Hacks and geeks ponder media’s ‘Humpty Dumpty’ moment at Media 2010

Hacks and geeks ponder media’s ‘Humpty Dumpty’ moment at Media 2010

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How is the media handling the digital ecosphere? Matthew da Silva discussed the view from the wall with key players in attendance at last month’s Media 2010 conference, a Sydney ideas forum sponsored by Fairfax Digital.

The hammers of cyberspace are breaking down the 150-year-old business model of news, but large media firms seem unwilling to change. Perhaps these companies, which grew plump and unwieldy during their gravy years, are too big to adapt to a social web.

But as I learnt during the presentations and in one-on-one interviews with some of those holding the reins, they are searching in earnest for ways to handle a rapidly-evolving digital ecosphere.

“Technology has fundamentally changed the way people consume and use media,” Fairfax Digital CEO Jack Matthews told the 450 people at the Media 2010 conference, an event that is in its third year.

He drew on The Wealth of Networks [large PDF], a book by Yochai Benkler published by Yale University Press about the shift from the industrial past to the digital present.

“In that industrial model, it’s characterised by high cost of entry, limited content control distribution and a very passive, undifferentiated audience,” Matthews told the audience. “You can understand, in that environment, how media companies succeeded. They controlled content and distribution and, as a result, they really had a huge influence in driving cultural and social and political issues of the day.”

Search engines and vertical ad portals are not the only tools chipping away at the twin foundations of the industrial media model.

In addition to blogs and hyper-local sites, single-issue sites and special-interest sites, social media platforms may be the most percussive of all.

Not out of the woods yet

Photo: Gawker Media

Fairfax Media — the parent of Fairfax Digital — reported a $148 million profit for the first half of FY 2010, compared to a loss of $380 million in FY 2009. Online revenues alone rose — by 8.1 percent to $108 million, according to Crikey — but not enough to offset big losses in other areas, so that overall revenues dropped 12 percent to $126 billion.

Mark McDonnell, a senior analyst at BBY, told Lateline Business that the positive result reflects cost-cutting and efficiency measures put in place in recent years.

According to Vocus Media Research, in 2009 in the US about 293 newspapers folded and 45 launched. About 421 journalists were laid off from the newsroom of major newspapers.

“2009 was a tough year for everyone and we’re all glad it’s over,” said New York Times Digital Operations CTO Marc Frons when I asked him for comment. “But what we’ve seen, even more toward the end of the year, is a pick-up in advertising both in print and online.”

Sarah Granger, a journalist and new media strategist who runs consultancy PublicEdge, thinks the media is still in the midst of a shake-up.

“I think that it’s going to be another five years before things normalise and I think that the media landscape then is going to be much different than it is now,” she told me in a phone interview.

Print and online managers puzzle over what features news needs to survive the onslaught and prosper going forward.

The New York Times recently announced that it would introduce a metered model for access to news in 2011.

“There is no silver bullet and I think that is one thing the industry has to understand,” said Frons. “There have to be many smaller silver bullets.

“I do think the iPad will be a very important device in the portable reader category,” he said. “I think it has the potential to redefine that category and help build it. I wouldn’t sell Apple’s marketing muscle or ability to create an ecosystem short. They do an excellent job as they’ve proven with the iPhone.”

Fairfax announced last month that it would release iPhone apps this year and charge for them.

Such devices cover distribution, as does Fairfax’s move to partner with APN in classifieds delivery.

New rules for king content?

But what about ‘content’, that catch-all that subsumes everything from investigative journalism to classified ads?

When I asked him before the event about social media in the newsroom, Matthews evinced resignation about erosion of his company’s business model by platforms such as Twitter.

“I think Twitter is a fantastic opportunity for us to get our message out. But it clearly is also just one more step down the path of de-aggregating what used to be a very simple way to get content. That’s just the world we live in.”

“It makes more sense when you put it in context and you think about what things were like before television,” said Granger. “I think that helps put it into perspective for people. They’re not going to be completely without a career. It just means things are changing.”

Richard Titus, CEO Associated Northcliffe Digital (seated, centre) talks with Jack Matthews, CEO Fairfax Digital (standing). Conference photo credit: http://raycashphotography.com

Associated Northcliffe Digital (AND) CEO Richard Titus, who runs a number of Britain’s vertical ad portals, is experimenting on his own patch to deal with what Matthews called “the singularity”.

These include tracking clicks on his sites so that targeted information can be delivered to people.

Attention is one of today’s biggest scarcities, Titus told the audience. In January, eight billion Google and Bing links were clicked, he said, with six billion links clicked in social media.

“That’s almost 75 percent of the same traffic,” Titus told the audience. “Except, actually, I would argue the 75 percent is more valuable because most of those links were from me to my friends. So they’re endorsed links, as opposed to what I call ‘click and pray’, which is the search experience.”

Reuters Chief Scientist Nic Fulton thinks that one way for newspapers to find themselves is to deliver content that is more like web experiences.

“Make it personal,” Fulton told me in an interview. “Make it a mixture of what your friends are saying, what the news sources of the world are saying, [and then you can suggest] ‘Oh, and here’s classified ads that might be of interest to you’.

“I can see that happening and maybe it won’t be print, maybe it’ll be tablets and e-readers and things. But there’s going to be something because people are lazy.”

“The bar has been raised at this point to a place where the public is getting used to participation,” said Granger, “and so the companies need to be directly responding to some of their readers in order to stay in the kind of popularity that they seek in comparison with other publications.”

Matthews says journalists at Fairfax Digital are not instructed in how to curate information using social media. “Right now our editors gather content from lots of places.”

“It’s like if you play guitar,” he told me in an interview. “Someone said, ‘If you can’t sing it you can’t play it’. I take it that if you can’t think about these things, you can’t do them.”

But the company is working on doing them, as well as just thinking about them, Matthews said.

“There’s a few interesting technology things we’re doing that I can’t talk to you about but that will be very exciting if we go through with them, because they are technologies that allow us to survey the information ecosphere and draw some trends out of that and focus on those.”

“Most newsrooms today are under-staffed and under-resourced,” said Tony Serve, a Perth journalist and lecturer, via Twitter. “Many see social media journalism as something they just don’t have time for.”

To automate information collection, global news service Reuters made a Twitter earthquake detection system “early on” but gave it up due to API problems.

“We put in a lot of keywords and then we had it tracking the keywords, because essentially you’ve got to get rid of the noise,” Fulton told me.

“Earthquakes are a good example because it’s a word that most people will say. It’s far more difficult to get other things.”

Reuters is another diversified provider and derives the vast majority of its revenues from “extremely high-end” business news subscriptions.

“I wouldn’t say the consumer [news business] is losing money. That would be a bad business,” Fulton told me. “We’re trying to make it as break-even as possible.”

“I believe there are immense opportunities for everyone,” said Granger. “The problem is that a lot of the people in news companies that have more traditional media are not skilled in online content creation or in online business models.”

Engaging with the people

AND has started to operate sites under the Local People banner, with each site built around a community of 20,000 to 50,000 people.

“The idea is to bring these people together in a community forum which integrates into other social networks but also has a business directory, which helps us drive relationship with the local small- and medium-sized enterprises,” Titus told me in an interview.

An affiliate of Daily Mail and General Trust, a diversified media company that also owns DMG Radio Australia, it operates the Daily Mail website and numerous classified sites.

“We’re very blessed that our newspapers are very profitable still,” Titus said. “The Daily Mail is one of the most-read newspapers in Britain and is beloved by its audience…. The digital businesses are actually doing better than their competitors in the market right now.”

Local websites were also discussed by Adrian Holovaty from MSNBC.com, which recently bought Every Block, a business Holovaty started after extracting crime data from a Chicago Police Department website and repurposing it in a visual mashup.

“When I launched that in 2005, I just did it for fun,” Holovaty told the audience. “I began to think, ‘Wow, that’s a really powerful concept, taking that information that already exists in other places and just tweaking the organisation of it.’ And, particularly, offering the organisation by city block and these microscopic little geographic areas.”

Holovaty secured a two-year grant from the Knight Foundation and started to build Every Block, which covers 15 American cities.

Added to the crime statistics are newspaper articles, blog posts, real estate listings, photos, street closures, new businesses, property transfers, restaurant inspection reports, lost-and-found postings and community announcements.

“It’s just pattern matching,” said Holovaty. “It’s completely automated.”

Essential Baby, which Matthews told me has “a few more than 100,000 members”, has a different production method.

“They contribute 10,000 posts per day in that little social network. We provide rich editorial content. They provide a lot of editorial content, because communities are about talking to each other, not talking to the media provider.

“We monetise that [content] through display advertising or appropriate, contextual ads. We have a babysitting service that we’ve now bolted in there, so they can get a babysitter and we clip the ticket there.

“Pretty soon, they may want a people mover instead of a Porsche. There is this community of interest. That community is not in conflict with Facebook or Twitter.”

“People want direct engagement with the writers; they want to feel connected to the news and to the people who are providing the stories,” said Granger.

“There’s a business model there,” said Reuters’ Fulton. “It’s just got to find itself.”

Videos of all speakers who appeared at Media 2010 can be played on the event website.

Matthew da Silva writes feature stories to fulfil a dream after working in communications and technical writing roles for two decades. He grew up in Sydney, lived in Japan for nine years and now lives on the Sunshine Coast, in Queensland. He blogs daily at Happy Antipodean.

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