Another survey about paid news content.

A combined research effort by Ipsos Mendelsohn and PHD has revealed that 55.5 per cent of survey respondents would be very or extremely unlikely to pay for online newspaper or magazine content.

http://www.editorandpublisher.com/eandp/departments/business/article_display.jsp?vnu_content_id=1004030681

But I don't think this is all that pessimistic for the News Corporation.
Because, when questioned further about specific publications such as The Wall Street Journal and Consumer Reports, both of which are exisiting pay sites, 81.5 per cent of online users said the sites were good, very good or excellent value.

Bob Shullman, president of Ipsos was quoted as saying "the message that came out is that you can charge, but you better have incredibly compelling and unique data."

When news become public goods?

Mon journal offert, my free newspaper program has officially begun in France.
http://www.nytimes.com/2009/10/28/business/media/28papers.html?_r=1

We mentioned about this briefly in class.
It has started two days ago. About 30,000 youth signed up voluntarily. Government is releasing Ad. campaigns also.

Can the news be supplied by the government like bridges or roads? What happens to consumer behavior then?

If you are 18~24 you can sign up for 1 year subscription of any newspapers.
French govement is spending 600 euro, which is about 900 million dollars.

I personally think this is a stinky business. Because many newspaper owners are Sarkozy's friends. The French president has been in charge of subsidizing newspapers when he was an Interior minister.

The Guardian reported that French people had little respect for news publications today, "in a climate where politicians rewrite their own interviews for publication and the president's powerful business friends, from construction to arms manufacturing, own several major papers or TV stations. "

http://www.guardian.co.uk/media/2009/jan/23/sarkozy-pledges-state-aid-to-newspapers

The fate of San Francisco Chronicle

Do you know how to say "Law of the jungle", or "Survival of the fittest" in Chinese?
"The weak, meat. The strong, eat."
It's funny because even in English, it rhymes.

Pete mentioned the New York Times creating a Bay-area version.
I think the San Francisco Chronicle, is becoming a meat.

"The 144 year old paper lost more than a quarter of its daily circulation in the first half of 2009, according to the Audit Bureau of Circulation, dropping a steep 25.8 per cent to under 252,000 readers."

It is really ugly, because every newspaper including the New York Times experienced circulation slide of more than 10% in the second quarter.

Zero-sum game for attention

So how many new choices did we really get?

Long tail has a long tail effect on media studies. I heard people using this theory to explain the future of newspaper in the media market. Anderson's version has realistic connotation because it provides practical examples and recommendations.

Rule 1: Make everything available.
Rule 3: Help me find it. (Let's forget rule 2)

Rule 3 is a logical outcome of Rule 1. You have too many choices, you need someone to sort it out.

But at the same time they are contradictory. Rule 1 seems democratic. Rule 3 seems kinda tricky. If you influence someone to make a choice, is it really a free choice?

Rule 1 is what makes the new media different from the old mass media. The old media deducted the number of shopping list. The new media adds to the shopping list. But as for Rule 3, it's the same old game. The old and new media all influence the audience to make decision. When you do information search or shop for DVD's, do you go through all the pages?

There may be infinite numbers of choice out there. But the numbers we actually pay attention to are finite. Selecting one thing means discarding the other. I think influencing that selection is the source of power of media, whether it's new or old.

Information surplus questions

Information surplus concept is intriguing. I think it is a parsimonious way to explain the new media environment. Opinionization of media we witness in cable TV or online newswebsite could be the result of product differentiation. This concept will arouse many questions.

1. Wither equilibrium?
-A surplus is a state of inequilibrium. Law of demand and supply suggests that the market will try to recover equilibrium. But supply will not decrease. As the chapter said, the curve may not stop shifting to the right. The demand will not increase either. On the contrary, it may move to the left, because of the young adults. How should we explain the perpetuation of inequilibrium?

2. Our goal?
-After reading diverse materials ranging from academic work to blogs, I am a little confused about our perspective. Is the Media Economics about maximizing the profit of media firms? Is it about explanation and prediction? Or, it about enhancing the civic quality? Personally, I agree with the argument that "we may want to shift our attention away from media-centric concerns and focus more on people centric concerns" (Chyi, 99).

3. Demand side explanation?
-I think one of the key concepts of the information surplus is that news and non-news information are substitute goods. Based on that assumption, incidental exposure Ting described in last class can be an explantion of 'surplus' from the demand side. Many news were in the past byproducts of other activities, for example when you had little choice of TV channels. With increased media choice, that forced demand is gone.

Measurement evolution

In a time of transformation such as ours, I think establishing a valid and reliable measurement is important. Terms of Internet that we learned from Dr. Chyi's ppt made me thinking.

Hits > Page Views > Minutes > Click > Leads > Visits... How fast it has changed! Let's compare them with pre-Internet measurement of TV audience rating like Neilsen. How about comparing with print circulation of ABC in pre-broadcast era? I think what has changed most is transparency. And, the power of media over audiences.

ABC is based on self report of media. Majors manipulated it actually. Neilson rating is survey. It is more objective but a little expensive to get the full data. Now everything is logged to the server automatically. Everyone has the access to it.

So, we have to admit the Internet is more democratic. But conclusively, shouldn't we have a measurement that can guage all the platforms? A yardstick that can be used to the Internet, broadcast or print? A measurement that can last at least a decade or so? Establishing concept for this measurement, testing it, predicting the effect will be a challenging task for a Journalism scholar. The task may be something that needs collaboration of old and new, tech-savvy and tech-avert scholars.

Next in Google's path is advertising.

Reading chap 11 and articles on google ad., craiglist and Web traffic measurement, I came to think the business model of media that was dependent on advertising may finally be coming to an end. And I welcome that avalanche, the Googlanche with all my heart.

If we hold Jeff Jervis's bold prediction as something credible, media companies should stop worring about withering ad revenues. Next in Google's path is advertising. And Epstein's hypothesis that advertisers won't be able to afford ad. and stay competitive might come true. This prediction is persuasive. After all, how can you compete with what is free? And isn't the anecdote of Craig Newmark's war with Nancy Melone suggestive? Dot.com model based on payed ad was powerless against free ad model.

I think ad revenue has been a source of evil in many ways. It was interesting to see a survey result of US in chap 11 that 9 out of ten editors had been lobbied by an advertiser to alter content and one third gave in . In South Korea, it came to a point that Samsung account for nearly 20% of the ad revenues of newspaper industry, and some papers rely 90% of total revenue on ad. Samsung manufactures ship, computer, cars and even apartments in Korea. What is scary is such a huge conglomerate of firms has a centralized decision making system on advertisement.

So would like to see media declaring independence again, like the real old days when they relied on subscrition. Of course, such independence may mean the real the end for many media companies.

Sung Woo, Stock choice

1. IAC/InterActiveCorp(IACI):
Profile
Trend & Statistic
News
New Product
Price

2. News Corporation(NWS)
Profile
Trend
News: ownership
News: Paid content

3. Direct TV(DTV)
Trend
Profile
Key Statistics


4. Apple(AAPL)
Trend
Profile

5. New York Times(NYT)
Trend
Profile

Barriers to Entry

Cringely is intuitive and foretelling. His article connects very well with this week's textbook chater.
My interest is not about whether Microsoft or Google wins. It is not about Chrome vs. Bing either. I am interested in how long Microsoft or Google can maintain its monopolistic state in respective market.

• Market structures of search engine or PC operating platform is monopoly, or may be oligopoly. Difference between monopolistic and competitive market is barriers to entry. Microsoft and Google sees each other as their sole competitor. So they set up barriers with Chrome and Bing. It is a balance of terror. According to Cringely, Chrome and Bing is like ICBM, and MS and Google is safe as long as they possess Mutually Assured Destruction (MAS) capability.
• Market entry barrier in digital age is lowered, however. Product diffusion is so fast that it does not take economy of scale to catch up with the frontrunner. It's not the size in the network that matters. New concepts like fitness, which Kang hui mentioned may be important. As the chapter illustrates, Cable TV has become a competitive market in less than a decade. MS has ousted IBM. The balance MS and Google enjoy is very vulnerable.
• Entry barrier in media market could be measured in quantitative terms, just as market concentration is measured by CR4. There are hyperlocal media markets with high barriers. In these markets, old style small newspaper media enjoy monopolistic profit on and off line. On the other hand national market like Cable TV can be more easily penetrated than it seems. Like Younghwan said, entry barrier could be an interesting predictor variable for various outcomes.
• As Cringely implies, MS and Google should be more worried about attack from within than each other. After all, it is post 9/11 era, not the era of the Big Red Button of nuclear attack. The competition is not just among the giants, it can be an asymetrical fight between the superpower and a small group.

Sung Woo - Blodget,Picard

I was glad to see the sinking Titanic in Blodget's blog. It gave me ideas about what I should say about his plan. All three recommendations of Blodget are very much correct, it seems to me. Problem is, are they the right recommendations for a sinking ship?
1)Cut the cost 40% by 2010(!) In the corporate history, how many firms have succeeded reducing that much cost in a year without resorting to radical measures such as filing for bankrupcy? The agony of media management leadership is not that they don't know what to do. It is about how to do it. It is like asking the Titanic, "Hey, captain! Fill up that hole underneath, and you will be safe."
2)I don't think raising print prices will save NYT either. It is true that many newspapers are doing this. Suddenly, we are applying the law of demand to the suppliers in the market. Price should go up as quantity decreases? I doubt Adam Smith will agree to that prescription. Moreover, increased revenue will soon be offset by decreased subscription. Again, it is like asking the Titanic to scoop the water out of the ship with buckets.
3)Charging online subscription fee is something I can consent to. A way to fix NYT may be to find a business model as digital media and transform itself. We know that is a way to save the Titanic, we just do not know how. WSJ' hybrid system may be part of the answer, but not all.

As for Picard, I think his arguments are based on wrong assumptions. First, I would not say that majority of journalists claim that their work has sacred values, at least, not any more. More importantly, he did not give any empirical evaluation about the present pay of journalist in the market. Is the value of journlist's labour overpriced right now? Is it sustained by non-market forces such as journalist's claim as guardian of democracy? Without answering basic questions, Picard argues that low pay will save media business. I found the essay very lengthy but not scientific.