Time Warner CEO hints at online fees for magazines

It’s always leaves me speechless when these CEOs talk like they are completely unaware that they are in the advertising business.

Time Warner CEO Jeffrey Bewkes told an investor conference Friday that he doesn’t think it makes much sense for publishers to provide their content without a way to recover the production costs.

[From Time Warner CEO hints at online fees for magazines]

Sam Maloof, 1916-2009

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It would be a cliche to call Sam Maloof an inspiration… he was that for far too many woodworkers and artisans to count. I was saddened to learn that Maloof died last thursday at the age of 93.

Maloof called himself simply a woodworker but his influence on contemporary and arts and crafts furniture movements was enormous, far too big to calculate and far more than he himself would have ever acknowledged. Legendary for his humility as well as his formidable abilities, Maloof will be missed.

His signature rocking chairs could easily fetch over $100k at auction and the Smithsonian, which features a Maloof rocking chair in their permanent collection, called him “America’s most renowned contemporary furniture craftsman”. Maloof is perhaps the only person who could bring together former presidents Carter and Reagan… both men enjoyed Maloof rockers while in the White House. Equally at home in a Southern California ranch house and the Boston Museum of Fine Art, Maloof’s lifework achieved represented the pinnacle of craftsmanship for original designs executed with technical ability and innovation that few people possess.

I never had the chance to meet the man, although he certainly appeared approachable enough simply by visiting his workshop (which is included in the National Registry of Historic Places). From the many interviews he granted it did appear evident that in spite of the accolades and fame that he long ago began receiving, he still came across as a genuinely nice and generous human being.

Future generations will refer to Sam Maloof with the same reverence reserved for Thomas Chippendale, John Goddard, Charles and Henry Greene, Charles and Ray Eames, and many others who were the best of their era.

More on this topic (What's this?) Read more on Termbray Ind Intl at Wikinvest

On This Memorial Day

“The bravest are surely those who have the clearest vision of what is before them, glory and danger alike, and yet notwithstanding, go out to meet it.”

- Thucydides

I see far too many news stories on Memorial Day that feature images of picnics and parades with a story line that “honors all that serve”. This is greatly in error and devalues the solemn nature of Memorial Day, a day to remember those who fell on the battleground in service to their country.

General John A. Logan wrote in his order creating Memorial Day in 1868:

We are organized, comrades, as our regulations tell us, for the purpose, among other things, “of preserving and strengthening those kind and fraternal feelings which have bound together the soldiers, sailors, and marines who united to suppress the late rebellion.” What can aid more to assure this result than by cherishing tenderly the memory of our heroic dead, who made their breasts a barricade between our country and its foe? Their soldier lives were the reveille of freedom to a race in chains, and their death a tattoo of rebellious tyranny in arms. We should guard their graves with sacred vigilance. All that the consecrated wealth and taste of the Nation can add to their adornment and security is but a fitting tribute to the memory of her slain defenders. Let no wanton foot tread rudely on such hallowed grounds. Let pleasant paths invite the coming and going of reverent visitors and found mourners. Let no vandalism of avarice or neglect, no ravages of time, testify to the present or to the coming generations that we have forgotten, as a people, the cost of free and undivided republic.

News Magazines, The Problem is in the Name

News magazines (Time, US News, Newsweek) have simple outlived their usefulness as a tool for informing and educating. The problem is in the name, none of these magazines are successfully presenting news and informed analysis that isn’t found on the web and typically well before being published in any of the above mentioned titles. It’s like USA Today… more actually USA Yesterday, the speed of bits will always beat that of ink and the ability to aggregate, e.g. link to, many sources will go deeper than 2 columns ever can.

Having recently been dumped by Time, I naturally had great hopes for this week’s much-anticipated makeover of Newsweek. Both surviving newsmags (US News is said to exist still in some form, but no one I know has seen it lately) are in an Internet panic like that affecting newspapers. Newsweek has always been a bit faster on its feet. But judging from its first issue, the new Newsweek is not going to be the instrument of my revenge, alas.

[From Backward Runs 'Newsweek']

News magazines are literally dying away and nothing will save them, but they persist in looking at their business as a print magazine with an attached website, rather than the other way around.

Publishers must stop thinking like content creators and publishers, and more like information services. Providing original content is still necessary but aggregating everyone else’s content by topic is far more important, and then providing metadata (e.g. geotagging, categories/keywords, search enhancement, quality scoring, sentiment) on top of content that is provided programmatically to other services and application developers is one key future strategy.

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Governor abandons budget borrowing idea

Schwarzenegger gives us a lesson in what borrowing means, in case you were not clear, and says he’s not a big fan of it, despite years of promoting it as a solution to California’s budget fiasco.

Earlier today, the governor told reporters after a legislative prayer breakfast that he was not a big fan of borrowing.

“What it basically means is that you’re pushing it off to the future,” he said of state debt.

[From Governor abandons budget borrowing idea - Sacramento News - Local and Breaking Sacramento News | Sacramento Bee]

My Twitter Business Plan

Much talk about Twitter and business plans, considering I had an email exchange with a good friend on this very topic I thought I’d throw it out for public discussion.

Advertising:

I am skeptical of this because it puts a bullseye on them for user pushback. Plus, as social networks teach us, advertising on these mediums moves quickly to commodity pricing that is complicated to scale, even with Twitter volumes. Personally I think Twitter should say away from advertising… users don’t benefit from it and brands will find little value in it.

Premium Services:

This is where freemium comes into play… free Twitter for everyone, premium twitter for companies, additional services, and a subset of third party app developers. Another fairly obvious premium service is multi-user accounts, which is targeted squarely at companies using Twitter for brand activities.

Additional services that would be worth paying for include analytics, such as trending and tweet volume, reach analysis, link analysis, and profile based services.

The notion of real time services (high performance feeds) strikes me as an opportunity as well. Plenty of information services rely on inbound data that is high performance in nature and backed up by an SLA, while it’s probably a stretch for Twitter to do this today considering the well earned fail whale reputation, it’s a goal worth setting.

There are opportunities for applications built on top of Twitter, like market research, but I would stay away from this in order for the developer ecosystem to mature. I doubt that Twitter could juggle multiple strategies at the same time, most companies can’t, so it’s imperative to focus on building out the platform business rather than the application business.

Media Services:

I like the idea of offer a portfolio of rich services for media entities. Instead of CNN buying CNNbrk they pay Twitter an annual subscription to CNN branded services that they effectively resell through their CNN.com sites. Given the state of the broader advertising marketplace, it may seem like a stretch to build a business unit around this but media entities will pay and even today still have the ability to pay for services that drive audience.

Directory Services:

Twitter controls a namespace and one of the persistent problems for users and Twitter alike has been discovery of other users. It’s a problem for users because the best stuff to follow is often in the realm of not knowing what you don’t know; in other words it is a classic discovery problem. For Twitter this discovery problem reveals itself in the user retention problem that has been well documented.

If there is one place where advertising makes sense it would be in a directory of profiles organized by metadata (keywords) or categories that are defined by users themselves.

Legal Challenge to SarbOx

This is really interesting, a case is headed to the SCOTUS in which the plaintiffs will argue that the PCAOB, created by Congress through the Sarbanes-Oxley legislation, is unconstitutional. The law blogs say it’s a steep challenge for the plaintiffs, however the plaintiff’s counsel obviously feels differently and wrote an op-ed in the WSJ laying out their case.

That’s why we are now seeking review from the Supreme Court over a case we first brought during the administration of George W. Bush challenging the structure of an agency that has great economic impact yet operates almost entirely outside the President’s control. We, along with Republican lead counsel Michael Carvin and attorneys with the free-market Competitive Enterprise Institute, are asking the Court to give President Obama the power he is constitutionally entitled to exercise over this entity that affects so many shareholders and entrepreneurs: the Public Company Accounting Oversight Board.

[From The PCAOB: An Obstacle to President Obama's Success - WSJ.com]

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Read more on Obama's Presidential Policy at Wikinvest

Mr. Post Partisan & California’s Special Election

CA’s special election is tomorrow and having run the attached post twice already, I am running it again today. As I predicted then, we have yet to see any political advertising featuring the Governor and political leaders in Sacramento, which makes this story in the Chronicle almost amusing, almost except for the fact that the underlying consequences are very serious.

Schwarzenegger has definitely achieved post partisan status, he is disliked equally by everyone in the state regardless of political party affiliation, and it speaks volumes that a Republican governor’s biggest supporters are the Assembly and Senate leaders in Sacramento, who are Democrats.

The former movie actor’s poll numbers soared and his popularity peaked as he emerged victorious from the 2003 recall of Gov. Gray Davis, selling voters on the idea of “sweeping Sacramento clean” of big spending and high taxes.

His popularity crashed equally dramatically in 2005, with his disastrous call for a special election – and his failure to sell another wide range of Republican-backed budget-reform proposals.

He “re-emerged in 2006,” Whalen said, chastened and selling himself as “Mr. Post-Partisan.” His approval ratings jumped.

Now, on the eve of a critical election, Schwarzenegger’s ratings have tanked again and his ability to sell what he argues are some of the most critical budget measures ever facing California appears questionable.

[From Schwarzenegger's vaunted salesmanship tested]

As for the special election, nothing has been presented that changes my views on these measures. Far from softening the pain of economic conditions and reform, these measures put off the inevitable deep spending cuts that the state must make. With a current debt load of $100 billion, CA simply can’t go back to the debt markets and borrow more money for ordinary general fund use and with the state’s credit rating only better than Michigan, the cost of borrowing will be onerous to say the least. Borrowing one’s way out of debt is something that ordinary people understand doesn’t work, which is why 5 out of 6 measures on tomorrow’s ballot are failing badly in polling.

Labor unions have raised $28 million to support these measures, while opponents have spent just $4 million, which is quite a stark difference when you look at the poll numbers. Since the bulk of advertising in support of these measures, all fear based messaging… starts with the firefighters (complete with sooty faces) and then moves into “teachers will get pink slips” spots, started airing the polls have only seen opposition numbers for these measures go higher.

— Repost —-

Here’s how I’m voting on the measures slated for the special election on 5/19, a very important election that is a consequence of the budget that Sacramento passed recently in an attempt to close the gap on a record $42 billion deficit. I usually wait until the week of the election to post my voting guide because I think it’s important to hear all the debate on the issues but in this case the choice is so stark that I don’t see any reason to wait.

Several of the compromises that the legislature entered into require voter approval before they can be implemented. Public polling on these measures indicates they are vastly unpopular with the exception of Prop 1F and given that the governor and every other elected official is disliked by voters of both parties, it is certain that in the weeks ahead we will be deluged with TV advertising from special interest groups like the California Teachers Association instead of direct appeals from elected officials.

Prop 1A: No

Why: This is political cynicism at it’s worst, they give you something that all rational people want, in this case a spending limit that restricts politicians from spending more money than the state has, while slipping something really bad in the back door, in this case a stealth $16 billion tax increase by extending for 2 years the income tax, sales tax, and sundry fee increases that were passed in the most recent budget. It gets worse, because of the way the spending cap and revenue forecasts are calculated we are assured that CA will be stuck with a budget that is well above where we are today. No thanks.

Prop 1B: No

Why: This measure is the product of a negotiation between the governor and the powerful teacher’s union that allowed the governor to tap the education budget to cover the shortfall in the general budget. There has always been a disingenuous spin laid out by the teacher’s union on this issue because they claim that education was being cut by $9.3 billion in the emergency budget that passed recently but what they knew all along is that the Spendulus bill that got rammed through Congress included $11 billion earmarked for education in California… meaning that it was useful to cry poor over the budget all the while knowing that education was actually getting more money than the original budget allocated before the deficit grew to epic proportions.

1B is a pretty technical measure but the end result is that the so-called “rainy day fund” would be committed for the first $9.3 billion to the education bucket… meaning the rainy day fund wouldn’t actually be a rainy day fund until the $9.3b was paid out. It’s yet another bait-and-switch from Sacramento.

Prop 1C: No

Why: This one is pretty straightforward, the state wants to borrow $5 billion against future earnings from the lottery. Personally, I think the lottery should be shut down because it’s nothing but a regressive tax on people who can least afford it but hey if they want to spend $5, 10 or 20 bucks on a game of chance with odds far worse than anything Vegas has to offer, well who am I to say they should not. Back to the proposition, my primary opposition is that this is a one time fix equivalent to giving a heroin addict one last fix before they go into rehab. Also, because we have to pay interest on the debt secured by the lottery earnings, the result is that the state pays out lottery earnings as interest rather than what they were supposed to do, go to the people of California.

Prop 1D an 1E: No

Why: These measures redirect funds that were specifically allocated by voters in previous years elections and it is appropriate that voters should be asked if they want to suspend those measures and redirect the funds. However, even if these 2 measures pass they amount to about $1b, which doesn’t make a dent in the deficit and does not solve the underlying spending problem. I figure that in light of the bigger issues these two measures are inconsequential so fail the entire slate and force the legislature to get serious about fixing the structural budget issues.

Prop 1F: Yes

Why: This measure denies legislators and elected officials pay increases when the state is operating a budget deficit. This measure is largely symbolic because if you read the fine print you find that the state’s director of finance gets to determine when a deficit is largely a deficit which means they could ignore all the non-general fund budget components, which have driven the state into deficit for the last 9 years. But hey, sometimes symbolism is all that voters have so I’m voting yes.

The Fourth Estate

While copyright law is right in the crosshairs as Congress debates the demise of the newspaper business, the story is far more complex than that alone. What once seemed like a bad dream, that Congress would actually get involved, is actually turning into a bad dream… Congress is getting involved.

Of all the ideas being floated around, the one most troubling is the notion of using taxpayer resources, either in the form of direct aid or tax credits (hey everything has a price tag and someone has to pay the bill) to support newspapers who, apparently, are incapable of supporting themselves.

Use “tax policy” (that is, tax dollars – i.e., our money) to “promote the press.” Which press, gentlemen? The press you represent or the press we the people are creating? We out here don’t actually need such a subsidy because we’ve been smart enough to take advantage of the new, free press and we are not saddled with the costs of an old press. Why should we then have to subsidize the market failure and anti-strategic stubbornness of the owners of those old presses? “Congress,” they write, “could provide incentives for placing ads with content creators (not with Craigslist).” That’s just plain payola. They also want “allowances for immediate write-offs (rather than capitalization) for all expenses related to news production.” Except we in the new press don’t have capital expenses for presses and buildings and trucks. Can we write off our PJs?

[From First, stop the lawyers « BuzzMachine]

“The press” is often referred to as the Fourth Estate of government and quite honestly the only thing more troubling to me, and most people, than the notion of media acting as an agent of the government is the idea that the media could actually become part of the government, and that’s exactly what will happen when they get on the government dole.

We are witnessing a true Schumpeter moment, it’s a damn shame that our government is more interested in protecting the past than advancing the future.