WEDNESDAY, MAY 14, 2008

IN THIS ISSUE:

GOOGLE LAUNCHES "FRIEND CONNECT." WHY YOU SHOULD CARE. | MYFOXCHOPPER, THE LATEST FROM STEVE BARON | THE DIFFERENCE BETWEEN THE LIVE AND STATIC WEB | $650 FOR NEWSDAY, HUH? | WHY DOWNLOADS ARE SO PROFITABLE

THE SOCIAL WEB CAN (AND SHOULD) INCLUDE YOU (Terry)
The unveiling of Google’s new "Friend Connect" program this week is very big news that must not be overlooked by local media companies as we work to become more web-centric. Friend Connect is the latest from Google’s "Open Social" project, which is designed to allow users to aggregate and take with them various important aspects of social networking sites such as Facebook. The logic is simple (and typical Google): the walled-garden approach to the Web is archaic. What’s needed is portability.

So as MySpace and Facebook duke it out to see who can gather the most users, Google says "let’s make it possible for people to take social elements with them wherever they go (if they wish)." To Google, the Web is the platform. To Facebook, for example, Facebook is the platform. This, Google argues, is limiting, so the Open Social project is a natural extension of the Google model.

Open Social treats elements of social networking like widgets (Google’s term is "gadgets") that can be moved anywhere. Software developers can use the "open" aspects of the project to create gadgets that can be used by anyone on any site anywhere. Friend Connect makes this possible, and Steve and I both feel local media sites need to jump in as soon as we can (see "THE DIFFERENCE BETWEEN THE LIVE AND THE STATIC WEB" below). Google is moving slowly with the project, they say, so they can study potential privacy ramifications, among other things.

Google provides the code, which can be embedded anywhere on your pages via iFrames (code that displays, essentially, a site within a site). When completed, users are able to interact with your content socially by inviting others within their established social networks into your site, ranking stories, sharing comments, and meeting new friends. Publishers who use Friend Connect don’t have access to the data involved, but that shouldn’t stop people from using it. In its introductory materials, Google concludes by saying "Everyone wins in a friend connected web:

• You, the site owner - Google Friend Connect gives you a snippet of code that, when put into your site, will equip the site with social features, including the ability to run third-party social applications. Moreover, it enables your visitors to log in with existing credentials, see who among their friends is already registered at that site. It also gives them one-click access to invite friends from their existing friends lists on other sites, such as Facebook or orkut.
• Your site’s visitors - Visitors no longer need to create a new account or develop yet another friends list just to use the social applications on your site. We create the infrastructure that allows one login to be used across multiple sites and the ability to reuse existing friend relationships that the visitor has already established elsewhere.
• OpenSocial developers - With Google Friend Connect, any website on the web can become an OpenSocial container. Their social applications can now run on social networking sites and anywhere else on the web that uses Google Friend Connect. By placing these applications on sites where users already visit, these application will be seen and used by more users more often.
• Social networks - With Google Friend Connect, social networks thrive as hubs of activity while giving their users more opportunities to bring their friend relationships to other websites while simultaneously bringing their friends and activities from outside the social network back in -- with people having the ability to publish their activities across the web into the activity streams of their social networks.

However, not all observers are impressed. Marshall Kirkpatrick of Read Write Web thinks the Google initiative simply buries social connections in a "dark little box" and dismisses privacy concerns along the way.

Google could have worked with other large companies and with the creators of these standards (some are in the Data Portability Working Group that Google joined, for example) to tackle the hard questions around data exposure, integration and privacy. Instead they are pushing their Open Social standard around in an iframe. Easy is very good, but co-operation could have come up with something better than this.

Kirkpatrick and others are also noting that the service isn’t widely available yet and that Google is limiting access in order to let others help them build it.

Still, it’s hard to argue with the essence of what’s taking place here, and Google’s involvement will accelerate the work of others in developing social portability. MySpace (Data Availability) and Facebook (Connect) are both trying to accomplish similar goals, but both want to be THE platform leading the charge. Google (again) takes a bigger view and says the Web itself is the platform, describing Friend Connect as a form of "social plumbing" for the Web.

And the message to media companies is clear: we need to be in this space in ways beyond providing simple content widgets that can be swapped and shared. We need to be developing gadgets under the Open Social standards, so that we can participate even beyond just bringing "social" to our sites.

After all, "social" is still largely "local," and that means opportunities beyond that which the big platforms currently provide.   <Link>

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INNOVATOR STEVE BARON STRIKES AGAIN WITH "AIRFOX LIVE" (Steve)
When you have a creative person in the shop, just turn them loose. You may wind up with something wonderful. Steve Baron at Fox Chicago is just such a person. He developed LiveNewsCameras.com earlier this year. It’s an impossibly wonderful collection of live streams from newsrooms around the country. Now, without taking a breath, he has come up with AirFox Live, a mashup of his station’s chopper feed with a Google map.

On AirFox Live, you can watch the chopper’s camera feed and follow it along a map in real time. For the really geeky, the map also displays airspeed, heading, and altitude. The site is "live" from 5:30 am to 8:30 am Central, and during times when the station dispatches the chopper to news scenes. Otherwise, the map shows us that the chopper’s at Schaumberg Regional airport, and the page has a nice live feed showing the downtown.

Steve uses the chopper’s GPS feed to enable the map tracking. And, just like Live News Cameras, AirFox Live has its own URL - airfoxlive.com. Smart.

Back in February, we wrote about Baron’s adventures in putting together LiveNewsCameras.com. What intrigued me most was this - Baron’s a meteorologist by training. It shouldn’t surprise me that a weather guy knows computers so well. Meteorologists usually have the best computers in the house. Baron works at Fox Chicago as the senior web producer, and fills in doing the weather. There may be other weather guys/web producers/developers in local TV. I just haven’t met them.

Among Steve’s many fine qualities is his humility about his work. I’ve tried like hell to compliment him personally, but he’s so darned nice that he is quick to point out he’s not in it for the kudos:

"I’m not sharing this stuff with you guys to make you think that I’m good at what I do - I’m doing it so you can show it to other people and get them thinking about how to make their newsrooms "work" in new ways. We’ve got a sponsor lined up for this page that will bring in good, web-only revenue. I hope one of your clients sees it, and figures out a way to make it (or something like it) work for them as well."

I’m sorry - did I bury the lead? There is a sponsor ready to go for this site - one that will bring in web-only revenue.

So not only is Steve trying to help improve the state of the local web, he’s also working with his team to bring in a buck. Steve says he hopes other stations will find a way to make something like this work. He’s talking about this new site, but it applies to the way he and his team are doing business. Innovative development, risk taking, thinking different and working with your sales folks...

Yep. That will fly.   <Link>

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MEDIA 2.0 101: THE DIFFERENCE BETWEEN THE LIVE AND THE STATIC WEB (Terry)
The early iterations of the World Wide Web were based on what technology and bandwidth could accommodate. Text was the thing, and, more importantly, that which could be offered on servers was static. In order for others to access what an author had published, users had to navigate to the server where the text was hosted. This is why a web browser is called just that. We had to "browse" the Web in order to find what we wanted.

This formed all of the early systems and applications of the Web. If you wanted to read the content of the New York Times, for example, you had to locate and literally "go to" the site provided by the newspaper, as illustrated below.

This is what birthed the portal website concept that is still practiced today by nearly every media company on the planet. Portals were just that: doorways through which browsers of the Web could find what they were seeking.

The tech community refers to this version of the Web as the "Static Web," because it does nothing except present content. The most important thing that media people need to understand about the Static Web is that content and how that content is presented (everything from the fonts to where it’s located on the page) are bound together. What the browser presents for you to see is exactly what’s contained in the underlying document (the code) that the browser reads, and it is stored that way on the server.

Media people like the Static Web, because it seems to duplicate the finished products that legacy platforms produce. Hence, the rules are somewhat similar, and this is evident in the way, for example, newspaper sites force people to read multiple pages in order to consume one story. It’s an old newspaper trick to expose people to ads.

When search came along, the portal model was disrupted, because people could bypass the doorway to get what they wanted, which prompted Caroline Little, then head of Washington Post Interactive, to declare that the portal concept was dead, because "people were entering through side doors." Search forced publishers to pay attention to internal pages, because it was the only way we could expose users to the other content that our portals offered.

None of this satisfied the tech community, and so was born the "Live Web." As illustrated below, the Live Web allows users to bring specific portions of a website to their browser instead of consuming the entire site.

The important thing to understand about the Live Web is that the content and how that content is displayed are separated, which means the content itself can be exported elsewhere. This has given rise to the customizable user experience such as iGoogle, MyMSN or MyYahoo! People want what they want WHERE they want it, and this is only going to accelerate.

Media companies don’t like the Live Web, because it disrupts their ability to monetize their content. Heretofore, most companies have declined to fully explore the Live Web, but that is going to change as we figure out how to monetize unbundled content.

The Live Web is the world of RSS, widgets and social networking, where a user can fully customize his or her own online experience. We may moan the loss of control over those who want what we create, but if we’re going to grow with the Web, we really have no choice but to participate. If we don’t, others — who aren’t bound to legacy media platforms and Media 1.0 revenue models — will take our place.

How will we generate revenue in such a world? Good question, but if the sustainable model was there, everybody would be fighting for a piece of the action. It’s not, however, but that shouldn’t stop us from playing in the Media 2.0 arena. Who knows? Perhaps your company will the one to create the model.   <Link>

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I’M NO NAYSAYER. NOW - WHAT’S THE DEAL WITH THE NEWSDAY PURCHASE? (Steve)
Maybe when you’re rich, you buy impractical stuff just because you can. The Cablevision-pioneering Dolans already have the NBA’s Knicks and the NHL’s Rangers. So why not a newspaper?

Otherwise, I can’t figure out why they thought it made any sense to buy a newspaper in this era for $650 million. In 2007, Newsday made $80 million on revenues of $500 million. However, Tribune, which is selling Newsday, reports that the paper earned revenues of $541 million in 2006, $574 million in 2005 and $615 million in 2004. So that’s a steady drop of $40 million in revenue a year, and an increasing percentage of losses annually.

In 1999, the paper had a circulation of 574,000. Right now it’s at about 380,000 and heading lower.

Would you put money in a startup with a profile like that?

Rupert Murdoch’s $500 million bid seemed high, but he did have a plan for consolidating print operations with his other New York-area papers. At least he was thinking about some efficiencies.

But a cable company going into the newspaper business at a time when media groups are spinning off their papers from their TV properties? I don’t get it. On May 1, when it still seemed as though News Corp. was going to land Newsday, the New York Times wrote:

"Analysts say the appeal is less clear for Cablevision (than for News Corp.)... But they say that as the primary cable provider on Long Island, Cablevision could offer advertisers combined print and cable buys and might be able to merge some administrative functions."

Does that strike anyone as having particularly enormous potential? Compared with the Murdoch plan, which the Times reported would save News Corp "tens of millions of dollars a year," it seems like a weak proposition.

Is there a hole burning in the Dolan family pockets? They just shelled out $496 milliion for the Sundance Channel. A quick look at the company’s stock price makes you wonder. On July 18, 2007, Cablevision (CVC) stock traded at $38.52.On March 18 - eight months later - the stock closed at $21.79. It’s currently in the $24.80 range. (And who’s feeling concerned now about rejecting the Dolans’ offer to buy back the company at $36.26 last October?)

It could be a vanity move. It has been suggested that the future of newspapers lies with wealthy local owners who will subsidize journalism and who care more about traditional reporting than they care about profit margins.

I love companies that take risks. Terry and I constantly lament the lack of companies that are are willing to invest in new ventures. So maybe Cablevision will do something really cool with Newsday. It is, after all, a TV company. It could turn Newsday into a real local media outlet for Long Island. It could establish a network of websites, video channels, advertiser channels and concepts yet to come in the years ahead.

I hope that’s what this move signals. I hope Cablevision is thinking beyond the paper. And I certainly hope it’s thinking beyond cross-selling the paper with cable.

Otherwise, we can expect the deal to perform about as well as the Knicks and the Rangers.   <Link>

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APPLE CHANGES (i)TUNE FOR HBO, OFFERS VARIABLE PRICING FOR PROGRAMS (Terry)
Never say never. A deal with HBO and iTunes includes variable pricing for downloading TV shows, something Steve Jobs has steadfastly refused to do until now. Episodes of Sex in the City will cost the usual $1.99, but if you want an episode of The Sopranos, it’ll cost you $2.99. There are many who say this was inevitable, but Jobs let NBCU walk over a similar issue.

This is now likely to set in motion a wave of price increases for downloading shows via iTunes and a whole slew of program creators knocking on Jobs’ door — people who’ve stayed away so far, because they never liked the $1.99 price.

But that price got me to thinking (it’s why I was kept out of the good schools) about value and so forth. We’ve all heard about the unwritten "deal" between television viewers and program creators that goes something like this: programs are expensive to make, so rather than charge you, we’ll let advertisers pay for them. Remember?

Well, let’s assume that Joe downloads an episode of Lost from iTunes for $1.99. He shares that episode with a friend or two — let’s say three — so a total of four people watch that episode via Joe’s download. To get the same money (let’s say $2) from advertisers for those four viewings, the CPM would be $500, or 50-cents a viewer.

That’s absurd, of course, so suddenly, the $2 price seems high, and $3 even more so.

But that’s life and that’s capitalism, and of course my math could be all wrong.

And so it goes.   <Link>