So What Do You Do, Polaris Ventures Senior Adviser Larry Kramer?

Posted: May 20, 2009 in Digital Media, Innovation, Newspapers

This media business authority explains how companies can “avoid tragedy” by developing alternative revenue streams

By David Hirschman – May 20, 2009

Larry Kramer didn’t intend to be a media entrepreneur: Growing up, all he wanted to be was an investigative reporter and editor, breaking Watergate-like stories from the side of business. But after following this path through Harvard Business School, and into stints as a reporter, editor, managing editor, and editor-in-chief of some of the most highly respected newspapers in the country, he saw an opportunity and he took it. The result was Marketwatch, an online news service that he helmed for 14 years before it was sold to Dow Jones for more than $500 million in 2005. Kramer will be moderating a panel entitled “New Business Models for Media” on Wednesday, June 3, at Mediabistro Circus. Here he talks to about which models for monetization look the most promising, and how a young journalist might break into the industry in this age of media upheaval.

You’ve been involved in thinking about models of online content monetization for a while. What do you think are the most promising ideas out there, and how do you think publications are going to make money in the future?

I think that what the Web allows — and what we should therefore offer — is alternatives. Look at entertainment TV: you can watch shows on TV and you can look at the ads, or you can go to iTunes and pay for it and watch it with no ads, or you can get it some other way. And so I think we should have every option open to people. I think whether or not people will pay for content (or how many will) depends on a lot of things, including the economy. But the Web is wonderful in that it allows for multiple business models. It has to be about multiple revenue streams — you’ve got to have that to avoid tragedy, and to avoid what’s happening now to companies that are entirely ad-based.

So you think advertising is done as a business model for the time being?

Absolutely not. We’re in a downturn, but advertising will come back. People have to sell things, and companies need to market their products — and they will. There’s no question that there are new ways to do that — and for some advertisers, something like [Google’s] AdSense might be the most efficient way to do that no matter what happens. But there still are multiple kinds of advertising that will need homes, and they generally reside around where people are spending all of their time. If you’re trying to sell people something they don’t know they want, then you have to go wherever they are. And people are on the Web… We have a huge open area as to what people are going to watch and how they are going to get that content. So advertising will find a way to be involved in that — it has to. It’s in its infancy now; they don’t know how to measure it.

One of the great things about the Web is that it’s an enormously accountable medium. If we sold a million newspapers, you can’t know how many people saw your ad on page B22 — yet the medium can charge you for the million they were printing. On the Web, you don’t get ad money paid to you unless people go to the page it’s on.

Magazine editors love controlling the look and feel of what you see. That’s a big part of what a magazine is; the way things look and the quality and the size. They all make a difference to you as a consumer. In the Internet world, the consumer controls that — how big a screen he has, what he’s looking at, what he chooses to look at. You have to adapt to that — both as someone who is giving them information, or something for purposes of entertainment, or selling something.

And so the storytelling process is being reinvented; it’s just totally at a new moment. We don’t yet have that generation of digital storytellers who are integrating all forms of media on one platform… The real future is total integration. When someone is telling a story they use video when they should, use text when they should, use pictures when they should, and use interactive graphics when they should. And it’s a single, seamless process. And we don’t even have that down as a medium yet, so how can the advertisers have it down?

The theme of the Mediabistro Circus this year is “Doing More With Less.” Which companies do you think are doing the best at this point in economizing?
For media companies, doing “more with less” means that, in all likelihood, a good number of the revenue streams which supported you are gone. Newspapers and newsgathering were supported by, among other things, classified ads, and that was purely because of the medium. Because the only way to get those ads into every house was to have them delivered there in a newspaper — because a newspaper went to every house. It had nothing to do with the news, but the news operation was supported by it. Now there’s a more efficient way to do it, so there’s the end of that revenue stream.

As a media company, you assume you have less revenue and it has to be made up to some extent. But it also means that you need to figure out how to more efficiently deliver the message that you have to deliver. And on top of that, because the public can now go to any news source, one of your key roles is no longer going to be filtering everything the way it used to be. But the fact is, you still have to filter it, but you are filtering more of a finished product.

In the old days, press releases went to the press, and you didn’t get coverage unless they gave it to you. Today, people issue press releases and they show up in a hundred places, whether any news chooses to pick it up or not. But if you’re the consumer of that press release, you might not know how important that news is — you’re not getting anyone’s advice. So the journalist’s role as the curator of the “long tail” is the new part of what they have to do. It means that instead of ignoring the fact that everything is now available to the public, they’ve got to take advantage of that and help the public figure out which of the 20 blogs out of the 10 million on a subject they care about matter — or are giving you an intelligent offering. Part of the journalist’s role will be to help link you, the reader, to the best and the brightest information. And there you don’t need armies of reporters to necessarily cover everything yourself. The public has said very clearly in some places, “We care about the wisdom of the mob.” We care about what 1,000 people think is the best hotel in Belgrade — not necessarily a paid journalist who’s out there reviewing it, or the marketing efforts of a company that owns it.

As journalists you have to use that information and use everything that’s out there publicly, and organize that for your readers. And, in a lot of ways, that’s different from investigative reporting — which you still have to do by the way. It’s less important for you to write a piece saying, “Here are the best hotels in Belgrade,” and it’s more important — instead of paying $100,000 a year to a great travel editor — to pay some people less who are basically moderators or curators, to take what’s available and use the wisdom of your position to select as opposed to do it again.

If you’re The Boston Globe’s foreign editor, your value may not be anymore in hiring a reporter in every city in the world, but in telling your readers who’s got the best coverage that matters to them and delivering it to them.

But as there are fewer and fewer newspapers producing this kind of content, isn’t there less and less content for news organizations to aggregate?
Yes, there are right now. But here’s how the model changes in my book: Ten years from now, we don’t have TV newsrooms, newspaper newsrooms, radio newsrooms — we just have newsrooms. And the newsrooms are built around what they’re covering, not how they’re delivering it. So you get a Washington newsroom that is covering D.C., and it’s covering the federal government. And instead of it being a newspaper or a TV station or a network or whatever, its job is just to cover Washington, and it has journalists everywhere there. And its job is to distribute content on every platform from there. It could be sports, it could be finance… These could be geographical or whatever. It’s just subject matter coverage… It doesn’t mean that every reporter has to have a camera and do video. It just means that you have to understand what part of that story is best told in video and be able to tell it.

There will ultimately not be one news organization covering each place of topic — there will probably be a couple or more. To make an analogy, it was once this way for wire services. There was AP, UPI, Reuters, Agence France Press — all these alternatives that would give you some coverage of London or Moscow or Washington. This is not to say that The Boston Globe shouldn’t have a reporter in Washington — there is a Massachusetts delegation, and there are issues that are related to Boston there that they should be covering. But why do they have to have a reporter covering the White House? Why not have the equivalent of one or two wire services covering the White House — only instead of wire services, they’re news services and they cover it for everybody.

Because these platforms are merging… why not just do them once? The smartest way to do this is to divide it up not by medium, but by what it is that they’re covering.

As a guy who started out wanting to be a newspaper man during the Watergate period, how do you feel about the fact that the old-style culture of journalism has been lost in these changes?
I think it was lost way before all this happened. Everybody I knew who was a reporter back then wanted to change the world. But the industry got much more “professional” over the last couple decades. That’s not necessarily a bad thing. We’re training good journalists, we’re doing all the right things. But I think that what they’ve lost is a lot of the passion that drove us. There are great journalists now — don’t get me wrong, and it’s fun to find them and see them do their thing, but it was more prevalent then. There were fewer people who really cared that much about how much they made, and that led to a situation where media people really aren’t paid that much — unless they’re really big. There’s a really big chasm between the average reporter and a superstar. The danger of that had already happened. But one of the nice things about the Web is that it’s bringing back a lot of the people who have passion, because they don’t have to get a job at The Washington Post to go and be an investigative reporter.

What would be your advice for someone who is starting out now — say a 23-year-old college grad who is thinking about J-school?
The difference now is that [young journalists] don’t have to go to Grand Forks [North Dakota] for three years to become anchor. They’re going to where they want to live because, like everyone in the world these days, they’re more used to getting things the way they want it.

I don’t think people have to go to strange places or small towns [to get started as journalists]. There’s nothing wrong with it — small towns need coverage too. But the fact of the matter is, if you’re a good statistician, you should go to Washington and work with one of the investigative groups that are using stats to break stories… Or if you love business reporting, work for any of a number of Web sites that cover business. One of the traditional ways in, too, was always through trade publications, and there are more and more of those with the Web. Niche publications are great.

We still don’t have yet a whole generation of storytellers on these new platforms. Platforms are changing so much that nobody’s got a head start on you if you’re a kid. If you have the heart and soul and you’re interested in covering something, you can go to any one of these new media places and in three weeks be as knowledgeable and up to date as everybody there — including what tools are available and how to tell stories — because they changed last week anyway. I think it’s a wonderful time, and it’s a great time to reinvent what we do. But at the core of it — are ethical standards, are issues of fairness.

Do you think that ultimately the big media companies are on the way out?

I think the big media companies right now are in bunker mentality. They’re getting so slammed on revenues, that it’s not about where they are now or where they’ll be in 10 years, it’s about the transition. And taking the transition, particularly if you’re a public company, is brutal right now — because you have to recondition your company (including all of the shareholders) that this is going to be a very different company. It’s not going to be nearly as big.

Everybody has to reset what defines success [for a large media company]. And that’s almost impossible to do.

Name: Larry Kramer
Position: Senior adviser, Polaris Venture Partners
Birthdate: April 24, 1950
Hometown: Hackensack, N.J.
Education: Syracuse University (journalism) undergrad, Harvard Business School
Resume: Reporter and editor in various positions at the San Francisco Examiner and The Washington Post; Editor-in-chief of the Trenton Times; managing editor, Metro, of The Washington Post; editor-in-chief of the San Francisco Examiner; founder of Marketwatch; advisor to CBS Digital and others. Currently writes for The Daily Beast and serves on the boards of seven different companies and institutions, including Discovery Media and The S.I. Newhouse School of Public Communications at Syracuse University.
Marital status
: Married
Favorite TV show: House
First section of the Sunday Times: Sports or business, depending on the season.
Last book read: Boom! by Tom Brokaw
Guilty pleasure: Playing golf.

David Hirschman is editor of’s Daily Media Newsfeed.

[This interview has been edited for length and clarity.]
discussion by DISQUS

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