The NAA’s (secret) meeting

May 30th, 2009

Newspaper execs gathered in Chicago this week in a not-so-secret meeting to discuss their mutual problem — a collective southbound bottom line. Staci Kramer has an excellent summary including information from Steve Brill of Journalism Online, the group of former media executives trying to solve the “problem” of how to monetize online content. Brill’s group has a model that they’re trying to sell, and the newspaper people at the meeting were eager to hear all about it. According to The AP, the meeting was called “Models to lawfully monetize content.”

The problem, from my perspective is enormous, because the disruption that’s killing legacy media isn’t about content, it’s about advertising. The assumptions of any content play are that its value is so great that expensive, adjacent advertising will support it and that the mass attractive to advertisers can be created through scarcity. Neither of these assumptions is viable online, and the real problem is that both must be present for significant revenue to be realized.

Advertisers don’t need mass anymore, because the Web efficiently allows them to directly target potential customers in a variety of ways. Gordon Borrell has a great post today (Are We NUTS?) on why legacy media companies don’t believe the size of his revenue projections at the market level.

With the Internet, however, you can’t fathom the universe of companies and individuals selling things like email advertising or search advertising or banners. In a lot of cases, they aren’t even companies, but individuals who don’t have business licenses and thus cannot be tracked at all for their “ad revenue” receipts.

The amount advertisers are spending is truly stunning, and much larger than most people imagine. Those who understand the true breadth of opportunity are more likely (in my humble opinion) to get a larger share than those who underestimate it.

News content online is a ubiquitous and increasingly commodified community, and attempts to restrict access so as to create scarcity will only result in the isolation of those who need most to be a part of the discussion, professional journalists. If you think newspapers will be able to restrict ANY reference to articles they publish, I’ve got some oceanfront property in Arizona that I’d like to sell. And even if they could accomplish such a monumental task, the disruptions in advertising will continue make the model of ad-supported content increasingly problematic.

The newspaper industry is obsessed with an old model, and rather than trying to fit its square peg into the round hole of Media 2.0, it makes much more sense to focus our attention elsewhere. We should nurture our legacy products as best we can, but we simply must separate our ability to make money from our dependence on the content we create.

The key to that is in defining, understanding and developing the Local Web.

Posted in Advertising, Disruptions, Media 2.0, Newspapers, Reinventing Local Media | No Comments » |

Bunnies in the back yard

May 30th, 2009

Karen was mowing her back yard this week and discovered a nest of infant cottontails. There are six of the little guys in a small hole in the ground that the mommy covers with fur after each feeding. She shows up a couple of times after dark, and the babies just sleep and grow during the daytime, warmed by the sun’s rays. We found this wonderful site, rescuedrabbits.org, that gave us all the information we needed to enjoy the little fellows without interfering in their growth. Rabbits are very common in Karen’s Frisco neighborhood, but this kind of thing doesn’t come along every day, so here are a couple of photos and a little clip to show you our bunnies in the back yard.

Posted in Uncategorized | 1 Comment » |

Bitterness: victimhood gone to seed

May 29th, 2009

So the rapier sharp minds of the American Psychiatric Association have identified a brand spanking new ailment: post traumatic embitterment disorder, PTED. You’re pissed off, it’s a disorder, because, well, we all know that “normal” people aren’t pissed off. The LATimes article quotes the German doctor who “discovered” the malady as saying that a guy who snaps and kills his family may be suffering from this. I can see Jack McCoy rolling his eyes on an episode of Law & Order.

The shrinks are working on a treatment, but I’ll save ‘em a bunch of trouble: forgiveness.

That’ll be 5-cents, please.

Posted in Culture, Just Plain Fun Stuff | 1 Comment » |

Be careful what you accept

May 28th, 2009

It was January of 2000, and I was the CEO of an Internet start-up company struggling to raise money in Huntsville, Alabama. We were part of a high-tech business incubator in the community, with access to angel investors and lots of free advice.

This day, we watched live coverage of the merger of AOL with Time Warner, in what was to become the poster child of the bursting bubble that, of course, we hoped would just keep on going. I remember a few things about that day. As a guy running a Web business back then, I was always stunned when businesses that were losing money were rewarded. I just couldn’t do the math, and that included incredible valuations for companies, including AOL. Here was Time Warner, a prosperous film and entertainment empire with a valuation of $120 billion merging with AOL with a valuation north of $160 billion. How could AOL, in just a few short years, be worth more than Time-Warner, I wondered.

I also remember very clearly this statement by then Time Warner CEO Gerald Levin: “The market valuations in the Internet space I accept, because I think something profound is going on in this century.”

Later that week, we had a guy from a venture capital company come to the incubator to answer questions of the various tenants. I asked if he’d seen the press conference announcing the merger. When he said yes, I repeated that statement by Levin and asked him to explain what it meant. The guy said something about the old world giving way to the new, and I just drifted off. One week prior to our first offering, the bubble burst and with it went our hopes of ever getting an outrageous valuation.

I would think that of all the things Mr. Levin ever regretted in his life, it was that one statement of acceptance. Blue smoke and mirrors; that’s what it was. Levin wasn’t alone, however. Greed has a way of blinding even the sharpest of eyes.

The rest, as they say, is history, and I wish the new AOL well. I only hope they don’t destroy the anti-portal strategy of their MediaGlow unit has built in attempts to resuscitate the AOL brand, which in the opinion of this observer, is f-a-i-l spelled sideways.

Posted in Culture, Technology | No Comments » |

The Web’s Widening Stream

May 22nd, 2009

Here is the latest in my ongoing series of essays, Local Media in a Postmodern World.

One of the things I try to teach clients is that the metaphor of a Web “site” is misleading, because nobody actually “visits” any thing or any place. The code that comprises the back end of the Web talks to individual browsers on desktops, laptops or mobile devices. So everything about the Web flows TO THE USER, and not the other way around. This is useful in helping people understand that the serving of ads, for example, can be disconnected from the serving of content. But the newest iteration of the Web makes this kind of knowledge critical, for we’re moving from a static, destination-oriented Web to one that is real-time and alive. The new metaphor is “the stream,” and it will demand new strategies and new tactics for anyone wishing a seat at the media table in the future.

The Web’s Widening Stream

Posted in Continuous News, Disruptions, Media 2.0, Social Media, Technology, Unbundled Media | No Comments » |