Editors' Blog | Journalism.co.uk » Business

Jeff Jarvis: ‘Journalism has a model built on entitlement and emotion, not economics’

Joel Gunter — Fri, 13 May 2011 17:00:02 +0000

Jeff Jarvis keeping an eye on City professor George Brock. Image: Wannabe Hacks

Journalism is labouring under a business model based on entitlement and emotion, not economic reality, said leading media commentator Jeff Jarvis today at City Unversity’s Sustaining Local Journalism conference.

We need to understand the business model. I’m tired of the argument that journalists ‘should’ be paid, what successful business model was ever built on the word ‘should’?

Virtue is not a business model, just because we are doing good things that doesn’t mean we should be paid.

He said it was a model in need of disruption.

Some of my colleagues don’t like it when I use that term, disrupt. But welcome to the jungle.

We are a business that has to add value to the community in order to extract value back.

Jarvis set out three ways he thought that hyperlocal sites could make money in a difficult market space:

Developing new products and services to sell
Events (he cited US blogs running flea markets and buying club events)
The creation of sales networks

He only elaborated properly on the last of these, saying that individual bloggers are usually too small to interest city-wide advertisers but grouping together in a network can make them much more of a force to be reckoned with. “When it comes to journalism, he said, “we are better off doing things together”.

Philip John, director of the Lichfield Blog, blogged in March about the need for hyperlocal sites to build networks, writing that they bring about “a sort of collective consciousness whereby an improvement to one site is an improvement to all”.

With the likes of Addiply founder Rick Waghorn and Talk about Local’s Will Perrin acknowledging earlier in the day that just turning a profit as a local or hyperlocal blogger in the UK was rare, it was surprising to hear Jarvis talking about local blogs in US cities of 50,000–60,000 turning over $200,000 a year.

Jarvis admitted that is was a hard slog for hyperlocal sites to bring in ad money, but argued that there was a return in building networks. Giving AOL’s huge hyperlocal network Patch as an example, he said Patch was hiring a journalist for each of it 150 sites and paying them $40,000 a year. AOL wouldn’t be doing that if it didn’t think there was ad money there.

Asked whether journalists should be concerned about conflating journalism and sales – a recurring theme of the conference – Jarvis cited the example of Rafat Ali, founder of paidContent, who he said “had to go out and sell the ads at first, but retained his own moral compass”.

“It is probably our job as educators to guide students in these things”, he said, adding that in the end it is all down to credibility, which can be maintained even if a journalist is pitching in with the business side of things. Maintaining credibility is vital, he warned.

“If you lose credibility you lose your value.”

Also from today’s #citylocal conference: Hyperlocal ad sales and ‘the age of participation’

You can see a Chirpstory of some of the best tweets of the day at this link.

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#citylocal: Hyperlocal ad sales and the ‘age of participation’

Joel Gunter — Fri, 13 May 2011 10:55:44 +0000

Community participation is key to selling ads around local and hyperlocal content, Rick Waghorn told the audience at today’s Sustaining Local Journalism conference.

Waghorn, who founded local ad sales platform Addiply, cited the example of Howard Owens, publisher of New York hyperlocal site the Batavian.

Owens, he said, was a “hyperlocal superman” for turning a profit from ads on his site. The reason for Owens’ success? P2P. That’s “person-to-person”. Waghorn praised Owen for participating in the community that he covers, knowing the people, and knocking on doors to get ads.

It’s P2P that will make hyperlocal ad sales profitable, said Waghorn, not algorithms.

Borrowing a term from Emily Bell, he said that we are in “the age of participation”.

Editorial is participative and local, why shouldn’t advertising be?

But Owens’ is a rare case, said Waghorn, stressing that hyperlocal publishers in the UK need to get more comfortable with participating in the community for ad sales.

We can’t all be Howard Owens. You look around the hyperlocal scene in the UK and the art of selling is lost on most people. Is is a different, different trade craft to finding a story.

It strikes me as odd that most people would be more comfortable doing a death knock than going into a local pizza parlour and asking for a 10 quid ad. Why? That seems odd to me. I know what I’d rather do.

Waghorn’s said his own ad platform, Addiply, could help publishers reach out to their communities to make ad sales.

It’s a bottom-up ad solution that, in our tiny, tiny way goes into battle with the adsenses and all the big betworks.

And bottom up solutions are what works, he said, “the world is turning upside down”. Citing Howard Owens again, Waghorn claimed that the door-to-door salesman is the missing link for hyperlocal ad sales. He contrased Owens’ approach with that of the big hyperlocal networks like AOL’s Patch.

I’m not Patch, descending down to you from on high, I am the one knocking on your door. Knocking on your door seven or eight times before you give me an ad.

Waghorn’s message? Journalists will knock on doors to ask about deaths, and will knock on doors looking for stories, and if they want to make hyperlocal pay they will have to start thinking about ad sales the same way.

That message was echoed by Will Perrin of Talk About Local, who called the Guardian’s sales approach to advertising on its recently-closed Guardian local sites “very odd”.

If you want to sell ads around local content you have to have a team there on the ground.

Tweets tagged with the #citylocal hashtag can be seen in this Chirpstory.

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Media release: BBC Trust approves greater international focus for Worldwide

Rachel McAthy — Thu, 28 Apr 2011 14:27:48 +0000

The BBC Trust has approved a new strategy for BBC Worldwide to include a greater focus on international opportunities.

In a release published by the trust today, it confirmed that a new strategy was approved for BBC Worldwide, the commercial arm of the broadcaster, in March.

This follows an 18 month-long review of the BBC’s commercial activities, setting out changes to the future remit of BBC Worldwide.

The BBC Executive’s strategy for BBC Worldwide is now to develop a more integrated and ‘balanced’ internationally-focused portfolio that, within the agreed parameters, balances the need for growth with acceptable levels of risk. BBC Worldwide should also seek to invest in growth businesses which offer new rights monetisation opportunities.

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#Tip of the day from Journalism.co.uk – pitching business ideas

Rachel McAthy — Thu, 03 Mar 2011 09:30:05 +0000

This ‘how to’ on Poynter offers some great tips on pitching business ideas for funding of a new venture, especially when the potential investors are not journalists themselves. Tipster: Rachel McAthy.

To submit a tip to Journalism.co.uk, use this link – we will pay a fiver for the best ones published.

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#Tip of the day from Journalism.co.uk – news business ideas

Rachel McAthy — Tue, 01 Feb 2011 10:10:58 +0000

Entrepreneurial journalism: New media journalist and lecturer Adam Westbrook has posted five effective ideas on where to start when looking for a good business idea, such as helping to fill a void or improve current coverage. Tipster: Rachel McAthy.

To submit a tip to Journalism.co.uk, use this link – we will pay a fiver for the best ones published.

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#Tip of the day from Journalism.co.uk – setting up a media business

Rachel McAthy — Wed, 05 Jan 2011 09:45:24 +0000

Media Helping Media has a useful post by David Brewer looking at what he considers to be the four key steps to setting up a media business, including questions to ask about a target audience and other considerations such as a social network strategy and company values. Tipster: Rachel McAthy.

To submit a tip to Journalism.co.uk, use this link – we will pay a fiver for the best ones published.

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Ofcom to allow product placement on UK TV

Laura Oliver — Mon, 20 Dec 2010 11:51:24 +0000

Broadcast industry regulator Ofcom has announced that product placement will be allowed in UK TV programmes from 28 February 2011. The rules for paid-for references on radio broadcasts have also been revised.

Full news release on Ofcom’s website…

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magCulture: What happens when you don’t resubscribe

Laura Oliver — Fri, 10 Dec 2010 16:34:45 +0000

From magCulture, a bold ploy by a Polish newspaper to prompt its readers to resubscribe.

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jBlog: How Facebook credits could save newspapers

Laura Oliver — Tue, 07 Dec 2010 12:04:27 +0000

Dave Lee offers some interesting ideas on how a virtual gifts or credit model implemented via Facebook could help newspaper publishers rethink their revenue models.

Am I telling everyone that newspapers need to start deploying farm-based games across their sites? No, don’t be silly. What I am saying is that people’s desire to have Facebook Credits in order to play online games is, for editors, a gift from the gods. Suddenly, we’ve got millions of people – young people, don’t forget – who have credits. Credits which they didn’t buy to read news but, now they’ve got them won’t give much thought to spending a couple on content.

The newspaper would, on current rates (dictated by Facebook), take 70 per cent of each credit’s monetary value.

I believe, ladies and gents, that’s what we call a business model.

Full post on Dave Lee’s blog at this link…

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Press+ paid content system targets US college media

Laura Oliver — Fri, 03 Dec 2010 13:05:49 +0000

Press+, the paywall and micropayment system launched by US venture Journalism Online, has added new features to its technology aimed at signing up student media partners in the US and attracting payments from off-campus users, such as parents and alumni.

In 2011 the Daily O’Collegian at Oklahoma State University will launch the system on its website, ocolly.com, a release states.

The paper will collect a small fee from online readers who are outside the school’s immediate geographic area and who do not use an email address with an .edu affiliation and who read the paper online more than three times a month. This is achieved by deploying two aspects of the Press+ platform in tandem: the “meter” technology combined with “geo-targeting” technology.

Full release via Smudged Newsprint at this link…

Journalism Online was launched in April 2009, and won investment from News Corp in June 2010. Its first client was LancasterOnline.com, which began using the Press+ system in July to charge for its access to its obituary pages. Last month non-profit investigative journalism organisation ProPublica signed up to the system.

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Guardian: Trinity Mirror and DMGT mulled merger of regional media

Rachel McAthy — Fri, 03 Dec 2010 12:19:23 +0000

Trinity Mirror had “contemplated” selling some of its shares to the Daily Mail and General Trust earlier this year in return for DMGT’s regional newspaper group Northcliffe Media coming under its control, according to a report from the Guardian.

This would reportedly have been part of a merger which was allegedly being considered by the newspaper owners.

The basis of the deal was a scheme to bring together the two companies’ regional newspaper groups under the control of Trinity Mirror. In return Trinity would have offered a mixture of cash and shares to DMGT, giving it a strategic shareholder for the first time since the days of Robert Maxwell.

Negotiations between the two sides came to a halt, although Daily Mail executives have told their counterparts at Trinity that negotiations could resume in future.

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virtualeconomics: Why a Telegraph paywall might just work

Laura Oliver — Wed, 01 Dec 2010 11:49:41 +0000

News from the Financial Times yesterday that Telegraph.co.uk could start charging for content prompts this post from Seamus McCauley on why a Telegraph paywall might just work at this time:

The paywall strategy makes sense for the Telegraph if its management believes two things.

First, that the online news landscape is changing so that professional news – especially, perhaps, professional conservative newspaper journalism – becomes markedly scarcer online … Second, that the Telegraph’s current monetisation strategy – which is to attract a mass audience and show them display and search ads – is coming to an end.

There’s much more detail behind this arguments, so its worth reading the full post on virtualeconomics at this link…

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Telegraph.co.uk to charge for news online, says FT

Laura Oliver — Tue, 30 Nov 2010 15:50:46 +0000

The Financial Times is reporting that Telegraph Media Group is planning to introduce a charge for access to its online news content.

According to the report, the payment barrier could be brought in late next year and sources have told the FT that it will not be “an impregnable paywall like the Times” but most likely a metered system, as employed by the Financial Times itself.

A TMG spokesperson told the FT that no decisions have been made on the introduction of a paid-content model.

Full story on the FT at this link…

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Mail Online helps DMGT to significant increase in digital revenue

Rachel McAthy — Thu, 25 Nov 2010 16:28:11 +0000

Underlying digital revenues from newspaper websites owned by the Daily Mail and General Trust (DMGT) increased by 54 per cent in the year ending October, due to the “growing success of its primary website, Mail Online” according to the group’s preliminary results published today.

According to the published reports, circulation revenues at the group’s Associated Newspapers titles, which includes the Daily Mail, the Mail on Sunday and Metro, fell by an underlying two per cent while underlying advertising revenues were up seven per cent, said to have been driven by a “strong performance” from Metro.

Both the Daily Mail and Metro recorded their highest ever operating profit, the report adds.

DMGT’s regional arm Northcliffe recorded several declines, with underlying revenues down £16 million (six per cent), reported revenues have dropped by 8 per cent and advertising revenues were also down by 7 per cent.

Northcliffe: facing another tough year; UK advertising revenue in the first seven weeks down 7 per cent on last year, continuing year‐on‐year trend experienced in September (like‐for‐like decline of 8 per cent). Outlook for first quarter not expected to improve on this trend; will also be affected by higher newsprint costs; focus remains on reducing costs and new revenue opportunities.

Note: Underlying revenues are those adjusted for acquisitions and disposals made in the current and prior year.

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#Jpod: Why we need to view the news industry on an international scale

Rachel McAthy — Wed, 24 Nov 2010 14:58:10 +0000

The newspaper industry “is not going to dry up overnight” – these were the words from the Reuters Institute for the Study of Journalism’s new director of research Robert Picard, speaking at the launch of the institute’s new book ‘The Changing Business of Journalism and its Implications for Democracy’.

The book itself offers a series of essays on seven countries, looking at recent developments and trends in the news media. It was introduced at the launch event by Picard and the book’s editors, institute director Dr David Levy and research fellow Dr Rasmus Nielsen.

Nielsen told the audience that the industry and business of journalism is today widely seen as in a “potentially terminal crisis”, spurred on by some imported American debates. He said the book aimed to make better sense of how these generalisations hold up.

While many of these are common challenges, there are also persistent differences in how the industries developed in different countries. We need to understand not only the common challenges but persistent differences.

For example, according to the book’s comparative tables featuring the most recent figures, newspaper revenues were down 30 per cent in the USA, compared with 10 per cent in Germany. “Germany weathered the storm and can turn its attention to strategic challenges,” Nielsen said.

Fellow editor Dr David Levy said one of the benefits of the book is that it provides a portfolio of different policy approaches and highlights those which need to be considered, shown in summary below:

Stimulating supply – tax breaks, new funding
Terms of trade – aggregators and copyright, ownership/plurality rules, public service media and commercial media
Demand – (only raised in one area of the book)

Before handing over to a panel, Picard said there was a great business misunderstanding in the journalism industry.

The last quarter of the last century was unusually enriching for media. Large firms were created through consolidation, which created a great deal of wealth and produced enormous profits.

There were far fewer financial resources than today in the 1950s, 60s and 70s. We have to think in broader terms when looking at the health of the industry.

There is a good deal of reason to be concerned. Revenues are leaving and not coming back, there are shifts in how people are using information. But the newspaper industry is in fact a very wealthy industry and producing more money worldwide than other forms of media.

It is not going to dry up overnight.

Listen below for Journalism.co.uk’s podcast, including interviews with the book’s editors and members of the launch event panel, Professor George Brock, head of journalism at City University and Professor Natalie Fenton from Goldsmiths, University of London.

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