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Ken Doctor is an analyst with a ringside seat at the greatest story ever told about the global media industry. Fully employing more than 35 years of experience across a wide range of media, he’s become a go-to speaker, press source and consultant for legacy and emerging press around the world,... More
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  • The USA Today: Too Little, Too Early

    It's hard to know what to make of the USA Today re-do. It touts itself as a re-imagining, which may be a bit hyperbolic. God only knows how much time people spent on the redesigned logo (must-read Romenesko on Gannett's "Cool Balls" and their spiritual purpose). I think they could have saved a lot of time and money and shopped at Office Max. You can buy 1/2-inch Fluorescent Inventory Circle Labels online for only $6.49. We've only seen the iPad and iPhone redesign versions so far - web version comes over the weekend - but it's underwhelming at this point, and reminds us that USA Today's problems are way more than skin-deep ( I outlined those issues in June: "10 Snapshots on Larry Kramer's USA Today").

    My guess: in a rush to do something to reverse the USAT's flagging fortunes, Gannett and/or new publisher Larry Kramer decided to take one big public step. Change the look first - and then get to the deeper, underlying questions of identity, purpose, storytelling and content, all of which are core issues with the aging product. (Yes, in the digital age, midlife crises start soon after you hit 30.) Looked at this way, the redesign is a platform. It's a platform to do better content, to do state-of-the-art customization and to catch up with the video wave sweeping its peers ("The Newsonomics of Leapfrog Video"). Maybe, that's what's intended here, but here's the rub. Tell everyone you've "re-imagined" the product, and they'll try it out - again. If they arrive and still don't feel newly compelled to come back, you'll have a harder time getting them to come back for the next re-launch. Or, if there's not a next relaunch, they may never find the storytelling improvements we believe Kramer and his people have planned.

    Today, though, what do we find in the digital re-do, and let's be clear, it's the digital re-do, in the age of fast-declining newsprint, that matters most:

    • Pictures. Lots of pictures, and given smaller-than-desktop screen, size, lots of unidentified thumbnails, too small to be intriguing. We know lots of video is planned, and again the still platform may soon get some legs.
    • Graphics: On the left rail, the kinds of data and visualization that we've got to expect from USA Today. An appropriate Life snapsnot on the lower left of that page. Kramer has talked about customization - an absolute essential for weather, sports scores, travel, etc., but only the stock portfolio looks customizable at this point.Without customization, these widgets don't do any more than what I can get in a hundred places. With it, they beginto combine my data in one place.
    • Content: The lead story, as I write, is "Middle East protests spread to more countries." Really? If USA Today zigs, less well, as everyone else in the news world zigs, what's the point of coming here? The content looks like the same content USA Today has always done, minus the differentiating "we-ness" of its headlines, while sometimes annoying and easy to satirize, at least made it unique. In fact, these versions - I haven't yet seen the paper today - seem more generic, rather than less, than the old USAT.
    • Advertising: I'd have expected share-of-voice, sponsorship advertising to accompany a big splash like this. Big names sponsoring sections is a leading edge of digital ad revenue for news companies - old ones like the Journal and Times and new ones like Quartz ("The Newsonomics of Quartz's Business Launch"). Yet, we only see bottom-of-the-page footer ads, and the widgets like "Markets" and "Airport Delays" - both highly sponsorable -don't even have paid ads, but in-house ones for USA Today apps. This is a company that needs revenue. Again, it seems like a premature launch.

    Let's give Larry Kramer the benefit of the design doubt. He and his new crew must have a number of tricks up their sleeve. Gannett has talked about marshalling the forces of 5000-strong company for stories and video. That's a synergistic approach on which many big company failed plans have been built. Technologies will make it easier to move content around and present it quickly, though legacy cultures and resource constraints will complicate the work. Still Gannett's 82 newspapers will be an awkward source of national content, given their smaller community markets. Gannett's 23 TV stations, on the other hand, could provide a more useful supply of bigger city news, if the content can be efficiently grabbed and in a timely way.

    Content, and video content, is one thing. Identity - why anyone should turn to USA Today in a sea of digital choices? - is another. The paper was born in Reagan's '80s, its sunny "We're Going on Vacation" headlines reflecting its time. If it's still morning in America, it's way too cloudy to tell.

    Al Neuharth built a populist paper, one matched to its time. Now in the take-no-prisoners time of polarized political debate - and the clear sense among too many that we're not all in this together, the "we" being a talking point and not a reality - it is out of touch. It may have, as a smart analyst suggested to me today, a CNN-like problem, occupying a middle that no longer exists; yet it doesn't even offer up enough of the deeper journalism of a CNN.

    USA Today will soon be the only Gannett daily without a digital circulation plan. It will be the only national daily without digital circulation plan. That means that unless it creates a breakout product for audiences - to bring in more premium-paying advertisers - its survival strategy is in doubt. Today's launch may be a step in a new direction, but it's a small one.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Sep 15 1:10 PM | Link | Comment!
  • The Newsonomics Of Israel's First Paywall

    First published at Nieman Journalism Lab

    Some people will tell you that that they're tired of hearing about the digital circulation successes of The New York Times, the Financial Times, and The Wall Street Journal. Their successes are great, but their applicability to other dailies is minimal, the thinking goes. There's some truth there, of course: The sheer scale of those enterprises makes the revenue impact really impressive. But the fact is that hundreds of dailies of all sizes all around the world are busily constructing digital circulation strategies.

    At a time when it is becoming harder to find companies that don't have paywall plans than those who do - just this week 41 Polish titles organized themselves into a buying co-op, using Piano Media - let's go micro this week and consider the newsonomics of one new digital pay system. Within the thinking of Israel's first paywall, we see the challenges of the moment, the calculations, and the 2012 sense of testing and experimentation - and how digital circulation and reader focus is actually providing a rationale for hiring journalists and producing more original, unique content ("The Newsonomics of Majority Reader Revenue").

    Haaretz is Israel's oldest daily, founded in 1918. Amid all the tribulations of Israeli and Middle Eastern history over the next century, it's often been a valued, rational voice. In short, it's more about journalism than partisan view. Since 1997, it has carried The New York Times' International Herald Tribune within its daily English-language edition. As a daily newspaper, it faces all the challenges of its contemporaries around the world: declining print circulation, loss of print ad revenue, and a rocky transition into the future.

    Haaretz put up its digital circulation system in April, offering 10 free articles a month of proprietary content; breaking news remains free to view. Though its English-language circulation is a relatively small percentage of its Hebrew-language edition's, it launched its first paywall around the English edition. Now, it aims to soon extend that system, with early learnings, to the main edition. Therein comes the first lesson that all publishers can learn from: Start small and test, if and as you can.

    The early English-language numbers are small by one measure, but impressive by others. "We signed up 1,500 subscribers in the first two days," says Lior Kodner, head of digital. "We thought it would take months."

    Fifteen hundred isn't a large number, but in the roughly six months since paywall launch, Haaretz English-language digital subscriber total now surpasses its print number. That number isn't publicly released, but we can estimate it's less than 10,000.

    In anticipation of its paywall marketing, Haaretz added original English-language content. Until paywall planning got real, Haaretz's English-language edition has been a translation of its Hebrew-language journalism. Even though Haaretz has cut dozens of other positions as revenues declined overall, Haaretz added 10 positions, seven of them full-time, based in New York, London, and Israel. The positions include a focus on investigative and in-depth reporting. In addition, the website moved to 24/7 coverage.

    That new content - even with a paywall - has meant an increase of traffic of 5-10 percent, Kodner says.

    Haaretz borrowed its pricing strategy from The New York Times. Along with $2 a week (with an annual commitment) or $2.38 a week (with a monthly commitment), it offers the usual $1 a week intro rate for the first month. Seventy-two percent of subscribers take the annual offer.

    If you receive the six-day-a-week print edition in Israel, digital access is now included, part of its all-access offer. If you subscribe to the weekend (Friday) paper, you get digital access for half-price. It also borrowed ideas from the Journal and the FT, including this FT-like grid showing readers their options and what they get for their money very specifically.

    About 30 percent of print subscribers have signed up for digital access, with smartphone usage already exceeding web use.

    Why start with the English-language product? "This audience is more familiar with paywalls, and paying for content," says Kodner. "Our Israel audience is not ready yet."

    The Hebrew language paper is clearly the main business, at 60,000-plus circulation. While no date has been set for a paywall for that content, "English is the test case for Hebrew," Kodner says, and work is proceeding towards that launch.

    Haaretz is taking great care as it proceeds: Its influential paper can cost more than three times what other dailies do, and there's newer competition. Sheldon Adelson, in the news lately for bankrolling Republican candidates in the U.S., publishes the pro-government free daily Yisrael Hayom. That freebie, plus the usual assortment of newspaper pressures, is causing chaos overall in Israeli newspapering. Digital circulation for Haaretz, as increasingly is true around the world, is seen as a survival strategy. Circulation now accounts for about 60 percent of total revenues, up from 50 percent just a year or so ago, given the ad revenue turndown.

    We can derive larger, even universal, truths from the Haaretz experience:

    • If you don't charge them, they won't pay. Simply making a wanted product paid brought in early and sustained money. The fact that 1,500 people subscribed within two days parallels a common finding of the pay revolution: There's a substantial core of customers who will pay even before they hit a paywall. Haaretz finds that a third of subscribers pay up early. Just tell them that it's now paid content, and they ante up.
    • Make mobile real. In July, it added an iPad app (joining iPhone and Android apps, which launched last November) in advance of the pay system. It has begun using the power of the device, offering a tablet-friendly recounting of the history of Oswiecim, the town in southern Poland where Auschwitz was constructed. So far, it's seen more than 15,000 downloads of the iPad app.
    • Build a database, early. When Haaretz offered its free phone apps, it required registration. That gave it a database of 60,000 users - of great use when the paid program launched.
    • Monetize far-flung audiences. Eighty percent of Haaretz's English-language online audience lives in the U.S. and Canada. Print economics didn't justify North American printing of editions. The audience was there, the brand identification was real, and the willingness to pay existed. A digital circulation system provided a new revenue on-ramp. Language provides one segmentation of customers; geography provides another. In the U.S., as baby boomers retire or flee south for winters, the snowbird market, long talked about, may now become real through targeted, seasonal, paid content.
    • You'll find customers in odd places. Haaretz is finding new paying customers in the wider Middle East - in Kuwait, in Lebanon, and in Iran. "We got people from Iran who complained to us online that our checkout system didn't work. "It turned out that their government is blocking the transaction," says Kodner.
    • Back up your offer with…journalism. It's tough to talk cost-cutting publishers into new investments in journalists. But Haaretz took that step to fortify a business opportunity. Too often, publishers have gone to the pay market with newly cutback products - ones that hardly generate enthusiasm among customers. As with investing in news video ("The Newsonomics of Leapfrog Video"), publishers must add as well as subtract if they are to find a path to growth. "You can't just say to people it's time to pay. You have to give them a reason to pay," says Kodner.

    So far, we've seen widely varying paywall results. At worst, digital circulation strategies are stabilizing circulation revenues. At best, we see companies like The New York Times and Star-Tribune reaching for high-single-digit increases in circulation revenue. As we go forward throughout the next year, we're seeing a real playbook being written - a basic checklist of a dozen or so strategies that make all the difference in revenue success. Haaretz now contributes to that playbook.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Sep 15 1:08 PM | Link | Comment!
  • The Newsonomics Of Breakthrough Digital TV, From Aereo To Dyle And MundoFox To Google Fiber

    First published at Nieman Journalism Lab

    In 1998, when Rupert Murdoch's News Corp. bought the Los Angeles Dodgers, the storied franchise was worth $380 million. News Corp. sold the team in 2003 for $430 million. After winning the ability to negotiate a new multi-billion sports TV contract this fall, they sold earlier this year for $2 billion, blowing the lid off sports property values.

    In 1994, the San Diego Padres were worth $80 million. After recently signing a 20-year deal with Fox Sports for $1.2 billion, they sold (pending league approval) for $800 million.

    Meanwhile, in 2000, the Los Angeles Times was worth at least $1.5 billion when it was sold as part of Times Mirror to Tribune Company. Today, as it is newly readied for market out of the Tribune bankruptcy, it would go for something less than $250 million. The San Diego Union-Tribune, once valued near a billion dollars, sold for about $35 million in 2009 and about $110 million in 2011.

    It's a reversal of fortune: Newspaper franchises that once outvalued baseball teams by 3-1 or 5-1 or 10-1 now see the inverse of that ratio. Why?

    Two letters: TV.

    Those numbers tell us a lot about the continuing power of television, in worth, in value creation, and in the news business itself. If we look just at recent events in the ongoing transformation of broadcast and cable to digital, we now see multiple breakthroughs on their path to digital. They give us indications of what the news business, video and text, will look like in the coming years. While we can argue endlessly about the relative virtues and vices of print and TV news, we must acknowledge the relative ascendance of TV and think about what that means for the news business overall.

    TV's revenues are holding up far better than newspaper companies', and TV is better positioned to survive the great digital disruption.

    TV has continued to have great audience. Nearly three in four Americans tune in to local TV news at least weekly, surpassing newspaper penetration, even as Pew Research points outthey mainly do it for three topics: breaking news, weather, and traffic. Further, it retains great ad strength - 42 percent of national ad spending, matching the actual number of minutes Americans spend with the medium and making it the only medium still ahead of digital spending as digital has surpassed print (newspapers + magazines this year, both in the U.S. and globally). Yes, TV remains a gorilla. While Netflix won headlines when it announced it had streamed one billion hours of TV and movies in a single month, that huge number compared to about 43 billion hours of U.S. TV consumption, according to Nielsen's 4Q 2011 Cross-Platform report.

    In a nutshell, that's the difference between TV and video, circa 2012. Video is the next wave - incorporating TV perhaps, but still the very young kid on the block.

    Today, TV is no longer a box. Sure, even with all the Rokus, Boxees, and Apple TVs, it seems like TV isn't yet an out-of-the-box experience. But with Hulu, Netflix, and Comcast's Xfinity, it's emerging quickly, escaping our fixed idea of what it once was - the boob tube in the living room. If it's not just a box anymore, it's a platform. From that platform, we see both the disruptors and the incumbents doubling down their bets. As in most things digital, few of these launches will be huge winners - but some will drive big breakthroughs. Some of the iconic legacy companies we've long known will be absorbed in the woodwork as new brands supplant them. Consider the spate of recent innovation, as we quickly assess the newsonomics going forward:

    • NBC, bashed up and down Twitter, nonetheless proved out a new business model with its multi-platform approach to Olympics coverage. Whatever you think of the tape delays or the suspended reality of Bob Costas' gaze, NBC made the economics work, surprising itself and others. Its live streaming has ratified the development of cable- and satellite-authenticated, all-access digital delivery. That reinforces cable/satellite value. Further, it whetted prime-time viewing appetites, boosting ratings and earning NBC more ad revenue than it had projected. That's icing on the cake for NBC, which, under Comcast ownership, has rocketed forward in digital strategy. The network has made a number of moves to transform itself into a global, video-forward, digital news company, joining the Digital Dozen global news pack. Recently, it bought outMicrosoft's share of, a leading Internet news portal. It immediately rechristened it In short order, it appointed Patricia Fili-Krushel as the new head of NBCUniversal News Group, an entity made up of NBC News, CNBC, MSNBC, and the Weather Channel. A former president of ABC, with 10 years of experience at Time Warner, she heads a growing news operation. Earlier this year, NBC combined its sports properties into a unified NBC Sports Group, merging NBC's broadcast sports unit and Comcast's regional sports networks. NBC is growing out of its digital adolescence. (See "One year after she was hired, Vivian Schiller's 'wild ride' at NBC is just beginning.")
    • Aereo, the TV startup funded by media magnate Barry Diller, is expanding its footprint from its current New York City base, and starting to offer multiple promotional deals. Diller's in-your-face challenge to over-the-air broadcasters (CBS, NBC, Fox, ABC, CW, PBS) takes their signals and delivers that programming via the Internet. It charges consumers $12 a month, or as little as a dollar a day. They can then watch those TV stations on up to five devices; in addition, they can deliver these signals to a TV via Apple TV or Roku. Aereo also offers DVR capability, with 40 hours of storage. It's classic disruption, with Aereo upping the pressure on the cable bundle and messing with the "retrans" fees that broadcasters get from cable companies to run their programming. Is it really legal, as a court recently found? It may be as legal as Google presenting snippets from every publisher and directory provider.
    • Local broadcasters - representing a broad swath of ownership groups organized in a newer company called Pearl - are bringing local TV to our mobile devices themselves. Just a week ago, Metro PCS started selling a Samsung Galaxy S phone with a TV receiver chip in 12 markets. That's just the first push of Mobile Content Ventures, a collection of Pearl, NBC, Fox, and others. Expect mobile TV, marketed as Dyle, to be available for other phones and tablets, either with built-in chips or after-market accessories - although price points are an issue, with $100-plus premiums likely over the next year. So what does this innovation mean? Simply, that broadcasters are going direct to mobile consumers - no Internet needed, no data charges applying, and maybe providing more consistent video connectivity - with live programming; whatever is on TV at that moment is also on your phone or tablet. Broadcasters just use part of their digital signal to, uh, broadcast to us on our phones. It's that antenna, and its cost, that's the issue. Business questions abound. Given the timing of the launch, Dyle seems like an aspiring Aereo killer, and certainly broadcasters would like to see it do that, if further court action doesn't. More deeply, though, broadcasters want to maintain their direct-to-consumer brand identity as they do a balancing act and try to keep those retrans fees from cable and satellite companies. They don't want to be left out of the digital party.
    • Social TV pulls up a chair. First it was startup Second Screen, matching tablet ads to real-time TV viewing. Now ConnecTV, partnered with Pearl, is trying to corner the activity as it takes off. Its promise: "synchronization of local news, weather, sports, and entertainment programming along with social polls." Ah, synchronicity, a Holy Grail of our digital aspirations. Last week, Cory Bergman (a man of at least three full-time digital lives, with MSNBC, Next Door Media, and Lost Remote) sold his Last Remote social-TV site to Mediabistro.
    • Then there's the disruptor of everything on planet Earth, Google. The company recently announced it is putting another $200 million into YouTube Channels, building on its initial $150 million investment. The move emphasizes how quickly YouTube is growing beyond its homegrown, user-generated roots. Now partnering with dozens of prime video producers, creating more than 100 new channels, it is trying to establish itself in viewers' lives as a go-to video aggregation source. Major video producers are still wary of Google getting between them and their customers, both ad and viewer, but many others are signed on. Meanwhile, in Kansas City, Google Fiber TV (TV that's healthier for you?) launches. It's a rocket shot at the cable, telco, and satellite incumbents. It's also a demonstration project: providing more, cheaper. The more: interactive search for TV that combs your DVR and third-party services such as Netflix. (Yes, The Singularity ["The Newsonomics of Google Ad Singularity"] marches on.) Google Fiber TV combines DVR and third-party (Netflix-plus) search. Its DVR holds 500 hours of storage of shows in 1080p and the ability to record eight TV shows simultaneously. Bandwidthpalooza. Google's goal: Toss a hand grenade among the TV-as-usual business models, and pick up some of the pieces, adding new significant revenue lines.
    • CNN moves to break out of its identity funk, figuring out what that powerful global brand means in this fast-changing digital news world.CNN President Jim Walton recently stepped down, clearly acknowledging that his 10-year run had reached an end. "CNN needs new thinking," he said in a farewell note. On TV, CNN has been beaten up badly both both Fox News and MSNBC. In 2Q, CNN showed its worst numbers in 20 years, down 35 percent year-over-year. On the web, it'a a top-three news player. But overall, it's become the Rodney Dangerfield of news entities, getting little respect. Its cable fees - the strength of its revenues - could be challenged by low ratings. Going forward and competing against other global news brands - many of which are transitioning their own businesses to gain far greater digital reader revenue - it is, at this moment, caught betwixt and between. How it brings together a single - and global - digital/TV identity is at the core of its continuing journalistic importance and financial performance.

    That's a short list. We could easily add HuffPo's streaming initiative and The Wall Street Journal's wider video embrace. Or Les Moonves' digital moves at CBS. And Fox's new MundoFox, Spanish-language TV network, taking on Telemundo and Impremedia. The new network, at birth, offers a strong digital component, working at launch with advertisers along those lines. Let's note some quick takeaways here, all of which we'll be talking about in 2013:

    • Note how much you see the names News Corp. and Fox here. While segregating its text assets (and liabilities), News Corp. is investing greatly in the video future.
    • Cable bundling's longevity is uncertain. There's a lot of residual power here, but we know how quickly that can fade in legacy media. Yes, the unbundling of cable and satellite has been overestimated by some, as Peter Kafka pointed out recently. Yet, these multiple digital strategies may still push a tipping point. Clearly, legacy TV media, despite their public protestations, sees that potential and is acting in multiple ways to prepare for it.
    • Though broadcasters are making major digital pushes, they start from a lowly digital position. Many broadcasters can count no more than 5 percent of their total revenues coming from digital. That compares to 15-20 percent or more for newspaper companies. While there are other sources of revenue have been more stable than those of newspapers, they need to grow digital revenues quickly to make up for inevitable erosion of older money streams.
    • TV ≠ newspapers. Much of broadcasters' revenues are made on non-news programming, as much as one-half to two-thirds for most local broadcasters. While learning from TV experience here is useful, given lots of differences, the learnings must be smartly applied. As news consumers and advertisers move increasingly digital, though, that thick line that separate local TV from local newspapers thins by the day.

    The all-access, news-anywhere, entertainment-everywhere era has created a new massive business competition. Which brands will be top of mind? Who will consumers pay? How valuable is news itself in this contest?

    Comcast, Time Warner, Verizon, AT&T - pipes companies - are in one corner. CNN, NBC, CBS, ABC, Fox, HBO, Showtime, and other known-to-consumer brands in another. Aggregators like Netflix and Hulu over there. Media marketers like Amazon and Apple holding court. Google. The local broadcasters fighting for their place in this digital ring. This new battle of brands, in and around "TV," is now joined.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Sep 07 5:39 AM | Link | Comment!
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