaction.

There are many ways to skin a cat

Traditional media players argue that there is huge value in the quality and volume of audiences that they can amass, and this is true to a point. When advertising in a premium publication, the brand aligns itself with the goodwill, history and quality of the publication. But its becoming harder and harder to make this case, when that same audience can be sliced and diced, and reached more cost-effectively through a huge variety of online publishers and communities, PPC campaigns, email marketing, SEO, etc…

How can long-established and highly-reputable titles such as Businessweek be worth $1? Fundamentally, the reason is the major value of most consumer publications is their audience. And while Businessweek still has a valuable and influential audience, it no longer can claim to be the gatekeeper for that community (or even one of the gatekeepers). It can’t claim to be the one voice that holds the attention of that audience. So it can’t realise that value.

Why can’t a brand publish?

Publishers have usually been very careful to separate advertising from editorial. And many brands have been hesitant to be vocal on anything but their product, as it risks alienating part of their audience. But at the same time as self-designated “quality publishers” have been hit hard by falling revenues, lone bloggers, communities, and small online publishers have built up audiences quickly and inexpensively. And many brands should be asking themselves the question: “Why can’t we be a valid voice in our area of focus/expertise?” (See The Case for Digital Custom Publishing for a fuller look at the benefits).

The new publications that seem to be doing well in the current environment are adapting to the new business reality. They aggregate and syndicate lots of content in (see iMotorMag). They have good distribution systems (ShortList is partcularly impressive). They have small teams, leverage technology well, and are taking audience from newsrooms 10x their size. For an ever-decreasing investment, brands can, and in some cases are, doing the same thing. The question is, why push all promotional efforts through a publisher (proxy), relying on them for limited reporting and metrics, when you can own part of the audience yourself?

So what does brand publishing get you?

• An interested audience
• Longer engagement periods
• An ongoing and persistent relationship
• Detailed usage data
• A content footprint (helps search rankings)
• Pre-sale credibility before customers

I’m not suggesting that all brands start publishing expensive custom magazines. That can be a way for some premium brands, but publishing is moving forwards. Its more about hosting a conversation than churning out perfectly edited features. Here are three different approaches that can be adopted:

• Custom publishing

This is the most expensive option, and would usually be outsourced to a skilled custom publishing agency. Relentless Energy’s site is one of my favourites. Built for the energy drink owned by Coca Cola, it publishes very high quality video about extreme sports, music and culture, long form articles, blog posts, and custom software. This is a great way of marketing to a targeted audience, building the credibility of the brand within that tight knit community.

• Having a conversation

As far as I’m concerned, every brand should be producing content through blogs, tweets, flickr accounts etc on a scale that is relevant to their products, customers, and market. By not being afraid to express opinions, a brand can build personality and resonance with its audience. In addition this basic customer engagement is a transparant  and much-appreciated method of collecting and answering customer feedback. Lots of other people have blogged about relevant case studies, so I will just point to this nice review of 5 good examples – it includes a company that has every employee actively using twitter, a company that dropped its cost-per-lead dramatically through content creation, and a company that made $3m in revenue through twitter alone. Content marketing works.

• Curating and aggregating

This is a way by which many brands can simply and cost-effectively set up a destination or source of content. It follows the more interesting new publishing models, by taking the focus away from bespoke content creation, and placing it on curating streams of content that are interesting to the target audience. It might be in the form of a digg.com clone, or a forum, or an aggregation of relevant UGC video, or a feedreader preset with relevant content sources. These might not be high-brow “publications”, but they provide places for the target audience to gather around… if a) they are of enough value (interesting/funny/relevant etc) AND b) well distributed. The problem with the first round of attempts at digital custom publishing, ie “microsites”, was that they generally were not search-engine friendly, did not update often with new content, and required push advertising to build any audience at all. By creating something of value to the user, and building in a distribution strategy, these publications can stand on their own two legs now that the costs of releasing a new “microsite” can be so small. A great example is Skittles’ site which simply shows a Skittles navigation widget on top of the Twitter search page for the brand name. Another good example is VB Raw’s microsite, which aggregates content from social media sources which are relevant to their audience.

One final example is a personal favourite of mine: Federated Media and JC Penney teamed up last year to launch the Fall Shopping Guide, a collection of content from popular woman-focused blogs prominently sponsored by the retailer’s Chris Madden Collection. JC Penney didn’t have the rights to review or influence the content, and the bloggers did not have to mention the aggregation to their audiences. Traffic started to grow, from search as well as bookmarking sites and RSS readers. Not long after, the site, was ranked 5th on Google out of 13 million results for the popular term “fall shopping” and ranked 2nd for “fall shopping guide”. See here for the aggregation (now without JC Penney branding), and here for more info.

Also worth reading on this topic are these posts on how publishers could react to this ” invasion” of their market:

How Publishers Are Dealing With The “Advertiser-Owned Properties” Threat

What to do when brands become publishers

Google has a program to allow publishers with paywalls to include their results in Google’s rankings, whilst allowing searchers to read the article they click off to for free.

I’m sure most publishers considering paid content have seen this, but for those who haven’t…

It’s called First Click Free, and more information can be found here. The summary:

We’ve worked with other subscription-based news services to arrange that the very first article view by a Google News user (identifiable by referrer) doesn’t require subscription. While the first article can be seen without subscribing, all clicks on the article page are “trapped.” This means that if users click anywhere else on that page, they’ll be prompted to sign up. This allows our users to view the article of interest while also exposing them to your site, encouraging an actual subscription. There is some evidence that this model yields more subscriptions and more return visits. This is our preferred solution since it benefits both you and our users. By default, first click free will apply for both Google News and Google Web Search results… Please let us know if you’d like this setting to be applied only to Google News results.

For publishers, its a great way to opt for paid content without losing much in terms of search. And for Google it allows paid content news sites to be searchable. But allowing searchers to read the first article for free is a tough term for a publisher to accept. It once again demonstrates the power Google has in the news market.

There are two problems from a publishers perspective, although these probably shouldn’t dissuade publishers from using First Click Free.

1. If the first click from Google is free, it is pretty trivial to access all of the publisher’s content for free, by routing through Google each time, or by using a URL extension or browser plugin that mimics that process. This is discussed in this post and the appended comments (re the Wall Street Journal).
2. More importantly, First Click Free strongly encourages users to use Google and Google News as their news interface, because individual publishers or other aggregations probably contain some content behind registration or paywall. This exacerbates the issue that publishers already face, where news is atomised and publisher brand strength is minimised in the face of news search engines and news aggregators. But can any publisher stop this trend?

• Paidcontent with a good overview of the product.
• Techspheres with a somewhat overblown reaction about how it will kill the newspaper industry.
• Read Write Web on why Fast Flip won’t save publishers (as if Google has that as that as priority…).
• TechCrunch providing some perspective (its only a feature, and in trial…)

That’s all very interesting. But the coverage largely focuses on the main version of Fast Flip. I’ve been playing with the iPhone mobile version for a couple of days now, and its pretty awesome. But if Google and the publishers extend this beyond a trial, and if some more granular personalization features were offered (for eg whitelisting/blacklisting sources), I would use this for most of my mobile news consumption (which is a lot)… without EVER visiting a publishers’ site.

Google’s Power

So, I use Google Reader for the blogs I am subscribed to. And now Google Fast Flip for a serendipitous browse through the newspapers.

I consume a huge amount of news, both trade-specific and general, but I can easily see how I could quite happily (and very easily) do this without ever giving ANY value to a content creator. So where is the model for publishers? Yes, Google is giving them a share of some contextual adverts. But that isn’t a revenue stream that can support… well… anything.

Enough rambling. My point is I now recognise (to an even greater extent), how much power Google has in the publishing marketplace.

When the newspaper advertising marketplace looked good, Google Print Ads launched, as a profitable layer between advertisers and publishers (and when the market tanked, Google just stopped the service). Google is rapidly adding to its indexed and republished collection of millions of archive news articles. Google News is a source of continuous frustration to publishers, because it holds the attention of a massive audience, and yet gives very minimal value to publishers. Google Reader takes syndicated content (often full-text feeds), and delivers it through a usable interface – again separating readers, and value, from the publisher. Add Fast Flip to the ever-growing list. What will be next? Well for starters, if there is going to be a unified move towards paid content, via micropayments or other means, ‘Google Micropayments’ will be the best positioned to faciliate it.

The reason that Google’s control presents such an issue for the publishers is this: Google does not need the news marketplace to be as big as it once was. Google News doesn’t need to make Google much money, because they don’t create the content. And since it doesn’t make much money, there isn’t much to share. It just builds huge strategic value for the search giant. The same with Google Reader. And Fast Flip. And whatever micropayment service Google might or might not launch.

So the conclusion remains: new business models must be found, and even then traditional publishers are probably screwed.

Ouch.

In 2006 the print magazine was making $110 million in revenue, and almost another $20 million online. It was charging $25 CPM for online inventory, and selling 79%.

A few long turbulent years later, and print revenues have almost halved to $60 million, with ad pages falling to around 1,250 in 2009. Online, traffic has grown, and revenues have risen marginally (to $20.5 million), although CPMs have slipped and sell-through of online inventory has fallen dramatically. It’s the classic case of digital pennies not equalling print pounds.

The troubling thought about the Businessweek story, is that despite making innovative and positive moves forward with their online offering, despite spending a huge amount on digital, despite cutting costs, they will lose over $40 million this year, and are probably going to be sold for a nominal $1. Ouch.

According to many ‘digital experts’, they made bold moves that should have turned out better:

• They built a strong online offering.
• They spent a lot to build a strong and valuable social networking/bookmarking element to their service. Which they then promoted heavily across their properties.
• They were one of the first business publications to see the value in integrating with the LinkedIn API.
• They launched a range of blogs (currently 28 at last count).
• They engaged readers in creating content, as well as crowdsourcing questions for interviews with business leaders.
• They experimented with multiple channel delivery, including e-paper.
• They launched iPhone and Blackberry apps to ensure their audience could get the content anywhere.
• They were one of the first mainstream media sites to build upon the Twitter API.
• They talked the right talk.

They did the right things. But it cost too much. As an example, the social networking element they launched, Business Exchange, has cost $21 million over three years. Even now it makes around $600k a year in revenue. As Rafat Ali asked, “With tons of white label social net services out there, and the value of being a media org, BW couldn’t get a cheaper and better deal?”

But digital spending isn’t what is killing Businessweek. The trouble is that all the above simply tries to achieve the wrong objective. It is all about maintaining the existing structure, the existing editorial standards, and existing cost-base, and not about evolving into an entirely new one that could survive.

Let’s do some quick (and no doubt wildly inaccurate but hopefully directionally correct) maths. Based on what Businessweek currently makes off each unique monthly user ($3.64 per year), in order to cover this year’s loss, online traffic would have to more than triple to 15 million monthly uniques. And that is just to break even. And that assumes that the print side of the business maintains its current revenues (which is probably unlikely). And it also assumes there are 15 million people ready and waiting to read what Businessweek has to offer. Fantastic, so the solution is just somehow, someway, drive traffic. EXCEPT that as mentioned above, Businessweek does not even sell all their online ads now. In fact they now sell only 38% of their inventory. So even if traffic rose dramatically, Businessweek would likely only see a very marginal growth in revenue from display advertising.

As Jeff Jarvis recently wrote about newspapers, the problem is simply that they have been guilty of “not running a business. It was not creating a sustainable P&L.” The old cost structures just don’t work in the modern media landscape. Howard Owens, who has run online-only news sites since 1996, explained his revelation:

In a market where the newspaper newsroom might cost $10 million, I knew how to make $1 million online, or even $2 million, but I didn’t know — and still don’t — how to make $10 million. So if I can make a million online, why do I need operate a $10 million newsroom, especially given the greater efficiencies of online publishing?

Businessweek, as a print magazine, is all about the last 5%. That is to say, the finalising, careful editing and re-editing, and re-editing again, the intricate design decisions, and the polishing. It’s the last 5% that keeps 400+ people employed. But the tragedy is, that despite the historical value of this type of approach, it just doesn’t matter that much anymore. Only 16% of Businessweek’s online readers viewed original Businessweek content (the stuff that really costs). The rest looked at slideshows (45%) and other content aggregations. That’s incredible. And it underlines the business case for changing the way major publishers create content.

As Clay Shirky wrote:

“If the old model is broken, what will work in its place?” To which the answer is: Nothing. Nothing will work. There is no general model for newspapers to replace the one the internet just broke.

The new owner of Businessweek (if it ends up being sold), would be wise to:

• Push up the print cover price, to improve profitability.
• Continue moving the print version to provide analysis and in-depth reporting that is separated from the fast-moving cut-and-thrust of news publishing.
• Keep building the digital strategy, supplementing original content with aggregations and reader-created content, pushing out via multiple channels, engaging readers with social elements, and publish for the ‘audience of one’ using personalization methods.
• As the most fundamental point, take a step back and plan the staff requirements from scratch. Everything that can be done by the crowd, the audience, technology, other complementary or even competing services, should be done those ways. And everything that doesn’t add tangibly to the bottom-line, must be ignored in the first instance.

The last one about staff costs will be especially painful for all concerned. But it is the only way. Whilst mainstream media stood back and criticised new publishers such as Techcrunch for not having high enough editorial standards, or not providing enough original thought, it is now the turn of the growing ranks of online-only publishers to say, “One word, two syllables: profitable” (yes that’s an Office reference, not a typo…). Oh and growing like a weed. And not drowning in debt obligations. And hiring new staff.

The basics:

Clay Shirky explaining the desire of news audiences to share content:

When a 14 year old kid can blow up your business in his spare time, not because he hates you but because he loves you, then you got a problem.

Jeff Jarvis speaking about his “link economy”:

We need to do what we do best and link to the rest.

Respected venture capitalist Fred Wilson weighs in on the news issue:

Monetise the audience, not the content.

Kevin Kelly follows this statement about online news by listing what can’t be copied:

When copies are free, you need to sell things which can not be copied.

Paidcontent explains the difficulty of marketing atomised content:

People will argue that the scrapers create value by pointing to many obscure stories that captured the imagination of linkers and got unexpectedly high traffic for a very obscure site. Fine, but was that site able to monetize the jump in traffic? And, how likely is that site to create a sustainable business by consistently winning a surfing game of serendipity?

The business model:

Clay Shirky says newspapers are missing the point:

The newspaper people often note that newspapers benefit society as a whole. This is true, but irrelevant to the problem at hand; “You’re gonna miss us when we’re gone!” has never been much of a business model.

And underlining the severity of the problem, Clay Shirky writes:

Round and round this goes, with the people committed to saving newspapers demanding to know “If the old model is broken, what will work in its place?” To which the answer is: Nothing. Nothing will work. There is no general model for newspapers to replace the one the internet just broke.

The Future of Journalism blog critiques the Associated Press (and other newspapers’) stance:

The business plan, then, is to “mercilessly sue” the people who are giving your customers, former customers and potential customers what they want. And, in this confusing new-media world, many of the people you will be mercilessly suing will be your customers, former customers and potential customers.

Writing in a different post on the same site, King Kaufman jokes:

“Good journalism takes time and money. Having people work all hours to cover, edit and package the news is expensive. Basing reporters throughout central Ohio and in Washington costs money. So does covering sporting events across North America. And employing world-class photographers and artists comes with a price, as well.” Holy smoke, dude. You need to come up with a business model!

Paid content:

A professor at Boston University and research scholar at M.I.T., Marshall W. Van Alstyne writes:

Putting micropayments on news is like putting tollbooths on an open ocean. Internet users, awash in a sea of information, will avoid new barriers by navigating around them. And frankly, the interests of a free society are rarely served by building barriers between the people and their news.

On the topic of micropayments, Clay Shirky says:

The word ‘micropayment’ is a trope for desperation, entering the vernacular of a given media market only after threats to older models become visibly dire .

Summing up his thoughts on why ‘free’ is a stable strategy, Clay Shirky writes:

In a regime where most of the participants are charging, freeing your content gives you a competitive advantage. And, as the drunks say, you can’t fall off the floor. Anyone offering content free gains an advantage that can’t be beaten, only matched, because the competitive answer to free — “I’ll pay you to read my weblog!” — is unsupportable over the long haul.

And a final word from King Kaufman:

“You get what you pay for” is not economics. It’s debatably wise consumer advice… We pay the doctor and the accountant because they have skills that are scarce and valuable, something that cannot be said about the content of almost all newspapers and news Web sites. This is not even high school economics. Stop being willfully stupid about this point, newspaper guys.

So – just click through to http://platform.idiomag.com/mediafuture and enjoy! We have also created an RSS feed to aggregate these feeds into one.

Note: I’ve now updated the feed bundle to contain three more feeds, listed below.

- Open Salon’s Future of Journalism

- Rich Yudhishthu’s Brown Hornet

- Josh Young’s Networked News