Craig Newmark's Observations from the New Business Models for News Summit
Posted on 06. Nov, 2008 by David Cohn.
From Craig Newmark
Hey, this conference at CUNY two weeks ago is a really big deal, people getting serious about new ways of doing news, and paying for it.
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Interview with Tom Evslin
Posted on 05. Nov, 2008 by David Cohn.
Looking over attendees for the New Business Models for News Summit you might be confused as to why Tom Evslin was there. Many of the names you would recognize as professional life-long journalists or entrepreneurs. Tom, however, is not and has never been a journalist. But his sharp understanding of networks and networked economies is incredibly illuminating. His blog Fractals of Change, is highly regarded for that very reason. My questions to him in bold below.
Tom – as someone who is an outsider to journalism, what were your thoughts on the day and the situation journalism faces.
Let me start with the day. As a technology person who has been around industries that have changed because of technology and the Internet it was heartening to see newspaper people recognize the magnitude of the change and not justify the head in the sand approach. There was general consensus that this is not an-incremental change and incremental solutions won’t work.
In Telecom and other industries – there is generally denial until the very end. But for most people who attended there was a real awareness that change isn’t necessarily bad. It is disruptive but it can lead to journalist being more effective at their mission, provided they can figure out little details along the way like … how to get paid for it.
The bigger subject is a fascinating one because it probably is true that journalists have never had tools that are as good as the tools that are avaliable now. The ability to selectively crowdsource a story if you need to, or build a story as Jeff described it, even if the story itself isn’t the focal point, where you start something and pieces of it get filled in around it through the link economy, video can be mixed in and the man on the street is everywhere, etc. So the tools for journalists to do their job are fantastic. And the physical impediments are smaller than they have ever been. But the business model hasn’t been figured out – and journalists have to eat like everyone else.
I think we got far enough in the day to figure out that’s where we are – but we didn’t get much further. There are a few possible models for journalist and a few hyper-local models but there is a distance to go in terms of figuring out how they can make a living in journalism. It’s not a question of what value journalism can add – there is general agreement that credibility, editing, facts, and quality reporting are things that journalists bring that is of value- but it is hard to see how revenue can come from it right now.
Are there any direct comparisons or analogies from when you worked in Telecom?
Any industry under threat tries to cut its way to greatness. Particularly industries that have had a controlling situation for a period of time. When indsturies were essentially monopolies or they have a franchise it’s very hard for the owners or stockholders to realize the value is evaporating. Their first reaction is that these are temporary times and cutting back is a solution.
Often this is a good first reaction – because they were monopolies these companies typically have a lot of fat. But there comes a point where you can’t cut anymore. There is nothing left to cut and if you keep cutting the product gets damaged and its a downward spiral. That is Telecom, newspapers, and perhaps the car industry.
What’s different though? Related to this I think is a comment you brought up about the economics of Craigslist. That growth of a network is more valuable than high revenues per network node? So that if you charge as little as possible – but the network grows in size, it becomes impossible for others to compete. Is there a way newspapers could leverage that?
It’s maximizing your network by drawing out as little cash as you can until you are in a sailable position.
I’m just guessing here – this is just speculation because the answer is probably different if you mean local, regional, national or global.
It’s probably easiest to see where local news organizations, hyper-local in web terms, analogous to a small-town newspaper could achieve this status. I think we will fairly quickly find the model and tools wher ethe local site becomes an indispensable part of people’s lives and advertisers are eager to support it – because it has a consistent readership with identifiable demographics.
By making readers contributors (which newspapers have always done to some extent with wedding annoucements, etc), using the ability to crowdosurce when trains are late, where crime is, etc – the local sites like Baristanet can become an even more apart of people’s lives than the small-town newspapers used to be.
At that point in time – they won’t need to charge a lot for advertising because they will have a lot of it – and they will be in the Cragislist spot where they can charge so little it will be tough for competition to sneak in. A rival local newspaper will have real competition. But competition would be good because it would mean together they would figure out the proper economics.
I think there would only be one winner – at least until the winner gets sloppy. Because if one builds a good network in terms of people then there is not much sense in being part of the inferior network. If it’s as simple as traffic reports where you have 1,000 readers sending in updates and you have lots of people texting in so that site has the best traffic reports and somebody else starts up another network their site is going to be useless because nobody is on it – and why would anybody join it? It’s useless.
I’m not sure what this looks like at the regional national or global level. It’s hard to have a community if everybody reads the NY Times – the Times is doing an experiment with TimesPeople – where if you join the community you know what your friends are reading, etc – they are trying to be the host of a lot of little communities -because that is more interesting than worldwide – everyone read this article. So being a larger group that hosts smaller groups with an excellence at national or international coverage. That could work for NY Times WaPo organizations – but not many of those. They could be advertising supported if people integrated it into their daily lives.
I don’t know what happens inbetween at the regional level. I think it’ll be important because from a governance point of view – we need the information.
Last thoughts?
I’m optimistic – I think something will evolve because we have such a need for the information. People are interested – maybe cause there is more information or maybe because they are scared – but a positive thing for journalists is that there is this hunger if there is a business model for supplying it.
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Wrap Up- New Business Models for News Summit
Posted on 04. Nov, 2008 by Kye Shkymba.
Blogging: Kahil Shkymba
Steve Shepard poses the question; what is the best solution for a collaboration between the CSJ and Baruch’s MBA program. Unknown answers that there is no clear answer yet, but the discussion must begin.
Audience member emphasizes editors and development of such is the key to maintaining content viability, thus the key to the quality that will drive monetary streams.
Jeff Jarvis explores what came out of the conference. Survey of audience reveals that majority gained information from the conference, and that additional conferences should be held.
Comment on not paralleling workshops, adding younger professionals, non profits, people of color, etc..
Going forward: Jeff gives the final pitch to assist in raising the funds for the business incubator, and commiting to the development of the new business models. This is the urgent call for the survival of journalism and it is not being done. Encourages participation for the attendees, and states that this conference is the first step. The conference revealed the confusion of doing such, but reveals that the big job ahead is not the old model.
David Cohn comments on last years follow up of the conference and invites attendees to contact him to contribute to this years follow up blog.
david[at]spot[dot]us
Jeff Jarvis comments on bringing smaller groups together to get things done to get better results. Pick up free copy of the book ‘RUN’ on you way out. Let the wine flow! Too bad if you missed this, but we will be doing it again soon.
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Welcome the Information Valet Project – Bill Densmore
Posted on 03. Nov, 2008 by David Cohn.
The New Business Models for News Summit is actually the second in a series of events. The first “Networked Journalism Summit” included Bill Densmore who is now working on his own project trying to tackle the revenue issue.
(For those keeping track, that’s one video using Viddler, the other two using Vimeo and Blip. Have a video platform you want me to try? Let me know).
I was able to get a brief chat in with Bill who has also provided a brief write-up below.
From Bill Densmore
Thanks for all your work on last week’s “New Business Models for News” summit at CUNY; I was unable to attend. But your on-demand video archives are a valuable fill-in.
I’d like your community to know about the Information Valet Project, which takes a cue from Jeff Jarvis’ advice to start building new business models. Our first summit to define and plan launch of the Information Valet Service is Dec. 3-5 at the new Donald W. Reynolds Journalism Institute at the Univ. of Missouri. We invite participants. (To register: http://www.ivpblueprint.org)
We’re pushing a fairly specific notion of how to build a shared-user network with a revenue model baked in — the revenue model is similar to the sort of reverse syndication which Jeff talks about, and embraces the networking concepts outlined by Tom Evslin at CUNY.
“Blueprinting the Information Valet Economy” is a strategy summit designed to blueprint the law, ownership, management, marketing and technology of a shared-user network for user-centric demographics, privacy-protected purchasing and advertising exchange and compensation.
Evslin noted that the former newsPAPER industry — because of its unique content and relationship with 50 million customers who pay for information daily — is in a unique position to provide the content seed corn needed to jump start a network business — if it comes together on a platform and protocols.
We’ll put forward fairly specific ideas for doing this forward as a point of departure — and expect to hear modifications. We’ll end up after 2-1/2 days with a commitment to form a collaborative that will move forward with whatever is the consensus approach.
I hope there will be other events like IVP Blueprint — at CUNY, and elsewhere — which advance specific projects for sustaining the parts of journalism which contribute to participatory democracy.
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Next steps for news
Posted on 03. Nov, 2008 by David Cohn.
Thoughts about the New Business Models for News Summit from Boss Jarvis.
After letting the work of the New Business Models for News Summit at CUNY sink in, I think we need to convene a working group from each of the discussions at the summit to move to the next step and build at least one concrete model.
When I stopped in the session about the reorganized newsroom, they pleaded for help as they continued to debate whether to cut what exists today or build from the ground up. It was my fault as I didn’t give them a specific task. I should have learned from the Economist’s Project Red Stripe and from a Davos session on innovation last year: Innovation springs from solving a problem — a specific problem, not the grand problem of the future of news and society.
So I proposed a problem to solve: What if a city, say Philadelphia, loses its paper tomorrow. What would you build in its place to serve the community? The group went to town. Rather than trying to hack at the old, they build something new.
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Next steps: One model
Posted on 03. Nov, 2008 by Jeff Jarvis.
After letting the work of the New Business Models for News Summit at CUNY sink in, I think we need to convene a working group from each of the discussions at the summit to move to the next step and build at least one concrete model.
When I stopped in the session about the reorganized newsroom, they pleaded for help as they continued to debate whether to cut what exists today or build from the ground up. It was my fault as I didn’t give them a specific task. I should have learned from the Economist’s Project Red Stripe and from a Davos session on innovation last year: Innovation springs from solving a problem — a specific problem, not the grand problem of the future of news and society.
So I proposed a problem to solve: What if a city, say Philadelphia, loses its paper tomorrow. What would you build in its place to serve the community? The group went to town. Rather than trying to hack at the old, they build something new.
They calculated the likely revenue Philadelphia could support online and then figured out what they could afford in staffing. Instead of the 200-300-person newsroom that has existed in print, they decided they could afford 35 and they broke that down to include a new job description: “community managers who do outreach, mediation, social media evangelism.” They settled on three of those plus 20 content creators, two programmers, three designers, five producers (I think they were a bit heavy on those two), and — get this — only three editors. (Which led to much discussion in the final plenary of the day, which I address in the post below.)
That was real progress. Usually in the newspaper industry, this discussion comes after the cutbacks occur as papers then try to figure out how to cope with what’s left. This group of edit and business and money people bravely built from the bottom up, relying on few assumptions about the past.
Next, if time had allowed, we would have taken the newsroom group next door to the network group, which was foundering a bit, trying to figure out how to apply networks such as Glam‘s to this challenge. They, too, didn’t have a specific problem to solve. But the newsroom group would have brought theirs: How could 35 journalists possibly serve Philadelphia as 200-300 had? I see one option: with the help of networks of independent agents working collaboratively. So let’s figure out how those networks would operate in terms of content, technology, revenue, education, branding, and so on.
Then we could go down the hall to the group working on new structures for news organizations: the disaggregated news company as presented earlier in the day by Edward Roussel of the Telegraph and Dave Morgan, ex of Tacoda. They also talked — as everyone did through the day — about the need for a drastically lower cost structure for news organizations (see Edward’s chart).
Next stop: The group working on public support to see what slice of journalism might be underwritten by the community or foundations. It wouldn’t be much but ProPublic, David Cohn’s Spot.us, and Charlie Sennott’s GlobalPost are trying to prove that the public can at least help.
Last and more important stop: revenue. Fred Wilson, leading the discussion, summed up its discovery in a tweet: “clickable will sell joe the pumber a text ad that $goog will route via outside.in geotag to the boston herald.” (Translation: Clickable sells Joe an ad on Google, which will appear on a local story on the Herald site thanks to Outside.in’s ability to understand the geography of articles and target appropriately. Moral to the story: No one is any longer going to own the market alone. Revenue, like reporting, will be collaborative.)
If you add up the work of the groups, you start to see a shape for new news. But there’s much more work to be done to make it concrete. If we take the work that the groups began and bring it to the next level with a clear problem to solve — e.g., replacing a metro newspaper — then I think we will begin to see new models, new ways to organize news companies, new ways to produce news, new revenue opportunities, and new relationships with the community take form. And this, in turn, could yield a methodology and attitude to create more new models.
Under the auspices of the New Business Models for News Project and Center for Journalistic Innovation at CUNY, I hope we can bring in MBA students to help create financial models. We would share these models and the discussion that builds them openly.
We at CUNY can imagine no more urgent work in news: creating the means to support it.
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Notes – and what's next
Posted on 03. Nov, 2008 by Jeff Jarvis.
A few of my notes upon reflection about the New Business Models for News Summit at CUNY:
* A few days after the conference, David Carr in the New York Times piled on the lamentations about more layoffs and cutbacks in the news business. On the Media continued the dirge a few days after that. There’s no news here. The industry is shrinking. We already know that.
There’s news in reporting on people who are trying to do something about it and create new models and enterprises for news. Those are the folks we had at the conference.
* A star among them was our own David Cohn, co-organizer of the conference, as he presented Spot.US, his Knight-Challenge-funded startup to create an infrastructure for readers to support reporters doing stories. David’s elevator pitch was a model for all my entrepreneurial journalism students. His enthusiasm, inventiveness, and ability to see opportunities where others see gloom was a model to the executives in the room. What I loved best was watching executives and investors from very big companies stuffing David’s pocket with their business cards. Who says the news business is dying? If you know where to look, it’s being reborn.
Other new models and views of news included:
> Charlie Sennott presenting GlobalPost as a means to support 70 freelancer correspondents in 53 countries around the world submitting stories and also turning their journalism into a process with their audience;
> Upendra Shardanand of Daylife and Scott Karp of Publish2 [disclosure: I have a relationship with both companies] presenting their infrastructure for the link (vs. the content) economy of news;
> Michael Rosenblum showing how training citizens in video can become a source of both content and revenue;
> Mark Josephson of Outside.in on a structure of organizing local content;
> David Chase of NextNewsNet on a local ad network and Adam Bly of Science Blogs on a specialized ad and content network;
> Colin Crawford on the transformation of IDG from a print to a digital company;
> Adam Davidson of NPR talked about the creation of the Planet Money podcast there.
Late additions to the group included Debbie Galant, the monarch of the hyperlocal bloggers at Baristanet, who talked about running a business on the scale of the old independent bookstore, and Rachel Sterne, founder of citizen-journalism platform GroundReport.
* I was delighted that the amazing group we were lucky to bring together had moved past the old rivalries: business vs. edit, new media vs. old. I was also quite relieved to hear a universal sense of urgency about the need to find new means to sustain journalism. There isn’t a minute to waste.
As a result, we saw editorial and business people entering into frank conversations we don’t often hear, willing to reset assumptions and build new models. Included in that was a general acceptance that the cost structure of the news business is way too high and has to be cut. This slide from the Telegraph’s Edward Roussel resonated strongly in the room.
Roussel also said: “If you’re a newspaper group, your technology sucks.”
Just as Roussel was blunt and frank so was his fellow presenter on the topic of the disaggregated news organization, Dave Morgan, who quoted Gary Pruitt, CEO of McClatchy, from only the day before. Pruitt said: “We believe that the majority of the decline that we are currently seeing is cyclical and therefore temporary.” After heaping caveats of praise on Pruitt as an executive, Morgan called bullshit. Exactly so. We need tough, honest talk now.
* I was interested in seeing a conflict arise at the end of the day — one of the few, actually — on the relative value of content creators vs. editors. No one in the room would say that both aren’t valued and needed. But when push comes to shove with spare resources, there is a difference of opinion on what added value really means. Some put maximum resource into creating content: reporting. Some insist on the need for editors to create order, to correct and vet, to curate, as we say these days. The disagreement is only one of degree.
* I wish I’d had more people from other industries. When Tom Evslin got up to give his very good primer on network economics, he made a point of saying that he was not a journalist. After the conference, someone from an international technology company said he thought the people in the room were “not ready to make the leap” (perhaps so, but he should have heard similar folks a year ago; the change is striking). At Davos last January, I ran a session between news executives and tech executives in which the latter excoriated the former for throwing in the towel and convinced them that there was fight left in the news industry. The news business is, ironically, insular and it needs to hear that perspective. I also should have had more voices from women, bloggers, and our international participants. We could have filled two days with good discussion but decided, two weeks before an election, that wouldn’t have worked.
* Eric Stein of Google gave us some stats that show where the potential is. He said there are 23 million small businesses in America, six million of them with one or more employees. That is the new population of advertisers who never could afford newspapers. Though as I learned when I visited Gannett’s lab a few days after the conference, those businesses don’t necessarily operate with the same needs and assumptions as present newspaper advertisers and it would be a mistake to try to impose those practices. Stein also said that newspapers reach only 20 percent of advertisers in a market. In that other 80 percent lies much of the hope for the future of local news.
* I didn’t write down who said it but I wrote down this thought: We may want to reframe journalism not as an information business but as community-building.
* At the end of it all, we asked the participants to charge CUNY with next steps as we work to build the Center for Journalistic Innovation and raise money under a matching grant from the Tow Foundation. Among those tasks:
> Develop a baseline business model to provide a community with journalism. (See the post above; I agree that that is job 1.)
> Share best practices and lessons, including mistakes, from various countries. (That will be the main job of the New Business Models for News project in the center; we have the remainder of the MacArthur Foundation grant that funded this meeting to start that work and we just received a grant from the McCormick Foundation to continue it but we need to raise more.)
> Develop new models in detail to share with the industry. (This, too, will be the work of the New Business Models for News project.)
> Develop quantitative research on community needs. (I just spoke with the Knight Commission and found that they are working on that.)
> Collaborate with our business school to better equip journalists with business knowledge. (That’s my hidden agenda for teaching entrepreneurial journalism at CUNY. We’re looking at doing more.)
> Discuss curation in a journalistic context. (I just spoke with a museum curator about creating a symposium to do that.)
> Work on an infrastructure for news organizations to share and monetize original content. (Work on that began that very evening with another group meeting).
* We had an incredible group of people at CUNY, which is a testament to their sense of urgency to work on the business of journalism. I want to thank them all and also thank the MacArthur Foundation for making this meeting possible and the McCormick Foundation for enabling us to continue this work.
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Interview – Dave Chase and Experimenting in the Revenue Side
Posted on 31. Oct, 2008 by David Cohn.
May the post Summit interviews continue.
This one with Dave Chase from NewWest and Sun Valley Online. (Learn more about NewWest from this interview with Jonathan Weber from the 2007 Summit)
[Disclaimer: The audio isn’t perfect. This is interview #2 via Skype. I’m using iShowU to record my screen. I will soon find a way to get the interviewee’s audio higher quality. In the meantime, bear with me. Feel free to ask Dave Chase follow up questions in the comments – I’ll track him down to respond.]
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Sustainability: Reporting back from the New Business Models for News Summit
Posted on 30. Oct, 2008 by David Cohn.
[From Chris O’Brien with the Next Newsroom Project]
The biggest challenge the news industry faces these days is creating a new business model to sustain journalism as we move forward. Digital tools have created enormous opportunity to tell stories in new ways and forge deeper connections with our communities. But once you get past that, the discussion always circles back to one question: How are you going to pay for it?
On Oct. 23, the CUNY Graduate School of Journalism gathered 120 folks at its mid-town campus for the New Business Models for News Summit. The event was hosted by Jeff Jarvis, associate professor and director of the interactive journalism program at CUNY who blogs at Buzzmachine.com.
CUNY’s j-school is fairly new, and just moved into a new facility a couple of years ago. CUNY has received a $3 milllion grant to create a Center for Journalistic Innovation. One of the goals of the summit was to help CUNY further define the mission of that center. CUNY needs to find another $3 million in matching funds.
By the end of the day, we probably had more questions than answers. No surprise, right? If a solution could be found in one day, it probably would already have been discovered.
I was blown away by the caliber of folks in the room that day. The conference kicked off in the morning with a series of lightning presentations. The full schedule is here. There were too many presentations to discuss them all. Most folks had five minutes to talk, and usually I was left with about a dozen questions I wanted ask. I’ll probably do that via e-mail over the coming weeks.
My main takeaways from the day were far different what I would have expected going in. I’ve been in search of new ways to generate revenue to maintain the newsrooms we have (or some version of them). But the big lesson of the day was to focus on the other side of things: Cost. There was widespread agreement across the day that cost structures of newsrooms need to be dramatically lower. But before you think I’ve become a cheerleader for the rampant corporate cost cutting plaguing us, hear me out.
The cost reductions being discussed at the summit were aimed at being “smarter” than the strategies we’ve seen. This needs to be done in a different way than most places are trying to do it now. The content creators are the last things you should be cutting, not the first.
Second, at the same time costs are being reduced, the newsroom needs to be transformed into a network to leverage more out of what remains. As Jarvis likes to say, “Do you what you do best, and outsource the rest.” The focus of the newsroom in this new era needs to be more outward focus than inward focus.
Jarvis kicked things off with an overview of the day. He sees news as being distributed, rather than centralized. Instead of going to the news, people expect the news to come to them. “If the news is important enough, it will find me,” Jarvis said. “That’s a whole new world view.”
“Do we even have a newsroom?” Jarvis asked. “Do we need the room? What do we need it for? Do we just need a network?”
Here’s his presentation:
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"How Joe the Plumber and Google saved News"
Posted on 29. Oct, 2008 by David Cohn.
Opportunities:
1. Local – While we didn’t get to the local discussion until the end, this was clearly seen as the biggest opportunity. And not just because we want to help Google’s Eric Stein hit his numbers. The reselling of AdSense by news brands who have local salesforces is a substantial opportunity. Businesses like Reach Local are ready to cut out local newspaper salesforces. And, there’s an opportunity even if you don’t have a salesforce to work through businesses like Clickable to help Joe the Plumber reach the local audience through the newspaper’s site.
2. Data Sales. It’s already a vibrant business for many publishers. Whether it is through selling data to providers like Tacoda or Ascerno, using other data services to create B2B or local services, news publishers are sitting on top of a meaningful amount of data that can drive revenue.
3. Ad Networks, when managed right, are also an opportunity. When tied in with data, ad networks can unlock value that publisher otherwise can’t sell. Whether this is good or bad over the long term is still a question. Should sites follow the Washington Post and ESPN and cut out Ad Networks entirely? Many in the room felt that Ad Networks allow the best news brands to focus on selling their high-value inventory themselves while delivering extra monetization for unsold inventory. The other side of the argument – that Ad Networks create channel conflict and undermine brands – carries merit. Success comes from managing what inventory is given to Ad Networks and what isn’t.
4. The technology to create a totally effecient market exists today. While online ads are now part of a big distributed network where frequently the seller of the ad isn’t the publisher of the conent, the market is still inefficient. Only reselling AdSense has delivered on this promise. The other parts of the chain, including Ad Exchanges, are starting to gain acceptance, but are not yet easy for publishers to scale. In the future this will change and create more opportunities.
5. Smaller scale opportunities include: Subscriptions for specific high-value content, but not for general news; Branded content, but more of a niche solution; In Germany, Focus is directly selling products as well as doing lead generation; Virtual currencies may present an opportunity down the road; Video is an opportunity, but it’s comparatively small.
So, why isn’t this working?
Measurement. The lack of reliable metrics are holding growth back (note, this is a challenge for everyone in online advertising, not just news). This is an issue that lacks short-term solutions. But, incremental progress keeps being made and eventually a solution should emerge.
The challenge of creating a growth business inside of a mature business. For instance, objectively, reselling ad sense makes sense. But implementation has been tied up with internally slow decisionmaking and technical implementation.
The mindset of replacing print losses with digital presents a fundamental challenge. It doesn’t align with where consumer behavior is going to be. And, the timeline for building digital value doesn’t line up with the realities of the declining print business. Competitors by contrast, are able to focus on just scaling their digital businesses at their natural pace. News brands that solve this problem will be the big winners.
And now the list of ideas we came up with for further discussion: AdSense, Display, Online Video, Lead Generation, Direct Transactions/Retail, Conferences, Co-branded content, Subscriptions, Syndication, Data Mining, Product placement, Auction Model, Market Research, Licensing, Republishing web to print, Sponsored Feeds, Virtual Goods, Email.
