Nieman Journalism Lab |
- The newsonomics of the magic formula for 2012
- From Nieman Reports: Politico’s experiments with quick-turn ebooks
- Knight funds collaborative reporting center in Georgia
Posted: 15 Dec 2011 08:00 AM PST  There’s an algorithm out there, we can be sure. It’s got all the components of business success for news-creating companies, each value carefully computed and relational to the others. Yet, approaching 2012, the algorithm hasn’t been found. We have but shreds of numbers, beacons of numerals that portend models, but can’t prove them out. 2011 has been a remarkable year. We can point to three major phenomena that profoundly changed the news landscape this year. Each offers up its own half-formed metrics for that magic formula in process, and each has dramatically changed the possibilities of news, each largely positive:
Publishers, publicly or not, are embracing the Digital First mantra of John Paton and Clark Gilbert, the industry’s dynamic duo, who put on another show at BIA/Kelsey this week. Everyone’s into the deconstruction/reconstruction of their companies; some are faster, more adroit, and more public about it. As that reconstruction moves forward, the new magic formula may seem simple: reconfigure costs and revenues. Yet, working the in-between — most publishers still depend on print for 80 percent of their revenues — is hardly formulaic. Building the new cost structure and the new revenue structure, in tandem, with changing audiences and advertising spending habits, is the fixing-the-moving-car-at-65 MPH scenario publishers face. With that speeding car in mind, let’s look at some of the numbers that will go into that magic formula, when it’s finally perfected. Mix, match, blend, and extrapolate: 5-15 percent: That’s the percentage of many news sites monthly unique visitors that drive half or more of their pageviews. That’s a jaw-dropping number, and one that news companies are just beginning to acknowledge — privately. Why be quiet about it? Look at the annual reports and quarterly financial disclosures of the public companies; they trumpet uniques and pageviews. Yet in the age of news ubiquity, we’ve reached near-infinity in pageviews and of ad inventory. Is there much meaning left to one random web visitor hitting one random web page, courtesy of Google or Facebook, some time in any given month? Not much. Yet, that’s what most people still point to publicly. Privately, the question is the 5-15 percent. These are your customers. How much will they pay for access? How much more valuable are they to targeting advertisers, given you know much more about their reading and shopping habits? The metric needed: How much does a core customer yield annually, and in a lifetime? Then: How do I most efficiently find and convert more of them? 35 percent: That’s the percentage of print readers who will transition to tablet-only by 2014, believes one prominent news company, which is using that forecast in its business planning. High? Low? What’s your number? $544 a year: That’s a Newspaper Association of America number (from 2009) for the revenue value per unit of Sunday circulation. What will a tablet customer be worth, combining subscriber and ad value? Get that answer right and you can try to accelerate, or slow down, your readers’ embrace of the tablet. 10-20 percent: That’s how much of national news company traffic now comes from mobile; Facebook already says that 35 percent of its use comes from mobile. Yet, in the U.S., only three percent of digital revenue comes from mobile. That’s a huge gap — the audience is way ahead of the money — and it will be closed over the next several years. In fact, in the age of expected anywhere access, “mobile” will disappear as a category. Big issues for publishers: dividing what kinds of revenues can be wrung from tablet (now lumped into “mobile”) and from the brain extensions in our pockets and pocketbooks, the smartphone. One billion: That’s one estimate of how many smartphones will be shipped worldwide in 2016. It’s a continuing curve upward from the almost half-billion shipped this year. U.S. smartphone penetration is about a third of cellphone owners; so there is lots of headroom for growth. (Singapore’s the first to cross the 50 percent threshold.) Big challenge for news and magazine companies: coming to terms with how to make money on that little screen: advertising, sponsorship, All-Access subs, and more. 63 million: That’s the number of smart TVs that will be shipped in 2011, up from 43.6 million in 2010. 2016 forecast: 153 million. Smart TV is just the next screen, joining the tablet and the smartphone, providing us ubiquity. When WSJ Live (“The newsonomics of WSJ Live“) — the company’s model-breaking tablet product launched this fall — it included launch partners Samsung and Vizio, leading smart TV makers. This is the beginning of the next wave. $2.75: That’s the average ad CPM, or cost-per-thousand rate gotten, at one top 15 news sites. Average rates have been going down and are likely to continue doing so. High-targeted and high-branded (combine the two, and you’ve got the best of both worlds) audiences continue to outpace average sites and average inventory. It’s less and less good to be average. 22 percent: That’s the third-quarter increase in U.S. digital ad revenue. Digital ad growth accelerates as print declines more rapidly; in the U.S., it is now surpassing newspapers to become second only to TV. Worldwide, expect the industry to hit $80 billion this year. Within that ad spend, publishers have access to less than half: Paid search continues to be about half the market, with publishers getting only a tiny slice of it. Display/banner ads — publishers’ strongest suit — account for 23 percent of the total. Video is growing 42 percent a year. Performance-based business models (as opposed to selling impressions) now command 64 percent of the market. (Most data from IAB.) So, in all the areas of growth, news and magazine publishers are weakest. Despite uneven digital ad results reported by newspaper and magazine companies, it’s not that the money isn’t there — they just haven’t transitioned their businesses enough to compete for it. $13 billion: That’s the amount of retail ad revenue the newspaper industry in the U.S. took in for all of 2010, and it’s down this year. Retail makes up roughly half of all newspaper companies’ ad revenue. In a new, circle-the-wagons attempt to hold on to it, ShopCo, a consortium of eight of the large newspaper companies, is building out a new local shopping portal. FindnSave, tested first by McClatchy, should be up in 250 larger markets by the middle of next year. Will it be good enough and big enough, to satisfy both consumers and merchants? (“The newsonomics of Google’s retail push“) 25 percent: So if a reader drops print and embraces the tablet, and digital access overall, how much savings can a news company achieve? It no longer has to print and deliver a paper, but it still has the costs of maintaining a staff, maintaining distribution, and maintaining a plant. So maybe it costs 25 percent less to fulfill that customer’s access? In this long interim with hybrid digital and print reading, how much of their production costs can companies cut out? The long-term question: At what point can the news industry make a major shift, as most reading becomes digital and a minority of it in print? 56.7 percent: That’s the percentage of downloaders of the Guardian’s new Facebook app who are under 24, with 16.7 percent 17 or younger. For a news industry decrying the lack of young readers and focused on aging baby boomers as the core audience, the Guardian’s early experience is phenomenal. It’s well and good to sell All-Access to long-time print readers; it’s essential to bring in new ones, and Facebook looks like a great bet. 7: Daily means seven days a week for newspapers, right? MediaNews is dropping Monday printing at some Northern California papers. Michigan remains the epicenter of the non-daily daily. Following the 2009 cuts in metro Detroit, Advance is now going digital-first with smaller papers there, with several becoming three- and four-day print “dailies.” The idea: keep 85 percent of print ad money and radically reduce print costs. Publishers take a very deep breath and hope they aren’t cutting the print cord too soon. Expect to see more of such day cuts in 2012 and beyond. It’s a hybrid strategy, and as we see its impacts — on print ad revenue and on digital reader and ad transition — we’ll have new numbers to plug into the model. > 1 percent: Google now makes 54 percent of its revenue outside the U.S., as does Apple. Such international orientation is a major differentiator in the economy of the day, and not in the publishing and digital industries. Even The New York Times, with impressive global reach, gets only a percent or two of its revenue internationally. In the last year, we’ve seen The Independent (through Press+) selling U.S. access, PBS launching a British channel, and the Guardian relaunching an American foray. Digital media knows no national bounds, but monetizing outside home countries has been difficult. Breaking through this barrier could create significant upside for top publishers.  |
Posted: 15 Dec 2011 07:00 AM PST  These fears — like many anxieties that people comfortable with familiar paths hold about disruptive technologies — may prove overwrought. With luck, one hopes, in retrospect they will even come to seem ridiculous. Editor’s Note: Our sister publication Nieman Reports is out with their Winter 2011 issue,”Writing the Book,” which focuses on the new relationships between journalism and the evolving book publishing industry. Over the next few days, we’ll highlight a few stories from the issue — but go read the whole thing. In this piece, Politico’ editor-in-chief John Harris writes about his news organization’s experiments with political ebooks. As a once and I hope future author, I'll confess that in certain moods a bleak scenario can cross my mind. Just my luck, and that of other journalists of my generation, that a good nearly six-century run in the publishing business might be about to perish — the victim of changes in technology and audience tastes — at the very moment we are ready to write.And yet there is no denying that the digital era has not on balance been a friend to long-form narrative. The historic shift has weakened daily newspapers, imperiled some fine magazines, and seems likely to be in the early stages of launching a similar upheaval in the book publishing industry. It is not just business models that are changing. The proliferation of information — abetted by the omnipresence of devices to carry that information to us at all times and in all settings — at times seems to be affecting the very nature of the human mind and its capacity for the sustained concentration that lengthy articles and books demand. One friend adapts with a self-imposed rule about paragraphs in the modern age: Never longer than can appear in a single BlackBerry screen. Months of enterprise reporting may never find an audience unless it can be cleverly reduced to 140 characters on Twitter in the hope of going viral. Now I am starting to sound like something I and my colleagues at Politico have vowed not to be — pessimists. As journalists, the group of us who joined five years ago to start a publication devoted to national politics and the workings of Washington made a very purposeful decision that we would not live our journalism careers in a defensive crouch, besieged by unwanted change, longing nostalgically for some rapidly receding golden age. To the contrary, Politico has found editorial and business success by embracing technological change and trying vigorously to dominate a niche: content aimed at people who share our intense, even obsessive, interest in politics. Optimism is partly a matter of willpower, but it is partly a rational response to a media marketplace that by our estimate has opened plentiful new opportunities even as it has narrowed others. Keep reading at Nieman Reports » |
Posted: 15 Dec 2011 06:00 AM PST  The Knight Foundation is launching a new program at Mercer University designed to prepare journalists, both aspiring and employed, how to perform their craft in an increasingly interdependent industry.The Center for Collaborative Journalism at Mercer will partner students from the school’s journalism and media studies program with journalists from The (Macon) Telegraph and Georgia Public Broadcasting. Knight is investing $4.6 million over several years into the initiative, which will put students and professionals in the same newsroom to cover news from Macon and the rest of central Georgia. The aim is a two-fold benefit: giving students experience in live reporting and providing both news outlets with additional bodies to support their newsgathering. You may remember Knight’s Eric Newton in these pages describing his aspirations for a model that combines student learning with civic benefit: What if universities turned their growing numbers of journalism and mass communication students loose on that unused local news capacity? If medical students can cure people as they learn to be doctors, why can’t more journalism students inform and engage communities as they learn to be professionals?The arrangement follows many other efforts that combine for-profit newsrooms and non-traditional journalism producers. As staffs are reduced through layoffs and budgets shrink some news organizations have partnered with nonprofits, some have arranged story-sharing agreements for an informal newswire. Mercer joins a growing number of colleges and universities that are collaborating with news organizations in an attempt to give students a balance between academia with the real world. Think teaching hospital: Mercer’s medical school is affiliated with two, so there’s already an on-campus example of blending pedagogy and practice. “The reason I think this is special is we have three strong partners who are civic minded and want to create the future of news and information,” said Beverly Blake, Knight’s program director in Macon. That Knight has a program director in Macon is evidence of another reason for the collaboration: Macon is one of 26 cities where Knight gives special emphasis on local philanthropy — one of eight where it has a local program director. The reason: They’re cities where Knight Newspapers once owned the local daily, in this case The Telegraph. A good portion of the money will be used to build out a physical space for the center on the Mercer campus. Blake told me the program will begin in earnest in fall 2012, when journalists from The Telegraph and Georgia Public Broadcasting move into a new shared newsroom. Mercer’s journalism and media studies department currently has around 50 students, Blake said, which they aim to increase to 100 soon. Disclosure: Knight Foundation is a funder of the Nieman Journalism Lab.  |