Archive for August, 2010

On Tuesday I ventured out to buy a new wireless router for my home network. I wound up taking an all-too-familiar trip though consumer technology hell. Everything that happened that day is a testimony to what is wrong and what is right about how some companies are facing the new world I write about in my book, the C-Scape.

One of the key take aways from my book is that technology-driven changes have provided the Consumer with many more choices for almost any product and service. The Consumer has become empowered and gained even more leverage in his or her relationship to companies. Smart companies recognize this and have begun listen to what those Consumers say and also begun to serve them better.

The worst think a company can do today is take its customers for granted and assume they don’t have the choice of going somewhere else.

My day started at Best Buy, which is the last easy place standing to buy a router. In Marin County, CA, Good Guys, Circuit City and Comp USA are gone. Best Buy recently added a second store.

I had only a couple of questions for the Best Buy salesman, who was helpful without being overbearing. And he was patient as I was having trouble choosing. In the end, he said the best performing device with the least trouble setting up was The Apple Airport, even, he said, if I wasn’t a Mac user. And he told me why, citing some features. Clearly Apple has done its job both with the product and with its distributors.

So I bought the Airport and brought it home.

I have a simple setup. I have a wired network around the house, but mostly use wireless anyway these days. I have a couple of computers, a printer and two laptops that work off of the network.

I followed the instructions, plugged everything in, set up a password and lit it up. I was getting great reception everywhere, but even though I showed full reception, I couldn’t get on the Internet.

I assumed it was a setting on my DSL modem, because nothing I could do would connect me through to the internet. So after several attempts to figure out my problem on the AT&T DSL provider’s website, I called their tech support. After waiting about 30 minutes, someone came on to take down all my information for 10 minutes and then finally asked me what the problem was. Then they said, because it was not AT&T equipment, I would have to go to the manufacturer, in this case Apple. I said, “Are you sure, I think I may just need some information about my settings on the modem?”

The AT&T support person said they were sorry, but they had an alternative call line that could help me, but they would have to charge me. I was increasingly desperate (my wife was not happy to have no connectivity) so I told her to transfer me.

I waited more than an hour on hold (with constant reminders about how I could go to their website for help). Finally a customer support person came on the line, asked me what the problem was, and started to ask me a lot of questions about my account, getting a ton of background information and my credit card numbers and telling me it was going to cost more than $100 for the call but assuring me three different times that I had come to the right place and, “we will be able to fix your problem.”

While I could hear that he was chewing on pretzels, I told him our dinner, which i cooked on the barbecue, was sitting on the kitchen table getting cold because he came on the phone just as we were sitting down. And I said “All I care about is getting this fixed quickly…so please tell me you can do that or I’m giving up.” He heard that and assured me several times it shouldn’t take long. But after 10 minutes of questions he still hadn’t asked any more questions about the problem, just about my account and profile information.

Finally, I said, “Look, aren’t you going to ask me about the problem?” Then he said he was only a customer support person and would have to transfer me to technical support person who would fix the problem. Before I could even get out a legitimate curse, he put me on hold, presumably to transfer me to the agent. But I started hearing that same tape again.

So I took my phone, put in on speaker, and went to my now cold steak dinner. My wife was just thrilled to have the AT&T hold tape playing continually through dinner.

It played for two more hours. I had to switch cordless phones because the battery on one died. No one ever came back.

So I finally hung up (it was after 10 pm) and reinstalled my old Linksys, which was giving me trouble but worked.

The next morning I called AT&T back and the person gave me the same speech about having to go to their specialized service for the additional charge. I gave her my story and said “By the way, can you check to see if I have charged for last night’s call”. She came back and said that I was charged but agreed to take the charge off. This time I said “thanks,” hung up, and decided to call Apple.

I went to the Apple website, found several choices for customer service, and picked the one where you write down your issue and they will call you back quickly. So I did. Inside of 5 minutes the phone rang. I talked to the tech support guy for about five minutes, did a couple quick tests and he told me I needed an ID and password from my provider for that modem, and that would do it, but I could call back after I got the info and he would walk me through entering it.

So I reluctantly called AT&T back. After a 15 minute wait, this time the first person quickly confirmed I was the account person, did some checking and said yes, I did need an ID and password. They said the ID was my AT&T email address associated with the account. They could issue me a new password but they needed that email address. I told them that in the 10 years I had this DSL service, I never used the email on my DSL and didn’t know there even was an email address. They said I could find the address on my phone bill. I told them I auto-paid on line and didn’t have any print bills. They told me to look back for old ones. I found a 2005 bill (from predecessor company SBC) and on it was an email address for me! Once I gave that to the AT&T service person, she generated an email to me with a new password.

Before calling the nice people at Apple back, I took five minutes to set up the new router again and figured out on my own how to enter an ID and password onto the modem.

Bingo, it worked. I didn’t even have to call back the enormously helpful people at Apple.

So now I have a terrific new Apple device and as soon as I have the energy and time, I’m canceling my AT&T internet AND telephone service and will sign up with Comcast’s Xfinity. I might even cancel my Direct TV service and go with Comcast cable if the numbers are right, which would mean that AT&T isn’t only shooting itself in the head, but taking down innocent bystander companies like Direct TV, too.

Which company do you think has a future?

My friend Tom Grams shot this in Hanoi while working for a client who won the license to offer direct to home satellite TV, DTT, and a broadcast channel

The most recent quarterly reports from companies in the newspaper industry saw the drop in advertising revenue begin to slow down. According to David Cole’s newsletter, News Inc., newspaper ad revenue at nine publicly traded newspaper companies dropped 5.9 percent this past quarter. In the first quarter, that drop was about 9 percent year over year.

But just as interesting is this tidbit from media business blogger Ken Doctor, who says that most publishers have begun to see revenues shift away from what had become the 80/20 (circulation vs. advertising) breakdown (In recent years ads were 80% of the revenue, while circulation revenue, ie. subscriptions and street sales, provided the rest).

And it isn’t just that the ad dollars are dropping faster. Actual circulation revenue numbers are up, despite fewer copies being sold. At Dow Jones, there was an 11 percent increase in circulation revenues. At the E.W. Scripps company, Newspaper ad revenues were down 7.7 percent, but circulation revenues were up 4 percent.

According to Doctor, the percentage of revenue coming from circulation is now growing, as is a new line, “other revenue.” He further points out that in Japan, circulation is now the largest revenue stream for newspapers. In Europe and the UK, circulation revenue is 35-45% of the pie.

What this means is that people are paying more for news already, technology aside. No reason to think the same model won’t develop on all platforms.

We are witnessing, we hope, a Renaissance of Journalism through the growing competition between heavily trafficked web sites to provide more and better original content. More and more the pillars of the “new media” community have begun to seek out quality content they can call their own and therefore use to attract and keep audience on all their platforms, from the web to cell phones to tablets.

Ben Bradlee

But there is still a serious hole in the strategy we see unfolding from this new generation of journalism, including megasites like Yahoo and AOL, and Google, but including literally millions of bloggers and targeted sites. While they are to be commended for going beyond just aggregation and moving toward the more expensive world of becoming original content creators, almost to the site they are making the same mistake. While they are hiring reporters and other content creators, they have ignored the need for solid editorial leadership and management. Where are the future Ben Bradlee’s (Legendary Washington Post Editor) and Don Hewitt’s (the late Founder and Executive Producer of 60 minutes) of the digital world? Where is the new media version of Time Founder Henry Luce, who began by writing a manifesto about how his new magazine, Time, would change and improve journalism.?

Henry Luce

Great media businesses of the past flourished because they showed great vision and executed on that vision with talented people. The truly great media institutions had as many editors and people involved in presentation of content as they did content creators and/or gatherers. The best assignment and story editors spent time with reporters, guiding them and making their stories better and better. And teaching them what was good and bad in what they had done. The great news editors not only helped decide WHAT got covered, but also what kind of presentation a story deserved, how it should be illustrated and supported and in what context it should be presented. They were, in effect, the early curators of content for the reader/viewer on all previous media platforms, from print to radio to TV.

Because of their previous incarnations as aggregators (aggregationists?) most of the new media businesses, like the portals and even the Huffington Posts didn’t understand the true value of editors and producers to the editorial process. Because their value isn’t obvious to the outsider who doesn’t understand how a news story or a news product comes together and the thinking process that occurs around how it should be presented, many new media companies just took shortcuts to get to the point where they could look like a legitimate news operation.

In the beginning, that meant just aggregating news from other sources. Then many moved to more original content by assembling bloggers who worked for free, some of whom had reputations in their worlds, even if not as journalists. But by associating with people of reputation, some of that reputation accrued to the site. So Huffington Post drew people who knew the names of many of their bloggers, including Arianna. And that site was born with an attitude….hers. So it was easy to understand.

Other targeted content businesses, like Seeking Alpha, were formed around the unpaid blogs of money people who had reputations to start with, either as investors or even journalists. All were, and are, unpaid.

Yahoo, AOL and Google were actually proud of their status as aggregators and sought to preserve that status so as to allow them, in some cases, to do financially attractive deals with content providers to get their content on the portal site, in exchange for both money and traffic the portal might send to the home site of the partner.

Now Yahoo and AOL are in a race to see who can add more original content. They are developing very different products but they have taken off in the same direction. Even Google is bringing on more content people to help them intelligently present what they are aggregating through search. And, they are starting to display content as seen through the filters of various outside editorial influences. By showing the top stories according to one news or commentary site, for example, they are acknowledging that there is an important skill set that they don’t possess.

Therein lies the rub. Almost none of these sites have built a true journalistic infrastructure, with a powerful editorial voice at the top and a collective group of people who both worry continuously about how their content is being presented and who lead the army of reporters down their many paths with critical review and the benefit of experience. Together, these forces create journalistic greatness. Content must be gathered AND edited AND presented by people who have all of those skills.

To be sure, some of the new media players are getting this. The Huffington Post now has an army of journalists, including editors, behind the scenes. The Daily Beast has a healthy dose of every level of journalist from reporter to editor. Politico and Jim Brady’s new local site for Allbritton are staffing up. My old site, Marketwatch.com has always valued and staffed up with editors.

But many of the today’s hottest “new media” sites are often rooms packed full of talented and hungry bloggers who get little or no editorial leadership. And sometimes what they produce is naive and even wrong. It’s not necessarily their fault. Often, no one with experience is watching or helping.

Sometimes filters can be good. Great Leadership is ALWAYS good. But it costs money. And like so many things, when it comes to seeking greatness in the long-term you need to spend money to make money, even if the return for some of that spending isn’t that obvious right away. Find great journalistic visionaries and put them at the top of these businesses.