GigaOM » print-media

Britain’s press inquiry is a deathbed confession, not a solution

Bobbie Johnson — Sun, 02 Dec 2012 19:43:05 +0000

After months of hearings and endless testimony, Britain’s Leveson inquiry into the ethics and behavior of the press dumped its thoughts out into public for the first time this week. Originally sparked by the revelations of phone hacking at News Corp’s British print outlets, it ended up a broad and outsized affair with nearly 2,000 pages of text in just this first installment alone, stuffed with evidence, detail and recommendations on how to make the press better.

And yet, for all that text, there was very little heft. It detailed problems and offered a few solutions — but at no point did the inquiry really attempt to tackle the deep questions.

Sure, the report recommends replacing the UK’s current system of self-regulation for print media with a new, officially-sanctioned body that’s intended to guarantee freedom of the press while also holding outlets accountable for decisions. Beyond that, however, it feels like there was little to no understanding displayed of how the publishing world is changing — and how that is disrupting the news business it was supposed to investigate.

And this position isn’t just ignorance, either.

It seems to be deliberate.

Robert Andrews had a great blow-by-blow on how inquiry chair Lord Justice Leveson had specifically avoided many of the most important questions that news organizations are trying to address right now.

The world of online publishing, surely the future of almost all the organizations he was looking at, was dismissed with a careless wave. Questions that need answering were ignored: Where do the lines blur between news and not-news? What is the role of social networking? How is information being liberated from its traditional forms? What constitutes an act of journalism? These are topics that pre-occupy many forward thinkers in the media and yet none of these seem to have been dealt with because of the misguided opinion that “most blogs are rarely read as news or factual, but as opinion and must be considered as such”.

In fact, we all know information flows in ways that go way beyond the capability of traditional news-gathering organizations. Newspapers are weak, dying or dead — and those that are not are turning into something very different.

They have been broken by changes in supply and demand, turned upside down by the free availability of information, and knocked sideways by the internet’s ability to crush borders and barriers. And yet here, a huge public inquiry focused on wrongdoing ended up focused one tiny sliver of a much broader industry.

Leveson should have thought hard about the way that change has happened, because it is important to help the press be better in the future. Instead, he abdicated responsibility and focused on problems that already have solutions.

After all, there are many other ways to right the wrongs of phone hacking and invasions of privacy — and I’m not even talking about leaving it to the market to decide. The market’s role as a righter of wrongs is largely mythical: after all, if the market was able to reflect the moral outrage of phone hacking l, it took Rupert Murdoch just a few months between Rupert Murdoch’s decision to kill The News of the World and the launch of a Sunday edition of The Sun, which has already become Britain’s most popular weekend outlet. The market is not a perfect machine: it can be perverted.

No, I mean that there is plenty of legal recourse available. Breaking into people’s voicemail is criminal activity: it can be punished as such (and it is). Wrongly inferring that public figures are pedophiles is something the courts can deal with (and they are).

Instead we got a report that apparently made no effort to understand the deep corruption at the heart of many media organizations, or the pressures on them that encourage unethical behavior. We got a report that seems to believe that trying to control “the press” is the same as trying to control information. We got a depressing, obscurantist read focused on the worst excesses of a dying industry — not something that tried to understand the interplay between different forms of communication.

Agreeing to the new regulatory proposals is the equivalent of a deathbed confession over a crime committed long, long ago. It’s a way to expunge a feeling of guilt by someone who is on the edge of oblivions: it doesn’t make up for the original infraction and it doesn’t make tomorrow any better.

We all crave a better understanding of how those issues play out, because those are the guidelines that help regulate the future. But in the end, the world doesn’t need Leveson, because the world has already moved on.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

With $2M, Savveo wants to revamp traditional local ad buying

Ki Mae Heussner — Mon, 13 Aug 2012 14:06:00 +0000

When people talk about opportunities in local advertising, it’s usually digital advertising that they’re talking about. As more local ad dollars move from the Yellow pages and newspapers to mobile and web platforms, tech giants like Facebook and Google have started to up their efforts to lure small and medium-sized businesses to their platforms.

But Savveo, a Charlotte, N.C. startup, has raised $2 million to help it tackle a different opportunity in local advertising: providing an online marketplace for buying all kinds of traditional advertising, from out-of-home and print to radio and television.

“The virtual world has done a fantastic job to drive efficiencies,” said Shafi Mustafa, CEO of Savveo and founder of OverstockAds.com, a company that sells remnant advertising space for traditional media. “But in the real world… that ad market lacks efficiency and his highly fragmented.”

The $2 million Series A round included several U.S. and international investors including David Jones, the CEO of cloud company Peak 10, Tim Biltz, CEO of fiber-based service provider Lumos Networks, Australia-focused fund BayCrest Capital and others.

Given the momentum behind mobile and online local advertising, it seems like a curious time to invest in a platform for offline advertising. But Mustafa insisted that “the death of traditional media has been greatly exaggerated.”

BIA/Kelsey, a local media and advertising consultancy, expects mobile and online media to account for the largest increase in local ad spending, nearly doubling to $21.8 billion between 2011 and 2016.

But, the firm also projects that as local advertising expands about 14 percent to $151.3 billion by 2016, traditional media like television and radio will continue to remain relatively strong. In the next few years, traditional mediums like television, radio and out-of-home aren’t expected to experience the same dramatic growth as digital media, but they are still projected to increase incrementally. In 2015, BIA Kelsey estimates that three-quarters of local ad dollars will still go to traditional media.

The field is incredibly fragmented – it includes more than 34,000 local media outlets nationwide, by Savveo’s estimation. But the company’s bet is that, if it does the heavy lifting of consolidating those outlets, it can profit by providing local business and agencies a single platform for pricing, buying and tracking advertising across those mediums. While other sites might provide an online marketplace for ad space in a particular medium, Mustafa said they’re not familiar with sites that provide cross-medium buying opportunities. The company said its platform, which is set to launch in 2013, will include both mechanisms for buying and pricing, as well as research and planning tools.

(Image by Roman Sigaev via Shutterstock.)

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Digital won’t “evaporate” ad dollars

David Card — Mon, 27 Feb 2012 14:00:37 +0000

A new survey has revived the fear that digital ad spending will shrink the overall pie. While newspapers have it tough, other big ad markets are still pretty healthy, and technologies like targeting and social media advertising could still increase the value of — and thus spending on — both digital and traditional media.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Buckle up: Traditional TV is in for a heck of a ride

Habib Kairouz — Sat, 24 Sep 2011 16:00:26 +0000

The first wave of commercialization on the Internet had a tremendous impact on our lives and has disrupted most — if not all — industry value chains. The print industry was in the eye of the storm, with decline in readers and advertising budgets forcing many major magazines and newspapers to shut down, while the survivors continue to scramble to deal with the disruption. The primary reasons for the debacle of the print industry were:

High fixed cost structures left incumbents unable to match the niche segmentation requirement and accountability benefits of online advertising
Professional publishers denied consumers’ appetite for short form and user-generated content
High debt loads on the legacy businesses created an inability to cannibalize core revenues

Content was still in demand, of course, but consumers were increasingly turning to blogs and websites for access to on-demand, personalized information. Soon websites from iVillage, WebMD and CNET to the Huffington Post became household names, not to mention lucrative business models and attractive acquisition targets for the likes of AOL.

But print media is only one example of the inevitable generational shift that is unfolding in the way we consume content. It is more than a trend; it is a fundamental change in consumer behavior that will impact businesses across all industries. The next frontier is TV. But will the disruption in the TV world be similar or different than the downslide of print media?

A 2010 Forrester study showed that for the first time, Americans now spend as much time on the Internet as they do in front of the TV. Is it inevitable that like print media, consumers will turn to the Internet for their TV and video content and eventually drain the profits from TV’s ad-driven business model? According to Pew’s annual State of the Media report, local TV news is still the No. 1 news source for the majority of people, and it still leads in revenues. The Web came in second. While safe for now, the TV industry is on high alert, dragging its feet, but substantially better prepared to protect its turf than its print brethren were.

It is now widely accepted by the major industry stakeholders, content owners, MSOs, CE manufacturers and new startups that the following trends are unavoidable:

Consumers will demand linear and on demand, short-form and user generated videos, to be viewed anytime, anywhere and on multiple devices. I believe that companies that build models to meet that demand will win. Those that deny it will go on life support.
TV rooms in homes will have multiple screens running simultaneously, presenting a much better form factor to interface with the TV set than the traditional remote control. Most new TV-viewing devices will be Internet connected in 10 years.
A substantial percentage of programming will have on demand, time shifted and interactive capabilities. New formats of programming with embedded interactive applications will emerge, and social TV will take off.
Advertising will be targeted and personalized, at the individual and household levels, using legacy data from the settop box as well as ongoing rich data being generated every day, unless regulators step in to over restrict that. Smart marketers are already challenging the convention of TV time buying by demanding the same accountability that they are getting in their online buys.

This is going to be a much tougher fight than the last round of disruption, and here’s why:

The stakes are enormous. Both in capitalizing on new opportunities (e.g., building high margin, recurring service revenues for the CE manufacturers), as well as protecting legacy lucrative revenues (e.g., CATV subscriptions).
Content owners are positioned to benefit. The distribution fight emerging between the MSOs, IPTV service providers and over-the-top newcomers is poised to benefit content owners. While they might facilitate the newcomers’ emergence, make no mistake, they will ultimately require payment for viewing their content. The more competition emerges among the distributors of content, the better the programmers’ negotiating position will be. They also stand to potentially build direct relationships with consumers through the interactive programming features. This will strengthen their position even further, particularly as they start generating direct billing (e.g., the iTunes model). While quality content will continue to be king, its owners are nevertheless worried about piracy and the loss of viewing time to free content. Content owners with the most to lose, however, are those with low ratings and viewers today, heavily relying on the sacred “bundling” distribution structure of the CATV industry. On-demand viewing will severely challenge the bundling model.
MSOs are frienemies. The MSOs are everyone’s “friend wannabe” and simultaneously “enemy No. 1.” Today, they hold the key to the house through the coax cable. In addition, they have many weapons in storage, including the historical viewing habits data, the connectivity business that will continue to thrive as the over-the-top vendors grow, and most importantly, the substantial checks they send to the programmers every month. But whereby the old print industry went on the defensive of their legacy business in the 90s, and ultimately lost to consumer preferences, the MSOs are pursuing a dual strategy of protecting their turf while simultaneously aggressively pursuing new opportunities such as buying and owning traditional content (Comcast-NBC) as well as emerging interactive content (Comcast-Daily Candy), using set-top data for targetable advertising, and promoting TV everywhere with tiered pricing. In other words, they are hedging their bets across the board in the event their tight grip is loosened.
TV Manufacturers See Opportunity with Embedded Software. TV manufacturers have been fighting low margin business models for decades and finally see an opportunity to build recurring, more profitable business models by bundling Internet services onto the devices. But if the PC industry provides any guidance, one can conclude that this strategy will be very tough to pull off unless they actually decide to own and operate the content and service companies. Contrary to the MSOs, this will be a fundamental culture shock for the CE industry.
New Entrants Ignition for the Entire Disruption. These new entrants range from companies (i.) providing the physical bridge between the Internet and the TV set to (ii.) those providing navigation portals, (iii.) to those offering overlay services to enable interactivity, consumption and payment, and (iv.) to those who will own and provide the content. These include tech giants as well as startups that VCs like me are looking to back. The TV industry is historically known for having an extremely high barrier to entry, but tech giants including Google, Apple and Netflix have positioned themselves to pose real threats to industry incumbents. Netflix, once an unknown upstart, successfully displaced well-known players such as Blockbuster in an already crowded and established market. The company launched in a downturn economy, stayed dormant for some time and then transformed into one of the emerging on-demand media giants. It is a fixture in the mail, online and through mobile channels. Netflix now has as many subscribers in the U.S. as Comcast does.

The question is not if a market disruption is looming. It is. The question is who will lead the charge and end up on top? Will the MSOs be able to innovate and keep consumers tuning in on their terms? Will the digital media houses continue successfully on their transition into the market? Or will smaller players find a way to fill the gap and create the next generation dynasty?

My bet is on companies that will embrace rather than fight the trends, control at least one end of the value chain (content or consumer interface) and build sticky or proprietary assets such as viewing data and recommendation engines, billing or storage of personal content. Only time will tell, but one thing is for sure, we’ll all be tuning in (on multiple devices) to find out.

Habib Kairouz is a managing partner of Rho Capital Partners and Rho Ventures as well as a member of the Investment Committees of Rho Canada and Rho Fund Investors.

Image courtesy of Flickr user -Kj.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Building a better paywall: strategies for monetizing news content

Tue, 30 Aug 2011 07:01:01 +0000

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.