Saturday, January 3, 2009

Children and Parents in the Com Eco

It's not the Internet. It's Google-Mart.

I came across a really neat blog this morning. Terry Heaton’s PoMo Blog. If you have a little time, Survival is Not a Strategy is a Must read.

In the last couple of weeks I've been watching and commenting on the great "newspaper" buzz that's going on in the Cloud. If you think printers don't get it, you should read the journos.

Google-Mart Economy rules are different. When the seas change, the fish blame each other.

My take is that it started with the coverage of the Vietnam. For newsPapers, it started when women were allowed to get real jobs. That meant less time to sit down and scan the paper before dinner. Then came Craig's List and half their revenue disappeared.

The answer is going to come from local advertising in local publications and stuff that people will willingly buy: books, newsLetters and posters.

from the link:
. . . take a look below at the graph from the folks at Gallup from their annual governance poll. Only 9% of Americans say they have a great deal of trust and confidence in the mass media to report the news “fully, accurately, and fairly,” and the slide didn’t begin with Bush’s war.

From Gallup's annual governance survey
mass media to report the news “fully, accurately, and fairly,” and the slide didn’t begin with Bush’s war.

From Gallup's annual governance survey

Where DID the slide begin? Oh my, that can’t be! The professional press wants so badly to believe its own hype that it refuses (is unable) to acknowledge the truth, that the slide in press trust in the U.S. began atop professional journalism’s Watergate mountain. Of course, the pros will argue that this is when spin doctors began their assault on the press, but that’s just hubris."

Friday, January 2, 2009

Predictions for Print in 2009

Interesting stuff at Trans-Promo Live. It's worth the click to read the full post.

He said, in the lede,
2009 World and TransPromo Predictions The change in the white house will send the signal to the world, that America is changing. The reinvestment of dollars back into America will create new pride in our products and services. The changing of the guards will symbolize new hope and birth the New Economy. The programs put into place will be smarter, and as America reclaims status in the world New Economy. This new economy moves faster, has massive infrastructure, and is socially connected at work, play and on the web. Once Americans unite - expect mega change . . . more
I said, in the comments,

I think you’ve nailed it. Just some additions,

It will be getting closer to tipping point time for education, health and government. Cell phones will connect physical print to the Cloud. The information in the Cloud will come back into real life in Print. Google will store and deliver real time locational analytics. iPhones, Blackberries and competing 3G phones will be standard. As this scales, around 2012, direct mail as we now know it, disappears.

Formal educational institutions will be forced to share the value created by Cloud based communication with faculty, students and parents. New organizations, without the legacy overhead of a monopoly market, will form that will offer education at appropriate prices. The disruption of newspapers and the auto industry will be small potatoes compared to the coming disruption of “higher ed.”

Added after the comment at Trans-Promo Live.
Check out this post about online higher ed in California because of the budget crisis.

For health this means a printed poster, cell phone linked to a website, with a printed booklet for that baby boomer with their specific medication protocol. It will be printed at the point of contact at the primary care facilities. It will start at Walmart or another retail health delivery functionality.

For government it will be online posting of legislation and executive rules in process. The content will go to a wiki, be crowd sourced and then printed versions pulled down from the cloud by interested people to distribute to their friends, constituents and representatives.

For newspapers it will be using the long tail of content to produce paperback books, posters and customized newsletters delivered to avid readers who are willing to pay money for them. Some of those readers will be bottom of the pyramid high school kids and their parents.

Print will begin to migrate away from advertising and towards printed content that people willingly pay for.

New print capacity will move towards printed electronics, focused on RFID, OLED displays and printed solar panels. As the printed electronics industry grows, the supply and demand of print capacity will be rebalanced.

Value comes from doing something easier and better than your customer. The thing that every printer does easier than almost every customer is manufacture books, news(letters), posters and packaging.

The trick is seeing that a "book" includes magazines and any bound multi page document. That means presentations, power point in print, stapled handouts.

"News(letters)" includes company newsletters, the NY Times,Church bulletins, brochures and billing statements. That means pages that are meant to be scanned, but mostly read.

"Posters" include business cards, signs, printed pens and apparel. That means stuff that is mostly meant to be scanned and sometimes read.

Packaging holds stuff with elements of posters thrown in if that helps getting it distributed.

Real innovation comes from figuring out new ways to use the stuff that printers already make, not by printers becoming communication providers. Except of course, for those printers that actually become communication experts.

Tuesday, December 30, 2008

Newspapers should get out of the dog food business

Since the 1890's the business model for mass market newspapers has been "aggregate eyeballs and sell them to advertisers."

The people paying the bill (advertisers) don't care about the product, they care about the eyeballs. When the user doesn't pay the bill, that's a dog food business. In a Google Mart economy, every dog food business is under severe stress. The worlds of education, health and government are replete with dog food businesses.

Just three examples to illustrate:
1. Consider the effect of tying textbook purchases and educational outcomes to the compensation of school boards members.
2. Or the compensation of hospital and HMO administrators to public health outcomes.
3. Or the effect of disqualifying all political appointees and elected officials from government funded health care plans.

Anyway, under Google-Mart rules the better business strategy is to produce stuff/service that people willingly buy. It is a revenue stream from the user, not the advertiser nor the stock price nor the ability to convince an administrator that it is a good idea. It gets the incentives aligned to create a product improvement feedback loop. A business that sells well designed products produced efficiently and priced appropriately are much less bubble prone and much more open to the small improvements that lead to big innovations.

Models are evolving in the world of successful web spaces. Amazon, ebay and WalMart don't focus on aggregating eyeballs to sell to advertisers. Sales, basecamp, don't aggregate eyeballs. They sell service/stuff to people who willingly buy that service/stuff.

The necessary, but not sufficient, business rule for selling stuff is "better, faster, cheaper search and delivery." For service it's "try it for free, pay for an upgrade when you want to upgrade." For everything else it's keep the cost of production to an absolute minimum and price appropriately. If the appropriate price is free, figure out additional revenue streams. (Consider Google and free newspapers.)

The paradox is that while there is lots of talk about how "newspapers need to embrace the web," that part of the ecology is actually developing nicely.
Although print newspapers--especially big metro dailies--appear to be locked in an irreversible long-term decline, newspaper Web sites have had big increases in audiences. In October 2008--the last month for which data is available--newspaper Web sites attracted a total of 68.97 million unique visitors--up 64% from 41.96 million in October 2004. The October 2008 figure represents 42% of the American adult Internet-using population--up from 28% in October 2004
They are having a bit more problems with Web 2.0 and Web 3.0 to come. But they are smart people, so I believe they will figure it out if they can buy enough time.

Newspaper websites are getting traffic. They are attracting an audience of viewers and some advertisers. But the CPM for web advertising is so low you need a billion hits a month before it gets interesting, if you have a high overhead. Cutting overhead is very painful for both good and bad reasons.

The problem is not "nobody reads" or "the web is eating our lunch." The problem is that advertisers are no longer willing to pay high prices for unmeasured results. Sad to say, the advertising business grew in an environment of unmeasured results and arbitrary pricing. That works when there is lots of money floating around. That era has passed.

Meanwhile "search, scan and read for free, pay for stuff" is the evolving norm for content on the internet. The New Yorker seems to get it. The viewer can "read for free" everything that is in the Print edition. But you have to pay for the magazine. Meanwhile, they continue to create new stuff/events they offer on their site and in Print.

For a good newspaper this should be a no brainer. They are either blindsided by their tunnel vision focus on advertising or don't really produce content that people would buy.

Another possibility:
Imagine a series of paperback books approximately 96 pages. They will be produced in close to real time based on the news cycle. The content would focus on any complex problem; immigration, economic redevelopment, local government, local community health or safety, that first appeared in a serial version.

1. First, the series of articles on the website and in the regular print publications.
2. Then an open blog discussion with some experts discussing the issue from different points of view.
3. Then an edited Print edition, with carefully selected parts of the discussion included.
4. Then sell the Paperback version on the website, at events or offer it as a benefit to subscribers.
5. Then repeat as long as the issue is still to be resolved.

Given that barriers to printing a book are so low and that newspapers presumably have the staff that is capable of telling an understandable story about a complicated issue, it should be as easy for a good newspaper as it is for Costco to private label anything they find appropriate.

But who is going to pay for it?
1. Niches of viewers who have followed the story as it was being assembled.
2. Tribes of viewers who need the print version, because "people like us" buy the book.
3. Politicians who have little time to understand complicated stories.
4. Every school system in the United States that needs timely relevant stories about our common situation. (That's the textbooks piece)

Oh yes, maybe certain advertisers - non profits, advocacy groups and government agencies, and businesses with a good brand - might be allowed to underwrite a series, in the interests of educating the public.

Here's a column I did about dog food, textbooks and printing back in 2006.

Monday, December 29, 2008

Blablabla about Newspapers

When established institutions have to play by Google-Mart rules it generates lots of blablabla.

Take newspapers for example. The public discourse is all abuzz with "saving newspapers." Since the public discourse is mostly controlled by journalist types, the blabla focuses on the "news" and the threat to democracy if newspapers disappear.

Give me a break.

Most people never bought newspapers for the news. Even in the latest surveys, 70% of Americans say they get their "news" from TV. Most people bought newspapers for the sports or the classifieds or the weather or the cartoons or the ads from local stores. Every once in a while there were stories that masses of people cared about; national elections, wars or financial meltdowns. But mostly, most people are too busy living their lives to focus on "general news."

Pre Google-Mart, newspapers lived in protected markets and captured 20% gross profits. But then Craiglist took away the classifieds. That was 50% of the advertising revenue. Then came the internet. This year the internet overtook newspapers as the source of "news."

Meanwhile, newspapers are in the logistic business. The business model is aggregating "readers" and selling them to advertisers. Same business model as TV. Same business model as many websites. But that's not the business model for amazon, ebay or wall-mart. They were the three most visited websites this Christmas season. Those websites are in the logisitics business. They make it easier to buy stuff. The business model is to get people to buy more stuff.

Most of the blabla I've seen, heard and read is about doing better news so that a news organization can aggregate eyeballs. Nowadays, the talk is about well defined groups of eyeballs with special interests, that can be sold at higher CPMS to advertisers. The problem with this approach is that large brands are still having a hard time figuring out how to scale advertising to niche markets. The other problem is that there are many competing ways to speak to niche audiences.

So . . . instead of closing print plants and laying off printers, newspapers might be alot better off trying to figure out ways to outsource the finding and writing about the news and concentrate on their unique defensible advantage: printing and delivery. That's a business with high barriers of entry, a long manufacturing tail with every improving ways to print and deliver.

Consider that Rupert Murdoch is building a state of the art newspaper manufacturing facility in the U.K.

Here's one I found this morning. The link is in Dr. Druck's Shared Items in the side bar.
Parade added 71 new newspaper partners, with a circulation of 2.42 million, to its national distribution. The addition of scores of new newspapers--most of them local dailies serving small and mid-sized cities--brings Parade's total circulation to 33 million, with distribution via 470 newspapers nationwide. Parade claims to reach 73 million readers every week.

Doing a bit of competitive boasting, Parade noted that 53 of the 71 new newspaper partners had switched from USA Weekend, another leading newspaper-distributed magazine. Owned by Conde Nast, Parade added newspaper partners including the Connecticut Post, based in Bridgeport; the Journal Star of Lincoln, Nebraska; Iowa's Sioux City Journal; North Dakota's Bismarck Tribune; and the Napa Valley Register.

The scarcity of big-city papers in the list of new partners isn't a drawback--quite the opposite. Unlike most big metro and regional dailies, which have seen circulation and ad revenue plummet over the last couple of years, newspapers serving towns and smaller cities are faring surprisingly well in both arenas.

It seems that Parade and "newspapers serving towns and smaller cities" are still in the logistics business. They haven't drunk their own kool-aid about newspapers being the important source of news.

Journalists, on the other hand, are gathering around Cloud based functionalities to find and deliver "news." Consider, the Huffington Post, Open, the hundreds of local blogs and social media sites around the country. If newspapers learn how to outsource the journalism and focus on the core values, they will probably do just fine.