Newsday’s Paywall… the Numbers are in

In October of last year I wrote that Newsday’s paywall would fail to attract new revenue and as a defensive pricing strategy it does little.

In the final analysis, this is exactly why it will fail. By creating a pricing plan that defends rather than attacks a market the company is conceding defeat in print and this strategy will have the effect of slowing audience growth online in the one segment that the paper requires, young people. I am willing to give Newsday and Cablevision some credit for being creative with a multichannel strategy that covers TV, print and online, but this pricing plan is a throwback to a subscription model that simply doesn’t work anymore.

[From Newsday.com Destined for Failure with Pay Wall | Venture Chronicles]

Well the numbers are in and after 3 months of running a paywall, Long Island based Newsday has attracted a whopping 35 subscribers to the website… not a typo, 3-5. Of course now management is running with some creative spin saying it’s 35 more than they expected to get and the pricing strategy was, as I exactly opined back in October, a strategy to defend the existing customer base who are getting access to the web site as part of their cable, prompting one Newsday reporter to observe that “we’re the freebie newsletter that comes with your HBO“.

Of course that explanation makes no sense at all because why spend $4m, according to the Dolan’s representative, to redesign and relaunch the website if it’s something extra that subscribers of the core cable service are getting as a freebie? It’ll take them 444 years to recover their investment at this rate.

Man Bites Dog or Who Really Owns a Community

tautonlogo

Taunton Press is a respected publisher known for a family of publications beginning with “Fine” as in Fine Cooking, Fine Homebuilding, Fine Woodworking, and Fine Gardening, we well as series of hard bound books and a premium subscription online service. Each of their publications features an accompanying online component that includes videos, blogs, and most importantly, a forum where enthusiasts have populated an impressive archive of content.

The online forums have been the subject of much controversy among the community members as Taunton replaced their old Prospero software, which was acquired by Mzinga a few years ago, and converted the forums to a Drupal-based system that they developed. Those of you who are familiar with Drupal know two things, it is a robust and much customized platform well suited for online content management, and it can be a real pain in the ass to work with.

I am, or more accurately said, I was an avid participant in the Fine Woodworking forum and like in all good communities found the content to be as engaging as the personalities that developed. When it became known that Taunton was doing a rolling conversion of all of their forums to the Drupal based system I decided to check out what the new layout looked like before the change was made in the Fine Woodworking forum. Oh the horror.

As is the case with any change it will take some getting used to but in this day and age there are well known design do’s and don’ts and Taunton displayed an impressive drive to break all of them. The color palettes were harsh on the eyes and made reading the text difficult, the 3 column layout compressed the main body text making reading an exercise in scrolling which was made all the more difficult by the threading of multiple messages with no break, the propensity for members to use signatures further complicated message threads, and the right sidebar was dominated by a Google Adwords widget (which has since been removed). The fact that Google ads feature so prominently on the forums (in the banners!) raises another point… Tauton is a publisher that sells, you know, advertising. Why are they not running their own advertiser messages on the forum?

Many of the obvious problems were fixed in the weeks following the conversion but that really begs the question that if these things were so obvious to everyone participating, why were they not obvious to the team that designed it in the first place? It’s also not clear on how they tested the design before committing it, if they tested it at all, and how they sought input from the community members who serve administrative functions in the forum. Lastly, the team that developed this apparently spent little time understanding the community needs, if they had they would have understood that older eyes don’t deal with strange contrast issues and running text.

I have been witness to a great many online forums and communities over the years and in my estimation what Taunton did is amateurish at best, both in terms of what they did and how they did it. The quality of the design reflects the work of a programmer who took an out of the box Drupal layout and tweaked it to fit what s/he believed would work rather than what was best. This is a blemish on the Taunton brand which is considered a high watermark for information design and high quality publishing.

The protest from the community members in all of the forums has been overwhelmingly negative and reached such a pitch that the VP of interactive features for Taunton, Jason Revzon, published an open letter to community members where he attempted to address the criticisms and defend his team but I wasn’t alone in finding that his tone was more defiant and petulant than engaging… he actually described the feedback they were getting as ranging from “grudging acceptance to mild mourning to xenophobic howls of rage”. Xenophobic? What is curious about his open letter is that he stated his credentials going back to his days at AOL (not sure he should admit to that) and has not responded to a single message; it is plainly obvious that Revzon’s idea of interactive is not what most people would consider interactive.

The reason why all of this is important is that they made this move for the well justified need to improve their visibility to search engines and better monetize the traffic, but in doing so they have alienated the small group of hardcore users that generate the majority of message traffic and serve as a stabilizing force in any online community. It is evident that the message traffic is down, way down, and increasingly posters are asking “where is everyone” or “what happened to so-and-so”. This is bad news for Taunton but something that they brought onto themselves with a poorly executed strategy that erased the goodwill that had been earned over the years.

No evidence supports this contention more than the fact that the members of the Fine Homebuilding community, called Breaktime, splintered off and started a competing community on Delphi Forums that looks exactly like the old Prospero layout that Taunton abandoned. Called Breaktime Classic, the forum has 436 members since launching last month (registered users, anyone can visit it) and 126 active as of my writing of this post, which I would be willing to bet is more active users than the official Taunton forum has right now.

The lesson that Taunton should be learning is that online communities represent a cooperative effort between the sponsoring entity – the folks that host the physical infrastructure – and the core community members that generate the content that makes the community compelling. When this balance is upset the turbulence is difficult to stabilize as the most valuable contributors leave and community momentum is lost. Companies have valid and understandable reasons for wanting to leverage online communities for editorial content, premium subscription services, and advertising, but all of that is premised on their actually being a vibrant community to build out those strategy objectives. Who owns a community? I say it’s the members and companies that lose sight of that lose far more than just a few ad dollars.

Opinion vs. Expertise

It’s not often that I disagree with Mike and I am not ready to fully do that here but he is not fully centered on the core issue either.

Kimball is correct that he should be better defining his brand and proving his worth — that’s what we’ve been saying all along. But you can do that without insulting the riff raff, as well. You can do that while embracing the “bottom up” process. You can do that without being a total snob that has no time for the people who actually pay your salary.

[From Cook's Illustrated Editor: I Wish All Those Amateurs Out There Would Just Shut Up | Techdirt]

The underlying issue that Kimball is pointing out is that the internet has become one great big !%$@$^ book club… everyone has to have an opinion about everything (don’t think I don’t realize the irony of ME writing THAT sentence). Kimball’s point is that real expertise is acquired through great effort, not just through the ability to peck away on the keyboard and hit publish, and that authority directly correlates to the relationship you can expect with your audience.

The second point that Kimball is right to make is that advertising has been the seed of destruction for magazines in the food space, but more broadly I would say across the board. Taken online the display advertising model deployed by the vast majority of publications is simply unsustainable and in the process they are destroying the delicate balance between content and advertising.

Case in point is the restyled Bon Appetit magazine, which has gotten really light on content and really heavy on advertising in all forms; if it takes you more than 15 minutes to read the last issue I would be very surprised, and color me shocked when advertiser products are rated “top 5″ out of, say, 7 tested products. It’s almost as bad as automotive magazines where no product is ever rated “don’t buy this piece of shit” because every possible product is being advertised in the magazine.

The fascination with lifestyle has also distorted Bon Appetit and alienated their core audience… who I cannot imagine are really that interested in celebrity chef interviews. The remake process for Bon Appetit probably resulted in a more intense discussion of what type of typefaces they would use than what type of content they would be providing their subscribers.

Cooks Illustrated goes into excruciating detail about food and how the process of preparing is affected by the chemistry of food. I have subscribed to this magazine for years and marvel at the lengths to which they will go to find the ideal process, ingredients, and tools, all the while challenging the conventional wisdom about what is the proper method. When it comes to presenting food expertise it is without question that serious foodies, professional and amateur alike, will agree that Kimball has earned his stripes in the expertise department.

Secondly, Cooks Illustrated does not have any advertising, it’s entirely content driven, and what that means is that Kimball’s interests are completely aligned with that of his readers. His is the only publication that I know of that actually has a “not recommended” category for product reviews, and they don’t hesitate on recommending products that are cheap grocery store staples if in fact they are the best ingredients based on taste.

Mike is right to point out that Kimball comes across as a petulant snob with nothing but disdain for food blogs and websites, but Mike fails to acknowledge the broader point that Kimball is making, which isn’t just about defining your brand, that the internet has devalued authority. This is a point I think we can all agree is an issue to be resolved (the measurement of authority).

Where we end up is at an interesting intersection triangulated at by both pieces, which is that the internet has not destroyed traditional publishing but rather exposes the vacuous nature of many established publishing brands. This leveling of the playing field has followed the path that many technology dependent industries have followed, which is that distribution and gatekeeping is increasingly not the dynamic that your business relies on but rather the ability to engage and sustain a valuable audience. Given Kimball’s resume and actual experience in building Cook’s Illustrated, I think he is exceptionally well qualified to opine on the state of affairs but like Mike I would appreciate a little more humility in the process.

Lastly, this is a very interesting discussion because with newspapers dead set on charging for online content we are going to see in realtime what the relationship between newspapers and readers really is.

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Facebook Connect and Anonymity

Image representing Facebook Connect as depicte...
Image via CrunchBase

As I look back over the evolution of blogs, community, and commenting/engagement on media sites, I have a mixed feeling about anonymity.

On one hand the ability to use a pseudonym has encouraged participation where it might not happen, but on the other it has enabled a raucous and at times a very mean spirited experience. Just take a look at the comment stream on any story on SFGate and you will see this in action, the result being that the comments end up not being informing and additive to the original story but rather a sideshow of people shouting at each other.

When a service is Facebook Connect enabled the login process for the subset of people that want to use it strips away pseudonyms and exposes your real name and profile information. The result is that we will end up with a two tier community model and this could be a very good thing.

Most people will be more thoughtful and, hopefully, cordial when their comments are attached to them as a person rather than the pseudonym “asshatman69″. People who are interested in civil debate and genuine participation over ranting will value services that have a growing population of Connect logins and as the pendulum shifts the result will be that the quality of the overall debate will rise as a consequence of the natural discounting of pseudonym posted comments. Real people with serious things to say will crowd out the shouters.

It also goes without saying that the ability to aggregate a stream that builds around a person rather than a site will enable new discovery capabilities.

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Marc Cuban Is Psyched About Cable

Cuban is PSYCHED! Hey, it’s not like he doesn’t have a reason to shake the pom-poms for cable, right? He’s also been pretty vocal about his belief that content owners will never give up the fees they get from cable and go to a free online distribution model.

Marc Cuban just told me advances in cable technology are more exciting than what’s happening on the Internet right now.

[From Marc Cuban Is Psyched About Cable - Media Money with Julia Boorstin - CNBC.com]

It’s pretty hard to argue with any credibility that cable is a hotbed of innovation. I look at my Comcast on demand and I’m struck by the fact that the big content developments they have to show off are used car listings. Who the hell cares?

It’s also worth pointing out that Comcast’s on demand services only work with their set top boxes, if you have a current generation flatscreen and want to take advantage of a cable card you will just get a tuner without any on demand capabilities. So much for the mythical cable technology advances that Cuban talks about.

Here’s the core problem with cable operators, they are operating a walled garden where any new content offerings have to come from them in order to reach the last inch between the TV and a person. It’s not just that the distribution network is closed but the development platform as well and this ensures that cable will never be a hotbed of content and application innovation.

Apple’s distribution system for the iPhone is closed but accessible, and by that I mean they have opened up the development tools and provided a low hurdle for access to the distribution capability that is the iTunes App Store. The result is that this is the place app developers want to be and because the flywheel is spinning more consumers want the device in spite of few hardware upgrades.

The cable companies, pretty much off of them, by contrast have little third party developer support and the integration of online to television content is weak, practically nonexistent. Video is the single hottest driver of audience today and the cable companies have done the bare minimum insofar as pursuing this an an online strategy.

To add insult to injury, cable companies have silo’ed themselves based on how content is distributed and have not invested in an integrated advertising sales effort, meaning the online initiatives run ad network content as often as their own sold inventory and because they believe they don’t know how to sell online they simply don’t try. This revenue suboptimization leads to a vicious cycle of underinvestment and experimentation that risks their core business.

Cuban may be “psyched” about cable because he has to given where his investments are but it’s hard, make that impossible, for any rational person to argue that cable has eclipsed the internet when it comes to innovation. Lastly, Cuban is wrong about one very significant part of the argument, bandwidth does not develop to meet applications but rather the expansion of bandwidth leads the development of applications that take advantage of bandwidth whether it be network or processing capability.

Is Twitter Killing RSS?

For media, there are two primary use cases for RSS, promotion of new content and content syndication. The latter is true plumbing that offers low cost, reliability and convenience while the former is a means for promoting new content through RSS client applications, widgets, iPhone apps, purpose specific apps, and so on… you see the headline and click on the content that interests you. Twitter is killing this use case for RSS.

Few media sites enable full text RSS feeds and for a good reason, it robs them of site traffic that is monetized whereas RSS feeds are not. This has always hamstrung the utility of RSS outside of blogs, yet still provided “good enough” utility that you could still use it.

Truth be told, publishers see RSS as something they should do while at the same time not really embrace it because while providing a convenient syndication mechanism the fact remains that it strips branding elements out, is notoriously difficult to monetize, and has stagnated as a technology because in the absence of branding and monetization there really isn’t much of a movement behind RSS to evolve the standard(s). Even microformats, something that should be obvious good stuff for publishers, have not been widely adopted for the same reasons, it provides utility for end users but not much benefit for publishers and content owners.

Something interesting happened along the way, Twitter achieved critical mass and bloggers and mainstream media alike adopted it to promote content. Every post I write is automatically tweeted out with the post title and link to source, not unlike what other sites do, and over the last year I have noticed a steady increase in referral traffic from Twitter as my followers grew and links to my posts were clicked on… in essence people are following me much like they subscribe to my RSS feed. I like it because the traffic returns to my site rather than be consumed in a RSS client that I can’t apply integrated analytics to, which has the effect of presenting a complete picture of site traffic without having to guess what my traffic actually is when I add in what I believe is bled off through my full text RSS feed.

In my own usage behaviors I noticed something starting when I followed ZDNetBlogs quite a while back, I stopped reading their RSS feed and started getting my story links through their twitter updates. Today I use the much improved Twitter search function to find profiles for the publications I like to read, following them and getting their content via links in tweets. For bloggers, the ability to follow provides not only the content updates in most cases but also the opportunity to interact with the authors and catch all their other updates that wouldn’t even show up in RSS.

Twitter provides publishers with several key advantages over RSS, namely the ability to control brand and force traffic back to their monetized site. Of course none of this precludes them from also using RSS to distribute content and there are equally compelling reasons for doing so but if I were to make a prediction it would be that publishers increasingly find primary utility for RSS in the backoffice while de-empathizing RSS for audience acquisition, in the process embracing Twitter as a mechanism for engaging an audience and promoting content at the same time.