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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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  • David Westin's Departure Raises New Questions About NewsRight's Viability

    NewsRight, the U.S. daily newspaper's industry latest attempt to use its heft to compete and negotiate in the digital news world, will now try to right itself.

    Today, it will announce the departure of David Westin, the former ABC News president it hired to become its first CEO. Westin started on the job in May, 2011, with the intention of bringing prominence and experienced New York-based deal-making to the new enterprise. NewsRight, though, hasn't been much heard from.

    Westin says he had agreed to take on the CEO job for a limited time, at start-up, and this move now represents that plan playing out.

    Given the company's lofty ambitions to assert news company might in the content marketplace, the company's achievements are distinctly underwhelming.

    At its tender age, NewsRight is less a failure than a non-player. As some publishers do newer deals with Facebook, Flipboard, Pulse and Samsung, as well as work through older ones with Google and Apple, NewsRight sits on the sidelines. Publishers do their own deals, singly. The sense of industry voice NewsRight was supposed to bring has been all but silent.

    Since it launched its platform in January ("Will new NewsRight's Bigger Carrot, Smaller Stick approach to news content usage win?"), it has barely made a ripple in the content marketplace, signing a small deal with Moreover, and seeking deals in the relatively smaller media monitoring industry.

    Westin tells me that the reason there's been no deal pipeline since that initial agreement is that NewsRight went back to the drawing board. It has since revised its pricing and simplified its pitch. Its value proposition, though, remains the same. Early on, NewsRight announced a trinity of goals, and it has been trying to figure out an actual business model ever since.

    Those goals:

    • Assuring companies using news content that they are operating within the law;
    • Providing direct, immediate and clean content feeds that can make it easier and improve quality for aggregators using news content;
    • Offering sets of analytics that provide views of how news content (by topic, person, product, and more) is being read across the US.

    That has meant a straddle: wavering between "anti-piracy" -- the real and supposed sense that aggregators are unfairly taking, without compensation, expensive-to-produce news -- and providing new enhanced services to those who do the taking, at a price.

    Westin, who ran ABC News for 14 years, inherited that straddle, and now passes it on to Sri Kasi, the former general counsel of AP, who worked on the project at AP and then joined the new company. Kasi will serve as interim CEO. Westin becomes a consultant to NewsRight, as he continues to talk about just-published memoir of his ABC experience, "Exit Interview."

    NewsRight's 29 newspaper owners (list at post's bottom), including the Associated Press, which contributed its News Registry to the company, must now chart a course correction, or decide to get off this particular road.

    NewsRight has been -- like numerous earlier attempts by individual companies and consortia like ACAP and Attributor's initiatives -- unable to conclude any kind of deals with the big boys. These big traffic sites, Google most prominently, don't see the need to play with the NewsRights of the world -- even if they do make the claim of representing the $33B U.S. news industry. So with the big players beyond reach, NewsRight has focused on the media monitoring. It's an interesting niche -- newly reenergized as companies of every kind want to know what is said about them instantly, socially and virally, as well as in traditional news reporting. Yet, the media monitoring industry is in the midst of its own deals, some announced, some not, and hasn't generally seen the value of NewsRight partnering.

    So with its model wobbly, its added services insufficient to create much marketplace interest and its pricing too low to generate a real business, the business hasn't worked. The services idea makes sense on paper, but aggregators using news content often have much of the feed-cleaning and categorizing technology in-house. NewsRight's analytics, potentially powerful, have been a work in progress.

    In part, the quandary is figuring out the marketplace value of the largest collection of news content in the country. More than 60 news companies have been contributing content from more than a thousand sites to NewsRight for its handling. That's an impressive number, but hasn't built a marketplace. The problem isn't an unusual one: There have been more failures in digital syndication businesses than successes. NewsRight's early lesson is a familiar one, a big aggregation isn't a product; it's the price of admission to find one.

    In addition, video - which fetches much higher ad rates - is ascendant in syndication, while text is less sought. NewsRight, initially, has been focused on text.

    Like so many newspaper industry consortia, the potential of collective power wanes in execution. Now with more and more new owners taking the keys to the buildings every day, we may well see companies increasingly going their own ways.

    The NewsRight board now must decide how - and ultimately, if - to go forward. The partners had pledged as much as $20 million to fund the new venture, but have delivered only part of that. When the next capital call comes, how will they answer?

    *NewsRight's owners, including most major newspaper publishers except Gannett: Advance Publications, Associated Press, Axel Springer Group, A.H.Belo Management Services, Belo Management Services, Business Wire, Community Newspaper Holdings, El Dia, Galveston Newspapers, Gatehouse Media, The Gazette Company, Hearst Newspapers, Journal Communications (NYSE: JRN), Landmark Media Enterprises, McClatchy (NYSE: MNI), Media General (NYSE: MEG), MediaNews Group, Morris Communications, Morris Multimedia, NPG Newspapers, The New York Times Co., Ogden Newspapers, Pioneer Newspapers, Schurz Communications, E.W. Scripps (NYSE: SSP), Stephens Media, Swift Communications, Times Publishing Co. and Washington Post Co.

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

    Jul 30 2:13 AM | Link | Comment!
  • The Newsonomics Of Amazon Vs Main Street

    First published at Nieman Journalism Lab

    Order it on Amazon. Then run to your front door and have it handed to you. The news of Amazon's same-day delivery blitzkrieg - first explained in depth in an excellent Financial Times piece - elicited a near-maniacal laugh among newspaper companies: What next?

    Of course, the impact of Amazon's move extends well beyond the further toll it may take on the ever-shrinking newspaper business - but that crater-creating possibility may well be the biggest news of a big news summer. Advertising - in Amazon-contested markets - will never be the same.

    We've known that newspaper advertising revenues are in a deep, downward spiral - higher single digits this year, with early budget guesses showing the same for 2013. In the U.S., overall ad revenues are half what they were five years ago, down $25 billion a year from 2007.

    Here's what most hurts most about the new Amazon threat: It aims directly at the one category of newspaper advertising that has fared the best, retail.

    Classifieds has decimated by interactive databases. National has migrated strongly digital. Retail, which made up of just 47 percent of newspaper ad revenues 10 years ago, is now up to 57 percent of newspaper totals. Now that advertising, albeit in just a few markets initially, will have to compete with Amazon-forced marketplace change.

    Amazon, of course, isn't targeting newspaper revenues. It's targeting customers - selling more to current ones and engaging new ones. Further hits to newspaper revenue are just another unintended consequence of accelerating disruption of all business as usual.

    The same-day push is built on strategies long in the making. Amazon knew its day of reckoning on its sales tax exemption would come. Like all big, smart companies with legions of lawyers and lobbyists, it delayed the inevitable, and with each delay, built market strength and cash.

    Now the jig is finally up. Combine revenue-starved states and the late-arriving sense that Internet business no longer needs a societal jumpstart, and Amazon is being forced to charge sales taxes, though it negotiated their arrival with great agility. The exemption allowed Amazon an incredible price advantage, and many of us have been glad to take advantage of it. Not having to charge customers four to nine percent in sales in taxes (which land-based merchants couldn't avoid) allowed it to provide lower prices.

    Amazon knew this day would come. What the market didn't know was that sales tax settlements would lead to Amazon quickly flipping its model. It had paid sales taxes in a few states, forced to do that in places it had warehouses. So it placed those warehouses close enough to customers (Nevada for Californians, for instance) to make two-day shipping a snap. Now, with the tax changes underway (it's estimated that Amazon will be on the hook for sales taxes for half the U.S. population) , it no longer needs to selectively place vast warehouses in only a few states - it can place them everywhere and much closer to customers.

    Today, if you're in Baltimore, Boston, Chicago, Indianapolis, New York City, Philly, Seattle or D.C. , you can place an order and it the same day through Local Express Delivery. That becomes Amazon's base program. It is now building out that simple concept with 7-Eleven distribution lockers and much more, city by dense city. Behind that new delivery service stands an array of back-end technologies, analytics, and logistics that far surpass what anyone else possesses. Even now, to get a sense, of what's behind the evolving system, just check out the left-hand navigation on this page.

    The program builds on the smarts of Amazon Prime, whereby 10 million Amazon customers pay $79 a year and get "free" two-day shipping. Same-day is just the next logical step, both for delivery of goods and deepening of customer relationships and selling opportunities - which, remember, increasingly include media ("The Newsonomics of Amazon's Prime/Subscription Moves"). The unintended impacts of Amazon's same-day push will be as intriguing as the ones we can foresee. Just for starters:

    • Will local advertising expand or retract? Retailing will be more intensely competitive, and anti-Amazon appeals need to be transmitted somehow, via smartphone, websites, print, community events, and more. Was SoLoMo just a dream, or is it now a counter-strategy? (Newspaper companies efforts to become regional ad agencies, ironically, may get a boost from the Amazon move.) Preprints, which may total as much as 40 percent of the $11 billion or so U.S. dailies take in as "retail," will be a prime front here, one way or the other. While retail advertising impacts could be substantial, brand advertising may well become more important, as online buyers decide among brands in different ways.
    • Will newspapers be forced to accept still another death blow to their fortunes, as retail ads are further disrupted? The impact on print is up in the air. Further, Find 'n Save, a fledgling newspaper-consortium-owned Amazon competitor finds itself even more outmatched as same-day delivery further trumps one of its key differentiations.
    • Will Google, with all its eggs in the ad basket, find unexpected competition, as Amazon further disintermediates advertising itself, becoming the first and only stop between "I want this" and delivery of the good? Will advertising itself be replaced to larger degree as manufacturers are forced to differentiate themselves within Amazon, maybe moving marketing spendthere?
    • What will cityscapes and shopping centers of all kinds look like if Amazon's plans succeed? Imagine a cityscape without big box stores, Walmart, Best Buy, and Bed Bath & Beyond? Impossible, you say? How about one without Borders, Tower Records, and Blockbuster Video, all of which have left hulking holes in the American suburban landscape. Nothing is safe from digital disruption; nothing, holy or commercial, is sacred. Optimistically, a couple of dozen communities are creating next-generation uses for these eyesores, as the big box reuse movement (good rundown and reuse wiki via Slate) has been unexpectedly spawned. Will big boxes, the spirit-sapping, wallet-supporting icons of our age of disenchantment, take the brunt of Amazon's assault, or will it be smaller stores?
    • What might it do to employment? Will CVS checkers be replaced by more truck drivers and order fillers? Or is the future simply more robotic, as Amazon's purchase of warehouse-product-picking Kiva Systems changes the supply chain? No, it's not sci-fi, though it appears to be the year of the "robots," as computers do everything from local "reporting" (Journatic) to filling our orders for toothpaste and printer ink.

    Let's take a first look at the competition, as we look at the newsonomics of Amazon vs. Main Street.

    In one corner, there's Amazon. Its strengths:

    • Quick findability, in your living room.
    • Delivery to your door, or near it, now "same day."
    • Wide selection, often more than is available locally (but sometimes less).
    • Wide-ranging and increasingly deep user reviews.
    • Guaranteed satisfaction or easy return.

    In the other corner, it's Main Street. Its appeals:

    • Buy it now. Pick it up. See, buy, use. Ad veteran Randy Novak says that more than 80 percent of retail sales now come from areas within 15 minutes of a stores' location.
    • The visual and tactile shopping experience; NAA's Randy Bennett points to retailers' role as "showcasers." Then, there's shopping as entertainment, plainly as much heaven for some as hell for others.
    • Habit.
    • Getting out of the house once in a while.
    • Support of the local guy.

    Proximity here is fascinating. The local edge has long been proximity, that 15-minutes-away appeal. Now, Amazon counters that with 12 inches away (your nearest screen) and some number of hours, as Americans do their new arithmetic on buying.

    Beyond proximity, there's price. Yes, Amazon is acknowledging that the 20-year-long sales tax furlough it got is finally ending. It knows it will have to add that 4-9 percent of sales tax to its prices across the country within several years. So where will that tacked-on pricing put it?

    Let's remember that its world-class algorithms track competitors' pricing in real time. After all, that's been - often to Amazon investors' chagrin - CEO Jeff Bezos' strategy from the beginning: sacrifice profit margin for market share and growth. Its last quarterly report showed 1 percent net profit - on $13 billion of sales. Expect it to match or beat on many items, absorbing low margins, and maybe loss leaders to win market share from Main Street.

    How much room, with tight margins, will Amazon have to maneuver? That could tell the tale here. Squeezing margins - lowering prices - will have one at leastnear-term consumer impact. If you're selling the same vitamins, shoes, or dog food as Amazon, you'll have to lower some prices to compete. The cautionary tales of bookstores and music stores, and now Best Buy, show that consumers don't find a lot of sense in paying more locally than through the web.

    As we consider price, the shipping fee comes clearly into view. With Prime, the innovation that paved this road, members don't worry about each shipping cost. Pay once - that $79 annual fee that's been remarkably stable - you get shipping "free." Look for Amazon to embed free same-day shipping into another similar program, Prime Same-Day, for $99 or $139, or include it for anyone spending more than $500 a year, for example; we believe that Prime members may average $1,500 in annual purchases already. As with Prime and with Amazon overall, again, build market share for the long term, even at the risks of low profitability or even loss.

    There's a lot of nuance we'll miss in the first passes on the topic, of which Farhad Manjoo had the best. This commercial initiative is aimed of course at goods, not services. It's the goods-selling competitive and geographic landscape - think Amazon categories like drugs, clothes, toys, and electronics - that could be transformed. Services, like those that we use today - health care, restaurants, fitness centers, and, of course, coffee shops - would be unaffected. In an ideal world, we may have less time for mundane shopping and more for more fruitful activity. Or we may have big empty buildings, fewer community jobs, and less socializing. And, maybe people will have more time to read. We'll probably see all these things happening at once.

    Amazon, of course, just wants to make money. Yet, it has already, in part, disintermediated shopping itself. Expect it to be extend its Subscribe (interesting choice of words, right?) and Save program, wherein you get small discounts for getting regular deliveries of goods, like detergent, that you reorder over and over again. Expect it to try to change our mindsets from shopping to deciding and then letting it go, and getting it delivered without a second thought - changing the very notion of shopping.

    With price differentiation now driven by algorithm, with ad offers driven by those with the biggest data, and now with delivery of our daily goods newly rationalized, it looks like those that prize news creation best continue to look elsewhere for revenue. That's one of the reasons I've become increasingly enthusiastic about reader revenue. Yes, newspapers could repurpose their daily delivery systems here, to actually aid Amazon, but that seems like a real longshot. The technocrats of commerce, Amazon, Google, Facebook and Apple, are the biggest game in town - and increasingly, they want to be the only one.

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

    Jul 30 2:10 AM | Link | 1 Comment
  • The Newsonomics Of Marissa Mayer's Yahoo Legacy Challenge

    First published at Nieman Journalism Lab

    Call it a Hail Marissa pass.

    Kudos to the Yahoo board for shaking up the conventional wisdom, going long, going young, and going Google. Against a history of failure, it has chosen success - the gold-plated success of Google - and thrown both Yahoo watchers and staffers for a loop. The onrushing changes at Yahoo have seemed almost Marxist - as in Groucho - as troops have been led this way (let's dominate the display ad market through the wizardry of our integrated bought-and-built ad technology) and then back again, as ad staff has been laid off, cut back, and told that ad-tech outsourcing was on the horizon.

    Yahoo as product company. Yahoo as sales company. Yahoo as digital Hollywood company. Watching the parade of costumes has been like peeking at those silly old-timey Western dress-up booths at county fairs.

    Yahoo - despite its $5 billion in annual revenues and a billion in net profit - seems like the Rodney Dangerfield of media companies. It just can't get no respect. So why not try to buy a little respect?

    37-year-old Marissa Mayer has known little but success, and the emerging respect and self-confidence that accompanies it, since she joined Google as a 24-year-old. She brings something Yahoo badly needs: an aura of success and of discipline. That's a start, as she takes on the challenge of what is a legacy web company. Number one by traffic, Yahoo seems as much a legacy company as a newspaper or local TV station - legacy as in the encumbrance of long-time, if fading, success. Its legacy is the desktop. It survived Excite, Lycos, Infoseek, Netcenter, and many more. In the seeds of its own success as a portal, it's found out how hard it is to transition from the portal era. Now, as Google, Facebook, Amazon, and Apple come to dominate our lives - and our pocketbooks - with the four dominant S's (search, social, shopping, software) of our time, the portal is rapidly diminishing in value.

    That question - what is Yahoo? - is, in a sense, the only one Marissa Mayer needs to answer. Her five predecessors in five years failed at that seemingly simple task. Answer that question, and the strategic, product and organizational decisions flow from it. Fail to answer it, and imagine your portrait alongside Scott Thompson, Carol Bartz, Jerry Yang, and Terry Semel.

    As we look at the news of the past week - an amazingly busy July, testimony to the acceleration of media change in this year - we see that identity question popping up all around. Within the question is the newsonomics of identity: what does a media brand mean these days?

    NBC's first step yesterday, following its long-brewing divorce from Microsoft, was to rechristen its news portal as While some have suggested that divorcing it from the left-leaning MSNBC channel is the primary reason, certainly the re-ascendance of - and concentration on - the NBC name makes even more sense. NBC has brand equity, nationally and locally - and it will soon have greater global resonance. MSNBC has never rolled off the tongue. Now NBC, with strong intact leadership (Steve Capus, Vivian Schiller) can move forward, backed by the might of owner Comcast, as it competes with other global news players, including the Times, the Journal, the BBC, ABC, Bloomberg, Reuters, AP, and the Guardian.

    Brand identity also runs through the other big media story of the week. As Tribune Company finally emerges from bankruptcy, drip by drip, the question re-emerges: What is the Tribune Company? Is it eight daily newspapers, the core of what Tribune once meant? Is it those papers and its 23 broadcast stations - which now out-value the newspapers at least three to one - and Career Builder? Or: Does this company still have a reason to stick together? We can point to technology and infrastructure ties as a reason, but these may well be overwhelmed as assessment of individual property values is made by the new ownership, financial players who want out.

    Certainly, the Tribune means something in Chicago, the Times in L.A. (where no one needs to tell would-be buyer Eli Broad about the value of that brand), and the Courant in Hartford. What's the print/digital brand promise, though, to readers and to advertisers in 2012? That's a more difficult question, and one symptomatic of newspapers, and increasingly local broadcasters, current market woes.

    Identify. Promise. Brand. These are issues have been bedeviled Yahoo for years now. In a world of changing media and consumer devices, the ability to make a promise and fulfill it better than anyone else is the key to success. Which is why that quartet of Google, Facebook, Apple, and Amazon are winning, and most of the rest of legacy web media, legacy print media and legacy broadcast media are losing.

    As Mayer moves 5.5 miles mostly east to her new Sunnyvale office today, she will briefly enjoy her wunderkind status. Then, we'll see how well her detail-oriented, user-centric mindset can effect change. Sure, Yahoo has lots of good products - she has already cited finance and sports - but what great, clearly ahead-of-the-pack ones does it have? Where can it pick its spots? In business, it is outgunned by Dow Jones, Reuters, and Bloomberg. In sports, ESPN, MLB, Comcast, and Fox are pouring in huge resources. New partnering - built on the ABC and CNBC deals - may help, but isn't everyone doing those kinds of deals these days?

    Is there something distinctive that Mayer can bring to the Yahoo user experience?

    I suspect that new focus will be distinctly mobile. Tablets and smartphones are the new playgrounds, with lots of eager and less-habituated readers and viewers. Individual news, business, and sports brands have been ascendant on the tablet, as the old aggregators (Google Currents, AOL Editions, Yahoo's Livestand, on which it recently pulled the plug) have failed to transition their desktop advantages over to the new medium. Is there a Google-simple trick Mayer can find up her sleeve to differentiate the newest Yahoo and please the hell out of consumers?

    Beyond that customer-centric enigma is the big question of what kind of advertising company Yahoo wants to be now. If it pursues ad outsourcing, that only puts more pressure on it to quickly create more products that are at least insanely good. If it stays in the ad game (even as its display competitor Microsoft is acknowledging its own ad futility against Google market dominance with a big writedown), how will it compete? Does Mayer, a strategic builder of technology solutions, reverse recent course and re-commit Yahoo back to advertising focus? Will it try to hold on to its partnership with half the U.S. daily press, through the Newspaper Consortium, as those members begin to contemplate the mature deal that may well pass into history by the end of 2013, if not sooner?

    What has the experience of leading Google's latest push into local advertising taught Mayer? Google Maps, Google+, Google Ad Words Express, Google Zagat, Google Places are all meshing into Google Places for Business, meaning a better place for local merchants to invest their marketing dollars - with Google. Is the Men in Black memory eraser part of Mayer's Google contract? Or will Yahoo, and its news partners, benefit from her recent experience?

    We'd have to believe that the odds against Mayer are long. She inherits a mess, and she's an inexperienced CEO. She knows product, but she's not a deal-maker. She's got the experience of one great company, but no other. The game is newly afoot though, and therein lies the serial pleasures of Yahooing.

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

    Jul 18 8:05 PM | Link | Comment!
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