All of that and more is contained in the latest State of the Media report from the Pew Research Center’s Project for Excellence in Journalism, which was released on Monday morning (Note: We will be discussing many of these issues and more at our paidContent conference in New York on April 17). There’s a lot to take in, but here are what I believe to be some of the key takeaways:

The Bad News:

• Cutbacks continue, and consumers are leaving: Close to one-third of U.S. adults say they have stopped using a news outlet because of dissatisfaction over the content — in other words, because they weren’t getting the news they wanted, or the news they expected to get. Survey respondents mentioned both fewer stories in general and less complete reporting, and while it’s impossible to know whether this phenomenon is related to the repeated rounds of cutbacks and job losses, it seems likely.



• No one cares about the industry’s financial problems: One interesting aspect of Pew’s research is that only a small number of respondents were even aware of the financial woes of the media industry — and even worse, those who were the most aware of the situation were also the most likely to have stopped using a traditional news outlet. Are some readers choosing to desert what they see as a sinking journalistic ship? It certainly looks that way.
• The disruption of advertising is accelerating: Although digital advertising rose by 17 percent last year, that was not nearly enough to make up for the ongoing decline of print advertising, Pew said. In 2012, approximately $16 in print revenue was lost for every $1 in digital revenue — an even worse ratio than the already dismal 10-to-1 relationship that existed in 2011. And much of the growth in digital is benefiting Google and Facebook.
• It’s not just newspapers any more: The Pew research shows that local television is also being decimated by the disruption in both viewership and advertising revenue — to the point where viewers have started to notice the difference. Whether because of cutbacks or a desire to appeal to more viewers, Pew says that local TV news is also focusing more on sports and entertainment, and less time on crime and political coverage.

The Good News:

• Demand for news is growing, not shrinking: Although it may be coming at the expense of some traditional players, there is clearly a large and growing appetite for news, since the top news sites saw traffic increase by 7 percent in 2012, according to Pew. And the impact of social media seems to be clearly positive, in the sense that those who have heard about news from friends and family through such channels show a stronger interest in finding out more.
• Some outlets are having success with subscriptions: In the wake of the success of the New York Times paywall, many newspapers have erected their own subscription walls, and this is generating some reader-provided revenue that has helped to stanch the bleeding for some publishers (although even for the NYT and the Financial Times, this has not filled the gap entirely).
• The sources are going direct: This is probably one of the most contentious aspects of the disruption in media — namely, the fact that social tools such as blogs, Facebook, Twitter and other platforms produce a “democratization of distribution” that allows everyone from celebrities to politicians, and even brands and companies themselves, to reach an audience directly. Is that good or bad for journalism? The debate on that question continues to rage.
• New forms of advertising are emerging: This is another contentious topic in media — that is, the rise of what some choose to call “native advertising,” or sponsored content, and in some cases “brand journalism.” To detractors such as political blogger Andrew Sullivan it is ethically dubious, and to many traditional journalists such as former NYT executive editor Bill Keller it is a “slippery slope,” but new media entities like BuzzFeed and even The Atlantic are using it to some success.

Is the glass half full or half empty?

As with any overview of the media business, there will be those who see this picture as a glass half-empty, and those who see it as a glass half-full — and perhaps a growing number who have completely lost interest in the glass because they are already getting their water elsewhere. As Emily Bell of Columbia and her fellow authors Clay Shirky and Chris Anderson pointed out in their recent report on “Post-Industrial Journalism” and author Clay Christensen noted in a recent interview at Harvard, upheaval is the order of the day in the media business and will likely be so for some time.

Shirky said in an essay in 2011 that we as a society actually need the media business to be chaotic, as unpleasant as that may be, because we literally don’t have any idea what the future of the industry will look like. Even now there are new entities being born, and new models being applied — like the Forbes “BrandVoice” model, or Sullivan’s direct-to-readers model — that could either be the savior of the industry or a dangerous distraction. If you like bumpy rides with an uncertain ending, the media industry is definitely the place for you.

Post and thumbnail image courtesy of Shutterstock / Scorpp

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Path’s search function hinges around what looks like a normal search bar at the top of the screen, but when you tap it to enter a phrase, Path auto-suggests several ways to search: By person (you can hunt for all your memories that took place with a particular person), by place (you can look back and see moments from your favorite restaurant over time), by time (check out the music you’ve listened to at night, for instance), or by timeframe (everything that happened in April or last year.) You can also search for moments posted nearby, so if you’re looking for a coffee shop or sushi restaurant nearby, you can see where your friends have been in the area.

The search function on Path is definitely more personalized than what you’d find on Google, or even on Foursquare, under the assumption that the people you connect with on Path are your true, close friends (it’s limited to no more than 150 connections). So your results could be narrower but more targeted as a result. For the most part, Path’s search function feels closer to Timehop than Yelp, letting you discover moments from your past, rather than focusing on businesses that are necessarily nearby.

The biggest question in my mind when looking at the search function is whether users will immediately understand how to use some of its coolest features. Most of us are used to using the Gmail search bar to find keywords that we know appeared in the particular email we want, but Path’s search goes a little further than that.

A search for “weekend brunch” will turn up results for check-ins on weekends (the search engine knows that you mean posts on Saturday or Sunday), and at restaurants that serve brunch (by using Foursquare’s API to see which restaurants serve brunch food, even if the original post didn’t include the word “brunch.”) You can also search for “royal flush” to see moments that gathered all possible reactions from your Path friends (heart, smiley face, frown, etc.) It’s very cool, but not something users might immediately grasp. Although the suggested search terms can help with that.

And the success of the search bar is also very dependent on a user being a somewhat regular user of Path — it’s most interesting looking back at a wide variety of data from a long time period. The company is at about 5 million registered users, said Nate Johnson, the company’s VP of marketing, up from 3 million in April, but if you’ve only been posting on the network for a week, it probably wouldn’t seem as cool, although it would certainly work.

But I had a lot of fun searching through my Path moments from a year ago, and it’s an interesting step forward for the company in making social media check-ins and shares less chronological and more thematic to search through.

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Its recently-formed Axel Springer Digital Classifieds joint venture is acquiring allesklar.com, the operator of 16-year-old meinestadt.de, a network of 337 local news and information sitelets underpinned by several categories of classified ads.

The company claims eight million monthly uniques and is being sold by its founding Stegger family (56.1 percent) and rival publisher Holtzbrink’s Digital Strategy unit (43.9 percent).

Although it publishes several regional, as well as national, newspapers, most of Springer’s online efforts have been at the nationwide level. Now it will gain a large local network through which to pipe meinestadt.de’s existing ads as well as those from Springer’s other sites.

Springer publishes one of the world’s most-read newspapers, Bild, but has also been piling heavily in to online-native classifieds, buying a host of such sites, including French property ads site SeLoger for a whopping €633 million and TotalJobs for £110 million. The publisher also operates autohaus24.de (auto classifieds), immonet.de (real estate) and buecher.de (e-tail).

Springer formed Axel Springer Digital Classifieds together with the investor General Atlantic in March when they acquired TotalJobs. The publisher owns 70 percent and the investor 30 percent of the unit.

Announcement.

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In announcing the deal, Google said it’s possible that Frommer’s will be combined with Zagat, the local review service that Google bought a year ago for $151 million. I expect the two services will do just that because that’s where the world is going: Ultimately, one person’s travel planning is another person’s local discovery. Google understands that and it wants to be the first place people turn to whether they’re looking to go around the block or around the world. We should expect to see more Frommer travel information show up in searches on Google and Google Maps, as Zagat content does now, but I wouldn’t be surprised if there is a combined planning service that pulls the best of Zagat and Frommer’s at some point.

To be sure, local and travel converge more in big cities; there is less overlap in places that are off the path of tourists. But even in rural or lightly populated areas, there’s still a need for local information and that information could still fill a need for the occasional visitor.

Google is not alone in coming to this realization though it’s arguably the best positioned to straddle both the local and travel verticals. Social travel service GTrot reorganized around local discovery earlier this year because that’s how its users were using the site. Foursquare, which maintains a trove of local data, has gone the other way with its Explore tools for the web. Explore allow users to research places they haven’t been to before by using check-in data and other information from friends. Gowalla, before it sold to Facebook, also made a turn toward being a local guide that would appeal to both tourists and locals.

These examples suggest that we’re going to see more hybrid apps that combine travel and local information. The best travel services are increasingly focused on treating you like a local. And local services are becoming great resources for people looking to spend time in an unfamiliar city. I expect to see services like Foursquare, Yelp and others to build out their trip planning tools or combine their services with other travel services. And it’s likely that we’ll see more consolidation as companies from one vertical or the other tries to fill out the holes in their coverage. There is too much overlap between the two verticals not to.

The purchase of Frommer’s may also point up the limitations of crowd-sourced information. To get comprehensive local data, Google may be acknowledging that it needs more professional curation to provide up to date information. But it’s also possible that Google may move Frommer’s to more of a TripAdvisor crowd-sourced model, which is in keeping with Google’s approach to user generated content.

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LevelUp said it will not charge its 3,000 merchants interchange fees to process credit card payments and will swallow the cost. The company said instead of passing on interchange fees to move money over existing payment networks, it will look to make its money from merchants by helping them bring in new and existing customers. In essence, LevelUp feels like it can make more money by providing offers, loyalty and analytics than by facilitating pure payments.

It’s a big move that could shake up the emerging mobile payments market. Competitors such as PayPal, Square, Google and Isis are adding more value-added services themselves but they’re still looking to profit from the payment transaction itself. But Seth Priebatsch, LevelUp’s chief ninja, said transactions are a commodity that won’t hold up over time.

“The fact that we can move money, that’s not interesting. The fact that we can drive new customers and track them when they come back, that’s real value,” said  Priebatsch. “The amount of money we’re making on our campaigns is trending up and we stepped back and said if it’s stable right now we should just skip the middle part of this game and stop charging.”

For the last couple months, LevelUp has charged its merchants 35 cents on every dollar of credit provided to consumers during a campaign. So for instance, in a campaign to bring in 500 new customers, a merchant may offer $2 free credit for a first-time visitor. LevelUp will earn 70 cents for that transaction. Priebatsch said merchants typically bring in $18 for every dollar spent on a campaign. And of new customers who come in through LevelUp, 64 percent come back within 30 days and 40 percent of all new customers complete a loyalty progression with 30 days.

That’s how LevelUp believes it can be valuable enough to charge for these services. By letting merchants push offers to specific sets of customers and providing analytics that track how well the offer does and how often the user comes back, LevelUp is making enough money to support this new Interchange Zero approach. LevelUp, again, is paying the interchange fee but it’s acting like Google, which offers free search because it can make it up on advertising. For merchants, the removal of interchange fees means an average of $500 in savings a month, said Priebatsch.

But how can LevelUp afford to pay the existing interchange fee? Priebatsch said it is able to move money through interchange networks more efficiently using special algorithms and it has less fraud than competitors because of its barcode scanning and token payment system. The company is building out special relationships with banks to further decrease the cost of fees. Over time, Priebatsch said the cost of moving money over the interchange fees has also gone down, but the fees haven’t.

It will be interesting to see how competitors react. It’s still early in the race but merchants are hearing all kinds of pitches on payments, offers and loyalty programs. A service that does away with processing fees and only charges based on real business performance could stand out in the market. Merchants may feel more confident about trying LevelUp because they will only be paying to drive in customers and sales.

This fits into the larger discussion about mobile payment business, which many are realizing is much about about the services around payments than the action itself. Providing an alternative to credit cards or cash has limited appeal to consumers and merchants because the current methods of paying aren’t terribly broken. It’s really in the extra features where payment systems are able to sell themselves.

This will have an impact on not just payment providers, but also new offers and loyalty-focused startups. The reality is that these businesses are all coming together and competitors will need to be able to offer all these elements plus analytics, customer relationship management and other business services as well. LevelUp is showing that in this local scrum, the real value proposition may be in leading first with offers and loyalty and just throwing in payments for free.

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Local content is integrated into search, maps and mobile and is a new tab in Google+. On its blog, Google explains, “Each place you see in Google+ Local will now be scored using Zagat’s 30-point scale, which tells you all about the various aspects of a place so you can make the best decisions.”

Zagat.com is now free, too

On Zagat’s Google+ page, founders Tim and Nina Zagat write, “We’re excited to announce today that our content is now free on Zagat.com and a cornerstone of the new Google+ Local experience.” They go on to say,

As we’ve always done, we will continue to develop high quality content based on consumer surveys, and make that content available in print, online and on mobile. We hope you will participate by sharing your opinions with the growing community on Google+ — helping more people find great places around the world.

Zagat, which operates in 13 categories and over 100 cities, had charged $24.95 per year or $4.95 per month for access to all of its content. Now the paywall is down and all of that content is free online. Visitors to Zagat.com are prompted to sign in with a Google+ account.

As of this morning, Zagat’s iPad app still costs $9.99 for a “one-year subscription.” I’ve asked the company if that will change.

Will Google+ Local reviews be more useful than Yelp reviews?

With the incorporation of Zagat reviews into its search listings, Google is attempting to create a full-fledged Yelp competitor. (Google attempted to buy Yelp for $500 million in 2009.)

Google+ users can write their own reviews and upload pictures to Local, and can see their friends’ reviews (if their friends are on Google+, that is). As friends as reviews, opinions and pictures, that input is integrated into the overall score other people see. The feature is also integrated into Google and Google Maps so that as users search for locations with those tools, their results might surface reviews from friends.

The new feature and integration could give a boost to the flagging Google+, which, until now, hasn’t offered users much utility that they can’t already get from other social networks. By turning it into something like a Yelp for friends, with reviews, photos and opinions submitted by people you know, who possibly share your interests and taste, Google+ could potentially offer users new value.

Greg Sterling at Search Engine Land writes, “Marissa Mayer argued to me that Zagat scores can express much more differentiation and nuance because they contain separate scores for food, service and atmosphere vs. a five star scale, which is forced to factor all those considerations into a single rating (read: Yelp).”

He notes that users who want to leave a review “are now asked to fill out a more structured form (food, service, atmosphere/decor) and leave additional comments. Some of those online reviews may also make it back into Zagat proper, at the discretion of Zagat editors.”

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In an announcement on Friday morning, the Hamburg-based business said it would be offering a free daily deal to all premium business subscribers — and used the offer to underscore its position as Europe’s leading consumer reviews site.

It has, it said, 400,000 active businesses and 860,000 places reviewed across 11 countries, and a healthy 25 million unique users each month. Even more importantly, perhaps, it said growth in advertising on Qype Mobile — which now has around 4 million users — has increased by 500 percent in the past year.

In a statement CEO Ian Brotherston was bullish about the company’s prospects.

“We are experiencing significant, yet responsible growth, thanks in a large part to our investment in mobile. We are successfully helping businesses increase their presence online and on mobile, and building a healthy business with a proven model,” he said. Our revenue growth last year was 93 per cent and we have a clear path to profitability in 2012.”

While this little tidbit of news may have a feelgood factor for the company and its customers, I think it’s clear who the real target of this publicity campaign is: Yelp.

The American listings site has been targeting Europe for several years — without massive success. But since it went public in March, in a deal that valued the company at more than a billion dollars, it has got a new weapon: a war chest of nearly $100 million.

So what does this mean for Qype? Well, it’s two years since the company took any funding — and that was a €6.5 million series B from Vodafone Ventures, Advent, Partech and Wellington. Given Brotherston’s statement, we can assume it’s close to profitability — but not quite there yet.

So it looks like the company is showing itself for a reason. Is it the company dressing itself up for another round of investment, to take on Yelp? Or is this a way of touting itself around for a sale?

If so, it seems an awfully passive aggressive way of flirting with Yelp.

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The money comes on top of a seven-digit Series A investment from Lightbank, the VC firm founded by Groupon co-founders Eric Lefkofsky and Brad Keywell. Andreessen Horowitz partner Jeff Jordan, former chairman and CEO of OpenTable and former president of PayPal, will join Belly’s Board. The new investment will help the company continue its growth, as it expands its current footprint to include New York and Boston. The company started in its home market of Chicago before expanding to Austin, Milwaukee, Madison, Washington D.C. and Phoenix. Since launching in August, Belly has amassed more than 200,000 registered users and has built up a network of 1,400 businesses who are using the system.

Belly gives local businesses a customized digital loyalty and rewards program that works with both smartphones and older cards with QR codes. Merchants set up an iPad from Belly at their check-out counter and then scan QR codes from a user’s Belly iPhone or Android app or from their physical card. The businesses award points for a person’s visits and then gives them unique rewards when they hit certain milestones. It could be anything from a free item to something as off the wall as punching the store owner in the gut.

Merchants pay anywhere from $50-$100 a month for the system including the iPad and stand. Business owners also get important data on their users, who can be tracked back and contacted through their email addresses.

Belly is not even a year old but there’s plenty to like about the system. I think the fact that it has both a mobile and analog way of letting people check into stores makes a lot of sense. About half of the U.S. population is still using feature phones so it’s good to have a system that accounts for them. The unique rewards and the iPad scanning station also make it appealing for businesses, who can create a deeper relationship with their consumers and hold on to more information about them.

But I’m also waiting to see how Belly can scale. The value of the card or the app is exponentially more valuable when there are plenty of businesses a user frequents in the system. With just 1,400 businesses in eight cities, that’s not the case yet.

Also, I think more social components would be helpful. I like how Social Passport provides users with a reward for checking-in via QR code or NFC tap and sharing their visit through their social networks. Right now, Belly business owners don’t have a way to get any viral boost from user check-ins. And there’s still the question OF whether a loyalty program needs to be tied to a payment platform. Services like LevelUp have built their own payment system and LocalBonus, a New York loyalty start-up, lets people sync their credit cards. Both are able to get more data on actual purchases and reward more specific activity than check-ins.

Ultimately, we’re seeing that there are lot of different ways to get at this market. Businesses can also choose free services like Foursquare and Yelp. My sense is that a lot of these services will evolve to be more social and include more payment tools inside. But the key is making sure that you can sign up a lot of businesses. One-off loyalty programs are not that fun for users and having an app that’s only good at a couple stores is not much better for consumers than having a wallet full of punch cards.

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Avito.ru, the country’s leading classified ads site, is taking a big $75 million venture round from Accel and Baring Vostock plus previous backers Kinnevik and Northzone.

The company wants to add more primary e-tail to its small ads business, something which could make Avito.ru a cross between Craigslist and eBay.

GP Bullhound, which advised on the deal, says: “The interested investors represented financial parties looking to gain a foothold in the fast growing Russian Internet market, the fifth largest internet market globally.”

The circumstances for success look promising:

• Russia is now Europe’s largest internet population.
• Online ad spending overtook that of in print in 2011.

Most of Russia’s online ad growth has come from display ads and contextual sold by giants Yandex and Mail.ru, rather than classifieds.

Founded in 2007, Avito.ru claims 30 million uniques, a one-hour average dwell time and two billion page views per month, with six million new items added per month.

It claims to be responsible for transactions equalling three percent of Russian annual GDP.

Photo courtesy of Flickr user [yeowatzup].

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• News Corp.’s News International is ready to fight market-leading AutoTrader by launching its own website in the space.

• Mail Online publisher A&N Media last week sold the sector’s number-two player, Motors.co.uk, to Manheim Remarketing, which owns the U.S. Autotrader.com, which is unrelated to AutoTrader of the UK, for an undisclosed sum.

• AutoTrader UK owner Trader Media Group (TMG) is jointly owned by Guardian Media Group and Apax, which each this week said they were splitting their jointly-owned Emap media group in to three. GMG hopes to sell both TMG and Emap for a windfall in the future.

Trader Media Group is a case study in digital transition, having successfully moved its traditional printed Autotrader classifieds newspaper to be a search-centric digital listings business. 2010/11 profit hit £34.7 million on seven percent higher revenue.

News International wants a piece of that pie. It is recruiting for a product and content head with a “start-up mentality” to build a “premier car digital destination”.

To start this business and take share from AutoTrader, News International will need to build relationships with car dealerships as well as individual private buyers and sellers.

That won’t be easy. With 10.8 million monthly uniques at last disclosure in March 2011, AutoTrader claimed to be 16 times more popular than its nearest rival. It hosts over 6,000 dealer websites.

But News International may get to draw on its Times and Sun newspapers’ strong brands in car content; the former takes car reviews from Top Gear co-presenter Jeremy Clarkson.

Via MotorTrader.com.

Disclosure: Guardian News & Media Ltd. is an investor in our parent company, Giga Omni Media.

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