Tuesday, December 22, 2009

Google & Media: Biting the Hand that Feeds You

A few days back, before I left for China and before the holiday season descended upon us, we tackled a key question: "What's the Biggest Mistake Media Companies Make Online?"

I received several solid answers from followers of this blog, including Frymaster who immediately took sides in the ongoing war between Traditional Media and Google. Wrote Frymaster:  "I reject out-of-hand the assertion that Google is profiting from others' content. Rather, I say that Google profits from connecting users to content. It is a service that most web publishers appreciate greatly. Google, unlike any other search engine ever, goes to great pains to deliver the least-skewed results possible. Google is constantly on the hunt for people who game their system. That's why they succeed. There is a direct connection between Google's user-centric, community-oriented approach and their financial success."

Rupert Murdoch's protestations aside, there is no doubt that Google is driving vast amounts of traffic to websites run by traditional media companies. In recent years, most of BusinessWeek.com's growth came from search optimization and direct traffic. Up until only three years ago, the number one referring domain at BusinessWeek was always a portal until Google's popularity replaced Yahoo Finance and MSN Money as the top referrer. Search--largely Google--now accounts for some 45% of the traffic  at BW.com, up from less than 20% in 2006. That simple little box is driving vast amounts of advertising inventory (and therefore revenue) to the site and it's no coincidence. In common with every other media brand, we did lots of things to make our site search friendly. We rewrote headlines, simplified URLs, hired an on-staff SEO expert to lead seminars in search optimization. In other words, we courted Google and the search traffic we achieved. It's a similar story everywhere else.

Saturday, December 19, 2009

I'm liking this logo design done by my incredibly talented podcast producer Jaime Beauchamp. Jaime worked on our design group at BusinessWeek for many years, designing one of my favorite covers years ago. What do you think?

Sunday, December 6, 2009

Off to China

I'll  be taking a break from my blog this coming week for an exciting reason: I'm off to China to meet with Chinese entrepreneurs, government officials, artists and non-profit leaders. Most of my time will be spent in Beijing, the cultural soul of China, and Shanghai, the financial go-go capital of the country. This will be the first time I have ever ventured to China so I'm very much looking forward to a deep dive into the country's culture, economics and people. A full report to come.

Friday, December 4, 2009

My Final Podcast for BusinessWeek

I left our 46th floor multimedia studio for the last time this week after recording my 209th "Behind the Cover" podcast as BusinessWeek's executive editor. It feels like only yesterday when I walked into that studio for the first time in September of 2005 to begin these weekly podcasts in which I interview the author of the magazine's cover story. Since then, more than 12 million of these podcasts have been downloaded and it has consistently ranked among the top business podcasts in the world on iTunes. For years, I have been honored to receive countless letters, emails, and phone calls from listeners who told me how much they enjoyed these recordings. Dozens of fans also have approached me at conferences, seminars, and panel discussions at which I have participated, each of them going out of their way to say thank you. So let me (yes, that's me above in the studio) return the thanks to all of you for listening.

The Biggest Mistake Media Companies Make Online

Yesterday, Media Industry News asked me three questions, one of which I shared with my Tweeps: What is the biggest mistake media companies make online? Nearly two dozen people weighed in with their own answers--and almost all of those responses are very good. Yet, I have my own take on this question that differs from most of the answers I received.

For all the talk about the importance of digital media, most traditional brands boast cultures, people, and processes that protect their dying assets (ie. print) at the expense of what is growing (ie. digital). There are a lot of reasons for this, and some of them are good ones. Print still brings in the vast majority of revenue. It somehow feeds in a more satisfying way the ego of editors and writers. And because the most resources are always devoted to the print product, the digital side remains a stepchild to the so-called main act--even when that act is unprofitable and dying.

As John Gardner once observed, most of the things that prevent the renewal of an organization can be found in the mind. It's not a matter of new ideas. "There is usually no shortage of new ideas," wrote Gardner in Self-Renewal. "The problem is to get a hearing for them. And that means breaking through the crusty rigidity and stubborn complacency of the status quo." Yet the rules, customs, and procedures in organizations always favor the past. That's why culture trumps strategy all the time. The cultural cues are that print (the past) is more important than digital (the future).

Thursday, December 3, 2009

Thoughtful Questions: Do You Have Answers?

Next week I'm being honored by Media Industry News as one of its Top 21 Social Media Superstars. I'm flattered to receive this award, especially after having been inducted into MIN's Digital Hall of Fame a year ago. But want to make clear it was my BusinessWeek team that really made the difference in using social media to deeply engage our audience on blogs, Twitter, Facebook, Ning, and other social media tools. I'm disappointed that I won't be able to pick up this award in person at the Grand Hyatt in New York on Dec. 9th, but BW's online news editor, Dan Beucke, will stand in for me.

In any case, MIN just asked each of the 21 honorees to address one of three questions when they go up to accept the award. These are fabulous questions so I want to repeat them here and engage in a dialogue with you about them:

What is the one piece of technology you would bring to a desert island and why?

What is the biggest mistake media companies make online?

What is the biggest game-changing technology or service for media companies in the past several years and why?

The fast answers to these questions might well be the iPhone, the failure to make meaningful changes in culture which almost always trumps strategy, and mobile. But let's be more creative than that. What do you think?

Wednesday, December 2, 2009

Theme Song for a New Business

My friends and colleagues know well my deep passion for music. The office I packed up at BusinessWeek a few days ago featured large and dramatic black-and-white prints of Duke Ellington, Miles Davis, Dizzy Gillespie, Ella Fitzgerald, Billie Holiday, Louis Armstrong, and Frank Sinatra. So when I told them the name of my new company, C-Change Media, with the C referring to content, curation, and community, they universally suggested that I should have a theme song and it should be David Bowie's Changes. I couldn't agree more. So I found this terrific version of the tune on YouTube. Have a look and a listen and think C-Change Media when you do.

Media's Insurmountable Opportunities

So thank you Mitch Anthony for reminding us of Pogo's remarkably prescient comment: “We are confronted with insurmountable opportunities.” Only days ago, media columnist David Carr reminded us of the promise of these digital opportunities as he was writing nothing less than an obituary for Old Media in The New York Times. To quote:
Magazines intended to help the reader primp for Christmas parties are, in many cases, half as big as they were just a few short years ago. Pages are down, spending is down, revenues are down, and the biggest feature of this holiday season in the media kingdom has been layoffs and buyouts at Conde Nast, Time Inc., The Associated Press, and yes, The New York Times.

Sadly, Carr could have added BusinessWeek and Fortune to that list and God knows how many other magazines and newspapers who have had to dump payroll because of increasingly losses and bloated cost structures. The cutbacks are hardly new. Some 60,000 jobs in communications have been lost in New York alone since 2000, according to New York's comptroller. Having witnessed so much of this devastation up close at BusinessWeek this past week, I have to tell you it's heartbreaking. But there is another side to this molting of the media.

Tuesday, December 1, 2009

About My New Company

There are all kinds of questions I'm getting about my new company from friends and colleagues. So I thought it might be helpful to lay out my answers for everyone to see.

Why C-Change?

For the past five years, we’ve been witnessing nothing less than a sea change in the media business. The media monopolists are dying. More nimble, low-cost models on the web are quickly replacing them. Readers are increasingly abandoning print and moving to digital—on the little screen of your mobile device, the bigger screen on your laptop, and the biggest screen in your home. There’s nothing in the short-term future that will slow this trend down. If anything, analog media brands have only begun to feel the pain. What’s next will be truly devastating and those changes spell unprecedented opportunity for new media entrepreneurs.

Why are you starting your own company?

I passionately believe that the future of media is digital and that newcomers have tremendous advantages over incumbents. Most of traditional media remains in a complete meltdown, dragged down by high costs, old ways of thinking, and legacy work processes. As tough as the past three years have been for traditional media, the next three are going to be nothing less than brutal: more closures, greater losses, increasing layoffs of highly talented journalists and editors.

That’s also why we’re going to see a media boom in the next three years, the launch of tens of thousands of new media entrepreneurs on the Internet. Many of them will fail, but many more will flourish and replace the brands our fathers and grandfathers grew up with. The success of Huffington Post, Politico, Drudge, GigaOm, TechCrunch, and other media enterprises on the web have shown us a path forward. But it’s still very early days and the new followers are going to have lots of advantages over the first movers. I’m thrilled and excited to be part of this revolution.

What makes you so sure you or anyone else can succeed at this game?

I have three fundamental beliefs that inform my thinking: 1) Print advertising will never come back. There are just too many options for advertisers today and too much pressure on rates. Sadly, success in print will be measured in single-digit declines, forever. 2) Online advertising will never offset those declines nor save print. There’s far too much competition online and far too much available inventory; and 3) Users will not pay for content, unless they’re convinced it has immediate and tangible value. Very little journalism meets that standard today. Do we really need 57 versions of a story on Bernie Madoff pleading guilty?

If you agree with these absolutes, they can liberate your thinking about what’s going to happen next in media. Why? Because they tell you that nothing less than radical transformation is needed to survive and to thrive in the analog space. And there’s precious little revolutionary thinking among the traditionalists. That’s why newcomers have great advantage at this time of transition. The great management guru Peter Drucker said it best: "The problem in our lives is not the absence of knowing what to do, but the absence of doing it.” I’m going to do it.

Tuesday, November 24, 2009

My Departure from BusinessWeek

BusinessWeek's Tom Lowry reported the news that I will be leaving BusinessWeek, my professional home for some 22 years. Steve Cohn reported the story for Media Industry News. Here's the memo I sent to my colleagues:

Friends & Colleagues:

After spending 22 years of my professional life at BusinessWeek, I’ve decided to move on when Bloomberg becomes its new owner next week.

I’ve had a wondrous journey here, from the day in 1985 when Steve Shepard hired me as management editor to the day Steve Adler invited me back in 2005. I came of age as a journalist and editor under Steve I and will forever be grateful to him for the chance to write big impact cover stories and take far too many book leaves. I’m especially thankful to Steve II for giving me two very big opportunities: To return to my professional home to help run the magazine as executive editor, and to later take charge of our digital operations as editor-in-chief of BusinessWeek.com.

The latter was an especially transformative job for me. I’ve become a passionate advocate of digital journalism. So it will come as little surprise that I will be planning to launch a new digital media company based near San Francisco to explore the future. I’m flattered and thankful that Bloomberg provided me an opportunity to stay with BusinessWeek, but my passion to chase this entrepreneurial venture feels like the right move at this stage in my career.

For me, BusinessWeek has been far more than a mere employer. It’s been a close personal friend. That’s largely true because of the highly talented people I’ve been able to work with and learn from over these 22 years. I thank every editor who made me look and read better than I ever was. I thank every colleague who helped to shape my ideas and thoughts. I thank every friend who lent me support and encouragement through both the good and the hard times.

I offer a special thanks to Zulma Chamorro, my assistant, who always tried to keep me on time but rarely succeeded. I’ve greatly appreciated her commitment and diligence to both me and the entire online team. I also want to single out the two managing editors I’ve worked closely with at the magazine and online: Ciro Scotti and Martin Keohan. Their devotion, intelligence and integrity will stay with me forever.

I wish Bloomberg great success with BusinessWeek. Norm Pearlstine and the rest of the Bloomberg team will bring lots of new ideas and new resources to BW that makes me excited about the brand’s future. I’ll be its biggest cheerleader from afar.

It has been a privilege and an honor to work with all of you. Let’s keep in touch.


Friday, November 20, 2009

The Coming Media Boom

Amid all the havoc and pain in our business, I'm going to make a bold prediction: Over the next three years, we're going to witness one of the biggest booms in media ever. It will occur not in print, of course, but in the online world. And it will largely be fueled by forced media entrepreneurs, laid off writers and editors, lower barriers to entry, and the opportunity for tens of thousands of well-trained journalists to create something of value that they can run and own.

That old line about freedom of press belonging only to those who own a press is just that--old. For years now, pretty much anyone who has access to a computer and the Internet owns a press. But there was still a missing ingredient: vast numbers of journalists with the courage and the skill to use the Net to do their own thing. That's much less true today because of the layoffs of tens of thousands of highly qualified writers and editors who have been thrown out on the street by their dying employers. Many of them will not be able to find jobs in the field; they'll have to invent their jobs and that will result in this new media boom.

This generation of skilled unemployed has a few other things going for itself.

1) First-mover advantage is no advantage at all. We've now seen a number of successful web models, from Drudge and the Huffington Post, to the rise of an ecosystem of news generators in many cities and regions around the country. Followers have significant competitive advantages over first movers because they can learn from their mistakes and they can take advantage of better and cheaper technology. Today there are many more open source (low-cost and easy-to-use) options for would-be entrepreneurs to exploit. There were dozens of search engines before Google, but it took a follower to master the search market. There also were dozens of MP3 players before the iPod. Now is the time to follow the early pioneers.

2) Labor is cheap and the monopolists are dying. As the traditional winners of our business continue to die, there will be lots of opportunities for new low-cost models run by smart, highly motivated people--and there will be many vacuums to fill online. As bad as the past three years have been in our business, the next three will be positively brutal. Take a look at this chart that illustrates the staggering decline of magazine publishing income over the past decade but also gives you a glimpse of the opportunity today.

3) Despite the proliferation of blogs and websites, we're only at the very beginning of a media revolution. Many of these new ventures in the coming media boom will fail. After all, the odds are always against the entrepreneur. But many of them will succeed and change the game.

Wednesday, November 18, 2009

The Three Absolutes of the Media Biz

There are three fundamental beliefs today that have also been used as "white lies" by many media executives who have failed to reckon with the vast changes that have roiled our business in recent years. These absolutes will free you into thinking very differently about the business.

1) Print advertising will never come back. There are just too many options for advertisers today and too much pressure on advertising rates. In the so-called good old days, BusinessWeek, for example, lived in a cozy competitive world with The Wall Street Journal, Forbes, and Fortune. Now it must more actively compete with Yahoo Finance, MSN Money, AOL Money, CNBC, Reuters, Huffington Post, Slate, and thousands of other business sites. Never mind Google, behavioral targeting, everywhere and anywhere. Just as significant, most advertisers are lessening their dependencies on the intermediary--the media--to reach their target audience by going directly to them. One of the best places for entrepreneurs to get advice and help is American Express' OPEN site. It's as good if not better than anything published by traditional media in this space. Bottom line: Advertisers have learned to live with no print or far less print and they are not coming back.

2) Online advertising will never offset those declines nor save print. There’s far too much competition online and far too much available inventory. In the past year, the competition and the excess inventory have put tremendous pressure on advertising rates. CPMs (the cost to reach 1,000 people) have plummeted just about everywhere. And the costs of an online ad are just a mere fraction of what they continue to be in print. We use to say we've traded analog dollars for digital dimes. Now it's more like digital nickels and it may soon be digital pennies. It takes a lot of them to make up a single dollar. And there's a hitch to scale online: Scale brings down CPMs. The larger you get, the lower your CPM is going to be. It's no wonder why there are no incumbent brands who have been able to solve this puzzle.

3) Users will not pay for content, unless they’re convinced it has immediate and tangible value. Very little journalism meets that standard today. News journalism, unfortunately, has largely become a commodity. Do we really need 57 versions of a story on Bernie Madoff pleading guilty? Of course not. It's why much of the conversation about pay walls is moot. It may be true that media brands have no choice but to get more money from their subscribers, but it's going to be extremely tough to get people to pay for what they now get free. The genie is so far out of that bottle it will be impossible for her to get back in. I like what LinkedIn's Reid Hoffman said recently about Rupert Murdoch's plans to put up a paywall: "I am sure that during the transition from horses to automobiles there were some people bemoaning the loss of horse transport."

Why are these absolutes important? Because if you believe in these three absolutes and you're in the media business, they can be used to liberate you. If not, each of them become little white lies that allow you to lead by incremental change. People convince themselves that print advertising will come back once the recession ends; that scale online will help them make up their lost revenue on the print side of the house; and that so many of their competitors will die that someday they'll get a fair price for their content. Forget it. These fundamental truths of our business tell us that nothing less than radical transformation will make the difference.

Agree? Disagree? Let me know.

Educated and Skill-Less

This year may go down one of the toughest ever to be a journalist. Newspaper buyouts and layoffs have cost roughly 13,500 newspaper jobs this year, after claiming 16,000 positions in 2008. More than 100 newspapers, from the Rocky Mountain News in Denver to the Seattle Post-Intelligencer, have collapsed and disappeared this year. Some 525 magazines shut down last year.

The Old Media devastation has been unprecedented, even fueling a macabre genre of New Media, blogs such as “Newspaper Death Watch”, “Paper Cuts,” and “Magazine Death Pool,” the latter illustrated with a grim reaper who asks “Who Will Be Next?”
Sadly, the shutdowns and layoffs are only part of the story. Journalists everywhere are facing mandatory furloughs and salary cuts. Most newspapers, magazines and broadcast news organizations have frozen all hiring, too.

What have journalism schools done to adjust to the new realities of our business? Not much, I conclude in an essay that appears in the digital magazine Byline published by the New York Press Club.
Here's my take on what journalism educators need to do to train students for a very different time. My basic argument: J-schools need to develop a curriculum of courses to prepare not merely journalists but entrepreneurs who will launch their own media enterprises. What do you think?

Saturday, October 24, 2009

The Next Big Thing in Media

In the early 1960s, Tom Wolfe and other talented writers created the New Journalism. It cleverly deployed the techniques of great fiction to news and feature writing. Today's direct engagement with readers is the antithesis of Mr. Wolfe's self-centered narrative inventions. Call it the "New" New Journalism.

It fully embraces its readers, treats their opinions and beliefs with respect and dignity, and leverages the intelligence of the crowd to create a more valuable outcome for all. It recognizes that content is no longer king; Context is. In a world of commoditization, where too much news and opinion already chases too few eyeballs, this new loyalty-inducing journalism builds community and relationships.

Here's my essay on these thoughts published on the op-ed page of The Christian Science Monitor.

Tuesday, October 20, 2009

Suggest a Topic—And Content Flows to It

I learned about the death of the American newspaper early in my life. I was all of 16, a gawky office boy at The Morning Call in Paterson, New Jersey, when I was caught inside the obituary of an institution: The daily that I had carried on my back as a newspaper boy, the paper where my ambition to be a journalist was born, was being closed. I remember that day in December 1969 as if it were yesterday. Teary-eyed, I walked through the sea of wooden desks and metal filing cabinets and into the chilly night. It was an awakening to see the reporters openly crying and consoling each other.

Newspapers die hard—and the obituaries over the next few years are likely to make us think of massive casualties in a war. Strip out the classified business, and you’ll find that magazines face many of the same problems as newspapers: ever rising paper (and for us even worse postage) costs, the swift migration of advertising from print to Web, the inability of online revenues to offset the decline of print ads, and often declining readership. Yet as bad as the newspaper business has fared to date, some observers say magazines are even further behind the transition.

To read more of this essay in Nieman Reports, click here.

Monday, October 19, 2009

Why the Crumbling of Old Media Is An Incredible Opportunity

The most amusing blog post I’ve read this year came from Jeff Jarvis, the BuzzMachine blogger and CUNY J-school prof, who has a reputation as a rebel when it comes to digital journalism.

“Yes, print is a burden,” Jeff wrote recently. “It’s expensive to produce for it. It’s expensive to manufacture. It’s expensive to deliver. It limits your space. It limits your timing. It’s stale when it’s fresh. It is one-size-fits-all and can’t be adapted to the needs of each user. It comes with no ability to click for more. It has no search. It can’t be forwarded. It has no archive. It kills trees. It uses energy. It usually brings unions. And you really should recycle it. Wow, when you think about it, print sucks.”

I don’t have to completely agree with Jeff, but I can certainly appreciate his viewpoint. The media’s analog-to-digital transition has been a monumental struggle for newspapers and magazines. It’s created massive fear in our ranks and has caused a good number of highly talented colleagues to escape our profession. But it’s also been an incredible opportunity to rethink what we do and how we do it. I’m an old print guy, now on the Web side of the business. And I’ve been utterly transformed by the experience. I think of online as the most creative space in our field, where writers and viewers combine to create the new New Journalism.

You can read more of my essay at MediaWeek here.

Sunday, October 18, 2009

Why I Gave Up My Print Job

Shortly after moving to the world of digital journalism nearly three years ago, I was interviewed by Talking Business. Here's a link to that interview and my thoughts at the time.

Saturday, October 17, 2009

How My Love Affair With Journalism Began

I know the precise moment when the love affair began.

I was all of 15 years old, a gawky office boy at my city’s morning daily, sitting in a cramped, dusty room on a stack of brittle, yellowing newspapers. The place smelled of newspaper ink and mould. It was the back issue room, a place that I often surrendered to fulfill some odd order for a newspaper containing a wanted wedding announcement or obituary. But when I stepped into that space, it was as if I had entered a time capsule. I pulled off the wooden shelves the massive black-bound books and stepped into a different world. I scanned the 48-point headlines and consumed the accounts of Charles Lindbergh’s non-stop flight from New York to Paris in 1927, Adolf Hitler’s invasion of Poland in 1939, the attack on Pearl Harbor in 1941. And suddenly, I fell in love with journalism, just sitting in that room, reading the first draft of history by some unknown AP reporter.

It was long before my first byline in the campus weekly, or the first time I had to fetch a roast beef on a roll for a city editor, certainly long before my first dispatch as a foreign correspondent in London, or the first cover story I reported and wrote for a major magazine. Or the first time I walked into a bookstore to see one of my books on the shelf. Just sitting alone in that back issue room of The Morning Call in Paterson, N.J., my mind buried in old newsprint on my lap, I fell in love with journalism. It has been a passionate affair that has lasted some 50 years--from newspapers to magazines, from print to online.