Silicon Valley Watcher - at the intersection of technology and media

Robert Andrews is puzzled. Why Are Russians Spending Like Mad To Save Journalism? | paidContent:UK

He writes:

The latest - after last year buying France-Soir, the country’s smallest daily, for €50 million, shipbuilder’s son Alexander Pugachyov is now spending a further €20 million on a marketing campaign to take it mainstream. He’s upping the print run by 20 times, has halved the cover price and has more than doubled newsroom staff from 40 to 100.

Jealous? There’s no part of this that makes immediate sense. In fact, contrasted with the cutbacks, climbdowns and contraction many parts of the industry are seeing, it looks like madness.

...

The Pugachyov scenario in France mirrors that of Alexander Lebedev in the UK ... The former KGB agent took the London Evening Standard, whose circulation was falling, off DMGT’s hands for just a nominal fee, forewent cover-price income in favour of free distribution on a higher print run, and pledged a £25 million investment over three years.

“£25 million investment??” That’s unheard of in today’s news publishing economy... Now Lebedev’s set to repeat the act by buying The Independent.

I think I can help Mr Andrews understand what's going on. It has nothing to do with "saving journalism."

These are prominent publications in their country. They are being bought not to make money but as vehicles to influence politics and society.

It's not the first time this has happened. Hearst used his newspapers for political influence, and many others have done the same.

Investing in propaganda...

The Russians, in particular, understand the power of media. At the heart of the Bolshevik party was its newspaper, Pravda.

The Bolshevik party wasn't investing in journalism when it funded and published Pravda -- it was investing in having its ideas discussed in society, and in the political realm.

These are ultra-rich individuals, they aren't buying the publications as investments in that business, but as an investment that will aid their other businesses.

Mr Andrews notes that Alexander Pugachyov is the son of a Russian shipbuilder and that the French government may place an order for four battleships. I think that's a pretty big clue that the investment isn't about "saving journalism."

Media businesses are often loss-leaders that help drive other businesses. You see this today a lot. Most online media sites, especially blogs, don't make money from online advertising but from selling other things, such as services, or research reports, hosting events, etc. You don't make money directly from the traffic.

- - -

I already have a loss leader, I just need to add services and products that I can sell to help support my journalism. That's why I've started to do some consulting for companies such as Intel, Pearltrees, SAP, and others.

Let me know if you need some help on media/business strategies - 415 336 7547.

I was glad to see Joel Postman's post on his Socialized blog: Social Media Isn’t Conversation, It’s Publication because this has been a subject close to my heart.

Joel writes:

...I mentioned one of my favorite Marshall McLuhan quotations, “Publication is self-invasion of privacy.” We threw this idea around a little and together came up with the idea that online communications are a form of publication, not conversation, and a failure to understand this distinction can be troublesome...

I agree, social media is about publishing, not conversations.

About a year ago, I wrote about "The Myth Of Online Conversations: Lots Of Chatter But Not Much Discourse

What is so striking about the online world is how little conversation takes place, how little two-way communication happens.

One comment to an article is not a conversation. 300 comments on an article is not a conversation.

Yet everyone talks about social media being about "conversations." A PR firm I sometimes work with is called "The Conversation Group."

Social media is not about conversations it is about publishing.

Social media represents the fact that we have now wired up the other end of the Internet, your end.

The Internet enabled us to publish to any computer screen no matter where. Now, any screen can publish back. This is huge.

That's what social media is about. It's about publishing, allowing anyone to publish back. It's feedback, it's a response, it's not a conversation.

A printing press in your pocket...

What is extraordinary, is not the 'conversational' nature of the Internet, but the fact that now every screen is a printing press.

I can publish from any screen, small or large, yours or mine. I have the equivalent of a printing press, with the potential to reach of tens of millions, in my pocket. And so do you.

It's no wonder Rupert Murdoch is pissed. You used to have to be a media mogul to have a printing press.

It's not the content...

Let's not get distracted by the content, the endless Tweets about inane things, the blog posts about nothing-in-particular...

The content is not the message. The message is that we now have an online printing press, (and TV studio, and radio studio) nearly anywhere, and everywhere we are. That's huge.

Internet 1.0 was about being able to publish to anything with a computer screen. Now, anything with a screen can publish back.

That's what social media represents...the 'me' in media.

We've wired up the other end of the Internet. It's a two-way Internet now. This is the Internet on steroids.

If you thought Internet 1.0 was amazing, you ain't seen nothing yet.

This week marks the one-year anniversary since the Seattle Post-Intelligencer newspaper stopped printing on paper and moved completely online. http://www.seattlepi.com/

Monica Guzman, at the Seattle PI, has written an excellent roundup of how other digital news ventures in the Seattle area are doing.

Here are some extracts from: New media ventures blossom in Seattle

West Seattle Blog
Independent neighborhood news site covering West Seattle.

The site is profitable, and more than 60 paying businesses known as sponsors support it, editor and publisher Tracy Record said.

...Apart from having to beat down an early stigma that independent news "bloggers" were not to be taken seriously (she's a journalist, so she prefers you call her that), Record didn't take a vacation until August 2009, when she could pay enough freelancers to keep an eye on things back home.

"All the people who send story ideas, crime reports, texts about traffic, a picture of a cool event at a school -- that's the part that grows exponentially," Record said. "That's the part that's always humbling, every day."

Techflash
Tech news site owned by The Puget Sound Business Journal.

"It's not something I imagined I'd ever be doing back when I was in J-school (journalism school)," said Bishop.

"It shows you can be entrepreneurial and still be a journalist."

"Journalism isn't only about giving a community information. It's about helping to build that community up."

"I laugh when I think about coming into the Seattle Post-Intelligencer at 9 and leaving at 6. It's almost comical. Twelve hours a day is probably the norm."

Neighborlogs
Seattle-based community news platform and ad-sharing network.

"We see room for something that lets people be journalists, lets people focus on newsgathering, lets us worry about the technology," said Carder.

"The cost of content is so high, you have to find ways to pinch technology and all the tools as tightly as possible. Plenty of players will be gone because they don't know how to do that," he said.

Next Door Media
Seattle collaborative community news network.

"We believe there's a natural balance between journalism and the community. For too long journalism hasn't listened, and it really caught up with the industry," said co-founder Cory Bergman.

"A lot of companies take a tech approach. We're taking a more people-centered and community building approach."
All Next Door Media authors happen to have either worked in journalism or have a journalism degree, Bergman said -- though that's by no means a requirement.

PubliCola
Seattle civic and cultural news site.

"We are reporters who are changing blogging, as opposed to blogging dumbing down reporting," said Feit, a longtime political writer.

InvestigateWest
Northwest nonprofit investigative reporting shop.

"Our model is to sell in-depth journalism at the price that existing news outlets would pay for plain old journalism," said Robert McClure, the Northwest reporting shop's chief environmental correspondent and one of several former Seattle Post-Intelligencer reporters behind the nonprofit.

"It's kind of scary," McClure said. "You're a little mouse on a wheel. You've got to keep going. You can never relax and say, 'We have enough.'"

"I just can't believe that people in this country are going to let in-depth journalism go away completely," he said. "To what degree we can sustain what we have and modernize it in a way that gets the public engaged and keeps them engaged -- that's the big thing."

Crosscut
Northwest nonprofit news site.

... if you want short, flashy treatments of tough local issues, you're in the wrong place. The site's often lengthy analytical pieces aim for a certain audience...

Crosscut is out to activate local discussion ..."Our tagline, 'news of great nearby,' is partly an attempt to say that local can be big local," Brewster said. "We want to have people feel like they're a part of something big."

You can read the whole of this excellent report here: New media ventures blossom in Seattle
(I think my headline is better :)

Most journalists I know can barely type, they certainly can't spell but they can tell a great story.

Most professions have to continually upgrade their skills yet I know lots of journalists that are very reticent about adding new skills. They hate to shoot photos, or video, or edit the video. I know a journalist that does not know how to upload a photo!

Carrying a pencil and a notepad is not enough, journalists need to know how to produce media content in a variety of ways.

Here are ten basic skills journalists, heck, anyone should know:

1 - How to shoot a photo with a digital camera and transfer it to a computer for a quick edit.

2 - How to upload an image to a web site in the right format and size.

3 - How to add a hyperlink to a word or part of a sentence by hand. (i.e. hyperlink)

4 - How to quickly shoot digital video and do a quick edit and upload it to a hosting service such as YouTube, in the right format.

5 - How to embed the code for a video in a web page and resize it to fit the page width.

6 - How to capture audio for a video, or just an audio-only podcast, so that the audio is clear and background noise is minimal.

7 - Know some basic HTML and what it does so that common problems with a web page can be quickly fixed.

8 - Know some basic CSS (Cascading Style Sheets) and what it does, and be able to quickly fix any problems with a web page.

9 - Know how to promote your content on the Internet without alienating contacts and family.

10 - Know how to get used to an always-on work day that often extends beyond 9-to-5, and produce three times as much digital media content as you think you can, while maintaining high standards of quality and accuracy.

The Guardian.uk has an article about how the New York Times and CNN are becoming technology companies.

How the New York Times and CNN try to keep up with the tech companies

"The New York Times is now as much a technology company as a journalism company," its executive editor Bill Keller said recently.
...
While CNN.com closely collaborates with technology companies like Facebook, Apple or Google, the New York Times anticipates technical change in-house with the help of its research and development department.
...
"We made an experiment and put an RFID chip into the phone, the computer and the television. The chip was there to track the user's reading. When a user stopped reading a story on the phone as he or she arrived at work, it opened it again on the desktop. When the user entered the living room, related videos to the story were presented on the television screen," explains the NYT's Nick Bilton.
...
CNN has launched an iPhone application, redesigned its website and reached out more to social media. CNN was among the first TV broadcasters to understand the full impact of social media on television, and teamed up with Facebook for the presidential inauguration.
...
Today, CNN's iPhone app is as much a news-making as a news delivering application, and as the iReporters can add their telephone number, email and location to their report, CNN's editors can get back to them or even assign them to certain content CNN is looking for.
...
...it looks like the news organisations that tear down the wall and build a bridge between editorial and technological thinking will be most likely to survive.

I'm glad to see these types of stories. For the past five years I've been writing about the need for 'media engineers' - part software engineer and part media professional. And also 'media architects' the people the create the media technology infrastructure for media companies (BTW every company is a media company.)

Media engineers will be better paid than software engineers because you need a broader skills set.

- - -
Please see my PearlTree on 'media engineers.' [PearlTrees is an SVW client and it's a great media technology that organizes web pages in a visual way.]

Marc Andreessen, the co-founder of Netscape, likes to give business advice to media companies. For a couple of years, he has been advising newspapers to completely abandon print. He said it again in a recent article. Alan Mutter, a former reporter, and successful media entrepreneur, writing on "Reflections of a Newsosaur" says the idea is "plain nutty."

Marc Andreessen had a really good idea when he invented the first popular browser for the web, but his latest notion – that newspapers should walk away from a business grossing more than $30 billion a year – is just plain nutty.

I agree. Newspapers can't abandon print when their online revenues are less than 5 percent of total revenues. Google's chief economist Hal Varian presented a bunch of dismal figures for the newspaper industry earlier this week.

GOOG's Chief Economist Hal Varian Has No Solution For Newspapers

The newspaper industry is stuck. Moving its business online involves extra costs in terms of needing staff with a variety of web skills, IT costs, etc. Yet the revenues don't match its cost of operations. And there's more...

I remember a conversation with a publisher of a very good IT print magazine. He told me he was thinking of stopping advertising on his web site. I was flabbergasted, how could you do that?

He said that he offered online advertising packages to his print advertisers. But when his advertisers looked at the poor click-through rates they assumed that their print advertising wasn't effective. So they would pull their print advertising. For the sake of a $600 monthly online ad package they were pulling $50,000 in print advertising.

This also works the other way. Online advertising rates lower than print but can be more effective. For some advertisers, a $600 ad buy can replace $50,000 in print advertising.

You can't get there from here.

It's a Yankee phrase that never made sense to me. But it makes perfect sense in defining the situation of the newspaper industry and its attempts to transition its business online.

There is no way that online news revenues can support the cost of operating newspaper newsrooms. Because the newspaper industry cannot give up print, it leaves the online field wide open to competitors, which have significant advantages:

- no legacy costs of business such as printing plants, unions, pension plans, office buildings, layers of admin.

- new competitors can build news businesses based on the dismal economics of the online world. For example, the extremely successful Huffington Post has fewer full time journalists than the New York Times has people moderating its reader's comments.

Newspapers are forced to watch smaller online competitors run off with the audience. You see that happening with the Gawker media network, and elsewhere too.

The situation is made even more horrible for newspapers because the rates for online ads continue to drop. Yet their costs of operations haven't dropped, they increase as they try to transition to online.

You can't get there from here.

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Please see: Disruptive Technologies Disrupt

James Rainey, at the The Los Angeles Times, reports on the "Bay Area News Project" financed with $5 million by Warren Hellman, a local philanthropist.

The project has a CEO with a $400,000 salary and its editor, Jonathan Weber, used to run the Industry Standard, a popular magazine during the dotcom era.

Bay Area News Project has high hopes, few employees - latimes.com

When the Bay Area News Project launches its website in late spring or early summer, it will be just the latest -- and perhaps the most ambitious -- nonprofit venture among a string of similar start-ups.
...
"On the one hand, you want to have big ambitions," Weber explained from his office, a stylish but spartan space donated by a San Francisco law firm. "On the other hand, you don't want to be presumptuous about what you can do with a small newsroom.
...
The project will have to rely on paid interns from one of its partners, UC Berkeley and the Graduate School of Journalism, to provide some of that coverage. The university also intends to bring an R&D component.
...
Weber has committed to covering public institutions like government, education and the law. But he conceded in a recent meeting with freelance writers that even this civic mandate would be an enormous challenge. And with a couple of other editors likely to come on board in a week or two, he's yet to hire another editorial employee.
...
"I think that in some ways we are kind of entering a Golden Age of journalism," Weber said, "because the barriers to entry have been largely removed."

Foremski's Take: The great thing about emerging new media business models, is if one media organization figures it out - we all figure it out - we can all adapt and adopt a similar model. It's win-win.

But I don't see the Bay Area News Project being able to do that, for several reasons:

- The salaries and the organization. The CEO is being paid $400K, and editor Jonathan Weber has wisely declined to publish his salary. I would estimate it to be between $300K and $200K. The salaries of the other journalists will be far lower, and most will be intern level pay because the work will be done by journalism students.

- The non profit model is a problem. The point is to find a media business model that is profitable. There's plenty of 'non-profit' media businesses around, the largest local one is the San Francisco Chronicle.

- A philanthropist led news business is not a sustainable or reproducible model. Mr Hellman has done wonderful things with his money and his interests in the news business are commendable. But the way this venture is set up, it doesn't look like there will be much to be learned, or adopted, by other news organizations.

- This project will compete with local media organizations that are trying to create for-profit news media business models. Having a very well financed competitor, with it's saintly 'non-profit' status will suck revenues away from them.

We need media business models that are viable, profitable, and self-sustaining - without relying on philanthropists, cheap labor from J-schools, and expensive consultants. That's where Mr Hellman's money should be going, imho, to develop reproducible news media business models.

- - -
Please see:

Here is a PearlTree - a visual organization of web pages related to this story:

  
The Bay Area News Project // FAQ

A new convert to nonprofit journalism out west? » Nieman Journalism Lab

The Federal Trade Commission held a second session today on the future of the newspaper industry and Hal Varian, Google's chief economist made a presentation.

His talk, "Newspaper Economics, Online and Offline," was full of very interesting numbers, related to traffic, revenue, type of news stories that people read, how much time they spend reading news online, and lots more.

With his access to detailed traffic stats from Google News plus detailed numbers on ad revenues, etc, Mr Varian is in an excellent position to know what works, and what doesn't work in online media. He has access to more information than any single newspaper publisher and thus can provide important insights into the newspaper business.

What did Mr Varian advise newspapers to do? "Experiment, experiment, experiment," reports Martin Langeveld, at Nieman Journalism Lab.

If that's the best Mr Varian can come up with, that's very bad news for newspapers.

Here is the most dismal of a range of dismal stats that he presented to the FCC:

- online ad revenue is substantially less than 5% of newspaper revenues.

Here is his slide deck:

And here is a PearlTree that represents a collection of web pages on this topic:

Gabe Rivera's Techmeme is the news reader of choice for much of the Silicon Valley tech-setters -- more so than Techcrunch because it has a much wider selection of articles.

I often see Gabe at press events, he has a press pass like other journalists. But is he a journalist? After all, he doesn't write any of the stories that appear on Techmeme.

It seems that the Austin based conference South By South-West (SXSW) doesn't think he's a journalist because it refused to give Gabe a press pass. Does SXSW think that Gabe's Techmeme is a simple news aggregator and therefore not media?

Probably. But Gabe is not just a software engineer with a news algorithm and a server. He's better viewed as the editor-in-chief of Techmeme with a large staff of editors. Techmeme does use an algorithm to try and surface news that is interesting but that's not enough. He has five editors that curate what appears on Techmeme and its sister sites.

Also, Gabe has told me that he sometimes 'commissions' stories. He will sometimes tell bloggers that he would love to see a story on a particular subject, or he'd like to see coverage of a conference. That's the work of an editor-in-chief, not a software engineer.

So SXSW should definitely give Gabe a press pass. (BTW - Editors are journalists.)

I wonder how long before Gabe's editorial team start writing stories? It would seem to be a natural progression. Look out Techcrunch et al!

This is astounding: ClickZ in the UK reports:

U.K. to Regulate Social Network Marketing - ClickZ

Marketers and brands using social networks will soon find their activities in those spaces regulated by the U.K.'s Advertising Standards Authority, following recommendations submitted by the Advertising Association this week.

The proposed amendment to the Committee of Advertising Practice (CAP) Code - expected to be in force by September - will extend the regulatory framework currently in place for paid online ads to all other online marketing communications. As a result, claims from marketers on their own Web sites and third-party sites like social networks will now be subject to ASA scrutiny, as they are in TV, print, and other forms of online advertising.

The code is designed to ensure that ads do not offend or mislead, and that they respect specific laws relating to the marketing of alcohol, gambling, auto, health, and financial products.

Advertising Association COO Rae Burdon described the extension as "very significant" for online marketers. "There is now considerable marketing activity on social networks, so it's clear that these spaces have to be included in the remit," he told ClickZ.

Wow. If a person markets something, like a book they've written, or a product they are selling, it is regulated as if it were advertising published by a media company, such as a newspaper, TV, magazine, etc.

That means everyone is now a media company. And subject to the same regulations - at least in the UK. Wow.

Those regulations will apply to personal blog sites and also your Facebook, Twitter, LinkedIn pages too. If you claim something that isn't truthful or violates other regulations -- there will be penalties.

Sanctions for breaching the code have not yet been confirmed, but the revised codes are expected to be published this month and will come into effect in the autumn, the Advertising Association said.

But how will the ASA monitor all that social media marketing?

The extension of the ASA remit will of course incur additional costs, and Burdon said the ASA would be "gearing up with additional staff and structures" in the coming months.

The ASA will need a lot of staff, I'm not sure if it knows what it's chewing off. We have just scratched the surface of individuals using social media marketing.

That's what the Obama administration should bring to the US, similar regulations. It would make a great job stimulus initiative. There would be jobs for life, for thousands of people, working as social media marketing monitors ((SMMMs) - pronounced Sock-mee-ma-mo's :)).

I often meet with ad networks and ad exchanges for various stories I'm writing. And because I'm a publisher, they give me the pitch about how publishers make more money with their solution.

The pitch they give advertisers is how much money they can save them.

Clearly, both can't be right. The money has to come out of one pocket or the other. Guess which one it comes out of?

Over on Poynter Online, Dorian Benkoil wrote an article headlined: Can Ad Networks & Exchanges Help Increase Ad Prices (Instead of Driving Them Down)?

It seems he's been hearing the same pitches I hear from ad networks and exchanges.

Tim Cadogan, CEO of ad exchange OpenX, told me that the solution is to "limit the number of airplanes flying" when I shared the airline analogy with him at the OnMedia conference in New York earlier this year.
Cadogan predicted that within the next year to 18 months, we'll start to see technologies that let publishers flexibly manage ad inventory in real time, automatically pulling ad spots from a page when there's not an ad of high enough value to go in. That should, by implication, increase the perceived value of the spots that remain.

That won't happen because:

- there is no scarcity. Publishers would need to combine forces, and strategies, to create scarcity. Then the temptation is to undercut each other and so you are back to square one.

- there's not enough auction liquidity to create a competitive bidding environment.

At the paidContent 2010 conference a few weeks later in New York, JT Batson, executive vice president of revenue and global development for ad solutions company the Rubicon Project, said they were developing such a solution, one he predicted would be available in some fashion by the end of the year. "Flexible inventories will increase rates," he said.

Batson said publishers haven't done particularly well at managing their inventory but will eventually have systems with predictive modeling as sophisticated as the ones airlines have.

Look at how prosperous the airlines have become.

The pitch, when it is targeted at advertisers, goes something like this:

"Surveys have shown that advertisers are over-paying for online advertising by $7 billion a year. Using our technology you can buy ads that are highly targeted to your demographic. Our performance software will let you find the best time for showing your ads. And our auction system means you can buy ads at the lowest price possible. You can buy ads at significantly less than the published ad rates for the publication you want. You will save a ton of money."

It's a zero sum game. It's not win-win when money is involved. Someone wins and someone loses.The ad networks and ad exchanges work for the advertisers -- not the publishers.

Ad networks and ad exchanges have the advantage in that they can pull in lots of inventory from many sites -- scale is on their side and they sell that advantage to the advertiser -- not the publisher.

A publisher, even if it is a national newspaper or magazine, is still a small fish in a very large sea -- it has no leverage. If the publishers were to get together to create scale that benefits them -- that would be illegal, it would be anti-trust.

It's more than advertising...

And all this discussion about advertising and online publications is a red herring, anyway. The dirty little secret is that advertising doesn't work well online. It takes millions of impressions to make a decent number of conversion. Same for clicks, etc.

Yet online publishers are obsessed with trying to make online advertising work. It won't.

Publishers need a multi-revenue business model that includes a whole range of revenue streams: lead generation, events, custom marketing, webinars, virtual currencies, subscriptions, paywalls, etc. But that's hard work. It's much easier to complain about online advertising rates.

- - -

Please see:

The "Heinz 57" Media Business Model

Why Ad Blocking is devastating to the sites you love

Don't Blame Your Community: Ad Blocking Is Not Killing Any Sites | Techdirt

Gabe Rivera, well known for Techmeme, has unveiled a new news aggregator site: Mediagazer (media grazer might be a better name :).

Megan McCarthy is the site's editor (yes, Gabe uses human-enhanced news search algorithms).

Introducing Mediagazer «

The media business is in tumult: from the production side to the distribution side, new technologies are upending the industry. What do news organizations need to do to survive? Will books become extinct? When will an audience pay for content? Can video bring television and the internet together? Will the iPad save us all? Keeping up with these changes is time-consuming, as essential media coverage is scattered across numerous web sites at any given moment.

The site looks a lot like Paidcontent.org, which also covers the same space.

In her post, Ms McCarthy is describing how technology is changing the media industry. And that's what SVW has focused on these past five years : the business of innovation at the intersection of technology and media.

It's not until fairly recently that people recognize "the intersection of technology and media" idea. And I'm glad that this idea has caught on because it is the most interesting aspect of the tech industry and also Silicon Valley.

Silicon Valley turned into a media valley a long time ago.

Google, Yahoo, Ebay, for example, are technology-enabled media companies. They publish pages of content with ads.

Facebook, Twitter, LinkedIn, for example, are technology-enabled media companies. They publish pages of content with ads.

And so are tons of startups... Silicon Valley is a Media Valley.

New York city's media industry is in sharp decline but ours is on the up and up.

Here is a behind the scene look at a Japanese TV team coming to my apartment to interview me about Silicon Valley becoming Media Valley, two years ago in February 2008.

http://www.youtube.com/watch?v=S7sNxTlqIyI

In September 2007 Nikkei magazine, Japan's prestigious business magazine, featured me in a long article about Silicon Valley becoming Media Valley.

Here are some of my posts over the years:

April 2009 - Media In Transition: Silicon Valley Is Driving The Changes . . . And Is Changing

March 2009 - Media Is Dead . . . Long Live The Media!

May 2007 Silicon Valley Watcher - at the intersection of technology and media: Search Results

February 2007 Silicon Valley has become Media Valley - someone should tell NYC - SVW

September 2005 - A Report From NYC

I'm glad that more people now recognize what is going on in Silicon Valley and the importance of what happens at the intersection of technology and media.

People like to talk about disruption but sometimes some people misunderstand the power of disruptive technologies.

I've had companies tell me: "Yes, we know we are in danger of disruption but we see it, we can adapt, we can change and take advantage of it."

Good luck. Even when you can see the train wreck ahead. You will likely slam right into it. Disruptive technologies disrupt. Technologies are not called "disruptive" just for the sake of it.

Niki Scevak, a serial entrepreneur, writing over at Bronte Media, has a nice analysis of AOL versus Yahoo. He says that AOL, under Tim Armstrong and his team, has a more realistic understanding of the advertising markets, and where things are headed.

Carol Bartz, who I am sure is an excellent manager of large companies, seems lost. See Arrington’s article on a speech she gave recently where she said: “she’s counting on an improvement in the economy to drive Yahoo growth”.

Well, let me save you some time Carol: Stop counting. The economy won’t help you...

The second thing that enrages me about that statement is that it’s completely out of her control. And what track record does Bartz have in forecasting economic indicators? Where are the statements related to things under her control?

Mr Scevak says he will short YHOO and buy AOL.

My main reason for thinking this is that AOL has a management team that is in tune with the reality of the Internet. Yahoo has a management team still grasping with the basics of advertising and that’s not mentioning the basics of online advertising.

A better strategy might be to short both because there is a huge disruptive wave moving through the media industry. The disruption is affecting every media business, old and new(er).

AOL might have a better view into the disruption but that's no guarantee of success. Just because you can see the train wreck ahead, doesn't mean you can avoid slamming straight into it.

Look at what happened with the microcomputer/PC technologies. Over a period of about a decade, that basket of technologies disrupted hundreds, if not thousands of companies, in the computer industry. IBM barely survived. It had to reinvent itself as a computer services company.

So many companies, DEC, etc, saw the disruption ahead. But they couldn't change fast enough, they couldn't downsize fast enough, they slammed straight into the train wreck. Some did make it through to the other side but many didn't. Disruptive technologies disrupt.

Even if you see things coming, as the newspaper companies now do, there's sometimes little they can do about it. The Internet is a hugely disruptive media technology and that's where we see the disruption the most.

Newspaper, and other media companies, have to act a lot faster than they are. Many won't make it through to the other side no matter what they do. Disruptive technologies disrupt.

(Oh, and by the way, every company now is a media company, every company is in a disruptive pathway. And here's a plug for my media/business strategy consultancy services, which help me publish SVW - 415 336 7547 or tom@foremski.com.)

I'm sometimes asked what the new business model for media will be. My answer is that it will be a "Heinz 57" model. The Heinz food brand often has "57 varieties" in its promotions. And that's a good metaphor for the emerging media business model.

Frédéric Filloux illustrates this very well in his recent post about Fairfax Media, the Australian media giant. The company publishes 328 newspapers, 46 magazines, it operates 284 web sites, and 15 radio stations.

Fairfax Digital, a division of Fairfax Media, represents 10 percent of total revenues and 16 percent of its EBITDA in fiscal 2009.

Mr Filloux notes that:

... when we compare audiences for NYTimes.com and smh.com.au in their respective markets, the Australian news sites has roughly three times the penetration of the NY Times. And if we compare advertising market shares: the SMH is doing twice as well as the NY Times.

And its impressive financial performance is based on multiple revenue streams.

FD had no less than 15 revenues streams: advertising, subscription, commission on auctions, paid by the transformation of a contact, listings, e-commerce, mobile fees, etc. In New Zealand alone, FD’s classifieds and auction site TradeMe serves 70% of all the country’s web pages.

You can read the rest of Mr Filloux's excellent profile here: Digital Takeover, The Fairfax way | Monday Note.

It's a great illustration of how multiple revenue streams are key to the success of future media companies. And each one will have a different mix of revenue streams.

But it is tough to manage many different revenue sources. We will have tools and services that will help publishers to stay on top of things but clearly, we need a new breed of publisher.

It's not enough to lunch out with a few of your top advertisers. Publishers will need to be expert in many different aspects of their business: advertising, content creation, custom marketing, subscription management, lead generation programs, events, syndication, virtual goods and currencies, and more.

The Guardian reports that Chrystia Freeland, the US managing editor of the Financial Times ,is leaving to join Thomson Reuters.

She will be replaced by Gillian Tett, an award winning markets reporter.

Also, Dan Bogler, managing editor of the Financial Times is leaving.

Bogler, who joined the paper in 1995 as a Lex columnist, is becoming president and editor of Medley Global Advisors, which the FT Group bought in January.

MGA produces macro policy intelligence for investment banks, hedge funds and asset managers - a sort of pumped up, super expensive Lex service for high end clients.

Bogler will relocate to New York and Joanna Rollo, deputy managing editor of the FT, steps up to become acting managing editor.

Lex is the analysis column that appears at the back of the newspaper.

The US managing editor role is usually one that is a fast track to the top positions at the FT. This is a position previously held by Lionel Barber, the editor of the Financial Times, and also Robert Thomson, editor of the Wall Street Journal.

The New York Times reports that Ms Freeland will write a weekly column on business and politics, and will help Reuters focus on consumer news.

Ms. Freeland, reporting directly to the editor in chief David Schlesinger, will be heavily involved in a new financial news video service the company will start this spring. She will also continue her role as a frequent face on television, commenting on the news -- the Reuters press release says she will "serve as Reuters principal on-air pundit for other external broadcast partners."

Heather Hopkins is senior online analyst at Hitwise, which monitors traffic to web sites for Experian. She writes that "Facebook Users Prefer Broadcast Media."

A couple of weeks ago, I posted an entry about Facebook becoming the largest news reader. Facebook does send more traffic to News and Media sites than Google News but looking more closely at the data, I noticed that the two sites send traffic to a very different list of News and Media websites.

The following table starts to tell the story, showing the top 10 News and Media websites visited after Facebook and Google News last week.

She's puzzled why there is such a large difference in the two lists. And she tries to run additional analysis to figure out why the two lists aren't more similar.

I think the answer is that she is comparing apples to oranges. I might go to Google news to become more informed about a particular news topic. But on Facebook I'm more likely to share a different type of news, about bad weather coming my way, or more quirky content about the rich and famous (People magazine), etc.

Ms Hopkins is comparing news that is shared (Facebook), with news that is consumed (Google News). There's a big difference, as she has discovered.

- - -

Please see: The Latest Pew Report Reveals Very Sophisiticated News Consumers - SVW

There are lots and lots of statistics in the latest Pew report: Understanding the Participatory News Consumer.

Here are a few things that jumped out for me:

- 9% have created "their own original news material or opinion piece." This is a very sophisticated group.

- 36% of Internet users want to manipulate the content on a news site themselves "as graphics, maps, and quizzes." Again, a very sophisticated survey sample.

- People will use many media platforms for their news.
"92% use multiple platforms to get news on a typical day, including national TV, local TV, the internet, local newspapers, radio, and national newspapers."

- 7% use just a single media platform to get their news.

- Internet is now more popular than radio and newspapers as a source of news.

- People do not access news at specific times (i.e. no 'Ten o'clock News.')
"They seem to access news when the spirit moves them or they have a chance to check up on headlines."

- Weather is the most news worthy subject, followed by 81%.
"National events (73%), health and medicine (66%), business and the economy (64%), international events (62%), and science and technology (60%)."

- People want more science news the most.
"44% said [they want more] scientific news and discoveries, 41% said religion and spirituality, 39% said health and medicine, 39% said their state government, and 38% said their neighborhood or local community."

- News is being consumed so that it can be shared offline.
"Some 72% of American news consumers say they follow the news because they enjoy talking with others about what is happening in the world and 69% say keeping up with the news is a social or civic obligation."

- About 50% said they rely on others "to some degree," to tell them the news they need to know.

- Only one-third of cell phone users get their news through their phones. It seems that the format is lacking. This is important for all those news organizations rushing into mobile news.

- People feel overwhelmed.
"70% agreed with that statement: "The amount of news and information available from different sources today is overwhelming." Some 25% "completely agreed" with that statement and 45% "mostly agreed."

- 63% agreed that major news organizations do a good job. 72% said most news sources are biased. The Pew report authors say this is a dichotomy. But is it really? It shows that people are smart about their news sources and they recognize bias when they come across it. They can distinguish between the quality of the content and the bias in the reporting.

Interesting findings. But parts of the survey reveal an incredibly sophisticated news consumer which makes me suspicious about the survey sample and how much it can be applied to the general population.

Following an Italian court ruling earlier this week, Google is facing the prospect of having to check Italian sourced videos before they are posted, to make sure they don't violate Italian privacy laws.

That's a daunting task.

One potential way around this problem is to do what it did in South Korea last year. A new law forced Google to collect the real names of Koreans uploading videos or commenting online.

On the day the law came into effect, Google simply switched off the comments and blocked the ability for people to upload videos to its Korean YouTube site. Koreans were still allowed to upload video to YouTube sites in neighboring countries.

It was neat sidestep of its legal obligations.

Run for the border...

Courts only have jurisdiction within their country. But web sites and data, can be located anywhere. In the future, Iceland, might become a favored destination for Internet data because it is debating passing strong laws that protect freedom of speech.

Iceland plans future as global haven for freedom of speech | World news | guardian.co.uk

Google could use the international nature of the Internet to thumb its nose at any government seeking to control what it hosts.

Such a strategy however, is a risky one. If it chooses the wrong issue, it would be seen as an international pariah, which would harm its brand. After all, a competitor is always just one click away.

Google needs to decide whether its claim to "Internet freedom," as its right to host and distribute a video of a disabled boy being beaten and insulted, is one that would justify disregarding a country's laws.

There might be more important battles to be waged in the future and it would do well to keep its powder dry.

- - -
Please see:

Analysis: Italian Decision Could Help Traditional Media Orgs

Google Is A Media Company - New York Times Sees The Connection In Italian Court Case

The Society For New Communications Research (SNCR) has published the 2nd Annual Middleberg/SNCR Survey of Media in the Wired World.

It showed a large increase in the use of social media by journalists. The survey polled 341 journalists.

It found:

- Nearly 70% of journalists surveyed are using social networking sites, a 28% increase since the results of the 2008 Survey of Media in the Wired World were released

- 48% are using Twitter or other microblogging sites and tools, a 25% increase since 2008

- 66% are reading blogs

- 48% are viewing videos online

- 25% are listening to podcasts

- Nearly 80% of journalists surveyed believe that bloggers have become important opinion-shapers in recent years

- 91% of journalists surveyed agree that new media and communications tools and technologies are enhancing journalism to some extent

Foremski's Take: I would expect a large increase in the use of social media by journalists and that's what we see here. However, what's really surprising is how many journalists are still not using social media. That's the biggest surprise.

I can't imagine not using social media and social networks in my research on stories, in contacting people, and in finding out what the key trends are in the communities that I cover: Silicon Valley, venture capital, enterprise IT, chips, computer security, media, PR, etc.

My job would be ten times harder if I didn't use social media, and related tools and services.

Let's view the above results in a different way:

- More than 30 per cent of journalists do not use social networking sites.

- 52 per cent of journalists don't use Twitter.

- One-third of journalists do not read blogs.

- More than half don't watch videos online.

- 75 percent of journalists do not listen to podcasts.

Yet 91 percent "agree that new media and communications tools and technologies are enhancing journalism to some extent."

When the results of the survey are viewed in this way, the results are shocking.

I would not want to employ journalists that don't know how to use social media to improve their work. I'm flabbergasted that the number is so high. This not 2005.

- - -

The survey was conducted by the Society for New Communications Research team of Jen McClure, SNCR founder and president, and SNCR Senior Fellow, Don Middleberg. Sponsored by Marketwire.

[Please note: I am a Founding Fellow of SNCR - a think tank based in Palo Alto.]

John Hooper reports in The Guardian: Google executives convicted in Italy over abuse video

Google responded furiously today after an Italian court found three of its executives guilty of violating the privacy of a child with autism who was shown being bullied in a video posted on its site.

...The case has potentially vast implications for the future of the internet. Hosting platforms such as Facebook and YouTube argue that they cannot be held responsible for content created by their users until they are informed that something is illegal. The Italian prosecutors contended that Google was negligent in not removing the video sooner.

Foremski's Take: There's a justifiable uproar within the international Internet community over this ruling. Jeff Jarvis over at BuzzMachine writes that this "kills the Internet."

...no one will let anyone put anything online because the risk is too great. I wouldn't let you post anything here. My ISP wouldn't let me post anything on its servers. Google wouldn't let me post anything on it's services.

That's not true.

Things could be posted but they would have to be vetted first. Who's good at vetting content? Media organizations.

For example, pick up a newspaper. Everything in that newspaper has gone through an editorial process that has involved many people. And that's what makes that content valuable but also expensive to produce.

In online media, the economics are terrible. Online ads can't cover the costs of a large editorial operation. That means the more user generated content you can get, such as YouTube's hosting of other people's videos, the better.

Traditional media organizations are at a big disadvantage in the online world because of their large editorial teams. But that's precisely what you need now in Italy. You need editors to check any content posted online, to moderate comments as they do in "letters to the editor," etc.

I would think that Italian Prime Minister Silvio Berlusconi should be quite happy with the judge's decision. From Wikipedia:

Berlusconi is the proprietor of three analogue television channels, various digital television channels, as well as some of the larger-circulation national news magazines. Together these account for nearly half the Italian market.

I doubt if the judges' ruling will stand because this would keep Italy's Internet sector out of step with the rest of the world. But it does show the value that professional media organizations provide to society. They would not have shown a video of a disabled boy being bullied unless it was part of an investigation.

But Google didn't see anything wrong with that video, even when, as The Guardian reported, the video "had shot to the top of the most-viewed list and been a subject of heated controversy."

Yes, the ruling is over the top but let's not forget that Google should bear some social responsibility in this case. And if that means hiring people to stay on top of these types of videos being uploaded, then it should do it.

I'm not saying the Italian ruling is a just one, but it does raise an important question of how much social responsibility should we ask of our Internet companies. We expect our other institutions to behave responsibly but not our Internet companies? That's not right.

It's a bit much for Google to argue that this ruling "attacks the very principles of freedom on which the internet is built."

The freedom to broadcast the video of a disabled boy being beaten and insulted? Really?

BusinessWeek reports that AOL has hired 500 journalists and is using traffic tools to determine which news stories to report, and how much traffic its news stories generate.

AOL Moves to Build Tech 'Newsroom of the Future' - BusinessWeek

Tim Armstrong, CEO of AOL tells BusinessWeek:

"We really want to enhance journalism with technology. We feel like we have a strategic window to invest in quality content."

Surely he means "quantity content?"

This story doesn't make any sense. Using tools to determine which news stories to write? What does this mean?

AOL will look at popular news and then write their own news stories? Well, it's too late by then.

You need experienced editors to assign news stories. A newsroom doesn't work by monitoring what people are searching for, or what someone has already published, and then writing the news stories.

The bigger issue is that we have plenty of news.

Look at Techmeme and other news aggregators. Each news story has dozens, even hundreds of similar news stories from other sites. People tend not to read a news story again somewhere else, they read the news story once.

That means each news story, even the original news story that broke the news, has to share the traffic with all other sources.

Yet Mr Armstrong believes that this is the way AOL can succeed, by piling onto a news flow that is already diluted with multiple sources.

There is tons of news out there, but there isn't much analysis. News analysis is rare and there are few good sources.

And that's why I focus on news analysis -- original content that you cannot get anywhere else.

I don't need to rush and try to break news embargos like some other news sites. I can sit back and craft a news analysis that no one else has, such as my iPad analysis [iPad Is an iDRM Storefront For Apple Ambitions To Dominate All Digital Media Sales].

This was published an hour after the news was released but gained a huge amount of traffic because it was something that no one else had at the time.

News is a commodity, news analysis is not. That's where AOL and its 500 journalists should be focused - creating original content.

Loren Feldman, the publisher of 1938Media, a New York city based web site, has published the names of the companies that were the subject of 100 posts written by former TechCrunch writer Daniel Brusilovsky. [Unpaid Techcrunch Reporter Sacked For Bribe Attempt]

Michael Arrington, the publisher of Techcrunch, said that Mr Brusilovsky was sacked because he requested a Macbook Air in exchange for writing a post about a company. [An Apology To Our Readers]

Mr Brusilovsky said that he had not received any computers.

Mr Feldman said he has direct knowledge that three companies on the list, did deals in exchange for coverage.

Until this gets fully cleared up and aired out, every one of these companies, many irrelevant but others you might not suspect, has a shadow over them. And TechCrunch's behavior in this remains inexcusable. Editors at much larger publications have stepped down over far less.

Why do I even have to bother with this nonsense? Because someone should at least for a little while and it seems most of you are too busy checking into Foursquare to be worried about little things like integrity, after all you are the Mayor of your local Friday's.

He writes that the companies that did make deals should make a public admission before they are outed. "...you will get outed. I personally know of 3 that did deals, and I'm very low on the web food chain so others must know as well I'd bet."

He advises that the other companies on the list to come forward and say that they did not make any deals.

The list of the 100 companies is here.

He has already received several responses from companies on the list saying they were not involved in any deals: App of the Day, Atomplan, Avecora, PBworks, and Ramamia.

The companies that did make deals might be revealed by choosing to remain silent.

Mr Feldman has written repeatedly on this topic:

My Thoughts On Techcrunch And Daniel Brusilovsky

Techcrunch Still Can't Do The Right Thing

Techcrunch Has The Audacity To Want More Interns

He has written about Michael Arrington many times, and has also criticized him in videos, such as this one:

UPDATE: Mr Arrington has responded to Mr Feldman: Why You Should Confess Everything Before You Get Caught

... we didn't publish the names of the companies involved because, frankly, they were the victims of the whole thing.

... hopefully our readers will know that there's no funny stuff going on at TechCrunch. If there was, we'd be the first to write about it.

Last week I wrote that Apple would have the ability to delete content on the iPad.

The iPad And Its iDelete Censorship Technology - SVW

It seems Apple is already giving us a glimpse of the future with is latest ban on "sexy apps."

Jason Kincaid writes that this is "scary" because the banned apps are apps that were Apple approved. . . until Apple suddenly, and without warning, changed its mind and yanked them from its App store.

...it's setting a scary precedent. It's showing that it's comfortable throwing out applications that developers have spent their time and money building, without even bothering to give them advance notice.

This also sets a precedent for the iPad because both the iPhone and iPad share the same apps, the same technologies, the same online store.

You can bet any unauthorized biographies of Steve Jobs won't get iPad approved. But what about a review of an unauthorized biography of Steve Jobs in the New York Times' iPad version?

I'm sure you can come up with other scenarios. This type of thing is bound to be causing many publishers planning iPad versions of their newspapers and magazine pause for thought.

Wow. This looks like easy money. The Software and Information Industry Association (SIIA) "the principal trade association for the software and content industries" is offering rewards of $500 to $1 million, to any whistleblowers that report companies for stealing content.

The SIIA used to focus on software piracy.

Through its Corporate Content Anti-Piracy (CCAP) Program, SIIA pursues cases of copyright infringement of members' content that are taking place by or within an organization. This content includes text-based publications like articles in newspapers, magazines and newsletters, books - whether in traditional print or made available online.

There is a massive amount of content being stolen by web sites every day. They run Google ads around the content. This happens to my content all the time.

But it is difficult to find the owners of the web sites.

A better strategy might be for the SIIA to take action against Google for profiting from the stolen content. If Google withdrew its AdSense network from those third party web sites, there would be no incentives for the practice to continue.

The SIAA is also interested in internal uses, a potentially very large can of worms.

The SIAA today reported that it had successfully settled a copyright infringement claim against In the Know, Inc., in exchange for a "five figure sum."

In the Know, Inc. a small business located in Ann Arbor, Michigan, manufactures custom-designed reprints and plaques. SIIA learned of the infringement though a confidential tip and a subsequent investigation verified its reliability.

"In the Know is a reputable business that made a very costly mistake," said SIIA Litigation Counsel Scott Bain. "We are pleased with the settlement and hope that it alerts other users of copyrighted content to the importance of securing proper licenses, even for internal copying and distribution."

In 2009, the SIIA paid out $127,000 in rewards. You can submit a content piracy report here: www.siia.net/piracy/report

Apple's iPad seems to have sucked all the oxygen out of the room in terms of already dominating what the e-reader experience is -- even though it is still months away from introduction.

But there are others thinking about the same things.

Here is an excellent video showing a concept for an e-reader platform called Mag+, that was produced late last year by Swedish magazine publisher Bonnier, and its design partner BERG. (Hat tip Keith Woolcock)

Digital Magazines: Bonnier Mag+ Prototype

It has been designed for a world in which interactivity, abundant information and unlimited options could be perceived as intrusive and overwhelming.

The purpose of publishing this concept video is first and foremost to spark a discussion around the digital reading experience in general, and digital reading platforms in particular. Thus, we would be more than happy to hear what you have to say regarding the concept and ideas expressed in the video: the magazine reading experience, digital browsing, text versus images, as well as hear about your own digital reading experiences and thoughts. We are all ears.

Follow the discussion in the comments below, in our blog and on Twitter.

Bobbie Johnson at Guardian.co.uk writes that a ruling is expected on Thursday in the dispute over Google's plans to digitize millions of in-copyright books. [Ruling due on Google's book plan | Technology | guardian.co.uk]

It's not looking good for Google. It is facing opposition from the Department of Justice, the Open Book Alliance, and prominent authors.

...including Ursula Le Guin, who resigned from the Authors Guild amid accusations that it was making a "deal with the devil" and selling its members "down the river".

Google's position:

"Approval of the settlement will open the virtual doors to the greatest library in history," it said. "To deny the settlement will keep those library doors locked."

Foremski's Take: Google should have made this project 'open source,' in the sense that a shared digital repository could be produced by many parties and held in common, open to all.

Google, (and anyone else), can then apply their search algorithms against the digital text, whoever does a better job, wins.

In this way, it could avoid all the fuss and legal mess, and still fulfill its mission of making all the world's information searchable. After all, Google's value is in the algorithms that produce its index, not in the content itself.

When Google indexes the Internet, it doesn't own the content. Why does it insist that it hold the content of millions of books?

The low-end iPad has a retail price of $499 and a materials and manufacturing cost of about $229, according to iSuppli.

Clearly, Apple has plenty of room to be flexible on pricing, just as it did with the iPhone, which started at $599 and is now $199.

Apple plans to take a 30% cut on any media that is bought by iPad users through its online store.

That means Apple could sell the iPad for $100 and still profit from all the media it can sell over the lifetime of the iPad.

But what is more likely is a situation where Apple can sell the Pad for $100 to publishers and then they can offer it for free as part of a subscription deal.

For example, Ryan Tate over at Gawker, reports that the New York Times is considering charging as much as $30 per month for a subscription to the iPad version of the newspaper.

At that price, the New York Times would have enough margin to offer a 'free' iPad with an annual subscription. Especially since it can charge advertisers higher rates for the richer ads it can deliver on the iPad.

Another scenario is that publishers will band together and offer a free iPad with a bundle of subscriptions, say a local newspaper, a book of the month club, and some magazines such as Atlantic Monthly or the Economist...

Whatever the bundle, there is clearly plenty of room for jiggling the maths and coming up with a free iPad deal in exchange for a subscription.

A key advantage for Apple is that the publishers will be advertising the iPad bundles, Apple won't have to spend a dime on that promotion -- another reason why it can offer the iPad for a reduced price to the publishers.

However, while newspapers and magazines can ask for higher ad prices on iPad media, they will also have to provide metrics data. Unlike a paper publication, the digital iPad will provide a means to track which pages were looked at, which ads were touched, videos viewed, etc.

The risk is that bundled deals might attract the wrong type of customers, those that want a cheap iPad. That means they aren't viewing the ads, and that means the publishers' ad revenue could be disappointing.

But for Apple, it's all good because more people have iPads and that means potential sales of all other media from other publishers: music, books, Hollywood, etc.

Either way, the economics of the media industry could set the iPad free. That means trouble for other eReaders. That also means preemptive strikes by Amazon Kindle. Techcrunch reports that Amazon is trying to figure out how to give a free Kindle to Amazon Prime subscribers.

- - -

Please see:

The iPad And Its iDelete Censorship Technology

Analysis: iPad Is an iDRM Storefront For Apple Ambitions To Dominate All Digital Media Sales

Analysis: DRMStore Wars Begin...Bad News For E-Books, E-Readers But Good For Notebooks

The excellent Atlantic Monthly published this article: Have You Ever Tried to Sell a Diamond?. It's about the origin of the De Beers organization, which sells diamonds.

As I was reading it it struck me that there might be some lessons here for the news industry.

Take a look at this:

Until the late nineteenth century, diamonds were found only in a few riverbeds in India and in the jungles of Brazil, and the entire world production of gem diamonds amounted to a few pounds a year.

In 1870, however, huge diamond mines were discovered near the Orange River, in South Africa, where diamonds were soon being scooped out by the ton. Suddenly, the market was deluged with diamonds.

The British financiers who had organized the South African mines quickly realized that their investment was endangered; diamonds had little intrinsic value--and their price depended almost entirely on their scarcity.

In the online world, there's tons of news, the market is deluged with news. News stories had value when there was scarcity (newspapers were sole sources in local markets).

So what did the diamond producers do?

The major investors in the diamond mines realized that they had no alternative but to merge their interests into a single entity that would be powerful enough to control production and perpetuate the illusion of scarcity of diamonds.

The instrument they created, in 1888, was called De Beers Consolidated Mines, Ltd., incorporated in South Africa."

What can the news industry do? Merge their interests into a single entity, a type of 'De Beers Consolidated News, Ltd' incorporated in Iceland (to avoid anti-trust).

There is a huge industry that lives off of the professional news industry. Much of that could be swallowed up into 'De Beers Consolidated News,' which could become its own news aggregator, its own Google News, Digg, Stumbleupon, etc.

'De Beers Consolidated News' could provide a single point of licensing for online reprints, reuse, etc. It might even use my idea of 'adtribution' in which reusers of news copy agree to carry the text-ads of the original news site, thereby using the power of the Internet and third parties, to disseminate news and ads.

Only the online content would be aggregated in 'De Beers Consolidated News.'

Take a look at Fair Syndication Consortium. That's getting close to a 'De Beers Consolidated News.'

- News sources that were fast, and accurate, could be rewarded by the best syndication deals.

- More money would be returned to fund high quality news stories.

- It would be a virtuous cycle. Much better than the current cycle of newsroom cutbacks, crap news stories . . . more death spiral than cycle.

The New York Times published this on its 'Corrections' section:

...a Times reporter appears to have improperly appropriated wording and passages published by other news organizations.

The reporter, Zachery Kouwe, reused language from The Wall Street Journal, Reuters and other sources without attribution or acknowledgment.

The Times was alerted to the problem by editors at The Wall Street Journal. They pointed out extensive similarities between a Journal article, first published on The Journal's Web site...

As John Furrier from Silicon Angle pointed out in a Tweet, bloggers reuse language in news stories all the time. They don't get into trouble because they attribute and they link back to the original.

I've worked on newspapers and I can tell you: newspapers hate to attribute anything to anybody. We would rewrite Reuters news stories even when we had the right to republish the entire news story. Why? Because newspapers want it look like their reporters originate the news -- not other news organizations.

When I became a journalist/blogger more than five years ago, I loved the fact that I could quote directly from many news sources and then add my contribution to the story.

But the New York Times newsroom culture is slow to change. This embarrassment wouldn't have been an embarrassment if its reporters were allowed to do the decent thing and attribute and link back.

In today's online newsroom, you have to attribute and link because there isn't enough time to try to 'stand-up' a story that someone else has broken, using your own contacts. That might have been possible when your next deadline was hours away, but that doesn't work today.

UPDATE: Marketing Pilgrim reports: 89% of Journalists Source Stories From Social Media, Yet Only 15% Admit Its Importance

A new survey by Cision and Don Bates of The George Washington University, suggests that 89% of journalists source their stories from blogs, 65% from social networks such as Facebook, and 52% from Twitter.

That's no surprise.

Yet despite this admission, journalists continue to downplay the importance of social media to their reporting efforts, with just 15% citing it as "important."

This also means that they won't attribute and link back!

- - -

Please see:

5yrs: Lessons From A Blogger/Journalist - The Start of A Series

5yrs: Where's The Disruption From The Internet?

5yrs: Meeting Cisco's Dan Scheinman and Realizing Every Company Is Now A Media Company

5yrs: Wish Everyone Well . . .

5yrs: Where Have All The Blogs Gone?

5yrs: Building A Better Mousetrap

David Ridsdale pointed me to this excellent article by Frederic Filloux: The iParanoid Scenario.

He writes about French privacy laws that enable judges to rule that a news magazine, or any other type of publication, has to be with withdrawn because it contains information that has violated privacy laws.

France has a long history of using such practices to censor news.

In the early '60s, the country was waging a colonial war in Algeria. Then, for the most avid news readers, the game was to get the weekly magazine L'Express at the kiosk as early as possible before French authorities seized it...

What happens if the magazine is on your iPad?

Since with the iPad, Apple is seeking to control the entire value chain, from approval of iPad apps, through to delivery, and the look and feel of the media -- it must also have an iDelete capability built-in.

Mr Filloux makes an excellent point that even if a newspaper is willing to fight a court battle against parties that would seek to suppress a news story -- Apple could be ordered directly by a court to delete that content.

The truth is that, given the pattern of legal actions against the press in France, it is more than certain a French judge will be tempted to request an immediate remote deletion of presumably infringing content.

Wow. The very existence of the iPad threatens free speech rights. Or to put it another way, dominant, proprietary closed systems endanger free speech. He's right.

But, there is always the Internet, an open platform...

Of course, we have the option to go on the Internet, but it is exactly as though, in the '60s, the journalists of L'Express had mimeographed and distributed their Algerian war stories by hand in the streets of Paris. Nice move, but tiny audience and no money.

Mr Filloux has done an excellent job in highlighting the risks to news journalism from a dominant and closed media tablet such as the iPad.

And we will have the iDelete function working, even when we don't know what was deleted. Why? Because we can. Because it will be touted as a benefit, it's an 'auto-correct' feature that fixes mistakes such as "the capital of Venezuela is Paris." It's a way of ensuring accurate information.

And a way to potentially suppress accurate information.

Yes, news organizations could fight court battles over the accuracy of their stories, and maybe even win, and have their deleted articles reinstated. But that's an expensive way to uphold free speech rights. The last time I looked the newspaper publishers were losing money -- lots of it.

[Earnings season: Newspapers finish 14th straight revenue-losing quarter; some intel from Wall Street filings]

I guess fear of news censorship is a moot point, at least here in the US. With no money for investigative reports there hasn't been much news published that risks being covered up.

A weak newspaper industry is enough of a threat to free speech and the great muckraking traditions of the press.

It is well put in this December 8 Op-Ed from the Wall Street Journal:

...newspapers have prospered for one reason: the trust that comes from representing their readers' interests and giving them the news that's important to them. That means covering the communities where they live, exposing government or business corruption, and standing up to the rich and powerful.

Well said by Rupert Murdoch.

If trust is important to success, will a newspaper on the iPad inspire trust? It doesn't look that way.

- - -

Please see:

Analysis: iPad Is an iDRM Storefront For Apple Ambitions To Dominate All Digital Media Sales

Analysis: DRMStore Wars Begin...Bad News For E-Books, E-Readers But Good For Notebooks