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Micropayments call? The web is not always free: Thoughts from Auletta, Schmidt, Anderson

Is there a thaw in 15 years of thinking that content on the web shall always be free? On Monday Nov. 16,  All Things Digital's  Kara Swisher posted a link to a chapter outtake from Ken Auletta's new book, Googled: The End of the World As We Know It.  Swisher wrote:

Ken Auletta says he decided to kill the chapter on things he's learned from covering the media and Google because it was "not organic to the book's narrative, and because I feared it [would] muddy the books purpose, casting it as a How-To book." He's put the 25 maxims on his website.

Here's an excerpt of one of the 25 maxims  posted by Auletta here:
http://kenauletta.com/mediamaxims.html

A "Free" Web Is Not Always Free (by Ken Auletta)

The Web needs another revenue stream. The Internet grew to adulthood as a largely "free" medium but only by using the advertising-reliant model pioneered by radio and television broadcasting. As Stanford President Hennessy had told me, echoing a heretical thought I encountered more and more while reporting this book. "We should have made a micro-payment system work." Free works for Google search. It will work for other sites. But it does not work for most content businesses. Whether the right model is micro-payments, or subscriptions, or pay-for-services, or some combination of these is less important than making an effort to end advertising dependency.

Even Wired editor Chris Anderson, who once more forefully advocated that free was the perfect model (his 2009 book is titled, Free), has been intellectually honest and amended his position. Blaming the deep recession, Anderson appended a "Coda" chapter near the end of his new book in which he wrote that he now believes "Free is not enough. It also has to be matched with Paid." Eric Schmidt also shifted his view on charging for content on the Internet. "My current view of the world," he told me in April 2009, "is you end up with advertising and micro-payments and big payments based on" the nature of the audience.

The recession is one reason to seek another revenue stream. The other is the risk posed to journalism -- and to many Websites -- when content providers grant life-and-death power to advertisers.  Advertisers will always want the most conducive setting for their ads; they want to sell products, and have perfectly good business reasons to be concerned with the environment in which their ads appear. The problem is that this impulse leads them to push for more "friendly" news: a senior network news executive said, "I've seen increasing incursions by advertisers into morning show content. Can the evening news be far behind?"

Of course, network news has in recent years made itself more of an inviting target for advertisers by allowing the morning shows and evening newscasts to become "softer" and more superficial. Likewise, it is as certain as a sunrise that advertisers will want tamer social networks and more predictable YouTube videos to accompany their products. To better target their ads, they also want to extract as much information about their potential customers as they can. But news outlets or Websites that share users, private information or allow themselves to be seen as bought and paid for will lose the trust of their customers. An additional revenue source will give them more leverage to resist.

-- END OF EXCERPT FROM AULETTA UNPUBLISHED BOOK CHAPTER --

The excerpt above is copyrighted material, the use of which may not have specifically authorized by the copyright owner. The material is made available in an effort to advance understanding of political, economic, democracy, First Amendment, technology, journalism, community and justice issues, etc. We believe this constitutes a 'fair use' as provided by Section 107 of U.S. Copyright Law. In accordance with Title 17 U.S.C. Chapter 1, Section 107, the material above is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this blog for purposes beyond fair use, you must obtain permission from the copyright owner.

 

What exactly is newspaper premium content? That's not the point

Over at his excellent personal blog, Steve Outing began a day or two ago a thread in which he asked the question: What is the news that people will pay for?  It's a discussion which has been going on for more than 15 years, in one venue or another. I can remember exchanging posts with Bob Wyman in Feb. 1995, when he was vice president of new technologies at Medio Multimedia, Inc. in Seattle. Crosbie Fitch was one of the earliest people to post on your independent OnlineNews list. And Gordon Crovitz is certainly the person with the most experience at successfully charging on a broad scale for niche content on the web.

 

What's different now, is that all of the prognostications by these and other sage observers about what would happen to the news business are coming true. The pain is now great, and there is now the possibility that more than a decade of ideas will be tested. That's the promise of Journalism Online, of Cynthia Typaldos’ Kachingle,of the Project VRM  coordinated by “Doc” Searls, and of CircLabs Inc., the company spawned from The Information Valet Projectwe started in collaboration with the University of Missouri's Donald W. Reynolds Journalism Institute and The Associated Press -- the chance to finally put fresh ideas into the marketplace and test them.

 

Crosbie's right (above): It's time for news providers (please, let's stop using the term "newspaper" -- it is no longer about a physical product but about a service) to learn how to be paid for producing the news, not for delivering copies. "Don't sell copies," says Fitch. "Sell your work."

 

"Stop thinking that newspapers will make money only by covering breaking news, and look at what the marketplace will really support . . ." adds J.D. Lasica, another veteran innovator committed to finding ways to sustain and morph journalism in our new information ecology.

 

Listen to Bill Garber, as he notes that most of now pay as much as $60 a month for what was once free -- television. But is it really the same thing? No. We are paying for the service, he notes, of clear signals, much more choice, and -- increasingly -- time-shifted and ad-stripped programming. To say that people won't pay for the news is axiomatic. Not what the news is today. But the news service we are all creating today will become as different as cable TV services are different from the three broadcast networks of the 1960s.

 

"For centuries, the community newspaper oriented community members to the social and economic and political components of their community," writes Garber. It did that better than any other service could. But that product is now wholly inadequate to the competition or to the expectations of the millennial-generation users for portability and personalization.

I would add that today, news has become grist for an array of increasingly personalized and targeted services. What's the value of grist -- flour -- compared to a baked good? The services we sell have to be more than the grist, although the grist is an essential ingredient. We can't sell grist; we have to sell the baked goods.

 

It's painful to hear the judgment of the anonymous poster "Tearing Hair Out" when she writes: "Face it, the days of the large news organization as it existed are over. Dead. Kaput. Just fold it up already. Break into micro-units and go sell ads, or better yet, just disband." What Tearing Hair Out is really saying is that nobody is paying for unbaked flour anymore. They want a service, which incorporates all of the innovation of the last two decades. It will build on what Steve Buttry and the other folks at Gazette Publishing Company in Cedar Rapids, Iowa, called "the complete community connection." It's the same thing former newspaper companies did -- supplied community and connection -- but the task has grown far more sophisticated and moved beyond any one product to an all-encompassing relationship with the individual user.

 

Why this change? Because information has become a commodity. Attention is the new unit of value. The former news industry is now competing for the attention of users . . . of citizens . . . to be the most sophisticated "information valet"in their lives. If you save time, provide the best insight, help the user to do their job better or live their life more fully, you get their attention. Again, noting Crosbie Fitch -- the service is a performance. If you perform well, you may be paid, by subscription, by click, or perhaps by advertisers who are pleased you have presented to them the attention of your users.

 

Gordon Crovitz outlines five approaches that between five and 15 beta testers of Journalism Online are considering will begin experimenting with "in the next month or so" (quoting from Steve Brill, Crovitz' business. Each has merits, and four out of five have been tried, never in an apples-to-apples research environment, which Journalism Online offers. The fifth -- a combination of publishers to provide "all you can read" packages of particular topics -- is novel, at least across the web.  That was the idea behind AOL, which failed because it was a "walled garden" whose users ultimately felt trapped.

 

What we need is an "unwalled garden," in which users are free to choose from an array of service providers, all of whom operate across a common platform, giving access to unique bundles within and outside their particular "unwalled garden." And each unwalled garden needs to be hyper personalized -- to use a phrase coined by Marissa Mayer of Google.

 

Each of these unwalled gardens may constitute the deep-news focus advocated by Bob Wyman, in his "tip-of-the-iceberg" analogy. He says general news is the tip of an iceberg, which every news producer can match, and which is therefore now a commodity, and not of value. But the hyper personalized, niche content -- the "deep content" which my colleague Martin Langeveld notes is not even available on the web today because nobody can make money on it -- is an untapped source of value to users as part of an overall "information valet" relationship.

 

In 1997 and earlier,I wrote that newspapers were going to face a train wreck once fat pipes came into the home and people could go anywhere for information. Newspapers, I wrote, would need to learn how to make money referring people to information from anywhere, sharing both users, and content.

Today, that is still the challenge. Do we “abandon the news”  (credit: Merrill Brown) – or embrace it, baking it into the new attention ecology?

VIDEO: Harvard Prof. Michael Sandel on why news reading is critical to citizenship -- not consumer-ship

Why is journalism important?  Listen to Michael Sandel, Professor of Government at Harvard University:

http://www.songofacitizen.com/songofacitizen.com/1.html

Says Sandel in this five-minute video: "The newspaper is perhaps the most important instrument of civic education, because that is the way citizens learn what's at stake."

He adds: "Unless people share a common life, unless they bump up against one another in downtown areas or in public transportation or in public schools, or libraries or other public facilities, it won't really be the case that they share a sufficiently common live to deliberate with each other about the
common good."

If we're to be citizens, not just consumers going off to the mall, says Sandel, the two things a democracy requires that need to be revitalized are "informed citizens who read the newspaper, who learn about public affairs; the other is the cultivation of those shared convictions, the habits of the
heart that can motivate and inspire men and women to deliberate not only about their own individual interest but about the common good."

-- END SANDEL --

For my part, I don't think what needs to be saved is the act of reading the newspaper (as in paper) every day. It is the act of devoting some portion of your daily life to an activity that informs you about civic issues.

This article discusses the translation of Sandel's Harvard course into a 12-episode PBS documentary to run this fall and winter:

http://chronicle.com/article/Michael-Sandel-Wants-to-Talk/48573/

AUDIO: Google CEO Eric Schmidt addresses the NAA

Click on the left carat of the bar below to listen to Google CEO Eric Schmidt's address on Tuesday, April 7, 2009 to the Newspaper Association of America convention in San Diego. The speech was sponsored by the Donald W. Reynolds Journalism Institute at the Missouri School of Journalism.

Building a profit-making company with a social mission

The "L3C" corporate form -- introduced in Vermont in spring, 2009, enacted in two other states and under consideration in others, is attracting interest as a possible vehicle for hybrid ownership -- a company which is subject to ordinary taxation and can make profits, but which is also capable of attracting charitable foundation investment because of a social agenda. In this short video, Chris Miller, community outreach coordinator of the Skandalaris Center for Entrepreneurial Studies at Washington University in St. Louis, describes the form, which some people are saying might be a future structure for newspapers. Miller is at 314-935-6906 (clmiller@wustl.edu ... for more information, see: http://newshare.com/ivp/l3c.pdf

AUDIO: InfoValet and the NPR opportunity -- in seven minutes

Could the InfoValet Service  help National Public Radio to create a news-sharing network that benefits its affiliates and the national programming service without disrupting donor relationships? Bill Densmore in director of the Information Valet Project at the Donald W. Reynolds Journalism Institute  at the Missouri School of Journalism. In this seven-minute excerpt of a recent discussion, Densmore explains InfoValet and how it might work witih NPR affiliates. Click on the carat of the bar below to launch streaming video, or download an MP3 podcast for offline listening.  (7.5 mins., 1.8 MB) 



You can also read a two-page backgrounder  about InfoValet, read what Editors' Weblog  and The Chicago Reader  have written, browse the resources resulting from the Dec. 3-5, 2008 "Blueprinting the Information Valet Economy" summit at the Reynolds Journalism Institute, see who participated, and read one possible scenario for InfoValet at a major newspaper. Finally, there's an interview with a St. Louis radio talkmaster.

Updating the journalists' creed -- two discussions

Mike Fancher, a 2008-2009 Donald W. Reynolds Journalism Institute fellow at the University of Missouri, is conducting a series of discussions designed to gather thoughts for how to update "The Journalists Creed."  Here are two recent discussions:

AUDIO: Fancher creed discussion No. 1

Click To Play:

AUDIO: Fancher creed discussion No. 2

Click To Play:

PODCASTS (DOWNLOADABLE):
http://densmore.hipcast.com/download/1160f7fb-2b87-a708-de13-5c699c4d4f14.mp3
Audio Description:AUDIO: Fancher creed discussion No. 2
Duration:1 hour, 25 minutes, 4 seconds
Date Last Updated:Wed 12 Nov 2008 05:53:27 PM CST
File Size:20.42 MB

http://densmore.hipcast.com/download/add46c24-e534-7448-001b-c3a91703d0b2.mp3
AUDIO: Fancher creed discussion No. 1
Duration:1 hour, 32 minutes, 36 seconds
Date Last Updated:Wed 12 Nov 2008 05:23:27 PM CST
File Size:22.23 MB

Explaining the Information Valet Project

What is the Information Valet Project? In this 15-minute audio podcast, IVP researcher Bill Densmore of the Donald W. Reynolds Journalism Institute of the Missouri School of Journalism explains. This talk was recorded Oct. 10, 2008, at Univ. of South Carolina's Convergence and Society annual presentation of academic papers, subtitled: "The Participatory Web."

Click on the caret on the left of the bar below to listen to streaming audio, or download an MP3 podcast for offline listening  (14 min., 55 seconds / 14.32MB)

An old publishing hand on Clickshare and InfoValet

An old colleague of mine -- he's still writing his blog anonymously but may come out of the closet soon -- is offering his take on Clickshare and the related Information Valet Project:

http://newsafternewspapers.blogspot.com/2008/10/carry-on-jeeves.html

AUDIO: Researching the psychology of media messages

What's the psychology of media messages? Researchers from the Missouri School of Journalism tackle the topic during a 70-minute presentation at the 100th anniversary celebration of the school's founding.

One this session are Paul Bolls, Glenn Leshner and Kevin Wise, who work in the school's PRIME Lab (Psychological Research on Information and Media Effects).