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Economy

Half and Half

As of today, there are six months left in the year. Half of the year is gone, for those glass-not-quite-full types. Some say the glass is just too big. But however you see our worldly vessel, the question is what you do with what remains.

It feels sometimes like we’re in a worm hole, doesn’t it, whizzing into new dimensions without quite getting our bearings in the last one. We suddenly are expected to communicate almost constantly with emails, Tweets, blogs, texts, phone calls and even face-to-face conversations. How can we keep up — plus, you know, work and live real lives too.

Every innovation has always had a past-due date, but those dates are getting shorter and shorter. If you don’t replenish by improving your skills, increasing your reach, building your customer base or otherwise growing you go stale. Curdle up and die.

Businesses (including entrepreneurs who have come to see themselves as “brands”) need customers, which means they need marketing communications that put rapidly developing information technology to work for them. (PubArts of course can help you with that… just saying.)

Here’s the tricky thing with progress, though: the better we do, the bigger the problem we make for ourselves because expectations grow faster than the ability to deliver. As Nicholas Rescher wrote in Unpopular Essays on Technological Progress: “Progress produces dissatisfaction because it inflates expectations faster than it can actually meet them.”

It’s a phenomenon that extends to our personal lives and even to political order. Harvard scholar Samuel Huntington did groundbreaking work on the paradox of increased unrest in backward societies emerging out of poverty – the progress itself creates higher expectations that can scarcely be met, leading not infrequently to bloody revolution.

So welcome to the restless new world of 24/7 communications. The more that is technologically possible, the more that is expected of you, even though you were perfectly happy the way things were. And if you can’t or won’t get with the program, your competitors are more than happy to emerge from the encroaching darkness to help themselves to your lunch. Half full or half empty: just drink it up and pour yourself another.

Welcome to the Fourth World

Isn’t it wonderful that the owners of Associated Content are selling their company to Yahoo for a reported $90 million? That’s “wonderful” as in: I’m full of wonder and amazement how it has come to pass that huge numbers of desperate people are willing to work for (almost) free in order to further enrich a brazen few.

Associated Content’s 380,000 freelance contributors are paid close to nothing for providing what the company calls “a broad array of passion points” — with passion being defined as topics that Google has determined are popular search terms (and thus honey to advertisers).

Journalism and professional writing were never great gigs, money-wise; lucre has lured few into the trade. But the Internet age has really sharpened that point. Consider multi-millionaire Arianna Huffington, whose Huffington Post is supposedly worth hundreds of millions of dollars — and yet doesn’t pay many of its contributors. Or Examiner.com, which is owned by multi-billionaire Phillip Anschutz and doesn’t pay its 300,000 contributors much of anything. Or Demand Media of Santa Monica – another outfit that claims $200 million in ad revenue — and demands its contributors give up all rights to their work in exchange for an average $15 an article.

The saying used to be the freedom of the press belongs to the man who owns the press. Fair enough, and in this electronic age we can all own our own press – we can be masters of our own domain name. But really, why do people exchange their time and skill for pocket change just so millionaires and billionaires can get richer? Yet that’s essentially the business model. It works because the global Internet — the same phenomenon that has made every one a potential publisher — has gutted traditional media employers and empowered mass purveyors of “crowd sourced content” and their advertisers.

If you’re the writer, you might do it because you need the experience or the contacts or the electronic equivalent of “clips” (work samples). If you’re the proprietor, you do it because you’d be a fool not to. After all, why not encourage educated, talented, articulate people to work for free? Who needs Bangalore when you can get Third World labor in Santa Monica? Let’s call it the Fourth World, replacing what we once knew as the Fourth Estate.

Trying to Make Journalism Pay

The upcoming New York Times Magazine features interesting examination into the entrepreneurial exploits of Apple. Not that Apple. Sam Apple. The journalism entrepreneur.

http://www.nytimes.com/2010/05/16/magazine/16Journalism-t.html?ref=business

With traditional media outlets facing bankruptcy and yet plenty of people wanting to be professional journalists, Mr. Apple smelled opportunity. The 34-year-old former interactive media director launched The Faster Times last July. The idea was to counter the proliferation of amateurishly produced blogs with a staff of trained journalists paid not in salary but by 75 percent of the revenues from the advertisements placed next to their articles. Contributors to this capitalist collective would profit according to the market’s value assessment of their individual work.

Of course, in this set-up, who covering Bolivia would turn out to be less lucrative than covering (or uncovering) Jessica Simpson.

American journalism has always relied on advertising (80 percent of revenues for newspapers). The thought was that vast online audiences would deliver vast advertising sums. It didn’t work out that way, because there is vastly more content competition online and ads sell for a small fraction of their print cousins.

True/Slant. five employees and 300 part-time contributors delivering “entrepreneurial journalism” to a million readers a month,

True/Slant reduces costs by eliminating old fashioned editorial hierarchies and making its contributors the sole “programmers” of their content. “Newsrooms today are high-cost, inefficient content-creation operations that will not be supported by advertising revenues in the digital world,” Dvorkin tells the Times. “It just won’t happen.”

True/Slant’s low-cost newsroom churns out around 125 pieces of content a day, hoping to pick up pennies and nickels from online PPC advertisers.

Other revenue models: a generous benefactor like The Daily Beast has in Barry Diller; NPR’s nonprofit model; Politico’s paper version. And that old standby, subscriptions – which so far only the online Wall Street Journal and Financial Times are working with success. (The New York Times has just announced a paywall going up in Januay 2011.)

Examiner.com, owned by the billionaire Philip Anschutz, generates more than 3,000 items per day from 36,000 local contributors, who are paid about 1 cent per page view.

The Huffington Post, the most successful of the new breed, boasts 70 salaried editorial staff members and 6,000 uncompensated bloggers who churn out 500 items a day. According to Nielsen Online, it gets more hits than the online Washington Post and is among the top 10 current-affairs sites,

True/Slant contributors are paid a monthly retainer and bonuses based on how many people read their articles. Most writers make a few hundred dollars a month if they hit their traffic targets, and a few big names like Matt Taibbi make more. The company isn’t profitable yet: An individual article is worth only $10 to its bottom line.

Started in July 2009 at a cost of $20,000. It soon had a monthly audience of around 200,000 readers, according to the tracking site Quantcast. Revenues that were coming in from Google AdSense, gave writers $5 to $75. Pretty crappy, in other words. No wonder then that many of the original FT contributors moved on. Mr. Apple continues to experiment with payment models.

Web start-ups have a failure rate between 70 and 90 percent. But even with those Darwinian stats, a sustainable business models is likely to emerge.

Music Marketing Mayhem

“For the first time in 50 years characters in rock and roll really don’t stand for anything. Music has become more manufactured than a Ford Focus. The biggest movement out of youth culture today is the campaign against drinking bottled water. That’s a sign of a society that has too much free time. Or maybe too much water.” – Bob Guccione Jr., founder of Spin magazine, in Forbes online (5/03/10)

Businessweek (Re)Blooms

When Bloomberg LLP purchased hoary old Business Week magazine from McGraw-Hill you could be forgiven for wondering what they were thinking. The multimillion dollar price tag may have been mere pocket change to the maker of ubiquitous and highly lucrative financial data machines. But still, why bother?

After all, Washington Post Co. is jettisoning Newsweek after nearly 50 years of ownership and a recent complete redesign, because it can’t make the property pay.

Now called Bloomberg Businessweek, both the print and electronic versions of the specialty publication have undergone less of a redesign than a re-imagining. And therein lies the promise of its success.

From it’s very name, it’s clear that the reborn media property is part of a new family and new strategy — the new owner  is the brand, and businessweek is its extension.

It’s a larger and more complicated media property now, packed with information packaged all sorts of ways, serving distinct groups from traders to cultural zeitgeistists. There are short, snappy pieces along with narrative features (Meg Whitman on the campaign trail, municipalities deep-sixed by sophisticated financial trades, etc.), investigative pieces (former Lehman CEO Dick Fuld’s perjury, for-profit college scams), and continuation of special areas of expertise (for instance, the importance of design to productivity).

There are lots of moving parts to manage, so Bloomberg’s strength in low-key, by-the-book management will come in handy. In contrast, other recent attempts to reinvent the business magazine such as Conde Nast’s Portfolio failed, in part because of editorial/managerial temperament.

Bloomberg’s challenge (as with whoever ends up owning Newsweek) is less to make print relevant in the electronic age than to revitalize a trusted (and therefore valuable) brand so that it nimbly adopts new technologies to reach varied audiences in varied ways.

Check it: http://www.businessweek.com/http://www.businessweek.com/