Back after a week in Central America, and the vitriolic tone of the debate has moderated itself a bit.  With the noise level down, perhaps some signal can start coming through.

I was at the Digital Family Summit here in Los Angeles on Wednesday, where entrepreneur Jason Calacanis taped an edition of his “This week in startups” online video show.  Check it out – he runs down the basic differences in what’s going on with tech startups – basically, that companies previously got funding 1) during Dot-com 1.0 by just trying to get a big audience, before crashing & burning in the dot-bomb crash; 2) building up interesting features and exiting by selling out to Google, Yahoo, AOL, etc.; and now 3) everyone has to prove in their business plans that they are going to start generating revenue RIGHT AWAY http://thisweekinstartups.com/2009/09/twist-episode-18-with-mike-jones-and-peter-hirschberg/#more-419 Bonus: about halfway through, Jason takes my question that I submitted through Twitter; and if you don’t think it’s hard typing with one hand on an iPhone while juggling a camera and cocktail, well, *you* try it

The Colombian newspaper La Patria, located in the town of Manizales in the  volcanic mountain range west of Bogota, has an interesting “Club de Suscriptores” benefit package: http://lapatria.securesites.net/club_suscriptores/Beneficios_Seguro.htm  One of the chief benefits listed here is a form of insurance to protect you against accidents (as long as you’re younger than 64).  They also sell pre-paid “Classified Advertising Gift Cards” that allow the cardholder to buy 200 words for a 50% discount.  The subscription also comes with the by-now-standard local merchant discount card – for a laugh, click through to the page of the fast-food restaurant “McGuau” (pronounced “McWow”), to see their special on “Perro Gaseosa” or “Gassy Dog.”  Truth in advertising, that. They also promise to start holding concerts and exclusive cultural events that will be open only to subscribers.  (Full disclosure: I did multimedia and revenue-stream consulting work at La Patria.)

 At the Online Journalism Review, a whole bunch of innovatin’s going on http://www.ojr.org/ojr/people/davidwestphal/200909/1779/ David Westphal is looking at whether doing specialized research projects could turn into a reliable alternative revenue stream for news.  He cites as examples The Texas Watchdog (doing citizen-journalism training),  NewWest (running conferences) and the New York Times doing seminars with their big names.  A startup called GlobalPost, is charging $104 a year for special content, weekly conference calls and the ability to make story suggestions. The New England Center for Investigative Reporting, is also doing targeted research work, although they say they won’t do “oppo research” for politicians, or take on divorce cases.

For those still paying attention to advertising revenues, Group M predicts that internet ad spending will constitute 15% of the total global market next year, with mobile spending rising 19% (to about $3.3 billion worldwide). http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=113920  Display ads are going to be down, while search advertising is going to be up, from 38% to 43% of the total spend. Good news for Google, bad news for everyone else.

Deep thinker Clay Shirky is pessimistic about the future of news, but still calls for “a thousand flowers” to replace newspapers, rather than trying to implement paywalls http://www.niemanlab.org/2009/09/clay-shirky-let-a-thousand-flowers-bloom-to-replace-newspapers-dont-build-a-paywall-around-a-public-good/  Good quote: “The institutions harrying newspapers — Monster and Match and Craigslist — all have the logic that if you want to list a job or sell a bike, you don’t go to the place that’s printing news from Antananarivo and the crossword puzzle. You go to the place that’s good for listing jobs and selling bikes. And so if you had a good idea for a business, you wouldn’t launch it in order to give the profits to the newsroom. You’d launch it in order to give the profits to the shareholders.”

This isn’t a newspaper, but it’s certainly a bold new method for generating cash from your online content – Seth Godin, generally thought of as one of the “Good Guys of Online Content” apparently fell under some Sith Lord mind-control spell, because he’s engaging in what the digerati call “Brandjacking” http://outspokenmedia.com/reputation-management/seth-godin-brandjacking/ His new Brands in Public effort ( http://www.squidoo.com/brandsinpublic/hq ) has drawn intense criticism around the web: “Brand in Public was designed to show the world just how much Seth cares about your brand. Yep, he loves you so much that he has sent his team of goblins out to register your Brands in Public company page for you, fill it with scraped content (blog posts, tweets, Google News, Trends, etc) and then lock it down so that you have absolutely no way to touch or control it. Unless you pay him.”  Basically, he takes your brand hostage; it’s like an old-school mob protection scheme.  I’m guessing massive backtracking on this initiative in 4 … 3… 2…

 Another paid content/New Media revenue stream under examination is exemplified by CommonCraft – http://www.commoncraft.com/  Proceeding from the insight that one of the core functions of journalism is to explain the world to us in words/pictures/sounds that we can understand, CommonCraft seeks to sell those services to companies that want someone to explain what they do/want/give better than they can themselves. “If your product or service needs a video explanation, our Explainer Network of video producers can help. Common Craft has a history of making custom videos. But now we are more focused on videos we can offer on this website.”

Current online darling Facebook is starting to face some tough questions about how it’s actually going to convert all the time spent on its site into actual, you know, money http://www.pcworld.com/article/172088/five_possibilities_for_the_future_of_facebook.html  PC World breaks it down into 5 possible paths: 1) More games, 2) More Aggressive ads, 3) Branded merch (like a Facebook phone or Facebook OS), 4) Becoming a content aggregator like Google, 5) Nothing – it’s not possible to make money off this audience.

Two from Paid Content UK: the first says that maybe bundling print and online subscriptions together will help sell subscriptions, because “people continue to believe that touchable products command tangible economic value but, divorced from physicality and its associated costs, that digital content should manifest itself cheaper.” http://paidcontent.co.uk/article/419-pcukharris-poll-online-could-be-used-as-incentive-for-print-subs/ The next poll they conducted is a gutpunch to Murdoch’s hopes to start charging for all his online content – only 5% of the audience would pay, and 75% would just go find some free source. http://paidcontent.co.uk/article/419-pcukharris-poll-only-five-percent-of-readers-would-pay-for-online-news/ Their take: “We think the question for news publishers is this: is five percent of your readership (that’s the number who tell us they would pay) enough to offset the decline in advertising revenue that would come with putting your site behind a pay wall?”

In San Francisco, The Bay Area News Project is launching to cover civic and community news, funded by a local businessman http://www.thewrap.com/article/latest-local-non-profit-news-site-launch-san-francisco_7739 They are using the PBS/non-profit business model, which seems to be a growing meme in local journalism.

 In the mobile space, too much is happening to even attempt to keep up with. Microsoft leaked some photos of Courier, their new e-book reader, which is absolutely gorgeous and would make me toss my Kindle – if it turns out to be more than “vaporware” this could be a serious competitor to Apple’s long-rumored tablet computer. http://gizmodo.com/5365299/courier-first-details-of-microsofts-secret-tablet  Meanwhile, the IREX digital reader has been anointed “the best yet” http://dvice.com/archives/2009/09/hands-on-irex-m.php because of the way you can load/unload/manage/share content on it.

And last, I highly recommend clicking over to the Economist’s cover story on mobile. The examples they give of how mobile technology is revolutionizing the lives of the “other 2 billion” on this planet is inspiring in a deep way http://www.economist.com/printedition/displayStory.cfm?Story_ID=14505519 There are examples there of how paid content is working on the mobile deck in places like rural India and Africa that point out how value is expressed and captured in information, even on the most simple and granular level.

DigiDave asks, “We Aren’t Still Looking for a Silver Bullet, Are We?” http://www.digidave.org/2009/08/we-arent-still-looking-for-a-silver-bullet-are-we.html He compares the strategies of Leo DiCaprio in Titanic vs. Tom Hanks in Castaway – that Leo clung to one raft, froze to death and sank into an icy watery grave, while Tom lashed together a bunch of logs, none of which could support him on their own, and wound up in 1^st class, turning up his nose at some perfectly good crab cocktail. He cites “Other streams that are untapped.

1. Becoming an ISP provider (might only work in rural regions)
2. Events! Look at the tech blogs: Mashable has parties for their MTV crowd, TechCrunch has startup conventions for the biz crowd, ReadWriteWeb has conferences for their straight geek crowd. Could the SF Chronicle host an event for public discussion and charge at the door?
3. Ad networks. The best thoughts around this I’ve seen recently come from Boss Jarvis’ presentation at Aspen. Say what you want about the numbers – the concept deserves exploring.
4. Newsroom cafe anyone? Still one of my most commented on blog posts.
5. ViewPass or as I understand it – increasing our knowledge of readers to increase CPM.”

Steve Buttry writes about what exactly newspapers have gotten wrong in their communities to make so many people turn their backs on them http://stevebuttry.wordpress.com/2009/08/29/chris-obrien-responds-about-data-and-newspaper-readership/

Larry Kramer asks “Can Yahoo Save the News?” http://www.thed ailybeast.com/blogs-and-stories/2009-08-30/can-yahoo-save-the-news/?cid=hp:beastoriginalsR2 This article has generated a tremendous amount of coverage and comment, because he has AOL and Yahoo crowing about how they have a big advantage over newspapers because they don’t have the twin legacy anchors of printing plants and truck distribution networks weighing them down. “While this is all great news for proponents of original content, it’s a shot across the bow of the existing media companies that continue to cut editorial and other content-creation assets as a way to stem losses. They are now increasingly in danger of losing their one advantage—the brand equity they have built as the “go-to” place for whatever category of content they dominate. These new players could have time to build up their reputations and take the entire business away.”

For a European perspective, check out what Futurist Gerd Leonhard said at the Tokyo 2.0 conference http://www.mediafuturist.com/2009/08/content-20-free-vs-paid.html If you want, you can skip directly to the presentation on SlideShare http://www.slideshare.net/gleonhard/content-20-free-vs-paid-futurist-gerd-leonhard-tokyo-20

The Pittsburgh Post-Gazette launched a new paid web site this week. Everyone’s watching it closely to see what happens.  Editor and Publisher has a big write-up http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1004008125  This is an incremental, rather than a revolutionary change; they’ve apparently listened to expert opinions, and rather than just slamming down a paywall and kissing their digital ad revenue (and all possible future New Media growth) goodbye, they’ve bundled some exclusive web-only content into this paid version. “A peek at the PG+ lineup finds a mix of pay-only blogs and discussions, as well as a Facebook-like online community in which users sign on to post comments, interact with other users and Post-Gazette staffers. Online discussions with journalists and others also will be held. In addition, two political writers will face off in an online discussion each day, while numerous sportswriters will blog only on the paid site in addition to their regular free site coverage. The newspaper has even sent a new beat writer to cover Penn State football for the first time in years, and blog only on the PG+ site. Subscribers also get blogs from the paper’s music writers, gardening expert, and others, as well as photos available only on the paid site. They even get a sneak preview of the next day’s political cartoon in advance. There is also a breaking news feed that links to stories on the main free site.”

The Economist has an answer to “What should newspapers have done?” http://www.economist.com/blogs/freeexchange/2009/09/what_should_newspapers_have_do.cfm Their prescription: recognize that they’re doomed, and just keep shrinking the companies, cutting and cutting until they finally die, while still delivering the expected cash to the shareholders “until it runs out.”  This strategy might earn the author a place in the journalists Hall of the Most-Hated.  The Economist, however, reckons that newspapers have a third option “Often, when an industry faces decline, management and ownership will opt to take door number three; rather than reinvesting profits in new businesses or redistributing them to shareholders, they’ll direct them to legislators and lobbyists in an effort to buy themselves protection from competition.”

A list of the Top 10 Lies Newspaper Execs are Telling Themselves http://simsblog.typepad.com/simsblog/2009/09/top-10-lies-newspaper-execs-are-telling-themselves.html  The author focuses on admitting that the digital side doesn’t work according to the rules of the print side, where ad reps “aggressively answer the telephone.”  She also says that newspaper execs that want to make the move to the Digital Side, must be conversant in such things as the Three-Wolf Moon t-shirt is, and what “pwned” means.

A blogger posted a YouTube video that was quickly becoming a viral hit, demanding payment from the Tampa Tribune for “aggregating” her content.  She’s asking for $75, and the commenters seem to be in her corner http://www.youtube.com/watch?v=G7HnmQ4r6os It’s kind of tongue-in-cheek, making fun of mainstream media demanding that shoestring bloggers render payment.  Which fits right in with our next entry…

Blogger Dominic Self writes a sarcastic apology to James Murdoch for not properly kowtowing to the “power of privatized plurality” and giving every last cent to the News Corp. properties http://dominicself.co.uk/blog/item/2009/08/an-open-letter-to-james-murdoch#nucleus_cf  “I’m really, really sorry. Really, I am. I’ve let you down so really terribly badly, and the least I can do is apologise right here and now.” 

The LA Times is experimenting with paid content with their back catalog of celebrity portraits through Getty images http://www.eandppub.com/2009/08/getty-to-syndicate-la-times-celeb-portraits.html This is actually one of the more interesting moves of the week to me, and show that at least someone in the management is thinking of ways to start leveraging the assets they have on hand to generate revenue.  It will be interesting to see what the effects of this will be, and how the various players in this revenue scheme (i.e. photogs and celebrities jealous of their images, with highly paid attorneys on retainer) feel about it.

This is a thought-provoking post about the breakdowns of logic and data-gathering when trying to solve a complex problem http://stevebuttry.wordpress.com/2009/08/29/chris-obrien-responds-about-data-and-newspaper-readership/ “…that’s the problem with a lot of data we’ve gathered. You can’t always be sure the people themselves know why they do what they do, or what they really want. Or whether you’re even asking the right questions. During one of my Rethinking interview sessions, my team talked to a woman in her early 40s who spoke at length about how un-interested she was in technology and how she didn’t feel like technology played a role in her life. As she was speaking, she kept taking out her BlackBerry and checking her email. Now, if I’d called her on the phone, and asked her about her interests, I would have checked her off as a woman not interested in technology. But in observing her, I could see that she was. Was she lying to me or was she ignorant? No and no. But she clearly thinks about that topic differently.”  He also takes on the contention that young people “don’t read newspapers” by citing Knight Foundation studies of college students that shows that they all snap up print copies of newspapers when they are left lying around for free in the cafeteria or other public places: “In fact, the generation that doesn’t read print does read a lot of print. What the surveys have really been telling us is that this demographic won’t pay to have the morning paper delivered every day. But when they encounter a printed product that’s free, is compact, and fits the way they consume news and information, and yes, usually has the crossword and comics, then they’ll consume it in large numbers. Do I think print is the future? It’s a part of it, much bigger than most folks believe, I think.”

The Financial Times points out that Brazilian papers are finding success in some very unlikely places – the favelas where many people are functionally illiterate and poor – but somehow find the money to buy lurid tabloids like Super Noticia http://www.ft.com/cms/s/74117334-957b-11de-90e0-00144feabdc0,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F74117334-957b-11de-90e0-00144feabdc0.html%3Fnclick_check%3D1&_i_referer=&nclick_check=1

When talking about paid content, it sometimes helps to have a mathemetician to graph out the various values we can estimate the information we’re trying to market will have to what target audiences at what time. The Information Architects have such a graph http://informationarchitects.jp/the-value-of-information/ Great quote: “Even though practical and financial information has direct or indirect (i.e. time saving) financial value, mostly the value of information consists of qualities that are tough, impossible or even unethical to sell. Stripping information off its heavy physical body and avoiding the wasteful physical distribution and making its access unlimited uncovers the essential, that is: intellectual value of information. And which true capitalist would pay for such useless nonsense such as sophistication?”

 They break it down into categories:

1. Economic information (buying guides, patents, ads, jobs lists, classifieds)
2. Art – information as a goal in itself (fiction music, painting, poetry”
3. Scientific information  (encylopedias, white papers, medical data)
4. Practical information – information that supports the process by which we make decision (political news, parent guides)
5. Entertainment or the Attention Factor

“The good news is that the less papers are read and the more attention online gets, the higher the chance to sell advertisement online at a decent price. The real problem newspapers face is that corporations are still willing to pay fantasy prices for print and TV, offline ad production as well as for offline distribution. As long as the blue print for online advertisement is Google adwords, there is no hope for commercial news to survive the new media shift.”

In Italy, the government is investigating whether Google News is practicing anti-competitive behavior, saying that the News is hurting Italian news sites. The actual data says: not so much http://www.techcrunch.com/2009/08/31/who-dominates-online-news-in-italy-not-google-news/

The New York Times takes on the whole idea of “Freemium” and profiles how some companies are making money by giving things away for free http://www.nytimes.com/2009/08/30/business/30ping.html?_r=1&em Where it gets interesting is in the facts & figures about how audience behavior affects profitability “”Free is not a loss leader,” he says. “If we can get a small percentage of users to pay we start to make money. How many times has a venture capitalist heard that? But Mr. Libin showed that the magic is not only that it takes just a small percentage of customers to turn red ink into black, but also that the longer they remain customers, the more profitable they become. About 75 percent of the customers walk away within the first four months. That’s not worrisome, because the revenue from Evernote’s 500,000 active users is growing faster than the growth in the customer base. How? Customers discover that they need more than the basic storage space or want some extra features, like the ability to scan PDF documents for a particular word. Evernote charges them $5 a month or $45 a year for these and other benefits.”

AND FINALLY, THIS WEEK’S MUST-READ:

Entrepreneur Demian Entrekin talks about how to get your company through the crazy decision process http://vator.tv/news/show/2009-08-27-big-decisions-in-small-companies The observations about the differences in culture between product producers and sales people is worth considering: “Product guys and technology guys tend to think everything is about the product. Their view is that the rest of the business revolves around the product, and the product is the center of the universe.  In their view, no one could do anything without the product.  Product guys can tend to think that sales folks are venal and corrupt.  Product guys focus on core technology, long term technical viability, flexibility and elegance, and the user experience.  They are motivated by building something cool.”Sales guys tend to think everything is about the sales team.  Their view is that they drive the revenue, and that everything else is just an expense or a necessary evil.  Sales guys can tend to think that Technology guys are geeks who are goofy, out of touch, and un-cool.  Sales guys feel that they can sell anything, and that one product is as good as another.  They also tend to think that their product isn’t good enough and they know what it should do better than anyone else based on the current deals in their pipeline.  They are motivated by the chase and the deal.” He goes on to describe the narrow thinking process of each of the players in the paid content debate.