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A Nemo blog. Dealing with uncommon cents.

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[*NB: The idea of the collapse of newspapers is moving at the speed of light across the 'net. In the hour since I posted this opinion I came across multiple arguments, all very succinct. Here's one from David Eaves - Newspapers' Decline is a Sign of Democracy's Health not a Symptom of its Death. I will attempt to keep this piece updated as the conversation rolls out.]

Jay Rosen on the Huffington Post Investigative fund.

[Latest edit March 29th 12:17PM PST]

Having spent the last decade [at least] discussing the major label recording industry’s supreme mishandling of how its customers embraced the digital music file and how they quickly became savvy internet users sharing those files with millions of other users – basically penalizing the industry for scrapping the single and charging too much for an inferior product, the CD – my interest now turns to the fate of the newspaper industry.

There are some parallels across each of these industry’s woes but it is worth pointing out that the newspaper industry is not being penalized by its customers [readers] for doing anything wrong ala the music industry [weak overpriced product, suing its customers,] rather newspapers are victims of circumstance; technology, shifting reader habits and ubiquitous access in an increasingly mobile world. Unlike the music industry they were not late to the online game even though their initial foot-dragging suggested that like the music industry they would much rather wish the internet would go away.

I must give credit to the labels as I sense that they are beginning to find new routes to profits from music sales. At a recent music industry conference in Nashville I listened to Rio Caraeff, EVP eLabs at Universal Music Group, give the keynote speech. He lamented the loss of the experiential, tactile nature of recorded music when it came in its vinyl form [his father was a famous album sleeve director.] The digital file, he argued, had stripped the experience from the music – listening to music was now a flat and unemotional activity compared with holding a well-designed sleeve filled with images, lyrics and artwork. Because of this flat experience he predicted that there was no future for selling recorded music directly to music fans.

He mentioned one area of success for Universal; the advent of the video game. An all-encompassing experiential medium that included more than just the games – the games came with a community of like-minded people and music. They also generate millions of dollars especially through the subscription fees that are required for online gaming activity.

He also said “the browser is the new iPod.”

So, how does the newspaper industry embrace the browser, what does its “video game” look like?

Umair Haque

The first thing that they must do is abandon the old business models as an idea. Those models can not be re-created for the web. As Umair Haque writes on the Harvard Business blog – “companies and investors focused on business models are simply applying yesterday’s obsolete logic to today’s novel problems.” He goes on to point out that nowadays it is about “making something valuable” – “When we can make valuable stuff, there are a plethora of business models to choose from, some old, some new, some untested, some tried and true. When we can’t, no amount of business model innovation can save us from implosion.”

Referring to Caraeff’s contention that the experience around music is what we relate to the most, why is it that newspapers, that are experiential and tactile, are struggling to maintain readership offline while attracting millions of readers online? Maybe it is just that news is not sexy. Or as Haque points out do they need to just keep providing “valuable stuff” and scrap old business models?

Here’s the quandary – newspapers have to shoulder the enormous burden of overhead required to run a newsroom that collects the news in the first place. What is clear is that the online advertising dollars for newspapers are not filling the gap in the loss of revenue that occurred in print editions – just as digital music sales are not replacing the sales of CDs. So should newspapers start to charge for access to their websites?

Clay Shirky

I have been following the thought leader and writer Clay Shirky via his web site and Jay Rosen, who teaches journalism at NYU, via Twitter. Both of these men have strong opinions about the future of news media, note news media not necessarily newspapers. At the recent SXSW Interactive conference that I attended, Shirky showed the audience a slide that read – the internet is the largest group of people who care about reading and writing ever assembled in history…. A simple and very accurate statement. We have ubiquitous and easy access to more text now than ever; it just needs to be filtered. Which is what newspapers always did for us – as the New York Times masthead proclaims still ‘All the news that’s fit to print.’

Should newspapers be allowed to die? What would replace them?
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This year’s SXSWi Conference in Austin Texas can only be hailed as a success. I’m unable to distill all the great information that I gleaned into one post so I will spread it out in posts here over the next few days. This year’s speakers included Chris Anderson, Guy Kawasaki and Clay Shirky to name a few. It was Shirky who left me with the most memorable quote of the week – “the internet is the largest group of people who care about reading and writing ever assembled in history…” He was defending internet use against the charge that it was destroying the book publishing and newspaper businesses. The best panels were the ones that included people whose thinking arrived at similar positions – the internet isn’t destroying anything it is merely the great leveler, perhaps the greatest in history.

Austin Kleon, an Austin, TX based illustrator captured the first panel of day one at the conference. This image sums up how I felt at the end of each day of panels…..

Obama’s viral timepiece.

These days the advertising and marketing world is all abuzz with phrases such as – Social Media, Social Advertising, Facebook Ads, Mass Media Networking Advertising…..etc, etc.. In the last two weeks I have been a panelist at the L I S A seminar in Portland and the Hawaii MusicTech Conference in Honolulu. L.I.S.A., which is an acronym for Lessons In Social Advertising, was aimed at marketers and advertisers who [for some reason] don’t understand social networks or haven’t yet worked out how to advertise effectively to them. It focused on topics such as ‘What is social advertising?’ and ‘How do you get young people to recommend your brand?’ The Hawaii MusicTech panel discussed how musicians could effectively use social networks such as Facebook and MySpace to reach an audience and communicate with them.

Two sides of the table as it were. One group wants to advertise, or push, their messages to a mass audience, while the other wants to create a network of like-minded people who hopefully will pull content such as free MP3s and then “evangelize” on behalf of the musicians by spreading messages by electronic word of mouth. With no hint of schizophrenia I happily migrate between both camps.

To understand and embrace social networking is to place the idea that says “technology makes this possible” to one side and embrace the idea of the basic human need to stay in touch with other like-minded people at all times. As Clay Shirky says “The desire to be part of a group that shares, cooperates, or acts in concert is a basic human instinct.” Think about rock concerts for a minute…..

Most people that take a position on social networking and advertising come at it from a technological point of view, as in “technology has created the means for everyone to be connected and to stay in touch.” I disagree with that statement because it removes nature from the game. It is entirely natural for humans to want to interact as often as possible as we are all social animals. Cities are no more artificial (technological) than the hives of bees. Therefore the Internet is as natural as a spider’s web. People who believe that technology is driving our interactions are missing the point – we ourselves are technological devices, invented by ancient bacterial communities as a means of genetic survival. Bottom line – social media is as natural as apple pie as we all want to be as connected as possible – we can’t help it. [A really good book from which I have borrowed some thoughts is 'Straw Dogs' by John Gray, professor of European thought at LSE, published in the UK by Granta.]

Online networks might be seen as antidotes to boredom at work, school or college. These new social networks do more than transmit information about their members, they change behaviour by propagating moods. These days we can all share “news” really fast, even about ourselves – for example, my Facebook or Twitter status might say “I’m heading to the beach in Waikiki…” and the mood that simple statement makes might become very contagious.

The Internet confirms what we have all known for a long time – the world is ruled by the power of suggestion but in the case of social networking it is “influencers” that lead the suggesting. Then suggestions might become “group think.” John Gray writes – “in evolutionary prehistory, consciousness emerged as a side effect of language. Today it is a by product of media.”

So, the question currently being asked by companies and advertisers is “how do we market and advertise to social networks?” Having to ask that question suggests the rocky ground that online advertisers are standing on. For instance, Jack Myers sees nothing but doom and gloom in online marketing: He says “Advertising is simply not a sufficient revenue model to sustain content companies into the long-term future.” And goes on -

“I have preached evangelically for nearly three decades about the bifurcation of the media and advertising marketplace into 1) a transactional commodity business model and 2) a relationship-based brand-focused premium marketplace. Most media companies and agencies are investing appropriately in the technology resources required for their transactional businesses. [But] Brand building, relationship-based business models and premium-priced enterprises require completely new and innovative models, and can take years before they generate returns that justify the investments. Industry realities place enormous pressure on executives to adhere to traditional business models, and companies that foster and advance innovation are often drained of resources before they can deliver the return-on-investment demanded by the stock market, equity rights holders and VC investors. Typically, implementation of new business models must be forcefully imposed by the CEO, need the blessing of investors, and they cannot be managed by executives trained exclusively in the ways of traditional media and advertising.”

Neil Perkin in a slideshow entitled ‘What’s Next in Media’ that can be found here says that today – Social Media is counter-intuitive to communications media. Here’s one of his slides that shows just how counter-intuitive things have become for marketing online:

Meanwhile, the old way of marketing is through push messaging and therein lies the mistake of many of today’s marketing managers. Take a look at this slide to see how things don’t stack up nicely into a marketing message or ‘drop’ that has been long planned waiting its turn on the calendar.

The Linear model above reminds me of traditional TV and Print advertising. Some people in advertising and marketing today still view the Internet as a “channel” rather like TV.

Let’s consider another buzz phrase – viral marketing online. The success of YouTube in extending an advertising campaigns length and reach is now common currency. We’ve all seen the videos, perhaps even this one – My girlfriend and the Wii Fit. 2.2 million views and going strong.
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