Pete's final stock picks

		Google Inc.	GOOG	497.00							3	588.82
		Apple Inc.	AAPL	184.02							25	198.64
		Cablevision Systems...	CVC	24.98							33	25.08
		Time Warner Cable Inc.	TWC	42.24							40	42.86
		The Washington Post...	WPO	462.03	3 414.90 Final total: 10, 518.42

Gladwell is closer to right than Anderson

Some thoughts on Gladwell's review of "Free: The Future of a Radical Price" and author Chris Anderson's response:

• Amazon can refuse to pay newspapers for content all they want, but at some point it will drive newspapers out of business and there won't be any content.
• Anderson's experience of shopping out his hiring of writers for GeekDad doesn't constitute a trend.
  
• Chris, Gladwell is threatened because he perceives this thinking as influential.
  
• Blogs love to laugh at newspapers and journalists as they freak out about the future of the industry, but take a look at a site such as Daily Kos: most of their frontpage content links to and criticizes newspaper journalism.
  

Google/Facebook music services on the way

Our class apparently has its finger on the pulse of new media—almost as if they heard our discussion on Tuesday, Google and Facebook announce music initiatives.

Information deficit and the death of the article

We've already been introduced to a number of classes, etc. on "writing for the web." The basic premise is that it's more difficult to read long-form writing, and as a result news stories written for the web should be written in short, easy to read bursts.

The paragraph above shouldn't be any longer than it is. In fact, this blog entry might be better served if written in bullet points:

• As the distribution of information moves increasingly to mobile devices, this is an even greater concern. Articles are not made for smartphones.

• This move is already becoming evident, as some articles contain three or four bullet points summing up the content at the beginning of the piece.

• As we move into the futute, is the "writer" a thing of the past?
  

The economics of choice

In the Economist article, "Among the Audience," the writer states: "What is new is that young people today, and most people in the future, will be happy to decide for themselves what is credible or worthwhile and what is not." The piece goes on to say that sometimes there will be help from human editors and new filtering and collaboration technologies. That seems to be where we're headed, especially with Twitter, etc., but the question still remains, to what end?

It seems that nearly every discussion of the future of media is packed with proclamations and predictions about what people will be doing in the future, but rarely do we hear in those discussions attempts at assessing why anyone will be doing new fad x, y or z.

Similarly, David Gauntlett, in his article, "Media Studies 2.0," states that the "emergent alternative" to the traditional approach will in part be characterized by the replacement of the "fetishised expert" with a "focus on everday meanings," or content produced by audience members interested in new qualitative research techniques.

There is an assumption here that the audience brings with it a sense of "everydayness" which is difficult to prove. The audience can bring with it many things—expertise, ignorance, varying degrees of truth—but just because they are not professional content producers does not imply that they are somehow more real than paid journalists. We need to ask ourselves why an audience wants to participate rather than adjust and encourage participation without understanding motives.

Advertising and social media: Right on time, and other links

• Per our reading on new advertising where people are the media, Nielsen has made a deal with Facebook to measure the effectiveness of advertising on the site.
• Microsoft appears to be planning to challenge Apple, Amazon.
• On a similar note, a business-oriented reading device.
  

Pete's stock picks

	Google Inc.	GOOG	497.00							3
	Apple Inc.	AAPL	184.02							25
	Cablevision Systems...	CVC	24.98							33
	Time Warner Cable Inc.	TWC	42.24							40
	The Washington Post...	WPO	462.03	3

Google, social media, newspapers and ads

In his chapter on advertisiting, Jeff Jarvis states: "the best way to burnish a brand is no longer to rub against media properties like Vogue or the Super Bowl. The best way today is to rub up against people: sally the blogger or Joe the Facebook friend. The medium is the message and the customer is the medium. Sally is the new Vogue."

There's obviously been a good deal of this style of marketing going on with the major social media outlets, such as Facebook and Twitter. Some media outlets, such as the New York Times, have experimented with implementing their own social media elements, but it's not clear to what degree of success. Then there's Digg, which is a sort of middle ground between Facebook and Times People. Not surprisingly, Google has begun to show signs of throwing its hat into the ring as well.

If social media is the key to advertising, then that leads to the question of where it is all heading. Will Facebook or Google end up with their own newsroom?

Google to share ad revenue from new reader with newpapers

This is interesting. Google has developed a new, "fast" reader meant to more closely approximate the experience of reading a print edition, and says it will give "a majority" of the ad revenue to the participating media outlets.

Are potential online subscribers already paying?

A new study says that 70 percent of loyal online readers subscribe to the print edition. If true, what does this mean for newspapers hoping to derive revenue from a paid content system?

Financial health of newspapers

Based on the Picard reading, what are some indicators of the financial health of newspapers?

• Reinvestment. Picard states that the "largest portions of reinvestment come in the form of capital expenditures," including investing in assets such as buildings. The New York Times completed their Manhattan skyscraper in 2007, but now finds itself in a position where it is borrowing on the building to keep the company afloat. So, while the new building may have been an important step in helping the company continue to grow, it is now enabling them to accumulate more debt, the risk of which has been debated in numerous places.
• Employee turnover. When considering the all-to-common layoffs and buyouts that have swept across the newspaper industry, it's worth considering whether these cost-cutting techniques are hindering rather than helping the overall health of newspapers. While Picard speaks of actual turnover, i.e. actual replacement of personnel rather than elimination, the points he makes about the impact of turnover, including less experienced employees reducing production and psychological disruption that are symptomatic of layoffs as well.
• Personnel Skills and Knowledge. While many newspapers are doing a good job in retraining employees to keep up with evolving technologies, the demands of print are disruptive. At the end of the day, as long as the print edition still needs to get out the door, social media and online deadlines will be considered secondary to those demands. in other words, in order to fully devote energy to new technology, the old needs to go.
  

Google develops micropayment system for newspapers

• Google appears to think micropayments are the way to go for newspapers (unless this is just a ploy by Google to stop newspapers from actually solving the problem.) I'm still more on the Murdoch boat, as I don't think micropayments will work as long as people can get a synopsis of an article from a free blog (this is an intentionally poor synopsis on a free blog, owned by Google).

Google isn't bluffing

How are Google and Microsoft behaving?

• Product differentiation. Hoskins, et al, describe product differentiation, i.e. Google Chrome, as being worthwhile as long as the value added is greater than the cost of the differentiation. In Robert Cringley's view the value for Google in Chrome is in keeping Microsoft worrying about the threat of a new browser rather than deciding if they're going to take an illegal step to destroy the competition, though he doesn't explain how Chrome, which everyone admits is pretty mediocre, is keeping Microsoft awake at night.
• Google is part of an oligopoly, Microsoft has a monopoly. Their strategies are different. There is no competition for Windows, while Google does have to deal with other search engines, no matter how much of the market share they own. Cringely argues they are behaving as if they are competition, even though they are dependent on one another, and that there is some kind of standoff going on. Google isn't encouraging their employees to come up with new ideas just to keep them around or keep Microsoft distracted. They want to make money, and if they can find a way other than adds (I don't think they'd be fighting in court over their Google Books feature if they didn't really care about it), they will.
  

Journalism is still the foundation of new media

There are a few standard arguments that get bandied about in discussions of strategy for online profitability. Newspapers no longer control the format when "a kid with a cell phone can distribute the day's most compelling video," Carl Stepp says. Nevermind that newspapers never controlled the format or content when it came to video (that was for televsion news); Stepp is mistaken to argue that newspaper profitability is related to diversifying function by offering more than just news.

The lack of geography of the World Wide Web suggests that newspapers, especially those that operate on a local level, wouldn't be able to profit in the same way that "aggregators, social networkers, indexers, video hosts," etc., profit. The profitability of those sites hinges on the fact that a relatively small number of people are able to operate a service that draws comparatively astronomical numbers of visitors. Even in 2006, video hosting site was yielding tens of millions of unique visitors per month. That's just not feasible for a newspaper with a circulation of even a million people.

Another point Stepp neglects to make about all of the outlets that have "outflanked" newspapers is that they all rely on traditional media for content. Aggregators would have nothing to aggregate (I don't buy the argument that independent bloggers would fill this gap—at the end of the day, breaking a story by being in the right place at the right time, even if it is huge, does not translate into a blogger becoming a sustainable news outlet). Newspapers should spend less time worrying about how to make money from a secondary product and more money from their primary product.

Pete Blodget

While Blodget makes a strong argument in favor of a Wall Street Journal-style Web fee, his suggestion of trimming the newsroom budget by judging productivity on page hits is flawed. An example of this is Huffington Post, where scandalous celebrity stories routinely get the highest clicks.

While the New York Times obviously isn't going to start writing about celebrity gossip, there is a parallel phenomenon visible on their "most emailed" list, where the most emailed articles over the last 30 days are for the most part lifestyle pieces. Placing a higher value on writers that produce those types of stories will possibly impact the value of the paper by changing its focus. A similar argument can be made against the suggestion of shutting down bureaus.

As for the subject of charging for access to the site, David Carr of the New York Times makes the point that this may work for the Wall Street Journal because of its usefulness, but not so much for say, the New York Post, which is largely an indulgence. It's an interesting point, but it also makes me wonder if it is useful, in the sense that celebrity gossip bloggers often get information from the Post's Page Six.