Archive for May, 2011

One of the effects of the emerging digital platforms is that every company needs to learn new ways to tell its story. It isn’t just the media that has to reinvent storytelling on new platforms, every company has to tell its story differently. In order to do so, they begin to behave a lot like media companies.

As we have reported several times, and as Matthew Ingram pointed out again this week in a blog post on GigaOM, many companies have already begun to morph into media businesses. He points to Gilt Group’s new cooking magazine and The New York Public Library’s news IPad magazine as the latest examples.

In this blog and in my book we have done stories on BestBuyOn.com, Gucci.com, RalphLauren’s RLX app, Urban Outfitters, Visa and American Express, all essentially building content divisions around their core business.

But Ingram’s blog ends on a very ominous note:

“So when everyone is a publisher, how do we know what to believe and what not to believe? How do we know when something is a marketing message and when it isn’t? The short answer is that we don’t. For better or worse, everything is media now.”

But in fact, we do know. We have to learn, but we do learn. In the past, companies have printed their own magazines to project an image they want projected, but readers ultimately know where the information is coming from and apply whatever filter they choose to apply. Magazines have published “special advertising sections” with editorial content for many years. For decades television has seen infomercials take up hours of time on channels every day. The AARP, AAA, American Express and hundreds of other companies have published magazines, some blatant in their attempt to promote the products of the publishers but others that look a lot like traditional media.

Through it all, the public figures it out. Few can actually disguise where they come from, and most don’t try to.
What we in the media must understand is that all of these things will have a place. Just because something that looks like an independent magazine is, in fact, published by a company that sells clothing, for example, doesn’t mean it doesn’t have value to the readers. BestBuyOn.com can give viewers — especially those in the market right now — some of the best information on electronic devices. That includes user-generated reviews of all products. The media can no longer assume it’s message is the only, or even the best, message.

Again and again we are being reminded that consumers have a mind of their own and increasingly LIKE to learn about things from each other and the wisdom of crowds. The media must continue to do its job and in doing so highlight the value of educated, unbiased reporting and opinion. And those things will always be an important part of the mix, but the mix got a lot larger and richer.

Yahoo is 17 years old, and like any teenage it’s having an identity crisis. It used to be a tech company, dominated by engineers who won the Portal Wars, ultimately defeating AOL, Excite and wounding MSN. Because it was a cool company and one that gave new-to-the-internet users (that was all of us, at the time) the best overall experience, it triumphed.

Its success happened because it was the best experience on the web, and for many years kept surprising its users with new and interesting things to do online.

But along the way, like many kids its age, it got diverted from its mission of pleasing its users. This happened for a number of reasons. Competition grew and while Yahoo got comfortable in its business model as an aggregator of content, deriving revenue streams from partners, it left behind that commitment to give users exactly what they want. Instead, it gave them what the highest paying partners were willing to give them. So when consumers got more sophisticated about what content they wanted, and how they used digital platforms, competitors popped up and started picking them off.

In search and email, along came Google. In social media, along came Facebook. In music, first came My Space then came ITunes. In news and information categories, hundreds of existing and new businesses got better on the web.

There is an interesting post about Google by Matt Rossoff on Business Insider this morning that is a perfect backdrop for this post. It’s thesis is that Google needs to hire some Liberal Arts Majors before it hires any more engineers.

“Engineers are great at solving problems,” the post reads. “But they’re not always so great at figuring out which problems to solve.”

Yahoo has figured out that Content has become king on the Internet and across digital platforms, but it still hasn’t figured out what it has to do to become a great content company. It is still a company run by engineers. In fact, after an ultimately less-than-successful CEO reign by Hollywood Mogul Terry Semple, Yahoo saw the engineers come back and take an even stronger hold on the company. Actually, the engineers never really let go. Even when content people were hired with large promise, control of the key pages on Yahoo was kept in the hands of engineers.

To be sure, even though the next CEO, Carol Bartz, came from the technology industry, she fairly quickly decided the company had fallen too far behind in technology in several areas to compete and wisely announced that Yahoo was now a “content company.” It then did begin to spend some serious money to build its own content. It has built some strong franchises in Yahoo Finance and Sports, for example.

But the company hasn’t really taken the plunge. For it to be a content business, content people have to run the company. The business has to be obsessed with what it’s consumers want and be able to give them that and much more. In fact then need to give them things that they didn’t know they wanted. Content consumers ultimately need to be surprised and fully expect their sources of information to be smarter than they are about the topics they are reading or viewing.

Content businesses need an editorial intelligence, and personality, built and maintained by a strong team of creative people, whether they are called editors or producers, they need to be obsessed by giving their readers everything they want and much, much more. They need to live for delighting their customers. And they need to include the CEO or someone reporting directly to the CEO.

No one reads a magazine, or goes to a play or movie, expecting to see exactly what they want to see. They expect to be surprised, entertained or even educated. The brilliance of a great content company, whether it’s The New York Times or Warner Bros. or Harper Collins or The Harvard Business Review or Conde Nast, is that it cultivates and rewards people who can figure out what is about to become interesting before its audience knows. It does that by giving creative people the time and rope, and even the ability to fail, en route to creating great content, whether it’s explanatory journalism or a moving and entertaining movie, TV show or Magazine article.

Those creative types, as difficult to understand and to manage as they are, are the secret sauce. They need to permeate to process. Great engineers will be needed to create great tools, sites, apps and many other aspects of what makes a media company great in the future. But they must work arm in arm with the creative content people who are defining the brand and who understand the needs of their consumers.

A great example is the recent launch of News Corps IPad news product, “The Daily.” Despite the fact that the company has done exactly the right thing by creating a content company to specifically exploit a new medium (the tablet), the initial product was designed largely by engineers before the first journalists were brought on board — because people didn’t want to hire reporters and editors before they had any place to put their content. Then, when the journalists got there, the technological underpinning of the product was about done and guess what, it was over-engineered and wasn’t the least bit user friendly. The engineers built a product from specs so it would take advantage the new platform, but no one spent enough time thinking about how the audience would actually want or use the information.

As the product matures and as the technology of tablets improves, The Daily could grow an awesome audience. But it has to go through some difficult transitions. It might even find that there is a large audience for its content on other digital platforms and broaden its distribution. But that’s OK, it’s one of the first native digital news products in existence and it has a real chance to learn to be great before it’s caught.

Back to Yahoo, it’s hard to say from the outside if it’s too late to save. But they still something that is very hard to build from scratch: a huge audience and some real cash flow. They could finance a real run at becoming the next generation media company. It’s still an easier path for them to go that way than for an existing media player to go heavily digital, because those companies don’t want to risk the huge revenue streams they already have from existing distribution, whether that’s print, video or audio. But the future is in the combination of the three on to the digital platform and there appears to still be room for some new winners.

The business models of the major media companies are all in flux because of the rapidly changing technology landscape. The newly created ability to give consumers entertainment programming on demand and over several new distribution routes has begun to destroy the existing economic underpinning that has supported television production for many years.

According to SNL Kagan research, DVD revenues were down 44% to $4.47 billion in 2010 from $7.97 billion in 2009. Video on Demand and Digital Downloads, however, were up 19% during the same period.

For the past several years DVD sales have been a major contributor to the compensation of the studios who create many of our TV shows. While the networks have always been the prime beneficiary of the success of any show in first run, the studios who produce the shows have traditionally made more money on the back-end through DVD, reruns, syndication and international sales, all of which generally began after the first run season. This has made sense because the network spends the most money promoting the program when it is first running, and it therefore deserves a higher piece of the revenue coming out of first run.

But besides the fact that there are now many more forms of distribution, it is also true that the new digital distribution methods allow a viewer to catch up on a missed episode of a TV show within hours, days and weeks on the initial airing. For obvious reasons this has begun to impact the value of any viewing alternative that is delayed significantly after the show airs, including DVDs or syndication the next year, for example.

In the old days viewers who liked a network TV show missed, on average, a third of the first run episodes of a that show. That created an instant audience for reruns or syndication or DVDs when they became available. They were the only way to see the missed segments. So now the market for reruns or syndication or DVD’s have begun to show the impact of a reduced audience for that. It’s simple, if I can see every missed episode of my favorite show in the week prior to the next episode coming out, I get a better experience from that show and I’m more likely to continue watching it.

DVDs will continue to exist, but their role in the change. They will continue to preserve programming for future use, but they won’t nearly the force they were for first viewing of television programming. The smarter content providers have already figured that out and have been working on building their digital distribution businesses. The rest will now have to jump on the bandwagon.

New Corp’s bold experiment to launch an IPad-native news product is starting to show a little life. With the release of Apple’s IPad2, the previously unusable App became a lot more responsive. Besides the launch, publisher Greg Clayman said the newer releases of the The Daily’s app also went a long way to deal with the technical issues that plagued the first, highly publicized, release of the product three months ago today.

It was a great experience to click on The Daily on my IPad and see a dramatic magazine-style cover blasting the death of Bin Laden. Next time, I’d like to see more interactive and video content, in real-time, bringing the story to life with every form of media available to the IPad.

That those elements were missing last night are proof that while the more powerful platform offered by the IPad2 does cut the response time of the Daily considerably and make it a much more usable product, there are still lingering editorial and user interface issues that will have to be addressed.

First, the User Interface: The major navigational tool is a “wheel” that is similar to one interface apple uses on its computers and mobile devices. It allows the user to “sweep” pages to the left or right and pick which page he or she wants to see. The problem with The Daily is that it is nearly impossible to read anything but the largest headlines on those pages so you don’t really have a great basis to decide if you want to read a page or not. The photo images are impressive, but you understand that tapping on that page will only increase the size of the same photo. It’s an unwieldy interface that actually slows down the speed in which a reader can find what he or she wants, whether it’s a story or a section of the publication. The great advantage of digital media is the speed with which it brings you information and the ease of navigation to find what you want. The Daily ignores both of those advantages, and, in fact, in cases like “the wheel” actually negates those advantages.

Next, the Content: Much of the content is quality writing and journalism and would be totally acceptable in either magazine or newspaper formats. But this is specifically NOT a magazine or newspaper. As a digital product it needs to stress the advantages of the media, and bring content to the reader in real-time and easy to digest, quick to access content. It also needs to be a place where text, photos, video and interactivity are used as part of the story telling process, which SHOULD be a much richer experience that can only be offered in this interactive world.

The App should also be “alive” when the IPad is connected to the internet via either WiFi or 3G. It should be constantly drawing down updated content and letting readers know that the content has arrived. The reason we need digitally native news products is because they are uniquely positioned to take advantage of the new digital platforms, NOT to do a good job of translating an old media product on to a new medium. News Corp.’s own New York Post app and Wall Street Journal app do the best job of THAT.

Instead, The Daily needs to be a medium that SHOUTS the advantages of being digitally tethered to the sources of news. The publication should be delivering both content AND context in real-time, and its audience should expect no less. There has been little attempt to create context beyond an uncomfortable combination of magazine and newspaper display.

This leads me to another critical question. Why doesn’t The Daily create a web-based version of the product? Just because it is an IPad-native product doesn’t mean that the content can’t also be used in every other form of media, which would, in the long run, be very helpful in building multiple revenue streams to pay for the overall news operation. The Web is the most obvious format because it also appears on mobile devices, including the IPad and other tablets. Just as every existing traditional news brand is trying to use the web to expand its audience and revenue, why wouldn’t The Daily do the same.

In fact, it’s actually EASIER to translate from a real-time medium to any other because you have already created the content you will need to present on other platforms. You will need to bring on some people with unique talents for each medium (the silken voice of radio, the appearance of an attractive AND intelligent anchor on television), but the major product you create in the newsroom, i.e. News, can and should fuel news products on many different platforms.

Big news stories tend to accelerate public acceptance of the new forms of media. Just as the Kennedy assassination brought millions to network TV News, the Iran Hostage Crisis gave birth to Nightline on ABC and the OJ Simpson arrest and trial gave cable TV News big jumps in viewers, the Bin Laden death story will go down as a big step for digital media of all forms from Twitter to web and IPad platforms.
It is now widely known that the very first indication that the president would be announcing the death of Bin Laden came from Twitter. At 10:25 pm last night, the former chief of staff for Bush’s Defense Secretary Donald Rumsfeld, Keith Urbahn, broke this news with a tweet: “So I’m told by a reputable person they have killed Osama Bin Laden. Hot damn.”

Television was reporting that a special announcement was forthcoming from President Obama but in a remarkable testimony to the Obama administration’s ability to keep a secret, up until five minutes before the scheduled broadcast no news outlet had any indication of what Obama was going to say.

Once the story did break, the networks still suffered through an hour delay before the president actually came on the air, and most did little or nothing to advance the story while gradually bringing on more experts and staff journalists to fill the time with only slight more informed speculation.

And, of course, after the announcement the various networks exploded with talking heads and in many cases video of “crowds gathering” at the White House and Ground Zero. It was hard to tell how much a role the live TV cameras looking at the front of the White House or in Times Square actually caused people to go there, or how spontaneously the crowd assembled. Certainly the cable nets had cameras poised live on very small gatherings at both places for some time before they grew.

This was also a good night for Internet and mobile news products to break the news to the public. I recently got an IPAD2 and I was thrilled with the altogether improved version of “The Daily” that I was able to access shortly after the story broke. The IPad2 itself was a tremendous help, allowing me quickly to hop from Twitter, to the Web, to IPad publications like The Daily, to the web and its many real-time news sources. While the web interfaces of several news operations do update the fastest, you could see last night that the context and smart use of supporting media, like photography, help the new IPad apps to demonstrate their value.

This story also revealed the price we have paid in the US for cutbacks in news coverage by our major national media. The lack of US correspondents on the ground or even nearby was made more obvious by our inability to report original reaction from the middle east and the rest of the world.

I was able, on my IPAD2, to watch Al Jazeerah English TV live and Pakistan’s GEO TV Live, which brought the first footage from the actual scene of the capture in Pakistan. Sadly, for the US Media, the Middle Eastern based networks were far better sources of world reaction than any of the US Networks and sources.

As the digital era makes the world smaller, US media will hopefully find the audience demand to justify a total reconsideration of its presence around the world.