If, like me, you dislike British Airways almost as much as you detest its gung-ho CEO, Willie ‘the Willy’ Walsh, then perhaps this will cheer up your Easter.
Thanks to Andrew for spotting it.
Category Archives: Media ecology
Sad but true: the iPad won’t save the magazine industry
Insightful piece by Rory Maher.
Some believe the iPad will enable magazines to reverse course in the near-term, but we believe these expectations are way off the mark. In particular:
* It’s going to be years for mobile ad revenue to become material.
* As a result, in the near-term magazines will need to look to subscription revenue to drive incremental profits.
* But, even if iPad sales wildly exceed expectations and users rush to purchase lots of magazine subscriptions (we don’t think they will), this will not be enough to drive meaningful revenue at most magazines.
He does some calculations, based on assumptions that :
* iPad owners are early-adopters that consume a lot of content so let’s say 50% of them subscribe to two iPad magazines each.
* Magazine subscriptions on the iPad are higher than print subscriptions (most magazines plan to charge more initially), so assume an average $15 per monthly subscription.
His conclusion:
Even if iPad sales soar past expectations and reach, say, 16 million units over the next two years total magazine subscription revenue would equal about $2.8 billion per year under the above case scenario. That’s less than 30% of annual circulation revenue for the entire magazine industry and only about 10% of overall industry revenue (circulation + advertising).
Sobering but true. As Derek Thompson points out in The Atlantic:
It’s useful to step back and consider the long game for publishers. Magazines get money from (1) readers and (2) advertisers looking for readers. The problem today isn’t the readers, who are all over the Internet. It’s the ads. Magazine advertising has slipped in the last two years by 12%. Nobody expects print ads to rebound to their early 2000s levels, and everybody is still waiting for That Big Idea that helps publishers monetize their online content. Maybe it comes from location-based ads. Maybe it comes from cross-publisher partnerships and a Netflix model that bundles magazine subscriptions and distributes them electronically to computers and e-readers. Nobody knows.
But this is the key to the story: magazines are losing ad revenue, but they’re not losing readers. In fact most of them are gaining readers — they’re just gaining them online, where our eyeballs are poorly monetized. All publishers really want is a platform where they can charge readers for reading. The iPad gives them that opportunity. It’s fair to say publishers are being overly-optimistic with their prices for iPad apps. It’s not fair to say they’re wrong for trying.
The basic problem, I suspect, is that the traditional print newspaper and magazine businesses were cash cows for so many generations that those who were conditioned in them simply cannot conceive of a future in which returns are much more modest. They grew up in a world where a TV franchise or a big newspaper or magazine brand was a licence to print money. There is a future for journalism and publishing, but it’s one in which companies work harder, smarter and in much more diverse ways. And for lower margins.
The Department of Government Waste
If you doubted that the Tories have a better grasp of Web 2.0 than Labour, then look no further. Here’s their April Fool spoof. Neat, eh?
Why philanthrophy won’t fund online news
Sad, but true. From Reflections of a Newsosaur.
Rick Edmonds, the estimable media economics expert at the Poynter Institute, calculated that American newspapers are spending $4.4 billion today on news-gathering, or about 29% less than the $6.2 billion that funded newsrooms as recently as 2006. That’s a drop of $1.8 billion.
If you wanted to sustain the current level of newspaper coverage by replacing for-profit funding with non-profit dollars, the typical approach would be to raise an endowment that would be invested conservatively to produce an annual return of 5%. The investment income would be distributed each year to provide the operating budgets for non-profit news organizations.
The endowment necessary to provide $4.4 billion in annual newsroom funding would be $88 billion. This happens to be 29% of the entire $307.7 billion contributed to charity in 2008, according to data published by the Giving USA Foundation, the non-profit arm of an organization of professional fund-raisers.
Given the downturn in the economy since 2008, it is a safe bet that charitable donations dropped in 2009 and probably will be less than $307 billion in this year, too.
Knitting: it’s a gas
Neat eh? How to make your client look cuddly. Wonder which agency did this.
Murdoch paywall goes up in June
[http://farm4.static.flickr.com/3217/2948562271_6f6c2a6696.jpg]
Hooray! The Digger has finally unveiled his cunning plan.
The Times and Sunday Times newspapers will start charging to access their websites in June, owner News International (NI) has announced.
Users will pay £1 for a day’s access and £2 for a week’s subscription.
The move opens a new front in the battle for readership and will be watched closely by the industry.
NI chief executive Rebekah Brooks said it was “a crucial step towards making the business of news an economically exciting proposition”.
This is the kind of large-scale controlled experiment that we’ve needed for ages to determine whether there is, in fact, a real market for online news — in the sense of a market in which readers will pay real money for access. Whether the Digger’s experiment succeeds or fails we will all have learned something useful.
But of course we still need print
Yep. And, besides, how will I light the fire in the morning without the FT? (I find that broadsheets are much better than tabloids — or even Berliners — for that important purpose.)
The future of education
Future of Education
View more presentations from Martin Weller.
Lovely Slideshare presentation by one of my smartest colleagues.
It was a response to this invitation.
Which also elicited this:
What now?
The Pew Research Center’s annual State of the News Media 2010 report is out. And it makes pretty gloomy reading, at least for print journalists.
Inside news companies, the most immediate concern is how much revenue lost in the recession the industry will regain as the economy improves.
Whatever the answers, the future of news ultimately rests on more long-term concerns: What are the prospects for alternative journalism organizations that are forming around the country? Will traditional media adapt and innovate amid continuing pressures to thin their ranks?
And with growing evidence that conventional advertising online will never sustain the industry, what progress is being made to find new revenue for financing the gathering and reporting of news?
The numbers for 2009 reveal just how urgent these questions are becoming. Newspapers, including online, saw ad revenue fall 26% during the year, which brings the total loss over the last three years to 43%.
Local television ad revenue fell 22% in 2009; triple the decline the year before. Radio also was off 22%. Magazine ad revenue dropped 17%, network TV 8% (and news alone probably more). Online ad revenue overall fell about 5%, and revenue to news sites most likely also fared much worse.
Only cable news among the commercial news sectors did not suffer declining revenue last year.
The estimates for what happens after the economy rebounds vary and even then are only guesses. The market research and investment banking firm Veronis Suhler Stevenson projects that by 2013, after the economic recovery, three elements of old media — newspapers, radio and magazines — will take in 41% less in ad revenues than they did in 2006.
For newspapers, which still provide the largest share of reportorial journalism in the United States, the metaphor that comes to mind is sand in an hourglass. The shrinking money left in print, which still provides 90% of the industry’s funds, is the amount of time left to invent new revenue models online. The industry must find a new model before that money runs out.
Chatroulette and common sense
The moral panic du jour is about Chatroulette, and it’s tiresome. When reading some of the commentary that’s mushroomed around it I suddenly had the urge to see what danah boyd had to say about it, partly because she’s thought more profoundly about social networking than anyone else, and partly because she’s a rock of common sense in these matters. And, sure enough, she has a thoughtful post on her blog. Excerpt:
What I like most about the site is the fact that there’s only so much you can hide. This isn’t a place where police officers can pretend to be teen girls. This isn’t a place where you feel forced to stick around; you can move on and no one will know the difference. If someone doesn’t strike your fancy, move on. And on. And on.
I love the way that it mixes things up. For most users of all ages – but especially teens – the Internet today is about socializing with people you already know. But I used to love the randomness of the Internet. I can’t tell you how formative it was for me to grow up talking to all sorts of random people online. So I feel pretty depressed every time I watch people flip out about the dangers of talking to strangers. Strangers helped me become who I was. Strangers taught me about a different world than what I knew in my small town. Strangers allowed me to see from a different perspective. Strangers introduced me to academia, gender theory, Ivy League colleges, the politics of war, etc. So I hate how we vilify all strangers as inherently bad. Did I meet some sketchballs on the Internet when I was a teen? DEFINITELY. They were weird; I moved on. And it used to be a lot harder to move on when everything was attached to an email that was paid for. So I actually think that the ChatRoulette version allows you to move on with greater ease, less guilt, and far more comfortably. Ironically – given the recent media coverage – it feels a lot safer than any site that I’ve seen that’s attached to a name or profile with connections to people or identifying information. Can youth get themselves into trouble here? Sure… like in most public places. And there are definitely youth who are playing with fire. But, once again, why go after the technology when the underlying issues should be the ones we address? Le sigh.
There’s also an interesting interview in the New York Times with the kid who created ChatRoulette. What caught my attention is this excerpt.
Why did you start Chatroulette?
I was looking for a site like this, one that would let me chat randomly on webcams, and I couldn’t find it, so I thought I would try to build it.How long did it take to build?
It took me three days. I built it on an old computer I had in my bedroom.Then what happened?
Well, at first I showed it to my friends and they criticized it; they asked why anyone would want to use it. So I went onto a few Web forums and asked people to try the site, and I got 20 people to try it.How many users do you have now?
Well, after the initial 20 users the site doubled and it continued to double every day since then. Last month I saw 30 million unique visitors come to the Web site and one million new people visit each day. It continues to multiply and I just couldn’t stop it from growing.What were you thinking while this was happening?
I woke up one morning and checked my computer and saw all of these news articles about Chatroulette. I yelled to Mom to come and look at my computer. At first she was very nervous, but she doesn’t really understand it very well and asked me why I’m not going to school.
This resonates because I’m working on a book at the moment which is largely about how mainstream culture still doesn’t understand the essence of the Net. I’m arguing that a useful way to think about it is as a global machine for generating surprises. The Web was one such surprise; Napster was another; malware yet another. Chatroulette is a surprise in the same tradition: a smart idea implemented by a smart kid, at virtually light speed, using an old PC and in his bedroom! And without having to ask anyone’s permission. It’s an example of the explosive creativity enabled by the architecture. No wonder the Daily Mail (and New Labour) has such a hard time comprehending it.